Exhibit 10.5
Execution
Copy
AMENDED AND RESTATED
INTERCREDITOR AGREEMENT
AMENDED AND RESTATED INTERCREDITOR
AGREEMENT (as amended, modified or supplemented from time to time,
this “ Agreement ”), dated as of December 22,
2003, as amended and restated on the Restatement Effective Date (as
defined below), among General Electric Capital Corporation, as
Collateral Agent (as defined below) for the benefit of the First
Lien Creditors (as defined below), in such capacity as successor to
Morgan Stanley & Co., Incorporated (the “ Original
Collateral Agent ”) and as Agent (as defined in below)
for the benefit of the Bank Lender Creditors (as defined below), in
such capacity as successor agent to Morgan Stanley Senior Funding,
Inc. (the “ Original Agent ”), and The Bank of
New York, as trustee (together with any successor trustee, the
“ Additional Senior Secured Notes Trustee ”) for
its benefit and the benefit of the holders from time to time of the
Additional Senior Secured Notes (as defined below), and
acknowledged and agreed to by the US Credit Parties (as defined in,
or incorporated by reference into, the US Security Agreement
referred to below) from time to time party hereto. Capitalized
terms used herein shall have the meaning specified in Section 9
hereof or, if not defined therein, as specified in (or incorporated
by reference into) the US Security Agreement (as defined in the
Bank Credit Agreement referred to below).
W I T N E S S E T H
:
WHEREAS, Resolution Performance
Products Inc. (“ Holdings ”), Resolution
Performance Products LLC (“ RPP USA ”), RPP
Capital Corporation (“ US Finance Corp. ” and,
together with RPP USA, the “ Original US Borrowers
” and each, an “ Original US Borrower ”),
Resolution Europe B.V. (formerly known as Resolution Nederland
B.V.) (the “ Original Dutch Borrower ”), the
lenders from time to time party thereto (the “ Original
Lenders ”), Salomon Smith Barney Inc., as Syndication
Agent, JPMorgan Chase Bank (formerly known as Morgan Guaranty Trust
Company of New York), as Documentation Agent, and Morgan Stanley
Senior Funding, Inc., as Lead Arranger, sole Book Manager and
Original Agent, have entered into a Credit Agreement, dated as of
November 14, 2000 (as amended, modified or supplemented through,
but not including, the date hereof, the “ Original Bank
Credit Agreement ”) providing for the making of Loans (as
defined in the Original Bank Credit Agreement) to the Original US
Borrowers and the Dutch Borrower and the issuance of, and
participation in, Letters of Credit (as defined in the Original
Bank Credit Agreement) for the account of the Original US Borrowers
as contemplated therein (the Original Lenders, the Original Agent,
each Letter of Credit Issuer (as defined in the Original Bank
Credit Agreement) thereunder, and the Original Collateral Agent are
herein called the “ Original Bank Lender Creditors
”).
