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EXHIBIT 10.2
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT ("AGREEMENT"),
is dated as of December 22, 2005,
and entered into by and among AUTOCAM
CORPORATION, a Michigan corporation (the
"COMPANY"), CITICORP NORTH AMERICA, INC.
("CITICORP"), in its capacity as
collateral agent for the First Lien
Obligations (as defined below), including
its successors and assigns in such capacity
from time to time (the "FIRST LIEN
COLLATERAL AGENT"), and THE BANK OF NEW
YORK ("BNY"), in its capacity as
collateral agent for the Second Lien
Obligations (as defined below), including
its successors and assigns in such capacity
from time to time (the "SECOND LIEN
COLLATERAL AGENT"). Capitalized terms used
in this Agreement have the meanings
assigned to them in Section 1 below.
RECITALS
The Company, Autocam France, Sarl (the
"EUROPEAN FIRST LIEN BORROWER"), Titan
Holdings, Inc. ("HOLDINGS"), certain
Subsidiaries of the Company, the lenders
and agents party thereto, and Goldman Sachs
Credit Partners L.P. ("GSCP"), as
Syndication Agent, and First Lien
Collateral Agent, as Administrative Agent and
Collateral Agent, have entered into that
Credit and Guaranty Agreement dated as
of the June 21, 2004 providing for a
revolving credit facility and term loans
(as amended through the Second Amendment
thereto dated as of the date hereof and
as further amended, restated, supplemented,
modified, replaced or refinanced
from time to time in accordance with the
terms thereof, the "FIRST LIEN CREDIT
AGREEMENT");
The Company, Holdings, certain Subsidiaries
of the Company, the lenders and
agents party thereto, GSCP, as Syndication
Agent, and the Second Lien Collateral
Agent as Administrative Agent and
Collateral Agent, have entered into that Term
Loan and Guaranty Agreement dated as of the
date hereof providing for term loans
(as amended, restated, supplemented,
modified, replaced or refinanced from time
to time in accordance with the terms
hereof, the "SECOND LIEN CREDIT
AGREEMENT");
Pursuant to (i) the First Lien Credit
Agreement, Holdings has guarantied the
First Lien Obligations (the "FIRST LIEN
HOLDINGS GUARANTY"), Holdings and the
Company have agreed to cause certain
current and future Subsidiaries to agree to
guaranty the First Lien Obligations (the
"FIRST LIEN SUBSIDIARY GUARANTY") and
the Company has guarantied the obligations
of the European First Lien Borrower
under the First Lien Credit Agreement, and
(ii) the Second Lien Credit
Agreement, Holdings has agreed to guaranty
the Second Lien Obligations (the
"SECOND LIEN HOLDINGS GUARANTY") and
Holdings and the Company have agreed to
cause certain current and future
Subsidiaries to agree to guaranty the Second
Lien Obligations (the "SECOND LIEN
SUBSIDIARY GUARANTY");
The obligations of the Company under the
First Lien Credit Agreement and any
Hedge Agreements with a Lender
Counterparty, the obligations of Holdings under
the First Lien Holdings Guaranty and the
obligations of the Subsidiary
guarantors under the First Lien Subsidiary
Guaranty are secured on a first
priority basis by liens on substantially
all the assets of the Company, Holdings
and the Subsidiary guarantors (such current
and future Subsidiaries of the
Company providing a guaranty thereof, the
"GUARANTOR SUBSIDIARIES"),
respectively, pursuant to the terms of the
First Lien Collateral Documents;
The obligations of the Company under the
Second Lien Credit Agreement, the
obligations of Holdings under the Second
Lien Holdings Guaranty and the
obligations of the Guarantor Subsidiaries
under the Second Lien Subsidiary
Guaranty will be secured on a second
priority basis by liens on substantially
all the assets of the Company, Holdings and
the Guarantor Subsidiaries (other
than the stock of the European First Lien
Borrower), respectively, pursuant to
the terms of the Second Lien Collateral
Documents;
The First Lien Loan Documents and the
Second Lien Loan Documents provide, among
other things, that the parties thereto
shall set forth in this Agreement their
respective rights and remedies with respect
to the Collateral; and
In order to induce the First Lien
Collateral Agent and the First Lien
Claimholders to consent to the Grantors
incurring the Second Lien Obligations
and to induce the First Lien Claimholders
to extend credit and other financial
accommodations and lend monies to or for
the benefit of the Company or any other
Grantor, the Second Lien Collateral Agent
on behalf of the Second Lien
Claimholders has agreed to the
intercreditor and other provisions set forth in
this Agreement.
AGREEMENT
In consideration of the foregoing, the
mutual covenants and obligations herein
set forth and for other good and valuable
consideration, the sufficiency and
receipt of which are hereby acknowledged,
the parties hereto, intending to be
legally bound, hereby agree as follows:
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SECTION 11. Definitions.
11.1 Defined Terms. As used in the Agreement, the following
terms
shall have the following meanings:
"AFFILIATE" means, with respect to a
specified Person, another Person that
directly, or indirectly through one or more
intermediaries, controls or is
controlled by or is under common control
with the Person specified. For purposes
of this definition, a Person shall be
deemed to "CONTROL" or be "CONTROLLED BY"
a Person if such Person possesses, directly
or indirectly, power to direct or
cause the direction of the management or
policies of such Person whether through
ownership of equity interests, by contract
or otherwise.
