INTERCREDITOR AGREEMENT

Exhibit 4.8

EXECUTION COPY

INTERCREDITOR AGREEMENT

This INTERCREDITOR AGREEMENT (this “Agreement”), is dated as of May 26, 2006, and entered into by and among Unifi, Inc. (the “Company”), the domestic subsidiaries of the Company listed on the signature pages hereof (together with any subsidiary that becomes a party hereto after the date hereof, the “Company Subsidiaries”), Bank of America, N.A., in its capacity as administrative agent under the SCF Credit Agreement, including its successors and assigns from time to time (the “SCF Agent”), and U.S. Bank National Association, in its capacity as trustee and collateral agent under the Indenture, including its successors and assigns from time to time (in such capacities, the “Notes Agent”). Capitalized terms used in this Agreement have the meanings assigned to them in Section 1 below.

RECITALS

The Company, the Company Subsidiaries, the SCF Lenders, and the SCF Agent have entered into that certain Amended and Restated Credit Agreement, dated as of May 26, 2006 (as amended, restated, supplemented, modified, replaced, or refinanced from time to time, the “Initial SCF Credit Agreement”) in favor of the Company;

The Company has issued, or will issue, $190,000,000 11.50% senior secured notes due 2014 (the “Initial Notes”) under an indenture, dated as of May 26, 2006 (as amended, restated, supplemented, modified, replaced, or refinanced from time to time, the “Indenture”) among the Company, each Guarantor (as defined in the Indenture), and the Notes Agent;

In order to induce the SCF Agent and the SCF Lenders to consent to the Grantors incurring the Note Obligations and granting the Liens to the Notes Agent and in order to induce the Notes Agent and the Noteholders to consent to the Grantors incurring the SCF Obligations and granting the Liens to SCF Agent, the SCF Agent, on behalf of the SCF Lenders, and the Notes Agent, on behalf of the Noteholders, have agreed to the relative priority of their respective Liens on the Collateral and certain other rights, priorities and interests as set forth in this Agreement.

AGREEMENT

In consideration of the foregoing, the mutual covenants and obligations herein set forth and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

I.

DEFINITIONS.

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

“Access Period” means for each parcel of Mortgaged Premises, the period, after the commencement of an Enforcement Period, which begins on the earlier of (a) the day on which the SCF Agent provides the Notes Agent with the notice of its election to request access pursuant to Section 3.3(b) below and (b) the fifth Business Day after the

Notes Agent provides the SCF Agent with notice that the Notes Agent (or its agent) has obtained possession or control of such parcel and ends on the earliest of (i) the 120^th day after the date (the “Initial Access Date”) on which the SCF Agent initially obtains the ability to take physical possession of, remove, or otherwise control physical access to, or actually uses, the SCF Collateral located on such Mortgaged Premises plus such number of days, if any, after the Initial Access Date that it is stayed or otherwise prohibited by law or court order from exercising remedies with respect to Collateral located on such Mortgaged Premises, (ii) the date on which all or substantially all of the SCF Primary Collateral located on such Mortgaged Premises is sold, collected or liquidated, (iii) the date on which the Discharge of SCF Obligations occurs, and (iv) the date on which the SCF Default or the Note Default that was the subject of the Enforcement Notice relating to such Enforcement Period has been cured to the satisfaction of the SCF Agent or the Notes Agent, as applicable, or waived in writing.

“Accounts” means all now present and future “accounts” and “payment intangibles” (in each case, as defined in Article 9 of the UCC).

“Account Agreements” means any lockbox account agreement, pledged account agreement, blocked account agreement, securities account control agreement, or any similar deposit or securities account agreements among the Notes Agent and/or the SCF Agent, one or more Grantors and the relevant financial institution depository or securities intermediary.

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the Person specified, or which owns, directly or indirectly, ten percent (10%) or more of the outstanding equity interest of such Person. For purposes of this definition, a Person shall be deemed to “control” or be “controlled by” a Person if such Person possesses, directly or indirectly, power to direct or cause the direction of the management or policies of such Person whether through ownership of equity interests, by contract or otherwise.

“Agents” means the SCF Agent and the Notes Agent.

“Agreement” means this Intercreditor Agreement, as amended, restated, renewed, extended, supplemented or otherwise modified from time to time.

“Bank Products” means any one or more of the following types of services or facilities extended to any Grantor by any SCF Lender or any Affiliate of a SCF Lender in reliance on such SCF Lender’s agreement to indemnify such Affiliate: (i) any cash management or related services (including, without limitation, automated clearinghouse transactions, return items, overdrafts and interstate depository network services); (ii) cash management, including controlled disbursement services; (iii) commercial credit card and merchant card services; (iv) products under Hedge Agreements; and (v) such other banking products or services provided by any SCF Lender or any Affiliate of any SCF Lender

 

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as may be requested by any Grantor, excluding Letters of Credit (as defined in the SCF Credit Agreement).

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

“Bankruptcy Law” means the Bankruptcy Code and any similar federal, state or foreign law for the relief of debtors.

“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close.

“Capital Stock” means (i) in the case of a corporation, capital stock, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of capital stock, (iii) in the case of a partnership, partnership interests (whether general or limited), (iv) in the case of a limited liability company, membership interests and (v) 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 assets of, the issuing Person; provided that with respect to the foregoing, Capital Stock shall exclude any debt securities convertible into Capital Stock, whether or not such debt securities include any right of vote or participation with Capital Stock.

“Chattel Paper” means all present and future “chattel paper” (as defined in Article 9 of the UCC).

“Claimholder” means any Note Claimholder or SCF Claimholder, as applicable.

“Collateral” means any and all of the assets and property of any Grantor, whether real, personal or mixed, constituting either SCF Primary Collateral or Note Primary Collateral.

