<PAGE>
Exhibit 10.2
================================================================================
INTERCREDITOR AGREEMENT
dated as
of
May 10, 2005,
among
WERNER HOLDING CO. (DE), INC.,
WERNER HOLDING CO. (PA), INC.
the Subsidiaries of WERNER HOLDING CO. (DE), INC. party hereto,
JPMORGAN CHASE BANK, N.A.,
as First Lien Administrative Agent
and
CREDIT SUISSE FIRST BOSTON,
acting through its Cayman Islands branch,
as Second Lien Administrative Agent
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<PAGE>
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS
................................................ 2
SECTION 1.01. CERTAIN DEFINED TERMS
..................................... 2
SECTION 1.02. OTHER DEFINED TERMS
....................................... 2
SECTION 1.03. TERMS GENERALLY
........................................... 9
ARTICLE II LIEN PRIORITIES
........................................... 9
SECTION 2.01. RELATIVE PRIORITIES
....................................... 9
SECTION 2.02. PROHIBITION ON CONTESTING
LIENS ........................... 10
SECTION 2.03. NO NEW LIENS
.............................................. 10
SECTION 2.04. SIMILAR LIENS AND AGREEMENTS
.............................. 10
ARTICLE III ENFORCEMENT OF
RIGHTS; MATTERS RELATING TO COLLATERAL .... 11
SECTION 3.01. EXERCISE OF RIGHTS AND
REMEDIES ........................... 11
SECTION 3.02. NO INTERFERENCE
........................................... 12
SECTION 3.03. RIGHTS AS UNSECURED CREDITORS
............................. 13
SECTION 3.04. RELEASES
.................................................. 13
SECTION 3.05. INSURANCE AND CONDEMNATION
AWARDS ......................... 14
ARTICLE IV PAYMENTS
.................................................. 15
SECTION 4.01. APPLICATION OF PROCEEDS
................................... 15
SECTION 4.02. PAYMENT OVER
.............................................. 15
ARTICLE V BAILMENT AND
SUB-AGENCY FOR PERFECTION OF CERTAIN SECURITY
INTERESTS
............................................................
15
ARTICLE VI INSOLVENCY OR
LIQUIDATION PROCEEDINGS ..................... 16
SECTION 6.01. GENERAL APPLICABILITY AND
FINANCE MATTERS ................. 16
SECTION 6.02. RELIEF FROM THE AUTOMATIC
STAY ............................ 18
SECTION 6.03. REORGANIZATION SECURITIES
................................. 18
SECTION 6.04. POST-PETITION INTEREST
.................................... 18
SECTION 6.05. SEPARATE CLASSES
.......................................... 19
SECTION 6.06. ASSET SALES
............................................... 19
ARTICLE VII OTHER AGREEMENTS
......................................... 19
SECTION 7.01. MATTERS RELATING TO LOAN
DOCUMENTS ........................ 19
SECTION 7.02. EFFECT OF REFINANCING OF
INDEBTEDNESS UNDER FIRST LIEN
CREDIT DOCUMENTS .......................................
20
SECTION 7.03. NO WAIVER BY FIRST LIEN
SECURED PARTIES ................... 21
SECTION 7.04. REINSTATEMENT
............................................. 21
SECTION 7.05. PURCHASE RIGHT
............................................ 21
SECTION 7.06. DELIVERY OF INFORMATION
................................... 23
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ii
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ARTICLE VIII REPRESENTATIONS
AND WARRANTIES .......................... 23
SECTION 8.01. REPRESENTATIONS AND
WARRANTIES OF EACH PARTY .............. 23
SECTION 8.02. REPRESENTATIONS AND
WARRANTIES OF EACH ADMINISTRATIVE
AGENT ..................................................
23
ARTICLE IX NO RELIANCE; NO
LIABILITY; OBLIGATIONS ABSOLUTE ........... 24
SECTION 9.01. NO RELIANCE; INFORMATION
.................................. 24
SECTION 9.02. NO WARRANTIES OR LIABILITY
................................ 24
SECTION 9.03. OBLIGATIONS ABSOLUTE
...................................... 25
ARTICLE X MISCELLANEOUS
.............................................. 25
SECTION 10.01. NOTICES
.................................................. 25
SECTION 10.02. CONFLICTS
................................................ 26
SECTION 10.03. EFFECTIVENESS; SURVIVAL
.................................. 26
SECTION 10.04. SEVERABILITY
............................................. 26
SECTION 10.05. AMENDMENTS; WAIVERS
...................................... 26
SECTION 10.06. SUBROGATION
.............................................. 26
SECTION 10.07. APPLICABLE LAW;
JURISDICTION; CONSENT TO SERVICE OF
PROCESS ...............................................
