Exhibit 10.4
EXECUTION COPY
AMENDED AND RESTATED INTERCREDITOR AGREEMENT
This AMENDED AND RESTATED INTERCREDITOR AGREEMENT (this "Agreement")
is made as of this 6th day of June, 2006 among CITICORP USA, INC., as
Receivables Agent (as defined below), CITICORP USA, INC., as Bank Agent (as
defined below), U.S. BANK TRUST NATIONAL ASSOCIATION, as Collateral Trustee (as
defined below), POLYONE CORPORATION, an Ohio corporation ("PolyOne" or
"Grantor"), and POLYONE FUNDING CORPORATION, a Delaware corporation ("PolyOne
Funding"), and each of the other PolyOne Entities (as defined below) that
becomes a party hereto pursuant to Section 4.3.
PRELIMINARY STATEMENTS
A. Pursuant to the Receivables Sale Agreement (as defined below), each
Originator (as defined below) has agreed to sell, transfer and assign to PolyOne
Funding, and PolyOne Funding has agreed to purchase from each Originator, all
right, title and interest of such Originator in the Pool Receivables and Related
Security relating thereto and all Collections thereof now existing or hereafter
created (each as defined below).
B. Pursuant to that certain Receivables Purchase Agreement (as defined
below), PolyOne Funding has sold, transferred and assigned, and may from time to
time hereafter sell, transfer and assign to the purchasers party thereto (the
"Purchasers"), Receivables Interests (as defined in the Receivables Purchase
Agreement) in all Pool Receivables, Related Security and Collections (each as
defined in the Receivables Purchase Agreement).
C. Pursuant to that certain Bank Agreement (as defined below), PolyOne
shall have guaranteed to each Beneficiary (as defined below) and its successors,
transferees and assigns the due and punctual payment and performance of the
Guaranteed Obligations (as defined below) and in connection therewith and
pursuant to the Bank Collateral Documents (as defined below) PolyOne has granted
to the Collateral Trustee, as security for its obligations under the Bank
Documents (as defined below), a security interest in the Bank Collateral (as
defined below).
D. The Geon Company, a Delaware corporation and predecessor in
interest to the Grantor ("Geon"), has made a guarantee dated as of December 22,
1997 (as amended, supplemented or otherwise modified and in effect on the date
hereof and as the same may hereafter be further amended, modified, extended,
renewed, replaced, restated or supplemented from time to time pursuant to the
terms thereof, the "Sunbelt Guarantee") in favor of each of the holders of the
Guaranteed Secured Senior Notes due 2017, Series G (as amended, supplemented or
otherwise modified and in effect on the date hereof and as the same may
hereafter be further amended, modified, extended, renewed, replaced, restated or
supplemented from time to time pursuant to the terms thereof, the "Sunbelt
Notes") issued by Sunbelt Cholor Alkali Partnership pursuant to the Note
Purchase Agreements, each dated December 22, 1997 between Sunbelt and the
respective purchasers of the Sunbelt Notes.
E. The Grantor has issued (i) 7 1/2% Debentures due 2015 (as amended,
supplemented or otherwise modified and in effect on the date hereof and as the
same may hereafter be further amended, modified, extended, renewed, replaced,
restated or supplemented from time to time pursuant to the terms thereof, the
"Geon Debentures") pursuant to that certain Indenture dated as of December 1,
1995 (as amended, supplemented or otherwise modified and in effect on the date
hereof and as the same may be further amended, modified, extended, renewed,
replaced, restated or supplemented from time to time pursuant to the terms
thereof, the "Geon Indenture"), (ii) 8 7/8% Senior Notes due 2012 (as amended,
supplemented or otherwise modified and in effect on the date hereof and as the
same may
hereafter be further amended, modified, extended, renewed, replaced, restated or
supplemented from time to time pursuant to the terms thereof, the "2002 PolyOne
Notes") pursuant to that certain Indenture dated as of April 23, 2002 (as
amended, supplemented or otherwise modified and in effect on the date hereof and
as the same may be further amended, modified, extended, renewed, replaced,
restated or supplemented from time to time pursuant to the terms thereof, the
"2002 PolyOne Indenture") and (iii) 10 5/8% Senior Notes due 2010 (as amended,
supplemented or otherwise modified and in effect on the date hereof and as the
same may hereafter be further amended, modified, extended, renewed, replaced,
restated or supplemented from time to time pursuant to the terms thereof, the
"2003 PolyOne Notes") pursuant to that certain Indenture dated as of May 6, 2003
(as amended, supplemented or otherwise modified and in effect on the date hereof
and as the same may be further amended, modified, extended, renewed, replaced,
restated or supplemented from time to time pursuant to the terms thereof, the
"2003 PolyOne Indenture").
F. The Sunbelt Guarantee, the Sunbelt Notes, the Geon Indenture, the
Geon Debentures, the 2002 PolyOne Indenture, the 2002 PolyOne Notes, the 2003
PolyOne Indenture and the 2003 PolyOne Notes, and each agreement and instrument
delivered by the Grantor pursuant to any of the foregoing, as the same may be
supplemented, amended or modified from time to time in accordance with the
provisions thereof, are collectively referred to herein as the "Existing
Indebtedness Agreements". Pursuant to the Sunbelt Guarantee, the Geon Indenture,
the 2002 PolyOne Indenture and the 2003 PolyOne Indenture, the Grantor has
agreed not to incur, and not to permit certain of its Subsidiaries to incur,
certain Liens (as therein defined) upon certain of its property or assets to
secure certain indebtedness without making effective provision whereby the
obligations under the Existing Indebtedness Agreements shall be secured equally
and ratably with the indebtedness secured by such Liens.
G. Concurrently with the execution of this Agreement, the Grantor is
entering into a Guarantee and Agreement, dated as of June 6, 2006 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Bank Agreement"), with each of the financial institutions party thereto, as
beneficiary (collectively, the "Beneficiaries"), and Citicorp USA, Inc., as
administrative agent for the Beneficiaries thereunder (together with any
successor administrative agent appointed pursuant to Article VII of the Bank
Agreement, the "Bank Agent").
H. Concurrently with the execution of this Agreement, the Grantor is
entering into a second amendment and restatement of that certain Amended and
Restated Security Agreement, dated as of May 6, 2003, from the Grantor to the
Collateral Trustee or its predecessor, as corporate trustee, and Angelita Pena,
an individual residing in the State of New Jersey, or her predecessor, in each
case not in an individual capacity but as individual trustee (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Bank Security Agreement").
I. Concurrently with the execution of this Agreement, the Grantor is
entering into an amendment and restatement of that certain Collateral Trust
Agreement, dated as of May 6, 2003, among the Grantor and the Collateral Trustee
or its predecessor, as corporate trustee, and Angelita Pena, an individual
residing in the State of New Jersey, or her predecessor, in each case not in an
individual capacity but as individual trustee (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Collateral Trust
Agreement").
J. The Grantor has entered into that certain Intercreditor Agreement,
dated as of May 6, 2003 (as amended to, but not including the date hereof, the
"Existing Intercreditor Agreement"), with the Bank Agent, the Collateral Trustee
or its predecessor, as corporate trustee, and Angelita Pena, an individual
residing in the State of New Jersey, or her predecessor, in each case not in an
individual capacity but as individual trustee, PolyOne Engineered Films, Inc.
and PolyOne Funding, pursuant to which the parties thereto have agreed to
certain matters with respect to, inter alia, the grant of security interests
under the Bank Security Agreement.
