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

Exhibit 10.5
 
Execution Version

Second Lien Intercreditor Agreement

Dated as of February 17, 2017 among

Fifth Third Bank, an Ohio banking corporation,
as First Lien Collateral Agent for the First Lien Claimholders,

Prospect Capital Corporation, a Maryland corporation,
as Second Lien Collateral Agent for the Second Lien Claimholders,

Turning Point Brands, Inc. and North Atlantic Trading Company, Inc.,
as Borrowers,

and the other Grantors referred to herein
 

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

Table of Contents
 
Section
Heading
Page

 
Section 1.
Definitions
2
 
Section 1.1.
 
Defined Terms
2
 
Section 1.2.
 
Terms Generally
10
         
Section 2.
Lien Priorities
10
       
Section 2.1.
 
Relative Priorities
10
 
Section 2.2.
 
Prohibition on Contesting Liens; No Marshaling
11
 
Section 2.3.
 
No New Liens and Guarantors
11
 
Section 2.4.
 
Similar Liens and Agreements
12
 
Section 2.5.
 
Perfection of Liens
13
         
Section 3.
Enforcement
13
       
Section 3.1.
 
Exercise of Remedies
13
 
Section 3.2.
 
Actions Upon Breach; Specific Performance
17
         
Section 4.
Payments
17
       
Section 4.1.
 
Application of Proceeds
17
 
Section 4.2.
 
Payments Over
18
         
Section 5.
Other Agreements
19
       
Section 5.1.
 
Releases
19
 
Section 5.2.
 
Insurance
20
 
Section 5.3.
 
Amendments to First Lien Loan Documents and Second Lien Loan Documents
21
 
Section 5.4.
 
Confirmation of Subordination in Second Lien Collateral Documents
23
 
Section 5.5.
 
Gratuitous Bailee/Agent for Perfection
23
 
Section 5.6.
 
Reserved
25
 
Section 5.7.
 
Purchase Right
25
         
Section 6.
Insolvency or Liquidation Proceedings
27
       
Section 6.1.
 
Finance and Sale Issues
27
 
Section 6.2.
 
Relief from the Automatic Stay
29
 
Section 6.3.
 
Adequate Protection
29
 
Section 6.4.
 
No Waiver
31
 
Section 6.5.
Avoidance Issues
31
 
Section 6.6.
 
Reorganization Securities
31
 
Section 6.7.
 
Post-Petition Interest
31
 
Section 6.8.
 
Waiver
32

 
-i-

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

 
Section 6.9.
 
Separate Grants of Security and Separate Classification
32
 
Section 6.10.
 
Effectiveness in Insolvency or Liquidation Proceedings
33
         
Section 7.
 Reliance; Waivers; Etc
33
       
Section 7.1.
 
Reliance
33
 
Section 7.2.
 
No Warranties or Liability
33
 
Section 7.3.
 
No Waiver of Lien Priorities
34
 
Section 7.4.
 
Obligations Unconditional
35
         
Section 8.
Miscellaneous
36
       
Section 8.1.
 
Integration/Conflicts
36
 
Section 8.2.
 
Effectiveness; Continuing Nature of this Agreement; Severability
37
 
Section 8.3.
 
Amendments; Waivers
37
 
Section 8.4.
 
Information Concerning Financial Condition of the Grantors and their
Subsidiaries
38
 
Section 8.5.
 
Subrogation
38
 
Section 8.6.
 
Application of Payments
38
 
Section 8.7.
 
Reserved
39
 
Section 8.8.
 
Agency Capacities
39
 
Section 8.9.
 
Submission to Jurisdiction; Certain Waivers
39
 
Section 8.10.
 
Waiver of Jury Trial
40
 
Section 8.11.
 
Notices
40
 
Section 8.12.
 
Further Assurances
41
 
Section 8.13.
 
Applicable Law
41
 
Section 8.14.
 
Binding on Successors and Assigns
41
 
Section 8.15.
 
Section Headings
41
 
Section 8.16.
 
Counterparts
41
 
Section 8.17.
 
Authorization
42
 
Section 8.18.
 
No Third Party Beneficiaries/Provisions Solely to Define Relative Rights
42
 
Section 8.19.
 
No Indirect Actions
42

-ii-

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

 Second Lien Intercreditor Agreement

This Second Lien Intercreditor Agreement (as amended, restated, amended and
restated, supplemented or otherwise modified from time to time, this
“Agreement”), dated as of February 17, 2017 and entered into by and among Fifth
Third Bank, an Ohio banking corporation, in its capacity as administrative agent
under the First Lien Credit Agreement for the First Lien Claimholders (in such
capacity and together with its successors from time to time in such capacity,
the “First Lien Collateral Agent”), Prospect Capital Corporation, a Maryland
corporation, in its capacity as administrative agent under the Second Lien Loan
Agreement for the Second Lien Claimholders (in such capacity and together with
its successors from time to time in such capacity, the “Second Lien Collateral
Agent”), and acknowledged and agreed to by Turning Point Brands, Inc., a
Delaware corporation (“Turning Point”), North Atlantic Trading Company, Inc., a
Delaware corporation (“NATC”; Turning Point and NATC are each individually
referred to herein as a “Borrower” and are collectively referred to herein as
the “Borrowers”) and the other Grantors (as defined below).  Capitalized terms
used in this Agreement have the meanings assigned to them in Section 1 below.

Recitals

A.         The Borrowers, the Guarantors party thereto, the lenders party
thereto and the First Lien Collateral Agent have entered into that certain First
Lien Credit Agreement, dated as of the date hereof (as amended, restated,
amended and restated, supplemented or otherwise modified, replaced or Refinanced
from time to time, in each case in accordance herewith, the “First Lien Credit
Agreement”).

B.          The Borrowers, the Guarantors party thereto, the lenders party
thereto, Fifth Third Bank, as Administrative Sub-Agent, and the Second Lien
Collateral Agent have entered into that certain Second Lien Credit Agreement,
dated as of the date hereof (as amended, restated, amended and restated,
supplemented or otherwise modified, replaced or Refinanced from time to time, in
each case in accordance herewith, the “Second Lien Loan Agreement”).

C.          The Borrowers and the other Grantors (as defined below) have granted
to the First Lien Collateral Agent, for the benefit of the First Lien
Claimholders, a Lien (as defined below) on substantially all of their assets,
all as more particularly described in the First Lien Loan Documents (as defined
below).

