Exhibit 10.3

 

INTERCREDITOR AGREEMENT

 

(PENHALL)

 

INTERCREDITOR AGREEMENT (this “Agreement”) dated as of November 1, 2005, by and
among the First Lien Agent and the Second Lien Agent (each as defined below).

 

W I T N E S S E T H:

 

WHEREAS, PENHALL INTERNATIONAL CORP., an Arizona corporation (“Holdings”),
PENHALL COMPANY, a California corporation (“Penhall”), PENHALL LEASING, L.L.C.,
a California limited liability company (“Penhall Leasing”), CAPITOL DRILLING
SUPPLIES, INC., an Indiana corporation (“Capitol Drilling”) and BOB MACK CO.,
INC., a California corporation  (“Bob Mack” and together with Holdings, Penhall,
Penhall Leasing and Capitol Drilling, together with their successors and
assigns, including any receiver, trustee or debtor-in-possession, individually a
“Borrower” and collectively and jointly and severally, the “Borrowers”), the
Credit Parties (as defined therein), the Lenders (as defined therein), and
General Electric Capital Corporation, as agent, are parties to an Amended and
Restated Credit Agreement, dated as of November 1, 2005 (as amended or otherwise
modified from time to time, in accordance with the terms of this Agreement, the
“GE Credit Agreement”), pursuant to which such Lenders have made and will from
time to time make loans and provide other financial accommodations to the
Borrowers;

 

WHEREAS, Holdings, the Lenders (as defined therein) (together with their
successors and assigns, the “Second Lien Lenders”) and Deutsche Bank Trust
Company Americas, as agent (the “Second Lien Agent”), are parties to a Second
Lien Credit Agreement dated November 1, 2005 (as amended, restated, supplemented
or otherwise modified from time to time, in accordance with the terms of this
Agreement the “Second Lien Loan Agreement”) pursuant to which the Second Lien
Lenders have made or will make certain loans to Holdings;

 

WHEREAS, the Borrowers and the other Obligors (as hereinafter defined) have
granted to the First Lien Agent, a lien on, and security interest in,
substantially all of their assets and properties, all as more particularly
described in the First Lien Loan Documents;

 

WHEREAS, the Borrowers and the other Obligors have granted to the Second Lien
Creditors a lien on, and security interest in, substantially all of their assets
and properties, all as more particularly described in the Second Lien Loan
Documents;

 

WHEREAS, the Second Lien Creditors and the First Lien Creditors wish to set
forth their agreement as to certain of their respective rights and obligations
with respect to the assets and properties of the Borrowers and the other
Obligors and their understanding relative to their respective positions in
certain assets and properties of the Borrowers and the other Obligors; and

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto agree as follows:

 

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Section 1.              Definitions.

 

1.1          GENERAL TERMS.  AS USED IN THIS AGREEMENT, THE FOLLOWING TERMS
SHALL HAVE THE RESPECTIVE MEANINGS INDICATED BELOW, SUCH MEANINGS TO BE
APPLICABLE EQUALLY TO BOTH THE SINGULAR AND THE PLURAL FORMS OF THE TERMS
DEFINED:

 

“Bankruptcy Code” means the provisions of Title 11 of the United States Code, 11
U.S.C. §§101 et seq.

 

“Borrower” shall have the meaning set forth in the recitals hereof.

 

“Business Day” shall mean any day that is not a Saturday, a Sunday or a day on
which banks are required or permitted to be closed in the State of New York.

 

“Collateral” means all assets and properties of any kind whatsoever, real or
personal, tangible or intangible and wherever located, of any Obligor, whether
now owned or hereafter acquired, upon which a Lien is now or hereafter granted
or purported to be granted by such Person in favor of a Secured Creditor, as
security for all or any part of the Obligations.

 

“Distribution” means, with respect to any indebtedness or obligation, (a) any
payment or distribution by any Person of cash, securities or other property, by
set-off or otherwise, on account of such indebtedness or obligation or (b) any
redemption, purchase or other acquisition of such indebtedness or obligation by
any Person.

 

“Documents” means the First Lien Loan Documents and the Second Lien Loan
Documents, collectively.

 

“Enforcement Action” means (i) any action by any Secured Creditor to foreclose
on the Lien of such Person in any Collateral, (ii) any action by any Secured
Creditor to take possession of, or sell or otherwise realize upon, or to
exercise any other rights or remedies with respect to, any Collateral, including
a sale or other disposition after the occurrence of an Event of Default of any
Collateral by an Obligor with the consent of, or at the direction of, a Secured
Creditor, (iii) the exercise of any right of setoff with respect to, any
Collateral of any Obligor or the sale or other disposition of such Collateral
and/or (iv) the commencement by any Secured Creditor of any legal proceedings or
actions against or with respect to any Collateral of any Obligor to facilitate
the actions described in clauses (i), (ii) and (iii) above, including any action
to have the automatic stay with respect to any Collateral lifted in any
Insolvency Proceeding of an Obligor; provided that the filing of any notice of
claim in any Insolvency Proceeding involving an Obligor shall not be deemed to
be an Enforcement Action.

 

“Event of Default” means each “Event of Default” or similar term, as such term
is defined in any First Lien Loan Document or any Second Lien Loan Document.

 

“First Lien Agent” means General Electric Capital Corporation in its capacity as
agent for the First Lien Creditors under the First Lien Loan Documents, and its
successors and assigns in such capacity (including one or more other agents or
similar contractual representatives for one or more lenders that at any time
succeeds to or refinances, replaces or substitutes for any or all of the First
Lien Loan Obligations at any time and from time to time).

 

“First Lien Creditors” means the First Lien Agent and the First Lien Lenders,
collectively.

 

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“First Lien Default” shall mean any  “Event of Default” under the First Lien
Loan Documents , or any condition or event that, after notice or lapse of time
or both, would constitute such an Event of Default if that condition or event
were not cured or removed within any applicable grace or cure period set forth
therein.

 

“First Lien Lenders” means all lenders from time to time party to the First Lien
Loan Documents.

 

“First Lien Letter of Credit Obligations” means all outstanding obligations
incurred by or owing to the First Lien Creditors, whether direct or indirect,
contingent or otherwise, due or not due, in connection with the issuance of
letters of credit by a First Lien Creditor or another issuer pursuant to the
First Lien Loan Documents or the purchase of a participation with respect to any
letter of credit, including any unpaid reimbursement obligations in respect
thereof.  The amount of such Letter of Credit Obligations shall equal the
maximum amount that may be payable at such time or at any time thereafter by the
First Lien Creditors thereupon or pursuant thereto plus the amount thereof that
are reimbursable to the First Lien Creditors in respect of drawings under such
letters of credit.

 

“First Lien Loan Agreement” means (i) the GE Credit Agreement and (ii) each loan
or credit agreement evidencing any replacement, substitution, renewal, or
refinancing for the Obligations under the GE Credit Agreement which purports to
be secured by the Collateral, in each case as the same may from time to time be
amended, restated, supplemented, modified, replaced, substituted, renewed or
refinanced. in accordance with the terms of this Agreement.

 

“First Lien Loan Documents” means the First Lien Loan Agreement, all Loan
Documents (as such term is defined in the First Lien Loan Agreement) and all
other agreements, documents and instruments at any time executed and/or
delivered by any Obligor or any other Person with, to or in favor of the First
Lien Agent or any First Lien Lender in connection therewith or related thereto,
in each case, as amended or otherwise modified from time to time in accordance
with the terms of this Agreement.

 

“First Lien Loans” means any loans or advances outstanding under the First Lien
Loan Documents.

 

“First Lien Loan Obligations” means all obligations, liabilities and
indebtedness of every kind, nature and description owing by one or more
Borrowers or any other Obligor to the First Lien Creditors evidenced by or
arising under the First Lien Loan Documents (including any First Lien Loans and
First Lien Letter of Credit Obligations), whether direct or indirect, absolute
or contingent, joint or several, due or not due, primary or secondary,
liquidated or unliquidated, including principal, interest, charges, fees, costs,
indemnities and reasonable expenses, however evidenced, and whether as
principal, surety, endorser, guarantor or otherwise, whether now existing or
hereafter arising, whether arising before, during or after the initial or any
renewal term of the First Lien Loan Agreement whether arising before, during or
after the commencement of any Insolvency Proceeding with respect to one or more
of the Borrowers or any Obligor (and including the payment of any principal,
interest, fees, cost, expenses and other amounts which would accrue and become
due but for the commencement of such Insolvency Proceeding whether or not such
amounts are allowed or allowable in whole or in part in any such Insolvency
Proceeding).

 

“First Lien Loan Termination Date” means the date on which all First Lien Loan
Obligations have been Paid in Full.

 

“GE Credit Agreement” shall have the meaning set forth in the recitals hereto.

 

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“Insolvency Proceeding” means, as to any Obligor, any of the following:  (i) any
case or proceeding with respect to such Person under the Bankruptcy Code or any
other Federal or State bankruptcy, insolvency, reorganization or other law
affecting creditors’ rights or any other or similar proceedings seeking any
stay, reorganization, arrangement, composition or readjustment of the
obligations and indebtedness of such Obligor, (ii) any proceeding seeking the
appointment of any trustee, receiver, liquidator, custodian or other insolvency
official with similar powers with respect to such Obligor or any of its assets,
(iii) any proceeding for liquidation, dissolution or other winding up of the
business of such Obligor or (iv) any assignment for the benefit of creditors or
any marshalling of assets of such Obligor.

 

“Lien” means any mortgage, deed of trust, pledge, lien (statutory or otherwise),
security interest, charge or other encumbrance or security or preferential
arrangement of any nature, including any conditional sale or title retention
arrangement, any capitalized lease and any assignment, deposit arrangement or
financing lease intended as, or having the effect of, security.

 

“Maximum First Lien Principal Amount” means as of any date of determination (x)
$61,000,000 minus (y) the sum of all permanent reductions of revolving loan
commitments under the First Lien Loan Documents after the date hereof (other
than in connection with a refinancing of a like amount of such commitments),
provided that each advance of a loan under the First Lien Loan Document and each
letter of credit issued under a First Lien Loan Document shall be within the
Maximum First Lien Principal Amount if, as of the date of the making of such
loan or of such issuance, and immediately after giving effect thereto, the
aggregate outstanding principal amount of the First Lien Loan Obligations,
including First Lien Letter of Credit Obligations, does not exceed the Maximum
First Lien Principal Amount as of the date such loan was made or Letter of
Credit was issued.

 

“Obligations” means the First Lien Loan Obligations and the Second Lien Loan
Obligations, collectively.

 

“Obligor” means each Borrower and each other Person liable on or in respect of
the Obligations or that has granted a Lien on any property or assets as
collateral for the Obligations, together with such Person’s successors and
assigns, including a receiver, trustee or debtor-in-possession on behalf of such
Person.

 

“Paid in Full” shall mean, with respect to any Obligations, that:  (a) all of
such Obligations (other than contingent indemnification obligations not yet due
and payable) have been indefeasibly paid, performed or discharged in full (with
all such Obligations consisting of monetary or payment obligations having been
paid in full in cash or cash equivalents acceptable to the First Lien Lenders),
(b) no Person has any further right to obtain any loans, letters of credit,
bankers’ acceptances, or other extensions of credit under the documents relating
to such Obligations, and (c) any and all letters of credit, bankers’ acceptances
or similar instrument issued under such documents have been cancelled and
returned (or, to the extent permitted by the applicable First Lien Loan
Documents, backed by stand-by guarantees or cash collateralized) in accordance
with the terms of such documents.

 

“Permitted Collateral Sale” means (i) any sale or other disposition of
Collateral permitted under the First Lien Loan Agreement as in effect on the
date hereof and (ii) any other sale or other disposition of Collateral permitted
by the First Lien Creditors having a sales price not exceeding $1,000,000 in the
aggregate in any fiscal year.

 

“Person” means an individual, corporation, partnership, limited liability
company, limited liability partnership, association, joint-stock company, trust,
unincorporated organization, joint venture, governmental authority or other
regulatory body.

 

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 “Purchase Notice” shall have the meaning set forth in Section 6.1.

 

“Release Documents” shall have the meaning set forth in Section 3.5.

 

“Release Event” means, with respect to any Collateral, the occurrence and
continuance of an Event of Default and the taking of any Enforcement Action by
the First Lien Creditors against such Collateral or, after the occurrence and
during the continuance of an Insolvency Proceeding by or against any Obligor,
the entry of an order of the Bankruptcy Court pursuant to Section 363 of the
Bankruptcy Code authorizing the sale of such Collateral.

 

“Second Lien Agent” shall have the meaning set forth in the recitals hereto and
shall include its successors and assigns (including one or more other agents or
similar contractual representatives for one or more lenders that at any time
succeeds to or refinances, replaces or substitutes for any or all of the
Obligations under the Second Lien Loan Agreement at any time and from time to
time).

 

“Second Lien Creditors” means the Second Lien Agent and the Second Lien Lenders.

 

“Second Lien Lenders” shall have the meaning set forth in the recitals hereto
and shall include all lenders from time to time party to the Second Lien Loan
Documents.

 

“Second Lien Loan Agreement” shall have the meaning set forth in the recitals
hereto and shall include each loan or credit agreement evidencing any
replacement, substitution, renewal, or refinancing for the Obligations under the
Second Loan Agreement in accordance with the terms of this Agreement which
purports to be secured by the Collateral, in each case as the same may from time
to time be amended, restated, supplemented, modified, replaced, substituted,
renewed or refinanced. in accordance with the terms of this Agreement.

 

“Second Lien Loan Default Notice” means with respect to any Event of Default
under the Second Lien Loan Documents, a written notice from the Second Lien
Creditors to the First Lien Agent describing such Event of Default in reasonable
detail.

 

“Second Lien Loan Documents” means the Second Lien Loan Agreement, all Loan
Documents (as such term is defined in the Second Lien Loan Agreement) and all
other agreements, documents and instruments at any time executed and/or
delivered by any Obligor or any other Person with, to or in favor of the Second
Lien Creditors in connection therewith or related thereto, in each case, as
amended or otherwise modified from time to time in accordance with the terms of
this Agreement.

