Document:

Exhibit 10.16

 

SUBSIDIARIES GUARANTY

 

SUBSIDIARIES GUARANTY, (as amended, modified, restated
and/or supplemented from time to time, this “Guaranty”), dated as of
March 17, 2004, made by and among each of the undersigned guarantors (each a “Guarantor”
and, together with any other entity that becomes a guarantor hereunder pursuant
to Section 27 hereof, the “Guarantors”) in favor of Bank of America,
N.A., as Administrative Agent (together with any successor administrative
agent, the “Administrative Agent”), for the benefit of the Secured
Creditors (as defined below).  Except as
otherwise defined herein, all capitalized terms used herein and defined in the
Second-Lien Credit Agreement (as defined below) shall be used herein as therein
defined.

 

W  I  T  N  E  S
S  E  T  H :

 

WHEREAS, EnerSys, a Delaware corporation (“Holdings”),
EnerSys Capital Inc., a Delaware corporation (the ”Borrower”), the
lenders from time to time party thereto (the “Lenders”), the
Administrative Agent, Morgan Stanley Senior Funding, Inc., as Syndication
Agent, and Lehman Commercial Paper, Inc., as Documentation Agent, have entered
into a Second-Lien Credit Agreement, dated as of March 17, 2004 (as amended,
modified, restated and/or supplemented from time to time, the “Second-Lien
Credit Agreement”), providing for the making of Second-Lien Loans to the
Borrower, all as contemplated therein (the Lenders, the Administrative Agent,
the Collateral Agent, each other Agent and the Pledgee are herein called the “Secured
Creditors”);

 

WHEREAS, each Guarantor is a direct or indirect
Wholly-Owned Domestic Subsidiary of the Borrower;

 

WHEREAS, it is a condition precedent to the making of
Second-Lien Loans to the Borrower under the Second-Lien Credit Agreement that
each Guarantor shall have executed and delivered to the Administrative Agent
this Guaranty; and

 

WHEREAS, each Guarantor will obtain benefits from the
incurrence of Second-Lien Loans by the Borrower under the Second-Lien Credit
Agreement and, accordingly, desires to execute this Guaranty in order to satisfy
the condition described in the preceding paragraph and to induce the Lenders to
make Second-Lien Loans to the Borrower;

 

NOW, THEREFORE, in consideration of the foregoing and
other benefits accruing to each Guarantor, the receipt and sufficiency of which
are hereby acknowledged, each Guarantor hereby makes the following
representations and warranties to the Administrative Agent for the benefit of
the Secured Creditors and hereby covenants and agrees with each other Guarantor
and the Administrative Agent for the benefit of the Secured Creditors as
follows:

 

1.                                       Each Guarantor, jointly and severally,
irrevocably, absolutely and unconditionally guarantees as a primary obligor and
not merely as surety to the Secured Creditors the full and prompt payment when
due (whether at the stated maturity, by required prepayment,

 

 

declaration, acceleration,
demand or otherwise) of (x) the principal of, premium, if any, and interest on
the Second Lien Loan Notes issued by, and the Second-Lien Loans made to, the
Borrower under the Second-Lien Credit Agreement, (y) all other obligations
(including, without limitation, obligations which, but for the automatic stay
under Section 362(a) of the Bankruptcy Code, would become due), liabilities and
indebtedness owing by the Borrower to the Secured Creditors under the
Second-Lien Credit Agreement and each other Credit Document to which the
Borrower is a party (including, without limitation, indemnities, Fees and
interest thereon (including, without limitation, any interest accruing after
the commencement of any bankruptcy, insolvency, receivership or similar
proceeding at the rate provided for in the Second-Lien Credit Agreement,
whether or not such interest is an allowed claim in any such proceeding)),
whether now existing or hereafter incurred under, arising out of or in
connection with the Second-Lien Credit Agreement and any such other Credit
Document and the due performance and compliance by the Borrower with all of the
terms, conditions and agreements contained in all such Credit Documents (all
such principal, premium, interest, liabilities, indebtedness and obligations
under this Section 1, being herein collectively called the “Guaranteed
Obligations”).  Each Guarantor
understands, agrees and confirms that the Secured Creditors may enforce this
Guaranty up to the full amount of the Guaranteed Obligations against such
Guarantor without proceeding against any other Guarantor or the Borrower, or
against any security for the Guaranteed Obligations, or under any other
guaranty covering all or a portion of the Guaranteed Obligations.

 

2.                                       Additionally, each Guarantor, jointly and
severally, unconditionally, absolutely and irrevocably, guarantees the payment
of any and all Guaranteed Obligations whether or not due or payable by the Borrower
upon the occurrence in respect of the Borrower of any of the events specified
in Section 10.05 of the Second-Lien Credit Agreement, and unconditionally,
absolutely and irrevocably, jointly and severally, promises to pay such
Guaranteed Obligations to the Secured Creditors, or order, on demand.  This Guaranty is an absolute, present and
continuing guaranty of prompt payment and performance and not of collection.

 

3.                                       The liability of each Guarantor hereunder
is primary, absolute, joint and several, and unconditional and is exclusive and
independent of any security for or other guaranty of the indebtedness of the
Borrower whether executed by such Guarantor, any other Guarantor, any other
guarantor or by any other party, and the liability of each Guarantor hereunder
shall not be affected or impaired by any circumstance or occurrence whatsoever,
including, without limitation:  (a) any
direction as to application of payment by the Borrower or by any other party,
(b) any other continuing or other guaranty, undertaking or maximum liability of
a Guarantor or of any other party as to the Guaranteed Obligations, (c) any
payment on or in reduction of any such other guaranty or undertaking, (d) any
dissolution, termination or increase, decrease or change in personnel by the
Borrower, (e) the failure of the Guarantor to receive any benefit from or as a
result of its execution, delivery and performance of this Guaranty, (f) any
payment made to any Secured Creditor on the indebtedness which any Secured
Creditor repays the Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
each Guarantor waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding, (g) any action or
inaction by the Secured Creditors as contemplated in Section 6 hereof or (h)
any invalidity, rescission, irregularity or unenforceability of all or any part
of the Guaranteed Obligations or of any security therefor.

 

 

4.                                       The obligations of each Guarantor
hereunder are independent of the obligations of any other Guarantor, any other
guarantor or the Borrower, and a separate action or actions may be brought and
prosecuted against each Guarantor whether or not action is brought against any
other Guarantor, any other guarantor or the Borrower and whether or not any
other Guarantor, any other guarantor or the Borrower be joined in any such
action or actions.  Each Guarantor
waives (to the fullest extent permitted by applicable law) the benefits of any
statute of limitations affecting its liability hereunder or the enforcement
thereof.  Any payment by the Borrower or
other circumstance which operates to toll any statute of limitations as to the
Borrower shall operate to toll the statute of limitations as to each Guarantor.

 

5.                                       Each Guarantor hereby waives (to the
fullest extent permitted by applicable law) notice of acceptance of this
Guaranty and notice of any liability to which it may apply, and waives
promptness, diligence, presentment, demand of payment, protest, notice of
dishonor or nonpayment of any such liabilities, suit or taking of other action
by the Administrative Agent or any other Secured Creditor against, and any
other notice to, any party liable thereon (including such Guarantor, any other
Guarantor, any other guarantor or the Borrower) and the Guarantor further
hereby waives any and all notice of the creation, renewal, extension or accrual
of any of the Guaranteed Obligations and notice or proof of reliance by any
Secured Creditor upon this Guaranty, and the Guaranteed Obligations shall
conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended, modified, supplemented or waived, in reliance upon
this Guaranty.

 

6.                                       Any Secured Creditor may (except as shall
be required by applicable statute and cannot be waived) at any time and from
time to time without the consent of, or notice to, any Guarantor, without
incurring responsibility to such Guarantor, without impairing or releasing the
obligations or liabilities of such Guarantor hereunder, upon or without any
terms or conditions and in whole or in part:

 

(a)                                  change the manner, place or terms of
payment of, and/or change, increase or extend the time of payment of, renew,
increase, accelerate or alter, any of the Guaranteed Obligations (including,
without limitation, any increase or decrease in the rate of interest thereon or
the principal amount thereof), any security therefor, or any liability incurred
directly or indirectly in respect thereof, and the guaranty herein made shall
apply to the Guaranteed Obligations as so changed, extended, increased,
accelerated, renewed or altered;

 

(b)                                 take and hold security for the payment of
the Guaranteed Obligations and sell, exchange, release, surrender, impair,
realize upon or otherwise deal with in any manner and in any order any property
or other collateral by whomsoever at any time pledged or mortgaged to secure,
or howsoever securing, the Guaranteed Obligations or any liabilities (including
any of those hereunder) incurred directly or indirectly in respect thereof or
hereof, and/or any offset thereagainst;

 

(c)                                  exercise or refrain from exercising any
rights against the Borrower, any other Credit Party, any Subsidiary thereof,
any other guarantor of the Borrower or others or otherwise act or refrain from
acting;

 

 

(d)                                 release or substitute any one or more
endorsers, Guarantors, other guarantors, the Borrower, or other obligors;

 

(e)                                  settle or compromise any of the
Guaranteed Obligations, any security therefor or any liability (including any
of those hereunder) incurred directly or indirectly in respect thereof or
hereof, and may subordinate the payment of all or any part thereof to the
payment of any liability (whether due or not) of the Borrower to creditors of
the Borrower other than the Secured Creditors;

 

(f)                                    apply any sums by whomsoever paid or
howsoever realized to any liability or liabilities of the Borrower to the
Secured Creditors regardless of what liabilities of the Borrower remain unpaid;

 

(g)                                 consent to or waive any breach of, or any
act, omission or default under, any of the Credit Documents or any of the
instruments or agreements referred to therein, or otherwise amend, modify or
supplement any of the Credit Documents or any of such other instruments or
agreements;

 

(h)                                 act or fail to act in any manner which
may deprive such Guarantor of its right to subrogation against the Borrower to
recover full indemnity for any payments made pursuant to this Guaranty; and/or

 

(i)                                     take any other action or omit to take any
other action which would, under otherwise applicable principles of common law,
give rise to a legal or equitable discharge of such Guarantor from its
liabilities under this Guaranty (including, without limitation, any action or
omission whatsoever that might otherwise vary the risk of such Guarantor or
constitute a legal or equitable defense to or discharge of the liabilities of a
guarantor or surety or that might otherwise limit recourse against such
Guarantor).

 

7.                                       No invalidity, illegality, irregularity
or unenforceability of all or any part of the Guaranteed Obligations, the
Credit Documents or any other agreement or instrument relating to the
Guaranteed Obligations or of any security or guarantee therefor shall affect,
impair or be a defense to this Guaranty, and this Guaranty shall be primary,
absolute and unconditional notwithstanding the occurrence of any event or the
existence of any other circumstances which might constitute a legal or
equitable discharge of a surety or guarantor except payment in full in cash of
the Guaranteed Obligations.

 

8.                                       This Guaranty is a continuing one and all
liabilities to which it applies or may apply under the terms hereof shall be
conclusively presumed to have been created in reliance hereon.  No failure or delay on the part of any
Secured Creditor in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.  The rights and remedies herein expressly
specified are cumulative and not exclusive of any rights or remedies which any
Secured Creditor would otherwise have. 
No notice to or demand on any Guarantor in any case shall entitle such
Guarantor to any other further notice or demand in similar or other
circumstances or constitute a waiver of the rights of any Secured Creditor to
any other or further action in any circumstances

 

 

without notice or demand.  It is not necessary for any Secured Creditor
to inquire into the capacity or powers of the Borrower or the officers,
directors, partners or agents acting or purporting to act on its or their
behalf, and any indebtedness made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.

 

9.                                       Any indebtedness of the Borrower now or
hereafter held by any Guarantor is hereby subordinated to the indebtedness of
the Borrower to the Secured Creditors; and such indebtedness of the Borrower to
any Guarantor, if the Administrative Agent or the Collateral Agent, after an
Event of Default has occurred and is continuing, so requests, shall be
collected, enforced and received by such Guarantor as trustee for the Secured Creditors
and be paid over to the Secured Creditors on account of the indebtedness of the
Borrower to the Secured Creditors, but without affecting or impairing in any
manner the liability of such Guarantor under the other provisions of this
Guaranty.  Prior to the transfer by any
Guarantor of any note or negotiable instrument evidencing any indebtedness of
the Borrower to such Guarantor, such Guarantor shall mark such note or
negotiable instrument with a legend that the same is subject to this
subordination.  Without limiting the
generality of the foregoing, each Guarantor hereby agrees with the Secured
Creditors that it will not exercise any right of subrogation which it may at
any time otherwise have as a result of this Guaranty (whether contractual,
under Section 509 of the Bankruptcy Code or otherwise) until all Guaranteed
Obligations have been irrevocably paid in full in cash; provided, that
if any amount shall be paid to the Guarantor on account of such subrogation
rights at any time prior to the irrevocable payment in full in cash of all the
Guaranteed Obligations, such amount shall be held in trust for the benefit of
the Secured Creditors and shall forthwith be paid to the Secured Creditors to
be credited and applied upon the Guaranteed Obligations, whether matured or
unmatured, in accordance with the terms of the Credit Documents or, if the
Credit Documents do not provide for the application of such amount, to be held
by the Secured Creditors as collateral security for any Guaranteed Obligations
thereafter existing.

 

10.                                 (a) 
Each Guarantor waives any right to require the Secured Creditors
to:  (i) proceed against the Borrower,
any other Guarantor, any other guarantor of the Guaranteed Obligations or any
other party; (ii) proceed against or exhaust any security held from the
Borrower, any other Guarantor, any other guarantor of the Guaranteed
Obligations or any other party; or (iii) pursue any other remedy in the Secured
Creditors’ power whatsoever.  Each
Guarantor waives any defense based on or arising out of any defense of the
Borrower, any other Guarantor, any other guarantor of the Guaranteed
Obligations or any other party other than payment in full in cash of the
Guaranteed Obligations, including, without limitation, any defense based on or
arising out of the disability of the Borrower, any other Guarantor, any other
guarantor of the Guaranteed Obligations or any other party, or the
unenforceability of the Guaranteed Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of the Borrower other
than payment in full in cash of the Guaranteed Obligations.  Subject to the terms of the Intercreditor
Agreement, the Secured Creditors may, at their election, foreclose on any
collateral serving as security held by the Administrative Agent, the Collateral
Agent or the other Secured Creditors by one or more judicial or nonjudicial
sales, whether or not every aspect of any such sale is commercially reasonable
(to the extent such sale is permitted by applicable law), or exercise any other
right or remedy the Secured Creditors may have against the Borrower, or any
other party, or any security, without affecting or impairing in any way the
liability of any Guarantor hereunder except to the extent the Guaranteed
Obligations have been

 

 

paid in full in cash.  Each Guarantor waives any defense arising
out of any such election by the Secured Creditors, even though such election
operates to impair or extinguish any right of reimbursement, contribution,
indemnification or subrogation or other right or remedy of such Guarantor
against the Borrower, any other guarantor of the Guaranteed Obligations or any
other party or any security.

 

(b)                                 Each Guarantor waives all presentments,
demands for performance, protests and notices, including, without limitation,
notices of nonperformance, notices of protest, notices of dishonor, notices of
acceptance of this Guaranty, and notices of the existence, creation or
incurring of new or additional indebtedness. 
Each Guarantor has knowledge and assumes all responsibility for being
and keeping itself informed of the Borrower’s and each other Guarantor’s
financial condition, affairs and assets, and of all other circumstances bearing
upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope
and extent of the risks which such Guarantor assumes and incurs hereunder, and
has adequate means to obtain from the Borrower and each other Guarantor on an
ongoing basis information relating thereto and the Borrower’s, and each other
Guarantor’s ability to pay and perform its respective Guaranteed Obligations,
and agrees to assume the responsibility for keeping, and to keep, so informed
for so long as this Guaranty is in effect. 
Each Guarantor acknowledges and agrees that (x) the Secured Creditors
shall have no obligation to investigate the financial condition or affairs of
the Borrower or any other Guarantor for the benefit of such Guarantor nor to
advise such Guarantor of any fact respecting, or any change in, the financial
condition, assets or affairs of the Borrower, or any other Guarantor that might
become known to any Secured Creditor at any time, whether or not such Secured
Creditor knows or believes or has reason to know or believe that any such fact
or change is unknown to such Guarantor, or might (or does) increase the risk of
such Guarantor as guarantor hereunder, or might (or would) affect the
willingness of such Guarantor to continue as a guarantor of the Obligations
hereunder and (y) the Secured Creditors shall have no duty to advise any Guarantor
of information known to them regarding any of the afore-mentioned circumstances
or risks.

