INTERCREDITOR AGREEMENT BETWEEN GENERAL ELECTRIC CAPITAL CORPORATION,

 

 

INTERCREDITOR AGREEMENT

THIS INTERCREDITOR AGREEMENT (this “ Agreement ”) is entered into as of March 10, 2009 between GENERAL ELECTRIC CAPITAL CORPORATION, in its capacity as administrative agent (in such capacity, the “ DIP ABL Agent ) for the financial institutions party from time to time to the DIP ABL Credit Agreement referred to below (such financial institutions, together with their successors, assigns and transferees, the “ Credit Agreement Lenders ” and, together with affiliates thereof in their capacity as Bank Products Affiliates or Hedging Affiliates (in each case, as hereinafter defined), the “ DIP ABL Lenders ”) and DDJ CAPITAL MANAGEMENT, LLC, in its capacity as administrative agent (in such capacity, the “ DIP Term Agent ”) for the financial institutions party from time to time to the DIP Term Credit Agreement referred to below (the “ DIP Term Lenders ”).

RECITALS

A.

Pursuant to that certain Senior Secured, Super-Priority Debtor-In-Possession Credit Agreement dated as of March 10, 2009 (as amended, restated, supplemented or otherwise modified from time to time, the “ DIP ABL Credit Agreement ”), by and among MILACRON INC. (the “ Parent ”), each Subsidiary of the Parent listed as a “Borrower” on the signature pages thereto (the Parent and such Subsidiaries are collectively referred to herein as “ DIP ABL Borrowers ” and individually as a “ DIP ABL Borrower ”), each other Subsidiary of the Parent listed as a “Credit Party” on the signature pages thereto, the Credit Agreement Lenders and the DIP ABL Agent, the Credit Agreement Lenders have agreed to make certain loans and other financial accommodations to or for the benefit of DIP ABL Borrowers.

B.

Pursuant to certain guaranty agreements and security agreements dated as of the date hereof (the “ DIP ABL Guaranties ”) by the DIP ABL Guarantors in favor of the DIP ABL Agent, the DIP ABL Guarantors have agreed to guarantee the payment and performance of the Borrowers’ obligations under the DIP ABL Documents.

C.

As a condition to the effectiveness of the DIP ABL Credit Agreement and to secure the obligations of DIP ABL Borrowers and the DIP ABL Guarantors (DIP ABL Borrowers, the DIP ABL Guarantors and each other direct or indirect affiliate or shareholder (or equivalent) of Milacron or any of its affiliates that is now or hereafter becomes a party to any DIP ABL Document, collectively, the “ DIP ABL Credit Parties ”) under and in connection with the DIP ABL Documents, the DIP ABL Credit Parties have granted to the DIP ABL Agent (for the benefit of the DIP ABL Lenders including the Bank Products Affiliates and Hedging Affiliates) Liens on the Collateral.

D.

Pursuant to that certain Senior Secured SuperPriority Priming Debtor-In-Possession Credit Agreement dated as of March 10, 2009 (as amended, restated, supplemented or otherwise modified from time to time, the “ DIP Term Credit Agreement ”), among MILACRON INC. (the “ DIP Term Borrower ”), each guarantor party thereto, the banks, financial institutions and other institutional Lenders party thereto from time to time (the “ DIP Term Lenders ”) and the DIP Term Agent, the DIP Term Lenders have agreed to make certain loans and other financial accommodations to or for the benefit of DIP Term Borrower.

 

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E.

Pursuant to certain guaranty agreements contained in the DIP Term Credit Agreement (the “ DIP Term Guaranties ”) by the DIP Term Guarantors in favor of the DIP Term Agent, the DIP Term Guarantors have agreed to guarantee the payment and performance of DIP Term Borrower’ obligations under the DIP Term Documents.

F.

As a condition to the effectiveness of the DIP Term Credit Agreement and to secure the obligations of DIP Term Borrower and the DIP Term Guarantors (DIP Term Borrower, the DIP Term Guarantors and each other direct or indirect affiliate or shareholder (or equivalent) of Milacron or any of its affiliates that is now or hereafter becomes a party to any DIP Term Document, collectively, the “ DIP Term Credit Parties ”) under and in connection with the DIP Term Documents, the DIP Term Credit Parties have granted to the DIP Term Agent (for the benefit of the DIP Term Lenders) Liens on the Collateral.

G.

