Exhibit 10.1

EXECUTION COPY

THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

THIS THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this
“Amendment”), dated as of January 14, 2013, is by and among GENCORP INC., an
Ohio corporation (the “Borrower”), the Material Domestic Subsidiaries of the
Borrower party hereto (collectively, the “Guarantors”), the Lenders (defined
below) party hereto and WELLS FARGO BANK, NATIONAL ASSOCIATION (successor by
merger to Wachovia Bank, National Association), as administrative agent on
behalf of the Lenders under the Credit Agreement (as hereinafter defined) (in
such capacity, the “Administrative Agent”). Capitalized terms used herein and
not otherwise defined herein shall have the meanings ascribed thereto in the
Credit Agreement.

W I T N E S S E T H

WHEREAS, the Borrower, the Guarantors, certain banks and financial institutions
from time to time party thereto (the “Lenders”) and the Administrative Agent are
parties to that certain Second Amended and Restated Credit Agreement dated as of
November 18, 2011 (as amended by that certain First Amendment to Second Amended
and Restated Credit Agreement dated as of May 30, 2012, that certain Second
Amendment to Second Amended and Restated Credit Agreement dated as of August 16,
2012 and as further amended, modified, extended, restated, replaced, or
supplemented from time to time, the “Credit Agreement”);

WHEREAS, the Credit Parties have requested that the Required Lenders amend
certain provisions of the Credit Agreement; and

WHEREAS, the Required Lenders are willing to make such amendments to the Credit
Agreement, in accordance with and subject to the terms and conditions set forth
herein.

NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

AMENDMENTS TO CREDIT AGREEMENT

1.1 New Definitions. The following definitions are hereby added to Section 1.1
of the Credit Agreement in the appropriate alphabetical order:

“Additional Escrow Amount” shall mean an amount equal to (a) all accrued
interest on the New Senior Notes from and including the date of issuance thereof
to and including the date the Escrowed Funds are released from the Escrow
Account to the extent the amount of such interest is funded into the Escrow
Account in accordance with the New Senior Notes Escrow Documents and (b) all
fees and expenses that are incurred in connection with the issuance of the New
Senior Notes.

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“Eligible Escrow Investments” shall mean Government Securities maturing no later
than the Business Day preceding the termination of the agreement(s) governing
the Escrow Account, (2) securities representing an interest or interests in
money market funds registered under the Investment Company Act of 1940 whose
shares are registered under the Securities Act as investing exclusively in
direct obligations of the United States and (3) such other short-term liquid
investments in which the Escrow Funds may be invested in accordance with the New
Senior Notes Escrow Documents.

“Escrow Account” shall mean a deposit or securities account at a financial
institution (such institution, the “Escrow Agent”) into which the Escrowed Funds
are deposited.

“Escrow Agent” shall have the meaning given to such term in the definition of
the term “Escrow Account.”

“Escrowed Funds” shall mean an amount, in cash or Eligible Escrow Investments,
not to exceed the sum of (a) the issue price of the New Senior Notes (after
deducting initial purchase discounts and expenses), plus (b) the Additional
Escrow Amount, plus (c) so long as they are retained in the Escrow Account, any
income, proceeds or products of the foregoing.

“New Senior Notes” shall mean (i) debt securities of the Borrower issued to
finance part of the Rocketdyne Acquisition, including the payment of any fees
and expenses in connection therewith; provided, however, that if such debt
securities are secured indebtedness, such debt securities must be Permitted
Second Lien Indebtedness, or (ii) debt securities of the Borrower issued in
connection with a future acquisition or other transaction the proceeds of which
are placed into an escrow account pending the completion of such transaction, in
each case, to the extent such Indebtedness, acquisition or other future
transaction is permitted by the Credit Documents.

“New Senior Notes Documents” shall mean the New Senior Notes Indenture, the New
Senior Notes Escrow Documents and any other documents entered into by the
Borrower and any Guarantor in connection with the New Senior Notes.

“New Senior Notes Escrow Documents” shall mean the agreement(s) governing the
Escrow Account and any other documents entered into in order to provide the
Escrow Agent (or its designee) a Lien on the Escrowed Funds.

“New Senior Notes Indenture” shall mean the indenture pursuant to which the New
Senior Notes shall be issued.

 

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1.2 Amendment to Definition of Collateral. The definition of “Collateral” set
forth in Section 1.1 of the Credit Agreement is hereby amended by adding the
following proviso at the end thereof immediately prior to the period:

“; provided, that the Collateral shall not include the Escrowed Funds, the
Escrow Account or any of the New Senior Notes Documents (it being understood
that Collateral shall include substantially all of the real and personal
property acquired in connection with the consummation of the Rocketdyne
Acquisition).”

1.3 Amendment to Definition of Permitted Second Lien Indebtedness. The
definition of Permitted Second Lien Indebtedness is hereby amended by adding the
following before the word “such” in clause (b) thereof:

“except as expressly permitted by Section 2.24,”.

1.4 Amendment to Section 2.24. A new Section 2.24 is hereby added to the Credit
Agreement to read as follows:

Section 2.24 New Senior Notes. Notwithstanding anything to the contrary in any
Credit Document, nothing contained in any Credit Document shall prevent (a) the
granting or existence of any Liens on the Escrow Account, the Escrowed Funds or
any New Senior Note Document or pursuant to any New Senior Notes Escrow
Document, in favor of the Escrow Agent or the trustee under the New Senior Notes
Indenture (or their designees), or (b) the holding of the Escrowed Funds in the
Escrow Account (it being understood, that the granting of Liens and the holding
of the Escrow Funds in the Escrow Account shall be deemed made exclusively on
reliance upon this Section 2.24 and not any other exception or basket under any
other provision of any Credit Document).

1.5 Amendment to Schedules. Schedule 1.1(i) to the Credit Agreement is hereby
amended and restated in its entirety to read as set forth in Exhibit 1, attached
hereto.

ARTICLE II

CONDITIONS TO EFFECTIVENESS

2.1 Closing Conditions. This Amendment shall become effective as of the day and
year set forth above (the “Amendment Effective Date”) upon satisfaction (or
waiver) of the following conditions (in each case, in form and substance
reasonably acceptable to the Administrative Agent):

(a) Executed Amendment. The Administrative Agent shall have received a copy of
this Amendment duly executed by each of the Credit Parties, the Administrative
Agent and the Required Lenders.

(b) Fees and Expenses. King & Spalding LLP, as counsel to the Administrative
Agent, shall have received from the Borrower payment of all outstanding fees and
expenses previously incurred and all reasonable fees and expenses incurred in
connection with this Amendment.

 

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(b) Miscellaneous. All other documents and legal matters in connection with the
transactions contemplated by this Amendment shall be reasonably satisfactory in
form and substance to the Administrative Agent and its counsel.

ARTICLE III

MISCELLANEOUS

3.1 Amended Terms. On and after the Amendment Effective Date, all references to
the Credit Agreement in each of the Credit Documents shall hereafter mean the
Credit Agreement as amended by this Amendment. Except as specifically amended
hereby or otherwise agreed, the Credit Agreement is hereby ratified and
confirmed and shall remain in full force and effect according to its terms.

3.2 Representations and Warranties of Credit Parties. Each of the Credit Parties
represents and warrants as follows:

(a) It has taken all necessary action to authorize the execution, delivery and
performance of this Amendment.

(b) This Amendment has been duly executed and delivered by such Person and
constitutes such Person’s legal, valid and binding obligation, enforceable in
accordance with its terms, except as such enforceability may be subject to
(i) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting creditors’ rights generally and
(ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).

(c) No consent, approval, authorization or order of, or filing, registration or
qualification with, any court or governmental authority or third party is
required in connection with the execution, delivery or performance by such
Person of this Amendment.

(d) The representations and warranties made by the Credit Parties in Article III
of the Credit Agreement (i) that contain a materiality qualification shall be
true and correct on and as of the date hereof (except for those which expressly
relate to an earlier date) and (ii) that do not contain a materiality
qualification shall be true and correct in all material respects on the date
hereof (except for those which expressly relate to an earlier date).

(e) After giving effect to this Amendment, no event has occurred and is
continuing which constitutes a Default or an Event of Default.

(f) The Security Documents continue to create a valid security interest in, and
Lien upon, the Collateral, in favor of the Administrative Agent, for the benefit
of the Lenders, which security interests and Liens are perfected in accordance
with the terms of the Security Documents and prior to all Liens other than
Permitted Liens.

 

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(g) The Credit Party Obligations are not reduced or modified by this Amendment
and are not subject to any offsets, defenses or counterclaims.

3.3 Reaffirmation of Credit Party Obligations. Each Credit Party hereby ratifies
the Credit Agreement and acknowledges and reaffirms (a) that it is bound by all
terms of the Credit Agreement applicable to it and (b) that it is responsible
for the observance and full performance of its respective Credit Party
Obligations.

3.4 Credit Document. This Amendment shall constitute a Credit Document under the
terms of the Credit Agreement.

3.5 Expenses. The Borrower agrees to pay all reasonable out-of-pocket costs and
expenses of the Administrative Agent in connection with the preparation,
execution and delivery of this Amendment, including without limitation the
reasonable fees and expenses of the Administrative Agent’s legal counsel.

3.6 Further Assurances. The Credit Parties agree to promptly take such action,
upon the request of the Administrative Agent, as is necessary to carry out the
intent of this Amendment.

3.7 Entirety. This Amendment and the other Credit Documents embody the entire
agreement among the parties hereto and supersede all prior agreements and
understandings, oral or written, if any, relating to the subject matter hereof.

3.8 Counterparts; Telecopy. This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall constitute one and the same instrument. Delivery of an
executed counterpart to this Amendment by telecopy or other electronic means
shall be effective as an original and shall constitute a representation that an
original will be delivered.

3.9 No Actions, Claims, Etc. As of the date hereof, each of the Credit Parties
hereby acknowledges and confirms that it has no knowledge of any actions, causes
of action, claims, demands, damages and liabilities of whatever kind or nature,
in law or in equity, against the Administrative Agent, the Lenders, or the
Administrative Agent’s or the Lenders’ respective officers, employees,
representatives, agents, counsel or directors arising from any action by such
Persons, or failure of such Persons to act under the Credit Agreement on or
prior to the date hereof.

3.10 GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (INCLUDING
SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

3.11 Successors and Assigns. This Amendment shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.

 

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3.12 Consent to Jurisdiction; Service of Process; Waiver of Jury Trial. The
jurisdiction, service of process and waiver of jury trial provisions set forth
in Sections 9.12, 9.13 and 9.16 of the Credit Agreement are hereby incorporated
by reference, mutatis mutandis.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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GENCORP INC.