 

(c)                                  Each Guarantor hereby acknowledges and
agrees that no Secured Creditor nor any other Person shall be under any
obligation (a) to marshal any assets in favor of the Guarantor or in payment of
any or all of the liabilities of any Guaranteed Party under the Documents or
the obligation of the Guarantor hereunder or (b) to pursue any other remedy
that the Guarantor may or may not be able to pursue itself any right to which
the Guarantor hereby waives.

 

(d)                                 Each Guarantor
warrants and agrees that each of the waivers set forth in Sections 4, 5 and in
this Section 10 is made with full knowledge of its significance and
consequences and that if any of such waivers are determined to be contrary to
any applicable law or public policy, such waivers shall be effective only to
the maximum extent permitted by applicable law.

 

11.                                 Notwithstanding anything to the contrary
contained elsewhere in this Guaranty, the Secured Creditors agree (by their
acceptance of the benefits of this Guaranty) that this Guaranty may be enforced
only by the action of the Administrative Agent or the Collateral Agent, in each
case acting upon the instructions of the Required Lenders and that no other
Secured Creditor shall have any right individually to seek to enforce or to
enforce this Guaranty

 

 

or to realize upon the security
to be granted by the Security Documents, it being understood and agreed that
such rights and remedies may (subject to the Intercreditor Agreement) be
exercised by the Administrative Agent or the Collateral Agent for the benefit
of the Secured Creditors upon the terms of this Guaranty and the Security
Documents.  The Secured Creditors
further agree that this Guaranty may not be enforced against any director,
officer, employee, partner, member or stockholder of any Guarantor (except to
the extent such partner, member or stockholder is also a Guarantor
hereunder).  It is understood and agreed
that the agreement in this Section 11 is among and solely for the benefit of
the Secured Creditors and that, if the Required Lenders so agree (without
requiring the consent of any Guarantor), this Guaranty may (subject to the
Intercreditor Agreement) be directly enforced by any Secured Creditor.

 

12.                                 In order to induce the Lenders to make
Second-Lien Loans to the Borrower pursuant to the Second-Lien Credit Agreement,
each Guarantor represents, warrants and covenants that:

 

(a)                                  such Guarantor (i) is a duly organized
and validly existing corporation, partnership or limited liability company, as
the case may be, in good standing under the laws of the jurisdiction of its
organization, (ii) has the corporate, partnership or limited liability company
power and authority, as the case may be, to own its property and assets and to
transact the business in which it is engaged and presently proposes to engage
and (iii) is duly qualified and is authorized to do business and is in good
standing in each jurisdiction where the conduct of its business requires such
qualification except for failures to be so qualified which, either individually
or in the aggregate, could not reasonably be expected to have a Material
Adverse Effect;

 

(b)                                 such Guarantor has the corporate,
partnership or limited liability company power and authority, as the case may
be, to execute, deliver and perform the terms and provisions of this Guaranty
and each other Credit Document to which it is a party and has taken all
necessary corporate, partnership or limited liability company action, as the
case may be, to authorize the execution, delivery and performance by it of this
Guaranty and each such other Credit Document.

 

(c)                                  such
Guarantor has duly executed and delivered this Guaranty and each other Credit
Document to which it is a party, and this Guaranty and each such other Credit
Document constitutes the legal, valid and binding obligation of such Guarantor
enforceable in accordance with its terms, except to the extent that the
enforceability hereof or thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws generally
affecting creditors’ rights and by equitable principles (regardless of whether
enforcement is sought in equity or at law);

 

(d)                                 neither the execution, delivery or
performance by such Guarantor of this Guaranty or any other Credit Document to
which it is a party, nor compliance by it with the terms and provisions hereof
and thereof, will (i) contravene any provision of any applicable law, statute,
rule or regulation or any applicable order, writ, injunction or decree of any
court or governmental instrumentality, (ii) conflict with or result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any

 

 

Lien (except pursuant to the Security Documents) upon
any of the property or assets of such Guarantor or any of its Subsidiaries
pursuant to the terms of any indenture, mortgage, deed of trust, loan
agreement, credit agreement, or any other material agreement, contract or
instrument to which such Guarantor or any of its Subsidiaries is a party or by
which it or any of its property or assets is bound or to which it may be
subject or (iii) violate any provision of the certificate or articles of
incorporation, by-laws, partnership agreement or limited liability company
agreement (or equivalent organizational documents), as the case may be, of such
Guarantor or any of its Subsidiaries;

 

(e)                                  no order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made prior to the date when required and which
remain in full force and effect), or exemption by, any governmental or public
body or authority, or any subdivision thereof, is required to authorize, or is
required in connection with, (i) the execution, delivery and performance of
this Guaranty by such Guarantor or any other Credit Document to which such
Guarantor is a party or (ii) the legality, validity, binding effect or
enforceability of this Guaranty or any other Credit Document to which such
Guarantor is a party; and

 

(f)                                    there are no actions, suits or
proceedings pending or, to such Guarantor’s knowledge, threatened (i) with
respect to this Guaranty or any other Credit Document to which such Guarantor
is a party, (ii) with respect to such Guarantor or any of its Subsidiaries
that, either individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect or (iii) that could reasonably be expected to
have a material adverse effect on the rights or remedies of the Secured
Creditors or on the ability of such Guarantor to perform its obligations to the
Secured Creditors hereunder and under the other Credit Documents to which it is
a party.

 

13.                                 Each Guarantor covenants and agrees that
on and after the Effective Date and until the termination of the Total
Commitment and all Guaranteed Obligations have been paid in full (other than
indemnities described in Sections 12.07 and 13.05 of the Second-Lien Credit
Agreement and analogous provisions in the Security Documents which are not then
due and payable), such Guarantor will comply, and will cause each of its
Subsidiaries to comply, with all of the applicable provisions, covenants and
agreements contained in Sections 8 and 9 of the Second-Lien Credit Agreement,
and will take, or will refrain from taking, as the case may be, all actions
that are necessary to be taken or not taken so that no violation of any provision,
covenant or agreement contained in Sections 8 and 9 of the Second-Lien Credit
Agreement, and so that no Default or Event of Default, is caused by the actions
of such Guarantor or any of its Subsidiaries.

 

14.                                 The Guarantors hereby jointly and severally
agree to pay all reasonable out-of-pocket costs and expenses of the Collateral
Agent, the Administrative Agent and each Secured Creditor in connection with
the enforcement of this Guaranty and the protection of the Secured Creditors’
rights hereunder and any amendment, waiver or consent relating hereto
(including, in each case, without limitation, the reasonable fees and
disbursements of counsel (including in-house counsel) employed by the
Collateral Agent, the Administrative Agent and each Secured Creditor).

 

 

15.                                 This Guaranty shall be binding upon each
Guarantor and its successors and assigns and shall inure to the benefit of the
Secured Creditors and their successors and assigns.

 

16.                                 Subject to Section 22 hereof, neither
this Guaranty nor any provision hereof may be changed, waived, discharged or
terminated except with the written consent of each Guarantor directly affected
thereby (it being understood that the addition or release of any Guarantor
hereunder shall not constitute a change, waiver, discharge or termination
affecting any Guarantor other than the Guarantor so added or released) and with
the written consent of the Required Lenders (or, to the extent required by
Section 13.01 of the Second-Lien Credit Agreement, with the written consent of
each Lender).

 

17.                                 Each Guarantor acknowledges that an
executed (or conformed) copy of each of the Credit Documents has been made
available to a senior officer of such Guarantor and such officer is familiar
with the contents thereof.

 

18.                                 In addition to any rights now or
hereafter granted under applicable law (including, without limitation, Section
151 of the New York Debtor and Creditor Law) and not by way of limitation of
any such rights (but subject to the Intercreditor Agreement), upon the occurrence
and during the continuance of an Event of Default, each Secured Creditor is
hereby authorized, at any time or from time to time, without notice to any
Guarantor or to any other Person, any such notice being expressly waived, to
set off and to appropriate and apply any and all deposits (general or special)
and any other indebtedness at any time held or owing by such Secured Creditor
to or for the credit or the account of such Guarantor, against and on account
of the obligations and liabilities of such Guarantor to such Secured Creditor
under this Guaranty, irrespective of whether or not such Secured Creditor shall
have made any demand hereunder and although said obligations, liabilities,
deposits or claims, or any of them, shall be contingent or unmatured.

 

19.                                 Except as otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be sent or delivered by mail, telegraph, telex, telecopy,
cable or courier service and all such notices and communications shall, when
mailed, telegraphed, telexed, telecopied, or cabled or sent by courier, be
effective when deposited in the mails, delivered to the telegraph company,
cable company or overnight courier, as the case may be, or sent by telex or telecopier,
except that notices and communications to the Administrative Agent or any
Guarantor shall not be effective until received by the Administrative Agent or
such Guarantor, as the case may be.  All
notices and other communications shall be in writing and addressed to such
party at (i) in the case of any Lender Creditor, as provided in the Second-Lien
Credit Agreement, and (ii) in the case of any Guarantor, at its address set
forth opposite its signature page below; or in any case at such other address as
any of the Persons listed above may hereafter notify the others in writing.

 

20.                                 If any claim is ever made upon any
Secured Creditor for repayment or recovery of any amount or amounts received in
payment or on account of any of the Guaranteed Obligations and any of the
aforesaid payees repays all or part of said amount by reason of (i) any
judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property or (ii) any settlement or
compromise of any such claim effected by

 

 

such payee with any such
claimant (including, without limitation, the Borrower), then and in such event
each Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon such Guarantor, notwithstanding any revocation
hereof or the cancellation of any Second-Lien Loan Note or any other instrument
evidencing any liability of the Borrower, and such Guarantor shall be and
remain liable to the aforesaid payees hereunder for the amount so repaid or
recovered to the same extent as if such amount had never originally been
received by any such payee.

 

21.                                 (a) 
THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE SECURED CREDITORS
AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK. 
Any legal action or proceeding with respect to this Guaranty or any
other Credit Document to which any Guarantor is a party may be brought in the
courts of the State of New York or of the United States of America for the
Southern District of New York, in each case located within the County of New
York, and, by execution and delivery of this Guaranty, each Guarantor hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts.  Each Guarantor hereby further irrevocably
waives any claim that any such courts lack jurisdiction over such Guarantor,
and agrees not to plead or claim, in any legal action or proceeding with
respect to this Guaranty or any other Credit Document to which such Guarantor
is a party brought in any of the aforesaid courts, that any such court lacks
jurisdiction over such Guarantor.  Each
Guarantor further irrevocably consents to the service of process out of any of
the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to each
Guarantor at its address set forth opposite its signature below, such service
to become effective 30 days after such mailing.  Each Guarantor hereby irrevocably waives any objection to such
service of process and further irrevocably waives and agrees not to plead or
claim in any action or proceeding commenced hereunder or under any other Credit
Document to which such Guarantor is a party that such service of process was in
any way invalid or ineffective. Nothing herein shall affect the right of any of
the Secured Creditors to serve process in any other manner permitted by law or
to commence legal proceedings or otherwise proceed against each Guarantor in
any other jurisdiction.

 

(b)                                 Each Guarantor hereby irrevocably waives
(to the fullest extent permitted by applicable law) any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Guaranty or any other
Credit Document to which such Guarantor is a party brought in the courts
referred to in clause (a) above and hereby further irrevocably waives and
agrees not to plead or claim in any such court that such action or proceeding
brought in any such court has been brought in an inconvenient forum.

 

(c)                                  EACH GUARANTOR AND EACH SECURED CREDITOR
(BY ITS ACCEPTANCE OF THE BENEFITS OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVES
ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS GUARANTY, THE OTHER CREDIT DOCUMENTS TO WHICH SUCH
GUARANTOR IS A PARTY OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

 

22.                                 In the event that all of the capital
stock or other equity interests of one or more Guarantors is sold or otherwise
disposed of or liquidated in compliance with the requirements of Section 9.02
of the Second-Lien Credit Agreement (or such sale, other disposition or liquidation
has been approved in writing by the Required Lenders) or the Guaranty of such
Guarantor is required to be released pursuant to the Intercreditor Agreement
and the proceeds of such sale, disposition, liquidation or release are applied
in accordance with the provisions of the Second-Lien Credit Agreement, to the
extent applicable, such Guarantor shall, upon consummation of such sale, other
disposition or other release, be released from this Guaranty automatically and
without further action and this Guaranty shall, as to each such Guarantor or
Guarantors, terminate, and have no further force or effect (it being understood
and agreed that the sale of one or more Persons that own, directly or
indirectly, all of the capital stock or other Equity Interests of any Guarantor
shall be deemed to be a sale of such Guarantor for the purposes of this Section
22).

 

23.                                 At any time a payment in respect of the
Guaranteed Obligations is made under this Guaranty, the right of contribution
of each Guarantor against each other Guarantor shall be determined as provided
in the immediately following sentence, with the right of contribution of each
Guarantor to be revised and restated as of each date on which a payment (a “Relevant
Payment”) is made on the Guaranteed Obligations under this Guaranty.  At any time that a Relevant Payment is made
by a Guarantor that results in the aggregate payments made by such Guarantor in
respect of the Guaranteed Obligations to and including the date of the Relevant
Payment exceeding such Guarantor’s Contribution Percentage (as defined below)
of the aggregate payments made by all Guarantors in respect of the Guaranteed
Obligations to and including the date of the Relevant Payment (such excess, the
“Aggregate Excess Amount”), each such Guarantor shall have a right of
contribution against each other Guarantor who has made payments in respect of
the Guaranteed Obligations to and including the date of the Relevant Payment in
an aggregate amount less than such other Guarantor’s Contribution Percentage of
the aggregate payments made to and including the date of the Relevant Payment
by all Guarantors in respect of the Guaranteed Obligations (the aggregate
amount of such deficit, the “Aggregate Deficit Amount”) in an amount
equal to (x) a fraction the numerator of which is the Aggregate Excess Amount
of such Guarantor and the denominator of which is the Aggregate Excess Amount
of all Guarantors multiplied by (y) the Aggregate Deficit Amount of such other
Guarantor.  A Guarantor’s right of
contribution pursuant to the preceding sentences shall arise at the time of
each computation, subject to adjustment to the time of each computation; provided
that no Guarantor may take any action to enforce such right until the
Guaranteed Obligations have been irrevocably paid in full in cash, it being
expressly recognized and agreed by all parties hereto that any Guarantor’s
right of contribution arising pursuant to this Section 23 against any other
Guarantor shall be expressly junior and subordinate to such other Guarantor’s
obligations and liabilities in respect of the Guaranteed Obligations and any
other obligations owing under this Guaranty. 
As used in this Section 23:  (i)
each Guarantor’s “Contribution Percentage” shall mean the percentage
obtained by dividing (x) the Adjusted Net Worth (as defined below) of such
Guarantor by (y) the aggregate Adjusted Net Worth of all Guarantors; (ii) the “Adjusted
Net Worth” of each Guarantor shall mean the greater of (x) the Net Worth
(as defined below) of such Guarantor and (y) zero; and (iii) the “Net Worth”
of each Guarantor shall mean the amount by which the fair saleable value of
such Guarantor’s assets on the date of any Relevant Payment exceeds its
existing debts and other liabilities (including contingent liabilities, but
without giving effect to any Guaranteed Obligations arising under this Guaranty
or any guaranteed obligations arising

 

 

under any guaranty of
Refinancing Senior Subordinated Notes, if any) on such date.  Notwithstanding anything to the contrary
contained above, any Guarantor that is released from this Guaranty pursuant to
Section 22 hereof shall thereafter have no contribution obligations, or rights,
pursuant to this Section 23, and at the time of any such release, if the
released Guarantor had an Aggregate Excess Amount or an Aggregate Deficit
Amount, same shall be deemed reduced to $0, and the contribution rights and
obligations of the remaining Guarantors shall be recalculated on the respective
date of release (as otherwise provided above) based on the payments made
hereunder by the remaining Guarantors. 
All parties hereto recognize and agree that, except for any right of
contribution arising pursuant to this Section 23, each Guarantor who makes any
payment in respect of the Guaranteed Obligations shall have no right of
contribution or subrogation against any other Guarantor in respect of such
payment until all of the Guaranteed Obligations have been irrevocably paid in
full in cash.  Each of the Guarantors
recognizes and acknowledges that the rights to contribution arising hereunder
shall constitute an asset in favor of the party entitled to such
contribution.  In this connection, each
Guarantor has the right to waive its contribution right against any Guarantor
to the extent that after giving effect to such waiver such Guarantor would
remain solvent, in the determination of the Required Lenders.

