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EXHIBIT 10.39
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AMENDED AND RESTATED INTERCREDITOR AND LIEN SUBORDINATION
AGREEMENT
among
WELLS FARGO FOOTHILL, INC.,
as TB Wood's Agent,
WELLS FARGO FOOTHILL, INC.,
as Senior Agent,
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
as Trustee and Collateral Agent,
ALTRA INDUSTRIAL MOTION, INC.,
and certain of its SUBSIDIARIES,
as Borrowers and Guarantors
TB WOOD'S CORPORATION,
and certain of its SUBSIDIARIES,
as TB Wood's Credit Parties
Dated as of November 30, 2004
Amended and Restated as of April 5, 2007
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AMENDED AND RESTATED INTERCREDITOR AND LIEN SUBORDINATION
AGREEMENT
THIS
AMENDED AND RESTATED INTERCREDITOR AND LIEN SUBORDINATION
AGREEMENT
dated as of April 5, 2007 (this "Agreement") is made by and among
WELLS FARGO
FOOTHILL, INC., as agent (the "Original TB Wood's Agent") under and
pursuant to
the TB Wood's Credit Agreement (as hereinafter defined), WELLS
FARGO FOOTHILL,
INC., as senior agent (the "Original Senior Agent") under and
pursuant to the
Credit Agreement (as hereinafter defined), THE BANK OF NEW YORK
TRUST COMPANY,
N.A. ("BNY"), in its capacity as collateral agent under the
Indenture Loan
Documents (as hereinafter defined) (in such capacity, the
"Collateral Agent"),
BNY as Trustee under the Indenture Loan Documents (in such
capacity, the
"Trustee"), Altra Industrial Motion, Inc., a Delaware corporation
("Parent" ),
those certain subsidiaries of Parent identified as Borrowers on the
signature
pages hereto (collectively with Parent, the "Borrowers") those
certain
subsidiaries of Parent identified as Guarantors on the signature
pages hereto
(collectively with Parent, the "Guarantors"), and the TB Wood's
Credit Parties
(as defined below) (this Agreement amends and restates the
Intercreditor and
Lien Subordination Agreement dated as of November 30, 2004 (the
"Original
Intercreditor Agreement"), among the Original Senior Agent, the
Collateral Agent
and the Borrowers and Guarantors).
RECITALS
A.
Borrowers, Guarantors, Collateral Agent, and Trustee have entered
into
an Indenture, dated as of November 30, 2004 (the "Indenture"),
pursuant to which
the Borrowers incurred indebtedness for certain notes (such notes,
together with
all other notes issued after November 30, 2004 and exchange notes
issued in
exchange therefore, the "Notes") in an aggregate principal amount
at maturity of
$165,000,000 under the Indenture which, together with the
Additional Notes (as
defined below), interest, premiums, fees, costs and expenses
(including, without
limitation, attorneys fees and disbursements and including interest
accrued
after the initiation of any Insolvency Proceeding, whether or not
allowed or
allowable in any Insolvency Proceeding) and the other Secured
Obligations (as
defined in the Indenture Security Agreement (defined below)) are
referred to
herein as the "Indenture Secured Obligations". The repayment of the
Indenture
Secured Obligations is secured by security interests in and liens
on the assets
and properties (the "Collateral"; it being understood and agreed by
the Parties
that "Collateral" for purposes of this Agreement includes, without
limitation,
the TB Wood's Collateral) described in the Security Agreement dated
as of
November 30, 2004 (the "Indenture Security Agreement") made by the
Borrowers and
the Guarantors in favor of the Collateral Agent for the benefit of
the
Collateral Agent, the Trustee, and the Noteholders, the Trademark
Security
Agreement, dated as of November 30, 2004, made by the Borrowers and
Guarantors
in favor of the Collateral Agent for the benefit of the Collateral
Agent, the
Trustee, and the Noteholders (the "Indenture Trademark Security
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Agreements"), the Copyright Security Agreement, entered into from
time to time,
made by the Borrowers and Guarantors in favor of the Collateral
Agent for the
benefit of the Collateral Agent, the Trustee, and the Noteholders
(the
"Indenture Copyright Security Agreements"), the Patent Security
Agreement, dated
as of November 30, 2004, made by the Borrowers and Guarantors in
favor of the
Collateral Agent for the benefit of the Collateral Agent, the
Trustee, and the
Noteholders (the "Indenture Patent Security Agreements"), and
certain real
property mortgages (made from time to time, in each case, by a
Borrower or a
Guarantor in favor of the Collateral Agent for the benefit of the
Collateral
Agent, the Trustee, and the Noteholders, each an "Indenture
Mortgage" and,
together with the Indenture, the Indenture Security Agreement, the
Indenture
Trademark Security Agreement, Indenture Copyright Security
Agreement, Indenture
Patent Security Agreement, and all Control Agreements (as defined
in the
Indenture Security Agreement), and the other Note Documents (as
defined in the
Indenture Security Agreement) executed and delivered in connection
therewith,
the "Indenture Agreements").
B.
