EXHIBIT 10.2
EXECUTION COPY
COLLATERAL TRUST AGREEMENT
dated as of February 11, 2005
among
BUILDERS FIRSTSOURCE, INC.,
the other Pledgors from time to time party hereto,
UBS AG, STAMFORD BRANCH,
as Administrative Agent under the Credit Agreement,
WILMINGTON TRUST COMPANY,
as Trustee under the Indenture
UBS AG, STAMFORD BRANCH,
as Priority Collateral Trustee
and
UBS AG, STAMFORD BRANCH,
as Parity Collateral Trustee
TABLE OF CONTENTS
Page
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ARTICLE 1. DEFINITIONS; PRINCIPLES OF CONSTRUCTION............................................ 2
SECTION 1.1 Defined Terms....................................................... 2
SECTION 1.2 Rules of Interpretation............................................. 13
ARTICLE 2. THE TRUST ESTATES.................................................................. 14
SECTION 2.1 Declaration of Senior Trust......................................... 14
SECTION 2.2 Declaration of Junior Trust......................................... 15
SECTION 2.3 Priority of Liens................................................... 16
SECTION 2.4 Restrictions on Enforcement of Parity Liens......................... 17
SECTION 2.5 Waiver of Right of Marshalling...................................... 19
SECTION 2.6 Discretion in Enforcement of Priority Liens......................... 19
SECTION 2.7 Discretion in Enforcement of Priority Lien Obligations.............. 20
SECTION 2.8 Insolvency or Liquidation Proceedings............................... 20
SECTION 2.9 Collateral Shared Equally and Ratably within Class.................. 21
ARTICLE 3. OBLIGATIONS AND POWERS OF COLLATERAL TRUSTEE....................................... 21
SECTION 3.1 Undertaking of the Collateral Trustee............................... 21
SECTION 3.2 Release or Subordination of Liens................................... 22
SECTION 3.3 Enforcement of Liens................................................ 23
SECTION 3.4 Application of Proceeds............................................. 23
SECTION 3.5 Powers of the Collateral Trustee.................................... 25
SECTION 3.6 Documents and Communications........................................ 25
SECTION 3.7 For Sole and Exclusive Benefit of Holders of Secured Obligations.... 25
SECTION 3.8 Additional Secured Debt............................................. 25
ARTICLE 4. OBLIGATIONS ENFORCEABLE BY THE BORROWER AND THE OTHER PLEDGORS.................... 26
SECTION 4.1 Release of Liens on Collateral...................................... 26
SECTION 4.2 Delivery of Copies to Secured Debt Representatives.................. 28
SECTION 4.3 Collateral Trustee not Required to Serve, File or Record............ 28
SECTION 4.4 Release of Liens in Respect of Notes................................ 29
ARTICLE 5. IMMUNITIES OF THE COLLATERAL TRUSTEE............................................... 29
SECTION 5.1 No Implied Duty..................................................... 29
SECTION 5.2 Appointment of Agents and Advisors.................................. 29
SECTION 5.3 Other Agreements.................................................... 29
SECTION 5.4 Solicitation of Instructions........................................ 30
SECTION 5.5 Limitation of Liability............................................. 30
SECTION 5.6 Documents in Satisfactory Form...................................... 30
SECTION 5.7 Entitled to Rely.................................................... 30
SECTION 5.8 Secured Debt Default................................................ 31
SECTION 5.9 Actions by Collateral Trustee....................................... 31
SECTION 5.10 Security or Indemnity in favor of the Collateral Trustee............ 31
SECTION 5.11 Rights of the Collateral Trustee.................................... 31
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SECTION 5.12 Limitations on Duty of Collateral Trustee in Respect of Collateral.. 31
SECTION 5.13 Assumption of Rights, Not Assumption of Duties...................... 32
SECTION 5.14 No Liability for Clean Up of Hazardous Materials.................... 32
ARTICLE 6. RESIGNATION AND REMOVAL OF THE COLLATERAL TRUSTEE.................................. 33
SECTION 6.1 Resignation or Removal of Collateral Trustee........................ 33
SECTION 6.2 Appointment of Successor Collateral Trustee......................... 33
SECTION 6.3 Succession.......................................................... 33
SECTION 6.4 Merger, Conversion or Consolidation of Collateral Trustee........... 34
ARTICLE 7. MISCELLANEOUS PROVISIONS........................................................... 34
SECTION 7.1 Amendment........................................................... 34
SECTION 7.2 Voting.............................................................. 36
SECTION 7.3 Further Assurances.................................................. 36
SECTION 7.4 Perfection of Junior Trust Estate................................... 37
SECTION 7.5 Successors and Assigns.............................................. 37
SECTION 7.6 Delay and Waiver.................................................... 37
SECTION 7.7 Notices............................................................. 37
SECTION 7.8 Notice Following Discharge of Priority Lien Obligations............. 38
SECTION 7.9 Entire Agreement.................................................... 38
SECTION 7.10 Compensation; Expenses.............................................. 38
SECTION 7.11 Indemnity........................................................... 39
SECTION 7.12 Severability........................................................ 40
SECTION 7.13 Headings............................................................ 40
SECTION 7.14 Obligations Secured................................................. 40
SECTION 7.15 Governing Law....................................................... 40
SECTION 7.16 Consent to Jurisdiction............................................. 40
SECTION 7.17 Waiver of Jury Trial................................................ 41
SECTION 7.18 Counterparts........................................................ 41
SECTION 7.19 Effectiveness....................................................... 41
SECTION 7.20 Additional Pledgors................................................. 41
SECTION 7.21 Continuing Nature of this Agreement................................. 42
SECTION 7.22 Insolvency.......................................................... 42
SECTION 7.23 Rights and Immunities of Secured Debt Representatives............... 42
EXHIBIT A - Form of Collateral Trust Joinder
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This Collateral Trust Agreement (this "AGREEMENT") is dated as of February
11, 2005 and is by and among Builders FirstSource, Inc., a Delaware corporation
(the "BORROWER"), the Pledgors from time to time party hereto, UBS AG, Stamford
Branch, as Administrative Agent (as defined below), Wilmington Trust Company, as
Trustee (as defined below), and UBS AG, Stamford Branch, as Priority Collateral
Trustee and as Parity Collateral Trustee (each as defined herein).
RECITALS
The Borrower intends to enter into a Credit Agreement dated as of the date
hereof (as amended, supplemented, amended and restated or otherwise modified and
in effect from time to time, the "CREDIT AGREEMENT") among the Borrower, JLL
Building Products, LLC, certain subsidiaries of the Borrower as guarantors, the
Lenders party thereto, UBS Securities LLC and Deutsche Bank Securities Inc., as
joint arrangers and joint book runners, Deutsche Bank Trust Company Americas, as
syndication agent, UBS Loan Finance LLC, as swingline lender, and UBS AG,
Stamford Branch, as issuing bank, as administrative agent (in such capacity and
together with its successors, the "ADMINISTRATIVE AGENT"), and as collateral
trustee, which will provide for a $350,000,000 credit facility.
The Borrower intends to issue Floating Rate Second Priority Senior Secured
Notes due 2012 (including any related exchange notes, the "NOTES") in an
aggregate principal amount of $275,000,000 pursuant to an Indenture dated as of
the date hereof (as amended, supplemented, amended and restated or otherwise
modified and in effect from time to time, the "INDENTURE") among the Borrower,
the guarantors party thereto, Wilmington Trust Company, as trustee (in such
capacity and together with its successors in such capacity, the "TRUSTEE") and
UBS AG, Stamford Branch, as collateral trustee.
Capitalized terms used in this Agreement have the meanings assigned to
them above or in Article 1 below.
The Borrower and the other Pledgors intend to secure the Obligations under
the Credit Agreement and any future Priority Lien Debt on a priority basis and,
subject to such priority, intend to secure the Obligations under the Indenture
and any future Parity Lien Debt, with Liens on all present and future Collateral
to the extent that such Liens have been provided for in the applicable Security
Documents.
This Agreement sets forth the terms on which the Collateral Trustee will
act as the trustee for the present and future holders of the Secured Obligations
to receive, hold, maintain, administer and distribute the Collateral at any time
delivered to the Collateral Trustee or the subject of the Security Documents,
and to enforce the Security Documents and all interests, rights, powers and
remedies of the Collateral Trustee with respect thereto or thereunder and the
proceeds thereof.
AGREEMENT
In consideration of the premises and the mutual agreements herein set
forth, the receipt and sufficiency of which are hereby acknowledged, the parties
to this Agreement hereby agree as follows:
ARTICLE 1. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
SECTION 1.1 Defined Terms. The following terms will have the following
meanings:
"ACT OF REQUIRED DEBTHOLDERS" means, as to any matter at any time:
(1) prior to the Discharge of Priority Lien Obligations, a direction
in writing delivered to the Collateral Trustee by or with the written
consent of the holders of more than 50% of the sum of:
(a) the aggregate outstanding principal amount of Priority
Lien Debt (including outstanding letters of credit whether or not
then available or drawn); and
(b) other than in connection with the exercise of remedies,
the aggregate unfunded commitments to extend credit which, when
funded, would constitute Priority Lien Debt; and
(2) at any time after the Discharge of Priority Lien Obligations, a
direction in writing delivered to the Collateral Trustee by or with the
written consent of the holders of Parity Lien Debt representing the
Required Parity Lien Debtholders.
For purposes of this definition, (a) Secured Debt registered in the name of, or
beneficially owned by, the Borrower or any Affiliate of the Borrower will be
deemed not to be outstanding, and (b) votes will be determined in accordance
with Section 7.2.
"ADDITIONAL SECURED DEBT" has the meaning set forth in Section 3.8.
"ADMINISTRATIVE AGENT" has the meaning set forth in the recitals.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect 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
agreement or otherwise; provided, that beneficial ownership of 10% or more of
the Voting Stock of a Person will be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings.
"AGREEMENT" has the meaning set forth in the preamble.
"BOARD OF DIRECTORS" means (a) with respect to a corporation, the board of
directors of the corporation or any committee thereof duly authorized to act on
behalf of such board, (b) with respect to a partnership, the Board of Directors
of the general partner of the partnership, (c) with respect to a limited
liability company, the managing member or members or any controlling
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committee of managing members thereof and (d) with respect to any other Person,
the board or committee of such Person serving a similar function.
"BORROWER" has the meaning set forth in the preamble.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day on
which banking institutions in the City of New York or at a place of payment are
required by law, regulation or executive order to remain closed.
"CAPITAL STOCK" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership interests (whether general or limited) or membership
interests; and
(4) 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,
but excluding from all of the foregoing any debt securities convertible into
Capital Stock, whether or not such debt securities include any right of
participation with Capital Stock.
"CLASS" means (1) in the case of Parity Lien Debt, every Series of Parity
Lien Debt, taken together, and (2) in the case of Priority Lien Debt, every
Series of Priority Lien Debt, taken together.
"COLLATERAL" means, in the case of each Series of Secured Debt, all
properties and assets of the Borrower and the other Pledgors now owned or
hereafter acquired in which Liens have been granted to the Collateral Trustee to
secure the Secured Obligations, and shall exclude any properties and assets in
which the Collateral Trustee is required to release its Liens pursuant to
Section 3.2; provided, that, if such Liens are required to be released as a
result of the sale, transfer or other disposition of any properties or assets of
the Borrower or any other Pledgor, such assets or properties will cease to be
excluded from the Collateral if the Borrower or any other Pledgor thereafter
acquires or reacquires such assets or properties.
"COLLATERAL TRUSTEE" means each of the Priority Collateral Trustee and the
Parity Collateral Trustee, severally and not jointly, unless the context
specifically identifies that it means one of the foregoing by identifying the
parties for whom it is acting.
"COLLATERAL TRUST JOINDER" means an agreement substantially in the form of
Exhibit A.
"COMMON COLLATERAL" means Collateral that secures each Series of Secured
Debt of the same Class.
"CREDIT AGREEMENT" has the meaning set forth in the recitals.
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"CREDIT FACILITIES" means one or more debt facilities or commercial paper
facilities, in each case with banks or other institutional lenders providing for
revolving credit loans, term loans, receivables financing (including through the
sale of receivables to such lenders or to special purpose entities formed to
borrow from such lenders against such receivables) or letters of credit, in each
case, as amended, restated, modified, renewed, refunded, replaced or refinanced
(including by means of sales of debt securities to institutional investors) in
whole or in part from time to time, whether in one or more agreements.
"DISCHARGE OF PRIORITY LIEN OBLIGATIONS" means the occurrence of all of
the following:
(1) termination or expiration of all commitments to extend credit
that would constitute Priority Lien Debt;
(2) payment in full in cash of the principal of and interest and
premium (if any) on all Priority Lien Debt (other than any undrawn letters
of credit);
(3) discharge, cash collateralization (at the lower of (A) 105% of
the aggregate undrawn amount and (B) the percentage of the aggregate
undrawn amount required for release of liens under the terms of the
applicable Priority Lien Document) or collateralization with a letter of
credit in form and substance, and from a financial institution,
satisfactory to the respective Priority Lien Representatives (such letter
of credit to have a face amount equal to the lower of (1) 105% of the
aggregate undrawn amount and (2) the percentage of the aggregate undrawn
amount required for release of Liens under the terms of the applicable
Priority Lien Document) of all outstanding letters of credit constituting
Priority Lien Debt; and
(4) payment in full in cash of all other Priority Lien Obligations
that are outstanding and unpaid at the time the Priority Lien Debt 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).