Each of the DIP ABL Agent (on behalf of the DIP ABL Lenders) and the DIP Term Agent (on behalf of the DIP Term Lenders) and, by their acknowledgment hereof, the Credit Parties, desire to agree to the relative priority of Liens on the Collateral and certain other rights, priorities and interests as provided herein.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

SECTION 1.1  UCC DEFINITIONS. The following terms which are defined in the Uniform Commercial Code are used herein as so defined: Accounts, Chattel Paper, Deposit Accounts, Documents, Electronic Chattel Paper, Equipment, Financial Assets, Instruments, Inventory, Investment Property, Letter-of-Credit Rights, Money, Payment Intangibles, Promissory Notes, Records, Security, Securities Accounts, Security Entitlements, Supporting Obligations, and Tangible Chattel Paper.

SECTION 1.2  OTHER DEFINITIONS. As used in this Agreement, the following terms shall have the meanings set forth below:

“ Affiliate ” shall mean (a) any Person controlling, controlled by or under common control with any other Person, (b) with respect to any Person, any other Person who is an officer, director, managing member, partner, trustee or beneficiary of such Person, and (c) any Person who is a spouse, sibling, parent, grandparent, child or grandchild of a Person described in clauses (a) or (b) preceding. For purposes of this definition, “control” (including “controlled by” and “under common control with”) shall mean the possession, directly or indirectly, of the power to either (a) vote 10% or more of the voting securities of such Person or (b) direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

“ Agreement ” shall mean this Intercreditor Agreement.

 

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“ Asset Sale Proceeds Account ” shall mean a segregated deposit account under the sole control of the DIP Term Agent which contains only proceeds from the sale of DIP Term Priority Collateral and any interest earned thereon.

“ Bank Products Affiliate ” shall mean any Affiliate of any Credit Agreement Lender that has entered into a Bank Products Agreement with a DIP ABL Credit Party with the obligations of such DIP ABL Credit Party thereunder being secured by one or more DIP ABL Collateral Documents.

“ Bank Products Agreement ” shall mean any agreement pursuant to which a bank or other financial institution agrees to provide treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services).

“ Bankruptcy Code ” shall mean title 11 of the United States Code.

“ Capital Stock ” shall mean (a) in the case of a corporation, corporate stock, (b) in the case of an association, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (c) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited), and (d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of property of, the issuing Person.

“ Cash Collateral ” shall mean any Collateral consisting of Money or cash equivalents, any Security Entitlement and any Financial Assets.

“ Cash Equivalents ” shall mean (i) marketable direct obligations issued or unconditionally guaranteed by the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case, maturing within six months from the date of acquisition thereof; (ii) commercial paper, maturing not more than 270 days after the date of issue rated P-1 by Moody’s Investors Service, Inc. and any successor thereto (“ Moody’s ”) or A-1 by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. and any successor thereto (“ Standard & Poor’s ”); (iii) certificates of deposit maturing not more than 270 days after the date of issue, issued by commercial banking institutions and money market or demand deposit accounts maintained at commercial banking institutions, each of which is a member of the Federal Reserve System and has a combined capital and surplus and undivided profits of not less than $500,000,000; (iv) repurchase agreements having maturities of not more than 90 days from the date of acquisition which are entered into with major money center banks included in the commercial banking institutions described in clause (iii) above and which are secured by readily marketable direct obligations of the United States Government or any agency thereof, (v) money market accounts maintained with mutual funds having assets in excess of $2,500,000,000; and (vi) tax exempt securities rated A or higher by Moody’s or A+ or higher by Standard & Poor’s.

 

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“ Collateral ” shall mean all Property now owned or hereafter acquired by any DIP ABL Borrower, any DIP ABL Guarantor, the DIP Term Borrower or any DIP Term Guarantor in or upon which a Lien is granted or purported to be granted to the DIP ABL Agent or the DIP Term Agent under any of the DIP ABL Collateral Documents or the DIP Term Collateral Documents, together with all rents, issues, profits, products, and Proceeds thereof.

“ Control Collateral ” shall mean any Collateral consisting of any Certificated Security, Investment Property, Deposit Account, and any other Collateral as to which a Lien may be perfected through possession or control by the secured party, or any agent therefor.

“ Copyright Licenses ” shall mean any and all agreements, whether written or oral, providing for the grant by or to any Credit Party of any right under any Copyright, including, without limitation, the grant of rights to manufacture, distribute, exploit and sell materials derived from any Copyright.

