Exhibit 10.8

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INTERCREDITOR AGREEMENT

 

dated as of October 28, 2005

 

among

 

DEL LABORATORIES, INC.,

 

the other Grantors from time to time party hereto,

 

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent under the Initial Credit Agreement

and as Credit Facility Collateral Agent,

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Trustee and as Note Collateral Agent

 

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TABLE OF CONTENTS

 

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ARTICLE 1.     DEFINITIONS; PRINCIPLES OF CONSTRUCTION

   1

SECTION 1.1

  Defined Terms    1

SECTION 1.2

  Rules of Interpretation    22

ARTICLE 2.     INTERCREDITOR PROVISIONS

   23

SECTION 2.1

  Ranking of Liens    23

SECTION 2.2

  Notice of Foreclosure of Priority Liens    24

SECTION 2.3

  Restrictions on Enforcement of Junior Liens    24

SECTION 2.4

  Waiver of Right of Marshalling    26

SECTION 2.5

  Insolvency or Liquidation Proceedings    26

SECTION 2.6

  Order of Application    28

SECTION 2.7

  Release of Liens on Collateral    30

SECTION 2.8

  Amendment of this Agreement and Other Security Documents    30

SECTION 2.9

  Voting    31

SECTION 2.10

  Perfection of Liens as to Deposit Accounts and Securities Accounts    31

SECTION 2.11

  Credit Facility Liens on Fixed Collateral and Excluded Assets    31

SECTION 2.12

  Delivery of Collateral    31

SECTION 2.13

  Cooperation and Access with Respect to Liquid Collateral    32

SECTION 2.14

  Relative Rights    34

ARTICLE 3.     MISCELLANEOUS PROVISIONS

   35

SECTION 3.1

  All Note Liens Granted to Note Collateral Agent; All Credit Facility Liens
Granted to Credit Facility Collateral Agent    35

SECTION 3.2

  Obligations of Secured Debt Representatives    35

SECTION 3.3

  Obligations of Grantors Joint and Several; All Other Obligations Several;
Immunities and Indemnities of Agents and Representatives    36

SECTION 3.4

  Successor Collateral Agents; Replacement and Substitution of Credit Facility
Collateral Agent and Note Collateral Agent    37

SECTION 3.5

  Additional Grantors and Secured Debt Representatives    38

SECTION 3.6

  Amendments, etc. with respect to the Secured Obligations    38

SECTION 3.7

  Binding Effect; Enforcement    39

SECTION 3.8

  Delay and Waiver    40

SECTION 3.9

  Notices    40

SECTION 3.10

  Entire Agreement; Amended only in Writing    41

SECTION 3.11

  Severability    41

SECTION 3.12

  Headings    41

SECTION 3.13

  Obligations Secured    41

SECTION 3.14

  Governing Law    41

SECTION 3.15

  Consent to Jurisdiction    41

SECTION 3.16

  Waiver of Jury Trial    42

SECTION 3.17

  Counterparts    42

SECTION 3.18

  Effectiveness    42

SECTION 3.19

  Insolvency or Liquidation Proceeding    42

 

EXHIBIT A – Form of Intercreditor Agreement Joinder

 

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This Intercreditor Agreement (this “Agreement”) dated as of October 28, 2005 is
entered into by and among Del Laboratories, Inc., a Delaware corporation (the
“Company”), the other Grantors from time to time party hereto, JPMorgan Chase
Bank, National Association, as Administrative Agent under the Initial Credit
Agreement described below and as Credit Facility Collateral Agent, and Wells
Fargo Bank, National Association, as trustee under the Indenture described below
and as Note Collateral Agent.

 

Recitals

 

Pursuant to a Credit Agreement dated as of October 28, 2005 (the “Initial Credit
Agreement”) among DLI Holding II Corp., a Delaware corporation (“Holdings”), the
Company, the Grantors party hereto on the date hereof, the lenders party thereto
and the Credit Agreement Agent, the Company intends to obtain, and Holdings and
such Grantors will guarantee, loans and other extensions of credit secured,
together with other Credit Facility Lien Obligations, by Credit Facility Liens
granted to the Credit Facility Collateral Agent pursuant to the Credit Facility
Lien Security Documents.

 

Pursuant to an Indenture dated as of October 28, 2005 (the “Indenture”) among
the Company, the Grantors party hereto on the date hereof and the Trustee, the
Company intends to issue, and such Grantors will guarantee, the Company’s Senior
Secured Floating Rate Notes due 2011 (together with any related exchange notes
and all additional notes at any time issued under the Indenture, the “Notes”)
secured, together with other Note Lien Obligations, by Note Liens granted to the
Note Collateral Agent pursuant to the Note Lien Security Documents.

 

This Agreement sets forth certain agreements relating to the Credit Facility
Liens and Note Liens.

 

Agreement

 

In consideration of the premises and the mutual agreements herein set forth, the
receipt and sufficiency of which are hereby acknowledged, the parties to this
Agreement hereby agree as follows:

 

ARTICLE 1.

DEFINITIONS; PRINCIPLES OF CONSTRUCTION

 

SECTION 1.1 Defined Terms. The following terms will have the following meanings:

 

“Accounts” means all “accounts” as defined in Article 9 of the UCC.

 

“Affiliate” of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
“control” when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative to the foregoing.

 

“Board of Directors” of the Company or any other Person means (i) with respect
to a corporation, the board of directors of the corporation or any committee
thereof duly authorized to act on behalf of such board; (ii) with respect to a
partnership, the Board of Directors of the general partner of the partnership;
(iii) with respect to a limited liability company, the managing member or
members or any controlling committee of managing members thereof; and (iv) with
respect to any other Person, the board or committee of such Person serving a
similar function.

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“Cash Management Obligations” means all monetary obligations, including fees,
costs, expenses and indemnities, whether primary, secondary, direct, contingent,
fixed or otherwise of the Company or any of its Subsidiaries arising out of any
cash management, clearing house, wire transfer, depository or investment
services provided by any lender under any Credit Facility or an Affiliate of
such lender.

 

“Cash Proceeds” means all Proceeds of any Collateral received by any Grantor
consisting of cash and checks.

 

“Chattel Paper” means all “chattel paper” as defined in Article 9 of the UCC,
including, without limitation, “electronic chattel paper” or “tangible chattel
paper,” as each term is defined in Article 9 of the UCC.

 

“Collateral” means all of the assets and property of any Grantor, whether real,
personal or mixed, constituting either Fixed Collateral or Liquid Collateral.

 

“Collateral Agency Agreement” means the Collateral Agency Agreement dated as of
October 28, 2005 among Wells Fargo Bank, N.A., as trustee under the Indenture,
Wells Fargo Bank, N.A., as collateral agent, and the Grantors party thereto

 

“Collateral Agent” means,

 

(1) with respect to holders of Note Lien Obligations, the Note Collateral Agent,
and

 

(2) with respect to holders of Credit Facility Lien Obligations, the Credit
Facility Collateral Agent.

 

“Collateral Class,” as used with respect to Collateral, means the Fixed
Collateral or the Liquid Collateral, as applicable.

 

“Collateral Records” means all books, records, ledger cards, files,
correspondence, customer lists, blueprints, technical specifications, manuals,
computer software, computer printouts, tapes, disks and related data processing
software and similar items that at any time evidence or contain information
relating to any of the Collateral or are otherwise necessary or helpful in the
collection thereof or realization thereupon.

 

“Collateral Support” means all property (real or personal) assigned,
hypothecated or otherwise securing any Collateral and shall include any security
agreement or other agreement granting a lien or security interest in such real
or personal property.

 

“Commercial Tort Claims” means all “commercial tort claims” as defined in
Article 9 of the UCC.

 

“Copyright Licenses” means, with respect to any Grantor, all agreements (whether
or not in writing) naming such Grantor as licensor or licensee, granting any
right under any Copyright, including the grant of rights to print, publish,
copy, distribute, exploit and sell materials derived from any Copyright, subject
in each case, to the terms of such agreements, and the right to prepare for
sale, sell and advertise for sale, all Inventory now or hereafter covered by
such agreements.

 

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“Copyrights” means:

 

(1) all United States and foreign copyrights, whether or not the underlying
works of authorship have been published, and all copyright registrations and
copyright applications, and any renewals or extensions thereof;

 

(2) the right to sue or otherwise recover for any and all past, present and
future infringements thereof;

 

(3) all income, royalties, damages and other payments now and hereafter due
and/or payable with respect thereto (including, without limitation, payments
under all licenses entered into in connection therewith, and damages and
payments for past, present or future infringements thereof); and

 

(4) all other rights of any kind whatsoever accruing thereunder or pertaining
thereto.

 

“Credit Agreement” means the Initial Credit Agreement and, to the extent it
Refinances the Initial Credit Agreement, the Permanent ABL Facility.

 

“Credit Agreement Agent” means, at any time, the Person serving at such time as
the “Agent” or “Administrative Agent” under the Credit Agreement or any other
representative then most recently designated in accordance with the applicable
provisions of the Credit Agreement, together with its successors in such
capacity.

 

“Credit Facilities” means (x) the Credit Agreement and (y) to the extent
specified by the Company by notice to the Trustee, one or more other debt
facilities or commercial paper facilities, in each case, with banks or other
institutional lenders providing for revolving credit loans, term loans,
receivables financing (including through the sale of receivables to such lenders
or to special purpose entities formed to borrow from such lenders against such
receivables) or letters of credit, in each case, as amended, restated, modified,
renewed, refunded, replaced (whether upon or after termination or otherwise) or
refinanced (including by means of sales of debt securities to institutional
investors) in whole or in part from time to time.

 

“Credit Facility Collateral Agent” means JPMorgan Chase Bank, N.A., in its
capacity as collateral agent under the Credit Facility Lien Security Documents,
together with its successors in such capacity.

 

“Credit Facility Lien” means a Lien on Collateral granted by a Credit Facility
Lien Security Document to the Credit Facility Collateral Agent, at any time,
upon any property of the Company or any Subsidiary Guarantor to secure Credit
Facility Lien Obligations.

 

“Credit Facility Lien Debt” means:

 

(1) Indebtedness of the Company or any Subsidiary Guarantor under the Credit
Agreement that is secured by a Credit Facility Lien that was permitted to be
incurred and so secured under the Indenture (or as to which the lenders under
the Credit Agreement obtained an Officer’s Certificate at the time of incurrence
to the effect that such Indebtedness was permitted to be Incurred and secured by
the Indenture) and guarantees thereof by the Subsidiary Guarantors;

 

(2) Indebtedness of the Company or any Subsidiary Guarantor under any other
Credit Facility that is secured by a Credit Facility Lien that was permitted to
be incurred and so secured under the Indenture (or as to which the lenders under
the Credit Agreement obtained an Officer’s Certificate at the time of incurrence
to the effect that such Indebtedness was permitted to be Incurred and secured by
the

 

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Indenture) and guarantees thereof by the Subsidiary Guarantors; provided, in the
case of any Indebtedness referred to in this clause (2), that:

 

(a) on or before the date on which such Indebtedness is incurred by the Company,
such Indebtedness is designated by the Company, in an Officer’s Certificate
delivered to each Credit Facility Lien Representative, the Credit Facility
Collateral Agent and the Note Collateral Agent, as “Credit Facility Lien Debt”
for the purposes of the Secured Debt Documents; provided that no Series of
Secured Debt may be designated as both Note Lien Debt and Credit Facility Lien
Debt;

 

(b) such Indebtedness is governed by a credit agreement or other agreement that
includes a Lien Sharing and Priority Confirmation; and

 

(c) all requirements set forth in this Agreement as to the confirmation, grant
or perfection of the Credit Facility Collateral Agent’s Lien to secure such
Indebtedness or Obligations in respect thereof are satisfied (and the
satisfaction of such requirements and the other provisions of this clause (c)
will be conclusively established if the Company delivers to the Credit Facility
Collateral Agent and the Note Collateral Agent an Officer’s Certificate stating
that such requirements and other provisions have been satisfied and that such
Indebtedness is “Credit Facility Lien Debt”); and

 

(3) Hedging Obligations of the Company or any Subsidiary Guarantor incurred to
hedge or manage interest rate risk (in a notional amount not to exceed the
aggregate amount of the Company’s and its Subsidiaries’ consolidated variable
interest rate Indebtedness then outstanding or committed) and Cash Management
Obligations of the Company or any Subsidiary Guarantor; provided that:

 

(a) such Hedging Obligations and Cash Management Obligations are secured by a
Credit Facility Lien on all of the assets and properties that secure Credit
Facility Lien Debt; and

 

(b) such Credit Facility Lien is senior to or on a parity with the Credit
Facility Liens securing Credit Facility Lien Debt;

 

in each case to the extent secured by Liens permitted by clause (2) of the
definition of Permitted Liens.

 

“Credit Facility Lien Documents” means, collectively, the Credit Agreement, any
credit agreement or other agreement governing each other Series of Credit
Facility Lien Debt, and the Credit Facility Lien Security Documents.

 

“Credit Facility Lien Obligations” means the Credit Facility Lien Debt and all
other Obligations in respect of Credit Facility Lien Debt.

 

“Credit Facility Lien Representative” means (1) the Credit Agreement Agent or
(2) in the case of any other Series of Credit Facility Lien Debt, the trustee,
agent or representative of the holders of such Series of Credit Facility Lien
Debt who maintains the transfer register for such Series of Credit Facility Lien
Debt and is appointed as a representative of the Priority Debt (for purposes
related to the administration of the security documents) pursuant to the credit
agreement or other agreement governing such Series of Credit Facility Lien Debt.

 

“Credit Facility Lien Security Documents” means this Agreement, each Lien
Sharing and Priority Confirmation relating to Credit Facility Lien Obligations,
and all security agreements, pledge agreements, collateral assignments,
mortgages, deeds of trust, collateral agency agreements, control agreements or
other grants or transfers for security executed and delivered by the Company or
any Subsidiary Guarantor creating (or purporting to create) a Credit Facility
Lien upon collateral in favor of the Credit Facility

 

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Collateral Agent to secure Credit Facility Lien Obligations, in each case, as
amended, modified, renewed, restated or replaced, in whole or in part, from time
to time, in accordance with its terms.

 

“Credit Facility Priority Lien Cap” means, as of any date, an aggregate
principal amount equal to the sum of (a) the aggregate principal amount of
Indebtedness permitted to be Incurred under clause (b) (1) of Section 4.09 of
the Indenture (regardless of the amount actually Incurred) as of such date, plus
(b) the principal amount of Indebtedness permitted to be Incurred under
clause (b)(13) of Section 4.09 of the Indenture (regardless of the amount
actually Incurred) as of such date.

 

“Credit Facility Secured Party” means the Credit Agreement Agent and the lenders
under the Credit Agreement (together with any other holders of Credit Facility
Lien Obligations).

 

“Deposit Accounts” means all “deposit accounts” as defined in Article 9 of the
UCC of any applicable jurisdiction and, in any event including any demand, time,
savings, passbook or like account maintained with a depositary institution.

