EXHIBIT 10(w)
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INTERCREDITOR AGREEMENT
dated as of February 18, 2004
by and between
U.S. BANK NATIONAL ASSOCIATION,
as Collateral Agent
and
CONGRESS FINANCIAL CORPORATION (CENTRAL),
as Administrative Agent
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INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT, dated as of February 18, 2004 (as the
same may be amended, modified or supplemented from time to time, this
"Agreement"), is by and between: (i) U.S. Bank National Association, as
Collateral Agent under the Indenture (as defined below) for the benefit of the
holders from time to time of the Note Obligations (in such capacity, the
"Collateral Agent") and (ii) CONGRESS FINANCIAL CORPORATION (CENTRAL), as
Administrative Agent (in such capacity, the "Administrative Agent") under the
Credit Agreement (as defined below) for the benefit of the holders from time to
time of the Priority Obligations.
RECITALS
WHEREAS, pursuant to a Credit Agreement, dated as of August 16,
2001, entered into by JII, LLC as Borrower and led by the Administrative Agent,
the Borrower and other Obligors have entered into the Priority Lien Security
Documents pursuant to which the Obligors have granted the Administrative Agent a
first priority security interest in the Collateral;
WHEREAS, pursuant to an Indenture, dated of even date herewith (as
the same may be amended, restated, modified, supplemented, renewed, refunded,
replaced or refinanced from time to time, the "Indenture"), by and between JII
Holdings, LLC ("JII Holdings") and JII Holdings Finance Corporation ("JII
Finance") (collectively, the "Issuers"), the Guarantors and U.S. Bank National
Association, as trustee (in such capacity, the "Note Debt Trustee") for the
benefit of the holders of the Note Obligations, the Borrower, the Issuers, and
the other Obligors have entered into the Security Documents pursuant to which
they have granted the Collateral Agent a security interest in the Collateral
which security interest is subordinate to the security interest of the Priority
Lien;
WHEREAS, the parties hereto desire to enter into this Agreement to
confirm their relative rights with respect to the Collateral as provided in this
Agreement;
NOW THEREFORE, in consideration of the premises, covenants and
agreements as herein set forth and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
hereby agree as follows:
AGREEMENT
ARTICLE 1.
DEFINITIONS
For purposes of this Agreement, the terms listed in this Article 1
shall have the respective meanings set forth in this Article 1. All other
capitalized terms used herein and not defined herein shall have the meaning
ascribed thereto in the Indenture.
"Additional Notes" means an unlimited principal amount of Notes
(other than the Initial Notes) issued under the Indenture after the date of the
Indenture, as part of the same class as the Initial Notes.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Business Day" means any day other than a Legal Holiday.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership interests (whether general or limited) or
membership interests; and
(4) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person, but excluding
from all of the foregoing any debt securities convertible into
Capital Stock, whether or not such debt securities include any
right of participation with Capital Stock.
"Collateral" means all present and future properties and assets of
JII Holdings or any other Obligor upon which a security interest is granted to
secure Note Obligations pursuant to the security documents, other than Excluded
Assets.
"Collateral Agent" means the Note Debt Trustee in its capacity as
Collateral Agent under the security documents together with its successors in
such capacity.
"Credit Agreement" means that certain Loan and Security Agreement,
dated August 16, 2001, by and among JII LLC (formerly known as JII, Inc.), as
borrower, Congress Financial Corporation (Central), as agent, Wachovia Bank, as
a lender and the other financial institutions from time to time party thereto,
as lenders, providing for up to $110.0 million of revolving credit based on the
value of certain assets, including inventory, accounts receivable and fixed
assets, including any related notes, Guarantees, collateral documents,
instruments and agreements executed in connection therewith, and, in each case,
as amended, restated, modified, renewed, refunded, replaced (whether upon or
after termination or otherwise) or refinanced (including by means of sales of
debt securities to institutional investors) in whole or in part from time to
time.
"Credit Agreement Agent" means Congress Financial Corporation, in
its capacity as Collateral Agent under the Priority Lien Security Documents, and
any successor thereto in such capacity.
"Credit Bid Rights" means, in respect of any order relating to a
sale of assets in any Insolvency or Liquidation Proceeding, that:
(1) such order grants the Holders of Notes (individually and in
any
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combination) the right to bid at the sale of such assets and
the right to offset such holders' claims secured by Note Liens
upon such assets against the purchase price of such assets if
the bids of such holders:
(a) is the highest bid or otherwise determined by the court
to be the best offer at the sale; and
(b) includes a cash purchase price component payable at the
closing of the sale in an amount that would be
sufficient on the date of the closing of the sale, if
such amount were applied to such payment on such date,
to Discharge all unpaid Priority Obligations (except
Unasserted Contingent Obligations) and to satisfy all
liens entitled to priority over the Priority Liens that
attach to the proceeds of the sale, and such order
requires or permits such amount to be so applied; and
(2) such order allows the claims of the Holders of Notes in such
Insolvency or Liquidation proceeding to the extent required
for the grant of such rights.
"Credit Facilities" means, one or more debt facilities (including,
without limitation, the Credit Agreement) or commercial paper facilities, in
each case, with banks or other institutional lenders providing for revolving
credit loans, term loans, receivables financing (including through the sale of
receivables to such lenders or to special purpose entities formed to borrow from
such lenders against such receivables) or letters of credit, in each case, as
amended, restated, modified, renewed, refunded, replaced (whether upon or after
termination or otherwise) or refinanced (including by means of sales of debt
securities to institutional investors) in whole or in part from time to time.
"Default" means any event that is, or with the passage of time or
the giving of notice or both would be, if it continues uncured, an Event of
Default.
"Discharge of the Priority Obligations" means termination of all
commitments to extend credit that would constitute Priority Debt, payment in
full in cash of the principal of and interest and premium (if any) on all
Priority Debt (except undrawn letters of credit), discharge or cash
collateralization (at the lower of (1) 105% of the aggregate undrawn amount and
(2) the percentage of the aggregate undrawn amount required for release of liens
under the terms of the applicable Priority Lien Document) of all letters of
credit outstanding under any Priority Debt, and payment in full in cash of all
other Priority Obligations (except Unasserted Contingent Obligations) that are
outstanding and unpaid at the time the Priority Debt is paid in full in cash.
"Discharge" and "Discharged" shall have the correlative meaning.
"Domestic Restricted Subsidiary" shall have the meaning ascribed
thereto in the Indenture.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock); provided, however, that
Equity Interest shall not include Incentive Arrangements (as defined in the
Indenture) that do not include the issuance of Capital Stock, or
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warrants, options or other rights to acquire Capital Stock or obligations or
payments thereunder.
"Event of Default" has the meaning set forth in Section 6.01 of the
Indenture.
"Excluded Assets" means:
(1) any lease, license, contract, property right or agreement to
which JII Holdings or any Restricted Subsidiary is a party or
any of its rights or interests thereunder if and only for so
long as the grant of a security interest under the security
documents shall constitute or result in a breach, termination
or default under any such lease, license, contract, property
right or agreement (other than to the extent that any such
term would be rendered ineffective pursuant to Sections 9-406,
9-407, 9-408 or 9-409 of the UCC of any relevant jurisdiction
or any other applicable law or principles of equity);
provided, that such lease, license, contract, property right
or agreement shall be an Excluded Asset only to the extent and
for so long as the consequences specified above shall result
and shall cease to be an Excluded Asset and shall become
subject to the security interest granted under the security
documents immediately and automatically, at such time as such
consequences shall no longer result;
(2) any voting Equity Interests of any Excluded Foreign Subsidiary
representing more than 65% of the total outstanding voting
Equity Interest of that Excluded Foreign Subsidiary;
(3) assets subject to Liens described in clause (7) of the
definition of "Permitted Liens;"
(4) any property or assets acquired by JII Holdings or any of its
Restricted Subsidiaries after the date of the Indenture in
which the Collateral Agent does not have a perfected security
interest on such acquisition date, solely to the extent JII
Holdings or such Restricted Subsidiary was not required to
grant the Collateral Agent a perfected security interest
therein pursuant to Section 4.19 of the Indenture;
(5) at any time, any securities of a Subsidiary if, and only to
the extent that, at such time, the pledge of such securities
in favor of the Collateral Agent to secure the Note
Obligations would trigger a requirement under Rule 3-10 or
Rule 3-16 of Regulation S-X under the Securities Act (or any
other law, rule or regulation) to file separate financial
statements of that Subsidiary with the Securities and Exchange
Commission (or any other governmental agency);
(6) money, deposit accounts and letter-of-credit rights that are
not supporting obligations, all as defined in Article 9 of the
New York Uniform Commercial Code (except that the exclusion of
money, deposit accounts and letter-of-credit rights that are
not supporting obligations from the Collateral will not
affect, limit or impair any security interest of the
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Collateral Agent in any proceeds of Collateral at any time
held as money, held on deposit in any deposit account or
constituting letter-of-credit rights); provided that in the
event, and to the extent, that, after the date of the
Indenture, the security interest granted therein may be
perfected by the filing of a financing statement, money,
deposit accounts and letter-of-credit rights that are not
supporting obligations shall cease to be Excluded Assets;
(7) at any time, property that is excluded from the coverage of
Article 9 of the New York Uniform Commercial Code or in
respect of which a security interest created thereunder may
not then be perfected by the filing of a financing statement
and that has, in the good faith judgment of the Issuers, an
aggregate Fair Market Value, for all such property, of less
than $2,500,000 (except that the exclusion of such property
from the Collateral will not affect, limit or impair any
security interest of the Collateral Agent in any proceeds of
Collateral at any time held as personal property of a type
that is excluded from the coverage of Article 9 of the New
York Uniform Commercial Code or in respect of which a security
interest created thereunder may not be perfected by the filing
of a financing statement); and
(8) any asset or property owned by JII Holdings or any Restricted
Subsidiary on the date of the Indenture, in which the Priority
Lien Collateral Agent, as of the date of the Indenture, has
not been granted a perfected security interest to secure any
Priority Obligations, including, without limitation, any
interests in real property leased by JII Holdings or any of
its Restricted Subsidiaries and copyrights; provided, that, if
the Priority Lien Collateral Agent holds an unperfected
security interest in any such asset or property, such asset or
property shall be an "Excluded Asset" only with respect to the
requirement that the security interest of the Collateral Agent
therein securing Note Obligations be perfected;
provided, that any property in which JII Holdings or any other Obligor is
required to grant a security interest in favor of the Collateral Agent to secure
the Note Obligations pursuant to Section 4.12(c) of the Indenture shall not be
an Excluded Asset.
"Excluded Foreign Subsidiary" means, at any time, any Foreign
Subsidiary that is (or is treated as) for United States federal income tax
purposes either a (1) corporation or (2) pass-through entity owned directly or
indirectly by another Foreign Subsidiary that is (or is treated as) a
corporation.
"Foreign Subsidiary" means, any Restricted Subsidiary of JII
Holdings that is not a Domestic Restricted Subsidiary.
"GAAP" means, generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and a statements and
pronouncements of the Financial Accounting
5
Standards Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession, which are in
effect from time to time.
"Guarantee" means a guarantee other than by endorsement of
negotiable instruments for collection in the ordinary course of business, direct
or indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services, to take or pay or to maintain financial statement
conditions or otherwise).
"Guarantee Date" means the first date, if any, on which all the
Domestic Restricted Subsidiaries guarantee the Notes and the other Note
Obligations pursuant to Section 4.23 of the Indenture or voluntarily thereafter.
"Guarantors" means each of:
(1) Jordan;
(2) from and after the Guarantee Date, the Subsidiary Guarantors;
(3) from and after the Guarantee Date, any other Subsidiary of JII
Holdings that executes a Note Guarantee in accordance with the
provisions of the Indenture,
and their respective successors and assigns, in each case, until the Note
Guarantee of such Person has been released in accordance with the provisions of
the Indenture.