 

24.                                 (a) 
Each Guarantor and each Secured Creditor (by its acceptance of the
benefits of this Guaranty) hereby confirms that it is its intention that this
Guaranty not constitute a fraudulent transfer or conveyance for purposes of the
Bankruptcy Code, the Uniform Fraudulent Conveyance Act of any similar Federal
or state law.  To effectuate the
foregoing intention, each Guarantor and each Secured Creditor (by its
acceptance of the benefits of this Guaranty) hereby irrevocably agrees that the
Guaranteed Obligations guaranteed by such Guarantor shall be limited to such
amount as will, after giving effect to such maximum amount and all other
(contingent or otherwise) liabilities of such Guarantor that are relevant under
such laws (it being understood that it is the intention of the parties to this
Guaranty and the parties to any guaranty of the Refinancing Senior Subordinated
Notes that, to the maximum extent permitted under applicable laws, the
liabilities in respect of the guarantees of the Refinancing Senior Subordinated
Notes shall not be included for the foregoing purposes and that, if any
reduction is required to the amount guaranteed
by any Guarantor hereunder and with respect to the Refinancing Senior
Subordinated Notes, its guarantee of amounts owing in respect of the
Refinancing Senior Subordinated Notes shall first be reduced) and after giving
effect to any rights to contribution pursuant to any agreement providing for an
equitable contribution among such Guarantor and the other Guarantors, result in
the Guaranteed Obligations of such Guarantor in respect of such maximum amount
not constituting a fraudulent transfer or conveyance.  Notwithstanding the provisions of the two preceding sentences, as
between the Secured Creditors and the holders of any Refinancing Senior
Subordinated Notes, it is agreed (and the provisions of the relevant indentures
or other agreements governing the Refinancing Senior Subordinated Notes shall
so provide) that any diminution (whether pursuant to court decree or otherwise)
of any Guarantor’s obligation to make any distribution or payment pursuant to
this Guaranty shall have no force or effect for purposes of the subordination
provisions contained in the respective indenture or other agreements governing
any such Refinancing Senior Subordinated Notes, and that any payments received
in respect of a Guarantor’s obligations with respect to any Refinancing Senior
Subordinated Notes shall be turned over to the holders of the “Guarantor Senior
Debt” or similar term (as defined in each indenture or other agreements
governing any Refinancing Senior Subordinated Notes) (or obligations which
would have constituted “Guarantor Senior Debt” if same had not been reduced or
disallowed) of such Guarantor (which

 

 

“Guarantor Senior Debt” shall
be calculated as if there were no diminution thereto pursuant to this Section
24 or for any other reason other than the irrevocable payment in full in cash
of the respective obligations which would otherwise have constituted “Guarantor
Senior Debt”) until all such Guarantor Senior Debt (or obligations which would
have constituted “Guarantor Senior Debt” if same had not been reduced or
disallowed) has been irrevocably paid in full in cash.

 

(b)                                 This Guaranty shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned by the Borrower upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower, or
otherwise, all as though such payment had not been made. The Guarantor further
agrees that, without limiting the generality of this Guaranty, if an Event of
Default shall have occurred and be continuing and any Secured Creditor is
prevented by applicable law, including, without limitation, the imposition of
an injunction under Section 105 of the Bankruptcy Code or similar provisions of
any United States or foreign law for the relief of debtors, from exercising its
remedies under the Credit Documents, such Secured Creditor shall be entitled to
receive hereunder from each Guarantor, upon demand therefor, the sums which
would have otherwise been due from the Borrower had such remedies been
exercised.

 

25.                                 This Guaranty may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.  A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.

 

26.                                 All payments made by any Guarantor
hereunder will be made without setoff, counterclaim or other defense and on the
same basis as payments are made by the Borrower under Sections 4.03 and 4.04 of
the Second-Lien Credit Agreement.

 

27.                                 It is understood and agreed that any
Subsidiary of Holdings that is required to execute a counterpart of this
Guaranty after the date hereof pursuant to the Second-Lien Credit Agreement
shall become a Guarantor hereunder by (x) executing and delivering a
counterpart hereof or appropriate assumption agreement to the Administrative
Agent, in each case as may be requested by (and in form and substance
satisfactory to) the Administrative Agent and (y) taking all actions as
specified in this Guaranty as would have been taken by such Guarantor had it
been an original party to this Guaranty, in each case with all documents and
actions required to be taken to be taken above to the reasonable satisfaction
of the Administrative Agent.

 

*  *  *

 

 

IN WITNESS
WHEREOF, each Guarantor has caused this Guaranty to be executed and delivered
as of the date first above written.

 

	
  Address:

  	
   

  
	
   

  	
   

  
	
  2366
  Bernville Road

  	
  ENERSYS
  DELAWARE INC.,

  
	
  Reading, PA,
  19605

  	
  as a
  Guarantor

  
	
  Telephone:  (610) 208-1991

  	
   

  
	
  Facsimile:  (610) 208-1671

  	
   

  
	
  Attention:
  Michael T. Philion

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  2366
  Bernville Road

  	
  ESFINCO,
  INC.,

  
	
  Reading, PA,
  19605

  	
  as a
  Guarantor

  
	
  Telephone:  (610) 208-1991

  	
   

  
	
  Facsimile:  (610) 208-1671

  	
   

  
	
  Attention:
  Michael T. Philion

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  2366
  Bernville Road

  	
  ESRMCO,
  INC.,

  
	
  Reading, PA,
  19605

  	
  as a
  Guarantor

  
	
  Telephone:  (610) 208-1991

  	
   

  
	
  Facsimile:  (610) 208-1671

  	
   

  
	
  Attention:
  Michael T. Philion

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  2366
  Bernville Road

  	
  HAWKER
  ENERGY PRODUCTS INC.,

  
	
  Reading, PA,
  19605

  	
  as a
  Guarantor

  
	
  Telephone:  (610) 208-1991

  	
   

  
	
  Facsimile:  (610) 208-1671

  	
   

  
	
  Attention:
  Michael T. Philion

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
  2366
  Bernville Road

  	
  HAWKER POWER
  SYSTEMS, INC.,

  
	
  Reading, PA,
  19605

  	
  as a
  Guarantor

  
	
  Telephone:  (610) 208-1991

  	
   

  
	
  Facsimile:  (610) 208-1671

  	
   

  
	
  Attention:
  Michael T. Philion

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  2366
  Bernville Road

  	
  POWERSAFE
  STANDBY BATTERIES INC.,

  
	
  Reading, PA,
  19605

  	
  as a
  Guarantor

  
	
  Telephone:  (610) 208-1991

  	
   

  
	
  Facsimile:  (610) 208-1671

  	
   

  
	
  Attention:
  Michael T. Philion

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  2366
  Bernville Road

  	
  HAWKER
  POWERSOURCE, INC.,

  
	
  Reading, PA,
  19605

  	
  as a
  Guarantor

  
	
  Telephone:  (610) 208-1991

  	
   

  
	
  Facsimile:  (610) 208-1671

  	
   

  
	
  Attention:
  Michael T. Philion

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  2366
  Bernville Road

  	
  NEW PACIFICO
  REALTY, INC.,

  
	
  Reading, PA,
  19605

  	
  as a
  Guarantor

  
	
  Telephone:  (610) 208-1991

  	
   

  
	
  Facsimile:  (610) 208-1671

  	
   

  
	
  Attention:
  Michael T. Philion

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
  Accepted and Agreed to:

  	
   

  
	
   

  	
   

  
	
  BANK OF AMERICA, N.A.,

  	
   

  
	
  as Administrative Agent

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
  ,

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:Exhibit 10.17

 

INTERCREDITOR AGREEMENT

 

This INTERCREDITOR
AGREEMENT, dated as of March 17, 2004, and entered into by and among ENERSYS, a
Delaware corporation ( “Holdings”), 
ENERSYS CAPITAL INC., a Delaware corporation (the “Borrower”),
BANK OF AMERICA, N.A. (“Bank of America”), in its capacity as collateral
agent for the First-Lien Obligations (as defined below) (together with its
successors and assigns from time to time, the “First-Lien Collateral Agent”)
and in its capacity as collateral agent for the Second-Lien Obligations (as
defined below (together with its successors and assigns from time to time, the
“Second-Lien Collateral Agent”). 
Capitalized terms used herein but not otherwise defined herein have the
meanings set forth in Section 1 below.

 

RECITALS

 

WHEREAS, Holdings, the
Borrower, the lenders party thereto, Bank of America, as administrative agent
(in such capacity, together with any successor or assigns, the “First-Lien
Administrative Agent”), Morgan Stanley Senior Funding, Inc., as syndication
agent, and Lehman Commercial Paper Inc., as documentation agent, have entered
into that certain Credit Agreement, dated as of the date hereof (as amended,
restated, supplemented, modified and/or Refinanced from time to time, the “First-Lien
Credit Agreement”);

 

WHEREAS, Holdings, the
Borrower, the lenders party thereto, Bank of America, as administrative agent
(in such capacity, together with any successor or assigns, the “Second-Lien
Administrative Agent”), Morgan Stanley Senior Funding, Inc., as syndication
agent, and Lehman Commercial Paper Inc., as documentation agent, have entered
into that certain Second-Lien Credit Agreement, dated as of the date hereof (as
amended, restated, supplemented, modified and/or Refinanced from time to time,
the “Second-Lien Credit Agreement”);

 

WHEREAS, the obligations
of Holdings, the Borrower and the other Grantors under the First-Lien Credit
Documents and all Secured Hedging Agreements will be secured by substantially
all the assets of Holdings, the Borrower and the other Grantors, respectively,
pursuant to the terms of the First-Lien Security Documents;

 

WHEREAS, the obligations
of Holdings, the Borrower and the other Grantors under the Second-Lien Credit
Documents will be secured by substantially all the assets of Holdings, the
Borrower and the other Grantors, respectively, pursuant to the terms of the
Second-Lien Security Documents;

 

WHEREAS, the First-Lien
Credit Documents and the Second-Lien Credit Documents provide, among other
things, that the parties thereto shall set forth in this Agreement their
respective rights and remedies with respect to the Collateral;

 

WHEREAS, in order to
induce the First-Lien Collateral Agent and the First-Lien Creditors to consent
to the Grantors incurring the Second-Lien Obligations and to induce the
First-Lien Creditors to extend credit and other financial accommodations and
lend monies to or for the benefit of the Borrower or any other Grantor, the
Second-Lien Collateral Agent on behalf of the Second-Lien Creditors (and each
Second-Lien Creditor by its acceptance of the benefits of

 

 

the Second-Lien Security
Documents) has agreed to the subordination, intercreditor and other provisions
set forth in this Agreement; and

 

WHEREAS, Holdings, the
Borrower and the Subsidiary Guarantors may, from time to time, incur additional
secured debt which Holdings, the Borrower and the First-Lien Collateral Agent
may agree may share a first-priority security interest in the Collateral in
accordance with the First-Lien Credit Documents in existence at the time of
such incurrence;

 

NOW, THEREFORE, in
consideration of the foregoing, the mutual covenants and obligations herein set
forth and for other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:

 

SECTION 1.  Definitions.

 

1.1           Defined Terms.  As used in the Agreement, the following
terms shall have the following meanings:

 

“Agreement” means
this Agreement, as amended, renewed, extended, supplemented or otherwise
modified from time to time in accordance with the terms hereof.

 

“Bankruptcy Code”
means Title 11 of the United States Code entitled “Bankruptcy,” as now and
hereafter in effect, or any successor statute.

 

“Bankruptcy Law”
means the Bankruptcy Code and any similar federal, state or foreign law for the
relief of debtors.

 

 “Business Day” means a day other than
a Saturday, Sunday or other day on which commercial banks in New York City are
authorized or required by law to close.

 

“Collateral” means
all of the assets and property of any Grantor, whether real, personal or mixed,
constituting both First-Lien Collateral and Second-Lien Collateral.

 

“Collateral Agent”
means, as the context requires, collectively, the First-Lien Collateral Agent
and the Second-Lien Collateral Agent.

 

“Commodity Agreements” shall mean commodity
agreements, hedging agreements and other similar agreements or arrangements
designed to protect against price fluctuations of commodities (e.g.,
lead) used in the business of the Borrower and its Subsidiaries.

 

“Comparable
Second-Lien Security Document” means, in relation to any Collateral subject
to any Lien created under any First-Lien Security Document, that Second-Lien
Security Document which creates a Lien on the same Collateral, granted by the
same Grantor.

 

“Creditors” means,
collectively, the First-Lien Creditors and the Second-Lien Creditors.

 

 

“Discharge of
First-Lien Credit Agreement Obligations”  means,
except to the extent otherwise provided in Section 5.6 (and subject to Section
6.5), (a) payment in full in cash of the principal of and interest (including
interest accruing on or after the commencement of any Insolvency or Liquidation
Proceeding, whether or not such interest would be allowed in such Insolvency or
Liquidation Proceeding) and premium, if any, on all Indebtedness outstanding
under the First-Lien Credit Documents, (b) payment in full of all other
First-Lien Obligations (other than Hedging Obligations) that are due and
payable or otherwise accrued and owing at or prior to the time such principal
and interest are paid, (c) termination (without any prior demand for payment
thereunder having been made or, if made, with such demand having been fully
reimbursed in cash) or cash collateralization (in an amount and manner, and on
terms, satisfactory to the First-Lien Collateral Agent) of all letters of
credit issued by any First-Lien Creditor and (d) termination of all other
commitments of the First-Lien Creditors under the First-Lien Credit Documents.

 

“Discharge of
First-Lien Obligations”  means,
except to the extent otherwise provided in Section 5.6, (a) payment in full in
cash of the principal of and interest (including interest accruing on or after
the commencement of any Insolvency or Liquidation Proceeding, whether or not
such interest would be allowed in such Insolvency or Liquidation Proceeding)
and premium, if any, on all Indebtedness outstanding under the First-Lien
Documents, (b) payment in full of all other First-Lien Obligations that are due
and payable or otherwise accrued and owing at or prior to the time such
principal and interest are paid, (c) termination (without any prior demand for
payment thereunder having been made or, if made, with such demand having been
fully reimbursed in cash) or cash collateralization (in an amount and manner,
and on terms, satisfactory to the First-Lien Collateral Agent) of all letters
of credit and Secured Hedging Agreements issued or entered into, as the case
may be, by any First-Lien Creditor and (d) termination of all other commitments
of the First-Lien Creditors under the First-Lien Credit Documents.

 

“First-Lien Collateral”
means all of the assets and property of any Grantor, whether real, personal or
mixed, with respect to which a Lien is granted as security for any First-Lien
Obligations.

 

“First-Lien Collateral
Agent” has the meaning provided in the first paragraph of this Agreement.

 

“First-Lien
Credit Agreement”
has the meaning set forth in the recitals hereto.

 

“First-Lien Credit
Documents” means the First-Lien Credit Agreement and the Credit Documents
(as defined in the First-Lien Credit Agreement) and each of the other
agreements, documents and instruments providing for or evidencing any other
First-Lien Obligation and any other document or instrument executed or
delivered at any time in connection with any First-Lien Obligation (including
any intercreditor or joinder agreement among holders of First-Lien Obligations
but excluding Secured Hedging Agreements), to the extent such are effective at
the relevant time, as each may be amended, modified, restated, supplemented,
replaced and/or Refinanced from time to time; provided that no such
modification of the First-Lien Credit Agreement shall increase the maximum
aggregate principal amount of Loans and stated amount of Letters of Credit
thereunder to amount in excess of $580,000,000.