Parent, the Borrowers, the Original Senior Agent and the lenders a
party
thereto have entered into a Credit Agreement dated as of November
30, 2004 (the
"Original Credit Agreement") and the Guarantors, the Senior Lenders
and the
Original Senior Agent have entered into those certain guarantees
(the
"Guarantees") pursuant to which the Senior Lenders agreed, upon the
terms and
conditions stated therein, to make loans and advances to and to
issue letters of
credit on account of the Borrowers up to the principal amount of
$30,000,000,
together with the fees, interest, expenses and other obligations
due under the
Original Credit Agreement. The repayment of the Obligations (as
that term is
defined in the Original Credit Agreement) is secured by first
priority security
interests in and liens on the Collateral described in the Security
Agreement
dated as of November 30, 2004 (the "Senior Security Agreement")
made by the
Borrowers and the Guarantors in favor of the Original Senior Agent
for the
benefit of the Original Senior Agent, the Senior Lenders and the
Bank Product
Providers (as defined in the Credit Agreement), the Trademark
Security
Agreement, dated as of November 30, 2004, made by the Borrowers and
the
Guarantors in favor of the Original Senior Agent for the benefit of
the Original
Senior Agent, the Senior Lenders and the Bank Product Providers
(the "Senior
Trademark Security Agreements"), the Copyright Security Agreement,
entered into
from time to time, made by the Borrowers and the Guarantors in
favor of the
Original Senior Agent for the benefit of the Original Senior Agent,
the Senior
Lenders and the Bank Product Providers (the "Senior Copyright
Security
Agreements"), the Patent Security Agreement, dated as of November
30, 2004, made
by the Borrowers and the Guarantors in favor of the Original Senior
Agent for
the benefit of the Original Senior Agent, the Senior Lenders and
the Bank
Product Providers (the "Senior Patent Security Agreements"), and
certain real
property mortgages (made from time to time, in each case, by a
Borrower or a
Guarantor in favor of the Original Senior Agent for the benefit of
the Original
Senior Agent, the Senior Lenders and the Bank Product Providers,
each a "Senior
Mortgage" and, together with the Credit Agreement, the Guarantees,
the Senior
Security Agreement, the Senior Trademark Security Agreement, Senior
Copyright
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Security Agreement, Senior Patent Security Agreement, and all
Control Agreements
(as defined in the Credit Agreement) and the other Loan Documents
(as defined in
the Credit Agreement) executed and delivered in connection
therewith, the
"Senior Agreements").
C.
TB Wood's Corporation ("TB Wood's"), the subsidiaries of TB Wood's
party
thereto (collectively with TB Wood's, the "TB Wood's Credit
Parties"), the
Original TB Wood's Agent and the lenders a party thereto have
entered into a
Credit Agreement dated as of the date hereof (the "Original TB
Wood's Credit
Agreement") pursuant to which the TB Wood's Lenders agreed, upon
the terms and
conditions stated therein, to make loans and advances to and to
issue letters of
credit on account of the TB Wood's Credit Parties up to the
principal amount of
$19,557,916.32, together with the fees, interest, expenses and
other obligations
due under the Original TB Wood's Credit Agreement. The repayment of
the
Obligations (as that term is defined in the Original TB Wood's
Credit Agreement)
is secured by first priority security interests in and liens on the
collateral
(the "TB Wood's Collateral") described in the Security Agreement
dated as of the
date hereof (the "TB Wood's Security Agreement") made by the TB
Wood's Credit
Parties in favor of the Original TB Wood's Agent for the benefit of
the Original
TB Wood's Agent and the TB Wood's Lenders, the Trademark Security
Agreement,
dated as of the date hereof, made by the TB Wood's Credit Parties
in favor of
the Original TB Wood's Agent for the benefit of the Original TB
Wood's Agent and
the TB Wood's Lenders (the "TB Wood's Trademark Security
Agreements"), the
Copyright Security Agreement, entered into from time to time, made
by the TB
Wood's Credit Parties in favor of the Original TB Wood's Agent for
the benefit
of the Original TB Wood's Agent and the Senior Lenders (the "TB
Wood's Copyright
Security Agreements"), the Patent Security Agreement, dated as of
the date
hereof, made by the TB Wood's Credit Parties in favor of the
Original TB Wood's
Agent for the benefit of the Original TB Wood's Agent and the TB
Wood's Lenders
(the "TB Wood's Patent Security Agreements"), and certain real
property
mortgages (made from time to time, in each case, by a TB Wood's
Credit Party in
favor of the Original TB Wood's Agent for the benefit of the
Original TB Wood's
Agent and the TB Wood's Lenders, each a "TB Wood's Mortgage" and,
together with
the TB Wood's Credit Agreement, the TB Wood's Security Agreement,
the TB Wood's
Trademark Security Agreement, the TB Wood's Copyright Security
Agreement, the TB
Wood's Patent Security Agreement, and all Control Agreements (as
defined in the
TB Wood's Credit Agreement) and the other Loan Documents (as
defined in the TB
Wood's Credit Agreement) executed and delivered in connection
therewith, the "TB
Wood's Agreements").
D.
In connection with the acquisition by Parent of the shares of stock
of
TB Wood's, Parent intends to issue additional Notes (the
"Additional Notes") in
an aggregate principal amount at maturity of $105,000,000 under the
Indenture.
E.
One of the conditions of the Original Credit Agreement was that
the
priority of the security interests in and liens on the Collateral
to secure the
Credit Agreement Secured Obligations (as hereinafter defined) be
senior to the
security interests
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in and liens on the Collateral to secure the Indenture Secured
Obligations, in
the manner and to the extent provided in this Agreement. One of the
conditions
of the Original TB Wood's Credit Agreement is that the priority of
the security
interests in and liens on the TB Wood's Collateral to secure the TB
Wood's
Credit Agreement Secured Obligations (as hereinafter defined) be
senior to the
security interests in and liens on the TB Wood's Collateral to
secure the Credit
Agreement Secured Obligations and the Indenture Secured
Obligations, in the
manner and to the extent provided in this Agreement.
F.
The Senior Agent and the Collateral Agent entered into the
Original
Intercreditor Agreement concerning the respective rights of the
Senior Agent and
the Collateral Agent with respect to the priority of their
respective security
interests in and liens on the Collateral. The TB Wood's Agent,
Senior Agent and
the Collateral Agent (at the request of the TB Wood's Agent and the
Senior
Agent) desire to amend and restate the Original Intercreditor
Agreement solely
to clarify the respective rights of the TB Wood's Agent, Senior
Agent and the
Collateral Agent with respect to the priority of their respective
security
interests in and liens on the TB Wood's Collateral (this Agreement
is not
intended to alter in any manner the respective rights of the Senior
Agent and
the Collateral Agent with respect to the priority of their
respective rights and
interests in the Collateral (including the TB Wood's Collateral) as
set forth in
the Original Intercreditor Agreement.
