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INTERCREDITOR AGREEMENT

Intercreditor Agreement

INTERCREDITOR AGREEMENT | Document Parties: NEFF RENTAL INC | NEFF FINANCE CORP., | NEFF RENTAL, INC., You are currently viewing:
This Intercreditor Agreement involves

NEFF RENTAL INC | NEFF FINANCE CORP., | NEFF RENTAL, INC.,

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Title: INTERCREDITOR AGREEMENT
Governing Law: New York     Date: 1/3/2006

INTERCREDITOR AGREEMENT, Parties: neff rental inc , neff finance corp.  , neff rental  inc.
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EXHIBIT 10.3

 

EXECUTION COPY

 

 

INTERCREDITOR AGREEMENT

 

dated as of July 8, 2005

 

among

 

NEFF RENTAL LLC,

NEFF FINANCE CORP.,

 

NEFF RENTAL, INC.,

 

THE OTHER GRANTORS FROM TIME TO TIME PARTY HERETO,

 

GENERAL ELECTRIC CAPITAL CORPORATION ,
as Credit Agreement Agent under the Credit Agreement and
Priority Lien Collateral Agent under the Priority Lien Collateral Documents,

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Trustee and Parity Junior Lien Collateral Agent under the Indenture

 

THIS IS THE INTERCREDITOR AGREEMENT REFERRED TO IN (A) THE AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF JULY 8, 2005, AMONG NEFF RENTAL LLC, NEFF FINANCE CORP., NEFF RENTAL, INC., THE OTHER CREDIT PARTIES FROM TIME TO TIME PARTY THERETO, THE LENDERS FROM TIME TO TIME PARTY THERETO AND GENERAL ELECTRIC CAPITAL CORPORATION, AS AGENT, (B) THE INDENTURE DATED AS OF JULY 8, 2005, AMONG NEFF RENTAL LLC, NEFF FINANCE CORP., NEFF RENTAL, INC., THE OTHER GUARANTORS FROM TIME TO TIME PARTY THERETO AND WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE, (C) THE INTERCREDITOR AGREEMENT DATED AS OF JUNE 3, 2005, AMONG NEFF CORP., NEFF RENTAL, INC., THE OTHER CREDIT PARTIES THERETO, GENERAL ELECTRIC CAPITAL CORPORATION, AS FIRST LIEN AGENT, AND CREDIT SUISSE, AS SECOND LIEN AGENT, AS THE “SUCCESSOR INTERCREDITOR AGREEMENT” AND (D) THE OTHER COLLATERAL DOCUMENTS REFERRED TO IN THE CREDIT DOCUMENTS REFERRED TO HEREIN.

 

 



 

TABLE OF CONTENTS

 

ARTICLE I

 

 

 

DEFINITIONS; PRINCIPLES OF CONSTRUCTION

 

 

 

SECTION 1.1. Defined Terms

 

SECTION 1.2. Rules of Interpretation

 

 

 

ARTICLE II

 

 

 

THE LIENS

 

 

 

SECTION 2.1. Priority of Liens

 

SECTION 2.2. Relative Priorities

 

SECTION 2.3. Prohibition on Contesting Liens

 

SECTION 2.4. No New Liens

 

SECTION 2.5. Similar Liens and Agreements

 

SECTION 2.6. Restrictions on Enforcement of Parity Junior Liens

 

SECTION 2.7. No Interference

 

SECTION 2.8. Rights as Unsecured Creditors

 

SECTION 2.9. Automatic Release of Parity Junior Liens

 

SECTION 2.10. Insurance and Condemnation Awards

 

SECTION 2.11. Payment Over

 

SECTION 2.12. Bailment and Sub-Agency for Perfection of Certain Security Interests

 

SECTION 2.13. Discretion in Enforcement of Priority Liens

 

SECTION 2.14. Post Petition Interest

 

SECTION 2.15. Amendment of Certain Documents

 

SECTION 2.16. Certain Notices in Security Documents

 

SECTION 2.17. Certain Voting Matters.

 

SECTION 2.18. No Waiver by Priority Lien Secured Parties

 

 

 

ARTICLE III

 

 

 

INTERCREDITOR RELATIONS

 

 

 

SECTION 3.1. Application of Proceeds

 

SECTION 3.2. Additional Secured Debt

 

SECTION 3.3. Notices by Parity Junior Lien Collateral Agent

 

 

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ARTICLE IV

 

 

 

REPRESENTATIONS AND WARRANTIES

 

 

 

SECTION 4.1. Representations and Warranties

 

SECTION 4.2. Representations and Warranties of Each Agent

 

 

 

ARTICLE V

 

 

 

OTHER AGREEMENTS

 

 

 

SECTION 5.1. Finance and Sale Matters.

