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EXHIBIT 10.2
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT (this "AGREEMENT") is entered into by and
between Agent and Trustee.
BACKGROUND
A. Metal Management, Inc., a Delaware corporation ("MTLM"), and its
wholly-owned subsidiaries set forth on SCHEDULE 1 attached hereto and by this
reference made a part hereof (MTLM and such subsidiaries are sometimes
hereinafter referred to, individually, as a "CREDIT PARTY" and, collectively, as
"CREDIT PARTIES") are jointly and severally indebted to Senior Lenders pursuant
to the Senior Credit Documents. All Senior Indebtedness is secured by a first
priority continuing Lien on all Senior Lender Collateral.
B. The Credit Parties are indebted to the Noteholders pursuant to the
Note Documents. All Note Indebtedness is secured by a second priority continuing
Lien on all Senior Lender Collateral to the extent and at such times as shall be
required pursuant to the Note Documents.
C. Agent and Trustee have entered into this Agreement to set forth,
among other things, the relative priority of their respective Liens on the
Senior Lender Collateral and Note Collateral.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are each hereby acknowledged, Agent and Trustee hereby
agree as follows:
SECTION 1. CERTAIN DEFINITIONS. The following terms shall have the
following meanings for purposes of this Agreement (including the premises and
background recitals hereto):
"AGENT" means Bankers Trust Company, a New York banking
corporation, acting in its capacity as Agent for the benefit of itself
and each Senior Lender under the Senior Credit Agreement, together with
its successors in such capacity.
"BANKRUPTCY CODE" means Chapter 11 of Title 11 of the United
States Code (11 U.S.C. ss. 101 et seq.), as amended from time to time,
and any successor statute, and all rules and regulations promulgated
thereunder.
"INDEBTEDNESS" means, with respect to any Person, any
indebtedness, whether or not contingent, in respect of borrowed money
or evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof) or
representing the deferred and unpaid balance of the purchase price of
any Property (including any deferred and unpaid balance under a capital
lease), except any such balance that constitutes an accrued expense or
a trade payable, if and to the extent any of the foregoing indebtedness
would appear as a liability upon a balance sheet of
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such Person prepared on a consolidated basis in accordance with
generally accepted accounting principles in effect from time to time,
and shall also include, to the extent not otherwise included, any
direct or indirect guaranty by such Person of any items included
within this definition.
"LIEN" means any lien, claim, charge, pledge, security
interest, assignment, hypothecation, deed of trust, mortgage, lease,
conditional sale, retention of title, or other preferential arrangement
having substantially the same economic effect as any of the foregoing,
whether voluntary or imposed by law.
"NOTE COLLATERAL" means all Senior Lender Collateral with
respect to which the Trustee (for its benefit and the benefit of the
Noteholders) has been granted a Lien pursuant to the provisions of the
applicable Note Documents to the extent and at such times as may be
required pursuant to the Note Documents.
"NOTE DOCUMENTS" means and includes the Note Indenture, the
Notes and all security agreements, guarantees, pledge agreements,
mortgages, deeds of trust and other agreements, documents and
instruments now or at any time hereafter entered into or delivered by
any Credit Party or other Person pursuant thereto, or evidencing any
replacement, substitution, refunding, renewal or refinancing of or for
all or any part of, the Note Indebtedness, in each case as amended,
restated, supplemented or otherwise modified and in effect from time to
time, to the extent permitted pursuant to the terms hereof.
"NOTE INDEBTEDNESS" means all Indebtedness, liabilities and
other obligations of any and every kind and nature now existing or
hereafter arising, contingent or otherwise, of any Credit Party or any
other Person under, in connection with, or evidenced or secured by the
Note Indenture and the other Note Documents, in each case including,
without limitation, obligations to pay (I) principal, (II) interest or
premium (including interest accruing after the commencement of any
Proceeding, whether or not constituting an allowed claim in such
Proceeding), (III) fees, (IV) costs, expenses and other amounts related
to any indemnity against loss, damage or liability, and (V) any other
monetary obligation.
"NOTE INDENTURE" means that certain Amendment and Restated
Indenture date as of June 29, 2001, among Credit Parties and Trustee.
"NOTEHOLDER" has the meaning ascribed to the term "Holder" (as
defined in the Note Indenture).
"NOTES" has the meaning ascribed to the term "Notes" (as
defined in the Note Indenture).
"PERSON" means any natural person, corporation, general or
limited partnership, limited liability company, firm, trust,
association, government, governmental agency or other entity, whether
acting in an individual, fiduciary or other capacity.
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"PROCEEDING" means, with respect to any Person, any (a)
insolvency, bankruptcy, receivership, liquidation, reorganization,
readjustment, composition or other similar proceeding relating to such
Person or its Property or creditors in such capacity, (b) proceeding
for any liquidation, dissolution or other winding-up of such Person,
voluntary or involuntary, whether or not involving insolvency or
proceedings under the Bankruptcy Code, whether partial or complete and
whether by operation of law or otherwise, (c) assignment for the
benefit of creditors of such Person or (d) other marshaling of the
assets of such Person.
"PROPERTY" means, with respect to any Person, all property and
interests in property of such Person, whether real, personal or mixed,
whether now owned or existing or hereafter acquired or arising and
wheresoever located.
"SENIOR COMMITMENT" has the meaning ascribed to the term
"Commitment" (as defined in the Senior Credit Agreement).
"SENIOR CREDIT AGREEMENT" means that certain Credit Agreement
dated as of June 29, 2001, among Credit Parties, Agent and Senior
Lenders.