WHEREAS, RPP USA and certain other
entities from time to time designated as US borrowers thereunder
(the “ US Borrowers ”), the Original Dutch
Borrower and certain other entities from time to time designated as
Netherlands Borrowers thereunder, Holdings, US Finance Corp.,
the other Credit Parties from time to time party thereto, the
financial institutions
from time to time party thereto (the “
Lenders ”), General Electric Capital Corporation, as
US L/C Issuer, as Collateral Agent, as a US Lender, and as US Agent
(in such capacity, together with any successor agent, the “
US Agent ”), and GE Leveraged Loans Limited, as
Netherlands L/C Issuer, as Netherlands Security Trustee, as a
Netherlands Lender, and as Netherlands Agent (in such capacity,
together with any successor agent, the “ Netherlands
Agent ”) have entered into a Credit Agreement, dated as
of January 24, 2005 (as amended, modified, extended, renewed,
replaced, restated, supplemented or refinanced from time to time,
and including any agreement extending the maturity of, or
refinancing or restructuring (including, but not limited to, the
inclusion of additional borrowers or guarantors thereunder or any
increase in the amount borrowed thereunder) all or any portion of
the indebtedness under such agreement or any successor agreement,
whether or not with the same agent, trustee, representative,
lenders, holders or group of lenders or holders, the “
Bank Credit Agreement ”), providing for the
refinancing in full of the Original Bank Credit Agreement and the
making of Loans to the US Borrowers and the issuance of, and
participation in, Letters of Credit for the account of the US
Borrowers as contemplated therein (the Lenders, the US Agent, the
Netherlands Agent, the US L/C Issuer, the Netherlands L/C Issuer,
the Netherlands Security Trustee and the Collateral Agent are
herein called the “ Bank Lender Creditors
”);
WHEREAS, the Original
Collateral Agent and the Additional Senior Notes Trustee are
parties to an Intercreditor Agreement, dated December 22, 2003, as
heretofore amended, as acknowledged and agreed to by the Original
US Borrowers and certain of their affiliates (the “
Original Intercreditor Agreement ”);
WHEREAS, pursuant to a notice of
resignation, dated January 24, 2005 (the “ Resignation
”), the Original Collateral Agent has given notice of its
resignation as Collateral Agent pursuant to Section 8(b) of Annex N
to the US Security Agreement, such resignation to be effective as
of the Restatement Effective Date;
WHEREAS, pursuant to Annex N of the
US Security Agreement, the Required Secured Creditors have
appointed General Electric Capital Corporation as Collateral Agent,
effective as of the Restatement Effective Date;
WHEREAS, each US Borrower or another
Assignor has entered into, or may at any time and from time to time
after the date hereof enter into or guaranty the obligations of one
or more other Assignors or Subsidiaries thereof under, one or more
Hedge Agreements with one or more Bank Lender Creditors or any
affiliate thereof (each such Bank Lender Creditor or affiliate,
even if the respective Bank Lender Creditor subsequently ceases to
be a Lender under the Bank Credit Agreement for any reason,
together with such Bank Lender Creditor’s or
affiliate’s successors and assigns, if any, collectively, the
“ Other Creditors ” and together with the Bank
Lender Creditors, the “ Senior First Lien Creditors
”);
WHEREAS, the Original US Borrowers
and the Additional Senior Secured Notes Trustee have entered into
an Indenture, dated as of December 22, 2003 (as amended,
modified, extended, renewed, replaced, restated, supplemented or
refinanced from time to time, and including any agreement extending
the maturity of, or refinancing or restructuring (including, but
not limited to, the inclusion of additional borrowers, issuers or
guarantors thereunder or any increase in the amount borrowed
thereunder) all or any portion of the indebtedness under
such
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Indenture or any successor agreement whether or
not with the same trustee, representative, agent, lenders, holders
or group of lenders or holders, the “ Note Credit
Agreement ” and, together with the Bank Credit Agreement,
collectively, the “ Credit Agreement ”),
providing for (i) the issuance by the Original US Borrowers of
their 8% Senior Secured Notes due December 15, 2009 (the
“ Additional Senior Secured Notes ”) to the
holders thereof from time to time (such holders, the “
Additional Senior Secured Noteholders ” and, together