D.          The Borrowers and the other Grantors have granted to the Second Lien
Collateral Agent, for the benefit of the Second Lien Claimholders, a Lien (as
defined below) on substantially all of their assets, all as more particularly
described in the Second Lien Loan Documents (as defined below).

E.          The Second Lien Collateral Agent, on behalf of the Second Lien
Claimholders, and the First Lien Collateral Agent, on behalf of the First Lien
Claimholders, wish to set forth their agreement as to certain of their
respective rights and obligations with respect to the assets of the Borrowers
and the other Grantors and their understanding relative to their respective
positions in such assets of the Borrowers and the other Grantors.
 

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

In consideration of the foregoing, the mutual covenants and obligations herein
set forth and for other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the First Lien Collateral Agent (for
itself and on behalf of each First Lien Claimholder) and the Second Lien
Collateral Agent (for itself and on behalf of each Second Lien Claimholder),
hereby agree as follows:

Section 1.           Definitions.

Section 1.1.          Defined Terms.  As used in this Agreement, the following
terms shall have the following meanings:

“Affiliate” means any Person directly or indirectly controlling (including all
officers, directors, partners, and managers of such Person) or controlled by, or
under direct or indirect common control with, another Person.  A Person shall be
deemed to control another Person for the purposes of this definition if such
Person possesses, directly or indirectly, the power to direct, or cause the
direction of, the management and policies of the other Person, whether through
the ownership of voting securities, common directors, managers, trustees or
officers, by contract or otherwise; provided that, in any event for purposes of
this definition, any Person that owns, directly or indirectly, 10.00% or more of
the securities having the ordinary voting power for the election of directors,
managers or governing body of a corporation or 10.00% or more of the partnership
or other ownership interest of any other Person (other than as a limited partner
of such other Person) will be deemed to control such corporation or other
Person.  In no event shall the First Lien Administrative Agent, the Second Lien
Administrative Agent, any First Lien Lender, any Second Lien Lender, or any of
their respective Affiliates, be deemed to be an Affiliate of any Grantors.

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

“Bank Product Liability” has the meaning assigned to that term in the First Lien
Credit Agreement.

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

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

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

“Borrower” and “Borrowers” have the meanings set forth in the preamble to this
Agreement.

“Business Day” means a day other than a Saturday, Sunday or other day on which
commercial banks in New York City or Cincinnati, Ohio are authorized or required
by law to close.
 
-2-

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

“Collateral” means, at any time, all of the assets and property of any Grantor,
whether real, personal or mixed, in which the holders of First Lien Obligations
and the holders of Second Lien Obligations (or their respective agents or
representatives) hold, purport to hold or are required to hold, a security
interest at such time (or, in the case of the First Lien Obligations, are deemed
pursuant to Section 2 to hold a security interest), including any property
subject to Liens granted pursuant to Section 6 to secure both First Lien
Obligations and Second Lien Obligations.

“Collateral Documents” means the First Lien Collateral Documents and the Second
Lien Collateral Documents.

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

“DIP Cap Amount” means, as of any date commitments in respect of any DIP
Financing are entered into, the greater of (a) $30,000,000 and (b) the product
of (i) the outstanding principal balance of the First Lien Obligations
(including the amount of any unfunded commitments under the First Lien Credit
Agreement) at the time of the commencement of the subject Insolvency or
Liquidation Proceeding times (ii) 115%.

“DIP Financing” has the meaning set forth in Section 6.1.

“Discharge” means, with respect to the First Lien Obligations or the Second Lien
Obligations, except to the extent otherwise provided in Section 5.3:

(a)          payment in full in cash (or other consideration acceptable to the
First Lien Claimholders or Second Lien Claimholders, as applicable) of the
principal of and interest (including interest accruing on or after the
commencement of any Insolvency or Liquidation Proceeding, whether or not such
interest would be allowed in such Insolvency or Liquidation Proceeding) on all
Indebtedness outstanding under the First Lien Loan Documents and constituting
First Lien Obligations or the Second Lien Loan Documents and constituting Second
Lien Obligations, as the case may be;

(b)          payment in full in cash (or other consideration acceptable to the
First Lien Claimholders or Second Lien Claimholders, as applicable) of all other
First Lien Obligations outstanding under the First Lien Loan Documents or all
other Second Lien Obligations outstanding under the Second Lien Loan Documents,
as the case may be, that are due and payable or otherwise accrued and owing at
or prior to the time such principal and interest are paid (other than any
indemnification obligations for which no claim or demand for payment, whether
oral or written, has been made at such time);

(c)          termination or expiration of all commitments, if any, to extend
credit that would constitute First Lien Obligations or Second Lien Obligations,
as the case may be; and
 
-3-

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

(d)          termination or cash collateralization (in an amount and manner
reasonably satisfactory to the applicable letter of credit issuer, but in no
event in an amount greater than 103% of the aggregate undrawn face amount), or
the making of other arrangements satisfactory to the applicable letter of credit
issuer of all letters of credit issued under the First Lien Loan Documents
constituting First Lien Obligations.

The term “Discharged” shall have a corresponding meaning.

“Discharge of First Lien Obligations” means the Discharge of all First Lien
Obligations.

“Discharge of Second Lien Obligations” means the Discharge of all Second Lien
Obligations.

“Disposition” has the meaning set forth in Section 5.1(b).