"EQUALLY AND RATABLY" means, in reference to sharing of Liens or proceeds
thereof as between holders of Secured Obligations within the same Class, that
such Liens or proceeds:
(1) will be allocated and distributed first to the Secured Debt
Representative for each outstanding Series of Secured Debt within that
Class, for the account of the holders of such Series of Secured Debt,
ratably in proportion to the principal of, and interest and premium (if
any), reimbursement obligations (contingent or otherwise) with respect to
letters of credit, if any, outstanding (whether or not drawings have been
made under such letters of credit) and Hedging Obligations on each
outstanding Series of Secured Debt within that Class when the allocation
or distribution is made, and thereafter
(2) will be allocated and distributed (if any remain after payment
in full of all of the principal of, and interest and premium (if any) and
reimbursement obligations (contingent or otherwise) with respect to
letters of credit, if any, outstanding (whether or not drawings have been
made on such letters of credit) on all outstanding Secured
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Obligations within that Class) to the Secured Debt Representative for each
outstanding Series of Secured Debt within that Class, for the account of
the holders of any remaining Secured Obligations within that Class,
ratably in proportion to the aggregate unpaid amount of such remaining
Secured Obligations within that Class due and demanded (with written
notice to the applicable Secured Debt Representative and the Collateral
Trustee) prior to the date such distribution is made.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date hereof.
"GUARANTEE" means a guarantee, other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, by way of a pledge of assets or through
letters of credit or reimbursement agreements in respect thereof, of all or any
part of any Indebtedness (whether arising by virtue of partnership arrangements,
or by agreements to keep-well, to purchase assets, goods, securities or
services, to take or pay or to maintain financial statement conditions or
otherwise).
"GUARANTORS" means each of:
(1) Builders FirstSource - Northeast Group, LLC; Builders
FirstSource - Texas Genpar LLC; Builders FirstSource - MBS, LLC; Builders
FirstSource - Texas Group, L.P.; BFS Texas, LLC; Builders FirstSource -
South Texas, L.P.; Builders FirstSource - Texas Installed Sales, L.P.; BFS
IP, LLC; Builders FirstSource - Intellectual Property, L.P.; Builders
FirstSource Holdings, Inc.; Builders FirstSource - Dallas, LLC; Builders
FirstSource - Florida, LLC; Builders FirstSource - Florida Design Center,
LLC; Builders FirstSource - Ohio Valley, LLC; BFS, LLC, Builders
FirstSource - Atlantic Group, LLC; Builders FirstSource of Nashville,
Inc.; Builders FirstSource - Southeast Group, LLC; Builders FirstSource -
SNC, LLC; CCWP, Inc.; Builders FirstSource - Raleigh, LLC; Builders
FirstSource - Colorado Group, LLC; Builders FirstSource Colorado, LLC;
Builders FirstSource Financing, Inc.; and
(2) any other Subsidiary of the Borrower that executes a guarantee
in accordance with the provisions of the Credit Agreement and the
Indenture,
and their respective successors and assigns, in each case, until the guarantee
of such Person has been released in accordance with the provisions of the Credit
Agreement and the Indenture.
"HEDGING OBLIGATIONS" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements (whether from fixed to floating or
from floating to fixed), interest rate cap agreements and interest rate
collar agreements;
(2) other agreements or arrangements designed to manage interest
rates or interest rate risk; and
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(3) other agreements or arrangements designed to protect such Person
against fluctuations in currency exchange rates or commodity prices.
"INDEBTEDNESS" means, with respect to any specified Person, any
indebtedness of such Person (excluding accrued expenses and trade payables),
whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof);
(3) in respect of banker's acceptances and letters of credit;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase
price of any property or services due more than twelve months after such
property is acquired or such services are completed; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any Indebtedness of any other Person.
"INDEMNIFIED LIABILITIES" means any and all liabilities (including all
environmental liabilities), obligations, losses, damages, penalties, actions,
judgments, suits, costs, taxes, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, performance, administration
or enforcement of this Agreement or any of the Security Documents, including any
of the foregoing relating to the use of proceeds of any Secured Debt or the
violation of, noncompliance with or liability under, any law (including
environmental laws) applicable to or enforceable against the Borrower, any of
its Subsidiaries or any other Pledgor or any of the Collateral and all
reasonable costs and expenses (including reasonable fees and expenses of legal
counsel selected by the Indemnitee) incurred by any Indemnitee in connection
with any claim, action, investigation or proceeding in any respect relating to
any of the foregoing, whether or not suit is brought.
"INDEMNITEE" has the meaning set forth in Section 7.11(a).
"INDENTURE" has the meaning set forth in the recitals.
"INSOLVENCY OR LIQUIDATION PROCEEDING" means:
(1) any case commenced by or against the Borrower or any other
Pledgor under Title 11, U.S. Code or any similar federal or state law for
the relief of debtors, any
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other proceeding for the reorganization, recapitalization or adjustment or
marshalling of the assets or liabilities of the Borrower or any other
Pledgor, any receivership or assignment for the benefit of creditors
relating to the Borrower or any other Pledgor or any similar case or
proceeding relative to the Borrower or any other Pledgor or its creditors,
as such, in each case whether or not voluntary;
(2) any liquidation, dissolution, marshalling of assets or
liabilities or other winding up of or relating to the Borrower or any
other Pledgor, in each case whether or not voluntary and whether or not
involving bankruptcy or insolvency; or
(3) any other proceeding of any type or nature in which
substantially all claims of creditors of the Borrower or any other Pledgor
are determined and any payment or distribution is or may be made on
account of such claims.
"JUNIOR TRUST ESTATE" has the meaning set forth in Section 2.2.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"LIEN SHARING AND PRIORITY CONFIRMATION" means:
(1) as to any Series of Parity Lien Debt, the written agreement of
the holders of such Series of Parity Lien Debt or their representative, as
set forth in the indenture, credit agreement or other agreement governing
such Series of Parity Lien Debt, for the enforceable benefit of all
holders of each existing and future Series of Priority Lien Debt, each
existing and future Priority Lien Representative and each existing and
future holder of Permitted Prior Liens:
(a) that all Parity Lien Obligations will be and are secured
equally and ratably by all Parity Liens at any time granted by the
Borrower or any other Pledgor to secure any Obligations in respect
of such Series of Parity Lien Debt, upon property constituting
Common Collateral for such Series of Parity Lien Debt and each
existing and future Series of Parity Lien Debt, and that all such
Parity Liens will be enforceable by the Collateral Trustee for the
benefit of all holders of Parity Lien Obligations equally and
ratably;
(b) that the holders of Obligations in respect of such Series
of Parity Lien Debt are bound by the provisions of this Agreement,
including the provisions relating to the ranking of Parity Liens and
the order of application of proceeds from the enforcement of Parity
Liens; and
(c) consenting to and directing the Collateral Trustee to
perform its obligations under this Agreement and the Security
Documents; and
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(2) as to any Series of Priority Lien Debt, the written agreement of
the holders of such Series of Priority Lien Debt or their representative,
as set forth in the credit agreement or other agreement governing such
Series of Priority Lien Debt, for the enforceable benefit of all holders
of each existing and future Series of Parity Lien Debt, each existing and
future Parity Lien Representative and each existing and future holder of
Permitted Prior Liens:
(a) that all Priority Lien Obligations will be and are secured
equally and ratably by all Priority Liens at any time granted by the
Borrower or any other Pledgor to secure any Obligations in respect
of such Series of Priority Lien Debt, upon property constituting
Common Collateral for such Series of Priority Lien Debt and each
existing and future Series of Priority Lien Debt, and that all
Priority Liens with respect to such Priority Lien Debt will be
enforceable by the Collateral Trustee for the benefit of all holders
of Priority Lien Obligations;
(b) that the holders of Obligations in respect of such Series
of Priority Lien Debt are bound by the provisions of this Agreement,
including the provisions relating to the ranking of Priority Liens
and the order of application of proceeds from enforcement of
Priority Liens; and
(c) consenting to and directing the Collateral Trustee to
perform its obligations under this Agreement and the Security
Documents.
"NOTES" has the meaning set forth in the recitals.
"NOTE DOCUMENTS" means the Indenture, the Notes, this Agreement and the
Security Documents.
"OBLIGATIONS" means any principal (including reimbursement obligations
with respect to letters of credit whether or not drawn), interest (including all
interest accrued thereon after the commencement of any Insolvency or Liquidation
Proceeding at the rate, including any applicable post-default rate, specified in
the Priority Lien Documents, even if such interest is not enforceable, allowable
or allowed as a claim in such proceeding), premium (if any), fees,
indemnifications, reimbursements, expenses and other liabilities payable under
the documentation governing any Indebtedness.
"OFFICERS' CERTIFICATE" means a certificate with respect to compliance
with a condition or covenant provided for in this Agreement, signed on behalf of
the Borrower by two officers of the Borrower, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Borrower, including:
(1) a statement that the Person making such certificate has read
such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate are based;
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(3) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him or
her to express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(4) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
"PARITY COLLATERAL TRUSTEE" means UBS AG, Stamford Branch, as collateral
trustee under the Indenture for the benefit of the holders of the Parity Lien
Obligations.
"PARITY LIEN" means a Lien granted by a Security Document to the Parity
Collateral Trustee, at any time, upon any property of the Borrower or any other
Pledgor to secure Parity Lien Obligations.
"PARITY LIEN DEBT" means:
(1) the Notes issued on the date hereof (including any related
exchange notes); and
(2) any other Indebtedness (including additional Notes) that is
secured equally and ratably with the Notes by a Parity Lien that was
permitted to be incurred and so secured under each applicable Secured Debt
Document;
provided, that in the case of any Indebtedness referred to in clause (2)
of this definition, that:
(a) on or before the date on which such Indebtedness is
incurred by the Borrower, such Indebtedness is designated by the
Borrower, in an Officers' Certificate delivered to each Parity Lien
Representative and the Collateral Trustee, as "Parity Lien Debt" for
the purposes of the Secured Debt Documents; provided, that no
Obligation or Indebtedness may be designated as both Parity Lien
Debt and Priority Lien Debt;
(b) such Indebtedness is governed by an indenture, credit
agreement or other agreement that includes a Lien Sharing and
Priority Confirmation and the Borrower delivers an Officers'
Certificate to each Parity Lien Representative and the Collateral
Trustee confirming same; and
(c) all requirements set forth in this Agreement as to the
confirmation, grant or perfection of the Collateral Trustee's Lien
to secure such Indebtedness or Obligations in respect thereof are
satisfied (and the satisfaction of such requirements and the other
provisions of this clause (c) will be conclusively established if
the Borrower delivers to the Collateral Trustee an Officers'
Certificate stating that such requirements and other provisions have
been satisfied and that such Indebtedness is "Parity Lien Debt").
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"PARITY LIEN DOCUMENTS" means, collectively, the Note Documents and the
indenture, credit agreement or other agreement governing each other Series of
Parity Lien Debt and the Security Documents securing the Parity Lien
Obligations.
"PARITY LIEN OBLIGATIONS" means Parity Lien Debt and all other Obligations
in respect thereof.
"PARITY LIEN REPRESENTATIVE" means:
(1) in the case of the Notes, the Trustee; or
(2) in the case of any other Series of Parity Lien Debt, the
trustee, agent or representative of the holders of such Series of Parity
Lien Debt who maintains the transfer register for such Series of Parity
Lien Debt and (A) is appointed as a Parity Lien Representative (for
purposes related to the administration of the Security Documents) pursuant
to the indenture, credit agreement or other agreement governing such
Series of Parity Lien Debt, together with its successors in such capacity,
and (B) that has executed a Collateral Trust Joinder.
"PERMITTED PRIOR LIENS" means, regardless of whether the Indenture is in
effect at any time of determination:
(1) Liens described in clauses (1) (liens securing Priority Lien
Oligations), (4) (liens existing at time of merger), (5) (liens existing
on acquired property), (6) (liens securing performance of statutory
obligations, surety or appeal bonds, performance bonds, etc.), (7) (liens
securing purchase money debt, capital leases, etc.) or (8) (existing
liens) of the definition of "Permitted Liens" under the Indenture; and
(2) Permitted Liens (as defined in the Indenture) that arise by
operation of law and are not voluntarily granted, to the extent entitled
by law to priority over the Liens created by the Security Documents.
"PERSON" means any natural person, corporation, partnership, limited
liability company, firm, association, trust, government, governmental agency or
any other entity, whether acting in an individual, fiduciary or other capacity.
"PLEDGORS" means JLL Building Products, LLC (until consummation of the
Borrower's IPO (as defined in the Credit Agreement)), the Borrower, the
Guarantors and any other Person (if any) that at any time provides collateral
security for any Secured Obligations.
"PRIORITY COLLATERAL TRUSTEE" means UBS AG, Stamford Branch, as collateral
trustee under the Credit Agreement for the benefit of the holders of the
Priority Lien Obligations.
"PRIORITY LIEN" means a Lien granted by a Security Document to the
Priority Collateral Trustee, at any time, upon any property of the Borrower or
any other Pledgor to secure Priority Lien Obligations.
"PRIORITY LIEN DEBT" means:
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(1) Indebtedness under the Credit Agreement (including, without
limitation, revolving loans and letters of credit) that was permitted to
be incurred and secured under each applicable Secured Debt Document (or as
to which the lenders under the Credit Agreement obtained an Officers'
Certificate at the time of incurrence to the effect that such Indebtedness
was permitted to be incurred and secured by all applicable Secured Debt
Documents);
(2) Indebtedness under any other Credit Facility that is secured
equally and ratably with the Credit Agreement by a Priority Lien that was
permitted to be incurred and so secured under each applicable Secured Debt
Document; provided, in the case of any Indebtedness referred to in this
clause (2), that:
(a) on or before the date on which such Indebtedness is
incurred by the Borrower such Indebtedness is designated by the
Borrower, in an Officers' Certificate delivered to each Priority
Lien Representative and the Collateral Trustee, as "Priority Lien
Debt" for the purposes of the Secured Debt Documents; provided, that
no Obligation or Indebtedness may be designated as both Parity Lien
Debt and Priority Lien Debt;
(b) such Indebtedness is governed by a credit agreement, an
indenture or other agreement that includes a Lien Sharing and
Priority Confirmation; and
(c) all requirements set forth in this Agreement as to the
confirmation, grant or perfection of the Collateral Trustee's Lien
to secure such Indebtedness or Obligations in respect thereof are
satisfied (and the satisfaction of such requirements and the other
provisions of this clause (c) will be conclusively established if
the Borrower delivers to the Collateral Trustee an Officers'
Certificate stating that such requirements and other provisions have
been satisfied and that such Indebtedness is "Priority Lien Debt");
and
(3) Hedging Obligations incurred to hedge or manage interest rate
risk with respect to any Priority Lien Debt or Parity Lien Debt; provided,
that:
(a) such Hedging Obligations are secured by a Priority Lien on
all of the assets and properties that secure the Indebtedness in
respect of which such Hedging Obligations are incurred; and
(b) such Priority Lien is senior to or on a parity with the
Priority Liens securing the Indebtedness in respect of which such
Hedging Obligations are incurred.