AMENDMENT TO CREDIT AGREEMENT

IN WITNESS WHEREOF the parties hereto have caused this Amendment to be duly
executed on the date first above written.

 

BORROWER:     GENCORP INC.,     an Ohio corporation     By:  

/s/ Kathleen E. Redd

    Name:   Kathleen E. Redd     Title:   Vice President and Chief Financial
Officer GUARANTORS:     AEROJET-GENERAL CORPORATION,     an Ohio corporation    
By:  

/s/ Kathleen E. Redd

    Name:   Kathleen E. Redd     Title:   Vice President and Chief Financial
Officer

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ADMINISTRATIVE AGENT:    

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as a Lender and as Administrative Agent

    By:  

/s/ Leah B. Ellis

    Name:   Leah B. Ellis     Title:   Vice President LENDERS:     Morgan
Stanley Bank, N.A.,     as a Lender     By:  

/s/ Nick Zangari

    Name:   Nick Zangari     Title:   Vice President     U.S. Bank National
Association,     as a Lender     By:  

/s/ Oksana Guy

    Name:   Oksana Guy     Title:   Vice President     SunTrust Bank,     as a
Lender     By:  

/s/ David Simpson

    Name:   David Simpson     Title:   Vice President

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Exhibit 1

Schedule 1.1(i)

FORM OF INTERCREDITOR AGREEMENT

INTERCREDITOR AGREEMENT

This INTERCREDITOR AGREEMENT (this “Agreement”), dated as of [            ] is
entered into by and between WELLS FARGO BANK, NATIONAL ASSOCIATION, a national
banking association, in its capacity as agent pursuant to the First Lien Credit
Agreement (as hereinafter defined) for the lenders who are party from time to
time thereto and the holders of the other Credit Party Obligations (as defined
in the First Lien Credit Agreement) thereunder (in such capacity, together with
its successors and assigns in such capacity, the “First Lien Agent”), and
[MORGAN STANLEY SENIOR FUNDING, INC.], in its capacity as trustee and collateral
agent pursuant to the [Indenture] (as hereinafter defined) for the [Noteholders]
(as hereinafter defined) (in such capacity, together with its successors and
assigns in such capacity, the “Second Lien Agent”) and is accepted and agreed to
by each Notes Trustee (as defined below) from time to time party hereto.

WITNESSETH:

WHEREAS, the Borrower (as hereinafter defined), the First Lien Lenders (as
hereinafter defined), and the First Lien Agent have previously entered into a
Second Amended and Restated Credit Agreement, dated as of November 18, 2011, as
amended by that certain First Amendment to Second Amended and Restated Credit
Agreement dated as of May 30, 2012 and as amended by that certain Second
Amendment to Second Amended and Restated Credit Agreement (the “Second
Amendment”) dated as of August 16, 2012 (as the same may hereafter be amended,
modified, supplemented, extended, renewed, restated or Refinanced from time to
time, the “First Lien Credit Agreement”); and

WHEREAS, the Borrower and [MORGAN STANLEY SENIOR FUNDING, INC.], in its capacity
as trustee (the “Notes Trustee”) and Second Lien Agent, are entering into the
[Indenture], dated as of [            ] (as such Indenture may be amended,
modified, supplemented, extended, renewed, restated or Refinanced from time to
time, the “Indenture”), governing the Borrower’s [    ]% Senior Secured Notes
due [        ] (the “Notes”);

WHEREAS, it is a requirement of the First Lien Credit Agreement pursuant to the
Second Amendment that the First Lien Agent (for itself and for the benefit of
the First Lien Lenders) and the Second Lien Agent (for itself and for the
benefit of the holders of the Notes) enter into this Agreement;

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NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and
obligations herein set forth and for other good and valuable consideration, the
adequacy and receipt of which are hereby acknowledged, and in reliance upon the
representations, warranties and covenants herein contained, the parties hereto,
intending to be legally bound, hereby agree as follows:

Section 1. Definitions. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and the plural form of the terms indicated):

“Bankruptcy Code” shall mean title 11 of the United States Code (11 U.S.C. 101
et seq.), as amended from time to time and any successor statute.

“Borrower” shall mean, GenCorp Inc., an Ohio corporation and its successors and
assigns, including, without limitation, any receiver, trustee or
debtor-in-possession on behalf of such person or on behalf of any successor or
assign.

“Business Day” shall mean any day other than a Saturday, Sunday or other day on
which commercial banks are authorized or required to close under the laws of the
State of New York, and a day on which First Lien Agent and the Second Lien Agent
are open for the transaction of business.

“Collateral” shall mean all of the personal property and interests in personal
property, tangible or intangible, now owned or hereafter acquired by any Obligor
in or upon which First Lien Agent or any other Person under the First Lien
Lender Documents at any time has a Lien and the Second Lien Agent or any other
Person under the Noteholder Collateral Documents at any time has a Lien, and
including, without limitation, all proceeds of such personal property and
interests in personal property; provided, however that the term Collateral as it
relates to the Noteholder Debt shall not include the Excluded Property.

“Comparable Noteholder Collateral Document” shall mean, in relation to any
Collateral, any Noteholder Collateral Document which creates a Lien in the
Collateral, granted by one or more of the Obligors, as applicable.

“Conforming Plan of Reorganization” shall mean any Plan of Reorganization whose
provisions are consistent with the provisions of this Agreement.

“DIP Financing” shall have the meaning set forth in Section 6.2 hereof.

“Effective Date” shall mean [                ,         ].

“Excluded Property” shall mean (a) any and all real property owned or leased by
the Borrower and the Guarantors from time to time and (b) any Capital Stock or
other securities of any Affiliate of the Company that does not secure the
Noteholder Debt as a result of the 3-16 Limitation (as defined in the Noteholder
Collateral Documents).

“First Lien Agent” shall have the meaning set forth in the recitals hereto and
shall include any successor thereto exercising substantially the same rights and
powers, or if there is no acting First Lien Agent under the First Lien Credit
Agreement, the Required Lenders under the First Lien Credit Agreement.

“First Lien Collateral Documents” shall mean the Security Agreement dated as of
November 18, 2011, among the Borrower, the Guarantors and the First Lien Agent,
the Pledge Agreement dated as of November 18, 2011, among the Borrower, the
Guarantors and the First Lien

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Agent and any other document or instrument executed and delivered at any time
pursuant to any First Lien Lender Document or otherwise, pursuant to which a
Lien is granted by an Obligor to secure First Lien Debt or under which rights or
remedies with respect to any such Lien are governed, as the same may be amended,
modified, supplemented, extended, renewed, or restated from time to time.

“First Lien Credit Agreement” shall have the meaning set forth in the recitals
hereto.

“First Lien Debt” shall mean any and all obligations, liabilities and
indebtedness of every kind, nature and description owing by any Obligor to the
First Lien Agent or any other First Lien Lender arising under the First Lien
Credit Agreement or any of the other First Lien Lender Documents, whether direct
or indirect, absolute or contingent, joint or several, due or not due, primary
or secondary, liquidated or unliquidated, including principal, interest,
charges, fees, costs, indemnities and expenses, however evidenced, whether as
principal, surety, endorser, guarantor or otherwise, whether now existing or
hereafter arising, whether arising before, during or after the initial or any
renewal term of the applicable First Lien Lender Documents or after the
commencement of any Insolvency Proceeding with respect to any Obligor (and
including, without limitation, the payment of interest which would accrue and
become due but for the commencement of such Insolvency Proceeding, whether or
not such interest is allowed or allowable in whole or in part in any such
Insolvency Proceeding).

“First Lien Guarantors” shall mean the “Guarantors” as defined in the First Lien
Credit Agreement.

“First Lien Lender Documents” shall mean, collectively, the First Lien Credit
Agreement and each of the other Credit Documents (as defined in the First Lien
Credit Agreement or any similar term in any replacement or Refinanced First Lien
Credit Agreement), as any of the foregoing may be amended, modified,
supplemented, extended, renewed, restated, replaced or Refinanced from time to
time.

“First Lien Lender Termination Date” shall mean the date that all of the
following have occurred: (a) the First Lien Lenders have received the payment in
full in cash or other immediately available funds of all of the First Lien Debt
(other than contingent indemnity obligations not yet due and payable), (b) the
First Lien Agent shall have received either cash collateral or a letter of
credit with respect to contingent obligations in accordance with the First Lien
Credit Agreement as in effect on the date hereof, and (c) the agreement of the
First Lien Lenders to make any further loans or provide any further financial
accommodations to the Borrower shall have been terminated.

“First Lien Lenders” shall mean the Persons holding First Lien Debt, including,
without limitation, the First Lien Agent.

“Guarantor” shall mean (a) each entity listed as a “Guarantor” on the signature
pages to the Obligor Acknowledgement hereto, and in each case, such entity’s
successors and assigns, including, without limitation, any receiver, trustee or
debtor-in-possession on behalf of such entity or on behalf of any successor or
assign, and (b) each other Person (other than the Borrower) now or at any time
hereafter liable on or in respect of any of the First Lien Debt or the
Noteholder Debt, and each of such Person’s successors and assigns, including,
without limitation, a receiver, trustee or debtor-in-possession on behalf of
such person or on behalf of any such successor or assign.

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“Indenture” shall have the meaning set forth in the recitals hereto.

“Insolvency Proceeding” shall mean, as to any Person, any of the following:

(a) any case or proceeding with respect to such Person under the Bankruptcy Code
or any other Federal or State bankruptcy, insolvency or reorganization law of
any jurisdiction affecting creditors’ rights or any other or similar proceedings
seeking any stay, reorganization, arrangement, composition or readjustment of
the obligations and indebtedness of such Person; or

(b) any proceeding seeking the appointment of any trustee, receiver, liquidator,
custodian or other insolvency official with similar powers with respect to such
Person or any of its assets; or

(c) any proceeding for liquidation, dissolution or other winding up of the
business of such Person; or

(d) any assignment for the benefit of creditors of assets of such Person.

“Lien” shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, security interest, encumbrance (including, but not limited to,
easements, rights of way and the like), lien (statutory or other), security
agreement or transfer intended as security, including without limitation, any
conditional sale or other title retention agreement, the interest of a lessor
under a capital lease, or any financing lease having substantially the same
economic effect as any of the foregoing.

