FIRST LIEN / UNSECURED INTERCREDITOR AGREEMENT
Near-Final Draft — March 23, 2025
DRAFT — Subject to Final Review and Execution
FIRST LIEN / UNSECURED INTERCREDITOR AGREEMENT
dated as of
[●], 2025
among
CRESCENT HARBOR BANK, N.A. as First Lien Collateral Agent,
PINNACLE TRUST COMPANY as Unsecured Notes Trustee,
and
NEXFORD INDUSTRIAL HOLDINGS INC. as Borrower
NIH Credit Agreement — Draft 3 (Intercreditor)
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FIRST LIEN / UNSECURED INTERCREDITOR AGREEMENT
This FIRST LIEN / UNSECURED INTERCREDITOR AGREEMENT (this "Agreement") is dated as of [●], 2025 (the "Effective Date"), among CRESCENT HARBOR BANK, N.A., a national banking association, as collateral agent (in such capacity, the "First Lien Collateral Agent") for the First Lien Claimholders (as defined herein), PINNACLE TRUST COMPANY, a New York trust company, as trustee (in such capacity, the "Unsecured Notes Trustee") for the holders of the Unsecured Notes (as defined herein), and NEXFORD INDUSTRIAL HOLDINGS INC., a Delaware corporation (the "Borrower").
RECITALS
WHEREAS:
A. The Borrower, the Guarantors party thereto, Crescent Harbor Bank, N.A., as administrative agent (in such capacity, the "Administrative Agent") and collateral agent (in such capacity, the "First Lien Collateral Agent"), Ironwood Capital Markets, LLC and Northvane Securities, Inc., as joint lead arrangers and joint bookrunners, and the Lenders party thereto, have entered into that certain Credit Agreement dated as of [●], 2025 (as amended, restated, supplemented, refinanced, or replaced from time to time, the "First Lien Credit Agreement"), pursuant to which the Lenders have agreed to provide a senior secured term loan facility in the aggregate principal amount of One Billion Four Hundred Million Dollars ($1,400,000,000) in the form of a Term Loan B (the "Term Loan B") to the Borrower, subject to the terms and conditions set forth therein;
B. The Borrower, as issuer, the Guarantors party thereto, and Pinnacle Trust Company, as trustee (in such capacity, the "Unsecured Notes Trustee"), previously entered into that certain Indenture dated as of November 8, 2021 (as amended, supplemented, or otherwise modified from time to time, the "Unsecured Notes Indenture"), pursuant to which the Borrower issued Two Hundred Fifty Million Dollars ($250,000,000) in aggregate principal amount of 7.250% Senior Unsecured Notes due 2028 (the "Unsecured Notes");
C. The obligations of the Borrower and the Guarantors under the First Lien Credit Agreement and the Security Documents (as defined herein) (collectively, the "First Lien Obligations") are secured by first-priority security interests in and liens upon substantially all assets of the Borrower and each Guarantor (collectively, the "Collateral"), as more fully described in the Security Documents; the obligations of the Borrower and the Guarantors under the Unsecured Notes Indenture and the Unsecured Notes (collectively, the "Unsecured Notes Obligations") are unsecured and are not secured by any lien on or security interest in any property of any Loan Party;
D. The parties hereto desire to set forth their respective rights, priorities, and remedies with respect to the Collateral and the proceeds thereof, and to establish the relative priorities and intercreditor arrangements between the First Lien Claimholders (as defined herein) and the Unsecured Notes Parties (as defined herein), including limitations on the ability of the Unsecured Notes Parties to exercise remedies with respect to the Collateral prior to the Discharge of First Lien Obligations (as defined herein);
E. The Borrower is entering into this Agreement at the request of the First Lien Collateral Agent and the Unsecured Notes Trustee and to acknowledge and consent to the provisions hereof, and the Borrower's execution of this Agreement is a condition precedent to the effectiveness of the First Lien Credit Agreement; and
F. The parties acknowledge that this Agreement governs only the relationship between the First Lien Claimholders and the Unsecured Notes Parties (i.e., the relationship between first lien secured claims and unsecured claims). The First Lien Credit Agreement contemplates that, if second lien indebtedness is incurred by the Borrower in the future, a separate First Lien/Second Lien Intercreditor Agreement would be required to govern the relationship between such first lien secured claims and second lien secured claims, and this Agreement is not intended to address any such future arrangement.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.01. Definitions.
As used in this Agreement, the following terms shall have the meanings set forth below:
"Administrative Agent" means Crescent Harbor Bank, N.A., a national banking association, in its capacity as administrative agent under the First Lien Credit Agreement, together with its successors and assigns in such capacity, with its principal office located at 320 Federal Street, Boston, Massachusetts 02110.
"Bankruptcy Code" means Title 11 of the United States Code (11 U.S.C. §§ 101 et seq.), as amended from time to time, and any successor statute or statutes and all rules and regulations promulgated thereunder.
"Borrower" means Nexford Industrial Holdings Inc., a Delaware corporation (EIN: 36-4178552; Delaware Secretary of State File No. 5765432), with its principal executive offices located at 1400 Industrial Parkway, Schaumburg, Illinois 60173, and its successors and permitted assigns.
"Collateral" means all assets and property of the Loan Parties that are subject to first-priority security interests granted to the First Lien Collateral Agent (for the benefit of the First Lien Claimholders) pursuant to the Security Documents, including without limitation: (i) all equity interests in each direct domestic subsidiary of any Loan Party (representing 100% of such equity interests) and all equity interests in each first-tier foreign subsidiary held by any Loan Party (representing 65% of the total voting equity interests and 100% of the total non-voting equity interests in each such foreign subsidiary); (ii) all accounts receivable; (iii) all inventory; (iv) all equipment; (v) all intellectual property, including patents, trademarks, copyrights, trade secrets, and licenses related thereto; (vi) all deposit accounts and securities accounts; (vii) all general intangibles; (viii) all owned real property with a fair market value in excess of $10,000,000, consisting of the four Mortgaged Properties (as defined herein), which have a total appraised value of approximately $193,000,000; (ix) all material intercompany notes; and (x) all proceeds of, substitutions for, and products of any of the foregoing.
