Document:

ex10-6.htm

Exhibit 10.6

 

 

INTERCREDITOR AGREEMENT

 

This INTERCREDITOR AGREEMENT, dated as of December 20, 2012 (as amended, restated, renewed, extended, supplemented or otherwise modified from time to time this “Agreement”), is entered into by and among (1) EDGEN MURRAY CORPORATION, a Nevada corporation (“US Borrower”), (2) BOURLAND & LEVERICH SUPPLY CO. LLC, a Delaware limited liability company (“Additional US Borrower”), (3) EDGEN GROUP, INC., a Delaware corporation (“Parent”), (4) EDG HOLDCO LLC, a Delaware limited liability company (“EDG Holdco”), (5) EM HOLDINGS LLC, a Delaware limited liability company (“Holdings”), (6) BANK OF AMERICA, N.A., in its capacity as administrative agent and U.S. collateral agent for the Revolving Credit Obligations (“US Revolving Credit Collateral Agent”), (7) THE BANK OF NEW YORK MELLON TRUST COMPANY, N. A. in its capacity as collateral agent for the Notes Obligations (as defined below) (including its successors and assigns from time to time, “Notes Collateral Agent”), and (8) the other Persons party hereto from time to time.  Capitalized terms used in this Agreement have the meanings assigned to them in Section 1 below.

RECITALS

 

A.           The Borrowers, the Revolving Credit Guarantors, the Revolving Credit Lenders and the Revolving Credit Collateral Agents have entered into a Loan, Security and Guarantee Agreement, dated as of December 20, 2012, providing for revolving credit facilities (as amended, restated, supplemented, modified, replaced or refinanced from time to time, the “Revolving Credit Agreement”);

 

B.           The US Borrower, the Additional US Borrower, Parent, EDG Holdco, Holdings and The Bank of New York Mellon Trust Company, N.A., as trustee (in such capacity, including its successors and assigns from time to time, the “Notes Trustee”)  have entered into an Indenture, dated as of October 16, 2012 (the “Indenture”), governing the US Borrower’s 8.75% Senior Secured Notes due 2020 (the “Notes”) issued thereunder;

 

C.           All or portions of the obligations of (i) the Borrowers, Parent, EDG Holdco, Holdings, certain Domestic Subsidiaries of Parent and certain Foreign Subsidiaries of Parent (the “Non-US Guarantors”) under the Revolving Credit Agreement, any Banking Services Agreements and any Hedge Agreements to the Revolving Credit Claimholders are secured by Liens (as defined below) on the Revolving Credit Primary Collateral (as defined below) of the US Borrower, the Additional US Borrower and Revolving Credit Guarantors and on certain additional assets of the Non-US Borrowers and the Non-US Guarantors, and (ii) the US Borrower, the Additional US Borrower, Parent, EDG Holdco, Holdings and any other US Subsidiary Guarantor under the Indenture are secured by Liens (as defined below) on substantially all of the assets of the US Borrower, the Additional US Borrower, Parent, EDG Holdco, Holdings and any other US Subsidiary Guarantor;

 

D.           Pursuant to (i) the Revolving Credit Agreement, the Borrowers and the Revolving Credit Guarantors have guaranteed all or portions of the Revolving Credit Obligations (the “Revolving Credit Guaranty”); (ii) the Revolving Credit Agreement, the Borrowers and the Revolving Credit Guarantors have agreed to cause certain future Domestic Subsidiaries and certain future Foreign Subsidiaries to guaranty all or portions of the Revolving Credit Obligations pursuant to the Revolving Credit Guaranty; (iii) the Indenture, Parent, EDG Holdco, Holdings and the Additional US Borrower have guaranteed the Notes Obligations (the “Notes Guarantees”); and (iv) the Indenture, Holdings has caused its Domestic Guarantor Subsidiaries, and has agreed to cause its future Domestic Guarantor Subsidiaries (collectively, the “US Subsidiary Guarantors” and together with Parent, EDG Holdco and Holdings, the “US Guarantors”), to guaranty the Notes Obligations pursuant to the Notes Guarantees;

 

  

 

  

 

E.            In order to induce (i) the Revolving Credit Claimholders to enter into the Revolving Credit Agreement and to make Loans and other extensions of credit thereunder, to provide Banking Services and to enter into Hedge Agreements and (ii) the Notes Collateral Agent and the Notes Claimholders to enter into the Notes Documents, as applicable, and the initial Holders to acquire the Notes, the US Revolving Credit Collateral Agent, on behalf of the Revolving Credit Claimholders, and the Notes Collateral Agent, on behalf of the Notes Claimholders, have agreed to the relative priority of their respective Liens on the Collateral and certain other rights, priorities and interests as set forth in this Agreement; and

 

F.            This Agreement is intended to allocate certain rights, benefits and priorities in the Revolving Credit Primary Collateral of the US Borrower, the Additional US Borrower and any US Guarantor or any other Collateral of the US Borrower, the Additional US Borrower and any US Guarantor between the US Revolving Credit Collateral Agent and the Revolving Credit Claimholders on the one hand and the Notes Collateral Agent and the Notes Claimholders on the other hand.

 

AGREEMENT

 

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:

 

“Access Period” means with respect to each parcel of Real Estate Assets, the period, after the commencement of an Enforcement Period, which begins, with respect to such parcel of Real Estate Assets, on the day that the US Revolving Credit Collateral Agent provides the Notes Collateral Agent with the notice of its election to request access with respect to such parcel of Real Estate Assets pursuant to Section 3.2(b) below and ends on the earliest of (i) the 180th day after the US Revolving Credit Collateral Agent obtains the ability to use, take physical possession of, remove or otherwise control the use or access to the Revolving Credit Primary Collateral located on such Real Estate Asset following Enforcement plus such number of days, if any, after the US Revolving Credit Collateral Agent obtains access to such Revolving Credit Primary Collateral that it is stayed or otherwise prohibited by law or court order from exercising remedies with respect to Revolving Credit Primary Collateral located on such Real Estate Asset, (ii) the date on which all or substantially all of the Revolving Credit Primary Collateral located on such Real Estate Asset is sold or liquidated, or (iii) the date on which the Discharge of Revolving Credit Obligations occurs.

 

“Accounts” means all now present and future “accounts” and “payment intangibles” (in each case, as defined in Article 9 of the UCC).

 

“Account Agreements” means any lockbox account agreement, pledged account agreement, blocked account agreement, securities account control agreement, armored car agreement, credit card processing agreement or any similar deposit or securities account agreements among the Notes Collateral Agent and/or the US Revolving Credit Collateral Agent and a Grantor and the relevant service provider, financial institution depository or securities intermediary.

 

  

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“Additional US Borrower” has the meaning assigned to such term in the Preamble to this Agreement and includes any other Domestic Subsidiary of Parent added as a “U.S. Borrower” under the Revolving Credit Agreement after the date hereof.

 

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, controls or is controlled by or under common control with such specified Person.  For purposes of this definition, “control,” as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling,” “controlled by” and “under common control with” have correlative meanings.

 

“Agents” means the US Revolving Credit Collateral Agent and the Notes Collateral Agent.

 

“Agreement” has the meaning assigned to such term in the Preamble to this Agreement.

 

“Banking Services” means each and any of the following bank services provided to any Grantor by any Revolving Credit Lender or any of its Affiliates:

 

(a)           commercial credit cards;

 

(b)           stored value cards; and

 

(c)           treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts, and interstate or foreign depository network services).

 

“Banking Services Agreement” means any agreement that evidences any Banking Services Obligations.

 

“Banking Services Obligations” means any and all obligations of the Grantors, or any of them, whether absolute or contingent and howsoever and whensoever created, rising, evidenced, or acquired (including all renewals, extensions, modifications thereof, and substitutions therefore) in connection with Banking Services.

 

“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 in any applicable jurisdiction.

 

“Board of Directors” shall mean, with respect to any Person, (i) in the case of any corporation, the board of directors of such Person, (ii) in the case of any limited liability company, the board of managers of such Person, (iii) in the case of any partnership, the board of directors of the general partner of such Person and (iv) in any other case, the functional equivalent of the foregoing.

 

  

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“Borrowers” means the US Borrower, the Additional US Borrower and the Non-US Borrowers.

 

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

 

“Canadian Borrower” means Edgen Murray Canada Inc., an Alberta company.

 

“Canadian Revolving Credit Collateral Agent” means Bank of America, N.A., and any of its successors or assigns from time to time.

 

“Capital Stock” means:

 

(a)           in the case of a corporation, corporate stock;

 

(b)           in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

 

(c)           in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests;

 

(d)           any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person; and

 

(e)           any warrants, options or other rights to acquire any of the foregoing; but

 

excluding from all of the foregoing interests any debt securities which are convertible into or exchangeable for any of the foregoing equity interests, whether or not such debt securities include any right of participation with Capital Stock.

 

“Capital Stock Collateral” means:

 

(a)           all of the Capital Stock in the US Borrower and the Additional US Borrower;

 

(b)           all of the Capital Stock in any Restricted Subsidiary which is directly owned by Holdings, the US Borrower or any US Subsidiary Guarantor; provided that in the case of any first-tier Foreign Subsidiary, the Capital Stock Collateral shall be limited to 65% of the Voting Stock of such Foreign Subsidiary;

 

(c)           Records, “supporting obligations” (as defined in Article 9 of the UCC) and related Letters of Credit, commercial tort claims or other claims and causes of action, in each case, to the extent directly related to the foregoing; provided however, in the event that any such Records, “supporting obligations” and related Letters of Credit, commercial tort claims or other claims and causes of action directly relate to both the Revolving Credit Primary Collateral and the Notes Collateral, then only those which primarily relate to the Notes Collateral, shall be included in this definition; and

 

(d)           substitutions, replacements, accessions, products and proceeds (including, without limitation, insurance proceeds, licenses, royalties, income, payments, claims, damages and proceeds of suit) of any or all of the foregoing.

 

  

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“Chattel Paper” means all now present and future “chattel paper” (as defined in Article 9 of the UCC).

 

“Claimholders” means the Revolving Credit Claimholders and the Notes Claimholders.

 

“Collateral” means all of the assets and property of any Grantor, whether real, personal or mixed that is subject to a security interest in favor of the US Revolving Credit Collateral Agent or the Notes Collateral Agent and constitutes either Revolving Credit Collateral or Notes Collateral.  For the avoidance of doubt, Collateral does not include any assets or property of any Non-US Borrower, any Foreign Subsidiary of Holdings or the US Borrower or any Domestic Subsidiary, directly or indirectly, owned by any Foreign Subsidiary or any Excluded Property as defined in the applicable Security Documents.

 

“Copyright Licenses” means any and all present and future agreements (whether or not in writing) providing for the granting of any right in, to or under Copyrights (whether the applicable Grantor is licensee or licensor thereunder).

 

“Copyrights” means, collectively, with respect to each Grantor, all copyrights (whether statutory or common law, whether established or registered in the United States or any other country or any political subdivision thereof, whether registered or unregistered, whether published or unpublished and, in each case, whether owned by or licensed to such Grantor) and all copyright registrations and applications made by such Grantor, in each case, whether now owned or hereafter created or acquired by or assigned to such Grantor, and all goodwill associated therewith, now existing or hereafter adopted or acquired, together with any and all (i) rights and privileges arising under applicable law with respect to such Grantor’s use of such copyrights, (ii) reissues, renewals, continuations and extensions thereof and amendments thereto, (iii) income, fees, royalties, damages, claims and payments now or hereafter due and/or payable with respect thereto, including damages and payments for past, present or future infringements thereof, (iv) rights corresponding thereto throughout the world and (v) rights to sue for past, present or future infringements thereof.

 

“Deposit Accounts” means all now present and future “deposit accounts” (as defined in Article 9 of the UCC).

 

“DIP Financing” has the meaning assigned to that term in Section 6.1.

 

“DIP Financing Cap Amount” means an aggregate amount of $50,000,000.

 

“Discharge of Notes Obligations” means, except to the extent otherwise expressly provided in Section 5.5, either:

 

(a)           the US Borrower exercises its legal defeasance option or covenant defeasance option in accordance with the terms of the Indenture; or

 

(b)           the satisfaction and discharge of all Notes Obligations in accordance with the terms of the Indenture.

 

If a Discharge of Notes Obligations occurs prior to the termination of this Agreement in accordance with Section 8.2, to the extent that additional Notes are issued or incurred or the Notes Obligations are reinstated in accordance with Section 6.4, the Discharge of Notes Obligations shall (effective upon the incurrence or issuance of such additional Notes or the reinstatement of such Notes Obligations, as applicable) be deemed to no longer be effective.

 

  

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“Discharge of Revolving Credit Obligations” means, except to the extent otherwise expressly provided in Section 5.5:

 

(a)           termination or expiration of all commitments, if any, to extend credit that would constitute Revolving Credit Obligations;

 

(b)           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), on all Indebtedness outstanding under the Revolving Credit Documents and constituting Revolving Credit Obligations;

 

(c)           payment in full in cash of all Hedging Obligations and all Banking Services Obligations constituting Revolving Credit Obligations and the expiration or termination of all outstanding transactions under Hedge Agreements and all Banking Services Agreements included in the Revolving Credit Obligations or the cash collateralization of all such Hedging Obligations and Banking Services Obligations on terms satisfactory to each applicable counterparty;

 

(d)           termination or cash collateralization (in an amount and manner reasonably satisfactory to any Revolving Credit Collateral Agent, but in no event greater than 105% of the aggregate undrawn face amount plus a reasonable reserve amount to protect any Revolving Credit Collateral Agent for potential expenses in respect of any letters of credit that are not terminated) of all letters of credit issued under the Revolving Credit Documents and constituting Revolving Credit Obligations; and

 

(e)           payment in full in cash of all other Revolving Credit Obligations that are outstanding and unpaid at the time the Indebtedness constituting the Revolving Credit Obligations is paid in full in cash (other than any obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities in respect of which no claim or demand for payment has been made at such time).

 

If a Discharge of Revolving Credit Obligations occurs prior to the termination of this Agreement in accordance with Section 8.2, to the extent that additional Revolving Credit Obligations are incurred or Revolving Credit Obligations are reinstated in accordance with Section 6.4, the Discharge of Revolving Credit Obligations shall (effective upon the incurrence of such additional Revolving Credit Obligations or reinstatement of the Revolving Credit Obligations, as applicable) be deemed to no longer be effective.

 

“Disposition” has the meaning assigned to that term in Section 5.1(b).

 

“Domestic” means, as to any Person, a Person which is created or organized under the laws of the United States of America, any of its states or the District of Columbia.

 

“Domestic Guarantor Subsidiary” means any Domestic Subsidiary of Holdings (other than US Borrower) that is a Significant Subsidiary; provided that Holdings holds, directly or indirectly, at least 80% of the Capital Stock of such Domestic Subsidiary and such Domestic Subsidiary is not, directly or indirectly, owned by any Restricted Subsidiary of Holdings that is a Foreign Subsidiary.

 

  

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“EDG Holdco” has the meaning assigned to such term in the Preamble to this Agreement.

 

“Enforcement” means, for one or both of the US Revolving Credit Collateral Agent and the Notes Collateral Agent, when a Revolving Credit Default or a Notes Default, as the case may be, has occurred and is continuing, any action taken by such Person to repossess, or exercise any remedies with respect to, any material amount of Collateral or commence the judicial enforcement of any of the rights and remedies with respect to any Collateral under the Revolving Credit Documents, the Notes Documents or under any applicable law, but in all cases excluding (i) the demand of the repayment of all the principal amount of any of the Obligations, (ii) the imposition of a default rate or late fee (including any additional interest in respect of Notes Obligations) and (iii) the collection and application of, or the delivery of any activation notice with respect to, Accounts or other monies deposited from time to time in Deposit Accounts or Securities Accounts, in each case other than the Net Cash Proceeds Account, against the Revolving Credit Obligations pursuant to the Revolving Credit Documents.

 

“Enforcement Notice” means a written notice delivered, at a time when a Revolving Credit Default or Notes Default, as the case may be, has occurred and is continuing, by the US Revolving Credit Collateral Agent or the Notes Collateral Agent to the other Agent announcing that an Enforcement Period has commenced and specifying the relevant event of default.

 

“Enforcement Period” means the period of time following the receipt by either the US Revolving Credit Collateral Agent or the Notes Collateral Agent, as applicable, of an Enforcement Notice from the other Agent until the first to occur of (i) in the case of an Enforcement Period commenced by the US Revolving Credit Collateral Agent, the Discharge of Revolving Credit Obligations, or, in the case of an Enforcement Period commenced by the Notes Collateral Agent, the Discharge of Notes Obligations, (ii) the US Revolving Credit Collateral Agent or the Notes Collateral Agent (as applicable) agrees in writing to terminate the Enforcement Period or (iii) the date on which the Revolving Credit Default or the Notes Default that was the subject of the Enforcement Notice relating to such Enforcement Period has been cured to the satisfaction of the US Revolving Credit Collateral Agent or the Notes Collateral Agent, as applicable, or waived in writing in accordance with the terms of the Revolving Credit Agreement or the Indenture, as applicable.

 

“Equipment” means: (i) all “equipment” (as defined in Article 9 of the UCC), (ii) all trade-fixtures, sales displays, lighting, shelving, signage and “fixtures” (as defined in Article 9 of the UCC) and (iii) all accessions or additions thereto, all parts thereof, whether or not at any time of determination incorporated or installed therein or attached thereto, and all replacements therefore, wherever located and whether now or hereafter existing.

 

“Foreign Subsidiary” means each Subsidiary that is not a Domestic Subsidiary.

 

“General Intangibles” means all present and future “general intangibles” (as defined in Article 9 of the UCC), but excluding “payment intangibles” (as defined in Article 9 of the UCC), Hedge Agreements, Banking Services Agreements, and Intellectual Property and any rights thereunder.

 

  

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“Grantors” means the US Borrower, the Additional US Borrower, Parent, each US Guarantor and each other Domestic Subsidiary of Parent (other than any Domestic Subsidiary, directly or indirectly, owned by any Foreign Subsidiary) that has or may from time to time hereafter execute and deliver a Security Document granting a Lien or other interest in its property to secure any of the Obligations.

 

“Hedge Agreement” means any swap, cap, collar, forward purchase or similar agreements or arrangements dealing with interest rates, currency exchange rates or commodity prices, either generally or under specific contingencies entered into for the purposes of hedging the Borrowers’ and their Subsidiaries’ exposure to interest or exchange rates, loan credit exchanges, security or currency valuations or commodity prices not for speculative purposes, in each case entered into with a Revolving Credit Lender Counterparty.

 

“Hedging Obligation” of any Person means any Obligation of such Person pursuant to any Hedge Agreement.

 

“Holders” has the meaning assigned to such term in the Indenture.

 

“Holdings” has the meaning assigned to such term in the Preamble to this Agreement.

 

“Indebtedness” means and includes all Obligations that constitute “Loans” within the meaning of the Revolving Credit Agreement and all Notes Obligations.

 

“Indenture” has the meaning assigned to such term in the Recitals to this Agreement, as amended, restated, supplemented, modified, replaced or refinanced from time to time.

 

“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 its 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.

 

“Instruments” means all now present and future “instruments” (as defined in Article 9 of the UCC).

 

“Intellectual Property” means, collectively, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and the Trademark Licenses.

 

“Inventory” means all present and future “inventory” (as defined in Article 9 of the UCC) and, in any event, includes, without limitation, all goods held for sale or lease or to be furnished under contracts of service or so leased or furnished, all raw materials, work in process, finished goods, and materials used or consumed in the manufacture, packing, shipping, advertising, selling, leasing, furnishing or production of such inventory or otherwise used or consumed in any Grantor's business; the purchaser’s interest in any goods being manufactured pursuant to any contract or other arrangement with a supplier, all goods in transit from suppliers (whether or not evidenced by a document of title) and all goods in which any Grantor has an interest in mass or a joint or other interest or right of any kind; and all goods which are returned to or repossessed by any Grantor, all computer programs embedded in any goods and all accessions thereto and products thereof (in each case, regardless of whether characterized as inventory under the UCC).

 

  

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“Investment Property” means all “investment property” (as such term is defined in Section 9-102(a)(49) of the New York UCC).

 

“Letter of Credit” means any present and future “letter of credit” (as defined in Article 5 of the UCC).

 

“Letter of Credit Rights” means any “letter-of-credit right” (as defined in Article 9 of the UCC).

 

“Lien” means, with respect to any property, (a) any mortgage, deed of trust, lien, pledge, claim, charge, assignment, hypothecation, security interest or encumbrance of any kind or any arrangement to provide priority or preference or any filing of any financing statement or any financing change statement under the UCC or any other similar notice of lien under any similar notice or recording statute of any governmental authority, including any easement, right-of-way or other encumbrance on title to real property, in each of the foregoing cases whether voluntary or imposed by law, and any agreement to give any of the foregoing; (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such property; and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

 

“Mortgaged Premises” means any real property which shall now or hereafter be subject to a Notes Mortgage.

 

“Net Cash Proceeds Account” means any Deposit Account or Securities Account that is (i) established by any Grantor, (ii) subject to the control (within the meaning of Section 9-104 of the New York UCC) of the Notes Collateral Agent and (iii) free and clear of all other Liens and which account contains only (a) proceeds of the sale of any Notes Collateral, (b) proceeds of Notes Collateral arising from any Recovery Event (as such term is defined in the Indenture), (c) proceeds of foreclosures or other sales of Notes Collateral, (d) proceeds of the issuance of any Notes after the date hereof and (e) any other awards or proceeds pursuant to the Notes Collateral Documents including earnings, revenues, rents, issues, profits and income from the Notes Collateral received pursuant to the Notes Collateral Documents, in each case for which a Net Cash Proceeds Letter of Credit has not been issued.

 

“Net Cash Proceeds Letter of Credit” means any letter of credit issued to the Notes Collateral Agent in lieu of depositing (a) proceeds of the sale of any Notes Collateral, (b) proceeds of Notes Collateral arising from any Recovery Event (as such term is defined in the Indenture), (c) proceeds of foreclosures or other sales of Notes Collateral, (d) proceeds of the issuance of any Notes after the date hereof or (e) any other awards or proceeds pursuant to the Notes Collateral Documents including earnings, revenues, rents, issues, profits and income from the Notes Collateral received pursuant to the Notes Collateral Documents, in each case, into the Net Cash Proceeds Account.

 

  

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“New Agent” has the meaning assigned to that term in Section 5.5.

 

“New Debt Notice” has the meaning assigned to that term in Section 5.5.

 

“Non-US Borrowers” means the Canadian Borrower, the UK Borrower, the Singapore Borrower and any other Borrower (as such term is defined in the Revolving Credit Agreement) that is not a Domestic Person.

 

“Non-US Guarantors” has the meaning assigned to that term in the Recitals to this Agreement.

 

“Notes” has the meaning assigned to such term in the Recitals to this Agreement and includes any additional Notes issued after the date hereof.

 

“Notes Claimholders” means, at any relevant time, the holders of Notes Obligations at that time, including the Holders, the Notes Trustee and the Notes Collateral Agent, under the Notes Documents.

 

“Notes Collateral” means all now owned or hereafter acquired Collateral other than the Revolving Credit Primary Collateral, including, without limitation:

 

(a)          all Accounts, Chattel Paper and Instruments, in each case, solely to the extent relating to the sale of Notes Collateral described in clauses (b) through (f) of this definition;

 

(b)           all Equipment;

 

(c)           all Capital Stock Collateral;

 

(d)          all Real Estate Assets;

 

(e)           all Intellectual Property;

 

(f)           all Notes General Intangibles;

 

(g)          the Net Cash Proceeds Account;

 

(h)           all Records, “supporting obligations” (as defined in Article 9 of the UCC) and related Letters of Credit, commercial tort claims or other claims and causes of action, in each case, to the extent directly related to the foregoing; provided however, in the event that any such Records, “supporting obligations” and related Letters of Credit, commercial tort claims or other claims and causes of action directly relate to both the Revolving Credit Primary Collateral and the Notes Collateral, then only those which primarily relate to the Notes Collateral shall be included in this definition; and

 

(i)           substitutions, replacements, accessions, products and proceeds (including, without limitation, insurance proceeds, licenses, royalties, income, payments, claims, damages and proceeds of suit) of any or all of the foregoing;

 

  

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provided, however, that the term “Notes Collateral” shall include (as provided in Section 3.4 below) identifiable proceeds (including lease payments under leases of Equipment) of Notes Collateral that are deposited or held in any Deposit Accounts or Securities Accounts, in each case other than the Net Cash Proceeds Account, after an Enforcement Notice, except to the extent that the Notes Collateral Agent has been provided with a Net Cash Proceeds Letter of Credit, in connection with the receipt by any Grantor of, and in the amount of, such identifiable proceeds in which case the term “Notes Collateral” shall not include such identifiable proceeds.

