Exhibit 10.2

 

 

 

FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT

 

among

 

CLOUD PEAK ENERGY RESOURCES LLC

 

and

 

CLOUD PEAK ENERGY FINANCE CORP.

 

as the Borrowers,

 

the other Grantors party hereto,

 

PNC BANK, NATIONAL ASSOCIATION,

 

as Senior Representative for the
First Lien Credit Agreement Secured Parties,

 

WILMINGTON TRUST, NATIONAL ASSOCIATION,

 

as Second Priority Representative for the
Second Lien Indenture Secured Parties

 

and

 

each additional Representative from time to time party hereto

 

dated as of October 17, 2016

 

 

 

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FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT

 

FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT dated as of October 17, 2016 (as
amended, supplemented or otherwise modified from time to time, this
“Agreement”), among CLOUD PEAK ENERGY RESOURCES LLC, a Delaware limited
liability company (“Cloud Peak Energy”), CLOUD PEAK ENERGY FINANCE CORP., a
Delaware corporation (“Cloud Peak Finance” and, together with Cloud Peak Energy,
the “Borrowers”), the other Grantors (as defined below) party hereto, PNC BANK,
NATIONAL ASSOCIATION, as Representative for the First Lien Credit Agreement
Secured Parties (in such capacity and together with its successors in such
capacity, the “First Lien Collateral Agent”), WILMINGTON TRUST, NATIONAL
ASSOCIATION, solely in its capacity as collateral agent under the Second Lien
Indenture, as Representative for the Second Lien Indenture Secured Parties (in
such capacity and together with its successors in such capacity, the “Second
Lien Collateral Agent”), and each additional Second Priority Representative and
Senior Representative that from time to time becomes a party hereto pursuant to
Section 8.09.

 

In consideration of the mutual agreements herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the First Lien Collateral Agent (for itself and on behalf of the
First Lien Credit Agreement Secured Parties), the Second Lien Collateral Agent
(for itself and on behalf of the Second Lien Indenture Secured Parties), each
additional Senior Representative (for itself and on behalf of the Additional
Senior Debt Parties under the applicable Additional Senior Debt Facility) and
each additional Second Priority Representative (for itself and on behalf of the
Second Priority Debt Parties under the applicable Second Priority Debt Facility)
agree as follows:

 

ARTICLE I

 

Definitions

 

SECTION 1.01.           Certain Defined Terms.  Capitalized terms used but not
otherwise defined herein have the meanings set forth in the First Lien Credit
Agreement or, if defined in the New York UCC, the meanings specified therein. As
used in this Agreement, the following terms have the meanings specified below:

 

“Additional Second Priority Debt” means any Debt that is incurred, issued or
guaranteed by any Borrower and/or any Guarantor (other than Debt constituting
Second Lien Indenture Obligations), which Debt and guarantees are secured by the
Second Priority Collateral (or any portion thereof) for which the applicable
Additional Second Priority Debt Documents provide that such Debt and guarantees
are to be secured by such Second Priority Collateral on a subordinate or junior
basis to the Senior Debt Obligations; provided, however, that (i) such Debt is
permitted to be incurred, secured and guaranteed on such basis by each then
extant Senior Debt Document and Second Priority Debt Document and (ii) unless
already a party with respect to that series of Additional Second Priority Debt,
the Representative for the holders of such Debt shall have (A) become party to
this Agreement pursuant to, and by satisfying the conditions set forth in,
Section 8.09 hereof and (B) become a party to the Second Priority Pari Passu
Intercreditor Agreement pursuant to, and by satisfying the conditions set forth
therein; provided further that, if such Debt will be the initial Additional
Second Priority Debt incurred by any

 

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Borrower, then the Guarantors, the Second Lien Collateral Agent and the
Representative for such Debt shall have executed and delivered the Second
Priority Pari Passu Intercreditor Agreement. Additional Second Priority Debt
shall include any Registered Equivalent Notes and Guarantees thereof by the
Guarantors issued in exchange therefor. The requirements of clause (i) above
shall be tested only as of (x) the date of execution of such Joinder Agreement,
if pursuant to a commitment entered into at the time of such Joinder Agreement
and (y) with respect to any later commitment or amendment to those terms to
permit such Debt, as of the date of such commitment and/or amendment.

 

“Additional Second Priority Debt Documents” means, with respect to any series,
issue or class of Additional Second Priority Debt, the loan agreements, the
promissory notes, indentures, the Second Priority Collateral Documents or other
operative agreements evidencing or governing such Debt.

 

“Additional Second Priority Debt Facility” means each indenture, loan agreement
or other governing agreement with respect to any Additional Second Priority
Debt.

 

“Additional Second Priority Debt Obligations” means, with respect to any series,
issue or class of Additional Second Priority Debt, all amounts owing pursuant to
the terms of such Additional Second Priority Debt, including, without
limitation, the obligation (including guarantee obligations) to pay principal,
interest (including Post-Petition Interest), letter of credit commissions,
reimbursement obligations, charges, expenses, fees, attorneys costs, indemnities
and other amounts payable by a Grantor under any Additional Second Priority Debt
Document.

 

“Additional Second Priority Debt Parties” means, with respect to any series,
issue or class of Additional Second Priority Debt, the holders of such Debt, the
Representative with respect thereto, any trustee or agent therefor under any
related Additional Second Priority Debt Documents and the beneficiaries of each
indemnification obligation undertaken by any Borrower or any other Grantor under
any related Additional Second Priority Debt Documents.

 

“Additional Senior Debt” means any Debt that is incurred, issued or guaranteed
by any Borrower and/or any Guarantor (other than Debt constituting First Lien
Credit Agreement Obligations) which Debt and Guarantees are secured by the
Senior Collateral (or a portion thereof) on a pari passu basis with the First
Lien Credit Agreement Obligations; provided, however, that (i) such Debt is
permitted to be incurred, secured and guaranteed on such basis by each then
extant Senior Debt Document and Second Priority Debt Document and (ii) unless
already a party with respect to that series of Additional Senior Debt, the
Representative for the holders of such Debt shall have (A) executed and
delivered this Agreement as of the date hereof or become party to this Agreement
pursuant to, and by satisfying the conditions set forth in, Section 8.09 hereof
and (B) become a party to the First Lien Intercreditor Agreement; provided
further that, if such Debt will be the initial Additional Senior Debt incurred
by a Borrower, then the Guarantors, the First Lien Collateral Agent and the
Representative for such Debt shall have executed and delivered the First Lien
Intercreditor Agreement. Additional Senior Debt shall include any Registered
Equivalent Notes and Guarantees thereof by the Guarantors issued in exchange
therefor. The requirements of clause (i) above shall be tested only as of
(x) the date of execution of such Joinder Agreement, if pursuant to a commitment
entered into at the time of

 

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such Joinder Agreement and (y) with respect to any later commitment or amendment
to those terms to permit such Debt, as of the date of such commitment and/or
amendment.

 

“Additional Senior Debt Documents” means, with respect to any series, issue or
class of Additional Senior Debt, the loan agreements, the promissory notes,
indentures, the Senior Collateral Documents or other operative agreements
evidencing or governing such Debt.

 

“Additional Senior Debt Facility” means each indenture, loan agreement or other
governing agreement with respect to any Additional Senior Debt.

 

“Additional Senior Debt Obligations” means, with respect to any series, issue or
class of Additional Senior Debt, all amounts owing pursuant to the terms of such
Additional Senior Debt, including, without limitation, the obligation (including
guarantee obligations) to pay principal, interest (including Post-Petition
Interest), letter of credit commissions, reimbursement obligations, charges,
expenses, fees, attorneys costs, indemnities and other amounts payable by a
Grantor under any Additional Senior Debt Document. For the avoidance of doubt,
Additional Senior Debt Obligations shall not include any obligations in
connection with the Receivables Purchase Agreement or any DIP Financing.

 

“Additional Senior Debt Parties” means, with respect to any series, issue or
class of Additional Senior Debt, the holders of such Debt, the Representative
with respect thereto, any trustee or agent therefor under any related Additional
Senior Debt Documents and the beneficiaries of each indemnification obligation
undertaken by any Borrower or any Guarantor under any related Additional Senior
Debt Documents.

 

“Agreement” has the meaning assigned to such term in the introductory paragraph
of this Agreement.

 

“Bank Products Agreement” means any agreement pursuant to which a bank or other
financial institution agrees to provide (a) treasury services, (b) credit card,
merchant card, purchasing card or stored value card services (including, without
limitation, the processing of payments and other administrative services with
respect thereto), (c) cash management services (including, without limitation,
controlled disbursements, automated clearinghouse transactions, return items,
netting, overdrafts, depository, lockbox, stop payment, electronic funds
transfer, information reporting, wire transfer and interstate depository network
services) and (d) other banking products or services as may be requested by
Cloud Peak Energy or any Grantor (other than letters of credit and other than
loans and advances).

 

“Bank Products Obligations” of any Person means the obligations of such Person
pursuant to any Bank Products Agreement.

 

“Bankruptcy Case” means a case under the Bankruptcy Code or any other Bankruptcy
Law.

 

“Bankruptcy Code” means Title 11 of the United States Code, as amended or any
similar federal or state law for the relief of debtors.

 

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“Bankruptcy Law” means the Bankruptcy Code and any federal, state or foreign law
for the relief of debtors.

 

“Borrowers” has the meaning assigned to such term in the introductory paragraph
of this Agreement.

 

“Class Debt” has the meaning assigned to such term in Section 8.09.

 

“Class Debt Parties” has the meaning assigned to such term in Section 8.09.

 

“Class Debt Representatives” has the meaning assigned to such term in
Section 8.09.

 

“Collateral” means the Senior Collateral and the Second Priority Collateral.

 

“Collateral Documents” means the Senior Collateral Documents and the Second
Priority Collateral Documents.

 

“Commission” means the United States Securities and Exchange Commission and any
successor agency thereto.

 

“Debt” means debt for borrowed money, including drawn and undrawn letters of
credit, obligations evidenced by bonds, debentures, notes or other similar
instruments (other than any obligations in respect of performance bonds, bid
bonds, appeal bonds, surety bonds, reclamation bonds and completion guarantees
and similar obligations), Bank Products Obligations, and Hedging Obligations.

 

“Debt Facility” means any Senior Facility and any Second Priority Debt Facility.

 

“Default Interest” means any additional interest payable pursuant to the Senior
Debt Documents arising from or related to a default, whether or not such
interest accrues before or after the commencement of any Insolvency or
Liquidation Proceeding, whether allowed or allowable.

 

“Designated Second Priority Representative” means (i) the Second Lien Collateral
Agent, until such time as the Second Lien Indenture ceases to be the only Second
Priority Debt Facility under this Agreement and (ii) thereafter, the Second Lien
Collateral Agent or such other replacement Second Priority Representative
designated by Cloud Peak Energy and/or such other replacement Second Priority
Representative in a written notice to the Designated Senior Representative as
the “Designated Second Priority Representative” for purposes hereof in
accordance with the terms of any Second Priority Pari Passu Intercreditor
Agreement.

 

“Designated Senior Representative” means (i) if at any time there is only one
Senior Representative for a Senior Facility with respect to which the Discharge
of Senior Debt Obligations has not occurred, such Senior Representative and
(ii) at any time when clause (i) does not apply, the Applicable Authorized
Representative (as defined in the First Lien Intercreditor Agreement) at such
time.

 

“DIP Financing” has the meaning assigned to such term in Section 6.01.

 

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“Discharge of Second Priority Debt Obligations” means the occurrence of all of
the following:

 

(a)                                 payment in full in cash of the principal of
and interest and premium (if any) on all Second Priority Debt Obligations; and

 

(b)                                 payment in full in cash of all other Second
Priority Debt Obligations that are outstanding and unpaid at the time the Second
Priority Debt Obligation 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 or prior to
such time).

 

“Discharge of Senior Obligations” means the occurrence of all of the following:

 

(a)                                 termination or expiration of all commitments
to extend credit that would constitute Senior Obligations;

 

(b)                                 payment in full in cash of the principal of
and interest and premium (if any) on all Senior Obligations (other than any
undrawn letters of credit);

 

(c)                                  discharge or cash collateralization at  the
percentage of the aggregate undrawn amount required for release of Liens under
the terms of the applicable Senior Debt Document of all outstanding letters of
credit constituting Senior Obligations;

 

(d)                                 payment in full in cash of obligations in
respect of Hedging Obligations constituting Senior Obligations (and, with
respect to any particular agreement regarding Hedging Obligations, termination
of such agreement and payment in full in cash of all obligations thereunder or
such other arrangements as have been made by the counterparty thereto (and
communicated to the Designated Senior Representative) pursuant to the terms of
the Senior Debt Documents); and

 

(e)                                  payment in full in cash of all other Senior
Obligations, including without limitation, Bank Product Obligations, that are
outstanding and unpaid at the time the Senior Obligations are 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 or prior to such time).

 

“Discharge of Senior Debt Obligations” means the occurrence of all of the
following:

 

(a)                                 termination or expiration of all commitments
to extend credit that would constitute Senior Debt Obligations;

 

(b)                                 payment in full in cash of the principal of
and interest and premium (if any) on all Senior Debt Obligations (other than any
undrawn letters of credit);

 

(c)                                  discharge or cash collateralization at  the
percentage of the aggregate undrawn amount required for release of Liens under
the terms of the applicable Senior Debt Document of all outstanding letters of
credit constituting Senior Debt Obligations;

 

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(d)                             payment in full in cash of all other Senior Debt
Obligations that are outstanding and unpaid at the time the Senior Debt
Obligations are 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 or prior to
such time).

 

“First Lien Cap” means $450,000,000.

 

“First Lien Collateral Agent” has the meaning assigned to such term in the
introductory paragraph of this Agreement and shall include any successor
administrative or collateral agent under the First Lien Credit Agreement.

 

“First Lien Credit Agreement” means that certain Credit Agreement, dated as of
February 21, 2014, by and among Cloud Peak Energy, as borrower, its subsidiaries
party thereto, as guarantors, PNC Bank, National Association, as administrative
agent, and a syndicate of lenders, as such agreement is amended by the First
Amendment to Credit Agreement, dated September 5, 2014 and the Second Amendment
to Credit Agreement dated September 9, 2016,  and as it otherwise has been or
may be, in whole or in part, in one or more instances, amended, restated,
renewed, extended, substituted, refinanced, restructured, replaced, supplemented
or otherwise modified from time to time (including, without limitation, any
successive amendments, restatements, renewals, extensions, substitutions of the
foregoing) and, subject to Section 8.10, shall include any Refinanced First Lien
Credit Agreement identified by Cloud Peak Energy in writing as the First Lien
Credit Agreement.

 

“First Lien Credit Agreement Loan Documents” means the First Lien Credit
Agreement and the other “Loan Documents” as defined in the First Lien Credit
Agreement.

 

“First Lien Credit Agreement Obligations” means the “Secured Obligations” as
defined in Section I of the First Lien Security Agreement including all
Post-Petition Interest relating thereto.  For the avoidance of doubt, First Lien
Credit Agreement Obligations shall not include any obligations in connection
with the Receivables Purchase Agreement or any DIP Financing.

 

“First Lien Credit Agreement Secured Parties” means the “Secured Parties” as
defined in the First Lien Credit Agreement.

 

“First Lien Intercreditor Agreement” means one or more intercreditor agreements
entered into after the date hereof with, to the extent applicable, the First
Lien Collateral Agent and the other Representatives with respect to any
Additional Senior Debt party thereto.

 

“First Lien Security Agreement” means Guarantee and Security Agreement, dated as
of February 21, 2014, by and between Cloud Peak Energy, its subsidiaries party
thereto and PNC Bank, National Association, as administrative agent, as amended
and supplemented by the Security Agreement Supplement, dated as of March 11,
2014, between Cloud Peak Energy and PNC Bank, National Association, as
administrative agent, and as it otherwise has been or may be, in whole or in
part, in one or more instances, amended, restated, renewed, extended,
substituted, refinanced, restructured, replaced, supplemented or otherwise
modified from time to time (including, without limitation, any successive
amendments, restatements, renewals, extensions, substitutions of the foregoing).

 

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“Grantors” means the Borrowers and the Guarantors. The Grantors existing on the
date hereof are listed on the signature pages hereto as Grantors.

 

“Guarantors” has the meaning assigned to the term “U.S. Guarantors” in the First
Lien Credit Agreement.

 

“Hedging Agreement” means (i) any interest rate swap agreement, interest rate
cap agreement, interest rate future agreement, interest rate option agreement,
interest rate hedge agreement or other agreement or arrangement designed to
protect against or mitigate interest rate risk, (ii) any foreign exchange
forward contract, currency swap agreement, currency option agreements or other
agreement or arrangement designed to protect against or mitigate foreign
exchange risk or (iii) any commodity or raw material futures contract, commodity
hedge agreement, any actual or synthetic forward sale contract or other similar
device or instrument or any other agreement designed to protect against or
mitigate raw material price risk.

 

“Hedging Obligations” means, with respect to any Grantor, the obligations of
such Grantor under a Hedging Agreement.

 

“Insolvency or Liquidation Proceeding” means:

 

(1)                                 any case commenced by or against any
Borrower or any other Grantor under any Bankruptcy Law, any other proceeding for
the reorganization, recapitalization or adjustment or marshalling of the assets
or liabilities of any Borrower or any other Grantor, any receivership or
assignment for the benefit of creditors relating to any Borrower or any other
Grantor or any similar case or proceeding relative to any Borrower or any other
Grantor 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 any Borrower or any
other Grantor, in each case whether or not voluntary and whether or not
involving bankruptcy or insolvency; or

 

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

 

“Joinder Agreement” means a supplement to this Agreement in substantially the
form of Annex II or Annex III hereof.

 

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement, any easement, right of way or other encumbrance on title to
real property, and any capitalized lease having substantially the same economic
effect as any of the foregoing and any superpriority claim granted pursuant to
Section 6.03).

 

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“Loans” has the meaning assigned to the term “Loans” in the First Lien Credit
Agreement.  For the avoidance of doubt, any obligations in connection with the
Receivables Purchase Agreement and/or any DIP Financing shall not constitute
Loans.

 

“New York UCC” means the Uniform Commercial Code as from time to time in effect
in the State of New York.

 

“Officer’s Certificate” has the meaning provided to such term in Section 8.08.

 

“Parent” means Cloud Peak Energy, Inc., a Delaware corporation.

 

“Permitted Refinancing Increase” means, with respect to the Refinancing of any
Debt, an amount equal to (a) any premium or other reasonable amount paid, and
fees and expenses reasonably incurred, in connection with such Refinancing,
(b) any unpaid accrued interest on the Debt being Refinanced, (c) any existing
commitments unutilized under the Debt being Refinanced and (d) any amount by
which the original principal amount of any Debt has been repaid.

 

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

 

“Pledged or Controlled Collateral” has the meaning assigned to such term in
Section 5.05(a).

 

“Post-Petition Interest” means interest, Default Interest, fees, expenses and
other charges that pursuant to the Senior Debt Documents or the Second Priority
Debt Documents, as applicable, continue to accrue after the commencement of any
Insolvency or Liquidation Proceeding, whether or not such interest, fees,
expenses and other charges are allowed or allowable under the Bankruptcy Law or
in any such Insolvency or Liquidation Proceeding.

