Document:

Unassociated Document

Exhibit 10.1

 

INTERCREDITOR AGREEMENT

 

INTERCREDITOR AGREEMENT, dated as of October 16, 2012 (this “Agreement” as hereinafter further defined), between REGIONS BANK, in its capacity as agent for the Revolving Loan Secured Parties (in such capacity, “Revolving Loan Agent” as hereinafter further defined), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., in its capacity as agent for the Notes Secured Parties (in such capacity, “Notes Agent” as hereinafter further defined).

 

W I T N E S S E T H:

 

WHEREAS, Bourland & Leverich Supply Co. LLC, a Delaware limited liability company (“B&L Supply”), has entered into a secured revolving credit facility with Revolving Loan Agent and the lenders and other parties for whom it is acting as agent as set forth in the Revolving Loan Agreement (as hereinafter defined) pursuant to which such lenders have made and from time to time may make loans and provide other financial accommodations to B&L Supply which are secured by substantially all of the assets of B&L Supply;

 

WHEREAS, B&L Supply is a guarantor with respect to the obligations of its affiliate, EMC (as hereinafter defined), with respect to the Notes (as hereinafter defined) under that certain Indenture (as hereinafter defined) with Notes Agent and the purchasers and other parties for whom it is acting as agent as set forth in the Indenture pursuant to which the initial purchasers have agreed to acquire the Notes which are secured by substantially all of the assets of B&L Supply and the other guarantors of the Notes; and

 

WHEREAS, Revolving Loan Agent, for itself and on behalf of the other Revolving Loan Secured Parties, and Notes Agent, for itself and on behalf of the other Notes Secured Parties, desire to enter into this Agreement to (i) confirm the relative priority of the security interests of Revolving Loan Agent and Notes Agent in the assets and properties of B&L Supply, (ii) provide for the orderly sharing among the Revolving Loan Secured Parties and the Notes Secured Parties, in accordance with such priorities, of proceeds of such assets and properties upon any foreclosure thereon or other disposition thereof and (iii) address related matters.

 

NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and obligations herein set forth and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

Section 1.               Definitions; Interpretation

 

1.1           Definitions.  As used in this Agreement, the following terms have the meanings specified below:

 

“Access and Use Rights” shall have the meaning set forth in Section 8.1 hereof.

 

  

  

  

 

“Agents” shall mean, collectively, Revolving Loan Agent and Notes Agent, sometimes being referred to herein individually as an “Agent”.

 

“Agreement” shall mean this Intercreditor Agreement, as the same now exists or may hereafter be amended, amended and restated, modified, supplemented, extended, renewed, restated or replaced from time to time in accordance with the terms hereof.

 

“B&L Supply” has the meaning given in the recitals hereto.

 

 “Bank Product Obligations” shall mean Cash Management Obligations and Hedging Obligations.

 

“Bankruptcy Code” shall mean the United States Bankruptcy Code, being Title 11 of the United States Code, as the same now exists or may from time to time hereafter be amended, modified, recodified or supplemented.

 

“Bankruptcy Law” shall mean the Bankruptcy Code and any similar Federal, state or foreign law for the relief of debtors.

 

“Business Day” shall mean any day other than a Saturday, a Sunday or a day that is a legal holiday under the laws of the State of New York or on which banking institutions in the State of New York are required or authorized by law or other governmental action to close.

 

“Cash Management Obligations” shall mean with respect to any Person, the obligations of such Person in connection with: (a) credit cards, debit cards or stored value cards or the processing of payments and other administrative services with respect to credit cards, debit cards or stored value cards and/or (b) cash management, deposit accounts or related services, including (i) the automated clearinghouse transfer of funds for the account of such Person pursuant to agreement or overdraft for any accounts of such Person, or (ii) controlled disbursement services.

 

“Collateral” shall mean all of the property and interests in property, real or personal, tangible or intangible, now owned or hereafter acquired by any Grantor in or upon which any Revolving Loan Secured Party or Notes Secured Party at any time has a Lien, and including, without limitation, all proceeds of such property and interests in property.

 

“Commitment” has the meaning as defined in the Revolving Loan Agreement at any time.

 

“Copyright Licenses” shall mean any and all agreements providing for the granting of any right in or to Copyrights (whether such Grantor is licensee or licensor thereunder).

 

“Copyrights” shall mean all United States, and foreign copyrights, including but not limited to copyrights in software and databases, and all Mask Works (as defined under 17 U.S.C. 901 of the U.S. Copyright Act), whether registered or unregistered, and, with respect to any and all of the foregoing: (i) all registrations and applications therefor, (ii) all extensions and renewals thereof, (iii) all rights corresponding thereto throughout the world, (iv) all rights to sue for past, present and future infringements thereof, and (v) all Proceeds of the foregoing, including, without limitation, licenses, royalties, income, payments, claims, damages and proceeds of suit.

 

“DIP Financing Cap Amount” shall mean an aggregate amount of $25,000,000.

 

  

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“Discharge of Revolving Loan Debt” shall mean, except to the extent otherwise expressly provided in Section 10.3, (a) the termination or expiration of the commitments of the Revolving Loan Lenders and the financing arrangements provided by Revolving Loan Agent and the other Revolving Loan Lenders to Grantors under the Revolving Loan Documents, (b) the payment in full in cash of the Revolving Loan Debt (other than the Revolving Loan Debt described in clause (c) of this definition and other than any obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities in respect of which no claim or demand for payment has been made at such time), and (c) the delivery to Revolving Loan Agent of cash collateral, or at Revolving Loan Agent’s option, the delivery to Revolving Loan Agent of a letter of credit payable to Revolving Loan Agent, in either case as required under the terms of the Revolving Loan Agreement, in respect of letters of credit issued under the Revolving Loan Documents or other Revolving Loan Debt, if any, for which the delivery of cash collateral or a letter of credit is required under the terms of the Revolving Loan Agreement.  If after receipt of any payment of, or proceeds of Collateral applied to the payment of, the Revolving Loan Debt, Revolving Loan Agent or any other Revolving Loan Secured Party is required to surrender or return such payment or proceeds to any person for any reason, then the Revolving Loan Debt intended to be satisfied by such payment or proceeds shall be reinstated and continue and this Agreement shall continue in full force and effect as if such payment or proceeds had not been received by such Revolving Loan Agent or other Revolving Loan Secured Party, as the case may be, and no Discharge of Revolving Loan Debt shall be deemed to have occurred.

 

“Discharge of Notes Debt” shall mean, except to the extent otherwise expressly provided in Section 10.3, either (a) EMC exercises its legal defeasance option or covenant defeasance option in accordance with the terms of the Indenture; or (b) the satisfaction and discharge of all Notes Debt in accordance with the Indenture including the final payment in full in cash of the Notes Debt (other than any obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities in respect of which no claim or demand for payment has been made at such time).  If after receipt of any payment of, or proceeds of Collateral applied to the payment of, the Notes Debt, Notes Agent or any other Notes Secured Party is required to surrender or return such payment or proceeds to any person for any reason, then the Notes Debt intended to be satisfied by such payment or proceeds shall be reinstated and continue and this Agreement shall continue in full force and effect as if such payment or proceeds had not been received by such Notes Agent or other Notes Secured Party, as the case may be, and no Discharge of Notes Debt shall be deemed to have occurred.

 

“Documents” shall mean collectively, the Revolving Loan Documents and the Notes Documents.

 

“EMC” means Edgen Murray Corporation, a Nevada corporation.

 

“Exigent Circumstance” shall mean an event or circumstance that materially and imminently threatens the ability of Revolving Loan Agent to realize upon all or a material portion of the Revolving Loan Priority Collateral, such as, without limitation, fraudulent removal, concealment, destruction (other than to the extent covered by insurance), material waste or abscondment thereof.

 

  

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“Grantors” shall mean, collectively, B&L Supply, each Guarantor and each Subsidiary of B&L Supply or any Guarantor that shall have granted a Lien on any of its assets to secure any Revolving Loan Debt, together with their respective successors and assigns; sometimes being referred to herein individually as a “Grantor”.

 

“Guarantors” shall mean, collectively, (a) any person that at any time after the date hereof becomes a party to a guarantee in favor of Revolving Loan Agent or the Revolving Credit Secured Parties in respect of any of the Revolving Loan Debt, and (b) their respective successors and assigns; sometimes being referred to herein individually as a “Guarantor”.

 

“Hedging Obligations” shall mean, with respect to any Person, the obligations of such Person under (a) an agreement relating to any swap, cap, floor, collar, option, forward, cross right or obligation, or combination thereof or similar transaction, with respect to interest rate, foreign exchange, currency, commodity, credit or equity risk, and (b) other agreements or arrangements designed to protect such Person against fluctuations in interest rates or the value of foreign currencies.

 

“Indenture” shall mean the Indenture, dated of even date herewith, by and among EMC, the guarantors of the Notes Debt party thereto and Notes Agent governing the Notes, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

 

“Insolvency or Liquidation Proceeding” shall mean (a) any voluntary or involuntary case or proceeding under any Bankruptcy Law with respect to any Grantor, (b) any other voluntary or involuntary insolvency, reorganization or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding with respect to any Grantor or with respect to any of their respective assets, (c) any proceeding seeking the appointment of any trustee, receiver, liquidator, custodian or other insolvency official with similar powers with respect to such Person or any or all of its assets or properties, (d) any liquidation, dissolution, reorganization or winding up of any Grantor whether voluntary or involuntary and whether or not involving insolvency or bankruptcy or (e) any assignment for the benefit of creditors or any other marshalling of assets and liabilities of any Grantor.

 

“Intellectual Property” shall mean, collectively, the Copyrights (as defined below), the Copyright Licenses (as defined below), the Patents (as defined below), the Patent Licenses (as defined below), the Trademarks (as defined below) and the Trademark License (as defined below).

 

“Lien” shall mean any mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, security interest, encumbrance (including, but not limited to, easements, rights of way and the like), lien (statutory or other), security agreement or transfer intended as security, including without limitation, any conditional sale or other title retention agreement, the interest of a lessor under a capital lease or any financing lease having substantially the same economic effect as any of the foregoing.

 

“Maximum Priority Revolving Loan Debt” shall mean, as of any date of determination, the greater of:

 

  

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(a)           the sum of:

 

(i)            $180,000,000, plus

 

(ii)           any interest (including default interest) on such amount (and including, without limitation, any interest which would accrue and become due but for the commencement of an Insolvency or Liquidation Proceeding, whether or not such amounts are allowed or allowable in whole or in part in such case or similar proceeding), plus

 

(iii)           any fees, costs, expenses and indemnities payable under any of the Revolving Loan Documents (and including, without limitation, any fees, costs, expenses and indemnities which would accrue and become due but for the commencement of an Insolvency or Liquidation Proceeding, whether or not such amounts are allowed or allowable in whole or in part in such case or similar proceeding), minus

 

(iv)           the aggregate amount of all permanent reductions of the Total Revolving Commitment under the Revolving Loan Agreement made from and after the date hereof; and

 

(b)           the Borrowing Base (as such term is defined in the Indenture) of the Grantors.

 

“Noteholders” shall mean, collectively, any person in whose name a Note is registered (and including any other holder, lender or group of lenders or holders that at any time refinances, replaces or succeeds to all or any portion of the Notes Debt or is otherwise party to the Notes Documents as a holder or lender); sometimes being referred to herein individually as a “Noteholder”.

 

“Notes” shall mean the 12.25% Senior Secured Notes due 2016 issued by EMC under the Indenture.

 

“Notes Agent” shall mean The Bank of New York Mellon Trust Company, N.A., and its successors and assigns in its capacity as agent pursuant to the Notes Documents acting for and on behalf of the other Notes Secured Parties and any successor or replacement agent.

 

 “Notes Cash Collateral” shall have the meaning set forth in Section 6.1(b) hereof.

 

 “Notes Debt” shall mean all “Obligations” as such term is defined in the Indenture, including, without limitation, obligations, liabilities and indebtedness of every kind, nature and description owing by any Grantor to any Notes Secured Party, including principal, interest, charges, fees, premiums, indemnities and expenses, however evidenced, whether as principal, surety, endorser, guarantor or otherwise, arising under any of the Notes Documents, whether now existing or hereafter arising, whether arising before, during or after the initial or any renewal term of the Notes Documents or after the commencement of any case with respect to any Grantor under the Bankruptcy Code or any other Bankruptcy Law or any other Insolvency or Liquidation Proceeding (and including, without limitation, any principal, interest, fees, costs, expenses and other amounts, which would accrue and become due but for the commencement of such case, whether or not such amounts are allowed or allowable in whole or in part in such case or similar proceeding), whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, secured or unsecured.

 

  

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“Notes DIP Financing” shall have the meaning set forth in Section 6.1(b) hereof.

 

“Notes Documents” shall mean, collectively, the Indenture and all agreements, documents and instruments at any time executed and/or delivered by any Grantor or any other person to, with or in favor of any Notes Secured Party in connection therewith or related thereto, as all of the foregoing now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated, refinanced, replaced or restructured (in whole or in part and including any agreements with, to or in favor of any other lender or group of lenders that at any time refinances, replaces or succeeds to all or any portion of the Notes Debt), in each case, in accordance with the terms of this Agreement.

 

“Notes Event of Default” shall mean any “Event of Default” as defined in the Indenture.

 

“Notes Priority Collateral” shall mean all of the Collateral other than the Revolving Loan Priority Collateral.

 

“Notes Secured Parties” shall mean, collectively, (a) Notes Agent, (b) the Noteholders, (c) each other person to whom any of the Notes Debt is owed and (d) the successors, replacements and assigns of each of the foregoing; sometimes being referred to herein individually as a “Notes Secured Party”.

 

“Patent Licenses” shall mean all agreements providing for the granting of any right in or to Patents (whether such Grantor is licensee or licensor thereunder).

 

“Patents” shall mean (i) all United States and foreign patents and certificates of invention, or similar industrial property rights, and applications for any of the foregoing, (ii) all reissues, divisions, continuations, continuations-in-part, extensions, renewals, and reexaminations thereof, (iii) all rights corresponding thereto throughout the world, (iv) all inventions and improvements described therein, (v) all rights to sue for past, present and future infringements thereof, (vi) all licenses, claims, damages, and proceeds of suit arising therefrom, and (vii) all Proceeds of the foregoing, including, without limitation, licenses, royalties, income, payments, claims, damages, and proceeds of suit.

 

“Person” or “person” shall mean any individual, sole proprietorship, partnership, corporation (including, without limitation, any corporation which elects subchapter S status under the Internal Revenue Code of 1986, as amended), limited liability company, limited liability partnership, business trust, unincorporated association, joint stock company, trust, joint venture, or other entity or any government or any agency or instrumentality or political subdivision thereof.

 

“Pledged Collateral” shall have the meaning set forth in Section 5.1 hereof.

 

“Proceeds” shall mean:  all “proceeds” as defined in Article 9 of the UCC, and in any event, shall include, without limitation whatever is receivable or received when Collateral or proceeds are sold, exchanged, collected or otherwise disposed of, whether such disposition is voluntary or involuntary.

 

“Purchasing Noteholders” shall have the meaning set forth in Section 7.3 hereof.

 

  

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“Recovery” shall have the meaning set forth in Section 6.11 hereof.

 

“Release Event” shall mean (a) prior to the occurrence of an Insolvency or Liquidation Proceeding by or against any Grantor, the occurrence and the continuance of a Revolving Loan Event of Default and the taking of any Revolving Loan Lien Enforcement Action with respect to the Revolving Loan Priority Collateral by Revolving Loan Agent; provided, that, any Release Event shall cease to constitute a Release Event as of the occurrence of any Insolvency or Liquidation Proceeding if Revolving Loan Agent continues making loans or providing letters of credit or other financial accommodations (whether pursuant to the Revolving Loan Agreement or otherwise) or consent to the use of cash collateral after the occurrence of such Insolvency or Liquidation Proceeding, or (b) after the occurrence of an Insolvency or Liquidation Proceeding by or against any Grantor, the occurrence of any of the following: (i) the entry of an order of any United States Bankruptcy Court pursuant to Section 363 or 1129 (or similar provisions) of the Bankruptcy Code or otherwise authorizing the sale of all or a material portion of the Revolving Loan Priority Collateral or (ii) the taking of any Revolving Loan Lien Enforcement Action by any Revolving Loan Secured Party or the entry of an order of any United States Bankruptcy Court pursuant to Section 362 (or similar provisions) of the Bankruptcy Code vacating the automatic stay and authorizing Revolving Loan Agent to take any Revolving Loan Lien Enforcement Action.

 

“Retained Revolving Loan Debt” shall have the meaning set forth in Section 7.3 hereof.

 

“Revolver DIP Financing” shall have the meaning set forth in Section 6.1 hereof.

 

“Revolving Loans” has the meaning as defined in the Revolving Loan Agreement at any time.

 

“Revolving Loan Agent” shall mean Regions Bank, and its successors and assigns in its capacity as agent pursuant to the Revolving Loan Documents acting for and on behalf of the other Revolving Loan Secured Parties and any successor or replacement agent.

 

“Revolving Loan Agreement” shall mean the Amended and Restated Credit Agreement, dated as of May 2, 2012, by and among Grantors, Revolving Loan Agent and Revolving Loan Lenders, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

 

“Revolving Loan Cash Collateral” shall have the meaning set forth in Section 6.1 hereof.