 

“Notes Collateral Agent” has the meaning assigned to such term in the Preamble to this Agreement.

 

“Notes Collateral Documents” means the Indenture and the “Collateral Documents” as such term is defined in the Indenture, and any other agreement, document or instrument pursuant to which a Lien is granted securing any Notes Obligations or under which rights or remedies with respect to such Liens are governed.

 

“Notes Default” means an “Event of Default” as such term is defined in the Indenture.

 

“Notes Documents” means the Indenture, the Notes, any Registered Equivalent Notes, the Notes Collateral Documents and each of the other agreements, documents and instruments providing for or evidencing any other Notes Obligation, and any other document or instrument executed or delivered at any time in connection with any Notes Obligations, including any intercreditor, supplemental indenture or joinder agreement among holders of Notes Obligations, to the extent such are effective at the relevant time, as each may be amended, supplemented, refunded, deferred, restructured, replaced or refinanced from time to time in whole or in part (whether with the Notes Collateral Agent or other agents and lenders or otherwise), in each case in accordance with the provisions of this Agreement.

 

“Notes General Intangibles” means all General Intangibles pertaining to the other items of property included within clauses (a), (b), (c), (d) and (e) of the definition of Notes Collateral, including, without limitation, all contingent rights with respect to warranties on Equipment.

 

“Notes Guarantees” has the meaning assigned to such term in the Recitals to this Agreement.

 

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

 

“Notes Obligations” means the following:

 

(a)  All Obligations of the US Borrower and the US Guarantors under the Indenture, the Notes issued thereunder and the other Notes Documents.  The “Notes Obligations” shall include all Post-Petition Interest.

 

(b)  To the extent any payment with respect to any Notes Obligation (whether by or on behalf of any Grantor, as proceeds of security, enforcement of any right of setoff or otherwise) is declared to be a fraudulent conveyance or a preference in any respect, set aside or required to be paid to a debtor in possession, any Revolving Credit Claimholders, receiver or similar Person, then the Obligation or part thereof originally intended to be satisfied shall, for the purposes of this Agreement and the rights and obligations of the Notes Claimholders and the Revolving Credit Claimholders, be deemed to be reinstated and outstanding as if such payment had not occurred.  To the extent that any interest, fees, expenses or other charges (including, without limitation, Post-Petition Interest) to be paid pursuant to the Notes Documents are disallowed by order of any court, including, without limitation, by order of a court in any Insolvency or Liquidation Proceeding, such interest, fees, expenses and charges (including, without limitation, Post-Petition Interest) shall, as between the Notes Claimholders and the Revolving Credit Claimholders, be deemed to continue to accrue and be added to the amount to be calculated as the “Notes Obligations”.

 

  

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“Notes Trustee” has the meaning assigned to such term in the Recitals to this Agreement.

 

“Obligations” means all obligations of every nature of each Grantor from time to time owed to any agent or trustee, the Notes Claimholders, the Revolving Credit Claimholders or any of them or their respective Affiliates, in each case under the Notes Documents or the Revolving Credit Documents, whether for principal, interest or payments for early termination of Hedge Agreements, fees, expenses, indemnification or otherwise and all guarantees of any of the foregoing.

 

“Parent” has the meaning assigned to such term in the Preamble of this Agreement.

 

“Patent Licenses” means all present and future agreements providing for the granting of any right in or to Patents (whether the applicable Grantor is licensee or licensor thereunder).

 

“Patents” means, collectively, with respect to each Grantor, all letters patent issued or assigned to, and all patent applications and registrations made by, such Grantor (whether established or registered or recorded in the United States or any other country or any political subdivision thereof and, in each case, whether owned by or licensed to such Grantor), and all goodwill associated therewith, now existing or hereafter adopted or acquired, together with any and all (i) rights and privileges arising under applicable law with respect to such Grantor’s use of any patents, (ii) inventions and improvements described and claimed therein, (iii) reissues, divisions, continuations, renewals, extensions and continuations-in-part thereof and amendments thereto, and rights to obtain any of the foregoing, (iv) income, fees, royalties, damages, claims and payments now or hereafter due and/or payable thereunder and with respect thereto including damages and payments for past, present or future infringements thereof, (v) rights corresponding thereto throughout the world and (vi) rights to sue for past, present or future infringements thereof.

 

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

 

“Pledged Collateral” has the meaning set forth in Section 5.4.

 

“Post-Petition Interest” means all interest, fees, expenses and other charges that, pursuant to any of the Indenture, the Notes or the Revolving Credit Agreement, as applicable, continue to accrue after the commencement of any Insolvency or Liquidation Proceeding, whether or not such interest, fees, expenses and other charges are allowed or allowable under Bankruptcy Law or in any such Insolvency or Liquidation Proceeding.

 

  

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“Real Estate Asset” means, at any time of determination, any interest (fee, leasehold or otherwise) then owned by any Grantor in any real property, including, without limitation, Mortgaged Premises, distribution centers and warehouses and corporate headquarters and administrative offices.

 

“Records” means all now present and future “records” (as defined in Article 9 of the UCC).

 

“Recovery” has the meaning set forth in Section 6.4.

 

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

 

“Registered Equivalent Notes” means, with respect to any Notes originally issued in a private transaction not subject to the registration requirements of the Securities Act, substantially identical notes (having the same Notes Guarantees and Notes Collateral) issued in a dollar-for-dollar exchange therefor pursuant to an exchange offer registered with the SEC.

 

“Restricted Subsidiary” has the meaning assigned to such term in the Indenture.

 

“Revolving Commitments” means the “Commitments” as such term is defined in the Revolving Credit Agreement.

 

“Revolving Credit Agreement” has the meaning assigned to such term in the Recitals to this Agreement.

 

“Revolving Credit Cap Amount” means the greater of (a) $375,000,000 less the amount of all mandatory prepayments of any loans to the extent accompanied by a corresponding reduction in the applicable Revolving Commitments (excluding reductions in sub-facility commitments not accompanied by a corresponding reduction in the applicable Revolving Commitments) and (b) the Borrowing Base (as such term is defined in the Indenture as in effect on the date hereof).

 

“Revolving Credit Claimholders” means, at any relevant time, the holders of Revolving Credit Obligations at that time, including the Revolving Credit Lenders, the Revolving Credit Lender Counterparties and the Revolving Credit Collateral Agents, under the Revolving Credit Documents.

 

“Revolving Credit 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 Revolving Credit Obligations.

 

“Revolving Credit Collateral Agents” means the US Revolving Credit Collateral Agent, the UK Revolving Credit Collateral Agent, the Canadian Revolving Credit Collateral Agent and the Singapore Revolving Credit Collateral Agent.

 

“Revolving Credit Collateral Documents” means “Security Documents” as such term is defined in the Revolving Credit Agreement, and any other agreement, document or instrument pursuant to which a Lien is granted securing any Revolving Credit Obligations or under which rights or remedies with respect to such Liens are governed.

 

  

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“Revolving Credit Default” means an “Event of Default” as such term is defined in the Revolving Credit Agreement.

 

“Revolving Credit Documents” means (a) the Revolving Credit Agreement and the “Credit Documents” as such term is defined in the Revolving Credit Agreement and (b) each of the other agreements, documents and instruments providing for or evidencing any other Revolving Credit Obligation, and any other document or instrument executed or delivered at any time in connection with any Revolving Credit Obligations, including any intercreditor or joinder agreement among holders of Revolving Credit Obligations to the extent such are effective at the relevant time, as each may be amended, supplemented, refunded, deferred, restructured, replaced or refinanced from time to time in whole or in part (whether with any Revolving Credit Collateral Agent and the Revolving Credit Lenders or other agents and lenders or otherwise), in each case in accordance with the provisions of this Agreement.

 

“Revolving Credit Guarantors” means Parent, EDG Holdco, Holdings, the Non-US Guarantors and the direct and indirect Domestic Subsidiaries of Parent that have guaranteed all or a portion of the Revolving Credit Obligations.

 

“Revolving Credit Guaranty” has the meaning assigned to such term in the Recitals to this Agreement.

 

“Revolving Credit Lender Counterparty” means any Person who at the time such Hedge Agreement was entered into was a Revolving Credit Collateral Agent, a Revolving Credit Lender, or an Affiliate of any of the foregoing Persons.

 

“Revolving Credit Lenders” means the “Lenders” under and as defined in the Revolving Credit Documents.

“Revolving Credit Obligations” means, subject to clause (c) hereof, the following:

 

(a)           All Obligations, Hedging Obligations and Banking Services Obligations outstanding under the Revolving Credit Agreement and the other Revolving Credit Documents, including Hedge Agreements and Banking Services Agreements.  “Revolving Credit Obligations” shall include all Post-Petition Interest.

 

(b)           To the extent any payment with respect to any Revolving Credit Obligation (whether by or on behalf of any Grantor, as proceeds of security, enforcement of any right of setoff or otherwise) is declared to be a fraudulent conveyance or a preference in any respect, set aside or required to be paid to a debtor in possession, any Notes Claimholders, receiver or similar Person, then the Obligation or part thereof originally intended to be satisfied shall, for the purposes of this Agreement and the rights and obligations of the Revolving Credit Claimholders and the Notes Claimholders, be deemed to be reinstated and outstanding as if such payment had not occurred.  To the extent that any interest, fees, expenses or other charges (including, without limitation, Post-Petition Interest) to be paid pursuant to the Revolving Credit Documents are disallowed by order of any court, including, without limitation, by order of a court in any Insolvency or Liquidation Proceeding, such interest, fees, expenses and charges (including, without limitation, Post-Petition Interest) shall, as between the Revolving Credit Claimholders and the Notes Claimholders, be deemed to continue to accrue and be added to the amount to be calculated as the “Revolving Credit Obligations.”

 

  

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(c)           Notwithstanding the foregoing, if the sum of: (1) Loans (as defined in the Revolving Credit Agreement) constituting principal outstanding under the Revolving Credit Agreement and the other Revolving Credit Documents; plus (2) the aggregate face amount of any outstanding letters of credit issued under the Revolving Credit Agreement, is in excess of the Revolving Credit Cap Amount, then only that portion of such Loans (as defined in the Revolving Credit Agreement) and such aggregate face amount of letters of credit equal to the Revolving Credit Cap Amount shall be included in Revolving Credit Obligations and interest, fees and expenses with respect to such Loans (as defined in the Revolving Credit Agreement) and letters of credit shall only constitute Revolving Credit Obligations to the extent related to Loans (as defined in the Revolving Credit Agreement) and face amounts of letters of credit so included in the Revolving Credit Obligations.

 

“Revolving Credit Primary Collateral” means, with respect to any Grantor, all of the following now owned or hereafter acquired Collateral:

 

(a)           Accounts (except to the extent relating to the sale of Notes Collateral);

 

(b)           Chattel Paper (except to the extent relating to the sale of Notes Collateral);

 

(c)           Instruments (except to the extent relating to the sale of Notes Collateral);

 

(d)           Letters of Credit and Letter of Credit Rights (except to the extent relating to any Net Cash Proceeds Letter of Credit);

 

(e)           Deposit Accounts and Securities Accounts, in each case other than the Net Cash Proceeds Account, and all other Investment Property (other than Capital Stock Collateral), including all cash, checks and other evidences of payments, marketable securities, securities entitlements, financial assets and other funds held in or on deposit in any of the foregoing;

 

(f)            Inventory or documents of title, customs receipts, insurance certificates, shipping documents and other written materials related to the purchase or import of any Inventory;

 

(g)           General Intangibles (other than Intellectual Property and Notes General Intangibles) and all rights under Hedge Agreements and Banking Services Agreements;

 

(h)           Records, “supporting obligations” (as defined in Article 9 of the UCC) and related Letters of Credit, commercial tort claims or other claims and causes of action, in each case, to the extent directly related to the foregoing; provided however, in the event that any such Records, “supporting obligations” and related Letters of Credit, commercial tort claims or other claims and causes of action directly relate to both the Revolving Credit Primary Collateral and the Notes Collateral, then only those which primarily relate to the Revolving Credit Primary Collateral shall be included in this definition; and

 

(i)            substitutions, replacements, accessions, products and proceeds (including, without limitation, insurance proceeds, licenses, royalties, income, payments, claims, damages and proceeds of suit) of any or all of the foregoing;

 

  

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provided, however, that to the extent that identifiable proceeds (including lease payments under leases of Equipment) of Notes Collateral are deposited or held in any such Deposit Accounts or Securities Accounts, in each case other than the Net Cash Proceeds Account, after an Enforcement Notice, then (as provided in Section 3.4 below) such identifiable proceeds shall be treated as Notes Collateral, except to the extent that the Notes Collateral Agent has been provided with a Net Cash Proceeds Letter of Credit in connection with the receipt by any Grantor of, and in the amount of, such identifiable proceeds in which case the term “Notes Collateral” shall not include such identifiable proceeds.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Securities Exchange Commission promulgated thereunder.

 

“Securities Accounts” means all present and future “securities accounts” (as defined in Article 8 of the UCC), including all monies, “uncertificated securities,” and “securities entitlements” (as defined in Article 8 of the UCC) contained therein.

 

“Security Documents” means this Agreement, and all security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust, collateral agency agreements, control agreements or other grants or transfers for security executed and delivered by the US Borrower or any other Grantor creating (or purporting to create) a Lien upon Collateral in favor of the US Revolving Credit Collateral Agent or the Notes Collateral Agent, as the case may be, as each may be amended, supplemented, refunded, deferred, restructured, replaced or refinanced from time to time in whole or in part (whether with the Notes Collateral Agent or the Notes Claimholders or the US Revolving Credit Collateral Agent or the Revolving Credit Claimholders, as applicable), in each case in accordance with the provisions of this Agreement.

 

“Significant Subsidiary” means any Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X promulgated pursuant to the Securities Act.

 

“Singapore Borrower” means Edgen Murray PTE. Ltd., a company incorporated in Singapore.

 

“Singapore Revolving Credit Collateral Agent” means Bank of America, N.A. (Singapore branch), and any of its successors or assigns from time to time.

 

“Subsidiary” means, with respect to any Person (the “parent”) at any date, (a) any Person the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, (b) any other corporation, limited liability company, association or other business entity of which securities or other ownership interests representing more than 50% of the voting power of all equity interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Board of Directors thereof are, as of such date, owned, controlled or held by the parent and/or one or more subsidiaries of the parent, (c) any partnership (i) the sole general partner or the managing general partner of which is the parent and/or one or more subsidiaries of the parent or (ii) the only general partners of which are the parent and/or one or more subsidiaries of the parent and (d) any other Person that is otherwise controlled by the parent and/or one or more subsidiaries of the parent.

 

  

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“Trademark Licenses” means any and all present and future agreements providing for the granting of any right in or to Trademarks (whether such Grantor is licensee or licensor thereunder).

 

“Trademarks” means, collectively, with respect to each Grantor, all trademarks, service marks, slogans, logos, certification marks, trade dress, uniform resource locations (URLs), domain names, corporate names, trade names and other source or business identifiers, whether registered or unregistered, owned by or assigned to such Grantor and all registrations and applications for the foregoing (whether statutory or common law, whether established or registered in the United States, any State thereof, or any other country or any political subdivision thereof and, in each case, whether owned by or licensed to such Grantor), and all goodwill associated therewith, now existing or hereafter adopted or acquired, together with any and all (i) rights and privileges arising under applicable law with respect to such Grantor’s use of any trademarks, (ii) reissues, continuations, extensions and renewals thereof and amendments thereto, (iii) income, fees, royalties, damages and payments now and hereafter due and/or payable thereunder and with respect thereto, including damages, claims and payments for past, present or future infringements thereof, (iv) rights corresponding thereto throughout the world and (v) rights to sue for past, present and future infringements thereof.

 

“UCC” means the Uniform Commercial Code as in effect from time to time (except as otherwise specified) in any applicable state or jurisdiction.

 

“UK Borrower” means Edgen Murray Europe Limited, a company organized under the laws of England and Wales.

 

“UK Revolving Credit Collateral Agent” means Bank of America, N.A. (acting through its London branch), and any of its successors or assigns from time to time.

 

“US Borrower” has the meaning assigned to such term in the Preamble to this Agreement.

 

“US Guarantors” has the meaning assigned to that term in the Recitals to this Agreement.

 

“US Revolving Credit Collateral Agent” has the meaning assigned to such term in the Preamble to this Agreement.

 

“US Subsidiary Guarantors” has the meaning assigned to that term in the Recitals to this Agreement.

 

“Voting Stock” means, with respect to any Person, any class or classes of Capital Stock pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the Board of Directors of such Person.

 

1.2           Terms Generally – The definitions of terms in this Agreement 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:

 

  

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(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, restated, supplemented, modified, renewed or extended;

 

(b)           any reference herein to any Person shall be construed to include such Person’s permitted 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 Sections shall be construed to refer to Sections of this Agreement;

 

(e)           all references to terms defined in the New York UCC shall have the meaning ascribed to them therein (unless otherwise specifically defined herein); and

 

(f)            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.

 

SECTION 2.  Lien Priorities.

 

2.1           Relative Priorities for the Revolving Credit Primary Collateral  – Notwithstanding the date, time, method, manner or order of grant, attachment or perfection of any Liens securing the Revolving Credit Obligations granted on the Revolving Credit Primary Collateral or of any Liens securing the Notes Obligations granted on the Revolving Credit Primary Collateral and notwithstanding any provision of any UCC, or any other applicable law or the Revolving Credit Documents or the Notes Documents or any defect or deficiencies in, or failure to perfect, such Liens securing the Revolving Credit Obligations or the Notes Obligations or any other circumstance whatsoever, the US Revolving Credit Collateral Agent, on behalf of itself and the Revolving Credit Claimholders and the Notes Collateral Agent, on behalf of itself and the Notes Claimholders, each hereby agree that any Lien of the US Revolving Credit Collateral Agent on any Revolving Credit Primary Collateral, whether now or hereafter held by or on behalf of the US Revolving Credit Collateral Agent or any Revolving Credit Claimholder 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 all Liens on the Revolving Credit Primary Collateral securing any Notes Obligations.  For the avoidance of doubt, any Lien of the US Revolving Credit Collateral Agent securing Obligations in respect of Loans (as defined in the Revolving Credit Agreement) and letters of credit issued under the Revolving Credit Agreement not constituting Revolving Credit Obligations for purposes of clause (c) of the definition of Revolving Credit Obligations, whether now or hereafter held by or on behalf of the US Revolving Credit Collateral Agent or any Revolving Credit Claimholder 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 any Lien of the Notes Collateral Agent on the Revolving Credit Primary Collateral securing any Notes Obligations (but only to the extent such Obligations do not constitute Revolving Credit Obligations).

 

2.2           Notes Collateral – The US Revolving Credit Collateral Agent, on behalf of itself and the Revolving Credit Claimholders, acknowledges that it does not have a Lien on the Notes Collateral as of the date hereof.  If for any reason the US Revolving Credit Collateral Agent, on behalf of itself and the Revolving Credit Claimholders, obtains a Lien on the Notes Collateral, any Lien of the Notes Collateral Agent on the Notes Collateral, whether now or hereafter held by or on behalf of the Notes Collateral Agent or any Notes Claimholder 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 all Liens on the Notes Collateral securing any Revolving Credit Obligations.

 

  

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2.3           Prohibition on Contesting Liens – The US Revolving Credit Collateral Agent on behalf of itself and the Revolving Credit Claimholders and the Notes Collateral Agent on behalf of itself and the Notes Claimholders agrees that it will not (and hereby waives any right to) contest or support any other Person in contesting, in any proceeding (including any Insolvency or Liquidation Proceeding), the perfection, priority, validity or enforceability of a Lien held by or on behalf of any of the Revolving Credit Claimholders or any of the Notes Claimholders in all or any part of the Collateral, or the provisions of this Agreement; provided that nothing in this Agreement shall be construed to prevent or impair the rights of the US Revolving Credit Collateral Agent, any Revolving Credit Claimholder, the Notes Collateral Agent or any Notes Claimholder to enforce this Agreement, including the provisions of this Agreement relating to the priority of the Liens securing the Obligations as provided in Sections 2.1, 2.2 and 3.1.

 

SECTION 3.  Enforcement.

 

3.1           Exercise of Remedies – Restrictions on the Notes Collateral Agent and the Notes Claimholders – Until the Discharge of Revolving Credit Obligations has occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against any Grantor, the Notes Collateral Agent and the Notes Claimholders:

 

(1)           will not exercise or seek to exercise any rights or remedies with respect to any Revolving Credit Primary Collateral (including the exercise of any right of setoff or any right under any Account Agreement, landlord waiver, landlord access agreement, collateral access agreement or bailee’s letter or similar agreement or arrangement to which the Notes Collateral Agent or any Notes Claimholder is a party) or institute any action or proceeding with respect to such rights or remedies (including any action of foreclosure);

 

(2)           will not contest, protest or object to any foreclosure or other proceeding or action brought by the US Revolving Credit Collateral Agent or any Revolving Credit Claimholder or any other exercise by the US Revolving Credit Collateral Agent or any Revolving Credit Claimholder of any rights and remedies relating to the Revolving Credit Primary Collateral, whether under the Revolving Credit Documents or otherwise; and

 

(3)           except as may be permitted in Section 3.1(c), will not object to or challenge the forbearance by the US Revolving Credit Collateral Agent or any Revolving Credit Claimholder from bringing or pursuing any Enforcement;

 

provided, however, that, in the case of (1), (2) and (3) above, the Liens (if any) granted to secure the Notes Obligations shall attach to any proceeds resulting from actions taken by the US Revolving Credit Collateral Agent or any Revolving Credit Claimholder in accordance with this Agreement and remaining after application of such proceeds to the extent necessary to meet the requirements of a Discharge of Revolving Credit Obligations.

 

  

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(b)           Until the Discharge of Revolving Credit Obligations has occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against any Grantor, the US Revolving Credit Collateral Agent and the Revolving Credit Claimholders shall have the right to enforce rights, exercise remedies (including set-off and the right to credit bid their debt) and, in connection therewith make determinations regarding the release, disposition, or restrictions with respect to the Revolving Credit Primary Collateral without any consultation with, interference by (provided that any action permitted under this Agreement shall not constitute an interference) or the consent of the Notes Collateral Agent or any Notes Claimholder (including voluntary Dispositions of Revolving Credit Primary Collateral by the respective Grantors after a Revolving Credit Default); provided, however, that the Lien (if any) securing the Notes Obligations shall remain on the proceeds (other than those applied to the Revolving Credit Obligations) of such Revolving Credit Primary Collateral released or disposed of subject to the relative priorities described in Section 2.  In exercising rights and remedies with respect to the Revolving Credit Primary Collateral, the US Revolving Credit Collateral Agent and the Revolving Credit Claimholders may enforce the provisions of the Revolving 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 and without interference by the Notes Collateral Agent or the Notes Claimholders (provided that any action permitted under this Agreement shall not constitute an interference).  Such exercise and enforcement shall include the rights of an agent appointed by them to sell or otherwise dispose of the Revolving Credit Primary Collateral, to incur expenses in connection with such sale or disposition, and to exercise all the rights and remedies of a secured creditor under the UCC and of a secured creditor under the Bankruptcy Laws or other laws of any applicable jurisdiction.

 

(c)           Notwithstanding the foregoing, the Notes Collateral Agent and any Notes Claimholder may:

 

(1)           file one or more claims or statements of interest with respect to the Notes Obligations of any Grantor; provided that an Insolvency or Liquidation Proceeding has been commenced by or against such Grantor;

 

(2)           take any action (not adverse to the priority status of the Liens on the Revolving Credit Primary Collateral, or the rights of the US Revolving Credit Collateral Agent or any of the Revolving Credit Claimholders to exercise remedies in respect thereof) in order to create, perfect, preserve or protect its Lien on any of the Collateral;

 

(3)           file any necessary responsive or defensive pleadings 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 Notes Claimholders, including any claims secured by the Revolving Credit Primary Collateral, if any, in each case in accordance with the terms of this Agreement;

 

(4)           in any Insolvency or Liquidation Proceeding, file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Grantors arising under either Bankruptcy Law or applicable non-bankruptcy law, in each case not prohibited by the terms of this Agreement;

 

(5)           in any Insolvency or Liquidation Proceeding, vote on any plan of reorganization with respect to the Notes Collateral;

 

  

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(6)           exercise any of its rights or remedies with respect to any of the Revolving Credit Primary Collateral after the Discharge of Revolving Credit Obligations has occurred;

 

(7)           make a cash bid on all or any portion of the Revolving Credit Primary Collateral in any foreclosure proceeding or action; and

 

(8)           object to any proposed acceptance of Revolving Credit Primary Collateral by any Revolving Credit Claimholder pursuant to Section 9-620 of the UCC.