"Collateral Proceeds" means all cash, securities, instruments, and other property received upon the sale, collection, exchange, enforcement, foreclosure, or other realization upon or disposition of any Collateral, including any amounts received or distributable on account of claims secured by Collateral in any Insolvency or Liquidation Proceeding.
"DIP Financing" means any financing or credit facility provided to any Loan Party as a debtor or debtor-in-possession in any Insolvency or Liquidation Proceeding, whether pursuant to Section 364 of the Bankruptcy Code or any comparable provision of applicable law.
"Discharge of First Lien Obligations" has the meaning set forth in Section 12.01.
"Enforcement Action" means (a) the taking of any action to enforce, collect, or realize upon any Collateral or any rights arising under the First Lien Credit Agreement, the Security Documents, the Unsecured Notes Indenture, or this Agreement, including the exercise of any rights of a secured party under Article 9 of the UCC (or any comparable provision of any other applicable law); (b) the commencement or prosecution of any foreclosure action or proceeding, whether judicial or non-judicial; (c) the exercise of any right of setoff or recoupment against any Loan Party in respect of any Collateral; (d) the commencement of any action to take possession of, sell, lease, license, or otherwise dispose of or realize upon any Collateral (or any portion thereof); (e) the making of any demand for payment or performance under any guarantee or other credit support document with respect to the Collateral; and (f) the taking of any other action to enforce the rights of any secured party with respect to any Collateral, including the exercise of voting rights in respect of pledged equity interests.
"Event of Default" means (a) with respect to the First Lien Credit Agreement, any "Event of Default" as defined therein; and (b) with respect to the Unsecured Notes Indenture, any "Event of Default" as defined therein.
"First Lien Claimholders" means, collectively, the Administrative Agent, the First Lien Collateral Agent, the Lenders under the First Lien Credit Agreement, and all other Secured Parties (as defined in the First Lien Credit Agreement) under the First Lien Credit Agreement and the Security Documents, together with their respective successors, transferees, and assigns.
"First Lien Collateral Agent" means Crescent Harbor Bank, N.A., a national banking association, in its capacity as collateral agent for the First Lien Claimholders under the First Lien Credit Agreement and the Security Documents, together with its successors and assigns in such capacity, with its principal office located at 320 Federal Street, Boston, Massachusetts 02110.
"First Lien Credit Agreement" means the Credit Agreement dated as of [●], 2025, among the Borrower, the Guarantors party thereto, Crescent Harbor Bank, N.A., as Administrative Agent and Collateral Agent, Ironwood Capital Markets, LLC and Northvane Securities, Inc., as Joint Lead Arrangers and Joint Bookrunners, and the Lenders party thereto, as the same may be amended, restated, amended and restated, supplemented, modified, refinanced, renewed, extended, or replaced from time to time (including any increase in the principal amount of the indebtedness thereunder, whether through incremental facilities or otherwise), and any agreement extending the maturity of, consolidating, or otherwise restructuring all or any portion of the indebtedness and other obligations thereunder or any successor agreement.
"First Lien Obligations" means all obligations of the Borrower and the Guarantors arising under or in respect of the First Lien Credit Agreement and the Security Documents, including without limitation: (a) all principal of and interest on the Term Loan B in the initial aggregate principal amount of $1,400,000,000 (bearing interest at a rate per annum equal to the applicable Term SOFR rate plus 400 basis points, subject to a Term SOFR floor of 0.75%); (b) all fees payable under the First Lien Credit Agreement, including upfront fees, commitment fees, and administrative agent fees; (c) all reimbursement obligations and other amounts payable in respect of letters of credit (if any); (d) all expenses and indemnification obligations; (e) all obligations in respect of any interest rate hedging or other hedging arrangements entered into with a Secured Party (or an affiliate thereof) that are secured by the Collateral; and (f) all other amounts from time to time owing by the Borrower or any Guarantor under the First Lien Credit Agreement and the Security Documents, in each case whether matured or unmatured, absolute or contingent, now existing or hereafter arising.
"Guarantors" means, collectively, (a) Granite Peak NIH Holdings, LLC, a Delaware limited liability company (the "Holdings Guarantor"), and (b) each of the following Subsidiary Guarantors (collectively, eleven (11) domestic subsidiaries of the Borrower or Holdings): Nexford Precision Components, Inc.; Nexford Engineered Systems, LLC; Nexford Coatings & Surface Technologies, Inc.; Nexford Manufacturing Services, LLC; Nexford Properties, LLC; Nexford International Holdings, Inc.; Clearfield Tool & Die, Inc.; Summit Industrial Fabrication Co.; Ridgepoint Specialty Coatings, LLC; and Lakeshore Precision Engineering, Inc. Each Guarantor is identified by entity type, jurisdiction of organization, and other identifying information on Schedule 1 hereto.
"Holdings" means Granite Peak NIH Holdings, LLC, a Delaware limited liability company (EIN: 85-3291047; Delaware Secretary of State File No. 7234891), with its registered address at c/o Penmark Industries, 1209 Orange Street, Wilmington, Delaware 19801.
"Insolvency or Liquidation Proceeding" means (a) any voluntary or involuntary case or proceeding under the Bankruptcy Code (or any comparable provision of applicable federal, state, or foreign law) with respect to any Loan Party; (b) any other voluntary or involuntary insolvency, reorganization, or bankruptcy case or proceeding, or any receivership, liquidation, dissolution, marshaling of assets and liabilities, or similar case or proceeding with respect to any Loan Party or any substantial portion of its assets; (c) any assignment for the benefit of creditors of any Loan Party; or (d) any case or proceeding seeking the appointment of a trustee, receiver, custodian, conservator, examiner, or similar official for any Loan Party or any substantial portion of its assets.
"Lenders" means the banks, financial institutions, and other lenders party to the First Lien Credit Agreement from time to time, together with their respective successors, transferees, and assigns.
