Exhibit 10.10

EXECUTION VERSION

FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT

among

PAE HOLDING CORPORATION,

SHAY INTERMEDIATE HOLDING II CORPORATION,

as Holdings,

BANK OF AMERICA, N.A.,

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

BANK OF AMERICA, N.A.,

as Second Priority Representative for the Initial Second Priority Debt Secured
Parties,

and

each additional Representative from time to time party hereto

dated as of October 20, 2016

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FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT dated as of October 20, 2016
(this “Agreement”), among SHAY INTERMEDIATE HOLDING II CORPORATION, a Delaware
corporation (“Holdings”), PAE HOLDING CORPORATION, a Delaware corporation (the
“Lead Borrower”), the other Grantors from time to time party hereto, BANK OF
AMERICA, N.A., 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”), BANK OF AMERICA. N.A., acting in its capacity as
administrative agent and collateral agent under the Initial Second Lien Debt
Agreement, as Representative for the Initial Second Priority Debt Secured
Parties (in such capacity and together with its successors in such capacity, the
“Initial Second Lien Representative”), and each additional Senior Priority
Representative and Second Priority 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 Initial Second Lien
Representative (for itself and on behalf of the Initial Second Priority Debt
Secured Parties) and each additional Senior Priority Representative (for itself
and on behalf of the Additional Senior Secured Parties under the applicable
Additional Senior Priority Debt Facility) and each additional Second Priority
Representative (for itself and on behalf of the Additional Second Priority
Secured Parties under the applicable Additional Second Priority Debt Facility)
agree as follows:

ARTICLE 1

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 UCC, the meanings specified therein. As used in this
Agreement, the following terms have the meanings specified below:

“ABL Collateral” has the meaning assigned to such term in the ABL Intercreditor
Agreement.

“ABL Intercreditor Agreement” means that certain Intercreditor Agreement, dated
as of October 20, 2016, entered into by and among Holdings; the Lead Borrower;
the certain Subsidiaries of the Lead Borrower that become a party thereto from
time to time as a Borrower or Guarantor; Bank of America, N.A., as collateral
agent for the holders of the Revolving Credit Obligations (as such term is
defined in the ABL Intercreditor Agreement); Bank of America, N.A., as
collateral agent for the holders of the Initial Fixed Asset Obligations (as such
term is defined in the ABL Intercreditor Agreement); and Bank of America, N.A.,
as collateral agent for the holders of the Second Lien Initial Fixed Asset
Obligations (as such term is defined in the ABL Intercreditor Agreement).

 

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“Additional Second Priority Debt” means any Indebtedness that is incurred,
issued or guaranteed by the Borrowers and/or any other Guarantor (other than
Indebtedness constituting Initial Second Lien Debt Obligations) which
Indebtedness and Guarantees are secured by Liens on the Second Priority
Collateral (or a portion thereof) having the same priority (but without regard
to control of remedies, other than as provided by the terms of the applicable
Second Priority Debt Documents) as the Liens securing the Initial Second Lien
Debt Obligations; provided, however, that (i) such Indebtedness is permitted to
be incurred, secured and guaranteed on such basis by each Senior Priority Debt
Document and Second Priority Debt Document in effect at the time of such
incurrence and (ii) the Representative for the holders of such Indebtedness
shall have become party to (A) this Agreement pursuant to, and by satisfying the
conditions set forth in, Section 8.09 hereof and (B) the Second Lien
Intercreditor Agreement pursuant to, and by satisfying the conditions set forth
therein; provided, further, that, if such Indebtedness will be the initial
Additional Second Priority Debt incurred or issued by a Borrower after the
Closing Date, then such Borrower, the Initial Second Lien Representative and the
Representative for the holders of such Indebtedness shall have executed and
delivered the Second Lien Intercreditor Agreement. Additional Second Priority
Debt shall include any Registered Equivalent Notes and Guarantees thereof by the
Guarantors issued in exchange therefor.

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

“Additional Second Priority Debt Facility” means each credit agreement, loan
agreement, note purchase agreement, indenture 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, (a) all principal of, and
premium and interest, fees, and expenses (including, without limitation, any
interest, fees, or expenses which accrue after the commencement of any
Insolvency or Liquidation Proceeding or which would accrue but for the operation
of Bankruptcy Laws, whether or not allowed or allowable as a claim in any such
proceeding) payable with respect to, such Additional Second Priority Debt,
(b) all other amounts payable to the related Additional Second Priority Secured
Parties under the related Additional Second Priority Debt Documents and (c) any
renewals or extensions of the foregoing.

“Additional Second Priority Secured Parties” means, with respect to any series,
issue or class of Additional Second Priority Debt, the holders of such
Indebtedness or any other Additional Second Priority Debt Obligation, 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 Guarantor under any
related Additional Second Priority Debt Documents.

“Additional Senior Priority Debt” means any Indebtedness that is incurred,
issued or guaranteed by any Borrower and/or any other Guarantor (other than
Indebtedness constituting First Lien Credit Agreement Obligations) which
Indebtedness and Guarantees are secured by Liens on the Senior Priority
Collateral (or a portion thereof) having the same priority (but without regard
to control of remedies) as the Liens securing the First Lien Credit Agreement
Obligations; provided, however, that (i) such Indebtedness is permitted to be
incurred, secured and

 

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guaranteed on such basis by each Senior Priority Debt Document and Second
Priority Debt Document in effect at the time of such incurrence and (ii) the
Representative for the holders of such Indebtedness shall have become party to
(A) this Agreement pursuant to, and by satisfying the conditions set forth in,
Section 8.09 hereof and (B) the Equal Priority Intercreditor Agreement pursuant
to, and by satisfying the conditions set forth therein and the ABL Intercreditor
Agreement pursuant to, and by satisfying the conditions set forth therein;
provided, further, that, if such Indebtedness will be the initial Additional
Senior Priority Debt incurred or issued by any Borrower after the Closing Date,
then such Borrower, the First Lien Collateral Agent and the Representative for
such Indebtedness shall have executed and delivered the Equal Priority
Intercreditor Agreement. Additional Senior Priority Debt shall include any
Registered Equivalent Notes and Guarantees thereof by the Guarantors issued in
exchange therefor.

“Additional Senior Priority Debt Documents” means, with respect to any series,
issue or class of Additional Senior Priority Debt, the promissory notes, credit
agreements, loan agreements, note purchase agreements, indentures, or other
operative agreements evidencing or governing such Indebtedness or the Liens
securing such Indebtedness, including the Senior Priority Collateral Documents.

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

“Additional Senior Priority Debt Obligations” means, with respect to any series,
issue or class of Additional Senior Priority Debt, (a) all principal of, and
premium and interest, fees, and expenses (including, without limitation, any
interest, fees, or expenses which accrue after the commencement of any
Insolvency or Liquidation Proceeding or which would accrue but for the operation
of Bankruptcy Laws, whether or not allowed or allowable as a claim in any such
proceeding) payable with respect to, such Additional Senior Priority Debt,
(b) all other amounts payable to the related Additional Senior Secured Parties
under the related Additional Senior Priority Debt Documents and (c) any renewals
or extensions of the foregoing.

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

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

“Bankruptcy Code” means Title 11 of the United States Code, as amended.

“Bankruptcy Laws” means the Bankruptcy Code and any other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, administration, rearrangement, judicial management, receivership,
insolvency, reorganization (by way of voluntary arrangement, scheme of
arrangement or otherwise), or similar federal, state, or foreign debtor relief
laws (including under any applicable corporate statute) of the United States or
other applicable jurisdictions from time to time in effect.

 

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“Borrowers” means the Lead Borrower and the Subsidiary Borrowers, and “Borrower”
shall mean any such person on an individual basis.

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

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

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

“Closing Date” means the date hereof.

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

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

“control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “controlled” have meanings correlative thereto.

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

“Designated Second Priority Representative” means (i) the Initial Second Lien
Representative, so long as the Second Priority Debt Facility under the Initial
Second Lien Debt Documents is the only Second Priority Debt Facility under this
Agreement and (ii) at any time when clause (i) does not apply, the “Applicable
Authorized Representative” or similar term (as defined in the Second Lien
Intercreditor Agreement) at such time.

“Designated Senior Representative” means (i) the First Lien Collateral Agent, so
long as the Senior Priority Debt Facility under the First Lien Credit Agreement
is the only Senior Priority Debt Facility under this Agreement and (ii) at any
time when clause (i) does not apply, the “Applicable Collateral Agent” or
similar term (as defined in the Equal Priority Intercreditor Agreement) at such
time.

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

“Discharge of First Lien Credit Agreement Obligations” means, except to the
extent otherwise expressly provided in Section 5.06 and Section 6.04,

(a) payment in full in cash of all First Lien Credit Agreement Obligations
(other than (i) any indemnification obligations for which no claim has been
asserted and (ii) obligations and liabilities under Designated Interest Rate
Protection Agreements and Designated Treasury Services Agreements not then due);
and

 

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(b) termination or expiration of all commitments, if any, to extend credit that
would constitute First Lien Credit Agreement Obligations.

“Discharge of Senior Obligations” means, except to the extent otherwise
expressly provided in Section 5.06 and Section 6.04, the occurrence of both
(I) with respect to the First Lien Credit Agreement Obligations, the Discharge
of First Lien Credit Agreement Obligations, and (II) with respect to all other
Senior Obligations:

(a) payment in full in cash of all Senior Obligations (other than any
indemnification obligations for which no claim has been asserted and any other
Senior Obligations not required to be paid in full in order to have the Liens on
all Collateral securing such Senior Obligations to be released at such time in
accordance with the applicable Senior Priority Debt Documents); and

(b) termination or expiration of all commitments, if any, to extend credit that
would constitute Senior Obligations.

“Disposition” means any conveyance, sale, lease, assignment, transfer, license
or other disposition.

“Equal Priority Intercreditor Agreement” means a customary intercreditor
agreement in form and substance reasonably acceptable to the Senior Priority
Representative with respect to each Senior Priority Debt Facility in existence
at the time such intercreditor agreement is entered into and the Borrowers, and
which provides that the Liens on the applicable Collateral securing all
Indebtedness covered thereby shall be of equal priority (but without regard to
the control of remedies).

“Equity Interests” of any Person shall mean any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any preferred
stock, any limited or general partnership interest and any limited liability
company membership interest.

“FACA” has the meaning assigned to that term in Section 4.01.

“First Lien Collateral Agent” has the meaning assigned to such term in the
introductory paragraph of this Agreement and shall include any successor
administrative agent and collateral agent as provided in Section 9.09 of the
First Lien Credit Agreement.