“Company” has the meaning assigned to that term in the Preamble to this Agreement.

“Company Subsidiary” has the meaning assigned to that term in the Preamble to this Agreement.

“Conforming Plan of Reorganization” means any Plan of Reorganization whose provisions are consistent with the provisions of this Agreement.

“Copyright Licenses” means any present or future written agreement, naming any Grantor as licensor or licensee, granting any right under any Copyright.

“Copyrights” means (a) all registered United States copyrights in any works which are subject to copyright protection pursuant to Title 17 of the United States Code, now existing or hereafter created or acquired, all registrations and recordings thereof, and all applications

 

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in connection therewith, including, without limitation, registrations, recordings and applications in the United States Copyright Office and (b) all renewals thereof.

“Deposit Accounts” means all present and future “deposit accounts” (as defined in Article 9 of the UCC).

“DIP Financing” has the meaning assigned to that term in Section 6.1.

“Discharge of Note Obligations” means, except to the extent otherwise expressly provided in Section 5.5, discharge of the Notes as provided for in Section 11.01 of the Indenture.

“Discharge of SCF Obligations” means, except to the extent otherwise expressly provided in Section 5.5:

(a) indefeasible payment in full in cash of the principal of and interest (including interest accruing on or after the commencement of any Insolvency or Liquidation Proceeding, whether or not such interest would be allowed in such Insolvency or Liquidation Proceeding), on all Indebtedness outstanding under the SCF Loan Documents and constituting SCF Obligations (other than contingent obligations or indemnification obligations, in each case for which no claim has been asserted);

(b) indefeasible payment in full in cash of all other SCF Obligations (other than contingent obligations or indemnification obligations, in each case for which no claim has been asserted) that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid;

(c) termination or expiration of all commitments, if any, to extend credit that would constitute SCF Obligations; and

(d) termination or cash collateralization (in an amount and manner reasonably satisfactory to the SCF Agent, but in no event greater than 100% of the aggregate undrawn face amount, plus commissions, fees, and expenses) of all letters of credit issued under the SCF Loan Documents and constituting SCF Obligations.

“Disposition” has the meaning assigned to that term in Section 5.1(b).

“Enforcement” means, collectively or individually for one or both of the SCF Agent and the Notes Agent, when a SCF Default or Note Default, as applicable, has occurred and is continuing, to enforce or attempt to enforce any right or power to repossess, replevy, attach, garnish, levy upon, collect the proceeds of, foreclose or realize in any manner whatsoever its Lien upon, sell, liquidate or otherwise dispose of, or otherwise restrict or interfere with the use of, or exercise any remedies with respect to, any material amount of Collateral, whether by judicial enforcement of any of the rights and remedies

 

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under the SCF Loan Documents, the Note Documents and/or under any applicable law, by self-help repossession, by non-judicial foreclosure sale, lease, or other disposition, by set-off, by notification to account obligors of any Grantor, by any sale, lease, or other disposition implemented by any Grantor following a SCF Default or a Note Default, as applicable, in connection with which the SCF Agent or the Note Agent, as applicable, has agreed to release its Liens on the subject property, or otherwise, but in all cases excluding (i) the establishment of borrowing base reserves, collateral ineligibles, or other conditions for advances, (ii) the changing of advance rates or advance sublimits, (iii) the imposition of a default rate or late fee, (iv) the collection and application of Accounts or other monies deposited from time to time in Deposit Accounts or Securities Accounts, in each case, to the extent constituting SCF Primary Collateral, against the SCF Obligations pursuant to the provisions of the SCF Loan Documents, and (v) the cessation of lending pursuant to the provisions of the SCF Loan Documents, including upon the occurrence of a default on the existence of an overadvance.

“Enforcement Notice” means a written notice delivered, at a time when a SCF Default or Note Default has occurred and is continuing, by either SCF Agent or the Notes Agent to the other announcing that an Enforcement Period has commenced, specifying the relevant event of default, stating the current balance of the SCF Obligations or the Note Obligations, as applicable, and requesting the current balance of the SCF Obligations or Note Obligations, as applicable, owing to the noticed party.

“Enforcement Period” means the period of time following the receipt by either the SCF Agent or the Notes Agent of an Enforcement Notice from the other until the earliest of (i) in the case of an Enforcement Period commenced by the Notes Agent, the Discharge of Note Obligations, (ii) in the case of an Enforcement Period commenced by SCF Agent, the Discharge of SCF Obligations, (iii) the SCF Agent or the Notes Agent (as applicable) agrees in writing to terminate the Enforcement Period, or (iv) the date on which the SCF Default or the Note Default that was the subject of the Enforcement Notice relating to such Enforcement Period has been cured to the satisfaction of the SCF Agent or the Notes Agent, as applicable, or waived in writing.

“Equipment” means: (i) all “equipment” (as defined in Article 9 of the UCC), (ii) all machinery, manufacturing equipment, data processing equipment, computers, office equipment, furnishings, furniture, appliances, “fixtures” (as defined in the UCC) and tools (in each case, regardless of whether characterized as equipment under the UCC) and (iii) all accessions or additions thereto, all parts thereof, whether or not at any time of determination incorporated or installed therein or attached thereto, and all replacements therefore, wherever located, now or hereafter existing, including any fixtures.

“General Intangibles” means all present and future “general intangibles” (as defined in Article 9 of the UCC), but excluding “payment intangibles” (as defined in Article 9 of the UCC), Hedge Agreements and Intellectual Property and any rights thereunder.

 

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“Governmental Authority” means any federal, state, municipal, national or other government, governmental department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity or officer exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government or any court, in each case whether associated with a state of the United States, the United States, or a foreign entity or government.

“Grantors” means the Company, each Company Subsidiary and each other Person that has or may from time to time hereafter execute and deliver a SCF Security Document or a Note Security Document as a grantor of a security interest (or the equivalent thereof).