“ Copyrights ” shall mean (i) any and all other copyrights, in the United States or any other country, whether registered or unregistered, or published or unpublished, all registrations and recordings thereof and all applications in connection therewith, and (ii) the right to obtain all renewals of the foregoing.

“ Credit Agreement Lenders ” shall have the meaning assigned to that term in the introduction to this Agreement.

“ Credit Documents ” shall mean the DIP ABL Documents and the DIP Term Documents.

“ Credit Parties ” shall mean the DIP ABL Credit Parties and the DIP Term Credit Parties.

“ Debtor Relief Laws ” shall mean the Bankruptcy Code, the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada) and all other liquidation, conservatorship, bankruptcy, assignment for benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or Canada or other applicable jurisdictions from time to time in effect affecting the rights of creditors generally.

“ DIP ABL Agent ” shall have the meaning assigned to that term in the introduction to this Agreement and shall include any successor thereto as well as any Person designated as the “Agent” under any DIP ABL Credit Agreement.

“ DIP ABL Collateral Documents ” shall mean all “Security Agreements” as defined in the DIP ABL Credit Agreement, and all other security agreements, mortgages, deeds of trust and other collateral documents executed and delivered in connection with any DIP ABL Credit Agreement.

“ DIP ABL Credit Agreement ” shall mean the DIP ABL Credit Agreement (as such term is defined in the recitals to this Agreement) and any other agreement extending the maturity of, consolidating, restructuring, refunding, replacing or refinancing all or any portion of the DIP ABL Obligations, whether by the same or any other agent, lender or group of Lenders and whether or not increasing the amount of any Indebtedness that may be incurred thereunder.

 

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“ DIP ABL Credit Parties ” shall have the meaning assigned to that term in the recitals to this Agreement.

“ DIP ABL Documents ” shall mean the DIP ABL Credit Agreement, the DIP ABL Guaranties, the DIP ABL Collateral Documents, the Bank Product Agreements, the Hedging Agreements, those other ancillary agreements as to which the DIP ABL Agent or any DIP ABL Lender (including any Bank Products Affiliate and any Hedging Affiliate) is a party or a beneficiary and all other agreements, instruments, documents and certificates, now or hereafter executed by or on behalf of any DIP ABL Credit Party or any of its respective Subsidiaries or Affiliates, and delivered to the DIP ABL Agent, in connection with any of the foregoing or any DIP ABL Credit Agreement.

“ DIP ABL Guaranties ” shall have the meaning assigned to that term in the recitals to this Agreement.

“ DIP ABL Guarantors ” shall mean each subsidiary of Milacron listed on Schedule B hereto as an “DIP ABL Guarantor” and any other Person who becomes a guarantor under any of the DIP ABL Guaranties.

“ DIP ABL Lenders ” shall have the meaning assigned to that term in the introduction to this Agreement and shall include all Bank Product Affiliates and Hedging Affiliates and all successors, assigns, transferees and replacements thereof, as well as any Person designated as a “Lender” under any DIP ABL Credit Agreement.

“ DIP ABL Obligations ” shall mean all of the “Obligations” as defined in the DIP ABL Credit Agreement, and all other amounts owing or due under the terms of the DIP ABL Documents, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time. This term includes, without limitation, all interest, fees, charges, expenses, attorneys’ fees and any other sum chargeable to any DIP ABL Credit Party under any of the DIP ABL Documents and shall also include, without limitation, all amounts that would become due and interest, fees and charges that would accrue but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code or any other provision of the Bankruptcy Code or any similar provision of any other applicable Debtor Relief Laws.

“ DIP ABL Priority Collateral ” shall mean all Collateral consisting of the following:

(1)

all Accounts and Receivables;

(2)

all Chattel Paper (including Tangible Chattel Paper and Electronic Chattel Paper);

(3)

(x) all Deposit Accounts (except for the DIP Term Loan Account (as defined in the DIP ABL Credit Agreement)) and Money and all cash, checks, other negotiable instruments, funds and other evidences of payments held therein and (y) all Securities, Security Entitlements, and Securities Accounts, in each case, to the extent constituting cash or Cash Equivalents or representing a claim to Cash Equivalents, except, in each case, for (a) any Asset Sale Proceeds Account and all deposits and other funds held therein and (b) any Deposit Account or Money and all cash, checks, other negotiable instruments, funds and other evidences of payments held

 