"AGREEMENT" means this Intercreditor
Agreement, as amended, restated, renewed,
extended, supplemented or otherwise
modified from time to time.
"ASSET SALE" has the meaning assigned to
that term in the First Lien Credit
Agreement.
"BANKRUPTCY CODE" means Title 11 of the
United States Code entitled
"Bankruptcy," as now and hereafter in
effect, or any successor statute.
"BANKRUPTCY LAW" means the Bankruptcy Code
and any similar federal, state or
foreign law for the relief of debtors.
"BUSINESS DAY" means a day other than a
Saturday, Sunday or other day on which
commercial banks in New York City are
authorized or required by law to close.
"CAP AMOUNT" has the meaning assigned to
that term within the definition of
"First Lien Obligation".
"COLLATERAL" means all of the assets and
property of any Grantor, whether real,
personal or mixed, constituting both First
Lien Collateral and Second Lien
Collateral.
"COLLATERAL AGENT" means either the First
Lien Collateral Agent or the Second
Lien Collateral Agent; "COLLATERAL AGENTS"
means each of them collectively.
"COMPANY" has the meaning assigned to that
term in the Preamble to this
Agreement.
"COMPARABLE SECOND LIEN COLLATERAL
DOCUMENT" means, in relation to any
Collateral subject to any Lien created
under any First Lien Collateral Document,
the Second Lien Loan Document which creates
a Lien on the same Collateral,
granted by the same Grantor.
"CURRENCY AGREEMENT" means any foreign
exchange contract, currency swap
agreement, futures contract, option
contract, synthetic cap or other similar
agreement or arrangement, each of which is
for the purpose of hedging the
foreign currency risk associated with
Holdings' and its Subsidiaries' operations
and not for speculative purposes.
"DIP FINANCING" has the meaning assigned to
that term in Section 6.1.
"DISCHARGE OF FIRST LIEN OBLIGATIONS"
means, except to the extent otherwise
expressly provided in Sections 5.4 and
6.5:
(a) indefeasible payment in full in cash of the principal of
and
interest (including interest accruing on or
after the commencement of any
Insolvency or Liquidation Proceeding,
whether or not such interest would be
allowed in such Insolvency or Liquidation
Proceeding), on all Indebtedness
outstanding under the First Lien Loan
Documents and constituting First Lien
Obligations (including without limitation,
all Indebtedness of the European
First Lien Borrower that is guaranteed by
the Company or the other Grantors);
(b) indefeasible payment in full in cash of all other First
Lien
Obligations that are due and payable or
otherwise accrued and owing at or prior
to the time such principal and interest are
paid (including without limitation
any such amounts owing by the European
First Lien Borrower that are guaranteed
by the Company or the other Grantors);
(c) termination or expiration of all commitments, if any, to
extend
credit that would constitute First Lien
Obligations (including without
limitation any commitments to extend credit
to the European First Lien Borrower,
the repayment of which is guaranteed by the
Company or the other Grantors);
(d) termination or cash collateralization (in an amount and
manner
reasonably satisfactory to the First Lien
Collateral Agent, but in no event
greater than 105% of the aggregate undrawn
face amount) of all letters of credit
issued under the First Lien Loan Documents
and constituting First Lien
Obligations (including without limitation
any such letters of credit issued for
the benefit of the European First Lien
Borrower the reimbursement obligations
for which are guaranteed by the Company or
the other Grantors); and
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(e) delivery by the First Lien Collateral Agent to the Second
Lien
Collateral Agent written notice confirming
that the conditions set forth in (a)
through (d) have been satisfied (which the
First Lien Collateral Agent hereby
agrees to promptly deliver upon request if
such conditions have in fact been
satisfied).
"DISPOSITION" has the meaning assigned to
that term in Section 5.1(a)(2).
"EUROPEAN FIRST LIEN BORROWER" has the
meaning assigned to that term in the
Recital of this Agreement.
"EUROPEAN FIRST LIEN COLLATERAL" has the
meaning assigned to that term in
Section 2.3.
"FIRST LIEN CLAIMHOLDERS" means, at any
relevant time, the holders of First Lien
Obligations at that time, including the
First Lien Lenders and the agents under
the First Lien Loan Documents.
"FIRST LIEN COLLATERAL AGENT" has the
meaning assigned to that term in the
Recitals to this Agreement.
"FIRST LIEN COLLATERAL" means all of the
assets and property of any Grantor,
whether real, personal or mixed, with
respect to which a Lien is granted as
security for any First Lien Obligations.
For the avoidance of doubt, the
European First Lien Collateral shall not
constitute "First Lien Collateral" for
the purposes of this Agreement.
"FIRST LIEN COLLATERAL DOCUMENTS" means the
Collateral Documents (as defined in
the First Lien Credit Agreement) pursuant
to which a Lien is granted in
Collateral and any other agreement,
document or instrument pursuant to which a
Lien is granted in Collateral, in each case
securing any First Lien Obligations.
"FIRST LIEN CREDIT AGREEMENT" has the
meaning assigned to that term in the
Recitals to this Agreement.