 

 

“First-Lien Creditors”  means, at any relevant time, the holders
of First-Lien Obligations at such time, including, without limitation, the
First-Lien Lenders, the Hedging Creditors, the First-Lien Collateral Agent, the
First-Lien Administrative Agent and the other agents under the First-Lien
Credit Agreement.

 

“First-Lien Documents”
shall mean and include the First-Lien Credit Documents and the Secured Hedging
Agreements.

 

“First-Lien Lenders”
means the “Lenders” under, and as defined in, the First-Lien Credit Agreement; provided
that the term “First-Lien Lender” shall in any event include each letter of
credit issuer and each swingline lender under the First-Lien Credit Agreement.

 

“First-Lien
Obligations” means (i) all Obligations outstanding under the First-Lien
Credit Agreement and the other First-Lien Credit Documents, and (ii) all
Hedging Obligations.  “First-Lien
Obligations” shall in any event include: 
(a) all interest accrued or accruing (or which would, absent
commencement of an Insolvency or Liquidation Proceeding (and the effect of
provisions such as Section 502(b)(2) of the Bankruptcy Code), accrue) after
commencement of an Insolvency or Liquidation Proceeding in accordance with the
rate specified in the relevant First-Lien Document, whether or not the claim
for such interest is allowed as a claim in such Insolvency or Liquidation
Proceeding, (b) any and all fees and expenses (including attorneys’ and/or
financial consultants’ fees and expenses) incurred by the First-Lien Collateral
Agent, the First-Lien Administrative Agent and the First-Lien Creditors after
the commencement of an Insolvency or Liquidation Proceeding, whether or not the
claim for fees and expenses is allowed under Section 506(b) of the Bankruptcy
Code or any other provision of the Bankruptcy Code or Bankruptcy Law as a claim
in such Insolvency or Liquidation Proceeding and (c) all obligations and
liabilities of each Grantor under each First-Lien Document to which it is a
party which, but for the automatic stay under Section 362(a) of the Bankruptcy
Code, would become due.

 

“First-Lien Pledge
Agreement” means the Pledge Agreement, dated as of the date hereof, among
Holdings, the Borrower, the other Grantors and the First-Lien Collateral Agent,
as the same may be amended, supplemented, restated, modified and/or Refinanced
from time to time.

 

“First-Lien Required
Lenders” shall mean the “Required Lenders” under, and as defined in, the
First-Lien Credit Agreement.

 

“First-Lien Security
Agreement” means the Security Agreement, dated as of the date hereof, among
Holdings, the Borrower, the other Grantors and the First-Lien Collateral Agent,
as the same may be amended, supplemented, restated, modified and/or Refinanced
from time to time.

 

 “First-Lien Security Documents” means
the Security Documents (as defined in the First-Lien Credit Agreement) and any
other agreement, document or instrument pursuant to which a Lien is granted
securing any First-Lien Obligations or under which rights or remedies with
respect to such Liens are governed, as the same may be amended, supplemented,
restated, modified and/or Refinanced from time to time.

 

 

“Governmental
Authority” means the government of the United States of America or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central
bank or other entity exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining to government
(including any supra-national bodies such as the European Union or the European
Central Bank).

 

“Grantors” means
Holdings, the Borrower and each of the Subsidiary Guarantors that have executed
and delivered, or may from time to time hereafter execute and deliver, a
First-Lien Security Document or a Second-Lien Security Document.

 

“Hedging Creditor”
means (i) each First-Lien Lender or any affiliate thereof (even if the
respective First-Lien Lender subsequently ceases to be a First-Lien Lender
under the Credit Agreement for any reason) party to an Interest Rate Protection
Agreement, Commodities Agreement or Other Hedging Agreement with any Grantor,
(ii) each financial institution party to an Existing Interest Rate Protection
Agreement (as defined in the First-Lien Credit Agreement) and (iii) the
respective successors and assigns of each such First-Lien Lender, affiliate or
other financial institution referred to in clause (i) or (ii) above, as applicable.

 

 “Hedging Obligations” means (i) the
full and prompt payment when due (whether at the stated maturity, by
acceleration or otherwise) of all obligations (including obligations which, but
for the automatic stay under Section 362(a) of the Bankruptcy Code, would
become due) and liabilities (including, without limitation, indemnities, fees
and interest thereon and all interest that accrues after the commencement of
any Insolvency or Liquidation Proceeding at the rate provided for in the
respective documentation, whether or not a claim for post-petition interest is
allowed in any such Insolvency or Liquidation Proceeding) of each Grantor owing
to the Hedging Creditors, now existing or hereafter incurred under, arising out
of or in connection with each Secured Hedging Agreement (including all such
obligations and indebtedness under any guarantee to which each Grantor is a
party) and (ii) the due performance and compliance by each Grantor with the
terms, conditions and agreements of each Secured Hedging Agreement.

 

“Indebtedness”
means and includes all Obligations that constitute “Indebtedness” within the
meaning of the First-Lien Credit Agreement or the Second-Lien Credit Agreement.

 

“Insolvency or
Liquidation Proceeding” means (a) any voluntary or involuntary case or
proceeding under the Bankruptcy Code with respect to any Grantor, (b) any other
voluntary or involuntary insolvency, reorganization or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding with respect to any Grantor or with respect to a material
portion of their respective assets, (c) any liquidation, dissolution,
reorganization or winding up of any Grantor whether voluntary or involuntary
and whether or not involving insolvency or bankruptcy or (d) any assignment for
the benefit of creditors or any other marshalling of assets and liabilities of
any Grantor.

 

“Interest Rate
Protection Agreement” shall mean any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement, interest rate hedging
agreement or other similar agreement or arrangement.

 

 

“Letters of Credit”
shall mean “Letters of Credit” under, and as defined in, the First-Lien Credit
Agreement.

 

“Lien” shall mean
any mortgage, pledge, security interest, encumbrance, lien or charge of any
kind (including any agreement to give any of the foregoing, any conditional
sale or other title retention agreement, any financing or similar statement or
notice filed under the UCC or any similar recording or notice statute, and any
lease having substantially the same effect as the foregoing).

 

“Loans” shall mean
“Loans” under, and as defined in, the First-Lien Credit Agreement.

 

“Obligations”
means any and all obligations (including guaranty obligations) with respect to
the payment and performance of (a) any principal of or interest or premium on
any indebtedness, including any reimbursement obligation in respect of any
letter of credit, or any other liability, including interest that accrues after
the commencement of any Insolvency or Liquidation Proceeding of any Grantor at
the rate provided for in the respective documentation, whether or not a claim
for post-petition interest is allowed in any such Insolvency or Liquidation
Proceeding, (b) any fees, indemnification obligations, expense reimbursement
obligations or other liabilities payable under the documentation governing any
indebtedness (including, without limitation, the retaking, holding, selling or
otherwise disposing of or realizing on the Collateral), (c) any obligation to
post cash collateral in respect of letters of credit or any other obligations,
and (d) all performance obligations under the documentation governing any
indebtedness.

 

“Other Hedging
Agreements” shall mean any foreign exchange contracts, currency swap
agreements or other similar agreements or arrangements designed to protect
against fluctuations in currency values.

 

“Person” means any
natural person, corporation, limited liability company, trust, joint venture,
association, company, partnership, Governmental Authority or other entity.

 

“Pledge Agreements”
means, collectively, (i) the First-Lien Pledge Agreement and (ii) the
Second-Lien Pledge Agreement.

 

“Pledged Collateral”
means (a) the “Collateral” under, and as defined in, the First-Lien Pledge
Agreement and in the Second-Lien Pledge Agreement, respectively, and (b) any
other Collateral in the possession of the First-Lien Collateral Agent (or its
agents or bailees), to the extent that possession thereof is taken to perfect a
Lien thereon under the Uniform Commercial Code.

 

“Recovery” has the meaning set forth in Section 6.5
hereof.

 

“Refinance” means,
in respect of any indebtedness, to refinance, extend, renew, defease, amend,
modify, supplement, restructure, replace, refund or repay, or to issue other
indebtedness, in exchange or replacement for, such indebtedness.  “Refinanced” and “Refinancing”  shall have correlative meanings.

 

 

“Required First-Lien
Creditors” shall mean (i) at all times prior to the occurrence of the
Discharge of First-Lien Credit Agreement Obligations, the First-Lien Required
Lenders (or, to the extent required by the First-Lien Credit Agreement, each of
the First-Lien Lenders), and (ii) at all times after the occurrence of the
Discharge of First-Lien Credit Agreement Obligations, the holders of at least
the majority of the then outstanding Hedging Obligations (determined by the
First-Lien Collateral Agent in such reasonable manner as is acceptable to it).

 

“Second-Lien
Collateral” means all of the assets of any Grantor, whether real, personal
or mixed, with respect to which a Lien is granted as security for any Second-Lien
Obligations.

 

“Second-Lien
Collateral Agent”
has the meaning set forth in the preamble hereof.

 

“Second-Lien
Credit Agreement”
has the meaning set forth in the recitals hereto.

 

“Second-Lien Credit
Documents” means the Second-Lien Credit Agreement and the Credit Documents
(as defined in the Second-Lien Credit Agreement) and each of the other
agreements, documents and instruments providing for or evidencing any other
Second-Lien Obligation, and any other document or instrument executed or
delivered at any time in connection with any Second-Lien Obligation, as the same may be amended, modified or
otherwise supplemented from time to time in accordance with the terms hereof,
thereof and the First-Lien Credit Agreement; provided that any such
modification does not increase the aggregate principal amount thereof beyond
the limit set forth in the First-Lien Credit Agreement and is otherwise in
accordance with the provisions of this First-Lien Credit Agreement.

 

“Second-Lien Creditors”
means, at any relevant time, the holders of Second-Lien Obligations at such time, including without
limitation the Second-Lien Lenders, the Second-Lien Collateral Agent, the
Second-Lien Administrative Agent and the other agents under the Second-Lien
Credit Agreement.

 

“Second-Lien
Obligations” means all Obligations outstanding under the Second-Lien Credit
Agreement and the other Second-Lien Credit Documents.  “Second-Lien Obligations” shall in any event include:  (a) all interest accrued or accruing (or
which would, absent commencement of an Insolvency or Liquidation Proceeding
(and the effect of provisions such as Section 502(b)(2) of the Bankruptcy
Code), accrue) after commencement of an Insolvency or Liquidation Proceeding in
accordance with the rate specified in the relevant Second-Lien Credit Document
whether or not the claim for such interest is allowed as a claim in such
Insolvency or Liquidation Proceeding and (b) any and all fees and expenses
(including attorneys’ and/or financial consultants’ fees and expenses) incurred
by the Second-Lien Collateral Agent, the Second-Lien Administrative Agent and
the Second-Lien Creditors after the commencement of an Insolvency or Liquidation
Proceeding, whether or not the claim for fees and expenses is allowed under
Section 506(b) of the Bankruptcy Code or any other provision of the Bankruptcy
Code or Bankruptcy Law as a claim in such Insolvency or Liquidation Proceeding.

 

“Second-Lien
Lenders” means
the “Lenders” under and as defined in the Second-Lien Credit Agreement.

 

 

“Second-Lien Mortgages”
means a collective reference to each mortgage, deed of trust and any other
document or instrument under which any Lien on real property owned by any
Grantor is granted to secure any Second-Lien Obligations or under which rights
or remedies with respect to any such Liens are governed.

 

“Second-Lien Security
Agreement” means the Security Agreement, dated as of the date hereof, among
Holdings, the Borrower, the other Grantors and the Second-Lien Collateral
Agent, as the same may be amended, supplemented, restated or otherwise modified
from time to time in accordance with the terms hereof and thereof.

 

“Second-Lien Pledge
Agreement” means the Pledge Agreement, dated as of the date hereof, among
Holdings, the Borrower, the other Grantors and the Second-Lien Collateral
Agent, as the same may be amended, supplemented, restated or otherwise modified
from time to time in accordance with the terms hereof and thereof.

 

 “Second-Lien Security Documents” means
the Security Documents (as defined in the Second-Lien Credit Agreement) and any
other agreement, document, mortgage or instrument pursuant to which a Lien is
granted securing any Second-Lien Obligations or under which rights or remedies
with respect to such Liens are governed, as the same may be amended,
supplemented, restated or otherwise modified from time to time in accordance
with the terms hereof and thereof.

 

“Secured Hedging
Agreements” shall mean each Interest Rate Protection Agreement, each
Commodities Agreement and each Other Hedging Agreement, in each case entered
into by a Grantor and any Hedging Creditor.

 

“Security Documents”
means, collectively, the First-Lien Security Documents and the Second-Lien
Security Documents.

 

“Subsidiary” of
any Person shall mean and include (i) any corporation more than 50% of whose
stock of any class or classes having by the terms thereof ordinary voting power
to elect a majority of the directors of such corporation (irrespective of
whether or not at the time stock of any class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time owned by such Person directly or indirectly through
Subsidiaries and (ii) any partnership, limited liability Borrower, association,
joint venture or other entity (other than a corporation) in which such Person
directly or indirectly through Subsidiaries, has more than a 50% equity
interest at the time.

 

“Subsidiary
Guarantors” means
each Subsidiary of the Borrower which enters into a guaranty of any First-Lien
Obligations or Second-Lien Obligations.

 

“Uniform
Commercial Code”
or “UCC” means the
Uniform Commercial Code as from time to time in effect in the State of New
York.

 

1.2           Terms Generally.  The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined.  Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes”
and “including” shall be deemed to be followed by the phrase “without

 

 

limitation.”  The word “will” shall be construed to
have the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified, (b) any reference herein
to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”,
and words of similar import, shall be construed to refer to this Agreement in
its entirety and not to any particular provision hereof, (d) all references
herein to Exhibits or Sections shall be construed to refer to Exhibits or
Sections of this Agreement, (e) the words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights, (f) terms defined in the UCC but not otherwise
defined herein shall have the same meanings herein as are assigned thereto in
the UCC, (g) reference to any law means such law as amended, modified,
codified, replaced or re-enacted, in whole or in part, and in effect on the
date hereof, including rules, regulations, enforcement procedures and any
interpretations promulgated thereunder and (h) underscored references to
Sections or clauses shall refer to those portions of this Agreement, and any
underscored references to a clause shall, unless otherwise identified, refer to
the appropriate clause within the same Section in which such reference occurs.

 

SECTION
2.  Priority of Liens.

 

2.1           Subordination.  Notwithstanding the date, manner or order of
grant, attachment or perfection of any Liens securing the Second-Lien
Obligations granted on the Collateral or of any Liens securing the First-Lien
Obligations granted on the Collateral and notwithstanding any provision of the
UCC, or any applicable law or the Second-Lien Credit Documents or any other
circumstance whatsoever (including any non-perfection of any Lien purporting to
secure the First-Lien Obligations and Second-Lien Obligations), the Second-Lien
Collateral Agent, on behalf of itself and the other Second-Lien Creditors, and
each other Second-Lien Creditor (by its acceptance of the benefits of the
Second-Lien Credit Documents) hereby agrees that:  (a) any Lien on the Collateral securing any First-Lien
Obligations now or hereafter held by or on behalf of the First-Lien Collateral
Agent or any First-Lien Creditors or any agent or trustee therefor, regardless
of how acquired, whether by grant, possession, statute, operation of law,
subrogation or otherwise, shall be senior in all respects and prior to any Lien
on the Collateral securing any of the Second-Lien Obligations; and (b) any Lien
on the Collateral now or hereafter held by or on behalf of the Second-Lien
Collateral Agent, any Second-Lien Creditors or any agent or trustee therefor
regardless of how acquired, whether by grant, possession, statute, operation of
law, subrogation or otherwise, shall be junior and subordinate in all respects
to all Liens on the Collateral securing any First-Lien Obligations.  All Liens on the Collateral securing any
First-Lien Obligations shall be and remain senior in all respects and prior to
all Liens on the Collateral securing any Second-Lien Obligations for all
purposes, whether or not such Liens securing any First-Lien Obligations are
subordinated to any Lien securing any other obligation of Holdings, the
Borrower, any other Grantor or any other Person.