27
SECTION 10.08. WAIVER OF JURY TRIAL
..................................... 27
SECTION 10.09. PARTIES IN INTEREST
...................................... 27
SECTION 10.10. SPECIFIC PERFORMANCE
..................................... 28
SECTION 10.11. HEADINGS
................................................. 28
SECTION 10.12. COUNTERPARTS
............................................. 28
SECTION 10.13. PROVISIONS SOLELY TO DEFINE
RELATIVE RIGHTS .............. 28
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<PAGE>
INTERCREDITOR AGREEMENT, dated as of May 10, 2005, among WERNER
HOLDING CO. (DE), INC., a Delaware
corporation (the "COMPANY"), WERNER HOLDING
CO. (PA), INC., a Pennsylvania corporation,
the subsidiaries of the Company
party hereto, JPMORGAN CHASE BANK, N.A., as
administrative agent (together with
its successors in such capacity, the "FIRST
LIEN ADMINISTRATIVE AGENT") for the
First Lien Lenders (as defined below), and
CREDIT SUISSE FIRST BOSTON, acting
through its Cayman Islands branch ("CSFB"),
as administrative agent (together
with its successors in such capacity, the
"SECOND LIEN ADMINISTRATIVE AGENT")
for the Second Lien Lenders (as defined
below).
PRELIMINARY STATEMENT
Reference is made to (a) the Credit Agreement, dated as of June
11,
2003 (as heretofore amended, supplemented
or otherwise modified or as further
amended, restated, supplemented or
otherwise modified in accordance with the
terms of this Agreement, the "FIRST LIEN
CREDIT AGREEMENT"), among the Company,
the lenders from time to time party thereto
(the "FIRST LIEN LENDERS") and the
First Lien Administrative Agent, (b) the
Credit Agreement, dated as of May 10,
2005 (as amended, restated, supplemented or
otherwise modified in accordance
with the terms of this Agreement, the
"SECOND LIEN CREDIT AGREEMENT" and,
together with the First Lien Credit
Agreement, the "CREDIT AGREEMENTS"), among
the Company, the lenders from time to time
party thereto (the "SECOND LIEN
LENDERS"), CSFB, as joint lead arranger, as
joint bookrunner, and as Second Lien
Administrative Agent, and MORGAN STANLEY
SENIOR FUNDING, INC., as joint lead
arranger and as joint bookrunner, (c) the
Collateral Agreement, dated as of June
11, 2003 (as heretofore amended,
supplemented or otherwise modified or as
further amended, restated, supplemented or
otherwise modified in accordance with
the terms of this Agreement, the "FIRST
LIEN COLLATERAL AGREEMENT"), among the
Company, the subsidiaries of the Company
party thereto and the First Lien
Administrative Agent, (d) the Collateral
Agreement, dated as of May 10, 2005 (as
amended, restated, supplemented or
otherwise modified in accordance with the
terms of this Agreement, the "SECOND LIEN
COLLATERAL AGREEMENT"), among the
Company, the subsidiaries of the Company
party thereto and the Second Lien
Administrative Agent, and (e) the other
Security Documents referred to in the
Credit Agreements.
RECITALS
A. The First Lien Lenders have made and have agreed to make loans
and
other extensions of credit to and on behalf
of the Company pursuant to the First
Lien Credit Agreement and the First Lien
Obligations (such term and each other
capitalized term used but not defined in
these recitals having the meaning given
it in Article I) are secured by first
priority Liens on, and security interests
in, the Collateral. The First Lien Lenders
have agreed to amend the First Lien
Credit Agreement to, among other things,
permit the Company to borrow the Second
Lien Term Loans and to permit the Company
and the Guarantors to grant Liens to
the Second Lien Administrative Agent for
the benefit of the Second Lien Lenders
upon, among other terms and conditions, the
condition that the parties hereto
enter into this Agreement.
B. The Second Lien Lenders have agreed to make loans to the
Company
pursuant to the Second Lien Credit
Agreement, upon, among other terms and
conditions, the condition that the Second
Lien Obligations shall be secured by
second priority Liens on, and security
interests in, the Collateral.
C. The parties hereto are entering into this Agreement in
connection
with such amendment of the First Lien
Credit Agreement and the execution and
delivery of the Second Lien
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2
Credit Agreement in order to, among other
things, set forth their respective
rights and remedies with respect to the
Collateral.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. CERTAIN DEFINED TERMS. Capitalized terms used in
this
Agreement and not otherwise defined herein
have the meanings set forth in the
First Lien Credit Agreement, the Second
Lien Credit Agreement, the First Lien
Collateral Agreement or the Second Lien
Collateral Agreement, as applicable.
SECTION 1.02. OTHER DEFINED TERMS. As used in the Agreement,
the
following terms shall have the meanings
specified below:
"ADMINISTRATIVE AGENTS" shall mean the First Lien Administrative
Agent
and the Second Lien Administrative
Agent.
"AGGREGATE FIRST LIEN EXPOSURE" shall mean at any time, an
amount
equal to (a) the aggregate outstanding
principal amount of First Lien Term Loans
and (b) the amount of Revolving Credit
Commitments then in effect or, if the
Revolving Credit Commitments have been
terminated, (i) the aggregate outstanding
principal amount of Revolving Credit Loans
and (ii) the aggregate amount of L/C
Exposure.
"AGGREGATE SECOND LIEN EXPOSURE" shall mean at any time, an
amount
equal to the aggregate outstanding
principal amount of Second Lien Term Loans.
"AGREEMENT" shall mean this Intercreditor Agreement.
"APPLICABLE PERCENTAGE" shall have the meaning assigned to such
term
in Section 6.01(c).
"BANKRUPTCY CODE" shall mean Title 11 of the United States Code
entitled "Bankruptcy," as now and
hereinafter in effect, or any successor
statute.
