INTERCREDITOR
AGREEMENT dated as of December 29, 2006, among BANK OF
AMERICA, N.A. (“ B of A ”), as agent under the
Bank Documents, THE BANK OF NEW YORK TRUST COMPANY, N.A. (“
BONY ”), as trustee (in such capacity, the “
Trustee ”) and collateral agent under the Noteholder
Documents, NEENAH FOUNDRY COMPANY, a Wisconsin corporation (the
“ Company ”), and each other Grantor listed on
Schedule I hereto.
A. The
Company is party to the Amended and Restated Loan and Security
Agreement dated as of December 29, 2006 (as amended, restated,
supplemented, waived, modified or Refinanced from time to time, the
“ Senior Credit Agreement ”), among the Company
and certain Subsidiaries of the Company, as borrowers, the lenders
party thereto from time to time, B of A , as agent for the lenders,
Credit Suisse Securities (USA), LLC, as syndication agent, and Banc
of America Securities, LLC and Credit Suisse Securities (USA), LLC,
as co-lead arrangers and book managers. The Senior Credit Agreement
has been designated by the Company to be included in the definition
of “Credit Agreement” under the Senior Secured Notes
Indenture.
B. The
Company is party to the Indenture dated as of December 29,
2006 (as amended, restated, supplemented, modified or Refinanced
from time to time, the “ Senior Secured Notes
Indenture ”), among the Company, as Issuer (in such
capacity, the “ Issuer ”), the Guarantors (as
defined therein) thereunder and the Trustee.
Accordingly, 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:
1.1. Defined
Terms. As used in this Agreement, the following terms have the
meanings specified below:
“
Account ” shall have the meaning set forth in the
UCC.
“
Agents ” shall mean the Bank Agent and the Noteholder
Agent.
“
Agreement ” shall mean this Agreement, as amended,
renewed, extended, supplemented or otherwise modified from time to
time in accordance with the terms hereof.
“ B of
A ” shall have the meaning set forth in the
preamble.
“ Bank
Agent ” shall mean (i) B of A, in its capacity as
agent for the lenders under the Senior Credit Agreement and the
other Bank Documents entered into pursuant thereto, (ii) the
administrative agent and collateral agent under such Bank Documents
as may be entered into pursuant to any Refinancing of the foregoing
permitted hereunder and (iii) with respect to both
(i) and (ii), its successors and permitted assigns.
“ Bank
Cash Management Obligations ” shall mean any Cash
Management Obligations that are (i) owed to a Person that is a
lender or agent under the Senior Credit Agreement or an affiliate
of such a lender or agent at the time of entry into such Cash
Management Obligations and (ii) secured by any Common
Collateral pursuant to the Bank Collateral Documents.
“ Bank
Collateral ” shall mean all of the assets of each
Grantor, whether real, personal or mixed, with respect to which a
Lien is granted as security for any Bank Obligation.
“ Bank
Collateral Documents ” shall mean any agreement, document
or instrument pursuant to which a Lien is now or hereafter granted
securing any Bank Obligations or under which rights or remedies
with respect to such Liens are at any time governed.
“ Bank
Documents ” shall mean the Senior Credit Agreement and
the other Loan Documents (as defined in the Senior Credit
Agreement) and each of the other agreements, documents and
instruments (including each agreement, document or instrument
providing for or evidencing a Bank Hedging Obligation or Bank Cash
Management Obligation) providing for or evidencing any Bank
Obligation, and any other document or instrument executed or
delivered at any time in connection with any Bank Obligations under
the Senior Credit Agreement and the Loan Documents (as defined in
the Senior Credit Agreement), including any intercreditor or
joinder agreement among holders of Bank Obligations, in each case
to the extent such are effective at the relevant time and as each
may be amended, restated, supplemented, modified, renewed, extended
or Refinanced from time to time in accordance with the provisions
of this Agreement.
“ Bank
Hedging Obligations ” shall mean any Hedging Obligations
that are (i) owed to a Person that is a lender or agent under
the Senior Credit Agreement or an affiliate of such a lender or
agent at the time of entry into such Hedging Obligations and
(ii) secured by any Common Collateral pursuant to the Bank
Collateral Documents.
