Exhibit 10.5

 

 

 

INTERCREDITOR AGREEMENT

 

among

 

PROSPECT MEDICAL HOLDINGS, INC.

as the Company

 

and

 

CERTAIN SUBSIDIARIES OF THE COMPANY

FROM TIME TO TIME PARTIES HERETO

as Guarantors,

 

and

 

ROYAL BANK OF CANADA,

as First Lien Collateral Agent

 

and

 

U.S. BANK NATIONAL ASSOCIATION,

as Second Lien Collateral Agent

 

and

 

ROYAL BANK OF CANADA,

as Control Agent

 

Dated as of July 29, 2009

 

 

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE I DEFINITIONS

2

SECTION 1.01

Defined Terms

2

SECTION 1.02

Other Interpretive Provisions

10

 

 

 

ARTICLE II LIEN PRIORITIES

11

SECTION 2.01

Relative Priorities

11

SECTION 2.02

Failure to Perfect

11

SECTION 2.03

Nature of First Lien Obligations

11

SECTION 2.04

Prohibition on Contesting Liens

12

SECTION 2.05

No New Liens

12

SECTION 2.06

Similar Liens and Agreements

13

 

 

 

ARTICLE III ENFORCEMENT

14

SECTION 3.01

Exercise of Remedies

14

SECTION 3.02

Actions Upon Breach

16

 

 

 

ARTICLE IV PAYMENTS

17

SECTION 4.01

Application of Proceeds

17

SECTION 4.02

Payments Over

17

 

 

 

ARTICLE V OTHER AGREEMENTS

18

SECTION 5.01

Releases

18

SECTION 5.02

Insurance

18

SECTION 5.03

Amendments to First Lien Documents and Second Lien Documents

19

SECTION 5.04

Rights As Unsecured Creditors

20

SECTION 5.05

Control Agent for Perfection

21

SECTION 5.06

When Discharge of First Lien Obligations Deemed to Not Have Occurred

23

 

 

 

ARTICLE VI INSOLVENCY OR LIQUIDATION PROCEEDINGS

24

SECTION 6.01

Finance and Sale Issues

24

SECTION 6.02

Relief from the Automatic Stay

24

SECTION 6.03

Adequate Protection

25

SECTION 6.04

No Waiver

26

SECTION 6.05

Avoidance Issues

26

SECTION 6.06

Separate Grants of Security and Separate Classification

26

SECTION 6.07

Reorganization Securities

26

SECTION 6.08

Post-Petition Claims

26

SECTION 6.09

Waiver

27

SECTION 6.10

Expense Claims

27

SECTION 6.11

Other Matters

27

SECTION 6.12

Effectiveness in Insolvency or Liquidation Proceedings

27

 

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SECTION 6.13

Limitation of Applicability

28

 

 

 

ARTICLE VII RELIANCE; WAIVERS; ETC.

28

SECTION 7.01

Non-Reliance

28

SECTION 7.02

No Warranties or Liability

28

SECTION 7.03

Obligations Unconditional

29

SECTION 7.04

Certain Notices

30

 

 

 

ARTICLE VIII MISCELLANEOUS

30

SECTION 8.01

Inconsistencies with Other Documents

30

SECTION 8.02

Effectiveness; Continuing Nature of this Agreement; Severability

30

SECTION 8.03

Amendments; Waivers

31

SECTION 8.04

Information Concerning Financial Condition of the Company and its Subsidiaries

31

SECTION 8.05

Subrogation

32

SECTION 8.06

Application of Payments

32

SECTION 8.07

SUBMISSION TO JURISDICTION

32

SECTION 8.08

Notices

33

SECTION 8.09

Further Assurances

33

SECTION 8.10

APPLICABLE LAW

34

SECTION 8.11

Binding on Successors and Assigns

34

SECTION 8.12

Specific Performance

34

SECTION 8.13

Titles and Captions

34

SECTION 8.14

Counterparts; Integration

34

SECTION 8.15

Authorization

34

SECTION 8.16

No Third Party Beneficiaries

34

SECTION 8.17

Provisions Solely to Define Relative Rights

34

 

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INTERCREDITOR AGREEMENT

 

This INTERCREDITOR AGREEMENT, is dated as of July 29, 2009, and entered into by
and among PROSPECT MEDICAL HOLDINGS, INC., a Delaware corporation (“Holdings” or
the “Company”), each of the Subsidiaries of Holdings identified on the signature
pages hereof as a Guarantor (such Subsidiaries, the “Guarantors”), ROYAL BANK OF
CANADA, in its capacity as administrative agent for the First Lien Obligations
(as defined below), including its successors and assigns from time to time (the
“First Lien Collateral Agent”), U.S. BANK NATIONAL ASSOCIATION, in its capacity
as collateral agent in respect of the Second Lien Obligations (as defined
below), including its successors and assigns from time to time (the “Second Lien
Collateral Agent”) and ROYAL BANK OF CANADA, in its capacity as Control Agent
(as defined below) for the First Lien Collateral Agent and the Second Lien
Collateral Agent.  Capitalized terms used herein but not otherwise defined
herein have the meanings set forth in Article I below.

 

RECITALS

 

WHEREAS, the Company, the lenders party thereto from time to time, and Royal
Bank of Canada, as administrative agent, have entered into that certain Credit
Agreement dated as of the date hereof providing for a revolving credit facility
to the Company (as amended, restated, supplemented, modified or Refinanced from
time to time, the “Credit Agreement”);

 

WHEREAS, the Company, the Guarantors and U.S. Bank National Association, as
trustee, have entered into that certain Indenture dated as of the date hereof in
respect of the Company’s 2014 Notes (as amended, restated, supplemented,
modified or Refinanced from time to time, the “Indenture”);

 

WHEREAS, (a) the obligations of the Company and the Guarantors under the Credit
Agreement and the other First Lien Documents, (b) any Secured Hedge Agreement,
and (c) any Secured Cash Management Agreement will be secured, in part, by the
Controlled Accounts and the Accounts of the Company and the Guarantors and the
proceeds thereof (whether by sale or collection) and the Controlled Accounts
pursuant to the terms of the First Lien Collateral Documents;

 

WHEREAS, the obligations of the Company and the Guarantors under the Indenture
and the other Second Lien Documents will be secured, in part, the Accounts of
the Company and the Guarantors and the proceeds thereof (whether by sale or
collection) and the Controlled Accounts pursuant to the terms of the Second Lien
Collateral Documents;

 

WHEREAS, the First Lien Documents and the Second Lien Documents provide, among
other things, that the parties thereto shall set forth in this Agreement their
respective rights and remedies with respect to the Collateral; and

 

WHEREAS, in order to induce the First Lien Collateral Agent and the First Lien
Claimholders to consent to the incurrence by the Grantors (as defined below) of
the Second Lien Obligations and to induce the First Lien Claimholders to extend
credit and other financial accommodations to or for the benefit of the Company,
or any other Grantor, the Second Lien

 

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Collateral Agent on behalf of the Second Lien Claimholders has agreed to the
lien subordination, intercreditor and other provisions set forth in this
Agreement.

 

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

 

ARTICLE I
DEFINITIONS

 

SECTION 1.01               Defined Terms.  As used in the Agreement, the
following terms shall have the following meanings:

 

“2014 Notes” means the Company’s senior secured notes due 2014 issued under the
Indenture.

 

“Accounts” has the meaning ascribed to such term in the UCC, but shall not
include Designated Accounts (as defined in the Shared Collateral Agreement).

 

“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.

 

“Agreement” means this Intercreditor Agreement, as amended, restated
supplemented or otherwise modified from time to time.

 

“Attributable Indebtedness” means, on any date, (a) in respect of any
Capitalized Lease of any Person, the capitalized amount thereof that would
appear on a balance sheet of such Person prepared as of such date in accordance
with GAAP, (b) in respect of any Synthetic Lease Obligation, the capitalized
amount of the remaining lease or similar payments under the relevant lease or
other applicable agreement or instrument that would appear on a balance sheet of
such Person prepared as of such date in accordance with GAAP if such lease or
other agreement or instrument were accounted for as a Capitalized Lease and
(c) all Synthetic Debt of such Person.

 

“Bankruptcy Code” means title 11 of the United States Code entitled
“Bankruptcy,” as now and hereafter in effect, or any successor statute.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the laws of, or are in fact
closed in, New York, New York.

 

“Capitalized Lease” means all leases that have been or should be, in accordance
with GAAP, recorded as capitalized leases.

 

“Cash Management Agreement” means any agreement to provide cash management
services, including treasury, depository, overdraft, credit or debit card,
electronic funds transfer and other cash management arrangements.

 

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“Cash Management Bank” means any Person that, at the time it enters into a Cash
Management Agreement, is a Lender or an Affiliate of a Lender, in its capacity
as a party to such Cash Management Agreement.

 

“Collateral” means the assets and property of any Grantor, whether tangible or
intangible, constituting both First Lien Collateral and Second Lien Collateral.

 

“Company” has the meaning set forth in the preamble of this Agreement.

 

“Control Agent” has the meaning set forth in Section 5.05(a).

 

“Control Collateral” means any Collateral consisting of any cash and any other
Collateral as to which a first priority Lien shall or may be perfected through
possession or control by the secured party or any agent therefor.

 

“Controlled Accounts” means those certain Deposit Accounts of any Grantor
subject to Liens under the terms of the First Lien Collateral Documents and the
Second Lien Collateral Documents and subject to control or a control agreement
in favor of the Control Agent.

 

“Credit Agreement” has the meaning assigned thereto in the recitals.

 

“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors generally.

 

“Deposit Account” has the meaning ascribed to such term in the UCC.

 

“DIP Financing” has the meaning set forth in Section 6.01.

 

“Discharge of First Lien Obligations” means, except to the extent otherwise
provided in Section 5.06, (a) payment in full in cash of the principal of and
interest (including interest accruing on or after the commencement of any
Insolvency or Liquidation Proceeding, whether or not a claim for such interest
is, or would be, allowed in such Insolvency or Liquidation Proceeding, in which
case such interest shall be repaid from funds otherwise possibly available to
the Second Lien Claimholders) and premium, if any, on all Indebtedness
outstanding under the First Lien Documents and termination of all commitments to
lend or otherwise extend credit under the First Lien Documents, (b) payment in
full in cash of all other First Lien Obligations that are due and payable or
otherwise accrued and owing at or prior to the time such principal and interest
are paid (including legal fees and other expenses, costs or charges accruing on
or after the commencement of any Insolvency or Liquidation Proceeding, whether
or not a claim for such fees, expenses, costs or charges is, or would be,
allowed in such Insolvency or Liquidation Proceeding), (c) termination of any
Secured Hedge Agreement and the payment in full in cash of all obligations
thereunder, (d) termination of any Secured Cash Management Agreement and the
payment in full in cash of all obligations thereunder, (e) termination or cash
collateralization (in an amount reasonably satisfactory to the First Lien

 

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Collateral Agent not to exceed 105%) of all letters of credit issued under the
First Lien Documents, and (f) adequate provision has been made for any
contingent or unliquidated First Lien Obligations related to claims, causes of
action, or liabilities that have been asserted or threatened against the Lenders
or the First Lien Claimholders or that otherwise can be reasonably identified
based on the then known facts and circumstances.

 

“Disposition” has the meaning set forth in Section 5.01(a)(ii).

 

“Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting.

 

“Exercise of Remedies” has the meaning set forth in Section 5.01(a)(i).

 

“First Lien Claimholders” means, at any relevant time, the holders of First Lien
Obligations at such time, including, without limitation, the Lenders and any
agent under the Credit Agreement.

 

“First Lien Collateral” means “Collateral” as defined in the First Lien Security
Agreement.

 

“First Lien Collateral Agent” has the meaning set forth in the preamble hereof.

 

“First Lien Collateral Documents” means the First Lien Security Agreement and
any other agreement, document or instrument pursuant to which a Lien is granted
on assets intended to constitute First Lien Collateral which secures any First
Lien Obligations or under which rights or remedies with respect to such Liens
are governed.

 

“First Lien Documents” means the Credit Agreement and the Loan Documents (as
defined in the Credit Agreement), First Lien Collateral Documents and each of
the other agreements, documents and instruments providing for or evidencing any
other First Lien Obligation, and any other document or instrument executed or
delivered at any time in connection with any First Lien Obligations, including
any intercreditor or joinder agreement among holders of First Lien Obligations,
to the extent such are effective at the relevant time, as each may be modified
from time to time in accordance with their terms.

 

“First Lien Obligations” means all (a) outstanding “Obligations” as defined in
and arising under the Credit Agreement and the other First Lien Documents (it
being understood, for avoidance of doubt, that obligations owed to a Hedge Bank
and/or a Cash Management Bank that is both a First Lien Claimholder and a Second
Lien Claimholder at the time such Secured Hedge Agreement and/or Secured Cash
Management Agreement was entered into by the Company shall be considered First
Lien Obligations) and (b) any DIP Financing.  “First Lien Obligations” shall
include (i) all interest accrued or accruing (or which would, absent

 

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commencement of an Insolvency or Liquidation Proceeding, accrue) in accordance
with the rate specified in the relevant First Lien Document and (ii) all fees,
costs and charges incurred in connection with the First Lien Documents and
provided for thereunder (including, without limitation, legal fees), in the case
of clause (i) and (ii) whether before or after commencement of an Insolvency or
Liquidation Proceeding and irrespective of whether any claim for such interest,
fees, costs or charges is allowed as a claim in such Insolvency or Liquidation
Proceeding.

 

“First Lien Security Agreement” means that certain First Lien Collateral
Agreement in respect of the First Lien Collateral dated the date hereof from the
Grantors in favor of the First Lien Collateral Agent, as amended, restated,
supplemented or otherwise modified from time to time.

 

“GAAP” means generally accepted accounting principles in the United States as in
effect as of the date hereof and as set forth in the opinions and pronouncements
of the Accounting Principles Board and the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board or such other principles as may be approved by a significant
segment of the accounting profession in the United States, that are applicable
to the circumstances as of the date of determination, consistently applied.

 

“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).

 

“Grantors” means the Company and each of the Guarantors that have executed and
delivered, or may from time to time hereafter execute and deliver, a First Lien
Collateral Document or a Second Lien Collateral Document.

 

“Guarantee” means, as to any Person, any (a) obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien).  The amount of any

 

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Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith.  The term “Guarantee” as a verb has a
corresponding meaning.

 

“Guarantors” has the meaning set forth in the preamble of this Agreement.

 

“Hedge Bank” means any Person that, at the time it enters into a Secured Hedge
Agreement, is a Lender or an Affiliate of a Lender, in its capacity as a party
to such Secured Hedge Agreement.

 

“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

 

(A)           ALL OBLIGATIONS OF SUCH PERSON FOR BORROWED MONEY AND ALL
OBLIGATIONS OF SUCH PERSON EVIDENCED BY BONDS, DEBENTURES, NOTES, LOAN
AGREEMENTS OR OTHER SIMILAR INSTRUMENTS;

 

(B)           THE MAXIMUM AMOUNT OF ALL DIRECT OR CONTINGENT OBLIGATIONS OF SUCH
PERSON ARISING UNDER LETTERS OF CREDIT, INCLUDING STANDBY AND COMMERCIAL, SOLELY
TO THE EXTENT THAT SUCH LETTERS OF CREDIT ARE NOT FULLY CASH COLLATERALIZED,
BANKERS’ ACCEPTANCES, BANK GUARANTIES, SURETY BONDS AND SIMILAR INSTRUMENTS;

 

(C)           NET OBLIGATIONS OF SUCH PERSON UNDER ANY SWAP CONTRACT;

 

(D)           ALL OBLIGATIONS OF SUCH PERSON TO PAY THE DEFERRED PURCHASE PRICE
OF PROPERTY OR SERVICES (OTHER THAN TRADE ACCOUNTS PAYABLE IN THE ORDINARY
COURSE OF BUSINESS AND NOT PAST DUE FOR MORE THAN 90 DAYS AFTER THE DATE ON
WHICH SUCH TRADE ACCOUNT WAS CREATED);

 

(E)           INDEBTEDNESS (EXCLUDING PREPAID INTEREST THEREON) SECURED BY A
LIEN ON PROPERTY OWNED OR BEING PURCHASED BY SUCH PERSON (INCLUDING INDEBTEDNESS
ARISING UNDER CONDITIONAL SALES OR OTHER TITLE RETENTION AGREEMENTS), WHETHER OR
NOT SUCH INDEBTEDNESS SHALL HAVE BEEN ASSUMED BY SUCH PERSON OR IS LIMITED IN
RECOURSE;

 

(F)            ALL ATTRIBUTABLE INDEBTEDNESS IN RESPECT OF CAPITALIZED LEASES
AND SYNTHETIC LEASE OBLIGATIONS OF SUCH PERSON AND ALL SYNTHETIC DEBT OF SUCH
PERSON;

 

(G)           ALL OBLIGATIONS OF SUCH PERSON TO PURCHASE, REDEEM, RETIRE,
DEFEASE OR OTHERWISE MAKE ANY PAYMENT IN RESPECT OF ANY EQUITY INTEREST IN SUCH
PERSON OR ANY OTHER PERSON OR ANY WARRANT, RIGHT OR OPTION TO ACQUIRE SUCH
EQUITY INTEREST, VALUED, IN THE CASE OF A REDEEMABLE PREFERRED INTEREST, AT THE
GREATER OF ITS VOLUNTARY OR INVOLUNTARY LIQUIDATION PREFERENCE PLUS ACCRUED AND
UNPAID DIVIDENDS;

 

(H)           ALL GUARANTEES OF SUCH PERSON IN RESPECT OF ANY OF THE FOREGOING;
AND

 

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(I)            ALL OBLIGATIONS OF SUCH PERSON OWING IN RESPECT OF MEDICARE
AND/OR MEDICAID.