 

SECTION 5.2. Relief from the Automatic Stay

 

SECTION 5.3. Certain Waivers by the Parity Junior Lien Secured Parties

 

 

 

ARTICLE VI

 

 

 

MISCELLANEOUS PROVISIONS

 

 

 

SECTION 6.1. Amendment of this Agreement; Waiver

 

SECTION 6.2. Further Assurances

 

SECTION 6.3. Delivery of Collateral and Proceeds of Collateral

 

SECTION 6.4. Successors and Assigns

 

SECTION 6.5. Delay and Waiver

 

SECTION 6.6. Notices; Officer’s Certificates

 

SECTION 6.7. Notice Following Discharge of Priority Lien Obligations

 

SECTION 6.8. Entire Agreement

 

SECTION 6.9. Severability; Continuing Nature of this Agreement

 

SECTION 6.10. Subrogation

 

SECTION 6.11. Headings

 

SECTION 6.12. Governing Law; Consent to Jurisdiction

 

SECTION 6.13. Waiver of Jury Trial

 

SECTION 6.14. Parties in Interest

 

SECTION 6.15. Specific Performance

 

SECTION 6.16. Counterparts

 

SECTION 6.17. Provisions Solely to Define Relative Rights

 

SECTION 6.18. Effectiveness; Survival

 

SECTION 6.19. Additional Grantors

 

SECTION 6.20. Insolvency

 

SECTION 6.21. Rights and Immunities of Secured Debt Representatives

 

SECTION 6.22. Conflicts

 

SECTION 6.23. No Reliance; Information

 

SECTION 6.24. No Warranties or Liability

 

SECTION 6.25. Reinstatement

 

SECTION 6.26. Compliance with Trust Indenture Act

 

 

 

EXHIBIT A – Form of Intercreditor Agreement Joinder

 

 

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INTERCREDITOR AGREEMENT dated as of July 8, 2005 (together with each Intercreditor Agreement Joinder, this “ Agreement ”), among NEFF RENTAL LLC, a Delaware limited liability company (“ Neff LLC ”), NEFF FINANCE CORP., a Delaware corporation (“ Finance Corp. ” and, together with Neff LLC, “ Holdings ”), NEFF RENTAL, INC., a Florida corporation (“ Neff Rental ”), the Grantors (as defined below) from time to time party hereto, GENERAL ELECTRIC CAPITAL CORPORATION (“ GECC ”), as Credit Agreement Agent (in such capacity and together with its successors in such capacity, the “ Credit Agreement Agent ”) and as collateral agent for the Priority Lien Lenders (as defined below) and the other Secured Parties (as defined in the Credit Agreement (as defined below)) (in such capacity and together with its successors in such capacity, the “ Priority Lien Collateral Agent ”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“ Wells Fargo ”), as Trustee (in such capacity and together with its successors in such capacity, the “ Trustee ”) and as collateral agent for the holders of the Notes (as defined below) (in such capacity and together with its successors in such capacity, the “ Parity Junior Lien Collateral Agent ”).

 

PRELIMINARY STATEMENT

 

Reference is made to (a) the Amended and Restated Credit Agreement dated as of July 8, 2005 (together with the related documents thereto (including any guarantee agreements and security documents), in each case, as amended, restated, supplemented, modified, increased, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time, the “ Credit Agreement ”), among Holdings, Neff Rental, the other Grantors from time to time party thereto, the lenders from time to time party thereto (the “ Priority Lien Lenders ”) and GECC, as Credit Agreement Agent, (b) the Indenture dated as of July 8, 2005 (as amended, extended, renewed, restated, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time, and any Refinancing (as defined below) thereof, whether in whole or in part, or a successor indenture, whether by the same or any other holders or trustee or group of holders and whether by the same trustee or a different trustee, the “ Indenture ”), among Holdings, Neff Rental, the other Guarantors (as defined in the Indenture) from time to time party thereto, and Wells Fargo, as Trustee, (c) the Priority Lien Documents (such term and each other capitalized term used in this Agreement having the meaning given it in Article I) and (d) the Parity Junior Lien Documents.

 

RECITALS

 

A.  The Priority Lien Lenders agreed to make loans to Neff Rental pursuant to the Credit Agreement, upon, among other terms and conditions, the condition that the Priority Lien Obligations under the Credit Agreement shall be secured by first priority Liens on, and security interests in, the Collateral.

 

B.  The holders of the Note Obligations have agreed to purchase the Notes issued pursuant to the Indenture, which Notes shall be secured by Parity Junior Liens on, and security interests in, the Collateral.

 

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C.  The Credit Agreement and the Indenture require, among other things, that the parties thereto set forth in this Agreement, among other things, their respective rights, obligations and remedies with respect to the Collateral.

 

D.  The parties hereto desire to provide that future secured creditors of Holdings, Neff Rental and any other Grantors may become party to, and have their respective Liens and security interests governed by, the provisions of this Agreement in accordance with all applicable Secured Debt Documents.

 

Accordingly, the parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS; PRINCIPLES OF CONSTRUCTION

 

SECTION 1.1.  Defined Terms.   As used in this Agreement, the following terms shall have the meanings specified below:

 

Additional Secured Debt ” has the meaning set forth in Section 3.2(a).

 

Affiliate ” has the meaning specified in the Indenture.

 

Agents ” means the Priority Lien Collateral Agent and the Parity Junior Lien Collateral Agent.

 

Agreement ” has the meaning assigned to such term in the preamble to this Agreement.

 

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

 

Bankruptcy Law ” means the Bankruptcy Code and any other similar Federal, state or foreign bankruptcy, insolvency or receivership law.

 

Capital Stock ” has the meaning assigned to such term in the Indenture in effect on the date hereof (or any similar term in any subsequent Indenture).

 

Class ” means (1) in the case of Parity Junior Lien Debt, every Series of Parity Junior Lien Debt, taken together, and (2) in the case of Priority Lien Debt, every Series of Priority Lien Debt, taken together.

 

Collateral ” means, collectively, the Priority Lien Collateral and the Parity Junior Lien Collateral.

 

Credit Agreement ” has the meaning set forth in the preliminary statement.