 

“Revolving Loan Debt” shall mean all “Obligations” as such term is defined in the Revolving Loan Agreement, including, without limitation, obligations, liabilities and indebtedness of every kind, nature and description owing by any Grantor to any Revolving Loan Secured Party, including principal, interest, Bank Product Obligations, charges, fees, premiums, indemnities and expenses, however evidenced, whether as principal, surety, endorser, guarantor or otherwise, arising under any of the Revolving Loan Documents, whether now existing or hereafter arising, whether arising before, during or after the initial or any renewal term of the Revolving Loan Documents or after the commencement of any case with respect to any Grantor under the Bankruptcy Code or any other Bankruptcy Law or any other Insolvency or Liquidation Proceeding (and including, without limitation, any principal, interest, fees, costs, expenses and other amounts which would accrue and become due but for the commencement of such case, whether or not such amounts are allowed or allowable in whole or in part in such case or similar proceeding), whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, secured or unsecured.

 

  

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“Revolving Loan Debt Purchase” shall have the meaning set forth in Section 7.3 hereof.

 

“Revolving Loan DIP Offer Period”  shall have the meaning set forth in Section 6.1(a) hereof.

 

“Revolving Loan Documents” shall mean, collectively, the Revolving Loan Agreement and all agreements, documents and instruments at any time executed and/or delivered by any Grantor or any other person to, with or in favor of any Revolving Loan Secured Party in connection therewith or related thereto, as all of the foregoing now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated, refinanced, replaced or restructured (in whole or in part and including any agreements with, to or in favor of any other lender or group of lenders that at any time refinances, replaces or succeeds to all or any portion of the Revolving Loan Debt), in each case, in accordance with the terms of this Agreement.

 

“Revolving Loan Event of Default” shall mean any “Event of Default” as defined in the Revolving Loan Agreement.

 

“Revolving Loan Lenders” shall mean, collectively, any person party to the Revolving Loan Documents as lender (and including any other lender or group of lenders that at any time refinances, replaces or succeeds to all or any portion of the Revolving Loan Debt or is otherwise party to the Revolving Loan Documents as a lender); sometimes being referred to herein individually as a “Revolving Loan Lender”.

 

“Revolving Loan Lien Enforcement Action” shall mean (a) any action by Revolving Loan Agent to foreclose on the Lien of Revolving Loan Agent in all or a material portion of the Revolving Loan Priority Collateral, (b) any action by Revolving Loan Agent to take possession of, sell or otherwise realize (judicially or non-judicially) upon all or any material portion of the Revolving Loan Priority Collateral (including, without limitation, by setoff or notification of account debtors), and/or (c) the commencement by Revolving Loan Agent of any legal proceedings against or with respect to all or any material portion of the Revolving Loan Priority Collateral to facilitate the actions described in (a) or (b) above.  For the purposes hereof, (i) any setoff or notification of account debtors to make payments to Revolving Loan Agent shall constitute a Revolving Loan Lien Enforcement Action if and only if such action is coupled with an action to take possession of all or a material portion of the Revolving Loan Priority Collateral or the commencement of any legal proceedings or actions against or with respect to B&L Supply or any Guarantor of all or a material portion of the Revolving Loan Priority Collateral and (ii) a material portion of the Revolving Loan Priority Collateral shall mean Revolving Loan Priority Collateral having a value in excess of $5,000,000.

 

“Revolving Loan Priority Collateral” shall mean all Collateral as more particularly set forth on Annex A annexed hereto.

 

  

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“Revolving Loan Purchase Amount” shall have the meaning set forth in Section 7.2 hereof.

 

“Revolving Loan Purchase Date” shall have the meaning set forth in Section 7.4(a) hereof.

 

“Revolving Loan Secured Parties” shall mean, collectively, (a) Revolving Loan Agent, (b) the Revolving Loan Lenders, (c) the issuing bank or banks of letters of credit or similar instruments under the Revolving Loan Agreement, (d) each other person to whom any of the Revolving Loan Debt (including Revolving Loan Debt constituting Bank Product Obligations) is owed and (e) the successors, replacements and assigns of each of the foregoing; sometimes being referred to herein individually as a “Revolving Loan Secured Party”.

 

“Revolving Loan Transferring Lenders” shall have the meaning set forth in Section 7.3 hereof.

 

“Secured Parties” shall mean, collectively, the Revolving Loan Secured Parties and the Notes Secured Parties; sometimes being referred to herein individually as a “Secured Party”.

 

“Subsidiary” shall mean any “Subsidiary” of B&L Supply as defined in the Revolving Loan Agreement.

 

 “Third Party Purchaser” shall have the meaning set forth in Section 8.1 hereof.

 

“Total Revolving Commitment” has the meaning as defined in the Revolving Loan Agreement at any time.

 

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

 

“Trademarks” shall mean all United States, and foreign trademarks, trade names, corporate names, company names, business names, fictitious business names, internet domain names, service marks, certification marks, collective marks, logos, other source or business identifiers, designs and general intangibles of a like nature, all registrations and applications for any of the foregoing including, but not limited to: (a) all extensions or renewals of any of the foregoing, (b) all of the goodwill of the business connected with the use of and symbolized by the foregoing, (c) the right to sue for past, present and future infringement or dilution of any of the foregoing or for any injury to goodwill, and (d) all Proceeds of the foregoing, including, without limitation, licenses, royalties, income, payments, claims, damages, and proceeds of suit.

 

“Triggering Event” shall mean (a) an acceleration of the maturity of all or any material portion of the Revolving Loan Debt, (b) the exercise of any Revolving Loan Lien Enforcement Action by the Revolving Loan Secured Parties, (c) if at any time when a Revolving Loan Event of Default exists and is continuing, Revolving Loan Lenders elect not to make any additional loans or advances or issue or cause to be issued letters of credit under the Revolving Loan Documents for a period of ten (10) days at a time when (i) there is Undrawn Availability to make such loans or advances or issue or cause to be issued letters of credit under the Revolving Loan Documents and (ii) such  loans or advances or  issuance of letters of credit under the Revolving Loan Documents would not cause the Revolving Loan Debt to exceed Maximum Priority Revolving Loan Debt, (d) the occurrence and continuation of a Revolving Loan Event of Default for a period of ninety (90) days (from written notice of same being provided by the Revolving Loan Agent to either Notes Agent or B&L Supply) without the subsequent or related taking of any of the actions set forth under clauses (a), (b) or (c) hereof, and (e) the commencement of an Insolvency or Liquidation Proceeding by or against any Grantor followed by the expiration of the Revolving Loan DIP Offer Period.

 

  

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“Undrawn Availability” has the meaning as defined in the Revolving Loan Agreement as in effect on the date hereof.

 

“Uniform Commercial Code” or “UCC” shall mean the Uniform Commercial Code as from time to time in effect in the State of New York.

 

1.2           Terms Generally.  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 or other document herein shall be construed as referring to such agreement, instrument or other document 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, and as to B&L Supply, any Guarantor or any other Grantor shall be deemed to include a receiver, trustee or debtor-in-possession on behalf of any of such person or on behalf of any such successor or assign, 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 Sections shall be construed to refer to Sections of this Agreement and v) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

Section 2.               Lien Priorities.

 

2.1           Acknowledgment of Liens.

 

(a)           Revolving Loan Agent, on behalf of itself and each Revolving Credit Secured Party, hereby acknowledges that Notes Agent, acting for and on behalf of itself and the Notes Secured Parties, has been granted Liens upon all of the Collateral pursuant to the Notes Documents to secure the Notes Debt.

 

(b)           Notes Agent, on behalf of itself and each Notes Secured Party, hereby acknowledges that Revolving Loan Agent, acting for and on behalf of itself and the Revolving Loan Secured Parties, has been granted Liens upon all of the Collateral pursuant to the Revolving Loan Documents to secure the Revolving Loan Debt.

 

  

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2.2           Relative Priorities.

 

(a)           Notwithstanding the date, manner or order of grant, attachment or perfection of any Liens granted to Revolving Loan Agent or the Revolving Loan Secured Parties or Notes Agent or the Notes Secured Parties and notwithstanding any provision of the UCC, or any applicable law or any provisions of the Revolving Loan Documents or the Notes Documents or any other circumstance whatsoever:

 

(i)            Notes Agent, for itself and on behalf of the other Notes Secured Parties, hereby agrees that any Lien on the Revolving Loan Priority Collateral securing the Revolving Loan Debt (other than the principal amount thereof that exceeds the Maximum Priority Revolving Loan Debt) now or hereafter held by or for the benefit or on behalf of any Revolving Loan Secured Party or any agent or trustee therefor shall be senior in right, priority, operation, effect and in all other respects to any Lien on the Revolving Loan Priority Collateral securing the Notes Debt now or hereafter held by or for the benefit or on behalf of any Notes Secured Party or any agent or trustee therefor; and (i) any Lien on the Revolving Loan Priority Collateral securing any of the Notes Debt now or hereafter held by or for the benefit or on behalf of any Notes Secured Party or any agent or trustee therefor regardless of how acquired, whether by grant, statute, operation of law, subrogation or otherwise, shall be junior and subordinate in all respects to all Liens on the Revolving Loan Priority Collateral securing any Revolving Loan Debt (other than the principal amount thereof that exceeds the Maximum Priority Revolving Loan Debt); and

 

(ii)           Revolving Loan Agent, for itself and on behalf of the other Revolving Loan Secured Parties, hereby agrees that any Lien on the Notes Priority Collateral securing the Notes Debt now or hereafter held by or for the benefit or on behalf of any Notes Secured Party or any agent or trustee therefor shall be senior in right, priority, operation, effect and in all other respects to any Lien on the Notes Priority Collateral securing the Revolving Loan Debt now or hereafter held by or for the benefit or on behalf of any Revolving Loan Secured Party or any agent or trustee therefor; and (ii) any Lien on the Notes Priority Collateral securing any of the Revolving Loan Debt now or hereafter held by or for the benefit or on behalf of any Revolving Loan Secured Party or any agent or trustee therefor regardless of how acquired, whether by grant, statute, operation of law, subrogation or otherwise, shall be junior and subordinate in all respects to all Liens on the Notes Priority Collateral securing any Notes Debt.

 

(b)           As between Revolving Loan Secured Parties and Notes Secured Parties, the terms of this Agreement, including the priorities set forth above, shall govern even if part or all of the Revolving Loan Debt or Notes Debt or the Liens securing payment and performance thereof are not perfected or are subordinated, avoided, disallowed, set aside or otherwise invalidated in any judicial proceeding or otherwise.

 

2.3           Prohibition on Contesting Liens.  Each of Revolving Loan Agent, for itself and on behalf of the other Revolving Loan Secured Parties, and Notes Agent, for itself and on behalf of the other Notes Secured Parties, agrees that it shall not (and hereby waives any right to) contest or support any other Person in contesting, in any proceeding (including any Insolvency or Liquidation Proceeding), the perfection, priority, validity or enforceability of a Lien held by or for the benefit or on behalf of any Revolving Loan Secured Party in any Collateral or by or on behalf of any Notes Secured Party in any Collateral, as the case may be; provided, that, nothing in this Agreement shall be construed to prevent or impair the rights of any Revolving Loan Secured Party or Notes Secured Party to enforce this Agreement.

 

  

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2.4           Similar Liens and Agreements.  The parties hereto agree that it is their intention that the Collateral securing the Notes Debt and the Revolving Loan Debt be identical.  In furtherance of the foregoing and of Section 10.8, the parties hereto agree, subject to the other provisions of this Agreement, upon request by the Revolving Loan Agent or the Notes Agent, to cooperate in good faith (and to direct their counsel to cooperate in good faith) from time to time in order to determine the specific items included in the Revolving Loan Priority Collateral and the Notes Priority Collateral and the steps taken to perfect their respective Liens thereon and the identity of the respective parties obligated under the Notes Documents and the Revolving Loan Documents.

 

Section 3.               Enforcement.

 

3.1           Exercise of Rights and Remedies.

 

(a)           Notes Agent, for itself and on behalf of the other Notes Secured Parties:

 

(i)            will not, so long as the Discharge of Revolving Loan Debt has not occurred, enforce or exercise, or seek to enforce or exercise, any rights or remedies (including any right of setoff or notification of account debtors) with respect to any Revolving Loan Priority Collateral (including the enforcement of any right under any lockbox agreement, account control agreement, landlord waiver or bailee’s letter or any similar agreement or arrangement to which Notes Agent or any other Notes Secured Party is a party) or commence or join with any Person (other than Revolving Loan Agent with its consent) in commencing, or filing a petition for, any action or proceeding with respect to such rights or remedies (except, that, Notes Agent or any other Notes Secured Party may commence or join with any Person in commencing, or filing, a petition for any Insolvency or Liquidation Proceeding; provided, that, Notes Agent provides Revolving Loan Agent not less than fifteen (15) days prior written notice of Notes Agent’s or any other Notes Secured Party’s intent to commence or join with any Person in commencing, or filing, such Insolvency or Liquidation Proceeding);

 

(ii)            will not contest, protest or object to any foreclosure action or proceeding brought by Revolving Loan Agent or any other Revolving Loan Secured Party, or any other enforcement or exercise by any Revolving Loan Secured Party of any rights or remedies relating solely to the Revolving Loan Priority Collateral under the Revolving Loan Documents or otherwise, so long as the Liens of Notes Agent attach to the proceeds thereof subject to the relative priorities set forth in Section 2.1 and such actions or proceedings are being pursued in good faith;

 

(iii)           will not object to the forbearance by Revolving Loan Agent or the other Revolving Loan Secured Parties from commencing or pursuing any foreclosure action or proceeding or any other enforcement or exercise of any rights or remedies with respect to any of the Revolving Loan Priority Collateral;

 

  

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(iv)           will not, so long as the Discharge of Revolving Loan Debt has not occurred, take or receive any Revolving Loan Priority Collateral, or any proceeds thereof or payment with respect thereto, in connection with the exercise of any right or remedy (including any right of setoff) with respect to any Revolving Loan Priority Collateral; it being understood and agreed that payments made by B&L Supply in respect of the Notes Debt with proceeds of loans or advances under the Revolving Loan Documents shall not constitute a breach of this Section 3.1(a)(iv);

 

(v)            agrees that no covenant, agreement or restriction contained in any Notes Document shall be deemed to restrict in any way the rights and remedies of Revolving Loan Agent or the other Revolving Loan Secured Parties with respect to the Revolving Loan Priority Collateral as set forth in this Agreement and the Revolving Loan Documents;

 

(vi)           will not object to the manner in which Revolving Loan Agent or any other Revolving Loan Secured Party may seek to enforce or collect the Revolving Loan Debt or the Liens of such Revolving Loan Secured Party with respect to the Revolving Loan Priority Collateral, regardless of whether any action or failure to act by or on behalf of Revolving Loan Agent or any other Revolving Loan Secured Party is, or could be, adverse to the interests of the Notes Secured Parties, and will not assert, and hereby waive, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or claim the benefit of any marshalling, appraisal, valuation or other similar right that may be available under applicable law with respect to the Revolving Loan Priority Collateral or any other rights a junior secured creditor may have under applicable law with respect to the matters described in this clause (vi); provided, that, at all times Revolving Loan Agent is acting in good faith; and

 

(vii)          will not attempt, directly or indirectly, whether by judicial proceeding or otherwise, to challenge or question the validity or enforceability of any Revolving Loan Debt or any Lien of Revolving Loan Agent or this Agreement, or the validity or enforceability of the priorities, rights or obligations established by this Agreement.

 

(b)           Revolving Loan Agent, for itself and on behalf of the other Revolving Loan Secured Parties:

 

(i)             will not, so long as the Discharge of Notes Debt has not occurred, enforce or exercise, or seek to enforce or exercise, any rights or remedies with respect to any Notes Priority Collateral or commence or join with any Person (other than Notes Agent with its consent) in commencing, or filing a petition for, any action or proceeding with respect to such rights or remedies (except, that, Revolving Loan Agent or any other Revolving Loan Secured Party may commence or join with any Person in commencing, or filing, a petition for any Insolvency or Liquidation Proceeding; provided, that, Revolving Loan Agent provides Notes Agent not less than fifteen (15) days prior written notice of Revolving Loan Agent’s or any other Revolving Loan Secured Party’s intent to commence or join with any Person in commencing, or filing, such Insolvency or Liquidation Proceeding);

 

(ii)            will not contest, protest or object to any foreclosure action or proceeding brought by Notes Agent or any other Notes Secured Party, or any other enforcement or exercise by any Notes Secured Party of any rights or remedies relating solely to the Notes Priority Collateral under the Notes Documents or otherwise, so long as the Liens of Revolving Loan Agent attach to the proceeds thereof subject to the relative priorities set forth in Section 2.1 and such actions or proceedings are being pursued in good faith;

 

  

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(iii)           will not object to the forbearance by Notes Agent or the other Notes Secured Parties from commencing or pursuing any foreclosure action or proceeding or any other enforcement or exercise of any rights or remedies with respect to any of the Notes Priority Collateral;

 

(iv)           will not, so long as the Discharge of Notes Debt has not occurred, take or receive any Notes Priority Collateral, or any proceeds thereof or payment with respect thereto, in connection with the exercise of any right or remedy (including any right of setoff) with respect to any Notes Priority Collateral or in connection with any insurance policy award or any condemnation award (or deed in lieu of condemnation);

 

(v)            agrees that no covenant, agreement or restriction contained in any Revolving Loan Document shall be deemed to restrict in any way the rights and remedies of Notes Agent or the other Notes Secured Parties with respect to the Collateral as set forth in this Agreement and the Notes Documents;

 

(vi)           will not object to the manner in which Notes Agent or any other Notes Secured Party may seek to enforce or collect the Notes Debt or the Liens of such Notes Secured Party with respect to the Notes Priority Collateral, regardless of whether any action or failure to act by or on behalf of Notes Agent or any other Notes Secured Party is, or could be, adverse to the interests of the Revolving Loan Secured Parties, and will not assert, and hereby waive, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or claim the benefit of any marshalling, appraisal, valuation or other similar right that may be available under applicable law with respect to the Notes Priority Collateral or any other rights a junior secured creditor may have under applicable law with respect to the matters described in this clause (vi); provided, that, at all times Notes Agent is acting in good faith; and

 

(vii)          will not attempt, directly or indirectly, whether by judicial proceeding or otherwise, to challenge or question the validity or enforceability of any Notes Debt or any Lien of Notes Agent or this Agreement, or the validity or enforceability of the priorities, rights or obligations established by this Agreement.