 

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person.  The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date.

 

“Indenture” has the meaning set forth in the Recitals.

 

“Insolvency or Liquidation Proceeding” means (a) any voluntary or involuntary
case or proceeding under the Bankruptcy Code or any other Debtor Relief Law with
respect to any Grantor, (b) any other voluntary or involuntary insolvency,
reorganization or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding with respect to
any Grantor or with respect to a material portion of its respective assets,
(c) any liquidation, dissolution, reorganization or winding up of any Grantor
whether voluntary or involuntary and whether or not involving insolvency or
bankruptcy or (d) any assignment for the benefit of creditors generally or any
other marshalling of assets and liabilities of any Grantor.

 

“Lenders” means the “Lenders” under and as defined in the Credit Agreement.

 

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).

 

“Operating Lease” means, as to any Person as determined in accordance with GAAP,
any lease of property (whether real, personal or mixed) by such Person as lessee
which is not a Capital Lease.

 

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, governmental authority
or other entity.

 

“PMG” means Prospect Medical Group, Inc., a California professional corporation.

 

“PMG Parties” means PMG, each direct or indirect Subsidiary of PMG and each
future direct or indirect subsidiary of PMG.

 

“Recovery” has the meaning set forth in Section 6.05.

 

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“Refinance” means, in respect of any indebtedness, to refinance, replace or
repay, or to issue other indebtedness, in exchange or replacement for, such
indebtedness.  “Refinanced” and “Refinancing” shall have correlative meanings.

 

“Requisite Claimholders” means those lenders under the Credit Agreement or those
Second Lien Claimholders in respect of the Indenture, as applicable, that are
necessary to approve the contemplated action.

 

“Second Lien Claimholders” means, at any relevant time, the holders of Second
Lien Obligations at such time, including, without limitation, the Second Lien
Collateral Agent and any other agent under the Indenture.

 

“Second Lien Collateral” means “Collateral” as defined in the Second Lien
Security Agreement.

 

“Second Lien Collateral Agent” has the meaning set forth in the preamble hereof.

 

“Second Lien Collateral Documents” means the Second Lien Security Agreement and
any other agreement, document or instrument pursuant to which a Lien is granted
on assets intended to constitute Second Lien Collateral which secures any Second
Lien Obligations or under which rights or remedies with respect to such Liens
are governed.

 

“Second Lien Documents” means the Indenture, the 2014 Notes and the Second Lien
Collateral Documents and each of the other agreements, documents and instruments
providing for or evidencing any other Second Lien Obligation, and any other
document or instrument executed or delivered at any time in connection with any
Second Lien Obligations, including any intercreditor or joinder agreement among
holders of Second Lien Obligations, to the extent such are effective at the
relevant time, as each may be modified from time to time in accordance with
their terms.

 

“Second Lien Enforcement Date” means the date which is 120 days after the
occurrence of (a) an Event of Default (under and as defined in the Indenture)
and (b) the First Lien Collateral Agent’s receipt of written notice from the
Second Lien Collateral Agent certifying that (i) an Event of Default (under and
as defined in the Indenture) has occurred and is continuing and (ii) the Second
Lien Obligations are currently due and payable in full (whether as a result of
acceleration thereof or otherwise) in accordance with terms of the Indenture;
provided that the Second Lien Enforcement Date shall be stayed and shall not
occur and shall be deemed not to have occurred (1) at any time the First Lien
Collateral Agent or the First Lien Claimholders have commenced and are
diligently pursuing in good faith any enforcement action with respect to all or
a material portion of the Collateral, (2) at any time any Grantor is then a
debtor under or with respect to (or otherwise subject to) any Insolvency or
Liquidation Proceeding or (3) if the acceleration of the Second Lien Obligations
(if any) is rescinded in accordance with the terms of the Indenture or
otherwise.

 

“Second Lien Obligations” means all (a) outstanding obligations arising under
the Indenture and the other Second Lien Documents.  “Second Lien Obligations”
shall include, without limitation, (i) all principal and interest (including any
Additional Interest (as defined in the Indenture)) accrued or accruing (or which
would, absent commencement of an Insolvency or

 

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Liquidation Proceeding, accrue) in accordance with the rate specified in the
relevant Second Lien Document and (ii) all fees, costs, premium and charges
incurred in connection with the Second Lien Documents and provided for
thereunder (including, without limitation, legal fees), in each case after
commencement of an Insolvency or Liquidation Proceeding irrespective of whether
any claim for such interest, fees, costs, premium or charges is allowed as a
claim in such Insolvency or Liquidation Proceeding.

 

“Second Lien Security Agreement” means that certain Second Lien Collateral
Agreement in respect of the Second Lien Collateral dated the date hereof from
the Grantors in favor of the Second Lien Collateral Agent, as amended, restated,
supplemented or otherwise modified from time to time.

 

“Secured Cash Management Agreement” means any Cash Management Agreement that is
entered into by and between the Company and any Cash Management Bank.

 

“Secured Hedge Agreement” means any interest rate Swap Contract required or
permitted under the Credit Agreement or the Indenture that is entered into by
and between the Company and any Hedge Bank.

 

“Shared Collateral Agreement” means that certain Collateral Agreement dated as
of the date hereof from the Grantors in favor of U.S. Bank National Association,
as collateral agent, for the equal and ratable benefit of (x) Royal Bank of
Canada and the lenders referred to therein and (y) U.S. Bank National
Association, as note trustee and the holders of the 2014 Notes, as such
Collateral Agreement may be amended, supplemented or otherwise modified from
time to time.

 

“Standstill Period” has the meaning set forth in Section 3.01(a)(i)(A) hereof.

 

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or the
right to designate the individual or individuals who own such majority of the
shares of securities or other interests having ordinary voting power is
controlled, directly or indirectly, or both, by such Person.  Unless otherwise
specified or the context otherwise requires, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of
Holdings and shall include the PMG Parties.

 

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any

 

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combination of any of the foregoing (including any options to enter into any of
the foregoing), whether or not any such transaction is governed by or subject to
any master agreement, and (b) any and all transactions of any kind, and the
related confirmations, which are subject to the terms and conditions of, or
governed by, any form of master agreement published by the International Swaps
and Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement (any such master agreement, together
with any related schedules, a “Master Agreement”), including any such
obligations or liabilities under any Master Agreement.

 

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).

 

“Synthetic Debt” means, with respect to any Person as of any date of
determination thereof, all obligations of such Person in respect of transactions
entered into by such Person that are intended to function primarily as a
borrowing of funds but are not otherwise included in the definition of
“Indebtedness” or as a liability on the consolidated balance sheet of such
Person and its Subsidiaries in accordance with GAAP.

 

“Synthetic Lease Obligation” means the monetary obligation of a Person under
(a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property (including sale and leaseback
transactions), in each case, creating obligations that do not appear on the
balance sheet of such Person but which, upon the application of any Debtor
Relief Laws to such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

 

“UCC” means the Uniform Commercial Code as in effect in the State of New York;
provided that, if perfection or the effect of perfection or non-perfection or
the priority of any security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
New York, “UCC” means the Uniform Commercial Code as in effect from time to time
in such other jurisdiction for purposes of the provisions hereof relating to
such perfection, effect of perfection or non-perfection or priority.

 

“United States” means the United States of America.

 

SECTION 1.02               Other Interpretive Provisions.

 

(A)           THE DEFINITIONS OF TERMS HEREIN SHALL APPLY EQUALLY TO THE
SINGULAR AND PLURAL FORMS OF THE TERMS DEFINED.  WHENEVER THE CONTEXT MAY
REQUIRE, ANY PRONOUN SHALL INCLUDE THE CORRESPONDING MASCULINE, FEMININE AND
NEUTER FORMS.  THE WORDS “INCLUDE”, “INCLUDES” AND “INCLUDING” SHALL BE DEEMED
TO BE FOLLOWED BY THE PHRASE “WITHOUT LIMITATION.”  THE WORD “WILL” SHALL BE
CONSTRUED TO HAVE THE SAME MEANING AND EFFECT AS THE WORD “SHALL”.  UNLESS THE
CONTEXT

 

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REQUIRES OTHERWISE (I) ANY DEFINITION OF OR REFERENCE TO ANY AGREEMENT,
INSTRUMENT OR OTHER DOCUMENT HEREIN SHALL BE CONSTRUED AS REFERRING TO SUCH
AGREEMENT, INSTRUMENT OR OTHER DOCUMENT AS FROM TIME TO TIME AMENDED,
SUPPLEMENTED OR OTHERWISE MODIFIED (SUBJECT TO ANY RESTRICTION ON SUCH
AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS SET FORTH HEREIN), (II) ANY REFERENCE
HEREIN TO ANY PERSON SHALL BE CONSTRUED TO INCLUDE SUCH PERSON’S SUCCESSORS AND
ASSIGNS, (III) THE WORDS “HEREIN”, “HEREOF” AND “HEREUNDER”, AND WORDS OF
SIMILAR IMPORT, SHALL BE CONSTRUED TO REFER TO THIS AGREEMENT IN ITS ENTIRETY
AND NOT TO ANY PARTICULAR PROVISION HEREOF, (IV) ALL REFERENCES HEREIN TO
RECITALS, EXHIBITS OR SECTIONS SHALL BE CONSTRUED TO REFER TO RECITALS,
EXHIBITS, ARTICLES OR SECTIONS OF THIS AGREEMENT AND (V) THE WORDS “ASSET” AND
“PROPERTY” SHALL BE CONSTRUED TO HAVE THE SAME MEANING AND EFFECT AND TO REFER
TO ANY AND ALL TANGIBLE AND INTANGIBLE ASSETS AND PROPERTIES, INCLUDING CASH,
SECURITIES, ACCOUNTS AND CONTRACT RIGHTS.

 

(B)           IN THE COMPUTATION OF PERIODS OF TIME FROM A SPECIFIED DATE TO A
LATER SPECIFIED DATE, THE WORD “FROM” MEANS “FROM AND INCLUDING;” THE WORDS “TO”
AND “UNTIL” EACH MEAN “TO BUT EXCLUDING;” AND THE WORD “THROUGH” MEANS “TO AND
INCLUDING.”

 

(C)           SECTION HEADINGS HEREIN ARE INCLUDED FOR CONVENIENCE OF REFERENCE
ONLY AND SHALL NOT AFFECT THE INTERPRETATION OF THIS AGREEMENT.

 

ARTICLE II
LIEN PRIORITIES

 

SECTION 2.01               Relative Priorities.  Notwithstanding the date,
manner or order of grant, attachment or perfection of any Liens securing the
Second Lien Obligations granted on the Collateral or of any Liens securing the
First Lien Obligations granted on the Collateral and notwithstanding any
provision of the UCC, or any applicable law or the Second Lien Documents, the
Second Lien Collateral Agent (on behalf of itself and the Second Lien
Claimholders) hereby agrees that:  (a) any Lien on the Collateral securing any
First Lien Obligations now or hereafter held by or on behalf of the First Lien
Collateral Agent or any First Lien Claimholders or any agent or trustee
therefor, regardless of how acquired, whether by grant, possession, statute,
operation of law, subrogation or otherwise, shall be senior in all respects and
prior to any Lien on the Collateral securing any of the Second Lien Obligations;
and (b) any Lien on the Collateral now or hereafter held by or on behalf of the
Second Lien Collateral Agent, any Second Lien Claimholders or any agent or
trustee therefor regardless of how acquired, whether by grant, possession,
statute, operation of law, subrogation or otherwise, shall be junior and
subordinate in all respects to all Liens on the Collateral securing any First
Lien Obligations.

 

SECTION 2.02               Failure to Perfect.  All Liens on the Collateral
securing any First Lien Obligations shall be and remain senior in all respects
and prior to all Liens on the Collateral securing any Second Lien Obligations
for all purposes, notwithstanding any failure of the First Lien Collateral Agent
or the First Lien Claimholders to adequately perfect its security interests in
the Collateral, the subordination of any Lien on the Collateral securing any
First Lien Obligations to any Lien securing any other obligation of any Grantor,
or the avoidance, invalidation or lapse of any Lien on the Collateral securing
any First Lien Obligations.

 

SECTION 2.03               Nature of First Lien Obligations.  The Second Lien
Collateral Agent (for itself and on behalf of the other Second Lien
Claimholders) acknowledges that (a) the

 

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First Lien Obligations are revolving in nature, (b) the amount thereof that may
be outstanding at any time or from time to time may be increased or reduced and
subsequently reborrowed and (c) the terms of the First Lien Obligations may be
modified, extended or amended from time to time and the aggregate amount of the
First Lien Obligations may be increased or Refinanced, in either event, without
notice to or consent by the Second Lien Claimholders and without affecting the
provisions hereof.  The lien priorities provided in Sections 2.01 and 2.02 shall
not be altered or otherwise affected by any such amendment, modification,
supplement, extension, repayment, reborrowing, increase, replacement, renewal,
restatement or Refinancing of either the First Lien Obligations or the Second
Lien Obligations, or any portion thereof.

 

SECTION 2.04               Prohibition on Contesting Liens.  Each of the Second
Lien Collateral Agent (for itself and on behalf of each Second Lien Claimholder)
and the First Lien Collateral Agent (for itself and on behalf of each First Lien
Claimholder) agrees that it shall not (and hereby waives any right to) contest
or support any other Person in contesting, in any proceeding (including any
Insolvency or Liquidation Proceeding), the priority, validity or enforceability
of a Lien held by or on behalf of any of the First Lien Claimholders in the
First Lien Collateral or by or on behalf of any of the Second Lien Claimholders
in the Second Lien Collateral, as the case may be; provided that nothing in this
Agreement shall be construed to prevent or impair the rights of the First Lien
Collateral Agent or any First Lien Claimholder to enforce this Agreement,
including the priority of the Liens securing the First Lien Obligations as
provided in Sections 2.01 and 3.01.

 

SECTION 2.05               No New Liens.