 

Credit Agreement Agent ” means, at any time, the Person serving at such time as the “Agent” or “Administrative Agent” under the Credit Agreement or any other representative then

 

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most recently designated in accordance with the applicable provisions of the Credit Agreement, together with its successors in such capacity.

 

Credit Documents ” means the Priority Lien Documents and the Parity Junior Lien Documents.

 

Credit Facilities ” means (1) the Credit Agreement and (2) one or more other debt facilities or commercial paper facilities, with banks, institutional lenders or other Persons providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, bank guarantees or banker’s acceptances, in each case, as amended, restated, supplemented, modified, increased, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time.

 

DIP Financing ” has the meaning set forth in Section 5.1(a)(2).

 

DIP Financing Liens ” has the meaning set forth in Section 5.1(a)(2).

 

Discharge of Priority Lien Obligations ” means, subject to Section 6.25, the occurrence of all of the following:

 

(a)                                   termination or expiration of all commitments to extend credit that would constitute Priority Lien Debt;
 
(b)                                  payment in full in cash of the principal of and interest and premium (if any) on all Priority Lien Debt (other than any undrawn letters of credit);
 
(c)                                   discharge or cash collateralization (to the extent of any letters of credit constituting Priority Lien Debt (i) in the case of the Credit Agreement, in the manner and pursuant to the procedures specified in the Credit Agreement or if not so specified at 105% of the aggregate undrawn amount and (ii) in the case of any other Priority Lien Document, at the lesser of the amount specified in such document and 105% of the aggregate undrawn amount) of all such outstanding letters of credit constituting Priority Lien Debt; and
 
(d)                                  payment in full in cash of all other Priority Lien Obligations that are then outstanding and unpaid at the time the Priority Lien Debt is paid in full in cash (other than any obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities in respect of which no claim or demand for payment has been made at such time).
 

Disposition ” means any sale, lease, rental, exchange, transfer, conveyance, license or other disposition.  “ Dispose ” shall have a correlative meaning.

 

Finance Corp. ” has the meaning assigned to such term in the preamble to this Agreement.

 

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GECC ” has the meaning assigned to such term in the preamble to this Agreement.

 

Grantors ” means Holdings, Neff Rental and each other Person (if any) that grants a Lien on all or part of its assets or properties to secure all or part of the Secured Obligations.

 

Holdings ” has the meaning assigned to such term in the preamble to this Agreement.

 

Indebtedness ” means and includes all obligations that constitute Indebtedness as defined in the Indenture as in effect on the date of this Agreement.

 

Indenture ” has the meaning set forth in the preliminary statement.

 

Insolvency or Liquidation Proceeding ” means (a) any voluntary or involuntary 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.

 

Intercreditor Agreement Joinder ” means an agreement substantially in the form of Exhibit A .

 

Interest Swap Obligations ” means the obligations of any Person pursuant to any arrangement with any other Person whereby, directly or indirectly, such Person is entitled to receive from time to time periodic payments calculated by applying either a floating or a fixed rate of interest on a stated notional amount in exchange for periodic payments made by such other Person calculated by applying a fixed or a floating rate of interest on the same notional amount and shall include interest rate swaps, caps, floors, collars and similar agreements.

 

Lien ” means any mortgage or deed of trust, pledge, hypothecation, assignment, deposit arrangement, lien, charge, claim, security interest, easement or encumbrance of any kind or nature whatsoever (including any lease or title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement perfecting a security interest under the UCC or comparable law of any jurisdiction).

 

Neff LLC ” has the meaning assigned to such term in the preamble to this Agreement.

 

Neff Rental ” has the meaning set forth in the preamble to this Agreement.

 

Note Documents ” means the Indenture, the Notes and the Note Security Documents.

 

Note Obligations ” means the Notes and all other Obligations in respect thereof.

 

Note Security Documents ” has the meaning specified in the Indenture.

 

Notes ” means all 11¼% Second Priority Senior Secured Notes due 2012 issued under the Indenture.

 

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Obligations ” means, with respect to any Indebtedness, any principal (including reimbursement obligations with respect to letters of credit whether or not drawn), interest (including all interest accrued thereon after the commencement of any Insolvency or Liquidation Proceeding at the rate, including any applicable post-default rate, specified in (1) in the case of Priority Lien Debt, the Priority Lien Documents or (2) in the case of other Indebtedness, the documentation governing such Indebtedness, in each case, even if such interest is not enforceable, allowable or allowed as a claim in such Insolvency or Liquidation Proceeding), premium (if any), fees, indemnifications, reimbursements, expenses and other liabilities payable under the documentation governing such Indebtedness; provided, however , that Obligations with respect to the Notes shall not include the fees and indemnifications in favor of the Trustee and other third parties other than the holders of such Notes.

 

Officer’s Certificate ” means a certificate with respect to compliance with a condition or covenant provided for in this Agreement, signed on behalf of Neff LLC, Finance Corp. or Neff Rental, as applicable, by one officer of Neff LLC, Finance Corp. or Neff Rental, who must be the Chairman of the Board, the President, any Vice-President, the Treasurer or the Secretary of Neff LLC, Finance Corp. or Neff Rental, as applicable, including:

 

(a)                                   a statement that the Person making such certificate has read such condition or covenant;
 
(b)                                  a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate are based;
 
(c)                                   a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such condition or covenant has been satisfied; and
 
(d)                                  a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied.
 