“Hedge Agreements” means any and all transactions, agreements or documents now existing or hereafter entered into, which provides for an interest rate, credit, commodity or equity swap, cap, floor, collar, forward foreign exchange transaction, currency swap, cross currency rate swap, currency option, or any combination of, or option with respect to, these or similar transactions, entered into with a Lender Counterparty for the purpose of hedging the Grantors’ exposure to fluctuations in interest or exchange rates, loan, credit exchange, security or currency valuations or commodity prices.

“Indebtedness” means and includes all Obligations that constitute “Debt,” “Indebtedness,” “Obligations,” “Liabilities” or any similar term within the meaning of the SCF Credit Agreement or the Indenture, as applicable.

“Indenture” has the meaning assigned to that term in the Recitals to this Agreement.

“Initial Access Date” has the meaning assigned to that term in the definition of the term “Access Period.”

“Initial Notes” has the meaning assigned to that term in the Recitals.

“Initial SCF Credit Agreement” has the meaning assigned to that term in the Recitals.

“Initial Use Date” has the meaning assigned to that term in the definition of the term “Use Period.”

“Insolvency or Liquidation Proceeding” means:

(a) any voluntary or involuntary case or proceeding under the Bankruptcy Code with respect to any Grantor;

(b) any other voluntary or involuntary insolvency, reorganization or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or

 

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other similar case or proceeding with respect to any Grantor or with respect to a material portion of their respective assets;

(c) any composition of liabilities or similar arrangement relating to any Grantor, whether or not under a court’s jurisdiction or supervision;

(d) any liquidation, dissolution, reorganization or winding up of any Grantor, whether voluntary or involuntary, whether or not under a court’s jurisdiction or supervision, and whether or not involving insolvency or bankruptcy; or

(e) any general assignment for the benefit of creditors or any other marshalling of assets and liabilities of any Grantor.

“Instruments” means all present and future “instruments” (as defined in Article 9 of the UCC).

“Intellectual Property” means, collectively, all the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks, the Trademark Licenses and all other intellectual property of the Grantors.

“Inventory” means all present and future “inventory” (as defined in Article 9 of the UCC) including, without limitation, all goods held for sale or lease or to be furnished under contracts of service or so leased or furnished, all raw materials, work in process, finished goods, and materials used or consumed in the manufacture, packing, shipping, advertising, selling, leasing, furnishing or production of such inventory; and all such goods which are returned to or repossessed by any Grantor, all computer programs embedded in any such goods and all accessions thereto and products thereof (in each case, regardless of whether characterized as inventory under the UCC).

“Investment Property” means all present and future “investment property” (as defined in Article 9 of the UCC), including, without limitation, all Capital Stock of Subsidiaries of the Company.

“Lender Counterparty” means each SCF Lender or any Affiliate of a SCF Lender counterparty to a Hedge Agreement (including any Person who is a SCF Lender (and any Affiliate thereof) as of the date hereof but subsequently, after entering into a Hedge Agreement, ceases to be a SCF Lender), including, without limitation, each such Affiliate that enters into a joinder agreement with the SCF Agent.

“Lien” means any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, and any lease in the nature thereof) and any option, trust, UCC financing statement or other preferential arrangement having the practical effect of any of the foregoing.

 

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“Maintenance Covenant” any maintenance or other financial covenant that is tested on an “at all times” basis in relation to the then-financial condition of the Company and/or the Company Subsidiaries.

“Majority SCF Lenders” means the “Majority Lenders” (as defined in the SCF Credit Agreement).

“Mortgaged Premises” means any real property which shall now or hereafter be subject to a Note Mortgage and/or a SCF Mortgage.

“New Agent” has the meaning assigned to that term in Section 5.5.

“New Debt Notice” has the meaning assigned to that term in Section 5.5.

“Non-Conforming Plan of Reorganization” any Plan of Reorganization whose provisions are inconsistent with the provisions of this Agreement, including any plan of reorganization that purports to re-order (whether by subordination, invalidation, or otherwise) or otherwise disregard, in whole or part, the provisions of Article II (including the Lien priorities of Section 2.1), the provisions of Article IV, or the provisions of Article VI.

“Note Claimholders” means, at any relevant time, the holders of Note Obligations at that time, including the Noteholders and the Notes Agent under the Note Documents.

“Note Collateral” means any and all of the assets and property of any Grantor, whether real, personal or mixed, with respect to which a Lien is granted as security for any Note Obligations.

“Note Default” means an “Event of Default” as defined in the Indenture.

“Note Documents” means the Indenture, the Notes, the purchase agreements entered thereunder with respect to issuance of the Notes, and the Collateral Agreements (as defined in the Indenture) and each of the other agreements, documents and instruments providing for or evidencing any other Note Obligation, and any other document or instrument executed or delivered at any time in connection with any Note Obligations, including any intercreditor or joinder agreement among holders of Note Obligations to the extent such are effective at the relevant time, as each may be amended, restated, supplemented, modified, renewed, extended or Refinanced from time to time in accordance with the provisions of this Agreement.

“Note General Intangibles” means all General Intangibles which are not SCF General Intangibles.

“Note Investment Property” means all Investment Property which is not SCF Investment Property.

 

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“Noteholders” means the “Holders” under and as defined in the Indenture.

“Note Mortgages” means a collective reference to each mortgage, deed of trust and any other document or instrument under which any Lien on real property owned or leased by any Grantor is granted to secure any Note Obligations or under which rights or remedies with respect to any such Liens are governed.