 

(c)           Notwithstanding the foregoing clauses (a) and (b), each of the Notes Agent and the Revolving Loan Agent may:

 

(i)             file a claim or statement of interest with respect to the Revolving Loan Debt or Notes Debt, as the case may be; provided that an Insolvency or Liquidation Proceeding has been commenced by or against B&L Supply or any other Grantor;

 

(ii)            take any action in order to create, perfect, preserve or protect (but not enforce) its Lien on any of the Collateral;

 

(iii)           file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any Person objecting to or otherwise seeking the disallowance of the claims of the Revolving Loan Secured Parties or Notes Secured Parties represented by it, including any claims secured by the Collateral, if any, or otherwise make any agreements or file any motions or objections pertaining to the claims of such Secured Parties, in each case in accordance with the terms of this Agreement;

 

  

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(iv)           file any pleadings, objections, motions or agreements which assert rights or interests that are available to unsecured creditors of the Grantors including, without limitation, the commencement of an Insolvency or Liquidation Proceeding against B&L Supply or any other Grantor, in each case, in accordance with applicable law and in a manner not inconsistent with the terms of this Agreement; and

 

(v)           vote on any plan of reorganization, file any proof of claim, make other filings and make any arguments and motions that are, in each case, in accordance with the terms of this Agreement.

 

3.2           Rights As Unsecured Creditors.  To the extent not expressly inconsistent with the terms hereof, either Agent and the Secured Parties on whose behalf such Agent acts, may exercise rights and remedies as an unsecured creditor against any Grantor in accordance with the terms of their respective Documents and applicable law.  For purposes hereof, the rights of an unsecured creditor do not include a creditor that holds a judgment lien.  Nothing in this Agreement shall prohibit the receipt by either Agent or any of the other Secured Parties of payments of interest and principal so long as such receipt is not the direct or indirect result of the exercise by such Agent or any other Secured Party of foreclosure rights or other remedies as a secured creditor or enforcement in contravention of this Agreement of any Lien held by any of them or any other act in contravention of this Agreement.

 

3.3           Release of Second Priority Liens.

 

(a)           Subject to the provisions of Section 3.3(c) below, upon the sale, transfer or other disposition of any Collateral as directed by or with the consent of the Agent with the senior Lien in such Collateral in accordance with Section 2.2, the Agent with the junior Lien on any Collateral shall:

 

(i)             be deemed to have automatically and without further action released and terminated any Liens it may have on such Collateral; provided, that, the Liens of the Agent with such senior Lien on the Collateral so sold or disposed of are released at the same time, and provided further, that such junior Lien shall remain in place with respect to any proceeds of such sale, transfer or other disposition under this clause (a)(i) that remain after the Discharge of Revolving Loan Debt (in the case of Revolving Loan Priority Collateral) or the Discharge of Notes Debt (in the case of Notes Priority Collateral);

 

(ii)            be deemed to have authorized the Agent with the senior Lien on such Collateral to file UCC amendments and terminations covering the Collateral so sold or otherwise disposed of with respect to the UCC financing statements between any Grantor and the Agent with the junior Lien thereon to evidence such release and termination; and

 

  

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(iii)           promptly upon the request of the Agent with the senior Lien thereon, execute and deliver such other release documents and confirmations of the authorization to file UCC amendments and terminations provided for herein, in each case as the Agent with the senior Lien thereon may require in connection with such sale or other disposition by such Agent, such Agent’s agents or any Grantor with the consent of such Agent to evidence and effectuate such termination and release; provided, that, any such release or UCC amendment or termination by or on behalf of the Agent with the junior Lien thereon shall not extend to or otherwise affect any of the rights, if any, of such Agent with the junior Lien to the proceeds from any such sale or other disposition of Collateral upon the Discharge of Revolving Loan Debt or Discharge of Notes Debt, as the case may be, whichever is secured by the senior Lien on such Collateral.

 

(b)           Each Agent, for itself and on behalf of the other Secured Parties for whom such Agent is acting, hereby irrevocably constitutes and appoints the other Agent and any officer or agent of such Agent, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Agent with the junior Lien or such holder or in the Agent’s own name, from time to time in such Agent’s (holding the senior Lien) discretion, for the purpose of carrying out the terms of this Section 3.3, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Section 3.3, including any termination statements, endorsements or other instruments of transfer or release.  Nothing contained in this Agreement shall be construed to modify the obligation of the Agent with the senior Lien to act in a commercially reasonable manner in the exercise of its rights to sell, lease, license, exchange, transfer or otherwise dispose of any Collateral.

 

(c)           Notwithstanding anything to the contrary contained in Section 3.3(a), the Lien of Notes Agent shall not be automatically released, and Notes Agent’s consent shall be required, in connection with the sale or disposition of any Revolving Loan Priority Collateral that is not either (i) permitted by the terms of the Notes Documents, (ii) made in connection with a Release Event or (iii) made in connection with a Revolving Loan Lien Enforcement Action.

 

3.4           Insurance and Condemnation Awards.

 

(a)           So long as the Discharge of Revolving Loan Debt has not occurred, Revolving Loan Agent and the other Revolving Loan Secured Parties shall have the sole and exclusive right, subject to the rights of Grantors under the Revolving Loan Documents, to settle and adjust claims in respect of the Revolving Loan Priority Collateral under policies of insurance and to approve any award granted in any condemnation or similar proceeding, or any deed in lieu of condemnation in respect of the Revolving Loan Priority Collateral.  So long as the Discharge of Revolving Loan Debt has not occurred, all proceeds of any such policy and any such award, or any payments with respect to a deed in lieu of condemnation, shall (2) first, be paid to Revolving Loan Agent for the benefit of the Revolving Loan Secured Parties to the extent required under the Revolving Loan Documents in an aggregate amount not to exceed the Maximum Priority Revolving Loan Debt, (3) second, be paid to Notes Agent for the benefit of the Notes Secured Parties to the extent required under the applicable Notes Documents, (4) third, if no Notes Debt is outstanding, be paid to Revolving Loan Agent for the benefit of Revolving Loan Secured Parties for application to any unpaid Revolving Loan Debt in excess of the Maximum Priority Revolving Loan Debt, and (5) fourth, if no Revolving Loan Debt is outstanding, be paid to the owner of the subject property or as a court of competent jurisdiction may otherwise direct or may otherwise be required by applicable law.  Until the Discharge of Revolving Loan Debt, if Notes Agent or any other Notes Secured Party shall, at any time, receive any proceeds of any such insurance policy or any such award or payment, it shall pay such proceeds over to Revolving Loan Agent in accordance with the terms of Section 4.2.

 

  

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(b)           So long as the Discharge of Notes Debt has not occurred, Notes Agent and the other Notes Secured Parties shall have the sole and exclusive right, subject to the rights of Grantors under the Notes Documents, to settle and adjust claims in respect of the Notes Priority Collateral under policies of insurance and to approve any award granted in any condemnation or similar proceeding, or any deed in lieu of condemnation in respect of the Notes Priority Collateral.  So long as the Discharge of Notes Debt has not occurred, all proceeds of any such policy and any such award, or any payments with respect to a deed in lieu of condemnation, shall (6) first, be paid to Notes Agent for the benefit of the Notes Secured Parties to the extent required under the applicable Notes Documents, (7) second, be paid to Revolving Loan Agent for the benefit of the Revolving Loan Secured Parties to the extent required under the Revolving Loan Documents, and (8) third, if no Revolving Loan Debt is outstanding, be paid to the owner of the subject property or as a court of competent jurisdiction may otherwise direct or may otherwise be required by applicable law.  Until the Discharge of Notes Debt, if Revolving Loan Agent or any other Revolving Loan Secured Party shall, at any time, receive any proceeds of any such insurance policy or any such award or payment, it shall pay such proceeds over to Notes Agent in accordance with the terms of Section 4.2.

 

Section 4.               Payments.

 

4.1           Application of Proceeds.

 

(a)           So long as the Discharge of Revolving Loan Debt has not occurred, the Revolving Loan Priority Collateral or proceeds thereof received in connection with the sale or other disposition of, or collection on, such Revolving Loan Priority Collateral (including, without limitation, in connection with any Release Event), shall be applied in the following order of priority:

 

(i)             first, to the Revolving Loan Debt (other than the principal amount thereof in excess of the Maximum Priority Revolving Loan Debt) and for cash collateral as required under the Revolving Loan Documents, and in such order as specified in the applicable Revolving Loan Documents until the Discharge of Revolving Loan Debt (other than the principal amount thereof in excess of the Maximum Priority Revolving Loan Debt) has occurred;

 

(ii)            second, to the Notes Debt in such order as specified in the applicable Notes Documents until the Discharge of Notes Debt  has occurred; and

 

(iii)           third, to the principal amount of the Revolving Loan Debt in excess of the Maximum Priority Revolving Loan Debt until the Discharge of Revolving Loan Debt has occurred.

 

  

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(b)           So long as the Discharge of Notes Debt has not occurred, the Notes Priority Collateral or proceeds thereof received in connection with the sale or other disposition of, or collection on, such Notes Priority Collateral (including, without limitation, in connection with any Release Event), shall be applied in the following order of priority:

 

(i)            first, to the Notes Debt and for cash collateral as required under the Notes Documents, and in such order as specified in the applicable Notes Documents until the Discharge of Notes Debt has occurred; and

 

(ii)            second, to the Revolving Loan Debt in such order as specified in the applicable Revolving Loan Documents until the Discharge of Revolving Loan Debt has occurred. 

 

(c)           To the extent permitted under applicable law and without risk of legal liability to Revolving Loan Agent or any other Revolving Loan Secured Party, if at any time Revolving Loan Agent does not have a first priority Lien upon any Collateral under Section 2.2 hereof, Revolving Loan Agent shall deliver to Notes Agent, without representation or recourse, any proceeds of Collateral held by it at such time in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct, to be applied by Notes Agent to the Notes Debt in such order as specified in the relevant Notes Documents.  To the extent permitted under applicable law and without risk of legal liability to Notes Agent or any other Notes Secured Party, if at any time Notes Agent does not have a first priority Lien upon any Collateral under Section 2.2 hereof, Notes Agent shall deliver to Revolving Loan Agent, without representation or recourse, any proceeds of Collateral held by it at such time in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct, to be applied by Revolving Loan Agent to the Revolving Loan Debt in such order as specified in the relevant Revolving Loan Documents.  The provisions of this Section 4.1 are intended solely to govern the respective Lien priorities as between Notes Agent and Revolving Loan Agent and shall not impose on any Agent or any other Secured Party any obligations in respect of the disposition of proceeds of foreclosure on any Collateral which would conflict with prior perfected claims therein in favor of any other person or any order or decree of any court or other governmental authority or any applicable law.

 

4.2           Payments Over.

 

(a)           So long as the Discharge of Revolving Loan Debt has not occurred (other than the principal amount thereof in excess of the Maximum Priority Revolving Loan Debt), whether or not any Insolvency or Liquidation Proceeding has been commenced by or against any Grantor, Notes Agent agrees, for itself and on behalf of the other Notes Secured Parties, that any Revolving Loan Priority Collateral or proceeds thereof or payment with respect thereto received by Notes Agent or any other Notes Secured Party (including any right of set-off) with respect to the Revolving Loan Priority Collateral, and including in connection with any insurance policy claim or any condemnation award (or deed in lieu of condemnation), shall be segregated and held in trust and promptly transferred or paid over to Revolving Loan Agent for the benefit of the Revolving Loan Secured Parties in the same form as received, with any necessary endorsements or assignments or as a court of competent jurisdiction may otherwise direct.  Revolving Loan Agent is hereby authorized to make any such endorsements or assignments as agent for Notes Agent.  This authorization is coupled with an interest and is irrevocable.  Any payments made by B&L Supply in respect of the Notes Debt with proceeds of loans or advances under the Revolving Loan Documents shall not be required to be transferred or paid over to Revolving Loan Agent for the benefit of the Revolving Loan Secured Parties.

 

  

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(b)           So long as the Discharge of Notes Debt has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against any Grantor, Revolving Loan Agent agrees, for itself and on behalf of the other Revolving Loan Secured Parties, that any Notes Priority Collateral or proceeds thereof or payment with respect thereto received by Revolving Loan Agent or any other Revolving Loan Secured Party (including any right of set-off) with respect to the Notes Priority Collateral, and including in connection with any insurance policy claim or any condemnation award (or deed in lieu of condemnation), shall be segregated and held in trust and promptly transferred or paid over to Notes Agent for the benefit of the Notes Secured Parties in the same form as received, with any necessary endorsements or assignments or as a court of competent jurisdiction may otherwise direct. Notes Agent is hereby authorized to make any such endorsements or assignments as agent for Revolving Loan Agent.  This authorization is coupled with an interest and is irrevocable.

 

Section 5.               Bailee for Perfection.

 

5.1           Each Agent as Bailee.

 

(a)           Each Agent agrees to hold any Collateral that is in the possession or control of such Agent (or its agents or bailees), to the extent that possession or control thereof is necessary to perfect a Lien thereon under the Uniform Commercial Code (such Collateral being referred to herein as the “Pledged Collateral”), as bailee and agent for and on behalf of the other Agent solely for the purpose of perfecting the Lien granted to the other Agent in such Pledged Collateral (including, but not limited to, any securities or any deposit accounts or securities accounts, if any) pursuant to the Revolving Loan Documents or Notes Documents, as applicable, subject to the terms and conditions of this Section 5.

 

(b)           Until the Discharge of Revolving Loan Debt has occurred, Revolving Loan Agent shall be entitled to deal with the Pledged Collateral constituting Revolving Loan Priority Collateral in accordance with the terms of the Revolving Loan Documents. The rights of Notes Agent to such Pledged Collateral shall at all times be subject to the terms of this Agreement and to Revolving Loan Agent’s rights under the Revolving Loan Documents.  Until the Discharge of Notes Debt has occurred, Notes Agent shall be entitled to deal with the Pledged Collateral constituting Notes Priority Collateral in accordance with the terms of the Notes Documents.  The rights of Revolving Loan Agent to such Pledged Collateral shall at all times be subject to the terms of this Agreement and to Notes Agent’s rights under the Notes Documents.

 

(c)           Each Agent shall have no obligation whatsoever to the other Agent or any other Secured Party to assure that the Pledged Collateral is genuine or owned by any of the Grantors or to preserve rights or benefits of any Person except as expressly set forth in this Section 5. The duties or responsibilities of each Agent under this Section 5 shall be limited solely to holding the Pledged Collateral as bailee and agent for and on behalf of the other Agent for purposes of perfecting the Lien held by the other Agent.

 

  

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(d)           Each Agent shall not have by reason of the Revolving Loan Documents, the Notes Documents or this Agreement or any other document a fiduciary relationship in respect of the other Agent or any of the other Secured Parties and shall not have any liability to the other Agent or any other Secured Party in connection with its holding the Pledged Collateral, other than as expressly provided for herein and other than for its gross negligence or willful misconduct as determined by a final, non-appealable order of a court of competent jurisdiction.

 

5.2           Transfer of Pledged Collateral.

 

(a)           Upon the Discharge of Revolving Loan Debt, to the extent permitted under applicable law, upon the request of Notes Agent, Revolving Loan Agent shall, without recourse or warranty, transfer the possession and control of the Pledged Collateral, if any, then in its possession or control to Notes Agent, except in the event and to the extent (9) Revolving Loan Agent or any other Revolving Loan Secured Party has retained or otherwise acquired such Collateral in full or partial satisfaction of any of the Revolving Loan Debt, (10) such Collateral is sold or otherwise disposed of by Revolving Loan Agent or any other Revolving Loan Secured Party or by a Grantor as provided herein or (11) it is otherwise required by any order of any court or other governmental authority or applicable law or would result in the risk of liability of Revolving Loan Secured Party to any third party. The foregoing provision shall not impose on Revolving Loan Agent or any other Revolving Loan Secured Party any obligations which would conflict with prior perfected claims therein in favor of any other person or any order or decree of any court or other governmental authority or any applicable law.  In connection with any transfer described herein to Notes Agent, Revolving Loan Agent agrees to take reasonable actions in its power (with all costs and expenses in connection therewith to be for the account of Notes Agent and to be paid by B&L Supply) as shall be reasonably requested by Notes Agent to permit Notes Agent to obtain, for the benefit of the Notes Secured Parties, a first priority security interest in the Pledged Collateral.