"Hedging Obligations" means, with respect to any specified Person,
the obligations of such Person under:
(1) interest rate swap agreements (whether from fixed to floating
or from floating to fixed), interest rate cap agreements and
interest rate collar agreements;
(2) other agreements or arrangements designed to manage interest
rates or interest rate risk; and
(3) other agreements or arrangements designed to protect such
Person against fluctuations in currency exchange rates or
commodity prices.
"Holder" means a person in whose name a Note is registered.
"Immaterial Subsidiary" shall have the meaning ascribed thereto in
the Indenture.
"Incentive Arrangements" shall have the meaning ascribed thereto in
the Indenture.
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"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person (excluding accrued expenses and trade payables),
whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments
or letters of credit (or reimbursement agreements in respect
thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase
price of any property or services due more than six months
after such property is acquired or such services are
completed; or
(6) representing any net Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any Indebtedness of any other Person, but shall not
include any Incentive Arrangements or obligations or payments thereunder.
"Initial Notes" means the first $173,333,300 aggregate principal
amount of Notes issued under the Indenture on the date of the Indenture.
"Insolvency or Liquidation Proceeding" means:
(1) any case commenced by or against JII Holdings or any other
Obligor under any Bankruptcy Law, any other proceeding for the
reorganization, recapitalization or adjustment or marshalling
of the assets or liabilities of JII Holdings or any other
Obligor, any receivership or assignment for the benefit of
creditors relating to JII Holdings or any other Obligor or any
similar case or proceeding relative to JII Holdings or any
other Obligor or its creditors, as such, in each case whether
or not voluntary;
(2) any liquidation, dissolution, marshalling of assets or
liabilities or other winding up of or relating to JII Holdings
or any other Obligor, in each case whether or not voluntary
and whether or not involving bankruptcy or insolvency; or
(3) any other proceeding of any type or nature in which
substantially all claims of creditors of JII Holdings or any
other Obligor are determined and any payment or distribution
is or may be made on account of such claims.
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"JII Exchange Offer" means the offer to exchange all outstanding Old
JII Notes for the Notes.
"Jordan" means Jordan Industries, Inc.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions are closed (1) in the City of New York, (2) in the city in which
the Corporate Trust Office of the Note Debt Trustee is located, (3) at a place
of payment or (4) at any other location identified in the definition of
"Business Day" (or the equivalent thereof) in the applicable Priority Lien
Document; provided that the Note Debt Trustee and the Collateral Agent have
previously been advised of such location in writing; and provided, further,
that, for purposes of the Credit Agreement, such locations shall be Illinois,
New York and North Carolina, unless and until the Note Debt Trustee and the
Collateral Agent are notified in writing of any substitute or additional
location or are authorized by law, regulation or executive order to remain
closed. If a payment date is a Legal Holiday at a place of payment, payment may
be made at that place on the next succeeding day that is not a Legal Holiday.
"Lenders" means, at any time, the parties then holding (or committed
to provide) loans, letters of credit or other extensions of credit or
obligations that constitute (or when provided will constitute) Priority
Obligations.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and, except in connection with any Qualified Receivables
Transaction, any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Note Debt" means:
(1) the Initial Notes; and
(2) any Additional Notes that are permitted to be issued under
Section 4.09 of the Indenture.
provided, that the satisfaction of the requirement in clause (2) shall be
conclusively established, for purposes of entitling the holders of such Note
Debt to share equally and ratably with the other holders of Note Obligations in
the benefits and proceeds of the Collateral Agent's security interests in the
Collateral, if JII Holdings delivers to the Collateral Agent an Officers'
Certificate stating that such requirement has been satisfied and that such Note
Debt constitutes "Note Obligations", and the holders of such Note Debt and
Obligations in respect thereof will be entitled to rely conclusively thereon.
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"Note Documents" means the Indenture, the Notes (including
Additional Notes), the Note Guarantees, the security documents and all
agreements governing, securing or relating to any Note Obligations (other than
this Agreement).
"Note Guarantee" means the Guarantee by each Guarantor of the
Issuers' obligations under the Indenture and on the Notes, executed pursuant to
the provisions of the Indenture.
"Note Lien" means a Lien granted pursuant to a security document by
JII Holdings or any other Obligor to the Collateral Agent (or any other holder,
or representative of holders, of Note Obligations) upon any property or assets
of JII Holdings or such other Obligor to secure Note Obligations.
"Note Obligations" means Note Debt and all other Obligations in
respect thereof.
"Notes" means the 13% New Secured Notes due 2007 (including without
limitation, Additional Notes).
"Obligations" means in respect of Priority Lien Documents or Note
Documents:
(1) any principal (including reimbursement obligations with
respect to letters of credit whether or not drawings have been
made thereon), interest (including any interest accruing at
the then applicable rate provided in any applicable Secured
Debt Document after the maturity of the Indebtedness
thereunder or during the existence of an event of default and
any reimbursement obligations therein and interest accruing at
the then applicable rate provided in any applicable Secured
Debt Document after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like
proceeding, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding),
penalties, fees, indemnifications, reimbursements, damages and
other liabilities payable under the Secured Debt Document;
(2) the obligation to pay an amount equal to all damages that a
court shall determine any holder of the applicable Secured
Debt has suffered by reason of a breach by the applicable
obligor thereunder of any obligation, covenant or undertaking
with respect to any applicable Secured Debt Document; and
(3) any net obligations of the obligor under any applicable
Secured Debt Document to any holder of Secured Debt (or any
representative on its behalf) or any Affiliate thereof under
any Hedging Obligations in respect of interest rates of
currency exchange rates.
"Obligor" means Jordan, JII Holdings, JII Finance and each
Subsidiary of JII Holdings that at any time is directly obligated, guarantees
and/or provides collateral security or credit support for any Note Obligations
or Priority Obligations, as the case may be.
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"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of JII
Holdings by two Officers of JII Holdings, one of whom must be the principal
executive officer, the principal financial officer, the treasurer, or the
principal accounting officer of JII Holdings, that meets the requirements of
Section 15.05 of the Indenture.
"Old JII Notes" means each of (1) the 10 3/8% Series B Senior Notes
due 2007 of Jordan (Cusip No. ▇▇▇▇▇▇▇▇▇); and (2) the 10 3/8% Series D Senior
Notes due 2007 of Jordan (Cusip No. ▇▇▇▇▇▇▇▇▇).
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Note Debt Trustee, that meets the requirements of
Section 15.05 of the Indenture. The counsel may be an employee of or counsel to
JII Holdings, the Borrower or the Note Debt Trustee.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.
"Permitted Debt" means:
(1) the incurrence by JII Holdings and its Restricted Subsidiaries
of additional Indebtedness and letters of credit under Credit
Facilities in an aggregate principal amount at any one time
outstanding under this clause (1) (with letters of credit
being deemed to have a principal amount equal to the maximum
potential liability of JII Holdings and its Restricted
Subsidiaries thereunder and Hedging Obligations being deemed
to have a principal amount equal to the net obligations of JII
Holdings and its Restricted Subsidiaries thereunder from time
to time) not to exceed the greater of:
(a) from the date of the Indenture through August 31, 2004,
$80.0 million, from September 1, 2004 through May 31,
2005, $60.0 million, from June 1, 2005 through February
28, 2006, $40.0 million, and from and after March 1,
2006, $30.0 million, in each case less 75% of the
aggregate amount of all Net Proceeds of Asset Sales
applied by JII Holdings or any of its Restricted
Subsidiaries since the date of the Indenture to repay
any term Indebtedness under a Credit Facility or to
repay any revolving credit Indebtedness under a Credit
Facility pursuant to Section 4.10 of the Indenture; or
(b) $30.0 million;
provided, however, that for purposes of calculating the amounts
available under
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this clause (1), such amounts shall be reduced by the amount of any
Indebtedness of any Receivables Subsidiary outstanding at any time;
(2) the incurrence by JII Holdings and its Restricted Subsidiaries
of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of
Indebtedness represented by the Note Debt and the related
Guarantees to be issued on or after the date of the Indenture
and the incurrence by the Issuers and the Guarantors of
Indebtedness represented by the Exchange Securities and the
related Guarantees;
(4) the incurrence by JII Holdings or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease
Obligations, mortgage financings or purchase money
obligations, in each case, incurred for the purpose of
financing all or any part of the purchase price or cost of
design, construction, installation or improvement of property,
plant or equipment used in the business of JII Holdings or any
of its Restricted Subsidiaries, in an aggregate principal
amount, including all Permitted Refinancing Indebtedness
incurred to renew, refund, refinance, replace, defease or
discharge any Indebtedness incurred pursuant to this clause
(4), not to exceed $10.0 million at any time outstanding;
(5) Indebtedness of a Subsidiary incurred and outstanding on or
prior to the date on which such Subsidiary was acquired by JII
Holdings (other than Indebtedness incurred in contemplation
of, or in connection with, the transaction or series of
related transactions pursuant to which such Subsidiary became
a Subsidiary of or was otherwise acquired by JII Holdings);
provided, that such Indebtedness is non-recourse to JII
Holdings or any of its Subsidiaries other than the Subsidiary
acquired; provided, further, that for any such Indebtedness
outstanding at any time under this clause (5) in excess of
$10.0 million on the date that such Subsidiary is acquired by
JII Holdings, JII Holdings would have been able to incur $1.00
of additional Indebtedness pursuant to Section 4.09(a) of the
Indenture after giving effect to the incurrence of such
Indebtedness pursuant to this clause (5);
(6) the incurrence by JII Holdings or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange
for, or the net proceeds of which are used to renew, refund,
refinance, replace, defease or discharge any Indebtedness
(other than intercompany Indebtedness) that was permitted by
the Indenture to be incurred under Section 4.09(a) of the
Indenture or clauses (2), (3), (5) or (6) of this definition;
(7) the incurrence by JII Holdings or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among JII
Holdings and any of its Restricted Subsidiaries; provided,
however, that:
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(a) if JII Holdings or any Subsidiary Guarantor is the
obligor on such Indebtedness and the payee is not JII
Holdings or a Subsidiary Guarantor or a Receivables
Subsidiary, such Indebtedness must be expressly
subordinated in right of payment to the prior payment in
full in cash of all Obligations then due with respect to
the Notes, in the case of JII Holdings, or the
Subsidiary Guarantee, in the case of a Subsidiary
Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being
held by a Person other than JII Holdings or a Restricted
Subsidiary of JII Holdings and (ii) any sale or other
transfer of any such Indebtedness to a Person that is
not either JII Holdings or a Restricted Subsidiary of
JII Holdings, will be deemed, in each case, to
constitute an incurrence of such Indebtedness by JII
Holdings or such Restricted Subsidiary, as the case may
be, that was not permitted by this clause (7);
(8) the issuance by any of JII Holdings' Restricted Subsidiaries
to JII Holdings or to any of its Restricted Subsidiaries of
shares of preferred equity; provided, however, that any:
(a) subsequent issuance or transfer of Equity Interests that
results in any such preferred equity being held by a
Person other than JII Holdings or a Restricted
Subsidiary of JII Holdings; and
(b) sale or other transfer of any such preferred equity to a
Person that is not either JII Holdings or a Restricted
Subsidiary of JII Holdings,
will be deemed, in each case, to constitute an issuance of
such preferred equity by such Restricted Subsidiary that was
not permitted by this clause (8);
(9) the incurrence by JII Holdings or any of its Restricted
Subsidiaries of Hedging Obligations in the ordinary course of
business;
(10) the guarantee by JII Holdings or any of the Subsidiary
Guarantors of Indebtedness of JII Holdings or a Restricted
Subsidiary of JII Holdings that was permitted to be incurred
by another provision of this definition; provided, that if the
Indebtedness being guaranteed is subordinated in right of
payment to or pari passu with the Notes, then the Guarantee
shall be subordinated or pari passu, as applicable, to the
same extent as the Indebtedness guaranteed; provided, further,
that neither JII Holdings nor any Subsidiary Guarantor may
guarantee any Indebtedness pursuant to this clause (10)
incurred under clause (5) of this definition unless JII
Holdings would have been able to incur $1.00 of additional
Indebtedness pursuant
12
to Section 4.09(a) of the Indenture after giving effect to the
incurrence of such Indebtedness pursuant to such clause (5) of
this definition;
(11) the incurrence by JII Holdings or any of its Restricted
Subsidiaries of Indebtedness in respect of workers'
compensation claims, self-insurance obligations, bankers'
acceptances, performance and surety bonds in the ordinary
course of business;
(12) the incurrence by JII Holdings or any of its Restricted
Subsidiaries of Indebtedness arising from the honoring by a
bank or other financial institution of a check, draft or
similar instrument inadvertently drawn against insufficient
funds, so long as such Indebtedness is covered within five
business days;
(13) the incurrence by Foreign Subsidiaries of Indebtedness in an
aggregate principal amount at any time outstanding pursuant to
this clause (13), including all Permitted Refinancing
Indebtedness incurred to renew, refund, refinance, replace,
defease or discharge any Indebtedness incurred pursuant to
this clause (13), not to exceed $5.0 million (or the
equivalent thereof, measured at the time of each incurrence,
in applicable foreign currency);
(14) the incurrence by JII Holdings or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate
principal amount (or accreted value, as applicable) at any
time outstanding, including all Permitted Refinancing
Indebtedness incurred to renew, refund, refinance, replace,
defease or discharge any Indebtedness incurred pursuant to
this clause (14), not to exceed $10.0 million; provided, that
such Indebtedness may not be secured;
(15) Indebtedness of JII Holdings and its Restricted Subsidiaries
in connection with the performance, surety, statutory, appeal
or similar bonds in the ordinary course of business;
(16) Indebtedness of JII Holdings and its Restricted Subsidiaries
in connection with agreements providing for indemnification,
purchase price adjustments and similar obligations in
connection with the sale or disposition of any of their
business, properties or assets to any Person that is not an
Affiliate; and
(17) the incurrence by a Receivables Subsidiary of Indebtedness in
a Qualified Receivables Transaction that is without
credit-related recourse to JII Holdings or to any other
Subsidiary of JII Holdings or their assets (other than such
Receivables Subsidiary and its assets and, as to JII Holdings
or any Subsidiary of JII Holdings, other than pursuant to
representations, warranties, covenants and indemnities
customary for such transactions) and is not guaranteed by any
such Person.