Parity Junior Lien ” means any Lien granted pursuant to any Parity Junior Lien Security Document to the Parity Junior Lien Collateral Agent, at any time, upon any property of Holdings or any other Grantor to secure Parity Junior Lien Obligations.

 

Parity Junior Lien Collateral ” means all Collateral (as defined in the Indenture) and any other assets or property of Holdings or any other Grantor now or at any time hereafter subject to Liens securing any Parity Junior Lien Obligations.

 

  Parity Junior Lien Collateral Agent ” means Wells Fargo and its successors as collateral agent under the Indenture and any other Person designated as a collateral agent with respect to any other Series of Parity Junior Lien Debt; provided that, until such time that the Note Obligations have been discharged or paid in full, Wells Fargo and its successors as collateral agent under the Indenture shall be the sole authorized Person to act as the Parity Junior Lien Collateral Agent with respect to the Note Obligations.

 

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Parity Junior Lien Debt ” means:

 

(a)                                   the Notes, which Notes (whether issued on the date hereof or in the future) shall be treated as a single class or Series for all purposes of this Agreement; and
 
(b)                                  any other Indebtedness of Holdings or any other Grantor that is secured equally and ratably with the Notes by a Parity Junior Lien that was permitted to be incurred and so secured under each applicable Secured Debt Document; provided that such Indebtedness is (i) if incurred by Holdings, guaranteed by each Restricted Subsidiary of Neff LLC that, on the date of incurrence of such Indebtedness, is a Guarantor (as defined in the Indenture) or (ii) if incurred by Neff LLC or Finance Corp. or any other Grantor, guaranteed by Finance Corp. or Neff LLC, as applicable, and each Restricted Subsidiary of Neff LLC that, on the date of incurrence of such Indebtedness, is a Guarantor (as defined in the Indenture); provided , further , in the case of any Indebtedness referred to in this clause (b), that on or before the date on which such Indebtedness is incurred by Holdings, Neff Rental or such other Grantor, such Indebtedness is designated by Neff LLC, in an Officer’s Certificate delivered to each Parity Junior Lien Representative and the Priority Lien Collateral Agent, as “Parity Junior Lien Debt” for the purposes of the Indenture and this Agreement; provided that no Series of Secured Debt may be designated as both Parity Junior Lien Debt and Priority Lien Debt.
 

Parity Junior Lien Documents ” means, collectively, (a) the Note Documents and (b) each indenture, credit agreement or other agreement governing each other Series of Parity Junior Lien Debt and the related Parity Junior Lien Security Documents.

 

Parity Junior Lien Obligations ” means the Parity Junior Lien Debt and all Obligations in respect of Parity Junior Lien Debt.

 

Parity Junior Lien Permitted Actions ” has the meaning set forth in Section 2.6(b).

 

Parity Junior Lien Representative ” means:

 

(a)                                   in the case of the Notes, the Parity Junior Lien Collateral Agent; and
 
(b)                                  in the case of any other Series of Parity Junior Lien Debt, the trustee, agent or representative of the holders of such Series of Parity Junior Lien Debt who maintains the transfer register for such Series of Parity Junior Lien Debt and (i) is appointed as a Parity Junior Lien Representative (for purposes related to the administration of the security documents) pursuant to the applicable indenture, credit agreement or other agreement governing such Series of Parity Junior Lien Debt, together with its successors in such capacity and (ii) has become a party to this Agreement by executing an Intercreditor Agreement Joinder.

 

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Parity Junior Lien Secured Party ” means, at any time, each holder of Parity Junior Lien Obligations and their successors and assigns.

 

Parity Junior Lien Security Documents ” means this Agreement, each Note Security Document and all security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust, collateral agency agreements, control agreements, documents, instruments or other grants or transfers for security executed and delivered by Holdings, Neff Rental or any other Grantor creating (or purporting to create) a Lien upon Collateral for the benefit of the Parity Junior Lien Collateral Agent, in each case, as amended, modified, renewed, restated or replaced, in whole or in part, from time to time, in accordance with its terms, the Indenture and this Agreement.

 

Permitted Liens ” has the meaning specified in the Indenture.

 

Person ” or “ person ” means an individual, partnership, corporation, limited liability company, unincorporated organization, trust or joint venture, governmental agency or political subdivision thereof.

 

Pledged or Controlled Collateral ” has meaning set forth in Section 2.12(a).

 

Priority Lien ” means any Lien granted by any Priority Lien Security Document to any Priority Lien Representative, at any time, upon any property of Holdings or any other Grantor to secure Priority Lien Obligations.

 

Priority Lien Cap ” means, as of any date, the principal amount outstanding under the Credit Agreement, together with the Indebtedness outstanding under any other Credit Facility that is secured by a Priority Lien, in an aggregate principal amount not to exceed the sum of the amount permitted to be incurred pursuant to clause (2) of the definition of “Permitted Indebtedness” in the Indenture, as of any date, plus $15,000,000, less the amount of Parity Junior Lien Debt incurred after the date of the Credit Agreement pursuant to clause (2) or (13) of the definition of “Permitted Indebtedness” in the Indenture the net proceeds of which are used to Refinance Priority Lien Debt and for which there is a reduction in the commitments in respect of such Priority Lien Debt in an amount equal to the amount of such Parity Junior Lien Debt.  For purposes of this definition, all letters of credit will be valued at the face amount thereof, whether or not drawn (but without duplication of the principal amount of any other Indebtedness), and all Interest Swap Obligations will be valued at zero.