"FIRST LIEN HOLDINGS GUARANTY" has the
meaning assigned to that term in the
Recitals to this Agreement.
"FIRST LIEN LENDERS" means the "Lenders"
under and as defined in the First Lien
Loan Documents.
"FIRST LIEN LOAN DOCUMENTS" means the First
Lien Credit Agreement and the Credit
Documents (as defined in the First Lien
Credit Agreement), including Hedge
Agreements entered into with a Lender
Counterparty, and each of the other
agreements, documents and instruments
providing for or evidencing any other
First Lien Obligation, and any other
document or instrument executed or
delivered by a Grantor at any time in
connection with any First Lien
Obligations, including any intercreditor or
joinder agreement among holders of
First Lien Obligations, to the extent such
are effective at the relevant time,
as each may be amended, restated,
supplemented, modified, Refinanced, replaced,
renewed or extended from time to time in
accordance with the provisions of this
Agreement.
"FIRST LIEN MORTGAGES" means a collective
reference to each mortgage, deed of
trust and other document or instrument
under which any Lien on real property
owned or leased by any Grantor is granted
to secure any First Lien Obligations
or under which rights or remedies with
respect to any such Liens are governed.
"FIRST LIEN OBLIGATIONS" means, subject to
the next sentence, all Obligations of
the Company and the Grantors outstanding
under the First Lien Credit Agreement
and the other First Lien Loan Documents,
including Hedge Agreements entered into
with any Lender Counterparty and guarantees
of the obligations of the European
First Lien Borrower. "First Lien
Obligations" shall include all interest accrued
or accruing (or which would, absent
commencement of an Insolvency or Liquidation
Proceeding, accrue) after commencement of
an Insolvency or Liquidation
Proceeding in accordance with the rate
specified in the relevant First Lien Loan
Document whether or not the claim for such
interest is allowed as a claim in
such Insolvency or Liquidation
Proceeding.
Notwithstanding the foregoing, if the sum
of: (1) Indebtedness for borrowed
money of the Company constituting principal
outstanding under the First Lien
Credit Agreement and the other First Lien
Documents; plus (2) the principal
amount of Indebtedness for borrowed money
of the European First Lien Borrower
guaranteed by the Company, plus (3) the
aggregate face amount of any letters of
credit issued but not reimbursed under the
First Lien Credit Agreement, is in
excess of the Cap Amount, then only that
portion of such Indebtedness and such
aggregate face amount of letters of credit
equal to the Cap Amount shall be
included in First Lien Obligations and
interest and reimbursement obligations
with respect to such Indebtedness and
letters of credit shall only constitute
First Lien Obligations to the extent
related to Indebtedness and face amounts of
letters of credit included in the First
Lien Obligations. The "CAP AMOUNT" shall
be $115,000,000 minus the aggregate
principal amount of prepayments and
repayments of loans under the First Lien
Credit Agreement (to the extent such
prepayments and repayments cannot be
reborrowed) and permanent reductions or
terminations of commitments thereunder, in
each case after the date hereof.
Non-U.S. Dollar denominated First Lien
Obligations shall be applied toward the
Cap Amount in an amount equal to their U.S.
Dollar equivalent amount calculated
based on the Spot Exchange Rate in effect
on the date such First Lien
Obligations were incurred, in the case of
term debt, or first committed, in the
case of revolving credit debt.
"FIRST LIEN SUBSIDIARY GUARANTY" has the
meaning assigned to that term in the
Recitals to this Agreement.
"GOVERNMENTAL AUTHORITY" means any federal,
state, municipal, national or other
government, governmental department,
commission, board, bureau, court, agency or
instrumentality or political subdivision
thereof or any entity or officer
exercising executive, legislative,
judicial, regulatory or administrative
functions of or pertaining to any
government or any court, in each case whether
associated with a state of the United
States, the United States, or a foreign
entity or government.
"GRANTORS" means the Company, Holdings,
each of the Guarantor Subsidiaries and
each other Person that has or may from
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time to time hereafter execute and deliver
a First Lien Collateral Document or a
Second Lien Collateral Document as a
"Grantor" (or the equivalent thereof).
"GUARANTOR SUBSIDIARIES" has the meaning
set forth in the Recitals to this
Agreement.
"HEDGE AGREEMENTS" means an Interest Rate
Agreement or a Currency Agreement
entered into with a Lender Counterparty in
order to satisfy the requirements of
the First Lien Credit Agreement or
otherwise in the ordinary course of Holding's
or any of its Subsidiaries' businesses.
"HEDGING OBLIGATION" of any Person means
any obligation of such Person pursuant
to any Hedge Agreements.
"HOLDINGS" has the meaning set forth in the
Recitals to this Agreement.
"INDEBTEDNESS" means and includes all
Obligations that constitute "Indebtedness"
within the meaning of the First Lien Credit
Agreement or the Second Lien Credit
Agreement, as applicable.
