INTERCREDITOR AGREEMENT
Dated as of July 22, 2025
by and between
TRALVENDO NATIONAL BANK, as Term Loan Agent
and
PRAIRIE STATE BANK, N.A., as Revolving Agent
Acknowledged and Consented to by
VELOPAY SYSTEMS, INC., as Borrower
HARROWGATE PRIVATE EQUITY FUND IV LP, as Holdings
and
Each Subsidiary Guarantor Party Hereto
INTERCREDITOR AGREEMENT
July 22, 2025
This INTERCREDITOR AGREEMENT (this "Agreement"), dated as of July 22, 2025, is entered into by and between:
TRALVENDO NATIONAL BANK, a national banking association organized and existing under the laws of the United States, in its capacity as Administrative Agent for the Term Loan Secured Parties (in such capacity, the "Term Loan Agent"), with offices at 100 Federal Street, 30th Floor, Boston, Massachusetts 02110;
and
PRAIRIE STATE BANK, N.A., a national banking association organized and existing under the laws of the United States, in its capacity as Administrative Agent for the Revolving Credit Secured Parties (in such capacity, the "Revolving Agent"), with offices at 231 South LaSalle Street, Suite 4400, Chicago, Illinois 60604.
Acknowledged and consented to by:
VELOPAY SYSTEMS, INC., a Delaware corporation (the "Borrower"), with its principal office at 1455 Innovation Parkway, Suite 800, Austin, Texas 78759; EIN 82-3019478;
HARROWGATE PRIVATE EQUITY FUND IV LP, a Delaware limited partnership ("Holdings"), with its principal office at 300 King Street, Suite 4200, Wilmington, Delaware 19801; EIN 87-4231956; and
Each Subsidiary Guarantor (as defined herein) listed on the signature pages hereto.
The Term Loan Agent and the Revolving Agent are referred to herein individually as an "Agent" and collectively as the "Agents." The Borrower, Holdings, and each Subsidiary Guarantor are referred to herein collectively as the "Loan Parties."
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RECITALS
WHEREAS, Tralvendo National Bank, as Administrative Agent for the Term Loan Facility, the lenders party thereto from time to time (the "Term Loan Lenders"), VeloPay Systems, Inc. (as Borrower), and Harrowgate Private Equity Fund IV LP (as Holdings) have entered into that certain Senior Secured Credit Agreement dated as of July 22, 2025 (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), pursuant to which, among other things, the Term Loan Lenders have made available to the Borrower a senior secured term loan facility in an aggregate principal amount of Five Hundred Million Dollars ($500,000,000) (the "Term Loan Facility"), bearing interest at a rate per annum equal to the Secured Overnight Financing Rate ("SOFR") plus three hundred seventy-five (375) basis points, maturing seven (7) years from the Closing Date (as defined in the Credit Agreement);
WHEREAS, Prairie State Bank, N.A., as Administrative Agent for the Revolving Credit Facility, the revolving credit lenders party thereto from time to time (the "Revolving Credit Lenders"), the Borrower, and Holdings have entered into the Credit Agreement, pursuant to which, among other things, the Revolving Credit Lenders have made available to the Borrower a senior secured revolving credit facility in an aggregate commitment amount of Two Hundred Sixty Million Dollars ($260,000,000) (the "Revolving Credit Facility"), bearing interest at a rate per annum equal to SOFR plus three hundred twenty-five (325) basis points, maturing five (5) years from the Closing Date, with an aggregate principal amount of Two Hundred Fifty-Four Million Seven Hundred Thousand Dollars ($254,700,000) drawn at closing;
WHEREAS, the Term Loan Facility and the Revolving Credit Facility are each secured by a first-priority lien on substantially all of the assets of the Borrower and the Subsidiary Guarantors, which liens were granted pursuant to that certain Guarantee and Collateral Agreement dated as of July 22, 2025 (as amended, restated, supplemented, or otherwise modified from time to time, the "Guarantee and Collateral Agreement"), among the Borrower, the Subsidiary Guarantors, the Term Loan Agent, and the Revolving Agent;
WHEREAS, the Subsidiary Guarantors consist of VeloPay Processing LLC, a Delaware limited liability company, VeloPay Fraud intelligence Inc., a Delaware corporation, and PayStream Gateway LLC, a Delaware limited liability company, each being a domestic wholly-owned subsidiary of the Borrower;
WHEREAS, the Credit Agreement and the related financing were entered into in connection with the reverse triangular merger of Harrowgate Velocity Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of Holdings, with and into VeloPay Systems, Inc., pursuant to that certain Agreement and Plan of Merger dated as of March 18, 2025 (the "Merger Agreement"), among Harrowgate Private Equity Fund IV LP, Harrowgate Velocity Merger Sub Inc., and VeloPay Systems, Inc., with VeloPay Systems, Inc. surviving such merger as a wholly-owned subsidiary of Holdings;
WHEREAS, in connection with the foregoing transactions, Tralvendo National Bank and Prairie State Bank, N.A. delivered that certain Debt Commitment Letter dated February 14, 2025 (Reference CRE-2025-SPF-0441) to Harrowgate Private Equity Fund IV LP, committing to provide the Term Loan Facility and the Revolving Credit Facility, respectively, on the terms and conditions set forth therein; and
WHEREAS, the Term Loan Agent and the Revolving Agent desire to set forth their agreement as to, among other things, the relative priority of their respective liens on and security interests in the Shared Collateral (as defined herein), the order of application of proceeds thereof, the coordination of the exercise of remedies with respect thereto, and certain other related matters.
NOW, THEREFORE, in consideration of the mutual covenants, agreements, and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I — DEFINITIONS AND INTERPRETATION
Section 1.01 — Definitions
As used in this Agreement, the following terms shall have the following meanings:
"ABL Priority Collateral" has the meaning assigned to such term in the Credit Agreement.
"Agent" means, collectively, the Term Loan Agent and the Revolving Agent; and individually, either of them.
"Agreement" means this Intercreditor Agreement, as it may be amended, restated, supplemented, or otherwise modified from time to time in accordance with Section 9.05.
"Bankruptcy Code" means Title 11 of the United States Code (11 U.S.C. § 101 et seq.), as amended from time to time, and any successor statute thereto.