"BANKRUPTCY LAW" shall mean the Bankruptcy Code and any other
Federal,
state or foreign bankruptcy, insolvency,
receivership or similar law.
"BUSINESS DAY" shall mean a day other than a Saturday, Sunday or
other
day on which commercial banks in New York
City are authorized or required to
close.
"COMPANY" shall have the meaning assigned to such term in the
preamble
to this Agreement.
"CLOSING DATE" shall mean May 10, 2005.
"COLLATERAL" shall mean, collectively, the First Lien Collateral
and
the Second Lien Collateral.
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3
"CREDIT AGREEMENTS" shall have the meaning assigned to such term
in
the preliminary statement of this
Agreement.
"CSFB" shall have the meaning assigned to such term in the preamble
to
this Agreement.
"DIP FINANCING" shall have the meaning assigned to such term in
Section 6.01(a).
"DIP FINANCING LIENS" shall have the meaning assigned to such term
in
Section 6.01(b).
"DISCHARGE OF FIRST LIEN OBLIGATIONS" shall mean, subject to
Sections
7.02 and 7.04, (a) payment in full in cash
of the principal of and interest
(including interest accruing during the
pendency of any Insolvency or
Liquidation Proceeding, regardless of
whether allowed or allowable in such
Insolvency or Liquidation Proceeding) on
all indebtedness outstanding under the
First Lien Credit Documents, (b) payment in
full in cash (or, in the case of
Interest Rate Agreements, cash
collateralization in a manner reasonably
acceptable to the First Lien Administrative
Agent) of all other First Lien
Obligations that are due and payable or
otherwise accrued and owing at or prior
to the time such principal and interest are
paid, (c) cancellation or cash
collateralization (in an amount reasonably
satisfactory to the First Lien
Administrative Agent) of all letters of
credit issued and outstanding under the
First Lien Credit Agreement and (d)
termination or expiration of all commitments
to lend and all obligations to issue
letters of credit under the First Lien
Credit Agreement.
"DISPOSITION" shall mean any sale, lease, exchange, transfer or
other
disposition. "DISPOSE" shall have a
correlative meaning.
"FINANCING LEASE" shall mean (a) any lease of property, real or
personal, the obligations under which are
capitalized on a consolidated balance
sheet of the Company and its consolidated
Subsidiaries and (b) any other such
lease to the extent that the then present
value of any rental commitment
thereunder should, in accordance with GAAP,
be capitalized on a balance sheet of
the lessee.
"FIRST LIEN ADMINISTRATIVE AGENT" shall have the meaning assigned
to
such term in the preamble to this
Agreement.
"FIRST LIEN COLLATERAL" shall mean all "Collateral", as defined in
the
First Lien Collateral Agreement, and any
other assets of the Company, the Parent
or any Subsidiary now or at any time
hereafter subject to Liens securing any
First Lien Obligations.
"FIRST LIEN COLLATERAL AGREEMENT" shall have the meaning assigned
to
such term in the preliminary statement of
this Agreement.
"FIRST LIEN CREDIT AGREEMENT" shall have the meaning assigned to
such
term in the preliminary statement of this
Agreement.
"FIRST LIEN CREDIT DOCUMENTS" shall mean the "Credit Documents",
as
defined in the First Lien Credit Agreement
and each of the other agreements,
documents and instruments providing for or
evidencing any other First Lien
Obligation, and any other document or
instrument executed or delivered at any
time in connection with any First Lien
Obligations,
<PAGE>
4
including any First Lien Security Documents
and any intercreditor or joinder
agreement among holders of First Lien
Obligations.
"FIRST LIEN LENDERS" shall have the meaning assigned to such term
in
the preliminary statement of this
Agreement.
"FIRST LIEN OBLIGATIONS" shall mean all Obligations outstanding
under
the First Lien Credit Agreement and the
other First Lien Credit Documents.
"First Lien Obligations" shall include all
interest accrued or accruing (or
which would, absent commencement of an
Insolvency or Liquidation Proceeding,
accrue) after commencement of an Insolvency
or Liquidation Proceeding in
accordance with the rate specified in the
relevant First Lien Credit Document
whether or not the claim for such interest
is allowed as a claim in such an
Insolvency or Liquidation Proceeding.
"FIRST LIEN REQUIRED LENDERS" shall have the meaning assigned to
the
term "Required Lenders" in the First Lien
Credit Agreement.
"FIRST LIEN SECURED PARTIES" shall mean, at any time, (a) the
First
Lien Lenders, (b) the First Lien
Administrative Agent, (c) the Issuing Lenders,
(d) each other Person to whom any of the
First Lien Obligations (including First
Lien Obligations under any Interest Rate
Agreement or Foreign Currency Agreement
and indemnification obligations) is owed
and (e) the successors, replacements
and assigns of each of the foregoing.
"FIRST LIEN SECURITY DOCUMENTS" shall mean the "Security
Documents",
as defined in the First Lien Credit
Agreement, and any other agreement, document
or instrument pursuant to which a Lien is
granted to secure any First Lien
Obligations or under which rights or
remedies with respect to any such Lien are
governed.
"FIRST LIEN TERM LOANS" shall mean the term loans advanced under
the
First Lien Credit Agreement.
