Exhibit 10.41

 

LOGO [g474550g43r38.jpg]    LENDER-SURETY PRIORITY AGREEMENT

THIS LENDER-SURETY PRIORITY AGREEMENT (“Agreement”), dated June 4, 2012, is
entered into by:

 

  1. WELLS FARGO BANK, N.A., a national banking association, as Administrative
Agent (the “Agent”) for the lenders under the Lender Credit Agreement (as
defined below), and

 

  2. ZURICH AMERICAN INSURANCE COMPANY and its Subsidiaries and Affiliates
including, but not limited to FIDELITY AND DEPOSIT COMPANY OF MARYLAND, COLONIAL
AMERICAN CASUALTY AND SURETY COMPANY, and AMERICAN GUARANTEE AND LIABILITY
INSURANCE COMPANY, its successors and assigns (“Surety”).

Agent and Surety agree that all capitalized terms used in this Agreement but not
defined herein shall have the meaning given such terms in the Equipment
Utilization Agreement, dated June 4, 2012 (the “EUA”), which has been executed
by Indemnitors and Agent.

WHEREAS Great Lakes Dredge & Dock Corporation (“Great Lakes”), Great Lakes
Dredge & Dock Company, LLC, Lydon Dredging & Construction Company, Ltd.,
Fifty-Three Dredging Corporation, Dawson Marine Services Company, Great Lakes
Dredge & Dock Environmental, Inc. (f/k/a Great Lakes Caribbean Dredging, Inc.),
NASDI, LLC, NASDI Holdings Corporation, Yankee Environmental Services, LLC and
Great Lakes Dredge & Dock (Bahamas) Ltd.(collectively, the “Indemnitors”) may
provide Agent a mortgage on certain equipment of Indemnitors (the “Collateral
Equipment”) and a right to attach and perfect a security interest in the
Collateral Equipment, in connection with that certain Credit Agreement, dated as
of June 4, 2012, among Great Lakes, certain subsidiaries of Great Lakes party
thereto, as Credit Parties, Agent and the other lenders party thereto from time
to time (as amended, restated, supplemented, refinanced or replaced from time to
time, the “Lender Credit Agreement”); and

WHEREAS Indemnitors have provided Surety with a security interest in the
Collateral Equipment (among other interests, rights and remedies) pursuant to
the terms of, and as defined in, the General Agreement of Indemnity, dated
September 7, 2011 (the “GIA”); and

WHEREAS Agent and Indemnitors have provided Surety a priority right to access
and use the Collateral Equipment pursuant to the terms of the EUA; and

WHEREAS Agent desires for Surety to agree with Agent in advance on the priority
of their respective mortgages, security interests and liens with respect to the
Collateral Equipment in the event such mortgages security interests and liens
are created or perfected; and

WHEREAS Surety is willing to agree to the priority of Surety’s and Agent’s
respective mortgages, security interests and liens with respect to the
Collateral Equipment, in exchange for Surety’s being granted a second mortgage
on the Collateral Equipment.

 

Great Lakes Lender-Surety Priority Agreement    page 1 of 9

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NOW THEREFORE, for good and valuable consideration, the sufficiency of which is
hereby acknowledged, Agent and Surety agree as follows:

1. Collateral Equipment: The Collateral Equipment to which this Agreement
applies is defined as the equipment listed on Exhibit A SCHEDULE OF COLLATERAL
EQUIPMENT which is attached to this Agreement and incorporated herein by
reference, as may be modified as provided herein. This Agreement does not apply
to any other machinery, plant, equipment or other property of Indemnitors.

2. Surety Mortgage: Surety agrees that it will not perfect or file mortgages
with respect to any of the Collateral Equipment, unless and until it shall have
first provided Agent with 60 days written notice.