 

(A)           LIMITATION ON OTHER COLLATERAL FOR FIRST LIEN CLAIMHOLDERS.  SO
LONG AS ANY SECOND LIEN OBLIGATIONS REMAIN OUTSTANDING, AND SUBJECT TO
ARTICLE VI, (I) THE FIRST LIEN COLLATERAL AGENT AGREES THAT, AFTER THE DATE
HEREOF, NEITHER THE FIRST LIEN COLLATERAL AGENT NOR ANY FIRST LIEN CLAIMHOLDER
SHALL ACQUIRE OR HOLD ANY LIEN ON ANY ASSETS OF THE TYPE CONTEMPLATED BY THE
DEFINITION OF “FIRST LIEN COLLATERAL” OF ANY GRANTOR SECURING ANY FIRST LIEN
OBLIGATIONS WHICH ASSETS ARE NOT ALSO SUBJECT TO THE SECOND-PRIORITY LIEN OF THE
SECOND LIEN COLLATERAL AGENT UNDER THE SECOND LIEN COLLATERAL DOCUMENTS, AND
(II) EACH GRANTOR AGREES NOT TO GRANT ANY LIEN ON ANY ASSETS OF THE TYPE
CONTEMPLATED BY THE DEFINITION OF “FIRST LIEN COLLATERAL”, OR PERMIT ANY OF ITS
SUBSIDIARIES TO GRANT A LIEN ON ANY SUCH ASSETS, IN FAVOR OF THE FIRST LIEN
COLLATERAL AGENT OR THE FIRST LIEN CLAIMHOLDERS UNLESS IT, OR SUCH SUBSIDIARY,
HAS GRANTED A SIMILAR LIEN ON SUCH ASSETS IN FAVOR OF THE SECOND LIEN COLLATERAL
AGENT OR THE SECOND LIEN CLAIMHOLDERS.  IF THE FIRST LIEN COLLATERAL AGENT OR
ANY FIRST LIEN CLAIMHOLDER SHALL (NONETHELESS AND IN BREACH HEREOF) ACQUIRE ANY
LIEN ON ANY ASSETS OF THE TYPE CONTEMPLATED BY THE DEFINITION OF “FIRST LIEN
COLLATERAL” OF ANY GRANTOR OR ANY OF THEIR RESPECTIVE SUBSIDIARIES SECURING ANY
FIRST LIEN OBLIGATIONS WHICH ASSETS ARE NOT ALSO SUBJECT TO THE SECOND-PRIORITY
LIEN OF THE SECOND LIEN COLLATERAL AGENT UNDER THE SECOND LIEN COLLATERAL
DOCUMENTS, THEN THE FIRST LIEN COLLATERAL AGENT (OR THE RELEVANT FIRST LIEN
CLAIMHOLDER), SHALL, WITHOUT THE NEED FOR ANY FURTHER CONSENT OF ANY OTHER
PERSON AND NOTWITHSTANDING ANYTHING TO THE CONTRARY IN ANY OTHER FIRST LIEN
DOCUMENT (X) IN ADDITION TO HOLDING SUCH LIEN FOR THE BENEFIT OF ITSELF AND THE
OTHER FIRST LIEN CLAIMHOLDERS AS SECURITY FOR THE FIRST LIEN OBLIGATIONS, ALSO
HOLD AND BE DEEMED TO HAVE HELD SUCH LIEN FOR THE BENEFIT OF THE SECOND LIEN
COLLATERAL AGENT AS SECURITY FOR THE SECOND LIEN OBLIGATIONS SUBJECT TO THE
PRIORITIES SET FORTH HEREIN OR (Y) RELEASE SUCH LIEN.

 

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(B)           LIMITATION ON OTHER COLLATERAL FOR SECOND LIEN CLAIMHOLDERS. 
UNTIL THE DATE UPON WHICH THE DISCHARGE OF FIRST LIEN OBLIGATIONS SHALL HAVE
OCCURRED, (I) THE SECOND LIEN COLLATERAL AGENT AGREES THAT, AFTER THE DATE
HEREOF, NEITHER THE SECOND LIEN COLLATERAL AGENT NOR ANY SECOND LIEN CLAIMHOLDER
SHALL ACQUIRE OR HOLD ANY LIEN ON ANY ASSETS OF THE TYPE CONTEMPLATED BY THE
DEFINITION OF “SECOND LIEN COLLATERAL” OF ANY GRANTOR SECURING ANY SECOND LIEN
OBLIGATIONS WHICH ASSETS ARE NOT ALSO SUBJECT TO THE SENIOR PRIORITY LIEN OF THE
FIRST LIEN COLLATERAL AGENT UNDER THE FIRST LIEN COLLATERAL DOCUMENTS, AND
(II) EACH GRANTOR AGREES NOT TO GRANT ANY LIEN ON ANY ASSETS OF THE TYPE
CONTEMPLATED BY THE DEFINITION OF “SECOND LIEN COLLATERAL”, OR PERMIT ANY OF ITS
SUBSIDIARIES TO GRANT A LIEN ON ANY SUCH ASSETS, IN FAVOR OF THE SECOND LIEN
COLLATERAL AGENT OR THE SECOND LIEN CLAIMHOLDERS UNLESS IT, OR SUCH SUBSIDIARY,
HAS GRANTED A SIMILAR LIEN ON SUCH ASSETS IN FAVOR OF THE FIRST LIEN COLLATERAL
AGENT OR THE FIRST LIEN CLAIMHOLDERS.  IF THE SECOND LIEN COLLATERAL AGENT OR
ANY SECOND LIEN CLAIMHOLDER SHALL (NONETHELESS AND IN BREACH HEREOF) ACQUIRE ANY
LIEN ON ANY ASSETS OF THE TYPE CONTEMPLATED BY THE DEFINITION OF “SECOND LIEN
COLLATERAL” OF ANY GRANTOR OR ANY OF THEIR RESPECTIVE SUBSIDIARIES SECURING ANY
SECOND LIEN OBLIGATIONS WHICH ASSETS ARE NOT ALSO SUBJECT TO THE FIRST-PRIORITY
LIEN OF THE FIRST LIEN COLLATERAL AGENT UNDER THE FIRST LIEN COLLATERAL
DOCUMENTS, THEN THE SECOND LIEN COLLATERAL AGENT (OR THE RELEVANT SECOND LIEN
CLAIMHOLDER), SHALL, WITHOUT THE NEED FOR ANY FURTHER CONSENT OF ANY OTHER
PERSON AND NOTWITHSTANDING ANYTHING TO THE CONTRARY IN ANY OTHER SECOND LIEN
DOCUMENT (X) IN ADDITION TO HOLDING SUCH LIEN FOR THE BENEFIT OF ITSELF AND THE
OTHER SECOND LIEN CLAIMHOLDERS AS SECURITY FOR THE SECOND LIEN OBLIGATIONS, ALSO
HOLD AND BE DEEMED TO HAVE HELD SUCH LIEN FOR THE BENEFIT OF THE FIRST LIEN
COLLATERAL AGENT AS SECURITY FOR THE FIRST LIEN OBLIGATIONS OR (Y) RELEASE SUCH
LIEN.

 

SECTION 2.06               Similar Liens and Agreements.  The parties hereto
agree that it is their intention that the First Lien Collateral and the Second
Lien Collateral be identical.  In furtherance of the foregoing and of
Section 8.09, the parties hereto agree, subject to the other provisions of this
Agreement:

 

(A)           UPON REQUEST BY THE FIRST LIEN COLLATERAL AGENT OR THE SECOND LIEN
COLLATERAL AGENT, TO COOPERATE IN GOOD FAITH (AND TO DIRECT THEIR COUNSEL TO
COOPERATE IN GOOD FAITH) FROM TIME TO TIME IN ORDER TO DETERMINE THE SPECIFIC
ITEMS INCLUDED IN THE FIRST LIEN COLLATERAL AND THE SECOND LIEN COLLATERAL AND
THE STEPS TAKEN TO PERFECT THEIR RESPECTIVE LIENS THEREON AND THE IDENTITY OF
THE RESPECTIVE PARTIES OBLIGATED UNDER THE FIRST LIEN DOCUMENTS AND THE SECOND
LIEN DOCUMENTS; AND

 

(B)           THAT THE DOCUMENTS AND AGREEMENTS CREATING OR EVIDENCING THE LIENS
ON THE FIRST LIEN COLLATERAL AND THE SECOND LIEN COLLATERAL SHALL BE IN ALL
MATERIAL RESPECTS THE SAME FORMS OF DOCUMENTS OTHER THAN WITH RESPECT TO THE
SENIOR AND SUBORDINATE NATURE OF THE SECURITY INTERESTS IN THE COLLATERAL
SECURING THE RESPECTIVE FIRST LIEN OBLIGATIONS AND SECOND LIEN OBLIGATIONS
THEREUNDER.

 

In addition, to the extent any guaranty is entered into by any Grantor in
respect of the Second Lien Obligations (whether or not the First Lien Collateral
Agent or First Lien Claimholders have consented thereto), a guaranty by such
Person shall be entered into in respect of the First Lien Obligations, and for
all purposes hereunder such Person shall be deemed a guarantor of the First Lien
Obligations and the Second Lien Obligations.  Furthermore, to the extent any
guaranty is entered into by any Grantor in respect of the First Lien Obligations
(whether or not the Second

 

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Lien Agent or the Second Lien Claimholders have consented thereto), a guaranty
by such Person shall be entered into in respect of the Second Lien Obligations
and, for all purposes hereunder, such Person shall be deemed a guarantor of the
Second Lien Obligations and the First Lien Obligations.

 

ARTICLE III
ENFORCEMENT

 

SECTION 3.01               Exercise of Remedies.

 

(A)           SO LONG AS THE DISCHARGE OF FIRST LIEN OBLIGATIONS HAS NOT
OCCURRED, WHETHER OR NOT ANY INSOLVENCY OR LIQUIDATION PROCEEDING HAS BEEN
COMMENCED BY OR AGAINST THE COMPANY OR ANY OTHER GRANTOR:

 

(I)            THE SECOND LIEN COLLATERAL AGENT AND THE SECOND LIEN
CLAIMHOLDERS:

 

(A)          from the date hereof until the occurrence of the Second Lien
Enforcement Date (such period, the “Standstill Period”), will not exercise or
seek to exercise any rights or remedies (including any right of set-off or
recoupment) with respect to any Collateral (including, without limitation, the
exercise of any right under any lockbox agreement, account control or collection
agreement or similar agreement or arrangement to which the Second Lien
Collateral Agent or any Second Lien Claimholder is a party) or institute or
commence (or join with any other Person in commencing) any enforcement,
collection, execution, levy or foreclosure action or proceeding (including,
without limitation, any Insolvency or Liquidation Proceeding) with respect to
any Lien held by it under the Second Lien Collateral Documents;

 

(B)           will not contest, protest or object to any foreclosure proceeding
or action brought by the First Lien Collateral Agent or any First Lien
Claimholder or any other exercise by the First Lien Collateral Agent or any
First Lien Claimholder, of any rights and remedies relating to the Collateral
under the First Lien Collateral Documents, including, but not limited to, any
motion by the First lien Collateral agent to sell the Collateral pursuant to
Section 363 of the Bankruptcy Code, provided that the respective interests of
the Second Lien Claimholders attach to the proceeds thereof, subject to the
relative priorities described in Article II; provided, however, that this
Section 3.01(B) shall constitute consent by the Second Lien Collateral Agent and
the Second Lien Claimholders pursuant to Section 363(f) of the Bankruptcy Code
to the Section 363 sale of any or all of the Collateral; and

 

(C)           subject to the rights of the Second Lien Collateral Agent under
clause (i)(A) above, will not object to the forbearance by the First Lien
Collateral Agent or the First Lien Claimholders from bringing or

 

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pursuing any foreclosure proceeding or action or any other exercise of any
rights or remedies relating to the Collateral; and

 

(II)           SUBJECT TO SECTION 5.01, UNTIL THE DISCHARGE OF THE FIRST LIEN
OBLIGATIONS, THE FIRST LIEN COLLATERAL AGENT AND THE FIRST LIEN CLAIMHOLDERS
SHALL HAVE THE EXCLUSIVE RIGHT TO ENFORCE RIGHTS, EXERCISE REMEDIES (INCLUDING
SET-OFF AND THE RIGHT TO CREDIT BID THEIR DEBT) AND MAKE DETERMINATIONS
REGARDING THE RELEASE, DISPOSITION, OR RESTRICTIONS WITH RESPECT TO THE
COLLATERAL WITHOUT ANY CONSULTATION WITH OR THE CONSENT OF THE SECOND LIEN
COLLATERAL AGENT OR ANY SECOND LIEN CLAIMHOLDER; PROVIDED, THAT

 

(A)          in any Insolvency or Liquidation Proceeding commenced by or against
the Company or any other Grantor, the Second Lien Collateral Agent may file a
claim or statement of interest with respect to the Second Lien Obligations;

 

(B)           the Second Lien Collateral Agent may take any action (not adverse
to the Liens on the Collateral securing the First Lien Obligations, or the
rights of any First Lien Collateral Agent or the First Lien Claimholders to
exercise remedies in respect thereof) in order to preserve or protect its Lien
on the Collateral;

 

(C)           the Second Lien Claimholders shall be entitled to file any
responsive or defensive pleadings in opposition to any motion, claim, adversary
proceeding or other pleading made by any person objecting to or otherwise
seeking the disallowance of the claims of the Second Lien Claimholders,
including, without limitation, any claims secured by the Collateral, if any, in
each case in accordance with the terms of this Agreement;

 

(D)          the Second Lien Claimholders shall be entitled to file any
pleadings, objections, motions or agreements which assert rights or interests
available to unsecured creditors of the Grantors arising under either the Debtor
Relief Law or applicable non-bankruptcy law;

 

(E)           the Second Lien Claimholders shall be entitled to file any proof
of claim and other filings and make any arguments and motions that are, in each
case, in accordance with the terms of this Agreement, with respect to the Second
Lien Obligations and the Collateral;

 

(F)           the Second Lien Claimholders shall be entitled, in any Insolvency
or Liquidation Proceeding, to vote on any plan of reorganization, to the extent
consistent with the provisions hereof; and

 

(G)           the Second Lien Collateral Agent or any Second Lien Claimholder
may exercise any of its rights or remedies with respect to the Collateral upon
the occurrence and during the effective continuation of the Second Lien
Enforcement Date.

 

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In exercising rights and remedies with respect to the Collateral, the First Lien
Collateral Agent and the First Lien Claimholders may enforce the provisions of
the First Lien Documents and exercise remedies thereunder, all in such order and
in such manner as they may determine advisable in the exercise of their sole
discretion.  Such exercise and enforcement shall include the rights of an agent
appointed by the First Lien Collateral Agent and the First Lien Claimholders to
sell or otherwise dispose of Collateral upon foreclosure, to incur expenses in
connection with such sale or disposition, and to exercise all the rights and
remedies of a secured creditor under the UCC of any applicable jurisdiction and
of a secured creditor under Debtor Relief Laws of any applicable jurisdiction.

 

(B)           THE SECOND LIEN COLLATERAL AGENT (ON BEHALF OF ITSELF AND THE
SECOND LIEN CLAIMHOLDERS) AGREES THAT IT WILL NOT TAKE OR RECEIVE ANY COLLATERAL
OR ANY PROCEEDS OF COLLATERAL IN CONNECTION WITH THE EXERCISE OF ANY RIGHT OR
REMEDY (INCLUDING SET-OFF OR RECOUPMENT) WITH RESPECT TO ANY COLLATERAL, AND
THAT ANY COLLATERAL OR PROCEEDS TAKEN OR RECEIVED BY IT WILL BE PAID OVER TO THE
FIRST LIEN COLLATERAL AGENT PURSUANT TO SECTION 4.02, UNLESS AND UNTIL THE
DISCHARGE OF FIRST LIEN OBLIGATIONS HAS OCCURRED, EXCEPT AS EXPRESSLY PROVIDED
IN THE PROVISO IN SECTION 3.01(A)(II) AND SECTION 6.07.  WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, UNLESS AND UNTIL THE DISCHARGE OF FIRST LIEN
OBLIGATIONS HAS OCCURRED, EXCEPT AS EXPRESSLY PROVIDED IN THE PROVISO IN
SECTION 3.01(A)(II), THE SOLE RIGHT OF THE SECOND LIEN COLLATERAL AGENT AND THE
SECOND LIEN CLAIMHOLDERS WITH RESPECT TO THE COLLATERAL IS TO HOLD A LIEN ON THE
COLLATERAL PURSUANT TO THE SECOND LIEN COLLATERAL DOCUMENTS FOR THE PERIOD AND
TO THE EXTENT GRANTED THEREIN AND TO RECEIVE A SHARE OF THE PROCEEDS THEREOF, IF
ANY, AFTER THE DISCHARGE OF THE FIRST LIEN OBLIGATIONS HAS OCCURRED IN
ACCORDANCE WITH THE TERMS OF THE SECOND LIEN DOCUMENTS AND APPLICABLE LAW.

 

(C)           SUBJECT TO THE PROVISO IN SECTION 3.01(A)(II) AND SECTION 6.01,
(I) THE SECOND LIEN COLLATERAL AGENT (ON BEHALF OF ITSELF AND THE SECOND LIEN
CLAIMHOLDERS) AGREES THAT THE SECOND LIEN COLLATERAL AGENT AND THE SECOND LIEN
CLAIMHOLDERS WILL NOT TAKE ANY ACTION THAT WOULD HINDER, DELAY OR IMPEDE ANY
EXERCISE OF REMEDIES UNDER THE FIRST LIEN COLLATERAL DOCUMENTS, INCLUDING ANY
SALE, LEASE, EXCHANGE, TRANSFER OR OTHER DISPOSITION OF THE COLLATERAL, WHETHER
BY FORECLOSURE OR OTHERWISE, AND (II) THE SECOND LIEN COLLATERAL AGENT (ON
BEHALF OF ITSELF AND THE SECOND LIEN CLAIMHOLDERS) HEREBY WAIVES ANY AND ALL
RIGHTS IT OR THE SECOND LIEN CLAIMHOLDERS MAY HAVE AS A JUNIOR LIEN CREDITOR OR
OTHERWISE TO OBJECT TO THE MANNER OR ORDER IN WHICH THE FIRST LIEN COLLATERAL
AGENT OR THE FIRST LIEN CLAIMHOLDERS SEEK TO ENFORCE THE LIENS GRANTED IN ANY OF
THE FIRST LIEN COLLATERAL.