“First Lien Credit Agreement” means that certain First Lien Credit Agreement,
dated as of October 20, 2016, among Holdings, the Borrowers, the lenders from
time to time party thereto, Bank of America, N.A., as administrative agent and
collateral agent, and the other parties thereto.

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

 

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

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

“Grantors” means Holdings, the Borrowers and each Subsidiary of Holdings (other
than the Borrowers) that has granted a security interest pursuant to any
Collateral Document to secure any Secured Obligations.

“Guarantors” means Holdings and the “Subsidiary Guarantors” as defined in the
First Lien Credit Agreement.

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

“Initial Second Lien Debt Agreement” means that certain Second Lien Credit
Agreement, dated as of October 20, 2016, among Holdings, the Borrowers, the
lenders from time to time party thereto and Bank of America, N.A., as
administrative agent and collateral agent.

“Initial Second Lien Debt Documents” means the Initial Second Lien Debt
Agreement and the other “Credit Documents” as defined in the Initial Second Lien
Debt Agreement.

“Initial Second Lien Debt Obligations” means the “Obligations” as defined in the
Initial Second Lien Debt Agreement.

“Initial Second Lien Representative” has the meaning assigned to such term in
the introductory paragraph of this Agreement and shall include any successor
administrative agent and collateral agent as provided in Section 9.09 of the
Initial Second Lien Debt Agreement.

“Initial Second Priority Debt Secured Parties” means the “Secured Creditors” as
defined in the Initial Second Lien Debt Agreement.

“Insolvency or Liquidation Proceeding” means:

(1) any case commenced by or against the Borrowers or any other Grantor under
any Bankruptcy Law, any other proceeding for the reorganization, arrangement
(including under any applicable corporate statute), recapitalization or
adjustment or marshalling of the assets or liabilities of the Borrowers or any
other Grantor, any receivership or assignment for the benefit of creditors
relating to the Borrowers or any other Grantor or any similar case or proceeding
relative to the Borrowers or any other Grantor or its creditors, as such, in
each case whether or not voluntary;

(2) any liquidation, dissolution, judicial management, marshalling of assets or
liabilities or other winding up of or relating to the Borrowers or any other
Grantor, in each case whether or not voluntary and whether or not involving
bankruptcy or insolvency; or

 

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(3) any other proceeding of any type or nature in which substantially all claims
of creditors of the Borrowers 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 the form of Annex II
or Annex III hereof required to be delivered by a Representative to the
Designated Senior Representative or Designated Second Priority Representative,
as the case may be, pursuant to Section 8.09 hereof in order to include an
additional Debt Facility hereunder and to become the Representative hereunder
for the Senior Priority Secured Parties or Second Priority Secured Parties, as
the case may be, under such Debt Facility.

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

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

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

“Proceeds” means the proceeds of any sale, collection or other liquidation of
Shared Collateral and any payment or distribution made in respect of Shared
Collateral in an Insolvency or Liquidation Proceeding and any amounts received
by any Senior Priority Representative or any Senior Priority Secured Party from
a Second Priority Secured Party in respect of Shared Collateral pursuant to this
Agreement and shall include all “proceeds,” as such term is defined in the UCC.

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

“Refinance” means, in respect of any indebtedness, to refinance, extend, renew,
defease, amend, increase, modify, supplement, restructure, refund, replace or
repay, or to issue other indebtedness or enter alternative financing
arrangements, in exchange or replacement for such indebtedness (in whole or in
part), 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 indebtedness has been terminated and
including, in each case, through any credit agreement, loan agreement, note
purchase 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 SEC.

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

“SEC” means the United States Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.

 

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“Second Lien Intercreditor Agreement” means a customary intercreditor agreement
in form and substance reasonably acceptable to the Second Priority
Representative with respect to each Second Priority Debt Facility in existence
at the time such intercreditor agreement is entered into and the Borrowers, and
which provides that the Liens on the applicable Collateral securing all
Indebtedness covered thereby shall be of equal priority (but without regard to
the control of remedies).

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

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

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

“Second Priority Collateral” means any “Collateral” (or equivalent term) as
defined in any Initial Second Lien Debt Documents or any other Second Priority
Debt Document or any other assets of the Borrowers or any other Grantor with
respect to which a Lien is granted or purported to be granted pursuant to a
Second Priority Collateral Document as security for any Second Priority Debt
Obligations.

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

“Second Priority Debt Documents” means (a) the Initial Second Lien Debt
Documents and (b) any Additional Second Priority Debt Documents.

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

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

“Second Priority Enforcement Date” means, with respect to any Second Priority
Representative, the date which is 180 days (through which 180 day period such
Second Priority Representative was the Designated Second Priority
Representative) 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, issue or
class 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

 

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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 a Senior Priority Representative has commenced and is diligently
pursuing any enforcement action with respect to a material portion of any Shared
Collateral, (2) at any time any Grantor which has granted a security interest in
any Shared Collateral is then a debtor under or with respect to (or otherwise
subject to) any Insolvency or Liquidation Proceeding, or (3) at any time any of
the Senior Priority Secured Parties are stayed from pursuing any enforcement
action with respect to a material portion of any Shared Collateral pursuant to
the ABL Intercreditor Agreement.

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

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

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

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

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

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

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

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

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

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

“Senior Priority Collateral” means any “Collateral” (or equivalent term) as
defined in any First Lien Credit Agreement Credit Document or any other Senior
Priority Debt Document or any other assets of the Borrowers or any other Grantor
with respect to which a Lien is granted or purported to be granted pursuant to a
Senior Priority Collateral Document as security for any Senior Obligations.

 

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“Senior Priority Collateral Documents” means the “Security Documents” as defined
in the First Lien Credit Agreement and each of the security agreements and other
instruments and documents executed and delivered by the Borrowers or any other
Grantor for purposes of providing collateral security for any Senior Obligation.

“Senior Priority Debt Documents” means (a) the First Lien Credit Agreement
Credit Documents and (b) any Additional Senior Priority Debt Documents.

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

“Senior Priority 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
Priority Debt Facility and the Additional Senior Secured Parties thereunder, the
trustee, administrative agent, collateral agent, security agent or similar agent
under such Additional Senior Priority Debt Facility that is named as the
Representative in respect of such Additional Senior Priority Debt Facility in
the applicable Joinder Agreement.

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

“Shared Collateral” means, at any time, Collateral in which the holders of
Senior Obligations under at least one Senior Priority Debt Facility (or their
Representatives) 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 Priority Debt
Facilities, are deemed pursuant to Article 2 to hold a security interest). If,
at any time, any portion of the Senior Priority Collateral under one or more
Senior Priority Debt Facilities does not constitute Second Priority Collateral
under one or more Second Priority Debt Facilities, then such portion of such
Senior Priority 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 Borrowers” means the subsidiary borrowers party to the First Lien
Credit Agreement and/or the Initial Second Lien Debt Agreement from time to
time.

“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 rules of interpretation set forth in Sections
1.02, 1.03, 1.05, 1.06 and 1.08 of the First Lien Credit Agreement are
incorporated herein mutatis mutandis.

 

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ARTICLE 2

PRIORITIES AND AGREEMENTS WITH RESPECT TO SHARED COLLATERAL

SECTION 2.01. Subordination. Notwithstanding the date, time, manner or order of
filing or recordation of any document or instrument or grant, attachment or
perfection of any Liens granted to any Second Priority Representative or any
Second Priority Secured Parties on the Shared Collateral or of any Liens granted
to any Senior Priority Representative or any other Senior Priority 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 Priority Debt Document or any other
circumstance whatsoever, each Second Priority Representative, on behalf of
itself and each Second Priority Secured Party under its Second Priority Debt
Facility, hereby agrees that (a) any Lien on the Shared Collateral securing or
purporting to secure any Senior Obligations now or hereafter held by or on
behalf of any Senior Priority Representative or any other Senior Priority
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 or purporting to secure any Second Priority Debt
Obligations and (b) any Lien on the Shared Collateral securing or purporting to
secure any Second Priority Debt Obligations now or hereafter held by or on
behalf of any Second Priority Representative, any Second Priority Secured
Parties or any 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 or purporting to secure any Senior Obligations. All Liens on the Shared
Collateral securing or purporting to secure any Senior Obligations shall be and
remain senior in all respects and prior to all Liens on the Shared Collateral
securing or purporting to secure any Second Priority Debt Obligations for all
purposes, whether or not such Liens securing or purporting to secure any Senior
Obligations are subordinated to any Lien securing any other obligation of the
Borrowers, 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 Secured Party under
its Second Priority Debt Facility, acknowledges that (a) a portion of the Senior
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 Priority Debt Documents and
the Senior Obligations may be amended, restated, amended and restated,
supplemented or otherwise modified, and the Senior Obligations, or a portion
thereof, may be Refinanced from time to time and (c) the aggregate amount of the
Senior Obligations may be increased, in each case, without notice to or consent
by the Second Priority Representatives or the Second Priority Secured Parties
and without affecting the provisions hereof, except as otherwise expressly set
forth herein. The Lien priorities provided for in Section 2.01 shall not be
altered or otherwise affected by any amendment, restatement, amendment and
restatement, supplement or other modification, or any Refinancing, of either the
Senior Obligations or the Second Priority Debt Obligations, or any portion
thereof. As between the Borrowers and the other Grantors and the Second Priority
Secured Parties, the foregoing provisions will not limit or otherwise affect the
obligations of the Borrowers or any other Grantor contained in any Second
Priority Debt Document with respect to the incurrence of additional Senior
Obligations.

 

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SECTION 2.03. Prohibition on Contesting Liens. (a) Each of the Second Priority
Representatives, for itself and on behalf of each Second Priority Secured 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
Obligations held (or purported to be held) by or on behalf of any Senior
Priority Representative or any of the other Senior Priority Secured Parties or
any other agent or trustee there-for in any Senior Priority Collateral or the
allowability of any claims asserted with respect to any Senior Obligations in
any proceeding (including any Insolvency or Liquidation Proceeding) and (b) each
Senior Priority Representative, for itself and on behalf of each Senior Priority
Secured Party under its Senior 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 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 Secured Parties in the Second Priority Collateral or the allowability
of any claims asserted with respect to any Second Priority Debt Obligations in
any proceeding (including any Insolvency or Liquidation Proceeding).
Notwithstanding the foregoing, no provision in this Agreement shall be construed
to prevent or impair the rights of any Senior Priority 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 Priority Debt
Documents.