“ Bank
Obligations ” shall mean all Obligations outstanding
under the Senior Credit Agreement and the other Bank Documents
(including, without limitation, all Obligations of the Company and
its Subsidiaries in respect of Bank Hedging Obligations or Bank
Cash Management Obligations. To the extent any payment with respect
to the Bank Obligations (whether by or on behalf of any Grantor, as
proceeds of security, enforcement of any right of set-off or
otherwise) is declared to be fraudulent or preferential in any
respect, set aside or required to be paid to a debtor in
possession, trustee, receiver or similar Person, then the
obligation or part thereof originally intended to be satisfied
shall be deemed to be reinstated and outstanding as if such payment
had not occurred and no Discharge of Bank Obligations shall be
deemed to have occurred with respect to such amount. “Bank
Obligations” shall also include all interest, fees, costs and
other charges 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 Bank Document,
whether or not the claim for such interest is allowed as a claim in
such Insolvency or Liquidation Proceeding.
“ Bank
Outstandings Amount ” shall mean, at any time, an amount
equal to the sum (without duplication) of (x) the aggregate
principal amount of all loans outstanding at such
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time under the
Senior Credit Agreement and the other Bank Documents then in effect
and (y) the aggregate face amount of all unreimbursed letters
of credit issued at such time under the Senior Credit Agreement and
the other Bank Documents then in effect.
“ Bank
Priority Collateral ” shall mean the following assets of
each Grantor:
(i) all
Accounts (but excluding any Accounts consisting of a right to
receive payment from a sale, assignment, transfer, lease, license
or other disposition of property constituting Noteholder Priority
Collateral);
(iii) all
Patterns and Core Boxes Collateral;
(iv) to the
extent governing or involving any of the items referred to in
preceding clauses (i) through (iii), all Chattel Paper,
Documents, General Intangibles, Instruments and Letter-of-Credit
Rights, provided that to the extent any of the foregoing
also relates to Noteholder Priority Collateral, only that portion
related to the items referred to in preceding clauses
(i) through (iii) shall be included in the Bank Priority
Collateral;
(v) to the
extent relating to any of the items referred to in preceding
clauses (i) through (iv), all Supporting Obligations,
provided that to the extent any of the foregoing also
relates to Noteholder Priority Collateral, only that portion
related to the items referred to in preceding clauses
(i) through (iv) shall be included in the Bank Priority
Collateral;
(vi) all
Deposit Accounts and all deposits of cash, checks, other negotiable
instruments, funds and other evidences of payments held therein or
credited thereto (but excluding (x) all deposits of cash,
checks, other negotiable instruments, funds, and other evidences of
payments constituting identifiable Proceeds of Noteholder Priority
Collateral and (y) any Noteholder Priority Collateral Proceeds
Account and all cash, checks, other negotiable instruments, funds,
other evidences of payments, securities, financial assets or other
property held therein or credited thereto);
(vii) all
loans payable by a Grantor to any other Grantor to the extent made
using the direct proceeds of advances under the Senior Credit
Agreement;
(viii) all
policies of business interruption insurance;
(ix) all
books and Records (including, without limitation, databases,
customer lists and engineer drawings), in each case whether
tangible or electronic and to the extent embodying, incorporating
or otherwise relating to any of the foregoing; and
(x) all Bank
Priority Proceeds.
“ Bank
Priority Proceeds ” shall mean any and all Proceeds of
the Bank Priority Collateral described in clauses (i) through
(ix) of the definition thereof, but excluding in all instances
outside of an Insolvency or Liquidation Proceeding any property
that is acquired with
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Cash Proceeds
of such Bank Priority Collateral and does not otherwise constitute
Bank Priority Collateral.
“ Bank
Secured Parties ” shall mean the Persons holding Bank
Obligations, including the Bank Agent.
“
Bankruptcy Law ” shall mean Title 11 of the United
States Code and any similar Federal, state or foreign law for the
relief of debtors.