 

(D)           THE SECOND LIEN COLLATERAL AGENT HEREBY ACKNOWLEDGES AND AGREES
THAT NO COVENANT, AGREEMENT OR RESTRICTION CONTAINED IN THE SECOND LIEN
COLLATERAL DOCUMENTS SHALL BE DEEMED TO RESTRICT IN ANY WAY THE RIGHTS AND
REMEDIES OF THE FIRST LIEN COLLATERAL AGENT OR THE FIRST LIEN CLAIMHOLDERS WITH
RESPECT TO THE COLLATERAL AS SET FORTH IN THIS AGREEMENT AND THE FIRST LIEN
COLLATERAL DOCUMENTS.

 

SECTION 3.02               Actions Upon Breach.

 

(A)           IF ANY SECOND LIEN CLAIMHOLDER, CONTRARY TO THIS AGREEMENT,
COMMENCES OR PARTICIPATES IN ANY ACTION OR PROCEEDING AGAINST THE COMPANY, ANY
OTHER GRANTOR OR THE COLLATERAL, THE COMPANY OR SUCH GRANTOR, WITH THE PRIOR
WRITTEN CONSENT OF THE FIRST LIEN COLLATERAL AGENT, MAY INTERPOSE AS A DEFENSE
OR DILATORY PLEA THE MAKING OF THIS AGREEMENT, AND

 

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THE FIRST LIEN COLLATERAL AGENT MAY INTERVENE AND INTERPOSE SUCH DEFENSE OR PLEA
IN ITS NAME, IN THE NAME OF THE FIRST LIEN CLAIMHOLDERS OR IN THE NAME OF THE
COMPANY OR SUCH GRANTOR.

 

(B)           SHOULD ANY SECOND LIEN CLAIMHOLDER, CONTRARY TO THIS AGREEMENT, IN
ANY WAY TAKE, OR ATTEMPT OR THREATEN TO TAKE, ANY ACTION WITH RESPECT TO THE
COLLATERAL (INCLUDING, WITHOUT LIMITATION, ANY ATTEMPT TO REALIZE UPON OR
ENFORCE ANY REMEDY WITH RESPECT TO THIS AGREEMENT), OR FAIL TO TAKE ANY ACTION
REQUIRED BY THIS AGREEMENT, THE FIRST LIEN COLLATERAL AGENT (IN ITS OWN NAME OR
IN THE NAME OF THE COMPANY) OR THE COMPANY MAY OBTAIN RELIEF AGAINST SUCH SECOND
LIEN CLAIMHOLDER BY INJUNCTION, SPECIFIC PERFORMANCE AND/OR OTHER APPROPRIATE
EQUITABLE RELIEF, IT BEING UNDERSTOOD AND AGREED BY THE SECOND LIEN COLLATERAL
AGENT ON BEHALF OF EACH SECOND LIEN CLAIMHOLDER THAT (I) THE FIRST LIEN
CLAIMHOLDERS’ DAMAGES FROM SUCH ACTIONS MAY BE DIFFICULT TO ASCERTAIN AND MAY BE
IRREPARABLE, AND (II) THE SECOND LIEN COLLATERAL AGENT ON BEHALF OF EACH SECOND
LIEN CLAIMHOLDER WAIVES ANY DEFENSE THAT THE COMPANY, ANY OTHER GRANTOR AND/OR
THE FIRST LIEN CLAIMHOLDERS CANNOT DEMONSTRATE DAMAGE OR BE MADE WHOLE BY THE
AWARDING OF DAMAGES.

 

ARTICLE IV
PAYMENTS

 

SECTION 4.01               Application of Proceeds.  So long as the Discharge of
First Lien Obligations has not occurred, any proceeds of Collateral received in
connection with the sale or other disposition of such Collateral, or collection
on such Collateral upon the exercise of remedies, shall be applied by the First
Lien Collateral Agent to the First Lien Obligations in such order as specified
in the relevant First Lien Documents.  Upon the Discharge of the First Lien
Obligations, the First Lien Collateral Agent shall deliver to the Second Lien
Collateral Agent 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 to be applied by the Second Lien Collateral
Agent to the Second Lien Obligations in such order as specified in the relevant
Second Lien Documents.

 

SECTION 4.02               Payments Over.  So long as the Discharge of First
Lien Obligations has not occurred, any Collateral or proceeds thereof (together
with assets or proceeds subject to Liens referred to in the final sentence of
Section 2.05(b)) received by the Second Lien Collateral Agent or any Second Lien
Claimholders in connection with the exercise of any right or remedy (including
set-off) in respect of the Collateral shall be segregated and held in trust and
forthwith paid over to the First Lien Collateral Agent for the benefit of the
First Lien Claimholders in the same form as received, with any necessary
endorsements or as a court of competent jurisdiction may otherwise direct.  The
First Lien Collateral Agent is hereby authorized to make any such endorsements
as agent for the Second Lien Collateral Agent or any such Second Lien
Claimholders.  This authorization is coupled with an interest and is irrevocable
until such time as this Agreement is terminated in accordance with its terms.

 

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ARTICLE V
OTHER AGREEMENTS

 

SECTION 5.01               Releases.

 

(A)           IF, IN CONNECTION WITH:

 

(I)            THE EXERCISE OF ANY FIRST LIEN COLLATERAL AGENT’S REMEDIES IN
RESPECT OF THE COLLATERAL, INCLUDING ANY SALE, EXCHANGE, TRANSFER OR OTHER
DISPOSITION OF ANY SUCH COLLATERAL (AN “EXERCISE OF REMEDIES”); OR

 

(II)           ANY SALE, EXCHANGE, TRANSFER OR OTHER DISPOSITION OF ANY
COLLATERAL PERMITTED UNDER THE TERMS OF THE FIRST LIEN DOCUMENTS (WHETHER OR NOT
AN EVENT OF DEFAULT THEREUNDER, AND AS DEFINED THEREIN, HAS OCCURRED AND IS
CONTINUING) (A “DISPOSITION”);

 

the First Lien Collateral Agent (on behalf of itself or any of the First Lien
Claimholders) releases any of its Liens on any part of the Collateral other than
in connection with the Discharge of the First Lien Obligations, then the Liens,
if any, of the Second Lien Collateral Agent, for itself or for the benefit of
the Second Lien Claimholders, on such Collateral shall be automatically,
unconditionally and simultaneously released (the “Second Lien Release”) and the
Second Lien Collateral Agent (on behalf of itself or any such Second Lien
Claimholders) shall promptly execute and deliver to the First Lien Collateral
Agent or such Grantor such termination statements, releases and other documents
as the First Lien Collateral Agent or such Grantor may request to effectively
confirm such release.

 

(B)           UNTIL THE DISCHARGE OF FIRST LIEN OBLIGATIONS OCCURS, THE SECOND
LIEN COLLATERAL AGENT (ON BEHALF OF ITSELF AND THE SECOND LIEN CLAIMHOLDERS)
HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE FIRST LIEN COLLATERAL AGENT AND
ANY OFFICER OR AGENT OF THE FIRST LIEN COLLATERAL 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 COLLATERAL AGENT
OR SUCH HOLDER OR IN THE FIRST LIEN COLLATERAL AGENT’S OWN NAME, FROM TIME TO
TIME IN THE FIRST LIEN COLLATERAL AGENT’S DISCRETION, FOR THE PURPOSE OF
CARRYING OUT THE TERMS OF THIS SECTION 5.01, TO TAKE ANY AND ALL APPROPRIATE
ACTION AND TO EXECUTE ANY AND ALL DOCUMENTS AND INSTRUMENTS WHICH MAY BE
NECESSARY TO ACCOMPLISH THE PURPOSES OF THIS SECTION 5.01, INCLUDING ANY
ENDORSEMENTS OR OTHER INSTRUMENTS OF TRANSFER OR RELEASE.  THIS AUTHORIZATION IS
COUPLED WITH AN INTEREST AND IS IRREVOCABLE UNTIL SUCH TIME AS THIS AGREEMENT IS
TERMINATED IN ACCORDANCE WITH ITS TERMS.

 

(C)           UNTIL THE DISCHARGE OF FIRST LIEN OBLIGATIONS OCCURS, TO THE
EXTENT THAT THE FIRST LIEN COLLATERAL AGENT (ON BEHALF OF ITSELF AND THE FIRST
LIEN CLAIMHOLDERS) (I) HAS RELEASED ANY LIEN ON COLLATERAL AND ANY SUCH LIENS
ARE LATER REINSTATED OR (II) OBTAINS ANY NEW LIENS THEN THE SECOND LIEN
COLLATERAL AGENT (ON BEHALF OF ITSELF AND THE SECOND LIEN CLAIMHOLDERS) SHALL BE
GRANTED A LIEN ON ANY SUCH COLLATERAL SUBJECT TO THE PRIORITIES SET FORTH IN
ARTICLE II.

 

SECTION 5.02               Insurance.  The First Lien Collateral Agent and the
Second Lien Collateral Agent shall be named as additional insureds and the
Control Agent shall be named as loss payee (on behalf of the First Lien
Collateral Agent, the First Lien Claimholders, the Second Lien Collateral Agent
and the Second Lien Claimholders) under any insurance

 

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policies maintained from time to time by any Grantor.  Until the date upon which
the Discharge of First Lien Obligations shall have occurred, as between the
First Lien Collateral Agent and the First Lien Claimholders, on the one hand,
and the Second Lien Collateral Agent and the Second Lien Claimholders on the
other, the First Lien Collateral Agent and the First Lien Claimholders shall
have the sole and exclusive right (a) to adjust or settle any insurance policy
or claim covering any Collateral in the event of any loss thereunder and (b) to
approve any award granted in any condemnation or similar proceeding affecting
any Collateral.  Until the date upon which the Discharge of First Lien
Obligations shall have occurred, all proceeds of any such policy and any such
award in respect of any Collateral that are payable to the First Lien Collateral
Agent and the Second Lien Collateral Agent shall be paid to the First Lien
Collateral Agent for the benefit of the First Lien Claimholders to the extent
required under the First Lien Documents and thereafter to the Second Lien
Collateral Agent for the benefit of the Second Lien Claimholders to the extent
required under the applicable Second Lien Documents and then to the owner of the
subject property or as a court of competent jurisdiction may otherwise direct. 
If the Second Lien Collateral Agent or any Second Lien Claimholder 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 Collateral Agent in accordance with the terms of Section 4.02.

 

SECTION 5.03               Amendments to First Lien Documents and Second Lien
Documents.

 

(A)           UNTIL THE DATE UPON WHICH THE DISCHARGE OF FIRST LIEN OBLIGATIONS
SHALL HAVE OCCURRED, WITHOUT THE PRIOR WRITTEN CONSENT OF THE FIRST LIEN
COLLATERAL AGENT, NO SECOND LIEN 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 SECOND LIEN COLLATERAL
DOCUMENT WOULD CONTRAVENE ANY OF THE TERMS OF THIS AGREEMENT.  THE SECOND LIEN
COLLATERAL AGENT AGREES THAT THE SECOND LIEN SECURITY AGREEMENT SHALL INCLUDE
THE FOLLOWING LANGUAGE OR LANGUAGE SUBSTANTIALLY SIMILAR:

 

“Notwithstanding anything contained herein to the contrary, the lien and
security interest granted to the Trustee, for the benefit of the holders of the
2014 Notes, pursuant to this Agreement, and the exercise of any right or remedy
by the Trustee, for the benefit of the holders of the 2014 Notes, under this
Agreement, are subject to the provisions of the Intercreditor Agreement, dated
as of July 29, 2009 as the same may be amended, restated, supplemented, modified
or replaced from time to time (the ‘Intercreditor Agreement’) by and among Royal
Bank of Canada, as First Lien Collateral Agent, U.S. Bank National Association,
as Second Lien Collateral Agent, Royal Bank of Canada as Control Agent and the
Grantors (as defined therein) from time to time a party thereto.  In the event
of any conflict between the terms of the Intercreditor Agreement and this
Agreement, the terms of the Intercreditor Agreement shall govern and control.”

 

In the event of a Refinancing of the First Lien Obligations not prohibited under
the Indenture, the Control Agent and the Second Lien Collateral Agent agree to
enter into a replacement or amendment of this Agreement to maintain the lien
subordination, intercreditor and other provisions set forth herein.  In the
event of a Refinancing of the Second Lien Obligations permitted under the Credit
Agreement and the Indenture, the First Lien Collateral Agent agrees

 

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to enter into a replacement or amendment of this Agreement to maintain the lien
subordination, intercreditor and other provisions set forth herein.

 

(B)           UNTIL THE DATE UPON WHICH THE DISCHARGE OF FIRST LIEN OBLIGATIONS
SHALL HAVE OCCURRED, IN THE EVENT THE FIRST LIEN COLLATERAL AGENT OR THE FIRST
LIEN CLAIMHOLDERS ENTER INTO ANY AMENDMENT, WAIVER OR CONSENT IN RESPECT OF ANY
OF THE FIRST LIEN COLLATERAL 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 DOCUMENT OR CHANGING IN ANY MANNER THE RIGHTS OF THE FIRST
LIEN COLLATERAL AGENT, THE FIRST LIEN CLAIMHOLDERS, OR THE GRANTORS THEREUNDER,
THEN SUCH AMENDMENT, WAIVER OR CONSENT SHALL AUTOMATICALLY APPLY IN A COMPARABLE
MANNER TO ANY COMPARABLE PROVISION OF THE SECOND LIEN COLLATERAL DOCUMENTS
(WHICH, FOR THE AVOIDANCE OF DOUBT, SHALL NOT INCLUDE THE NOTE COLLATERAL
DOCUMENTS (AS DEFINED IN THE SHARED COLLATERAL AGREEMENT), THE INDENTURE OR THE
2014 NOTES) WITHOUT THE CONSENT OF THE SECOND LIEN COLLATERAL AGENT OR THE
SECOND LIEN CLAIMHOLDERS AND WITHOUT ANY ACTION BY THE SECOND LIEN COLLATERAL
AGENT OR ANY GRANTOR; PROVIDED, HOWEVER, (I) THAT NO SUCH AMENDMENT, WAIVER OR
CONSENT SHALL BE EFFECTIVE TO (A) RELEASE ANY LIEN OF THE SECOND LIEN COLLATERAL
DOCUMENTS, (B) REMOVE ASSETS SUBJECT TO THE LIEN OF THE SECOND LIEN COLLATERAL
DOCUMENTS, (C) ADVERSELY AFFECT THE PERFECTION OR PRIORITY OF ANY SUCH LIEN,
EXCEPT, IN EACH CASE, TO THE EXTENT THAT A RELEASE OF, OR ADVERSE EFFECT ON THE
PERFECTION OR PRIORITY OF, SUCH LIEN IS PERMITTED BY SECTION 5.01 OR ARTICLE VI,
(D) REDUCE THE PRINCIPAL OF, OR INTEREST OR OTHER AMOUNTS PAYABLE ON, ANY AMOUNT
PAYABLE UNDER THE INDENTURE OR ANY SECOND LIEN DOCUMENT, (E) POSTPONE ANY DATE
FIXED FOR ANY PAYMENT OF PRINCIPAL OF, OR INTEREST OR OTHER AMOUNTS PAYABLE ON,
ANY AMOUNTS PAYABLE UNDER THE INDENTURE OR ANY SECOND LIEN DOCUMENT, (F) PERMIT
ANY LIENS ON THE COLLATERAL NOT PERMITTED UNDER THE SECOND LIEN DOCUMENTS OR
ARTICLE VI, OR (G) IMPOSE DUTIES ON THE SECOND LIEN COLLATERAL AGENT, IN EACH
CASE WITHOUT THE CONSENT OF THE SECOND LIEN COLLATERAL AGENT AND (II) NOTICE OF
SUCH AMENDMENT, WAIVER OR CONSENT SHALL HAVE BEEN GIVEN TO THE SECOND LIEN
COLLATERAL AGENT NO LATER THAN 10 DAYS AFTER ITS EFFECTIVENESS (PROVIDED THAT
THE FAILURE TO GIVE SUCH NOTICE SHALL NOT AFFECT THE EFFECTIVENESS OR VALIDITY
THEREOF) PROVIDED FURTHER THAT THIS PARAGRAPH IS INTENDED SOLELY TO SET FORTH
PROVISIONS BY WHICH THE SECOND LIEN COLLATERAL DOCUMENTS SHALL BE AUTOMATICALLY
AFFECTED BY AMENDMENTS, WAIVERS AND CONSENTS GIVEN BY THE FIRST LIEN COLLATERAL
AGENT AND FIRST LIEN CLAIMHOLDERS UNDER THE CREDIT AGREEMENT AND THE FIRST LIEN
COLLATERAL DOCUMENTS AND IS NOT INTENDED TO IMPOSE ANY LIABILITY ON THE FIRST
LIEN COLLATERAL AGENT OR FIRST LIEN CLAIMHOLDERS.