SECTION 2.04. No New Liens. The parties hereto agree that, so long as the
Discharge of Senior Obligations has not occurred, (a) none of the Grantors shall
grant any additional Liens on any asset or property of any Grantor to secure any
Second Priority Debt Obligation unless it has also granted, or concurrently
therewith also grants, a Lien on such asset or property of such Grantor to
secure the Senior Obligations; and (b) if any Second Priority Representative or
any Second Priority Secured Party shall hold any Lien on any assets or property
of any Grantor securing any Second Priority Debt Obligations that are not also
subject to the Liens securing all Senior Obligations under the Senior Priority
Collateral Documents, such Second Priority Representative or Second Priority
Secured Party (i) shall notify the Designated Senior Representative promptly
upon becoming aware thereof and, unless such Grantor shall promptly also grant a
similar Lien on such assets or property to each Senior Priority Representative
as security for the Senior Obligations, shall assign such Lien to the Designated
Senior Representative as security for all Senior Obligations for the benefit of
the Senior Priority Secured Parties (but may retain a junior Lien on such assets
or property subject to the terms hereof) and (ii) until such assignment or such
grant of a similar Lien to each Senior Priority Representative, shall be deemed
to hold and have held such Lien for the benefit of each Senior Priority
Representative and the other Senior Priority Secured Parties as security for the
Senior Obligations; provided that this provision will not be violated with
respect to any particular series of Additional Senior Priority Debt Obligations
if the applicable trustee, administrative agent, collateral agent, security
agent or similar agent under such Additional Senior Priority Debt Facility that
is named as the Representative in respect of such Additional Senior Priority
Debt Facility in the applicable Joinder Agreement is given a reasonable
opportunity to accept a Lien on any asset or property and either the Lead
Borrower or such trustee or agent states in writing that the Senior Priority
Debt Documents in respect thereof prohibit such trustee or agent from accepting
a Lien on such asset or property or such trustee or agent otherwise expressly
declines to accept a Lien on such asset or

 

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property. To the extent that the provisions of the immediately preceding
sentence are not complied with for any reason, without limiting any other right
or remedy available to any Senior Priority Representative or any other Senior
Priority Secured Party, each Second Priority Representative agrees, for itself
and on behalf of the other Second Priority Secured Parties for which it has been
named the Representative, that any amounts received by or distributed to any
Second Priority Secured Party pursuant to or as a result of any Lien granted in
contravention of this Section 2.04 shall be subject to Section 4.01 and
Section 4.02.

SECTION 2.05. Perfection of Liens. Except for the limited agreements of the
Senior Priority Representatives pursuant to Section 5.05 hereof, none of the
Senior Priority Representatives or the Senior Priority 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
or the Second Priority Secured Parties. The provisions of this Agreement are
intended solely to govern the respective Lien priorities as between the Senior
Priority Secured Parties and the Second Priority Secured Parties and shall not
impose on the Senior Priority Representatives, the Senior Priority Secured
Parties, the Second Priority Representatives, the Second Priority Secured
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.

ARTICLE 3

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
the Borrowers or any other Grantor, (i) neither any Second Priority
Representative nor any Second Priority Secured Party will (x) exercise or seek
to exercise any rights or remedies (including setoff or any assignment of claims
pursuant to the FACA) 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 other action brought
with respect to the Shared Collateral or any other Senior Priority Collateral by
any Senior Priority Representative or any Senior Priority Secured Party in
respect of the Senior Obligations, the exercise of any right by any Senior
Priority Representative or any Senior Priority Secured Party (or any agent or
sub-agent on their behalf) in respect of the Senior Obligations under any
lockbox agreement, control agreement, landlord waiver or bailee’s letter or
similar agreement or arrangement to which any Senior Priority Representative or
any Senior Priority 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 Priority Debt
Documents or otherwise in respect of the Senior Priority Collateral or the
Senior Obligations, or (z) object to the forbearance by the Senior Priority
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 Obligations and (ii) except as otherwise
provided herein, the Senior Priority Representatives and the Senior Priority
Secured Parties shall have the exclusive right to enforce rights, exercise
remedies (including

 

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setoff and the right to credit bid their debt) and make determinations regarding
the release, disposition or restrictions with respect to the Shared Collateral
or any other Senior Priority Collateral without any consultation with or the
consent of any Second Priority Representative or any Second Priority Secured
Party; provided, however, that (A) in any Insolvency or Liquidation Proceeding
commenced by or against the Borrowers or any other Grantor, any Second Priority
Representative may file a claim, proof of claim, or statement of interest with
respect to the Second Priority Debt Obligations under its Second Priority Debt
Facility in a manner that is consistent with the terms and conditions of this
Agreement, (B) any Second Priority Representative may take any action (not
adverse to the prior Liens on the Shared Collateral securing the Senior
Obligations or the rights of the Senior Priority Representatives or the Senior
Priority 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 and
subject to the restrictions contained in Section 5.04, (D) any Second Priority
Representative may exercise the rights and remedies provided for in Section 6.03
and the Second Priority Secured 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
that is not permitted by this Agreement of the claims or Liens of the Second
Priority Secured Parties or the avoidance of any Second Priority Lien to the
extent not inconsistent with the terms of this Agreement, (E) any Second
Priority Secured Party may (subject to the provisions of Section 6.10(b)) vote
on any plan of reorganization, plan of liquidation, agreement for composition,
or other type of plan of arrangement proposed in or in connection with any
Insolvency or Liquidation Proceeding that conforms to the terms and conditions
of this Agreement, and (F) from and after the Second Priority Enforcement Date,
but subject to the terms of the ABL Intercreditor Agreement with respect to the
ABL Collateral, the Designated Second Priority Representative (or such other
Person, if any, as is so authorized under the Second Lien Intercreditor
Agreement) 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), but only so long as
(1) a Senior Priority Representative has not commenced and is not diligently
pursuing any enforcement action with respect to a material portion of Shared
Collateral or (2) any Grantor which has granted a security interest in any
Shared Collateral is not then a debtor under or with respect to (or otherwise
subject to) any Insolvency or Liquidation Proceeding. In exercising rights and
remedies with respect to the Senior Priority Collateral, the Senior Priority
Representatives and the Senior Priority Secured Parties may enforce the
provisions of the Senior Priority 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. Such exercise and enforcement shall include
the rights of an agent appointed by them 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 or any other applicable Law of any applicable
jurisdiction and of a secured creditor under Bankruptcy Laws of any applicable
jurisdiction.

 

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(b) So long as the Discharge of Senior Obligations has not occurred, except as
expressly provided in the proviso to clause (ii) of Section 3.01(a) but subject
to Section 4.01, each Second Priority Representative, on behalf of itself and
each Second Priority Secured Party under its Second Priority Debt Facility,
agrees that it will not 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 Secured
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
Secured Party under its Second Priority Debt Facility, agrees that neither such
Second Priority Representative nor any such Second Priority Secured Party will
take any action that would hinder or delay any exercise of remedies undertaken
by any Senior Priority Representative or any Senior Priority Secured Party with
respect to the Shared Collateral under the Senior Priority Debt Documents,
including any 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 Secured Party under its Second Priority Debt
Facility, hereby waives any and all rights it or any such Second Priority
Secured Party may have as a junior lien creditor or otherwise to object to the
manner in which the Senior Priority Representatives or the Senior Priority
Secured Parties seek to enforce or collect the Senior Obligations or the Liens
granted on any of the Senior Priority Collateral, regardless of whether any
action or failure to act by or on behalf of any Senior Priority Representative
or any other Senior Priority Secured Party is adverse to the interests of the
Second Priority Secured 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 Priority Representatives or the Senior Priority Secured Parties with
respect to the Senior Priority Collateral as set forth in this Agreement and the
Senior Priority Debt Documents.

(e) Until the Discharge of Senior Obligations, except as expressly provided in
the proviso in clause (ii) of 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
(or any Person authorized by it) 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 Secured 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 shall impair the
right of any Second Priority Representative or other agent or trustee acting on
behalf of the Second Priority Secured 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 Secured Parties or the Second Priority Debt Obligations.

 

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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 Secured 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 Priority
Secured Parties and the Senior Priority 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 Secured Party, contrary to this Agreement, in any way take,
attempt to take 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, any Senior Priority Representative or other Senior Priority Secured
Party (in its or their own name or in the name of the Borrowers or any other
Grantor) or the Borrowers may obtain relief against such Second Priority
Representative or such Second Priority Secured Party by injunction, specific
performance or other appropriate equitable relief. Each Second Priority
Representative, on behalf of itself and each Second Priority Secured Party under
its Second Priority Debt Facility, hereby (i) agrees that the Senior Priority
Secured Parties’ damages from the actions of the Second Priority Representatives
or any Second Priority Secured Party may at that time be difficult to ascertain
and may be irreparable and waives any defense that the Borrowers, any other
Grantor or the Senior Priority 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 Priority Representative or any other Senior Priority
Secured Party.

ARTICLE 4

PAYMENTS

SECTION 4.01. Application of Proceeds. Subject to the ABL Intercreditor
Agreement, so long as the Discharge of Senior Obligations has not occurred and
regardless of whether an Insolvency or Liquidation Proceeding has been
commenced, the Shared Collateral or Proceeds thereof received in connection with
the sale or other disposition of, or collection on, such Shared Collateral upon
the exercise of remedies (including any money or other funds from any
Governmental Authority as a result of the compliance by the Grantors with the
Federal Assignment of Claims Act (“FACA”)) shall be applied by the Designated
Senior Representative to the Senior Obligations in such order as specified in
the relevant Senior Priority Debt Documents and, if applicable, the Equal
Priority Intercreditor Agreement, until the Discharge of Senior Obligations has
occurred. Upon the Discharge of Senior Obligations, each applicable Senior
Priority Representative shall deliver promptly to the Designated Second Priority
Representative any Shared Collateral or Proceeds thereof (including any money or
other funds from any Governmental

 

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Authority as a result of the compliance by the Grantors with FACA) held by it in
the same form as received, with any necessary endorsements, or as a court of
competent jurisdiction may otherwise direct, to be applied by the Designated
Second Priority Representative to the Second Priority Debt Obligations in such
order as specified in the relevant Second Priority Debt Documents and, if
applicable, the Second Lien Intercreditor Agreement.

SECTION 4.02. Payments Over. So long as the Discharge of Senior Obligations has
not occurred, any Shared Collateral or Proceeds thereof received by any Second
Priority Representative or any Second Priority Secured Party in connection with
the exercise of any right or remedy (including setoff) relating to the Shared
Collateral, in any Insolvency or Liquidation Proceeding, or otherwise in
contravention of this Agreement 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 Priority Secured Parties in the same form as received,
with any necessary endorsements, or as a court of competent jurisdiction may
otherwise direct. 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 Secured Party. This authorization is
coupled with an interest and is irrevocable.