13
"Permitted Refinancing Indebtedness" shall have the meaning ascribed
thereto in the Indenture.
"Pledged Collateral" shall mean (1) any tangible property in the
possession of the Priority Lien Collateral Agent (or its agents or bailees) in
which a security interest is perfected by such possession, including, without
limitation, any investment property, cash collateral account, deposit account,
electronic chattel paper or letter of credit rights or (2) any other Collateral
as to which the Priority Lien Collateral Agent (or its agents or bailees) has
control and in which a security interest is perfected by such control. For
purposes hereof, the terms "investment property", "deposit account", "electronic
chattel paper" and "letter of credit rights" shall have the meanings given such
terms in the New York Uniform Commercial Code, as in effect on the date hereof.
"Priority Debt" means:
(1) the principal of and interest on Indebtedness under the Credit
Agreement which, when advanced (or, in the case of any
reimbursement obligation for a letter of credit issued under
the Credit Agreement, when such letter of credit was issued),
either (a) was permitted to be incurred by clause (1) of the
definition of "Permitted Debt" or (b) was advanced (or, in the
case of any such reimbursement obligation, relates to a letter
of credit that was issued) upon delivery to the Note Debt
Trustee, the Collateral Agent and the Credit Agreement Agent
of an Officers' Certificate to the effect that such
Indebtedness was permitted to be incurred by clause (1) of the
definition of "Permitted Debt," including without limitation
any such Indebtedness incurred in any insolvency or
liquidation proceeding to the extent permitted by clause (1)
of the definition of "Permitted Debt;" and
(2) the principal of and interest on Indebtedness under any Credit
Facility other than the Credit Agreement to the extent such
Indebtedness was permitted to be incurred by clause (1) of the
definition of "Permitted Debt" and by the Credit Agreement but
only if on or before the day on which such Indebtedness was
incurred by JII Holdings or any of its Restricted Subsidiaries
such Indebtedness is designated by JII Holdings, in an
Officers' Certificate delivered to the trustee, the Collateral
Agent and the Credit Agreement Agent on or before such date,
as Priority Debt for the purposes of the Indenture;
provided, that no Indebtedness under the Credit Agreement or any other Credit
Facility that, pursuant to an agreement executed by or on behalf of the Lenders,
is contractually subordinated in right of payment to any other Indebtedness
incurred other than pursuant to the Credit Agreement or other Credit Facility by
JII Holdings or any of its Subsidiaries shall constitute Priority Debt.
"Priority Lien" means a Lien granted pursuant to a Priority Lien
Document by JII Holdings or any other Obligor to any holder, or representative
of holders, of Priority Obligations upon any property or assets of JII Holdings
or such other Obligor to secure Priority Obligations.
14
"Priority Lien Collateral Agent" means the Credit Agreement Agent
or, after all Priority Obligations in respect of the Credit Agreement have been
Discharged, a single representative of all holders of Priority Liens most
recently designated by JII Holdings in an Officers' Certificate delivered to the
Collateral Agent or the successor of such representative in its capacity as
such.
"Priority Lien Documents" means the Credit Agreement, the Priority
Lien Security Documents and all other agreements governing, securing or relating
to any Priority Obligations (other than this Agreement).
"Priority Lien Security Documents" means one or more security
agreements, pledge agreements, collateral assignments, mortgages, deeds of trust
or other grants or transfers for security executed and delivered by any of JII
Holdings or any other Obligor creating (or purporting to create) a Lien upon
property owned or to be acquired by JII Holdings or any other Obligor in favor
of any holder or holders of Priority Debt, or any trustee, agent or
representative acting for any such holders, as security for any Priority
Obligations in each case, as amended, modified, renewed, restated or replaced,
in whole or in part, from time to time, in accordance with its terms.
"Priority Obligations" means the Priority Debt and all other
Obligations of JII LLC or any other Obligor under the Priority Lien Documents.
"Receivables Subsidiary" shall have the meaning ascribed thereto in
the Indenture.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Secured Debt" means Note Debt and Priority Debt.
"Secured Debt Document" means the Note Documents and the Priority
Lien Documents.
"security documents" means one or more security agreements, pledge
agreements, collateral assignments, mortgages, collateral agency agreements,
control agreements, deeds of trust or other grants or transfers for security
executed and delivered by JII Holdings or any other Obligor creating (or
purporting to create) a Note Lien upon Collateral in favor of the Collateral
Agent as security for any Note Obligations, in each case, as amended, modified,
renewed, restated or replaced, in whole or in part, from time to time, in
accordance with their terms.
"Subsidiary" shall have the meaning ascribed thereto in the
Indenture.
"Subsidiary Guarantee" means the guarantee of the Notes by a
Subsidiary Guarantor executed pursuant to the provisions of the Indenture.
"Subsidiary Guarantors" means:
15
(1) JII Holdings' direct and indirect Domestic Restricted
Subsidiaries existing on the Guarantee Date, other than the
Immaterial Subsidiaries, Receivables Subsidiaries and JII
Finance; and
(2) any other Subsidiary that executes a Subsidiary Guarantee in
accordance with the provisions of the Indenture.
"Unasserted Contingent Obligations" means, at any time, Obligations
for taxes, costs, indemnifications, reimbursements, damages and other
liabilities in respect of which no claim or demand for payment has been made at
such time (except (i) the principal of and interest and premium (if any) on, and
fees relating to, any Indebtedness, (ii) contingent obligations to reimburse the
issuer of an outstanding letter of credit for amounts that may be drawn or paid
thereunder and (iii) any such contingent claims or demands as to which the
Priority Lien Collateral Agent or any holder of Priority Obligations has then
notified JII Holdings).
"Unrestricted Subsidiary" shall have the meaning ascribed thereto in
the Indenture.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of Collateral Agent. The
Collateral Agent represents, warrants, acknowledges and agrees on behalf of
itself and any holders of the Note Obligations on the date hereof that (1) it is
authorized to enter into this Agreement on behalf of itself and each holder of
Note Obligations, (2) it has the corporate power and authority and the legal
right to execute and deliver and perform its obligations under this Agreement
and has taken all necessary corporate action to authorize its execution,
delivery and performance of this Agreement, and (3) this Agreement constitutes a
legal, valid and binding obligation of the Collateral Agent.
Section 2.2 Representations and Warranties of Administrative Agent. The
Administrative Agent represents, warrants, acknowledges and agrees on behalf of
itself and the Lenders under the Credit Agreement on the date hereof that (1) it
is authorized to enter into this Agreement on behalf of itself and such Lenders,
(2) it has the corporate power and authority and the legal right to execute and
deliver and perform its obligations under this Agreement and has taken all
necessary corporate action to authorize its execution, delivery and performance
of this Agreement, and (3) this Agreement constitutes a legal, valid and binding
obligation of the Administrative Agent.
ARTICLE 3.
INTERCREDITOR RELATIONS
Section 3.1 Agreement for the Benefit of Holders of Priority Liens. The
Note Debt Trustee and the Collateral Agent agree, and each Holder of Notes by
accepting a Note agrees, that (1) the Note Liens are, to the extent and in the
manner provided in this Article 3, junior and subordinate in ranking to all
Priority Liens, whenever granted or attaching, upon any present or future
Collateral and (2) the Priority Liens, whenever granted or attaching, upon any
present or future Collateral, will be prior and senior to the Note Liens.
16
Section 3.2 Ranking. Notwithstanding (a) anything to the contrary
contained in the Security Documents, (b) the time of incurrence of any Secured
Debt, (c) the time, order or method of attachment of the Note Liens or the
Priority Liens, (d) the time or order of filing or recording of financing
statements or other documents filed or recorded to perfect any Lien upon any
Collateral, (e) the time of taking possession or control over any Collateral,
(f) the rules for determining priority under the Uniform Commercial Code or any
other law governing relative priorities of secured creditors, (g) that any
Priority Lien may not have been perfected, (h) that any Priority Lien may be or
have become subordinated, by equitable subordination or otherwise, to any other
Lien, or (i) any other circumstance of any kind or nature whatsoever, whether
similar or dissimilar to any of the foregoing, the Note Liens will in all
circumstances be junior and subordinate in ranking to all Priority Liens,
whenever granted, upon any present or future Collateral, and the Priority Liens,
whenever granted, upon any present or future Collateral to the extent the
Priority Liens secure the Priority Obligations will be prior and superior to the
Note Liens.
Section 3.3 Collateral Sharing with Additional Notes. Any Additional Notes
issued under the Indenture in accordance with the requirements set forth in the
definition of "Note Debt" and permitted to be incurred under the Credit
Facilities and Section 4.09 of the Indenture will be treated as Note Obligations
for all purposes under the Indenture and the Security Documents.
Section 3.4 Restriction on Enforcement of Note Liens.