 

“Discharge of Priority Lien Obligations” means, with respect to either
Collateral Class, the occurrence of all of the following:

 

(1) termination or expiration of all commitments to extend credit that would
constitute Priority Lien Debt with respect to the applicable Collateral Class;

 

(2) payment in full in cash of the principal of and interest and premium (if
any) on all Priority Lien Debt (other than any undrawn letters of credit) with
respect to the applicable Collateral Class;

 

(3) discharge or cash collateralization (at the lower of (1) 105% of the
aggregate undrawn amount and (2) the percentage of the aggregate undrawn amount
required for release of liens under the terms of the applicable Priority Lien
Document with respect to the applicable Collateral Class) of all outstanding
letters of credit constituting Priority Lien Debt with respect to the applicable
Collateral Class; and

 

(4) payment in full in cash of all other Priority Lien Obligations with respect
to the applicable Collateral Class that are outstanding and unpaid at the time
the Priority Lien Debt with respect to the applicable Collateral Class is paid
in full in cash (other than any obligations for taxes, costs, indemnifications,
reimbursements, damages and other liabilities in respect of which no claim or
demand for payment has been made at such time);

 

provided, that no Discharge of Priority Lien Obligations will be deemed to have
occurred in a Refinancing of Secured Debt with secured Indebtedness that is
Incurred contemporaneously with or promptly after the discharge of such
pre-existing Secured Debt if such new secured Indebtedness constitutes Note Lien
Debt or Credit Facility Lien Debt, as applicable, entitled to the benefit of
this Agreement in accordance with the terms of this Agreement and, as so
designated by the Company, such new Series of Secured Debt constitutes Priority
Lien Debt with respect to the applicable Collateral Class.

 

“Documents” means all “documents” as defined in Article 9 of the UCC.

 

“equally and ratably” means, in reference to sharing of Liens or proceeds
thereof as between holders of Note Lien Obligations, that such Liens or
proceeds:

 

(1) will be allocated and distributed first to the Note Lien Representative for
each outstanding Series of Note Lien Debt, for the account of the holders of
such Note Lien Debt, ratably in proportion to the

 

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principal of, and interest and premium (if any) and reimbursement obligations
(contingent or otherwise) with respect to letters of credit, if any, outstanding
(whether or not drawings have been made under such letters of credit) on each
outstanding Series of Note Lien Debt when the allocation or distribution is
made; and thereafter,

 

(2) will be allocated and distributed (if any remain after payment in full of
all of the principal of, and interest and premium (if any) and reimbursement
obligations (contingent or otherwise) with respect to letters of credit, if any,
outstanding (whether or not drawings have been made on such letters of credit)
on all outstanding Note Lien Obligations) to the Note Lien Representative for
each outstanding Series of Note Lien Debt, for the account of the holders of any
remaining Note Lien Obligations, ratably in proportion to the aggregate unpaid
amount of such remaining Note Lien Obligations due and demanded (with written
notice to the applicable Note Lien Representative and the Note Collateral Agent)
prior to the date such distribution is made.

 

“Equipment” means all “equipment” as defined in Article 9 of the UCC and
including, in any event, all sales displays.

 

“Equity Interests” means:

 

(1) all shares of Capital Stock owned by the Company or any of its Subsidiaries,
and the certificates, if any, representing such shares and any interest of the
Company or any of its Subsidiaries in the entries on the books of the issuer of
such shares or on the books of any securities intermediary pertaining to such
shares, and all dividends, distributions, cash, warrants, rights, options,
instruments, securities and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of such shares;

 

(2) all interests of the Company or any of its Subsidiaries in any limited
liability company and the certificates, if any, representing such limited
liability company interests and any interest of the Company or any of its
Subsidiaries on the books and records of such limited liability company or on
the books and records of any securities intermediary pertaining to such interest
and all dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all of such
limited liability company interests;

 

(3) all interests of the Company or any of its Subsidiaries in any general
partnership, limited partnership, limited liability partnership or other
partnership and the certificates, if any, representing such partnership
interests and any interest of the Company or any of its Subsidiaries on the
books and records of such partnership or on the books and records of any
securities intermediary pertaining to such interest and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such partnership
interests;

 

(4) all interests of the Company or any of its Subsidiaries in a Delaware
business trust or other trust and the certificates, if any, representing such
trust interests and any interest of the Company or any of its Subsidiaries on
the books and records of such trust or on the books and records of any
securities intermediary pertaining to such interest and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such trust interests;
and

 

(5) any “securities” of any of the Company’s “affiliates” (as such terms are
used in Rule 3-16 of Regulation S-X under the Securities Act).

 

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“Excluded Assets” means all Equity Interests and any of the following property
to the extent that and for as long as such grant of a security interest therein:

 

(1) is prohibited by any Requirement of Law; provided that (a) such property
shall cease to be an Excluded Asset immediately and automatically (without need
for any further grant or act) at such time as the condition described in this
clause (1) ceases to exist and (b) to the extent severable, such all rights that
are not subject to the applicable condition described in clause (1) in respect
of such property shall not constitute an Excluded Asset;

 

(2) requires a filing with or consent from any Governmental Authority pursuant
to any Requirement of Law that has not been made or obtained;

 

(3) constitutes a breach or default under or results in the termination of, or
requires any consent not obtained under, any lease, license or agreement, except
to the extent that such Requirement of Law or provisions of any such lease,
license or agreement is ineffective under applicable law or would be ineffective
under Sections 9-406, 9-407, 9-408 or 9-409 of the New York UCC to prevent the
attachment of the security interest granted hereunder; provided that such lease,
license, contract, property right or agreement will cease to be an Excluded
Asset and will become subject to the Lien granted under the security documents,
immediately and automatically, at such time as the grant of a Lien under the
security documents no longer constitutes or results in a breach, termination or
default under any lease, license, contract, property right or agreement;

 

(4) is in (A) any of the following real property: (i) Riverside Industrial Park,
Little Falls, New York, (ii) Little Falls Industrial Park, Little Falls, New
York, (iii) 99 Creek Street, Canajoharie, New York, (iv) 660, 682 and 684 So.
17th Street, Newark, New Jersey, (iv) The Carlyle Hotel, Apt. #1002, 35 East
76th Street, New York City, New York, (v) 316 Bayview Drive, Barrie, Ontario,
Canada, and (vi) all real property a fee interest in which is acquired by the
Company or any Subsidiary Guarantor after the Closing Date that has a fair
market value not exceeding $3.0 million per contiguous parcel, or (B) any
leasehold interest in any real property leased by the Company or any Subsidiary
Guarantor;

 

(5) is in any other property or assets (other than Intellectual Property) in
which a Lien cannot be perfected either automatically or by the filing of a
financing statement under the UCC of the relevant jurisdiction, so long as the
aggregate fair market value of all such property and assets does not at any one
time exceed $5.0 million.

 

“Fixed Collateral” means, except as provided below, all of the following
property of the Company and each Subsidiary Guarantor now owned or at any time
hereafter acquired by such Grantor or in which such Grantor now has or at any
time in the future may acquire any right, title or interest:

 

(1) the Net Available Cash Account;

 

(2) all Equipment;

 

(3) all Fixtures;

 

(4) all fee interest of the Grantors in real property on which the Grantors are
required to provide a Priority Lien to the Note Secured Parties pursuant to the
Note Lien Security Documents; and

 

(5) all Intellectual Property, to the extent of each Grantor’s right, title or
interest therein (except for “intent-to-use” applications for trademark or
service mark registrations filed pursuant to Section 1(b)

 

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of the Lanham Act, 15 U.S.C. § 1051, unless and until an Amendment to Allege Use
or a Statement of Use under Sections 1(c) and 1(d) of said Act has been filed,
to the extent that any assignment of an “intent-to-use” application prior to
such filing would violate the Lanham Act);

 

(6) all General Intangibles, including without limitation commercial contracts
but excluding General Intangibles constituting Payment Intangibles or Commercial
Tort Claims (except as set forth in the next succeeding clause);

 

(7) identified Commercial Tort Claims to the extent that they relate to the
infringement, impairment, damage or destruction of any of the items referred to
in the preceding clauses (1) through (6) (“Fixed Collateral Commercial Tort
Claims”);

 

(8) to the extent relating to any of the items referred to in the preceding
clauses (1) through (7) and subject to the proviso below, all Documents;

 

(9) to the extent relating to any of the items referred to in the preceding
clauses (1) through (8), all Supporting Obligations;

 

(10) subject to the proviso below, all books, Records and Collateral Records
relating to the foregoing (including without limitation all books, databases,
customer lists, engineer drawings, Records and Collateral Records, whether
tangible or electronic, which contain any information relating to any of the
foregoing);

 

(11) all identifiable non-Cash Proceeds and, solely to the extent not
constituting Liquid Collateral, Cash Proceeds, products, accessions, rents and
profits of or in respect of any of the foregoing and all collateral security,
guarantees and other Collateral Support given by any Person with respect to any
of the foregoing;

 

provided that to the extent any of the items specified in the foregoing clauses
(8), (9) or (10) also relates to Liquid Collateral, only that portion related to
the items referred to in the preceding clauses (1) through (7) as being included
in the Fixed Collateral shall be included in the Fixed Collateral.
Notwithstanding the foregoing, “Fixed Collateral” will exclude:

 

(A) Liquid Collateral;

 

(B) Excluded Assets; and

 

(C) any properties and assets in which each Collateral Agent is required to
release or releases its Liens pursuant to Section 10.08 of the Indenture or as
contemplated in Section 2.7 of this Agreement; provided that, in the case of
this clause (C), if such Liens are required to be released as a result of the
sale, transfer or other disposition of any properties or assets of the Company
or any Subsidiary Guarantor, such assets or properties will cease to be excluded
from the Collateral if the Company or any Subsidiary Guarantor thereafter
acquires or reacquires such assets or properties.

 

“Fixtures” means all “fixtures” as defined in Article 9 of the UCC.

 

“General Intangibles” means all “general intangibles” as defined in Article 9 of
the UCC.

 

“Goods” means all “goods” as defined in Article 9 of the UCC.

 

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“Grantors” means the Company and each of the Subsidiary Guarantors that have
executed and delivered, or may from time to time execute and deliver, a Note
Lien Security Document or a Credit Facility Lien Security Document.

 

“Hedging Obligations” of any Person means the obligations of such Person
pursuant to any Interest Rate Agreement or Currency Agreement.

 

“Incur” has the meaning given in the Indenture, as in effect on the date hereof.

 

“Indebtedness” has the meaning given in the Indenture, as in effect on the date
hereof.

 

“Insolvency or Liquidation Proceeding” means:

 

(1) any case commenced by or against the Company or any Subsidiary Guarantor
under Title 11, U.S. Code or any similar federal or state law for the relief of
debtors, any other proceeding for the reorganization, recapitalization or
adjustment or marshalling of the assets or liabilities of the Company or any
Subsidiary Guarantor, any receivership or assignment for the benefit of
creditors relating to the Company or any Subsidiary Guarantor or any similar
case or proceeding relative to the Company or any Subsidiary Guarantor or its
creditors, as such, in each case whether or not voluntary;

 

(2) any liquidation, dissolution, marshalling of assets or liabilities or other
winding up of or relating to the Company or any Subsidiary Guarantor, in each
case whether or not voluntary and whether or not involving Credit Facility
bankruptcy or insolvency; or

 

(3) any other proceeding of any type or nature in which substantially all claims
of creditors of the Company or any Subsidiary Guarantor are determined and any
payment or distribution is or may be made on account of such claims.

 

“Instruments” means all “instruments” as defined in Article 9 of the UCC.

 

“Intellectual Property” means the collective reference to all rights, priorities
and privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including all Copyrights,
Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark Licenses,
Trade Secrets, and Trade Secret Licenses and all rights to sue at law or in
equity for any past, present and future infringement or other impairment
thereof, including the right to receive all proceeds and damages therefrom.

 

“Intercreditor Agreement Joinder” means an agreement substantially in the form
of Exhibit A.

 

“Interest Rate Agreement” means with respect to any Person any interest rate
protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedge agreement or other similar agreement
or arrangement to which such Person is party or of which it is a beneficiary.

 

“Inventory” means all “inventory” as defined in Article 9 of the UCC.

 

“Investment Property” means the collective reference to all “investment
property” as such term is defined in Section 9-102(a)(49) of the New York UCC
(other than Equity Interests).

 

9

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“Junior Lien” means:

 

(1) with respect to Fixed Collateral, the Credit Facility Liens; and

 

(2) with respect to Liquid Collateral, the Note Liens.

 

“Junior Lien Collateral Agent” means:

 

(1) with respect to Fixed Collateral, the Credit Facility Collateral Agent; and

 

(2) with respect to Liquid Collateral, the Note Collateral Agent.

 

“Junior Lien Debt” means:

 

(1) with respect to Fixed Collateral, Credit Facility Lien Debt; and

 

(2) with respect to Liquid Collateral, Note Lien Debt.

 

“Junior Lien Documents” means:

 

(1) with respect to Fixed Collateral, the Credit Facility Lien Documents; and

 

(2) with respect to Liquid Collateral, the Note Lien Documents.

 

“Junior Lien Obligations” means:

 

(1) with respect to Fixed Collateral, the Credit Facility Lien Obligations; and

 

(2) with respect to Liquid Collateral, the Note Lien Obligations.

 

“Junior Lien Representative” means:

 

(1) with respect to Fixed Collateral, each Credit Facility Lien Representative;
and

 

(2) with respect to Liquid Collateral, each Note Lien Representative.

 

“Letter of Credit Right” means “letter-of-credit right” as defined in Article 9
of the UCC.

 

“Lien” means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).

 

“Lien Sharing and Priority Confirmation” means:

 

(1) as to any Series of Credit Facility Lien Debt, the written agreement of the
holders of such Series of Credit Facility Lien Debt, as set forth in the
indenture, credit agreement or other agreement governing such Series of Credit
Facility Lien Debt, for the enforceable benefit of all holders of each existing
and future Series of Note Lien Debt and each existing and future Note Lien
Representative:

 

(a) that the holders of Obligations in respect of such Series of Credit Facility
Lien Debt are bound by the provisions of this Agreement, including the
provisions relating to the ranking of Credit Facility Liens; and

 

10

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(b) consenting to and directing the Credit Facility Collateral Agent to perform
its obligations under this Agreement and the other security documents; and

 

(2) as to any Series of Note Lien Debt, the written agreement of the holders of
such Series of Note Lien Debt, as set forth in the indenture, credit agreement
or other agreement governing such Series of Note Lien Debt, for the enforceable
benefit of all holders of each existing and future Series of Credit Facility
Lien Debt and each existing and future Credit Facility Lien Representative:

 

(a) that all Note Lien Obligations will be and are secured equally and ratably
by all Note Liens at any time granted by the Company or any Subsidiary Guarantor
to secure any Obligations in respect of such Series of Note Lien Debt, whether
or not upon property otherwise constituting collateral for such Series of Note
Lien Debt, and that all such Note Liens will be enforceable by the Note
Collateral Agent for the benefit of all holders of Note Lien Obligations equally
and ratably;

 

(b) that the holders of Obligations in respect of such Series of Note Lien Debt
are bound by the provisions of this Agreement, including the provisions relating
to the ranking of Note Liens; and

 

(c) consenting to and directing the Note Collateral Agent to perform its
obligations under this Agreement and the other Note Lien Security Documents.

