Exhibit 10.6

 

EXECUTION VERSION

 

TERM LOAN INTERCREDITOR AGREEMENT

 

TERM LOAN INTERCREDITOR AGREEMENT, dated as of November 7, 2017 (this
“Agreement”), among NUMBER HOLDINGS, INC. (“Holdings”), 99 CENTS ONLY STORES LLC
(the “Borrower”), the other Grantors (as defined below) party
hereto,                                    ROYAL BANK OF CANADA (“Royal Bank”),
as Representative for the Credit Agreement Secured Parties (in such capacity,
the “Administrative Agent”), WILMINGTON TRUST, NATIONAL ASSOCIATION, as
Representative for the Initial Second Priority Debt Parties (in such capacity,
the “Initial Second Priority Representative”), and each additional Second
Priority Representative and Senior Representative that from time to time becomes
a party hereto pursuant to Section 8.09.

 

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

 

ARTICLE I

 

Definitions

 

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

 

“ABL Obligations” shall have the meaning assigned to the term “ABL Obligations”
in the ABL/Term Intercreditor Agreement.

 

“ABL Secured Parties” shall have the meaning assigned to the term “ABL Secured
Parties” in the ABL/Term Intercreditor Agreement.

 

“ABL/Term Intercreditor Agreement” means the Intercreditor Agreement, dated as
of January 13, 2012, as amended by Amendment No. 1, dated as of November 7,
2017, among Royal Bank, in its capacity as representative thereunder for the ABL
Secured Parties, Royal Bank, in its capacity as Administrative Agent, and the
other parties thereto.

 

“ABL/Term/Notes Intercreditor Agreement” means the Notes Intercreditor Agreement
as defined in the Credit Agreement (or similar term).

 

“Additional Senior Debt” means any Indebtedness that is issued or guaranteed by
any Borrower and/or any Guarantor (other than Indebtedness constituting Credit
Agreement Obligations or ABL Obligations) which Indebtedness and Guarantees are
secured by the Senior Collateral (or a portion thereof) on a basis that is
senior to the Second Priority Debt Obligations; provided, however, that (i) such
Indebtedness is permitted to be incurred, secured and guaranteed on such basis
by each Senior Debt Document and Second Priority Debt Document and (ii) the
Representative for the holders of such Indebtedness shall have (A) executed and
delivered this Agreement as of the date hereof or become party

 

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to this Agreement pursuant to, and by satisfying the conditions set forth in,
Section 8.09 hereof and (B) to the extent applicable, executed and delivered a
Pari Intercreditor Agreement.

 

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

 

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

 

“Additional Senior Debt Obligations” means, with respect to any series, issue or
class of Additional Senior Debt, (a) all principal of, and interest (including,
without limitation, any interest, fees or expenses which accrues after the
commencement of any Insolvency or Liquidation Proceeding, whether or not allowed
or allowable as a claim in any such proceeding) payable with respect to, such
Additional Senior Debt and (b) all other amounts payable by any Grantor to the
related Additional Senior Debt Parties under the related Additional Senior Debt
Documents, (c) any Secured Hedge Obligations secured under the Senior Collateral
Documents securing the related series, issue or class of Additional Senior Debt
Obligations, (d) any Secured Cash Management Obligations secured under the
Senior Collateral Documents securing the related series, issue or class of
Additional Senior Debt Obligations and (e) any renewals or extensions of the
foregoing; provided that, Excess Senior Obligations shall be excluded from (and
shall not constitute) Additional Senior Debt Obligations.

 

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

 

“Administrative 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 Article XI of the Credit Agreement;
provided, however, that if the Credit Agreement is Refinanced, then all
references herein to the Administrative Agent shall refer to the administrative
agent (or trustee) under the Refinancing.

 

“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 or any
similar federal or state law for the relief of debtors.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such other Person,
whether through the ownership of voting securities, by contract or otherwise. 
“Controlling” and “Controlled” have meanings correlative thereto.

 

“Credit Agreement” means that certain Credit Agreement, dated as of January 13,
2012, as amended by Amendment No. 1, dated as of April 1, 2012, Amendment No. 2,
dated as of October 8, 2013, and Amendment No. 3, dated as of November 7, 2017,
among Holdings, the Borrower, the Subsidiaries of the Borrower from time to time
party thereto, the lenders from time to time party thereto, Royal Bank, as
Administrative Agent, and the other parties thereto.

 

“Credit Agreement Loan Documents” means the Credit Agreement and the other “Loan
Documents” as defined in the Credit Agreement (or similar term).

 

“Credit Agreement Obligations” means the “Obligations” as defined in the Credit
Agreement (or similar term in any Refinancing thereof); provided that, Excess
Senior Obligations shall be excluded from (and shall not constitute) Credit
Agreement Obligations.

 

“Credit Agreement Secured Parties” means the “Secured Parties” as defined in the
Credit Agreement (or similar term in any Refinancing thereof).

 

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

 

“Designated Second Priority Representative” means (i) the Initial Second
Priority Representative, until such time as the Second Priority Debt Facility
under the Initial Second Priority Debt Documents ceases to be the only Second
Priority Debt Facility under this Agreement and (ii) thereafter, the Second
Priority Representative designated from time to time by the Second Priority
Majority Representatives, in a written notice to the Designated Senior
Representative and the Borrower hereunder, as the “Designated Second Priority
Representative” for purposes hereof.  The Second Priority Representative may
treat the Administrative Agent as Designated Senior Representative until such
time as it receives a notice that it was replaced as Designated Senior
Representative.

 

“Designated Senior Representative” means (i) if at any time there is only one
Senior Representative for a Senior Facility with respect to which the Discharge
of Senior Obligations has not occurred, such Senior Representative and (ii) at
any time when clause (i) does not apply, the Administrative Agent at such time.

 

“Designated Term Debt Representative” means the Administrative Agent until it
shall have notified each other Representative hereunder in writing that the
Credit Agreement Obligations are Discharged, at which time the Designated Term
Debt Representative shall be the “Majority Term Debt Representative”.  If at any
time subsequent to an appointment of the applicable Representative as the
Designated Term Debt Representative, a class or series of Senior Obligations or
Second Priority Debt Obligations are incurred and become subject to the
provisions of this Agreement, then the Designated

 

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Term Debt Representative thereafter shall be the applicable Representative on
the terms set forth in this definition.

 

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

 

“Discharge” means, with respect to any Debt Facility, as applicable, the date on
which (i) (a) the principal of and interest (including interest accruing on or
after the commencement of an Insolvency or Liquidation Proceeding, whether or
not such interest would be allowed in the proceeding)  on all outstanding
Indebtedness included in the Debt Facility, are paid in full in cash, (b) all
other Senior Obligations or Second Priority Debt Obligations that are due and
payable or otherwise accrued and owing at or prior to the time such principal
and interest are paid (other than indemnification Obligations for which no claim
or demand for payment, whether oral or written, has been made at such time) are
paid in full in cash and (c) with respect to any Secured Hedge Obligations or
Secured Cash Management Obligations secured by the Collateral Documents for such
Debt Facility, either (x) such Secured Hedge Obligations or Secured Cash
Management Obligations have either been paid in full and are no longer secured
by the Collateral pursuant to the terms of the documentation governing such Debt
Facility, (y) such Secured Hedge Obligations or Secured Cash Management
Obligations shall have been cash collateralized on terms reasonably satisfactory
to each applicable counterparty (or other arrangements reasonably satisfactory
to the applicable counterparty shall have been made) or (z) such Secured Hedge
Obligations or Secured Cash Management Obligations are no longer secured by the
Collateral pursuant to the terms of the documentation governing such Debt
Facility, (ii) any letters of credit issued under the Senior Facilities have
terminated or have been cash collateralized or backstopped (in the amount and
form required under the applicable Debt Facility) and (iii) all commitments of
the Senior Secured Parties and the Second Priority Debt Parties under their
respective Debt Facilities have terminated.  The term “Discharged” shall have a
corresponding meaning.

 

“Discharge of Credit Agreement Obligations” means, with respect to any Shared
Collateral, the Discharge of the Credit Agreement Obligations with respect to
such Shared Collateral; provided that the Discharge of Credit Agreement
Obligations shall not be deemed to have occurred in connection with a
Refinancing of such Credit Agreement Obligations with an Additional Senior Debt
Facility secured by such Shared Collateral under one or more Additional Senior
Debt Documents which has been designated in writing by the Administrative Agent
(under the Credit Agreement so Refinanced) to the Designated Second Priority
Representative as the “Credit Agreement” for purposes of this Agreement.

 

“Discharge of Senior Obligations” means the date on which the Discharge of
Credit Agreement Obligations and the Discharge of each Additional Senior Debt
Facility has occurred.

 

“Excess Second Priority Obligations” means the sum of (a) the portion of the
principal amount of the loans or the notes outstanding under the Second Priority
Debt Documents that is in excess of the Second Priority Cap, plus (b) the
portion of interest and fees on account of such portion of the loans or the
notes described in clause (a) of this definition.

 

“Excess Senior Obligations” means the sum of (a) the portion of the principal
amount of the loans or the notes outstanding under the Senior Debt Documents
that is in excess of the Senior Cap, plus (b) the portion of interest and fees
on account of such portion of the loans or the notes described in clause (a) of
this definition.

 

“Grantors” means Holdings, the Borrower and each Subsidiary of the Borrower
which has granted a security interest pursuant to any Collateral Document to
secure any Secured Obligations.

 

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“Guarantor” means each “Guarantor” as defined in the Credit Agreement.

 

“Initial Second Priority Collateral Documents” means the “Security Agreement”
and the other “Collateral Documents” each as defined in the Initial Second
Priority Debt Documents and each of the other collateral agreements, security
agreements, pledge agreements, debentures and other instruments and documents
executed and delivered by a Borrower or any other Grantor for purposes of
providing collateral security for the Initial Second Priority Debt Obligations.

 

“Initial Second Priority Credit Agreement” means that certain Credit Agreement,
dated as of November 7, 2017, among Holdings, the Borrower, the Subsidiaries of
the Borrower from time to time party thereto, the lenders from time to time
party thereto, Wilmington Trust, National Association, as administrative agent
and collateral agent, and the other parties thereto.

 

“Initial Second Priority Debt” means the Second Priority Debt incurred pursuant
to the Initial Second Priority Debt Documents.

 

“Initial Second Priority Debt Documents” means the Initial Second Priority
Credit Agreement and any notes, security documents, pledge agreements,
debentures and other operative agreements evidencing or governing such
Indebtedness, including any agreement entered into for the purpose of securing
the Initial Second Priority Debt Obligations.

 

“Initial Second Priority Debt Obligations” means the “Obligations” as defined in
the Initial Second Priority Debt Documents (or similar term in any Refinancing
thereof).

 

“Initial Second Priority Debt Parties” means the “Secured Parties” as defined in
the Initial Second Priority Debt Documents (or similar term in any Refinancing
thereof) and the Initial Second Priority Representative.

 

“Initial Second Priority Representative” has the meaning assigned to such term
in the introductory paragraph to this Agreement.

 

“Insolvency or Liquidation Proceeding” means:

 

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

 

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

 

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

 

“Intellectual Property” means intellectual and similar property of every kind
and nature now owned, licensed or hereafter acquired by any Grantor that is
subject to a security interest under any Debt Facility, including inventions,
designs, patents, copyrights, licenses, trademarks, trade secrets,

 

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confidential or proprietary technical and business information, know how, show
how or other data or information, software, databases, all other proprietary
information and all embodiments or fixations thereof and related documentation
and registrations and all additions, improvements and accessions to, and books
and records describing or used in connection with, any of the foregoing.

 

“Joinder Agreement” means a supplement to this Agreement substantially in the
form of Annex II or Annex III hereof required to be delivered by a
Representative to the Designated Senior Representative pursuant to Section 8.09
hereof in order to include an additional Debt Facility hereunder and to become
the Representative hereunder for the Senior Secured Parties or Second Priority
Secured Parties, as the case may be, under such Debt Facility.

 

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, any easement, right of way or other encumbrance on title to real
property, and any Capitalized Lease having substantially the same economic
effect as any of the foregoing); provided that in no event shall an operating
lease in and of itself be deemed a Lien.

 

“Majority Term Debt Representative” means, with respect to any Shared
Collateral, the Representative of the series of Secured Obligations that
constitutes the largest outstanding principal amount of any then outstanding
series of Secured Obligations with respect to such Shared Collateral.

 

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

 

“Pari Intercreditor Agreement” shall mean (a) in the case of Liens securing
Senior Obligations, an intercreditor agreement between the Administrative Agent
and any other Senior Debt Representative or Representatives and (b) in the case
of Liens securing Second Priority Debt Obligations, an intercreditor agreement
between the applicable Second Priority Representative and any other Second
Priority Representative or Representatives, providing for the pari passu
treatment of such Liens and in each case in form and substance reasonably
satisfactory to the Representatives.