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K. This Agreement, the Collateral Trust Agreement, the Bank Security
Agreement, each Successor Collateral Agreement (as defined below), and each
other agreement entered into by the Collateral Trustee at the direction of the
Required Representatives (as defined below), are collectively referred to herein
as the "Shared Collateral Documents". The Shared Collateral Documents are
intended to secure the Existing Indebtedness Agreements, to the extent required
to comply with the provisions of the Existing Indebtedness Agreements, and the
Guarantee and Agreement and it is a condition to the occurrence of the Effective
Date under the Guarantee and Agreement that the Grantor shall have granted to
the Collateral Trustee the pledge and assignment of, and the lien and security
interest in, certain property and assets of the Grantor pursuant to the Shared
Collateral Documents.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants contained herein, and for other good and valuable
consideration, receipt of which is hereby acknowledged, it is hereby agreed to
amend and restate the Existing Intercreditor Agreement as follows:
ARTICLE I.
DEFINITIONS.
1.1. Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"Adverse Claim" means, with respect to any asset or property, any
lien, security interest, charge, pledge, encumbrance or other right or claim in,
of, on or in respect of such asset or property.
"Agent" means the Collateral Trustee or the Receivables Agent, as
applicable, and "Agents" means the Collateral Trustee and the Receivables Agent.
"Bank Agent" has the meaning given to such term in the Preliminary
Statements hereto.
"Bank Agreement" shall mean the Guarantee and Agreement, dated as of
June 6, 2006, among the Grantor, the Bank Agent and the Beneficiaries, as such
agreement may be amended, amended and restated, supplemented or otherwise
modified from time to time at the option of the parties thereto and any other
agreements pursuant to which any of the indebtedness, commitments, obligations,
costs, expenses, fees, reimbursements and other indemnities payable or owing
thereunder may be refinanced, restructured, renewed, extended, refunded or
replaced (as any such other agreements may from time to time at the option of
the parties thereto be amended, amended and restated, supplemented, renewed or
otherwise modified).
"Bank Claims" shall mean all obligations outstanding under one or more
of the Bank Documents and all extensions of credit by one or more Banks under
any financing under section 364 of the Bankruptcy Code or any arrangement for
use of cash collateral of the Banks under section 363 of the Bankruptcy Code
(the terms of which are consented to by the Bank Agent in its capacity as such).
"Bank Claims" shall include all interest accrued or accruing (or which would,
absent the commencement of an Insolvency or Liquidation Proceeding, accrue)
after the commencement of an Insolvency or Liquidation Proceeding in accordance
with and at the rate specified in the Bank Agreement, or any Existing
Indebtedness Agreement, as applicable, whether or not the claim for such
interest is allowed as a claim in such Insolvency or Liquidation Proceeding. To
the extent any payment with respect to the Bank Claims (whether by or on behalf
of any PolyOne Entity, as proceeds of security, enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential in any
respect, set aside or required to be paid to a debtor in possession, trustee,
receiver or similar Person, then the obligation or part thereof
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originally intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment had not occurred.
"Bank Collateral" has the meaning given to "Collateral" in the Bank
Agreement.
"Bank Collateral Documents" has the meaning given to "Collateral
Documents" in the Bank Agreement.
"Bank Documents" shall mean the Bank Agreement, the Bank Collateral
Documents, the Existing Indebtedness Agreements, all other documents evidencing
or creating any Bank Claims, and all documents and instruments delivered in
connection with or pursuant thereto or under which an Adverse Claim is granted
or purported to be granted as security for any of the Bank Claims or under which
rights or remedies with respect to any of the foregoing are governed, as any
such document or instrument may from time to time be amended, renewed, restated,
supplemented or otherwise modified. Bank Documents shall include any interim and
final orders, agreements and arrangements relating to use of cash collateral of
the Banks in any Insolvency or Liquidation Proceeding. Notwithstanding anything
contained herein, Bank Documents shall not include any Subject Agreement.
"Bank Security Agreement" has the meaning given to such term in the
Preliminary Statements hereto.
"Bank Transaction Documents" has the meaning given to "Transaction
Documents" in the Bank Agreement.
"Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C.
Sections 101 et seq., as amended.
"Banks" means the Collateral Trustee, the Beneficiaries (as defined in
the Bank Agreement) and each other holder of a Bank Claim.
"Beneficiaries" has the meaning given to such term in the Preliminary
Statements hereto.
"Collateral Trust Agreement" has the meaning given to such term in the
Preliminary Statements hereto.
"Collateral Trustee" shall mean U.S. Bank Trust National Association,
in its capacity as the collateral trustee appointed pursuant to the Collateral
Trust Agreement, and in addition shall include any successor thereto exercising
substantially the same rights and powers.
"Collection Account" means each concentration account, depository
account, lock-box account or similar account in which any Collections are
collected or deposited and which are set forth on Schedule A hereto or have
otherwise been identified to and consented to by the Collateral Trustee or the
Bank Agent as a "Collection Account."
"Collections" means, with respect to any Pool Receivable, all cash
collections and other cash proceeds of such Pool Receivable, including, without
limitation, (i) all cash proceeds of the Related Security with respect to such
Pool Receivable and (ii) any Collections of such Pool Receivable deemed to have
been received, and actually paid, pursuant to Section 2.09(a) of the Receivables
Purchase Agreement.
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"Contract" means an agreement between any Originator and an Obligor in
any written form acceptable to such Originator, or in the case of any open
account agreement as evidenced by one of the forms of invoices set forth on
Schedule IV to the Receivables Purchase Agreement or otherwise approved by the
Receivables Agent from time to time (which approval shall not be unreasonably
withheld), pursuant to or under which such Obligor shall be obligated to pay for
goods or services from time to time.
"Enforcement" means, collectively or individually, for (i) the
Receivables Agent to declare an Event of Termination to have occurred under the
Receivables Documents (or upon the automatic occurrence of an Event of
Termination under the Receivables Documents) and to terminate (or upon the
automatic termination of) the Commitments (as defined in the Receivables
Purchase Agreement); and/or (ii) the Banks, the Bank Agent and/or a Collateral
Trustee to demand payment in full of or to accelerate the indebtedness of
PolyOne to the Banks under the Bank Documents.
"Event of Default" has the meaning given to such term in the Bank
Agreement.
"Event of Termination" has the meaning given to such term in the
Receivables Purchase Agreement.
"Existing Indebtedness Agreements" has the meaning given to such term
in the Preliminary Statements hereto.
"Existing Intercreditor Agreement" has the meaning given to such term
in the Preliminary Statements hereto.
"Geon" has the meaning given to such term in the Preliminary
Statements hereto.
"Geon Debentures" has the meaning given to such term in the
Preliminary Statements hereto.
"Geon Indenture" has the meaning given to such term in the Preliminary
Statements hereto.
"Guaranteed Obligations" has the meaning given to such term in the
Bank Agreement.
"Insolvency or Liquidation Proceeding" shall mean, with respect to any
Person (a) any voluntary or involuntary case or proceeding under the Bankruptcy
Code with respect to such Person, (b) any other voluntary or involuntary
insolvency, reorganization or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding or
with respect to such Person's assets, (c) any liquidation, dissolution,
reorganization or winding up of such Person whether voluntary or involuntary and
whether or not involving insolvency or bankruptcy or (d) any assignment for the
benefit of creditors or any other marshaling of assets and liabilities of such
Person.