 

2.2           Prohibition on Contesting Liens.  Each of the Second-Lien Collateral Agent,
for itself and on behalf of each Second-Lien Creditor, and the First-Lien
Collateral Agent, for itself and on behalf of each First-Lien Creditor, agrees
that it shall not (and hereby waives any right to) contest or support any other
Person in contesting, in any proceeding (including any

 

 

Insolvency or Liquidation
Proceeding), (i) the validity or enforceability of any Security Document or any
Obligation thereunder, (ii) the validity, perfection, priority or
enforceability of the Liens, mortgages, assignments and security interests
granted pursuant to the Security Documents with respect to the First-Lien
Obligations or (iii) the relative rights and duties of the holders of the
First-Lien Obligations and the Second-Lien Obligations granted and/or established
in this Agreement or any other Security Document with respect to such Liens,
mortgages, assignments, and security interests; provided that nothing in
this Agreement shall be construed to prevent or impair the rights of the
First-Lien Collateral Agent or any First-Lien Creditor to enforce this
Agreement, including the priority of the Liens securing the First-Lien
Obligations as provided in Section 3.1.

 

2.3           No New Liens.  So long as the Discharge of First-Lien
Obligations has not occurred, the parties hereto agree that neither Holdings
nor the Borrower shall, and shall not permit any Subsidiary Guarantor to, grant
or permit any additional Liens, or take any action to perfect any additional
Liens, on any asset or property to secure any Second-Lien Obligation unless it
has also granted a Lien on such asset or property to secure the First-Lien
Obligations.  To the extent that the
foregoing provisions are not complied with for any reason, without limiting any
other rights and remedies available to the First-Lien Collateral Agent and/or
the other First-Lien Creditors, the Second-Lien Collateral Agent, on behalf of
itself and the other Second-Lien Creditors, and each other Second-Lien Creditor
(by its acceptance of the benefits of the Second-Lien Credit Documents), agrees
that any amounts received by or distributed to any of them pursuant to or as a
result of Liens granted in contravention of this Section 2.3 shall be subject
to Section 4.2.

 

2.4           Similar Liens and Agreements.  The parties hereto agree that it is their
intention that the Second-Lien Collateral not be more expansive than the
First-Lien Collateral.  In furtherance
of the foregoing and of Section 8.9, the Second-Lien Collateral Agent and the
other Second-Lien Creditors agree, subject to the other provisions of this
Agreement:

 

(i) 
upon request by the First-Lien Collateral Agent, to cooperate in good
faith (and to direct their counsel to cooperate in good faith) from time to
time in order to determine the specific items included in the Second-Lien
Collateral and the steps taken to perfect the Liens thereon and the identity of
the respective parties obligated under the Second-Lien Credit Documents; and

 

(ii) 
that the guarantees for the First-Lien Obligations and the Second-Lien
Obligations shall be substantially the same forms of documents.

 

SECTION
3.  Enforcement.

 

3.1           Exercise of Remedies.  (a) 
So long as the Discharge of First-Lien Obligations has not occurred,
whether or not any Insolvency or Liquidation Proceeding has been commenced by
or against Holdings, the Borrower or any other Grantor:  (i) the Second-Lien Collateral Agent and the
other Second-Lien Creditors will not exercise or seek to exercise any rights or
remedies (including setoff) with respect to any Collateral (including, without limitation,
the exercise of any right under any lockbox agreement, control account
agreement, landlord waiver or bailee’s letter or similar agreement or
arrangement to which the Second-Lien

 

 

Collateral Agent or any
Second-Lien Creditor is a party) or institute or commence, or join with any
Person in commencing, any action or proceeding with respect to such rights or
remedies (including any action of foreclosure, enforcement, collection or
execution and any Insolvency or Liquidation Proceeding), and will not contest,
protest or object to any foreclosure proceeding or action brought by the
First-Lien Collateral Agent or any First-Lien Creditor or any other exercise by
the First-Lien Collateral Agent or any First-Lien Creditor, of any rights and
remedies relating to the Collateral under the First-Lien Credit Documents or
otherwise, or object to the forbearance by the First-Lien Collateral Agent or
the First-Lien Creditors from bringing or pursuing any foreclosure proceeding
or action or any other exercise of any rights or remedies relating to the
Collateral; and (ii) the First-Lien Collateral Agent shall have the exclusive
right, and the Required First-Lien Creditors shall have the exclusive right to
instruct the First-Lien Collateral Agent, to enforce rights, exercise remedies
(including set-off and the right to credit bid their debt) and make
determinations regarding the release, disposition, or restrictions with respect
to the Collateral without any consultation with or the consent of the
Second-Lien Collateral Agent or any Second-Lien Creditor, all as though the
Second-Lien Obligations did not exist; provided, that (A) in any
Insolvency or Liquidation Proceeding commenced by or against the Borrower or
any other Grantor, the Second-Lien Collateral Agent may file a claim or
statement of interest with respect to the Second-Lien Obligations, (B) the
Second-Lien Collateral Agent may take any action (not adverse to the prior
Liens on the Collateral securing the First-Lien Obligations, or the rights of
the First-Lien Collateral Agent or the First-Lien Creditors to exercise
remedies in respect thereof) in order to preserve or protect its Lien on the
Collateral in accordance with the terms of this Agreement and (C) the
Second-Lien Creditors shall be entitled to file any necessary responsive or
defensive pleading in opposition to any motion, claim, adversary proceeding or
other pleading made by any person objecting to or otherwise seeking the
disallowance of the claims of the Second-Lien Creditors, including any claim secured
by the Collateral, if any, in each case in accordance with the terms of this
Agreement.  In exercising rights and
remedies with respect to the Collateral, the First-Lien Collateral Agent and
the First-Lien Creditors may enforce the provisions of the First-Lien Credit
Documents and exercise remedies thereunder, all in such order and in such
manner as they may determine in the exercise of their sole discretion.  Such exercise and enforcement shall include
the rights of an agent appointed by them to sell or otherwise dispose of
Collateral upon foreclosure, to incur expenses in connection with such sale or
disposition, and to exercise all the rights and remedies of a secured creditor
under the Uniform Commercial Code of any applicable jurisdiction and of a
secured creditor under Bankruptcy Laws of any applicable jurisdiction.

 

(b)           The Second-Lien
Collateral Agent, on behalf of itself and the Second-Lien Creditors, agrees
that, it will not take or receive any Collateral or any proceeds of Collateral
in connection with the exercise of any right or remedy (including setoff) with
respect to any Collateral, unless and until the Discharge of First-Lien
Obligations has occurred.  Without
limiting the generality of the foregoing, unless and until the Discharge of First-Lien
Obligations has occurred, the sole right of the Second-Lien Collateral Agent
and the Second-Lien Creditors with respect to the Collateral is to hold a Lien
on the Collateral pursuant to the Second-Lien Security Documents for the period
and to the extent granted therein and to receive a share of the proceeds
thereof, if any, after the Discharge of the First-Lien Obligations has occurred
in accordance with the terms of the Second-Lien Credit Documents and applicable
law.

 

 

(c)           The Second-Lien Collateral
Agent, for itself and on behalf of the Second-Lien Creditors, and each other
Second-Lien Creditor (by its acceptance of the benefits of the Second-Lien
Credit Documents), (i) agrees that the Second-Lien Collateral Agent and the
other Second-Lien Creditors will not take any action that would hinder, delay,
limit or prohibit any exercise of remedies under the First-Lien Credit
Documents, including any collection, sale, lease, exchange, transfer or other
disposition of the Collateral, whether by foreclosure or otherwise, or that
would limit, invalidate, avoid or set aside any Lien or Security Document or
subordinate the priority of the First-Lien Obligations to the Second-Lien
Obligations or grant the Liens securing the Second-Lien Obligations equal ranking
to the Liens securing the First-Lien Obligations and (ii) hereby waives any and
all rights it or the Second-Lien Creditors may have as a junior lien creditor
or otherwise (whether arising under the UCC or under any other law) to object
to the manner in which the First-Lien Collateral Agent or the First-Lien
Creditors seek to enforce or collect the First-Lien Obligations or the Liens
granted in any of the First-Lien Collateral, regardless of whether any action
or failure to act by or on behalf of the First-Lien Collateral Agent or
First-Lien Creditors is adverse to the interest of the Second-Lien Creditors.

 

(d)           The Second-Lien
Collateral Agent hereby acknowledges and agrees that no covenant, agreement or
restriction contained in the Second-Lien Security Documents or any other
Second-Lien Credit Document shall be deemed to restrict in any way the rights
and remedies of the First-Lien Collateral Agent or the First-Lien Creditors
with respect to the Collateral as set forth in this Agreement and the First-Lien
Credit Documents.

 

SECTION
4.  Payments.

 

4.1           Application of Proceeds.  So long as the Discharge of First-Lien
Obligations has not occurred, any proceeds of any Collateral pursuant to the
enforcement of any Security Document or the exercise of any remedial provision
thereunder, together with all other proceeds received by any Creditor
(including all funds received in respect of post-petition interest or fees and
expenses) as a result of any such enforcement or the exercise of any such
remedial provision or as a result of any distribution of or in respect of any
Collateral (whether or not expressly characterized as such) upon or in any
Insolvency or Liquidation Proceeding with respect to any Grantor, or the
application of any Collateral (or proceeds thereof) to the payment thereof or
any distribution of Collateral (or proceeds thereof) upon the liquidation or
dissolution of any Grantor, shall be applied by the First-Lien Collateral Agent
to the First-Lien Obligations in such order as specified in the relevant
First-Lien Security Document.  Upon the
Discharge of the First-Lien Obligations, the First-Lien Collateral Agent shall
deliver to the Second-Lien Collateral Agent any proceeds of Collateral held by
it in the same form as received, with any necessary endorsements or as a court
of competent jurisdiction may otherwise direct, to be applied by the
Second-Lien Collateral Agent to the Second-Lien Obligations in such order as
specified in the Second-Lien Security Documents.

 

4.2           Payments Over.  Until such time as the Discharge of
First-Lien Obligations has occurred, any Collateral or proceeds thereof
(together with assets or proceeds subject to Liens referred to in the final
sentence of Section 2.3) (or any distribution in respect of the Collateral,
whether or not expressly characterized as such) received by the Second-Lien
Collateral Agent or any Second-Lien Creditors in connection with the exercise
of any right or remedy (including set-off) relating to the Collateral or
otherwise that is inconsistent with this

 

 

Agreement shall be segregated
and held in trust and forthwith paid over to the First-Lien Collateral Agent
for the benefit of the First-Lien Creditors in the same form as received, with
any necessary endorsements or as a court of competent jurisdiction may
otherwise direct.  The First-Lien
Collateral Agent is hereby authorized to make any such endorsements as agent
for the Second-Lien Collateral Agent or any such Second-Lien Creditors.  This authorization is coupled with an
interest and is irrevocable until such time as this Agreement is terminated in
accordance with its terms.

 

SECTION
5.  Other Agreements.

 

5.1           Releases.

 

(a)           If, in connection
with:

 

(i)            the
exercise of the First-Lien Collateral Agent’s remedies in respect of the
Collateral provided for in Section 3.1, including any sale, lease, exchange,
transfer or other disposition of any such Collateral (any of the foregoing, a “Remedial
Action”);

 

(ii)           any
sale, lease, exchange, transfer or other disposition (any of the foregoing, a “Disposition”)
of any Collateral permitted under the terms of the First-Lien Credit Documents
(whether or not an “event of default” thereunder or under any Second-Lien
Credit Document has occurred and is continuing);

 

(iii)          any
agreement (not contravening the First-Lien Credit Documents) between the
First-Lien Collateral Agent and the Borrower or any other Grantor to release
the First-Lien Collateral Agent’s Lien on any portion of the Collateral or to
release any Grantor from its obligations under its guaranty of the First-Lien
Obligations; or

 

(iv)          the
release by the First-Lien Collateral Agent, for itself or at the direction of
the Required First-Lien Creditors, of any of its Liens on any part of the
Collateral, or of any Grantor from its obligations under its guaranty of the
First-Lien Obligations;

 

then, the
Liens, if any, of the Second-Lien Collateral Agent, for itself and for the
benefit of the Second-Lien Creditors, on such Collateral, and the obligations
of such Grantor under its guaranty of the Second-Lien Obligations, shall be
automatically, unconditionally and simultaneously released, and the Second-Lien
Collateral Agent, for itself or on behalf of any such Second-Lien Creditors,
promptly shall execute and deliver to the First-Lien Collateral Agent or such
Grantor such termination statements, releases and other documents as the
First-Lien Collateral Agent or such Grantor may request to effectively confirm
such release; provided  however that if an “event of default” then
exists under the Second-Lien Credit Agreement and the Discharge of First-Lien
Obligations occurs concurrently with any such Remedial Action, Disposition or
release, the Second-Lien Collateral Agent (on behalf of the Second-Lien
Creditors) shall be entitled to receive the residual cash or cash equivalents
(if any) remaining after giving effect to such Remedial Action, Disposition or
release and the Discharge of the First-Lien Obligations.

 

 

(b)           Until the Discharge
of First-Lien Obligations occurs, the Second-Lien Collateral Agent, for itself
and on behalf of the Second-Lien Creditors, hereby irrevocably constitutes and
appoints the First-Lien Collateral Agent and any officer or agent of the
First-Lien Collateral Agent, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of the Second-Lien Collateral Agent or such holder or in the
First-Lien Collateral Agent’s own name, from time to time in the First-Lien
Collateral Agent’s discretion, for the purpose of carrying out the terms of
this Section 5.1, to take any and all appropriate action and to execute any and
all documents and instruments which may be necessary or desirable to accomplish
the purposes of this Section 5.1, including any endorsements or other
instruments of transfer or release.

 

(c)           If, prior to the
Discharge of First Lien Obligations, a subordination of the First-Lien
Collateral Agent’s Lien on any Collateral is permitted (or in good faith
believed by the First-Lien Collateral Agent to be permitted) under Section
12.11 of the First-Lien Credit Agreement to another Lien permitted under
Section 9.03 of the First-Lien Credit Agreement (a “Priority Lien”),
then the First-Lien Collateral Agent is authorized to execute and deliver a
subordination agreement with respect thereto in form and substance satisfactory
to it, and the Second-Lien Collateral Agent, for itself and on behalf of the
Second-Lien Creditors, shall promptly execute and deliver to the First-Lien
Collateral Agent or the relevant Grantor an identical subordination agreement
subordinating the Liens of the Second-Lien Collateral Agent for the benefit of
the Second-Lien Creditors to such Priority Lien.

 

5.2           Insurance.  Unless and until the Discharge of First-Lien
Obligations has occurred, the First-Lien Collateral Agent (acting at the
direction of the Required First-Lien Creditors) shall have the sole and
exclusive right, subject to the rights of the Grantors under the First-Lien
Credit Documents, to adjust settlement for any insurance policy covering the
Collateral in the event of any loss thereunder and to approve any award granted
in any condemnation or similar proceeding (or any deed in lieu of condemnation)
affecting the Collateral.  Unless and
until the Discharge of First-Lien Obligations has occurred, and subject to the
rights of the Grantors under the First-Lien Security Documents, all proceeds of
any such policy and any such award (or any payments with respect to a deed in
lieu of condemnation) in respect to the Collateral shall be paid to the First-Lien
Collateral Agent for the benefit of the First-Lien Creditors pursuant to the
terms of the First-Lien Credit Documents (including, without limitation, for
purposes of cash collateralization of commitments, letters of credit and Second
Hedging Agreements) and, after the Discharge of First-Lien Obligations has
occurred, to the Second-Lien Collateral Agent for the benefit of the
Second-Lien Creditors to the extent required under the Second-Lien Security
Documents and then, to the extent no Second-Lien Obligations are outstanding,
to the owner of the subject property, such other Person as may be entitled
thereto or as a court of competent jurisdiction may otherwise direct.  If the Second-Lien Collateral Agent or any
Second-Lien Creditors shall, at any time, receive any proceeds of any such
insurance policy or any such award or payment in contravention of this
Agreement, it shall pay such proceeds over to the First-Lien Collateral Agent
in accordance with the terms of Section 4.2 of this Agreement.