G.
The terms of the Indenture permitted the Borrowers and the
Guarantors to
enter into the Original Credit Agreement, subject to compliance
with certain
conditions, and in connection therewith authorized and directed the
Collateral
Agent to enter into the Original Intercreditor Agreement. The terms
of the
Credit Agreement and the Indenture permit the Borrowers and the
Guarantors to
enter into the TB Wood's Credit Agreement, subject to compliance
with certain
conditions, and in connection therewith authorize and/or direct the
Senior Agent
and Collateral Agent to enter into this Agreement.
H.
In order to induce the TB Wood's Agent to extend credit to the TB
Wood's
Credit Parties and for purposes of certain conditions precedent and
covenants of
the Original TB Wood's Credit Agreement, the TB Wood's Agent, the
Senior Agent
and the Collateral Agent hereby agree to amend and restate the
Original
Intercreditor Agreement as follows:
ARTICLE I.
DEFINITIONS
Section 1.01 Terms Defined Above and in the Recitals. As used in
this
Agreement, the following terms shall have the respective meanings
indicated in
the opening paragraph hereof and in the above Recitals:
"Additional Notes"
"Agreement"
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"BNY"
"Borrower"
"Collateral"
"Collateral Agent"
"Guarantees"
"Guarantors"
"Indenture"
"Indenture Agreements"
"Indenture Copyright Security Agreement"
"Indenture Patent Security Agreement"
"Indenture Secured Obligations"
"Indenture Security Agreement"
"Indenture Trademark Security Agreement"
"Original Credit Agreement"
"Original Intercreditor Agreement"
"Original Senior Agent"
"Original TB Wood's Agent"
"Original TB Wood's Credit Agreement"
"Parent"
"Senior Agreements"
"Senior Copyright Security Agreement"
"Senior Patent Security Agreement"
"Senior Security Agreement"
"Senior Trademark Security Agreement"
"TB Wood's"
"TB Wood's Agreements"
"TB Wood's Collateral"
"TB Wood's Copyright Security Agreement"
"TB Wood's Credit Parties"
"TB Wood's Mortgages"
"TB Wood's Patent Security Agreements"
"TB Wood's Security Agreements"
"TB Wood's Trademark Security Agreements"
"Trustee"
Section 1.02 Credit Agreement Definitions. All capitalized terms
which are
used but not defined herein shall have the same meaning as in the
Original
Credit Agreement, as in effect on the date hereof.
Section 1.03 Other Definitions. As used in this Agreement, the
following
terms shall have the meanings set forth below:
"Capital Stock" means (a) in the case of a corporation,
corporate
stock, (b) in the case of an association or business entity, any
and all shares,
interests,
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participations, rights or other equivalents (however designated) of
corporate
stock, (c) in the case of a partnership or limited liability
company,
partnership or membership interests (whether general or limited)
and (d) any
other interest or participation that confers on a Person the right
to receive a
share of the profits and losses of, or distributions of property
of, the issuing
Person.
"Cash Collateral" means any Collateral consisting of cash or
cash
equivalents, any security entitlement (as defined in the UCC) and
any financial
assets (as defined in the UCC).
"Control Collateral" means any Collateral consisting of a
certificated
security (as defined in the UCC), investment property (as defined
in the UCC), a
deposit account (as defined in the UCC and any other Collateral as
to which a
Lien may be perfected through possession or control by the secured
party, or any
agent therefor.
"Credit Agreement" means any Credit Agreement (as defined in
the
Indenture), including one or more credit facilities (including the
Original
Credit Agreement), in each case, as amended, restated, modified,
renewed,
refunded, replaced, or refinanced in whole or in part from time to
time,
including (a) any agreement extending the maturity of,
consolidating, otherwise
restructuring (including adding Subsidiaries or affiliates of the
Borrowers or
any other Persons as parties thereto) or refinancing all or any
portion of the
Obligations or Commitments as those terms are defined in the
Original Credit
Agreement, (b) any New Credit Facility and (c) any other agreement
that itself
is a Credit Agreement hereunder) and whether by the same or any
other agent,
lender, group of lenders or institutional investors and whether or
not
increasing the amount of indebtedness that may be incurred
thereunder.
"Credit Agreement Secured Obligations" means all Obligations and
all
other amounts owing or due under the terms of any Credit Agreement
and the other
Senior Loan Documents, including any and all amounts payable under
or in respect
of the Senior Loan Documents, as amended, restated, modified,
renewed, refunded,
replaced, or refinanced in whole or in part from time to time,
including
principal, premium, interest, fees, attorneys' fees, costs,
charges, expenses,
reimbursement obligations, any obligation to post cash collateral
in respect of
letters of credit or indemnities in respect thereof, indemnities,
guarantees,
and all other amounts payable thereunder or in respect thereof
(including, in
each case, all amounts accruing on or after the commencement of any
Insolvency
Proceeding relating to any Borrower, any Guarantor or any other
Person
irrespective of whether a claim for all or any portion of such
amounts is
allowable or allowed in any Insolvency Proceeding).
"Discharge of Credit Agreement Secured Obligations" means payment
in
full in cash (or in the case of Letters of Credit and Bank Product
Obligations,
the cash collateralization as required by the Senior Loan
Documents) of the
Credit Agreement Secured Obligations (other than Credit Agreement
Secured
Obligations consisting solely of contingent indemnification
obligations under
the Senior Loan Documents) after or
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concurrently with termination of all commitments to extend credit
under any
Credit Agreement.
"Discharge of TB Wood's Credit Agreement Secured Obligations"
means
payment in full in cash (or in the case of Letters of Credit, the
cash
collateralization as required by the TB Wood's Loan Documents) of
the TB Wood's
Credit Agreement Secured Obligations (other than TB Wood's Credit
Agreement
Secured Obligations consisting solely of contingent indemnification
obligations
under the TB Wood's Loan Documents) after or concurrently with
termination of
all commitments to extend credit under the TB Wood's Credit
Agreement.