"Lien" means any mortgage, pledge, hypothecation, assignment for security, security interest, encumbrance, charge, or deposit arrangement or other arrangement having the practical effect of constituting a security interest, including any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the UCC or any comparable legislation of any jurisdiction.
"Loan Parties" means, collectively, the Borrower and the Guarantors.
"Mortgaged Properties" means the four (4) owned real properties of the Loan Parties that are subject to mortgages, deeds of trust, or deeds to secure debt (as applicable) in favor of the First Lien Collateral Agent for the benefit of the First Lien Claimholders, consisting of:
(1) 1400 Industrial Parkway, Schaumburg, Illinois 60173 (appraised value: $85,000,000);
(2) 2750 Commerce Drive, Rockford, Illinois 61101 (appraised value: $42,000,000);
(3) 600 Manufacturers Row, Greenville, South Carolina 29607 (appraised value: $38,000,000); and
(4) 9100 Westpark Industrial Boulevard, Houston, Texas 77063 (appraised value: $28,000,000).
"Permitted Liens" means liens permitted under Section 7.01 of the First Lien Credit Agreement, as in effect on the date hereof or as subsequently amended.
"Person" means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, government, or any agency or political subdivision thereof, or any other entity.
"Proceeds" has the meaning assigned to such term in the UCC.
"Refinancing" means, with respect to any indebtedness, the issuance, incurrence, or assumption of any indebtedness (including through exchange offers, refinancing credit agreements, or otherwise) the proceeds of which are used, directly or indirectly, to repay, prepay, redeem, defease, retire, or refinance, in whole or in part, such indebtedness.
"Security Documents" means, collectively, (a) the Security Agreement dated as of [●], 2025, among the Loan Parties and the First Lien Collateral Agent; (b) the Holdings Pledge Agreement dated as of [●], 2025, between Holdings and the First Lien Collateral Agent; (c) the Borrower Pledge Agreement dated as of [●], 2025, between the Borrower and the First Lien Collateral Agent; (d) each Subsidiary Pledge Agreement entered into by a Subsidiary Guarantor in favor of the First Lien Collateral Agent; (e) the CFC Holdco Limited Pledge Agreement entered into by Nexford International Holdings, Inc. in favor of the First Lien Collateral Agent; (f) the intellectual Property Security Agreement dated as of [●], 2025, among the applicable Loan Parties and the First Lien Collateral Agent; (g) all Deposit Account Control Agreements entered into among any Loan Party, the applicable depositary bank, and the First Lien Collateral Agent; (h) all Securities Account Control Agreements entered into among any Loan Party, the applicable securities intermediary, and the First Lien Collateral Agent; (i) the Mortgages, Deeds of Trust, and/or Deeds to Secure Debt, as applicable, covering the Mortgaged Properties; and (j) all other agreements, instruments, and documents granting or purporting to grant liens on any Collateral in favor of the First Lien Collateral Agent for the benefit of the First Lien Claimholders.
"Standstill Period" has the meaning set forth in Section 3.02.
"UCC" means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, "UCC" means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection, or priority.
"Unsecured Notes" means the $250,000,000 aggregate principal amount of 7.250% Senior Unsecured Notes due 2028 issued by the Borrower under the Unsecured Notes Indenture.
"Unsecured Notes Indenture" means the Indenture dated as of November 8, 2021, among the Borrower, as issuer, the Guarantors party thereto, and Pinnacle Trust Company, as Trustee, as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Unsecured Notes Obligations" means all obligations of the Borrower and the Guarantors arising under or in respect of the Unsecured Notes Indenture and the Unsecured Notes, including without limitation all principal, accrued and unpaid interest, premium (if any), Make-Whole Amounts (if any), and all other fees, costs, expenses, indemnities, and other amounts payable thereunder or in connection therewith, in each case whether matured or unmatured, absolute or contingent, now existing or hereafter arising.
"Unsecured Notes Parties" means, collectively, Pinnacle Trust Company, in its capacity as Trustee under the Unsecured Notes Indenture, and each holder from time to time of any Unsecured Notes.
"Unsecured Notes Trustee" means Pinnacle Trust Company, a New York trust company, in its capacity as trustee under the Unsecured Notes Indenture, together with its successors and assigns in such capacity, with its principal office located at 101 Park Avenue, New York, New York 10178.
Section 1.02. Rules of Interpretation.
(a) Unless the context otherwise requires, (i) references herein to any "Article," "Section," "Exhibit," or "Schedule" refer to Articles, Sections, Exhibits, and Schedules of and to this Agreement, (ii) references herein to any agreement, instrument, or document (including this Agreement) mean such agreement, instrument, or document as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms and the terms hereof, (iii) the words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation," (iv) the word "or" is not exclusive, (v) the words "herein," "hereof," "hereto," and "hereunder" refer to this Agreement as a whole, and (vi) the singular includes the plural and vice versa.
(b) Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the First Lien Credit Agreement as in effect on the date hereof.
(c) Terms defined in the UCC which are not otherwise defined herein shall have the meanings set forth in the UCC as in effect in the State of New York from time to time.
(d) All article and section headings are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or affect the meaning or interpretation of any provision hereof.
(e) All references to times of day shall be references to Eastern Time (whether Eastern Standard Time or Eastern Daylight Time, as applicable), unless otherwise expressly specified.
(f) References to any statute, rule, or regulation shall mean such statute, rule, or regulation as amended, modified, supplemented, or replaced from time to time (and, in the case of any statute, shall include any rules and regulations promulgated under such statute), and references to any section of any statute, rule, or regulation shall include any successor to such section.
Section 1.03. Governing Law.
This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without regard to the principles of conflicts of law thereof, other than Section 5-1401 and Section 5-1402 of the New York General Obligations Law, which are hereby incorporated by reference.
ARTICLE II
LIEN PRIORITIES
Section 2.01. Priority of First Lien Obligations.
(a) The First Lien Obligations are secured by first-priority security interests in and liens upon the Collateral, as more fully described in the Security Documents and summarized in Exhibit A hereto. The parties hereto acknowledge and agree that such security interests and liens securing the First Lien Obligations shall at all times be and remain senior and prior in right to any and all other liens, security interests, claims, or encumbrances on the Collateral, subject only to Permitted Liens that have priority as a matter of applicable non-consensual law (including statutory liens for taxes and mechanics' liens).