 

“Proceeds” means “proceeds,” as that term is defined in the Uniform Commercial
Code, of Shared Collateral  as well as any payment or distribution made in
respect of Shared Collateral in a Bankruptcy Case, any distributions made to the
Second Priority Debt Parties on account of its secured claim in an Insolvency or
Liquidation Proceeding, and any amounts received by any Senior Representative or
any Senior Secured Party from a Second Priority Debt Party in respect of Shared
Collateral pursuant to this Agreement.

 

“Receivables Purchase Agreement” means the Receivables Purchase Agreement dated
as of February 11, 2013 among Cloud Peak Energy Receivables, LLC, as seller,
Cloud Peak Energy as servicer, the various Conduit Purchasers, Related Committed
Purchasers, and Purchaser Agents from time to time party thereto, and the First
Lien Collateral Agent, as administrator, and as it otherwise has been or may be,
in whole or in part, in one or more instances, amended, restated, renewed,
extended, substituted, restructured, replaced, supplemented or otherwise
modified from time to time, and all agreements related thereto.

 

“Recovery” has the meaning assigned to such term in Section 6.04.

 

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“Refinance” means, in respect of any Debt, to refinance, extend, renew, defease,
amend, increase, modify, supplement, restructure, refund, replace or repay, or
to issue other Debt or enter into alternative financing arrangements, in
exchange or replacement for such Debt (in whole or in part along with any
Permitted Refinancing Increase), including by adding or replacing lenders,
creditors, agents, borrowers and/or guarantors, and including, in each case, but
not limited to, after the original instrument giving rise to such Debt has been
terminated and including, in each case, through any credit agreement, indenture
or other agreement. “Refinanced” and “Refinancing” have correlative meanings.

 

“Registered Equivalent Notes” means, with respect to any notes originally issued
in a Rule 144A or other private placement transaction under the Securities Act
of 1933, substantially identical notes (having the same Guarantees) issued in a
dollar-for-dollar exchange therefor pursuant to an exchange offer registered
with the Commission.

 

“Representatives” means the Senior Representatives and the Second Priority
Representatives.

 

“Second Lien Indenture” means that certain Indenture dated as of the date hereof
among the Borrowers, the Guarantors and Wilmington Trust, National Association,
as trustee and collateral agent, as amended, restated, amended and restated,
extended, supplemented or otherwise modified from time to time and, subject to
Section 8.10, shall include any Refinanced Indenture identified by Cloud Peak
Energy in writing as the Second Lien Indenture.

 

“Second Lien Indenture Documents” means the Second Lien Indenture and the
“Security Documents” as defined in the Second Lien Indenture, including the
Second Lien Notes.

 

“Second Lien Indenture Obligations” means the Debt incurred and Obligations (as
defined in the Second Lien Indenture) under the Second Lien Indenture.

 

“Second Lien Indenture Secured Parties” means the holders of Second Lien
Indenture Obligations, the Second Lien Collateral Agent and the trustee under
the Second Lien Indenture.

 

“Second Lien Notes” means $290,366,000 12% senior secured second lien notes due
2021 and shall include any Registered Equivalent Notes and any Refinanced Notes
issued under any Refinanced Indenture.

 

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

 

“Second Priority Class Debt” has the meaning assigned to such term in
Section 8.09.

 

“Second Priority Class Debt Parties” has the meaning assigned to such term in
Section 8.09.

 

“Second Priority Class Debt Representative” has the meaning assigned to such
term in Section 8.09.

 

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“Second Priority Collateral” means any “Collateral” as defined in any Second
Lien Indenture Document or any other Second Priority Debt Document and any other
assets of any Borrower or any other Grantor with respect to which a Lien is
granted or purported to be granted or required to be granted pursuant to a
Second Priority Collateral Document as security for any Second Priority Debt
Obligation.

 

“Second Priority Collateral Documents” means the Second Lien Security Agreement
and the other “Security Documents” as defined in the Second Lien Indenture and
each of the collateral agreements, security agreements, mortgages, deeds of
trust and other instruments and documents executed and delivered by any Borrower
or any other Grantor for purposes of providing collateral security for any
Second Priority Debt Obligation.

 

“Second Priority Debt” means any Second Lien Indenture Obligations and any
Additional Second Priority Debt.

 

“Second Priority Debt Documents” means the Second Lien Indenture Documents and
any Additional Second Priority Debt Documents.

 

“Second Priority Debt Facilities” means the Second Lien Indenture and any
Additional Second Priority Debt Facilities.

 

“Second Priority Debt Obligations” means the Second Lien Indenture Obligations
and any Additional Second Priority Debt Obligations.

 

“Second Priority Debt Parties” means the Second Lien Indenture Secured Parties
and any Additional Second Priority Debt Parties.

 

“Second Priority Enforcement Date” means, with respect to any Second Priority
Representative, the date which is 180 days after the occurrence of both (i) an
Event of Default (under and as defined in the Second Priority Debt Document for
which such Second Priority Representative has been named as Representative) and
(ii) the Designated Senior Representative’s and each other Representative’s
receipt of written notice from such Second Priority Representative that (x) such
Second Priority Representative is the Designated Second Priority Representative
and that an Event of Default (under and as defined in the Second Priority Debt
Document for which such Second Priority Representative has been named as
Representative) has occurred and is continuing and (y) the Second Priority Debt
Obligations of the series with respect to which such Second Priority
Representative is the Second Priority Representative are currently due and
payable in full (whether as a result of acceleration thereof or otherwise) in
accordance with the terms of the applicable Second Priority Debt Document;
provided that the Second Priority Enforcement Date shall be stayed and shall not
occur and shall be deemed not to have occurred (1) at any time the Designated
Senior Representative has commenced and is diligently pursuing any enforcement
action with respect to all or any material portion of the Shared Collateral
(with prompt written notice of the commencement of such action to be given to
such Second Priority Representative) or (2) at any time the Grantor which has
granted a security interest in such Shared Collateral is then a debtor under or
with respect to (or otherwise subject to) any Insolvency or Liquidation
Proceeding.

 

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“Second Priority Lien” means the Liens on the Second Priority Collateral in
favor of Second Priority Debt Parties under Second Priority Collateral
Documents.

 

“Second Priority Pari Passu Intercreditor Agreement” has the meaning assigned to
the term “Pari Passu Intercreditor Agreement” in the Second Lien Indenture.

 

“Second Priority Representative” means (i) in the case of the Second Lien
Indenture Obligations or the Second Lien Indenture Secured Parties, the Second
Lien Collateral Agent and (ii) in the case of any Second Priority Debt Facility
incurred after the date of the Second Lien Indenture and the Second Priority
Debt Parties thereunder, the trustee, administrative agent, collateral agent,
security agent or similar agent under such Second Priority Debt Facility that is
named as the Representative in respect of such Second Priority Debt Facility in
the applicable Joinder Agreement.

 

“Secured Obligations” means the Senior Debt Obligations and the Second Priority
Debt Obligations.

 

“Secured Parties” means the Senior Secured Parties and the Second Priority Debt
Parties.

 

“Senior Class Debt” has the meaning assigned to such term in Section 8.09.

 

“Senior Class Debt Parties” has the meaning assigned to such term in
Section 8.09.

 

“Senior Class Debt Representative” has the meaning assigned to such term in
Section 8.09.

 

“Senior Collateral” means any “Collateral” as defined in any First Lien Credit
Agreement Loan Document or any other Senior Debt Document and any other assets
of any Borrower or any other Grantor with respect to which a Lien is granted or
purported to be granted or required to be granted pursuant to a Senior
Collateral Document as security for any Senior Obligations.

 

“Senior Collateral Documents” means the “Security Documents” as defined in the
First Lien Credit Agreement, the First Lien Intercreditor Agreement (upon and
after the initial execution and delivery thereof by the initial parties thereto)
and each of the collateral agreements, security agreements, mortgages, deeds of
trust and other instruments and documents executed and delivered by any Borrower
or other Grantor for purposes of providing collateral security for any Senior
Obligation.

 

“Senior Debt Documents” means the First Lien Credit Agreement Loan Documents and
any Additional Senior Debt Documents.

 

“Senior Debt Obligations” means the First Lien Credit Agreement Obligations and
the Additional Senior Debt Obligations.

 

“Senior Facilities” means the First Lien Credit Agreement and any Additional
Senior Debt Facilities.

 

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“Senior Lien” means the Liens on the Senior Collateral in favor of the Senior
Secured Parties under the Senior Collateral Documents.

 

“Senior Obligations” means the First Lien Credit Agreement Obligations and any
Additional Senior Debt Obligations, including all Post-Petition Interest
relating thereto, provided, that if, the sum of: (1) the aggregate principal
amount of Loans of the Borrowers then outstanding under the First Lien Credit
Agreement; plus (2) unreimbursed amounts in respect of letters of credit under
any Senior Facility; plus (3) the aggregate principal amount of Additional
Senior Debt Obligations of the Borrowers and the other Grantors; is in excess of
the sum of (x) the First Lien Cap plus (y) the amount of any premium on any such
Debt in connection with any Refinancing, extension, renewal, restatement,
refunding or replacement thereof, plus fees and expenses incurred in connection
therewith (the “Total First Lien Cap Amount”), then only that portion of the
principal amount of such Loans and principal amount of Additional Senior Debt
Obligations, and such unreimbursed amounts in respect of letters of credit (on a
pro rata basis based on the aggregate outstanding principal amount of such Debt
and face amount of letters of credit not reimbursed) that does not exceed the
Total First Lien Cap Amount shall be included in Senior Obligations. For the
avoidance of doubt, Bank Products Obligations, Hedging Obligations, interest,
Default Interest, Post-Petition Interest, letter of credit commissions, charges,
expenses, fees, attorneys costs, indemnities and other similar amounts payable
by a Grantor under any Senior Debt Document and any other similar charges which
may be due pursuant to the Senior Debt Documents, shall not be subject to the
Total First Lien Cap Amount.

 

“Senior Representative” means (i) in the case of any First Lien Credit Agreement
Obligations or the First Lien Credit Agreement Secured Parties, the First Lien
Collateral Agent and (ii) in the case of any Additional Senior Debt Facility and
the Additional Senior Debt Parties thereunder, the trustee, administrative
agent, collateral agent, security agent or similar agent under such Additional
Senior Debt Facility that is named as the Representative in respect of such
Additional Senior Debt Facility hereunder or in the applicable Joinder
Agreement.

 

“Senior Secured Parties” means the First Lien Credit Agreement Secured Parties
and any Additional Senior Debt Parties.

 

“Shared Collateral” means, at any time, Collateral in which the holders of
Senior Debt Obligations under at least one Senior Facility and the holders of
Second Priority Debt Obligations under at least one Second Priority Debt
Facility (or their Representatives) hold a security interest at such time (or,
in the case of the Senior Facilities, are deemed pursuant to Article II to hold
a security interest). If, at any time, any portion of the Senior Collateral
under one or more Senior Facilities does not constitute Second Priority
Collateral under one or more Second Priority Debt Facilities, then such portion
of such Senior Collateral shall constitute Shared Collateral only with respect
to the Second Priority Debt Facilities for which it constitutes Second Priority
Collateral and shall not constitute Shared Collateral for any Second Priority
Debt Facility which does not have a security interest in such Collateral at such
time.

 

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are

 

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at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of
the Parent.

 

“Total First Lien Cap Amount” has the meaning assigned to such term in the
definition of Senior Obligations.

 

“Uniform Commercial Code” or “UCC” means, unless otherwise specified, the
Uniform Commercial Code as from time to time in effect in the State of New York.

 

SECTION 1.02.           Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include,” “includes” and “including” shall
be deemed to be followed by the phrase “without limitation.” The word “will”
shall be construed to have the same meaning and effect as the word “shall.”
Unless the context requires otherwise, (i) any definition of or reference to any
agreement, instrument, other document, statute or regulation herein shall be
construed as referring to such agreement, instrument, other document, statute or
regulation as from time to time amended, supplemented or otherwise modified,
(ii) any reference herein to any Person shall be construed to include such
Person’s successors and assigns, but shall not be deemed to include the
subsidiaries of such Person unless express reference is made to such
subsidiaries, (iii) the words “herein,” “hereof” and “hereunder,” and words of
similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (iv) all references herein to
Articles, Sections and Annexes shall be construed to refer to Articles, Sections
and Annexes of this Agreement, (v) unless otherwise expressly qualified herein,
the words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights, (vi) the
term “or” is not exclusive, and (vii) the term “exercise of rights and remedies”
or terms of like import include remedial acts to which the Borrower or a Grantor
consent or assist. Any references to the Second Lien Collateral Agent and the
trustee under the Second Lien Indenture means such entity as “collateral agent”
or “trustee”, as applicable, under the Second Lien Indenture and/or the other
Second Lien Indenture Documents, and not in any other capacity, including their
respective individual capacities.

 

ARTICLE II

 

Priorities and Agreements with Respect to Shared Collateral

 

SECTION 2.01.           Subordination.

 

(a)                                 Notwithstanding the date, time, manner,
method or order of filing or recordation of any document or instrument or of
grant, attachment or perfection of any Liens granted to any Second Priority
Representative or any Second Priority Debt Parties on the Shared Collateral or
of any Liens granted to any Senior Representative or any other Senior Secured
Party on the Shared Collateral (or any actual or alleged defect in any of the
foregoing) and notwithstanding any provision of the UCC, any applicable law, any
Second Priority Debt Document or any Senior

 

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Debt Document or any other circumstance whatsoever, each Second Priority
Representative, on behalf of itself and each Second Priority Debt Party under
its Second Priority Debt Facility, hereby agrees that (i) any Lien on the Shared
Collateral securing any Senior Obligations now or hereafter held by or on behalf
of any Senior Representative or any other Senior Secured Party or other agent or
trustee therefor, regardless of how acquired, whether by grant, statute,
operation of law, subrogation or otherwise, shall have priority over and be
senior in all respects and prior to any Lien on the Shared Collateral securing
any Second Priority Debt Obligations and (ii) any Lien on the Shared Collateral
securing any Second Priority Debt Obligations now or hereafter held by or on
behalf of any Second Priority Representative, any Second Priority Debt Parties
or any Second Priority Representative or other agent or trustee therefor,
regardless of how acquired, whether by grant, statute, operation of law,
subrogation or otherwise, shall be junior and subordinate in all respects to all
Liens on the Shared Collateral securing any Senior Obligations. All Liens on the
Shared Collateral securing any Senior Obligations shall be and remain senior in
all respects and prior to all Liens on the Shared Collateral securing any Second
Priority Debt Obligations for all purposes, whether or not such Liens securing
any Senior Obligations are subordinated to any Lien securing any other
obligation of any Borrower, any Grantor or any other Person or otherwise
subordinated, voided, avoided, invalidated or lapsed.

 

SECTION 2.02.           Nature of Senior Lender Claims. Each Second Priority
Representative, on behalf of itself and each Second Priority Debt Party under
its Second Priority Debt Facility, acknowledges that, in accordance with the
provisions of the Senior Debt Documents (a) a portion of the Senior Debt
Obligations is revolving in nature and that the amount thereof that may be
outstanding at any time or from time to time may be increased or reduced and
subsequently reborrowed, (b) the terms of the Senior Debt Documents and the
Senior Debt Obligations may be amended, supplemented or otherwise modified, and
the Senior Debt Obligations, or a portion thereof, may be Refinanced from time
to time and (c) the aggregate amount of the Senior Debt Obligations may be
increased, in each case, without notice to or consent by the Second Priority
Representatives or the Second Priority Debt Parties and without affecting the
provisions hereof. The Lien priorities provided for in Section 2.01 shall not be
altered or otherwise affected by any amendment, supplement or other
modification, or any Refinancing, of either the Senior Obligations or the Second
Priority Debt Obligations, or any portion thereof. As between any Borrower and
the other Grantors and the Second Priority Debt Parties, the foregoing
provisions will not limit or otherwise affect the obligations of the Borrowers
and the Grantors contained in any Second Priority Debt Document with respect to
the incurrence of additional Senior Debt Obligations.

 

SECTION 2.03.           Prohibition on Contesting Liens. Each of the Second
Priority Representatives, for itself and on behalf of each Second Priority Debt
Party under its Second Priority Debt Facility, agrees that it shall not (and
hereby waives any right to) contest or support any other Person in contesting,
in any proceeding (including any Insolvency or Liquidation Proceeding), the
validity, extent, perfection, priority or enforceability of any Lien securing
any Senior Debt Obligations held (or purported to be held) by or on behalf of
any Senior Representative or any of the other Senior Secured Parties or other
agent or trustee therefor in any Senior Collateral, and each Senior
Representative, for itself and on behalf of each Senior Secured Party under its
Senior Facility, agrees that it shall not (and hereby waives any right to)
contest or support any other Person in contesting, in any proceeding (including
any Insolvency or Liquidation Proceeding), the validity, extent, perfection,
priority or enforceability of any Lien

 

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securing any Second Priority Debt Obligations held (or purported to be held) by
or on behalf of any Second Priority Representative or any of the Second Priority
Debt Parties in the Second Priority Collateral. Notwithstanding the foregoing,
no provision in this Agreement shall be construed to prevent or impair the
rights of any Senior Representative to enforce this Agreement (including the
priority of the Liens securing the Senior Obligations as provided in
Section 2.01) or any of the Senior Debt Documents.

 

SECTION 2.04.           No Other Liens, Rights or Remedies.

 

(a)                                 The parties hereto agree that, so long as
the Discharge of Senior Debt Obligations has not occurred, none of the Grantors
shall, or shall permit any of its subsidiaries to, grant or permit any Lien on
any asset to secure any Second Priority Debt Obligation and no Second Priority
Debt Party shall hold any Lien on any asset to secure any Second Priority Debt
Obligation, unless such Grantor has granted, or concurrently therewith grants, a
senior priority Lien on such asset to secure the Senior Debt Obligations. To the
extent that the provisions of the immediately preceding sentence are not
complied with for any reason, or should any Lien upon any Shared Collateral be
released or become unperfected due to breach of this Agreement or due to
inadvertence, neglect or error by any of the Senior Secured Parties, without
limiting any other right or remedy available to any Senior Representative or any
other Senior Secured Party, each Second Priority Representative agrees, for
itself and on behalf of the other Second Priority Debt Parties, that (i) each
Second Priority Representative and the other Second Priority Debt Parties shall
be deemed to hold and have held such Lien for the benefit of each of the Senior
Priority Representatives and the other Senior Secured Parties and (ii) any
amounts received by or distributed to any Second Priority Debt Party pursuant to
or as a result of any Lien granted in contravention of this Section 2.04, or as
a result of such a release or lack of perfection, shall be deemed to be Proceeds
and subject to Sections 4.01 and 4.02.

 

(b)                                 To the extent any of the Grantors or any of
their respective subsidiaries grants or permits a Second Priority Representative
or any other Second Priority Debt Party any right or remedy with respect to the
Shared Collateral that has not also been granted or permitted to the Senior
Representative or any other Senior Secured Party, each Second Priority
Representative agrees, for itself and on behalf of the other Second Priority
Debt Parties, that (i) such Second Priority Representative shall be required to
exercise such right or remedy at the direction of the Designated Senior
Representative and (ii) any exercise of such right or remedy by such Second
Priority Representative shall be for the benefit of the Senior Representatives
and the other Senior Secured Parties pursuant to and in accordance with the
terms of this Agreement.