3. Priorities: Agent and Surety acknowledge and agree that the other may perfect
a security interest in the Collateral Equipment. With respect to Agent’s and
Surety’s mortgages, security interests and liens in the Collateral Equipment,
Agent and Surety agree that as between Agent and Surety, Agent’s mortgage,
security interests and liens in the Collateral Equipment shall be senior and
prior in right to Surety’s mortgages, security interests and liens in the
Collateral Equipment, and Surety’s mortgages, security interests and liens shall
be junior to Agent’s mortgages, security interests and liens, notwithstanding
the order, manner or timing of attachment or perfection of any such mortgages,
security interests or liens or the validity, enforceability, perfection or
unavoidability thereof or any failure by Agent or the Surety to take any action
to attach or perfect such security interests or liens.

4. No Challenge: Agent and Surety agree not to institute or join in any legal
action challenging the validity, enforceability, perfection or unavoidability of
their respective mortgages, security interests or liens with respect to the
Collateral Equipment.

5. Right to Enforce and Transfer; Release: Agent and Surety agree that the other
party may take action to enforce that party’s rights and interest in the
Collateral Equipment, including any rights which may result in the transfer of
such Collateral Equipment to third parties, provided that a) the enforcing party
provides prior written notice to the other party of the enforcing party’s
foreclosure or similar disposition of any such Collateral Equipment; b) any such
exercise and enforcement or other disposition by Agent of any Collateral
Equipment shall be subject to and shall not interfere with Surety’s continuing
rights and interests and priority access and use under and pursuant to the terms
of the EUA. In the event of any transfer of such Collateral Equipment to third
parties by the Agent in connection with an enforcement by the Agent or in
connection with a consensual disposition and, in any such event pursuant to
which the Agent shall release its mortgages, security interests or liens with
respect to such Collateral Equipment, Surety shall promptly release its
mortgages, security interests and liens on such Collateral Equipment, provided
that Surety’s mortgages, security interests and liens shall remain on the
proceeds of such Collateral Equipment, subject to the relative priorities set
forth in section 3 above. Surety hereby authorizes Agent to effect such lien
releases on behalf of Surety and to execute and deliver all instruments to
effect such release of Surety’s mortgages, security interests and liens (which
authorization being coupled with an interest, is irrevocable).

6. Modification of Exhibit A. Exhibit A may be modified by a Rider to this
Agreement upon written notice by Agent to Surety at any time.

 

Great Lakes Lender-Surety Priority Agreement    page 2 of 9

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7. Collateral Proceeds: If any Collateral proceeds (including, without
limitation, insurance proceeds or distributions pursuant to any plan of
reorganization or other insolvency proceeding with respect to any Indemnitor)
are received by Surety with respect to the Collateral Equipment, Surety shall
receive and hold such proceeds on behalf of the other party and shall promptly
pay or transfer such proceeds to the other party, with any necessary
endorsements. To the extent that there are any excess proceeds from the
Collateral Equipment which may be held by Agent following satisfaction in full
of the Indemnitor’s obligations to Agent and the lenders party to the Lender
Credit Agreement and the termination of the commitments under the Lender Credit
Agreement, Agent shall promptly pay or transfer such proceeds to Surety, with
any necessary endorsements.

8. No Prohibition: Neither Agent nor Surety shall enter into any agreement with
any Indemnitor prohibiting such Indemnitor from granting mortgages on, security
interests in, or liens on, any Collateral Equipment to secure the obligations of
such Indemnitor either to Agent and the lenders in connection with the Lender
Credit Agreement or to Surety in connection with the GIA or the EUA.

9. No Impact on Rights and Remedies other than to the Collateral Equipment:
Notwithstanding the respective priorities of security interests and liens above,
nothing in this Agreement is intended to or does waive, release, limit,
condition or otherwise affect the Surety’s rights and remedies under the EUA
and/or the GIA, at law or in equity, other than as stated in this Agreement with
respect to the Collateral Equipment, or Agent’s or any lender’s rights and
remedies under and with respect to the Lender Credit Agreement with respect to
the Collateral Equipment.