"Equity Interests" means Capital Stock and all warrants, options
or
other rights to acquire Capital Stock (but excluding any debt
security that is
convertible into, or exchangeable for, Capital Stock).
"Exercise Any Secured Creditor Remedies" or "Exercise of
Secured
Creditor Remedies" means (a) the taking of any action to enforce or
realize upon
any Lien, including the institution of any foreclosure proceedings
or the
noticing of any public or private sale or other disposition
pursuant to Article
9 of the applicable Uniform Commercial Code, (b) the exercise of
any right or
remedy provided to a secured creditor or otherwise on account of a
Lien under
the Senior Loan Documents, the Indenture Loan Documents, applicable
law, in an
Insolvency Proceeding or otherwise, including the election to
retain Collateral
in satisfaction of a Lien, (c) the taking of any action or the
exercise of any
right or remedy in respect of the collection on, set off against,
marshaling of,
or foreclosure on the Collateral or the Proceeds of Collateral, (d)
the sale,
lease, license, or other disposition of all or any portion of the
Collateral, by
private or public sale, other disposition or any other means
permissible under
applicable law, (e) the solicitation of bids from third parties to
conduct the
liquidation of all or a material portion of Collateral to the
extent undertaken
and being diligently pursued in good faith to consummate the sale
of such
Collateral within a commercially reasonable time, (f) the
engagement or
retention of sales brokers, marketing agents, investment bankers,
accountants,
appraisers, auctioneers or other third parties for the purposes of
valuing,
marketing, promoting and selling the Collateral to the extent
undertaken and
being diligently pursued in good faith to consummate the sale of
such Collateral
within a commercially reasonable time, and (g) the exercise of any
other
enforcement right relating to the Collateral (including the
exercise of any
voting rights relating to any Capital Stock and including any right
of
recoupment or set-off) whether under the Senior Loan Documents, the
Indenture
Loan Documents, applicable law, in an Insolvency Proceeding or
otherwise.
"Indenture Loan Documents" shall mean the Indenture, the Notes,
the
Indenture Agreements, and such other agreements, instruments and
certificates as
defined or referred to in the Indenture.
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"Insolvency Proceeding" means any proceeding commenced by or
against
any Person under any provision of the Bankruptcy Code or under any
other state
or federal bankruptcy or insolvency law, assignments for the
benefit of
creditors, formal or informal moratoria, compositions, extensions
generally with
creditors, or proceedings seeking reorganization, arrangement, or
other similar
relief.
"Lien" means any interest in an asset securing an obligation owed
to,
or a claim by, any Person other than the owner of the asset,
irrespective of
whether (a) such interest is based on the common law, statute, or
contract, (b)
such interest is recorded or perfected, and (c) such interest is
contingent upon
the occurrence of some future event or events or the existence of
some future
circumstance or circumstances. Without limiting the generality of
the foregoing,
the term "Lien" includes the lien or security interest arising from
a mortgage,
deed of trust, encumbrance, pledge, hypothecation, assignment,
deposit
arrangement, security agreement, conditional sale or trust receipt,
or from a
lease, consignment, or bailment for security purposes and also
includes
reservations, exceptions, encroachments, easements, rights-of-way,
covenants,
conditions, restrictions, leases, and other title exceptions and
encumbrances
affecting Real Property.
"Lien Priority" means with respect to any Lien of the TB Wood's
Agent,
the Senior Agent or the Collateral Agent in the Collateral, the
order of
priority of such Lien as specified in Section 2.01.
"Loan Documents" means the TB Wood's Loan Documents, the Senior
Loan
Documents and the Indenture Loan Documents, as applicable.
"Maximum Priority Debt Amount" means, as of any date of
determination,
the principal amount (including the undrawn amount of all letters
of credit) of
Credit Agreement Secured Obligations as of such date up to, but not
in excess
of, $30,000,000, (a) minus the amount of all permanent commitment
reductions
made from and after the date hereof under the effective Credit
Agreement, but to
be reinstated at the time of entering into any New Credit Facility,
and (b) plus
any interest, fees, Lender Group Expenses and indemnities payable
under the
Senior Loan Documents or in respect thereof (including, in each
case, all
amounts accruing on or after the commencement of any Insolvency
Proceeding
relating to any Borrower, any Guarantor or any other Person
irrespective of
whether a claim for all or any portion of such amounts is allowable
or allowed
in any such Insolvency Proceeding).
"Maximum Priority TB Wood's Debt Amount" means, as of any date
of
determination, the principal amount (including the undrawn amount
of all letters
of credit) of TB Wood's Credit Agreement Secured Obligations as of
such date up
to, but not in excess of, $19,557,916.32, (a) minus the amount of
all permanent
commitment reductions made from and after the date hereof under the
effective TB
Wood's Credit Agreement, and (b) plus any interest, fees, Lender
Group Expenses
and indemnities payable under the TB Wood's Loan Documents or in
respect thereof
(including, in each case, all amounts accruing on or after the
commencement of
any Insolvency Proceeding
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relating to any TB Wood's Credit Party or any other Person
irrespective of
whether a claim for all or any portion of such amounts is allowable
or allowed
in any such Insolvency Proceeding).
"New Credit Facility" means one or more debt facilities entered
into
by any Borrower or any of its Subsidiaries following a Discharge of
Credit
Agreement Secured Obligations under the then effective Credit
Agreement,
providing for revolving credit loans or letters of credit, in each
case, as
amended, restated, modified, renewed, refunded, replaced, or
refinanced in whole
or in part from time to time; provided that such debt facility
qualifies as a
Credit Agreement (as defined in the Indenture).
"Noteholders" means each of the holders of the Notes.
"Party" means TB Wood's Agent, Senior Agent and Collateral
Agent.