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therein or any Securities Account and all cash and Cash Equivalents held therein, in each case, that constitute identifiable proceeds of DIP Term Priority Collateral and all deposits and other funds held therein, but in any event and regardless of the foregoing clauses (a), (b) and (c), including the accounts listed on Schedule A hereto;

(4)

all Inventory;

(5)

to the extent involving or governing any of the items referred to in the preceding clauses (1) through (4), all Documents, General Intangibles, Instruments (including, without limitation, Promissory Notes), and Letter of Credit Rights, provided that to the extent any of the foregoing also relates to DIP Term Priority Collateral, only that portion related to the items referred to in the preceding clauses (1) through (4) shall be included in the DIP ABL Priority Collateral;

(6)

to the extent evidencing or governing any of the items referred to in the preceding clauses (1) through (5), all Supporting Obligations; provided that to the extent any of the foregoing also relates to DIP Term Priority Collateral only that portion related to the items referred to in the preceding clauses (1) through (5) shall be included in the DIP ABL Priority Collateral;

(7)

all books and Records relating to the foregoing (including without limitation all books, databases, customer lists, engineer drawings, and Records, whether tangible or electronic which contain any information relating to any of the foregoing);

(8)

all Proceeds of any of the foregoing (including without limitation, all insurance proceeds) and all collateral security and guarantees given by any Person with respect to any of the foregoing;

provided , however , that any Collateral, regardless of type, received in connection with a permitted disposition of or otherwise in exchange for DIP ABL Priority Collateral pursuant to the terms of the Credit Agreement shall be treated as DIP ABL Priority Collateral under this Agreement; and provided, further, that any Collateral regardless of type received in connection with a permitted disposition of or otherwise in exchange for DIP Term Priority Collateral pursuant to the terms of the DIP Term Credit Agreement, shall be treated as DIP Term Priority Collateral under this Agreement.

“ DIP ABL Secured Parties ” shall mean the DIP ABL Agent and the DIP ABL Lenders.

“ DIP Term Agent ” shall have the meaning assigned to that term in the introduction to this Agreement and shall include any successor trustee or collateral agent appointed under the DIP Term Credit Agreement or the DIP Term Collateral Documents and any agent of any of the foregoing.

“ DIP Term Collateral Documents ” shall mean all “Collateral Documents” as defined in the DIP Term Credit Agreement, and all other security agreements, mortgages, deeds of trust and other collateral documents executed and delivered in connection with the DIP Term Credit Agreement.

 

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“ DIP Term Credit Agreement ” shall mean the DIP Term Credit Agreement (as such term is defined in the recitals to this Agreement) and any other agreement extending the maturity of, consolidating, restructuring, refunding, replacing or refinancing all or any portion of the DIP Term Obligations, whether by the same or any other agent, lender or group of Lenders and whether or not increasing the amount of any Indebtedness that may be incurred thereunder.

“ DIP Term Credit Parties ” shall have the meaning assigned to that term in the recitals to this Agreement.

“ DIP Term Documents ” shall mean the DIP Term Credit Agreement, the DIP Term Guaranties, the DIP Term Collateral Documents, those other ancillary agreements as to which the DIP Term Agent or any DIP Term Lender is a party or a beneficiary and all other agreements, instruments, documents and certificates, now or hereafter executed by or on behalf of any DIP Term Credit Party or any of its respective Subsidiaries or Affiliates, and delivered to the DIP Term Agent, in connection with any of the foregoing or any DIP Term Credit Agreement.

“ DIP Term Guarantors ” shall mean each subsidiary of Milacron listed on Schedule B hereto as a “DIP Term Guarantor” and any other Person who becomes a guarantor under the DIP Term Credit Agreement.

“ DIP Term Lender ” shall have the meaning assigned to that term in the introduction to this Agreement and shall include each successor and assign thereof.

“ DIP Term Obligations ” shall mean all of the “Obligations” as defined in the DIP Term Credit Agreement, and all other amounts owing or due under the terms of the DIP Term Documents, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time. This term includes, without limitation, all interest, fees, charges, expenses, attorneys’ fees and any other sum chargeable to any DIP Term Credit Party under any of the DIP Term Documents and shall also include, without limitation, all amounts that would become due and interest, fees and charges that would accrue but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code or any other provision of the Bankruptcy Code or any similar provision of any other applicable Debtor Relief Laws.