 

(b)           Upon the Discharge of Notes Debt, to the extent permitted under applicable law, upon the request of Revolving Loan Agent, Notes Agent shall, without recourse or warranty, transfer the possession and control of the Pledged Collateral, if any, then in its possession or control to Revolving Loan Agent, except in the event and to the extent (12) Notes Agent or any other Notes Secured Party has retained or otherwise acquired such Collateral in full or partial satisfaction of any of the Notes Debt, (13) such Collateral is sold or otherwise disposed of by Notes Agent or any other Notes Secured Party or by a Grantor as provided herein or (14) it is otherwise required by any order of any court or other governmental authority or applicable law or would result in the risk of liability of Notes Secured Party to any third party. The foregoing provision shall not impose on Notes Agent or any other Notes Secured Party any obligations which would conflict with prior perfected claims therein in favor of any other person or any order or decree of any court or other governmental authority or any applicable law.  In connection with any transfer described herein to Revolving Loan Agent, Notes Agent agrees to take reasonable actions in its power (with all costs and expenses in connection therewith to be for the account of Revolving Loan Agent and to be paid by B&L Supply) as shall be reasonably requested by Revolving Loan Agent to permit Revolving Loan Agent to obtain, for the benefit of the Revolving Loan Secured Parties, a first priority security interest in the Pledged Collateral.

 

  

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5.3           Deposit Accounts.  In the case of any deposit accounts subject to Deposit Account Control Agreements (as such term is defined in the Revolving Loan Documents), after the occurrence of the Discharge of the Revolving Loan Debt, and to the extent that the Notes Debt remains outstanding, Revolving Loan Agent agrees, at the request of Notes Agent and at the expense of Grantors, to, with respect to deposit accounts, promptly deliver written notice to the bank at which deposit accounts are maintained that vi) such account(s) remain subject to a Lien in favor of Notes Agent and Revolving Loan Agent is no longer the “Agent” or “Lender Representative” (as the case may be) or otherwise entitled to act under such agreement, and vii) from the date of such notice and at all times thereafter until the Discharge of Notes Debt or Notes Agent instructs the bank at which the deposit account is maintained otherwise, that Notes Agent is to be deemed the “Agent” for all purposes in connection with such agreement and that the bank is to follow the directions of Notes Agent for all purposes in connection with such deposit accounts.

 

Section 6.               Insolvency or Liquidation Proceedings

 

6.1           Post Petition Financing; Cash Collateral.

 

(a)           Following the commencement of any Insolvency or Liquidation Proceeding of any Grantor, if such Grantor as debtor-in-possession (or a trustee appointed on behalf of such Grantor) shall move for either (1) within the first ten (10) Business Days following such commencement (the “Revolving Loan DIP Offer Period”), approval of financing (“Revolver DIP Financing”) to be provided by any Revolving Loan Secured Party under Section 364 of the Bankruptcy Code or (2) at any time, the use of cash collateral proceeds of the Revolving Loan Priority Collateral (the “Revolving Loan Cash Collateral”) with the consent of the Revolving Loan Agent under Section 363 of the Bankruptcy Code, the Notes Secured Parties agree as follows: (a) such Revolver DIP Financing (including any Revolving Loan Debt which arose prior to the Insolvency or Liquidation Proceeding) may be secured by Liens on all or a part of the assets of the Grantors which may be superior in priority to the Liens on the assets of the Grantors held by any other Person (so long as any such Lien for the Revolver DIP Financing secured by the Notes Priority Collateral is subordinate to the Lien of Notes Agent on the Notes Priority Collateral securing any Notes Debt), and (b) the Notes Secured Parties shall not contest or oppose in any manner such Revolver DIP Financing or Revolving Loan Cash Collateral use and shall be deemed to have waived any objections to such financing or cash collateral use, including by any objection alleging Grantors’ failure to provide “adequate protection” for the Liens of the Notes Secured Parties or otherwise, as long as (i) the Notes Secured Parties retain a Lien on the Collateral (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 (junior in priority to the Liens securing such Revolver DIP Financing and the existing Liens in favor of the Revolving Loan Secured Parties on the Revolving Loan Priority Collateral but senior to the Liens of the Revolving Loan Secured Parties on the Notes Priority Collateral to the same extent as provided under Section 2.2), (ii) the Notes Secured Parties receive a replacement Lien on post-petition assets, with the same priority as existed prior to the commencement of the case under the Bankruptcy Code (junior in priority to the Liens securing such Revolver DIP Financing, the existing Liens in favor of the Revolving Loan Secured Parties on the Revolving Loan Priority Collateral and any replacement Liens granted to the Revolving Loan Secured Parties, in each case, with respect to the Revolving Loan Priority Collateral, but senior to the Lien of Revolving Loan Secured Parties on the Notes Priority Collateral to the extent under Section 2.2); provided, that, the inability of the Notes Secured Parties to receive a Lien on actions under Chapter 5 of the Bankruptcy Code or proceeds thereof shall not affect the agreements and waivers set forth in this clause (2)), (iii) the aggregate principal amount of loans and face amount of extant letter of credit obligations outstanding under such Revolver DIP Financing, together with the outstanding Revolving Loan Debt, shall not exceed the Maximum Priority Revolving Loan Debt plus the DIP Financing Cap Amount, (iv) such Revolver DIP Financing or use of Revolving Loan Cash Collateral is subject to the terms of this Agreement, (v) the interest rate, fees, advance rates and sublimits of any such Revolver DIP Financing are commercially reasonable under the circumstances and (vi) the documentation and court orders governing the use of Revolving Loan Cash Collateral or Revolver DIP Financing do not expressly require the liquidation and/or sale of all or a material portion of the Revolving Loan Priority Collateral.

 

  

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(b)           Following the commencement of any Insolvency or Liquidation Proceeding of any Grantor, if, from and after the termination of the Revolving Loan DIP Offer Period (if no final documentation of any Revolver DIP Financing has been executed and become effective prior to that date), such Grantor as debtor-in-possession (or a trustee appointed on behalf of such Grantor) moves for either (3) approval of financing (“Notes DIP Financing”) to be provided by any Notes Secured Party under Section 364 of the Bankruptcy Code or (4) the use of cash collateral proceeds of the Notes Priority Collateral (the “Notes Cash Collateral”) with the consent of the Notes Agent under Section 363 of the Bankruptcy Code, the Revolving Loan Secured Parties agree as follows: (a) such Notes DIP Financing (including any Notes Debt which arose prior to the Insolvency or Liquidation Proceeding) may be secured by Liens on all or a part of the assets of the Grantors which may be superior in priority to the Liens on the assets of the Grantors held by any other Person (so long as any such Lien for the Notes DIP Financing secured by the Revolving Loan Priority Collateral is subordinate to the Lien of Revolving Loan Agent on the Revolving Loan Priority Collateral securing any Revolving Loan Debt (other than the principal amount thereof that exceeds the Maximum Priority Revolving Loan Debt)), and (b) the Revolving Loan Secured Parties shall not contest or oppose in any manner such Notes DIP Financing or Notes Cash Collateral use and shall be deemed to have waived any objections to such financing or cash collateral use, including by any objection alleging Grantors’ failure to provide “adequate protection” for the Liens of the Revolving Loan Secured Parties or otherwise, as long as (i) the Revolving Loan Secured Parties retain a Lien on the Collateral (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 (junior in priority to the Liens securing such Notes DIP Financing and the existing Liens in favor of the Notes Secured Parties on the Notes Priority Collateral but senior to the Liens of the Revolving Loan Secured Parties on the Revolving Loan Priority Collateral to the same extent as provided under Section 2.2), (ii) the Revolving Loan Secured Parties receive a replacement Lien on post-petition assets, with the same priority as existed prior to the commencement of the case under the Bankruptcy Code (junior in priority to the Liens securing such Notes DIP Financing, the existing Liens in favor of the Notes Secured Parties on the Notes Priority Collateral and any replacement Liens granted to the Notes Secured Parties, in each case, with respect to the Notes Priority Collateral, but senior to the Lien of Notes Secured Parties on the Revolving Loan Priority Collateral to the extent under Section 2.2); provided, that, the inability of the Revolving Loan Secured Parties to receive a Lien on actions under Chapter 5 of the Bankruptcy Code or proceeds thereof shall not affect the agreements and waivers set forth in this clause (2)), (iii) such Notes DIP Financing or use of Notes Cash Collateral is subject to the terms of this Agreement, (iv) the interest rate, fees, advance rates and sublimits of any such Notes DIP Financing are commercially reasonable under the circumstances and (v) the documentation and court orders governing the use of Notes Cash Collateral or Notes DIP Financing do not expressly require the liquidation and/or sale of all or a material portion of the Notes Priority Collateral.

 

  

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6.2           Adequate Protection.  The Notes Secured Parties may seek adequate protection of their interests in the Notes Priority Collateral in the form of a Lien on such additional or replacement collateral, which Lien, if granted, will be senior or subordinate to the Liens securing the Revolving Loan Debt on the same basis as the other Liens securing the Notes Debt are so senior or subordinated under this Agreement (provided, that, any failure of the Notes Secured Parties to obtain such adequate protection shall not impair or otherwise affect the agreements, undertakings and consents of the Notes Secured Parties pursuant to Section 6.1(a)).  The Revolving Loan Secured Parties may seek adequate protection of their interests in the Revolving Loan Priority Collateral in the form of a Lien on such additional or replacement collateral, which Lien, if granted, will be senior or subordinate to the Liens securing the Notes Debt on the same basis as the other Liens securing the Revolving Loan Debt are so senior or subordinated under this Agreement (provided, that, any failure of the Revolving Loan Secured Parties to obtain such adequate protection shall not impair or otherwise affect the agreements, undertakings and consents of the Revolving Loan Secured Parties pursuant to Section 6.1(b)).  In the event any Notes Secured Party seeks or requests such adequate protection in respect of Liens on Revolving Loan Priority Collateral securing Notes Debt, then viii) such adequate protection shall be limited to a Lien on additional or replacement Collateral, and ix) the Revolving Loan Secured Parties may seek and obtain, and each Notes Secured Party hereby consents to the granting of, a Lien on such additional or replacement Collateral as security for the Revolving Loan Debt and such Lien securing Revolving Loan Debt shall be senior in priority to the Notes Secured Parties’ Lien on the same basis as the other Liens securing the Revolving Loan Debt are senior to the Notes Secured Parties’ Liens under this Agreement.  In the event any Revolving Loan Secured Party seeks or requests such adequate protection in respect of Liens on Notes Priority Collateral securing Revolving Loan Debt, then (1) such adequate protection shall be limited to a Lien on additional or replacement Collateral, and (2) the Notes Secured Parties may seek and obtain, and each Revolving Loan Secured Party hereby consents to the granting of, a Lien on such additional or replacement Collateral as security for the Notes Debt and such Lien securing Notes Debt shall be senior in priority to the Revolving Loan Secured Parties’ Lien on the same basis as the other Liens securing the Notes Debt are senior to the Revolving Loan Secured Parties’ Liens under this Agreement.  If and to the extent such additional or replacement Liens are insufficient to provide adequate protection of the interests of the Notes Secured Parties in the Revolving Loan Priority Collateral, then the Notes Secured Parties shall be entitled to assert a claim under Section 507(b) of the Bankruptcy Code in the amount of any such insufficiency; provided, however, that, any such claim under Section 507(b) shall be subordinate in right of payment of any claim under Section 507(b) of the Revolving Loan Secured Parties arising from any lack of adequate protection of their interests in the Revolving Loan Priority Collateral and, if the Discharge of Revolving Loan Debt does not occur upon the effective date of the plan of reorganization for, or conclusion of, the Insolvency or Liquidation Proceeding, then the Notes Secured Parties agree that any such claim they hold under Section 507(b) arising from any lack of adequate protection of their interests in Revolving Loan Priority Collateral may be satisfied under a plan of reorganization in any combination of payment or property having a value as of the effective date of such plan equal to the allowed amount of such claim under Section 507(b) arising from any lack of adequate protection of their interests in Revolving Loan Priority Collateral.  If and to the extent such additional or replacement Liens are insufficient to provide adequate protection of the interests of the Revolving Loan Secured Parties in the Notes Priority Collateral, then the Revolving Loan Secured Parties shall be entitled to assert a claim under Section 507(b) of the Bankruptcy Code in the amount of any such insufficiency; provided, however, that, any such claim under Section 507(b) shall be subordinate in right of payment of any claim under Section 507(b) of Notes Secured Parties arising from any lack of adequate protection of their interests in Notes Priority Collateral and, if the Discharge of Notes Debt does not occur upon the effective date of the plan of reorganization for, or conclusion of, the Insolvency or Liquidation Proceeding, then the Revolving Loan Secured Parties agree that any such claim they hold under Section 507(b) may be satisfied under a plan of reorganization in any combination of payment or property having a value as of the effective date of such plan equal to the allowed amount of such claim under Section 507(b).  Except as otherwise provided in this Section 6.2 and Section 6.4, (a) no Revolving Loan Secured Party may seek or assert any right it may have for adequate protection of its interest in the Notes Priority Collateral without the prior written consent of the Notes Secured Parties, and (b) no Notes Secured Party may seek or assert any right it may have for adequate protection of its interest in the Revolving Loan Priority Collateral without the written consent of the Revolving Loan Secured Parties.

 

  

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6.3           Sale of Collateral; Waivers.  The Notes Secured Parties shall consent and not otherwise object to a sale or other disposition of any Revolving Loan Priority Collateral under the Bankruptcy Code, including Sections 363, 365 and 1129, free and clear of any Liens thereon securing Notes Debt, if the Revolving Loan Secured Parties have consented to such sale or other disposition.  The Revolving Loan Secured Parties shall consent and not otherwise object to a sale or other disposition of any Notes Priority Collateral under the Bankruptcy Code, including Sections 363, 365 and 1129, free and clear of any Liens thereon securing Revolving Loan Debt, if the Notes Secured Parties have consented to such sale or other disposition.  Nothing in this Section 6.3 shall preclude any Secured Party from seeking to be the purchaser, assignee or other transferee of any Collateral in connection with any such sale or other disposition of Collateral under the Bankruptcy Code.  The Notes Secured Parties agree that the Revolving Loan Secured Parties shall have the right to credit bid under Section 363(k) of the Bankruptcy Code with respect to, or otherwise object to any such sale or other disposition of, the Revolving Loan Priority Collateral and the Revolving Loan Secured Parties agree that the Notes Secured Parties shall have the right to credit bid under Section 363(k) of the Bankruptcy Code with respect to, or otherwise object to any such sale or other disposition of, the Notes Priority Collateral; provided, however, that, the Secured Parties shall not be deemed to have agreed to any “credit bid” by other Secured Parties in connection with the sale or other disposition of Collateral consisting of both Notes Priority Collateral and Revolving Loan Priority Collateral.

 

6.4           Permitted Adequate Protection Payments.

 

(a)           Notwithstanding anything herein to the contrary, (3) the Notes Secured Parties may seek post-petition interest and/or adequate protection payments in any Insolvency or Liquidation Proceeding with respect to the Notes Priority Collateral or the Revolving Loan Priority Collateral, and the Revolving Loan Secured Parties may not oppose such motions and (4) the Revolving Loan Secured Parties may seek post-petition interest and/or adequate protection payments in any Insolvency or Liquidation Proceeding with respect to the Revolving Loan Priority Collateral or the Notes Priority Collateral, and the Notes Secured Parties may not oppose such motions.

 

  

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(b)           With respect to any post-petition interest and/or adequate payments sought by the Notes Secured Parties in an Insolvency or Liquidation Proceeding based upon the value or diminution in value of the Notes Secured Parties’ interest in Revolving Loan Priority Collateral, if the Notes Secured Parties receive such payments from the proceeds of Revolving Loan Priority Collateral or any Revolver DIP Financing permitted under Section 6.1, and the Discharge of Revolving Loan Debt does not occur upon the effectiveness of the plan of reorganization for, or conclusion of, that Insolvency or Liquidation Proceeding, then, (5) the Maximum Priority Revolving Loan Debt amount shall be deemed increased to the extent necessary so as include advances made under any Revolver DIP Financing for payments to the Notes Secured Parties under this Section 6.4 and (6) the Notes Secured Parties shall pay over to the Revolving Loan Secured Parties an amount equal to the lesser of (a) such post-petition interest and/or adequate protection payments and (b) the amount of the Revolving Loan Debt remaining unpaid upon the effectiveness of the plan of reorganization or conclusion of the Insolvency or Liquidation Proceeding; provided, that, to the extent any portion of the amount remaining unpaid in cash represents consideration received by the Revolving Loan Secured Parties in the form of promissory notes, equity or other property, equal in value to the cash paid in respect of the amount to be paid over to the Revolving Loan Secured Parties (which notes, equity or other property do not constitute Discharge of Revolving Loan Debt), the Revolving Loan Secured Parties shall, upon receipt of such amount from the Notes Secured Parties, transfer those promissory notes, equity or other property, pro rata, equal in value to the cash paid in respect of such amounts to the Notes Secured Parties in exchange for the amounts paid over by them to the Revolving Loan Secured Parties.  The obligations of the Notes Secured Parties under the preceding sentence shall be several and not joint, and in no event shall any Notes Secured Party be obligated to pay any amount or turnover any property not received by or on behalf of such Notes Secured Party.  For purposes of clarity, any adequate protection payments sought or obtained on account of any diminution in value of the Notes Priority Collateral shall be subject to the provisions of Section 6.4(a) but not this Section 6.4(b).