"FIRST PRIORITY LIENS" shall mean all Liens on the First Lien
Collateral to secure the First Lien
Obligations, whether created under the First
Lien Security Documents or acquired by
possession, statute, operation of law,
subrogation or otherwise.
"FOREIGN CURRENCY AGREEMENT" shall mean all currency swaps, caps
or
collar agreements or similar arrangements
providing for protection against
fluctuations in currency exchange rates,
either generally or under specific
contingencies, entered into in the ordinary
course of business and not for
speculative purposes, with a First Lien
Lender or an Affiliate of a First Lien
Lender.
"GAAP" shall mean generally accepted accounting principles in
the
United States in effect from time to
time.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government,
any
state or other political subdivision
thereof or any entity exercising executive,
legislative, judicial, regulatory or
administrative functions of or pertaining
to government.
"GRANTORS" shall mean the Company, Parent and each Subsidiary
that
shall have created or purported to create
any First Priority Lien or Second
Priority Lien on its assets to secure any
First Lien Obligations or any Second
Lien Obligations.
<PAGE>
5
"GUARANTORS" shall mean, collectively, Parent and each Subsidiary
that
has guaranteed, or that may from time to
time hereafter guarantee, the First
Lien Obligations or the Second Lien
Obligations, whether by executing and
delivering the applicable Guarantee, a
supplement thereto or otherwise.
"INSOLVENCY OR LIQUIDATION PROCEEDING" shall mean (a) any voluntary
or
involuntary case or proceeding under the
Bankruptcy Code or any other Bankruptcy
Law with respect to any Grantor, (b) any
voluntary or involuntary appointment of
a receiver, trustee, custodian,
sequestrator, conservator or similar official
for any Grantor or for a substantial part
of the property or assets of any
Grantor, (c) any voluntary or involuntary
winding-up or liquidation of any
Grantor or (d) a general assignment for the
benefit of creditors by any Grantor.
"INTEREST RATE AGREEMENT" shall mean any interest rate swap
agreement,
interest rate cap agreement, interest rate
collar agreement or other similar
agreement or arrangement, providing for
protection against fluctuations in
interest rates, entered into the ordinary
course of business and not for
speculative purposes, with a First Lien
Lender or an Affiliate of a First Lien
Lender.
"ISSUING LENDERS" shall mean the First Lien Lenders that are
issuers
of Letters of Credit under the First Lien
Credit Agreement.
"L/C EXPOSURE" shall mean at any time, an amount equal to the sum
of
(a) the aggregate amount of the then
undrawn and outstanding Letters of Credit
and (b) the aggregate outstanding amount of
L/C Obligations.
"L/C OBLIGATIONS" shall mean the obligations of the Company to
reimburse the Issuing Lenders for payments
made by the Issuing Lenders under the
Letters of Credit that have not been
reimbursed by the Company.
"LEASE OBLIGATIONS" shall mean, as of the date of any
determination
thereof, the rental commitments of the
Grantors determined on a consolidated
basis, if any, under leases for real and/or
personal property (net of rental
commitments from sub-leases thereof),
excluding however, obligations under
Financing Leases.
"LETTERS OF CREDIT" shall mean letters of credit issued under
the
First Lien Credit Agreement.
"LIEN" shall mean any mortgage, pledge, hypothecation,
assignment,
deposit arrangement, encumbrance, lien
(statutory or other), or preference,
priority or other security agreement or
preferential arrangement of any kind or
nature whatsoever (including, without
limitation, any conditional sale or other
title retention agreement, any financing
lease having substantially the same
economic effect as any of the foregoing,
and the filing of any financing
statement under the Uniform Commercial Code
or comparable law of any
jurisdiction in respect of any of the
foregoing, except for the filing of
financing statements in connection with
Lease Obligations incurred by the
Company or its Subsidiaries to the extent
that such financing statements relate
to the property subject to such Lease
Obligations).
"LOAN DOCUMENTS" shall mean the First Lien Credit Documents and
the
Second Lien Credit Documents.
"MAXIMUM DIP FINANCING AMOUNT" shall mean $100,000,000.
<PAGE>
6
"MAXIMUM FIRST LIEN OBLIGATIONS AMOUNT" shall mean the sum of (a)
an
amount of First Lien Term Loans equal to
$90,000,000 minus the aggregate
principal amount of all First Lien Term
Loans repaid or prepaid or otherwise
satisfied after the date of this Agreement,
(b) an amount of Revolving Credit
Commitments equal to $50,000,000 and (c)
$7,500,000 minus the aggregate amount
of all permanent reductions of the
Revolving Credit Commitments after the date
of this Agreement (excluding, in the case
of clauses (a) and (b), any repayment,
prepayment, satisfaction or reduction
pursuant to a Refinancing of First Lien
Obligations undertaken pursuant to and in
accordance with this Agreement;
provided that, if, in connection with such
Refinancing, (x) all or any portion
of First Lien Term Loans are repaid,
prepaid or satisfied from proceeds other
than Refinancing indebtedness incurred
under New First Lien Credit Documents in
accordance with this Agreement, then such
First Lien Term Loans so repaid,
prepaid or satisfied from proceeds other
than such Refinancing indebtedness
shall be counted to reduce the amount of
First Lien Term Loans referred to in
clause (a) and (y) Revolving Credit
Commitments after giving effect to such
Refinancing are less than Revolving Credit
Commitments prior to such
Refinancing, the amount by which such
Revolving Credit Commitments are less
shall constitute a reduction of Revolving
Credit Commitments for purposes of
clause (b)).
