EXHIBIT 10.2
**INTERCREDITOR AGREEMENT**
               THIS INTERCREDITOR AGREEMENT (this “Agreement”), dated as of August 1, 2003, is among COURTSQUARE CAPITAL LIMITED, a Delaware corporation, solely in its capacity as the lender under thatcertain Third Secured Term Loan Agreement described below (“CSCL”), CITICORP MEZZANINE III, L.P., aDelaware limited partnership (“CMP”), BNY MIDWEST TRUST COMPANY, in its capacity as collateralagent and trustee for the holders of the Second Secured Notes described below (the “Second LienAgent”) and BANK ONE, NA, in its capacity as agent for the lenders party to the Credit Agreementdescribed below (the “First Lien Agent”).
RECITALS
               A. Contemporaneously herewith, MSX International, Inc. (the “Company”), each of the ForeignBorrowing Subsidiaries of the Company party thereto from time to time (the “Foreign BorrowingSubsidiaries”, and the Company and the Foreign Borrowing Subsidiaries, the “Borrowers”), thelenders party thereto from time to time (the “First Secured Lenders”) and Bank One, NA, as agent,are parties to an Amended and Restated Credit Agreement dated as of the date hereof (as amended,restated, refinanced, replaced or otherwise modified from time to time, and including withoutlimitation any agreement executed in substitution or replacement thereof or otherwise refinancingsuch Amended and Restated Credit Agreement, the “First Secured Credit Agreement”).
               B. Contemporaneously herewith, the Company, each domestic restricted subsidiary of theCompany, MSX International Limited (the “UK Borrower”) and the Second Lien Agent have entered intoa certain indenture, dated as of the date hereof (as amended, restated, refinanced, replaced orotherwise modified from time to time, and including without limitation any agreement executed insubstitution or replacement thereof or otherwise refinancing such indenture, the “Second SecuredIndenture”), pursuant to which the Company has issued 75,500 units consisting of its senior securednotes due October 15, 2007 (including any Additional Notes (defined therein) or Exchange Notes(defined therein) the “Second Secured Notes”) in the original principal amount of $75,500,000 onthe date hereof.
               C. Contemporaneously herewith, the Company, the UK Borrower and CMP have entered into a ThirdSecured Term Loan Agreement dated as of the date hereof (as amended, restated, refinanced, replacedor otherwise modified from time to time, and including without limitation any agreement executed insubstitution or replacement thereof or otherwise refinancing such Third Secured Term LoanAgreement, the “Third Secured Term Loan Agreement”).
               D. The Company, the UK Borrower and CSCL are parties to an Amended and Restated Fourth SecuredTerm Loan Agreement dated as of the date hereof (as so amended and as further amended, restated,refinanced, replaced or otherwise modified from time to time, and including without limitation anyagreement executed in substitution or replacement thereof or otherwise refinancing such Amended andRestated Fourth Secured Term Loan Agreement, the “Fourth Secured Term Loan Agreement”).
               E. The parties to the First Secured Credit Agreement, the Second Secured Indenture and theThird Secured Term Loan Agreement are willing to enter into those agreements only if this Agreementis executed by all parties hereto specifying the relative lien priorities, rights and other termsdescribed herein.
AGREEMENT
               In consideration of the mutual agreements herein contained, the parties agree as follows:
                         1. Definitions. The following terms shall have the following respective meanings:
                                   “Assets” means all present and future assets of the Company and each of its Subsidiaries,including without limitation all accounts, inventory, equipment, general intangibles, chattelpaper, capital stock and other investment property, instruments, deposit accounts, fixtures,supporting obligations, real property and any other asset of any type, whether real, personal orotherwise, and wherever located.
                                   “Borrowers” is defined in the recitals hereto.
                                   “Company” is defined in the recitals hereto.
                                   “Collateral” means all Assets on which any First Lien, Second Lien, Third Lien or Fourth Lienexists at any time.
 

 

                                   “CMP” is defined in the preamble hereto.
                                   “CSCL” is defined in the preamble hereto.
                                   “First Lien Agent” is defined in the preamble hereto.
                                   “First Liens” means all Liens in favor of the First Lien Agent, for the benefit of the FirstSecured Creditors, on any Assets, whether such Liens are now in existence or arise hereafter, up tothe amount of the permitted First Secured Obligations.
                                   “First Secured Collateral” means all Assets of the Company and each of its Subsidiaries onwhich any First Lien exists.
                                   “First Secured Credit Agreement” is defined in the recitals hereto.
                                   “First Secured Creditors” means the First Lien Agent and the First Secured Lenders.
                                   “First Secured Lenders” is defined in the recitals hereto.
                                   “First Secured Loan Documents” means the First Secured Credit Agreement and all otheragreements, instruments and documents executed in connection therewith at any time, as amended ormodified form time to time.
                                   “First Secured Obligations” means all Obligations outstanding at any time under any of theFirst Secured Loan Documents (provided that the principal amount of such Obligations shall notexceed the amount permitted under the Second Secured Indenture as in effect on the date hereofwithout any modification) and all Obligations of the Company or it Subsidiaries to any of the FirstSecured Creditors or any of their Affiliates with respect to any overdrafts, returned items andother liabilities that arises from treasury, depository, foreign exchange (including withoutlimitation foreign currency hedging obligations) or cash management services, including withoutlimitation in connection with any automated clearing house transfers of funds, wire transferservices, controlled disbursement accounts or similar transactions, and all Obligations inconnection with any commercial credit cards or stored value cards.
                                   “Foreign Borrowing Subsidiaries” is defined in the recitals hereto.
                                   “Foreign Subsidiary” means any present and future Subsidiary of the Company that is notorganized under the laws of the United States of America or any state thereof.
                                   “Fourth Liens” means all Liens in favor of the Fourth Secured Creditors with respect to anyAssets, whether such Liens are now in existence or arise hereafter, up to the amount of thepermitted Fourth Secured Obligations.
                                   “Fourth Secured Collateral” means all Assets of the Company and each of its Subsidiaries onwhich any Fourth Lien exists, provided that (a) no Fourth Lien may exist on any such Asset on whichan enforceable, perfected First Lien (if the First Secured Obligations have not been Paid in Full),Second Lien (if the Second Secured Obligations have not been Paid in Full) and Third Lien (if theThird Secured Obligations have not been Paid in Full) does not exist and (b) all Assets of anyForeign Subsidiary (other than the accounts receivable of the UK Borrower) and all Capital Stockheld by a Foreign Subsidiary shall be excluded from Fourth Secured Collateral.
                                   “Fourth Secured Creditors” means CSCL and any other holders of the Fourth Secured Obligations.
                                   “Fourth Secured Loan Documents” means the Fourth Secured Term Loan Agreement and all otheragreements, instruments and documents executed in connection therewith at any time, as amended ormodified form time to time.
                                   “Fourth Secured Obligations” means all Obligations outstanding at any time under any of theFourth Secured Loan Documents.
                                   “Fourth Secured Term Loan Agreement” is defined in the recitals hereto.
                                   “Fourth Secured Term Loan” means the loans made under the Fourth Secured Term Loan Agreement.
                                   “Insolvency Proceeding” is defined in Section 5(a).
 