 

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

 

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

 

“Proceeds” means

 

(a)                                 all “proceeds,” as defined in Article 9 of
the UCC, of the Collateral, and

 

(b)                                 whatever is recovered when Collateral is
sold, exchanged, collected, or disposed of, whether voluntarily or
involuntarily, including any additional or replacement Collateral provided
during any Insolvency or Liquidation Proceeding and any payment or property
received in an Insolvency or Liquidation Proceeding on account of any “secured
claim” (within the meaning of section 506(b) of the Bankruptcy Code or similar
bankruptcy or insolvency law).

 

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

 

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“Refinance” means, in respect of any indebtedness, to refinance, extend, renew,
defease, amend, increase, modify, supplement, restructure, refund, replace or
repay such indebtedness, or to issue other indebtedness or enter into
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,
indenture or other agreement.  “Refinanced” and “Refinancing” have correlative
meanings.

 

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

 

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

 

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

 

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

 

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

 

“Second Priority Collateral” means any “Collateral” as defined in any Second
Priority Debt Document or any other assets of a Borrower 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
Obligation.

 

“Second Priority Collateral Documents” means the Initial Second Priority
Collateral Documents and each of the collateral agreements, security agreements
and other instruments and documents executed and delivered by a Borrower or any
Grantor for purposes of providing collateral security for any Second Priority
Debt Obligation.

 

“Second Priority Cap” means the sum of (i) (1) the amount of Second Priority
Debt Obligations permitted under Section 9.3(x) of the Credit Agreement as in
effect on the date of this Agreement plus (2) any interest, fees or expenses
paid in kind relating to the Second Priority Debt Obligations described in the
foregoing clause (1) minus (3) the amount of all prepayments or other payments
in each case of the principal of Second Priority Debt Obligations (but not
including any prepayments or other payments of Second Priority Debt Obligations
made in connection with a Refinancing thereof) plus (ii) in the case of DIP
Financing provided by one or more Second Priority Debt Parties to the Borrower
or any other Grantor, the principal amount in respect thereof (including any
interest, fees or expenses paid in kind) that is approved by the applicable
bankruptcy court.

 

“Second Priority Debt” means any Indebtedness of any Borrower or any other
Grantor guaranteed by the Guarantors, including the Initial Second Priority
Debt, which Indebtedness and guarantees are secured by the Second Priority
Collateral on a pari passu basis with the Initial Second Priority Debt
Obligations and any other Second Priority Debt Obligations and the applicable
Second Priority Debt Documents provide that such Indebtedness and guarantees are
to be secured by such Second Priority Collateral on a subordinate basis to the
Senior Debt Obligations; provided, however, that (i) such Indebtedness is
permitted to be incurred, secured and guaranteed on such basis by the Senior
Debt Documents and Second Priority Debt Documents and (ii) except in the case of
the Initial Second Priority Debt hereunder, the Representative for the holders
of such Indebtedness shall have (A) become party to

 

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this Agreement pursuant to, and by satisfying the conditions set forth in,
Section 8.09 hereof and (B) to the extent applicable, executed and delivered a
Pari Intercreditor Agreement.

 

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

 

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

 

“Second Priority Debt Obligations” means the Initial Second Priority Debt
Obligations and, with respect to any other series, issue or class of Second
Priority Debt, (a) all principal of, and interest (including, without
limitation, any interest, fees or expenses which accrue after the commencement
of any Insolvency or Liquidation Proceeding, whether or not allowed or allowable
as a claim in any such proceeding) payable with respect to, such Second Priority
Debt and (b) all other amounts payable to the related Second Priority Debt
Parties under the related Second Priority Debt Documents.

 

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

 

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

 

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

 

“Second Priority Majority Representatives” means Second Priority Representatives
representing at least a majority of the then aggregate amount of Second Priority
Debt Obligations that agree to vote together.

 

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

 

“Secured Cash Management Obligations” shall mean obligations in respect of Cash
Management Services that are intended under the applicable Senior Priority
Collateral Document to be secured by Shared Collateral.

 

“Secured Hedge Obligations” shall mean obligations under Swap Contracts that are
intended under the applicable Senior Priority Collateral Document to be secured
by Shared Collateral.

 

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

 

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

 

“Senior Cap” means the sum of (i)(1) $506,000,000 plus (2) Additional Senior
Debt Obligations plus (3) all capitalized interest in respect of obligations
described in the foregoing clauses (1) and (2) minus (4) the amount of all
prepayments or other payments in each case of the principal of Senior
Obligations (including any roll-up obligations in connection with DIP Financing
described in clause (ii) below but not including any prepayments or other
payments of Senior Obligations made in connection with a Refinancing thereof)
plus (ii) in the case of DIP Financing provided by one or more Senior Secured
Parties to the Borrower or any other Grantor, the principal amount in respect
thereof (including any roll-up obligations and capitalized interest) that is
approved by the applicable bankruptcy court.

 

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

 

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

 

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

 

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

 

“Senior Collateral Documents” means the “Security Agreement” and the other
“Collateral Documents” in each case as defined in the Credit Agreement or
comparable term as defined in any Additional Senior Debt Documents and any other
collateral agreements, security agreements and other instruments and documents
executed and delivered by any Borrower or any other Grantor for purposes of
providing collateral security for any Senior Obligation.

 

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

 

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

 

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

 

“Senior Obligations” means the Credit Agreement Obligations and any Additional
Senior Debt Obligations; provided that, Excess Senior Obligations shall be
excluded from (and shall not constitute) Senior Obligations.

 

“Senior Representative” means (i) in the case of any Credit Agreement
Obligations or the Credit Agreement Secured Parties, the Administrative Agent,
(ii) in the case of any Additional Senior Debt Facility and the Additional
Senior Debt Parties thereunder (including with respect to any Additional Senior
Debt Facility initially covered hereby on the date of this Agreement), the
trustee, administrative agent, collateral agent, security agent or similar agent
under such Additional Senior Debt Facility that is named as the Representative
in respect of such Additional Senior Debt Facility hereunder or in the
applicable Joinder Agreement.

 

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

 

“Shared Collateral” means, at any time, Collateral in which the holders of
Senior Obligations under at least one Senior Facility or the holders of Second
Priority Debt Obligations under at least one Second Priority Debt Facility (or
their Representatives) hold a security interest at such time (or, in the case of
the Senior Facilities, are deemed pursuant to Article II to hold a security
interest).

 

“Specified Portion” means twenty-two percent (22%).

 

“Subsidiary” means, with respect to any Person (a) any corporation, association
or other business entity (other than a partnership, joint venture or limited
liability company) of which more than 50% of the total voting power of shares of
Equity Interests entitled (without regard to the occurrence of any contingency)
to vote in the election of directors, managers or trustees thereof is at the
time of determination owned or Controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person or a combination
thereof, and (b) any partnership, joint venture or limited liability company of
which (i) more than 50% of the capital accounts, distribution rights, total
equity and voting interests or general and limited partnership interests, as
applicable, are owned or controlled, directly or indirectly, by such Person or
one or more of the other Subsidiaries of that Person or a combination thereof,
whether in the form of membership, general, special or limited partnership
interests or otherwise, and (ii) such Person or any Subsidiary of such Person is
a controlling general partner or otherwise Controls such entity.

 

“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.                                     Interpretive Provision.  The
interpretive provisions contained in Article I of the Credit Agreement are
incorporated herein, mutatis mutandis, as if a part hereof.

 

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ARTICLE II

 

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 Debt Parties on the
Shared Collateral or of any Liens granted to any Senior Representative or any
other Senior Secured Party on the Shared Collateral (or any actual or alleged
defect in any of the foregoing) and notwithstanding any provision of the UCC,
any applicable law, any Second Priority Debt Document or any Senior Debt
Document or any other circumstance whatsoever, each Second Priority
Representative, on behalf of itself and each Second Priority Debt Party under
its Second Priority Debt Facility, hereby agrees that (a) any Lien on the Shared
Collateral securing any Senior Obligations now or hereafter held by or on behalf
of any Senior Representative or any other Senior Secured Party or other agent or
trustee therefor, regardless of how acquired, whether by grant, statute,
operation of law, subrogation or otherwise, shall have priority over and be
senior in all respects and prior to any Lien on the Shared Collateral securing
any Second Priority Debt Obligations and (b) any Lien on the Shared Collateral
securing any Second Priority Debt Obligations now or hereafter held by or on
behalf of any Second Priority Representative, any Second Priority Debt Parties
or any Second Priority Representative or other agent or trustee therefor,
regardless of how acquired, whether by grant, statute, operation of law,
subrogation or otherwise, shall be junior and subordinate in all respects to all
Liens on the Shared Collateral securing any Senior Obligations.  All Liens on
the Shared Collateral securing any Senior Obligations shall be and remain senior
in all respects and prior to all Liens on the Shared Collateral securing any
Second Priority Debt Obligations for all purposes, whether or not such Liens
securing any Senior Obligations are subordinated to any Lien securing any other
obligation of any Borrower, any Grantor or any other Person or otherwise
subordinated, voided, avoided, invalidated or lapsed.  Notwithstanding anything
herein to the contrary, including the next following paragraph, the relative
Lien priority of the Excess Senior Obligations to the Excess Second Priority
Obligations shall be the same as the relative Lien priority of the Senior
Obligations to the Second Priority Debt Obligations and the provisions of this
Agreement shall apply to such categories of obligations mutatis mutandis.

 

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 Debt Parties on the
Shared Collateral or of any Liens granted to any Senior Representative or any
other Senior Secured Party on the Shared Collateral (or any actual or alleged
defect in any of the foregoing) that secure Excess Senior Obligations and
notwithstanding any provision of the UCC, any applicable law, any Second
Priority Debt Document or any Senior Debt Document or any other circumstance
whatsoever, each Senior Representative, on behalf of itself and each Senior
Secured Party under its Senior Facility, hereby agrees that (a) any Lien on the
Shared Collateral securing any Second Priority Debt Obligations now or hereafter
held by or on behalf of any Second Priority Representative or any other Second
Priority Debt Party or other agent or trustee therefor, regardless of how
acquired, whether by grant, statute, operation of law, subrogation or otherwise,
shall have priority over and be senior in all respects and prior to any Lien on
the Shared Collateral securing any Excess Senior Obligations and (b) any Lien on
the Shared Collateral securing any Excess Senior Obligations now or hereafter
held by or on behalf of any Senior Representative, any Senior Secured Party or
other agent or trustee therefor, regardless of how acquired, whether by grant,
statute, operation of law, subrogation or otherwise, shall be junior and
subordinate in all respects to all Liens on the Shared Collateral securing any
Second Priority Debt Obligations.  All Liens on the Shared Collateral securing
any Second Priority Debt Obligations shall be and remain senior in all respects
and prior to all Liens on the Shared Collateral securing any Excess Senior
Obligations for all purposes, whether or not such Liens

 

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securing any Excess Senior Obligations are subordinated to any Lien securing any
other obligation of any Borrower, any Grantor or any other Person or otherwise
subordinated, voided, avoided, invalidated or lapsed.

 

SECTION 2.02.                                     Nature of Senior Lender
Claims.  Subject to Section 5.03, each Second Priority Representative, on behalf
of itself and each Second Priority Debt Party under its Second Priority Debt
Facility, acknowledges that the terms of the Senior Debt Documents and the
Senior Obligations may be amended, supplemented or otherwise modified, and the
Senior Obligations, or a portion thereof, may be Refinanced from time to time. 
The Lien priorities provided for in Section 2.01 shall not be altered or
otherwise affected by any amendment, supplement or other modification, or any
Refinancing, of either the Senior Obligations or the Second Priority Debt
Obligations, or any portion thereof.  As between the Borrower and the other
Grantors and the Second Priority Debt Parties, the foregoing provisions will not
limit or otherwise affect the obligations of the Borrower and the Grantors
contained in any Second Priority Debt Document with respect to the incurrence of
additional Senior Obligations.

 

SECTION 2.03.                                     Prohibition on Contesting
Liens.  Each of the Second Priority Representatives, for itself and on behalf of
each Second Priority Debt Party under its Second Priority Debt Facility, agrees
that it shall not (and hereby waives any right to) contest or support any other
Person in contesting, in any proceeding (including any Insolvency or Liquidation
Proceeding), the validity, extent, perfection, priority or enforceability of any
Lien securing any Senior Obligations held (or purported to be held) by or on
behalf of any Senior Representative or any of the other Senior Secured Parties
or other agent or trustee therefor in any Senior Collateral, and each Senior
Representative, for itself and on behalf of each Senior Secured Party under its
Senior Facility, agrees that it shall not (and hereby waives any right to)
contest or support any other Person in contesting, in any proceeding (including
any Insolvency or Liquidation Proceeding), the validity, extent, perfection,
priority or enforceability of any Lien securing any Second Priority Debt
Obligations held (or purported to be held) by or on behalf of any of any Second
Priority Representative or any of the Second Priority Debt Parties in the Second
Priority Collateral.  Notwithstanding the foregoing, no provision in this
Agreement shall be construed to prevent or impair the rights of any Senior
Representative to enforce this Agreement (including the priority of the Liens
securing the Senior Obligations as provided in Section 2.01) or any of the
Senior Debt Documents.  Until the Discharge of Senior Obligations, Second
Priority Representative will not assert any marshaling, appraisal, valuation, or
other similar right that may otherwise be available to a junior secured
creditor.