“Note Obligations” means all Obligations outstanding under the Notes and the other Note Documents. “Note Obligations” shall include all interest accrued or accruing (or which would, absent commencement of an Insolvency or Liquidation Proceeding, accrue) after commencement of an Insolvency or Liquidation Proceeding in accordance with the rate specified in the relevant Note Document, whether or not the claim for such interest is allowed as a claim in such Insolvency or Liquidation Proceeding.

“Note Primary Collateral” means all now owned or hereafter acquired Note Collateral that constitutes: (a) Equipment; (b) Real Estate Assets; (c) Note General Intangibles; (d) Note Investment Property; (e) documents of title related to Equipment; (f) all letter-of-credit rights arising out of or related to any of the property or interests in property described in this definition; (g) letters of credit transferred to the Notes Agent or any Noteholder, or with respect to which the proceeds thereof have been assigned to the Notes Agent or any Noteholder, or on which the Notes Agent or any Noteholder is named as beneficiary, in each case arising out of or related to the property or interests in property described in this definition; (h) ”supporting obligations” (as defined in Article 9 of the UCC), commercial tort claims or other claims and causes of action, in each case, to the extent related primarily to the foregoing; (i) Note Cash Collateral Account; and (j) substitutions, replacements, accessions, products and proceeds (including, without limitation, insurance proceeds, licenses, royalties, income, payments, claims, damages and proceeds of suit) of any or all of the foregoing.

“Note Security Documents” means any agreement, document or instrument pursuant to which a Lien is granted securing any Note Obligations or under which rights or remedies with respect to such Liens are governed.

“Note Standstill Period” has the meaning set forth in Section 3.1(a)(1).

“Notes” means, collectively, (a) the Initial Notes, (b) the Exchange Notes and the Additional Notes (as such terms are defined in the Indenture), and (c) any other credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation that has been incurred to increase, replace, refinance or refund in whole or in part the Obligations outstanding under the Initial Notes or any other agreement or instrument referred to in this clause, unless such agreement or instrument expressly provides that it is not intended to be and is not a Note, or such agreement or instrument is not a Permitted Refinancing Agreement. Any reference to the Notes hereunder shall be deemed a reference to any Notes then in existence.

 

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“Notes Agent” has the meaning assigned to that term in the Preamble of this Agreement.

“Obligations” means all present and future loans, advances, liabilities, obligations, covenants, duties, and debts from time to time owing by any Grantor to any agent or trustee (including either Agent), the SCF Claimholders, the Note Claimholders or any of them or their respective Affiliates, arising from or in connection with the SCF Loan Documents, the Note Documents or Bank Products, whether for principal, interest or payments for early termination, whether or not evidenced by any note, or other instrument or document, whether arising from an extension of credit, opening of a letter of credit, acceptance, loan, guaranty, indemnification or otherwise, whether direct or indirect, absolute or contingent, due or to become due, primary or secondary, as principal or guarantor, and including all principal, interest, charges, expenses, fees, attorneys’ fees, filing fees and any other sums chargeable to the Grantors, including, without limitation, the “Obligations”, as defined in the SCF Credit Agreement, and the “Indebtedness”, as defined in the Indenture, under the Notes.

“Patent Licenses” means all present and future agreements, whether written or oral, providing for the grant by or to a Grantor of any right to manufacture, use or sell any invention covered by a Patent.

“Patents” means (a) all letters patent of the United States or any other country and all reissues and extensions thereof and (b) all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof.

“Permitted Refinancing” means any Refinancing the governing documentation of which constitutes Permitted Refinancing Agreements.

“Permitted Refinancing Agreements” means, with respect to either the SCF Credit Agreement or the Notes, as applicable, any credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation that has been incurred to increase, replace, refinance or refund in whole or in part the Obligations outstanding under the SCF Credit Agreement or the Notes, as such financing documentation may be amended, restated, supplemented or otherwise modified from time to time in compliance with this Agreement, but specifically excluding any such financing documentation to the extent that it contains, either initially or by amendment or other modification, any material terms, conditions, covenants or defaults other than those that (a) are permitted to exist at the time of the Permitted Refinancing in the SCF Loan Documents or the Note Documents, as applicable; or (b) could be included in the SCF Documents or the Note Documents, as applicable, by an amendment or other modification that would not be prohibited by Section 5.3(c) or Section 5.3(d), as applicable.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

 

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“Plan of Reorganization” means any plan of reorganization, plan of liquidation, agreement for composition, or other type of plan of arrangement proposed in or in connection with any Insolvency or Liquidation Proceeding.

“Pledged Collateral” has the meaning set forth in Section 5.4(a).

“Protective Advances” means amounts expended by the SCF Agent or the Notes Agent to protect or enforce rights in the Collateral.

“Real Estate Asset” means, at any time of determination, any interest (fee, leasehold or otherwise) then owned by the Company or any Grantor in any real property.

“Records” means all present and future “records” (as defined in Article 9 of the UCC).

“Recovery” has the meaning set forth in Section 6.4.

“Refinance” means, in respect of any Indebtedness, to refinance, extend, renew, defease, amend, modify, supplement, restructure, replace, refund or repay, or to issue other indebtedness, in exchange or replacement for, such Indebtedness, in any case in whole or in part. “Refinanced” and “Refinancing” shall have correlative meanings.

“SCF Agent” has the meaning assigned to that term in the Recitals to this Agreement.

“SCF Claimholders” means, at any relevant time, the holders of SCF Obligations at that time, including the SCF Lenders and the SCF Agent under the SCF Loan Documents.

“SCF Collateral” means all of the assets and property of any Grantor, whether real, personal or mixed, with respect to which a Lien is granted as security for any SCF Obligations.

“SCF Commitments” means the “Commitments” (as defined in the SCF Credit Agreement).