 

“Liquid Collateral” means, except as provided below, all of the following
property of the Company and each Subsidiary Guarantor now owned or at any time
hereafter acquired by such Grantor or in which such Grantor now has or at any
time in the future may acquire any right, title or interest:

 

(1) all Accounts;

 

(2) all Chattel Paper;

 

(3) all Instruments;

 

(4) all identified Commercial Tort Claims other than Fixed Collateral Commercial
Tort Claims;

 

(5) all Letter of Credit Rights;

 

(6) all Payment Intangibles;

 

(7) all Receivables;

 

(8) (a) all Deposit Accounts (other than the Net Available Cash Account, to the
extent that it constitutes a Deposit Account) and all cash, checks, Temporary
Cash Investments, and other property held therein or credited thereto, (b) all
Money and (c) all Securities (other than Equity Interests), Security
Entitlements, and Securities Accounts (other than the Net Available Cash
Account, to the extent that it constitutes a Securities Account) and other
Investment Property, and all cash, checks, Temporary Cash Investments,
securities, financial assets or other property held therein or credited thereto;

 

(9) all Inventory;

 

(10) to the extent relating to any of the items referred to in the preceding
clauses (1) through (9) and subject to the proviso below, all Documents;

 

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(11) to the extent relating to any of the items referred to in the preceding
clauses (1) through (10) and subject to the proviso below, all Supporting
Obligations;

 

(12) all books, Records, Receivables Records and Collateral Records relating to
the foregoing (including without limitation all books, databases, customer
lists, engineer drawings, Records, Receivables Records and Collateral Records,
whether tangible or electronic, which contain any information relating to any of
the foregoing); and

 

(13) all identifiable Cash Proceeds and, solely to the extent not constituting
Fixed Collateral, non-Cash Proceeds, products, accessions, rents and profits of
or in respect of any of the foregoing (including without limitation, all
insurance proceeds) and all collateral security, guarantees and other Collateral
Support given by any Person with respect to any of the foregoing;

 

provided that to the extent any of items specified in the preceding clauses
(10), (11) and (12) also relates to Fixed Collateral, only that portion related
to the items referred to in the preceding clauses (1) through (9) as being
included in the Liquid Collateral shall be included in the Liquid Collateral.
Notwithstanding the foregoing, “Liquid Collateral” will exclude:

 

(A) Fixed Collateral;

 

(B) Excluded Assets; and

 

(C) any properties and assets in which each Collateral Agent releases its Liens
pursuant to Section 10.08 of the Indenture or as contemplated in Section 2.7 of
this Agreement; provided that, in the case of this clause (C), if such Liens are
required to be released as a result of the sale, transfer or other disposition
of any properties or assets of the Company or any Subsidiary Guarantor, such
assets or properties will cease to be excluded from the Collateral if the
Company or any Subsidiary Guarantor thereafter acquires or reacquires such
assets or properties.

 

“Money” means “money” as defined in the UCC.

 

“Net Available Cash Account” means any Deposit Account or Securities Account
established by the Company or its Restricted Subsidiaries in accordance with the
requirements of the covenant set forth in Section 4.10 of the Indenture into
which the proceeds from any Sale of Fixed Collateral shall be deposited pending
final application in accordance with such covenant.

 

“Note Collateral Agent” means Wells Fargo Bank, National Association, in its
capacity as collateral agent under the Note Lien Security Documents, together
with its successors in such capacity.

 

“Note Documents” means the Notes, the notations of Subsidiary Guarantee, if any,
the Indenture and the Registration Rights Agreement.

 

“Note Lien” means a Lien granted by a security document to the Note Collateral
Agent, at any time, upon any property of the Company or any Subsidiary Guarantor
to secure Note Lien Obligations.

 

“Note Lien Debt” means:

 

(1) the notes issued on the date of the Indenture and notes issued under the
Indenture in exchange therefor in accordance with the Registration Rights
Agreement; and

 

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(2) any other Indebtedness of the Company (including Additional Notes) that is
secured equally and ratably with the notes by a Note Lien that was permitted to
be incurred and so secured under each applicable Secured Debt Document; provided
that:

 

(a) the net proceeds are used to refund, refinance, replace, defease, discharge
or otherwise acquire or retire Credit Facility Lien Debt or other Note Lien
Debt; or

 

(b) on the date of incurrence of such Indebtedness, after giving pro forma
effect to the incurrence thereof and the application of the proceeds therefrom,
the aggregate principal amount of Note Lien Debt outstanding does not exceed
$210.0 million;

 

provided further, in the case of any Indebtedness referred to in clause (2) of
this definition:

 

(i) on or before the date on which such Indebtedness is incurred by the Company,
such Indebtedness is designated by the Company, in an Officer’s Certificate
delivered to each Note Lien Representative, the Note Collateral Agent and the
Credit Facility Collateral Agent, as “Note Lien Debt” for the purposes of the
Indenture and this Agreement; provided that no Series of Secured Debt may be
designated as both Note Lien Debt and Credit Facility Lien Debt;

 

(ii) such Indebtedness is governed by an Indenture, credit agreement or other
agreement that includes a Lien Sharing and Priority Confirmation; and

 

(iii) all requirements set forth in this Agreement as to the confirmation, grant
or perfection of the Note Collateral Agent’s Liens to secure such Indebtedness
or Obligations in respect thereof are satisfied (and the satisfaction of such
requirements and the other provisions of this clause (iii) will be conclusively
established if the Company delivers to the Note Collateral Agent and the Credit
Facility Collateral Agent an Officer’s Certificate stating that such
requirements and other provisions have been satisfied and that such Indebtedness
is “Note Lien Debt”).

 

“Note Lien Documents” means, collectively, the Note Documents, the indenture,
credit agreement or other agreement governing each other Series of Note Lien
Debt, and the Note Lien Security Documents.

 

“Note Lien Obligations” means Note Lien Debt and all other Obligations in
respect thereof.

 

“Note Lien Representative” means:

 

(1) in the case of the notes, the Trustee;

 

(2) in the case of any other Series of Note Debt, the trustee, agent or
representative of the holders of such Series of Note Lien Debt who maintains the
transfer register for such Series of Note Lien Debt and (a) is appointed as a
Note Lien Representative (for purposes related to the administration of the
security documents) pursuant to the indenture, credit agreement or other
agreement governing such Series of Note Lien Debt, together with its successors
in such capacity, and (b) has become a party to this Agreement by executing a
joinder in the form required under this Agreement.

 

“Note Lien Security Documents” means this Agreement, each Lien Sharing and
Priority Confirmation with respect to Note Lien Obligations, and all security
agreements, pledge agreements,

 

13

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collateral assignments, mortgages, deeds of trust, collateral agency agreements,
control agreements or other grants or transfers for security executed and
delivered by the Company or any Subsidiary Guarantor creating (or purporting to
create) a Note Lien upon Collateral in favor of the Note Collateral Agent to
secure Note Lien Obligations, in each case, as amended, modified, renewed,
restated or replaced, in whole or in part, from time to time, in accordance with
its terms and the provisions described in Section 2.8 of the Indenture.

 

“Note Secured Party” means the Trustee and the holders of notes (together with
any other holders of Note Lien Obligations).

 

“Obligations” means any principal (including reimbursement obligations with
respect to letters of credit whether or not drawn), interest (including, to the
extent legally permitted, all interest accrued thereon after the commencement of
any Insolvency or Liquidation Proceeding at the rate, including any applicable
post-default rate, specified in the Credit Facility Lien Documents, even if such
interest is not enforceable, allowable or allowed as a claim in such
proceeding), premium (if any), penalties, fees, indemnifications,
reimbursements, damages, expenses and other liabilities payable under the
documentation governing any Indebtedness.

 

“Officer” means the Chairman of the Board, the Chief Executive Officer, the
Chief Financial Officer, the President, any Vice President, the Treasurer or the
Secretary of the Company. “Officer” of a Subsidiary Guarantor has a correlative
meaning.

 

“Officer’s Certificate” means a certificate signed by an Officer.

 

“Patent License” means, with respect to any Grantor, all agreements (whether or
not in writing) providing for the grant by or to such Grantor of any right to
manufacture, use, import, export, distribute, offer for sale or sell any
invention covered in whole or in part by a Patent, subject in each case, to the
terms of such agreements, and the right to prepare for sale, sell and advertise
for sale, all Inventory now or hereafter covered by such agreements.

 

“Patents” means:

 

(1) all United States and foreign patents, patent applications and patentable
inventions;

 

(2) all inventions and improvements described and claimed therein;

 

(3) the right to sue or otherwise recover for any and all past, present and
future infringements thereof;

 

(4) all income, royalties, damages and other payments now and hereafter due
and/or payable with respect thereto (including payments under all licenses
entered into in connection therewith, and damages and payments for past, present
or future infringements thereof); and

 

(5) all reissues, divisions, continuations, continuations-in-part, substitutes,
renewals, and extensions thereof, all improvements thereon and all other rights
of any kind whatsoever accruing thereunder or pertaining thereto.

 

“Payment Intangibles” means all “payment intangibles” as defined in Article 9 of
the UCC.

 

“Permanent ABL Facility” means the committed asset based loan credit facility
described in the offering memorandum for the Notes under the caption
“Description of Other Indebtedness” that is

 

14

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expected to Refinance in full and replace the Initial Credit Agreement, as
amended, restated, supplemented, waived, replaced (whether or not upon
termination, and whether with the original lenders or otherwise), refinanced,
restructured or otherwise modified from time to time.

 

“Permitted Liens” means the following types of Liens:

 

(1) Liens on Collateral held by the Note Collateral Agent equally and ratably
securing (a) the notes to be issued on the date of the Indenture and all related
Note Lien Obligations and (b) all future Note Lien Debt, subject to the limits
thereon set forth in the definition thereof, and all related Note Lien
Obligations;

 

(2) Liens on Collateral, Liens on the Capital Stock of the Company’s
Subsidiaries and Liens on other Excluded Assets to the extent such Excluded
Assets would not constitute Fixed Collateral if not classified as Excluded
Assets, in each case held by the Credit Facility Collateral Agent securing
Credit Facility Lien Obligations; provided that:

 

(a) without otherwise limiting the amount secured by such Liens insofar as they
attach to any property other than Liquid Collateral or secure Credit Facility
Lien Obligations that are not Indebtedness, the aggregate principal amount of
all Indebtedness (including all fixed and contingent reimbursement obligations
in respect of letters of credit but excluding Hedging Obligations and Cash
Management Obligations) secured by such Liens insofar as they attach to Liquid
Collateral shall not at any time exceed the Credit Facility Priority Lien Cap;
and

 

(b) all such Liens on Collateral are subject to this Agreement;

 

(3) Liens securing indebtedness incurred in reliance in Section 4.09(b)(4) of
the Indenture; provided that such Liens do not extend to or cover any property
or assets of the Company or of any Restricted Subsidiary other than the property
or assets that secured such Indebtedness prior to the time the applicable
Restricted Subsidiary became a Restricted Subsidiary;

 

(4) Liens securing indebtedness incurred in reliance in Section 4.09(b)(6) of
the Indenture;

 

(5) Liens existing on the Closing Date (other than Credit Facility Liens and
Note Liens), together with any Liens securing Refinancing Indebtedness Incurred
to refinance Indebtedness secured by Liens existing on the Closing Date (other
than Credit Facility Liens and Note Liens); provided that the Liens securing the
Refinancing Indebtedness shall not extend to property other than that pledged
under the Liens securing the Indebtedness being refinanced;

 

(6) Liens in favor of the Company or any Subsidiary Guarantor on the property or
assets, or any proceeds, income or profit therefrom, of any Restricted
Subsidiary;

 

(7) Liens for taxes, assessments or governmental charges or claims either:

 

(a) not delinquent; or

 

(b) contested in good faith by appropriate proceedings and as to which the
Company or the applicable Restricted Subsidiary has set aside on its books such
reserves as may be required pursuant to GAAP;

 

(8) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics,
suppliers, materialmen and repairmen and other Liens imposed by law incurred in
the ordinary course of business

 

15

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for sums not overdue for a period of more than 60 days or being contested in
good faith, if such reserve or other appropriate provision, if any, as shall be
required by GAAP has been made in respect thereof;

 

(9) Liens incurred or deposits made in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other types of
social security;

 

(10) judgment Liens not giving rise to an Event of Default;

 

(11) easements, rights-of-way, zoning restrictions and other similar charges or
encumbrances or title defects or irregularities in respect of real property not
interfering in any material respect with the ordinary conduct of the business of
the Company or any of its Restricted Subsidiaries;

 

(12) Liens upon specific items of inventory or other goods and proceeds of any
Person securing such Person’s obligations in respect of bankers’ acceptances
issued or created for the account of such Person to facilitate the purchase,
shipment or storage of such inventory or other goods;

 

(13) Liens securing reimbursement obligations with respect to commercial letters
of credit which encumber documents and other property relating to such letters
of credit and products and proceeds thereof;

 

(14) Liens encumbering deposits made or letters of credit issued to secure
obligations arising from statutory, regulatory, contractual or warranty
requirements of the Company or any of its Restricted Subsidiaries, including
rights of offset and set-off;

 

(15) Liens securing (A) Interest Rate Agreements entered into in the ordinary
course of business and not for purposes of speculation which Interest Rate
Agreements relate to Indebtedness that is otherwise permitted under the
Indenture and (B) all related Obligations;

 

(16) Liens securing (A) Indebtedness under Currency Agreements entered into in
the ordinary course of business and not for purposes of speculation and (B) all
related Obligations;

 

(17) Liens on assets transferred to a Receivables Entity or on assets of a
Receivables Entity, in either case incurred in connection with a Qualified
Receivables Transaction;

 

(18) leases or subleases granted to others that do not materially interfere with
the ordinary course of business of the Company and its Restricted Subsidiaries;

 

(19) Liens arising from filing precautionary Uniform Commercial Code financing
statements regarding leases;

 

(20) Liens in favor of customs and revenue authorities arising as a matter of
law to secure payment of customs duties in connection with the importation of
goods;

 

(21) title defects, survey exceptions and other irregularities or deficiencies
in title to real property constituting Collateral which are set forth in the
title insurance reports delivered to the Note Collateral Agent in respect of the
real property Collateral on the Closing Date;

 

16

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(22) Liens incurred in the ordinary course of business with respect to
obligations that do not exceed $2.5 million at any one time outstanding and
that:

 

(a) are not incurred in connection with the borrowing of money or obtaining of
advances or credit (other than trade credit in the ordinary course of business);
and

 

(b) do not in the aggregate materially detract from the value of the property or
materially impair the use thereof in the operation of the business of the
Company and the Restricted Subsidiaries; and

 

(23) other Liens; provided that the maximum aggregate amount of outstanding
obligations secured thereby shall not at any time exceed $5.0 million.