(b) The Unsecured Notes Obligations are unsecured and are not secured by any lien on or security interest in any Collateral or any other property of any Loan Party. The Unsecured Notes Trustee, on behalf of itself and each of the Unsecured Notes Parties, hereby acknowledges, confirms, and agrees that the Unsecured Notes Obligations are not, and shall not at any time be, secured by any lien on or security interest in any property of any Loan Party, and that the holders of the Unsecured Notes are general unsecured creditors of the Borrower and the Guarantors.
(c) The relative priorities established by this Article II shall be applicable irrespective of whether any party hereto has obtained possession of all or any portion of the Collateral, irrespective of whether any party hereto has given value for all or any portion of the Collateral, and irrespective of the manner in which any lien or security interest in the Collateral was created, attached, or perfected.
Section 2.02. No Liens for Unsecured Notes Parties.
(a) The Unsecured Notes Trustee agrees, on behalf of itself and each of the Unsecured Notes Parties, that neither the Unsecured Notes Trustee nor any Unsecured Notes Party will, directly or indirectly, acquire, accept, hold, or obtain any lien on or security interest in any Collateral or any other property of any Loan Party to secure any Unsecured Notes Obligations, other than liens permitted under the First Lien Credit Agreement and the Unsecured Notes Indenture. The foregoing restriction applies to any lien or security interest arising by operation of law, contract, judicial attachment, or otherwise.
(b) If, notwithstanding the foregoing, any Unsecured Notes Party obtains, receives, or is granted a lien on or security interest in any Collateral or any other property of any Loan Party in violation of this Section 2.02 (whether inadvertently, by operation of law, or otherwise), such lien or security interest shall be deemed to be held in trust by such Unsecured Notes Party for the sole and exclusive benefit of the First Lien Collateral Agent, for the benefit of the First Lien Claimholders. Such lien or security interest shall be immediately assigned and transferred (without recourse, representation, or warranty of any kind) to the First Lien Collateral Agent, and the Unsecured Notes Trustee or such Unsecured Notes Party shall promptly take all actions reasonably requested by the First Lien Collateral Agent (at the Borrower's expense) to effectuate such assignment and transfer, including the execution and delivery of any instruments, documents, or financing statements as may be necessary or desirable.
Section 2.03. Priority Regardless of Time, Manner, or Order of Perfection.
The priority of the liens and security interests securing the First Lien Obligations, as established by this Agreement, shall be in full force and effect regardless of:
(a) the time, manner, or order of attachment, grant, filing, recording, or perfection of any lien or security interest in the Collateral granted to, held by, or for the benefit of the First Lien Collateral Agent or any First Lien Claimholder;
(b) anything contained in the UCC or any other applicable law to the contrary;
(c) any defect in, or failure of, creation, attachment, grant, or perfection of any lien or security interest securing the First Lien Obligations;
(d) the modification, renewal, extension, or replacement of any security interest securing the First Lien Obligations;
(e) whether any First Lien Claimholder or the First Lien Collateral Agent holds possession of all or any part of the Collateral; and
(f) the avoidance, invalidation, or subordination of any lien or security interest securing the First Lien Obligations for any reason, including any failure to file a continuation statement or any other action or inaction by the First Lien Collateral Agent.
Section 2.04. Prohibition on Contesting Liens.
(a) The Unsecured Notes Trustee, on behalf of itself and each of the Unsecured Notes Parties, hereby agrees that it will not (and hereby waives any right to), directly or indirectly, challenge, contest, oppose, or support any other person in challenging, contesting, or opposing: (i) the validity, creation, attachment, perfection, priority, or enforceability of any lien or security interest on any Collateral securing the First Lien Obligations; (ii) the validity or enforceability of the First Lien Obligations; or (iii) any provision of this Agreement, the First Lien Credit Agreement, or any Security Document.
(b) The First Lien Collateral Agent, on behalf of itself and the First Lien Claimholders, hereby agrees that it will not (and hereby waives any right to), directly or indirectly, challenge, contest, oppose, or support any other person in challenging, contesting, or opposing the validity or enforceability of the Unsecured Notes Obligations, the Unsecured Notes Indenture, or the Unsecured Notes.
(c) Nothing in this Section 2.04 shall be construed to prevent or restrict any party hereto from raising or asserting any defense to the enforcement of any obligation (other than its obligations under this Agreement) that may be available to such party under applicable law, including the defense that such obligation was not duly authorized, executed, or delivered.
ARTICLE III
ENFORCEMENT ACTIONS
Section 3.01. Exclusive Enforcement Rights of First Lien Collateral Agent.
(a) Until the Discharge of First Lien Obligations has occurred, the First Lien Collateral Agent shall have the sole and exclusive right to exercise, and shall retain the exclusive power to direct the exercise of, any and all Enforcement Actions with respect to the Collateral, including without limitation the right to foreclose upon, sell, collect, receive, appropriate, liquidate, or otherwise realize upon or dispose of the Collateral (or any portion thereof), whether through judicial or non-judicial proceedings, public or private sale, strict foreclosure, acceptance of the Collateral in satisfaction of indebtedness, or otherwise. The First Lien Collateral Agent shall exercise such rights and remedies in accordance with the terms of the First Lien Credit Agreement, the Security Documents, and applicable law, and shall have no duty or obligation to the Unsecured Notes Trustee, any Unsecured Notes Party, or any other person with respect to the timing, method, or manner of any such exercise.