“Enforcement Action” means any action to:

(a)          foreclose, execute, levy, or collect on, take possession or control
of, sell or otherwise realize upon (judicially or non-judicially), or lease,
license, or otherwise dispose of (whether publicly or privately), Collateral or
Restricted Assets, or otherwise exercise or enforce remedial rights with respect
to Collateral or Restricted Assets under the First Lien Loan Documents or the
Second Lien Loan Documents (including by way of setoff, recoupment, notification
of a public or private sale or other disposition pursuant to the UCC or other
applicable law, notification to account debtors, notification to depositary
banks under deposit account control agreements, or exercise of rights under
landlord consents, if applicable);

(b)          solicit bids from third Persons to effect the liquidation or
disposition of Collateral or Restricted Assets or engage or retain sales
brokers, marketing agents, investment bankers, appraisers or auctioneers for the
purposes of commencing the marketing, promoting, or selling of any Collateral or
Restricted Assets;

(c)          receive a transfer of Collateral or Restricted Assets in
satisfaction of Indebtedness or any other Obligation secured thereby;

(d)          otherwise enforce a security interest or exercise another right or
remedy, as a secured creditor, pertaining to the Collateral at law, in equity,
or pursuant to the First Lien Loan Documents or Second Lien Loan Documents
(including the commencement of applicable legal proceedings or other actions
with respect to all or any portion of the Collateral to facilitate the actions
described in the preceding clauses, and exercising voting rights in respect of
equity interests comprising Collateral or Restricted Assets); or

(e)          effectuate or cause the Disposition of Collateral or Restricted
Assets by any Grantor after the occurrence and during the continuation of an
event of default under any of the First Lien Loan Documents or the Second Lien
Loan Documents with the consent of the applicable First Lien Collateral Agent
(or First Lien Claimholders) or Second Lien Collateral Agent (or Second Lien
Claimholders).
 
-4-

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

“Excess First Lien Obligations” means any Obligations that would constitute
First Lien Obligations if not for the First Lien Cap Amount.

“Exigent Circumstances” means with respect to a First Lien Purchase, an event or
circumstance that constitutes an “Event of Default” under and as defined in the
First Lien Loan Documents or that occurs during such Event of Default that
materially and imminently threatens the ability of any First Lien Collateral
Agent to realize upon all or a material part of the First Lien Collateral, such
as, without limitation, fraudulent removal, concealment or abscondment thereof,
destruction (other than to the extent covered by insurance) or material waste
thereof.

“First Lien Cap Amount” means, as of any date of determination, regardless of
whether the First Lien Credit Agreement is in effect on such date, the sum of
(a) 115% of (x) $195,000,000 plus (y) the aggregate principal amount of
Incremental Facilities (as defined in the First Lien Credit Agreement and
determined without giving effect to any amendments, waivers of, or consents to
the conditions to borrowing or amounts to be borrowed, thereunder) minus (b) the
aggregate amount of permanent reductions in revolving loan commitments
(excluding any automatic reductions resulting from an Insolvency or Liquidation
Proceeding) and repayments and prepayments of principal of term loans that are
First Lien Obligations (excluding any (x) voluntary prepayments of First Lien
Obligations, except to the extent such prepayments reduce scheduled payments or
mandatory prepayments otherwise due under the First Lien Credit Agreement and
(y) such repayments resulting from (i) a Refinancing of such Obligations or (ii)
a “roll up” of such Obligations in connection with a DIP Financing, in each
case, in accordance with the terms of this Agreement).  For the avoidance of
doubt, the First Lien Cap Amount shall apply only to principal with respect to
the Loans (including, for the avoidance of doubt, any Incremental Facilities (as
such term is defined in the First Lien Credit Agreement)) made and Letters of
Credit issued under the First Lien Credit Agreement and shall not include any
First Lien Obligations related to Hedging Liability or Bank Product Liability.

“First Lien Claimholders” means, at any relevant time, the holders of First Lien
Obligations at that time, including the First Lien Lenders, the First Lien
Collateral Agent and any affiliate thereof that is a holder of a Hedging
Obligation or Bank Product Liability.

“First Lien Collateral” means any “Collateral” as defined in any First Lien Loan
Document or any other assets of either Borrower or any other Grantor with
respect to which a Lien is granted or purported to be granted or required to be
granted pursuant to a First Lien Loan Document as security for any First Lien
Obligations and shall include any property or assets subject to replacement
Liens or adequate protection Liens in favor of any First Lien Claimholder.

“First Lien Collateral Agent” has the meaning set forth in the preamble to this
Agreement.

“First Lien Collateral Documents” means the “Collateral Documents” (as defined
in the First Lien Credit Agreement) and any other agreement, document or
instrument pursuant to which a Lien is granted securing any First Lien
Obligations or pursuant to which any such Lien is perfected.
 
-5-

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

“First Lien Credit Agreement” has the meaning set forth in the Recitals to this
Agreement.

“First Lien Enforcement Notice” has the meaning set forth in Section 5.7(a).

“First Lien Lenders” shall mean the “Lenders” under and as defined in the First
Lien Credit Agreement.

“First Lien Loan Documents” means the First Lien Credit Agreement and the other
“Loan Documents” as defined in the First Lien Credit Agreement and any other
document or agreement entered into for the purpose of evidencing, governing,
securing or perfecting the First Lien Obligations.

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

“First Lien Purchase” has the meaning set forth in Section 5.7(a).

“First Lien Purchase Notice” has the meaning set forth in Section 5.7(c).

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

“Grantors” means each of the Borrowers, the Guarantors and each other Person
that has or may from time to time hereafter execute and deliver any First Lien
Collateral Document and/or any Second Lien Collateral Document as a “debtor,”
“grantor” or “pledgor” (or the equivalent thereof) to secure any First Lien
Obligations and/or Second Lien Obligations.

“Guarantor” has the meaning assigned to that term in the First Lien Credit
Agreement and/or the Second Lien Loan Agreement, as applicable.

“Hedging Liability” has the meaning assigned to that term in the First Lien
Credit Agreement.

“Indebtedness” means and includes all Obligations that constitute “Indebtedness”
within the meaning thereof under the First Lien Credit Agreement or the Second
Lien Loan Agreement, as applicable.

“Insolvency or Liquidation Proceeding” means:
 
-6-

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

(a)          any voluntary or involuntary case or proceeding under the
Bankruptcy Code with respect to any Grantor;

(b)          any other voluntary or involuntary insolvency, reorganization or
Bankruptcy Case or proceeding, or any receivership, liquidation, reorganization
or other similar case or proceeding with respect to any Grantor or with respect
to a material portion of their respective assets;

(c)          any liquidation, dissolution, reorganization or winding up of any
Grantor whether voluntary or involuntary and whether or not involving insolvency
or bankruptcy; or

(d)          any assignment for the benefit of creditors or any other marshaling
of assets and liabilities of any Grantor.

“Lien” means any lien (including judgment liens and liens arising by operation
of law), mortgage, leasehold mortgage, deed of trust, pledge, assignment as
collateral security, security interest, charge, hypothecation or encumbrance in
the nature of security in respect of any property (including any agreement to
give any of the foregoing, any conditional sale or other title retention
agreement, and any lease in the nature thereof) and any option, call, trust
(whether contractual, statutory, deemed, equitable, constructive, resulting or
otherwise), UCC financing statement or other preferential arrangement having the
practical effect of any of the foregoing, including any right of set-off or
recoupment.