"Payment Collateral" means all accounts, instruments, chattel
paper,
letters of credit, deposit accounts, securities accounts, and
payment
intangibles, together with all supporting obligations (as those
terms are
defined in the UCC), in each case composing a portion of the
Collateral.
"Person" means any natural person, corporation, limited
liability
company, limited partnership, general partnership, limited
liability
partnership, joint venture, trust, land trust, business trust, or
other
organization, irrespective of whether such organization is a legal
entity, and
shall include a government and any agency or political subdivision
thereof.
"Proceeds" means (i) all "proceeds" as defined in Article 9 of the
UCC
with respect to the Collateral, and (ii) whatever is recoverable or
recovered
when Collateral is sold, exchanged, collected, or disposed of,
whether
voluntarily or involuntarily.
"Recovery" has the meaning set forth in Section 5.03.
"Senior Agent" means the Original Senior Agent, together with
all
successors, assigns, transferees, participants, replacement or
refinancing
lenders, of the Original Senior Agent, including any Person
designated as an
Agent under any Credit Agreement; provided, that for purposes of
this Agreement,
the Collateral Agent and the TB Wood's Agent, prior to the
termination of the
Original Credit Agreement and the TB Wood's Credit Agreement,
respectively,
shall be entitled to deal only with the Original Senior Agent until
such time as
the Original Senior Agent shall have assigned or otherwise transfer
to another
Agent thereof all of its rights and obligations hereunder to such
other Agent
pursuant to a written document which has been provided by the
Original Senior
Agent or a designee to the Collateral Agent and the TB Wood's Agent
and until
receipt thereof, Collateral Agent and the TB Wood's Agent shall not
be liable
for any such dealings (including the turning over of any Collateral
or proceeds
thereof to
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the Original Senior Agent at a time when any other Agent and not
the Original
Senior Agent was entitled thereto).
"Senior Lenders" means the lenders from time to time party to a
Credit
Agreement.
"Senior Loan Documents" means any Credit Agreement and the other
Loan
Documents (as such term is defined in the Original Credit
Agreement), or any
other security, collateral, ancillary or other document entered
into in
connection with or related to any agreement that is a Credit
Agreement, as such
documents may be amended, restated, modified, renewed, refunded,
replaced, or
refinanced in whole or in part from time to time, in accordance
with this
Agreement.
"Standstill Notice" means a written notice from or on behalf of
Senior
Agent to the Collateral Agent stating that an Event of Default has
occurred and
stating that such written notice is a "Standstill Notice".
"Standstill Period" has the meaning set forth in Section 2.03.
"TB Wood's Agent" means the Original TB Wood's Agent, together
with
all successors, assigns, transferees, participants, replacement or
refinancing
lenders, of the Original TB Wood's Agent, including any Person
designated as an
Agent under the TB Wood's Credit Agreement; provided, that for
purposes of this
Agreement, the Senior Agent and the Collateral Agent, prior to the
termination
of the Original TB Wood's Credit Agreement, shall be entitled to
deal only with
the Original TB Wood's Agent until such time as the Original TB
Wood's Agent
shall have assigned or otherwise transfer to another Agent thereof
all of its
rights and obligations hereunder to such other Agent pursuant to a
written
document which has been provided by the Original TB Wood's Agent or
a designee
to the Senior Agent and the Collateral Agent and until receipt
thereof, Senior
Agent and Collateral Agent shall not be liable for any such
dealings (including
the turning over of any Collateral or proceeds thereof to the
Original TB Wood's
Agent at a time when any other Agent and not the Original TB Wood's
Agent was
entitled thereto).
"TB Wood's Credit Agreement" means the TB Wood's Credit Agreement,
as
amended, restated, modified, renewed, refunded, replaced, or
refinanced in whole
or in part from time to time, including any agreement extending the
maturity of,
consolidating, otherwise restructuring (including adding
Subsidiaries or
affiliates of the TB Wood's Credit Parties or any other Persons as
parties
thereto) or refinancing all or any portion of the Obligations or
Commitments as
those terms are defined in the Original TB Wood's Credit Agreement,
whether by
the same or any other agent, lender, group of lenders or
institutional investors
and whether or not increasing the amount of indebtedness that may
be incurred
thereunder.
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"TB Wood's Credit Agreement Secured Obligations" means all
Obligations
and all other amounts owing or due under the terms of the TB Wood's
Credit
Agreement and the other TB Wood's Loan Documents, including any and
all amounts
payable under or in respect of the TB Wood's Loan Documents, as
amended,
restated, modified, renewed, refunded, replaced, or refinanced in
whole or in
part from time to time, including principal, premium, interest,
fees, attorneys'
fees, costs, charges, expenses, reimbursement obligations, any
obligation to
post cash collateral in respect of letters of credit or indemnities
in respect
thereof, indemnities, guarantees, and all other amounts payable
thereunder or in
respect thereof (including, in each case, all amounts accruing on
or after the
commencement of any Insolvency Proceeding relating to any TB Wood's
Credit Party
or any other Person irrespective of whether a claim for all or any
portion of
such amounts is allowable or allowed in any Insolvency
Proceeding).
"TB Wood's Lenders" means the lenders from time to time party to
the
TB Wood's Credit Agreement.
"TB Wood's Loan Documents" means the TB Wood's Credit Agreement
and
the other Loan Documents (as such term is defined in the Original
TB Wood's
Credit Agreement), or any other security, collateral, ancillary or
other
document entered into in connection with or related to the TB
Wood's Credit
Agreement, as such documents may be amended, restated, modified,
renewed,
refunded, replaced, or refinanced in whole or in part from time to
time, in
accordance with this Agreement.
"UCC" means the Uniform Commercial Code as from time to time in
effect
in the State of New York
Rules of Construction. Unless the context of this Agreement
clearly
requires otherwise, references to the plural include the singular,
references to
the singular include the plural, the term "including" is not
limiting, and the
term "or" has, except where otherwise indicated, the inclusive
meaning
represented by the phrase "and/or." The words "hereof," "herein,"
"hereby,"
"hereunder," and similar terms in this Agreement refer to this
Agreement as a
whole and not to any particular provision of this Agreement.
