Intercompany Subordination Agreement (2005)Full Document 

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INTERCOMPANY SUBORDINATION AGREEMENT
          THIS INTERCOMPANY SUBORDINATION AGREEMENT (this “Agreement”), dated as of March 28, 2005, is made among the Obligors (as defined below) and US BANK NATIONAL ASSOCIATION, a national banking association, as Trustee (in such capacity, “Trustee”) for the holders of the Notes described below (the “Noteholders”).
          WHEREAS, the Obligors and Trustee are parties to that certain Indenture, dated as of even date herewith (as amended from time to time, the “Indenture”), governing $125,000,000 principal amount of Senior Secured Floating Rate Notes due 2012 (the “Notes”) of SMART Modular Technologies (WWH), Inc. (the “Company”), which Notes are guaranteed by the guarantors listed on the signature pages hereto (the “Guarantors” and, together with the Company, the “Obligors”);
          WHEREAS, certain Obligors have made or may make certain loans or advances from time to time to one or more other Obligors;
          WHEREAS, each Obligor has agreed to the subordination of such indebtedness of each other Obligor to such Obligor, upon the terms and subject to the conditions set forth in this Agreement and the Intercreditor Agreement.
          NOW, THEREFORE, in consideration of the mutual promises, covenants, conditions, representations, and warranties set forth herein and for other good and valuable consideration, the parties hereto agree as follows:
          SECTION 1. Definitions; Interpretation.
          (a) Terms Defined in Indenture. All capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings assigned to them in the Indenture.
          (b) Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings:
          “Agreement” has the meaning set forth in the preamble to this Agreement.
          “Guarantors” has the meaning set forth in the recitals hereto.
          “Insolvency Event” has the meaning set forth in Section 3.
          “Intercreditor Agreement” means that certain Intercreditor Agreement, dated as of the date hereof, by and among Wells Fargo Foothill, Inc., as Credit Agent, the Trustee, and the Obligors.
          “Notes” has the meaning set forth in the recitals hereto.
          “Obligors”has the meaning set forth in the recitals hereto.

 


 

          “Senior Debt” means the “Obligations” (as defined in the Indenture) of any Obligor.
          “Subordinated Debt” means, with respect to each Obligor, all indebtedness, liabilities, and other obligations of any other Obligor owing to such Obligor in respect of any and all loans or advances made by such Obligor to such other Obligor whether now existing or hereafter arising, and whether due or to become due, absolute or contingent, liquidated or unliquidated, determined or undetermined, including all fees and all other amounts payable by any other Obligor to such Obligor under or in connection with any documents or instruments related thereto.
          “Subordinated Debt Payment” means any payment or distribution by or on behalf of an Obligor, directly or indirectly, of assets of such Obligor of any kind or character, whether in cash, property, or securities (including on account of the purchase, redemption, or other acquisition of Subordinated Debt) as a result of a collection, sale, or other disposition of Collateral, or by setoff, exchange, or in any other manner, in each case for or on account of the Subordinated Debt.
          “Trustee” has the meaning set forth in the preamble to this Agreement.
          (c) Interpretation. Unless the context of this Agreement clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the term “including” is not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.” The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. Section, subsection, clause, schedule, and exhibit references are to this Agreement unless otherwise specified. References to agreements and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto. References to statutes or regulations are to be construed as including all statutory and regulatory provisions consolidating, amending, or replacing the statute or regulation referred to. The captions and headings are for convenience of reference only and shall not affect the construction of this Agreement.
          SECTION 2. Subordination to Payment of Senior Debt. Subject to the Intercreditor Agreement, as to each Obligor, all payments on account of the Subordinated Debt shall be subject, subordinate, and junior, in right of payment and exercise of remedies, to the extent and in the manner set forth herein, to the prior payment, in full, in cash or cash equivalents of the Senior Debt.

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