 

SECTION 5.04               Rights As Unsecured Creditors.  The Second Lien
Collateral Agent and the Second Lien Claimholders may exercise rights and
remedies as unsecured creditors against any Grantor in accordance with the terms
of the Second Lien Documents and applicable law.  Except as otherwise set forth
in Section 2.01, nothing in this Agreement shall prohibit the receipt by the
Second Lien Collateral Agent or any Second Lien Claimholders of the required
payments of interest and principal so long as such receipt is not the direct or
indirect result of the exercise by the Second Lien Collateral Agent or any
Second Lien Claimholders of rights or remedies as a secured creditor (including
set-off or recoupment) or enforcement of any Lien created under the Second Lien
Collateral Documents held by any of them.  Nothing in this Agreement impairs or
otherwise adversely affects any rights or remedies the First Lien Collateral
Agent or the First Lien Claimholders may have with respect to the Collateral,
including, without limitation, rights under Section 4.02.  In the event that any
Second Lien Claimholder becomes a judgment Lien creditor as a result of its
enforcement of its rights as an unsecured creditor, such judgment Lien shall be
subject to the terms of this Agreement for all purposes (including in

 

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relation to the Liens securing the First Lien Obligations) to the same extent as
all other Liens securing the Second Lien Obligations (created pursuant to the
Second Lien Collateral Documents) subject to this Agreement.

 

SECTION 5.05               Control Agent for Perfection.

 

(A)           THE FIRST LIEN COLLATERAL AGENT (ON BEHALF OF ITSELF AND THE FIRST
LIEN CLAIMHOLDERS) AND THE SECOND LIEN COLLATERAL AGENT (ON BEHALF OF ITSELF AND
THE SECOND LIEN CLAIMHOLDERS) EACH HEREBY APPOINT ROYAL BANK OF CANADA, AS ITS
COLLATERAL AGENT (IN SUCH CAPACITY, TOGETHER WITH ANY SUCCESSOR IN SUCH CAPACITY
APPOINTED BY THE FIRST LIEN COLLATERAL AGENT AND THE SECOND LIEN COLLATERAL
AGENT, THE “CONTROL AGENT”) FOR THE LIMITED PURPOSE OF ACTING AS THE AGENT ON
BEHALF OF THE FIRST LIEN COLLATERAL AGENT (ON BEHALF OF ITSELF AND THE FIRST
LIEN CLAIMHOLDERS) AND THE SECOND LIEN COLLATERAL AGENT (ON BEHALF OF ITSELF AND
THE SECOND LIEN CLAIMHOLDERS) WITH RESPECT TO THE CONTROL COLLATERAL FOR THE
PURPOSES OF PERFECTING THE LIENS OF SUCH PARTIES ON THE CONTROL COLLATERAL.  THE
CONTROL AGENT ACCEPTS SUCH APPOINTMENT AND AGREES TO HOLD THE CONTROL COLLATERAL
IN ITS POSSESSION OR CONTROL (OR IN THE POSSESSION OR CONTROL OF ITS AGENTS OR
BAILEES) AS CONTROL AGENT FOR THE BENEFIT OF THE FIRST LIEN COLLATERAL AGENT (ON
BEHALF OF ITSELF AND THE FIRST LIEN CLAIMHOLDERS) AND THE SECOND LIEN COLLATERAL
AGENT (ON BEHALF OF ITSELF AND THE SECOND LIEN CLAIMHOLDERS) AND ANY PERMITTED
ASSIGNEE OF ANY THEREOF SOLELY FOR THE PURPOSE OF PERFECTING THE SECURITY
INTEREST GRANTED TO SUCH PARTIES IN SUCH CONTROL COLLATERAL, SUBJECT TO THE
TERMS AND CONDITIONS OF THIS SECTION 5.05.

 

(B)           THE CONTROL AGENT, THE FIRST LIEN COLLATERAL AGENT (ON BEHALF OF
ITSELF AND THE FIRST LIEN CLAIMHOLDERS), AND THE SECOND LIEN COLLATERAL AGENT
(ON BEHALF OF ITSELF AND THE SECOND LIEN CLAIMHOLDERS) EACH HEREBY AGREES THAT
THE FIRST LIEN COLLATERAL AGENT SHALL HAVE THE SOLE AND EXCLUSIVE RIGHT AND
AUTHORITY TO GIVE INSTRUCTIONS TO, AND OTHERWISE DIRECT, THE CONTROL AGENT IN
RESPECT OF THE CONTROL COLLATERAL OR ANY CONTROL AGREEMENT WITH RESPECT TO ANY
CONTROLLED ACCOUNTS UNTIL THE EARLIER OF (I) THE DATE UPON WHICH THE DISCHARGE
OF FIRST LIEN OBLIGATIONS SHALL HAVE OCCURRED AND (II) THE SECOND LIEN
ENFORCEMENT DATE, AND NEITHER THE SECOND LIEN COLLATERAL AGENT NOR ANY SECOND
LIEN CLAIMHOLDER WILL IMPEDE, HINDER, DELAY OR INTERFERE WITH THE EXERCISE OF
SUCH RIGHTS BY THE FIRST LIEN COLLATERAL AGENT IN ANY RESPECT.  THE GRANTORS
HEREBY JOINTLY AND SEVERALLY AGREE TO PAY, REIMBURSE, INDEMNIFY AND HOLD
HARMLESS THE CONTROL AGENT TO THE SAME EXTENT AND ON THE SAME TERMS THAT THE
GRANTORS ARE REQUIRED TO DO SO FOR THE FIRST LIEN COLLATERAL AGENT IN ACCORDANCE
WITH THE CREDIT AGREEMENT.

 

(C)           THE PROVISIONS OF ARTICLE IX OF THE CREDIT AGREEMENT AND
ARTICLE VII OF THE INDENTURE SHALL INURE TO THE BENEFIT OF THE CONTROL AGENT IN
RESPECT OF THIS AGREEMENT, THE FIRST LIEN COLLATERAL DOCUMENTS AND THE SECOND
LIEN COLLATERAL DOCUMENTS AND SHALL BE BINDING UPON ALL GRANTORS, ALL FIRST LIEN
CLAIMHOLDERS AND ALL SECOND LIEN CLAIMHOLDERS AND UPON THE PARTIES HERETO IN
SUCH RESPECT.  IN FURTHERANCE AND NOT IN DEROGATION OF THE RIGHTS, PRIVILEGES
AND IMMUNITIES OF THE CONTROL AGENT THEREIN SET FORTH:

 

(I)            THE CONTROL AGENT IS AUTHORIZED TO TAKE ALL SUCH ACTIONS AS ARE
PROVIDED TO BE TAKEN BY IT AS CONTROL AGENT HEREUNDER, UNDER ANY FIRST LIEN
COLLATERAL DOCUMENT, UNDER ANY SECOND LIEN COLLATERAL DOCUMENT OR AS INSTRUCTED
BY THE FIRST LIEN COLLATERAL AGENT OR THE SECOND LIEN COLLATERAL AGENT AS
PROVIDED HEREIN, IN EACH CASE TOGETHER WITH ALL OTHER ACTIONS REASONABLY

 

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INCIDENTAL THERETO.  AS TO ANY MATTERS NOT EXPRESSLY PROVIDED FOR HEREIN
(INCLUDING, WITHOUT LIMITATION, THE TIMING AND METHODS OF REALIZATION UPON THE
COLLATERAL) OR IN ONE OR MORE OF THE FIRST LIEN COLLATERAL DOCUMENTS OR SECOND
LIEN COLLATERAL DOCUMENTS, THE CONTROL AGENT SHALL ACT OR REFRAIN FROM ACTING IN
ACCORDANCE WITH WRITTEN INSTRUCTIONS FROM THE FIRST LIEN COLLATERAL AGENT OR THE
SECOND LIEN COLLATERAL AGENT, AS APPLICABLE, OR, IN THE ABSENCE OF SUCH
INSTRUCTIONS OR PROVISIONS, IN ACCORDANCE WITH ITS REASONABLE DISCRETION.

 

(II)           THE CONTROL AGENT SHALL NOT BE RESPONSIBLE FOR THE EXISTENCE,
GENUINENESS OR VALUE OF ANY OF THE COLLATERAL OR FOR THE VALIDITY, PERFECTION,
PRIORITY OR ENFORCEABILITY OF ANY LIEN CREATED UNDER AND FIRST LIEN COLLATERAL
DOCUMENT OR SECOND LIEN COLLATERAL DOCUMENT IN ANY OF THE COLLATERAL, WHETHER
IMPAIRED BY OPERATION OF LAW OR BY REASON OF ANY ACTION OR OMISSION TO ACT ON
ITS PART HEREUNDER UNLESS SUCH ACTION OR OMISSION CONSTITUTES GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT.  THE CONTROL AGENT SHALL NOT HAVE A DUTY TO ASCERTAIN OR
INQUIRE AS TO THE PERFORMANCE OR OBSERVANCE OF ANY OF THE TERMS OF THIS
AGREEMENT, ANY FIRST LIEN COLLATERAL DOCUMENT OR ANY SECOND LIEN COLLATERAL
DOCUMENT BY ANY GRANTOR.  THIS AGREEMENT SHALL NOT SUBJECT THE CONTROL AGENT TO
ANY OBLIGATION OR LIABILITY EXCEPT AS EXPRESSLY SET FORTH HEREIN.  IN
PARTICULAR, THE CONTROL AGENT SHALL HAVE NO DUTY TO INVESTIGATE WHETHER THE
OBLIGATIONS OF ANY GRANTOR TO THE FIRST LIEN COLLATERAL AGENT OR THE SECOND LIEN
COLLATERAL AGENT OR ANY OTHER FIRST LIEN CLAIMHOLDER OR SECOND LIEN CLAIMHOLDER
ARE IN DEFAULT OR WHETHER THE FIRST LIEN COLLATERAL AGENT OR THE SECOND LIEN
COLLATERAL AGENT IS ENTITLED UNDER THE FIRST LIEN COLLATERAL DOCUMENTS OR THE
SECOND LIEN COLLATERAL DOCUMENTS, AS APPLICABLE, OR OTHERWISE TO GIVE ANY
INSTRUCTIONS OR NOTICE OF EXCLUSIVE CONTROL.  THE CONTROL AGENT IS FULLY
ENTITLED TO RELY UPON SUCH INSTRUCTIONS AS IT BELIEVES IN GOOD FAITH TO HAVE
ORIGINATED FROM THE FIRST LIEN COLLATERAL AGENT OR THE SECOND LIEN COLLATERAL
AGENT, AS APPLICABLE.

 

(D)           EXCEPT AS SET FORTH BELOW, THE CONTROL AGENT SHALL HAVE NO
OBLIGATION WHATSOEVER TO THE FIRST LIEN COLLATERAL AGENT, THE SECOND LIEN
COLLATERAL AGENT OR ANY FIRST LIEN CLAIMHOLDER OR ANY SECOND LIEN CLAIMHOLDER
INCLUDING, WITHOUT LIMITATION, ANY OBLIGATION TO ASSURE THAT THE CONTROL
COLLATERAL IS GENUINE OR OWNED BY ANY GRANTOR OR ONE OF THEIR RESPECTIVE
SUBSIDIARIES OR TO PRESERVE RIGHTS OR BENEFITS OF ANY PERSON EXCEPT AS EXPRESSLY
SET FORTH IN THIS SECTION 5.05.  IN ACTING ON BEHALF OF THE SECOND LIEN
COLLATERAL AGENT AND THE SECOND LIEN CLAIMHOLDERS AND THE FIRST LIEN COLLATERAL
AGENT AND THE FIRST LIEN CLAIMHOLDERS, THE DUTIES OR RESPONSIBILITIES OF THE
CONTROL AGENT UNDER THIS SECTION 5.05 SHALL BE LIMITED SOLELY TO (I) OBTAINING
“CONTROL” UNDER THE UCC OVER EACH CONTROLLED ACCOUNT AS CONTEMPLATED BY THE
FIRST LIEN COLLATERAL DOCUMENTS AND THE SECOND LIEN COLLATERAL DOCUMENTS IN
ACCORDANCE WITH SECTION 5.05(A), AND (II) DELIVERING SUCH COLLATERAL (OR
OTHERWISE ALLOWING THE SECOND LIEN COLLATERAL AGENT TO OBTAIN CONTROL OF CONTROL
COLLATERAL) AS SET FORTH IN SECTION 5.05(F) AND 5.05(G).  THE RIGHTS OF THE
SECOND LIEN COLLATERAL AGENT WITH RESPECT TO THE COLLATERAL SHALL AT ALL TIMES
BE SUBJECT TO THE TERMS OF THIS AGREEMENT AND TO THE FIRST LIEN COLLATERAL
AGENT’S RIGHTS UNDER THE FIRST LIEN DOCUMENTS.

 

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(E)           NEITHER THE CONTROL AGENT NOR THE FIRST LIEN COLLATERAL AGENT
SHALL HAVE BY REASON OF THE SECOND LIEN DOCUMENTS OR THIS AGREEMENT OR ANY OTHER
DOCUMENT A FIDUCIARY RELATIONSHIP IN RESPECT OF THE SECOND LIEN COLLATERAL AGENT
OR ANY SECOND LIEN CLAIMHOLDER.

 

(F)            UPON THE DISCHARGE OF FIRST LIEN OBLIGATIONS (OTHER THAN IN
CONNECTION WITH A REFINANCING OF THE FIRST LIEN OBLIGATIONS), THE CONTROL AGENT
SHALL DELIVER TO THE SECOND LIEN COLLATERAL AGENT THE CONTROL COLLATERAL
TOGETHER WITH ANY NECESSARY ENDORSEMENTS (OR OTHERWISE ALLOW THE SECOND LIEN
COLLATERAL AGENT TO OBTAIN CONTROL OF SUCH CONTROL COLLATERAL) OR AS A COURT OF
COMPETENT JURISDICTION MAY OTHERWISE DIRECT AND THE SECOND LIEN COLLATERAL AGENT
SHALL ACCEPT AND SUCCEED TO THE ROLE OF THE CONTROL AGENT AS THE AGENT FOR
PERFECTION ON THE CONTROL COLLATERAL.

 

(G)           THE CONTROL AGENT SHALL HAVE AN UNFETTERED RIGHT TO RESIGN AS
CONTROL AGENT UPON THIRTY (30) DAYS NOTICE TO THE FIRST LIEN COLLATERAL AGENT
AND THE SECOND LIEN COLLATERAL AGENT.  UPON THE EFFECTIVE DATE OF SUCH
RESIGNATION, THE CONTROL AGENT SHALL DELIVER THE CONTROL COLLATERAL TO THE
SUCCESSOR CONTROL AGENT (OR OTHERWISE ALLOW THE SUCCESSOR CONTROL AGENT TO
OBTAIN CONTROL OF SUCH CONTROL COLLATERAL).  IF UPON THE EFFECTIVE DATE OF SUCH
RESIGNATION NO SUCCESSOR CONTROL AGENT HAS BEEN APPOINTED BY THE FIRST LIEN
COLLATERAL AGENT AND THE SECOND LIEN COLLATERAL AGENT, THE CONTROL AGENT SHALL
DELIVER TO THE FIRST LIEN COLLATERAL AGENT THE CONTROL COLLATERAL TOGETHER WITH
ANY NECESSARY ENDORSEMENTS (OR OTHERWISE ALLOW THE FIRST LIEN COLLATERAL AGENT
TO OBTAIN CONTROL OF SUCH CONTROL COLLATERAL) OR AS A COURT OF COMPETENT
JURISDICTION MAY OTHERWISE DIRECT AND THE FIRST LIEN COLLATERAL AGENT SHALL
ACCEPT AND SUCCEED TO THE ROLE OF THE CONTROL AGENT AS THE AGENT FOR PERFECTION
ON THE CONTROL COLLATERAL.