"Borrower" means VeloPay Systems, Inc., a Delaware corporation (Delaware File Number 5748392), and its successors and permitted assigns.
"Cash Management Obligations" means all obligations of the Loan Parties with respect to cash management services (including treasury management, netting services, overdraft protections, check drawing services, automated payment services, return items, controlled disbursement services, merchant card services, interstate depository network services, employee credit card programs, and other cash management services) provided by any Revolving Credit Secured Party or any affiliate thereof pursuant to arrangements entered into in connection with the Credit Agreement.
"Closing Date" means July 22, 2025.
"Collateral" or "Shared Collateral" means all assets, property, and interests in property of the Loan Parties that are at any time subject to liens under the Guarantee and Collateral Agreement or any other Loan Document, including substantially all personal property of the Borrower and the Subsidiary Guarantors, accounts receivable, inventory, equipment, intellectual property, general intangibles, investment property, deposit accounts, instruments, chattel paper, letter-of-credit rights, commercial tort claims, and all proceeds and products thereof, as more fully described in Exhibit A attached hereto. The terms "Collateral" and "Shared Collateral" shall be used interchangeably herein, except where the context otherwise requires.
"Credit Agreement" means that certain Senior Secured Credit Agreement dated as of July 22, 2025, among the Borrower, Holdings, the Term Loan Agent (in its capacity as Administrative Agent for the Term Loan Facility), the Revolving Agent (in its capacity as Administrative Agent for the Revolving Credit Facility), and the Lenders from time to time party thereto, as may be amended, restated, supplemented, replaced, or otherwise modified from time to time.
"DIP Financing" means any debtor-in-possession financing approved or sought in connection with any Insolvency Proceeding, whether under Section 364 of the Bankruptcy Code or otherwise.
"Discharge of Revolving Credit Obligations" means the occurrence of all of the following: (a) payment in full in cash of all Revolving Credit Obligations (other than contingent indemnification obligations and contingent expense reimbursement obligations not yet due and payable and as to which no claim has been asserted), (b) termination or expiration of all Revolving Credit Commitments, and (c) cash collateralization (at one hundred and five percent (105%) of the aggregate undrawn face amount) or backstopping (on terms reasonably satisfactory to the issuing lender) of all outstanding letters of credit issued under the Revolving Credit Facility.
"Discharge of Term Loan Obligations" means payment in full in cash of all Term Loan Obligations (other than contingent indemnification obligations and contingent expense reimbursement obligations not yet due and payable and as to which no claim has been asserted).
"Enforcement Action" means any action to foreclose, execute, levy, collect, or otherwise enforce or realize upon any Shared Collateral or any lien thereon, or any action to exercise any rights or remedies with respect to Shared Collateral, including by judicial action, self-help, notification of account debtors, setoff, recoupment, credit bid, or any similar exercise of rights under the UCC, the Bankruptcy Code, or other applicable law, and shall include the commencement of any legal proceeding seeking a judgment, order, or decree for the foreclosure, sale, or other disposition of any Shared Collateral.
"Guarantee and Collateral Agreement" means that certain Guarantee and Collateral Agreement dated as of July 22, 2025, among the Borrower, the Subsidiary Guarantors, the Term Loan Agent, and the Revolving Agent, as may be amended, restated, supplemented, or otherwise modified from time to time.
"Hedging Obligations" means all obligations of the Loan Parties under any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement, or other interest rate, currency, or commodity hedging arrangement entered into with any Term Loan Secured Party, any Revolving Credit Secured Party, or any affiliate thereof.
"Holdings" means Harrowgate Private Equity Fund IV LP, a Delaware limited partnership (EIN 87-4231956), and its successors and permitted assigns.
"Initiating Agent" has the meaning set forth in Section 3.01(b).
"Insolvency Proceeding" means (a) any voluntary or involuntary case, proceeding, or action commenced under the Bankruptcy Code or any similar state, federal, or foreign law for the relief of debtors, (b) any receivership, conservatorship, or similar proceeding with respect to any Loan Party or any substantial part of its assets, (c) any assignment for the benefit of creditors by any Loan Party, (d) any composition, marshaling of assets or liabilities, or similar proceeding with respect to any Loan Party, or (e) any other dissolution, winding-up, liquidation, reorganization, or similar proceeding with respect to any Loan Party.
"Lien Priority" has the meaning set forth in Section 2.01.
"Loan Documents" means, collectively, the Term Loan Documents and the Revolving Credit Documents.
"Loan Parties" means, collectively, the Borrower, Holdings, and each Subsidiary Guarantor, and "Loan Party" means any of them individually.
"Non-Initiating Agent" has the meaning set forth in Section 3.01(b).
"Obligations" means, collectively, the Term Loan Obligations and the Revolving Credit Obligations.
"Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, governmental authority, or any other entity, whether or not a legal entity.
"Refinancing" means any refinancing, refunding, renewal, replacement, or extension of all or any portion of the Term Loan Obligations or the Revolving Credit Obligations, including any successive refinancings, refundings, renewals, replacements, or extensions thereof, in whole or in part, with or without an increase in the principal amount thereof.
"Revolving Agent" means Prairie State Bank, N.A., a national banking association, in its capacity as Administrative Agent under the Credit Agreement for the Revolving Credit Facility, together with its successors and assigns in such capacity.
"Revolving Credit Commitments" means the aggregate revolving credit commitments of the Revolving Credit Lenders under the Revolving Credit Facility, in an aggregate amount of Two Hundred Sixty Million Dollars ($260,000,000), as such amount may be increased, reduced, or otherwise modified from time to time in accordance with the Credit Agreement.
"Revolving Credit Documents" means the Credit Agreement (as it relates to the Revolving Credit Facility), the Guarantee and Collateral Agreement, and all notes, guarantees, security agreements, pledge agreements, control agreements, mortgages, deeds of trust, fee letters, and other ancillary agreements and documents executed and delivered in connection with the Revolving Credit Facility, in each case as amended, restated, supplemented, or otherwise modified from time to time.
"Revolving Credit Lenders" means the financial institutions and other lenders from time to time party to the Credit Agreement as revolving credit lenders, together with their respective successors and assigns.