 

SECTION 2.04.                                     No New Liens.  (a)  Subject to
the terms hereof, the parties hereto agree that, so long as the Discharge of
Senior Obligations has not occurred, (i) none of the Grantors shall grant or
permit any additional Liens on any asset or property of any Grantor to secure
any Second Priority Debt Obligation unless it has granted, or substantially
concurrently therewith grants, a Lien on such asset or property of such Grantor
to secure the Senior Obligations; and (ii) if any Second Priority Representative
or any Second Priority Debt Party shall hold any Lien on any assets or property
of any Grantor securing any Second Priority Obligations that are not also
subject to the Liens securing all Senior Obligations under the Senior Collateral
Documents, such Second Priority Representative or Second Priority Debt Party
(x) shall notify the Designated Senior Representative promptly upon becoming
aware thereof and, unless such Grantor shall promptly grant a similar Lien on
such assets or property to each Senior 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 Secured
Parties (but may retain a junior lien on such assets or property subject to the
terms hereof) and (y) until such assignment or such grant of a similar Lien to
each Senior Representative, shall be deemed to hold and have held such Lien for
the benefit of each Senior Representative and the other Senior Secured Parties
as security for the Senior Obligations.  To the extent that the provisions of
the immediately preceding

 

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

 

(b)                                 Subject to the terms hereof, the parties
hereto agree that, so long as the Discharge of Second Priority Debt Obligations
has not occurred, (i) none of the Grantors shall grant or permit any additional
Liens on any asset or property of any Grantor to secure any Senior Obligation
unless it has granted, or substantially concurrently therewith grants, a Lien on
such asset or property of such Grantor to secure the Second Priority Debt
Obligations and (ii) if any Senior Representative or any Senior Secured Party
shall hold any Lien on any assets or property of any Grantor securing any Senior
Obligations that are not also subject to the Liens securing all Second Priority
Debt Obligations under the Second Priority Collateral Documents, such Senior
Representative or Senior Secured Party shall notify the Designated Second
Priority Representative promptly upon becoming aware thereof  and until a grant
of a similar Lien to each Second Priority Representative, shall be deemed to
hold and have held such Lien for the benefit of each Second Priority
Representative and the other Second Priority Debt Parties as security for the
Second Priority Debt Obligations.

 

(c)                                  The existence of a maximum claim with
respect to any real property subject to a mortgage which applies to all Secured
Obligations shall not be deemed to be a difference in Collateral among any
series, issue or class of Senior Obligations or Second Priority Debt
Obligations.

 

SECTION 2.05.                                     Perfection of Liens.  Except
for the limited agreements of the Senior Representatives pursuant to
Section 5.05 hereof, none of the Senior Representatives or the Senior Secured
Parties shall be responsible for perfecting and maintaining the perfection of
Liens with respect to the Shared Collateral for the benefit of the Second
Priority Representatives or the Second Priority Debt Parties.  The provisions of
this Agreement are intended solely to govern the respective Lien priorities as
between the Senior Secured Parties and the Second Priority Debt Parties and
shall not impose on the Senior Representatives, the Senior Secured Parties, the
Second Priority Representatives, the Second Priority Debt Parties or any agent
or trustee therefor any obligations in respect of the disposition of Proceeds of
any Shared Collateral which would conflict with prior perfected claims therein
in favor of any other Person or any order or decree of any court or governmental
authority or any applicable law.

 

SECTION 2.06.                                     Similar Liens and Agreements. 
The parties hereto agree that it is their intention that the Senior Collateral
and the Second Priority Collateral be identical.  In furtherance of the
foregoing and of Section 8.12, the parties hereto agree, subject to the other
provisions of this Agreement:

 

(a)                                 upon request by Designated Senior
Representative or Designated Second Priority Representative, to cooperate in
good faith (and to direct their counsel to cooperate in good faith) from time to
time in order to determine the specific items included in the Senior Collateral
and the Second Priority Collateral and the steps taken or to be taken to perfect
their respective Liens thereon and the identity of the respective parties
obligated under the Senior Debt Documents and the Second Priority Debt
Documents; and

 

(b)                                 that the Senior Debt Documents and the
Second Priority Debt Documents and guarantees for the Senior Debt Documents and
the Second Priority Debt Documents, shall be in all material respects the same
forms of documents other than with respect to the first lien and the second lien
nature thereof.

 

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ARTICLE III

 

Enforcement

 

SECTION 3.01.                                     Exercise of Remedies.

 

(a)                                 So long as the Discharge of Senior
Obligations has not occurred and subject to Article VI, whether or not any
Insolvency or Liquidation Proceeding has been commenced by or against a Borrower
or any other Grantor, (i) neither any Second Priority Representative nor any
Second Priority Debt Party will (x) exercise or seek to exercise any rights or
remedies (including setoff) with respect to any Shared Collateral in respect of
any Second Priority Debt Obligations, or institute any action or proceeding with
respect to such rights or remedies (including any action of foreclosure),
(y) contest, protest or object to any foreclosure proceeding or action brought
with respect to the Shared Collateral by any Senior Representative or any Senior
Secured Party in respect of the Senior Obligations, the exercise of any right by
any Senior Representative or any Senior Secured Party (or any agent or sub-agent
on their behalf) in respect of the Senior Obligations under any lockbox
agreement, control agreement, landlord waiver or bailee’s letter or similar
agreement or arrangement to which any Senior Representative or any Senior
Secured Party either is a party or may have rights as a third party beneficiary,
or any other exercise by any such party of any rights and remedies relating to
the Shared Collateral under the Senior Debt Documents or otherwise in respect of
the Senior Collateral or the Senior Obligations, or (z) object to the
forbearance by the Senior Secured Parties from bringing or pursuing any
foreclosure proceeding or action or any other exercise of any rights or remedies
relating to the Shared Collateral in respect of Senior Obligations and
(ii) except as otherwise provided herein, the Senior Representatives and the
Senior Secured Parties shall have the exclusive right to enforce rights,
exercise remedies (including setoff and the right to credit bid their debt) and
make determinations regarding the release, disposition or restrictions with
respect to the Shared Collateral without any consultation with or the consent of
any Second Priority Representative or any Second Priority Debt Party; provided,
however, that (A) in any Insolvency or Liquidation Proceeding commenced by or
against a Borrower 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, (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 Representatives or the Senior Secured Parties to exercise remedies in
respect thereof) in order to create, prove, perfect, preserve or protect (but
not enforce) its rights in, and perfection and priority of its Lien on, the
Shared Collateral, but no Second Priority Debt Party may receive any Proceeds
thereof unless expressly permitted herein, (C) any Second Priority
Representative and the Second Priority Secured Parties may exercise their rights
and remedies as unsecured creditors, as and to the extent provided 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 Debt Parties may
file any necessary, responsive or defensive pleadings in opposition to any
motion, claim, adversary proceeding or other pleading made by any person
objecting to or otherwise seeking the disallowance of the claims or Liens of the
Second Priority Debt Parties or the avoidance of any Second Priority Lien to the
extent not inconsistent with the terms of this Agreement, (E) any Second
Priority Debt Party may 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 and
is not inconsistent with the terms and conditions of this Agreement (including,
for the avoidance of doubt, Section 6.08), (F) any Second Priority Debt Party
may send notices of default relating to the Second Priority Debt Obligations,
(G) any Second Priority Debt Party may accelerate the Second Priority Debt
Obligations, (H) any Second Priority Debt Party may join (but not exercise
control except from and after the Second Priority Enforcement Date) a judicial
foreclosure or lien enforcement proceeding with respect to the Collateral
initiated by the Senior Secured Parties to the extent such action could not
reasonably be expected to interfere in any material respect with such
enforcement action, (I) any Second Priority Debt

 

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Party may bid for or purchase Collateral at any public, private or judicial
foreclosure upon any Collateral initiated by any Senior Secured Party or any
sale of Collateral during any Insolvency or Liquidation Proceeding; provided
that such bid may not include a “credit bid” in respect of any Second Priority
Debt Obligations unless the proceeds of such bid are otherwise sufficient to
cause the Discharge of Senior Obligations and (J) from and after the Second
Priority Enforcement Date, the Designated Second Priority Representative (or a
person authorized by it) may exercise or seek to exercise any rights or remedies
(including setoff) with respect to any Shared Collateral in respect of any
Second Priority Debt Obligations, or institute any action or proceeding with
respect to such rights or remedies (including any action of foreclosure).  In
exercising rights and remedies with respect to the Senior Collateral, the Senior
Representatives and the Senior Secured Parties may enforce the provisions of the
Senior Debt Documents and exercise remedies thereunder, all in such order and in
such manner as they may determine in the exercise of their sole discretion. 
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 of
any applicable jurisdiction and of a secured creditor under Bankruptcy Laws of
any applicable jurisdiction.

 

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

 

(c)                                  Subject to Sections 3.01(a) and 5.04 and
Article VI, (i) each Second Priority Representative, for itself and on behalf of
each Second Priority Debt Party under its Second Priority Debt Facility, agrees
that neither such Second Priority Representative nor any such Second Priority
Debt Party will take any action that would hinder any exercise of remedies
undertaken by any Senior Representative or any Senior Secured Party with respect
to the Shared Collateral under the Senior Debt Documents, including any sale,
lease, exchange, transfer or other disposition of the Shared Collateral, whether
by foreclosure or otherwise, and (ii) each Second Priority Representative, for
itself and on behalf of each Second Priority Debt Party under its Second
Priority Debt Facility, hereby waives any and all rights it or any such Second
Priority Debt Party may have as a junior lien creditor to object to the manner
in which the Senior Representatives or the Senior Secured Parties seek to
enforce or collect the Senior Obligations or the Liens granted on any of the
Senior Collateral, regardless of whether any action or failure to act by or on
behalf of any Senior Representative or any other Senior Secured Party is adverse
to the interests of the Second Priority Debt Parties.

 

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

 

(e)                                  Until the Discharge of Senior Obligations,
except as expressly provided in Section 3.01(a), the Designated Senior
Representative (or any person authorized by it) shall have the

 

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

 

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

 

SECTION 3.03.                                     Actions upon Breach.  Should
any Second Priority Representative or any Second Priority Debt Party, contrary
to this Agreement, in any way take, attempt to take 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 Representative or other Senior
Secured Party (in its or their own name or in the name of a Borrower or any
other Grantor) or a Borrower may obtain relief against such Second Priority
Representative or such Second Priority Debt Party by injunction, specific
performance or other appropriate equitable relief.  Each Second Priority
Representative, on behalf of itself and each Second Priority Debt Party under
its Second Priority Debt Facility, hereby (i) agrees that the Senior Secured
Parties’ damages from the actions of the Second Priority Representatives or any
Second Priority Debt Party may at that time be difficult to ascertain and may be
irreparable and waives any defense that a Borrower, any other Grantor or the
Senior Secured Parties cannot demonstrate damage or be made whole by the
awarding of damages and (ii) irrevocably waives any defense based on the
adequacy of a remedy at law and any other defense that might be asserted to bar
the remedy of specific performance in any action that may be brought by any
Senior Representative or any other Senior Secured Party.

 

ARTICLE IV

 

Payments

 

SECTION 4.01.                                     Application of Proceeds. 
After an Event of Default (as defined therein) under any Senior Debt Document
has occurred and until such Event of Default is cured or waived, so long as the
Discharge of Senior Obligations has not occurred, the Shared Collateral or
Proceeds thereof received in connection with (i) the sale or other disposition
of, or collection on, such

 

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Shared Collateral upon the exercise of remedies or (ii) any Insolvency or
Liquidation Proceeding shall be applied by the Designated Senior Representative
to the Senior Obligations in such order as specified in the relevant Senior Debt
Documents until the Discharge of Senior Obligations has occurred.  Upon the
Discharge of Senior Obligations, each applicable Senior Representative shall
deliver promptly to the Designated Second Priority Representative any Shared
Collateral or Proceeds thereof 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.

 

SECTION 4.02.                                     Payments Over.  Unless and
until the Discharge of Senior Obligations has occurred or, thereafter, with
respect to any Excess Second Priority Obligations, any Shared Collateral or
Proceeds thereof received by any Second Priority Representative or any Second
Priority Debt Party in connection with (i) the exercise of any right or remedy
(including setoff) relating to the Shared Collateral or (ii) any Insolvency or
Liquidation Proceeding, shall in each case be segregated and held in trust for
the benefit of and forthwith paid over to the Designated Senior Representative
for the benefit of the Senior Secured Parties in the same form as received, with
any necessary endorsements, or as a court of competent jurisdiction may
otherwise direct.  The Designated Senior Representative is hereby authorized to
make any such endorsements as agent for each of the Second Priority
Representatives or any such Second Priority Debt Party.  This authorization is
coupled with an interest and is irrevocable.