"Lock-Box" means each locked postal box with respect to which a bank
who holds a Collection Account has been granted exclusive access for the purpose
of retrieving and processing payments made on the Pool Receivables.
"Obligor" means a Person obligated to make payments pursuant to a
Contract.
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"Originator" means each of the PolyOne Entities in its capacity as an
"Originator" (as defined in the Receivables Sale Agreement) and each other
subsidiary of PolyOne that becomes an "Originator" under the Receivables Sale
Agreement.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"PolyOne Entity" means PolyOne and each other subsidiary of PolyOne
that has any obligation to any party under either the Receivables Documents or
the Bank Documents, other than PolyOne Funding.
"PolyOne Funding Claim" means all obligations of the PolyOne Entities
to PolyOne Funding arising either directly or indirectly under the Receivables
Documents, including, but not limited to, all rights of PolyOne Funding to
receive the Collections of the Receivables, all recourse claims of PolyOne
Funding under the Receivables Documents, all reimbursement and indemnity claims
of PolyOne Funding under the Receivables Documents and any costs of collection
or enforcement. "PolyOne Funding Claims" shall include all interest and other
amounts accrued or accruing (or which would, absent the commencement of an
Insolvency or Liquidation Proceeding of any PolyOne Entity, accrue) after the
commencement of an Insolvency or Liquidation Proceeding of any PolyOne Entity in
accordance with and at the rate specified in the Receivables Sale Agreement
whether or not the claim for such interest or other amounts is allowed as a
claim in such Insolvency or Liquidation Proceeding. To the extent any payment
with respect to the PolyOne Funding Claims (whether by or on behalf of any
PolyOne Entity, as proceeds of security, enforcement of any right of setoff or
otherwise) is declared to be fraudulent or preferential in any respect, set
aside or required to be paid to a debtor in possession, trustee, receiver or
similar Person, then the obligation or part thereof originally intended to be
satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred.
"Pool Receivable" means any Receivable in respect of which the Obligor
is a Designated Obligor (as defined in the Receivables Purchase Agreement) or,
as to any Receivable in existence on such date, was a Designated Obligor on the
date of the initial creation of an interest in such Receivable under the
Receivables Purchase Agreement.
"Post-Default Property" means all (i) now owned or hereafter existing
Receivables of any PolyOne Entity or PolyOne Funding, (ii) the Related Security
and all cash collections and other cash proceeds of such Receivable, including,
without limitation, all cash proceeds of the Related Security with respect to
such Receivable, (iii) the Lock-Boxes and the Collection Accounts and (iv) all
proceeds of any of the foregoing, in each case generated after an Event of
Termination or an Event of Default; provided, however, that "Post-Default
Property" shall not include proceeds of inventory that is Bank Collateral
realized by the Banks or a Collateral Trustee or the Bank Agent pursuant to a
foreclosure action following Enforcement under a Bank Document.
"Purchasers" has the meaning given to it in the recitals to this
Agreement.
"Purchase Termination Date" means the date on which conveyances of
Receivables (or interests therein) terminate under the terms of the Receivables
Sale Agreement.
"Purchased Property" means (i) now owned or hereafter existing
Purchased Receivables, (ii) the Related Security and Collections related to such
Purchased Receivables, (iii) the Lock-Boxes and the Collection Accounts, and
(iv) all proceeds of any of the foregoing.
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"Purchased Receivables" means all Receivables sold or conveyed (or
purported to have been sold or conveyed) by any PolyOne Entity to PolyOne
Funding under the Receivables Sale Agreement, including, without limitation, all
Receivables arising from time to time on or prior to the Purchase Termination
Date.
"Purchaser Claim" shall mean all obligations outstanding under one or
more of the Receivables Documents and all extensions of credit under any
financing by one or more Purchasers under section 364 of the Bankruptcy Code or
any arrangement for use of cash collateral of the Purchasers under section 363
of the Bankruptcy Code (the terms of which are consented to by the Receivables
Agent in its capacity as such). "Receivables Claims" shall include all yield
accrued or accruing (or which would, absent the commencement of an Insolvency or
Liquidation Proceeding, accrue) after the commencement of an Insolvency or
Liquidation Proceeding in accordance with and at the rate specified in the
Receivables Purchase Agreement whether or not the claim for such yield is
allowed as a claim in such Insolvency or Liquidation Proceeding. To the extent
any payment with respect to the Purchaser Claims (whether by or on behalf of any
PolyOne Entity, as proceeds of security, enforcement of any right of setoff or
otherwise) is declared to be fraudulent or preferential in any respect, set
aside or required to be paid to a debtor in possession, trustee, receiver or
similar Person, then the obligation or part thereof originally intended to be
satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred.
"Receivable" means the indebtedness (whether constituting accounts or
general intangibles or chattel paper or otherwise) of any Obligor under a
Contract, and includes the right to payment of any interest or finance charges
and other obligations of such Obligor with respect thereto.
"Receivables Agent" shall mean Citicorp USA, Inc., in its capacity as
the administrative agent under the Receivables Purchase Agreement, and in
addition shall include the then acting administrative agent for the Purchasers
(or if there is more than one administrative agent under the Receivables
Purchase Agreement, a majority of them) and any successor thereto exercising
substantially the same rights and powers, or if there is no acting
administrative agent under the Receivables Purchase Agreement, the Required
Purchasers (as defined in the Receivables Purchase Agreement).
"Receivables Documents" means the Receivables Purchase Agreement, the
Receivables Sale Agreement, and any other instruments, documents or agreements
executed by (i) any PolyOne Entity and delivered to PolyOne Funding, or (ii)
PolyOne Funding and delivered to the Purchasers or the Receivables Agent, in
each case pursuant to or in connection with the purchase and sale transactions
contemplated therein, as any of the same may be amended, supplemented, modified
or restated from time to time. Receivables Documents shall include any interim
and final orders, agreements and arrangements relating to use of cash collateral
of the Receivables Agent or the Purchasers in any Insolvency or Liquidation
Proceeding.
"Receivables Purchase Agreement" means that receivables purchase
agreement dated as of May 6, 2003 among PolyOne Funding, PolyOne, as servicer,
the financial institutions parties thereto as purchasers and issuing banks (the
"Purchasers") and the Receivables Agent, as agent for the Purchasers as amended,
restated, supplemented or otherwise modified from time to time at the option of
the parties thereto, together with any other agreements pursuant to which any of
the indebtedness, commitments, obligations, costs, expenses, fees,
reimbursements and other indemnities payable or owing thereunder may be
refinanced, restructured, renewed, extended, refunded or replaced (as any such
other agreements may from time to time at the option of the parties thereto be
amended, amended and restated, supplemented, renewed or otherwise modified).
"Receivables Sale Agreement" means that receivables sale agreement
dated as of May 6, 2003 among each of the Originators, as sellers and PolyOne
Funding, as buyer, as amended, restated,
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supplemented or otherwise modified from time to time at the option of the
parties thereto, together with any other agreements pursuant to which any of the
indebtedness, commitments, obligations, costs, expenses, fees, reimbursements
and other indemnities payable or owing thereunder may be refinanced,
restructured, renewed, extended, refunded or replaced (as any such other
agreements may from time to time at the option of the parties thereto be
amended, amended and restated, supplemented, renewed or otherwise modified).
"Records" means, with respect to any Receivable, all Contracts and
other documents, books, records and other information (including, without
limitation, computer programs, tapes, discs, punch cards, data processing
software and related property and rights) relating to such Receivable and the
related Obligor.