"Revolving Credit Obligations" means all obligations (including all principal, interest, premium, fees, indemnification obligations, reimbursement obligations, costs, expenses, and other amounts) of the Loan Parties under or in connection with the Revolving Credit Documents, whether now existing or hereafter arising, whether direct or indirect, absolute or contingent, joint or several, matured or unmatured, liquidated or unliquidated, and including Cash Management Obligations, Hedging Obligations, letter of credit obligations, and all obligations arising under guarantees of such obligations.
"Revolving Credit Secured Parties" means the Revolving Agent, the Revolving Credit Lenders, and any other holders of Revolving Credit Obligations from time to time, including any provider of Cash Management Obligations or Hedging Obligations that is (or at the time of entering into such arrangement was) a Revolving Credit Lender or an affiliate of a Revolving Credit Lender.
"Shared Collateral" means all Collateral on which both the Term Loan Agent (for the benefit of the Term Loan Secured Parties) and the Revolving Agent (for the benefit of the Revolving Credit Secured Parties) at any time hold a lien, whether or not such lien is perfected.
"Subsidiary Guarantors" means VeloPay Processing LLC, a Delaware limited liability company, VeloPay Fraud intelligence Inc., a Delaware corporation, and PayStream Gateway LLC, a Delaware limited liability company, each being a domestic wholly-owned subsidiary of the Borrower, together with any other subsidiary of the Borrower that may hereafter become a guarantor under the Guarantee and Collateral Agreement or any other Loan Document.
"Term Loan Agent" means Tralvendo National Bank, a national banking association, in its capacity as Administrative Agent under the Credit Agreement for the Term Loan Facility, together with its successors and assigns in such capacity.
"Term Loan Documents" means the Credit Agreement (as it relates to the Term Loan Facility), the Guarantee and Collateral Agreement, and all notes, guarantees, security agreements, pledge agreements, control agreements, mortgages, deeds of trust, fee letters, and other ancillary agreements and documents executed and delivered in connection with the Term Loan Facility, in each case as amended, restated, supplemented, or otherwise modified from time to time.
"Term Loan Facility" means the senior secured term loan facility in an aggregate principal amount of Five Hundred Million Dollars ($500,000,000) under the Credit Agreement.
"Term Loan Lenders" means the financial institutions and other lenders from time to time party to the Credit Agreement as term loan lenders, together with their respective successors and assigns.
"Term Loan Obligations" means all obligations (including all principal, interest, premium, fees, indemnification obligations, reimbursement obligations, costs, expenses, and other amounts) of the Loan Parties under or in connection with the Term Loan Documents, whether now existing or hereafter arising, whether direct or indirect, absolute or contingent, joint or several, matured or unmatured, liquidated or unliquidated, and including all obligations arising under guarantees of such obligations.
"Term Loan Secured Parties" means the Term Loan Agent, the Term Loan Lenders, and any other holders of Term Loan Obligations from time to time, including any provider of Hedging Obligations that is (or at the time of entering into such arrangement was) a Term Loan Lender or an affiliate of a Term Loan Lender.
"UCC" means the Uniform Commercial Code as in effect from time to time in the State of New York; provided, however, that if, by reason of mandatory provisions of law, the perfection, effect of perfection or non-perfection, or priority of the security interests of either Agent in any item or portion of the Shared Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term "UCC" shall mean the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection, or priority and for purposes of the definitions related to such provisions.
Section 1.02 — Rules of Interpretation
The following rules of interpretation shall apply to this Agreement:
(a) Terms defined in the UCC that are not otherwise defined herein shall have the meanings assigned to such terms in the UCC.
(b) The headings and captions in this Agreement are inserted for convenience of reference only and shall not define, limit, or otherwise affect the meaning or construction of any provision hereof.
(c) All references herein to Articles, Sections, Exhibits, and Schedules are to Articles, Sections, Exhibits, and Schedules of and to this Agreement, unless otherwise specified.
(d) Words importing the singular shall include the plural and vice versa, and words importing any gender shall include the other genders, unless the context otherwise requires.
(e) The words "hereof," "herein," "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.
(f) The word "including" (and with correlative meaning, "include" and "includes") means including without limitation.
(g) References to any Person include the successors and permitted assigns of that Person.
(h) References to any agreement (including this Agreement), document, or instrument mean such agreement, document, or instrument as amended, restated, supplemented, or otherwise modified from time to time, unless otherwise specified.
(i) References to any law, statute, or regulation include all statutory and regulatory provisions consolidating, amending, replacing, or supplementing such law, statute, or regulation, and all rules, regulations, and orders promulgated thereunder.
(j) All references to the "laws of the State of New York" or "New York law" shall mean the internal laws of the State of New York, without giving effect to principles of conflicts of law (other than Section 5-1401 of the New York General Obligations Law).
Section 1.03 — Credit Agreement Definitions
Unless otherwise defined herein, capitalized terms used in this Agreement shall have the meanings assigned to such terms in the Credit Agreement. In the event of any conflict between the definitions set forth in this Agreement and the definitions set forth in the Credit Agreement, the definitions in this Agreement shall control for purposes of this Agreement.
ARTICLE II — LIEN PRIORITY AND SUBORDINATION
Section 2.01 — Pari Passu Lien Priority
(a) The liens on the Shared Collateral securing the Term Loan Obligations and the liens on the Shared Collateral securing the Revolving Credit Obligations shall at all times rank pari passu with each other (the "Lien Priority"). Neither the Term Loan Agent (on behalf of the Term Loan Secured Parties) nor the Revolving Agent (on behalf of the Revolving Credit Secured Parties) shall have any priority over the other with respect to any Shared Collateral. The liens of each Agent on the Shared Collateral shall be of equal rank, force, and effect.
(b) The Lien Priority established by this Section 2.01 shall apply regardless of (i) the time, manner, method, or order of attachment, perfection, grant, recording, filing, or creation of any such lien, (ii) whether any such lien is perfected or unperfected, (iii) the time or order of filing of UCC financing statements, fixture filings, or any other filings or recordings with respect to any Shared Collateral in any public records, (iv) the provisions of any applicable law (including Article 9 of the UCC) that might otherwise govern the priority of such liens, or (v) whether any such lien was granted by the Borrower, any Subsidiary Guarantor, or any other Loan Party.