“Obligations” means all obligations of every nature of each Borrower and each
other Grantor from time to time owed to any agent or trustee, the First Lien
Claimholders, the Second Lien Claimholders or any of them or their respective
Affiliates under the First Lien Loan Documents or the Second Lien Loan
Documents, whether for principal, interest, costs and fees, premiums, charges,
expenses, indemnification or otherwise and all guarantees of any of the
foregoing and including any Post-Petition Interest. 

“Pay-Over Amount” has the meaning set forth in Section 6.3(b).

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

“Pledged Collateral” has the meaning set forth in Section 5.5.

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

“Purchase Option” has the meaning set forth in Section 5.7(a).
 
-7-

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

“Purchase Option Trigger Event” has the meaning set forth in Section 5.7(a).

“Purchase Price” has the meaning set forth in Section 5.7.

“Recovery” has the meaning set forth in Section 6.5.

“Refinance” means, in respect of any Indebtedness, to refinance, extend, renew,
defease, amend, modify, supplement, restructure, replace, refund or repay, or to
issue other Indebtedness, in exchange or replacement for, such Indebtedness in
whole or in part, whether with the same or different lenders, arrangers,
trustees and/or agents.  “Refinanced” and “Refinancing” shall have correlative
meanings.

“Refinancing DIP Loan” means a DIP Financing (a) that is provided by a lender
other than any First Lien Claimholder or Second Lien Claimholder, (b) that is
secured by a Lien on the Restricted Assets or on the Collateral senior to the
Liens on the Collateral in favor of First Lien Claimholders and (c) the proceeds
of which are used in whole or in part to repay the principal, in whole or in
part, outstanding under the Second Lien Loan Documents.

“Responsible Officer” means the chief executive officer, president, chief
financial officer or treasurer of the applicable Borrower or the applicable
Grantor.

“Restricted Assets” means all licenses, permits, franchises, approvals or other
authorizations from any Governmental Authority from time to time granted to or
otherwise held by either Borrower or any other Grantor to the extent the same
constitute “Excluded Property” under (and as defined in) the First Lien Loan
Documents or the Second Lien Loan Documents or are similarly carved out from the
granting clause or the collateral thereunder.  Schedule 1 hereto sets forth a
complete and accurate list of all Restricted Assets in effect as of the date
hereof. 

“Sale Proceeds” means (a) the proceeds from the sale of one or more of the
Borrowers or one or more of the Grantors as a going concern or from the sale of
the Restricted Assets as a going concern, (b) the proceeds from another sale or
disposition of (i) any assets of the Grantors that include any Restricted Assets
or (ii) any assets of the Grantors that benefit from any Restricted Assets or
(c) any other economic value (whether in the form of cash or otherwise) received
or distributed that is directly related to the Restricted Assets.

“Second Lien Adequate Protection Payments” has the meaning set forth in Section
6.3(b).

“Second Lien Cap Amount” means, as of any date of determination, regardless of
whether the Second Lien Loan Agreement is in effect on such date, the sum of (a)
115% of $55,000,000 minus (b) the aggregate amount of repayments and prepayments
of principal of term loans that are Second Lien Obligations (excluding any (x)
voluntary prepayments of Second Lien Obligations, except to the extent such
prepayments reduce scheduled payments or mandatory prepayments otherwise due
under the Second Lien Credit Agreement and (y) any such repayments resulting
from (i) a Refinancing of such Obligations or (ii) a “roll up” of such
Obligations in connection with a DIP Financing, in each case, in accordance with
the terms of this Agreement). 
 
-8-

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

“Second Lien Claimholders” means, at any relevant time, the holders of Second
Lien Obligations at that time, including the Second Lien Lenders and the Second
Lien Collateral Agent.

“Second Lien Collateral” means any “Collateral” as defined in any Second Lien
Loan Document or any other assets of either Borrower or any other Grantor with
respect to which a Lien is granted, purported to be granted or required to be
granted pursuant to a Second Lien Loan Document as security for any Second Lien
Obligations and shall include any property or assets subject to replacement
Liens or adequate protection Liens in favor of any Second Lien Claimholder.

“Second Lien Collateral Agent” has the meaning set forth in the preamble to this
Agreement.

“Second Lien Collateral Documents” means the “Collateral Documents” (as defined
in the applicable Second Lien Loan Documents) and any other agreement, document
or instrument pursuant to which a Lien is granted securing any Second Lien
Obligations or pursuant to which any such Lien is perfected.

“Second Lien Loan Agreement” has the meaning set forth in the Recitals to this
Agreement.

“Second Lien Lenders” shall mean “Lenders” under and as defined in the Second
Lien Loan Agreement.

“Second Lien Loan Documents” means that certain Second Lien Loan Agreement and
the other “Loan Documents” as defined in the Second Lien Loan Agreement and any
other document or agreement entered into for the purpose of evidencing,
governing, securing or perfecting the Second Lien Obligations.

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

“Short Fall” has the meaning set forth in Section 6.3(b).

“Standstill Period” has the meaning set forth in Section 3.1.

“Subsidiary” means, with respect to any Person, any corporation, partnership,
limited liability company or other entity of which more than 50% of the total
voting power of shares of stock or other ownership interests entitled (without
regard to the occurrence of any contingency) to vote in the election of the
Person or Persons (whether directors, managers, trustees or other Persons
performing similar functions) having the power to direct or cause the direction
of the management and policies thereof is at the time owned or Controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof.

“UCC” means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
 
-9-

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

Section 1.2.          Terms Generally.  The definitions of terms in this
Agreement shall apply equally to the singular and plural forms of the terms
defined.  Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms.  The words “include,”
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation.” The word “will” shall be construed to have the same meaning and
effect as the word “shall.” Unless the context requires otherwise:

(a)      any definition of or reference herein to any agreement, instrument or
other document shall be construed as referring to such agreement, instrument or
other document as amended, restated, amended and restated, supplemented or
otherwise modified from time to time and any reference herein to any statute or
regulations shall include any amendment, renewal, extension or replacement
thereof;

(b)      any reference herein to any Person shall be construed to include such
Person’s successors and assigns from time to time;

(c)      the words “herein,” “hereof” and “hereunder,” and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof;

(d)      all references herein to Sections shall be construed to refer to
Sections of this Agreement; and

(e)      the words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.