Article, section,
subsection, clause, schedule, and exhibit references herein are to
this
Agreement unless otherwise specified. Any reference in this
Agreement to any
agreement, instrument, or document shall include all alterations,
amendments,
changes, extensions, modifications, renewals, replacements,
substitutions,
joinders, and supplements thereto and thereof, as applicable
(subject to any
restrictions on such alterations, amendments, changes,
extensions,
modifications, renewals, replacements, substitutions, joinders, and
supplements
set forth herein). Any reference herein to any Person shall be
construed to
include such Person's successors and assigns.
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ARTICLE II.
LIEN PRIORITY
Section 2.01 Agreement to Subordinate. Notwithstanding the date,
time,
method, manner or order of grant, attachment, or perfection of any
Liens granted
to the Collateral Agent, the Trustee, or the Noteholders in respect
of all or
any portion of the Collateral, or of any Liens granted to the
Senior Agent or
any Senior Lender in respect of all or any portion of the
Collateral, or of any
Liens granted to the TB Wood's Agent or any TB Wood's Lender in
respect of all
or any portion of the TB Wood's Collateral, or the order or time of
filing or
recordation of any document or instrument for perfecting the Liens
in favor of
TB Wood's Agent (or any TB Wood's Lender), Senior Agent (or any
Senior Lender)
or the Collateral Agent (or the Trustee or any Noteholder) in any
Collateral or
any provision of the applicable Uniform Commercial Code, any other
applicable
law, the Indenture Loan Documents, the Senior Loan Documents, the
TB Wood's Loan
Documents or any other circumstance whatsoever, the Collateral
Agent, on behalf
of itself, the Trustee, and the Noteholders, the Senior Agent, on
behalf of
itself, the Senior Lenders and the Bank Product Providers, and the
TB Wood's
Agent, on behalf of itself and the TB Wood's Lenders, hereby agree
that:
(a) (i) any Lien in respect of all or any portion of the
Collateral
now or hereafter held by or on behalf of the Collateral Agent, the
Trustee, or
any Noteholder that secures all or any portion of the Indenture
Secured
Obligations, shall in all respects be junior and subordinate to all
Liens
granted to the Senior Agent and the Senior Lenders in the
Collateral to secure
all or any portion of the Credit Agreement Secured Obligations up
to (but not in
excess of) the Maximum Priority Debt Amount, and (ii) any Lien in
respect of all
or any portion of the Collateral now or hereafter held by or on
behalf of the
Senior Agent or any Senior Lender that secures all or any portion
of the Credit
Agreement Secured Obligations in excess of the Maximum Priority
Debt Amount,
shall in all respects be junior and subordinate to all Liens
granted to the
Collateral Agent, the Trustee or any Noteholder in the Collateral
to secure all
or any portion of the Indenture Secured Obligations, and
(b) (i) any Lien in respect of all or any portion of the
Collateral
now or hereafter held by or on behalf of the Senior Agent (or any
Senior Lender)
that secures all or any portion of the Credit Agreement Secured
Obligations up
to (but not in excess of) the Maximum Priority Debt Amount, shall
in all
respects be senior and prior to all Liens granted to the Collateral
Agent (or
the Trustee or any Noteholder) in the Collateral to secure all or
any portion of
the Indenture Secured Obligations, and (ii) any Lien in respect of
all or any
portion of the Collateral now or hereafter held by or on behalf of
the
Collateral Agent, the Trustee, or any Noteholder that secures all
or any portion
of the Indenture Secured Obligations, shall in all respects be
senior and prior
to all Liens granted to the Senior Agent and the Senior Lenders in
the
Collateral to secure all or any
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portion of the Credit Agreement Secured Obligations in excess of
the Maximum
Priority Debt Amount,
(c) (i) any Lien in respect of all or any portion of the TB
Wood's
Collateral now or hereafter held by or on behalf of the Collateral
Agent, the
Trustee, or any Noteholder that secures all or any portion of the
Indenture
Secured Obligations, shall in all respects be junior and
subordinate to all
Liens granted to the TB Wood's Agent and the TB Wood's Lenders in
the TB Wood's
Collateral to secure all or any portion of the TB Wood's Credit
Agreement
Secured Obligations up to (but not in excess of) the Maximum
Priority TB Wood's
Debt Amount, and (ii) any Lien in respect of all or any portion of
the TB Wood's
Collateral now or hereafter held by or on behalf of the TB Wood's
Agent or any
TB Wood's Lender that secures all or any portion of the TB Wood's
Credit
Agreement Secured Obligations in excess of the Maximum Priority TB
Wood's Debt
Amount, shall in all respects be junior and subordinate to all
Liens granted to
the Collateral Agent, the Trustee or any Noteholder in the TB
Wood's Collateral
to secure all or any portion of the Indenture Secured
Obligations.
(d) (i) any Lien in respect of all or any portion of the TB
Wood's
Collateral now or hereafter held by or on behalf of the TB Wood's
Agent (or any
TB Wood's Lender) that secures all or any portion of the TB Wood's
Credit
Agreement Secured Obligations up to (but not in excess of) the
Maximum Priority
TB Wood's Debt Amount, shall in all respects be senior and prior to
all Liens
granted to the Collateral Agent (or the Trustee or any Noteholder)
in the TB
Wood's Collateral to secure all or any portion of the Indenture
Secured
Obligations, and (ii) any Lien in respect of all or any portion of
the TB Wood's
Collateral now or hereafter held by or on behalf of the Collateral
Agent, the
Trustee, or any Noteholder that secures all or any portion of the
Indenture
Secured Obligations, shall in all respects be senior and prior to
all Liens
granted to the TB Wood's Agent and the TB Wood's Lenders in the TB
Wood's
Collateral to secure all or any portion of the TB Wood's Credit
Agreement
Secured Obligations in excess of the Maximum Priority TB Wood's
Debt Amount.