 

Priority Lien Collateral ” means all Collateral (as defined in the Credit Agreement) and any other assets or property of Holdings or any other Grantor now or at any time hereafter subject to Liens securing any Priority Lien Obligations.

 

Priority Lien Collateral Agent ” means the Credit Agreement Agent and its successors, each in its capacity as Priority Lien Collateral Agent under the Credit Agreement and any other Person designated as a collateral agent with respect to any other Series of Priority Lien Debt; provided that, until the Discharge of Priority Lien Obligations in respect of the Obligations under the Credit Agreement has occurred, the Credit Agreement Agent and its successors, each in its capacity as Priority Lien Collateral Agent under the Credit Agreement shall be the sole authorized Person to act as the Priority Lien Collateral Agent with respect to the Obligations

 

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under the Credit Agreement and each other Series of Priority Lien Debt unless otherwise determined by the Credit Agreement Agent or such successor, Holdings and the Required Priority Lien Debtholders at the time such other Series of Priority Lien Debt is incurred (such determination to be evidenced in the Intercreditor Agreement Joinder executed and delivered in connection with the issuance of such Series of Priority Lien Debt).

 

Priority Lien Debt ” means:

 

(a)                                   Indebtedness of Holdings, Neff Rental or any other Grantor under the Credit Agreement (to the extent such Indebtedness is not Refinanced with Parity Junior Lien Debt that would reduce the Priority Lien Cap) that was permitted to be incurred and secured under each applicable Secured Debt Document, which for purposes of the Indenture, shall be Indebtedness that is incurred under clause (2) or clause (13) of the definition of “Permitted Indebtedness” in the Indenture;
 
(b)                                  Indebtedness of Holdings, Neff Rental or any other Grantor under any other Credit Facility that is secured equally and ratably (or on such other basis as may be agreed by the relevant holders of the Priority Lien Obligations) with the Credit Agreement by a Priority Lien that was permitted to be incurred and so secured under each applicable Secured Debt Document, which for purposes of the Indenture, shall be Indebtedness that is incurred under clause (2) or clause (13) of the definition of “Permitted Indebtedness” in the Indenture; provided , that, in the case of any Indebtedness referred to in this clause (2), that on or before the date on which such Indebtedness is incurred by Holdings, Neff Rental or such other Grantor, such Indebtedness is designated by Neff LLC in an Officer’s Certificate delivered to each Priority Lien Representative, the Priority Lien Collateral Agent and the Parity Junior Lien Collateral Agent, as “Priority Lien Debt” for the purposes of the Secured Debt Documents; provided , that no Series of Secured Debt may be designated as both Parity Junior Lien Debt and Priority Lien Debt; and
 
(c)                                   Interest Swap Obligations of Holdings, Neff Rental or any other Grantor that are incurred pursuant to clause (4) of the definition of “Permitted Indebtedness” in the Indenture and permitted to be incurred under the Credit Agreement and any other Priority Lien Documents; provided , that:
 
(i) such Interest Swap Obligations are secured by a Priority Lien on all or substantially all of the assets and properties that secure Indebtedness under the Credit Facility in respect of which security for such Interest Swap Obligations was obtained; and
 
(ii) such Priority Lien is pari passu with the Priority Liens securing Indebtedness under the Credit Facility in respect of which security for such Interest Swap Obligations was obtained.

 

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Priority Lien Documents ” means the Credit Agreement and any other Credit Facility pursuant to which any Priority Lien Debt is incurred and the applicable Priority Lien Security Documents.

 

Priority Lien Lenders ” has the meaning set forth in the preliminary statement.

 

Priority Lien Obligations ” means the Priority Lien Debt and all other Obligations in respect of Priority Lien Debt.

 

Priority Lien Representative ” means:

 

(a)                                   in the case of Priority Lien Collateral, each applicable Priority Lien Collateral Agent;
 
(b)                                  in the case of the Credit Agreement, the Credit Agreement Agent; and
 
(c)                                   in the case of any other Series of Priority Lien Debt, the trustee, agent or representative of the holders of such Series of Priority Lien Debt who maintains the transfer register for such Series of Priority Lien Debt and is appointed as a representative of the Priority Lien Debt (for purposes related to the administration of the applicable Priority Lien Security Documents) pursuant to a credit agreement or other agreement governing such Series of Priority Lien Debt, and who has executed an Intercreditor Agreement Joinder.
 

Priority Lien Secured Party ” means, at any time, (a) each Secured Party (as defined in the Credit Agreement), (b) each other person to whom any of the Priority Lien Obligations (including indemnification obligations) is owed and (c) the successors and assigns of each of the foregoing.

 

Priority Lien Security Documents ” means this Agreement, the Collateral Documents (as defined in the Credit Agreement), and all security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust, collateral agency agreements, control agreements, documents, instruments or other grants or transfers for security executed and delivered by Holdings, Neff Rental or any other Grantor creating (or purporting to create) a Priority Lien upon Collateral in favor of the Priority Lien Representatives, in each case, as amended, modified, renewed, restated or replaced, in whole or in part, from time to time, in accordance with its terms.

 

Refinance ” means, in respect of any Indebtedness, to refinance, extend, renew, restructure, refund or replace (including by prepayment, redemption, defeasance or otherwise) or to issue other Indebtedness or commitments pursuant to which Indebtedness may be incurred in exchange or replacement for or in addition to such Indebtedness or any such commitments (whether or not any Indebtedness is outstanding thereunder and whether or not in connection therewith such Indebtedness or commitments are increased), in each case in whole or in part.  “ Refinanced ” and “ Refinancing ” shall have correlative meanings.

