Document:

Exhibit 10.7

 

 

GENERAL INTERCREDITOR AGREEMENT

 

dated as of

 

March 18, 2011

 

among

 

REGIONS BANK,
 as ABL Collateral Agent,

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,
 as Notes Priority Collateral Trustee,

 

EACH SUBORDINATED LIEN COLLATERAL TRUSTEE,

from time to time a party hereto,

 

EURAMAX INTERNATIONAL, INC.,
 and

 

the entities listed on Schedule I hereto

 

 

 

GENERAL INTERCREDITOR AGREEMENT (this “Agreement”), dated as of March 18, 2011 among REGIONS BANK, as collateral agent for the ABL Secured Parties referred to herein (in such capacity, and together with its successors and assigns in such capacity, the “ABL Collateral Agent”), WELLS FARGO BANK, NATIONAL ASSOCIATION, as collateral trustee for the Notes Priority Secured Parties referred to herein (in such capacity, and together with its successors and assigns in such capacity, the “Notes Priority Collateral Trustee”), each additional Subordinated Lien Collateral Trustee (as defined below) that executes and delivers a joinder in the form of Exhibit A hereto, EURAMAX INTERNATIONAL, INC., a Delaware corporation (the “Issuer”), and the entities listed on Schedule I hereto (as well as each future subsidiary that becomes a party hereto pursuant to the terms of the ABL Credit Agreement and the Notes Priority Indenture, as applicable, and the terms hereof, collectively, the “Obligors”).

 

WHEREAS, the Issuer has entered or is about to enter into the Amended and Restated Senior Secured Revolving Credit and Guaranty Agreement, dated as of March 18, 2011 (as amended, restated, supplemented, modified, renewed, refunded, restructured, increased, refinanced and/or replaced from time to time, the “ABL Credit Agreement”), among the Issuer and certain of its subsidiaries as borrowers and guarantors, the ABL Collateral Agent, and the other parties thereto.

 

WHEREAS, the Issuer has entered or is about to enter into (i) the Indenture, dated as of March [    ], 2011 (as amended, restated, supplemented, modified, and/or replaced from time to time, the “Notes Priority Indenture”), among the Issuer, Wells Fargo Bank, National Association, as trustee (the “Notes Priority Collateral Trustee”), and the other parties thereto, pursuant to which the Issuer shall issue the 9.50% notes due 2016 (together with any additional notes issued pursuant to the Notes Priority Indenture, and as such notes may be amended, restated, supplemented, modified, and/or replaced from time to time, the “Notes Priority Notes”), and (ii) the other Notes Priority Documents, if any.

 

WHEREAS, the ABL Credit Agreement and the Notes Priority Indenture permit future Second Lien Debt and other Subordinated Lien Debt to be incurred subject to the terms and conditions therein, respectively and herein.

 

In consideration of the mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I

 

Definitions

 

SECTION 1.01.                                 Construction; Certain Defined Terms.

 

(a)                                  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument, other document, statute or regulation herein shall be construed as referring to such agreement, instrument, other document, statute or regulation as from time to time amended, supplemented or otherwise modified, (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, but shall not be deemed to include the subsidiaries of such Person unless express reference is made to such subsidiaries, (iii) 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, (iv) all references herein to Articles, Sections and Annexes shall be construed to refer to Articles, Sections and Annexes of this Agreement, (v) unless otherwise expressly qualified herein, 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, (vi) the term “or” is not exclusive and (vii) all capitalized terms used herein and not otherwise defined herein shall have the meaning ascribed thereto in the ABL Security Documents and/or the Notes Priority Security Documents, as applicable.

 

(b)                                 As used in this Agreement, the following terms have the meanings specified below:

 

“ABL Collateral Agent” has the meaning set forth in the preamble.

 

“ABL Credit Agreement” has the meaning set forth in the preamble.

 

“ABL Debt” means all of the “Obligations” (as defined in the ABL Credit Agreement, including, without limitation, all Revolver Loans, Swingline Loans, LC Obligations, and obligations and indebtedness under any interest rate hedging agreement, commodity hedging agreement, currency hedging agreement, other hedging agreement or cash management agreement or any bank products agreement, in each case entered into with any lender under the ABL Credit Agreement, its affiliates or any other Person permitted under the ABL Credit Agreement if the obligations under any such agreement are permitted under the ABL Credit Agreement to be secured pursuant to the ABL Security Documents (the “ABL Hedging Agreements,” the “ABL Cash Management Agreements” and the “ABL Bank Products”, respectively) and any and all interest accruing and out-of-pocket costs and expenses incurred after the date of any filing by or against any Obligor of any petition or complaint initiating any Insolvency Proceeding, regardless of whether any ABL Secured Party’s claim therefor is allowed or allowable in the Insolvency Proceeding commenced by the filing of such petition or complaint.

 

“ABL Documents” means, collectively, the ABL Credit Agreement, the ABL Security Documents, the ABL Hedging Agreements, the ABL Cash Management Agreements, the ABL Bank Products, any additional credit agreement, note purchase agreement, indenture or other agreement related thereto and all other loan or note documents, collateral or security documents, notes, guarantees, instruments and agreements governing or evidencing, or executed or delivered in connection with, the ABL Credit Agreement, the ABL Hedging Agreements, the ABL Cash Management Agreements, or the ABL Bank Products, in each case as such agreements or instruments may be amended, supplemented, modified, restated, replaced, renewed, refunded, restructured, increased or refinanced from time to time on the terms permitted hereunder.

 

“ABL Liens” means Liens on the Collateral created under the ABL Security Documents to secure the ABL Obligations.

 

“ABL Obligations” means all indebtedness, liabilities and obligations (of every kind or nature) incurred or arising under or relating to the ABL Documents and all other obligations in respect thereof (including, without limitation, principal, premium, interest, reimbursements under letters of credit, fees, indemnifications, expenses and other obligations and guarantees of the foregoing (including Post-Petition Interest at the rate provided in the relevant ABL Document, whether or not a claim for Post-Petition Interest is allowed in an applicable Insolvency or Liquidation Proceeding)).

 

“ABL Priority Collateral” means (i) (1) all Accounts (and all rights to receive payments, indebtedness and other obligations (whether constituting an Account, Chattel Paper (including Electronic

 

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Chattel Paper), Instrument, Document or General Intangible) which arise as a result of the sale or lease of Inventory, Goods (excluding Equipment) or merchandise or provision of services, including the right to payment of any interest or finance charges) and (2) all promissory notes and other writings evidencing the foregoing obligations, however evidenced and whenever made, (ii) all Inventory, (iii) all Payment Intangibles (including corporate and other tax refunds), documents of title, customs receipts, insurance, shipping and other documents and other written materials related to any Inventory (including to the purchase or import of any Inventory), (iv) all Letter of Credit Rights, Chattel Paper, Instruments, Investment Property (other than Capital Stock), Documents and General Intangibles (other than any intellectual property and Capital Stock) pertaining to any ABL Priority Collateral, (v) all Deposit Accounts, collection accounts, disbursement accounts, lock-boxes, commodity accounts and securities accounts, including all cash, marketable securities, securities entitlements, financial assets and other funds and assets held in, on deposit in, or credited to any of the foregoing (excluding in each case cash proceeds of Notes Priority Collateral and the Deposit Accounts in which such cash is held), (vi) all books and records and Supporting Obligations relating to any of the foregoing, (vii) all related letters of credit, guaranties, collateral liens, Commercial Tort Claims or other claims and causes of action, and (viii) to the extent not otherwise included, all substitutions, replacements, accessions, products and proceeds (including, without limitation, insurance proceeds, Investment Property, licenses, royalties, income, payments, claims, damages and proceeds of suit, but excluding, for the avoidance of doubt, any real estate, equipment, intellectual property and Capital Stock) of any or all of the foregoing, in each case at any time held by the Issuer or any of the Obligors (whether now existing or at any time hereafter acquired by the Issuer or any of the Obligors or in which the Issuer or any of the Obligors acquires any right, title or interest), other than any assets that constitute Excluded Assets.  All capitalized terms used in this definition and not defined elsewhere in this Agreement have the meanings assigned to them in the UCC.

 

“ABL Secured Parties” means the Secured Parties (as defined in the ABL Credit Agreement).

 

“ABL Security Documents” means any documents, agreements or instruments now existing or entered into after the date hereof that create (or purport to create) Liens on any assets or properties of any Grantor to secure any ABL Obligations.

 

“Agents” means the ABL Collateral Agent, the Notes Priority Collateral Trustee and, if any, the Subordinated Collateral Trustee, if any (on behalf of the Second Lien Secured Parties) and the Subordinated Lien Collateral Trustee, if any (on behalf of the Subordinated Lien Secured Parties).

 

“Bankruptcy Code” means Title 11 of the United States Code.

 

“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 or membership interests (whether general or limited); and (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.

 

“Collateral” means the ABL Priority Collateral and the Note Priority Collateral.

 

“Collateral Access Agreement” shall have the meaning of such term as set forth in the ABL Security Documents.

 

“Collateral Trust and Intercreditor Agreement” means that certain Collateral Trust and Intercreditor Agreement, dated as of March 18, 2011, among the Issuer, the Notes Priority Trustee, the

 

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Notes Priority Collateral Trustee, and the other parties thereto, as amended, restated, supplemented, modified, and/or replaced from time to time.

 

“Controlled Foreign Corporation” shall mean (i) “controlled foreign corporation” as defined in the Tax Code, and (ii) New Holdco BV and any of its subsidiaries. “Disposition” shall mean any sale, lease, sale and leaseback, assignment, conveyance, exchange, transfer or other disposition.

 

“Dispose” shall have a correlative meaning.

 

“Domestic Subsidiary” of any Person shall mean any subsidiary of such Person incorporated or organized in the United States or any State thereof or the District of Columbia.

 

“Enforcement Action” means (a) the taking of any action to enforce or realize upon any Lien on the Collateral, including the institution of any foreclosure proceedings or the noticing of any public or private sale or other Disposition pursuant to Article 8 or Article 9 of the UCC or other applicable law, (b) the exercise of any right or remedy provided to a secured creditor or otherwise on account of a Lien on the Collateral under the ABL Documents, the Notes Priority Documents, the Second Lien Documents, the Subordinated Lien Documents or applicable law, including the election to retain any Collateral in satisfaction of a Lien or credit bid, (c) the taking of any action or the exercise of any right or remedy in respect of the collection on, set off against, marshaling of, or foreclosure on the Collateral or the proceeds of Collateral, (d) the sale, lease, license, or other Disposition of all or any portion of the Collateral, at a private or public sale, other Disposition or any other means permissible under applicable law at any time that an event of default shall have occurred which is continuing, and (e) the exercise of any other right of liquidation against any Collateral (including the exercise of any right of recoupment or set-off or any rights against Collateral obtained pursuant to or by foreclosure of a judgment Lien obtained against any Grantor) whether under the ABL Documents, the Notes Priority Documents, the Second Lien Documents, the Subordinated Lien Documents, applicable law, in a proceeding or otherwise; provided that, for the avoidance of doubt, none of the following shall constitute an Enforcement Action: (i) making demand for payment or accelerating the maturity of the ABL Debt or the Notes Priority Debt; (ii) the receipt and application by the ABL Collateral Agent to the ABL Debt of collections of Accounts or proceeds of other ABL Priority Collateral received from account debtors or through any lockbox or other cash management arrangement, whether or not any Event of Default exists at the time of application; (iii) the implementation of reserves under the ABL Credit Agreement; (iv) the reduction of advance rates under the ABL Credit Agreement; (v) the cessation (whether temporary or permanent) of lending under the ABL Credit Agreement due to the existence of an Out-of-Formula Condition, the existence of an Event of Default or failure to satisfy conditions precedent; (vi) the exercise by any ABL Secured Party of any right of offset with respect to Banking Relationship Debt (as defined in the ABL Credit Agreement) (other than Banking Relationship Debt owing in respect of any ABL Hedging Agreement with an ABL Secured Party); or (vii) the filing by a party hereto of a proof of claim in any Insolvency or Liquidation Proceeding.

 

“Enforcement Notice” means a written notice delivered, at a time when an Event of Default has occurred and is continuing, by either the Senior Representative in respect of the ABL Priority Collateral or the Senior Representative in respect of the Note Priority Collateral to the other specifying that it is an “Enforcement Notice” and the relevant Event of Default.

 

“Event of Default” means an “Event of Default” (or similarly defined term) under and as defined in the ABL Credit Agreement or any other ABL Document, the Notes Priority Indenture or any other Notes Priority Document or any the Second Lien Indenture or any other Second Lien Document or any Subordinated Lien Document, as the context may require.

 

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“Excluded Assets” means:  (a) any intellectual property, lease, license, contract, property rights or agreement to which the Issuer or any Obligor is a party or any of its rights or interests thereunder if and for so long as the grant of such security interest shall constitute or result in (i) the abandonment, invalidation or unenforceability of any right, title or interest of the Issuer or any Obligor therein or (ii) in a breach or termination pursuant to the terms of, or a default under, any such lease, license, contract property rights or agreement (other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law (including the Bankruptcy Code) or principles of equity), provided, however, that the Collateral shall include and such security interest shall attach immediately at such time as the condition causing such abandonment, invalidation or unenforceability shall be remedied and to the extent severable, shall attach immediately to any portion of such lease, license, contract, property rights or agreement that does not result in any of the consequences specified in (i) or (ii) above; (b) any asset (other than Accounts or Inventory) of the Issuer or any Obligor, which is subject to or secured by a Capital Lease Obligation or purchase money indebtedness permitted by clause (5) of the definition of “Permitted Debt” so long as the documents governing such Capital Lease Obligations or purchase money indebtedness do not permit other liens on such assets, (c) any of the outstanding voting capital stock of a Controlled Foreign Corporation in excess of 65% of the voting power of all classes of Capital Stock of such Controlled Foreign Corporation entitled to vote; provided that immediately upon the amendment of the United States Internal Revenue Code of 1986, as amended, to allow the pledge of a greater percentage of the voting power of capital stock in a Controlled Foreign Corporation without adverse tax consequences, the Collateral shall include, and the security interest granted by the Issuer and each Obligor shall attach to, such greater percentage of capital stock of each Controlled Foreign Corporation directly owned by the Issuer or any Obligor; (d) (i) any intent-to-use (ITU) United States trademark application for which an amendment to allege use or statement of use has not been filed under 15 U.S.C. § 1051(c) or 15 U.S.C. § 1051(d), respectively, or, if filed, has not been deemed in conformance with 15 U.S.C. § 1051(a), or examined and accepted, respectively, by the United States Patent and Trademark Office, in each case, only to the extent the grant of security interest in such intent-to-use Trademark is in violation of 15 U.S.C. §1060 and only unless and until a “Statement of Use” or “Amendment to Allege Use” is filed, has been deemed in conformance with 15 U.S.C. §1051(a) or examined and accepted, respectively, by the United States Patent and Trademark Office at which point such Trademarks shall automatically be included as Collateral; (ii) any property or assets owned by any Excluded Subsidiary or any Unrestricted Subsidiary, (iii) any property or assets owned by Parent that is not owned by the Issuer or its Restricted Subsidiaries and (iv) any of the outstanding capital stock of any Unrestricted Subsidiary; (e) any Capital Stock and other securities of a Subsidiary to the extent that the pledge of such Capital Stock and other securities results in the Issuer being required to file separate financial statements of such Subsidiary with the Commission, but only to the extent necessary to not be subject to such requirement and only for so long as such requirement is in existence and only with respect to the relevant notes affected.  In addition, in the event that Rule 3-16 of Regulation S-X under the Securities Act is amended, modified or interpreted by the Commission to require (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would require) the filing with the Commission (or any other governmental agency) of separate financial statements of any Subsidiary of the Issuer due to the fact that such Subsidiary’s Capital Stock secures the notes affected thereby, then the Capital Stock of such Subsidiary will automatically be deemed not to be part of the Collateral securing the relevant notes affected thereby but only to the extent necessary to not be subject to such requirement and only for so long as required to not be subject to such requirement.  In such event, the Collateral Documents may be amended or modified, without the consent of any holder of such notes, to the extent necessary to release the security interests in favor of such creditor on the shares of Capital Stock that are so deemed to no longer constitute part of the Collateral for the relevant notes.  In the event that Rule 3-16 of Regulation S-X under the Securities Act is amended, modified or interpreted by the Commission to permit (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would permit) the Capital Stock of such Subsidiary

 

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to secure the notes in excess of the amount then pledged without the filing with the Commission (or any other governmental agency) of separate financial statements of such Subsidiary, then such excess amount of the Capital Stock of such Subsidiary will automatically be deemed to be a part of the Collateral for the relevant notes unless such excess amount is otherwise an Excluded Asset; (f) any leasehold interests in real property; (g) any fee-owned real property with a book value of less than $2.5 million;  (h) commercial tort claims of less than $10.0 million;  (i) pledges and security interests prohibited by, or requiring any consent of any governmental authority pursuant to, law, rule or regulation; (j) Equity Interests in any joint venture with a third party that is not an Affiliate, to the extent a pledge of such Equity Interests is prohibited by the documents covering such joint venture; (k)(i) deposit or securities accounts the balance of which consists exclusively of (a) withheld income taxes and federal, state or local employment taxes in such amounts as are required in the reasonable judgment of the Issuer or any Obligor to be paid to the Internal Revenue Service or state or local government agencies within the following two months with respect to employees of the Issuer or its Subsidiaries and (b) amounts required to be paid over to an employee benefit plan pursuant to DOL Reg. Sec. 2510.3 102 on behalf of employees of the Issuer or its Subsidiaries, and (ii) all segregated deposit or securities accounts constituting (and the balance of which consists solely of funds set aside in connection with), payroll accounts and trust accounts; (l) proceeds and products (other than provided above) of any of the foregoing to the extent they constitute excluded collateral described in clauses (a) through (l).

 

Notwithstanding the foregoing, (i) in the event of the amendment of the United States Internal Revenue Code of 1986, as amended, to allow the pledge in excess of 65% of the voting power of all classes of Capital Stock of any Controlled Foreign Corporation entitled to vote without adverse tax consequences, the Issuer will use its commercially reasonable efforts to grant a security interest in such Capital Stock directly owned by the Issuer or any Obligor, subject to the limitations of paragraph (c) above, and (ii) in the event of any change in facts and circumstances (including but not limited to the modification, amendment or interpretation of Rule 3-16 of Regulation S-X under the Securities Act) that would permit the pledge of all or a portion of the Capital Stock of a Subsidiary formed under the laws of the Netherlands in excess of the amount then pledged without the filing of separate financial statements of such Subsidiary with the SEC (or any other governmental agency), the Issuer will use its commercially reasonable efforts to grant a security interest in such Capital Stock, subject to the limitations of paragraphs (c), (d) and (e) above.

 

“Grantors” means, collectively, the Issuer and the Obligors.

 

“Hedge Agreements” means an Interest Rate Agreement, a Currency Agreement or Commodity Agreement entered into with a hedging counterparty in the ordinary course of the Issuer’s or the Obligors’ business, and otherwise permitted pursuant to the ABL Documents, Notes Priority Documents and the Second Lien Documents, if any and the Subordinated Lien Documents, if any.

 

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

 

“Junior Documents” means (a) for the ABL Priority Collateral, (i) in respect of the ABL Documents, each of the Notes Priority Documents, the Second Lien Documents, if any, and the Subordinated Lien Documents, if any, (ii) in respect of the Notes Priority Documents, each of the Second Lien

 

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Documents, if any, and the Subordinated Lien Documents, and (iii) in respect of any Second Lien Documents, the Subordinated Lien Documents, if any, and (b) for the Note Priority Collateral, (i) in respect of the Notes Priority Documents, each of the Second Lien Documents, if any, the ABL Documents and the Subordinated Lien Documents, (ii) in respect of the Second Lien Documents, if any, the ABL Documents and the Subordinated Lien Documents, if any, and (iii) in respect of each of the ABL Documents, the Subordinated Lien Documents, if any.

 

“Junior Liens” means (a) for the ABL Priority Collateral, (i) in respect of the ABL Liens, each of the Notes Priority Liens, the Second Lien Liens, if any, and the Subordinated Lien Liens, if any, (ii) in respect of the Notes Priority Liens, each of the Second Lien Liens, if any, and the Subordinated Lien Liens, and (iii) in respect of the Second Lien Liens, if any, the Subordinated Lien Liens, if any, and (b) for the Note Priority Collateral, (i) in respect of the Notes Priority Liens, each of the Second Lien Liens, if any, the ABL Liens and the Subordinated Lien Liens, if any, (ii) in respect of each of the Second Lien Liens, each of the ABL Liens and the Subordinated Lien Liens, if any, and (iii) in respect of the ABL Liens, the Subordinated Lien Liens.

