Document:

Exhibit 10.4

 

Execution Version

 

PARITY LIEN DEBT 
 PLEDGE AND SECURITY AGREEMENT

 

dated as of March 28, 2017

 

between

 

EACH OF THE GRANTORS PARTY HERETO

 

and

 

LORD SECURITIES CORPORATION, AS PARITY LIEN COLLATERAL TRUSTEE

 

NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE LIEN AND SECURITY INTEREST GRANTED TO THE COLLATERAL TRUSTEE FOR THE BENEFIT OF THE PARITY LIEN SECURED PARTIES PURSUANT TO THIS AGREEMENT AND THE EXERCISE OF ANY RIGHT OR REMEDY BY THE COLLATERAL TRUSTEE FOR THE BENEFIT OF THE PARITY LIEN SECURED PARTIES HEREUNDER ARE SUBJECT TO THE PROVISIONS OF THE COLLATERAL TRUST AGREEMENT, DATED AS OF MARCH 28, 2017 (AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE “COLLATERAL TRUST AGREEMENT”), AMONG THE HUNTINGTON NATIONAL BANK, AS ADMINISTRATIVE AGENT, WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE, LORD SECURITIES CORPORATION, AS COLLATERAL TRUSTEE AND CERTAIN OTHER PERSONS PARTY OR THAT MAY BECOME PARTY THERETO FROM TIME TO TIME.  IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THE COLLATERAL TRUST AGREEMENT AND THIS AGREEMENT, THE TERMS OF THE COLLATERAL TRUST AGREEMENT SHALL GOVERN AND CONTROL.

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
PAGE
    
	
 
    	
 
    	
 
    
	
SECTION 1.
    	
DEFINITIONS;   GRANT OF SECURITY
    	
2
    
	
1.1
    	
General Definitions
    	
2
    
	
1.2
    	
Definitions;   Interpretation
    	
8
    
	
 
    	
 
    	
 
    
	
SECTION 2.
    	
GRANT   OF SECURITY
    	
9
    
	
2.1
    	
Grant of Security
    	
9
    
	
2.2
    	
Certain Limited   Exclusions
    	
9
    
	
2.3
    	
Collateral Trust   Agreement
    	
12
    
	
 
    	
 
    	
 
    
	
SECTION 3.
    	
SECURITY   FOR PARITY LIEN OBLIGATIONS; GRANTORS REMAIN LIABLE
    	
12
    
	
3.1
    	
Security for Parity   Lien Obligations
    	
12
    
	
3.2
    	
Continuing Liability   Under Collateral
    	
12
    
	
 
    	
 
    	
 
    
	
SECTION 4.
    	
CERTAIN   PERFECTION REQUIREMENTS
    	
12
    
	
4.1
    	
Delivery Requirements
    	
12
    
	
4.2
    	
Control Requirements
    	
13
    
	
4.3
    	
Intellectual Property   Recording Requirements
    	
14
    
	
4.4
    	
[Reserved.]
    	
15
    
	
4.5
    	
Timing and Notice
    	
15
    
	
 
    	
 
    	
 
    
	
SECTION 5.
    	
REPRESENTATIONS   AND WARRANTIES
    	
15
    
	
5.1
    	
Grantor Information and   Status
    	
15
    
	
5.2
    	
Collateral   Identification; Special Collateral
    	
16
    
	
5.3
    	
Ownership of Collateral   and Absence of Other Liens
    	
16
    
	
5.4
    	
Status of Security   Interest
    	
17
    
	
5.5
    	
Goods and Receivables
    	
18
    
	
5.6
    	
Pledged Equity   Interests; Investment Related Property
    	
18
    
	
5.7
    	
Intellectual Property
    	
19
    
	
 
    	
 
    	
 
    
	
SECTION 6.
    	
COVENANTS   AND AGREEMENTS
    	
20
    
	
6.1
    	
Agreement with respect   to Pledged LLC Interests
    	
20
    
	
6.2
    	
Collateral   Identification; Special Collateral
    	
20
    
	
6.3
    	
Ownership of Collateral   and Absence of Other Liens
    	
21
    
	
6.4
    	
Status of Security   Interest
    	
21
    
	
6.5
    	
Goods and Receivables
    	
21
    
	
6.6
    	
Pledged Equity Interests, Investment   Related Property
    	
22
    
	
6.7
    	
Intellectual Property
    	
24
    
	
6.8
    	
Information Regarding   Collateral
    	
25
    
	
 
    	
 
    	
 
    
	
SECTION 7.
    	
FURTHER   ASSURANCES; ADDITIONAL GRANTORS
    	
25
    
	
7.1
    	
Further Assurances
    	
25
    
	
7.2
    	
Additional Grantors
    	
26
    
	
 
    	
 
    	
 
    
	
SECTION 8.
    	
PARITY   LIEN COLLATERAL TRUSTEE APPOINTED ATTORNEY-IN-FACT
    	
27
    
	
8.1
    	
Power of Attorney
    	
27
    

 

i

 

	
8.2
    	
No Duty on the   Part of Parity Lien Collateral Trustee or Secured Parties
    	
28
    
	
8.3
    	
Appointment Pursuant to   Indenture
    	
28
    
	
 
    	
 
    	
 
    
	
SECTION 9.
    	
REMEDIES
    	
28
    
	
9.1
    	
Generally
    	
28
    
	
9.2
    	
Application of Proceeds
    	
30
    
	
9.3
    	
Sales on Credit
    	
30
    
	
9.4
    	
Investment Related   Property
    	
30
    
	
9.5
    	
Grant of Intellectual   Property License
    	
31
    
	
9.6
    	
Intellectual Property
    	
31
    
	
9.7
    	
Cash Proceeds; Deposit   Accounts
    	
33
    
	
 
    	
 
    	
 
    
	
SECTION 10.
    	
PARITY LIEN COLLATERAL   TRUSTEE
    	
33
    
	
 
    	
 
    	
 
    
	
SECTION 11.
    	
CONTINUING SECURITY   INTEREST; TRANSFER OF NOTES
    	
34
    
	
 
    	
 
    	
 
    
	
SECTION 12.
    	
STANDARD OF CARE;   PARITY LIEN COLLATERAL TRUSTEE MAY PERFORM
    	
34
    
	
 
    	
 
    	
 
    
	
SECTION 13.
    	
MISCELLANEOUS
    	
35
    
				

 

SCHEDULE 5.1 — GENERAL INFORMATION

 

SCHEDULE 5.2 — COLLATERAL IDENTIFICATION

 

SCHEDULE 5.4 — FINANCING STATEMENTS

 

SCHEDULE 5.5 — CERTAIN RECEIVABLES; LOCATION OF EQUIPMENT AND INVENTORY

 

EXHIBIT A — PLEDGE SUPPLEMENT

 

EXHIBIT B — UNCERTIFICATED SECURITIES CONTROL AGREEMENT

 

EXHIBIT C — TRADEMARK SECURITY AGREEMENT

 

EXHIBIT D — PATENT SECURITY AGREEMENT

 

EXHIBIT E — COPYRIGHT SECURITY AGREEMENT

 

ii

 

This PARITY LIEN DEBT PLEDGE AND SECURITY AGREEMENT, dated as of March 28, 2017 (as it may be amended, restated, supplemented or otherwise modified from time to time, this “Agreement”), between Foresight Energy LLC, a Delaware limited liability company (the “Company”), Foresight Energy Finance Corporation, a Delaware corporation (“Co-Issuer” and together with the Company the “Issuers”), and each of the subsidiaries of the Company party hereto from time to time, whether as an original signatory hereto or as an Additional Grantor (as herein defined) (each, a “Grantor”), and Lord Securities Corporation, as collateral trustee for the Secured Parties (as herein defined) (in such capacity as collateral trustee, together with its successors and permitted assigns, the “Parity Lien Collateral Trustee”).

 

RECITALS:

 

WHEREAS, on the date hereof, the Issuers are issuing $425.0 million in aggregate principal amount of Second Lien Senior Secured Notes due 2023 (the “Notes”) under an indenture,  dated as of the date hereof (as it may be amended, restated, supplemented or otherwise modified from time to time, the “Indenture”), among the Issuers, the Grantors, Wilmington Trust, National Association, as trustee (together with its successors and permitted assigns in such capacity, the “Trustee”);

 

WHEREAS, in order to secure (i) the payment of all of the principal of and interest and premium, if any, on the Notes and the payment and performance of all other Parity Lien Obligations and (ii) all of the Grantors’ obligations and liabilities hereunder and in connection herewith, each Grantor has agreed to grant a continuing lien on the Collateral (as defined below);

 

WHEREAS, concurrently herewith, the Company, Foresight Energy LP, a Delaware limited partnership (“Holdings”), Co-Issuer and the other Grantors are entering into (a) that certain Credit and Guaranty Agreement, dated as of the date hereof, by and among the Company, as borrower, Holdings, Co-Issuer and the other Grantors, as guarantors, the various financial institutions and other Persons party thereto from time to time, and The Huntington National Bank, as Facilities Administrative Agent (in such capacity, together with its successors and permitted assigns in such capacity, the “Priority Lien Administrative Agent”), and Lord Securities Corporation, as Term Administrative Agent, and (b) that certain Priority Lien Debt Pledge and Security Agreement, dated as of the date hereof, by and among the Company, Co-Issuer and the other Grantors party thereto from time to time and Lord Securities Corporation, as collateral trustee for the benefit of the Priority Lien Secured Parties (in such capacity, together with its successors and assigns, the “Priority Lien Collateral Trustee”).

 

WHEREAS, reference is made to that certain Collateral Trust Agreement dated the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Collateral Trust Agreement”), by and among the Issuers, Holdings and the other Grantors from time to time party thereto, the Priority Lien Administrative Agent, the Trustee, Lord Securities Corporation, as collateral trustee for the benefit of all Parity Lien Secured Parties and all Priority Lien Secured Parties (as each such term is defined therein) (in such capacity, together with its successors and permitted assigns in such capacity, the “Collateral Trustee”), and the other parties from time to time party thereto;

 

WHEREAS, in addition to the obligations under the Indenture, the Grantors may incur additional “Parity Lien Obligations” (as defined in the Collateral Trust Agreement) and each Grantor has agreed to secure such Grantor’s Parity Lien Obligations as set forth herein.

 

 

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, each Grantor hereby agrees with the Parity Lien Collateral Trustee, for the benefit of the Secured Parties, as follows:

 

SECTION 1.                         DEFINITIONS; GRANT OF SECURITY.

 

1.1                               General Definitions.  In this Agreement, the following terms shall have the following meanings:

 

“Act of Required Secured Parties” shall have the meaning set forth in the Collateral Trust Agreement.

 

“Additional Grantors” shall have the meaning assigned in Section 7.2.

 

“Agreement” shall have the meaning set forth in the preamble.

 

“Applicable Collateral Trustee” shall mean, (i) prior to the Discharge of the Priority Lien Obligations, the Priority Lien Collateral Trustee, and (ii) after the Discharge of the Priority Lien Obligations, the Parity Lien Collateral Trustee; provided that the Applicable Collateral Trustee shall act as gratuitous bailee or agent for the benefit of the Parity Lien Collateral Trustee for perfection purposes pursuant to Section 7.4 of the Collateral Trust Agreement, if the Applicable Collateral Trustee is not the Parity Lien Collateral Trustee.

 

“Bankruptcy Event of Default” shall mean an Event of Default under Section 6.01(g) of the Indenture or any similar Event of Default under any other Parity Lien Document.

 

“Cash Proceeds” shall have the meaning assigned in Section 9.7.

 

“Co-Issuer” shall have the meaning set forth in the preamble.

 

“Collateral” shall have the meaning assigned in Section 2.1.

 

“Collateral Questionnaire” means a certificate delivered on the Issue Date that provides information with respect to the personal or mixed property of each Grantor.

 

“Collateral Records” shall mean books, records, ledger cards, files, correspondence, customer lists, supplier lists, blueprints, technical specifications, manuals, computer software and related documentation, computer printouts, tapes, disks and other electronic storage media and related data processing software and similar items that at any time evidence or contain information relating to any of the Collateral or are otherwise necessary or helpful in the collection thereof or realization thereupon.

 

“Collateral Support” shall mean all property (real or personal) assigned, hypothecated or otherwise securing any Collateral and shall include any security agreement or other agreement granting a lien or security interest in such real or personal property.

 

“Collateral Trust Agreement” shall have the meaning set forth in the recitals.

 

“Collateral Trustee” shall have the meaning set forth in the recitals.

 

“Company” shall have the meaning set forth in the preamble.

 

2

 

“Contract” shall have the meaning set forth in Section 2.2(c).

 

“Control” shall mean:  (1) with respect to any Deposit Accounts, control within the meaning of Section 9-104 of the UCC, (2) with respect to any Securities Accounts, Security Entitlements, Commodity Contract or Commodity Account, control within the meaning of Section 9-106 of the UCC, (3) with respect to any Uncertificated Securities, control within the meaning of Section 8-106(c) of the UCC, (4) with respect to any Certificated Security, control within the meaning of Section 8-106(a) or (b) of the UCC, (5) with respect to any Electronic Chattel Paper, control within the meaning of Section 9-105 of the UCC, (6) with respect to Letter of Credit Rights, control within the meaning of Section 9-107 of the UCC and (7) with respect to any “transferable record”(as that term is defined in Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or in Section 16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction), control within the meaning of Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or in Section 16 of the Uniform Electronic Transactions Act as in effect in the jurisdiction relevant to such transferable record.

 

“Controlled Foreign Corporation” shall mean “controlled foreign corporation” as defined in the Internal Revenue Code.

 

“Copyright Licenses” shall mean any and all agreements and licenses providing for the granting of any right in or to any Copyright (whether such Grantor is licensee or licensor thereunder).

 

“Copyrights” shall mean all United States copyrights, including but not limited to copyrights in software and databases, and all Mask Works (as defined under 17 U.S.C. § 901 of the U.S. Copyright Act), whether registered or unregistered, and, with respect to any and all of the foregoing: (i) all registrations and applications therefor including, without limitation, the registrations and applications referred to in Schedule 5.2(II) under the heading “Copyrights” (as such schedule may be amended or supplemented from time to time), (ii) all extensions and renewals thereof, (iii) all rights corresponding thereto, (iv) all rights to sue for past, present and future infringements thereof, and (v) all Proceeds of the foregoing, including, without limitation, royalties, income, payments, claims, damages and proceeds of suit.

 

“Discharge of Parity Lien Obligations” shall have the meaning set forth in the Collateral Trust Agreement.

 

“Discharge of Priority Lien Obligations” shall have the meaning set forth in the Collateral Trust Agreement.

 

“Domestic Laws” shall mean the laws, rules or regulations of the United States or any State thereof or the District of Columbia.

 

“Event of Default” shall have the meaning set forth in any Parity Lien Document (including the Indenture).

 

“Excluded Account” shall mean (a) any deposit account used solely for: (i) funding payroll or segregating payroll taxes or funding other employee wage or benefit payments in the ordinary course of business, (ii) segregating 401(k) contributions or contributions to an employee stock purchase plan and other health and benefit plan, in each case for payment in accordance with any applicable laws or (iii) any zero-balance disbursement accounts, (b) any

 

3

 

deposit account or securities account the funds in which consist solely of funds held by the Company or any Subsidiary on behalf of or in trust for the benefit of any third party that is not an Affiliate of the Company or any Subsidiary, (c) any deposit account the funds in which consist solely of cash earnest money deposits or funds deposited under escrow or similar arrangements in connection with any letter of intent or purchase agreement for an acquisition or any other transaction permitted under the indenture and (d) any account holding cash and cash equivalents and such cash and cash equivalents that may be pledged to secure Priority Lien Obligations consisting of reimbursement obligations in respect of letters of credit and swing line loans (and/or any obligations of lenders participating in the facilities under which such letters of credit are issued and swing line loans made) pursuant to the Priority Lien Documents without granting a Lien thereon to secure any other Priority Lien Obligations, Parity Lien Obligations or any other Secured Obligations.

 

“Excluded Asset” shall mean any asset of any Grantor excluded from the security interest hereunder by virtue of Section 2.2 hereof but only to the extent, and for so long as, so excluded thereunder.

 

“Foreign Laws” shall mean any laws, rules or regulations other than Domestic Laws.

 

“FSHCO” means any Domestic Subsidiary that has no material assets other than Equity Interests of (x) a Foreign Subsidiary or (y) any other FSHCO.

 

“Grantor” shall have the meaning set forth in the preamble.

 

“Indenture” shall have the meaning set forth in the recitals.

 

“Insurance” shall mean all insurance policies covering any or all of the Collateral (regardless of whether the Parity Lien Collateral Trustee is the loss payee thereof).

 

“Intellectual Property” shall mean, the collective reference to all rights, title and interest in intellectual property arising under the laws of the United States, including without limitation, Copyrights, Patents, Trademarks and Trade Secrets.

 

“Intellectual Property Security Agreement” shall mean each intellectual property security agreement executed and delivered by the applicable Grantors, substantially in the form set forth in Exhibit C, Exhibit D and Exhibit E, as applicable.

 

“Intercompany Note” shall mean that certain Global Intercompany Demand Promissory Note described on Part II to the Collateral Questionnaire.

 

“Investment Accounts” shall mean the Securities Accounts, Commodity Accounts and Deposit Accounts.

 

“Investment Related Property” shall mean:  (i) all “investment property” (as such term is defined in Article 9 of the UCC) and (ii) all of the following (regardless of whether classified as investment property under the UCC): all Pledged Equity Interests, Pledged Debt, the Investment Accounts and certificates of deposit; in each case of the foregoing, excluding any Excluded Asset.

 

“Issuer” shall have the meaning set forth in the preamble.

 

4

 

“Material Intellectual Property” shall mean any Intellectual Property included in the Collateral that is material to the business of any Grantor.

 

“Parity Lien Collateral Trustee” shall have the meaning set forth in the preamble.

 

“Parity Lien Documents” shall have the meaning set forth in the Collateral Trust Agreement.

 

“Parity Lien Obligations” shall mean, without duplication, (i) all Parity Lien Obligations (as defined in the Collateral Trust Agreement) and (ii) all Obligations in respect of Notes, Note Guarantees and other Obligations under the Indenture.

 

“Parity Lien Representative” shall have the meaning set forth in the Collateral Trust Agreement.

 

“Parity Lien Secured Parties” shall have the meaning set forth in the Collateral Trust Agreement.

 

“Patent Licenses” shall mean all agreements and licenses providing for the granting of any right in or to any Patent (whether such Grantor is licensee or licensor thereunder).

 

“Patents” shall mean all United States patents and certificates of invention, or similar industrial property rights, and applications for any of the foregoing, including, but not limited to: (i) each patent and patent application referred to in Schedule 5.2(II) hereto under the heading “Patents” (as such schedule may be amended or supplemented from time to time), (ii) all reissues, divisions, continuations, continuations-in-part, extensions, renewals, and reexaminations thereof, (iii) all rights corresponding thereto, (iv) all inventions and improvements described therein, (v) all rights to sue for past, present and future infringements thereof, (vi) all claims, damages, and proceeds of suit arising therefrom, and (vii) all Proceeds of the foregoing, including, without limitation, royalties, income, payments, claims, damages, and proceeds of suit.

 

“Permitted Lien” shall have the meaning assigned in the Indenture.

 

“Pledge Supplement” shall mean any supplement to this Agreement in substantially the form of Exhibit A.

 

“Pledged Debt” shall mean all indebtedness for borrowed money owed to such Grantor, whether or not evidenced by any Instrument, including, without limitation, all indebtedness described on Schedule 5.2(I) under the heading “Pledged Debt” (as such schedule may be amended or supplemented from time to time), issued by the obligors named therein, the instruments, if any, evidencing any of the foregoing, and all interest, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing.

 

“Pledged Equity Interests” shall mean all Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests and any other participation or interests in any equity or profits of any business entity including, without limitation, any trust and all management rights relating to any entity whose equity interests are included as Pledged Equity Interests, excluding, in each case, such interests that constitute Excluded Assets.

 

5

 

“Pledged LLC Interests” shall mean all interests in any limited liability company and each series thereof including, without limitation, all limited liability company interests listed on Schedule 5.2(I) under the heading “Pledged LLC Interests” (as such schedule may be amended or supplemented from time to time) and the certificates, if any, representing such limited liability company interests and any interest of such Grantor on the books and records of such limited liability company or on the books and records of any securities intermediary pertaining to such interest and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such limited liability company interests and all rights as a member of the related limited liability company, excluding, in each case, such interests that constitute Excluded Assets.

 

“Pledged Partnership Interests” shall mean all interests in any general partnership, limited partnership, limited liability partnership or other partnership including, without limitation, all partnership interests listed on Schedule 5.2(I) under the heading “Pledged Partnership Interests” (as such schedule may be amended or supplemented from time to time) and the certificates, if any, representing such partnership interests and any interest of such Grantor on the books and records of such partnership or on the books and records of any securities intermediary pertaining to such interest and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such partnership interests and all rights as a partner of the related partnership, excluding, in each case, such interests that constitute Excluded Assets.

 

“Pledged Stock” shall mean all shares of capital stock owned by such Grantor, including, without limitation, all shares of capital stock described on Schedule 5.2(I) under the heading “Pledged Stock” (as such schedule may be amended or supplemented from time to time), and the certificates, if any, representing such shares and any interest of such Grantor in the entries on the books of the issuer of such shares or on the books of any securities intermediary pertaining to such shares, and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such shares, excluding, in each case, such interests that constitute Excluded Assets.

 

“Priority Lien Administrative Agent” shall have the meaning set forth in the recitals.

 

“Priority Lien Collateral Trustee” shall have the meaning set forth in the recitals.

 

“Receivables” shall mean all rights to payment, whether or not earned by performance, for goods or other property sold, leased, licensed, assigned or otherwise disposed of, or services rendered or to be rendered, including, without limitation all such rights constituting or evidenced by any Account, Chattel Paper, Instrument, General Intangible or Investment Related Property, together with all of Grantor’s rights, if any, in any goods or other property giving rise to such right to payment and all Collateral Support and Supporting Obligations related thereto and all Receivables Records.

 

“Receivables Records” shall mean (i) all original copies of all documents, instruments or other writings or electronic records or other Records evidencing the Receivables, (ii) all books, correspondence, credit or other files, Records, ledger sheets or cards, invoices, and

 

6

 

other papers relating to Receivables, including, without limitation, all tapes, cards, computer tapes, computer discs, computer runs, record keeping systems and other papers and documents relating to the Receivables, whether in the possession or under the control of Grantor or any computer bureau or agent from time to time acting for Grantor or otherwise, (iii) all evidences of the filing of financing statements and the registration of other instruments in connection therewith, and amendments, supplements or other modifications thereto, notices to other creditors, secured parties or agents thereof, and certificates, acknowledgments, or other writings, including, without limitation, lien search reports, from filing or other registration officers, (iv) all credit information, reports and memoranda relating thereto and (v) all other written or non-written forms of information related in any way to the foregoing or any Receivable, in each case of clauses (i) - (v), to the extent not prohibited to be pledged pursuant to any written agreement with any applicable Account Debtor.

 

“Secured Parties” shall mean each holder of Notes and each other holder of a Parity Lien Obligation, the Trustee and each Parity Lien Representative, the Collateral Trustee and each other Parity Lien Secured Party.

 

“Trademark Licenses” shall mean any and all agreements and licenses providing for the granting of any right in or to Trademarks (whether such Grantor is licensee or licensor thereunder).

 

“Trademarks” shall mean all United States trademarks, trade names, corporate names, company names, business names, fictitious business names, Internet domain names, service marks, certification marks, collective marks, logos, other source or business identifiers, designs and general intangibles of a like nature, all registrations and applications for any of the foregoing including, but not limited to: (i) the registrations and applications referred to in Schedule 5.2(II) under the heading “Trademarks” (as such schedule may be amended or supplemented from time to time), (ii) all extensions or renewals of any of the foregoing, (iii) all of the goodwill of the business connected with the use of and symbolized by the foregoing, (iv) the right to sue for past, present and future infringement or dilution of any of the foregoing or for any injury to goodwill, and (v) all Proceeds of the foregoing, including, without limitation, royalties, income, payments, claims, damages, and proceeds of suit.

 

“Trade Secret Licenses” shall mean any and all agreements providing for the granting of any right in or to Trade Secrets (whether such Grantor is licensee or licensor thereunder).

 

“Trade Secrets” shall mean all trade secrets and all other confidential or proprietary information and know-how whether or not such Trade Secret has been reduced to a writing or other tangible form, including all documents and things embodying, incorporating, or referring in any way to such Trade Secret, including but not limited to: (i) the right to sue for past, present and future misappropriation or other violation of any Trade Secret, and (ii) all Proceeds of the foregoing, including, without limitation, royalties, income, payments, claims, damages, and proceeds of suit.

 

“UCC” shall mean the Uniform Commercial Code as in effect from time to time in the State of New York; provided, however, that in the event that, by reason of mandatory provisions of law, any or all of the perfection or priority of, or remedies with respect to, any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as

 

7

 

enacted and in effect in such other jurisdiction solely for purposes of the provisions hereof relating to such perfection, priority or remedies.

 

“United States” shall mean the United States of America.

 

1.2                               Definitions; Interpretation.

 

(a)                                 In this Agreement, the following capitalized terms shall have the meaning given to them in the UCC (and, if defined in more than one Article of the UCC, shall have the meaning given in Article 9 thereof): Account, Account Debtor, As-Extracted Collateral, Bank, Certificate of Title, Certificated Security, Chattel Paper, Commercial Tort Claims, Commodity Account, Commodity Contract, Commodity Intermediary, Consignee, Consignment, Consignor, Deposit Account, Document, Entitlement Order, Electronic Chattel Paper, Equipment, Farm Products, General Intangibles, Goods, Health-Care-Insurance Receivable, Instrument, Inventory, Letter of Credit Right, Manufactured Home, Money, Payment Intangible, Proceeds, Record, Securities Account, Securities Intermediary, Security Certificate, Security Entitlement, Supporting Obligations, Tangible Chattel Paper and Uncertificated Security.

 

(b)                                 All other capitalized terms used herein (including the preamble and recitals hereto) and not otherwise defined herein shall have the meanings ascribed thereto in the Indenture or the Collateral Trust Agreement as applicable.  The incorporation by reference of terms defined in the Indenture shall survive any termination of the Indenture until this Agreement is terminated as provided in Section 11 hereof.  Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference.  References herein to any Section, Appendix, Schedule or Exhibit shall be to a Section, an Appendix, a Schedule or an Exhibit, as the case may be, hereof unless otherwise specifically provided.  Unless the context requires otherwise, any definition of or reference to any agreement, instrument or other document (including any Organizational Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Note Document or other Parity Lien Document).  The use herein of the word “include” or “including”, when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter.  The terms lease and license shall include sub-lease and sub-license, as applicable.  If any conflict or inconsistency exists between this Agreement and the Indenture, the Indenture shall govern.  All references herein to provisions of the UCC shall include all successor provisions under any subsequent version or amendment to any Article of the UCC.

 

8

 

SECTION 2.                         GRANT OF SECURITY.

 

2.1                               Grant of Security.  Each Grantor hereby grants to the Parity Lien Collateral Trustee, for its benefit and for the benefit of the Secured Parties, a security interest in and continuing lien on all of such Grantor’s right, title and interest in, to and under all personal property of such Grantor (subject to the limitations set forth in Section 2.2) including, but not limited to the following, in each case whether now or hereafter existing or in which any Grantor now has or hereafter acquires an interest and wherever the same may be located (all of which being hereinafter collectively referred to as the “Collateral”):

 

(a)                                 Accounts;

 

(b)                                 As-Extracted Collateral;

 

(c)                                  Chattel Paper;

 

(d)                                 Documents;

 

(e)                                  General Intangibles;

 

(f)                                   Goods (including, without limitation, Inventory, which, for the avoidance of doubt, shall include coal Inventory, and Equipment);

 

(g)                                  Instruments;

 

(h)                                 Insurance;

 

(i)                                     Intellectual Property, Copyright Licenses, Patent Licenses, Trademark Licenses and Trade Secret Licenses;

 

(j)                                    Investment Related Property (including, without limitation, Deposit Accounts);

 

(k)                                 Letter of Credit Rights;

 

(l)                                     Money;

 

(m)                             Receivables and Receivable Records;

 

(n)                                 Commercial Tort Claims now or hereafter described on Schedule 5.2

 

(o)                                 to the extent not otherwise included above, all other personal property of any kind and all Collateral Records, Collateral Support and Supporting Obligations relating to any of the foregoing; and

 

(p)                                 to the extent not otherwise included above, all Proceeds, products, accessions, rents and profits of or in respect of any of the foregoing.

 

2.2                               Certain Limited Exclusions.  Notwithstanding anything contained in this Agreement to the contrary, in no event shall the Collateral include or the security interest granted under Section 2.1 hereof attach to:

 

9

 

(a)                                 motor vehicles and other assets subject to certificates of title;

 

(b)                                 commercial tort claims where the amount of the net proceeds claimed is less than $10,000,000;

 

(c)                                  (i) those assets over which the pledging or granting of a security interest in such assets (x) would be prohibited by any applicable law (other than any organizational document), rule or regulation (except to the extent such prohibition is unenforceable after giving effect to applicable anti-assignment provisions of the UCC, other than proceeds thereof, the assignment of which is expressly deemed effective under the UCC notwithstanding such prohibitions), (y) would be prohibited by, or cause a default under or result in a breach, violation or invalidation of, any lease, license or other written agreement or written obligation (each, a “Contract”) to which such assets are subject, including the Longwall Financing Arrangements, or would give another Person (other than the Company or any Controlled Subsidiary) a right to terminate or accelerate the obligations under such Contract or to obtain a Lien to secure obligations owing to such Person (other than the Company or any Controlled Subsidiary) under such Contract (but only to the extent such assets are subject to such Contract and such Contract is not entered into for purposes of circumventing or avoiding the collateral requirements of the Parity Lien Debt Documents), unless the Company or any Guarantor may unilaterally waive it (in each case, except to the extent any such prohibition is unenforceable after giving effect to applicable anti-assignment provisions of the UCC) or (z) would require obtaining the consent, approval, license or authorization of any Person (other than the Company or any Guarantor) or applicable Governmental Authority, except to the extent that such consent, approval, license or authorization has already been obtained, and (ii) any Contract or any property or other asset subject to Liens securing permitted Acquired Debt (limited to the acquired assets), a purchase money security interest, Capital Lease Obligation or similar arrangement or sale and leaseback transaction to the extent that a grant of a security interest therein requires the consent of any Person (other than the Company or any Guarantor) as a condition to the creating of another security interest, would violate or invalidate such Contract or purchase money, capital lease or similar arrangement or create a right of termination in favor of any other party thereto (other than the Company or a Guarantor) after giving effect to the applicable anti-assignment provisions of the UCC), other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the UCC notwithstanding such prohibition;

 

(d)                                 those assets with respect to which in the good faith judgment of the Company, (i) the costs or other consequences of obtaining or perfecting such a security interest are excessive in relation to the benefits to be obtained by the Secured Parties therefrom or (ii) obtaining or perfecting a security interest would result in adverse tax consequences to the Company or its Subsidiaries;

 

(e)                                  any Letter of Credit Rights (other than to the extent a Lien thereon can be perfected by filing a customary financing statement);

 

10

 

(f)                                   any right, title or interest in receivables assets sold, pledged or financed pursuant to a Permitted Receivables Financing, and all of the Company’s and any Subsidiary’s rights, interests and claims under a Permitted Receivables Financing, and any other assets subject to a Permitted Receivables Financing;

 

(g)                                  any real property and leasehold rights and interests in real property other than Material Real Property;

 

(h)                                 any “intent-to-use” application for registration of a Trademark filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051, prior to the filing and acceptance of a “Statement of Use” pursuant to Section 1(d) of the Lanham Act or an “Amendment to Allege Use” pursuant to Section 1(c) of the Lanham Act with respect thereto;

 

(i)                                     (i) any Equity Interest that is Voting Stock of a first tier Foreign Subsidiary or FSHCO in excess of 65% of the Voting Stock of such Subsidiary, (ii) any Equity Interests of captive insurance subsidiaries and not for profit subsidiaries, (iii) any Equity Interests in, or assets of, any Securitization Subsidiary, (iv) any Equity Interests in an Unrestricted Subsidiary (other than Hillsboro or Patton), (v) margin stock, and (vi) any Equity Interests in any Subsidiary that is not Wholly Owned by the Company or any Restricted Subsidiary or in a Joint Venture, if the granting of a security interest therein (A) would be prohibited by, cause a default under or result in a breach of, or would give another Person (other than the Company or any Controlled Subsidiary) a right to terminate, under any Organizational Document, shareholders, joint venture or similar agreement applicable to such Subsidiary or Joint Venture or (B) would require obtaining the consent of any Person (other than the Company or any Controlled Subsidiary) (it being understood and agreed that nothing herein shall prohibit or otherwise limit the Lien on the Equity Interests in Hillsboro or Patton as security for the Obligations of the Guarantors holding such Equity Interests under the Note Guarantees, which shall be required and granted pursuant to the Parity Lien Security Documents);

 

(j)                                    except as required pursuant to clause (i)(i) above, any foreign collateral or credit support;

 

(k)                                 to the extent requiring the consent of one or more third parties or prohibited by the terms of any applicable organizational documents, joint venture agreement or shareholders’ agreement, Equity Interests in any Person other than Wholly Owned Restricted Subsidiaries;

 

(l)                                     any governmental licenses or state or local franchises, charters and authorizations, in each case, to the extent security interests in such licenses, franchises, charters or authorizations are prohibited or restricted thereby (in each case, except to the extent any such prohibition is unenforceable after giving effect to the applicable anti-assignment provisions of the UCC);

 

(m)                             deposits subject to Permitted Liens (other than the Liens in favor of the Collateral Trustee); and

 

11

 

(n)                                 Excluded Accounts;

 

provided that the Collateral shall include the replacements, substitutions and proceeds of any of the foregoing unless such replacements, substitutions or proceeds also constitute Excluded Assets.

 

2.3                               Collateral Trust Agreement.  Notwithstanding anything herein to the contrary, the lien and security interest granted to the Parity Lien Collateral Trustee pursuant to this Agreement and the exercise of any right or remedy by the Parity Lien Collateral Trustee hereunder are subject to the provisions of the Collateral Trust Agreement.  In the event of any conflict between the terms of the Collateral Trust Agreement and this Agreement, the terms of the Collateral Trust Agreement shall govern and control.

 

SECTION 3.                         SECURITY FOR PARITY LIEN OBLIGATIONS; GRANTORS REMAIN LIABLE.

 

3.1                               Security for Parity Lien Obligations.  This Agreement secures, and the Collateral is collateral security for, the prompt and complete payment or performance in full when due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including the payment of amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. §362(a) (and any successor provision thereof)), of all Parity Lien Obligations.

 

3.2                               Continuing Liability Under Collateral.  Notwithstanding anything herein to the contrary, (i) each Grantor shall remain liable for all obligations under the Collateral and nothing contained herein is intended or shall be a delegation of duties to the Parity Lien Collateral Trustee or any other Secured Party, (ii) each Grantor shall remain liable under each of the agreements included in the Collateral, including, without limitation, any agreements relating to Pledged Partnership Interests or Pledged LLC Interests, to perform all of the obligations undertaken by it thereunder all in accordance with and pursuant to the terms and provisions thereof and neither the Parity Lien Collateral Trustee nor any Secured Party shall have any obligation or liability under any of such agreements by reason of or arising out of this Agreement or any other document related thereto nor shall the Parity Lien Collateral Trustee nor any Secured Party have any obligation to make any inquiry as to the nature or sufficiency of any payment received by it or have any obligation to take any action to collect or enforce any rights under any agreement included in the Collateral, including, without limitation, any agreements relating to Pledged Partnership Interests or Pledged LLC Interests, and (iii) the exercise by the Parity Lien Collateral Trustee of any of its rights hereunder shall not release any Grantor from any of its duties or obligations under the contracts and agreements included in the Collateral.

 

SECTION 4.                         CERTAIN PERFECTION REQUIREMENTS

 

4.1                               Delivery Requirements.

 

(a)                                 With respect to any Certificated Securities included in the Collateral, each Grantor shall deliver to the Applicable Collateral Trustee the Security Certificates evidencing such Certificated Securities duly indorsed by an effective indorsement (within the meaning of Section 8-107 of the UCC), or accompanied by share transfer powers or other instruments of transfer duly endorsed by such an effective endorsement, in each case, to the Applicable Collateral Trustee or in blank.  In addition, each Grantor shall cause any certificates

 

12

 

evidencing any Pledged Equity Interests, including, without limitation, any Pledged Partnership Interests or Pledged LLC Interests, to be similarly delivered to the Applicable Collateral Trustee regardless of whether such Pledged Equity Interests constitute Certificated Securities.

 

(b)                                 With respect to any Instruments or Tangible Chattel Paper included in the Collateral, each Grantor shall deliver to the Parity Lien Collateral Trustee all such Instruments or Tangible Chattel Paper duly indorsed in blank; provided, however, that such delivery requirement shall not apply to any Instruments or Tangible Chattel Paper (other than the Intercompany Note) having a face amount of less than (i) $500,000 individually and (ii) $5,000,000 in the aggregate.