"INSOLVENCY OR LIQUIDATION PROCEEDING"
means: any voluntary or involuntary case
or proceeding under the Bankruptcy Code
with respect to any Grantor;
(a) any other voluntary or involuntary insolvency, reorganization
or
bankruptcy case or proceeding, or any
receivership, liquidation, reorganization
or other similar case or proceeding with
respect to any Grantor or with respect
to a material portion of their respective
assets;
(b) any liquidation, dissolution, reorganization or winding up of
any
Grantor whether voluntary or involuntary
and whether or not involving insolvency
or bankruptcy except as permitted in
Section 6.9 of the First Lien Credit
Agreement or Section 6.9 of the Second Lien
Credit Agreement, as applicable; or
(c) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of
any Grantor.
"INTEREST RATE AGREEMENT" means any
interest rate swap agreement, interest rate
cap agreement, interest rate collar
agreement, interest rate hedging agreement
or other similar agreement or arrangement
each of which is for the purpose of
hedging the interest rate exposure
associated with Holdings' and its
Subsidiaries' operations and not for
speculative purposes.
"LENDER COUNTERPARTY" means GSCP and each
First Lien Lender or any Affiliate of
a First Lien Lender counterparty to a Hedge
Agreement (including any Person who
is a First Lien Lender (and any Affiliate
thereof) as of the Closing Date but
subsequently, whether before or after
entering into a Hedge Agreement, ceases to
be a First Lien Lender) including, without
limitation, each such Affiliate that
provides written notice in form and
substance satisfactory to the First Lien
Collateral Agent as to the existence and
terms of the applicable Hedge
Agreement.
"LIEN" means any lien, mortgage, pledge,
assignment, security interest, charge
or encumbrance of any kind (including any
agreement to give any of the
foregoing, any conditional sale or other
title retention agreement, and any
lease in the nature thereof) and any
option, trust, UCC financing statement or
other preferential arrangement having the
practical effect of any of the
foregoing.
"NEW AGENT" has the meaning assigned to
that term in Section 5.4.
"OBLIGATIONS" means all obligations of
every nature of each Grantor from time to
time owed to any agent or trustee, the
First Lien Claimholders, the Second Lien
Claimholders or any of them or their
respective Affiliates, in each case under
the First Lien Loan Documents, the Second
Lien Loan Documents or Hedge
Agreements, whether for principal, interest
or payments for early termination of
Interest Rate Agreements, fees, expenses,
indemnification or otherwise and all
guarantees of any of the foregoing.
"PERSON" means any natural person,
corporation, limited liability company,
trust, joint venture, association, company,
partnership, governmental authority
or other entity.
"PLEDGED COLLATERAL" has the meaning set
forth in Section 5.3.
"RECOVERY" has the meaning set forth in
Section 6.5.
"REFINANCE" means, in respect of any
Indebtedness, to refinance, extend, renew,
defease, amend, modify, supplement,
restructure, replace, refund or repay, or to
issue other indebtedness, in exchange or
replacement for, such Indebtedness in
whole or in part. "REFINANCED" and
"REFINANCING" shall have correlative
meanings.
"SECOND LIEN CLAIMHOLDERS" means, at any
relevant time, the holders of
Second Lien Obligations at that time,
including the Second Lien Lenders and the
agents under the Second Lien Loan
Documents.
"SECOND LIEN COLLATERAL" means all of the
assets and property of any Grantor,
whether real, personal or mixed, with
respect to which a Lien is granted as
security for any Second Lien
Obligations.
"SECOND LIEN COLLATERAL AGENT" has the
meaning assigned to that term in the
Preamble of this Agreement.
"SECOND LIEN COLLATERAL DOCUMENTS" means
the Collateral Documents (as defined in
the Second Lien Credit Agreement) and any
other agreement, document or
instrument pursuant to which a Lien is
granted securing any Second Lien
Obligations.
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"SECOND LIEN CREDIT AGREEMENT" has the
meaning assigned to that term in the
Recitals to this Agreement.
"SECOND LIEN HOLDINGS GUARANTY" has the
meaning assigned to that term in the
Recitals to this Agreement.
"SECOND LIEN LENDERS" means the "Lenders"
under and as defined in the Second
Lien Credit Agreement.
"SECOND LIEN LOAN DOCUMENTS" means the
Second Lien Credit Agreement and the
Credit Documents (as defined in the Second
Lien Credit Agreement) and each of
the other agreements, documents and
instruments providing for or evidencing any
other Second Lien Obligation, and any other
document or instrument executed or
delivered by a Grantor at any time in
connection with any Second Lien
Obligations, including any intercreditor or
joinder agreement among holders of
Second Lien Obligations to the extent such
are effective at the relevant time,
as each may be amended, restated,
supplemented, modified, Refinanced, replaced,
renewed or extended from time to time in
accordance with the provisions of this
Agreement.
"SECOND LIEN MORTGAGES" means a collective
reference to each mortgage, deed of
trust and any other document or instrument
under which any Lien on real property
owned or leased by any Grantor is granted
to secure any Second Lien Obligations
or under which rights or remedies with
respect to any such Liens are governed.
"SECOND LIEN OBLIGATIONS" means all
Obligations outstanding under the Second
Lien Credit Agreement and the other Second
Lien Loan Documents. "Second Lien
Obligations" shall include all interest
accrued or accruing (or which would,
absent commencement of an Insolvency or
Liquidation Proceeding, accrue) after
commencement of an Insolvency or
Liquidation Proceeding in accordance with the
rate specified in the relevant Second Lien
Loan Document whether or not the
claim for such interest is allowed as a
claim in such Insolvency or Liquidation
Proceeding.