"SENIOR CREDIT DOCUMENTS" means and includes the Senior Credit
Agreement, all notes issued thereunder or in connection therewith and
all security agreements, guaranties, pledge agreements, mortgages,
deeds of trust and other agreements, documents and instruments now or
at any time hereafter entered into or delivered by any Credit Party or
other Person pursuant thereto, or evidencing any replacement,
substitution, refunding, renewal or refinancing of or for all or any
part of, the Senior Indebtedness, in each case as amended, restated,
supplemented or otherwise modified and in effect from time to time, to
the extent permitted pursuant to the terms hereof.
"SENIOR ENFORCEMENT ACTION" means any of the following: (a)
acceleration by Senior Lenders of all or any part of the Senior
Indebtedness; (b) commencement of any Proceeding with respect to any
Credit Party; (c) initiation of any suit or action, including any
Proceeding, against or with respect to any Credit Party or other Person
to enforce payment of or to collect the whole or any part of the Senior
Indebtedness, or to enforce any other rights, powers, privileges or
remedies under the Senior Credit Documents; or (d) the taking by Agent
of any action under the provisions of any state or federal law,
including, without limitation, the Bankruptcy Code or the Uniform
Commercial Code, to enforce, foreclose upon, take possession of or sell
any Property of any Credit Party or any other Person on account of all
or any part of the Senior Indebtedness, including, any Senior Lender
Collateral.
"SENIOR INDEBTEDNESS" means all Indebtedness, liabilities and
other obligations of any and every kind and nature now existing or
hereafter arising, contingent or otherwise, of any Credit Party or any
other Person under, in connection with, or evidenced or secured by the
Senior Credit Agreement and the other Senior Credit Documents, in each
case including, without limitation, obligations to pay (i) principal,
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(ii) interest or premium (including interest accruing after the
commencement of any Proceeding, whether or not constituting an allowed
claim in such Proceeding), (iii) fees, (iv) costs, expenses and other
amounts related to any indemnity against loss, damage or liability, and
(v) any other monetary obligation.
"SENIOR LENDER" has the meaning ascribed to the term "Lender"
(as defined in the Senior Credit Agreement).
"SENIOR LENDER COLLATERAL" means all of each Credit Party's
Property, whether now owned or existing or hereafter acquired or
arising and wheresoever located, including, without limitation, (i) all
of each Credit Party's accounts, machinery, equipment, fixtures,
inventory, goods, chattel paper, general intangibles, investment
property, instruments and documents, (ii) all real property and
interests in real property (including leasehold interests) of each
Credit Party, and (iii) all accessions to, substitutions for and
replacements, products and proceeds of all of the foregoing Property.
"TRUSTEE" means BNY Midwest Trust Company, an Illinois banking
corporation, acting in its capacity as Trustee for its benefit and for
the benefit of the Noteholders under the Note Indenture and the other
Note Documents, together with its successors in such capacity.
"UCC" means the Uniform Commercial Code, as in effect from
time to time in any applicable jurisdiction.
All terms used but not otherwise defined herein but defined in the UCC
shall have the respective meanings provided in the UCC.
SECTION 2. LIEN PRIORITIES.
2.1 ACKNOWLEDGMENT OF LIENS; SUBORDINATION.
(a) Trustee hereby acknowledges that Agent has been granted Liens upon
all of the Senior Lender Collateral pursuant to the Senior Credit Documents.
Agent hereby acknowledges that the Trustee has been granted Liens upon all of
the Note Collateral pursuant to the Note Documents.
(b) Notwithstanding the date, manner or order of grant, attachment or
perfection of the Liens on all or any part of the Senior Lender Collateral
granted to Agent and Trustee, and notwithstanding the provisions of the UCC or
any other applicable law or decision, or the terms or provisions of the Senior
Credit Documents or Note Documents, respectively, or any other circumstance
whatsoever, each of Agent and Trustee hereby agrees that (i) Agent on behalf of
Agent and the Senior Lenders shall have a first, prior, senior and continuing
Lien on all of the Senior Lender Collateral to secure the prompt and complete
payment, performance and observance of all Senior Indebtedness and (ii) any Lien
on all or any part of the Senior Lender Collateral now or hereafter held by
Trustee (on its behalf or on behalf of the Noteholders),
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regardless of when or how acquired, whether by grant, statute, operation of law,
subrogation or otherwise, shall be in all respects and for all purposes subject
to, junior to and subordinate to all Liens on all or any part of the Senior
Lender Collateral granted to or held by Agent on behalf of Agent and the Senior
Lenders.
(c) The relative priorities of the respective Liens described in this
SECTION 2.1 shall not be altered or otherwise affected by any amendment,
modification, supplement, extension, renewal, restatement, replacement or
refinancing of the Senior Indebtedness or Note Indebtedness, respectively, or by
any action or inaction which either Agent or Trustee may take or fail to take in
respect of the Senior Lender Collateral or Note Collateral, respectively.
2.2 PROHIBITION ON CONTESTING LIENS. Each of Agent and Trustee agrees
not to seek to challenge, to avoid, to subordinate or to contest or directly or
indirectly to support any other Person in challenging, avoiding or contesting in
any judicial or other proceeding, including, without limitation, any Proceeding,
the priority, validity, extent, perfection or enforceability of any Lien held by
Agent or Trustee, as the case may be, in all or any part of the Senior Lender
Collateral or Note Collateral, respectively; PROVIDED, that nothing in this
SECTION 2.1 is intended or shall be deemed or construed to limit in any way the
ability of Agent or Trustee to enforce all of the terms and provisions of this
Agreement. As between Agent and Trustee, the terms of this Agreement shall
govern even if part or all of the Note Indebtedness or Senior Indebtedness, as
the case may be, or the respective Liens securing payment, observance and
performance thereof are avoided, disallowed, set aside or otherwise invalidated
in any judicial proceeding or otherwise.
SECTION 3. ENFORCEMENT.