 

ARTICLE V

 

Other Agreements

 

SECTION 5.01.                                     Releases.

 

(a)                                 Subject to Article VI, each Second Priority
Representative, for itself and on behalf of each Second Priority Debt Party
under its Second Priority Debt Facility, agrees that, if in connection with
(i) any sale, transfer or other disposition of any Shared Collateral by any
Grantor (other than in connection with any enforcement or exercise of rights or
remedies with respect to the Shared Collateral or any Insolvency or Liquidation
Proceeding which shall be governed by clause (ii)) permitted under the terms of
the Senior Debt Documents or consented to by the holders of Senior Obligations
under the Senior Debt Documents and permitted under the terms of the Second
Priority Debt Documents or consented to by the holders of Second Priority Debt
Obligations (other than (A) in connection with the Discharge of Senior
Obligations or (B) after the occurrence and during the continuance of any Event
of Default under the Second Priority Debt Documents) or (ii) the enforcement or
exercise of any rights or remedies with respect to the Shared Collateral or any
Insolvency or Liquidation Proceeding, including any sale, transfer or other
disposition of Collateral so long as net proceeds of any such Collateral are
applied to reduce permanently the Senior Obligations and so long as the Second
Priority Debt Parties shall retain a Lien on the proceeds of any such sale,
transfer or other disposition of Collateral in connection with any exercise of
remedies by the Senior Secured Parties (to the extent that such proceeds are not
applied to the Senior Obligations), the Designated Senior Representative, for
itself and on behalf of the other Senior Secured Parties releases any of the
Senior Liens on  the Shared Collateral (a “Release”), then the Liens (other than
the Lien on the proceeds thereof to the extent provided above in this sentence)
on such Shared Collateral securing any Second Priority Debt Obligations shall be
automatically, unconditionally and simultaneously released, and each Second
Priority Representative shall, for itself and on behalf of the other applicable
Second Priority Class Debt Parties, promptly execute and deliver to the
Designated Senior Representative and the applicable Grantors such termination
statements, releases and other documents as the Designated Senior Representative
or any applicable Grantor may reasonably request to effectively confirm such
Release.  Similarly, if the equity interests of

 

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any Person are foreclosed upon or otherwise disposed of pursuant to clause
(i) or (ii) above and in connection therewith the Designated Senior
Representative releases the Senior Liens on the property or assets of such
Person or releases such Person from its guarantee of Senior Obligations, then
the Second Priority Lien on such property or assets of such Person and such
Person’s guarantee of Second Priority Debt Obligations shall be automatically
released to the same extent.  Nothing in this Section 5.01(a) will be deemed to
affect any agreement of a Second Priority Representative, for itself and on
behalf of the Second Priority Debt Parties under its Second Priority Debt
Facility, to release the Liens on the Second Priority Collateral as set forth in
the relevant Second Priority Debt Documents.

 

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

 

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

 

(d)                                 Notwithstanding anything to the contrary in
any Second Priority Collateral Document, in the event the terms of a Senior
Collateral Document and a Second Priority Collateral Document each require any
Grantor 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, commodity 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 Debt
Party, such Grantor may, until the applicable Discharge of Senior Obligations
has occurred, comply with such requirement under the Second Priority Collateral
Document as it relates to such Shared Collateral by taking any of the actions
set forth above only with respect to, or in favor of, the Designated Senior
Representative.

 

SECTION 5.02.                                     Insurance and Condemnation
Awards.  Unless and until the Discharge of Senior Obligations has occurred, the
Designated Senior Representative and the Senior

 

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Secured Parties shall have the sole and exclusive right, subject to the rights
of the Grantors under the Senior Debt Documents, (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, in each case in accordance with the
Senior Debt Documents.  Unless and until the Discharge of Senior Obligations has
occurred, all Proceeds of any such policy and any such award, if in respect of
the Shared Collateral, shall be paid (i) first, prior to the occurrence of the
Discharge of Senior Obligations, to the Designated Senior Representative for the
benefit of Senior Secured Parties pursuant to the terms of the Senior Debt
Documents, (ii) second, after the occurrence of the Discharge of Senior
Obligations, to the Designated Second Priority Representative for the benefit of
the Second Priority Debt Parties pursuant to the terms 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 Debt Party
shall, at any time, receive any Proceeds of any such insurance policy or any
such award in contravention of this Agreement, it shall pay such Proceeds over
to the Designated Senior Representative in accordance with the terms of
Section 4.02.

 

SECTION 5.03.                                     Amendments to Debt Documents.

 

(a)                                 The Senior Debt Documents may be amended,
restated, supplemented or otherwise modified in accordance with their terms, and
the Senior Debt Obligations may be Refinanced or replaced, in whole or in part,
in each case, without the consent of any Second Priority Representative or any
Second Priority Debt 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 Majority Representatives, no such amendment,
restatement, supplement, modification or Refinancing (or successive amendments,
restatements, supplements, modifications or Refinancings) shall (i) contravene
any provision of this Agreement or (ii) increase the aggregate principal amount
of the Senior Obligations that comprise principal in respect of loans or notes
outstanding under the Senior Debt Documents to an amount in excess of the Senior
Cap, without, in each case, the prior written consent of the Designated Second
Priority Representative.

 

(b)                                 The Second Priority Debt Documents may be
amended, restated, supplemented or otherwise modified in accordance with their
terms, and the Second Priority Debt Obligations may be Refinanced or replaced,
in whole or in part, in each case, without the consent of any Senior Class Debt
Representative or any Senior Class Debt Party, all without affecting the Lien
priorities provided for herein or the other provisions hereof; provided,
however, that, without the consent of the Senior Priority Class Debt
Representative, no such amendment, restatement, supplement, modification or
Refinancing (or successive amendments, restatements, supplements, modifications
or Refinancings) shall (i) contravene any provision of this Agreement,
(ii) amend any term relating to payment or prepayment of the Senior Obligations
in a manner adverse to the interests of the Senior Class Debt Parties or
(iii) increase the aggregate principal amount of the Second Priority Debt
Obligations that comprise principal in respect of loans or notes outstanding
under the Second Priority Debt Documents to an amount in excess of the Second
Priority Cap, without, in each case, the prior written consent of the Designated
Senior Representative. Each Second Priority Representative, for itself and on
behalf of each Second Priority Debt Party under its Second Priority Debt
Facility, agrees that each Second Priority Collateral Document under its Second
Priority Debt Facility shall include 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 Collateral Agent pursuant to this Agreement are expressly
subject and subordinate to the liens and security interests granted in favor of
the Senior Secured

 

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Parties (as defined in the Term Intercreditor Agreement referred to below) and
the ABL Secured Parties (as defined in the ABL/Term Intercreditor Agreement
referred to below), including liens and security interests granted to Royal Bank
of Canada, as administrative agent, pursuant to or in connection with (A) the
Credit Agreement, dated as of January 13, 2012 (as amended, restated,
supplemented or otherwise modified from time to time), among Number
Holdings, Inc. (“Holdings”), 99 Cents Only Stores LLC (the “Borrower”), the
Subsidiaries of the Borrower from time to time party thereto, the lenders from
time to time party thereto and Royal Bank of Canada, as administrative agent and
collateral agent and (B) the Credit Agreement, dated as of January 13, 2012 (as
amended, restated, supplemented or otherwise modified from time to time), among
Holdings, the Borrower, the Subsidiaries of the Borrower from time to time party
thereto, the lenders from time to time party thereto and Royal Bank of Canada,
as administrative agent and collateral agent, and (ii) the exercise of any right
or remedy by Collateral Agent hereunder is subject to the limitations and
provisions of (A) the Term Loan Intercreditor Agreement, dated as of November 7,
2017 (as amended, restated, supplemented or otherwise modified from time to
time, the “Term Intercreditor Agreement”), among Holdings, the Borrower, Royal
Bank of Canada, as Administrative Agent, Wilmington Trust, National Association,
as Representative for the Initial Second Priority Debt Parties, and each
additional Second Priority Representative and Senior Representative from time to
time party thereto and (B) the Intercreditor Agreement, dated as of January 13,
2012 (as amended, restated, supplemented or otherwise modified from time to
time, the “ABL/Term Intercreditor Agreement” and, together with the Term
Intercreditor Agreement, the “Intercreditor Agreements”), among Holdings, the
Borrower, Royal Bank of Canada, as representative for the ABL Secured Parties
thereunder, Royal Bank of Canada, as representative for the Term Secured Parties
thereunder, and each additional secured party and representative from time to
time party thereto.  In the event of any conflict between the terms of the
Intercreditor Agreements and the terms of this Agreement, the terms of the
Intercreditor Agreements shall govern.”

 

The inclusion of the foregoing language in the Second Priority Collateral
Documents does not modify or impair the rights of the applicable Senior Secured
Parties against the applicable Grantors.  The failure to include such language
in any Second Priority Collateral Document shall not give rise to any liability
on the part of any party to this Agreement with respect to such Second Priority
Collateral Document.

 

(c)                                  In the event that each applicable Senior
Representative and/or the Senior Secured Parties enter into any amendment,
waiver or consent in respect of any of the Senior Collateral Documents for the
purpose of adding to or deleting from, or waiving or consenting to any
departures from any provisions of, any Senior Collateral Document or changing in
any manner the rights of the Senior Representatives, the Senior Secured Parties,
the Borrower or any other Grantor thereunder (including the release of any Liens
in Senior Collateral) in a manner that is applicable to all Senior Facilities,
then such amendment, waiver or consent shall apply automatically to any
comparable provision of each comparable Second Priority Collateral Document
without the consent of any Second Priority Representative or any Second Priority
Debt Party and without any action by any Second Priority Representative, the
Borrower or any other Grantor; provided, however, that (i) no such amendment,
waiver or consent shall (A) remove assets subject to the Second Priority Liens
or release any such Liens, except to the extent that such release is permitted
or required by Section 5.01(a) and provided that there is a substantially
concurrent release of the corresponding Senior Liens, (B) be adverse in any
material respect to the Second Priority Debt Parties to a greater extent than to
the Senior Secured Parties (other than by virtue of the relative priorities and
rights provided for in this Agreement) without the prior written consent of the
Designated Second Priority Representative or (C) impose additional duties that
are adverse on any Second Priority Representative

 

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without its prior written consent and (ii) written notice of such amendment,
waiver or consent shall have been given to each Second Priority Representative
within thirty (30) days after the effectiveness of such amendment, waiver or
consent; provided that the failure to give such notice shall not affect the
effectiveness and validity thereof.

 

(d)                                 The Borrower agrees to deliver to each of
the Designated Senior Representative and the Designated Second Priority
Representative copies of (i) any material amendments, supplements or other
modifications to the material Senior Debt Documents or the material Second
Priority Debt Documents and (ii) any new material Senior Debt Documents or
material Second Priority Debt Documents promptly after effectiveness thereof.

 

SECTION 5.04.                                     Rights as Unsecured
Creditors.  The Second Priority Representatives and the Second Priority Debt
Parties may as unsecured creditors exercise rights and remedies available to
unsecured creditors generally against any Borrower and any other Grantor in
accordance with the terms of the Second Priority Debt Documents and applicable
law (including in any Insolvency or Liquidation Proceeding) to the extent such
exercise is not inconsistent with the other provisions of this Agreement. 
Except as provided in Section 4.02, nothing in this Agreement shall prohibit the
receipt by any Second Priority Representative or any Second Priority Debt Party
of the required payments of principal (including required mandatory prepayments
to the extent any such mandatory prepayment is declined by the Senior Secured
Parties), premium, interest (including interest at the default rate), fees and
other amounts due under the Second Priority Debt Documents.  In the event any
Second Priority Representative or any Second Priority Debt Party becomes a
judgment lien creditor in respect of Shared Collateral as a result of its
enforcement of its rights as an unsecured creditor in respect of Second Priority
Debt Obligations, such judgment lien shall be subordinated to the Liens securing
Senior Obligations on the same basis as the other Liens securing the Second
Priority Debt Obligations are so subordinated to such Liens securing Senior
Obligations under this Agreement.  Nothing in this Agreement shall impair or
otherwise adversely affect any rights or remedies the Senior Representatives or
the Senior Secured Parties may have with respect to the Senior Collateral.

 

SECTION 5.05.                                     Gratuitous Bailee for
Perfection.

 

(a)                                 Each Senior Representative acknowledges and
agrees that if it shall at any time hold a Lien securing any Senior Obligations
on any Shared Collateral that can be perfected by the possession, control, or
notation, 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, or notation, in the name of, such
Senior Representative, or of agents or bailees of such Person (such Shared
Collateral being referred to herein as the “Pledged or Controlled Collateral”),
or if it shall at any time obtain any landlord waiver or bailee’s letter or any
similar agreement or arrangement granting it rights or access to Shared
Collateral, the applicable Senior Representative shall also hold such Pledged or
Controlled Collateral, or take such actions with respect to such landlord
waiver, bailee’s letter or similar agreement or arrangement, as sub-agent or
gratuitous bailee (such bailment being intended, among other things, to satisfy
the requirements of Section 8-301(a)(2) and 9-313(c) of the Uniform Commercial
Code, to the extent applicable) for the relevant Second Priority
Representatives, in each case solely for the purpose of perfecting the Liens
granted under the relevant Second Priority Collateral Documents and subject to
the terms and conditions of this Section 5.05.