"NEW FIRST LIEN ADMINISTRATIVE AGENT" shall have the meaning
assigned
to such term in Section 7.02.
"NEW FIRST LIEN CREDIT DOCUMENTS" shall have the meaning assigned
to
such term in Section 7.02.
"NEW
FIRST LIEN OBLIGATIONS" shall have the meaning assigned to such
term in Section 7.02.
"OBLIGATIONS" means all obligations of every nature of each
Grantor
from time to time owed to any First Lien
Secured Party or Second Lien Secured
Party, in each case under the First Lien
Credit Documents or the Second Lien
Credit Documents, whether for principal,
interest, fees, expenses,
indemnification or otherwise (including,
without limitation, in respect of
Interest Rate Agreements), and all
guarantees of any of the foregoing and
including, without limitation, all First
Lien Obligations and all Second Lien
Obligations.
"PARENT" shall mean Werner Holding Co. (PA), Inc., a
Pennsylvania
corporation.
"PERSON" shall mean any natural person, corporation, business
trust,
joint venture, association, company,
limited liability company, partnership,
Governmental Authority or other entity.
"PERMITTED LIEN" shall mean any Lien that is both a "Permitted
Lien"
as such term is defined under the First
Lien Credit Agreement and a "Permitted
Lien" as such term is defined under the
Second Lien Credit Agreement and any
Lien arising by operation of law or granted
pursuant to court order.
"PLEDGED OR CONTROLLED COLLATERAL" shall have the meaning assigned
to
such term in Article V.
"POST-PETITION INTEREST" shall mean any interest, reasonable
fees,
costs or charges that accrue or would have
accrued after the commencement of any
Insolvency or Liquidation Proceeding,
whether or not allowable in any such
Insolvency or Liquidation Proceeding.
<PAGE>
7
"PURCHASE DATE" shall have the meaning assigned to such term in
Section 7.05(b).
"PURCHASE NOTICE" shall have the meaning assigned to such term
in
Section 7.05(a).
"PURCHASE PERIOD" shall have the meaning assigned to such term
in
Section 7.05(a).
"PURCHASING PARTIES" shall have the meaning assigned to such term
in
Section 7.05(b).
"PURCHASE RIGHT" shall have the meaning assigned to such term
in
Section 7.05(a).
"RECEIVABLES FACILITY" shall mean one or more non-recourse
receivables
facilities for the sale, encumbrance or
other disposition, at any time or from
time to time of all or a portion of the
accounts receivable of the Company or
any of its Subsidiaries.
"REFINANCE" shall mean, in respect of any indebtedness, to
refinance,
extend, renew, restructure or replace or to
incur other indebtedness in exchange
or replacement for, such Obligations, in
whole. "REFINANCED" and "REFINANCING"
shall have correlative meanings.
"REFINANCING NOTICE" shall have the meaning assigned to such term
in
Section 7.02.
"REVOLVING CREDIT COMMITMENTS" shall mean the commitments to
make
revolving loans under the First Lien Credit
Agreement.
"REVOLVING CREDIT LOANS" shall mean revolving loans under the
First
Lien Credit Agreement.
"SECOND LIEN ADMINISTRATIVE AGENT" shall have the meaning assigned
to
such term in the preamble to this
Agreement.
"SECOND LIEN ARRANGERS" shall mean, collectively, Credit Suisse
First
Boston, acting through its Cayman Islands
branch, and Morgan Stanley Senior
Funding, Inc., in their capacities as joint
lead arrangers in connection with
the Second Lien Credit Agreement.
"SECOND LIEN COLLATERAL" shall mean all "Collateral", as defined
in
the Second Lien Collateral Agreement, and
any other assets of the Company, the
Parent or any Subsidiary now or at any time
hereafter subject to Liens securing
any Second Lien Obligations.
"SECOND LIEN COLLATERAL AGREEMENT" shall have the meaning assigned
to
such term in the preliminary statement of
this Agreement.
"SECOND LIEN CREDIT AGREEMENT" shall have the meaning assigned to
such
term in the preliminary statement of this
Agreement.
"SECOND LIEN CREDIT DOCUMENTS" shall mean the "Credit Documents",
as
defined in the Second Lien Credit Agreement
and each of the other agreements,
documents and
<PAGE>
8
instruments providing for or evidencing any
other Second Lien Obligation, and
any other document or instrument executed
or delivered at any time in connection
with any Second Lien Obligations, including
any Second Lien Security Documents
and intercreditor or joinder agreement
among holders of Second Lien Obligations.
"SECOND LIEN LENDERS" shall have the meaning assigned to such term
in
the preliminary statement of this
Agreement.
"SECOND LIEN MORTGAGES" shall mean, collectively, each mortgage,
deed
of trust, leasehold mortgage, assignment of
leases and rents, modifications and
any other agreement, document or instrument
pursuant to which any Lien on real
property is granted to secure any Second
Lien Obligations or under which rights
or remedies with respect to any such Lien
are governed.
