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Exhibit 10.2
Execution Copy
INTERCREDITOR AGREEMENT
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:
SECTION 1.
Definitions .
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);
(ii) all Inventory;
(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.
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" 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.
SECTION 3.
Enforcement .
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 with respect to the First-Lien Collateral, the First-Lien
Agent and the First-Lien Secured Parties may enforce the provisions
of the First-Lien Documents and exercise remedies thereunder, 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 First-Lien Collateral upon foreclosure, to
incur expenses in connection with such sale or disposition, and to
exercise all the rights and remedies of a secured lender under the
Uniform Commercial Code of any applicable jurisdiction and of a
secured creditor under the Bankruptcy Law of any applicable
jurisdiction.
(c) Except
as e
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