 

Release ” shall have the meaning assigned to such term in Section 2.9(a).

 

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Required Parity Junior Lien Debtholders ” means, at any time, (a) with respect to the Note Obligations, as determined in accordance with the Indenture and (b) with respect to all other Parity Junior Lien Obligations, at any time, the holders of more than 50% of the sum of:

 

(i) the aggregate outstanding principal amount of Parity Junior Lien Debt (including outstanding letters of credit whether or not then available or drawn); and
 
(ii) other than in connection with the exercise of remedies, the aggregate unfunded commitments to extend credit which, when funded, would constitute Parity Junior Lien Debt.
 

For purposes of this definition, (a) Parity Junior Lien Debt registered in the name or, or beneficially owned by, Holdings or any Affiliate of Holdings will be deemed not to be outstanding and (b) votes will be determined in accordance with the applicable Parity Junior Lien Documents.

 

Required Priority Lien Debtholders ” means (a) with respect to the Obligations under the Credit Agreement, the “Required Lenders” under and as defined in the Credit Agreement (or any similar term in any subsequent Credit Agreement) and (b) with respect to all other Priority Lien Obligations, at any time, the holders of more than 50% of the sum of:

 

(i) the aggregate outstanding principal amount of Priority Lien Debt (including outstanding letters of credit whether or not then available or drawn);
 
(ii) the aggregate unfunded commitments to extend credit which, when funded, would constitute Priority Lien Debt.
 

For purposes of this definition, (x) Priority Lien Debt registered in the name of, or beneficially owned by, Holdings or any Affiliate of Holdings will be deemed not to be outstanding and (y) votes will be determined in accordance with the applicable documents governing such Priority Lien Debt.

 

Restricted Subsidiary ” has the meaning assigned to such term in the Indenture in effect on the date hereof (or any similar term in any subsequent Indenture).

 

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

 

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

 

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

 

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

 

Secured Obligations ” means the Parity Junior Lien Obligations and the Priority Lien Obligations.

 

Secured Parties ” means the holders of Secured Obligations and the Secured Debt Representatives.

 

Security Documents ” means the Priority Lien Security Documents and the Parity Junior Lien Security Documents.

 

Series of Parity Junior Lien Debt ” means, severally, the Notes and each other issue or series of Parity Junior Lien Debt for which a single transfer register is maintained.

 

Series of Priority Lien Debt ” means, severally, the Indebtedness outstanding under the Credit Agreement and any other Credit Facility pursuant to which any Grantor incurs Priority Lien Debt.

 

Series of Secured Debt ” means each series of Parity Junior Lien Debt and each Series of Priority Lien Debt.

 

Subsidiary ” with respect to any specified Person, means:

 

(a)                                   any corporation, of which Capital Stock having at least a majority of the votes entitled to be cast in the election of directors under ordinary circumstances shall at the time be owned, directly or indirectly, by such Person; or
 
(b)                                  any other Person of which at least a majority of the voting interest under ordinary circumstances is at the time, directly or indirectly owned by such Person.
 

Trustee ” has the meaning assigned to such term in the preamble to this Agreement.

 

Uniform Commercial Code ” or “ UCC ” means the Uniform Commercial Code as the same may, from time to time, be enacted and in effect in the State of New York; provided , that to the extent that the UCC is used to define any term herein or in any Credit Document and such term is defined differently in different Articles of the UCC, the definition of such term contained in Article 9 shall govern; provided further , that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies with respect to, any Agent’s or any Secured Party’s Lien on any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of New York, the terms “ Uniform Commercial Code ” and “ UCC ” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions.

 

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Wells Fargo ” has the meaning assigned to such term in the preamble to this Agreement.

 

SECTION 1.2.  Rules of Interpretation.   (a)  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”.  The word “or” is not exclusive.

 

(b)                          Unless the context requires otherwise (i) any definition of  or reference to any statute or regulation or any agreement, instrument or other document herein shall be construed as referring to such statute or regulation or such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified subject, in the case of the Credit Documents, to this Agreement, (ii) any reference herein (A) to any person shall be construed to include such person’s successors and assigns and (B) to any Grantor shall be construed to include such Grantor as debtor and debtor-in-possession and any receiver or trustee for any Grantor, as the case may be, in any Insolvency or Liquidation Proceeding, (iii) 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, (iv) all references herein to Articles, Sections, clauses, recitals and preamble shall be construed to refer to Articles, Sections, clauses, recitals or preamble of this Agreement and (v) 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.

 

Notwithstanding anything to the contrary in this Agreement, any references contained herein to any Section, clause, paragraph or other provision of the Indenture (including any definition contained therein) shall be deemed to be a reference to such Section, clause, paragraph or other provision as in effect on the date of this Agreement; provided , that any reference to any such Section, clause, paragraph or other provision shall refer to such Section, clause, paragraph or other provision of the Indenture (including any definition contained therein) as amended or modified from time to time if such amendment or modification has been (1) made in accordance with the Indenture and this Agreement and (2) prior to the Discharge of Priority Lien Obligations, approved in a writing delivered to the Priority Lien Collateral Agent and the Parity Junior Lien Collateral Agent by, or on behalf of, and with the consent of, the requisite holders of Priority Lien Obligations as are needed (if any) under the terms of the applicable Priority Lien Documents to approve such amendment or modification.