 

SECTION 5.06               When Discharge of First Lien Obligations Deemed to
Not Have Occurred.  If at any time after the Discharge of First Lien Obligations
has occurred, the Company thereafter enters into any Refinancing of any First
Lien Document evidencing a First Lien Obligation, which Refinancing is permitted
by the Indenture, then such Discharge of First Lien Obligations 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 first Discharge of First Lien
Obligations), and the obligations under such Refinancing First Lien Document
shall automatically be treated as First Lien Obligations for all purposes of
this Agreement, including for purposes of the Lien priorities and rights in
respect of Collateral set forth herein, and the First Lien Collateral Agent
under such First Lien Documents shall be a First Lien Collateral Agent for all
purposes of this Agreement.  Upon receipt of a notice stating that the Company
has entered into a new First Lien Document (which notice shall include the
identity of the new collateral agent, such agent, the “New Agent”), the Second
Lien Collateral Agent shall promptly (a) enter into such documents and
agreements (including amendments or supplements to this Agreement as the Company
or such New Agent shall reasonably request in order to provide to the New Agent
the rights contemplated hereby, in each case consistent in all material respects
with the terms of this Agreement and (b) deliver to the New Agent any Control
Collateral held by it together with any necessary endorsements (or otherwise
allow the New Agent to obtain control of the Control Collateral).  If the new
First Lien Obligations under the new First Lien Documents are secured by assets
of the Grantors of the type constituting Collateral that do not also secure the
Second Lien Obligations, then the Second Lien Obligations shall be secured at
such time by a Lien on such assets to the same extent provided in the Second
Lien Collateral Documents.

 

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ARTICLE VI
INSOLVENCY OR LIQUIDATION PROCEEDINGS

 

SECTION 6.01               Finance and Sale Issues.  Until the Discharge of
First Lien Obligations has occurred, if the Company or any other Grantor shall
be subject to any Insolvency or Liquidation Proceeding and the First Lien
Collateral Agent shall desire to permit the use of all or a portion of the
Collateral as cash collateral or to permit the Company or any other Grantor to
obtain financing, whether from the First Lien Claimholders or any other entity
under Section 363 or Section 364 of the Bankruptcy Code or any similar Debtor
Relief Law, which financing may include a Refinancing of the First Lien
Obligations (provided that (i) such financing or Refinancing shall be secured by
all or any portion of the Collateral (including assets that but for the
application of Section 552 of the Bankruptcy Code would be Collateral) and
(ii) any such financing, whether or not pursuant to Section 363 or Section 364
of the Bankruptcy Code or any similar Debtor Relief Law, shall not be secured by
any assets of any Grantor other than the Collateral) (each, a “DIP Financing”),
then the Second Lien Collateral Agent (on behalf of itself and the Second Lien
Claimholders) agrees that (a) it will not in respect of the Collateral (i) raise
any objection to, or otherwise contest or interfere with, such use of cash
collateral or DIP Financing, (ii) support any other Person objecting to, such
sale, use, or lease of cash collateral or DIP Financing or (iii) request any
form of adequate protection or any other relief in connection therewith with
respect to the Collateral (except as agreed by the First Lien Collateral Agent
or to the extent expressly permitted by Section 6.03) and, to the extent the
Liens in respect of the Collateral securing the First Lien Obligations are
subordinated to or pari passu with such DIP Financing, the Second Lien
Collateral Agent will subordinate its Liens in the Collateral to (A) the Liens
securing such DIP Financing (and all obligations relating thereto), (B) any
adequate protection provided to the First Lien Claimholders and (C) any
“carve-out” for professional and United States Trustee fees, claims of
reclamation creditors or holders of claims under Section 503(b) of the
Bankruptcy Code agreed to by the First Lien Collateral Agent; and (b) notice
received two (2) calendar days prior to the entry of an order approving such
usage of cash collateral or approving such DIP Financing shall be adequate
notice; provided that the foregoing shall not prohibit the Second Lien
Collateral Agent or the Second Lien Claimholders from objecting solely to any
provisions in any DIP Financing relating to, describing or requiring any
provision or content of a plan of reorganization other than provisions solely
requiring that the DIP Financing be paid in full in cash.  The Second Lien
Collateral Agent (on behalf of itself and the Second Lien Claimholders) agrees
that it will raise no objection to or oppose a sale or other disposition of any
Collateral (and any post-petition assets subject to adequate protection liens in
favor of the First Lien Collateral Agent) free and clear of its Liens or other
claims under Section 363 of the Bankruptcy Code if the Requisite Claimholders
under the Credit Agreement have consented to such sale or disposition of such
assets so long as the respective interests of the Second Lien Claimholders
attach to the proceeds thereof, subject to the terms of this Agreement.  If
requested by the First Lien Collateral Agent in connection therewith, the Second
Lien Collateral Agent shall affirmatively consent to such a sale or disposition.

 

SECTION 6.02               Relief from the Automatic Stay.  Until the Discharge
of First Lien Obligations has occurred, the Second Lien Collateral Agent (on
behalf of itself and the Second Lien Claimholders) agrees that none of them
shall (a) seek relief from the automatic stay or any other stay in any
Insolvency or Liquidation Proceeding in respect of the Collateral, without the
prior written consent of the First Lien Collateral Agent and Requisite
Claimholders

 

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under the First Lien Collateral Agreement, or (b) oppose any request by the
First Lien Collateral Agent or any First Lien Claimholder to seek relief from
the automatic stay or any other stay in any Insolvency or Liquidation Proceeding
in respect of the Collateral.

 

SECTION 6.03               Adequate Protection.

 

(A)           THE SECOND LIEN COLLATERAL AGENT (ON BEHALF OF ITSELF AND THE
SECOND LIEN CLAIMHOLDERS) AGREES THAT NONE OF THEM SHALL CONTEST (OR SUPPORT ANY
OTHER PERSON CONTESTING) (I) ANY REQUEST BY THE FIRST LIEN COLLATERAL AGENT OR
THE FIRST LIEN CLAIMHOLDERS FOR ADEQUATE PROTECTION IN RESPECT OF THE COLLATERAL
OR (II) ANY OBJECTION BY THE FIRST LIEN COLLATERAL AGENT OR THE FIRST LIEN
CLAIMHOLDERS TO ANY MOTION, RELIEF, ACTION OR PROCEEDING BASED ON THE FIRST LIEN
COLLATERAL AGENT OR THE FIRST LIEN CLAIMHOLDERS CLAIMING A LACK OF ADEQUATE
PROTECTION IN RESPECT OF THE COLLATERAL.  IN ANY INSOLVENCY OR LIQUIDATION
PROCEEDING, THE SECOND LIEN COLLATERAL AGENT (ON BEHALF OF ITSELF AND THE SECOND
LIEN CLAIMHOLDERS) MAY SEEK ADEQUATE PROTECTION IN RESPECT OF THE SECOND LIEN
OBLIGATIONS AND THE COLLATERAL, SUBJECT TO THE PROVISIONS OF THIS AGREEMENT,
ONLY IF (X) THE FIRST LIEN CLAIMHOLDERS (OR ANY SUBSET THEREOF) ARE GRANTED
ADEQUATE PROTECTION IN THE FORM OF ADDITIONAL COLLATERAL INCLUDING REPLACEMENT
LIENS ON POST-PETITION COLLATERAL, AND (Y) SUCH ADDITIONAL PROTECTION IS IN THE
FORM OF A LIEN ON SUCH ADDITIONAL COLLATERAL, WHICH LIEN, IF GRANTED, WILL BE
SUBORDINATED TO THE ADEQUATE PROTECTION LIENS SECURING THE FIRST LIEN
OBLIGATIONS AND THE LIENS SECURING ANY DIP FINANCING (AND ALL OBLIGATIONS
RELATING THERETO) ON THE SAME BASIS AS THE OTHER LIENS SECURING THE SECOND LIEN
OBLIGATIONS ARE SO SUBORDINATED TO THE LIENS SECURING THE FIRST LIEN OBLIGATIONS
UNDER THIS AGREEMENT AND THE LIENS SECURING ANY SUCH DIP FINANCING.  IN THE
EVENT THE SECOND LIEN COLLATERAL AGENT (ON BEHALF OF ITSELF OR ANY OF THE SECOND
LIEN CLAIMHOLDERS) SEEKS OR REQUESTS ADEQUATE PROTECTION IN RESPECT OF SECOND
LIEN OBLIGATIONS AND THE COLLATERAL AND SUCH ADEQUATE PROTECTION IS GRANTED IN
THE FORM OF ADDITIONAL COLLATERAL, THEN THE SECOND LIEN COLLATERAL AGENT (ON
BEHALF OF ITSELF AND THE SECOND LIEN CLAIMHOLDERS) AGREES THAT THE FIRST LIEN
COLLATERAL AGENT SHALL ALSO BE GRANTED A LIEN ON SUCH ADDITIONAL COLLATERAL AS
SECURITY FOR THE FIRST LIEN OBLIGATIONS AND FOR ANY DIP FINANCING AND THAT ANY
LIEN ON SUCH ADDITIONAL COLLATERAL SECURING THE SECOND LIEN OBLIGATIONS SHALL BE
SUBORDINATED TO THE LIENS ON SUCH COLLATERAL SECURING THE FIRST LIEN OBLIGATIONS
AND ANY DIP FINANCING (AND ALL OBLIGATIONS RELATING THERETO) AND TO ANY OTHER
LIENS GRANTED TO THE FIRST LIEN CLAIMHOLDERS AS ADEQUATE PROTECTION ON THE SAME
BASIS AS THE OTHER LIENS SECURING THE SECOND LIEN OBLIGATIONS ARE SO
SUBORDINATED TO THE LIENS SECURING THE FIRST LIEN OBLIGATIONS UNDER THIS
AGREEMENT AND THE LIENS SECURING DIP FINANCING.

 

(B)           SIMILARLY, IF THE FIRST LIEN CLAIMHOLDERS (OR ANY SUBSET THEREOF)
ARE GRANTED ADEQUATE PROTECTION IN THE FORM OF A SUPERPRIORITY CLAIM, THEN THE
SECOND LIEN COLLATERAL AGENT (ON BEHALF OF ITSELF OR ANY OF THE SECOND LIEN
CLAIMHOLDERS) MAY SEEK OR REQUEST A SUPERPRIORITY CLAIM, WHICH SUPERPRIORITY
CLAIM WILL BE JUNIOR IN ALL RESPECTS TO THE SUPERPRIORITY CLAIM GRANTED TO THE
FIRST LIEN COLLATERAL AGENT AND THE FIRST LIEN CLAIMHOLDERS, AND, IN THE EVENT
THAT THE SECOND LIEN COLLATERAL AGENT (ON BEHALF OF ITSELF OR ANY OF THE SECOND
LIEN CLAIMHOLDERS) SEEKS OR REQUESTS ADEQUATE PROTECTION IN RESPECT OF SECOND
LIEN OBLIGATIONS AND SUCH ADEQUATE PROTECTION IS GRANTED IN THE FORM OF A
SUPERPRIORITY CLAIM, THEN THE SECOND LIEN COLLATERAL AGENT (ON BEHALF OF ITSELF
AND THE SECOND LIEN CLAIMHOLDERS) AGREES THAT THE FIRST LIEN COLLATERAL AGENT
AND THE PROVIDERS OF ANY DIP FINANCING ALSO SHALL BE GRANTED A SUPERPRIORITY
CLAIM, WHICH SUPERPRIORITY CLAIM WILL BE SENIOR IN ALL RESPECTS TO THE
SUPERPRIORITY CLAIM GRANTED TO THE SECOND LIEN COLLATERAL AGENT AND THE SECOND
LIEN CLAIMHOLDERS.

 

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SECTION 6.04               No Waiver.  Nothing contained herein shall prohibit
or in any way limit the First Lien Collateral Agent or any First Lien
Claimholder from objecting in any Insolvency or Liquidation Proceeding or
otherwise to any action taken by the Second Lien Collateral Agent or any of the
Second Lien Claimholders in respect of the Collateral, including the seeking by
the Second Lien Collateral Agent or any Second Lien Claimholders of adequate
protection in respect of the Collateral or the asserting by the Second Lien
Collateral Agent or any Second Lien Claimholders of any of its rights and
remedies under the Second Lien Documents or otherwise; provided, however, that
this Section 6.04 shall not limit the rights of the Second Lien Claimholders
under the proviso in Section 3.01(a)(ii) or under Section 6.03 or Section 6.08.

 

SECTION 6.05               Avoidance Issues.  If any First Lien Claimholder is
required in any Insolvency or Liquidation Proceeding, or otherwise, to turn over
or otherwise pay to the estate of the Company or any other Grantor any amount in
respect of a First Lien Obligation (a “Recovery”), then such First Lien
Claimholders shall be entitled to a reinstatement of First Lien Obligations with
respect to all such recovered amounts.  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.  Collateral or proceeds thereof received by the
Second Lien Collateral Agent or any Second Lien Claimholder after a Discharge of
First Lien Obligations and prior to the reinstatement of such First Lien
Obligations shall be delivered to the First Lien Collateral Agent upon such
reinstatement in accordance with Section 4.02.

 

SECTION 6.06               Separate Grants of Security and Separate
Classification.  Each of the Grantors, the First Lien Claimholders and the
Second Lien Claimholders acknowledges and agrees that (a) the grants of Liens
pursuant to the First Lien Collateral Documents and the Second Lien Collateral
Documents constitute two separate and distinct grants of Liens and (b) because
of, among other things, their differing rights in the Collateral, the Second
Lien Obligations are fundamentally different from the First Lien Obligations and
must be separately classified in any plan of reorganization proposed or adopted
in an Insolvency or Liquidation Proceeding.

 

SECTION 6.07               Reorganization Securities.  If, in any Insolvency or
Liquidation Proceeding, debt obligations of the reorganized debtor secured by
Liens upon any property of the reorganized debtor of the type contemplated by
the definition of “Collateral” are distributed pursuant to a plan of
reorganization or similar dispositive restructuring plan, both on account of
First Lien Obligations and on account of Second Lien Obligations, then, to the
extent the debt obligations distributed on account of the First Lien Obligations
and on account of the Second Lien Obligations are secured by Liens upon the same
property of the type contemplated by the definition of “Collateral”, 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.

 

SECTION 6.08               Post-Petition Claims.

 

(A)           NEITHER THE SECOND LIEN COLLATERAL AGENT NOR ANY OTHER SECOND LIEN
CLAIMHOLDER SHALL OPPOSE OR SEEK TO CHALLENGE ANY CLAIM BY THE FIRST LIEN
COLLATERAL AGENT OR

 

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ANY FIRST LIEN CLAIMHOLDER FOR ALLOWANCE IN ANY INSOLVENCY OR LIQUIDATION
PROCEEDING OF FIRST LIEN OBLIGATIONS CONSISTING OF POST-PETITION INTEREST, FEES,
COSTS, CHARGES OR EXPENSES TO THE EXTENT OF THE VALUE OF THE FIRST LIEN
COLLATERAL AGENT’S LIEN ON THE COLLATERAL HELD FOR THE BENEFIT OF THE FIRST LIEN
CLAIMHOLDERS, WITHOUT REGARD TO THE EXISTENCE OF THE LIEN OF THE SECOND LIEN
COLLATERAL AGENT ON BEHALF OF THE SECOND LIEN CLAIMHOLDERS ON THE COLLATERAL.

 

(B)           NEITHER THE FIRST LIEN COLLATERAL AGENT NOR ANY OTHER FIRST LIEN
CLAIMHOLDER SHALL OPPOSE OR SEEK TO CHALLENGE ANY CLAIM BY THE SECOND LIEN
COLLATERAL AGENT OR ANY SECOND LIEN CLAIMHOLDER FOR ALLOWANCE IN ANY INSOLVENCY
OR LIQUIDATION PROCEEDING OF SECOND LIEN OBLIGATIONS CONSISTING OF POST-PETITION
INTEREST, FEES, COSTS, CHARGES OR EXPENSES TO THE EXTENT OF THE VALUE OF THE
LIEN OF THE SECOND LIEN COLLATERAL AGENT ON BEHALF OF THE SECOND LIEN
CLAIMHOLDERS ON THE COLLATERAL (AFTER TAKING INTO ACCOUNT THE FIRST LIEN
OBLIGATIONS).