 

“Permitted Prior Liens” means:

 

(1) Liens described in clauses (3), (4), (5) or (6) of the definition of
“Permitted Liens”; and

 

(2) Permitted Liens that arise by operation of law and are not voluntarily
granted, to the extent entitled by law to priority over the Liens created by the
Credit Facility Lien Security Documents or the Note Lien Security Documents.

 

“Person” means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.

 

“Priority Liens” means:

 

(1) with respect to Fixed Collateral, the Note Liens; and

 

(2) with respect to Liquid Collateral, the Credit Facility Liens.

 

“Priority Lien Collateral Agent” means:

 

(1) with respect to Fixed Collateral, the Note Collateral Agent; and

 

(2) with respect to Liquid Collateral, the Credit Facility Collateral Agent.

 

“Priority Lien Debt” means:

 

(1) with respect to Priority Liens on Fixed Collateral, the Note Lien Debt; and

 

(2) with respect to Priority Liens on Liquid Collateral, the Credit Facility
Lien Debt.

 

“Priority Lien Documents” means:

 

(1) with respect to Fixed Collateral, the Note Lien Documents; and

 

(2) with respect to Liquid Collateral, the Credit Facility Lien Documents.

 

“Priority Lien Obligations” means:

 

(1) with respect to Fixed Collateral, the Note Lien Obligations; and

 

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(2) with respect to Liquid Collateral, the Credit Facility Lien Obligations.

 

“Priority Lien Representative” means:

 

(1) with respect to Fixed Collateral, each Note Lien Representative; and

 

(2) with respect to Liquid Collateral, each Credit Facility Lien Representative.

 

“Proceeds” shall mean all “proceeds” as defined in Article 9 of the UCC
including, in any event all dividends, returns of capital and other
distributions from Investment Property and all collection thereon and payments
with respect thereto.

 

“Promissory Note” shall mean a “promissory note” as defined in Article 9 of the
UCC.

 

“Receivable” means any right to payment or goods sold or leased or for services
rendered, whether or not such right is evidenced by an Instrument or Chattel
Paper and whether or not it has been earned by performance (including all
Accounts).

 

“Receivables Records” shall mean (i) all original copies of all documents,
instruments or other writings or electronic records or other Records evidencing
the Receivables, (ii) all books, correspondence, credit or other files, Records,
ledger sheets or cards, invoices, and other papers relating to Receivables,
including, without limitation, all tapes, cards, computer tapes, computer discs,
computer runs, record keeping systems and other papers and documents relating to
the Receivables, whether in the possession or under the control of the Grantor
or any computer bureau or agent from time to time acting for the Grantor or
otherwise, (iii) all evidences of the filing of financing statements and the
registration of other instruments in connection therewith, and amendments,
supplements or other modifications thereto, notices to other creditors or
secured parties, and certificates, acknowledgments, or other writings,
including, without limitation, lien search reports, from filing or other
registration officers, (iv) all credit information, reports and memoranda
relating thereto and (v) all other written or nonwritten forms of information
related in any way to the foregoing or any Receivable.

 

“Record” shall have the meaning specified in Article 9 of the UCC.

 

“Refinance” means, in respect of any Indebtedness, to refinance, extend, renew,
refund, repay, prepay, redeem, defease or retire, or to issue other Indebtedness
in exchange or replacement for, such Indebtedness. “Refinanced” and
“Refinancing” shall have correlative meanings.

 

“Refinancing Indebtedness” means Indebtedness that is Incurred to refund,
refinance, replace, renew, repay or extend (including pursuant to any defeasance
or discharge mechanism) any Indebtedness of the Company or any Restricted
Subsidiary existing on the Closing Date or Incurred in compliance with the
Indenture (including Indebtedness of the Company that Refinances Refinancing
Indebtedness); provided, however, that:

 

(1) if the Indebtedness being refinanced is Subordinated Obligations, the
Refinancing Indebtedness has an Average Life at the time such Refinancing
Indebtedness is Incurred that is equal to or greater than the Average Life of
the Indebtedness being refinanced;

 

(2) such Refinancing Indebtedness is Incurred in an aggregate principal amount
(or if issued with original issue discount, an aggregate issue price) that is
equal to or less than the sum of (x) the aggregate principal amount (or if
issued with original issue discount, the aggregate accreted value) then

 

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outstanding of the Indebtedness being Refinanced plus (y) fees, underwriting
discounts, interest, premiums and other costs and expenses in connection with
the issuance of the Refinancing Indebtedness and repayment of the Indebtedness
being refinanced; and

 

(3) if the Indebtedness being Refinanced is subordinated in right of payment to
the notes, such Refinancing Indebtedness is subordinated in right of payment to
the notes at least to the same extent as the Indebtedness being Refinanced;

 

provided further, however, that Refinancing Indebtedness shall not include:

 

(A) Indebtedness of a Restricted Subsidiary (other than a Subsidiary Guarantor)
that Refinances Indebtedness of the Company; or

 

(B) Indebtedness of the Company or a Restricted Subsidiary that Refinances
Indebtedness of an Unrestricted Subsidiary.

 

“Required Credit Facility Lien Debtholders” means, at any time, the holders of
more than 50% of the sum of:

 

(1) the aggregate outstanding principal amount of Credit Facility Lien Debt
(including outstanding letters of credit whether or not then available or
drawn); and

 

(2) other than in connection with the exercise of remedies, the aggregate
unfunded commitments to extend credit which, when funded, would constitute
Credit Facility Lien Debt.

 

For purposes of this definition, Credit Facility Lien Debt registered in the
name of, or beneficially owned by, the Company or any Affiliate of the Company
will be deemed not to be outstanding.

 

“Required Note Lien Debtholders” means, at any time, the holders of a majority
in aggregate principal amount of all Note Lien Debt then outstanding. For
purposes of this definition, Note Lien Debt registered in the name of, or
beneficially owned by, the Company or any Affiliate of the Company will be
deemed not to be outstanding.

 

“Requirement of Law” means, as to any Person, any law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or two which such Person or any of its property is subject.

 

“Secured Debt” means all Note Lien Debt and all Credit Facility Lien Debt.

 

“Secured Debt Documents” means the Note Lien Documents and the Credit Facility
Lien Documents.

 

“Secured Debt Representative” means each Note Lien Representative and each
Credit Facility Lien Representative.

 

“Secured Obligations” means the Note Lien Obligations and the Credit Facility
Lien Obligations.

 

“Secured Parties” means the Credit Facility Secured Parties and the Note Secured
Parties.

 

“Securities” means all “securities” as defined in Article 8 of the UCC, any
stock, shares, partnership interests, voting trust certificates, certificates of
interest or participation in any profit-sharing agreement

 

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or arrangement, options, warrants, bonds, debentures, notes, or other evidences
of indebtedness, secured or unsecured, convertible, subordinated or otherwise,
or in general any instruments commonly known as “securities” or any certificates
of interest, shares or participations in temporary or interim certificates for
the purchase or acquisition of, or any right to subscribe to, purchase or
acquire, any of the foregoing.

 

“Securities Accounts” means all “securities accounts” as defined in Article 8 of
the UCC.

 

“Securities Entitlements” means all “securities entitlements” as defined in
Article 8 of the UCC.

 

“Series of Credit Facility Lien Debt” means, severally, the Indebtedness
outstanding under the Credit Agreement and any other Credit Facility that
constitutes Credit Facility Lien Debt.

 

“Series of Note Lien Debt” means, severally, the notes and each other issue or
series of Note Lien Debt for which a single transfer register is maintained.

 

“Series of Priority Lien Debt” means, with respect to the Fixed Collateral, each
Series of Note Lien Debt and, with respect to the Liquid Collateral, each Series
of Credit Facility Lien Debt.

 

“Series of Secured Debt” means each Series of Note Lien Debt and each Series of
Credit Facility Lien Debt.

 

“Subsidiary” of any Person means any corporation, association or other business
entity of which more than 50% of the total voting power of shares of Capital
Stock or other interests entitled (without regard to the occurrence of any
contingency and after giving effect to any voting agreement or stockholders’
agreement that effectively transfers voting power) to vote in the election of
directors, members of the Board of Directors, managers or trustees thereof is at
the time owned or controlled, directly or indirectly, by:

 

(1) such Person,

 

(2) such Person and one or more Subsidiaries of such Person or

 

(3) one or more Subsidiaries of such Person, or

 

any partnership (a) the sole general partner or the managing general partner of
which is such Person or a Subsidiary of such Person or (b) the only general
partners of which are that Person or one or more Subsidiaries of that Person (or
any combination thereof).

 

“Subsidiary Guarantee” means each Guarantee of the obligations with respect to
the notes issued by a Subsidiary of the Company pursuant to the terms of the
Indenture.

 

“Subsidiary Guarantor” means any Subsidiary that has issued a Subsidiary
Guarantee.

 

“Supporting Obligation” means all “supporting obligations” as defined in Article
9 of the UCC.

 

“Temporary Cash Investments” means any of the following:

 

(1) any investment in U.S. Government Obligations or obligations Guaranteed by
the United States of America or any agency thereof;

 

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(2) investments in time deposit accounts, certificates of deposit and money
market deposits maturing within one year of the date of acquisition thereof
issued by a bank or trust company that is organized under the laws of the United
States of America, any state thereof or any foreign country recognized by the
United States of America having capital, surplus and undivided profits
aggregating in excess of $250.0 million (or the foreign currency equivalent
thereof) and whose long-term debt is rated “A” (or such similar equivalent
rating) or higher by at least one nationally recognized statistical rating
organization (as defined in Rule 436 under the Securities Act);

 

(3) repurchase obligations with a term of not more than 30 days for underlying
securities of the types described in clause (1) above entered into with a bank
meeting the qualifications described in clause (2) above;

 

(4) investments in commercial paper, maturing not more than 270 days after the
date of acquisition, issued by a corporation (other than an Affiliate of the
Company) organized and in existence under the laws of the United States of
America or any foreign country recognized by the United States of America with a
rating at the time as of which any investment therein is made of “P-1” (or
higher) according to Moody’s Investors Service, Inc. (“Moody’s”) or “A-1” (or
higher) according to Standard and Poor’s Ratings Service, a division of The
McGraw-Hill Companies, Inc. (“S&P”);

 

(5) investments in securities with maturities of one year or less from the date
of acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States of America, or by any political subdivision or
taxing authority thereof, and rated at least “A” by S&P or “A” by Moody’s
Investors Service, Inc.;

 

(6) investment funds investing 95% of their assets in securities of the type
described in clauses (1) through (5) above (which funds may also hold reasonable
amounts of cash pending investment and/or distribution);

 

(7) investments in money market funds subject to the risk limiting conditions of
Rule 2a-7 (or any successor rule) of the SEC under the Investment Company Act of
1940, as amended; and

 

(8) similar investments approved by the Board of Directors in the ordinary
course of business.

 

“Trademark License” means with respect to any Grantor, any agreement (whether or
not in writing) providing for the grant by or to such Grantor of any right to
use any Trademark, subject in each case, to the terms of such agreements, and
the right to prepare for sale, sell and advertise for sale, all Inventory now or
hereafter covered by such agreements.

 

“Trademarks” means:

 

(1) all United States, state and foreign trademarks, service marks, trade names,
domain names, corporate names, company names, business names, trade dress, trade
styles, logos, or other indicia of origin or source identification, and all
registrations of and applications to register the foregoing and any new renewals
thereof;

 

(2) the right to sue or otherwise recover for any and all past, present and
future infringements and dilutions thereof;

 

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(3) all income, royalties, damages and other payments now and hereafter due
and/or payable with respect thereto (including payments under all licenses
entered into in connection therewith, and damages and payments for past, present
or future infringements and dilutions thereof); and

 

(4) all other rights of any kind whatsoever accruing thereunder or pertaining
thereto, together in each case with the goodwill of the business connected with
the use of, and symbolized by, each of the above.

 

“Trade Secret License” means, with respect to any Grantor, any agreement,
whether written or oral, providing for the grant by or to such Grantor of any
right to use any Trade Secret, subject in each case, to the terms of such
agreements, and the right to prepare for sale, sell and advertise for sale, all
Inventory now or hereafter covered by such agreements.

 

“Trade Secrets” means (1) all trade secrets and all confidential information,
(2) the right to sue or otherwise recover for any and all past, present and
future misappropriations thereof, (3) all income, royalties, damages and other
payments now and hereafter due and/or payable with respect thereto (including
payments under all licenses entered into in connection therewith, and damages
and payments for past, present or future misappropriations thereof), and (4) all
other rights of any kind whatsoever accruing thereunder or pertaining thereto.

 

“Trustee” means the party named as such in the Indenture until a successor
replaces it and, thereafter, means the successor.

 

“Uniform Commercial Code” or “UCC” means the Uniform Commercial Code (or any
similar or equivalent legislation) as in effect in the State of New York, or
where the context requires, each other applicable jurisdiction.

 

“U.S. Government Obligations” means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer’s option.

 

“Vehicles” means all cars, trucks, trailers, construction and earth moving
equipment and other vehicles, vessels and aircraft covered by a certificate of
title law of any jurisdiction and all appurtenances thereto.

 

SECTION 1.2 Rules of Interpretation.

 

(a) Unless otherwise indicated, any reference to any agreement or instrument
will be deemed to include a reference to that agreement or instrument as
assigned, amended, supplemented, amended and restated, or otherwise modified and
in effect from time to time or replaced in accordance with the terms of this
Agreement.

 

(b) The use in this Agreement of the word “include” or “including,” when
following any general statement, term or matter, will not be construed to limit
such statement, term or matter to the specific items or matters set forth
immediately following such word or to similar items or matters, whether or not
nonlimiting language (such as “without limitation” or “but not limited to” or
words of similar import) is used with reference thereto, but will be deemed to
refer to all other items or matters that fall within the broadest possible scope
of such general statement, term or matter. The word “will” has the same meaning
and effect as the word “shall.”

 

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(c) References to “Sections,” “clauses,” “recitals” and the “preamble” will be
to Sections, clauses, recitals and the preamble, respectively, of this Agreement
unless otherwise specifically provided. References to “Articles” will be to
Articles of this Agreement unless otherwise specifically provided. References to
“Exhibits” and “Schedules” will be to Exhibits and Schedules, respectively, to
this Agreement unless otherwise specifically provided.

 

(d) This Agreement will be construed without regard to the identity of the party
who drafted it and as though the parties participated equally in drafting it.
Consequently, each of the parties acknowledges and agrees that any rule of
construction that a document is to be construed against the drafting party will
not be applicable to this Agreement.

 

ARTICLE 2.

INTERCREDITOR PROVISIONS

 

SECTION 2.1 Ranking of Liens.