"SECOND LIEN SUBSIDIARY GUARANTY" has the
meaning assigned to that term in the
Recitals to this Agreement.
"SPOT EXCHANGE RATE" means, at any date of
determination thereof, the spot rate
of exchange in London that appears on the
display page applicable to the
relevant currency on the Telerate System
Incorporated Service (or such other
page as may replace such page on such
service for the purpose of displaying the
spot rate of exchange in London for the
conversion of U.S. Dollars into such
currency).
"STANDSTILL PERIOD" has the meaning set
forth in Section 3.1.
"SUBSIDIARY" means, with respect to any
Person, any corporation, partnership,
limited liability company, association,
joint venture or other business entity
of which more than 50% of the total voting
power of shares of stock or other
ownership interests entitled (without
regard to the occurrence of any
contingency) to vote in the election of the
Person or Persons (whether
directors, managers, trustees or other
Persons performing similar functions)
having the power to direct or cause the
direction of the management and policies
thereof 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.
"UCC" means the Uniform Commercial Code (or
any similar or equivalent
legislation) as in effect in any applicable
jurisdiction.
11.2 Terms Generally. The definitions of terms in this Agreement
shall
apply equally to the singular and plural
forms of the terms defined. Whenever
the context may require, any pronoun shall
include the corresponding masculine,
feminine and neuter forms. The words
"include," "includes" and "including" shall
be deemed to be followed by the phrase
"without limitation." The word "will"
shall be construed to have the same meaning
and effect as the word "shall."
Unless the context requires otherwise:
(a) any definition of or reference to any agreement, instrument
or
other document herein shall be construed as
referring to such agreement,
instrument or other document as from time
to time amended, restated,
supplemented, modified, renewed or
extended;
(b) any reference herein to any Person shall be construed to
include
such Person's permitted successors and
assigns;
(c) the words "herein," "hereof" and "hereunder," and words of
similar
import, shall be construed to refer to this
Agreement in its entirety and not to
any particular provision hereof;
(d) all references herein to Sections shall be construed to refer
to
Sections of this Agreement; and
(e) the words "asset" and "property" shall be construed to have
the
same meaning and effect and to refer to any
and all tangible and intangible
assets and properties, including cash,
securities, accounts and contract rights.
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SECTION 12. Lien Priorities.
12.1 Relative Priorities. Notwithstanding the date, time,
method,
manner or order of grant, attachment or
perfection of any Liens securing the
Second Lien Obligations granted on the
Collateral or of any Liens securing the
First Lien Obligations granted on the
Collateral and notwithstanding any
provision of the UCC, or any other
applicable law or the Second Lien Loan
Documents or any defect or deficiencies in,
or failure to perfect, the Liens
securing the First Lien Obligations or any
other circumstance whatsoever, the
Second Lien Collateral Agent, on behalf of
itself and the Second Lien
Claimholders, hereby agrees that:
(a) any Lien on the Collateral securing any First Lien Obligations
now
or hereafter held by or on behalf of the
First Lien Collateral Agent or any
First Lien Claimholders or any agent or
trustee therefor, regardless of how
acquired, whether by grant, possession,
statute, operation of law, subrogation
or otherwise, shall be senior in all
respects and prior to any Lien on the
Collateral securing any Second Lien
Obligations; and
(b) any Lien on the Collateral securing any Second Lien
Obligations
now or hereafter held by or on behalf of
the Second Lien Collateral Agent, any
Second Lien Claimholders or any agent or
trustee therefor regardless of how
acquired, whether by grant, possession,
statute, operation of law, subrogation
or otherwise, shall be junior and
subordinate in all respects to all Liens on
the Collateral securing any First Lien
Obligations. All Liens on the Collateral
securing any First Lien Obligations shall
be and remain senior in all respects
and prior to all Liens on the Collateral
securing any Second Lien Obligations
for all purposes, whether or not such Liens
securing any First Lien Obligations
are subordinated to any Lien securing any
other obligation of the Company, any
other Grantor or any other Person.
12.2 Prohibition on Contesting Liens. Each of the Second Lien
Collateral Agent, for itself and on behalf
of each Second Lien Claimholder, and
the First Lien Collateral Agent, for itself
and on behalf of each First Lien
Claimholder, agrees that it will not (and
hereby waives any right to) contest or
support any other Person in contesting, in
any proceeding (including any
Insolvency or Liquidation Proceeding), the
perfection, priority, validity or
enforceability of a Lien held by or on
behalf of any of the First Lien
Claimholders in the First Lien Collateral
or by or on behalf of any of the
Second Lien Claimholders in the Second Lien
Collateral, as the case may be, or
the provisions of this Agreement; provided
that nothing in this Agreement shall
be construed to prevent or impair the
rights of the First Lien Collateral Agent
or any First Lien Claimholder to enforce
this Agreement, including the
provisions of this Agreement relating to
the priority of the Liens securing the
First Lien Obligations as provided in
Sections 2.1 and 3.1.