3.1 NO EXERCISE OF REMEDIES. Unless and until Agent and each Senior
Lender shall have received indefeasible payment in full in cash of all Senior
Indebtedness and the Senior Credit Documents and all Senior Commitments
thereunder shall have terminated pursuant to the respective terms and provisions
thereof, except as otherwise expressly permitted in SECTIONS 3.2 and 3.3 below,
neither Trustee nor any Noteholder shall ask, demand or xxx for any right or
remedy in respect of all or any part of the Senior Lender Collateral and Trustee
and each Noteholder agree not to take or receive from any Credit Party, directly
or indirectly, in cash or other Property or by set-off or in any other manner,
whether pursuant to any enforcement, collection, execution, levy or foreclosure
proceeding or otherwise, all or any part of the Senior Lender Collateral.
Without limiting the generality of the foregoing, unless and until Agent and
each Senior Lender shall have received indefeasible payment in full in cash of
all Senior Indebtedness and the Senior Credit Documents and all Senior
Commitments thereunder shall have terminated pursuant to the respective terms
and provisions thereof, (i) neither Trustee nor any Noteholder shall exercise or
otherwise assert any right or remedy in respect of all or any part of the Senior
Lender Collateral or any Liens thereon; (ii) the sole right of Trustee with
respect to the Senior Lender Collateral shall be to hold a Lien thereon to the
extent granted pursuant to the Note Documents and to receive proceeds thereof
remaining after such payment and termination; and (iii) without the prior
written consent of Agent, neither Trustee nor any Noteholder shall exercise any
right Trustee may have under the Note Documents or under the Uniform Commercial
Code or other applicable law to deliver any notices to account debtors informing
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them of Trustee's interest in any accounts of any Credit Party or directing such
account debtors to make payments in any particular manner of amounts due in
respect of any such account.
3.2 COOPERATION. Trustee agrees that, unless and until Agent and each
Senior Lender shall have received indefeasible payment in full in cash of all
Senior Indebtedness and the Senior Credit Documents and all Senior Commitments
thereunder shall have terminated pursuant to the respective terms and provisions
thereof, Trustee will not commence, or join with any creditor other than Agent
in commencing, any enforcement, collection, execution, levy or foreclosure
proceeding with respect to any Lien held by it in, or otherwise with respect to,
all or any part of the Senior Lender Collateral, including, without limitation,
petitioning, filing or joining in any involuntary Proceeding pursuant to Section
303 of the Bankruptcy Code.
3.3 CERTAIN EXERCISES. The provisions of this SECTION 3 are intended to
limit the enforcement of Trustee's rights and remedies with respect to the
Senior Lender Collateral or any Lien thereon for so long and to the extent set
forth in SUBSECTIONS 3.1 and 3.2 hereof. Nothing in this SECTION 3 is intended
or shall be deemed or construed to prohibit Trustee from making any demand for
payment or any declaration of acceleration with respect to the Notes or
commencing any judicial or other action to collect (without enforcement of any
of Trustee's rights and remedies with respect to all or any part of the Senior
Lender Collateral) the Note Indebtedness under the Notes and the Note Indenture.
SECTION 4. LIQUIDATION; DISSOLUTION; BANKRUPTCY. In the event of any
Proceeding involving any Credit Party, or any sale, transfer or other
disposition of all or substantially all of the assets of any Credit Party:
(a) Trustee agrees that Senior Lenders may consent to the use of cash
collateral or the provision of financing by Senior Lenders to Credit Parties on
such terms and conditions and in such amounts as Senior Lenders, in their sole
discretion, may decide and that, in connection with such cash collateral usage
or such financing, as the case may be, each Credit Party (or a trustee appointed
for the estate of any Credit Party) may grant to Agent, for the benefit of Agent
and Senior Lenders, Liens on all of such Credit Party's Property, which Liens
(i) shall secure payment, performance and observance of all Senior Indebtedness
(whether such Senior Indebtedness arose prior to the commencement of any
Proceeding or at any time thereafter); and (ii) shall be superior in priority to
the Liens in favor of Trustee on any Property of any Credit Party; PROVIDED,
HOWEVER, that Trustee does not hereby waive any rights to seek adequate
protection to the extent that holders of other Liens that are subject and
subordinate to the Liens of the Senior Indebtedness are entitled to and obtain
adequate protection. Trustee agrees that it will not object to or oppose a sale
or other disposition of any Property of any Credit Party securing all or any
part of the Senior Indebtedness free and clear of Liens or other claims of
Trustee under Section 363 of the Bankruptcy Code or any other provision of the
Bankruptcy Code if Senior Lenders have consented to such sale or disposition and
the respective interests of Agent and Trustee attach to the proceeds thereof,
subject in any event to the provisions hereof. Trustee agrees to turn over any
"adequate protection" of Trustee's interest in any Senior Lender Collateral that
it receives in any Proceeding to Agent to the extent necessary to make whole
Agent and Senior Lenders and agrees that it will not seek to have the automatic
stay lifted with respect to any Senior Lender Collateral, to appoint a Chapter
11 trustee under Section 1104 of
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the Bankruptcy Code or to convert or dismiss such Proceeding under Section 1112
of the Bankruptcy Code, in each case without the prior written consent of Agent
or unless Agent seeks such relief. Trustee waives in any Proceeding under the
Bankruptcy Code any claim it may now or hereafter have under Section 1111(b)(2)
of the Bankruptcy Code, including, without limitation, any such claim arising
out of the election by Senior Lenders of the application of Section 1111(b)(2)
of the Bankruptcy Code, and/or any borrowing or grant of a security interest
under Section 364 of the Bankruptcy Code by any Credit Party, as debtor in
possession.