 

                                   “Junior Liens” means the Second Liens, the Third Liens and the Fourth Liens, until the FirstSecured Obligations are Paid in Full, and thereafter means the Third Liens and the Fourth Liensuntil the Second Secured Obligations are Paid in Full, and thereafter means the Fourth Liens.
                                   “Junior Secured Creditors” means the Second Secured Creditors, the Third Secured Creditors andthe Fourth Secured Creditors until the First Secured Obligations are Paid in Full, and thereaftermeans the Third Secured Creditors and the Fourth Secured Creditors until the Second SecuredObligations are Paid in Full, and thereafter means the Fourth Secured Creditors.
                                   “Junior Secured Obligations” means the Second Secured Obligations and the Third SecuredObligations, until the First Secured Obligations are Paid in Full, and thereafter means the ThirdSecured Obligations and Fourth Secured Obligations until the Second Secured Obligations are Paid inFull, and thereafter means the Fourth Secured Obligations.
                                   “Lien” means any pledge, assignment, hypothecation, mortgage, security interest, depositarrangement, option, conditional sale or title retaining contract, sale and leaseback transaction,financing statement filing, lessor’s or lessee’s interest under any lease, or any other type oflien, charge, encumbrance, preferential arrangement or other claim or right.
                                   “Obligations” means all present and future obligations for principal, premium, interest, makewhole payments, penalties, fees, indemnifications (other than wholly contingent indemnificationobligations that are not due or payable), reimbursements (under letters of credit or otherwise, andcontingent or otherwise), termination payments, damages and other indebtedness, liabilities andobligations of any kind (including without limitation all interest and fees and other amountsaccruing after commencement of any case, proceeding or other action relating to the bankruptcy,insolvency or reorganization, whether or not an allowed claim).
                                   “Paid in Full” means, with respect to any Secured Obligations, the irrevocable payment in fullin cash of such Secured Obligations (including without limitation providing cash collateral for anyoutstanding letters of credit included in such Secured Obligations) and the expiry or terminationof any commitment to lend or make other advances under the agreements relating to such SecuredObligations.
                                   “Person” shall include an individual, a corporation, an association, a partnership, a trust orestate, a joint stock company, an unincorporated organization, a joint venture, a trade or business(whether or not incorporated), a government (foreign or domestic) and any agency or politicalsubdivision thereof, or any other entity.
                                   “Pledged Collateral” shall mean any tangible property in the possession of any SecuredCreditor (or its agents or bailees) in which a security interest is perfected by such possession.
                                   “Priority Secured Creditors” means the First Secured Creditors until the First SecuredObligations are Paid in Full, and thereafter means the Second Secured Creditors until the SecondSecured Obligations are Paid in Full, and thereafter means the Third Secured Creditors.
                                   “Priority Secured Obligations” means the First Secured Obligations until the First SecuredObligations are Paid in Full, and thereafter means the Second Secured Obligations until the SecondSecured Obligations are Paid in Full, and thereafter means the Third Secured Obligations.
                                   “Second Lien Agent” is defined in the preamble hereto.
                                   “Second Liens” means all Liens in favor of the Second Lien Agent, for the benefit of theSecond Secured Creditors, on any Assets, whether such Liens are now in existence or arisehereafter, up to the amount of the permitted Second Secured Obligations.
                                   “Second Secured Collateral” means all Assets of the Company and each of its Subsidiaries onwhich any Second Lien exists, provided that (a) no Second Lien may exist on any such Asset on whichan enforceable, perfected First Lien (if the First Secured Obligations have not been Paid in Full)does not exist and (b) all Assets of any Foreign Subsidiary (other than the accounts receivable ofthe UK Borrower) and all Capital Stock held by a Foreign Subsidiary shall be excluded from SecondSecured Collateral.
                                   “Second Secured Creditors” means the Second Lien Agent and all present and future holders ofthe Second Secured Notes.
                                   “Second Secured Indenture” is defined in the recitals hereto.
 