 

“Junior Representative” means (a) for the ABL Priority Collateral, (i) in respect of the ABL Collateral Agent, each of the Notes Priority Collateral Trustee and the Subordinated Lien Collateral Trustee, (ii) in respect of the Notes Priority Collateral Trustee, the Subordinated Lien Collateral Trustee, and (iii) in respect of the Subordinated Lien Collateral Trustee (on behalf of the Second Lien Secured Parties), the Subordinated Lien Collateral Trustee (on behalf of the Subordinated Lien Secured Parties) and (b) for the Note Priority Collateral, (i) in respect of the Notes Priority Collateral Trustee, each of the Subordinated Lien Collateral Trustee (on behalf of the Second Lien Secured Parties), the ABL Collateral Agent and the Subordinated Lien Collateral Trustee (on behalf of the Subordinated Lien Secured Parties), (ii) in respect of the Subordinated Lien Collateral Trustee (on behalf of the Second Lien Secured Parties), each of the ABL Collateral Agent and the Subordinated Lien Collateral Trustee (on behalf of the Subordinated Lien Secured Parties), and (iii) in respect of the ABL Collateral Agent, the Subordinated Lien Collateral Trustee (on behalf of the Subordinated Lien Secured Parties).

 

“Junior Secured Obligations” means (a) (i) in respect of the Notes Priority Obligations (to the extent such Obligations are secured by the Note Priority Collateral), each of the Second Lien Obligations, if any, the ABL Obligations and the Subordinated Lien Obligations, if any, and (ii) in respect of the Notes Priority Obligations (to the extent such Obligations are secured by the ABL Priority Collateral), each of the Second Lien Obligations, if any, and the Subordinated Lien Obligations, if any, (b) (i) in respect of the ABL Obligations (to the extent such Obligations are secured by the Note Priority Collateral), the Subordinated Lien Obligations, if any, and (ii) in respect of the ABL Obligations (to the extent such Obligations are secured by the ABL Priority Collateral), each of the Notes Priority Obligations, the Second Lien Obligations, if any, and the Subordinated Lien Obligations, if any, and (c) (i) in respect of the Second Lien Obligations (to the extent such Obligations are secured by the Note Priority Collateral), each of the ABL Obligations and the Subordinated Lien Obligations, if any, and (ii) in respect of the Second Lien Obligations (to the extent such Obligations are secured by the ABL Priority Collateral), the Subordinated Lien Obligations.

 

“Junior Secured Obligations Collateral” means the Collateral in respect of which a Junior Representative (on behalf of itself and the applicable Junior Secured Obligations Secured Parties) holds a Junior Lien.

 

“Junior Secured Obligations Secured Parties” means (a) for the ABL Priority Collateral, (i) in respect of the ABL Secured Parties, each of the Notes Priority Secured Parties, the Second Lien Secured Parties, if any, and the Subordinated Lien Secured Parties, if any, (ii) in respect of the Notes Priority Secured Parties, each of the Second Lien Secured Parties, if any, and the Subordinated Lien Secured

 

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Parties, if any, and (iii) in respect of the Second Lien Secured Parties, if any, the Subordinated Lien Secured Parties, if any, and (b) for the Note Priority Collateral, (i) in respect of the Notes Priority Secured Parties, each of the Second Lien Secured Parties, if any, the ABL Secured Parties and the Subordinated Lien Secured Parties, if any, (ii) in respect of the Second Lien Secured Parties, if any, each of the ABL Secured Parties and the Subordinated Lien Secured Parties, if any, and (iii) in respect of the ABL Secured Parties, the Subordinated Lien Secured Parties, if any.

 

“Junior Secured Obligations Security Documents” means (a) for the ABL Priority Collateral, (i) in respect of the ABL Security Documents, each of the Notes Priority Security Documents, the Second Lien Security Documents, if any, and the Subordinated Lien Security Documents, if any, (ii) in respect of the Notes Priority Security Documents, each of the Second Lien Security Documents, if any, and the Subordinated Lien Security Documents, if any, and (iii) in respect of the Second Lien Security Documents, if any, the Subordinated Lien Security Documents, if any, and (b) for the Note Priority Collateral, (i) in respect of the Notes Priority Security Documents, each of the ABL Security Documents, the Second Lien Security Documents, if any, and the Subordinated Lien Security Documents, if any, (ii) in respect of the Second Lien Security Documents, each of the ABL Security Documents and the Subordinated Lien Security Documents, if any, and (iii) in respect of the ABL Security Documents, the Subordinated Lien Security Documents, if any.

 

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including (1) any conditional sale or other title retention agreement, (2) any lease in the nature thereof, (3) any option or other agreement to sell or give a security interest and (4) any filing, authorized by or on behalf of the relevant grantor, of any financing statement under the UCC (or equivalent statutes) of any jurisdiction.

 

“Lien Priority Confirmation” means: (1) as to any additional ABL Debt, the written agreement of the holders of such additional ABL Debt, or their applicable representative, for the enforceable benefit of the ABL Collateral Agent, the Notes Priority Collateral Trustee, the Subordinated Lien Collateral Trustee, all existing and future Secured Parties and each existing and future representative with respect thereto:  (a) that such representative and all other holders of obligations in respect of such ABL Debt are bound by the provisions of this Agreement; (b) consenting to and directing the ABL Collateral Agent to act as agent for such additional ABL Debt or such representative, as applicable, and perform its obligations under this Agreement and the ABL Security Documents; and (c) that the holders of such obligations in respect of such additional ABL Debt are bound by this Agreement; (2) as to any additional Notes Priority Debt, the written agreement of the holders of such additional Notes Priority Debt, or their applicable representative, for the enforceable benefit of the ABL Collateral Agent, the Notes Priority Collateral Trustee, the Subordinated Lien Collateral Trustee, all existing and future Secured Parties and each existing and future representative with respect thereto:  (a) that such representative and all other holders of obligations in respect of such Notes Priority Debt are bound by the provisions of the Collateral Trust and Intercreditor Agreement and this Agreement; (b) consenting to and directing the Notes Priority Collateral Trustee to act as agent for such additional Notes Priority Debt or such representative, as applicable, and perform its obligations under the Collateral Trust and Intercreditor Agreement, the Notes Priority Security Documents and this Agreement; and (c) that the holders of such obligations in respect of such additional Notes Priority Debt are bound by the Collateral Trust and Intercreditor Agreement and this Agreement; and (3) as to any additional Second Lien Debt and Subordinated Lien Debt, the written agreement of the holders of such debt, or their applicable representative, for the enforceable benefit of the ABL Collateral Agent, the Notes Priority Collateral Trustee, the Subordinated Lien Collateral Trustee, all existing and future Secured Parties and each existing and future representative with respect thereto:  (a) that such representative and all the other holders of obligations in respect of such additional Second Lien Debt or Subordinated Lien Debt, as applicable, are bound by the provisions of this Agreement; (b) consenting to

 

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and directing the Subordinated Lien Collateral Trustee to act as agent for such additional Second Lien Debt or Subordinated Lien Debt, as applicable, or such representative, as applicable, and perform its obligations under this Agreement, and the Second Lien Security Documents or Subordinated Lien Security Documents, as applicable; and (c) that the holders of such obligations in respect of such additional Second Lien Debt or Subordinated Lien Debt, as applicable, are bound by this Agreement.

 

“Note Priority Collateral” means all of the tangible and intangible properties and assets at any time owned or acquired by the Issuer or any Obligor, including all real estate, equipment, intellectual property and all substitutions, replacements, accessions, products and proceeds of any or all of the foregoing, except Excluded Assets and the ABL Priority Collateral.

 

“Notes Priority Debt” means Indebtedness under the Notes Priority Indenture and the Notes and, to the extent issued or outstanding, any other Indebtedness (including any Hedging Obligations  (as defined in the Notes Priority Indenture) of the Issuer or the Obligors designated as such by the Issuer in writing to the ABL Collateral Agent, the Notes Priority Collateral Trustee and the Subordinated Lien Collateral Trustee, if any; provided that:  (a) on or before the date on which such Indebtedness is incurred, an officer’s certificate of the Issuer is delivered to the ABL Collateral Agent, the Notes Priority Collateral Trustee and the Subordinated Lien Collateral Trustee, if any, designating such Indebtedness as “Notes Priority Debt” for the purposes of this Agreement, the ABL Documents, the Notes Priority Documents, the Second Lien Documents, if any, and the Subordinated Lien Documents, if any, and certifying that such Indebtedness may be incurred (and secured as contemplated in Section 2.01 hereof and in the Collateral Trust and Intercreditor Agreement) without violating the terms of any ABL Document, Notes Priority Document, Second Lien Document, if any, or Subordinated Lien Document, if any, or causing any default thereunder, if any; (b) such Indebtedness is evidenced or governed by an indenture, credit agreement, loan agreement, note agreement, promissory note or other agreement or instrument that includes a Lien Priority Confirmation; (c) such Indebtedness is designated as “Notes Priority Debt” in accordance with the requirements of the Collateral Trust and Intercreditor Agreement; and (d) at the time of the incurrence thereof, the applicable Notes Priority Debt may be incurred (and secured as contemplated in Section 2.01 hereof and in the Collateral Trust and Intercreditor Agreement) without violating the terms of any ABL Document, Notes Priority Document, Second Lien Document, if any, or Subordinated Lien Document, if any, or causing any default thereunder.

 

“Notes Priority Documents” means, collectively, the Notes Priority Indenture, the Hedge Agreements, the Notes Priority Security Documents, and each of the other agreements, documents and instruments providing for or evidencing any other Notes Priority Obligation, and any other document or instrument executed or delivered at any time in connection therewith, to the extent such are effective at the relevant time, as each may be amended, restated, supplemented, modified, renewed, extended or refinanced from time to time.

 

“Notes Priority Indenture” has the meaning set forth in the preamble.

 

“Notes Priority Liens” means Liens on the Collateral created under the Notes Priority Security Documents to secure the Notes Priority Obligations.

 

“Notes Priority Obligations” means, subject to the terms and conditions in the Collateral Trust and Intercreditor Agreement, (i) all principal of and interest (including without limitation any Post- Petition Interest) and premium (if any) on all notes issued pursuant to the Notes Priority Indenture, (ii) all reimbursement obligations (if any) and interest thereon (including without limitation any Post-Petition Interest) with respect to any letter of credit or similar instruments issued pursuant to the Notes Priority Documents, (iii) all Hedging Obligations, (iv) all guarantee obligations, fees, expenses and all other obligations under the Notes Priority Documents, in each case whether or not allowed or allowable in an Insolvency 

 

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or Liquidation Proceeding, and (v) all obligations arising with respect to any Notes Priority Debt (including, without limitation, principal, premium, interest (including Post-Petition Interest at the rate provided in the relevant Notes Priority Document, whether or not a claim for Post-Petition Interest is allowed in an applicable Insolvency or Liquidation Proceeding), reimbursements under letters of credit, fees, indemnifications, expenses and other obligations and guarantees of the foregoing).

 

“Notes Priority Secured Parties” means the Secured Parties (as defined in the Notes Priority Security Documents).

 

“Notes Priority Security Documents” means the Notes Priority Pledge and Security Agreement, dated as of March 18, 2011, as amended, among the Grantors and the Notes Priority Collateral Trustee and as it may be further amended, restated or modified from time to time, and any other documents, agreements or instruments now existing or entered into after the date hereof that create (or purport to create) Liens on any assets or properties of any Grantor to secure any Notes Priority Obligations.

 

“Obligations” means the ABL Obligations, the Notes Priority Obligations, the Second Lien Obligations, if any, and the Subordinated Lien Obligations, if any.

 

“Paid In Full” and “Payment In Full” in respect of any Obligations means:  (a) payment in full in cash of the principal of and interest (including interest accruing on or after the commencement of any Insolvency or Liquidation Proceeding at the rate provided in the respective documentation, whether or not such interest would be allowed in such Insolvency or Liquidation Proceeding), on all Indebtedness and other obligations and liabilities outstanding under the ABL Documents, the Notes Priority Documents, the Second Lien Documents or the Subordinated Lien Documents, as applicable; (b) in respect of the Notes Priority Obligations only, payment in full in cash of all Hedging Obligations constituting Notes Priority Obligations or the cash collateralization of all such Hedging Obligations on terms satisfactory to each applicable counterparty; (c) payment in full in cash of all other ABL Obligations, Notes Priority Obligations, Second Lien Obligations or Subordinated Lien Obligations, as applicable, that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid (other than any indemnification obligations for which no claim or demand for payment, whether oral or written, has been made at such time); (d) termination or expiration of all commitments, if any, to extend credit that would constitute ABL Obligations, Notes Priority Obligations, Second Lien Obligations or Subordinated Lien Obligations, as applicable; and (e) termination or cash collateralization (in an amount and manner reasonably satisfactory to the applicable Agent, but in no event greater than 105% of the aggregate undrawn face amount) of all letters of credit issued under the ABL Documents, the Notes Priority Documents, the Second Lien Documents or the Subordinated Lien Documents, as applicable.

 

“Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.

 

“Post-Petition Interest” means any interest or entitlement to fees or expenses or other charges that accrue after the commencement of any Insolvency or Liquidation Proceeding at the rate provided for in the respective documentation, whether or not allowed or allowable in any such Insolvency or Liquidation Proceeding.

 

“Representative” means (a) in the case of any ABL Obligations, the ABL Collateral Agent, (b) in the case of any Notes Priority Obligations, the Notes Priority Collateral Trustee, (c) in the case of any Second Lien Obligations, the Subordinated Lien Collateral Trustee (on behalf of the Second Lien Secured Parties), and (d) in the case of any Subordinated Lien Obligations, the Subordinated Lien Collateral Trustee (on behalf of the Subordinated Lien Secured Parties).

 

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“Second Lien Debt” means any Indebtedness of the Issuer or the Obligors designated as such by the Issuer in writing to the ABL Collateral Agent, the Notes Priority Collateral Trustee and the Subordinated Lien Collateral Trustee; provided that:  (a) on or before the date on which such Indebtedness is incurred, an officer’s certificate of the Issuer is delivered to the ABL Collateral Agent, the Notes Priority Collateral Trustee and the Subordinated Lien Collateral Trustee, designating such Indebtedness as “Second Lien Debt” for the purposes of this Agreement, the ABL Documents, the Notes Priority Documents, the Second Lien Documents, if any, and the Subordinated Lien Documents, if any, and certifying that the applicable Second Lien Debt may be incurred (and secured as contemplated by Section 2.01 hereof) without violating the terms of any ABL Document, Notes Priority Document, Second Lien Document or Subordinated Lien Document or causing any default thereunder; (b) such Indebtedness is evidenced or governed by an indenture, credit agreement, loan agreement, note agreement, promissory note or other agreement or instrument that includes a Lien Priority Confirmation; (c) such Indebtedness is designated as “Second Lien Debt” in accordance with the requirements of this Agreement, the ABL Credit Agreement and the Notes Priority Indenture;  (d) at the time of the incurrence thereof, the applicable Second Lien Debt may be incurred (and secured as contemplated by Section 2.01 hereof) without violating the terms of any ABL Document, Notes Priority Document, Second Lien Document or Subordinated Lien Document or causing any default thereunder and (e) the Subordinated Lien Collateral Trustee has heretofore executed and delivered an appropriate joinder in the form of Exhibit A hereto.

 

“Second Lien Documents” means, collectively, each of the agreements, documents and instruments providing for or evidencing any other Second Lien Obligation, and any other document or instrument executed or delivered at any time in connection therewith, to the extent such are effective at the relevant time, as each may be amended, restated, supplemented, modified, renewed, extended or refinanced from time to time.

 

“Second Lien Liens” means Liens on the Collateral created under the Second Lien Security Documents to secure the Second Lien Obligations.

 

“Second Lien Obligations” means, subject to the terms and conditions in this Agreement, all obligations arising with respect to any Second Lien Debt (including, without limitation, principal, premium, interest (including Post-Petition Interest at the rate provided in the relevant Second Lien Document, whether or not a claim for Post-Petition Interest is allowed in an applicable Insolvency or Liquidation Proceeding), reimbursements under letters of credit, fees, indemnifications, expenses and other obligations and guarantees of the foregoing).

 

“Second Lien Secured Parties” means the Secured Parties (as defined in the Second Lien Security Documents).

 

“Second Lien Security Documents” means any documents, agreements or instruments now existing or entered into after the date hereof that create (or purport to create) Liens on any assets or properties of any Grantor to secure any Second Lien Obligations.

 

“Secured Parties” means the ABL Secured Parties, the Notes Priority Secured Parties, the Second Lien Secured Parties and the Subordinated Lien Secured Parties.

 

“Security Documents” means the ABL Security Documents, the Notes Priority Security Documents, the Second Lien Security Documents and the Subordinated Lien Security Documents.

 

“Senior Documents” means (a) for the ABL Priority Collateral, (i) in respect of the Notes Priority Documents, the ABL Documents, (ii) in respect of the Second Lien Documents, each of the Notes Priority Documents and the ABL Documents, and (iii) in respect of the Subordinated Lien 

 

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Documents, each of the Second Lien Documents, the Notes Priority Documents and the ABL Documents, and (b) for the Note Priority Collateral, (i) in respect of the Second Lien Documents, the Notes Priority Documents, (ii) in respect of the ABL Documents, each of the Second Lien Documents and the Notes Priority Documents, (iii) in respect of the Subordinated Lien Documents, each of the ABL Documents, the Second Lien Documents and the Notes Priority Documents.

 

“Senior Liens” means (a) for the ABL Priority Collateral, (i) in respect of the Notes Priority Liens, the ABL Liens, (ii) in respect of the Second Lien Liens, each of the Notes Priority Liens and the ABL Liens, and (iii) in respect of the Subordinated Lien Liens, each of the Second Lien Liens, the Notes Priority Liens and the ABL Liens, and (b) for the Note Priority Collateral, (i) in respect of the Second Lien Liens, the Notes Priority Liens, (ii) in respect of the ABL Lien Liens, each of the Second Lien Liens and the Notes Priority Liens, (iii) in respect of the Subordinated Lien Liens, each of the ABL Liens, the Second Lien Liens and the Notes Priority Liens.

 

“Senior Representative” means (a) for the ABL Priority Collateral, (i) in respect of the Notes Priority Collateral Trustee, the ABL Collateral Agent, (ii) in respect of the Subordinated Lien Collateral Trustee (on behalf of the Second Lien Secured Parties), each of the Notes Priority Collateral Trustee and the ABL Collateral Agent, and (iii) in respect of the Subordinated Lien Collateral Trustee (on behalf of the Subordinated Lien Secured Parties), each of the Subordinated Lien Collateral Trustee (on behalf of the Second Lien Secured Parties), the Notes Priority Collateral Trustee and the ABL Collateral Agent, and (b) for the Note Priority Collateral, (i) in respect of the Subordinated Lien Collateral Trustee (on behalf of the Second Lien Secured Parties), the Notes Priority Collateral Trustee, (ii) in respect of the ABL Collateral Agent, each of the Subordinated Lien Collateral Trustee (on behalf of the Second Lien Secured Parties) and the Notes Priority Collateral Trustee and (iii) in respect of the Subordinated Lien Collateral Trustee (on behalf of the Subordinated Lien Secured Parties), each of the ABL Collateral Agent, the Subordinated Lien Collateral Trustee (on behalf of the Second Lien Secured Parties) and the Notes Priority Collateral Trustee.

 

“Senior Secured Obligations” means (a) for the ABL Priority Collateral, (i) in respect of the Notes Priority Obligations, the ABL Obligations, (ii) in respect of the Second Lien Obligations, each of the Notes Priority Obligations and the ABL Obligations, and (iii) in respect of the Subordinated Lien Obligations, each of the Second Lien Obligations, the Notes Priority Obligations and the ABL Obligations, and (b) for the Note Priority Collateral, (i) in respect of the Second Lien Obligations, the Notes Priority Obligations, (ii) in respect of the ABL Obligations, each of the Second Lien Obligations and the Notes Priority Obligations and (iii) in respect of the Subordinated Lien Obligations, each of the Second Lien Obligations, the ABL Obligations and the Notes Priority Obligations.

 

“Senior Secured Obligations Collateral” means the Collateral in respect of which the Senior Representative (on behalf of itself and the applicable Senior Secured Obligations Secured Parties) holds a Senior Lien.