“
BONY ” shall have the meaning set forth in the
preamble.
“ Cash
Management Obligations ” shall mean, with respect to any
Person, all obligations, whether now owing or hereafter arising, of
such Person in respect of overdrafts and related liabilities or
arising from cash management services (including treasury,
depositary, overdraft, credit or debit card, electronic funds
transfer, netting, automatic clearing house transfers of funds or
any similar transactions).
“ Cash
Proceeds ” shall have the meaning set forth in the
UCC.
“ Chattel
Paper ” shall have the meaning set forth in the
UCC.
“
Class ” refers, when used with respect to any Secured
Obligations or Secured Parties, to whether the same are Bank
Obligations or Bank Secured Parties, on the one hand, or Noteholder
Obligations or Noteholder Secured Parties, on the other
hand.
“
Class Discharge ” shall mean a Discharge of Bank
Obligations or a Discharge of Noteholder Obligations.
“ Common
Collateral ” shall mean all of the assets of any Grantor,
whether real, personal or mixed, constituting both Bank Collateral
and Noteholder Collateral.
“
Company ” shall have the meaning set forth in the
preamble.
“
Comparable Second-Lien Collateral Document ” shall
mean, in relation to any Common Collateral subject to any Lien
created under any First-Lien Collateral Document, those Second-Lien
Collateral Documents that create a Lien on the same Common
Collateral, granted by the same Grantor.
“ Deposit
Account ” shall have the meaning set forth in the
UCC.
“ Deposit
Account Collateral ” shall mean that part of the Common
Collateral comprised of or contained in Deposit Accounts or
Securities Accounts.
“ DIP
Financing ” shall have the meaning set forth in
Section 6.1.
“
Discharge of Bank Obligations ” shall mean
(i) 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
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Insolvency or
Liquidation Proceeding) and premium (if any) on, all Indebtedness
outstanding under the Bank Documents, (ii) payment in full in
cash of all other Bank Obligations that are due and payable or
otherwise accrued and owing at or prior to the time such principal
and interest are paid, (iii) termination or cash
collateralization of in an amount and on terms satisfactory to the
Bank Agent, or other provision for in a manner satisfactory to the
Bank Agent and the issuing bank under the Senior Credit Agreement,
all letters of credit issued under the Bank Documents, (iv)
termination or expiration of all commitments to lend and all
obligations to lend and all obligations to issue letters of credit
under the Bank Documents, (v) termination and payment in full
in cash of all termination fees and other amounts due in respect of
Bank Hedging Obligations, or cash collateralization or the
provision of other security in respect thereof in an amount and on
terms satisfactory to the Bank Agent and (vi) any costs,
expenses and contingent indemnification obligations not yet due and
payable but with respect to which a claim has been threatened or
asserted in writing under any Bank Documents, are backed by letters
of credit or cash collateral in an amount and on terms satisfactory
to Bank Agent.
“
Discharge of First-Lien Obligations ” shall mean
(i) in respect of Bank Priority Collateral, the Discharge of
Bank Obligations and (ii) in respect of Noteholder Priority
Collateral, the Discharge of Noteholder Obligations.
“
Discharge of Noteholder Obligations ” shall mean
(i) 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) and
premium (if any) on, all Indebtedness outstanding under the
Noteholder Documents and (ii) payment in full in cash of all
other Noteholder Obligations that are due and payable or otherwise
accrued and owing at or prior to the time such principal and
interest are paid.
“
Discharge of Second-Lien Obligations ” shall mean
(i) in respect of Bank Priority Collateral, the Discharge of
Noteholder Obligations and (ii) in respect of Noteholder
Priority Collateral, the Discharge of Bank Obligations.
“
Documents ” shall have the meaning set forth in the
UCC.
“ Finance
Documents ” shall mean the Bank Documents and the
Noteholder Documents.
“
First-Lien Agent ” shall mean (i) with respect to
Bank Priority Collateral, the Bank Agent and (ii) with respect
to Noteholder Priority Collateral, the Noteholder Agent.