"Related Security" means with respect to any Receivable:
(i) all of PolyOne Funding's interest in the goods (including, after
an Event of Default or an Event of Termination, all Returned Goods), if
any, relating to the sale which gave rise to such Receivable;
(ii) all other security interests or liens and property subject
thereto from time to time purporting to secure payment of such Receivable,
whether pursuant to the Contract related to such Receivable or otherwise,
together with all financing statements signed or authenticated by an
Obligor describing any collateral securing such Receivable;
(iii) all letter of credit rights, guarantees, insurance and other
agreements or arrangements of whatever character from time to time
supporting or securing payment or settlement of such Receivable, whether
pursuant to the Contract related to such Receivable or otherwise;
(iv) all Records relating to such Receivable; and
(v) all of PolyOne Funding's right, title and interest in and to the
following: the Receivables Sale Agreement, including, without limitation,
(i) all rights to receive moneys due and to become due under or pursuant to
the Receivables Sale Agreement, (ii) all rights to receive proceeds of any
indemnity, warranty or guaranty with respect to the Receivables Sale
Agreement, (iii) claims for damages arising out of or for breach of or
default under the Receivables Sale Agreement, and (iv) the right to perform
under the Receivables Sale Agreement and to compel performance and
otherwise exercise all remedies thereunder, and
(vi) all proceeds of any and all of the foregoing (including, without
limitation, proceeds which constitute property of the types described in
clause (v)).
"Required Representatives" has the meaning given to such term in the
Collateral Trust Agreement.
"Returned Goods" means all right, title and interest of any Originator
(or PolyOne Funding and/or the Purchasers, as applicable) in and to returned,
repossessed or foreclosed goods and/or merchandise the sale, transfer and/or
delivery of which has given rise to any Purchased Receivable.
"Shared Collateral Documents" has the meaning given to such term in
the Preliminary Statements hereto.
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"Subordinated Notes" means those certain Subordinated Notes dated as
of May 6, 2003 evidencing the obligation of PolyOne Funding to pay the
Originators the sums described therein pursuant to the terms thereof, as the
same may be amended, restated, supplemented, replaced or refinanced or otherwise
modified from time to time.
"Successor Collateral Document" has the meaning given to such term in
the Collateral Trust Agreement.
"Sunbelt Guarantee" has the meaning given to such term in the
Preliminary Statements hereto.
"Sunbelt Notes" has the meaning given to such term in the Preliminary
Statements hereto.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the applicable jurisdiction.
"Unsold Receivables" means any Receivables other than Purchased
Receivables. As of the date of this Agreement there are no Unsold Receivables.
"2002 PolyOne Indenture" has the meaning given to such term in the
Preliminary Statements hereto.
"2002 PolyOne Notes" has the meaning given to such term in the
Preliminary Statements hereto.
"2003 PolyOne Indenture" has the meaning given to such term in the
Preliminary Statements hereto.
"2003 PolyOne Notes" has the meaning given to such term in the
Preliminary Statements hereto.
ARTICLE II.
INTERCREDITOR PROVISIONS.
2.1. Purchased Property.
(a) Subject to Section 2.13(e) below, irrespective of the time, order,
manner or method of creation, attachment or perfection of the respective
security interests and/or liens granted to the Receivables Agent or the
Collateral Trustee in or on any or all of the property or assets of a PolyOne
Entity or PolyOne Funding, the time or manner of the filing of their respective
financing statements, whether the Receivables Agent or the Collateral Trustee or
any bailee or agent thereof holds possession of any or all of the property or
assets of the PolyOne Entities or PolyOne Funding, the dating, execution or
delivery of any agreement, document or instrument granting the Receivables
Agent, the Bank Agent or the Collateral Trustee security interests and/or liens
in or on any or all of the property or assets of the PolyOne Entities or PolyOne
Funding, the giving or failure to give notice of the acquisition or expected
acquisition of any purchase money or other security interests, any provision of
the Bank Documents or the Receivables Documents and any provision of the UCC or
any other applicable law to the contrary, the Receivables Agent, on the one hand
and the Bank Agent and the Collateral Trustee, on the other hand, hereby
acknowledge and agree that:
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(i) neither the Collateral Trustee, the Bank Agent nor any Bank shall
at any time ask, demand, sue for, take, hold or receive from PolyOne
Funding or any Originator any Adverse Claim in, to or against any of the
Purchased Property;
(ii) to the extent that the Collateral Trustee, the Bank Agent or any
Bank now has or hereafter obtains any Adverse Claim in, to or against any
of the Purchased Property, such Adverse Claim is hereby released, waived
and terminated;
(iii) if any Purchased Property shall be created or arise upon the
sale, purported sale, assignment or other transfer by any Originator of any
Bank Collateral (or any asset or interest in property shall otherwise
become Purchased Property), any Adverse Claim in favor of the Collateral
Trustee, the Bank Agent or any Bank that would otherwise then exist or
arise in respect of such Purchased Property shall immediately thereupon,
automatically and without any further action on the part of any Person,
cease to exist and be released and extinguished, with the effect that at no
time shall the Collateral Trustee, the Bank Agent or any Bank have any
Adverse Claim in such Purchased Property;
(iv) the Bank Agent and the Collateral Trustee each agrees that: (A)
it shall not have any security interest in, lien upon or interest in any
Post-Default Property, (B) none of them shall at any time ask, demand, sue
for, take or receive from any PolyOne Entity any Adverse Claim in, to or
against any Post Default Property and (C) to the extent that the Bank Agent
or the Collateral Trustee now has any Adverse Claim in, to or against any
Post-Default Property, such Adverse Claim is hereby released, waived and
terminated; and
(v) except for their interests from time to time existing in the
Purchased Property and rights of access to and use of Bank Collateral
pursuant to Section 2.4, the Receivables Agent agrees that: (A) it does not
have and shall not have any security interest in, lien upon or interest in
the Bank Collateral, (B) it shall not at any time ask, demand, sue for,
take or receive from any PolyOne Entity any Adverse Claim in, to or against
any of the Bank Collateral and (C) to the extent that the Receivables Agent
or any Purchaser now has any Adverse Claim in, to or against any of the
Bank Collateral, such Adverse Claim is hereby released, waived and
terminated.
(b) Nothing in this Section 2.1 shall be deemed to constitute a
release by any the Bank Agent or the Collateral Trustee of:
(i) any lien, claim, encumbrance or security interest the Collateral
Trustee, the Bank Agent or any other Bank may have in the proceeds received
by any Originator from PolyOne Funding for the sale of any of the Purchased
Receivables or Related Security to PolyOne Funding, including, without
limitation, cash payments made by PolyOne Funding under the Receivables
Sale Agreement or under any Subordinated Note;
(ii) any lien or security interest the Collateral Trustee, the Bank
Agent or any other Bank may have in "inventory" (as defined in the UCC) of
PolyOne at any time prior to the release and extinguishment thereof
pursuant to Section 2.1(a)(iii) above;
(iii) any lien, claim, encumbrance or security interest the Collateral
Trustee, any Bank Agent or any other Bank may have in any Unsold
Receivables and Related Security with respect to such Unsold Receivables,
including, without limitation, Collections of Unsold Receivables which are
at any time deposited in any Collection Account; or
10
(iv) any lien, claim, encumbrance or security interest the Collateral
Trustee, the Bank Agent or any other Bank may have against any interest of
any Originator in Returned Goods which reattaches from and after the
repurchase by an Originator from PolyOne Funding of any Receivables that
shall have arisen upon the initial sale, assignment or other transfer of
such Returned Goods to the applicable Obligor. If any goods of any
Originator, the sale of which has given rise to a Purchased Receivable, are
returned to or repossessed by such Originator, then, (x) all rights to such
Returned Goods shall belong to PolyOne Funding and the Purchasers until
payment by such Originator of all adjustments required on account thereof
under the Receivables Sale Agreement and (y) upon payment by such
Originator of such adjustments, PolyOne Funding's and the Purchasers'
interest in such Returned Goods shall automatically and without further
action cease to exist and be released and extinguished and such Returned
Goods shall thereafter not constitute Purchased Property for purposes of
this Agreement unless and until such Returned Goods have been resold so as
to give rise to a new Receivable.