 

4.2                               Control Requirements.

 

(a)                                 Subject to Section 6.18 of the Credit Agreement (to the extent applicable), with respect to any Deposit Account, Securities Account, Security Entitlement, Commodity Account or Commodity Contract included in the Collateral, each Grantor shall ensure that the Parity Lien Collateral Trustee has Control thereof; provided, however, that such Control requirement shall not apply to Deposit Accounts as long as the aggregate cash deposited in all such Deposit Accounts does not exceed $1,000,000.  With respect to any Securities Accounts or Securities Entitlements, such Control shall be accomplished by the Grantor causing the Securities Intermediary maintaining such Securities Account or Security Entitlement to enter into an agreement in form and substance reasonably satisfactory to the Parity Lien Collateral Trustee pursuant to which the Securities Intermediary shall agree to comply with the Parity Lien Collateral Trustee’s Entitlement Orders without further consent by such Grantor.  With respect to any Deposit Account, each Grantor shall cause the depositary institution maintaining such account to enter into an agreement in form and substance reasonably satisfactory to the Parity Lien Collateral Trustee, pursuant to which such depository institution shall agree to comply with the Parity Lien Collateral Trustee’s instructions with respect to disposition of funds in the Deposit Account without further consent by such Grantor.  With respect to any Commodity Accounts or Commodity Contracts, each Grantor shall cause Control in favor of the Parity Lien Collateral Trustee in a manner reasonably acceptable to the Parity Lien Collateral Trustee.  With respect to any Uncertificated Security included in the Collateral (other than any Uncertificated Securities credited to a Securities Account), the applicable Grantor shall promptly notify the Applicable Collateral Trustee of the acquisition thereof and thereafter at the written request of the Applicable Collateral Trustee, each Grantor shall cause (or, with respect to an issuer that is not a Subsidiary or a controlled Affiliate of a Grantor, use commercially reasonable efforts to cause), the issuer of such Uncertificated Security to either (i) register the Applicable Collateral Trustee as the registered owner thereof on the books and records of the issuer or (ii) execute an agreement substantially in the form of Exhibit B hereto (or such other agreement in form and substance reasonably satisfactory to the Applicable Collateral Trustee), pursuant to which such issuer agrees to comply with the Applicable Collateral Trustee’s instructions with respect to such Uncertificated Security without further consent by such Grantor; provided that, with respect to an issuer that is not a Subsidiary or a controlled Affiliate of a Grantor, if after the use of commercially reasonable efforts such Grantor cannot

 

13

 

satisfy such requirement with respect to such Uncertificated Security then such Grantor shall not be required to take any further action with respect to such Uncertificated Security to ensure that the Applicable  Collateral Trustee has Control of such Uncertificated Security.  Notwithstanding anything herein to the contrary, prior to the Discharge of Priority Lien Obligations, if the applicable depositary institution, Securities Intermediary or commodities intermediary is not willing to provide Control to both the Priority Lien Collateral Trustee and the Parity Lien Collateral Trustee at the same time, the applicable Grantor shall be in compliance with this Section 4.2 if the Priority Lien Collateral Trustee has such Control (and the Priority Lien Collateral Trustee shall act as gratuitous bailee or agent for the benefit of the Parity Lien Collateral Trustee for perfection purposes pursuant to Section 7.4 of the Collateral Trust Agreement).

 

(b)                                 With respect to any Letter of Credit Rights having a value in excess of $1,000,000 individually or $3,000,000 in the aggregate included in the Collateral (other than any Letter of Credit Rights constituting a Supporting Obligation for a Receivable in which the Parity Lien Collateral Trustee has a valid and perfected security interest), Grantor shall use its commercially reasonable efforts to ensure that the Applicable Collateral Trustee has Control thereof by obtaining the written consent of each issuer of each related letter of credit to the assignment of the proceeds of such letter of credit to the Applicable Collateral Trustee.

 

(c)                                  With respect to any Electronic Chattel Paper or “transferable record” (as that term is defined in Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or in Section 16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction) included in the Collateral, Grantor shall ensure that the Applicable Collateral Trustee has Control thereof; provided, however, that such Control requirement shall not apply to any Electronic Chattel Paper or transferable record having a face amount of less than $2,000,000 in the aggregate.

 

4.3                               Intellectual Property Recording Requirements.

 

(a)                                 In the case of any Collateral (whether now owned or hereafter acquired) consisting of U.S. federal issued Patents and applications therefor, each Grantor shall execute and deliver to the Parity Lien Collateral Trustee a Patent Security Agreement (Parity Lien) in substantially the form of Exhibit D hereto (or a supplement thereto) covering all such Patents for recordation with the U.S. Patent and Trademark Office with respect to the security interest of the Parity Lien Collateral Trustee.

 

(b)                                 In the case of any Collateral (whether now owned or hereafter acquired) consisting of U.S. federal registered Trademarks and applications therefor, each Grantor shall execute and deliver to the Parity Lien Collateral Trustee a Trademark Security Agreement (Parity Lien) in substantially the form of Exhibit C hereto (or a supplement thereto) covering all such Trademarks for recordation with the U.S. Patent and Trademark Office with respect to the security interest of the Parity Lien Collateral Trustee.

 

14

 

(c)                                  In the case of any Collateral (whether now owned or hereafter acquired) consisting of U.S. federal registered Copyrights, each Grantor shall execute and deliver to the Parity Lien Collateral Trustee a Copyright Security Agreement (Parity Lien) in substantially the form of Exhibit E hereto (or a supplement thereto) covering all such Copyrights for recordation with the U.S. Copyright Office with respect to the security interest of the Parity Lien Collateral Trustee.

 

4.4                               [Reserved.]

 

4.5                               Timing and Notice.  With respect to any Collateral in existence on the Issue Date, except as otherwise expressly stated above, each Grantor shall comply with the requirements of Section 4 on the date hereof and, with respect to any Collateral hereafter owned or acquired, such Grantor shall comply with such requirements within thirty (30) days (or such longer period as the Applicable Collateral Trustee may agree to (which, if the Applicable Collateral Trustee is the Parity Lien Collateral Trustee, shall be as directed by the Controlling Representative) of such Grantor acquiring rights therein; provided, that with respect to any Deposit Account, Securities Account, Security Entitlement, Commodity Account or Commodity Contract that is acquired after the Issue Date in connection with a Permitted Acquisition, if the applicable Grantor cannot provide the Parity Lien Collateral Trustee with Control thereof to the extent required under Section 4.2(a) within sixty (60) days after the consummation of such Permitted Acquisition after using its commercially reasonable efforts to do so, then (a) with respect to any Commodity Account or Commodity Contract, such Grantor shall not be required to take any further action with respect thereto to ensure that the Parity Lien Collateral Trustee has Control thereof and (b) with respect to any Securities Account, Security Entitlement or Deposit Account, the Grantor shall have an additional ninety (90) days (or such longer period as the Applicable Collateral Trustee as directed by the applicable Controlling Representative may agree to) to achieve compliance with Section 4.2(a) with respect to such Deposit Account; provided that, if the Priority Lien Collateral Trustee has such Control, the Priority Lien Collateral Trustee shall act as gratuitous bailee or agent for the benefit of the Parity Lien Collateral Trustee for perfection purposes pursuant to Section 7.4 of the Collateral Trust Agreement. Each Grantor shall promptly inform the Priority Lien Collateral Trustee in writing of its acquisition of any Collateral for which any action is required by Section 4 hereof (including, for the avoidance of doubt, the filing of any U.S. federal applications for, or the issuance or registration of, any Patents, Copyrights or Trademarks).

 

SECTION 5.                         REPRESENTATIONS AND WARRANTIES.

 

Each Grantor hereby represents and warrants, that:

 

5.1                               Grantor Information and Status.

 

(a)                                 as of the Issue Date, Schedule 5.1(A) sets forth under the appropriate headings: (1) the full legal name of such Grantor, (2) the type of organization of such Grantor, (3) the jurisdiction of organization of such Grantor, (4) its organizational identification number, if any, and (5) the jurisdiction where the chief executive office or its sole place of business (or the principal residence if such Grantor is a natural person) is located;

 

(b)                                 [reserved];

 

15

 

(c)                                  as of the Issue Date, except as provided on Schedule 5.1(C), it has not changed its name, jurisdiction of organization, chief executive office or sole place of business (or principal residence if such Grantor is a natural person) or its corporate structure in any way (e.g., by merger, consolidation, change in corporate form or otherwise), in each case, within the past five (5) years;

 

(d)                                 as of the Issue Date, such Grantor has been duly organized and is validly existing as an entity of the type as set forth opposite such Grantor’s name on Schedule 5.1(A) solely under the laws of the jurisdiction as set forth opposite such Grantor’s name on Schedule 5.1(A) and remains duly existing as such.  Such Grantor has not filed any certificates of dissolution or liquidation, any certificates of domestication, transfer or continuance in any other jurisdiction; and

 

(e)                                  as of the Issue Date no Grantor is a “transmitting utility” (as defined in Section 9-102(a)(80) of the UCC).

 

5.2                       Collateral Identification; Special Collateral.

 

(a)                                 as of the Issue Date, Schedule 5.2 sets forth under the appropriate headings all of such Grantor’s: (1) Pledged Equity Interests, (2) Pledged Debt, (3) Securities Accounts, (4) Deposit Accounts, (5) Commodity Contracts and Commodity Accounts, (6) United States federal registrations and issuances of and applications for Patents, Trademarks (other than Internet domain names), and Copyrights owned by each Grantor, (7) Commercial Tort Claims other than any Commercial Tort Claims that constitute Excluded Assets pursuant to Section 2.2(b), (8) [reserved], and (9) [the name and address of any warehouseman, bailee or other third party, other than with any third party in connection with preparation for shipment or for rehabilitation or refurbishment in possession of any Inventory, Equipment and other tangible personal property other than any Inventory, Equipment or other tangible personal property having a value less than  $3,000,000 individually or $5,000,000 in the aggregate; and

 

(b)                                 as of the Issue Date, none of the material Collateral constitutes, or is the Proceeds of, (1) Farm Products, (2) Manufactured Homes, (3) Health-Care-Insurance Receivables, (4) timber to be cut, or (5) aircraft, aircraft engines, satellites, ships or (except as set forth on Schedule XVI to the Collateral Questionnaire) railroad rolling stock.

 

5.3                               Ownership of Collateral and Absence of Other Liens.

 

(a)                                 (x) it owns the Collateral purported to be owned by it or otherwise has the rights it purports to have in each item of Collateral and, as to all Collateral whether now existing or hereafter acquired, developed or created (including by way of lease or license), will continue to own or have such rights in each item of the Collateral except where failure to do so would not reasonably be expected to result in a Material Adverse Effect, and (y) the Collateral is free and clear of any and all Liens other than any Permitted Liens; and

 

(b)                                 other than any financing statements filed in favor of the Parity Lien Collateral Trustee, no Grantor has filed or consented to the filing of any effective financing statement, fixture filing or other instrument similar in effect under any applicable law covering all or any part of the Collateral which is on file in any filing or recording office, in each case to the extent such filing effectuates a

 

16

 

Lien other than a Permitted Lien, except for (x) any filings, notices or recordations with respect to which the underlying Indebtedness has been paid off or otherwise satisfied and (y) financing statements for which duly authorized proper termination statements have been delivered to the Parity Lien Collateral Trustee for filing.  Other than the Parity Lien Collateral Trustee, the Priority Lien Collateral Trustee and any automatic control in favor of a depository institution, Securities Intermediary or Commodity Intermediary maintaining a Deposit Account, Securities Account or Commodity Contract, no Person is in Control of any Collateral.

 

5.4                               Status of Security Interest.

 

(a)                                 upon the filing of financing statements naming each Grantor as “debtor” and the Parity Lien Collateral Trustee as “secured party” and describing the Collateral in the filing offices set forth opposite such Grantor’s name on Schedule 5.4 hereof provided as of the Issue Date, the security interest of the Parity Lien Collateral Trustee in all Collateral that can be perfected by the filing of a financing statement under the Uniform Commercial Code as in effect in any jurisdiction will constitute valid, perfected, first priority Liens (if and to the extent perfection can be achieved through the actions described in this Section 5.4(a)) subject in the case of priority only, to any Permitted Liens with respect to Collateral.  Each agreement purporting to give the Parity Lien Collateral Trustee (or the Priority Lien Collateral Trustee, if acting as the agent of the Parity Lien Collateral Trustee pursuant to Section 7.4 of the Collateral Trust Agreement) Control over any Collateral is effective to establish the Parity Lien Collateral Trustee’s (or the Priority Lien Collateral Trustee’s, as the case may be), Control of the Collateral subject thereto;

 

(b)                                 to the extent perfection or priority of the security interest therein is not subject to Article 9 of the UCC, upon recordation of the security interests granted hereunder in Collateral consisting of issued U.S. Patents and patent applications, U.S. federal registered Trademarks and Trademark applications and U.S. registered Copyrights in the United States Patent and Trademark Office and the United States Copyright Office, the security interests granted to the Parity Lien Collateral Trustee hereunder in such Patents Trademarks and Copyrights hereunder shall constitute valid, perfected, first priority Liens in the United States (subject, in the case of priority only, to Permitted Liens).  Notwithstanding the foregoing, nothing in this Agreement or any other Note Documents or other Parity Lien Documents shall require any Grantor to make any filings or take any other actions to record or perfect the Parity Lien Collateral Trustee’s Lien on and security interest in any Intellectual Property outside the United States or to reimburse the Parity Lien Collateral Trustee for any costs or expenses incurred in connection with making such filings or taking any other such action; and

 

(c)                                  no authorization, consent, approval or other action by, and no notice to or filing with, any Governmental Authority or regulatory body or any other Person is required for either (i) the pledge or grant by any Grantor of the Liens purported to be created in favor of the Parity Lien Collateral Trustee hereunder or (ii) the exercise by the Parity Lien Collateral Trustee of any rights or remedies in accordance with the UCC in respect of any Collateral (whether specifically granted or created hereunder or created or provided for by applicable

 

17

 

law), except (A) for the filings contemplated by clause (a) above and continuation statements in respect thereof and clause (b) above, (B) the actions described in Section 4.2 with respect to Collateral subject to Control requirements, which actions have been taken and are in full force and effect, and (C) as may be required, in connection with the disposition of any Investment Related Property, by laws generally affecting the offering and sale of Securities.

 

5.5                               Goods and Receivables.

 

(a)                                 [reserved];

 

(b)                                 except as set forth on Schedule 5.5(B), as of the Issue Date, none of the Account Debtors in respect of any Receivable in excess of $1,000,000 individually or $2,500,000 in the aggregate is the government of the United States, any agency or instrumentality thereof, any state or municipality or any foreign sovereign;

 

(c)                                  no material portion of Goods now or hereafter produced by any Grantor and included in the Collateral have been or will be produced in material violation of the requirements of the Fair Labor Standards Act, as amended, or the rules and regulations promulgated thereunder; and

 

(d)                                 other than any Inventory or Equipment in transit, undergoing repairs, replacements loaned to employees, or kept on the premises of customers or with any third party in connection with preparation for shipment or for rehabilitation or refurbishment, as of the Issue Date, all of the material Equipment and Inventory included in the Collateral is located only at the locations specified in Schedule 5.5(D).

 

5.6                               Pledged Equity Interests; Investment Related Property.

 

(a)                                 it is the record and beneficial owner of the Pledged Equity Interests free of all Liens, rights or claims of other Persons other than Permitted Liens and there are no outstanding warrants, options or other rights to purchase, or shareholder, voting trust or similar agreements outstanding with respect to, or property that is convertible into, or that requires the issuance or sale of, any Pledged Equity Interests;

 

(b)                                 no consent of any Person including any other general or limited partner, any other member of a limited liability company, any other shareholder or any other trust beneficiary is necessary in connection with the creation, perfection or second priority of the security interest of the Parity Lien Collateral Trustee in any Pledged Equity Interests or, to the extent the Pledged Equity Interests are issued by a wholly-owned Subsidiary of a Grantor, the exercise by the Parity Lien Collateral Trustee of the voting or other rights provided for in this Agreement or the exercise of remedies in respect thereof except as contemplated by the Collateral Trust Agreement or as have been obtained or waived; and

 

(c)                                  none of the Pledged LLC Interests and Pledged Partnership Interests in Wholly Owned Subsidiaries are or represent interests that by their

 

18

 

terms provide that they are securities governed by the Uniform Commercial Code of an applicable jurisdiction.

 

5.7                               Intellectual Property.

 

(a)                                 it is the sole and exclusive owner of the entire right, title, and interest in and to all Intellectual Property listed on Schedule 5.2(II) (as such schedule may be amended or supplemented from time to time), and owns or has a license or other right to use all other Material Intellectual Property, free and clear of all Liens (except for Permitted Liens) and all claims (except such claims as would not reasonably be expected to have a Material Adverse Effect);

 

(b)                                 as of the Issue Date, except to the extent any such occurrence could not reasonably be expected to cause a Material Adverse Effect, all Material Intellectual Property owned by such Grantor is subsisting and has not been adjudged invalid or unenforceable, in whole or in part, and each Grantor has performed all acts and has paid, when due, all material renewal, maintenance, and other fees and taxes required to maintain each and every material registration and application of Copyrights, Patents and Trademarks owned by such Grantor in full force and effect, except to the extent being actively contested by such Grantor in good faith and by appropriate proceedings;

 

(c)                                  except to the extent any such occurrence could not reasonably be expected to cause a Material Adverse Effect, no holding, decision, or judgment has been rendered in any action or proceeding before any court or administrative authority challenging the validity of such Grantor’s right to register, or such Grantor’s rights to own or use, any Material Intellectual Property (other than office actions issued in the ordinary course of prosecution) and no such action or proceeding is pending or, to the best of such Grantor’s knowledge, threatened;

 

(d)                                 all registrations and applications for Copyrights, Patents and Trademarks owned by such Grantor and included in the Material Intellectual Property are standing in the name of such Grantor;

 

(e)                                  except to the extent that the failure to do so could not reasonably be expected to cause a Material Adverse Effect , such Grantor has been using appropriate statutory notice of registration in connection with its use of registered Trademarks owned by such Grantor, proper marking practices in connection with its use of Patents owned by such Grantor, and appropriate notice of copyright in connection with the publication of Copyrights owned by such Grantor, in each case, to the extent constituting Material Intellectual Property and necessary to maintain such items;

 

(f)                                   such Grantor has taken commercially reasonable steps to protect the confidentiality of its Trade Secrets in accordance with industry standards except as would not reasonably be expected to have a Material Adverse Effect;

 

(g)                                  except to the extent any such occurrence could not reasonably be expected to cause a Material Adverse Effect, (i) the conduct of such Grantor’s business does not infringe upon or otherwise violate any trademark,

 

19

 

patent, copyright, trade secret or other intellectual property right owned or controlled by a third party; and (ii) no written claim has been made against such Grantor that the use of any Material Intellectual Property owned or used by such Grantor (or any of its respective licensees) violates the asserted rights of any third party, nor, to such Grantor’s knowledge, has any such claim been threatened;

 

(h)                                 to the best of such Grantor’s knowledge, no Person is infringing or otherwise violating any rights in any Material Intellectual Property owned by such Grantor; and

 

(i)                                     no settlement or consents, covenants not to sue, non-assertion assurances, or releases have been entered into by such Grantor in a manner that could materially adversely affect such Grantor’s rights to own or use any Material Intellectual Property.

 

SECTION 6.                         COVENANTS AND AGREEMENTS.

 

Each Grantor hereby covenants and agrees that:

 

6.1                               Agreement by Applicable Issuers and Applicable Grantors.

 

.  Each of the issuers of the Pledged Equity Interests that are limited liability companies and Grantors and each of such issuers that are not Grantors but that join this Agreement from time to time in their capacity as such issuers (each an “Applicable Issuer”) and each of the applicable Grantors that are pledgors of such Pledged Equity Interests (each, an “Applicable Grantor”) hereby consent and agree that:

 

(i) any member of such Applicable Issuer (a “Member”) may pledge its membership interests (“Membership Interests”) to secure obligations arising pursuant to loans or other financial accommodations made to such Member and/or one or more of its affiliates from time to time, (ii) a pledgee of Membership Interests, or such pledgee’s permitted successors or assigns, may, in connection with the valid exercise of such pledgee’s or such permitted successor’s or assign’s rights, sell, transfer or otherwise dispose of all or part of the Membership Interests (including a sale, transfer or disposition in connection with any foreclosure) without any further consent of any Member and (iii) a pledgee of the Membership Interests, or such pledgee’s permitted successors or assigns, in connection with the valid exercise of such pledgee’s or such permitted successor’s or assign’s rights, or any purchaser of the Membership Interests acquired the Membership Interests in connection with the valid exercise of such rights (including in connection with any foreclosure), may acquire the Membership Interests and become a Member or be substituted for a Member of such Applicable Issuer without the consent of any Member.

 

6.2                               Collateral Identification; Special Collateral.

 

(a)                                 In the event that it hereafter acquires any Collateral of a type described in Section 5.2(b) hereof excluding railroad rolling stock, the value of which exceeds $5,000,000 in the aggregate since the Issue Date, it shall promptly notify the Parity Lien Collateral Trustee thereof in writing and take such actions and execute such documents and make such filings all at Grantor’s expense as the Applicable Collateral Trustee may reasonably request in order to ensure that the Parity Lien Collateral Trustee has a valid, perfected, first priority security interest in such Collateral, subject to any Permitted Liens.

 

20

 

(b)                                 In the event that it hereafter acquires or has any Commercial Tort Claim that does not constitute an Excluded Asset pursuant to Section 2.2(b),  it shall deliver to the Parity Lien Collateral Trustee a completed Pledge Supplement together with all Supplements to Schedules thereto, identifying such new Commercial Tort Claims.

 

6.3                               Ownership of Collateral and Absence of Other Liens.  Except for the security interest created by this Agreement, it shall not create or suffer to exist any Lien upon or with respect to any of the Collateral, except Permitted Liens, and such Grantor shall use its commercially reasonable efforts in its business judgment to defend the Collateral against all Persons at any time claiming any security interest therein.

 

6.4                               Status of Security Interest.

 

(a)                                 Subject to the limitations set forth in subsection (b) of this Section 6.4, each Grantor shall maintain the security interest of the Parity Lien Collateral Trustee hereunder in all Collateral as valid, perfected, second priority Liens (subject to Permitted Liens ).

 

(b)                                 Notwithstanding the foregoing, no Grantor shall be required to take any action to perfect any Collateral that can only be perfected by Control except as and to the extent specified in Section 4 hereof.

 

6.5                               Goods and Receivables.

 

(a)                                 Other than as permitted pursuant to any Permitted Lien, it shall not deliver any Document evidencing any Equipment and Inventory constituting Collateral to any Person other than the issuer of such Document to claim the Goods evidenced therefor or the Applicable Collateral Trustee; and

 

(b)                                 subject to the terms of the Collateral Trust Agreement, during the continuance of an Event of Default, the Parity Lien Collateral Trustee shall have the right after notice to the applicable Grantor to notify, or require any Grantor to notify, any Account Debtor of the Parity Lien Collateral Trustee’s security interest in the Receivables and any Supporting Obligation and, in addition, at any time following the occurrence and during the continuation of an Event of Default, the Parity Lien Collateral Trustee may:  (i) direct the Account Debtors under any Receivables to make payment of all amounts due or to become due to such Grantor thereunder directly to the Parity Lien Collateral Trustee; (ii) notify, or require any Grantor to notify, each Person maintaining a lockbox or similar arrangement to which Account Debtors under any Receivables have been directed to make payment to remit all amounts representing collections on checks and other payment items from time to time sent to or deposited in such lockbox or other arrangement directly to the Parity Lien Collateral Trustee; (iii) direct the Account Debtors under any Receivables subject to the Assignment of Claims Act of 1940, as amended 31 U.S.C. Section 3727 and 41 U.S.C. Section 15, to execute and deliver all documents necessary or appropriate to make payment of all amounts due or to become due to such Grantor thereunder directly to the Parity Lien Collateral Trustee; and (iv) enforce, at the expense of such Grantor, collection of any such Receivables and to adjust, settle or compromise the amount or payment thereof, in the same manner and to the same extent as such Grantor might have done;

 

21

 

provided, in each case, that notwithstanding anything to the contrary herein, to the extent any credit information, reports or memoranda constituting Receivables Records is prohibited to be disclosed in accordance with any confidentiality restriction in any agreement with any applicable Account Debtor, such credit information, reports or memoranda shall not be required to be provided to the Parity Lien Collateral Trustee.  If the Parity Lien Collateral Trustee notifies any Grantor that it has elected to collect the Receivables in accordance with the preceding sentence, any payments of Receivables received by such Grantor shall be forthwith (and in any event within two (2) Business Days) deposited by such Grantor in the exact form received, duly indorsed by such Grantor to the Parity Lien Collateral Trustee if required, in a Deposit Account maintained under the sole dominion and control of the Parity Lien Collateral Trustee, and until so turned over, all amounts and proceeds (including checks and other instruments) received by such Grantor in respect of the Receivables, any Supporting Obligation or Collateral Support shall be received in trust for the benefit of the Parity Lien Collateral Trustee hereunder and shall be segregated from other funds of such Grantor and such Grantor shall not adjust, settle or compromise the amount or payment of any Receivable, or release wholly or partly any Account Debtor or obligor thereof, or allow any credit or discount thereon.

 

6.6                               Pledged Equity Interests, Investment Related Property.

 

(a)                                 Except as provided in the next sentence, in the event such Grantor receives any dividends, interest or distributions on any Pledged Equity Interest or other Investment Related Property upon the merger, consolidation, liquidation or dissolution of any issuer of any Pledged Equity Interest or Investment Related Property, then (a) such dividends, interest or distributions and securities or other property shall be included in the definition of Collateral without further action and (b) such Grantor shall promptly take all steps, if any, to the extent required hereunder with respect to such Collateral, to ensure the validity, perfection, priority and, if applicable, Control, subject to the priorities set forth in the Collateral Trust Agreement of the Parity Lien Collateral Trustee over such Investment Related Property (including, without limitation, delivery thereof to the Parity Lien Collateral Trustee or the Priority Lien Collateral Trustee, as the case may be) and pending any such action, to the extent an Event of Default is occurring or continuing, such Grantor shall be deemed to hold such dividends, interest, distributions, securities or other property in trust for the benefit of the Parity Lien Collateral Trustee and shall segregate such dividends, distributions, Securities or other property from all other property of such Grantor.  Notwithstanding the foregoing, so long as the Applicable Collateral Trustee (or if the Parity Lien Collateral Trustee is at that time permitted to exercise remedies against the Collateral pursuant to Collateral Trust Agreement, the Parity Lien Collateral Trustee) shall not have delivered written notice of its intent to exercise its remedies hereunder at any time while an Event of Default (other than any Bankruptcy Event of Default) shall have occurred and be continuing and so long as no Bankruptcy Event of Default shall have occurred and be continuing, the Parity Lien Collateral Trustee authorizes each Grantor to retain all cash dividends and distributions paid and all payments of interest;

 

22

 

(b)                                 Voting

 

(i)                                     Prior to receipt of a notice from the Applicable Collateral Trustee (or if the Parity Lien Collateral Trustee is at that time permitted to exercise remedies against the Collateral pursuant to Collateral Trust Agreement, the Parity Lien Collateral Trustee) of its intent to exercise its remedies hereunder at any time while an Event of Default (other than any Bankruptcy Event of Default) shall have occurred and be continuing and so long as no Bankruptcy Event of Default shall have occurred and be continuing, except as otherwise provided under the covenants and agreements relating to Investment Related Property in this Agreement or elsewhere herein or in the Indenture, each Grantor shall be entitled to exercise or refrain from exercising any and all voting and other consensual rights pertaining to the Investment Related Property or any part thereof for any purpose not inconsistent with the terms of this Agreement or the Indenture; and

 

(ii)                                  Upon delivery to the Grantors by the Applicable Collateral Trustee (or if the Parity Lien Collateral Trustee is at that time permitted to exercise remedies against the Collateral pursuant to Collateral Trust Agreement, the Parity Lien Collateral Trustee) of written notice of its intent to exercise remedies after the occurrence and during the continuation of an Event of Default (other than any Bankruptcy Event of Default) or automatically upon the occurrence and during the continuation of any Bankruptcy Event of Default:

 

(1)                                 all rights of each Grantor to exercise or refrain from exercising the voting and other consensual rights which it would otherwise be entitled to exercise pursuant hereto shall cease and all such rights shall thereupon become vested in the Parity Lien Collateral Trustee who shall thereupon have the sole right to exercise such voting and other consensual rights; and

 

(2)                                 in order to permit the Parity Lien Collateral Trustee to exercise the voting and other consensual rights which it may be entitled to exercise pursuant hereto and to receive all dividends and other distributions which it may be entitled to receive hereunder: (1) each Grantor shall promptly execute and deliver (or cause to be executed and delivered) to the Parity Lien Collateral Trustee all proxies, dividend payment orders and other instruments as the Parity Lien Collateral Trustee may from time to time reasonably request and (2) each Grantor acknowledges that the Parity Lien Collateral Trustee may utilize the power of attorney set forth in Section 8.1;

 

(c)                                  If any issuer of any Pledged Partnership Interests or Pledged LLC Interests owned by a Grantor which are not securities (for purposes of the UCC) elects or otherwise takes any action to cause such Pledged Partnership Interests or Pledged LLC Interests to be treated as securities for purposes of the UCC, such Grantor shall promptly notify the Parity Lien Collateral Trustee in writing of any such election or action and, in such event, shall, to the extent required hereunder, take all steps necessary or advisable to establish the Parity Lien Collateral Trustee’s Control (or Control of the Priority Lien Collateral, as bailee of the Parity Lien Collateral Trustee for purposes of perfection in accordance with the Collateral Trust Agreement) thereof;

 

(d)                                 Each Grantor consents to the grant by each other Grantor of a Lien in all Investment Related Property to the Parity Lien Collateral Trustee and without limiting the generality of the foregoing consents to the transfer of any

 

23

 

Pledged Partnership Interest and any Pledged LLC Interest to the Parity Lien Collateral Trustee or its designee if an Event of Default has occurred and is continuing and to the substitution of the Parity Lien Collateral Trustee or its designee as a partner in any partnership or as a member in any limited liability company with all the rights and powers related thereto; and

 

(e)                                  Without the prior written consent of the Applicable Collateral Trustee, no Grantor will consent or otherwise agree to certificate such Pledged Partnership Interests or Pledged LLC Interests such that they constitute “certificated securities” within the meaning of Section 8-102(4) of the UCC.

 

6.7                               Intellectual Property.

 

(a)                                 other than in the ordinary course of business consistent with past practice, it shall not do any act or knowingly omit to do any act whereby any of the Material Intellectual Property owned by such Grantor may lapse, become abandoned, dedicated to the public (other than by expiration in the ordinary course of business), or unenforceable, or which would materially adversely affect the validity, grant, or enforceability of the security interest granted therein;

 

(b)                                 other than in the ordinary course of business consistent with past practice, it shall not, with respect to any Trademarks owned by such Grantor constituting Material Intellectual Property, cease the use of any of such Trademarks for a period of greater than one year or fail to maintain the level of the quality of products sold and services rendered under any of such Trademarks at a level at least substantially consistent (or higher) with the quality of such products and services as of the date hereof, and such Grantor shall take all commercially reasonable steps necessary to insure that licensees of such Trademarks use such consistent standards of quality;

 

(c)                                  except to the extent that the failure to do so could not reasonably be expected to cause a Material Adverse Effect, it shall take all commercially reasonable steps, including in any proceeding before the United States Patent and Trademark Office, the United States Copyright Office or any state registry to pursue any application and maintain any registration or issuance of each Trademark, Patent, and Copyright owned by any Grantor and constituting Material Intellectual Property, including, but not limited to, those items on Schedule 5.2(II) (as such schedule may be amended or supplemented from time to time);

 

(d)                                 it shall use commercially reasonable efforts so as not to permit the inclusion in any contract to which it hereafter becomes a party of any provision that could materially impair or prevent the creation of a security interest in, or the assignment of, such Grantor’s rights and interests in any property included within the definitions of any Material Intellectual Property acquired under such contracts;

 

(e)                                  in the event that any Material Intellectual Property owned by or exclusively licensed to any Grantor is infringed, misappropriated, diluted or otherwise violated by a third party, such Grantor shall promptly take all reasonable

 

24

 

actions, in such Grantor’s reasonable business judgment, to stop such infringement, misappropriation, dilution or other violation and protect its rights in such Material Intellectual Property (with respect to exclusively licensed Materially Intellectual Property, if and to the extent permitted by the terms of any applicable agreements); and

 

(f)                                   except to the extent that the failure to do so could not reasonably be expected to cause a Material Adverse Effect, it shall use proper statutory notice in connection with its use of any of the Patents, Trademarks and Copyrights that constitute Material Intellectual Property owned by such Grantor to the extent necessary to protect such Material Intellectual Property.

 

6.8                               Information Regarding Collateral.  Company will furnish to the Trustee and the Parity Lien Collateral Trustee reasonable prior written notice of any change (i) in any Grantor’s corporate name, (ii) in any Grantor’s form of formation or incorporation, (iii) in any Grantor’s jurisdiction of organization or (iv) in any Grantor’s Federal Taxpayer Identification Number or state organizational identification number.  Company also agrees promptly to notify the Parity Lien Collateral Trustee and each Parity Lien Representative if any material portion of the Collateral is damaged or destroyed.

 

SECTION 7.                         FURTHER ASSURANCES; ADDITIONAL GRANTORS.

 

7.1                               Further Assurances.

 

(a)                                 Each Grantor agrees that from time to time, at the expense of such Grantor, that it shall promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary, or that the Parity Lien Collateral Trustee may reasonably request, in order to create and/or maintain the validity, perfection or priority of (subject to Permitted Liens) and protect any security interest granted or purported to be granted hereby (subject to the limitations set forth in Section 2.2) or to enable the Parity Lien Collateral Trustee to exercise and enforce its rights and remedies hereunder with respect to any Collateral. Without limiting the generality of the foregoing, each Grantor shall:

 

(i)                                     file such financing or continuation statements, or amendments thereto, record security interests in Intellectual Property and execute and deliver such other agreements, instruments, endorsements, powers of attorney or notices, as may be necessary, or as the Parity Lien Collateral Trustee may reasonably request, in order to perfect and preserve the security interests granted or purported to be granted hereby;

 

(ii)                                  take all actions necessary to ensure the recordation of appropriate evidence of the liens and security interest granted hereunder in any Intellectual Property registered or issued or in which an application for registration or issuance is pending with the United States Patent and Trademark Office or the United States Copyright Office;

 

(iii)                               upon reasonable notice and at such reasonable times during normal business hours as reasonably requested by the Parity Lien Collateral Trustee, allow inspection of the Collateral by the Parity Lien Collateral Trustee, or persons designated by the Parity Lien Collateral Trustee; provided that the costs of one such

 

25

 

inspection per calendar year (or an unlimited number of inspections if an Event of Default has occurred and is continuing) shall be the responsibility of the Borrower;

 

(iv)                              at the Parity Lien Collateral Trustee’s reasonable request, appear in and defend any action or proceeding that may affect such Grantor’s title to or the Parity Lien Collateral Trustee’s security interest in all or any material part of the Collateral; and

 

(v)                                 furnish the Parity Lien Collateral Trustee with such information regarding the Collateral, including, without limitation, the location thereof, as the Parity Lien Collateral Trustee may reasonably request from time to time.

 

(b)                                 Each Grantor hereby authorizes the Parity Lien Collateral Trustee (without implying that the Collateral Trustee shall have any obligations to file) to file a Record or Records, including, without limitation, financing or continuation statements, Intellectual Property Security Agreements and amendments and supplements to any of the foregoing, in the United States and with any filing offices in the United States as the Parity Lien Collateral Trustee may determine, as directed by an Act of Required Secured Parties, are necessary or advisable to perfect or otherwise protect the security interest granted to the Parity Lien Collateral Trustee herein.  Such financing statements may describe the Collateral in the same manner as described herein or may contain an indication or description of collateral that describes such property in any other manner as the Parity Lien Collateral Trustee may determine, as directed by an Act of Required Secured Parties, to ensure the perfection of the security interest in the Collateral granted to the Parity Lien Collateral Trustee herein, including, without limitation, describing such property as “all assets, whether now owned or hereafter acquired”, “all personal property, whether now owned or hereafter acquired” or words of similar effect.  Each Grantor shall furnish to the Parity Lien Collateral Trustee from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Parity Lien Collateral Trustee may reasonably request, all in reasonable detail.

 

(c)                                  Each Grantor hereby authorizes the Parity Lien Collateral Trustee to modify this Agreement after obtaining such Grantor’s approval of or signature to such modification by amending Schedule 5.2 (as such schedule may be amended or supplemented from time to time) to include reference to any right, title or interest in any existing Intellectual Property or any Intellectual Property acquired or developed by any Grantor after the execution hereof or to delete any reference to any right, title or interest in any Intellectual Property in which any Grantor no longer has or claims any right, title or interest.