 

The Notes Collateral Agent, on behalf of itself and the Notes Claimholders, agrees that it will not take or receive any Revolving Credit Primary Collateral or any proceeds of such Revolving Credit Primary Collateral in connection with the exercise of any right or remedy (including set-off) with respect to any such Revolving Credit Primary Collateral in its capacity as a creditor in violation of this Agreement.  Without limiting the generality of the foregoing, unless and until the Discharge of Revolving Credit Obligations has occurred, except as expressly provided in Section 6.3(c)(1) and this Section 3.1(c), the sole right of the Notes Collateral Agent and the Notes Claimholders with respect to the Revolving Credit Primary Collateral is to hold a Lien (if any) on such Revolving Credit Primary Collateral pursuant to the applicable Notes Collateral 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 Revolving Credit Obligations has occurred.

 

(d)           Subject to Section 3.1(c) and Section 6.3(c)(1):

 

(1)           the Notes Collateral Agent, for itself and on behalf of the Notes Claimholders, agrees that the Notes Collateral Agent and the Notes Claimholders will not take any action with respect to the Revolving Credit Primary Collateral that would hinder any exercise of remedies by the US Revolving Credit Collateral Agent under the Revolving Credit Documents or that is otherwise prohibited hereunder, including any sale, lease, exchange, transfer or other disposition of the Revolving Credit Primary Collateral, whether by foreclosure or otherwise;

 

(2)           the Notes Collateral Agent, for itself and on behalf of the Notes Claimholders, hereby waives any and all rights the Notes Collateral Agent or the Notes Claimholders, as applicable, may have as a junior lien creditor with respect to the Revolving Credit Primary Collateral or otherwise to object to the manner in which the US Revolving Credit Collateral Agent or the Revolving Credit Claimholders seek to enforce or collect the Revolving Credit Obligations or the Liens securing the Revolving Credit Obligations granted in any of the Revolving Credit Documents or undertaken in accordance with this Agreement, regardless of whether any action or failure to act by or on behalf of the US Revolving Credit Collateral Agent or the Revolving Credit Claimholders is adverse to the interest of the Notes Claimholders; and

 

(3)           the Notes Collateral Agent hereby acknowledges and agrees that no covenant, agreement or restriction contained in the Notes Collateral Documents or any other Notes Document (other than this Agreement) shall be deemed to restrict in any way the rights and remedies of the US Revolving Credit Collateral Agent or the Revolving Credit Claimholders with respect to the enforcement of the Liens on the Revolving Credit Primary Collateral as set forth in this Agreement and the Revolving Credit Documents.

 

  

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(e)           Except as otherwise specifically set forth in Sections 3.1(a) and (c), the Notes Collateral Agent and the Notes Claimholders may exercise rights and remedies as unsecured creditors against any Grantor that has guaranteed or granted Liens to secure the Notes Obligations, and the Notes Collateral Agent may exercise rights and remedies with respect to the Notes Collateral, in each case, in accordance with the terms of the Notes Documents and applicable law; provided, however, that in the event that the Notes Collateral Agent or any Notes Claimholder becomes a judgment Lien creditor in respect of Revolving Credit Primary Collateral as a result of its enforcement of its rights as an unsecured creditor with respect to the Notes Obligations, such judgment Lien shall be subject to the terms of this Agreement for all purposes (including in relation to the Revolving Credit Obligations) as the other Liens securing the Notes Obligations are subject to this Agreement.

 

(f)           Nothing in this Agreement shall prohibit the receipt by the Notes Collateral Agent or any Notes Claimholder of the required payments of interest, principal and other amounts owed in respect of the Notes Obligations, so long as such receipt is not the direct or indirect result of the exercise by the Notes Collateral Agent or any Notes Claimholder of rights or remedies as a secured creditor in respect of the Revolving Credit Primary Collateral (including set-off) or enforcement in contravention of this Agreement of any Lien held by any of them.  Nothing in this Agreement impairs or otherwise adversely affects any rights or remedies the US Revolving Credit Collateral Agent or the Revolving Credit Claimholders may have against the Grantors under the Revolving Credit Documents.

 

3.2           Exercise of Remedies – Collateral Access Rights – The US Revolving Credit Collateral Agent and the Notes Collateral Agent agree not to commence Enforcement until the earlier of the date on which (i) an Enforcement Notice has been given to the other Agent, and (ii) any Insolvency or Liquidation Proceeding is commenced by or against any Grantor that has not been dismissed.

 

(b)           If the Notes Collateral Agent, or any agent or representative of the Notes Collateral Agent, or any third party pursuant to any Enforcement undertaken by the Notes Collateral Agent, or any receiver, shall obtain possession or physical control of any of the Real Estate Assets, the Notes Collateral Agent or, if applicable, any such third party (at such address to be provided by the Notes Collateral Agent in connection with the applicable Enforcement) shall promptly notify the US Revolving Credit Collateral Agent of that fact and the US Revolving Credit Collateral Agent shall, within ten (10) Business Days thereafter, notify the Notes Collateral Agent as to whether it desires to exercise access rights under this Agreement, at which time the parties shall confer in good faith to coordinate with respect to the US Revolving Credit Collateral Agent’s exercise of such access rights.  Access rights may apply to differing parcels of Real Estate Assets at differing times, in which case, a differing Access Period may apply to each such property.

 

(c)           Upon delivery of notice to the Notes Collateral Agent as provided in Section 3.2(b), the Access Period shall commence for the subject parcel of Real Estate Assets.  During the Access Period or for any period prior to an Access Period when the US Revolving Credit Collateral Agent may have had access and/or use of any Notes Collateral (e.g. pursuant to access granted by a landlord of any Real Estate Asset), the US Revolving Credit Collateral Agent and its agents, representatives and designees shall have a non-exclusive right to have access to, and a rent free right to use, the Notes Collateral for the purpose of arranging for and effecting the sale or disposition of Revolving Credit Primary Collateral, including the production, completion, packaging, shipping and other preparation of such Revolving Credit Primary Collateral for sale or disposition.  During any such Access Period (or period prior to an Access Period), the US Revolving Credit Collateral Agent and its representatives (and persons employed on their behalf), may continue to operate, service, maintain, process and sell the Revolving Credit Primary Collateral, as well as to engage in bulk sales or other liquidations of Revolving Credit Primary Collateral.  The US Revolving Credit Collateral Agent shall take proper care of any Notes Collateral that is used by the US Revolving Credit Collateral Agent during the Access Period and repair and replace any damage (ordinary wear-and-tear excepted) caused by the US Revolving Credit Collateral Agent or its agents, representatives or designees and the US Revolving Credit Collateral Agent shall comply with all applicable laws in connection with its use or occupancy of the Notes Collateral.  The US Revolving Credit Collateral Agent and the Revolving Credit Claimholders shall indemnify and hold harmless the Notes Collateral Agent and the Notes Claimholders for any injury or damage to Persons or property caused by the acts or omissions of Persons under its control.  The US Revolving Credit Collateral Agent and the Notes Collateral Agent shall cooperate and use reasonable efforts to ensure that their activities during the Access Period as described above do not interfere materially with the activities of the other as described above, including the right of the Notes Collateral Agent to commence foreclosure of the Notes Mortgages or to show the Notes Collateral to prospective purchasers and to ready the Notes Collateral for sale.

 

  

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(d)           If the Notes Collateral Agent shall foreclose or otherwise sell any of the Notes Collateral, the Notes Collateral Agent will notify the buyer thereof of the existence of this Agreement and that the buyer is acquiring such Notes Collateral subject to the terms of this Agreement.

 

(e)           The Grantors hereby agree with the Notes Collateral Agent and the US Revolving Credit Collateral Agent that the US Revolving Credit Collateral Agent shall have access, during the Access Period, as described herein and each such Grantor that owns any of the Mortgaged Premises grants a non-exclusive easement in gross over its property to permit the uses by the US Revolving Credit Collateral Agent contemplated by this Section 3.2. The Notes Collateral Agent consents to such easement and to the recordation of a collateral access easement agreement, in form and substance reasonably acceptable to the Notes Collateral Agent, in the relevant real estate records with respect to each parcel of real property that is now or hereafter subject to a Notes Mortgage.  The US Revolving Credit Collateral Agent agrees that upon either a Discharge of Revolving Credit Obligations or the expiration of the final Access Period with respect to any parcel of real property covered by a Notes Mortgage, it shall, upon request, execute and deliver to the Notes Collateral Agent such documentation, in recordable form, as may reasonably be requested to terminate any and all rights with respect to such parcel of real property covered by a Notes Mortgage.

 

3.3           Exercise of Remedies – Intellectual Property Rights/Access to Information/Use of Equipment – The Notes Collateral Agent hereby grants (to the full extent of its rights and interests) the US Revolving Credit Collateral Agent and each of its respective agents, representatives and designees a royalty free, rent free license and lease to use all of the Notes Collateral exclusive of Intellectual Property (covered in clause (b) below) but including any computer or other data processing Equipment to conduct sales or distribution activities on  the Real Estate Assets during any Enforcement Period, to collect all Accounts or amounts owing under Instruments or Chattel Paper, to copy, use or preserve any and all information relating to any of the Collateral, and to complete the manufacture, packaging and sale of Inventory; provided, however, the royalty free, rent free license and lease granted in this clause (a) with respect to Equipment shall immediately expire upon the sale, lease, transfer or other disposition of such Equipment.

 

(b)           The Notes Collateral Agent hereby grants (to the full extent of its rights and interests) the US Revolving Credit Collateral Agent and each of its respective agents, representatives and designees solely during the Enforcement Period, (A) a nonexclusive, royalty free, worldwide license or sublicense (subject to the terms of the underlying license) to use all of the Notes Collateral constituting Intellectual Property to the extent necessary or reasonably helpful to collect all Accounts or amounts owing with respect to any Revolving Credit Primary Collateral and to complete the manufacture, packaging and sale of Inventory and (B) a nonexclusive, royalty free, worldwide license or sublicense (subject to the terms of the underlying license) (which will be binding on any successor or assignee of the Intellectual Property) to use any and all Intellectual Property in connection with its Enforcement; provided, however, the US Revolving Credit Collateral Agent, during the term of the above licenses, shall use any Trademarks of such licensed Intellectual Property solely in connection with (x) goods or services which the US Revolving Credit Collateral Agent in good faith reasonably believes to be in all material respects of at least the same level of quality offered by, and in a manner in which the US Revolving Credit Collateral Agent in good faith reasonably believes to be in all material respects consistent with the practices of, one or more Grantors as of the date of the Enforcement Notice or (y) the disposition of damaged, obsolete or second-quality goods which dispositions the US Revolving Credit Collateral Agent in good faith reasonably believes will not materially diminish the distinctiveness and quality characteristics associated with such Intellectual Property or the validity thereof (it being understood and agreed that the US Revolving Credit Collateral Agent and each of its respective agents, representatives and designees shall comply in all material respects with all laws pertaining to its use of Intellectual Property described hereunder, including notice requirements).

 

  

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3.4           Exercise of Remedies – Notice; Set Off and Tracing of and Priorities in Proceeds – With respect to the Notes Collateral consisting of Equipment and Real Estate Assets only, the Notes Collateral Agent shall provide not less than ten (10) days notice to the US Revolving Credit Collateral Agent prior to any Enforcement of such Notes Collateral.

 

(b)           The US Revolving Credit Collateral Agent, on behalf of itself and the Revolving Credit Claimholders, and the Notes Collateral Agent, on behalf of itself and the Notes Claimholders, each agree that, prior to an issuance of an Enforcement Notice, any proceeds of Collateral, whether or not deposited under Account Agreements, which are used by any Grantor to acquire other property which is Collateral shall not (as among the US Revolving Credit Collateral Agent, the Revolving Credit Claimholders, the Notes Collateral Agent and the Notes Claimholders) be treated as proceeds of Collateral for purposes of determining the relative priorities in the Collateral which was so acquired.   The US Revolving Credit Collateral Agent, on behalf of itself and the Revolving Credit Claimholders, and the Notes Collateral Agent, on behalf of itself and the Notes Claimholders, each agree that after an issuance of an Enforcement Notice, each such Person shall cooperate in good faith to identify the proceeds of the Revolving Credit Primary Collateral and the Notes Collateral, as the case may be (it being agreed that after an issuance of an Enforcement Notice, unless the US Revolving Credit Collateral Agent has actual knowledge to the contrary, all funds deposited under Account Agreements and then applied to the Revolving Credit Obligations shall be presumed to be Revolving Credit Primary Collateral (a presumption that can be rebutted by the Notes Collateral Agent only by evidence presented to the US Revolving Credit Collateral Agent within thirty (30) Business Days after such application)); provided, however, that neither any Revolving Credit Claimholder nor any Notes Claimholder shall be liable or in any way responsible for any claims or damages from conversion of the Revolving Credit Primary Collateral or the Notes Collateral, as the case may be (it being understood and agreed that (A) the only obligation of any Revolving Credit Claimholder is to pay over to the Notes Collateral Agent, in the same form as received, with any necessary endorsements, all proceeds that such Revolving Credit Claimholder received that have been identified as proceeds of the Notes Collateral (except to the extent that such proceeds are represented by a Net Cash Proceeds Letter of Credit) and (B) the only obligation of any Notes Claimholder is to pay over to the US Revolving Credit Collateral Agent, in the same form as received, with any necessary endorsements, all proceeds that such Notes Claimholder received that have been identified as proceeds of the Revolving Credit Primary Collateral).  The US Revolving Credit Collateral Agent and the Notes Collateral Agent may request from the other an accounting of the identification of the proceeds of Collateral (and the US Revolving Credit Collateral Agent and the Notes Collateral Agent, as the case may, upon which such request is made shall deliver such accounting reasonably promptly after such request is made).

 

  

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(c)           Until the Discharge of Revolving Credit Obligations, the Notes Collateral Agent, on behalf of itself and the Notes Claimholders, hereby consents to the application, prior to the receipt by the US Revolving Credit Collateral Agent of an Enforcement Notice issued by the Notes Collateral Agent, of cash or other proceeds of Collateral deposited under Account Agreements in favor of the US Revolving Credit Collateral Agent to the repayment of Revolving Credit Obligations pursuant to the Revolving Credit Documents.

 

3.5           Allocation of Proceeds for Mixed Collateral – In the event that Revolving Credit Primary Collateral and Notes Collateral are disposed of in a single transaction or series of related transactions in which the aggregate sales price is not allocated between the Revolving Credit Primary Collateral, on the one hand, and the Notes Collateral, on the other hand, being sold, including in connection with or as a result of the sale of Stock of any Grantor or a Subsidiary thereof that owns assets constituting Revolving Credit Primary Collateral or Notes Collateral, then solely for purposes of this Agreement and unless otherwise agreed, the portion of the aggregate sales price deemed to be proceeds of the Revolving Credit Primary Collateral, on the one hand, and the Notes Collateral, on the other hand, shall be allocated as follows:  (a) first, to the Revolving Credit Primary Collateral in an amount equal to the face amount of all Accounts and the net book value of all Inventory sold; and (b) second, to the Revolving Credit Collateral or the Notes Collateral in accordance with the respective fair market value of the other Collateral sold.

 

SECTION 4.  Payments.

 

4.1           Application of Proceeds – Subject to the provisions of Section 6.5 hereof, so long as the Discharge of Revolving Credit Obligations has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against any Grantor, all Revolving Credit Primary Collateral or proceeds thereof received in connection with the sale or other disposition of, or collection on, such Revolving Credit Primary Collateral upon the exercise of remedies by the US Revolving Credit Collateral Agent or the Revolving Credit Claimholders, shall be applied by the US Revolving Credit Collateral Agent to the Revolving Credit Obligations in such order as specified in the relevant Revolving Credit Documents.  Upon the Discharge of Revolving Credit Obligations, the US Revolving Credit Collateral Agent shall deliver to the Notes Collateral Agent any Collateral and 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 Notes Collateral Agent to the Notes Obligations in such order as specified in the Notes Documents.

 

4.2           Payments Over in Violation of Agreement – Unless and until the Discharge of Revolving Credit Obligations has occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against any Grantor, any Collateral or proceeds thereof received by the Notes Collateral Agent or any Notes Claimholder in connection with the exercise of any right or remedy (including set-off) relating to the Revolving Credit Primary Collateral in contravention of this Agreement shall be segregated and held in trust and forthwith paid over to the US Revolving Credit Collateral Agent for the benefit of the Revolving Credit Claimholders in the same form as received, with any necessary endorsements, or as a court of competent jurisdiction may otherwise direct.

 

  

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SECTION 5.  Other Agreements.

 

5.1           Releases – If in connection with the exercise of any of the US Revolving Credit Collateral Agent’s remedies in respect of any Revolving Credit Primary Collateral as provided for in Section 3.1, the US Revolving Credit Collateral Agent, for itself and/or on behalf of any of the Revolving Credit Claimholders, releases any of its Liens on any part of the Revolving Credit Primary Collateral, then the Liens, if any, of the Notes Collateral Agent, for itself and/or for the benefit of the Notes Claimholders, on the Revolving Credit Primary Collateral sold or disposed of in connection with such exercise, shall be automatically, unconditionally and simultaneously released.  The Notes Collateral Agent, for itself and/or on behalf of any such Notes Claimholders, promptly shall execute and deliver to the US Revolving Credit Collateral Agent or such Grantor such termination statements, releases and other documents as the US Revolving Credit Collateral Agent or such Grantor may request to effectively confirm such release.

 

(b)           If in connection with any sale, lease, exchange, transfer or other disposition of any Revolving Credit Primary Collateral (collectively, a “Disposition”) permitted under the terms of the Revolving Credit Documents (including voluntary Dispositions of Revolving Credit Primary Collateral by the respective Grantors after a Revolving Credit Default) (other than in connection with the exercise of any of the US Revolving Credit Collateral Agent’s rights and remedies in respect of the Revolving Credit Primary Collateral as provided for in Sections 3.1), the US Revolving Credit Collateral Agent, for itself and/or on behalf of any of the Revolving Credit Claimholders, releases any of its Liens on any part of the Revolving Credit Primary Collateral, in each case, other than (A) in connection with the Discharge of Revolving Credit Obligations or (B) after the occurrence and during the continuance of a Notes Default if, all of the net proceeds received in connection with such Disposition are not applied to the Revolving Credit Obligations, then, in each case, the Liens, if any, of the Notes Collateral Agent, for itself and/or for the benefit of the Notes Claimholders, on such Revolving Credit Primary Collateral shall be automatically, unconditionally and simultaneously released.  The Notes Collateral Agent for itself and/or on behalf of any such Notes Claimholders promptly shall execute and deliver to the US Revolving Credit Collateral Agent or such Grantor such termination statements, releases and other documents as the US Revolving Credit Collateral Agent or such Grantor may request to effectively confirm such release.  The Notes Collateral Agent, for itself and/or on behalf of any such Notes Claimholders, hereby agrees to consent to any request by the US Revolving Credit Collateral Agent that the Notes Collateral Agent, for itself and/or on behalf of any such Notes Claimholders, releases its security interest in connection with a Disposition under this Section 5.1(b).

 

(c)           Until the Discharge of Revolving Credit Obligations shall occur, the Notes Collateral Agent, for itself and/or on behalf of the Notes Claimholders, hereby irrevocably constitutes and appoints the US Revolving Credit Collateral Agent and any of its officers or agents, 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 Notes Collateral Agent or such Notes Claimholder, whether in the US Revolving Credit Collateral Agent’s name or, at the option of the US Revolving Credit Collateral Agent, in the Notes Collateral Agent’s or any Notes Claimholder’s own name, from time to time in the US Revolving Credit 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 to accomplish the purposes of this Section 5.1, including any endorsements or other instruments of transfer or release.

 

  

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5.2           Insurance – Unless and until the Discharge of Revolving Credit Obligations has occurred, subject to the terms of, and the rights of the Grantors under, the Revolving Credit Documents, (i) the US Revolving Credit Collateral Agent and the Revolving Credit Claimholders shall have the sole and exclusive right to adjust settlement for any insurance policy covering the Revolving Credit Primary Collateral or the Liens with respect thereto in the event of any loss thereunder or with respect thereto and to approve any award granted in any condemnation or similar proceeding (or any deed in lieu of condemnation) affecting such Revolving Credit Primary Collateral; (ii) all proceeds of any such policy and any such award (or any payments with respect to a deed in lieu of condemnation) if in respect to such Revolving Credit Primary Collateral and to the extent required by the Revolving Credit Documents shall be paid to the US Revolving Credit Collateral Agent for the benefit of the Revolving Credit Claimholders pursuant to the terms of the Revolving Credit Documents (including, without limitation, for purposes of cash collateralization of letters of credit) and thereafter, to the extent no Revolving Credit Obligations which were secured by such Revolving Credit Primary Collateral are outstanding, and subject to the terms of, and the rights of the Grantors under, the Notes Documents, to the Notes Collateral Agent for the benefit of the Notes Claimholders to the extent required under the Notes Collateral Documents and then, to the extent no Notes Obligations which were secured by such Revolving Credit Primary Collateral 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, and (iii) if the Notes Collateral Agent or any Notes Claimholder 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 segregate and hold in trust and forthwith pay such proceeds over to the US Revolving Credit Collateral Agent in accordance with the terms of Section 4.2.  The Notes Collateral Agent shall have the sole and exclusive right to settle and adjust any insurance policy to the extent relating to the Notes Collateral.

 

(b)           To effectuate the foregoing, the US Revolving Credit Collateral Agent and the Notes Collateral Agent shall each receive separate lender’s loss payable endorsements naming themselves as loss payee and additional insured, as their interests may appear, with respect to policies which insure Collateral hereunder.  To the extent any proceeds are received for business interruption or for any liability or indemnification and those proceeds are not compensation for a casualty loss with respect to the Notes Collateral, such proceeds shall first be applied to repay the Revolving Credit Obligations and then be applied, to the extent required by the Notes Documents, to the Notes Obligations.

 

5.3           Amendments to Revolving Credit Documents and Notes Documents; Refinancing; Legending Provisions.

 

(a)           The Revolving Credit Documents and the Notes Documents may be amended, supplemented or otherwise modified, in each case, in accordance with the terms of both the Revolving Credit Documents and the Notes Documents, and the Revolving Credit Obligations and Notes Obligations may be Refinanced, in each case, without notice to, or the consent (except to the extent a consent is required to permit the Refinancing transaction under any Revolving Credit Document or any Notes Document) of the Revolving Credit Claimholders or the Notes Claimholders, as the case may be, all without affecting the Lien subordination or other provisions of this Agreement; provided, however, that the holders of such Refinancing debt bind themselves in a writing reasonably acceptable to the US Revolving Credit Collateral Agent and the Notes Collateral Agent and addressed to the US Revolving Credit Collateral Agent or the Notes Collateral Agent, as the case may be, to the terms of this Agreement and any such amendment, supplement, modification or Refinancing shall be in accordance with the provisions of both the Revolving Credit Documents and the Notes Documents.

 

  

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(b)           Each Grantor agrees that each security agreement, pledge agreement and mortgage that is a Notes Collateral Document shall include the following language (or language to similar effect approved by the US Revolving Credit Collateral Agent):

 

“Notwithstanding anything herein to the contrary, the lien and security interest in certain Collateral granted to the Notes Collateral Agent or other Person, as applicable pursuant to this Agreement and the exercise of any right or remedy by the Notes Collateral Agent or other Person, as applicable in respect of such Collateral hereunder are subject to the provisions of the Intercreditor Agreement, dated as of December 20, 2012 (as amended, restated, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”), among (1) EDGEN MURRAY CORPORATION, a Nevada corporation, (2) BOURLAND & LEVERICH SUPPLY CO. LLC, a Delaware limited liability company, (3) EDGEN GROUP, INC., a Delaware corporation, (4) EDG HOLDCO LLC, a Delaware limited liability company, (5) EM HOLDINGS LLC, a Delaware limited liability company, (6) BANK OF AMERICA, N.A., in its capacity as administrative agent and U.S. collateral agent for the Revolving Credit Obligations, (7) THE BANK OF NEW YORK MELLON, in its capacity as collateral agent for the Notes Obligations and (8) certain other persons which may be or become parties thereto or become bound 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.  The foregoing is only applicable to any Revolving Credit Primary Collateral as defined in the Intercreditor Agreement.”