 

“Second Lien Loan Obligations” means all obligations, liabilities and
indebtedness of every kind, nature and description owing by one or more
Borrowers or any other Obligor to one or more of Second Lien Creditors evidenced
by or arising under one or more of the Second Lien Loan Documents, whether
direct or indirect, absolute or contingent, joint or several, due or not due,
primary or secondary, liquidated or un-liquidated, including principal,
interest, charges, fees, costs, indemnities and reasonable expenses, however
evidenced, whether as principal, surety, endorser, guarantor or otherwise,
whether now existing or hereafter arising, whether arising before, during or
after the initial or any renewal term of the Second Lien Loan Agreement, whether
arising before, during or after the commencement of any Insolvency Proceeding
with respect to any Obligor (and including the payment of interest which would
accrue and become due but for the commencement of such Insolvency Proceeding,
whether or not such interest is allowed or allowable in whole or in part in any
such Insolvency Proceeding).

 

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 “Secured Creditors” means the First Lien Creditors and the Second Lien
Creditors, collectively.

 

“Standstill Period” means the period during which the Second Lien Creditors are
not permitted to take Enforcement Action under Section 4.1 commencing on the
date of the occurrence of an Event of Default under the Second Lien Loan
Agreement and ending (subject to the final proviso to Section 4.1), upon the
date which is 120 days after the First Lien Agent has received a Second Lien
Loan Default Notice with respect to such Event of Default.

 

“Uniform Commercial Code” means the Uniform Commercial Code as in effect from
time to time in the State of New York; provided, however, that, at any time, if
by reason of mandatory provisions of law, any or all of the perfection or
priority of any Secured Creditors’ security interest in any item or portion of
the Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term “Uniform Commercial
Code” shall mean the Uniform Commercial Code as in effect, at such time, in such
other jurisdiction for purposes of the provisions hereof relating to such
perfection or priority and for purposes of definitions relating to such
provisions.

 

1.2          CERTAIN MATTERS OF CONSTRUCTION.  THE WORDS “HEREOF”, “HEREIN” AND
“HEREUNDER” AND WORDS OF SIMILAR IMPORT WHEN USED IN THIS AGREEMENT SHALL REFER
TO THIS AGREEMENT AS A WHOLE AND NOT TO ANY PARTICULAR PROVISION OF THIS
AGREEMENT AND SECTION REFERENCES ARE TO THIS AGREEMENT UNLESS OTHERWISE
SPECIFIED.  FOR PURPOSES OF THIS AGREEMENT, THE FOLLOWING ADDITIONAL RULES OF
CONSTRUCTION SHALL APPLY: (I) WHEREVER FROM THE CONTEXT IT APPEARS APPROPRIATE,
EACH TERM STATED IN EITHER THE SINGULAR OR PLURAL SHALL INCLUDE THE SINGULAR AND
THE PLURAL, AND PRONOUNS STATED IN THE MASCULINE, FEMININE OR NEUTER GENDER
SHALL INCLUDE THE MASCULINE, THE FEMININE AND THE NEUTER; (II) THE TERM
“INCLUDING” SHALL NOT BE LIMITING OR EXCLUSIVE, UNLESS SPECIFICALLY INDICATED TO
THE CONTRARY; (III) ALL REFERENCES TO STATUTES AND RELATED REGULATIONS SHALL
INCLUDE ANY AMENDMENTS OF SAME AND ANY SUCCESSOR STATUTES AND REGULATIONS; AND
(IV) UNLESS OTHERWISE SPECIFIED, ALL REFERENCES TO ANY INSTRUMENTS OR
AGREEMENTS, INCLUDING REFERENCES TO ANY OF THIS AGREEMENT AND THE DOCUMENTS,
SHALL INCLUDE ANY AND ALL MODIFICATIONS OR AMENDMENTS THERETO AND ANY AND ALL
EXTENSIONS OR RENEWALS THEREOF, IN EACH CASE, MADE IN ACCORDANCE WITH THE TERMS
HEREOF.

 

Section 2.              No New Liens.

 

2.1          SO LONG AS THE FIRST LIEN LOAN OBLIGATIONS HAVE NOT BEEN PAID IN
FULL, THE BORROWERS AGREE THAT NO OBLIGOR SHALL (I) GRANT OR PERMIT ANY
ADDITIONAL LIENS ON ANY ASSET OR PROPERTY TO SECURE ANY SECOND LIEN LOAN
OBLIGATION UNLESS (AND THE SECOND LIEN AGENT AND EACH SECOND LIEN LENDER SHALL
NOT ACCEPT ANY SUCH LIEN UNLESS) SUCH OBLIGOR HAS GRANTED A LIEN ON SUCH ASSET
OR PROPERTY TO SECURE THE FIRST LIEN LOAN OBLIGATIONS AND (II) GRANT OR PERMIT
ANY ADDITIONAL LIENS ON ANY ASSET OR PROPERTY TO SECURE ANY FIRST LIEN LOAN
OBLIGATION UNLESS (AND THE FIRST LIEN AGENT AND EACH FIRST LIEN LENDER SHALL NOT
ACCEPT ANY SUCH LIEN UNLESS) SUCH OBLIGOR HAS GRANTED A LIEN ON SUCH ASSET OR
PROPERTY TO SECURE THE SECOND LIEN LOAN OBLIGATIONS.  TO THE EXTENT THAT THE
FOREGOING PROVISIONS OF THIS SECTION 2.1 ARE NOT COMPLIED WITH FOR ANY REASON,
WITHOUT LIMITING ANY OTHER RIGHTS AND REMEDIES AVAILABLE TO THE FIRST LIEN AGENT
AND/OR FIRST LIEN LENDERS, SECOND LIEN AGENT ON BEHALF OF ITSELF AND THE SECOND
LIEN LENDERS, AGREES THAT ANY AMOUNTS RECEIVED BY OR DISTRIBUTED TO ANY OF THEM
PURSUANT TO OR AS A RESULT OF LIENS GRANTED TO ANY OF THEM IN CONTRAVENTION OF
THIS SECTION 2.1 SHALL BE SUBJECT TO SECTION 3.4.

 

2.2          SIMILAR LIENS AND AGREEMENTS.  THE PARTIES HERETO AGREE THAT IT IS
THEIR INTENTION THAT THE COLLATERAL SECURING THE FIRST LIEN LOAN OBLIGATIONS AND
THE COLLATERAL SECURING THE SECOND LIEN LOAN OBLIGATIONS BE IDENTICAL.  IN
FURTHERANCE OF THE FOREGOING, THE PARTIES HERETO AGREE, SUBJECT TO THE OTHER
PROVISIONS OF THIS AGREEMENT:

 

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(a)  upon request by the First Lien Agent or the Second Lien Agent, to cooperate
in good faith (and to direct their counsel to cooperate in good faith) from time
to time in order to determine the specific items included in the Collateral
securing the First Lien Loan Obligations or Collateral securing the Second Lien
Loan Obligations and the steps taken to perfect their respective Liens thereon
and the identity of the respective parties obligated under the First Lien Loan
Credit Documents and the Second Lien Loan Documents; and

 

(B)  THAT THE DOCUMENTS AND AGREEMENTS CREATING OR EVIDENCING THE COLLATERAL
SECURING THE FIRST LIEN LOAN OBLIGATIONS AND THE COLLATERAL SECURING THE SECOND
LIEN LOAN OBLIGATIONS SHALL BE IN ALL MATERIAL RESPECTS THE SAME FORMS OF
DOCUMENTS OTHER THAN WITH RESPECT TO THE RESPECTIVE PRIORITIES THEREOF AND THE
NATURE OF THE OBLIGATIONS THEREUNDER, IT BEING UNDERSTOOD THAT THE FIRST LIEN
AGENT SHALL HAVE EXCLUSIVE CONTROL OVER ALL LOCKBOX ACCOUNTS, DEPOSIT ACCOUNTS
AND SECURITIES ENTITLEMENTS UNTIL THE FIRST LIEN LOAN OBLIGATIONS HAVE BEEN PAID
IN FULL.

 

Section 3.              Security Interests; Priorities.

 

3.1          PRIORITIES.  EACH SECURED CREDITOR HEREBY ACKNOWLEDGES THAT OTHER
SECURED CREDITORS HAVE BEEN GRANTED LIENS UPON THE COLLATERAL TO SECURE THEIR
RESPECTIVE OBLIGATIONS.  THE LIENS OF THE FIRST LIEN AGENT ON THE COLLATERAL, TO
THE EXTENT THAT SUCH LIENS SECURE THE FIRST LIEN LOAN OBLIGATIONS, HAVE AND
SHALL BE SENIOR AND PRIOR IN RIGHT TO THE LIENS OF THE SECOND LIEN CREDITORS ON
THE COLLATERAL, AND SUCH LIENS OF THE SECOND LIEN CREDITORS ON THE COLLATERAL
ARE AND SHALL BE JUNIOR AND SUBORDINATE TO THE LIENS OF THE FIRST LIEN AGENT, TO
THE EXTENT THAT SUCH LIENS SECURE THE FIRST LIEN LOAN OBLIGATIONS.  THE
PRIORITIES OF THE LIENS PROVIDED IN THIS SECTION 3.1 SHALL NOT BE ALTERED OR
OTHERWISE AFFECTED BY ANY AMENDMENT, MODIFICATION, SUPPLEMENT, EXTENSION,
RENEWAL, RESTATEMENT, REPLACEMENT OR REFINANCING OF ANY OF THE OBLIGATIONS, NOR
BY ANY ACTION OR INACTION WHICH ANY OF THE SECURED CREDITORS MAY TAKE OR FAIL TO
TAKE IN RESPECT OF THE COLLATERAL.

 

3.2          NO ALTERATION OF PRIORITY.  THE PRIORITIES SET FORTH IN THIS
AGREEMENT ARE APPLICABLE IRRESPECTIVE OF THE ORDER OR TIME OF ATTACHMENT, OR THE
ORDER, TIME OR MANNER OF PERFECTION, OR THE ORDER OR TIME OF FILING OR
RECORDATION OF ANY DOCUMENT OR INSTRUMENT, OR OTHER METHOD OF PERFECTING A LIEN
IN FAVOR OF EACH SECURED CREDITOR IN ANY COLLATERAL, AND NOTWITHSTANDING ANY
CONFLICTING TERMS OR CONDITIONS WHICH MAY BE CONTAINED IN ANY OF THE DOCUMENTS. 
EACH FIRST LIEN CREDITOR AGREES NOT TO ENTER IN ANY AGREEMENT WITH ANOTHER
CREDITOR OF ANY BORROWER OR ANY OBLIGOR TO SUBORDINATE THE LIEN OF FIRST LIEN
CREDITORS IN ANY COLLATERAL UNDER THE FIRST LIEN LOAN DOCUMENTS TO THE LIEN OF
SUCH OTHER CREDITOR IN THE COLLATERAL, OR TO SUBORDINATE THE RIGHT OF THE FIRST
LIEN CREDITORS TO THE PAYMENT OF THE FIRST LIEN LOAN OBLIGATIONS TO THE PAYMENT
OF THE INDEBTEDNESS OR CLAIM OF ANY OTHER CREDITOR OF ANY BORROWER OR ANY
OBLIGOR, IN EACH CASE WITHOUT THE PRIOR WRITTEN CONSENT OF SECOND LIEN CREDITORS
OTHER THAN IN CONNECTION WITH BAILEE, LANDLORD, CONTROL, CONSIGNMENT AND SIMILAR
THIRD PARTIES LETTERS THAT DO NOT INVOLVE SUBORDINATION TO LIENS SECURING
INDEBTEDNESS FOR BORROWED MONEY.

 

3.3          PERFECTION.  SUBJECT TO SECTION 4.4, EACH SECURED CREDITOR SHALL BE
SOLELY RESPONSIBLE FOR PERFECTING AND MAINTAINING THE PERFECTION OF ITS LIEN IN
AND TO EACH ITEM CONSTITUTING THE COLLATERAL IN WHICH SUCH SECURED CREDITOR HAS
BEEN GRANTED A LIEN.  THE FOREGOING PROVISIONS OF THIS AGREEMENT ARE INTENDED
SOLELY TO GOVERN THE RESPECTIVE LIEN PRIORITIES AS AMONG THE SECURED CREDITORS
AND SHALL NOT IMPOSE ON ANY SECURED CREDITOR ANY OBLIGATIONS IN RESPECT OF THE
DISPOSITION OF PROCEEDS OF ANY COLLATERAL THAT WOULD CONFLICT WITH PRIOR
PERFECTED CLAIMS THEREIN IN FAVOR OF ANY OTHER PERSON OR ANY ORDER OR DECREE OF
ANY COURT OR GOVERNMENTAL AUTHORITY OR ANY APPLICABLE LAW.  WHETHER OR NOT AN
INSOLVENCY PROCEEDING IS CONTINUING, EACH SECURED CREDITOR AGREES NOT TO
INITIATE, PROSECUTE OR PARTICIPATE IN ANY CLAIM, ACTION OR OTHER PROCEEDING
CHALLENGING THE ENFORCEABILITY, VALIDITY, PERFECTION OR PRIORITY OF ANY OR ALL
OF THE FIRST LIEN LOAN OBLIGATIONS OR SECOND LIEN LOAN OBLIGATIONS OR ANY LIENS
SECURING THE FIRST LIEN LOAN OBLIGATIONS OR SECOND LIEN LOAN OBLIGATIONS.

 

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3.4          PROCEEDS OF COLLATERAL.  SUBJECT TO SECTION 3.1, ALL PROCEEDS OF
THE COLLATERAL RECEIVED BY ANY SECOND LIEN CREDITOR IN CONNECTION WITH OR
PURSUANT TO AN ENFORCEMENT ACTION SHALL BE FORTHWITH PAID OVER, IN THE FUNDS AND
CURRENCY RECEIVED, TO THE FIRST LIEN AGENT FOR APPLICATION TO THE FIRST LIEN
LOAN OBLIGATIONS (EXCEPT AS OTHERWISE REQUIRED BY LAW OR COURT ORDER).  SUBJECT
TO SECTION 3.1,ALL PROCEEDS OF THE COLLATERAL RECEIVED BY ANY FIRST LIEN
CREDITOR AFTER THE FIRST LIEN LOAN TERMINATION DATE SHALL BE FORTHWITH PAID
OVER, IN THE FUNDS AND CURRENCY RECEIVED, TO THE SECOND LIEN CREDITORS FOR
APPLICATION TO THE SECOND LIEN LOAN OBLIGATIONS.

