EXHIBIT 10.3
EXECUTION COPY
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INTERCREDITOR AGREEMENT
Dated as of March 3, 2006
among
WACHOVIA BANK, NATIONAL ASSOCIATION,
as First Lien Representative,
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Second Lien Representative,
OPEN SOLUTIONS INC.,
as Borrower,
and
THE OTHER LOAN PARTIES NAMED HEREIN,
as Loan Parties
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms ..................................... 2
ARTICLE II
LIEN PRIORITIES
SECTION 2.01. Subordination of Liens .................................... 4
SECTION 2.02. Nature of First Lien Obligations .......................... 5
SECTION 2.03. Agreements Regarding Actions to Perfect Liens ............. 5
SECTION 2.04. No New Liens .............................................. 6
ARTICLE III
ENFORCEMENT RIGHTS
SECTION 3.01. Exclusive Enforcement ..................................... 7
SECTION 3.02. Second Lien Enforcement Limitations and Waivers ........... 7
SECTION 3.03. Judgment Creditors ........................................ 9
SECTION 3.04. Cooperation ............................................... 9
SECTION 3.05. Purchase Right ............................................ 9
SECTION 3.06. No Additional Rights For the Borrower Hereunder ........... 9
SECTION 3.07. Actions Upon Breach ....................................... 10
ARTICLE IV
APPLICATION OF PROCEEDS OF COLLATERAL; DISPOSITIONS AND
RELEASES OF COLLATERAL; INSPECTION AND INSURANCE
SECTION 4.01. Application of Proceeds; Turnover Provisions .............. 10
SECTION 4.02. Releases of Second-Priority Lien .......................... 11
SECTION 4.03. Inspection Rights and Insurance ........................... 11
ARTICLE V
INSOLVENCY PROCEEDINGS
SECTION 5.01. Filing of Motions ......................................... 12
SECTION 5.02. Financing Matters ......................................... 12
SECTION 5.03. Relief From the Automatic Stay ............................ 13
SECTION 5.04. Adequate Protection ....................................... 13
SECTION 5.05. Avoidance Issues .......................................... 13
SECTION 5.06. Asset Dispositions in an Insolvency Proceeding, etc. ...... 14
SECTION 5.07. Separate Grants of Security and Separate Classification ... 14
SECTION 5.08. No Waivers of Rights of First Lien Secured Parties ........ 14
SECTION 5.09. Plans of Reorganization ................................... 15
SECTION 5.10. Reorganization Securities ................................. 15
SECTION 5.11. Post-Petition Claims ...................................... 15
SECTION 5.12. Waiver .................................................... 15
SECTION 5.13. Expense Claims ............................................ 15
SECTION 5.14. Other Matters ............................................. 16
ARTICLE VI
SECOND LIEN COLLATERAL DOCUMENTS AND FIRST LIEN COLLATERAL DOCUMENTS
SECTION 6.01. Collateral Documents ...................................... 16
SECTION 6.02. Amendments to First Lien Documents and Second Lien
Documents ................................................. 17
ARTICLE VII
RELIANCE; WAIVERS; ETC.
SECTION 7.01. Reliance .................................................. 17
SECTION 7.02. No Warranties or Liability ................................ 18
SECTION 7.03. No Waivers ................................................ 18
ARTICLE VIII
OBLIGATIONS UNCONDITIONAL
SECTION 8.01. First Lien Obligations Unconditional ...................... 18
SECTION 8.02. Second Lien Obligations Unconditional ..................... 19
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Conflicts ................................................. 19
SECTION 9.02. Continuing Nature of Provisions ........................... 19
SECTION 9.03. Amendments; Waivers ....................................... 19
SECTION 9.04. Information Concerning Financial Condition of the Borrower
and the other Loan Parties ................................ 20
SECTION 9.05. GOVERNING LAW ............................................. 20
SECTION 9.06. SUBMISSION TO JURISDICTION ................................ 20
SECTION 9.07. Notices ................................................... 21
SECTION 9.08. Similar Liens and Agreements .............................. 21
SECTION 9.09. Subrogation ............................................... 21
SECTION 9.10. Successors and Assigns .................................... 21
SECTION 9.11. Severability .............................................. 22
SECTION 9.12. Counterparts; Integration; Effectiveness .................. 22
SECTION 9.13. Provisions to Define Relative Rights ...................... 22
INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT (as amended or otherwise modified from time to
time, this "AGREEMENT"), dated as of March 3, 2006, among WACHOVIA BANK,
NATIONAL ASSOCIATION ("WACHOVIA"), as collateral agent (in such capacity, with
its successors and assigns, the "FIRST LIEN REPRESENTATIVE") for the First Lien
Secured Parties (as hereinafter defined), Wachovia, as collateral agent (in such
capacity, with its successors and assigns, the "SECOND LIEN REPRESENTATIVE") for
the Second Lien Secured Parties (as hereinafter defined), OPEN SOLUTIONS INC., a
Delaware corporation (the "BORROWER"), the other Loan Parties (as hereinafter
defined) listed on the signatures pages hereof and such other parties as shall
from time to time become party hereto.
PRELIMINARY STATEMENTS:
(1) The Borrower, the other Loan Parties, the First Lien Representative,
and certain financial institutions and other lenders are parties to the First
Lien Senior Secured Credit Agreement dated as of March 3, 2006 (as amended,
amended and restated, supplemented, subject to a Refinancing (as hereinafter
defined) or otherwise modified from time to time, in accordance with the terms
hereof, the "FIRST LIEN CREDIT AGREEMENT"), pursuant to which such financial
institutions and other lenders have agreed to make loans and extend other
financial accommodations to the Borrower.
(2) The Borrower, the other Loan Parties, the Second Lien Representative,
and certain financial institutions and other lenders are parties to the Second
Lien Senior Secured Term Loan Agreement dated as of March 3, 2006 (as amended,
amended and restated, supplemented, subject to a Refinancing or otherwise
modified from time to time in accordance with the terms hereof, the "SECOND LIEN
CREDIT AGREEMENT"), pursuant to which such financial institutions and other
lenders have agreed to make loans and extend other financial accommodations to
the Borrower.
(3) The Borrower and the other Loan Parties have granted to the First Lien
Representative, for the benefit of the First Lien Secured Parties, security
interests in the Collateral (as hereinafter defined) as security for payment and
performance of the First Lien Obligations (as hereinafter defined) arising under
or in connection with the First Lien Credit Agreement.
(4) The Borrower and the other Loan Parties have also granted to the Second
Lien Representative, for the benefit of the Second Lien Secured Parties,
second-priority security interests in the Collateral as security for payment and
performance of the Second Lien Obligations (as hereinafter defined) arising
under or in connection with the Second Lien Credit Agreement.
(5) The First Lien Secured Parties under the First Lien Credit Agreement
have agreed to permit the grant of such second-priority security interests to
secure such Second Lien Obligations, but only on and subject to the terms and
conditions set forth in this Intercreditor Agreement.
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NOW THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, the parties hereto have agreed as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. (a) The following terms, as used
herein, have the following meanings:
"BANKRUPTCY CODE" means the United States Bankruptcy Code (11 U.S.C.
Section 101 et seq.), as amended from time to time.
"COLLATERAL" means all assets that are both First Lien Collateral and
Second Lien Collateral.
"COMPARABLE SECOND LIEN COLLATERAL DOCUMENT" means, in relation to any
Collateral subject to any First Lien Collateral Document, that Second Lien
Collateral Document that creates a security interest in the same Collateral,
granted by the same grantor thereunder.
"DIP FINANCING" has the meaning specified in Section 5.02 of this
Agreement.
"ENFORCEMENT ACTION" means, with respect to the First Lien Obligations or
the Second Lien Obligations, the exercise of any rights and remedies with
respect to any Collateral securing such obligations or the commencement or
prosecution of enforcement of any of the rights and remedies under, as
applicable, the First Lien Collateral Documents or the Second Lien Collateral
Documents, or applicable law, including without limitation the exercise of any
rights of set-off or recoupment, and the exercise of any rights or remedies of a
secured creditor under the UCC of any applicable jurisdiction or in an
Insolvency Proceeding.
"FIRST LIEN COLLATERAL" means the "Collateral" as defined in the First Lien
Credit Agreement.
"FIRST LIEN COLLATERAL DOCUMENTS" means the "Collateral Documents" as
defined in the First Lien Credit Agreement.