 

“Senior Secured Obligations Secured Parties” means (a) for the ABL Priority Collateral, (i) in respect of the Notes Priority Secured Parties, the ABL Secured Parties, (ii) in respect of the Second Lien Secured Parties, each of the Notes Priority Secured Parties and the ABL Secured Parties, and (iii) in respect of the Subordinated Lien Secured Parties, each of the Second Lien Secured Parties, the Notes Priority Secured Parties and the ABL Secured Parties, and (b) for the Note Priority Collateral, (i) in respect of the Second Lien Secured Parties, the Notes Priority Secured Parties, (ii) in respect of the ABL Secured Parties, each of the Second Lien Secured Parties and the Notes Priority Secured Parties and (iii) in respect of the Subordinated Lien Secured Parties, each of the ABL Secured Parties, the Second Lien Secured Parties and the Notes Priority Secured Parties.

 

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“Senior Secured Obligations Security Documents” means (a) for the ABL Priority Collateral, (i) in respect of the Notes Priority Security Documents, the ABL Security Documents, (ii) in respect of the Second Lien Security Documents, each of the Notes Priority Security Documents and the ABL Security Documents, and (iii) in respect of the Subordinated Lien Security Documents, each of the Second Lien Security Documents, the Notes Priority Security Documents and the ABL Security Documents, and (b) for the Note Priority Collateral, (i) in respect of the Second Lien Security Documents, the Notes Priority Security Documents, (ii) in respect of the ABL Security Documents, each of the Second Lien Security Documents and the Notes Priority Security Documents, (ii) in respect of the Subordinated Lien Security Documents, each of the Second Lien Security Documents, the ABL Security Documents and the Notes Priority Security Documents.

 

“Subordinated Lien Collateral Trustee” means, the respective creditor or trustee, agent or representative designated as such in the joinder executed by such person in the form of Exhibit A hereto.

 

“Subordinated Lien Debt” means, to the extent issued or outstanding, any Indebtedness of the Issuer or the Obligors designated as such by the Issuer in writing to the ABL Collateral Agent, the Notes Priority Collateral Trustee and the Subordinated Lien Collateral Trustee; provided that:  (a) on or before the date on which such Indebtedness is incurred, an officer’s certificate of the Issuer is delivered to the ABL Collateral Agent, the Notes Priority Collateral Trustee and the Subordinated Lien Collateral Trustee, designating such Indebtedness as “Subordinated Lien Debt” for the purposes of this Agreement, the ABL Documents, the Notes Priority Documents, the Second Lien Documents and the Subordinated Lien Documents, if any, and certifying that such Indebtedness may be incurred (and secured as contemplated by Section 2.01 hereof) without violating the terms of any ABL Document, Notes Priority Document, Second Lien Document or Subordinated Lien Document or causing any default thereunder; (b) such Indebtedness is evidenced or governed by an indenture, credit agreement, loan agreement, note agreement, promissory note or other agreement or instrument that includes a Lien Priority Confirmation; (c) such Indebtedness is designated as “Subordinated Lien Debt” in accordance with the requirements of this Agreement, the ABL Credit Agreement and the Notes Priority Indenture; and (d) at the time of the incurrence thereof, the applicable Subordinated Lien Debt may be incurred (and secured as contemplated by Section 2.01 hereof) without violating the terms of any ABL Document, Notes Priority Document, Second Lien Document or Subordinated Lien Document or causing any default thereunder (and the Subordinated Lien Collateral Trustee has heretofore executed and delivered an appropriate joinder in the form of Exhibit A hereto.

 

“Subordinated Lien Documents” means, collectively, the Subordinated Lien Debt Documents, the Subordinated Lien Security Documents and each of the agreements, documents and instruments providing for or evidencing any other Subordinated Lien Obligation, and any other document or instrument executed or delivered at any time in connection therewith, to the extent such are effective at the relevant time, as each may be amended, restated, supplemented, modified, renewed, extended or refinanced from time to time.

 

“Subordinated Lien Liens” means Liens on the Collateral created under the Subordinated Lien Security Documents to secure the Subordinated Lien Obligations.

 

“Subordinated Lien Obligations” means, subject to the terms and conditions in this Agreement, all obligations arising with respect to any Subordinated Lien Debt (including, without limitation, principal, premium, interest (including Post-Petition Interest at the rate provided in the relevant Subordinated Lien Document, whether or not a claim for Post-Petition Interest is allowed in an applicable Insolvency or Liquidation Proceeding), reimbursements under letters of credit, fees, indemnifications, expenses and other obligations and guarantees of the foregoing).

 

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“Subordinated Lien Secured Parties” means the Secured Parties (as defined in the Subordinated Lien Security Documents).

 

“Subordinated Lien Security Documents” means, collectively, any documents, agreements or instruments now existing or entered into after the date hereof that create (or purport to create) Liens on any assets or properties of any Grantor to secure any Subordinated Lien Obligations.

 

“subsidiary” means, with respect to any specified Person:  (a) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other subsidiaries of that Person (or a combination thereof), and (b) any partnership (i) the sole general partner or the managing general partner of which is such Person or a subsidiary of such Person or (ii) the only general partners of which are such Person or one or more subsidiaries of such Person (or any combination thereof).

 

“UCC” means the Uniform Commercial Code as from time to time in effect in the State of New York (or equivalent statutes in other states).

 

ARTICLE II

 

Subordination of Junior Liens; Certain Agreements

 

SECTION 2.01.                                 Subordination of Junior Liens.

 

(a)                                  Notwithstanding the date, manner or order of creation, attachment, or perfection of the security interests and Liens granted to the ABL Collateral Agent, the Notes Priority Collateral Trustee and the Subordinated Lien Collateral Trustee, if any, and notwithstanding any provisions of the UCC, or any applicable law or decision or this Agreement, the ABL Documents, the Notes Priority Documents, the Second Lien Documents, if any, the Subordinated Lien Documents, if any, or any other agreement or instrument to the contrary, or whether and irrespective of whether any Senior Secured Obligations Secured Party holds possession of all or any part of the Collateral or of the time or any failure, defect or deficiency or alleged failure, defect or deficiency in any of the foregoing or of any avoidance, invalidation or subordination by any third party or court of competent jurisdiction of the Senior Liens, all Junior Liens in respect of any Collateral are expressly subordinated and made junior in right, priority, operation and effect to any and all Senior Liens in respect of such Collateral.  Notwithstanding anything to the contrary in this Agreement, the following shall be the relative priority of the security interests and Liens of the ABL Collateral Agent, the Notes Priority Collateral Trustee, the Subordinated Collateral Trustee (on behalf of the Second Lien Secured Parties) and the Subordinated Collateral Trustee (on behalf of the Subordinated Lien Secured Parties) in the Collateral:

 

(A)                              The ABL Collateral Agent (on behalf of the ABL Secured Parties) shall have a first priority Lien on the ABL Priority Collateral; the Notes Priority Collateral Trustee (on behalf of the Notes Priority Secured Parties) shall have a second priority Lien on the ABL Priority Collateral; the Subordinated Lien Collateral Trustee (on behalf of the Second Lien Secured Parties) shall have a third priority Lien on the ABL Priority Collateral; and the Subordinated Lien Collateral Trustee (on behalf of the Subordinated Lien Secured Parties) shall have a fourth priority Lien on the ABL Priority Collateral; and

 

(B)                                The Notes Priority Collateral Trustee (on behalf of the Notes Priority Secured Parties) shall have a first priority Lien on the Note Priority Collateral; the Subordinated Lien Collateral 

 

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Trustee (on behalf of the Second Lien Secured Parties) shall have a second priority Lien on the Note Priority Collateral; the ABL Collateral Agent (on behalf of the ABL Secured Parties) shall have a third priority Lien on the Note Priority Collateral; and the Subordinated Lien Collateral Trustee (on behalf of the Subordinated Lien Secured Parties) shall have a fourth priority Lien on the Note Priority Collateral.

 

(b)                                 It is acknowledged that (i) the aggregate amount of the Senior Secured Obligations may, subject to the limitations set forth in the ABL Documents, the Notes Priority Documents, the Second Lien Documents and the Subordinated Lien Documents, be increased from time to time, (ii) all or a portion of the ABL Obligations consists or may consist of Indebtedness that is revolving in nature, and the amount thereof that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed, and (iii) the Senior Secured Obligations may, subject to the limitations set forth in the ABL Documents, the Notes Priority Documents, the Second Lien Documents and the Subordinated Lien Documents, be increased, extended, renewed, replaced, restated, supplemented, restructured, repaid, refunded, refinanced or otherwise amended or modified from time to time, all without affecting the subordination of the Junior Liens hereunder or the provisions of this Agreement defining the relative rights of the ABL Secured Parties, the Notes Priority Secured Parties, the Second Lien Secured Parties and the Subordinated Lien Secured Parties.  The lien priorities provided for herein shall not be altered or otherwise affected by any amendment, modification, supplement, extension, increase, replacement, renewal, restatement or refinancing of either the Junior Secured Obligations (or any part thereof) or the Senior Secured Obligations (or any part thereof), by the release of any Collateral or of any guarantees for any Senior Secured Obligations or by any action that any Representative or Secured Party may take or fail to take in respect of any Collateral.

 

(c)                                  The subordination of all Junior Liens to all Senior Liens as set forth in this Agreement is with respect to only the priority of the Liens held by or on behalf of the Senior Secured Obligations Secured Parties and shall not constitute a subordination of the Obligations owing to any Secured Party to the Obligations owing to any other Secured Party.

 

(d)                                 The parties hereto agree that it is their intention that the Collateral held by each Agent is identical in all material respects to the Collateral held by each other Agent.

 

SECTION 2.02.                                 New Liens.  Until the Senior Secured Obligations shall have been Paid in Full, (i) each Agent agrees, on behalf of the applicable Secured Parties, that no Agent, on behalf of the applicable Secured Parties, nor any other Secured Party, shall acquire or hold any Lien on any assets of any Grantor which with respect to which such Agent has actual knowledge that such assets are not also subject to a Lien in favor of each other Agent on behalf of the applicable Secured Parties and (ii) each Grantor agrees not to grant any Lien on any of its assets in favor of any Agent, on behalf of the applicable Secured Parties, unless it has granted a Lien on such assets in favor of each other Agent, on behalf of the applicable Secured Parties (in either case, except to the extent that the assets subject to such Liens are not required to be pledged as Collateral for the respective Obligations to the extent provided in the ABL Documents, the Notes Priority Documents, the Second Lien Documents or the Subordinated Lien Documents, as the case may be).  If any Agent shall (nonetheless and in breach hereof) acquire any Lien on any assets of any Grantor to secure any Obligations, which assets are not also subject to a Lien in favor of each other Agent to secure the applicable Obligations, then the Agent acquiring such Lien shall, without the need for any further consent of any other Person and notwithstanding anything to the contrary in any Security Documents, either (x) release such Lien or (y) (1) also hold and be deemed to have held such Lien for the benefit of each other Agent and Secured Parties subject to the priorities set forth herein, with any amounts received in respect thereof subject to distribution and turnover hereunder and (2) in the case of the Junior Representative acquiring a Lien, assign such Lien to the Senior Representative to 

 

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secure the Senior Secured Obligations (in which case the Junior Representative may retain a Junior Lien on such assets subject to the terms hereof).

 

SECTION 2.03.                                 No Action With Respect to Junior Secured Obligations Collateral Subject to Senior Liens.

 

(a)                                  Except to the extent expressly permitted by Section 2.07, no Junior Representative or other Junior Secured Obligations Secured Party shall commence or instruct any Junior Representative to commence any Enforcement Action available to it in respect of any Junior Secured Obligations Collateral under any Junior Secured Obligations Security Document, applicable law or otherwise, at any time when such Junior Secured Obligations Collateral shall be subject to any Senior Lien and any Senior Secured Obligations secured by such Senior Lien shall remain outstanding or any commitment to extend credit that would constitute Senior Secured Obligations secured by such Senior Lien shall remain in effect, it being agreed that only the Senior Representative, acting in accordance with the applicable Senior Secured Obligations Security Documents, shall be entitled to take any Enforcement Actions.  The Senior Representative shall provide written notice to each Junior Representative in the event that the Senior Representative takes any Enforcement Action; provided, however, that failure to give such notice shall not affect the lien subordination or other rights of the Senior Representative under this Agreement.

 

(b)                                 Notwithstanding anything contained herein to the contrary, each of the Agents retains the right to:

 

(A)                              file a claim or statement of interest with respect to the ABL Obligations, the Notes Priority Obligations, the Second Lien Obligations or the Subordinated Lien Obligations, as applicable, in any case or proceeding commenced by or against any Grantor under the Bankruptcy Code or any similar bankruptcy law for the relief or protection of debtors, any other proceeding of a similar nature for the reorganization, protection, restructuring, compromise or arrangement of any of the assets and/or liabilities of any Grantor or any similar case or proceeding, as applicable,

 

(B)                                take any action (not adverse to the priority status of any of the Liens of any Senior Representative, or the rights of any Senior Representative or any Senior Secured Obligations Secured Party, to exercise any Enforcement Action in respect thereof) in order to create, perfect, preserve or protect its Liens on any of the Collateral,

 

(C)                                file any necessary or appropriate responsive or defensive pleadings in opposition to any motion, claim, or other pleading objecting to or otherwise seeking the disallowance of the claims of such Agent or any of the Secured Parties for whom it acts as Agent, in either case, not inconsistent with the terms of this Agreement,

 

(D)                               to the extent such holders acknowledge that such holders hold an unsecured claim, file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of any Grantors arising under any case or proceeding referred to in clause (1) above, except to the extent inconsistent with the terms of this Agreement, and

 

(E)                                 vote in favor of or against any plan of reorganization, compromise or arrangement, or file any proof of claim, make other filings and/or make any arguments and motions with respect to the ABL Obligations, the Notes Priority Obligations, the Second Lien Obligations or the Subordinated Lien Obligations, as applicable, that in each case, are not inconsistent with the terms of this Agreement.

 

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SECTION 2.04.                                 No Duties of Senior Representative.

 

(a)                                  Each Junior Secured Obligations Secured Party acknowledges and agrees that neither the Senior Representative nor any other Senior Secured Obligations Secured Party shall have any duties or other obligations to such Junior Secured Obligations Secured Party with respect to any Senior Secured Obligations Collateral, other than to transfer to the Junior Representative, to the extent permitted by applicable law, (i) any proceeds of any such Collateral that constitutes Junior Secured Obligations Collateral remaining in its possession following any Disposition of such Collateral and the Payment in Full of the Senior Secured Obligations secured thereby (in each case, unless the Junior Liens on all such Junior Secured Obligations Collateral are terminated and released prior to or concurrently with such Disposition and Payment In Full) or (ii) if the Senior Representative shall be in possession of all or any part of such Collateral after such Payment in Full, such Collateral or any part thereof remaining, in each case without representation or warranty on the part of the Senior Representative or any Senior Secured Obligations Secured Party.

 

(b)                                 Prior to Payment In Full.  In furtherance of the foregoing, each Junior Secured Obligations Secured Party acknowledges and agrees that until the Senior Secured Obligations secured by any Collateral in respect of which such Junior Secured Obligations Secured Party holds a Junior Lien shall have been Paid In Full, the Senior Representative shall be entitled, for the benefit of the holders of such Senior Secured Obligations, to Dispose of or deal with such Collateral as provided herein and in the Senior Secured Obligations Security Documents without regard to any Junior Lien or any rights to which the holders of the Junior Secured Obligations would otherwise be entitled as a result of such Junior Lien.  Such permitted actions shall include the rights of an agent appointed by the Senior Representative and Senior Secured Obligations Secured Parties to Dispose of such Senior Secured Obligations Collateral upon foreclosure, to incur expenses in connection with such Disposition, and to exercise all the rights and remedies of a secured creditor under the UCC of any applicable jurisdiction and of a secured creditor under the Bankruptcy Code or the laws of any applicable jurisdiction.  Without limiting the foregoing, each Junior Secured Obligations Secured Party agrees that neither the Senior Representative nor any other Senior Secured Obligations Secured Party shall have any duty or obligation first to marshal or realize upon any type of Senior Secured Obligations Collateral (or any other collateral securing the Senior Secured Obligations), or to Dispose of or otherwise liquidate all or any portion of such Collateral (or any other Collateral securing the Senior Secured Obligations), in any manner that would maximize the return to the Junior Secured Obligations Secured Parties, notwithstanding that the order and timing of any such Disposition or liquidation may affect the amount of proceeds actually received by the Junior Secured Obligations Secured Parties from such Disposition or liquidation.

 

(c)                                  Waiver.  Each of the Junior Secured Obligations Secured Parties waives any claim such Junior Secured Obligations Secured Party may now or hereafter have against the Senior Representative or any other Senior Secured Obligations Secured Party (or their representatives) arising out of (i) any actions which the Senior Representative or the Senior Secured Obligations Secured Parties take or omit to take (including actions with respect to the creation, perfection or continuation of Liens on any Collateral, actions with respect to the foreclosure upon, sale, release or depreciation of, or failure to realize upon, any of the Collateral and actions with respect to the collection of any claim for all or any part of the Senior Secured Obligations from any account debtor, guarantor or any other party) in accordance with the Senior Secured Obligations Security Documents or any other agreement related thereto or to the collection of the Senior Secured Obligations or the valuation, use, protection or release of any security for the Senior Secured Obligations, (ii) any election by the Senior Representative or any Senior Secured Obligations Secured Parties, in any proceeding instituted under the Bankruptcy Code, of the application of Section 1111(b) of the Bankruptcy Code or (iii) subject to Section 2.07, any borrowing of, or grant of a security interest or administrative expense priority under Section 363 or Section 364 of the Bankruptcy Code to, the Issuer, the Obligors or any of their subsidiaries, as debtor-in-possession.

 

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SECTION 2.05.                                 Application of Proceeds; No Interference; Payment Over; Reinstatement.

 

(a)                                  So long as the Senior Secured Obligations have not been Paid in Full, any Senior Secured Obligations Collateral or proceeds thereof received by the Senior Representative in connection with any Disposition of, or collection on, such Senior Secured Obligations Collateral upon the taking of any Enforcement Action (including any right of setoff and including as a result of any distribution of or in respect of any Senior Secured Obligations Collateral (whether or not expressly characterized as such) or in any Insolvency or Liquidation Proceeding) shall be applied by the Senior Representative to the Senior Secured Obligations in accordance with the Senior Documents.  Upon the Payment in Full of the Senior Secured Obligations, the Senior Representative shall deliver to the Junior Representative with the then-highest priority claim with respect to such Collateral any remaining Senior Secured Obligations Collateral and any proceeds thereof then held by it in the same form as received, together with any necessary endorsements, or as a court of competent jurisdiction may otherwise direct, to be applied by the Junior Representative with the then-highest priority claim with respect to such Collateral to the Junior Secured Obligations in accordance with the Junior Documents.

 

(b)                                 [Reserved]

 

(c)                                  Until the Junior Representative has received written notice from the Senior Representative that the Senior Secured Obligations have been Paid In Full, each Junior Secured Obligations Secured Party agrees that (i) it will not take, cause to be taken, or support any other Person in taking, any action the purpose or effect of which is, or could be, to make any Junior Lien pari passu with, or to give such Junior Secured Obligations Secured Party any preference or priority relative to, any Senior Lien with respect to the Collateral subject to such Senior Lien and Junior Lien or any part thereof, (ii) it will not contest, challenge or question, or support any other Person in contesting, challenging or questioning, in any proceeding the validity or enforceability of any Senior Secured Obligations or Senior Secured Obligations Security Document, the validity, attachment, perfection or priority of any Senior Lien, or the validity or enforceability of the priorities, rights or duties established by or other provisions of this Agreement, (iii) it will not take or cause to be taken, or support any other Person in taking, any action the purpose or intent of which is, or could be, to interfere, hinder or delay, in any manner, whether by judicial proceedings or otherwise, any sale, transfer or other Disposition of the Collateral subject to any Junior Lien by any Senior Secured Obligations Secured Parties secured by Senior Liens on such Collateral or any Senior Representative acting on their behalf, (iv) it will have no right to (A) direct any Senior Representative or any holder of Senior Secured Obligations to exercise any right, remedy or power with respect to the Collateral subject to any Junior Lien or (B) consent to the exercise by any Senior Representative or any other Senior Secured Obligations Secured Party of any right, remedy or power with respect to the Collateral subject to any Junior Lien, (v) it will not institute, or support any other Person in instituting, any suit or assert in any suit, bankruptcy, insolvency or other proceeding any claim against any Senior Representative or other Senior Secured Obligations Secured Party seeking damages from or other relief by way of specific performance, instructions or otherwise with respect to, and neither any Senior Representative nor any other Senior Secured Obligations Secured Party will be liable for, any action taken or omitted to be taken by such Senior Representative or other Senior Secured Obligations Secured Party with respect to any Collateral securing such Senior Secured Obligations that is subject to any Junior Lien, (vi) it will not seek, and will waive any right, to have any Senior Secured Obligations Collateral subject to any Junior Lien or any part thereof marshaled upon any foreclosure or other Disposition of such Collateral and (vii) it will not attempt, directly or indirectly, whether by judicial proceedings or otherwise, to challenge the enforceability of any provision of this Agreement.