 

3.5          RELEASE OF COLLATERAL UPON PERMITTED COLLATERAL SALE.  THE SECOND
LIEN CREDITORS SHALL AT ANY TIME IN CONNECTION WITH ANY PERMITTED COLLATERAL
SALE:  (I) UPON THE REQUEST OF THE FIRST LIEN AGENT WITH RESPECT TO THE
COLLATERAL SUBJECT TO SUCH PERMITTED COLLATERAL SALE, RELEASE OR OTHERWISE
TERMINATE ITS LIENS ON SUCH COLLATERAL; (II) DELIVER SUCH TERMINATIONS OF
FINANCING STATEMENTS, PARTIAL LIEN RELEASES, MORTGAGE SATISFACTIONS AND
DISCHARGES, ENDORSEMENTS, ASSIGNMENTS OR OTHER INSTRUMENTS OF TRANSFER,
TERMINATION OR RELEASE (COLLECTIVELY, “RELEASE DOCUMENTS”) AND TAKE SUCH FURTHER
ACTIONS AS THE FIRST LIEN AGENT SHALL REASONABLY REQUIRE IN ORDER TO RELEASE
AND/OR TERMINATE SUCH SECOND LIEN CREDITOR’S LIENS ON THE COLLATERAL SUBJECT TO
SUCH PERMITTED COLLATERAL SALE; PROVIDED THAT IF THE CLOSING OF THE SALE OR
DISPOSITION OF THE COLLATERAL IS NOT CONSUMMATED, THE FIRST LIEN AGENT SHALL
PROMPTLY RETURN ALL RELEASE DOCUMENTS TO SUCH SECOND LIEN CREDITOR; AND (III) BE
DEEMED TO HAVE CONSENTED UNDER THE SECOND LIEN LOAN DOCUMENTS TO SUCH SALE OR
OTHER DISPOSITION FREE AND CLEAR OF SUCH SECOND LIEN CREDITOR’S SECURITY
INTEREST, IT BEING UNDERSTOOD THAT SUCH SECOND LIEN CREDITOR STILL, BUT SUBJECT
TO THIS AGREEMENT, HAS RIGHTS WITH RESPECT TO THE PROCEEDS OF SUCH COLLATERAL
(AND WAIVED ANY PROVISION OF THE SECOND LIEN LOAN DOCUMENTS TO THE EXTENT SUCH
TRANSACTION WOULD BE OTHERWISE PROHIBITED UNDER SUCH PROVISION).

 

3.6          RELEASE OF COLLATERAL UPON RELEASE EVENT.  EACH SECOND LIEN
CREDITOR SHALL, AT ANY TIME IN CONNECTION WITH A RELEASE EVENT WITH RESPECT TO
ANY COLLATERAL:  (I) UPON THE REQUEST OF THE FIRST LIEN AGENT WITH RESPECT TO
THE COLLATERAL SUBJECT TO SUCH RELEASE EVENT (WHICH REQUEST WILL SPECIFY THE
PROPOSED TERMS OF THE SALE AND THE TYPE AND AMOUNT OF CONSIDERATION EXPECTED TO
BE RECEIVED IN CONNECTION THEREWITH), RELEASE OR OTHERWISE TERMINATE ITS LIENS
ON SUCH COLLATERAL, TO THE EXTENT SUCH COLLATERAL IS TO BE SOLD OR OTHERWISE
DISPOSED OF EITHER BY (A) THE FIRST LIEN AGENT OR ITS AGENTS OR REPRESENTATIVES,
OR (B) ANY OBLIGOR WITH THE CONSENT OF THE FIRST LIEN CREDITORS; (II) BE DEEMED
TO HAVE CONSENTED UNDER THE SECOND LIEN LOAN DOCUMENTS TO SUCH SALE OR OTHER
DISPOSITION FREE AND CLEAR OF SUCH SECOND LIEN CREDITOR’S SECURITY INTEREST, IT
BEING UNDERSTOOD THAT SUCH SECOND LIEN CREDITOR STILL, BUT SUBJECT TO THIS
AGREEMENT, HAS RIGHTS WITH RESPECT TO THE PROCEEDS OF SUCH COLLATERAL (AND
WAIVED THE PROVISIONS OF THE SECOND LIEN LOAN DOCUMENTS TO THE EXTENT NECESSARY
TO PERMIT SUCH TRANSACTION); AND (III) DELIVER SUCH RELEASE DOCUMENTS AND TAKE
SUCH FURTHER ACTIONS AS FIRST LIEN AGENT MAY REASONABLY REQUIRE IN CONNECTION
THEREWITH; PROVIDED THAT, (A) SUCH RELEASE BY THE SECOND LIEN CREDITORS SHALL
NOT EXTEND TO OR OTHERWISE AFFECT ANY OF THE RIGHTS OF THE SECOND LIEN CREDITORS
TO THE PROCEEDS FROM ANY SUCH SALE OR OTHER DISPOSITION OF COLLATERAL, (B) THE
FIRST LIEN CREDITORS SHALL PROMPTLY APPLY SUCH PROCEEDS TO PERMANENTLY REPAY THE
FIRST LIEN LOAN OBLIGATIONS UNTIL THE SAME HAVE BEEN PAID IN FULL, (C) AFTER
SUCH APPLICATION, THE FIRST LIEN AGENT SHALL, SUBJECT TO SECTION 3.1,  PROMPTLY
DELIVER ANY EXCESS PROCEEDS FROM SUCH SALE OR DISPOSITION OF SUCH COLLATERAL TO
THE SECOND LIEN AGENT FOR APPLICATION TO THE SECOND LIEN LOAN OBLIGATIONS OR AS
OTHERWISE REQUIRED UNDER APPLICABLE LAW OR AS A COURT OF COMPETENT JURISDICTION
MAY DIRECT AND (D) NO SUCH RELEASE AND/OR AUTHORIZATION DOCUMENTS SHALL BE
DELIVERED (1) TO ANY OBLIGOR OR (2) LESS THAN TWO OR MORE THAN 10 BUSINESS DAYS
PRIOR TO THE DATE OF THE CLOSING OF THE SALE OR DISPOSITION OF SUCH COLLATERAL,
PROVIDED FURTHER THAT IF THE CLOSING OF THE SALE OR DISPOSITION OF THE
COLLATERAL SUBJECT TO SUCH RELEASE EVENT IS NOT CONSUMMATED, THE FIRST LIEN
AGENT SHALL PROMPTLY RETURN ALL RELEASE DOCUMENTS TO SUCH SECOND LIEN CREDITOR.

 

3.7          POWER OF ATTORNEY.  THE SECOND LIEN AGENT, ON BEHALF OF EACH SECOND
LIEN CREDITOR, HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE FIRST LIEN AGENT
AND ANY OFFICER OF FIRST LIEN AGENT, WITH FULL POWER OF SUBSTITUTION, AS ITS
TRUE AND LAWFUL ATTORNEY-IN-FACT WITH FULL IRREVOCABLE POWER AND AUTHORITY

 

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IN THE PLACE AND STEAD OF THE SECOND LIEN AGENT AND IN THE NAME OF THE SECOND
LIEN AGENT OR IN THE FIRST LIEN AGENT’S OWN NAME, FROM TIME TO TIME IN THE FIRST
LIEN AGENT’S DISCRETION, FOR THE PURPOSE OF CARRYING OUT THE TERMS OF SECTIONS
3.5 AND 3.6 HEREOF, TO TAKE ANY AND ALL APPROPRIATE ACTION AND TO EXECUTE ANY
AND ALL DOCUMENTS AND INSTRUMENTS WHICH MAY BE NECESSARY OR DESIRABLE TO
ACCOMPLISH THE PURPOSES OF SUCH SECTION, INCLUDING ANY RELEASE DOCUMENTS, AND,
IN ADDITION, TO TAKE ANY AND ALL OTHER APPROPRIATE AND COMMERCIALLY REASONABLE
ACTION FOR THE PURPOSE OF CARRYING OUT THE TERMS OF SUCH SECTIONS.  EACH SECOND
LIEN CREDITOR HEREBY RATIFIES ALL THAT SAID ATTORNEYS SHALL LAWFULLY DO OR CAUSE
TO BE DONE PURSUANT TO THE POWER OF ATTORNEY GRANTED IN THIS SECTION 3.7.  NO
PERSON TO WHOM THIS POWER OF ATTORNEY IS PRESENTED, AS AUTHORITY FOR FIRST LIEN
AGENT TO TAKE ANY ACTION OR ACTIONS CONTEMPLATED HEREBY, SHALL BE REQUIRED TO
INQUIRE INTO OR SEEK CONFIRMATION FROM ANY SECOND LIEN CREDITOR AS TO THE
AUTHORITY OF FIRST LIEN AGENT TO TAKE ANY ACTION DESCRIBED HEREIN, OR AS TO THE
EXISTENCE OF OR FULFILLMENT OF ANY CONDITION TO THIS POWER OF ATTORNEY, WHICH IS
INTENDED TO GRANT TO FIRST LIEN AGENT UNCONDITIONALLY THE AUTHORITY TO TAKE AND
PERFORM THE ACTIONS CONTEMPLATED HEREIN.  EACH SECOND LIEN CREDITOR IRREVOCABLY
WAIVES ANY RIGHT TO COMMENCE ANY SUIT OR ACTION, IN LAW OR EQUITY, AGAINST ANY
PERSON WHICH ACTS IN RELIANCE UPON OR ACKNOWLEDGES THE AUTHORITY GRANTED UNDER
THIS POWER OF ATTORNEY.

 

3.8          WAIVER.  EACH SECURED CREDITOR WAIVES ANY AND ALL NOTICE OF THE
CREATION, RENEWAL, EXTENSION OR ACCRUAL OF ANY OF THE OBLIGATIONS UNDER THE
FIRST LIEN LOAN DOCUMENTS OR THE SECOND LIEN LOAN DOCUMENTS AND NOTICE OF OR
PROOF OF RELIANCE BY THE FIRST LIEN CREDITORS OR THE SECOND LIEN CREDITORS UPON
THIS AGREEMENT AND PROTEST, DEMAND FOR PAYMENT OR NOTICE EXCEPT TO THE EXTENT
OTHERWISE SPECIFIED HEREIN.  EACH SECURED CREDITOR ACKNOWLEDGES AND AGREES THAT
THE OTHER SECURED CREDITORS HAVE RELIED UPON THE LIEN PRIORITY AND OTHER
PROVISIONS HEREOF IN ENTERING INTO THE DOCUMENTS AND IN MAKING FUNDS AVAILABLE
TO THE BORROWERS THEREUNDER.

 

3.9          NOTICE OF INTEREST IN COLLATERAL.  THIS AGREEMENT IS INTENDED, IN
PART, TO CONSTITUTE AN AUTHENTICATED NOTIFICATION OF A CLAIM BY EACH SECURED
CREDITOR TO THE OTHER SECURED CREDITORS OF AN INTEREST IN THE COLLATERAL IN
ACCORDANCE WITH THE PROVISIONS OF SECTIONS 9-611 AND 9-621 OF THE UNIFORM
COMMERCIAL CODE.

 

Section 4.              Enforcement of Security.

 

4.1          MANAGEMENT OF COLLATERAL.  SUBJECT TO THE OTHER TERMS AND
CONDITIONS OF THIS AGREEMENT, THE FIRST LIEN CREDITORS SHALL HAVE THE EXCLUSIVE
RIGHT TO MANAGE, PERFORM AND ENFORCE THE TERMS OF THE DOCUMENTS WITH RESPECT TO
THE COLLATERAL, TO EXERCISE AND ENFORCE ALL PRIVILEGES AND RIGHTS THEREUNDER
ACCORDING TO THEIR DISCRETION AND THE EXERCISE OF THEIR SOLE BUSINESS JUDGMENT,
INCLUDING THE EXCLUSIVE RIGHT TO TAKE OR RETAKE CONTROL OR POSSESSION OF THE
COLLATERAL AND TO HOLD, PREPARE FOR SALE, PROCESS, SELL, LEASE, DISPOSE OF, OR
LIQUIDATE THE COLLATERAL AND TO INCUR EXPENSES IN CONNECTION WITH SUCH SALE OR
DISPOSITION AND TO EXERCISE ALL THE RIGHTS AND REMEDIES OF A SECURED LENDER
UNDER THE UNIFORM COMMERCIAL CODE OF ANY APPLICABLE JURISDICTION.  IN CONDUCTING
ANY PUBLIC OR PRIVATE SALE UNDER THE UNIFORM COMMERCIAL CODE, THE FIRST LIEN
AGENT SHALL GIVE THE SECOND LIEN AGENT SUCH NOTICE OF SUCH SALE AS MAY BE
REQUIRED BY THE APPLICABLE UNIFORM COMMERCIAL CODE; PROVIDED, HOWEVER, THAT 10
DAYS’ NOTICE SHALL BE DEEMED TO BE COMMERCIALLY REASONABLE NOTICE.  EXCEPT AS
SPECIFICALLY PROVIDED IN THIS SECTION 4.1 BELOW, NOTWITHSTANDING ANY RIGHTS OR
REMEDIES AVAILABLE TO AN SECOND LIEN CREDITOR UNDER ANY OF THE SECOND LIEN LOAN
DOCUMENTS, APPLICABLE LAW OR OTHERWISE, NO SECOND LIEN CREDITOR SHALL, DIRECTLY
OR INDIRECTLY, TAKE ANY ENFORCEMENT ACTION; PROVIDED, FURTHER, THAT SUBJECT AT
ALL TIMES TO THE PROVISIONS OF SECTION 3, UPON THE EXPIRATION OF THE STANDSTILL
PERIOD, THE SECOND LIEN CREDITORS MAY TAKE ANY ENFORCEMENT ACTION WITH RESPECT
TO ANY COLLATERAL, BUT ONLY SO LONG AS THE FIRST LIEN CREDITORS ARE NOT PURSUING
DILIGENTLY IN GOOD FAITH AN ENFORCEMENT ACTION WITH RESPECT TO SUCH COLLATERAL,
OR DILIGENTLY ATTEMPTING IN GOOD FAITH TO VACATE ANY STAY PROHIBITING AN
ENFORCEMENT ACTION WITH RESPECT TO SUCH COLLATERAL; PROVIDED, FURTHER, THAT
NOTWITHSTANDING THE FOREGOING, NOTHING CONTAINED IN THIS SECTION 4.1 SHALL
PROHIBIT OR LIMIT THE RIGHT OF THE SECOND LIEN CREDITORS, OR ANY ONE OR MORE OF
THEM, FROM ACCELERATING THE SECOND LIEN LOAN OBLIGATIONS

 

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IN ACCORDANCE WITH THE SECOND LIEN LOAN DOCUMENTS.  SUBJECT AT ALL TIMES TO THE
PROVISIONS OF SECTION 3 AND TO THE PRECEDING SENTENCE, IF ANY SECOND LIEN
CREDITOR COMMENCES ANY ENFORCEMENT ACTION TO ENFORCE ITS LIEN ON ALL OR ANY
MATERIAL PORTION OF THE COLLATERAL IN ACCORDANCE WITH THE TERMS OF THIS
AGREEMENT, AND IS DILIGENTLY PURSUING IN GOOD FAITH SUCH ENFORCEMENT ACTION, THE
FIRST LIEN CREDITORS SHALL NOT TAKE ANY ENFORCEMENT ACTION OF A SIMILAR NATURE
WITH RESPECT TO SUCH COLLATERAL.  UNTIL THE FIRST LIEN LOAN TERMINATION DATE,
SUBJECT TO THE RIGHTS OF THE OBLIGORS, THE FIRST LIEN AGENT SHALL HAVE (I) THE
EXCLUSIVE RIGHT TO ADJUST SETTLEMENT OF ANY INSURANCE POLICY COVERING THE
COLLATERAL AND TO APPROVE ANY AWARD IN ANY CONDEMNATION OR SIMILAR PROCEEDING
AFFECTING THE COLLATERAL, (II) THE RIGHT TO RECEIVE ALL PROCEEDS OF SUCH
POLICIES AND AWARDS, AND (III) THE RIGHT TO ENDORSE THE NAME OF THE SECOND LIEN
AGENT ON ANY CHECKS OR OTHER ITEMS OF PAYMENT EVIDENCING SUCH PROCEEDS.