"FIRST LIEN LOAN DOCUMENTS" means the "Loan Documents" as defined in the
First Lien Credit Agreement.
"FIRST LIEN OBLIGATIONS" means the "Secured Obligations" as defined in the
First Lien Credit Agreement.
"FIRST LIEN REPRESENTATIVE" has the meaning specified in the recital of
parties to this Agreement.
"FIRST LIEN SECURED PARTIES" means the "Secured Parties" as defined in the
First Lien Credit Agreement.
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"INSOLVENCY PROCEEDING" means any proceeding in respect of bankruptcy,
insolvency, winding up, receivership, dissolution or assignment for the benefit
of creditors, in each of the foregoing events whether under the Bankruptcy Code
or any similar federal, state or foreign bankruptcy, insolvency, reorganization,
receivership or similar law.
"LIEN" has the meaning specified in the First Lien Credit Agreement.
"LOAN PARTIES" means the "Loan Parties" as defined in the First Lien Credit
Agreement and Second Lien Credit Agreement.
"PAYMENT IN FULL" means (a) the payment in full in cash of (i) all
principal, reimbursement obligations and interest (including any Post-Petition
Interest) in respect of the First Lien Obligations and (ii) all other First Lien
Obligations that are claimed within 90 days of the last date on which all
principal and interest in respect of the First Lien Obligations shall have been
paid in full in cash and (b) the termination in full of all commitments to
extend credit in respect of, and the termination, expiration or cash
collateralization of all obligations with respect to all letters of credit
relating to, the First Lien Obligations. "PAID IN FULL" shall have the
correlative meaning.
"PERSON" has the meaning specified in the First Lien Credit Agreement.
"POST-PETITION INTEREST" means any interest or entitlement to fees or
expenses that accrues after the commencement of any Insolvency Proceeding,
whether or not allowed or allowable in any such Insolvency Proceeding.
"PURCHASE EVENT" has the meaning specified in Section 3.05 of this
Agreement.
"REFINANCING" has the meaning specified in Section 6.02 of this Agreement.
"SECOND LIEN COLLATERAL" means "Collateral" as defined in the Second Lien
Credit Agreement.
"SECOND LIEN COLLATERAL DOCUMENTS" means "Collateral Documents" as defined
in the Second Lien Credit Agreement.
"SECOND LIEN ENFORCEMENT DATE" means the date, after the occurrence of an
Event of Default (under and as defined in the Second Lien Credit Agreement),
that is 180 days after the First Lien Representative's receipt of written notice
from the Second Lien Representative certifying that (a) an Event of Default
(under and as defined in the Second Lien Credit Agreement) has occurred and is
continuing and (b) the Second Lien Obligations are currently due and payable in
full (whether as a result of acceleration thereof or otherwise) in accordance
with terms of the Second Lien Credit Agreement; provided that the Second Lien
Enforcement Date shall be stayed and shall not occur and shall be deemed not to
have occurred (i) at any time the First Lien Representative or the First Lien
Secured Parties have commenced any Enforcement Action with respect to the
Collateral, (ii) at any time the First Lien Obligations are then due and payable
in full (whether as a result of acceleration thereof or otherwise) in accordance
with the terms of the First Lien Credit Agreement (iii) at any time any Loan
Party is then a debtor under or with respect to (or otherwise subject to) any
Insolvency Proceeding or (iv)
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if the acceleration of the Second Lien Obligations (if any) is rescinded in
accordance with the terms of the Second Lien Credit Agreement or otherwise.
"SECOND LIEN LOAN DOCUMENTS" means the "Loan Documents" as defined in the
Second Lien Credit Agreement.
"SECOND LIEN OBLIGATIONS" means the "Secured Obligations" as defined in the
Second Lien Credit Agreement.
"SECOND LIEN REPRESENTATIVE" has the meaning specified in the recital of
parties to this Agreement.
"SECOND LIEN SECURED PARTIES" means the "Secured Parties" as defined in the
Second Lien Credit Agreement.
"SECURED PARTIES" means, collectively, the First Lien Secured Parties and
the Second Lien Secured Parties.
"SECURITY AGREEMENT" has the respective meanings specified in the First
Lien Credit Agreement and the Second Lien Credit Agreement; collectively, the
"SECURITY AGREEMENTS".
"STANDSTILL PERIOD" has the meaning specified in Section 3.01 of this
Agreement.
"UCC" has the meaning specified in the Security Agreements.
(b) Any other defined terms used and not defined herein shall have the
meanings specified in the Preliminary Statements contained herein or specified
in the First Lien Credit Agreement.
ARTICLE II
LIEN PRIORITIES
SECTION 2.01. Subordination of Liens. (a) Any and all Liens now
existing or hereafter created or arising in favor of any Second Lien Secured
Party securing the Second Lien Obligations, regardless of how acquired, whether
by grant, statute, operation of law, subrogation or otherwise are expressly
junior in priority, operation and effect to any and all Liens now existing or
hereafter created or arising in favor of the First Lien Secured Parties securing
the First Lien Obligations, notwithstanding (i) anything to the contrary
contained in any agreement or filing to which any Second Lien Secured Party may
now or hereafter be a party, and regardless of the time, order or method of
grant, attachment, recording or perfection of any financing statements or other
security interests, assignments, pledges, deeds, mortgages and other liens,
charges or encumbrances or any defect or deficiency or alleged defect or
deficiency in any of the foregoing, (ii) any provision of the UCC or any
applicable law or any First Lien Collateral Document or Second Lien Collateral
Document or any other circumstance whatsoever and (iii) the fact that any such
Liens in favor of any First Lien Secured Party securing any of the First Lien
Obligations are (x) subordinated to any Lien securing any obligation of any Loan
Party other than the Second Lien Obligations or (y) otherwise subordinated,
voided, avoided, invalidated or lapsed.
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(b) No First Lien Secured Party or Second Lien Secured Party shall
object to or contest, or support any other Person in contesting or objecting to,
in any proceeding (including without limitation, any Insolvency Proceeding), the
validity, extent, perfection, priority or enforceability of any security
interest in the Collateral granted to the other. Notwithstanding any failure by
any First Lien Secured Party or Second Lien Secured Party to perfect its
security interests in the Collateral or any avoidance, invalidation or
subordination by any third party or court of competent jurisdiction of the
security interests in the Collateral granted to the First Lien Secured Parties
or the Second Lien Secured Parties, the priority and rights as between the First
Lien Secured Parties and the Second Lien Secured Parties with respect to the
Collateral shall be as set forth herein.
SECTION 2.02. Nature of First Lien Obligations. The Second Lien
Representative on behalf of itself and the other Second Lien Secured Parties
acknowledges that a portion of the First Lien Obligations are revolving in
nature and that the amount thereof that may be outstanding at any time or from
time to time may be increased or reduced and subsequently reborrowed, and that
the terms of the First Lien Obligations may be modified, extended or amended
from time to time, and that the aggregate amount of the First Lien Obligations
may be increased (so long as the principal amount of any additional credit
extended thereunder does not exceed the maximum amount available thereunder on
the Effective Date by more than $75,000,000; it being understood that all
Obligations under any Secured Hedge Agreements permitted thereunder shall be
excluded for purposes of determining such increased amount), replaced or
refinanced (including replacement or refinancing of such increased amounts and
including under the same or different documents and with the same or different
lenders and/or representatives, all of which shall be deemed to be the First
Lien Credit Agreement wherever such term is used herein), in each event, without
notice to or consent by the Second Lien Secured Parties and without affecting
the provisions hereof (subject, in each case, to the provisions set forth in
Section 9.01 of the First Lien Credit Agreement). The lien priorities provided
in Section 2.01 shall not be altered or otherwise affected by any such
amendment, modification, supplement, extension, repayment, reborrowing,
increase, replacement, renewal, restatement or refinancing of either the First
Lien Obligations or the Second Lien Obligations, or any portion thereof.
SECTION 2.03. Agreements Regarding Actions to Perfect Liens. (a) The
Second Lien Representative on behalf of itself and the other Second Lien Secured
Parties agrees that all mortgages and other real estate instruments, UCC-1
financing statements, patent, trademark or copyright filings or other filings or
recordings filed or recorded by or on behalf of the Second Lien Representative
or any Second Lien Secured Party shall be in form satisfactory to the First Lien
Representative.