with the Additional Senior Secured Notes Trustee, the “
Junior First Lien Creditors ”; and the Junior First
Lien Creditors, together with the Senior First Lien Creditors, the
“ First Lien Creditors ”) and (ii) the guaranty
by any future US Credit Party that is a Subsidiary Guarantor of the
Original US Borrowers’ obligations under the Note Credit
Agreement and the Additional Senior Secured Notes (each such
guaranty, together with the Note Credit Agreement and the
Additional Senior Secured Notes, are herein called the “
Note Credit Documents ”);
WHEREAS, pursuant to the US Guaranty
entered into pursuant to the Bank Credit Agreement, each US Credit
Party that is a party thereto has guaranteed to the Bank Lender
Creditors and the Other Creditors the payment and performance when
due of all Guaranteed Obligations as described in each such
Guaranty;
WHEREAS, pursuant to the US Security
Agreement, the US Pledge Agreement (as such term is defined in the
Bank Credit Agreement) and the Netherlands Pledge Agreement (as
such term is defined in the Bank Credit Agreement), each US Credit
Party thereto has granted to the Collateral Agent a security
interest in the Collateral for the benefit of the First Lien
Creditors and the Second Lien Creditors (although the Note Lender
Creditors do not have a security interest in the Additional Senior
Secured Notes Excluded Collateral and the Second Lien Creditors do
not have a security interest in the Second Lien Excluded
Collateral);
WHEREAS, pursuant to the Bank Credit
Agreement, the Required Secured Creditors have authorized the US
Agent and the Collateral Agent to enter into this
Agreement;
WHEREAS, pursuant to the Note Credit
Agreement, the Additional Senior Secured Notes Trustee has agreed
to enter into (and to be bound by), and the Additional Senior
Secured Noteholders have authorized the Additional Senior Secured
Notes Trustee to enter into (on their behalf) (and to be bound by),
the Original Intercreditor Agreement, in each case on the terms and
conditions provided for herein;
WHEREAS, the Required First Lien
Creditors wish to amend and restate the Original Intercreditor
Agreement effective on the Restatement Effective Date as set forth
below, to, inter alia set forth the rights, benefits and
privileges, as among the First Lien Creditors, in respect of the
Collateral, this Agreement, the US Security Agreement, the US
Pledge Agreement and the Netherlands Pledge Agreement;
and
WHEREAS, as of the Restatement
Effective Date, General Electric Capital Corporation shall
constitute the Required First Lien Creditors.
NOW, THEREFORE, it is agreed that
the Original Intercreditor Agreement is hereby amended and restated
as follows:
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1.
Appointment;
etc.
(a)
The Junior First
Lien Creditors, by their acceptance of the benefits of the US
Security Agreement, the US Pledge Agreement [and the Netherlands
Pledge Agreement] hereby (x) irrevocably designate General Electric
Capital Corporation as Collateral Agent (and any successor
Collateral Agent) to act as specified herein and in the applicable
US Security Documents, (y) agree to all of the provisions of this
Agreement and (z) agree to all of the provisions of the applicable
US Security Documents (including, without limitation, to all of the
provisions of Annex N to the US Security Agreement). Each
Junior First Lien Creditor hereby irrevocably authorizes, and each
holder of any Junior First Lien Obligation by the acceptance of
such Junior First Lien Obligation and by the acceptance of the
benefits of the applicable US Security Documents shall be deemed
irrevocably to authorize, the Collateral Agent to take such action
on its behalf under the provisions of this Agreement and the
applicable US Security Documents and any instruments and agreements
referred to herein and therein and to exercise such powers and to
perform such duties thereunder as are specifically delegated to or
required of the Collateral Agent by the terms hereof or thereof and
such other powers as are reasonably incidental thereto. The
Collateral Agent may perform any of its duties hereunder or
thereunder by or through its affiliates, agents, sub-agents or
employees and such affiliates, agents, sub-agents and employees
shall be afforded all of the Collateral Agent’s rights
hereunder and under any US Security Document.
(b)
Each Senior First
Lien Creditor (by their acceptance of the benefits of the
applicable Security Documents) also agrees to the provisions of
this Agreement.
2.