 

(c)                                  The intention of the parties hereto that
they each hold liens in the Shared Collateral may not be construed as a
condition to the grant, attachment or perfection of any Lien held by any of the
Senior Secured Parties, nor shall it be construed to confer on any third party
any right, interest or priority superior to that which such party would hold in
the absence of such intention.

 

SECTION 2.05.           Perfection of Liens. Except for the limited agreements
of the Senior Representatives pursuant to Section 5.05 hereof, none of the
Senior Representatives or the Senior Secured Parties shall be responsible for
perfecting and maintaining the perfection of Liens with respect to the Shared
Collateral for the benefit of the Second Priority Representatives

 

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or the Second Priority Debt Parties. The provisions of this Agreement are
intended solely to govern the respective Lien priorities as between the Senior
Secured Parties and the Second Priority Debt Parties and shall not impose on the
Senior Representatives, the Senior Secured Parties, the Second Priority
Representatives, the Second Priority Debt Parties or any agent or trustee
therefor any obligations in respect of the disposition of Proceeds of any Shared
Collateral which would conflict with prior perfected claims therein in favor of
any other Person or any order or decree of any court or governmental authority
or any applicable law.

 

SECTION 2.06.           Certain Cash Collateral. Notwithstanding anything in
this Agreement or any other Senior Debt Documents or Second Priority Debt
Documents to the contrary, collateral consisting of cash and cash equivalents
pledged to secure First Lien Credit Agreement Obligations consisting of
reimbursement obligations in respect of Letters of Credit or otherwise held by
the First Lien Collateral Agent pursuant to Section 2.05(c), 2.05(q),
2.20(a)(ii), 2.20(b), 2.20(d), or Article VII of the First Lien Credit Agreement
(or any equivalent successor provision) shall be applied as specified in the
First Lien Credit Agreement and will not constitute Shared Collateral.

 

ARTICLE III

 

Enforcement

 

SECTION 3.01.           Exercise of Remedies.

 

(a)                                 So long as the Discharge of Senior
Obligations has not occurred, whether or not any Insolvency or Liquidation
Proceeding has been commenced by or against any Borrower or any other Grantor,
(i) neither any Second Priority Representative nor any Second Priority Debt
Party will (x) exercise or seek to exercise any rights or remedies (including
setoff) with respect to any Shared Collateral in respect of any Second Priority
Debt Obligations, or institute any action or proceeding with respect to such
rights or remedies (including any action of foreclosure), (y) contest, protest
or object to any foreclosure proceeding or action brought with respect to the
Shared Collateral or any other Senior Collateral by any Senior Representative or
any Senior Secured Party in respect of the Senior Debt Obligations, the exercise
of any right by any Senior Representative or any Senior Secured Party (or any
agent or sub-agent on their behalf) in respect of the Senior Debt Obligations
under any lockbox agreement, control agreement, landlord waiver or bailee’s
letter or similar agreement or arrangement to which any Senior Representative or
any Senior Secured Party either is a party or may have rights as a third party
beneficiary, or any other exercise by any such party of any rights and remedies
relating to the Shared Collateral under the Senior Debt Documents or otherwise
in respect of the Senior Collateral or the Senior Debt Obligations, or
(z) object to the forbearance by the Senior Secured Parties from bringing or
pursuing any foreclosure proceeding or action or any other exercise of any
rights or remedies relating to the Shared Collateral in respect of Senior Debt
Obligations and (ii) the Senior Representatives and the Senior Secured Parties
shall have the exclusive right to enforce rights, exercise remedies (including
setoff and the right to credit bid their debt) and make determinations regarding
the care or preservation of the Shared Collateral, or the release, disposition
or restrictions with respect to the Shared Collateral without any consultation
with or the consent of any Second Priority Representative or any Second Priority
Debt Party, and  to incur expenses in connection with the foregoing; provided,
however, that (A) in any Insolvency

 

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or Liquidation Proceeding commenced by or against any Borrower or any other
Grantor, any Second Priority Representative may file a claim or statement of
interest with respect to the Second Priority Debt Obligations under its Second
Priority Debt Facility, (B) any Second Priority Representative may take any
action (not adverse to the prior Liens on the Shared Collateral securing the
Senior Debt Obligations or the rights of the Senior Representatives or the
Senior Secured Parties to exercise remedies in respect thereof) in order to
create, prove, perfect, preserve or protect (but not enforce) its rights in, and
perfection and priority of its Lien on, the Shared Collateral, (C) any Second
Priority Representative and the Second Priority Secured Parties may exercise
their rights and remedies as unsecured creditors, to the extent provided in
Section 5.04, (D) the Second Priority Debt Parties may file any responsive or
defensive pleadings in opposition to any motion, claim, adversary proceeding or
other pleading made by any person objecting to or otherwise seeking the
disallowance of the claims of the Second Priority Debt Parties or the avoidance
of any Second Priority Lien to the extent not inconsistent with the terms of
this Agreement, and (E) from and after the Second Priority Enforcement Date, the
Designated Second Priority Representative may exercise or seek to exercise any
rights or remedies (including setoff) with respect to any Shared Collateral in
respect of any Second Priority Debt Obligations, or institute any action or
proceeding with respect to such rights or remedies (including any action of
foreclosure). In exercising rights and remedies with respect to the Senior
Collateral, the Senior Representatives and the Senior Secured Parties may
enforce the provisions of the Senior Debt Documents and exercise remedies
thereunder, all in such order and in such manner as they may determine in the
exercise of their sole discretion and without consultation with any Second
Priority Representative or any other Second Priority Debt Party and regardless
of whether any such exercise is adverse to the interest of any Second Priority
Debt Party. Such exercise and enforcement shall include the rights of an agent
appointed by the Senior Representative and/or the Senior Secured Parties to sell
or otherwise dispose of Shared Collateral upon foreclosure, to incur expenses in
connection with such sale or disposition and to exercise all the rights and
remedies of a secured lender under the Uniform Commercial Code of any applicable
jurisdiction and of a secured creditor under Bankruptcy Laws of any applicable
jurisdiction.

 

(b)                                 So long as the Discharge of Senior
Obligations has not occurred, except as expressly provided in the proviso in
clause (ii) of Section 3.01(a), each Second Priority Representative, on behalf
of itself and each Second Priority Debt Party under its Second Priority Debt
Facility, agrees that it will not, in the context of its role as secured
creditor, take or receive any Shared Collateral or any Proceeds of Shared
Collateral in connection with the exercise of any right or remedy (including
setoff) with respect to any Shared Collateral in respect of Second Priority Debt
Obligations. Without limiting the generality of the foregoing, unless and until
the Discharge of Senior Obligations has occurred, except as expressly provided
in the proviso in clause (ii) of Section 3.01(a), the sole right of the Second
Priority Representatives and the Second Priority Debt Parties with respect to
the Shared Collateral is to hold a Lien on the Shared Collateral in respect of
Second Priority Debt Obligations pursuant to the Second Priority Debt Documents
for the period and to the extent granted therein and to receive a share of the
Proceeds thereof, if any, after the Discharge of Senior Obligations has
occurred.

 

(c)                                  Subject to the proviso in clause (ii) of
Section 3.01(a), (i) each Second Priority Representative, for itself and on
behalf of each Second Priority Debt Party under its Second Priority Debt
Facility, agrees that neither such Second Priority Representative nor any such

 

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Second Priority Debt Party will take any action that would hinder any exercise
of remedies undertaken by any Senior Representative or any Senior Secured Party
with respect to the Shared Collateral under the Senior Debt Documents, including
any sale, lease, exchange, transfer or other disposition of the Shared
Collateral, whether by foreclosure or otherwise, and (ii) each Second Priority
Representative, for itself and on behalf of each Second Priority Debt Party
under its Second Priority Debt Facility, hereby waives any and all rights it or
any such Second Priority Debt Party may have as a junior lien creditor or
otherwise to object to the manner in which the Senior Representatives or the
Senior Secured Parties seek to enforce or collect the Senior Debt  Obligations
or the Liens granted on any of the Senior Collateral, regardless of whether any
action or failure to act by or on behalf of any Senior Representative or any
other Senior Secured Party is adverse to the interests of the Second Priority
Debt Parties.

 

(d)                                 Each Second Priority Representative hereby
acknowledges and agrees that no covenant, agreement or restriction contained in
any Second Priority Debt Document shall be deemed to restrict in any way the
rights and remedies of the Senior Representatives or the Senior Secured Parties
with respect to the Senior Collateral as set forth in this Agreement and the
Senior Debt Documents.

 

(e)                                  Subject to Section 3.01(a), the Designated
Senior Representative shall have the exclusive right to exercise any right or
remedy with respect to the Shared Collateral and shall have the exclusive right
to determine and direct the time, method and place for exercising such right or
remedy or conducting any proceeding with respect thereto. Following the
Discharge of Senior Obligations, the Designated Second Priority Representative
shall have the exclusive right to exercise any right or remedy with respect to
the Collateral, and the Designated Second Priority Representative shall have the
exclusive right to direct the time, method and place of exercising or conducting
any proceeding for the exercise of any right or remedy available to the Second
Priority Debt Parties with respect to the Collateral, or of exercising or
directing the exercise of any trust or power conferred on the Second Priority
Representatives, or for the taking of any other action authorized by the Second
Priority Collateral Documents; provided, however, that nothing in this
Section 3.01(e) shall impair the right of any Second Priority Representative or
other agent or trustee acting on behalf of the Second Priority Debt Parties to
take such actions with respect to the Collateral after the Discharge of Senior
Obligations as may be otherwise required or authorized pursuant to any
intercreditor agreement governing the Second Priority Debt Parties or the Second
Priority Debt Obligations.

 

SECTION 3.02.           Cooperation. Subject to the proviso in clause (ii) of
Section 3.01(a), each Second Priority Representative, on behalf of itself and
each Second Priority Debt Party under its Second Priority Debt Facility, agrees
that, unless and until the Discharge of Senior Obligations has occurred, it will
not commence, or join with any Person (other than the Senior Secured Parties and
the Senior Representatives upon the request of the Designated Senior
Representative) in commencing, any enforcement, collection, execution, levy or
foreclosure action or proceeding with respect to any Lien held by it in the
Shared Collateral under any of the Second Priority Debt Documents or otherwise
in respect of the Second Priority Debt Obligations.

 

SECTION 3.03.           Actions upon Breach. Should any Second Priority
Representative or any Second Priority Debt Party, contrary to this Agreement, in
any way take, attempt to take

 

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or threaten to take any action with respect to the Shared Collateral (including
any attempt to realize upon or enforce any remedy with respect to this
Agreement) or fail to take any action required by this Agreement, this Agreement
shall create a rebuttable presumption and admission by such Second Priority Debt
Party that any Senior Representative or other Senior Secured Party (in its or
their own name or in the name of any Borrower or any other Grantor) or a
Borrower may obtain (and any such Senior Representative or other Senior Secured
Party may obtain) relief against such Second Priority Representative or such
Second Priority Debt Party by injunction, specific performance or other
appropriate equitable relief. Each Second Priority Representative, on behalf of
itself and each Second Priority Debt Party under its Second Priority Facility,
hereby (i) agrees that the Senior Secured Parties’ damages from the actions of
the Second Priority Representatives or any Second Priority Debt Party may at
that time be difficult to ascertain and may be irreparable and waives any
defense that any Borrower, any other Grantor or the Senior Secured Parties
cannot demonstrate damage or be made whole by the awarding of damages and
(ii) irrevocably waives any defense based on the adequacy of a remedy at law and
any other defense that might be asserted to bar the remedy of specific
performance in any action that may be brought by any Senior Representative or
any other Senior Secured Party.

 

ARTICLE IV

 

Payments

 

SECTION 4.01.                                   Application of Proceeds.
(a) Regardless of whether an Insolvency or Liquidation Proceeding has been
commenced, Shared Collateral or Proceeds upon the exercise of remedies will be
applied:

 

(I) FIRST, TO THE PAYMENT IN FULL IN CASH OF ALL SENIOR OBLIGATIONS,

 

(II)SECOND, TO THE PAYMENT IN FULL IN CASH OF ALL SECOND PRIORITY DEBT
OBLIGATIONS,

 

(III)THIRD, TO THE PAYMENT IN FULL IN CASH OF ALL SENIOR DEBT OBLIGATIONS IN
EXCESS OF THE SENIOR OBLIGATIONS, AND

 

(IV)FOURTH, TO BORROWERS OR AS OTHERWISE REQUIRED BY APPLICABLE LAW.

 

(b)                                 Any Shared Collateral or Proceeds received
by any Representative or any Debt Party on account of its secured claim in
connection with any Insolvency or Liquidation Proceeding shall be deemed to be
the result of an exercise of remedies.

 

(c)                                  Any non-cash Shared Collateral or non-cash
proceeds may be held by the applicable Representative as Shared Collateral
unless the failure to apply such amounts would be commercially unreasonable.

 

SECTION 4.02.           Payments Over. Unless and until the Discharge of Senior
Obligations, whether or not any Insolvency or Liquidation Proceeding has been
commenced by or against any Borrower or any other Grantor, any Shared Collateral
or Proceeds upon the exercise of remedies received by any Second Priority
Representative or any Second Priority Debt Party in connection with the exercise
of any right or remedy (including setoff) relating to the

 

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Shared Collateral, in contravention of this Agreement or otherwise, shall be
segregated and held in trust for the benefit of and forthwith paid over to the
Designated Senior Representative for the benefit of the Senior Secured Parties
in the same form as received, with any necessary endorsements, or as a court of
competent jurisdiction may otherwise direct. Any Shared Collateral or Proceeds
received by any Second Priority Representative or any Second Priority Debt Party
on account of its secured claim in connection with any Insolvency or Liquidation
Proceeding shall be deemed to be the result of an exercise of remedies.  The
Designated Senior Representative is hereby authorized to make any such
endorsements as agent for each of the Second Priority Representatives or any
such Second Priority Debt Party. This authorization is coupled with an interest
and is irrevocable.

 

ARTICLE V

 

Other Agreements

 

SECTION 5.01.           Releases.

 

(a)                                 Each Second Priority Representative, for
itself and on behalf of each Second Priority Debt Party under its Second
Priority Debt Facility, agrees that: (1) if in connection with any exercise of
any Senior Representatives’ rights or remedies in respect of the Shared
Collateral, in each case prior to the Discharge of Senior Obligations, such
Senior Representative, for itself or on behalf of any of the Senior Secured
Parties, releases any of its Liens on any part of the Shared Collateral or such
Senior Representative, for itself or on behalf of any of the Senior Secured
Parties releases any Grantor from its obligations under its guaranty of the
Senior Debt Obligations, then the Liens, if any, of each Second Priority
Representative, for itself or for the benefit of the Second Priority Debt
Parties, on such Shared Collateral, and the obligations of such Grantor under
its guaranty of the Second Priority Debt Obligations, shall be automatically,
unconditionally and simultaneously released, (2) if in connection with any
exercise of any Senior Representatives’ remedies, in each case prior to the
Discharge of Senior Obligations, the equity interests of any Person are
foreclosed upon or otherwise disposed of and such Senior Representative releases
its Lien on the property or assets of such Person then the Liens of each Second
Priority Representative with respect to the property or assets of such Person
will be automatically released to the same extent as the Liens of such Senior
Representative and (3) in the event of a sale, transfer or other disposition of
any specified item of Shared Collateral (including all or substantially all of
the equity interests of any subsidiary of a Borrower) other than a release
granted upon or following the Discharge of Senior Obligations, the Liens granted
to the Second Priority Representatives and the Second Priority Debt Parties upon
such Shared Collateral to secure Second Priority Debt Obligations shall
terminate and be released and any Grantor released from its obligations under
its Guarantee of Senior Obligations released by a Senior Representative shall be
released under its Guarantee of Second Priority Debt Obligations, automatically
and without any further action, concurrently with the termination and release of
all Liens granted upon such Shared Collateral to secure Senior Obligations;
provided that, in the case of clause (3), the Liens granted to the Second
Priority Representatives and the Second Priority Debt Parties shall not be so
released if an Event of Default (as defined under any Second Priority Debt
Document) has occurred and is continuing; and provided that, in the case of each
of clauses (1), (2) and (3), the Second Priority Liens on such Shared Collateral
shall attach to (and shall remain subject and subordinate to all Senior Liens
securing Senior Obligations) any

 

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Proceeds of a sale, transfer or other disposition of Shared Collateral or equity
interests of any Person not paid to the Senior Secured Parties or that remain
after the Discharge of Senior Obligations. Promptly upon delivery to a Second
Priority Representative of a certificate from a Senior Representative or Grantor
stating that any such termination and release of Liens securing the Senior
Priority Debt Obligations will occur, each Second Priority Representative, for
itself or on behalf of any Second Priority Debt Parties represented by it, shall
execute and deliver, at the Borrower’s or the other Grantor’s sole cost and
expense and without any representation or warranty, to the Senior
Representatives or such Grantor such termination statements, releases and other
documents (including documents which are corresponding second lien versions of
termination statements, releases and other documents that the First Lien
Collateral Agent delivers under the First Lien Credit Agreement to the extent
applicable) so as to confirm the foregoing releases referred to in clauses (1),
(2), and (3) of the first sentence of this clause (a) when such releases occur.
Nothing in this Section 5.01(a) will be deemed to affect any agreement of a
Second Priority Representative, for itself and on behalf of the Second Priority
Debt Parties under its Second Priority Debt Facility, to release the Liens on
the Second Priority Collateral as set forth in the relevant Second Priority Debt
Documents.

 

(b)                                 Each Second Priority Representative, for
itself and on behalf of each Second Priority Debt Party under its Second
Priority Debt Facility and until the Discharge of Senior Obligations has
occurred (but subject to Section 5.06), hereby irrevocably constitutes and
appoints the Designated Senior Representative and any officer or agent of the
Designated Senior Representative, with full power of substitution, as its true
and lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of such Second Priority Representative or such Second Priority
Debt Party or in the Designated Senior Representative’s own name, from time to
time in the Designated Senior Representative’s discretion, for the purpose of
carrying out the terms of Section 5.01(a), to take any and all appropriate
action and to execute any and all documents and instruments that may be
necessary or desirable to accomplish the purposes of Section 5.01(a), including
any termination statements, endorsements or other instruments of transfer or
release.

 

(c)                                  Unless and until the Discharge of Senior
Obligations has occurred, each Second Priority Representative, for itself and on
behalf of each Second Priority Debt Party under its Second Priority Debt
Facility, hereby consents to the application, whether prior to or after an event
of default under any Senior Debt Document, of Proceeds to the repayment of
Senior Obligations pursuant to the Senior Debt Documents; provided that nothing
in this Section 5.01(c) shall be construed to prevent or impair the rights of
the Second Priority Representatives or the Second Priority Debt Parties to
receive Proceeds in connection with the Second Priority Debt Obligations not
otherwise in contravention of this Agreement.