Section 2.           Lien Priorities.

Section 2.1.          Relative Priorities.  Notwithstanding the date, time,
method, manner or order of grant, attachment or perfection of any Liens securing
the Second Lien Obligations granted on the Collateral or of any Liens securing
the First Lien Obligations granted on the Collateral and notwithstanding any
provision of the UCC or any other applicable law or the Second Lien Loan
Documents or any defect or deficiencies in, or failure to perfect or lapse in
perfection of, or avoidance as a fraudulent conveyance or otherwise of, the
Liens securing the First Lien Obligations, the subordination of such Liens to
any other Liens, or any other circumstance whatsoever, whether or not any
Insolvency or Liquidation Proceeding has been commenced by or against either
Borrower or any other Grantor, the Second Lien Collateral Agent, for itself and
on behalf of each Second Lien Claimholder, hereby agrees that:

(a)       any Lien on the Collateral securing any First Lien Obligations (other
than Excess First Lien Obligations) now or hereafter held by or on behalf of the
First Lien Collateral Agent or any First Lien Claimholders or any agent or
trustee thereof, regardless of how acquired, whether by grant, possession,
statute, operation of law, subrogation or otherwise, shall be senior in all
respects and prior to any Lien on the Collateral securing any Second Lien
Obligations;
 
-10-

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

(b)       any Lien on the Collateral securing any Second Lien Obligations now or
hereafter held by or on behalf of the Second Lien Collateral Agent or any Second
Lien Claimholders or any agent or trustee thereof regardless of how acquired,
whether by grant, possession, statute, operation of law, subrogation or
otherwise, shall be junior and subordinate in all respects to all Liens on the
Collateral securing any First Lien Obligations (other than Excess First Lien
Obligations).  All Liens on the Collateral securing any First Lien Obligations
(other than Excess First Lien Obligations) shall be and remain senior in all
respects and prior to all Liens on the Collateral securing any Second Lien
Obligations for all purposes, whether or not such Liens securing any First Lien
Obligations (other than Excess First Lien Obligations) are subordinated to any
Lien securing any other obligation of either Borrower, any other Grantor or any
other Person; and

(c)       any Lien on the Collateral securing any Excess First Lien Obligations
now or hereafter held by or on behalf of the First Lien Collateral Agent or any
First Lien Claimholders or any agent or trustee thereof, regardless of how
acquired, whether by grant, possession, statute, operation of law, subrogation
or otherwise, shall be junior and subordinate in all respects to any Lien on the
Collateral securing any Second Lien Obligations.

Section 2.2.          Prohibition on Contesting Liens; No Marshaling.  The
Second Lien Collateral Agent, for itself and on behalf of each Second Lien
Claimholder, and the First Lien Collateral Agent, for itself and on behalf of
each First Lien Claimholder, agrees that it will not (and hereby waives any
right to) directly or indirectly contest or support any other Person in
contesting, in any proceeding (including any Insolvency or Liquidation
Proceeding), the priority, validity, perfection or enforceability of a Lien
held, or purported to be held, by or on behalf of any of the First Lien
Claimholders in the First Lien Collateral or by or on behalf of any of the
Second Lien Claimholders in the Second Lien Collateral, as the case may be, or
the provisions of this Agreement; provided that nothing in this Agreement shall
be construed to prevent or impair the rights of the First Lien Collateral Agent
or any First Lien Claimholder to enforce this Agreement, including the
provisions of this Agreement relating to the priority of the Liens securing the
First Lien Obligations as provided in Sections 2.1 and 3.1.  Until the Discharge
of First Lien Obligations, neither the Second Lien Collateral Agent nor any
Second Lien Claimholder will assert any marshaling, appraisal or other similar
statutory right that may otherwise be available to a junior secured creditor.

Section 2.3.          No New Liens and Guarantors.  So long as the Discharge of
First Lien Obligations has not occurred, whether or not any Insolvency or
Liquidation Proceeding has been commenced by or against either Borrower or any
other Grantor, the parties hereto (including each Borrower and each other
Grantor) agree that no Borrower shall, nor shall it permit any other Grantor to:
 
(a)      grant or permit any additional Liens on any asset or property to secure
any Second Lien Obligation unless it has granted or concurrently grants a senior
and prior Lien on such asset or property to secure the First Lien Obligations,
the parties hereto agreeing that any such Lien shall be subject to Section 2.1,
and no Person shall guarantee or otherwise provide credit support for the Second
Lien Obligations unless such Person concurrently provides a substantially
identical guarantee or credit support for the First Lien Obligations; or
 
-11-

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

(b)      grant or permit any additional Liens on any asset or property to secure
any First Lien Obligations unless it has granted or concurrently grants a Lien
on such asset or property to secure the Second Lien Obligations, the parties
hereto agreeing that any such Lien shall be subject to Section 2.1, and no
Person shall guarantee or otherwise provide credit support for the First Lien
Obligations unless such Person concurrently provides a substantially identical
guarantee or credit support for the Second Lien Obligations.

If the Second Lien Collateral Agent or any Second Lien Claimholder shall hold
any Lien on any assets or property of any Grantor securing any Second Lien
Obligations that are not also subject to the first-priority Liens securing all
First Lien Obligations under the First Lien Collateral Documents, such Second
Lien Collateral Agent or Second Lien Claimholder shall notify the First Lien
Collateral Agent promptly upon becoming aware thereof and, unless such Grantor
shall promptly grant a similar Lien on such assets or property to the First Lien
Collateral Agent for the benefit of the First Lien Claimholders as security for
the First Lien Obligations, such Second Lien Collateral Agent or Second Lien
Claimholder shall be deemed to hold and have held such Lien for the benefit of
the First Lien Collateral Agent and each First Lien Claimholder as security for
the First Lien Obligations.  To the extent that the foregoing provisions are not
complied with for any reason, without limiting any other rights and remedies
available to the First Lien Collateral Agent and any First Lien Claimholder, the
Second Lien Collateral Agent, on behalf of each Second Lien Claimholder, agrees
that any amounts received by or distributed to any of them pursuant to or as a
result of Liens granted in contravention of this Section 2.3 shall be subject to
Section 4.2.