“SCF Credit Agreement” means collectively, (a) the Initial SCF Credit Agreement and (b) any other credit agreement or credit agreements, one or more debt facilities, and/or commercial paper facilities, in each case, with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from (or sell such receivables to) such lenders against such receivables), letters of credit, bankers’ acceptances, or other borrowings, that has been incurred to increase, replace (whether upon or after termination or otherwise), refinance or refund in whole or in part from time to time the Obligations outstanding under the Initial SCF Credit Agreement or any other agreement or instrument referred to in this clause, whether or not such increase,

 

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replacement, refinancing or refunding occurs (i) with the original parties thereto, (ii) on one or more separate occasions or (iii) simultaneously or not with the termination or repayment of the Initial SCF Credit Agreement or any other agreement or instrument referred to in this clause, unless such agreement or instrument expressly provides that it is not intended to be and is not a SCF Credit Agreement, or such agreement or instrument is not a Permitted Refinancing Agreement. Any reference to the SCF Credit Agreement hereunder shall be deemed a reference to any SCF Credit Agreement then in existence.

“SCF Default” means an “Event of Default” (as defined in the SCF Credit Agreement).

“SCF General Intangibles” means all General Intangibles other than any uncertificated securities representing Capital Stock of any Subsidiary of the Company or the Guarantors (as defined in the Indenture) and each Person in which the Company or a Guarantor has a direct interest.

“SCF Investment Property” means all Investment Property other than Capital Stock of any Subsidiary of the Company or the Guarantors (as defined in the Indenture) and each Person in which the Company or a Guarantor has a direct interest.

“SCF Lenders” means the “Lenders” under and as defined in the SCF Loan Documents.

“SCF Loan Documents” means the SCF Credit Agreement and the Loan Documents (as defined in the SCF Credit Agreement), including Hedge Agreements and other Bank Products, and each of the other agreements, documents and instruments providing for or evidencing any other SCF Obligation, and any other document or instrument executed or delivered at any time in connection with any SCF Obligations, including any intercreditor or joinder agreement among holders of SCF Obligations, to the extent such are effective at the relevant time, as each may be amended, restated, supplemented, modified, renewed, extended or Refinanced from time to time in accordance with the provisions of this Agreement.

“SCF Mortgages” means a collective reference to each mortgage, deed of trust and other document or instrument under which any Lien on real property owned or leased by any Grantor is granted to secure any SCF Obligations or under which rights or remedies with respect to any such Liens are governed.

“SCF Obligations” means all Obligations outstanding under the SCF Credit Agreement and the other SCF Loan Documents, including any Bank Products. “SCF Obligations” shall include all interest accrued or accruing (or which would, absent commencement of an Insolvency or Liquidation Proceeding, accrue) after commencement of an Insolvency or Liquidation Proceeding in accordance with the rate specified in the relevant SCF Loan Document whether or not the claim for such interest is allowed as a claim in such Insolvency or Liquidation Proceeding.

 

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“SCF Primary Collateral” means all now owned or hereafter acquired SCF Collateral that constitutes: (a) Accounts, other than “payment intangibles” (as defined in Article 9 of the UCC) which constitute identifiable proceeds of Note Primary Collateral; (b) all Inventory or documents of title for any Inventory; (c) Deposit Accounts, Securities Accounts (including all cash, marketable securities and other funds held in or on deposit in either of the foregoing), Instruments and Chattel Paper; provided, however, that to the extent that Instruments or Chattel Paper constitute identifiable proceeds of Note Primary Collateral or other identifiable proceeds of Note Primary Collateral are deposited or held in any such Deposit Accounts or Securities Accounts, then (as provided in Section 3.5 below) such Instruments, Chattel Paper or other identifiable proceeds shall be treated as Note Primary Collateral; (d) Intellectual Property; (e) SCF Investment Property; (f) all letter-of-credit rights arising out of or related to any of the property or interests in property described in this definition or which are otherwise included in the Borrowing Base (as defined in the SCF Credit Agreement); (g) letters of credit transferred to the SCF Agent or any SCF Lender, or with respect to which the proceeds thereof have been assigned to the SCF Agent or any SCF Lender, or on which the SCF Agent or any SCF Lender is named as beneficiary, in each case arising out of or related to the property or interests in property described in this definition or which are otherwise included in the Borrowing Base (as defined in the SCF Credit Agreement); (h) credit insurance with respect to any Accounts; (i) Records and related data processing software (owned by any Grantor or in which it has an interest); (j) “supporting obligations” (as defined in Article 9 of the UCC), commercial tort claims or other claims and causes of action, in each case, to the extent related primarily to any of the foregoing; (k) other SCF General Intangibles; and (l) substitutions, replacements, accessions, products and proceeds (including, without limitation, insurance proceeds, licenses, royalties, income, payments, claims, damages and proceeds of suit) of any or all of the foregoing.

“SCF Security Documents” means any agreement, document or instrument pursuant to which a Lien is granted securing any SCF Obligations or under which rights or remedies with respect to such Liens are governed.

“SCF Standstill Period” has the meaning set forth in Section 3.2(a)(1).

“Secured Parties” means the SCF Claimholders and the Note Claimholders.

“Securities Accounts” means all present and future “securities accounts” (as defined in Article 8 of the UCC), including all monies, “uncertificated securities,” and “securities entitlements” (as defined in Article 8 of the UCC) contained therein.

“Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company, association, joint venture or other business entity of which more than 50% of the total voting power of shares of stock or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management

 

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and policies thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof.

“Trademark License” means any present or future agreement, written or oral, providing for the grant by or to a grantor of any right to use any Trademark.

“Trademarks” means (a) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers, and the goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise and (b) all renewals thereof.

“UCC” means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect in any applicable jurisdiction.