 

(d)                                 Notwithstanding anything to the contrary in
any Second Priority Collateral Document, in the event the terms of a Senior
Collateral Document and a Second Priority Collateral Document each require any
Grantor (i) to make payment in respect of any item of Shared Collateral, (ii) to
deliver or afford control over any item of Shared Collateral to, or deposit any
item of Shared Collateral with, (iii) to register ownership of any item of
Shared Collateral in the name of or make an assignment of ownership of any
Shared Collateral or the rights thereunder to, (iv) cause any securities
intermediary, commodity intermediary or other Person acting in a similar
capacity to agree to comply, in respect of any item of Shared

 

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Collateral, with instructions or orders from, or to treat, in respect of any
item of Shared Collateral, as the entitlement holder, (v) hold any item of
Shared Collateral in trust for (to the extent such item of Shared Collateral
cannot be held in trust for multiple parties under applicable law), (vi) obtain
the agreement of a bailee or other third party to hold any item of Shared
Collateral for the benefit of or subject to the control of or, in respect of any
item of Shared Collateral, to follow the instructions of or (vii) obtain the
agreement of a landlord with respect to access to leased premises where any item
of Shared Collateral is located or waivers or subordination of rights with
respect to any item of Shared Collateral in favor of, in any case, both the
Designated Senior Representative and any Second Priority Representative or
Second Priority Debt Party, such Grantor may, until the applicable Discharge of
Senior Obligations has occurred, comply with such requirement under the Second
Priority Collateral Document as it relates to such Shared Collateral by taking
any of the actions set forth above only with respect to, or in favor of, the
Designated Senior Representative. Until the Discharge of Senior Obligations
occurs, to the extent that any Senior Representative or Senior Secured Parties
(A) have released any Lien on Shared Collateral or any Grantor from its
obligation under its guaranty and any such Liens or guaranty are later
reinstated or (B) obtain any new liens or additional guarantees from any
Grantor, then each Second Priority Representative, for itself and for the Second
Priority Debt Parties represented by it, shall be granted a Lien on any such
Shared Collateral, subject to the lien subordination provisions of this
Agreement, and each Second Priority Representative, for itself and for the
Second Priority Debt Parties represented by it, shall be granted an additional
guaranty, as the case may be.

 

SECTION 5.02.           Insurance and Condemnation Awards. Subject to the rights
of the Grantors under, and to the extent required by, the Senior Debt Documents,
the Senior Secured Parties have the right to be named as additional insureds and
loss payees on insurance policies,  maintained from time to time by any Grantor
and, so long as the Discharge of Senior Obligations has not occurred, the sole
right to adjust settlement for any insurance policy covering the Shared
Collateral in the event of loss, and to approve any condemnation award. Subject
to the rights of the Grantors under, and to the extent required by, the Second
Priority Debt Documents, the Second Priority Debt Parties may be added as
additional insureds and loss payees on insurance policies subject to the rights
of the Senior Secured Parties. In connection therewith and so long as the
Discharge of Senior Obligations has not occurred, the Second Priority
Debt Parties shall agree to execute such documentation to disclaim any interest
in the proceeds or as requested by the Senior  Secured Parties necessary or
desirable for the Senior Secured Parties  to enable the Senior Secured Parties
to adjust settlement for any such insurance policy or to approve any
condemnation award or otherwise to exercise their rights in such policies and
proceeds and the Senior Representative is granted a power of attorney coupled
with an interest, which power of attorney is irrevocable, to execute any such
documentation on behalf of the Second Priority Debt Parties. All proceeds of any
such policy and any such award, if in respect of the Shared Collateral, shall be
paid (i) first, prior to the occurrence of the Discharge of Senior Obligations,
to the Designated Senior Representative for the benefit of Senior Secured
Parties pursuant to the terms and on the conditions of the Senior Debt
Documents, (ii) second, after the occurrence of the Discharge of Senior
Obligations, to the Designated Second Priority Representative for the benefit of
the Second Priority Debt Parties pursuant to the terms and on the conditions of
the applicable Second Priority Debt Documents, (iii) third, after the occurrence
of the Discharge of Second Priority Debt Obligations, then to the Designated
Senior Representative for the benefit of the Senior Secured Parties pursuant to
the terms of the Senior Debt Documents, and (iv) fourth,

 

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after the occurrence of the Discharge of Senior Debt Obligations, then  to the
owner of the subject property, such other Person as may be entitled thereto or
as a court of competent jurisdiction may otherwise direct. If any Second
Priority Representative or any Second Priority Debt Party shall, at any time,
receive any proceeds of any such insurance policy or any such award in
contravention of this Agreement, it shall pay such proceeds over to the
Designated Senior Representative in accordance with the terms of Section 4.02.

 

SECTION 5.03.           Amendments to Debt Documents.

 

(a)                                 The Senior Debt Documents may be amended,
restated, supplemented or otherwise modified in accordance with their terms, and
the Debt under the Senior Debt Documents may be Refinanced, in each case,
without the consent of any Second Priority Debt Party; provided, however, that,
without the consent of the Designated Second Priority Representative, no such
amendment, restatement, supplement, modification or Refinancing (or successive
amendments, restatements, supplements, modifications or Refinancings) shall
contravene any provision of this Agreement.

 

(b)                                 Without the prior written consent of the
Senior Representatives or unless permitted under the Senior Debt Documents,
unless and until the Discharge of Senior Debt Obligations has occurred, no
Second Priority Debt Document may be amended, restated, supplemented or
otherwise modified and no Debt under the Second Priority Debt Documents may be
Refinanced, to the extent such amendment, restatement, supplement or
modification or Refinancing, or the terms of such new Second Priority Debt
Document, would (i) contravene the provisions of this Agreement, (ii) change to
earlier dates any scheduled dates for payment of principal (including the final
maturity date) under such Second Priority Debt Document or of interest on Debt
under such Second Priority Debt Document, (iii) modify (or have the effect of a
modification of) the mandatory prepayment provisions of the applicable Second
Priority Debt Document for such Second Priority Debt Facility in a manner that
would result in the weighted average life to maturity being less than the
weighted average life to maturity of the Second Priority Debt under such Second
Priority Debt Document prior to giving effect thereto or (iv) reduce the
capacity to incur debt for borrowed money constituting Senior Obligations to an
amount less than the aggregate principal amount of term loans and aggregate
principal amount of revolving commitments, in each case, under the Senior Debt
Documents on the day of any such amendment, restatement, supplement,
modification or Refinancing; provided that the holders (and their
representatives) of any such Refinancing Debt execute a Joinder Agreement or
otherwise bind themselves in writing to the terms of this Agreement.

 

(c)                                  Each Second Priority Representative, for
itself and on behalf of each Second Priority Debt Party under its Second
Priority Debt Facility, agrees that each Second Priority Collateral Document
under its Second Priority Debt Facility shall include, and the Grantors agree to
cause each Second Priority Collateral Document to include, the following
language (or language to similar effect reasonably approved by the Designated
Senior Representative):

 

“Notwithstanding anything herein to the contrary, (i) the liens and security
interests granted to the Second Priority Representative pursuant to this
Agreement are expressly subject and subordinate to the liens and security
interests granted in favor of the Senior Secured Parties (as defined in the
First Lien/Second Lien

 

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Intercreditor Agreement referred to below), including liens and security
interests granted to PNC Bank, National Association, as administrative and
collateral agent, pursuant to or in connection with the Credit Agreement dated
as of February 21, 2014, by and among Cloud Peak Energy Resources LLC, as
borrower, its subsidiaries party thereto, as guarantors, PNC Bank, National
Association, as administrative and collateral agent, and a syndicate of lenders,
as such agreement is amended by the First Amendment to Credit Agreement, dated
September 5, 2014 and Second Amendment to Credit Agreement dated September 9,
2016 and as it otherwise has been or may be, in whole or in part, in one or more
instances, amended, restated, renewed, extended, substituted, refinanced,
restructured, replaced, supplemented or otherwise modified from time to time
(including, without limitation, any successive amendments, restatements,
renewals, extensions, or substitutions of the foregoing) and (ii) the exercise
of any right or remedy by the Second Priority Representative hereunder is
subject to the limitations and provisions of the First Lien/Second Lien
Intercreditor Agreement dated as of October 17, 2016 (as amended, restated,
supplemented or otherwise modified from time to time, the “First Lien/Second
Lien Intercreditor Agreement”), among PNC Bank, National Association, as First
Lien Collateral Agent, Wilmington Trust, National Association, as Second Lien
Collateral Agent, the Borrowers, their subsidiaries and affiliated entities
party thereto. In the event of any conflict between the terms of the First
Lien/Second Lien Intercreditor Agreement and the terms of this Agreement, the
terms of the First Lien/Second Lien Intercreditor Agreement shall govern.”

 

(d)                                 In the event that each applicable Senior
Representative and/or the Senior Secured Parties enter into any amendment,
waiver or consent in respect of any of the Senior Collateral Documents for the
purpose of adding to or deleting from, or waiving or consenting to any
departures from any provisions of, any Senior Collateral Document or changing in
any manner the rights of the Senior Representatives, the Senior Secured Parties,
any Borrower or any other Grantor thereunder (including the release of any Liens
in Senior Collateral) in a manner that is applicable to all Senior Facilities,
then such amendment, waiver or consent shall apply automatically to any
comparable provision of each comparable Second Priority Collateral Document
without the consent of any Second Priority Representative or any Second Priority
Debt Party and without any action by any Second Priority Representative, any
Borrower or any other Grantor; provided, however, that (i) no such amendment,
waiver or consent shall (A) remove assets subject to the Second Priority Liens
or release any such Liens, except to the extent that such release is permitted
or required by Section 5.01(a) and provided that there is a concurrent release
of the corresponding Senior Liens or (B) amend, modify or otherwise affect the
rights or duties of any Second Priority Representative in its role as Second
Priority Representative without its prior written consent and (ii) written
notice of such amendment, waiver or consent shall have been given to each Second
Priority Representative promptly after the effectiveness of such amendment,
waiver or consent.

 

(e)                                  Upon the request of the Designated Senior
Representative or Designated Second Priority Representative, Cloud Peak Energy
agrees to deliver to each of the Designated Senior Representative and the
Designated Second Priority Representative copies of (i) any amendments,
supplements or other modifications to the Senior Debt Documents or the Second
Priority Debt

 

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Documents and (ii) any new Senior Debt Documents or Second Priority Debt
Documents promptly after effectiveness thereof.

 

SECTION 5.04.           Rights as Unsecured Creditors. The Second Priority
Representatives and the Second Priority Debt Parties may exercise rights and
remedies as unsecured creditors against any Borrower and any other Grantor in
accordance with the terms of the Second Priority Debt Documents and applicable
law so long as such rights and remedies do not violate any express provision of
this Agreement which is binding on the Second Priority Debt Parties, including,
without limitation, Sections 2.03, 2.04, 3.01, 3.02 and Article VI hereof.
Nothing in this Agreement shall prohibit the receipt by any Second Priority
Representative or any Second Priority Debt Party of the required payments of
principal, premium, interest, fees and other amounts due under the Second
Priority Debt Documents so long as such receipt (i) is not the direct or
indirect result of the exercise in contravention of this Agreement by a Second
Priority Representative or any Second Priority Debt Party of rights or remedies
as a secured creditor in respect of Shared Collateral or (ii) whether in
contravention of this Agreement or not, does not have the effect of discharging
the Lien of any Senior Representative or First Lien Collateral Agent on such
Shared Collateral. In the event any Second Priority Representative or any Second
Priority Debt Party becomes a judgment lien creditor in respect of Shared
Collateral as a result of its enforcement of its rights as an unsecured creditor
in respect of Second Priority Debt Obligations, such judgment lien shall be
subordinated to the Liens securing Senior Obligations on the same basis as the
other Liens securing the Second Priority Debt Obligations are so subordinated to
such Liens securing Senior Obligations under this Agreement. Nothing in this
Agreement shall impair or otherwise adversely affect any rights or remedies the
Senior Representatives or the Senior Secured Parties may have with respect to
the Senior Collateral.

 

SECTION 5.05.           Gratuitous Bailee for Perfection.

 

(a)                                 Each Senior Representative acknowledges and
agrees that if it shall at any time hold a Lien securing any Senior Obligations
on any Shared Collateral that can be perfected by the possession or control of
such Shared Collateral or of any account in which such Shared Collateral is
held, and if such Shared Collateral or any such account is in fact in the
possession or under the control of such Senior Representative, or of agents or
bailees of such Person (such Shared Collateral being referred to herein as the
“Pledged or Controlled Collateral”), or if it shall at any time obtain any
landlord waiver or bailee’s letter or any similar agreement or arrangement
granting it rights or access to Shared Collateral, the applicable Senior
Representative shall also hold such Pledged or Controlled Collateral, or take
such actions with respect to such landlord waiver, bailee’s letter or similar
agreement or arrangement, as sub-agent or gratuitous bailee for the relevant
Second Priority Representatives, in each case solely for the purpose of
perfecting the Liens granted under the relevant Second Priority Collateral
Documents and subject to the terms and conditions of this Section 5.05.

 

(b)                                 Except as otherwise specifically provided
herein, until the Discharge of Senior Obligations has occurred, the Senior
Representatives and the Senior Secured Parties shall be entitled to deal with
the Pledged or Controlled Collateral in accordance with the terms of the Senior
Debt Documents as if the Liens under the Second Priority Collateral Documents
did not exist. The rights of the Second Priority Representatives and the Second
Priority Debt Parties with

 

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respect to the Pledged or Controlled Collateral shall at all times be subject to
the terms of this Agreement.

 

(c)                                  The Senior Representatives and the Senior
Secured Parties shall have no obligation whatsoever to the Second Priority
Representatives or any Second Priority Debt Party to assure that any of the
Pledged or Controlled Collateral is genuine or owned by the Grantors or to
protect or preserve rights or benefits of any Person or any rights pertaining to
the Shared Collateral, except as expressly set forth in this Section 5.05. The
duties or responsibilities of the Senior Representatives under this Section 5.05
shall be limited solely to holding or controlling the Shared Collateral and the
related Liens referred to in paragraphs (a) and (b) of this Section 5.05 as
sub-agent and gratuitous bailee for the relevant Second Priority Representative
for purposes of perfecting the Lien held by such Second Priority Representative.

 

(d)                                 The Senior Representatives shall not have by
reason of the Second Priority Collateral Documents or this Agreement, or any
other document, a fiduciary relationship in respect of any Second Priority
Representative or any Second Priority Debt Party, and each Second Priority
Representative, for itself and on behalf of each Second Priority Debt Party
under its Second Priority Debt Facility, hereby waives and releases the Senior
Representatives from all claims and liabilities arising pursuant to the Senior
Representatives’ roles under this Section 5.05 as sub-agents and gratuitous
bailees with respect to the Shared Collateral.

 

(e)                                  Upon the Discharge of Senior Obligations,
each applicable Senior Representative shall, at the Grantors’ sole cost and
expense, and to the extent the Grantors do not pay such expenses, at the sole
cost and expense of the Second Priority Debt Parties, (i) (A) deliver to the
Designated Second Priority Representative, to the extent that it is legally
permitted to do so, all Shared Collateral, including all Proceeds, held or
controlled by such Senior Representative or any of its agents or bailees,
including the transfer of possession and control, as applicable, of the Pledged
or Controlled Collateral, together with any necessary endorsements and notices
to depositary banks, securities intermediaries and commodities intermediaries,
and assign its rights under any landlord waiver or bailee’s letter or any
similar agreement or arrangement granting it rights or access to Shared
Collateral, or (B) direct and deliver such Shared Collateral as a court of
competent jurisdiction may otherwise direct, (ii) notify any applicable
insurance carrier that it is no longer entitled to be a loss payee or additional
insured under the insurance policies of any Grantor issued by such insurance
carrier and (iii) notify any governmental authority involved in any condemnation
or similar proceeding involving any Grantor that the Designated Second Party
Representative is entitled to approve any awards granted in such proceeding. The
Borrowers and the other Grantors shall take such further action as is required
to effectuate the transfer contemplated hereby and shall indemnify each Senior
Representative for loss or damage suffered by such Senior Representative as a
result of such transfer, except for loss or damage suffered by any such Person
as a result of its own willful misconduct, gross negligence or bad faith. The
Senior Representatives have no obligations to follow instructions from any
Second Priority Representative or any other Second Priority Debt Party in
contravention of this Agreement.

 

(f)                                   After the Discharge of Senior Obligations,
each Designated Second Priority Representative acknowledges and agrees that if
it shall at any time hold a Lien securing any Second Priority Obligations on any
Shared Collateral or of any Pledged or Controlled Collateral, or if it shall at
any time obtain any landlord waiver or bailee’s letter or any similar agreement
or

 

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arrangement granting it rights or access to Shared Collateral, the applicable
Designated Second Priority Representative shall also hold such Pledged or
Controlled Collateral, or take such actions with respect to such landlord
waiver, bailee’s letter or similar agreement or arrangement, as sub-agent or
gratuitous bailee for the relevant Designated Senior Representatives, in each
case solely for the purpose of perfecting the Liens granted under the relevant
Senior Collateral Documents and subject to the terms and conditions of this
Section 5.05.

 

(g)                                  After the Discharge of Senior Obligations,
and except as otherwise specifically provided herein, until the Discharge of
Second Priority Obligations has occurred, the Second Priority Representatives
and the Second Priority Debt Parties Parties shall be entitled to deal with the
Pledged or Controlled Collateral in accordance with the terms of the Second
Priority Debt Documents as if the Liens under the Senior Collateral Documents
did not exist. The rights of the Senior Representatives and the Senior Debt
Parties with respect to the Pledged or Controlled Collateral shall at all times
be subject to the terms of this Agreement.

 

(h)                                 After the Discharge of Senior Obligations,
the Second Priority Representatives and the Second Priority Secured Parties
shall have no obligation whatsoever to the Senior Representatives or any Senior
Debt Party to assure that any of the Pledged or Controlled Collateral is genuine
or owned by the Grantors or to protect or preserve rights or benefits of any
Person or any rights pertaining to the Shared Collateral, except as expressly
set forth in this Section 5.05. The duties or responsibilities of the Second
Priority Representatives under this Section 5.05(h) shall be limited solely to
holding or controlling the Shared Collateral and the related Liens referred to
in paragraphs (f) and (g) of this Section 5.05 as sub-agent and gratuitous
bailee for the relevant Senior Representative for purposes of perfecting the
Lien held by such Senior Representative.

 

(i)                                     After the Discharge of Senior
Obligations, the Second Priority Representatives shall not have by reason of the
Senior Collateral Documents or this Agreement, or any other document, a
fiduciary relationship in respect of any Senior Representative or any Senior
Debt Party, and each Senior Representative, for itself and on behalf of each
Senior Debt Party under its Senior Facility, hereby waives and releases the
Second Priority Representatives from all claims and liabilities arising pursuant
to the Second Priority Representatives’ roles under this Section 5.05 as
sub-agents and gratuitous bailees with respect to the Shared Collateral.