 

(c)                           Notwithstanding anything to the contrary in this Agreement, any references contained herein to any Section, clause, paragraph or other provision of the Credit Agreement (including any definition contained therein) shall be deemed to be a reference to such Section, clause, paragraph or other provision as in effect from time to time.

 

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ARTICLE II

THE LIENS

 

SECTION 2.1.  Priority of Liens.   Notwithstanding anything else contained herein or in any of the other Credit Documents, it is the intent of the parties that:

 

(a)                           the grant of Priority Liens pursuant to the Priority Lien Security Documents and the grant of Parity Junior Liens pursuant to the Parity Junior Lien Security Documents, respectively, create two separate and distinct Liens: the Priority Liens securing the payment and performance of the Priority Lien Obligations and the Parity Junior Liens securing the payment and performance of the Parity Junior Lien Obligations, respectively; and

 

(b)                          the Parity Junior Liens securing the Parity Junior Lien Obligations are subject and subordinate to the Priority Liens securing the Priority Lien Obligations.

 

SECTION 2.2.  Relative Priorities.   Notwithstanding (a) the date, time, method, manner or order of grant, attachment or perfection of any Parity Junior Lien or any Priority Lien, (b) the order or time of filing or recordation of any document or instrument for perfecting the Liens in favor the Priority Lien Collateral Agent (or any Priority Lien Secured Party) or the Parity Junior Lien Collateral Agent (or any Parity Junior Lien Secured Party), or (c) any provision of the UCC or any other applicable law or the provisions of any Credit Document, any alleged or actual defect or deficiency in any of the foregoing or any other circumstance whatsoever, the Parity Junior Lien Collateral Agent, for itself and on behalf of the other Parity Junior Lien Secured Parties, hereby agrees that, so long as the Discharge of Priority Lien Obligations has not occurred, (i) any Priority Lien now or hereafter held by or for the benefit of any Priority Lien Secured Party shall be senior in right, priority, operation, effect and all other respects to any and all Parity Junior Liens and (ii) any Parity Junior Lien now or hereafter held by or for the benefit of any Parity Junior Lien Secured Party shall be junior and subordinate in right, priority, operation, effect and all other respects to any and all Priority Liens.  The Priority Liens shall be and remain senior in right, priority, operation, effect and all other respects to any Parity Junior Liens for all purposes, whether or not any Priority Liens are subordinated in any respect to any other Lien securing any other obligation of any Grantor or any other person and irrespective of the date, time, method, manner or order of grant, attachment or perfection of any such Liens and security interests and whether or not the Priority Liens are valid, perfected or enforceable.

 

SECTION 2.3.  Prohibition on Contesting Liens.   Each of the Priority Lien Collateral Agent, for itself and on behalf of the other Priority Lien Secured Parties, and the Parity Junior Lien Collateral Agent, for itself and on behalf of the other Parity Junior Lien Secured Parties, agrees that it will not, and hereby waives any right to, contest or challenge (or support any other person in contesting or challenging), directly or indirectly, in any proceeding (including any Insolvency or Liquidation Proceeding), the perfection, priority, validity or enforceability of any Parity Junior Lien or any Priority Lien, as the case may be, and the Parity Junior Lien Collateral Agent, for itself and on behalf of the other Parity Junior Lien Secured Parties, agrees that it will not, and hereby waives any right to, demand, request, plead or otherwise assert or claim the benefit of any marshalling, approval, valuation or similar right which it may have in respect of the Collateral or the Parity Junior Liens; provided that nothing in this Agreement shall be

 

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construed to prevent or impair the rights of the Priority Lien Collateral Agent, the Priority Lien Representative or any Priority Lien Secured Party to enforce this Agreement.

 

SECTION 2.4.  No New Liens.   The parties hereto agree that, so long as the Discharge of Priority 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 or property of any Grantor to secure any Parity Junior Lien Obligation unless it has granted, or concurrently therewith grants, a Lien on such asset or property of any Grantor to secure the Priority Lien Obligations or (b) subject to Section 10.01(b) of the Indenture, grant or permit any additional Liens on any asset or property to secure any Priority Lien Obligations unless it has granted, or concurrently therewith grants, a Lien on such asset to secure the Parity Junior Lien Obligations, with each such Lien to be subject to the provisions of this Agreement; provided , that the Parity Junior Lien Collateral Agent agrees (on behalf of itself and the holders of Parity Junior Lien Obligations) that no holder of Parity Junior Lien Obligations shall obtain, permit or suffer to exist any Lien on any assets or property of any Grantor not subject to a Lien in favor of the Priority Lien Collateral Agent or any other Priority Lien Secured Party unless (i) the Priority Lien Collateral Agent, for the benefit of itself and the Priority Lien Secured Parties, also obtains a Lien on such assets or property or (ii) the Priority Lien Collateral Agent declines in a writing to the Parity Junior Lien Collateral Agent to obtain a Lien on such assets; and provided, further , that in the event that the Parity Junior Lien Collateral Agent or any holder of Parity Junior Lien Obligations obtains such a Lien on any assets or property of Holdings or any other Grantor in contravention of this Section 2.4 that do not also secure the Priority Lien Obligations, the Parity Junior Lien Collateral Agent will immediately notify the Priority Lien Collateral Agent in writing of such Lien and shall either (i) release such Lien or (ii) assign such Lien to the Priority Lien Collateral Agent for the benefit of the Priority Lien Secured Parties as security for the Priority Lien Obligations (unless Holdings or the applicable Grantor, as applicable, shall promptly grant a similar Lien on such assets or property to the Priority Lien Collateral Agent for the benefit of the Priority Lien Secured Parties and such Lien shall be prior to the Lien of the Parity Junior Lien Collateral Agent on such assets or property as a result of this Agreement or otherwise).  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 Priority Lien Collateral Agent or the other Priority Lien Secured Parties, the Parity Junior Lien Collateral Agent agrees, for itself and on behalf of the holders of Parity Junior Lien Obligations, that any amounts received by or distributed to the Parity Junior Lien Collateral Agent or any holder of Parity Junior Lien Obligations pursuant to or as a result of any Lien granted in contravention of this Section shall be subject to Section 2.11.