“Use Period” means, with respect to the Note Primary Collateral (exclusive of Note Primary Collateral located on each parcel of the Mortgaged Premises), the period, after the commencement of an Enforcement Period by the SCF Agent, which begins on the earlier of (a) the day on which the SCF Agent provides the Notes Agent with an Enforcement Notice and (b) the fifth Business Day after the Notes Agent provides the SCF Agent with notice that the Notes Agent (or its agent) has obtained possession or control of such Collateral and ends on the earliest of (i) the 120^th day after the date (the “Initial Use Date”) on which the SCF Agent initially obtains the ability to take physical possession of, remove, or otherwise control physical access to, or actually uses, such Note Primary Collateral plus such number of days, if any, after the Initial Use Date that it is stayed or otherwise prohibited by law or court order from exercising remedies with respect to such Note Primary Collateral, (ii) the date on which all or substantially all of the SCF Primary Collateral is sold, collected or liquidated, (iii) the date on which the Discharge of SCF Obligations occurs, and (iv) the date on which the SCF Default that was the subject of the Enforcement Notice relating to such Enforcement Period has been cured to the satisfaction of the SCF Agent or waived in writing.

1.2 Terms Generally. The definitions of terms in this Agreement shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise:

(a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented, modified, renewed or extended;

 

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(b) any reference herein to any Person shall be construed to include such Person’s permitted successors and assigns;

(c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof;

(d) all references herein to Sections or Articles shall be construed to refer to Sections or Articles of this Agreement;

(e) all uncapitalized terms have the meanings, if any, given to them in the UCC, as now or hereafter enacted in the State of New York (unless otherwise specifically defined herein);

(f) 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;

(g) any reference herein to a Person in a particular capacity or capacities excludes such Person in any other capacity or individually;

(h) any reference herein to any law shall be construed to refer to such law as amended, modified, codified, replaced, or re-enacted, in while or part, and in effect on the pertinent date; and

(i) in the compilation of periods of time hereunder from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each means “to, but not through.”

 

II.

LIEN PRIORITIES.

2.1 Relative Priorities. Irrespective of the date, time, method, manner or order of grant, attachment or perfection of any Liens securing the Note Obligations granted on the Collateral or of any Liens securing the SCF Obligations granted on the Collateral (including, in each case, irrespective of whether any such Lien is granted (or secures Obligations relating to the period) before or after the commencement of any Insolvency or Liquidation Proceeding) and notwithstanding any provision of any UCC, or any other applicable law, or the SCF Loan Documents or the Note Documents or any defect or deficiencies in, or failure to attach or perfect, the Liens securing the SCF Obligations or the Note Obligations or any other circumstance whatsoever, the SCF Agent, on behalf of the SCF Claimholders, and the Notes Agent, on behalf of the Note Claimholders, hereby agree that:

(a) any Lien of the SCF Agent on the SCF Primary Collateral securing the SCF Obligations, whether such Lien is now or hereafter held by or on behalf of the SCF Agent or any other SCF Claimholder or any other agent or trustee therefor, regardless of how or when acquired, whether by grant, possession, statute, operation of law, subrogation

 

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or otherwise, shall be senior in all respects and prior to any Lien on the SCF Primary Collateral securing any Note Obligations or any other Obligations owing to or otherwise in favor of the Note Claimholders; and

(b) any Lien of the Notes Agent on the Note Primary Collateral securing the Note Obligations, whether such Lien is now or hereafter held by or on behalf of the Notes Agent, any other Note Claimholder or any other agent or trustee therefor, regardless of how or when acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be senior in all respects to all Liens on the Note Primary Collateral securing any SCF Obligations or any other Obligations owing to or otherwise in favor of the SCF Claimholders.

2.2 Prohibition on Contesting Liens. Each of the Notes Agent, on behalf of each Note Claimholder, and the SCF Agent, on behalf of each SCF Claimholder, consents to the granting of Liens in favor of the other to secure the SCF Obligations and the Note Obligations, as applicable, and agrees that no Claimholder will be entitled to, and it will not (and shall be deemed to have irrevocably, absolutely, and unconditionally waived any right to), contest (directly or indirectly) or support (directly or indirectly) any other Person in contesting, in any proceeding (including any Insolvency or Liquidation Proceeding): (a) the attachment, perfection, priority, validity or enforceability of any Lien in the Collateral held by or on behalf of any of the SCF Claimholders to secure the payment of the SCF Obligations or any of the Note Claimholders to secure the payment of the Note Obligations, (b) the priority, validity or enforceability of the SCF Obligations or the Note Obligations, including the allowability or priority of the Note Obligations or the SCF Obligations, as applicable, in any Insolvency or Liquidation Proceeding, or (c) the validity or enforceability of the provisions of this Agreement; provided that nothing in this Agreement shall be construed to prevent or impair the rights of the SCF Agent, on behalf of the SCF Claimholders, or the Notes Agent, on behalf of the Note Claimholders, to enforce this Agreement, including the provisions of this Agreement relating to the priority of the Liens securing the Obligations as provided in Sections 2.1, 3.1, 3.2 and 6.1.

2.3 No New Liens. So long as neither the Discharge of SCF Obligations nor the Discharge of Note Obligations has occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against one or more of the Company or any other Grantor, the parties hereto agree, subject to Article VI hereof, that the Company shall not, and shall not permit any other Grantor to:

(a) other than in connection with a satisfaction and discharge or defeasance of the Note Obligations pursuant to Section 8.02 or Section 11.01 of the Indenture in effect as of the date hereof, grant or permit any additional Liens on any asset or property to secure any Obligations owing to or otherwise in favor of the Note Claimholders unless it has granted or concurrently grants a Lien on such asset or property to secure the SCF Obligations; or

(b) grant or permit any additional Liens on any asset or property to secure any SCF Obligations owing to or otherwise in favor of the SCF Claimholders unless it has granted or concurrently grants a Lien on such asset or property to secure the Note Obligations.