 

(d)                                 The Junior Representative and each other Junior Secured Obligations Secured Party hereby agrees that if it obtains possession of any Senior Secured Obligations Collateral or realizes

 

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any proceeds or payment in respect of any such Collateral, pursuant to any Junior Secured Obligations Security Document or by the exercise of any rights available to it under applicable law or in any Insolvency or Liquidation Proceeding or through any other exercise of remedies, at any time when any Senior Secured Obligations secured or intended to be secured by such Collateral shall remain outstanding or any commitment to extend credit that would constitute Senior Secured Obligations secured or intended to be secured by such Senior Lien remains in effect, then it will segregate and hold such Collateral, proceeds or payment in trust for the Senior Representative and the Senior Secured Obligations Secured Parties and promptly transfer such Collateral, proceeds or payment, as the case may be, to the Senior Representative.

 

(e)                                  Each Junior Secured Obligations Secured Party agrees that if, at any time, all or part of any payment with respect to any Senior Secured Obligations previously made shall be rescinded or required to be returned or repaid for any reason whatsoever (including an order or judgment for disgorgement of a preference under the Bankruptcy Code, or any similar law, or the settlement of any claim in respect thereof), such Junior Secured Obligations Secured Party shall promptly pay over to the Senior Representative any payment received by it and then in its possession or under its control in respect of any Collateral subject to any Senior Lien securing such Senior Secured Obligations and shall promptly turn any Collateral subject to any such Senior Lien then held by it over to the Senior Representative, and the provisions set forth in this Agreement shall be reinstated in full force and effect as if such payment had not been made, until the payment and satisfaction in full of the Senior Secured Obligations.

 

SECTION 2.06.                                 Automatic Release of Junior Liens.

 

(a)                                  The Junior Representative and each other Junior Secured Obligations Secured Party agree to the following with respect to releases of Liens:  (1) in the event of any Disposition permitted under the Senior Documents and not expressly prohibited under the terms of the Junior Documents of any Senior Secured Obligations Collateral subject to any Junior Lien (other than in connection with (x) the exercise of remedies by the Senior Representative in respect of such Senior Secured Obligations Collateral, (y) the Payment in Full of the Senior Secured Obligations, or (z) after the occurrence and during the continuance of any Event of Default under any Senior Document or Junior Document), such Junior Lien on such Collateral shall automatically, unconditionally and simultaneously be released if the applicable Senior Liens on such Collateral are released; and (2) notwithstanding the foregoing or anything else to the contrary in this Agreement, in the event of any Disposition that occurs in connection with the foreclosure of, or other exercise of remedies with respect to, Senior Secured Obligations Collateral subject to any Junior Lien, such Junior Lien on such Collateral shall automatically, unconditionally and simultaneously be released if the applicable Senior Liens on such Collateral are released (except with respect to any proceeds of such Disposition that remain after Payment in Full of the Senior Secured Obligations).

 

(b)                                 The Junior Representative agrees to execute and deliver (at the sole cost and expense of the Grantors) all such releases and other instruments as shall reasonably be requested by the Senior Representative to evidence and confirm any release of Junior Secured Obligations Collateral provided for in this Section.

 

SECTION 2.07.                                 Certain Agreements With Respect to Bankruptcy or Insolvency or Liquidation Proceedings.  This Agreement shall constitute a subordination agreement for the purposes of Section 510(a) of the Bankruptcy Code and shall continue in full force and effect notwithstanding the commencement of any proceeding under the Bankruptcy Code or any other federal, state or foreign bankruptcy, insolvency, receivership or similar law by or against any Grantor.  All references in this Agreement to any Grantor shall include such Grantor as a debtor-in-possession and any receiver or trustee for such Grantor in any Insolvency or Liquidation Proceeding.

 

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(a)                                  If any Grantor becomes subject to a case under the Bankruptcy Code and, as debtor(s)-in-possession, moves for approval of financing (“DIP Financing”) to be provided by one or more lenders (the “DIP Lenders”) under Section 364 of the Bankruptcy Code or the use of cash collateral under Section 363 of the Bankruptcy Code, each Junior Secured Obligations Secured Party agrees that it will raise no objection to any such financing or to the Liens on the Senior Secured Obligations Collateral securing the same (“DIP Financing Liens”) or to any use of cash collateral that constitutes Senior Secured Obligations Collateral, unless the Senior Secured Obligations Secured Parties, or a representative authorized by the Senior Secured Obligations Secured Parties, oppose or object to such DIP Financing or such DIP Financing Liens or use of cash collateral (and, to the extent that such DIP Financing Liens are senior to, or rank pari passu with, the Senior Liens, the Junior Representative will, on behalf of the Junior Secured Obligations Secured Parties, subordinate the Junior Liens on the Senior Secured Obligations Collateral to the Senior Liens and the DIP Financing Liens), so long as the Junior Secured Obligations Secured Parties retain Liens on all the Junior Secured Obligations Collateral to the extent permitted by applicable law, including proceeds thereof arising after the commencement of such proceeding, with the same priority as existed prior to the commencement of the case under the Bankruptcy Code.  For the avoidance of doubt, any DIP Financing Liens on any ABL Priority Collateral shall not apply automatically to any Note Priority Collateral, and any DIP Financing Liens on any Note Priority Collateral shall not apply automatically to any ABL Priority Collateral.

 

(b)                                 Except as otherwise set forth in Section 2.03(b)(D) hereof, each Junior Secured Obligations Secured Party agrees that it will not object to or oppose a Disposition of any Senior Secured Obligations Collateral (or any portion thereof) under Section 363 of the Bankruptcy Code or any other provision of the Bankruptcy Code if the Senior Secured Obligations Secured Parties shall have consented to such Disposition of such Senior Secured Obligations Collateral, so long as the Liens held by the Junior Representative on such Collateral attach to the proceeds thereof subject to the relative priorities set forth in this Agreement.

 

(c)                                  Each Junior Representative, on behalf of itself and the Secured Parties for whom it acts as agent, may seek adequate protection of its interest in its respective Senior Secured Obligations Collateral in the form of replacement or additional Liens on post-petition collateral of the same type as the Senior Secured Obligations Collateral so long as the Senior Secured Obligations Secured Parties have been granted such replacement or additional Liens on such Senior Secured Obligations Collateral, and agrees that it shall not contest or support any other Person contesting any request for such Liens.  Each Agent, on behalf of itself and the Secured Parties for whom it acts as agent, may seek adequate protection of its junior interest in the Senior Secured Obligations Collateral, subject to the provisions of this Agreement; provided, that if (A) the Senior Representative is granted adequate protection in the form of a replacement or additional Lien on post-petition collateral of the same type as the Senior Secured Obligations Collateral, and (B) such adequate protection requested by the Junior Representative is in the form of a replacement or additional Lien on such post-petition collateral of the same type as the Senior Secured Obligations Collateral, such Lien, if granted, will be subordinated to the adequate protection Liens granted in favor of the Senior Representative on such post-petition collateral, and, if applicable, the Liens securing any DIP Financing (and all obligations relating thereto) secured by such Senior Secured Obligations Collateral and provided by the Senior Representative or one or more Senior Secured Obligations Secured Parties on the same basis as the Liens of the Junior Representative on such Senior Secured Obligations Collateral are subordinated to the Liens of the Senior Representative on such Senior Secured Obligations Collateral under this Agreement.  In the event that a Junior Representative, on behalf of itself and the Secured Parties for whom it acts as agent, seeks or requests (or is otherwise granted) adequate protection of its junior interest in the Collateral in the form of a replacement or additional Lien on post-petition assets of the same type as such Collateral, then such Junior Representative, on behalf of itself and the Secured Parties for whom it acts as Agent, agrees that the Senior Representative for such type of Collateral shall also be granted a replacement or additional Lien on such post-petition assets as adequate

 

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protection of its senior interest in such type of Collateral and that the Junior Representative’s replacement or additional Lien shall be subordinated to the replacement or additional Lien of the Senior Representative.  If any Agent or Secured Party receives as adequate protection a Lien on post-petition assets of the same type as its pre-petition Senior Secured Obligations Collateral, then such post-petition assets shall also constitute Senior Secured Obligations Collateral of such Person to the extent of any allowed claim secured by such adequate protection Lien and shall be subject to the terms of this Agreement.  In addition, if the Senior Representative is granted adequate protection in the form of a super-priority claim, then each Junior Representative may also seek adequate protection in the form of a super-priority claim, which super-priority claim of the Junior Representative, if obtained, shall be subordinate to the super-priority claims of the Senior Representative on the same basis as the other claims of the Junior Secured Obligations Secured Parties are subordinate to the claims of the Senior Secured Obligations Secured Parties under this Agreement; provided that the Junior Representative and the Junior Secured Obligations Secured Parties agree that (a) they shall not accept such adequate protection unless the Senior Representative shall also be granted adequate protection in the form of a super-priority claim, which super-priority claim, if obtained by the Junior Secured Obligations Secured Parties, shall be subordinate to the super-priority claim of the Senior Secured Obligations Secured Parties; and (b) if any of the Junior Secured Obligations Secured Parties are granted adequate protection in the form of a super-priority claim, then the Junior Representative agrees that the Senior Representative shall also be granted adequate protection in the form of a super-priority claim, which super-priority claim shall be senior to the super-priority claim of the Junior Secured Obligations Secured Parties.

 

(d)                                 Each Agent, on behalf of itself and the Secured Parties for whom it acts as Agent, agrees that none of them shall (i) seek relief from the automatic stay or any other stay in any Insolvency or Liquidation Proceeding in respect of any Collateral which does not constitute its Senior Secured Obligations Collateral, without the prior written consent of the Senior Representative, or (ii) oppose any request by the Senior Representative or any Senior Secured Obligations Secured Party to seek relief from the automatic stay or any other stay in any Insolvency or Liquidation Proceeding in respect of their respective Senior Secured Obligations Collateral.

 

SECTION 2.08.                                 [Reserved].

 

SECTION 2.09.                                 Entry Upon Premises.

 

(a)                                  Rights to Enter Upon Premises.  If (i) the Senior Representative in respect of the ABL Priority Collateral takes any Enforcement Action with respect to the ABL Priority Collateral, (ii) the Senior Representative in respect of the Note Priority Collateral acquires an ownership or possessory interest in any of the Note Priority Collateral pursuant to the exercise of its rights under the applicable Security Documents or under applicable law or (iii) the Senior Representative in respect of the Note Priority Collateral shall, through the exercise of remedies under the applicable Security Documents or otherwise, sell any of the Note Priority Collateral to any third party (a “Third Party Purchaser”) as permitted by the terms of this Agreement, then, subject to the rights of any landlords under real estate leases and to the limitations and restrictions with respect to use of and entry upon the premises as set forth in the applicable Collateral Access Agreements, the Senior Secured Obligations Secured Parties in respect of the Note Priority Collateral shall or, in the case of clause (iii) shall require as a condition of such sale to the Third Party Purchaser that the Third Party Purchaser shall: (x) cooperate with the Senior Representative in respect of the ABL Priority Collateral (and its employees, agents, advisors and representatives) in its efforts to enforce its security interest in the ABL Priority Collateral and to finish any work-in-process and assemble the ABL Priority Collateral, (y) not hinder or restrict in any respect the Senior Representative in respect of the ABL Priority Collateral from enforcing its security interest in the ABL Priority Collateral or from finishing any work-in-process or assembling the ABL Priority Collateral, and (z) permit the Senior Representative in respect of the ABL Priority Collateral, its employees, agents, advisors and representatives,

 

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at the sole cost and expense of the Grantors (or, failing payment thereof by the Grantors, of the Senior Secured Obligations Secured Parties in respect of the ABL Priority Collateral) to enter upon and use the Note Priority Collateral (including (A) equipment, processors, computers and other machinery related to the storage or processing of records, documents or files and (B) intellectual property), in each case of preceding clauses (x), (y) and (z)  for a period not to exceed 180 days after the earlier to occur of (i) the date the Senior Representative in respect of the ABL Priority Collateral receives written notice from the Senior Representative in respect of the Note Priority Collateral that (I) it has acquired an ownership or possessory interest in any of the Note Priority Collateral pursuant to the exercise of its rights under the Senior Secured Obligations Security Documents in respect of the Note Priority Collateral or under applicable law or (II) it shall have, through the exercise of remedies under the Senior Secured Obligations Security Documents in respect of the Note Priority Collateral or otherwise, sold any of the Note Priority Collateral to a Third Party Purchaser as permitted by the terms of this Agreement, and (ii) the date the Senior Representative in respect of the ABL Priority Collateral first enforces its security interests in the ABL Priority Collateral located on the premises included in the Note Priority Collateral (such period, the “Disposition Period”) for the purposes of:

 

(1)                                  inspecting, removing or enforcing the Senior Representative in respect of the ABL Priority Collateral’s rights in the ABL Priority Collateral,

 

(2)                                  assembling and storing the ABL Priority Collateral and completing the processing of and turning into finished goods of any ABL Priority Collateral consisting of work-in-process or raw materials,

 

(3)                                  selling any or all of the ABL Priority Collateral located on such Note Priority Collateral, whether in bulk, in lots or to customers in the ordinary course of business or otherwise,

 

(4)                                  removing any or all of the ABL Priority Collateral located on such Note Priority Collateral,

 

(5)                                  to use any of the Collateral under the control or possession of the Senior Representative (or sold to a Third Party Purchaser) in respect of the Note Priority Collateral consisting of computers or other data processing equipment related to the storage or processing of records, documents or files pertaining to the ABL Priority Collateral and use any Collateral under such control or possession (or sold to a Third Party Purchaser) consisting of other equipment to handle or Dispose of any ABL Priority Collateral, or

 

(6)                                  taking reasonable actions to protect, secure, and otherwise enforce the rights of the Senior Representative in respect of the ABL Priority Collateral and the Senior Secured Obligations Secured Parties in respect of the ABL Priority Collateral in and to the ABL Priority Collateral;

 

; provided, however, that nothing contained in this Agreement will restrict the rights of the Senior Representative in respect of the Note Priority Collateral from selling, assigning or otherwise transferring any Note Priority Collateral prior to the expiration of the Disposition Period if the purchaser, assignee or transferee thereof agrees to be bound by the applicable provisions of this Agreement.  If any stay or other order prohibiting the exercise of remedies with respect to the ABL Priority Collateral has been entered by a court of competent jurisdiction or is in effect due to an Insolvency or Liquidation Proceeding, the Disposition Period shall be tolled during the pendency of any such stay or other order.  If the Senior Representative in respect of the ABL Priority Collateral conducts a public auction or private sale of the ABL Priority Collateral at any of the real property included within the Note Priority Collateral, such Senior

 

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Representative in respect of the ABL Priority Collateral shall provide the Senior Representative in respect of the Note Priority Collateral with reasonable notice and use reasonable efforts to hold such auction or sale in a manner which would not unduly disrupt such Senior Representative in respect of the Note Priority Collateral’s use of such real property.

 

(b)                                 License.  The Senior Representative in respect of the Note Priority Collateral, on behalf of the Senior Secured Obligations Secured Parties in respect of the Note Priority Collateral, irrevocably grants (or shall require as a condition of a sale to a Third Party Purchaser that the Third Party Purchaser grant) the Senior Representative in respect of the ABL Priority Collateral a non-exclusive worldwide license to or right to use, to the extent permitted by law and any applicable contractual obligations binding on the Note Priority Collateral, and solely to the extent the Senior Representative in respect of the Note Priority Collateral (or the Third Party Purchaser, as applicable) has an ownership interest therein or other assignable right of use thereto, exercisable without payment of royalty or other compensation, any of the intellectual property now or hereafter owned by, licensed to, or otherwise used by any of the Grantors or their subsidiaries in order for the Senior Representative in respect of the ABL Priority Collateral and the Senior Secured Obligations Secured Parties in respect of the ABL Priority Collateral to purchase, use, market, repossess, possess, store, assemble, manufacture, process, sell, transfer, distribute or otherwise Dispose of any inventory included in the ABL Priority Collateral in connection with the liquidation, disposition, foreclosure or realization upon the inventory included in the ABL Priority Collateral in accordance with the terms of the Senior Secured Obligations Security Documents in respect of the ABL Priority Collateral. The Senior Representative in respect of the Note Priority Collateral (or the Third Party Purchaser, as applicable) will agree that any of the intellectual property constituting Note Priority Collateral that is sold, transferred or otherwise Disposed of (whether pursuant to enforcement action or otherwise) will be subject to rights of the Senior Representative in respect of the ABL Priority Collateral as described above.

 

(c)                                  Expenses and Repair.  During the period of actual occupation, use or control by the Senior Secured Obligations Secured Parties in respect of the ABL Priority Collateral or their agents or representatives of any Note Priority Collateral, such Senior Secured Obligations Secured Parties in respect of the ABL Priority Collateral will (i) be responsible for the ordinary course third-party expenses related thereto, including costs with respect to heat, light, electricity, water and real property taxes with respect to that portion of any premises so used or occupied, in each case to the extent not paid for by the Grantors or any of their subsidiaries, and (ii) be obligated to repair at their expense any physical damage to such Note Priority Collateral or other assets or property resulting from such occupancy, use or control, and to leave such Note Priority Collateral or other assets or property in substantially the same condition as it was at the commencement of such occupancy, use or control, ordinary wear and tear excepted, in each case to the extent not paid for by the Grantors or any of their subsidiaries.

 

(d)                                 Indemnification.  The Senior Secured Obligations Secured Parties in respect of the ABL Priority Collateral shall agree to pay, indemnify and hold the Senior Representative in respect of the Note Priority Collateral and the Senior Secured Obligations Secured Parties in respect of the Note Priority Collateral harmless from and against any third-party liability resulting from the gross negligence or willful misconduct of the Senior Secured Obligations Secured Parties in respect of the ABL Priority Collateral or any of their agents, representatives or invitees (as determined by a court of competent jurisdiction in a final and non-appealable decision) in its or their operation of such facilities, in each case to the extent not paid for by the Grantors or any of their subsidiaries.  Notwithstanding the foregoing, in no event shall the Senior Secured Obligations Secured Parties in respect of the ABL Priority Collateral have any liability to the Senior Representative in respect of the Note Priority Collateral or the Senior Secured Obligations Secured Parties in respect of the Note Priority Collateral pursuant to this Agreement as a result of any condition (including any environmental condition, claim or liability) on or with respect to the Note Priority Collateral existing prior to the date of the exercise by the Senior Representative in respect of

 

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the ABL Priority Collateral or the Senior Secured Obligations Secured Parties in respect of the ABL Priority Collateral of their rights under this Agreement and the Senior Secured Obligations Secured Parties in respect of the ABL Priority Collateral will not have any duty or liability to maintain the Note Priority Collateral in a condition or manner better than that in which it was maintained prior to the use thereof by them, or for any damage to or diminution in the value of the Note Priority Collateral that results solely from removal of any ABL Priority Collateral from the premises or the ordinary wear and tear resulting from the use of the Note Priority Collateral by such persons in the manner and for the time periods specified under this Agreement.

 

SECTION 2.10.                                 Insurance.  Unless and until written notice by the Senior Representative in respect of the ABL Priority Collateral to each Junior Representative in respect of the ABL Priority Collateral and the Senior Representative in respect of the Note Priority Collateral that the Senior Secured Obligations in respect of the ABL Priority Collateral have been Paid In Full, as between the Senior Representative in respect of the ABL Priority Collateral, on the one hand, and each Junior Representative in respect of the ABL Priority Collateral and the Senior Representative in respect of the Note Priority Collateral, on the other hand, only the Senior Representative in respect of the ABL Priority Collateral will have the right (subject to the rights of the Grantors under the Security Documents) to adjust or settle any insurance policy or claim covering or constituting ABL Priority Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding affecting the ABL Priority Collateral.  Unless and until written notice by the Senior Representative in respect of the Note Priority Collateral to each Junior Representative in respect of the Note Priority Collateral and the Senior Representative in respect of the ABL Priority Collateral that the Senior Secured Obligations in respect of the Note Priority Collateral have been Paid In Full, as between each Junior Representative in respect of the Note Priority Collateral and the Senior Representative in respect of the ABL Priority Collateral, on the one hand, and the Senior Representative in respect of the Note Priority Collateral, on the other hand, only the Senior Representative in respect of the Note Priority Collateral will have the right (subject to the rights of the Grantors under the Security Documents) to adjust or settle any insurance policy covering or constituting Note Priority Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding solely affecting the Note Priority Collateral.  To the extent that an insured loss covers or constitutes both ABL Priority Collateral and Note Priority Collateral, then the Senior Representative in respect of the ABL Priority Collateral and the Senior Representative in respect of the Note Priority Collateral will work jointly and in good faith to collect, adjust or settle (subject to the rights of the Grantors under the Security Documents) under the relevant insurance policy.