"SECOND LIEN OBLIGATIONS" shall mean all Obligations outstanding
under
the Second Lien Credit Agreement and the
other Second Lien Credit Documents.
"Second Lien Obligations" shall include all
interest accrued or accruing (or
which would, absent commencement of an
Insolvency or Liquidation Proceeding,
accrue) after commencement of an Insolvency
or Liquidation Proceeding in
accordance with the rate specified in the
relevant Second Lien Credit Document
whether or not the claim for such interest
is allowed as a claim in such
Insolvency or Liquidation Proceeding.
"SECOND LIEN PERMITTED ACTIONS" shall have the meaning assigned
to
such term in Section 3.01(a).
"SECOND LIEN SECURED PARTIES" shall mean, at any time, (a) the
Second
Lien Lenders, (b) the Second Lien
Administrative Agent, (c) each other Person to
whom any of the Second Lien Obligations
(including indemnification obligations)
is owed and (d) the successors,
replacements and assigns of each of the
foregoing.
"SECOND LIEN SECURITY DOCUMENTS" shall mean the "Security
Documents",
as defined in the Second Lien Credit
Agreement, and any other agreement,
document or instrument pursuant to which a
Lien is granted to secure any Second
Lien Obligations or under which rights or
remedies with respect to any such Lien
are governed.
"SECOND LIEN TERM LOANS" shall mean the term loans outstanding
under
the Second Lien Credit Agreement.
"SECOND PRIORITY LIENS" shall mean all Liens on the Second Lien
Collateral to secure the Second Lien
Obligations, whether created under the
Second Lien Security Documents or acquired
by possession, statute, operation of
law, subrogation or otherwise.
"SECURITY DOCUMENTS" shall mean the First Lien Security Documents
and
the Second Lien Security Documents.
"STANDSTILL NOTICE" shall have the meaning assigned to such term
in
Section 3.02(a).
"STANDSTILL PERIOD" shall have the meaning assigned to such term
in
Section 3.02(a).
<PAGE>
9
"SUBSIDIARY" shall mean, as to any Person, a corporation,
partnership,
limited liability company or other entity
of which shares of stock of each class
or other interests having ordinary voting
power (other than stock or other
interests having such power only by reason
of the happening of a contingency) to
elect a majority of the board of directors
or other managers of such
corporation, partnership or other entity
are at the time owned, or the
management of which is otherwise
controlled, by such Person or by one or more
Subsidiaries of such Person or by such
Person and one or more Subsidiaries of
such Person. A Subsidiary shall be deemed
wholly-owned by a Person who owns
directly or indirectly all of the voting
shares of stock or other interest of
such Subsidiary having voting power under
ordinary circumstances to vote for
directors or other managers of such
corporation, partnership or other entity,
except for (i) directors' qualifying
shares, (ii) shares owned by multiple
shareholders to comply with local laws and
(iii) shares owned by employees.
Unless otherwise qualified, all references
to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall
refer to a Subsidiary or Subsidiaries of
the Company.
"SURVIVING INDEMNITIES" shall have the meaning assigned to such
term
in Section 7.05(b).
"TRIGGERING EVENT" shall have the meaning assigned to such term
in
Section 7.05(a).
"UNIFORM COMMERCIAL CODE" or "UCC" shall mean the Uniform
Commercial
Code (or any similar or equivalent
legislation) as in effect from time to time
in any applicable jurisdiction.
SECTION 1.03. TERMS GENERALLY. The definitions of terms herein
shall
apply equally to the singular and plural
forms of the terms defined. Whenever
the context may require, any pronoun shall
include the corresponding masculine,
feminine and neuter forms. The words
"include", "includes" and "including" shall
be deemed to be followed by the phrase
"without limitation." The word "will"
shall be construed to have the same meaning
and effect as the word "shall".
Unless the context requires otherwise (a)
any definition of or reference to any
agreement, instrument or other document
herein shall be construed as referring
to such agreement, instrument or other
document as from time to time amended,
restated, amended and restated,
supplemented or otherwise modified in accordance
with the terms of this Agreement, (b) any
reference herein (i) to any Person
shall be construed to include such Person's
successors and assigns and (ii) to
the Company or any other Grantor shall be
construed to include the Company or
such Grantor as debtor and
debtor-in-possession and any receiver or trustee for
the Company or any other Grantor, as the
case may be, in any Insolvency or
Liquidation Proceeding, (c) the words
"herein", "hereof" and "hereunder", and
words of similar import, shall be construed
to refer to this Agreement in its
entirety and not to any particular
provision hereof, (d) all references herein
to Articles or Sections shall be construed
to refer to Articles or Sections of
this Agreement and (e) the words "asset"
and "property" shall be construed to
have the same meaning and effect and to
refer to any and all tangible and
intangible assets and properties, including
cash, securities, accounts and
contract rights.