(c) The parties hereto acknowledge and agree that the liens securing the Term Loan Obligations and the Revolving Credit Obligations on the Shared Collateral are created under a single Guarantee and Collateral Agreement, with the Term Loan Agent and the Revolving Agent each acting as co-beneficiaries thereunder for the benefit of their respective classes of Secured Parties. The pari passu nature of such liens is established by the terms of the Guarantee and Collateral Agreement and is further confirmed and set forth in this Agreement.
(d) Notwithstanding the pari passu priority of the liens on the Shared Collateral, the application of proceeds of the Shared Collateral realized through an Enforcement Action shall be governed by Section 3.02 of this Agreement, and the pari passu lien priority established by this Section 2.01 shall not affect or modify the order of application of proceeds set forth in Section 3.02.
Section 2.02 — Nature of Obligations Secured
(a) The liens on the Shared Collateral held by the Term Loan Agent secure the payment and performance of all Term Loan Obligations, including (i) the outstanding principal amount under the Term Loan Facility in an aggregate original principal amount of Five Hundred Million Dollars ($500,000,000), (ii) all interest thereon (including interest accruing at a rate per annum equal to SOFR plus 375 basis points, as well as any default interest), (iii) all fees payable under the Term Loan Documents, (iv) all costs and expenses of the Term Loan Agent and the Term Loan Lenders payable under the Term Loan Documents (including reasonable attorneys' fees and expenses), (v) all indemnification obligations, and (vi) all other amounts owing by the Loan Parties under or in connection with the Term Loan Documents, whether now existing or hereafter arising.
(b) The liens on the Shared Collateral held by the Revolving Agent secure the payment and performance of all Revolving Credit Obligations, including (i) all outstanding principal under the Revolving Credit Facility (the aggregate commitment amount being Two Hundred Sixty Million Dollars ($260,000,000)), (ii) all interest thereon (including interest accruing at a rate per annum equal to SOFR plus 325 basis points, as well as any default interest), (iii) all fees payable under the Revolving Credit Documents (including unused commitment fees, letter of credit fees, and fronting fees), (iv) all Cash Management Obligations, (v) all Hedging Obligations, (vi) all letter of credit obligations (including reimbursement obligations), (vii) all costs and expenses of the Revolving Agent and the Revolving Credit Lenders payable under the Revolving Credit Documents (including reasonable attorneys' fees and expenses), (viii) all indemnification obligations, and (ix) all other amounts owing by the Loan Parties under or in connection with the Revolving Credit Documents, whether now existing or hereafter arising.
(c) The parties hereto acknowledge and agree that, as of the Closing Date, the aggregate principal amount drawn and outstanding under the Revolving Credit Facility is Two Hundred Fifty-Four Million Seven Hundred Thousand Dollars ($254,700,000).
Section 2.03 — Prohibition on Contesting Liens
(a) Each Agent, on behalf of itself and each Secured Party for which it acts as agent, hereby agrees that it shall not (and shall not direct or authorize any Secured Party to) at any time contest, object to, seek to invalidate, seek to avoid, or otherwise challenge the validity, enforceability, attachment, perfection, or priority of any lien held by the other Agent on any Shared Collateral, or the provisions of this Agreement.
(b) Each Agent, on behalf of itself and each Secured Party for which it acts as agent, further agrees that it shall not support, encourage, or assist any Person (other than the other Agent or its Secured Parties) in contesting, objecting to, seeking to invalidate, seeking to avoid, or otherwise challenging the validity, enforceability, attachment, perfection, or priority of any lien held by the other Agent on any Shared Collateral, whether in any Insolvency Proceeding or otherwise.
(c) The obligations of each Agent under this Section 2.03 shall be absolute and unconditional and shall not be affected by any circumstances, including any invalidity, irregularity, or unenforceability of any Obligation or any Loan Document, or any lack of perfection or continuity of perfection of any lien on the Shared Collateral.
Section 2.04 — No New Liens
(a) If at any time after the date hereof, any Loan Party grants a lien to either Agent on any property or asset that constitutes Shared Collateral (or would constitute Shared Collateral if both Agents held a lien thereon) on which a lien has not been previously granted to the other Agent, then:
(i) the Agent receiving such lien (the "New Lien Agent") shall promptly (and in any event within five (5) Business Days) notify the other Agent in writing of the grant of such lien and the property or assets subject thereto; and
(ii) the Loan Parties shall promptly (and in any event within ten (10) Business Days after the grant of such lien) cause an equivalent lien to be granted to the other Agent on such property or assets, on terms and conditions substantially equivalent to the lien granted to the New Lien Agent, and shall execute and deliver all documents, instruments, and agreements (including UCC financing statements, control agreements, and intellectual property security agreements) as may be reasonably necessary or advisable to create, perfect, and maintain such lien.
(b) Any lien granted to the other Agent pursuant to this Section 2.04 shall be subject to the Lien Priority and all other provisions of this Agreement.
(c) The failure of the other Agent to receive such equivalent lien shall not impair or otherwise affect the validity, perfection, or priority of the lien granted to the New Lien Agent.
ARTICLE III — ENFORCEMENT OF LIENS AND APPLICATION OF PROCEEDS
Section 3.01 — Exercise of Remedies; Standstill
(a) Right to Enforce. Subject to the provisions of this Agreement, either Agent may commence or take an Enforcement Action at any time following the occurrence and during the continuance of an event of default under the applicable Loan Documents. No standstill period is required, and each Agent shall have independent enforcement rights with respect to the Shared Collateral, in each case subject to the sharing, application, and coordination provisions set forth in this Article III.
(b) Notice of Enforcement Action. The Agent commencing an Enforcement Action (the "Initiating Agent") shall provide prompt written notice to the other Agent (the "Non-Initiating Agent") of such Enforcement Action, including a description of the Shared Collateral against which such action is directed and the nature of the Enforcement Action being taken. Such notice shall be provided no later than two (2) Business Days after the commencement of such Enforcement Action; provided, however, that the failure to provide such notice shall not invalidate or otherwise affect the Enforcement Action or any Agent's rights hereunder.