 

4.2          NOTICES OF DEFAULT.  EACH SECURED CREDITOR SHALL GIVE TO THE OTHER
SECURED CREDITORS (OR THE AGENT THEREFOR) CONCURRENTLY WITH THE GIVING THEREOF
TO ANY OBLIGOR (I) A COPY OF ANY WRITTEN NOTICE BY SUCH SECURED CREDITOR OF AN
EVENT OF DEFAULT UNDER ANY OF ITS DOCUMENTS OR A WRITTEN NOTICE OF DEMAND FOR
PAYMENT FROM ANY OBLIGOR, AND (II) A COPY OF ANY WRITTEN NOTICE SENT BY SUCH
SECURED CREDITOR TO ANY OBLIGOR STATING SUCH SECURED CREDITOR’S INTENTION TO
EXERCISE ANY MATERIAL ENFORCEMENT RIGHTS OR REMEDIES AGAINST SUCH OBLIGOR,
INCLUDING WRITTEN NOTICE PERTAINING TO ANY FORECLOSURE ON ALL OR ANY MATERIAL
PART OF THE COLLATERAL OR OTHER JUDICIAL OR NON-JUDICIAL REMEDY IN RESPECT
THEREOF, AND ANY LEGAL PROCESS SERVED OR FILED IN CONNECTION THEREWITH; PROVIDED
THAT THE FAILURE OF ANY SECURED CREDITOR TO GIVE SUCH REQUIRED NOTICE SHALL NOT
RESULT IN ANY LIABILITY TO SUCH SECURED CREDITOR OR AFFECT THE ENFORCEABILITY OF
ANY PROVISION OF THIS AGREEMENT, INCLUDING THE RELATIVE PRIORITIES OF THE LIENS
OF THE SECURED CREDITORS AS PROVIDED HEREIN, AND SHALL NOT AFFECT THE VALIDITY
OR EFFECTIVENESS OF ANY SUCH NOTICE AS AGAINST ANY OBLIGOR.  EACH OF FIRST LIEN
AGENT AND SECOND LIEN CREDITORS WILL PROVIDE SUCH INFORMATION AS IT MAY HAVE TO
THE OTHER AS THE OTHER MAY FROM TIME TO TIME REASONABLY REQUEST CONCERNING THE
STATUS OF THE EXERCISE OF ANY ENFORCEMENT ACTION AND FIRST LIEN AGENT AND SECOND
LIEN CREDITORS SHALL BE AVAILABLE ON A REASONABLE BASIS DURING NORMAL BUSINESS
HOURS TO REVIEW WITH EACH OTHER ALTERNATIVES AVAILABLE IN EXERCISING SUCH
RIGHTS, INCLUDING, BUT NOT LIMITED TO, ADVISING EACH OTHER OF ANY OFFERS WHICH
MAY BE MADE FROM TIME TO TIME BY PROSPECTIVE PURCHASERS OF THE COLLATERAL,
PROVIDED, THAT, THE FAILURE OF ANY PARTY TO DO ANY OF THE FOREGOING SHALL NOT
AFFECT THE RELATIVE PRIORITIES OF FIRST LIEN AGENT’S OR SECOND LIEN CREDITOR’S
RESPECTIVE LIENS AS PROVIDED HEREIN OR THE VALIDITY OR EFFECTIVENESS OF ANY
NOTICES OR DEMANDS AS AGAINST ANY BORROWER OR ANY OBLIGOR.  EACH BORROWER AND
OBLIGOR HEREBY CONSENTS AND AGREES TO EACH SECURED CREDITOR PROVIDING ANY SUCH
INFORMATION TO THE OTHER SECURED CREDITORS AND TO SUCH ACTIONS BY THE SECURED
CREDITORS AND WAIVE ANY RIGHTS OR CLAIMS AGAINST ANY SECURED CREDITORS ARISING
AS A RESULT OF SUCH INFORMATION OR ACTIONS.

 

4.3          PERMITTED ACTIONS.  SECTION 4.1 SHALL NOT BE CONSTRUED TO LIMIT OR
IMPAIR IN ANY WAY THE RIGHT OF:  (I) ANY SECURED CREDITOR TO BID FOR OR PURCHASE
COLLATERAL AT ANY PRIVATE OR JUDICIAL FORECLOSURE UPON SUCH COLLATERAL INITIATED
BY ANY SECURED CREDITOR, (II) ANY SECURED CREDITOR TO JOIN (BUT NOT CONTROL) ANY
FORECLOSURE OR OTHER JUDICIAL LIEN ENFORCEMENT PROCEEDING WITH RESPECT TO THE
COLLATERAL INITIATED BY ANOTHER SECURED CREDITOR FOR THE SOLE PURPOSE OF
PROTECTING SUCH SECURED CREDITOR’S LIEN ON THE COLLATERAL, SO LONG AS IT DOES
NOT DELAY OR INTERFERE WITH THE EXERCISE BY SUCH OTHER SECURED CREDITOR OF ITS
RIGHTS UNDER THIS AGREEMENT, THE DOCUMENTS AND UNDER APPLICABLE LAW, (III) THE
SECOND LIEN CREDITORS TO RECEIVE ANY REMAINING PROCEEDINGS OF COLLATERAL AFTER
THE FIRST LIEN LOAN OBLIGATIONS HAVE BEEN PAID IN FULL AND (IV) ANY SECOND LIEN
CREDITOR FROM (W) TAKING ANY ACTION (NOT ADVERSE TO THE PRIOR LIENS ON THE
COLLATERAL SECURING THE FIRST LIEN LOAN OBLIGATIONS) OR THE RIGHTS OF ANY FIRST
LIEN CREDITOR TO EXERCISE REMEDIES IN RESPECT OF SUCH LIENS IN ORDER TO PRESERVE
OR PROTECT ITS LIEN ON COLLATERAL, (X) FILING ANY NECESSARY RESPONSIVE OR
DEFENSIVE PLEADING IN OPPOSITION TO ANY MOTION, CLAIM, ADVERSARY PROCEEDING OR
OTHER PLEADING MADE BY ANY PERSON OBJECTING TO OR OTHERWISE SEEKING THE
DISALLOWANCE OF THE CLAIMS OF THE SECOND LIEN CREDITORS, INCLUDING, WITHOUT
LIMITATION, ANY SUCH CLAIMS SECURED BY THE COLLATERAL, (Y) FILING ANY PLEADINGS,
OBJECTIONS, MOTIONS OR AGREEMENTS WHICH ASSERT RIGHTS OR INTERESTS AVAILABLE TO
UNSECURED CREDITORS OF THE OBLIGORS ARISING UNDER WITH THE BANKRUPTCY CODE OR
OTHER APPLICABLE LAW, IN EACH CASE, IN

 

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ACCORDANCE WITH THE TERMS OF THIS AGREEMENT OR (Z) FILING ANY PROOF OF CLAIM AND
OTHER FILINGS AND MAKING ARGUMENTS AND MOTIONS THAT ARE, IN EACH CASE, IN
ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.

 

4.4          COLLATERAL IN POSSESSION.

 

(A)           IN THE EVENT THAT THE FIRST LIEN AGENT (I) TAKES POSSESSION OF OR
HAS “CONTROL” (AS SUCH TERM IS USED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT
IN EACH APPLICABLE JURISDICTION) OVER ANY COLLATERAL FOR PURPOSES OF PERFECTING
ITS LIEN THEREIN OR (II) IS NAMED AS THE SOLE LIEN HOLDER ON ANY CERTIFICATE OF
TITLE FOR ANY VEHICLE OWNED BY ANY OBLIGOR, THE FIRST LIEN AGENT SHALL BE DEEMED
TO BE HOLDING SUCH COLLATERAL OR NAMED AS SUCH LIEN HOLDER, AS AGENT FOR THE
SECURED CREDITORS, INCLUDING THE SECOND LIEN CREDITORS, SOLELY FOR PURPOSES OF
PERFECTION OF ITS LIEN UNDER THE UNIFORM COMMERCIAL CODE OR COMPARABLE
APPLICABLE LAW; PROVIDED THAT, ABSENT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT ON
THE PART OF THE FIRST LIEN AGENT, THE FIRST LIEN AGENT SHALL NOT HAVE ANY DUTY
OR LIABILITY OF ANY KIND WHATSOEVER IN CONNECTION WITH SUCH POSSESSION OR
CONTROL OR BEING NAMED AS SUCH LIENHOLDER, INCLUDING, WITHOUT LIMITATION, TO
PROTECT OR PRESERVE ANY RIGHTS PERTAINING TO ANY OF THE COLLATERAL FOR THE
SECOND LIEN CREDITORS AND EACH SECOND LIEN CREDITOR HEREBY ACKNOWLEDGES THAT IN
ITS CAPACITY AS SUCH AGENT, IN ITS CAPACITY AS A SECURED PARTY UNDER THE
SECURITY INTEREST GRANTED BELOW IN THIS PARAGRAPH (A), AND IN ITS CAPACITY AS
LIENHOLDER FOR THE SECOND LIEN LENDERS ON ANY SUCH CERTIFICATE OF TITLE, THE
FIRST LIEN AGENT IS ENTITLED TO INDEMNIFICATION BY THE SECOND LIEN LENDERS UNDER
THE TERMS OF THE GE CREDIT AGREEMENT AS IN EFFECT ON THE DATE HEREOF TO THE SAME
EXTENT AS THE “AGENT” (AS SUCH TERM IS DEFINED THEREIN AS OF THE DATE HEREOF)
AND EACH SECOND LIEN CREDITOR HEREBY WAIVES AND RELEASES THE FIRST LIEN AGENT
FROM ALL CLAIMS AND LIABILITIES ARISING PURSUANT TO ITS ROLE AS SUCH
REPRESENTATIVE, EXCEPT FOR CLAIMS AND LIABILITIES ARISING FROM GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT AS FINALLY DETERMINED PURSUANT TO A FINAL ORDER OF A COURT
OF COMPETENT JURISDICTION.  IN ORDER TO SECURE THE PROMPT PAYMENT AND
PERFORMANCE OF THE SECOND LIEN LOAN OBLIGATIONS, EACH OBLIGOR HEREBY GRANTS TO
THE FIRST LIEN AGENT, AS AGENT FOR THE SECOND LIEN AGENT, A SECURITY INTEREST IN
ALL RIGHT, TITLE AND INTEREST OF SUCH OBLIGOR IN, TO AND UNDER ALL VEHICLES FOR
WHICH A CERTIFICATE OR TITLE HAS BEEN OR AT ANY TIME MAY BE ISSUED, NOW OWNED OR
HEREAFTER ACQUIRED BY SUCH OBLIGOR.  THE SECOND LIEN AGENT IRREVOCABLY AGREES TO
PERFORM ALL DUTIES AND DISCHARGE ALL OBLIGATIONS OF THE FIRST LIEN AGENT IN THE
FIRST LIEN AGENT’S CAPACITY AS SUCH SECURED PARTY (OTHER THAN FURNISHING SUCH
TITLES AND SIGNING ANY DOCUMENTS PERTAINING TO ANY SUCH CERTIFICATES OF TITLE
THAT CAN BE SIGNED ONLY BY THE FIRST LIEN AGENT) AND EACH OBLIGOR ACKNOWLEDGES
THAT ALL SUCH DUTIES AND OBLIGATIONS SHALL BE PERFORMED BY THE SECOND LIEN AGENT
AND TO THE EXTENT PERMITTED BY APPLICABLE LAW THAT SUCH OBLIGOR WILL NOT SEEK
PERFORMANCE OF ANY SUCH DUTIES AND OBLIGATIONS FROM THE FIRST LIEN AGENT.  ALL
COSTS AND EXPENSES INCURRED BY THE FIRST LIEN AGENT IN ITS CAPACITY AS SUCH
SECURED PARTY SHALL BE PAID ON DEMAND BY THE OBLIGORS, JOINTLY AND SEVERALLY,
AND FAILING SUCH PAYMENT BY THE SECOND LIEN LENDERS (AND UPON REQUEST IN
CONNECTION WITH ANY SUCH COSTS AND EXPENSES, SECOND LIEN AGENT SHALL PROVIDE TO
THE FIRST LIEN AGENT NAMES AND CONTACT INFORMATION FOR ALL SECOND LIEN
LENDERS).  SUCH GRANT CREATES A SECURITY INTEREST WHOLLY SEPARATE FROM THE
SECURITY INTEREST IN SUCH TITLED VEHICLES GRANTED TO THE FIRST LIEN AGENT IN THE
FIRST LIEN LOAN DOCUMENTS AS SECURITY FOR THE FIRST LIEN LOAN OBLIGATIONS.  UPON
THE FIRST LIEN LOAN TERMINATION DATE, AT THE COST AND EXPENSE OF THE OBLIGORS,
ALL CERTIFICATES OF TITLE NAMING FIRST LIEN AGENT SHALL BE RE-SUBMITTED IN ORDER
TO REMOVE THE FIRST LIEN AGENT AND (IF ANY SECOND LIEN LOAN OBLIGATIONS ARE THEN
OUTSTANDING) TO NAME SOLELY THE SECOND LIEN AGENT THEREON (IT BEING UNDERSTOOD
THAT THE FIRST LIEN AGENT SHALL CONTINUE TO HOLD THE SECURITY INTEREST GRANTED
PURSUANT TO THIS SECTION 4.4(A) UNTIL SUCH TITLES ARE SO AMENDED). SUBJECT TO
SECTION 3.1, PROMPTLY FOLLOWING THE FIRST LIEN LOAN TERMINATION DATE, THE FIRST
LIEN AGENT SHALL, UPON THE REQUEST OF THE SECOND LIEN AGENT, (I) DELIVER THE
REMAINDER OF THE COLLATERAL, IF ANY, IN ITS POSSESSION TO THE DESIGNEE OF THE
SECOND LIEN AGENT OR AS OTHERWISE REQUIRED UNDER APPLICABLE LAW OR AS A COURT OF
COMPETENT JURISDICTION MAY DIRECT, IN ANY CASE WITHOUT REPRESENTATION OR
WARRANTY OF ANY KIND AND WITHOUT RECOURSE AND (II) SHALL DELIVER ANY NOTICES
CONTEMPLATED BY ANY DEPOSIT ACCOUNT CONTROL AGREEMENT, DELIVERY OF WHICH
TRANSFERS EXCLUSIVE CONTROL RIGHTS TO THE SECOND LIEN AGENT.  THE FIRST LIEN
AGENT MAKES NO REPRESENTATION OR WARRANTY THAT ANY LIEN SECURING THE SECOND LIEN
LOAN OBLIGATIONS INTENDED TO BE PERFECTED BY THE PROVISIONS OF THIS
SECTION 4.4(A) WILL BE PERFECTED.  NOTHING