Notwithstanding anything in this Agreement to the contrary, prior to the
Discharge of the First Lien Obligations, cash and cash equivalents may be
pledged to secure First Lien Obligations consisting of reimbursement obligations
in respect of letters of credit issued pursuant to the First Lien Loan Documents
without granting a Lien thereon to secure any other First Lien Obligations or
any other Second Lien Obligations.

Section 2.4.          Similar Liens and Agreements.  The parties hereto agree
that, subject to Sections 2.3 and 5.3(c), it is their intention that the First
Lien Collateral and the Second Lien Collateral be identical.  In furtherance of
the foregoing and of Section 8.12, the parties hereto agree, subject to the
other provisions of this Agreement:

(a)       upon request by the First Lien Collateral Agent or the Second Lien
Collateral Agent, to cooperate in good faith (and to direct their counsel to
cooperate in good faith) from time to time in order to determine the specific
items included in the First Lien Collateral and the Second Lien Collateral and
the steps taken to perfect their respective Liens thereon and the identity of
the respective parties obligated under the First Lien Loan Documents and the
Second Lien Loan Documents; and
 
(b)     that the documents and agreements creating or evidencing the First Lien
Collateral and the Second Lien Collateral and guarantees for the First Lien
Obligations and the Second Lien Obligations, subject to Sections 2.3 and 5.3(c),
shall be in all material respects the same forms of documents other than with
respect to the first lien and the second lien nature of the Obligations
thereunder.
 
-12-

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

Section 2.5.          Perfection of Liens.  Except for the arrangements
contemplated by Section 5.5, neither the First Lien Collateral Agent nor the
First Lien Claimholders shall be responsible for perfecting and maintaining the
perfection of Liens with respect to the Collateral for the benefit of the Second
Lien Collateral Agent or the Second Lien Claimholders.  The provisions of this
Agreement are intended solely to govern the respective Lien priorities as
between the First Lien Claimholders on the one hand and the Second Lien
Claimholders on the other hand and such provisions shall not impose on the First
Lien Collateral Agent, the First Lien Claimholders, the Second Lien Collateral
Agent, the Second Lien Claimholders or any agent or trustee therefor any
obligations in respect of the disposition of proceeds of any Collateral which
would conflict with prior-perfected claims therein in favor of any other Person
or any order or decree of any Governmental Authority or any applicable law.

Section 3.           Enforcement.

Section 3.1.          Exercise of Remedies.  (a) Until the Discharge of First
Lien Obligations has occurred, whether or not any Insolvency or Liquidation
Proceeding has been commenced by or against either Borrower or any other
Grantor, the Second Lien Collateral Agent and the Second Lien Claimholders:

(i)       will not commence or maintain, or seek to commence or maintain, any
Enforcement Action or otherwise exercise any rights or remedies with respect to
the Collateral (for the avoidance of doubt, other than electing or otherwise
imposing a default rate of interest to the extent consistent with Section 5.3);
provided that, if an Event of Default (as defined in the Second Lien Credit
Agreement) has occurred under the Second Lien Credit Agreement, the Second Lien
Collateral Agent may commence an Enforcement Action or otherwise exercise any or
all such rights or remedies after the passage of a period of at least one
hundred twenty (120) days since the later of (A) the date on which the Second
Lien Collateral Agent declared the existence of any Event of Default under (and
as defined in) the Second Lien Loan Agreement and (B) the date on which the
First Lien Collateral Agent received notice from the Second Lien Collateral
Agent of such declarations of such Event of Default (the “Standstill Period”);
provided, further, that notwithstanding anything herein to the contrary, in no
event shall the Second Lien Collateral Agent or any Second Lien Claimholder
exercise any rights or remedies with respect to the Collateral if,
notwithstanding the expiration of the Standstill Period, the First Lien
Collateral Agent or the First Lien Claimholders shall have commenced and be
diligently pursuing an Enforcement Action or other exercise of their rights or
remedies in each case with respect to all or any material portion of the
Collateral (prompt notice of such exercise to be given to the Second Lien
Collateral Agent); provided, further, in the event that as of any day during
such one hundred twenty (120) day period, no Event of Default (as defined in the
Second Lien Loan Agreement) is continuing under the Second Lien Loan Agreement,
then the Standstill Period shall be deemed not to have commenced;
 
-13-

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

(ii)   will not contest, protest or object to any foreclosure proceeding or
action brought by the First Lien Collateral Agent or any First Lien Claimholder
or any other exercise by the First Lien Collateral Agent or any First Lien
Claimholder of any rights and remedies relating to the Collateral under the
First Lien Loan Documents or otherwise (including any Enforcement Action
initiated by or supported by the First Lien Collateral Agent or any First Lien
Claimholder); and

(iii)  subject to their rights under Section 3.1(a)(i), will not object to the
forbearance by the First Lien Collateral Agent or the First Lien Claimholders
from bringing or pursuing any foreclosure proceeding or action or any other
exercise of any rights or remedies relating to the Collateral,

in each case so long as any cash proceeds received by the First Lien Collateral
Agent are distributed in accordance with Section 4.1 and applicable law.

(b)            Until the Discharge of First Lien Obligations has occurred,
whether or not any Insolvency or Liquidation Proceeding has been commenced by or
against either Borrower or any other Grantor, subject to Section 3.1(a)(i), the
First Lien Collateral Agent and the First Lien Claimholders shall have the
exclusive right to commence and maintain an Enforcement Action or otherwise
enforce rights, exercise remedies (including set-off, recoupment and the right
to credit bid their debt, except that the Second Lien Collateral Agent shall
have the credit bid rights set forth in Section 3.1(c)(vi)), and subject to
Section 5.1, make determinations regarding the release, disposition, or
restrictions with respect to the Collateral without any consultation with or the
consent of the Second Lien Collateral Agent or any Second Lien Claimholder;
provided that any cash proceeds received by the First Lien Collateral Agent are
distributed in accordance with Section 4.1 and applicable law.  In commencing or
maintaining any Enforcement Action or otherwise exercising rights and remedies
with respect to the Collateral, the First Lien Collateral Agent and the First
Lien Claimholders may enforce the provisions of the First Lien Loan Documents
and exercise remedies thereunder, all in such order and in such manner as they
may determine in the exercise of their sole discretion in compliance with any
applicable law and without consultation with the Second Lien Collateral Agent or
any Second Lien Claimholder and regardless of whether any such exercise is
adverse to the interest of any Second Lien Claimholder.  Such exercise and
enforcement shall include the rights of an agent appointed by them to sell or
otherwise dispose of Collateral upon foreclosure, to incur expenses in
connection with such sale or disposition, and to exercise all the rights and
remedies of a secured creditor under the UCC and of a secured creditor under
Bankruptcy Laws of any applicable jurisdiction.