“Noteholder Collateral Documents” shall mean the Noteholder Security Agreement
and any other document or instrument executed and delivered at any time pursuant
to any Noteholder Document or otherwise, pursuant to which a Lien is granted by
an Obligor to secure Noteholder Debt or under which rights or remedies with
respect to any such Lien are governed, as the same may be amended, modified,
supplemented, extended, renewed, or restated from time to time; provided,
however that no mortgages or deeds of trust in respect of Excluded Property
shall constitute Noteholder Collateral Documents.

“Noteholder Debt” shall mean any and all obligations, liabilities and
indebtedness of every kind, nature and description owing by any Obligor arising
under the Noteholder Documents, whether direct or indirect, absolute or
contingent, joint or several, due or not due, primary or secondary, liquidated
or unliquidated, including principal, interest, charges, fees, costs,
indemnities and expenses, however evidenced, whether as principal, surety,
endorser, guarantor or otherwise, whether now existing or hereafter arising,
whether arising before, during or after the initial or any renewal term of the
Indenture or after the commencement of any Insolvency Proceeding with respect to
any Obligor (and including, without limitation, the payment of interest which
would accrue and become due but for the commencement of such Insolvency
Proceeding, whether or not such interest is allowed or allowable in whole or in
part in any such Insolvency Proceeding).

“Noteholder Documents” shall mean the Indenture, the Notes, the Noteholder
Collateral Documents and any other document or instrument executed and delivered
at any time pursuant to any Noteholder Document or otherwise, with respect to
any Noteholder Debt, as the same may be amended, modified, supplemented,
extended, renewed, or restated from time to time.

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“Noteholder Security Agreement” shall mean the security agreement dated as of
the date hereof, among the Borrower, the Guarantors and the Second Lien Agent.

“Noteholders” shall mean the Persons holding Noteholder Debt, including the
Second Lien Agent and the Notes Trustee.

“Notes” shall have the meaning set forth in the recitals hereto.

“Notes Trustee” shall have the meaning set forth in the recitals hereto.

“Obligor” shall mean, individually and collectively, the Borrower and the
Guarantors.

“Person” or “person” shall mean any individual, sole proprietorship,
partnership, corporation (including without limitation, any corporation which
elects subchapter S status under the Internal Revenue Code of 1986, as amended),
limited liability company, limited liability partnership, business trust,
unincorporated association, joint stock company, trust, joint venture, or other
entity or any government or any agency or instrumentality or political
subdivision thereof.

“Plan of Reorganization” means any plan or reorganization, plan of compromise,
plan of liquidation, agreement for composition, plan of arrangement or other
type of plan of arrangement proposed in or in connection with any Insolvency
Proceeding.

“Recovery” shall have the meaning set forth in Section 6.6 hereof.

“Refinance” shall mean, in respect of any indebtedness, to refinance, extend,
renew, defease, amend, modify, supplement, restructure, replace, refund or
repay, or to issue other indebtedness, in exchange or replacement for, such
indebtedness. “Refinanced” and “Refinancing” shall have correlative meanings.

“Required Lenders” shall mean, with respect to any amendment or modification of
the First Lien Credit Agreement, or any termination or waiver of any provision
of a First Lien Lender Document, or any consent or departure by any of the
Obligors therefrom, those First Lien Lenders, the approval of which is required
under the terms of the First Lien Credit Agreement to approve such amendment or
modification, termination or waiver or consent or departure under the First Lien
Credit Agreement or such First Lien Lender Document, as applicable.

“Second Lien Agent” shall have the meaning set forth in the recitals hereto and
shall include any successor thereto exercising substantially the same rights and
powers.

“Uniform Commercial Code” or “UCC” shall mean the Uniform Commercial Code of the
State of New York, as amended.

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Section 2. Lien Priorities.

2.1 Acknowledgment of Liens. The First Lien Agent hereby acknowledges that the
Second Lien Agent acting for and on behalf of the Noteholders has been granted
Liens upon all of the Collateral (other than the Excluded Property) pursuant to
the Noteholder Documents to secure the Noteholder Debt. The Second Lien Agent
hereby acknowledges that the First Lien Agent, acting for and on behalf of the
First Lien Lenders, has been granted Liens upon all of the Collateral pursuant
to the First Lien Lender Documents to secure the First Lien Debt.

2.2 Subordination. Notwithstanding the order or time of attachment, or the
order, time or manner of perfection, or the order or time of filing or
recordation of any document or instrument, or other method of perfecting a Lien
in favor of the First Lien Agent or any other First Lien Lender in any
Collateral, and notwithstanding any conflicting provisions, terms or conditions
of the UCC or any other applicable law or the Noteholder Documents or the First
Lien Lender Documents or any other circumstance whatsoever, the Second Lien
Agent, for and on behalf of the Noteholders hereby agrees that: (a) any Lien on
the Collateral securing any or all of the First Lien Debt now or hereafter held
by the First Lien Agent or any other First Lien Lender shall be senior and prior
to any Lien on the Collateral securing any or all of the Noteholder Debt; and
(b) any Lien on the Collateral now or hereafter held by the Second Lien Agent or
any other Noteholder securing Noteholder Debt regardless of how acquired,
whether by grant, statute, operation of law, judgment, subrogation or otherwise,
shall be junior and subordinate in all respects to all Liens on the Collateral
securing any or all of the First Lien Debt. All Liens on the Collateral securing
any or all of the First Lien Debt shall be and remain senior to all Liens on the
Collateral securing any or all of the Noteholder Debt for all purposes, whether
or not any such Liens securing any of the First Lien Debt are subordinated to
any Lien securing any other obligation of the Borrower or any Guarantor.

2.3 Prohibition on Contesting Liens. Each of the Second Lien Agent, for and on
behalf of each Noteholder, and the First Lien Agent, for and on behalf of each
First Lien Lender, agrees that it shall not (and hereby waives any right to)
contest or support any other Person in contesting, in any proceeding (including,
without limitation, any Insolvency Proceeding), the priority, validity or
enforceability of a Lien held by the First Lien Agent or any other First Lien
Lender in any of the Collateral or by the Second Lien Agent or any other
Noteholder in any of the Collateral, as the case may be; provided that nothing
in this Agreement shall be construed to prevent or impair the rights of the
First Lien Agent or the Second Lien Agent or any First Lien Lender or any
Noteholder to enforce this Agreement.

2.4 No New Liens. Until the First Lien Lender Termination Date, (a) neither the
Borrower nor any Guarantor shall grant (i) to the Second Lien Agent or any other
Noteholder any Lien upon any assets or properties of any Obligor unless the
First Lien Agent has been granted a Lien on such assets or properties that is
senior and prior to the Liens thereon of the Second Lien Agent and the other
Noteholders and (ii) to the First Lien Agent or any First Lien Lender any Lien
upon any assets or properties of any Obligor unless the Second Lien Agent has
been granted a Lien on such assets or properties that is junior to the Liens
thereon of the First Lien Agent and the First Lien Lenders and (b) the parties
hereto agree that, after the date hereof, if the Second Lien Agent or any other
Noteholder shall nonetheless hold any Lien on any assets or properties of any
Obligor that are not also subject to the senior and prior Lien of the First Lien
Agent, the Second Lien Agent, upon demand by the First Lien Agent, will either
release (or cause the release of) such Lien or assign (or cause to be assigned)
such Lien to the First Lien Agent, or otherwise execute appropriate documents
and/or instruments reasonably requested by the First Lien Agent acknowledging
and confirming that

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the Second Lien Agent (as applicable) holds (and shall be deemed to have held)
such Lien and security interest for the benefit of the First Lien Agent as
security for the First Lien Debt subject to the priorities set forth herein,
with any amounts received in respect thereof subject to distribution and
turnover under Section 4. Until the Second Lien Lender Termination Date, if the
First Lien Agent or any other First Lien Lender shall nonetheless hold any Lien
on any assets or properties of any Obligor that are not also subject to the
junior Lien of the Second Lien Agent, the First Lien Agent upon the request of
the Second Lien Agent shall execute appropriate documents and/or instruments
reasonably requested by the Second Lien Agent acknowledging and confirming that
the First Lien Agent (as applicable) holds (and shall be deemed to have held)
such Lien and security interest for the benefit of the Second Lien Agent as
security for the Noteholder Debt subject to the priorities set forth herein,
with any amounts received thereof subject to distribution under Section 4.
Notwithstanding the foregoing, the First Lien Debt shall not be prohibited from
being secured by any asset constituting Excluded Property that does not secure
the Noteholder Debt.

Section 3. Enforcement.

3.1 Exercise of Remedies.

(a) Prior to the First Lien Lender Termination Date, whether or not any
Insolvency Proceeding has been commenced by or against any Obligor, the Second
Lien Agent and the other Noteholders will not (A) exercise or seek to exercise
any rights or remedies (including setoff) with respect to any Collateral, or
institute any action or proceeding with respect to such rights or remedies,
including, without limitation, any action of foreclosure, (B) contest, protest
or object to any foreclosure proceeding or action brought by the First Lien
Agent or any other First Lien Lender, or any exercise of any right under any
cash management agreement, landlord waiver or bailee’s letter or similar
agreement or arrangement or of any rights and remedies relating to the
Collateral under the First Lien Lender Documents or otherwise, or (C) object to
the forbearance by the First Lien Agent and the other First Lien Lenders or any
of them from bringing or pursuing any foreclosure proceeding or action or any
other exercise of any rights or remedies relating to the Collateral. Prior to
the First Lien Lender Termination Date, the First Lien Agent and the other First
Lien Lenders shall have the exclusive right to enforce rights, exercise remedies
(including, without limitation, setoff and the right to credit bid their debt)
and make determinations regarding release, disposition, or restrictions with
respect to the Collateral without any consultation with or the consent of the
Second Lien Agent or any other Noteholder; provided that (i) in any Insolvency
Proceeding commenced by or against any Obligor, the Second Lien Agent may file a
proof of claim with respect to the Noteholder Debt and the Noteholders may vote
with respect to any Conforming Plan of Reorganization, (ii) the Second Lien
Agent may (x) send such notices of the existence of, or any evidence or
confirmation of, the Noteholder Debt under the Noteholder Documents or the Liens
of the Second Lien Agent, or any other collateral agent, agent or representative
of the Noteholders which has appointed the Second Lien Agent to act for, and
bind, it (and all Noteholders for which it acts as collateral agent, agent or
representative) under and for purposes of this Agreement, in the Collateral to
any court or governmental agency or (y) file or record any such notice or
evidence to the extent necessary to prove or preserve the Liens of the Second
Lien Agent, or any other collateral agent, agent or representative of the
Noteholders which has appointed the Second Lien Agent to act for, and bind, it
(and all Noteholders for which it acts as collateral agent, agent or
representative) under and for purposes of this Agreement, in the Collateral,
(iii) the Second Lien Agent may file any necessary or appropriate responsive or
defensive pleadings in opposition to any motion, claim, adversary proceeding or
other pleading made by any Person objecting to or otherwise seeking the