(c) Right to Join. The Non-Initiating Agent shall have the right, but not the obligation, to join in any Enforcement Action commenced by the Initiating Agent. If the Non-Initiating Agent elects to join in such Enforcement Action, the Agents shall cooperate in good faith to coordinate the exercise of their respective remedies so as to maximize the aggregate recovery from the Shared Collateral for the benefit of all Secured Parties.
(d) Conflicts in Exercise of Remedies. In the event of any conflict between the Agents in the exercise of remedies with respect to the Shared Collateral (including disagreements regarding the timing, method, or scope of any Enforcement Action), the Agents shall confer in good faith to coordinate and resolve such conflict. If the Agents are unable to agree after such good faith consultation, either Agent may independently pursue its Enforcement Action in accordance with the applicable Loan Documents and applicable law, subject to the waterfall provisions of Section 3.02. Neither Agent shall be required to suspend, delay, or refrain from taking an Enforcement Action solely because the other Agent objects to the timing, method, or scope thereof, except to the extent expressly provided in this Agreement.
(e) Commercially Reasonable Manner. Each Agent agrees to exercise any Enforcement Action with respect to the Shared Collateral in a commercially reasonable manner, taking into account the interests of both classes of Secured Parties.
Section 3.02 — Application of Proceeds (Waterfall)
(a) General. All proceeds received by either Agent (or any Secured Party) from the exercise of remedies, Enforcement Actions, or other realization on any Shared Collateral (including any sale, foreclosure, collection, or other disposition of any Shared Collateral), together with any insurance proceeds, condemnation awards, or other amounts received with respect to Shared Collateral that are required to be applied to reduce Obligations pursuant to the Credit Agreement or any other Loan Document, shall be applied by the Agent receiving such proceeds in the following order of priority:
First, to the payment of all reasonable and documented costs and expenses incurred by either Agent in connection with the applicable Enforcement Action, collection, or realization (including, without limitation, reasonable attorneys' fees and expenses, court costs, receiver's fees, and the fees, costs, and expenses of each Agent reasonably incurred in connection with such enforcement), with such costs and expenses being shared and paid on a pro rata basis as between the Agents based on the respective amounts of such costs and expenses incurred by each Agent;
Second, to the payment in full of all Revolving Credit Obligations (including, without limitation, all principal, interest, fees, Cash Management Obligations, Hedging Obligations, letter of credit reimbursement obligations, indemnification obligations, costs, and expenses) on a pari passu and pro rata basis among the Revolving Credit Secured Parties, until the Discharge of Revolving Credit Obligations has occurred. For the avoidance of doubt, the Revolving Credit Obligations shall have priority in the application of proceeds of Shared Collateral over the Term Loan Obligations as set forth in this clause "Second," and such priority is intended to protect the revolving nature and shorter tenor of the Revolving Credit Facility (five (5) years) as compared to the Term Loan Facility (seven (7) years), and to provide assurance to the Revolving Credit Lenders that the proceeds of Shared Collateral will be available to repay the Revolving Credit Obligations in full before any proceeds are applied to the Term Loan Obligations;
Third, after the Discharge of Revolving Credit Obligations has occurred, to the payment in full of all Term Loan Obligations (including, without limitation, all principal, interest, fees, indemnification obligations, costs, and expenses) on a pro rata basis among the Term Loan Secured Parties, until the Discharge of Term Loan Obligations has occurred; and
Fourth, after both the Discharge of Revolving Credit Obligations and the Discharge of Term Loan Obligations have occurred, to the Borrower or as a court of competent jurisdiction may direct.
(b) Regular Payments. For the avoidance of doubt, the foregoing waterfall set forth in Section 3.02(a) applies solely to proceeds of Shared Collateral realized through Enforcement Actions or as otherwise required to be applied pursuant to the Loan Documents (including mandatory prepayment provisions). Regular scheduled payments of principal and interest and other amounts due and payable under the Credit Agreement in the ordinary course (and not in connection with an Enforcement Action) shall be applied in accordance with the terms of the Credit Agreement and shall not be subject to the waterfall provisions of this Section 3.02.
(c) Adequate Protection Payments. Adequate protection payments received in an Insolvency Proceeding shall be allocated in accordance with Section 5.04 of this Agreement.
Section 3.03 — Actions by Agents
(a) Each Agent shall act solely in its capacity as agent for the respective class of Secured Parties that it represents (that is, the Term Loan Agent shall act solely for the benefit of the Term Loan Secured Parties, and the Revolving Agent shall act solely for the benefit of the Revolving Credit Secured Parties) and shall have no duty, responsibility, or obligation to the Secured Parties represented by the other Agent.
(b) Neither Agent shall be liable to the other Agent, or to any Secured Party represented by the other Agent, for any action taken or omitted to be taken by such Agent in good faith in connection with the exercise of any rights or remedies under this Agreement, the Loan Documents, or applicable law, including any action taken or omitted in connection with any Enforcement Action with respect to the Shared Collateral.
(c) Each Agent acknowledges that the other Agent is acting in a fiduciary or agency capacity with respect to the Secured Parties that such Agent represents and that nothing in this Agreement shall be construed to impose upon either Agent any duty to act in the interests of the other class of Secured Parties.
Section 3.04 — Rights of Subrogation
(a) Upon the Discharge of Revolving Credit Obligations, the Revolving Agent (on behalf of the Revolving Credit Secured Parties) shall, to the extent of payments that would have been received by the Term Loan Secured Parties with respect to the Shared Collateral but for the priority of application set forth in Section 3.02, be subrogated to the rights of the Term Loan Secured Parties with respect to the Shared Collateral (including all liens, claims, and rights of the Term Loan Secured Parties in and to the Shared Collateral), until the Term Loan Obligations are paid in full.
(b) Upon the Discharge of Term Loan Obligations, the Term Loan Agent (on behalf of the Term Loan Secured Parties) shall, to the extent of payments that would have been received by the Revolving Credit Secured Parties with respect to the Shared Collateral but for the priority of application set forth in Section 3.02, be subrogated to the rights of the Revolving Credit Secured Parties with respect to the Shared Collateral (including all liens, claims, and rights of the Revolving Credit Secured Parties in and to the Shared Collateral), until the Revolving Credit Obligations are paid in full.