 

(j)                                    Upon the Discharge of Second Priority
Obligations, each applicable Second Priority Representative shall, at the
Grantors’ sole cost and expense, and to the extent the Grantors do not pay such
expenses, at the sole cost and expense of the Senior Debt Parties,
(i) (A) deliver to the Designated Senior Representative, to the extent that it
is legally permitted to do so, all Shared Collateral, including all Proceeds,
held or controlled by such Second Priority Representative or any of its agents
or bailees, including the transfer of possession and control, as applicable, of
the Pledged or Controlled Collateral, together with any necessary endorsements
and notices to depositary banks, securities intermediaries and commodities
intermediaries, and assign its rights under any landlord waiver or bailee’s
letter or any similar agreement or arrangement granting it rights or access to
Shared Collateral, or (B) direct and deliver such Shared Collateral as a court
of competent jurisdiction may otherwise direct, (ii) notify any applicable
insurance carrier that it is no longer entitled to be a loss payee or additional
insured under the insurance policies of any Grantor issued by such insurance
carrier and (iii) notify any

 

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governmental authority involved in any condemnation or similar proceeding
involving any Grantor that the Designated Senior Representative is entitled to
approve any awards granted in such proceeding. The Borrowers and the other
Grantors shall take such further action as is required to effectuate the
transfer contemplated hereby and shall indemnify each Second Priority
Representative for loss or damage suffered by such Second Priority
Representative as a result of such transfer, except for loss or damage suffered
by any such Person as a result of its own willful misconduct, gross negligence
or bad faith. The Second Priority Representatives have no obligations to follow
instructions from any Senior Representative or any other Senior Debt Party in
contravention of this Agreement.

 

(k)                                 None of the Senior Representatives nor any
of the other Senior Secured Parties shall be required to marshal any present or
future collateral security for any obligations of any Borrower or any Subsidiary
to any Senior Representative or any Senior Secured Party under the Senior Debt
Documents or any assurance of payment in respect thereof, or to resort to such
collateral security or other assurances of payment in any particular order, and
all of their rights in respect of such collateral security or any assurance of
payment in respect thereof shall be cumulative and in addition to all other
rights, however existing or arising.

 

SECTION 5.06.           When Discharge of Senior Debt Obligations Deemed To Not
Have Occurred. If, at any time substantially concurrently with or after the
occurrence of the Discharge of Senior Debt Obligations, a Borrower or any
Subsidiary consummates any Refinancing of any Senior Debt Obligations, then such
Discharge of Senior Debt Obligations shall automatically be deemed not to have
occurred for all purposes of this Agreement (other than with respect to any
actions taken prior to the date of such designation as a result of the
occurrence of such first Discharge of Senior Debt Obligations) and the
applicable agreement governing such Senior Debt Obligations shall automatically
be treated as a Senior Debt Document for all purposes of this Agreement,
including for purposes of the Lien priorities and rights in respect of Shared
Collateral set forth herein and the agent, representative or trustee for the
holders of such Senior Obligations shall be the Senior Representative for all
purposes of this Agreement. Upon receipt of notice from Borrowers of such
incurrence (including the identity of the new Senior Representative), each
Second Priority Representative (including the Designated Second Priority
Representative) shall promptly (a) enter into such documents and agreements,
including amendments or supplements to this Agreement, as a Borrower or such new
Senior Representative shall reasonably request in writing in order to provide
the new Senior Representative the rights of a Senior Representative contemplated
hereby, (b) deliver to such Senior Representative, to the extent that it is
legally permitted to do so, all Shared Collateral, including all proceeds
thereof, held or controlled by such Second Priority Representative or any of its
agents or bailees, including the transfer of possession and control, as
applicable, of the Pledged or Controlled Collateral, together with any necessary
endorsements and notices to depositary banks, securities intermediaries and
commodities intermediaries, and assign its rights under any landlord waiver or
bailee’s letter or any similar agreement or arrangement granting it rights or
access to Shared Collateral, (c) notify any applicable insurance carrier that it
is no longer entitled to be a loss payee or additional insured under the
insurance policies of any Grantor issued by such insurance carrier and
(d) notify any governmental authority involved in any condemnation or similar
proceeding involving a Grantor that the new Senior Representative is entitled to
approve any awards granted in such proceeding; provided that any reasonable
costs

 

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or other expenses incurred in connection with clauses (a) to (d) above shall be
the exclusive responsibility of the Grantors.

 

SECTION 5.07.           Purchase Right. Without prejudice to the enforcement of
the Senior Secured Parties remedies, the Senior Secured Parties agree that
following (a) the acceleration of the Senior Obligations in accordance with the
terms of the First Lien Credit Agreement or (b) the commencement of an
Insolvency or Liquidation Proceeding (each, a “Purchase Event”), within
thirty (30) days of the Purchase Event, one or more of the Second Priority Debt
Parties may request, and the Senior Secured Parties hereby offer the Second
Priority Debt Parties the option, to purchase all, but not less than all, of the
aggregate amount of outstanding Senior Obligations (including unfunded
commitments under any Senior Debt Document) outstanding at the time of purchase
at par, plus any premium that would be applicable upon prepayment of the Senior
Obligations and accrued and unpaid interest, Post-Petition Interest, Default
Interest, and fees (including breakage costs and, in the case of any secured
Hedging Obligations, the amount that would be payable by the relevant Grantor
thereunder if such Grantor were to terminate the hedge agreement in respect
thereof on the date of the purchase or, if not terminated an amount determined
by the relevant Senior Secured Party to be necessary to collateralize its credit
risk arising out of such agreement and, if applicable, the cash collateral to be
furnished to the Senior Secured Parties providing letters of credit under the
Senior Debt Documents in such amounts (not to exceed 105% thereof) as such
Senior Secured Party determines is reasonably necessary to secure such Senior
Secured Party in connection with any such outstanding and undrawn letters of
credit), without warranty or representation or recourse (except for
representations and warranties required to be made by assigning lenders pursuant
to the Assignment (as such term is defined in the First Lien Credit Agreement)).
If such right is exercised, the parties shall endeavor to close promptly
thereafter but in any event within ten (10) Business Days of the request. If one
or more of the Second Priority Debt Parties exercise such purchase right, it
shall be exercised pursuant to documentation mutually acceptable to each of the
Senior Representative and the purchasing Second Priority Debt Parties. If none
of the Second Priority Debt Parties exercise such right, or if any such
transaction is not closed within ten (10) Business Days of any exercise of such
right, the Senior Secured Parties shall have no further obligations pursuant to
this Section 5.07 for such Purchase Event and may take any further actions in
their sole discretion in accordance with the Senior Debt Documents and this
Agreement. Each Senior Secured Party will retain all rights to indemnification
provided in the relevant Senior Debt Document for all claims and other amounts
relating to period prior to the purchase of the Senior Obligations pursuant to
this Section 5.07.

 

ARTICLE VI

 

Insolvency or Liquidation Proceedings.

 

SECTION 6.01.           Financing Issues. Until the Discharge of Senior
Obligations has occurred, if any Borrower or any other Grantor shall be subject
to any Insolvency or Liquidation Proceeding and any Senior Representative or any
Senior Secured Party shall desire to consent (or not object) to the sale, use or
lease of cash or other collateral or to consent (or not object) to the
Borrower’s or any other Grantor’s obtaining financing under Section 363 or
Section 364 of the Bankruptcy Code or any similar provision of any other
Bankruptcy Law (“DIP Financing”), then each Second Priority Representative, for
itself and on behalf of each Second Priority Debt Party under its Second
Priority Debt Facility, agrees that it will raise no objection to and will not

 

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otherwise contest (a) such sale, use or lease of such cash or other collateral,
unless a Senior Representative or any other Senior Secured Party shall oppose or
object to such use of cash collateral (in which case, no Second Priority
Representative nor any other Second Priority Debt Party shall seek any relief in
connection therewith that is inconsistent with the relief being sought by the
Senior Secured Parties); (b) such DIP Financing, unless (x) a Senior
Representative or any other Senior Secured Party shall oppose or object to such
DIP Financing or (y) the terms of such DIP Financing provide for the sale of a
substantial part of the Collateral or require the confirmation of a plan of
reorganization containing specific terms or provisions (other than repayment in
cash of such DIP Financing on the effective date thereof) and, except to the
extent permitted by Section 6.03, will not request adequate protection or any
other relief in connection therewith and, to the extent the Liens securing any
Senior Obligations are subordinated or pari passu with such DIP Financing, will
subordinate (and will be deemed hereunder to have subordinated) its Liens in the
Shared Collateral to (x) such DIP Financing (and all obligations relating
thereto) on the same basis as the Liens securing the Second Priority Debt
Obligations are so subordinated to Liens securing Senior Obligations under this
Agreement, (y) any adequate protection Liens provided to the Senior Secured
Parties, and (z) to any “carve-out” for professional and United States Trustee
fees agreed to by the Senior Representatives; (c) any motion for relief from the
automatic stay or from any injunction against foreclosure or enforcement in
respect of Senior Obligations made by any Senior Representative or any other
Senior Secured Party; (d) any exercise by any Senior Secured Party of the right
to credit bid Senior Obligations at any sale of Senior Collateral under
Section 363(k) of the Bankruptcy Code or any similar provision of any other
Bankruptcy Law; (e) any other request for judicial relief made in any court by
any Senior Secured Party relating to the lawful enforcement of any Lien on
Senior Collateral; or (f) any order relating to a sale or other disposition of
assets of any Grantor to which any Senior Representative has consented or not
objected that provides, to the extent such sale or other disposition is to be
free and clear of Liens, that the Liens securing the Senior Debt Obligations and
the Second Priority Debt Obligations will attach to the proceeds of the sale on
the same basis of priority as the Liens on the Shared Collateral securing the
Senior Obligations rank to the Liens on the Shared Collateral securing the
Second Priority Debt Obligations pursuant to this Agreement. Each Second
Priority Representative, for itself and on behalf of each Second Priority Debt
Party under its Second Priority Debt Facility, agrees that notice received two
Business Days prior to the entry of an order approving such usage of cash or
other collateral or approving such financing shall be adequate notice. No Second
Priority Debt Party may provide DIP Financing to any Borrower or any other
Grantor secured by Liens equal or senior in priority to the Liens securing any
Senior Obligations; provided, that if no Senior Secured Party offers to provide
DIP Financing to the extent permitted under this Section 6.01 after the
respective Borrower provides the Designated Senior Representative with an
opportunity to provide such DIP Financing (and consults with the Designated
Senior Representative for a reasonable period of time with respect to such DIP
Financing), then a Second Priority Debt Party may seek to provide such DIP
Financing secured by Liens equal or senior in priority to the Liens securing any
Senior Obligations, and Senior Secured Parties may object thereto; provided,
further, that such DIP Financing may not “roll-up” or otherwise include or
refinance any pre-petition Second Priority Debt Obligations.

 

SECTION 6.02.           Relief from the Automatic Stay. Until the Discharge of
Senior Obligations has occurred, each Second Priority Representative, for itself
and on behalf of each Second Priority Debt Party under its Second Priority Debt
Facility, agrees that none of them shall

 

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seek relief from the automatic stay or any other stay in any Insolvency or
Liquidation Proceeding or take any action in derogation thereof, in each case in
respect of any Shared Collateral, without the prior written consent of the
Designated Senior Representative.

 

SECTION 6.03.           Adequate Protection. Each Second Priority
Representative, for itself and on behalf of each Second Priority Debt Party
under its Second Priority Debt Facility, agrees that none of them shall
(a) object, contest or support any other Person objecting to or contesting
(i) any request by any Senior Representative or any Senior Secured Parties for
adequate protection, (ii) any objection by any Senior Representative or any
Senior Secured Parties to any motion, relief, action or proceeding based on any
Senior Representative’s or Senior Secured Party’s claiming a lack of adequate
protection or (iii) the payment of interest, fees, expenses or other amounts of
any Senior Representative or any other Senior Secured Party under
Section 506(b) of the Bankruptcy Code or any similar provision of any other
Bankruptcy Law or   (b) assert or support any claim for costs or expenses of
preserving or disposing of any Collateral under Section 506(c) of the Bankruptcy
Code or any similar provision of any other Bankruptcy Law. Notwithstanding
anything contained in this Section 6.01 or in Section 6.03, in any Insolvency or
Liquidation Proceeding, (A) if the Senior Secured Parties (or any subset
thereof) are granted adequate protection in the form of additional collateral or
superpriority claims in connection with any DIP Financing or use of cash
collateral under Section 363 or 364 of the Bankruptcy Code or any similar
provision of any other Bankruptcy Law, then each Second Priority Representative,
for itself and on behalf of each Second Priority Debt Party under its Second
Priority Debt Facility, may seek or request adequate protection in the form of a
replacement Lien or superpriority claim on such additional collateral, which
(1) Lien is subordinated to the Liens securing all Senior Obligations and such
DIP Financing (and all obligations relating thereto) on the same basis as the
other Liens securing the Second Priority Debt Obligations are so subordinated to
the Liens securing Senior Obligations under this Agreement and (2) superpriority
claim is subordinated to all superpriority claims of the Senior Secured Parties
on the same basis as the Liens of the Second Priority Debt Parties are so
subordinated to the Liens of the Senior Secured Parties under this Agreement,
(B) in the event any Second Priority Representatives, for themselves and on
behalf of the Second Priority Debt Parties under their Second Priority Debt
Facilities, seek or request adequate protection and such adequate protection is
granted (in each instance, to the extent such grant is otherwise permissible
under the terms and conditions of this Agreement) in the form of additional or
replacement collateral, then such Second Priority Representatives, for
themselves and on behalf of each Second Priority Debt Party under their Second
Priority Debt Facilities, agree that each Senior Representative shall also be
granted a senior Lien on such additional or replacement collateral as security
for the Senior Obligations and any such DIP Financing and that any Lien on such
additional or replacement collateral securing the Second Priority Debt
Obligations shall be subordinated to the Liens on such collateral securing the
Senior Obligations and any such DIP Financing (and all obligations relating
thereto) and any other Liens granted to the Senior Secured Parties as adequate
protection on the same basis as the other Liens securing the Second Priority
Debt Obligations are so subordinated to such Liens securing Senior Obligations
under this Agreement (and, to the extent the Senior Secured Parties are not
granted such adequate protection in such form, any amounts recovered by or
distributed to any Second Priority Debt Party pursuant to or as a result of any
Lien on such additional or replacement collateral so granted to the Second
Priority Debt Parties shall be subject to Section 2.04, Section 4.01 and
Section 4.02 as if such amounts were Proceeds), and (C) in the event any Second
Priority

 

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Representatives, for themselves and on behalf of the Second Priority Debt
Parties under their Second Priority Debt Facilities, seek or request adequate
protection and such adequate protection is granted (in each instance, to the
extent such grant is otherwise permissible under the terms and conditions of
this Agreement) in the form of a superpriority claim, then such Second Priority
Representatives, for themselves and on behalf of each Second Priority Debt Party
under their Second Priority Debt Facilities, agree that each Senior
Representative may also seek adequate protection in the form of a superpriority
claim and that no Second Priority Debt Party shall contest the granting of such
adequate protection in such form, which superpriority claim shall be senior to
the superpriority claim of the Second Priority Debt Parties (and, to the extent
the Senior Secured Parties are not granted such adequate protection in such
form, any amounts recovered by or distributed to any Second Priority Debt Party
pursuant to or as a result of any such superpriority claim so granted to the
Second Priority Debt Parties shall be subject to Section 2.04, Section 4.01 and
Section 4.02 the same as if the amounts so recovered or distributed were
Proceeds).

 

SECTION 6.04.           Avoidance Issues. If any Senior Secured Party is
required in any Insolvency or Liquidation Proceeding or otherwise to disgorge,
turn over or otherwise pay any amount to the estate of the respective Borrower
or any other Grantor (or any trustee, receiver or similar Person therefor),
because the payment of such amount was declared to be fraudulent or preferential
in any respect or for any other reason, any amount (a “Recovery”), whether
received as proceeds of security, enforcement of any right of setoff or
otherwise, then the Senior Obligations shall be reinstated to the extent of such
Recovery and deemed to be outstanding as if such payment had not occurred and
the Senior Secured Parties shall be entitled to the benefits of this Agreement
with respect to all such recovered amounts. If this Agreement shall have been
terminated prior to such Recovery, this Agreement shall be reinstated in full
force and effect, and such prior termination shall not diminish, release,
discharge, impair or otherwise affect the obligations of the parties hereto.
Each Second Priority Representative, for itself and on behalf of each Second
Priority Debt Party under its Second Priority Debt Facility, hereby agrees that
none of them shall be entitled to benefit from any avoidance action affecting or
otherwise relating to any distribution or allocation made in accordance with
this Agreement, whether by preference or otherwise, it being understood and
agreed that the benefit of such avoidance action otherwise allocable to them
shall instead be treated as Proceeds and allocated and turned over for
application in accordance with the priorities set forth in this Agreement.

 

SECTION 6.05.           Separate Grants of Security and Separate
Classifications. Each Second Priority Representative, for itself and on behalf
of each Second Priority Debt Party under its Second Priority Debt Facility,
acknowledges and agrees that (a) the grants of Liens by the Borrowers and the
other Grantors pursuant to the Senior Collateral Documents and the Second
Priority Collateral Documents constitute separate and distinct grants of Liens
and (b) because of, among other things, their differing rights in the Shared
Collateral, the Second Priority Debt Obligations are fundamentally different
from the Senior Obligations and must be separately classified in any plan of
reorganization proposed or adopted in an Insolvency or Liquidation Proceeding.
If it is held that any claims of the Senior Secured Parties and the Second
Priority Debt Parties in respect of the Shared Collateral constitute a single
class of claims (rather than separate classes of senior and junior secured
claims), then each Second Priority Representative, for itself and on behalf of
each Second Priority Debt Party under its Second Priority Debt Facility, hereby
acknowledges and agrees that all distributions shall be made as if there were

 

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separate classes of senior and junior secured claims against the Grantors in
respect of the Shared Collateral, with the effect being that, to the extent that
the aggregate value of the Shared Collateral is sufficient (for this purpose
ignoring all claims held by the Second Priority Debt Parties), the Senior
Secured Parties shall be entitled to receive, in addition to amounts distributed
to them in respect of principal, pre-petition interest and other claims, all
amounts owing (or that would be owing if there were such separate classes of
senior and junior secured claims) in respect of Post-Petition Interest, and any
Default Interest) before any distribution is made in respect of the Second
Priority Debt Obligations, and each Second Priority Representative, for itself
and on behalf of each Second Priority Debt Party under its Second Priority Debt
Facility, hereby acknowledges and agrees to turn over to the Designated Senior
Representative amounts otherwise received or receivable by them to the extent
necessary to effectuate the intent of this sentence, even if such turnover has
the effect of reducing the claim or recovery of the Second Priority Debt
Parties.

 

SECTION 6.06.           No Waivers of Rights of Senior Secured Parties. Nothing
contained herein shall, except as expressly provided herein, prohibit or in any
way limit any Senior Representative or any other Senior Secured Party from
objecting in any Insolvency or Liquidation Proceeding or otherwise to any action
taken by any Second Priority Debt Party, including the seeking by any Second
Priority Debt Party of adequate protection or the assertion by any Second
Priority Debt Party of any of its rights and remedies under the Second Priority
Debt Documents or otherwise.