 

                                   “Second Secured Loan Documents” means the Second Secured Indenture, the Second Secured Notesand all other agreements, instruments and documents executed in connection therewith at any time,as amended or modified form time to time.
                                   “Second Secured Notes” is defined in the recitals hereto.
                                   “Second Secured Obligations” means all Obligations outstanding at any time under any of theSecond Secured Loan Documents.
                                   “Secured Creditors” means the First Secured Creditors, the Second Secured Creditors and theThird Secured Creditors.
                                   “Secured Loan Documents” means the First Secured Loan Documents, the Second Secured LoanDocuments and the Third Secured Loan Documents.
                                   “Secured Obligations” means the First Secured Obligations, the Second Secured Obligations andthe Third Secured Obligations.
                                   “Senior Subordinated Note Indenture” means the Senior Subordinated Indenture between theCompany, the UK Borrower, the subsidiary guarantors named therein and IBJ Schroder Bank & TrustCompany, as trustee, dated as of January 15, 1998, as amended or modified from time to time.
                                   “Subsidiary” of a Person means, any corporation, partnership, limited liability company,association, joint venture or similar business organization more than 50% of the outstandingcapital stock, membership interest, partnership interest or other ownership interest havingordinary voting power (other than securities or other ownership interests which have such power orright only by reason of the happening of a contingency) of which shall at the time be ownedbeneficially and of record, by such Person or by one or more of the other Subsidiaries of suchPerson or by any combination thereof. Any reference in this Agreement to a Subsidiary shall bedeemed reference to a Subsidiary of the Company unless otherwise indicated.
                                   “Third Liens” means all Liens in favor of the Third Secured Creditors with respect to anyAssets, whether such Liens are now in existence or arise hereafter, up to the amount of thepermitted Third Secured Obligations.
                                   “Third Secured Collateral” means all Assets of the Company and each of its Subsidiaries onwhich any Third Lien exists, provided that (a) no Third Lien may exist on any such Asset on whichan enforceable, perfected First Lien (if the First Secured Obligations have not been Paid in Full)and Second Lien (if the Second Secured Obligations have not been Paid in Full) does not exist and(b) all Assets of any Foreign Subsidiary (other than the accounts receivable of the UK Borrower)and all Capital Stock held by a Foreign Subsidiary shall be excluded from Third Secured Collateral.
                                   “Third Secured Creditors” means CMP and any other holders of the Third Secured Obligations.
                                   “Third Secured Loan Documents” means the Third Secured Term Loan Agreement and all otheragreements, instruments and documents executed in connection therewith at any time, as amended ormodified form time to time.
                                   “Third Secured Term Loan Agreement” is defined in the recitals hereto.
                                   “Third Secured Term Loan” means the loans made under the Third Secured Term Loan Agreement.
                                   “Third Secured Obligations” means all Obligations outstanding at any time under any of theThird Secured Loan Documents.
                                   “UK Borrower” is defined in the recitals hereto.
                                   **All defined terms shall include both the singular and the plural forms thereof and shall beconstrued accordingly. Use of the terms “herein”, “hereof”, and “hereunder” shall be deemedreferences to this Agreement in its entirety and not to the Section or clause in which such termappears.**
                         2. Lien Priority.
                         (a) The Fourth Secured Creditors shall be allowed to be granted Fourth Liens only on theFourth Secured Collateral and any Liens in favor of the Fourth Secured Creditors on any otherAssets shall be null and void. All Fourth Liens are hereby made junior and inferior in priority,operation and effect to the priority, operation and effect of all First Liens, Second Liens and
 

 