(b) Without the prior written consent of the First Lien
Representative, no Second Lien Collateral Document may be amended, supplemented
or otherwise modified or entered into nor may any new document be entered into,
that provides any collateral security in favor of the Second Lien Representative
or any Second Lien Secured Party from any Loan Party. Each of the Second Lien
Representative and the Second Lien Secured Parties agrees that each Second Lien
Collateral Document shall include the following language (with defined terms
conformed as shall be satisfactory to the First Lien Representative):
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"Notwithstanding anything herein to the contrary, the liens and
security interest granted to the Second Lien Representative, for the benefit of
the Second Lien Secured Parties, pursuant to this Agreement and the exercise of
any right or remedy by the Second Lien Representative, for the benefit of the
Second Lien Secured Parties, hereunder are subject to the provisions of that
certain Intercreditor Agreement, dated as of March 3, 2006 (as amended,
restated, supplemented or otherwise modified from time to time, the
"INTERCREDITOR AGREEMENT"), among Wachovia Bank, National Association, as First
Lien Representative, Wachovia Bank, National Association, as Second Lien
Representative, Open Solutions Inc., a Delaware corporation, and such other
parties as may be added thereto from time to time in accordance with the terms
thereof. In the event of any conflict between the terms of the Intercreditor
Agreement and this Agreement, the terms of the Intercreditor Agreement shall
govern."
(c) The First Lien Representative, on behalf of itself and the other
First Lien Secured Parties, hereby acknowledges that, to the extent that it
holds, or a third party holds on its behalf, physical possession of or "control"
(as defined in the UCC) over Collateral pursuant to any of the First Lien
Collateral Documents, such possession or control is also for the benefit of the
Second Lien Representative and the other Second Lien Secured Parties solely to
the extent required to perfect their security interest in such Collateral.
Nothing in the preceding sentence shall be construed to impose any duty on any
First Lien Secured Party (or any third party acting on its behalf) with respect
to such Collateral or provide the Second Lien Representative or any other Second
Lien Secured Party with any rights with respect to such Collateral beyond those
specified in this Agreement and the Second Lien Collateral Documents, provided
that subsequent to the Payment in Full of the First Lien Obligations, the
applicable First Lien Secured Party shall (i) deliver to the Second Lien
Representative, at the Borrower's sole cost and expense, the Collateral in its
possession or control together with any necessary endorsements to the extent
required by the Second Lien Collateral Documents or (ii) direct and deliver such
Collateral as a court of competent jurisdiction otherwise directs, and provided
further that the provisions of this Agreement are intended solely to govern the
respective Lien priorities as between the First Lien Secured Parties and the
Second Lien Secured Parties and shall not impose on the First Lien Secured
Parties any obligations in respect of the disposition of any Collateral (or any
proceeds thereof) that would conflict with prior perfected Liens or any claims
thereon in favor of any other Person that is not a Secured Party.
SECTION 2.04. No New Liens. So long as the First Lien Obligations have
not been Paid in Full, the parties hereto agree that if any Second Lien Secured
Party shall acquire or hold any Lien on any assets of any Loan Party securing
any Second Lien Obligation which assets are not also subject to the
first-priority Lien of the First Lien Secured Parties under the First Lien
Collateral Documents, then the Second Lien Representative and the Borrower will
immediately notify the First Lien Representative thereof in reasonable detail
and, upon demand by the First Lien Representative or any First Lien Secured
Party, will without the need for any further consent of any other Second Lien
Secured Party, notwithstanding anything to the contrary in any other Second Lien
Collateral Document, either (a) release such Lien or (b) assign it to the First
Lien Secured Parties as security for the First Lien Obligations (in which case
the Second Lien Secured Parties may retain a second-priority lien on such assets
subject to the terms hereof). To the extent that the foregoing provisions are
not complied with for any reason, without limiting any other rights and remedies
available to the First Lien Secured Parties, the Second Lien Representative and
the other Second Lien Secured Parties agree that any amounts received by or
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distributed to any of them pursuant to or as a result of Liens granted in
contravention of this Section 2.04 shall be subject to Section 4.01.
ARTICLE III
ENFORCEMENT RIGHTS
SECTION 3.01. Exclusive Enforcement. So long as the First Lien
Obligations have not been Paid in Full, whether or not an Insolvency Proceeding
has been commenced by or against any Loan Party, the First Lien Representative
shall have the exclusive right to take and continue, or not to take (subject to
clause (a) below), any Enforcement Action with respect to the Collateral,
without any consultation with or consent of any Second Lien Secured Party, but
subject to the proviso set forth in Section 5.01, and (a) from the date hereof
until the occurrence of the Second Lien Enforcement Date (such period, the
"STANDSTILL PERIOD"), neither the Second Lien Representative nor any Second Lien
Secured Party shall exercise or seek to exercise any rights or remedies
(including any right of set-off or recoupment) with respect to any Second Lien
Collateral (including, without limitation, the exercise of any right under any
lockbox agreement, account control agreement, landlord waiver or bailee's letter
or similar agreement or arrangement to which the Second Lien Representative or
any Second Lien Secured Party may be a party) or institute or commence (or join
with any other Person in commencing) any enforcement, collection, execution,
levy or foreclosure action or proceeding (including, without limitation, any
Insolvency Proceeding) with respect to any Lien held by it under the Second Lien
Collateral Documents or otherwise, and (b) neither the Second Lien
Representative nor any other Second Lien Secured Party shall (i) contest,
protest or object to, or otherwise interfere with, hinder or delay, any
foreclosure proceeding or action brought by the First Lien Representative or any
other First Lien Secured Party, any rights and remedies relating to the
Collateral under the First Lien Collateral Documents or otherwise, provided that
the respective interests of the Second Lien Secured Parties attach to the
proceeds thereof, subject to the relative priorities described in Section 4.01
hereof, or (ii) contest, protest or object to the forbearance by the First Lien
Representative or the First Lien Secured Parties from bringing or pursuing any
foreclosure proceeding or action or any other exercise of any rights or remedies
relating to any Collateral. Each of the Second Lien Representative and each
other Second Lien Secured Party hereby acknowledges and agrees that no covenant,
agreement or restriction contained in the Second Lien Collateral Documents or in
the Second Lien Credit Agreement or otherwise shall be deemed to restrict in any
way the rights and remedies of the First Lien Representative or the other First
Lien Secured Parties with respect to the Collateral as set forth in this
Agreement and the First Lien Collateral Documents. Upon the occurrence and
during the continuance of a default or an event of default in respect of a First
Lien Obligation permitting the First Lien Representative to take any Enforcement
Action under any First Lien Collateral Document, the First Lien Representative
may take and continue any Enforcement Action with respect to the First Lien
Obligations and the Collateral exclusively and in such order and manner as it
may determine in its sole discretion.