"PRIORITY LIEN DOCUMENTS" means the Credit Agreement and any other Credit
Facility pursuant to which any Priority Lien Debt is incurred, this Agreement
and the Security Documents securing the Priority Lien Obligations.
"PRIORITY LIEN OBLIGATIONS" means the Priority Lien Debt and all other
Obligations in respect of Priority Lien Debt.
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"PRIORITY LIEN REPRESENTATIVE" means:
(1) in the case of the Credit Agreement, the Administrative Agent;
or
(2) in the case of any other Series of Priority Lien Debt, the
trustee, agent or representative of the holders of such Series of Priority
Lien Debt who maintains the transfer register (if any) for such Series of
Priority Lien Debt and is appointed as a representative of the Priority
Lien Debt (for purposes related to the administration of the Security
Documents) pursuant to the credit agreement or other agreement governing
such Series of Priority Lien Debt, and who has executed a Collateral Trust
Joinder.
"REQUIRED PARITY LIEN DEBTHOLDERS" means, at any time, the holders of more
than 50% of the sum of:
(1) the aggregate outstanding principal amount of Parity Lien Debt
(including outstanding letters of credit whether or not then available or
drawn); and
(2) other than in connection with the exercise of remedies, the
aggregate unfunded commitments to extend credit which, when funded, would
constitute Parity Lien Debt.
For purposes of this definition, (a) Parity Lien Debt registered in the
name of, or beneficially owned by, the Borrower or any Affiliate of the Borrower
will be deemed not to be outstanding, and (b) votes will be determined in
accordance with the provisions of Section 7.2.
"SECURED DEBT" means Parity Lien Debt and Priority Lien Debt.
"SECURED DEBT DEFAULT" means any event or condition which, under the terms
of any credit agreement, indenture or other agreement governing any Series of
Secured Debt causes, or permits holders of Secured Debt outstanding thereunder
(with or without the giving of notice or lapse of time, or both, and whether or
not notice has been given or time has lapsed) to cause, the Secured Debt
outstanding thereunder to become immediately due and payable.
"SECURED DEBT DOCUMENTS" means the Parity Lien Documents and the Priority
Lien Documents.
"SECURED DEBT REPRESENTATIVE" means each Parity Lien Representative and
each Priority Lien Representative.
"SECURED OBLIGATIONS" means Parity Lien Obligations and Priority Lien
Obligations.
"SECURED PARTIES" means the holders of Secured Obligations and the Secured
Debt Representatives.
"SECURITY DOCUMENTS" means each Lien Sharing and Priority Confirmation,
and all security agreements, pledge agreements, collateral assignments,
mortgages, collateral agency agreements, control agreements, deeds of trust or
other grants or transfers for security executed and delivered by the Borrower or
any other Pledgor creating (or purporting to create) or
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perfecting (or purporting to perfect) a Lien upon Collateral in favor of the
Collateral Trustee for the benefit of the holders of the Priority Lien
Obligations or Collateral Trustee for the benefit of the holders of the Parity
Lien Obligations, as applicable, in each case, as amended, modified, renewed,
restated or replaced, in whole or in part, from time to time, in accordance with
its terms and Section 7.1.
"SENIOR TRUST ESTATE" has the meaning set forth in Section 2.1.
"SERIES OF PARITY LIEN DEBT" means, severally, the Notes and each other
issue or series of Parity Lien Debt for which a single transfer register is
maintained.
"SERIES OF PRIORITY LIEN DEBT" means indebtedness (including, without
limitation, revolving loans and letters of credit) under the Credit Agreement
and any other Credit Facility that constitutes Priority Lien Debt.
"SERIES OF SECURED DEBT" means, severally, each Series of Priority Lien
Debt and each Series of Parity Lien Debt.
"SUBSIDIARY" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which
more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency and after
giving effect to any voting agreement or stockholders' agreement that
effectively transfers voting power) to vote in the election of directors,
managers or trustees of the corporation, association or other business
entity is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person (or a
combination thereof); and
(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or
(b) the only general partners of which are that Person or one or more
Subsidiaries of that Person (or any combination thereof).
"TRUSTEE" has the meaning set forth in the recitals.
"TRUST ESTATES" has the meaning set forth in Section 2.2.
"UCC" means the Uniform Commercial Code as in effect in the State of New
York or any other applicable jurisdiction.
"VOTING STOCK" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
SECTION 1.2 Rules of Interpretation.
(a) All terms used in this Agreement that are defined in Article 9
of the UCC and not otherwise defined herein have the meanings assigned to them
in Article 9 of the UCC.
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(b) Unless otherwise indicated, any reference to any agreement or
instrument will be deemed to include a reference to that agreement or instrument
as assigned, amended, supplemented, amended and restated, or otherwise modified
and in effect from time to time or replaced in accordance with the terms of this
Agreement.
(c) The use in this Agreement or any of the Security Documents of
the word "include" or "including," when following any general statement, term or
matter, will not be construed to limit such statement, term or matter to the
specific items or matters set forth immediately following such word or to
similar items or matters, whether or not nonlimiting language (such as "without
limitation" or "but not limited to" or words of similar import) is used with
reference thereto, but will be deemed to refer to all other items or matters
that fall within the broadest possible scope of such general statement, term or
matter. The word "will" shall be construed to have the same meaning and effect
as the word "shall."
(d) References to "Sections," "clauses," "recitals" and the
"preamble" will be to Sections, clauses, recitals and the preamble,
respectively, of this Agreement unless otherwise specifically provided.
References to "Articles" will be to Articles of this Agreement unless otherwise
specifically provided. References to "Exhibits" and "Schedules" will be to
Exhibits and Schedules, respectively, to this Agreement unless otherwise
specifically provided.
(e) Notwithstanding anything to the contrary in this Agreement, any
references contained herein to any section, clause, paragraph, definition or
other provision of the Indenture (including any definition contained therein)
shall be deemed to be a reference to such section, clause, paragraph, definition
or other provision as in effect on the date of this Agreement; provided, that
any reference to any such section, clause, paragraph or other provision shall
refer to such section, clause, paragraph or other provision of the Indenture
(including any definition contained therein) as amended or modified from time to
time if such amendment or modification has been (1) made in accordance with the
Indenture and (2) prior to the Discharge of Priority Lien Obligations, approved
in a writing delivered to the Trustee and the Collateral Trustee by, or on
behalf of, the requisite holders of Priority Lien Obligations as are needed (if
any) under the terms of the applicable Priority Lien Documents to approve such
amendment or modification.
(f) This Agreement and the Security Documents will be construed
without regard to the identity of the party who drafted it and as though the
parties participated equally in drafting it. Consequently, each of the parties
acknowledges and agrees that any rule of construction that a document is to be
construed against the drafting party will not be applicable either to this
Agreement or the Security Documents.
ARTICLE 2. THE TRUST ESTATES
SECTION 2.1 Declaration of Senior Trust.
To secure the payment of the Priority Lien Obligations and in
consideration of the mutual agreements set forth in this Agreement, each of the
Pledgors hereby grants to the Priority Collateral Trustee, and the Priority
Collateral Trustee hereby accepts and agrees to hold, in trust under this
Agreement for the benefit of all present and future holders of Priority Lien
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Obligations, all of such Pledgor's right, title and interest in, to and under
all Collateral granted to the Priority Collateral Trustee under any Security
Document securing Priority Lien Obligations for the benefit of the holders of
Priority Lien Obligations, together with all of the Priority Collateral
Trustee's right, title and interest in, to and under such Security Documents,
and all interests, rights, powers and remedies of the Collateral Trustee
thereunder or in respect thereof and all cash and non-cash proceeds thereof
(collectively, the "SENIOR TRUST ESTATE").
The Collateral Trustee and its successors and assigns under this Agreement
will hold the Senior Trust Estate in trust for the benefit solely and
exclusively of all present and future holders of Priority Lien Obligations as
security for the payment of all present and future Priority Lien Obligations.
Notwithstanding the foregoing, if at any time:
(1) all Liens securing the Priority Lien Obligations have been
released as provided in Section 4.1;
(2) the Collateral Trustee holds no property in trust as part of the
Senior Trust Estate;
(3) no monetary obligation (other than indemnification and other
contingent obligations not then due and payable and letters of credit that
have been cash collateralized as provided in clause (3) of the definition
of "Discharge of Priority Lien Obligations") is outstanding and payable
under this Agreement to the Collateral Trustee or any of its co-trustees
or agents (whether in an individual or representative capacity); and
(4) the Borrower delivers to the Collateral Trustee an Officers'
Certificate stating that all Priority Liens of the Collateral Trustee have
been released in compliance with all applicable provisions of the Priority
Lien Documents and that the Pledgors are not required by any Priority Lien
Document to grant any Priority Lien upon any property,
then the senior trust arising hereunder will terminate, except that all
provisions set forth in Sections 7.10 and 7.11 that are enforceable by the
Collateral Trustee or any of its co-trustees or agents (whether in an individual
or representative capacity) will remain enforceable in accordance with their
terms.
The parties further declare and covenant that the Senior Trust Estate will
be held and distributed by the Collateral Trustee subject to the further
agreements herein.
SECTION 2.2 Declaration of Junior Trust.
To secure the payment of the Parity Lien Obligations and in consideration
of the premises and the mutual agreements set forth herein, each of the Pledgors
hereby grants to the Parity Collateral Trustee, and the Parity Collateral
Trustee hereby accepts and agrees to hold, in trust under this Agreement for the
benefit of all present and future holders of Parity Lien Obligations, all of
such Pledgor's right, title and interest in, to and under all Collateral granted
to the Parity Collateral Trustee under any Security Document securing Parity
Lien Obligations for the benefit
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of the holders of Parity Lien Obligations, together with all of the Parity
Collateral Trustee's right, title and interest in, to and under such Security
Documents, and all interests, rights, powers and remedies of the Collateral
Trustee thereunder or in respect thereof and all cash and non-cash proceeds
thereof (collectively, the "JUNIOR TRUST ESTATE," and together with the Senior
Trust Estate, the "TRUST ESTATES").
The Parity Collateral Trustee and its successors and assigns under this
Agreement will hold the Junior Trust Estate in trust for the benefit solely and
exclusively of all present and future holders of Parity Lien Obligations as
security for the payment of all present and future Priority Lien Obligations.
Notwithstanding the foregoing, if at any time:
(1) all Liens securing the Parity Lien Obligations have been
released as provided in Section 4.1;
(2) the Collateral Trustee holds no property in trust as part of the
Junior Trust Estate;
(3) no monetary obligation (other than indemnification and other
contingent obligations not then due and payable and letters of credit that
have been cash collateralized as provided in clause (3) of the definition
of "Discharge of Priority Lien Obligations") is outstanding and payable
under this Agreement to the Collateral Trustee or any of its co-trustees
or agents (whether in an individual or representative capacity); and
(4) the Borrower delivers to the Collateral Trustee an Officers'
Certificate stating that all Parity Liens of the Collateral Trustee have
been released in compliance with all applicable provisions of the Parity
Lien Documents and that the Pledgors are not required by any Parity Lien
Document to grant any Parity Lien upon any property,
then the junior trust arising hereunder will terminate, except that all
provisions set forth in Sections 7.10 and 7.11 that are enforceable by the
Collateral Trustee or any of its co-trustees or agents (whether in an individual
or representative capacity) will remain enforceable in accordance with their
terms.
The parties further declare and covenant that the Junior Trust Estate will
be held and distributed by the Collateral Trustee subject to the further
agreements herein.
SECTION 2.3 Priority of Liens. Notwithstanding anything else contained
herein or in any Security Document, it is the intent of the parties that:
(1) this Agreement creates two separate and distinct Trust
Estates and the Security Documents create two separate and distinct Liens:
the Senior Trust Estate and Priority Lien securing the payment and
performance of the Priority Lien Obligations and the Junior Trust Estate
and Parity Lien securing the payment and performance of the Parity Lien
Obligations; and
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(2) notwithstanding the date, time, method, manner or order of
grant, attachment or perfection of any Liens securing the Parity Lien
Obligations granted on the Collateral or of any Liens securing the
Priority Lien Obligations granted on the Collateral and notwithstanding
any provision of the UCC, or any other applicable law or the Parity Lien
Documents or any defect or deficiencies in, or failure to perfect, the
Liens securing the Priority Lien Obligations or any other circumstance
whatsoever, the Liens securing the Parity Lien Obligations are subject and
subordinate to the Liens securing the Priority Lien Obligations.
SECTION 2.4 Restrictions on Enforcement of Parity Liens(a) .