(c) The subrogation rights described in this Section 3.04 shall not be exercised by either Agent until the Discharge of the Obligations of the class to which such Agent's Secured Parties belong has occurred. Until such Discharge, any such subrogation rights shall be subject in all respects to the Lien Priority and the application of proceeds provisions of this Agreement.
Section 3.05 — Turnover
(a) If either Agent or any Secured Party receives any proceeds of Shared Collateral, or any payment or distribution with respect to Shared Collateral (including insurance proceeds, condemnation awards, or other amounts), that should have been applied in accordance with Section 3.02 but were not so applied (whether received by mistake, by operation of law, or otherwise), such Agent or Secured Party shall promptly (and in any event within five (5) Business Days of receipt) turn over and deliver such amounts (without interest and net of any reasonable and documented costs of collection) to the Agent that is entitled to receive such amounts for application in accordance with Section 3.02.
(b) Any amounts received by any Agent or Secured Party that are required to be turned over pursuant to this Section 3.05 shall be held in trust by such Agent or Secured Party for the benefit of the Agent entitled to receive such amounts and for the benefit of the Secured Parties represented by such Agent, and such amounts shall not be commingled with any other property of the receiving Agent or Secured Party, except to the extent that commingling is unavoidable pending remittance.
(c) The obligations of any Agent or Secured Party under this Section 3.05 are absolute and unconditional and shall not be affected by any defense, setoff, counterclaim, or other right that such Agent or Secured Party may have against any Person.
ARTICLE IV — RELEASE OF LIENS; AMENDMENTS TO LOAN DOCUMENTS
Section 4.01 — Release of Liens on Shared Collateral
(a) If either Agent releases its lien on any Shared Collateral in connection with any sale, transfer, or other disposition of such Shared Collateral that is permitted under the applicable Loan Documents (including any disposition permitted under the Credit Agreement or approved by the requisite Lenders or Agents thereunder), the other Agent shall be deemed to have simultaneously released its lien on such Shared Collateral, and such other Agent shall promptly execute and deliver to the Loan Parties (or, at the direction of the Loan Parties, to the applicable purchaser or transferee) such instruments of release, termination statements (including UCC-3 termination statements), and other documents as may be reasonably requested by the Loan Parties or the releasing Agent to evidence such release.
(b) Each Agent hereby irrevocably appoints the other Agent as its attorney-in-fact (which appointment is coupled with an interest and is irrevocable) for the purpose of executing and delivering, on behalf of the appointing Agent and the Secured Parties it represents, such instruments of release, lien terminations, UCC-3 termination statements, intellectual property releases, and other documents as may be necessary or desirable to effect the release of liens contemplated by this Section 4.01 in connection with any permitted disposition of Shared Collateral. Each Agent agrees to ratify and confirm any such release or instrument executed by the other Agent acting as attorney-in-fact pursuant to this Section 4.01(b).
(c) The releases contemplated by this Section 4.01 shall be without recourse to or warranty by either Agent or any Secured Party.
Section 4.02 — Amendments to Loan Documents
(a) Each Agent may agree, without the prior written consent of the other Agent, to any amendment, restatement, supplement, waiver, or modification of its respective Loan Documents (including, without limitation, changes to interest rates, maturity dates, amortization schedules, financial covenants, or other terms and conditions); provided, however, that no such amendment, restatement, supplement, waiver, or modification shall, without the prior written consent of the other Agent:
(i) increase the aggregate principal amount of the applicable Obligations secured by the Shared Collateral beyond (A) in the case of the Term Loan Obligations, $500,000,000 (plus any paid-in-kind interest, capitalized fees, and incremental term loan amounts expressly permitted under the Credit Agreement in an aggregate amount not to exceed $100,000,000) and (B) in the case of the Revolving Credit Obligations, $260,000,000 (plus any increase in revolving commitments expressly permitted under the Credit Agreement in an aggregate amount not to exceed $75,000,000);
(ii) change the definitions of "Collateral," "Shared Collateral," or any analogous definition in any Loan Document in a manner that is materially adverse to the other class of Secured Parties (including by expanding the scope of property securing one class of Obligations without a corresponding expansion for the other class);
(iii) alter, amend, or modify the waterfall provisions of Section 3.02 of this Agreement or the Lien Priority established by Section 2.01 of this Agreement, or contravene or conflict with any provision of this Agreement relating to the relative rights, priorities, or obligations of the Agents or the Secured Parties with respect to the Shared Collateral; or
(iv) change the conditions to the release of any lien on Shared Collateral in a manner that is materially adverse to the other class of Secured Parties.
(b) Any amendment, restatement, supplement, waiver, or modification of the Guarantee and Collateral Agreement shall require the prior written consent of both the Term Loan Agent and the Revolving Agent.
(c) Each Agent shall promptly provide notice to the other Agent of any material amendment to its respective Loan Documents.
Section 4.03 — Permitted Refinancings
(a) Any Refinancing of all or any portion of the Term Loan Obligations or the Revolving Credit Obligations shall be permitted under this Agreement; provided that the holders of the refinancing obligations (or their agent or representative) shall have agreed in writing to be bound by this Agreement (or shall have entered into a replacement intercreditor agreement with the non-refinancing Agent on terms and conditions substantially similar to this Agreement), and such agreement shall be in form and substance reasonably satisfactory to the non-refinancing Agent.
(b) Upon the effectiveness of any Refinancing, the agent or representative of the holders of the refinancing obligations (the "Replacement Agent") shall automatically succeed to all rights, benefits, and obligations of the refinanced Agent under this Agreement (or the applicable replacement intercreditor agreement), and the refinanced Agent shall be released from all further obligations hereunder with respect to the refinanced Obligations (other than obligations that, by their terms, survive termination or discharge).
(c) The Loan Parties shall use commercially reasonable efforts to facilitate any Refinancing and shall execute and deliver such documents and instruments as may be reasonably necessary to effectuate the provisions of this Section 4.03, including any joinder agreement substantially in the form of Exhibit B attached hereto.