 

SECTION 6.07.           Application. This Agreement, which the parties hereto
expressly acknowledge is a “subordination agreement” under Section 510(a) of the
Bankruptcy Code or any similar provision of any other Bankruptcy Law, shall be
effective before, during and after the commencement of any Insolvency or
Liquidation Proceeding. The relative rights as to the Shared Collateral and
Proceeds shall continue after the commencement of any Insolvency or Liquidation
Proceeding on the same basis as prior to the date of the petition therefor,
subject to any court order approving the financing of, or use of cash collateral
by, any Grantor. All references herein to any Grantor shall include such Grantor
as a debtor-in-possession and any receiver or trustee for such Grantor.

 

SECTION 6.08.           Other Matters. To the extent that any Second Priority
Representative or any Second Priority Debt Party has or acquires rights under
Section 363 or Section 364 of the Bankruptcy Code or any similar provision of
any other Bankruptcy Law with respect to any of the Shared Collateral, such
Second Priority Representative, on behalf of itself and each Second Priority
Debt Party under its Second Priority Debt Facility, or such Second Priority Debt
Party agrees not to assert any such rights without the prior written consent of
each Senior Representative, provided that if requested by any Senior
Representative, such Second Priority Representative shall timely exercise such
rights in the manner requested by the Senior Representatives (acting
unanimously), including any rights to payments in respect of such rights.

 

SECTION 6.09.           506(c) Claims. Until the Discharge of Senior Obligations
has occurred, each Second Priority Representative, on behalf of itself and each
Second Priority Debt Party under its Second Priority Debt Facility, agrees that
it will not assert or enforce any claim under Section 506(c) of the Bankruptcy
Code or any similar provision of any other Bankruptcy

 

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Law senior to or on a parity with the Liens securing the Senior Obligations for
costs or expenses of preserving or disposing of any Shared Collateral.

 

SECTION 6.10.           Reorganization.

 

(a)                                 If, in any Insolvency or Liquidation
Proceeding, debt obligations of the reorganized debtor secured by Liens upon any
property of the reorganized debtor are distributed, pursuant to a plan of
reorganization or similar dispositive restructuring plan, on account of both the
Senior Obligations and the Second Priority Debt Obligations, then, to the extent
the debt obligations distributed on account of the Senior Obligations and on
account of the Second Priority Debt Obligations are secured by Liens upon the
same assets or property, the provisions of this Agreement will survive the
distribution of such debt obligations pursuant to such plan and will apply with
like effect to the Liens securing such debt obligations.

 

(b)                                 No Second Priority Debt Party (whether in
the capacity of a secured creditor or an unsecured creditor) shall propose, vote
in favor of, or otherwise directly or indirectly support any plan of
reorganization that is inconsistent with the priorities or other provisions of
this Agreement or otherwise impairs the repayment of the Senior Obligations
(with impairment to be determined under Section 1124 of the Bankruptcy Code),
other than (A) with the prior written consent of the Designated Senior
Representative, or (B) to the extent any such plan is proposed or supported by
the number of Senior Secured Debt Parties required under Section 1126(d) of the
Bankruptcy Code.

 

SECTION 6.11.           Section 1111(b) of the Bankruptcy Code. Each Second
Priority Representative, for itself and on behalf of each Second Priority Debt
Party under its Second Priority Debt Facility, shall not object to, oppose,
support any objection, or take any other action to impede, the right of any
Senior Secured Party to make an election under Section 1111(b)(2) of the
Bankruptcy Code. Each Second Priority Representative, for itself and on behalf
of each Second Priority Debt Party under its Second Priority Debt Facility,
waives any claim it may hereafter have against any senior claimholder arising
out of the election by any Senior Secured Party of the application of
Section 1111(b)(2) of the Bankruptcy Code.

 

SECTION 6.12.           Involuntary Bankruptcy Filing. Without the consent of
the Senior Representative in its sole discretion, the Second Priority
Representative, for itself and on behalf of each other Second Priority Debt
Party, agrees it will not file an involuntary bankruptcy claim or seek the
appointment of an examiner or a trustee for any Borrower or any other Grantor.

 

SECTION 6.13.           Post-Petition Interest.

 

(a)                                 None of any Second Priority Representative
or any other Second Priority Debt Party shall oppose or seek to challenge any
claim by any Senior Representative, or any other Senior Secured Party for
allowance in any Insolvency or Liquidation Proceeding of Senior Obligations
consisting of Post-Petition Interest  of the Senior Representatives on behalf of
the Senior Secured Parties on the Shared Collateral or any other Senior Secured
Party’s Lien, without regard to the existence of the Liens of the Second
Priority Representatives on behalf of the Second Priority Debt Parties on the
Shared Collateral.

 

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(b)                                 None of any Senior Representative or any
other Senior Secured Party shall oppose or seek to challenge any claim by any
Second Priority Representative or any other Second Priority Debt Party for
allowance in any Insolvency or Liquidation Proceeding of Second Priority Debt
Obligations consisting of Post-Petition Interest of the Second Priority
Representatives on behalf of the Second Priority Debt Parties on the Shared
Collateral.

 

ARTICLE VII

 

Reliance; Etc.

 

SECTION 7.01.           Reliance. All loans and other extensions of credit made
or deemed made on and after the date hereof by the Senior Secured Parties to the
Borrowers or any Subsidiary shall be deemed to have been given and made in
reliance upon this Agreement. Each Second Priority Representative, on behalf of
itself and each Second Priority Debt Party under its Second Priority Debt
Facility, acknowledges that it and such Second Priority Debt Parties have,
independently and without reliance on any Senior Representative or other Senior
Secured Party, entered into the Second Priority Debt Documents to which they are
party or by which they are bound, this Agreement and the transactions
contemplated hereby and thereby, and in taking or not taking any action under
the Second Priority Debt Documents or this Agreement they will continue to do so
independently and without reliance on any Senior Representative or other Senior
Secured Party.

 

SECTION 7.02.           No Warranties or Liability. Each Second Priority
Representative, on behalf of itself and each Second Priority Debt Party under
its Second Priority Debt Facility, acknowledges that neither any Senior
Representative nor any other Senior Secured Party has made any express or
implied representation or warranty, including with respect to the execution,
validity, legality, completeness, collectability or enforceability of any of the
Senior Debt Documents, the ownership of any Shared Collateral or the perfection
or priority of any Liens thereon. The Senior Secured Parties will be entitled to
manage and supervise their respective loans and extensions of credit under the
Senior Debt Documents in accordance with law and as they may otherwise, in their
sole discretion, deem appropriate, and the Senior Secured Parties may manage
their loans and extensions of credit without regard to any rights or interests
that the Second Priority Representatives and the Second Priority Debt Parties
have in the Shared Collateral or otherwise, except as otherwise provided in this
Agreement. Neither any Senior Representative nor any other Senior Secured Party
shall have any duty to any Second Priority Representative or Second Priority
Debt Party to act or refrain from acting in a manner that allows, or results in,
the occurrence or continuance of an event of default or default under any
agreement with any Borrower or any Subsidiary (including the Second Priority
Debt Documents), regardless of any knowledge thereof that they may have or be
charged with. Except as expressly set forth in this Agreement, the Senior
Representatives, the Senior Secured Parties, the Second Priority Representatives
and the Second Priority Debt Parties have not otherwise made to each other, nor
do they hereby make to each other, any warranties, express or implied, nor do
they assume any liability to each other with respect to (a) the enforceability,
validity, value or collectability of any of the Senior Obligations, the Second
Priority Debt Obligations or any guarantee or security which may have been
granted to any of them in connection therewith, (b) any Grantor’s title to or
right to transfer any of the Shared Collateral or (c) any other matter except as
expressly set forth in this Agreement.

 

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SECTION 7.03.           Obligations Unconditional. All rights, interests,
agreements and obligations of the Senior Representatives, the Senior Secured
Parties, the Second Priority Representatives and the Second Priority Debt
Parties hereunder shall remain in full force and effect irrespective of:

 

(a)                                 any lack of validity or enforceability of
any Senior Debt Document or any Second Priority Debt Document;

 

(b)                                 any change in the time, manner or place of
payment of, or in any other terms of, all or any of the Senior Obligations or
Second Priority Debt Obligations, or any amendment or waiver or other
modification, including any increase in the amount thereof, whether by course of
conduct or otherwise, of the terms of the First Lien Credit Agreement or any
other Senior Debt Document or of the terms of the Second Lien Indenture or any
other Second Priority Debt Document;

 

(c)                                  any exchange of any security interest in
any Shared Collateral or any other collateral or any amendment, waiver or other
modification, whether in writing or by course of conduct or otherwise, of all or
any of the Senior Obligations or Second Priority Debt Obligations or any
guarantee thereof;

 

(d)                                 the commencement of any Insolvency or
Liquidation Proceeding in respect of any Borrower or any other Grantor; or

 

(e)                                  any other circumstances that otherwise
might constitute a defense available to (i) any Borrower or any other Grantor in
respect of the Senior Obligations (other than the Discharge of Senior Debt
Obligations subject to Sections 5.06 and 6.04) or (ii) any Second Priority
Representative or Second Priority Debt Party in respect of this Agreement.

 

SECTION 7.04.           No Waiver of Lien Priorities.

 

(a)                                 No right of the Senior Secured Parties, the
Senior Representatives or any of them to enforce any provision of this Agreement
or any Senior Debt Document shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of any Borrower or any other
Grantor or by any act or failure to act by any Senior Secured Party or Senior
Representative, or by any noncompliance by any Person with the terms, provisions
and covenants of this Agreement, any of the Senior Debt Documents or any of the
Second Priority Debt Documents, regardless of any knowledge thereof which any
other Senior Representative, or any Senior Secured Party, or any of them, may
have or be otherwise charged with.

 

(b)                                 Without in any way limiting the generality
of the foregoing paragraph (but subject to the rights of the Borrowers and the
other Grantors under the Senior Debt Documents and subject to the provisions of
Section 5.03(a)), the Senior Secured Parties, the Senior Representatives, and
any of them may, at any time and from time to time in accordance with the Senior
Debt Documents and/or applicable law, without the consent of, or notice to, any
Second Priority Representative or any other Second Priority Debt Party, without
incurring any liabilities to any Second Priority Representative or any other
Second Priority Debt Party and without impairing or releasing the Lien
priorities and other benefits provided in this Agreement (even if any right of
subrogation or other right or remedy of any Second Priority Representative, or
any

 

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other Second Priority Debt Party is affected, impaired or extinguished thereby)
do any one or more of the following:

 

(1)                                 change the manner, place or terms of payment
or change or extend the time of payment of, or amend, renew, exchange, increase
or alter, the terms of any of the Senior Obligations or any Lien on any Shared
Collateral or guaranty of any of the Senior Obligations or any liability of any
Borrower or any other Grantor, or any liability incurred directly or indirectly
in respect thereof (including any increase in or extension of the Senior
Obligations, without any restriction as to the tenor or terms of any such
increase or extension) or otherwise amend, renew, exchange, extend, modify or
supplement in any manner any Liens held by any Senior Representative, or any of
the other Senior Secured Parties, the Senior Obligations or any of the Senior
Debt Documents;

 

(2)                                 sell, exchange, release, surrender, realize
upon, enforce or otherwise deal with in any manner and in any order any part of
the Shared Collateral or any liability of any Borrower or any other Grantor to
any of the Senior Secured Parties or the Senior Representatives, or any
liability incurred directly or indirectly in respect thereof;

 

(3)                                 settle or compromise any Senior Obligation
or any other liability of any Borrower or any other Grantor or any security
therefor or any liability incurred directly or indirectly in respect thereof and
apply any sums by whomsoever paid and however realized to any liability
(including the Senior Obligations) in any manner or order; and

 

(4)                                 exercise or delay in or refrain from
exercising any right or remedy against any Borrower or any other Grantor or any
other Person or any security, and elect any remedy and otherwise deal freely
with the Borrowers, any other Grantor or any Shared Collateral and any security
and any guarantor or any liability of any Borrower or any other Grantor to the
Senior Secured Parties or any liability incurred directly or indirectly in
respect thereof.

 

(c)                                  Except as otherwise expressly provided
herein, each Second Priority Representative, on behalf of itself and the Second
Priority Debt Parties represented by it, also agrees that the Senior Secured
Parties and the Senior Representatives shall have no liability to such Second
Priority Representative, or any such Second Priority Debt Parties, and such
Second Priority Representative, on behalf of itself and the Second Priority Debt
Parties represented by it, hereby waives any claim against any Senior Secured
Party or any Senior Representative arising out of any and all actions which the
Senior Secured Parties or any Senior Representative may take or permit or omit
to take with respect to:

 

(1)                                 the Senior Debt Documents (other than this
Agreement);

 

(2)                                 the collection of the Senior Obligations; or

 

(3)                                 the foreclosure upon, or sale, liquidation
or other disposition of, any Shared Collateral.

 

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Each Second Priority Representative, on behalf of itself and the Second Priority
Debt Parties represented by it, agrees that the Senior Secured Parties and the
Senior Representatives have no duty to them in respect of the maintenance or
preservation of the Shared Collateral, the Senior Obligations or otherwise.

 

Until the Discharge of Senior Obligations, each Second Priority Representative
on behalf of itself and the Second Priority Debt Parties represented by it,
agrees not to assert and hereby waives, to the fullest extent permitted by law,
any right to demand, request, plead or otherwise assert or otherwise claim the
benefit of, any marshaling, appraisal, valuation or other similar right that may
otherwise be available under applicable law with respect to any Shared
Collateral or any other similar rights a junior secured creditor may have under
applicable law.

 

ARTICLE VIII

 

Miscellaneous

 

SECTION 8.01.           Conflicts.

 

(a)                                 In the event of any conflict between the
provisions of this Agreement and the provisions of any Senior Debt Document or
any Second Priority Debt Document, the provisions of this Agreement shall
govern. Notwithstanding the foregoing, (i) the relative rights and obligations
of the Senior Secured Collateral Agent, the Senior Representatives and the
Senior Secured Parties (as amongst themselves) with respect to any Senior
Collateral shall be governed by the terms of the First Lien Intercreditor
Agreement and in the event of any conflict between the First Lien Intercreditor
Agreement and this Agreement as to such relative rights and obligations, the
provisions of the First Lien Intercreditor Agreement shall control and (ii) the
relative rights and obligations of the Second Lien Collateral Agent, trustee
under the Second Lien Indenture and the holders of Second Lien Indenture
Obligations to each other shall be governed by the terms of the Second Lien
Indenture.

 

(b)                                 The parties hereto acknowledge that the
secured creditor relationship between different classes of Second Priority Debt
Obligations may be governed separately from this Agreement, including by a
Second Priority Pari Passu Intercreditor Agreement. Notwithstanding the
foregoing, the parties hereto acknowledge and agree that this Agreement shall
govern the secured creditor relationship between the Senior Debt Obligations, on
the one hand, and the Second Priority Debt Obligations, on the other hand, and
that in the event of any conflict between the terms of this Agreement and that
of an intercreditor agreement governing the rights among different classes of
Second Priority Debt (including any Second Priority Pari Passu Intercreditor
Agreement), this Agreement shall control.

 

SECTION 8.02.           Continuing Nature of this Agreement; Severability. This
is a continuing agreement of Lien subordination, and the Senior Secured Parties
may continue, at any time and without notice to the Second Priority
Representatives or any Second Priority Debt Party, to extend credit and other
financial accommodations and lend monies to or for the benefit of the Borrowers
or any Subsidiary constituting Senior Debt Obligations in reliance hereon. The
terms of this Agreement shall survive and continue in full force and effect in
any Insolvency or Liquidation Proceeding. Any provision of this Agreement that
is prohibited or unenforceable in

 

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any jurisdiction shall not invalidate the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions. All references to any Borrower or any other Grantor shall include
such Borrower or such Grantor as debtor and debtor in possession and any
receiver, trustee or similar person for any Borrower or any other Grantor (as
the case may be) in any Insolvency or Liquidation Proceeding. This Agreement
shall terminate and be of no further force and effect:

 

(a)                                 subject to the terms and conditions of
Section 5.06 hereof, with respect to any Senior Representative, the Senior
Secured Parties represented by it and their Senior Obligations, upon the
Discharge of Senior Debt Obligations, subject to the rights of the Senior
Secured Parties under Section 6.04; and

 

(b)                                 with respect to any Second Priority
Representative, the Second Priority Debt Parties represented by it and their
Second Priority Debt Obligations, on the date on which no Second Priority Debt
Obligations of such Second Priority Debt Parties are secured by, or required to
be secured by, any of the Shared Collateral pursuant to the terms of the
applicable Second Priority Debt Documents.

 

SECTION 8.03.           Amendments; Waivers.

 

(a)                                 No failure or delay on the part of any party
hereto in exercising any right or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the parties hereto are cumulative and
are not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or consent to any departure by any
party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice or demand on any party hereto in any case shall entitle such
party to any other or further notice or demand in similar or other
circumstances.

 

(b)                                 This Agreement may be amended in writing
signed by each Representative (in each case, acting in accordance with the
documents governing the applicable Debt Facility); provided that any such
amendment, supplement or waiver which by the terms of this Agreement requires
the Borrower’s consent or which increases the obligations or reduces the rights
of, or otherwise materially adversely affects, any Borrower or any Grantor
(which for avoidance of doubt includes Sections 5.01, 5.03,  6.01, 8.03(b),
(c) and (d), 8.09, 8.10, and the last sentence of 8.19 hereof), shall require
the consent of the Borrowers. Any such amendment, supplement or waiver shall be
in writing and shall be binding upon the Senior Secured Parties and the Second
Priority Debt Parties and their respective successors and assigns.

 

(c)                                  Notwithstanding the foregoing, without the
consent of any Secured Party (and with respect to any amendment or modification
which by the terms of this Agreement requires a

 

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Borrower’s consent or which increases the obligations or reduces the rights of
any Borrower or any other Grantor, with the consent of the respective Borrower),
any Representative may become a party hereto by execution and delivery of a
Joinder Agreement in accordance with Section 8.09 of this Agreement and upon
such execution and delivery, such Representative and the Secured Parties and
Senior Obligations or Second Priority Debt Obligations of the Debt Facility for
which such Representative is acting shall be subject to the terms hereof.

 

(d)                                 Notwithstanding anything in this Agreement
to the contrary, it is understood and agreed that each Senior Representative and
Second Priority Representative then party to this Agreement, without the consent
of any other Senior Secured Party or any other Second Priority Debt Party, may
enter into a supplemental agreement (which may take the form of an amendment and
restatement of this Agreement) (i) to facilitate having Additional Senior Debt
or Additional Second Priority Debt or other obligations of any of the Grantors
become Senior Debt Obligations or Second Priority Debt Obligations, as the case
may be, under this Agreement, including, without limitation, an amendment to the
definition of “Senior Obligations” to increase the amount of obligations
included thereunder, (ii) to give effect to any amendments in connection with a
Refinancing of Senior Obligations or Second Priority Obligations, as applicable
or (iii) to effectuate the subordination of Liens granted pursuant to
Section 6.02(iii) of the First Lien Credit Agreement or the corresponding
provisions of the Second Lien Indenture (or in each case any Refinancing
thereof) to the Liens on the Shared Collateral securing the Senior Obligations;
provided, that any such supplemental agreement is not prohibited by the Senior
Debt Documents and/or the Second Priority Debt Documents then extant in
accordance with the terms thereof and an Officer’s Certificate delivered to the
applicable Representatives certifying such compliance shall be conclusive and
such Representatives may rely thereon without further inquiry and shall be fully
protected in doing so; and provided, further, that the applicable Senior
Representative and Second Priority Representative shall execute and deliver such
supplemental agreement at the other’s request and such supplemental agreement
may contain additional intercreditor terms applicable solely to the holders of
such Additional Senior Debt or Additional Second Priority Debt vis-à-vis the
holders of the relevant obligations hereunder.