(a) So long as any Priority Obligations exist that have not been
Discharged, the holders of Priority Liens will have the exclusive right to
enforce, foreclose, collect or realize upon any Collateral. Subject to Section
3.14 and the second set of clauses (1) through (4) below, the Note Debt Trustee
and Holders of Notes will not authorize or instruct the Collateral Agent, and
the Collateral Agent will not, and will not authorize or direct any Person
acting for it, the Note Debt Trustee or any holder of Note Obligations, to
exercise any right or remedy with respect to any Collateral (including any right
of set-off) or take any action to enforce, collect or realize upon any
Collateral, including without limitation, any right, remedy or action to:
(1) take possession of or control over any Collateral;
(2) exercise any collection rights in respect of any
Collateral or retain any proceeds of accounts and other obligations
receivable paid to it directly by any account debtor;
(3) exercise any right of set-off against any Collateral;
(4) foreclose upon any Collateral or take or accept any
transfer of title in lieu of foreclosure upon any Collateral;
(5) enforce any claim to the proceeds of insurance upon any
Collateral;
(6) deliver any notice, claim or demand relating to the
Collateral to any Person (including any securities intermediary,
depositary bank or landlord) in the
17
possession or control of any Collateral or acting as bailee, custodian or
agent for any holder of Priority Liens in respect of any Collateral;
(7) otherwise enforce any remedy available upon default for
the enforcement of any Lien upon the Collateral;
(8) deliver any notice or commence any proceeding for any of
the foregoing purposes; or
(9) seek relief in any Insolvency or Liquidation Proceeding
permitting it to do any of the foregoing;
except that, in any event, any such right or remedy may be exercised and any
such action may be taken, authorized or instructed:
(1) without any condition or restriction whatsoever, so long
as no Priority Obligations exist that have not been Discharged;
(2) as necessary to redeem any Collateral in a creditor's
redemption permitted by law or to deliver any notice or demand necessary
to enforce (subject to no Priority Obligations existing that have not been
Discharged) any right to claim, take or receive proceeds of Collateral
remaining at any time when no Priority Obligations exist that have not
been Discharged in the event of foreclosure or other enforcement of any
prior Lien;
(3) as necessary to perfect, or maintain the perfection or
priority of, a Lien upon any Collateral by any method of perfection except
through possession or control; or
(4) as necessary to prove, preserve or protect (but not
enforce) the Note Liens, in each case, subject to the provisions of the
Security Documents.
(b) Notwithstanding the terms of clause (a) above, none of the
rights and remedies otherwise available to the holders of Priority Liens in
respect of the foreclosure or other enforcement of Priority Liens and none of
the other rights and remedies of the holders of Priority Liens and Priority
Obligations under the Priority Lien Documents may be impaired, restricted or
affected by this Article 3 or by any actions taken by the holders of Priority
Liens hereunder which are not in violation of the terms of this Agreement.
(c) At any time any Priority Obligations exist that have not been
Discharged:
(1) the Priority Lien Collateral Agent will have the sole
right to adjust settlement of all insurance claims and condemnation awards
in the event of any covered loss, theft, destruction or condemnation of
any Collateral and all claims under insurance constituting Collateral;
18
(2) all proceeds of insurance on or constituting Collateral
and all condemnation awards resulting from a taking of any Collateral will
inure to the benefit of, and will be paid to, the holders of the Priority
Liens; and
(3) the Collateral Agent will co-operate, if necessary and
as reasonably requested by the Priority Lien Collateral Agent, in
effecting the payment of insurance proceeds to the Priority Lien
Collateral Agent. If the Collateral Agent unreasonably fails to do so, the
holder of any Priority Lien is hereby irrevocably authorized and
empowered, with full power of substitution, to execute and deliver any
documents or instruments in the name of the Collateral Agent reasonably
required to effect the payment of insurance proceeds to the Priority Lien
Collateral Agent.
(d) Subject to Section 3.14 (other than clauses (4) and (5) of
Section 3.14), so long as there are any Priority Obligations existing that have
not been Discharged, none of the Holders of Notes, the Note Debt Trustee or the
Collateral Agent will:
(1) request judicial relief, in an Insolvency or Liquidation
Proceeding or in any other court, that would hinder, delay, limit or
prohibit the lawful exercise or enforcement of any right or remedy
otherwise available to the holders of Priority Liens in respect of
Priority Liens or that would limit, invalidate, avoid or set aside any
Priority Lien or Priority Lien Security Document or subordinate the
Priority Liens to the Note Liens or grant the Priority Liens equal ranking
to the Note Liens;
(2) oppose or otherwise contest any motion for relief from
the automatic stay or from any injunction against foreclosure or
enforcement of Priority Liens made by any holder of Priority Liens in any
Insolvency or Liquidation Proceeding;
(3) oppose or otherwise contest any lawful exercise by any
holder of Priority Liens of the right to credit bid Priority Debt at any
sale in foreclosure of Priority Liens;
(4) oppose or otherwise contest any other request for
judicial relief made in any court by any holder of Priority Liens relating
to the lawful enforcement of any Priority Lien;
(5) request relief from the automatic stay; or
(6) challenge the enforceability, perfection or the validity
of the Priority Obligations or the Priority Liens.
(e) Except for payments received free from the Priority Liens as
provided in Section 3.4(f)(2), below, all proceeds of Collateral received by the
Note Debt Trustee or the Collateral Agent at any time when any Priority
Obligations exist that have not been Discharged will be held by the Note Debt
Trustee or the Collateral Agent for account of the holders of Priority Liens and
remitted to the Priority Lien Collateral Agent upon demand by the Priority Lien
Collateral Agent. To the extent provided by applicable law, the Note Liens will
remain attached to and, subject to this Article 3, enforceable against all
proceeds so held or remitted.
19
(f) Except for payments that are made from or constitute proceeds
of property subject to Priority Liens and that are received by the Note Debt
Trustee or the Collateral Agent or any holder of Note Obligations at any time
when any Priority Obligations exist that have not been Discharged and after (i)
the commencement of any Insolvency or Liquidation Proceeding in respect of JII
Holdings or the grantor of any Priority Lien or (ii) the Note Debt Trustee and
the Collateral Agent have received written notice from the Priority Lien
Collateral Agent stating that (A) the Priority Debt has become due and payable
in full (whether at maturity, upon acceleration or otherwise) or (B) the holders
of Priority Liens have become entitled to, and desire to, enforce any or all of
the Priority Liens by reason of a default under Priority Lien Documents:
(1) no payment of money (or the equivalent of money) made by
JII Holdings or any other Obligor to the Note Debt Trustee, the Collateral
Agent, any Holder of Notes or any other holder of Note Obligations
(including, without limitation, payments or prepayments made for
application to Note Obligations) or any other payments and deposits made
pursuant to any provision of the Indenture, any other Note Document and
this Agreement will in any event be subject to the foregoing provisions of
this Section 3.4 or otherwise affected by any of the provisions of Section
3.14; and
(2) all payments permitted to be received under Section
3.4(f)(1) will be received by the Note Debt Trustee, the Collateral Agent,
the Holders of Notes and the other holders of Note Obligations free from
the Priority Liens and all other Liens thereon except the Note Liens.
(g) Prior to the issuance of the Subsidiary Guarantees, so long as
any Priority Lien Obligations exist that have not been Discharged, none of the
Note Debt Trustee, the Collateral Agent or the Holder of any Note will (1) take
any action, directly or indirectly, which results in the sale, foreclosure,
realization on or liquidation of any assets of any of the Issuers' Subsidiaries,
(2) institute or exercise against any such Subsidiary any suit, legal action,
arbitration or other enforcement right or remedy, (3) file any petition or lien
under any bankruptcy, insolvency or creditors' rights laws with respect to any
such Subsidiary or (4) otherwise demand or take any payment from any such
Subsidiary on account of any Obligations under the Note Documents; provided,
however, that the foregoing shall not prohibit the Note Debt Trustee, the
Collateral Agent or the Holder of any Note from exercising its rights under the
second set of items (1) through (4) of Section 3.4(a) hereof; and provided,
further, that the suspension of the rights of the Note Debt Trustee, the
Collateral Agent or any Holder of Note Obligations pursuant to this Section
3.4(g) will not constitute, or be deemed to constitute, from and after the
issuance of the Subsidiary Guarantees or at any time there are no Priority Lien
Obligations existing that have not been Discharged, a waiver of the rights which
the Note Debt Trustee, the Collateral Agent and any Holder of Note Obligations
have under Section 3.4(a) hereof.
(h) Notwithstanding any other provision of the Indenture or any
other Note Document, the right of any Holder of a Note to receive from the
Issuers, Jordan and, after issuance of the Subsidiary Guarantees, if any, the
Subsidiary Guarantors, payment of the principal, premium and liquidated damages,
if any, and interest on the Notes held by such Holder, on or after the
respective due dates for payment from the Issuers, Jordan and, after issuance of
the Subsidiary Guarantees, if any, the Subsidiary Guarantors expressed in the
Note
20
(including in connection with an offer to purchase), or to institute suit
against the Issuers, Jordan and, after issuance of the Subsidiary Guarantees, if
any, the Subsidiary Guarantors for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the
consent of such Holder; provided that a Holder shall not have the right to
institute any such suit against Jordan, the Issuers or, after issuance of the
Subsidiary Guarantees, if any, the Subsidiary Guarantors for the enforcement of
payment if and to the extent that the surrender or prosecution thereof or the
entry of judgment therein would, under applicable law, result in the surrender,
impairment, waiver or loss of the Lien of the Indenture upon any property
subject to such Lien.
Section 3.5 Insolvency or Liquidation Proceedings.
(a) The provisions of this Article 3 will be applicable both
before and after the filing of any petition by or against any Obligor under any
insolvency or bankruptcy law and all converted or succeeding cases in respect
thereof, and all references herein to any Obligor shall be deemed to apply to
the trustee for such Obligor and such Obligor as a debtor-in-possession. The
relative rights of secured creditors in or to any distributions from or in
respect of any Collateral or proceeds of Collateral shall continue after the
filing of such petition on the same basis as prior to the date of such filing,
subject to any court order approving the financing of, or use of cash collateral
by any Obligor as debtor-in-possession. If, in any Insolvency or Liquidation
Proceeding and at any time any Priority Obligations exist that have not been
Discharged, all of the Lenders (or such number of the Lenders as may have the
power to bind all of them):
(1) consent to any order for use of cash collateral or agree
to the extension of any Priority Debt (including, without limitation, any
debtor-in-possession financing) to any Obligor to the extent constituting
Indebtedness permitted to be incurred by clause (1) of the definition of
"Permitted Debt;"
(2) consent to any order granting any priming lien,
replacement lien, cash payment or other relief on account of Priority
Obligations as adequate protection (or its equivalent) for the interests
of the holders of Priority Liens in the property subject to such Priority
Liens;
(3) consent to any order approving post-petition financing
pursuant to ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Bankruptcy Code (including,
without limitation, any "roll-up" of Priority Obligations); and
(4) consent to any order relating to a sale of assets of JII
Holdings or any other Obligor that:
(i) provides, to the extent the sale is to be free and
clear of Liens, that all Priority Liens and Note Liens will attach
to the proceeds of the sale; and
(ii) grants Credit Bid Rights to the Holders of Notes
to the extent the Collateral Agent is not prohibited from receiving
Credit Bid Rights under applicable law,
21
then, the Holders of Note Obligations, the Note Debt Trustee and the Collateral
Agent will not oppose or otherwise contest the entry of such order.
(b) The Holders of Note Obligations, the Note Debt Trustee and the
Collateral Agent will not file or prosecute in any Insolvency or Liquidation
Proceeding any motion for adequate protection (or any comparable request for
relief) based upon their interests in the Collateral under the Note Liens,
except that:
(1) they may freely seek and obtain relief granting a junior
lien co-extensive in all respects with, but subordinated (as set forth in
this Article 3) in all respects to, all Liens granted in such Insolvency
or Liquidation Proceeding to the holders of Priority Debt; or
(2) they may assert rights in connection with the
confirmation of any plan of reorganization or similar dispositive
restructuring plan (other than to the extent such plan provides for the
liquidation of assets or properties of JII Holdings or any other Obligor);
and
(3) they may freely seek and obtain any relief upon a motion
for adequate protection or for relief from the automatic stay (or any
comparable relief), without any condition or restriction whatsoever, at
any time when no Priority Obligations exist that have not been Discharged.
(c) If, in any Liquidation or Insolvency Proceeding, debt
obligations of the reorganized debtor secured by Liens upon any property of the
reorganized debtor are distributed, both on account of Priority Debt and on
account of the Note Debt, then, to the extent the debt obligations distributed
on account of the Priority Debt and on account of the Note Debt are secured by
Liens upon the same property or type of property, the provisions of this Article
3 will survive the distribution of such debt obligations pursuant to such plan
and will apply with like effect to the Liens securing such debt obligations.