(b) Each of Agent and Trustee agrees not to, directly or indirectly,
take any action or vote in any way that would be in violation of, or
inconsistent with, or result in a breach of, this Agreement or challenge or
contest in any Proceeding, or in connection with any other enforcement,
collection, execution, levy or foreclosure proceeding or otherwise, (i) the
validity, perfection, extent, priority or enforceability of any Liens held by
Agent or any Senior Lender, or by Trustee or any Noteholder, as the case may be,
to secure the payment, performance or observance of all or any part of the
Senior Indebtedness or Note Indebtedness, respectively, (ii) the rights of Agent
and Senior Lenders, or Trustee and Noteholders, as the case may be, set forth in
any of the Senior Credit Documents or Note Documents, as applicable, with
respect to such Liens, or (iii) the validity or enforceability of any of the
Senior Credit Documents or Note Documents, as the case may be, or any term,
condition or provision of this Agreement; PROVIDED, that nothing in this SECTION
4(b) is intended or shall be deemed or construed to limit in any way the ability
of Agent or Trustee, as the case may be, to enforce all of the terms and
provisions of this Agreement.
(c) Subject to the limitations set forth in this Agreement, Trustee may
file proofs of claim and other pleadings and motions with respect to the Senior
Lender Collateral in such Proceeding. If a proper proof of claim has not been
filed in the form required in such Proceeding at least thirty (30) days prior to
the expiration of the time for filing thereof, the Agent shall have the right
(but not the duty) to file an appropriate claim for and on behalf of Trustee. In
furtherance of the foregoing, Trustee hereby appoints Agent as its
attorney-in-fact, with full authority in the place and stead of Trustee and full
power of substitution and in the name of Trustee or otherwise, to execute and
deliver any document or instrument which Trustee is required to deliver pursuant
to this SECTION 4(c), such appointment being coupled with an interest and
irrevocable.
(d) Trustee shall execute and deliver to Agent all such instruments and
other documentation confirming the above authorizations and all such proofs of
claim, assignments of claim and other instruments and documentation, and shall
take all such other action as may be reasonably requested by Agent to enforce
such claims and carry out the purpose of this SECTION 4.
SECTION 5. INSURANCE AND CONDEMNATION. Unless and until Agent and each
Senior Lender shall have received indefeasible payment in full in cash of all
Senior Indebtedness and the Senior Credit Documents and all Senior Commitments
thereunder shall have terminated pursuant to the respective terms and provisions
thereof, (i) Trustee agrees that Agent shall have the sole and exclusive right
to adjust settlement with respect to any insurance coverage for any Senior
Lender Collateral and (ii) all proceeds of any insurance policy, and proceeds of
any
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condemnation or similar proceeding, covering all or any part of the Senior
Lender Collateral shall be paid to Agent for application pursuant to the Senior
Credit Documents. If Senior Lenders allow any portion of any proceeds of any
insurance, condemnation or similar award with respect to any Senior Lender
Collateral to be used by any Credit Party to repair or replace the Senior Lender
Collateral affected, Trustee agrees to take promptly all action reasonably
requested by Agent to permit such use.
SECTION 6. WHEN PROCEEDS MUST BE PAID OVER.
(a) In the event any proceeds of Senior Lender Collateral are received
by Trustee or any Noteholder for application to the Note Indebtedness other than
as expressly permitted by the terms of this Agreement, such proceeds shall be
received by such Person in trust for the benefit of Agent and Senior Lenders and
such Person shall promptly turn over such proceeds to Agent (in the same form as
received, with any necessary non-recourse endorsement), for application (in the
case of cash) to, or as Senior Lender Collateral (in the case of non-cash
Property or securities) for, the payment or prepayment of the Senior
Indebtedness remaining unpaid to the extent necessary to pay such Senior
Indebtedness in full in accordance with its terms. In the event Trustee or any
Noteholder fails to provide any endorsement, as contemplated by the preceding
sentences, Agent, or any of its officers or employees, is hereby irrevocably
authorized to make the same (which authorization, being coupled with an
interest, is irrevocable).
(b) All proceeds of Senior Lender Collateral received in connection
with any Senior Enforcement Action shall be paid to Agent for application to the
payment of Senior Indebtedness pursuant to the Senior Credit Agreement and the
other Senior Credit Documents. Upon indefeasible payment in full in cash of all
Senior Indebtedness and termination of the Senior Credit Documents and all
Senior Commitments thereunder, any remaining proceeds of Senior Lender
Collateral shall be delivered to Trustee and applied to the Note Indebtedness,
except as otherwise required pursuant to applicable law.
SECTION 7. SUBROGATION. Trustee hereby waives all rights of subrogation
to the claims of Agent or any of the Senior Lenders against any Credit Party,
and waives all rights of recourse to any security for any Senior Indebtedness,
until such time as all Senior Indebtedness shall have been indefeasibly paid in
full in cash and the Senior Credit Documents and all Senior Commitments
thereunder shall have terminated pursuant to the respective terms and provisions
thereof; PROVIDED, that if any payment to Agent or any Senior Lender is
rescinded as a result of a Proceeding or otherwise, the subrogation of Trustee
as provided herein shall likewise be rescinded until all of the Senior
Indebtedness is indefeasibly paid in full in cash.