 

(a) Notwithstanding:

 

(1) anything to the contrary contained in the Secured Debt Documents;

 

(2) the time of incurrence of any Series of Secured Debt;

 

(3) the order or method of attachment or perfection of any Liens securing any
Series of Secured Debt;

 

(4) the time or order of filing or recording of financing statements, mortgages
or other documents filed or recorded to perfect any Lien upon any Collateral;

 

(5) the time of taking possession or control over any Collateral;

 

(6) that any Priority Lien with respect to a Collateral Class may not have been
perfected or may be or have become subordinated, by equitable subordination or
otherwise, to any other Lien; or

 

(7) the rules for determining priority under any law governing relative
priorities of Liens,

 

all Note Liens on Liquid Collateral at any time granted by the Company or any
Subsidiary Guarantor will be subject and subordinate to all Credit Facility
Liens on such Liquid Collateral securing Credit Facility Lien Obligations and,
conversely, all Credit Facility Liens on Fixed Collateral at any time granted by
the Company or any Subsidiary Guarantor will be subject and subordinate to all
Note Liens on such Fixed Collateral securing Note Lien Obligations. The
Indenture and the Credit Agreement impose limits on the aggregate amount of Note
Lien Debt that may be secured by Priority Liens on the Fixed Collateral and the
aggregate amount of Credit Facility Lien Debt that may be secured by Priority
Liens on the Liquid Collateral.

 

(b) The provisions in Section 2.1(a) are intended for the benefit of, and will
be enforceable as a third party beneficiary by, each present and future holder
of Priority Lien Obligations, each present and future Priority Lien
Representative and the Priority Lien Collateral Agent as holder of

 

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Priority Liens, in each case with respect to such Collateral Class. No other
Person will be entitled to rely on, have the benefit of or enforce those
provisions.

 

(c) In addition, the provisions of this Section 2.1 are intended solely to set
forth the relative ranking, as Liens, of the Liens on each Collateral Class
securing Note Lien Debt as against the Liens on such Collateral Class securing
Credit Facility Lien Debt. Neither the notes nor any other Note Lien
Obligations, nor any Credit Facility Obligations, nor the exercise or
enforcement of any right or remedy for the payment or collection thereof are
intended to be, or will ever be by reason of the foregoing provision, in any
respect subordinated, deferred, postponed, restricted or prejudiced.

 

SECTION 2.2 Notice of Foreclosure of Priority Liens.

 

(a) The Note Collateral Agent will not sell any Fixed Collateral in foreclosure
of its Liens thereon unless it has given the Credit Facility Collateral Agent at
least 10 days prior written notice of its intention to foreclose such Liens.

 

(b) The Credit Facility Collateral Agent will not sell any Liquid Collateral in
foreclosure of its Liens thereon unless it has given the Note Collateral Agent
at least 10 days prior written notice of its intention to foreclose such Liens.

 

SECTION 2.3 Restrictions on Enforcement of Junior Liens.

 

(a) Until the Discharge of Priority Lien Obligations with respect to a
Collateral Class, whether or not any Insolvency or Liquidation Proceeding has
been commenced by or against the Company or any of the Subsidiary Guarantors:

 

(1) the holders of Priority Liens on such Collateral Class will have, subject to
the exceptions set forth below in clauses (1) through (4) of Section 2.3(b), and
subject to the rights of the holders of Permitted Prior Liens and except as set
forth below, the exclusive right to enforce, collect or foreclose or realize on
such Collateral or exercise any other right or remedy with respect to such
Collateral, and

 

(2) no holder of a Junior Lien on such Collateral Class may take any action to
enforce, collect or foreclose or realize on such Collateral or exercise any
other right or remedy with respect to such Collateral;

 

provided, that the Junior Lien Collateral Agent may exercise any right to
enforce, collect or realize on such Collateral or exercise any other right or
remedy with respect to such Collateral after the passage of a period of 180 days
from the earlier of (a) the commencement of any Insolvency or Liquidation
Proceeding by or against any Grantor that has not been dismissed and (b) the
date of delivery of a notice in writing to the Priority Lien Collateral Agent
with respect to such Collateral Class of the Junior Lien Collateral Agent’s
intention to exercise its right to take such actions (the “Standstill Period”);
provided further, however, the Junior Lien Collateral Agent will not be entitled
to exercise any rights or remedies with respect to such Collateral Class if,
notwithstanding the expiration of the Standstill Period, the Priority Lien
Collateral Agent, any Priority Lien Representative or any holder of Priority
Lien Debt shall have commenced the exercise of any of their rights or remedies
with respect to all or any portion of such Collateral Class (prompt notice of
such exercise to be given to the Junior Lien Collateral Agent) and is pursuing
the exercise thereof.

 

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(b) Notwithstanding Section 2.3(a), each holder of Junior Liens on a Collateral
Class may, subject to the rights of the holders of Permitted Prior Liens:

 

(1) enforce, collect or foreclose or realize on such Collateral or exercise any
other right or remedy with respect to such Collateral without any condition or
restriction whatsoever, at any time after the Discharge of Priority Lien
Obligations with respect to such Collateral Class;

 

(2) redeem such Collateral in a creditor’s redemption permitted by law or to
deliver any notice or demand necessary to enforce (subject to the prior
Discharge of Priority Lien Obligations with respect to such Collateral Class)
any right to claim, take or receive Proceeds of such Collateral remaining after
such Discharge of Priority Lien Obligations in the event of foreclosure or other
enforcement of any Permitted Prior Lien on such Collateral;

 

(3) take any action to perfect or establish the priority (subject to Priority
Liens and Permitted Prior Liens) of its Liens upon such Collateral in any manner
other than by taking possession or control of such Collateral; or

 

(4) as necessary to create, prove, preserve or protect (but not enforce) its
Liens upon such Collateral.

 

(c) Subject to Section 2.14, until the Discharge of Priority Lien Obligations
with respect to a Collateral Class, no holder of a Junior Lien Obligation,
Junior Lien Collateral Agent or Junior Lien Representative with respect to such
Collateral Class will:

 

(1) request judicial relief, in an Insolvency or Liquidation Proceeding or in
any other court, that would hinder, delay, limit or prohibit the lawful exercise
or enforcement of any right or remedy otherwise available to the holders of
Priority Lien Obligations, the Priority Lien Collateral Agent or any Priority
Lien Representative in respect of the Priority Liens on such Collateral or that
would limit, invalidate, avoid or set aside any such Priority Lien or
subordinate such Priority Liens to such Junior Liens or grant such Junior Liens
equal or senior ranking to such Priority Liens (subject to the right of holders
of Junior Liens with respect to such Collateral Class to exercise any of their
rights or remedies with respect to such Collateral after the termination of the
Standstill Period to the extent permitted above);

 

(2) oppose or otherwise contest any motion for relief from the automatic stay or
from any injunction against foreclosure or enforcement of Priority Liens with
respect to such Collateral made by any holder of Priority Lien Obligations, the
Priority Lien Collateral Agent or any Priority Lien Representative with respect
to such Collateral in any Insolvency or Liquidation Proceedings;

 

(3) oppose or otherwise contest any lawful exercise by any holder of Priority
Lien Obligations, the Priority Lien Collateral Agent or any Priority Lien
Representative with respect to such Collateral of the right to credit bid its
Priority Lien Debt at any sale in foreclosure of its Priority Liens;

 

(4) oppose or otherwise contest any other request for judicial relief made in
any court by any holder of Priority Lien Obligations, the Priority Lien
Collateral Agent or any Priority Lien Representative with respect to such
Collateral relating to the lawful enforcement of any of its Priority Liens on
such Collateral; or

 

(5) challenge the validity, enforceability, perfection or priority of any
Priority Lien with respect to such Collateral.

 

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(d) Notwithstanding the foregoing provisions of this Section 2.3, both before
and during an Insolvency or Liquidation Proceeding, each holder of Secured
Obligations and each Secured Debt Representative may take any actions and
exercise any and all rights and remedies that would be available to a holder of
unsecured claims, including, without limitation, the commencement of an
Insolvency or Liquidation Proceeding against the Company or any Subsidiary
Guarantor in accordance with applicable law; provided that:

 

(1) the Note Collateral Agent, each holder of notes, by accepting a note, and
each holder of other Note Lien Debt agree, solely with respect to the Liquid
Collateral, to not (i) take any of the actions prohibited under clauses
(1) through (5) of Section 2.3(c) or (ii) oppose or contest any order that it
has agreed not to oppose or contest under Section 2.5; and

 

(2) the Credit Facility Collateral Agent, each lender under the Credit Agreement
and each holder of other Credit Facility Lien Debt agree, solely with respect to
the Fixed Collateral, to not (i) take any of the actions prohibited under
clauses (1) through (5) of Section 2.3(c) or (ii) oppose or contest any order
that it has agreed not to oppose or contest under Section 2.5;

 

(e) The Proceeds from any enforcement of Junior Liens will be applied in
accordance with Section 2.6.

 

SECTION 2.4 Waiver of Right of Marshalling.

 

(a) Prior to the Discharge of Priority Lien Obligations with respect to a
Collateral Class, the Junior Lien Collateral Agent, each Junior Lien
Representative and the holders of Junior Lien Obligations with respect to such
Collateral Class may not assert or enforce any right of marshalling accorded to
a junior lienholder with respect to such Collateral, as against the holders of
Priority Liens on such Collateral (in their capacity as priority lienholders).

 

(b) Following such Discharge of Priority Lien Obligations, the Junior Lien
Collateral Agent, any Junior Lien Representative and holders of Junior Lien
Obligations with respect to such Collateral Class may assert their right under
the Uniform Commercial Code or otherwise to any Proceeds remaining following a
sale or other disposition of such Collateral by, or on behalf of, the holders of
such Priority Lien Obligations.

 

SECTION 2.5 Insolvency or Liquidation Proceedings.

 

(a) In any Insolvency or Liquidation Proceeding and prior to the Discharge of
Priority Lien Obligations with respect to Liquid Collateral, if the Required
Credit Facility Lien Debtholders consent to any order:

 

(1) for use of cash collateral other than identifiable Cash Proceeds of any
Fixed Collateral;

 

(2) approving a debtor-in-possession financing in such Insolvency or Liquidation
Proceeding secured by a Lien on any or all of the Liquid Collateral and any or
all of the Fixed Collateral, in each case that is senior to all Priority Liens
and Junior Liens on such Collateral; provided that (i) (without otherwise
limiting the amount of such debtor-in-possession financing or the Obligations
secured by the collateral security for such debtor-in-possession financing) the
aggregate principal amount of all Indebtedness (including all fixed and
contingent

 

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reimbursement obligations in respect of letters of credit) at any time
outstanding in such debtor-in-possession financing that is secured by such
super-priority Lien on Fixed Collateral shall not at any time exceed $25.0
million, and (ii) the lenders in such debtor-in-possession financing and the
holders of such super-priority Lien on Fixed Collateral agree to not oppose or
otherwise contest the entry of an order consented to by the Required Note Lien
Debtholders, and agree to waive all rights to seek or enforce adequate
protection (or its equivalent) in connection with such order, approving to a
sale of Fixed Collateral that provides, to the extent the assets sold are to be
free and clear of Liens, that all such super-priority Liens will attach with the
same super-priority to the Proceeds of the sale; or

 

(3) relating to a sale of Liquid Collateral that provides, to the extent the
assets sold are to be free and clear of Liens, that all Priority Liens and
Junior Liens will attach to the Proceeds of the sale and that permits the
holders of Note Lien Obligations to credit bid Note Lien Obligations subject to,
and effective only after, the prior Discharge of Priority Lien Obligations with
respect to all Credit Facility Lien Obligations secured by such Liquid
Collateral;

 

then the holders of Note Lien Obligations, Note Collateral Agent and Note Lien
Representatives, in their capacity solely as holders of (or agents or
representatives of holders of) secured claims will not oppose or otherwise
contest the entry of such order and will waive all rights to seek or enforce
adequate protection (or its equivalent) in connection therewith.

 

(b) In any Insolvency or Liquidation Proceeding and prior to the Discharge of
Priority Lien Obligations with respect to Fixed Collateral, if the Required Note
Lien Debtholders consent to any order:

 

(1) for use of cash collateral consisting solely of the identifiable Cash
Proceeds of the Fixed Collateral; or

 

(2) relating to a sale of Fixed Collateral that provides, to the extent the
assets sold are to be free and clear of Liens, that all Priority Liens and
Junior Liens will attach to the Proceeds of the sale and that permits the
holders of Credit Facility Lien Obligations to credit bid Credit Facility Lien
Obligations subject to, and effective only after, the prior Discharge of
Priority Lien Obligations with respect to all Note Lien Obligations secured by
such Fixed Collateral;

 

then the holders of Credit Facility Lien Obligations, Credit Facility Collateral
Agent and Credit Facility Lien Representatives, in their capacity solely as
holders of (or as agents or representatives of holders of) secured claims, will
not oppose or otherwise contest the entry of such order and will waive all
rights to seek or enforce adequate protection (or its equivalent) in connection
therewith.

 

(c) Notwithstanding Sections 2.5(a) and 2.5(b), but subject to Section 2.3, each
holder of Secured Obligations, each Collateral Agent and each Secured Debt
Representative may, both before and during an Insolvency or Liquidation
Proceeding, take any actions and exercise any and all rights that would be
available to a holder of unsecured claims, including, without limitation:

 

(1) to commence any Insolvency or Liquidation Proceeding against the Company or
any Subsidiary Guarantor in accordance with applicable law; and

 

(2) to seek or oppose any relief, contest any matter, enforce any right or
remedy or take any other action in or related to any Insolvency or Liquidation
Proceeding to the

 

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full extent that a holder of unsecured claims is permitted by law to seek or
oppose such relief, contest such matter, enforce such right or remedy or take
such other action.

 

(d) Except as set forth in Sections 2.5(a) and 2.5(b), no holder of Secured
Debt, Secured Debt Representative or Collateral Agent, in its capacity as a
holder of Junior Lien Debt, a Junior Lien Representative or the Junior Lien
Collateral Agent, as applicable, with respect to a Collateral Class is obligated
or required to (1) waive any right to seek or enforce adequate protection (or
its equivalent) on its own behalf or (2) refrain from contesting the enforcement
of adequate protection (or its equivalent) by any holder of Priority Lien Debt,
any Priority Lien Representative or the Priority Lien Collateral Agent with
respect to such Collateral Class.