(e) (i) any Lien in respect of all or any portion of the TB
Wood's
Collateral now or hereafter held by or on behalf of the Senior
Agent or any
Senior Lender that secures all or any portion of the Credit
Agreement Secured
Obligations, shall in all respects be junior and subordinate to all
Liens
granted to the TB Wood's Agent and the TB Wood's Lenders in the TB
Wood's
Collateral to secure all or any portion of the TB Wood's Credit
Agreement
Secured Obligations and (ii) any Lien in respect of all or any
portion of the TB
Wood's Collateral now or hereafter held by or on behalf of the TB
Wood's Agent
(or any TB Wood's Lender) that secures all or any portion of the TB
Wood's
Credit Agreement Secured Obligations, shall in all respects be
senior and prior
to all Liens granted to the Senior Agent (or any Senior Lender) in
the TB Wood's
Collateral to secure all or any portion of the Credit Agreement
Secured
Obligations.
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<PAGE>
The Collateral Agent, for and on behalf of itself, the Trustee and
the
Noteholders, acknowledges and agrees that, concurrently herewith,
the Senior
Agent, for the benefit of itself and the Senior Lenders, has been
granted Liens
upon all of the Collateral in which the Collateral Agent has been
granted Liens
and the Collateral Agent hereby consents thereto. The Senior Agent
acknowledges
and agrees that the Collateral Agent, for the benefit of itself,
the Trustee,
and the Noteholders, has been granted Liens upon all of the
Collateral and the
Senior Agent hereby consents thereto. The subordination of Liens
(up to the
Maximum Priority Debt Amount) by the Collateral Agent, on behalf of
itself, the
Trustee, and the Noteholders in favor of the Senior Agent and the
Senior Lenders
herein shall not be deemed to subordinate the Collateral Agent's
Liens to the
Liens of any other Person. The subordination of Liens (in excess of
the Maximum
Priority Debt Amount) in favor of the Collateral Agent, for the
benefit of
itself, the Trustee and the Noteholders herein shall not be deemed
to
subordinate the Senior Agent's Liens to the Liens of any other
Person.
Each of the Senior Agent, on behalf of itself and the Senior
Lenders,
and the Collateral Agent, for and on behalf of itself, the Trustee
and the
Noteholders, acknowledges and agrees that, concurrently herewith,
the TB Wood's
Agent, for the benefit of itself and the TB Wood's Lenders, has
been granted
Liens upon the TB Wood's Collateral and the Senior Agent and the
Collateral
Agent hereby consent thereto. The TB Wood's Agent acknowledges and
agrees that
each of the Senior Agent, on behalf of itself and the Senior
Lenders, and the
Collateral Agent, for the benefit of itself, the Trustee, and the
Noteholders,
has been granted Liens upon the TB Wood's Collateral and the TB
Wood's Agent
hereby consents thereto. The subordination of Liens (up to the
Maximum Priority
TB Wood's Debt Amount) by the Collateral Agent, on behalf of
itself, the
Trustee, and the Noteholders in favor of the TB Wood's Agent and
the TB Wood's
Lenders herein shall not be deemed to subordinate the Collateral
Agent's Liens
to the Liens of any other Person. The subordination of Liens (in
excess of the
Maximum Priority TB Wood's Debt Amount) in favor of the Collateral
Agent, for
the benefit of itself, the Trustee and the Noteholders herein shall
not be
deemed to subordinate the TB Wood's Agent's Liens to the Liens of
any other
Person.
Section 2.02 Waiver of Right to Contest Liens. The Collateral Agent
agrees,
on behalf of itself, the Trustee, and the Noteholders, that it and
they shall
not (and hereby waives, on behalf of itself and the Noteholders any
right to)
take any action to contest or challenge (or assist or support any
other Person
in contesting or challenging), directly or indirectly, whether or
not in any
proceeding (including in any Insolvency Proceeding), the validity,
priority,
enforceability, or perfection of the Liens of the Senior Agent in
respect of the
Collateral or the validity, priority, enforceability, or perfection
of the Liens
of the TB Wood's Agent in respect of the TB Wood's Collateral . The
Collateral
Agent, for itself, the Trustee, and on behalf of the Noteholders,
agrees that
neither the Collateral Agent nor the Trustee will take any action
that would
hinder any exercise of remedies undertaken by the Senior Agent
under the Senior
Loan Documents or the exercise of remedies undertaken by the TB
Wood's Agent
under the TB Wood's Loan Documents,
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<PAGE>
including any public or private sale, lease, exchange, transfer, or
other
disposition of the Collateral, whether by foreclosure or otherwise.