Third Liens, and all First Liens, Second Liens and Third Liens are superior and prior in priority,operation and effect to the priority, operation and effect of all Fourth Liens. The Fourth SecuredCreditors hereby agree to note on all financing statements naming the Company or any of itsSubsidiaries as debtor, in the Fourth Secured Term Loan Agreement and in such other Fourth SecuredLoan Documents that grant a Lien as requested by the First Lien Agent, that all Fourth Liens aresubject to this Agreement, in form and substance reasonably satisfactory to the First Lien Agentand the Second Lien Agent and the Third Secured Creditors, and authorize the First Lien Agent, theSecond Lien Agent and the Third Secured Creditors to amend any financing statements filed by or onbehalf of the Fourth Secured Creditors to note that they are subject to this Agreement.
                         (b) The Third Secured Creditors shall be allowed to be granted Third Liens only on the ThirdSecured Collateral and any Liens in favor of the Third Secured Creditors on any other Assets shallbe null and void. All Third Liens are hereby made junior and inferior in priority, operation andeffect to the priority, operation and effect of all First Liens and Second Liens, and all FirstLiens and Second Liens are superior and prior in priority, operation and effect to the priority,operation and effect of all Third Liens. The Third Secured Creditors hereby agree to note on allfinancing statements naming the Company or any of its Subsidiaries as debtor, in the Third SecuredTerm Loan Agreement, the Third Secured Term Loan Agreement and in such other Third Secured LoanDocuments that grant a Lien as requested by the First Lien Agent, that all Third Liens are subjectto this Agreement, in form and substance reasonably satisfactory to the First Lien Agent and theSecond Lien Agent, and authorize the First Lien Agent and the Second Lien Agent to amend anyfinancing statements filed by or on behalf of the Third Secured Creditors to note that they aresubject to this Agreement.
                         (c) The Second Secured Creditors shall be allowed to be granted Second Liens only on theSecond Lien Collateral and any Liens in favor of the Second Secured Creditors on any other Assetsshall be null and void. All Second Liens are hereby made junior and inferior in priority,operation and effect to the priority, operation and effect of all First Liens up to the amount ofthe First Secured Obligations, and all First Liens (up to the amount of the First SecuredObligations) are superior and prior in priority, operation and effect to the priority, operationand effect of all Second Liens. The Second Secured Creditors hereby agree to note on all financingstatements naming the Company or any of its Subsidiaries as debtor, in the Second Secured Indentureand in such other Second Secured Loan Documents that grant a Lien as requested by the First LienAgent, that all Second Liens are subject to this Agreement, in form and substance reasonablysatisfactory to the First Lien Agent, and authorize the First Lien Agent to amend any financingstatements filed by or on behalf of the Second Secured Creditors to note that they are subject tothis Agreement.
                         (d) Any distribution of any Collateral and all proceeds thereof, whether upon any sale,dissolution, winding up, bankruptcy, foreclosure, repossession or other Insolvency Proceeding orotherwise, shall be applied first to the First Secured Obligations until the First SecuredObligations are Paid in Full, second to the Second Secured Obligations until the Second SecuredObligations are Paid in Full, third to the Third Secured Obligations until the Third SecuredObligations are Paid in Full and fourth, to the Fourth Secured Obligations, until the FourthSecured Obligations are Paid in Full.
                         (e) Each Junior Secured Creditor agrees that it will not take a Lien on any Assets unless theFirst Secured Creditors (if the First Secured Obligations have not been Paid in Full) and theSecond Secured Creditors (if the Second Secured Obligations have not been Paid in Full) have anenforceable, perfected Lien on such Assets and, in the case of the Fourth Secured Creditors only,the Third Secured Creditors have an enforceable, perfected Lien on such Assets. If any JuniorSecured Creditor wants to obtain, and by the terms of its own Secured Loan Documents to which it isa party is entitled to obtain, a Lien on any Asset on which the First Secured Creditors (if theFirst Secured Obligations have not been Paid in Full), the Second Secured Creditors (if the SecondSecured Obligations have not been Paid in Full) and, in the case of the Fourth Secured Creditorsonly, the Third Secured Creditors do not have an enforceable, perfected Lien, such Junior SecuredCreditor shall cause the Company and its Subsidiaries to grant an enforceable, perfected Lien onsuch Assets to the First Secured Creditors (if the First Secured Obligations have not been Paid inFull), the Second Secured Creditors (if the Second Secured Obligations have not been Paid in Full)and, in the case of the Fourth Secured Creditors only, the Third Secured Creditors before suchJunior Secured Creditor obtains a Lien on such Assets. The First Secured Creditors (if the FirstSecured Obligations have not been Paid in Full), the Second Secured Creditors (if the SecondSecured Obligations have not been Paid in Full) and, if applicable, the Third Secured Creditorsshall accept such Liens, provided that the First Secured Creditors, the Second Secured Creditorsand, if applicable, the Third Secured Creditors shall not be responsible for obtaining anenforceable, perfected Lien on such Assets or be liable to any Junior Secured Creditors for anyfailure to obtain an enforceable, perfected Lien on such Assets, and such Liens of the JuniorSecured Creditors on such Assets shall be null and void if the First Secured Creditors (if theFirst Secured Obligations have not been Paid in Full), the Second Secured Creditors (if the SecondSecured Obligations have not been Paid in Full) and, if applicable, the Third Secured Creditors donot have an enforceable, perfected Lien on such Assets.
                         (f) The priorities of the Liens specified in this Agreement are applicable regardless of thetime or order of attachment or perfection of the Liens. The First Liens have first priority, theSecond Liens have second priority, the Third Liens have third priority and the Fourth Liens havefourth priority, all as described in this Agreement.
                         3. Rights and Remedies. The parties hereto agrees as follows:
 

 

                         (a) until the earlier of (i) January 15, 2008 or (ii) the date the Priority SecuredObligations become due and payable, by acceleration or otherwise, and after the earlier of suchdates so long as any Priority Secured Creditors are enforcing or otherwise exercising in good faithand in a reasonably diligent manner any of their rights or remedies (but not after the earlier ofsuch dates if no Priority Secured Creditor is enforcing or otherwise exercising in good faith andin a reasonably diligent manner any of their rights or remedies), (1) the Junior Secured Creditorsshall not exercise any right or remedy to which they may be entitled with respect to any Lien infavor of such Secured Creditors, including without limitation collecting or repossessing anyCollateral or notifying any account debtors or other obligors with respect thereto; and (2) thePriority Secured Creditors shall have the sole and exclusive right to take possession of, commenceand conduct foreclosure proceedings with respect to, or otherwise dispose of and realize on orotherwise exercise any rights with respect to, the Collateral, and shall direct and control anysale or other disposition of the Collateral, whether pursuant to any foreclosure, repossession orother judicial proceedings or otherwise without the consent or approval of any Junior SecuredCreditor;
                         (b) until such time as this Agreement is terminated, the Junior Secured Creditors’ rights inthe event of any sale of any Collateral shall be limited to the rights to receive any excessproceeds thereof, after all Priority Secured Obligations have been Paid in Full and, withoutlimiting the foregoing, upon any distribution of any Collateral or any proceeds thereof upon anydissolution, winding-up, bankruptcy, foreclosure, repossession or other Insolvency Proceeding orexercise of other enforcement remedies, total or partial liquidation or reorganization of theCompany, any of its Subsidiaries or any of their assets, the First Secured Creditors will beentitled to receive all such distributions and other proceeds in respect to the Collateral untilthe First Secured Obligations are Paid in Full before the Junior Secured Creditors shall beentitled to receive any payment from the Collateral and, after the First Secured Obligations arePaid in Full, the Second Secured Creditors will be entitled to receive all such distributions andother proceeds in respect to the Collateral until the Second Secured Obligations are paid in fullbefore the Third Secured Creditors shall be entitled to receive any payment from the Collateral,and, after the Second Secured Obligations are Paid in Full, the Third Secured Creditors will beentitled to receive all such distributions and other proceeds in respect to the Collateral untilthe Third Secured Obligations are paid in full before the Fourth Secured Creditors shall beentitled to receive any payment from the Collateral;
                         (c) until such time as this Agreement is terminated, the Secured Creditors shall not have anyobligation to marshal any present or future security, guaranty or other support available to themor to resort to such security in any particular order and each Secured Creditor entitled to disposeof Collateral hereunder may dispose of the Collateral in such manner as such Secured Creditor shalldeem appropriate in their sole and absolute discretion;
                         (d) until such time as this Agreement is terminated, the Junior Secured Creditors agree thatin the event any Priority Secured Creditors release any Priority Liens, the Junior SecuredCreditors will, not later than simultaneously with the release or termination of any such PriorityLien, terminate and release all Junior Liens on the Collateral for which any such Priority SecuredCreditors are releasing the Junior Secured Liens and take such other actions to effect the same,provided that (i) such release by the Junior Secured Creditors and the Priority Secured Creditorsshall not affect the Liens they have in proceeds or other Collateral, (ii) such Lien of the JuniorSecured Creditors on proceeds shall not affect the rights of the Company and its Subsidiaries touse such proceeds upon the terms and to the extent provided in the Secured Loan Documents,including without limitation the use thereof to pay Priority Secured Obligations, and (iii) the useof the proceeds shall not violate the terms of any Secured Loan Document, provided that the paymentof the First Secured Obligations and, if the First Secured Obligations have been Paid in Full, theSecond Secured Obligations, and, if the Second Secured Obligations have been Paid in Full, theThird Secured Obligations, with such proceeds and a simultaneous reduction in the maximum amountthat may be borrowed thereunder by the amount of such payment shall not be a violation of anySecured Loan Document regardless of any provision in any Secured Loan Document to the contrary;
                         (e) until such time as this Agreement is terminated, the Junior Secured Creditors shall not,due to any rights it may have as a holder of the Junior Liens, interfere with or in any manneroppose the Priority Secured Creditors in the exercise of any of their rights and remedies undertheir Secured Loan Documents with respect to the Collateral (provided that such exercise is in goodfaith and in a commercially reasonable manner), and shall not interfere with or in any manneroppose a disposition of, or other realization on, the Collateral by the Priority Secured Creditors,provided that the giving of any notice by it to any Person that has rights against the Company orany Subsidiary who is a guarantor of Junior Secured Obligations, including, without limitation,that it holds the Junior Liens, shall not be deemed to so interfere or oppose. In exercising theirexclusive right to control the manner and method of realization upon any of the Collateral, thePriority Secured Creditors may, at any time and from time to time, in their sole and absolutediscretion, exercise any of their rights and remedies under their Secured Loan Documents. If theCompany or any of its Subsidiaries consents or fails to object to a proposed retention ofCollateral (or a portion thereof) by the Priority Secured Creditors in satisfaction of the PrioritySecured Obligations (or a portion thereof), the Junior Secured Creditors hereby consent to suchproposed retention regardless of whether they are provided with notice of such proposed retention;
 