Priorities
with Respect to the Collateral . The Junior First
Lien Creditors hereby acknowledge and agree that all Obligations
shall be secured pursuant to the Security Documents in accordance
with the terms thereof, provided that, notwithstanding
anything to the contrary contained in any Secured Debt Agreement
(including any Security Document), as between the Senior First Lien
Creditors and the Junior First Lien Creditors, the following
priorities and other rights, benefits and privileges with respect
to the Collateral and the applicable Security Documents shall
apply:
(i)
the security
interests granted pursuant to the applicable Security Documents (x)
for the benefit of the Senior First Lien Creditors shall be senior
in priority in all respects to the security interests granted
pursuant thereto for the benefit of the Junior First Lien Creditors
and (y) for the benefit of the Junior First Lien Creditors shall be
junior, subordinate and subject in all respects to the security
interests granted under the applicable Security Documents for the
benefit of the Senior First Lien Creditors;
(ii)
the Junior First
Lien Creditors agree that (x) all of their rights, benefits and
privileges afforded to them hereunder and under the applicable
Security Documents are expressly subject to the terms and
conditions of this Agreement and (y) they shall not be entitled to
receive any of the proceeds or other distributions in respect of
(or from) any Collateral until all Senior First Lien Obligations
have been paid in full in cash in accordance with the terms thereof
(including, without limitation, all interest that accrues after the
commencement of any case, proceeding or other action relating to
the bankruptcy, insolvency, reorganization or similar proceeding of
any US Credit Party at the rate provided for in the respective
documentation for the Senior First Lien
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Obligations,
whether or not a claim for post-petition interest is allowed in any
such case, proceeding or other action or under applicable
law);
(iii)
until all Senior
First Lien Obligations have been paid in full in cash in accordance
with the terms thereof, all Letters of Credit under the Bank Credit
Agreement have been terminated, the Commitments under the Bank
Credit Agreement have been terminated and all Hedge Agreements
entered into with Other Creditors have been terminated, each Junior
First Lien Creditor hereby agrees (A) to the extent that any
amendment, modification, change, waiver, consent, release or
variance to any of the Security Documents, or any action (or
inaction) to be taken (or not taken) by the Collateral Agent under
(or pursuant to, including pursuant to any of the remedial
provisions of) any of the Security Documents, in either case would
require the vote or consent of any of the Junior First Lien
Creditors, whether acting as part of the Required Secured
Creditors, as part of the Requisite Lender Creditors, as part of
the class of Lender Creditors or otherwise, each such Junior First
Lien Creditor hereby agrees that any such amendment, modification,
change, waiver, consent, release, variance, action or inaction may
be taken (or not taken, as the case may be) at the direction of the
Required First Lien Creditors, provided that, except as
permitted by Section 14(b) hereof, in the case of any
amendment, modification, change, waiver, consent, release or
variance to any Security Document materially adversely affecting
the rights and benefits of the Junior First Lien Creditors (and not
all First Lien Creditors in a like or similar manner), such
amendment, modification, change, waiver, release or variance shall
be made at the direction of the Required First Lien Creditors and
the Additional Senior Secured Notes Trustee (acting at the
direction of the Additional Senior Secured Noteholders holding at
least a majority of the then outstanding principal amount of all
Additional Senior Secured Notes), and (B) to effectuate the
foregoing, except in cases described in the proviso to preceding
clause (A), each Junior First Lien Creditor hereby (x) authorizes
and instructs the Additional Senior Secured Notes Trustee to (and
the Additional Senior Secured Notes Trustee agrees to) vote (on
behalf of the Junior First Lien Creditors) in a manner consistent
with, and to sign any such amendment, modification, change, waiver,
consent, release or variance, or any direction for any such action
or inaction, in either case which has otherwise been approved by,
the Required First Lien Creditors and (y) constitutes and appoints
the Collateral Agent its true and lawful attorney, irrevocably
(which power is coupled with an interest), to sign on behalf of the
Additional Senior Secured Notes Trustee any such amendment,
modification, change, waiver, consent, release or variance, or any
such action or inaction, to the extent that the Additional Senior
Secured Notes Trustee refuses to sign same as provided above;
and
(iv)
the Junior First
Lien Creditors do not have a security interest in, and the grant of
security interests pursuant to the applicable US Security Documents
for the benefit of the Junior First Lien Creditors shall not extend
to, any Additional Senior Secured Notes Excluded Collateral, and
with respect to the Junior First Lien Creditors, the term
“Collateral” shall not include the Additional Senior
Secured Notes Excluded Collateral.