SECTION 3.02. Second Lien Enforcement Limitations and Waivers. The
Second Lien Representative and each other Second Lien Secured Party hereby
acknowledges and agrees that no covenant, agreement or restriction contained in
the Second Lien Collateral Documents or in the Second Lien Credit Agreement or
otherwise shall be deemed to restrict in any way the rights and remedies of the
First Lien Representative or the other First Lien Secured Parties with respect
to the Collateral as set forth in this Agreement and the First Lien Collateral
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Documents. In addition, the Second Lien Representative and each other Second
Lien Secured Party agrees that, until the First Lien Obligations have been Paid
in Full, subject to the proviso set forth in Section 5.01:
(a) they will not take or cause to be taken any action, the purpose or
effect of which is to make any Lien in respect of any Second Lien
Obligation pari passu with or senior to, or to give any Second Lien Secured
Party any preference or priority relative to, the Liens with respect to the
First Lien Obligations or the First Lien Secured Parties with respect to
any of the Collateral;
(b) they will not oppose, object to, interfere with, hinder or delay,
in any manner, whether by judicial proceedings (including without
limitation the filing of an Insolvency Proceeding) or otherwise, (i) any
foreclosure, sale, lease, exchange, transfer or other disposition of the
Collateral by the First Lien Representative or any other First Lien Secured
Party or (ii) any other Enforcement Action taken by or on behalf of the
First Lien Representative or any other First Lien Secured Party;
(c) they have no right to (i) direct either the First Lien
Representative or any other First Lien Secured Party to exercise any right,
remedy or power with respect to the Collateral or pursuant to the First
Lien Collateral Documents or (ii) consent or object to the exercise by the
First Lien Representative or any other First Lien Secured Party of any
right, remedy or power with respect to the Collateral or pursuant to the
First Lien Collateral Documents or to the timing or manner in which any
such right is exercised or not exercised (or, to the extent they may have
any such right described in this clause (c), whether as a second-priority
lien creditor or otherwise, they hereby irrevocably waive such right);
(d) they will not institute any suit or other proceeding or assert in
any suit, Insolvency Proceeding or other proceeding any claim against
either the First Lien Representative or any other First Lien Secured Party
seeking damages from or other relief by way of specific performance,
instructions or otherwise, with respect to, and neither the First Lien
Representative nor any other First Lien Secured Party shall be liable for,
any action taken or omitted to be taken by the First Lien Representative or
any other First Lien Secured Party with respect to the Collateral or
pursuant to the First Lien Collateral Documents;
(e) they will not make any judicial or nonjudicial claim or demand or
commence any judicial or non-judicial proceedings against any Loan Party or
affiliates under or with respect to any Second Lien Collateral Document
seeking payment or damages from or other relief by way of specific
performance, instructions or otherwise under or with respect to any Second
Lien Collateral Document (other than filing a proof of claim) or exercise
any right, remedy or power under or with respect to, or otherwise take any
action to enforce, other than filing a proof of claim, any Second Lien
Collateral Document;
(f) they will not (i) commence judicial or nonjudicial foreclosure
proceedings with respect to, seek to have a trustee, receiver, liquidator
or similar official appointed for
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or over, exercise any right, remedy or power with respect to, or otherwise
take any action to enforce their interest in or realize upon, the
Collateral or pursuant to the Second Lien Collateral Documents or (ii)
attempt any action to take possession of any Collateral; and
(g) they will not seek, and hereby waive any right, to have the
Collateral or any part thereof marshaled upon any foreclosure or other
disposition of the Collateral.
SECTION 3.03. Judgment Creditors. In the event that any Second Lien
Secured Party becomes a judgment lien creditor in respect of Collateral as a
result of its enforcement of its rights as an unsecured creditor, such judgment
lien shall be subject to the terms of this Agreement for all purposes (including
in relation to the First Lien Obligations) as the other Liens securing the
Second Lien Obligations (created pursuant to the Second Lien Collateral
Documents) subject to this Agreement.
SECTION 3.04. Cooperation. The Second Lien Representative, on behalf
of itself and the other Second Lien Secured Parties, agrees that each of them
shall take such actions as the First Lien Representative shall reasonably
request in connection with the exercise by the First Lien Secured Parties of
their rights set forth herein.
SECTION 3.05. Purchase Right. Without prejudice to the enforcement of
the First Lien Secured Parties' remedies, the First Lien Secured Parties agree
that at any time during the 60-day period following (a) acceleration of the
First Lien Obligations in accordance with the terms of the First Lien Credit
Agreement or (b) the commencement of an Insolvency Proceeding (each, a "PURCHASE
EVENT"), one or more of the Second Lien Secured Parties may request, and the
First Lien Secured Parties hereby offer the Second Lien Secured Parties the
option, to purchase all, but not less than all, of the aggregate amount of First
Lien Obligations outstanding at the time of purchase at par, without warranty or
representation or recourse (except for representations and warranties required
to be made by assigning lenders pursuant to the Assignment and Acceptance (as
such term is defined in the First Lien Credit Agreement)). If such right is
exercised within the aforementioned 60-day period, the parties shall endeavor to
close promptly thereafter but in any event within ten (10) Business Days of the
request. If one or more of the Second Lien Secured Parties exercise such
purchase right, it shall be exercised pursuant to documentation mutually
acceptable to each of the First Lien Representative and the Second Lien
Representative. For the avoidance of doubt, none of the Second Lien Secured
Parties shall be obligated or "dragged along" to exercise such purchase right by
reason of any other Second Lien Secured Party's exercise of such purchase right.
If none of the Second Lien Secured Parties exercise such right, the First Lien
Secured Parties shall have no further obligations pursuant to this Section 3.05
for such Purchase Event and may take any further actions in their sole
discretion in accordance with the First Lien Collateral Documents, the First
Lien Credit Agreement and this Agreement.
SECTION 3.06. No Additional Rights For the Borrower Hereunder. Except
as provided in Section 3.07, if any First Lien Secured Party or Second Lien
Secured Party shall enforce its rights or remedies in violation of the terms of
this Agreement, the Borrower shall not be entitled to use such violation as a
defense to any action by any First Lien Secured Party or Second Lien Secured
Party, or to assert such violation as a counterclaim or basis for set off or
recoupment against any First Lien Secured Party or Second Lien Secured Party.
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SECTION 3.07. Actions Upon Breach. (a) If any Second Lien Secured
Party, contrary to this Agreement, commences or participates in any action or
proceeding against the Borrower or the Collateral, the Borrower may interpose as
a defense or dilatory plea the making of this Agreement, and any First Lien
Secured Party may intervene and interpose such defense or plea in its or their
name or in the name of the Borrower.
(b) Should any Second Lien Secured Party, contrary to this Agreement,
in any way take, attempt to or threaten to take any action with respect to the
Collateral (including, without limitation, any attempt to realize upon or
enforce any remedy with respect to this Agreement), or fail to take any action
required by this Agreement, the First Lien Representative or any First Lien
Secured Party (in its or their own name or in the name of the Borrower) or the
Borrower may obtain relief against such Second Lien Secured Party by injunction,
specific performance and/or other appropriate equitable relief, it being
understood and agreed by the Second Lien Representative on behalf of each Second
Lien Secured Party that (i) the First Lien Secured Parties' damages from its
actions may at that time be difficult to ascertain and may be irreparable, and
(ii) each Second Lien Secured Party waives any defense that the Borrower and/or
the First Lien Secured Parties cannot demonstrate damage and/or be made whole by
the awarding of damages.
ARTICLE IV
APPLICATION OF PROCEEDS OF COLLATERAL; DISPOSITIONS AND RELEASES OF
COLLATERAL; INSPECTION AND INSURANCE
SECTION 4.01. Application of Proceeds; Turnover Provisions. The Second
Lien Representative, on behalf of itself and the other Second Lien Secured
Parties, agrees that it will not take or receive any Collateral or any proceeds
of Collateral in connection with the exercise of any right or remedy (including
set-off or recoupment) with respect to any Collateral, and that any Collateral
or proceeds taken or received by it for any reason will be paid over to the
First Lien Representative, unless and until all First Lien Obligations have been
Paid in Full. Without limiting the generality of the foregoing, until all First
Lien Obligations have been Paid in Full, the sole right of the Second Lien
Representative and the other Second Lien Secured Parties with respect to the
Collateral is to hold a Lien on the Collateral pursuant to the Second Lien
Collateral Documents for the period and to the extent granted therein and to
receive a share of the proceeds thereof, if any, after all First Lien
Obligations have been Paid in Full in accordance with the terms of the Second
Lien Collateral Documents and applicable law. All proceeds of Collateral
(including without limitation any interest earned thereon, including any
Post-Petition Interest) resulting from the sale, collection or other disposition
of Collateral in connection with or resulting from any Enforcement Action, and
whether or not pursuant to an Insolvency Proceeding, shall be distributed as
follows: first to the First Lien Representative for application to the First
Lien Obligations in accordance with the terms of the First Lien Loan Documents,
until the First Lien Obligations have been Paid in Full and thereafter, to the
Second Lien Representative for application in accordance with the Second Lien
Loan Documents. Until the Payment in Full of the First Lien Obligations, any
Collateral, including without limitation any such Collateral constituting
proceeds, that may be received by any Second Lien Secured Party in violation of
this Agreement shall be segregated and held in trust and promptly paid over to
the First Lien Representative, for the benefit of the First Lien Secured
Parties, in the same form as received, with any necessary endorsements, and each
Second Lien Secured Party hereby
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authorizes the First Lien Representative to make any such endorsements as agent
for the Second Lien Secured Parties (which authorization, being coupled with an
interest, is irrevocable).