(c) In the event that the Collateral Trustee, the Bank Agent or any
Bank shall at any time have any Adverse Claim, directly or indirectly, on or in
respect of, or shall come to hold or own any other interest in, any capital
stock or other equity interest in PolyOne Funding, the parties hereto agree that
(i) neither the Collateral Trustee nor the Bank Agent nor such Bank shall
transfer, assign, pledge or sell its interests in the capital stock or other
equity interest in PolyOne Funding without the prior written consent of the
Receivables Agent and (ii) neither the Collateral Trustee nor the Bank Agent nor
such Bank shall cause or consent to (A) any amendment or other modification to
the articles of incorporation, by-laws or other constitutional documents of
PolyOne Funding without the prior written consent of the Receivables Agent or
(B) any failure of PolyOne Funding to perform or comply with any of the
covenants of PolyOne Funding under the Receivables Documents.
(d) The Bank Agent and the Collateral Trustee hereby acknowledges that
the Subordinated Notes are subordinated to the prior payment in full of the
Purchaser Claims as provided in the Subordinated Notes.
(e) The provisions of this Section 2.1 shall be deemed to constitute
subordination agreements within the meaning of Section 510(a) of the Bankruptcy
Code.
2.2. Returned Goods. Each PolyOne Entity acknowledges and agrees that
following an Event of Default or an Event of Termination, Returned Goods shall
not be commingled with any inventory of PolyOne. If any inventory of PolyOne has
been commingled with Returned Goods in which PolyOne Funding or any Purchaser
continues to have an interest, and the Collateral Trustee, the Bank Agent or any
other Bank receives any proceeds on account of such inventory (whether by reason
of sale or by reason of insurance payments on account thereof) prior to release
of such interest of the Purchaser, then all proceeds of such inventory received
by any Bank shall be paid to the Collateral Trustee and the Collateral Trustee
shall, immediately upon receipt of such proceeds, pay to the Receivables Agent
the proceeds of which are allocable to such Returned Goods for application
against the PolyOne Funding Claim. Proceeds with respect to Returned Goods and
other inventory shall be allocated, if necessary, based on the respective book
values of such Returned Goods and other inventory and paid to the Receivables
Agent and the Bank Agent or the Collateral Trustee accordingly.
2.3. Proceeds of Purchased Property; Collections, Collection Accounts.
(a) Each Originator, on the one hand and the Bank Agent and the
Collateral Trustee, on the other hand, hereby agree that all Collections or
other proceeds received on account of Purchased Property (including, without
limitation, any Collections thereof of any type received directly by any
Originator or deposited into any bank account of such Originator over which the
Collateral Trustee, the
11
Bank Agent or any Bank has control) shall be paid or delivered to PolyOne
Funding (or, if so notified in writing by the Receivables Agent, to the
Receivables Agent) for application against the PolyOne Funding Claims.
(b) For purposes of determining whether specific Collections have been
received on account of Purchased Property or on account of Unsold Receivables,
the parties hereto agree as follows:
(i) All payments made by an Obligor which is obligated to make
payments on Purchased Receivables but is not obligated to make any payments
on Unsold Receivables shall be conclusively presumed to be payments on
account of Purchased Receivables, and all payments made by an Obligor which
is obligated to make payments on Unsold Receivables but is not obligated to
make any payments on Purchased Receivables shall be conclusively presumed
to be payments on account of Unsold Receivables.
(ii) All payments made by an Obligor which is obligated to make
payments with respect to both Purchased Receivables and Unsold Receivables
shall be applied against the specific Receivables, if any, which are
designated by such Obligor by reference to the applicable invoice as the
Receivables with respect to which such payments should be applied. In the
absence of such designation, such payments shall be applied against the
oldest outstanding Receivables or portion thereof owed by such Obligor to
the extent such oldest Receivable or portion thereof is not in dispute. The
parties hereto hereby acknowledge that no liens, claims, encumbrances or
security interests described in Section 2.1(b)(i), (b)(iii) or (b)(iv)
exist as of the date of this Agreement.
(c) Subject to the terms and conditions of this Section 2.3, the
Receivables Agent agrees that, if the Collateral Trustee or the Bank Agent so
requests from and after the earliest to occur of (i) the date the Purchaser
Claims have been satisfied in full in cash and the Receivables Documents
terminated, and (ii) the date on which all Purchased Property has been collected
and/or written off as uncollectible and the Receivables Documents terminated,
the Receivables Agent and the Purchasers shall (x) transfer ownership and
control to the Collateral Trustee over any Collection Accounts into which
Collections of Unsold Receivables have been or may be deposited and (y) to the
extent consistent with applicable documentation, instruct the financial
institutions maintaining such Collection Accounts to thereafter follow the
instructions of the Collateral Trustee with respect to such Collection Accounts.
Any such transfer shall be without representation, recourse or warranty of any
kind on the part of the Receivables Agent or any Purchaser. Notwithstanding the
foregoing, if any such transfer occurs prior to the date on which the Purchaser
Claim has been satisfied in full, then (1) all Collections or other proceeds
received on account of Purchased Property subsequently deposited into any
Collection Account shall be delivered to the Receivables Agent for application
as provided in Sections 2.3(a) and 2.3(b) and (2) the Collateral Trustee shall,
if the Receivables Agent so requests, (A) notify any financial institution
maintaining a Collection Account of the Receivables Agent's continuing interest,
if any, in any Collections or other proceeds of Purchased Property which may be
deposited in such Collection Accounts as may be reasonably necessary to maintain
the Receivables Agent's interest in such assets, (B) execute a control agreement
in form and substance reasonably necessary to maintain the Receivables Agent's
perfected interest in the Collection Accounts and (C) perform all other actions
reasonably requested by the Receivables Agent to maintain the Receivables
Agent's perfected interest in the Collections or other proceeds of Purchased
Property which may be deposited in such Collection Accounts.
2.4. Access to and Use of Collateral.
(a) At any time prior to the date on which the Collateral Trustee or
the Bank Agent shall acquire title to, or possession and control of, any
premises of PolyOne, the Bank Agent and the
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Collateral Trustee hereby agrees that the Receivables Agent and the Purchasers,
subject to any applicable restrictions in the Receivables Documents, may enter
such premises (whether prior to, during or following any Enforcement by the
Collateral Trustee, the Bank Agent or any Bank in respect of any Bank
Collateral), whether leased or owned, at any time during reasonable business
hours, without force or process of law and without obligation to pay rent or
compensation to PolyOne, the Collateral Trustee, the Bank Agent or any Bank or
any other Person, and may use any Bank Collateral constituting equipment located
thereon and may have access to and use of all Records located thereon and may
have access to and use of any other property to which such access and use are
granted under the Receivables Documents, in each case provided that such use is
for the purposes of enforcing the Purchasers' rights with respect to the
Purchased Property. In order to facilitate the purposes of this Section 2.4, the
Collateral Trustee and the Bank Agent hereby agrees that any mortgage of,
assignment of, security interest in or lien upon any real property and interests
in real property of PolyOne (whether leased or owned) and any of the Bank
Collateral in favor of the Collateral Trustee, the Bank Agent or the Banks shall
be subject to the Purchasers' rights of access and use described above.