(d) The Holders of Note Obligations, the Note Debt Trustee and the
Collateral Agent will not assert or enforce, at any time when any Priority
Obligations exist that have not been Discharged, any claim under Section 506(c)
of the United States Bankruptcy Code senior to or on a parity with the Priority
Liens for costs or expenses of preserving or disposing of any Collateral.
Section 3.6 Release of Collateral or Note Guarantees upon Sale or Other
Disposition.
(a) If, at any time when any Priority Obligations exist that have
not been Discharged, JII Holdings or the holder of any Priority Lien delivers a
certificate from an Officer of such Person to Note Debt Trustee and the
Collateral Agent that:
(1) any specified Collateral (other than all or
substantially all of the Capital Stock of a Subsidiary of JII Holdings) is
sold, transferred or otherwise disposed of:
(A) by the owner of such Collateral in a transaction
permitted under the Priority Lien Documents and the Indenture;
or
22
(B) during the existence of any Event of Default under
(and as defined in) the Credit Agreement to the extent the
Priority Lien Collateral Agent has consented to such sale,
transfer or disposition; provided, however, that the Priority
Lien Collateral Agent shall remit to the Collateral Agent the
proceeds, if any, of such distribution remaining at any time
when no Priority Obligations exist that have not been
Discharged or as ordered by a court of competent jurisdiction;
and
(2) all Liens upon such Collateral (not including the
proceeds payable to the Priority Lien Collateral Agent pursuant to clause
(1)(B) above) securing Priority Obligations or Collateral, as the case may
be, will be forever released and discharged upon such sale, transfer or
other disposition,
then (whether or not any Insolvency or Liquidation Proceeding is pending at the
time) the Note Liens upon such Collateral (not including the proceeds payable to
the Collateral Agent pursuant to clause (1)(B) above) will automatically be
released and discharged as and when and to the extent such Liens on such
Collateral securing Priority Obligations are released and discharged.
(b) If, at any time when any Priority Obligations exist that have
not been Discharged, JII Holdings or the holder of any Priority Lien delivers a
certificate of an Officer of such Person to the Note Debt Trustee and the
Collateral Agent that:
(1) all or substantially all Capital Stock owned by JII
Holdings and its Restricted Subsidiaries in any Subsidiary of JII Holdings
(a "Sold Subsidiary") is sold, transferred or otherwise disposed of
(whether directly by transfer of Capital Stock issued by the Sold
Subsidiary or indirectly by transfer of Capital Stock of other
Subsidiaries which, directly or indirectly, own Capital Stock issued by
the Sold Subsidiary):
(A) by the owner of such Capital Stock in a
transaction permitted under the Priority Lien Documents and
the Note Documents; or
(B) during the existence of any Event of Default under
(and as defined in) the Credit Agreement to the extent the
Priority Lien Collateral Agent has consented to such sale,
transfer or disposition; provided, however, that the Priority
Lien Collateral Agent shall remit to the Collateral Agent the
proceeds, if any, of such distribution remaining at any time
when no Priority Obligations exist that have not been
Discharged or as ordered by a court of competent jurisdiction;
and
(2) all Guarantees of Priority Obligations made by the Sold
Subsidiary and all Liens upon property of the Sold Subsidiary securing
Priority Obligations (not including the proceeds payable to the Priority
Lien Collateral Agent payable pursuant to clause (1)(B) above) will be
forever released and discharged upon such sale, transfer or other
disposition,
then (whether or not any Insolvency or Liquidation Proceeding is pending at the
time) the Note Guarantee, if any, made by such Sold Subsidiary, the Lien on the
Capital Stock of such Subsidiary and all Note Liens upon the property of such
Sold Subsidiary will automatically be
23
released and discharged as and when and to the extent such guarantee by such
Sold Subsidiary of Priority Obligations (not including the proceeds payable to
the Collateral Agent pursuant to clause (1)(B) above) and Liens on such Sold
Subsidiary's Collateral securing Priority Obligations are released and
discharged.
(c) Upon delivery to the Note Debt Trustee and the Collateral
Agent of an Officers' Certificate stating that any release of Note Liens has
become effective pursuant to Section 3.6(a) or 3.6(b), the Collateral Agent will
promptly execute and deliver an instrument confirming such release on customary
terms and without any recourse, representation, warranty or liability
whatsoever. If the Collateral Agent unreasonably fails to do so, the holder of
the Priority Lien is hereby irrevocably authorized and empowered, with full
power of substitution, to execute and deliver such instrument in the name of the
Collateral Agent.
Section 3.7 Amendment of Security Documents.
(a) At any time when any Priority Obligations exist that have not
been Discharged, the Collateral Agent will not enter into, and the Note Debt
Trustee and the Holders of Notes will not authorize or direct, any amendment of
or supplement to any Security Document relating to any Collateral that would
make such Security Document inconsistent in any material respect with the
comparable provisions of the Priority Lien Security Documents upon such
Collateral and no such amendment or supplement will be enforceable.
For the purposes of Section 3.7(a), (i) no inconsistency reflected
in the Security Documents delivered in connection with the issuance of the
Notes, as compared with the comparable provisions of the applicable Priority
Lien Security Documents then in effect, will be subject to the provisions of
Section 3.7(a), and (ii) any provision granting rights or powers to the
Collateral Agent that are not granted to the holders of Priority Liens securing
Priority Debt will constitute a material inconsistency.
(b) No amendment, supplement, waiver or change otherwise permitted
by this Agreement in respect of the Priority Lien Documents will be prohibited
or in any manner restricted or affected by, or by reason of, the provisions of
this Article 3.
(c) Notwithstanding Section 3.7(a) or (b), without the consent of
any Holder of Notes, the Issuers and the Note Debt Trustee may, with consent of
the Collateral Agent, amend or supplement this Agreement to:
(1) cure any ambiguity, defect or inconsistency; or
(2) make any change that would provide any additional rights
or benefits to the Holders of the Notes or that does not
adversely affect the rights under this Agreement of any
such Holder.
24
Section 3.8 Waiver of Certain Subrogation, Marshalling, Appraisal and
Valuation Rights.
(a) To the fullest extent permitted by law, the Holders of Notes,
the Note Debt Trustee and the Collateral Agent agree not to assert or enforce at
any time any Priority Obligations exist that have not been Discharged:
(1) any right of subrogation to the rights or interests of
holders of Priority Liens (or any claim or defense based upon impairment
of any such right of subrogation);
(2) any right of marshalling accorded to a junior
lienholder, as against the holders of Priority Liens (as priority
lienholders), under equitable principles; or
(3) any statutory right of appraisal or valuation accorded
under any applicable state law to a junior lienholder in a proceeding to
foreclose a Priority Lien.
(b) Without in any way limiting the generality of the foregoing,
each holder of Priority Obligations or Priority Liens may at any time and from
time to time, without the consent of or notice to any holder of Note Obligations
or Note Liens, without incurring any responsibility or liability to any holder
of Note Obligations or Note Liens, and without in any manner prejudicing,
affecting or impairing the ranking agreements and other obligations set forth in
this Article 3:
(1) make loans and advances to the Borrower, JII Holdings or
any of their respective Subsidiaries or issue, guaranty or obtain letters
of credit for account of JII Holdings or any of its Subsidiaries or
otherwise extend credit to the Borrower, JII Holdings or any of their
respective Subsidiaries, in any amount (subject to the provisions of the
Indenture relating to the maximum amount of the Priority Debt) and on any
terms, whether pursuant to a commitment or as a discretionary advance and
whether or not any default or event of default or failure of condition is
then continuing;
(2) change the manner, place or terms of payment or extend
the time of payment of, or renew or alter, compromise, accelerate, extend
or refinance, any Priority Obligations or any agreement, guaranty, Lien or
obligation of the Borrower, JII Holdings or any of their respective
Subsidiaries or any other person or entity in any manner related thereto,
or otherwise amend, supplement or change in any manner any Priority
Obligations or Priority Liens or any such agreement, guaranty, lien or
obligation;
(3) increase or reduce the amount of any Priority Lien
Obligation (subject to the provisions of the Indenture relating to the
maximum amount of the Priority Debt) or the interest, premium, fees or
other amounts payable in respect thereof;
(4) release or discharge any Priority Lien Obligation or any
guaranty thereof or any agreement or obligation of the Borrower, JII
Holdings or any of their respective Subsidiaries or any other person or
entity with respect thereto;
25
(5) take or fail to take any Priority Lien or any other
collateral security for any Priority Lien Obligation or take or fail to
take any action which may be necessary or appropriate to ensure that any
Priority Lien or any other Lien upon any property is duly enforceable or
perfected or entitled to priority as against any other Lien or to ensure
that any proceeds of any property subject to any Lien are applied to the
payment of any Priority Lien Obligation or any other obligation secured
thereby;
(6) release, discharge or permit the lapse of any or all
Priority Liens or any other Liens upon any property at any time securing
any Priority Lien Obligation;
(7) exercise or enforce, in any manner, order or sequence,
or fail to exercise or enforce, any right or remedy against the Borrower,
JII Holdings or any other Obligor or any collateral security or any other
person, entity or property in respect of any Priority Lien Obligation or
any Priority Lien or other Lien securing any Priority Lien Obligation or
any right or power under this Article 3, and apply any payment or proceeds
of collateral in any order of application; or
(8) sell, exchange, release, foreclose upon or otherwise
deal with any property that may at any time be subject to any Priority
Lien or any other Lien securing any Priority Lien Obligation.
(c) No exercise, delay in exercising or failure to exercise any
right arising under this Article 3, no act or omission of any holder of Priority
Liens or Priority Obligations in respect of the Borrower, JII Holdings or any of
their respective Subsidiaries or any other person or entity or any Collateral or
any right arising under this Article 3, no change, impairment, or suspension of
any right or remedy of any holder of any Priority Liens or Priority Obligations,
and no other lawful act, failure to act, circumstance, occurrence or event
which, but for this provision, would or could act as a release or exoneration of
any obligation under this Article 3 will in any way affect, decrease, diminish
or impair any of the ranking agreements and other obligations of the Holders of
Notes, the Note Debt Trustee and the Collateral Agent set forth in this Article
3.
(d) The Lenders, the Priority Lien Collateral Agent and the other
holders of Priority Liens or Priority Obligations will not have any duty
whatsoever, express or implied, fiduciary or otherwise, to any holder of Note
Obligations or Note Liens.
(e) To the maximum extent permitted by law, each of the Holders of
Notes, the Note Debt Trustee and the Collateral Agent waives any claim it may at
any time have against the Lenders, the Priority Lien Collateral Agent or any
other holder of Priority Liens or Priority Obligations with respect to or
arising out of any action or failure to act or any error of judgment or
negligence on the part of the Lenders, the Priority Lien Collateral Agent or any
other holder of Priority Liens or Priority Obligations or their respective
directors, officers, employees or agents with respect to any exercise of rights
or remedies in respect of the Priority Liens or the Priority Obligations or
under the Priority Lien Documents or any transaction relating to the Collateral.
Neither any Lender nor any Priority Lien Collateral Agent nor any other holder
of Priority Liens or Priority Obligations nor any of their respective directors,
officers, employees or agents will be liable for failure to demand, collect or
realize upon any of the Collateral or for any delay in doing
26
so, except to the extent arising out of the gross negligence or willful
misconduct (as determined by a final judgment of a court of competent
jurisdiction) of such Lender, Priority Lien Collateral Agent or other holder or
its directors, officers, employees or agents, or will be under any obligation to
sell or otherwise dispose of any Collateral upon the request of JII Holdings or
any other Obligor or upon the request of any holder of Note Obligations, or Note
Liens or any other Person or to take any other action whatsoever with regard to
the Collateral or any part thereof.
(f) The holders of Priority Liens and Priority Obligations, on the
one hand, and the holders of Note Obligations, or Note Liens, on the other hand,
shall each be responsible for keeping themselves informed of the financial
condition of the Borrower, JII Holdings and their respective Subsidiaries and
all other circumstances bearing upon the risk of nonpayment of the Priority
Obligations or Note Obligations. The holders of Priority Liens and Priority
Obligations and the Priority Lien Collateral Agent shall have no duty to advise
the Note Debt Trustee or any holder of Note Obligations, Note Liens of
information regarding such condition or circumstances or as to any other matter.