ARTICLE V — INSOLVENCY PROCEEDINGS
Section 5.01 — Applicability
This Article V governs the rights and obligations of the Agents and the Secured Parties in any Insolvency Proceeding affecting any Loan Party, including any case commenced under the Bankruptcy Code, any receivership or similar proceeding under state or federal law, or any comparable proceeding under foreign law. The provisions of this Article V shall apply in addition to, and not in limitation of, the other provisions of this Agreement, and in the event of any conflict between the provisions of this Article V and the other provisions of this Agreement with respect to matters arising in or relating to an Insolvency Proceeding, the provisions of this Article V shall control.
Section 5.02 — DIP Financing
If any Loan Party becomes subject to an Insolvency Proceeding, the following provisions shall apply with respect to DIP Financing:
(a) Right to Seek DIP Financing. Either Agent may seek, propose, consent to, or support DIP Financing to be provided to any debtor Loan Party, which DIP Financing may be secured by liens on the Shared Collateral; provided that any such liens granted in connection with DIP Financing shall prime or be pari passu with the liens of both Agents on the Shared Collateral (and not solely the liens of one Agent), and the proceeds of such DIP Financing shall be made available for the use and benefit of the debtor Loan Party's estate in accordance with the orders of the bankruptcy court.
(b) Obligation Not to Oppose. Neither Agent shall oppose any DIP Financing proposed, sought, or supported by the other Agent, unless such DIP Financing would (i) materially and disproportionately impair the non-proposing class of Secured Parties' recovery from the Shared Collateral relative to the proposing class's recovery, (ii) require the non-proposing Agent or its Secured Parties to provide a release of claims or liens other than in connection with a plan of reorganization or a Section 363 sale, or (iii) impose additional obligations on the non-proposing Agent or its Secured Parties beyond those contemplated by this Agreement. Any objection by either Agent to DIP Financing pursuant to this Section 5.02(b) shall be made in good faith and shall be limited to the specific bases set forth in clauses (i) through (iii) of this Section 5.02(b).
(c) Cash Collateral. Neither Agent shall be required to consent to the use of cash collateral (as defined in Section 363(a) of the Bankruptcy Code) by any debtor Loan Party unless adequate protection is provided for both classes of Secured Parties (that is, both the Term Loan Secured Parties and the Revolving Credit Secured Parties) in accordance with Section 361 of the Bankruptcy Code. Each Agent shall have the right to seek adequate protection independently on behalf of the Secured Parties it represents.
Section 5.03 — Relief from Stay
(a) Each Agent may seek relief from the automatic stay imposed by Section 362 of the Bankruptcy Code (or any similar stay or injunction under applicable law) with respect to the Shared Collateral, in order to exercise any rights or remedies with respect thereto in accordance with this Agreement and applicable law.
(b) Neither Agent shall oppose any motion by the other Agent for relief from the automatic stay with respect to the Shared Collateral. For the avoidance of doubt, this provision does not prevent either Agent from presenting its views to the bankruptcy court regarding the appropriate terms and conditions for granting relief from stay, including the method and manner of any disposition of Shared Collateral.
(c) If either Agent obtains relief from the automatic stay and realizes any proceeds from the exercise of remedies with respect to the Shared Collateral, such proceeds shall be applied in accordance with the waterfall set forth in Section 3.02 of this Agreement.
Section 5.04 — Adequate Protection
(a) If either Agent receives adequate protection payments (whether in the form of cash payments, additional or replacement liens, superpriority administrative expense claims, or otherwise) in any Insolvency Proceeding with respect to the Shared Collateral, such payments shall be shared with the other Agent on a pro rata basis, based on the then-outstanding principal amounts of the respective Obligations (that is, the aggregate outstanding principal amount of the Term Loan Obligations as compared to the aggregate outstanding principal amount of the Revolving Credit Obligations at the time such adequate protection payments are received).
(b) For purposes of determining the pro rata share under this Section 5.04, the outstanding principal amount of the Revolving Credit Obligations shall include only the principal amount of revolving loans outstanding and the face amount of undrawn letters of credit, and shall exclude Cash Management Obligations and Hedging Obligations, unless the bankruptcy court specifically includes such amounts in the adequate protection calculation.
(c) Each Agent shall promptly notify the other Agent of any adequate protection payments received and shall remit the other Agent's pro rata share within five (5) Business Days of receipt thereof.
(d) Adequate protection may take the form of cash payments, additional or replacement liens, superpriority administrative expense claims under Section 507(b) of the Bankruptcy Code, or such other form of adequate protection as may be determined by the bankruptcy court or agreed upon by the Agents, and the determination of the form and amount of adequate protection shall be subject to the approval of the bankruptcy court.
Section 5.05 — Avoidance Actions
(a) Neither Agent shall, on behalf of itself or the Secured Parties it represents, assert or support any claim that any payment or transfer made to the other Agent (or to any Secured Party represented by the other Agent) prior to the commencement of an Insolvency Proceeding constitutes a preferential transfer under Section 547 of the Bankruptcy Code, a fraudulent conveyance or fraudulent transfer under Sections 548 or 544(b) of the Bankruptcy Code, or an avoidable transfer under any analogous provision of state or foreign law.
(b) The foregoing provision shall not limit, restrict, or otherwise affect any rights of any Loan Party, any bankruptcy trustee, any debtor-in-possession, any creditors' committee, or any other party in interest under the Bankruptcy Code to assert or pursue any avoidance action or recovery under Sections 544, 545, 547, 548, 549, 550, or 553 of the Bankruptcy Code or any analogous provision of applicable law.
Section 5.06 — No Waiver of Rights
Except as expressly provided in this Article V, nothing in this Agreement shall limit, restrict, or otherwise affect either Agent's rights under the Bankruptcy Code or any other applicable law governing Insolvency Proceedings, including the right to (a) file and prosecute proofs of claim with respect to the Obligations owed to the Secured Parties it represents, (b) vote (or direct its Secured Parties to vote) to accept or reject any plan of reorganization, liquidation, or adjustment of debts, (c) object to any plan of reorganization, liquidation, or adjustment of debts, (d) seek the appointment of a trustee, examiner, or responsible officer, (e) participate in discovery or other proceedings in any Insolvency Proceeding, and (f) exercise any other rights available to a creditor or a secured party under the Bankruptcy Code or applicable law.