“ DIP Term Priority Collateral ” shall mean all Collateral, including, without limitation, the DIP Term Loan Account (as defined in the DIP ABL Credit Agreement), other than the DIP ABL Priority Collateral; provided , however , that any Collateral, regardless of type, received in connection with a permitted disposition of or otherwise in exchange for DIP Term Priority Collateral pursuant to the terms of the DIP Term Loan Agreement shall be treated as DIP Term Priority Collateral under this Agreement; provided , further , that any Collateral regardless of type received in connection with a permitted disposition of or otherwise in exchange for DIP ABL Priority Collateral pursuant to the terms of the Credit Agreement, shall be treated as DIP ABL Priority Collateral under this Agreement.

“ DIP Term Secured Parties ” shall mean the DIP Term Agent and the DIP Term Lenders.

 

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“ Discharge of DIP ABL Obligations ” shall mean (a) the payment in full of the DIP ABL Obligations that are outstanding and unpaid at the time all indebtedness thereunder is paid in full including, with respect to amounts available to be drawn under outstanding letters of credit issued thereunder (or indemnities or other undertakings issued pursuant thereto in respect of outstanding letters of credit) delivery of Money or backstop letters of credit in respect thereof in compliance with the terms of any DIP ABL Credit Agreement (which shall not exceed an amount equal to 105% of the aggregate undrawn amount of such letters of credit), (b) the termination of all commitments to extend credit under the DIP ABL Documents, and (c) the delivery by the DIP ABL Agent of a written notice to the DIP Term Agent stating that the events described in clauses (a) and (b) have occurred to the satisfaction of the DIP ABL Secured Parties.

“ Discharge of DIP Term Obligations ” shall mean (a) the payment in full of the DIP Term Obligations that are outstanding and unpaid at the time the DIP Term Credit Agreement is paid in full, (b) the termination of all commitments to extend credit under the DIP Term Documents and (c) the delivery by the DIP Term Agent of a written notice to the DIP ABL Agent stating that the events described in clause (a) have occurred to the satisfaction of the DIP Term Secured Parties.

“ Event of Default ” shall mean an Event of Default under any DIP ABL Credit Agreement or the DIP Term Credit Agreement.

“ Exercise Any Secured Creditor Remedies ” or “ Exercise of Secured Creditor Remedies ” shall mean:

(a)

the taking of any action to enforce or realize upon any Lien, including the institution of any foreclosure proceedings or the noticing of any public or private sale pursuant to article 9 of the Uniform Commercial Code;

(b)

the exercise of any right or remedy provided to a secured creditor on account of a Lien under any of the Credit Documents, under applicable law, in an Insolvency Proceeding or otherwise, including the election to retain any of the Collateral in satisfaction of a Lien;

(c)

the taking of any action or the exercise of any right or remedy in respect of the collection on, set off against, marshaling of, or foreclosure on the Collateral or the Proceeds thereof;

(d)

the appointment of a receiver, receiver and manager or interim receiver of all or part of the Collateral;

(e)

the sale, lease, license, or other disposition of all or any portion of the Collateral by private or public sale or any other means permissible under applicable law;

(f)

the exercise of any other right of a secured creditor under Part 6 of Article 9 of the Uniform Commercial Code;

 

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(g)

the exercise of any voting rights relating to any Capital Stock included in the Collateral; and

(h)

the delivery of any notice, claim or demand relating to the Collateral to any Person (including any securities intermediary, depository bank or landlord) in possession or control of any Collateral.

For avoidance of doubt, filing a proof of claim in bankruptcy court or seeking adequate protection (or any similar action in any foreign jurisdiction) shall not be deemed to be an Exercise of Secured Creditor Remedies.

“ Existing Intercreditor Agreement ” shall mean that certain Intercreditor Agreement dated as of June 10, 2004 by and among JPMorgan Chase Bank, Parent and U.S. Bank National Association, as trustee, as amended by that certain Supplement No. 1 to Intercreditor Agreement, dated as of the Closing Date, between JPMorgan Chase Bank, N.A. (f/k/a JPMorgan Chase Bank), in its capacity as Departing ABL Agent, on behalf of itself and the Departing ABL Lenders (as defined therein), General Electric Capital Corporation, in its capacity as New ABL Agent, on behalf of itself and the New ABL Lenders (as defined therein), and U.S. Bank National Association, as trustee.