“
First-Lien Collateral ” shall mean, for purposes of
determining the respective rights and obligations of either Class
of Secured Parties as First-Lien Secured Parties or Second-Lien
Secured Parties under any provision of this Agreement, such portion
of the Common Collateral with respect to which the Secured Parties
of such Class are First-Lien Secured Parties or Second-Lien Secured
Parties, as the context may require.
“
First-Lien Collateral Documents ” shall mean
(i) with respect to Bank Priority Collateral, the Bank
Collateral Documents and (ii) with respect to Noteholder
Priority Collateral, the Noteholder Collateral
Documents.
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“
First-Lien Documents ” shall mean (i) with
respect to Bank Priority Collateral, the Bank Documents and
(ii) with respect to Noteholder Priority Collateral, the
Noteholder Documents.
“
First-Lien Obligations ” shall mean (i) in
respect of Bank Priority Collateral, the Bank Obligations and
(ii) in respect of Noteholder Priority Collateral, the
Noteholder Obligations.
“
First-Lien Secured Parties ” shall mean (i) with
respect to Bank Priority Collateral, the Bank Secured Parties and
(ii) with respect to Noteholder Priority Collateral, the
Noteholder Secured Parties.
“ General
Intangibles ” shall have the meaning set forth in the
UCC.
“
Grantors ” shall mean the Company and each Subsidiary
of the Company that has executed and delivered a Bank Collateral
Document or a Noteholder Collateral Document.
“ Hedging
Obligations ” shall mean, with respect to any Person, all
obligations and liabilities, whether now owing or hereafter
arising, of such Person in respect of (i) currency exchange,
interest rate or commodity swap agreements, currency exchange,
interest rate or commodity cap agreements and currency exchange,
interest rate or commodity collar agreements and (ii) other
agreements or arrangements designed to protect such Person against
fluctuations in currency exchange, interest rates and/or commodity
prices.
“
Indebtedness ” shall mean and include all obligations
that constitute “Debt” or “Indebtedness”
within the meaning of the Senior Secured Notes Indenture and the
Senior Credit Agreement as in effect on the date hereof.
“
Insolvency or Liquidation Proceeding ” shall mean
(i) any voluntary or involuntary case or proceeding under any
Bankruptcy Law with respect to any Grantor, (ii) any other
voluntary or involuntary insolvency, reorganization or bankruptcy
case or proceeding, or any receivership, liquidation,
reorganization or other similar case or proceeding with respect to
any Grantor or with respect to any of its assets, (iii) any
liquidation, dissolution, reorganization or winding up of any
Grantor whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy or (iv) any assignment for
the benefit of creditors or any other marshalling of assets and
liabilities of any Grantor.
“
Instrument ” shall have the meaning set forth in the
UCC.
“
Inventory ” shall have the meaning set forth in the
UCC.
“
Issuer ” shall have the meaning set forth in the
recitals.
“
Letter-of-Credit Rights ” shall have the meaning set
forth in the UCC.
“
Lien ” shall mean, with respect to any asset, any
mortgage, deed of trust, lien, pledge, hypothecation, encumbrance,
charge or security interest in, on or of such asset.
“ Maximum
Bank Documents Amount ” shall mean an amount equal to
(x)
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$121,000,000
or, if less, (y) the product of (i) 1.1 and (ii) the
aggregate amount of all commitments to make loans and other
advances under the Senior Credit Agreement (after giving effect to
any permanent reductions of such commitments that are accompanied
by a payment of principal outstanding under such commitments (other
than those made in connection with a Refinancing)).
“
Noteholder Agent ” shall mean (i) BONY, in its
capacity as Trustee and collateral agent under the Senior Secured
Notes Indenture and the other Noteholder Documents entered into
pursuant thereto, (ii) the trustee and collateral agent under
such Noteholder Documents as may be entered into pursuant to any
Refinancing of the foregoing permitted hereunder and
(iii) with respect to both (i) and (ii), its successors
and permitted assigns.
“
Noteholder Collateral ” shall mean all of the assets
of each Grantor, whether real, personal or mixed, with respect to
which a Lien is granted as security for any Noteholder
Obligation.