 

(c)           Without limiting any obligation to obtain any consent required under Section 5.3(a), the US Revolving Credit Collateral Agent and the Notes Collateral Agent shall each use commercially reasonable efforts to notify the other party of any written amendment or modification to any Revolving Credit Document or any Notes Document, as applicable, but the failure to do so shall not create a cause of action against the party failing to give such notice or create any claim or right on behalf of any third party.  In connection with amendments or modifications permitted by Section 5.3, the US Revolving Credit Collateral Agent and the Notes Collateral Agent, as applicable, shall, upon request of the other party, provide copies of all such modifications or amendments and copies of all other relevant documentation to the other Person.

 

5.4           Bailees for Perfection – The US Revolving Credit Collateral Agent agrees to hold that part of the Collateral that is in its possession or control (or in the possession or control of its agents or bailees) to the extent that possession or control thereof is taken to perfect a Lien thereon under the UCC (such Collateral being the “Pledged Collateral”) as collateral agent for the Revolving Credit Claimholders, and as bailee for the Notes Collateral Agent (such bailment being intended, among other things, to satisfy the requirements of Sections 8-106(d)(3), 8-301(a)(2) and 9-313(c) of the UCC) and any assignee solely for the purpose of perfecting the security interest granted under the Revolving Credit Documents and the Notes Documents, as applicable, subject to the terms and conditions of this Section 5.4.

 

(b)           The US Revolving Credit Collateral Agent shall have no obligation whatsoever to the Notes Collateral Agent or to any Notes Claimholder to ensure 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 5.4.  The duties or responsibilities of the US Revolving Credit Collateral Agent under this Section 5.4 shall be limited solely to holding the Pledged Collateral as bailee in accordance with this Section 5.4 and delivering the Pledged Collateral upon a Discharge of Revolving Credit Obligations, as provided in paragraph (d) below, so that, subject to the terms of this Agreement, until a Discharge of Revolving Credit Obligations, the US Revolving Credit Collateral Agent shall be entitled to deal with the Pledged Collateral or Collateral within its “control” in accordance with the terms of this Agreement and other Revolving Credit Documents (but only to the extent that such Collateral constitutes Revolving Credit Primary Collateral) as if the Liens (if any) of the Notes Collateral Agent did not exist.

 

  

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(c)           The US Revolving Credit Collateral Agent acting pursuant to this Section 5.4 shall not have by reason of the Revolving Credit Documents, this Agreement or any other document a fiduciary relationship with the Notes Collateral Agent or any Notes Claimholder with respect to such acts.

 

(d)           Upon the Discharge of Revolving Credit Obligations, the US Revolving Credit Collateral Agent shall deliver the remaining Pledged Collateral (if any) together with any necessary endorsements, to the Notes Collateral Agent to the extent the Notes Obligations which are secured by such Pledged Collateral remain outstanding (so as to allow the Notes Collateral Agent to obtain possession or control of such Pledged Collateral).  The US Revolving Credit Collateral Agent further agrees to take all other action reasonably requested by the Notes Collateral Agent in connection with the Notes Collateral Agent obtaining a first-priority interest in the Collateral or as a court of competent jurisdiction may otherwise direct.

 

5.5           When Discharge of Revolving Credit Obligations and Discharge of Notes Obligations Deemed to Not Have Occurred – If concurrently with the Discharge of Revolving Credit Obligations or the Discharge of Notes Obligations, any Grantor thereafter enters into any Refinancing of any Revolving Credit Obligation or any Notes Obligation, as the case may be, which Refinancing is permitted by both the Notes Documents and the Revolving Credit Documents and this Agreement, then such Discharge of Revolving Credit Obligations or the Discharge of Notes Obligations, shall automatically be deemed not to have occurred for all purposes of this Agreement (other than with respect to any actions taken as a result of the occurrence of such first Discharge of Revolving Credit Obligations or the Discharge of Notes Obligations) and, from and after the date on which the New Debt Notice (as defined below) is delivered to the Notes Collateral Agent or the US Revolving Credit Collateral Agent, as appropriate, in accordance with the next sentence, the obligations under such Refinancing shall automatically be treated as Revolving Credit Obligations or Notes Obligations, as the case may be, for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Collateral set forth herein, and the US Revolving Credit Collateral Agent or Notes Collateral Agent, as the case may be, under such new Revolving Credit Documents or new Notes Documents shall be the US Revolving Credit Collateral Agent or the Notes Collateral Agent for all purposes of this Agreement.  Upon receipt of a notice (the “New Debt Notice”) stating that any Grantor has entered into new Revolving Credit Documents or new Notes Documents (which notice shall include a complete copy of the relevant new documents and provide the identity of the new agent or trustee for such facility or issuance, such agent or trustee, the “New Agent”), the US Revolving Credit Collateral Agent or the Notes Collateral Agent, as the case may be, shall promptly (a) enter into such documents and agreements (including amendments or supplements to this Agreement) as such Grantor or such New Agent shall 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 and (b) deliver, to the extent contemplated by this Agreement, to the New Agent any Pledged Collateral that is Revolving Credit Primary Collateral (in the case of a New Agent that is the agent under any new Revolving Credit Documents) held by it together with any necessary endorsements (or otherwise allow the New Agent to obtain control of such Pledged Collateral).  The New Agent shall agree in a writing addressed to the US Revolving Credit Collateral Agent and the Revolving Credit Claimholders or the Notes Collateral Agent and the Notes Claimholders, as the case may be, to be bound by the terms of this Agreement.  If the Revolving Credit Obligations under the new Revolving Credit Documents are secured by assets of the Grantors constituting Revolving Credit Primary Collateral that do not also secure the Notes Obligations, then the Notes Obligations shall be secured at such time by a second priority Lien on such assets to the same extent provided in the Revolving Credit Collateral Documents, the Notes Collateral Documents and this Agreement.

 

  

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SECTION 6.  Insolvency or Liquidation Proceedings.

 

6.1           Finance and Sale Issues – Until the Discharge of Revolving Credit Obligations has occurred, if any Grantor shall be subject to any Insolvency or Liquidation Proceeding and the US Revolving Credit Collateral Agent shall agree to permit the use of “Cash Collateral” (as such term is defined in Section 363(a) of the Bankruptcy Code) other than the identifiable cash proceeds of any Notes Collateral, on which a Lien has been granted to the US Revolving Credit Collateral Agent pursuant to the Revolving Credit Documents or to permit any Grantor to obtain financing, whether from the Revolving Credit Claimholders or any other Person under Section 364 of the Bankruptcy Code or any similar Bankruptcy Law (“DIP Financing”), then the Notes Collateral Agent, on behalf of itself and the Notes Claimholders, agrees that it will raise no objection to or contest such Cash Collateral use or DIP Financing so long as such Cash Collateral use or DIP Financing meet the following requirements: (i) the aggregate principal amount of the DIP Financing plus the aggregate outstanding principal amount of loans constituting Revolving Credit Obligations plus the aggregate face amount of any letters of credit issued and not reimbursed under the Revolving Credit Agreement does not exceed the sum of the Revolving Credit Cap Amount and the DIP Financing Cap Amount, (ii) the Notes Collateral Agent and the Notes Claimholders retain the right to object to any ancillary agreements or arrangements regarding the Cash Collateral use or the DIP Financing that are materially prejudicial to their interests in the Notes Collateral (other than any Real Estate Assets upon which a Lien has not been perfected), (iii) the terms of the DIP Financing (A) do not compel the applicable Grantor to seek confirmation of a specific plan of reorganization for which all or substantially all of the material terms are set forth in the DIP Financing documentation or a related document and (B) do not expressly require the liquidation of the Collateral prior to a default under the DIP Financing documentation or Cash Collateral order, and (iv) any Lien on the Notes Collateral to secure such DIP Financing is subordinate to the Lien of the Notes Collateral Agent with respect thereto.  To the extent the Liens securing the Revolving Credit Obligations are subordinated to or pari passu with such DIP Financing which meets the requirements of clauses (i) through (iv) above, the Notes Collateral Agent will subordinate its Liens in the Revolving Credit Primary Collateral to the Liens securing such DIP Financing (and all Obligations relating thereto) and to any "Carve Out" from the Liens securing such DIP Financing for the benefit of professionals entitled to compensation from any Grantor's estate provided for in connection with such DIP Financing, and will not request adequate protection or any other relief in connection therewith (except, as expressly agreed by the US Revolving Credit Collateral Agent or to the extent permitted by Section 6.3).

 

(b)           Until the Discharge of Notes Obligations has occurred, if any Grantor shall be subject to any Insolvency or Liquidation Proceeding and the Notes Collateral Agent shall agree to permit the use of “Cash Collateral” (as such term is defined in Section 363(a) of the Bankruptcy Code) other than Revolving Credit Primary Collateral, on which a Lien has been granted to the Notes Collateral Agent pursuant to the Notes Documents or to permit any Grantor to obtain DIP Financing, then the US Revolving Credit Collateral Agent, on behalf of itself and the Revolving Credit Claimholders, agrees that it will raise no objection to or contest such Cash Collateral use or DIP Financing so long as such Cash Collateral use or DIP Financing meet the following requirements: (i) the US Revolving Credit Collateral Agent and the Revolving Credit Claimholders retain the right to object to any ancillary agreements or arrangements regarding the Cash Collateral use or the DIP Financing that are materially prejudicial to their interests in the Revolving Credit Primary Collateral, (ii) the terms of the DIP Financing (A) do not compel the applicable Grantor to seek confirmation of a specific plan of reorganization for which all or substantially all of the material terms are set forth in the DIP Financing documentation or a related document and (B) do not expressly require the liquidation of the Collateral prior to a default under the DIP Financing documentation or Cash Collateral order, and (iii) any Lien on the Revolving Credit Primary Collateral to secure such DIP Financing is subordinate to the Lien of the US Revolving Credit Collateral Agent with respect thereto.  To the extent the Liens securing the Notes Obligations are subordinated to or pari passu with such DIP Financing which meets the requirements of clauses (i) through (iii) above, the US Revolving Credit Collateral Agent will subordinate its Liens in the Notes Collateral to the Liens securing such DIP Financing (and all Obligations relating thereto) and will not request adequate protection or any other relief in connection therewith (except, as expressly agreed by the Notes Collateral Agent or to the extent permitted by Section 6.3).

 

  

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(c)           Until the Discharge of Revolving Credit Obligations has occurred, if any Grantor shall be subject to any Insolvency or Liquidation Proceeding and the US Revolving Credit Collateral Agent shall, acting in accordance with the Revolving Credit Agreement, agree to permit a sale of the Revolving Credit Primary Collateral free and clear of Liens or other claims, under Section 363 of the Bankruptcy Code or otherwise, then each Notes Claimholder agrees that it will not raise any objection to or contest such sale or request adequate protection or any other relief in connection therewith (it being understood that the Notes Claimholders still, but subject to this Agreement, have rights with respect to the proceeds of such Collateral).

 

(d)           Until the Discharge of Notes Obligations has occurred, if any Grantor shall be subject to any Insolvency or Liquidation Proceeding and the Notes Collateral Agent shall, acting in accordance with the Notes Documents, agree to permit a sale of the Notes Collateral free and clear of Liens or other claims, under Section 363 of the Bankruptcy Code or otherwise, then each Revolving Credit Claimholder agrees that it will not raise any objection to or contest such sale or request adequate protection or any other relief in connection therewith (it being understood that the Revolving Credit Claimholders still, but subject to this Agreement, have rights with respect to the proceeds of such Collateral).

 

6.2           Relief from the Automatic Stay – Until the Discharge of Revolving Credit Obligations has occurred, the Notes Collateral Agent, on behalf of itself and the Notes Claimholders, agrees that none of them shall seek (or support any other Person seeking) relief from the automatic stay or any other stay in any Insolvency or Liquidation Proceeding in respect of the Revolving Credit Primary Collateral, without the prior written consent of the US Revolving Credit Collateral Agent.

 

(b)           Until the Discharge of Notes Obligations has occurred, the US Revolving Credit Collateral Agent, on behalf of itself and the Revolving Credit Claimholders, agrees that none of them shall seek (or support any other Person seeking) relief from the automatic stay or any other stay in any Insolvency or Liquidation Proceeding in respect of the Notes Collateral (other than to the extent such relief is required to exercise its rights under Section 3.2 or Section 3.3), without the prior written consent of the Notes Collateral Agent.

 

  

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6.3           Adequate Protection – The Notes Collateral Agent, on behalf of itself and the Notes Claimholders, agrees that none of them shall contest (or support any other Person contesting):

 

(1)           any request by the US Revolving Credit Collateral Agent or the Revolving Credit Claimholders for adequate protection with respect to the Revolving Credit Primary Collateral; provided that (A) such adequate protection claim shall not seek the creation of any Lien over additional assets or property of any Grantor other than with respect to assets or property that constitute Revolving Credit Primary Collateral and (B) if such additional assets or property shall also constitute Notes Collateral, (i) a Lien shall have been created in favor of the Notes Claimholders in respect of such Collateral and (ii) the Lien in favor of the Revolving Credit Claimholders shall be subordinated to the extent set forth in this Agreement; or

 

(2)           any objection by the US Revolving Credit Collateral Agent or the Revolving Credit Claimholders to any motion, relief, action or proceeding based on the US Revolving Credit Collateral Agent or the Revolving Credit Claimholders claiming a lack of adequate protection with respect to the Revolving Credit Primary Collateral.

 

(b)           The US Revolving Credit Collateral Agent, on behalf of itself and the Revolving Credit Claimholders, agrees that none of them shall contest (or support any other Person contesting):

 

(1)           any request by the Notes Collateral Agent or any Notes Claimholders for adequate protection with respect to the Notes Collateral; provided that (A) such adequate protection claim shall not seek the creation of any Lien over additional assets or property of any Grantor other than with respect to assets or property that constitute Notes Collateral and (B) if such additional assets or property shall also constitute Revolving Credit Primary Collateral, (i) a Lien shall have been created in favor of the Revolving Credit Claimholders in respect of such Collateral and (ii) the Lien in favor of the Notes Claimholders shall be subordinated to the extent set forth in this Agreement; or

 

(2)           any objection by the Notes Collateral Agent or any Notes Claimholders to any motion, relief, action or proceeding based on the Notes Collateral Agent or the Notes Claimholders claiming a lack of adequate protection with respect to the Notes Collateral.

 

(c)           Notwithstanding the foregoing provisions in this Section 6.3, in any Insolvency or Liquidation Proceeding:

 

(1)           if the Revolving Credit Claimholders (or any subset thereof) are granted, or in the event the US Revolving Credit Collateral Agent, on behalf of itself or any of the Revolving Credit Claimholders, seeks or requests adequate protection with respect to the Revolving Credit Primary Collateral in the form of additional collateral (even if such collateral is not of a type which would otherwise have constituted Revolving Credit Primary Collateral) in connection with any Cash Collateral use or DIP Financing, then, in either case, the Notes Collateral Agent, on behalf of itself or any of the Notes Claimholders, may seek or request adequate protection with respect to its interests in such additional collateral in the form of a Lien on the same additional collateral, which Lien will be subordinated (except to the extent that the Notes Collateral Agent already had a Lien on such Collateral (in which case the priorities established by Section 2.1 shall apply)) to the Liens securing the Revolving Credit Obligations and such Cash Collateral use or DIP Financing (and all Obligations relating thereto) on the same basis as the other Liens of the Notes Collateral Agent on Revolving Credit Primary Collateral; and

 

  

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(2)           if the Notes Claimholders (or any subset thereof) are granted, or in the event the Notes Collateral Agent, on behalf of itself or any of the Notes Claimholders, seeks or requests adequate protection with respect to the Notes Collateral in the form of additional collateral (even if such collateral is not of a type which would otherwise have constituted Notes Collateral) in connection with any Cash Collateral use or DIP Financing, then, in either case, the US Revolving Credit Collateral Agent, on behalf of itself or any of the Revolving Credit Claimholders, may seek or request adequate protection with respect to its interests in such additional collateral in the form of a Lien on the same additional collateral, which Lien will be subordinated (except to the extent that the US Revolving Credit Collateral Agent already had a Lien on such Collateral (in which case the priorities established by Section 2.1 shall apply)) to the Liens securing the Notes Obligations and such Cash Collateral use or DIP Financing (and all Obligations relating thereto) on the same basis as the other Liens of the US Revolving Credit Collateral Agent on Notes Collateral.

 

(d)           Except as otherwise expressly set forth in this Section or in Section 6.1 or in connection with the exercise of remedies with respect to the Collateral, nothing herein shall limit the rights of (i) the Notes Collateral Agent or the Notes Claimholders from seeking adequate protection with respect to their rights in the Collateral in any Insolvency or Liquidation Proceeding (including adequate protection in the form of a cash payment, periodic cash payments or otherwise) and (ii) the US Revolving Credit Collateral Agent or the Revolving Credit Claimholders from seeking adequate protection with respect to their rights in the Collateral in any Insolvency or Liquidation Proceeding (including adequate protection in the form of a cash payment, periodic cash payments or otherwise).

 

6.4           Avoidance Issues – If any Revolving Credit Claimholder or Notes Claimholder is required in any Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise pay to the estate of any Grantor any amount paid in respect of Revolving Credit Obligations or the Notes Obligations, as the case may be (a “Recovery”), then such Revolving Credit Claimholders or Notes Claimholders shall be entitled to a reinstatement of Revolving Credit Obligations or Notes Obligations, as the case may be, 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.

 

6.5           Reorganization Securities – Notwithstanding anything to the contrary in this Agreement, if, in any Insolvency or Liquidation Proceeding, (i) the Revolving Credit Claimholders or the Notes Claimholders (the “Applicable Junior Lien Claimholders”) receive pursuant to a plan of reorganization or similar dispositive restructuring plan a distribution of debt obligations (“Junior Lien Reorganization Securities”) in whole or in part on account of any junior Liens on the Notes Collateral or the Revolving Credit Primary Collateral, as the case may be (such Collateral as to which the applicable Claimholders have a junior Lien, the “Applicable Junior Collateral”) that are secured by Liens on such Applicable Junior Collateral, and (ii) the other Claimholders (the “Applicable Senior Lien Claimholders”) receive pursuant to such plan of reorganization or similar dispositive restructuring plan a distribution of debt obligations (“Senior Lien Reorganization Securities”) in whole or in part on account of their Revolving Credit Obligations or Notes Obligations, as the case may be, that are secured by Liens on such Applicable Junior Collateral, then (i) the Applicable Junior Lien Claimholders shall be entitled to retain their Junior Lien Reorganization Securities and shall not be obligated to turnover same to any or all of the Applicable Senior Lien Claimholders, and (ii) to the extent the Junior Lien Reorganization Securities and the Senior Lien Reorganization Securities are secured by Liens upon the same Applicable Junior Collateral, the provisions of this Agreement will survive the distribution of such Junior Lien Reorganization Securities and Senior Lien Reorganization Securities and will apply with like effect to the Junior Lien Reorganization Securities and Senior Lien Reorganization Securities, to such Liens securing such Junior Lien Reorganization Securities and Senior Lien Reorganization Securities and to the distribution of proceeds of such Applicable Junior Collateral.

 

  

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6.6           Post-Petition Interest – Neither the Notes Collateral Agent nor any Notes Claimholder shall oppose or seek to challenge any claim by the US Revolving Credit Collateral Agent or any Revolving Credit Claimholder for allowance in any Insolvency or Liquidation Proceeding of Revolving Credit Obligations consisting of Post-Petition Interest to the extent of the value of the Lien securing any Revolving Credit Claimholder’s claim, without regard to the existence of the Lien of the Notes Collateral Agent on behalf of the Notes Claimholders on the Revolving Credit Primary Collateral.

 

(b)           Neither the US Revolving Credit Collateral Agent nor any Revolving Credit Claimholder shall oppose or seek to challenge any claim by the Notes Collateral Agent or any Notes Claimholder for allowance in any Insolvency or Liquidation Proceeding of Notes Obligations consisting of Post-Petition Interest to the extent of the value of the Lien securing any Notes Claimholder’s claim, without regard to the existence of the Lien of the US Revolving Credit Collateral Agent on behalf of the Revolving Credit Claimholders on the Notes Collateral.

 

6.7           Separate Grants of Security and Separate Classification – Each of the US Revolving Credit Collateral Agent, Revolving Credit Claimholders, Notes Collateral Agent and Notes Claimholders acknowledges and agrees that (a) the grants of Liens pursuant to the Revolving Credit Collateral Documents and the Notes Collateral Documents constitute two separate and distinct grants of Liens and (b) because of, among other things, their differing rights in the Collateral, the Revolving Credit Obligations and the Notes Obligations are fundamentally different from one another and must be separately classified in any plan of reorganization proposed or adopted in any Insolvency or Liquidation Proceeding.  To further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that the claims of the Revolving Credit Claimholders and the Notes Claimholders in respect of the Revolving Credit Primary Collateral constitute only one secured claim (rather than separate classes of senior and junior secured claims), then the Revolving Credit Claimholders shall be entitled to receive, in addition to amounts distributed to them from, or in respect of, the Revolving Credit Primary Collateral with respect to principal, pre-petition interest and other claims, all amounts owing with respect to post-petition interest, fees, costs, and other charges, irrespective of whether a claim for such amounts is allowed or allowable in any such Insolvency or Liquidation Proceeding, before any distribution from, or in respect of, any such Revolving Credit Primary Collateral is made in respect of the claims held by the Notes Claimholders, with the Notes Claimholders hereby acknowledging and agreeing to turn over to the Revolving Credit Claimholders amounts otherwise received or receivable by them to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the claim or recovery of the Notes Claimholders.

 

6.8           Waiver – Each Agent, for itself and on behalf of the Claimholders, waives any claim it may hereafter have against any other Claimholder arising out of the election of such Claimholder 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.

 

  

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SECTION 7.  Reliance; Waivers; Etc.

 

7.1           Reliance – Other than any reliance on the terms of this Agreement, the US Revolving Credit Collateral Agent, on behalf of itself and the Revolving Credit Claimholders under its Revolving Credit Documents, acknowledges that it and such Revolving Credit Claimholders have, independently and without reliance on the Notes Collateral Agent or any Notes Claimholders, and based on documents and information deemed by them appropriate, made their own credit analysis and decision to enter into the Revolving 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 Revolving Credit Documents or this Agreement.  The Notes Collateral Agent, on behalf of itself and the Notes Claimholders under the Notes Documents, acknowledges that it and the Notes Claimholders have, independently and without reliance on the US Revolving Credit Collateral Agent or any Revolving Credit Claimholder, and based on documents and information deemed by them appropriate, made their own credit analysis and decision to enter into such Notes 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 Notes Documents or this Agreement.

 

7.2           No Warranties or Liability – The US Revolving Credit Collateral Agent, on behalf of itself and the Revolving Credit Claimholders under the Revolving Credit Documents, acknowledges and agrees that each of the Notes Collateral Agent and the Notes Claimholders have made no express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectability or enforceability of any of the Notes Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon.  Except as otherwise provided in this Agreement, the Notes Collateral Agent and the Notes Claimholders will be entitled to manage and supervise their respective Notes and extensions of credit under the Notes Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate.  The Notes Collateral Agent, on behalf of itself and the Notes Claimholders, acknowledges and agrees that each of the US Revolving Credit Collateral Agent and the Revolving Credit Claimholders have made no express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectability or enforceability of any of the Revolving Credit Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon.  Except as otherwise provided in this Agreement, the US Revolving Credit Collateral Agent and the Revolving Credit Claimholders will be entitled to manage and supervise their respective loans and extensions of credit under the Revolving Credit Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate.  The Notes Collateral Agent and the Notes Claimholders shall have no duty to the US Revolving Credit Collateral Agent or any of the Revolving Credit Claimholders, and the US Revolving Credit Collateral Agent and the Revolving Credit Claimholders shall have no duty to the Notes Collateral Agent or any of the Notes Claimholders, 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 any Grantor (including the Revolving Credit Documents and the Notes Documents), regardless of any knowledge thereof which they may have or be charged with.

 

7.3           No Waiver of Lien Priorities – No right of the US Revolving Credit Collateral Agent, the Revolving Credit Claimholders, the Notes Collateral Agent or the Notes Claimholders to enforce any provision of this Agreement, any Revolving Credit Document or any Notes Document shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of any Grantor or by any act or failure to act by any Agent, any Revolving Credit Claimholder or any Notes Claimholders, or by any noncompliance by any Person with the terms, provisions and covenants of this Agreement, any of the Revolving Credit Documents or any of the Notes Documents, regardless of any knowledge thereof which the US Revolving Credit Collateral Agent, the Notes Collateral Agent, the Revolving Credit Claimholders or the Notes Claimholders, or any of them, may have or be otherwise charged with.