“ General Intangibles ” shall mean all “general intangibles” as such term is defined in the Uniform Commercial Code including, without limitation, with respect to any Credit Party, all contracts, agreements, instruments and indentures in any form, and portions thereof, to which such Credit Party is a party or under which such Credit Party has any right, title or interest or to which such Credit Party or any property of such Credit Party is subject, as the same may from time to time be amended, supplemented or otherwise modified, including, without limitation (but limited as aforesaid), (i) all rights of such Credit Party to receive moneys due and to become due to it thereunder or in connection therewith, (ii) all rights of such Credit Party to damages arising thereunder, (iii) all equity that constitutes “general intangibles” and (iv) all rights of such Credit Party to perform and to exercise all remedies thereunder.

“ Guarantor ” shall mean any of the DIP ABL Guarantors or the DIP Term Guarantors.

“ Hedging Affiliate ” shall mean any Affiliate of any Credit Agreement Lender that has entered into a Hedging Agreement with an DIP ABL Credit Party with the obligations of such DIP ABL Credit Party thereunder being secured by one or more DIP ABL Collateral Documents.

“ Hedging Agreement ” shall mean any interest rate, foreign currency, commodity or equity swap, collar, cap, floor or forward rate agreement, or other agreement or arrangement designed to protect against fluctuations in interest rates or currency, commodity or equity values (including, without limitation, any option with respect to any of the foregoing and any combination of the foregoing agreements or arrangements), and any confirmation executed in connection with any such agreement or arrangement.

“ Insolvency Proceeding ” shall mean (a) any case, action or proceeding before any court or other governmental authority relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, or (b) any general assignment for the

 

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benefit of creditors, composition, marshalling of assets for creditors or other similar arrangement in respect of its creditors generally or any substantial portion of its creditors; in each case covered by clauses (a) and (b) undertaken under United States Federal, State or foreign law, including the Bankruptcy Code, the Bankruptcy and Insolvency Act (Canada) and the Companies’ Creditors Arrangement Act (Canada).

“ Intellectual Property ” shall mean all rights, priorities and privileges provided under United States, multinational and foreign law relating to intellectual property, including without limitation, all Copyrights, Copyright Licenses, Patents, Patent Licenses, Trade Secrets, Trade Secret Licenses, Trademarks and Trademark Licenses, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.

“ Lien ” shall mean any interest in Property securing an obligation owed to, or a claim by, a Person other than the owner of the Property, whether such interest is based on contract, constitutional, common, or statutory law, and including but not limited to the lien or security interest arising from a mortgage, encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes or in the case of securities, any purchase option, call or similar right of a third party with respect to such securities. The term “Lien” shall include reservations, exceptions, encroachments, easements, rights of way, covenants, conditions, restrictions, liens and other statutory, constitutional, or common law rights of landlords, leases and other title exceptions and encumbrances affecting Property.

“ Lien Priority ” shall mean with respect to any Lien of the DIP ABL Agent or the DIP Term Agent in the Collateral, the order of priority of such Lien as specified in Section 2.1 .

“ Party ” shall mean the DIP ABL Agent or the DIP Term Agent, and “Parties” shall mean both the DIP ABL Agent and the DIP Term Agent.

“ Patent License ” shall mean any and all agreements, whether written or oral, providing for the grant by or to any Credit Party of any right to manufacture, use or sell any invention covered in whole or in part by a Patent to the extent that a grant of a security interest in such patent license is not prohibited by applicable law or the applicable patent agreement.

“ Patents ” shall mean (i) all letters patent of the United States or any other country and all reissues and extensions thereof, (ii) all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof, and (iii) all rights to obtain any reissues or extensions of the foregoing.

“ Payment Collateral ” shall mean all Accounts, Instruments, Chattel Paper, Letter-Of-Credit Rights, Deposit Accounts (other than the Deposit Accounts which constitute DIP Term Priority Collateral), Securities Accounts, and Payment Intangibles, together with all Supporting Obligations, in each case composing a portion of the Collateral.

 

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“ Person ” shall mean any natural person, corporation, limited liability company, unlimited liability company, limited partnership, general partnership, limited liability partnership, joint venture, trust, land trust, business trust, or other organization, irrespective of whether such organization is a legal entity, and shall include a government and any agency or political subdivision thereof.

“ Priority Collateral ” shall mean the DIP ABL Priority Collateral or the DIP Term Priority Collateral.

“ Proceeds ” shall mean (a) all “proceeds,” as defined in Article 9 of the Uniform Commercial Code, with respect to the Collateral, and (b) whatever is recoverable or recovered when any Collateral is sold, exchanged, collected, or disposed of, whether voluntarily or involuntarily.