 

(c)           With respect to any post-petition interest and/or adequate payments sought by the Revolving Loan Secured Parties in an Insolvency or Liquidation Proceeding based upon the value or diminution in value of the Revolving Loan Secured Parties’ interest in Notes Priority Collateral, if the Revolving Loan Secured Parties receive such payments from the proceeds of Notes Priority Collateral or any Notes DIP Financing permitted under Section 6.1, and the Discharge of Notes Debt does not occur upon the effectiveness of the plan of reorganization for, or conclusion of, that Insolvency or Liquidation Proceeding, then, the Revolving Loan Secured Parties shall pay over to the Notes Secured Parties an amount equal to the lesser of (i) such post-petition interest and/or adequate protection payments and (ii) the amount of the Notes Debt remaining unpaid upon the effectiveness of the plan of reorganization or conclusion of the Insolvency or Liquidation Proceeding; provided, that, to the extent any portion of the amount remaining unpaid in cash represents consideration received by the Notes Secured Parties in the form of promissory notes, equity or other property, equal in value to the cash paid in respect of the amount to be paid over to the Notes Secured Parties (which notes, equity or other property do not constitute Discharge of Notes Debt), the Notes Secured Parties shall, upon receipt of such amount from the Revolving Loan Secured Parties, transfer those promissory notes, equity or other property, pro rata, equal in value to the cash paid in respect of such amounts to the Revolving Loan Secured Parties in exchange for the amounts paid over by them to the Notes Secured Parties.  The obligations of the Revolving Loan Secured Parties under the preceding sentence shall be several and not joint, and in no event shall any Revolving Loan Secured Party be obligated to pay any amount or turnover any property not received by or on behalf of such Revolving Loan Secured Party.  For purposes of clarity, any adequate protection payments sought or obtained on account of any diminution in value of the Revolving Loan Priority Collateral shall be subject to the provisions of Section 6.4(a) but not this Section 6.4(c).

 

  

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6.5           Relief from the Automatic Stay.  Notes Agent, for itself and on behalf of the other Notes Secured Parties, agrees that, so long as the Discharge of Revolving Loan Debt has not occurred, no Notes Secured Party shall, without the prior written consent of the Revolving Loan Secured Parties, seek or request relief from or modification of the automatic stay or any other stay in any Insolvency or Liquidation Proceeding in respect of any part of the Revolving Loan Priority Collateral or any proceeds thereof; provided, that, in the event the Revolving Loan Secured Parties seek or request relief from or modification of the automatic stay or any other stay in any Insolvency or Liquidation Proceeding in respect of Revolving Loan Priority Collateral, the Revolving Loan Secured Parties agree that the Notes Secured Parties may seek or request similar relief to that sought by the Revolving Loan Secured Parties so that the Notes Secured Parties may seek to exercise their rights and remedies under the Notes Documents and against such Collateral subject to the provisions of this Agreement.  The Revolving Loan Secured Parties agree that, so long as the Discharge of Notes Debt has not occurred, no Revolving Loan Secured Party shall, without the prior written consent of the Notes Secured Parties, seek or request relief from or modification of the automatic stay or any other stay in any Insolvency or Liquidation Proceeding in respect of any part of the Notes Priority Collateral or any proceeds thereof; provided, that, in the event Notes Secured Parties seek or request relief from or modification of the automatic stay or any other stay in any Insolvency or Liquidation Proceeding, the Notes Secured Parties agree that the Revolving Loan Secured Parties may seek or request similar relief to that sought by the Notes Secured Parties so that the Revolving Loan Secured Parties may seek to exercise their rights and remedies under the Revolving Loan Documents and against such Collateral subject to the provisions of this Agreement.

 

6.6           Reorganization Securities.  If, in any Insolvency or Liquidation Proceeding, debt obligations of any reorganized Grantor secured by Liens upon any property of such reorganized Grantor are distributed, pursuant to a plan of reorganization, on account of both the Revolving Loan Debt and the Notes Debt, then, to the extent the debt obligations distributed on account of the Revolving Loan Debt and on account of the Notes Debt are secured by Liens upon the same assets or property, the provisions of this Agreement will survive the distribution of such debt obligations pursuant to such plan and will apply with like effect to the Liens securing such debt obligations.

 

6.7           No Challenges to Claims.

 

(a)           Notes Agent, for itself and on behalf of the other Notes Secured Parties, agrees that no Notes Secured Party shall oppose or seek to challenge any claim by any Revolving Loan Secured Party for allowance in any Insolvency or Liquidation Proceeding of any Revolving Loan Debt, including those consisting of post-petition interest, fees or expenses.

 

  

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(b)           Revolving Loan Agent, for itself and on behalf of the other Revolving Loan Secured Parties, agrees that no Revolving Loan Secured Party shall oppose or seek to challenge any claim by any Notes Secured Party for allowance in any Insolvency or Liquidation Proceeding of any Notes Debt, including those consisting of post-petition interest, fees or expenses.

 

6.8           Certain Waivers as to Section 1111(b)(2) of Bankruptcy Code.  Notes Agent, for itself and on behalf of the other Notes Secured Parties, waives any claim any Notes Secured Party may hereafter have against any Revolving Loan Secured Party arising out of the election by any Revolving Loan Secured Party of the application of Section 1111(b)(2) of the Bankruptcy Code, or any comparable provision of any other Bankruptcy Law.  The Revolving Loan Secured Parties waive any claim they may hereafter have against any Notes Secured Party arising out of the election by any Notes Secured Party of the application of Section 1111(b)(2) of the Bankruptcy Code or any comparable provision of any other Bankruptcy Law.

 

6.9           Separate Grants of Security and Separate Classes.  Each of the parties hereto irrevocably acknowledges and agrees that x) the claims and interests of the Revolving Loan Secured Parties and the Notes Secured Parties are not “substantially similar” within the meaning of Section 1122 of the Bankruptcy Code, or any comparable provision of any other Bankruptcy Law, xi) the grants of the Liens to secure the Revolving Loan Debt and the grants of the Liens to secure the Notes Debt constitute two separate and distinct grants of Liens, xii) the Revolving Loan Secured Parties rights in the Collateral are fundamentally different from the Notes Secured Parties’ rights in the Collateral and xiii) as a result of the foregoing, among other things, the Revolving Loan Debt and the Notes Debt must be separately classified in any plan of reorganization proposed or adopted in any Insolvency or Liquidation Proceeding.

 

6.10         Survival After Bankruptcy.  This Agreement shall be applicable both before and after the institution of any Insolvency or Liquidation Proceeding involving any Grantor, including, without limitation, the filing of any petition by or against any Grantor under the Bankruptcy Code or under any other Bankruptcy Law and all converted or subsequent cases in respect thereof, and all references herein to any Grantor shall be deemed to apply to the trustee for such Grantor and such Grantor as debtor-in-possession.  The relative rights of the Revolving Loan Secured Parties and the Notes Secured Parties in or to any distributions from or in respect of any Collateral or proceeds shall continue after the institution of any Insolvency or Liquidation Proceeding involving any Grantor, including, without limitation, the filing of any petition by or against any Grantor under the Bankruptcy Code or under any other Bankruptcy Law and all converted cases and subsequent cases, on the same basis as prior to the date of such institution, subject to any court order approving the financing of, or use of Revolving Loan Cash Collateral by, any Grantor as debtor-in-possession, or any other court order affecting the rights and interests of the parties hereto not in conflict with this Agreement.  This Agreement shall constitute a subordination agreement for the purposes of Section 510(a) of the Bankruptcy Code and shall be enforceable in any Insolvency or Liquidation Proceeding in accordance with its terms.

 

  

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6.11         Preference Issues.  If any Revolving Loan Secured Party is required in any Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise pay to the estate of any Grantor or any other person any amount (a “Recovery”), then the Revolving Loan Debt shall be reinstated to the extent of such Recovery and the Revolving Loan Secured Parties shall be entitled to a Discharge of Revolving Loan Debt with respect to all such recovered amounts.  If any Notes Secured Party is required in any Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise pay to the estate of any Grantor or any other person any Recovery, then the Notes Debt shall be reinstated to the extent of such Recovery and the Notes Secured Parties shall be entitled to a Discharge of Notes Debt with respect to all such recovered amounts.  If this Agreement shall have been terminated prior to any Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto from such date of reinstatement.

 

6.12         Other Bankruptcy Laws.  In the event that an Insolvency or Liquidation Proceeding is filed in a jurisdiction other than the United States or is governed by any Bankruptcy Law other than the Bankruptcy Code, each reference in this Agreement to a section of the Bankruptcy Code shall be deemed to refer to the substantially similar or corresponding provision of the Bankruptcy Law applicable to such Insolvency or Liquidation Proceeding, or, in the absence of any specific similar or corresponding provision of Bankruptcy Law, such other general Bankruptcy Law as may be applied in order to achieve substantially the same result as would be achieved under each applicable section of the Bankruptcy Code.

 

Section 7.              Noteholders’ Purchase Option

 

7.1           Notice of Exercise.  At any time following the occurrence and during the continuance of a Triggering Event, Notes Agent, for itself and on behalf of the other Notes Secured Parties, shall have the option at any time upon five (5) Business Days’ prior written notice to Revolving Loan Agent to purchase all, but not part (other than the exclusion, at the purchasers’ option, of the amount of Revolving Loan Debt that exceeds the Maximum Priority Revolving Loan Debt), of the Revolving Loan Debt from the Revolving Loan Secured Parties.  Such notice from Notes Agent to Revolving Loan Agent shall be irrevocable.

 

7.2           Pro Rata Offer.  The Notes Secured Parties agree, solely as among themselves, that upon the occurrence of any Triggering Event and any contemplation of a potential exercise of the Noteholders’ option to purchase pursuant to this Section 7, the Notes Agent shall send a notice to all Noteholders giving each of them the option to purchase at least their pro rata share of the Revolving Loan Debt elected for purchase in accordance with Section 7.1 (the “Revolving Loan Purchase Amount”).  No Noteholder shall be required to participate in any purchase offer hereunder, and each Notes Secured Party acknowledges and agrees that a purchase offer may be made by any or all of the Notes Secured Parties, subject to the requirements of the preceding sentence.  The provisions of this Section 7.2 are intended solely for the benefit of the Notes Secured Parties and may be modified, amended or waived by them without the approval of the B&L Supply, any other Grantor, any Revolving Loan Secured Party, or otherwise.

 

  

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7.3           Purchase and Sale.  On the date specified by Notes Agent in such written notice (which shall not be less than five (5) nor more than thirty (30) Business Days after the receipt by Revolving Loan Agent of the irrevocable notice from Notes Agent of the Notes Secured Parties’ election to exercise the purchase option), Revolving Loan Agent and the Revolving Loan Lenders shall sell to the participating Noteholders (the “Purchasing Noteholders”), and the Purchasing Noteholders shall purchase from the Revolving Loan Secured Parties (the “Revolving Loan Debt Purchase”), the Revolving Loan Purchase Amount as set forth in such written notice; provided, that, Revolving Loan Agent and the Revolving Loan Lenders shall retain all rights xiv) to receive payments in respect of any the Revolving Loan Debt in excess of the Revolving Loan Purchase Amount, if any (such obligations referred to herein as the “Retained Revolving Loan Debt”), and xv) to continue to be indemnified or held harmless by the Grantors in accordance with the terms of the Revolving Loan Documents.  In connection with the Revolving Loan Debt Purchase, each Revolving Loan Lender and each Purchasing Noteholder shall execute and deliver an assignment and acceptance agreement, in form reasonably acceptable to all signatories, pursuant to which, among other things, each Revolving Loan Lender shall assign to the Purchasing Noteholders such Revolving Loan Lender’s pro rata share of the Commitments and Revolving Loan Debt relating to the Revolving Loan Debt Purchase.  In addition to and not in limitation of the foregoing, (1) contemporaneously with the consummation of the Revolving Loan Debt Purchase, Revolving Loan Agent shall resign as the “Agent” under the Revolving Loan Documents (and shall execute and deliver all such documents and instruments reasonably requested by Notes Agent and/or Purchasing Noteholders to assign and transfer any Collateral, together with any and all rights under third-party agreements related to Collateral and/or access thereto, to the applicable successor Agent and to maintain the validity, perfection and priority of the Liens on the Collateral in favor of the successor Agent) and Notes Agent or such other Person as the Purchasing Noteholders shall designate, shall be designated as the successor “Agent” under the Revolving Loan Documents, and (2) from and after the Revolving Loan Purchase Date, solely to the extent that the amount of the Retained Revolving Loan Debt is greater than zero, each of the Revolving Loan Lenders who execute and deliver an assignment and acceptance agreement with the Purchasing Noteholders (the “Revolving Loan Transferring Lenders”) shall continue to be, and shall have all rights and remedies of, a “Lender” under the Revolving Loan Documents to the extent of their pro rata share of the Retained Revolving Loan Debt; except, that, each such Revolving Loan Transferring Lender shall have no further obligation whatsoever to make any loans, advances or other financial accommodations to or for the benefit of any Grantor under any Revolving Loan Documents and each such Revolving Loan Transferring Lender shall execute an amendment acknowledging that such Retained Revolving Loan Debt is a last-out tranche, payable only after all of the Notes Debt and other Revolving Loan Debt is paid in full.  Interest and other amounts with respect to the Retained Revolving Loan Debt shall continue to be paid in accordance with the terms of the Revolving Loan Documents, and the Retained Revolving Loan Debt shall continue to be secured by the Collateral on a junior basis to all other Revolving Loan Debt and all Notes Debt.  Revolving Loan Agent, for itself and on behalf of the Revolving Loan Lenders, hereby represents and warrants that, as of the date hereof, no approval of any court or other regulatory or governmental authority is required for the Revolving Loan Debt Purchase.

 

  

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7.4           Payment of Purchase Price.

 

(a)           Upon the effective date of the Revolving Loan Debt Purchase (the “Revolving Loan Purchase Date”), the Purchasing Noteholders shall (3) pay to Revolving Loan Agent, for the benefit of the Revolving Loan Lenders, as the purchase price therefor, the full amount of the Revolving Loan Purchase Amount then outstanding and unpaid, (4) without duplication, and to the extent included in the Revolving Loan Purchase Amount, furnish or cause to be furnished to Revolving Loan Agent cash collateral in a manner and in such amounts as Revolving Loan Agent determines is reasonably necessary to secure Revolving Loan Agent in connection with any issued and outstanding letters of credit and Bank Product Obligations provided by the Revolving Loan Secured Parties (including, without limitation, letters of credit that Revolving Loan Agent has arranged to be provided by third parties pursuant to the financing arrangements of the Revolving Loan Secured Parties with Grantors) to Grantors (but not in any event in an amount greater than one hundred five (105%) percent of the aggregate undrawn face amount of such letters of credit), and (5) agree to indemnify and hold harmless the Revolving Loan Secured Parties from and against any loss, liability, claim, damage or expense (including reasonable fees and expenses of legal counsel) arising out of any claim asserted by a third party in respect of the Revolving Loan Debt (other than the Retained Revolving Loan Debt) as a direct result of any acts by Notes Agent or any other Notes Secured Party occurring after the Revolving Loan Purchase Date, to the extent found by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such Notes Secured Party.

 

(b)           Subsequent to the Revolving Loan Purchase Date, after the payment in full in cash of the Notes Debt and the payment in full in cash of the Revolving Loan Debt purchased by the Purchasing Noteholders pursuant to this Section 7, including principal, interest and fees thereon and costs and expense of collection thereof (including reasonable attorneys’ fees and legal expenses), the Notes Secured Parties shall remit to Revolving Loan Agent, for itself and for the benefit of the Revolving Loan Lenders, any sums or amounts received by Notes Agent or any Notes Secured Party from any Grantor or from any Collateral, for application to the full amount of all Retained Revolving Loan Debt outstanding and unpaid (together with interest thereon at the highest applicable rate set forth in the Revolving Loan Agreement as in effect on the date of the purchase), which sums or amounts shall be remitted within three (3) Business Days after receipt thereof by Notes Agent or any such Notes Secured Party. Such purchase price and cash collateral shall be remitted by wire transfer in federal funds to such bank account of Revolving Loan Agent in New York, New York, as Revolving Loan Agent may designate in writing to Notes Agent for such purpose.  Interest shall be calculated to but excluding the Business Day on which such purchase and sale shall occur if the amounts so paid by Notes Agent to the bank account designated by Revolving Loan Agent are received in such bank account prior to 12:00 noon, New York City time, and interest shall be calculated to and including such Business Day if the amounts so paid by the Notes Secured Parties to the bank account designated by Revolving Loan Agent are received in such bank account later than 1:00 p.m., New York City time.

 

7.5           Representations Upon Purchase and Sale.  Such Revolving Loan Debt Purchase shall be expressly made without representation or warranty of any kind by Revolving Loan Agent or any Revolving Loan Secured Party as to the Revolving Loan Debt or otherwise and without recourse to the Revolving Loan Secured Parties; except, that, the Revolving Loan Lender that is transferring such Revolving Loan Debt shall represent and warrant: xvi) the amount of the Revolving Loan Debt being purchased from it, xvii) that such Revolving Loan Lender owns the Revolving Loan Debt free and clear of any Liens or encumbrances and xviii) that such Revolving Loan Lender has the right to assign such Revolving Loan Debt and the assignment is duly authorized.