 

7.2                               Additional Grantors.  From time to time subsequent to the date hereof, additional Persons may become parties hereto as additional Grantors (each, an “Additional Grantor”), by executing a Pledge Supplement.  Upon delivery of any such Pledge Supplement to the Parity Lien Collateral Trustee, notice of which is hereby waived by the other Grantors, each Additional Grantor shall be a Grantor and shall be as fully a party hereto as if such Additional Grantor were an original signatory hereto.  Each Grantor expressly agrees that its obligations arising hereunder shall not be affected or diminished by the addition or release of any other Grantor hereunder, nor by any election of Parity Lien Collateral Trustee not to cause any Subsidiary of Issuer to become an Additional Grantor hereunder.  This Agreement shall be fully

 

26

 

effective as to any Grantor that is or becomes a party hereto regardless of whether any other Person becomes or fails to become or ceases to be a Grantor hereunder.

 

SECTION 8.                         PARITY LIEN COLLATERAL TRUSTEE APPOINTED ATTORNEY-IN-FACT.

 

8.1                               Power of Attorney.  Each Grantor hereby appoints the Parity Lien Collateral Trustee (such appointment being coupled with an interest) as such Grantor’s attorney-in-fact (such appointment to cease upon Discharge of Parity Lien Obligations), with full authority in the place and stead of such Grantor and in the name of such Grantor, the Parity Lien Collateral Trustee to take any action and to execute any instrument that the Parity Lien Collateral Trustee may deem reasonably necessary or advisable as directed by an Act of Required Secured Parties to accomplish the purposes of this Agreement or any other Parity Lien Document, including, without limitation, the following:

 

(a)                                 upon the occurrence and during the continuance of any Event of Default, to obtain and adjust insurance required to be maintained by such Grantor or paid to the Parity Lien Collateral Trustee pursuant to the Indenture or any other Parity Lien Document;

 

(b)                                 upon the occurrence and during the continuance of any Event of Default, to ask for, demand, collect, sue for, recover, compound, receive and give acquittance and receipts for moneys due and to become due under or in respect of any of the Collateral;

 

(c)                                  upon the occurrence and during the continuance of any Event of Default, to receive, endorse and collect any drafts or other instruments, documents and chattel paper in connection with clause (b) above;

 

(d)                                 upon the occurrence and during the continuance of any Event of Default, to file any claims or take any action or institute any proceedings that the Parity Lien Collateral Trustee may deem necessary or advisable for the collection of any of the Collateral or otherwise to enforce the rights of the Parity Lien Collateral Trustee with respect to any of the Collateral;

 

(e)                                  to prepare and file any UCC financing statements against such Grantor as debtor;

 

(f)                                   to prepare, sign, and file for recordation in any United States federal intellectual property registry, appropriate evidence of the lien and security interest granted herein in the Intellectual Property in the name of such Grantor as debtor;

 

(g)                                  to take or cause to be taken all actions necessary to perform or comply or cause performance or compliance with the terms of this Agreement, including, without limitation, access to pay or discharge taxes or Liens (other than Permitted Liens) levied or placed upon or threatened against the Collateral, the legality or validity thereof and the amounts necessary to discharge the same, any such payments made by the Parity Lien Collateral Trustee to become obligations of such Grantor to the Parity Lien Collateral Trustee, due and payable immediately without demand; and

 

27

 

(h)                                 upon the occurrence and during the continuation of an Event of Default, generally to sell, transfer, lease, license, pledge, make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though the Parity Lien Collateral Trustee were the absolute owner thereof for all purposes, and to do, at the Parity Lien Collateral Trustee’s option as directed by an Act of Required Secured Parties and such Grantor’s expense, at any time or from time to time, all acts and things that the Parity Lien Collateral Trustee deems reasonably necessary as directed by an Act of Required Secured Parties to protect, preserve or realize upon the Collateral and the Parity Lien Collateral Trustee’s security interest therein in order to effect the intent of this Agreement, all as fully and effectively as such Grantor might do.

 

8.2                               No Duty on the Part of Parity Lien Collateral Trustee or Secured Parties.  The powers conferred on the Parity Lien Collateral Trustee hereunder are solely to protect the interests of the Secured Parties in the Collateral and shall not impose any duty upon the Parity Lien Collateral Trustee or any other Secured Party to exercise any such powers.  The Parity Lien Collateral Trustee and the other Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct as determined by a final, non-appealable judgment of a court of competent jurisdiction.

 

8.3                               Appointment Pursuant to Indenture.  The Parity Lien Collateral Trustee has been appointed as Collateral Trustee pursuant to the Indenture and the Collateral Trust Agreement.  The rights, duties, privileges, immunities and indemnities of the Parity Lien Collateral Trustee hereunder are subject to the provisions of the Indenture, the Collateral Trust Agreement and the other Parity Lien Documents.

 

SECTION 9.                         REMEDIES.

 

9.1                               Generally.

 

(a)                                 If any Event of Default shall have occurred and be continuing, the Parity Lien Collateral Trustee may exercise in respect of the Collateral, in addition to all other rights and remedies provided for herein or otherwise available to it at law or in equity, all the rights and remedies of the Parity Lien Collateral Trustee on default under the UCC (whether or not the UCC applies to the affected Collateral) to collect, enforce or satisfy any Parity Lien Obligations then owing, whether by acceleration or otherwise, and also may pursue any of the following separately, successively or simultaneously:

 

(i)                                     require any Grantor to, and each Grantor hereby agrees that it shall at its expense and promptly upon request of the Parity Lien Collateral Trustee forthwith, assemble all or part of the Collateral as directed by the Parity Lien Collateral Trustee and make it available to the Parity Lien Collateral Trustee at a place to be designated by the Parity Lien Collateral Trustee that is reasonably convenient to both parties;

 

(ii)                                  enter onto the property during normal business hours where any Collateral is located and take possession thereof with or without judicial process;

 

28

 

(iii)                               prior to the disposition of the Collateral, store, process, repair or recondition the Collateral or otherwise prepare the Collateral for disposition in any manner to the extent the Parity Lien Collateral Trustee deems appropriate;

 

(iv)                              without notice except as specified below or under the UCC, sell, assign, lease, license (on an exclusive or nonexclusive basis) or otherwise dispose of the Collateral or any part thereof in one or more parcels at public or private sale, at any of the Parity Lien Collateral Trustee’s offices or elsewhere, for cash, on credit or for future delivery, at such time or times and at such price or prices and upon such other terms as the Parity Lien Collateral Trustee may deem commercially reasonable; and

 

(v)                                 visit and inspect any of the properties of any Grantor or subsidiary of any Grantor, to inspect, copy and take extracts from such Grantor’s financial and accounting records relating to the Collateral, including the Accounts, at such times and during normal business hours as the Parity Lien Collateral Trustee may reasonably request.

 

(b)                                 The Parity Lien Collateral Trustee or any other Secured Party may be the purchaser of any or all of the Collateral at any public or private (to the extent the portion of the Collateral being privately sold is of a kind that is customarily sold on a recognized market or the subject of widely distributed standard price quotations) sale in accordance with the UCC and the Parity Lien Collateral Trustee, as collateral trustee for and representative of the Secured Parties, shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such sale made in accordance with the UCC, to use and apply any of the Parity Lien Obligations as a credit on account of the purchase price for any Collateral payable by the Parity Lien Collateral Trustee at such sale.  Each purchaser at any such sale shall hold the property sold absolutely free from any claim or right on the part of any Grantor, and each Grantor hereby waives (to the extent permitted by applicable law) all rights of redemption, stay and/or appraisal which it now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted.  Each Grantor agrees that, to the extent notice of sale shall be required by law, at least ten (10) days’ notice to such Grantor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification.  The Parity Lien Collateral Trustee shall not be obligated to make any sale of Collateral regardless of notice of sale having been given.  The Parity Lien Collateral Trustee may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.  Each Grantor agrees that it would not be commercially unreasonable for the Parity Lien Collateral Trustee to dispose of the Collateral or any portion thereof by using Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of assets.  Each Grantor hereby waives any claims against the Parity Lien Collateral Trustee arising by reason of the fact that the price at which any Collateral may have been sold at such a private sale was less than the price which might have been obtained at a public sale, even if the Parity Lien Collateral Trustee accepts the first offer received and does not offer such Collateral to more than one offeree.  If the proceeds of any sale or other disposition of the Collateral are insufficient to pay all the Parity Lien Obligations, Grantors shall be

 

29

 

liable for the deficiency and the reasonable fees of any attorneys employed by the Parity Lien Collateral Trustee to collect such deficiency.  Each Grantor further agrees that a breach of any of the covenants contained in this Section will cause irreparable injury to the Parity Lien Collateral Trustee, that the Parity Lien Collateral Trustee has no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section shall be specifically enforceable against such Grantor, and such Grantor hereby waives to the extent permitted by applicable law and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no default has occurred giving rise to the Parity Lien Obligations becoming due and payable prior to their stated maturities.  Nothing in this Section shall in any way alter the rights of the Parity Lien Collateral Trustee hereunder.

 

(c)                                  The Parity Lien Collateral Trustee may sell the Collateral without giving any warranties as to the Collateral.  The Parity Lien Collateral Trustee may specifically disclaim or modify any warranties of title or the like.  This procedure will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.

 

(d)                                 The Parity Lien Collateral Trustee shall have no obligation to marshal any of the Collateral.

 

(e)                                  Any exercise of remedies provided in this Section 9 shall be subject to the Collateral Trust Agreement and any applicable intercreditor agreement.

 

9.2                               Application of Proceeds.  All proceeds received by the Parity Lien Collateral Trustee in respect of any sale of, any collection from, or other realization upon all or any part of the Collateral shall be applied by the Parity Lien Collateral Trustee as provided in the Collateral Trust Agreement.

 

9.3                               Sales on Credit.  If the Parity Lien Collateral Trustee sells any of the Collateral upon credit, the Grantors will be credited only with payments actually made by purchaser and received by Parity Lien Collateral Trustee and applied to indebtedness of the purchaser.  In the event the purchaser fails to pay for the Collateral, the Parity Lien Collateral Trustee may resell the Collateral and the Grantors shall be credited with proceeds of the sale.

 

9.4                               Investment Related Property.  Each Grantor recognizes that, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws, the Parity Lien Collateral Trustee may be compelled, with respect to any sale of all or any part of the Investment Related Property conducted without prior registration or qualification of such Investment Related Property under the Securities Act and/or such state securities laws, to limit purchasers to those who will agree, among other things, to acquire the Investment Related Property for their own account, for investment and not with a view to the distribution or resale thereof.  Each Grantor acknowledges that any such private sale may be at prices and on terms less favorable than those obtainable through a public sale without such restrictions (including a public offering made pursuant to a registration statement under the Securities Act) and, notwithstanding such circumstances, each Grantor agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner and that the Parity Lien Collateral Trustee shall have no obligation to engage in public sales and no obligation to delay the sale of any Investment Related Property for the period of time necessary to permit the issuer thereof to register it for a

 

30

 

form of public sale requiring registration under the Securities Act or under applicable state securities laws, even if such issuer would, or should, agree to so register it.  If the Parity Lien Collateral Trustee determines to exercise its right to sell any or all of the Investment Related Property, upon written request, each Grantor shall and shall cause each issuer of any Pledged Stock to be sold hereunder, each partnership and each limited liability company from time to time to furnish to the Parity Lien Collateral Trustee all such information as the Parity Lien Collateral Trustee may request in order to determine the number and nature of interest, shares or other instruments included in the Investment Related Property which may be sold by the Parity Lien Collateral Trustee in exempt transactions under the Securities Act and the rules and regulations of the Securities and Exchange Commission thereunder, as the same are from time to time in effect.

 

9.5                               Grant of Intellectual Property License.  For the purpose of enabling the Parity Lien Collateral Trustee, during the continuance of an Event of Default, to exercise rights and remedies under Section 9 hereof at such time and for so long as the Parity Lien Collateral Trustee shall be lawfully entitled to exercise such rights and remedies, and for no other purpose, each Grantor hereby grants to the Parity Lien Collateral Trustee a non-exclusive license (exercisable without payment of royalty or other compensation to such Grantor), subject, in the case of Trademarks, to sufficient rights to quality control and inspection in favor of such Grantor to avoid the risk of invalidation of such Trademarks, to use, assign, license or sublicense any of the Intellectual Property now owned or hereafter acquired, developed or created by such Grantor and included in the Collateral, wherever the same may be located; provided, that such license shall be subject to those exclusive licenses granted by such Grantor in effect on the date hereof and granted hereafter, as permitted under the Loan Documents, to the extent conflicting.  Such license shall include, to the extent permissible under applicable licenses, access to all media in which any of the licensed items may be recorded or stored and to all computer programs used for the compilation or printout hereof.

 

9.6                               Intellectual Property.

 

(a)                                 Anything contained herein to the contrary notwithstanding, in addition to the other rights and remedies provided herein, upon the occurrence and during the continuation of an Event of Default:

 

(i)                                     the Parity Lien Collateral Trustee shall have the right (but not the obligation) to bring suit or otherwise commence any action or proceeding in the name of any Grantor, the Parity Lien Collateral Trustee or otherwise, to enforce any Intellectual Property rights of such Grantor, in which event such Grantor shall, at the request of the Parity Lien Collateral Trustee, do any and all lawful acts and execute any and all documents required by the Parity Lien Collateral Trustee in aid of such enforcement, and such Grantor shall promptly, upon demand, reimburse and indemnify the Parity Lien Collateral Trustee as provided in Section 12 hereof in connection with the exercise of its rights under this Section 9.6, and, to the extent that the Parity Lien Collateral Trustee shall elect not to bring suit to enforce any Intellectual Property rights as provided in this Section 9.6, each Grantor agrees to use all reasonable measures, whether by action, suit, proceeding or otherwise, to prevent the infringement, misappropriation, dilution or other violation of any of such Grantor’s rights in the Intellectual Property by others and for that purpose agrees to diligently maintain any action, suit or proceeding against any Person so infringing, misappropriating, diluting or otherwise violating as shall be necessary to prevent such infringement, misappropriation, dilution or other violation;

 

31

 

(ii)                                  upon written demand from the Parity Lien Collateral Trustee, each Grantor shall grant, assign, convey or otherwise transfer to the Parity Lien Collateral Trustee or such Parity Lien Collateral Trustee’s designee all of such Grantor’s right, title and interest in and to any Intellectual Property and shall execute and deliver to the Parity Lien Collateral Trustee such documents as are necessary or appropriate to carry out the intent and purposes of this Agreement;

 

(iii)                               each Grantor agrees that such an assignment and/or recording shall be applied to reduce the Parity Lien Obligations outstanding only to the extent that the Parity Lien Collateral Trustee (or any other Secured Party) receives cash proceeds in respect of the sale of, or other realization upon, any such Intellectual Property;

 

(iv)                              within five (5) Business Days after written notice from the Parity Lien Collateral Trustee, each Grantor shall make available to the Parity Lien Collateral Trustee, to the extent within such Grantor’s power and authority, such personnel in such Grantor’s employ on the date of such Event of Default as the Parity Lien Collateral Trustee may reasonably designate, by name, title or job responsibility, to permit such Grantor to continue, directly or indirectly, to produce, advertise and sell the products and services sold or delivered by such Grantor under or in connection with any Trademarks or Trademark Licenses, such persons to be available to perform their prior functions on the Parity Lien Collateral Trustee’s behalf and to be compensated by the Parity Lien Collateral Trustee at such Grantor’s expense on a per diem, pro-rata basis consistent with the salary and benefit structure applicable to each as of the date of such Event of Default; and

 

(v)                                 the Parity Lien Collateral Trustee shall have the right to notify, or require each Grantor to notify, any obligors with respect to amounts due or to become due to such Grantor in respect of any Intellectual Property of such Grantor, of the existence of the security interest created herein, to direct such obligors to make payment of all such amounts directly to the Parity Lien Collateral Trustee, and, upon such notification and at the expense of such Grantor, to enforce collection of any such amounts and to adjust, settle or compromise the amount or payment thereof, in the same manner and to the same extent as such Grantor might have done;

 

(1)                                 all amounts and proceeds (including checks and other instruments) received by Grantor in respect of amounts due to such Grantor in respect of the Collateral or any portion thereof shall be received in trust for the benefit of the Parity Lien Collateral Trustee hereunder, shall be segregated from other funds of such Grantor and shall be forthwith paid over or delivered to the Parity Lien Collateral Trustee in the same form as so received (with any necessary endorsement) to be held as cash Collateral and applied as provided by Section 9.7 hereof; and

 

(2)                                 Grantor shall not adjust, settle or compromise the amount or payment of any such amount or release wholly or partly any obligor with respect thereto or allow any credit or discount thereon.

 

(b)                                 If (i) an Event of Default shall have occurred and, by reason of cure, waiver, modification, amendment or otherwise, no longer be continuing, (ii) no other Event of Default shall have occurred and be continuing, (iii) an assignment or other transfer to the Parity Lien Collateral Trustee of any rights, title and interests in and to any Intellectual Property of such Grantor shall

 

32

 

have been previously made and shall have become absolute and effective, and (iv) the Parity Lien Obligations (or any part of them) shall not have become immediately due and payable, upon the written request of any Grantor, the Parity Lien Collateral Trustee shall promptly execute and deliver to such Grantor, at such Grantor’s sole cost and expense, such assignments or other transfer as may be necessary to reassign to such Grantor any such rights, title and interests as may have been assigned to the Parity Lien Collateral Trustee as aforesaid, subject to any disposition thereof that may have been made by the Parity Lien Collateral Trustee; provided, after giving effect to such reassignment, the Parity Lien Collateral Trustee’s security interest granted pursuant hereto, as well as all other rights and remedies of the Parity Lien Collateral Trustee granted hereunder, shall continue to be in full force and effect; and provided  further, the rights, title and interests so reassigned shall be free and clear of any other Liens granted by or on behalf of the Parity Lien Collateral Trustee and the Secured Parties.

 

9.7                               Cash Proceeds; Deposit Accounts.

 

(a)                                 If any Event of Default shall have occurred and be continuing, in addition to the rights of the Parity Lien Collateral Trustee specified in Section 6.5 with respect to payments of Receivables, all proceeds of any Collateral received by any Grantor consisting of cash, checks and other near-cash items (collectively, “Cash Proceeds”) shall, subject to the terms of and the priorities set forth in the Collateral Trust Agreement and any applicable intercreditor agreement, be held by such Grantor in trust for the Parity Lien Collateral Trustee, segregated from other funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to the Parity Lien Collateral Trustee in the exact form received by such Grantor (duly indorsed by such Grantor to the Parity Lien Collateral Trustee, if required).  Any Cash Proceeds received by the Parity Lien Collateral Trustee (whether from a Grantor or otherwise) may, subject to the terms of and the priorities set forth in the Collateral Trust Agreement and any applicable intercreditor agreement, (i) be held by the Parity Lien Collateral Trustee for the ratable benefit of the Secured Parties, as collateral security for the Parity Lien Obligations (whether matured or unmatured) and/or (ii) then or at any time thereafter may be applied by the Parity Lien Collateral Trustee against the Parity Lien Obligations then due and owing in accordance with Section 9.2 hereof.

 

(b)                                 If any Event of Default shall have occurred and be continuing, the Parity Lien Collateral Trustee may, subject to the terms of and the priorities set forth in the Collateral Trust Agreement and any applicable intercreditor agreement, apply the balance from any Deposit Account or instruct the bank at with any Deposit Account is maintained to pay the balance of any Deposit Account to or for the benefit of the Parity Lien Collateral Trustee

 

SECTION 10.                  PARITY LIEN COLLATERAL TRUSTEE.

 

By acceptance of the benefits hereof, each Secured Party (whether or not a signatory hereto) shall be deemed to consent to the appointment of the Parity Lien Collateral Trustee to act as Parity Lien Collateral Trustee hereunder. The Parity Lien Collateral Trustee shall be obligated, and shall have the right hereunder, to make demands, to give notices, to exercise or refrain from exercising any rights, and to take or refrain from taking any action (including, without limitation, the release or substitution of any Collateral), solely in accordance with this Agreement, the

 

33

 

Collateral Trust Agreement and any applicable intercreditor agreement; provided, the Parity Lien Collateral Trustee shall exercise, or refrain from exercising, any remedies provided for herein in accordance with the terms of the Collateral Trust Agreement.  In furtherance of the foregoing provisions of this Section, each Secured Party, by its acceptance of the benefits hereof, agrees that it shall have no right individually to realize upon any of the Collateral hereunder, it being understood and agreed by such Secured Party that all rights and remedies hereunder may be exercised solely by the Parity Lien Collateral Trustee for the benefit of Secured Parties in accordance with the terms of this Section.  The rights, privileges, protections and immunities in the Collateral Trust Agreement for the benefit of the Collateral Trustee and the other provisions of the Collateral Trust Agreement relating to the Collateral Trustee are hereby incorporated herein with respect to the Parity Lien Collateral Trustee.

 

SECTION 11.                  CONTINUING SECURITY INTEREST; TRANSFER OF NOTES.

 

This Agreement shall create a continuing security interest in the Collateral and shall remain in full force and effect until the Discharge of Parity Lien Obligations and shall be binding upon each Grantor, its successors and permitted assigns, and inure, together with the rights and remedies of the Parity Lien Collateral Trustee hereunder, to the benefit of the Parity Lien Collateral Trustee and its successors, transferees and permitted assigns.  Without limiting the generality of the foregoing, but subject to the terms of the Indenture and any other applicable Parity Lien Document, any Secured Party may assign or otherwise transfer any Parity Lien Obligations held by it to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to Secured Parties herein or otherwise.  Upon the Discharge of Parity Lien Obligations, the security interest granted hereby shall automatically terminate hereunder and of record and all rights to the Collateral shall revert to Grantors or to whomsoever may be lawfully entitled to receive the same (in accordance with the Collateral Trust Agreement, any applicable intercreditor agreement or otherwise).  Upon any such termination the Parity Lien Collateral Trustee shall, at Grantors’ expense, execute and deliver to Grantors or otherwise authorize the filing of such documents as Grantors shall reasonably request, including financing statement amendments or terminations, account control termination letters, and any other such documents to evidence such termination.   All other releases of Collateral shall be made in accordance with the terms of the Collateral Trust Agreement and any applicable intercreditor agreement.

 

SECTION 12.                  STANDARD OF CARE; PARITY LIEN COLLATERAL TRUSTEE MAY PERFORM.

 

The powers conferred on the Parity Lien Collateral Trustee hereunder are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any such powers.  Except for the exercise of reasonable care in the custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder, the Parity Lien Collateral Trustee shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral.  The Parity Lien Collateral Trustee shall be deemed to have exercised reasonable care in the custody and preservation of Collateral in its possession if such Collateral is accorded treatment substantially equal to that which the Parity Lien Collateral Trustee accords its own property.  Neither the Parity Lien Collateral Trustee nor any of its directors, officers, employees or agents shall be liable for failure to demand, collect or realize upon all or any part of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or otherwise.  If any Grantor fails to perform any agreement contained herein, the Parity Lien Collateral Trustee may, but shall not be required to,

 

34

 

itself perform, or cause performance of, such agreement, and the expenses of the Parity Lien Collateral Trustee incurred in connection therewith shall be payable by each Grantor under the Collateral Trust Agreement.

 

SECTION 13.                  MISCELLANEOUS.

 

Any notice, request or demand required or permitted to be given under this Agreement shall be given in accordance with the Collateral Trust Agreement.  No failure or delay on the part of the Parity Lien Collateral Trustee in the exercise of any power, right or privilege hereunder or under the Collateral Trust Agreement shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other power, right or privilege.  All rights and remedies existing under this Agreement and the Collateral Trust Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available.  In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.  All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or would otherwise be within the limitations of, another covenant shall not avoid the occurrence of a Default or an Event of Default if such action is taken or condition exists.  This Agreement shall be binding upon and inure to the benefit of the Parity Lien Collateral Trustee and Grantors and their respective successors and permitted assigns.  No Grantor shall, without the prior written consent of the Parity Lien Collateral Trustee given in accordance with the Collateral Trust Agreement and any applicable intercreditor agreement, assign any right, duty or obligation hereunder.  This Agreement, and the Collateral Trust Agreement embody the entire agreement and understanding between Grantors and the Parity Lien Collateral Trustee and supersede all prior agreements and understandings between such parties relating to the subject matter hereof and thereof.  Accordingly, the Collateral Trust Agreement may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties.  There are no unwritten oral agreements between the parties.  This Agreement may be executed in one or more counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document.  Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic transmission (including .pdf or .tif format) shall be effective as delivery of a manually executed counterpart of this Agreement.  This Agreement may be amended or supplemented in accordance with the terms of the Collateral Trust Agreement.

 

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER (INCLUDING, WITHOUT LIMITATION, ANY CLAIMS SOUNDING IN CONTRACT LAW OR TORT LAW ARISING OUT OF THE SUBJECT MATTER HEREOF) SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK (OTHER THAN ANY MANDATORY PROVISIONS OF THE UCC RELATING TO THE LAW GOVERNING PERFECTION AND THE EFFECT OF PERFECTION OF THE SECURITY INTEREST).

 

35

 

THE PROVISIONS OF THE COLLATERAL TRUST AGREEMENT UNDER THE HEADINGS “CONSENT TO JURISDICTION” AND “WAIVER OF JURY TRIAL” ARE INCORPORATED HEREIN BY THIS REFERENCE AND SUCH INCORPORATION SHALL SURVIVE ANY TERMINATION OF THE COLLATERAL TRUST AGREEMENT.

 

36

 

IN WITNESS WHEREOF, each Grantor and the Parity Lien Collateral Trustee have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

 

 

	
 
    	
FORESIGHT ENERGY LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert D. Moore
    
	
 
    	
 
    	
Name: Robert D. Moore
    
	
 
    	
 
    	
Title:   President and Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
FORESIGHT ENERGY FINANCE   CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert D. Moore
    
	
 
    	
 
    	
Name: Robert D. Moore
    
	
 
    	
 
    	
Title:   President and Chief Executive Officer
    

 

[Signature Page to Parity Lien Debt Pledge and Security Agreement]

 

 

	
 
    	
ADENA RESOURCES, LLC

AKIN ENERGY LLC

AMERICAN CENTURY MINERAL LLC

AMERICAN CENTURY TRANSPORT LLC

COAL FIELD CONSTRUCTION COMPANY LLC

COAL FIELD REPAIR SERVICES LLC

FORESIGHT COAL SALES LLC

FORESIGHT ENERGY EMPLOYEE SERVICES CORPORATION

FORESIGHT ENERGY FINANCE CORPORATION

FORESIGHT ENERGY LABOR LLC

FORESIGHT ENERGY SERVICES LLC

HILLSBORO TRANSPORT LLC

LD LABOR COMPANY LLC

LOGAN MINING LLC

M-CLASS MINING, LLC

MACH MINING, LLC

MACOUPIN ENERGY LLC

MARYAN MINING LLC

OENEUS LLC d/b/a SAVATRAN LLC

SENECA REBUILD LLC

SITRAN LLC

SUGAR CAMP ENERGY, LLC

TANNER ENERGY LLC

VIKING MINING LLC

WILLIAMSON ENERGY, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert D. Moore
    
	
 
    	
 
    	
Name: Robert D. Moore

Title:    Authorized Signatory
    

 

[Signature Page to Parity Lien Debt Pledge and Security Agreement]

 

 

Each of the undersigned hereby joins this Priority Lien Debt Pledge and Security Agreement solely for the purpose of evidencing such undersigned’s consent and agreement to the terms and provisions of Section 6.1 thereof in its capacity as “Applicable Issuer”:

 

	
 
    	
HILLSBORO   ENERGY LLC

PATTON   MINING LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert D. Moore
    
	
 
    	
 
    	
Name: Robert D. Moore

Title:   Authorized Signatory
    

 

[Signature Page to Parity Lien Debt Pledge and Security Agreement]

 

 

	
 
    	
LORD   SECURITIES CORPORATION, 
   as Parity Lien Collateral Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Albert J.   Fioravanti
    
	
 
    	
 
    	
Name: Albert J. Fioravanti
    
	
 
    	
 
    	
Title: Director
    

 

[Signature Page to Parity Lien Debt Pledge and Security Agreement]

 

 

 

EXHIBIT A

TO PARITY LIEN DEBT PLEDGE AND SECURITY AGREEMENT

 

PLEDGE SUPPLEMENT

 

This PLEDGE SUPPLEMENT, dated [mm/dd/yy], is delivered by [NAME OF GRANTOR] a [NAME OF STATE OF INCORPORATION] [Corporation] (the “Grantor”) pursuant to the Parity Lien Debt Pledge and Security Agreement, dated as of March 28, 2017 (as it may be from time to time amended, restated, modified or supplemented, the “Security Agreement”), among FORESIGHT ENERGY LLC, FORESIGHT ENERGY FINANCE CORPORATION, the other Grantors named therein, and LORD SECURITIES CORPORATION, as the Parity Lien Collateral Trustee.  Capitalized terms used herein not otherwise defined herein shall have the meanings ascribed thereto in the Security Agreement.

 

Grantor hereby confirms the grant to the Parity Lien Collateral Trustee set forth in the Security Agreement of, and does hereby grant to the Parity Lien Collateral Trustee, a security interest in all of Grantor’s right, title and interest in, to and under all Collateral to secure the Parity Lien Obligations, in each case whether now or hereafter existing or in which Grantor now has or hereafter acquires an interest and wherever the same may be located.  Grantor represents and warrants that the attached Supplements to Schedules accurately and completely set forth all additional information required to be provided pursuant to the Security Agreement and hereby agrees that such Supplements to Schedules shall constitute part of the Schedules to the Security Agreement.

 

Notwithstanding anything herein to the contrary, the lien and security interest granted to the Parity Lien Collateral Trustee pursuant to the Security Agreement or this Agreement and the exercise of any right or remedy by the Parity Lien Collateral Trustee under the Security Agreement are subject to the provisions of the Collateral Trust Agreement or any applicable intercreditor agreement.  In the event of any conflict between the terms of the Collateral Trust Agreement or any applicable intercreditor agreement and this Agreement, the terms of the Collateral Trust Agreement or applicable intercreditor agreement shall govern and control.

 

THIS PLEDGE SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER (INCLUDING, WITHOUT LIMITATION, ANY CLAIMS SOUNDING IN CONTRACT LAW OR TORT LAW ARISING OUT OF THE SUBJECT MATTER HEREOF) SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK (OTHER THAN ANY MANDATORY PROVISIONS OF THE UCC RELATING TO THE LAW GOVERNING PERFECTION AND THE EFFECT OF PERFECTION OF THE SECURITY INTEREST).

 

IN WITNESS WHEREOF, Grantor has caused this Pledge Supplement to be duly executed and delivered by its duly authorized officer as of [mm/dd/yy].

 

EXHIBIT A-1

 

	
 
    	
[NAME OF GRANTOR]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

EXHIBIT A-2

 

SUPPLEMENT TO SCHEDULE 5.1
 TO PARITY LIEN DEBT PLEDGE AND SECURITY AGREEMENT

 

Additional Information:

 

GENERAL INFORMATION

 

(A)                               Full Legal Name, Type of Organization, Jurisdiction of Organization, Chief Executive Office/Sole Place of Business (or Residence if Grantor is a Natural Person) and Organizational Identification Number of each Grantor:

 

	
Full Legal
   Name
    	
 
    	
Type of
   Organization
    	
 
    	
Jurisdiction of
   Organization
    	
 
    	
Chief Executive
   Office/Sole Place of
   Business (or
   Residence if Grantor
   is a Natural Person)
    	
 
    	
Organization
   I.D.#
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

(C)                               Changes in Name, Jurisdiction of Organization, Chief Executive Office or Sole Place of Business (or Principal Residence if Grantor is a Natural Person) and Corporate Structure within past five (5) years:

 

	
Grantor
    	
 
    	
Date of Change
    	
 
    	
Description of Change
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

SUPPLEMENT TO SCHEDULE 5.2
 TO PARITY LIEN DEBT PLEDGE AND SECURITY AGREEMENT

 

COLLATERAL IDENTIFICATION

 

I.   INVESTMENT RELATED PROPERTY

 

(A)                                           Pledged Stock:

 

	
Grantor
    	
 
    	
Stock
   Issuer
    	
 
    	
Class of
   Stock
    	
 
    	
Certificated
   (Y/N)
    	
 
    	
Stock
   Certificate
   No.
    	
 
    	
Par Value
    	
 
    	
No. of
   Pledged
   Stock
    	
 
    	
Percentage
   of
   Outstanding
   Stock of
   the Stock
   Issuer
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

Pledged LLC Interests:

 

	
Grantor
    	
 
    	
Limited
   Liability
   Company
    	
 
    	
Certificated
   (Y/N)
    	
 
    	
Certificate No.
   (if any)
    	
 
    	
No. of Pledged
   Units
    	
 
    	
Percentage of
   Outstanding
   LLC Interests
   of the Limited
   Liability
   Company
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

Pledged Partnership Interests:

 

	
Grantor
    	
 
    	
Partnership
    	
 
    	
Type of
   Partnership
   Interests (e.g.,
   general or
   limited)
    	
 
    	
Certificated
   (Y/N)
    	
 
    	
Certificate No.
   (if any)
    	
 
    	
Percentage of
   Outstanding
   Partnership
   Interests of the
   Partnership
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

Pledged Trust Interests:

 

	
Grantor
    	
 
    	
Trust
    	
 
    	
Class of Trust
   Interests
    	
 
    	
Certificated
   (Y/N)
    	
 
    	
Certificate No.
   (if any)
    	
 
    	
Percentage of
   Outstanding
   Trust Interests
   of the Trust
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

Pledged Debt:

 

	
Grantor
    	
 
    	
Issuer
    	
 
    	
Original
   Principal
   Amount
    	
 
    	
Outstanding
   Principal
   Balance
    	
 
    	
Issue Date
    	
 
    	
Maturity Date
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

Securities Account:

 

	
Grantor
    	
 
    	
Share of Securities
   Intermediary
    	
 
    	
Account Number
    	
 
    	
Account Name
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

Deposit Accounts:

 

	
Grantor
    	
 
    	
Name of Depositary
   Bank
    	
 
    	
Account Number
    	
 
    	
Account Name
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

Commodities Accounts:

 

	
Grantor
    	
 
    	
Name of Commodities
   Intermediary
    	
 
    	
Account Number
    	
 
    	
Account Name
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

(B)

 

	
Grantor
    	
 
    	
Date of Acquisition
    	
 
    	
Description of Acquisition
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

II.  INTELLECTUAL PROPERTY

 

(A)                               U.S. Copyright Registrations

 

	
Grantor
    	
 
    	
Title of Work
    	
 
    	
Registration
   Number (if any)
    	
 
    	
Registration Date (if
   any)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

(B)                               U.S. Issued Patents and Applications

 

	
Grantor
    	
 
    	
Title of Patent
    	
 
    	
Patent
   Number/(Application
   Number)
    	
 
    	
Issue Date/(Filing
   Date)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

(C)                               U.S. Federal Registered Trademarks and Applications

 

	
Grantor
    	
 
    	
Trademark
    	
 
    	
Registration
   Number/(Serial
   Number)
    	
 
    	
Registration
   Date/(Filing Date)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

III. COMMERCIAL TORT CLAIMS

 

	
Grantor
    	
 
    	
Commercial Tort Claims
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

IV. [RESERVED]

 

V.  WAREHOUSEMAN, BAILEES AND OTHER THIRD PARTIES IN POSSESSION OF COLLATERAL

 

	
Grantor
    	
 
    	
Description of Property
    	
 
    	
Name and Address of Third Party
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

SUPPLEMENT TO SCHEDULE 5.4

TO PARITY LIEN DEBT PLEDGE AND SECURITY AGREEMENT

 

Financing Statements:

 

	
Grantor
    	
 
    	
Filing Jurisdiction(s)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

 

SUPPLEMENT TO SCHEDULE 5.5
 TO PARITY LIEN DEBT PLEDGE AND SECURITY AGREEMENT

 

(B)

 

(1)           Any Account Debtor in respect of any Receivable in excess of $1,000,000 individually or $2,500,000 in the aggregate that is the government of the United States, any agency or instrumentality thereof, any state or municipality or any foreign sovereign:

 

(D)          Locations of material Equipment and Inventory, other than any Inventory or Equipment in transit, undergoing repairs, replacements loaned to employees, or kept on the premises of customers or with any third party in connection with preparation for shipment or for rehabilitation or refurbishment:

 

	
Grantor
    	
 
    	
Location of Equipment and Inventory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

 

EXHIBIT B

TO PARITY LIEN DEBT PLEDGE AND SECURITY AGREEMENT

 

UNCERTIFICATED SECURITIES CONTROL AGREEMENT

 

This Uncertificated Securities Control Agreement (this “Agreement”) dated as of [         ], 20[  ] among [                ] (the “Pledgor”), LORD SECURITIES CORPORATION, as Parity Lien Collateral Trustee for the Secured Parties, (the “Parity Lien Collateral Trustee”) and [            ], a [        ] [corporation] (the “Issuer”).  Capitalized terms used but not defined herein shall have the meaning assigned in that certain Parity Lien Debt Pledge and Security Agreement dated as March 28, 2017, among the Pledgor, the other Grantors party thereto and the Parity Lien Collateral Trustee (as it may be amended, restated, supplemented or otherwise modified from time to time, the “Security Agreement”).  All references herein to the “UCC” shall mean the Uniform Commercial Code as in effect in the State of New York.