“
Noteholder Collateral Documents ” shall mean the
Noteholder Security Agreement, the Noteholder Pledge Agreement and
any other document or instrument pursuant to which a Lien is
granted by any Grantor to secure any Noteholder Obligations or
under which rights or remedies with respect to any such Lien are
governed.
“
Noteholder Documents ” means the Senior Secured Notes
Indenture, the Notes, the Noteholder Collateral Documents and each
of the other agreements, documents and instruments providing for or
evidencing any Noteholder Obligation, and any other document or
instrument executed or delivered at any time in connection with any
Noteholder Obligations under the Senior Secured Notes Indenture and
the other Noteholder Documents, including any intercreditor or
joinder agreement among holders of Noteholder Obligations, in each
case to the extent such are effective at the relevant time and as
each may be amended, restated, supplemented, modified, renewed,
extended or Refinanced from time to time in accordance with the
provisions of this Agreement.
“
Noteholder Obligations ” shall mean all Obligations
outstanding under the Senior Secured Notes Indenture and the other
Noteholder Documents (including, without limitation, all fees and
expenses of the Trustee thereunder). To the extent any payment with
respect to the Noteholder Obligations (whether by or on behalf of
any Grantor, as proceeds of security, enforcement of any right of
set-off or otherwise) is declared to be fraudulent or preferential
in any respect, set aside or required to be paid to a debtor in
possession, trustee, receiver or similar Person, then the
obligation or part thereof originally intended to be satisfied
shall be deemed to be reinstated and outstanding as if such payment
had not occurred and no Discharge of Noteholder Obligations shall
be deemed to have occurred with respect to such amount.
“Noteholder Obligations” shall also 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 Noteholder
Document, whether or not the claim for such interest is allowed as
a claim in such Insolvency or Liquidation Proceeding.
“
Noteholder Pledge Agreement ” shall mean the Pledge
Agreement dated as of December 29, 2006, among the Company,
certain other Grantors and the Noteholder Agent in
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respect of the
Senior Secured Notes Indenture.
“
Noteholder Security Agreement ” shall mean the
Security Agreement dated as of December 29, 2006, among the
Company, certain other Grantors and the Noteholder Agent in respect
of the Senior Secured Notes Indenture.
“
Noteholder Priority Collateral ” shall mean all of the
assets of each Grantor, whether real, personal or mixed, other than
the Bank Priority Collateral.
“
Noteholder Priority Collateral Proceeds Account ”
shall mean one or more Deposit Accounts established pursuant to the
Senior Secured Notes Indenture for the purposes of holding proceeds
of Noteholder Priority Collateral, and into which there shall be
deposited only proceeds of Noteholder Priority
Collateral.
“
Noteholder Secured Parties ” shall mean the Persons
holding Noteholder Obligations, including the Noteholder
Agent.
“
Notes ” shall mean (i) the 9
1 / 2
% senior secured notes due 2017
issued by the Issuer pursuant to the Senior Secured Notes Indenture
and (ii) any additional notes issued under the Senior Secured
Notes Indenture by the Issuer, to the extent permitted by the
Senior Secured Notes Indenture, the Senior Credit Agreement, the
other Bank Documents and the other Noteholder Documents, as
applicable.
“
Obligations ” means any and all obligations with
respect to the payment of (i) any principal of, or interest or
premium on, any Indebtedness, including any reimbursement
obligation in respect of any letter of credit, or any other
liability, including, without limitation, interest accruing after
the filing of a petition initiating any proceeding under Bankruptcy
Law, (ii) any fees, indemnification obligations, expense
reimbursement obligations or other liabilities payable under the
documentation governing any Indebtedness and (iii) any
obligation to post cash collateral in respect of letters of credit
or any other obligations.
“
Patterns and Core Boxes Collateral ” shall mean any
and all casting patterns or core boxes of any Grantor.
“
Person ” shall mean any natural person, corporation,
limited liability company, trust, joint venture, association,
company, partnership, entity or other party, including any
government and any political subdivision, agency or instrumentality
thereof.