The
Collateral Agent, for itself, the Trustee, and on behalf of the
Noteholders,
hereby waives any and all rights it, the Trustee, or the
Noteholders may have as
a junior lien creditor or otherwise to contest, protest, object to,
interfere
with the manner in which (a) the Senior Agent seeks to enforce the
Liens in any
portion of the Collateral (it being understood and agreed that the
terms of this
Agreement shall govern with respect to the Collateral even if any
portion of the
Liens securing the Credit Agreement Secured Obligations are
avoided, disallowed,
set aside, or otherwise invalidated in any judicial proceeding or
otherwise) or
(b) the TB Wood's Agent seeks to enforce the Liens in any portion
of the TB
Wood's Collateral (it being understood and agreed that the terms of
this
Agreement shall govern with respect to the TB Wood's Collateral
even if any
portion of the Liens securing the TB Wood's Credit Agreement
Secured Obligations
are avoided, disallowed, set aside, or otherwise invalidated in any
judicial
proceeding or otherwise). The Senior Agent, for itself and the
Senior Lenders,
agrees that it shall not (and hereby waives any right to) take any
action to
contest or challenge (or assist or support any other Person in
contesting or
challenging), directly or indirectly, whether or not in any
proceeding
(including in any Insolvency Proceeding), the validity,
priority,
enforceability, or perfection of the Liens of the Collateral Agent
in respect of
the Collateral or the validity, priority, enforceability, or
perfection of the
Liens of the TB Wood's Agent in respect of the TB Wood's
Collateral. Following
the Discharge of Credit Agreement Secured Obligations, the Senior
Agent, on
behalf of itself and the Senior Lenders, agrees that it will not
take any action
that would hinder any exercise of remedies undertaken by the
Collateral Agent,
the Trustee, or any Noteholder under the Indenture Loan Documents,
including any
public or private sale, lease, exchange, transfer, or other
disposition of the
Collateral, whether by foreclosure or otherwise. Following the
Discharge of
Credit Agreement Secured Obligations, the Senior Agent, on behalf
of itself and
the Senior Lenders, hereby waives any and all rights it may have as
a junior
lien creditor or otherwise to contest, protest, object to,
interfere with the
manner in which the Collateral Agent, the Trustee or any Noteholder
seeks to
enforce the Liens in any portion of the Collateral (it being
understood and
agreed that the terms of this Agreement shall govern with respect
to the
Collateral even if any portion of the Liens securing the Indenture
Secured
Obligations are avoided, disallowed, set aside, or otherwise
invalidated in any
judicial proceeding or otherwise). Following the Discharge of TB
Wood's Credit
Agreement Secured Obligations, the TB Wood's Agent, on behalf of
itself and the
TB Wood's Lenders, agrees that it will not take any action that
would hinder any
exercise of remedies undertaken by the Collateral Agent, the
Trustee, or any
Noteholder under the Indenture Loan Documents or by the Senior
Agent or Senior
Lenders under the Senior Loan Documents, including any public or
private sale,
lease, exchange, transfer, or other disposition of the Collateral,
whether by
foreclosure or otherwise. Following the Discharge of TB Wood's
Credit Agreement
Secured Obligations, the TB Wood's Agent, on behalf of itself and
the TB Wood's
Lenders, hereby waives any and all rights it may have as a junior
lien creditor
or otherwise to contest, protest, object to, interfere with the
manner in which
the Senior Agent, any Senior Lenders, Collateral Agent, the Trustee
or any
Noteholder seeks to enforce the
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Liens in any portion of the Collateral (it being understood and
agreed that the
terms of this Agreement shall govern with respect to the TB Wood's
Collateral
even if any portion of the Liens securing the Indenture Secured
Obligations or
the Credit Agreement Secured Obligations are avoided, disallowed,
set aside, or
otherwise invalidated in any judicial proceeding or otherwise)
Section 2.03 Remedies Standstill. At any time after the occurrence
and
during the continuation of an Event of Default under any of the
Loan Documents,
the Senior Agent may send a Standstill Notice to the Collateral
Agent. The
Collateral Agent, on behalf of itself, the Trustee, and the
Noteholders, agrees
that from and after the date of its receipt of any Standstill
Notice, neither
the Collateral Agent nor the Trustee will Exercise Any Secured
Creditor Remedies
(other than its rights under Section 2.04(d)) unless and until (a)
the Senior
Agent has expressly waived or acknowledged the cure of the
applicable Event of
Default in writing or the Discharge of the Credit Agreement Secured
Obligations
shall have occurred, or (b) 120 days shall have elapsed from the
date of the
Collateral Agent's receipt of such Standstill Notice. From and
after the earlier
to occur of (i) the Collateral Agent's receipt of such waiver or
cure notice, or
(ii) the elapsing of such 120th day period, any of the Collateral
Agent, the
Trustee, or any Noteholder may commence to Exercise Any Secured
Creditor
Remedies (subject to the provisions of this Agreement, including
the immediately
succeeding sentence, Section 4.02 hereof and except with respect to
any such
Collateral as to which the Senior Agent is diligently effecting the
collection,
foreclosure, sale or other realization upon or disposition of).
Notwithstanding
any other provision in this Agreement, none of the Collateral
Agent, the Trustee
or any Noteholder may Exercise Any Secured Creditor Remedies prior
to the
Discharge of Credit Agreement Secured Obligations (x) with respect
to any item
of Collateral so long as Senior Agent has commenced and is
diligently pursuing
its Exercise of Secured Creditor Remedies in respect of such items
of
Collateral, and (y) without first providing Senior Agent at least 5
Business
Days' prior written notice. The Senior Agent may only send three
(3) Standstill
Notices following the date hereof (it being understood and agreed
as
clarification to the foregoing that no more than three (3)
Standstill Notices
may be provided whether delivered hereunder or under any
corresponding provision
of any other agreement similar hereto that may be delivered
pursuant to Section
7.17 hereof) and no more than one (1) Standstill Notice may be
given by the
Senior Agent in any consecutive 365-day period. The time period
during which the
Collateral Agent is not permitted to Exercise any Secured Creditor
Remedies
under this section is referred to herein as the "Standstill
Period".
Section 2.04 Exercise of Rights.
(a) No Other Restrictions. Except as expressly set forth in
this
Agreement, each of the Collateral Agent, the Trustee, the
Noteholders, the
Senior Agent, the Senior Lenders, the TB Wood's Agent and the TB
Wood's Lenders
shall have any and all rights and remedies it may have as a
creditor under
applicable law, including the rights to exercise all rights and
remedies in
foreclosure or otherwise with respect to any
16
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of the Collateral; provided, however, that any such exercise by the
Collateral
Agent, the Trustee or the Noteholders, and any collection or sale
of all or any
portion of the Collateral by the Collateral Agent, the Trustee or
the
Noteholders, shall be subject to the Liens of the Senior Agent on
the Collateral
to the extent provided in Section 2.01 and to the provisions of
this Agreement
including Section 4.02 hereof. In exercising rights and remedies
with respect to
the Collateral, the Senior Agent may enforce the provisions of the
Senior Loan
Documents and