 

(b)                                 In the event that any Senior Representative
(or its agents or bailees) 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 Representative agrees to hold such Liens
as sub-agent and gratuitous bailee (such bailment being intended, among other
things, to satisfy the requirements of Section 8-301(a)(2) and 9-313(c) of the
Uniform Commercial Code, to the extent

 

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applicable) 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
Representatives and the Senior Secured Parties shall be entitled to deal with
the Pledged or Controlled Collateral in accordance with the terms of the Senior
Debt Documents as if the Liens under the Second Priority Collateral Documents
did not exist.  The rights of the Second Priority Representatives and the Second
Priority Debt Parties with respect to the Pledged or Controlled Collateral shall
at all times be subject to the terms of this Agreement.

 

(d)                                 The Senior Representatives and the Senior
Secured Parties shall have no obligation whatsoever to the Second Priority
Representatives or any Second Priority Debt Party to assure that any of the
Pledged or Controlled Collateral is genuine or owned by the Grantors or to
protect or preserve rights or benefits of any Person or any rights pertaining to
the Shared Collateral, except as expressly set forth in this Section 5.05.  The
duties or responsibilities of the Senior Representatives under this Section 5.05
shall be limited solely to holding, controlling, or being notated on, 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 (such bailment being intended,
among other things, to satisfy the requirements of Section 8-301(a)(2) and
9-313(c) of the Uniform Commercial Code, to the extent applicable) for the
relevant Second Priority Representative for purposes of perfecting the Lien held
by such Second Priority Representative.

 

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

 

(f)                                   Upon the Discharge of Senior Obligations,
each applicable Senior Representative shall, at the Grantors’ sole cost and
expense, (i) (A) deliver to the Designated Second Priority Representative, to
the extent that it is legally permitted to do so, all Shared Collateral,
including all Proceeds thereof, held or controlled by such Senior Representative
or any of its agents or bailees, including the transfer of possession and
control, as applicable, of the Pledged or Controlled Collateral, together with
any necessary endorsements and notices to depositary banks, securities
intermediaries and commodities intermediaries, and assign its rights under any
landlord waiver or bailee’s letter or any similar agreement or arrangement
granting it rights or access to Shared Collateral, or (B) direct and deliver
such Shared Collateral as a court of competent jurisdiction may otherwise
direct, (ii) notify any applicable insurance carrier that it is no longer
entitled to be a loss payee or additional insured under the insurance policies
of any Grantor issued by such insurance carrier, and (iii) notify any
governmental authority involved in any condemnation or similar proceeding
involving any Grantor that the Designated Second Priority Representative is
entitled to approve any awards granted in such proceeding.  The Borrower and the
other Grantors shall take such further action as is required to effectuate the
transfer contemplated hereby and shall indemnify each Senior Representative for
loss or damage suffered by such Senior Representative as a result of such
transfer, except for loss or damage suffered by any such Person as a result of
its own gross negligence or willful misconduct as determined by a final
non-appealable judgment of a court of competent jurisdiction.  The Senior
Representatives have no obligations to follow instructions from any Second
Priority Representative or any other Second Priority Debt Party in

 

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contravention of this Agreement.  No Senior Representative shall have any
liability to any Second Priority Debt Party.

 

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

 

SECTION 5.06.                                     When Discharge of Senior
Obligations Deemed To Not Have Occurred.  If, at any time substantially
concurrently with or after the Discharge of Senior Obligations has occurred, the
Borrower or any Subsidiary of Holdings 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 Debt Document for all
purposes of this Agreement, including for purposes of the Lien priorities and
rights in respect of Shared Collateral set forth herein and the agent,
representative or trustee for the holders of such Senior Obligations shall be
the Senior Representative for all purposes of this Agreement.  Upon receipt of
notice of such incurrence (including the identity of the new Senior
Representative), each Second Priority Representative (including the Designated
Second Priority Representative) shall promptly (a) enter into such documents and
agreements (at the expense of the Borrower), including amendments or supplements
to this Agreement, as the Borrower or such new Senior Representative shall
reasonably request in writing in order to provide the new Senior Representative
the rights of a Senior Representative contemplated hereby, (b) deliver to such
Senior Representative, to the extent that it is legally permitted to do so, all
Shared Collateral, including all Proceeds thereof, held or controlled by such
Second Priority Representative or any of its agents or bailees, including the
transfer of possession and control, as applicable, of the Pledged or Controlled
Collateral, together with any necessary endorsements and notices to depositary
banks, securities intermediaries and commodities intermediaries, and assign its
rights under any landlord waiver or bailee’s letter or any similar agreement or
arrangement granting it rights or access to Shared Collateral and (c) notify any
governmental authority involved in any condemnation or similar proceeding
involving a Grantor that the new Senior Representative is entitled to approve
any awards granted in such proceeding.

 

SECTION 5.07.                                     Purchase Right.  Without
prejudice to the enforcement of the Senior Secured Parties’ remedies, the Senior
Secured Parties agree that at any time, one or more of the Second Priority Debt
Parties may request, and the Senior Secured Parties hereby offer the Second
Priority Debt Parties the option, to purchase all, but not less than all, of the
aggregate amount of outstanding Senior Obligations outstanding at the time of
purchase at par, plus any premium that would be applicable upon prepayment of
the Senior Obligations and accrued and unpaid interest, fees, and expenses
without warranty or representation or recourse (except for representations and
warranties required to be made by assigning lenders pursuant to the Assignment
and Assumption (as such term is defined in the Credit Agreement)).  If such
right is exercised, the parties shall endeavor to close promptly thereafter but
in any event within ten (10) Business Days of the request.  If one or more of
the Second Priority Debt Parties exercise such purchase right, it shall be
exercised pursuant to documentation mutually acceptable to each of the Senior
Representative and the Second Priority Representative, subject to any consent
rights of the Borrower under the Credit Agreement or any applicable Senior Debt
Document.  If none of the Second Priority Debt Parties exercise such right, the
Senior Secured Parties shall have no further obligations

 

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pursuant to this Section 5.07 for such purchase event and may take any further
actions in their sole discretion in accordance with the Senior Debt Documents
and this Agreement.

 

ARTICLE VI

 

Insolvency or Liquidation Proceedings.

 

SECTION 6.01.                                     Financing Issues; Asset Sales.

 

(a)              Subject to Section 6.01(c) below, until the Discharge of Senior
Obligations, if an Insolvency or Liquidation Proceeding has commenced, each
Second Priority Representative, on behalf of itself and each Second Priority
Debt Party, each as holder of a Lien on the Collateral, will not contest,
protest, or object to, and each Second Priority Debt Party will be deemed to
have consented to,

 

(1)                                 any use, sale, or lease of “cash collateral”
(as defined in section 363(a) of the Bankruptcy Code), and

 

(2)                                 Borrower or any other Grantor obtaining
financing under Section 363 or Section 364 of the Bankruptcy Code or any similar
provision of any other Bankruptcy Law (“DIP Financing”) if the Administrative
Agent consents in writing to such use, sale, or lease, or DIP Financing,
provided that

 

(A)                               Second Priority Representative otherwise
retains its Lien on the Collateral,

 

(B)                               any Second Priority Debt Party may seek
adequate protection as and to the extent permitted by Section 6.03 and, if such
adequate protection is not granted, Second Priority Representative may object
under this Section 6.01 solely on such basis,

 

(C)                               after taking into account the use of cash
collateral and the principal amount of any DIP Financing (after giving effect to
any Refinancing of Senior Obligations) on any date, the sum of the then
outstanding principal amount of any Senior Obligations and any DIP Financing
that in each case comprise principal in respect of loans or notes outstanding
under the Senior Debt Documents or DIP Financing documentation does not exceed
the Senior Cap on such date, and

 

(D)                               such DIP Financing and the Liens securing such
DIP Financing are pari passu with or superior in priority to the then
outstanding Senior Obligations and the Liens securing such Senior Obligations.

 

(b)                                 Subject to Section 6.01(c) below, any
customary and reasonable “carve-out” or other similar administrative priority
expense or claim consented to in writing by Senior Representative to be paid
prior to the Discharge of Senior Obligations will be deemed for purposes of
Section 6.01(a):

 

(1)                                 to be a use of cash collateral, and

 

(2)                                 not to be a principal amount of DIP
Financing at the time of such consent.

 

No Second Priority Debt Party may provide DIP Financing to a Borrower or other
Grantor secured by Liens equal or senior in priority to the Liens securing any
Senior Obligations, or provide any DIP Financing unless no Senior Secured Party
offers to provide DIP Financing to the extent permitted under Section 6.01(a) on
or before the date of the hearing to approve DIP Financing.

 

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To the extent any Senior Secured Party proposes to provide DIP Financing, the
Second Priority Debt Parties shall be provided a reasonable opportunity to
provide up to the Specified Portion of such DIP Financing upon the terms
proposed by such Senior Secured Party, provided that the Second Priority Debt
Parties shall, on or after the consummation of such DIP Financing, be allowed to
vote no more than the Specified Portion of the claims constituting such DIP
Financing.

 

(c)                                  Nothing in this Section 6.01 or this
Agreement limits or impairs the right of Second Priority Representative to
object to any motion regarding DIP Financing (including a DIP Financing proposed
by one or more Senior Secured Parties) or cash collateral to the extent that the
DIP Financing or use of cash collateral does not meet the requirements of
Section 6.01(a).

 

(d)                                 Second Priority Representative, as holder of
a Lien on the Collateral and on behalf of the Second Priority Debt Parties, will
not contest, protest, or object, and will be deemed to have consented pursuant
to section 363(f) of the Bankruptcy Code, to a Disposition of Collateral free
and clear of its Liens or other interests under section 363 of the Bankruptcy
Code if Senior Representative consents in writing to the Disposition, provided
that either (i) pursuant to court order, the Liens of Second Priority Debt
Parties attach to the net Proceeds of the Disposition with the same priority and
validity as the Liens held by Second Priority Debt Parties on such Collateral,
and the Liens remain subject to the terms of this Agreement, or (ii) the
Proceeds of a Disposition of Collateral received by Senior Representative in
excess of those necessary to achieve the Discharge of Senior Obligations are
distributed in accordance with the UCC, applicable law and this Agreement, and
provided, further that the Second Priority Debt Parties are not deemed to have
waived any rights to credit bid on the Shared Collateral in any such sale or
disposition under Section 363(k) of the Bankruptcy Code (or any similar
provision under the Bankruptcy Code or any other applicable law), so long as any
such credit bid provides for the Discharge of Senior Obligations.

 

SECTION 6.02.                                     Relief from the Automatic
Stay.  Until the Discharge of Senior Obligations has occurred, each Second
Priority Representative, for itself and on behalf of each Second Priority Debt
Party under its Second Priority Debt Facility, agrees that none of them shall
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; provided, however, that upon the filing of any
motion for relief from the automatic stay or from any injunction against
foreclosure or enforcement in respect of Senior Obligations made by any Senior
Representative or any other Senior Secured Party, each Second Priority
Representative, for itself and on behalf of each Second Priority Debt Party
under the Second Priority Debt Facility, may similarly seek relief from stay to
exercise such Second Priority Representative’s rights and remedies in a manner
consistent with this Agreement.