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disallowance of the claims or Liens of any Noteholder, including any claims
secured by the Collateral, in each case to the extent not inconsistent with the
terms of this Agreement, (iv) the Second Lien Agent or any other collateral
agent, agent or representative of the Noteholders which has appointed the Second
Lien Agent to act for, and bind, it (and all Noteholders for which it acts as
collateral agent, agent or representative) under and for purposes of this
Agreement, may take action in order to create, perfect or preserve (but not
enforce) its Lien on any Collateral, (v) in any Insolvency or Liquidation
Proceeding, the Second Lien Agent and Noteholders shall be entitled to file any
pleadings, objections, motions or agreements which assert rights or interests
available to unsecured creditors of the Obligors arising under either applicable
bankruptcy law or applicable non-bankruptcy law, in each case in accordance with
the terms of this Agreement, (vi) in any Insolvency or Liquidation Proceeding,
the Second Lien Agent and Noteholders shall be entitled to vote on any plan of
reorganization, to the extent consistent with the provisions hereof (it being
understood that the Second Lien Agent and Noteholders shall not be permitted to
vote in favor or support of any plan of reorganization that is not a Conforming
Plan or Reorganization), and (vii) the Second Lien Agent or any Noteholder may
exercise any of its rights or remedies with respect to the Collateral after
termination of the Standstill Period. The Second Lien Agent, for and on behalf
of the Noteholders, agrees that, unless and until the First Lien Lender
Termination Date has occurred, the Second Lien Agent and the other Noteholders
will not commence, or join with any Person (other than the First Lien Agent
and/or the other First Lien Lenders upon the request thereof) in commencing any
enforcement, collection, execution, levy or foreclosure action or proceeding
with respect to any Lien held by it under any of the Noteholder Documents or
otherwise; and the Second Lien Agent and the other Noteholders will not take any
action that would hinder any exercise of remedies undertaken by the First Lien
Agent or any other First Lien Lender under any of the First Lien Lender
Documents, including any sale, lease, exchange, transfer, or other disposition
of any Collateral, whether by foreclosure or otherwise. In exercising rights and
remedies with respect to the Collateral, the First Lien Agent and the other
First Lien Lenders or any of them may enforce the provisions of the First Lien
Lender Documents and exercise remedies thereunder, all in such order and in such
manner as they may determine in the exercise of their sole discretion. Such
exercise and enforcement shall include, without limitation, the rights of an
agent appointed by them to sell or otherwise dispose of Collateral upon
foreclosure, to incur expenses in connection with such sale or disposition, and
to exercise all the rights and remedies of a secured party under the Uniform
Commercial Code of any applicable jurisdiction and of a secured creditor under
the Bankruptcy Code or similar laws of any applicable jurisdiction. Without
limiting the generality of the foregoing, unless and until the First Lien Lender
Termination Date has occurred, except as expressly provided above in this
Section 3.1(a) or the proviso of Section 3.1(b), the sole right of the Second
Lien Agent and the other Noteholders with respect to the Collateral is to hold a
Lien on the Collateral pursuant to the Noteholder Documents for the period and
to the extent granted therein and to receive a share of the proceeds thereof, if
any, after the First Lien Lender Termination Date has occurred.

(b) The Second Lien Agent, for and on behalf of the Noteholders, hereby waives
any and all rights it or any other Noteholder may have as a junior lien creditor
or otherwise to object to the manner in which the First Lien Agent or any other
First Lien Lender seek to enforce or collect any First Lien Debt or any Liens
granted in any of the Collateral; provided that, notwithstanding any other
provision of this Agreement (including Section 3(a) above), but subject at all
times to the provisions of Section 4 of this Agreement, the Second Lien Agent
may enforce or exercise any or all such rights and remedies, or commence,
petition or file for any such action or proceeding, (i) after a period (the
“Standstill Period”) ending one hundred eighty (180) days after the date that
the First Lien Agent receives written notice from the Second Lien Agent that
Second Lien Agent has declared,

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in writing, the existence of any event of default under any of the Noteholder
Documents and has accelerated the payment of all the principal amount of the
Noteholder Debt and has demanded, in writing, the repayment of such Noteholder
Debt from the Obligors, and (ii) if and only if, as of the expiration of such
one hundred eighty (180) day period, (A) the applicable event of default set
forth in the written notice set forth in Section 3.1(b)(i) above is continuing
and has not been cured, waived or remedied, and (B) the First Lien Agent or any
other First Lien Lender is not then diligently pursuing in good faith the
exercise of its enforcement rights or remedies against a material portion of the
Collateral (including, without limitation, any of the following: solicitation of
bids from third parties to conduct the liquidation of all or any material
portion of the Collateral, the engagement or retention of sales brokers,
marketing agents, investment bankers, accountants, auctioneers or other third
parties for the purpose of valuing, marketing, promotion or selling all or any
material portion of the Collateral, the notification of account debtors to make
payments to the First Lien Agent, the initiation of any action to take
possession of all or any material portion of the Collateral or the commencement
of any legal proceedings or actions against or with respect to all or any
material portion of the Collateral).

Section 4. Payments.

4.1 Application of Proceeds. Until the First Lien Lender Termination Date has
occurred, all cash proceeds of Collateral received in connection with any sale
or other disposition of, or collection or other realization on, such Collateral
(except for payments in respect of the Notes made in accordance with any
provision of the First Lien Lender Documents expressly permitting such payments)
shall be paid to the First Lien Agent and shall be applied by the First Lien
Agent to the First Lien Debt in such order as specified in the First Lien Credit
Agreement. On and after the First Lien Lender Termination Date, the First Lien
Agent shall promptly deliver to the Second Lien Agent any Collateral and any
proceeds of Collateral held by it in the same form as received, with any
necessary endorsements or as a court of competent jurisdiction may otherwise
direct.

4.2 Payments Over. Any Collateral or proceeds thereof received by the Second
Lien Agent or any other Noteholder at any time prior to the First Lien Lender
Termination Date (except for payments in respect of the Notes made in accordance
with any provision of the First Lien Credit Agreement expressly permitting such
payments) shall be segregated and held in trust by the Second Lien Agent. The
Second Lien Agent shall, at the Borrower’s expense, promptly send written notice
to the First Lien Agent upon receipt of such Collateral or proceeds and if
directed by the First Lien Agent within five (5) days after receipt by the First
Lien Agent of such written notice, shall deliver such Collateral or proceeds to
the First Lien Agent in the same form as received, with any necessary
endorsements, or as a court of competent jurisdiction may otherwise direct. The
First Lien Agent is hereby authorized to make any such endorsements as agent for
the Second Lien Agent or any such Noteholder. This authorization is coupled with
an interest and is irrevocable.

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Section 5. Other Agreements.

5.1 Releases.

(a) If in connection with:

(i) the exercise of the First Lien Agent’s rights and remedies in respect of any
of the Collateral provided for in Section 3.1, including any sale, lease,
exchange, transfer, or other disposition of such Collateral and, as of the date
thereof, an Event of Default under, and as defined in, the First Lien Credit
Agreement or any of the other First Lien Lender Documents exists and is
continuing; or

(ii) any sale, lease, exchange, transfer, or other disposition of Collateral
permitted under the terms of the First Lien Lender Documents and the Noteholder
Documents (as in effect on the date hereof);

the First Lien Agent, for and on behalf of the First Lien Lenders, releases any
of its Liens on any part of the Collateral (or releases any Guarantor from its
obligations under the First Lien Credit Agreement or any of the other First Lien
Lender Documents), then, the Liens, if any, of the Second Lien Agent, for itself
or for the benefit of the Noteholders, on such Collateral (or the obligations of
such Guarantor under its guaranty of the Noteholder Debt, as the case may be)
shall be automatically, unconditionally and simultaneously released, and the
Second Lien Agent, for itself or on behalf of any such Noteholder, shall
promptly execute and deliver to the First Lien Agent or the Obligors (as
applicable) such UCC amendments, releases and other documents on customary terms
(which releases and documents should be substantially identical to the
comparable releases and other documents executed by the First Lien Agent in
connection with such release) as the First Lien Agent or the Obligors may
reasonably request to effectively confirm such release; provided that the
proceeds of any Collateral received pursuant to clause (i) of this
Section 5.1(a) shall be applied pursuant to Section 4 above.

(b) The Second Lien Agent, for and on behalf of the Noteholders, hereby
irrevocably constitutes and appoints the First Lien Agent and any officer or
agent of the First Lien Agent, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of the Second Lien Agent or such Noteholder or in the First Lien
Agent’s name, from time to time in the First Lien Agent’s discretion, for the
purpose of carrying out the terms of this Section 5.1, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Section 5.1,
including, without limitation, any financing statement amendments, endorsements
or other instruments of transfer or release. This power is coupled with an
interest and is irrevocable.

5.2 Insurance. Until the First Lien Lender Termination Date, the First Lien
Agent and the other First Lien Lenders shall have the sole and exclusive right,
subject to the rights of the Borrower under the relevant First Lien Lender
Documents, to adjust settlement for any insurance policy covering any Collateral
in the event of any loss thereunder and to approve any award granted in any
condemnation or similar proceeding affecting any Collateral. Until the First
Lien Lender Termination Date, all proceeds of any such policy and any such award
shall be paid to the First Lien Agent for the benefit of the First Lien Lenders
to the extent required under the First Lien Credit Agreement and the other First
Lien Lender Documents and thereafter to the Second Lien Agent for the benefit of
the Noteholders to the extent required under the applicable Noteholder
Documents. If the Second Lien Agent or any other Noteholder shall, at any time,
receive any proceeds of any such insurance policy or any such award in
contravention of this Agreement, it shall pay such proceeds over to the First
Lien Agent in accordance with the terms of Section 4.2.

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5.3 Amendments to Noteholder Collateral Documents.