ARTICLE 5

OTHER AGREEMENTS

SECTION 5.01. Releases.

(a) Each Second Priority Representative, for itself and on behalf of each Second
Priority Secured Party under its Second Priority Debt Facility, agrees that, in
the event of a Disposition of any specified item of Shared Collateral (including
all or substantially all of the Equity Interests of any Subsidiary of
Holdings) (i) in connection with the exercise of remedies in respect of
Collateral by a Senior Priority Representative or (ii) if not in connection with
the exercise of remedies in respect of Collateral by the Designated Senior
Representative, so long as such Disposition is permitted by the terms of the
Second Priority Debt Documents and the Senior Priority Debt Documents and, in
the case of this clause (ii) other than in connection with the Discharge of
Senior Obligations, the Liens granted to the Second Priority Representatives and
the Second Priority Secured Parties upon such Shared Collateral (but not on the
Proceeds thereof that were not applied to the payment of Senior Obligations) to
secure Second Priority Debt Obligations, shall terminate and be released,
automatically and without any further action, concurrently with the termination
and release of all Liens granted upon such Shared Collateral to secure Senior
Obligations. Upon delivery to a Second Priority Representative of an Officer’s
Certificate stating that any such termination and release of Liens securing the
Senior Obligations has become effective (or shall become effective concurrently
with such termination and release of the Liens granted to the Second Priority
Secured Parties and the Second Priority Representatives) and any necessary or
proper instruments of termination or release prepared by the Borrowers or any
other Grantor, such Second Priority Representative will promptly execute,
deliver or acknowledge, at the Lead Borrower’s sole cost and expense and without
any representation or warranty, such instruments to evidence such termination
and release of the Liens. 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 Secured 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.

 

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(b) Each Second Priority Representative, for itself and on behalf of each Second
Priority Secured Party under its Second Priority Debt Facility, 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 Secured 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
Secured Party under its Second Priority Debt Facility, hereby consents to the
application, whether prior to or after an event of default under any Senior
Priority Debt Document of Proceeds of Shared Collateral to the repayment of
Senior Obligations pursuant to the Senior Priority 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 Secured
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 Priority Collateral Document and a
Second Priority Collateral Document each require any Grantor to (i) make payment
in respect of any item of Shared Collateral, (ii) deliver or afford control over
any item of Shared Collateral to, or deposit any item of Shared Collateral with,
(iii) 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, commodities intermediary or other Person
acting in a similar capacity to agree to comply, in respect of any item of
Shared 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 Secured 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.

 

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SECTION 5.02. Insurance and Condemnation Awards. Unless and until the Discharge
of Senior Obligations has occurred, subject in each case to the rights of the
Grantors under, and any limitations under, the Senior Priority Debt Documents,
the Designated Senior Representative and the Senior Priority Secured Parties
shall have the sole and exclusive right (a) to adjust settlement for any
insurance policy covering the Shared Collateral in the event of any loss
thereunder and (b) to approve any award granted in any condemnation or similar
proceeding affecting the Shared Collateral. Unless and until the Discharge of
Senior Obligations has occurred, and subject to the rights of the Grantors
under, and any limitations under, the Senior Priority Debt Documents and the
Second Priority Debt Documents, 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 Priority Secured Parties pursuant to
the terms of the Senior Priority 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 Secured Parties
pursuant to the terms of the applicable Second Priority Debt Documents and
(iii) third, if no Second Priority Debt Obligations are outstanding, 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 Secured 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 (or after the Discharge of Senior Obligations,
the Designated Second Priority Representative) to receive such amounts in
accordance with the terms of Section 4.02.

SECTION 5.03. Certain Amendments.

(a) No Second Priority Collateral Document may be amended, supplemented or
otherwise modified or entered into to the extent such amendment, supplement or
modification, or the terms of any new Second Priority Collateral Document, would
be prohibited by or conflict with any of the terms of this Agreement. The Lead
Borrower agrees to deliver to the Designated Senior Representative copies of
(i) any amendments, supplements or other modifications to the Second Priority
Collateral Documents and (ii) any new Second Priority Collateral Documents
promptly after effectiveness thereof. Each Second Priority Representative, for
itself and on behalf of each Second Priority Secured Party under its Second
Priority Debt Facility, agrees that each Second Priority Collateral Document
under its Second Priority Debt Facility shall 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 Priority Secured Parties (as defined in
the First Lien/Second Lien Intercreditor Agreement referred to below), including
liens and security interests granted to Bank of America, N.A., as collateral
agent, pursuant to or in connection with the First Lien Credit Agreement dated
as of October 20, 2016 (as amended, restated, amended and restated, supplemented
or otherwise modified from time to time), among Shay Intermediate Holding II
Corporation, PAE Holding Corporation, the lenders from time to time party
thereto, Bank of America,

 

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N.A., as administrative agent and collateral agent, and the other parties
thereto, and (ii) the exercise of any right or remedy by the Second Priority
Representative or any other secured party hereunder is subject to the
limitations and provisions of the First Lien/Second Lien Intercreditor Agreement
dated as of October 20, 2016 (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “First Lien/Second
Lien Intercreditor Agreement”), among Bank of America, N.A., as First Lien
Collateral Agent, Bank of America, N.A., as Initial Second Lien Representative,
PAE Holding Corporation and Shay Intermediate Holding II Corporation. 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.”

(b) In the event that each applicable Senior Priority Representative and/or the
Senior Priority Secured Parties enter into any amendment, waiver or consent in
respect of any of the Senior Priority Collateral Documents for the purpose of
adding to or deleting from, or waiving or consenting to any departures from any
provisions of, any Senior Priority Collateral Document or changing in any manner
the rights of the Senior Priority Representatives, the Senior Priority Secured
Parties, the Borrowers or any other Grantor thereunder (including the release of
any Liens in Senior Priority Collateral) in a manner that is applicable to all
Senior Priority Debt 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 Secured Party and without any action by
any Second Priority Representative, the Borrowers or any other Grantor;
provided, however, that (x) no such amendment, waiver or consent shall
(i) remove assets subject to the Lien of any Second Priority Collateral
Document, except as provided for in Section 5.01(a) or (ii) impose duties that
are adverse on any Second Priority Representative without its prior written
consent and (y) written notice of such amendment, waiver or consent shall have
been given by the Lead Borrower to each Second Priority Representative within 10
Business Days after the effectiveness of such amendment, waiver or consent
(although the failure to give any such notice shall in no way affect the
effectiveness of such amendment, waiver or consent).

(c) Each of the Senior Priority Debt Documents may be amended, restated, amended
and restated, waived, supplemented or otherwise modified in accordance with its
terms, and the indebtedness under any Senior Priority Debt Document may be
Refinanced, in each case, without the consent of any Second Priority
Representative or Second Priority Secured Party, all without affecting the Lien
priorities provided for herein or the other provisions hereof; provided,
however, that, without the consent of the Second Priority Representatives, no
such amendment, restatement, supplement, modification or Refinancing (or
successive amendments, restatements, supplements, modifications or Refinancings)
shall contravene any provision of this Agreement.

(d) Each of the Second Priority Debt Facilities may be amended, restated,
waived, supplemented or otherwise modified in accordance with its terms, and the
indebtedness under the Second Priority Debt Facilities may be Refinanced without
the consent of any Senior Priority Representative or Senior Priority Secured
Party; provided, however, that, without the consent of (x) until the Discharge
of First Lien Credit Agreement Obligations, the First Lien Collateral Agent,
acting with the consent of the Required Lenders (as such term is defined in the

 

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First Lien Credit Agreement) and (y) each other Senior Priority Representative
(acting with the consent of the requisite holders of each series of Additional
Senior Priority Debt), no such amendment, restatement, supplement or
modification shall (1) contravene any provision of this Agreement, or (2) reduce
the capacity to incur Indebtedness 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 Priority Debt Documents on the day of any such amendment, restatement,
supplement, modification or Refinancing.

SECTION 5.04. Rights As Unsecured Creditors. The Second Priority Representatives
and the Second Priority Secured Parties may exercise rights and remedies as
unsecured creditors against the Borrowers 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, or are not otherwise inconsistent
with, any express provision of this Agreement. Nothing in this Agreement shall
prohibit the receipt by any Second Priority Representative or any Second
Priority Secured 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 is not the direct or indirect result of the exercise by a Second
Priority Representative or any Second Priority Secured Party of rights or
remedies as a secured creditor in respect of Shared Collateral. In the event any
Second Priority Representative or any Second Priority Secured 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 Priority
Representatives or the Senior Priority Secured Parties may have with respect to
the Senior Priority Collateral.

SECTION 5.05. Gratuitous Bailee for Perfection.

(a) Each Senior Priority 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 Priority 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, or with respect to any Shared Collateral subject to any other
arrangement set forth in Section 5.01(d), the applicable Senior 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 and 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.

 

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(b) In the event that any Senior Priority Representative (or its agents or
bailees), or after the Discharge of Senior Obligations, any Second Priority
Representative, has Lien filings against Intellectual Property that is part of
the Shared Collateral that are necessary for the perfection of Liens in such
Shared Collateral, such Senior Priority Representative, or after the Discharge
of Senior Obligations, such Second Priority Representative, agrees to hold such
Liens as sub-agent and gratuitous bailee for the relevant Second Priority
Representatives and any assignee thereof, solely for the purpose of perfecting
the security interest granted in such Liens pursuant to the relevant Second
Priority Collateral Documents, subject to the terms and conditions of this
Section 5.05.

(c) Except as otherwise specifically provided herein, until the Discharge of
Senior Obligations has occurred, the Senior Priority Representatives and the
Senior Priority Secured Parties shall be entitled to deal with the Pledged or
Controlled Collateral in accordance with the terms of the Senior Priority 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
Secured Parties with respect to the Pledged or Controlled Collateral shall at
all times be subject to the terms of this Agreement.

(d) The Senior Priority Representatives and the Senior Priority Secured Parties
shall have no obligation whatsoever to the Second Priority Representatives or
any Second Priority Secured 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 Priority Representatives (and after the Discharge
of Senior Obligations, the Second Priority 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.

(e) The Senior Priority 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 Secured Party, and each Second Priority Representative, for
itself and on behalf of each Second Priority Secured Party under its Second
Priority Debt Facility, hereby waives and releases the Senior Priority
Representatives from all claims and liabilities arising pursuant to the Senior
Priority Representatives’ roles under this Section 5.05 as sub-agents and
gratuitous bailees with respect to the Shared Collateral.