(a) Until the Discharge of Priority Lien Obligations, the holders of
Priority Lien Obligations will have, subject to the exceptions set forth below
in clauses (1) through (4) and subject to the rights of the holders of Permitted
Prior Liens, the exclusive right to authorize and direct the Collateral Trustee
with respect to the Security Documents and the Collateral including, without
limitation, the exclusive right to authorize or direct the Collateral Trustee to
enforce, collect or realize on any Collateral or exercise any other right or
remedy with respect to the Collateral and no Parity Lien Representative or
holder of Parity Lien Obligations may authorize or direct the Collateral Trustee
with respect to such matters. Notwithstanding the foregoing, the holders of
Parity Lien Obligations may, subject to the rights of the holders of other
Permitted Prior Liens, direct the Collateral Trustee:
(1) without any condition or restriction whatsoever, at any
time after the Discharge of Priority Lien Obligations;
(2) as necessary to redeem any Collateral in a creditor's
redemption permitted by law or to deliver any notice or demand necessary
to enforce (subject to the prior Discharge of Priority Lien Obligations)
any right to claim, take or receive proceeds of Collateral remaining after
the Discharge of Priority Lien Obligations in the event of foreclosure or
other enforcement of any Permitted Prior Lien;
(3) as necessary to perfect or establish the priority (subject
to Priority Liens and other Permitted Prior Liens) of the Parity Liens
upon any Collateral, except that the Parity Lien Representative and the
holders of Parity Lien Obligations may not require the Collateral Trustee
to take any action to perfect any Collateral through possession or control
other than the Priority Collateral Trustee agreeing pursuant to Section
7.4 to act as agent for the benefit of the holders of Parity Lien
Obligations; or
(4) as necessary to create, prove, preserve or protect (but
not enforce) the Parity Liens upon any Collateral.
(b) Until the Discharge of Priority Lien Obligations, none of the
holders of Parity Lien Obligations or any Parity Lien Representative will:
(1) request judicial relief, in an Insolvency or Liquidation
Proceeding or in any other court, that would hinder, delay, limit or
prohibit the lawful exercise or enforcement of any right or remedy
otherwise available to the holders of Priority Lien
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Obligations in respect of the Priority Liens or that would limit,
invalidate, avoid or set aside any Priority Lien or subordinate the
Priority Liens to the Parity Liens or grant the Parity Liens equal ranking
to the Priority Liens;
(2) oppose or otherwise contest any motion for relief from the
automatic stay or for any injunction against foreclosure or enforcement of
Priority Liens made by any holder of Priority Lien Obligations or any
Priority Lien Representative in any Insolvency or Liquidation Proceeding;
(3) oppose or otherwise contest any lawful exercise by any
holder of Priority Lien Obligations or any Priority Lien Representative of
the right to credit bid Priority Lien Debt at any sale in foreclosure of
Priority Liens;
(4) oppose or otherwise contest any other request for judicial
relief made in any court by any holder of Priority Lien Obligations or any
Priority Lien Representative relating to the lawful enforcement of any
Priority Lien; or
(5) challenge the validity, enforceability, perfection or
priority of the Priority Liens.
Notwithstanding the foregoing, both before and during an Insolvency or
Liquidation Proceeding, the holders of Parity Lien Obligations and the Parity
Lien Representatives may take any actions and exercise any and all rights that
would be available to a holder of unsecured claims, including, without
limitation, the commencement of an Insolvency or Liquidation Proceeding against
the Borrower or any other Pledgor in accordance with applicable law; provided,
that the holders of Parity Lien Obligations and the Parity Lien Representatives
may not take any of the actions prohibited by clauses (1) through (5) of this
Section 2.4(b) or oppose or contest any order that it has agreed not to oppose
or contest under Section 2.8.
(c) At any time prior to the Discharge of Priority Lien Obligations
and after (1) the commencement of any Insolvency or Liquidation Proceeding in
respect of the Borrower or any other Pledgor or (2) the Collateral Trustee and
each Parity Lien Representative have received written notice from any Priority
Lien Representative at the direction of an Act of Required Debtholders stating
that (A) any Series of Priority Lien Debt has become due and payable in full
(whether at maturity, upon acceleration or otherwise) or (B) the holders of
Priority Liens securing one or more Series of Priority Lien Debt have become
entitled under any Priority Lien Documents to and have stated the intent to
enforce any or all of the Priority Liens by reason of a default under such
Priority Lien Documents, no payment of money (or the equivalent of money) shall
be made from the proceeds of Collateral by the Borrower or any other Pledgor to
the Trustee, the Collateral Trustee (in its capacity as agent for the holders of
Parity Lien Obligations) or any holder of Parity Lien Obligations (including,
without limitation, payments and prepayments made for application to Parity Lien
Obligations and all other payments and deposits made pursuant to any provision
of any Parity Lien Document).
(d) All proceeds of Collateral received by the Parity Collateral
Trustee, any Parity Lien Representative or any holder of Parity Lien Obligations
in violation of Section 2.4(c) will be held by the Parity Collateral Trustee,
the applicable Parity Lien Representative or the
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applicable holder of Parity Lien Obligations for the account of the holders of
Priority Liens and remitted to any Priority Lien Representative upon demand by
such Priority Lien Representative. The Parity Liens will remain attached to and
enforceable against all proceeds so held or remitted. All proceeds of Collateral
received by the Parity Collateral Trustee, holders of Parity Lien Obligations
and Parity Lien Representatives not in violation of Section 2.4(c) will be
received by the Parity Collateral Trustee, holders of Parity Lien Obligations
and the Parity Lien Representatives free from the Priority Liens and all other
Liens except the Parity Liens.
SECTION 2.5 Waiver of Right of Marshalling.
(a) Prior to the Discharge of Priority Lien Obligations, holders of
Parity Lien Obligations, each Parity Lien Representative and the Parity
Collateral Trustee may not assert or enforce any right of marshalling accorded
to a junior lienholder, as against the holders of Priority Lien Obligations and
the Priority Lien Representatives (in their capacity as priority lienholders).
(b) Following the Discharge of Priority Lien Obligations, the
holders of Parity Lien Obligations and any Parity Lien Representative may assert
their right under the UCC or otherwise to any proceeds remaining following a
sale or other disposition of Collateral by, or on behalf of, the holders of
Priority Lien Obligations.
SECTION 2.6 Discretion in Enforcement of Priority Liens.
(a) In exercising rights and remedies with respect to the
Collateral, the Priority Lien Representatives may enforce (or refrain from
enforcing) the provisions of the Priority Lien Documents and exercise (or
refrain from exercising) remedies thereunder or any such rights and remedies,
all in such order and in such manner as they may determine in the exercise of
their sole and exclusive discretion, including:
(1) the exercise or forebearance from exercise of all rights
and remedies in respect of the Collateral and/or the Priority Lien
Obligations;
(2) the enforcement or forebearance from enforcement of any
Priority Lien in respect of the Collateral;
(3) the exercise or forebearance from exercise of rights and
powers of a holder of shares of stock included in the Senior Trust Estate
to the extent provided in the Security Documents securing the Priority
Lien Obligations;
(4) the acceptance of the Collateral in full or partial
satisfaction of the Priority Lien Obligations; and
(5) the exercise or forebearance from exercise of all rights
and remedies of a secured lender under the UCC or any similar law of any
applicable jurisdiction or in equity.
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SECTION 2.7 Discretion in Enforcement of Priority Lien Obligations.
(a) Without in any way limiting the generality of Section 2.6, the
holders of Priority Lien Obligations and the Priority Lien Representatives may,
at any time and from time to time, without the consent of or notice to holders
of Parity Lien Obligations or the Parity Lien Representatives, without incurring
responsibility to holders of Parity Lien Obligations and the Parity Lien
Representatives and without impairing or releasing the subordination provided in
this Agreement or the obligations hereunder of holders of Parity Lien
Obligations and the Parity Lien Representatives, do any one or more of the
following:
(1) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, the Priority Lien Obligations, or
otherwise amend or supplement in any manner the Priority Lien Obligations,
or any instrument evidencing the Priority Lien Obligations or any
agreement under which the Priority Lien Obligations are outstanding;
(2) release any Person or entity liable in any manner for the
collection of the Priority Lien Obligations;
(3) release the Priority Lien on any Collateral; and
(4) exercise or refrain from exercising any rights against any
Pledgor.
SECTION 2.8 Insolvency or Liquidation Proceedings.
(a) If in any Insolvency or Liquidation Proceeding and prior to the
Discharge of Priority Lien Obligations, the holders of Priority Lien Obligations
by an Act of Required Debtholders consent to any order:
(1) for use of cash collateral;
(2) approving a debtor-in-possession financing secured by a
Lien that is senior to or on a parity with all Priority Liens upon any
property of the estate in such Insolvency or Liquidation Proceeding;
(3) granting any relief on account of Priority Lien
Obligations as adequate protection (or its equivalent) for the benefit of
the holders of Priority Lien Obligations in the Collateral subject to
Priority Liens; or
(4) relating to a sale of assets of the Borrower or any other
Pledgor that provides, to the extent the Collateral sold is to be free and
clear of Liens, that all Priority Liens and Parity Liens will attach to
the proceeds of the sale;
then, the holders of Parity Lien Obligations and the Parity Lien
Representatives, in their capacity as holders or representatives of secured
claims, will not oppose or otherwise contest the entry of such order, so long as
none of the holders of Priority Lien Obligations or Priority Lien
Representatives in any respect opposes or otherwise contests any request made by
any holder of Parity Lien Obligations or Parity Lien Representative for the
grant to the Parity Collateral
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Trustee of a junior Lien upon any property on which a Lien is (or is to be)
granted under such order to secure the Priority Lien Obligations, co-extensive
in all respects with, but subordinated (as set forth in Section 2.3) to, such
Lien and all Priority Liens on such property.
Notwithstanding the foregoing, both before and during an Insolvency
or Liquidation Proceeding, the holders of Parity Lien Obligations and the Parity
Lien Representatives may take any actions and exercise any and all rights that
would otherwise be available to a holder of unsecured claims, including, without
limitation, the commencement of Insolvency or Liquidation Proceedings against
any Pledgors in accordance with applicable law; provided, however, that, both
before and during an Insolvency or Liquidation Proceeding, the holders of Parity
Lien Obligations and the Parity Lien Representatives may not take any of the
actions prohibited under Section 2.4(b) or oppose or contest any order that they
have agreed not to oppose or contest under clauses (1) through (4) of the
preceding paragraph.
(b) The holders of Parity Lien Obligations or any Parity Lien
Representative will not file or prosecute in any Insolvency or Liquidation
Proceeding any motion for adequate protection (or any comparable request for
relief) based upon their interest in the Collateral under the Parity Liens,
except that:
(1) they may freely seek and obtain relief: (A) granting a
junior Lien co-extensive in all respects with, but subordinated (as set
forth in Section 2.3) to, all Liens granted in such Insolvency or
Liquidation Proceeding to, or for the benefit of, the holders of Priority
Lien Obligations; or (B) in connection with the confirmation of any plan
of reorganization or similar dispositive restructuring plan; and
(2) they may freely seek and obtain any relief upon a motion
for adequate protection (or any comparable relief), without any condition
or restriction whatsoever, at any time after the Discharge of Priority
Lien Obligations.
SECTION 2.9 Collateral Shared Equally and Ratably within Class. The
parties to this Agreement agree that the payment and satisfaction of all
of the Secured Obligations within each Class will be secured equally and
ratably by the Liens established in favor of the Collateral Trustee for
the benefit of the Secured Parties belonging to such Class. It is
understood and agreed that nothing in this Section 2.9 is intended to
alter the priorities among Secured Parties belonging to different Classes
as provided in Section 2.3.
ARTICLE 3. OBLIGATIONS AND POWERS OF COLLATERAL TRUSTEE
SECTION 3.1 Undertaking of the Collateral Trustee.
(a) Subject to, and in accordance with, this Agreement, the
Collateral Trustee will, as trustee, for the benefit solely and exclusively of
the present and future Secured Parties:
(1) accept, enter into, hold, maintain, administer and enforce
all Security Documents, including all Collateral subject thereto, and all
Liens created thereunder, perform its obligations under the Security
Documents and protect, exercise and enforce the interests, rights, powers
and remedies granted or available to it under, pursuant to or in
connection with the Security Documents;
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(2) take all lawful and commercially reasonable actions
permitted under the Security Documents that it may deem necessary or
advisable to protect or preserve its interest in the Collateral subject
thereto and such interests, rights, powers and remedies;
(3) deliver and receive notices pursuant to the Security
Documents;
(4) sell, assign, collect, assemble, foreclose on, institute
legal proceedings with respect to, or otherwise exercise or enforce the
rights and remedies of a secured party (including a mortgagee, trust deed
beneficiary and insurance beneficiary or loss payee) with respect to the
Collateral under the Security Documents and its other interests, rights,
powers and remedies;
(5) remit as provided in Section 3.4 all cash proceeds
received by the Collateral Trustee from the collection, foreclosure or
enforcement of its interest in the Collateral under the Security Documents
or any of its other interests, rights, powers or remedies;
(6) execute and deliver amendments to the Security Documents
as from time to time authorized pursuant to Section 7.1 accompanied by an
Officers' Certificate to the effect that the amendment was permitted under
Section 7.1; and
(7) release any Lien granted to it by any Security Document
upon any Collateral if and as required by Section 4.1(b).
(b) Each party to this Agreement acknowledges and consents to the
undertaking of the Collateral Trustee set forth in Section 3.1(a) and agrees to
each of the other provisions of this Agreement applicable to the Collateral
Trustee.
(c) Notwithstanding anything to the contrary contained in this
Agreement, the Collateral Trustee will not commence any exercise of remedies or
any foreclosure actions or otherwise take any action or proceeding against any
of the Collateral (other than actions as necessary to prove, protect or preserve
the Liens securing the Secured Obligations) unless and until it shall have been
directed by written notice of an Act of Required Debtholders and then only in
accordance with the provisions of this Agreement.
SECTION 3.2 Release or Subordination of Liens. The Collateral Trustee will
not release or subordinate any Lien of the Collateral Trustee or consent to the
release or subordination of any Lien of the Collateral Trustee, except:
(a) as directed by an Act of Required Debtholders accompanied by an
Officers' Certificate to the effect that the release or subordination was
permitted by each applicable Secured Debt Document;
(b) as required by Article 4;
(c) as ordered pursuant to applicable law under a final and
nonappealable order or judgment of a court of competent jurisdiction; or
22
(d) for the subordination of the Junior Trust Estate and the Parity
Liens to the Senior Trust Estate and the Priority Liens.