 

                         (f) until such time as this Agreement is terminated, the Junior Secured Creditors shall notelect or send any notice to effect a “Payment Blockage” under Section 10.3 of the SeniorSubordinated Note Indenture or any similar provisions thereunder or under any indenture or otheragreement issued in exchange or replacement therefor; and
                         (g) any Junior Secured Creditor may make such demands or file such claims as may be necessaryto prevent the waiver or bar of such claims under applicable statutes of limitations or otherstatutes, court orders or rules of procedure, but except as provided in this Section no JuniorSecured Creditor shall take any actions restricted by this Agreement until, in the case of theSecond Secured Creditors, the First Secured Obligations are Paid in Full, in the case of the ThirdSecured Creditors, the Second Secured Obligations are Paid in Full and, in the case of the FourthSecured Creditors, the Third Secured Obligations are Paid in Full.
                                   4. Junior Secured Creditors’ Waivers. (a) The Junior Secured Creditors hereby waiveany right they may have to require that the Priority Secured Creditors marshal the Collateral orany other guaranty or support they may have in favor of the Junior Secured Creditors.
                         (b) Without notice to or the consent of the Junior Secured Creditors, the First SecuredCreditors (if the First Secured Obligations have not been Paid in Full), the Second SecuredCreditors (if the Second Secured Obligations have not been Paid in Full) and the Third SecuredCreditors may, at any time and from time to time and without impairing or releasing the priority ofLiens and other agreements herein made, do any one or more of the following: (i) change themanner, place or terms of payment, or change or extend the time of payment, of their SecuredObligations, or amend or supplement in any manner the documentation evidencing, securing orrelating to the Collateral or otherwise with respect to their Secured Obligations, or increasewithout limit (subject to the terms of this Agreement) the amount of their Secured Obligations;(ii) release any person or entity liable in any manner for the payment or collection of theirSecured Obligations; (iii) exercise or refrain from exercising any rights with respect to theCollateral or otherwise with respect to their Secured Obligations, any guarantor of their SecuredObligations or any other person or entity; (iv) apply any monies or other property paid by anyperson or entity or otherwise available to their Secured Obligations; (v) accept or release, orfail to perfect an interest in, any Collateral or other security for their Secured Obligations; or(vi) take or omit to take any other action with respect to the Collateral or otherwise with respectto their Secured Obligations which may impair or adversely affect the subordination of Liens andother agreements herein made.
                         (c) The Junior Secured Creditors hereby waive notice of acceptance of the terms of thisAgreement, and notice of reliance by the Priority Secured Creditors on this Agreement in extendingany financial accommodation to the Company or any of its Subsidiaries.
                         (d) Each Secured Creditor acknowledges that the other Secured Creditors have made nowarranties or representations with respect to the due execution, legality, validity, completenessor enforceability of any Secured Loan Documents, the collectability of the Secured Obligations, theenforceability or perfection of any Liens or any matter whatsoever related to the SecuredObligations or the Collateral.
                         (e) The Junior Secured Creditors agree that the Priority Secured Creditors shall have noliability to the Junior Secured Creditors for, and the Junior Secured Creditors hereby waive anyclaim which the Junior Secured Creditors may have at any time against the Priority SecuredCreditors arising out of, any and all actions which the Priority Secured Creditors, in good faithand in a commercially reasonable manner, take or omit to take with respect to (i) the Secured LoanDocuments, (ii) collection of the Priority Secured Obligations or (iii) foreclosure upon and sale,liquidation or other disposition, or valuation, use, protection or release, of the Collateral orany guaranty or other support. Notwithstanding anything herein to the contrary, the Junior SecuredCreditors are not waiving any claims they may have if the Priority Secured Creditors do notexercise their rights and remedies under the Priority Secured Loan Documents in good faith and in acommercially reasonable manner.
                         (f) The Junior Secured Creditors waive any right that they may have, whether such right arisesunder the Uniform Commercial Code or any other applicable law, to receive notice of the PriorityCreditors’ intended disposition of the Collateral (or a portion thereof) or of the Priority SecuredCreditors’ proposed retention of such assets in satisfaction of the Priority Secured Obligations(or a portion thereof).
                         5. Bankruptcy Issues. (a) This Agreement shall be applicable both before and afterthe commencement, whether voluntary or involuntary, of any case or other proceeding of any kindwith respect to the Company or any of its Subsidiaries at any time under any bankruptcy,insolvency, reorganization, liquidation, adjustment or composition of it or its debts under anylaw, rule or regulation relating to bankruptcy, insolvency or reorganization or relief of debtors,or any other similar proceeding relating to any bankruptcy, insolvency or similar actions, in anycase whether under any federal or state law, rule or regulation or other law, rule or regulation inthe United States or any non-United States law, rule or regulation or otherwise, or appointing areceiver, trustee, examiner, liquidator or similar official for the Company or any of itsSubsidiaries or any material portion of any of their assets (any of the foregoing defined herein asan “Insolvency Proceeding”), and all references herein shall be deemed to apply to the Company orany of its Subsidiaries as a debtor-in-
 