If any holder of Priority Liens or Priority Obligations or any Priority Lien
Collateral Agent, in its sole discretion, undertakes at any time or from time to
time to provide any such information to the Note Debt Trustee or any holder of
Note Obligations, or Note Liens, it shall be under no obligation to provide any
similar information on any subsequent occasion, to provide any additional
information, to undertake any investigation, or to disclose any information
which, pursuant to accepted or reasonable commercial finance practice, it wishes
to maintain confidential.
Section 3.9 Limitation on Certain Relief and Defenses.
(a) No action taken or omitted for the benefit of the holders of
Priority Liens by the Borrower, JII Holdings or any of their respective
Subsidiaries in breach of any covenant set forth in the Indenture will
constitute a defense to the enforcement of the provisions of this Article 3 by
such holders in accordance with the terms of this Article 3, if, when such
action was taken or omitted, such holders received and in good faith relied on
an Officers' Certificate or Opinion of Counsel to the effect that such action
was permitted under the Indenture.
(b) The Note Liens will not be forfeited, invalidated, discharged
or otherwise affected or impaired by any breach of any obligation of the Holders
of Notes, the Note Debt Trustee or the Collateral Agent set forth in this
Article 3.
(c) The Priority Liens will not be forfeited, invalidated,
discharged or otherwise affected or impaired by any breach of any obligation of
the Priority Lien Collateral Agent set forth in this Article 3.
Section 3.10 Reinstatement.
(a) If the payment of any amount applied to any Priority
Obligations secured by any Priority Liens is later avoided or rescinded
(including by settlement of any claim for avoidance or rescission) or otherwise
set aside, then:
(1) to the fullest extent lawful, all claims for the payment
of such amount as Priority Obligations and, to the extent securing such
claims, all such Priority Liens will be reinstated and entitled to the
benefits of this Article 3; and
27
(2) if a Discharge of the Priority Obligations became
effective prior to such reinstatement, the contractual priority of the
Priority Liens so reinstated, as set forth in Section 3.2, will be
concurrently reinstated on the date and to the extent such Priority Liens
are reinstated, beginning on such date, as though no Priority Obligations
or Priority Liens had been outstanding at any time prior to such date, and
will remain effective until the claims secured by the reinstated Priority
Liens are paid in full in cash;
provided that JII Holdings shall deliver forthwith an Officers' Certificate,
and/or the Priority Lien Collateral Agent or any holder of Priority Obligations
may deliver a written notice, to the Collateral Agent and the Note Debt Trustee
for each Series of Note Debt then outstanding stating that Priority Obligations
have been reinstated and identifying the Priority Obligations so reinstated.
(b) Notwithstanding the foregoing, no:
(1) action to enforce Note Liens at any time prior to the
date of any reinstatement pursuant to Section 3.10(a) (or, if later, the
date on which the Officers' Certificate or written notice referred to in
Section 3.10(a) is delivered to the Note Debt Trustee and the Collateral
Agent);
(2) receipt or collection of Collateral or any other
property by the Holders of Notes, the Note Debt Trustee or the Collateral
Agent at any time prior to the date of any such reinstatement (or, if
later, the date on which the Officers' Certificate or written notice
referred to in Section 3.10(a) is delivered to the Note Debt Trustee and
the Collateral Agent);
(3) application of any Collateral or other property to the
payment of Note Obligations at any time prior to the date of any such
reinstatement (or, if later, the date on which the Officers' Certificate
or written notice referred to in Section 3.10(a) is delivered to the Note
Debt Trustee and the Collateral Agent); or
(4) other action taken or omitted by the Holders of Notes,
the Note Debt Trustee or the Collateral Agent or other event occurring at
any time prior to the date of any such reinstatement (or, if later, the
date on which the Officers' Certificate or written notice referred to in
Section 3.10(a) is delivered to the Note Debt Trustee and the Collateral
Agent),
will, if it was permitted at such time under this Article 3 without giving
effect to any subsequent reinstatement under Section 3.10(a), (1) constitute a
breach of any obligation of the Holders of Notes, the Note Debt Trustee or the
Collateral Agent under this Article 3 or (2) subject to Section 3.10(c), give
rise to any right, claim or interest whatsoever enforceable by any holder of
Priority Liens or Priority Obligations or by any other Person.
(c) Notwithstanding any contrary provision in this Section 3.10,
in the case of clauses (2) and (3) of Section 3.10(b), any net proceeds received
by, or on behalf of, the Note Debt Trustee, the Collateral Agent or any Holder
of Notes, prior to the date of reinstatement of the Priority Obligations, from
any receipt, collection or application, or any other enforcement
28
action of any kind taken against, Collateral less than 91 days after the date on
which the applicable Priority Lien Obligation was paid in full shall be turned
over to the Priority Lien Collateral Agent for application to the Priority
Obligations in accordance with this Agreement; provided, however, that the Note
Debt Trustee and the Collateral Agent, as applicable, shall not distribute any
such net proceeds to any Holder of Notes until such 91st day. Notwithstanding
the foregoing, to the extent any case is commenced by or against JII Holdings or
any other Obligor under any Bankruptcy Law within 90 days after the date on
which the Priority Obligations are paid in full, such net proceeds received
prior to the commencement of the case shall be held by the Note Debt Trustee or
the Collateral Agent until the earliest of (i) the date on which any plan of
reorganization or any similar dispositive restructuring plan in respect of the
case is confirmed, (ii) the date on which the Priority Lien Collateral Agent
receives an order from the bankruptcy court reasonably satisfactory to it
stating that the Discharge of the Priority Obligations shall not be avoided or
rescinded, (iii) the date on which any of the Priority Obligations are avoided
or rescinded, in which case such net proceeds shall be turned over to the
Priority Lien Collateral Agent for application to the Priority Obligations in
accordance with this Agreement (to the extent not prohibited by the bankruptcy
court) or (iv) the entry of an order for the bankruptcy court directing the
application of such net proceeds.
Section 3.11 Amendment; Waiver.
(a) No amendment or supplement to the provisions of this Article 3
will:
(1) be effective unless set forth in a writing signed by the
Note Debt Trustee with the consent of the holders of at least a majority
in principal amount of the Notes then outstanding (including, without
limitation, Additional Notes);
(2) become effective at any time any Priority Obligations
exist that have not been Discharged unless such amendment or supplement is
consented to in a writing signed by the Priority Lien Collateral Agent
acting upon the direction or with the consent of the holders of the
applicable percentage (as required under the Credit Facilities) in
principal amount of all Priority Debt then outstanding or committed under
the Credit Facilities, voting as a single class.
Any such amendment or supplement that:
(A) imposes any obligation upon the Issuers or
adversely affects the rights of the Issuers under
Section 3.3 will become effective only with the consent
of the Issuers; or
(B) imposes any obligation upon the Collateral
Agent or adversely affects the rights of the Collateral
Agent in its individual capacity at any time when the
Note Debt Trustee is not the Collateral Agent will
become effective only with the consent of the Collateral
Agent.
(b) No waiver of any of the provisions of this Article 3 will in
any event be effective unless set forth in a writing signed and consented to, as
required for an amendment under this Section 3.11, by the party to be bound
thereby.
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Section 3.12 Enforcement.
(a) The provisions of this Article 3 are intended for the sole
benefit of, and may be enforced solely by, the holders of Priority Liens and
Priority Obligations granted and outstanding from time to time; provided,
however, that:
(1) the provisions of Section 3.3 are intended for the sole
benefit of the Issuers and may be enforced by the Issuers solely upon the
terms and conditions set forth in Section 3.3;
(2) the definition of "Priority Debt" is intended for the
benefit of both the holders of Priority Liens and Priority Obligations
granted and outstanding from time to time and the Issuers; and
(3) the provisions of Sections 3.4(g), 3.4(h) and 3.17 are
intended for the sole benefit of, and may be enforced solely by, the
holders of Note Liens and Note Obligations granted and outstanding from
time to time.
(b) The rights of the Holders of Notes and the Collateral Agent
set forth in Sections 3.4, 3.5 and 3.10 are intended for the sole benefit of the
Holders of Notes and the Collateral Agent and may be enforced only by the
Holders of Notes or by the Collateral Agent.
(c) The obligations of the Holders of Notes, the Note Debt Trustee
and the Collateral Agent set forth in Sections 3.4, 3.5, 3.6, 3.7, 3.8 and 3.10:
(1) are intended for the sole benefit of the holders of
Priority Obligations and may be enforced only by the holders of Priority
Obligations or by the Priority Lien Collateral Agent; and
(2) will terminate, unconditionally and (subject only to
Section 3.10) forever, upon either of (a) no Priority Obligations existing
that have not been Discharged or (b) the release of the Note Liens in
whole as provided under Section 11.06 of the Indenture.
(d) No right to enforce the ranking agreements or any other
obligation set forth in this Article 3 may be impaired by any act or failure to
act by the Issuers, the Note Debt Trustee or any holder of Note Obligations or
by the failure of the Issuers, the Note Debt Trustee or any holder of Note
Obligations to comply with this Agreement.
(e) The obligations of the Holders of Notes, the Note Debt Trustee
and the Collateral Agent under this Article 3 are continuing obligations that
may be terminated only by an amendment that becomes effective as set forth in
Section 3.11.
(f) Except for the Persons identified in this Section, to the
extent and as to the obligations set forth in this Section, no other Person will
be entitled to rely on, have the benefit of or enforce the lien ranking
agreements or any other obligation set forth in this Article 3.
30
Section 3.13 Limitations on Subordination of Notes and Other Note
Obligations. The provisions of this Article 3 are intended solely to set forth
the relative ranking, as Liens, of the Note Liens as against the Priority Liens.
Except as otherwise provided in this Agreement, neither the Notes, the Note
Guarantees and other Note Obligations nor the exercise or enforcement of any
right or remedy for the payment or collection thereof (other than the
restrictions with respect to the enforcement of remedies against the Collateral
and Subsidiaries of the Issuers as set forth in this Agreement) are intended to
be, or will ever be by reason of the provisions of this Article 3, in any
respect subordinated, deferred, postponed, restricted or prejudiced.
Section 3.14 Relative Rights. This Article 3 defines the relative rights,
as lienholders, of holders of Note Liens and holders of Priority Liens. Nothing
in this Agreement will:
(1) impair, as between the Issuers and Holders of Notes, the
obligation of the Issuers, which is absolute and unconditional, to pay
principal of, premium and interest and Liquidated Damages, if any, on the
Notes in accordance with their terms or to perform any other obligation of
the Company or any other Obligor under the Note Documents;
(2) affect the relative rights of Holders of Notes and
creditors of the Issuers or any of JII Holdings' Restricted Subsidiaries
or any other Obligor (other than holders of Priority Liens) other than
their rights in relation to holders of Senior Debt;
(3) except as otherwise specifically prohibited by Section
3.4(g), 3.4(h) and 3.5, restrict the right of any Holder of Notes to ▇▇▇
for payments that are then due and owing (but not enforce any judgment in
respect thereof against any Collateral other than the enforcement of any
judgment in respect of any other action not specifically prohibited by
Sections 3.4 or 3.5);
(4) prevent the Note Debt Trustee, the Collateral Agent or
any Holder of Notes from exercising against JII Holdings or any other
Obligor any of its other available remedies upon a Default or Event of
Default not specifically prohibited by Sections 3.4 or 3.5; or
(5) restrict the right of the Note Debt Trustee, the
Collateral Agent or any Holder of Notes to take any lawful action in an
Insolvency or Liquidation Proceeding not specifically prohibited by
Sections 3.4 or 3.5.
If JII Holdings, any Restricted Subsidiary or any other Obligor
fails because of this Article 3 to perform any obligation binding upon it under
any Note Document, the failure is still a Default or Event of Default.
Section 3.15 Bailee for Perfection.