(b) The Unsecured Notes Trustee, on behalf of itself and each of the Unsecured Notes Parties, hereby agrees that, until the Discharge of First Lien Obligations has occurred, neither the Unsecured Notes Trustee nor any Unsecured Notes Party will take, or cause or direct any Loan Party or any other person to take, any Enforcement Action with respect to the Collateral or any portion thereof, and the Unsecured Notes Trustee and the Unsecured Notes Parties shall not direct the Borrower or any Guarantor to take any action relating to the Collateral that would be inconsistent with the rights and priorities established by this Agreement. Without limiting the foregoing, neither the Unsecured Notes Trustee nor any Unsecured Notes Party shall, so long as any First Lien Obligations remain outstanding:
(i) commence or join in any judicial, administrative, or arbitral proceeding to enforce any right, remedy, or claim against any Collateral;
(ii) take any action to attach, levy, execute, or garnish any Collateral;
(iii) exercise any right of setoff, recoupment, or counterclaim against any Loan Party with respect to any Collateral;
(iv) exercise any voting rights in respect of any pledged equity interests constituting Collateral; or
(v) take any other action that would have the effect of depriving the First Lien Collateral Agent or the First Lien Claimholders of the benefit of the Collateral or any portion thereof.
Section 3.02. Standstill Period for Unsecured Notes Parties.
(a) The Unsecured Notes Trustee and the Unsecured Notes Parties agree that they shall not exercise any right or remedy available to them under the Unsecured Notes Indenture, applicable law, or otherwise with respect to the Collateral, or seek to enforce any judgment against any Loan Party with respect to Collateral, for a period of not less than one hundred eighty (180) calendar days (the "Standstill Period") following the date on which the Unsecured Notes Trustee delivers written notice to the First Lien Collateral Agent of the occurrence and continuance of an Event of Default under the Unsecured Notes Indenture.
(b) During the Standstill Period, the Unsecured Notes Parties shall not commence, join in, or support any legal proceeding (whether judicial, administrative, or arbitral) to enforce any claim against the Collateral or any portion thereof, or to collect, attach, levy upon, or otherwise realize upon any Collateral.
(c) Notwithstanding the foregoing, the running of the Standstill Period shall be tolled during any period in which an Insolvency or Liquidation Proceeding with respect to the Borrower or any Guarantor is pending, and the Standstill Period shall recommence upon the dismissal or termination of any such proceeding (to the extent that the Standstill Period had not fully expired prior to the commencement of such proceeding).
(d) After the expiration of the Standstill Period, the Unsecured Notes Trustee and the Unsecured Notes Parties may exercise rights and remedies available to them under the Unsecured Notes Indenture or applicable law, but only to the extent that the exercise of such rights and remedies is not inconsistent with, and does not violate, the priority of liens and the rights of the First Lien Claimholders and the First Lien Collateral Agent as established by this Agreement. For the avoidance of doubt, any Collateral Proceeds received by any Unsecured Notes Party following the expiration of the Standstill Period shall remain subject to the Proceeds Waterfall set forth in Article IV.
Section 3.03. No Interference with Enforcement.
The Unsecured Notes Trustee, on behalf of itself and each of the Unsecured Notes Parties, agrees that neither the Unsecured Notes Trustee nor any Unsecured Notes Party shall take any action that would interfere with, hinder, delay, or otherwise impede the exercise by the First Lien Collateral Agent or any First Lien Claimholder of any Enforcement Action with respect to the Collateral. Without limiting the generality of the foregoing, neither the Unsecured Notes Trustee nor any Unsecured Notes Party shall, directly or indirectly:
(a) oppose, contest, or object to any motion, application, order, or relief sought by the First Lien Collateral Agent or any First Lien Claimholder in any judicial, administrative, or arbitral proceeding relating to the Collateral, including any motion for relief from the automatic stay under Section 362 of the Bankruptcy Code;
(b) take any action to restrain, delay, or prevent the First Lien Collateral Agent or any First Lien Claimholder from enforcing any lien, security interest, or other right in or to the Collateral;
(c) seek to marshal any assets of any Loan Party to the detriment of the First Lien Claimholders in their capacity as secured creditors; or
(d) take any other action that would have the effect of interfering with or impeding the exercise by the First Lien Collateral Agent of Enforcement Actions with respect to the Collateral.
Section 3.04. Rights of Unsecured Notes Parties Preserved.
Notwithstanding the foregoing provisions of this Article III, nothing in this Agreement shall be construed to prevent or restrict the Unsecured Notes Trustee or any Unsecured Notes Party from:
(a) filing proofs of claim, statements of interest, or similar documents in any Insolvency or Liquidation Proceeding, in accordance with the procedures established by the court or other tribunal having jurisdiction over such proceeding;
(b) voting on, consenting to, or objecting to any plan of reorganization, plan of liquidation, or similar dispositive plan proposed in any Insolvency or Liquidation Proceeding, to the extent the Unsecured Notes Parties are entitled to vote as holders of allowed claims;
(c) exercising any right or remedy as a general unsecured creditor of any Loan Party that does not relate to the Collateral and does not contravene, or otherwise conflict with, the other terms and provisions of this Agreement, including the commencement or prosecution of an action for money damages against any Loan Party on account of the Unsecured Notes Obligations (subject to Section 3.02);
(d) objecting to the allowance of any claim in any Insolvency or Liquidation Proceeding; or
(e) appearing and being heard in any Insolvency or Liquidation Proceeding with respect to matters not inconsistent with this Agreement.
For the avoidance of doubt, the rights preserved by this Section 3.04 are in all cases subject to the other provisions of this Agreement, including the Proceeds Waterfall set forth in Article IV, the turnover provisions set forth in Section 4.02, and the provisions relating to Insolvency or Liquidation Proceedings set forth in Article V.
ARTICLE IV
APPLICATION OF COLLATERAL PROCEEDS
Section 4.01. Proceeds Waterfall.