SECTION 3.3 Enforcement of Liens. If the Collateral Trustee at any time
receives written notice that any event has occurred that constitutes a default
under any Secured Debt Document entitling the Collateral Trustee to foreclose
upon, collect or otherwise enforce its Liens hereunder, the Collateral Trustee
will promptly deliver written notice thereof to each Secured Debt
Representative. Thereafter, the Collateral Trustee may await direction by an Act
of Required Debtholders and will act, or decline to act, as directed by an Act
of Required Debtholders, in the exercise and enforcement of the Collateral
Trustee's interests, rights, powers and remedies in respect of the Collateral or
under the Security Documents or applicable law and, following the initiation of
such exercise of remedies, the Collateral Trustee will act, or decline to act,
with respect to the manner of such exercise of remedies as directed by an Act of
Required Debtholders. Unless it has been directed to the contrary by an Act of
Required Debtholders, the Collateral Trustee in any event may (but will not be
obligated to) take or refrain from taking such action with respect to any
default under any Secured Debt Document as it may deem advisable and in the best
interest of the holders of Secured Obligations.
SECTION 3.4 Application of Proceeds.
(a) The Collateral Trustee will apply the proceeds of any
foreclosure, collection or other enforcement upon any Collateral in the
following order of application:
FIRST, to the payment of all amounts payable under this Agreement on
account of the Collateral Trustee's fees and any reasonable legal fees,
costs and expenses or other liabilities of any kind incurred by the
Collateral Trustee or any co-trustee or agent of the Collateral Trustee in
connection with any Security Document;
SECOND, to the repayment of Indebtedness and other Obligations,
other than Secured Debt, secured by a Permitted Prior Lien on the
Collateral sold or realized upon;
THIRD, to the respective Priority Lien Representatives for
application to the payment of all outstanding Priority Lien Debt and any
other Priority Lien Obligations that are then due and payable in such
order as may be provided in the Priority Lien Documents (and if not so
provided therein, on a pro rata basis) in an amount sufficient to pay in
full in cash all outstanding Priority Lien Debt and all other Priority
Lien Obligations that are then due and payable (including all interest
accrued thereon after the commencement of any Insolvency or Liquidation
Proceeding at the rate, including any applicable post-default rate,
specified in the Priority Lien Documents, even if such interest is not
enforceable, allowable or allowed as a claim in such proceeding, and
including the discharge, cash collateralization (at the lower of (1) 105%
of the aggregate undrawn amount and (2) the percentage of the aggregate
undrawn amount required for release of Liens under the terms of the
applicable Priority Lien Document) or collateralization with a letter of
credit in form and substance, and from a financial institution,
satisfactory to the respective Priority Lien Representatives (such letter
of credit to have a face amount equal to the lower of (1) 105% of the
aggregate undrawn amount and (2) the percentage of the aggregate undrawn
amount required for release of
23
Liens under the terms of the applicable Priority Lien Document) of all
outstanding letters of credit constituting Priority Lien Debt);
FOURTH, to the respective Parity Lien Representatives for
application to the payment of all outstanding Parity Lien Debt and any
other Parity Lien Obligations that are then due and payable in such order
as may be provided in the Parity Lien Documents (and if not so provided
therein, on a pro rata basis) in an amount sufficient to pay in full in
cash all outstanding Parity Lien Debt and all other Parity Lien
Obligations that are then due and payable (including, to the extent
legally permitted, all interest accrued thereon after the commencement of
any Insolvency or Liquidation Proceeding at the rate, including any
applicable post-default rate, specified in the Parity Lien Documents, even
if such interest is not enforceable, allowable or allowed as a claim in
such proceeding, and including the discharge, cash collateralization (at
the lower of (1) 105% of the aggregate undrawn amount and (2) the
percentage of the aggregate undrawn amount required for release of Liens
under the terms of the applicable Parity Lien Document) or
collateralization with a letter of credit in form and substance, and from
a financial institution, satisfactory to the respective Parity Lien
Representatives (such letter of credit to have a face amount equal to the
lower of (1) 105% of the aggregate undrawn amount and (2) the percentage
of the aggregate undrawn amount required for release of Liens under the
terms of the applicable Parity Lien Document) of all outstanding letters
of credit, if any, constituting Parity Lien Debt); and
FIFTH, any surplus remaining after the payment in full in cash of
amounts described in the preceding clauses will be paid to the Borrower or
the applicable Pledgor, as the case may be, its successors or assigns, or
as a court of competent jurisdiction may direct.
(b) If any Parity Lien Representative or any holder of a Parity Lien
Obligation collects or receives any proceeds of such foreclosure, collection or
other enforcement that should have been applied to the payment of the Priority
Lien Obligations in accordance with Section 3.4(a) above, whether after the
commencement of an Insolvency or Liquidation Proceeding or otherwise, such
Parity Lien Representative or such holder of a Parity Lien Obligation, as the
case may be, will forthwith deliver the same to the Collateral Trustee, for the
account of the holders of the Priority Lien Obligations and other Obligations
secured by a Permitted Prior Lien, to be applied in accordance with Section
3.4(a). Until so delivered, such proceeds will be held by that Parity Lien
Representative or that holder of a Parity Lien Obligation, as the case may be,
for the benefit of the holders of the Priority Lien Obligations and other
Obligations secured by a Permitted Prior Lien.
(c) This Section 3.4 is intended for the benefit of, and will be
enforceable as a third party beneficiary by, each present and future holder of
Secured Obligations, each present and future Secured Debt Representative, the
Priority Collateral Trustee and the Parity Collateral Trustee. The Secured Debt
Representative of each future Series of Secured Debt will be required to deliver
a Lien Sharing and Priority Confirmation to the Collateral Trustee and each
other Secured Debt Representative at the time of incurrence of such Series of
Secured Debt.
24
(d) In connection with the application of proceeds pursuant to
Section 3.4(a), except as otherwise directed by an Act of Required Debtholders,
the Collateral Trustee may sell any non-cash proceeds for cash prior to the
application of the proceeds thereof.
SECTION 3.5 Powers of the Collateral Trustee.
(a) The Collateral Trustee is irrevocably authorized and empowered
to enter into and perform its obligations and protect, perfect, exercise and
enforce its interest, rights, powers and remedies under the Security Documents
and applicable law and in equity and to act as set forth in this Agreement or as
requested in any lawful directions given to it from time to time in respect of
any matter by an Act of Required Debtholders.
(b) No Secured Debt Representative or holder of Secured Obligations
will have any liability whatsoever for any act or omission of the Collateral
Trustee, other than any indemnification obligations owed to the Collateral
Trustee pursuant to the Secured Debt Documents.
SECTION 3.6 Documents and Communications. The Collateral Trustee will
permit each Secured Debt Representative and each holder of Secured Obligations
upon reasonable written notice from time to time to inspect and copy, at the
cost and expense of the party requesting such copies, any and all Security
Documents and other documents, notices, certificates, instructions or
communications received by the Collateral Trustee in its capacity as such.
SECTION 3.7 For Sole and Exclusive Benefit of Holders of Secured
Obligations. The Collateral Trustee will accept, hold, administer and enforce
all Liens on the Collateral at any time transferred or delivered to it and all
other interests, rights, powers and remedies at any time granted to or
enforceable by the Collateral Trustee and all other property of the Trust
Estates solely and exclusively for the benefit of the present and future holders
of present and future Secured Obligations, and will distribute all proceeds
received by it in realization thereon or from enforcement thereof solely and
exclusively pursuant to the provisions of Section 3.4.
SECTION 3.8 Additional Secured Debt.
(a) The Collateral Trustee will, as trustee hereunder, perform its
undertakings set forth in Section 3.1(a) with respect to each holder of Secured
Obligations of a Series of Secured Debt that is issued or incurred after the
date hereof that:
(1) holds Secured Obligations that are identified as Parity
Lien Debt or Priority Lien Debt in accordance with the procedures set
forth in Section 3.8(b);
(2) signs, through its designated Secured Debt Representative
identified pursuant to Section 3.8(b), a Collateral Trust Joinder; and
(3) delivers a Lien Sharing and Priority Confirmation.
(b) The Borrower or other applicable Pledgor will be permitted to
designate as an additional holder of Secured Obligations hereunder each Person
who is, or who becomes, the
25
holder of Parity Lien Debt or the holder of Priority Lien Debt incurred by the
Borrower or such other Pledgor after the date of this Agreement in accordance
with the terms of all applicable Secured Debt Documents. The Borrower or other
applicable Pledgor may effect such designation by delivering to the Collateral
Trustee, with copies to each previously identified Secured Debt Representative,
each of the following:
(1) an Officers' Certificate stating that the Borrower or such
other Pledgor intends to incur additional Secured Debt ("ADDITIONAL
SECURED DEBT") which will either be (A) Priority Lien Debt permitted by
each applicable Secured Debt Document to be secured by a Priority Lien
equally and ratably with all previously existing and future Priority Lien
Debt or (B) Parity Lien Debt permitted by each applicable Secured Debt
Document to be secured with a Parity Lien equally and ratably with all
previously existing and future Parity Lien Debt;
(2) evidence that the Borrower or such other Pledgor has duly
authorized, executed (if applicable) and recorded (or caused to be
recorded) in each appropriate governmental office all relevant filings and
recordations to ensure that the Additional Secured Debt is secured by some
or all of the Collateral in accordance with the applicable Security
Documents securing such Additional Secured Debt; and
(3) a written notice specifying the name and address of the
Secured Debt Representative for such series of Additional Secured Debt for
purposes of Section 7.7.
Notwithstanding the foregoing, nothing in this Agreement will be construed to
allow the Borrower or any other Pledgor to incur additional Indebtedness unless
otherwise permitted by the terms of all applicable Secured Debt Documents.
ARTICLE 4. OBLIGATIONS ENFORCEABLE BY THE BORROWER AND THE OTHER PLEDGORS
SECTION 4.1 Release of Liens on Collateral.
(a) Subject to satisfaction of clause (b) below, the Collateral
Trustee's Liens upon the Collateral will be released:
(1) in whole, upon (A) payment in full and discharge of all
outstanding Secured Debt and all other Secured Obligations that are
outstanding, due and payable at the time all of the Secured Debt is paid
in full and discharged and (B) termination or expiration of all
commitments to extend credit under all Secured Debt Documents and the
cancellation, termination, cash collateralization (at the lower of (1)
105% of the aggregate undrawn amount and (2) the percentage of the
aggregate undrawn amount required for release of Liens under the terms of
the applicable Secured Debt Documents) or collateralization with a letter
of credit in form and substance, and from a financial institution,
satisfactory to the applicable Secured Debt Representatives (such letter
of credit to have a face amount equal to the lower of (1) 105% of the
aggregate undrawn amount and (2) the percentage of the aggregate undrawn
amount required for release of
26
Liens under the terms of the applicable Secured Debt Documents) of all
outstanding letters of credit issued pursuant to any Secured Debt
Documents;
(2) as to any Collateral that is sold, transferred or
otherwise disposed of by the Borrower or any other Pledgor to a Person
that is not (either before or after such sale, transfer or disposition)
the Borrower or a Guarantor of the Borrower in a transaction or other
circumstance that complies with Section 4.10 (the "Asset Sale" provision)
of the Indenture, if any, and is permitted by all of the other Secured
Debt Documents, at the time of such sale, transfer or other disposition or
to the extent of the interest sold, transferred or otherwise disposed of;
provided, that the Collateral Trustee's Liens upon the Collateral will not
be released if the sale or disposition is subject to the "Merger,
Consolidation or Sale of Assets" provisions of the Indenture;
(3) as to a release of less than all or substantially all of
the Collateral, if consent to the release of all Priority Liens on such
Collateral has been given by an Act of Required Debtholders; and
(4) as to a release of all or substantially all of the
Collateral, if (A) consent to release of that Collateral has been given by
the requisite percentage or number of holders of each Series of Secured
Debt at the time outstanding as provided for in the applicable Secured
Debt Documents and (B) the Borrower has delivered an Officers' Certificate
to the Collateral Trustee certifying that any such necessary consents have
been obtained.
(b) The Collateral Trustee agrees for the benefit of the Borrower
and the other Pledgors that if the Collateral Trustee at any time receives:
(1) an Officers' Certificate stating that (A) the signing
officer has read Section 4.1 of this Agreement and understands the
provisions and the definitions relating hereto, (B) such officer has made
such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not the conditions precedent
in this Agreement and all other Secured Debt Documents, if any, relating
to the release of the Collateral have been complied with and (C) in the
opinion of such officer, such conditions precedent, if any, have been
complied with;
(2) the proposed instrument or instruments releasing such Lien
as to such property in recordable form, if applicable; and
(3) prior to the Discharge of Priority Lien Obligations, the
written confirmation of each Priority Lien Representative (or, at any time
after the Discharge of Priority Lien Obligations, each Parity Lien
Representative) (such confirmation to be given following receipt of the
Officers' Certificate described in clause (1) above) that, in its view,
such release is permitted by Section 4.1(a) and the respective Secured
Debt Documents governing the Secured Obligations the holders of which such
Secured Debt Representative represents;
27
then the Collateral Trustee will execute (with such acknowledgements and/or
notarizations as are required) and deliver such release to the Borrower or other
applicable Pledgor on or before the later of (x) the date specified in such
request for such release and (y) the second Business Day after the date of
receipt of the items required by this Section 4.1(b) by the Collateral Trustee.
(c) The Collateral Trustee hereby agrees that:
(1) in the case of any release pursuant to clause (2) of
Section 4.1(a), if the terms of any such sale, transfer or other
disposition require the payment of the purchase price to be
contemporaneous with the delivery of the applicable release, then, at the
written request of and at the expense of the Borrower or other applicable
Pledgor, the Collateral Trustee will either (A) be present at and deliver
the release at the closing of such transaction or (B) deliver the release
under customary escrow arrangements that permit such contemporaneous
payment and delivery of the release; and
(2) at any time when a Secured Debt Default under a Series of
Secured Debt that constitutes Parity Lien Debt has occurred and is
continuing, within one Business Day of the receipt by it of any Act of
Required Debtholders pursuant to Section 4.1(a)(3), the Collateral Trustee
will deliver a copy of such Act of Required Debtholders to each Secured
Debt Representative.