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3.
Application of
Proceeds .
(a)
Except to the
extent otherwise provided in Section 9.4(e) of the US Security
Agreement, all moneys collected or otherwise received by the
Collateral Agent pursuant to the applicable US Security Documents
for application to the First Lien Obligations (including, for the
avoidance of doubt, upon any (i) distribution of any Collateral in
the event of any bankruptcy, arrangement, receivership, assignment
for the benefit of creditors or any other action or proceeding
involving the readjustment of the obligations and indebtedness of
any US Credit Party or the application of any Collateral to the
payment thereof, (ii) distribution of the Collateral upon the
liquidation or dissolution of any US Credit Party, or the winding
up of the assets or business of any US Credit Party, (iii)
realization by the Collateral Agent or any of the other Secured
Creditors with respect to the Liens pursuant to any Secured Debt
Agreement, whether pursuant to a Remedial Action or otherwise or
(iv) Disposition of any Collateral (to the extent that any part of
the proceeds of such Disposition are required to be applied to any
of the Obligations or held by the Collateral Agent in accordance
with the provisions of any of the Security Documents), shall, as
between the Senior First Lien Creditors and the Junior First Lien
Creditors, be distributed or paid to (or retained by) the
Collateral Agent for application in the following
manner:
(i)
first, an amount
equal to the outstanding Senior First Lien Primary Obligations
shall be paid to the Senior First Lien Creditors as provided in
Section 3(e) hereof, with each Senior First Lien Creditor
receiving an amount equal to its outstanding Senior First Lien
Primary Obligations or, if the proceeds are insufficient to pay in
full all such Senior First Lien Primary Obligations, its Senior
First Lien Creditor Pro Rata Share of the amount remaining to be
distributed;
(ii)
second, to the
extent proceeds remain after the application pursuant to the
preceding clause (i), an amount equal to the outstanding Senior
First Lien Secondary Obligations shall be paid to the Senior First
Lien Creditors as provided in Section 3(e) hereof, with each
Senior First Lien Creditor receiving an amount equal to its
outstanding Senior First Lien Secondary Obligations or, if the
proceeds are insufficient to pay in full all such Senior First Lien
Secondary Obligations, its Senior First Lien Creditor Pro Rata
Share of the amount remaining to be distributed;
(iii)
third, to the
extent proceeds remain after the application pursuant to the
preceding clauses (i) and (ii), to the payment of all amounts owing
the Additional Senior Secured Notes Trustee in its capacity as such
pursuant to the Note Credit Agreement; and
(iv)
fourth, to the
extent proceeds remain after the application pursuant to the
preceding clauses (i) through (iii), inclusive, an amount equal to
the outstanding Junior First Lien Obligations shall be paid to the
Junior First Lien Creditors as provided in Section 3(e) hereof,
with each Junior First Lien Creditor receiving an amount equal to
its outstanding Junior First Lien Obligations or, if the proceeds
are insufficient to pay in full all such Junior First Lien
Obligations, its Junior First Lien Creditor Pro Rata Share of the
amount remaining to be distributed.
(b)
(i) For
purposes of this Agreement, “ Senior First Lien Creditor
Pro Rata Share ” shall mean, when calculating a Senior
First Lien Creditor’s portion of any distribution or amount,
that amount (expressed as a percentage) equal to a fraction the
numerator of which is the
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then unpaid amount of such Senior First Lien
Creditor’s Senior First Lien Primary Obligations or Senior
First Lien Secondary Obligations, as the case may be, and the
denominator of which is the then outstanding amount of all Senior
First Lien Primary Obligations or Senior First Lien Secondary
Obligations, as the case may be.