 

possession or in any other capacity in any Insolvency Proceeding and to any receiver, trustee,examiner, liquidator or similar official appointed for the Company, any of its Subsidiaries or anyof their assets.
                         (b) To the extent that the Secured Creditors receive payments on, or proceeds of, Collateralwhich are subsequently invalidated, declared to be fraudulent or preferential, set aside and/orrequired to be repaid to a trustee, receiver or any other party under any Insolvency Proceeding,then, to the extent of such payment or proceeds received, the Secured Obligations, or part thereof,intended to be satisfied shall be revived (and this Agreement shall be revived if it has beenterminated) and continue in full force and effect as if such payments or proceeds had not beenreceived by such Secured Creditors.
                         (c) The Priority Secured Creditors may consent to the use of cash collateral by the Companyor any of its Subsidiaries on such terms and conditions and in such amounts as the Priority SecuredCreditors, in their sole discretion, may decide and, in connection with such cash collateral usage,the Company or any of its Subsidiaries (or a trustee, receiver or any other party appointed for theestate thereof) may grant to the Priority Secured Creditors replacement liens and securityinterests upon any Assets, which liens and security interests shall be superior in priority to theJunior Liens. All allocations of payments made with respect to Collateral between the PrioritySecured Creditors and the Junior Secured Creditors shall, subject to any court order, continue tobe made after the filing of any Insolvency Proceeding on the same basis that such payments were tobe allocated prior to the date of such filing. The Junior Secured Creditors will not object to oroppose a sale or other disposition of any Collateral (or any portion thereof) free and clear ofsecurity interests, liens or other claims of the Junior Secured Creditors in any InsolvencyProceeding if the Priority Secured Creditors have consented to such sale or disposition thereof,provided that such release by the Junior Secured Creditors and the Priority Secured Creditors shallnot affect the Liens they have in proceeds or other Collateral, provided, further, that such Lienof the Junior Secured Creditors on proceeds shall not affect the rights of the Company and itsSubsidiaries to use such proceeds upon the terms and to the extent provided in the Priority SecuredLoan Documents and the Junior Secured Loan Documents, including without limitation the use thereofto pay Priority Secured Obligations. The Junior Secured Creditors shall not assert any right theymay have to “adequate protection” of their interest or similar right in the Collateral in anyInsolvency Proceeding and shall not seek to have the automatic stay or similar order or rule liftedwith respect to such Collateral, without the prior written consent of the First Secured Creditors,until the First Secured Obligations have been Paid in Full, and thereafter without the priorwritten consent of the Second Secured Creditors, until the Second Secured Obligations have beenPaid in Full, and thereafter without the prior written consent of the Third Secured Creditors. TheJunior Secured Creditors waive any claim or objection it may now or hereafter have, arising in anyproceeding instituted under Chapter 11 of the United States Bankruptcy Code and involving thePriority Secured Creditors or any of them as debtor in possession lenders, to any borrowing orgrant of a security interest under Section 364 of the United States Bankruptcy Code by the Companyor any of its Subsidiaries, as a debtor in possession, or any similar action under any otherInsolvency Proceeding. The Fourth Secured Creditors shall not initiate or prosecute or encourageany other person to initiate or prosecute any claim, action or other proceeding (i) challenging theenforceability of the First Secured Creditors’, Second Secured Creditors’ or Third SecuredCreditors’ claims with respect to the Collateral, (ii) challenging the enforceability of the FirstLiens, Second Liens or Third Liens, or (iii) asserting any claims which the Company or any of itsSubsidiaries may hold with respect to the First Secured Creditors in their capacity as holders ofthe First Liens, with respect to the Second Secured Creditors in their capacity as holders of theSecond Liens or with respect to the Third Secured Creditors in their capacity as holders of theThird Liens, unless, in all of the foregoing cases, such enforceability is contrary to the terms ofthis Agreement. The Third Secured Creditors shall not initiate or prosecute or encourage any otherperson to initiate or prosecute any claim, action or other proceeding (i) challenging theenforceability of the First Secured Creditors’, Second Secured Creditors’ or Fourth SecuredCreditors’ claims with respect to the Collateral, (ii) challenging the enforceability of the FirstLiens, Second Liens or Fourth Liens, or (iii) asserting any claims which the Company or any of itsSubsidiaries may hold with respect to the First Secured Creditors in their capacity as holders ofthe First Liens, with respect to the Second Secured Creditors in their capacity as holders of theSecond Liens or with respect to the Fourth Secured Creditors in their capacity as holders of theFourth Liens, unless, in all of the foregoing cases, such enforceability is contrary to the termsof this Agreement. The Second Secured Creditors shall not initiate or prosecute or encourage anyother person to initiate or prosecute any claim, action or other proceeding (i) challenging theenforceability of the First Secured Creditors’, Third Secured Creditors’ or Fourth SecuredCreditors’ claim with respect to the Collateral, (ii) challenging the enforceability of the FirstLiens, the Third Liens or Fourth Liens, or (iii) asserting any claims which the Company or any ofits Subsidiaries may hold with respect to the First Secured Creditors in their capacity as holdersof the First Liens, the Third Secured Creditors with respect to the Third Liens or the FourthSecured Creditors with respect to the Fourth Liens, unless, in all of the foregoing cases, suchenforceability is contrary to the terms of this Agreement. The First Secured Creditors shall notinitiate or prosecute or encourage any other person to initiate or prosecute any claim, action orother proceeding (i) challenging the enforceability of the Second Secured Creditors’, Third SecuredCreditors’ or Fourth Secured Creditors’ claim with respect to the Collateral, (ii) challenging theenforceability of the Second Liens, the Third Liens or Fourth Liens, or (iii) asserting any claimswhich the Company or any of its Subsidiaries may hold with respect to the Second Secured Creditorsin their capacity as holders of the Second Liens, the Third Secured Creditors with respect to theThird Liens or the Fourth Secured Creditors with respect to the Fourth Liens, unless, in all of theforegoing cases, such enforceability is contrary to the terms of this Agreement.
 