(d) Each Secured Debt Representative hereby agrees that:
(1) as soon as reasonably practicable after receipt of an
Officers' Certificate from the Borrower pursuant to Section 4.1(b)(1) it
will, to the extent required by such Section, either provide (A) the
written confirmation required by Section 4.1(b)(3), (B) a written
statement that such release is not permitted by Section 4.1(a) or (C) a
request for further information from the Borrower reasonably necessary to
determine whether the proposed release is permitted by Section 4.1(a) and
after receipt of such information such Secured Debt Representative will as
soon as reasonably practicable either provide the written confirmation or
statement required pursuant to clause (A) or (B), as applicable; and
(2) within one Business Day of the receipt by it of any notice
from the Collateral Trustee pursuant to Section 4.1(c)(2), such Secured
Debt Representative will deliver a copy of such notice to each registered
holder of the Series of Priority Lien Debt or Series of Parity Lien Debt
for which it acts as Secured Debt Representative.
SECTION 4.2 Delivery of Copies to Secured Debt Representatives. The
Borrower will deliver to each Secured Debt Representative a copy of each
Officers' Certificate delivered to the Collateral Trustee pursuant to Section
4.1(b), together with copies of all documents delivered to the Collateral
Trustee with such Officers' Certificate. The Secured Debt Representatives will
not be obligated to take notice thereof or to act thereon, subject to Section
4.1(d).
SECTION 4.3 Collateral Trustee not Required to Serve, File or Record. The
Collateral Trustee is not required to serve, file, register or record any
instrument releasing or subordinating its Liens on any Collateral; provided,
however, that if the Borrower or any other
28
Pledgor shall make a written demand for a termination statement under Section
9-513(c) of the UCC, the Collateral Trustee shall comply with the written
request of the Borrower or such Pledgor to comply with the requirements of such
UCC provision; provided, further, that the Collateral Trustee must first confirm
with the Secured Debt Representatives that the requirements of such UCC
provisions have been satisfied.
SECTION 4.4 Release of Liens in Respect of Notes. The Collateral Trustee's
Parity Lien will no longer secure the Notes outstanding under the Indenture or
any other Obligations under the Indenture, and the right of the holders of the
Notes and such Obligations to the benefits and proceeds of the Collateral
Trustee's Parity Lien on the Collateral will terminate and be discharged:
(1) upon satisfaction and discharge of the Indenture as set forth
under Article 12 (the "Satisfaction and Discharge" provisions) of the
Indenture;
(2) upon a Legal Defeasance or Covenant Defeasance (each as defined
under the Indenture) of the Notes as set forth under Article 8 (the "
Legal Defeasance and Covenant Defeasance" provisions) of the Indenture;
(3) upon payment in full and discharge of all Notes outstanding
under the Indenture and all Obligations that are outstanding, due and
payable under the Indenture at the time the Notes are paid in full and
discharged; or
(4) in whole or in part, with the consent of the holders of the
requisite percentage of Notes in accordance with Article 9 (the
"Amendment, Supplement and Waiver" provisions) of the Indenture.
ARTICLE 5. IMMUNITIES OF THE COLLATERAL TRUSTEE
SECTION 5.1 No Implied Duty. The Collateral Trustee will not have any
fiduciary duties nor will it have responsibilities or obligations other than
those expressly assumed by it in this Agreement and the Security Documents. The
Collateral Trustee will not be required to take any action that is contrary to
applicable law or any provision of this Agreement or the Security Documents.
SECTION 5.2 Appointment of Agents and Advisors. The Collateral Trustee may
execute any of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through co-trustees, agents, attorneys, accountants,
appraisers or other experts or advisors selected by it in good faith as it may
reasonably require and will not be responsible for any misconduct or negligence
on the part of any of them.
SECTION 5.3 Other Agreements. The Collateral Trustee has accepted and is
bound by the Security Documents executed by the Collateral Trustee as of the
date of this Agreement and, as directed by an Act of Required Debtholders, the
Collateral Trustee shall execute additional Security Documents delivered to it
after the date of this Agreement; provided, however, that such additional
Security Documents do not adversely affect the rights, privileges, benefits and
immunities of the Collateral Trustee. The Collateral Trustee will not otherwise
be
29
bound by, or be held obligated by, the provisions of any credit agreement,
indenture or other agreement governing Secured Debt (other than this Agreement
and the Security Documents).
SECTION 5.4 Solicitation of Instructions.
(a) The Collateral Trustee may at any time solicit written
confirmatory instructions, in the form of an Act of Required Debtholders, an
Officers' Certificate or an order of a court of competent jurisdiction, as to
any action that it may be requested or required to take, or that it may propose
to take, in the performance of any of its obligations under this Agreement or
the Security Documents. The Collateral Trustee will be entitled to refrain from
taking any action (and will incur no liability for doing so) until it receives
such written confirmatory instructions.
(b) No written direction given to the Collateral Trustee by an Act
of Required Debtholders that in the sole judgment of the Collateral Trustee
imposes, purports to impose or might reasonably be expected to impose upon the
Collateral Trustee any obligation or liability not set forth in or arising under
this Agreement and the Security Documents will be binding upon the Collateral
Trustee unless the Collateral Trustee elects, at its sole option, to accept such
direction.
SECTION 5.5 Limitation of Liability. The Collateral Trustee will not be
responsible or liable for any action taken or omitted to be taken by it
hereunder or under any Security Document, except for its own gross negligence,
bad faith or willful misconduct as determined by a court of competent
jurisdiction.
SECTION 5.6 Documents in Satisfactory Form. The Collateral Trustee will be
entitled to require that all agreements, certificates, opinions, instruments and
other documents at any time submitted to it, including those expressly provided
for in this Agreement, be delivered to it in a form and with substantive
provisions reasonably satisfactory to it.
SECTION 5.7 Entitled to Rely. The Collateral Trustee may seek and rely
upon, and shall be fully protected in relying upon, any judicial order or
judgment, upon any advice, opinion or statement of legal counsel, independent
consultants and other experts selected by it in good faith and upon any
certification, instruction, notice or other writing delivered to it by the
Borrower or any other Pledgor in compliance with the provisions of this
Agreement or delivered to it by any Secured Debt Representative as to the
holders of Secured Obligations for whom it acts, without being required to
determine the authenticity thereof or the correctness of any fact stated therein
or the propriety or validity of service thereof. The Collateral Trustee may act
in reliance upon any instrument comporting with the provisions of this Agreement
or any signature reasonably believed by it to be genuine and may assume that any
Person purporting to give notice or receipt or advice or make any statement or
execute any document in connection with the provisions hereof or the Security
Documents has been duly authorized to do so. To the extent an Officers'
Certificate or opinion of counsel is required or permitted under this Agreement
to be delivered to the Collateral Trustee in respect of any matter, the
Collateral Trustee may rely conclusively on Officers' Certificate or opinion of
counsel as to such matter and such Officers' Certificate or opinion of counsel
shall be full warranty and protection to the Collateral Trustee
30
for any action taken, suffered or omitted by it under the provisions of this
Agreement and the Security Documents.
SECTION 5.8 Secured Debt Default. The Collateral Trustee will not be
required to inquire as to the occurrence or absence of any Secured Debt Default
and will not be affected by or required to act upon any notice or knowledge as
to the occurrence of any Secured Debt Default unless and until it is directed by
an Act of Required Debtholders.
SECTION 5.9 Actions by Collateral Trustee. As to any matter not expressly
provided for by this Agreement or the Security Documents, the Collateral Trustee
will act or refrain from acting as directed by an Act of Required Debtholders
and will be fully protected if it does so, and any action taken, suffered or
omitted pursuant hereto or thereto shall be binding on the holders of Secured
Obligations.
SECTION 5.10 Security or Indemnity in favor of the Collateral Trustee. The
Collateral Trustee will not be required to advance or expend any funds or
otherwise incur any financial liability in the performance of its duties or the
exercise of its powers or rights hereunder unless it has been provided with
security or indemnity reasonably satisfactory to it against any and all
liability or expense which may be incurred by it by reason of taking or
continuing to take such action.
SECTION 5.11 Rights of the Collateral Trustee. In the event of any
conflict between any terms and provisions set forth in this Agreement and those
set forth in any Security Document, the terms and provisions of this Agreement
shall supersede and control the terms and provisions of such Security Document.
In the event there is any bona fide, good faith disagreement between the other
parties to this Agreement or any of the Security Documents resulting in adverse
claims being made in connection with Collateral held by the Collateral Trustee
and the terms of this Agreement or any of the Security Documents do not
unambiguously mandate the action the Collateral Trustee is to take or not to
take in connection therewith under the circumstances then existing, or the
Collateral Trustee is in doubt as to what action it is required to take or not
to take hereunder or under the Security Documents, it will be entitled to
refrain from taking any action (and will incur no liability for doing so) until
directed otherwise in writing by a request signed jointly by the parties hereto
entitled to give such direction or by order of a court of competent
jurisdiction.
SECTION 5.12 Limitations on Duty of Collateral Trustee in Respect of
Collateral.
(a) Beyond the exercise of reasonable care in the custody of
Collateral in its possession, the Collateral Trustee will have no duty as to any
Collateral in its possession or control or in the possession or control of any
agent or bailee or any income thereon or as to preservation of rights against
prior parties or any other rights pertaining thereto and the Collateral Trustee
will not be responsible for filing any financing or continuation statements or
recording any documents or instruments in any public office at any time or times
or otherwise perfecting or maintaining the perfection of any Liens on the
Collateral. The Collateral Trustee will be deemed to have exercised reasonable
care in the custody of the Collateral in its possession if the Collateral is
accorded treatment substantially equal to that which it accords its own
property, and the Collateral Trustee will not be liable or responsible for any
loss or
31
diminution in the value of any of the Collateral by reason of the act or
omission of any carrier, forwarding agency or other agent or bailee selected by
the Collateral Trustee in good faith.
(b) The Collateral Trustee will not be responsible for the
existence, genuineness or value of any of the Collateral or for the validity,
perfection, priority or enforceability of the Liens in any of the Collateral,
whether impaired by operation of law or by reason of any action or omission to
act on its part hereunder, except to the extent such action or omission
constitutes gross negligence, bad faith or willful misconduct on the part of the
Collateral Trustee, for the validity or sufficiency of the Collateral or any
agreement or assignment contained therein, for the validity of the title of any
Pledgor to the Collateral, for insuring the Collateral or for the payment of
taxes, charges, assessments or Liens upon the Collateral or otherwise as to the
maintenance of the Collateral. The Collateral Trustee hereby disclaims any
representation or warranty to the present and future holders of the Secured
Obligations concerning the perfection of the Liens granted hereunder or in the
value of any of the Collateral.
SECTION 5.13 Assumption of Rights, Not Assumption of Duties.
Notwithstanding anything to the contrary contained herein:
(1) each of the parties thereto will remain liable under each of the
Security Documents to the extent set forth therein to perform all of their
respective duties and obligations thereunder to the same extent as if this
Agreement had not be executed;
(2) the exercise by the Collateral Trustee of any of its rights,
remedies or powers hereunder will not release such parties from any of
their respective duties or obligations under the Security Documents; and
(3) the Collateral Trustee will not be obligated to perform any of
the obligations or duties of any of the parties thereunder other than the
Collateral Trustee.
SECTION 5.14 No Liability for Clean Up of Hazardous Materials. In the
event that the Collateral Trustee is required to acquire title to an asset for
any reason, or take any managerial action of any kind in regard thereto, in
order to carry out any obligation for the benefit of another, which in the
Collateral Trustee's sole discretion may cause the Collateral Trustee to be
considered an "owner or operator" under any environmental laws or otherwise
cause the Collateral Trustee to incur, or be exposed to, any environmental
liability or any liability under any other federal, state or local law, the
Collateral Trustee reserves the right, instead of taking such action, either to
resign as Collateral Trustee or to arrange for the transfer of the title or
control of the asset to a court appointed receiver. The Collateral Trustee will
not be liable to any Person for any environmental liability or any environmental
claims or contribution actions under any federal, state or local law, rule or
regulation by reason of the Collateral Trustee's actions and conduct as
authorized, empowered and directed hereunder or relating to any kind of
discharge or release or threatened discharge or release of any hazardous
materials into the environment.
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ARTICLE 6. RESIGNATION AND REMOVAL OF THE COLLATERAL TRUSTEE
SECTION 6.1 Resignation or Removal of Collateral Trustee. Subject to the
appointment of a successor Collateral Trustee as provided in Section 6.2 and the
acceptance of such appointment by the successor Collateral Trustee:
(a) the Collateral Trustee may resign at any time by giving not less
than 30 days' notice of resignation to each Secured Debt Representative and the
Borrower; and
(b) the Collateral Trustee may be removed at any time, with or
without cause, by an Act of Required Debtholders.
SECTION 6.2 Appointment of Successor Collateral Trustee. Upon any such
resignation or removal, a successor Collateral Trustee may be appointed by an
Act of Required Debtholders. If no successor Collateral Trustee has been so
appointed and accepted such appointment within 30 days after the predecessor
Collateral Trustee gave notice of resignation or was removed, the retiring
Collateral Trustee may (at the expense of the Borrower), at its option, appoint
a successor Collateral Trustee, or petition a court of competent jurisdiction
for appointment of a successor Collateral Trustee, which must be a bank or trust
company:
(1) authorized to exercise corporate trust powers;
(2) having a combined capital and surplus of at least $500,000,000;
and
(3) maintaining an office in New York, New York.
The Collateral Trustee will fulfill its obligations hereunder until
a successor Collateral Trustee meeting the requirements of this Section 6.2 has
accepted its appointment as Collateral Trustee and the provisions of Section 6.3
have been satisfied.