 

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To the extent any additional Liens are granted on any asset or property pursuant to this Section 2.3, the priority of such additional Liens shall be determined in accordance with Section 2.1. In addition, to the extent that the foregoing provisions are not complied with for any reason, without limiting any other rights and remedies available hereunder, the SCF Agent on behalf of the SCF Claimholders and the Notes Agent, on behalf of Note Claimholders, agree that any amounts received by or distributed to any of them pursuant to or as a result of Liens granted in contravention of this Section 2.3 shall be subject to Section 4.2.

2.4 Similar Liens and Agreements. The parties hereto agree that it is their intention that the SCF Collateral and the Note Collateral be identical except as provided in Article VI. In furtherance of the foregoing and of Section 8.8, the parties hereto agree, subject to the other provisions of this Agreement:

(a) upon request by the SCF Agent or the Notes Agent, to cooperate in good faith (and to direct their counsel to cooperate in good faith) from time to time in order to determine the specific items included in the SCF Collateral and the Note Collateral and the steps taken to perfect their respective Liens thereon and the identity of the respective parties obligated under the SCF Loan Documents and the Note Documents; and

(b) that the SCF Security Documents and the Note Security Documents and guarantees for the SCF Obligations and the Note Obligations, subject to Section 5.3(b), shall be in all material respects the same forms of documents in respect of the extent of the Collateral securing the respective Obligations (but for this Agreement) and the remedies in respect thereof.

 

III.

ENFORCEMENT.

3.1 Exercise of Remedies — Restrictions on the Notes Agent and the Note Claimholders.

(a) Until the Discharge of SCF Obligations has occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against any Grantor, subject to the limited extent provided in Article VI, the Notes Agent and the other Note Claimholders:

(1) will not be entitled to exercise or seek to exercise, and will not exercise or seek to exercise (but instead shall be deemed to have hereby irrevocably, absolutely and unconditionally waived for the duration of the Note Standstill Period), any rights, powers, or remedies with respect to any SCF Primary Collateral (including (A) any right of set-off or any right under any Account Agreement, landlord waiver or bailee’s letter or similar agreement or arrangement to which the Notes Agent or any Note Claimholder is a party, (B) any right to undertake self-help re-possession or non-judicial disposition of any such

 

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Collateral (including any partial or complete strict foreclosure), and/or (C) any right to institute, prosecute, or otherwise maintain any action or proceeding with respect to such rights, powers or remedies (including any action of foreclosure)); provided, however, that the Notes Agent may exercise any or all of such rights, powers, or remedies after a period of at least 180 days has elapsed since the later of: (i) the date on which the Notes Agent declared the existence of a Note Default, accelerated (to the extent such amount was not already due and owing) the payment of the principal amount of all Note Obligations, and demanded payment thereof and (ii) the date on which the SCF Agent received the Enforcement Notice from the Notes Agent relating to such action; provided, further, however, that neither the Notes Agent nor any other Note Claimholder shall be entitled to exercise (and shall not exercise) any rights, powers, or remedies with respect to the SCF Primary Collateral if, notwithstanding the expiration of such 180 day period, the SCF Agent or the other SCF Claimholders (A) shall have commenced and be diligently pursuing the exercise of their rights, powers, or remedies with respect to all or any material portion of such Collateral (prompt notice of such exercise to be given to the Notes Agent), or (B) shall have been stayed by operation of law or any court order from pursuing any such exercise of remedies (the period during which the Notes Agent and the other Note Claimholders may not pursuant to this Section 3.1(a)(1) exercise any rights, powers, or remedies with respect to the SCF Primary Collateral, the “Note Standstill Period”);

(2) will not, directly or indirectly, contest, protest or object to or hinder any judicial or non-judicial foreclosure proceeding or action (including any partial or complete strict foreclosure) brought by the SCF Agent or any other SCF Claimholder relating to the SCF Primary Collateral or any other exercise by the SCF Agent or any other SCF Claimholder of any other rights, powers and remedies relating to the SCF Primary Collateral, including any sale, lease, exchange, transfer, or other disposition of the SCF Primary Collateral, whether under the SCF Loan Documents, applicable law, or otherwise; and

(3) subject to their rights under clause (a)(1) above (and under clause (6) of Section 3.1(c)), will not object to the forbearance by the SCF Agent or the SCF Claimholders from bringing or pursuing any Enforcement with respect to the SCF Primary Collateral;

(4) except as may be permitted in Section 3.1(c), irrevocably, absolutely, and unconditionally waive any and all rights the Notes Agent or the Note Claimholders may have as a junior lien creditor or otherwise to object (and seek or be awarded any relief of any nature whatsoever based on any such objection) to the manner in which the SCF Agent or the SCF Claimholders (a) enforce or collect (or attempt to collect) the SCF Obligations or (b) realize or seek to realize upon or otherwise enforce the Liens in and to the SCF Primary Collateral securing the SCF Obligations, regardless of whether any action or failure to act by or on behalf of the SCF Agent or SCF Claimholders is adverse to the interest of the Notes Agent or the Note Claimholders. Without limiting the generality of the foregoing, the Note Claimholders shall be deemed to have hereby irrevocably, absolutely, and unconditionally waived any right to object (and seek or be awarded any relief of any nature whatsoever based on any such objection), at any time prior or subsequent to

 

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any disposition of any of the SCF Primary Collateral, on the ground(s) that any such disposition of SCF Primary Collateral (a) would not be or was not “commercially reasonable” within the meaning of any applicable UCC and/or (b) would not or did not comply with any other requirement under any applicable UCC or under any other applicable law governing the manner in which a secured creditor (including one with a Lien on real property) is to realize on its collateral; and

(5) subject to their rights under clause (a)(1) above and except as may be permitted in Section 3.1(c), acknowledge and agree that no covenant, agreement or restriction contained in the Note Security Documents or any other Note Document (other than this Agreement) shall be deemed to restrict in any way the rights and remedies of the SCF Agent or the SCF Claimholders with respect to the SCF Primary Collateral as set forth in this Agreement and the SCF Loan Documents;

provided, however, that, in the case of (1), (2) and (3) above, the Liens granted to secure the Note Obligations of the Note Claimholders shall attach to any proceeds resulting from actions taken by the SCF Agent or any SCF Claimholder with respect to the SCF Primary Collateral in accordance with this Agreement after application of such proceeds to the extent necessary to meet the requirements of a Discharge of SCF Obligations.