SECTION 4.02. Releases of Second-Priority Lien. (a) The First Lien
Representative, on behalf of the First Lien Secured Parties, will have the
exclusive right (subject to the provisions of the First Lien Credit Agreement)
to make determinations regarding the release or disposition of any Collateral,
without any consultation with, consent of or notice to the Second Lien
Representative or any other Second Lien Secured Party. Upon (i) any release,
sale or disposition of Collateral by the First Lien Representative or the First
Lien Secured Parties that results in the release of the first-priority Lien in
favor of the First Lien Representative on any Collateral (including without
limitation any sale or other disposition pursuant to any Enforcement Action) or
(ii) any release of any Guarantor from any or all of its obligations to
guarantee the First Lien Obligations, the second-priority Lien on such
Collateral (but not on any proceeds of such Collateral not required to be paid
to the First Lien Secured Parties) or the comparable obligations of such
Guarantor to guarantee the Second Lien Obligations, as the case may be, shall be
automatically and unconditionally released with no further consent or action of
any Person. Notwithstanding the foregoing, the Second Lien Representative, on
behalf of itself and the other Second Lien Secured Parties, agrees and
acknowledges that any and all of the Second Lien Collateral may be sold so long
as (i) such sale is not a sale of all or substantially all of the Second Lien
Collateral, and (ii) the proceeds of such sale are used to prepay loans
outstanding under the First Lien Credit Agreement or are otherwise used in a
manner permitted under the First Lien Credit Agreement or, after all First Lien
Obligations have been Paid in Full, used to prepay loans outstanding under the
Second Lien Credit Agreement.
(b) The Second Lien Representative, on behalf of itself and the other
Second Lien Secured Parties, shall promptly execute and deliver such release
documents and instruments and shall take such further actions as the First Lien
Representative shall request to evidence any release of the second-priority Lien
described in paragraph (a) above. Each of the Second Lien Representative and
each other Second Lien Secured Party hereby appoints the First Lien
Representative and any officer or duly authorized person of the First Lien
Representative, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power of attorney in the place and stead
of the Second Lien Secured Parties and in the name of the Second Lien
Representative or the Second Lien Secured Parties or in the First Lien
Representative's own name, from time to time, in the First Lien Representative's
sole discretion, for the purposes of carrying out the terms of this paragraph,
to take any and all appropriate action and to execute and deliver any and all
documents and instruments as may be necessary or desirable to accomplish the
purposes of this paragraph, including, without limitation, any financing
statements, endorsements, assignments, releases or other documents or
instruments of transfer (which appointment, being coupled with an interest, is
irrevocable).
SECTION 4.03. Inspection Rights and Insurance. (a) The First Lien
Representative and its representatives and invitees may at any time, subject to
Section 5.01(f) of the First Lien Credit Agreement, inspect, repossess, remove
and otherwise deal with the Collateral, and the First Lien Representative may
advertise and conduct public auctions or private sales of the Collateral, in
each case without notice to, the involvement of or interference by the Second
Lien Representative or any other Second Lien Secured Party or liability to the
Second Lien Representative or any other Second Lien Secured Party.
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(b) Until the First Lien Obligations have been Paid in Full, the First
Lien Representative will have the sole and exclusive right (i) to be named as
additional insured and loss payee under any insurance policies maintained from
time to time by the Loan Parties; (ii) to adjust or settle any insurance policy
or claim covering the Collateral in the event of any loss thereunder and (iii)
to approve any award granted in any condemnation or similar proceeding affecting
the Collateral.
ARTICLE V
INSOLVENCY PROCEEDINGS
SECTION 5.01. Filing of Motions. So long as the First Lien Obligations
have not been Paid in Full, the Second Lien Representative agrees on behalf of
itself and the other Second Lien Secured Parties that neither the Second Lien
Representative nor any other Second Lien Secured Party shall, in or in
connection with any Insolvency Proceeding, file any pleadings or motions, take
any position at any hearing or proceeding of any nature, or otherwise take any
action whatsoever, in each case in respect of any of the Collateral, including,
without limitation, with respect to the determination of any Liens or claims
held by the First Lien Representative (including the validity and enforceability
thereof) or any other First Lien Secured Party or the value of any claims of
such parties under Section 506(a) of the Bankruptcy Code or otherwise; provided
that the Second Lien Representative may file a proof of claim in an Insolvency
Proceeding and take actions which are not adverse to the Liens and interests of
the First Lien Secured Parties or otherwise inconsistent with the priorities of
this Agreement (including as to releases) to preserve and protect its second
priority Lien on the Collateral, subject to the limitations contained in this
Agreement and only if consistent with the terms and the limitations on the
Second Lien Representative imposed hereby.
SECTION 5.02. Financing Matters. If any Loan Party becomes subject to
any Insolvency Proceeding, and if the First Lien Representative or one or more
of the other First Lien Secured Parties desire to consent to the use of cash
collateral under the Bankruptcy Code or to provide financing to any Loan Party
under the Bankruptcy Code or to consent to the provision of financing to any
Loan Party by any third party under the Bankruptcy Code ("DIP FINANCING"), then
the Second Lien Representative agrees, on behalf of itself and the other Second
Lien Secured Parties, that to the extent the aggregate principal amount of such
DIP Financing does not exceed the maximum aggregate principal amount available
under the First Lien Credit Agreement as of the Effective Date by more than
$125,000,000, the Second Lien Representative and each other Second Lien Secured
Party (a) will be deemed to have consented to, will raise no objection to, nor
support any other Person objecting to, the use of such cash collateral or to
such DIP Financing, (b) will not request or accept adequate protection or any
other relief in connection with the use of such cash collateral or such DIP
Financing except as set forth in Section 5.04 below, (c) will subordinate (and
will be deemed hereunder to have subordinated) the second-priority Liens (i) to
such DIP Financing on the same terms as the first-priority Liens are
subordinated thereto (and such subordination will not alter in any manner the
terms of this Agreement) and (ii) to any adequate protection provided to the
First Lien Secured Parties and (d) agrees that notice received two calendar days
prior to the entry of an order approving such usage of cash collateral or
approving such financing shall be adequate notice.
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SECTION 5.03. Relief From the Automatic Stay. The Second Lien
Representative agrees, on behalf of itself and the other Second Lien Secured
Parties, that none of them will seek relief from the automatic stay or from any
other stay in any Insolvency Proceeding or take any action in derogation
thereof, in each case in respect of any Collateral, without the prior written
consent of the First Lien Representative.
SECTION 5.04. Adequate Protection. The Second Lien Representative, on
behalf of itself and the other Second Lien Secured Parties, agrees that none of
them shall object, contest, or support any other Person objecting to or
contesting, (a) any request by the First Lien Representative or the First Lien
Secured Parties for adequate protection or (b) any objection by the First Lien
Representative or any other First Lien Secured Parties to any motion, relief,
action or proceeding based on a claim of a lack of adequate protection or (c)
the payment of interest, fees, expenses or other amounts to the First Lien
Representative or any other First Lien Secured Party under Section 506(b) or
506(c) of the Bankruptcy Code or otherwise. Notwithstanding anything contained
in this Section and in Section 5.02, in any Insolvency Proceeding, (i) if the
First Lien Secured Parties (or any subset thereof) are granted adequate
protection in the form of additional collateral or superpriority claims in
connection with any DIP Financing or use of cash collateral, and the First Lien
Secured Parties do not object to the adequate protection being provided to them,
then the Second Lien Representative, on behalf of itself and any of the Second
Lien Secured Parties, may seek or accept adequate protection solely in the form
of (x) a replacement Lien on such additional collateral, subordinated to the
Liens securing the First Lien Obligations and such DIP Financing on the same
basis as the other Liens securing the Second Lien Obligations are so
subordinated to the First Lien Obligations under this Agreement and (y)
superpriority claims junior in all respects to the superpriority claims granted
to the First Lien Secured Parties, and (ii) in the event the Second Lien
Representative, on behalf of itself and the other Second Lien Secured Parties,
seeks or requests adequate protection and such adequate protection is granted in
the form of additional collateral, then the Second Lien Representative, on
behalf of itself or any of the other Second Lien Secured Parties, agrees that
the First Lien Representative shall also be granted a senior Lien on such
additional collateral as security for the First Lien Obligations and any such
DIP Financing and that any Lien on such additional collateral securing the
Second Lien Obligations shall be subordinated to the Liens on such collateral
securing the First Lien Obligations and any such DIP Financing (and all
Obligations relating thereto) and any other Liens granted to the First Lien
Secured Parties as adequate protection on the same basis as the other Liens
securing the Second Lien Obligations are subordinated to such First Lien
Obligations under this Agreement. The Second Lien Representative, on behalf of
itself and the other Second Lien Secured Parties, agrees that except as
expressly set forth in this Section none of them shall seek or accept adequate
protection without the prior written consent of the First Lien Representative.