(a) Until the First Lien Termination Date has occurred, without the prior
written consent of the First Lien Agent and the Required Lenders, no Noteholder
Collateral Document may be amended, supplemented or otherwise modified or
entered into to the extent such amendment, supplement or modification, or the
terms of any new Noteholder Collateral Document would (i) provide any
restriction on the Obligors’ ability to incur First Lien Debt, to grant Liens to
the First Lien Agent for the benefit of the First Lien Lenders or otherwise to
perform their obligations under the First Lien Lender Documents, in each case
that is more restrictive than is contained in the Noteholder Documents on the
date hereof, (ii) change the rate of interest payable on or alter the amount or
dates for payment of any principal or other sum due in respect of the Noteholder
Debt, other than to reduce such rate of interest or amount or extend the
maturity of any such payment, or (iii) otherwise be inconsistent with any of the
terms of any of the First Lien Lender Documents or this Agreement. The Second
Lien Agent agrees that each Noteholder Collateral Document shall include the
following language:

“Notwithstanding anything herein to the contrary, the lien and security interest
granted to the Collateral Agent pursuant to this Agreement and the exercise of
any right or remedy by the Collateral Agent hereunder are subject to the
provisions of the Intercreditor Agreement, dated as of [            ,         ]
(as amended, modified, supplemented or replaced from time to time, the
“Intercreditor Agreement”), between Wells Fargo Bank, National Association, as
First Lien Agent, and [            ], as Second Lien Agent. In the event of any
conflict between the terms of the Intercreditor Agreement and this Agreement,
the terms of the Intercreditor Agreement shall govern.”

(b) Notwithstanding anything to the contrary herein, in the event the First Lien
Agent or the Required Lenders enter into any amendment, waiver or consent in
respect of any of the First Lien Lender Documents for the purpose of adding to,
or deleting from, or waiving or consenting to any departures from any provisions
of any First Lien Collateral Documents or changing in any manner the rights of
the First Lien Agent, any other First Lien Lender, or any of the Obligors
thereunder, then such amendment, waiver or consent shall apply automatically to
any comparable provision of the Comparable Noteholder Collateral Document
without the consent of the Second Lien Agent or the other Noteholders and
without any action by the Second Lien Agent or any Obligor; provided, however,
that no such amendment, waiver or consent shall have the effect of removing
assets subject to the Lien of the Noteholder Collateral Documents, except to the
extent that a release of such Lien is required or permitted by Section 5.1.

5.4 Rights As Unsecured Creditors. Notwithstanding anything to the contrary in
this Agreement, the Second Lien Agent and the other Noteholders may exercise
rights and remedies as an unsecured creditor against the Borrower and its
subsidiaries in accordance with the terms of the Noteholder Documents and
applicable law. Nothing in this Agreement shall prohibit the receipt by the
Second Lien Agent or any other Noteholder of the required payments of interest
on and principal of the Notes so long as such receipt is (a) not the direct or
indirect result of the exercise by the Second Lien Agent or any other Noteholder
of rights or remedies as a secured creditor or enforcement of any Lien held by
any of them in contravention of this Agreement and (b) permitted by the terms of
the Indenture. In the event the Second Lien Agent or any other Noteholder
becomes a judgment lien creditor in respect of Collateral as a result of its
enforcement of its rights as an

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unsecured creditor, such judgment lien shall be subordinated to the Liens
securing First Lien Debt on the same basis as the other Liens securing the
Noteholder Debt are so subordinated to such First Lien Debt under this
Agreement. Nothing in this Agreement modifies any rights or remedies the First
Lien Agent or any other First Lien Lender may have with respect to the
Collateral.

5.5 Bailee for Perfection.

(a) The Second Lien Agent hereby appoints the First Lien Agent to hold, and the
First Lien Agent accepts such appointment and agrees to hold, all of the
Collateral in the First Lien Agent’s possession or control (or in the possession
or control of its agents or bailees) as bailee and agent for the benefit and on
behalf of the Second Lien Agent and Noteholders, solely for the purpose of
perfecting the security interest granted in such Collateral pursuant to the
Noteholder Collateral Documents, subject to the terms and conditions of this
Section 5.5.

(b) Until the First Lien Lender Termination Date, the First Lien Agent shall be
entitled to deal with the Collateral in their possession or control in
accordance with the terms of the First Lien Lender Documents. The rights of the
Second Lien Agent shall at all times be subject to the terms of this Agreement
and to the First Lien Agent’s rights under the First Lien Lender Documents.

(c) The First Lien Agent shall have no obligation whatsoever to the Second Lien
Agent or any other Noteholder to assure that the Collateral in the First Lien
Agent’s possession or control is genuine or owned by any Obligor or to preserve
rights or benefits of any Person except as expressly set forth in this
Section 5.5. The duties or responsibilities of the First Lien Agent under this
Section 5.5 shall be limited solely to holding the Collateral in its possession
or control as bailee for the Second Lien Agent for purposes of perfecting the
Lien held by the Second Lien Agent and to using the same degree of care with
respect to such Collateral as the First Lien Agent uses for similar property
pledged to it as collateral for indebtedness generally.

(d) The First Lien Agent shall not have by reason of the Noteholder Collateral
Documents or this Agreement or any other document a fiduciary relationship in
respect of the Second Lien Agent or any other Noteholder.

(e) Upon the First Lien Lender Termination Date, the First Lien Agent shall
deliver to the Second Lien Agent the Collateral in its possession or control (or
in the possession or control of its agents or bailees) together with any
necessary endorsements (or otherwise allow the Second Lien Agent to obtain
control of such Collateral), or as a court of competent jurisdiction may
otherwise direct.

5.6 When Discharge of First Lien Debt Deemed to Not Have Occurred. If at any
time after one of the events described in the definition of the First Lien
Lender Termination Date has occurred the Obligors, either in connection
therewith or thereafter, enter into any Refinancing of any First Lien Lender
Document evidencing First Lien Debt, then such event described in the definition
of First Lien Lender Termination Date shall automatically be deemed not to have
occurred for all purposes of this Agreement (other than with respect to any
actions taken prior to the date of such designation as a result of the
occurrence of such event), and the obligations under such Refinancing shall
automatically be treated as First Lien Debt for all purposes of this Agreement,
including without limitation for purposes of the Lien priorities and rights in
respect of Collateral set forth herein and the First Lien Agent under such
Refinanced First Lien Lender Documents shall be

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the First Lien Agent for all purposes of this Agreement. Upon receipt of written
notice of such designation (including the identity of the new First Lien Agent
thereunder), the Second Lien Agent shall, at the expense of the Borrower,
promptly deliver to the First Lien Agent any Collateral in the Second Lien
Agent’s possession and control together with any necessary endorsements (or
otherwise allow the First Lien Agent to obtain control of such Collateral).

Section 6. Insolvency Proceedings.

6.1 Insolvency Proceedings Generally. This Agreement shall be applicable both
before and after the filing of any petition by or against any Obligor under the
Bankruptcy Code or the commencement of any other Insolvency Proceedings and all
converted or succeeding cases in respect thereof, and all references herein to
any Obligor shall be deemed to apply to the trustee for any Obligor and any
Obligor as debtor-in-possession. The relative rights of the First Lien Agent and
Second Lien Agent in or to any distributions from or in respect of any
Collateral or proceeds of Collateral shall continue after the filing of such
petition on the same basis as prior to the date of the petition, subject to any
court order approving the financing of, or use of cash collateral by, any
Obligor as debtor-in-possession.

6.2 Financing Issues. If any Obligor shall be subject to any Insolvency
Proceeding and the First Lien Agent or any other First Lien Lender shall desire
to permit the use of cash collateral that constitutes Collateral or to permit
any Obligor to obtain financing under Section 363 or Section 364 of the
Bankruptcy Code that is to be secured by any of the Collateral (“DIP
Financing”), and if (x) the DIP Financing is secured by Liens on the Collateral
that are senior to or pari passu with the Liens of the First Lien Lenders on the
Collateral and (y) to the extent the First Lien Lenders receive additional or
replacement liens on post-petition assets in connection with such DIP Financing
and the Second Lien Agent, for the benefit of the Noteholders, receives
additional or replacement liens on such post-petition assets that are junior and
subordinate to the First Lien Lenders’ replacement liens to the same extent as
the Second Lien Agent’s Liens on the Collateral are junior and subordinate to
the First Lien Lenders’ Liens on the Collateral, then the Second Lien Agent, on
behalf of itself and the other Noteholders, agrees that (a) it will not raise
any objection to such use of cash collateral or DIP Financing; provided that the
Second Lien Agent may object to such DIP Financing if (A) any such cash
collateral use or DIP Financing compels any Obligor to seek confirmation of a
specific Plan of Reorganization for which all or substantially all of the
material terms are set forth in the cash collateral order or DIP Financing
documentation, (B) the terms of such DIP Financing or cash collateral use
require any Obligor to seek approval for any Plan of Reorganization that is not
a Conforming Plan of Reorganization, or (C) the terms of such DIP Financing
require the Noteholders to extend additional credit pursuant to such DIP
Financing, (b) it will not request adequate protection or any other relief in
connection therewith that is not otherwise permissable under Section 6.4, and
(c) it will subordinate its Liens in the Collateral to such DIP Financing (and
all obligations secured thereby) on the same basis as the Liens securing the
Noteholder Debt are subordinated to the Liens securing First Lien Debt under
this Agreement.

6.3 Relief from the Automatic Stay. The Second Lien Agent, on behalf of itself
and the other Noteholders, agrees that, until the First Lien Lender Termination
Date, none of them shall seek relief from the automatic stay or any other stay
in any Insolvency Proceeding in respect of the Collateral, without the prior
written consent of the First Lien Agent and the Required Lenders.