 

SECTION 6.09               Waiver.  The Second Lien Collateral Agent (on behalf
of itself and the Second Lien Claimholders) waives any claim it or they may
hereafter have against the First Lien Collateral Agent or any First Lien
Claimholder arising out of the election of the First Lien Collateral Agent or
any First Lien Claimholder of the application of Section 1111(b)(2) of the
Bankruptcy Code in respect of the Collateral, or out of any cash collateral or
financing arrangement or out of any grant of a security interest in connection
with the Collateral in any Insolvency or Liquidation Proceeding.

 

SECTION 6.10               Expense Claims.  Neither the Second Lien Collateral
Agent nor any Second Lien Claimholder will (a) contest the payment of fees,
expenses or other amounts to the First Lien Collateral Agent or any First Lien
Claimholder under Section 506(b) of the Bankruptcy Code or otherwise to the
extent provided for in the First Lien Credit Agreement or (b) assert or enforce,
at any time prior to the Discharge of First Lien Obligations, any claim under
Section 506(c) of the Bankruptcy Code senior to or on parity with the First Lien
Obligations for costs or expenses of preserving or disposing of any Collateral.

 

SECTION 6.11               Other Matters.  To the extent that the Second Lien
Collateral Agent or any Second Lien Claimholder has or acquires rights under
Section 361, Section 363 or Section 364 of the Bankruptcy Code with respect to
any of the Collateral, the Second Lien Collateral Agent (on behalf of itself and
the Second Lien Claimholders) agrees, unless the Discharge of the First Lien
Obligations has occurred, not to assert any of such rights without the prior
written consent of the First Lien Collateral Agent; provided that if requested
by the First Lien Collateral Agent, the Second Lien Collateral Agent shall
timely exercise such rights in the manner requested by the First Lien Collateral
Agent, including any rights to payments in respect of such rights.

 

SECTION 6.12               Effectiveness in Insolvency or Liquidation
Proceedings.  This Agreement, which the parties hereto expressly acknowledge is
a “subordination agreement” under Section 510(a) of the Bankruptcy Code, shall
be effective before, during and after the commencement of an Insolvency or
Liquidation Proceeding.  All references in this Agreement to any Grantor shall
include such Person as a debtor-in-possession and any receiver or trustee for
such Person in any Insolvency or Liquidation Proceeding.

 

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SECTION 6.13               Limitation of Applicability.  Notwithstanding
anything to the contrary in this Agreement, Article VI hereof shall apply only
with respect to the Collateral and shall not in any way affect the rights of any
of the Collateral Agent (as defined in the Shared Collateral Agreement), the
Note Trustee (as defined in the Shared Collateral Agreement) or the holders of
the 2014 Notes in their respective capacity as an unsecured creditor or as a
result of the Liens held by any of them on other assets of the Company and the
Guarantors not constituting Collateral.

 

ARTICLE VII
RELIANCE; WAIVERS; ETC.

 

SECTION 7.01               Non-Reliance.

 

(A)           THE CONSENT BY THE FIRST LIEN CLAIMHOLDERS TO THE EXECUTION AND
DELIVERY OF THE SECOND LIEN DOCUMENTS AND THE GRANT TO THE SECOND LIEN
COLLATERAL AGENT ON BEHALF OF THE SECOND LIEN CLAIMHOLDERS OF A LIEN ON THE
COLLATERAL AND ALL LOANS AND OTHER EXTENSIONS OF CREDIT MADE OR DEEMED MADE ON
AND AFTER THE DATE HEREOF BY THE FIRST LIEN CLAIMHOLDERS TO THE GRANTORS SHALL
BE DEEMED TO HAVE BEEN GIVEN AND MADE IN RELIANCE UPON THIS AGREEMENT.

 

(B)           THE CONSENT BY THE SECOND LIEN CLAIMHOLDERS TO THE EXECUTION AND
DELIVERY OF THE FIRST LIEN DOCUMENTS AND THE GRANT TO THE FIRST LIEN COLLATERAL
AGENT ON BEHALF OF THE FIRST LIEN CLAIMHOLDERS OF A LIEN ON THE COLLATERAL AND
ALL EXTENSIONS OF CREDIT MADE OR DEEMED MADE ON AND AFTER THE DATE HEREOF BY THE
SECOND LIEN CLAIMHOLDERS TO THE GRANTORS SHALL BE DEEMED TO HAVE BEEN GIVEN AND
MADE IN RELIANCE UPON THIS AGREEMENT.

 

SECTION 7.02               No Warranties or Liability.

 

(A)           THE FIRST LIEN COLLATERAL AGENT (ON BEHALF OF ITSELF AND THE FIRST
LIEN CLAIMHOLDERS) ACKNOWLEDGES AND AGREES THAT EACH OF THE SECOND LIEN
COLLATERAL AGENT AND THE SECOND LIEN CLAIMHOLDERS HAVE MADE NO EXPRESS OR
IMPLIED REPRESENTATION OR WARRANTY, INCLUDING WITH RESPECT TO THE EXECUTION,
VALIDITY, LEGALITY, COMPLETENESS, COLLECTIBILITY OR ENFORCEABILITY OF ANY OF THE
SECOND LIEN DOCUMENTS, THE OWNERSHIP OF ANY COLLATERAL OR THE PERFECTION OR
PRIORITY OF ANY LIENS THEREON.  THE SECOND LIEN CLAIMHOLDERS WILL BE ENTITLED TO
MANAGE AND SUPERVISE THEIR RESPECTIVE EXTENSIONS OF CREDIT UNDER THE SECOND LIEN
DOCUMENTS IN ACCORDANCE WITH LAW AND AS THEY MAY OTHERWISE, IN THEIR SOLE
DISCRETION, DEEM APPROPRIATE.

 

(B)           THE SECOND LIEN COLLATERAL AGENT (ON BEHALF OF ITSELF AND THE
SECOND LIEN CLAIMHOLDERS), ACKNOWLEDGES AND AGREES THAT THE FIRST LIEN
COLLATERAL AGENT AND THE FIRST LIEN CLAIMHOLDERS HAVE MADE NO EXPRESS OR IMPLIED
REPRESENTATION OR WARRANTY, INCLUDING WITH RESPECT TO THE EXECUTION, VALIDITY,
LEGALITY, COMPLETENESS, COLLECTIBILITY OR ENFORCEABILITY OF ANY OF THE FIRST
LIEN DOCUMENTS, THE OWNERSHIP OF ANY COLLATERAL OR THE PERFECTION OR PRIORITY OF
ANY LIENS THEREON.  THE FIRST LIEN CLAIMHOLDERS WILL BE ENTITLED TO MANAGE AND
SUPERVISE THEIR RESPECTIVE LOANS AND EXTENSIONS OF CREDIT UNDER THEIR RESPECTIVE
FIRST LIEN DOCUMENTS IN ACCORDANCE WITH LAW AND AS THEY MAY OTHERWISE, IN THEIR
SOLE DISCRETION, DEEM APPROPRIATE.

 

(C)           THE SECOND LIEN COLLATERAL AGENT AND THE SECOND LIEN CLAIMHOLDERS
SHALL HAVE NO DUTY TO THE FIRST LIEN COLLATERAL AGENT OR ANY OF THE FIRST LIEN
CLAIMHOLDERS, AND THE FIRST LIEN COLLATERAL AGENT AND THE FIRST LIEN
CLAIMHOLDERS SHALL HAVE NO DUTY TO THE SECOND

 

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LIEN COLLATERAL AGENT OR ANY OF THE SECOND LIEN CLAIMHOLDERS, 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 THE
COMPANY OR ANY OTHER GRANTOR (INCLUDING THE FIRST LIEN DOCUMENTS AND THE SECOND
LIEN DOCUMENTS), REGARDLESS OF ANY KNOWLEDGE THEREOF WHICH THEY MAY HAVE OR BE
CHARGED WITH.

 

(D)           THE SECOND LIEN COLLATERAL AGENT (ON BEHALF OF ITSELF AND THE
SECOND LIEN CLAIMHOLDERS) HEREBY WAIVES ALL CLAIMS AGAINST ANY FIRST LIEN
CLAIMHOLDER AND THE FIRST LIEN COLLATERAL AGENT, ARISING OUT OF ANY AND ALL
ACTIONS WHICH THE FIRST LIEN CLAIMHOLDERS OR THE FIRST LIEN COLLATERAL AGENT MAY
TAKE OR PERMIT OR OMIT TO TAKE WITH RESPECT TO THE FORECLOSURE UPON, OR SALE,
LIQUIDATION OR OTHER DISPOSITION OF, ANY COLLATERAL.  THE FIRST LIEN COLLATERAL
AGENT (ON BEHALF OF ITSELF AND THE FIRST LIEN CLAIMHOLDERS) AGREES THAT THE
SECOND LIEN CLAIMHOLDERS AND THE SECOND LIEN COLLATERAL AGENT HAVE NO DUTY TO
THEM IN RESPECT OF THE MAINTENANCE OR PRESERVATION OF THE COLLATERAL, THE SECOND
LIEN OBLIGATIONS OR OTHERWISE.  THE SECOND LIEN COLLATERAL AGENT (ON BEHALF OF
ITSELF AND THE SECOND LIEN CLAIMHOLDERS) AGREES THAT THE FIRST LIEN CLAIMHOLDERS
AND THE FIRST LIEN COLLATERAL AGENT HAVE NO DUTY TO THEM IN RESPECT OF THE
MAINTENANCE OR PRESERVATION OF THE COLLATERAL, THE FIRST LIEN OBLIGATIONS OR
OTHERWISE.

 

(E)           THE SECOND LIEN COLLATERAL AGENT (ON BEHALF OF ITSELF AND THE
SECOND LIEN CLAIMHOLDERS) 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 WITH
RESPECT TO THE COLLATERAL OR ANY OTHER SIMILAR RIGHTS A JUNIOR SECURED CREDITOR
MAY HAVE UNDER APPLICABLE LAW.

 

SECTION 7.03               Obligations Unconditional.  All rights, interests,
agreements and obligations of the First Lien Collateral Agent and the First Lien
Claimholders and the Second Lien Collateral Agent and the Second Lien
Claimholders, respectively, hereunder shall remain in full force and effect
irrespective of:

 

(A)           ANY LACK OF VALIDITY OR ENFORCEABILITY OF ANY FIRST LIEN DOCUMENTS
OR ANY SECOND LIEN DOCUMENTS OR ANY SETTING ASIDE OR AVOIDANCE OF ANY LIEN ON
THE COLLATERAL;

 

(B)           EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT, ANY CHANGE IN THE
TIME, MANNER OR PLACE OF PAYMENT OF, OR IN ANY OTHER TERMS OF, ALL OR ANY OF THE
FIRST LIEN OBLIGATIONS OR SECOND LIEN OBLIGATIONS, OR ANY AMENDMENT OR WAIVER OR
OTHER MODIFICATION, INCLUDING ANY INCREASE IN THE AMOUNT THEREOF, WHETHER BY
COURSE OF CONDUCT OR OTHERWISE, OF THE TERMS OF ANY FIRST LIEN DOCUMENT OR ANY
SECOND LIEN DOCUMENT;

 

(C)           ANY EXCHANGE OF ANY SECURITY INTEREST IN ANY COLLATERAL OR ANY
OTHER COLLATERAL, OR ANY AMENDMENT, WAIVER OR OTHER MODIFICATION, WHETHER IN
WRITING OR BY COURSE OF CONDUCT OR OTHERWISE, OF ALL OR ANY OF THE FIRST LIEN
OBLIGATIONS OR SECOND LIEN OBLIGATIONS OR ANY GUARANTEE THEREOF;

 

(D)           THE COMMENCEMENT OF ANY INSOLVENCY OR LIQUIDATION PROCEEDING IN
RESPECT OF THE COMPANY OR ANY OTHER GRANTOR; OR

 

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(E)           ANY OTHER CIRCUMSTANCES WHICH OTHERWISE MIGHT CONSTITUTE A DEFENSE
AVAILABLE TO, OR A DISCHARGE OF, THE COMPANY OR ANY OTHER GRANTOR IN RESPECT OF
THE FIRST LIEN OBLIGATIONS, OR OF THE SECOND LIEN COLLATERAL AGENT OR ANY SECOND
LIEN CLAIMHOLDER IN RESPECT OF THIS AGREEMENT.

 

SECTION 7.04               Certain Notices.

 

(A)           PROMPTLY UPON THE SATISFACTION OF THE CONDITIONS SET FORTH IN
CLAUSES (A) THROUGH (E) OF THE DEFINITION OF DISCHARGE OF FIRST LIEN
OBLIGATIONS, THE FIRST LIEN COLLATERAL AGENT SHALL DELIVER WRITTEN NOTICE
CONFIRMING SAME TO THE SECOND LIEN COLLATERAL AGENT PROVIDED THAT THE FAILURE TO
GIVE ANY SUCH NOTICE SHALL NOT RESULT IN ANY LIABILITY OF THE FIRST LIEN
COLLATERAL AGENT OR THE FIRST LIEN CLAIMHOLDERS HEREUNDER OR IN THE
MODIFICATION, ALTERATION, IMPAIRMENT, OR WAIVER OF THE RIGHTS OF ANY PARTY
HEREUNDER.

 

(B)           PROMPTLY UPON (OR AS SOON AS PRACTICABLE FOLLOWING) THE
COMMENCEMENT BY THE FIRST LIEN COLLATERAL AGENT OF ANY ENFORCEMENT ACTION OR THE
EXERCISE OF ANY REMEDY WITH RESPECT TO ANY COLLATERAL (INCLUDING BY WAY OF A
PUBLIC OR PRIVATE SALE OF COLLATERAL), THE FIRST LIEN COLLATERAL AGENT SHALL
NOTIFY THE SECOND LIEN COLLATERAL AGENT OF SUCH ACTION; PROVIDED THAT THE
FAILURE TO GIVE ANY SUCH NOTICE SHALL NOT RESULT IN ANY LIABILITY OF THE FIRST
LIEN COLLATERAL AGENT OR THE FIRST LIEN CLAIMHOLDERS HEREUNDER OR IN THE
MODIFICATION, ALTERATION, IMPAIRMENT, OR WAIVER OF THE RIGHTS OF ANY PARTY
HEREUNDER.

 

ARTICLE VIII
MISCELLANEOUS

 

SECTION 8.01               Inconsistencies with Other Documents.  In the event
of any conflict or inconsistency between this Agreement and any First Lien
Collateral Document or any Second Lien Collateral Document, the terms of this
Agreement shall control.  The parties hereto acknowledge that the terms of this
Agreement are not intended (i) to negate any specific rights granted to the
Company in the First Lien Documents and the Second Lien Documents or (ii) to
negate the rights of the Collateral Agent (as defined in the Shared Collateral
Agreement), the Note Trustee (as defined in the Shared Collateral Agreement)
and/or the holders of the 2014 Notes with respect to assets of the Company and
the Grantors (other than the Collateral) granted pursuant to the Indenture, the
Shared Collateral Agreement or other Collateral Documents (as defined in the
Shared Collateral Agreement).

 

SECTION 8.02               Effectiveness; Continuing Nature of this Agreement;
Severability.  This Agreement shall become effective when executed and delivered
by the parties hereto.  This is a continuing agreement of lien subordination and
the First Lien Claimholders may continue, at any time and without notice to the
Second Lien Collateral Agent or any Second Lien Claimholder subject to the
Second Lien Documents, to extend credit and other financial accommodations and
lend monies to or for the benefit of the Company or any Grantor constituting
First Lien Obligations in reliance hereof, subject to the provisions of the
First Lien Documents and the Second Lien Documents.  The Second Lien Collateral
Agent (on behalf of itself and the Second Lien Claimholders), hereby waives any
right it may have under applicable law to revoke this Agreement or any of the
provisions of this Agreement, other than as set forth in this Agreement.  This
Agreement shall survive, and shall continue in full force and effect, in

 

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any Insolvency or Liquidation Proceeding.  Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall not invalidate the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall as to such jurisdiction, be ineffective only to the extent of
such prohibition or unenforceability without invalidating the remainder of such
provision or the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.  All references to
the Company or any other Grantor shall include the Company or such Grantor as
debtor and debtor-in-possession and any receiver or trustee for the Company or
any other Grantor (as the case may be) in any Insolvency or Liquidation
Proceeding.  This Agreement shall terminate and be of no further force and
effect, (a) with respect to the Second Lien Collateral Agent, the Second Lien
Claimholders and the Second Lien Obligations, upon the later of (i) the date
upon which the obligations under the Indenture terminate and payment has been
made in full in cash of all other Second Lien Obligations outstanding on such
date and (ii) if there are other Second Lien Obligations outstanding on such
date, the date upon which such Second Lien Obligations terminate and (b) with
respect to the First Lien Collateral Agent, the First Lien Claimholders and the
First Lien Obligations, the date of Discharge of First Lien Obligations, subject
to the rights of the First Lien Claimholders under Section 5.06 and
Section 6.05.

