Exhibit 10.5
EXECUTION VERSION
INDEMNIFICATION SUBORDINATION
AGREEMENT
This INDEMNIFICATION SUBORDINATION
AGREEMENT (this “ Agreement ”), dated as of
February 4, 2009, is entered into by and between Accuride
Corporation, a Delaware corporation (together with any current or
future successors or direct or indirect parents or subsidiaries,
the “ Company ”), on the one hand, and Sun
Capital Partners Management V, LLC, a Delaware limited liability
company (“ SCPM ”), Sun Capital Partners V,
L.P., a Cayman Islands exempted limited partnership, Sun Capital
Advisors V, L.P., a Cayman Islands exempted limited partnership,
and Sun Capital Partners V, Ltd., a Cayman Islands exempted
company (collectively, “ Sun ”), on the
other hand. Capitalized terms used but not otherwise
defined herein shall have the meanings set forth in
Section 3 .
W I T N E S
S E T H :
WHEREAS, the Company is a party to
that certain Last Out Debt Agreement, dated as of the date hereof,
by and between the Company and a Sun Affiliate (the “ Last
Out Debt Agreement ”), and that certain Consulting
Agreement, dated as of the date hereof, by and between the Company
and a Sun Affiliate (the “ Consulting Agreement
”);
WHEREAS, the Company has certain
indemnification obligations to certain Sun Affiliates and their
respective officers, directors, members, partners, employees and
agents under certain Organizational Documents, the Last Out Debt
Agreement and the Consulting Agreement, and such parties also have
certain rights to indemnification provided by Sun and/or Sun
Affiliates;
WHEREAS, this Agreement is intended
to clarify certain rights of (a) Sun, (b) any Sun
Affiliate, (c) any persons or entities providing management,
advisory, consulting or other services at the direction or request
of Sun or any Sun Affiliate to or for the benefit of the Company,
(c) any persons designated by Sun or any Sun Affiliate to
serve as a director, officer, board observer, partner, trustee,
fiduciary, manager, employee, consultant or advisor, or functional
or foreign equivalent of the foregoing, to the Company, and
(d) any direct or indirect partners (including general
partners), shareholders, members (including managing members),
controlling persons, subsidiaries, directors, officers,
fiduciaries, managers, employees and agents of each of the
foregoing (those persons and entities identified in (a), (b),
(c) and (d) above, the “ Indemnified Parties
”), whether such rights exist pursuant to any Organizational
Document, Advisory Agreement, Transaction Agreement or any other
agreement or document;
WHEREAS, it is the intent of the
parties that (a) the Company is and shall be the indemnitor of
the first resort with respect to any matters for which advancement
or indemnification is provided by the Company to or on behalf of
the Indemnified Parties, whether for claims and liabilities prior
to or after the date of this Agreement, (b) the Company shall
provide advancement or indemnification to each Indemnified Party on
a primary basis and (c) any Indemnified Party may be expected
to seek advancement and/or indemnification from any other potential
source of advancement or indemnification (including, without
limitation, from any other Indemnified Party) only if, and to the
extent, that the Company is legally and/or financially unable to
make advancement and/or indemnification, as the case may be, to or
on behalf of such Indemnified Party; and
1
WHEREAS, the Company’s
acknowledgement and agreement to the foregoing is a material
condition to the willingness of certain Sun Affiliates to serve as
officers and/or directors of the Company, to enter into the Last
Out Debt Agreement and Consulting Agreement and to consummate the
transactions contemplated thereby.
NOW, THEREFORE, in consideration of
the premises, and of the representations, warranties, covenants and
agreements set forth herein, the parties agree as
follows:
1.
Primary Indemnitor; Subrogation . The Company hereby
acknowledges that the Indemnified Parties have certain rights to
advancement and/or indemnification by Sun and certain Sun
Affiliates (collectively, the “ Fund Indemnitors
”). The Company hereby agrees that the Company is the
indemnitor of first resort (i.e., its obligations to the
Indemnified Parties are primary and those of the Fund Indemnitors
are secondary), that the Company shall be liable for the full
amount of payments of indemnification required by any
Organizational Document, Advisory Agreement or Transaction
Agreement and that the Company irrevocably and unconditionally
waives any claims against the Fund Indemnitors for contribution,
subrogation, exoneration, reimbursement or any other recovery of
any kind for which the Company is liable pursuant to any
Organizational Document, Advisory Agreement, Transaction Agreement
or this Agreement. The Company further agrees that no payment
for indemnification by the Fund Indemnitors on behalf of any
Indemnified Party with respect to any claim for which an
Indemnified Party has sought payment from the Company shall affect
the foregoing, and the Fund Indemnitors, to the extent of such
payment, shall be subrogated to all of the rights of recovery of
such Indemnified Party against the Company.
2.
Modification of Indemnification Rights . An
Indemnified Party’s rights under this Agreement and an
Indemnified Party’s rights to advancement or indemnification
from the Company pursuant to any agreement or document (including,
without limitation, any Organizational Document, Advisory Agreement
or Transaction Agreement) governing an Indemnified Party’s
rights to advancement and/or indemnification from the Company may
not be waived, eliminated or otherwise diminished or modified
without the specific written consent of SCPM, on behalf of
Sun. Sun may, within Sun’s sole discretion, compromise,
waive or relinquish any Indemnified Party’s rights to
advancement or indemnification under any agreement or document
(whether pursuant to any Organizational Document, Advisory
Agreement, Transaction Agreement or otherwise) governing such
Indemnified Party’s rights to advancement and/or
indemnification from the Company.
3.
Certain Definitions . The following terms have the
meanings set forth below:
“ Advisory Agreement
” shall mean any advisory agreement, consulting, monitoring
or other similar or equivalent agreement, including the Consulting
Agreement.
“ Organizational
Document ” shall mean an entity’s charter, bylaws,
partnership agreement, limited liability company agreement,
operating agreement, indemnification agreement or other similar
agreement or document, including any document amendatory or
supplemental thereto.
“ Person ” shall
mean any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated association, corporation, limited
liability company or entity.
2
“ Sun Affiliate ”
shall mean any other Person controlling, controlled by or under
common control with Sun; provided , that under no
circumstances shall the Company or any “portfolio
company” acquired, either directly or indirectly through one
or more subsidiaries, by Sun be deemed a Sun Affiliate
hereunder. For purposes of this definition, “
control ” (including the terms “
controlling ,” “ controlled by ”
and “ under common control with ”) means the
possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or
otherwise. For the avoidance of doubt, any investment fund
formed or managed by Sun or any Sun Affiliate or for which Sun or
any Sun Affiliate serves as an investment adviser, and each of
their respective employees, officers, directors, direct or indirect
general partner, managing member and/or controlling persons are
“Sun Affiliates” for all purposes hereof.
“ Transaction Agreement
” shall mean any investment agreement, securities purchase
agreement, note purchase agreement, asset purchase agreement,
merger agreement or other similar or equivalent agreement,
including the Last Out Debt Agreement.
4.
No Obligation to Provide Services . Nothing in this
Agreement shall be construed to require SCPM to provide, or to
continue to provide, management, advisory consulting or other
services, and nothing in this agreement shall be construed to
require any Indemnified Party to serve, or continue to serve, as a
director, officer, board observer, fiduciary, partner or manager
(or in any other capacity