“ Pledged
Collateral ” shall mean the Common Collateral in the
possession of an Agent (or its agents or bailees), to the extent
that possession thereof perfects a Lien thereon under the
UCC.
“
Proceeds ” shall have the meaning set forth in the
UCC.
“
Promissory Note ” shall have the meaning set forth in
the UCC.
“
Records ” shall have the meaning set forth in the
UCC.
8
“
Recovery ” shall have the meaning set forth in
Section 6.4.
“
Refinance ” shall mean, in respect of any indebtedness
or other obligation, to refinance, extend, renew, defease, amend,
amend and restate, modify, supplement, restructure, replace, refund
or repay, or to issue other indebtedness or other obligation in
exchange or replacement for, such indebtedness or other obligation
in whole or in part. “ Refinanced ” and “
Refinancing ” shall have correlative
meanings.
“
Required Lenders ” shall mean those lenders the
approval of which is required to approve an amendment or
modification of, termination or waiver of any provision of, or
consent to any departure from, the Senior Credit Agreement (or
would be required to effect such consent under this Agreement if
such consent were treated as an amendment thereof).
“
Second-Lien Agent ” shall mean (i) with respect
to Bank Priority Collateral, the Noteholder Agent and
(ii) with respect to Noteholder Priority Collateral, the Bank
Agent.
“
Second-Lien Collateral Documents ” shall mean
(i) with respect to Bank Priority Collateral, the Noteholder
Collateral Documents and (ii) with respect to Noteholder
Priority Collateral, the Bank Collateral Documents.
“
Second-Lien Documents ” shall mean (i) with
respect to Bank Priority Collateral, the Noteholder Documents and
(ii) with respect to Noteholder Priority Collateral, the Bank
Documents.
“
Second-Lien Obligations ” shall mean (i) in
respect of Noteholder Priority Collateral, the Bank Obligations and
(ii) in respect of Bank Priority Collateral, the Noteholder
Obligations.
“
Second-Lien Secured Parties ” shall mean (i) with
respect to Bank Priority Collateral, the Noteholder Secured Parties
and (ii) with respect to Noteholder Priority Collateral, the
Bank Secured Parties.
“ Secured
Obligations ” shall mean Bank Obligations and Noteholder
Obligations.
“ Secured
Parties ” shall mean the Bank Secured Parties and the
Noteholder Secured Parties.
“
Securities Account ” shall have the meaning set forth
in the UCC.
“ Senior
Credit Agreement ” shall have the meaning set forth in
the recitals.
“ Senior
Secured Notes Indenture ” shall have the meaning set
forth in the recitals.
“
Standstill Period ” shall have the meaning set forth
in Section 3.1(a).
“
Subsidiary ” shall mean, with respect to any Person,
any “Subsidiary” of such Person as defined in the
Senior Secured Notes Indenture.
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“
Supporting Obligations ” shall have the meaning set
forth in the UCC.
“
Trustee ” shall have the meaning set forth in the
preamble.
“ UCC
” shall mean (i) with respect to the provisions hereof
that relate to the definition of the Bank Priority Collateral, the
Uniform Commercial Code as from time to time in effect in the State
of Illinois and (ii) for all other purposes hereunder, the
Uniform Commercial Code as from time to time in effect in the State
of New York.
1.2. Terms
Generally . The definitions of terms herein shall apply equally
to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words
“include,” “includes” and
“including” shall be deemed to be followed by the
phrase “without limitation”. The word
“will” shall be construed to have the same meaning and
effect as the word “shall”. Unless the context requires
otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to
time amended, supplemented, modified or Refinanced in accordance
with this Agreement, (b) any reference herein to any Person
shall be construed to include such Person’s 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 shall be construed to
refer to Sections of this Agreement and (e) the words
“asset” and “property” shall be construed
to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash,
securities, accounts and contract rights.
SECTION 2.
Lien Priorities .
2.1.