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6.4 Adequate Protection. The Second Lien Agent, on behalf of itself and the
other Noteholders, agrees that none of them shall contest (or support any other
Person in contesting) (a) any request by the First Lien Agent or any of the
other First Lien Lenders for adequate protection or (b) any objection by the
First Lien Agent or any other First Lien Lender to any motion, relief, action or
proceeding based on the First Lien Agent or any other First Lien Lender claiming
a lack of adequate protection. Notwithstanding the foregoing, in any Insolvency
Proceeding, (i) if the First Lien Agent or the other First Lien Lenders (or any
subset thereof) are granted adequate protection in the form of replacement Liens
or Liens on additional Collateral in connection with any DIP Financing or use of
its cash collateral under Section 363 or Section 364 of the Bankruptcy Code,
then the Second Lien Agent, on behalf of itself or any other Noteholder, may
seek or request adequate protection in the form of a replacement Lien or a Lien
on such additional Collateral (as applicable), which Lien is subordinated to the
Liens securing the First Lien Debt and such DIP Financing (and all obligations
secured thereby) on the same basis as the other Liens securing the Noteholder
Debt are so subordinated to the Liens securing the First Lien Debt under this
Agreement, (ii) if the First Lien Agent or the other First Lien Lenders (or any
subset thereof) are granted adequate protection in the form of a superpriority
administrative claim in connection with any DIP Financing or use of its cash
collateral under Section 363 or Section 364 of the Bankruptcy Code, then the
Second Lien Agent, on behalf of itself or any other Noteholder, may seek or
request adequate protection in the form of a superpriority administrative claim,
which claim is subordinated to the superpriority claims granted to the First
Lien Agent on the same basis as the other claims of the Noteholders are so
subordinated to the claims of the First Lien Lenders under this Agreement,
(iii) if, notwithstanding the foregoing, the Second Lien Agent or any other
Noteholder is granted a replacement Lien or a Lien on additional Collateral
and/or a superpriority administrative claim as adequate protection for the
Noteholder Debt, but the First Lien Agent is not granted a senior and prior Lien
on the same Collateral or a senior and/or prior administrative claim with
respect to the First Lien Debt (as applicable), then until the First Lien Lender
Termination Date, such replacement Lien or Lein on additional Collateral and/or
superpriority administrative claim (as applicable) shall be assigned to the
First Lien Agent for application to the First Lien Debt to the same extent and
on the same terms as proceeds of the Collateral, and (iv) if the First Lien
Agent or the other First Lien Lenders are granted adequate protection in the
form of payments in the amount of current incurred fees and expenses and/or
other cash payments, or otherwise with the consent of the First Lien Agent, then
the Second Lien Agent and the Noteholders shall not be prohibited from seeking
adequate protection in the form of payments in the amount of current incurred
fees and expenses and/or other cash payments (as applicable), subject to the
right of the First Lien Lenders to object to the reasonableness of the amounts
of fees and expenses or other cash payments so sought by the Second Lien Agent
and the Noteholders.

6.5 No Waiver. Nothing contained herein shall prohibit or in any way limit the
First Lien Agent or any other First Lien Lender from objecting in any Insolvency
Proceeding or otherwise to any action taken by the Second Lien Agent or any
other Noteholder, including, without limitation, action by the Second Lien Agent
or any other Noteholder seeking adequate protection or asserting any of its
rights and remedies under the Noteholder Documents or otherwise.

6.6 Avoidance Recoveries. If the First Lien Agent or any other First Lien Lender
is required in any Insolvency Proceeding or otherwise to turn over or otherwise
pay to the estate of any Obligor any amount (a “Recovery”), then the relevant
First Lien Debt shall be reinstated to the extent

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of such Recovery and the First Lien Agent or such First Lien Lender shall be
entitled to all of the rights and remedies with respect to such Recovery under
the First Lien Lender Documents or otherwise that it would have had if it had
not received the payment that formed the basis for such Recovery. If this
Agreement shall have been terminated prior to such Recovery, this Agreement
shall be reinstated in full force and effect, and such prior termination shall
not diminish, release, discharge, impair or otherwise affect the obligations of
the parties hereto from such date of reinstatement.

6.7 Reorganization Securities. If, in any Insolvency Proceeding, debt
obligations of the reorganized debtor secured by Liens upon any property of the
reorganized debtor are distributed, pursuant to a plan of reorganization or
similar dispositive restructuring plan, both on account of First Lien Debt and
Noteholder Debt, then, to the extent the debt obligations distributed on account
of First Lien Debt and Noteholder Debt are secured by Liens on the same
property, the provisions of this Agreement will survive the distribution of such
debt obligations pursuant to such plan and will apply with like effect to the
Liens securing such debt obligations.

6.8 Asset Sales in Bankruptcy. The Second Lien Agent, for each of the
Noteholders, agrees that it will not object to or oppose a sale or other
disposition of any Collateral or other assets, properties or capital stock
securing the First Lien Debt (or any portion thereof) free and clear of security
interests, liens or other claims under Section 363 of the Bankruptcy Code or any
other provision of the Bankruptcy Code if the First Lien Agent has consented to
such sale or disposition, provided that the Liens of the Second Lien Agent in
such Collateral attach to the proceeds thereof from such sale with the same
priority relative to the Liens of the First Lien Lenders as its Liens in such
Collateral, and provided further that the Second Lien Agent and the Noteholders
may assert any objection to such sale or other disposition that could be
asserted by an unsecured creditor in any Insolvency Proceeding; without limiting
the foregoing, neither the Second Lien Agent nor any other Noteholder may raise
any objections based on rights afforded by Sections 363(e) and (f) of the
Bankruptcy Code to secured creditors (or any comparable provisions of any other
applicable bankruptcy law) with respect to the Liens granted to such person in
respect of such assets.

6.9 Agreement Not to Commence Insolvency Proceeding. The Second Lien Agent, for
and on behalf of the Noteholders, agrees not to initiate or prosecute or
encourage any other person to initiate or prosecute any Insolvency Proceeding
prior to the First Lien Lender Termination Date without the consent of the First
Lien Agent.

6.10 Post-Petition Interest. The Second Lien Agent, on behalf of itself and the
other Noteholders, agrees that none of them shall contest (or support any other
Person in contesting) any request by the First Lien Agent or any of the other
First Lien Lenders for the allowance of a claim for post-petition interest
(whether at the default rate or otherwise). To the extent the First Lien Lenders
are awarded or otherwise granted an allowed claim in any Insolvency Proceeding
with respect to post-petition interest, nothing herein shall prevent the Second
Lien Agent from seeking or otherwise asserting a claim for post-petition
interest to the extent of the value of the Lien of the Second Lien Agent and the
Noteholders on the Collateral (after taking into account the First Lien Debt).

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Section 7. Second Lien Noteholders’ Purchase Option.

7.1 Exercise of Option. On or after the occurrence and during the continuance of
an event of default under the First Lien Credit Agreement and either the
acceleration of all of the First Lien Debt or the receipt by the Second Lien
Agent of written notice from the First Lien Agent of its intention to commence
to foreclose or take any similar action to realize upon the Collateral as
provided in Section 7.5 below, the Noteholders shall have the option at any time
within five (5) Business Days of such acceleration or written notice, upon five
(5) Business Days’ prior written notice by the Second Lien Agent to the First
Lien Agent, to purchase all (but not less than all) of the First Lien Debt from
the First Lien Lenders at the purchase price set forth in Section 7.3. Such
notice from the Second Lien Agent to the First Lien Agent shall be irrevocable.

7.2 Purchase and Sale. On the date specified by the Second Lien Agent in such
notice (which shall not be less than three (3) Business Days, nor more than the
lesser of (a) five (5) Business Days, after the receipt by the First Lien Agent
of the notice from the Second Lien Agent of its election to exercise such option
or (b) ten (10) Business Days after such acceleration or written notice from the
First Lien Agent provided pursuant to Section 7.1 above), First Lien Lenders
shall, subject to any required approval of any court or Governmental Authority
(as defined in the First Lien Credit Agreement) then in effect, if any, sell to
the Noteholders, and the Noteholders shall purchase from First Lien Lenders, all
of the First Lien Debt. Notwithstanding anything to the contrary contained
herein, in connection with any such purchase and sale, the First Lien Lenders
shall retain all rights under the First Lien Lender Documents to be indemnified
or held harmless by the Obligors in accordance with the terms thereof.

7.3 Payment of Purchase Price.

(a) Upon the date of such purchase and sale, the Noteholders shall (i) pay to
the First Lien Agent for the account of the First Lien Lenders as the purchase
price therefor the full amount of all of the First Lien Debt then outstanding
and unpaid (including principal, interest, fees and expenses, including
reasonable attorneys’ fees and legal expenses), (ii) furnish cash collateral to
the First Lien Agent in such amounts as the First Lien Agent determines is
reasonably necessary to secure the First Lien Lenders in connection with any
issued and outstanding letters of credit issued under the First Lien Lender
Documents (but not in any event in an amount greater than one hundred five
(105%) percent of the aggregate undrawn face amount of such letters of credit),
(iii) agree to reimburse the First Lien Lenders for any loss, cost, damage or
expense (including reasonable attorneys’ fees and legal expenses) in connection
with any commissions, fees, costs or expenses related to any issued and
outstanding letters of credit as described above and any checks or other
payments provisionally credited to the First Lien Debt, and/or as to which the
First Lien Lenders have not yet received final payment, and (iv) agree to
reimburse the First Lien Lenders in respect of any and all indemnification
obligations of the Obligors under the First Lien Lender Documents. (b) Such
purchase price and cash collateral shall be remitted by wire transfer in federal
funds to such bank account of the First Lien Agent as the First Lien Agent may
designate in writing to the Second Lien Agent for such purpose. Interest shall
be calculated to but excluding the Business Day on which such purchase and sale
shall occur if the amounts so paid by the Noteholders to the bank account
designated by the First Lien Agent are received in such bank account prior to
12:00 noon, New York City time and interest shall be calculated to and including
such Business Day if the amounts so paid by the Noteholders to the bank account
designated by the First Lien Agent are received in such bank account later than
12:00 noon, New York City time.

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7.4 Representations Upon Purchase and Sale. Such purchase shall be expressly
made without representation or warranty of any kind by First Lien Lenders as to
the First Lien Debt, the Collateral or otherwise and without recourse to First
Lien Lenders, except that each First Lien Lender shall represent and warrant,
severally, as to it: (a) the principal amount of the First Lien Debt being
purchased from it are as reflected in the books and records of such First Lien
Lender (but without representation or warranty as to the collectibility,
validity or enforceability or any other matter in respect thereof), (b) that
such First Lien Lender owns the First Lien Debt being sold by it free and clear
of any liens or encumbrances and (c) such First Lien Lender has the right to
assign the First Lien Debt being sold by it and the assignment is duly
authorized. Upon the purchase by the Noteholders of the First Lien Debt, the
Noteholders agree to indemnify and hold the First Lien Lenders harmless from and
against all loss, cost, damage or expense (including reasonable attorneys’ fees
and legal expenses) suffered or incurred by the First Lien Lenders arising from
or in any way relating to acts or omissions of the First Lien Agent or any other
First Lien Lender after the purchase.