(f) Upon the Discharge of Senior Obligations, each applicable Senior Priority
Representative shall, at the Lead Borrower’s sole cost and expense, (i) (A)
deliver to the Designated Second Priority Representative, to the extent that it
is legally permitted to do so and as the Grantors or Designated Second Priority
Representative may direct, all Shared Collateral, including all Proceeds
thereof, held or controlled by such Senior 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 to the Designated Second Priority
Representative, to the extent that it is legally permitted to do so and as the
Grantors or the Designated Second Priority Representative may direct, its rights
under any landlord waiver or bailee’s letter or any similar agreement or
arrangement granting it rights or access to

 

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Shared Collateral, (B) if not legally permitted or no direction is given and if
prior to discharge of the Second Priority Debt Obligations, deliver such Shared
Collateral and assign its rights in respect thereof as a court of competent
jurisdiction may otherwise direct or (C) if the Second Priority Debt Obligations
have been discharged, deliver such Shared Collateral to the Grantors and
terminate its rights therein as directed by the Grantors; (ii) notify any
applicable insurance carrier that it is no longer entitled to be an additional
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 Priority Representative is entitled to approve any awards
granted in such proceeding. The Borrowers shall take such further action as is
required to effectuate the transfer contemplated hereby. The Senior Priority
Representatives have no obligations to follow instructions from any Second
Priority Representative or any other Second Priority Secured Party in
contravention of this Agreement. No Senior Priority Representative shall have
any liability to any Second Priority Secured Party.

(g) None of the Senior Priority Representatives nor any of the other Senior
Priority Secured Parties shall be required to marshal any present or future
collateral security for any obligations of the Borrowers or any other Grantor to
any Senior Priority Representative or any Senior Priority Secured Party under
the Senior Priority 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.

(h) In the event any Senior Priority Representative receives any money or other
funds from any Governmental Authority as a result of the compliance by the
Grantors with FACA, then such Senior Priority Representative agrees to also hold
all such money and funds as agent and bailee for the benefit of all Secured
Parties and all such money and funds shall be applied in accordance with
Section 4.01 of this Agreement. Upon the Discharge of Senior Obligations, at the
request of the Designated Second Priority Representative, the Senior Priority
Representatives shall cooperate with the Designated Second Priority
Representative to assign any government contracts that are at such time assigned
to any such Senior Priority Representative in compliance with the FACA to the
Designated Second Priority Representative or any person authorized by the
Designated Second Priority Representative.

SECTION 5.06. When Discharge of Senior Obligations Deemed To Not Have Occurred.
If, at any time substantially concurrently with or after the Discharge of Senior
Obligations has occurred, the Borrowers or any other Grantor consummates any
Refinancing or incurs any Senior Obligations (other than in respect of the
payment of indemnities surviving the Discharge of Senior Obligations), then such
Discharge of Senior 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 Obligations) and the applicable
agreement governing such Senior Obligations shall automatically be treated as a
Senior Priority 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 Priority Representative for all purposes
of this Agreement; provided that

 

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such Senior Priority Representative shall have become a party to this Agreement
pursuant to Section 8.09. Upon receipt of notice of such incurrence (including
the identity of the new Senior Priority Representative), each Second Priority
Representative (including the Designated Second Priority Representative) shall
promptly (a) enter into such documents and agreements (at the expense of the
Borrowers), including amendments, supplements or modifications to this
Agreement, as the Lead Borrower or such new Senior Priority Representative shall
reasonably request in writing in order to provide the new Senior Priority
Representative the rights of a Senior Priority Representative contemplated
hereby and (b) deliver to such Senior Priority 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 to such Senior
Priority Representative, to the extent that it is legally permitted to do so,
its rights under any landlord waiver or bailee’s letter or any similar agreement
or arrangement granting it rights or access to Shared Collateral.

ARTICLE 6

INSOLVENCY OR LIQUIDATION PROCEEDINGS

SECTION 6.01. Financing and Sale Issues. Until the Discharge of Senior
Obligations has occurred, if the Borrowers or any other Grantor shall be subject
to any Insolvency or Liquidation Proceeding, then each Second Priority
Representative, for itself and on behalf of each Second Priority Secured Party
under its Second Priority Debt Facility, agrees that (A) if any Senior Priority
Representative 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 Borrowers’ 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”), it will raise no objection to and will not otherwise contest such
sale, use or lease of such cash or other collateral or such DIP Financing and,
except to the extent permitted by the proviso in clause (ii) of Section 3.01(a)
and 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 to or have the same priority as the Liens securing
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, so long as the sum of (a) the maximum
aggregate principal amount of Indebtedness that may be outstanding from time to
time under such DIP Financing (including any such portion thereof that
constitutes rollover of loans under the Senior Priority Debt Documents) plus,
without duplication, (b) the aggregate principal amount of loans and the
aggregate face amount of letters of credit issued but not reimbursed under the
Senior Priority Debt Documents does not exceed 115% of the greater of (x)
$600,000,000 and (y) the aggregate principal amount of loans under the Senior
Priority Debt Documents outstanding at the time the DIP Financing is entered
into, (y) any “carve-out” for professional and United States Trustee fees agreed
to by the Senior Priority Representatives, and (z) all adequate protection liens
granted to the Senior Priority Secured Parties, (B) it will raise no objection
to and will not otherwise contest any motion for relief from the automatic stay
or any other stay in any Insolvency or Liquidation Proceedings or from any
injunction against foreclosure or enforcement in respect of Senior Obligations
or the Senior Priority Collateral made by

 

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any Senior Priority Representative or any other Senior Priority Secured Party,
(C) it will raise no objection to and will not otherwise contest any lawful
exercise by any Senior Priority Secured Party of the right to credit bid Senior
Obligations at any foreclosure or other sale of Senior Priority Collateral,
including pursuant to Section 363(k) of the Bankruptcy Code or any similar
provision of any other Bankruptcy Law or other applicable law, (D) it will raise
no objection to and will not otherwise contest any other request for judicial
relief made in any court by any Senior Priority Secured Party relating to the
lawful enforcement of any Lien on Senior Priority Collateral, (E) it will raise
no objection to and will not otherwise contest any election made by any Senior
Priority Representative or any other Senior Priority Secured Party of the
application of Section 1111(b) of the Bankruptcy Code or any similar provision
of any other Bankruptcy Law with respect to any of the Shared Collateral, and
(F) it will raise no objection to and will not otherwise contest or oppose any
Disposition (including pursuant to Section 363 of the Bankruptcy Code or any
similar provision of any other Bankruptcy Law) of assets of any Grantor for or
to which any Senior Priority Representative has consented or not objected that
provides, to the extent such Disposition is to be free and clear of Liens, that
the Liens securing the Senior 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; provided, that the Second Priority
Secured Parties may assert any objection to the proposed bidding and related
sale procedures to be utilized in connection with such Disposition that may be
raised by an unsecured creditor of any Grantor; provided, further, that the
Second Priority Secured Parties are not deemed to have waived any rights to
credit bid on the Shared Collateral in any such sale or disposition in
accordance with Section 363(k) of the Bankruptcy Code (or any similar provision
under any other applicable Bankruptcy Law), so long as any such credit bid
provides for the payment in full in cash of the Senior Obligations. Each Second
Priority Representative, for itself and on behalf of each Second Priority
Secured Party under its Second Priority Debt Facility, agrees that notice
received three Business Days prior to the entry of an order approving any usage
of cash or other collateral described in this Section 6.01 or approving any DIP
Financing described in this Section 6.01 shall be adequate notice.

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 Secured Party under its Second Priority Debt
Facility, agrees that none of them shall 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 Secured Party under its Second
Priority Debt Facility, agrees that none of them shall object to, contest or
support any other Person objecting to or contesting (a) any request by any
Senior Priority Representative or any Senior Priority Secured Parties for
adequate protection in any form, (b) any objection by any Senior Priority
Representative or any Senior Priority Secured Parties to any motion, relief,
action or proceeding based on any Senior Priority Representative’s or Senior
Priority Secured Party’s claiming a lack of adequate protection or (c) the
allowance and/or payment of pre- and/or post-petition interest, fees, expenses
or other amounts of any Senior Priority Representative or any other Senior
Priority Secured Party under Section 506(b) or 506(c) of the Bankruptcy Code or
any similar provision of

 

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any other Bankruptcy Law (as adequate protection or otherwise). Notwithstanding
anything contained in this Section 6.03 or in Section 6.01, in any Insolvency or
Liquidation Proceeding, (i) if the Senior Priority Secured Parties (or any
subset thereof) are granted adequate protection in the form of a Lien on
additional or replacement collateral and/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
Secured Party under its Second Priority Debt Facility, may seek or request
adequate protection in the form of a Lien on such additional or replacement
collateral and/or a superpriority claim (as applicable), which Lien and/or
superpriority claim (as applicable) is subordinated to the Liens securing, and
claims with respect to, all Senior Obligations and such DIP Financing (and all
obligations relating thereto) and any other Liens or claims granted to the
Senior Priority Secured Parties as adequate protection, on the same basis as the
other Liens securing, and claims with respect to, the Second Priority Debt
Obligations are so subordinated to the Liens securing, and claims with respect
to, Senior Obligations under this Agreement and (ii) in the event any Second
Priority Representatives, for themselves and on behalf of the Second Priority
Secured 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 Lien on additional or replacement collateral
and/or a superpriority claim, then such Second Priority Representatives, for
themselves and on behalf of each Second Priority Secured Party under their
Second Priority Debt Facilities, agree that each Senior Priority Representative
shall also be granted a senior Lien on such additional or replacement collateral
as security and adequate protection for the Senior Obligations and any such DIP
Financing and/or a superpriority claim (as applicable) and that any Lien on such
additional or replacement collateral securing or providing adequate protection
for the Second Priority Debt Obligations and/or superpriority claim (as
applicable) shall be subordinated to the Liens on such collateral securing, and
claims with respect to, the Senior Obligations and any such DIP Financing (and
all obligations relating thereto) and any other Liens or claims granted to the
Senior Priority Secured Parties as adequate protection on the same basis as the
other Liens securing, and claims with respect to, the Second Priority Debt
Obligations are so subordinated to such Liens securing, and claims with respect
to, Senior Obligations under this Agreement. Without limiting the generality of
the foregoing, to the extent that the Senior Priority Secured Parties are
granted adequate protection in the form of payments in the amount of current
post-petition fees and expenses, and/or other cash payments, then the Second
Priority Representative, for itself and on behalf of each Second Priority
Secured Party under its Second Priority Debt Facility, shall not be prohibited
from seeking adequate protection in the form of payments in the amount of
current post-petition incurred fees and expenses, and/or other cash payments (as
applicable), subject to the right of the Senior Priority Secured Parties to
object to the reasonableness of the amounts of fees and expenses or other cash
payments so sought by the Second Priority Secured Parties.