All Collateral Proceeds received by the First Lien Collateral Agent, the Unsecured Notes Trustee, any First Lien Claimholder, any Unsecured Notes Party, or any other person in connection with any Enforcement Action, any sale, disposition, or other realization upon any Collateral (whether occurring inside or outside of an Insolvency or Liquidation Proceeding), or any distribution on account of claims secured by Collateral, shall be applied in the following order of priority (the "Proceeds Waterfall"):
First: To the payment of all costs and expenses of the First Lien Collateral Agent (including the reasonable and documented fees and disbursements of counsel to the First Lien Collateral Agent and any amounts payable to the First Lien Collateral Agent under the First Lien Credit Agreement for its own account) incurred in connection with such Enforcement Action, disposition, or realization upon Collateral, including the costs of collection, sale, foreclosure, and any related proceedings;
Second: To the indefeasible payment in full in cash of all First Lien Obligations in the order of priority and in the manner set forth in the First Lien Credit Agreement and the Security Documents (including the payment of principal, accrued and unpaid interest, fees, premiums, reimbursement obligations, and all other amounts owing under the First Lien Credit Agreement and the Security Documents), until the Discharge of First Lien Obligations has occurred;
Third: To the payment of all costs and expenses of the Unsecured Notes Trustee (including the reasonable and documented fees and disbursements of counsel to the Unsecured Notes Trustee and any amounts payable to the Unsecured Notes Trustee under the Unsecured Notes Indenture for its own account) incurred in connection with the enforcement of the Unsecured Notes Obligations or any proceeding relating thereto;
Fourth: To the payment of the Unsecured Notes Obligations in the order of priority and in the manner set forth in the Unsecured Notes Indenture (including the payment of principal, accrued and unpaid interest, premium (if any), and all other amounts owing under the Unsecured Notes Indenture and the Unsecured Notes); and
Fifth: To the Borrower or as a court of competent jurisdiction may direct or as otherwise required by applicable law.
Section 4.02. Turnover Provisions.
(a) If, at any time prior to the Discharge of First Lien Obligations, the Unsecured Notes Trustee or any Unsecured Notes Party receives any Collateral Proceeds or any payment or distribution on account of the Unsecured Notes Obligations that is derived from, or constitutes, Collateral Proceeds (including any amounts received by the Unsecured Notes Trustee or any Unsecured Notes Party by reason of inadvertent payment, error, mistake, setoff, subrogation, equitable subordination, preference recovery, or any other means), the Unsecured Notes Trustee or such Unsecured Notes Party shall:
(i) hold such Collateral Proceeds in trust for the benefit of the First Lien Claimholders;
(ii) segregate such Collateral Proceeds from its other property and assets and identify such Collateral Proceeds as being held in trust for the benefit of the First Lien Claimholders;
(iii) promptly (and in any event within five (5) business days of receipt) turn over and pay to the First Lien Collateral Agent such Collateral Proceeds in the same form as received (with any necessary endorsements or assignments) for application in accordance with the Proceeds Waterfall set forth in Section 4.01; and
(iv) pending such turnover, not commingle such Collateral Proceeds with any other funds or property.
(b) Exception for Ordinary Course Payments. Notwithstanding the foregoing provisions of this Section 4.02, the turnover obligations set forth in Section 4.02(a) shall not apply to regularly scheduled payments of interest and principal on the Unsecured Notes made by the Borrower to the Unsecured Notes Trustee (for the benefit of the holders of the Unsecured Notes) in the ordinary course of business in accordance with the Unsecured Notes Indenture, to the extent that such payments:
(i) are not derived from Collateral Proceeds received in connection with any Enforcement Action or any sale, disposition, or other realization upon Collateral; and
(ii) are not payments made or distributions received in or in connection with any Insolvency or Liquidation Proceeding.
(c) The First Lien Collateral Agent is hereby authorized to demand, collect, receive, and receipt for any Collateral Proceeds required to be turned over pursuant to this Section 4.02 and to file any claims, proofs of claim, or other documents as may be necessary or desirable to effectuate the turnover obligations set forth herein.
Section 4.03. No Double Payment.
Nothing in this Agreement shall require the Borrower or any Guarantor to make any payment to the Unsecured Notes Trustee or any Unsecured Notes Party in respect of Unsecured Notes Obligations that has previously been applied to the First Lien Obligations pursuant to Section 4.01. Payments applied in accordance with the Proceeds Waterfall shall be deemed to constitute payments of the applicable obligations in the order in which such payments are applied pursuant to Section 4.01, and the Borrower's and each Guarantor's obligations in respect thereof shall be reduced accordingly.
ARTICLE V
INSOLVENCY OR LIQUIDATION PROCEEDINGS
Section 5.01. Applicability in Insolvency Proceedings.
This Agreement, and the relative rights, priorities, liens, and intercreditor arrangements established herein, shall continue in full force and effect notwithstanding the commencement of any Insolvency or Liquidation Proceeding with respect to any Loan Party. All references herein to any Loan Party shall include such Loan Party as a debtor or debtor-in-possession and any receiver, trustee, conservator, examiner, or other fiduciary appointed with respect to such Loan Party or any substantial portion of its assets. The priorities and agreements set forth in this Agreement are intended to be and shall be enforceable in any such Insolvency or Liquidation Proceeding in accordance with their terms, including under Section 510(a) of the Bankruptcy Code and any other applicable provision of law.
Section 5.02. DIP Financing and Adequate Protection.
The Unsecured Notes Trustee, on behalf of itself and each of the Unsecured Notes Parties, agrees that in any Insolvency or Liquidation Proceeding involving any Loan Party:
(a) DIP Financing. The Unsecured Notes Parties shall not object to, oppose, contest, or support any objection to, any DIP Financing provided to or for the benefit of any Loan Party (as debtor or debtor-in-possession) that is consented to by the First Lien Collateral Agent (or the Required Lenders under the First Lien Credit Agreement, to the extent the First Lien Collateral Agent is directed by the Required Lenders to consent); provided that such DIP Financing does not require the Unsecured Notes Parties to subordinate their unsecured claims to any unsecured obligations arising under or in connection with such DIP Financing (for the avoidance of doubt, this proviso does not limit the priming of any unsecured claims by secured DIP Financing liens on Collateral). The Unsecured Notes Parties further agree not to request or accept, and hereby waive, any right to seek adequate protection or other relief in connection with or as a condition to any DIP Financing.