 

  

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(b)           Without in any way limiting the generality of the foregoing paragraph (but subject to the rights of the Grantors under the Revolving Credit Documents and the Notes Documents and subject to the provisions of Section 5.3(a)), the US Revolving Credit Collateral Agent, the Revolving Credit Claimholders, the Notes Collateral Agent and the Notes Claimholders may, at any time and from time to time in accordance with the Revolving Credit Documents and the Notes Documents and/or applicable law, without the consent of, or notice to, the other Agent or the Revolving Credit Claimholders or the Notes Claimholders (as the case may be), without incurring any liabilities to such Persons 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 is affected, impaired or extinguished thereby) do any one or more of the following:

 

(1)           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 Obligations or any Lien or guaranty thereof or any liability of any Grantor, or any liability incurred directly or indirectly in respect thereof (including any increase in or extension of the Obligations, without any restriction as to the 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 US Revolving Credit Collateral Agent or the Notes Collateral Agent or any rights or remedies under any of the Revolving Credit Documents or the Notes Documents; provided that any such increase in the Revolving Credit Obligations shall not (subject to the provisions of Section 6.1) increase the sum of the Loans (as defined in the Revolving Credit Agreement) constituting principal under the Revolving Credit Agreement and the face amount of any letters of credit issued under the Revolving Credit Agreement and not reimbursed to an amount in excess of the Revolving Credit Cap Amount;

 

(2)           sell, exchange, release, surrender, realize upon, enforce or otherwise deal with in any manner and in any order any part of the Collateral (except to the extent provided in this Agreement) or any liability of any Grantor or any liability incurred directly or indirectly in respect thereof;

 

(3)           settle or compromise any Obligation or any other liability of any 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 in any manner or order that is not inconsistent with the terms of this Agreement; and

 

(4)           exercise or delay in or refrain from exercising any right or remedy against any Grantor or any security or any other Grantor or any other Person, elect any remedy and otherwise deal freely with any Grantor.

 

(c)           Except as otherwise provided herein, the Notes Collateral Agent, on behalf of itself and the Notes Claimholders, agrees that the Revolving Credit Claimholders and the US Revolving Credit Collateral Agent shall have no liability to the Notes Collateral Agent or any Notes Claimholder, and the Notes Collateral Agent, on behalf of itself and the Notes Claimholders, hereby waives any claim against any Revolving Credit Claimholder or the US Revolving Credit Collateral Agent, arising out of any and all actions which the Revolving Credit Claimholders or the US Revolving Credit Collateral Agent may take or permit or omit to take with respect to:

 

  

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(1)           the Revolving Credit Documents;

 

(2)           the collection of the Revolving Credit Obligations; or

 

(3)           the foreclosure upon, or sale, liquidation or other disposition of, any Revolving Credit Primary Collateral.  The Notes Collateral Agent, on behalf of itself and the Notes Claimholders, agrees that the Revolving Credit Claimholders and the US Revolving Credit Collateral Agent have no duty to them in respect of the maintenance or preservation of the Revolving Credit Primary Collateral, the Revolving Credit Obligations or otherwise.

 

(d)           Until the Discharge of Revolving Credit Obligations, the Notes Collateral Agent, on behalf of itself and the Notes Claimholders, 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 marshaling, appraisal, valuation or other similar right that may otherwise be available under applicable law with respect to the Revolving Credit Primary Collateral or any other similar rights a junior secured creditor may have under applicable law with respect to the Revolving Credit Primary Collateral.

 

7.4           Obligations Unconditional – All rights, interests, agreements and obligations of the US Revolving Credit Collateral Agent and the Revolving Credit Claimholders and the Notes Collateral Agent and the Notes Claimholders, respectively, hereunder shall remain in full force and effect irrespective of:

 

(b)           any lack of validity or enforceability of any Revolving Credit Documents or any Notes Documents;

 

(c)           except as otherwise expressly set forth in this Agreement, any change in the time, manner or place of payment of, or in any other terms of, all or any of the Revolving Credit Obligations or Notes 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 Revolving Credit Document or any Notes Document;

 

(d)           except as otherwise expressly set forth in this Agreement, 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 Revolving Credit Obligations or Notes Obligations or any guaranty thereof;

 

(e)           the commencement of any Insolvency or Liquidation Proceeding in respect of any Grantor; or

 

(f)           any other circumstances which otherwise might constitute a defense available to, or a discharge of, any Grantor in respect of the US Revolving Credit Collateral Agent, the Revolving Credit Obligations, any Revolving Credit Claimholder, the Notes Collateral Agent, the Notes Obligations or any Notes Claimholder in respect of this Agreement.

 

  

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SECTION 8.  Miscellaneous.

 

8.1           Conflicts – In the event of any conflict between the provisions of this Agreement and the provisions of any Revolving Credit Document or any Notes Document, 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 US Revolving Credit Collateral Agent, the Revolving Credit Claimholders and the Notes Collateral Agent and the Notes Claimholders may continue, at any time and without notice to any Agent or any other Person, to extend credit and other financial accommodations and lend monies to or for the benefit of any Grantor in reliance hereon.  The US Revolving Credit Collateral Agent, on behalf of itself and the Revolving Credit Claimholders, and the Notes Collateral Agent, on behalf of itself and the Notes Claimholders, 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.  Any provision of this Agreement that 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 any Grantor shall include such Grantor as debtor and debtor-in-possession and any receiver or trustee for any Grantor (as the case may be) in any Insolvency or Liquidation Proceeding.  This Agreement shall terminate and be of no further force and effect:

 

(b)           with respect to the US Revolving Credit Collateral Agent, the Revolving Credit Claimholders and the Revolving Credit Obligations, on the date of the Discharge of Revolving Credit Obligations, subject to the rights of the US Revolving Credit Collateral Agent and the Revolving Credit Claimholders under Section 6.4; and

 

(c)           with respect to the Notes Collateral Agent, the Notes Claimholders and the Notes Obligations, on the date of the Discharge of Notes Obligations, subject to the rights of the Notes Collateral Agent and the Notes Claimholders under Section 6.4.

 

8.3           Amendments; Waivers – No amendment, modification or waiver of any of the provisions of this Agreement shall be deemed to be made unless the same shall be in writing signed on behalf of the US Revolving Credit Collateral Agent and the Notes Collateral Agent or their respective authorized agent and each waiver, if any, shall be a waiver only with respect to the specific instance involved and shall in no way 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, no Grantor 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 are directly affected (which includes, but is not limited to any amendment to the Grantors’ ability to cause additional obligations to constitute Revolving Credit Obligations or Notes Obligations as the Grantors may designate or in connection with Section 5.3).  Notwithstanding the foregoing, it is understood and agreed that if required by the Notes Documents the US Borrower shall cause additional Domestic Guarantor Subsidiaries to execute counterparts of this Agreement acknowledging and agreeing to the terms hereof and thereafter each such Domestic Guarantor Subsidiary will be treated as a US Subsidiary Guarantor hereunder.

 

8.4           Information Concerning Financial Condition of the Grantors and their Subsidiaries – The US Revolving Credit Collateral Agent and the Revolving Credit Claimholders, on the one hand, and the Notes Collateral Agent and the Notes Claimholders, on the other hand, shall each be responsible for keeping themselves informed of (a) the financial condition of the Grantors and their Subsidiaries and all endorsers and/or guarantors of the Revolving Credit Obligations or the Notes Obligations and (b) all other circumstances bearing upon the risk of nonpayment of the Revolving Credit Obligations or the Notes Obligations.  Neither the US Revolving Credit Collateral Agent and the Revolving Credit Claimholders, on the one hand, nor the Notes Collateral Agent and the Notes Claimholders, on the other hand,  shall have any duty to advise the other of information known to it or them regarding such condition or any such circumstances or otherwise.  In the event that the US Revolving Credit Collateral Agent or any of the Revolving Credit Claimholders, on the one hand, or the Notes Collateral Agent and the Notes Claimholders, on the other hand, undertakes at any time or from time to time to provide any such information to any of the others, it or they shall be under no obligation:

 

  

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(b)           to make, and 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;

 

(c)           to provide any additional information or to provide any such information on any subsequent occasion;

 

(d)           to undertake any investigation; or

 

(e)           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

 

(a)            – Each Agent, for itself and on behalf of the Claimholders for whom it acts as Agent, hereby agrees not to assert or to enforce any rights of subrogation it may acquire as a result of any payment hereunder until the Discharge of Revolving Credit Obligations or the Discharge of Notes Obligations, as applicable, has occurred with respect to the other Claimholders.

 

8.6           SUBMISSION TO JURISDICTION; WAIVERS – EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING HERETO, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY 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.  NOTHING IN THIS AGREEMENT OR ANY OTHER REVOLVING CREDIT DOCUMENT OR NOTES DOCUMENT SHALL AFFECT ANY RIGHT THAT THE US REVOLVING CREDIT COLLATERAL AGENT OR THE NOTES COLLATERAL AGENT OR ANY REVOLVING CREDIT CLAIMHOLDER OR NOTES CLAIMHOLDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER REVOLVING CREDIT DOCUMENT OR NOTES DOCUMENT AGAINST ANY GRANTOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

  

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(b)           EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER REVOLVING CREDIT DOCUMENT OR NOTES DOCUMENT IN ANY COURT REFERRED TO IN SECTION 8.6(a).  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(c)           EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER REVOLVING CREDIT DOCUMENT OR NOTES DOCUMENT, IN THE MANNER PROVIDED FOR NOTICES (OTHER THAN TELECOPIER) IN SECTION 8.7.  NOTHING IN THIS AGREEMENT OR ANY OTHER REVOLVING CREDIT DOCUMENT OR NOTES DOCUMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE REQUIREMENTS OF LAW.

 

(d)           EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF 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, ANY OTHER REVOLVING CREDIT DOCUMENT OR NOTES DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

8.7           Notices – All notices to the Revolving Credit Claimholders and the Notes Claimholders permitted or required under this Agreement shall also be sent to the US Revolving Credit Collateral Agent and the Notes Collateral Agent, respectively.  Unless otherwise specifically provided herein, all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier.  Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient).  For the purposes hereof, the addresses of the parties hereto shall be as set forth below each party’s name on Annex I attached 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 in accordance with this Section 8.7.

 

  

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8.8           Further Assurances – The US Revolving Credit Collateral Agent on behalf of itself and the Revolving Credit Claimholders, the Notes Collateral Agent on behalf of the Notes Claimholders, and the Grantors, each agree 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 US Revolving Credit Collateral Agent or the Notes Collateral Agent may reasonably request to effectuate the terms of and the Lien priorities contemplated by this Agreement.  Without limiting the generality of the foregoing, all such Persons agree upon request by the US Revolving Credit Collateral Agent or the Notes 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 Revolving Credit Collateral or Notes Collateral, as applicable, and the steps taken to perfect their respective Liens thereon and the identity of the respective parties obligated under the Revolving Credit Documents and the Notes Documents.

 

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

 

8.10         Binding Effect on Successors and Assigns and on Claimholders – This Agreement shall be binding upon the US Revolving Credit Collateral Agent, the Revolving Credit Claimholders, the Notes Collateral Agent, the Notes Claimholders and their respective successors and assigns.  The Notes Collateral Agent represents that it has not agreed to any modification of the provisions in the Notes Documents authorizing it to execute this Agreement and bind the Notes Claimholders, and the US Revolving Credit Collateral Agent represents that it has not agreed to any modification of the provisions in the Revolving Credit Documents authorizing it to execute this Agreement and bind the Revolving Credit Claimholders.  Notwithstanding any implication to the contrary in any provision in any other section of the Agreement, neither the Notes Collateral Agent nor the US Revolving Credit Collateral Agent makes any representation regarding the validity or binding effect of the Notes Documents or the Revolving Credit Documents, respectively.

 

8.11         Specific Performance – The US Revolving Credit Collateral Agent and the Notes Collateral Agent may demand specific performance of this Agreement.  The US Revolving Credit Collateral Agent, on behalf of itself and the Revolving Credit Claimholders, and the Notes Collateral Agent, on behalf of itself and the Notes Claimholders, each 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 US Revolving Credit Collateral Agent or the Revolving Credit Claimholders or the Notes Collateral Agent or the Notes Claimholders, as the case may be.

 

8.12         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.

 

8.13         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 telecopier or other electronic means shall be effective as delivery of a manually executed counterpart of this Agreement or such other document or instrument, as applicable.

 

  

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8.14         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.

 

8.15         No Third Party Beneficiaries – 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 US Revolving Credit Collateral Agent, the Notes Collateral Agent, the Revolving Credit Claimholders and the Notes Claimholders.  Nothing in this Agreement shall impair, as between the Grantors and the US Revolving Credit Collateral Agent and the Revolving Credit Claimholders, or as between the Grantors and the Notes Collateral Agent and the Notes Claimholders, the obligations of the Grantors to pay principal, interest, fees and other amounts as provided in the Revolving Credit Documents and the Notes Documents, respectively.

 

8.16         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 US Revolving Credit Collateral Agent and the Revolving Credit Claimholders on the one hand and the Notes Collateral Agent and the Notes Claimholders on the other hand.  None of the Grantors or any other creditor thereof shall have any rights hereunder, and no Grantor may rely on the terms hereof.  Nothing in this Agreement is intended to or shall impair the obligations of any Grantor, which are absolute and unconditional, to pay the Revolving Credit Obligations and the Notes Obligations as and when the same shall become due and payable in accordance with their terms.

 

8.17         The Notes Collateral Agent – The Bank of New York Mellon Trust Company, N.A., in its capacity as Notes Trustee, has been appointed Notes Collateral Agent for the Holders pursuant to the Indenture.  It is expressly understood and agreed by the parties to this Intercreditor Agreement that any authority conferred upon the Notes Collateral Agent hereunder is subject to the terms of the delegation of authority made by the Holders to the Notes Collateral Agent pursuant to the Indenture, and that the Notes Collateral Agent has agreed to act (and any successor Notes Collateral Agent shall act) as such hereunder only on the express conditions contained therein.  The Notes Collateral Agent shall have all rights, benefits, privileges, indemnities and protections contained in the Indenture when acting in its capacity as Notes Collateral Agent hereunder.  Any successor Notes Collateral Agent appointed pursuant to the Indenture shall be entitled to all the rights, interests and benefits of the Notes Collateral Agent hereunder.

 

[Remainder of page intentionally left blank.]

 

  

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

 

 

	 	
BANK OF AMERICA, N.A.,

	 
	 	
as US Revolving Credit Collateral Agent

	 
	 	 	 	 	 
	 	 	 	 	 
	 	
By: 

	   /s/ H. Michael Wills 	 
	 	 	Name:	H. Michael Wills	 
	 	 	Title:	Senior Vice President	 

 

	 	

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,

	 
	 	

as Notes Collateral Agent

	 
	 	 	 	 	 
	 	 	 	 	 
	 	
By: 

	 /s/ Lawrence Dillard	 
	 	 	Name:	Lawrence Dillard	 
	 	 	Title:	Vice President	 

 

 

 

  

[Signature Page to Intercreditor Agreement]

  

Acknowledged and Agreed to by:

 

 

 

 

	
EDGEN MURRAY CORPORATION,

	 
	
as US Borrower

	 
	 	 	 	 
	 	 	 	 
	
By: 

	/s/ Dan Keaton	 
	 	Name:	Dan Keaton	 
	 	Title:	Chief Accounting Officer	 

 

	
EM HOLDINGS LLC,

	 
	
as Holdings

	 
	 	 	 	 
	 	 	 	 
	
By: 

	/s/ David L. Laxton, III	 
	 	Name:	David L. Laxton, III	 
	 	Title:	
Executive Vice President, Chief Financial Officer and Secretary

	 

 

	
BOURLAND & LEVERICH SUPPLY CO. LLC,

	 
	
as Additional US Borrower

	 
	 	 	 	 
	 	 	 	 
	
By: 

	
/s/ Robert Dvorak

	 
	 	Name:	
Robert Dvorak

	 
	 	Title:	
President and Chief Executive Officer

	 

 

	
EDGEN GROUP, INC.,

	 
	
as Parent

	 
	 	 	 	 
	 	 	 	 
	
By: 

	/s/ David L. Laxton, III	 
	 	Name:	David L. Laxton, III	 
	 	Title:	
Executive Vice President, Chief Financial Officer and Secretary

	 

 

	
EDG HOLDCO LLC,

	 
	
as EDG Holdco

	 
	 	 	 	 
	 	 	 	 
	
By: 

	/s/ David L. Laxton, III	 
	 	Name:	David L. Laxton, III	 
	 	Title:	
Executive Vice President, Chief Financial Officer and Secretary

	 

 

 

 

  

[Signature Page to Intercreditor Agreement]

  

ANNEX I

Notice Information

US Revolving Credit Collateral Agent

Bank of America, N.A.

901 Main Street, 11th Floor

TX1-492-11-23

Dallas, Texas 75202

Attention: Mike Wills

Telecopy: 214-209-4766

Notes Collateral Agent

The Bank of New York Mellon Trust Company, N.A.

10161 Centurion Pkwy. N., 2nd Floor

Jacksonville, Florida 32256

Attention:  Geraldine Creswell, Vice President

Telecopy:  (904) 645-1921

Telephone:  (904) 998-4724alamo101.htm

Exhibit 10.1

 

SALE AND PURCHASE AGREEMENT

 

THIS SALE AND PURCHASE AGREEMENT (this “Agreement”), dated as of December 21, 2012 (the “Execution Date”), by and among Alamo Energy Corp., a Nevada corporation (registered number 0001360334) and registered office at 10575 Katy Freeway, Suite 300,  Houston, Texas 77024,  (the “Seller”), and Northdown Energy Limited., a company registered in England (company number 7768741) whose registered office is at Oldfield House, Oldfield Road, London, England, SW19 4SD (“Buyer”).  Seller and Buyer are referred to collectively herein as the “Parties” and individually as a “Party.”  Capitalized terms not otherwise defined shall have the meanings assigned to such terms in Article X.

 

WITNESSETH:

 

WHEREAS, the Seller is the owner of the Transferred Interest and is the operator under the Licence and the JOA; and

 

WHEREAS, Seller desires to (i) sell and the Buyer desires to purchase the Transferred Interest; and (ii) transfer the operatorship under the Licence and the JOA to the Buyer or to such Person as the Buyer may nominate in writing to the Seller; and (iii) transfer to the Buyer, the Alamo/Aimwell Carry, upon the terms and subject to the conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual terms, conditions and other agreements set forth herein, the Parties hereby agree as follows:

 

ARTICLE I. 

SALE AND PURCHASE

 

Section 1.1.   Agreement to Sell and to Purchase.

 

(a) On the Closing Date and in each case, upon the terms and subject to the conditions set forth in this Agreement and in consideration of the Purchase Price the Seller shall:

 

(i)  assign, transfer and convey as legal and beneficial owner the Transferred Interest to the Buyer, and the Buyer shall purchase and accept from the Seller, the Transferred Interest, free and clear of all Encumbrances, except for (1) restrictions arising under the Licence; (2) the applicable terms and conditions of the Aimwell Agreement and (3) Encumbrances that result from the actions of the Buyer.

 

(ii)  transfer of the operatorship under the Licence and the JOA to the Buyer or to such Person as the Buyer may nominate in writing to the Seller; and

 

(iii) transfer to the Buyer, the Alamo/Aimwell Carry.

 

(b) The closing of the sale and purchase set forth in Section 1.1(a), being when all, but not part, of the actions and deliveries specified in Section 1.2 shall occur, (the “Closing”) shall take place at Alamo’s UK office on the date hereof or such later day as the Parties shall agree.  The date on which the Closing occurs is referred to in this Agreement as the “Closing Date.”

 

(c) The Buyer hereby agrees that effective simultaneously with the Closing and its acquisition of the Transferred Interest (effected, inter alia, by the execution of all of the Transaction Documents by all parties thereto), it will be bound by and subject to the terms and conditions of the Licence.

(d) The Buyer hereby agrees that effective simultaneously with the Closing and its acquisition of the Transferred Interest (effected,  inter alia, by the execution of all of the Transaction Documents by all parties thereto) the Buyer will assume and agree to pay, perform and discharge when due  the duties and liabilities of the Seller attributable to the Alamo/Aimwell Carry under the Aimwell Agreement from and after the consummation of the Closing.

 

  

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Section 1.2.   Deliveries at Closing.

 

(a) Prior to Closing, the Parties shall take all but not part only of the following actions, and at the Closing, the Seller shall make the following deliveries to Buyer and take the following further actions:

 

(i) Deed of Licence Assignment.  The Deed of Licence Assignment in the form attached hereto as Exhibit A, evidencing the assignment, transfer and delivery to Buyer of the Transferred Interest, duly executed and delivered by Seller (the “Licence Assignment”).

 

(ii) Deed of Interest Assignment. The Deed of Interest Assignment in the form attached hereto as Exhibit B duly executed and delivered by Seller.

 

(iii) Novation and Amendment of Participation Agreement regarding Petroleum Exploration and Development Licence PEDL 245 dated 14 October, 2008 as amended and novated from time to time.  The Novation and Amendment of Participation Agreement regarding Petroleum Exploration Licence PEDL 245 in the form attached hereto as Exhibit C, duly executed by Seller and Aimwell (the “Novation and Amendment of Participation Agreement”).

 

(iv) Novation of the Joint Operating Agreement. The Novation of the Joint Operating Agreement for UK Onshore Petroleum Exploration and Development Licence No. PEDL 245 Blocks TQ26, TQ36, TQ46 and TQ56 dated 14th November, 2011 in the form attached hereto as Exhibit D, duly executed by Seller and Aimwell (the “JOA”).

 

(v) Transfer of Operatorship Agreement. The Transfer of Operatorship Agreement in the form attached hereto as Exhibit E duly executed by the Seller and Aimwell;

 

(vi) deliver to the Buyer (to the extent not already delivered prior to Closing) a copy of the relevant consents, approvals, confirmations or waivers, if any, referred to in the Section 5.1 and obtained by or on behalf of the Seller; and

 

(vii) deliver to the Buyer (to the extent not already delivered prior to Completion) a copy, certified as a true copy and in full force and effect by a director or the secretary of the Seller, of a resolution of the board of directors of the Seller authorising its entry into the transactions contemplated by this Agreement and authorising a person or persons to execute the same and the documents listed in (i) to (iv) inclusive above on behalf of the Seller.

 

(b) At the Closing, the Buyer shall make the following deliveries to Seller and take the following further actions:

 

(i)  Purchase Price.  At the Closing, the Buyer shall make payment to the Seller of the Purchase Price.

 

(ii)  The Deed of Licence Assignment.  The Deed of Licence Assignment duly executed and delivered by Buyer.

 

(iii) Deed of Interest Assignment.  The Deed of Interest Assignment duly executed and delivered by Buyer.

 

(iv) Novation and Amendment of Participation Agreement. The Novation and Amendment of Participation Agreement duly executed by Buyer.

 

(v) Novation of the Joint Operating Agreement. The Novation of the Joint Operating Agreement, duly executed by Buyer.

 

(vi) Transfer of Operatorship Agreement. The Transfer of Operatorship Agreement duly executed by the Buyer;

 

(vii) deliver to the Seller (to the extent not already delivered prior to Completion) a copy, certified as a true copy and in full force and effect by a director or the secretary of the Buyer, of a resolution of the board of directors of the Seller authorising its entry into the transactions contemplated by this Agreement and authorising a person or persons to execute the same and the documents listed in (ii) to (v) inclusive above on behalf of the Buyer.

 

  

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Section 1.3.   Purchase Price.  The Purchase Price shall be One Hundred and Fifty-Six Thousand Two Hundred and Fifty Pounds Sterling (£156,250), payable to Seller as specified below (the “Purchase Price”).  The Purchase Price shall be paid at Closing by electronic transfer to the Seller in immediately available funds to the Bank Account notified in writing by the Seller to the Buyer prior to Closing.

 

ARTICLE II. 

REPRESENTATIONS AND WARRANTIES OF SELLER

 

As of the Execution Date, and also as of the Closing Date (except to the extent that any representation is specifically limited by the terms of such representation to the date of this Agreement or another specified date), the Seller hereby represents and warrants to Buyer as follows:

 

Section 2.1.   Organization.  The Seller (i) is a corporation, duly incorporated or formed, validly existing and in good standing under the Laws of Nevada, (ii) has all requisite legal and entity power and authority to own, lease and operate the Transferred Interest and to conduct its businesses as currently owned and conducted, and (iii) is duly qualified to do business and is in good standing in each jurisdiction in which the nature of the business conducted by it or the ownership or leasing of the Transferred Interest requires it to so qualify, except with respect to circumstances which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect or to prevent or materially delay the consummation of the transactions contemplated by this Agreement or to impair the Seller’s ability to perform  and give effect to its obligations under this Agreement.