 

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CONTAINED IN THIS SECTION 4.4(A) SHALL LIMIT OR RESTRICT IN ANY WAY THE RIGHTS
OF THE FIRST LIEN AGENT TO DEAL WITH ANY COLLATERAL REFERRED TO IN THIS
SECTION 4.4(A) AS PERMITTED BY THE FIRST LIEN LOAN DOCUMENTS AND WITHOUT REGARD
TO ANY RIGHTS OF THE SECOND LIEN CREDITORS IN SUCH COLLATERAL EXCEPT AS PROVIDED
IN THE IMMEDIATELY PRECEDING SENTENCE.

 

(B)           IN THE EVENT THAT ANY SECOND LIEN CREDITOR TAKES POSSESSION OF OR
HAS “CONTROL” (AS SUCH TERM IS USED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT
IN EACH APPLICABLE JURISDICTION) OVER ANY COLLATERAL FOR PURPOSES OF PERFECTING
ITS LIEN THEREIN, SUCH SECOND LIEN CREDITOR SHALL BE DEEMED TO BE HOLDING SUCH
COLLATERAL AS AGENT FOR THE SECURED CREDITORS, INCLUDING THE FIRST LIEN
CREDITORS, SOLELY FOR PURPOSES OF PERFECTION OF ITS LIEN UNDER THE UNIFORM
COMMERCIAL CODE OR COMPARABLE APPLICABLE LAW; PROVIDED THAT SUCH SECOND LIEN
CREDITOR SHALL NOT HAVE ANY DUTY OR LIABILITY WHATSOEVER TO PROTECT OR PRESERVE
ANY RIGHTS PERTAINING TO ANY OF THE COLLATERAL FOR THE FIRST LIEN CREDITORS, AND
EACH FIRST LIEN CREDITORS HEREBY WAIVES AND RELEASES THE SECOND LIEN CREDITORS
FROM ALL CLAIMS AND LIABILITIES ARISING PURSUANT TO ITS ROLE AS SUCH AGENT,
EXCEPT FOR CLAIMS AND LIABILITIES ARISING FROM GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT AS FINALLY DETERMINED PURSUANT TO A FINAL ORDER OF A COURT OF
COMPETENT JURISDICTION.  THE SECOND LIEN AGENT MAKES NO REPRESENTATION OR
WARRANTY THAT ANY LIEN SECURING THE FIRST LIEN LOAN OBLIGATIONS INTENDED TO BE
PERFECTED BY THE PROVISIONS OF THIS SECTION 4.4(B) WILL BE PERFECTED.  NOTHING
CONTAINED IN THIS SECTION 4.4(B) SHALL LIMIT OR RESTRICT IN ANY WAY THE RIGHTS
OF THE SECOND LIEN AGENT TO DEAL WITH ANY COLLATERAL REFERRED TO IN THIS
SECTION 4.4(B) AS PERMITTED BY THE SECOND LIEN LOAN DOCUMENTS AND THE OTHER
PROVISIONS OF THIS AGREEMENT.

 

(C)           IT IS UNDERSTOOD AND AGREED THAT THIS SECTION 4.4 IS INTENDED
SOLELY TO ASSURE CONTINUOUS PERFECTION OF THE LIENS GRANTED UNDER THE APPLICABLE
DOCUMENTS, AND NOTHING IN THIS SECTION 4.4 SHALL BE DEEMED OR CONSTRUED AS
ALTERING THE PRIORITIES OR OBLIGATIONS SET FORTH ELSEWHERE IN THIS AGREEMENT.

 

4.5          WAIVER OF MARSHALLING AND SIMILAR RIGHTS.  EACH SECURED CREDITOR,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, WAIVES AS TO EACH OTHER
SECURED CREDITOR ANY REQUIREMENT REGARDING, AND AGREES NOT TO DEMAND, REQUEST,
PLEAD OR OTHERWISE CLAIM THE BENEFIT OF, ANY MARSHALLING, APPRAISEMENT,
VALUATION OR OTHER SIMILAR RIGHT THAT MAY OTHERWISE BE AVAILABLE UNDER
APPLICABLE LAW.

 

4.6          TITLED VEHICLES.  THE FIRST LIEN AGENT, THE SECOND LIEN AGENT AND
THE OBLIGORS EACH AGREE THAT UNTIL THE FIRST LIEN LOAN TERMINATION DATE AND THE
RE-ISSUANCE OF TITLES WITH RESPECT TO TITLED VEHICLES CONSTITUTING COLLATERAL AS
CONTEMPLATED BY SECTION 4.4(A), EACH CERTIFICATE OF TITLE WITH RESPECT TO ANY
TITLED VEHICLE CONSTITUTING PART OF THE COLLATERAL SHALL, EXCEPT AS PROVIDED IN
THE FOLLOWING PROVISO, NAME THE FIRST LIEN AGENT AS SECURED PARTY AND SUCH
NOTATION SHALL BE INTENDED TO PERFECT THE SECURITY INTEREST OF THE FIRST LIEN
AGENT FOR THE BENEFIT OF THE FIRST LIEN SECURED PARTIES AND THE SECURITY
INTEREST OF THE FIRST LIEN AGENT AS AGENT FOR THE SECOND LIEN AGENT (FOR THE
BENEFIT OF THE SECOND LIEN AGENT AND THE SECOND LIEN LENDERS) GRANTED PURSUANT
TO SECTION 4.4(A) HEREOF IN SUCH TITLED VEHICLES; PROVIDED, THAT UNLESS THE
SECOND LIEN AGENT DETERMINES THAT THE NOTATION OF THE SECOND LIEN AGENT AS A
SECURED PARTY IN ADDITION TO THE FIRST LIEN AGENT IS NOT REQUIRED IN THE STATES
OF ARIZONA AND MINNESOTA OR ANY OTHER STATE WHICH RESERVES AN AREA ON
CERTIFICATES OF TITLE SPECIFICALLY FOR THE ENTRY OF THE NAME OF A SECOND LIEN
CREDITOR (ANY SUCH STATE BEING REFERRED TO AS A “SEPARATE TITLE STATE”) IN ORDER
TO PERFECT THE SECURITY INTEREST FOR THE BENEFIT OF SECOND LIEN AGENT AND THE
SECOND LIEN LENDERS, THEN FOR SO LONG AS SUCH SEPARATE NOTATION IS PERMITTED
UNDER APPLICABLE LAW, THE OBLIGORS AT THEIR SOLE COST AND EXPENSE SHALL CAUSE
(AND THE FIRST LIEN AGENT SHALL EXECUTE AT THE COST AND EXPENSE OF THE OBLIGORS
SUCH DOCUMENTS AS MAY BE NECESSARY TO CAUSE) SECOND LIEN AGENT’S SECURITY
INTEREST TO BE SEPARATELY NOTED ON EACH CERTIFICATE OF TITLE AS A SECOND
PRIORITY LIEN (WHILE RETAINING THE NOTATION OF THE FIRST LIEN AGENT AS THE FIRST
PRIORITY LIEN) UNDER THE LAWS OF THE APPLICABLE SEPARATE TITLE STATE GOVERNING
TITLED VEHICLES CONSTITUTING PART OF THE COLLATERAL.  UNTIL THE FIRST LIEN LOAN
TERMINATION DATE, EACH OBLIGOR THAT SUBMITS TO ANY GOVERNMENTAL AGENCY OR
AUTHORITY (I) ANY REQUEST FOR ISSUANCE IN THE NAME OF ANY OBLIGOR ANY
CERTIFICATE OF TITLE FOR ANY

 

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VEHICLE INCLUDED IN THE COLLATERAL OR (II) ANY CERTIFICATE OF TITLE FOR A
VEHICLE INCLUDED IN THE COLLATERAL FOR NOTATION ON SUCH CERTIFICATE OF TITLE OF
A LIEN, SHALL REQUEST THAT THE LIEN OF THE FIRST LIEN AGENT BE NOTED ON SUCH
CERTIFICATE OF TITLE, EITHER AS THE SOLE LIEN-HOLDER OR, TO THE EXTENT THAT THE
LIEN OF THE SECOND LIEN AGENT IS TO BE SEPARATELY NOTED ON SUCH CERTIFICATE OF
TITLE IN ACCORDANCE WITH THE FOREGOING PROVISIONS OF THIS SECTION 4.6 OR AS
REQUESTED BY THE SECOND LIEN AGENT IN ACCORDANCE WITH THE SECOND LIEN LOAN
DOCUMENTS, AS THE FIRST PRIORITY LIEN WITH THE LIEN OF THE SECOND LIEN AGENT
BEING NOTED ON SUCH CERTIFICATE OF TITLE AS THE SECOND PRIORITY LIEN.

 

Section 5.              Covenants

 

5.1          AMENDMENT OF FIRST LIEN LOAN DOCUMENTS.  THE FIRST LIEN CREDITORS
MAY AT ANY TIME AND FROM TIME TO TIME AND WITHOUT CONSENT OF OR NOTICE TO ANY
SECOND LIEN CREDITOR, WITHOUT INCURRING ANY LIABILITY TO ANY SECOND LIEN
CREDITOR AND WITHOUT IMPAIRING OR RELEASING ANY RIGHTS OR OBLIGATIONS HEREUNDER
OR OTHERWISE, AMEND, RESTATE, REFINANCE, REFUND, REPLACE SUPPLEMENT OR OTHERWISE
MODIFY ANY OR ALL OF THE FIRST LIEN DOCUMENTS; PROVIDED HOWEVER, THAT WITHOUT
THE CONSENT OF THE SECOND LIEN CREDITORS, THE FIRST LIEN CREDITORS SHALL NOT
AMEND, RESTATE, REFINANCE, REFUND, REPLACE SUPPLEMENT OR OTHERWISE MODIFY ANY OR
ALL OF THE FIRST LIEN DOCUMENTS TO (I) INCREASE THE INTEREST RATES ON THE FIRST
LIEN LOAN OBLIGATIONS TO AN AMOUNT GREATER THAN 3.0% PER ANNUM ABOVE THE RATES
AS ARE IN EFFECT ON THE DATE HEREOF (EXCLUDING, WITHOUT LIMITATION, FLUCTUATIONS
IN UNDERLYING RATE INDICES AND IMPOSITION OF A DEFAULT RATE OF 2% PER ANNUM)
(I) CHANGE THE FINAL MATURITY DATE OF THE FIRST LIEN LOAN OBLIGATIONS TO A DATE
LATER THAN NOVEMBER 1, 2010, (III) INCREASE THE PRINCIPAL AMOUNT OF THE FIRST
LIEN LOAN OBLIGATIONS IN EXCESS OF THE MAXIMUM FIRST LIEN PRINCIPAL AMOUNT,
OTHER THAN AS A RESULT OF THE CAPITALIZATION OF ACCRUED INTEREST AND EXPENSES,
(IV) MODIFY OR ADD ANY COVENANT OR EVENT OF DEFAULT UNDER THE FIRST LIEN
DOCUMENTS WHICH DIRECTLY RESTRICTS ONE OR MORE OBLIGORS FROM MAKING PAYMENTS
UNDER THE SECOND LIEN LOAN DOCUMENTS WHICH WOULD OTHERWISE BE PERMITTED UNDER
THE FIRST LIEN DOCUMENTS AS IN EFFECT ON THE DATE HEREOF OR (V) MODIFY IN A
MANNER ADVERSE TO THE OBLIGORS, ANY RIGHT CONTAINED IN THE GE CREDIT AGREEMENT
AS OF THE DATE HEREOF, TO REFINANCE THE SECOND LIEN LOAN OBLIGATIONS.