(b) In the event that the Collateral Trustee or the Bank Agent shall
acquire title to, or possession and control of, any of the premises of PolyOne,
whether through foreclosure, deed in lieu, or otherwise, the Collateral Trustee
and the Bank Agent agrees that if Enforcement has occurred and is continuing
and, as a result, the Receivables Agent or the Purchasers undertake to enforce
their rights in the Purchased Property, such Collateral Trustee and the Bank
Agent will, at the cost and reasonable expense of the Purchasers, cooperate with
the Receivables Agent and the Purchasers in their efforts to assemble all of the
Purchased Property located on such Bank Collateral and will permit the
Receivables Agent and the Purchasers (at the cost, reasonable expense and
liability of the Purchasers, including any current rent payable to lessors of
leased Bank Collateral used or occupied by the Purchasers) to enter and use the
Bank Collateral constituting equipment located thereon and may have access to
and use of all Records located thereon and may have access to and use of any
other property to which such access and use are granted under the Receivables
Documents, in each case provided that such use is for the purposes of enforcing
the Purchasers' rights with respect to the Purchased Property, within a
reasonable time not to exceed 30 Business Days after the earlier to occur of (i)
delivery by the Receivables Agent of notice to the Collateral Trustee of its
election to utilize the Bank Collateral as set forth in this sentence (or in
connection with the order of any court or other governmental authority requiring
such utilization) or (ii) delivery by a Collateral Trustee or the Bank Agent of
notice to the Receivables Agent that it has located a bona fide purchaser for
all or any portion of the Bank Collateral.
(c) If the Collateral Trustee or the Bank Agent shall locate a bona
fide purchaser for any parcel of such Bank Collateral and/or all or a
substantial part of the remaining Bank Collateral, as the case may be, at any
location, such Collateral Trustee or the Bank Agent shall send a written notice
to the Receivables Agent identifying the purchaser, the proposed sales price and
the proposed closing date.
(d) The Receivables Agent and Purchasers may, at their option,
continue to occupy or use the Bank Collateral at any particular location for up
to 30 days or such longer period of time agreed to by the Collateral Trustee or
the Bank Agent; provided, however, that if such continued occupancy or use
delays the proposed closing date for any sale, the Purchasers shall pay to the
Collateral Trustee, as rent, an amount equal to 12% per annum (based on a
360-day year of 12 months) of the fair market value (determined by a firm (i)
which does not, and whose directors, officers or affiliates do not, have a
material financial interest in any of the parties hereto and (ii) which in the
reasonable judgment of the Receivables Agent and the Collateral Trustee is
otherwise independent and qualified to determine such value) of such Bank
Collateral for the number of days that the proposed closing date is delayed.
2.5. Notice of Defaults and Enforcements; Enforcement Actions.
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(a) The Bank Agent agrees to use reasonable efforts to give to the
Receivables Agent copies of any notice sent to PolyOne or any Originator with
respect to the occurrence or existence of any Event of Default or Enforcement
under the Bank Documents, and the Receivables Agent agrees to use reasonable
efforts to give to the Bank Agent copies of any notice sent to any Originator or
PolyOne Funding with respect to the occurrence or existence of any Event of
Termination or Enforcement under the Receivables Documents, in each case
simultaneously with the sending of such notice to PolyOne, any Originator or
PolyOne Funding as applicable; provided, however, that any failure to give such
notice shall not create a cause of action against any party failing to give such
notice or create any claim or right on behalf of any third party. In each of the
above cases with respect to Events of Default under the Bank Agreement and
Events of Termination under the Receivables Purchase Agreement only, the Agent
receiving such notice shall have the right (but not the obligation) to cure the
default which gave rise to the sending of such notice.
(b) The parties hereto agree that after any Enforcement (i) subject to
any applicable restrictions in the Receivables Documents or this Agreement, the
Receivables Agent may, at its option and without the prior consent of any
Originator, the Collateral Trustee, the Bank Agent or the other Banks, take any
action to liquidate the Purchasers' investment in the Purchased Property and/or
to foreclose or realize upon or enforce any of the Purchasers' rights with
respect to the Purchased Property and (ii) subject to any applicable
restrictions in the Bank Documents or this Agreement, the Collateral Trustee or
the Bank Agent may, at its option and without the prior consent of the
Purchasers, take any action to foreclose or realize or enforce any of its rights
with respect to the Bank Collateral.
2.6. Agency for Perfection; Turnover of Proceeds of Collateral.
(a) Each of (i) PolyOne Funding, (ii) the Receivables Agent, and (iii)
the Collateral Trustee and the Bank Agent, hereby appoints each of the others as
agent for purposes of perfecting by possession its respective security interests
and ownership interests and liens on the Purchased Property and the Bank
Collateral (including, without limitation, the Bank Collateral described in
Section 2.1(b)), as applicable, described hereunder.
(b) In the event that any payment or distribution to the Receivables
Agent (other than as permitted by the terms of the Bank Agreement) is made from
any of the Bank Collateral upon or with respect to the PolyOne Funding Claim
and/or Purchaser Claim or the Receivables Agent or any Purchaser obtains
possession of any of the Bank Collateral prior to the time all of the Bank
Claims shall have been paid in full in cash and all financing arrangements and
commitments pursuant to the Bank Documents shall have been terminated, the
Receivables Agent shall receive and hold the same in trust, for the benefit of
the Collateral Trustee and the Banks and shall forthwith deliver the same to the
Collateral Trustee in precisely the form received (except for the endorsement or
assignment of the Receivables Agent where necessary) for application against the
Bank Claims, whether due or not due, and, until so delivered, the same shall be
held in trust by the Receivables Agent as the property of the Collateral
Trustee, for itself and the Banks.
(c) In the event that any payment or distribution to any Bank or the
Collateral Trustee or the Bank Agent is made from any of the Purchased Property
upon or with respect to any of the Bank Claims or the Collateral Trustee, the
Bank Agent or any Bank obtains possession of any of the Purchased Property prior
to the time all of the PolyOne Funding Claims and the Purchaser Claims shall
have been paid in full in cash and all of the Receivables Documents shall have
been terminated, such Bank, the Collateral Trustee or the Bank Agent, as the
case may be, shall receive and hold the same, for the benefit of the Receivables
Agent and the Purchasers and shall forthwith deliver the same to the Receivables
Agent in precisely the form received (except for the endorsement or assignment
of such Collateral Trustee, the Bank Agent and/or such Bank where necessary) for
application against the
14
PolyOne Funding Claims and/or Purchaser Claims, whether due or not due, and,
until so delivered, the same shall be held by such Collateral Trustee, the Bank
Agent or such Bank as the property of the Receivables Agent, for itself and the
Purchasers.