 

Section 2.2.   Validity of Agreement; Authorization.  The Seller has with respect to this Agreement on the Execution Date and on the Closing Date, full power and authority to enter into this Agreement and the other Transaction Documents to which it is party and to perform its obligations hereunder and thereunder and to comply with the terms and conditions hereunder and thereunder. The execution and delivery of this Agreement and such other Transaction Documents and the performance by the Seller of its obligations hereunder and thereunder have or will have been duly authorized by the appropriate governing body of the Seller, and no other proceedings on the part of the Seller are or will be necessary to authorize such execution, delivery and performance.

 

Section 2.3.   No Conflict or Violation.  The execution, delivery and performance of this Agreement and the other Transaction Documents to which the Seller is or will be a party does not and will not: (a) violate or conflict with any provision of the Organizational Documents of the Seller; (b) violate any applicable provision of law, statute, judgment, order, writ, injunction, decree, award, rule, or regulation (“Law”) of any Governmental Authority binding on the Seller; (c) violate, result in a breach of, constitute (with due notice or lapse of time or both) a default or cause any obligation, penalty or premium to arise or accrue under any agreements, contract, lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument, arrangements or judgments to which the Seller or any of its Affiliates is a party or by which the Seller or any of its Affiliates is bound or affected or to which any of its stock, properties or assets is subject; (d) result in the creation or imposition of any Encumbrances, limitations or restrictions upon any of the properties or assets of the Seller; or (e) following the receipt of the consent of DECC, result in the cancellation, modification, revocation or suspension of any consent, the Licence, permit, certificate, franchise, authorization, registration or filing with any Governmental Authority of the Seller as could not reasonably be expected to have a Material Adverse Effect or to prevent or materially delay the consummation of the transactions contemplated by this Agreement or to impair the Seller’s ability to perform and give effect to its obligations under this Agreement.

 

Section 2.4.   Consents and Approvals.   The Seller’s execution and delivery of this Agreement and following receipt of the consents and approvals stated in Section 5.1, the other Transaction Documents to which the Seller is party or performance of its obligations hereunder or thereunder, does not require the consent, approval, waiver or authorization of, or filing, registration or qualification with, any Person whether or not under any agreements, contract, lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument, arrangements or judgments to which the Seller or any of its Affiliates is a party or by which the Seller or any of its Affiliates is bound or affected or to which any of its stock, properties or assets is subject.

 

Section 2.5.   No Claims on Seller. There are no Legal Proceedings pending or, to the Knowledge of Seller threatened, against or involving the Seller or any of its assets that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect or to prevent or delay the consummation of the transaction contemplated by this Agreement or to impair the Seller’s ability to perform and give effect to its obligations under this Agreement, and there is no order, judgment, injunction or decree of any Governmental Authority outstanding against the Seller that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect or to prevent or delay the consummation of the transaction contemplated by this Agreement or to impair the Seller’s ability to perform its obligations under this Agreement.  “Legal Proceeding” shall mean any judicial or administrative, disputes, suits, proceedings (public or private), judgment, claims, investigations or proceedings before any Governmental Authority or arbitral actions.

 

  

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Section 2.6.   Accounting.  Seller has kept its books, records and accounts in respect of the application for (and otherwise in connection with) the Licence in accordance with all applicable Law and the terms of the JOA.

 

Section 2.7.   Ownership.  Seller is a licensee of the Licence and the sole and full legal, beneficial and equitable owner of the Transferred Interest with the right to assign the same to Buyer.

 

 

Section 2.8.   Encumbrances.  The Transferred Interest will on Closing be free of all Encumbrances save only the obligations under the Licence and the Aimwell Agreement nor, subject as aforesaid, is there in effect any agreement or commitment to create any Encumbrance; nor are there any other matters which restrict the Seller’s ability freely to dispose of the Transferred Interest or any petroleum attributable thereto.

 

Section 2.9.   No Claims on Licence.  The Licence and the Transferred Interest are not subject to any judgments or judicial or arbitral awards and there is no agreement to create the same nor, to the Knowledge of Seller, is there any notice of any pending or threatened litigation, arbitration, administrative, bankruptcy or insolvency proceedings, force majeure, environmental or health and safety liabilities, governmental inquiries or notices from DECC or any governmental or regulatory authority having responsibility for the area held under the Licence.

 

Section 2.10.   Due Diligence.  Save to the extent that the Buyer is already a party thereto, the Seller has provided Buyer with true and accurate copies of the Transferred Interest Documents.

 

Section 2.11.   Environmental Issues.  To the Knowledge of Seller, there are no material environmental liabilities affecting the Transferred Interest or any health or safety or environmental incident which would materially affect the value of the Transferred Interest.

 

Section 2.12.   No Breach.  There is no default or material breach by Seller under the Transferred Interest Documents or the Aimwell Agreement.

 

Section 2.13.   No Other Agreement.  Except for the Transferred Interest Documents  and the Aimwell Agreement, Seller is not a party to any other agreement, undertaking or arrangement with a third party in relation to the Transferred Interest. The Transferred Interest Documents are the only material documents which govern or relate to the creation, existence and validity of the Transferred Interest.

 

Section 2.14.   Required Licence Program.  To the Knowledge of Seller, DECC or the Secretary of State for Energy and Climate Change, have not given any indication of its intention to require any works in excess of or different from, those currently set out in the Licence.

 

Section 2.15.   Licence Full Force and Effect. The Licence and all rights and interests of the Seller thereunder or deriving therefrom are in full force and effect. No notice has been given to the Seller of any intention to revoke the Licence. No act or omission of the Seller has occurred which would entitle the Secretary of State for Energy and Climate Change to revoke, rescind, avoid, repudiate or terminate the Licence  prior to expiry of the Initial Term.

 

Section 2.16.   Insolvency. No order has been made or petition presented or resolution passed for the winding-up of the Seller or for an administration order in respect of the Seller and no distress, execution or other process has been levied on any of its assets and the Seller is not insolvent or unable to pay its debts for the purposes of any insolvency legislation applicable to the Seller and its assets and no administrative receiver or receiver or receiver and manager has been appointed by any person of its business or assets or any part thereof and no power to make any such appointment has arisen.

 

Section 2.17.   Operations.  During the period of its ownership of the Licence and the Transferred Interest, the Seller has carried on its activities in relation to the Licence and the Transferred Interest in all material respects in the usual course of its business and in accordance with good and prudent international oil and gas industry practices and will continue to so do during the period from the date hereof to the Closing Date.

 

Section 2.18.   Operatorship.  The Seller, acting in its capacity as Operator under the JOA, has not entered into any agreements or commitments whether or not as agent for and on behalf of the Participants, relating to the Licence and operations thereunder nor are there any monies outstanding or due to any third party relating to the Licence and/or operations thereunder and/or the Transferred Interest.

 

  

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Section 2.19.   Brokers.  No broker, investment banker, financial advisor or other Person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with this Agreement or any of the transactions contemplated hereby based upon arrangements made by or on behalf of Seller.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF BUYER

 

As of the date hereof and also as of the Closing Date (except to the extent that any representation is specifically limited by the terms of such representation to the date of this Agreement or another specified date), Buyer hereby represents and warrants as follows:

 

Section 3.1.   Organization.  Buyer is (i) a limited company duly formed, validly existing and in good standing under the Laws of England, (ii) has all requisite legal and entity power and authority  to conduct its businesses as currently owned and conducted, (iii) has all material governmental licenses, authorizations, permits, consents and approvals required to conduct its businesses as currently owned and conducted, except with respect to circumstances which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect on Buyer or to prevent or materially delay the consummation of the transactions contemplated by this Agreement or to impair Buyer’s ability to perform its obligations under this Agreement.

 

Section 3.2.   Validity of Agreement; Authorization.  Buyer has with respect to this Agreement on the Execution Date and on the Closing Date, the power and authority to enter into this Agreement and the other Transaction Documents to which it is or will be a party and to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and such other Transaction Documents and the performance of Buyer’s obligations hereunder and thereunder have been duly authorized by the appropriate governing body of Buyer, and no other proceedings on the part of Buyer are necessary to authorize such execution, delivery and performance.

 

Section 3.3.   No Conflict or Violation.  The execution, delivery and performance of this Agreement and the other Transaction Documents to which Buyer is or will be a party does not and will not: (a) violate or conflict with any provision of the Organizational Documents of the Buyer; (b) violate any applicable provision of Law; (c) violate, result in a breach of, constitute (with due notice or lapse of time or both) a default or cause any obligation, penalty or premium to arise or accrue under any agreements, contract, lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument, arrangements or judgments to which Buyer is a party or by which Buyer is bound or to which any of its stock, properties or assets is subject; (d) result in the creation or imposition of any Encumbrance upon any of its properties or assets, or (e) result in the cancellation, modification, revocation or suspension of any consent, license, permit, certificate, franchise, authorization, registration or filing with any Governmental Authority of Buyer except where such violations, breaches, defaults or Encumbrances in the aggregate would not have a Material Adverse Effect on the transactions contemplated hereby.

 

Section 3.4.   Consents and Approvals.

Except as could not reasonably be expected to have a Material Adverse Effect or to prevent or materially delay the consummation of the transactions contemplated by this Agreement or to impair the Buyer’s ability to perform its obligations under this Agreement, the Buyer’s execution and delivery of this Agreement and following receipt of the consents and approvals stated in Section 5.1, the other Transaction Documents to which the Buyer is party or performance of its obligations hereunder or thereunder, does not require the consent, approval, waiver or authorization of, or filing, registration or qualification with, any Person.

Section 3.5.   Brokers.  No broker, investment banker, financial advisor or other Person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with this Agreement or any of the transactions contemplated hereby based upon arrangements made by or on behalf of Buyer and for which Seller will have any responsibility.

 

  

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ARTICLE IV

 

COVENANTS

 

    Section 4.1.   Consents and Approvals.

 

    (a) The Seller has prior to the date of this Agreement filed its request to the Secretary of State for Energy and Climate Change to transfer and assign the Transferred Interest to Buyer and to transfer the operatorship to the Buyer or to such Person as the Buyer may nominate in writing to the Seller. The Secretary of State for Energy and Climate Change provided such approval on 29th November, 2012. The Seller and Buyer shall each use all commercially reasonable efforts to obtain any other consents from Governmental Authorities required in connection with the assignment and transfer of the Transferred Interest under this Agreement and will cooperate fully in promptly seeking to obtain all such authorizations, consents, and approvals, giving such notices, and making such filings as are necessary.

 

    (b)  The Seller shall deliver to the Buyer immediately prior to the Seller’s execution of this Agreement, the written  consent, in the form set out in Exhibit G, dated on or about the date of execution of this Agreement, of Eurasian Capital Partners Limited to the Seller’s execution of this Agreement and the sale of the Transferred Interest to the Buyer.

 

Section 4.2 Further Assurances.  Upon the request of any Party at any time on or after the Closing Date, the other Party will promptly execute and deliver, such further instruments of assignment, transfer, conveyance, endorsement, direction or authorization and other documents as the requesting Party or its counsel may reasonably request in order to perfect title of Buyer and its successors and assigns to the Transferred Interest and otherwise to effectuate the purposes of this Agreement.

 

ARTICLE V

 

CONDITIONS TO CLOSING

 

        Section 5.1.   Shared Conditions to the Parties’ Obligations.  The obligation of the Parties to proceed with the Closing contemplated hereby is subject to the receipt by Buyer and Seller of :

 

(a) the receipt, in form and substance reasonably acceptable to the Seller and the Buyer, of the written consent from the Secretary of State for Energy and Climate Change to the assignment of the Transferred Interest to the Buyer and the transfer of the operatorship under the Licence and the JOA to the Buyer or to such Person as the Buyer may nominate in writing to the Seller; and

 

(b) Aimwell Energy Limited’s execution of the Licence Assignment, Novation and Amendment of Participation Agreement, the Novation of the Joint Operating Agreement and the Transfer of Operatorship Agreement together with Aimwell Energy Limited’s consent to the transfer of the operatorship under the Licence and the JOA to the Buyer or to such Person as the Buyer may nominate in writing to the Seller.

 

        Waiver of any of any of the above conditions shall require the mutual consent of the Seller and the Buyer.

 

The Seller and the Buyer shall keep each other informed of the progress towards the satisfaction of the conditions stated above and shall notify the other as soon as is reasonably practicable after a condition has been satisfied or, as the case may be, waived or any circumstances which may result in any of those conditions not being satisfied.

 

  

6

  

 Section 5.2.   Conditions to Buyer’s Obligations.  The obligations of Buyer to consummate the transactions contemplated by this Agreement are subject to the fulfillment, at  or before the Closing Date, of the following conditions, any one or more of which may be waived in writing by Buyer in its sole discretion:

 

(a)                 The release of the Transferred Interest from all security interests granted by the Seller in favour of Eurasian Capital Partners Limited together with a Deed of Release in the form attached as Exhibit H.

 

(b) The Seller shall deliver to the Buyer all of the items specified in Section 1.2(a), in each case duly executed and dated the Closing Date.

(c)           All representations and warranties made by the Seller in Article II of this Agreement shall be true and correct in all material respects on and as of the date hereof and on each day from the date hereof until the Closing Date and, except to the extent that any representation is specifically limited by the terms of such representation to the date of this Agreement or another specified date, on the Closing Date as if again made by the Seller on and as of the Closing Date.

 

Section 5.3.   Conditions to Seller’s Obligations.  The obligations of the Seller to consummate the transactions contemplated by this Agreement are subject to the fulfillment, at or before the Closing Date, of the following conditions, any one or more of which may be waived in writing by the Seller in its sole discretion:

 

(a) Buyer shall have paid to the Seller the Purchase Price as provided in Sections 1.2 (b) (i) and 1.3.

 

(b) All representations and warranties made by Buyer in this Agreement shall be true and correct in all material respects on and as of the date hereof and on each day from the date hereof until the Closing Date and, except to the extent that any representation is specifically limited by the terms of such representation to the date of this Agreement or another specified date, on the Closing Date as if again made by Buyer on and as of the Closing Date.

 

(c) Buyer shall have delivered to the Seller the items specified in Section 1.2(b), in each case duly executed and dated the Closing Date.

 

 ARTICLE VI

 

TERMINATION

 

Section 6.1.   Methods of Termination.  This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time before the Closing:

 

(a) by the mutual written agreement of the Seller and Buyer;

 

(b) by written notice from Seller to the Buyer specifying with particularity the applicable Breach, if Buyer has committed a Breach, and such Breach would result in the failure of any condition to Closing set forth in Section 5.3; provided, if such Breach is curable through the exercise of commercially reasonable efforts, then the Seller may only terminate this Agreement if such Breach is not cured by Buyer as applicable, within thirty (30) days after the receipt by the Buyer of a Notification provided pursuant to Section 9.4 specifying with particularity such Breach;

 

(c) by written notice from Buyer to Seller specifying with particularity the applicable Breach, if the Seller has committed a Breach, and such Breach would result in the failure of the condition to Closing set forth in Section 5.2; provided, if such Breach is curable through the exercise of commercially reasonable efforts, then Buyer may only terminate this Agreement if such Breach is not cured within thirty (30) days after the receipt by the Seller of a Notification provided pursuant to Section 9.4 specifying with particularity such Breach.

 

  

7

  

Section 6.2.   Effect of Termination.  The following provisions shall apply in event of a termination of this Agreement:

 

(a)                 if the Seller has the right to terminate this Agreement pursuant to Section 6.1(b), then the Seller may elect either to (i) specifically enforce the covenants and obligations of Buyer under this Agreement but entirely without prejudice to the rights of the Buyer to pursue the Seller for damages following Closing; or (ii) terminate this Agreement without prejudice to the Seller’s rights in  law or under this Agreement.

 

(b)                 if Buyer has the right to terminate this Agreement pursuant to Section 6.1(c) then Buyer may elect either to (i) specifically enforce the covenants and obligations of the Seller under this Agreement but entirely without prejudice to the rights of the Seller to pursue the Buyer for damages following Closing; or (ii) terminate this Agreement without prejudice to the Buyer’s rights in  law or under this Agreement.

 

(c)                 in the event of termination of this Agreement pursuant to Section 6.1 hereof, then except as otherwise set forth in this Section 6.2, this Agreement shall forthwith become void and there shall be no other liability hereunder on the part of Buyer or the Seller (or their respective officers or directors).

 

ARTICLE VI

 

SURVIVAL

 

Section 7.1.     Survival.  The representations and warranties of the Seller or the Buyer contained herein or in any certificates or other documents delivered pursuant to this Agreement on the Closing Date shall survive the Closing for a period of  eighteen (18)  following the Closing Date. Notwithstanding any other provision of this Agreement, should it be determined after Closing that Seller had breached any of  the representations and warranties of the Seller under this Agreement, Buyer’s sole remedy shall be limited to damages.

 

ARTICLE VII

 

INDEMNITIES

 

Section 8.1.   Indemnities

 

	
(a)  

	
The Seller shall be liable for costs, charges, expenses, duties, liabilities and obligations in respect of the Interests (together “Obligations”) which accrue in or relate to any period before the date hereof and the Seller shall be entitled to all income, receipts, credits, rebates and other benefits in respect of the Transferred Interests (together “Benefits”) which accrue in or relate to any period before the date hereof.

 

	
(b)  

	
The Buyer shall be liable for all Obligations and entitled to all Benefits which accrue in or relate to any period on or after the Closing Date.

 

	
(c)   

	
Save to the extent of any express provision to the contrary contained in this Agreement:

 

	
(i)  

	
if any Obligations are incurred by the Seller in respect of any period on or after the Closing Date, the Buyer shall reimburse and indemnify the Seller in respect thereof;

 

	
(ii)  

	
if any Obligations are incurred by the Buyer in respect of any period prior to the Closing Date, the Seller shall reimburse and indemnify the Buyer in respect thereof;

 

	
(iii)  

	
if any Benefits accrue to the Seller in respect of any period on or after the Closing Date, the Seller shall account to and reimburse the Buyer in respect thereof; and

 

	
  

	
(iv)   

	
if any Benefits accrue to the Buyer in respect of any period prior to the Closing Date hereof, the Buyer shall account to and reimburse the Seller in respect thereof.

 

  

8

  

	
(d)   

	
Any amount to be paid or reimbursed in accordance with Section 8.1 (c) above or any other provision of this Article 8.1 shall be paid or reimbursed within ten (10) says of receipt thereof (or, in the case of Obligations, within ten (10) days of receipt of notification from the Party which has incurred such Obligations) to such account nominated by the Seller  or the Buyer (as the case may be).

 

	
(e)  

	
All adjustments, payments and reimbursements made, or to be made, and the ascertainment of all Obligations and Benefits in relation to the Interests under this Article 8.1 shall be calculated on an Accruals Basis.

 

	
(f)   

	
The rights and obligations in this Article 8.1 shall not come into effect unless and until Closing takes place.

 

ARTICLE IX

 

MISCELLANEOUS PROVISIONS

 

Section 9.1.   Successors and Assigns.  Except as set forth in the following sentence, this Agreement shall inure to the benefit of, and be binding upon, the Parties and their respective successors and permitted assigns; provided, however, that no Party shall assign or delegate any of its rights or obligations created under this Agreement without the prior written consent of the other Party.

 

Section 9.2.   Third Party Beneficiary.  A person who is not a party to this Agreement shall have no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any of the terms of this Agreement.

 

Section 9.3.   Fees and Expenses.  Except as otherwise expressly provided in this Agreement, all legal, accounting, financial advisory and other fees, costs and expenses of a Party incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Party incurring such fees, costs or expenses.

 

Section 9.4.   Notices.  All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given or made if delivered personally or sent by overnight courier or sent by facsimile (with evidence of confirmation of receipt) to the Parties at the following addresses:

 

If to Seller, to:

 

Alamo Energy Corp.

   10575 Katy Freeway, Ste. 300

Houston, TX 77024

Attention: Allan Millmaker

    Facsimile: #7134648381

 

    alternatively by email: allan@alamoenergycorp.com

with a copy (which shall not constitute notice) to:

Richard L. Edmonson

Hall Estill Attorneys at Law

320 South Boston Ave., Ste. 200

Tulsa, Oklahoma 74103

Facsimile: (918) 594-0505

alternatively by email: REdmonson@HallEstill.com

  

9

  

If to the Seller, to:

 

Northdown Energy Limited

    Oldfield House,

    Oldfield Road,

    London,

    SW19 4SD

 

    Facsimile: Not Applicable

    alternatively by email: peter.ross@northdownenergy.com

 

with a copy (which shall not constitute notice) to:

 

    Alex MacDonald

    2 Rookery Mead

    Netherne on the Hill

    Coulsdon

    Surrey

    CR5 1NY

    Facsimile: Not Applicable

    alternatively by email: alexmacd47@gmail.com

or to such other Persons or at such other addresses as shall be furnished by any Party by like notice to the other Party, and such notice or communication shall be deemed to have been given or made as of the date so delivered or mailed.  No change in any of such addresses shall be effective insofar as notices under this Section 9.4 are concerned unless notice of such change shall have been given to such other Party as provided in this Section 9.4.

Section 9.5.   Entire Agreement.  This Agreement, together with the Exhibits hereto,  and the other Transaction Documents, represent the entire agreement and understanding of the Parties with reference to the transactions set forth herein and therein and no representations or warranties have been made in connection herewith and therewith other than those expressly set forth herein or therein.  This Agreement, together with the Exhibits hereto, and the other Transaction Documents, supersede all prior negotiations, discussions, correspondence, communications, understandings and agreements between the parties relating to the subject matter hereof or thereof, and all prior drafts of such documents, all of which are merged into such documents.  No prior drafts of such documents and no words or phrases from any such prior drafts shall be admissible into evidence in any action or suit involving such documents.

Section 9.6.   Waivers and Amendments.  The Seller or Buyer may, by written notice to the other Party:  (a) extend the time for the performance of any of the obligations or other actions of the other Party; (b) waive any inaccuracies in the representations or warranties of the other Party contained in this Agreement or in any document delivered pursuant to this Agreement by the other Party; (c) waive compliance with any of the covenants of the other Party contained in this Agreement; (d) waive performance of any of the obligations of the other Party created under this Agreement; or (e) waive fulfillment of any of the conditions to its own obligations under this Agreement or in any documents delivered pursuant to this Agreement by the other Party.  The waiver by any Party of a Breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent Breach, whether or not similar, unless such waiver specifically states that it is to be construed as a continuing waiver.  This Agreement may be amended, modified or supplemented only by a written instrument executed by the Parties.

  

10

  

Section 9.7.   Severability.  This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof.  Furthermore, in lieu of any such invalid or unenforceable term or provision, the Parties shall negotiate in good faith to modify this Agreement to include a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.

Section 9.8.   Titles and Headings.  The Article and Section headings contained in this Agreement are solely for convenience of reference and shall not affect the meaning or interpretation of this Agreement or of any term or provision hereof.

Section 9.9.   Signatures and Counterparts.  Facsimile or electronic transmission of any signed original document and/or retransmission of any signed facsimile or electronic transmission shall be the same as delivery of an original.  At the request of Buyer or the Seller, the Parties will confirm facsimile or electronic transmission by signing a duplicate original document.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement.

Section 9.10.   Enforcement of the Agreement; Damages.  Each of the Parties hereto acknowledges and agrees that in the event any covenant or obligation of the acknowledging Party to be performed after Closing is not performed in accordance with the specific terms of this Agreement or is otherwise breached, then the other Party shall be entitled to an injunction or injunctions to prevent such non-performance or breach and to specifically enforce the covenants and obligations of the acknowledging Party to be performed after Closing, in any courts having jurisdiction.

Section 9.11.   Governing Law.  This Agreement and any non-contractual rights or obligations arising out of or in connection with it or its subject matter shall be governed by and construed in accordance with the Laws of England and without regard to any conflicts of Laws concepts that would apply the substantive Law of some other jurisdiction and the Parties hereby irrevocably agree that the courts of England shall have exclusive jurisdiction to settle any dispute which may arise out of or in connection with this Agreement.

Section 9.12.   Construction.  Unless the context requires otherwise: (a) any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (b) references to Articles and Sections refer to Articles and Sections of this Agreement; (c) references to Exhibits refer to the Exhibits attached to this Agreement, each of which is made a part hereof for all purposes; (d) the terms “include”, “includes”, “including” and words of like import shall be deemed to be followed by the words “without limitation”; (e) the terms “hereof,” “herein” and “hereunder” refer to this Agreement as a whole and not to any particular provision of this Agreement; and (f) references to money refer to legal currency of the United Kingdom. The headings contained in this Agreement are for reference purposes only, and shall not affect in any way the meaning or interpretation of this Agreement.

 

   Section 9.13.   Not Used

 

ARTICLE X

 

DEFINTIONS

 

“Accruals Basis” means that basis of accounting under which costs and benefits are regarded as applicable to the period in which the liability for the cost is incurred or the right to the benefit arises regardless of when invoiced, paid or received

 

“Agreement” has the meaning assigned to such term in the Preamble.