 

5.2          AMENDMENTS TO SECOND LIEN LOAN DOCUMENTS.  UNTIL THE FIRST LIEN
LOAN OBLIGATIONS HAVE BEEN PAID IN FULL, AND NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED IN THE SECOND LIEN LOAN DOCUMENTS, THE SECOND LIEN CREDITORS
SHALL NOT, WITHOUT THE PRIOR WRITTEN CONSENT OF THE FIRST LIEN AGENT, AGREE TO
ANY AMENDMENT, MODIFICATION OR SUPPLEMENT TO THE SECOND LIEN LOAN DOCUMENTS OR
ANY REFINANCING OF THE SECOND LIEN LOAN DOCUMENTS THAT THAT WOULD (I) INCREASE
THE INTEREST RATES ON THE SECOND LIEN LOAN OBLIGATIONS TO AN AMOUNT GREATER THAN
3.0% PER ANNUM ABOVE THE RATES AS ARE IN EFFECT ON THE DATE HEREOF (EXCLUDING,
WITHOUT LIMITATION, FLUCTUATIONS IN UNDERLYING RATE INDICES AND IMPOSITION OF A
DEFAULT RATE OF 2% PER ANNUM, (II) SHORTEN THE MATURITY OR WEIGHTED AVERAGE LIFE
TO MATURITY OF THE SECOND LIEN LOAN OBLIGATIONS, (III) INCREASE THE AMOUNT OF
THE SECOND LIEN LOAN OBLIGATIONS (OTHER THAN THROUGH THE ADDITION TO PRINCIPAL
OF CAPITALIZED INTEREST AND EXPENSES), OR (IV) CHANGE ANY REQUIREMENT AS TO
PREPAYMENT OF THE SECOND LIEN LOAN OBLIGATIONS THAT WOULD INCREASE THE AMOUNT OF
ANY REQUIRED PREPAYMENT UNDER THE SECOND LIEN LOAN DOCUMENTS, CREATE A NEW
PREPAYMENT REQUIREMENT OR MOVE TO AN EARLIER DATE ANY PREPAYMENT REQUIREMENT
UNDER THE SECOND LIEN LOAN DOCUMENTS, OR (V) ADD OR MAKE MORE RESTRICTIVE ANY
COVENANTS, AGREEMENTS, OR EVENTS OF DEFAULT UNDER THE SECOND LIEN LOAN
DOCUMENTS.

 

5.3          ENFORCEMENT ACTIONS BY SECOND LIEN CREDITORS; PREPAYMENTS.

 

(A)           THE SECOND LIEN CREDITORS SHALL GIVE THE FIRST LIEN AGENT AT LEAST
FIVE (5) BUSINESS DAYS’ WRITTEN NOTICE PRIOR TO TAKING ANY ENFORCEMENT ACTION,
WHICH NOTICE MAY BE GIVEN DURING THE PENDENCY OF ANY STANDSTILL PERIOD.

 

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(B)           EXCEPT AS OTHERWISE PERMITTED BY THIS AGREEMENT OR THE TERMS OF
THE FIRST LIEN LOAN DOCUMENTS AS IN EFFECT AT SUCH TIME, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE FIRST LIEN AGENT, NO SECOND LIEN CREDITOR WILL TAKE,
DEMAND OR RECEIVE FROM ANY OBLIGOR ANY PAYMENT OR PREPAYMENT OF PRINCIPAL OF THE
SECOND LIEN LOAN OBLIGATIONS THAT IS NOT PERMITTED UNDER THE TERMS OF THE GE
CREDIT AGREEMENT AS IN EFFECT ON THE DATE HEREOF, PROVIDED, HOWEVER THAT
NOTWITHSTANDING THE FOREGOING, THE SECOND LIEN AGENT AND ANY SECOND LIEN LENDERS
PAYMENT MAY RECEIVE PAYMENTS OF PRINCIPAL, PREMIUM, INTERESTS, FEES AND OTHER
AMOUNTS DUE UNDER THE SECOND LIEN LOAN DOCUMENTS AND SO PERMITTED SO LONG AS
SUCH RECEIPT IS NOT THE DIRECT OR INDIRECT RESULT OF THE ENFORCEMENT OR EXERCISE
BY THE SECOND LIEN AGENT OR ANY SECOND LIEN LENDER OF RIGHTS OR REMEDIES AS A
SECURED CREDITOR (INCLUDING ANY RIGHT OF SETOFF) OR ENFORCEMENT IN CONTRAVENTION
OF THIS AGREEMENT OF ANY LIEN IN FAVOR OF THE SECOND LIEN CREDITORS..

 

Section 6.              Second Lien Creditors Purchase Option.

 

6.1          PURCHASE NOTICE.  UPON THE SECOND LIEN CREDITORS’ RECEIPT OF A
NOTICE FROM FIRST LIEN AGENT (THE “AGENT’S NOTICE”) THAT FIRST LIEN AGENT HAS
ACCELERATED THE FIRST LIEN LOAN OBLIGATIONS (WHICH THE FIRST LIEN AGENT AGREES
TO GIVE PROMPTLY FOLLOWING ANY SUCH ACCELERATION), THE SECOND LIEN CREDITORS
SHALL HAVE THE OPTION TO PURCHASE ALL OF THE FIRST LIEN LOAN OBLIGATIONS OWING
TO THE FIRST LIEN LENDERS FROM THE FIRST LIEN LENDERS BY GIVING A WRITTEN NOTICE
(THE “PURCHASE NOTICE”) TO THE FIRST LIEN AGENT NO LATER THAN THE FIFTH BUSINESS
DAY AFTER RECEIPT BY THE SECOND LIEN CREDITORS OF THE AGENT’S NOTICE.  THE
PURCHASE NOTICE FROM THE SECOND LIEN CREDITORS TO THE FIRST LIEN AGENT SHALL BE
IRREVOCABLE.

 

6.2          PURCHASE OPTION CLOSING.  ON THE DATE SPECIFIED BY THE SECOND LIEN
CREDITORS ELECTING TO EXERCISE SUCH OPTION IN THE PURCHASE NOTICE (WHICH SHALL
NOT BE LESS THAN THREE (3) BUSINESS DAYS NOR MORE THAN FIVE (5) BUSINESS DAYS,
AFTER THE RECEIPT BY THE FIRST LIEN AGENT OF THE PURCHASE NOTICE), THE FIRST
LIEN LENDERS SHALL SELL TO THE SECOND LIEN CREDITORS, AND THE APPLICABLE SECOND
LIEN CREDITORS SHALL PURCHASE FROM THE FIRST LIEN LENDERS, THE FIRST LIEN LOAN
OBLIGATIONS OWING TO THE FIRST LIEN LENDERS, AND DURING SUCH PERIOD, THE FIRST
LIEN CREDITORS SHALL NOT TAKE ANY ENFORCEMENT ACTION (OTHER THAN ACCELERATION OF
ANY OR ALL OF THE FIRST LIEN LOAN OBLIGATIONS AND EXERCISE OF CONTROL OVER
OBLIGORS’ DEPOSITORY ACCOUNTS).

 

6.3          PURCHASE PRICE.  SUCH PURCHASE AND SALE SHALL BE MADE BY EXECUTION
AND DELIVERY BY THE APPLICABLE SECURED CREDITORS OF AN ASSIGNMENT AGREEMENT IN
THE FORM ATTACHED TO THE FIRST LIEN LOANAGREEMENT.  UPON THE DATE OF SUCH
PURCHASE AND SALE, THE SECOND LIEN CREDITORS SHALL (I) PAY TO THE FIRST LIEN
AGENT FOR THE BENEFIT OF THE FIRST LIEN LENDERS AS THE PURCHASE PRICE THEREFOR
THE SUM OF (A) THE FULL AMOUNT OF ALL THE FIRST LIEN LOAN OBLIGATIONS THEN
OUTSTANDING AND UNPAID (INCLUDING PRINCIPAL, INTEREST, FEES AND EXPENSES,
INCLUDING REASONABLE ATTORNEYS’ FEES AND LEGAL EXPENSES) PLUS (B) ANY EARLY
TERMINATION FEE, PREPAYMENT FEE OR OTHER SIMILAR FEE PAYABLE PURSUANT TO THE
FIRST LIEN LOAN AGREEMENT (CALCULATED AS IF THE FIRST LIEN LOAN OBLIGATIONS WERE
REPAID IN FULL BY THE OBLIGORS AT SUCH TIME), (II) FURNISH CASH COLLATERAL TO
THE FIRST LIEN AGENT WITH RESPECT TO THE OUTSTANDING FIRST LIEN LETTER OF CREDIT
OBLIGATIONS IN SUCH AMOUNTS AS ARE REQUIRED UNDER THE FIRST LIEN LOAN AGREEMENT,
AND (III) AGREE TO REIMBURSE THE FIRST LIEN CREDITORS FOR ANY LOSS, COST, DAMAGE
OR EXPENSE (INCLUDING REASONABLE ATTORNEYS’ FEES AND LEGAL EXPENSES) IN
CONNECTION WITH ANY CHECKS OR OTHER PAYMENTS PROVISIONALLY CREDITED TO THE FIRST
LIEN LOAN OBLIGATIONS, AND/OR AS TO WHICH THE FIRST LIEN CREDITORS HAVE NOT YET
RECEIVED FINAL PAYMENT.  SUCH PURCHASE PRICE AND CASH COLLATERAL SHALL BE
REMITTED BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS TO SUCH BANK ACCOUNT OF
THE FIRST LIEN AGENT IN NEW YORK, NEW YORK, AS THE FIRST LIEN AGENT MAY
DESIGNATE IN WRITING TO THE SECOND LIEN AGENT FOR SUCH PURPOSE.  INTEREST SHALL
BE CALCULATED TO BUT EXCLUDING THE BUSINESS DAY ON WHICH SUCH PURCHASE AND SALE
SHALL OCCUR IF THE AMOUNTS SO PAID BY THE SECOND LIEN CREDITORS TO THE BANK
ACCOUNT DESIGNATED BY THE FIRST LIEN AGENT ARE RECEIVED IN SUCH BANK ACCOUNT
PRIOR TO 1:00 P.M., NEW YORK CITY TIME AND INTEREST SHALL BE CALCULATED TO AND

 

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INCLUDING SUCH BUSINESS DAY IF THE AMOUNTS SO PAID BY THE SECOND LIEN CREDITORS
TO THE BANK ACCOUNT DESIGNATED BY THE FIRST LIEN AGENT ARE RECEIVED IN SUCH BANK
ACCOUNT LATER THAN 1:00 P.M., NEW YORK CITY TIME.

 

6.4          NATURE OF SALE.  SUCH PURCHASE AND SALE SHALL BE EXPRESSLY MADE
WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND BY THE FIRST LIEN CREDITORS AS TO
THE FIRST LIEN LOAN OBLIGATIONS OR OTHERWISE AND WITHOUT RECOURSE TO THE FIRST
LIEN CREDITORS, EXCEPT FOR REPRESENTATIONS AND WARRANTIES AS TO THE FOLLOWING: 
(I) THE AMOUNT OF THE FIRST LIEN LOAN OBLIGATIONS BEING PURCHASED (INCLUDING AS
TO THE PRINCIPAL OF AND ACCRUED AND UNPAID INTEREST ON SUCH FIRST LIEN LOAN
OBLIGATIONS, FEES AND EXPENSES THEREOF), (II) THAT THE FIRST LIEN LENDERS OWN
THE FIRST LIEN LOAN OBLIGATIONS FREE AND CLEAR OF ANY LIENS, AND (III) EACH
FIRST LIEN LENDER HAS THE FULL RIGHT AND POWER TO ASSIGN ITS FIRST LIEN LOAN
OBLIGATIONS AND SUCH ASSIGNMENT HAS BEEN DULY AUTHORIZED BY ALL NECESSARY
CORPORATE ACTION BY SUCH FIRST LIEN LENDER.

 

Section 7.              Bankruptcy Matters.

 

7.1          RELIEF FROM THE AUTOMATIC STAY.  UNTIL THE FIRST LIEN LOAN
TERMINATION DATE, THE SECOND LIEN AGENT, ON BEHALF OF ITSELF AND THE SECOND LIEN
CREDITORS, AGREES THAT NONE OF THEM SHALL SEEK (OR SUPPORT ANY OTHER PERSON
(OTHER THAN THE FIRST LIEN AGENT) SEEKING) REFLIEF FROM THE AUTOMATIC SAY OR ANY
OTHER STAY IN ANY INSOLVENCY PROCEEDING IN RESPECT OF THE COLLATERAL, WITHOUT
THE PRIOR WRITTEN CONSENT OF THE FIRST LIEN AGENT.

 

7.2          POST PETITION FINANCING.

 

(A)           IF ANY OBLIGOR OR OBLIGORS SHALL BECOME SUBJECT TO A CASE UNDER
THE BANKRUPTCY CODE AND SUCH OBLIGOR OR OBLIGORS AS DEBTOR(S)-IN-POSSESSION (OR
A TRUSTEE APPOINTED ON BEHALF OF SUCH OBLIGOR OR OBLIGORS) SHALL MOVE FOR EITHER
(X) APPROVAL OF FINANCING (“DIP FINANCING”) TO BE PROVIDED BY ONE OR MORE OF THE
FIRST LIEN CREDITORS UNDER SECTION 364 OF THE BANKRUPTCY CODE OR (Y) THE USE OF
CASH COLLATERAL WITH THE CONSENT OF THE FIRST LIEN CREDITORS UNDER SECTION 363
OF THE BANKRUPTCY CODE, SUBJECT TO SECTION 7.2(B), THE SECOND LIEN CREDITORS
AGREE AS FOLLOWS:  (A) ADEQUATE NOTICE TO SECOND LIEN CREDITORS FOR SUCH
FINANCING OR USE OF CASH COLLATERAL SHALL BE DELIVERED TO THE SECOND LIEN
CREDITORS IF THE SECOND LIEN CREDITORS RECEIVES NOTICE TWO (2) BUSINESS DAYS
PRIOR TO THE ENTRY OF THE ORDER APPROVING SUCH FINANCING OR USE OF CASH
COLLATERAL, (B) SUCH FINANCING (INCLUDING ANY FIRST LIEN LOAN OBLIGATIONS WHICH
AROSE PRIOR TO THE INSOLVENCY PROCEEDING) MAY BE SECURED BY LIENS ON ALL OR A
PART OF THE ASSETS OF THE OBLIGORS WHICH SHALL BE SUPERIOR IN PRIORITY TO THE
LIENS ON THE ASSETS OF THE OBLIGORS HELD BY ANY OTHER PERSON, AND (C) THE SECOND
LIEN CREDITORS SHALL NOT CONTEST OR OPPOSE IN ANY MANNER SUCH FINANCING OR CASH
COLLATERAL USE AND SHALL BE DEEMED TO HAVE WAIVED ANY OBJECTIONS TO SUCH
FINANCING OR CASH COLLATERAL USE, INCLUDING BY ANY OBJECTION ALLEGING OBLIGORS’
FAILURE TO PROVIDE “ADEQUATE PROTECTION” FOR THE LIENS OF THE SECOND LIEN
CREDITORS OR OTHERWISE, AS LONG AS (I) THE SECOND LIEN CREDITORS RETAIN A LIEN
ON THE COLLATERAL (INCLUDING PROCEEDS THEREOF ARISING AFTER THE COMMENCEMENT OF
SUCH PROCEEDING) WITH THE SAME PRIORITY AS EXISTED PRIOR TO THE COMMENCEMENT OF
THE CASE UNDER THE BANKRUPTCY CODE (SUBJECT TO THE LIENS SECURING SUCH FINANCING
AS DESCRIBED ABOVE), (II) THE FIRST LIEN CREDITORS DO NOT OBJECT TO SECOND LIEN
CREDITORS RECEIVING A REPLACEMENT LIEN ON POST-PETITION ASSETS, WITH THE SAME
PRIORITY AS EXISTED PRIOR TO THE COMMENCEMENT OF THE CASE UNDER THE BANKRUPTCY
CODE (PROVIDED THAT THE INABILITY OF THE SECOND LIEN CREDITORS TO RECEIVE A LIEN
ON ACTIONS UNDER CHAPTER 5 OF THE BANKRUPTCY CODE OR PROCEEDS THEREOF SHALL NOT
AFFECT THE AGREEMENTS AND WAIVERS SET FORTH IN THIS CLAUSE (A)), (III) THE
AGGREGATE PRINCIPAL AMOUNT OF LOANS AND LETTER OF CREDIT ACCOMMODATIONS
OUTSTANDING UNDER SUCH POST-PETITION FINANCING, TOGETHER WITH THE PRINCIPAL
AMOUNT OF THE PRE-PETITION FIRST LIEN LOAN OBLIGATIONS, SHALL NOT EXCEED THE
MAXIMUM FIRST LIEN PRINCIPAL AMOUNT, AND (IV) SUCH FINANCING OR USE OF CASH
COLLATERAL IS SUBJECT TO THE TERMS OF THIS AGREEMENT.