 

5.3           Amendments to Second-Lien Security
Documents.

 

 

(a)           Without the prior
written consent of the First-Lien Collateral Agent (acting at the direction of
the Required First-Lien Creditors), no Second-Lien Security Document may be
amended, supplemented or otherwise modified or entered into to the extent such
amendment, supplement or modification, or the terms of any new Second-Lien
Security Document, would contravene the provisions of this Agreement or any
First-Lien Credit Document.  Each of
Holdings and the Borrower agrees that each Second-Lien Security Document shall
include the following language (or language to similar effect approved by the
First-Lien Collateral Agent):

 

“Notwithstanding anything herein to the contrary, the lien and security
interest granted to the Second-Lien Collateral Agent pursuant to this Agreement
and the exercise of any right or remedy by the Second-Lien Collateral Agent
hereunder are subject to the provisions of the Intercreditor Agreement, dated
as of March 17, 2004 (as amended, restated, supplemented or otherwise modified
from time to time in accordance with the terms thereof, the “Intercreditor
Agreement”), among EnerSys, EnerSys Capital Inc., Bank of America, N.A., as
First-Lien Collateral Agent, Bank of America, N.A., as Second-Lien Collateral
Agent and certain other persons party or that may become party thereto from
time to time.  In the event of any
conflict between the terms of the Intercreditor Agreement and this Agreement,
the terms of the Intercreditor Agreement shall govern and control.”

 

In addition, each of
Holdings and the Borrower agrees that each Second-Lien Mortgage covering any
Collateral shall contain such other language as the First-Lien Collateral Agent
may reasonably request to reflect the subordination of such Second-Lien
Mortgage to the First-Lien Security Document covering such Collateral.

 

(b)           In the event the
First-Lien Collateral Agent or the First-Lien Creditors and the relevant
Grantor(s) enter into any amendment, waiver or consent in respect of any of the
First-Lien Security Documents for the purpose of adding to, or deleting from,
or waiving or consenting to any departures from any provisions of, any
First-Lien Security Document or changing in any manner the rights of the
First-Lien Collateral Agent, the First-Lien Creditors, the Borrower or any
other Grantor thereunder, then such amendment, waiver or consent shall apply
automatically to any comparable provision of the Second-Lien Credit Agreement
and the Comparable Second-Lien Security Document without the consent of the
Second-Lien Collateral Agent or the Second-Lien Creditors and without any
action by the Second-Lien Collateral Agent, the Borrower or any other Grantor, provided,
that (A) no such amendment, waiver or consent shall have the effect of (i) removing
assets subject to the Lien of the Second-Lien Security Documents, except to the
extent that a release of such Lien is permitted by Section 5.1 of this
Agreement, (ii) imposing additional duties on the Second-Lien Collateral Agent
without its consent, or (iii) permitting other liens on the Collateral not
permitted under the terms of the Second-Lien Credit Documents or Section 6
hereof and (B) notice of such amendment, waiver or consent shall have been
given to the Second-Lien Collateral Agent (although the failure to give any
such notice shall in no way affect the effectiveness of any such amendment,
waiver or consent).

 

5.4           Rights As Unsecured Creditors.  Except as otherwise set forth in this
Agreement, the Second-Lien Collateral Agent and the Second-Lien Creditors may
exercise rights

 

 

and remedies as unsecured
creditors against Holdings, the Borrower or any Subsidiary Guarantor that has
guaranteed the Second-Lien Obligations in accordance with the terms of the
Second-Lien Credit Documents and applicable law.   Except as otherwise set forth in this Agreement, nothing in this
Agreement shall prohibit the receipt by the Second-Lien Collateral Agent or any
Second-Lien Creditors of the required payments of interest and principal on the
Second-Lien Obligations so long as such receipt is not the direct or indirect
result of the exercise by the Second-Lien Collateral Agent or any Second-Lien
Creditor of rights or remedies as a secured creditor (including set-off) or
enforcement in contravention of this Agreement of any Lien held by any of
them.  In the event the Second-Lien
Collateral Agent or any Second-Lien Creditor becomes a judgment lien creditor
in respect of Collateral as a result of its enforcement of its rights as an
unsecured creditor, such judgment lien shall be subordinated to the Liens
securing First-Lien Obligations on the same basis as the other Liens securing
the Second-Lien Obligations are so subordinated to such First-Lien Obligations
under this Agreement.  Nothing in this
Agreement impairs or otherwise adversely affects any rights or remedies the
First-Lien Collateral Agent or the First-Lien Creditors may have with respect
to the First-Lien Collateral.

 

5.5           Bailee for Perfection.

 

(a)           The First-Lien
Collateral Agent agrees to hold the Pledged Collateral that is part of the
Collateral in its possession or control (or in the possession or control of its
agents or bailees) as bailee for each First-Lien Creditor and the Second-Lien
Collateral Agent and any assignee solely for the purpose of perfecting the
security interest granted under the First-Lien Credit Documents and the
Second-Lien Credit Documents, subject to the terms and conditions of this
Section 5.5.

 

(b)           Until the Discharge
of First-Lien Obligations has occurred, the First-Lien Collateral Agent shall
be entitled to deal with the Pledged Collateral in accordance with the terms of
the First-Lien Credit Documents as if the Liens of the Second-Lien Collateral
Agent under the Second-Lien Security Documents did not exist.  The rights of the Second-Lien Collateral
Agent shall at all times be subject to the terms of this Agreement and to the
First-Lien Collateral Agent’s rights under the First-Lien Credit Documents.

 

(c)           The First-Lien
Collateral Agent shall have no obligation whatsoever to the First-Lien
Creditors and the Second-Lien Collateral Agent or any Second-Lien Creditor to
assure that the Pledged Collateral is genuine or owned by any of the Grantors
or to preserve rights or benefits of any Person except as expressly set forth
in this Section 5.5.  The duties or
responsibilities of the First-Lien Collateral Agent under this Section 5.5
shall be limited solely to holding the Pledged Collateral as bailee in
accordance with this Section 5.5.

 

(d)           The First-Lien
Collateral Agent acting pursuant to this Section 5.5 shall not have by reason
of the First-Lien Security Documents, the Second-Lien Security Documents, this
Agreement or any other document a fiduciary relationship in respect of the
First-Lien Creditors, the Second-Lien Collateral Agent or any Second-Lien
Creditor.

 

(e)           Upon the Discharge
of the First-Lien Obligations, the First-Lien Collateral Agent shall deliver
the remaining Pledged Collateral (if any) (or proceeds thereof) together with
any necessary endorsements, first, to the Second-Lien Collateral Agent,
to the

 

 

extent Second-Lien Obligations
remain outstanding, and second, to the Borrower or the relevant Grantor
to the extent no First-Lien Obligations or Second-Lien Obligations remain
outstanding (in each case, so as to allow such Person to obtain control of such
Pledged Collateral).  The First-Lien
Collateral Agent further agrees to take all other action reasonably requested
by such Person in connection with such Person’s obtaining a first-priority
interest in the Collateral or as a court of competent jurisdiction may
otherwise direct.

 

5.6           When Discharge of First-Lien
Obligations Deemed to Not Have Occurred. 
If at any time after the Discharge of First-Lien Obligations has
occurred, the Borrower immediately thereafter enters into any Refinancing of
any First-Lien Credit Document evidencing a First-Lien Obligation which
Refinancing is permitted hereby, then such Discharge of First-Lien Obligations
shall automatically be deemed not to have occurred for all purposes of this
Agreement, and the obligations under such Refinancing First-Lien Credit
Document shall automatically be treated as First-Lien Obligations for all
purposes of this Agreement, including for purposes of the Lien priorities and
rights in respect of Collateral set forth herein, and the first-lien collateral
agent under such First-Lien Credit Documents shall be the First-Lien Collateral
Agent for all purposes of this Agreement. 
Upon receipt of a notice stating that the Borrower has entered into a
new First-Lien Credit Document (which notice shall include the identity of the
new agent, such agent, the “New Agent”), the Second-Lien Collateral
Agent shall promptly enter into such documents and agreements (including
amendments or supplements to this Agreement) as the Borrower or such New Agent
may reasonably request in order to provide to the New Agent the rights
contemplated hereby, in each case consistent in all material respects with the
terms of this Agreement.

 

5.7           Option to Purchase First-Lien
Debt.  (a)  Without prejudice to the enforcement of remedies by the
First-Lien Creditors, any Person or Persons at any time or from time to time
designated by the holders of more than 50% in outstanding principal amount of
the Second-Lien Obligations as entitled to exercise all default purchase
options as to the Second-Lien Obligations then outstanding (an “Eligible
Purchaser”) shall have the right to purchase, at any time during the
exercise period described in clause (c) below, all, but not less than all, of
the First-Lien Obligations, including all principal of and interest and fees on
and all prepayment or acceleration penalties and premiums in respect of all
First-Lien Obligations, outstanding at the time of purchase:

 

(1)           for a purchase price equal to the greater of (x) the market
price for the First-Lien Obligations or (y) the sum of (A) in the case of
First-Lien Obligations then outstanding (other than Letters of Credit), 100% of
the principal amount and accrued interest outstanding on the First-Lien
Obligations on the date of purchase, and (B) in the case of each Letter of
Credit then outstanding, 100% of the reimbursement obligation in respect of
such Letter of Credit as and when such Letter of Credit is drawn upon, plus
accrued interest thereon, and all other First-Lien Obligations relating to such
Letter of Credit that are outstanding as and when such Letter of Credit is
drawn upon (the amounts payable under clause (y)(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 First-Lien
Obligation or the validity, enforceability, perfection, priority or sufficiency
of any Lien securing or guarantee or other supporting obligation for any
First-Lien Obligation 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 First-Lien Credit Agreement), and has the right to convey, whatever claims
and interests it may have in respect of the First-Lien Obligations); provided
that the purchase price in respect of any outstanding Letter of Credit that
remains undrawn on the date of purchase shall be payable as and when such
Letter of Credit is drawn upon (i) first, from the cash collateral
account described in clause (a)(3) below, until the amounts contained therein
have been exhausted, and (ii) thereafter, directly by the purchaser;

 

(3)           with such purchase accompanied by a deposit of cash
collateral under the dominion and control of the First-Lien Collateral Agent or
its designee in an amount equal to 110% of the aggregate undrawn amount, as
security for the purchaser’s purchase of the Acquired L/C Obligations, subject
to the agreement that if any 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 First-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 fully drawn, as the case may be, plus
accrued interest thereon and all First-Lien Obligations relating to such Letter
of Credit that are outstanding as and when such Letter of Credit is cancelled,
expires or is fully drawn, as the case may be;

 

(4)           with such purchase price accompanied by (i) a release in
favor of the First-Lien Collateral Agent and the First-Lien Creditors from all
the Grantors, in form and substance reasonably satisfactory to the First-Lien
Collateral Agent and the Eligible Purchaser, of all obligations and liabilities
of the First-Lien Collateral Agent, the First-Lien Creditors and their
respective Affiliates, officers, directors, employees and agents and (ii) a
waiver by the Second-Lien Collateral Agent and the other Second-Lien Creditors
of all claims arising out of this Agreement and the transactions contemplated
hereby as a result of exercising the purchase option contemplated by this
Section 6.5; and

 

(5)           with such purchase pursuant to purchase documentation in
form and substance satisfactory to the First-Lien Collateral Agent.

 

(b)           The right to
exercise the purchase option described in Section 6.5(a) shall be exercisable
and legally enforceable upon at least ten Business Days’ prior written notice
of exercise given to the First-Lien Collateral Agent by an Eligible Purchaser.  Neither the First-Lien Collateral Agent or
any other First-Lien Creditor shall have any disclosure obligation to any
Eligible Purchaser, the Second-Lien Collateral Agent or any other Second-Lien
Creditor in connection with any exercise of such purchase option.

 

(c)           The right to
purchase the First-Lien Obligations as described in this Section 6.5 may be
exercised during the period that begins on the date of the acceleration of

 

 

the Loans under the First-Lien
Credit Agreement and ends on the 20th Business Day after receipt by the
Second-Lien Collateral Agent of written notice of such acceleration from the
Borrower, any Grantor or the First-Lien Collateral Agent.

 

(d)           The obligations of
the First-Lien Creditors to sell their respective First-Lien Obligations under
this Section 6.5 are several and not joint and several.  To the extent any First-Lien Creditor (a “Defaulting
Creditor”) breaches its obligation to sell its First-Lien Obligations under
this Section 6.5, nothing in this Section 6.5 shall be deemed to require the
First-Lien Collateral Agent or any other First-Lien Creditor to purchase such
Defaulting Creditor’s First-Lien Obligations for resale to the holders of
Second-Lien Obligations and in all cases, the First-Lien Collateral Agent and
each First-Lien Creditor complying with the terms of this Section 6.5 shall not
be deemed to be in default of this Agreement or otherwise be deemed liable for
any action or inaction of any Defaulting Creditor; provided that nothing
in this clause (d) shall require any Eligible Purchaser to purchase less than
all of the First-Lien Obligations.

 

SECTION
6.  Insolvency or Liquidation
Proceedings.

 

6.1           Finance and Sale Issues.  (a) 
If the Borrower or any other Grantor shall be subject to any Insolvency
or Liquidation Proceeding and the First-Lien Collateral Agent (acting at the
direction of the Required First-Lien Creditors) shall desire to permit the use
of cash collateral on which the First-Lien Collateral Agent or any other
creditor has a Lien or to permit the Borrower or any other Grantor to obtain
financing (including on a priming basis), whether from the First-Lien Creditors
or any other third party under Section 362, 363 or 364 of Title 11 of the
United States Code or any similar Bankruptcy Law (each, a “Post-Petition Financing”),
then the Second-Lien Collateral Agent, on behalf of itself and the Second-Lien
Creditors, and each other Second-Lien Creditor (by its acceptance of the
benefits of the Second-Lien Credit Documents), agrees that it will not oppose
or raise any objection to such use of cash collateral or Post-Petition
Financing and will not request adequate protection or any other relief in
connection therewith (except, as expressly agreed in writing by the First-Lien
Collateral Agent or to the extent permitted by Section 6.3) and, to the extent
the Liens securing the First-Lien Obligations are subordinated or pari passu
with such Post-Petition Financing, will subordinate its Liens in the Collateral
to the Liens securing such Post-Petition Financing (and all Obligations
relating thereto).

 

(b)  The Second-Lien Collateral Agent, on behalf
of itself and the other Second-Lien Creditors, and each other Second-Lien
Creditor (by its acceptance of the benefits of the Second-Lien Credit
Documents), agrees that it will raise no objection to or oppose a sale or other
disposition of any Collateral free and clear of its Liens or other claims under
Section 363 of the Bankruptcy Code if the First-Lien Creditors have consented
to such sale or disposition of such assets.

 

6.2           Relief from the Automatic Stay.  Until the Discharge of First-Lien
Obligations has occurred, the Second-Lien Collateral Agent, on behalf of itself
and the Second-Lien Creditors, and each other Second-Lien Creditor (by its
acceptance of the benefits of the Second-Lien Credit Documents), agrees that
none of them shall seek relief from or modification of the automatic stay or
any other stay in any Insolvency or Liquidation Proceeding in respect of the
Collateral, without the prior written consent of the First-Lien Collateral
Agent.