SECTION 6.04. Preference Issues. If any Senior Priority 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 Borrowers or any
other Grantor (or any trustee, receiver or similar Person therefor), because the
payment of such amount was avoided as or otherwise declared to be fraudulent or
preferential in any respect or for any other reason (any such 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

 

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deemed to be outstanding as if such payment had not occurred and the Senior
Priority Secured Parties shall be entitled to the benefits of this Agreement
until a Discharge of Senior Obligations with respect to all such recovered
amounts. If this Agreement shall have been terminated prior to such Recovery,
this Agreement shall be reinstated in full force and effect, and such prior
termination shall not diminish, release, discharge, impair or otherwise affect
the obligations of the parties hereto. Each Second Priority Representative, for
itself and on behalf of each Second Priority Secured 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 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
Secured Party under its Second Priority Debt Facility, acknowledges and agrees
that (a) the grants of Liens pursuant to the Senior Priority 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, plan of liquidation, agreement for
composition, or other type of plan of arrangement proposed, confirmed, or
adopted in an Insolvency or Liquidation Proceeding. To further effectuate the
intent of the parties as provided in the immediately preceding sentence, if it
is held that any claims of the Senior Priority Secured Parties and the Second
Priority Secured 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 Secured Party under its Second Priority Debt Facility,
hereby acknowledges and agrees that all distributions from the Shared Collateral
shall be made as if there were 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
Secured Parties), the Senior Priority Secured Parties shall be entitled to
receive, in addition to amounts distributed to them in respect of principal,
pre-petition interest, fees, and expenses, and other claims, all amounts owing
in respect of post-petition interest, fees, and expenses (whether or not allowed
or allowable under Section 506(b) of the Bankruptcy Code (or any similar
provision of any other Bankruptcy Law) or otherwise in such Insolvency or
Liquidation Proceeding) before any distribution from the Shared Collateral is
made in respect of the Second Priority Debt Obligations, with each Second
Priority Representative, for itself and on behalf of each Second Priority
Secured Party under its Second Priority Debt Facility, hereby acknowledging and
agreeing 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 Secured Parties).

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

 

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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 thereof 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 Secured 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
Secured Party under its Second Priority Debt Facility, agrees not to assert any
such rights without the prior written consent of each Senior Priority
Representative, provided that if requested by any Senior Priority
Representative, such Second Priority Representative shall timely exercise such
rights in the manner requested by the Senior Priority 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 Secured 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 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 Securities; Voting.

(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, plan of liquidation,
agreement for composition, or other type of plan of arrangement proposed,
confirmed, or adopted in an Insolvency or Liquidation Proceeding, 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 Secured 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, plan of liquidation,
agreement for composition, or other type of plan of arrangement that is
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Agreement. Without limiting the generality of the foregoing, other than with the
prior written consent of the Designated Senior Representative, no Second
Priority Secured Party (whether in the capacity of a secured creditor or an
unsecured creditor) shall vote in favor of any plan unless such plan
(i) satisfies the Senior Obligations in full in cash or (ii) is proposed or
supported by the number of Senior Priority Secured Parties required under
Section 1126(c) of the Bankruptcy Code or any similar provision of any other
Bankruptcy Law.

SECTION 6.11. Post-Petition Interest.

(a) Neither any Second Priority Representative nor any other Second Priority
Secured Party shall oppose or seek to challenge any claim by any Senior Priority
Representative or any other Senior Priority Secured Party for allowance in any
Insolvency or Liquidation Proceeding of Senior Obligations consisting of claims
for post-petition interest, fees, or expenses under Section 506(b) of the
Bankruptcy Code or any similar provision of any other Bankruptcy Law or
otherwise.

(b) No Senior Priority Representative nor any other Senior Priority Secured
Party shall oppose or seek to challenge any claim by any Second Priority
Representative or any other Second Priority Secured Party for allowance in any
Insolvency or Liquidation Proceeding of Second Priority Debt Obligations
consisting of claims for post-petition interest, fees, or expenses under
Section 506(b) of the Bankruptcy Code or any similar provision of any other
Bankruptcy Law or otherwise, to the extent of the value of the Lien of the
Second Priority Representatives on behalf of the Second Priority Secured Parties
on the Shared Collateral (after taking into account the Senior Obligations).

ARTICLE 7

RELIANCE; ETC.

SECTION 7.01. Reliance. The consent by the Senior Priority Secured Parties to
the execution and delivery of the Second Priority Debt Documents to which the
Senior Priority Secured Parties have consented and all loans and other
extensions of credit made or deemed made on and after the date hereof by the
Senior Priority Secured Parties to the Borrowers or any other Grantor 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 Secured
Party under its Second Priority Debt Facility, acknowledges that it and such
Second Priority Secured Parties have, independently and without reliance on any
Senior Priority Representative or other Senior Priority Secured Party, and based
on documents and information deemed by them appropriate, made their own credit
analysis and decision to enter 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 they will continue to make their own credit
decision in taking or not taking any action under the Second Priority Debt
Documents or this Agreement.

SECTION 7.02. No Warranties or Liability. Each Second Priority Representative,
on behalf of itself and each Second Priority Secured Party under its Second
Priority Debt Facility, acknowledges and agrees that neither any Senior Priority
Representative nor any other Senior Priority Secured Party has made any express
or implied representation or warranty, including with respect to the execution,
validity, legality, completeness, collectibility or enforceability

 

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of any of the Senior Priority Debt Documents, the ownership of any Shared
Collateral or the perfection or priority of any Liens thereon. The Senior
Priority Secured Parties will be entitled to manage and supervise their
respective loans and extensions of credit under the Senior Priority Debt
Documents in accordance with law and as they may otherwise, in their sole
discretion, deem appropriate, and the Senior Priority 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 Secured Parties
have in the Shared Collateral or otherwise, except as otherwise provided in this
Agreement. Neither any Senior Priority Representative nor any other Senior
Priority Secured Party shall have any duty to any Second Priority Representative
or Second Priority Secured 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 the Borrowers or any other Grantor (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 Priority Representatives, the Senior Priority Secured
Parties, the Second Priority Representatives and the Second Priority Secured
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
collectibility 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.

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

(a) any lack of validity or enforceability of any Senior Priority 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 Priority Debt Document or of the
terms of any 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
the Borrowers or any other Grantor; or

 

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

ARTICLE 8

MISCELLANEOUS

SECTION 8.01. Conflicts. Subject to Sections 8.18 and 8.23, in the event of any
conflict between the provisions of this Agreement and the provisions of any
Senior Priority Debt Document or any Second Priority Debt Document, the
provisions of this Agreement shall govern. Notwithstanding the foregoing, the
relative rights and obligations of the Senior Priority Representatives and the
Senior Priority Secured Parties (as amongst themselves) with respect to any
Senior Priority Collateral shall be governed by the terms of the Equal Priority
Intercreditor Agreement and in the event of any conflict between the Equal
Priority Intercreditor Agreement and this Agreement, the provisions of the Equal
Priority Intercreditor Agreement shall control.

SECTION 8.02. Continuing Nature of This Agreement; Severability. Subject to
Section 6.04, this Agreement shall continue to be effective until the Discharge
of Senior Obligations shall have occurred. This is a continuing agreement of
Lien subordination, and the Senior Priority Secured Parties may continue, at any
time and without notice to the Second Priority Representatives or any Second
Priority Secured Party, to extend credit and other financial accommodations and
lend monies to or for the benefit of the Borrowers or any other Subsidiary
constituting Senior 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 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.

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.

 

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(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 any Borrower’s consent or which increases the
obligations or reduces the rights of, imposes additional duties on, or otherwise
adversely affects the Borrowers or any other Grantor, shall require the consent
of the Lead Borrower. Any such amendment, supplement or waiver shall be in
writing and shall be binding upon the Senior Priority Secured Parties and the
Second Priority Secured Parties and their respective permitted successors and
assigns.

(c) Notwithstanding the foregoing, without the consent of any Secured Party, any
Representative may become a party hereto by execution and delivery of a Joinder
Agreement in accordance with Section 8.09 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.

SECTION 8.04. Information Concerning Financial Condition of the Borrowers and
the Other Subsidiaries. The Senior Priority Representatives, the Senior Priority
Secured Parties, the Second Priority Representatives and the Second Priority
Secured Parties shall each be responsible for keeping themselves informed of
(a) the financial condition of the Borrowers and the other 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
Priority Representatives, the Senior Priority 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 Priority Representative, any Senior Priority Secured Party, any
Second Priority Representative or any Second Priority Secured 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 Priority Representatives, the Senior Priority Secured Parties, the
Second Priority Representatives and the Second Priority Secured Parties shall
not make or be deemed to have made, any express or implied representation or
warranty, including with respect to the 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 Secured Party under its Second Priority Debt
Facility, hereby agrees not to assert 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 Priority Secured Parties may be applied,
reversed and reapplied, in whole or in part, to such part of the Senior
Obligations as the Senior Priority Secured Parties, in their sole discretion,
deem appropriate, consistent with the terms of the Senior Priority Debt
Documents. Except as otherwise provided herein, each Second Priority
Representative, on behalf of itself and each Second Priority Secured 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 security 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.

 

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SECTION 8.07. [Reserved.]

SECTION 8.08. Dealings with Grantors. Upon any application or demand by the
Borrowers or any other Grantor to any Representative to take or permit any
action under any of the provisions of this Agreement, upon such Representative’s
reasonable request, the Lead Borrower shall furnish to such Representative a
certificate of a duly authorized officer of the Lead Borrower (an “Officer’s
Certificate”) stating that all conditions precedent, if any, provided for in
this Agreement, 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 relating to such particular application or demand, no
additional certificate or opinion need be furnished.

SECTION 8.09. Additional Debt Facilities.