SECTION 8. NO IMPAIRMENT OF SUBORDINATION. No right of Agent or any
Senior Lender to enforce the subordination of the Liens on Senior Lender
Collateral securing all or any part of the Note Indebtedness shall be impaired
by any act or failure to act by any Credit Party or by its failure to comply
with this Agreement. Without limiting the generality of the foregoing, the
rights of Agent and Senior Lenders under this Agreement shall remain in full
force and effect without regard to, and shall not be impaired by: (a) any act or
failure to act of any Credit Party, Trustee or Noteholder, or any noncompliance
by any Credit Party, Trustee or Noteholder with any agreement or obligation,
regardless of any knowledge thereof which Agent or any Senior
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Lender may have or with which Agent or any Senior Lender may be charged, (b) the
validity or enforceability of any of the Senior Credit Documents, (c) any
extension or indulgence in respect of any payment or prepayment of the Senior
Indebtedness or any part thereof or in respect of any other amount payable to
Agent or any Senior Lender, (d) any amendment, modification or waiver of any of
the terms of the Senior Credit Documents or the Note Documents, (e) any
exercise, delayed exercise or non-exercise by Agent or any Senior Lender of any
right, power, privilege or remedy under or in respect of any Senior
Indebtedness, the Senior Lender Collateral or this Agreement, (f) any other
action of Agent or any Senior Lender permitted under the Senior Credit Documents
or this Agreement or (g) the absence of any notice to, or knowledge by, Trustee
or any Noteholder of the existence, creation or non-payment of all or any part
of the Senior Indebtedness, or the occurrence of any of the matters or events
set forth in the foregoing clauses (a) through (f), except as such notice shall
be specifically required pursuant to the terms hereof.
SECTION 9. WAIVERS AND CONSENTS OF TRUSTEE.
(a) All of the Senior Indebtedness shall be deemed to have been made or
incurred in reliance upon this Agreement and Trustee expressly waives (i) notice
of acceptance by Agent or any Senior Lender of this Agreement, (ii) notice of
the existence or creation or non-payment of all or any part of the Senior
Indebtedness, (iii) all diligence in collection or protection of or realization
upon all or any part of the Senior Indebtedness or any security therefor and any
requirement that Agent or any Senior Lender protect, secure, perfect or insure
any Lien or any Property subject thereto or exhaust any right or take any action
against any Credit Party or any other Person or any such Property, and (iv)
promptness, diligence, notice of acceptance and any other notice with respect to
any of the Senior Indebtedness.
(b) Trustee agrees and consents that Agent and Senior Lenders may each,
at any time and from time to time, in their sole discretion, without the consent
of or notice to Trustee (except to the extent such notice is specifically
required pursuant to the provisions of this Agreement) or any Noteholder,
without incurring responsibility to Trustee or any Noteholder, and without
impairing or releasing the subordination provided for herein or the obligations
of Trustee or any such Noteholder to Agent or any Senior Lender hereunder,
amend, restate, supplement or otherwise modify the Senior Credit Agreement or
any of the other Senior Credit Documents in any way whatsoever, including,
without limitation, the following: (i) shorten the final maturity of all or any
part of the Senior Indebtedness, (ii) modify the amortization of the principal
amount of all or any part of the Senior Indebtedness, (iii) increase the
principal amount of Senior Indebtedness, or otherwise provide for additional
advances, (iv) raise the standard or default per annum interest rates applicable
to all or any part of the Senior Indebtedness, (v) impose any additional fees or
penalties upon any Credit Party or increase the amount of or rate for any fees
or penalties provided for in the Senior Credit Documents, (vi) retain or obtain
a Lien on any Property to secure any of the Senior Indebtedness, (vii) enter
into new Senior Credit Documents with any Credit Party or any of its direct or
indirect subsidiaries, (viii) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, all or any of the Senior
Indebtedness or otherwise amend, restate, supplement or otherwise modify in any
manner, or grant any waiver or release with respect to, all or any part of the
Senior Indebtedness or any of the Senior Credit Documents, (x) retain or obtain
the primary or secondary obligation of any
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other Person with respect to any of the Senior Indebtedness, (xi) release any
Person liable in any manner under or in respect of Senior Indebtedness or
release or compromise any obligation of any nature of any Person with respect to
any of the Senior Indebtedness, (xii) sell, exchange, not perfect or otherwise
deal with any Property at any time pledged, assigned or mortgaged to secure or
otherwise securing, all or any part of the Senior Indebtedness, (xiii) release
its security interest in, or surrender, release or permit any substitution or
exchange for, all or any part of any Property securing any Senior Indebtedness,
or release, compromise, alter or exchange any obligations of any nature of any
Person with respect to any such Property, (xiv) amend, or grant any waiver or
release with respect to, or consent to any departure from, any guaranty for all
or any of the Senior Indebtedness, (xv) exercise or refrain from exercising any
rights against and release from obligations of any type, any Credit Party or any
other Person, (xvi) apply any sums from time to time received to the Senior
Indebtedness in such manner such as such Person shall determine and (xvii)
otherwise manage and supervise the Senior Indebtedness in accordance with such
Person's usual practices, modified from time to time as such Person deems
appropriate under the circumstances.
(c) In the event Agent releases or agrees to release any of its Liens
on all or any part of the Senior Lender Collateral in connection with the sale
or other disposition thereof at the request of any Credit Party or pursuant to
any Senior Enforcement Action or otherwise, Agent agrees to notify Trustee in
writing thereof with such notice stating the portion of the Senior Lender
Collateral to be sold or disposed of and further stating that such Senior Lender
Collateral will be sold free and clear of the Liens of Agent and Trustee
("RELEASE NOTICE"). Trustee acknowledges, confirms and agrees that upon Agent
giving such a Release Notice to Trustee in accordance with SECTION 15 below,
Trustee shall be deemed to consent to such sale or other disposition under the
Note Documents and the Lien of Trustee on such Senior Lender Collateral shall be
deemed to be, and shall be, automatically released and terminated
contemporaneously with the release by Agent of its Lien thereon. Trustee agrees
that no further act or documentation shall be necessary to evidence the release
and termination by Trustee of such Lien and the delivery of the Release Notice
to Trustee and the release by Agent of its Lien on the Senior Lender Collateral
shall be PRIMA FACIE evidence of Trustee's release and termination of its Lien
upon such Senior Lender Collateral. In the event that Agent requests Trustee to
execute and deliver any formal release or termination of its Lien upon such
Senior Lender Collateral, Trustee agrees to execute the same forthwith. In
furtherance of the foregoing, Trustee hereby appoints Agent as its
attorney-in-fact, with full authority in the place and stead of Trustee and full
power of substitution and in the name of Trustee or otherwise, to execute and
deliver any document or instrument which Trustee is required to deliver pursuant
to this SECTION 9(c), such appointment being coupled with an interest and
irrevocable.