 

“Aimwell Agreement” means the Letter Agreement between Alamo Energy Corp. and Aimwell Energy Limited dated 11th January, 2010, relating to their Participation in Petroleum Exploration and Development Licence PEDL 245 as novated and amended on the 14th November, 2011 by a Novation and Amendment of Participation Agreement regarding Petroleum Exploration and Development Licence PEDL 245 dated 14th October, 2008.

 

“Alamo/Aimwell Carry” has the meaning set out in Clause 2 (ii) of the Aimwell Agreement;

 

  

11

  

“Breach” means any matter, fact or circumstance that constitutes a breach by a Party of any representation, warranty, agreement, obligation, or covenant of such Party contained in this Agreement.

 

“Buyer” has the meaning assigned to such term in the Preamble.

 

“Closing” has the meaning assigned to such term in Section 1.1(b).

 

“Closing Date” has the meaning assigned to such term in Section 1.1(b).

 

“Data” means all accounts, books and data in the possession, custody or control of the Seller and its Affiliates relating to the Transferred Interest including contracts, correspondence, information, data and reports (including petroleum engineering, reservoir engineering, drilling, geological, geophysical and all other kinds of technical data and reports, samples, well logs and analyses in whatever form the same are maintained);

 

“DECC”  means the Department of Energy and Climate Change of the United Kingdom.

 

“Deed of Interest Assignment” has the meaning set forth in Section 1.2(a)(ii).

 

“Encumbrances” means all liens, claims, charges (fixed or floating), mortgages, security interests, pledges, options, net profit interests, rights of pre-emption, royalty interests, production payments, carried interests or any other third party rights or other legal or equitable encumbrances, limitations or restrictions of any nature whatsoever.

 

“Execution Date” has the meaning assigned to such term in the Preamble.

 

“Governmental Authority” means any government, court, department, agency or commission or other governmental or regulatory body or authority.

 

“Initial Term” has the meaning set out in the Licence.

 

“JOA” has the meaning set forth in Section 1.2(a)(iv).

 

“Joint Property” means all materials, equipment, plant, machinery, facilities relating to the Transferred Interests owned under the relevant JOA and/or Licence Interest Documents;

 

“Knowledge of the Seller” means matters, facts or circumstances that Allan Millmaker or Phillip Mann (without a duty of inquiry) either because such matters, facts or circumstances were disclosed to them or otherwise brought to their attention in their capacities as officers or members of management of the Seller.

 

“Law” has the meaning assigned to such term in Section 2.3.

 

“Legal Proceedings” has the meaning set forth in Section 2.5.

 

”Licence” means United Kingdom Petroleum Exploration and Development Licence PEDL 245 dated 14th October, 2008, comprising Blocks TQ26, TQ36, TQ46 and TQ56;

 

“Deed of Licence Assignment” has the meaning set forth in Section 1.2(a)(i).

 

“Licence Blocks” has the meaning set forth in the Preamble.

 

“Material Adverse Effect” means any change, effect, event or occurrence with respect to the condition or existence of the Transferred Interest, the Licence or any of the other Transferred Interest Documents, taken as a whole, or that materially or adversely affects the ability of Seller or Buyer, as applicable, to consummate or give effect to the transaction contemplated hereby.

 

  

12

  

“Novation of Joint Operating Agreement” has the meaning set forth in Section 1.2(a)(iv).

 

“Novation and Amendment of Participation Agreement” has the meaning set forth in Section 1.2(a)(iii).

 

“Organizational Documents” means with respect to any entity, the certificate of incorporation, by-laws, certificate of formation, limited liability company operating agreement, partnership or limited partnership agreement or other formation or governing documents of such entity.

“Parties” or “Party” has the meaning assigned to such term in the Preamble.

 

“Percentage Interest” has the meaning set out in the JOA.

 

“Participant” has the meaning set out in the JOA.

 

“Person” means an individual, corporation, association, trust, limited liability company, limited partnership, limited liability partnership, partnership, incorporated organization, other entity.

 

“Petroleum” has the meaning given in the Licence;

 

“Purchase Price” has the meaning assigned to such term in Section 1.3.

 

“Seller” has the meaning assigned to such term in the Preamble.

 

“Transaction Documents” means this Agreement and the other agreements, contracts, documents, instruments and certificates provided for in this Agreement, including the agreements specified in Section 1.2, to be entered into by one or more of the Parties hereto in connection with the transactions contemplated by this Agreement.

 

“Transfer of Operatorship Agreement” has the meaning set forth in Section 1.2(a)(v).

 

“Transferred Interest” means:

 

	
(a)  

	
the Seller’s undivided legal interest in each Licence;

 

	
(b)  

	
the Seller’s entire undivided beneficial forty-five percent (45.00%) Percentage Interest under the JOA; and

 

	
(c)  

	
the Seller’s entire interest in the Data,

 

together in each case with all rights, duties, liabilities and obligations attaching thereto including (i) the right to take and receive a consequent share of all Petroleum produced under the Licence on and after the date hereof and to receive the gross proceeds from the sale or other disposition thereof; (ii) a consequent share of the Seller’s right title and interest in and to jointly owned funds, Joint Property and all other assets which are or may be owned pursuant to or under any of the Transferred Interest Documents; and (iii) all right, liabilities and obligations associated with such interest under the Transferred Interest Documents.

 

"Transferred Interest Documents" the documents specified in Exhibit F and, where the context so admits, any one or more of such documents.

 

 

(execution page follows)

 

  

13

  

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

 

 

	 	SELLER: 

 

ALAMO ENERGY CORP.

	 
	 	 	 	 
	 	By:	/s/ Allan Millmaker 	 
	 	Title:	CEO	 
	 	 	 	 

 

 

	  	
 

BUYER:

 

NORTHDOWN ENERGY LIMITED

	  
	  	  	  	  
	  	By:	/s/ R. J. P. Ross	  
	  	Title:	Managing Director	  
	  	  	  	  

 

  

14

  

EXHIBIT A

 

LICENCE ASSIGNMENT

 

 

 

 

  

15

  

DEED OF ASSIGNMENT OF LICENCE PEDL 245

This Deed of Assignment is entered into the                                                                                                           day of                           2012

between

	
(1)

	
Alamo Energy Corp., a Nevada corporation, registered number CIK#: 0001360334, with a mailing address of 10575 Katy Freeway, Suite 300, Houston, Texas, 77024, USA (hereinafter “Alamo”);

	
(2)  

	
Aimwell Energy Limited, a company registered in England, registered number 05822509, whose registered office is at 10 Rosebery Avenue, Harpenden, Herts, AL5 2QP, (hereinafter “Aimwell”);

	
(3)  

	
Northdown Energy Limited, a company registered in England, registered number 07768741, whose registered office is at Oldfield House, Oldfield Road, London SW19 4SD, (hereinafter “Northdown”),

 

(Alamo, Aimwell and Northdown being hereinafter together referred to as “the Assignors”);

 

	
(4)

	
The Assignors other than Alamo (hereinafter together referred to as ‘the Assignees’); and

	
(5)

	
The Secretary of State for Energy and Climate Change (hereinafter referred to as the “Secretary of State”).

Whereas:

 

	
(A)  

	
The Assignors are the present holders of United Kingdom Petroleum Exploration and Development Licence No. PEDL 245, covering Blocks TQ26, TQ36, TQ46 and TQ56 (‘the Licence’) dated 14th October, 2008 and granted with effect from 1 July 2008 under the Petroleum Act 1998 (or having effect as though granted under the Act);  and

 

	
(B)  

	
The Secretary of State has by email dated 29th November 2012, given consent to the execution of this Assignment.

 

	
  

	
Now this Deed witnesses as follows:

 

The Assignors hereby assign unto the Assignees all rights, interest, obligations and liabilities of the Assignors in, under, pursuant to and in respect of the Licence, to hold the same unto the Assignees, subject to the performance and observance by the Assignees of the terms and conditions contained in the Licence and on the part of the Licensee therein described to be performed and observed.

 

The Assignees jointly and severally covenant with and in favour of the Secretary of State and the Assignors (and each of them) that they will perform and observe the terms and conditions contained in the Licence and on the part of the Licensee to be performed and observed.

 

For the purposes of the Contracts (Rights of Third Parties) Act 1999 this Deed of Assignment is not intended to, and does not, give any person who is not a Party to it any right to enforce any of its provisions.

 

This Deed of Assignment may be executed in any number of counterparts to the same effect as if the executions on the counterparts were on a single text of this Deed of Assignment and it is hereby declared that this Deed of Assignment shall not come into force and effect until a counterpart has been executed and delivered by each party hereto (other than the Secretary of State). A party hereto shall be entitled to rely on a copy of this Deed of Assignment signed by the other parties hereto (other than the Secretary of State) and delivered to it by facsimile transmission or electronic means (including e-mail) until the delivery to it of an original of this Deed of Assignment containing the original signature of the other parties hereto (other than the Secretary of State).

 

The construction, validity and performance of this Deed of Assignment shall be governed by English Law and each party hereto hereby submits to the jurisdiction of the English Courts.

 

  

16

  

IN WITNESS WHEREOF this Deed of Assignment has been duly executed and delivered by the parties hereto (other than the Secretary of State) on the day and year first above written.

 

Executed and delivered as a Deed by

ALAMO ENERGY CORP.

acting by the following person who in accordance with the laws of the State of Nevada is acting under its authority:

 

 

	 	 	 	 
	Director	 	 	 
	
 

 

	 	 	 
	
Witness

 

	 	 	 
	Witness Name:	 	 	 
	
Address:

 

 

 

	 	 	 
	Occupation: 

 

	
Executed and delivered as a Deed by

	
AIMWELL ENERGY LIMITED

	
on being signed by:

 

	 	 	 	 
	Director	 	 	 
	
 

 

	 	 	 
	
Witness

 

	 	 	 
	Witness Name:	 	 	 
	
Address:

 

 

 

	 	 	 
	Occupation: 	 	 	 

 

	
Executed and delivered as a Deed by

	
NORTHDOWN ENERGY LIMITED

	
on being signed by:

 

 

	 	 	 	 
	Director	 	 	 
	
 

 

	 	 	 
	
Witness

 

	 	 	 
	Witness Name:	 	 	 
	
Address:

 

 

 

	 	 	 
	Occupation: 	 	 	 

 

 

  

17

  

EXHIBIT B

 

DEED OF INTEREST ASSIGNMENT

 

 

 

 

 

  

18

  

DEED OF INTEREST ASSIGNMENT – LICENCE PEDL 245

This Deed of Interest Assignment is entered into the      day of                               2012 by and between:

Alamo Energy Corp., registered number CIK#: 0001360334, a Nevada corporation, with a mailing address of 10575 Katy Freeway, Suite 300, Houston, Texas, 77024, USA hereinafter ‘Seller’;

and

Northdown Energy Limited, registered number 05822509, a company registered in England whose registered office is at Oldfield House, Oldfield Road, London SW19 4SD, hereinafter ‘Buyer’;

 

(hereinafter together referred to collectively as the “Parties” and individually as a “Party”)

 

Whereas:

 

	
(A)  

	
Seller and Buyer have entered into a Sale and Purchase Agreement of even date herewith in respect of United Kingdom Petroleum Exploration and Development Licence No. PEDL 245, covering Blocks TQ26, TQ36, TQ46 and TQ56, dated 14th October, 2008 (“SPA”) pursuant to which Seller has undertaken to, inter alia, transfer and assign to Buyer the Transferred Interest as therein defined;

 

	
(B)  

	
The transfer and assignment of the Transferred Interest is perfected, inter alia, by this Agreement a Novation and Amendment of Participation Agreement regarding Petroleum Exploration and Development Licence PEDL 245 dated 14 October, 2008, and a novation of the Joint Operating Agreement for UK Onshore Petroleum Exploration and Development Licence No. PEDL 245 Blocks TQ26, TQ36, TQ46 and TQ56 and a Deed of Assignment of United Kingdom Petroleum Exploration and Development Licence No. PEDL 245, Blocks TQ26, TQ36, TQ46 and TQ56 dated 14th October, 2008.

 

	
(C)  

	
The Secretary of State for Energy and Climate Change has by email dated 29th November, 2012, given consent to the assignment of the Transferred Interest;

	
  

	
Therefore the Parties agree as follows:

	
1.  

	
With effect from the date hereof, the Seller as legal and beneficial owner hereby assigns, transfers and conveys to and in favour of the Buyer, upon and subject to the terms of the SPA the Transferred Interest and the Buyer hereby accepts the Transferred Interest.

 

	
2.  

	
Nothing contained herein shall prejudice the rights and obligations of the Parties under the SPA in respect of the Transferred Interest.

 

	
  

	
3.

	
The Parties shall do all such further things and execute or procure the execution of all such documents or deeds as the case may be in order to give full and complete effect to the terms and true intent of this Deed of Assignment.

 

	
  

	
4.

	
For the purposes of the Contracts (Rights of Third Parties) Act 1999 this Deed of Assignment is not intended to, and does not, give any person who is not a Party to it any right to enforce any of its provisions.

 

	
  

	
5.

	
This Deed of Interest Assignment may be executed in any number of counterparts to the same effect as if the executions on the counterparts were on a single text of this Deed of Interest Assignment and it is hereby declared that this Deed of Interest Assignment shall not come into force and effect until a counterpart has been executed and delivered by each Party. A Party shall be entitled to rely on a copy of this Deed of Interest Assignment signed by the other Party and delivered to it by facsimile transmission or electronic means (including e-mail) until the delivery to it of an original of this Deed of Interest Assignment containing the original signature of the other Party.

 

	
  

	
6.

	
This Deed of Interest Assignment shall be governed and construed in all respects by English Law and each Party hereby irrevocably submits to the jurisdiction of the English Courts.

 

  

19

  

IN WITNESS WHEREOF this Deed of Assignment has been duly executed and delivered by the Parties on the day and year first above written.

 

Executed and delivered as a Deed by

 

ALAMO ENERGY CORP.

acting by the following person who in accordance with the laws of the State of Nevada is acting under its authority:

 

 

	 	 	 	 
	Director	 	 	 
	
 

 

	 	 	 
	
Witness

 

	 	 	 
	Witness Name:	 	 	 
	
Address:

 

 

 

	 	 	 
	Occupation: 	 	 	 

 

	
Executed and delivered as a Deed by

	
NORTHDOWN ENERGY LIMITED

	
on being signed by:

 

 

	 	 	 	 
	Director	 	 	 
	
 

 

	 	 	 
	
Witness

 

	 	 	 
	Witness Name:	 	 	 
	
Address:

 

 

 

	 	 	 
	Occupation: 	 	 	 

 

 

  

20

  

EXHIBIT C

 

NOVATION AND AMENDMENT AGREEMENT

 

OF PARTICIPATION AGREEMENT

 

 

 

  

21

  

DATED                                                                     2012

 

 

ALAMO ENERGY CORP.

 

and

 

NORTHDOWN ENERGY LIMITED

 

and

 

AIMWELL ENERGY LIMITED

 

_____________________________________________

 

NOVATION AND AMENDMENT OF

PARTICIPATION AGREEMENT

REGARDING PETROLEUM EXPLORATION

AND DEVELOPMENT LICENCE PEDL 245

DATED 14th OCTOBER, 2008

_____________________________________________

 

  

22

  

THIS NOVATION AND AMENDMENT AGREEMENT is made the      day of                                   2012

	
  

	
BETWEEN

	
(2)  

	
ALAMO ENERGY CORP., a company registered in Nevada (registered number CIK#: 0001360334), with a mailing address of 10575 Katy Freeway, Suite 300, Houston, Texas, 77024, USA (“Alamo”);

	
(3)  

	
NORTHDOWN ENERGY LIMITED, a company registered in England (company number 07768741) whose registered office is at Oldfield House, Oldfield Road, London, England, SW19 4SD (“Northdown”); and

	
(4)  

	
AIMWELL ENERGY LIMITED, a company registered in England (company number 05822509) whose registered office is at 10 Rosebery Avenue, Harpenden, Herts, AL5 2QP (“Aimwell”).

each being hereinafter referred to individually as a “Party” and collectively as the “Parties”.

WHEREAS

	
(A)

	
Alamo Energy Corp. (“Alamo”), Northdown Energy Limited (“Northdown”) and Aimwell Energy Limited (“Aimwell”) are parties to a Letter Agreement  dated 11th January, 2010, relating to their Participation in Petroleum Exploration and Development Licence PEDL 245 as amended and novated on 14th November,  2011(the “Participation Agreement”).

	
(B)

	
Alamo, Northdown and Aimwell are licensees of Petroleum Exploration and Development Licence PEDL 245 Blocks TQ26, TQ36, TQ46 and TQ56 dated 14th October, 2008 (the “Licence”) and are parties to a Joint Operating Agreement for UK Onshore Petroleum Exploration and Development Licence No. PEDL 245 Blocks TQ26, TQ36, TQ46 and TQ56 dated 14th November, 2011 (the “JOA”).

	
(C)

	
Pursuant to a Sale and Purchase Agreement of even date herewith (the SPA”), Alamo agreed, inter alia, to assign and transfer to Northdown, the Transferred Interest (as defined in the SPA); and the Alamo/Aimwell Carry (as defined in Clause 2 (ii) of the Participation Agreement) (the “Alamo/Aimwell Transferred Carry”).

	
(D)

	
The assignment and transfer of the Transferred Interest is perfected, inter alia, by this agreement, a novation of the JOA, a Deed of Assignment of the Licence and a Deed of Interest Assignment.

	
(E)

	
This Novation and Amendment Agreement sets out the agreement of Alamo, Aimwell and Northdown (together the “Parties” and individually a “Party”) in respect of certain matters, as herein specified, relating to the Participation Agreement.

 

	
(F) 

	
In consequence of the matters referred to in Recital (C) above, Alamo wishes, to assign and transfer to Northdown, the Alamo/Aimwell Transferred Carry; and Northdown wishes to accept the Alamo/Aimwell Transferred Carry upon and subject to the terms and conditions herein contained.

 

NOW THEREFORE IT IS HEREBY AGREED as follows:

	
1.

	
Words and phrases used in this Novation and Amendment Agreement shall, unless specifically defined herein or the context otherwise requires, bear the same meaning as set out in the Participation Agreement.

	
2.

	
With effect  on the date hereof (the “Effective Novation Time”), each Party severally agrees that:

	
2.1.1   

	
Alamo shall cease to be a party to the Participation Agreement and Northdown shall assume the liabilities, perform the obligations and be entitled to the rights and benefits under the Participation Agreement in the place of Alamo in respect of the Alamo/Aimwell Transferred Carry;

  

23

  

	
  

	
2.1.2   

	
Northdown undertakes and covenants as a separate obligation with each Party to assume, observe, perform, discharge and be bound by all liabilities, duties and obligations of Alamo in respect of the Alamo/Aimwell Transferred Carry arising under the Participation Agreement in the place of Alamo whether actual, accrued, contingent or otherwise and whether arising on, before or after the Effective Novation Time and to be bound by the Participation Agreement as if Northdown had at all times been a party to the Participation Agreement in place of Alamo in respect of the Alamo/Aimwell Transferred Carry;

	
2.1.3   

	
Each Party (other than Alamo) shall each release and discharge Alamo from the observance, performance and discharge of each of the liabilities and obligations assumed by Northdown in respect of the Alamo/Aimwell Transferred Carry and Northdown hereby undertakes in respect of the Alamo/Aimwell Transferred Carry, to fully indemnify and hold harmless each such Party (solely so far as concerns the Participation Agreement or any such side agreements, as defined in Clause 2.1.4 to which it is a party) in respect of any claims, fines, proceedings, injury, cost (including legal cost) loss, damage, or expense for which Alamo would have been liable but for the release and discharge referred to herein;

	
  

	
2.1.4   

	
Clauses 2.1.1, 2.1.2 and 2.1.3 of this Novation and Amendment Agreement shall also apply, as they apply to the Participation Agreement, in relation to any other agreement, instrument or document between or binding upon Alamo and any or all of the other Parties (and no other person or persons) (a "side agreement"), if and to the extent that the side agreement in question relates to any of the rights, liabilities and obligations affected by Clauses 2.1.1, 2.1.2 and 2.1.3 of this Novation and Amendment Agreement.

	
2.2   

	
Notwithstanding the foregoing provisions of Clause 2.1, Alamo shall be bound and continue to be bound by this Clause 2.2 (which shall take effect as an agreement separate and independent from the Participation Agreement and/or any side agreement), to observe and perform such duties of confidentiality and non disclosure owed to the other Parties and as would have been applicable to it under the Participation Agreement or any side-agreement had it continued to be Party, in respect of the Transferred Interest and the Alamo/Aimwell Transferred Carry, to those agreements.

 

	
2.3    

	
This Novation and Amendment Agreement shall be treated as constituting all actions, confirmations, consents and undertakings required of the Parties under the Participation Agreement and/or any side-agreement for the purpose of giving effect to the transfer to Northdown of the Alamo/Aimwell Transferred Carry.

 

	
3.

	
With effect from the date hereof, the following amendments are made to the Participation Agreement:

 

	
  

	
3.1   

	
The last paragraph of Clause 1 shall be deleted and replaced with the following:

 

“ For the purposes of this letter agreement, “Percentage Interest” has the meaning set out in the Joint Operating Agreement for UK Onshore Petroleum Exploration and Development Licence No. PEDL 245 Blocks TQ26, TQ36, TQ46 and TQ56 dated 14th November, 2011.”

 

	
  

	
3.2   

	
Clause 2 of the Participation Agreement shall be deleted and replaced with the following:

“2.

	 	
(i)  

	
The Alamo/Aimwell Carry shall be combined with the Northdown/Aimwell Carry and all references to the “Alamo/Aimwell Carry” shall be construed as a reference to the Northdown/Aimwell Carry with effect from the date of the Novation and Amendment Agreement dated [            ].

	
  

	
(ii)

	
Northdown shall pay all of Aimwell’s 10.00% Percentage Interest share of all costs, expenses, liabilities and obligations (including without limitation, Licence obligations, Licence rentals, manpower costs, well costs, seismic and other technical data costs) arising in respect of operations jointly conducted in respect of the Licence (“Joint Operations”) until the date that a Field Development Plan is formally approved by the UK Secretary of State for the development of a discovery of petroleum in the Blocks comprised in the Licence (the “Northdown/Aimwell Carry”).

  

24

  

	
  

	
(iii)

	
Northdown shall be free to assign (whether by sale or farm-out or otherwise) all or part of its Percentage Interest in each Block and the Licence provided that:

	
(a)  

	
the third party assuming the interest being granted is acceptable to DECC; and

	
(b)  

	
such third party is capable of fulfilling the obligations to be assigned under this Agreement, including without limitation, the obligations assumed under this Clause 2 (iii) (c); and

	
  

	
(c)   

	
if following the date hereof,  Northdown assigns all or part of its Percentage Interest, such assignment shall include the assignment of a corresponding proportionate share of the  obligations in respect of Northdown/Aimwell Carry.

By way of example of the above, if Northdown assigns 50.00% of its Percentage Interest (i.e a 45.00% Percentage Interest) to a third party (“Incoming Party”, then 50.00% of the Northdown/Aimwell Carry, (being the payment of 5.00% Percentage Interest share of Aimwell’s total 10.00% Percentage Interest share of all costs, expenses, liabilities and obligations (“Costs and Expenses”) arising in respect of Joint Operations in the Blocks) shall be paid by such Incoming Party – the balance attributable to the Northdown/Aimwell Carry, being the payment of 5.00% Percentage Interest share of Aimwell’s total 10.00% Percentage Interest share of all Costs and Expenses arising in respect of Joint Operations in the Blocks shall be paid by Northdown.

	
(d)  

	
In respect of any future assignment by Northdown of all or part of its Percentage Interest and a corresponding proportionate share of the Northdown/Aimwell Carry to a third party, Northdown shall remain liable to Aimwell for any failure or default on the part of such third party to pay the corresponding proportionate share of the Northdown/Aimwell Carry assigned to such third party.

	
  

	
(e)   

	
Northdown shall procure that in respect of any assignment of  all or part of its Percentage Interest, it will procure that the assignee of such interest enters into a legally enforceable agreement with the other parties to this Agreement in respect of the obligations assumed under this Clause 2 (iii).”

 

	
3.3

	
Clause 3 of the Participation Agreement shall be deleted and replaced with the following:

 

	
  

	
“3.

	
Aimwell shall, subject to any necessary Government and partner consents, have the right to assign (whether by sale or farmout or otherwise) all or part of its Percentage Interest in each Block and the Licence. The assignment of all or part of Aimwell’s Percentage Interest shall also include the assignment of Aimwell’s right to and Northdown’s corresponding obligations (and rights) in respect of, the Northdown/Aimwell Carry; corresponding, in each case, with Aimwell’s Percentage Interest assigned.”