(a) To the extent, but only to the extent, permitted by the provisions of the
Senior Priority Debt Documents and the Second Priority Debt Documents then in
effect, the Borrowers or any other Grantor 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 Priority Debt. Any such additional class or
series of Additional 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, and
Section 8.09(b). Any such additional class or series of Senior Priority Debt
Facilities (the “Senior Priority Class Debt”; and the Senior Priority 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
Senior Priority Collateral Documents, if and subject to the condition that the
Representative of any such Senior Priority Class Debt (each, a “Senior Priority
Class Debt Representative”; and the Senior Priority Class Debt Representatives
and Second Priority Class Debt Representatives, collectively, the “Class Debt
Representatives”), acting on behalf of the holders of such Senior Priority
Class Debt (such Representative and holders in respect of any such Senior
Priority Class Debt being referred to as the “Senior Priority Class Debt
Parties”; and the Senior Priority 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
Section 8.09(b) and also becomes a party to the ABL Intercreditor Agreement in
accordance with the terms thereunder. In order for a Class Debt Representative
to become a party to this Agreement:

 

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(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) or Annex III (if such Representative
is a Senior Priority Class Debt Representative) (with such changes as may be
reasonably approved by the Designated Senior Representative and such Class Debt
Representative, and, to the extent such changes increase the obligations or
reduce the rights of a Grantor, by the Borrowers) pursuant to which it becomes a
Representative hereunder, and the Class Debt in respect of which such Class Debt
Representative is the Representative and the related Class Debt Parties become
subject hereto and bound hereby;

(ii) the Lead Borrower shall have delivered to the Designated Senior
Representative an Officer’s Certificate stating that the conditions set forth in
this Section 8.09 are satisfied with respect to such Class Debt and, if
requested, true and complete copies of each of the Second Priority Debt
Documents or Senior Priority Debt Documents, as applicable, relating to such
Class Debt, certified as being true and correct by an Authorized Officer of the
Lead Borrower on behalf of the relevant Grantor and identifying the obligations
to be designated as Additional Senior Priority Debt or Additional Second
Priority Debt, as applicable, and certifying that such obligations are permitted
to be incurred and secured (I) in the case of Additional Senior Priority Debt,
on a senior basis under each of the Senior Priority Debt Documents and Second
Priority Debt Documents and (II) in the case of Additional Second Priority Debt,
on a junior basis under each of the Senior Priority Debt Documents and Second
Priority Debt Documents; and

(iii) the Second Priority Debt Documents or Senior Priority Debt Documents, as
applicable, relating to such Class Debt shall provide, or shall be amended on
terms and conditions reasonably approved by the Designated Senior Representative
and such Class Debt Representative, 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.

(b) With respect to any Class Debt that is issued or incurred after the Closing
Date, the Borrowers and each of the other Grantors agrees that the Borrowers
will take, as applicable, such actions (if any) as may from time to time
reasonably be requested by any Senior Priority Representative or any Second
Priority Representative, and enter into such technical amendments, modifications
and/or supplements to the then existing Collateral Documents (or execute and
deliver such additional Collateral Documents) as may from time to time be
reasonably requested by such Persons, to ensure that the Class Debt is secured
by, and entitled to the benefits of, the relevant Collateral Documents relating
to such Class Debt, and each Secured Party (by its acceptance of the benefits
hereof) hereby agrees to, and authorizes each applicable Senior Priority
Representative and each applicable Second Priority Representative, as the case
may be, to enter into, any such technical amendments, modifications and/or
supplements (and additional Collateral Documents).

 

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SECTION 8.10. 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 sitting in New York City in the borough of
Manhattan, the courts of the United States District Court of the Southern
District of New York, and appellate courts from any thereof;

(b) consents that any such action or proceeding may 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
and agrees not to commence or support any such action or proceeding in any other
jurisdiction;

(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 8.11;

(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; and

(e) waives, to the maximum extent not prohibited by Law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section 8.10 any special, exemplary, punitive or consequential damages.

SECTION 8.11. Notices. All notices, requests, demands and other communications
provided for or permitted hereunder shall be in writing and shall be sent:

(i) if to the Borrowers or any other Grantor, to the Lead Borrower, at its
address at:

c/o PAE Holding Corporation

c/o Platinum Equity, LLC

360 North Crescent Drive

Beverly Hills, CA 90210

Attn: Legal Department

Fax: (310) 712-1863

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

Latham & Watkins LLP

555 Eleventh Street, NW, Suite 1000

Washington, DC 20004-1304

Attn: Scott D. Forchheimer

Fax: (202) 637-3372

Email: scott.forchheimer@lw.com

 

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

Bank of America, N.A.

NC1-026-06-03

900 W. Trade Street

Charlotte, North Carolina 28255

Attention: Cindy Jordan

Tel: (980) 386-2359

Email: cindy.t.jordan@baml.com

(iii) if to the Initial Second Lien Representative, to it at:

Bank of America, N.A.

NC1-026-06-03

900 W. Trade Street

Charlotte, North Carolina 28255

Attention: Cindy Jordan

Tel: (980) 386-2359

Email: cindy.t.jordan@baml.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, all notices and other
communications given to any party hereto in accordance with the provisions of
this Agreement shall be deemed to have been given on the date of receipt if
delivered by hand or overnight courier service or sent by fax or on the date
five Business Days after dispatch by certified or registered mail if mailed, in
each case delivered, sent or mailed (properly addressed) to such party as
provided in this Section 8.11 or in accordance with the latest unrevoked
direction from such party given in accordance with this Section 8.11. Notices
and other communications may also be delivered by email to the email address of
a representative of the applicable Person provided from time to time by such
Person.

SECTION 8.12. Further Assurances. Each Senior Priority Representative, on behalf
of itself and each Senior Priority Secured Party under the Senior Priority Debt
Facility for which it is acting, each Second Priority Representative, on behalf
of itself, and each Second Priority Secured 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.

SECTION 8.13. Governing Law; Waiver of Jury Trial.

(A) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.

 

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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 8.14. Binding on Successors and Assigns. This Agreement shall be binding
upon the Senior Priority Representatives, the Senior Priority Secured Parties,
the Second Priority Representatives, the Second Priority Secured Parties, the
Borrowers and their respective permitted successors and assigns.

SECTION 8.15. 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 8.16. 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 8.17. 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 Collateral Agent represents and warrants that this Agreement is binding
upon the First Lien Credit Agreement Secured Parties. The Initial Second Lien
Representative represents and warrants that this Agreement is binding upon the
Initial Second Priority Debt Secured Parties.

SECTION 8.18. 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
Priority Representatives, the Senior Priority Secured Parties, the Second
Priority Representatives and the Second Priority Secured 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; provided, however, that the Grantors will be entitled to assert such
rights with respect to Sections 2.02, 5.01(a), 5.01(d), 5.02, 5.03(b), 5.05(f),
6.07, 8.03(b), 8.08, 8.09 and 8.23.

SECTION 8.19. Effectiveness. This Agreement shall become effective when executed
and delivered by the parties hereto.

SECTION 8.20. Administrative Agent and Representative. It is understood and
agreed that (a) the First Lien Collateral Agent is entering into this Agreement
in its capacity as administrative agent and collateral agent under the First
Lien Credit Agreement and the provisions of Section 12 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, (b) the Initial
Second Lien Representative is entering into this Agreement in its capacity as
administrative agent and collateral agent under the Initial Second Lien Debt
Agreement and the provisions

 

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of Section 12 of the Initial Second Lien Debt Agreement applicable to the
Administrative Agent (as defined therein) thereunder shall also apply to the
Initial Second Lien Representative hereunder and (c) each other Representative
party hereto is entering into this Agreement in its capacity as trustee or agent
for the secured parties referenced in the applicable Additional Senior Priority
Debt Document or Additional Second Priority Debt Document (as applicable) and
the corresponding exculpatory and liability-limiting provisions of such
agreement applicable to such Representative thereunder shall also apply to such
Representative hereunder.

SECTION 8.21. 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 8.22. Additional Grantors. The Borrowers hereby represent and warrant to
the Representatives that Holdings, the Subsidiary Guarantors party hereto and
the Borrowers constitute the only Grantors on the Closing Date. The Borrowers
and Holdings hereby covenant and agree to cause each person which becomes a
Grantor following the execution of this Agreement to become a party hereto (in
the capacity of a Grantor) by duly executing and delivering a counterpart of the
supplement hereto substantially in the form of Annex I hereof to each
Representative.

SECTION 8.23. ABL Intercreditor Agreement. Until such time as the Discharge of
Revolving Credit Obligations (as defined in the ABL Intercreditor Agreement) has
occurred with respect to the Revolving Credit Obligations, the provisions of
this Agreement shall be subject to the terms of the ABL Intercreditor Agreement
with respect to the ABL Collateral.

[SIGNATURE PAGES FOLLOW]

 

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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.

 

BANK OF AMERICA, N.A., as First Lien Collateral Agent By:  

/s/ Erik M. Truette

  Name: Erik M. Truette   Title: Vice President

[SIGNATURE PAGE TO FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT]

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

BANK OF AMERICA, N.A., as Initial Second Lien Representative By:  

/s/ Mark W. Kushemba

  Name: Mark W. Kushemba   Title: Managing Director

[SIGNATURE PAGE TO FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT]

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

Holdings SHAY INTERMEDIATE HOLDING II CORPORATION By:  

/s/ Mary Ann Sigler

  Name: Mary Ann Sigler   Title: President and Treasurer Borrowers PAE HOLDING
CORPORATION, By:  

/s/ Paul W. Cobb, Jr.