 

 

6.3           Adequate Protection.  The Second-Lien Collateral Agent, on behalf
of itself and the Second-Lien Creditors, and each other Second-Lien Creditor
(by its acceptance of the benefits of the Second-Lien Credit Documents), agrees
that none of them shall (i) oppose, object to or contest (or support any other
person opposing, objecting to or contesting) (a) any request by the First-Lien
Collateral Agent or the First-Lien Creditors for adequate protection in any
Insolvency or Liquidation Proceeding (or any granting of such request) or (b)
any objection by the First-Lien Collateral Agent or the First-Lien Creditors to
any motion, relief, action or proceeding based on the First-Lien Collateral
Agent or the First-Lien Creditors claiming a lack of adequate protection or
(ii) seek or accept any form of adequate protection under either or both
Sections 362 and 363 of the Bankruptcy Code with respect to the Second-Lien
Obligations, except to the extent that the receipt by the Second-Lien Creditors
of any such adequate protection would not reduce (or would not have the effect
of reducing) or adversely affect the adequate protection that the First-Lien
Creditors otherwise would be entitled to receive (it being understood that, in
any event, (A) any such adequate protection shall only be afforded to the
Second-Lien Creditors if the First-Lien Creditors are satisfied with the
adequate protection afforded to the First-Lien Creditors, and (B) any such
adequate protection is in the form a replacement Lien on the Grantors’ assets,
which Lien will be subordinated to the Liens securing the First-Lien
Obligations and any Post-Petition Financing (and all Obligations relating
thereto) on the same basis as the other Liens securing the Second-Lien
Obligations are so subordinated to the First-Lien Obligations under this
Agreement,

 

6.4           No Waiver; Voting Rights.  Nothing contained herein shall prohibit or
in any way limit the First-Lien Collateral Agent or any First-Lien Creditor
from objecting in any Insolvency or Liquidation Proceeding or otherwise to any
action taken by the Second-Lien Collateral Agent or any of the Second-Lien
Creditors, including the seeking by the Second-Lien Collateral Agent or any
Second-Lien Creditors of adequate protection or the asserting by the
Second-Lien Collateral Agent or any Second-Lien Creditors of any of its rights
and remedies under the Second-Lien Credit Documents or otherwise.  In any Insolvency or Liquidation Proceeding,
neither the Second-Lien Collateral Agent nor any other Second-Lien Creditor
shall (i) oppose, object to, or vote against any plan of reorganization or
disclosure statement to the extent the terms of such plan or disclosure
statement are consistent with the rights of the First-Lien Creditors under this
Agreement or (ii) vote any claim in respect of Second-Lien Obligations for any
plan of reorganization of any Grantor unless (x) such plan provides for the
payment in full in cash of all First-Lien Obligations on the effective date of
such plan of reorganization or (y) such plan provides for treatment of the
First-Lien Obligations in a manner that would result in such First-Lien
Obligations having relative lien (or, if the obligations, property or assets to
be distributed in respect of the First-Lien Obligations under such plan are
unsecured, other) priority over the Second-Lien Obligations to at least the
same extent as if such obligations, property or assets were secured by Liens
and subject to Section 6.6, whether or not such obligations, property or assets
are, in fact, secured by any such Liens, and further requires (or does not
purport to otherwise alter the provisions of this Agreement requiring) that all
distributions on account of the Second-Lien Obligations under such plan be
delivered to the First-Lien Collateral Agent and distributed in accordance with
the priorities provided in Section 4.1(a), it being understood that, in the
event that any plan is proposed by any debtor, creditor, or other party in
interest in any such Insolvency or Liquidation Proceeding that purports to
alter the provisions of this Agreement (including the provisions of Section
4.1(a) and the priority of application of the proceeds of Collateral set forth
therein), the First-Lien Collateral Agent shall been deemed to

 

 

have been granted, as of the
date hereof, an irrevocable power of attorney to vote the claim of the
Second-Lien Creditors against any such plan, with such appointment being
coupled with an interest, and the First-Lien Collateral Agent shall be deemed
the “holder” of such claims within the meaning of Section 1126(a) of the
Bankruptcy Code.  Except as provided in
this Section 6, the Second-Lien Creditors shall remain entitled to vote their
claims in any such Insolvency or Liquidation Proceeding.

 

6.5           Preference Issues.  If any First-Lien Creditor is required in
any Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise
pay to the estate of the Borrower or any other Grantor any amount (a “Recovery”),
then the First-Lien Obligations shall be reinstated to the extent of such
Recovery and the First-Lien Creditors shall be entitled to a reinstatement of
First-Lien Obligations with respect to all such recovered amounts.  If this Agreement shall have been terminated
prior to such Recovery, this Agreement shall be reinstated in full force and
effect, and such prior termination shall not diminish, release, discharge,
impair or otherwise affect the obligations of the parties hereto from such date
of reinstatement.

 

6.6           Reorganization Securities.  If, in any Insolvency or Liquidation
Proceeding, debt obligations or debt or equity securities of the reorganized
debtor secured by Liens upon any property of the reorganized debtor are
distributed, pursuant to a plan of reorganization or similar dispositive
restructuring plan, both on account of First-Lien Obligations and on account of
Second-Lien Obligations, then the Second-Lien Creditors may retain such debt or
equity obligations or securities, but only to the extent that such Liens are
subordinated to the Liens securing the First-Lien Obligations to the same
extent and in all instances pursuant to the provisions of this Agreement.

 

6.7           Post-Petition Interest.

 

(a)           Neither the
Second-Lien Collateral Agent nor any Second-Lien Creditor shall oppose or seek
to challenge any claim by the First-Lien Collateral Agent or any First-Lien
Creditor for allowance in any Insolvency or Liquidation Proceeding of
First-Lien Obligations consisting of post-petition interest, fees or
expenses.  Regardless of whether any
such claim is allowed, and without limiting the generality of the other
provisions of this Agreement, this Agreement expressly is intended to include
and does include the “rule of explicitness” in that this Agreement expressly
entitles the First-Lien Creditors to receive payment from the Collateral of any
post-petition interest, fees or expenses through distributions made pursuant to
the provisions of this Agreement even though such interest, fees, expenses are
not allowed or allowable against the bankruptcy estate of the Borrower or any
other Grantor under Section 502(b)(2) or Section 506(b) of the Bankruptcy Code
or under any other provision of the Bankruptcy Code or any other Bankruptcy
Law.

 

(b)           Neither the
First-Lien Collateral Agent nor any other First-Lien Creditor shall oppose or
seek to challenge any claim by the Second-Lien Collateral Agent or any
Second-Lien Creditor for allowance in any Insolvency or Liquidation Proceeding
of Second-Lien Obligations consisting of post-petition interest, fees or
expenses to the extent of the value of the Lien of the Second-Lien Collateral
Agent on behalf of the Second-Lien Creditors on the Collateral (after taking
into account the First-Lien Collateral).

 

 

6.8           Waiver.  The Second-Lien Agent, for itself and on
behalf of the other Second-Lien Creditors, waives any claim it may hereafter
have against any First-Lien Creditor arising out of the election by any
First-Lien Creditor of the application of Section 1111(b)(2) of the Bankruptcy
Code, and/or out of any cash collateral or financing arrangement or out of any
grant of a security interest in connection with the Collateral in any
Insolvency or Liquidation Proceeding.

 

6.9           Limitations.  So long as the Discharge of First-Lien
Obligations has not occurred, without the express written consent of the
First-Lien Agent, none of the Second-Lien Creditors shall, in any Insolvency or
Liquidation Proceeding involving any Grantor, (i) make an election pursuant to
Section 1111(b) of the Bankruptcy Code, (ii) oppose or object to the
determination of the extent of any Liens held by any of the First-Lien
Creditors or the value of any claims of First-Lien Creditors under Section
506(a) of the Bankruptcy Code or (iii) oppose or object to the payment of
interest and expenses under Sections 506(b) and (c) of the Bankruptcy Code.

 

SECTION
7.  Reliance; Waivers; Etc.

 

7.1           Reliance.  Other than any reliance on the terms of this
Agreement, the First-Lien Collateral Agent, on behalf of itself and the
First-Lien Creditors under its First-Lien Credit Documents, acknowledges that
it and such First-Lien Creditors have, independently and without reliance on
the Second-Lien Collateral Agent or any Second-Lien Creditors, and based on
documents and information deemed by them appropriate, made their own credit
analysis and decision to enter into such First-Lien Credit Documents and be
bound by the terms of this Agreement and they will continue to make their own
credit decision in taking or not taking any action under the First-Lien Credit
Agreement or this Agreement.  The
Second-Lien Collateral Agent, on behalf of itself and the Second-Lien
Creditors, acknowledges that it and the Second-Lien Creditors have,
independently and without reliance on the First-Lien Collateral Agent or any
First-Lien Creditor, and based on documents and information deemed by them
appropriate, made their own credit analysis and decision to enter into each of
the Second-Lien Credit Documents and be bound by the terms of this Agreement
and they will continue to make their own credit decision in taking or not taking
any action under the Second-Lien Credit Documents or this Agreement.

 

7.2           No Warranties or Liability.  The First-Lien Collateral Agent, on behalf
of itself and the First-Lien Creditors under its First-Lien Credit Documents,
acknowledges and agrees that each of the Second-Lien Collateral Agent and the
Second-Lien Creditors have made no express or implied representation or
warranty, including with respect to the execution, validity, legality,
completeness, collectibility or enforceability of any of the Second-Lien Credit
Documents, the ownership of any Collateral or the perfection or priority of any
Liens thereon.  The Second-Lien
Creditors will be entitled to manage and supervise their respective loans and
extensions of credit under the Second-Lien Credit Documents in accordance, with
law and as they may otherwise, in their sole discretion, deem appropriate.  The Second-Lien Collateral Agent, on behalf
of itself and the Second-Lien Creditors, acknowledges and agrees that each of
the First-Lien Collateral Agent and the First-Lien Creditors have made no
express or implied representation or warranty, including with respect to the
execution, validity, legality, completeness, collectibility or enforceability
of any of the First-Lien Documents, the ownership

 

 

of any Collateral or the
perfection or priority of any Liens thereon. 
The First-Lien Creditors will be entitled to manage and supervise their
respective loans and extensions of credit under their respective First-Lien
Documents in accordance, with law and as they may otherwise, in their sole
discretion, deem appropriate.  The
Second-Lien Collateral Agent and the Second-Lien Creditors shall have no duty
to the First-Lien Collateral Agent or any of the First-Lien Creditors, and the
First-Lien Collateral Agent and the First-Lien Creditors shall have no duty to
the Second-Lien Collateral Agent or any of the Second-Lien Creditors, to act or
refrain from acting in a manner which allows, or results in, the occurrence or
continuance of an event of default or default under any agreements with
Holdings, the Borrower or any Subsidiary Guarantor (including the First-Lien
Credit Documents and the Second-Lien Credit Documents), regardless of any
knowledge thereof which they may have or be charged with.

 

7.3           No Waiver of Lien Priorities.

 

(a)           No right of the
First-Lien Creditors, the First-Lien Collateral Agent or any of them to enforce
any provision of this Agreement or any First-Lien Credit Document shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of Holdings, the Borrower or any other Grantor or by any act or failure to
act by any First-Lien Creditor or the First-Lien Collateral Agent, or by any
noncompliance by any Person with the terms, provisions and covenants of this Agreement,
any of the First-Lien Credit Documents or any of the Second-Lien Credit
Documents, regardless of any knowledge thereof which the First-Lien Collateral
Agent or the First-Lien Creditors, or any of them, may have or be otherwise
charged with.

 

(b)           Without in any way
limiting the generality of the foregoing paragraph (but subject to the rights
of the Borrower and the other Grantors under the First-Lien Credit Documents),
the First-Lien Creditors, the First-Lien Collateral Agent and any of them may,
at any time and from time to time in accordance with the First-Lien Credit
Documents and/or applicable law, without the consent of, or notice to, the
Second-Lien Collateral Agent or any other Second-Lien Creditor, without
incurring any liabilities to the Second-Lien Collateral Agent or any other
Second-Lien Creditor and without impairing or releasing the Lien priorities and
other benefits provided in this Agreement (even if any right of subrogation or
other right or remedy of the Second-Lien Collateral Agent or any Second-Lien
Creditors is affected, impaired or extinguished thereby) do any one or more of
the following:

 

(i)            make
loans and advances to any Grantor or issue, guaranty or obtain letters of
credit for account of any Grantor or otherwise extend credit to any Grantor, in
any amount 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;

 

(ii)           change
the manner, place or terms of payment or change or extend the time of payment
of, or amend, renew, exchange, increase or alter, the terms of any of the
First-Lien Obligations or any Lien on any First-Lien Collateral or guaranty
thereof or any liability of the Borrower or any other Grantor, or any liability
incurred directly or indirectly in respect thereof (including any increase in
or extension of the First-Lien Obligations, without any restriction as to the

 

 

amount, tenor or terms of any such increase or extension) or otherwise
amend, renew, exchange, extend, modify or supplement in any manner any Liens
held by the First-Lien Collateral Agent or any of the First-Lien Creditors, the
First-Lien Obligations or any of the First-Lien Credit Documents;

 

(iii)          sell,
exchange, release, surrender, realize upon, enforce or otherwise deal with in
any manner and in any order any part of the First-Lien Collateral or any
liability of the Borrower or any other Grantor to the First-Lien Creditors or
the First-Lien Collateral Agent, or any liability incurred directly or
indirectly in respect thereof;

 

(iv)          settle
or compromise any First-Lien Obligation or any other liability of the Borrower
or any other Grantor or any security therefor or any liability incurred
directly or indirectly in respect thereof and apply any sums by whomsoever paid
and however realized to any liability (including the First-Lien Obligations) in
any manner or order;

 

(v)           exercise
or delay in or refrain from exercising any right or remedy against the Borrower
or any security or any other Grantor or any other Person, elect any remedy and
otherwise deal freely with the Borrower, any other Grantor or any First-Lien
Collateral and any security and any guarantor or any liability of the Borrower
or any other Grantor to the First-Lien Creditors or any liability incurred
directly or indirectly in respect thereof; and

 

(vi)          release
or discharge any First-Lien Obligation or any guaranty thereof or any agreement
or obligation of any Grantor or any other person or entity with respect
thereto.

 

(c)           The Second-Lien
Collateral Agent, on behalf of itself and the Second-Lien Creditors, and each
other Second-Lien Creditor (by its acceptance of the benefits of the
Second-Lien Credit Documents), agrees not to assert and hereby waives, to the
fullest extent permitted by law, any right to demand, request, plead or
otherwise assert or otherwise claim the benefit of, any marshalling, appraisal,
valuation or other similar right that may otherwise be available under
applicable law with respect to the Collateral or any other similar rights a
junior secured creditor may have under applicable law.

 

7.4           Waiver of Liability; Indemnity.

 

(a)           The Second-Lien
Collateral Agent, on behalf of itself and the Second-Lien Creditors, also
agrees that the First-Lien Creditors and the First-Lien Collateral Agent shall
have no liability to the Second-Lien Collateral Agent or any Second-Lien
Creditors, and the Second-Lien Collateral Agent, on behalf of itself and the
Second-Lien Creditors, hereby waives any claim against any First-Lien Creditor
or the First-Lien Collateral Agent, arising out of any and all actions which
the First-Lien Creditors or the First-Lien Collateral Agent may take or permit
or omit to take with respect to:  (i)
the First-Lien Credit Documents, (ii) the collection of the First-Lien
Obligations or (iii) the foreclosure upon, or sale, liquidation or other
disposition of, any First-Lien Collateral. 
The Second-Lien Collateral Agent, on behalf of itself and the

 

 

Second-Lien Creditors, agrees
that the First-Lien Creditors and the First-Lien Collateral Agent have no duty,
express or implied, fiduciary or otherwise, to them in respect of the
maintenance or preservation of the First-Lien Collateral, the First-Lien
Obligations or otherwise.  Neither the
First-Lien Collateral Agent nor any other First-Lien Creditor 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 so, or will be under any obligation to sell or otherwise dispose of any
Collateral upon the request of the or any other Grantor or upon the request of
the Second-Lien Collateral Agent, any other holder of Second-Lien Obligations
or any other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof.  Without
limiting the foregoing, each Second-Lien Creditor by accepting the benefits of
the Second-Lien Security Documents agrees that neither the First-Lien Collateral
Agent nor any other First-Lien Creditor (in directing the Collateral Agent to
take any action with respect to the Collateral) shall have any duty or
obligation to realize first upon any type of Collateral or to sell, dispose of
or otherwise liquidate all or any portion of the Collateral in any manner,
including as a result of the application of the principles of marshaling or
otherwise, that would maximize the return to any class of Creditors holding
Obligations of any type (whether First-Lien Obligations or Second-Lien
Obligations), notwithstanding that the order and timing of any such
realization, sale, disposition or liquidation may affect the amount of proceeds
actually received by such class of Creditors from such realization, sale,
disposition or liquidation.

 

(b)  With respect to its share of the
Obligations, Bank of America shall have and may exercise the same rights and
powers hereunder as, and shall be subject to the same obligations and
liabilities as and to the extent set forth herein for, any other Creditor, all
as if Bank of America were not the First-Lien Collateral Agent or the
Second-Lien Collateral Agent.  The term
“Creditors” or any similar term shall, unless the context clearly otherwise
indicates, include Bank of America in its individual capacity as a
Creditor.  Bank of America and its
affiliates may lend money to, and generally engage in any kind of business
with, the Grantors or any of their Affiliates as if Bank of America were not
acting as the First-Lien Collateral Agent or Second-Lien Collateral Agent and
without any duty to account therefor to any other Creditor.