(d) Each of Trustee and Agent hereby agrees to use its best efforts to
give written notice to the other of any declaration of acceleration, event of
default declared in writing by it or, in the case of Agent, commencement of any
Senior Enforcement Action under the Note Documents or the Senior Credit
Documents, respectively; PROVIDED, that failure to give any such notice shall
not result in liability to Trustee or Agent, as the case may be, or modify in
any way the terms and provisions of this Agreement and the obligations of the
respective parties hereunder. No party hereto shall have any obligation to cure
any such default and any payment made or act done by any such party to cure any
such default shall not constitute an assumption of the Note Documents or the
Senior Credit Documents or of any of the respective obligations thereunder.
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(e) Notwithstanding anything to the contrary contained herein, in the
event that Agent releases its Liens on the Senior Collateral as a result of the
prior or concurrent indefeasible payment in full in cash of the Senior
Indebtedness and termination of the Senior Credit Documents and all Senior
Commitments thereunder, Trustee shall not be obligated to release its Liens (nor
be deemed to release its Liens as contemplated in SECTION 9(c) on any Senior
Lender Collateral remaining after giving effect to such payment and termination
(and any sale, transfer or other disposition of Senior Lender Collateral
occurring in connection therewith), if, at the time of such release, there shall
have occurred and be continuing any default under the Note Documents.
SECTION 10. MARSHALING. Trustee hereby waives, to the fullest extent
permitted by applicable law, any rights it may have under applicable law to
assert the doctrine of marshaling or otherwise to require Agent or any Senior
Lender to xxxxxxxx any Property of any Credit Party for the benefit of Trustee
or any Noteholder.
SECTION 11. WAIVER OF RIGHTS. Trustee hereby waives, to the fullest
extent permitted by applicable law, any rights it may have to enjoin or
otherwise obtain a judicial or administrative order preventing Agent or any
Senior Lender from taking, or refraining from taking, any action with respect to
all or any part of the Senior Lender Collateral.
SECTION 12. CONTINUATION OF SUBORDINATION; TERMINATION OF AGREEMENT.
This Agreement shall in all respects be a continuing agreement and shall remain
in full force and effect until Senior Lenders shall have received indefeasible
payment in full in cash of all Senior Indebtedness and all of the Senior Credit
Documents and the Senior Commitments thereunder shall have terminated pursuant
to the respective terms and provisions thereof; PROVIDED, that this Agreement
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment of any Senior Indebtedness is rescinded, avoided or must
otherwise be returned by Agent or any Senior Lender upon the insolvency,
bankruptcy or reorganization of any Credit Party, all as though such payment had
not been made.
SECTION 13. SPECIFIC PERFORMANCE. Agent and each Senior Lender, on the
one hand, and Trustee and each Noteholder, on the other hand, are hereby
authorized to demand specific performance of the provisions of this Agreement,
at any time when Trustee or any Noteholder, on the one hand, or the Agent or any
Senior Lender, on the other hand, shall have failed to comply with any term or
provision hereof. Each of Agent (on its behalf and on behalf of the Senior
Lenders), and Trustee (on its behalf and on behalf of the Noteholders) hereby
irrevocably waives any defense based on the adequacy of a remedy at law that
might be asserted as a bar to such remedy of specific performance.
SECTION 14. FURTHER ASSURANCES. Each party hereto will, upon the
written request of the other party, from time to time execute and deliver or
cause to be executed and delivered such further instruments and agreements and
do or cause to be done such further acts as may be reasonably necessary or
proper to carry out more effectively the provisions of this
11
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Agreement and to effectuate the terms of the Lien subordination and other
provisions contemplated hereby. Without limiting the generality of the foregoing
provisions of this SECTION 15, (a) upon the written request of Trustee, Agent
shall provide Trustee with copies of all material Senior Credit Documents and
(b) upon the written request of Agent, Trustee shall provide Agent with copies
of all material Note Documents, in each case in effect at the time of such
request.
SECTION 15. NOTICES. Unless otherwise specifically provided herein, all
notices shall be in writing addressed to the respective parties as set forth
below and may be personally served, facsimilied or sent by overnight courier
service or United States mail and shall be deemed to have been given: (a) if
delivered in person, when delivered; (b) if delivered by facsimile transmission,
on the date of such transmission if transmitted on a business day before 4:00
p.m. (Chicago time) or, if not, on the next succeeding business day; (c) if
delivered by overnight courier, two days after delivery to such courier
correctly addressed; or (d) if by United States Mail, four business days after
deposit in the United States mail, with postage prepaid and properly addressed:
If to Agent: BANKERS TRUST COMPANY
000 Xxxxx Xxxxxx Xxxxx
84th Floor - Sears Tower
Xxxxxxx, Xxxxxxxx 00000
Attention: Credit Department
FAX: 312/000-0000
with a copy to: XXXXXX XXXXXX XXXXX
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Burn, Esq.
FAX: 312/000-0000
If to Trustee: BNY MIDWEST TRUST COMPANY
0 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Indenture Trust Administration
FAX: 312/000-0000
or to such other address as the party addressed shall have previously designated
by written notice to the serving party given in accordance with this SECTION 16.