ARTICLE II
LIEN PRIORITIES
SECTION 2.01. RELATIVE PRIORITIES. Notwithstanding the date, manner
or
order of grant, attachment or perfection of
any Second Priority Lien or any
First Priority Lien, and notwithstanding
any provision of the UCC or any other
applicable law or the provisions of any
<PAGE>
10
Security Document or any other Loan
Document or any other circumstance
whatsoever, the Second Lien Administrative
Agent, for itself and on behalf of
the other Second Lien Secured Parties,
hereby agrees that (a) any First Priority
Lien now or hereafter held by or for the
benefit of any First Lien Secured Party
shall be senior in right, priority,
operation, effect and all other respects to
any and all Second Priority Liens and (b)
any Second Priority Lien now or
hereafter held by or for the benefit of any
Second Lien Secured Party shall be
junior and subordinate in right, priority,
operation, effect and all other
respects to any and all First Priority
Liens, in each case to the extent such
First Priority Liens are perfected and
regardless of whether or not any First
Priority Liens are subordinated in any
respect to any Permitted Lien that
secures any other obligation of the
Company, any other Grantor or any other
Person.
SECTION 2.02. PROHIBITION ON CONTESTING LIENS. Each of the First
Lien
Administrative Agent, for itself and on
behalf of the other First Lien Secured
Parties, and the Second Lien Administrative
Agent, for itself and on behalf of
the other Second Lien Secured Parties,
agrees that it will not, and hereby
waives any right to, contest or support any
other Person in contesting, in any
proceeding (including any Insolvency or
Liquidation Proceeding), the priority,
validity or enforceability of any Second
Priority Lien or any First Priority
Lien, as the case may be; provided that
nothing in this Agreement shall be
construed to prevent or impair the rights
of the First Lien Administrative Agent
or any other First Lien Secured Party or
the Second Lien Administrative Agent or
any other Second Lien Secured Party to
enforce this Agreement.
SECTION 2.03. NO NEW LIENS. The parties hereto agree that, so long
as
the Discharge of First Lien Obligations has
not occurred, none of the Grantors
shall, or shall permit any of its
Subsidiaries to, (a) grant or permit any
additional Liens on any asset to secure any
Second Lien Obligation unless it has
granted, or concurrently therewith grants,
a Lien on such asset to secure the
First Lien Obligations or (b) grant or
permit any additional Liens on any asset
to secure any First Lien Obligations unless
it has granted, or concurrently
therewith grants, a Lien on such asset to
secure the Second Lien Obligations, in
each case, with each such Lien to be
subject to the provisions of this
Agreement. To the extent that the
provisions of the immediately preceding
sentence are not complied with for any
reason, without limiting any other right
or remedy available to the First Lien
Administrative Agent or the other First
Lien Secured Parties, the Second Lien
Administrative Agent agrees, for itself
and on behalf of the other Second Lien
Secured Parties, that any amounts
received by or distributed to any Second
Lien Secured Party pursuant to or as a
result of any Lien granted in contravention
of this Section shall be subject to
Section 4.02.
SECTION 2.04. SIMILAR LIENS AND AGREEMENTS. The parties hereto
acknowledge and agree that it is their
intention that the First Lien Collateral
and the Second Lien Collateral be identical
and that (except as contemplated by
Article V) the steps taken to perfect the
First Priority Liens and the Second
Priority Liens be identical in all material
respects. In furtherance of the
foregoing, the parties hereto agree:
(a) to cooperate in good faith in order to determine, upon any
request
by the First Lien Administrative Agent or
the Second Lien Administrative Agent,
the specific assets included in the First
Lien Collateral and the Second Lien
Collateral, the steps taken to perfect the
First Priority Liens and the Second
Priority Liens thereon and the identity of
the respective parties obligated
under the First Lien Credit Documents and
the Second Lien Credit Documents; and
(b) that the documents, agreements and instruments creating or
evidencing the Second Lien Collateral and
the Second Priority Liens shall be in
all material respects in the same form as
the documents, agreements and
instruments creating or evidencing the
First Lien
<PAGE>
11
Collateral and the First Priority Liens,
other than with respect to the first
priority and second priority nature of the
Liens created or evidenced
thereunder.
ARTICLE III
ENFORCEMENT OF RIGHTS; MATTERS RELATING TO COLLATERAL
SECTION 3.01. EXERCISE OF RIGHTS AND REMEDIES. (a) So long as
the
Discharge of First Lien Obligations has not
occurred, whether or not any
Insolvency or Liquidation Proceeding has
been commenced by or against any
Grantor, the First Lien Administrative
Agent and the other First Lien Secured
Parties shall have the exclusive right to
enforce rights and exercise remedies
(including any right of setoff) with
respect to any of the Collateral (including
any foreclosure action or proceeding), in
each case, with notice to the Second
Lien Administrative Agent as set forth in
clause (b) below but without any
consultation with or the consent of the
Second Lien Administrative Agent or any
other Second Lien Secured Party; provided
that, notwithstanding the foregoing,
(i) in any Insolvency or Liquidation
Proceeding, the Second Lien Administrative
Agent may file a proof of claim or
statement of interest with respect to the
Second Lien Obligations; (ii) the Second
Lien Administrative Agent may take any
action not otherwise in conflict with this
Agreement to preserve or protect the
validity and enforceability of the Second
Priority Liens; (iii) the Second Lien
Secured Parties may file any necessary
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 Second Lien Secured Parties, including
any claims secured by the Collateral,
or otherwise make any agreements or file
any motions pertaining to the Second
Lien Obligations, in each case, to the
extent not inconsistent with the terms of
this Agreement; (iv) the Second Lien
Secured Parties may exercise rights and
remedies that may be exercised by unsecured
creditors except to the extent in
conflict with Article VI; (v) the Lien
securing the Second Lien Obligations
shall remain on and attach to any proceeds
of Collateral released or disposed of
in accordance with this Agreement subject
to the relative priorities described
in Article II; and (vi) subject to Section
3.02, the Second Lien Administrative
Agent and the other Second Lien Secured
Parties may enforce any of their rights
and exercise any of their remedies with
respect to the Collateral after the
termination of the Standstill Period (the
actions described in this proviso
being referred to herein as the "SECOND
LIEN PERMITTED ACTIONS"). Except for the
Second Lien Permitted Actions, unless and
until the Discharge of First Lien
Obligations has occurred, the sole right of
the Second Lien Administrative Agent
and the other Second Lien Secured Parties
with respect to the Collateral shall
be to receive a share of the proceeds of
the Collateral, if any, in accordance
with the Second Lien Credit Documents and
applicable law, after the Discharge of
First Lien Obligations has occurred.