  Name: Paul W. Cobb, Jr.   Title: Vice President PACIFIC ARCHITECTS AND
ENGINEERS INCORPORATED, By:  

/s/ Richard Kirk von Seelen

  Name: Richard Kirk von Seelen   Title: Vice President PAE GOVERNMENT SERVICES,
INC., By:  

/s/ Richard Kirk von Seelen

  Name: Richard Kirk von Seelen   Title: Treasurer PACIFIC OPERATIONS
MAINTENANCE COMPANY, By:  

/s/ Richard Kirk von Seelen

  Name: Richard Kirk von Seelen   Title: Treasurer PAE DESIGN AND FACILITY
MANAGEMENT, By:  

/s/ Richard Kirk von Seelen

  Name: Richard Kirk von Seelen   Title: Treasurer

[PAE - Signature Page to First Lien/Second Lien Intercreditor Agreement]

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

PAE PROFESSIONAL SERVICES, INC., By:  

/s/ Stephanie Finn

  Name: Stephanie Finn   Title: Assistant Secretary PAE LABAT-ANDERSON
INCORPORATED, By:  

/s/ Stephanie Finn

  Name: Stephanie Finn   Title: Assistant Secretary A-T SOLUTIONS, INC., By:  

/s/ Richard Kirk von Seelen

  Name: Richard Kirk von Seelen   Title: Treasurer PAE JUSTICE SUPPORT, By:  

/s/ Stephanie Finn

  Name: Stephanie Finn   Title: Assistant Secretary PAE AVIATION AND TECHNICAL
SERVICES LLC, By:  

/s/ Richard Kirk von Seelen

  Name: Richard Kirk von Seelen   Title: Treasurer PAE APPLIED TECHNOLOGIES LLC,
By:  

/s/ Richard Kirk von Seelen

  Name: Richard Kirk von Seelen   Title: Treasurer PAE HANFORD LLC, By:  

/s/ Richard Kirk von Seelen

  Name: Richard Kirk von Seelen   Title: Treasurer

[PAE - Signature Page to First Lien/Second Lien Intercreditor Agreement]

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

Guarantors DYNCORP, By:  

/s/ Richard Kirk von Seelen

  Name: Richard Kirk von Seelen   Title: Treasurer PAE SHIELD ACQUISITION
COMPANY, INC., By:  

/s/ Stephanie Finn

  Name: Stephanie Finn   Title: Assistant Secretary A-T SOLUTIONS CORPORATE
HOLDINGS PRIME, INC., By:  

/s/ Richard Kirk von Seelen

  Name: Richard Kirk von Seelen   Title: Treasurer A-T SOLUTIONS CORPORATE
HOLDINGS, INC., By:  

/s/ Richard Kirk von Seelen

  Name: Richard Kirk von Seelen   Title: Treasurer A-T SOLUTIONS HOLDINGS, INC.,
By:  

/s/ Richard Kirk von Seelen

  Name: Richard Kirk von Seelen   Title: Treasurer PAE INTERNATIONAL, By:  

/s/ Richard Kirk von Seelen

  Name: Richard Kirk von Seelen   Title: Treasurer

[PAE - Signature Page to First Lien/Second Lien Intercreditor Agreement]

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

AFGHAN HOLDCO LLC, By:  

/s/ Stephanie Finn

  Name: Stephanie Finn   Title: Assistant Secretary DEFENSE SUPPORT SERVICES
INTERNATIONAL 3 LLC, By:  

/s/ Stephanie Finn

  Name: Stephanie Finn   Title: Assistant Secretary PAE TRAINING SERVICES, LLC,
By:  

/s/ Richard Kirk von Seelen

  Name: Richard Kirk von Seelen   Title: Treasurer PAE HUMANITARIAN RESPONSE
LLC, By:  

/s/ Richard Kirk von Seelen

  Name: Richard Kirk von Seelen   Title: Treasurer DEFENSE SUPPORT SERVICES
INTERNATIONAL, LLC, By:  

/s/ Stephanie Finn

  Name: Stephanie Finn   Title: Assistant Secretary DEFENSE SUPPORT SERVICES
INTERNATIONAL 2, LLC, By:  

/s/ Stephanie Finn

  Name: Stephanie Finn   Title: Assistant Secretary

[PAE - Signature Page to First Lien/Second Lien Intercreditor Agreement]

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

PAE LOGISTICS LLC, By:  

/s/ Richard Kirk von Seelen

  Name: Richard Kirk von Seelen   Title: Treasurer ACCELLIGENCE LLC, By: A-T
SOLUTIONS, INC., its sole member By:  

/s/ Richard Kirk von Seelen

  Name: Richard Kirk von Seelen   Title: Treasurer

[PAE - Signature Page to First Lien/Second Lien Intercreditor Agreement]

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

ANNEX I

[FORM OF] SUPPLEMENT NO. [ ] (this “Grantor Supplement”) dated as of
[             ], 20[     ] to the FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT
dated as of October 20, 2016 (the “First Lien/Second Lien Intercreditor
Agreement”), among PAE Holding Corporation, a Delaware corporation, Shay
Intermediate Holding II Corporation, a Delaware corporation, the other Grantors
from time to time party thereto, Bank of America, N.A., 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”), Bank
of America, N.A., acting in its capacity as administrative agent and collateral
agent under the Initial Second Lien Debt Agreement, and each additional Senior
Priority Representative and Second Priority Representative that from time to
time becomes a party thereto pursuant to Section 8.09 of the First Lien/Second
Lien Intercreditor Agreement.

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. Pursuant to Section 8.22 of the First Lien/Second Lien Intercreditor
Agreement, each person that becomes a Grantor following the execution of the
First Lien/Second Lien Intercreditor Agreement is required to become a party to
the First Lien/Second Lien Intercreditor Agreement. [             ] has become a
Grantor following the execution of the First Lien/Second Lien Intercreditor
Agreement and is referred to herein as the “New Grantor.”

Accordingly, the New Grantor agrees as follows:

SECTION 1. The New Grantor hereby agrees to become party to the First
Lien/Second Lien Intercreditor Agreement as a Grantor thereunder for all
purposes thereof on the terms set forth therein, and to be bound by the terms,
conditions and provisions of the First Lien/Second Lien Intercreditor Agreement
as fully as if the undersigned had executed and delivered the Intercreditor
Agreement as of the date thereof. All references to any “Grantor” or the
“Grantors” under the First Lien/Second Lien Intercreditor Agreement shall, from
and after the date hereof, be deemed to include the New Grantor.

SECTION 2. The New Grantor hereby agrees, for the enforceable benefit of all
existing and future Secured Parties that the undersigned is bound by the terms,
conditions and provisions of the First Lien/Second Lien Intercreditor Agreement.

SECTION 3. Except as expressly supplemented hereby, the First Lien/Second Lien
Intercreditor Agreement shall remain in full force and effect.

SECTION 4. THIS GRANTOR SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 5. All communications and notices hereunder shall be in writing and
given as provided in Section 8.11 of the First Lien/Second Lien Intercreditor
Agreement. All communications and notices hereunder to the New Grantor shall be
given to it at the address set forth below its signature hereto.

[SIGNATURE PAGES FOLLOW]

 

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

 

[NAME OF NEW GRANTOR], as New Grantor, By:  

 

  Name:   Title:   Address for notices: [            ]

 

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ANNEX II

[FORM OF] SUPPLEMENT NO. [ ] (this “Representative Supplement”) dated as of [ ],
20[ ] to the FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT dated as of
October 20, 2016 (the “First Lien/Second Lien Intercreditor Agreement”), among
PAE Holding Corporation, a Delaware corporation, Shay Intermediate Holding II
Corporation, a Delaware corporation, Bank of America, N.A., 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”), Bank of America, N.A., as Representative for the Initial Second
Priority Debt Secured Parties (in such capacity and together with its successors
in such capacity, the “Initial Second Lien Representative ”), and each
additional Senior Priority Representative and Second Priority Representative
that from time to time becomes a party thereto pursuant to Section 8.09 of the
First Lien/Second Lien Intercreditor Agreement.

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 or any other Grantor 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 on a subordinated basis, in each case under and pursuant to the
Second Priority Collateral Documents, 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, 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 Representative Supplement in accordance with the requirements
of the Senior Priority Debt Documents and the Second Priority Debt Documents.

Accordingly, the Designated Senior Representative and the New Representative
agree 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 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
Lien/Second Lien Intercreditor Agreement applicable to it as a Second Priority
Representative and to the Second Priority Class Debt

 

A-II-1

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Parties that it represents as Second Priority Secured 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 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] under [describe debt facility], (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 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.

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 8.11 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.

[SIGNATURE PAGES FOLLOW]

 

A-II-2

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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:

 

 

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Acknowledged by: [         ] By:  

 

  Name:   Title: [         ] By:  

 

  Name:   Title: PAE Holding Corporation, as the Lead Borrower By:  

 

  Name:   Title: Shay Intermediate Holding II Corporation, as Holdings By:  

 

  Name:   Title:

 

A-II-4

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ANNEX III

[FORM OF] SUPPLEMENT NO. [ ] (this “Representative Supplement”) dated as of [ ],
20[ ] to the FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT dated as of
October 20, 2016 (the “First Lien/Second Lien Intercreditor Agreement”), among
PAE Holding Corporation, a Delaware corporation, Shay Intermediate Holding II
Corporation, a Delaware corporation, Bank of America, N.A., 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”), Bank of America, N.A., as Representative for the Initial Second
Priority Debt Secured Parties (in such capacity and together with its successors
in such capacity, the “Initial Second Lien Representative ”), and each
additional Senior Priority Representative and Second Priority Representative
that from time to time becomes a party thereto pursuant to Section 8.09 of the
First Lien/Second Lien Intercreditor Agreement.

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 or any other Grantor to incur
Senior Priority Class Debt after the date of the First Lien/Second Lien
Intercreditor Agreement and to secure such Senior Priority Class Debt with the
Senior Lien and to have such Senior Priority Class Debt guaranteed by the
Grantors on a senior basis, in each case under and pursuant to the Senior
Priority Collateral Documents, the Senior Priority Class Debt Representative in
respect of such Senior Priority Class Debt is required to become a
Representative under, and such Senior Priority Class Debt and the Senior
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 Senior
Priority Class Debt Representative may become a Representative under, and such
Senior Priority Class Debt and such Senior Priority Class Debt Parties may
become subject to and bound by, the First Lien/Second Lien Intercreditor
Agreement, pursuant to the execution and delivery by the Senior 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 Senior Priority Class Debt Representative (the “New Representative”)
is executing this Representative Supplement in accordance with the requirements
of the Senior Priority Debt Documents and the Second Priority Debt Documents.

Accordingly, the Designated Senior Representative and the New Representative
agree 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 Priority Class Debt and Senior
Priority Class Debt Parties become subject to and bound by, the First
Lien/Second Lien Intercreditor Agreement 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 Priority
Class Debt Parties,

 

 

A-III-1

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hereby agrees to all the terms and provisions of the First Lien/Second Lien
Intercreditor Agreement applicable to it as a Senior Priority Representative and
to the Senior Priority Class Debt Parties that it represents as Senior Priority
Secured Parties. Each reference to a “Representative” or “Senior 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 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] under [describe debt facility], (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 Priority Debt
Documents relating to such Senior Priority Class Debt provide that, upon the New
Representative’s entry into this Agreement, the Senior Priority Class Debt
Parties in respect of such Senior Priority Class Debt will be subject to and
bound by the provisions of the First Lien/Second Lien Intercreditor Agreement as
Senior Priority 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.

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 8.11 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.

[SIGNATURE PAGES FOLLOW]

 

A-III-2

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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:

 

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Acknowledged by: [         ] By:  

 

  Name:   Title: [         ] By:  

 

  Name:   Title: PAE Holding Corporation, as the Lead Borrower By:  

 

  Name:   Title: Shay Intermediate Holding II Corporation, as Holdings By:  

 

  Name:   Title:

 

A-III-4