SECTION 5.05. Avoidance Issues. If any First Lien Secured Party is
required in any Insolvency Proceeding or otherwise to disgorge, turn over or
otherwise pay any amount to the estate of any Loan Party because such amount was
avoided or ordered to be paid or disgorged for any reason, including without
limitation because it was found to be a fraudulent or preferential transfer (any
such amount, a "RECOVERY"), whether received as proceeds of security,
enforcement of any right of set-off or otherwise, then the First Lien
Obligations shall be reinstated to the extent of such Recovery and deemed to be
outstanding as if such payment had not occurred and the First Lien Obligations
shall be deemed not to have been Paid in Full. If this
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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. The Second Lien Representative and the other Second Lien
Secured Parties agree that none of them shall be entitled to benefit from any
avoidance action affecting or otherwise relating to any distribution or
allocation made in accordance with this Agreement, whether by preference or
otherwise, it being understood and agreed that the benefit of such avoidance
action otherwise allocable to them shall instead by allocated and turned over
for application in accordance with the priorities set forth in this Agreement.
SECTION 5.06. Asset Dispositions in an Insolvency Proceeding, etc.
None of the Second Lien Representative or any other Second Lien Secured Party
shall, in an Insolvency Proceeding or otherwise, oppose any sale or disposition
of any assets of any Loan Party that is supported by the First Lien Secured
Parties, and the Second Lien Representative and each other Second Lien Secured
Party will be deemed to have consented under Section 363 of the Bankruptcy Code
(and otherwise) to any sale supported by the First Lien Secured Parties and to
have released their Liens in such assets.
SECTION 5.07. Separate Grants of Security and Separate Classification.
Each Second Lien Secured Party acknowledges and agrees that (a) the grants of
Liens pursuant to the First Lien Collateral Documents and the Second Lien
Collateral Documents constitute two separate and distinct grants of Liens and
(b) because of, among other things, their differing rights in the Collateral,
the Second Lien Obligations are fundamentally different from the First Lien
Obligations and must be separately classified in any plan of reorganization
proposed or adopted in an Insolvency Proceeding. To further effectuate the
intent of the parties as provided in the immediately preceding sentence, if it
is held that the claims against the First Lien Secured Parties and Second Lien
Secured Parties in respect of the Collateral constitute only one secured claim
(rather than separate classes of senior and junior secured claims), then the
Second Lien Secured Parties hereby acknowledge and agree that all distributions
shall be made as if there were separate classes of senior and junior secured
claims against any Loan Party in respect of the Collateral (with the effect
being that, to the extent that the aggregate value of the Collateral is
sufficient (for this purpose ignoring all claims held by the Second Lien Secured
Parties), the First Lien Secured Parties 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 before any distribution is made in respect of the claims held by the
Second Lien Secured Parties, with the Second Lien Representative and the Second
Lien Secured Parties hereby acknowledging and agreeing to turn over to the First
Lien Secured Parties amounts otherwise received or receivable by them to the
extent necessary to effectuate the intent of this sentence, even if such
turnover has the effect of reducing the claim or recovery of the Second Lien
Secured Parties).
SECTION 5.08. No Waivers of Rights of First Lien Secured Parties.
Nothing contained herein shall prohibit or in any way limit the First Lien
Representative or any other First Lien Secured Party from objecting in any
Insolvency Proceeding or otherwise to any action taken by the Second Lien
Representative or any other Second Lien Secured Party, including the seeking by
any Second Lien Secured Party of adequate protection or the asserting by any
Second
15
Lien Secured Party of any of its rights and remedies under the Second Lien
Collateral Documents or otherwise.
SECTION 5.09. Plans of Reorganization. No Second Lien Secured Party
shall support or vote in favor of any plan of reorganization (and each shall be
deemed to have voted to reject any plan of reorganization) unless such plan (a)
pays off, in cash in full, all First Lien Obligations, (b) is accepted by the
class of holders of First Lien Obligations voting thereon and is supported by
the First Lien Representative or (c) incorporates this Agreement by reference
and continues the rights and priorities of the First Lien Secured Parties and
the Second Lien Secured Parties in the Collateral subsequent to the effective
date of such plan.
SECTION 5.10. Reorganization Securities. If, in any 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
First Lien Obligations and on account of Second Lien Obligations, then, to the
extent the debt obligations distributed on account of the First Lien Obligations
and on account of the Second Lien Obligations are secured by Liens upon the same
property, the provisions of this Agreement will survive the distribution of such
debt obligations pursuant to such plan and will apply with like effect to the
Liens securing such debt obligations.
SECTION 5.11. Post-Petition Claims. (a) Neither the Second Lien
Representative nor any other Second Lien Secured Party shall oppose or seek to
challenge any claim by the First Lien Representative or any other First Lien
Secured Party for Post-Petition Interest, fees, costs, charges or expenses to
the extent of the value of the First Lien Representative's Lien held for the
benefit of the First Lien Secured Parties, without regard to the existence of
the Lien of the Second Lien Representative on behalf of the Second Lien Secured
Parties on the Collateral.
(b) Neither the First Lien Representative nor any other First Lien
Secured Party shall oppose or seek to challenge any claim by the Second Lien
Representative or any other Second Lien Secured Party for allowance in any
Insolvency Proceeding of Second Lien Obligations consisting of Post-Petition
Interest, fees, costs, charges or expenses to the extent of the value of the
Lien of the Second Lien Representative on behalf of the Second Lien Secured
Parties on the Collateral (after taking into account the First Lien
Obligations).
SECTION 5.12. Waiver. The Second Lien Representative, for itself and
on behalf of the other Second Lien Secured Parties, waives any claim it or they
may hereafter have against the First Lien Representative or any other First Lien
Secured Party arising out of the election of the First Lien Representative or
any other First Lien Secured Party of the application of Section 1111(b)(2) of
the Bankruptcy Code, or out of any cash collateral or financing arrangement or
out of any grant of a security interest in connection with the Collateral in any
Insolvency Proceeding.
SECTION 5.13. Expense Claims. Neither Second Lien Representative nor
any other Second Lien Secured Party will (a) contest the payment of fees,
expenses or other amounts to the First Lien Representative or any other First
Lien Secured Party under Section 506(b) of the Bankruptcy Code or otherwise to
the extent provided for in the First Lien Credit Agreement or
16
(b) assert or enforce, at any time prior to Payment in Full of all First Lien
Obligations, any claim under Section 506(c) of the Bankruptcy Code senior to or
on parity with the First Lien Obligations for costs or expenses of preserving or
disposing of any Collateral.
SECTION 5.14. Other Matters. To the extent that the Second Lien
Representative or any other Second Lien Secured Party has or acquires rights
under Section 363 or Section 364 of the Bankruptcy Code with respect to any of
the Collateral, the Second Lien Representative agrees, on behalf of itself and
the other Second Lien Secured Parties, not to assert any of such rights without
the prior written consent of the First Lien Representative; provided that if
requested by the First Lien Representative, the Second Lien Representative shall
timely exercise such rights in the manner requested by the First Lien
Representative, including any rights to payments in respect of such rights.
ARTICLE VI
SECOND LIEN COLLATERAL DOCUMENTS AND FIRST LIEN COLLATERAL DOCUMENTS
SECTION 6.01. Collateral Documents. (a) Each Loan Party and the Second
Lien Representative, on behalf of itself and the other Second Lien Secured
Parties, agrees that it shall not at any time execute or deliver any amendment
or other modification to any of the Second Lien Collateral Documents or any of
the documents governing the Second Lien Obligations inconsistent with or in
violation of this Agreement.
(b) Each of the Loan Parties and the First Lien Representative, on
behalf of itself and the other First Lien Secured Parties, agrees that it shall
not at any time execute or deliver any amendment or other modification to any of
the First Lien Collateral Documents or the documents governing the First Lien
Obligations inconsistent with or in violation of this Agreement.