Subordination of Liens . Notwithstanding (i) the date,
time, manner or order of filing or recordation of any document or
instrument or grant, attachment or perfection (including any defect
or deficiency or alleged defect or deficiency in any of the
foregoing) of any Liens granted to the respective Secured Parties
on any Common Collateral, (ii) any provision of the UCC,
Bankruptcy Law, any applicable law or any Finance Document,
(iii) whether any Secured Party, either directly or through
agents, holds possession of, or has control over, all or any part
of the Common Collateral, (iv) the fact that any such Liens
may be subordinated, voided, avoided, invalidated or lapsed or
(v) any other circumstance of any kind or nature whatsoever,
the Second-Lien Agent, on behalf of itself and each applicable
Second-Lien Secured Party, hereby agrees that: (a) any Lien on
First-Lien Collateral securing any First-Lien Obligations now or
hereafter held by or on behalf of the First-Lien Agent or any
First-Lien Secured Party or any agent or trustee therefor
regardless of how acquired, whether by grant, statute, operation of
law, subrogation or otherwise, shall have priority over and be
senior in all respects and prior to any Lien on such Common
Collateral securing any Second-Lien Obligations and (b) any
Lien on the Common Collateral securing any Second-Lien Obligations
now or hereafter held by or on behalf of the Second-Lien Agent or
any Second-Lien Secured Parties or any agent or trustee therefor
regardless of how acquired, whether by grant, statute, operation of
law, subrogation or otherwise, shall be junior and subordinate in
all respects to all Liens on the Common Collateral securing any
First-Lien Obligations. All Liens on the Common Collateral securing
any First-Lien Obligations shall be and remain senior in all
respects and prior to all Liens on the Common Collateral
securing
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any Second-Lien
Obligations for all purposes, whether or not such Liens securing
any First-Lien Obligations are subordinated to any Lien securing
any other obligation of the Company, any other Grantor or any other
Person.
2.2.
Prohibition on Contesting Liens . The Bank Agent, for itself
and on behalf of each applicable Bank Secured Party, and the
Noteholder Agent, for itself and on behalf of each applicable
Noteolder Secured Party, agrees that it shall not (and hereby
waives any right to) take any action to challenge, contest 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 a Lien securing any Secured Obligations held (or
purported to be held) by or on behalf of any of the Secured Parties
or any agent or trustee therefor in any Common
Collateral.
2.3. No New
Liens . It is agreed and understood that the intent of the
parties is for each Class of Secured Obligations to be secured by a
perfected lien on all Bank Priority Collateral and all Noteholder
Priority Collateral. In furtherance of the foregoing, if any
Secured Party of either Class shall acquire or hold any Lien on any
asset of the Company or any other Grantor that is not also subject
to a Lien securing the Secured Obligations of the other Class, then
such Secured Party shall (i) without the need for any further
consent of any party and notwithstanding anything to the contrary
in any other document, be deemed to also hold and have held such
Lien for the benefit of the Secured Parties of the other Class as
security for the Secured Obligations of the other Class (subject to
the Lien priorities and other terms hereof) and (ii) in the
case of any such Lien acquired after the date hereof,
(x) endeavor to give the other Agent prompt written notice of
such additional Lien, provided that the failure to give such
notice shall not affect the validity of such additional Lien or the
rights hereunder of the Agent receiving such additional Lien
(subject to the Lien priorities and other terms hereof) and
(y) enter into, execute and/or deliver any agreements,
filings, instruments or other documents reasonably requested by the
other Agent in order to evidence the Lien priorities set forth
herein.
2.4. Perfection
of Liens . Neither the First-Lien Agent nor the First-Lien
Secured Parties shall be responsible for perfecting and maintaining
the perfection of Liens with respect to the Common Collateral for
the benefit of the Second-Lien Agent and the Second-Lien Secured
Parties. The provisions of this Agreement are intended solely to
govern the respective Lien priorities as between the First-Lien
Secured Parties and the Second-Lien Secured Parties and shall not
impose on any Secured Party or any agent or trustee therefor any
obligations in respect of the disposition of proceeds of any Common
Collateral which would conflict with prior perfected claims therein
in favor of any other Person or any order or decree of any court or
governmental authority or any applicable law.