 

  

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7.6           Notice from Revolving Loan Agent Prior to Revolving Loan Lien Enforcement Action.  In the absence of Exigent Circumstances, Revolving Loan Agent, for itself and on behalf of the Revolving Loan Secured Parties, agrees that it will give Notes Agent ten (10) Business Days’ prior written notice of its intention to commence the exercise of any Revolving Loan Lien Enforcement Action against the Collateral.  In the event that during such ten (10) Business Day period, Notes Agent shall send to Revolving Loan Agent the irrevocable notice of the Notes Secured Parties’ intention to exercise the purchase option given by the Revolving Loan Secured Parties to the Notes Secured Parties under this Section 7, the Revolving Loan Secured Parties shall not commence a Revolving Loan Lien Enforcement Action (provided, that, continuing collection of accounts receivable and other actions permitted under the Revolving Loan Documents when no Revolving Loan Event of Default exists shall not be prohibited hereunder); provided, further, that, the Revolving Loan Secured Parties’ forbearance as aforesaid shall terminate if an Exigent Circumstance shall exist (in which case,  Revolving Loan Agent agrees to provide prompt notice of such Exigent Circumstance to Notes Agent and agrees to consult with Notes Agent prior to the commencement of any Revolving Loan Lien Enforcement Action deemed necessary by Revolving Loan Agent unless such Exigent Circumstances require otherwise) or if the purchase and sale with respect to the Revolving Loan Debt provided for herein shall not have closed within thirty (30) Business Days after the receipt by Revolving Loan Agent of the irrevocable notice from Notes Agent, and the Revolving Loan Secured Parties shall not have received payment in full of the Revolving Loan Purchase Amount as provided for herein within such thirty (30) Business Day period.

 

Section 8.               Access and Use of Notes Priority Collateral

 

8.1           Access and Use Rights of Revolving Loan Agent.  In the event that Notes Agent shall acquire control or possession of any of the Notes Priority Collateral or shall, through the exercise of remedies under the Notes Documents or otherwise, sell any of the Notes Priority Collateral to any third party (a “Third Party Purchaser”), Notes Agent shall permit Revolving Loan Agent (or require as a condition of such sale to the Third Party Purchaser that the Third Party Purchaser agree to permit the Revolving Collateral Agent), at Revolving Loan Agent’s option and in accordance with applicable law, and at the expense of the Revolving Secured Parties:  xix) to enter and use any or all of the Notes Priority Collateral under such control or possession (or sold to a Third Party Purchaser) consisting of real property and the improvements, structures, buildings thereon and all related rights during normal business hours or in order to inspect, remove or take any action with respect to the Revolving Loan Priority Collateral or to enforce Revolving Loan Agent’s rights with respect thereto, including, but not limited to, the examination and removal of Revolving Loan Priority Collateral and the examination and duplication of the books and records of any Grantor related to the Revolving Loan Priority Collateral, or to otherwise handle, deliver, ship, transport, deal with or dispose of any Revolving Loan Priority Collateral, such right to include, without limiting the generality of the foregoing, the right to conduct one or more public or private sales or auctions thereon; and xx) use any of the Notes Priority Collateral under such control or possession (or sold to a Third Party Purchaser) consisting of equipment (including computers or other data processing equipment related to the storage or processing of records, documents or files pertaining to the Revolving Loan Priority Collateral) or other equipment to handle, deal with or dispose of any Revolving Loan Priority Collateral pursuant to the rights of Revolving Loan Agent and the other Revolving Loan Secured Parties as set forth in the Revolving Loan Documents, the UCC of any applicable jurisdiction and other applicable law.  Notes Agent shall not have any responsibility or liability for the acts or omissions of Revolving Loan Agent or any of the other Revolving Loan Secured Parties, and Revolving Loan Agent and the other Revolving Loan Secured Parties shall not have any responsibility or liability for the acts or omissions of Notes Agent, in each case arising in connection with such other Person’s use and/or occupancy of any of the Notes Priority Collateral.  The rights of Revolving Loan Agent set forth in clauses (a) and (b) above as to the Notes Priority Collateral (collectively, the “Access and Use Rights”) shall be irrevocable and shall continue at Revolving Loan Agent’s option for a period of one hundred and twenty (120) days as to any such Notes Priority Collateral from the date on which Notes Agent has notified Revolving Loan Agent that Notes Agent has acquired possession or control of such Notes Priority Collateral.  The time periods set forth herein shall be tolled during the pendency of any proceeding of a Grantor under the U.S. Bankruptcy Code or other proceedings pursuant to which Revolving Loan Agent is effectively stayed from enforcing its rights against the Revolving Loan Priority Collateral.  In no event shall Notes Agent or any of the Notes Secured Parties take any action to interfere, limit or restrict the Access and Use Rights of Revolving Loan Agent or the exercise of such rights by Revolving Loan Agent pursuant to this Section 8.1 prior to the expiration of such periods.

 

  

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8.2           Responsibilities of Revolving Loan Secured Parties.  During the period of actual occupation, use and/or control by Revolving Loan Agent of any Notes Priority Collateral (or any assets or property subject to a leasehold interest constituting Notes Priority Collateral), the Revolving Secured Parties shall be obligated xxi) to reimburse the Notes Secured Parties any incremental additional amounts required to be paid in respect of increases in utilities, taxes and all other operating costs of such Notes Priority Collateral as a result of the use thereof by Revolving Loan Agent that Notes Agent or the other Notes Secured Parties would not have had to pay or be responsible for but for the use thereof by Revolving Loan Agent pursuant to its rights hereunder during any such period of actual occupation, use and/or control to the extent the same are actually paid by the Notes Secured Parties, xxii) to repair at their expense any physical damage to such Notes Priority Collateral resulting from such occupancy, use and/or control, and to leave such Notes Priority Collateral in substantially the same condition as it was at the commencement of such occupancy, use and/or control (ordinary wear and tear excepted), and xxiii) to deliver to Notes Agent a certificate of insurance showing property and liability coverage reasonably satisfactory to Notes Agent on such Notes Priority Collateral during any such period of actual occupation, use and/or control thereof by Revolving Loan Agent and naming Notes Agent as an additional named insured.  Without limiting the rights granted in this section, Revolving Loan Agent and the other Revolving Loan Secured Parties shall cooperate with the Notes Secured Parties in connection with any efforts made by Notes Agent or the Notes Secured Parties to sell the Notes Priority Collateral.

 

8.3           Intellectual Property.  In addition to and not in limitation of Section 8.1, in connection with any enforcement action by Revolving Loan Agent, Notes Agent hereby grants to Revolving Loan Agent a non-exclusive, irrevocable royalty free license with respect to any Intellectual Property necessary to realize upon any Revolving Loan Priority Collateral for the purpose of effecting such realization.  Notwithstanding anything to the contrary contained herein, any purchaser or assignee of Revolving Loan Priority Collateral pursuant to the exercise by Revolving Loan Agent of any of its rights or remedies with respect thereto shall have the right to sell or otherwise dispose of any such Revolving Loan Priority Collateral to which any such Intellectual Property is affixed.

 

  

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Section 9.              Reliance; Waivers; etc.

 

9.1           Reliance.

 

(a)           The consent by the Revolving Loan Secured Parties to the execution and delivery of the Notes Documents and the grant to Notes Agent on behalf of the Notes Secured Parties of a Lien on the Collateral and all loans and other extensions of credit made or deemed made on and after the date hereof by the Revolving Loan Secured Parties to any Grantor shall be deemed to have been given and made in reliance upon this Agreement.

 

(b)           The consent by the Notes Secured Parties to the execution and delivery of the Revolving Loan Documents and the grant to Revolving Loan Agent on behalf of the Revolving Loan Secured Parties of a Lien on the Collateral and all loans and other extensions of credit made or deemed made on and after the date hereof by the Notes Secured Parties to any Grantor shall be deemed to have been given and made in reliance upon this Agreement.

 

9.2           No Warranties or Liability.

 

(a)           Notes Agent, for itself and on behalf of the other Notes Secured Parties, acknowledges and agrees that each of Revolving Loan Agent and the other Revolving Loan Secured Parties have made no express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectibility or enforceability of any of the Revolving Loan Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon. Notes Agent agrees, for itself and on behalf of the other Notes Secured Parties, that the Revolving Loan Secured Parties will be entitled to manage and supervise their respective loans and extensions of credit under the Revolving Loan Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate, and the Revolving Loan Secured Parties may manage their loans and extensions of credit without regard to any rights or interests that Notes Agent or any of the other Notes Secured Parties have in the Collateral or otherwise, except as otherwise provided in this Agreement. Neither Revolving Loan Agent nor any of the other Revolving Loan Secured Parties shall have any duty to Notes Agent or any of the other Notes Secured Parties to act or refrain from acting in a manner which allows, or results in, the occurrence or continuance of an event of default or default under any agreements with any Grantor (including the Notes Documents), regardless of any knowledge thereof which they may have or with which they may be charged.

 

(b)           Revolving Loan Agent, for itself and on behalf of the other Revolving Loan Secured Parties, acknowledges and agrees that each of Notes Agent and the other Notes Secured Parties have made no express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectibility or enforceability of any of the Notes Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon. Revolving Loan Agent agrees, for itself and on behalf of the other Revolving Loan Secured Parties, that the Notes Secured Parties will be entitled to manage and supervise their respective loans and extensions of credit under the Notes Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate, and the Notes Secured Parties may manage their loans and extensions of credit without regard to any rights or interests that Revolving Loan Agent or any of the other Revolving Loan Secured Parties have in the Collateral or otherwise, except as otherwise provided in this Agreement.  Neither Notes Agent nor any of the other Notes Secured Parties shall have any duty to Revolving Loan Agent or any of the other Revolving Loan Secured Parties to act or refrain from acting in a manner which allows, or results in, the occurrence or continuance of an event of default or default under any agreements with any Grantor (including the Revolving Loan Documents), regardless of any knowledge thereof which they may have or with which they may be charged.

 

  

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9.3           No Waiver of Lien Priorities.

 

(a)           No right of Revolving Loan Agent or any of the other Revolving Loan Secured Parties to enforce any provision of this Agreement or any of the Revolving Loan Documents shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of any Grantor or by any act or failure to act by Revolving Loan Agent or any other Revolving Loan Secured Party, or by any noncompliance by any Person with the terms, provisions and covenants of this Agreement, any of the Revolving Loan Documents or any of the Notes Documents, regardless of any knowledge thereof which Revolving Loan Agent or any of the other Revolving Loan Secured Parties may have or be otherwise charged with.

 

(b)           No right of Notes Agent or any of the other Notes Secured Parties to enforce any provision of this Agreement or any of the Notes Documents shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of any Grantor or by any act or failure to act by Notes Agent or any other Notes Secured Party, or by any noncompliance by any Person with the terms, provisions and covenants of this Agreement, any of the Notes Documents or any of the Revolving Loan Documents, regardless of any knowledge thereof which Notes Agent or any of the other Notes Secured Parties may have or be otherwise charged with.

 

(c)           Notes Agent agrees not to assert and hereby waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or otherwise claim the benefit of, any marshalling, appraisal, valuation or other similar right that may otherwise be available under applicable law with respect to the Collateral or any other similar rights a junior secured creditor may have under applicable law.

 

(d)           Revolving Loan Agent agrees not to assert and hereby waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or otherwise claim the benefit of, any marshalling, appraisal, valuation or other similar right that may otherwise be available under applicable law with respect to the Collateral or any other similar rights a junior secured creditor may have under applicable law.

 

9.4           Amendments to Documents.  Without in any way limiting the generality of Section 9.3(a) above (but subject to the rights of the Grantors under the Revolving Loan Documents or Note Documents), the Revolving Loan Documents and the Notes Documents may be amended, supplemented or otherwise modified, in each case, in accordance with the terms of both the Revolving Loan Documents and the Notes Documents, and the Revolving Loan Debt and Notes Debt may be refinanced, in each case, without notice to, or the consent (except to the extent a consent is required to permit the transaction under any Revolving Loan Document or any Notes Document) of the Revolving Loan Secured Parties or the Notes Secured Parties, as the case may be, all without affecting the Lien subordination or other provisions of this Agreement.

 

  

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Section 10.             Miscellaneous.

 

10.1         Conflicts.  In the event of any conflict between the provisions of this Agreement and the provisions of the Revolving Loan Documents or the Notes Documents, the provisions of this Agreement shall govern.

 

10.2         Continuing Nature of this Agreement; Severability.  This Agreement shall continue to be effective until the first to occur of the Discharge of Revolving Loan Debt and the Discharge of the Notes Debt.  This is a continuing agreement of lien subordination and the Secured Parties may continue, at any time and without notice to the other Secured Parties, to extend credit and other financial accommodations and lend monies to or for the benefit of any Grantor constituting Revolving Loan Debt and/or Notes Debt (as applicable) in reliance hereof.  Each of Notes Agent, for itself and on behalf of the Notes Secured Parties, and Revolving Loan Agent, for itself and on behalf of the Revolving Loan Secured Parties, hereby waives any right it may have under applicable law to revoke this Agreement or any of the provisions of this Agreement. The terms of this Agreement shall survive, and shall continue in full force and effect, in any Insolvency or Liquidation Proceeding. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

10.3         Refinancing.

 

(a)           Refinancing Permitted.  As an agreement among the Secured Parties only and without prejudice to any rights of the Secured Parties under the Revolving Loan Documents and Notes Documents, as applicable, the Revolving Loan Debt and/or Notes Debt may be refinanced if (1) the terms and provisions of any such refinancing debt, if instead implemented as modifications to the debt being refinanced, could be effected without the consent of the Agent to the debt not being refinanced, in accordance with the provisions of Section 9.4 hereof, and (2) the holders of such indebtedness, or a duly authorized agent on their behalf, agree in writing to be bound by the terms of this Agreement.  Revolving Loan Agent, for itself and on behalf of the Revolving Loan Secured Parties, and Notes Agent, for itself and on behalf of the Notes Secured Parties, agree, in connection with any refinancing of the Revolving Loan Debt and/or the Notes Debt permitted by this Section 10.3(a), promptly to enter into such documents and agreements (including amendments or supplements to this Agreement) as Grantors may reasonably request to reflect such refinancing; provided, that, the rights and powers of the Secured Parties contemplated hereby shall not be affected thereby.  References to refinance or refinancing in this Agreement shall include any indebtedness that is refinanced, extended, renewed, defeased, amended, modified, supplemented, restructured, replaced, refunded, or exchanged for other indebtedness in whole or in part.

 

(b)           Effect of Refinancing.

 

  

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(i)            If substantially contemporaneously with the Discharge of Revolving Loan Debt, B&L Supply refinances indebtedness outstanding under the Revolving Loan Documents in accordance with the provisions of Section 10.3(a), then after written notice to Notes Agent, (a) the indebtedness and other obligations arising pursuant to such refinancing of the then outstanding indebtedness under the Revolving Loan Documents shall automatically be treated as Revolving Loan Debt for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Collateral set forth herein, (b) the credit agreement and the other loan documents evidencing such new indebtedness shall automatically be treated as the Revolving Loan Agreement and the Revolving Loan Documents for all purposes of this Agreement and (c) the agent under the new Revolving Loan Agreement shall be deemed to be Revolving Loan Agent for all purposes of this Agreement.  Upon receipt of notice of such refinancing (including the identity of the new Revolving Loan Agent), Notes Agent shall promptly enter into such documents and agreements (including amendments or supplements to this Agreement) as B&L Supply or the new Revolving Loan Agent may reasonably request in order to provide to the new Revolving Loan Agent the rights of Revolving Loan Agent contemplated hereby.

 

(ii)           If substantially contemporaneously with the Discharge of Notes Debt, B&L Supply refinances indebtedness outstanding under the Notes Documents in accordance with the provisions of Section 10.3(a), then after written notice to Revolving Loan Agent, (d) the indebtedness and other obligations arising pursuant to such refinancing of the then outstanding indebtedness under the Notes Documents shall automatically be treated as Notes Debt for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Collateral set forth herein, (e) the indenture, credit agreement and the other loan or note documents evidencing such new indebtedness shall automatically be treated as the Indenture and the Notes Documents for all purposes of this Agreement and (f) the agent or trustee under the new Indenture shall be deemed to be Notes Agent for all purposes of this Agreement.  Upon receipt of notice of such refinancing (including the identity of the new Notes Agent), Revolving Loan Agent shall promptly enter into such documents and agreements (including amendments or supplements to this Agreement) as B&L Supply or the new Notes Agent may reasonably request in order to provide to the new Notes Agent the rights of Notes Agent contemplated hereby.

 

10.4         Amendments; Waivers.  No amendment or modification of any of the provisions of this Agreement by Notes Agent or Revolving Loan Agent shall be deemed to be made unless the same shall be in writing signed on behalf of both of the Notes Agent and the Revolving Loan Agent (as directed pursuant to the applicable Notes Documents or Revolving Loan Documents, as the case may be).  No waiver of any of the provisions of this Agreement shall be deemed to be made unless the same shall be in writing signed by the party making the same or its authorized agent and each waiver, if any, shall be a waiver only with respect to the specific instance involved and shall in no way impair the rights of the parties making such waiver or the obligations of the other parties to such party in any other respect or at any other time. The Grantors shall not have any right to consent to or approve any amendment, modification or waiver of any provision of this Agreement except to the extent their rights or obligations are directly adversely affected.

 

  

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10.5         Subrogation.

 

(a)           Notes Agent, for itself and on behalf of the Notes Secured Parties, hereby waives any rights of subrogation it may acquire as a result of any payment hereunder until the Discharge of Revolving Loan Debt has occurred.

 

(b)           Revolving Loan Agent, for itself and on behalf of the Revolving Loan Secured Parties, hereby waives any rights of subrogation it may acquire as a result of any payment hereunder until the Discharge of Notes Debt has occurred.