 

SECTION 2.11.                                 Refinancings.  The Obligations may be refinanced or replaced, in whole or in part, in each case, without notice to, or the consent (except to the extent a consent is otherwise required to permit the refinancing transaction under any ABL Document, Notes Priority Document, Second Lien Document or Subordinated Lien Document) of any Secured Party, all without affecting the Lien priorities provided for herein; provided, however, that (i) the holders of any such refinancing or replacement indebtedness (or an authorized agent or trustee on their behalf) bind themselves in writing to the terms of this Agreement pursuant to such documents or agreements (including amendments or supplements to this Agreement) as the Senior Representative in respect of the ABL Priority Collateral or the Senior Representative in respect of the Note Priority Collateral, as the case may be, shall reasonably request and in form and substance reasonably acceptable to the Senior Representative in respect of the ABL Priority Collateral or the Senior Representative in respect of the Note Priority Collateral, as the case may be and (ii) such Obligations constitute ABL Debt, Notes Priority Debt, Second Lien Debt or Subordinated Lien Debt in accordance with the applicable definition thereof.  In connection with any refinancing or replacement contemplated by this Section 2.11, this Agreement may be amended at the written request and sole expense of the Issuer (subject to the immediately preceding sentence), and without the consent of any Representative, (a) to add parties (or any authorized agent or trustee therefor)

 

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providing any such refinancing or replacement indebtedness, (b) to establish that Liens on any Note Priority Collateral securing such refinancing or replacement indebtedness shall have the same priority as the Liens on any Note Priority Collateral securing the indebtedness being refinanced or replaced, and (c) to establish that the Liens on any ABL Priority Collateral securing such refinancing or replacement indebtedness shall have the same priority as the Liens on any ABL Priority Collateral securing the indebtedness being refinanced or replaced, all on the terms provided for herein immediately prior to such refinancing or replacement.

 

SECTION 2.12.                                 Rights of Grantors.  Subject to the terms of the Security Documents, the Grantors will have the right to remain in possession and retain exclusive control of the Collateral securing the Obligations (other than any cash, securities, obligations and cash equivalents constituting part of the Collateral and deposited with any Agent in accordance with the provisions of the Security Documents and other than as set forth in the Security Documents), to freely operate the Collateral and to collect, invest and Dispose of any income therefrom.

 

SECTION 2.13.                                 Amendments to Documents.  In the event that the Senior Secured Obligations Secured Parties or the Senior Representative enters into any amendment, waiver or consent in respect of any of the Senior Secured Obligations Security Documents for the purpose of making additions to the Senior Secured Obligations Collateral, then such amendment, waiver or consent shall apply automatically to any comparable provision of the comparable Junior Secured Obligations Security Document as it relates to the Junior Secured Obligations Collateral without the consent of the Junior Representative or any Junior Secured Obligations Secured Party and without any action by the Junior Representative, the Issuer or any other Grantor; provided, however, that written notice of such amendment, waiver or consent shall have been given to the Junior Representative.

 

SECTION 2.14.                                 Set-Off and Tracing of and Priorities in Proceeds.  Each Agent, on behalf of the applicable Secured Parties, acknowledges and agrees that, to the extent such Agent or any Secured Party for which it is acting as Agent exercises its rights of set-off against any Collateral pursuant to an Enforcement Action, the amount of such set-off shall be held and distributed pursuant to Section 2.05.  Each Agent, for itself and on behalf of the applicable Secured Parties, further agrees that, notwithstanding anything herein to the contrary, prior to the issuance of an Enforcement Notice or the commencement of any Insolvency or Liquidation Proceeding, any proceeds of Collateral, whether or not deposited under account control agreements, which are used by any Grantor to acquire other property which is Collateral shall not (solely as between the Agents and the Secured Parties) be treated as proceeds of Collateral for purposes of determining the relative priorities in the Collateral which was so acquired.  In furtherance of the foregoing, any proceeds of Note Priority Collateral received after the earlier of the issuance of an Enforcement Notice by any Senior Representative with respect to the Note Priority Collateral or the commencement of any Insolvency or Liquidation Proceeding, whether or not deposited in any deposit accounts or securities accounts that constitute ABL Priority Collateral shall be treated as Note Priority Collateral.  In addition, unless and until the Payment in Full of ABL Obligations occurs, each Junior Representative in respect of the ABL Priority Collateral hereby consents to the application, prior to the earlier of receipt by the Senior Representative in respect of the ABL Priority Collateral of an Enforcement Notice issued by any Junior Agent in respect of the ABL Priority Collateral or the commencement of any Insolvency or Liquidation Proceeding, of cash or other proceeds of Collateral, deposited under account control agreements to the repayment of ABL Obligations pursuant to the ABL Documents.

 

SECTION 2.15.                                 Legends.  Upon the effectiveness of this Agreement, each Security Document shall (and, to the extent already in existence, shall be amended to) include a legend describing this Agreement and any other applicable intercreditor and/or subordination agreement.

 

25

 

ARTICLE III
  Gratuitous Bailment for Perfection of Certain Security Interests; Rights
 Under Permits and Licenses

 

SECTION 3.01.                                 General.  The Senior Representative agrees that if it shall at any time hold a Senior Lien on any Junior Secured Obligations Collateral that can be perfected by the possession or control of such Collateral or of any account in which such Collateral is held, and if such Collateral or any such account is in fact in the possession or under the control of the Senior Representative, the Senior Representative will serve as gratuitous bailee for the Junior Representative for the sole purpose of perfecting the Junior Lien of the Junior Representative on such Collateral.  It is agreed that the obligations of the Senior Representative and the rights of the Junior Representative and the other Junior Secured Obligations Secured Parties in connection with any such bailment arrangement will be in all respects subject to the provisions of Article II.  Notwithstanding anything to the contrary herein, the Senior Representative will be deemed to make no representation as to the adequacy of the steps taken by it to perfect the Junior Lien on any such Collateral and shall have no responsibility, duty, obligation or liability to the Junior Representative or other Junior Secured Obligations Secured Party or any other person for such perfection or failure to perfect, it being understood that the sole purpose of this Article III is to enable the Junior Secured Obligations Secured Parties to obtain a perfected Junior Lien on such Collateral to the extent, if any, that such perfection results from the possession or control of such Collateral or any such account by the Senior Representative.  Subject to Section 2.05(e), at such time as the Senior Secured Obligations secured by the Senior Lien of the Senior Representative shall have been Paid in Full, the Senior Representative shall take all such actions in its power as shall reasonably be requested by the Junior Representative with the highest priority claim with respect to the applicable Collateral (at the sole cost and expense of the Grantors) to transfer possession or control of such Collateral or any such account (in each case to the extent the Junior Representative has a Lien on such Collateral or account after giving effect to any prior or concurrent releases of Liens) to the Junior Representative.

 

SECTION 3.02.                                 Deposit Accounts.  The Grantors, to the extent required by the ABL Documents, the Notes Priority Documents, the Second Lien Documents or the Subordinated Lien Documents, may from time to time have deposit accounts (the “Deposit Accounts”) with certain depositary banks in which collections from Inventory and Accounts (each, as defined in the UCC) may be deposited.  To the extent that any such Deposit Account is under the control of any Agent at any time, such Agent will act as gratuitous bailee and agent for the other Agents and Secured Parties for the purpose of perfecting the Liens of the applicable Secured Parties in such Deposit Accounts and the cash and other assets therein as provided in Section 3.01 (but will have no duty, responsibility or obligation to such other Agents or Secured Parties (including any duty, responsibility or obligation as to the maintenance of such control, the effect of such arrangement or the establishment of such perfection) except as set forth in the last sentence of this Section 3.02).  Unless the Junior Liens on such ABL Priority Collateral shall have been or concurrently are released, after the Obligations for which the Senior Representative in respect of the ABL Priority Collateral serves as agent have been Paid in Full, such Senior Representative in respect of the ABL Priority Collateral shall (a) to the extent that the same are then under the sole dominion and control of such Representative and that such action is otherwise within the power and authority of such Representative pursuant to the applicable Documents, at the written request of any Junior Representative in respect of the ABL Priority Collateral, transfer control over all cash and other assets in any such Deposit Account maintained with such Senior Representative in respect of the ABL Priority Collateral to the Junior Representative in respect of the ABL Priority Collateral with the then-highest priority claim to the ABL Priority Collateral (and each Grantor hereby authorizes and consents to any such transfer) and (b) at the written request of such Junior Representative in respect of the ABL Priority Collateral with the then-highest priority claim, cooperate with the Issuer and such Junior Representative in respect of the ABL Priority Collateral with the then-highest priority claim (at the expense of the Issuer) in permitting control of any other Deposit Accounts to be transferred to such Junior Representative in respect of the

 

26

 

ABL Priority Collateral with the then-highest priority claim (or for other arrangements with respect to each such Deposit Accounts satisfactory to such Junior Representative in respect of the ABL Priority Collateral with the then-highest priority claim to be made).  In furtherance of the foregoing, each Agent (the “Appointing Agent”) hereby appoints each other Agent as its agent solely for perfection of such Appointing Agent’s Lien on each Deposit Account that is under the control of such other Agent, and each such other Agent accepts such appointment.

 

SECTION 3.03.                                 Rights under Permits and Licenses.  In addition to the license granted under Section 2.09(b), the Senior Representative in respect of the Note Priority Collateral agrees that if the Senior Representative in respect of the ABL Priority Collateral shall require rights available under any permit or license controlled by the Senior Representative in respect of the Note Priority Collateral (as certified to the Senior Representative in respect of the Note Priority Collateral by the Senior Representative in respect of the ABL Priority Collateral, upon which the Senior Representative in respect of the Note Priority Collateral may rely) in order to realize on any ABL Priority Collateral, the Senior Representative in respect of the Note Priority Collateral shall (subject to the terms of ABL Documents, the Notes Priority Documents, the Second Lien Documents and the Subordinated Lien Documents, including the Senior Representative in respect of the Note Priority Collateral’s rights to indemnification thereunder) take all such actions as shall be available to it (at the sole expense of the Grantors), consistent with applicable law and contractual obligations and reasonably requested by the Senior Representative in respect of the ABL Priority Collateral in writing, to make such rights available to the Senior Representative in respect of the ABL Priority Collateral, subject to the Senior Liens in respect of the Note Priority Collateral.  The Senior Representative in respect of the ABL Priority Collateral agrees that if the Senior Representative in respect of the Note Priority Collateral shall require rights available under any permit or license controlled by the Senior Representative in respect of the ABL Priority Collateral (as certified to the Senior Representative in respect of the ABL Priority Collateral by the Senior Representative in respect of the Note Priority Collateral, upon which the Senior Representative in respect of the ABL Priority Collateral may rely) in order to realize on any Note Priority Collateral, the Senior Representative in respect of the ABL Priority Collateral shall (subject to the terms of ABL Documents, the Notes Priority Documents, the Second Lien Documents and the Subordinated Lien Documents, including the Senior Representative in respect of the ABL Priority Collateral’s rights to indemnification thereunder) take all such actions as shall be available to it (at the sole expense of the Grantors), consistent with applicable law and contractual obligations and reasonably requested by the Senior Representative in respect of the Note Priority Collateral in writing, to make such rights available to the Senior Representative in respect of the Note Priority Collateral, subject to the Senior Liens in respect of the ABL Priority Collateral.

 

ARTICLE IV

 

Existence and Amount of Liens and Obligations

 

Whenever a Representative shall be required, in connection with the exercise of its rights or the performance of its obligations hereunder, to determine the existence or amount of any Senior Secured Obligations (or the existence of any commitment to extend credit that would constitute Senior Secured Obligations) or Junior Secured Obligations, or the existence of any Lien securing any such obligations, or the Collateral subject to any such Lien, it may request that such information be furnished to it in writing by the other Representative and shall be entitled to make such determination on the basis of the information so furnished; provided, however, that if a Representative shall fail or refuse to reasonably promptly provide the requested information, the requesting Representative shall be entitled to make any such determination by such method as it may, in the exercise of its good faith judgment, determine, including by conclusive reliance upon an officer’s certificate of the Issuer.  Each Representative may rely conclusively, and shall be fully protected in so relying, on any determination made by it in accordance

 

27

 

with the provisions of the preceding sentence (or as otherwise directed by a court of competent jurisdiction) and shall have no liability to any Grantor, any Secured Party or any other Person as a result of such determination.

 

ARTICLE V

 

Consent of Grantors

 

Each Grantor hereby consents to the provisions of this Agreement and the intercreditor arrangements provided for herein and agrees that the obligations of the Grantors under the Security Documents will in no way be diminished or otherwise affected by such provisions or arrangements (except as expressly provided herein).

 

ARTICLE VI

 

Representations and Warranties

 

SECTION 6.01.                                 Representations and Warranties of Each Party.  Each party hereto represents and warrants to the other parties hereto as follows:

 

(a)                                  Such party is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite power and authority to enter into and perform its obligations under this Agreement.

 

(b)                                 This Agreement has been duly executed and delivered by such party and constitutes a legal, valid and binding obligation of such party, enforceable in accordance with its terms.

 

(c)                                  The execution, delivery and performance by such party of this Agreement (i) do not require any consent or approval of, registration or filing with or any other action by any governmental authority of which the failure to obtain could reasonably be expected to have a material adverse effect on the ability of such party to perform its obligations under this Agreement, (ii) will not violate any applicable law or regulation or any order of any governmental authority or any indenture, agreement or other instrument binding upon such party which could reasonably be expected to have a material adverse effect on the ability of such party to perform its obligations under this Agreement and (iii) will not violate the charter, by-laws or other organizational documents of such party.

 

SECTION 6.02.                                 Representations and Warranties of Each Representative.  Each Representative represents and warrants to the other parties hereto that it is authorized under the ABL Documents, the Notes Priority Documents, the Second Lien Documents or the Subordinated Lien Documents, as applicable, to enter into this Agreement.

 

ARTICLE VII

 

Miscellaneous

 

SECTION 7.01.                                 Notices.  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 telecopy, as follows:

 

28

 

(a)                                  if to the ABL Collateral Agent, to it at Regions Bank, 191 Peachtree Street, N.E., Suite 3800, Atlanta, Georgia 30303, Attention: Euramax Loan Administration Officer;

 

(b)                                 if to the Notes Priority Collateral Trustee, to it at Wells Fargo Bank, National Association, 7000 Central Parkway NE Suite 550, Atlanta, Georgia 30328, Attn:  Corporate Trust Services — Administrator Euramax International, Inc., Fax: 770-551-5118;

 

(c)                                  if to the Subordinated Lien Collateral Trustee, as set forth in the applicable joinder; and

 

(d)                                 if to any Grantor, to it at Euramax International, Inc., 5445 Triangle Parkway, Suite 350 Norcross, GA 30092, Attention:  R. Scott Vansant, Fax:  770-263-8031.

 

Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto (and for this purpose a notice to the Issuer shall be deemed to be a notice to each Grantor).  All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt (if a Business Day) and on the next Business Day thereafter (in all other cases) if delivered by hand or overnight courier service or sent by telecopy or on the date five Business Days after dispatch by certified or registered mail if mailed, in each case delivered, sent or mailed (properly addressed) to such party as provided in this Section 4.01 or in accordance with the latest unrevoked direction from such party given in accordance with this Section 4.01.  As agreed to in writing among the Grantors, the ABL Collateral Agent, the Notes Priority Collateral Trustee and the Subordinated Lien Collateral Trustee from time to time, notices and other communications may also be delivered by e-mail to the e-mail address of a representative of the applicable person provided from time to time by such person.

 

SECTION 7.02.                                 Waivers; Amendment.  (a) No failure or delay on the part of any party hereto in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power; preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the parties hereto are cumulative and are not exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of this Agreement or consent to any departure by any party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  No notice or demand on any party hereto in any case shall entitle such party to any other or further notice or demand in similar or other circumstances.

 

(b)                                 Neither this Agreement nor any provision hereof may be terminated, waived, amended or modified except pursuant to an agreement or agreements in writing entered into by each Representative and, to the extent adverse to any Grantor, the Grantors; provided, however, that this Agreement may be amended from time to time (x) as provided in Section 2.11 and (y) at the sole request and expense of the Issuer, and without the consent of any Representative, (i) to add other parties (or any authorized agent thereof or trustee therefor) holding other ABL Debt, Notes Priority Debt, Second Lien Debt or Subordinated Lien Debt that are incurred after the date of this Agreement in compliance with the ABL Documents, the Notes Priority Documents, the Second Lien Documents, the Subordinated Lien Documents and this Agreement and (ii) to establish the Lien priorities on the Collateral securing such other Obligations.  Any such additional party and each party hereto shall be entitled to rely upon a certificate delivered by an officer of the Issuer certifying that such other Obligations were issued or borrowed in compliance with the ABL Documents, the Notes Priority Documents, the Second Lien Documents and the Subordinated Lien Documents.  Any amendment of this Agreement that is proposed to be effected without the consent of a Representative as permitted by the proviso in this Section 4.02(b) shall be

 

29

 

submitted to such Representative for its review at least 5 Business Days prior to the proposed effectiveness of such amendment.

 

SECTION 7.03.                                 Parties in Interest.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns as well as the applicable Secured Parties, all of whom are intended to be bound by, and to be third party beneficiaries of, this Agreement.

 

SECTION 7.04.                                 Survival of Agreement.  All covenants, agreements, representations and warranties made by any party in this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement.

 

SECTION 7.05.                                 Counterparts.  This Agreement may be executed in counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract.  Delivery of an executed signature page to this Agreement by facsimile transmission (or other electronic means) shall be as effective as delivery of a manually signed counterpart of this Agreement.

 

SECTION 7.06.                                 Severability.  Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.  The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

SECTION 7.07.                                 Governing Law; Jurisdiction; Consent to Service of Process.  (a) This Agreement shall be construed in accordance with and governed by the law of the State of New York.

 

(a)                                  Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive 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 to this Agreement, 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 shall be heard and determined in such New York State or, to the extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

 

(b)                                 Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, 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 in any court referred to in paragraph (b) of this Section.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

(c)                                  Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 4.01.  Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

 

30

 

SECTION 7.08.                                 WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT.  EACH PARTY HERETO (A) 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 (B) 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.

 

SECTION 7.09.                                 Headings.  Article, Section and Annex headings used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.

 

SECTION 7.10.                                 Conflicts.  In the event of any conflict or inconsistency between the terms of this Agreement, the Collateral Trust and Intercreditor Agreement, the ABL Documents, the Notes Priority Documents, the Second Lien Documents and the Subordinated Lien Documents, on the one hand, and this Agreement, on the other hand, the terms of this Agreement shall control.

 

SECTION 7.11.                                 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 Secured Parties.  None of the Issuer, any other Grantor or any other creditor thereof shall have any rights or obligations hereunder, except as expressly provided in this Agreement (provided that nothing in this Agreement (other than Sections 2.05, 2.06, 2.10, 2.11, 2.12, 2.13 or Article VII to the extent expressly provided therein) is intended to or will amend, waive or otherwise modify the provisions of any ABL Document, Notes Priority Document, Second Lien Document or Subordinated Lien Document), and neither the Issuer nor any other Grantor may rely on the terms hereof (other than Sections  2.05, 2.06, 2.10, 2.11, 2.12, 2.13, Article VI and Article VII).  Nothing in this Agreement is intended to or shall impair the obligations of the Issuer or any other Grantor, which are absolute and unconditional, to pay the Obligations under the ABL Documents, Notes Priority Documents, Second Lien Documents and Subordinated Lien Documents as and when the same shall become due and payable in accordance with their terms.  Notwithstanding anything to the contrary herein, in any ABL Document, Notes Priority Document, Second Lien Document or Subordinated Lien Document, the Grantors shall not be required to act or refrain from acting (a) pursuant to this Agreement or any applicable document with respect to any ABL Priority Collateral in any manner that would cause a default under any applicable document, or (b) pursuant to this Agreement or any applicable document with respect to any Note Priority Collateral in any manner that would cause a default under any applicable document.