SECTION 16. SUBMISSION TO JURISDICTION; SERVICE OF PROCESS. AGENT AND
EACH SENIOR LENDER MAY ENFORCE ANY CLAIM ARISING OUT OF THIS AGREEMENT IN ANY
STATE OR FEDERAL COURT HAVING SUBJECT MATTER JURISDICTION AND LOCATED IN THE
CITY OF CHICAGO, ILLINOIS. FOR THE PURPOSE OF ANY ACTION OR PROCEEDING
12
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INSTITUTED WITH RESPECT TO ANY SUCH CLAIM, TRUSTEE HEREBY IRREVOCABLY SUBMITS TO
THE JURISDICTION OF SUCH COURTS. TRUSTEE HEREBY IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OUT OF SUCH COURTS BY MAILING A COPY THEREOF, BY REGISTERED
MAIL, POSTAGE PREPAID, TO SUCH PERSON AT THE ADDRESS SET FORTH IN SECTION 15
HEREOF AND AGREES THAT SUCH SERVICE, TO THE FULLEST EXTENT PERMITTED BY LAW, (i)
SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON SUCH PERSON
IN ANY SUCH SUIT, ACTION OR PROCEEDING AND (ii) SHALL BE TAKEN AND HELD TO BE
VALID PERSONAL SERVICE UPON AND PERSONAL DELIVERY TO SUCH PERSON. NOTHING
CONTAINED HEREIN SHALL AFFECT THE RIGHTS OF AGENT OR ANY SENIOR LENDER TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR PRECLUDE AGENT OR ANY SENIOR
LENDER FROM BRINGING AN ACTION OR PROCEEDING IN RESPECT HEREOF IN ANY OTHER
COUNTRY, STATE OR PLACE HAVING JURISDICTION OVER SUCH ACTION. TRUSTEE HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
SUCH PERSON NOW OR HEREAFTER MAY HAVE TO THE LAYING OF THE VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH
SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 17. JURY TRIAL. EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES HEREUNDER OR UNDER ANY AGREEMENT, DOCUMENT OR INSTRUMENT
DELIVERED OR WHICH MAY HEREAFTER BE DELIVERED IN CONNECTION HEREWITH, OR ARISING
FROM ANY RELATIONSHIP ARISING HEREUNDER, AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
SECTION 18. SUCCESSORS AND ASSIGNS. (a) This Agreement shall be binding
upon and inure to the benefit of Agent, each Senior Lender, Trustee, each
Noteholder and each of their respective successors, transferees and assigns.
(b) Each Senior Lender may, from time to time, without notice to or
consent of Trustee or any Noteholder, assign or transfer to any Person any or
all of the Senior Indebtedness or any interest therein, and notwithstanding any
such assignment or transfer, or any subsequent assignment or transfer thereof,
the Senior Indebtedness shall be and remain Senior Indebtedness for purposes of
this Agreement, and every immediate and successive assignee or transferee of any
of the Senior Indebtedness or of any interest therein shall, to the extent of
the interest of such assignee or transferee in the Senior Indebtedness, be
entitled to rely upon and be a third party beneficiary of the subordination
provided under this Agreement.
(c) As used in this Agreement, the term "Credit Party" shall include
any receiver, trustee, custodian or debtor in possession which is a successor to
any Credit Party.
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SECTION 19. GOVERNING LAW. This Agreement shall be construed and
interpreted, and the rights of the parties shall be determined, in accordance
with the internal laws and decisions of the State of Illinois, without regard to
conflicts of laws principles.
SECTION 20. ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS. This Agreement
constitutes the entire agreement between the parties hereto pertaining to the
subject matter hereof. There are no other agreements between the parties hereto
in connection with the subject matter hereof except as specifically set forth
herein or contemplated hereby. No amendment, modification or waiver of any of
the provisions of this Agreement shall be binding unless executed in writing by
Agent and Trustee. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided. No delay on the part of Agent or any Senior Lender
in the exercise of any right or remedy shall operate as a waiver thereof, and no
single or partial exercise by Agent or any Senior Lender of any right or remedy
shall preclude other or further exercise thereof or the exercise of any other
right or remedy. For the purposes of this Agreement, Senior Indebtedness shall
include all Senior Indebtedness, notwithstanding any right or power of any
Credit Party or other Person to assert any claim or defense as to the invalidity
or unenforceability of all or any part of the Senior Indebtedness, and no such
claim or defense shall affect or impair the agreements and obligations of the
respective parties hereto.
SECTION 21. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 22. INVALIDITY. In the event one or more of the provisions
contained in this Agreement shall, for any reason, be held to be invalid or
unenforceable in any respect, such invalidity or unenforceability shall not
affect any other provision of this Agreement.
SECTION 23. HEADINGS. The headings of the several sections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
SECTION 24. CONTRACTUAL REPRESENTATIVE FOR PERFECTION; ACTIONS WITH
RESPECT TO COLLATERAL. Trustee hereby appoints Agent as Trustee's contractual
representative solely for purposes of perfecting Trustee's Liens on Note
Collateral which is of a type such that perfection of a Lien thereon may be
accomplished only by possession thereof by Trustee. In the event (I) there shall
have occurred and shall be continuing any default under the Note Documents and
(II) all Senior Indebtedness shall have been indefeasibly paid in full in cash
and the Senior Credit Documents and all Senior Commitments thereunder shall have
been terminated pursuant to the respective terms and provisions thereof, Agent
shall deliver to Trustee all Senior Lender Collateral remaining in Agent's
possession.
[Remainder of Page Intentionally Left Blank; Signature Page Follows]
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IN WITNESS WHEREOF, this Agreement has been made and delivered as of
June 29, 2001.