2.7. Independent Investigations. Neither the Purchasers nor the Banks,
nor any of their respective directors, officers, agents or employees, shall be
responsible to the other or to any other Person, firm or corporation for the
solvency, financial condition or ability of any Originator or PolyOne Funding to
repay the PolyOne Funding Claims or the Bank Claims, or for the worth of the
Purchased Property or the Bank Collateral, or for statements of any Originator
or PolyOne Funding, oral or written, or for the validity, sufficiency or
enforceability of the PolyOne Funding Claim, the Bank Claims, the Receivables
Documents, the Bank Documents, the Purchasers' interest in the Purchased
Property or the Banks' interest in the Bank Collateral. Each of the Banks and
the Purchasers have entered into its respective financing agreements with the
Originators and/or PolyOne Funding, as applicable, based upon its own
independent investigation, and makes no warranty or representation to any of the
others, nor does it rely upon any representation of any of the others with
respect to matters identified or referred to in this Section 2.7.
2.8. Limitation on Obligations and Liability of Parties to Each Other.
Except as provided in this Agreement, no Collateral Trustee, nor the Bank Agent
nor any Bank shall owe any duty or have any liability to the Receivables Agent
or the Purchasers, and the Receivables Agent and the Purchasers shall owe no
duties and have no liability to the Collateral Trustee, the Bank Agent or the
Banks, except for liability arising from the gross negligence or willful
misconduct of such party.
2.9. Amendments to Financing Arrangements or to this Agreement. The
Bank Agent agrees that it shall not, and shall not direct the Collateral Trustee
to, amend any of the Bank Documents and the Receivables Agent agrees not to
amend the Receivables Documents, in each case so as to materially adversely
alter the rights and benefits intended hereunder to be enjoyed by the respective
Agents, the Banks and the Purchasers. Each party hereto shall, upon request of
any other party hereto, provide copies of all such modifications or amendments
and copies of all other documentation relevant to the Purchased Property or the
Bank Collateral. All modifications or amendments of this Agreement must be in
writing and duly executed by an authorized officer of the Collateral Trustee,
the Bank Agent and the Receivables Agent to be binding and enforceable.
2.10. Authority. The Receivables Agent hereby represents and warrants
that it has the authority to enter into this Agreement for and on behalf of the
Purchasers as agent for the Purchasers. The Receivables Agent hereby agrees that
the Collateral Trustee, the Bank Agent and the Banks shall be entitled to rely
on the power and authority of the Receivables Agent to act on behalf of all of
the Purchasers. Each of the Collateral Trustee and the Bank Agent hereby
represents and warrants that it has the authority to enter into this Agreement
for and on behalf of the Banks as trustee ( in the case of the Collateral
Trustee) and as agent (in the case of the Bank Agent) for the Banks. The Bank
Agent hereby agrees that the Receivables Agent and the Purchasers shall be
entitled to rely on the power and authority of such Collateral Trustee and the
Bank Agent to act on behalf of all of the Banks.
2.11. Effect Upon Credit Documents and Receivables Documents. Each of
PolyOne Funding and the Originators acknowledges that the provisions of this
Agreement shall not give PolyOne Funding or any Originator any substantive
rights as against the Collateral Trustee, the Bank Agent or the Banks or as
against the Receivables Agent or the Purchasers and that nothing in this
Agreement shall amend, modify, change or supersede the terms of (a) the Bank
Documents as among the PolyOne Entities, the Collateral Trustee, the Bank Agent
and the Banks, (ii) the Receivables Documents as among the Originators and
PolyOne Funding, or (iii) the Receivables Documents as among PolyOne Funding,
PolyOne, the Purchasers and the Receivables Agent. Notwithstanding the
foregoing, each Agent hereby
15
agrees, that, to the extent the terms and provisions of the Bank Documents or
the Receivables Documents are inconsistent with the terms and provisions of this
Agreement, the terms and provisions of this Agreement shall control.
2.12. Further Assurances. Each Agent agrees to take such actions as
may be reasonably requested by the other Agent, whether before, during or after
an Enforcement, in order to give effect to the terms and provisions of this
Agreement.
2.13. Bankruptcy Petition and Substantive Consolidation.
(a) Each party hereto hereby covenants and agrees that, prior to the
date which is one year and one day after the payment in full of all outstanding
senior indebtedness of PolyOne Funding, it will not institute against, or join
any other Person in instituting against, PolyOne Funding any Insolvency or
Liquidation Proceedings under the laws of the United States or any state of the
United States.
(b) In the event of any Insolvency or Liquidation Proceedings under
the laws of the United States or any state of the United States involving any
Originator or any subsidiary or affiliate of any Originator (including, but not
limited to, PolyOne Funding), each of the Collateral Trustee and the Bank Agent
hereby covenants and agrees that it (i) will recognize the corporate
separateness of PolyOne Funding from PolyOne and the other subsidiaries and
affiliates of PolyOne and (ii) will not seek to consolidate PolyOne Funding (or
the assets and liabilities of PolyOne Funding) with PolyOne or any subsidiary or
affiliate of PolyOne.
(c) Each of the Collateral Trustee and the Bank Agent (i) acknowledges
and agrees that the Purchasers, PolyOne Funding and the Originators have entered
into the Receivables Documents on the understanding that the Originators have
irrevocably and absolutely conveyed to PolyOne Funding all of their right, title
and interest in and to the Purchased Property and have retained no beneficial or
equitable ownership interest therein and that PolyOne Funding has conveyed to
the Purchasers an undivided ownership interest in all of the Purchased Property
so conveyed, and (ii) covenants not to contest or support any other Person in
contesting, in any proceeding (including any Insolvency or Liquidation
Proceedings), the absolute characterization of such conveyances as set forth
above.
(d) The foregoing clauses (b) and (c) shall not limit the rights of
the Collateral Trustee, the Bank Agent and the Banks to file any claim or
otherwise take any action with respect to the Bank Collateral in any Insolvency
or Liquidation Proceedings that may be successfully instituted against PolyOne
Funding by any Person other than a Collateral Trustee, the Bank Agent and the
Banks.
2.14. UCC Notices. In the event that any party hereto shall be
required by the UCC or any other applicable law to give notice to any other
party hereunder of intended disposition of Purchased Property or Bank
Collateral, such notice shall be given in accordance with Section 4.1 and ten
(10) days' notice shall be deemed to be commercially reasonable.
2.15. Marshalling of Assets. Nothing in this Agreement will be deemed
to require any Agent (i) to proceed against certain property securing the
Purchaser Claims or the Bank Claims, as applicable, prior to proceeding against
other property securing such claim or (ii) to marshal the Purchased Property or
Bank Collateral, as applicable, upon the enforcement of such Agent's remedies
under the Receivables Documents or Bank Documents, as applicable.
ARTICLE III.
WAIVER; OTHER ASSETS.
16
3.1. Waiver.
(a) The Receivables Agent hereby waives any and all rights to bring
any action to contest the validity, legality, enforceability, perfection,
priority or avoidability of any of the Bank Claims, any of the Bank Documents or
any of the security interests and/or liens of the Collateral Trustee, the Bank
Agent or any Bank in or on any of the Bank Collateral.
(b) Each of the Collateral Trustee and the Bank Agent hereby waives
any and all rights to bring any action to contest the validity, legality,
enforceability, perfection, priority or avoidability of any of the PolyOne
Funding Claims or Purchaser Claims, any of the Receivables Documents or any of
the security interests and/or liens of the Receivables Agent in or on any of the
Purchased Property.
3.2. Subordinated Notes. Neither the Collateral Trustee, nor the Bank
Agent nor any Bank shall at any time take any pledge, assignment, or other
transfer of any Subordinated Note.
ARTICLE IV.
MISCELLANEOUS.