 

SECTION 2.6 Order of Application

 

(a) If the Priority Lien Collateral Agent with respect to a Collateral Class
sells or otherwise realizes upon any Collateral of such Collateral Class in
connection with any foreclosure, collection or other enforcement of Priority
Liens granted to such Priority Lien Collateral Agent in the applicable Priority
Lien Documents, the Proceeds received by the Priority Lien Collateral Agent from
such foreclosure, collection or other enforcement will be distributed by the
Priority Lien Collateral Agent in the following order of application:

 

FIRST, to the payment of all amounts payable under the applicable Priority Lien
Documents on account of the Priority Lien Collateral Agent’s fees and any
reasonable legal fees, costs and expenses or other liabilities of any kind
incurred by such Priority Lien Collateral Agent or any co-trustee or agent of
such Priority Lien Collateral Agent in connection with any applicable Priority
Lien Document;

 

SECOND, to the respective Priority Lien Representatives for application to the
payment of all outstanding Priority Lien Debt and any other Priority Lien
Obligations that are then due and payable in such order as may be provided in
the Priority Lien Documents in an amount sufficient to pay in full in cash all
outstanding Priority Lien Debt and all other Priority Lien Obligations that are
then due and payable (including all interest accrued thereon after the
commencement of any Insolvency or Liquidation Proceeding at the rate, including
any applicable post-default rate, specified in the Priority Lien Documents, even
if such interest is not enforceable, allowable or allowed as a claim in such
proceeding, and including the discharge or cash collateralization (at the lower
of (1) 105% of the aggregate undrawn amount and (2) the percentage of the
aggregate undrawn amount required for release of Liens under the terms of the
applicable Priority Lien Document) of all outstanding letters of credit
constituting Priority Lien Debt);

 

THIRD, to the payment of all amounts payable under the Junior Lien Documents on
account of the Junior Lien Collateral Agent’s fees and any reasonable legal
fees, costs and expenses or other liabilities of any kind incurred by the Junior
Lien Collateral Agent or any co-trustee or agent of the Junior Lien Collateral
Agent;

 

FOURTH, to the respective Junior Lien Representatives for application to the
payment of all outstanding Junior Lien Debt and any other Junior Lien
Obligations that are then due and payable in such order as may be provided in
the Junior Lien Documents in an amount sufficient to pay in full in cash all
outstanding Junior Lien Debt and all other Junior Lien Obligations that are then
due and payable (including, to the extent legally permitted, all interest
accrued thereon after the commencement of any Insolvency or Liquidation
Proceeding at the rate, including any applicable post-default rate, specified in
the Junior Lien Documents, even if such

 

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interest is not enforceable, allowable or allowed as a claim in such proceeding,
and including the discharge or cash collateralization (at the lower of (1) 105%
of the aggregate undrawn amount and (2) the percentage of the aggregate undrawn
amount required for release of Liens under the terms of the applicable Junior
Lien Document) of all outstanding letters of credit, if any, constituting Junior
Lien Debt); and

 

FIFTH, any surplus remaining after the payment in full in cash of the amounts
described in the preceding clauses will be paid to the Company or the applicable
Subsidiary Guarantor, as the case may be, its successors or assigns, or as a
court of competent jurisdiction may direct.

 

(b) If, after the Discharge of Priority Lien Obligations with respect to a
Collateral Class, the Junior Lien Collateral Agent with respect to such
Collateral Class sells or realizes upon such Collateral in connection with any
foreclosure, collection or other enforcement of its Liens granted to such Junior
Lien Collateral Agent in the Junior Lien Security Documents, the Proceeds
received by the Junior Lien Collateral Agent from such foreclosure, collection
or other enforcement will be distributed by the Junior Lien Collateral Agent in
the following order of application:

 

FIRST, to the payment of all amounts payable under the Junior Lien Documents on
account of such Junior Lien Collateral Agent’s fees and any reasonable legal
fees, costs and expenses or other liabilities of any kind incurred by such
Junior Lien Collateral Agent or any co-trustee or agent of such Junior Lien
Collateral Agent in connection with any applicable Junior Lien Security
Documents; and

 

SECOND, in accordance with clauses FOURTH and FIFTH of Section 2.6(a).

 

(c) At any time prior to the Discharge of Priority Lien Obligations with respect
to a Collateral Class and after:

 

(1) the commencement of any Insolvency or Liquidation Proceeding in respect of
the Company or any Subsidiary Guarantor, or

 

(2) the Junior Lien Collateral Agent and each Junior Lien Representative with
respect to such Collateral Class has received written notice from any Priority
Lien Representative with respect to such Collateral Class stating that (i) any
Series of Priority Lien Debt with respect to such Collateral has become due and
payable in full (whether at maturity, upon acceleration or otherwise) or
(ii) the holders of Priority Liens on such Collateral securing one or more
Series of Priority Lien Debt have become entitled under any Priority Lien
Documents to and desire to enforce any or all of such Priority Liens by reason
of a default under such Priority Lien Documents,

 

no payment of money (or the equivalent of money) will be made from the
identifiable Cash Proceeds of Collateral from such Collateral Class by the
Company or any Subsidiary Guarantor to the Junior Lien Collateral Agent, any
Junior Lien Representative or any holder of Junior Lien Obligations with respect
to such Collateral Class (including, without limitation, payments and
prepayments made for application to Junior Lien Obligations and all other
payments and deposits made pursuant to any provision of the Junior Lien
Documents), except to the extent the holders of Junior Liens with respect to
such Collateral Class exercise their rights and remedies after the expiration of
the Standstill Period to the extent permitted under Section 2.3.

 

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(d) Subject to Section 2.14, all identifiable Cash Proceeds of Collateral of any
Collateral Class received by the Junior Lien Collateral Agent, any Junior Lien
Representative or any holder of Junior Lien Obligations with respect to such
Collateral Class at any time prior to the Discharge of Priority Lien Obligations
with respect to such Collateral Class in violation of Section 2.6(c) will be
held by such Junior Lien Collateral Agent, Junior Lien Representative or holder
of Junior Lien Obligations for the account of the holders of Priority Liens on
such Collateral Class and remitted to the Priority Lien Collateral Agent with
respect to such Collateral Class upon demand by such Priority Lien Collateral
Agent. The Junior Liens will remain attached to and, subject to Section 2.1,
enforceable against all Proceeds so held or remitted. All Proceeds of Collateral
received by any Junior Lien Collateral Agent, Junior Lien Representative or
holder of Junior Lien Obligations not in violation of Section 2.6(c) will be
received by it free from the Priority Liens and all other Liens on such
Collateral except the Junior Liens.

 

(e) The provisions of this Section 2.6 are intended for the benefit of, and will
be enforceable as a third party beneficiary by, each present and future holder
of Secured Obligations, each present and future Secured Debt Representative, the
Credit Facility Collateral Agent as holder of Credit Facility Liens and the Note
Collateral Agent as holder of Note Liens.

 

SECTION 2.7 Release of Liens on Collateral.

 

The Junior Liens upon any or all of the property in any Collateral Class
automatically will be released and no longer secure the Junior Lien Obligations
with respect to such property, and the right of the holders of such Junior Lien
Obligations to the benefits of and proceeds of such Junior Liens on such
property automatically will terminate and be discharged, upon the release of the
Priority Liens on such property, whether such release of Priority Liens is
automatically effective by operation of law or pursuant to the provisions of the
Priority Lien Documents or becomes effective pursuant to a release delivered by
the Priority Lien Collateral Agent; provided that no release of Junior Liens
with respect to any property in any Collateral Class will be deemed to have
occurred (a) upon a Discharge of Priority Lien Obligations with respect to such
Collateral Class or (b) in a Refinancing of Priority Lien Debt of such
Collateral Class with secured Indebtedness that is Incurred contemporaneously
with or promptly after the discharge of such pre-existing Priority Lien Debt and
that constitutes Priority Lien Debt as to such Collateral Class.

 

SECTION 2.8 Amendment of this Agreement and Other Security Documents.

 

(a) No amendment or supplement to the provisions of this Agreement will be
effective unless set forth in writing signed by the Note Collateral Agent acting
under the direction of the Required Note Lien Debtholders and signed by the
Credit Facility Collateral Agent acting under the direction of the Required
Credit Facility Lien Debtholders.

 

(b) The ability of the Company, the other Grantors and the Credit Facility
Collateral Agent to amend or supplement any other Credit Facility Lien Security
Document, or the ability of the Company, the other Grantors and the Note
Collateral Agent to amend or supplement any other Note Lien Security Document is
not restricted by this Agreement. The Note Lien Security Documents may be
amended, supplemented or modified as set forth in Section 10.01 of the
Indenture.

 

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SECTION 2.9 Voting. In connection with any matter under this Agreement requiring
a vote of holders of Secured Debt, each Series of Secured Debt will cast its
votes in accordance with the Secured Debt Documents governing such Series of
Secured Debt.

 

SECTION 2.10 Perfection of Liens as to Deposit Accounts and Securities Accounts.

 

(a) If so requested by the Note Collateral Agent for the purpose of perfecting
Junior Liens of the Note Collateral Agent in any Deposit Account or Securities
Account constituting Liquid Collateral, the Credit Facility Collateral Agent
will join with the Note Collateral Agent in requesting the depositary bank or
securities intermediary that maintains such account to agree (on terms
reasonably satisfactory to each Collateral Agent) that such depositary bank or
securities intermediary will comply with all entitlement orders or instructions
issued by the Note Collateral Agent; provided, however, that if such entitlement
orders or instructions are issued prior to the time that the Credit Facility
Collateral Agent shall have notified the depositary bank or securities
intermediary of a Discharge of Priority Lien Obligations, such depositary bank
or securities intermediary shall not comply with any such entitlement orders or
instructions unless the Credit Facility Collateral Agent shall have consented
thereto in writing.

 

(b) If so requested by the Credit Facility Collateral Agent for the purpose of
perfecting Junior Liens of the Credit Facility Collateral Agent in any Net
Available Cash Account constituting Fixed Collateral, the Note Collateral Agent
will join with the Credit Facility Collateral Agent in requesting the depositary
bank or securities intermediary that maintains such account to agree (on terms
reasonably satisfactory to each Collateral Agent) that such depositary bank or
securities intermediary will comply with all entitlement orders or instructions
issued by the Credit Facility Collateral Agent; provided, however, that if such
entitlement orders or instructions are issued prior to the time that the Note
Collateral Agent shall have notified the depositary bank or securities
intermediary of a Discharge of Priority Lien Obligations, such depositary bank
or securities intermediary shall not comply with any such entitlement orders or
instructions unless the Note Collateral Agent shall have consented thereto in
writing.

 

SECTION 2.11 Credit Facility Liens on Fixed Collateral and Excluded Assets. The
Credit Facility Collateral Agent will not accept or file any real estate
mortgage, fixture filing, security assignment of Intellectual Property, vehicle
certificate of title lien registration, aircraft or vessel lien registration or
other comparable document, except a financing statement filed under any
applicable UCC, that creates or perfects any Credit Facility Lien in favor of
the Credit Facility Collateral Agent on Fixed Collateral or on any property,
except Equity Interests, that constitutes an Excluded Asset but would constitute
Fixed Collateral if not classified as an Excluded Asset, unless a substantially
comparable document is also delivered to or filed in favor of the Note
Collateral Agent in respect of Note Liens. If so requested at any time by the
Credit Facility Collateral Agent, the Note Collateral Agent will request the
Grantors to execute and deliver any such substantially comparable document in
accordance with Section 4.19 of the Indenture.

 

SECTION 2.12 Delivery of Collateral.

 

(a) Following the Discharge of Priority Lien Obligations with respect to a
Collateral Class, the Priority Lien Collateral Agent with respect to such
Collateral Class will, to the extent permitted by applicable law, deliver to the
Junior Lien Collateral Agent or such other person as a court of competent
jurisdiction may otherwise direct any Collateral of such Collateral Class that
may be held by it in pledge, without recourse and without any representation or
warranty whatsoever. In addition, the Credit Facility Collateral Agent shall
promptly notify in writing all depositary banks and securities intermediaries
that have established Deposit Accounts or Securities Accounts over which the
Credit Facility Collateral Agent has perfected its security interest by control
that the security interest of the Credit Facility Collateral

 

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Agent has been discharged (which shall constitute notice of Discharge of
Priority Lien Obligations with respect to Liquid Collateral in accordance with
Section 2.10) and, to the extent permitted by any applicable control agreement,
assign such control agreement to the Note Collateral Agent.

 

(b) If, following any Discharge of Priority Lien Obligations with respect to a
Collateral Class, additional Priority Lien Debt is incurred with respect to such
Collateral Class, the Junior Lien Collateral Agent will, to the extent permitted
by applicable law, deliver to the Priority Lien Collateral Agent in respect of
such Priority Lien Debt any Collateral of such Collateral Class that may be held
by it in pledge, without recourse and without any representation or warranty
whatsoever. In addition, if, following any Discharge of Priority Lien
Obligations with respect to the Liquid Collateral, the Company or any of its
Restricted Subsidiaries Incurs additional Credit Facility Lien Debt in
accordance with the Secured Debt Documents, the Note Lien Collateral Agent shall
take all actions reasonably requested by the Credit Facility Collateral Agent to
cause the Credit Facility Collateral Agent to benefit from a perfected security
interest in all Deposit Accounts or Securities Accounts over which the Note Lien
Collateral Agent has perfected its security interest by control, on terms that
are substantially similar to those in effect prior to such Discharge of Priority
Lien Obligations.

 

SECTION 2.13 Cooperation and Access with Respect to Liquid Collateral.

 

(a) The Note Collateral Agent hereby:

 

(1) consents (without any representation, warranty or obligation whatsoever) to
the grant by any Grantor to the Credit Facility Collateral Agent of a perpetual
non-exclusive royalty-free license to use any or all of the Intellectual
Property of such Grantor that is subject to a Lien held by the Note Collateral
Agent, to the extent the use of such Intellectual Property is necessary or
appropriate, in the good faith opinion of the Credit Facility Collateral Agent,
to process, ship, produce, store, complete, supply, lease, sell or otherwise
dispose of any Inventory in any lawful manner; and

 

(2) in its capacity as a secured party, grants to the Credit Facility Collateral
Agent (without any representation, warranty or obligation whatsoever) a
perpetual non-exclusive royalty-free license to use any or all of the
Intellectual Property that is subject to a Lien held by the Note Collateral
Agent for any such use, sale or disposition set forth in clause (1) above;

 

in each case in connection with the enforcement of any Priority Lien held by the
Credit Facility Collateral Agent upon any Inventory or other Liquid Collateral
of any Grantor.

 

(b) The Credit Facility Collateral Agent hereby:

 

(1) consents (without any representation, warranty or obligation whatsoever) to
the grant by any Grantor to the Note Collateral Agent of a perpetual
non-exclusive royalty-free license to use any or all of the Intellectual
Property of such Grantor that is subject to a Lien held by the Credit Facility
Collateral Agent, to the extent the use of such Intellectual Property is
necessary or appropriate, in the good faith opinion of the Note Collateral
Agent, to process, ship, produce, store, complete, supply, lease, sell or
otherwise dispose of any Inventory in any lawful manner; and

 

(2) in its capacity as a secured party, grants to the Note Collateral Agent
(without any representation, warranty or obligation whatsoever) a perpetual
non-exclusive royalty-free license to use any or all of the Intellectual
Property that is subject to a Lien held by

 

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the Credit Facility Collateral Agent for any such use, sale or disposition set
forth in clause (1) above;

 

in each case in connection with the enforcement of any Junior Lien held by the
Note Collateral Agent upon any Inventory or other Liquid Collateral of any
Grantor.