 

Section 1.  Registered Ownership of Shares.  The Issuer hereby confirms and agrees that as of the date hereof the Pledgor is the registered owner of [          ] shares of the Issuer’s [common] stock (the “Pledged Shares”).

 

Section 2.  Instructions.  If at any time the Issuer shall receive instructions originated by the Parity Lien Collateral Trustee relating to the Pledged Shares, the Issuer shall comply with such instructions without further consent by the Pledgor or any other person.

 

Section 3.  Additional Representations and Warranties of the Issuer.  The Issuer hereby represents and warrants to the Parity Lien Collateral Trustee:

 

(a)  It has not entered into, and until the termination of this agreement will not enter into, any agreement with any other person relating the Pledged Shares pursuant to which it has agreed to comply with instructions issued by such other person; and

 

(b)  It has not entered into, and until the termination of this agreement will not enter into, any agreement with the Pledgor or the Parity Lien Collateral Trustee purporting to limit or condition the obligation of the Issuer to comply with Instructions as set forth in Section 2 hereof.

 

(c)  This Uncertificated Securities Control Agreement is the valid and legally binding obligation of the Issuer.

 

Section 4.  Choice of Law.  THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, ANY CLAIMS SOUNDING IN CONTRACT LAW OR TORT LAW ARISING OUT OF THE SUBJECT MATTER HEREOF) SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK.

 

Section 5.  Amendments.  No amendment or modification of this Agreement or waiver of any right hereunder shall be binding on any party hereto unless it is in writing and is signed by all of the parties hereto.

 

 

Section 6.  Voting Rights.  Until such time as the Parity Lien Collateral Trustee shall otherwise instruct the Issuer in writing, the Pledgor shall have the right to vote the Pledged Shares.

 

Section 7.  Successors; Assignment.  The terms of this Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective corporate successors or heirs and personal representatives who obtain such rights solely by operation of law.  The Parity Lien Collateral Trustee may assign its rights hereunder only with the express written consent of the Issuer and by sending written notice of such assignment to the Pledgor.

 

Section 8.  Indemnification of Issuer.  The Pledgor and the Parity Lien Collateral Trustee hereby agree that (a) the Issuer is released from any and all liabilities to the Pledgor and the Parity Lien Collateral Trustee arising from the terms of this Agreement and the compliance of the Issuer with the terms hereof, except to the extent that such liabilities arise from the Issuer’s negligence and (b) the Pledgor, its successors and assigns shall at all times indemnify and save harmless the Issuer from and against any and all claims, actions and suits of others arising out of the terms of this Agreement or the compliance of the Issuer with the terms hereof, except to the extent that such arises from the Issuer’s negligence, and from and against any and all liabilities, losses, damages, costs, charges, counsel fees and other expenses of every nature and character arising by reason of the same, until the termination of this Agreement.

 

Section 9.  Notices.  Any notice, request or other communication required or permitted to be given under this Agreement shall be in writing and deemed to have been properly given when delivered in person, or when sent by telecopy or other electronic means and electronic confirmation of error free receipt is received or two (2) days after being sent by certified or registered United States mail, return receipt requested, postage prepaid, addressed to the party at the address set forth below.

 

	
Pledgor:
    	
[Name and Address of Pledgor]
    
	
 
    	
Attention: [                       ]
    
	
 
    	
Telecopier: [                      ]
    
	
 
    	
 
    
	
Parity Lien Collateral Trustee:
    	
[Name and Address of Parity   Lien Collateral Trustee]
    
	
 
    	
Attention: [                      ]
    
	
 
    	
Telecopier: [                      ]
    
	
 
    	
 
    
	
Issuer:
    	
[Insert Name and Address of   Issuer]
    
	
 
    	
Attention: [                      ]
    
	
 
    	
Telecopier: [                      ]
    

 

Any party may change its address for notices in the manner set forth above.

 

Section 10.  Termination.  The obligations of the Issuer to the Parity Lien Collateral Trustee pursuant to this Control Agreement shall continue in effect until the security interests of the Parity Lien Collateral Trustee in the Pledged Shares have been terminated pursuant to the terms of the Security Agreement, the Collateral Trust Agreement and the Parity Lien Collateral Trustee has notified the Issuer of such termination in writing or the other release of the security interests pursuant to the terms of the Collateral Trust Agreement or Parity Lien Documents.  The Parity Lien Collateral Trustee agrees to provide Notice of Termination in substantially the form of Exhibit A hereto to the Issuer upon the request of the Pledgor on or after the termination of the Parity Lien Collateral Trustee’s security interest in the Pledged Shares pursuant to the terms of

 

 

the Security Agreement, the Collateral Trust Agreement and the Parity Lien Documents.  The termination of this Control Agreement shall not by itself terminate the Pledged Shares or alter the obligations of the Issuer to the Pledgor pursuant to any other agreement with respect to the Pledged Shares.

 

Section 11.  Collateral Trust Agreement.  Notwithstanding anything herein to the contrary, the lien and security interest granted to the Parity Lien Collateral Trustee pursuant to this Control Agreement and the exercise of any right or remedy by the Parity Lien Collateral Trustee hereunder are subject to the provisions of the Collateral Trust Agreement.  In the event of any conflict between the terms of the Collateral Trust Agreement and this Control Agreement, the terms of such Collateral Trust Agreement shall govern and control.

 

Section 12.  Counterparts.  This Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Agreement by signing and delivering one or more counterparts.

 

	
 
    	
[NAME OF PLEDGOR],
    
	
 
    	
as   Pledgor
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
LORD   SECURITIES CORPORATION,
    
	
 
    	
as   Parity Lien Collateral Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized   Signatory
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[NAME OF ISSUER],
    
	
 
    	
as   Issuer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

 

Exhibit A

 

[Letterhead of Parity Lien Collateral Trustee]

 

[Date]

 

[Name and Address of Issuer]
 Attention: [                                          ]

 

Re:  Termination of Control Agreement

 

You are hereby notified that the Uncertificated Securities Control Agreement between you, [Name of Pledgor] (the “Pledgor”) and the undersigned (a copy of which is attached) is terminated and you have no further obligations to the undersigned pursuant to such Agreement.  Notwithstanding any previous instructions to you, you are hereby instructed to accept all future directions with respect to Pledged Shares (as defined in the Uncertificated Control Agreement) from the Pledgor.  This notice terminates any obligations you may have to the undersigned with respect to the Pledged Shares, however nothing contained in this notice shall alter any obligations which you may otherwise owe to the Pledgor pursuant to any other agreement.

 

You are instructed to deliver a copy of this notice by facsimile transmission to the Pledgor.

 

	
 
    	
Very   truly yours,
    
	
 
    	
LORD   SECURITIES CORPORATION,
    
	
 
    	
as   Parity Lien Collateral Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized   Signatory
    

 

 

EXHIBIT C

TO PARITY LIEN DEBT PLEDGE AND SECURITY AGREEMENT

 

FORM OF TRADEMARK SECURITY AGREEMENT (PARITY LIEN)

 

This TRADEMARK SECURITY AGREEMENT, dated as of [          ], 20[  ] (as it may be amended, restated, supplemented or otherwise modified from time to time, this “Agreement”), is made by the entities identified as grantors on the signature pages hereto (collectively, the “Grantors”) in favor of LORD SECURITIES CORPORATION, as Parity Lien Collateral Trustee for the Secured Parties (in such capacity, together with its successors and permitted assigns, the “Parity Lien Collateral Trustee”).

 

WHEREAS, the Grantors are party to that certain Parity Lien Debt Pledge and Security Agreement dated as of March 28, 2017 (as it may be amended, restated, supplemented or otherwise modified from time to time, the “Pledge and Security Agreement”) between each of the Grantors and the other grantors party thereto and the Parity Lien Collateral Trustee pursuant to which the Grantors granted a security interest to the Parity Lien Collateral Trustee in the Trademark Collateral (as defined below) and are required to execute and deliver this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Grantors hereby agree with the Parity Lien Collateral Trustee as follows:

 

SECTION 1.        Defined Terms

 

Unless otherwise defined herein, terms defined in the Pledge and Security Agreement and used herein have the meaning given to them in the Pledge and Security Agreement.

 

SECTION 2.        Grant of Security Interest in Trademark Collateral

 

SECTION 2.1      Grant of Security.  Each Grantor hereby grants to the Parity Lien Collateral Trustee, for the benefit of the Secured Parties, a security interest in and continuing lien on all of such Grantor’s right, title and interest in, to and under the following, in each case whether now owned or existing or hereafter acquired, developed, created or arising and wherever located (collectively, the “Trademark Collateral”):

 

All of its United States trademarks, trade names, corporate names, company names, business names, fictitious business names, Internet domain names, service marks, certification marks, collective marks, logos, other source or business identifiers, designs and general intangibles of a like nature, all registrations and applications for any of the foregoing including, but not limited to: (i) the registrations and applications listed in Schedule A attached hereto, (ii) all extensions or renewals of any of the foregoing, (iii) all of the goodwill of the business connected with the use of and symbolized by any of the foregoing, (iv) the right to sue for past, present and future infringement or dilution of any of the foregoing or for any injury to goodwill, and (v) all Proceeds of the foregoing, including, without limitation, royalties, income, payments, claims, damages, and proceeds of suit.

 

SECTION 2.2      Certain Limited Exclusions. Notwithstanding anything herein to the contrary, in no event shall the Trademark Collateral include or the security interest granted under

 

EXHIBIT C-1

 

Section 2.1 hereof attach to any intent-to-use United States Trademark applications for which an amendment to allege use or statement of use has not been filed under U.S. federal law or, if filed, has not been deemed in conformance with U.S. federal law or examined or accepted by the U.S. Patent and Trademark Office.

 

SECTION 3.        Security Agreement

 

The security interest granted pursuant to this Agreement is granted in conjunction with the security interest granted to the Parity Lien Collateral Trustee for the Secured Parties pursuant to the Pledge and Security Agreement, and the Grantors hereby acknowledge and affirm that the rights and remedies of the Parity Lien Collateral Trustee with respect to the security interest in the Trademark Collateral made and granted hereby are more fully set forth in the Pledge and Security Agreement.  In the event that any provision of this Agreement is deemed to conflict with the Pledge and Security Agreement, the provisions of the Pledge and Security Agreement shall control.

 

SECTION 4.        Governing Law

 

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER (INCLUDING, WITHOUT LIMITATION, ANY CLAIMS SOUNDING IN CONTRACT LAW OR TORT LAW ARISING OUT OF THE SUBJECT MATTER HEREOF) SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK (OTHER THAN ANY MANDATORY PROVISIONS OF LAW RELATING TO THE LAW GOVERNING PERFECTION AND THE EFFECT OF PERFECTION OF THE SECURITY INTEREST).

 

SECTION 5.        Counterparts

 

This Agreement may be executed in one or more counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.

 

[Remainder of page intentionally left blank]

 

EXHIBIT C-2

 

IN WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above.

 

	
 
    	
[NAME OF GRANTOR]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[NAME OF GRANTOR]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

EXHIBIT C-3

 

	
Accepted   and Agreed:
    	
 
    
	
 
    	
 
    
	
LORD   SECURITIES CORPORATION,
    	
 
    
	
as Parity Lien   Collateral Trustee
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Authorized Signatory
    	
 
    

 

EXHIBIT C-4

 

SCHEDULE A
 to
 TRADEMARK SECURITY AGREEMENT (PARITY LIEN)

 

U.S. FEDERAL TRADEMARK REGISTRATIONS AND APPLICATIONS

 

	
Mark
    	
 
    	
Serial No.
    	
 
    	
Filing Date
    	
 
    	
Registration No.
    	
 
    	
Registration
   Date
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

EXHIBIT C-5

 

EXHIBIT D

TO PARITY LIEN DEBT PLEDGE AND SECURITY AGREEMENT

 

FORM OF PATENT SECURITY AGREEMENT (PARITY LIEN)

 

This PATENT SECURITY AGREEMENT, dated as of [          ], 20[  ] (as it may be amended, restated, supplemented or otherwise modified from time to time, this “Agreement”), is made by the entities identified as grantors on the signature pages hereto (collectively, the “Grantors”) in favor of LORD SECURITIES CORPORATION, as Parity Lien Collateral Trustee for the Secured Parties (in such capacity, together with its successors and permitted assigns, the “Parity Lien Collateral Trustee”).

 

WHEREAS, the Grantors are party to that certain Parity Lien Debt Pledge and Security Agreement dated as of March 28, 2017 (as it may be amended, restated, supplemented or otherwise modified from time to time, the “Pledge and Security Agreement”) between each of the Grantors and the other grantors party thereto and the Parity Lien Collateral Trustee pursuant to which the Grantors granted a security interest to the Parity Lien Collateral Trustee in the Patent Collateral (as defined below) and are required to execute and deliver this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Grantors hereby agree with the Parity Lien Collateral Trustee as follows:

 

SECTION. 1.  Defined Terms

 

Unless otherwise defined herein, terms defined in the Pledge and Security Agreement and used herein have the meaning given to them in the Pledge and Security Agreement.

 

SECTION 2.  Grant of Security Interest

 

Each Grantor hereby grants to the Parity Lien Collateral Trustee, for the benefit of the Secured Parties, a security interest in and continuing lien on all of such Grantor’s right, title and interest in, to and under the following, in each case whether now owned or existing or hereafter acquired, developed, created or arising and wherever located (collectively, the “Patent Collateral”):

 

All of such Grantor United States patents and certificates of invention, or similar industrial property rights, and applications for any of the foregoing, including, but not limited to: (i) each patent and patent application listed in Schedule A attached hereto (as such schedule may be amended or supplemented from time to time), (ii) all reissues, divisions, continuations, continuations-in-part, extensions, renewals, and reexaminations thereof, (iii) all rights corresponding thereto, (iv) all inventions and improvements described therein, (v) all rights to sue for past, present and future infringements thereof, (vi) all claims, damages, and proceeds of suit arising therefrom, and (vii) all Proceeds of the foregoing, including, without limitation, royalties, income, payments, claims, damages, and proceeds of suit.

 

SECTION 3.        Security Agreement

 

The security interest granted pursuant to this Agreement is granted in conjunction with the security interest granted to the Parity Lien Collateral Trustee for the Secured Parties pursuant

 

EXHIBIT D-1

 

to the Pledge and Security Agreement, and the Grantors hereby acknowledge and affirm that the rights and remedies of the Parity Lien Collateral Trustee with respect to the security interest in the Patent Collateral made and granted hereby are more fully set forth in the Pledge and Security Agreement.  In the event that any provision of this Agreement is deemed to conflict with the Pledge and Security Agreement, the provisions of the Pledge and Security Agreement shall control.

 

SECTION 4.        Governing Law

 

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER (INCLUDING, WITHOUT LIMITATION, ANY CLAIMS SOUNDING IN CONTRACT LAW OR TORT LAW ARISING OUT OF THE SUBJECT MATTER HEREOF) SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK (OTHER THAN ANY MANDATORY PROVISIONS OF LAW RELATING TO THE LAW GOVERNING PERFECTION AND THE EFFECT OF PERFECTION OF THE SECURITY INTEREST).

 

SECTION 5.        Counterparts

 

This Agreement may be executed in one or more counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.

 

[Remainder of page intentionally left blank]

 

EXHIBIT D-2

 

IN WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above.

 

	
 
    	
[NAME OF GRANTOR]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[NAME OF GRANTOR]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

EXHIBIT D-3

 

	
Accepted   and Agreed:
    	
 
    
	
 
    	
 
    
	
LORD   SECURITIES CORPORATION,
    	
 
    
	
as Parity Lien   Collateral Trustee
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Authorized Signatory
    	
 
    

 

EXHIBIT D-4

 

SCHEDULE A
 to
 PATENT SECURITY AGREEMENT (PARITY LIEN)

 

U.S. PATENTS AND PATENT APPLICATIONS

 

	
Title
    	
 
    	
Application No.
    	
 
    	
Filing Date
    	
 
    	
Patent No.
    	
 
    	
Issue Date
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

EXHIBIT D-5

 

EXHIBIT E

TO PARITY LIEN DEBT PLEDGE AND SECURITY AGREEMENT

 

FORM OF COPYRIGHT SECURITY AGREEMENT (PARITY LIEN)

 

This COPYRIGHT SECURITY AGREEMENT, dated as of [          ], 20[  ] (as it may be amended, restated, supplemented or otherwise modified from time to time, this “Agreement”), is made by the entities identified as grantors on the signature pages hereto (collectively, the “Grantors”) in favor of LORD SECURITIES CORPORATION, as Parity Lien Collateral Trustee for the Secured Parties (in such capacity, together with its successors and permitted assigns, the “Parity Lien Collateral Trustee”).

 

WHEREAS, the Grantors are party to that certain Parity Lien Debt Pledge and Security Agreement dated as of March 28, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “Pledge and Security Agreement”) between each of the Grantors and the other grantors party thereto and the Parity Lien Collateral Trustee pursuant to which the Grantors granted a security interest to the Parity Lien Collateral Trustee in the Copyright Collateral (as defined below) and are required to execute and deliver this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Grantors hereby agree with the Parity Lien Collateral Trustee as follows:

 

SECTION 1.        Defined Terms

 

Unless otherwise defined herein, terms defined in the Pledge and Security Agreement and used herein have the meaning given to them in the Pledge and Security Agreement.

 

SECTION 2.        Grant of Security Interest

 

Each Grantor hereby grants to the Parity Lien Collateral Trustee, for the benefit of the Secured Parties, a security interest in and continuing lien on all of such Grantor’s right, title and interest in, to and under the following, in each case whether now owned or existing or hereafter acquired, developed, created or arising and wherever located (collectively, the “Copyright Collateral”):

 

All of its United States copyrights, including but not limited to copyrights in software and databases, and all Mask Works (as defined under 17 U.S.C. § 901 of the U.S. Copyright Act), whether registered or unregistered, and, with respect to any and all of the foregoing: (i) all registrations and applications therefor including, without limitation, the registrations and applications listed in Schedule A attached hereto, (ii) all extensions and renewals thereof, (iii) all rights corresponding thereto, (iv) all rights to sue for past, present and future infringements thereof, and (v) all Proceeds of the foregoing, including, without limitation, royalties, income, payments, claims, damages and proceeds of suit.

 

SECTION 3.        Security Agreement

 

The security interest granted pursuant to this Agreement is granted in conjunction with the security interest granted to the Parity Lien Collateral Trustee for the Secured Parties pursuant to the Pledge and Security Agreement, and the Grantors hereby acknowledge and affirm that the rights and remedies of the Parity Lien Collateral Trustee with respect to the security interest in the

 

EXHIBIT E-1

 

Copyright Collateral made and granted hereby are more fully set forth in the Pledge and Security Agreement.  In the event that any provision of this Agreement is deemed to conflict with the Pledge and Security Agreement, the provisions of the Pledge and Security Agreement shall control.

 

SECTION 4.        Governing Law

 

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER (INCLUDING, WITHOUT LIMITATION, ANY CLAIMS SOUNDING IN CONTRACT LAW OR TORT LAW ARISING OUT OF THE SUBJECT MATTER HEREOF) SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK (OTHER THAN ANY MANDATORY PROVISIONS OF LAW RELATING TO THE LAW GOVERNING PERFECTION AND THE EFFECT OF PERFECTION OF THE SECURITY INTEREST).

 

SECTION 5.        Counterparts

 

This Agreement may be executed in one or more counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.

 

[Remainder of page intentionally left blank]

 

EXHIBIT E-2

 

IN WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above.

 

	
 
    	
[NAME OF GRANTOR]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[NAME OF GRANTOR]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

EXHIBIT E-3

 

	
Accepted   and Agreed:
    	
 
    
	
 
    	
 
    
	
LORD   SECURITIES CORPORATION,
    	
 
    
	
as Parity Lien   Collateral Trustee
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Authorized Signatory
    	
 
    

 

EXHIBIT E-4

 

SCHEDULE A
 to
 COPYRIGHT SECURITY AGREEMENT (PARITY LIEN)

 

COPYRIGHT REGISTRATIONS AND APPLICATIONS

 

	
Title
    	
 
    	
Application No.
    	
 
    	
Filing Date
    	
 
    	
Registration No.
    	
 
    	
Registration
   Date
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

EXHIBIT E-5Exhibit 10.5

 

Execution Version

 

 

COLLATERAL TRUST AGREEMENT

 

dated as of March 28, 2017

 

among

 

FORESIGHT ENERGY LLC,
  the other Grantors from time to time party hereto,

 

THE HUNTINGTON NATIONAL BANK,
 as Administrative Agent under the Credit Agreement,

 

WILMINGTON TRUST, NATIONAL ASSOCIATION,
 as Trustee under the Indenture

 

and

 

LORD SECURITIES CORPORATION,
 as Collateral Trustee

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE 1.
    	
DEFINITIONS; PRINCIPLES   OF CONSTRUCTION
    	
2
    
	
SECTION 1.1
    	
Defined Terms
    	
2
    
	
SECTION 1.2
    	
Other Definition   Provisions
    	
15
    
	
 
    	
 
    	
 
    
	
ARTICLE 2.
    	
THE TRUST ESTATES
    	
16
    
	
SECTION 2.1
    	
Declaration of Senior   Trust
    	
16
    
	
SECTION 2.2
    	
Declaration of Junior Trust
    	
18
    
	
SECTION 2.3
    	
Priority of Liens   between Classes
    	
19
    
	
SECTION 2.4
    	
Restrictions on   Enforcement of Parity Liens; Prohibition on Contesting Liens
    	
22
    
	
SECTION 2.5
    	
Waiver of Right of   Marshaling
    	
23
    
	
SECTION 2.6
    	
Discretion in   Enforcement of Priority Liens
    	
23
    
	
SECTION 2.7
    	
Amendments to Priority   Lien Documents and Discretion in Enforcement of Priority Lien Obligations
    	
23
    
	
SECTION 2.8
    	
Insolvency or   Liquidation Proceedings
    	
24
    
	
SECTION 2.9
    	
Collateral Shared   Equally and Ratably within Class
    	
28
    
	
SECTION 2.10
    	
No New Liens
    	
29
    
	
SECTION 2.11
    	
Similar Liens and   Agreements
    	
30
    
	
SECTION 2.12
    	
Confirmation of   Subordination in Parity Lien Security Documents
    	
30
    
	
 
    	
 
    	
 
    
	
ARTICLE 3.
    	
OBLIGATIONS AND POWERS   OF COLLATERAL TRUSTEE
    	
31
    
	
SECTION 3.1
    	
Appointment and   Undertaking of the Collateral Trustee
    	
31
    
	
SECTION 3.2
    	
Release or   Subordination of Liens
    	
32
    
	
SECTION 3.3
    	
Enforcement of Liens
    	
33
    
	
SECTION 3.4
    	
Application of Proceeds
    	
33
    
	
SECTION 3.5
    	
Powers of the   Collateral Trustee
    	
36
    
	
SECTION 3.6
    	
Documents and   Communications
    	
36
    
	
SECTION 3.7
    	
For Sole and Exclusive   Benefit of the Secured Parties
    	
36
    
	
SECTION 3.8
    	
Additional Secured Debt
    	
36
    
	
 
    	
 
    	
 
    
	
ARTICLE 4.
    	
OBLIGATIONS ENFORCEABLE   BY THE BORROWER AND THE OTHER GRANTORS
    	
39
    
	
 
    	
 
    	
 
    
	
SECTION 4.1
    	
Release of Liens on   Collateral
    	
39
    
	
SECTION 4.2
    	
Delivery of Copies to   Secured Debt Representatives
    	
42
    
	
SECTION 4.3
    	
Collateral Trustee not   Required to Serve, File or Record
    	
42
    
	
SECTION 4.4
    	
Release of Liens in   Respect of any Series of Priority Lien Debt, any Series of Parity   Lien Debt or Affiliate Securities
    	
42
    
	
 
    	
 
    	
 
    
	
ARTICLE 5.
    	
IMMUNITIES OF THE   COLLATERAL TRUSTEE
    	
44
    
	
SECTION 5.1
    	
No Implied Duty
    	
44
    
	
SECTION 5.2
    	
Appointment of Agents   and Advisors
    	
44
    
	
SECTION 5.3
    	
Other Agreements
    	
44
    
	
SECTION 5.4
    	
Solicitation of   Instructions
    	
44
    
	
SECTION 5.5
    	
Limitation of Liability
    	
44
    
				

 

i

 

	
SECTION 5.6
    	
Documents in   Satisfactory Form
    	
44
    
	
SECTION 5.7
    	
Entitled to Rely
    	
45
    
	
SECTION 5.8
    	
Secured Debt Default
    	
45
    
	
SECTION 5.9
    	
Actions by Collateral   Trustee
    	
45
    
	
SECTION 5.10
    	
Security or Indemnity   in favor of the Collateral Trustee
    	
45
    
	
SECTION 5.11
    	
Rights of the   Collateral Trustee
    	
45
    
	
SECTION 5.12
    	
Limitations on Duty of   Collateral Trustee in Respect of Collateral
    	
46
    
	
SECTION 5.13
    	
Assumption of Rights,   Not Assumption of Duties
    	
47
    
	
SECTION 5.14
    	
No Liability for Clean   Up of Hazardous Materials
    	
47
    
	
 
    	
 
    	
 
    
	
ARTICLE 6.
    	
RESIGNATION AND REMOVAL   OF THE COLLATERAL TRUSTEE
    	
47
    
	
SECTION 6.1
    	
Resignation or Removal   of Collateral Trustee
    	
47
    
	
SECTION 6.2
    	
Appointment of   Successor Collateral Trustee
    	
47
    
	
SECTION 6.3
    	
Succession
    	
48
    
	
SECTION 6.4
    	
Merger, Conversion or   Consolidation of Collateral Trustee
    	
48
    
	
 
    	
 
    	
 
    
	
ARTICLE 7.
    	
MISCELLANEOUS   PROVISIONS
    	
49
    
	
SECTION 7.1
    	
Amendment
    	
49
    
	
SECTION 7.2
    	
Voting
    	
50
    
	
SECTION 7.3
    	
Further Assurances
    	
51
    
	
SECTION 7.4
    	
Perfection of Junior   Trust Estate
    	
51
    
	
SECTION 7.5
    	
[Reserved]
    	
51
    
	
SECTION 7.6
    	
Successors and Assigns
    	
51
    
	
SECTION 7.7
    	
Delay and Waiver
    	
52
    
	
SECTION 7.8
    	
Notices
    	
52
    
	
SECTION 7.9
    	
Notice Following   Discharge of Priority Lien Obligations
    	
53
    
	
SECTION 7.10
    	
Entire Agreement
    	
53
    
	
SECTION 7.11
    	
Compensation; Expenses
    	
53
    
	
SECTION 7.12
    	
Indemnity
    	
54
    
	
SECTION 7.13
    	
Actions Upon Breach;   Specific Performance
    	
55
    
	
SECTION 7.14
    	
Severability
    	
55
    
	
SECTION 7.15
    	
Section Headings
    	
56
    
	
SECTION 7.16
    	
Obligations Secured
    	
56
    
	
SECTION 7.17
    	
Governing Law
    	
56
    
	
SECTION 7.18
    	
Consent to Jurisdiction
    	
56
    
	
SECTION 7.19
    	
Waiver of Jury Trial
    	
57
    
	
SECTION 7.20
    	
Counterparts
    	
57
    
	
SECTION 7.21
    	
Grantors and Additional   Grantors
    	
57
    
	
SECTION 7.22
    	
Continuing Nature of   this Agreement
    	
57
    
	
SECTION 7.23
    	
Insolvency
    	
58
    
	
SECTION 7.24
    	
Rights and Immunities   of Secured Debt Representatives
    	
58
    
				

 

EXHIBIT A — Additional Secured Debt Designation

EXHIBIT B — Form of Collateral Trust Joinder—Additional Secured Debt

EXHIBIT C — Form of Collateral Trust Joinder—Additional Grantors

 

ii

 

COLLATERAL TRUST AGREEMENT, (as amended, supplemented, amended and restated or otherwise modified from time to time, this “Agreement”) dated as of March 28, 2017 among FORESIGHT ENERGY LLC, a Delaware limited liability company (the “Borrower”), the Grantors from time to time party hereto, THE HUNTINGTON NATIONAL BANK, as Administrative Agent, WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee, and LORD SECURITIES CORPORATION, as Collateral Trustee (in such capacity and together with its successors in such capacity, the “Collateral Trustee”).

 

W I T N E S S E T H:

 

WHEREAS, the Borrower intends to enter into a Credit and Guaranty Agreement dated as of the date hereof (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, including any replacement thereof if such replacement credit agreement has been designated in accordance Section 3.8 hereof, the “Credit Agreement”) among the Borrower, the Affiliates of the Borrower named therein, the Lenders party thereto, The Huntington National Bank, as facilities administrative agent (in such capacity and together with its successors, the “Administrative Agent”), Lord Securities Corporation, as term administrative agent, and the lenders party thereto, which will provide for a $995,000,000 senior secured credit facilities as of the date hereof.

 

WHEREAS, the Borrower intends to issue 11.50% Second Lien Senior Secured Notes due 2023 (including any related exchange notes, the “Notes”) in an aggregate principal amount of $425,000,000 pursuant to an Indenture dated as of the date hereof (as amended, restated, amended and restated, supplemented or otherwise modified and in effect from time to time, the “Indenture”) among the Borrower, Foresight Energy Finance Corporation, a Delaware corporation, a co-issuer of the Notes, the guarantors party thereto and Wilmington Trust, National Association, as trustee (in such capacity and together with its successors in such capacity, the “Trustee”).

 

WHEREAS, the Borrower and the other Grantors intend to secure the Obligations under the Credit Agreement, any future Priority Lien Debt and any other Priority Lien Obligations on a priority basis and, subject to such priority, intend to secure the Obligations under the Indenture, any future Parity Lien Debt and any other Parity Lien Obligations, with Liens on all present and future Collateral to the extent that such Liens have been provided for in the applicable Security Documents.

 

WHEREAS, this Agreement sets forth the terms on which each Secured Party has appointed the Collateral Trustee to act as the collateral trustee for the present and future holders of the Secured Obligations to receive, hold, maintain, administer and distribute the Collateral at any time delivered to the Collateral Trustee or the subject of the Security Documents, and to enforce the Security Documents and all interests, rights, powers and remedies of the Collateral Trustee with respect thereto or thereunder and the proceeds thereof.

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:

 

 

ARTICLE 1.         DEFINITIONS; PRINCIPLES OF CONSTRUCTION

 

SECTION 1.1               Defined Terms.  The following terms will have the following meanings:

 

“Act of Required Secured Parties” means, as to any matter at any time:

 

(i)  until the earlier of (x) the Discharge of Credit Agreement Obligations and (y) the Outstanding Loan Threshold Date, a direction in writing delivered to the Collateral Trustee by or with the written consent of, the Required Lenders;

 

(ii) from and after the earlier of (x) the Discharge of Credit Agreement Obligations and (y) the Outstanding Loan Threshold Date, but prior to the Discharge of Priority Lien Obligations, a direction in writing delivered to the Collateral Trustee by or with the written consent of, the holders of (or the Priority Lien Representatives representing the holders of) more than 50% of the sum of:

 

(a)    the aggregate outstanding principal amount of Priority Lien Debt (including the face amount of outstanding letters of credit whether or not then available or drawn); and

 

(b)    other than in connection with the exercise of remedies, the aggregate unfunded commitments to extend credit which, when funded, would constitute Priority Lien Debt;

 

provided, however, that if at any time prior to the Discharge of Priority Lien Obligations the only remaining Priority Lien Obligations are Secured Hedging Obligations, then the term “Act of Required Secured Parties” will mean the representatives representing the holders of a majority of the aggregate of the Hedging Termination Value or “settlement amount” (or similar term) as defined in the Secured Hedging Agreements (or, with respect to any Secured Hedging Agreement that has been terminated in accordance with its terms, the amount, if any, then due and payable by the Borrower or any other Grantor (exclusive of expenses and similar payments but including any early termination payments then due) under such Secured Hedging Agreement) under all Secured Hedging Agreements; provided further, that any Secured Hedging Agreement with a the Hedging Termination Value or “settlement amount” (or similar term) or termination payment that is a negative number shall be disregarded for purposes of all calculations required by the term “Act of Required Secured Parties;”  and

 

(iii) at any time after the Discharge of Priority Lien Obligations, a direction in writing delivered to the Collateral Trustee by or with the written consent of the Parity Lien Representatives representing the holders of Parity Lien Debt representing the Required Parity Lien Debtholders.

 

For purposes of this definition, (a) Secured Debt registered in the name of, or beneficially owned by, the Borrower or any Affiliate of the Borrower will be deemed not to be outstanding and neither the Borrower nor any Affiliate of the Borrower will be entitled to vote such Secured Debt

 

2

 

and (b) votes will be determined in accordance with Section 7.2.  The Collateral Trustee will not be deemed to have knowledge thereof, unless it receives written notice thereof.

 

“Additional Secured Debt” has the meaning set forth in Section 3.8(b)(1).

 

“Additional Secured Debt Designation” means a notice in substantially the form of Exhibit A.

 

“Administrative Agent” has the meaning set forth in the recitals and its permitted successors and assigns or, in the case of any replacement Credit Agreement designated as such in accordance with Section 3.8 hereof, the administrative agent or other representative under such replacement Credit Agreement.

 

“Affiliate” means, with respect to a specified Person, any other Person that, directly or indirectly, Controls, or is Controlled by or is under common Control with the Person specified or is a director or officer of the Person specified.

 

“Affiliate Securities” means all “securities” of any of the Borrower’s “affiliates” (as the terms “securities” and “affiliates” are used in Rule 3-16 of Regulation S-X under the Securities Act of 1933, as amended, and any successor rule) including any securities described in Section 4.4(c) hereof.

 

“Agreement” shall mean this Collateral Trust Agreement, as the same may be amended, restated, supplemented, or otherwise modified from time to time.

 

“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, or any successor statute.

 

“Board of Directors” means (a) with respect to the Borrower, the board of directors of the General Partner and (b) with respect to any other Person, (i) if a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board, (ii) if a partnership, if the general partner of the partnership is a corporation, the board of directors of the general partner of the partnership and if the general partner of the partnership is a limited liability company, the managing member or members or any controlling committee of managing members thereof of such general partner, and (iii) if any other Person, the board or committee of such Person serving a similar function.

 

“Borrower” has the meaning set forth in the preamble.

 

“Business Day” means any day other than a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a place of payment of any applicable Secured Obligations are authorized or required by law or other governmental action to remain closed.

 

“Cash Management Bank” means the counterparty to the Borrower or any Restricted Subsidiary of the Borrower under any Secured Cash Management Agreement.

 

“Class” means (1) in the case of Parity Lien Obligations, every Series of Parity Lien Debt and all other Parity Lien Obligations, taken together, and (2) in the case of Priority Lien

 

3

 

Obligations, every Series of Priority Lien Debt and all other Priority Lien Obligations, taken together.

 

“Collateral” means, in the case of each Series of Secured Debt, all properties and assets of the Borrower and the other Grantors now owned or hereafter acquired in which Liens have been granted, or purported to be granted, or required to be granted, to the Collateral Trustee to secure any or all of the Secured Obligations of such Series of Secured Debt, including any property subject to Liens granted pursuant to Section 2.8, and shall exclude any properties and assets in which the Collateral Trustee is required to release its Liens pursuant to Section 3.2.  Notwithstanding anything in this Agreement to the contrary, Holdings shall not provide any Collateral to secure the Parity Lien Obligations or with respect to the Junior Trust Estate unless the Borrower, at its sole discretion, provides notice to the Collateral Trustee that a Series of Parity Lien Obligations shall be secured by Collateral of Holdings.

 

“Collateral Trustee” has the meaning set forth in the preamble.

 

“Collateral Trust Joinder” means (i) with respect to the provisions of this Agreement relating to any Additional Secured Debt, an agreement substantially in the form of Exhibit B and (ii) with respect to the provisions of this Agreement relating to the addition of additional Grantors, an agreement substantially in the form of Exhibit C.

 

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

 

“Controlling Priority Lien Representative” means (i) until the earlier of (x) the Discharge of Credit Agreement Obligations and (y) the Outstanding Loan Threshold Date, the Administrative Agent and (ii) from and after the earlier of (x) the Discharge of Credit Agreement Obligations and (y) the Outstanding Loan Threshold Date, the Major Non-Controlling Priority Representative.

 

“Controlling Representative” means at any time (i) prior to the Discharge of Priority Lien Obligations, the Controlling Priority Lien Representative and (ii) after the Discharge of Priority Lien Obligations, the Parity Lien Representative that represents the Series of Parity Lien Debt with the then largest outstanding principal amount.

 

“Credit Agreement” has the meaning set forth in the recitals, as amended, amended and restated, supplemented and otherwise modified from time to time.

 

“Credit Facility” means, if designated by the Borrower to be included in this definition, one or more credit facilities or commercial paper facilities with banks, financial institutions or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or the issuance of letters of credit or bankers’ acceptances or the like, (ii) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments), or (iii) instruments or agreements evidencing any other Debt, in each case, with the same or different borrowers or issuers and, in each case, as

 

4

 

amended, restated, modified, supplemented, extended, renewed, refunded, restructured, refinanced or replaced or substituted in whole or in part from time to time and whether by the same or any other agent, trustee, lender or group of lenders or other party, including any refinancing that has been designated in accordance with Section 3.8 hereof.  The Credit Agreement is a Credit Facility.