 

SECTION 6.03.                                     Adequate Protection.  Each
Second Priority Representative, for itself and on behalf of each Second Priority
Debt Party under its Second Priority Debt Facility, agrees that none of them
shall (A) object, contest or support any other Person objecting to or contesting
(a) any request by any Senior Representative or any Senior Secured Parties for
adequate protection, (b) any objection by any Senior Representative or any
Senior Secured Parties to any motion, relief, action or proceeding based on any
Senior Representative’s or Senior Secured Party’s claiming a lack of adequate
protection, or (c) the payment of interest and the reasonable fees costs, or
charges of any Senior Representative or any other Senior Secured Party under
Section 506(b) of the Bankruptcy Code or any similar provision of any other
Bankruptcy Law and otherwise payable under the Senior Debt Documents or
(B) assert or support any claim for costs or expenses of preserving or disposing
of any Collateral under Section 506(c) of the Bankruptcy Code or any similar
provision of any other Bankruptcy Law unless the payment of any such claim is
conditioned on the occurrence of the Discharge of Senior Obligations. 
Notwithstanding anything contained in this Section 6.03 or in Section 6.01, in
any Insolvency or Liquidation Proceeding, (i) if the Senior Secured Parties (or
any subset thereof) are granted adequate

 

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protection in the form of additional or replacement collateral or superpriority
claims in connection with any DIP Financing or use of cash collateral under
Section 363 or 364 of the Bankruptcy Code or any similar provision of any other
Bankruptcy Law (other than in a role of DIP Financing provider), then each
Second Priority Representative, for itself and on behalf of each Second Priority
Debt Party under its Second Priority Debt Facility, may seek or request adequate
protection in the form of a replacement Lien or superpriority claim on such
additional or replacement collateral, which Lien or superpriority claim is
subordinated to the Liens securing or claims with respect to all Senior
Obligations and such DIP Financing (and all obligations relating thereto and any
reasonable “carve-out”) on the same basis as the other Liens securing the Second
Priority Debt Obligations are so subordinated to the Liens securing Senior
Obligations under this Agreement, and (ii) in the event any Second Priority
Representatives, for themselves and on behalf of the Second Priority Debt
Parties under their Second Priority Debt Facilities, seek or request adequate
protection and such adequate protection is granted in the form of additional or
replacement collateral, then such Second Priority Representatives, for
themselves and on behalf of each Second Priority Debt Party under their Second
Priority Debt Facilities, agree that each Senior Representative shall also be
granted a senior Lien on such additional or replacement collateral as security
for the Senior Obligations and any such DIP Financing and that any Lien on such
additional or replacement collateral securing the Second Priority Debt
Obligations shall be subordinated to the Liens on such collateral securing the
Senior Obligations and any such DIP Financing (and all obligations relating
thereto and any reasonable “carve-out”) and any other Liens granted to the
Senior Secured Parties as adequate protection on the same basis as the other
Liens securing the Second Priority Debt Obligations are so subordinated to such
Liens securing Senior Obligations under this Agreement (and, to the extent the
Senior Secured Parties are not granted such adequate protection in such form,
any amounts recovered by or distributed to any Second Priority Debt Party
pursuant to or as a result of any Lien on such additional or replacement
collateral so granted to the Second Priority Debt Parties shall be subject to
Section 4.02), and (iii) in the event any Second Priority Representatives, for
themselves and on behalf of the Second Priority Debt Parties under their Second
Priority Debt Facilities, seek or request adequate protection and such adequate
protection is granted (in each instance, to the extent such grant is otherwise
permissible under the terms and conditions of this Agreement) in the form of a
superpriority claim, then such Second Priority Representatives, for themselves
and on behalf of each Second Priority Debt Party under their Second Priority
Debt Facilities, agree that each Senior Representative shall also be granted
adequate protection in the form of a superpriority claim, which superpriority
claim shall be senior to the claims of the Second Priority Debt Parties (and, to
the extent the Senior Secured Parties are not granted such adequate protection
in such form, any amounts recovered by or distributed to any Second Priority
Debt Party pursuant to or as a result of any such superpriority claim so granted
to the Second Priority Debt Parties shall be subject to Section 4.02).  Without
limiting the generality of the foregoing, to the extent that the Senior 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
Debt 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); provided that if such payments are received by any Second Priority
Debt Party prior to the Discharge of Senior Obligations, then upon the effective
date of any plan or the conclusion or dismissal of any Insolvency or Liquidation
Proceeding, the Second Priority Debt Parties will pay over to Senior
Representative pursuant to Section 4.01 an amount equal to the lesser of (x) the
total amount of such payments and (y) the amount necessary to achieve the
Discharge of Senior Obligations.  The Senior Debt Parties reserve the right to
contest any such payments to the Second Priority Debt Parties to the extent such
payments are inconsistent with the terms of this Section 6.03.

 

SECTION 6.04.                                     Preference Issues.  If any
Senior Secured Party is required in any Insolvency or Liquidation Proceeding or
otherwise to disgorge, turn over or otherwise pay any amount to the estate of
any Borrower or any other Grantor (or any trustee, receiver or similar Person
therefor),

 

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because the payment of such amount was declared to be fraudulent or preferential
in any respect or for any other reason, any amount (a “Recovery”), whether
received as Proceeds of security, enforcement of any right of setoff or
otherwise, then the Senior Obligations shall be reinstated to the extent of such
Recovery and deemed to be outstanding as if such payment had not occurred and
the Senior Secured Parties shall be entitled to the benefits of this Agreement
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 Debt Party under its Second
Priority Debt Facility, hereby agrees that none of them shall be entitled to
benefit from any avoidance action affecting or otherwise relating to any
distribution or allocation made in accordance with this Agreement, whether by
preference or otherwise, it being understood and agreed that the benefit of such
avoidance action otherwise allocable to them shall instead be allocated and
turned over for application in accordance with the priorities set forth in this
Agreement.

 

SECTION 6.05.                                     Separate Grants of Security
and Separate Classifications.  Each Second Priority Representative, for itself
and on behalf of each Second Priority Debt Party under its Second Priority Debt
Facility, acknowledges and agrees that (a) the grants of Liens pursuant to the
Senior Collateral Documents and the Second Priority Collateral Documents
constitute separate and distinct grants of Liens and (b) because of, among other
things, their differing rights in the Shared Collateral, the Second Priority
Debt Obligations are fundamentally different from the Senior Obligations and
must be separately classified in any plan of reorganization proposed, 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 Secured Parties and the Second Priority
Debt Parties in respect of the Shared Collateral constitute a single class of
claims (rather than separate classes of senior and junior secured claims), then
each Second Priority Representative, for itself and on behalf of each Second
Priority Debt Party under its Second Priority Debt Facility, hereby acknowledges
and agrees that all distributions 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 Debt Parties), the
Senior Secured Parties shall be entitled to receive, in addition to amounts
distributed to them in respect of principal, pre-petition interest and other
claims, all amounts owing in respect of post-petition interest, fees and
expenses (whether or not allowed or allowable 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 Debt 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 Debt Parties.

 

SECTION 6.06.                                     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.

 

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SECTION 6.07.                                     506(c) and 552 Claims.  Until
the Discharge of Senior Obligations has occurred, each Second Priority
Representative, on behalf of itself and each Second Priority Debt Party under
its Second Priority Debt Facility, agrees that it will not assert or enforce any
claim under Section 506(c) or Section 552 of the Bankruptcy Code or any similar
provision of any other Bankruptcy Law with respect to any Shared Collateral.

 

SECTION 6.08.                                     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 or similar dispositive restructuring plan, on account of both the
Senior Obligations and the Second Priority Debt Obligations, then, to the extent
the debt obligations distributed on account of the Senior Obligations and on
account of the Second Priority Debt Obligations are secured by Liens upon the
same assets or property, the provisions of this Agreement will survive the
distribution of such debt obligations pursuant to such plan and will apply with
like effect to the Liens securing such debt obligations.

 

(b)                                 The Second Priority Debt Parties (whether in
the capacity of a secured creditor or an unsecured creditor) may propose, vote
in favor of, or otherwise directly or indirectly support any plan of
reorganization of any Grantor so long as (i) such plan is not inconsistent with
the provisions of this Agreement and (ii) (x) such plan provides for the
Discharge of Senior Obligations or (y) the Senior Secured Parties, as a class
under any such plan, vote to accept such plan of reorganization.

 

SECTION 6.09.                                     Section 1111(b) of the
Bankruptcy Code.  The Second Priority Representative, for itself and on behalf
of each Second Priority Debt Party under its Second Priority Debt Facility,
shall not object to, oppose, or support any objection of any election by a
Senior Secured Party under Section 1111(b)(2) of the Bankruptcy Code or any
similar provision of any other Bankruptcy Law.  The Second Priority
Representative, for itself and on behalf of each Second Priority Debt Party
under its Second Priority Debt Facility, waives any claim it may hereafter have
against any senior claimholder arising out of the election by any Senior Secured
Party of the application of Section 1111(b)(2) of the Bankruptcy Code or any
similar provision of any other Bankruptcy Law

 

SECTION 6.10.                                     Post-Petition Interest.

 

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

 

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

 

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ARTICLE VII

 

Reliance; Etc.

 

SECTION 7.01.                                     Reliance.  The consent by the
Senior Secured Parties to the execution and delivery of the Second Priority Debt
Documents to which the Senior 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 Secured Parties to any Grantor or any Subsidiaries thereof shall be
deemed to have been given and made in reliance upon this Agreement.  Each Second
Priority Representative, on behalf of itself and each Second Priority Debt Party
under its Second Priority Debt Facility, acknowledges that it and such Second
Priority Debt Parties have, independently and without reliance on any Senior
Representative or other Senior Secured Party, 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
decisions 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 Debt Party under its Second Priority Debt Facility, acknowledges and
agrees that neither any Senior Representative nor any other Senior Secured Party
has made any express or implied representation or warranty, including with
respect to the execution, validity, legality, completeness, collectibility or
enforceability of any of the Senior Debt Documents, the ownership of any Shared
Collateral or the perfection or priority of any Liens thereon.  The Senior
Secured Parties will be entitled to manage and supervise their respective loans
and extensions of credit under the Senior Debt Documents in accordance with law
and as they may otherwise, in their sole discretion, deem appropriate, and the
Senior Secured Parties may manage their loans and extensions of credit without
regard to any rights or interests that the Second Priority Representatives and
the Second Priority Debt Parties have in the Shared Collateral or otherwise,
except as otherwise provided in this Agreement.  Neither any Senior
Representative nor any other Senior Secured Party shall have any duty to any
Second Priority Representative or Second Priority Debt Party to act or refrain
from acting in a manner that allows, or results in, the occurrence or
continuance of an event of default or default under any agreement with the
Borrower or any Subsidiaries of the Borrower (including the Second Priority Debt
Documents), regardless of any knowledge thereof that they may have or be charged
with.  Except as expressly set forth in this Agreement, the Senior
Representatives, the Senior Secured Parties, the Second Priority Representatives
and the Second Priority Debt Parties have not otherwise made to each other, nor
do they hereby make to each other, any warranties, express or implied, nor do
they assume any liability to each other with respect to (a) the enforceability,
validity, value or 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 Representatives,
the Senior Secured Parties, the Second Priority Representatives and the Second
Priority Debt Parties hereunder shall remain in full force and effect
irrespective of:

 

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

 

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

 

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otherwise, of the terms of the Credit Agreement or any other Senior Debt
Document or of the terms of any Second Priority Debt Document; provided that
(i) any such increase in the Senior Obligations that comprise principal in
respect of loans or notes outstanding under the Senior Debt Documents shall not
increase the sum of the outstanding principal amount under the Senior Debt
Documents to an amount in excess of the Senior Cap and (ii) any such increase in
the Second Priority Debt Obligations that comprise principal in respect of loans
or notes outstanding under the Second Priority Debt Documents shall not increase
the sum of the outstanding principal amount under the Second Priority Debt
Documents to an amount in excess of the Second Priority Cap;

 

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

 

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

 

(e)                                  any other circumstances that otherwise
might constitute a defense available to, or a discharge of, (i) any Borrower or
any other Grantor in respect of the Senior Obligations (other than as set forth
in Section 5.06 hereof or other payments or performance) or (ii) any Second
Priority Representative or Second Priority Debt Party in respect of this
Agreement.

 

ARTICLE VIII

 

Miscellaneous

 

SECTION 8.01.                                     Conflicts.  In the event of
any conflict between the provisions of this Agreement and the provisions of any
Senior Debt Document or any Second Priority Debt Document, the provisions of
this Agreement shall govern.  Notwithstanding the foregoing, (i) the relative
rights and obligations of the Administrative Agent, the Senior Representatives
and the Senior Secured Parties (as amongst themselves) with respect to any
Senior Collateral shall be governed by the terms of any applicable Pari
Intercreditor Agreement and in the event of any conflict between any Pari
Intercreditor Agreement and this Agreement with respect to such rights and
obligations, the provisions of such Pari Intercreditor Agreement shall control,
(ii) the relative rights and obligations of the Initial Second Priority
Representative, the other Second Priority Representatives and the Second
Priority Secured Parties (as amongst themselves) with respect to any Second
Priority Collateral shall be governed by the terms of any applicable Pari
Intercreditor Agreement and in the event of any conflict between any Pari
Intercreditor Agreement and this Agreement with respect to such rights and
obligations, the provisions of such Pari Intercreditor Agreement shall control
and (iii) the relative rights and obligations of the Senior Secured Parties and
the Second Priority Secured Parties, on the one hand, and the ABL Secured
Parties, on the other hand, with respect to any Shared Collateral shall be
governed by the terms of the ABL/Term Intercreditor Agreement and in the event
of any conflict between the ABL/Term Intercreditor Agreement, this Agreement and
any Pari Intercreditor Agreement with respect to such rights and obligations,
the provisions of the ABL/Term 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 Secured
Parties may continue, at any time and without notice to the Second Priority
Representatives or any Second Priority Debt Party, to extend credit and other
financial accommodations and lend monies to or for the benefit of any Grantor or
any Subsidiaries thereof constituting Senior Obligations in reliance hereon. 
The terms of

 

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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.

 

(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) and the Grantors.  Any such
amendment, supplement or waiver shall be in writing and shall be binding upon
the Senior Secured Parties and the Second Priority Debt Parties and their
respective successors and assigns.