(b) Adequate Protection for First Lien Claimholders. The Unsecured Notes Parties shall not object to, oppose, contest, or support any objection to, any motion or application by the First Lien Claimholders seeking adequate protection of their interests in the Collateral, including without limitation adequate protection in the form of:
(i) the payment of current cash interest, fees, costs, and expenses on the First Lien Obligations (including post-petition interest at the default rate, to the extent allowable);
(ii) the grant of additional or replacement liens on assets of any Loan Party (including post-petition acquired assets) securing the First Lien Obligations;
(iii) the payment of ongoing professional fees and expenses of the First Lien Collateral Agent; or
(iv) any other form of adequate protection as the First Lien Collateral Agent may request.
(c) Adequate Protection Liens for Unsecured Notes Parties. The Unsecured Notes Parties shall not seek, request, or accept any lien on any Collateral (or any other assets of any Loan Party) as adequate protection for any Unsecured Notes Obligations, unless the First Lien Collateral Agent has been granted adequate protection liens on the same Collateral (or such other assets) that are senior in priority to any adequate protection liens granted to the Unsecured Notes Parties, and unless such adequate protection liens in favor of the Unsecured Notes Parties have been consented to by the First Lien Collateral Agent.
Section 5.03. Asset Sales in Insolvency.
The Unsecured Notes Trustee, on behalf of itself and each of the Unsecured Notes Parties, agrees that the Unsecured Notes Parties shall not object to, oppose, contest, or support any objection to, any sale, transfer, or other disposition of any Collateral (or any other assets of any Loan Party) pursuant to Section 363 of the Bankruptcy Code or any comparable provision of applicable law, if:
(i) the First Lien Collateral Agent has consented to such sale, transfer, or disposition (or the Required Lenders under the First Lien Credit Agreement have directed the First Lien Collateral Agent to consent to such sale, transfer, or disposition); and
(ii) the net proceeds of such sale, transfer, or disposition are applied in accordance with the Proceeds Waterfall set forth in Section 4.01 of this Agreement.
Nothing in this Section 5.03 shall be construed to impair the right of the Unsecured Notes Parties to credit bid (if applicable) or to object to the terms of any proposed sale to the extent such objection does not contravene the other provisions of this Agreement.
Section 5.04. Avoidance Action Proceeds.
In the event that the First Lien Claimholders are required, by a final, non-appealable order of a court of competent jurisdiction in any Insolvency or Liquidation Proceeding, to disgorge, return, pay over, or otherwise surrender any Collateral Proceeds previously received by them (whether pursuant to an avoidance action under Sections 544, 547, 548, 549, or 550 of the Bankruptcy Code, or any comparable provision of applicable law, or otherwise), then:
(a) the First Lien Obligations shall be reinstated to the extent of such disgorgement, return, or payment, as if such Collateral Proceeds had not been received by the First Lien Claimholders;
(b) the priorities established by this Agreement shall be reinstated accordingly and shall continue in full force and effect with respect to such reinstated First Lien Obligations; and
(c) the Unsecured Notes Trustee and the Unsecured Notes Parties shall promptly comply with their obligations under this Agreement (including the turnover provisions of Section 4.02) as if such Discharge of First Lien Obligations had not occurred with respect to the reinstated amounts.
Section 5.05. Post-Petition Interest.
Neither the Unsecured Notes Trustee nor any Unsecured Notes Party shall oppose, object to, or contest the payment, allowance, or inclusion of post-petition interest, post-petition fees, or post-petition expenses on or in respect of the First Lien Obligations (including interest at the default rate applicable under the First Lien Credit Agreement), to the extent of the value of the Collateral securing the First Lien Obligations, including for purposes of determining the allowed amount of any secured claim of the First Lien Claimholders under Section 506(b) of the Bankruptcy Code. Notwithstanding the foregoing, nothing in this Section 5.05 shall prevent the Unsecured Notes Parties from asserting that the value of the Collateral is insufficient to cover the amount of post-petition interest, fees, or expenses claimed by the First Lien Claimholders, to the extent such assertion does not otherwise conflict with the provisions of this Agreement.
ARTICLE VI
RELEASES
Section 6.01. Release of Liens on Collateral.
If, in connection with any Enforcement Action, any sale or other disposition of Collateral permitted under the First Lien Credit Agreement or the Security Documents, or any Insolvency or Liquidation Proceeding, the First Lien Collateral Agent releases (or is deemed under the First Lien Credit Agreement or any Security Document to have released) any lien, security interest, or encumbrance on any Collateral, the Unsecured Notes Trustee (to the extent it holds any security interest in or lien on such Collateral, whether obtained by inadvertence, by operation of law, or otherwise) shall be deemed to have automatically and unconditionally consented to such release and to have automatically released its lien or security interest on such Collateral, without the need for any further action or consent by the Unsecured Notes Trustee. The Unsecured Notes Trustee agrees that, upon request of the First Lien Collateral Agent or the Borrower, it shall promptly execute and deliver to the First Lien Collateral Agent or the purchaser or transferee of such Collateral (at the Borrower's expense) any and all termination statements, releases, lien releases, satisfactions, discharges, and other instruments and documents as may be reasonably requested to evidence and effectuate any such release.
Section 6.02. Release of Guarantees.
If, in connection with any Enforcement Action or any transaction permitted under the First Lien Credit Agreement (including any sale, merger, dissolution, or other disposition of a Guarantor or all or substantially all of its assets), any Guarantor is released from its guarantee obligations under the guarantee provisions of the First Lien Credit Agreement, the Unsecured Notes Trustee shall be deemed to have automatically and unconditionally released such Guarantor from its guarantee of the Unsecured Notes Obligations, to the extent that such release is also contemplated by and consistent with the terms of the Unsecured Notes Indenture. The Unsecured Notes Trustee agrees that, upon request of the First Lien Collateral Agent or the Borrower, it shall promptly execute and deliver any and all documents and instruments as may be reasonably requested to evidence and effectuate any such release of a guarantee.
ARTICLE VII
REFINANCING; REPLACEMENT FACILITIES
Section 7.01. Permitted Refinancing of First Lien Obligations.