 

“DIP Financing” has the meaning set forth in Section 2.8(a).

 

“Discharge of Credit Agreement Obligations” means that the Priority Lien Obligations pursuant to the Credit Agreement (other than Secured Hedging Obligations and Secured Cash Management Obligations and any obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities in respect of which no claim or demand for payment has been made at such time) are no longer secured by, and no longer required to be secured by, the Collateral pursuant to the terms of the Credit Agreement or the other applicable Priority Lien Documents; provided that a Discharge of Credit Agreement Obligations shall be deemed not to have occurred if the Borrower has entered into any replacement credit agreement that has been designated as such in accordance with Section 3.8 hereof.

 

“Discharge of Priority Lien Obligations” means the occurrence of all of the following:

 

(i)  termination or expiration of all commitments to extend credit that would constitute Priority Lien Debt;

 

(ii)     with respect to each Series of Priority Lien Debt, either (x) payment in full in cash of the principal of and interest and premium (if any) on all Priority Lien Debt of such Series (other than any undrawn letters of credit) or (y) there has been a legal defeasance, covenant defeasance or satisfaction and discharge pursuant to the terms of the applicable Priority Lien Debt Documents for such Series of Priority Lien Debt;

 

(iii)    with respect to any undrawn letters of credit constituting Priority Lien Debt, either (x) discharge or cash collateralization (at the lower of (A) 105% of the aggregate undrawn amount and (B) the percentage of the aggregate undrawn amount required for release of liens under the terms of the applicable Priority Lien Document) of all outstanding letters of credit constituting Priority Lien Debt or (y) the issuer of each such letter of credit has notified the Collateral Trustee in writing that alternative arrangements satisfactory to such issuer and to the holders of the related Series of Priority Lien Debt that has reimbursement obligations with respect thereto have been made;

 

(iv) payment in full in cash of all other Priority Lien Obligations (other than Secured Hedging Obligations) that are outstanding and unpaid at the time the Priority Lien Debt is paid in full in cash (other than any obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities in respect of which no claim or demand for payment has been made at such time); and

 

(v) with respect to any Secured Hedging Obligations, (A) the cash collateralization of all such Secured Hedging Obligations on terms satisfactory to each applicable Hedge Bank or the making of such other arrangements satisfactory to the applicable Hedge Bank or (B) the expiration and termination of all Secured Hedging

 

5

 

Agreements evidencing such Secured Hedging Obligations and payment in full in cash of all Secured Hedging Obligations due and payable after giving effect to such expiration and termination;

 

provided, however, that if, at any time after the Discharge of Priority Lien Obligations has occurred, the Borrower thereafter enters into any Priority Lien Document evidencing a Priority Lien Debt the incurrence of which is not prohibited by any applicable Secured Debt Document, then such Discharge of Priority Lien Obligations shall automatically be deemed not to have occurred for all purposes of this Agreement with respect to such new Priority Lien Debt (other than with respect to any actions taken as a result of the occurrence of such first Discharge of Priority Lien Obligations), and, from and after the date on which the Borrower designates such Funded Debt as Priority Lien Debt in accordance with Section 3.8, the Obligations under such Priority Lien Document shall automatically and without any further action be treated as Priority Lien Obligations for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Collateral set forth herein and any Parity Lien Obligations shall be deemed to have been at all times Parity Lien Obligations and at no time Priority Lien Obligations.

 

“Funded Debt”  means, with respect to any specified Person, any indebtedness of such Person (excluding accrued expenses and trade payables), whether or not contingent:

 

(1)       in respect of borrowed money or advances; or

 

(2)       evidenced by loan agreements, bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof).

 

For the avoidance of doubt, “Funded Debt” shall not include Secured Hedging Obligations or Secured Cash Management Obligations.

 

“General Partner” means Foresight Energy GP, LLC, a Delaware limited liability company, and any successor (by merger, consolidation, amalgamation or otherwise) general partner of Holdings.

 

“Grantors” means the Borrower, the Guarantors, and any other Person (if any) that at any time provides collateral security for any Secured Obligations (it being understood and agreed that Holdings shall be a Grantor with respect to Priority Lien Obligations but not a Grantor with respect to Parity Lien Obligations unless the Borrower, at its sole discretion, provides notice to the Collateral Trustee that a Series of Parity Lien Obligations shall be secured by Collateral of Holdings).

 

“Guarantee” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner including, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Funded Debt (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take or pay or to maintain financial statement conditions or otherwise).

 

6

 

“Guarantor” means, with respect to any Priority Lien Obligations, each Person who has Guaranteed payment of any Priority Lien Obligations and, with respect to any Parity Lien Obligations, each Person who has Guaranteed payment of any Parity Lien Obligations (it being understood and agreed that Holdings shall be a Guarantor with respect to Priority Lien Obligations but not a Guarantor with respect to Parity Lien Obligations unless the Borrower, at its sole discretion, provides notice to the Collateral Trustee that a Series of Parity Lien Obligations shall be guaranteed by Holdings).

 

“Hedge Bank” means the counterparty to the Borrower or any Restricted Subsidiary of the Borrower under any Secured Hedging Agreement.

 

“Hedging Termination Value” has the meaning ascribed to such term in the Credit Agreement.

 

“Holdings” means Foresight Energy LP, a Delaware limited partnership, and any successor to Holdings by merger, consolidation, amalgamation or otherwise.

 

“Indemnified Liabilities” means any and all liabilities (including all environmental liabilities), obligations, losses, damages, penalties, actions, judgments, suits, costs, taxes, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, performance, administration or enforcement of this Agreement or any of the other Security Documents, including any of the foregoing relating to the use of proceeds of any Secured Debt or the violation of, noncompliance with or liability under, any law (including environmental laws) applicable to or enforceable against the Borrower, any of its Subsidiaries or any other Grantor or any of the Collateral and all reasonable costs and expenses (including reasonable fees and expenses of legal counsel selected by the Indemnitee) incurred by any Indemnitee in connection with any claim, action, investigation or proceeding in any respect relating to any of the foregoing, whether or not suit is brought.

 

“Indemnitee” has the meaning set forth in Section 7.12(a).

 

“Indenture” has the meaning set forth in the recitals.

 

“Insolvency or Liquidation Proceeding” means:

 

(1) any voluntary or involuntary case commenced by or against the Borrower or any other Grantor under the Bankruptcy Code or any similar federal or state law for the relief of debtors, any other proceeding for the reorganization, recapitalization, receivership, liquidation or adjustment or marshalling of the assets or liabilities of the Borrower or any other Grantor, any receivership or assignment for the benefit of creditors relating to the Borrower or any other Grantor or any similar case or proceeding relative to the Borrower or any other Grantor or its creditors, as such, in each case whether or not voluntary;

 

(2)    any liquidation, dissolution, marshalling of assets or liabilities or other winding up of or relating to the Borrower or any other Grantor, in each case whether or not voluntary and whether or not involving bankruptcy or insolvency; or

 

7

 

(3) any other proceeding of any type or nature in which substantially all claims of creditors of the Borrower or any other Grantor are determined and any payment or distribution is or may be made on account of such claims.

 

“Junior Trust Estate” has the meaning set forth in Section 2.2.

 

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any capital lease having substantially the same economic effect as any of the foregoing).

 

“Major Non-Controlling Priority Representative” means (i) prior to an Outstanding Loan Threshold Date, the Priority Lien Representative of a Series of Priority Lien Debt (other than the Administrative Agent with respect to the Priority Lien Debt pursuant to the Credit Agreement) that constitutes the largest outstanding principal amount of any then outstanding Series of Priority Lien Debt (provided, however, that if there are two outstanding Series of Priority Lien Debt which have an equal outstanding principal amount, the Series of Priority Lien Debt with the earlier maturity date shall be considered to have the larger outstanding principal amount for purposes of this clause (i)) and (ii) on or after an Outstanding Loan Threshold Date, the Priority Lien Representative of the Series of Priority Lien Debt that constitutes the largest outstanding principal amount of any then outstanding Series of Priority Lien Debt (provided, however, that if there are two outstanding Series of Priority Lien Debt which have an equal outstanding principal amount, the Series of Priority Lien Debt with the earlier maturity date shall be considered to have the larger outstanding principal amount for purposes of this clause (ii)).  For purposes of this definition, “principal amount” shall be deemed to include the face amount of any outstanding letter of credit issued and unused commitments under the particular Series.

 

“Modification” has the meaning set forth in Section 3.8(d)(1).

 

“Mortgage” has the meaning set forth in Section 3.8(d)(1).

 

“Mortgaged Property” has the meaning set forth in Section 3.8(d)(1).

 

“Notes” has the meaning set forth in the recitals.

 

“Note Documents” means the Indenture, the Notes and the Parity Lien Security Documents securing the Obligations in respect thereof.

 

“Obligations” means any principal (including reimbursement obligations with respect to letters of credit whether or not drawn), interest (at the rate specified in the applicable Secured Debt Documents, including any applicable post-default rate), premium (if any), fees, indemnifications, reimbursements, expenses and other charges and liabilities payable under the documentation governing any Secured Obligations, including any and all interest, premium, fees, indemnifications, reimbursements, expenses and other charges and liabilities accruing or incurred after the commencement of any Insolvency or Liquidation Proceeding pursuant to the

 

8

 

applicable Secured Debt Documents, even if any of the foregoing is not enforceable, allowable or allowed as a claim in such proceeding.

 

“Officer” means, with respect to any person, the Chairman of the Board of Directors, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary, any Senior Vice President, any Vice President or any Assistant Vice President of such Person or any parent thereof.

 

“Officer’s Certificate” means a certificate with respect to compliance with a condition or covenant provided for in this Agreement, signed on behalf of the Borrower by an Officer of the Borrower, including:

 

(a) a statement that the Person making such certificate has read such covenant or condition; and

 

(b)     a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied.

 

“Outstanding Loan Threshold Date” means the date that both (x) the outstanding principal amount of, without duplication, Loans, L/C Obligations and unused Revolving Loan Commitments (each as defined in the Credit Agreement) under the Credit Agreement (or the aggregate outstanding principal amount of all loans or other evidences of indebtedness, issued and outstanding letters of credit and commitments in respect thereof under any replacement Credit Agreement designated as such in accordance with Section 3.8) is less than 15% of the aggregate outstanding principal amount of all Priority Lien Debt and (y) the aggregate outstanding principal amount of another Series of Priority Lien Debt exceeds the outstanding principal amount of, without duplication, Loans. L/C Obligations and unused Revolving Loan Commitments under the Credit Agreement.

 

“Parity Lien” means a Lien granted, or purported to be granted, by a Security Document to the Collateral Trustee, at any time, upon any property of the Borrower or any other Grantor to secure Parity Lien Obligations.

 

“Parity Lien Adequate Protection Payments” has the meaning set forth in Section 2.8(c).

 

“Parity Lien Debt” means:

 

(1) the Notes issued on the date hereof until such time as the Liens securing such Debt are released in accordance with their respective terms; and

 

(2) any other Funded Debt (including additional Notes) that is secured equally and ratably with the Notes by a Parity Lien and that was permitted to be incurred and permitted to be so secured under each applicable Secured Debt Document; provided, in the case of any Funded Debt referred to in clause (2) of this definition, that:

 

(a)    on or before the date on which such Funded Debt is incurred by the Borrower or by a Grantor, such Funded Debt is designated by the Borrower as “Parity Lien Debt” for the purposes of the Secured Debt Documents in an

 

9

 

Additional Secured Debt Designation executed and delivered in accordance with Section 3.8; provided, that no Funded Debt may be designated as both Parity Lien Debt and Priority Lien Debt; and

 

(b)  unless such Funded Debt is issued under an existing Secured Debt Document for any Series of Parity Lien Debt whose Secured Debt Representative is already party to this Agreement, the Parity Lien Representative for such Funded Debt executes and delivers a Collateral Trust Joinder in accordance with Section 3.8(b).

 

“Parity Lien Documents” means, collectively, the Note Documents and any other indenture, credit agreement or other agreement pursuant to which any Parity Lien Debt is incurred and the Parity Lien Security Documents.

 

“Parity Lien Obligations” means Parity Lien Debt and all other Obligations in respect thereof including, without limitation interest and premium (if any) (including Post-Petition Interest whether or not allowable), and all guarantees of any of the foregoing.

 

“Parity Lien Representative” means:

 

(1) in the case of the Notes, the Trustee; and

 

(2)     in the case of any other Series of Parity Lien Debt, the trustee, agent or representative of the holders of such Series of Parity Lien Debt who maintains the transfer register for such Series of Parity Lien Debt and (A) is appointed as a Parity Lien Representative (for purposes related to the administration of the Security Documents) pursuant to the indenture, credit agreement or other agreement governing such Series of Parity Lien Debt, together with its successors in such capacity, and (B) who has executed a Collateral Trust Joinder, together with its successor in such capacity.

 

“Parity Lien Secured Parties” means the holders of Parity Lien Obligations and each Parity Lien Representative.

 

“Parity Lien Security Documents” means all security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust, collateral agency agreements, control agreements or other grants or transfers for security executed and delivered by the Borrower or any other Grantor creating (or purporting to create) a Lien upon Collateral in favor of the Collateral Trustee, for the benefit of any of the Parity Lien Secured Parties, in each case, as amended, modified, renewed, restated or replaced, in whole or in part, from time to time, in accordance with its terms and Section 7.1.

 

“Pay-Over Amount” has the meaning set forth in Section 2.8(c).

 

“Permitted Prior Lien” means any Lien that has priority over the Lien of the Collateral Trustee for the benefit of the Priority Lien Secured Parties which Lien was permitted under each Priority Lien Document.

 

10

 

“Person” means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity, including a government or political subdivision or an agency or instrumentality thereof.

 

“Post-Petition Interest” means interest, fees, expenses and other charges that pursuant to the Priority Lien Documents or Parity Lien Documents, as applicable, continue to accrue after the commencement of any Insolvency of Liquidation Proceeding, whether or not such interest, fees, expenses and other charges are allowed or allowable under the Bankruptcy Code or in any such Insolvency or Liquidation Proceeding.

 

“Priority Lien” means a Lien granted, or purported to be granted, by a Security Document to the Collateral Trustee, at any time, upon any property of the Borrower or any other Grantor to secure Priority Lien Obligations.

 

“Priority Lien Debt” means:

 

(1)                                 any Funded Debt now or hereafter incurred under the Credit Agreement that is secured by a Priority Lien and that is permitted to be incurred and secured under each applicable Secured Debt Document; and

 

(2)                                 any other Funded Debt (including, without limitation (x) Funded Debt incurred under any replacement Credit Agreement and (y) borrowings under any other Credit Facility) that is secured by a Priority Lien and that is permitted to be incurred and permitted to be so secured under each applicable Secured Debt Document; provided, in the case of any Funded Debt referred to in this clause (2), that:

 

(a)            on or before the date on which such Funded Debt is incurred by the Borrower or by a Grantor, such Funded Debt is designated by the Borrower as “Priority Lien Debt” for the purposes of the Secured Debt Documents in an Additional Secured Debt Designation executed and delivered in accordance with Section 3.8(b); provided, that no Funded Debt may be designated as both Parity Lien Debt and Priority Lien Debt; and

 

(b)            unless such Funded Debt is issued under an existing Secured Debt Document for any Series of Priority Lien Debt whose Secured Debt Representative is already party to this Agreement, the Priority Lien Representative for such Funded Debt executes and delivers a Collateral Trust Joinder in accordance with Section 3.8(b).

 

For the avoidance of doubt, Secured Hedging Obligations and Secured Cash Management Obligations do not constitute Priority Lien Debt but constitute Priority Lien Obligations. Secured Hedging Obligations and Secured Cash Management Obligations that are contemplated to be secured pursuant to the provisions of the Priority Lien Documents (excluding, for the purposes of this sentence, any Priority Lien Security Documents) with respect a specific Series of Priority Lien Debt shall be “related to” such Series of Priority Lien Debt for purposes of this Agreement.

 

11

 

“Priority Lien Documents” means, collectively, the Credit Agreement and any other indenture, credit agreement or other agreement pursuant to which any Priority Lien Debt is incurred and the Priority Lien Security Documents.

 

“Priority Lien Obligations” means the Priority Lien Debt and all other Obligations in respect of Priority Lien Debt, including without limitation any Post-Petition Interest whether or not allowable, together with all Secured Hedging Obligations and Secured Cash Management Obligations and all guarantees of any of the foregoing.  In addition to the foregoing, all obligations owing to the Collateral Trustee in its capacity as such, whether pursuant to this Agreement or one or more of the Priority Lien Documents or Parity Lien Documents, shall in each case be deemed to constitute Priority Lien Obligations (with the obligations described in this sentence being herein the “Collateral Trustee Obligations”), which Collateral Trustee Obligations shall be entitled to the priority provided in clause FIRST of Section 3.4(a).

 

“Priority Lien Representative” means:

 

(a) in the case of the Credit Agreement, the Administrative Agent; and

 

(b) in the case of any other Series of Priority Lien Debt, the trustee, agent or representative of the holders of such Series of Priority Lien Debt who maintains the transfer register for such Series of Priority Lien Debt and is appointed as a representative of the Priority Lien Debt (for purposes related to the administration of the Security Documents) pursuant to the indenture, credit agreement or other agreement governing such Series of Priority Lien Debt, and who has executed a Collateral Trust Joinder, together with any successor in such capacity.

 

“Priority Lien Secured Parties” means the holders of Priority Lien Obligations, each Priority Lien Representative and the Collateral Trustee.

 

“Priority Lien Security Documents” means all security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust, collateral agency agreements, control agreements or other grants or transfers for security executed and delivered by the Borrower or any other Grantor creating (or purporting to create) a Lien upon Collateral in favor of the Collateral Trustee, for the benefit of any of the Priority Lien Secured Parties, in each case, as amended, modified, renewed, restated or replaced, in whole or in part, from time to time, in accordance with its terms and Section 7.1.

 

“Real Property” means, collectively, all right, title and interest (including any leasehold or mineral estate) in and to any and all parcels of real property owned or operated, whether by lease, license or other use agreement, including but not limited to, Mortgaged Property, coal leases and surface use agreements.

 

“Recovery” has the meaning set forth in Section 2.8(f).

 

“Reference Date” has the meaning set forth in Section 3.8(e).

 

12

 

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, members, directors, officers, trustees, employees, agents, attorneys, advisors or controlling persons of such Person and of such Person’s Affiliates.

 

“Required Lenders” means the “Required Lenders” (or an equivalent term with substantially the same meaning) under and as defined in the Credit Agreement.

 

“Required Parity Lien Debtholders” means, at any time, the holders of a majority in aggregate principal amount of all Parity Lien Debt then outstanding, calculated in accordance with the provisions of Section 7.2.  For purposes of this definition, Parity Lien Debt registered in the name of, or beneficially owned by, the Borrower or any Affiliate of the Borrower (as certified in writing to the Collateral Trustee by the applicable Secured Debt Representative (other than the Trustee) or by the Borrower in the case of the Indenture) will be deemed not to be outstanding and neither the Borrower nor any Affiliate of the Borrower will be entitled to vote any of the Parity Lien Debt.

 

“Secured Cash Management Agreement” means any agreement to provide any of the following services: (a) the execution or processing of electronic transfers of funds by automated clearing house transfer, wire transfer or otherwise to or from the deposit accounts of the Borrower and/or any Restricted Subsidiary of the Borrower, (b) the acceptance for deposit or the honoring for payment of any check, draft or other item with respect to any such deposit accounts, (c) any other treasury, deposit, disbursement, overdraft, and cash management services afforded to the Borrower or any Restricted Subsidiary of the Borrower, and (d) stored value card, commercial credit card and merchant card services, in each case, that is secured under the Priority Lien Documents.

 

“Secured Cash Management Obligations” means all debts, liabilities and obligations of the Borrower or any Restricted Subsidiary of the Borrower in respect of any Secured Cash Management Agreement.

 

“Secured Debt” means Parity Lien Debt and Priority Lien Debt.

 

“Secured Debt Default” means any event or condition that, under the terms of any credit agreement, indenture or other agreement governing any Series of Secured Debt causes, or permits holders of Secured Debt outstanding thereunder (with or without the giving of notice or lapse of time, or both, and whether or not notice has been given or time has lapsed) to cause, the Secured Debt outstanding thereunder to become immediately due and payable.

 

“Secured Debt Documents” means the Parity Lien Documents and the Priority Lien Documents.

 

“Secured Debt Representative” means each Parity Lien Representative and each Priority Lien Representative.

 

“Secured Hedging Agreement” means (A) any Specified Secured Hedging Agreement and (B) (i) any interest rate swap agreement, interest rate cap agreement, interest rate future agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement designed to protect against or mitigate interest rate risk, (ii) any

 

13

 

foreign exchange forward contract, currency swap agreement, futures contract, option contract, synthetic cap or other agreement or arrangement designed to protect against or mitigate foreign exchange risk or (iii) any commodity or raw material, including coal, futures contract, commodity hedge agreement, option agreement, any actual or synthetic forward sale contract or other similar device or instrument or any other agreement designed to protect against or mitigate commodity price exposure or raw material price risk (which shall for the avoidance of doubt include any forward purchase and sale of coal for which full or partial payment is required or received), in each case, that is secured under the Priority Lien Documents.

 

“Secured Hedging Obligations” means all debts, liabilities and obligations of the Borrower or any Restricted Subsidiary of the Borrower in respect of any Secured Hedging Agreement.

 

“Secured Obligations” means Parity Lien Obligations and Priority Lien Obligations.

 

“Secured Parties” means the holders of Secured Obligations, the Secured Debt Representatives and the Collateral Trustee.

 

“Security Documents” means this Agreement, any applicable intercreditor agreement, each Collateral Trust Joinder, each Priority Lien Security Document and each Parity Lien Security Document, in each case, as amended, modified, renewed, restated or replaced, in whole or in part, from time to time, in accordance with its terms and Section 7.1.

 

“Senior Trust Estate” has the meaning set forth in Section 2.1.

 

“Series of Parity Lien Debt” means, severally, the Notes and each other issue or series of Parity Lien Debt for which a single transfer register is maintained.  For the avoidance of doubt, all reimbursement obligations in respect of letters of credit issued pursuant to a Parity Lien Document shall be part of the same Series of Parity Lien Debt as all other Parity Lien Debt incurred pursuant to such Parity Lien Document.

 

“Series of Priority Lien Debt” means, severally, Funded Debt under the Credit Agreement and each other issue or series of Priority Lien Debt for which a single transfer register is maintained.  For the avoidance of doubt, all reimbursement obligations in respect of letters of credit issued pursuant to a Priority Lien Document shall be part of the same Series of Priority Lien Debt as all other Priority Lien Debt incurred pursuant to such Priority Lien Document.

 

“Series of Secured Debt” means, severally, each Series of Priority Lien Debt and each Series of Parity Lien Debt.

 

“Short Fall” has the meaning set forth in Section 2.8(c).

 

“Specified Secured Hedging Agreement” has the meaning assigned to the defined term “Secured Hedging Agreement” in the Credit Agreement.

 

“Standstill Period” has the meaning set forth in Section 2.4(a).

 

14

 

“Subsidiary” means with respect to any Person, any corporation, association, limited liability company or other business entity of which more than 50% of the outstanding Voting Stock is owned, directly or indirectly, by, or, in the case of a partnership, the sole general partner or the managing partner or the only general partners of which are, such Person and one or more Subsidiaries of such Person (or a combination thereof). Unless otherwise specified, “Subsidiary” means a Subsidiary of the Borrower..

 

“Trustee” has the meaning set forth in the recitals.

 

“Trust Estates” has the meaning set forth in Section 2.2.

 

“UCC”  means the Uniform Commercial Code as in effect from time to time in the State of New York; provided, however, that in the event that, by reason of mandatory provisions of law, any or all of the perfection or priority of, or remedies with respect to, any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions hereof relating to such perfection, priority or remedies.

 

“Voting Stock” means, with respect to any Person, Capital Stock of any class or kind ordinarily having the power to vote for the election of directors, managers or other voting members of the governing body of such Person.

 

SECTION 1.2                                             Other Definition Provisions.

 

(a)                                 The words “hereof,” “herein,” “hereto” 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, Schedule, Exhibit and Annex references, are to this Agreement unless otherwise specified.  References to any Schedule, Exhibit or Annex shall mean such Schedule, Exhibit or Annex as amended or supplemented from time to time in accordance with this Agreement.

 

(b)                                 The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

 

(c)                                  The expressions “payment in full,” “paid in full” and any other similar terms or phrases when used herein shall mean payment in cash in immediately available funds.

 

(d)                                 The use herein of the word “include” or “including,” when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter.

 

15

 

(e)                                  All references herein to provisions of the UCC shall include all successor provisions under any subsequent version or amendment to any Article of the UCC.

 

(f)                                   All terms used in this Agreement that are defined in Article 9 of the UCC and not otherwise defined herein have the meanings assigned to them in Article 9 of the UCC.

 

(g)                                  Notwithstanding anything to the contrary in this Agreement, any references contained herein to any section, clause, paragraph, definition or other provision of the Indenture (including any definition contained therein) shall be deemed to be a reference to such section, clause, paragraph, definition or other provision as in effect on the date of this Agreement; provided, that any reference to any such section, clause, paragraph or other provision shall refer to such section, clause, paragraph or other provision of the Indenture (including any definition contained therein) as amended or modified from time to time if such amendment or modification has been (1) made in accordance with the Indenture and (2) prior to the Discharge of Priority Lien Obligations, approved in a writing delivered to the Trustee and the Collateral Trustee by, or on behalf of, the requisite Priority Lien Secured Parties as are needed (if any) under the terms of the applicable Priority Lien Documents to approve such amendment or modification.  Unless otherwise set forth herein, references to principal amount shall include, without duplication, any reimbursement obligations with respect to a letter or credit and the face amount thereof (whether or not such amount is, at the time of determination, drawn or available to be drawn).

 

This Agreement and the other Security Documents will be construed without regard to the identity of the party who drafted it and as though the parties participated equally in drafting it.  Consequently, each of the parties acknowledges and agrees that any rule of construction that a document is to be construed against the drafting party will not be applicable either to this Agreement or the other Security Documents.

 

ARTICLE 2.                                              THE TRUST ESTATES

 

SECTION 2.1                                             Declaration of Senior Trust.

 

To secure the payment of the Priority Lien Obligations and in consideration of the premises and mutual agreements set forth in this Agreement, each of the Grantors hereby confirms the grant to the Collateral Trustee, and the Collateral Trustee hereby accepts and agrees to hold, in trust under this Agreement for the benefit of all current and future Priority Lien Secured Parties, all of such Grantor’s right, title and interest in, to and under all Collateral now or hereafter granted to the Collateral Trustee under any Priority Lien Security Document for the equal and ratable benefit of the Priority Lien Secured Parties, together with all of the Collateral Trustee’s right, title and interest in, to and under the Priority Lien Security Documents, and all interests, rights, powers and remedies of the Collateral Trustee thereunder or in respect thereof and all cash and non-cash proceeds thereof (collectively, the “Senior Trust Estate”).

 

The Collateral Trustee and its successors and assigns under this Agreement will hold the Senior Trust Estate in trust for the benefit solely and exclusively of all current and future Priority Lien Secured Parties as security for the payment of all present and future Priority Lien Obligations.

 

16

 

Notwithstanding the foregoing, if at any time:

 

(1) all Liens securing the Priority Lien Obligations have been released as provided in Section 4.1;

 

(2) the Collateral Trustee holds no other property in trust as part of the Senior Trust Estate;

 

(3)    no monetary obligation (other than indemnification and other contingent obligations for which no claim or demand for payment, whether oral or written, has been made at such time) is outstanding and payable under this Agreement to the Collateral Trustee or any of its co-trustees or agents (whether in an individual or representative capacity); and

 

(4) the Borrower delivers to the Collateral Trustee an Officer’s Certificate stating that all Priority Liens of the Collateral Trustee have been released in compliance with all applicable provisions of the Priority Lien Documents and that the Grantors are not required by any Priority Lien Document to grant any Priority Lien upon any property,

 

then the senior trust arising hereunder will terminate (subject to any reinstatement pursuant to Sections 2.8(e), 3.8(e) or 7.21 hereof), except that all provisions set forth in Sections 7.11 and 7.12 that are enforceable by the Collateral Trustee or any of its co-trustees or agents (whether in an individual or representative capacity) will remain enforceable in accordance with their terms.

 

The parties further declare and covenant that the Senior Trust Estate will be held and distributed by the Collateral Trustee subject to the further agreements herein.

 

SECTION 2.2                                             Declaration of Junior Trust.

 

To secure the payment of the Parity Lien Obligations and in consideration of the premises and the mutual agreements set forth herein, each of the Grantors hereby confirms the grant to the Collateral Trustee, and the Collateral Trustee hereby accepts and agrees to hold, in trust under this Agreement for the benefit of all current and future Parity Lien Secured Parties, all of such Grantor’s right, title and interest in, to and under all Collateral now or hereafter granted to the Collateral Trustee under any Parity Lien Security Document for the equal and ratable benefit of the Parity Lien Secured Parties, together with all of the Collateral Trustee’s right, title and interest in, to and under the Parity Lien Security Documents, and all interests, rights, powers and remedies of the Collateral Trustee thereunder or in respect thereof and all cash and non-cash proceeds thereof (collectively, the “Junior Trust Estate,” and together with the Senior Trust Estate, the “Trust Estates”).

 

The Collateral Trustee and its successors and assigns under this Agreement will hold the Junior Trust Estate in trust for the benefit solely and exclusively of all current and future Parity Lien Secured Parties as security for the payment of all present and future Parity Lien Obligations.

 

Notwithstanding the foregoing, if at any time:

 

17

 

(1) all Liens securing the Parity Lien Obligations have been released as provided in Section 4.1;

 

(2) the Collateral Trustee holds no other property in trust as part of the Junior Trust Estate;

 

(3) no monetary obligation (other than indemnification and other contingent obligations for which no claim or demand for payment, whether oral or written, has been made at such time) is outstanding and payable under this Agreement to the Collateral Trustee or any of its co-trustees or agents (whether in an individual or representative capacity); and

 

(4)    the Borrower delivers to the Collateral Trustee an Officer’s Certificate stating that all Parity Liens of the Collateral Trustee have been released in compliance with all applicable provisions of the Parity Lien Documents and that the Grantors are not required by any Parity Lien Document to grant any Parity Lien upon any property,

 

then the junior trust arising hereunder will terminate, except that all provisions set forth in Sections 7.11 and 7.12 that are enforceable by the Collateral Trustee or any of its co-trustees or agents (whether in an individual or representative capacity) will remain enforceable in accordance with their terms.

 

The parties further declare and covenant that the Junior Trust Estate will be held and distributed by the Collateral Trustee subject to the further agreements herein.

 

SECTION 2.3                                             Priority of Liens between Classes.

 

Notwithstanding anything else contained herein or in any other Security Document, and notwithstanding the date, time, method, manner or order of grant, attachment or perfection of any Liens securing the Parity Lien Obligations granted on the Collateral or of any Liens securing the Priority Lien Obligations granted on the Collateral and notwithstanding any provision of the UCC, the time of incurrence of any Series of Priority Lien Debt or Series of Parity Lien Debt or the time of incurrence of any other Priority Lien Obligation or Parity Lien Obligation or any other applicable law or any defect or deficiencies in, or failure to perfect or lapse in perfection of, or avoidance as a fraudulent conveyance or otherwise of, the Liens securing the Priority Lien Obligations or the Parity Lien Obligations, the subordination of such Liens to any other Liens, or any other circumstance whatsoever, whether or not any Insolvency or Liquidation Proceeding has been commenced against the Borrower or any other Grantor, it is the intent of the parties that, and the parties hereto agree for themselves and the Parity Lien Secured Parties and Priority Lien Secured Parties represented by them that:

 

(1)                                 this Agreement and the other Security Documents create two separate and distinct Trust Estates and Liens: (i) the Senior Trust Estate and Priority Lien securing the payment and performance of the Priority Lien Obligations and (ii) the Junior Trust Estate and Parity Lien securing the payment and performance of the Parity Lien Obligations; and

 

18

 

(2)                                 any Liens on Collateral securing the Parity Lien Obligations now or hereafter held by the Collateral Trustee for the benefit of the Parity Lien Secured Parties or held by any Parity Lien Secured Party, in each case, whether by grant, possession, statute, operation of law, subrogation or otherwise, are subordinate to any Liens on Collateral securing the Priority Lien Obligations.

 

For the avoidance of doubt, in the event that any Parity Lien Secured Party becomes a judgment lien creditor 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 hereof (including the priority of Liens).

 

SECTION 2.4                                             Restrictions on Enforcement of Parity Liens; Prohibition on Contesting Liens.

 

(a)                                 Until the Discharge of Priority Lien Obligations, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Borrower or any other Grantor, the Priority Lien Secured Parties will have, subject to the exceptions set forth below in clauses (1) through (4), the exclusive right to authorize and direct the Collateral Trustee with respect to each of the Priority Lien Security Documents and the Parity Lien Security Documents and the Collateral including, without limitation, the exclusive right to authorize or direct the Collateral Trustee to enforce, collect or realize on any Collateral or exercise any other right or remedy with respect to the Collateral (including, without limitation, the exercise of any right of setoff or any right under any lockbox agreement, account control agreement, landlord waiver or bailee’s letter or similar agreement or arrangement) and no Parity Lien Representative or Parity Lien Secured Party may authorize or direct the Collateral Trustee with respect to such matters; provided, however, that the Required Parity Lien Debtholders (or any Parity Lien Representative representing such Required Parity Lien Debtholders)  may so direct the Collateral Trustee with respect to the enforcement of Parity Lien Security Documents and rights and remedies against the Collateral thereunder after the passage of a period of at least 180 days has elapsed since the later of: (i) the date on which any Parity Lien Representative has declared the existence of any Event of Default under (and as defined in) any Parity Lien Document and demanded the repayment of all the principal amount of all Parity Lien Obligations thereunder; and (ii) the date on which the Collateral Trustee and each Priority Lien Representative has received notice from such Parity Lien Representative of such declaration of an Event of Default and the acceleration of such Parity Lien Obligations (the “Standstill Period”); provided further that notwithstanding anything herein to the contrary, (x) in no event shall any Parity Lien Debtholder or Parity Lien Representative so authorize or direct the Collateral Trustee if, notwithstanding the expiration of the Standstill Period, the Priority Lien Secured Parties or a Priority Lien Representative shall have caused the Collateral Trustee to commence and diligently pursue the exercise of rights and remedies with respect to all or any material portion of the Collateral and (y) the Standstill Period shall be stayed and shall not expire and shall be deemed not to have occurred (i) at any time the Collateral Trustee has commenced and is diligently pursuing any enforcement action with respect to all or any material portion of the Collateral (with prompt written notice of the commencement of such action to be given to the Parity Lien Representatives) and (ii) at any time the Grantor which has granted a security interest in such Collateral is then a debtor under or with respect to (or otherwise subject to) any Insolvency or Liquidation Proceeding.  Notwithstanding the foregoing, the requisite Parity Lien Secured

 

19

 

Parties may direct the Collateral Trustee or the Parity Lien Representative, as applicable, in accordance with the Parity Lien Documents and, in the case of subclauses (5) and (6) below, any Parity Lien Secured Party may:

 

(1)                                 without any condition or restriction whatsoever, at any time after the Discharge of Priority Lien Obligations;

 

(2)                                 as necessary to redeem any Collateral in a creditor’s redemption permitted by law or to deliver any notice or demand necessary to enforce any right to claim, take or receive proceeds of Collateral remaining after the Discharge of Priority Lien Obligations;

 

(3)                                 as necessary to perfect or establish the priority (subject to Priority Liens) of the Parity Liens upon any Collateral, provided, that, prior to the Discharge of the Priority Lien Obligations, the Parity Lien Representative and Parity Lien Secured Parties may not require the Collateral Trustee to take any action to perfect any Collateral through possession or control other than the Collateral Trustee taking any action for possession or control required by the Priority Lien Secured Documents and the Collateral Trustee agreeing pursuant to Section 7.4 that the Collateral Trustee as agent for the benefit of the Priority Lien Secured Parties agrees to act as bailee and/or agent for the Collateral Trustee for the benefit of the Parity Lien Secured Parties as specified in this Section 7.4;

 

(4)                                 as necessary to create, prove, preserve or protect (but not enforce) its rights in and perfection and priority of the Parity Liens upon any Collateral;

 

(5)                                 file any responsive or defensive pleadings 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 Parity Lien Secured Parties, including any claims secured by the Collateral, if any, in each case in accordance with the terms of this Agreement;

 

(6)                                 vote on any plan of reorganization, arrangement, compromise or liquidation, file any proof of claim or statement of interest, make other filings and make any arguments and motions that are, in each case, in accordance with the terms of this Agreement, with respect to the Parity Lien Obligations and the Collateral; provided that no filing of any claim or vote, or pleading related to such claim or vote, to accept or reject a disclosure statement, plan of reorganization, arrangement, compromise or liquidation, or any other document, agreement or proposal similar to the foregoing by the Collateral Trustee (on behalf of the Parity Lien Secured Parties), any Parity Lien Representative or any Parity Lien Secured Party may be inconsistent with the provisions of this Agreement;

 

(b)                                 Until the Discharge of Priority Lien Obligations, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Borrower or any other Grantor, none of the Parity Lien Secured Parties, the Collateral Trustee (unless acting pursuant to an Act of Required Secured Parties) or any Parity Lien Representative will:

 

20

 

(1)                                 request judicial relief, in an Insolvency or Liquidation Proceeding or in any other court, or take any other action, that would hinder, delay, limit or prohibit the lawful exercise or enforcement of any right or remedy otherwise available to the Priority Lien Secured Parties in respect of the Priority Liens (subject to the exceptions set forth above in clauses (a)(1) through (a)(6)) or that would limit, invalidate, avoid or set aside any Priority Lien or subordinate the Priority Liens to the Parity Liens or grant the Parity Liens equal ranking to the Priority Liens;

 

(2)                                 oppose or otherwise contest any motion for relief from the automatic stay or for any injunction against foreclosure or enforcement of Priority Liens made by any Priority Lien Secured Party or any Priority Lien Representative in any Insolvency or Liquidation Proceeding;

 

(3)                                 oppose or otherwise contest any lawful exercise by any Priority Lien Secured Party or any Priority Lien Representative of the right to credit bid Priority Lien Debt at any sale of Collateral in foreclosure of Priority Liens;

 

(4)                                 oppose or otherwise contest any other request for judicial relief made in any court by any holder of Priority Lien Obligations or any Priority Lien Representative relating to the lawful enforcement of any Priority Lien;

 

(5)                                 contest, protest or object to any foreclosure proceeding or action brought by the Collateral Trustee, any Priority Lien Representative or any Priority Lien Secured Party or any other exercise by the Collateral Trustee, any Priority Lien Representative or any Priority Lien Secured Party of any rights and remedies relating to the Collateral under the Priority Lien Documents or otherwise and each Parity Lien Representative on behalf of itself and each Parity Lien Secured Party hereby waives any and all rights it may have to object to the time or manner in which the Collateral Trustee, any Priority Lien Representative or any Priority Lien Secured Party seeks to enforce the Priority Lien Obligations or the Priority Liens, in each case, subject to the exceptions set forth above in clauses (a)(1) through (a)(6);

 

(6)                                 contest or support any other Person in contesting, in any proceeding (including any Insolvency or Liquidation Proceeding) the validity, enforceability, perfection, priority or extent of the Priority Liens or the amount, nature or extent of the Priority Lien Obligations; or

 

(7)                                 object to the forbearance by the Collateral Trustee from bringing or pursuing any foreclosure proceeding or action or any other exercise of any rights or remedies relating to the Collateral; provided, that notwithstanding the foregoing, the Required Parity Lien Debtholders (or any Parity Lien Representative representing such Required Parity Lien Debtholders) may direct the Collateral Trustee with respect to the enforcement of Parity Lien Security Documents and rights and remedies against the Collateral after expiration of the Standstill Period to the extent provided in Section 2.4.