3.1. Exercise
of Remedies .
(a) So
long as the Discharge of First-Lien Obligations has not occurred,
whether or not any Insolvency or Liquidation Proceeding has been
commenced by or against the Company or any other Grantor, neither
the Second-Lien Agent nor any Second-Lien Secured Party
shall:
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(i) exercise or
seek to exercise any rights or remedies (including set-off) with
respect to any First-Lien Collateral in respect of any applicable
Second-Lien Obligations, or institute any action or proceeding with
respect to such rights or remedies (including any action of
foreclosure);
(ii) contest,
protest or object to any foreclosure proceeding or action brought
with respect to the First-Lien Collateral by the First-Lien Agent
or any First-Lien Secured Party in respect of the First-Lien
Obligations, the exercise of any right by the First-Lien Agent or
any First-Lien Secured Party (or any agent or sub-agent on their
behalf) in respect of the First-Lien Obligations under any lockbox
agreement, control agreement, landlord waiver or bailee’s
letter or similar agreement or arrangement to which the Second-Lien
Agent or any Second-Lien Secured Party either is a party or may
have rights as a third party beneficiary, or any other exercise by
any such party of any rights and remedies as a secured party
relating to the First-Lien Collateral under the First-Lien
Documents or otherwise in respect of First-Lien Obligations;
or
(iii) object to
the forbearance by the First-Lien Secured Parties from bringing or
pursuing any foreclosure proceeding or action or any other exercise
of any rights or remedies relating to the First-Lien Collateral in
respect of First-Lien Obligations;
provided,
however that if an Event
of Default (as defined in the Second-Lien Documents (as in effect
on the date hereof)) has occurred and for so long as such Event of
Default is continuing, subject at all times to the provisions of
Sections 2.1 and 4, after the expiration of a 120-day period
(the “ Standstill Period ”) which shall commence
on the date of receipt by the First-Lien Agent of the written
declaration of the Second-Lien Agent of such Event of Default and
written demand by the Second-Lien Agent to the Company for the
accelerated payment of all Second-Lien Obligations (unless any
Grantor is subject to an Insolvency or Liquidation Proceeding by
reason of which such declaration and the making of such demand is
stayed, in which case, commencing on the date of the commencement
of such Insolvency or Liquidation Proceeding), the Second-Lien
Agent may take action to enforce its second-priority Liens on the
First-Lien Collateral upon 10 days’ prior written notice
to the First-Lien Agent (which notice may be given prior to the
completion of such 120-day period, but not prior to the 90th day of
such period), but only so long as the First-Lien Agent is not, or
has not within such 10-day period commenced, diligently pursuing in
good faith the exercise of its enforcement rights or remedies
against, or diligently attempting to vacate any stay on enforcement
of its Liens on, all or any material portion of the First-Lien
Collateral (including, without limitation, commencement of any
reasonable action to foreclose its Liens on such First-Lien
Collateral, any reasonable action to take possession of such
First-Lien Collateral or commencement of any reasonable legal
proceedings or actions against or with respect to such First-Lien
Collateral).
(b) Except
as expressly provided in the proviso in Section 3.1(a), so
long as the Discharge of First-Lien Obligations has not occurred
and whether or not any Insolvency or Liquidation Proceeding has
been commenced by or against the Company or any other Grantor, the
First-Lien Agent and the First-Lien Secured Parties shall have the
exclusive right to enforce rights, exercise remedies (including
set-off and the right to credit bid their debt) and make
determinations regarding the release, disposition or restrictions
with respect to the First-Lien Collateral without any consultation
with or the consent of any Second-Lien Agent or
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any Second-Lien
Secured Party; provided , however , that the
Second-Lien Agent may take any action (not adverse to the prior
Liens on the First-Lien Collateral securing the First-Lien
Obligations, or the rights of the First-Lien Agent or the
First-Lien Secured Parties to exercise remedies in respect thereof)
in order to create, prove, perfect, preserve or protect (but not
enforce) its rights in, and perfection and priority of its Lien on,
the First-Lien Collateral. In exercising rights and remedies
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