 

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(B)           NOTWITHSTANDING THE FOREGOING PROVISIONS IN THIS SECTION 7.2, IN
ANY INSOLVENCY PROCEEDING, (I) IF THE FIRST LIEN CREDITORS (OR ANY SUBSET
THEREOF) ARE GRANTED ADEQUATE PROTECTION IN THE FORM OF ADDITIONAL COLLATERAL IN
CONNECTION WITH ANY DIP FINANCING, THE SECOND LIEN CREDITORS MAY SEEK ADEQUATE
PROTECTION IN THE FORM OF A LIEN ON SUCH ADDITIONAL COLLATERAL, WHICH LIEN, IF
GRANTED, WILL BE SUBORDINATE TO THE LIENS SECURING THE FIRST LIEN LOAN
OBLIGATIONS AND SUCH DIP FINANCING ON THE SAME BASIS AS THE OTHER LIENS SECURING
THE SECOND LIEN LOAN OBLIGATIONS ARE SO SUBORDINATED UNDER THIS AGREEMENT
(PROVIDED THAT ANY FAILURE OF THE SECOND LIEN CREDITORS TO OBTAIN SUCH ADEQUATE
PROTECTION SHALL NOT IMPAIR OR OTHERWISE AFFECT THE AGREEMENTS, UNDERTAKINGS AND
CONSENTS OF THE SECOND LIEN CREDITORS PURSUANT TO SECTION 7.2(A)), AND (II) IN
THE EVENT ONE OR MORE SECOND LIEN CREDITORS SEEK OR REQUEST SUCH ADEQUATE
PROTECTION IN RESPECT OF SECOND LIEN LOAN OBLIGATIONS AND SUCH ADEQUATE
PROTECTION IS GRANTED IN THE FORM OF A LIEN ON ADDITIONAL COLLATERAL , THEN EACH
SECOND LIEN CREDITOR AGREES THAT THE FIRST LIEN AGENT MAY SEEK AND OBTAIN, AND
EACH SECOND LIEN CREDITOR HEREBY CONSENTS TO THE GRANTING OF, A SENIOR LIEN ON
SUCH ADDITIONAL COLLATERAL AS SECURITY FOR THE FIRST LIEN LOAN OBLIGATIONS AND
FOR ANY SUCH DIP FINANCING PROVIDED BY THE FIRST LIEN CREDITORS AND TO ANY OTHER
LIENS GRANTED TO THE FIRST LIEN CREDITORS AS ADEQUATE PROTECTION ON THE SAME
BASIS AS THE OTHER LIENS SECURING THE SECOND LIEN LOAN OBLIGATIONS ARE
SUBORDINATED UNDER THIS AGREEMENT.

 

(C)           THE SECOND LIEN CREDITORS MAY SEEK POST-PETITION INTEREST AND/OR
ADEQUATE PROTECTION PAYMENTS IN ANY INSOLVENCY PROCEEDING, AND THE FIRST LIEN
LENDERS MAY OPPOSE SUCH MOTIONS.

 

7.3          SALE OF COLLATERAL; WAIVERS.  THE SECOND LIEN CREDITORS AGREE THAT
THEY WILL NOT OBJECT TO OR OPPOSE A SALE OR OTHER DISPOSITION OF ANY ASSETS
SECURING THE OBLIGATIONS UNDER THE FIRST LIEN LOAN DOCUMENTS (OR ANY PORTION
THEREOF) FREE AND CLEAR OF LIENS OR OTHER CLAIMS UNDER SECTION 363 OF THE
BANKRUPTCY CODE OR ANY OTHER PROVISION OF THE BANKRUPTCY CODE IF FIRST LIEN
CREDITORS HAVE CONSENTED TO SUCH SALE OR DISPOSITION OF SUCH ASSETS, EXCEPT THAT
THEY MAY ASSERT ANY SUCH OBJECTION THAT COULD BE ASSERTED BY AN UNSECURED
CREDITOR.  THE SECOND LIEN CREDITORS WAIVE ANY CLAIM THEY MAY NOW OR HEREAFTER
HAVE ARISING OUT OF THE FIRST LIEN CREDITORS’ ELECTION IN ANY PROCEEDING
INSTITUTED UNDER CHAPTER 11 OF THE BANKRUPTCY CODE OF THE APPLICATION OF
SECTION 1111(B)(2) OF THE BANKRUPTCY CODE.  THE SECOND LIEN CREDITORS AGREE NOT
TO INITIATE OR PROSECUTE OR JOIN WITH ANY OTHER PERSON TO INITIATE OR PROSECUTE
ANY CLAIM, ACTION OR OTHER PROCEEDING (I) CHALLENGING THE ENFORCEABILITY OF THE
FIRST LIEN CREDITORS’ CLAIM AS A FULLY SECURED CLAIM WITH RESPECT TO ALL OR PART
OF THE FIRST LIEN LOAN OBLIGATIONS, OR OPPOSING ANY ACTION BY THE FIRST LIEN
CREDITORS TO ENFORCE THEIR RIGHTS OR REMEDIES RELATING UNDER THE FIRST LIEN LOAN
DOCUMENTS, (II) CHALLENGING THE ENFORCEABILITY, VALIDITY, PRIORITY OR PERFECTED
STATUS OF ANY LIENS ON ASSETS SECURING THE FIRST LIEN LOAN OBLIGATIONS UNDER THE
FIRST LIEN LOAN DOCUMENTS, (III) ASSERTING ANY CLAIMS WHICH THE OBLIGORS MAY
HOLD WITH RESPECT TO THE FIRST LIEN CREDITORS, (IV) SEEKING TO LIFT THE
AUTOMATIC STAY TO THE EXTENT THAT SUCH ACTION IS OPPOSED BY THE FIRST LIEN
AGENT, OR (V) OPPOSING A MOTION BY THE FIRST LIEN AGENT TO LIFT THE AUTOMATIC
STAY.

 

7.4          INVALIDATED PAYMENTS.  SUBJECT TO SECTION 2(E), TO THE EXTENT THAT
THE FIRST LIEN CREDITORS RECEIVE PAYMENTS ON, OR PROCEEDS OF COLLATERAL FOR, THE
OBLIGATIONS UNDER THE FIRST LIEN LOAN DOCUMENTS WHICH ARE SUBSEQUENTLY
INVALIDATED, DECLARED TO BE FRAUDULENT OR PREFERENTIAL, SET ASIDE AND/OR
REQUIRED TO BE REPAID TO A TRUSTEE, RECEIVER OR ANY OTHER PARTY UNDER ANY
BANKRUPTCY LAW, STATE OR FEDERAL LAW, COMMON LAW, OR EQUITABLE CAUSE, THEN TO
THE EXTENT OF SUCH PAYMENT OR PROCEEDS RECEIVED, SUCH OBLIGATIONS, OR PART
THEREOF, INTENDED TO BE SATISFIED SHALL BE REVIVED AND CONTINUE IN FULL FORCE
AND EFFECT AS IF SUCH PAYMENTS OR PROCEEDS HAD NOT BEEN RECEIVED BY THE FIRST
LIEN CREDITORS.

 

7.5          PAYMENTS.  IN THE EVENT OF ANY INSOLVENCY PROCEEDING INVOLVING ONE
OR MORE OBLIGORS, SUBJECT TO THE SECOND LIEN CREDITORS’ RIGHTS TO RECEIVE
POST-PETITION INTEREST AND ADEQUATE PROTECTION PAYMENTS (SUBJECT TO THE
LIMITATIONS SET FORTH IN SECTION 7.2(C)), ALL PROCEEDS OF COLLATERAL SHALL BE
APPLIED TO THE FIRST LIEN LOAN OBLIGATIONS UNTIL ALL FIRST LIEN LOAN OBLIGATIONS
ARE PAID IN FULL BEFORE ANY

 

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DISTRIBUTION, WHETHER IN CASH, SECURITIES OR OTHER PROPERTY, SHALL BE MADE TO
ONE OR MORE SECOND LIEN CREDITORS ON ACCOUNT OF ANY SECOND LIEN LOAN
OBLIGATIONS.

 

7.6          NOTICE OF CLAIMS.  THE PARTIES ACKNOWLEDGE AND AGREE THAT (I) THE
CLAIMS AND INTERESTS OF THE FIRST LIEN CREDITORS UNDER THE FIRST LIEN LOAN
DOCUMENTS ARE SUBSTANTIALLY DIFFERENT FROM THE CLAIMS AND INTERESTS OF THE
SECOND LIEN CREDITORS UNDER THE SECOND LIEN LOAN DOCUMENTS AND (II) SUCH CLAIMS
AND INTERESTS SHOULD BE TREATED AS SEPARATE CLASSES FOR PURPOSES OF SECTION 1122
OF THE BANKRUPTCY CODE AND, IN ANY INSOLVENCY PROCEEDING, THE SECOND LIEN
CREDITORS WILL NOT MAKE ANY ASSERTION TO THE CONTRARY OR OBJECT TO THE ASSERTION
THAT THE CLAIMS AND INTERESTS OF THE FIRST LIEN CREDITORS UNDER THE FIRST LIEN
LOAN DOCUMENTS ARE SUBSTANTIALLY DIFFERENT FROM THE CLAIMS OF THE SECOND LIEN
CREDITORS UNDER THE SECOND LIEN LOAN DOCUMENTS.

 

7.7          RIGHTS AS UNSECURED CREDITORS.  THE SECOND LIEN CREDITORS MAY
EXERCISE RIGHTS AND REMEDIES AS UNSECURED CREDITORS AGAINST THE BORROWERS AND
OTHER OBLIGORS IN ACCORDANCE WITH THE SECOND LIEN LOAN DOCUMENTS AND APPLICABLE
LAW, IN EACH CASE, IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, PROVIDED THAT
ANY JUDGMENT LIEN ON COLLATERAL OBTAINED BY ANY SECOND LIEN CREDITOR IN RESPECT
OF THE SECOND LIEN LOAN OBLIGATIONS SHALL BE SUBJECT IN ALL RESPECTS TO THIS
AGREEMENT.

 

Section 8.              Miscellaneous.

 

8.1          TERMINATION.  THIS AGREEMENT SHALL TERMINATE AND BE OF NO FURTHER
FORCE AND EFFECT UPON EITHER (A) THE FIRST LIEN LOAN TERMINATION DATE, OR
(B) PAYMENT IN FULL OF ALL OF THE OBLIGATIONS (AS DEFINED IN THE SECOND LIEN
LOAN DOCUMENTS) AND THE TERMINATION OR EXPIRATION OF ANY COMMITMENT OF THE
SECOND LIEN CREDITORS UNDER THE SECOND LIEN LOAN AGREEMENT.

 

8.2          SUCCESSORS AND ASSIGNS.

 

(A)           THIS AGREEMENT SHALL BE BINDING UPON EACH SECURED CREDITOR AND ITS
RESPECTIVE SUCCESSORS AND ASSIGNS AND SHALL INURE TO THE BENEFIT OF EACH SECURED
CREDITOR AND ITS RESPECTIVE SUCCESSORS, PARTICIPANTS AND ASSIGNS.

 

(B)           EACH SECURED CREDITOR RESERVES THE RIGHT TO GRANT PARTICIPATIONS
IN, OR OTHERWISE SELL, ASSIGN, TRANSFER OR NEGOTIATE ALL OR ANY PART OF, OR ANY
INTEREST IN, THEIR RESPECTIVE OBLIGATIONS; PROVIDED THAT NO SECURED CREDITOR
SHALL BE OBLIGATED TO GIVE ANY NOTICES TO OR OTHERWISE IN ANY MANNER DEAL
DIRECTLY WITH ANY PARTICIPANT IN THE OBLIGATIONS AND NO PARTICIPANT SHALL BE
ENTITLED TO ANY RIGHTS OR BENEFITS UNDER THIS AGREEMENT, EXCEPT THROUGH THE
SECURED CREDITOR WITH WHICH IT IS A PARTICIPANT.

 

(C)           IN CONNECTION WITH ANY PARTICIPATION OR OTHER TRANSFER OR
ASSIGNMENT, A SECURED CREDITOR (I) MAY, SUBJECT TO ITS RESPECTIVE DOCUMENTS,
DISCLOSE TO SUCH ASSIGNEE, PARTICIPANT OR OTHER TRANSFEREE OR ASSIGNEE ALL
DOCUMENTS AND INFORMATION WHICH SUCH SECURED CREDITOR NOW OR HEREAFTER MAY HAVE
RELATING TO ANY OBLIGOR OR THE COLLATERAL AND (II) SHALL DISCLOSE TO SUCH
PARTICIPANT OR OTHER TRANSFEREE OR ASSIGNEE THE EXISTENCE AND TERMS AND
CONDITIONS OF THIS AGREEMENT.