 

SECTION 7.12.                                 Certain Terms Concerning Notes Priority Collateral Trustee.  The Notes Priority Collateral Trustee is executing and delivering this Agreement solely in its capacity as such and pursuant to direction set forth in the applicable Notes Priority Documents; and in so doing, the Notes Priority Collateral Trustee shall not be responsible for the terms or sufficiency of this Agreement for any purpose.  The Notes Priority Collateral Trustee shall not have any duties or obligations under or pursuant to this Agreement other than such duties as may be expressly set forth in this Agreement as duties on its part to be performed or observed.  In entering into this Agreement, or in taking (or forbearing from) any action under or pursuant to this Agreement, the Notes Priority Collateral Trustee shall have and be protected by all of the rights, immunities, indemnities and other protections granted to it under the Notes Priority Documents.

 

31

 

SECTION 7.13.                                 Certain Terms Concerning Subordinated Lien Collateral Trustee.  The Subordinated Lien Collateral Trustee is executing and delivering this Agreement solely in its capacity as such and pursuant to direction set forth in the applicable Second Lien Documents and the Subordinated Lien Documents; and in so doing, the Subordinated Lien Collateral Trustee shall not be responsible for the terms or sufficiency of this Agreement for any purpose.  The Subordinated Lien Collateral Trustee shall not have any duties or obligations under or pursuant to this Agreement other than such duties as may be expressly set forth in this Agreement as duties on its part to be performed or observed.  In entering into this Agreement, or in taking (or forbearing from) any action under or pursuant to this Agreement, the Subordinated Lien Collateral Trustee shall have and be protected by all of the rights, immunities, indemnities and other protections granted to it under the Second Lien Documents and the Subordinated Lien Documents.

 

SECTION 7.14.                                 Certain Terms Concerning ABL Collateral Agent.  The ABL Collateral Agent is executing and delivering this Agreement solely in its capacity as such and pursuant to direction set forth in the applicable ABL Documents; and in so doing, the ABL Collateral Agent shall not be responsible for the terms or sufficiency of this Agreement for any purpose.  The ABL Collateral Agent shall not have any duties or obligations under or pursuant to this Agreement other than such duties as may be expressly set forth in this Agreement as duties on its part to be performed or observed.  In entering into this Agreement, or in taking (or forbearing from) any action under or pursuant to this Agreement, the ABL Collateral Agent shall have and be protected by all of the rights, immunities, indemnities and other protections granted to it under the ABL Documents.

 

SECTION 7.15.                                 Additional Subsidiaries.  Any subsidiary of any Grantor that is required to become a party hereto pursuant to any ABL Document, Notes Priority Document, Second Lien Document and/or Subordinated Lien Document shall enter into this Agreement as a Grantor upon becoming such a subsidiary.  Upon execution and delivery by each Agent and such subsidiary of a joinder agreement substantially in the form of Exhibit A, such subsidiary shall become a Grantor hereunder with the same force and effect as if originally named as a Grantor herein.  The execution and delivery of any such instruments shall not require the consent of any other Grantor or any other Secured Party.  The rights and obligations of each Grantor hereunder shall remain in full force and effect notwithstanding the addition of any new Grantor as a party to this Agreement.

 

[Signatures continue on following page.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

 

 

	
 
    	
REGIONS   BANK, as ABL Collateral Agent,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Linda Harris
    
	
 
    	
 
    	
Name:
    	
Linda   Harris
    
	
 
    	
 
    	
Title:
    	
Senior   Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION, as Notes Priority   Collateral Trustee,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Stefan Victory
    
	
 
    	
 
    	
Name:
    	
Stefan   Victory
    
	
 
    	
 
    	
Title:
    	
Vice   President
    

 

 

	
 
    	
EURAMAX   INTERNATIONAL, INC.
    
	
 
    	
EURAMAX   HOLDINGS, INC.
    
	
 
    	
AMERIMAX   BUILDING PRODUCTS, INC.
    
	
 
    	
AMERIMAX   FABRICATED PRODUCTS, INC.
    
	
 
    	
AMERIMAX   HOME PRODUCTS, INC.
    
	
 
    	
AMERIMAX   RICHMOND COMPANY
    
	
 
    	
AMERIMAX   UK, INC.
    
	
 
    	
BERGER   BUILDING PRODUCTS, INC.
    
	
 
    	
BERGER   HOLDINGS, LTD.
    
	
 
    	
FABRAL HOLDINGS, INC.
    
	
 
    	
FABRAL, INC.
    
	
 
    	
AMP COMMERCIAL, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ R. Scott Vansant
    
	
 
    	
 
    	
Name:
    	
R. Scott Vansant
    
	
 
    	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
AMERIMAX   FINANCE COMPANY, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mitchell B. Lewis
    
	
 
    	
 
    	
Name:
    	
Mitchell B. Lewis
    
	
 
    	
 
    	
Title:
    	
Chief Executive OfficerExhibit 10.8

 

EXECUTION VERSION

 

STOCKHOLDERS AGREEMENT

 

dated as of

 

June 29, 2009

 

among

 

EURAMAX HOLDINGS, INC.
 and
 THE HOLDERS OF COMMON STOCK
 LISTED ON SCHEDULE I

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE 1
    
	
DEFINITIONS
    
	
 
    	
 
    	
 
    
	
Section 1.01
    	
Definitions
    	
1
    
	
 
    	
 
    	
 
    
	
Section 1.02
    	
Other   Definitional and Interpretative Provisions
    	
6
    
	
 
    	
 
    	
 
    
	
ARTICLE 2
    
	
RESTRICTIONS ON TRANSFER
    
	
 
    	
 
    	
 
    
	
Section 2.01
    	
General   Restrictions On Transfer
    	
6
    
	
 
    	
 
    	
 
    
	
Section 2.02
    	
Future   Stockholders
    	
6
    
	
 
    	
 
    	
 
    
	
Section 2.03
    	
Permitted   Transfers
    	
7
    
	
 
    	
 
    	
 
    
	
Section 2.04
    	
No   Transfers to a Competitor
    	
7
    
	
 
    	
 
    	
 
    
	
Section 2.05
    	
Legends
    	
8
    
	
 
    	
 
    	
 
    
	
ARTICLE 3
    
	
TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS
    
	
 
    	
 
    	
 
    
	
Section 3.01
    	
Tag-Along   Rights
    	
9
    
	
 
    	
 
    	
 
    
	
Section 3.02
    	
Drag-along   Rights
    	
11
    
	
 
    	
 
    	
 
    
	
Section 3.03
    	
Additional   Conditions to Tag-Along Sales and Drag-Along Sales
    	
13
    
	
 
    	
 
    	
 
    
	
ARTICLE 4
    
	
CERTAIN COVENANTS AND AGREEMENTS; PREEMPTIVE RIGHTS
    
	
 
    	
 
    	
 
    
	
Section 4.01
    	
Confidentiality
    	
14
    
	
 
    	
 
    	
 
    
	
Section 4.02
    	
Reports
    	
15
    
	
 
    	
 
    	
 
    
	
Section 4.03
    	
Provision   of Information to Prospective Transferee of Common Shares
    	
16
    
	
 
    	
 
    	
 
    
	
Section 4.04
    	
Charter   or Bylaw Provisions
    	
16
    
	
 
    	
 
    	
 
    
	
Section 4.05
    	
Conflicting   Agreements
    	
16
    
	
 
    	
 
    	
 
    
	
Section 4.06
    	
Preemptive   Rights
    	
16
    
	
 
    	
 
    	
 
    
	
ARTICLE 5
    
	
BOARD MEMBERSHIP; VOTING
    
	
 
    	
 
    	
 
    
	
Section 5.01
    	
Board   Membership; Voting
    	
18
    
	
 
    	
 
    	
 
    
	
ARTICLE 6
    
	
MISCELLANEOUS
    
	
 
    	
 
    	
 
    
	
Section 6.01
    	
Termination
    	
21
    
	
 
    	
 
    	
 
    
	
Section 6.02
    	
Binding   Effect; Assignability; Benefit
    	
21
    
	
 
    	
 
    	
 
    
	
Section 6.03
    	
Notices
    	
21
    

 

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
Section 6.04
    	
Waiver;   Amendment
    	
22
    
	
 
    	
 
    	
 
    
	
Section 6.05
    	
Fees   and Expenses
    	
22
    
	
 
    	
 
    	
 
    
	
Section 6.06
    	
Governing   Law
    	
23
    
	
 
    	
 
    	
 
    
	
Section 6.07
    	
Jurisdiction
    	
23
    
	
 
    	
 
    	
 
    
	
Section 6.08
    	
WAIVER   OF JURY TRIAL
    	
23
    
	
 
    	
 
    	
 
    
	
Section 6.09
    	
Specific   Enforcement
    	
23
    
	
 
    	
 
    	
 
    
	
Section 6.10
    	
Effectiveness
    	
23
    
	
 
    	
 
    	
 
    
	
Section 6.11
    	
Entire   Agreement
    	
23
    
	
 
    	
 
    	
 
    
	
Section 6.12
    	
Severability
    	
23
    

 

ii

 

STOCKHOLDERS AGREEMENT

 

AGREEMENT dated as of June 29, 2009 (the “Effective Date”) among Euramax Holdings, Inc., a Delaware corporation (the “Company”), and the holders of Common Stock listed on Schedule I hereto and any other Person that duly acquires any Common Stock from any such holders or the Company, pursuant to the Management Compensation Plan, directly or indirectly, and executes and delivers to the Company a joinder agreement in the form attached hereto as Exhibit D at any time after the date hereof (collectively, the “Stockholders”).

 

W I T N E S S E T H :

 

WHEREAS,  concurrently with the execution hereof, the Stockholders have, pursuant to that certain Purchase Agreement, dated as of the date hereof, among the Stockholders and Euramax International, Inc., a Delaware corporation (the “Borrower”), exchanged all of their Obligations under and as defined in that certain Second Lien Credit and Guaranty Agreement, dated as of June 29, 2005, (as heretofore in effect, the “Second Lien Credit Agreement”), for 100% of the stock of the Company (exclusive of Common Stock reserved to management of the Company pursuant to the Management Compensation Plan).

 

WHEREAS, each Stockholder is on the date hereof the holder of the number of shares of Common Stock as is set forth on Schedule I attached hereto.

 

WHEREAS, the Stockholders desire to set forth their agreement as to certain matters relating to the Company and their respective holdings of the Common Stock of the Company.

 

NOW, THEREFORE, in consideration of the covenants and agreements contained herein, the parties hereto agree as follows:

 

ARTICLE 1

 

DEFINITIONS

 

Section 1.01                                Definitions.  The following terms, as used herein, have the following meanings:

 

“Acting in Concert” means acting pursuant to an agreement, arrangement or understanding, in each case whether formal or informal, for the purpose of acquiring, holding, voting or disposing of Common Stock.

 

“Affiliate” (i) shall have the meaning ascribed to the term “Affiliated person” in Section 2(a)(3) of the Investment Company Act of 1940, as amended, and shall include any fund or account sharing a common Investment Adviser or (ii) with respect to an individual, any Family Member of such individual; provided, however, that, for purposes hereof, neither the Company nor any Person controlled by the Company shall be deemed to be an Affiliate of any Stockholder.  The term “Affiliated” shall have the correlative meaning.

 

 

“Beneficial Owner” shall be determined pursuant to Rules 13d-3 and 13d-5 under the Exchange Act, and “Beneficial Ownership” shall mean any of the rights of a Beneficial Owner.

 

“Board” means the board of directors of the Company.

 

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

 

“control” (including the terms “controlling”, “controlled by” and “under  common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting shares, by contract, or otherwise.

 

“Common Shares” means shares of Common Stock.

 

“Common Stock” means the Class A voting Common Stock, par value $1.00 per share, of the Company and any stock into which such Common Stock may hereafter be converted or changed (including by way of recapitalization, merger, consolidation, other reorganization or otherwise).

 

“Competitor” means, at the time a Transfer is contemplated, other than the Company or any of its Subsidiaries (i) any producer or distributor of aluminum, steel, vinyl, cooper, fiberglass and similar materials for original equipment manufacturers, distributors, contractors or home centers, which producer or distributor serves customers in (w) any state in which the Company or any of its Affiliates then serves customers, (x) any state that is contiguous to any state referred to in clause (w), (y) Canada, or (z) Western Europe; or (ii) any Person if the primary business of such Person or of such Person and its Affiliates is the production of such materials.

 

“Competitor Affiliate” means, with respect to any Competitor, any other Person directly or indirectly controlling, controlled by or under common control with such Competitor other than:

 

 

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(i)                                     any such Person which constitutes a commercial bank, savings and loan association, savings bank, insurance company, lease financing company, commercial finance company or mutual fund (or any Subsidiary of any such entity to which troubled credits are transferred) if (x) such Person controls such Competitor, (y) such Person is not itself controlled by or under common control with any Competitor not controlled by such Person and (z) such Person and its Affiliates, taken together, are not engaged in, as a principal line of business, the business of acquiring debt or equity of financially distressed companies; or

 

(ii)                                  any investment fund or separate account that is managed or advised by the same Investment Adviser as any holder or Beneficial Owner of Securities as of the Effective Date.

 

For purposes of this definition, (1) an Investment Adviser to an investment fund, and any Person who directly or indirectly controls, is controlled by or under common control with such Investment Adviser, shall be deemed to be directly or indirectly controlling, controlled by or under common control with such investment fund, and (2) a Person shall not be considered to be in control of another Person if the first Person and its Affiliates (A) Beneficially Own less than 15% of the voting securities of the second Person, (B) do not possess, directly or indirectly, the power to direct or cause the direction of the management and policies of the second Person, whether by contract or otherwise, and (C) are not deemed to be in control of the second Person by virtue of clause (1) of this sentence.

 

“Effective Date” has the meaning set forth in the introduction to this Agreement.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor or replacement thereto.

 

“Family Member” means with respect to any individual (i) any member of the immediate family of such individual (which shall mean any parent, spouse, child or other lineal descendants (including by adoption) thereof), (ii) each trust, limited liability company, limited partnership or private foundation (x) created for the benefit of such individual or one or more members of such individual’s immediate family or (y) in which such individual or one or more members of such individual’s immediate family has, individually or in the aggregate, a majority interest and (iii) any Person who is controlled by any such immediate family member or trust, limited liability company, limited partnership or private foundation (including each custodian of property for one or more such Persons).

 

“Financial Officer” means the chief financial officer, principal accounting officer, treasurer or controller of the Company.

 

“First Lien Credit Agreement” means that certain Amended and Restated First Lien Credit and Guaranty Agreement dated as of the Effective Date among the Borrower, Euramax Holdings, Limited, Euramax International Holdings, B.V., Euramax Europe, B.V., Certain subsidiaries of Euramax International, Inc., various lenders, General Electric Capital Corporation, as U.S. Administrative Agent, European Administrative Agent, Collateral Agent

 

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and U.K. Trustee and the other parties thereto, as the same may be amended, modified, restated, supplemented, refinanced or replaced from time to time.

 

“Investment Adviser” shall have the meaning ascribed to such term in Section 2(a)(20) of the Investment Company Act of 1940, as amended.

 

“Management Compensation Plan” shall mean that certain Euramax Management Incentive Plan pursuant to which (i) nine and 87/100 percent (9.87%) of the fully diluted outstanding Common Stock of the Company as of the date hereof will be reserved for issuance to certain members of management of the Company and (ii) one percent (1%) of the fully diluted outstanding Common Stock as of the date hereof will be reserved for issuance to members of the Board, each as determined by the Board, and in each case, calculated after giving effect to the potential issuance of all Common Stock under the Management Compensation Plan.

 

“Person” means an individual, corporation, limited liability company, partnership, fund, account, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

 

“Public Offering” means any offering of shares of Common Stock to the public pursuant to an effective registration statement under the Securities Act (other than pursuant to a registration statement on Form S-4 or Form S-8 or any similar or successor form) or any comparable statement under any similar federal statute then in force.

 

“Purchase Agreement” means that certain Purchase Agreement, dated as of the Effective Date, among the Lenders under the Second Lien Credit Agreement and the Borrower.

 

“Qualified Public Offering” means (i) any firmly underwritten Public Offering by the Company in which the Company receives no less than $50,000,000 of net proceeds from sales to Persons other than Affiliates of the Company pursuant to a public distribution in which Common Stock of the Company shall be listed or traded on a national or regional exchange or approved for quotation on the Nasdaq Global Market or (ii) any consummated Demand Registration that is the First Public Offering, pursuant to, and as such terms are defined in the Registration Rights Agreement.

 

“Registration Rights Agreement” means that certain Registration Rights Agreement, dated as of the Effective Date, among the Company and the holders of Securities listed on Schedule I thereto.

 

“Related Transactions” means transactions executed pursuant to a common agreement, arrangement or understanding, in each case whether formal or informal.

 

“Securities” means Common Stock, any other equity securities of the Company and any shares of capital stock or other securities directly or indirectly exercisable for, or convertible into, such securities.

 

“Securities Act” means the Securities Act of 1933, as amended, and any successor or replacement thereto.

 

4

 

“Shelf Registration Statement” means a shelf registration statement that complies with the provisions of Rule 415 under the Securities Act.

 

“Subsidiary” means, with respect to any Person, any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person.

 

“Tag-Along Portion” means, for any Tagging Person, that number of securities equal to the product of (i) the aggregate number of Securities owned by the Tagging Person immediately prior to the applicable Tag-Along Sale and (ii) a fraction the numerator of which is the maximum number of Securities proposed by the Tag-Along Seller to be Transferred in such Tag-Along Sale and the denominator of which is the aggregate number of Securities owned by all Stockholders at such time.

 

“Third Party” means a prospective Transferee of Securities in an arm’s-length transaction from one or more Stockholders, other than an Affiliate of any such Stockholders.

 

“Transfer” means, with respect to any Securities, (i) when used as a verb, to sell, assign, dispose of, exchange, pledge, encumber, hypothecate or otherwise transfer such Securities or any participation or interest therein, whether directly or indirectly, or agree or commit to do any of the foregoing and (ii) when used as a noun, a direct or indirect sale, assignment, disposition, exchange, pledge, encumbrance, hypothecation, or other transfer of such Securities or any participation or interest therein or any agreement or commitment to do any of the foregoing.  The terms “Transferee”, Transferor”, “Transferred”, and other forms of the word “Transfer” shall have the correlative meanings.  Notwithstanding anything to the contrary contained herein, the term “Transfer” shall not include pledges or encumbrances of all assets (including Securities) of a fund or other investment vehicle in connection with leverage incurred by such fund or investment vehicle.

 

“Working Capital Credit Agreement” shall mean that certain Senior Secured Revolving Credit and Guaranty Agreement, dated as of the Effective Date, among Amerimax Home Products, Inc., Amerimax Diversified Products, Inc., Amerimax Building Products, Inc., Bergen Building Products, Inc., Fabral, Inc., and Euramax Receivables, LLC, as borrowers, Euramax International, Inc. and other entities parties thereto as guarantors, various lenders, Regions Bank, as Collateral and Administrative Agent, Wachovia Bank, National Association as Co-Agent and Regions Bank as Sole Lead Arranger and Bookrunner, as the same may be amended, modified, restated , supplemented, refinanced or replaced from time to time.

 

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Section 1.02                                Other Definitional and Interpretative Provisions.  The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.  References to Articles, Sections, Exhibits and Schedules are to Articles, Sections, Exhibits and Schedules of this Agreement unless otherwise specified.  All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein.  Any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein, shall have the meaning as defined in this Agreement.  Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular.  Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import.  “Writing,” “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form.  References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof.  References to any Person include the successors and permitted assigns of that Person.  References from or through any date mean, unless otherwise specified, from and including or through and including, respectively.

 

ARTICLE 2

 

RESTRICTIONS ON TRANSFER

 

Section 2.01                                General Restrictions On Transfer.

 

(a)                                  Each Stockholder agrees that it shall not Transfer any Securities (or solicit any offers in respect of any Transfer of any Securities), except in compliance with or pursuant to an exemption from the requirements of the Securities Act and any other applicable securities or “blue sky” laws, and the terms and conditions of this Agreement and in accordance with Section 2.03.

 

(b)                                 Any attempt to Transfer any Securities prior to the Termination Date (as defined below) not in compliance with this Agreement shall be null and void ab initio, and the Company shall not, and shall cause any transfer agent not to, give any effect in the Company’s stock records to such attempted Transfer.