 

Except as specifically set forth in this Agreement, both before and during an Insolvency or Liquidation Proceeding, the Parity Lien Secured Parties and the Parity Lien Representatives may

 

21

 

take any actions and exercise any and all rights that would be available to a holder of unsecured claims so long as such actions and exercise of rights do not violate any express provision of this Agreement.

 

(c)                                  At any time prior to the Discharge of Priority Lien Obligations and after (1) the commencement of any Insolvency or Liquidation Proceeding in respect of the Borrower or any other Grantor or (2) the Collateral Trustee and each Parity Lien Representative have received written notice from any Priority Lien Representative at the direction of an Act of Required Secured Parties stating that (A) any Series of Priority Lien Debt has become due and payable in full (whether at maturity, upon acceleration or otherwise) or (B) the holders of Priority Liens under one or more Series of Priority Lien Debt have become entitled under any Priority Lien Documents to enforce any or all of the Priority Liens by reason of a default under such Priority Lien Documents and have commenced enforcement actions with respect thereto, no payment of money (or the equivalent of money) shall be made from the proceeds of Collateral by the Borrower or any other Grantor to the Trustee (other than fees, expenses, disbursements and indemnities of the Trustee, including fees, expenses and disbursements of counsel to the Trustee), the Collateral Trustee (other than payments to the Collateral Trustee for the benefit of the Priority Lien Secured Parties) or any other Parity Lien Secured Party (including, without limitation, payments and prepayments made from such proceeds or application to Parity Lien Obligations and all other payments and deposits made from such proceeds pursuant to any provision of any Parity Lien Document).

 

(d)                                 All proceeds of Collateral received by the Collateral Trustee, any Parity Lien Representative or any Parity Lien Secured Party in violation of Section 2.4(b) or 2.4(c) and all proceeds of Collateral received by any Parity Lien Representative or any Parity Lien Secured Party in connection with any exercise of remedies against the Collateral will be held by the Collateral Trustee, the applicable Parity Lien Representative or the applicable Parity Lien Secured Party in trust for the account of the Priority Lien Secured Parties and remitted to the Collateral Trustee upon demand by the Collateral Trustee or any Priority Lien Representative for application in accordance with Section 3.4 hereof.  The Parity Liens will remain attached to and enforceable against all proceeds so held or remitted until applied to satisfy the Priority Lien Obligations.  All proceeds of Collateral received by the Collateral Trustee, Parity Lien Secured Parties and Parity Lien Representatives not in violation of Section 2.4(b) or 2.4(c) and not in connection with any exercise of remedies against any Collateral will be received by the Collateral Trustee, Parity Lien Secured Parties and the Parity Lien Representatives free from the Priority Liens and all other Liens except the Parity Liens.

 

SECTION 2.5                                             Waiver of Right of Marshaling.

 

(a)                                 Prior to the Discharge of Priority Lien Obligations, Parity Lien Secured Parties, each Parity Lien Representative and the Collateral Trustee may not assert or enforce any marshaling, appraisal, valuation or other similar right accorded to a junior lienholder, as against the Priority Lien Secured Parties or the Priority Lien Representatives (in their capacity as priority lienholders).

 

22

 

(b)                                 Following the Discharge of Priority Lien Obligations, the Parity Lien Secured Parties and any Parity Lien Representative may assert their right under the UCC or otherwise to any proceeds remaining following a sale or other disposition of Collateral by, or on behalf of, the Priority Lien Secured Parties.

 

SECTION 2.6                                             Discretion in Enforcement of Priority Liens.

 

(a)                                 In exercising rights and remedies with respect to the Collateral, at any time prior to a Discharge of Priority Lien Obligations the Priority Lien Secured Parties and the Priority Lien Representatives shall have the exclusive right to enforce (or refrain from enforcing) the provisions of the Priority Lien Documents and exercise (or refrain from exercising) remedies thereunder or any such rights and remedies, all in such order and in such manner as they may determine in the exercise of their sole and exclusive discretion, including:

 

(1)                                 the exercise or forbearance from exercise of all rights and remedies in respect of the Collateral and/or the Priority Lien Obligations;

 

(2)                                 the enforcement or forbearance from enforcement of any Priority Lien in respect of the Collateral;

 

(3)                                 the exercise or forbearance from exercise of rights and powers of a holder of shares of stock included in the Senior Trust Estate to the extent provided in the Priority Lien Security Documents;

 

(4)                                 the acceptance of the Collateral in full or partial satisfaction of the Priority Lien Obligations; and

 

(5)                                 the exercise or forbearance from exercise of all rights and remedies of a secured lender under the UCC or any similar law of any applicable jurisdiction or in equity.

 

Notwithstanding the foregoing, the Parity Lien Secured Party may direct the Collateral Trustee or the Parity Lien Representative, as applicable, as set forth in the second sentence of Section 2.4(a).

 

SECTION 2.7                                             Amendments to Priority Lien Documents and Discretion in Enforcement of Priority Lien Obligations.

 

Without in any way limiting the generality of Section 2.6, the Priority Lien Secured Parties and the Priority Lien Representatives may, at any time and from time to time, without the consent of or notice to the Parity Lien Secured Parties or the Parity Lien Representatives, without incurring responsibility to the Parity Lien Secured Parties and the Parity Lien Representatives and without impairing or releasing the subordination provided in this Agreement or the

 

23

 

obligations hereunder of the Parity Lien Secured Parties and the Parity Lien Representatives, do any one or more of the following:

 

(1)                                 change the manner, place or terms of payment or extend the time of payment of, or renew or alter, the Priority Lien Obligations, or otherwise amend or supplement in any manner the Priority Lien Obligations, or any instrument evidencing the Priority Lien Obligations or any agreement under which the Priority Lien Obligations are outstanding including, without limitation, increasing the principal amount thereof and/or the applicable margin or similar component of interest rate;

 

(2)                                 release any Person or entity liable in any manner for the collection of the Priority Lien Obligations;

 

(3)                                 release the Priority Lien on any Collateral; and

 

(4)                                 exercise or refrain from exercising any rights against any Grantor.

 

SECTION 2.8                                             Insolvency or Liquidation Proceedings.

 

(a)                                 If in any Insolvency or Liquidation Proceeding and prior to the Discharge of Priority Lien Obligations, the Priority Lien Secured Parties by an Act of Required Secured Parties shall desire to permit the use of “Cash Collateral” (as such term is defined in Section 363(a) of the Bankruptcy Code), or to permit the Borrower or any other Grantor to obtain financing, whether from the Priority Lien Secured Parties or any other Person under Section 364 of the Bankruptcy Code or any similar Bankruptcy Law (“DIP Financing”) then each of the Collateral Trustee (on behalf of the Parity Lien Secured Parties) and each Parity Lien Representative for itself and on behalf of the other Parity Lien Secured Parties represented by it, agrees that it will raise no objection to such Cash Collateral use or DIP Financing (including any proposed orders for such Cash Collateral use and/or DIP Financing which are acceptable to the Priority Lien Secured Parties) and to the extent the Liens securing the Priority Lien Obligations are subordinated to or pari passu with such DIP Financing, the Collateral Trustee will subordinate its Parity Liens in the Collateral to the Liens securing such DIP Financing (and all Obligations relating thereto) and to all carve-outs to which the DIP Financing is subordinate and will not request adequate protection or any other relief in connection therewith (except, as expressly agreed by the Priority Lien Secured Parties or to the extent permitted by Section 2.8(c)); provided that the Parity Lien Secured Parties retain the right to object to any ancillary agreements or arrangements regarding Cash Collateral use or DIP Financing that are materially prejudicial to their interests.  No Parity Lien Secured Party may provide DIP Financing to a Borrower or other Grantor secured by Liens equal or senior in priority to the Liens securing any Priority Lien Obligations, provided that if no Priority Lien Secured Party offers to provide DIP Financing to the extent permitted under this Section 2.8(a) on or before the date of the hearing to approve DIP Financing, then a Parity Lien Secured Party may seek to provide such DIP Financing secured by Liens equal or senior in priority to the Liens securing any Priority Lien Obligations, and the Priority Lien Secured Parties may object thereto; provided, further, that such DIP Financing may not “roll-up” or otherwise include or refinance any pre-petition Parity Lien Obligations.  Each of the Collateral Trustee (on behalf of the Parity Lien Secured Parties) and each Parity Lien Representative on behalf of itself and the Parity Lien

 

24

 

Secured Parties represented by it agree that each of them will not seek consultation rights in connection with, and will raise no objection or oppose, a motion to sell, liquidate or otherwise dispose of Collateral under Section 363 of the Bankruptcy Code if the requisite Priority Lien Secured Parties have consented to such sale, liquidation or other disposition.  Each of the Collateral Trustee (on behalf of the Parity Lien Secured Parties) and each Parity Lien Representative on behalf of itself and the Parity Lien Secured Parties represented by it further agrees that it will not directly or indirectly oppose or impede entry of any order in connection with such sale, liquidation or other disposition, including orders to retain professionals or set bid procedures in connection with such sale, liquidation or disposition if the requisite Priority Lien Secured Parties have consented to such (i) retention of professionals and bid procedures in connection with such sale, liquidation or disposition of such assets and (ii) sale, liquidation or disposition of such assets, in which event the Parity Lien Secured Parties will be deemed to have consented to the sale or disposition of Collateral pursuant to Section 363(f) of the Bankruptcy Code and such motion does not impair the rights of the Parity Lien Secured Parties under Section 363(k) of the Bankruptcy Code.

 

(b)                                 Until the Discharge of Priority Lien Obligations has occurred, the Collateral Trustee (on behalf of the Parity Lien Secured Parties) and each Parity Lien Representative, for itself and on behalf of the other Parity Lien Secured Parties represented by it, agrees that none of them shall: (i) seek (or support any other Person seeking) relief from the automatic stay or any other stay in any Insolvency or Liquidation Proceeding in respect of the Collateral without the prior written consent of the requisite Priority Lien Secured Parties, unless a motion for adequate protection permitted under Section 2.8(c) has been denied by a bankruptcy court or (ii) oppose (or support any other Person in opposing) any request by the Priority Lien Secured Parties for relief from such stay.

 

(c)                                  The Collateral Trustee (on behalf of the Parity Lien Secured Parties) and each Parity Lien Representative, for itself and on behalf of the other Parity Lien Secured Parties represented by it, agrees that none of them shall contest (or support any other Person contesting): (1) any request by the Priority Lien Representatives or the Priority Lien Secured Parties for adequate protection under any Bankruptcy Law; or (2) any objection by the Priority Lien Representatives or the Priority Lien Secured Parties to any motion, relief, action or proceeding based on the Priority Lien Secured Parties claiming a lack of adequate protection.  Notwithstanding the foregoing provisions in this Section 2.8(c), in any Insolvency or Liquidation Proceeding: (1) if the Priority Lien Secured Parties (or any subset thereof) are granted adequate protection in the form of additional collateral in connection with any Cash Collateral use or DIP Financing, then the Collateral Trustee (on behalf of the Parity Lien Secured Parties) or Parity Lien Representative, on behalf of itself or any of the other Parity Lien Secured Parties represented by it, may seek or request adequate protection in the form of a Lien on such additional collateral, which Lien will be subordinated to the Liens securing the Priority Lien Obligations and such Cash Collateral use or DIP Financing (and all Obligations relating thereto) on the same basis as the other Liens securing the Parity Lien Obligations are so subordinated to the Liens securing the Priority Lien Obligations under this Agreement; and (2) each of the Collateral Trustee, the Parity Lien Representatives and the Parity Lien Secured Parties shall only be permitted to seek adequate protection with respect to their rights in the Collateral in any Insolvency or Liquidation Proceeding in the form of (A) additional collateral; provided that as adequate protection for the Priority Lien Obligations, the Collateral Trustee, on behalf of the

 

25

 

Priority Lien Secured Parties, is also granted a senior Lien on such additional collateral; (B) replacement Liens on the Collateral; provided that as adequate protection for the Priority Lien Obligations, the Collateral Trustee, on behalf of the Priority Lien Secured Parties, is also granted senior replacement Liens on the Collateral; (C) an administrative expense claim; provided that as adequate protection for the Priority Lien Obligations, the Collateral Trustee, on behalf of the Priority Lien Secured Parties, is also granted an administrative expense claim which is senior and prior to the administrative expense claim of the Collateral Trustee (on behalf of the Parity Lien Secured Parties) and each Parity Lien Representative on behalf of the Parity Lien Secured Parties represented by it; and (D) cash payments with respect to interest on the Parity Lien Obligations; provided that (1) as adequate protection for the Priority Lien Obligations, the Collateral Trustee, on behalf of the Priority Lien Secured Parties, is also granted cash payments with respect to interest on the Priority Lien Obligations, and (2) such cash payments do not exceed an amount equal to the interest accruing on the principal amount of Parity Lien Obligations outstanding on the date such relief is granted at the interest rate under the Parity Lien Documents and accruing from the date the Collateral Trustee (on behalf of the Priority Lien Secured Parties) or the Priority Lien Representatives on behalf of the Priority Lien Secured Parties represented by them is granted such relief.  If any Parity Lien Secured Party receives post-petition interest and/or adequate protection payments in an Insolvency or Liquidation Proceeding (“Parity Lien Adequate Protection Payments”), and the Priority Lien Secured Parties do not receive payment in full in cash of all Priority Lien Obligations upon the effectiveness of the plan of reorganization for, or conclusion of, that Insolvency or Liquidation Proceeding, then, each Parity Lien Secured Party shall pay over to the Priority Lien Secured Party an amount (the “Pay-Over Amount”) equal to the lesser of (i) the Parity Lien Adequate Protection Payments received by such Parity Lien Secured Parties and (ii) the amount of the short-fall (the “Short Fall”) in payment in full of the Priority Lien Obligations; provided that to the extent any portion of the Short Fall represents payments received by the Priority Lien Secured Parties in the form of promissory notes, equity or other property, equal in value to the cash paid in respect of the Pay-Over Amount, the Priority Lien Secured Parties shall, upon receipt of the Pay-Over Amount, transfer those promissory notes, equity or other property, pro rata, equal in value to the cash paid in respect of the Pay-Over Amount to the applicable Parity Lien Secured Parties in exchange for the Pay-Over Amount.  Notwithstanding anything herein to the contrary, the Priority Lien Secured Parties shall not be deemed to have consented to, and expressly retain their rights to object to the payment of post-petition interest in respect of any Parity Lien Obligations or the grant of adequate protection in the form of cash payments to the Parity Lien Secured Parties made pursuant to this Section 2.8(c).

 

(d)                                 Nothing contained herein shall prohibit or in any way limit the Priority Lien Representative or any Priority Lien Secured Party from objecting in any Insolvency or Liquidation Proceeding or otherwise to any action taken by the Collateral Trustee (on behalf of the Parity Lien Secured Parties), the Parity Lien Representative or any of the other Parity Lien Secured Parties, including the seeking by the Collateral Trustee (on behalf of the Parity Lien Secured Parties), the Parity Lien Representative or any of the other Parity Lien Secured Parties of adequate protection or the asserting by the Collateral Trustee (on behalf of the Parity Lien Secured Parties), the Parity Lien Representative or any of the other Parity Lien Secured Parties of any of its rights and remedies under the Parity Lien Documents or otherwise.

 

26

 

(e)                                  If any Priority Lien Secured Party is required in any Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise pay to the estate of the Borrower or any other Grantor any amount paid in respect of Priority Lien Obligations (a “Recovery”), then such Priority Lien Secured Party shall be entitled to a reinstatement of Priority Lien Obligations with respect to all such recovered amounts on the date of such Recovery, and from and after the date of such reinstatement the Discharge of Priority Lien Obligations shall be deemed not to have occurred for all purposes hereunder.  If this Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto from such date of reinstatement.

 

(f)                                   The Collateral Trustee (on behalf of the Parity Lien Secured Parties) and each Parity Lien Representative, for itself and on behalf of the Parity Lien Secured Parties, and the Collateral Trustee (on behalf of the Priority Lien Secured Parties) and each Priority Lien Representative for itself and on behalf of the Priority Lien Secured Parties for whom it acts as representative, acknowledges and agrees that

 

(1)                                 the grants of Liens pursuant to the Priority Lien Security Documents and the Parity Lien Security Documents constitute two separate and distinct grants of Liens; and

 

(2)                                 because of, among other things, their differing rights in the Collateral, the Parity Lien Obligations are fundamentally different from the Priority Lien Obligations and must be separately classified in any plan of reorganization proposed or adopted in an Insolvency or Liquidation Proceeding.

 

To further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that the claims of the Priority Lien Secured Parties and the Parity Lien Secured Parties in respect of the Collateral constitute only one secured claim (rather than separate classes of senior and junior secured claims), then each of the parties hereto hereby acknowledges and agrees that all distributions shall be made as if there were separate classes of senior and junior secured claims against the Grantors 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 Parity Lien Secured Parties), the Priority 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 (or that would be owing if there were such separate classes of senior and junior secured claims) in respect of Post-Petition Interest, including any additional interest payable pursuant to the Priority Lien Documents, arising from or related to a default, which is disallowed as a claim in any Insolvency or Liquidation Proceeding) before any distribution is made in respect of the claims held by the Parity Lien Secured Parties with respect to the Collateral, with the Collateral Trustee (on behalf of the Parity Lien Secured Parties)  or each Parity Lien Representative, as applicable, for itself and on behalf of the Parity Lien Secured Parties for whom it acts as representative, hereby acknowledging and agreeing to turn over to the Priority Lien Secured Parties, Collateral or proceeds of Collateral 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 Parity Lien Secured Parties).

 

27

 

Notwithstanding any other provision hereof to the contrary, each Parity Lien Representative, for itself and on behalf of each other Parity Lien Secured Party represented by it, agrees that (A) without the consent of the requisite Priority Lien Secured Parties, none of such Parity Lien Representative, the Parity Lien Secured Parties represented by it or any agent or the trustee on behalf of any of them shall, for any purpose during any Insolvency or Liquidation Proceeding or otherwise, support, endorse, propose or submit, whether directly or indirectly, any plan of reorganization that provides for the impairment of repayment of the Priority Lien Obligations unless the Priority Lien Secured Parties or the Priority Lien Representative, in each case, specified in clause (i) or (ii) of the definition of Act of Required Secured Parties shall have consented to such plan in writing.

 

(g)                                  The parties to this Agreement acknowledge that this Agreement is a “subordination agreement” under section 510(a) of the Bankruptcy Code, which will be effective before, during and after the commencement of an Insolvency or Bankruptcy Proceeding.  All references in this Agreement to any Grantor will include such Person as a debtor-in-possession and any receiver or trustee for such Person in an Insolvency or Bankruptcy Proceeding.

 

SECTION 2.9                                             Collateral Shared Equally and Ratably within Class.

 

The parties to this Agreement agree that the payment and satisfaction of all of the Secured Obligations within each Class will be secured equally and ratably by the Liens established in favor of the Collateral Trustee for the equal and ratable benefit of the Secured Parties belonging to such Class, notwithstanding the time of incurrence of any Secured Obligations within such Class or the date, time, method or order of grant, attachment or perfection of any Liens securing such Secured Obligations within such Class and notwithstanding any provision of the UCC, the time of incurrence of any Series of Priority Lien Debt or Series of Parity Lien Debt or the time of incurrence of any other Priority Lien Obligation or Parity Lien Obligation,  or any other applicable law or any defect or deficiencies in, or failure to perfect or lapse in perfection of, or avoidance as a fraudulent conveyance or otherwise of, the Liens securing the Priority Lien Obligations or the Parity Lien Obligations the subordination of such Liens to any other Liens, or any other circumstance whatsoever, whether or not any Insolvency or Liquidation Proceeding has been commenced against the Borrower or any other Grantor, it is the intent of the parties that, and the parties hereto agree for themselves and the Parity Lien Secured Parties and Priority Lien Secured Parties represented by them that:

 

(1)                                 all Parity Lien Obligations will be and are secured equally and ratably by all Parity Liens at any time granted by the Borrower or any other Grantor to secure any Obligations in respect of any Series of Parity Lien Debt, whether or not upon property otherwise constituting collateral for such Series of Parity Lien Debt, and that all such Parity Liens will be enforceable by the Collateral Trustee for the benefit of all Parity Lien Secured Parties equally and ratably; provided, however, that notwithstanding the foregoing, this provision will not be violated with respect to any particular Collateral and any particular Series of Parity Lien Debt if the Secured Debt Documents in respect thereof prohibit the applicable Parity Lien Representative from accepting the benefit of a Lien on any particular asset or property or such Parity Lien Representative otherwise expressly declines in writing to accept the benefit of a Lien on such asset or property; and

 

28

 

(2)                                 all Priority Lien Obligations will be and are secured equally and ratably by all Priority Liens at any time granted by the Borrower or any other Grantor to secure any Obligations in respect of any Series of Priority Lien Debt (and any Secured Hedging Obligations and Secured Cash Management Obligations related to such Series of Priority Lien Debt), whether or not upon property otherwise constituting collateral for such Series of Priority Lien Debt (and any Secured Hedging Obligations and Secured Cash Management Obligations related to such Series of Priority Lien Debt), and that all such Priority Liens will be enforceable by the Collateral Trustee for the benefit of all Priority Lien Secured Parties equally and ratably; provided, however, that notwithstanding the foregoing, (x) this provision will not be violated with respect to any particular Collateral and any particular Series of Priority Lien Debt if the Secured Debt Documents in respect thereof prohibit the applicable Priority Lien Representative from accepting the benefit of a Lien on any particular asset or property or such Priority Lien Representative otherwise expressly declines in writing to accept the benefit of a Lien on such asset or property and (y) this provision will not be violated with respect to any particular Secured Hedging Obligations or Secured Cash Management Obligations if the related Secured Hedging Agreement or Secured Cash Management Agreement, as applicable, prohibits the applicable Hedge Bank or Cash Management Bank, as applicable, from accepting the benefit of a Lien on any particular asset or property or such Hedge Bank or Cash Management Bank, as applicable, otherwise expressly declines in writing to accept the benefit of a Lien on such asset or property;

 

It is understood and agreed that nothing in this Section 2.9 is intended to alter the priorities among Secured Parties belonging to different Classes as provided in Section 2.3.

 

SECTION 2.10                                      No New Liens.

 

So long as the Discharge of Priority Lien Obligations has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Borrower or any or any other Grantor, the parties hereto agree that the Borrower will not, and will not permit any other Grantor to:

 

(a) grant or permit any additional Liens on any asset or property to secure any Parity Lien Obligation unless it has granted or concurrently grants a Lien on such asset or property to secure all of the Priority Lien Obligations, the parties hereto agreeing that any such Lien shall be subject to Section 2.3 hereof; and

 

(b) except as set forth in the last paragraph of this Section 2.10, grant or permit any additional Liens on any asset or property to secure any Priority Lien Obligations unless it has granted or concurrently grants a Lien on such asset or property to secure all of the Parity Lien Obligations; provided that this provision will not be violated if the Collateral Trustee is given a reasonable opportunity to accept a Lien on any asset or property for the benefit of the Parity Lien Secured Parties and the Collateral Trustee states in writing that the Parity Lien Documents prohibit the Collateral Trustee from accepting a Lien on such asset or property or the Parity Lien Representative otherwise expressly declines to accept a Lien on such asset or property.

 

29

 

To the extent that the foregoing provisions are not complied with for any reason, without limiting any other rights and remedies available to the Priority Lien Secured Parties, the Collateral Trustee, on behalf of the Parity Lien Secured Parties, agrees that any amounts received by or distributed to it pursuant to or as a result of Liens granted in contravention of this Section 2.10 shall be subject to Section 3.4.

 

Notwithstanding anything in this Agreement to the contrary (including any of the foregoing in this Section 2.10 and Section 2.11), (i) cash and cash equivalents may be pledged to secure Priority Lien Obligations consisting of reimbursement obligations in respect of letters of credit and swing line loans (and/or any obligations of lenders participating in the facilities under which such letters of credit are issued and swing line loans made) pursuant to the Priority Lien Documents without granting a Lien thereon to secure any other Priority Lien Obligations, Parity Lien Obligations or any other Secured Obligation and (ii) Holdings may grant Liens on the equity interests and related rights in the Borrower to secure Priority Lien Obligations without granting a Lien thereon to secure any Parity Lien Obligation.

 

SECTION 2.11                                      Similar Liens and Agreements.

 

The parties hereto agree that, except as provided in Section 2.10, it is their intention that the Collateral for the Priority Lien Obligations and the Collateral for the Parity Lien Obligations be identical.  In furtherance of the foregoing, the parties hereto agree, subject to the other provisions of this Agreement, that the Security Documents creating or evidencing the Priority Liens and the Parity Liens, will be in all material respects the same forms of documents other than as is necessary or appropriate to reflect the first lien and second lien nature of the Obligations thereunder.

 

In addition, the Company agrees that each mortgage securing any Parity Lien on such property contain such other language as the Controlling Representative may reasonably request to reflect the subordination of such mortgage to the mortgage securing any Priority Lien on such property.

 

SECTION 2.12                                      Confirmation of Subordination in Parity Lien Security Documents.

 

The Company agrees that each Parity Lien Security Document shall include the following language (or language to similar effect approved by the Administrative Agent):

 

“Notwithstanding anything herein to the contrary, the lien and security interest granted to the Collateral Trustee for the benefit of the Parity Lien Secured Parties pursuant to this Agreement and the exercise of any right or remedy by the Collateral Trustee for the benefit of the Parity Lien Secured Parties hereunder are subject to the provisions of the Collateral Trust Agreement, dated as of March 28, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “Collateral Trust Agreement”), among The Huntington National Bank, as Administrative Agent, Wilmington Trust, National Association, as Trustee, Lord Securities Corporation, as Collateral Trustee and certain other persons party or that may become party thereto from time to time.  In the event of 

 

30

 

any conflict between the terms of the Collateral Trust Agreement and this Agreement, the terms of the Collateral Trust Agreement shall govern and control.”

 

ARTICLE 3.                                              OBLIGATIONS AND POWERS OF COLLATERAL TRUSTEE

 

SECTION 3.1                                             Appointment and Undertaking of the Collateral Trustee.

 

(a)                                 Each Hedge Bank and Cash Management Bank and each other Secured Party acting through its respective Secured Debt Representative and/or by its acceptance of the benefits of the Security Documents hereby appoints the Collateral Trustee to serve as collateral trustee hereunder on the terms and conditions set forth herein.  Subject to, and in accordance with, this Agreement, the Collateral Trustee will, as collateral trustee, for the benefit solely and exclusively of the present and future Secured Parties, in accordance with the terms of this Agreement:

 

(1)                                 accept, enter into, hold, maintain, administer and enforce all Security Documents, including all Collateral subject thereto, and all Liens created thereunder, perform its obligations hereunder and under the Security Documents and protect, exercise and enforce the interests, rights, powers and remedies granted or available to it under, pursuant to or in connection with the Security Documents;

 

(2)                                 take all lawful and commercially reasonable actions permitted under the Security Documents that it may deem necessary or advisable to protect or preserve its interest in the Collateral subject thereto and such interests, rights, powers and remedies;

 

(3)                                 deliver and receive notices pursuant to this Agreement and the Security Documents;

 

(4)                                 sell, assign, collect, assemble, foreclose on, institute legal proceedings with respect to, or otherwise exercise or enforce the rights and remedies of a secured party (including a mortgagee, trust deed beneficiary and insurance beneficiary or loss payee) with respect to the Collateral under the Security Documents and its other interests, rights, powers and remedies;

 

(5)                                 remit as provided in Section 3.4 all cash proceeds received by the Collateral Trustee from the collection, foreclosure or enforcement of its interest in the Collateral under the Security Documents or any of its other interests, rights, powers or remedies;

 

(6)                                 execute and deliver (i) amendments and supplements to the Security Documents as from time to time authorized pursuant to Section 7.1 accompanied by an Officer’s Certificate to the effect that the amendment or supplement was permitted under Section 7.1 and (ii) acknowledgements of Collateral Trust Joinders delivered pursuant to Section 3.8, 3.9 or 7.21 hereof;

 

31

 

(7)                                 release any Lien granted to it by any Security Document upon any Collateral if and as required by Section 3.2 or Article 4;

 

(8)                                 provide direction, consent or approval under a Security Document to the extent such Security Document or this Agreement contemplates that such direction, consent or approval be given at the direction of the Controlling Representative or an Act of Required Secured Parties (for avoidance of doubt, the foregoing shall not apply to any exercise of remedies, release of collateral or amendment of the Security Documents each of which will be done solely as provided elsewhere in this Agreement); and

 

(9)                                 act or decline to act in connection with any enforcement of Liens as provided in Section 3.3.

 

(b)                                 Each party to this Agreement acknowledges and consents to the undertaking of the Collateral Trustee set forth in Section 3.1(a) and agrees to each of the other provisions of this Agreement applicable to the Collateral Trustee.

 

(c)                                  Notwithstanding anything to the contrary contained in this Agreement, the Collateral Trustee will not commence any exercise of remedies or any foreclosure actions or otherwise take any action or proceeding against any of the Collateral (other than actions as necessary to prove, protect or preserve the Liens securing the Secured Obligations) unless and until it shall have been directed in writing by an Act of Required Secured Parties and then only in accordance with the provisions of this Agreement; provided that, notwithstanding the foregoing, the Required Parity Lien Debtholders (or any Parity Lien Representative representing such Required Parity Lien Debtholders) may direct the Collateral Trustee with respect to the enforcement of Parity Lien Security Documents and rights and remedies against the Collateral after expiration of the Standstill Period to the extent provided in Section 2.4.

 

(d)                                 Notwithstanding anything to the contrary contained in this Agreement, no Parity Lien Representative may serve as Collateral Trustee.  In addition,  notwithstanding anything to the contrary contained in this Agreement, neither the Borrower nor any of its Affiliates may serve as Collateral Trustee.

 

SECTION 3.2                                             Release or Subordination of Liens.  The Collateral Trustee will not release or subordinate any Lien of the Collateral Trustee or consent to the release or subordination of any Lien of the Collateral Trustee, except:

 

(a)                                 solely with respect to subordination of the Liens on the Collateral, as directed by (x) the Controlling Representatives or (y) an Act of Required Secured Parties, in each case, accompanied by an Officer’s Certificate to the effect that the subordination was permitted by each applicable Secured Debt Document;

 

(b)                                 as required by Article 4;

 

(c)                                  as ordered pursuant to applicable law under a final and nonappealable order or judgment of a court of competent jurisdiction; or

 

32

 

(d)                                 for the subordination of the Junior Trust Estate and the Parity Liens to the Senior Trust Estate and the Priority Liens.

 

SECTION 3.3                                             Enforcement of Liens.  If the Collateral Trustee at any time receives written notice from a Secured Debt Representative that any event has occurred that constitutes a default under any Secured Debt Document entitling the Collateral Trustee to foreclose upon, collect or otherwise enforce its Liens under the applicable Security Documents, the Collateral Trustee will promptly deliver written notice thereof to each other Secured Debt Representative. Thereafter, the Collateral Trustee may await direction by an Act of Required Secured Parties and will act, or decline to act, as directed by an Act of Required Secured Parties, in the exercise and enforcement of the Collateral Trustee’s interests, rights, powers and remedies in respect of the Collateral or under the Security Documents or applicable law and, following the initiation of such exercise of remedies, the Collateral Trustee will act, or decline to act, with respect to the manner of such exercise of remedies as directed by an Act of Required Secured Parties; provided, however, that upon expiration of the Standstill Period the Collateral Trustee shall exercise or decline to exercise enforcement rights, powers and remedies as directed by the Required Parity Lien Debtholders as provided in Section 2.4 hereof unless the Priority Lien Secured Parties or a Priority Lien Representative shall have caused the Collateral Trustee to commence and diligently pursue the exercise of rights and remedies with respect to all or any material portion of the Collateral.  Unless it has been directed to the contrary by an Act of Required Secured Parties, the Collateral Trustee in any event may (but will not be obligated to) take or refrain from taking such action with respect to any default under any Secured Debt Document as it may deem advisable and in the best interest of the Secured Parties.

 

SECTION 3.4                                             Application of Proceeds.

 

(a)                                 The Collateral Trustee will apply the proceeds of any collection, sale, foreclosure or other realization upon, or exercise of any right or remedy with respect to, any Collateral and the proceeds thereof, the proceeds of any title insurance or other insurance policy with respect to any Collateral required under any Priority Lien Document or Parity Lien Document or otherwise covering the Collateral, in the following order of application:

 

FIRST, to the payment of all amounts payable under this Agreement on account of the Collateral Trustee’s fees and any reasonable legal fees, costs and expenses or other liabilities of any kind incurred by the Collateral Trustee or any co-trustee or agent of the Collateral Trustee in connection with any Security Document (including, but not limited to, indemnification obligations that are then due and payable);

 

SECOND, to the repayment of obligations, other than the Secured Obligations, secured by a Permitted Prior Lien on the Collateral sold or realized upon to the extent that such other Lien has priority over the Priority Liens but only if such obligation is discharged (in whole or in part) in connection with such sale or other realization;

 

THIRD, to the respective Priority Lien Representatives on a pro rata basis for each Series of Priority Lien Debt (and Secured Hedging Obligations and Secured Cash Management Obligations represented by such Priority Lien Representative) that are  secured by such Collateral for application to the payment of all such outstanding Priority 

 

33

 

Lien Debt and any such other Priority Lien Obligations that are then due and payable and/or that are to be cash collateralized pursuant to the terms of the Priority Lien Documents and so secured (for application in such order as may be provided in the Priority Lien Documents applicable to the respective Priority Lien Obligations) in an amount sufficient to pay in full in cash all outstanding Priority Lien Debt and all other Priority Lien Obligations that are then due and payable and/or to be cash collateralized pursuant to the terms of the Priority Lien Documents (including all Post-Petition Interest (and in the case of interest, at any applicable post-default rate), whether or not enforceable, allowable or allowed as a claim in such proceeding, and including the discharge or cash collateralization (at the lower of (1) 105% of the aggregate undrawn amount and (2) the percentage of the aggregate undrawn amount required for release of Liens under the terms of the applicable Priority Lien Document) of all outstanding letters of credit constituting Priority Lien Debt);

 

FOURTH, to the respective Parity Lien Representatives on a pro rata basis for each Series of Parity Lien Debt that are secured by such Collateral application to the payment of all outstanding Parity Lien Debt and any other Parity Lien Obligations that are so secured and then due and payable (for application in such order as may be provided in the Parity Lien Documents applicable to the respective Parity Lien Obligations) in an amount sufficient to pay in full in cash all outstanding Parity Lien Debt and all other Parity Lien Obligations that are then due and payable and so secured (including, to the extent legally permitted, all Post-Petition Interest (and in the case of interest, at any applicable post-default rate), whether or not enforceable, allowable or allowed as a claim in such proceeding, and including the discharge or cash collateralization (at the lower of (1) 105% of the aggregate undrawn amount and (2) the percentage of the aggregate undrawn amount required for release of Liens under the terms of the applicable Parity Lien Document) of all outstanding letters of credit, if any, constituting Parity Lien Debt); and

 

FIFTH, any surplus remaining after the payment in full in cash of amounts described in the preceding clauses will be paid to the Borrower or the applicable Grantor, as the case may be, its successors or assigns, or to such other Persons as may be entitled to such amounts under applicable law or as a court of competent jurisdiction may direct.