 

7.5           Obligations Unconditional.  All rights, interests, agreements and
obligations of the First-Lien Collateral Agent and the First-Lien Creditors and
the Second-Lien Collateral Agent and the Second-Lien Creditors, respectively,
hereunder (including the Lien priorities established hereby) shall remain in
full force and effect irrespective of:

 

(a)           any
lack of validity or enforceability of any First-Lien Credit Document or any
Second-Lien Credit Document;

 

(b)           any
change in the time, manner or place of payment of, or in any other terms of,
all or any of the First-Lien Obligations or Second-Lien Obligations, or any
amendment or waiver or other modification, including any increase in the amount
thereof, whether by course of conduct or otherwise, of the terms of any
First-Lien Credit Document or any Second-Lien Credit Document;

 

(c)           any
exchange of any security interest in any Collateral or any other collateral, or
any amendment, waiver or other modification, whether in

 

 

writing or by course of conduct or otherwise, of all or any of the
First-Lien Obligations or Second-Lien Obligations or any guarantee thereof;

 

(d)           the
commencement of any Insolvency or Liquidation Proceeding in respect of the
Borrower or any other Grantor; or

 

(e)           any
other circumstances which otherwise might constitute a defense available to, or
a discharge of, the Borrower or any other Grantor in respect of the First-Lien
Obligations, or of the Second-Lien Collateral Agent or any Second-Lien Creditor
in respect of this Agreement.

 

SECTION
8.  Miscellaneous.

 

8.1           Conflicts.  In the event of any conflict between the
provisions of this Agreement and the provisions of the First-Lien Credit
Documents or the Second-Lien Credit Documents, the provisions of this Agreement
shall govern and control.

 

8.2           Effectiveness; Continuing Nature
of this Agreement; Severability.  This Agreement shall become effective when executed and delivered
by the parties hereto.  This is a
continuing agreement of lien subordination and the First-Lien Creditors may
continue, at any time and without notice to the Second-Lien Collateral Agent or
any Second-Lien Creditor, to extend credit and other financial accommodations
and lend monies to or for the benefit of the Borrower or any Grantor
constituting First-Lien Obligations in reliance hereof.  The Second-Lien Collateral Agent, on behalf
of itself and the Second-Lien Creditors, hereby waives any right it may have
under applicable law to revoke this Agreement or any of the provisions of this
Agreement.  The terms of this Agreement
shall survive, and shall continue in full force and effect, in any Insolvency
or Liquidation Proceeding.  Without
limiting the generality of the foregoing, this Agreement is intended to
constitute and shall be deemed to constitute a “subordination agreement” within
the meaning of Section 510(a) of the Bankruptcy Code and is intended to be and
shall be interpreted to be enforceable to the maximum extent permitted pursuant
to applicable nonbankruptcy law.  Any provision
of this Agreement which is prohibited or unenforceable in any jurisdiction
shall not invalidate the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.  All references to the Borrower or any other
Grantor shall include the Borrower or such Grantor as debtor and
debtor-in-possession and any receiver or trustee for the Borrower or any other
Grantor (as the case may be) in any Insolvency or Liquidation Proceeding.  This Agreement shall terminate and be of no
further force and effect, (i) with respect to the Second-Lien Collateral Agent,
the Second-Lien Creditors and the Second-Lien Obligations, upon the later of
(1) the date upon which the obligations under the Second-Lien Credit Agreement
terminate if there are no other Second-Lien Obligations outstanding on such
date and (2) if there are other Second-Lien Obligations outstanding on such
date, the date upon which such Second-Lien Obligations terminate and (ii) with
respect to the First-Lien Collateral Agent, the First-Lien Creditors and the
First-Lien Obligations, the date of the Discharge of First-Lien Obligations,
subject to the rights of the First-Lien Creditors under Section 6.5.

 

 

8.3           Amendments; Waivers.  No amendment, modification or waiver of any
of the provisions of this Agreement by the Second-Lien Collateral Agent or the
First-Lien Collateral Agent shall be made unless the same shall be in writing
signed on behalf of each party hereto; provided that the First-Lien
Collateral Agent (at the direction of the Required First-Lien Creditors) may,
without the written consent of any other Creditor, agree to modifications of
this Agreement for the purpose of securing additional extensions of credit
(including pursuant to the First-Lien Credit Agreement or any Refinancing or
extension thereof) and adding new creditors as “First-Lien Creditors” and
“Creditors” hereunder, so long as such extensions (and resulting additions) do
not otherwise give rise to a violation of the express terms of the First-Lien
Credit Agreement or the Second-Lien Credit Agreement. Each waiver of the terms
of this Agreement, if any, shall be a waiver only with respect to the specific
instance involved and shall not impair the rights of the parties making such
waiver or the obligations of the other parties to such party in any other
respect or at any other time. 
Notwithstanding the foregoing, neither Holdings nor the Borrower shall
have any right to consent to or approve any amendment, modification or waiver
of any provision of this Agreement except to the extent its rights, interests,
liabilities or privileges are directly affected.

 

8.4           Information Concerning Financial
Condition of Holdings and its Subsidiaries.  The First-Lien Collateral Agent and the First-Lien Creditors, on
the one hand, and the Second-Lien Creditors, on the other hand, shall each be
responsible for keeping themselves informed of (a) the financial condition of
Holdings and its Subsidiaries and all endorsers and/or guarantors of the
First-Lien Obligations or the Second-Lien Obligations and (b) all other
circumstances bearing upon the risk of nonpayment of the First-Lien Obligations
or the Second-Lien Obligations.  The
First-Lien Collateral Agent and the First-Lien Creditors shall have no duty to
advise the Second-Lien Collateral Agent or any Second-Lien Creditor of
information known to it or them regarding such condition or any such
circumstances or otherwise.  In the
event the First-Lien Collateral Agent or any of the First-Lien Creditors, in
its or their sole discretion, undertakes at any time or from time to time to
provide any such information to the Second-Lien Collateral Agent or any
Second-Lien Creditor, it or they shall be under no obligation (w) to make, and
the First-Lien Collateral Agent and the First-Lien Creditors shall not make,
any express or implied representation or warranty, including with respect to
the accuracy, completeness, truthfulness or validity of any such information so
provided, (x) to provide any additional information or to provide any such
information on any subsequent occasion, (y) to undertake any investigation or
(z) to disclose any information which, pursuant to accepted or reasonable
commercial finance practices, such party wishes to maintain confidential or is
otherwise required to maintain confidential.

 

8.5           Subrogation.  Subject to the Discharge of First-Lien
Obligations, with respect to the value of any payments or distributions in
cash, property or other assets that the Second-Lien Creditors or Second-Lien
Collateral Agent pay over to the First-Lien Collateral Agent or First-Lien
Creditors under the terms of this Agreement, the Second-Lien Creditors and the
Second-Lien Collateral Agent shall be subrogated to the rights of the
First-Lien Collateral Agent and First-Lien Creditors; provided that, the
Second-Lien Collateral Agent, on behalf of itself and the Second-Lien
Creditors, hereby agrees not to assert or enforce all such rights of
subrogation it may acquire as a result of any payment hereunder until the
Discharge of First-Lien Obligations has occurred.  Each of Holdings and the Borrower acknowledges and agrees that,
the value of any payments or distributions in cash, property or other assets
received by the Second-

 

 

Lien Collateral Agent or the
Second-Lien Creditors and paid over to the First-Lien Collateral Agent or the
First-Lien Creditors pursuant to, and applied in accordance with this
Agreement, shall not relieve or reduce any of the Obligations owed by the
Borrower under the Second-Lien Credit Documents.

 

8.6           Application of Payments.  All payments received by the First-Lien
Collateral Agent or the First-Lien Creditors may be applied, reversed and
reapplied, in whole or in part, to such part of the First-Lien Obligations as
the First-Lien Creditors, in their sole discretion, deem appropriate.  The Second-Lien Collateral Agent, on behalf
of itself and the Second-Lien Creditors, assents to any extension or postponement
of the time of payment of the First-Lien Obligations or any part thereof and to
any other indulgence with respect thereto, to any substitution, exchange or
release of any security which may at any time secure any part of the First-Lien
Obligations and to the addition or release of any other Person primarily or
secondarily liable therefor.

 

8.7           SUBMISSION TO JURISDICTION;
WAIVERS.  (a)  THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY SUBMIT TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK AND OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND ANY
APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT,
AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, IN SUCH FEDERAL COURT.  EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

 

(b)           THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION WHICH EACH MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT
REFERRED TO IN SECTION 8.7(a).  EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(c)           EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS AGREEMENT TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT,

 

 

TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE
OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE
LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION.

 

8.8           Notices.  All notices to the Second-Lien Creditors and
the First-Lien Creditors permitted or required under this Agreement may be sent
to the Second-Lien Collateral Agent and the First-Lien Collateral Agent,
respectively.  Unless otherwise
specifically provided herein, any notice or other communication herein required
or permitted to be given shall be in writing and may be personally served,
electronically mailed or sent by courier service or U.S. mail and shall be
deemed to have been given when delivered in person or by courier service, upon
receipt of electronic mail or four Business Days after deposit in the U.S. mail
(registered or certified, with postage prepaid and properly addressed).  For the purposes hereof, the addresses of
the parties hereto shall be as set forth below each party’s name on the
signature pages hereto, or, as to each party, at such other address as may be
designated by such party in a written notice to all of the other parties.

 

8.9           Further Assurances.  Each of the First-Lien Collateral Agent, on
behalf of itself and the First-Lien Creditors under its First-Lien Credit
Documents, the Second-Lien Collateral Agent, on behalf of itself and the
Second-Lien Creditors, Holdings and the Borrower, agrees that each of them
shall take such further action and shall execute and deliver such additional
documents and instruments (in recordable form, if requested) as the First-Lien
Collateral Agent or the Second-Lien Collateral Agent may reasonably request to
effectuate the terms of and the lien priorities contemplated by this
Agreement.  Each Second-Lien Creditor,
by its acceptance of the benefits of the Second-Lien Credit Documents, agrees
to be bound by the agreements herein made by it and the Second-Lien Collateral
Agent, on its behalf.

 

8.10         APPLICABLE LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.

 

8.11         Binding on Successors and Assigns.  This Agreement shall be binding upon
First-Lien Collateral Agent, the First-Lien Creditors, the Second-Lien
Collateral Agent, the Second-Lien Creditors and their respective successors and
assigns.

 

8.12         Specific Performance. Each of
the First-Lien Collateral Agent and the Second-Lien Collateral Agent may demand
specific performance of this Agreement. 
Each of the First-Lien Collateral Agent, on behalf of itself and the
First-Lien Creditors under its First-Lien Credit Documents, and the Second-Lien
Collateral Agent, on behalf of itself and the Second-Lien Creditors, hereby
irrevocably waives any defense based on the adequacy of a remedy at law and any
other defense which might be asserted to bar the remedy of specific performance
in any action which may be brought by the First-Lien Collateral Agent or the
Second-Lien Collateral Agent, as the case may be.

 

 

8.13         Headings.  Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive
effect.

 

8.14         Counterparts.  This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. 
Delivery of an executed counterpart of a signature page of this
Agreement or any document or instrument delivered in connection herewith by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement or such other document or instrument, as applicable.

 

8.15         Authorization.  By its signature, each Person executing this
Agreement on behalf of a party hereto represents and warrants to the other
parties hereto that it is duly authorized to execute this Agreement. Each
Second-Lien Creditor, by its acceptance of the benefits of the Second-Lien
Credit Documents, agrees to be bound by the agreements made herein.

 

8.16         No Third Party Beneficiaries; Effect
of Agreement.  This Agreement and
the rights and benefits hereof shall inure to the benefit of each of the
parties hereto and its respective successors and assigns and shall inure to the
benefit of each of the First-Lien Creditors and the Second-Lien Creditors.  No other Person shall have or be entitled to
assert rights or benefits hereunder. 
Nothing in this Agreement shall impair, as between Holdings, the
Borrower and the First-Lien Collateral Agent and the First-Lien Creditors, on
the one hand, and the Borrower and the Second-Lien Collateral and the
Second-Lien Creditors, on the other hand, the obligations of the Borrower to
pay principal, interest, fees and other amounts as provided in the First-Lien
Credit Documents and the Second-Lien Credit Documents, respectively.

 

8.17         Provisions Solely to Define Relative
Rights.  The provisions of this
Agreement are and are intended solely for the purpose of defining the relative
rights of the First-Lien Creditors on the one hand and the Second-Lien
Creditors on the other hand.  None of
the Borrower, any other Grantor or any other creditor thereof shall have any rights
hereunder.  Nothing in this Agreement is
intended to or shall impair the obligations of the Borrower or any other
Grantor, which are absolute and unconditional, to pay the First-Lien
Obligations and the Second-Lien Obligations as and when the same shall become
due and payable in accordance with their terms.

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Intercreditor
Agreement as of the date first written above.

 

 

	
  Mailcode
  CA5-701-05-19

  	
  First-Lien
  Collateral Agent

  
	
  1455 Market
  Street, 5th Floor

  	
   

  
	
  San Francisco,
  CA 94103

  	
   

  
	
  Telephone: (415)
  436-3495

  	
  BANK OF
  AMERICA, N.A.

  
	
  Facsimile:  
  (415) 503-5006

  	
  in its
  capacity as First-Lien Collateral Agent

  
	
  Electronic Mail:

  	
   

  
	
  charles.graber@bankofamerica.com

  	
  By:

  	
   

  	
   

  
	
  Attention:
  Charles Graber

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
  With a copy to:

  	
   

  
	
   

  	
   

  
	
  Mailcode
  NC1-007-13-01

  	
   

  
	
  100 North
  Tryon Street, 13th Floor

  	
   

  
	
  Charlotte,
  North Carolina  28255

  	
   

  
	
  Attention:  Laura Clark

  	
   

  
	
  Telephone
  No.:  704-388-6415

  	
   

  
	
  Facsimile
  No.:  704-409-0564

  	
   

  
	
  Electronic
  Mail:

  	
   

  
	
  laura.l.clark@bankofamerica.com

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Mailcode
  CA5-701-05-19

  	
  Second-Lien
  Collateral Agent

  
	
  1455 Market
  Street, 5th Floor

  	
   

  
	
  San Francisco,
  CA 94103

  	
   

  
	
  Telephone: (415)
  436-3495

  	
  BANK OF
  AMERICA, N.A.

  
	
  Facsimile:  
  (415) 503-5006

  	
  in its
  capacity as Second-Lien Collateral Agent

  
	
  Electronic Mail:

  	
   

  
	
  charles.graber@bankofamerica.com

  	
   

  
	
  Attention:
  Charles Graber

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
  With a copy to:

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Mailcode
  NC1-007-13-01

  	
   

  
	
  100 North
  Tryon Street, 13th Floor

  	
   

  
	
  Charlotte,
  North Carolina  28255

  	
   

  
	
  Attention:  Laura Clark

  	
   

  
	
  Telephone No.:  704-388-6415

  	
   

  
	
  Facsimile
  No.:  704-409-0564

  	
   

  
	
  Electronic
  Mail:

  	
   

  
	
  laura.l.clark@bankofamerica.com

  	
   

  

 

 

	
  2366
  Bernville Road

  	
  ENERSYS

  
	
  Reading, PA
  19605

  	
   

  
	
  Telephone
  No: 610-208-1991

  	
   

  
	
  Facsimile
  No: 610-298-1671

  	
  By:

  	
   

  	
   

  
	
  Attention:
  Michael T. Philion

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  2366
  Bernville Road

  	
  ENERSYS
  CAPITAL INC.

  
	
  Reading, PA
  19605

  	
   

  
	
  Telephone
  No: 610-208-1991

  	
   

  
	
  Facsimile
  No: 610-298-1671

  	
  By:

  	
   

  	
   

  
	
  Attention:
  Michael T. Philion

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00066-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00066-of-00352.parquet"}]]