12.3 No New Liens. So long as the Discharge of First Lien
Obligations
has not occurred, whether or not any
Insolvency or Liquidation Proceeding has
been commenced by or against the Company or
any other Grantor, the parties
hereto agree that the Company shall not,
and shall not permit any other Grantor
to:
(a) grant or permit any additional Liens on any asset or property
to
secure any Second Lien Obligation unless it
has granted or concurrently grants a
Lien on such asset or property to secure
the First Lien Obligations; or
(b) grant or permit any additional Liens on any asset or property
to
secure any First Lien Obligations other
than the capital stock of the European
First Lien Borrower unless it has granted
or concurrently grants a Lien on such
asset or property to secure the Second Lien
Obligations.
The Second Lien Collateral Agent, on behalf
of the Second Lien Claimholders,
acknowledges that (i) the obligations of
the European First Lien Borrower under
the First Lien Credit Agreement are secured
by certain assets of, and the
capital stock of, the European First Lien
Borrower and may be secured by
additional assets of the European First
Lien Borrower and its Subsidiaries in
the future (the "EUROPEAN FIRST LIEN
COLLATERAL"), and (ii) notwithstanding
Section 2.3, 2.4 or anything else in this
Agreement to the contrary, neither the
Second Lien Collateral Agent nor the Second
Lien Claimholders shall be entitled
to a Lien on the European First Lien
Collateral and the European First Lien
Collateral shall not constitute
"Collateral" governed by this Agreement.
To the extent that the foregoing provisions
are not complied with for any
reason, without limiting any other rights
and remedies available to the First
Lien Collateral Agent and/or the First Lien
Claimholders, the Second Lien
Collateral Agent, on behalf of Second Lien
Claimholders, agrees that any amounts
received by or distributed to any of them
pursuant to or as a result of Liens
granted in contravention of this Section
2.3 shall be subject to Section 4.2.
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12.4 Similar Liens and Agreements. The parties hereto agree that it
is
their intention that the First Lien
Collateral and the Second Lien Collateral be
identical. In furtherance of the foregoing
and of Section 8.9, the parties
hereto agree, subject to the other
provisions of this Agreement:
(a) upon request by the First Lien Collateral Agent or the Second
Lien
Collateral Agent, to cooperate in good
faith (and to direct their counsel to
cooperate in good faith) from time to time
in order to determine the specific
items included in the First Lien Collateral
and the Second Lien Collateral and
the steps taken to perfect their respective
Liens thereon and the identity of
the respective parties obligated under the
First Lien Loan Documents and the
Second Lien Loan Documents; and
(b) that the documents and agreements creating or evidencing the
First
Lien Collateral and the Second Lien
Collateral and guarantees for the First Lien
Obligations and the Second Lien Obligations
(except any guarantee which would
cause a material adverse tax effect on the
Company under the Second Lien
Collateral Documents but not the First Lien
Collateral Documents), subject to
Section 5.2(d), shall be in all material
respects the same forms of documents
other than with respect to the first lien
and the second lien nature of the
Obligations thereunder.
SECTION 13. Enforcement.
13.1 Exercise of Remedies.
(a) Until the Discharge of First Lien Obligations has occurred,
whether or not any Insolvency or
Liquidation Proceeding has been commenced by or
against the Company or any other Grantor,
the Second Lien Collateral Agent and
the Second Lien Claimholders:
(i) will not exercise or seek to exercise any rights or
remedies
with respect to
any Collateral (including the exercise of any right of
setoff or any
right under any lockbox agreement, account control agreement,
landlord waiver
or bailee's letter or similar agreement or arrangement to
which the Second
Lien Collateral Agent or any Second Lien Claimholder is a
party) or
institute any action or proceeding with respect to such rights
or
remedies
(including any action of foreclosure); provided, however, that
the
Second Lien
Collateral Agent may exercise any or all such rights or
remedies after
the passage of a period of at least 180 days has elapsed
since the later
of: (i) the date on which the Second Lien Collateral Agent
declares the
existence of any Event of Default under any Second Lien Loan
Documents and
demands the repayment of all the principal amount of any
Second Lien
Obligations; and (ii) the date on which the First Lien
Collateral Agent
receives notice from the Second Lien Collateral Agent of
such
declarations of an Event of Default and demand (the "STANDSTILL
PERIOD");
provided, further, however, that notwithstanding anything
herein
to the contrary,
in no event shall the Second Lien Collateral Agent or any
Second Lien
Claimholder exercise any rights or remedies with respect to the
Collateral if,
notwithstanding the expiration of the Standstill Period, the
First Lien
Collateral Agent or First Lien Claimholders shall have
commenced
and be
diligently pursuing the exercise of their rights or remedies
with
respect to all
or any material portion of the Collateral (prompt notice of
such exercise to
be given to the Second Lien Collateral Agent);
(ii) will not contest, protest or object to any foreclosure
proceeding or
action brought by the First Lien Collateral Agent or any
First Lien
Claimholder or any other exercise by the First Lien Collateral
Agent or any
First Lien Claimholder of any rights and remedies relating to
the Collateral
under the First Lien Loan Documents or otherwise; and
(iii) subject to their rights under clause (a)(1) above and
except as may be
permitted in Section 3.1(c), will not object to the
forbearance by
the First Lien Collateral Agent or the First Lien
Claimholders
from bringing or pursuing any foreclosure proceeding or action
or any other
exercise of any rights or remedies relating to the Collateral;
provided, that,
in the case of (1), (2) and (3) above, the Liens granted to
secure the
Second Lien Obligations of the Second Lien Claimholders shall
attach to any
proceeds resulting from actions taken by the First Lien
Collateral Agent
or any First Lien Claimholder in accordance with this
Agreement after
application of such proceeds to the extent necessary to
meet the
requirements of a Discharge of First Obligations.