7.5 Notice from First Lien Agent Prior to Enforcement Action. In the absence of
an Exigent Circumstance (as defined below), the First Lien Agent agrees that it
will give the Second Lien Agent five (5) Business Days prior written notice of
its intention to commence any foreclosure or other action to sell or otherwise
realize upon the Collateral. In the event that during such five (5) Business Day
period, the Second Lien Agent shall send to the First Lien Agent the irrevocable
notice of the intention of the Noteholders to exercise the purchase option given
by the First Lien Lenders to the Noteholders under this Section 7, the First
Lien Lenders shall not commence any foreclosure or other action to sell or
otherwise realize upon the Collateral; provided that, the purchase and sale with
respect to the First Lien Debt provided for herein shall have closed within five
(5) Business Days thereafter and the First Lien Lenders shall have received
final payment in full of the First Lien Debt as provided for herein within such
five (5) Business Day period. Notwithstanding the foregoing, if an Exigent
Circumstance exists, the First Lien Agent will give Second Lien Agent notice as
soon as practicable and in any event contemporaneously with the taking of such
action. As used herein “Exigent Circumstance” shall mean an event or
circumstance that materially and imminently threatens the ability of the First
Lien Agent to realize upon all or any portion of the Collateral, such as,
without limitation, a competing claim, fraudulent removal, concealment,
destruction (other than to the extent covered by insurance), material waste or
abscondment thereof.

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Section 8. Reliance; Waivers; etc.

8.1 Reliance. The consent by the First Lien Lenders to the Lien on the
Collateral granted to the Second Lien Agent on behalf of the Noteholders, and
all loans and other extensions of credit made or deemed made on and after the
date hereof by the First Lien Agent or any other First Lien Lender to the
Obligors, shall be deemed to have been given and made in reliance upon this
Agreement. The First Lien Agent, on behalf of the First Lien Lenders,
acknowledges that it and the other First Lien Lenders have, independently and
without reliance on the Second Lien Agent or any other Noteholder, and based on
documents and information deemed by them appropriate, made their own credit
analysis and decision to enter into the First Lien Credit Agreement, this
Agreement and the transactions contemplated hereby and thereby, and they will
continue to make their own credit decision in taking or not taking any action
under the First Lien Credit Agreement or this Agreement. The Second Lien Agent,
on behalf the Noteholders, acknowledges that it and the other Noteholders have,
independently and without reliance on the First Lien Agent or any other First
Lien Lender, and based on documents and information deemed by them appropriate,
made their own credit analysis and decision to enter into the Indenture, this
Agreement and the transactions contemplated hereby and thereby, and they will
continue to make their own credit decision in taking or not taking any action
under the Indenture or this Agreement.

8.2 No Warranties or Liability. The First Lien Agent, for and on behalf of the
First Lien Lenders, acknowledges and agrees that neither the Second Lien Agent
nor any other Noteholder has made any express or implied representation or
warranty, including, without limitation, with respect to the execution,
validity, legality, completeness, collectibility, or enforceability of any of
the Noteholder Debt or the Noteholder Documents. The Second Lien Agent, for and
on behalf of the Noteholders, acknowledges and agrees that neither the First
Lien Agent nor any other First Lien Lender has made any express or implied
representation or warranty, including, without limitation, with respect to the
execution, validity, legality, completeness, collectibility, or enforceability
of any of the First Lien Debt or the First Lien Lender Documents. The First Lien
Agent and the other First Lien Lenders will be entitled to manage and supervise
their respective loans and extensions of credit to the Borrower in accordance
with law and as they may otherwise, in their sole discretion, deem appropriate,
and the First Lien Agent and the other First Lien Lenders may manage their loans
and extensions of credit without regard to any rights or interests that the
Second Lien Agent or any other Noteholder have in the Collateral or otherwise,
except as otherwise expressly provided in this Agreement. The First Lien Agent
and the other First Lien Lenders shall have no duty to the Second Lien Agent or
any other Noteholder, and the Second Lien Agent and the other Noteholders shall
have no duty to the First Lien Agent or any other First Lien Lender, to act or
refrain from acting in a manner which allows, or results in, the occurrence or
continuance of an event of default or default under any agreements with any
Obligor (including, without limitation, the Noteholder Documents and the First
Lien Lender Documents), regardless of any knowledge thereof which they may have
or be charged with.

8.3 No Waiver of Lien Priorities.

(a) No right of the First Lien Agent, the other First Lien Lenders, or any of
them, to enforce any provision of this Agreement shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of any Obligor
or by any act or failure to act by the First Lien Agent or any other First Lien
Lender, or by any noncompliance by any Person with the terms,

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provisions and covenants of this Agreement, any of the First Lien Lender
Documents or any of the Noteholder Documents, regardless of any knowledge
thereof which the First Lien Agent or the other First Lien Lenders, or any of
them, may have or be otherwise charged with.

(b) Without in any way limiting the generality of Section 8.3(a) (but subject to
the rights of the Obligors under the First Lien Lender Documents), the First
Lien Agent, the other First Lien Lenders, or any of one or more of them, may, at
any time and from time to time, without the consent of, or notice to, the Second
Lien Agent or any other Noteholder, without incurring any liabilities to the
Second Lien Agent or any other Noteholder and without impairing or releasing the
lien priorities and other benefits provided in this Agreement (even if any right
of subrogation or other right or remedy of the Second Lien Agent or any other
Noteholder is affected, impaired or extinguished thereby) do any one or more of
the following:

(i) change the manner, place or terms of payment or change or extend the time of
payment of, or renew, exchange, amend, increase or alter, the terms of any of
the First Lien Debt or any Lien in any Collateral or guaranty thereof or any
liability of any Obligor or any other Person to the First Lien Agent or any
other First Lien Lender (including, without limitation, any increase in or
extension of any of the First Lien Debt, without any restriction as to the
amount, tenor or terms of any such increase or extension) or otherwise amend,
renew, exchange, extend, modify or supplement in any manner any of the First
Lien Lender Documents;

(ii) subject to the provisions of this Agreement, sell, exchange, release,
surrender, realize upon, enforce or otherwise deal with in any manner and in any
order any part of the Collateral or any liability of any Obligor or any other
Person to the First Lien Agent or any other First Lien Lender, or any liability
incurred directly or indirectly in respect thereof;

(iii) settle or compromise any First Lien Debt or any other liability of any
Obligor or any other Person or any Lien therefor or any liability incurred
directly or indirectly in respect thereof and apply any sums by whomsoever paid
and however realized to any liability (including, without limitation, any of the
First Lien Debt) in any manner or order; and

(iv) exercise or delay in or refrain from exercising any right or remedy against
any Obligor or any other Person or any Collateral or any Lien therefor, elect
any remedy and otherwise deal freely with any Obligor or any other Person or any
Collateral or any Lien therefor.

(c) The Second Lien Agent, on behalf of itself and the other Noteholders, also
agrees that the First Lien Agent and the other First Lien Lenders shall have no
liability to the Second Lien Agent or any other Noteholder, and the Second Lien
Agent, on behalf of itself and the other Noteholders, hereby waives any claim
against the First Lien Agent or any other First Lien Lender, arising out of any
and all actions which the First Lien Agent or any other First Lien Lender may
take or permit or omit to take with respect to: (i) any of the First Lien Lender
Documents, (ii) the collection of any of the First Lien Debt or (iii) the
foreclosure upon, or sale, liquidation or other disposition of, any of the
Collateral. The Second Lien Agent, on behalf of itself and the other
Noteholders, agrees that the First Lien Agent and the other First Lien Lenders
have no duty to them in respect of the maintenance or preservation of the
Collateral, the First Lien Debt or otherwise.

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(d) The Second Lien Agent, on behalf of itself and the other Noteholders, agrees
not to assert and hereby waives, to the fullest extent permitted by law, any
right to demand, request, plead or otherwise assert or otherwise claim the
benefit of, any marshalling, appraisal, valuation or other similar right that
may otherwise be available under applicable law or any other similar rights a
junior secured creditor may have under applicable law.

8.4 Obligations Unconditional. All rights, interests, agreements and obligations
of the First Lien Agent and the other First Lien Lenders and the Second Lien
Agent and the other Noteholders, respectively, hereunder shall remain in full
force and effect irrespective of:

(a) any lack of validity or enforceability of any First Lien Lender Documents or
any Noteholder Documents;

(b) any change in the time, manner or place of payment of, or in any other terms
of, all or any of the First Lien Debt or Noteholder Debt, or any amendment or
waiver or other modification (including, without limitation, any increase in the
amount thereof, whether by course of conduct or otherwise) of the terms of the
First Lien Credit Agreement or any other First Lien Lender Document or of the
terms of the Indenture or any other Noteholder Document;

(c) any amendment, waiver or other modification, whether in writing or by course
of conduct or otherwise, of all or any of the First Lien Debt or Noteholder Debt
or any guarantee thereof;

(d) the commencement of any Insolvency Proceeding in respect of any Obligor; or

(e) any other circumstances which otherwise might constitute a defense available
to, or a discharge of, any Obligor in respect of any of the First Lien Debt, or
of the Second Lien Agent or any other Noteholder in respect of this Agreement.

Nothing in this Section 8.4 shall be construed as a consent or waiver by the
First Lien Agent or any other First Lien Lender to any action by the Second Lien
Agent or the other Noteholders or under any of the Noteholder Documents that is
not otherwise permitted under the First Lien Lender Documents.

Section 9. Miscellaneous.

9.1 Conflicts. In the event of any conflict between the provisions of this
Agreement and the provisions of any of the First Lien Lender Documents or the
Noteholder Documents, the provisions of this Agreement shall govern. In the
event of any conflict between any instruction, request or direction given by the
First Lien Agent to the Second Lien Agent or any other Noteholder hereunder and
any instruction, request or direction given by any First Lien Lender to the
Second Lien Agent or any other Noteholder hereunder, the instruction, request or
direction given by the First Lien Agent shall govern.

9.2 Continuing Nature of this Agreement. This Agreement shall continue to be
effective until the First Lien Lender Termination Date shall have occurred. This
is a continuing agreement of lien subordination and the First Lien Agent and
First Lien Lenders may continue, at any

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time and without notice to the Second Lien Agent or any other Noteholder, to
extend credit and other financial accommodations and lend monies to or for the
benefit of the Obligors in reliance on this Agreement. The Second Lien Agent, on
behalf of itself and the other Noteholders, hereby waives any right it may have
under applicable law to revoke this Agreement or any of the provisions of this
Agreement. The terms of this Agreement shall survive, and shall continue in full
force and effect, in any Insolvency Proceeding.