“ Property ” shall mean any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

“ Real Property ” shall mean any right, title or interest in and to real property, including any fee interest, leasehold interest, easement, or license and any other right to use or occupy real property, including any right arising by contract.

“ Receivable ” shall mean any right to payment for goods sold or leased or for services rendered, whether or not such right is evidenced by an Instrument or Chattel Paper and whether or not it has been earned by performance (including, without limitation, any Account).

“ Recovery ” shall have the meaning set forth in Section 5.3 .

“ Secured Parties ” shall mean the DIP ABL Secured Parties or the DIP Term Secured Parties.

 “ Subsidiary ” of any Person shall mean a corporation, limited liability company, partnership or other entity of which a majority of the outstanding shares of stock of each class having ordinary voting power or other equity interests is owned by such Person, by one or more Subsidiaries of such Person, or by such Person and one or more of its Subsidiaries.

 “ Trade Secret Licenses ” shall mean any and all agreements, whether written or oral, providing for the grant by or to any Credit Party of any right in or to Trade Secrets, to the extent that a grant of a security interest in such Trade Secret License is not prohibited by applicable law or the applicable Trade Secret License.

“ Trade Secrets ” shall mean all trade secrets and all other confidential or proprietary information and know-how whether or not such trade secret has been reduced to a writing or other tangible form, including all documents and things embodying, incorporating, or referring in any way to such trade secret, including but not limited to: (a) the right to sue for past, present and future misappropriation or other violation of any trade secret, and (b) all Proceeds of the foregoing, including, without limitation, licenses, royalties, income, payments, claims, damages, and proceeds of suit.

 

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“ Trademark License ” shall mean any and all agreements, whether written or oral, providing for the grant by or to any Credit Party of any right to use any Trademark, to the extent that a grant of a security interest in such Trademark License is not prohibited by applicable law or the applicable Trademark License.

“ Trademarks ” shall mean (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 all 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 all common-law rights related thereto, and (b) the right to obtain all renewals thereof.

“ Uniform Commercial Code ” shall mean the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided that to the extent that the Uniform Commercial Code is used to define any term in any security document and such term is defined differently in differing Articles of the Uniform Commercial Code, the definition of such term contained in Article 9 shall govern; provided , further , that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, publication or priority of, or remedies with respect to, Liens of any Party is governed by the Uniform Commercial Code or foreign personal property security laws as enacted and in effect in a jurisdiction other than the State of New York, the term “Uniform Commercial Code” will mean the Uniform Commercial Code or such foreign personal property security laws as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions.

SECTION 1.3  RULES OF CONSTRUCTION. Unless the context of this Agreement clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the term “including” is not limiting, and the term ‘or’ has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.” The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. Article, section, subsection, clause, schedule, and exhibit references herein are to this Agreement unless otherwise specified. Any reference in this Agreement to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). Any reference herein to any Person shall be construed to include such Person’s successors and assigns. Any reference herein to the repayment in full of an obligation shall mean the payment in full in cash of such obligation.

 

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ARTICLE 2

LIEN PRIORITY

SECTION 2.1  AGREEMENT TO SUBORDINATE.

(a)

Notwithstanding (i) the date, time, method, manner, or order of 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 DIP ABL Agent or the DIP ABL Lenders in respect of all or any portion of the Collateral or of any Liens granted to the DIP Term Agent or the DIP Term Lenders in respect of all or any portion of the Collateral and regardless of how any such Lien was acquired (whether by grant, statute, operation of law, subrogation or otherwise), (ii) the order or time of filing or recordation of any document or instrument for perfecting the Liens in favor of the DIP ABL Agent or the DIP Term Agent (or DIP ABL Lender or DIP Term Lender) in any Collateral, (iii) any provision of the Uniform Commercial Code, the Bankruptcy Code or any other applicable law, or of the DIP ABL Documents or the DIP Term Documents, (iv) whether the DIP ABL Agent or the DIP Term Agent, in each case, either directly or through agents, holds possession of, or has control over, all or any part of the Collateral, (v) the fact that any such Liens in favor of the DIP ABL Agent or the DIP ABL Lenders or the DIP Term Agent or the DIP Term Lenders securing any of the DIP ABL Obligations or DIP Term Obligations, respectively, are (x) subordinated to any Lien securing any obligation of any Credit Party other than the DIP Term Obligations or the DIP ABL Obligations, respectively, or (y) otherwise subordinated, voided, avoided, invalidated or lapsed or (vi) any other circumstance of any kind or nature whatsoever, the DIP ABL Agent, on behalf of itself and the DIP ABL Lenders, and the DIP Term Agent, on behalf of itself and the DIP Term Lenders, hereby agree that:

(1)

any Lien in respect of all or any portion of the DIP ABL Priority Collateral now or hereafter held by or on behalf of the DIP Term Agent or any DIP Term Lender that secures all or any portion of the DIP Term Obligations shall in all respects be junior and subordinate to all Liens granted to the DIP ABL Agent and the DIP ABL Lenders in the DIP ABL Priority Collateral to secure all or any portion of the DIP ABL Obligations;

(2)

any Lien in respect of all or any portion of the DIP ABL Priority Collateral now or hereafter held by or on behalf of the DIP ABL Agent or any ABL Lender that secures all or any portion of the DIP ABL Obligations shall in all respects be senior and prior to all Liens granted to the DIP Term Agent or any DIP Term Lender in the DIP ABL Priority Collateral to secure all or any portion of the DIP Term Obligations;

(3)

any Lien in respect of all or any portion of the DIP Term Priority Collateral now or hereafter held by or on behalf of the DIP ABL Agent or any ABL Lender that secures all or any portion of the DIP ABL Obligations shall in all respects be junior and subordinate to all Liens granted to (A) the DIP Term Agent and the DIP Term Lenders in the DIP Term Priority Collateral and (B) the Term Agent (as defined in the Existing Intercreditor Agreement) and the Term Noteholders (as defined in the Existing Intercreditor Agreement) in the Term Priority Collateral (as defined in the Existing Intercreditor Agreement) to secure all or any portion of the DIP Term Obligations; and

 

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(4)

any Lien in respect of all or any portion of the DIP Term Priority Collateral now or hereafter held by or on behalf of (A) the DIP Term Agent or any DIP Term Lender or (B) the Term Agent (as defined in the Existing Intercreditor Agreement) or any Term Noteholder (as defined in the Existing Intercreditor Agreement) that secures all or any portion of the DIP Term Obligations or the Term Obligations (as defined in the Existing Intercreditor Agreement), as applicable, shall in all respects be senior and prior to all Liens granted to the DIP ABL Agent or any ABL Lender in the DIP Term Priority Collateral to secure all or any portion of the DIP ABL Obligations.

(b)

Notwithstanding any failure by any DIP ABL Secured Party or DIP Term Secured Party to perfect its security interests in the Collateral (to the extent any action is required for purposes of perfection) or any avoidance, invalidation or subordination by any third party or court of competent jurisdiction of the security interests in the Collateral granted to the DIP ABL Secured Parties or the DIP Term Secured Parties, the priority and rights as between the DIP ABL Secured Parties and the DIP Term Secured Parties with respect to the Collateral shall be as set forth herein.

(c)

The DIP Term Agent, for and on behalf of itself and the DIP Term Lenders, acknowledges and agrees that, concurrently herewith, the DIP ABL Agent, for the benefit of itself and the DIP ABL Lenders, has been granted Liens upon all of the Collateral in which the DIP Term Agent has been granted Liens and the DIP Term Agent hereby consents thereto. The DIP ABL Agent, for and on behalf of itself and the DIP ABL Lenders, acknowledges and agrees that, concurrently herewith, the DIP Term Agent, for the benefit of itself and the DIP Term Lenders, has been granted Liens upon all of the Collateral in which the DIP ABL Agent has been granted Liens and the DIP ABL Agent hereby consents thereto. The subordination of Liens by the DIP Term Agent and the DIP ABL Agent in favor of one another as set forth herein shall not be deemed to subordinate the DIP Term Agent’s Liens or the DIP ABL Agent’s Liens to the Liens of any other Person.

SECTION 2.2  WAIVER OF RIGHT TO CONTEST LIENS.

(a)

The DIP Term Agent, for and on behalf of itself and the DIP Term Lenders, agrees that it and they shall not (and hereby waives any right to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability, or perfection of the Liens of the DIP ABL Agent in respect of the Collateral or the provisions of this Agreement. Except to the extent expressly set forth in this Agreement, the DIP Term Agent, for itself and on behalf of the DIP Term Lenders, agrees that none of the DIP Term Agent