SECTION 6.3 Succession. When the Person so appointed as successor
Collateral Trustee accepts such appointment:
(1) such Person will succeed to and become vested with all the
rights, powers, privileges and duties of the predecessor Collateral
Trustee, and the predecessor Collateral Trustee will be discharged from
its duties and obligations hereunder; and
(2) the predecessor Collateral Trustee will (at the expense of the
Borrower) promptly transfer all Liens and collateral security and other
property of the Trust Estates within its possession or control to the
possession or control of the successor Collateral Trustee and will execute
instruments and assignments as may be necessary or desirable or reasonably
requested by the successor Collateral Trustee to transfer to the successor
Collateral Trustee all Liens, interests, rights, powers and remedies of
the predecessor Collateral Trustee in respect of the Security Documents or
the Trust Estates.
Thereafter the predecessor Collateral Trustee will remain entitled to enforce
the immunities granted to it in Article 5 and the provisions of Sections 7.10
and 7.11.
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SECTION 6.4 Merger, Conversion or Consolidation of Collateral Trustee. Any
Person into which the Collateral Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Collateral Trustee shall be a party, or
any Person succeeding to the business of the Collateral Trustee shall be the
successor of the Collateral Trustee pursuant to Section 6.3, provided that (i)
without the execution or filing of any paper with any party hereto or any
further act on the part of any of the parties hereto, except where an instrument
of transfer or assignment is required by law to effect such succession, anything
herein to the contrary notwithstanding, such Person satisfies the eligibility
requirements specified in clauses (1) through (3) of Section 6.2 and (ii) prior
to any such merger, conversion or consolidation, the Collateral Trustee shall
have notified the Borrower, each Priority Lien Representative and each Parity
Lien Representative thereof in writing.
ARTICLE 7. MISCELLANEOUS PROVISIONS
SECTION 7.1 AMENDMENT.
(a) No amendment or supplement to the provisions of any Security
Document will be effective without the approval of the Collateral Trustee acting
as directed by an Act of Required Debtholders, except that:
(1) any amendment or supplement that has the effect solely of
adding or maintaining Collateral, securing additional Secured Debt that
was otherwise permitted by the terms of the Secured Debt Documents to be
secured by the Collateral or preserving, perfecting or establishing the
priority of the Liens thereon or the rights of the Collateral Trustee
therein will become effective when executed and delivered by the Borrower
or any other applicable Pledgor party thereto and the Collateral Trustee;
(2) no amendment or supplement that reduces, impairs or
adversely affects the right of any holder of Secured Obligations:
(A) to vote its outstanding Secured Debt as to any
matter described as subject to an Act of Required Debtholders or
direction by the Required Parity Lien Debtholders (or amends the
provisions of this clause (2) or the definition of "Act of Required
Debtholders" or "Required Parity Lien Debtholders"),
(B) to share in the order of application described in
Section 3.4 in the proceeds of enforcement of or realization on any
Collateral that has not been released in accordance with the
provisions described in Section 4.1 or
(C) to require that Liens securing Secured Obligations
be released only as set forth in the provisions described in Section
4.1,
will become effective without the consent of the requisite percentage or number
of holders of each Series of Secured Debt so affected under the applicable
Secured Debt Documents; and
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(3) no amendment or supplement that imposes any obligation
upon the Collateral Trustee or any Secured Debt Representative or
adversely affects the rights of the Collateral Trustee or any Secured Debt
Representative, respectively, in its capacity as such will become
effective without the consent of the Collateral Trustee or such Secured
Debt Representative, respectively.
(b) Notwithstanding Section 7.1(a)(1) but subject to Sections
7.1(a)(2) and 7.1(a)(3):
(1) any mortgage or other Security Document that secures
Parity Lien Obligations (but not Priority Lien Obligations) may be amended
or supplemented with the approval of the Collateral Trustee acting as
directed in writing by the Required Parity Lien Debtholders, unless such
amendment or supplement would not be permitted under the terms of this
Agreement or the other Priority Lien Documents; and
(2) any amendment or waiver of, or any consent under, any
provision of this Agreement or any Security Document that secures Priority
Lien Obligations, or the replacement of any Security Document that secures
Priority Lien Obligations, will apply automatically to any comparable
provision of any comparable Parity Lien Document (including the complete
replacement thereof, if applicable) without the consent of or notice to
any holder of Parity Lien Obligations and without any action by the
Borrower or any other Pledgor or any holder of Notes or other Parity Lien
Obligations.
(c) The Collateral Trustee will not enter into any amendment or
supplement unless it has received an Officers' Certificate to the effect that
such amendment or supplement will not result in a breach of any provision or
covenant contained in any of the Secured Debt Documents. Prior to executing any
amendment or supplement pursuant to this Section 7.1, the Collateral Trustee
will be entitled to receive an opinion of counsel of the Borrower to the effect
that the execution of such document is authorized or permitted hereunder.
(d) The holders of Parity Lien Obligations and the Parity Lien
Representatives agree that each Security Document that secures Parity Lien
Obligations (but not also securing Priority Lien Obligations) will include the
following language:
"Notwithstanding anything herein to the contrary, the lien and
security interest granted to the Collateral Trustee pursuant to this Agreement
and the exercise of any right or remedy by such Collateral Trustee hereunder are
subject to the provisions of the Collateral Trust Agreement, dated as of
February 11, 2005, among Builders FirstSource, Inc., the Pledgors from time to
time party thereto, UBS AG, Stamford Branch, as Administrative Agent under the
Credit Agreement (as defined therein), Wilmington Trust Company, as Trustee
under the Indenture (as defined therein) and UBS AG, Stamford Branch, as
Collateral Trustee (as amended, supplemented, amended and restated or otherwise
modified and in effect from time to time, the "Collateral Trust Agreement"). In
the event of any conflict between the terms of the Collateral Trust Agreement
and this Agreement, the terms of the Collateral Trust Agreement will govern."
35
; provided, however, that if the jurisdiction in which any such Parity Lien
Document will be filed prohibits the inclusion of the language above or would
prevent a document containing such language from being recorded, the Parity Lien
Representatives and the Priority Lien Representatives agree, prior to such
Parity Lien Document being entered into, to negotiate in good faith replacement
language stating that the lien and security interest granted under such Parity
Lien Document is subject to the provisions of this Agreement.
SECTION 7.2 Voting. In connection with any matter under this Agreement
requiring a vote of holders of Secured Debt, each Series of Secured Debt will
cast its votes in accordance with the Secured Debt Documents governing such
Series of Secured Debt. The amount of Secured Debt to be voted by a Series of
Secured Debt will equal (1) the aggregate principal amount of Secured Debt held
by such Series of Secured Debt (including outstanding letters of credit whether
or not then available or drawn), plus (2) other than in connection with an
exercise of remedies, the aggregate unfunded commitments to extend credit which,
when funded, would constitute Indebtedness of such Series of Secured Debt.
Following and in accordance with the outcome of the applicable vote under its
Secured Debt Documents, the Secured Debt Representative of each Series of
Secured Debt will cast all of its votes as a block in respect of any vote under
this Agreement.
SECTION 7.3 Further Assurances.
(a) The Borrower and each of the other Pledgors will do or cause to
be done all acts and things that may be required, or that the Collateral Trustee
from time to time may reasonably request, to assure and confirm that the
Collateral Trustee holds, for the benefit of the holders of Secured Obligations,
duly created and enforceable and perfected Liens upon the Collateral (including
any property or assets that are acquired or otherwise become Collateral after
the date hereof), in each case as contemplated by, and with the Lien priority
required under, the Secured Debt Documents.
(b) Upon the reasonable request of the Collateral Trustee or any
Secured Debt Representative at any time and from time to time, the Borrower and
each of the other Pledgors will promptly execute, acknowledge and deliver such
security documents, instruments, certificates, notices and other documents, and
take such other actions as may be reasonably required, or that the Collateral
Trustee may reasonably request, to create, perfect, protect, assure or enforce
the Liens and benefits intended to be conferred, in each case as contemplated by
the Secured Debt Documents for the benefit of holders of Secured Obligations.
(c) Upon the reasonable request of the Collateral Trustee, the
Borrower and the other Pledgors will permit the Collateral Trustee or any of its
agents or representatives, at reasonable times and intervals upon reasonable
prior notice, to visit their offices and sites and inspect any of the Collateral
and to discuss matters relating to the Collateral with their respective officers
and independent public accountants. The Borrower and the other Pledgors shall,
at any reasonable time and from time to time upon reasonable prior notice,
permit the Collateral Trustee or any of its agents or representatives to examine
and make copies of and abstracts from the records and books of account of the
Borrower and the other Pledgors and their Subsidiaries, all at the Borrower's
expense.
36
(d) In connection with any refinancing of Priority Lien Debt, the
Parity Collateral Trustee agrees to record a memorandum of this Agreement, a
subordination of liens agreement or other similar agreement reasonably requested
by the Borrower or the Priority Collateral Trustee to enable the Priority
Collateral Trustee to obtain or reaffirm any title insurance with respect to
real property owned by the Borrower or any of the other Pledgors that is pledged
to the Priority Collateral Trustee under any Security Documents.
SECTION 7.4 Perfection of Junior Trust Estate.
Solely for purposes of perfecting the Liens of the Parity Collateral
Trustee in any portion of the Junior Trust Estate in the possession or control
of the Priority Collateral Trustee (or its agents or bailees) as part of the
Senior Trust Estate including, without limitation, any instruments, goods,
negotiable documents, tangible chattel paper, electronic chattel paper,
certificated securities, money, deposit accounts and securities accounts, the
Priority Collateral Trustee, the holders of Priority Lien Obligations and the
Priority Lien Representatives hereby acknowledge that the Priority Collateral
Trustee also holds such property as agent for the benefit of the holders of
Parity Lien Obligations and the Parity Lien Representatives.
SECTION 7.5 Successors and Assigns.
(a) Except as provided in Sections 5.2 and 6.2, the Collateral
Trustee may not, in its capacity as such, delegate any of its duties or assign
any of its rights hereunder, and any attempted delegation or assignment of any
such duties or rights will be null and void. All obligations of the Collateral
Trustee hereunder will inure to the sole and exclusive benefit of, and be
enforceable by, each Secured Debt Representative and each present and future
holder of Secured Obligations, each of whom will be entitled to enforce this
Agreement as a third-party beneficiary hereof, and all of their respective
successors and assigns.
(b) Neither the Borrower nor any other Pledgor may delegate any of
its duties or assign any of its rights hereunder, and any attempted delegation
or assignment of any such duties or rights will be null and void. All
obligations of the Borrower and the other Pledgors hereunder will inure to the
sole and exclusive benefit of, and be enforceable by, the Collateral Trustee,
each Secured Debt Representative and each present and future holder of Secured
Obligations, each of whom will be entitled to enforce this Agreement as a
third-party beneficiary hereof, and all of their respective successors and
assigns.
SECTION 7.6 Delay and Waiver. No failure to exercise, no course of dealing
with respect to the exercise of, and no delay in exercising, any right, power or
remedy arising under this Agreement or any of the Security Documents will impair
any such right, power or remedy or operate as a waiver thereof. No single or
partial exercise of any such right, power or remedy will preclude any other or
future exercise thereof or the exercise of any other right, power or remedy. The
remedies herein are cumulative and are not exclusive of any remedies provided by
law.
SECTION 7.7 Notices. Any communications, including notices and
instructions, between the parties hereto or notices provided herein to be given
may be given to the following addresses:
37
If to the Collateral Trustee: UBS AG, Stamford Branch
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxx
Fax: (000) 000-0000
If to the Borrower or any other
Pledgor: Builders FirstSource, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
Fax: (000) 000-0000
if to the Administrative Agent, to its address specified in the Credit
Agreement, if to the Trustee, to its address specified in the Indenture, and if
to any other Secured Debt Representative, to such address as it may specify by
written notice to the parties named above.
All notices and communications will be mailed by first class mail,
certified or registered, return receipt requested, or by overnight air courier
guaranteeing next day delivery, to the relevant address set forth above or, as
to holders of Secured Debt, its address shown on the register kept by the office
or agency where the relevant Secured Debt may be presented for registration of
transfer or for exchange. To the extent applicable, any notice or communication
will also be so mailed to any Person described in Section 313(c) of the Trust
Indenture Act of 1939, as amended, to the extent required thereunder. Failure to
mail a notice or communication to a holder of Secured Debt or any defect in it
will not affect its sufficiency with respect to other holders of Secured Debt.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
SECTION 7.8 Notice Following Discharge of Priority Lien Obligations.
Promptly following the Discharge of Priority Lien Obligations with respect to
one or more Series of Priority Lien Debt, each Priority Lien Representative with
respect to each applicable Series of Priority Lien Debt that is so discharged
will provide written notice of such discharge to the Collateral Trustee and to
each other Secured Debt Representative.
SECTION 7.9 Entire Agreement. This Agreement states the complete agreement
of the parties relating to the undertaking of the Collateral Trustee set forth
herein and supersedes all oral negotiations and prior writings in respect of
such undertaking.