 

Section 2.02                                Future Stockholders.  Each Stockholder hereby agrees that any Person who is granted the right to acquire Common Stock from the Company subsequent to the date hereof shall, if such Person is not already a party to this Agreement, deliver to the Company an agreement to be bound by the terms of this Agreement in the form of Exhibit D hereto.  This Agreement will be deemed to be amended to include such Person as a Stockholder; provided, that any Person who becomes a signatory to this Agreement at any time during a Tag-Along Period but following the delivery of a Tag-Along Notice shall have the right to accept the terms set forth in such Tag-Along Notice and participate in the Transfer pursuant to the terms and conditions of Section 3.

 

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Section 2.03                                Permitted Transfers.  Subject to Sections 2.04, 3.01 and 3.02, any Stockholder may at any time Transfer any or all of its Securities without the consent of the Board or any other Stockholder or group of Stockholders so long as prior to the consummation thereof, the proposed Transferee delivers to the Company, in form and substance reasonably acceptable to the Company, (i) if the proposed Transferee is not already party to this Agreement, an agreement to be bound by the terms of this Agreement in the form of Exhibit D hereto, (ii) if the proposed Transferee is not a Competitor or Competitor Affiliate, a written representation from the proposed Transferee to that effect, (iii) if the proposed Transferee is a Competitor or Competitor Affiliate, a written representation that the proposed Transfer does not violate Section 2.04, together with such documentation as may be reasonably requested by the Company to verify the accuracy of such certification; (iv) if no Tag-Along Notice (as defined below) has been delivered in accordance with Section 3.01 with respect to such proposed Transfer, (A) a written certification by the proposed Transferor confirming that the proposed Transfer would not constitute a Tag-Along Sale (as defined below) and (B) a written certification by the proposed Transferee confirming that no right of acceleration or default under the First Lien Credit Agreement, the Working Capital Credit Agreement or any other material contract identified as such by the Company would be caused by such Transfer; (v) a written representation by the proposed Transferor that the Transfer to such Transferee is in compliance with the Securities Act and any other applicable securities or “blue sky” laws; and (vi) if requested by the Company in its reasonable judgment, an opinion of counsel, in form and substance reasonably acceptable to the Company, for such Transferor shall be supplied to the Company at such Transferor’s expense to the effect that such Transfer is being made pursuant to an exemption from the registration requirements under the Securities Act and in compliance with any other applicable securities or “blue sky” laws.  Upon becoming a party to this Agreement, the permitted Transferee of a Stockholder shall be substituted for, and shall enjoy the same rights and be subject to the same obligations as, the Transferor hereunder with respect to the Securities Transferred pursuant to such Transfer.  Notwithstanding anything to the contrary contained herein, no Transfer of Securities shall be recognized or permitted if, in the reasonable discretion of the Company, such Transfer would (i) cause the Securities to be held by 450 or more Persons as such determination would be made pursuant to Section 12(g) of the Exchange Act or (ii) otherwise cause the Company to be subject to the registration requirements or periodic reporting requirements of Section 12 or Section 15 of the Exchange Act.

 

Section 2.04                                No Transfers to a Competitor.  Notwithstanding anything in this Agreement to the contrary, no Stockholder may Transfer any Securities to a Competitor or a Competitor Affiliate unless (i) such Transfer is approved by the Board and the Stockholders holding at least two-thirds of the then outstanding Common Shares or (ii) (x) the Competitor or Competitor Affiliate and its Affiliates will be, after such Transfer, the Beneficial Owners of a majority of the outstanding Common Shares after such Transfer and (y) the Competitor or Competitor Affiliate, as the case may be, has offered to purchase all of the then outstanding Common Shares on the same terms and conditions offered to such Stockholder and purchases, simultaneously with such Transfer, all such Common Shares that are tendered to it at or prior to the time of such Transfer.  For the avoidance of doubt, any Stockholder that initially declines the offer described in clause (ii)(y) of the preceding sentence may nevertheless tender outstanding Common Shares at the time of such Transfer and such Common Shares will be purchased by the Competitor or Competitor Affiliate, as the case may be, on the same terms and conditions and simultaneously with such Transfer.

 

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Section 2.05                                Legends.  Each certificate evidencing Common Stock subject to the terms hereof and each certificate issued in exchange for or upon the Transfer of any such Common Stock shall be stamped or otherwise imprinted with a legend in substantially the following form:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND OTHER OBLIGATIONS (INCLUDING THE OBLIGATION TO SELL SUCH SECURITIES UPON AN APPROVED SALE) SET FORTH IN THE STOCKHOLDERS AGREEMENT, DATED AS OF JUNE 29, 2009, AS THE SAME MAY BE AMENDED OR MODIFIED FROM TIME TO TIME, AMONG THE ISSUER OF THESE SECURITIES (THE “COMPANY”) AND ITS STOCKHOLDERS. ANY PURPORTED TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE THAT FAILS TO COMPLY WITH SUCH RESTRICTIONS AND OBLIGATIONS SHALL BE VOID AND OF NO EFFECT. A COPY OF SUCH STOCKHOLDERS AGREEMENT SHALL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST.”

 

Upon the Termination Date, the holder of any certificate representing Common Stock and bearing such legend shall be entitled to receive from the Company, without expense, new securities of like tenor not bearing the legend set forth above.

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND SUCH SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.”

 

The requirement that the above securities legend be placed upon certificates evidencing Common Stock shall cease and terminate upon the earliest of the following events: (i) when such Common Stock are transferred in a public offering, (ii) when such Common Stock are transferred pursuant to Rule 144, as such Rule may be amended (or any successor provision thereto), under the Securities Act or (iii) when such Common Stock are transferred in any other transaction if the seller delivers to the Company an opinion of its or his counsel, which counsel or opinion shall be reasonably satisfactory to the Company, or a “no-action” letter from the staff of the Securities and Exchange Commission, in either case to the effect that such legend is no longer necessary in order to protect the Company against a violation by it of the Securities Act upon any sale or other disposition of such Common Stock without registration thereunder.  Upon the consummation of any event requiring the removal of a legend hereunder, the Company upon the surrender of certificates containing such legend, shall, at its own expense, deliver to the holder of any such Common Stock as to which the requirement for such legend shall have terminated, one or more new certificates evidencing such shares not bearing such legend.

 

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ARTICLE 3

 

TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS

 

Section 3.01                                Tag-Along Rights.

 

(a)                                  Subject to Section 3.03, if any Stockholder or Stockholders (the “Tag-Along Seller”) propose to Transfer Beneficial Ownership of Securities representing at least 27% of the then outstanding Securities in a single transaction or in a series of Related Transactions to a Transferee or group of Affiliated Transferees and/or to Transferees who are Acting in Concert (excluding, in each case, Transferees who are Affiliates of Tag-Along Seller) (a “Tag-Along Sale”),

 

(i)                                     not more than 60 days and not less than 20 Business Days prior to the expected date of consummation of such Transfer, the Tag-Along Seller shall provide each other Stockholder written notice, in the form of Exhibit A hereto, of the terms and conditions of such proposed Transfer (“Tag-Along Notice”) and each other Stockholder shall be offered the opportunity to participate in such Transfer in accordance with Sections 3.01 and 3.03, and

 

(ii)                                  each other Stockholder may elect, at its option, to participate in the proposed Transfer in accordance with this Section 3.01 and Section 3.03 (each such electing other Stockholder, a “Tagging Person”).

 

The Tag-Along Notice shall identify the number of Securities proposed by the Tag-Along Seller to be Transferred in such Tag-Along Sale (“Tag-Along Offer”), the consideration for which the Transfer is proposed to be made, and all other material terms and conditions of the Tag-Along Offer, including the form of the proposed agreement, if any, and a firm offer by the proposed Transferee to purchase Securities from the Stockholders in accordance with this Section 3.01 and Section 3.03. For the avoidance of doubt, neither (i) a bona fide pledge of Securities, nor (ii) the foreclosure upon such Securities following a default, in each case otherwise in compliance with this Agreement, shall constitute a Transfer of Beneficial Ownership permitting the exercise of a Tag-Along Right (defined below) under this Section 3.01.

 

From the date of its receipt of the Tag-Along Notice, each Tagging Person shall have the right (a “Tag-Along Right”), exercisable by written notice in the form of Exhibit B hereto (“Tag-Along Response Notice”) given to the Tag-Along Seller within 15 Business Days after its receipt of the Tag-Along Notice (the “Tag-Along Notice Period”), to request that the Tag-Along Seller include in such Tag-Along Sale any portion or all of such Tagging Person’s Tag-Along Portion, and the Tag-Along Seller shall include the number of Securities proposed by the Tag-Along Seller to be Transferred as set forth in the Tag-Along Notice (reduced to the extent necessary, so that each Tagging Person shall be able to include its Tag-Along Portion) and such additional Securities as permitted by Section 3.01(d).  Each Tag-Along Response Notice shall include instructions for payment or delivery of the purchase price for the Securities to be Transferred in such Tag-Along Sale.  Each Tagging Person that exercises its Tag-Along Rights hereunder shall deliver to the Company, with its Tag-Along Response Notice, the certificates

 

9

 

representing the Securities of such Tagging Person to be included in the Tag-Along Sale, together with a limited power-of-attorney authorizing the Company to Transfer such Securities on the terms set forth in the Tag-Along Notice or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Securities pursuant to this Section 3.01(a) at the closing for such Tag-Along Sale against delivery to such Tagging Person of the consideration therefor.  Delivery of the Tag-Along Response Notice with such certificate or certificates and limited power-of-attorney shall constitute an irrevocable acceptance of the Tag-Along Offer by such Tagging Person, subject to the provisions of this Section 3.01 and Section 3.03.

 

If, at the end of a 60-day period after such delivery of such Tag-Along Notice (which 60-day period shall be extended if any of the transactions contemplated by the Tag-Along Offer are subject to regulatory approval until the expiration of five Business Days after all such approvals have been received, but in no event later than 90 days following delivery of the Tag-Along Notice by the Tag-Along Seller), the Tag-Along Seller has not completed the Transfer of all Securities proposed to be Transferred by the Tag-Along Seller and all Tagging Persons on substantially the same terms and conditions set forth in the Tag-Along Notice, the Company and the Tag-Along Seller shall (i) return to each Tagging Person the limited power-of-attorney and all certificates representing the Securities that such Tagging Person delivered for Transfer pursuant to this Section 3.01(a) and any other documents in the possession of the Tag-Along Seller or the Company executed by the Tagging Persons in connection with the proposed Tag-Along Sale, and (ii) not conduct any Transfer of Securities without again complying with this Agreement.

 

(b)                                 Concurrently with the consummation of the Tag-Along Sale, the Tag-Along Seller shall (i) notify the Tagging Persons thereof, (ii) remit to the Tagging Persons the total consideration for the Securities of the Tagging Persons Transferred pursuant thereto (net of any fees and expenses as provided in Section 3.03), with the cash portion of the purchase price paid by wire transfer of immediately available funds in accordance with the wire transfer instructions in the applicable Tag-Along Response Notices and (iii) promptly after the consummation of such Tag-Along Sale, furnish to each Tagging Person a certification that the Tag-Along Sale was consummated for the same consideration and under the same material terms and conditions as were set forth in the Tag-Along Notice, or if such Tag-Along Sale was consummated for different consideration than that set forth in the Tag-Along Notice (as permitted by Section 3.01(e)), a certification setting forth such consideration.

 

(c)                                  If at the expiration of the Tag-Along Notice Period any Stockholder shall not have elected to participate in the Tag-Along Sale, such Stockholder shall be deemed to have waived its rights under Section 3.01(a) with respect to the Transfer of its Securities pursuant to such Tag-Along Sale.

 

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(d)                                 If (i) any Stockholder declines to exercise its Tag-Along Rights or (ii) any Tagging Person elects to exercise its Tag-Along Rights with respect to less than such Tagging Person’s Tag-Along Portion, each Tag-Along Seller and Tagging Person shall be entitled to Transfer, pursuant to the Tag-Along Offer, a pro rata share of the number of Securities constituting, as the case may be, the Tag-Along Portion of such Tagging Person or the portion of such Tagging Person’s Tag-Along Portion with respect to which Tag-Along Rights were not exercised.

 

(e)                                  The Tag-Along Seller shall Transfer, on behalf of itself and each Tagging Person, the Securities subject to the Tag-Along Offer and elected to be Transferred on substantially the same terms and conditions set forth in the Tag-Along Notice within 60 days (or such longer period as extended under Section 3.01(a)) of delivery of the Tag-Along Notice, provided that the price payable in any such Transfer may exceed the price specified in the Tag-Along Notice by up to 10%; provided, further, that the Tag-Along Seller shall not be required to provide any indemnity, representations, warranties or otherwise assume any obligations with respect to the Securities of any Tagging Person.

 

(f)                                    Notwithstanding anything contained in this Section 3.01, there shall be no liability on the part of the Tag-Along Seller to the Tagging Persons (other than the obligation to return any certificates evidencing Securities and limited powers-of-attorney received by the Tag-Along Seller) if the Transfer of Securities pursuant to Section 3.01 is not consummated for whatever reason.  Whether to effect a Transfer of Securities pursuant to this Section 3.01 by the Tag-Along Seller is in the sole and absolute discretion of the Tag-Along Seller.

 

Section 3.02                                Drag-along Rights.

 

(a)                                  Subject to Section 3.03, if (i) any Stockholder or Stockholders (the “Drag-Along Seller”) propose to Transfer a number of Securities owned by the Drag-Along Seller in a single transaction or in a series of Related Transactions (a “Drag-Along Sale”) to a Third Party (a “Drag-Along Transferee”) in a bona fide sale (including by way of purchase agreement, tender offer, merger or other business combination transaction or otherwise, (ii) after such Transfer, such Drag-Along Transferee would Beneficially Own at least 66 2/3 % of the outstanding Common Shares, (iii) a resolution has been duly passed by the Board approving the Drag-Along Sale as being fair to all Stockholders and (iv) the Drag-Along Sale has been approved by Stockholders holding at least a majority of the then outstanding Common Shares, the Drag-Along Seller may at its option (A) sell all of the Securities owned by the Drag-Along Seller and (B) require all Stockholders other than the Drag-Along Seller (the “Drag-Along Stockholders”) to Transfer all of the Securities owned by each Drag-Along Stockholder for the same consideration per Common Share (on an as-converted basis and net of any exercise price payable) and otherwise on the same terms and conditions as the Drag-Along Seller in such Drag-Along Sale].

 

The Drag-Along Seller shall provide written notice, in the form of Exhibit C hereto, of such Drag-Along Sale to the Drag-Along Stockholders (a “Drag-Along Sale Notice”) not more

 

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than 60 days and not less than 10 Business Days prior to the proposed date of consummation of the Drag-Along Sale.  The Drag-Along Sale Notice shall identify the Transferee, the consideration for which a Transfer of Securities is proposed to be made and all other material terms and conditions of the Drag-Along Sale.  Each Drag-Along Stockholder shall be required to participate in the Drag-Along Sale on the terms and conditions set forth in the Drag-Along Sale Notice and to tender all its Securities as set forth in this Section 3.02.  Not later than 5 Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each of the Drag-Along Stockholders shall deliver to the Company the certificates representing the Securities of such Drag-Along Stockholder to be included in the Drag-Along Sale, together with a limited power-of-attorney authorizing the Company to Transfer such Securities on the terms set forth in the Drag-Along Notice and wire transfer or other instructions for payment or delivery of the consideration to be received in such Drag-Along Sale, or, if such delivery is not permitted by applicable law, an unconditional agreement to deliver such Securities pursuant to this Section 3.02(a) at the closing for such Drag-Along Sale against delivery to such Drag-Along Stockholder of the consideration thereto.  If a Drag-Along Stockholder should fail to deliver such certificates to the Company, the Company (subject to reversal under Section 3.02(b)) shall cause the books and records of the Company to show that such Securities are bound by the provisions of this Section 3.02(a), and that such Securities shall be Transferred to the Drag-Along Transferee immediately upon surrender for Transfer by the holder thereof.

 

(b)                                 The Drag-Along Seller shall have a period of 105 days from the date of delivery of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice, provided that, if such Drag-Along Sale is subject to regulatory approval, such 105-day period shall be extended until the expiration of five Business Days after all such approvals have been received, but in no event later than 120 days following the date of delivery of the Drag-Along Sale Notice.  If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall return to each of the Drag-Along Stockholders the limited power-of-attorney and all certificates representing Securities that such Drag-Along Stockholders delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the Drag-Along Stockholders in connection with such proposed Transfer, and all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Securities owned by the Drag-Along Stockholders shall again be in effect.

 

(c)                                  Concurrently with the consummation of the Transfer of Securities pursuant to this Section 3.02, the Drag-Along Seller shall (i) notify the Drag-Along Stockholders thereof, (ii) remit to each of the Drag-Along Stockholders that have surrendered their certificates the total consideration for the Securities Transferred pursuant thereto (subject to Section 3.03(b)(ii)), with the cash portion of the purchase price to be paid by wire transfer of immediately available funds in accordance with such Drag-Along Stockholder’s wire transfer instructions, and (iii) promptly after completion of such Transfer, furnish such other evidence of the completion and the date of completion of such Transfer and the terms thereof as may be reasonably requested by such Drag-Along Stockholders.

 

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(d)                                 Notwithstanding anything contained in this Section 3.02, there shall be no liability on the part of the Drag-Along Seller to any Drag-Along Stockholders (other than the obligation to return the limited power-of-attorney and the certificates and other applicable instruments representing Securities received by the Drag-Along Seller) if the Transfer of Securities pursuant to this Section 3.02 is not consummated for whatever reason, regardless of whether the Drag-Along Seller has delivered a Drag-Along Sale Notice.

 

Section 3.03                                Additional Conditions to Tag-Along Sales and Drag-Along Sales.  Notwithstanding anything contained in Section 3.01 or Section 3.02, the rights and obligations of (i) the Tagging Persons to participate in a Tag-Along Sale under Section 3.01 and (ii) the Drag-Along Stockholders to participate in a Drag-Along Sale under Section 3.02 are subject to the following conditions:

 

(a)                                  upon the consummation of such Tag-Along Sale or Drag-Along Sale, all of the Stockholders participating therein will receive, in connection with such Tag-Along Sale or Drag-Along Sale, the same form and amount of consideration per Common Share, or, if any Stockholders are given an option as to the form and amount of consideration to be received, all Stockholders participating therein will be given the same option;

 

(b)                                 the fees and expenses incurred by any Stockholder in connection with any Tag-Along Sale or Drag-Along Sale shall be paid by such Stockholder, except the Tag-Along Seller or Drag-Along Seller shall retain one counsel for all Stockholders participating in such Tag-Along Sale or Drag-Along Sale (which counsel shall be selected by such Tag-Along Seller or Drag-Along Seller) and the fees and expenses of such Tag-Along Sale or Drag-Along Sale shall be paid as follows (to the extent not otherwise paid by the Company or another Person): (i) all such fees and expenses incurred in connection with any unconsummated Drag-Along Sale shall be paid by the Drag-Along Seller, (ii) all reasonable out-of-pocket fees and expenses incurred in an unconsummated Tag-Along Sale shall be paid by the Tag-Along Seller and Tagging Persons, pro rata, unless such Tag-Along Sale is not consummated due to arbitrary or capricious actions or inactions on the part of the Tag-Along Seller in which case all such fees and expenses shall be paid by the Tag-Along Seller, and (iii) all reasonable out-of-pocket fees and expenses incurred in connection with any consummated Tag-Along Sale or Drag-Along Sale shall be paid from the total consideration for the Securities Transferred by the Tag-Along Seller and Tagging Persons or the Drag-Along Seller and the Drag-Along Stockholders, as the case may be, pursuant thereto, prior to the distribution of the net amount to the Tag-Along Seller and Tagging Persons or the Drag-Along Seller and the Drag-Along Stockholders, as the case may be;

 

(c)                                  each Tagging Person shall (i) make such representations, warranties and covenants and enter into such definitive agreements as are customary for transactions of the nature of the proposed Transfer, (ii) benefit from all of the same provisions of the definitive agreements as the Tag-Along Seller and (iii) be required to bear their proportionate share of any escrows, holdbacks or adjustments in purchase price; and

 

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(d)                                 each Drag-Along Stockholder shall (i) make such representations, warranties and covenants and enter into such definitive agreements as are customary for transactions of the nature of the proposed Transfer; provided that no Drag-Along Stockholder shall be required to provide any representations or indemnities in connection with any Drag-Along Sale other than representations and indemnities concerning such Drag-Along Stockholder’s title to the Securities free and clear of any encumbrances and authority, power and right to enter into and consummate the Transfer without contravention of any law or material agreement, (ii) benefit from all of the same provisions of the definitive agreements as the Drag-Along Seller, as the case may be, and (iii) be required to bear their proportionate share of any purchase price holdbacks or adjustments in purchase price. Each Drag-Along Stockholder shall take such actions, including without limitation, voting all of its Securities in favor of such Drag-Along Sale and waiving any appraisal, dissenter or similar rights under applicable law, in each case if applicable to such Drag-Along Sale, as may be reasonably requested by the Drag-Along Seller to carry out the Drag-Along Sale.