4.1. Notices. All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing (including
telecommunications and communication by facsimile copy) and mailed, transmitted
or delivered, as to each party hereto, at its address set forth under its name
on the signature pages hereof or at such other address as shall be designated by
such party in a written notice to the other parties hereto; provided, however,
that all notices to the Banks may be sent to the Bank Agent for distribution to
the Banks in accordance with the provisions of the Bank Documents and that all
notices to the Purchasers may be sent to the Receivables Agent for distribution
to the Purchasers in accordance with the provisions of the Receivables
Documents. All such notices and communications shall be effective upon receipt,
or, in the case of notice by mail, five days after being deposited in the mails,
postage prepaid, or in the case of notice by facsimile copy, when verbal
confirmation of receipt is obtained, in each case addressed as aforesaid.
4.2. Agreement Absolute.
(a) Each of the Purchasers and the Receivables Agent shall be deemed
to have entered into the Receivables Purchase Agreement in express reliance upon
this Agreement and to have agreed to the waiver contained in Article III above
in express reliance upon each of the other terms and provisions set forth in
this Agreement (including, without limitation, the provisions of Section 2.13
hereof) and the Bank Agent and the Beneficiaries shall be deemed to have entered
into the Bank Agreement in express reliance upon this Agreement.
(b) This Agreement shall be and remain absolute and unconditional
under any and all circumstances, and no acts or omissions on the part of any
party to this Agreement shall affect or impair the agreement of any party to
this Agreement, unless otherwise agreed to in writing by the Collateral Trustee,
the Bank Agent and the Receivables Agent.
(c) This Agreement shall be applicable both before and after the
filing of any petition by or against any Originator or PolyOne Funding under the
Bankruptcy Code and all references herein to an Originator or PolyOne Funding
shall be deemed to apply to a debtor-in-possession for such party and all
allocations of payments between the Collateral Trustee, the Bank Agent and the
Banks and the Receivables Agent and the Purchasers shall, subject to any court
order to the contrary, continue to be
17
made after the filing of such petition on the same basis that the payments were
to be applied prior to the date of the petition.
4.3. Additional Grantors. If any Subsidiary of PolyOne becomes an
"Originator" as defined in and under the Receivables Sale Agreement, PolyOne
shall cause any such Subsidiary to become a party hereto, and such Subsidiary
shall execute and deliver to the Agents a Joinder Agreement in the form of
Exhibit A hereto and shall thereafter for all purposes be a party hereto and
have the same rights, benefits and obligations as a party hereto on the date
hereof.
4.4. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of each of the parties hereto and their respective
successors and assigns. The successors and assigns for any Originator and/or
PolyOne Funding shall include a debtor-in-possession or trustee of or for such
party. The successors and assigns for the Agents shall include any successor
Agent appointed under the terms of the Bank Documents or the Receivables
Documents, as applicable. Each Agent, each Bank and each Purchaser agrees not to
transfer any interest it may have in the Bank Documents or the Receivables
Documents unless such transferee has been notified of the existence of this
Agreement and has agreed to be bound hereby.
4.5. Capacity. The parties hereto agree that the Collateral Trustee is
acting hereunder solely in its capacity as collateral trustee under the
Collateral Trust Agreement and not in its individual capacity.
4.6. Third-Party Beneficiaries. The terms and provisions of this
Agreement shall be for the sole benefit of the Agents, the Purchasers and the
Banks and their respective successors and assigns and no other Person shall have
any right, benefit, or priority by reason of this Agreement.
4.7. Governing Law. This agreement shall be governed by and construed
in accordance with the internal laws (and not the law of conflicts) of the State
of New York.
4.8. Jurisdiction.
(a) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or Federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State court or, to
the extent permitted by law, in such Federal court. Each of the parties hereto
hereby agrees that service of process in any such action or proceeding may be
effected by mailing a summons and complaint to it at its address as specified
hereto in Section 4.1 by registered mail, return receipt requested, or in any
other manner permitted by applicable law. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that any party
may otherwise have to bring any action or proceeding relating to this Agreement
in the courts of any other jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any action or proceeding
arising out of or relating to this Agreement in any New York State or Federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by
18
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
4.9. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY
PARTY HERETO PURSUANT TO THIS AGREEMENT OR ANY RELATIONSHIP ESTABLISHED
HEREUNDER OR THEREUNDER.
4.10. Section Titles. The article and section headings contained in
this Agreement are and shall be without substantive meaning or content of any
kind whatsoever and are not a part of the agreement between the parties hereto.
4.11. Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
4.12. Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which when taken together shall constitute one and the same agreement.
[signature page follows]
19
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CITICORP USA, INC.,
as Receivables Agent
By:
-------------------------------------
Name: David Jaffe
Title:
----------------------------------
Address: 388 Greenwich Street
19th Floor
New York, New York 10013
Attention: David Jaffe
Facsimile: (212) 816-2613
CITICORP USA, INC.,
as Bank Agent
By:
-------------------------------------
Name: Daniel Gouger
Title:
----------------------------------
Address: 388 Greenwich Street
21st Floor
New York, New York 10013
Attention: Daniel Gouger
Facsimile: (212) 816-8546
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Collateral Trustee
By:
-------------------------------------
Name: Angelita L. Pena
Title: Account Manager
Address: 100 Wall Street
Suite 1600
New York, New York 10005
Facsimile: (212) 361-6172
POLYONE CORPORATION
By:
-------------------------------------
Name: John Rastetter
Title: Treasurer
Address: 33587 Walker Road
Avon Lake, Ohio 44012
Attention: Treasurer
Facsimile: (216) 589-4280
POLYONE FUNDING CORPORATION
By:
-------------------------------------
Name: John Rastetter
Title: President
Address: 33587 Walker Road
Avon Lake, Ohio 44012
Attention: Treasurer
Facsimile: (216) 589-4280
EXHIBIT A
FORM OF JOINDER AGREEMENT
This JOINDER AGREEMENT, dated as of _________ __, 20__, is delivered
pursuant to Section 4.3 of the AMENDED AND RESTATED INTERCREDITOR AGREEMENT made
as of June 6, 2006 among CITICORP USA, INC., as Receivables Agent (as defined
therein), CITICORP USA, INC., as Bank Agent (as defined therein), U.S. BANK
TRUST NATIONAL ASSOCIATION, as Collateral Trustee (as defined therein), POLYONE
CORPORATION, an Ohio corporation ("PolyOne"), and POLYONE FUNDING CORPORATION, a
Delaware corporation ("PolyOne Funding") and each of the PolyOne Entities that
becomes a party thereto pursuant to Section 4.3 (the "Intercreditor Agreement").
Capitalized terms used herein but not defined herein are used with the meanings
given them in the Intercreditor Agreement.
By executing and delivering this Joinder Agreement, the undersigned,
as provided in Section 4.3 of the Intercreditor Agreement, hereby becomes a
party to the Intercreditor Agreement with the same force and effect as if
originally named as a party thereto and, without limiting the generality of the
foregoing, hereby consents and agrees to the terms of the Intercreditor
Agreement and expressly assumes all obligations and liabilities of an Originator
thereunder.
IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly
executed and delivered as of the date first above written.
[ADDITIONAL ORIGINATOR]
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
ACKNOWLEDGED AND AGREED
as of the date first above written:
CITICORP USA, INC.,
as Bank Agent
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
CITICORP USA, INC.,
as Receivables Agent
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Collateral Trustee
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Address:
---------------------------
---------------------------
Facsimile:
-------------------------
A-2