SECTION 7.10 Compensation; Expenses. The Pledgors jointly and severally
agree to pay, promptly upon demand:
(1) such compensation to the Collateral Trustee and its agents as
the Borrower and the Collateral Trustee may agree in writing from time to
time;
38
(2) all reasonable out-of-pocket costs and expenses incurred by the
Collateral Trustee and its agents in the preparation, execution, delivery,
filing, recordation, administration or enforcement of this Agreement or
any Security Document or any consent, amendment, waiver or other
modification relating hereto or thereto;
(3) all reasonable out-of-pocket fees, expenses and disbursements of
legal counsel and any auditors, accountants, consultants or appraisers or
other professional advisors and agents engaged by the Collateral Trustee
or any Secured Debt Representative incurred in connection with the
negotiation, preparation, closing, administration, performance or
enforcement of this Agreement and the Security Documents or any consent,
amendment, waiver or other modification relating hereto or thereto and any
other document or matter requested by the Borrower or any other Pledgor;
(4) all reasonable out-of-pocket costs and expenses incurred by the
Collateral Trustee and its agents in creating, perfecting, preserving,
releasing or enforcing the Collateral Trustee's Liens on the Collateral,
including filing and recording fees, expenses and taxes, stamp or
documentary taxes, search fees, and title insurance premiums; and
(5) after the occurrence of any Secured Debt Default, all costs and
expenses incurred by the Collateral Trustee, its agents and any Secured
Debt Representative in connection with the preservation, collection,
foreclosure or enforcement of the Collateral subject to the Security
Documents or any interest, right, power or remedy of the Collateral
Trustee or in connection with the collection or enforcement of any of the
Secured Obligations or the proof, protection, administration or resolution
of any claim based upon the Secured Obligations in any Insolvency or
Liquidation Proceeding, including all fees and disbursements of attorneys,
accountants, auditors, consultants, appraisers and other professionals
engaged by the Collateral Trustee, its agents or the Secured Debt
Representatives.
The agreements in this Section 7.10 will survive repayment of all other Secured
Obligations and the removal or resignation of the Collateral Trustee.
SECTION 7.11 Indemnity.
(a) The Pledgors jointly and severally agree to defend, indemnify,
pay and hold harmless the Collateral Trustee, each Secured Debt Representative,
each holder of Secured Obligations and each of their respective Affiliates and
each and all of the directors, officers, partners, trustees, employees,
attorneys and agents, and (in each case) their respective heirs,
representatives, successors and assigns (each of the foregoing, an "INDEMNITEE")
from and against any and all Indemnified Liabilities; provided, no Indemnitee
will be entitled to indemnification hereunder with respect to any Indemnified
Liability to the extent such Indemnified Liability is found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such Indemnitee.
(b) The Pledgors jointly and severally agree that all amounts due
under this Section 7.11 will be payable upon demand.
39
(c) To the extent that the undertakings to defend, indemnify, pay
and hold harmless set forth in Section 7.11(a) may be unenforceable in whole or
in part because they violate any law or public policy, each of the Pledgors will
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
(d) No Pledgor will ever assert any claim against any Indemnitee,
and no Indemnitee will ever assert any claim against any Pledgor, on any theory
of liability, for any consequential damages arising out of, in connection with,
or as a result of, this Agreement or any other Secured Debt Document or any
agreement or instrument or transaction contemplated hereby or relating in any
respect to any Indemnified Liability, and each of the Pledgors and the
Indemnitees hereby forever waives, releases and agrees not to xxx upon any claim
for any such consequential damages, whether or not accrued and whether or not
known or suspected to exist in its favor.
(e) The agreements in this Section 7.11 will survive repayment of
all other Secured Obligations and the removal or resignation of the Collateral
Trustee.
SECTION 7.12 Severability. If any provision of this Agreement is invalid,
illegal or unenforceable in any respect or in any jurisdiction, the validity,
legality and enforceability of such provision in all other respects and of all
remaining provisions, and of such provision in all other jurisdictions, will not
in any way be affected or impaired thereby.
SECTION 7.13 Headings. Section headings herein have been inserted for
convenience of reference only, are not to be considered a part of this Agreement
and will in no way modify or restrict any of the terms or provisions hereof.
SECTION 7.14 Obligations Secured. All obligations of the Pledgors set
forth in or arising under this Agreement will be Secured Obligations and are
secured by all Liens granted by the Security Documents.
SECTION 7.15 Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL
GOVERN AND BE USED TO CONSTRUE THIS AGREEMENT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 7.16 Consent to Jurisdiction. All judicial proceedings brought
against any party hereto arising out of or relating to this Agreement or any of
the Security Documents may be brought in any state or federal court of competent
jurisdiction in the State, County and City of New York. By executing and
delivering this Agreement, each Pledgor, for itself and in connection with its
properties, irrevocably:
(1) accepts generally and unconditionally the nonexclusive
jurisdiction and venue of such courts;
(2) waives any defense of forum non conveniens;
40
(3) agrees that service of all process in any such proceeding in any
such court may be made by registered or certified mail, return receipt
requested, to such party at its address provided in accordance with
Section 7.7;
(4) agrees that service as provided in clause (3) above is
sufficient to confer personal jurisdiction over such party in any such
proceeding in any such court and otherwise constitutes effective and
binding service in every respect; and
(5) agrees each party hereto retains the right to serve process in
any other manner permitted by law or to bring proceedings against any
party in the courts of any other jurisdiction.
SECTION 7.17 Waiver of Jury Trial. Each party to this Agreement waives its
rights to a jury trial of any claim or cause of action based upon or arising
under this Agreement or any of the Security Documents or any dealings between
them relating to the subject matter of this Agreement or the intents and
purposes of the Security Documents. The scope of this waiver is intended to be
all-encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this Agreement and the Security Documents,
including contract claims, tort claims, breach of duty claims and all other
common law and statutory claims. Each party to this Agreement acknowledges that
this waiver is a material inducement to enter into a business relationship, that
each party hereto has already relied on this waiver in entering into this
Agreement, and that each party hereto will continue to rely on this waiver in
its related future dealings. Each party hereto further warrants and represents
that it has reviewed this waiver with its legal counsel and that it knowingly
and voluntarily waives its jury trial rights following consultation with legal
counsel. This waiver is irrevocable, meaning that it may not be modified either
orally or in writing (other than by a mutual written waiver specifically
referring to this Section 7.17 and executed by each of the parties hereto), and
this waiver will apply to any subsequent amendments, renewals, supplements or
modifications of or to this Agreement or any of the Security Documents or to any
other documents or agreements relating thereto. In the event of litigation, this
Agreement may be filed as a written consent to a trial by the court.
SECTION 7.18 Counterparts. This Agreement may be executed in any number of
counterparts (including by facsimile), each of which when so executed and
delivered will be deemed an original, but all such counterparts together will
constitute but one and the same instrument.
SECTION 7.19 Effectiveness. This Agreement will become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
each party of written notification of such execution and written or telephonic
authorization of delivery thereof.
SECTION 7.20 Additional Pledgors. The Borrower will cause each Person that
becomes a Pledgor or is required by any Secured Debt Document to become a party
to this Agreement to become a party to this Agreement, for all purposes of this
Agreement, by causing such Person to execute and deliver to the parties hereto a
Collateral Trust Joinder, whereupon such Person will be bound by the terms
hereof to the same extent as if it had executed and delivered this Agreement as
of the date hereof. The Borrower shall promptly provide each
41
Secured Debt Representative with a copy of each Collateral Trust Joinder
executed and delivered pursuant to this Section 7.20.
SECTION 7.21 Continuing Nature of this Agreement. This Agreement,
including the subordination provisions hereof, will be reinstated if at any time
any payment or distribution in respect of any of the Priority Lien Obligations
is rescinded or must otherwise be returned in an Insolvency or Liquidation
Proceeding or otherwise by any holder of Priority Lien Obligations or Priority
Lien Representative or any representative of any such party (whether by demand,
settlement, litigation or otherwise). In the event that all or any part of a
payment or distribution made with respect to the Priority Lien Obligations is
recovered from any holder of Priority Lien Obligations or any Priority Lien
Representative in an Insolvency or Liquidation Proceeding or otherwise, and a
payment or distribution is received by any holder of Parity Lien Obligations or
Parity Lien Representative with respect to the Parity Lien Obligations from the
proceeds of any Collateral or any title insurance policy required by any real
property mortgage at any time after the date of the payment or distribution that
is so recovered, whether pursuant to a right of subrogation or otherwise, that
Parity Lien Representative or that holder of a Parity Lien Obligation, as the
case may be, will, upon demand from the holders of the Priority Lien
Obligations, the Priority Lien Representative or the Collateral Trustee (in its
capacity as agent for the holders of the Priority Lien Obligations), forthwith
deliver the same to the Collateral Trustee, for the account of the holders of
the Priority Lien Obligations and other Obligations secured by a Permitted Prior
Lien, to be applied in accordance with Section 3.4. Until so delivered, such
proceeds will be held by that Parity Lien Representative or that holder of a
Parity Lien Obligation, as the case may be, for the benefit of the holders of
the Priority Lien Obligations and other Obligations secured by a Permitted Prior
Lien.
SECTION 7.22 Insolvency. This Agreement will be applicable both before and
after the commencement of any Insolvency or Liquidation Proceeding by or against
any Pledgor. The relative rights, as provided for in this Agreement, will
continue after the commencement of any such Insolvency or Liquidation Proceeding
on the same basis as prior to the date of the commencement of any such case, as
provided in this Agreement.
SECTION 7.23 Rights and Immunities of Secured Debt Representatives. The
Administrative Agent will be entitled to all of the rights, protections,
immunities and indemnities set forth in the Credit Agreement, the Trustee will
be entitled to all of the rights, protections, immunities and indemnities set
forth in the Indenture and any future Secured Debt Representative will be
entitled to all of the rights, protections, immunities and indemnities set forth
in the credit agreement, indenture or other agreement governing the applicable
Secured Debt with respect to which such Person will act as representative, in
each case as if specifically set forth herein. In no event will any Secured Debt
Representative be liable for any act or omission on the part of the Pledgors or
the Collateral Trustee hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this Collateral Trust
Agreement to be executed by their respective officers or representatives as of
the day and year first above written.
BUILDERS FIRSTSOURCE, INC.
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
JLL BUILDING PRODUCTS, LLC
By: /s/ Xxxxx Xxxxxxx
------------------------
Name: Xxxxx Xxxxxxx
Title: Managing Director
BUILDERS FIRSTSOURCE NORTHEAST
GROUP, LLC
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
Collateral Trust Agreement
S-1
BUILDERS FIRSTSOURCE - TEXAS GENPAR,
LLC
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
BUILDERS FIRSTSOURCE - MBS, LLC
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President
BUILDERS FIRSTSOURCE - TEXAS GROUP, L.P.
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
BFS TEXAS, LLC
By:/s/ Xxxxxx X. XxXxxxxxx
------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
S-2
BUILDERS FIRSTSOURCE - SOUTH TEXAS, L.P.
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
BUILDERS FIRSTSOURCE - TEXAS INSTALLED SALES,
L.P.
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
BFS IP, LLC
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
BUILDERS FIRSTSOURCE - INTELLECTUAL
PROPERTY, L.P.
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
S- 3
BUILDERS FIRSTSOURCE HOLDINGS, INC.
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
BUILDERS FIRSTSOURCE - DALLAS, LLC
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
BUILDERS FIRSTSOURCE - FLORIDA, LLC
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
BUILDERS FIRSTSOURCE - FLORIDA
DESIGN CENTER, LLC
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
BUILDERS FIRSTSOURCE - OHIO VALLEY,
LLC
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
S-4
BFS, LLC
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
BUILDERS FIRSTSOURCE - ATLANTIC
GROUP, LLC
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
BUILDERS FIRSTSOURCE OF NASHVILLE,
INC.
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
BUILDERS FIRSTSOURCE - SOUTHEAST
GROUP, LLC
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
BUILDERS FIRSTSOURCE - SNC, LLC
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
S-5
CCWP, INC.
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
BUILDERS FIRSTSOURCE - RALEIGH, LLC
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
BUILDERS FIRSTSOURCE - COLORADO
GROUP, LLC
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
BUILDERS FIRSTSOURCE - COLORADO, LLC
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
BUILDERS FIRSTSOURCE FINANCING, INC.
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Senior Vice President
S-6
UBS AG, STAMFORD BRANCH,
as Administrative Agent
By: /s/ Xxxxxxx X. Saint
------------------------
Name: Xxxxxxx X. Saint
Title: Director
By: /s/ Xxxxxx Xxxxx
------------------------
Name: Xxxxxx Xxxxx
Title: Associate Director
WILMINGTON TRUST COMPANY, as Trustee
under the Indenture
By: /s/ Xxxxxxx X. Xxxxxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Financial Services Officer
S-7
UBS AG, STAMFORD BRANCH,
as Priority Collateral Trustee
By: /s/ Xxxxxxx X. Saint
---------------------------
Name: Xxxxxxx X. Saint
Title: Director
By: /s/ Xxxxxx Xxxxx
---------------------------
Name: Xxxxxx Xxxxx
Title: Associate Director
UBS AG, STAMFORD BRANCH,
as Parity Collateral Trustee
By: /s/ Xxxxxxx X. Saint
---------------------------
Name: Xxxxxxx X. Saint
Title: Director
By: /s/ Xxxxxx Xxxxx
---------------------------
Name: Xxxxxx Xxxxx
Title: Associate Director
S-8
EXHIBIT A
to Collateral Trust Agreement
[FORM OF]
COLLATERAL TRUST JOINDER
The undersigned, _____________________, a _______________, hereby agrees
to become party as [a Pledgor] [a Parity Lien Representative] [a Priority Lien
Representative] under the Collateral Trust Agreement dated as of February 11,
2005 (the "COLLATERAL TRUST AGREEMENT") among Builders FirstSource, Inc., the
Pledgors from time to time party thereto, UBS AG, Stamford Branch, as
Administrative Agent under the Credit Agreement (as defined therein), Wilmington
Trust Company, as Trustee under the Indenture (as defined therein), UBS AG,
Stamford Branch, as Priority Collateral Trustee, and UBS AG, Stamford Branch, as
Parity Collateral Trustee, as amended, supplemented, amended and restated or
otherwise modified and in effect from time to time, for all purposes thereof on
the terms set forth therein, and to be bound by the terms of the Collateral
Trust Agreement as fully as if the undersigned had executed and delivered the
Collateral Trust Agreement as of the date thereof.
The provisions of Article 7 of the Collateral Trust Agreement will apply
with like effect to this Joinder.
IN WITNESS WHEREOF, the parties hereto have caused this Collateral Trust
Joinder to be executed by their respective officers or representatives as of
___________________, 20____.
[___________________________________]
By: ___________________________________
Name: ________________________________
Title: ________________________________
EXHIBIT A