 

SECTION 8.04.           Information Concerning Financial Condition of the
Borrowers and the Subsidiaries. None of the Senior Representatives and the
Senior Secured Parties, on the one hand, and the Second Priority Representatives
and the Second Priority Debt Parties, on the other hand, shall have any duty to
inform the other parties of (a) the financial condition of the Borrowers and
their Subsidiaries and all endorsers or guarantors of the Senior Obligations or
the Second Priority Debt Obligations and (b) all other circumstances bearing
upon the risk of nonpayment of the Senior Obligations or the Second Priority
Debt Obligations. The Senior Representatives, the Senior Secured Parties, the
Second Priority Representatives and the Second Priority Secured Parties shall
have no duty to advise any other party hereunder of information known to it or
them regarding such condition or any such circumstances or otherwise. In the
event that any Senior Representative, any Senior Secured Party, any Second
Priority Representative or any Second Priority Debt Party, in its sole
discretion, undertakes at any time or from time to time to provide any such
information to any other party, it shall be under no obligation to (i) make, and
the Senior Representatives, the Senior Secured Parties, the Second Priority
Representatives and the Second Priority Debt Parties shall not make or be deemed
to have made, any express or implied representation or warranty, including with
respect to the

 

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accuracy, completeness, truthfulness or validity of any such information so
provided, (ii) provide any additional information or to provide any such
information on any subsequent occasion, (iii) undertake any investigation or
(iv) disclose any information that, pursuant to accepted or reasonable
commercial finance practices, such party wishes to maintain confidential or is
otherwise required to maintain confidential.

 

SECTION 8.05.           Subrogation. Each Second Priority Representative, on
behalf of itself and each Second Priority Debt Party under its Second Priority
Debt Facility, hereby waives any rights of subrogation it may acquire as a
result of any payment hereunder until the Discharge of Senior Obligations has
occurred.

 

SECTION 8.06.           Application of Payments. Except as otherwise provided
herein, all payments received by the Senior Secured Parties may be applied,
reversed and reapplied, in whole or in part, to such part of the Senior
Obligations as the Senior Secured Parties, in their sole discretion, deem
appropriate, consistent with the terms of the Senior Debt Documents. Except as
otherwise provided herein, each Second Priority Representative, on behalf of
itself and each Second Priority Debt Party under its Second Priority Debt
Facility, assents to any such extension or postponement of the time of payment
of the Senior Obligations or any part thereof and to any other indulgence with
respect thereto, to any substitution, exchange or release of any Lien that may
at any time secure any part of the Senior Obligations and to the addition or
release of any other Person primarily or secondarily liable therefor.

 

SECTION 8.07.           Additional Grantors. The Borrowers agree that, if any
Subsidiary shall become a Grantor after the date hereof, they will promptly
cause such Subsidiary to become party hereto by executing and delivering an
instrument in the form of Annex I. Upon such execution and delivery, such
Subsidiary will become a Grantor hereunder with the same force and effect as if
originally named as a Grantor herein. The execution and delivery of such
instrument shall not require the consent of any other party hereunder, and will
be acknowledged by the Designated Second Priority Representative and the
Designated Senior Representative. The rights and obligations of each Grantor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Grantor as a party to this Agreement.

 

SECTION 8.08.           Dealings with Grantors. Upon any application or demand
by any Borrower or any Grantor to any Representative to take or permit any
action under any of the provisions of this Agreement or under any Collateral
Document (if such action is subject to the provisions hereof), at the request of
such Representative, such Borrower or such Grantor, as appropriate, shall
furnish to such Representative a certificate of its vice president, chief
financial officer, or other executive officer (an “Officer’s Certificate”)
stating that all conditions precedent, if any, provided for in this Agreement or
such Collateral Document, as the case may be, relating to the proposed action
have been complied with, except that in the case of any such application or
demand as to which the furnishing of such documents is specifically required by
any provision of this Agreement or any Collateral Document relating to such
particular application or demand, no additional certificate or opinion need be
furnished.

 

SECTION 8.09.           Additional Debt Facilities. To the extent, but only to
the extent, not prohibited by the provisions of the then extant Senior Debt
Documents and/or Second Priority Debt Documents, any Borrower or any Restricted
Subsidiary permitted under the Debt Facilities

 

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may incur or issue and sell one or more series or classes of Additional Second
Priority Debt and one or more series or classes of Additional Senior Debt. Any
such additional class or series of Second Priority Debt (the “Second Priority
Class Debt”) may be secured by a junior priority, subordinated Lien on Shared
Collateral, in each case under and pursuant to the relevant Second Priority
Collateral Documents for such Second Priority Class Debt, if and subject to the
condition that the Representative of any such Second Priority Class Debt (each,
a “Second Priority Class Debt Representative”), acting on behalf of the holders
of such Second Priority Class Debt (such Representative and holders in respect
of any Second Priority Class Debt being referred to as the “Second Priority
Class Debt Parties”), becomes a party to this Agreement by satisfying
conditions (i) through (iii), as applicable, of the immediately succeeding
paragraph. Any such additional class or series of Senior Facilities (the “Senior
Class Debt”; and the Senior Class Debt and Second Priority Class Debt,
collectively, the “Class Debt”) may be secured by a senior Lien on Shared
Collateral, in each case under and pursuant to the relevant Senior Collateral
Documents, if and subject to the condition that the Representative of any such
Senior Class Debt (each, a “Senior Class Debt Representative”; and the Senior
Class Debt Representatives and Second Priority Class Debt Representatives,
collectively, the “Class Debt Representatives”), acting on behalf of the holders
of such Senior Class Debt (such Representative and holders in respect of any
such Senior Class Debt being referred to as the “Senior Class Debt Parties; and
the Senior Class Debt Parties and Second Priority Class Debt Parties,
collectively, the “Class Debt Parties”), becomes a party to this Agreement by
satisfying the conditions set forth in clauses (i) through (iii), as applicable,
of the immediately succeeding paragraph and becomes a party to the First Lien
Intercreditor Agreement in accordance with the terms thereof.

 

In order for a Class Debt Representative to become a party to this Agreement:

 

(i)                                     such Class Debt Representative shall
have executed and delivered a Joinder Agreement substantially in the form of
Annex II (if such Representative is a Second Priority Class Debt Representative)
(with such changes as may be reasonably approved by the Designated Second
Priority Representative and such Class Debt Representative) or Annex III (if
such Representative is a Senior Class Debt Representative) (with such changes as
may be reasonably approved by the Designated Senior Representative and such
Class Debt Representative) pursuant to which it becomes a Representative
hereunder, and the Class Debt in respect of which such Class Debt Representative
is the Representative constitutes Additional Senior Debt Obligations or
Additional Second Priority Debt Obligations, as applicable, and the related
Class Debt Parties become subject hereto and bound hereby as Additional Senior
Debt Parties or Additional Second Priority Debt Parties, as applicable;

 

(ii)                                  Cloud Peak Energy (a) shall have delivered
to the Designated Senior Representative and the Designated Second Priority
Representative an Officer’s Certificate identifying the obligations to be
designated as Additional Senior Debt Obligations or Additional Second Priority
Debt Obligations, as applicable, and the initial aggregate principal amount or
face amount thereof and certifying that such obligations are not prohibited from
being incurred and secured (I) in the case of Additional Senior Debt
Obligations, on a senior basis under each of the Senior Debt Documents and
(II) in the case of Additional Second Priority Debt Obligations, on a junior or
subordinate basis

 

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under each of the Second Priority Debt Documents and (b) if requested, shall
have delivered true and complete copies of each of the Second Priority Debt
Documents or Senior Debt Documents, as applicable, relating to such Class Debt,
certified as being true and correct by an authorized officer of Cloud Peak
Energy; and

 

(iii)                               the Second Priority Debt Documents or Senior
Debt Documents, as applicable, relating to such Class Debt shall provide that
each Class Debt Party with respect to such Class Debt will be subject to and
bound by the provisions of this Agreement in its capacity as a holder of such
Class Debt.

 

SECTION 8.10.           Refinancings. The Senior Debt Obligations and the Second
Priority Debt Obligations may be refinanced or replaced, in whole or in part
along with any Permitted Refinancing Increase, in each case, without notice to,
or the consent (except to the extent a consent is otherwise required to permit
the refinancing or replacement transaction under any Senior Debt Document or any
Second Priority Debt Document) of any Representative or any Secured Party, all
without affecting the Lien priorities provided for herein or the other
provisions hereof (it is understood that the foregoing shall in no way be
interpreted to limit the ability of any Grantor to undertake any refinancing or
replacement transaction otherwise permitted by the Senior Debt Documents and
Second Priority Debt Documents). Without limiting the application or
effectiveness of Section 5.06, the Second Priority Representative hereby agrees
that at the request of a Borrower in connection with refinancing or replacement
of Senior Obligations (“Replacement Senior Obligations”) it will promptly enter
into an agreement in form and substance reasonably acceptable to the Second
Priority Representative with the agent for the Replacement Senior Obligations
containing terms and conditions substantially similar to the terms and
conditions of this Agreement.

 

SECTION 8.11.           Consent to Jurisdiction; Waivers. Each Representative,
on behalf of itself and the Secured Parties of the Debt Facility for which it is
acting, irrevocably and unconditionally:

 

(a)                                 submits for itself and its property in any
legal action or proceeding relating to this Agreement and the Collateral
Documents, or for recognition and enforcement of any judgment in respect
thereof, to the exclusive jurisdiction of the courts of the State of New York or
the United States of America located in the Borough of Manhattan, City of New
York, and appellate courts from any thereof;

 

(b)                                 consents and agrees that any such action or
proceeding shall be brought in such courts and waives any objection that it may
now or hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;

 

(c)                                  agrees that service of process in any such
action or proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage prepaid, to
such Person (or its Representative) at the address referred to in Section 8.12;
and

 

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(d)                                 agrees that nothing herein shall affect the
right of any other party hereto (or any Secured Party) to effect service of
process in any other manner permitted by law.

 

SECTION 8.12.           Notices. All notices, requests, demands and other
communications provided for or permitted hereunder shall be in writing and shall
be sent:

 

(i)                                     if to a Borrower or any Grantor, to
Cloud Peak Energy, at its address at:

 

Cloud Peak Energy Resources LLC

385 Interlocken Crescent, Suite 400

Broomfield, CO 80021

Attention: John Stranak,

Vice President of Finance and Treasurer

Tel: 720-566-2931

Email: John.Stranak@cldpk.com

 

With a copy to (which shall not constitute notice) the General Counsel of Cloud
Peak Energy Resources LLC at the same address;

 

(ii)                                  if to the First Lien Collateral Agent, to
it at:

 

PNC Bank, National Association

The Tower at PNC Plaza

300 Fifth Avenue

Pittsburgh, PA 15222

Attention: Jim O’Brien

Tel: (412) 762-7493

Email: james.obrien@pnc.com

 

And

 

PNC Bank, National Association

101 West Washington Street

5th Floor, East Tower (Locator I1-Y013-05-3)

Indianapolis, IN 46255

Attention: Christopher B. Gribble

Tel: (317) 267-7874

Email: Christopher.Gribble@pnc.com

 

With a copy to (which shall not constitute notice):

 

Buchanan Ingersoll & Rooney PC

One Oxford Centre

301 Grant Street, 20th Floor

Pittsburgh, PA 15241

Attention: Donald Malecki, Esq.

Tel: (412) 562-3968

Email: donald.malecki@bipc.com

 

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(iii)                               if to the Second Lien Collateral Agent, to
it at:

 

Wilmington Trust, National Association

1100 North Market Street

Wilmington, DE 19890

Attention:  Cloud Peak Energy Administrator

Tel: (302) 636-6432

Email: tmorris@wilmingtontrust.com

 

With a copy to (which shall not constitute notice):

 

Shipman & Goodwin LLP

One Constitution Plaza

Hartford, CT 06103

Attention: Marie Pollio, Esq.

Tel. (860) 251-5561

Email: mpollio@goodwin.com

 

(iv)                              if to any other Representative, to it at the
address specified by it in the Joinder Agreement delivered by it pursuant to
Section 8.09.

 

Unless otherwise specifically provided herein, any notice or other communication
herein required or permitted to be given shall be in writing and, may be
personally served, telecopied, electronically mailed or sent by courier service
or U.S. mail and shall be deemed to have been given when delivered in person or
by courier service, upon receipt of a telecopy or electronic mail or upon
receipt via U.S. mail (registered or certified, with postage prepaid and
properly addressed). For the purposes hereof, the addresses of the parties
hereto shall be as set forth above or, as to each party, at such other address
as may be designated by such party in a written notice to all of the other
parties.

 

SECTION 8.13.           Further Assurances. Each Senior Representative, on
behalf of itself and each Senior Secured Party under the Senior Debt Facility
for which it is acting, each Second Party Representative, on behalf of itself,
and each Second Priority Debt Party under its Second Priority Debt Facility,
agrees that it will take such further action and shall execute and deliver such
additional documents and instruments (in recordable form, if requested) as the
other parties hereto may reasonably request to effectuate the terms of, and the
Lien priorities contemplated by, this Agreement, all at the cost and expense of
the Borrowers.

 

SECTION 8.14.           GOVERNING LAW; WAIVER OF JURY TRIAL.

 

(A)                               THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECTS TO CONFLICTS OF LAWS.

 

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(B)                               EACH PARTY HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

SECTION 8.15.           Binding on Successors and Assigns. This Agreement shall
be binding upon the Senior Representatives, the Senior Secured Parties, the
Second Priority Representatives, the Second Priority Debt Parties, the
Borrowers, the other Grantors party hereto and their respective successors and
assigns.

 

SECTION 8.16.           Section Titles. The section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of this Agreement.

 

SECTION 8.17.           Counterparts. This Agreement may be executed in one or
more counterparts, including by means of facsimile or other electronic method,
each of which shall be an original and all of which shall together constitute
one and the same document. Delivery of an executed signature page to this
Agreement by facsimile or other electronic transmission shall be as effective as
delivery of a manually signed counterpart of this Agreement.

 

SECTION 8.18.           Authorization. By its signature, each Person executing
this Agreement on behalf of a party hereto represents and warrants to the other
parties hereto that it is duly authorized to execute this Agreement. The First
Lien Credit Agreement Secured Parties have appointed the First Lien Collateral
Agent as collateral agent pursuant to the First Lien Credit Agreement on behalf
of the First Lien Credit Agreement Secured Parties and the First Lien Collateral
Agent represents and warrants that it has duly accepted such appointment. The
Borrowers and the other Grantors have appointed the Second Lien Collateral Agent
as collateral agent pursuant to the Second Lien Indenture on behalf of the
Second Lien Indenture Secured Parties and the Second Lien Collateral Agent
represents and warrants that it has duly accepted such appointment.

 

SECTION 8.19.           No Third Party Beneficiaries; Successors and Assigns.
The lien priorities set forth in this Agreement and the rights and benefits
hereunder in respect of such lien priorities shall inure solely to the benefit
of the Senior Representatives, the Senior Secured Parties, the Second Priority
Representatives and the Second Priority Debt Parties, and their respective
permitted successors and assigns, and no other Person (including the Grantors,
or any trustee, receiver, debtor in possession or bankruptcy estate in a
bankruptcy or like proceeding) shall have or be entitled to assert such rights.
Nothing in this Agreement is intended to or shall impair the obligations of any
Borrower or any other Grantor, which are absolute and unconditional, to pay the
Senior Obligations and the Second Priority Debt Obligations as and when the same
shall become due and payable in accordance with their terms. Except for
Sections 5.01, 5.03,  6.01, 8.03(b), (c) and (d), 8.09, and 8.10, hereof and
this last sentence of this Section 8.19, neither a Borrower nor any other
Grantor shall have any rights hereunder.

 

SECTION 8.20.           Effectiveness. This Agreement shall become effective
when executed and delivered by the parties hereto.

 

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SECTION 8.21.           Collateral Agent and Representative. It is understood
and agreed that (a) the First Lien Collateral Agent is entering into this
Agreement in its capacity as collateral agent under the First Lien Credit
Agreement and the provisions of Article VIII of the First Lien Credit Agreement
applicable to the Administrative Agent (as defined therein) thereunder shall
also apply to the First Lien Collateral Agent hereunder and (b) the Second Lien
Collateral Agent is entering into this Agreement in its capacity as collateral
agent under the Second Lien Indenture and the provisions of Article XI of the
Second Lien Indenture applicable to the Collateral (as defined therein)
thereunder shall also apply to the Second Lien Collateral Agent hereunder.

 

SECTION 8.22.           Survival of Agreement. All covenants, agreements,
representations and warranties made by any party in this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement.

 

SECTION 8.23.           Certain Notices to the Designated Second Priority
Representative. The Borrower agrees to give the Designated Second Priority
Representative reasonable notice of the occurrence of the Discharge of Senior
Obligations.  The Borrower agrees to give the Designated Senior Representative
reasonable notice of the occurrence of the Discharge of Second Priority Debt
Obligations.

 

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

 

 

PNC BANK, NATIONAL ASSOCIATION,
as First Lien Collateral Agent

 

 

 

 

 

By:

/s/ Christopher B. Gribble

 

Name:

Christopher B. Gribble

 

Title:

Senior Vice President

 

Signature Page

FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT

CLOUD PEAK ENERGY RESOURCES LLC AND CLOUD PEAK ENERGY FINANCE CORP.

 

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

 

 

WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Second Lien Collateral Agent

 

 

 

 

 

By:

/s/ W. Thomas Morris, II

 

Name:

W. Thomas Morris, II

 

Title:

Vice President

 

Signature Page

FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT

CLOUD PEAK ENERGY RESOURCES LLC AND CLOUD PEAK ENERGY FINANCE CORP.

 

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

 

 

CLOUD PEAK ENERGY RESOURCES LLC

 

 

 

 

 

By:

/s/ Heath Hill

 

Name:

Heath Hill

 

Title:

Executive Vice President and Chief Financial Officer

 

 

 

 

 

CLOUD PEAK ENERGY FINANCE CORP.

 

 

 

 

 

By:

/s/ Heath Hill

 

Name:

Heath Hill

 

Title:

Executive Vice President and Chief Financial Officer

 

 

 

CLOUD PEAK ENERGY INC.