9.3 Amendments; Waivers. No amendment, modification or waiver of any of the
provisions of this Agreement shall be deemed to be made unless the same shall be
in writing signed by the Second Lien Agent and the First Lien Agent, and each
waiver, if any, shall be a waiver only with respect to the specific instance
involved and shall in no way impair the rights of the parties making such waiver
or the obligations of the other parties to such party in any other respect or at
any other time. The Borrower and Guarantors shall not have any right to amend,
modify or waive any provision of this Agreement, nor shall any consent or signed
writing be required of any of them to effect any amendment, modification or
waiver of any provision of this Agreement. The First Lien Agent and the Second
Lien Agent agree that they will at the request of the Borrower and at the
Borrower’s expense enter into such amendments to this Agreement as may be
necessary to add other parties holding any Permitted Additional Pari Passu
Obligations (as defined in the Indenture) (and any agent or trustee therefor) to
the extent such obligations are not prohibited by the First Lien Credit
Agreement, any other First Lien Lender Document, the Indenture or any other
Noteholder Document and the Borrower delivers an officer’s certificate to such
effect to each of the First Lien Agent and the Second Lien Agent and establish
that the Lien on the Collateral securing such Permitted Additional Pari Passu
Obligations shall be junior and subordinate in all respects to all Liens on the
Collateral securing any First Lien Lenders and shall share in the benefits of
the Collateral equally and ratably with all Liens on the Collateral securing any
Noteholder Debt, and provide to the holders of such Permitted Additional Pari
Passu Obligations (or any agent or trustee thereof) the comparable rights and
benefits (including any improved rights and benefits that have been consented to
by the Second Lien Agent) as are provided to the Noteholders under this
Agreement.

9.4 Information Concerning Financial Condition of the Borrower and its
Subsidiaries. The First Lien Agent and the other First Lien Lenders, on the one
hand, and the Second Lien Agent and the other Noteholders, on the other hand,
shall each be responsible for keeping themselves informed of (a) the financial
condition of the Borrower and its subsidiaries and all Obligors in respect of
the First Lien Debt or the Noteholder Debt, as the case may be, and (b) all
other circumstances bearing upon the risk of nonpayment of the First Lien Debt
or the Noteholder Debt. The First Lien Agent and the other First Lien Lenders
shall have no duty to advise the Second Lien Agent or any other Noteholder of
information known to it or them regarding such condition or any such
circumstances or otherwise and the Second Lien Agent and the other Noteholders
shall have no duty to advise the First Lien Agent or any other First Lien Lender
of information known to it or them regarding such condition or any such
circumstances or otherwise. In the event the First Lien Agent or any other First
Lien Lender or the Second Lien Agent or any other Noteholder, as applicable, in
its or their sole discretion, undertakes at any time or from time to time to
provide any such information to the Second Lien Agent or any other from time to
time Noteholder or the First Lien Agent or any other First Lien Lender, as
applicable, it or they shall not make any express or implied representation or
warranty with respect to such information, including the accuracy, completeness,
truthfulness or

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validity thereof, and shall be under no obligation (x) to provide any additional
information or to provide any such information on any subsequent occasion,
(y) to undertake any investigation or (z) to disclose any information which,
pursuant to accepted or reasonable commercial finance practices, such party
wishes to maintain confidential.

9.5 Consent to Jurisdiction; Waivers. The parties hereto consent to the
exclusive jurisdiction of any state or federal court located in New York, New
York, and consent that all service of process may be made by registered mail
directed to such party as provided in Section 9.7 for such party. Service so
made shall be deemed to be completed four (4) Business Days after the same shall
be posted as aforesaid. The parties hereto waive any objection to any action
instituted hereunder based on forum non conveniens, and any objection to the
venue of any action instituted hereunder. Each of the parties hereto waives any
right it may have to trial by jury in respect of any litigation based on, or
arising out of, under or in connection with this Agreement, or any course of
conduct, course of dealing, verbal or written statement or action of any party
hereto.

9.6 Application of Payments. As between the First Lien Agent and the other First
Lien Lenders, on the one hand, and the Second Lien Agent and the other
Noteholders, on the other hand, all payments received by the First Lien Agent or
the other First Lien Lenders may be applied, reversed and reapplied, in whole or
in part, to such part of the First Lien Debt as the First Lien Agent and/or the
other First Lien Lenders, in their sole discretion, deem appropriate. The Second
Lien Agent, on behalf of itself and the other Noteholders, assents to any
extension or postponement of the time of payment of the First Lien Debt or any
part thereof and to any other indulgence with respect thereto, to any
substitution, exchange or release of any Collateral which may at any time secure
any part of the First Lien Debt and to the addition or release of any other
Person primarily or secondarily liable therefor.

9.7 Notices. All notices to the Noteholders and the First Lien Lenders permitted
or required under this Agreement shall be sent to the Second Lien Agent and the
First Lien Agent, respectively. Unless otherwise specifically provided herein,
any notice or other communication herein required or permitted to be given shall
be in writing and may be personally served, telecopied, electronically mailed or
sent by courier service or U.S. mail and shall be deemed to have been given when
delivered in person or by courier service, upon receipt of a telecopy or
electronic mail or four (4) Business Days after deposit in the U.S. mail
(registered or certified, with postage prepaid and properly addressed). For the
purposes hereof, the addresses of the parties hereto shall be as set forth below
each party’s name on the signature pages hereto, or, as to each party, at such
other address as may be designated by such party in a written notice to all of
the other parties.

9.8 Further Assurances. The Second Lien Agent, for and on behalf of the
Noteholders, agrees that each of them shall take such further action and shall
execute and deliver to the First Lien Agent and the other First Lien Lenders
such additional documents and instruments (in recordable form, if requested) as
the First Lien Agent or the other First Lien Lenders may reasonably request to
effectuate the terms of and the lien priorities contemplated by this Agreement.
The First Lien Agent, for and on behalf of the First Lien Lenders, agrees that
each of them shall take such further action and shall execute and deliver to the
Second Lien Agent and the Noteholders such additional documents and instruments
(in recordable form, if requested) as the Second Lien Agent or the Noteholders
may reasonably request to effectuate the terms of and the lien priorities
contemplated by this Agreement.

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9.9 Governing Law. This Agreement has been delivered and accepted at and shall
be deemed to have been made at New York, New York and shall be governed by and
construed and enforced in accordance with the laws of the State of New York.

9.10 Specific Performance. Each of the First Lien Agent and Second Lien Agent
may demand specific performance of this Agreement. The Second Lien Agent, for
and on behalf of the Noteholders, and the First Lien Agent, for and on behalf of
the First Lien Lenders, hereby irrevocably waive any defense based on the
adequacy of a remedy at law and any other defense which might be asserted to bar
the remedy of specific performance in any action which may be brought by the
First Lien Agent or the Second Lien Agent, as the case may be.

9.11 Section Titles; Time Periods; Capacities. The section titles contained in
this Agreement are and shall be without substantive meaning or content of any
kind whatsoever and are not a part of this Agreement. In the computation of time
periods, unless otherwise specified, the word “from” means “from and including”
and each of the words “to” and “until” means “to but excluding” and the word
“through” means “to and including”. All references to the Borrower or any
Guarantor shall include the Borrower or such Guarantor as an obligor under the
First Lien Lender Documents, regardless of its capacity as a borrower or
guarantor thereunder.

9.12 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be an original and all of which shall together constitute
one and the same document. Delivery of an executed counterpart of this Agreement
by telefacsimile or electronic transmission shall be equally as effective as
delivery of an original executed counterpart of this Agreement. Any party
delivering an executed counterpart of this Agreement by telefacsimile or
electronic transmission also shall deliver an original executed counterpart of
this Agreement, but the failure to deliver an original executed counterpart
shall not affect the validity, enforceability, and binding effect of this
Agreement.

9.13 Authorization. By its signature, each Person executing this Agreement on
behalf of a party hereto represents and warrants to the other parties hereto
that it is duly authorized to execute this Agreement.

9.14 Binding on Successors and Assigns; No Third Party Beneficiaries. This
Agreement and the obligations, rights and benefits hereof shall bind and inure
to the benefit of the First Lien Agent and the other First Lien Lenders and
their respective successors and assigns and the Second Lien Agent and the other
Noteholders and their respective successors and assigns. No other Person shall
have or be entitled to assert rights or benefits hereunder.

9.15 The Second Lien Agent. Each party hereto hereby acknowledges and agrees
that the Second Lien Agent is entering into this Agreement solely in its
capacity as Second Lien Agent under the Noteholder Documents and not in its
individual capacity. The Second Lien Agent shall not be deemed to owe any
fiduciary duty to the First Lien Agent or the other First Lien Lenders. The
Second Lien Agent undertakes to perform and observe only such covenants and
obligations as are specifically set forth herein, and no implied covenants or
obligations shall be read into this Agreement against the Second Lien Agent.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

 

FIRST LIEN AGENT:     WELLS FARGO BANK, NATIONAL ASSOCIATION, as     First Lien
Agent     By:  

 

    Name:       Title:   SECOND LIEN AGENT:     [                             ],
    as Second Lien Agent     By:  

 

    Name:       Title:  

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ACKNOWLEDGMENT

Borrower and each of Borrower’s undersigned Subsidiaries each hereby acknowledge
that they have received a copy of the foregoing Intercreditor Agreement (as in
effect on the date hereof, the “Initial Intercreditor Agreement”) and agree to
recognize all rights granted by the Initial Intercreditor Agreement to First
Lien Agent, the other First Lien Lenders, Second Lien Agent, and the
Noteholders, waive the provisions of Section 9-615(a) of the UCC in connection
with the application of proceeds of Collateral in accordance with the provisions
of the Initial Intercreditor Agreement, agree that they will not do any act or
perform any obligation which is not in accordance with the agreements set forth
in the Initial Intercreditor Agreement. Borrower and each of Borrower’s
undersigned Subsidiaries each further acknowledge and agree that they are not an
intended beneficiary or third party beneficiary under the Initial Intercreditor
Agreement, as amended, restated, supplemented, or otherwise modified hereafter.

ACKNOWLEDGED AS OF THE DATE FIRST WRITTEN ABOVE:

 

BORROWER:

    GENCORP INC.,     an Ohio corporation     By:  

 

    Name:   Kathleen E. Redd     Title:   Vice President and Chief Financial
Officer GUARANTORS:     AEROJET-GENERAL CORPORATION,     an Ohio corporation    
By:  

 

    Name:   Kathleen E. Redd     Title:   Vice President and Chief Financial
Officer