(ii)
For the purposes
of this Agreement, “ Junior First Lien Creditor Pro Rata
Share ” shall mean, when calculating a Junior First Lien
Creditor’s portion of any distribution or amount, that amount
(expressed as a percentage) equal to a fraction the numerator of
which is the then unpaid amount of such Junior First Lien
Creditor’s Junior First Lien Obligations and the denominator
of which is the then outstanding amount of all Junior First Lien
Obligations.
(c)
When payments to
the Senior First Lien Creditors are based upon their respective
Senior First Lien Creditor Pro Rata Shares, the amounts received by
such Senior First Lien Creditors hereunder shall be applied (for
purposes of making determinations under this Section 3 only) (i)
first, to their Senior First Lien Primary Obligations and (ii)
second, to their Senior First Lien Secondary Obligations. If
any payment to any Senior First Lien Creditor of its Senior First
Lien Creditor Pro Rata Share of any distribution would result in
overpayment to such Senior First Lien Creditor, such excess amount
shall instead be distributed in respect of the unpaid Senior First
Lien Primary Obligations or Senior First Lien Secondary
Obligations, as the case may be, of the other Senior First Lien
Creditors, with each Senior First Lien Creditor whose Senior First
Lien Primary Obligations or Senior First Lien Secondary
Obligations, as the case may be, have not been paid in full to
receive an amount equal to such excess amount multiplied by a
fraction the numerator of which is the unpaid Senior First Lien
Primary Obligations or Senior First Lien Secondary Obligations, as
the case may be, of such Senior First Lien Creditor and the
denominator of which is the unpaid Senior First Lien Primary
Obligations or Senior First Lien Secondary Obligations, as the case
may be, of all Senior First Lien Creditors entitled to such
distribution.
(d)
Each of the First
Lien Creditors, by their acceptance of the benefits hereof and of
the applicable US Security Documents, agrees and acknowledges that
if the Bank Lender Creditors receive a distribution on account of
undrawn amounts with respect to Letters of Credit issued (or deemed
issued) under the Bank Credit Agreement (which shall only occur
after all outstanding Revolving Loans under the Bank Credit
Agreement and all unreimbursed Letter of Credit Obligations with
respect to such Letters of Credit have been paid in full), such
amounts shall be paid to the US Agent under the Bank Credit
Agreement and held by it, for the equal and ratable benefit of the
Bank Lender Creditors, as cash security for the repayment of the
Bank Credit Document Obligations owing to the Bank Lender Creditors
as such. If any amounts are held as cash security pursuant to
the immediately preceding sentence, then upon the termination of
all outstanding Letters of Credit under the Bank Credit Agreement,
and after the application of all such cash security to the
repayment of all the Bank Credit Document Obligations owing to the
Bank Lender Creditors after giving effect to the termination of all
such Letters of Credit, if there remains any excess cash, such
excess cash shall be returned by the US Agent to the Collateral
Agent for distribution in accordance with Section 3(a)
hereof.
(e)
All payments
required to be made hereunder shall be made (w) if to the Bank
Lender Creditors, to the US Agent for the account of the Bank
Lender Creditors, (x) if to the Other Creditors, to the
Representative for the Other Creditors, or, in the absence of such
a
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Representative, directly to
the Other Creditors and (y) if to the Junior First Lien Creditors,
to the Additional Senior Secured Notes Trustee.
(f)
For purposes of
applying payments received in accordance with this Section 3, the
Collateral Agent shall be entitled to rely upon (i) the US Agent
under the Bank Credit Agreement, (ii) the Representative for the
Other Creditors or, in the absence of such a Representative, upon
the Other Creditors, and (iii) the Additional Senior Secured Notes
Trustee, in each case, for a determination (which the US Agent,
each Representative for the Other Creditors, the Additional Senior
Secured Notes Trustee and the First Lien Creditors agree (or shall
agree) to provide upon request of the Collateral Agent) of the
outstanding Obligations (and type of Obligations) owed to the Bank
Lender Creditors, the Other Creditors or the Junior First Lien
Creditors, as the case may be. Unless it has actual knowledge
(including by way of written notice from a Bank Lender
Creditor
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