 

ANTELOPE COAL LLC

 

ARROWHEAD I LLC

 

ARROWHEAD II LLC

 

ARROWHEAD III LLC

 

BIG METAL COAL CO. LLC

 

CABALLO ROJO LLC

 

CABALLO ROJO HOLDINGS LLC

 

CLOUD PEAK ENERGY LOGISTICS LLC

 

CLOUD PEAK ENERGY LOGISTICS I LLC

 

CLOUD PEAK ENERGY SERVICES COMPANY

 

CORDERO MINING LLC

 

CORDERO MINING HOLDINGS LLC

 

CORDERO OIL AND GAS LLC

 

KENNECOTT COAL SALES LLC

 

NERCO LLC

 

NERCO COAL LLC

 

NERCO COAL SALES LLC

 

PROSPECT LAND AND DEVELOPMENT LLC

 

RESOURCE DEVELOPMENT LLC

 

SEQUATCHIE VALLEY COAL CORPORATION

 

SPRING CREEK COAL LLC

 

WESTERN MINERALS LLC

 

YOUNGS CREEK HOLDINGS I LLC

 

YOUNGS CREEK HOLDINGS II LLC

 

YOUNGS CREEK MINING COMPANY, LLC

 

 

 

 

 

By:

/s/ Heath Hill

 

 

Name:

Heath Hill

 

 

Title:

Executive Vice President and Chief Financial Officer,

 

for and on behalf of each of the foregoing Grantors

 

Signature Page

FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT

CLOUD PEAK ENERGY RESOURCES LLC AND CLOUD PEAK ENERGY FINANCE CORP.

 

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ANNEX I

 

[FORM OF] SUPPLEMENT NO. [     ] dated as of [          ], 201[ ], to the FIRST
LIEN/SECOND LIEN INTERCREDITOR AGREEMENT dated as of October 17, 2016 (the
“First Lien/Second Lien Intercreditor Agreement”), among CLOUD PEAK ENERGY
RESOURCES LLC, a Delaware limited liability company (“Cloud Peak Energy”), CLOUD
PEAK ENERGY FINANCE CORP., a Delaware corporation (“Cloud Peak Finance” and,
together with Cloud Peak Energy, the “Borrowers”), the other Grantors party
hereto, PNC BANK, NATIONAL ASSOCIATION, as the First Lien Collateral Agent under
the First Lien Credit Agreement, WILMINGTON TRUST, NATIONAL ASSOCIATION, as the
Second Lien Collateral Agent under the Second Lien Indenture, and the additional
Representatives from time to time party thereto.

 

A.                                    Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
First Lien/Second Lien Intercreditor Agreement.

 

B.                                    The Grantors have entered into the First
Lien/Second Lien Intercreditor Agreement. Pursuant to the First Lien Credit
Agreement, the Second Lien Indenture, certain Additional Senior Debt Documents,
and certain Additional Second Priority Debt Documents, certain newly acquired or
organized Subsidiaries of the Parent are required to enter into the First
Lien/Second Lien Intercreditor Agreement. Section 8.07 of the First Lien/Second
Lien Intercreditor Agreement provides that such Subsidiaries may become party to
the First Lien/Second Lien Intercreditor Agreement by execution and delivery of
an instrument in the form of this Supplement. The undersigned Subsidiary (the
“New Grantor”) is executing this Supplement in accordance with the requirements
of the First Lien Credit Agreement, the Second Lien Indenture, the Additional
Second Priority Debt Documents and Additional Senior Debt Documents.

 

Accordingly, the New Subsidiary Grantor agrees and the Designated Senior
Representative and the Designated Second Priority Representative acknowledge as
follows:

 

SECTION 1.                            In accordance with Section 8.07 of the
First Lien/Second Lien Intercreditor Agreement, the New Grantor by its signature
below becomes a Grantor under the First Lien/Second Lien Intercreditor Agreement
with the same force and effect as if originally named therein as a Grantor, and
the New Grantor hereby agrees to all the terms and provisions of the First
Lien/Second Lien Intercreditor Agreement applicable to it as a Grantor
thereunder. Each reference to a “Grantor” in the First Lien/Second Lien
Intercreditor Agreement shall be deemed to include the New Grantor. The First
Lien/Second Lien Intercreditor Agreement is hereby incorporated herein by
reference.

 

SECTION 2.                            The New Grantor represents and warrants to
the Designated Senior Representative, the Designated Second Priority
Representative and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms, except
as such enforceability may be limited by Bankruptcy Laws and by general
principles of equity.

 

Annex I-1

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SECTION 3.                            This Supplement may be executed in
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Supplement shall become
effective when the Designated Senior Representative and the Designated Second
Priority Representative shall have received a counterpart of this Supplement
that bears the signature of the New Grantor. Delivery of an executed signature
page to this Supplement by facsimile transmission or other electronic method
shall be as effective as delivery of a manually signed counterpart of this
Supplement.

 

SECTION 4.                            Except as expressly supplemented hereby,
the First Lien/Second Lien Intercreditor Agreement shall remain in full force
and effect.

 

SECTION 5.                            THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

SECTION 6.                            In case any one or more of the provisions
contained in this Supplement should be held invalid, illegal or unenforceable in
any respect, no party hereto shall be required to comply with such provision for
so long as such provision is held to be invalid, illegal or unenforceable, but
the validity, legality and enforceability of the remaining provisions contained
herein and in the First Lien/Second Lien Intercreditor Agreement shall not in
any way be affected or impaired. The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.

 

SECTION 7.                            All communications and notices hereunder
shall be in writing and given as provided in Section 8.12 of the First
Lien/Second Lien Intercreditor Agreement. All communications and notices
hereunder to the New Grantor shall be given to it in care of Cloud Peak Energy
as specified in the First Lien/Second Lien Intercreditor Agreement.

 

SECTION 8.                            The Borrowers agree to reimburse the
Designated Senior Representative and the Designated Second Priority
Representative for each of their reasonable fees and expenses in connection with
this Supplement, including the reasonable fees, other charges and disbursements
of counsel for the Designated Senior Representative and the Designated Second
Priority Representative as required by the applicable Senior Debt Documents.

 

Annex I-2

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

 

IN WITNESS WHEREOF, the New Grantor, the Designated Senior Representative and
the Designated Second Priority Representative have duly executed this Supplement
to the First Lien/Second Lien Intercreditor Agreement as of the day and year
first above written.

 

 

[NAME OF NEW SUBSIDIARY GRANTOR]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

Acknowledged by:

 

 

 

 

 

[                        ], as Designated Senior Representative

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

[                        ], as Designated Second Priority Representative

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

Annex I-3

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

 

ANNEX II

 

[FORM OF] REPRESENTATIVE SUPPLEMENT NO. [     ] dated as of [          ],
201[ ], to the FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT dated as of
October 17, 2016 (the “First Lien/Second Lien Intercreditor Agreement”), among
CLOUD PEAK ENERGY RESOURCES LLC, a Delaware limited liability company (“Cloud
Peak Energy”), CLOUD PEAK ENERGY FINANCE CORP., a Delaware corporation (“Cloud
Peak Finance” and, together with Cloud Peak Energy, the “Borrowers”), the other
Grantors party hereto, PNC BANK, NATIONAL ASSOCIATION, as the First Lien
Collateral Agent under the First Lien Credit Agreement, WILMINGTON TRUST,
NATIONAL ASSOCIATION, as the Second Lien Collateral Agent under the Second Lien
Indenture, and the additional Representatives from time to time party thereto.

 

A.            Capitalized terms used herein but not otherwise defined herein
shall have the meanings assigned to such terms in the First Lien/Second Lien
Intercreditor Agreement.

 

B.            As a condition to the ability of the Borrowers to incur Second
Priority Class Debt after the date of the First Lien/Second Lien Intercreditor
Agreement and to secure such Second Priority Class Debt with the Second Priority
Lien and to have such Second Priority Class Debt guaranteed by the Grantors, in
each case under and pursuant to the Second Priority Collateral Documents
relating thereto, the Second Priority Class Debt Representative in respect of
such Second Priority Class Debt is required to become a Representative under,
and such Second Priority Class Debt and the Second Priority Class Debt Parties
in respect thereof are required to become subject to and bound by, the First
Lien/Second Lien Intercreditor Agreement. Section 8.09 of the First Lien/Second
Lien Intercreditor Agreement provides that such Second Priority Class Debt
Representative may become a Representative under, and such Second Priority
Class Debt and such Second Priority Class Debt Parties may become subject to and
bound by, the First Lien/Second Lien Intercreditor Agreement as Additional
Second Priority Debt Obligations and Additional Second Priority Debt Parties,
respectively, pursuant to the execution and delivery by the Second Priority
Class Debt Representative of an instrument in the form of this Representative
Supplement and the satisfaction of the other conditions set forth in
Section 8.09 of the First Lien/Second Lien Intercreditor Agreement. The
undersigned Second Priority Class Debt Representative (the “New Representative”)
is executing this Supplement in accordance with the requirements of the Senior
Debt Documents and the Second Priority Debt Documents.

 

Accordingly, the New Representative agrees and the Designated Senior
Representative and the Designated Second Priority Representative acknowledge as
follows:

 

SECTION 1.         In accordance with Section 8.09 of the First Lien/Second Lien
Intercreditor Agreement, the New Representative by its signature below becomes a
Representative under, and the related Second Priority Class Debt and Second
Priority Class Debt Parties become subject to and bound by, the First
Lien/Second Lien Intercreditor Agreement as Additional Second Priority Debt
Obligations and Additional Second Priority Debt Parties, respectively, with the
same force and effect as if the New Representative had originally been named
therein as a Representative, and the New Representative, on behalf of itself and
such Second Priority Class Debt Parties, hereby agrees to all the terms and
provisions of the First

 

Annex 1

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

 

Lien/Second Lien Intercreditor Agreement applicable to it as a Second Priority
Representative and to the Second Priority Class Debt Parties that it represents
as Second Priority Debt Parties. Each reference to a “Representative” or “Second
Priority Representative” in the First Lien/Second Lien Intercreditor Agreement
shall be deemed to include the New Representative. The First Lien/Second Lien
Intercreditor Agreement is hereby incorporated herein by reference.

 

SECTION 2.         The New Representative represents and warrants to the
Designated Senior Representative, the Designated Second Priority Representative
and the other Secured Parties that (i) it has full power and authority to enter
into this Representative Supplement, in its capacity as [agent] [trustee],
(ii) this Representative Supplement has been duly authorized, executed and
delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with the terms of such Agreement and
(iii) the Second Priority Debt Documents relating to such Second Priority
Class Debt provide that, upon the New Representative’s entry into this
Agreement, the Second Priority Class Debt Parties in respect of such Second
Priority Class Debt will be subject to and bound by the provisions of the First
Lien/Second Lien Intercreditor Agreement as Second Priority Debt Parties.

 

SECTION 3.         This Representative Supplement may be executed in
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Representative
Supplement shall become effective when the Designated Senior Representative and
the Designated Second Priority Representative shall have received a counterpart
of this Representative Supplement that bears the signature of the New
Representative. Delivery of an executed signature page to this Representative
Supplement by facsimile transmission or other electronic method shall be
effective as delivery of a manually signed counterpart of this Representative
Supplement.

 

SECTION 4.         Except as expressly supplemented hereby, the First
Lien/Second Lien Intercreditor Agreement shall remain in full force and effect.

 

SECTION 5.         THIS REPRESENTATIVE SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO CONFLICTS OF LAWS.

 

SECTION 6.         In case any one or more of the provisions contained in this
Representative Supplement should be held invalid, illegal or unenforceable in
any respect, no party hereto shall be required to comply with such provision for
so long as such provision is held to be invalid, illegal or unenforceable, but
the validity, legality and enforceability of the remaining provisions contained
herein and in the First Lien/Second Lien Intercreditor Agreement shall not in
any way be affected or impaired. The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.

 

SECTION 7.         All communications and notices hereunder shall be in writing
and given as provided in Section 8.12 of the First Lien/Second Lien
Intercreditor Agreement. All communications and notices hereunder to the New
Representative shall be given to it at the address set forth below its signature
hereto.

 

Annex 2

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

 

SECTION 8.         The Borrowers agree to reimburse the Designated Senior
Representative and the Designated Second Priority Representative for each of
their reasonable fees and expenses in connection with this Representative
Supplement, including the reasonable fees, other charges and disbursements of
counsel for the Designated Senior Representative and the Designated Second
Priority Representative as required by the applicable Senior Debt Documents.

 

Annex 3

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

 

IN WITNESS WHEREOF, the New Representative, the Designated Senior Representative
and the Designated Second Priority Representative have duly executed this
Representative Supplement to the First Lien/Second Lien Intercreditor Agreement
as of the day and year first above written.

 

 

[NAME OF NEW REPRESENTATIVE],

 

as [                       ] for the holders of
[                      ]

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

Address for notices:

 

 

 

 

 

Attention of:

 

 

Telecopy:

 

 

 

 

 

 

[                         ],

 

as Designated Senior Representative

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

[                         ],

 

as Designated Second Priority Representative

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

Acknowledged by:

 

CLOUD PEAK ENERGY RESOURCES LLC

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

Annex 4

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

 

CLOUD PEAK ENERGY FINANCE CORP.

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

[SUBSIDIARY GRANTORS]

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

Annex 5

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

 

ANNEX III

 

[FORM OF] REPRESENTATIVE SUPPLEMENT NO. [     ] dated as of [          ],
201[ ], to the FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT dated as of
October 17, 2016 (the “First Lien/Second Lien Intercreditor Agreement”), among
CLOUD PEAK ENERGY RESOURCES LLC, a Delaware limited liability company (“Cloud
Peak Energy”), CLOUD PEAK ENERGY FINANCE CORP., a Delaware corporation (“Cloud
Peak Finance” and, together with Cloud Peak Energy, the “Borrowers”), the other
Grantors party hereto, PNC BANK, NATIONAL ASSOCIATION, as the First Lien
Collateral Agent under the First Lien Credit Agreement, WILMINGTON TRUST,
NATIONAL ASSOCIATION, as the Second Lien Collateral Agent under the Second Lien
Indenture, and the additional Representatives from time to time party thereto.

 

C.            Capitalized terms used herein but not otherwise defined herein
shall have the meanings assigned to such terms in the First Lien/Second Lien
Intercreditor Agreement.

 

D.            As a condition to the ability of the Borrowers to incur Senior
Class Debt after the date of the First Lien/Second Lien Intercreditor Agreement
and to secure such Senior Class Debt with the Senior Lien and to have such
Senior Class Debt guaranteed by the Grantors on a senior basis, in each case
under and pursuant to the Senior Collateral Documents relating thereto, the
Senior Class Debt Representative in respect of such Senior Class Debt is
required to become a Representative under, and such Senior Class Debt and the
Senior Class Debt Parties in respect thereof are required to become subject to
and bound by, the First Lien/Second Lien Intercreditor Agreement. Section 8.09
of the First Lien/Second Lien Intercreditor Agreement provides that such Senior
Class Debt Representative may become a Representative under, and such Senior
Class Debt and such Senior Class Debt Parties may become subject to and bound
by, the First Lien/Second Lien Intercreditor Agreement as Additional Senior Debt
Obligations and Additional Senior Debt Parties, respectively, pursuant to the
execution and delivery by the Senior Class Debt Representative of an instrument
in the form of this Representative Supplement and the satisfaction of the other
conditions set forth in Section 8.09 of the First Lien/Second Lien Intercreditor
Agreement. The undersigned Senior Class Debt Representative (the “New
Representative”) is executing this Supplement in accordance with the
requirements of the Senior Debt Documents and the Second Priority Debt
Documents.

 

Accordingly, the New Representative agrees and the the Designated Senior
Representative acknowledges as follows:

 

SECTION 1.         In accordance with Section 8.09 of the First Lien/Second Lien
Intercreditor Agreement, the New Representative by its signature below becomes a
Representative under, and the related Senior Class Debt and Senior Class Debt
Parties become subject to and bound by, the First Lien/Second Lien Intercreditor
Agreement as Additional Senior Debt Obligations and Additional Senior Debt
Parties, respectively, with the same force and effect as if the New
Representative had originally been named therein as a Representative, and the
New Representative, on behalf of itself and such Senior Class Debt Parties,
hereby agrees to all the terms and provisions of the First Lien/Second Lien
Intercreditor Agreement applicable to it as a Senior Representative and to the
Senior Class Debt Parties that it represents as Senior Debt Parties. Each
reference to a “Representative” or “Senior Representative” in the

 

1

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

 

First Lien/Second Lien Intercreditor Agreement shall be deemed to include the
New Representative. The First Lien/Second Lien Intercreditor Agreement is hereby
incorporated herein by reference.

 

SECTION 2.         The New Representative represents and warrants to the
Designated Senior Representative and the other Secured Parties that (i) it has
full power and authority to enter into this Representative Supplement, in its
capacity as [agent] [trustee], (ii) this Representative Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with the terms of such
Agreement and (iii) the Senior Debt Documents relating to such Senior Class Debt
provide that, upon the New Representative’s entry into this Agreement, the
Senior Class Debt Parties in respect of such Senior Class Debt will be subject
to and bound by the provisions of the First Lien/Second Lien Intercreditor
Agreement as Senior Secured Parties.

 

SECTION 3.         This Representative Supplement may be executed in
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Representative
Supplement shall become effective when the Designated Senior Representative
shall have received a counterpart of this Representative Supplement that bears
the signature of the New Representative. Delivery of an executed signature
page to this Representative Supplement by facsimile transmission or other
electronic method shall be effective as delivery of a manually signed
counterpart of this Representative Supplement.

 

SECTION 4.         Except as expressly supplemented hereby, the First
Lien/Second Lien Intercreditor Agreement shall remain in full force and effect.

 

SECTION 5.         THIS REPRESENTATIVE SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO CONFLICTS OF LAWS.

 

SECTION 6.         In case any one or more of the provisions contained in this
Representative Supplement should be held invalid, illegal or unenforceable in
any respect, no party hereto shall be required to comply with such provision for
so long as such provision is held to be invalid, illegal or unenforceable, but
the validity, legality and enforceability of the remaining provisions contained
herein and in the First Lien/Second Lien Intercreditor Agreement shall not in
any way be affected or impaired. The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.

 

SECTION 7.         All communications and notices hereunder shall be in writing
and given as provided in Section 8.12 of the First Lien/Second Lien
Intercreditor Agreement. All communications and notices hereunder to the New
Representative shall be given to it at the address set forth below its signature
hereto.

 

SECTION 8.         The Borrowers agree to reimburse the Designated Senior
Representative for its reasonable fees and expenses in connection with this
Representative Supplement, including the reasonable fees, other charges and
disbursements of counsel for the Designated Senior Representative as required by
the applicable Senior Debt Documents.

 

2

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

 

IN WITNESS WHEREOF, the New Representative and the Designated Senior
Representative have duly executed this Representative Supplement to the First
Lien/Second Lien Intercreditor Agreement as of the day and year first above
written.

 

 

[NAME OF NEW REPRESENTATIVE],

 

as [                       ] for the holders of
[                      ]

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

Address for notices:

 

 

 

 

 

 

Attention of:

 

 

Telecopy:

 

 

 

 

 

[                         ],

 

as Designated Senior Representative

 

 

 

By:

 

 

 

Name:

 

 

Title:

Acknowledged by:

 

 

CLOUD PEAK ENERGY RESOURCES LLC

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

CLOUD PEAK ENERGY FINANCE CORP.

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

[SUBSIDIARY GRANTORS]

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

3

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