(c) In the event the First Lien Representative enters into any
amendment, waiver or consent in respect of any of the First Lien Collateral
Documents for the purpose of adding to, or deleting from, or waiving or
consenting to any departures from any provisions of, any First Lien Collateral
Document or changing in any manner the rights of any parties thereunder, then
such amendment, waiver or consent shall apply automatically to any comparable
provision of the Comparable Second Lien Collateral Document without the consent
of or action by any Second Lien Secured Party (with all such amendments, waivers
and modifications subject to the terms hereof); provided that (other than with
respect to amendments, modifications or waivers that secure additional
extensions of credit and add additional secured creditors and do not violate the
express provisions of this Agreement, the Second Lien Credit Agreement and the
Second Lien Collateral Documents), (i) no such amendment, waiver or consent
shall have the effect of removing assets subject to the Lien of any Second Lien
Collateral Document, except to the extent that a release of such Lien is
permitted by Section 4.02, (ii) any such amendment, waiver or consent that
materially and adversely affects the rights of the Second Lien Secured Parties
and does not affect the First Lien Secured Parties in a like or similar manner
shall not apply to the Second Lien Collateral Documents without the consent of
the Second Lien Representative and (iii) notice of such amendment, waiver or
consent shall be given to the Second Lien Representative no later than 30 days
after its effectiveness, provided that the failure to give such notice shall not
affect the effectiveness and validity thereof.
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SECTION 6.02. Amendments to First Lien Documents and Second Lien
Documents. (a) The First Lien Collateral Documents, the First Lien Credit
Agreement and all other First Lien Loan Documents may be amended, supplemented
or otherwise modified in accordance with their terms and the First Lien Credit
Agreement may be refinanced, replaced or refunded, with the same or different
lenders or representatives (any refinancing, replacement or refunding, with the
same or different lenders or representatives, of the First Lien Credit Agreement
or the Second Lien Credit Agreement is referred to herein as a "REFINANCING"),
in each case without the consent of the Second Lien Representative or the Second
Lien Secured Parties; provided, however, that the holders of any such
Refinancing debt bind themselves in writing to the terms of this Agreement and
any such amendment, supplement, modification or Refinancing shall not provide
for a principal amount of, without duplication, term loans, revolving loan
commitments and letter of credit facilities (but excluding hedging obligations)
in excess of $395,000,000 in the aggregate, less (i) the amount of all
repayments and prepayments applied to any term loans and (ii) the amount of all
repayments and prepayments of any revolving loan or letter of credit, to the
extent accompanied by a corresponding reduction in the applicable commitment
amount.
(b) Without the prior written consent of the First Lien
Representative, none of the Second Lien Collateral Documents, the Second Lien
Credit Agreement or any other Second Lien Loan Documents may be amended,
supplemented or otherwise modified or entered into, nor may they be subject to a
Refinancing, except that subject to Section 5.02(k) of the First Lien Credit
Agreement, the Second Lien Collateral Documents, the Second Lien Credit
Agreement and all other Second Lien Loan Documents (i) may be amended in a
manner that (A) does not shorten any date or increase the amount of any required
repayment, prepayment or redemption of the principal of such Debt under the
Second Lien Credit Agreement and does not improve, directly or indirectly, its
priority relative to the First Lien Obligations (including, if the debt being
modified is subject to a Refinancing, that the degree of subordination may not
be lessened), (B) does not increase the rate or extend the date for payment of
the interest, premium (if any) or fees payable on the Second Lien Obligations
and (C) does not make the covenants, events of default or remedies relating to
Second Lien Obligations, taken as a whole, more restrictive on the Loan Parties
(it being understood and agreed that if any particular provision is more onerous
or restrictive such provision shall be deemed to have been included in the First
Lien Credit Agreement) and (ii) may be subject to a Refinancing, but only if the
changes to the documentation are allowable under the foregoing clauses (A), (B)
and (C), provided that the holders of the Refinancing debt bind themselves to
this Agreement.
ARTICLE VII
RELIANCE; WAIVERS; ETC.
SECTION 7.01. Reliance. The First Lien Collateral Documents and the
First Lien Credit Agreement are deemed to have been executed and delivered, and
all extensions of credit thereunder are deemed to have been made or incurred, in
reliance upon this Agreement. The Second Lien Representative, on behalf of
itself and the other Second Lien Secured Parties, expressly waives all notice of
the acceptance of and reliance on this Agreement by the First Lien Secured
Parties. The Second Lien Collateral Documents and the Second Lien Credit
Agreement are each deemed to have been executed and delivered, and all
extensions of credit thereunder are deemed to have been made or incurred, in
reliance upon this Agreement. The First Lien
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Representative, on behalf of itself and the other First Lien Secured Parties,
expressly waives all notices of the acceptance of and reliance by the Second
Lien Representative and the other Second Lien Secured Parties.
SECTION 7.02. No Warranties or Liability. The Second Lien
Representative and the First Lien Representative acknowledge and agree that
neither has made any representation or warranty with respect to the execution,
validity, legality, completeness, collectibility or enforceability of any First
Lien Collateral Document or any Second Lien Collateral Document. Except as
otherwise provided in this Agreement, the Second Lien Representative and the
First Lien Representative will be entitled to manage and supervise their
respective extensions of credit to any Loan Party in accordance with law and
their usual practices, modified from time to time as they deem appropriate.
SECTION 7.03. No Waivers. No right or benefit of any party hereunder
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of such party or any other party hereto or by any noncompliance
by any Loan Party with the terms and conditions of any of the First Lien
Collateral Documents or the Second Lien Collateral Documents.
ARTICLE VIII
OBLIGATIONS UNCONDITIONAL
SECTION 8.01. First Lien Obligations Unconditional. All rights and
interests of the First Lien Representative under this Agreement, and all
agreements and obligations of the Second Lien Representative, the Borrower and
the other Loan Parties (to the extent applicable) under this Agreement, shall
remain in full force and effect irrespective of:
(a) any lack of validity or enforceability of any First Lien
Collateral Document or the First Lien Credit Agreement;
(b) any change in the time, place or manner of payment of, or in any
other term of, all or any portion of the First Lien Obligations, or any
amendment, waiver or other modification, whether by course of conduct or
otherwise, or any refinancing, replacement, refunding or restatement of any
First Lien Collateral Document or the First Lien Credit Agreement;
(c) prior to the Payment in Full of the First Lien Obligations, any
exchange, release, voiding, impairment, avoidance or non-perfection of any
security interest in any Collateral or any other collateral, or any
release, amendment, waiver or other modification, whether by course of
conduct or otherwise, or any refinancing, replacement, refunding or
restatement of all or any portion of the First Lien Obligations or any
guarantee or guaranty thereof; or
(d) any exercise or delay in or refrain from exercising any right or
remedy, any election of remedies, any taking or failure to take any Liens
or additional Liens, as well as any other circumstances that otherwise
might constitute a defense available to, or a discharge of, any Loan Party
in respect of the First Lien Obligations, or of the Second
19
Lien Representative, or any Loan Party, to the extent applicable, in
respect of this Agreement.
SECTION 8.02. Second Lien Obligations Unconditional. All rights and
interests of the Second Lien Representative under this Agreement, and all
agreements and obligations of the First Lien Representative and the Borrower and
the other Loan Parties (to the extent applicable) under this Agreement, shall
remain in full force and effect irrespective of:
(a) any lack of validity or enforceability of any Second Lien
Collateral Document or the Second Lien Credit Agreement;
(b) any change in the time, place or manner of payment of, or in any
other term of, all or any portion of the Second Lien Obligations, or any
amendment, waiver or other modification, whether by course of conduct or
otherwise, or any refinancing, replacement, refunding or restatement of any
Second Lien Collateral Document or the Second Lien Credit Agreement;
(c) any exchange, release, voiding, impairment, avoidance or
non-perfection of any security interest in any Collateral, or any release,
amendment, waiver or other modification, whether by course of conduct or
otherwise, or any refinancing, replacement, refunding or restatement of all
or any portion of the Second Lien Obligations or any guarantee or guaranty
thereof; or
(d) any other circumstances that otherwise might constitute a defense
available to, or a discharge of, any Loan Party in respect of the Second
Lien Obligations, or of the First Lien Representative, or any Loan Party,
to the extent applicable, in respect of this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Conflicts. In the event of any conflict between the
provisions of this Agreement and the provisions of the First Lien Credit
Agreement, the Second Lien Credit Agreement, any First Lien Collateral Document
or any Second Lien Collateral Document, the provisions of this Agreement shall
govern.