(a) The First Lien Obligations may be refinanced, replaced, amended, restated, extended, renewed, or restructured, in whole or in part, at any time and from time to time, without the consent of the Unsecured Notes Trustee or any Unsecured Notes Party, and this Agreement shall continue in full force and effect with respect to any such refinanced, replaced, amended, restated, extended, renewed, or restructured First Lien Obligations. Upon any such Refinancing, the refinanced or replacement first lien obligations shall be deemed to constitute "First Lien Obligations" for all purposes of this Agreement, and the agent or collateral agent under such refinancing or replacement facility shall be deemed to be the "First Lien Collateral Agent" for all purposes of this Agreement.
(b) The replacement first lien agent or collateral agent under any such refinancing or replacement facility shall be entitled to all of the rights and benefits of the First Lien Collateral Agent under this Agreement upon execution and delivery to the Unsecured Notes Trustee and the Borrower of a written joinder or acknowledgment, in form and substance reasonably satisfactory to the Unsecured Notes Trustee, agreeing to be bound by the terms of this Agreement as the "First Lien Collateral Agent."
(c) Without limiting the generality of the foregoing, the parties acknowledge and agree that the First Lien Credit Agreement, as in effect on the date hereof, permits the incurrence of incremental first lien facilities in an aggregate principal amount up to the greater of (x) $280,000,000 and (y) 100% of the Borrower's last twelve months' Consolidated EBITDA (the "Free-and-Clear Basket"), plus unlimited additional amounts subject to pro forma compliance with a first lien net leverage ratio not exceeding 4.50 to 1.00 (in each case, subject to the terms and conditions of the First Lien Credit Agreement). Any indebtedness incurred under such incremental facility provisions and secured by the Collateral on a pari passu basis with the existing First Lien Obligations shall be treated as "First Lien Obligations" for all purposes of this Agreement, without further action by any party hereto.
Section 7.02. Permitted Refinancing of Unsecured Notes Obligations.
The Unsecured Notes Obligations may be refinanced, replaced, extended, renewed, or restructured, in whole or in part, at any time and from time to time, provided that the replacement trustee, agent, or representative under any such refinancing or replacement facility executes and delivers to the First Lien Collateral Agent and the Borrower a joinder to this Agreement, in form and substance reasonably satisfactory to the First Lien Collateral Agent, pursuant to which such replacement trustee, agent, or representative agrees to be bound by the terms and conditions of this Agreement as the "Unsecured Notes Trustee." Upon execution and delivery of such joinder, the refinanced or replacement unsecured obligations shall be subject to all of the same terms, conditions, restrictions, and limitations set forth in this Agreement as are applicable to the original Unsecured Notes Obligations.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
Section 8.01. Representations of Each Party.
Each party hereto represents and warrants to each other party hereto, as of the date hereof, as follows:
(a) Organization and Existence. It is duly organized, validly existing, and in good standing under the laws of its jurisdiction of organization. In this regard: (i) Crescent Harbor Bank, N.A. is a national banking association duly organized and existing under the National Bank Act, with its main office located at 320 Federal Street, Boston, Massachusetts 02110; (ii) Pinnacle Trust Company is a trust company duly organized, validly existing, and in good standing under the laws of the State of New York, with its principal office located at 101 Park Avenue, New York, New York 10178; and (iii) Nexford Industrial Holdings Inc. is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware.
(b) Authorization. The execution, delivery, and performance by such party of this Agreement have been duly authorized by all necessary corporate, trust, or other organizational action on the part of such party. No further consent, authorization, approval, or other action by any person (including any governmental authority) is required in connection with such party's execution, delivery, and performance of this Agreement (other than any consent or approval already obtained and in full force and effect).
(c) Enforceability. This Agreement constitutes a legal, valid, and binding obligation of such party, enforceable against such party in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other similar laws affecting creditors' rights generally and (ii) equitable principles of general applicability (whether considered in a proceeding in equity or at law).
(d) No Conflict. The execution, delivery, and performance by such party of this Agreement do not (i) violate any applicable law, rule, or regulation, (ii) conflict with or result in a breach of the organizational documents of such party, or (iii) conflict with or constitute a default under any material agreement or instrument to which such party is a party or by which it or its properties may be bound.
Section 8.02. Representations of the Borrower.
The Borrower represents and warrants to each other party hereto, as of the date hereof, as follows:
(a) The information provided by or on behalf of the Borrower regarding the Collateral, the Security Documents, and the assets and properties of the Loan Parties is true and correct in all material respects as of the date hereof, and no material information has been omitted that would be necessary to make such information, taken as a whole, not misleading.
(b) The First Lien Credit Agreement and the Unsecured Notes Indenture are each in full force and effect as of the date hereof. As of the date hereof, the outstanding principal amount of the Unsecured Notes is $250,000,000, and the Unsecured Notes bear interest at a rate of 7.250% per annum, payable semi-annually. The Borrower is not in default under the Unsecured Notes Indenture, and no Event of Default (as defined in the Unsecured Notes Indenture) has occurred and is continuing.
(c) The Borrower has complied with all conditions necessary for the execution and delivery of this Agreement, including obtaining any required consents under the Unsecured Notes Indenture, and the execution and delivery of this Agreement do not violate any provision of the First Lien Credit Agreement, the Unsecured Notes Indenture, or any other material agreement to which the Borrower is a party.
ARTICLE IX
AGREEMENTS OF THE UNSECURED NOTES TRUSTEE
Section 9.01. Agreement to be Bound.
Pinnacle Trust Company, in its capacity as Unsecured Notes Trustee, hereby agrees, on behalf of itself and each of the Unsecured Notes Parties, to be bound by and to comply with all of the terms and provisions of this Agreement and to act in accordance herewith in its capacity as Trustee under the Unsecured Notes Indenture. The Unsecured Notes Trustee acknowledges that its obligations under this Agreement are in addition to, and not in limitation of, its obligations and duties under the Unsecured Notes Indenture, and that the terms of this Agreement shall control over any inconsistent provisions of the Unsecured Notes Indenture as between the parties hereto. The Unsecured Notes Trustee further agrees to provide notice of this Agreement to the holders of the Unsecured Notes in accordance with the notice provisions of the Unsecured Notes Indenture, and to use commercially reasonable efforts to deliver such notice within thirty (30) days following the Effective Date.