 

(c)                                  Notwithstanding the foregoing, without the
consent of any Secured Party, any Representative may become a party hereto by
execution and delivery of a Joinder Agreement in accordance with Section 8.09 of
this Agreement and upon such execution and delivery, such Representative and the
Secured Parties and Senior Obligations or Second Priority Debt Obligations of
the Debt Facility for which such Representative is acting shall be subject to
the terms hereof.

 

SECTION 8.04.        Information Concerning Financial Condition of the Borrower
and the Subsidiaries.  The Senior Representatives, the Senior 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 any Grantor or any Subsidiary thereof and all endorsers or
guarantors of the Senior Obligations or the Second Priority Debt Obligations and
(b) all other circumstances bearing upon the risk of nonpayment of the Senior
Obligations or the Second Priority Debt Obligations.  The Senior
Representatives, the Senior Secured Parties, the Second Priority Representatives
and the Second Priority Secured Parties shall have no duty to advise any other
party hereunder of information known to it or them regarding such condition or
any such circumstances or otherwise.  In the event that any Senior
Representative, any Senior Secured Party, any Second Priority Representative or
any Second Priority Debt Party, in its sole discretion, undertakes at any time
or from time to time to provide any such information to any other party, it
shall be under no obligation to (i) make, and the Senior Representatives, the
Senior Secured Parties, the Second Priority Representatives and the Second
Priority Debt Parties shall not make or be deemed to have made, any express or
implied representation or warranty, including with respect to the 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.

 

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

 

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

 

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

 

SECTION 8.08.        [Reserved].

 

SECTION 8.09.        Additional Debt Facilities.  To the extent, but only to the
extent, permitted by the provisions of the Senior Debt Documents and the Second
Priority Debt Documents, the Borrower may incur or issue and sell one or more
series or classes of Second Priority Debt and one or more series or classes of
Additional Senior Debt, and (a) any such additional class or series of Second
Priority Debt (the “Second Priority Class Debt”) may be secured by a junior
priority, subordinated Lien on Shared Collateral, in each case under and
pursuant to the relevant Second Priority Collateral Documents for such Second
Priority Class Debt, if and subject to the condition that the Representative of
any such Second Priority Class Debt (each, a “Second Priority Class Debt
Representative”), acting on behalf of the holders of such Second Priority
Class Debt (such Representative and holders in respect of any Second Priority
Class Debt being referred to as the “Second Priority Class Debt Parties”),
becomes a party to this Agreement by satisfying conditions (i) through (iii), as
applicable of this Section 8.09 and (b) any such additional class or series of
Senior Facilities (the “Senior Class Debt”; and the Senior Class Debt and Second
Priority Class Debt, collectively, the “Class Debt”) may be secured by a senior
Lien on Shared Collateral, in each case under and pursuant to the relevant
Senior Collateral Documents, if and subject to the condition that the
Representative of any such Senior Class Debt (each, a “Senior Class Debt
Representative”; and the Senior Class Debt Representatives and Second Priority
Class Debt Representatives, collectively, the “Class Debt Representatives”),
acting on behalf of the holders of such Senior Class Debt (such Representative
and holders in respect of any such Senior Class Debt being referred to as the
“Senior Class Debt Parties”; and the Senior Class Debt Parties and Second
Priority Class Debt Parties, collectively, the “Class Debt Parties”), becomes a
party to this Agreement by satisfying the conditions set forth in clauses
(i) through (iii), as applicable, of this Section 8.09.  In order for a
Class Debt Representative to become a party to this Agreement:

 

(i)                  such Class Debt Representative shall have executed and
delivered a Joinder Agreement substantially in the form of Annex II (if such
Representative is a Second Priority

 

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

 

(ii)               the Borrower shall have delivered to the Designated Senior
Representative a certificate from a Responsible Officer stating that the
conditions set forth in this Section 8.09 are satisfied (or waived) with respect
to such Class Debt and, if requested, true and complete copies of each of the
material Second Priority Debt Documents or material Senior Debt Documents, as
applicable, relating to such Class Debt, certified as being true and correct in
all material respects by an Authorized Officer of each Borrower; and identifying
the obligations to be designated as Additional Senior Debt or Second Priority
Debt, as applicable, and certifying that such obligations are permitted to be
incurred and secured (I) in the case of Additional Senior Debt, on a pari passu
basis with the Senior Obligations, under each of the Senior Debt Documents and
the Second Priority Debt Documents and (II) in the case of Second Priority Debt,
on a junior basis to the Senior Obligations, under each of the Senior Debt
Documents and the Second Priority Debt Documents; and

 

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

 

SECTION 8.10.        Consent to Jurisdiction; Waivers.  Each Representative, on
behalf of itself and the Secured Parties of the Debt Facility for which it is
acting, and each Grantor, irrevocably and unconditionally:

 

(a)                                 submits for itself and its property in any
legal action or proceeding relating to this Agreement and the other Collateral
Documents to which it is a party to the exclusive general jurisdiction of the
courts of the State of New York or the courts of the United States for the
Southern District of New York, in each case sitting in New York City in the
Borough of Manhattan, and appellate courts from any thereof;

 

(b)                                 consents that any such action or proceeding
may be brought in such courts and waives (to the extent permitted by applicable
law) 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 or to
commence or support any such action or proceeding in any other courts;

 

(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 at its address set forth 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 or to commence legal proceedings or
otherwise proceed against Holdings or any Borrower or any other Grantor in any
other jurisdiction; and

 

(e)                                  without limitation of any indemnification
obligations made by a Grantor in favor of any Secured Party, waives, to the
maximum extent not prohibited by law, any right it may have to

 

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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 any Borrower or any Grantor, to the Borrower, at its
address at:

 

99 Cents Only Stores LLC

4000 Union Pacific Avenue

City of Commerce, California 90023
Attn:  Felicia Thornton, Chief Financial Officer

 

with copies to (which shall not constitute notice):

 

Proskauer Rose LLP
2049 Century Park East
Los Angeles, CA 90067
Attn: Michael A. Woronoff, Esq.

 

(ii)               if to the Initial Second Priority Representative to it at:

 

Wilmington Trust, National Association

50 South Sixth Street, Suite 1290

Minneapolis, MN 55402

Attn: Josh James, Vice President

Fax: (612) 217-5651

Email: jjames@wilmingtontrust.com

 

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

 

Duane Morris LLP

222 Delaware Avenue, Suite 1600

Wilmington, Delaware 19801

Attn: Chris Winter, Esq.

Fax:  (302) 397-2455

Email: cmwinter@duanemorris.com

 

(iii)            if to the Administrative Agent, to it at:

 

Royal Bank of Canada

RBC Agency Services Group

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

Attn:  Susan Khokher

 

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

 

34

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

 

Paul Hastings LLP
200 Park Avenue
New York, NY 10166
Randal D. Palach, Esq.

 

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

 

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

 

SECTION 8.12.        Further Assurances.  Each Senior Representative, on behalf
of itself and each Senior Secured Party under the Senior Debt Facility for which
it is acting, each Second Party Representative, on behalf of itself, and each
Second Priority Debt Party under its Second Priority Debt Facility, agrees that
it will take such further action and shall execute and deliver such additional
documents and instruments (in recordable form, if requested) as the other
parties hereto may reasonably request to effectuate the terms of, and the Lien
priorities contemplated by, this Agreement.

 

SECTION 8.13.        GOVERNING LAW; WAIVER OF JURY TRIAL.

 

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

 

(B)                               EACH PARTY HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVE (TO THE EXTENT PERMITTED BY APPLICABLE LAW) 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 and inure to the benefit of the Senior Representatives, the Senior
Secured Parties, the Second Priority Representatives, the Second Priority Debt
Parties, the Borrower, the other Grantors party hereto and their respective
permitted successors and assigns.

 

SECTION 8.15.        Section Headings.  Section headings herein are included for
convenience of reference only and shall not affect the interpretation of this
Agreement.

 

SECTION 8.16.        Counterparts.  This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by facsimile or other electronic transmission), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.

 

35

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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
Administrative Agent represents and warrants that this Agreement is binding upon
the Credit Agreement Secured Parties under the Credit Agreement Loan Documents. 
The Initial Second Priority Representative represents and warrants that this
Agreement is binding upon the Initial Second Priority Debt Parties under the
Second Priority Debt Documents.

 

SECTION 8.18.        No Third Party Beneficiaries; Successors and Assigns.  This
Agreement and the rights and benefits hereof shall inure to the benefit of each
of the parties hereto and its respective successors and assigns and shall inure
to the benefit of and bind each of the Senior Secured Parties and the Second
Priority Debt Parties.  Nothing in this Agreement shall impair, as between the
Borrower and the other Grantors and the Senior Representatives and the Senior
Secured Parties, and as between the Borrower and the other Grantors and the
Second Priority Representatives and the Second Priority Debt Parties, the
obligations of the Borrower and the other Grantors, which are absolute and
unconditional, to pay principal, interest, fees and other amounts as provided in
the Senior Debt Documents and the Second Priority Debt Documents respectively.

 

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

 

SECTION 8.20.        Administrative Agent and Representative.  (a)  It is
understood and agreed that (i) the Administrative Agent is entering into this
Agreement in its capacity as administrative agent and collateral agent under the
Credit Agreement and the provisions of Article XI of the Credit Agreement shall
also apply to the Administrative Agent hereunder and (ii) Wilmington Trust,
National Association is entering into this Agreement in its capacity as
administrative agent and collateral agent under the Initial Second Priority
Credit Agreement and the provisions of Article XI of the Initial Second Priority
Credit Agreement applicable to the Administrative Agent thereunder shall also
apply to the Administrative Agent hereunder.

 

(b)                                 Each Representative and Secured Party hereby
(i) appoints the Designated Term Debt Representative to act as the “Term Agent”
under and as defined in the ABL/Term Intercreditor Agreement and
(ii) acknowledges and agrees that the Secured Obligations constitute “Term
Obligations” under and as defined in the ABL/Term Intercreditor Agreement. 
Without limitation of the foregoing, each Representative and Secured Party
further acknowledges and agrees that it will be bound by and will take no
actions contrary to the provisions of the ABL/Term Intercreditor Agreement,
consents to the subordination of Liens on the ABL Priority Collateral (as
defined in the ABL/Term Intercreditor Agreement) securing the Secured
Obligations on the terms set forth in the ABL/Term Intercreditor Agreement and
authorizes and instructs the Designated Term Debt Representative to subject the
Liens on the Shared Collateral securing the Secured Obligations to the
provisions of the ABL/Term Intercreditor Agreement.  As between the Secured
Parties, on one hand, and the ABL Secured Parties, on the other hand, the
Designated Term Debt Representative (or any person authorized by it) shall have
the exclusive right on behalf of the Secured Parties to enforce rights, exercise
remedies (including setoff and the right to credit bid debt) and make
determinations regarding the release, disposition or restrictions with respect
to the Shared Collateral without any consultation with or the consent of any
other Representative or any Secured Party, in each case to the extent that such
exercise or enforcement is governed by the ABL/Term Intercreditor Agreement;
provided, however, that, solely as among the Secured Parties, nothing in this
Section 8.20(b) shall impair the rights or obligations of any Representative or
Secured Party to take such actions with respect to the Shared Collateral in
relation to the other Secured Parties as may be otherwise required or authorized
pursuant to this Agreement.

 

36

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

 

(c)                                  Each Representative and Secured Party
hereby acknowledges that one or more of the Representatives may from time to
time enter into the ABL/Term/Notes Intercreditor Agreement pursuant to the
Senior Debt Documents and/or the Second Priority Debt Documents, as applicable, 
and in such event hereby (i) appoints the Designated Term Debt Representative to
act as the “Designated Term Debt Representative” under and as defined in the
ABL/Term/Notes Intercreditor Agreement and (ii) acknowledges and agrees that the
Secured Obligations constitute “Senior Obligations” under and as defined in the
ABL/Term/Notes Intercreditor Agreement.  Without limitation of the foregoing,
each Representative and Secured Party further acknowledges and agrees that it
will be bound by and will take no actions contrary to the provisions of the
ABL/Term/Notes Intercreditor Agreement and authorizes and instructs the
Designated Term Debt Representative to subject the Liens on the Shared
Collateral securing the Secured Obligations to the provisions of the
ABL/Term/Notes Intercreditor Agreement.  As between the Secured Parties, on one
hand, and the ABL Secured Parties and the Junior Priority Debt Parties (as
defined in the ABL/Term/Notes Intercreditor Agreement), on the other hand, the
Designated Term Debt Representative (or any person authorized by it) shall have
the exclusive right on behalf of the Secured Parties to enforce rights, exercise
remedies (including setoff and the right to credit bid debt) and make
determinations regarding the release, disposition or restrictions with respect
to the Shared Collateral without any consultation with or the consent of any
other Representative or any Secured Party, in each case to the extent that such
exercise or enforcement is governed by the ABL/Term/Notes Intercreditor
Agreement; provided, however, that, solely as among the Secured Parties, nothing
in this Section 8.20(c) shall impair the rights or obligations of any
Representative or Secured Party to take such actions with respect to the Shared
Collateral in relation to the other Secured Parties as may be otherwise required
or authorized pursuant to this Agreement.