 

8.3          NOTICES.  ALL NOTICES AND OTHER COMMUNICATIONS PROVIDED FOR
HEREUNDER SHALL BE IN WRITING AND SHALL BE MAILED, SENT BY OVERNIGHT COURIER,
TELECOPIED, OR DELIVERED, AS FOLLOWS:

 

(A)           IF TO ANY FIRST LIEN CREDITOR, TO IT AT THE FOLLOWING ADDRESS:

 

c/o General Electric Capital Corporation, as First Lien Agent
299 Park Avenue
New York, New York 10171

 

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Attention:  Penhall Account Manager
Telephone:  (646) 428-7000
Telecopier:  (646) 428-7398

 

with a copy to

 

General Electric Capital Corporation
201 Merritt 7
Norwalk, Connecticut 06840 
Attention:  General Counsel – Global Sponsor Finance
Telephone:  (203) 956-4377
Telecopier:  (203) 956-4216

 

with a copy to

 

King & Spalding LLP
1185 Avenue of the Americas
New York, New York 10036
Attention: Robert S. Finley
Telephone:  (212) 556-2142
Telecopier:  (212) 556-2222

 

(B)           IF TO SECOND LIEN AGENT, TO IT AT THE FOLLOWING ADDRESS:

 

DEUTSCHE BANK TRUST

COMPANY AMERICAS
Global Credit Products
Leveraged Loan Portfolio

60 Wall Street NYC60-104

New York, New York 10005-2858

Attention: Jean Travis

Telephone: (212) 250-6158

Telecopier: (212) 797-5690

 

with a copy to:

 

Cahill Gordon & Reindel LLP
80 Pine Street

New York, New York 10005
Attention: William M. Hartnett
Telephone:  (212) 701-3000

Telecopier:  (212) 269-5420

 

or, as to each party, at such other address as shall be designated by such party
in a written notice to the other parties complying as to delivery with the terms
of this Section 8.3.  All such notices and other communications shall be
effective (i) if sent by registered mail, return receipt requested, when
received or three Business Days after mailing, whichever first occurs, (ii) if
telecopied, when transmitted and a confirmation is received, provided the same
is on a Business Day and, if not, on the next Business Day, or (iii) if
delivered by messenger or overnight courier, upon delivery, provided the same is
on a Business Day and, if not, on the next Business Day.

 

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8.4          COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED BY THE PARTIES HERETO
IN SEVERAL COUNTERPARTS, AND EACH SUCH COUNTERPART SHALL BE DEEMED TO BE AN
ORIGINAL AND ALL OF WHICH SHALL CONSTITUTE TOGETHER BUT ONE AND THE SAME
AGREEMENT.

 

8.5          GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE.  THIS AGREEMENT
AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE, AND ANY APPLICABLE LAWS OF THE
UNITED STATES OF AMERICA.  EACH OF THE PARTIES HERETO HEREBY CONSENTS AND AGREES
THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK SHALL HAVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES AMONG THE PARTIES
HERETO PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATING
TO THIS AGREEMENT, PROVIDED, THAT THE PARTIES HERETO ACKNOWLEDGE THAT ANY
APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW
YORK, NEW YORK.  EACH OF THE PARTIES HERETO EXPRESSLY SUBMITS AND CONSENTS IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT,
AND EACH OF THE PARTIES HERETO HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE
BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS.  EACH OF THE PARTIES HERETO HEREBY WAIVES PERSONAL SERVICE OF THE
SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO IT AT THE ADDRESS SET FORTH HEREIN,
AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH
PARTY’S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S.
MAILS, PROPER POSTAGE PREPAID.

 

8.6          MUTUAL WAIVER OF JURY TRIAL.  THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN THE PARTIES ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR THE TRANSACTIONS
RELATED THERETO.

 

8.7          AMENDMENTS.  NO AMENDMENT OR WAIVER OF ANY PROVISION OF THIS
AGREEMENT, AND NO CONSENT TO ANY DEPARTURE BY ANY PERSON FROM THE TERMS HEREOF,
SHALL IN ANY EVENT BE EFFECTIVE UNLESS IT IS IN WRITING AND SIGNED BY THE SECOND
LIEN AGENT AND THE FIRST LIEN AGENT.  IN NO EVENT SHALL THE CONSENT OF ANY
OBLIGOR BE REQUIRED IN CONNECTION WITH ANY AMENDMENT OR OTHER MODIFICATION OF
THIS AGREEMENT.

 

8.8          NO WAIVER.  NO FAILURE OR DELAY ON THE PART OF ANY SECURED CREDITOR
IN EXERCISING ANY POWER OR RIGHT UNDER THIS AGREEMENT SHALL OPERATE AS A WAIVER
THEREOF, NOR SHALL ANY SINGLE OR PARTIAL EXERCISE OF ANY SUCH POWER OR RIGHT
PRECLUDE ANY OTHER OR FURTHER EXERCISE THEREOF OR THE EXERCISE OF ANY OTHER
POWER OR RIGHT.

 

8.9          SEVERABILITY.  ANY PROVISION OF THIS AGREEMENT WHICH IS PROHIBITED
OR UNENFORCEABLE IN ANY JURISDICTION SHALL, AS TO SUCH JURISDICTION, BE
INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR UNENFORCEABILITY WITHOUT
INVALIDATING THE REMAINING PROVISIONS OF THIS AGREEMENT OR AFFECTING THE
VALIDITY OR ENFORCEABILITY OF SUCH PROVISIONS IN ANY OTHER JURISDICTION.

 

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8.10        FURTHER ASSURANCES.  EACH OF THE SECOND LIEN CREDITORS AND THE FIRST
LIEN AGENT AGREES TO COOPERATE FULLY WITH EACH OTHER PARTY HERETO TO EFFECTUATE
THE INTENT AND PROVISIONS OF THIS AGREEMENT AND, FROM TIME TO TIME, TO EXECUTE
AND DELIVER ANY AND ALL OTHER AGREEMENTS, DOCUMENTS OR INSTRUMENTS, AND TO TAKE
SUCH OTHER ACTIONS, AS MAY BE REASONABLY NECESSARY OR DESIRABLE TO EFFECTUATE
THE INTENT AND PROVISIONS OF THIS AGREEMENT.

 

8.11        HEADINGS.  THE SECTION HEADINGS CONTAINED IN THIS AGREEMENT ARE AND
SHALL BE WITHOUT MEANING OR CONTENT WHATSOEVER AND ARE NOT PART OF THIS
AGREEMENT.

 

8.12        LIEN PRIORITY PROVISIONS.  THIS AGREEMENT AND THE RIGHTS AND
BENEFITS HEREUNDER SHALL INURE SOLELY TO THE BENEFIT OF THE FIRST LIEN CREDITORS
AND THE SECOND LIEN CREDITORS AND THEIR RESPECTIVE SUCCESSORS AND PERMITTED
ASSIGNS AND NO OTHER PERSON (INCLUDING THE OBLIGORS, OR ANY TRUSTEE, RECEIVER,
DEBTOR IN POSSESSION OR BANKRUPTCY ESTATE IN A BANKRUPTCY OR LIKE PROCEEDING)
SHALL HAVE OR BE ENTITLED TO ASSERT RIGHTS OR BENEFITS HEREUNDER.  NOTHING
CONTAINED IN THIS AGREEMENT IS INTENDED TO OR SHALL IMPAIR THE OBLIGATION OF ANY
OBLIGOR TO PAY THE OBLIGATIONS AS AND WHEN THE SAME SHALL BECOME DUE AND PAYABLE
IN ACCORDANCE WITH THEIR RESPECTIVE TERMS, OR TO AFFECT THE RELATIVE RIGHTS OF
THE CREDITORS OF ANY OBLIGOR, OTHER THAN FIRST LIEN CREDITORS AND THE SECOND
LIEN CREDITORS AS BETWEEN THEMSELVES.

 

8.13        CREDIT ANALYSIS.  THE SECURED CREDITORS SHALL EACH BE RESPONSIBLE
FOR KEEPING THEMSELVES INFORMED OF (I) THE FINANCIAL CONDITION OF THE OBLIGORS
AND ALL OTHER ALL ENDORSERS, OBLIGORS AND/OR GUARANTORS OF THE OBLIGATIONS AND
(II) ALL OTHER CIRCUMSTANCES BEARING UPON THE RISK OF NONPAYMENT OF THE
OBLIGATIONS.  NO SECURED CREDITOR SHALL HAVE ANY DUTY TO ADVISE ANY OTHER
SECURED CREDITOR OF INFORMATION KNOWN TO IT REGARDING SUCH CONDITION OR ANY SUCH
OTHER CIRCUMSTANCES.  NO SECURED CREDITOR ASSUMES ANY LIABILITY TO ANY OTHER
SECURED CREDITOR OR TO ANY OTHER PERSON WITH RESPECT TO:  (A) THE FINANCIAL OR
OTHER CONDITION OF OBLIGORS UNDER ANY INSTRUMENTS OF GUARANTEE WITH RESPECT TO
THE OBLIGATIONS, (B) THE ENFORCEABILITY, VALIDITY, VALUE OR COLLECTIBILITY OF
THE OBLIGATIONS, ANY COLLATERAL THEREFOR, OR ANY GUARANTEE OR SECURITY WHICH MAY
HAVE BEEN GRANTED IN CONNECTION WITH ANY OF THE OBLIGATIONS OR (C) ANY OBLIGOR’S
TITLE OR RIGHT TO TRANSFER ANY COLLATERAL OR SECURITY.

 

8.14        WAIVER OF CLAIMS.  TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH
PARTY HERETO WAIVES ANY CLAIM IT MIGHT HAVE AGAINST THE ANY SECURED CREDITOR
WITH RESPECT TO, OR ARISING OUT OF, ANY ACTION OR FAILURE TO ACT OR ANY ERROR OF
JUDGMENT, NEGLIGENCE, OR MISTAKE OR OVERSIGHT WHATSOEVER ON THE PART OF THE ANY
PARTY HERETO OR THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS WITH
RESPECT TO ANY EXERCISE OF RIGHTS OR REMEDIES UNDER THE DOCUMENTS OR ANY
TRANSACTION RELATING TO THE COLLATERAL.  NONE OF THE SECURED CREDITORS, NOR ANY
OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS SHALL BE LIABLE FOR
FAILURE TO DEMAND, COLLECT OR REALIZE UPON ANY OF THE COLLATERAL OR FOR ANY
DELAY IN DOING SO OR, EXCEPT AS SPECIFICALLY PROVIDED HEREIN, SHALL BE UNDER ANY
OBLIGATION TO SELL OR OTHERWISE DISPOSE OF ANY COLLATERAL UPON THE REQUEST OF
ANY OBLIGOR OR ANY SECURED CREDITOR OR ANY OTHER PERSON OR TO TAKE ANY OTHER
ACTION WHATSOEVER WITH REGARD TO THE COLLATERAL OR ANY PART THEREOF.

 

8.15        CONFLICTS.  IN THE EVENT OF ANY CONFLICT BETWEEN THE PROVISIONS OF
THIS AGREEMENT AND THE PROVISIONS OF THE DOCUMENTS, THE PROVISIONS OF THIS
AGREEMENT SHALL GOVERN.

 

8.16        BANKRUPTCY. THIS AGREEMENT SHALL BE APPLICABLE BOTH BEFORE AND AFTER
THE FILING OF ANY PETITION BY OR AGAINST ANY OBLIGOR UNDER THE BANKRUPTCY CODE
OR ANY OTHER INSOLVENCY PROCEEDING AND ALL CONVERTED OR SUCCEEDING CASES IN
RESPECT THEREOF, AND ALL REFERENCES HEREIN TO ANY OBLIGOR SHALL BE DEEMED TO
APPLY TO THE TRUSTEE FOR SUCH OBLIGOR AND SUCH OBLIGOR AS A
DEBTOR-IN-POSSESSION.  THE RELATIVE RIGHTS OF THE FIRST LIEN CREDITORS AND THE
SECOND LIEN CREDITORS IN OR TO ANY DISTRIBUTIONS FROM OR IN RESPECT OF ANY
COLLATERAL OR PROCEEDS OF COLLATERAL SHALL CONTINUE AFTER THE FILING OF SUCH
PETITION ON THE SAME BASIS AS PRIOR TO THE DATE OF SUCH FILING, SUBJECT TO ANY
COURT ORDER APPROVING THE FINANCING OF, OR USE OF CASH COLLATERAL BY, ANY
OBLIGOR AS DEBTOR-IN-POSSESSION.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized as of the day and year
first above written.

 

 

First Lien Agent:

 

 

 

GENERAL ELECTRIC CAPITAL CORPORATION, as
First Lien Agent

 

 

 

By:

/s/ Gina Provenzale

 

 

 

Name: Gina Provenzale

 

 

 

Title: Its Duly Authorized Signatory

 

 

 

 

Second Lien Agent:

 

 

 

DEUTSCHE BANK TRUST COMPANY AMERICAS

 

as Second Lien Agent

 

 

 

 

 

By:

/s/ Omayra Laucella

 

 

 

Name: Omayra Laucella

 

 

 

Title: Vice President

 

 

 

 

By:

/s/ Evelyn Lazala

 

 

 

Name: Evelyn Lazala

 

 

 

Title: Vice President

 

 

Each of the undersigned hereby acknowledges and agrees to the foregoing terms
and provisions.

 

 

PENHALL INTERNATIONAL CORP.

 

 

 

 

 

By:

/s/ Jeffrey E. Platt

 

Name:

Jeffrey E. Platt

 

Title:

Vice President

 

 

 

PENHALL COMPANY

 

 

 

 

 

By:

/s/ Jeffrey E. Platt

 

Name:

Jeffrey E. Platt

 

Title:

Vice President

 

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PENHALL LEASING, L.L.C.

 

 

 

 

 

By:

/s/ Jeffrey E. Platt

 

Name:

Jeffrey E. Platt

 

Title:

Vice President

 

 

 

BOB MACK CO., INC.

 

 

 

 

 

By:

/s/ Jeffrey E. Platt

 

Name:

Jeffrey E. Platt

 

Title:

Vice President

 

 

 

 

 

CAPITOL DRILLING SUPPLIES, INC.

 

 

 

 

 

By:

/s/ Jeffrey E. Platt

 

Name:

Jeffrey E. Platt

 

Title:

Vice President

 

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