(c)             Notwithstanding the foregoing, the Second Lien Collateral Agent
and any Second Lien Claimholder may:

(i)   file a claim or statement of interest with respect to the Second Lien
Obligations; provided that an Insolvency or Liquidation Proceeding has been
commenced by or against either Borrower or any other Grantor;

(ii)  take any action (not adverse to the priority status of the Liens on the
Collateral securing the First Lien Obligations, or the rights of the First Lien
Collateral Agent or the First Lien Claimholders to exercise remedies in respect
thereof) in order to create, perfect, preserve or protect its Lien on the
Collateral;
 
-14-

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

(iii)  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 of the Second
Lien Claimholders, including any claims secured by the Collateral, if any, in
each case in accordance with the terms of this Agreement;

(iv) vote on any plan of reorganization, arrangement, compromise or liquidation,
file any proof of claim, make other filings and make any arguments and motions
with respect to the Second Lien Obligations and the Collateral, in each case,
unless specificially prohibited by the terms of this Agreement;

(v)  exercise any of its rights or remedies with respect to the Collateral after
the termination of the Standstill Period to the extent permitted by Section
3.1(a)(i);

(vi) bid for or purchase Collateral at any public, private or judicial
foreclosure upon such Collateral initiated by the First Lien Collateral Agent or
any First Lien Claimholder, or any sale of Collateral during an Insolvency or
Liquidation Proceeding; provided that such bid may not include a “credit bid” in
respect of any Second Lien Obligations unless the cash proceeds of such bid are
otherwise sufficient to cause the Discharge of First Lien Obligations;

(vii) object to any proposed acceptance of Collateral by the First Lien
Collateral Agent or any First Lien Claimholder pursuant to Section 9-620 of the
UCC;

(viii)inspect or appraise the Collateral (and engage or retain investment
bankers or appraisers for the sole purpose of appraising or valuing the
Collateral), or request information or reports concerning the Collateral; and

(ix)  accelerate any Second Lien Obligations in accordance with the provisions
of the Second Lien Loan Documents.

The Second Lien Collateral Agent, on behalf of itself and each Second Lien
Claimholder, agrees that it will not take or receive any Collateral or any
proceeds of Collateral in connection with the exercise of any right or remedy
(including set-off and recoupment) with respect to any Collateral in its
capacity as a creditor unless and until the Discharge of First Lien Obligations
has occurred, except in connection with any Enforcement Action expressly
permitted by Section 3.1(a)(i) to the extent such Second Lien Collateral Agent
and Second Lien Claimholders are permitted to retain the proceeds thereof in
accordance with Section 4.2 of this Agreement.

(d)           Subject to Sections 3.1(a) and (c) and Section 6.3(b):
 
-15-

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

(i)    the Second Lien Collateral Agent, for itself and on behalf of each Second
Lien Claimholder, agrees that such Second Lien Collateral Agent and such Second
Lien Claimholders will not take any action that would hinder any exercise of
remedies under the First Lien Loan Documents or is otherwise prohibited
hereunder, including any sale, lease, exchange, transfer or other disposition of
the Collateral, whether by foreclosure or otherwise;

(ii)   the Second Lien Collateral Agent, for itself and on behalf of each Second
Lien Claimholder, hereby waives any and all rights such Second Lien Collateral
Agent and such Second Lien Claimholders may have as a junior lien creditor to
object to the manner in which the First Lien Collateral Agent or any First Lien
Claimholder seeks to enforce or collect the First Lien Obligations or Liens
securing the First Lien Obligations granted in any of the First Lien Collateral
undertaken in accordance with this Agreement, regardless of whether any action
or failure to act by or on behalf of the First Lien Collateral Agent or any
First Lien Claimholder is adverse to the interest of any Second Lien
Claimholder; and

(iii)  the Second Lien Collateral Agent, for itself and on behalf of each other
Second Lien Claimholder, hereby acknowledges and agrees that no covenant,
agreement or restriction contained in any Second Lien Loan Document (other than
this Agreement) shall be deemed to restrict in any way the rights and remedies
of the First Lien Collateral Agent or any other First Lien Claimholder with
respect to the Collateral as set forth in this Agreement and the First Lien Loan
Documents.

(e)            Except as specifically set forth in this Agreement, the Second
Lien Collateral Agent and the Second Lien Claimholders may exercise rights and
remedies available to unsecured creditors against either Borrower or any other
Grantor that has guaranteed or granted Liens to secure the Second Lien
Obligations in accordance with the terms of the Second Lien Loan Documents and
applicable law (other than initiating or joining in an involuntary case or
proceeding under any Insolvency or Liquidation Proceeding with respect to any
Grantor, other than after the expiration of the Standstill Period); provided
that, in the event that any Second Lien Claimholder becomes a judgment Lien
creditor in respect of Collateral as a result of its enforcement of its rights
as an unsecured creditor with respect to the Second Lien Obligations, such
judgment Lien shall be subject to the terms of this Agreement for all purposes
(including in relation to the First Lien Obligations) in the same manner as the
other Liens securing the Second Lien Obligations are subject to this Agreement;
provided, further, that, nothing herein shall be construed to constitute a
waiver of any Default or Event of Default (each as defined in the Second Lien
Loan Agreement) that has occurred under the Second Lien Loan Agreement.

(f)            Except as specifically set forth in Section 3.1(a) and 3.1(d),
nothing in this Agreement shall prohibit the receipt by the Second Lien
Collateral Agent or any Second Lien Claimholder of the required payments of
interest, principal and other amounts owed in respect of the Second Lien
Obligations so long as such receipt is not the direct or indirect result of the
exercise by the Second Lien Collateral Agent or any Second Lien Claimholder of
rights or remedies as a secured creditor (including set-off and recoupment) or
enforcement in contravention of this Agreement of any Lien held by any of them
or as a result of any other violation by any Second Lien Claimholder of the
express terms of this Agreement.  Nothing in this Agreement impairs or otherwise
adversely affects any rights or remedies the First Lien Collateral Agent or any
First Lien Claimholder may have with respect to the First Lien Collateral.
 