10. No impact on Surety’s priority use of the Collateral Equipment:
Notwithstanding the respective priorities of security interests and liens above,
nothing in this Agreement is intended to waive, release, limit, condition or
otherwise affect the Surety’s priority access and use of the Collateral
Equipment to perform Surety’s Bonded Obligations, in accordance with the EUA.

 

11. Notice: All Notices or requests under this Agreement shall be sent as
follows:

Zurich American Insurance Company

Attn: Vice President, Surety Underwriting

600 Red Brook Blvd., 4th Floor

Owings Mills, MD 21117

with a copy to thomas.littlefield@zurichna.com

Wells Fargo Bank, National Association

Attn: Sushim Shah, Vice President – Global Banking

1000 Louisiana Street, Suite 400

Houston, TX 77002-5027

Email: Sushim.Shah@wellsfargo.com

12. This Agreement shall inure to the benefit of and be binding on the parties
executing this Agreement, the parties acknowledging this Agreement, and their
successors and assigns, including, without limitation, following the
commencement of any bankruptcy or other insolvency proceeding with respect to
any Indemnitor or any Collateral Equipment

 

Great Lakes Lender-Surety Priority Agreement    page 3 of 9

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13. This Agreement may not be amended or altered in any way except in writing
executed by the parties to this Agreement.

14. This Agreement may be executed in any number of counterparts with separate
signature pages, all of which taken together shall constitute the Agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart. Delivery of any executed signature page to this Agreement by
telecopier or pdf attachment to an email shall be equally effective as delivery
of a manually executed original.

15. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to its conflicts of laws
principles.

SIGNATURE PAGES TO FOLLOW

(The remainder of this page is intentionally left blank)

 

Great Lakes Lender-Surety Priority Agreement    page 4 of 9

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Signed and sealed this 4th day of June, 2012

Each of the undersigned hereby affirms to the Surety that he or she is a
secretary or a duly authorized officer, manager, trustee or official of the
business entity for which he or she executes the foregoing Agreement. In such
capacity the undersigned is familiar with all of the documents which establish
the rights which govern the affairs, power and authority of such entity
including, to the extent applicable, the (1) certificate or articles of
incorporation, (2) bylaws, (3) corporate resolutions, (4) trust agreements and
(5) partnership, and operating or limited liability agreements of such business
entity. Having reviewed all such applicable documents and instruments and such
other facts as deemed appropriate, the undersigned hereby affirms that such
entity has the power and authority to enter into such Agreement and that he or
she is duly authorized to do so.

 

   AGENT ATTEST OR WITNESS:    WELLS FARGO BANK, N.A.    /s/ Alice Libis    /s/
Sushim Shah

 

  

 

Name and Title    Sushim Shah, Vice President

Alice Libis, AVP

      SURETY ATTEST OR WITNESS:    Zurich American Insurance Company /s/ Mary
Cacioppo    /s/ Patrick A. Hannigan

 

  

 

Name and Title    Patrick A. Hannigan, Senior Regional Vice President

Senior Underwriter Assistant

  

Lender-Surety Agreement acknowledged by:

 

   INDEMNITOR ATTEST OR WITNESS:    GREAT LAKES DREDGE & DOCK CORPORATION /s/
Kathleen M. LaVoy    /s/ Bruce J. Biemeck(SEAL)

 

  

 

Name and Title    Bruce J. Biemeck, President and Chief Financial Officer

Chief Legal Officer

  

(Signatures continued next page)

 

Great Lakes Lender-Surety Priority Agreement    page 5 of 9

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   INDEMNITOR ATTEST OR WITNESS:    GREAT LAKES DREDGE & DOCK COMPANY, LLC   
/s/ Kathleen M. LaVoy    /s/ Bruce J. Biemeck(SEAL)

 

  

 

Name and Title    Bruce J. Biemeck, President and Chief Financial Officer

Chief Legal Officer

  

 

   INDEMNITOR ATTEST OR WITNESS:    LYDON DREDGING & CONSTRUCTION COMPANY, LTD.
   /s/ Kathleen M. LaVoy    /s/ Bruce J. Biemeck(SEAL)