 

10.6         Consent to Jurisdiction; Waivers.  The parties hereto consent to the jurisdiction of the Supreme Court of the State of New York in New York County and the United States District Court for the Southern District of New York and consent that all service of process may be made by registered mail directed to such party as provided in Section 10.7 below for such party.  Service so made shall be deemed to be completed three (3) days after the same shall be posted as aforesaid. The parties hereto waive any objection to any action instituted hereunder based on forum non conveniens, and any objection to the venue of any action instituted hereunder. Each of the parties hereto waives any right it may have to trial by jury in respect of any litigation based on, or arising out of, under or in connection with this Agreement or any other Loan Document, or any course of conduct, course of dealing, verbal or written statement or action of any party hereto.

 

10.7         Notices.  All notices to the Notes Secured Parties and the Revolving Loan Secured Parties permitted or required under this Agreement may be sent to Notes Agent and Revolving Loan Agent, respectively. Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and may be personally served, electronically mailed or sent by courier service, facsimile transmission or U.S. mail and shall be deemed to have been given when delivered in person or by courier service, upon receipt of a facsimile transmission or electronic mail or four (4) Business Days after deposit in the U.S. mail (registered or certified, with postage prepaid and properly addressed). For the purposes hereof, the addresses of the parties hereto shall be as set forth below, or, as to each party, at such other address as may be designated by such party in a written notice to all of the other parties.

 

	
Revolving Loan Agent:

	
Regions Bank

5001 Spring Valley Road, Suite 153-W

Dallas, Texas 75244

Attention:  Jon Eckhouse

Telephone:  972-383-7510

Facsimile:  972-383-7505

 

 

  

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with copies to:

	
Otterbourg, Steindler, Houston & Rosen, P.C.

230 Park Avenue

New York, New York 10169

Attention:  Mitchell M. Brand, Esq.

Telephone:  212-661-9100

Facsimile:  212-682-6104

 

	  	  
	
Notes Agent:

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

101 Barclay Street, 8W

New York, NY 10286

Attention: Corporate Trust Administration

Facsimile: 904-645-1921

 

	
with copies to:

	
Latham & Watkins LLP

885 Third Avenue

New York, NY 10022-4834

Attention:  Marc Jaffe

Telephone:  (212) 906-1281

Facsimile:  (212) 751-4864

10.8         Further Assurances.

 

(a)           Notes Agent agrees that it shall, for itself and on behalf of the Notes Secured Parties, take such further action and shall execute and deliver to Revolving Loan Agent such additional documents and instruments (in recordable form, if requested) as Revolving Loan Agent may reasonably request to effectuate the terms of and the lien priorities contemplated by this Agreement.

 

(b)           Revolving Loan Agent agrees that it shall, for itself and on behalf of the Revolving Loan Secured Parties, take such further action and shall execute and deliver to Notes Agent such additional documents and instruments (in recordable form, if requested) as Notes Agent may reasonably request to effectuate the terms of and the lien priorities contemplated by this Agreement.

 

10.9         Waiver of Jury Trial.  EACH OF THE PARTIES HERETO WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT.

 

10.10       Governing Law.  The validity, construction and effect of this Agreement shall be governed by the internal laws of the State of New York but excluding any principles of conflicts of law or any other rule of law that would result in the application of the law of any jurisdiction other than the laws of the State of New York.

 

10.11       Binding on Successors and Assigns.  This Agreement shall be binding upon Revolving Loan Agent, the other Revolving Loan Secured Parties, Notes Agent, the other Notes Secured Parties, Grantors and their respective permitted successors and assigns.

 

  

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10.12       Specific Performance.

 

(a)           Revolving Loan Agent may demand specific performance of this Agreement. Notes Agent, for itself and on behalf of the Notes Secured Parties, hereby irrevocably waives any defense based on the adequacy of a remedy at law and any other defense which might be asserted to bar the remedy of specific performance in any action which may be brought by Revolving Loan Agent.

 

(b)           Notes Agent may demand specific performance of this Agreement. Revolving Loan Agent, for itself and on behalf of the Revolving Loan Secured Parties, hereby irrevocably waives any defense based on the adequacy of a remedy at law and any other defense which might be asserted to bar the remedy of specific performance in any action which may be brought by Notes Agent.

 

10.13       Section Titles; Time Periods.  The section titles contained in this Agreement are and shall be without substantive meaning or content of any kind whatsoever and are not a part of this Agreement.

 

10.14       Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be an original and all of which shall together constitute one and the same document.  Delivery of an executed counterpart of a signature page of this Agreement or any document or instrument delivered in connection herewith by facsimile transmission or electronic transmission (in pdf format) shall be effective as delivery of a manually executed counterpart of this Agreement or such other document or instrument, as applicable.

 

10.15       Authorization.   By its signature, each Person executing this Agreement on behalf of a party hereto represents and warrants to the other parties hereto that it is duly authorized to execute this Agreement.

 

10.16       No Third Party Beneficiaries.  This Agreement and the rights and benefits hereof shall inure to the benefit of each of the parties hereto and their respective successors and assigns and shall inure to the benefit of each of the holders of Revolving Loan Debt and Notes Debt. No other Person shall have or be entitled to assert rights or benefits hereunder.

 

10.17       Additional Grantors.  B&L Supply shall cause each of its subsidiaries that becomes a Grantor to acknowledge and consent to the terms of this Agreement by causing such subsidiary to execute and deliver to the parties hereto a Grantor Joinder, substantially in the form of Annex B hereto, pursuant to which such subsidiary shall agree to be bound by the terms of the attached Acknowledgment and Agreement to the same extent as if it had executed and delivered same as of the date hereof.

 

  

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

 

[Remainder of Page Intentionally Left Blank]

 

  

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

 

 

	
REVOLVING LOAN AGENT

 

	
NOTES AGENT

	
REGIONS BANK,

 as Revolving Loan Agent

 

By:           /s/ Jon Eckhouse

Name:      Jon Eckhouse

Title:        Vice President

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

 as Notes Agent

 

By:           /s/ Teresa Petta

Name:      Teresa Petta

Title:        Vice President

 

 

 

 

 

[Signature Page to Intercreditor Agreement-Bourland]

 

  

  

  

 

ACKNOWLEDGMENT AND AGREEMENT

Each of the undersigned hereby acknowledges and agrees to the representations, terms and provisions of the Intercreditor Agreement among REGIONS BANK, in its capacity as agent for the Revolving Loan Secured Parties (in such capacity, the “Revolving Loan Agent”) and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., in its capacity as agent for the Notes Secured Parties (in such capacity, “Notes Agent”), of which this Acknowledgment and Agreement is a part.  By its signature below, the undersigned agrees that it will, together with its successors and assigns, be bound by the provisions hereof.

 

Each of the undersigned agrees that (a) if either the Revolving Loan Agent or the Notes Agent holds Collateral it does so as bailee (under the UCC) for the other and is hereby authorized to and may turn over to such other Secured Party upon request therefor any such Collateral as provided in the Intercreditor Agreement, and (b) it will execute and deliver such additional documents and take such additional action as may be necessary in the reasonable opinion of the Revolving Loan Agent or the Notes Agent to effectuate the provisions and purposes of the foregoing Intercreditor Agreement.  B&L Supply agrees to provide to the Notes Agent and the Revolving Loan Agent a copy of each Grantor Joinder hereto executed and delivered pursuant to Section 10.17 of the Intercreditor Agreement.

 

Each of the undersigned acknowledges and agrees that: although it may sign this Agreement it is not a party hereto and does not and will not receive any right, benefit, priority or interest under or because of the existence of the foregoing Agreement, a breach by the undersigned of any of its obligations under the Intercreditor Agreement or this Acknowledgment and Agreement will constitute an Event of Default to the extent provided under the terms of each of the Revolving Loan Agreement and the Indenture.

 

[SIGNATURE PAGE FOLLOWS]

 

  

  

  

 

	  	  
	  	
BOURLAND & LEVERICH SUPPLY CO. LLC

 

By:           /s/ David L. Laxton, III

Name:      David L. Laxton, III

Title:        Executive Vice President

	  	  
	  	  
	  	  
	  	  

 

 

 

 

 

[Signature Page to Acknowledgment to Intercreditor Agreement-Bourland]

 

  

  

  

 

Annex A

to

Intercreditor Agreement

 

Revolving Loan Priority Collateral

 

All of each Grantor’s, now owned or hereafter acquired:

 

(a)           Accounts (as defined below);

 

(b)           Inventory (as defined below);

 

(c)           Related Intangibles (as defined below);

 

(d)           Receivables (as defined below);

 

(e)           tax refunds and tax refund claims;

 

(f)           investment property (as defined in the UCC) consisting of cash and Cash Equivalents (as defined below);

 

(g)           ledgers, books of account, records, software, tapes, cards, computer programs, computer disks or tapes, computer printouts, computer runs, and other computer prepared information relating solely to any of the foregoing;

 

(h)           all deposit accounts (as defined in the UCC); and

 

(i)           products and Proceeds of the foregoing, in any form, including insurance proceeds and all claims against third parties for loss or damage to or destruction of or other involuntary conversion of any kind or nature of any or all of the foregoing Collateral.

 

 *  *  *  *  * *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *

 

“Account Debtor” shall mean any Person who is or who may become obligated to any Grantor under, with respect to, or on account of an Account.

 

“Accounts” shall mean all present and future rights of an Grantor to payment of a monetary obligation, whether or not earned by performance, which is not evidenced by chattel paper or an instrument, (a) for Inventory that has been or is to be sold, leased, licensed, assigned or otherwise disposed of, (b) for services rendered or to be rendered, (c) for a secondary obligation supporting the payment or performance of Accounts incurred or to be incurred, or (d) arising out of the use of a credit card or charge card or information contained on or for use with the card with respect to the payment of amounts constituting Accounts.

 

“Cash Equivalents” shall have the meaning as set forth in the Revolving Loan Agreement as in effect on the date hereof.

 

  

Annex A-1

  

 

“Inventory” means “inventory”, as such term is defined in the UCC, and inventory, goods, and merchandise to be furnished under any contract of service or held for sale or lease, returned goods, raw materials, work-in-process, finished goods (including embedded software), other materials and supplies of any kind, nature, or description which are used or consumed in a Person’s business or used in connection with the packing, shipping, advertising, selling, or finishing of such goods, merchandise, and all documents of title or other documents representing them.

 

“Receivables” shall mean the following now owned or hereafter arising or acquired property of an Grantor: (a) all Accounts; (b) all interest, fees, late charges, penalties, collection fees and other amounts due or to become due or otherwise payable in connection with any Account; (c) all instruments evidencing Accounts or Inventory, including, without limitation, all promissory notes relating to the foregoing; (d) all chattel paper with respect to, or otherwise representing or evidencing, Accounts or Inventory; (e) all documents representing or evidencing, Accounts or Inventory;  and (f) the Proceeds of all of the foregoing.

 

“Related Intangibles” shall mean (a) payment intangibles, contract rights, commercial tort claims, choses in action or causes of actions or claims arising out of or supporting the payment or performance of Accounts or Inventory; (b) guaranty or warranty claims with respect to Accounts or Inventory; (c) all letters of credit, banker’s acceptances and similar instruments of each Grantor supporting or received in consideration for any Inventory or Accounts of an Grantor; (d) all supporting obligations evidencing Accounts with respect to such Grantor and all present and future liens, security interests, rights, remedies, title and interest supporting or received or receivable in respect of Inventory and Accounts of an Grantor, including (i) rights and remedies under or relating to guaranties, indemnities, contracts of suretyship, letters of credit and credit and other insurance, (ii) rights of stoppage in transit, replevin, repossession, reclamation and other rights and remedies of an unpaid vendor, lienor or secured party, (iii) goods described in invoices, documents, contracts or instruments with respect to, or otherwise representing or evidencing, Accounts, including returned, repossessed and reclaimed goods, and (iv) deposits by and property of Account Debtors or other Persons securing the obligations of Account Debtors, in each case for purposes of clauses (d)(i) through (iv), to the extent supporting or securing, or arising from, Accounts or Inventory of such Grantor, and (e) monies, credit balances, deposits and other property of each Grantor constituting proceeds of Accounts, Inventory or any of the foregoing now or hereafter held or received by or in transit to Revolving Loan Secured Parties or its affiliates or at any other depository or other institution from or for the account of any Grantor, whether for safekeeping, pledge, custody, transmission, collection or otherwise.

 

  

Annex A-2

  

 

Annex B

to

Intercreditor Agreement

 

Form of Grantor Joinder

 

Reference is made to that certain Intercreditor Agreement, dated as of October 16, 2012 (as amended, amended and restated, renewed, extended, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Intercreditor Agreement”), among REGIONS BANK, in its capacity as agent for the Revolving Loan Secured Parties (in such capacity, the “Revolving Loan Agent”) and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., in its capacity as agent for the Notes Secured Parties (in such capacity, “Notes Agent”).  Capitalized terms used herein without definition shall have the meaning assigned thereto in the Intercreditor Agreement.

 

This Grantor Joinder, dated as of ________ __, 20__ (this “Grantor Joinder”), is being delivered pursuant to Section 10.17 of the Intercreditor Agreement.

 

The undersigned, __________, a __________ (the “Additional Grantor”), hereby agrees to become a party to the Intercreditor Agreement as a Grantor thereunder, for all purposes thereof on the terms set forth therein, and to be bound by the terms of the Intercreditor Agreement as fully as if the Additional Grantor had executed and delivered the Intercreditor Agreement as of the date thereof.

 

This Grantor Joinder may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute one contract.

 

THIS GRANTOR JOINDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

The provisions of Section 10 of the Intercreditor Agreement shall apply with like effect to this Grantor Joinder.

 

[Signature Pages Follow]

 

  

Annex B-1

  

 

IN WITNESS WHEREOF, the Additional Grantor has caused this Grantor Joinder to be duly executed by its authorized representative as of the day and year first above written.

 

[ADDITIONAL GRANTOR]

By:                                                                       

Name:                                                                 

Title:                                                                   

 

 

Annex B-2Unassociated Document

Exhibit 10.2

INTERCREDITOR AGREEMENT

 

This INTERCREDITOR AGREEMENT, is dated as of October 16, 2012 (as amended, restated, renewed, extended, supplemented or otherwise modified from time to time this “Agreement”), is entered into by and among (1) EDGEN MURRAY CORPORATION, a Nevada corporation (the “US Borrower”), (2) EM HOLDINGS LLC, a Delaware limited liability company (“Holdings”), (3) JPMORGAN CHASE BANK, N.A., in its capacity as collateral agent for the Revolving Credit Obligations (“U.S. Revolving Credit Collateral Agent”), (4) JPMORGAN CHASE BANK, N.A., in its capacity as U.S. administrative agent for the Revolving Credit Obligations (“U.S. Revolving Credit Administrative Agent”), and (5) THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. in its capacity as collateral agent for the Notes Obligations (as defined below) (including its successors and assigns from time to time, the “Notes Collateral Agent”).  Capitalized terms used in this Agreement have the meanings assigned to them in Section 1 below.

RECITALS

 

A.           The Borrowers, the Revolving Credit Guarantors, the Revolving Credit Lenders, the Revolving Credit Collateral Agents and the Revolving Credit Administrative Agents have entered into a Credit Agreement, dated as of May 11, 2007, providing for revolving credit facilities (as amended, restated, supplemented, modified, replaced or refinanced from time to time, the “Revolving Credit Agreement”);

 

B.           The US Borrower, Edgen Group, Inc. a Delaware corporation (the “Parent”), EDG Holdco LLC, a Delaware limited liability company (“EDG Holdco”), Holdings, Bourland & Leverich Supply Co. LLC (“B&L Supply”) and The Bank of New York Mellon Trust Company, N.A., as trustee (in such capacity, including its successors and assigns from time to time, the “Notes Trustee”)  have entered into an Indenture, dated as of the date hereof (the “Indenture”), governing the US Borrower’s 8.75% Senior Secured Notes due 2020 (the “Notes”) issued thereunder;

 

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

 

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

 

  

  

  

 

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

 

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

 

AGREEMENT

 

In consideration of the foregoing, the mutual covenants and obligations herein set forth and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

SECTION 1.  Definitions.

 

1.1          Defined Terms.

 

As used in the Agreement, the following terms shall have the following meanings:

 

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

 

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

 

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

 

  

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

 

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

 

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

 

“B&L Supply” has the meaning assigned to such term in the Recitals to this Agreement.

 

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

 

(a)           commercial credit cards;

 

(b)           stored value cards; and

 

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

 

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

 

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

 

“Bankruptcy Code” means Title 11 of the United States Code entitled “Bank­ruptcy,” as now and hereafter in effect, or any successor statute.

 

“Bankruptcy Law” means the Bankruptcy Code and any similar federal, state or foreign law for the relief of debtors in any applicable jurisdiction.

 

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

 

  

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

 

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

 

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

 

“Canadian Revolving Credit Administrative Agent” means JPMorgan Chase Bank, N.A., Toronto Branch, and any of its successors or assigns from time to time.

 

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

 

“Capital Stock” means:

 

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

 

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

 

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

 

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

 

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

 

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

 

“Capital Stock Collateral” means:

 

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

 

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

 

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

 

  

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“DIP Financing Cap Amount” means an aggregate amount of $25,000,000.