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<PAGE>
(b) Until the Discharge of First Lien Obligations has occurred,
whether or not any Insolvency or
Liquidation Proceeding has been commenced by or
against the Company or any other Grantor,
subject to Section 3.1(a)(1), the
First Lien Collateral Agent and the First
Lien Claimholders shall have the right
to enforce rights, exercise remedies
(including set-off and the right to credit
bid their debt) and make determinations
regarding the release, disposition, or
restrictions with respect to the Collateral
without any consultation with or the
consent of the Second Lien Collateral Agent
or any Second Lien Claimholder;
provided, that the Lien securing the Second
Lien Obligations shall remain on the
proceeds of such Collateral released or
disposed of subject to the relative
priorities described in Section 2. In
exercising rights and remedies with
respect to the Collateral, the Second Lien
Collateral Agent on behalf of itself
and the Second Lien Claimholders agrees
that the First Lien Collateral Agent and
the First Lien Claimholders may enforce the
provisions of the First Lien Loan
Documents and exercise remedies thereunder,
all in such order and in such manner
as they may determine in the exercise of
their sole discretion. Such exercise
and enforcement shall include the rights of
an agent appointed by them to sell
or otherwise dispose of Collateral upon
foreclosure, to incur expenses in
connection with such sale or disposition,
and to exercise all the rights and
remedies of a secured creditor under the
UCC and of a secured creditor under
Bankruptcy Laws of any applicable
jurisdiction.
(c) Notwithstanding the foregoing, the Second Lien Collateral
Agent
and any Second Lien Claimholder may:
(i) file a claim or statement of interest with respect to the
Second Lien
Obligations; provided that an Insolvency or Liquidation
Proceeding has
been commenced by or against the Company or any other
Grantor;
(ii) take any action (not adverse to the priority status of the
Liens on the
Collateral securing the First Lien Obligations, or the rights
of any First
Lien Collateral Agent or the First Lien Claimholders to
exercise
remedies in respect thereof) in order to create, perfect,
preserve
or protect its
Lien on the Collateral;
(iii) file any necessary responsive or defensive pleadings in
opposition to
any motion, claim, adversary proceeding or other pleading
made by any
person objecting to or otherwise seeking the disallowance of
the claims or
liens of the Second Lien Claimholders, including any claims
secured by the
Collateral, if any, in each case in accordance with the
terms of this
Agreement;
(iv) file any pleadings, objections, motions or agreements
which
assert rights or
interests available to unsecured creditors of the Grantors
arising under
either any Insolvency or Liquidation Proceeding or applicable
non-bankruptcy
law, in each case not inconsistent with the terms of this
Agreement;
(v) vote on any plan of reorganization, file any proof of
claim,
make other
filings and make any arguments and motions that are, in each
case, not in
contravention of the terms of this Agreement, with respect to
the Second Lien
Obligations and the Collateral; and
(vi) exercise any of its rights or remedies with respect to the
Collateral after
the termination of the Standstill Period to the extent
permitted by
Section 3.1(a)(1) and subject to Section 4.1.
The Second Lien Collateral Agent, on behalf
of itself and the Second Lien
Claimholders, agrees that it will not take
or receive any Collateral or any
proceeds of Collateral in connection with
the exercise of any right or remedy
(including set-off) with respect to any
Collateral in its capacity as a creditor
in violation of this Agreement. Without
limiting the generality of the
foregoing, unless and until the Discharge
of First Lien Obligations has
occurred, except as expressly provided in
Sections 3.1(a), 6.3(b) and this
Section 3.1(c), the sole right of the
Second Lien Collateral Agent and the
Second Lien Claimholders with respect to
the Collateral is to hold a Lien on the
Collateral pursuant to the Second Lien
Collateral Documents for the period and
to the extent granted therein and to
receive a share of the proceeds thereof, if
any, after the Discharge of First Lien
Obligations has occurred.
(d) Subject to Sections 3.1(a) and (c) and Section 6.3(b):
(i) the Second Lien Collateral Agent, for itself and on behalf
of
the Second Lien
Claimholders, agrees that the Second Lien Collateral Agent
and the Second
Lien Claimholders will not take any action that would hinder
any exercise of
remedies under the First Lien Loan Documents or is
otherwise
prohibited
10
<PAGE>
hereunder,
including any sale, lease, exchange, transfer or other
disposition of
the Collateral, whether by foreclosure or otherwise;
(ii) the Second Lien Collateral Agent, for itself and on behalf
of the Second
Lien Claimholders, hereby waives any and all rights it or the
Second Lien
Claimholders may have as a junior lien creditor or otherwise to
object to the
manner in which the First Lien Collateral Agent or the First
Lien
Claimholders seek to enforce or collect the First Lien Obligations
or
the Liens
securing the First Lien Obligations granted in any of the First
Lien Collateral
undertaken in accordance with this Agreement, regardless of
whether any
action or failure to act by or on behalf of the First Lien
Collateral Agent
or First Lien Claimholders is adverse to the interest of
the Second Lien
Claimholders; and
(iii) the Second Lien Collateral Agent hereby acknowledges and
agrees that no
covenant, agreement or restriction contained in the Second
Lien Collateral
Documents or any other Second Lien Document (other than
this Agreement)
shall be deemed to restrict in any way the rights and
remedies of the First
Lien Collateral Agent or the First Lien Claimholders
with respect to
the Collateral as set forth in this Agreement and the First
Lien Credit
Documents.