(a) The Priority Lien Collateral Agent shall hold the Pledged
Collateral in its possession or control (or in the possession or control of its
agents or bailees) as bailee for the Collateral Agent solely for the purpose of
perfecting the security interest granted in such Pledged Collateral pursuant to
the Security Documents, subject to the terms and conditions of this
31
Agreement; provided that, solely for purposes of perfecting Liens in cash
collateral accounts, deposit accounts, electronic chattel paper and letter of
credit rights included in the Collateral, the Priority Lien Collateral Agent
agrees to act as agent for the Collateral Agent.
(b) So long as any Priority Obligations exist that have not been
Discharged, the Priority Lien Collateral Agent shall be entitled to deal with
the Pledged Collateral in accordance with the terms of the Priority Lien
Documents and this Agreement as if the Lien of the Collateral Agent therein
under the Security Documents and all other Note Documents did not exist. The
rights of the Collateral Agent shall at all times be subject to the terms of
this Agreement.
(c) No Priority Lien Collateral Agent shall have any obligation
whatsoever to the Collateral Agent, the Note Debt Trustee or the Holders of any
Notes or other Note Obligations to assure that the Pledged Collateral is genuine
or owned by JII Holdings or any other Obligor or otherwise or to preserve rights
or benefits of any Person except as expressly set forth in this Section 3.15.
The duties or responsibilities of the Priority Lien Collateral Agent under this
Section 3.15 shall be limited solely to holding the Pledged Collateral as bailee
for the Collateral Agent for purposes of perfecting the Lien therein held by the
Collateral Agent to secure Note Obligations. No Priority Lien Collateral Agent
shall have any obligation to the Collateral Agent, the Note Debt Trustee or the
Holders of any Notes to care for, protect or insure any Pledged Collateral or to
ensure that the Lien on such Pledged Collateral has been properly or
sufficiently created or entitled to any particular priority.
(d) No Priority Lien Collateral Agent shall have by reason of the
Security Documents, the Note Documents, this Agreement or any other document or
instrument a fiduciary relationship in respect of the Collateral Agent, the Note
Debt Trustee or the Holders of Notes or any other Note Obligations.
(e) If no Priority Obligations exist that have not been
Discharged, the Priority Lien Collateral Agent shall, to the extent permitted by
applicable law, deliver to the Collateral Agent the Pledged Collateral (without
recourse and without any representation or warranty whatsoever as to the
enforceability, perfection, priority or sufficiency of any Lien securing or
Guarantee or other supporting obligation for any Priority Debt or Parity Lien
Debt), together with any necessary or reasonably requested endorsements or as a
court of competent jurisdiction may otherwise direct.
Section 3.16 Designation of New Priority Debt. JII Holdings may, at any
time, from time to time, designate Priority Debt by delivering to the Collateral
Agent an Officers' Certificate as contemplated in the definition of "Priority
Debt". Any holder of Priority Debt and the Priority Lien Collateral Agent shall
be conclusively entitled to rely on an Officers' Certificate from JII Holdings
addressed to any such holder or the Priority Lien Collateral Agent (a copy of
which Officers' Certificate is provided substantially concurrently to the
Collateral Agent and the Note Debt Trustee) that any borrowings, issuances of
letters of credit or other extensions of credit under any Credit Facility were
incurred, and are permitted to be incurred, under the terms of the Indenture.
Nothing in the foregoing constitutes a waiver of any restrictions on
indebtedness or liens appearing in the Credit Agreement, any Priority Lien
Document or the Indenture. Upon receipt of such Officers' Certificate, the
Collateral Agent shall deliver to the
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Priority Lien Collateral Agent (without recourse and without any representation
or warranty whatsoever) any Collateral in the Collateral Agent's possession, to
be held by the Priority Lien Collateral Agent in accordance with the applicable
terms of the Priority Lien Documents and Section 3.15 above. Notwithstanding the
foregoing, an untrue Officers' Certificate designating Priority Obligations may
result in a Default or Event of Default under the Indenture, but shall
nevertheless operate as described in this Section, and may be relied upon as
described in this Section.
Section 3.17 Option to Purchase Priority Debt.
(a) Any Person or Persons at any time or from time to time
designated by the holders of at least 25% in outstanding principal amount of the
Notes (including any Additional Notes), voting as a single class, as entitled to
exercise all default purchase options as to Notes (including Additional Notes
(if any)) then outstanding (an "Eligible Purchaser") shall have the right
(without any obligation) to purchase, at any time during any of the exercise
periods described in the second succeeding paragraph, all, but not less than
all, of the principal of and interest on and all prepayment or acceleration
penalties and premiums in respect of all Priority Debt outstanding at the time
of purchase and all other Priority Obligations (except Unasserted Contingent
Obligations) then outstanding, together with all Liens securing such Priority
Debt and all Guarantees and other supporting obligations relating to such
Priority Debt:
(1) for a purchase price equal to: (A) in the case of
Priority Debt then outstanding (other than letters of credit), 100% of the
principal amount and accrued interest outstanding on the Priority Debt on
the date of purchase plus all other Priority Obligations (except any
Unasserted Contingent Obligations) then unpaid, and (B) in the case of
each outstanding letter of credit then outstanding as Priority Debt, 100%
of the reimbursement obligation in respect of such letter of credit as and
when such letter of credit is funded, plus accrued interest thereon, and
all Priority Obligations (other than Unasserted Contingent Obligations)
relating to such letter of credit that are outstanding as and when such
letter of credit is funded (the amounts payable under clause (B),
collectively, the "Acquired L/C Obligations");
(2) with such purchase price payable in cash on the date of
purchase against transfer to an Eligible Purchaser or its nominee or
transferee (without recourse and without any representation or warranty
whatsoever, whether as to the enforceability of any Priority Debt or the
validity, enforceability, perfection, priority or sufficiency of any Lien
securing or Guarantee or other supporting obligation for any Priority Debt
or as to any other matter whatsoever, except only the representation and
warranty that the transferor owns free and clear of all Liens and
encumbrances (other than participation interests not prohibited by the
applicable Credit Facility), and has good right to convey, whatever claims
and interests it may have in respect of Priority Debt and any such Liens,
Guarantees and supporting obligations pursuant to the Priority Lien
Documents); provided that the purchase price in respect of any outstanding
letter of credit that remains unfunded on the date of purchase shall be
payable as and when such letter of credit is funded (i) first from the
cash collateral account described in paragraph (3) below, until the
amounts contained therein have been exhausted, and (ii) thereafter
directly by the purchaser;
33
(3) with such purchase accompanied by a deposit of cash
collateral under the dominion and control of the Priority Lien Collateral
Agent or its designee in an amount equal to the lower of (1) 105% of the
aggregate undrawn amount and (2) the percentage of the aggregate undrawn
amount required for release of liens under the terms of the applicable
Priority Lien Document, as security for the purchaser's purchase of the
Acquired L/C Obligations, subject to the agreement that if any such letter
of credit (A) is cancelled and returned to the issuer thereof, (B) expires
in accordance with its terms or (C) is drawn in its full face amount, the
Priority Lien Collateral Agent or its designee holding such cash
collateral shall promptly return to the Eligible Purchaser an amount equal
to the excess, if any, of (i) the amount deposited as cash collateral in
respect of such letter of credit, over (ii) the amount equal to 100% of
the reimbursement obligation in respect of such letter of credit as and
when such letter of credit is cancelled, expires or is funded, as the case
may be, plus accrued interest thereon, and all Priority Obligations (other
than Unasserted Contingent Obligations) relating to such letter of credit
that are outstanding as and when such letter of credit is cancelled,
expires or is funded, as the case may be; and
(4) with such purchase price accompanied by a release in
favor of the Priority Lien Collateral Agent and the Lenders from all the
Obligors, in form and substance reasonably satisfactory to the Priority
Lien Collateral Agent, of all obligations and liabilities of the Priority
Lien Collateral Agent, Lenders and their respective officers, directors,
employees, agents, parents, Subsidiaries and affiliates to such Obligors.
Upon the written request to JII Holdings from the Priority Lien Collateral
Agent or the Note Debt Trustee, JII Holdings shall, and shall cause each
of the other Obligors to execute and deliver such release to the Priority
Lien Collateral Agent.
(b) The right to exercise the purchase option described in Section
3.17(a) shall be exercisable and legally enforceable upon at least ten Business
Days' prior written notice of exercise given to the Priority Lien Collateral
Agent by (and at the sole option of) an Eligible Purchaser.
(c) The right to exercise the right to purchase the Priority
Obligations as described in this Section 3.17 may be exercised during each
period that begins on:
(1) the commencement of an Insolvency or Liquidation Proceeding
involving JII Holdings or any other Obligor; or
(2) the first date on which the Priority Lien Collateral Agent or
any holder of any Priority Obligations, or any Person on its behalf, takes
any action (other than the issuance of a notice of default or event of
default or a reservation of rights letter delivered to JII Holdings or any
other Obligor) to foreclose, collect or otherwise realize in any way upon
any Collateral, and
in each of clauses (1) and (2) above, ends on the 20th Business Day after
receipt from JII Holdings, the applicable Obligor, or the Priority Lien
Collateral Agent by the Note Debt Trustee of written notice of the
occurrence of the applicable event described in clause (1) or (2) above;
provided that the Priority Lien Collateral Agent shall have no obligation
to
34
deliver any such notice to the Note Debt Trustee.
(d) The remedies described in this Section 3.17 are in addition to
any other remedy to which the Collateral Agent or any holder of Parity Lien
Obligations is entitled at law or in equity or otherwise.
(e) The obligations of the Lenders to sell their respective
Priority Obligations under this Section 3.17 are several and
not joint and several. To the extent any Lender (a "Defaulting Lender") breaches
its obligation to sell its Priority Obligations under this Section 3.17, nothing
in this Section 3.17 shall be deemed to require the Priority Lien Collateral
Agent or any other Lender to purchase such Defaulting Lender's Priority
Obligations for resale to the holders of Notes and in all cases, the Priority
Lien Collateral Agent and each Lender complying with the terms of this Section
3.17 shall not be deemed to be in default of this Agreement or otherwise be
deemed liable for the actions or inactions of any Defaulting Lender; provided,
however, that nothing in this clause (e) shall require any Eligible Purchaser to
purchase less than all of the Priority Obligations.
Section 3.18 Delivery of Collateral and Proceeds of Collateral. If no
Priority Obligations exist that have not been Discharged, the Priority Lien
Collateral Agent shall, to the extent permitted by applicable law, deliver to
(1) the Collateral Agent, or (2) such other Person as a court of competent
jurisdiction may otherwise direct, (a) any Collateral held by, or on behalf of,
the Priority Lien Collateral Agent or any holder of Priority Obligations, and
(b) all proceeds of Collateral held by, or on behalf of, the Priority Lien
Collateral Agent or any holder of Priority Obligations, whether arising out of
an action taken to enforce, collect or realize upon any Collateral or otherwise.
Such Collateral and such proceeds shall be delivered without recourse and
without any representation or warranty whatsoever as to the enforceability,
perfection, priority or sufficiency of any Lien securing or Guarantee or other
supporting obligation for any Priority Debt or Parity Lien Debt, together with
any necessary endorsements or as a court of competent jurisdiction may otherwise
direct.
ARTICLE 4.
MISCELLANEOUS
Section 4.1 Amendments, Modifications, and Waivers; Cumulative Remedies.
No amendment, modification or waiver of any provision of this Agreement shall be
effective unless the same shall be in writing and signed by each of the parties
hereto, and then such amendment, modification or waiver shall be effective only
in the specific instance and for the specific purpose for which it is given. No
failure to exercise, nor any delay in exercising, on the part of any party of,
any right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies provided herein are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.
Section 4.2 Successors and Assigns. The provisions of this Agreement shall
be binding upon, and inure to the benefit of, the parties hereto and their
respective successors and
35
assigns, including, without limitation, any person or entity that succeeds to
the role of the Collateral Agent or the Priority Lien Collateral Agent.