 

(d)                                 The Designated Term Debt Representative,
acting in such capacity, shall have no obligation whatsoever to any other
Representative or Secured Party to protect or preserve rights or benefits of any
Person or any rights pertaining to the Shared Collateral, and shall not in such
capacity have any duties or responsibilities to any other Representative,
Secured Party or any other Person.

 

(e)                                  The Designated Term Debt Representative
shall not have by reason of this Agreement, the ABL/Term Intercreditor
Agreement, the ABL/Notes/Term Intercreditor Agreement or any other document, a
fiduciary relationship in respect of any Representative or any Secured Party,
and each, Representative, for itself and on behalf of each Secured Party under
its applicable Debt Facility, hereby waives and releases the Designated Term
Debt Representative from all claims and liabilities arising from the Designated
Term Debt Representative acting in such capacity.

 

SECTION 8.21.        Relative Rights.  Notwithstanding anything in this
Agreement to the contrary, nothing in this Agreement is intended to or will
(a) (except to the extent expressly contemplated herein) amend, waive or
otherwise modify the provisions of any Senior Debt Document or any Second
Priority Debt Documents, or permit the Borrower or any Grantor to take any
action, or fail to take any action, to the extent such action or failure would
otherwise constitute a breach of, or default under, any Senior Debt Document or
any Second Priority Debt Documents, (b) change the relative priorities of the
Senior Obligations or the Liens granted under the Senior Collateral Documents on
the Shared Collateral (or any other assets) as among the Senior Secured Parties,
(c) otherwise change the relative rights of the Senior Secured Parties in
respect of the Shared Collateral as among such Senior Secured Parties,
(d) change the relative priorities of the Second Priority Debt Obligations or
the Liens granted under the Second Priority Collateral Documents on the Shared
Collateral (or any other assets) as among the Second Priority Secured Parties or
(e) otherwise change the relative rights of the Second Priority Secured Parties
in respect of the Shared Collateral as among such Second Priority Secured
Parties.

 

37

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

 

SECTION 8.22.        No Effect on Other Interests.  Notwithstanding anything in
this Agreement to the contrary, nothing in this Agreement shall restrict or have
any effect on any rights or duties any Second Priority Debt Party (including its
directors, officers, employees or affiliates) may have in any capacity other
than as a Second Priority Debt Party, including without limitation, its capacity
as a direct or indirect holder of equity of any Grantor or Guarantor, a member
of the Board of Directors of any Grantor or Guarantor, or a holder of any other
obligations of Grantor or Guarantor, including, without limitation, any
fiduciary obligations with respect thereto.

 

SECTION 8.23.        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.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

38

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

 

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.

 

 

ROYAL BANK OF CANADA,

 

as Administrative Agent

 

 

 

 

 

By:

/s/ Susan, Khokher

 

 

Name: Susan, Khokher

 

 

Title: Manager, Agency

 

 

 

 

 

WILMINGTON TRUST, NATIONAL ASSOCIATION,

 

as Initial Second Priority Representative

 

 

 

 

 

 

By:

/s/ Joshua G. James

 

 

Name: Joshua G. James

 

 

Title: Vice President

 

Signature Page to

[Term Loan Intercreditor Agreement]

 

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

 

 

99 CENTS ONLY STORES LLC,

 

 

 

 

 

 

By:

/s/ Felicia Thornton

 

 

Name: Felicia Thornton

 

 

Title: Chief Financial Officer

 

 

 

 

 

NUMBER HOLDINGS, INC.

 

 

 

 

 

By:

/s/ Felicia Thornton

 

 

Name: Felicia Thornton

 

 

Title: Chief Financial Officer

 

 

 

 

 

99 CENTS ONLY STORES TEXAS, INC.

 

 

 

 

 

By:

/s/ Felicia Thornton

 

 

Name: Felicia Thornton

 

 

Title: Chief Financial Officer

 

Signature Page to

[Term Loan Intercreditor Agreement]

 

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

 

ANNEX I

 

SUPPLEMENT NO. [  ], dated as of [  ], to the TERM LOAN INTERCREDITOR AGREEMENT,
dated as of November 7, 2017 (as amended, restated, supplemented or otherwise
modified from time to time, the “Term Loan Intercreditor Agreement”), among
NUMBER HOLDINGS, INC. (“Holdings”), 99 CENTS ONLY STORES LLC (the “Borrower”),
certain subsidiaries and affiliates of the Borrower (each a “Grantor”), ROYAL
BANK OF CANADA, as Administrative Agent under the Credit Agreement, WILMINGTON
TRUST, NATIONAL ASSOCIATION, as Initial Second Priority Representative, and the
additional Representatives from time to time a party thereto.

 

A.            Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Term Loan Intercreditor
Agreement.  Section 1.02 contained in the Term Loan Intercreditor Agreement is
incorporated herein, mutatis mutandis, as if a part hereof.

 

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

 

Accordingly, the Designated Senior Representative and the New Subsidiary Grantor
agree as follows:

 

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

 

SECTION 2.  The New Grantor represents and warrants to the Designated Senior
Representative and the other Secured Parties on the date hereof that this
Supplement has been duly authorized, executed and delivered by it and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms.

 

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

 

SECTION 4.  Except as expressly supplemented hereby, the Term Loan Intercreditor
Agreement shall remain in full force and effect.

 

SECTION 5.  THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

 

Annex II-1

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

 

SECTION 6.  In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, no
party hereto shall be required to comply with such provision for so long as such
provision is held to be invalid, illegal or unenforceable, but the validity,
legality and enforceability of the remaining provisions contained herein and in
the Term Loan 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 Term Loan Intercreditor Agreement.  All
communications and notices hereunder to the New Grantor shall be given to it in
care of the Borrower as specified in the Term Loan Intercreditor Agreement.

 

SECTION 8.  The Borrower agrees to reimburse the Designated Senior
Representative for its reasonable out-of-pocket expenses in connection with this
Supplement, including the reasonable fees, other charges and disbursements of
counsel for the Designated Senior Representative to the extent reimbursable
under the Senior Debt Documents.

 

Annex I-2

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

 

IN WITNESS WHEREOF, the New Grantor, and the Designated Senior Representative
have duly executed this Supplement to the Term Loan Intercreditor Agreement as
of the day and year first above written.

 

 

[NAME OF NEW SUBSIDIARY GRANTOR]

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

Acknowledged by:

 

 

 

 

 

[·],

 

as Designated Senior Representative

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

[·],

 

as Designated Second Priority Representative

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

Annex I-3

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

 

ANNEX II

 

[FORM OF] REPRESENTATIVE SUPPLEMENT NO. [  ], dated as of [  ], to the TERM LOAN
INTERCREDITOR AGREEMENT, dated as of November 7, 2017 (as amended, restated,
supplemented or otherwise modified from time to time, the “Term Loan
Intercreditor Agreement”), among NUMBER HOLDINGS, INC. (“Holdings”), 99 CENTS
ONLY STORES LLC (the “Borrower”), certain subsidiaries and affiliates of the
Borrower (each a “Grantor”), ROYAL BANK OF CANADA, as Administrative Agent under
the Credit Agreement, WILMINGTON TRUST, NATIONAL ASSOCIATION, as Initial Second
Priority Representative, and the additional Representatives from time to time a
party thereto.

 

A.                                    Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Term Loan Intercreditor Agreement.  Section 1.02 contained in the Term Loan
Intercreditor Agreement is incorporated herein, mutatis mutandis, as if a part
hereof.

 

B.                                    As a condition to the ability of the
Borrower to incur Second Priority Debt 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 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 Term Loan Intercreditor Agreement. 
Section 8.09 of the Term Loan 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 Term Loan 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 Term Loan
Intercreditor Agreement.  The undersigned Second Priority Class Debt
Representative (the “New Representative”) is executing this Supplement in
accordance with the requirements of the Senior Debt Documents and the Second
Priority Debt Documents.

 

Accordingly, the Designated Senior Representative and the New Representative
agree as follows:

 

SECTION 1.  In accordance with Section 8.09 of the Term Loan 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 Term Loan
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 Term Loan
Intercreditor Agreement applicable to it as a Second Priority Representative and
to the Second Priority Class Debt Parties that it represents as Second Priority
Debt Parties.  Each reference to a “Representative” or “Second Priority
Representative” in the Term Loan Intercreditor Agreement shall be deemed to
include the New Representative.  The Term Loan 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 new 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

 

Annex II-1

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

 

respect of such Second Priority Class Debt will be subject to and bound by the
provisions of the Term Loan Intercreditor Agreement as Second Priority Debt
Parties.

 

SECTION 3.  This Representative Supplement may be executed in counterparts, each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.  This Representative Supplement shall become
effective when the Designated Senior Representative 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 Term Loan Intercreditor
Agreement shall remain in full force and effect.

 

SECTION 5.  THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW 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 Term Loan 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 Term Loan Intercreditor Agreement.  All
communications and notices hereunder to the New Representative shall be given to
it at the address set forth below its signature hereto.

 

SECTION 8.  The Borrower agrees to reimburse the Designated Senior
Representative for its reasonable out-of-pocket expenses in connection with this
Representative Supplement, including the reasonable fees, other charges and
disbursements of counsel for the Designated Senior Representative to the extent
reimbursable under the Senior Debt Documents.

 

Annex II-2

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

 

IN WITNESS WHEREOF, the New Representative and the Designated Senior
Representative have duly executed this Representative Supplement to the Term
Loan 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:

 

Annex II-3

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

 

Acknowledged by:

 

 

 

99 CENTS ONLY STORES LLC

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

NUMBER HOLDINGS, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

THE GRANTORS

 

LISTED ON SCHEDULE I HERETO

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

Annex II-4

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

 

Schedule I to the
Representative Supplement to the
Term Loan Intercreditor Agreement

 

Grantors

 

[                          ]

 

Annex II-5

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

 

ANNEX III

 

[FORM OF] REPRESENTATIVE SUPPLEMENT NO. [  ], dated as of [  ], to the TERM LOAN
INTERCREDITOR AGREEMENT, dated as of November 7, 2017 (as amended, restated,
supplemented or otherwise modified from time to time, the “Term Loan
Intercreditor Agreement”), among NUMBER HOLDINGS, INC. (“Holdings”), 99 CENTS
ONLY STORES LLC (the “Borrower”), certain subsidiaries and affiliates of the
Borrower (each a “Grantor”), ROYAL BANK OF CANADA, as Administrative Agent under
the Credit Agreement, WILMINGTON TRUST, NATIONAL ASSOCIATION, as Initial Second
Priority Representative, and the additional Representatives from time to time a
party thereto.

 

A.                                    Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Term Loan Intercreditor Agreement.  Section 1.02 contained in the Term Loan
Intercreditor Agreement is incorporated herein, mutatis mutandis, as if a part
hereof.

 

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

 

Accordingly, the Designated Senior Representative and the New Representative
agree as follows:

 

SECTION 1.  In accordance with Section 8.09 of the Term Loan Intercreditor
Agreement, the New Representative by its signature below becomes a
Representative under, and the related Senior Class Debt and Senior Class Debt
Parties become subject to and bound by, the Term Loan 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 Class Debt Parties, hereby agrees to all the terms and
provisions of the Term Loan Intercreditor Agreement applicable to it as a Senior
Representative and to the Senior Class Debt Parties that it represents as Senior
Debt Parties.  Each reference to a “Representative” or “Senior Representative”
in the Term Loan Intercreditor Agreement shall be deemed to include the New
Representative.  The Term Loan 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 new 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 Debt Documents
relating to such Senior Class Debt provide that, upon the New Representative’s
entry into this Agreement, the Senior Class Debt Parties in respect of such
Senior Class

 

Annex III-1

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Debt will be subject to and bound by the provisions of the Term Loan
Intercreditor Agreement as 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 Term Loan Intercreditor
Agreement shall remain in full force and effect.

 

SECTION 5.  THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW 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 Term Loan 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 Term Loan Intercreditor Agreement.  All
communications and notices hereunder to the New Representative shall be given to
it at the address set forth below its signature hereto.

 

SECTION 8.  The Borrower agrees to reimburse the Designated Senior
Representative for its reasonable out-of-pocket expenses in connection with this
Representative Supplement, including the reasonable fees, other charges and
disbursements of counsel for the Designated Senior Representative to the extent
reimbursable under the Senior Debt Documents.

 

Annex 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 Term
Loan 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:

 

Annex III-3

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Acknowledged by:

 

 

 

99 CENTS ONLY STORES LLC

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

NUMBER HOLDINGS, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

THE GRANTORS

 

LISTED ON SCHEDULE I HERETO

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

Annex III-4

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Schedule I to the
Representative Supplement to the
Term Loan Intercreditor Agreement

 

Grantors

 

[               ]

 

Annex III-5

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