(b) Until the earlier of Discharge of SCF Obligations, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against any Grantor, the SCF Agent and the other SCF Claimholders shall have the right to enforce rights, exercise powers or remedies (including set-off and the right to credit bid their debt) and, in connection therewith (including voluntary Dispositions of SCF Primary Collateral by the respective Grantors after a SCF Default) make determinations regarding the release, disposition, or restrictions with respect to the SCF Primary Collateral without any consultation with or the consent of the Notes Agent or any Note Claimholder; provided, however, that the Lien securing the Note Obligations shall remain on the proceeds (other than those properly applied to the SCF Obligations in accordance with the SCF Loan Documents) of such Collateral released or disposed of subject to the relative priorities described in Section 2. In exercising rights, powers, and remedies with respect to the SCF Primary Collateral, the SCF Agent and the SCF Claimholders may enforce the provisions of the SCF Loan Documents and exercise rights, powers, and/or remedies thereunder and/or under applicable law or otherwise, all in such order and in such manner as they may determine in the exercise of their sole discretion. Such exercise and enforcement shall include the rights of an agent appointed by them to sell or otherwise dispose of the SCF Primary Collateral upon foreclosure, to incur expenses in connection with such sale or disposition, and to exercise all the rights and remedies of a secured creditor under the UCC and of a secured creditor under the Bankruptcy Laws of any applicable jurisdiction.

(c) Notwithstanding anything to the contrary contained herein, the Notes Agent and any Note Claimholder may:

(1) file a claim or statement of interest with respect to the Note Obligations; provided that an Insolvency or Liquidation Proceeding has been commenced by or against any Grantor;

 

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(2) take any action (not adverse to the priority status of the Liens on the SCF Primary Collateral, or the rights of the SCF Agent or any of the SCF Claimholders to exercise rights, powers, and/or remedies in respect thereof, including those under Article VI) in order to create, perfect, preserve or protect (but, subject to the provisions of Section 3.1(a) hereof, not enforce) its Lien on any of the SCF Primary Collateral;

(3) file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any person objecting to or otherwise seeking the disallowance of the claims of the Note Claimholders, including any claims secured by the SCF Primary Collateral, if any, in each case in accordance with the terms of this Agreement;

(4) file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Grantors arising under either any Insolvency or Liquidation Proceeding or applicable non-bankruptcy law, in each case not inconsistent with the terms of this Agreement or applicable law (including the Bankruptcy Laws of any applicable jurisdiction);

(5) vote on any Plan of Reorganization, file any proof of claim, make other filings and make any arguments, obligations, and motions (including in support of or opposition to, as applicable, the confirmation or approval of any Plan of Reorganization) that are, in each case, in accordance with the terms of this Agreement. Without limiting the generality of the foregoing or of the other provisions of this Agreement, any vote to accept, and any other act to support the confirmation or approval of, any Non-Conforming Plan of Reorganization shall be inconsistent with and accordingly, a violation of the terms of this Agreement, and the SCF Agent shall be entitled to have any such vote to accept a Non-Conforming Plan of Reorganization changed and any such support of any Non-Conforming Plan of Reorganization withdrawn; and

(6) exercise any of its rights or remedies with respect to any of the Collateral after the termination of the Note Standstill Period to the extent permitted by Section 3.1(a)(1).

The Notes Agent, on behalf of the Note Claimholders, agrees that any Note Claimholder will not be entitled to, and will not, take or receive any SCF Primary Collateral or any proceeds of such Collateral in connection with the exercise of any right, power, or remedy (including set-off) with respect to any such Collateral in its capacity as a creditor in violation of this Agreement. Without limiting the generality of the foregoing, unless and until the Discharge of SCF Obligations has occurred, except as expressly provided in Sections 3.1(a)(1), 6.7 and clause (6) of this Section 3.1(c), the sole right of the Notes Agent and the Note Claimholders with respect to the SCF Primary Collateral is to hold a Lien on such Collateral pursuant to the

 

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Note Security Documents for the period and to the extent granted therein and to receive a share of the proceeds thereof, if any, after the Discharge of SCF Obligations has occurred.

(d) Except as otherwise specifically set forth in Sections 3.1(a), 3.4 and 3.5 and Article 6, the Notes Agent and the Note Claimholders may exercise rights and remedies as unsecured creditors against any Grantor and may exercise rights and remedies with respect to the Note Primary Collateral, in each case, in accordance with the terms of the Note Documents and applicable law; provided, however, that in the event that the Notes Agent or any Note Claimholder becomes a judgment Lien creditor in respect of SCF Primary Collateral as a result of its enforcement of its rights as an unsecured creditor with respect to the Note Obligations or any other Obligations, such judgment Lien shall be subject to the terms of this Agreement for all purposes (including in relation to the SCF Obligations) as the other Liens securing the Note Obligations or any other Obligations are subject to this Agreement.

(e) Except as provided in Section 5.3(d), nothing in this Agreement shall prohibit the receipt by the Notes Agent or any other Note Claimholders of the required payments of interest, principal and other amounts owed in respect of the Note Obligations so long as such receipt is not the direct or indirect result of the