(b) In exercising rights and remedies with respect to any of
the
Collateral, the First Lien Administrative
Agent and the other First Lien Secured
Parties may enforce the provisions of the
First Lien Credit Documents and
exercise remedies thereunder, all in such
order and in such manner as they may
determine in their sole discretion. Such
exercise and enforcement shall include
the rights of an agent appointed by them to
Dispose of Collateral upon
foreclosure, to incur reasonable expenses
in connection with any such
Disposition and to exercise all the rights
and remedies of a secured creditor
under the Uniform Commercial Code, the
Bankruptcy Code or any other Bankruptcy
Law or any other applicable law. Unless an
Insolvency and Liquidation Proceeding
has commenced and is continuing, the First
Lien Administrative Agent agrees to
provide at least ten days' prior written
notice to the Second Lien
Administrative Agent of its intention to
enforce its rights or exercise remedies
(including any right of setoff) with
respect to the Collateral, prior to any
such enforcement or exercise. In the
<PAGE>
12
event that during such ten day period, the
Second Lien Administrative Agent
shall send to the First Lien Secured
Parties the irrevocable notice of the
Purchasing Parties' intention to exercise
their purchase option pursuant to
Section 7.05(a), the First Lien
Administrative Agent shall not commence any
foreclosure or other action to sell or
otherwise realize upon the Collateral;
provided that the purchase and sale with
respect to the First Lien Obligations
provided for in Section 7.05 shall have
closed within ten Business Days
thereafter and the First Lien
Administrative Agent shall have received payment
in full of the purchase price and any cash
collateral as provided for herein
within such ten Business Day period.
(c) The Second Lien Administrative Agent, for itself and on behalf
of
the other Second Lien Secured Parties,
hereby acknowledges and agrees that no
covenant, agreement or restriction
contained in any Second Lien Security
Document or any other Second Lien Credit
Document (other than this Agreement)
shall be deemed to restrict in any way the
rights and remedies of the First Lien
Administrative Agent or the other First
Lien Secured Parties with respect to the
Collateral as set forth in this Agreement
and the First Lien Credit Documents.
SECTION 3.02. NO INTERFERENCE. The Second Lien Administrative
Agent,
for itself and on behalf of the other
Second Lien Secured Parties, agrees that,
whether or not any Insolvency or
Liquidation Proceeding has been commenced, the
Second Lien Secured Parties:
(a) will not, so long as the Discharge of First Lien Obligations
has
not occurred, until the expiration of the
Standstill Period, enforce or
exercise, or seek to enforce or exercise,
any rights or remedies (including any
right of setoff) with respect to any
Collateral (including the enforcement of
any right under any lockbox Agreement,
account control agreement, landlord
waiver or bailee's letter or any similar
agreement or arrangement to which the
Second Lien Administrative Agent or any
other Second Lien Secured Party is a
party); provided that the Second Lien
Administrative Agent may enforce or
exercise any or all such rights and
remedies after a period of 120 days has
elapsed since the date on which the Second
Lien Administrative Agent has
delivered to the First Lien Administrative
Agent written notice (the "STANDSTILL
NOTICE") of the acceleration of the
indebtedness then outstanding under the
Second Lien Credit Agreement (the
"STANDSTILL PERIOD"); provided, further, that
(A) notwithstanding the expiration of the
Standstill Period or anything herein
to the contrary, in no event shall the
Second Lien Administrative Agent or any
other Second Lien Secured Party enforce or
exercise any rights or remedies with
respect to any Collateral, if the First
Lien Administrative Agent or any other
First Lien Secured Party is actively
pursuing in good faith the enforcement or
exercise of their rights or remedies with
respect to a material portion of the
Collateral (it being expressly understood
that the running of the Standstill
Period shall be independent of any
enforcement or exercise, or cessation of the
enforcement or exercise, of rights or
remedies by the First Lien Administrative
Agent or any other First Lien Secured Party
and that the Standstill Period shall
not cease to run as a result of any such
enforcement or exercise or cessation)
and (B) if the Second Lien Secured Parties
(or the Second Lien Administrative
Agent on behalf of the Second Lien Secured
Parties) have, upon not less than ten
days' prior written notice to the First
Lien Administrative Agent (which notice
may not be given prior to the 110th day
following delivery of the Standstill
Notice), commenced