 

                                   6. Bailee for Perfection.
                                   (a) Each Secured Creditor agrees to hold the Pledged Collateral in its possession or control(or in the possession or control of its agents or bailees) as bailee for the other SecuredCreditors and any assignee solely for the purpose of perfecting the security interest granted insuch Pledged Collateral pursuant to the applicable Secured Loan Documents, subject to the terms andconditions of this Section.
                                   (b) Until Payment in Full of their Secured Obligations, only the Priority Secured Creditorsshall be entitled to deal with the Pledged Collateral in accordance with the terms of their SecuredLoan Documents as if the Lien of the Junior Secured Creditors under their Secured Loan Documentsdid not exist. The rights of the Junior Secured Creditors shall at all times be subject to theterms of this Agreement.
                                   (c) No Secured Creditor shall have any obligation whatsoever to any other Secured Creditor toassure that the Pledged Collateral is genuine or owned by the Company or any of its Subsidiaries orto preserve rights or benefits of any Person except as expressly set forth in this Section. Theduties or responsibilities of any Secured Creditor under this Section shall be limited solely toholding the Pledged Collateral as bailee for the other Secured Creditors for purposes of perfectingthe Lien held by the other Secured Creditors.
                                   (d) No Secured Creditor shall have by reason of this Agreement or any other document anyfiduciary relationship in respect of any other Secured Creditor.
                                   (e) Once Payment in Full of the First Secured Obligations has occurred, the First Lien Agentshall deliver to the Second Lien Agent the Pledged Collateral held by it together with anynecessary endorsements (without recourse or warranty) or as a court of competent jurisdiction mayotherwise direct. Once Payment in Full of the Second Secured Obligations has occurred, the SecondLien Agent shall deliver to the CMP the Pledged Collateral held by it together with any necessaryendorsements (without recourse or warranty) or as a court of competent jurisdiction may otherwisedirect. Once Payment in Full of the Third Secured Obligations has occurred, CMP shall deliver toCSCL the Pledged Collateral held by it together with any necessary endorsements (without recourseor warranty) or as a court of competent jurisdiction may otherwise direct.
                                   7. Representations and Warranties. Each of the parties hereto represents and warrantsto the other as follows: (a) it has the corporate and other power and authority to execute, deliverand perform this Agreement and has taken all necessary corporate and other action to authorize theexecution, delivery and performance by it of this Agreement; (b) no consent or authorization of, orfiling with, any person (including, without limitation, any governmental body, agency or official)is required in connection with the execution, delivery or performance by it, or the validity orenforceability against it, of this Agreement, and (c) this Agreement has been duly executed anddelivered by it and constitutes a legal, valid and binding obligation, enforceable against it inaccordance with its terms, except as may be limited by applicable bankruptcy, insolvency andsimilar laws, rules or regulations affecting creditors’ rights generally and subject, as toenforceability, to general principles of equity (regardless of whether enforcement is sought in aproceeding in equity or at law).
                                   8. Continuing Agreement; Reinstatement. This Agreement shall constitute a continuingagreement which shall remain in effect until all Priority Secured Obligations shall have been Painin Full, at which time this Agreement shall terminate. Each party to this Agreement agrees thatthis Agreement shall continue to be effective or be reinstated, as the case may be, if at any timeany payment (in whole or in part) of any of the proceeds of an Collateral is rescinded or mustotherwise be restored by any party hereto, in any Insolvency Proceeding of the Company, the UKBorrower, any other Borrower, any guarantor of any of the Secured Obligations or otherwise, asthough such payment had not been made.
                                   9. Integration and Severability. This Agreement embodies the entire agreement andunderstanding among the parties hereto with respect to the subject matter hereof and supersedes allprior agreements and understandings relating to the subject matter hereof. If there is anyconflict between the terms and provisions of this Agreement and the Secured Loan Documents, theterms of this Agreement shall control. In case any one or more of the provisions of this Agreementshall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality andenforceability of the remaining provisions of this Agreement shall not in any way be affected orimpaired thereby, and such invalidity, illegality or unenforceability in one jurisdiction shall notaffect the validity, legality or enforceability of the other provisions of this Agreement in anyother jurisdiction.
                                   10. Successors and Assigns. This Agreement shall bind the Secured Creditors and theirrespective successors and assigns, and shall inure to the benefit of their respective successorsand assigns, subject to the restrictions on transfers by the Junior Secured Creditors contained inthis Section 10. The Fourth Secured Creditors shall have the right at any time, subject to theprior written consent of the First Lien Agent, which consent from the First Lien Agent shall not beunreasonably withheld or delayed and shall not be required if such assignment is to an Affiliate ofthe Fourth Secured Creditors, to sell, assign, transfer, or negotiate, or grant a participation in,all or any part of the Fourth Secured Obligations and
 