BANKERS TRUST COMPANY,
as Agent
By: /s/ Xxx X. Xxxxxxx
--------------------------------
Name: Xxx X. Xxxxxxx
-----------------------------
Title: Director
-----------------------------
BNY MIDWEST TRUST COMPANY,
as Trustee
By: /s/ X.X. Xxxxxxx
--------------------------------
Name: X.X. Xxxxxxx
------------------------------
Title: Assistant Vice President
-----------------------------
16
SCHEDULE 1
TO
INTERCREDITOR AGREEMENT
DATED AS OF JUNE 29, 2000
ADDITIONAL CREDIT PARTIES
1. CALIFORNIA METALS RECYCLING, INC.
2. CIM TRUCKING, INC.
3. FIRMA, INC.
4. FIRMA PLASTIC CO., INC.
5. MAC LEOD METALS CO.
6. MTLM ARIZONA, INC.
7. METAL MANAGEMENT AEROSPACE, INC.
8. METAL MANAGEMENT ALABAMA, INC.
9. METAL MANAGEMENT ARIZONA, L.L.C.
10. METAL MANAGEMENT CONNECTICUT, INC.
11. METAL MANAGEMENT INDIANA, INC.
12. METAL MANAGEMENT GULF COAST, INC.
13. METAL MANAGEMENT MEMPHIS, L.L.C.
14. METAL MANAGEMENT MIDWEST, INC.
15. METAL MANAGEMENT MISSISSIPPI, L.L.C.
16. METAL MANAGEMENT NORTHEAST, INC.
17. METAL MANAGEMENT OHIO, INC.
18. METAL MANAGEMENT PITTSBURGH, INC.
19. METAL MANAGEMENT REALTY, INC.
20. METAL MANAGEMENT SERVICES, INC.
21. METAL MANAGEMENT STAINLESS & ALLOY, INC.
22. METAL MANAGEMENT WEST, INC.
23. METAL MANAGEMENT WEST COAST HOLDINGS, INC.
24. METAL MANAGEMENT S&A HOLDINGS, INC.
25. XXXXXX.XXX, INC.
26. PROLER SOUTHWEST INC.
27. TROJAN TRADING CO.
28. RESERVE IRON & METAL LIMITED PARTNERSHIP
17
ACKNOWLEDGMENT AND CONSENT
Each of the undersigned hereby (a) acknowledges receipt of a copy of
the foregoing Intercreditor Agreement (the "INTERCREDITOR AGREEMENT"), (b)
acknowledges and consents to all of the terms and provisions thereof, and (c)
agrees that, at any time prior to indefeasible payment in full in cash of all
Senior Indebtedness and termination of the Senior Credit Documents and all
Senior Commitments thereunder pursuant to the respective terms and provisions
thereof, (i) it shall not take any action which could reasonably be expected to
cause any Property to become Note Collateral, without first providing for Agent,
for the benefit of itself and each Senior Lender, to be granted a first, senior
and continuing Lien on such Property and (ii) it shall not cause any Property
(other than (1) any proceeds or products of Property which as of the date of the
Intercreditor Agreement does not constitute Note Collateral and (2) real
property, except to the extent required pursuant to the Note Document) to become
Senior Lender Collateral without also providing for the Trustee to be granted a
Lien thereon subordinate to Agent's Lien pursuant to the Intercreditor
Agreement.
Each of the undersigned hereby agrees that (a) if the Majority Lenders
(as such term is defined in the Senior Credit Agreement) so elect, any breach of
the provisions of the Intercreditor Agreement by any Person (other than Agent or
any Senior Lender) shall constitute an Event of Default (as such term is defined
in the Senior Credit Agreement) and (b) if Noteholders holding a majority in
principal amount of the then outstanding Notes so elect, any breach of the
provisions of the Intercreditor Agreement by any Person (other than Trustee or
any Noteholder) shall constitute an Event of Default (as such term is defined in
the Note Indenture).
METAL MANAGEMENT, INC., a Delaware
corporation, in its individual capacity as a
Credit Party and in its capacity as Funds
Administrator
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxxx
-----------------------------------
Title: Executive Vice President
----------------------------------
BORROWERS:
CALIFORNIA METALS RECYCLING, INC.
CIM TRUCKING, INC.
FIRMA, INC.
FIRMA PLASTIC CO., INC.
MAC LEOD METALS CO.
MTLM ARIZONA, INC.
METAL MANAGEMENT AEROSPACE, INC.
METAL MANAGEMENT ALABAMA, INC.
18
METAL MANAGEMENT ARIZONA, L.L.C.
METAL MANAGEMENT CONNECTICUT, INC.
METAL MANAGEMENT INDIANA, INC.
METAL MANAGEMENT GULF COAST, INC.
METAL MANAGEMENT MEMPHIS, L.L.C.
METAL MANAGEMENT MIDWEST, INC.
METAL MANAGEMENT MISSISSIPPI, L.L.C.
METAL MANAGEMENT NORTHEAST, INC.
METAL MANAGEMENT OHIO, INC.
METAL MANAGEMENT PITTSBURGH, INC.
METAL MANAGEMENT REALTY, INC.
METAL MANAGEMENT SERVICES, INC.
METAL MANAGEMENT STAINLESS & ALLOY,
INC.
METAL MANAGEMENT WEST, INC.
METAL MANAGEMENT WEST COAST HOLDINGS,
INC.
METAL MANAGEMENT S&A HOLDINGS, INC.
XXXXXX.XXX, INC.
PROLER SOUTHWEST INC.
TROJAN TRADING CO.
By: /s/ Xxxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxxxx
-------------------------------
Title: Vice President
-------------------------------
19
RESERVE IRON & METAL LIMITED
PARTNERSHIP
By: METAL MANAGEMENT OHIO, INC.,
its general partner
By: /s/ Xxxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxxxx
--------------------------------
Title: Vice President
-------------------------------
Dated as of June 29, 2001