 

SECTION 8.03               Amendments; Waivers.  No amendment, modification or
waiver of any of the provisions of this Agreement by the Second Lien Collateral
Agent or the First Lien Collateral Agent shall be deemed to be made unless the
same shall be in writing signed on behalf of each party hereto or its authorized
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.  Notwithstanding the foregoing, neither the
Company nor any Grantor shall have any right to consent to or approve any
amendment, modification or waiver of any provision of this Agreement except to
the extent its rights or obligations are directly affected.

 

SECTION 8.04               Information Concerning Financial Condition of the
Company and its Subsidiaries.

 

(A)           THE FIRST LIEN COLLATERAL AGENT AND THE FIRST LIEN CLAIMHOLDERS,
ON THE ONE HAND, AND THE SECOND LIEN CLAIMHOLDERS AND THE SECOND LIEN COLLATERAL
AGENT, ON THE OTHER HAND, SHALL EACH BE RESPONSIBLE FOR KEEPING THEMSELVES
INFORMED OF (I) THE FINANCIAL CONDITION OF THE COMPANY AND ITS SUBSIDIARIES AND
ALL ENDORSERS AND/OR GUARANTORS OF THE FIRST LIEN OBLIGATIONS OR THE SECOND LIEN
OBLIGATIONS AND (II) ALL OTHER CIRCUMSTANCES BEARING UPON THE RISK OF NONPAYMENT
OF THE FIRST LIEN OBLIGATIONS OR THE SECOND LIEN OBLIGATIONS.  THE FIRST LIEN
COLLATERAL AGENT AND THE FIRST LIEN CLAIMHOLDERS SHALL HAVE NO DUTY TO ADVISE
THE SECOND LIEN COLLATERAL AGENT OR ANY SECOND LIEN CLAIMHOLDER OF INFORMATION
KNOWN TO IT OR THEM REGARDING SUCH CONDITION OR ANY SUCH CIRCUMSTANCES OR
OTHERWISE.  IN THE EVENT THE FIRST LIEN COLLATERAL AGENT OR ANY OF THE FIRST
LIEN CLAIMHOLDERS, IN ITS OR THEIR SOLE DISCRETION, UNDERTAKES AT ANY TIME OR
FROM TIME TO TIME TO PROVIDE ANY SUCH INFORMATION TO THE SECOND LIEN COLLATERAL
AGENT OR ANY SECOND LIEN CLAIMHOLDER, IT OR THEY SHALL BE UNDER NO OBLIGATION
(W) TO MAKE, AND THE FIRST LIEN COLLATERAL AGENT AND THE FIRST LIEN CLAIMHOLDERS
SHALL NOT MAKE, ANY EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY, INCLUDING
WITH RESPECT TO THE ACCURACY, COMPLETENESS, TRUTHFULNESS OR VALIDITY OF ANY SUCH
INFORMATION SO PROVIDED, (X) TO PROVIDE ANY ADDITIONAL INFORMATION OR TO PROVIDE
ANY SUCH INFORMATION ON ANY SUBSEQUENT OCCASION, (Y) TO UNDERTAKE ANY
INVESTIGATION OR

 

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(Z) TO DISCLOSE ANY INFORMATION WHICH, PURSUANT TO ACCEPTED OR REASONABLE
COMMERCIAL FINANCE PRACTICES, SUCH PARTY WISHES TO MAINTAIN CONFIDENTIAL OR IS
OTHERWISE REQUIRED TO MAINTAIN CONFIDENTIAL.

 

(B)           THE GRANTORS AGREE THAT ANY INFORMATION PROVIDED TO THE FIRST LIEN
COLLATERAL AGENT, THE SECOND LIEN COLLATERAL AGENT, THE CONTROL AGENT, ANY FIRST
LIEN CLAIMHOLDER OR ANY SECOND LIEN CLAIMHOLDER MAY BE SHARED BY SUCH PERSON
WITH ANY FIRST LIEN CLAIMHOLDER, ANY SECOND LIEN CLAIMHOLDER, THE CONTROL AGENT,
THE FIRST LIEN COLLATERAL AGENT OR THE SECOND LIEN COLLATERAL AGENT
NOTWITHSTANDING A REQUEST OR DEMAND BY SUCH GRANTOR THAT SUCH INFORMATION BE
KEPT CONFIDENTIAL.

 

SECTION 8.05               Subrogation.  The Second Lien Collateral Agent (on
behalf of itself and the Second Lien Claimholders), hereby waives any rights of
subrogation it may acquire as a result of any payment hereunder until the
Discharge of First Lien Obligations has occurred.

 

SECTION 8.06               Application of Payments.  All payments received by
the First Lien Collateral Agent or the First Lien Claimholders with respect to
the Collateral may be applied, reversed and reapplied, in whole or in part, to
such part of the First Lien Obligations provided for in the First Lien
Documents.  The Second Lien Collateral Agent (on behalf of itself and the Second
Lien Claimholders), assents to any extension or postponement of the time of
payment of the First Lien Obligations or any part thereof and to any other
indulgence with respect thereto, to any substitution, exchange or release of any
security which may at any time secure any part of the First Lien Obligations (it
being understood that the First Lien Collateral Agent shall receive only assets
of the type contemplated by the definition of “Collateral” in consideration for
such substitution, exchange or release and that such assets shall be subject to
the Lien of the Second Lien Collateral Agent) and to the addition or release of
any other Person primarily or secondarily liable therefor.

 

SECTION 8.07               SUBMISSION TO JURISDICTION.

 

(A)           EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR
ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, NEW YORK AND OF THE
UNITED STATES DISTRICT COURT SITTING IN THE SOUTHERN DISTRICT OF NEW YORK AND
ANY APPELLATE COURT THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT,
AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN SUCH NEW YORK STATE COURTS OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER FIRST LIEN DOCUMENT
OR SECOND LIEN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE FIRST LIEN COLLATERAL

 

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AGENT, THE SECOND LIEN COLLATERAL AGENT, ANY FIRST LIEN CLAIMHOLDER OR SECOND
LIEN CLAIMHOLDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER FIRST LIEN DOCUMENT OR SECOND LIEN DOCUMENT
AGAINST THE COMPANY OR ANY OTHER GRANTOR OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

 

(B)           EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY
COURT REFERRED TO IN PARAGRAPH (A) OF THIS SECTION.  EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.

 

(C)           EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

SECTION 8.08               Notices.  Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing.  Any
notice shall be effective if delivered by hand delivery or sent via telecopy,
recognized overnight courier service or certified mail, return receipt
requested, and shall be presumed to be received by a party hereto (i) on the
date of delivery if delivered by hand or by telecopy, (ii) on the next Business
Day if sent by recognized overnight courier service and (iii) on the third (3rd)
Business Day following the date sent by certified mail, return receipt
requested.  A telephonic notice to the First Lien Collateral Agent or the
Control Agent as understood by the First Lien Collateral Agent or the Control
Agent will be deemed to be the controlling and proper notice in the event of a
discrepancy with or failure to receive a confirming written notice.

 

SECTION 8.09               Further Assurances.  The First Lien Collateral Agent
(on behalf of itself and the First Lien Claimholders) and the Second Lien
Collateral Agent (on behalf of itself and the Second Lien Claimholders), and the
Company agree that each of them shall take such further action and shall execute
and deliver such additional documents and instruments (in recordable form, if
requested) as the First Lien Collateral Agent or the Second Lien Collateral

 

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Agent may reasonably request to effectuate the terms of and the lien priorities
contemplated by this Agreement.

 

SECTION 8.10               APPLICABLE LAW.  THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

SECTION 8.11               Binding on Successors and Assigns.  This Agreement
shall be binding upon and inure to the benefit of the First Lien Collateral
Agent, the First Lien Claimholders, the Second Lien Collateral Agent, the Second
Lien Claimholders, the Control Agent and their respective successors and
assigns.

 

SECTION 8.12               Specific Performance.  Each of the First Lien
Collateral Agent and the Second Lien Collateral Agent may demand specific
performance of this Agreement.  The First Lien Collateral Agent (on behalf of
itself and the First Lien Claimholders) and the Second Lien Collateral Agent (on
behalf of itself and the Second Lien Claimholders) 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 any First Lien Collateral Agent or the Second Lien Collateral
Agent, as the case may be.

 

SECTION 8.13               Titles and Captions.  Titles and Captions of
Articles, Sections and Subsections in this Agreement are for convenience only,
and neither limit nor amplify the provisions of this Agreement.

 

SECTION 8.14               Counterparts; Integration.  This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract.

 

This Agreement constitutes the entire contract among the parties relating to the
subject matter hereof and supersedes any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. 
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.

 

SECTION 8.15               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.

 

SECTION 8.16               No Third Party Beneficiaries.  Nothing in this
Agreement express or implied shall be construed to confer upon any Person (other
than the parties hereto and their respective successors and assigns permitted
hereby) any legal or equitable right, remedy or claim under or by reason of this
Agreement.

 

SECTION 8.17               Provisions Solely to Define Relative Rights.  The
provisions of this Agreement are and are intended solely for the purpose of
defining the relative rights with respect to the Collateral of the First Lien
Claimholders on the one hand and the Second Lien Claimholders on the other
hand.  Nothing in this Agreement is intended to or shall impair the rights of
the Company or any other Grantor, or the obligations of the Company or any other

 

34

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Grantor, which are absolute and unconditional, to pay the First Lien Obligations
and the Second Lien Obligations as and when the same shall become due and
payable in accordance with their terms.

 

[Signature Pages Follow]

 

35

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

 

 

ROYAL BANK OF CANADA, as First Lien Collateral Agent

 

 

 

 

 

 

 

By: 

/s/ Ann Hurley

 

 

Name: Ann Hurley

 

 

Title: Manager, Agency

 

 

Notice Address:

 

200 Bay Street, 12th Floor
South Tower, Royal Bank Plaza
Toronto, Ontario
M5J 2W7

 

[Prospect Intercreditor Agreement]

 

--------------------------------------------------------------------------------

 

 

ROYAL BANK OF CANADA, as Control Agent

 

 

 

 

 

 

 

By: 

/s/ Ann Hurley

 

 

Name: Ann Hurley

 

 

Title: Manager, Agency

 

 

Notice Address:

 

200 Bay Street, 12th Floor
South Tower, Royal Bank Plaza
Toronto, Ontario
M5J 2W7

 

[Prospect Intercreditor Agreement]

 

--------------------------------------------------------------------------------

 

 

U.S. BANK NATIONAL ASSOCIATION, as Second Lien Collateral Agent

 

 

 

 

 

 

By: 

/s/ Michael M. Hopkins

 

 

Name: Michael M. Hopkins

 

 

Title: Vice President

 

 

Notice Address:

 

Corporate Trust Services

225 Asylum Street, 23rd Floor

Hartford, CT  06103

Attention:  Michael M. Hopkins  (Prospect

Medical Holdings 2009 Collateral Agency)

Telephone:  (860) 241-6820

Telecopier:  (860) 241-6881

 

[Prospect Intercreditor Agreement]

 

--------------------------------------------------------------------------------

 

 

PROSPECT MEDICAL HOLDINGS, INC., as the Company

 

 

 

 

 

 

 

By: 

/s/ Samuel S. Lee

 

 

Name: Samuel S. Lee

 

 

Title: Chief Executive Officer

 

 

Notice Address:

 

10780 Santa Monica Blvd., Suite 400

Los Angeles, CA 90025

Attention:  General Counsel

Telephone:  (310) 943-4500

Telecopier:  (310) 943-4501

 

 

 

SUBSIDIARIES:

 

 

 

 

 

 

 

ALTA HOSPITALS SYSTEM, LLC, as Grantor

 

 

 

 

 

 

 

By: 

/s/ Samuel S. Lee

 

 

Name: Samuel S. Lee

 

 

Title: Chief Executive Officer

 

 

 

 

 

 

 

ALTA HOLLYWOOD HOSPITALS, INC., as Grantor

 

 

 

 

 

 

 

By:

/s/ Samuel S. Lee

 

 

Name: Samuel S. Lee

 

 

Title: President

 

 

 

 

 

 

 

ALTA LOS ANGELES HOSPITALS, INC., as Grantor

 

 

 

 

 

 

 

By:

/s/ Samuel S. Lee

 

 

Name: Samuel S. Lee

 

 

Title: President

 

[Prospect Intercreditor Agreement]

 

--------------------------------------------------------------------------------

 

 

GENESIS HEALTHCARE OF SOUTHERN CALIFORNIA, INC., A MEDICAL GROUP, as Grantor

 

 

 

 

 

 

 

By: 

/s/ Samuel S. Lee

 

 

Name: Samuel S. Lee

 

 

Title: Senior Vice President

 

 

 

 

 

 

 

POMONA VALLEY MEDICAL GROUP, INC., as Grantor

 

 

 

 

 

 

 

By:

/s/ Samuel S. Lee

 

 

Name: Samuel S. Lee

 

 

Title: Vice President

 

 

 

 

 

 

 

PROMED HEALTH CARE ADMINISTRATORS, as Grantor

 

 

 

 

 

 

 

By:

/s/ Samuel S. Lee

 

 

Name: Samuel S. Lee

 

 

Title: Vice President

 

 

 

 

 

 

 

PROMED HEALTH SERVICES COMPANY, as Grantor

 

 

 

 

 

 

 

By:

/s/ Samuel S. Lee

 

 

Name: Samuel S. Lee

 

 

Title: Vice President

 

 

 

 

 

 

 

PROSPECT HOSPITAL ADVISORY SERVICES, INC., as Grantor

 

 

 

 

 

 

 

By:

/s/ Samuel S. Lee

 

 

Name: Samuel S. Lee

 

 

Title: Chief Executive Officer

 

[Prospect Intercreditor Agreement]

 

--------------------------------------------------------------------------------

 

 

PROSPECT HEALTH SOURCE MEDICAL GROUP, INC., as Grantor

 

 

 

 

 

 

By:

/s/ Samuel S. Lee

 

 

Name: Samuel S. Lee

 

 

Title: Senior Vice President

 

 

 

 

 

 

 

PROSPECT MEDICAL GROUP, INC., as Grantor

 

 

 

 

 

 

 

By:

/s/ Samuel S. Lee

 

 

Name: Samuel S. Lee

 

 

Title: Senior Vice President

 

 

 

 

 

 

 

PROSPECT MEDICAL SYSTEMS, INC., as Grantor

 

 

 

 

 

 

 

By:

/s/ Samuel S. Lee

 

 

Name: Samuel S. Lee

 

 

Title: Chairman

 

 

 

 

 

 

 

PROSPECT NWOC MEDICAL GROUP, INC., as Grantor

 

 

 

 

 

 

 

By:

/s/ Samuel S. Lee

 

 

Name: Samuel S. Lee

 

 

Title: Senior Vice President

 

 

 

 

 

 

 

PROSPECT PROFESSIONAL CARE MEDICAL GROUP, INC., as Grantor

 

 

 

 

 

 

 

By:

/s/ Samuel S. Lee

 

 

Name: Samuel S. Lee

 

 

Title: Senior Vice President

 

[Prospect Intercreditor Agreement]

 

--------------------------------------------------------------------------------

 

 

STARCARE MEDICAL GROUP, INC., as Grantor

 

 

 

 

 

 

 

By:

/s/ Samuel S. Lee

 

 

Name: Samuel S. Lee

 

 

Title: Senior Vice President

 

 

 

 

 

 

 

UPLAND MEDICAL GROUP, A PROFESSIONAL MEDICAL CORPORATION, as Grantor

 

 

 

 

 

 

 

By:

/s/ Samuel S. Lee

 

 

Name: Samuel S. Lee

 

 

Title: Vice President

 

 

Notice Address:

 

c/o Prospect Medical Holdings, Inc.

10780 Santa Monica Blvd., Suite 400

Los Angeles, CA 90025

Attention:  General Counsel

Telephone:  (310) 943-4500

Telecopier:  (310) 943-4501

 

[Prospect Intercreditor Agreement]

 

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