 

the rights related thereto to one or more Persons; provided that CSCL shall at all timesretain and control at least 51% of the aggregate principal amount of the Fourth Secured Term Loanand the rights related thereto; provided, further, that in all such cases any such sale,assignment, transfer, negotiation or participation shall be subject to this Agreement and any suchpurchaser, assignee, transferee, participant or other recipient shall automatically be subject tothe same obligations to which the Fourth Secured Creditors are subject hereunder (without releasingthe Junior Secured Creditors) and shall execute such agreements and documents in form and substancesatisfactory to the First Lien Agent assuming such obligations. Any provisions under the ThirdSecured Loan Documents or Fourth Secured Loan Documents relating to obtaining the requisitepercentage of holders of the Third Secured Obligations or Fourth Secured Obligations, as the casemay be, to amend, waive or otherwise modify any provision of the Third Secured Loan Documents orFourth Secured Loan Documents or take any action under the Third Secured Loan Documents or FourthSecured Loan Documents shall not be amended, waived or otherwise modified, directly or indirectly,without the prior written consent of the First Lien Agent. Any sale, assignment, transfer,negotiation or participation of the Second Secured Obligations shall be subject to this Agreementand any such purchaser, assignee, transferee, participant or other recipient shall automatically besubject to the terms of this Agreement. Any sale, assignment, transfer, negotiation orparticipation of the Third Secured Obligations shall be subject to this Agreement and any suchpurchaser, assignee, transferee, participant or other recipient shall automatically be subject tothe terms of this Agreement (without releasing the Junior Secured Creditors) and shall execute suchagreements and documents in form and substance satisfactory to the First Lien Agent assuming suchobligations.
     11. Miscellaneous. No provision of this Agreement may be modified or waived except byan instrument or instruments signed by each party hereto. This Agreement shall be governed by andconstrued in accordance with the laws of the State of Michigan, without giving effect to the choiceof law principles of such State. All the understandings, agreements, representations andwarranties contained herein are solely for the benefit of the Secured Creditors and there are noother parties who are intended to be benefited in any way whatsoever by this Agreement. The FirstSecured Creditors, the Second Secured Creditors, the Third Secured Creditors and the Borrowersacknowledge that CSCL’s obligations hereunder are entered into in its capacity as a lender underthe Fourth Secured Term Loan Agreement and not in any other capacity, including, withoutlimitation, as a stockholder of the Company. The First Secured Creditors, the Second SecuredCreditors, the Fourth Secured Creditors and the Borrowers acknowledge that CMP’s obligationshereunder are entered into in its capacity as a lender under the Third Secured Term Loan Agreementand not in any other capacity, including, without limitation, as a stockholder of the Company. Allparties hereto acknowledge and agree that this is an enforceable agreement to establish thepriorities of the Liens of the Secured Parties and other rights of the parties hereto, includingwithout limitation under UCC 9-339. This Agreement may be executed in any number of counterparts,all of which taken together shall constitute one in the same instrument and any of the partieshereto may execute this Agreement by signing any such counterpart and telecopied signatures shallbe enforceable as originals. The Third Secured Creditors agree to pay to First Lien Agent and theSecond Lien Agent on demand all expenses of every kind, including without limitation reasonableattorney fees and expenses, that the First Lien Agent or the Second Lien Agent may incur inenforcing any of their respective rights and the First Secured Creditors’ and Second SecuredCreditors’ rights under this Agreement if it is determined in a final non-appealable judgment by acourt of competent jurisdiction that such enforcement was due to a breach of this Agreement by theThird Secured Creditors. The Fourth Secured Creditors agree to pay to First Lien Agent, the SecondLien Agent and CMP on demand all expenses of every kind, including without limitation reasonableattorney fees and expenses, that the First Lien Agent, the Second Lien Agent or CMP may incur inenforcing any of their respective rights and the First Secured Creditors’, the Second SecuredCreditors’ and the Third Secured Creditors’ rights under this Agreement if it is determined in afinal non-appealable judgment by a court of competent jurisdiction that such enforcement was due toa breach of this Agreement by the Fourth Secured Creditors. All parties hereto, and the parties tothe Consent and Agreement hereto, agree that all expenses of every kind, including withoutlimitation reasonable attorney fees and expenses, that the First Lien Agent may incur in enforcingany of its rights and the First Secured Creditors’ rights under this Agreement if it is determinedin a final non-appealable judgment by a court of competent jurisdiction that such enforcement wasdue to a breach of this Agreement by the Second Secured Creditors shall be added to the FirstSecured Obligations (except to the extent such breach is determined in a final non-appealablejudgment by a court of competent jurisdiction to be a result of the Second Secured Creditor’s grossnegligence or willful misconduct, in which case the Second Secured Creditor shall be liable forsuch expenses).
     12. Addresses for Notices. All demands, notices and other communications provided forhereunder shall be in writing and mailed or sent by telecopy or delivered, addressed as follows:
If to the First Lien Agent or the First Secured Creditors:
Bank One , NA