Section 4.3 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three (3) Business Days after
being deposited in the mail, postage prepaid, or, in the case of telecopy
notice, when received, addressed as follows:
If to the Collateral Agent:
U.S. Bank National Association
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇-▇▇-▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Administrative Agent:
Congress Financial Corporation (Central)
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Any party may hereafter notify the other parties hereto of a
change in its notice address.
36
Section 4.4 Counterparts. This Agreement may be executed in one or more
duplicate counterparts and when signed by all of the parties listed below shall
constitute a single binding agreement.
Section 4.5 Collateral Agent and Note Debt Trustee. Notwithstanding any
term herein to the contrary, it is hereby expressly agreed and acknowledged that
the subordination and related agreements set forth herein by the Collateral
Agent and the Note Debt Trustee are made solely in its capacity as collateral
agent and trustee, respectively, under the Note Documents and with respect to
the Notes (and not in its individual capacity, except to the extent that it is
or becomes a Holder). The Collateral Agent and the Note Debt Trustee shall not
have any duties, obligations, or responsibilities to the Priority Lien
Collateral Agent or the holder of Priority Obligations under this Agreement
except as expressly set forth herein. Nothing in this Agreement shall be
construed to operate as a waiver by the Collateral Agent or the Note Debt
Trustee, with respect to JII Holdings or any other Obligor or any holder of any
Note Obligations, of the benefit of any exculpatory provisions, presumptions,
indemnities, protections, benefits, immunities or reliance rights contained in
the Indenture, and, by their acknowledgment hereof, JII Holdings and the other
Obligors expressly agree that as between them, on the one hand, and the
Collateral Agent and the Note Debt Trustee, on the other hand, the Collateral
Agent and the Note Debt Trustee shall have such benefit with respect to all
actions or omissions by the Collateral Agent and the Note Debt Trustee pursuant
to this Agreement. For all purposes of this Agreement, the Collateral Agent and
the Note Debt Trustee may: (a) rely in good faith, as to matters of fact, on any
representation of fact believed by the Collateral Agent and the Note Debt
Trustee to be true (without any duty of investigation) and that is contained in
a written certificate of any authorized representative of JII Holdings or of the
Priority Lien Collateral Agent; (b) rely in good faith, as to matters of law, on
an opinion of its counsel, counsel to JII Holdings or counsel to the Priority
Lien Collateral Agent, and shall have no liability for any action or omission
taken in reliance thereon; and (c) assume in good faith (without any duty of
investigation), and rely upon, the genuineness, due authority, validity, and
accuracy of any certificate, instrument, notice, or other document believed by
it in good faith to be genuine and presented by the proper Person.
Section 4.6 Other Matters Regarding the Collateral Agent, the Note Debt
Trustee and the Priority Lien Collateral Agent.
(a) In no event shall the Collateral Agent, the Note Debt Trustee
or the Priority Lien Collateral Agent be liable for special, punitive, indirect
or consequential loss or damage of any kind whatsoever (including, but not
limited to, lost profit) even if the Collateral Agent, the Note Debt Trustee or
the Priority Lien Collateral Agent, respectively, have been advised of the
likelihood of such loss or damage and regardless of the form of action.
(b) The Collateral Agent, the Note Debt Trustee and the Priority
Lien Collateral Agent shall not be responsible or liable for any failure or
delay in the performance of their respective obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond their
reasonable control, including without limitation: acts of God; earthquakes;
fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots;
terrorists acts; interruptions, loss or malfunctions of utilities, computer
(hardware or software) or
37
communications service; accidents; labor disputes; and acts of civil or military
authority or governmental actions.
(c) The Collateral Agent, the Note Debt Trustee and the Priority
Lien Collateral Agent may conclusively rely upon any document believed by them,
respectively, to be genuine and to have been signed or presented by the proper
Person. The Collateral Agent, the Note Debt Trustee and the Priority Lien
Collateral Agent need not investigate any fact or matter stated in the document.
(d) The Collateral Agent, the Note Debt Trustee and the Priority
Lien Collateral Agent may act through their respective attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.
38
Section 4.7 Indenture Reference. Notwithstanding anything to the contrary
in this Agreement, any references contained herein to any Section, clause,
paragraph, definition or other provision of the Indenture (including any
definition contained therein) shall be deemed to be a reference to such Section,
clause, paragraph, definition or other provision as in effect on the date of
this Agreement; provided that any reference to any such Section, clause,
paragraph or other provision shall refer to such Section, clause, paragraph or
other provision of the Indenture (including any definition contained therein) as
amended or modified from time to time if such amendment or modification has been
(1) made in accordance with the Indenture and (2) at any time any Priority
Obligations exist that have not been Discharged, approved in writing delivered
to the Note Debt Trustee and the Collateral Agent by, or on behalf of, the
requisite holders of Priority Obligations as are needed under the terms of the
applicable Priority Lien Documents to approve such amendment or modification.
Section 4.8 Governing Law; Consent to Jurisdiction and Venue. THIS
AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, AND ANY APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA. EACH OF THE PARTIES HERETO HEREBY CONSENTS
AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK CITY SHALL HAVE
NON-EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES AMONG
THE PARTIES HERETO PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF
OR RELATING TO THIS AGREEMENT, PROVIDED, THAT THE PARTIES HERETO ACKNOWLEDGE
THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED
OUTSIDE OF NEW YORK CITY AND, PROVIDED, FURTHER, THAT NOTHING IN THIS AGREEMENT
SHALL BE DEEMED OR OPERATE TO PRECLUDE THE PRIORITY LIEN COLLATERAL AGENT FROM
BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE
ON ANY SECURITY FOR THE PRIORITY LIEN OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR
OTHER COURT ORDER IN FAVOR OF THE PRIORITY LIEN COLLATERAL AGENT. EACH OF THE
PARTIES HERETO EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN
ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH OF THE PARTIES HERETO
HEREBY WAIVES ANY OBLIGATION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS. EACH OF THE PARTIES HERETO
HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS
ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO IT AT THE ADDRESS SET FORTH HEREIN, AND THAT SERVICE SO MADE SHALL
BE DEEMED COMPLETED UPON THE EARLIER OF SUCH PARTY'S ACTUAL RECEIPT THEREOF OR
THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.
Section 4.9 Mutual Waiver of Jury Trial. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY
RESOLVED BY AN EXPERIENCED AND EXPERT PERSON
39
AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN
ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A
JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION
OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO
WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN
THE PARTIES ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR THE
TRANSACTIONS RELATED THERETO.
Section 4.10 Specific Performance. The parties hereto agree that
irreparable damage would occur, and that monetary damages would not be a
sufficient remedy, in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached (or threatened to be breached). Each of the parties shall be entitled
to, and no other party hereto shall, directly or indirectly, oppose or otherwise
contest any motion or other legal action brought to:
(1) obtain, an injunction or injunctions or other equitable
relief as a remedy to prevent breaches (or threatened breaches) of this
Agreement; and
(2) enforce specifically the terms and provisions of this
Agreement in any court of the United States or any state having
jurisdiction, without proof of actual damages or a requirement that bond
be posted.
The remedies described in this Agreement are in addition to any
other remedy to which any of the parties is entitled at law or in equity or
otherwise.
Section 4.11 Entire Agreement. This Agreement integrates all the terms and
conditions mentioned herein or incidental hereto and supersedes all oral
negotiations and prior writings in respect to the subject matter hereof. In the
event of any conflict between the terms, conditions and provisions of this
Agreement and any such agreement, document or instrument, the terms, conditions
and provisions of this Agreement shall prevail.
Section 4.12 Severability. In case any one or more of the provisions
contained or incorporated by reference in this Agreement should be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby, and the parties hereto shall enter into good faith
negotiations to replace the invalid, illegal or unenforceable provision with a
view to obtaining the same commercial effect as this Agreement would have had if
such provision had been legal, valid and enforceable.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
40
IN WITNESS WHEREOF, the parties hereto have caused this
Intercreditor Agreement to be executed by their respective officers or
representatives hereunto duly authorized as of the day and year first above
written.
U.S. BANK NATIONAL ASSOCIATION,
as Collateral Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
CONGRESS FINANCIAL CORPORATION
(CENTRAL),
as Administrative Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: First Vice President
S-1
CONSENT AND AGREEMENT
Each of the undersigned hereby acknowledges receipt of a copy of the
foregoing Intercreditor Agreement as of the date thereof and agrees to be bound
by the terms and provisions thereof and take no action which is inconsistent
with, or to contest or challenge the validity of, any term or provision thereof,
and agrees that its successors and assigns shall be bound by the foregoing.
JORDAN INDUSTRIES, INC.
By:_____________________________________
Name:______________________________
Title:_____________________________
JII HOLDINGS, LLC
JII HOLDINGS FINANCE CORPORATION
JII LLC
JII PROMOTIONS, INC.
PAMCO PRINTED TAPE & LABEL CO., INC.
SEABOARD FOLDING BOX CORPORATION
SPL HOLDINGS, INC.
VALMARK INDUSTRIES, INC.
WELCOME HOME LLC
CHO-▇▇▇, INC.
JORDAN AUTO AFTERMARKET, INC.
ABC TRANSMISSION PARTS WAREHOUSE, INC.
▇▇▇▇ PRODUCTS I, INC.
ATCO PRODUCTS, INC.
DACCO/DETROIT OF ALABAMA, INC.
DACCO/DETROIT OF ARIZONA, INC.
DACCO/DETROIT OF CHATTANOOGA, INC.
DACCO/DETROIT OF FLORIDA, INC.
DACCO/DETROIT OF GEORGIA, INC.
DACCO/DETROIT OF INDIANA, INC.
DACCO/DETROIT OF KENTUCKY, INC.
DACCO/DETROIT OF MARYLAND, INC.
DACCO/DETROIT OF MEMPHIS, INC.
DACCO/DETROIT OF MICHIGAN, INC.
DACCO/DETROIT OF MINNESOTA, INC.
DACCO/DETROIT OF MISSOURI, INC.
DACCO/DETROIT OF NEBRASKA, INC.
DACCO/DETROIT OF NEVADA, INC.
DACCO/DETROIT OF NEW JERSEY, INC.
DACCO/DETROIT OF NORTH CAROLINA, INC.
DACCO/DETROIT OF OHIO, INC.
DACCO/DETROIT OF OKLAHOMA, INC.
By:_____________________________________
Name:______________________________
Title:_____________________________
DACCO/DETROIT OF PENNSYLVANIA, INC.
DACCO/DETROIT OF SOUTH CAROLINA, INC.
DACCO/DETROIT OF TEXAS, INC.
DACCO/DETROIT OF VIRGINIA, INC.
DACCO/DETROIT OF WEST VIRGINIA, INC.
DACCO/DETROIT OF WISCONSIN, INC.
DACCO TRANSMISSION PARTS (NY), INC.
DETROIT TRANSMISSION PRODUCTS, CO.
NASHVILLE TRANSMISSION PARTS, INC.
JORDAN SPECIALTY PLASTICS, INC.
BEEMAK PLASTICS, INC.
DEFLECTO CORPORATION
DEFLECTO CANADA LTD.
INSTACHANGE DISPLAYS LIMITED
ROLITE PLASTICS, INC.
SATE-LITE HK, INC.
SATE-LITE MANUFACTURING COMPANY
TELE-FLOW, INC.
GRAMTEL USA, INC.
GRAMTEL MIDWEST, INC.
GRAMTEL-ILLINOIS, INC.
YT HOLDINGS, INC.
DACCO INCORPORATED
PIONEER PAPER CORPORATION
JI VENTURES, INC.
By:_____________________________________
Name:______________________________
Title:_____________________________
CONSENT AND AGREEMENT
Each of the undersigned hereby acknowledges receipt of a copy of the
foregoing Intercreditor Agreement as of the date thereof and agrees to be bound
by the terms and provisions thereof and take no action which is inconsistent
with, or to contest or challenge the validity of, any term or provision thereof,
and agrees that its successors and assigns shall be bound by the foregoing.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:_____________________________________
Name:______________________________
Title:_____________________________