Section 5.07 — Post-Petition Interest
Both the Term Loan Agent and the Revolving Agent shall be entitled to seek the allowance of post-petition interest (including default-rate interest) on their respective Obligations to the extent permitted under Section 506(b) of the Bankruptcy Code or otherwise. Neither Agent shall oppose, object to, or seek to reduce the other Agent's claim for post-petition interest to the extent that the value of the Shared Collateral (as determined by the bankruptcy court) is sufficient to cover both classes of Secured Parties' claims, including post-petition interest. Nothing in this Section 5.07 shall require either Agent to consent to a valuation of the Shared Collateral for purposes of Section 506(a) of the Bankruptcy Code.
Section 5.08 — Asset Sales in Insolvency
(a) In the event of any sale or other disposition of Shared Collateral under Section 363 of the Bankruptcy Code (or any analogous provision of applicable law), the proceeds of such sale or disposition shall be applied in accordance with the waterfall set forth in Section 3.02 of this Agreement.
(b) Both Agents consent to a sale of Shared Collateral free and clear of liens under Section 363(f) of the Bankruptcy Code (or any analogous provision of applicable law), provided that (i) the proceeds of such sale are applied in accordance with Section 3.02 of this Agreement, and (ii) the liens of both Agents attach to the proceeds of such sale to the same extent and with the same Lien Priority as existed with respect to the Shared Collateral prior to such sale.
(c) Either Agent may credit bid the full amount of its respective Obligations (including principal, interest, fees, and other amounts) in connection with any sale of Shared Collateral under Section 363 of the Bankruptcy Code or pursuant to a plan of reorganization; provided that if both Agents seek to credit bid at the same sale, the Agents shall consult in good faith to coordinate a joint credit bid that reflects the combined Obligations of both classes of Secured Parties. If the Agents are unable to agree on a joint credit bid after good faith consultation, each Agent may independently credit bid the amount of the Obligations for which it acts as agent, subject to the application of proceeds provisions of Section 3.02 and the rights of the other Agent under applicable law.
(d) Nothing in this Section 5.08 shall be construed to require either Agent to consent to any particular sale price or to any sale that such Agent believes in good faith is not in the best interests of the Secured Parties it represents, except as expressly set forth in Section 5.08(b) above.
ARTICLE VI — ADDITIONAL AGREEMENTS AND WAIVERS
Section 6.01 — Agreements Regarding Actions with Respect to Collateral
(a) Each Agent agrees that it shall not take any action with respect to the Shared Collateral that is inconsistent with the terms of this Agreement. Without limiting the generality of the foregoing, each Agent agrees that it shall not (i) seek to establish a priority with respect to its liens on the Shared Collateral that is different from the Lien Priority established by this Agreement, (ii) seek to obtain a lien on any Shared Collateral to the exclusion of the other Agent (except to the extent permitted by Section 2.04), or (iii) take any action that would materially impair the value of the Shared Collateral or the other Agent's liens thereon.
(b) Each Agent agrees to take such actions as may be reasonably requested by the other Agent from time to time to maintain the perfection and priority of the liens on the Shared Collateral for the benefit of both classes of Secured Parties, including (i) executing and filing UCC financing statement amendments, continuation statements, and other filings, (ii) executing and delivering control agreements with respect to deposit accounts, securities accounts, or other investment property, (iii) executing and delivering intellectual property security agreements and filings with the United States Patent and Trademark Office or the United States Copyright Office, and (iv) taking such other actions as may be necessary or desirable to maintain, protect, and preserve the Shared Collateral and the liens thereon.
(c) The costs and expenses reasonably incurred by either Agent in connection with the actions described in this Section 6.01 shall be borne by the Loan Parties. If the Loan Parties fail to pay such costs and expenses, such costs and expenses shall constitute part of the Obligations owed to the Agent incurring such costs and expenses and shall be secured by the Shared Collateral.
Section 6.02 — No Duty of Care
(a) Neither Agent shall owe any fiduciary duty, duty of care, or other duty or obligation to the Secured Parties represented by the other Agent. Without limiting the generality of the foregoing, neither Agent shall have any duty to (i) preserve, protect, insure, or maintain the Shared Collateral for the benefit of the other Agent or the other class of Secured Parties, (ii) maximize the value of the Shared Collateral or the proceeds thereof for the benefit of the other class of Secured Parties, (iii) take any action to perfect or maintain the perfection of any lien on the Shared Collateral for the benefit of the other class of Secured Parties, or (iv) provide any information to the other Agent or the other class of Secured Parties, except as expressly provided in this Agreement.
(b) Each Agent's obligations under this Agreement and the Loan Documents are solely to the class of Secured Parties that it represents, and nothing in this Agreement shall be construed to create or impose upon either Agent any obligation or liability to any Secured Party represented by the other Agent.
Section 6.03 — Information Sharing
(a) Each Agent shall provide to the other Agent, upon the reasonable written request of the other Agent:
(i) copies of any notice of default or event of default delivered or received by such Agent under its respective Loan Documents;
(ii) copies of any notice of acceleration of the maturity of the Obligations under its respective Loan Documents;
(iii) copies of any notice relating to the exercise of remedies or commencement of any Enforcement Action against any Shared Collateral; and
(iv) copies of any notice of the commencement of any Insolvency Proceeding with respect to any Loan Party.
(b) Each Agent shall provide prompt written notice to the other Agent upon becoming aware of (i) the commencement of any Enforcement Action with respect to the Shared Collateral by any Person (including any Agent or Secured Party), (ii) the commencement of any Insolvency Proceeding with respect to any Loan Party, or (iii) any material casualty or condemnation event affecting any material portion of the Shared Collateral.
(c) Neither Agent shall be liable to the other Agent for any failure to provide the notices or information described in this Section 6.03, except to the extent such failure constitutes a breach of this Agreement, and any such failure shall not affect the validity or enforceability of any Enforcement Action or other exercise of rights hereunder.
Section 6.04 — Insurance and Condemnation Proceeds
(a) Insurance proceeds and condemnation awards with respect to the Shared Collateral shall be applied in accordance with the Credit Agreement. To the extent the Credit Agreement or any other Loan Document requires the application of insurance proceeds or condemnation awards to reduce the Obligations, such proceeds shall be applied in accordance with the waterfall set forth in Section 3.02 of this Agreement.