 

(c) If the Note Collateral Agent takes actual possession of any documentation of
a Grantor (whether such documentation is in the form of a writing or is stored
in any data equipment or data record in the physical possession of the Note
Collateral Agent), then upon request of the Credit Facility Collateral Agent and
reasonable advance written notice, the Note Collateral Agent will permit the
Credit Facility Collateral Agent or its representative to inspect and copy such
documentation if and to the extent the Credit Facility Collateral Agent
certifies to the Note Collateral Agent that:

 

(1) the documentation contains or may contain information necessary or
appropriate, in the good faith opinion of the Credit Facility Collateral Agent,
to the enforcement of the Credit Facility Collateral Agent’s Liens upon any
Liquid Collateral; and

 

(2) the Credit Facility Collateral Agent and the Credit Facility Secured Parties
are entitled to receive and use such information as against the Grantors and
their suppliers, customers and contractors and under applicable law and, in
doing so, will comply with all obligations imposed by law or contract in respect
of the disclosure or use of such information.

 

(d) If, upon enforcement of any Note Liens, the Note Collateral Agent or a
purchaser at a foreclosure sale conducted in foreclosure of any Note Liens takes
actual possession of Fixed Collateral of any Grantor, then, if so requested by
the Credit Facility Collateral Agent and upon reasonable advance notice, the
Note Collateral Agent will allow, and use commercially reasonable efforts to
cause such purchaser to allow, the Credit Facility Collateral Agent and its
officers, employees and agents (but not any of its transferees) reasonable and
non-exclusive access to and use of such property for a period not exceeding 90
consecutive calendar days (the “Processing and Sale Period”), as necessary or
reasonably appropriate to process, ship, produce, store, complete, supply,
lease, sell or otherwise handle, deal with or dispose of, in any lawful manner,
any Inventory or other Liquid Collateral upon which the Credit Facility
Collateral Agent holds a Priority Lien, subject to the following conditions and
limitations:

 

(1) the Processing and Sale Period will commence on the date the Note Collateral
Agent or the foreclosure purchaser takes possession of such real property and
makes it available to the Credit Facility Collateral Agent and shall terminate
on the earlier of (A) the day that is 90 days thereafter and (B) the day on
which all Liquid Collateral (other than Liquid Collateral abandoned by the
Credit Facility Collateral Agent) has been removed from such property; and

 

(2) the Note Collateral Agent will be entitled, as a condition of permitting
such access and use, to demand and receive assurances reasonably satisfactory to
it that the access or use requested and all activities incidental thereto:

 

(A) will be permitted, lawful and enforceable as against Grantors and their
suppliers, customers and contractors and under applicable law and will be
conducted in accordance with prudent manufacturing practices; and

 

(B) will be adequately insured for damage to property and liability to persons,
including property and liability insurance for the benefit of the Note
Collateral

 

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Agent and the holders of the Note Lien Obligations, at no cost to the Note
Collateral Agent or such holders.

 

The Note Collateral Agent (i) will provide reasonable cooperation to the Credit
Facility Collateral Agent in connection with the manufacture, production,
completion, handling, removal and sale of any Liquid Collateral by the Credit
Facility Collateral Agent as provided above and (ii) will be entitled to
receive, from the Credit Facility Collateral Agent, fair compensation and
reimbursement for the Note Collateral Agent’s reasonable costs and expenses
incurred in connection with such cooperation, support and assistance to the
Credit Facility Collateral Agent. The Note Collateral Agent and/or any such
purchaser (or its transferee or successor) will not otherwise be required to
manufacture, produce, complete, remove, insure, protect, store, safeguard, sell
or deliver any Inventory subject to any Priority Lien held by the Credit
Facility Collateral Agent or to provide any support, assistance or cooperation
to the Credit Facility Collateral Agent in respect thereof.

 

(e) The Note Collateral Agent may condition its performance of any obligation
set forth in this Section 2.13 upon its prior receipt (without cost to it) of:

 

(1) such assurances as it may reasonably request to confirm that the performance
of such obligation and all activities of the Credit Facility Collateral Agent or
its officers, employees and agents in connection therewith or incidental
thereto:

 

(A) will be permitted, lawful and enforceable as against the Company and its
Subsidiaries and their suppliers, customers and contractors and under applicable
law; and

 

(B) will not impose upon the Note Collateral Agent (or any Note Secured Party)
any legal duty, legal liability or risk of uninsured loss; and

 

(2) such indemnity or insurance as the Note Collateral Agent may reasonably
request in connection therewith.

 

(f) The Company and the other Grantors consent to the performance by the Note
Collateral Agent of the obligations set forth in this Section 2.13 and
acknowledge and agree that, to the fullest extent permitted by applicable law,
neither the Note Collateral Agent nor any Note Lien Representative or holder of
Note Lien Obligations will ever be accountable or liable for any action taken or
omitted by the Credit Facility Collateral Agent or any Credit Facility Secured
Party or its or any of their officers, employees, agents successors or assigns
in connection therewith or incidental thereto or in consequence thereof,
including any improper use or disclosure of any proprietary information or other
intellectual property by the Credit Facility Collateral Agent or any Credit
Facility Secured Party or its or any of their officers, employees, agents,
successors or assigns or any other damage to or misuse or loss of any property
of the Grantors as a result of any action taken or omitted by the Credit
Facility Collateral Agent or its officers, employees, agents, successors or
assigns.

 

SECTION 2.14 Relative Rights. Nothing in this Agreement will:

 

(1) impair, as between the Company and the holders of Secured Debt, the
obligation of the Company to pay principal of, premium and interest and
liquidated damages, if any, on the Secured Debt in accordance with its terms or
any other obligation of the Company or any Subsidiary Guarantor;

 

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(2) affect the relative rights of holders of Secured Debt as against any other
creditors of the Company or any Subsidiary Guarantor (other than holders of
Credit Facility Liens, Permitted Prior Liens or other Note Liens);

 

(3) restrict the right of any holder of Secured Debt to sue for payments that
are then due and owing (but not enforce any judgment in respect thereof against
any Collateral to the extent specifically prohibited by Sections 2.3 and 2.5);

 

(4) restrict or prevent any holder of Secured Debt or other Secured Obligations
or any Collateral Agent or Secured Debt Representative from exercising any of
its rights or remedies upon any default or event of default not specifically
restricted or prohibited by Sections 2.3 and 2.5; or

 

(5) restrict or prevent any holder of Secured Debt or other Secured Obligations
or any Collateral Agent or Secured Debt Representative from taking any lawful
action in an Insolvency or Liquidation Proceeding not specifically restricted or
prohibited by Sections 2.3 and 2.5.

 

ARTICLE 3.

MISCELLANEOUS PROVISIONS

 

SECTION 3.1 All Note Liens Granted to Note Collateral Agent; All Credit Facility
Liens Granted to Credit Facility Collateral Agent.

 

(a) No Grantor will grant any Lien securing Note Lien Debt to any Person other
than the Person then acting as Note Collateral Agent or a co-agent or sub-agent
of the Note Collateral Agent.

 

(b) No Grantor will grant any Lien securing Credit Facility Lien Debt to any
Person other than the Person then acting as Credit Facility Collateral Agent or
a co-agent or sub-agent of the Credit Facility Collateral Agent.

 

SECTION 3.2 Obligations of Secured Debt Representatives.

 

(a) Without representing or warranting the legality, enforceability or
sufficiency thereof, the Trustee states that the Indenture includes the
following provision:

 

For the enforceable benefit of all holders of each existing and future Series of
Credit Facility Lien Debt and each existing and future Credit Facility Lien
Representative, each Holder of a Note, by its acceptance thereof: (1) agrees
that all Note Lien Obligations will be and are secured equally and ratably by
all Note Liens at any time granted by the Company or any Subsidiary Guarantor to
secure any Obligations in respect of the Notes and the related Guarantees
thereof by the Subsidiary Guarantors, whether or not upon property otherwise
constituting collateral for the Notes and the related Guarantees thereof by the
Subsidiary Guarantors, and that all such Note Liens will be enforceable by the
Note Collateral Agent for the benefit of all holders of Note Lien Obligations
equally and ratably;(2) agrees that the holders of Obligations in respect of the
Notes and the Guarantees thereof by the Subsidiary Guarantors are bound by the
provisions of the Intercreditor Agreement,

 

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including the provisions therein relating to the ranking of Note Liens; and
(3) consents to and directs the Note Collateral Agent to perform its obligations
under the Intercreditor Agreement and the other Note Lien Security Documents.

 

(b) Without representing or warranting the legality, enforceability or
sufficiency thereof, the Credit Agreement Agent states that the Initial Credit
Agreement includes the following provision:

 

Each Agent and Lender hereby (a) irrevocably authorizes and directs the
Administrative Agent to enter into the Secured Note Intercreditor Agreement and
to assume and perform its obligations thereunder and (b) agrees for the
enforceable benefit of all holders of each existing and future Series of Note
Lien Debt (as defined therein) and each existing and future Note Lien
Representative (as defined therein) that (i) that the holders of Obligations
hereunder are bound by the provisions of the Secured Note Intercreditor
Agreement, including the provisions relating to the ranking of Credit Facility
Liens (as defined therein), and (ii) such Agent or Lender consents to and
directs the Administrative Agent, as Credit Facility Collateral Agent (as
defined in the Secured Note Intercreditor Agreement), to perform its obligations
under the Secured Note Intercreditor Agreement and the other security documents.

 

“Secured Note Intercreditor Agreement”: The Intercreditor Agreement dated as of
October 28, 2005 among JPMorgan Chase Bank, N.A., as Administrative Agent under
this Agreement and Credit Facility Collateral Agent (as defined therein), the
Note Collateral Agent and trustee under the Senior Secured Note Indenture and
the Borrower and Subsidiary Guarantors.

 

(c) Each Secured Debt Representative confirms its consent to the agreements set
forth herein.

 

SECTION 3.3 Obligations of Grantors Joint and Several; All Other Obligations
Several; Immunities and Indemnities of Agents and Representatives.

 

(a) Each party hereto will be obligated under this Agreement only for the
performance of its own obligations hereunder. All liabilities arising hereunder
will be in all respects several and not joint.

 

(b) All obligations of the Grantors hereunder are and will be in all respects
joint and several.

 

(c) Except as set forth as to the Grantors in Section 3.3(b), no party hereto
will be (i) obligated to perform, or liable for any failure to perform, any
obligation of any other party or of any holder of Secured Obligations set forth
in or arising under this Agreement or (ii) otherwise liable for any undertaking,
obligation, act, omission or wrongful conduct of any other party hereto or of
any holder of Secured Obligations.

 

(d) The Note Collateral Agent will be entitled under this Agreement, and in
respect of the performance of its obligations and exercise of its rights
thereunder, to all of the rights, protections,

 

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immunities and indemnities set forth in the Collateral Agency Agreement, as if
such rights, protections, immunities and indemnities had been specifically set
forth therein.

 

(e) The Credit Facility Collateral Agent will be entitled under this Agreement,
and in respect of the performance of its obligations and exercise of its rights
thereunder, to all of the rights, protections, immunities and indemnities set
forth in the Credit Agreement, as if such rights, protections, immunities and
indemnities had been specifically set forth therein.

 

(f) Each Secured Debt Representative will be entitled under this Agreement, and
in respect of the performance of its obligations and exercise of its rights
thereunder, to all of the rights, protections, immunities and indemnities set
forth in the Secured Debt Documents for the Series of Secured Debt for which it
acts as Secured Debt Representative, as if such rights, protections, immunities
and indemnities had been specifically set forth therein.

 

SECTION 3.4 Successor Collateral Agents; Replacement and Substitution of Credit
Facility Collateral Agent and Note Collateral Agent

 

(a) If any Person at any time succeeds to the Liens, rights, powers and duties
of a Collateral Agent, whether by law or in accordance with the applicable
provisions of the Note Lien Security Documents, in the case of the Note
Collateral Agent, or Credit Facility Lien Documents, in the case of the Credit
Facility Collateral Agent, such Person will concurrently and automatically
succeed to the rights, powers and duties of the predecessor Collateral Agent
under this Agreement, whether or not it assumes such rights, powers or duties
and without any requirement of notice to or consent by any of the parties
hereto.

 

(b) If and when (i) the outstanding Credit Facility Lien Debt is Refinanced at
any time in whole or in part under new or additional Credit Facility Lien
Documents providing that a Person other than the existing Credit Facility
Collateral Agent will hold the Credit Facility Liens for the benefit of the
holders of Credit Facility Lien Obligations (whether the previously granted
Credit Facility Liens are assigned to such Person or are released and replaced
by Credit Facility Liens newly granted to such Person) or (ii) the Company
enters into a new Credit Agreement secured by Credit Facility Liens newly
granted to a Person other than the previous Credit Facility Collateral Agent at
any time after the previously existing Credit Agreement was retired, all
previously outstanding Credit Facility Lien Debt was repaid in full and all
previously granted Credit Facility Liens were released, the Company will have
the right and obligation to cause such Person concurrently to execute and
deliver to the parties hereto an Intercreditor Agreement Joinder, appropriately
completed by such Person as Credit Facility Collateral Agent, accompanied by the
written consent thereto of the previously acting Credit Facility Collateral
Agent; and thereupon (x) such Person will concurrently and automatically replace
and be substituted for the previously acting Credit Facility Collateral Agent
and succeed to the rights, powers and duties of the previously acting Credit
Facility Collateral Agent under this Agreement, without any requirement of
notice to or consent by any of the parties hereto and (y) the Person previously
acting as Credit Facility Collateral Agent will be forever released from all of
its obligations under this Agreement.

 

(c) Notwithstanding Section 3.4(b), if the Initial Credit Agreement is
Refinanced under the Permanent ABL Facility and the Permanent ABL Facility
includes a Lien Sharing and Priority Confirmation and provides for JPMorgan
Chase Bank, N.A. to hold Credit Facility Liens as agent for the benefit of the
holders of Credit Facility Lien Obligations, then concurrently with such
Refinancing (i) JPMorgan Chase Bank, N.A. in its capacity as such agent will
concurrently and automatically succeed to the rights, powers and duties of the
predecessor Credit Facility Collateral Agent under this Agreement, whether or
not it assumes such rights, powers or duties and without any requirement of
notice to or

 

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consent by any of the parties hereto, and (ii) JPMorgan Chase Bank, N.A. in its
capacity as agent under the Initial Credit Agreement will be forever released
from all of its obligations under this Agreement.