(e) Except as otherwise specifically set forth in Sections 3.1(a)
and
(d), the Second Lien Collateral Agent and
the Second Lien Claimholders may
exercise rights and remedies as unsecured
creditors against the Company or any
other Grantor that has guaranteed or
granted Liens to secure the Second Lien
Obligations in accordance with the terms of
the Second Lien Loan Documents and
applicable law; provided that in the event
that any Second Lien Claimholder
becomes a judgment Lien creditor in respect
of Collateral as a result of its
enforcement of its rights as an unsecured
creditor with respect to the Second
Lien Obligations, such judgment Lien shall
be subject to the terms of this
Agreement for all purposes (including in
relation to the First Lien Obligations)
as the other Liens securing the Second Lien
Obligations are subject to this
Agreement.
(f) Nothing in this Agreement shall prohibit the receipt by the
Second
Lien Collateral Agent or any Second Lien
Claimholders of the regularly scheduled
payments of interest, principal and other
amounts due an payable on a
non-accelerated basis and voluntary or
mandatory prepayments of principal on a
non-accelerated basis in respect of the
Second Lien Obligations in accordance
with the Second Lien Loan Documents so long
as such receipt is not prohibited by
the First Lien Loan Documents and is not
the direct or indirect result of the
exercise by the Second Lien Collateral
Agent or any Second Lien Claimholders of
rights or remedies with respect to
Collateral as a secured creditor (including
set-off) or enforcement against Collateral
in contravention of this Agreement of
any Lien held by any of them. Nothing in
this Agreement impairs or otherwise
adversely affects any rights or remedies
the First Lien Collateral Agent or the
First Lien Claimholders may have with
respect to the First Lien Collateral.
SECTION 14. Payments.
14.1 Application of Proceeds. So long as the Discharge of First
Lien
Obligations has not occurred, whether or
not any Insolvency or Liquidation
Proceeding has been commenced by or against
the Company or any other Grantor,
Collateral or proceeds thereof received in
connection with the sale or other
disposition of, or collection on, such
Collateral upon the exercise of remedies
by the First Lien Collateral Agent or First
Lien Claimholders, shall be applied
by the First Lien Collateral Agent to the
First Lien Obligations in such order
as specified in the relevant First Lien
Loan Documents. Upon the Discharge of
First Lien Obligations, the First Lien
Collateral Agent shall deliver to the
Second Lien Collateral Agent any Collateral
and proceeds of Collateral held by
it in the same form as received, with any
necessary endorsements or as a court
of competent jurisdiction may otherwise
direct to be applied by the Second Lien
Collateral Agent to the Second Lien
Obligations in such order as specified in
the Second Lien Collateral Documents.
14.2 Payments Over in Violation of Agreement. So long as the
Discharge
of First Lien Obligations has not occurred,
whether or not any Insolvency or
Liquidation Proceeding has been commenced
by or against the Company or any other
Grantor, any Collateral or proceeds thereof
(including assets or proceeds
subject to Liens referred to in the final
sentence of Section 2.3) received by
the Second Lien Collateral Agent or any
Second Lien Claimholders in connection
with the exercise of any right or remedy
(including set-off) relating to the
Collateral in contravention of this
Agreement shall be segregated and held in
trust and forthwith paid over to the First
Lien Collateral Agent for the benefit
of the First Lien Claimholders in the same
form as received, with any necessary
endorsements or as a court of competent
jurisdiction may
11
<PAGE>
otherwise direct. The First Lien Collateral
Agent is hereby authorized to make
any such endorsements as agent for the
Second Lien Collateral Agent or any such
Second Lien Claimholders. This
authorization is coupled with an interest and is
irrevocable until the Discharge of First
Lien Obligations.
SECTION 15. Other Agreements.
15.1 Releases.
(a) If in connection with the exercise of the First Lien
Collateral
Agent's remedies in respect of the
Collateral provided for in Section 3.1, the
First Lien Collateral Agent, for itself or
on behalf of any of the First Lien
Claimholders, releases any of its Liens on
any part of the Collateral or
releases any Grantor from its obligations
under its guaranty of the First Lien
Obligations in connection with the sale of
the stock, or substantially all the
assets, of such Grantor, then the Liens, if
any, of the Second Lien Collateral
Agent, for itself or for the benefit of the
Second Lien Claimholders, on such
Collateral, and the obligations of such
Grantor under its guaranty of the Second
Lien Obligations, shall be automatically,
unconditionally and simultaneously
released. The Second Lien Collateral Agent,
for itself or on behalf of any such
Second
