DEFINED IN
THE SENIOR LOAN AGREEMENT ON THE DATE HEREOF), WHICH HAS NOT BEEN WAIVED BY THE
SENIOR CREDITOR (PROVIDED THAT FORBEARANCE SHALL NOT BE DEEMED A WAIVER), THEN
EXISTS OR WOULD EXIST AFTER GIVING EFFECT TO SUCH PAYMENT.
THE JUNIOR CREDITOR
HEREBY ACKNOWLEDGES THAT AN EVENT OF DEFAULT UNDER THE SENIOR LOAN AGREEMENT HAS
OCCURRED AND IS CONTINUING, AND WILL LIKELY CONTINUE INDEFINITELY UNTIL AND
AFTER PERMITTED PAYMENTS BECOME DUE AND PAYABLE UNDER THE JUNIOR NOTE.
FURTHERMORE, NOTHING HEREIN CONTAINED SHALL BE DEEMED TO PROHIBIT OR IMPAIR THE
ABILITY OF THE COMPANY TO PAY, AND THE JUNIOR CREDITOR TO COLLECT AND RECEIVE,
PAYMENT OF THE JUNIOR DEBT BY MEANS OF OFFSET, AT THE TIME OF THE CLOSING OF THE
TRANSACTIONS UNDER THE ASSET PURCHASE AGREEMENT, AGAINST THE PURCHASE PRICE
PAYABLE BY THE JUNIOR CREDITOR UNDER THE ASSET PURCHASE AGREEMENT .
(C)
TO THE EXTENT THAT THE PERMITTED PAYMENT IS NOT MADE WHEN DUE, THE
SENIOR CREDITOR SHALL HAVE THE RIGHT (BUT NOT THE OBLIGATION) TO CURE ANY
FAILURE BY THE COMPANY TO MAKE SUCH PERMITTED PAYMENT BY MAKING SUCH PAYMENT ON
BEHALF OF THE COMPANY TO THE JUNIOR CREDITOR. ANY SUCH PAYMENT MADE BY THE
SENIOR CREDITOR SHALL BE CHARGED TO THE COMPANY AND TREATED AS THE PURCHASE OF
AN ADDITIONAL NOTE (REGARDLESS OF WHETHER THE SENIOR LOAN AGREEMENT CONTEMPLATES
OR OTHERWISE PERMITS THE PURCHASE OF AN ADDITIONAL NOTE IN SUCH PRINCIPAL
AMOUNT) ON SUBSTANTIALLY THE SAME TERMS AND CONDITIONS AS THE SENIOR NOTES.
3.
PRIORITIES IN COLLATERAL AND REMEDIES.
(A)
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THE JUNIOR
LOAN DOCUMENTS OR IN ANY OTHER AGREEMENT BETWEEN THE COMPANY AND THE JUNIOR
CREDITOR, AND NOTWITHSTANDING THE TIME, ORDER OR METHOD OF ATTACHMENT OR
PERFECTION AS BETWEEN THE SENIOR LIENS AND THE JUNIOR LIENS, OR THE TIME OR
ORDER OF FILING OR RECORDING OF FINANCING STATEMENTS OR OTHER EVIDENCES OF LIENS
OR SECURITY INTERESTS, THE JUNIOR CREDITOR ACKNOWLEDGES AND AGREES THAT ALL
SENIOR LIENS SHALL HAVE ABSOLUTE AND UNCONDITIONAL PRIORITY OVER ANY AND ALL
JUNIOR LIENS, TO THE FULL EXTENT OF ALL SENIOR DEBT.
(B)
ANYTHING CONTAINED IN SECTION 2 ABOVE TO THE CONTRARY
NOTWITHSTANDING,
UNLESS AND UNTIL THE EARLIER OF (I) THE DATE ON WHICH ALL
SENIOR DEBT (EXCLUSIVE OF CONTINGENT INDEMNIFICATION OBLIGATIONS TO THE EXTENT
THAT NO CLAIM GIVING RISE THERETO HAS BEEN ASSERTED) HAS BEEN INDEFEASIBLY PAID
AND SATISFIED IN FULL IN CASH, OR (II) THE EXPIRATION OR TERMINATION OF THE
STANDSTILL PERIOD (PROVIDED THAT THE SENIOR CREDITOR IS NOT THEN MAKING GOOD
FAITH EFFORTS TO EXERCISE ITS ENFORCEMENT REMEDIES WITH RESPECT TO THE SENIOR
LIENS), THE JUNIOR CREDITOR SHALL NOT, WITHOUT THE PRIOR WRITTEN CONSENT OF THE
SENIOR CREDITOR, SEEK TO FORECLOSE OR EXERCISE ANY OTHER ENFORCEMENT REMEDIES
WITH RESPECT TO ANY JUNIOR LIENS, OR ASSERT ANY CLAIMS OR INTERESTS THEREIN, OR
INSTITUTE ANY LEGAL PROCEEDINGS WITH RESPECT TO THE SUBJECT COLLATERAL, OR TAKE
ANY OTHER ACTION, DIRECTLY OR INDIRECTLY, THAT WOULD INTERFERE IN ANY MANNER
WITH THE RIGHTS OF THE HOLDER OF THE SENIOR