 

Notwithstanding the foregoing, if any Series of Secured Debt has released its Lien on any Collateral as described below in Section 4.4, then such Series of Secured Debt and any related Secured Obligations of that Series of Secured Debt thereafter shall not be entitled to share in the proceeds of any Collateral so released by that Series of Secured Debt.

 

(b)                                 If any Parity Lien Representative or any Parity Lien Secured Party collects or receives any proceeds of such foreclosure, collection or other enforcement, proceeds of any title or other insurance with respect to any Collateral and any proceeds subject to Liens that have been avoided or otherwise invalidated that should have been applied to the payment of the Priority Lien Obligations in accordance with Section 3.4(a) above, whether after the commencement of an Insolvency or Liquidation Proceeding or otherwise, such Parity Lien Representative or such Parity Lien Secured Party, as the case may be, will forthwith deliver the same to the Collateral Trustee, for the account of the Priority Lien Secured Parties, to be applied 

 

34

 

in accordance with Section 3.4(a).  Until so delivered, such proceeds shall be segregated and will be held by that Parity Lien Representative or that Parity Lien Secured Party, as the case may be, for the benefit of the Priority Lien Secured Parties.

 

(c)                                  This Section 3.4 is intended for the benefit of, and will be enforceable as a third party beneficiary by, each present and future holder of Secured Obligations, each present and future Secured Debt Representative and the Collateral Trustee as holder of Priority Liens and Parity Liens.  The Secured Debt Representative of each future Series of Secured Debt will be required to deliver a Collateral Trust Joinder including a lien sharing and priority confirmation as provided in Section 3.8 at the time of incurrence of such Series of Secured Debt.

 

(d)                                 In connection with the application of proceeds pursuant to Section 3.4(a), except as otherwise directed by an Act of Required Secured Parties, the Collateral Trustee may sell any non-cash proceeds for cash prior to the application of the proceeds thereof.

 

(e)                                  In making the determinations and allocations in accordance with Section 3.4(a), the Collateral Trustee may conclusively rely upon information supplied by the relevant Priority Lien Representative, Hedge Bank and Cash Management Bank as to the amounts of unpaid principal and interest and other amounts outstanding with respect to its respective Priority Lien Debt and any other Priority Lien Obligations, the amount of any Hedging Termination Value or “settlement amount” (or similar term) of any Secured Hedging Agreements and the amount of outstanding obligations under any Secured Cash Management Agreements included in the Priority Lien Obligations and information supplied by the relevant Parity Lien Representative as to the amounts of unpaid principal and interest and other amounts outstanding with respect to its respective Parity Lien Debt and any other Parity Lien Obligations.  In calculating the amount of Secured Obligations owed to any Hedge Bank or Cash Management Bank, the Secured Obligations owed to such Hedge Bank shall be determined by the relevant Hedge Bank or Cash Management Bank in accordance with the terms of the relevant Secured Hedging Agreement or Secured Cash Management Agreement, as applicable.  Notwithstanding the foregoing, the Collateral Trustee shall have no obligation to allocate proceeds to any Hedge Bank or Cash Management Bank that has not notified the Collateral Trustee in writing of its outstanding Priority Lien Obligations prior to any such allocation by the Collateral Trustee; provided that the Collateral Trustee has given Priority Lien Representative representing such Secured Hedging Obligations and Secured Cash Management Obligations at least 5 Business Days’ prior written notice that it shall be applying proceeds in accordance with Section 3.4(a); it being understood and agreed that (A) prior to the Discharge of Credit Agreement Obligations, the Priority Lien Representative representing Secured Hedging Obligations shall include reference to the Administrative Agent as representing Secured Hedging Obligations relating to the Specified Secured Hedging Agreements and (B) following the Discharge of Credit Agreement, if at any time prior to the Discharge of Priority Lien Obligations the only remaining Priority Lien Obligations are Secured Hedging Obligations, then the Priority Lien Representative representing Secured Hedging Obligations shall include the Person designated to the Collateral Trustee as such by the Act of Required Secured Parties (within the meaning of the term specified in the proviso to clause (ii) in the definition of the term “Act of Required Secured Parties”).

 

35

 

SECTION 3.5               Powers of the Collateral Trustee.

 

(a)           The Collateral Trustee is irrevocably authorized and empowered to enter into and perform its obligations and protect, perfect, exercise and enforce its interest, rights, powers and remedies under the Security Documents and applicable law and in equity and to act as set forth in this Article 3 or, subject to the other provisions of this Agreement, as requested in any lawful directions given to it from time to time in respect of any matter by an Act of Required Secured Parties.

 

(b)           No Secured Debt Representative or Secured Party (other than the Collateral Trustee) will have any liability whatsoever for any act or omission of the Collateral Trustee.

 

SECTION 3.6               Documents and Communications.  The Collateral Trustee will permit each Secured Debt Representative and each Secured Party upon reasonable written notice from time to time to inspect and copy, at the cost and expense of the party requesting such copies, any and all Security Documents and other documents, notices, certificates, instructions or communications received by the Collateral Trustee in its capacity as such.

 

SECTION 3.7               For Sole and Exclusive Benefit of the Secured Parties.  The Collateral Trustee will accept, hold, administer and enforce all Liens on the Collateral at any time transferred or delivered to it and all other interests, rights, powers and remedies at any time granted to or enforceable by the Collateral Trustee and all other property of the Trust Estates solely and exclusively for the benefit of the present and future holders of present and future Secured Obligations, and will distribute all proceeds received by it in realization thereon or from enforcement thereof solely and exclusively pursuant to the provisions of Section 3.4.

 

SECTION 3.8               Additional Secured Debt.

 

(a)           The Collateral Trustee will, as collateral trustee hereunder, perform its undertakings set forth in this Agreement with respect to any Secured Debt that is issued or incurred after the date hereof if:

 

(1)           such Secured Debt is identified as Parity Lien Debt or Priority Lien Debt in accordance with the procedures set forth in Section 3.8(b); and

 

(2)           unless such Funded Debt is issued under an existing Secured Debt Document for any Series of Secured Debt whose Secured Debt Representative is already party to this Agreement, the designated Secured Debt Representative identified pursuant to Section 3.8(b) signs a Collateral Trust Joinder and delivers the same to the Collateral Trustee.

 

Notwithstanding the foregoing, (x) the incurrence of revolving credit obligations under commitments that have previously been designated as Secured Debt and (y) the issuance of letters of credit and incurrence of reimbursement obligations in respect thereof under commitments that have previously been designated as Secured Debt, shall automatically 

 

36

 

constitute Secured Debt and shall not require compliance with the procedures set forth in Section 3.8(b).

 

(b)           The Borrower will be permitted to designate as Secured Debt hereunder any Funded Debt incurred by the Borrower or any other Grantor after the date of this Agreement in accordance with the terms of all applicable Secured Debt Documents.  The Borrower may only effect such designation by delivering to the Collateral Trustee an Additional Secured Debt Designation that:

 

(1)           states that the Borrower or such other Grantor intends to incur additional Secured Debt (“Additional Secured Debt”) which will either be (as specified in such Additional Secured Debt Designation) (i) Priority Lien Debt not prohibited by any Secured Debt Document to be incurred and secured by a Priority Lien equally and ratably with all previously existing and future Priority Lien Debt or (ii) Parity Lien Debt not prohibited by any Secured Debt Document to be incurred and secured with a Parity Lien equally and ratably with all previously existing and future Parity Lien Debt; and

 

(2)           specifies the name and address of the Secured Debt Representative for such Additional Secured Debt for purposes of this Agreement including Section 7.7.

 

Although the Borrower shall be required to deliver a copy of each Additional Secured Debt Designation and each Collateral Trust Joinder to each then existing Secured Debt Representative, the failure to so deliver a copy of the Additional Secured Debt and/or Collateral Trust Joinder to any then existing Secured Debt Representative shall not affect the status of such debt as Additional Secured Debt if the other requirements of this Section 3.8 are complied with.  Notwithstanding the foregoing, nothing in this Agreement will be construed to allow the Borrower or any other Grantor to incur additional Funded Debt or Liens if prohibited  by the terms of any Secured Debt Documents.

 

(c)           With respect to any Secured Debt that is issued or incurred after the date hereof, Borrower and each of the other Grantors agrees to take such actions (if any) as may from time to time reasonably be requested by the Collateral Trustee, any Priority Lien Representative, any Parity Lien Representative or any Act of Required Secured Parties, and enter into such technical amendments, modifications and/or supplements to the then existing Guarantees and Security Documents (or execute and deliver such additional Security Documents) as may from time to time be reasonably requested by such Persons (including as contemplated by clause (d) below),  to ensure that the Additional Secured Debt is secured by, and entitled to the benefits of, the relevant Security Documents, and each Secured Party (by its acceptance of the benefits hereof) hereby agrees to, and authorizes the Collateral Trustee to enter into, any such technical amendments, modifications and/or supplements (and additional Security Documents).  Borrower and each Grantor hereby further agree that, if there are any recording, filing or other similar fees payable in connection with any of the actions to be taken pursuant to this Section 3.8(c) or Section 3.8(d), all such amounts shall be paid by, and shall be for the account of, Borrower and the respective Grantors, on a joint and several basis.

 

37

 

(d)           Without limitation of the foregoing, Borrower and each of the other Grantors agrees to take the following actions with respect to any Real Property Collateral with respect to all Additional Secured Debt:

 

(1)           to the extent requested by the Secured Debt Representative for such Additional Secured Debt, within 90 days (as such period may be extended in the reasonable discretion of such Secured Debt Representative) after the effectiveness of the designation of such Additional Secured Debt,

 

(A)          Borrower and the other applicable Grantors shall enter into, and deliver to the Collateral Trustee a mortgage modification (each such modification, a “Modification”) or new mortgage or deed of trust with regard to each real property subject to a mortgage or deed of trust (each such mortgage or deed of trust a “Mortgage,” and each such property a “Mortgaged Property”), to the extent, and with such changes, as may be required to account for local law matters, at the time of such incurrence, in proper form for recording in all applicable jurisdictions, in a form and substance reasonably satisfactory to the Collateral Trustee, such Secured Debt Representative and the Borrower and such other Grantors are jointly and severally liable to pay all filing and recording fees and taxes, documentary stamp taxes and other taxes, charges and fees, if any, necessary for filing or recording in the recording office of each jurisdiction where such real property to be encumbered thereby is situated;

 

(B)          the Borrower or the applicable Grantor will cause to be delivered a local counsel opinion with respect to each such Modification or Mortgage in form and substance, and issued by law firms, in each case, reasonably satisfactory to the Collateral Trustee and the Controlling Representative;

 

(C)          the applicable Grantor shall deliver to the approved title company or other applicable service provider, the Collateral Trustee and/or all other relevant third parties all other items reasonably necessary to record each such Mortgage and Modification, and to create, perfect or preserve the validity, enforceability and priority of the Lien of the Mortgage(s) as set forth above and contemplated hereby and by the Secured Debt Documents; and

 

(2)           Borrower and the other applicable Grantors shall deliver to the Collateral Trustee a completed standard “life of loan” flood hazard determination form for each property encumbered by a Mortgage, and if the property is located in an area designated by the U.S. Federal Emergency Management Agency (or any successor agency) as having special flood or mud slide hazards, (i) a notification from the Borrower to the Collateral Trustee (“Borrower Notice”) and (if applicable) notification to the Collateral Trustee that flood insurance coverage under the National Flood Insurance Program (“NFIP”) created by the U.S. Congress pursuant to the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973, the National Flood Insurance Reform Act of 1994 and the Flood Insurance Reform Act of 2004 is not available because the applicable community does not participate in the NFIP, (ii)

 

38

 

documentation evidencing the Collateral Trustee’s receipt of the Borrower Notice (e.g., countersigned Borrower Notice, return receipt of certified U.S. Mail, or overnight delivery), and (iii) if a Borrower Notice is required to be given and flood insurance is available in the community in which the property is located, a copy of one of the following: the flood insurance policy, the Borrower’s application for a flood insurance policy plus proof of premium payment, a declaration page confirming that flood insurance has been issued, or such other evidence of flood insurance reasonably satisfactory to the Collateral Trustee.

 

(e)           The Borrower shall have the right at any time on or after the Discharge of Priority Lien Obligations has occurred, to enter into any Priority Lien Document evidencing a Priority Lien Debt which incurrence is not prohibited by the applicable Secured Debt Documents, and to designate such Funded Debt as Priority Lien Debt in accordance with Section 3.8(b).  At any time from and after the date of such designation pursuant to Section 3.8(b) (the “Reference Date”), the obligations under such Priority Lien Document shall automatically and without further action be treated as Priority Lien Debt for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Collateral set forth herein, and the Parity Lien Obligations shall be at all times subordinated and junior to such Priority Liens Obligations pursuant to the terms of this Agreement, including with respect to Parity Lien Obligations that were incurred or outstanding on or prior to the Reference Date.

 

ARTICLE 4.               OBLIGATIONS ENFORCEABLE BY THE BORROWER AND THE OTHER GRANTORS

 

SECTION 4.1               Release of Liens on Collateral.

 

(a)           The Collateral Trustee’s Liens upon the Collateral will be released in any of the following circumstances:

 

(1)           in whole, upon (A) payment in full and discharge of all outstanding Secured Debt and all other Secured Obligations (other than Secured Cash Management Obligations and any obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities in respect of which no claim or demand for payment has been made at such time) that are outstanding, due and payable at the time all of the Secured Debt is paid in full and discharged; (B) termination or expiration of all commitments to extend credit under all Secured Debt Documents and the cancellation or termination, cash collateralization (at the lower of (1) 105% of the aggregate undrawn amount and (2) the percentage of the aggregate undrawn amount required for release of Liens under the terms of the applicable Secured Debt Documents) of all outstanding letters of credit issued pursuant to any Secured Debt Documents or, solely to the extent if any agreed to by the issuer of any outstanding letter of credit issued pursuant to any Secured Debt Document, the issuance of a back to back letter of credit in favor of the issuer of any such outstanding letter of credit in an amount equal to such outstanding letter of credit and issued by a financial institution acceptable to such issuer; and (C) with respect to any Secured Hedging Obligations, (x) the cash collateralization of all such Secured Hedging Obligations on terms satisfactory to each applicable Hedge Bank or the making of such other arrangements satisfactory to the applicable Hedge Bank or (y) the 

 

39

 

expiration and termination of all Secured Hedging Agreements evidencing such Secured Hedging Obligations and payment in full in cash of all Secured Hedging Agreements with respect thereto;

 

(2)           as to any Collateral that is sold, transferred or otherwise disposed of by the Borrower or any other Grantor to a Person that is not (either before or after such sale, transfer or disposition) the Borrower or any other Grantor in a transaction or other circumstance that is permitted by all of the other Secured Debt Documents, at the time of such sale, transfer or other disposition or to the extent of the interest sold, transferred or otherwise disposed of; provided, that the Collateral Trustee’s Liens upon the Collateral will not be released if the sale or disposition is to a Person who is required to succeed to, and is substituted for, the Borrower or a Grantor under Article V of the Indenture (or any analogous provision in any other Secured Debt Document);

 

(3)           as to a release of less than all or substantially all of the Collateral (other than pursuant to clause (2) above), if directed by (x) the Controlling Representative or (y) an Act of Required Secured Parties, in each case, accompanied by an Officer’s Certificate to the effect that the release was permitted by each applicable Secured Debt Documents; provided that this clause (3) shall not apply to (i) a Discharge of Priority Lien Obligations upon payment in full thereof or (ii) sales or dispositions subject to Section 5.01 of the Indenture (or any analogous provision in any other Secured Debt Document);

 

(4)           as to a release of less than all or substantially all of the Collateral securing the Priority Lien Debt (other than pursuant to clause (2) above), (i) if directed by (x) the Controlling Priority Lien Representative or (y) an Act of Required Secured Parties, in each case, accompanied by an Officer’s Certificate to the effect that the release was permitted by the Priority Lien Documents and (ii) upon the release of the Priority Liens on such Collateral, then the Parity Liens on such Collateral shall be automatically, unconditionally and simultaneously released; provided, that this clause (4) shall not apply to (A) Discharge of Priority Lien Obligations upon payment in full thereof or (B) sales or dispositions subject to Section 5.01 of the Indenture (or any analogous provision in any other Secured Debt Document);

 

(5)           as to a release of all or substantially all of the Collateral (other than pursuant to clause (1) above), if (A) consent to release of that Collateral has been given by the requisite percentage or number of holders of each applicable Series of Secured Debt at the time outstanding as provided for in the applicable Secured Debt Documents and (B) the Borrower has delivered an Officer’s Certificate to the Collateral Trustee certifying that any such necessary consents have been obtained;

 

(6)           (i) if any Guarantor is released from its obligations under each of the Priority Lien Documents (including as a result of being designated an Unrestricted Subsidiary or otherwise ceasing to be a Subsidiary) pursuant to the Priority Lien Documents, then the Priority Liens on the Collateral owned by such Guarantor and the obligations of such Guarantor under its Guarantee of the Priority Lien Obligations, shall be automatically, unconditionally and simultaneously released and (ii) if any Guarantor is 

40

 

released from its obligations under each of the Parity Lien Documents (including as a  result of being designated an Unrestricted Subsidiary or otherwise ceasing to be a Subsidiary), then the Parity Liens on such Collateral and the obligations of such Guarantor under its Guarantee of the Parity Lien Obligations, shall be automatically, unconditionally and simultaneously released; provided that this clause (6) shall not apply to a Discharge of Priority Lien Obligations upon payment in full thereof;

 

(7)           as to any Series of Secured Debt to the extent that any asset is or becomes released or excluded from the Collateral under the Secured Debt Documents of such Series of Secured Debt;

 

(8)           notwithstanding any of the foregoing, if the Collateral Trustee is exercising its rights or remedies with respect to the Collateral under the Priority Lien Security Documents pursuant to an Act of Required Secured Parties, and the Collateral Trustee releases any of the Priority Liens on any part of the Collateral or any Guarantor is released from its obligations under its Guarantee of the Priority Lien Obligations in connection therewith, then the Parity Liens on such Collateral and the obligations of such Guarantor under its Guarantee of the Parity Lien Obligations, shall be automatically, unconditionally and simultaneously released.  If in connection with any exercise of rights and remedies by the Collateral Trustee under the Priority Lien Security Documents pursuant to an Act of Required Secured Parties, the equity interests of any Person are foreclosed upon or otherwise disposed of and the Collateral Trustee releases Priority Lien on the property or assets of such Person then the Parity Liens with respect to the property or assets of such Person will be concurrently and automatically released to the same extent as the Priority Liens on such property or assets are released.

 

(b)           The Collateral Trustee agrees for the benefit of the Borrower and the other Grantors that if the Collateral Trustee at any time receives:

 

(1)           an Officer’s Certificate stating that (A) the signing officer has read Article 4 of this Agreement and understands the provisions and the definitions relating hereto, (B) such officer has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not the conditions precedent in this Agreement and all other Secured Debt Documents, if any, relating to the release of the Collateral have been complied with and (C) in the opinion of such officer, such conditions precedent, if any, have been complied with; and

 

(2)           the proposed instrument or instruments releasing such Lien as to such property in recordable form, if applicable, or such other proposed acknowledgment of such release of Lien as to such property; and

 

(3)           in the case of clause (3) or (4) of Section 4.1(a), the other direction required by such clause;

 

then the Collateral Trustee will execute (with such acknowledgements and/or notarizations as are requested) and deliver such release or acknowledgment to the Borrower or other applicable Grantor on or before the date specified in such request.

 

41

 

(c)           The Collateral Trustee hereby agrees that:

 

(1)           in the case of any release pursuant to clause (2) of Section 4.1(a), if the terms of any such sale, transfer or other disposition require the payment of the purchase price to be contemporaneous with the delivery of the applicable release, then, at the written request of and at the expense of the Borrower or other applicable Grantor, the Collateral Trustee will either (A) be present at and deliver the release at the closing of such transaction or (B) deliver the release under customary escrow arrangements that permit such contemporaneous payment and delivery of the release; and

 

(2)           at any time when a Secured Debt Default under a Series of Secured Debt that constitutes Parity Lien Debt has occurred and is continuing, within one Business Day of the receipt by it of any Act of Required Secured Parties pursuant to Section 4.1(a)(3), the Collateral Trustee will deliver a copy of such Act of Required Secured Parties to each Secured Debt Representative.

 

SECTION 4.2               [Reserved]

 

SECTION 4.3               Collateral Trustee not Required to Serve, File or Record.  The Collateral Trustee is not required to serve, file, register or record any instrument releasing or subordinating its Liens on any Collateral; provided, however, that if the Borrower or any other Grantor shall make a written demand for a termination statement under Section 9-513(c) of the UCC, the Collateral Trustee shall comply with the written request of such Borrower or Grantor to comply with the requirements of such UCC provision; provided, further, that the Collateral Trustee must first confirm with the Secured Debt Representatives that the requirements of such UCC provisions have been satisfied.

 

SECTION 4.4               Release of Liens in Respect of any Series of Priority Lien Debt, any Series of Parity Lien Debt or Affiliate Securities.

 

(a)    Release of Liens in Respect of the Notes.  In addition to any release pursuant to Section 4.1 hereof, the Collateral Trustee’s Parity Lien will no longer secure the Notes outstanding under the Indenture or any other Obligations under the Indenture, and the right of the holders of the Notes and such Obligations to the benefits and proceeds of the Collateral Trustee’s Parity Lien on the Collateral will terminate and be discharged:

 

(1)           upon satisfaction and discharge of the Indenture as set forth under Article XI of the Indenture;

 

(2)           upon a Legal Defeasance or Covenant Defeasance (each as defined under the Indenture) of the Notes as set forth under Article VIII of the Indenture;

 

(3)           upon payment in full and discharge of all Notes outstanding under the Indenture and all Obligations that are outstanding, due and payable under the Indenture at the time the Notes are paid in full and discharged;

 

42

 

(4)           in whole or in part, upon the direction of the Trustee or with the consent of the holders of the requisite percentage of Notes in accordance with Article IX of the Indenture; or

 

(5)           upon the occurrence of any of the circumstances described under Section 4.1 or Section 3.2 that provides for (or permits) a release of Parity Liens under this Agreement.

 

(b)    Release of Liens in Respect of any Series of Priority Lien Debt or any Series of Parity Lien Debt other than the  Notes.   In addition to any release pursuant to Section 4.1 hereof, as to any Series of Priority Lien Debt, the Collateral Trustee’s Priority Lien will no longer secure such Series of Priority Lien Debt (i) if the requirements of a Discharge of Priority Lien Obligations are satisfied with respect to such Series of Priority Lien Debt and all Priority Lien Obligations (including, for the avoidance of doubt, with respect to all Secured Hedging Obligations but excluding, for the avoidance of doubt, any Secured Cash Management Obligations) related thereto or (ii) upon the direction of the Priority Lien Representative for such Series of Priority Lien Debt or with the consent of the holders of the requisite percentage of the Priority Lien Debt of such Series in accordance with the provisions of the applicable Priority Lien Documents.   Notwithstanding anything to the contrary, if the requirements set forth in the immediately preceding sentence are satisfied, the Collateral Trustee’s Priority Lien will no longer secure any Secured Cash Management Obligations relating to such Series of Priority Lien Debt (without notice to, or vote or consent of, any Cash Management Bank), whether or not on the date of the Discharge of Priority Lien Obligations  with respect to the Priority Lien Debt of such Series occurs there may be any outstanding Secured Cash Management Obligations.  In addition to any release pursuant to Section 4.1 hereof, as to any Series of Parity Lien Debt other than the Notes, the Collateral Trustee’s Parity Lien will no longer secure such Series of Parity Lien Debt (i) if such Parity Lien Debt has been paid in full in cash, all commitments to extent credit in respect of such Series of Parity Lien Debt have been terminated and all other Parity Lien Obligations related thereto that are outstanding and unpaid at the time such Series of Parity Lien Debt is paid are also paid in full in cash (other than any obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities in respect of which no claim or demand for payment has been made at such time) or (ii) upon the direction of the Parity Lien Representative for such Series of Parity Lien Debt or with the consent of the holders of the requisite percentage of the Parity Lien Debt of such Series in accordance with the provisions of the applicable Parity Lien Documents.

 

(c)     Release of Liens with respect to Affiliate Securities.  In the event that Rule 3-16 of Regulation S-X under the Securities Act is amended, modified or interpreted by the Securities and Exchange Commission to require (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would require) the filing with the Securities and Exchange Commission of separate financial statements of any “affiliate” of the Borrower due to the fact that such affiliate’s “securities” secure any Series of Secured Debt, then such “securities” shall automatically be deemed not to constitute security for any Series of Secured Debt so affected (but shall continue to constitute collateral for any Series of Secured Debt not having the above described effect).   As used herein, “securities” and “affiliate” shall have the meaning set forth in Regulation S-X or such other law, rule or regulation, as applicable.  In addition, any

 

43

 

Series of Secured Debt may disclaim the benefit of any Affiliate Securities in any Collateral Trust Joinder.

 

ARTICLE 5.         IMMUNITIES OF THE COLLATERAL TRUSTEE

 

SECTION 5.1               No Implied Duty.  The Collateral Trustee will not have any fiduciary duties nor will it have responsibilities or obligations other than those expressly assumed by it in this Agreement and the other Security Documents.  The Collateral Trustee will not be required to take any action that is contrary to applicable law or any provision of this Agreement or the other Security Documents.

 

SECTION 5.2               Appointment of Agents and Advisors.  The Collateral Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, accountants, appraisers or other experts or advisors selected by it in good faith as it may reasonably require and will not be responsible for any misconduct or negligence on the part of any of them.

 

SECTION 5.3               Other Agreements.  The Collateral Trustee has accepted its appointment as Collateral Trustee hereunder and is bound by the Security Documents  executed by the Collateral Trustee as of the date of this Agreement and, as directed by an Act of Required Secured Parties, the Collateral Trustee shall execute additional Security Documents delivered to it after the date of this Agreement; provided, however, that such additional Security Documents do not adversely affect the rights, privileges, benefits and immunities of the Collateral Trustee.  The Collateral Trustee will not otherwise be bound by, or be held obligated by, the provisions of any credit agreement, indenture or other agreement governing Secured Debt (other than this Agreement and the other Security Documents to which it is a party).

 

SECTION 5.4               Solicitation of Instructions.

 

(a)           The Collateral Trustee may at any time solicit written confirmatory instructions, in the form of an Act of Required Secured Parties, an Officer’s Certificate or an order of a court of competent jurisdiction, as to any action that it may be requested or required to take, or that it may propose to take, in the performance of any of its obligations under this Agreement or the other Security Documents.

 

(b)           No written direction given to the Collateral Trustee by an Act of Required Secured Parties that in the sole judgment of the Collateral Trustee imposes, purports to impose or might reasonably be expected to impose upon the Collateral Trustee any obligation or liability not set forth in or arising under this Agreement and the other Security Documents will be binding upon the Collateral Trustee unless the Collateral Trustee elects, at its sole option, to accept such direction.

 

SECTION 5.5               Limitation of Liability.  The Collateral Trustee will not be responsible or liable for any action taken or omitted to be taken by it hereunder or under any other Security Document, except for its own negligence, bad faith or willful misconduct as determined by a court of competent jurisdiction.

 

44

 

SECTION 5.6               Documents in Satisfactory Form.  The Collateral Trustee will be entitled to require that all agreements, certificates, opinions, instruments and other documents at any time submitted to it, including those expressly provided for in this Agreement, be delivered to it in a form and with substantive provisions reasonably satisfactory to it.

 

SECTION 5.7               Entitled to Rely.  The Collateral Trustee may seek and conclusively rely upon, and shall be fully protected in relying upon, any judicial order or judgment, upon any advice, opinion or statement of legal counsel, independent consultants and other experts selected by it in good faith and upon any certification, instruction, notice or other writing delivered to it by the Borrower or any other Grantor in compliance with the provisions of this Agreement or delivered to it by any Secured Debt Representative as to the Secured Parties for whom it acts, without being required to determine the authenticity thereof or the correctness of any fact stated therein or the propriety or validity of service thereof.  The Collateral Trustee may act in reliance upon any instrument comporting with the provisions of this Agreement or any signature reasonably believed by it to be genuine and may assume that any Person purporting to give notice or receipt or advice or make any statement or execute any document in connection with the provisions hereof or the other Security Documents has been duly authorized to do so. To the extent an Officer’s Certificate or opinion of counsel is required or permitted under this Agreement to be delivered to the Collateral Trustee in respect of any matter, the Collateral Trustee may rely conclusively on Officer’s Certificate or opinion of counsel as to such matter and such Officer’s Certificate or opinion of counsel shall be full warranty and protection to the Collateral Trustee for any action taken, suffered or omitted by it under the provisions of this Agreement and the other Security Documents.

 

SECTION 5.8               Secured Debt Default.  The Collateral Trustee will not be required to inquire as to the occurrence or absence of any Secured Debt Default and will not be affected by or required to act upon any notice or knowledge as to the occurrence of any Secured Debt Default unless and until it is directed by an Act of Required Secured Parties.

 

SECTION 5.9               Actions by Collateral Trustee.  As to any matter not expressly provided for by this Agreement or the other Security Documents, the Collateral Trustee will act or refrain from acting as directed by an Act of Required Secured Parties and will be fully protected if it does so, and any action taken, suffered or omitted pursuant to hereto or thereto shall be binding on the Secured Parties.

 

SECTION 5.10             Security or Indemnity in favor of the Collateral Trustee.  The Collateral Trustee will not be required to advance or expend any funds or otherwise incur any financial liability in the performance of its duties or the exercise of its powers or rights hereunder unless it has been provided with security or indemnity reasonably satisfactory to it against any and all liability or expense which may be incurred by it by reason of taking or continuing to take such action.

 

SECTION 5.11             Rights of the Collateral Trustee.  In the event of any conflict between any terms and provisions set forth in this Agreement and those set forth in any other Security Document, the terms and provisions of this Agreement shall supersede and control the terms and provisions of such other Security Document.  In the event there is any bona fide,

 

45

 

good faith disagreement between the other parties to this Agreement or any of the other Security Documents resulting in adverse claims being made in connection with Collateral held by the Collateral Trustee and the terms of this Agreement or any of the other Security Documents do not unambiguously mandate the action the Collateral Trustee is to take or not to take in connection therewith under the circumstances then existing, or the Collateral Trustee is in doubt as to what action it is required to take or not to take hereunder or under the other Security Documents, it will be entitled to refrain from taking any action (and will incur no liability for doing so) until directed otherwise in writing by a request signed jointly by the parties hereto entitled to give such direction or by order of a court of competent jurisdiction.

 

SECTION 5.12             Limitations on Duty of Collateral Trustee in Respect of Collateral.

 

(a)           Beyond the exercise of reasonable care in the custody of Collateral in its possession, the Collateral Trustee will have no duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto and the Collateral Trustee will not be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any Liens on the Collateral; provided, however, that, notwithstanding the foregoing, the Collateral Trustee will execute, file or record UCC-3 continuation statements and other documents and instruments to preserve, protect or perfect the security interests granted to the Collateral Trustee (subject to the priorities set forth herein) if it shall receive a specific written request to execute, file or record the particular continuation statement or other specific document or instrument by any Secured Debt Representative.  The Collateral Trustee shall deliver to each other Secured Debt Representative a copy of any such written request.  The Collateral Trustee will be deemed to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property, and the Collateral Trustee will not be liable or responsible for any loss or diminution in the value of any of the Collateral by reason of the act or omission of any carrier, forwarding agency or other agent or bailee selected by the Collateral Trustee in good faith.

 

(b)           Except as provided in Section 5.12(a), the Collateral Trustee will not be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Liens in any of the Collateral, whether impaired by operation of law or by reason of any action or omission to act on its part hereunder, except to the extent such action or omission constitutes negligence, bad faith or willful misconduct on the part of the Collateral Trustee, for the validity or sufficiency of the Collateral or any agreement or assignment contained therein, for the validity of the title of any Grantor to the Collateral, for insuring the Collateral or for the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the Collateral.  The Collateral Trustee hereby disclaims any representation or warranty to the current and future holders of the Secured Obligations concerning the perfection of the security interests granted to it or in the value of any Collateral.

 

46

 

SECTION 5.13             Assumption of Rights, Not Assumption of Duties.  Notwithstanding anything to the contrary contained herein:

 

(1)           each of the parties thereto will remain liable under each of the Security Documents (other than this Agreement) to the extent set forth therein to perform all of their respective duties and obligations thereunder to the same extent as if this Agreement had not been executed;

 

(2)           the exercise by the Collateral Trustee of any of its rights, remedies or powers hereunder will not release such parties from any of their respective duties or obligations under the other Security Documents; and

 

(3)           the Collateral Trustee will not be obligated to perform any of the obligations or duties of any of the parties to the Security Documents other than the Collateral Trustee.

 

SECTION 5.14             No Liability for Clean Up of Hazardous Materials.  In the event that the Collateral Trustee is required to acquire title to an asset for any reason, or take any managerial action of any kind in regard thereto, in order to carry out any fiduciary or trust obligation for the benefit of another, which in the Collateral Trustee’s sole discretion may cause the Collateral Trustee to be considered an “owner or operator” under any environmental laws or otherwise cause the Collateral Trustee to incur, or be exposed to, any environmental liability or any liability under any other federal, state or local law, the Collateral Trustee reserves the right, instead of taking such action, either to resign as Collateral Trustee or to arrange for the transfer of the title or control of the asset to a court appointed receiver.  The Collateral Trustee will not be liable to any Person for any environmental liability or any environmental claims or contribution actions under any federal, state or local law, rule or regulation by reason of the Collateral Trustee’s actions and conduct as authorized, empowered and directed hereunder or relating to any kind of discharge or release or threatened discharge or release of any hazardous materials into the environment.

 

ARTICLE 6.               RESIGNATION AND REMOVAL OF THE COLLATERAL TRUSTEE

 

SECTION 6.1               Resignation or Removal of Collateral Trustee.  Subject to the appointment of a successor Collateral Trustee as provided in Section 6.2 and the acceptance of such appointment by the successor Collateral Trustee:

 

(a)           the Collateral Trustee may resign at any time by giving not less than 30 days’ notice of resignation to each Secured Debt Representative and the Borrower; and

 

(b)           the Collateral Trustee may be removed at any time, with or without cause, by an Act of Required Secured Parties.

 

SECTION 6.2               Appointment of Successor Collateral Trustee.  Upon any such resignation or removal, a successor Collateral Trustee may be appointed by an Act of Required Secured Parties with the consent of the Borrower, not to be unreasonably withheld, delayed or conditioned.  If no successor Collateral Trustee has been so appointed and accepted such appointment within 30 days after the predecessor Collateral Trustee gave notice of 

 

47

 

resignation or was removed, the retiring Collateral Trustee may (at the expense of the Borrower), at its option, appoint a successor Collateral Trustee with the consent of the Borrower, not to be unreasonably withheld, delayed or conditioned, or petition a court of competent jurisdiction for appointment of a successor Collateral Trustee, which must be a bank or trust company:

 

(1)           authorized to exercise corporate trust powers;

 

(2)           having a combined capital and surplus of at least $250,000,000;

 

(3)           that is not a Parity Lien Representative or the Borrower or an Affiliate of the Borrower.

 

The Collateral Trustee will fulfill its obligations hereunder until a successor Collateral Trustee meeting the requirements of this Section 6.2 has accepted its appointment as Collateral Trustee and the provisions of Section 6.3 have been satisfied.

 

SECTION 6.3               Succession.  When the Person so appointed as successor Collateral Trustee accepts such appointment:

 

(1)         such Person will succeed to and become vested with all the rights, powers, privileges and duties of the predecessor Collateral Trustee, and the predecessor Collateral Trustee will be discharged from its duties and obligations hereunder; and

 

(2)         the predecessor Collateral Trustee will (at the expense of the Borrower) promptly transfer all Liens and collateral security and other property of the Trust Estates within its possession or control to the possession or control of the successor Collateral Trustee and will execute instruments and assignments as may be necessary or desirable or reasonably requested by the successor Collateral Trustee to transfer to the successor  Collateral Trustee all Liens, interests, rights, powers and remedies of the predecessor Collateral Trustee in respect of the Security Documents or the Trust Estates.

 

Thereafter the predecessor Collateral Trustee will remain entitled to enforce the immunities granted to it in Article 5 and the provisions of Sections 7.11 and 7.12.