 

SECTION 2.5.  Similar Liens and Agreements.   Subject to Section 10.01(b) of the Indenture, each of the parties hereto acknowledges and agrees that it is its intention that the Priority Lien Collateral and the Parity Junior Lien Collateral be identical.  In furtherance of the foregoing, the parties hereto agree:

 

(a)                           to cooperate in good faith in order to determine, upon any reasonable request by the Priority Lien Collateral Agent or the Parity Junior Lien Collateral Agent, the specific assets included in the Priority Lien Collateral and the Parity Junior Lien Collateral, the steps taken to perfect the Priority Liens and the Parity Junior Liens thereon and the identity of

 

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the respective Grantors obligated under the Priority Lien Documents and the Parity Junior Lien Documents; and

 

(b)                          that the documents, agreements and instruments creating or evidencing the Parity Junior Lien Collateral and the Parity Junior Liens shall be in all material respects in the same form as the documents, agreements and instruments creating or evidencing the Priority Lien Collateral and the Priority Liens, other than with respect to the first priority and second priority nature of the Liens created or evidenced thereunder, the identity of the Secured Parties that are parties thereto or secured thereby and other matters contemplated by this Agreement.

 

SECTION 2.6.  Restrictions on Enforcement of Parity Junior Liens.   (a)  Until the Discharge of Priority Lien Obligations, the Priority Lien Representatives and the holders of Priority Lien Obligations will have, subject to the exceptions set forth below in clauses (1) through (4), the exclusive right to act with respect to the Security Documents and the Collateral, including the exclusive right to enforce, collect or realize on any Collateral or exercise any other right or remedy with respect to the Collateral and neither the Parity Junior Lien Collateral Agent nor the holders of Parity Junior Lien Obligations may authorize or direct the Priority Lien Representatives or any other Person with respect to such matters.  Notwithstanding the foregoing, the Parity Junior Lien Representatives and the holders of Parity Junior Lien Obligations may direct the Parity Junior Lien Collateral Agent:

 

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

 

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

 

(3)                              as necessary to perfect or establish the second priority (subject to Priority Liens and other Permitted Liens and other than with respect to the possession or control of the Pledged or Controlled Collateral) of the Parity Junior Liens upon any Collateral; provided, that unless otherwise agreed to by the Parity Junior Lien Collateral Agent in the Security Documents, the Parity Junior Lien Representatives and the holders of Parity Junior Lien Obligations may not require the Parity Junior Lien Collateral Agent to take any action to perfect any Collateral through possession or control; or

 

(4)                              as necessary to create, prove, preserve or protect (but not enforce) the Parity Junior Liens upon any Collateral.

 

(b)                          So long as the Discharge of Priority Lien Obligations has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced, the Priority Lien Collateral Agent, the Priority Lien Representatives and the holders of Priority Lien Obligations shall have the exclusive right to enforce rights and exercise remedies (including any right of setoff) with respect to the Collateral (including making determinations regarding the release, Disposition or restrictions with respect to the Collateral (including the enforcement of any right

 

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under any account control agreement, landlord waiver or bailee’s letter or any similar agreement or arrangement to which the Parity Junior Lien Collateral Agent or any other Parity Junior Lien Secured Party is a party), or to commence or seek to commence any action or proceeding with respect to such rights or remedies (including any foreclosure action or proceeding or any Insolvency or Liquidation Proceeding), in each case, without any consultation with or any consent of the Parity Junior Lien Collateral Agent, any Parity Junior Lien Representative or any holder of Parity Junior Lien Obligations; provided that, notwithstanding the foregoing:

 

(i) in any Insolvency or Liquidation Proceeding, the Parity Junior Lien Collateral Agent may file a proof of claim or statement of interest with respect to the Parity Junior Lien Obligations;
 
(ii) the Parity Junior Lien Collateral Agent may take any action (other than actions relating to enforcement of Parity Junior Liens) to preserve or protect the validity, perfection, second priority and enforceability of the Parity Junior Liens, provided that no such action is, or could reasonably be expected to be, (A) adverse in any respect to the Priority Liens or the rights of the Priority Lien Collateral Agent, the Priority Lien Representatives or any holders of Priority Lien Obligations to exercise remedies in respect thereof or (B) otherwise inconsistent with the terms of this Agreement, including the automatic release of Parity Junior Liens provided in Section 2.9 and the automatic amendment of the Parity Junior Lien Security Documents provided in Section 2.15(c);
 
(iii) the holders of Parity Junior Lien Obligations may file any responsive or defensive pleadings in opposition to any

 
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