 

(d) If and when (i) the outstanding Note Lien Debt is Refinanced at any time in
whole or in part under new or additional Note Lien Documents providing that a
Person other than the existing Note Collateral Agent will hold the Note Liens
for the benefit of the holders of Note Lien Obligations (whether the previously
granted Note Liens are assigned to such Person or are released and replaced by
Note Liens newly granted to such Person) or (ii) the Company enters into a new
indenture, credit agreement or other instrument secured by Note Liens newly
granted to a Person other than the previous Note Collateral Agent at any time
after the previously existing indenture, credit agreement or other instrument
was retired, all previously outstanding Note Lien Debt was repaid in full and
all previously granted Note Liens were released, the Company will have the right
and obligation to cause such Person concurrently to execute and deliver to the
parties hereto an Intercreditor Agreement Joinder, appropriately completed by
such Person as Note Collateral Agent, accompanied by the written consent thereto
of the previously acting Note Collateral Agent; and thereupon (x) such Person
will concurrently and automatically replace and be substituted for the
previously acting Note Collateral Agent and succeed to the rights, powers and
duties of the previously acting Note Collateral Agent under this Agreement,
without any requirement of notice to or consent by any of the parties hereto and
(y) the Person previously acting as Note Collateral Agent will be forever
released from all of its obligations under this Agreement.

 

(e) Notwithstanding any assumption of obligations by a successor Collateral
Agent and notwithstanding any release of the obligations of a predecessor
Collateral Agent under this Agreement, the successor will not assume or be
liable for, and the predecessor will not be released from, any liability for
breach of any obligation of the predecessor that had accrued at the time of
assumption.

 

SECTION 3.5 Additional Grantors and Secured Debt Representatives.

 

(a) The Grantors will cause each Subsidiary which hereafter becomes a Grantor to
become a party to this Agreement, for all purposes of this Agreement, as an
additional Grantor, by causing it to execute and deliver to the parties hereto
an Intercreditor Agreement Joinder, appropriately completed, whereupon such
Subsidiary will be bound by the terms hereof applicable to it as Grantor to the
same extent and in the same manner as the Grantors originally party to this
Agreement.

 

(b) The Grantors will cause the Secured Debt Representative for any Series of
Secured Debt hereafter Incurred to become a party to this Agreement, for all
purposes of this Agreement, as an additional Secured Debt Representative, by
causing it to execute and deliver to the parties hereto at the time of
Incurrence an Intercreditor Agreement Joinder, appropriately completed,
whereupon such Person will be bound by the terms hereof applicable to it as
Secured Debt Representative to the same extent and in the same manner as the
Secured Debt Representatives originally party to this Agreement. The Secured
Debt Representative of each future Series of Secured Debt will be required to
deliver a Lien Sharing and Priority Confirmation to the Credit Facility
Collateral Agent, the Note Collateral Agent and each other Secured Debt
Representative at the time of incurrence of such Series of Secured Debt.

 

SECTION 3.6 Amendments, etc. with respect to the Secured Obligations. To the
fullest extent permitted by applicable law, each party hereto shall remain
obligated hereunder notwithstanding that, without any reservation of rights
against any party and without notice to or further assent by any party, any
demand for payment of any of the Secured Obligations made by any Secured Party
may be rescinded by such Secured Party and any of the Secured Obligations
continued, and the Secured Obligations, or the liability of any other Person
upon or for any part thereof, or any collateral security or guarantee therefor
or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by any Secured Party,

 

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and the Secured Debt Documents and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, from time to time in accordance with the respective terms
thereof, and any collateral security, guarantee or right of offset at any time
held by any Secured Party for the payment of the Secured Obligations may be
sold, exchanged, waived, surrendered or released. No Secured Party shall have
any obligation to protect, secure, perfect or insure any Lien at any time held
by it as security for the Secured Obligations or for the guarantee contained in
this Section 2 or any property subject thereto. Each party hereto waives any and
all notice of the creation, renewal, extension or accrual of any of the Secured
Obligations and notice of or proof of reliance by any Secured Party upon any
right arising under this Agreement. To the fullest extent permitted by
applicable law, each of the Secured Obligations shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended, amended or
waived, in reliance upon the provisions of this Agreement; and all dealings
between any of the Grantors and any of the Secured Parties likewise shall be
conclusively presumed to have been had or consummated in reliance upon such
provisions.

 

SECTION 3.7 Binding Effect; Enforcement.

 

(a) This Agreement is binding upon the parties hereto and their respective
successors and assigns.

 

(b) Except as otherwise set forth in Section 2.6(e), the obligations of the Note
Collateral Agent, Note Lien Representatives and holders of Note Lien Obligations
under this Agreement are enforceable only by the Credit Facility Collateral
Agent and by each Credit Facility Lien Representative for the benefit of the
holders of Credit Facility Lien Obligations.

 

(c) Except as otherwise set forth in Section 2.6(e), the obligations of the
Credit Facility Collateral Agent, Credit Facility Lien Representatives and
holders of Credit Facility Lien Obligations under this Agreement are enforceable
only by the Note Collateral Agent and by each Note Lien Representative for the
benefit of the holders of Note Lien Obligations.

 

(d) Each holder of Secured Obligations that is not party hereto may enforce the
provisions of Section 2.6 as an intended third party beneficiary thereof as set
forth in Section 2.6(e), but no holder of Secured Obligations, except the
Collateral Agents and Secured Debt Representatives, will otherwise have the
right independently or directly to enforce any other obligation hereunder. No
other third parties (including holders of claims against or interests in any
Grantor) are intended to have the benefit of, or will be entitled to rely on or
enforce, any obligation arising under this Agreement.

 

(e) The Company is intended to have the benefit of, and may enforce, the rights
granted it in Section 2.7, Section 3.4(b) and Section 3.4(d), but such right is
personal to the Company and may not be assigned by it to any other Person, and
any attempted assignment thereof will be void. As to all other provisions of
this Agreement, and in all other respects, neither the Company nor any other
Grantor will be entitled to the benefit of, or permitted to enforce, any
obligation arising under this Agreement. The obligations of each Grantor
hereunder are enforceable by each Collateral Agent and Secured Debt
Representative.

 

(f) Without limiting the right to assign any claim for breach of any obligation
hereunder, (i) the rights and powers of a Collateral Agent under this Agreement
are appurtenant to the Liens it holds and may be assigned only in connection
with, or to confirm, any succession or substitution as holder of such Liens,
(ii) the rights and powers of a Secured Debt Representative under this Agreement
are granted to it in its capacity as representative for the Series of Secured
Debt for which its acts as representative and may be assigned only in connection
with, or to confirm, any succession or substitution

 

39

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in such representative capacity, and (iii) all other attempted assignments of
any rights or powers of a Collateral Agent or Secured Debt Representative under
this Agreement will be void.

 

SECTION 3.8 Delay and Waiver. No failure to exercise, no course of dealing with
respect to the exercise of, and no delay in exercising, any right, power or
remedy arising under this Agreement or any of the other Secured Debt Documents
will impair any such right, power or remedy or operate as a waiver thereof. No
single or partial exercise of any such right, power or remedy will preclude any
other or future exercise thereof or the exercise of any other right, power or
remedy. The remedies herein are cumulative and are not exclusive of any remedies
provided by law.

 

SECTION 3.9 Notices. Any communications, including notices and instructions,
between the parties hereto or notices provided herein to be given may be given
to the following addresses:

 

If to the Credit Agreement Agent or Credit Facility Collateral Agent:

 

JPMorgan Chase Bank, N.A.

270 Park Ave.

New York, NY 10017

Telecopy: (212) 270-6637

Telephone: (212) 270-1410

 

Attention: Neil Boylan

 

If to the Trustee or Note Collateral Agent:

 

Wells Fargo Bank, N.A.

Corporate Trust Services

213 Court Street, Suite 703

Middletown, CT 06457

Facsimile No.: (860) 704-6219

 

Attention: Joseph P. O’Donnell

 

If to the Company or any other Grantor:

 

Del Laboratories, Inc.

178 EAB Plaza

P.O. Box 9357

Uniondale, NY 11553-9357

 

Attention: Chief Financial Officer

Facsimile No.: (631) 293-1515

Telephone No.: (516) 844-2020

 

with a copy to:

 

Debevoise & Plimpton LLP

19 Third Avenue

New York, New York 10022

 

40

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Attention: Gregory H. Woods

Facsimile No.: (212) 909-6836

Telephone No.: (212) 909-6000

 

and if to any other Secured Debt Representative, to such address as it may
specify by written notice to the parties named above.

 

All notices and communications will be mailed by first class mail, certified or
registered, return receipt requested, or by overnight air courier guaranteeing
next day delivery, to the relevant address set forth above or, as to holders of
Secured Debt, its address shown on the register kept by the office or agency
where the relevant Secured Debt may be presented for registration of transfer or
for exchange. Failure to mail a notice or communication to a holder of Secured
Debt or any defect in it will not affect its sufficiency with respect to other
holders of Secured Debt.

 

If a notice or communication is mailed in the manner provided above within the
time prescribed, it is duly given, whether or not the addressee receives it.

 

SECTION 3.10 Entire Agreement; Amended only in Writing. This Agreement sets
forth exhaustively the complete agreement of the parties relating to the
intercreditor matters addressed herein, supersedes all oral negotiations and
prior writings in respect of such undertaking, and may be amended or waived only
by an instrument in writing signed by the appropriate party.

 

SECTION 3.11 Severability. If any provision of this Agreement is invalid,
illegal or unenforceable in any respect or in any jurisdiction, the validity,
legality and enforceability of such provision in all other respects and of all
remaining provisions, and of such provision in all other jurisdictions, will not
in any way be affected or impaired thereby.

 

SECTION 3.12 Headings. Section headings herein have been inserted for
convenience of reference only, are not to be considered a part of this Agreement
and will in no way modify or restrict any of the terms or provisions hereof.

 

SECTION 3.13 Obligations Secured. All obligations of the Grantors set forth in
or arising under this Agreement will be Note Lien Obligations and are secured by
all Liens granted by the Note Lien Security Documents.

 

SECTION 3.14 Governing Law. This Agreement will be governed by, and construed in
accordance with, the laws of the State of New York.

 

SECTION 3.15 Consent to Jurisdiction. All judicial proceedings brought against
any party hereto arising out of or relating to this Agreement may be brought in
any state or federal court of competent jurisdiction in the State and County of
New York. By executing and delivering this Agreement, each party hereto, for
itself and in connection with its properties, irrevocably:

 

(1) accepts generally and unconditionally the nonexclusive jurisdiction and
venue of such courts;

 

(2) waives any defense of forum non conveniens;

 

41

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(3) agrees that service of all process in any such proceeding in any such court
may be made by registered or certified mail, return receipt requested, to such
party at its address provided in accordance with Section 3.9;

 

(4) agrees that service as provided in clause (3) above is sufficient to confer
personal jurisdiction over such party in any such proceeding in any such court
and otherwise constitutes effective and binding service in every respect; and

 

(5) agrees each party hereto retains the right to serve process in any other
manner permitted by law or to bring proceedings against any party in the courts
of any other jurisdiction.

 

SECTION 3.16 Waiver of Jury Trial. Each party to this Agreement waives its
rights to a jury trial of any claim or cause of action based upon or arising
under this Agreement or any of the other Secured Debt Documents or any dealings
between them relating to the subject matter of this Agreement or the intents and
purposes of the other Secured Debt Documents. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this Agreement and the other
Secured Debt Documents, including contract claims, tort claims, breach of duty
claims and all other common law and statutory claims. Each party to this
Agreement acknowledges that this waiver is a material inducement to enter into a
business relationship, that each party hereto has already relied on this waiver
in entering into this Agreement, and that each party hereto will continue to
rely on this waiver in its related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. This waiver is irrevocable, meaning that it may
not be modified either orally or in writing (other than by a mutual written
waiver specifically referring to this Section 3.16 and executed by each of the
parties hereto), and this waiver will apply to any subsequent amendments,
renewals, supplements or modifications of or to this Agreement. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.

 

SECTION 3.17 Counterparts. This Agreement may be executed in any number of
counterparts (including by facsimile), each of which when so executed and
delivered will be deemed an original, but all such counterparts together will
constitute but one and the same instrument.

 

SECTION 3.18 Effectiveness. This Agreement will become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
each party of written notification of such execution and written or telephonic
authorization of delivery thereof.

 

SECTION 3.19 Insolvency or Liquidation Proceeding. This Agreement will remain
enforceable in accordance with its terms after the commencement of any
Insolvency or Liquidation Proceeding by or against any Grantor.

 

42

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers or representatives as of the day and year first
above written.

 

DEL LABORATORIES, INC. By:    

Title:

    DEL PHARMACEUTICALS, INC. By:    

Title:

    DEL PROFESSIONAL PRODUCTS, INC. By:    

Title:

    ROYCE & RADER, INC. By:    

Title:

    565 BROAD HOLLOW REALTY CORP. By:    

Title:

    PARFUMS SCHIAPARELLI, INC. By:    

Title:

   

WELLS FARGO BANK, N.A.,
as Trustee under the Indenture

By:    

Name:

   

Title:

   

 

S-1

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

JPMORGAN CHASE, N.A.,
as Credit Facility Collateral Agent

By:    

Name:

   

Title:

   

WELLS FARGO BANK, N.A.,
as Note Collateral Agent

By:    

Name:

   

Title:

   

 

S-2

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

EXHIBIT A

to Intercreditor Agreement

 

[FORM OF]

INTERCREDITOR AGREEMENT JOINDER

 

The undersigned,                     , a                     , hereby agrees to
become party as [a Grantor] [a Note Lien [Representative] [Collateral Agent] [a
Credit Facility Lien [Representative] [Collateral Agent] under the Intercreditor
Agreement dated as of October 28, 2005 among Del Laboratories, Inc., a Delaware
corporation, the other Grantors from time to time party hereto, JPMorgan Chase
Bank, N.A., as Administrative Agent under the Initial Credit Agreement described
therein and as Credit Facility Collateral Agent, and Wells Fargo Bank, N.A., as
trustee under the Indenture described therein and as Note Collateral Agent (as
amended, supplemented, amended and restated or otherwise modified and in effect
from time to time, the “Intercreditor Agreement”), for all purposes thereof on
the terms applicable to [a Grantor] [a Note Lien [Representative] [Collateral
Agent] [a Credit Facility Lien [Representative] [Collateral Agent]set forth
therein, and to be bound by such terms to the same extent and in the same manner
as the [Grantors] [Note Lien [Representative] [Collateral Agent] [Credit
Facility Lien [Representative] [Collateral Agent] originally party to this
Agreement.

 

[For Secured Debt Representative: Without representing or warranting the
legality, enforceability or sufficiency thereof, the undersigned states that the
Secured Debt Documents governing the Series of Secured Debt for which it acts as
Secured Debt Representative include the following provision:

 

[quote Lien Sharing and Priority Confirmation from the governing document]]

 

The provisions of Article 3 of the Intercreditor Agreement will apply with like
effect to this Joinder.

 

IN WITNESS WHEREOF, the parties hereto have caused this Intercreditor Agreement
Joinder to be executed by their respective officers or representatives as of
                    , 20    .

 

[                                                                             ]
By:    

Name:

   

Title:

   

 

EXHIBIT A