 

SECTION 6.4               Merger, Conversion or Consolidation of Collateral Trustee.  Any Person into which the Collateral Trustee may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Collateral Trustee shall be a party, or any Person succeeding to the business of the Collateral Trustee shall be the successor of the Collateral Trustee pursuant to Section 6.3, provided that (i) without the execution or filing of any paper with any party hereto or any further act on the part of any of the parties hereto, except where an instrument of transfer or assignment is required by law to effect such succession, anything herein to the contrary notwithstanding, such Person satisfies the eligibility requirements specified in clauses (1) through (4) of Section 6.2 and (ii) prior to any such merger, conversion or consolidation, the Collateral Trustee shall have notified the Borrower, each Priority Lien Representative and each Parity Lien Representative thereof in writing.

 

48

 

ARTICLE 7.               MISCELLANEOUS PROVISIONS

 

SECTION 7.1               Amendment.

 

(a)           (x) No amendment or supplement to the provisions of this Agreement will be effective without the approval of the Borrower and the Collateral Trustee acting as directed by (I) if the Discharge of Priority Lien Obligations has not occurred, the Controlling Priority Lien Representative and (II) the Parity Lien Representative that represents the Series of Parity Lien Debt with the then largest outstanding principal amount in accordance with the Parity Lien Documents and (y) no amendment or supplement to the provisions of any other Security Document shall be effective without the approval of the Borrower or any other applicable Grantor party thereto and the Collateral Trustee acting at the direction of (A) in the case of a Priority Lien Security Document, the Controlling Priority Lien Representative or (B) in the case of a Parity Lien Security Document, the Parity Lien Representative that represents the Series of Parity Lien Debt with the then largest outstanding principal amount in accordance with the Parity Lien Documents, except that:

 

(1)           any amendment or supplement that has the effect solely of:

 

(A)          adding or maintaining Collateral, securing additional Secured Obligations that are otherwise not prohibited by the terms of any Secured Debt Document to be secured by the Collateral or preserving, perfecting or establishing the Liens thereon or the rights of the Collateral Trustee therein; or

 

(B)          providing for the assumption of any Grantor’s obligations under any Secured Debt Document in the case of a merger or consolidation or sale of all or substantially all of the assets of such Grantor to the extent not prohibited  by the terms of the Indenture, the Credit Agreement or any other Secured Debt Documents, as applicable;

 

will become effective when executed and delivered by the Borrower or any other applicable Grantor party thereto and the Collateral Trustee, if the Borrower executes and delivers an Officer’s Certificate certifying that such amendment or supplement is permitted under this clause (1);

 

(2)           no amendment or supplement that reduces, impairs or adversely affects the right of any Secured Party:

 

(A)          to vote its outstanding Secured Debt as to any matter described as subject to an Act of Required Secured Parties (or amends the provisions of this Section 7.1(a) (2) or the definitions of “Act of Required Secured Parties”, “Act of Required Parity Lien Debtholders”, “Major Non-Controlling Priority Representative” or “Controlling Representative”);

 

(B)          to share in the order of application described in Section 3.4 in the proceeds of enforcement of or realization on any Collateral that has not been released in accordance with the provisions described in Section 4.1 or 4.4;

 

49

 

(C)          to require that Liens securing Secured Obligations be released only as set forth in the provisions described in Section 4.1 or 4.4; or

 

(D)          under this Section 7.1,

 

will become effective without the consent of the requisite percentage or number of holders of each Series of Secured Debt so affected under the applicable Secured Debt Documents;

 

(3)           no amendment or supplement that imposes any obligation upon the Collateral Trustee or any Secured Debt Representative or adversely affects the rights, duties, obligations, protections, indemnities or immunities of the Collateral Trustee or any Secured Debt Representative, respectively, in its capacity as such will become effective without the written consent of the Collateral Trustee or such Secured Debt Representative, respectively; and

 

(4)           this Agreement may be modified to add in accordance with this Agreement (x) an additional Grantor by an agreement substantially in the form of Exhibit C executed by such additional Grantor, and (y) Additional Secured Debt by an agreement substantially in the form of Exhibit B executed by the additional Secured Debt Representative.

 

(b)           Notwithstanding Section 7.1(a) but subject to Sections 7.1(a)(2) and 7.1(a)(3), any amendment or waiver of, or any consent under, any provision of any Priority Lien Security Document will apply automatically to any comparable provision of any comparable Parity Lien Security Document without the consent of any Parity Lien Secured Party and without any action by the Borrower or any other Grantor or any holder of notes or other Parity Lien Secured Party.

 

(c)           The Collateral Trustee will not enter into any amendment or supplement unless it has received an Officer’s Certificate to the effect that such amendment or supplement will not result in a breach of any provision or covenant contained in any of the Secured Debt Documents.  Prior to executing any amendment or supplement pursuant to this Section 7.1, the Collateral Trustee will be entitled to receive an opinion of counsel of the Borrower to the effect that the execution of such document is authorized or permitted hereunder, and with respect to amendments adding Collateral, an opinion of counsel of the Borrower addressing customary creation and perfection, and if such additional Collateral consists of equity interests of any Person which equity interests constitute certificated securities, priority matters with respect to such additional Collateral (which opinion may be subject to customary assumptions and qualifications).

 

SECTION 7.2               Voting.  In connection with any matter under this Agreement requiring a vote of holders of Secured Debt, each Series of Secured Debt will cast its votes in accordance with the Secured Debt Documents governing such Series of Secured Debt.  The amount of Secured Debt to be voted by a Series of Secured Debt will equal (1) the aggregate principal amount of Secured Debt held by such Series of Secured Debt (including outstanding letters of credit whether or not then available or drawn), plus (2) other than in connection with an exercise of remedies, the aggregate unfunded commitments to extend credit which, when funded,

 

50

 

would constitute Funded Debt of such Series of Secured Debt.  Following and in accordance with the outcome of the applicable vote under its Secured Debt Documents, the Secured Debt Representative of each Series of Secured Debt will cast all of its votes under that Series of Secured Debt as a block in respect of any vote under this Agreement.

 

SECTION 7.3               Further Assurances.

 

(a)           The Borrower and each of the other Grantors will do or cause to be done all acts and things that may be required, or that the Collateral Trustee from time to time may reasonably request, to assure and confirm that the Collateral Trustee holds, for the benefit of the Secured Parties, duly created and enforceable and perfected Liens upon the Collateral, (including any property or assets that are acquired or otherwise become, or are required by any Secured Debt Document to become, Collateral after the date hereof), in each case as contemplated by, and with the Lien priority required under, the Secured Debt Documents.

 

(b)           Upon the reasonable request of the Collateral Trustee or any Secured Debt Representative at any time and from time to time, the Borrower and each of the other Grantors will promptly execute, acknowledge and deliver such security documents, instruments, certificates, notices and other documents, and take such other actions as may be reasonably required, or that the Collateral Trustee may reasonably request, to create, perfect, protect, assure or enforce the Liens and benefits intended to be conferred, in each case as contemplated by the Secured Debt Documents for the benefit of the Secured Parties.

 

SECTION 7.4               Perfection of Junior Trust Estate.

 

Solely for purposes of perfecting the Liens of the Collateral Trustee in its capacity as agent of the Parity Lien Secured Parties and the Parity Lien Representatives in any portion of the Junior Trust Estate in the possession or control of the Collateral Trustee (or its agents or bailees) as part of the Senior Trust Estate including, without limitation, any instruments, goods, negotiable documents, tangible chattel paper, certificated securities, securities accounts or money, the Collateral Trustee, the Priority Lien Secured Parties and the Priority Lien Representatives hereby acknowledge that the Collateral Trustee also holds such property as gratuitous bailee for the benefit of the Collateral Trustee for the benefit of the Parity Lien Secured Parties and the Parity Lien Representatives (such bailment being intended, among other things, to satisfy the requirements of Sections 8-106(d)(d), 8-301(a)(2) and 9-313(c) of the UCC).  Solely with respect to any deposit accounts under the control (within the meaning of Section 9-104 of the UCC) of the Collateral Trustee in its capacity as agent of the holders of the Priority Lien Obligations, the Collateral Trustee agrees to also hold control over such deposit accounts as gratuitous agent for the benefit of the Parity Lien Secured Parties and the Parity Lien Representatives.

 

SECTION 7.5               [Reserved].

 

SECTION 7.6               Successors and Assigns.

 

(a)           Except as provided in Section 5.2, the Collateral Trustee may not, in its capacity as such, delegate any of its duties or assign any of its rights hereunder, and any attempted delegation or assignment of any such duties or rights will be null and void.  All

 

51

 

obligations of the Collateral Trustee hereunder will inure to the sole and exclusive benefit of, and be enforceable by, each Secured Debt Representative and each present and future holder of Secured Obligations, each of whom will be entitled to enforce this Agreement as a third-party beneficiary hereof, and all of their respective successors and assigns.

 

(b)           Neither the Borrower nor any other Grantor may delegate any of its duties or assign any of its rights hereunder, and any attempted delegation or assignment of any such duties or rights will be null and void.  All obligations of the Borrower and the other Grantors hereunder will inure to the sole and exclusive benefit of, and be enforceable by, the Collateral Trustee, each Secured Debt Representative and each present and future holder of Secured Obligations, each of whom will be entitled to enforce this Agreement as a third-party beneficiary hereof, and all of their respective successors and assigns.

 

SECTION 7.7               Delay and Waiver.  No failure to exercise, no course of dealing with respect to the exercise of, and no delay in exercising, any right, power or remedy arising under this Agreement or any of the other Security Documents will impair any such right, power or remedy or operate as a waiver thereof.  No single or partial exercise of any such right, power or remedy will preclude any other or future exercise thereof or the exercise of any other right, power or remedy.  The remedies herein are cumulative and are not exclusive of any remedies provided by law.

 

SECTION 7.8               Notices.  Any communications, including notices and instructions, between the parties hereto or notices provided herein to be given may be given to the following addresses:

 

	
If   to the Collateral Trustee:
    	
Lord   Securities Corporation
    
	
 
    	
48   Wall Street, 27th Floor
    
	
 
    	
New   York, NY 10005
    
	
 
    	
Attention:   General Counsel
    
	
 
    	
Telephone:   (212) 346-9000
    
	
 
    	
Edward.oconnell@tmf-group.com
    
	
 
    	
 
    
	
If   to the Borrower or any other
    	
 
    
	
Grantor:
    	
Foresight   Energy
    
	
 
    	
211   North Broadway, Suite 2600
    
	
 
    	
St.   Louis, Missouri 63102
    
	
 
    	
Attention:   Rashda M. Buttar
    
	
 
    	
Telephone:   (314) 932-6103
    
	
 
    	
Rashda.buttar@foresight.com
    
	
 
    	
 
    
	
If   to the Administrative Agent:
    	
The   Huntington National Bank
    
	
 
    	
41   South High Street, HC0843
    
	
 
    	
Columbus,   Ohio 43287
    
	
 
    	
Attention:   Joshua D. Elsea
    
	
 
    	
Phone:   (614) 480-5429
    
	
 
    	
Josh.Elsea@huntington.com
    

 

52

 

	
If to the Trustee:
    	
 
    	
Wilmington Trust, National Association
    
	
 
    	
 
    	
Global Capital Markets
    
	
 
    	
 
    	
1100 North Market Street
    
	
 
    	
 
    	
Wilmington, DE 19890
    
	
 
    	
 
    	
Fax: (302) 636-4149
    
	
 
    	
 
    	
Attn: Foresight Administrator
    

 

and if to any other Secured Debt Representative, to such address as it may specify by written notice to the parties named above.

 

All notices and communications will be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery, to the relevant address set forth above or, as to holders of Secured Debt, its address shown on the register kept by the office or agency where the relevant Secured Debt may be presented for registration of transfer or for exchange; provided that all notices and communications to the Trustee shall be delivered in accordance with the provisions of Section 13.01 of the Indenture.  To the extent applicable, any notice or communication will also be so mailed to any Person described in § 313(c) of the Trust Indenture Act of 1939, as amended, to the extent required thereunder.  Failure to mail a notice or communication to a holder of Secured Debt or any defect in it will not affect its sufficiency with respect to other holders of Secured Debt.

 

If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it; provided, that all notices and communications delivered to the Trustee shall be deemed effective only upon actual receipt by a responsible officer of the Trustee.

 

SECTION 7.9               Notice Following Discharge of Priority Lien Obligations.  Promptly following the Discharge of Priority Lien Obligations with respect to one or more Series of Priority Lien Debt, each Priority Lien Representative with respect to each applicable Series of Priority Lien Debt that is so discharged will provide written notice of such discharge to the Collateral Trustee and to each other Secured Debt Representative.

 

SECTION 7.10             Entire Agreement.  This Agreement states the complete agreement of the parties relating to the undertaking of the Collateral Trustee set forth herein and supersedes all oral negotiations and prior writings in respect of such undertaking.

 

SECTION 7.11             Compensation; Expenses.  The Grantors jointly and severally agree to pay, promptly upon demand:

 

(1)           such compensation to the Collateral Trustee and its agents as the Borrower and the Collateral Trustee may agree in writing from time to time;

 

(2)           all reasonable and documented out-of-pocket costs and expenses incurred by the Collateral Trustee and its agents in the preparation, execution, delivery, filing, recordation, administration or enforcement of this Agreement or any other Security Document or any consent, amendment, waiver or other modification relating hereto or thereto;

 

53

 

(3)           all reasonable and documented fees, expenses and disbursements of outside legal counsel and any auditors, accountants, consultants or appraisers or other professional advisors and agents engaged by the Collateral Trustee or any Secured Debt Representative incurred in connection with the negotiation, preparation, closing, administration, performance or enforcement of this Agreement and the other Security Documents or any consent, amendment, waiver or other modification relating hereto or thereto and any other document or matter requested by the Borrower or any other Grantor;

 

(4)           all reasonable and documented out-of-pocket costs and expenses incurred by the Collateral Trustee and its agents in creating, perfecting, preserving, releasing or enforcing the Collateral Trustee’s Liens on the Collateral, including filing and recording fees, expenses and taxes, stamp or documentary taxes, search fees, and insurance premiums;

 

(5)           all other reasonable and documented out-of-pocket costs and expenses incurred by the Collateral Trustee and its agents in connection with the negotiation, preparation and execution of the Security Documents and any consents, amendments,  waivers or other modifications thereto and the transactions contemplated thereby or the exercise of rights or performance of obligations by the Collateral Trustee thereunder; and

 

(6)           after the occurrence of any Secured Debt Default, all reasonable and documented out-of-pocket costs and expenses incurred by the Collateral Trustee and its agents and any Secured Debt Representative in connection with the preservation, collection, foreclosure or enforcement of the Collateral subject to the Security Documents or any interest, right, power or remedy of the Collateral Trustee or in connection with the collection or enforcement of any of the Secured Obligations or the proof, protection, administration or resolution of any claim based upon the Secured Obligations in any Insolvency or Liquidation Proceeding, including all reasonable and documented fees and disbursements of outside attorneys, accountants, auditors, consultants, appraisers and other professionals engaged by the Collateral Trustee, its agents or the Secured Debt Representatives.

 

The agreements in this Section 7.11 will survive repayment of all other Secured Obligations and the removal or resignation of the Collateral Trustee.

 

SECTION 7.12             Indemnity.

 

(a)           The Grantors jointly and severally agree to defend, indemnify, pay and hold harmless the Collateral Trustee, each Secured Debt Representative and each of its Related Parties, and (in each case) their respective heirs, representatives, successors and assigns (each of the foregoing, an “Indemnitee”) from and against any and all Indemnified Liabilities; provided, no Indemnitee will be entitled to indemnification hereunder with respect to any Indemnified Liability to the extent such Indemnified Liability is found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such Indemnitee.

 

54

 

(b)           All amounts due under this Section 7.12 will be payable upon demand.

 

(c)           To the extent that the undertakings to defend, indemnify, pay and hold harmless set forth in Section 7.12(a) may be unenforceable in whole or in part because they violate any law or public policy, each of the Grantors will contribute the maximum portion that it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of them.

 

(d)           No Grantor will ever assert any claim against any Indemnitee, on any theory of liability, for any lost profits or special, indirect or consequential damages or (to the fullest extent a claim for punitive damages may lawfully be waived) any punitive damages arising out of, in connection with, or as a result of, this Agreement or any other Secured Debt Document or any agreement or instrument or transaction contemplated hereby or relating in any respect to any Indemnified Liability, and each of the Grantors hereby forever waives, releases and agrees not to sue upon any claim for any such lost profits or special, indirect, consequential or (to the fullest extent lawful) punitive damages, whether or not accrued and whether or not known or suspected to exist in its favor.

 

(e)           The agreements in this Section 7.12 will survive repayment of all other Secured Obligations and the removal or resignation of the Collateral Trustee.

 

SECTION 7.13             Actions Upon Breach; Specific Performance.

 

.  If any Parity Lien Secured Party, in contravention of the terms of this Agreement, in any way takes, attempts to or threatens to take any action with respect to the Collateral (including any attempt to realize upon or enforce any remedy with respect to this Agreement), or fails to take any action required by this Agreement, this Agreement shall create an irrebuttable presumption and admission by such Parity Lien Secured Party that relief against such Parity Lien Secured Party by injunction, specific performance and/or other appropriate equitable relief is necessary to prevent irreparable harm to the Priority Lien Secured Parties, it being understood and agreed by each Parity Lien Representative, on behalf of each Parity Lien Secured Party  represented by it, that (i) the Priority Lien Secured Parties’ damages from actions of any Parity Lien Secured Party may at that time be difficult to ascertain and may be irreparable and (ii) each Parity Lien Secured Party waives any defense that the Grantors and/or the Priority Lien Secured Parties cannot demonstrate damage and/or be made whole by the awarding of damages.  Each of the Priority Lien Representatives may demand specific performance of this Agreement.  Each Parity Lien Representative, on behalf of itself and each other Parity Lien Secured Party represented by it, hereby irrevocably waives any defense based on the adequacy of a remedy at law and any other defense which might be asserted to bar the remedy of specific performance in any action which may be brought by any Priority Lien Representative or any other Priority Lien Secured Party.  No provision of this Agreement shall constitute or be deemed to constitute a waiver by any Priority Lien Representative on behalf of itself and each other Priority Lien Secured Party represented by it of any right to seek damages from any Person in connection with any breach or alleged breach of this Agreement.

 

SECTION 7.14             Severability.  Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the

 

55

 

extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  The parties hereto shall endeavor in good-faith negotiations to replace any invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

SECTION 7.15             Section Headings.  The section headings and Table of Contents used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.

 

SECTION 7.16             Obligations Secured.  All obligations of the Grantors set forth in or arising under this Agreement will be Secured Obligations and are secured by all Liens granted by the Security Documents.

 

SECTION 7.17             Governing Law.  THIS AGREEMENT AND ANY DISPUTE, CLAIM OR CONTROVERSY ARISING OUT OF OR RELATING TO THIS AGREEMENT (WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE) SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW RULES THAT WOULD RESULT IN THE APPLICATION OF A DIFFERENT GOVERNING LAW (OTHER THAN ANY MANDATORY PROVISIONS OF THE UCC RELATING TO THE LAW GOVERNING PERFECTION AND THE EFFECT OF PERFECTION OR PRIORITY OF THE SECURITY INTERESTS).

 

SECTION 7.18             Consent to Jurisdiction.  All judicial proceedings brought against any party hereto arising out of or relating to this Agreement may be brought in any state or federal court of competent jurisdiction in the State, County and City of New York.  By executing and delivering this Agreement, each Grantor, for itself and in connection with its properties, irrevocably:

 

(1)           accepts generally and unconditionally the nonexclusive jurisdiction and venue of such courts;

 

(2)           waives any defense of forum non conveniens;

 

(3)           agrees that service of all process in any such proceeding in any such court may be made by registered or certified mail, return receipt requested, to such party at its address provided in accordance with Section 7.8;

 

(4)           agrees that service as provided in clause (3) above is sufficient to confer personal jurisdiction over such party in any such proceeding in any such court and otherwise constitutes effective and binding service in every respect; and

 

(5)           agrees that each party hereto retains the right to serve process in any other manner permitted by law or to bring proceedings against any party in the courts of any other jurisdiction.

 

56

 

SECTION 7.19             Waiver of Jury Trial.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT, BREACH OF DUTY, COMMON LAW, STATUTE OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.  EACH PARTY HERETO FURTHER REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

 

SECTION 7.20             Counterparts.  This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile or other electronic imaging means), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.  Delivery of an executed signature page of this Agreement by facsimile or other electronic transmission (e.g. “pdf” or “tif” format) shall be effective as delivery of a manually executed counterpart hereof.

 

SECTION 7.21             Grantors and Additional Grantors.  The Borrower represents and warrants that each Person who is a Grantor on the date hereof has duly executed this Agreement.  The Borrower will cause each Person that hereafter becomes a Grantor or is required by any Secured Debt Document to become a party to this Agreement to become a party to this Agreement, for all purposes of this Agreement, by causing such Person to execute and deliver to the Collateral Trustee a Collateral Trust Joinder, whereupon such Person will be bound by the terms hereof to the same extent as if it had executed and delivered this Agreement as of the date hereof.  The Borrower shall promptly provide each Secured Debt Representative with a copy of each Collateral Trust Joinder executed and delivered pursuant to this Section 7.21; provided, however, that the failure to so deliver a copy of the Collateral Trust Joinder to any then existing Secured Debt Representative shall not affect the inclusion of such Person as a Grantor if the other requirements of this Section 7.21 are complied with.

 

SECTION 7.22             Continuing Nature of this Agreement.  This Agreement, including the subordination provisions hereof, will be reinstated if at any time any payment or distribution in respect of any of the Priority Lien Obligations is rescinded or must otherwise be returned in an Insolvency or Liquidation Proceeding  or otherwise by any Priority Lien Secured Party or Priority Lien Representative or any representative of any such party (whether by demand, settlement, litigation or otherwise).  In the event that all or any part of a payment or distribution made with respect to the Priority Lien Obligations is recovered from any Priority Lien Secured Party or any Priority Lien Representative in an Insolvency or Liquidation Proceeding or otherwise, such payment or distribution received by any Parity Lien Secured Party

 

57

 

or Parity Lien Representative with respect to the Parity Lien Obligations from the proceeds of any Collateral or any insurance policy required by any real property mortgage at any time after the date of the payment or distribution that is so recovered, whether pursuant to a right of subrogation or otherwise, that Parity Lien Representative or that Parity Lien Secured Party, as the case may be, will forthwith deliver the same to the Collateral Trustee, for the account of the Priority Lien Secured Parties to be applied in accordance with Section 3.4.  Until so delivered, such proceeds will be held by that Parity Lien Representative or that Parity Lien Secured Party, as the case may be, for the benefit of the Priority Lien Secured Parties.

 

SECTION 7.23             Insolvency.  This Agreement will be applicable both before and after the commencement of any Insolvency or Liquidation Proceeding by or against any Grantor.  The relative rights, as provided for in this Agreement, will continue after the commencement of any such Insolvency or Liquidation Proceeding on the same basis as prior to the date of the commencement of any such case, as provided in this Agreement.

 

SECTION 7.24             Rights and Immunities of Secured Debt Representatives.  The Administrative Agent will be entitled to all of the rights, protections, immunities and indemnities set forth in the Credit Agreement, the Trustee will be entitled to all of the rights, protections, immunities and indemnities set forth in the Indenture and any future Secured Debt Representative will be entitled to all of the rights, protections, immunities and indemnities set forth in the credit agreement, indenture or other agreement governing the applicable Secured Debt with respect to which such Person will act as representative, in each case as if specifically set forth herein.  In no event will any Secured Debt Representative be liable for any act or omission on the part of the Grantors or the Collateral Trustee hereunder.

 

58

 

IN WITNESS WHEREOF, the parties hereto have caused this Collateral Trust Agreement to be executed by their respective officers or representatives as of the day and year first above written.

 

	
 
    	
FORESIGHT ENERGY LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert D. Moore
    
	
 
    	
 
    	
Name:
    	
Robert D. Moore
    
	
 
    	
 
    	
Title:
    	
President and Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
FORESIGHT   ENERGY LP
    
	
 
    	
 
    	
 
    
	
 
    	
By   Foresight Energy GP LLC, its general partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert D. Moore
    
	
 
    	
 
    	
Name:
    	
Robert D. Moore
    
	
 
    	
 
    	
Title:
    	
President and Chief Executive Officer
    
					

 

 

	
 
    	
ADENA   RESOURCES, LLC
    
	
 
    	
AKIN   ENERGY LLC
    
	
 
    	
AMERICAN   CENTURY MINERAL LLC
    
	
 
    	
AMERICAN   CENTURY TRANSPORT LLC
    
	
 
    	
COAL   FIELD CONSTRUCTION COMPANY LLC
    
	
 
    	
COAL   FIELD REPAIR SERVICES LLC
    
	
 
    	
FORESIGHT   COAL SALES LLC
    
	
 
    	
FORESIGHT   ENERGY EMPLOYEE SERVICES CORPORATION
    
	
 
    	
FORESIGHT   ENERGY FINANCE CORPORATION
    
	
 
    	
FORESIGHT   ENERGY LABOR LLC
    
	
 
    	
FORESIGHT   ENERGY SERVICES LLC
    
	
 
    	
HILLSBORO   TRANSPORT LLC
    
	
 
    	
LD   LABOR COMPANY LLC
    
	
 
    	
LOGAN   MINING LLC
    
	
 
    	
M-CLASS MINING,   LLC
    
	
 
    	
MACH   MINING, LLC
    
	
 
    	
MACOUPIN   ENERGY LLC
    
	
 
    	
MARYAN   MINING LLC
    
	
 
    	
OENEUS   LLC (D/B/A SAVATRAN LLC)
    
	
 
    	
SENECA   REBUILD LLC
    
	
 
    	
SITRAN   LLC
    
	
 
    	
SUGAR   CAMP ENERGY, LLC
    
	
 
    	
TANNER   ENERGY LLC
    
	
 
    	
VIKING   MINING LLC
    
	
 
    	
WILLIAMSON   ENERGY, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert D. Moore
    
	
 
    	
 
    	
Name:
    	
Robert D. Moore
    
	
 
    	
 
    	
Title:
    	
President and Chief Executive Officer
    

 

 

	
 
    	
THE   HUNTINGTON NATIONAL BANK,
    
	
 
    	
as   Administrative Agent
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Joshua D. Elsea
    
	
 
    	
 
    	
Name:   Joshua D. Elsea
    
	
 
    	
 
    	
Title:   Vice President
    

 

 

	
 
    	
WILMINGTON   TRUST, NATIONAL 
    
	
 
    	
ASSOCIATION,   as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   John T. Needham, Jr.
    
	
 
    	
 
    	
Name:   John T. Needham, Jr.
    
	
 
    	
 
    	
Title:   Vice President
    

 

 

	
 
    	
LORD SECURITIES CORPORATION, as
    	
 
    
	
 
    	
Collateral Trustee
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Albert J. Fioravanti
    	
 
    
	
 
    	
 
    	
Name: Albert J. Fioravanti
    	
 
    
	
 
    	
 
    	
Title: Director
    	
 
    

 

 

[EXHIBIT A to Collateral Trust Agreement]

 

[FORM OF]
 ADDITIONAL SECURED DEBT DESIGNATION

 

Reference is made to the Collateral Trust Agreement dated as of March 28, 2017 (as amended, supplemented, amended and restated or otherwise modified and in effect from time to time, the “Collateral Trust Agreement”) among Foresight Energy LLC, a Delaware limited liability company (the “Borrower”), the Grantors from time to time party thereto, The Huntington National Bank, as Administrative Agent under the Credit Agreement (as defined therein), Wilmington Trust, National Association, as Trustee under the Indenture (as defined therein), and Lord Securities Corporation, as Collateral Trustee.  Capitalized terms used but not otherwise defined herein have the meanings assigned to them in the Collateral Trust Agreement.  This Additional Secured Debt Designation is being executed and delivered in order to designate additional secured debt as either Priority Lien Debt or Parity Lien Debt entitled to the benefit of the Collateral Trust Agreement.

 

The undersigned, the duly appointed [specify title] of the [Borrower] hereby certifies on behalf of the [Borrower] that:

 

(A)          [insert name of the Borrower or other Grantor] intends to incur additional Secured Debt (“Additional Secured Debt”) which will be [select appropriate alternative] [Priority Lien Debt permitted by each applicable Secured Debt Document to be secured by a Priority Lien equally and ratably with all previously existing and future Priority Lien Debt] or [Parity Lien Debt permitted by each applicable Secured Debt Document to be secured with a Parity Lien equally and ratably with all previously existing and future Parity Lien Debt];

 

(B)          the name and address of the Secured Debt Representative for the Additional Secured Debt for purposes of Section 7.8 of the Collateral Trust Agreement is:

 

 

Telephone:                                             

 

Fax:                                            

 

 

IN WITNESS WHEREOF, the Borrower has caused this Additional Secured Debt Designation to be duly executed by the undersigned officer as of                    , 20    .

 

	
 
    	
FORESIGHT ENERGY LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

ACKNOWLEDGEMENT OF RECEIPT

 

The undersigned, the duly appointed Collateral Trustee under the Collateral Trust Agreement, hereby acknowledges receipt of an executed copy of this Additional Secured Debt Designation.

 

	
 
    	
[                                           ]
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

 

[EXHIBIT B to Collateral Trust Agreement]

 

[FORM OF]
 COLLATERAL TRUST JOINDER — ADDITIONAL DEBT

 

Reference is made to the Collateral Trust Agreement dated as of March 28, 2017 (as amended, supplemented, amended and restated or otherwise modified and in effect from time to time, the “Collateral Trust Agreement”) among Foresight Energy LLC, a Delaware limited liability company (the “Borrower”), the Grantors from time to time party thereto, The Huntington National Bank, as Administrative Agent under the Credit Agreement (as defined therein), Wilmington Trust, National Association, as Trustee under the Indenture (as defined therein), and Lord Securities Corporation, as Collateral Trustee.  Capitalized terms used but not otherwise defined herein have the meanings assigned to them in the Collateral Trust Agreement.  This Collateral Trust Joinder is being executed and delivered pursuant to Section 3.8 of the Collateral Trust Agreement as a condition precedent to the debt for which the undersigned is acting as agent being entitled to the benefits of being additional secured debt under the Collateral Trust Agreement.

 

1. Joinder.  The undersigned,                      , a                , (the “New Representative”) as [trustee, administrative agent] under that certain [described applicable indenture, credit agreement or other document governing the additional secured debt] hereby agrees to become party as [a Parity Lien Representative] [a Priority Lien Representative] under the Collateral Trust Agreement for all purposes thereof on the terms set forth therein, and to be bound by the terms of the Collateral Trust Agreement as fully as if the undersigned had executed and delivered the Collateral Trust Agreement as of the date thereof.

 

2. Lien Sharing and Priority Confirmation.

 

[Option A: to be used if Additional Debt is Parity Lien Debt]  The undersigned New Representative, on behalf of itself and each holder of Obligations in respect of the Series of Parity Lien Debt for which the undersigned is acting as Parity Lien Representative hereby agrees, for the enforceable benefit of all holders of each current and future Series of Priority Lien Debt and Parity Lien Debt, each current and future Priority Lien Representative, each other current and future Parity Lien Representative and each current and future Priority Lien Secured Party and Parity Lien Secured Party and as a condition to being treated as Secured Debt under the Collateral Trust Agreement that:

 

(a)    as provided by Section 2.9 of the Collateral Trust Agreement, all Parity Lien Obligations will be and are secured equally and ratably by all Parity Liens at any time granted by the Borrower or any other Grantor to secure any Obligations in respect of any Series of Parity Lien Debt, whether or not upon property otherwise constituting collateral for such Series of Parity Lien Debt, and that all such Parity Liens will be enforceable by the Collateral Trustee for the benefit of all Parity Lien Secured Party equally and ratably; provided, however, that notwithstanding the foregoing, this provision will not be violated with respect to any particular Collateral and any particular Series of Parity Lien Debt if the

 

 

Secured Debt Documents in respect thereof prohibit the applicable Parity Lien Representative from accepting the benefit of a Lien on any particular asset or property or such Parity Lien Representative otherwise expressly declines in writing to accept the benefit of a Lien on such asset or property;

 

(b)    the New Representative and each holder of Obligations in respect of the Series of Parity Lien Debt for which the undersigned is acting as Parity Lien Representative are bound by the provisions of this Agreement, including the provisions relating to the ranking of Parity Liens and the order of application of proceeds from the enforcement of Parity Liens; and

 

(c)    the Collateral Trustee shall perform its obligations under the Collateral Trust Agreement and the other Security Documents.  [or]

 

[Option B: to be used if Additional Debt is Priority Lien Debt]  [The undersigned New Representative, on behalf of itself and each holder of Obligations in respect of the Series of Priority Lien Debt for which the undersigned is acting as Priority Lien Representative hereby agrees, for the enforceable benefit of all holders of each existing and future Series of Priority Lien Debt and Parity Lien Debt, each current and future Parity Lien Representative, each other existing and future Priority Lien Representative and each current and future Priority Lien Secured Party and Parity Lien Secured Party and as a condition to being treated as Secured Debt under the Collateral Trust Agreement that:

 

(a)    as provided by Section 2.9 of the Collateral Trust Agreement, all Priority Lien Obligations will be and are secured equally and ratably by all Priority Liens at any time granted by the Borrower or any other Grantor to secure any Obligations in respect of any Series of Priority Lien Debt, whether or not upon property otherwise constituting collateral for such Series of Priority Lien Debt, and that all such Priority Liens will be enforceable by the Collateral Trustee for the benefit of all Priority Lien Secured Parties equally and ratably provided however, that notwithstanding the foregoing, (x) this provision will not be violated with respect to any particular Collateral and any particular Series of Priority Lien Debt if the Secured Debt Documents in respect thereof prohibit the applicable Priority Lien Representative from accepting the benefit of a Lien on any particular asset or property or such Priority Lien Representative otherwise expressly declines in writing to accept the benefit of a Lien on such asset or property and (y)  this provision will not be violated with respect to any particular Secured Hedging Obligations or Secured Cash Management Obligations if the related Secured Hedging Agreement or the Secured Cash Management Agreement, as applicable, prohibits the applicable Hedge Bank or Cash Management Bank from accepting the benefit of a Lien on any particular asset or property or such Hedge Bank or Cash Management Bank, as applicable, otherwise expressly declines in writing to accept the benefit of a Lien on such asset or property;

 

(b)    the New Representative and each holder of Obligations in respect of the Series of Priority Lien Debt for which the undersigned is acting as Priority

 

 

Lien Representative are bound by the provisions of this Agreement, including the provisions relating to the ranking of Priority Liens and the order of application of proceeds from the enforcement of Priority Liens; and

 

(c)    the Collateral Trustee shall perform its obligations under the Collateral Trust Agreement and the other Security Documents.]

 

3.  Governing Law and Miscellaneous Provisions.  The provisions of Article 7 of the Collateral Trust Agreement will apply with like effect to this Collateral Trust Joinder.

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Collateral Trust Joinder to be executed by their respective officers or representatives as of                    , 20    .

 

	
 
    	
[insert name of the new representative]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

The Collateral Trustee hereby acknowledges receipt of this Collateral Trust Joinder and agrees to act as Collateral Trustee for the New Representative and the holders of the Obligations represented thereby:

 

	
 
    	
Lord Securities Corporation, as Collateral Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

 

[EXHIBIT C
 to Collateral Trust Agreement]

 

[FORM OF]
 COLLATERAL TRUST JOINDER — ADDITIONAL GRANTOR

 

Reference is made to the Collateral Trust Agreement dated as of March 28, 2017 (as amended, supplemented, amended and restated or otherwise modified and in effect from time to time, the “Collateral Trust Agreement”) among Peabody Energy Corporation, a Delaware corporation (the “Borrower”), the Grantors from time to time party thereto, The Huntington National Bank, as Administrative Agent under the Credit Agreement (as defined therein), Wilmington Trust, National Association, as Trustee under the Indenture (as defined therein), and Lord Securities Corporation, as Collateral Trustee.  Capitalized terms used but not otherwise defined herein have the meanings assigned to them in the Collateral Trust Agreement.  This Collateral Trust Joinder is being executed and delivered pursuant to Section 7.21 of the Collateral Trust Agreement.

 

1.  Joinder.  The undersigned,                      , a                , hereby agrees to become party as a Grantor under the Collateral Trust Agreement for all purposes thereof on the terms set forth therein, and to be bound by the terms of the Collateral Trust Agreement as fully as if the undersigned had executed and delivered the Collateral Trust Agreement as of the date thereof.

 

2.  Governing Law and Miscellaneous Provisions.  The provisions of Article 7 of the Collateral Trust Agreement will apply with like effect to this Collateral Trust Joinder.

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Collateral Trust Joinder to be executed by their respective officers or representatives as of                    , 20    .

 

	
 
    	
[                                   ]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

The Collateral Trustee hereby acknowledges receipt of this Collateral Trust Joinder and agrees to act as Collateral Trustee with respect to the Collateral pledged by the new Grantor:

 

	
 
    	
LORD SECURITIES CORPORATION, as Collateral Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00269-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00269-of-00352.parquet"}]]