 

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

 

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

 

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

 

  

5

  

 

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

 

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

 

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

 

(b)           payment in full in cash of the principal of and interest (including interest accruing on or after the commencement of any Insolvency or Liquidation Proceeding, whether or not such interest would be allowed in such Insolvency or Liquidation Proceeding), on all Indebtedness outstanding under the Revolving Credit Documents and constituting Revolving Credit Obligations;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

  

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

 

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

 

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

 

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

 

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

 

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

 

  

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Insolvency or Liquidation Proceeding” means:

 

(a)           any voluntary or involuntary case or proceeding under the Bankruptcy Code with respect to any Grantor;

 

(b)           any other voluntary or involuntary insolvency, reorganization or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding with respect to any Grantor or with respect to a material portion of its assets;

 

(c)           any liquidation, dissolution, reorganization or winding up of any Grantor whether voluntary or involuntary and whether or not involving insolvency or bankruptcy; or

 

(d)           any assignment for the benefit of creditors or any other marshalling of assets and liabilities of any Grantor.

 

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

 

  

8

  

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

  

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)           all Equipment;

 

(c)           all Capital Stock Collateral;

 

(d)           all Real Estate Assets;

 

(e)           all Intellectual Property;

 

(f)           all Notes General Intangibles;

 

(g)           the Net Cash Proceeds Account;

 

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

 

  

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

  

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“Notes Obligations” means the following:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

  

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Revolving Credit Cap Amount” means the greater of (a) $195,000,000 less the amount of all mandatory prepayments of any loans to the extent accompanied by a corresponding reduction in the applicable Revolving Commitments (excluding reductions in sub-facility commitments not accompanied by a corresponding reduction in the applicable Revolving Commitments) and (b) the Borrowing Base (as such term is defined in the Indenture).

 

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

 

  

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“Revolving Credit Collateral” means all of the assets and property of any Grantor, whether real, personal or mixed, with respect to which a Lien is granted as security for any Revolving Credit Obligations.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

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

 

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

 

  

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

  

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Singapore Revolving Credit Administrative Agent” means The Hongkong and Shanghai Banking Corporation Limited, and any of its successors or assigns from time to time.

 

  

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“Singapore Revolving Credit Collateral Agent” means The Hongkong and Shanghai Banking Corporation Limited, and any of its successors or assigns from time to time.

 

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

 

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

 

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

 

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

 

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

 

“UK Revolving Credit Administrative Agent” means J.P. Morgan Europe Limited, and any of its successors or assigns from time to time.

 

“UK Revolving Credit Collateral Agent” means J.P. Morgan Europe Limited, and any of its successors or assigns from time to time.

 

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

 

  

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

 

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

 

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

 

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

 

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

 

1.2           Terms Generally.  The definitions of terms in this Agreement shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise:

 

(a)           any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented, modified, renewed or extended;

 

(b)           any reference herein to any Person shall be construed to include such Person’s permitted successors and assigns;

 

(c)           the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof;

 

(d)           all references herein to Sections shall be construed to refer to Sections of this Agreement;

 

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

 

(f)           the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

  

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SECTION 2.  Lien Priorities.

 

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

 

2.2           Notes Collateral.  The US Revolving Credit Collateral Agent, on behalf of itself and the Revolving Credit Claimholders, acknowledges that it does not have and, prior to the Discharge of the Notes Obligations, shall not have a Lien on the Notes Collateral.  If for any reason the US Revolving Credit Collateral Agent, on behalf of itself and the Revolving Credit Claimholders, obtains a Lien on the Notes Collateral, any Lien of the Notes Collateral Agent on the Notes Collateral, whether now or hereafter held by or on behalf of the Notes Collateral Agent or any Notes Claimholder or any agent or trustee therefor, regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be senior in all respects and prior to all Liens on the Notes Collateral securing any Revolving Credit Obligations.

 

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

 

  

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SECTION 3.  Enforcement.

 

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

 

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

 

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

 

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

 

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

 

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

 

  

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

 

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

 

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

 

(3)           file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any Person objecting to or otherwise seeking the disallowance of the claims of the Notes Claimholders, including any claims secured by the Revolving Credit Primary Collateral, if any, in each case in accordance with the terms of this Agreement;

 

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

 

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

 

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

 

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

 

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

 

  

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

 

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

 

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

 

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

 

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

 

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

 

  

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

 

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

 

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

 

  

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

 

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

 

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

 

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

 

  

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

 

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

 

SECTION 4.  Payments.

 

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

 

  

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

 

SECTION 5.  Other Agreements.

 

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

 

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

 

  

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(c)           Until the Discharge of Revolving Credit Obligations shall occur, the Notes Collateral Agent, for itself and/or on behalf of the Notes Claimholders, hereby irrevocably constitutes and appoints the US Revolving Credit Collateral Agent and any of its officers or agents, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of the Notes Collateral Agent or such Notes Claimholder, whether in the US Revolving Credit Collateral Agent’s name or, at the option of the US Revolving Credit Collateral Agent, in the Notes Collateral Agent’s or any Notes Claimholder’s own name, from time to time in the US Revolving Credit Collateral Agent’s discretion, for the purpose of carrying out the terms of this Section 5.1, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary to accomplish the purposes of this Section 5.1, including any endorsements or other instruments of transfer or release.

 

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

 

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

 

  

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

 

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

 

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

 

“Notwithstanding anything herein to the contrary, the lien and security interest in certain Collateral granted to the Notes Collateral Agent or other Person, as applicable pursuant to this Agreement and the exercise of any right or remedy by the Notes Collateral Agent or other Person, as applicable in respect of such Collateral hereunder are subject to the provisions of the Intercreditor Agreement, dated as of October 16, 2012 (as amended, restated, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”), among (1) EDGEN MURRAY CORPORATION, a Nevada corporation, (2) EM HOLDINGS LLC, a Delaware limited liability company, (3) JPMORGAN CHASE BANK, N.A., in its capacity as U.S. collateral agent for the Revolving Credit Obligations, (4) JPMORGAN CHASE BANK, N.A., in its capacity as U.S. administrative agent for the Revolving Credit Obligations, and (5) THE BANK OF NEW YORK MELLON, in its capacity as collateral agent for the Notes Obligations and certain other persons which may be or become parties thereto or become bound thereto from time to time.  In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control.  The foregoing is only applicable to any Revolving Credit Primary Collateral as defined in the Intercreditor Agreement.”

 

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

 

  

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

 

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

 

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

 

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

 

  

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

 

SECTION 6.  Insolvency or Liquidation Proceedings.

 

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

 

  

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

 

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

 

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

 

  

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

 

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

 

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

 

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

 

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

 

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

 

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

 

  

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

 

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

 

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

 

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

 

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

 

  

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6.4           Avoidance Issues.  If any Revolving Credit Claimholder or Notes Claimholder is required in any Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise pay to the estate of any Grantor any amount paid in respect of Revolving Credit Obligations or the Notes Obligations, as the case may be (a “Recovery”), then such Revolving Credit Claimholders or Notes Claimholders shall be entitled to a reinstatement of Revolving Credit Obligations or Notes Obligations, as the case may be, with respect to all such recovered amounts.  If this Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto from such date of reinstatement.

 

6.5           Reorganization Securities.

 

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

 

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

 

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

 

  

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6.7           Separate Grants of Security and Separate Classification.

 

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

 

6.8           Waiver.

 

Each Agent, for itself and on behalf of the Claimholders, waives any claim it may hereafter have against any other Claimholder arising out of the election of such Claimholder of the application of Section 1111(b)(2) of the Bankruptcy Code, and/or out of any cash collateral or financing arrangement or out of any grant of a security interest in connection with the Collateral in any Insolvency or Liquidation Proceeding.

 

SECTION 7.  Reliance; Waivers; Etc.

 

7.1           Reliance.  Other than any reliance on the terms of this Agreement, the US Revolving Credit Collateral Agent, on behalf of itself and the Revolving Credit Claimholders under its Revolving Credit Documents, acknowledges that it and such Revolving Credit Claimholders have, independently and without reliance on the Notes Collateral Agent or any Notes Claimholders, and based on documents and information deemed by them appropriate, made their own credit analysis and decision to enter into the amendments to the Revolving Credit Documents, to provide certain consents in connection therewith and be bound by the terms of this Agreement and they will continue to make their own credit decision in taking or not taking any action under the Revolving Credit Documents or this Agreement.  The Notes Collateral Agent, on behalf of itself and the Notes Claimholders under the Notes Documents, acknowledges that it and the Notes Claimholders have, independently and without reliance on the US Revolving Credit Collateral Agent or any Revolving Credit Claimholder, and based on documents and information deemed by them appropriate, made their own credit analysis and decision to enter into such Notes Documents and be bound by the terms of this Agreement and they will continue to make their own credit decision in taking or not taking any action under the Notes Documents or this Agreement.

 

  

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

 

7.3           No Waiver of Lien Priorities.

 

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

 

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

 

(1)           change the manner, place or terms of payment or change or extend the time of payment of, or amend, renew, exchange, increase or alter, the terms of any of the Obligations or any Lien or guaranty thereof or any liability of any Grantor, or any liability incurred directly or indirectly in respect thereof (including any increase in or extension of the Obligations, without any restriction as to the tenor or terms of any such increase or extension) or otherwise amend, renew, exchange, extend, modify or supplement in any manner any Liens held by the US Revolving Credit Collateral Agent or the Notes Collateral Agent or any rights or remedies under any of the Revolving Credit Documents or the Notes Documents; provided that any such increase in the Revolving Credit Obligations shall not (subject to the provisions of Section 6.1) increase the sum of the Loans (as defined in the Revolving Credit Agreement) constituting principal under the Revolving Credit Agreement and the face amount of any letters of credit issued under the Revolving Credit Agreement and not reimbursed to an amount in excess of the Revolving Credit Cap Amount;

 

  

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

 

(3)           settle or compromise any Obligation or any other liability of any Grantor or any security therefor or any liability incurred directly or indirectly in respect thereof and apply any sums by whomsoever paid and however realized to any liability in any manner or order that is not inconsistent with the terms of this Agreement; and

 

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

 

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

 

(1)           the Revolving Credit Documents;

 

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

 

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

 

(d)           Until the Discharge of Revolving Credit Obligations, the Notes Collateral Agent, on behalf of itself and the Notes Claimholders, agrees not to assert and hereby waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or otherwise claim the benefit of, any marshaling, appraisal, valuation or other similar right that may otherwise be available under applicable law with respect to the Revolving Credit Primary Collateral or any other similar rights a junior secured creditor may have under applicable law with respect to the Revolving Credit Primary Collateral.

 

  

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

 

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

 

(b)           except as otherwise expressly set forth in this Agreement, any change in the time, manner or place of payment of, or in any other terms of, all or any of the Revolving Credit Obligations or Notes Obligations, or any amendment or waiver or other modification, including any increase in the amount thereof, whether by course of conduct or otherwise, of the terms of any Revolving Credit Document or any Notes Document;

 

(c)           except as otherwise expressly set forth in this Agreement, any exchange of any security interest in any Collateral or any other collateral, or any amendment, waiver or other modification, whether in writing or by course of conduct or otherwise, of all or any of the Revolving Credit Obligations or Notes Obligations or any guaranty thereof;

 

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

 

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

 

SECTION 8.  Miscellaneous.

 

8.1           Conflicts.  In the event of any conflict between the provisions of this Agreement and the provisions of any Revolving Credit Document or any Notes Document, the provisions of this Agreement shall govern and control.

 

8.2           Effectiveness; Continuing Nature of this Agreement; Severability.  This Agreement shall become effective when executed and delivered by the parties hereto.  This is a continuing agreement of lien subordination and the US Revolving Credit Collateral Agent, the Revolving Credit Claimholders and the Notes Collateral Agent and the Notes Claimholders may continue, at any time and without notice to any Agent or any other Person, to extend credit and other financial accommodations and lend monies to or for the benefit of any Grantor in reliance hereon.  The US Revolving Credit Collateral Agent, on behalf of itself and the Revolving Credit Claimholders, and the Notes Collateral Agent, on behalf of itself and the Notes Claimholders, hereby waives any right it may have under applicable law to revoke this Agreement or any of the provisions of this Agreement.  The terms of this Agreement shall survive, and shall continue in full force and effect, in any Insolvency or Liquidation Proceeding.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  All references to any Grantor shall include such Grantor as debtor and debtor-in-possession and any receiver or trustee for any Grantor (as the case may be) in any Insolvency or Liquidation Proceeding.  This Agreement shall terminate and be of no further force and effect:

 

  

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

 

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

 

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

 

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

 

(a)           to make, and shall not make, any express or implied representation or warranty, including with respect to the accuracy, completeness, truthfulness or validity of any such information so provided;

 

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

 

(c)           to undertake any investigation; or

 

  

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(d)           to disclose any information, which pursuant to accepted or reasonable commercial finance practices, such party wishes to maintain confidential or is otherwise required to maintain confidential.

 

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

 

8.6           SUBMISSION TO JURISDICTION; WAIVERS.  EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING HERETO, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR ANY OTHER REVOLVING CREDIT DOCUMENT OR NOTES DOCUMENT SHALL AFFECT ANY RIGHT THAT THE US REVOLVING CREDIT COLLATERAL AGENT OR THE NOTES COLLATERAL AGENT OR ANY REVOLVING CREDIT CLAIMHOLDER OR NOTES CLAIMHOLDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER REVOLVING CREDIT DOCUMENT OR NOTES DOCUMENT AGAINST ANY GRANTOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

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

 

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

 

  

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

 

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

 

8.8           Further Assurances.  The US Revolving Credit Collateral Agent on behalf of itself and the Revolving Credit Claimholders, the Notes Collateral Agent on behalf of the Notes Claimholders, and the Grantors, each agree that each of them shall take such further action and shall execute and deliver such additional documents and instruments (in recordable form, if requested) as the US Revolving Credit Collateral Agent or the Notes Collateral Agent may reasonably request to effectuate the terms of and the Lien priorities contemplated by this Agreement.  Without limiting the generality of the foregoing, all such Persons agree upon request by the US Revolving Credit Collateral Agent or the Notes Collateral Agent, to cooperate in good faith (and to direct their counsel to cooperate in good faith) from time to time in order to determine the specific items included in the Revolving Credit Collateral or Notes Collateral, as applicable, and the steps taken to perfect their respective Liens thereon and the identity of the respective parties obligated under the Revolving Credit Documents and the Notes Documents.

 

  

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

 

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

 

8.11           Specific Performance.  The US Revolving Credit Collateral Agent and the Notes Collateral Agent may demand specific performance of this Agreement.  The US Revolving Credit Collateral Agent, on behalf of itself and the Revolving Credit Claimholders, and the Notes Collateral Agent, on behalf of itself and the Notes Claimholders, each hereby irrevocably waives any defense based on the adequacy of a remedy at law and any other defense which might be asserted to bar the remedy of specific performance in any action which may be brought by the Revolving Credit Collateral Agent or the Revolving Credit Claimholders or the Notes Collateral Agent or the Notes Claimholders, as the case may be.

 

8.12           Headings.  Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect.

 

8.13           Counterparts.  This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  Delivery of an executed counterpart of a signature page of this Agreement or any document or instrument delivered in connection herewith by telecopier shall be effective as delivery of a manually executed counterpart of this Agreement or such other document or instrument, as applicable.

 

8.14           Authorization.  By its signature, each Person executing this Agreement on behalf of a party hereto represents and warrants to the other parties hereto that it is duly authorized to execute this Agreement.

 

8.15           No Third Party Beneficiaries.  This Agreement and the rights and benefits hereof shall inure to the benefit of each of the parties hereto and its respective successors and assigns and shall inure to the benefit of each of the Revolving Credit Collateral Agents, the Notes Collateral Agent, the Revolving Credit Claimholders and the Notes Claimholders.  Nothing in this Agreement shall impair, as between the Grantors and the Revolving Credit Collateral Agents and the Revolving Credit Claimholders, or as between the Grantors and the Notes Collateral Agent and the Notes Claimholders, the obligations of the Grantors to pay principal, interest, fees and other amounts as provided in the Revolving Credit Documents and the Notes Documents, respectively.

 

  

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

 

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

 

[Remainder of page intentionally left blank.]

 

  

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

 

 

	 	
JPMORGAN CHASE BANK, N.A.,

	 
	 	as U.S. Revolving Credit Collateral Agent and	 
	 	U.S. Revolving Credit Administrative Agent	 
	 	 	 
	 	 	 
	
 

	
By: 

	/s/ Timothy J. Whitefoot	 
	 	 	Name:   Timothy J. Whitefoot	 
	 	 	Title:     Vice President	 
	 	 	 	 
	 	 	 	 
	 	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,	 
	 	as Notes Collateral Agent	 
	 	 	 
	 	 	 
	 	By:	/s/ Teresa Petta	 
	 	 	Name:   Teresa Petta	 
	 	 	Title:     Vice President	 

 

[Signature Page to Intercreditor Agreement]

  

  

  

Acknowledged and Agreed to by:

 

EDGEN MURRAY CORPORATION,

as U.S. Borrower

 

 

	
By: 

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

 

 

EM HOLDINGS LLC,

as Holdings

 

 

	
By: 

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

 

[Signature Page to Intercreditor Agreement]

 

  

  

  

ANNEX I

Notice Information

U.S. Revolving Credit Collateral Agent

JPMorgan Chase Bank, N.A.

2200 Ross Avenue, 9th Floor

Mail Code # TX1-2921

Dallas, Texas 75201

Attention: Timothy J. Whitefoot

Telecopy: (214) 965-4731

Notes Collateral Agent

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

10161 Centurion Pkwy. N., 2nd Floor

Jacksonville, Florida 32256

Attention:  Geraldine Creswell, Vice President

Telecopy:  (904) 645-1921

Telephone:  (904) 998-4724

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