 

ARTICLE 4

 

CERTAIN COVENANTS AND AGREEMENTS; PREEMPTIVE RIGHTS

 

Section 4.01                                Confidentiality.  Each Stockholder agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ Investment Advisers, directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that each Stockholder shall instruct such Persons of the confidential nature of the Information and that by receiving such Information each such Person and each such Stockholder agrees to be responsible for any breach by such Persons), (b) to the extent requested by any regulatory, self-regulatory or supervisory authority, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) to the extent required to exercise any remedies or enforcement rights under this Agreement, (f) in accordance with Section 4.03, (g) with the consent of the Company, (h) to the extent such Information (1) becomes publicly available other than as a result of a breach of this Section or (2) becomes available to the Stockholder on a nonconfidential basis from a source other than the Company or (i) to the extent such Information is received after the Termination Date.  For the purposes of this Section, “Information” means all information received from the Company or any of its Subsidiaries relating to the Company or any of its Subsidiaries or any of their respective businesses, other than any such information that is available to the Stockholder on a nonconfidential basis prior to disclosure by the Company or any of its Subsidiaries.  Any person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

 

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Section 4.02                                Reports.  Until the earlier of (i) the effective date of a Shelf Registration Statement or (ii) the Termination Date, the Company agrees to furnish to each Stockholder (other than a Competitor or Competitor Affiliate) or otherwise make available to Stockholders, for so long as such Stockholder owns any Securities, all information and reports available to lenders under the First Lien Credit Agreement, as and when delivered to such lenders, or if there is no such credit agreement, the following:

 

(a)                                  within 120 days after the end of each fiscal year of the Company, an audited consolidated balance sheet of the Company and its Subsidiaries and related consolidated statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by independent public accountants of recognized national standing (without any qualification as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Company and its Subsidiaries on a consolidated basis in accordance with GAAP;

 

(b)                                 within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Company, a consolidated balance sheet of the Company and its Subsidiaries and related consolidated statements of operations, stockholders’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Company and its Subsidiaries on a consolidated basis;

 

(c)                                  (i) any certificate of a Financial Officer of the Company to lenders (to be delivered concurrently with delivery to such lenders) under any credit facility of the Company relating to (A) the occurrence of a default thereunder, (B) compliance with covenants thereunder or (C) changes in GAAP or in the application thereof or (ii) a copy of any certificate of the accounting firm that reported on the Company’s financial statements stating whether they obtained knowledge during the course of their examination of such financial statements of any default under any credit facility of the Company; and

 

(d)                                 within 10 Business Days after final approval thereof by the Board, a consolidated budget of the Company and its Subsidiaries for such fiscal year, prepared to show information on a quarterly basis, and, to the extent all relevant internal approvals have been obtained, any significant revisions of such budget.

 

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Section 4.03                                Provision of Information to Prospective Transferee of Common Shares.  Any Stockholder may (i) provide any Information, including without limitation the Information provided pursuant to Section 4.02 or (ii) request that the Company provide such Information (in which case the Company shall comply with such request), to any Person to whom such Stockholder is contemplating a Transfer of any Securities, provided that (x) neither the provision of such Information nor such Transfer would be in violation of the provisions of this Agreement, the Securities Act, or any other applicable securities or “blue sky” laws, (y) the Person to be provided such Information pursuant to this Section shall execute a confidentiality agreement containing reasonable provisions satisfactory to the Company and (z) no Information may be provided to a Competitor or Competitor Affiliate.

 

Section 4.04                                Charter or Bylaw Provisions.  Each Stockholder agrees to vote its Common Shares or execute proxies or written consents, as the case may be, to ensure that the Company’s certificate of incorporation and bylaws (i) facilitate, and do not at any time conflict with, any provision of this Agreement (ii) permit each Stockholder to receive the benefits to which each such Stockholder is entitled under this Agreement and (iii) provide that Transfers that occur prior to the Termination Date not in accordance with this Agreement are void and of no effect.

 

Section 4.05                                Conflicting Agreements.  The Company and each Stockholder represents that it has not, and agrees that it shall not (a) enter into any agreement or arrangement of any kind with any Person with respect to its Securities inconsistent with the provisions of this Agreement or for the purpose or with the effect of denying or reducing the rights of any other Stockholder under this Agreement, or (b) act, for any reason, as a member of a group or in concert with any other Person in connection with the Transfer or voting of its Securities in any manner that is inconsistent with the provisions of this Agreement.

 

Section 4.06                                Preemptive Rights.

 

(a)                                  Subject to Section 4.06(d) and the limitations set forth in Section 4.06(c) below, the Company shall not issue or sell any Securities (collectively, “New Issue Securities”) to any Person, except in accordance with the following provisions:

 

(b)                                 The Company shall give a notice to each Stockholder hereunder (the “Preemptive Notice”) stating: (i) the Company’s intention to issue the New Issue Securities; (ii) the number and description thereof or the amount of the New Issue Securities to be issued; (iii) the purchase price (calculated as of the proposed issuance date) and the other terms upon which the Company is offering the New Issue Securities.

 

(c)                                  Transmittal of the Preemptive Notice to the Stockholder by the Company shall constitute an offer by the Company to sell to each Stockholder his, her or its pro rata portion, or any lesser number specified by the Stockholder, of the New Issue Securities for the price and upon the terms set forth in the Preemptive Notice.  For a period of 10 Business Days after the submission of the Preemptive Notice to the Stockholder, each Stockholder shall have the option, exercisable by written notice to the Company, to accept the Company’s offer as to purchase all or any part of such Stockholder’s pro rata portion or any lesser number of the New Issue Securities; provided, however, that if any

 

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Stockholder notifies the Company that it desires to purchase less than all of the New Issues Securities available for it to purchase, the Company shall promptly offer to sell such excess New Issue Securities to any Stockholder exercising its right to purchase all of the New Issue Securities available for it to purchase.  If two (2) or more types of New Issue Securities are to be issued or New Issue Securities are to be issued together with other types of securities, including, without limitation, debt securities, in a single transaction or related transactions, the rights to purchase New Issue Securities granted to the Stockholders under this Section 4.06 must be exercised to purchase all types of New Issue Securities and such other securities in the same proportion as such New Issue Securities and other securities are to be issued by the Company.  If the Stockholders (as a group) agree to purchase less than the total number of New Issue Securities proposed to be issued and sold, the Company shall have one hundred twenty (120) days thereafter to sell any or all of the remaining New Issue Securities (i.e., those not to be sold to any Stockholder) to one or more other Persons, upon terms and conditions no less favorable to the Company, and no more favorable to such Person or Persons, than those set forth in the Preemptive Notice.  In the event the Company has not sold such New Issue Securities within said one hundred twenty (120) day period, the Company will not thereafter issue or sell any New Issue Securities without first offering such New Issue Securities to the Stockholders in the manner provided above.

 

(d)                                 The preemptive rights contained in this Section 8 shall not apply to:

 

(i)                                     the issuance by the Company of Common Stock pursuant to the Management Compensation Plan;

 

(ii)                                  the issuance of Securities in a Public Offering;

 

(iii)                               the issuance of Securities by any Subsidiary of the Company to the Company;

 

(iv)                              the issuance of Securities upon the exercise or exchange of other Securities that were issued in compliance with this Section 4.06(d) or Securities which were issued in an issuance that is exempt from this Section 4.06; and

 

(v)                                 the issuance of Securities in connection with any stock split, stock dividend, reverse split, consolidation, recapitalization of the Company or any other form of strategic transaction.

 

(e)                                  Notwithstanding anything to the contrary contained in this Section 4.06, the Company may, in order to expedite the issuance of New Issue Securities hereunder, issue all or a portion of the New Issue Securities to one or more Persons (each, an “Initial Subscribing Stockholder”) without complying with the provisions of this Section 4.06; provided that, prior to such issuance, either (i) each Initial Subscribing Stockholder agrees to offer to sell to each Stockholder his, her or its respective pro rata portion of such New Issue Securities on the same terms and conditions as issued to the Initial Subscribing Stockholders and in a manner which provides such Stockholder with rights substantially similar to the rights outlined in Sections 4.06(a) and (b) or (ii) the Company

 

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shall offer to sell an additional amount of New Issue Securities to each Stockholder (other that Initial Subscribing Stockholders) only in an amount and manner which provides such Stockholder with rights substantially similar to the rights outlined in Sections 4.06(a) and 4.06(b).  The Initial Subscribing Stockholders or the Company, as applicable, shall offer to sell such New Issue Securities to each other Stockholder within ninety (90) days after the closing of the purchase of the New Issue Securities by the Initial Subscribing Stockholders.

 

(f)                                    Any Stockholder may assign its rights pursuant to this Section 4.06, in whole or in part and from time to time, to an Affiliate that is not a Competitor or a Competitor Affiliate.

 

ARTICLE 5

 

BOARD MEMBERSHIP; VOTING

 

Section 5.01                                Board Membership; Voting.

 

(a)                                  The Board shall be comprised of seven (7) members, including the Chief Executive Officer as provided in (d) below.  The initial Board shall be comprised of the following members:  Marjorie Bowen, Jeffrey Brodsky, Allen Capsuto, Michael Lundin, Fulton Collins, Al Oddis and Mitchell Lewis (Chief Executive Officer).  Subsequent members of the Board shall be elected at Annual Meetings of Stockholders of the Company.

 

(b)                                 At each Annual Meeting of Stockholders of the Company following the Effective Date, each Stockholder holding the following amounts or more of the outstanding Common Stock (fully diluted except for Common Stock reserved or issued under the Management Compensation Plan) shall be entitled to appoint the applicable number of directors to the Board:

 

	
Common Stock
    	
 
    	
Directors
    
	
 
    	
 
    	
 
    
	
14.3%
    	
 
    	
1
    
	
 
    	
 
    	
 
    
	
28.6%
    	
 
    	
2
    
	
 
    	
 
    	
 
    
	
42.9%
    	
 
    	
3
    
	
 
    	
 
    	
 
    
	
57.2%
    	
 
    	
4;
    

 

provided that, notwithstanding the foregoing, if on the date such Annual Meeting of Stockholders of the Company is held, (i) Highland Institutional holds at least 14.3% of the outstanding Common Stock, it shall be entitled to appoint one (1) director for the immediately subsequent term of the Board and (ii) Highland Retail holds at least 11% of the outstanding Common Stock, being that amount of outstanding Common Stock (as a

 

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percentage of aggregate outstanding Common Stock) it owned on the Effective Date, it shall nevertheless be entitled to appoint one (1) director for the immediately subsequent term of the Board.  A Stockholder appointing one or more directors shall be entitled to vote for the election of the remaining directors only with respect to that portion of its Common Stock acquired after the date hereof in excess of the appointment thresholds set forth above.

 

(c)                                  The certificate of incorporation of the Company shall provide for cumulative voting for the election of directors in accordance with Section 214 of the Delaware General Corporation Law.

 

(d)                                 The Stockholders agree that, unless a majority of the Board (exclusive of the Chief Executive Officer) determines otherwise, at all times the Chief Executive Officer of the Company shall be a director of the Company and, accordingly, agree to designate such individual who serves in such capacity as a director effective on the day such individual commences his or her service as Chief Executive Officer and to remove such individual as director effective on the day such individual ceases being Chief Executive Officer.

 

(e)                                  All decisions of the Board shall be made by the majority vote of the directors of the Company present and constituting a quorum at any meeting of the Board.

 

(f)                                    Directors of the Company shall recuse themselves with respect to proposed transactions or other matters involving the Company and such directors or Affiliates of such Directors.

 

(g)                                 Upon the presentation of appropriate documentation, the Company shall reimburse each director of the Company for all reasonable out-of-pocket costs and expenses incurred by such director to attend Board meetings.  In addition, the Company shall pay the amounts set forth on Exhibit E, to each director of the Company who is neither employed by the Company nor employed by any Stockholder.

 

(h)                                 The Board shall not take any of the following actions without having first received the approval of Stockholders holding a majority of the outstanding Common Stock:

 

(i)                                     to commit to or effect any asset acquisition or series of asset acquisitions, in excess of $100 million other than supply agreements entered into in the ordinary course of the Company’s business;

 

(ii)                                  to create, incur, assume, guarantee, refinance or prepay any indebtedness, the outstanding principal amount of which exceeds $50 million at any one time or materially modify or otherwise alter the terms and provisions of any such indebtedness, in each case excluding the First Lien Credit Agreement and the Working Capital Credit Agreement and any refinancings or replacements thereof;

 

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(iii)                               to redeem, or repurchase any Common Stock or other equity securities or any debt or debt securities of the Company or any Subsidiary of the Company on other than a pro rata basis among all holders of the security being repurchased or redeemed, except pursuant to the Management Compensation Plan or any transactions solely between and among the Company and any Subsidiary of the Company or between and among any Subsidiaries of the Company;

 

(iv)                              to cause the Company to engage in a Public Offering;

 

(v)                                 to sell, lease, dispose of, or abandon any of the properties and assets of the Company (exclusive of properties, materials, supplies, equipment or other items of personal property disposed of in the ordinary course of business, which do not have a sale price of more than $100 million individually or in the aggregate or are not otherwise material to the business of the Company);

 

(vi)                              to merge or consolidate the Company with any other entity, convert the Company into another form of entity, exchange interests with any other person or entity or enter into any joint venture, partnership or consortium agreement;

 

(vii)                           to abandon any existing line of business of the Company responsible for revenue of $50 million or more in the immediately preceding 12-month period;

 

(viii)                        to make any loans or any advance payments of (x) compensation or (y) other consideration to any officer or other employee of the Company, or any director of the Company or Stockholder in excess of $100,000 (other than for reimbursement of reasonable relocation or other business expenses of employees incurred in the ordinary course of the Company’s business);

 

(ix)                                not in limitation or expansion of any of the foregoing, to cause the Company to enter into any material contract or agreement, which for the purpose of this Agreement shall mean any contract, agreement, or series of contracts or agreements that would obligate the Company to expend (or transfer assets with a value of) $100 million or more, other than supply agreements entered into in the ordinary course of Company’s business;

 

(x)                                   to amend or restate the Certificate of Incorporation or Bylaws of the Corporation;

 

(xi)                                any increase or decrease in the number of directors serving on the Board; or

 

(xii)                             to take any action, authorize or approve, or enter into any binding agreement with respect to the foregoing.

 

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(i)                                     The Board shall have the sole authority to determine the allocation of the Common Stock reserved for issuance pursuant to the Management Compensation Plan.

 

ARTICLE 6

 

MISCELLANEOUS

 

Section 6.01                                Termination.  This Agreement shall terminate upon the date of a Qualified Public Offering (the “Termination Date”), provided that Section 4.01 shall survive for one year after the Termination Date and Section 2.05 shall survive until all legends have been removed in accordance with the terms thereof.  The Termination Date shall be deemed to have occurred immediately prior to such Qualified Public Offering.

 

Section 6.02                                Binding Effect; Assignability; Benefit.

 

(a)                                  This Agreement shall be binding upon and enforceable by each of the parties hereto pursuant to, and shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, successors, legal representatives and permitted assigns.  The failure of any party to execute this Agreement shall not prevent them from exercising their rights under this Agreement, subject to their obligations under and the terms and conditions of this Agreement.  Any Stockholder that Transfers all of its Common Shares in accordance with the terms hereof shall cease to be bound by the terms hereof.

 

(b)                                 Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by any party hereto pursuant to any Transfer of Securities or otherwise, except that any Person acquiring Securities from any Stockholder in a Transfer in compliance with this Agreement shall execute and deliver to the Company an agreement to be bound by the terms of this Agreement in the form of Exhibit D hereto, in accordance with Section 2.03, and shall thenceforth be a “Stockholder”.

 

(c)                                  Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the parties hereto, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

 

Section 6.03                                Notices.  All notices, requests and other communications (collectively, “Communications”) to any party shall be in writing and shall be delivered in person, mailed by certified or registered mail, return receipt requested, or sent by facsimile transmission,

 

if to the Company, to:

 

Euramax Holdings, Inc.

5445 Triangle Parkway

Suite 350

Norcross, GA 30092

 

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Facsimile: (770) 449-7354

Attn: R. Scott Vansant

 

if to any Stockholder, to:

 

The address of such Stockholder listed on Schedule I, such Stockholder’s Joinder Agreement or such other address as provided by such Stockholder to the Company.

 

All Communications shall be deemed received on the earliest of (i) the date such Communication is sent by facsimile transmission, (ii) the date such Communication is delivered in person, (iii) the day after the date such Communication is placed in overnight mail with a national overnight courier service or (iv) three days after the date such Communication is mailed by certified or registered mail, in each case so long as such day is a Business Day.  If such day is not a Business Day, any such Communication shall be deemed not to have been received until the next succeeding Business Day.  Any Communication sent by facsimile transmission shall be confirmed by certified or registered mail, return receipt requested, posted within one Business Day, or by personal delivery, whether courier or otherwise, made within two Business Days after the date of such facsimile transmissions.

 

Any Person that becomes a Stockholder shall provide its address and fax number to the Company, which shall, upon request, promptly provide such information to any Stockholder requesting such information.

 

Section 6.04                                Waiver; Amendment.  No provision of this Agreement may be waived except by an instrument in writing executed by the party against whom the waiver is to be effective.  No provision of this Agreement may be amended or otherwise modified except by an instrument in writing executed by the Company with approval of (i) a majority of the Board and (ii) Stockholders holding at least two-thirds of the then outstanding Common Shares. Notwithstanding the foregoing, no provision of this Agreement may be amended or waived if such amendment or waiver of any provision would have the effect of adversely and disproportionately affecting any of the rights of any of Stockholder, (y) adversely and disproportionately affecting Persons who may be granted Securities under the Management Compensation Plan, whether or not any such Securities have been granted, without the written agreement of the Chief Executive Officer of the Company or (z) treating preferentially (including the changing of any existing material right or preference) in any material way any other Stockholder over another Stockholder except by written agreement of such Stockholder or Stockholder not being granted such material right or preference.

 

Section 6.05                                Fees and Expenses.  Except as may be otherwise provided herein or in any other agreement between or among any parties hereto, the fees and expenses incurred by any Stockholder in connection with this Agreement, any amendment or waiver hereof and the transactions contemplated hereby and all matters related hereto shall be paid by such Stockholder, except the Company shall pay all fees and expenses of one counsel for all Stockholders (selected by Stockholders holding the majority of the Common Shares held by all Stockholders) in connection with any amendment or waiver of this Agreement or any transactions related thereto.

 

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Section 6.06                                Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to the conflicts of laws rules of such state.

 

Section 6.07                                Jurisdiction.  The parties hereby agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the United States District Court for the Southern District of New York or any New York State court sitting in New York City, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any case of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of New York, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient form.  Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.  Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 5.04 shall be deemed effective service of process on such party.

 

Section 6.08                                WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 6.09                                Specific Enforcement.  Each party hereto acknowledges that the remedies at law of the other parties for a breach or threatened breach of this Agreement would be inadequate and, in recognition of this fact, any party to this Agreement, without posting any bond, and in addition to all other remedies that may be available, shall be entitled to obtain equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy that may then be available.

 

Section 6.10                                Effectiveness.  This Agreement shall become effective upon the Effective Date.

 

Section 6.11                                Entire Agreement.  This Agreement and the Exhibits hereto constitute the entire agreement among the parties hereto and supersede all prior and contemporaneous agreements and understandings, both oral and written, among the parties hereto with respect to the subject matter hereof and thereof.

 

Section 6.12                                Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.  Upon such a determination, the

 

23

 

parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner so that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

 

	
 
    	
EURAMAX   HOLDINGS, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   R. Scott Vansant
    
	
 
    	
 
    	
Name:
    	
R.   Scott Vansant
    
	
 
    	
 
    	
Title:
    	
Vice   President, Secretary and
    
	
 
    	
 
    	
 
    	
Chief   Financial Officer
    

 

Company Stockholders Agreement Signature Page

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