 

  

 

Name and Title

Chief Legal Officer

   Bruce J. Biemeck, Executive Vice President and Chief Operating Officer

 

   INDEMNITOR ATTEST OR WITNESS:    FIFTY-THREE DREDGING CORPORATION    /s/
Kathleen M. LaVoy    /s/ Paul E. Dinquel(SEAL)

 

  

 

Name and Title    Paul E. Dinquel, Vice President

Chief Legal Officer

  

 

   INDEMNITOR ATTEST OR WITNESS:    DAWSON MARINE SERVICES COMPANY    /s/
Kathleen M. LaVoy    /s/ Catherine Hoffman(SEAL)

 

  

 

Name and Title    Catherine Hoffman, President

Chief Legal Officer

  

(Signatures continued next page)

 

Great Lakes Lender-Surety Priority Agreement    page 6 of 9

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   INDEMNITOR ATTEST OR WITNESS:    GREAT LAKES DREDGE & DOCK ENVIRONMENTAL,
INC. (f/k/a Great Lakes Caribbean Dredging, Inc.)    /s/ Kathleen M. LaVoy   
/s/ Bruce J. Biemeck(SEAL)

 

  

 

Name and Title

Chief Legal Officer

   Bruce J. Biemeck, Senior Vice President and Chief Financial Officer

 

   INDEMNITOR ATTEST OR WITNESS:    NASDI, LLC    /s/ Kathleen M. LaVoy    /s/
Bruce J. Biemeck(SEAL)

 

  

 

Name and Title    Bruce J. Biemeck, Vice President

Chief Legal Officer

  

 

   INDEMNITOR ATTEST OR WITNESS:    NASDI HOLDINGS CORPORATION    /s/ Kathleen
M. LaVoy    /s/ Bruce J. Biemeck(SEAL)

 

  

 

Name and Title

Chief Legal Officer

   Bruce J. Biemeck, Vice President and Chief Financial Officer

 

   INDEMNITOR ATTEST OR WITNESS:    YANKEE ENVIRONMENTAL SERVICES, LLC    /s/
Kathleen M. LaVoy    /s/ Bruce J. Biemeck(SEAL)

 

  

 

Name and Title

Chief Legal Officer

   Bruce J. Biemeck, Vice President and Chief Financial Officer

(Signatures continued next page)

 

Great Lakes Lender-Surety Priority Agreement    page 7 of 9

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    INDEMNITOR ATTEST OR WITNESS:     GREAT LAKES DREDGE & DOCK (BAHAMAS) LTD.  
  /s/ Kathleen M. LaVoy     /s/ Bruce J. Biemeck(SEAL) Name and Title     Bruce
J. Biemeck, Vice President

Chief Legal Officer

   

(Exhibit follows)

 

Great Lakes Lender-Surety Priority Agreement    page 8 of 9

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EXHIBIT A

SCHEDULE OF COLLATERAL EQUIPMENT

 

NAME OF VESSEL

  

OFFICIAL NUMBER

JESSIE

   273722

ALASKA

   283416

G.L. 51

   288765

PONTCHARTRAIN

   290028

CALIFORNIA

   292779

BUSTER

   504442

FLORIDA

   506446

G.L. 141

   538934

CAROLINA

   552707

GL-54

   560225

NO. 53

   566581

ILLINOIS

   580274

JACK

   605280

DODGE ISLAND

   625348

TEXAS

   627368

PADRE ISLAND

   639291

OHIO

   644880

G.L. 184

   652202

UNLOADER NO. 2

   667652

APACHE

   668642

KEY WEST

   684596

G.L. 55

   1101368

G.L. 142

   1139322

GL-66

   1151814

MANHATTAN ISLAND

   2694 (RMI Flag)

SUGAR ISLAND

   2695 (RMI Flag)

NOON ISLAND

   3097 (RMI Flag)

REEM ISLAND

   3098 (RMI Flag)

 

Great Lakes Lender-Surety Priority Agreement    page 9 of 9