SECTION 9.02. Continuing Nature of Provisions. This Agreement shall
continue to be effective, and shall not be revocable by any party hereto, until
the First Lien Obligations shall be Paid in Full. This is a continuing agreement
and the First Lien Secured Parties and the Second Lien Secured Parties may
continue, at any time and without notice to the other parties hereto, to extend
credit and other financial accommodations, lend monies and provide indebtedness
to, or for the benefit of, Borrower or any other Loan Party on the faith hereof.
SECTION 9.03. Amendments; Waivers. No amendment or modification of any
of the provisions of this Agreement shall be effective unless the same shall be
in writing and signed by the First Lien Representative, the Second Lien
Representative and, only if the rights or
20
duties of any Loan Party are directly affected thereby, the Borrower on behalf
of such Loan Party.
SECTION 9.04. Information Concerning Financial Condition of the
Borrower and the other Loan Parties. Each of the Second Lien Representative and
the First Lien Representative hereby assumes responsibility for keeping itself
informed of the financial condition of the Borrower and each of the other Loan
Parties and all other circumstances bearing upon the risk of nonpayment of the
First Lien Obligations or the Second Lien Obligations. Each of the Second Lien
Representative and the First Lien Representative hereby agrees that no party
shall have any duty to advise any other party of information known to it
regarding such condition or any such circumstances. In the event the Second Lien
Representative or the First Lien Representative, in its sole discretion,
undertakes at any time or from time to time to provide any information to any
other party to this Agreement, it shall be under no obligation (a) to provide
any such information to such other party or any other party on any subsequent
occasion, (b) to undertake any investigation not a part of its regular business
routine, or (c) to disclose any other information.
SECTION 9.05. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.06. SUBMISSION TO JURISDICTION. (A) EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO THE EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL
COURT OF THE UNITED STATES OF AMERICA SITTING IN NEW YORK CITY, AND ANY
APPELLATE COURT FROM ANY THEREOF, AND FOR PURPOSES OF ENFORCEMENT OF COLLATERAL
SECURITY OR RELATED MATTERS, THE COURTS OF THE JURISDICTION WHERE SUCH
COLLATERAL IS LOCATED, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE OTHER FIRST LIEN LOAN DOCUMENTS OR SECOND LIEN LOAN
DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING SHALL BE HEARD AND DETERMINED IN SUCH
NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH
OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
(B) THE BORROWER, EACH OTHER LOAN PARTY, THE SECOND LIEN
REPRESENTATIVE, THE OTHER SECOND LIEN SECURED PARTIES, THE FIRST LIEN
REPRESENTATIVE AND THE OTHER FIRST LIEN SECURED PARTIES EACH HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT THEY MAY LEGALLY AND
EFFECTIVELY DO SO, (I) ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO THE MATTERS
COVERED BY THIS AGREEMENT, (II) ANY OBJECTION THEY MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT IN ANY COURT REFERRED TO IN PARAGRAPH (A) OF THIS SECTION AND
(III) THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING.
(C) EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 9.07. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW.
21
SECTION 9.07. Notices. Unless otherwise specifically provided herein,
any notice or other communication herein required or permitted to be given shall
be in writing and may be personally served, telecopied, or sent by overnight
express courier service or United States mail, and shall be deemed to have been
given when delivered in person or by courier service, upon receipt of a telecopy
or five (5) days after deposit in the United States mail (certified, with
postage prepaid and properly addressed). For the purposes hereof, the addresses
of the parties hereto (until notice of a change thereof is delivered as provided
in this Section) shall be if to the Borrower, at the address specified below its
name on the signature pages hereof; if to the First Lien Representative, at 000
Xxxxx Xxxxxxx Xxxxxx, XX0000/XX0, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000,
Attention: Syndication Agency Services, Telecopier: 000-000-0000, Telephone:
000-000-0000, with a copy to: Wachovia Bank, National Association, Xxx Xxxxxxxx
Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, XX 00000-0000, Attention: Xxx Xxxxx / Agency
Management, Telephone: 000-000-0000, Telecopier: 704-383-1625; if to the Second
Lien Representative, at 000 Xxxxx Xxxxxxx Xxxxxx, XX0000/XX0, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000-0000, Attention: Syndication Agency Services, Telecopier:
000-000-0000, Telephone: 000-000-0000, with a copy to: Wachovia Bank, National
Association, Xxx Xxxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, XX 00000-0000,
Attention: Xxx Xxxxx / Agency Management, Telecopier: 000-000-0000, Telephone:
000-000-0000; 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.
SECTION 9.08. Similar Liens and Agreements. The parties hereto agree
that it is their intention that the First Lien Collateral and the Second Lien
Collateral be identical. In furtherance of the foregoing, the parties hereto
agree, subject to the other provisions of this Agreement:
(a) upon request by the First Lien Representative or the Second Lien
Representative, to cooperate in good faith (and to direct their counsel to
cooperate in good faith) from time to time in order to determine the specific
items included in the First Lien Collateral and the Second Lien Collateral and
the steps taken to perfect their respective Liens thereon and the identity of
the respective parties obligated under the First Lien Credit Agreement, and the
Second Lien Credit Agreement; and
(b) that the documents and agreements creating or evidencing the First
Lien Collateral and the Second Lien Collateral and guarantees for the First Lien
Obligations and the Second Lien Obligations shall be in all material respects
the same forms of documents other than with respect to the first lien and the
second lien nature of the obligations thereunder.
SECTION 9.09. Subrogation. The Second Lien Representative, on behalf
of itself and the other Second Lien Secured Parties, hereby waives any rights of
subrogation it may acquire as a result of any payment hereunder until the
Payment in Full of all First Lien Obligations has occurred.
SECTION 9.10. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of each of the parties hereto and each of the
First Lien Secured Parties and Second Lien Secured Parties and their respective
successors and assigns, and nothing herein is intended, or shall be construed to
give, any other Person any right, remedy or claim under, to or in respect of
this Agreement or any Collateral. All references to the Borrower or any other
22
Loan Party shall include any of the Borrower or such other Loan Party as
debtor-in-possession and any receiver or trustee for the Borrower or such other
Loan Party in any Insolvency Proceeding. Additional Loan Parties may be added
hereto by a joinder agreement satisfactory to the First Lien Representative.
SECTION 9.11. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.12. Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective
as delivery of a manually executed counterpart of this Agreement. This Agreement
shall become effective when it shall have been executed by each party hereto.
SECTION 9.13. Provisions to Define Relative Rights. The provisions of
this Agreement are intended for the purpose of defining the relative rights of
the First Lien Secured Parties, on the one hand, and the Second Lien Secured
Parties, on the other hand. Except as expressly provided herein, none of the
Borrower, any other Loan Party or any other creditor thereof shall have any
rights hereunder, and none of the Borrower or any other Loan Party may rely on
the terms hereof. Nothing in this Agreement is intended to or shall impair the
obligations of the Borrower or any other Loan Party, which are absolute and
unconditional, to pay the First Lien Obligations and the Second Lien Obligations
as and when the same shall become due and payable in accordance with their
terms.
23
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
WACHOVIA BANK, NATIONAL
ASSOCIATION, as
First Lien Representative for and on
behalf of the First Lien Secured Parties
By /s/ Xxxx Xxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
WACHOVIA BANK, NATIONAL ASSOCIATION, as
Second Lien Representative for and on
behalf of the Second Lien Secured
Parties
By /s/ Xxxx Xxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
24
OPEN SOLUTIONS INC.,
as Borrower
By /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President
and Chief Financial Officer
HUSKY ACQUISITION CORPORATION,
as a Guarantor
By /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Treasurer
Address for notices:
000 Xxxxxxx Xxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
MAXXAR CORPORATION,
as a Guarantor
By /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Treasurer
Address for notices:
000 Xxxxxxx Xxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
OPEN SOLUTIONS RDS TECHNOLOGIES, INC.,
as a Guarantor
By /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Treasurer
Address for notices:
000 Xxxxxxx Xxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
25
RE:MEMBER DATA SERVICES, INC.,
as a Guarantor
By /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Treasurer
Address for notices:
000 Xxxxxxx Xxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
WILDCAT ACQUISITION CORP.,
as a Guarantor
By /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Treasurer
Address for notices:
000 Xxxxxxx Xxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