By way of example of the above, if following the date hereof: Aimwell assigns 50.00% of its Percentage Interest (i.e a 5.00% Percentage Interest) to a third party (“Incoming Party”):

	
(a)  

	
then 50% of the right to (together with the corresponding obligation in respect of) the Northdown/Aimwell Carry, (being the payment of all of the Incoming Party’s total 5.00% Percentage Interest share of all Costs and Expenses arising in respect of Joint Operations in the Blocks) shall also be assigned to such Incoming Party and Northdown shall pay all of such Incoming Party’s 5.00% Percentage Interest share of all such Costs and Expenses arising in respect of Joint Operations until the date that a Field Development Plan is formally approved by the UK Secretary of State for the development of a discovery of petroleum in the Blocks comprised in the Licence;

 

	
(b)  

	
In such example, Aimwell will retain the right to 50% of the right to (together with the corresponding obligation in respect of) the Northdown/Aimwell Carry being the payment of all of Aimwell’s 5.00% Percentage Interest share of all Costs and Expenses arising in respect of Joint Operations until the date that a Field Development Plan is formally approved by the UK Secretary of State for the development of a discovery of petroleum in the Blocks comprised in the Licence.”

 

  

25

  

3.4           Clause 6 of the Participation Agreement is deleted and replaced as follows:

 

“ The Percentage Interests and the Northdown/Aimwell Carry are as follows:

 

	 	
 Percentage Interest

 

	
 Carry

 

	 
	 Northdown	 90.00%	 10.00% (Northdown/Aimwell Carry)	 
	 Aimwell	 10.00%	 	 
	
 

	 100.00%	 	 
	 	 	 	 

 

	
4.

	
Nothing contained herein shall prejudice the rights and obligations of Alamo and  Northdown under the under any agreement between them in respect of the Transferred Interest and/or the Alamo/Aimwell Transferred Carry.

	
5.

	
Subject as expressly provided in this Novation and Amendment Agreement, all other provisions of the Participation Agreement and side agreements shall remain in full force and effect and binding on the parties thereto, insofar as the same are in full force and effect and binding on those parties immediately prior to the date hereof.

	
6.

	
This Novation and Amendment Agreement may be executed in any number of counterparts to the same effect as if the executions on the counterparts were on a single text of this Novation and Amendment Agreement and it is hereby declared that this Agreement shall not come into force and effect until a counterpart has been executed and delivered by each Party. A Party shall be entitled to rely on a copy of this Novation and Amendment Agreement signed by the other Parties and delivered to it by facsimile transmission or electronic means (including e-mail) until the delivery to it of an original of this Novation and Amendment Agreement containing the original signature of the other Parties.

7.        The Parties confirm that no provision of this Novation and Amendment Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party hereto.

	
8.

	
This Novation and Amendment Agreement shall be governed by and construed in accordance with English law and each of the Parties hereby irrevocably submits to the exclusive jurisdiction of the English courts.

 

  

26

  

IN WITNESS WHEREOF the Parties have by their authorised representatives duly executed this Novation and Amendment Agreement the day and year first above written.

 

	
  

	 

	
Signed for and on behalf of

	
ALAMO ENERGY CORP.

	
  

	 

	
Signed for and on behalf of

NORTHDOWN ENERGY LIMITED

 

 

	
  

	 

	
Signed for and on behalf of

AIMWELL ENERGY LIMITED

 

 

 

  

27

  

EXHIBIT D

 

NOVATION OF JOINT OPERATING AGREEMENT

 

 

 

 

 

 

  

28

  

DATED                                                                     2012

 

ALAMO ENERGY CORP.

 

and

 

NORTHDOWN ENERGY LIMITED

 

and

 

AIMWELL ENERGY LIMITED

 

____________________________________________

 

NOVATION OF

 

JOINT OPERATING AGREEMENT FOR

 

UK ONSHORE PETROLEUM EXPLORATION AND DEVELOPMENT

 

LICENCE NO. PEDL 245

 

BLOCKS TQ26, TQ36, TQ46 AND TQ56

 

_____________________________________________

  

29

  

THIS NOVATION AND AMENDMENT AGREEMENT is made the      day of                                    2012

 

	
  

	
BETWEEN

 

	
(1)   

	
ALAMO ENERGY CORP., a company registered in Nevada (registered number CIK#: 0001360334), with a mailing address of 10575 Katy Freeway, Suite 300, Houston, Texas, 77024, USA (“Alamo”);

	
(5)  

	
NORTHDOWN ENERGY LIMITED, a company registered in England (company number 07768741) whose registered office is at Oldfield House, Oldfield Road, London, England, SW19 4SD (“Northdown”); and

	
(6)  

	
AIMWELL ENERGY LIMITED, a company registered in England (company number 05822509) whose registered office is at 10 Rosebery Avenue, Harpenden, Herts, AL5 2QP (“Aimwell”).

 

each being hereinafter referred to individually as a “Party” and collectively as the “Parties”.

 

WHEREAS:

 

	
(A)

	
The Parties and others are the present parties to the Joint Operating Agreement for UK Onshore Petroleum Exploration and Development Licence No. PEDL 245 Blocks TQ26, TQ36, TQ46 and TQ56 dated 14th November, 2011 hereinafter referred to as the “Operating Agreement”.

 

	
(B)

	
By a Sale and Purchase Agreement of even date herewith Alamo agreed to assign and transfer to Northdown an undivided 45% (forty-five per cent) Percentage Interest in and under the Operating Agreement (such interest to be assigned by Alamo being hereinafter referred to as the “Transferred Interest”) and to transfer the operatorship under the Operating Agreement to Northdown; and

 

	
(C)

	
The assignment and transfers referred to in Recital (B) have been perfected, inter alia, by a Deed of Interest Assignment, a Deed of Licence Assignment and a Transfer of Operatorship Agreement, each of even date herewith.

 

	
(D)

	
In consequence of the assignments referred to in Recital (B), the Parties wish to amend and novate the Operating Agreement and Alamo wishes to be released from and Northdown wishes to assume and perform the obligations and liabilities of Alamo under the Operating Agreement in respect of the Transferred Interest and the Parties have agreed to the execution of this Novation and Amendment Agreement in the terms hereinafter appearing.

 

NOW THEREFORE IT IS HEREBY AGREED as follows:

 

	
1.  

	
In this Novation and Amendment Agreement, terms and expressions defined in the Operating Agreement shall, unless the context otherwise requires, bear the same meanings herein.

 

	
2.  

	
Each Party severally agrees that with effect on and from the date hereof (the “Effective Date”):

 

	
(a)  

	
Alamo shall cease, in respect of the Transferred Interest, to be a party to the Operating Agreement and Northdown shall, in respect of the Transferred Interest, become a party thereto and shall assume all liabilities, perform all obligations and be entitled to the rights and benefits therein in place of Alamo in respect of the Transferred Interest;

 

	
(b)  

	
Northdown undertakes and covenants as a separate obligation with each Party to assume, observe, perform, discharge and be bound by all liabilities, duties and obligations of Alamo in respect of the Transferred Interest arising under the Operating Agreement in the place of Alamo whether actual, accrued, contingent or otherwise and whether arising on, before or after the Effective Date and to be bound by the Operating Agreement as if Northdown had at all times been a party to the Operating Agreement in the place of Alamo in respect of the Transferred Interest;

 

  

30

  

	
(c)  

	
Each Party (other than Alamo) herby releases and discharge Alamo from the observance, performance and discharge of each of the liabilities and obligations to the extent they are assumed by Northdown pursuant to Clause 2(b) above and each such Party shall accept the observance, performance and discharge of those liabilities and obligations of Northdown in the place thereof and Northdown hereby undertakes to indemnify and hold harmless each such Party (solely as far as concerns the Operating Agreement or any such side agreements, as defined in sub-clause 2 (d) below, to which it is a party) in respect of any loss, damage, cost (including legal cost) or expense for which Alamo would have been liable but for the release and discharge referred to herein; and

 

	
(d)  

	
Clauses 2(a), 2(b) and 2(c) above shall also apply, as they apply to the Operating Agreement, in relation to any other agreement, instrument or document between or binding upon Alamo and any or all of the other Parties (and no other person or persons) (a “side agreement”), if and to the extent that the side agreement in question relates to any of the rights, liabilities and obligations affected by Clauses 2(a), 2(b) and 2(c) above.

 

	
3.

	
Clause 4 of the Operating Agreement shall be deleted and replaced with the following:

 

2. “4.        Interests of the Participants

 

Subject to the provisions of this Agreement, the Licence, all Joint Property, all Joint Petroleum and all costs and obligations incurred in, and all rights and benefits arising out of, the conduct of the Joint Operations shall be owned and borne by the Participants in proportion to their respective Percentage Interests which at the date of this Agreement are as follows:-

Northdown                                        90.00 percent

 

Aimwell                                           10.00 percent

 

 

    TOTAL                                             100.0 percent”

 

	
4.  

	
This Novation and Amendment Agreement shall be treated as constituting all actions, confirmations, consents and undertakings required of Alamo and Northdown under the Operating Agreement and/or any side-agreement for the purpose of giving effect to the assignment and transfer of the Transferred Interest under the Operating Agreement and/or any side-agreement.

	
5.  

	
Subject as expressly provided in this Novation and Amendment Agreement, all other provisions of the Operating Agreement and side agreements shall remain in full force and effect and binding on the parties thereto, insofar as the same are in full force and effect and binding on those parties immediately prior to the Effective Date.

	
6.  

	
Nothing contained herein shall prejudice the rights and obligations of Alamo and Northdown under the Deed of Interest Assignment referred to in Recital (C) or under any other agreement between them in respect of the Transferred Interest.

	
7.  

	
Each reference in this Novation and Amendment Agreement (including the Recitals hereto) to the Operating Agreement or any side-agreement shall be construed and shall have effect as a reference to the same as it may have been supplemented and/or amended and/or novated prior to the date hereof.

 

  

31

  

	
8.  

	
This Novation and Amendment Agreement may be entered into in two or more counterparts each of which shall be deemed an original but which together shall constitute one and the same instrument, provided that this Agreement shall not be effective until each Party has executed at least one counterpart.

 

	
9.  

	
For the purposes of the Contracts (Rights of Third Parties) Act 1999 this Deed of Assignment is not intended to, and does not, give any person who is not a party to it any right to enforce any of its provisions.

 

	
10.  

	
This Novation and Amendment Agreement may be executed in any number of counterparts to the same effect as if the executions on the counterparts were on a single text of this Novation and Amendment Agreement and it is hereby declared that this Novation and Amendment Agreement shall not come into force and effect until a counterpart has been executed and delivered by each Party. A Party shall be entitled to rely on a copy of this Novation and Amendment Agreement signed by the other Party and delivered to it by facsimile transmission or electronic means (including e-mail) until the delivery to it of an original of this Novation and Amendment Agreement containing the original signature of the other Party.

 

	
11.  

	
This Novation and Amendment Agreement shall be governed by and construed in accordance with English law and each of the Parties hereby irrevocably submits to the exclusive jurisdiction of the English courts.

 

 

IN WITNESS WHEREOF the Parties have by their authorised representatives duly executed this Agreement the day and year first above written.

 

 

	
  

	 

	
Signed for and on behalf of

	
ALAMO ENERGY CORP.

	
  

	 

	
Signed for and on behalf of

NORTHDOWN ENERGY LIMITED

 

 

	
  

	 

	
Signed for and on behalf of

AIMWELL ENERGY LIMITED

 

 

 

  

32

  

EXHIBIT E

 

TRANSFER OF OPERATORSHIP AGREEMENT

 

 

 

  

33

  

DATED                                                                     2012

 

 

ALAMO ENERGY CORP.

 

and

 

NORTHDOWN ENERGY LIMITED

 

and

 

AIMWELL ENERGY LIMITED

_____________________________________________

AGREEMENT FOR THE TRANSFER OF OPERATORSHIP OF UNITED KINGDOM PETROLEUM EXPLORATION AND DEVELOPMENT LICENCE PEDL 245

_____________________________________________

 

 

 

 

 

  

34

  

THIS AGREEMENT is made the                                                                                     day of                                                      2012

	
  

	
BETWEEN

	
(1)   

	
ALAMO ENERGY CORP., a company registered in Nevada (registered number CIK#: 0001360334 ) with a mailing address of 10575 Katy Freeway, Suite 300, Houston, Texas, 77024, USA (“Alamo”);

	
(2)  

	
NORTHDOWN ENERGY LIMITED, a company registered in England (company number 07768741) whose registered office is at Oldfield House, Oldfield Road, London, England, SW19 4SD (“Northdown”); and

	
(3)  

	
AIMWELL ENERGY LIMITED, a company registered in England (company number 05822509) whose registered office is at 10 Rosebery Avenue, Harpenden, Herts, AL5 2QP (“Aimwell”).

each being hereinafter referred to individually as a “Party” and collectively as the “Parties”.

WHEREAS:

	
(A)

	
The Parties and others are the present parties to the Joint Operating Agreement for UK Onshore Petroleum Exploration and Development Licence No. PEDL 245 Blocks TQ26, TQ36, TQ46 and TQ56 dated 14th November, 2011 (“the “Operating Agreement”) and are licensees of Petroleum Exploration and Development Licence PEDL 245 Blocks TQ26, TQ36, TQ46 and TQ56 dated 14th October, 2008 (the “Licence”);

	
(B)

	
The Parties have agreed that Alamo will resign as Operator under the Operating Agreement and the Licence and that Northdown will assume the operatorship in place thereof; and

	
(C )

	
The Secretary of State for Energy and Climate Change has approved and given all necessary consents to the transfer of operatorship effected by this agreement in an email dated 29th November, 2012.

NOW IT IS HEREBY AGREED as follows:

	
1.  

	
On and with effect from the date hereof, Alamo shall resign and cease to be Operator under the JOA and the Licence and Northdown shall assume and be appointed as the Operator under the JOA and the Licence in place of Alamo and shall conduct the duties and functions of Operator under the JOA and Licence as set out in the Operating Agreement (the “Transfer of Operatorship”).

	
2.  

	
The requirement for written notice from the resigning Operator under Clause 5.2 of the Operating Agreement and any other formalities required pursuant to the Operating Agreement to allow the Transfer of Operatorship  effected pursuant to this Agreement are hereby waived and notwithstanding anything to the contrary in the Operating Agreement, the provisions of Clause 1 above shall have effect.

	
3.  

	
In connection with the Transfer of Operatorship, subject to the provisions of Clause 6 hereof and the terms of the Operating Agreement, on and with effect from the date hereof:

	
  

	
(i)

	
Northdown hereby undertakes with each other Party to assume, observe, perform, discharge and be bound by all liabilities and obligations of Alamo as Operator under the JOA and the Licence (except any such liabilities and obligations arising from its Wilful Misconduct (as defined in the JOA)) arising on or after the date hereof in place of Alamo; and

 

	
  

	
(ii)

	
Each Party hereby releases and discharges Alamo from the observance, performance and discharge of each of the liabilities and obligations of Alamo as Operator under the JOA and the Licence (except any such liabilities and obligations arising from its Wilful Misconduct (as defined in the JOA)) to the extent they are assumed by Northdown pursuant to Clause 3 (i) above and each Party hereby accepts the assumption, observance, performance and discharge of such liabilities and obligations by Northdown in place thereof and agrees that Northdown shall have the benefits and rights attributable to being Operator under the JOA and the Licence (including such rights and benefits pursuant to any contracts entered into by Alamo in its capacity as Operator under the JOA and the Licence) in place of Alamo.

 

  

35

  

	
4.

	
The Transfer of Operatorship and the provisions of Clause 3 above (including without limitation, Northdown’s assumption, observance, performance and discharge of such liabilities and obligations by Northdown of Alamo as Operator under the JOA and Licence in place of Alamo) shall be without prejudice to any liabilities, obligations, or benefits of Alamo as Operator under the JOA and the Licence that have accrued prior to the date hereof (whether actual, accrued, contingent or otherwise) and for which the terms of the Operating Agreement, shall continue to apply as if Alamo were still Operator.

	
5.

	
Alamo shall do all such things and execute all such documents as may be necessary to give full and complete effect to the Transfer of Operatorship.

	
6.

	
This Agreement shall be treated as constituting all actions, confirmations, consents, agreements, formalities and undertakings required under the Operating Agreement by any of the Parties in relation to the Transfer of Operatorship.

	
7.

	
The Parties confirm that no term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a Party hereto.

	
8.

	
This Agreement shall be governed by and construed in accordance with English law and each of the Parties hereby irrevocably submits to the exclusive jurisdiction of the English courts.

	
9.

	
This Agreement may be executed in any number of counterparts to the same effect as if the executions on the counterparts were on a single text of this Agreement and it is hereby declared that this Agreement shall not come into force and effect until a counterpart has been executed and delivered by each Party. A Party shall be entitled to rely on a copy of this Deed of Assignment signed by the other Parties and delivered to it by facsimile transmission or electronic means (including e-mail) until the delivery to it of an original of this Agreement containing the original signature of the other Parties.

 

IN WITNESS WHEREOF this Agreement has been duly executed by the duly authorised representatives of the Parties on the date first above written.

 

	
  

	 

	
Signed for and on behalf of

	
ALAMO ENERGY CORP.

	
  

	 

	
Signed for and on behalf of

NORTHDOWN ENERGY LIMITED

 

 

	
  

	 

	
Signed for and on behalf of

AIMWELL ENERGY LIMITED

 

 

  

36

  

EXHIBIT F

 

TRANSFERRED INTEREST DOCUMENTS

 

	
1.

	
United Kingdom Petroleum Exploration and Development Licence PEDL 245 dated 14th October, 2008, comprising Blocks TQ26, TQ36, TQ46 and TQ56

 

	
2.

	
The Joint Operating Agreement for UK Onshore Petroleum Exploration and Development Licence No. PEDL 245 Blocks TQ26, TQ36, TQ46 and TQ56 dated 14th November, 2011

 

 

 

  

37

  

EXHIBIT G

 

EURASIAN CAPITAL PARTNERS LIMITED CONSENT

 

PURSUANT TO SECTION 4.1 (b)

 

 

 

  

38

  

To:

	
  

	

ALAMO ENERGY CORP.

10575 Katy Freeway

Suite 300

Houston

Texas 77024

 

	
  

	
NORTHDOWN ENERGY LIMITED

Oldfield House

Oldfield Road

London

SW19 4SD

	
  

	
2012

 

Dear Sirs

 

Sale and Purchase Agreement between Alamo Energy Corp. (Alamo) and Northdown Energy Limited (Northdown) dated on or about the date of this letter (Sale Agreement)

We refer the Senior Secured Convertible Promissory Note (the Note) dated as of 18 November 2009 issued by Alamo Energy Corp (then known as Green Irons Holdings Corp) to Eurasian Capital Partners Limited (Eurasian) (and the ancillary documentation referred to therein) together with the Security Agreement (the Security Agreement) dated 18 November 2009 in favour of  Eurasian.

We hereby confirm that Eurasian is the current Holder of the Note and is the Secured Party under the Security Agreement.

We acknowledge that Alamo and Northdown intend to enter into the Sale Agreement (the agreed form of which is attached hereto) and hereby irrevocably consent to:

	
a)  

	
the entry by Alamo into the Sale Agreement; and

	
b)  

	
the transfer of the Transferred Interests (as defined in the Sale Agreement) and all related assets by Alamo to Northdown pursuant to the terms of the Sale Agreement.

This letter and any non-contractual rights or obligations arising out of or in connection with it or its subject matter shall be governed by and construed in accordance with the laws of England and the Parties hereby irrevocably agree that the courts of England shall have exclusive jurisdiction to settle any dispute which may arise out of or in connection with this letter.

	
  

	
Yours faithfully

	 	 
	
Duly authorised

For and on behalf of

EURASIAN CAPITAL PARTNERS LIMITED

	  
	  	  

  

39

  

Annex

Final Form of Sale Agreement

 

  

40

  

EXHIBIT H

 

DEED OF RELEASE

 

PURSUANT TO SECTION 5.2 (a)

 

  

41

  

 

 

                             2012

Deed of Release

 

 

 

 

Eurasian Capital Partners Limited (1)

Alamo Energy Corp. (2)  and

Northdown Energy Limited (3)

    

    

    

    

   

 

  

42

  

THIS DEED OF RELEASE is dated                                                                                                          2012 and made as a deed between:

 

	
(1)  

	
EURASIAN CAPITAL PARTNERS LIMITED, a company incorporated under the laws of [  ] with registered number [] and whose registered office is at (Eurasian).

 

	
(2)  

	
ALAMO ENERGY CORP., a corporation incorporated under the laws of Nevada (registered number 0001360334) and whose registered office is at 10575 Katy Freeway, Suite 300, Houston, Texas 77024 (Alamo).

 

	
(3)  

	
NORTHDOWN ENERGY LIMITED, a company registered in England (company number 07768741) whose registered office is at Oldfield House, Oldfield Road, London, SW19 4SD (Northdown)

 

WHEREAS

 

	
(A)  

	
On 18 November 2009, Alamo entered into a security agreement in favour of Eurasian (Security Agreement).

 

	
(B)  

	
Eurasian has agreed to release the assets specified in Schedule 1 to this deed (Charged Property) from the security created by the Security Agreement and any other charges, mortgages, encumbrances, assignments pledges, liens, standard security, assignations or other security interests granted in favour of Eurasian over the Charged Property (together, the Security).

 

	
(C)  

	
It is intended by the parties to this Deed that it shall take effect as a deed notwithstanding the fact that a party may only execute this document under hand.

 

IT IS AGREED as follows:

 

	
1  

	
Release and Confirmation of Non-Crystallisation

 

	
1.1  

	
Eurasian hereby fully, irrevocably and unconditionally:

 

	
(a)  

	
releases, reassigns, re-conveys and surrenders to Alamo the Charged Property charged under, or pursuant to, the Security to hold the same freed and discharged from the Security; and

 

	
(b)  

	
releases Alamo from all covenants, charges (whether fixed or floating), guarantees, obligations and liabilities of whatsoever nature comprised in the Security in relation to the Charged Property.

 

	
1.2  

	
Eurasian confirms that as at the date of this Deed it has taken no steps to crystallise any floating charge contained in the Security.

 

	
2  

	
Further Assurance

 

	
2.1  

	
Eurasian shall, at the request and cost of Alamo or Northdown (as the case may be), execute any deed or document and take any further action reasonably required by Alamo or Northdown to give effect to the releases contained in this Deed and agrees to return to Alamo or Northdown any documents held by it in relation to the Charged Property.

 

	
3  

	
Miscellaneous

 

	
3.1  

	
Clause headings in this Deed are for ease of reference only and shall not affect the interpretation of this Deed.

 

	
3.2  

	
The provisions of this Deed are distinct and severable from each other and the invalidity or unenforceability of any provision of this Deed shall not prejudice or affect the validity or enforcement of any such other provision.

 

	
3.3  

	
Nothing herein contained shall (except as regards the Charged Property) prejudice or affect the continuing nature of the security constituted by the Security or the obligation of Alamo or the right of Eurasian under the Security.

 

	
4  

	
Governing Law

 

This Deed shall be governed by and construed in accordance with English Law.

 

  

43

  

AS WITNESS this Deed has been executed as a deed on behalf of the parties on the day and year first above written.

 

	Executed as a deed (but not delivered until the date hereof) by EURASIAN CAPITAL PARTNERS LIMITED by the signature if its duly authorised attorney:	 	 	 
	 	 	 	 	 
	Witness Signature	 	 	 	 
	Name	 	 	 	 
	Address	 	 	 	 
	Occupation of witness	 	 	 	 

 

	
Executed as a deed (but not delivered until the date hereof) by ALAMO ENERGY CORP. by the signature if its duly authorised attorney:

	  	  	  
	  	  	  	  	  
	
Witness Signature

	  	  	  	  
	
Name

	  	  	  	  
	
Address

	  	  	  	  
	
Occupation of witness

	  	  	  	  

 

	
Executed as a deed (but not delivered until the date hereof) by NORTHDOWN ENERGY LIMITED acting by a director in the presence of:

	  	  	  
	  	  	  	  	  
	
Witness Signature

	  	  	  	  
	
Name

	  	  	Director	  
	
Address

	  	  	  	  
	
Occupation of witness

	  	  	  	  

 

 

  

44

  

SCHEDULE 1

 

Charged Property

All those assets to be sold or transferred by Alamo to Northdown pursuant to the terms of a sale and purchase agreement dated on or about the date of this deed between Alamo and Northdown.

 

 

 

 

45

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