-16-

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

Section 3.2.          Actions Upon Breach; Specific Performance.  If the Second
Lien Collateral Agent or any Second Lien Claimholder, in contravention of the
terms of this Agreement, in any way takes, attempts to or threatens to take any
action with respect to the Collateral (including any attempt to realize upon or
enforce any remedy with respect to this Agreement), or fails to take any action
required by this Agreement, this Agreement shall create an irrebutable
presumption and admission by the Second Lien Collateral Agent and/or Second Lien
Claimholder that relief against the Second Lien Collateral Agent and/or such
Second Lien Claimholder by injunction, specific performance and/or other
appropriate equitable relief is necessary to prevent irreparable harm to the
First Lien Claimholders, it being understood and agreed by the Second Lien
Collateral Agent, on behalf of each Second Lien Claimholder, that (a) the First
Lien Claimholders’ damages from actions of the Second Lien Collateral Agent
and/or any Second Lien Claimholder may at that time be difficult to ascertain
and may be irreparable and (b) the Second Lien Collateral Agent and each Second
Lien Claimholder waives any defense that the Grantors and/or the First Lien
Claimholders cannot demonstrate damage and/or be made whole by the awarding of
damages.  The First Lien Collateral Agent may demand specific performance of
this Agreement.  The Second Lien Collateral Agent, on behalf of itself and each
Second Lien Claimholder, hereby irrevocably waives any defense based on the
adequacy of a remedy at law and any other defense which might be asserted to bar
the remedy of specific performance in any action which may be brought by the
First Lien Collateral Agent or any First Lien Claimholder.  No provision of this
Agreement shall constitute or be deemed to constitute a waiver by the First Lien
Collateral Agent on behalf of itself and each First Lien Claimholder of any
right to seek damages from any Person in connection with any breach or alleged
breach of this Agreement.

Section 4.           Payments.

Section 4.1.          Application of Proceeds.  So long as the Discharge of
First Lien Obligations has not occurred, whether or not any Insolvency or
Liquidation Proceeding has been commenced by or against either Borrower or any
other Grantor, any Collateral or any proceeds thereof, Restricted Assets or any
proceeds thereof or Sale Proceeds received in connection with any Enforcement
Action or other exercise of remedies by the First Lien Collateral Agent or any
First Lien Claimholder shall be applied by the First Lien Collateral Agent to
the First Lien Obligations (other than Excess First Lien Obligations) in such
order as specified in the First Lien Credit Agreement.  Upon the Discharge of
First Lien Obligations (other than (i) Excess First Lien Obligations or (ii)
pursuant to a Refinancing in accordance with the terms of this Agreement), the
First Lien Collateral Agent shall (a) unless a Discharge of Second Lien
Obligations has already occurred, deliver any remaining proceeds of Collateral,
Restricted Assets and Sale Proceeds held by it to the Second Lien Collateral
Agent to be applied by the Second Lien Collateral Agent to the Second Lien
Obligations in such order as specified in the Second Lien Loan Agreement, (b) if
a Discharge of Second Lien Obligations has already occurred, apply such proceeds
of Collateral, Restricted Assets and Sale Proceeds to any Excess First Lien
Obligations in such order as specified in the First Lien Credit Agreement and
(c) if there are no Excess First Lien Obligations, deliver such proceeds of
Collateral, Restricted Assets and Sale Proceeds to the Grantors or to whomever
may be lawfully entitled to receive the same.  Without limiting the obligations
of the Second Lien Claimholders under Section 4.2, after the Discharge of First
Lien Obligations has occurred, upon the Discharge of Second Lien Obligations
(other than pursuant to a Refinancing in accordance with the terms of this
Agreement), the Second Lien Collateral Agent shall (i) if there are any Excess
First Lien Obligations, deliver any proceeds of Collateral, Restricted Assets
and Sale Proceeds held by it, to the First Lien Collateral Agent for application
by the First Lien Collateral Agent to the Excess First Lien Obligations in such
order as specified in the First Lien Credit Agreement until the payment in full
in cash of all Excess First Lien Obligations and (ii) if there are no Excess
First Lien Obligations, deliver any proceeds of Collateral, Restricted Assets
and Sale Proceeds held by it, to the Grantors or to whomever may be lawfully
entitled to receive the same.  Without limiting the generality of the foregoing,
it is the intention of the parties hereto that no amount of any Sale Proceeds
will in any event be allocated to any Restricted Assets, and neither the Second
Lien Collateral Agent nor any Second Lien Claimholder will, in any forum
(including in any Insolvency or Liquidation Proceeding), assert that any amount
of any Sale Proceeds should be allocated to any Restricted Assets.
 
-17-

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

Section 4.2.          Payments Over.  (a) So long as the Discharge of First Lien
Obligations has not occurred, whether or not any Insolvency or Liquidation
Proceeding has been commenced by or against either Borrower or any other
Grantor, any Collateral or any proceeds thereof, Restricted Assets or proceeds
thereof and all Sale Proceeds (including assets or proceeds subject to Liens
referred to in the second to last paragraph of Section 2.3 and any assets or
proceeds subject to Liens that have been avoided or otherwise invalidated)
received by the Second Lien Collateral Agent or any Second Lien Claimholder in
connection with any Enforcement Action or other exercise of any right or remedy
relating to the Collateral or the Restricted Assets in all cases shall be
segregated and held in trust and forthwith paid over to the First Lien
Collateral Agent for the benefit of the First Lien Claimholders in the same form
as received, with any necessary endorsements (which endorsements shall be
without recourse and without any representations or warranties) or as a court of
competent jurisdiction may otherwise direct.  The First Lien Collateral Agent is
hereby authorized to make any such endorsements as agent for the Second Lien
Collateral Agent or any Second Lien Claimholder.  This authorization is coupled
with an interest and is irrevocable until the Discharge of First Lien
Obligations.

(b)           So long as the Discharge of First Lien Obligations has not
occurred, if in any Insolvency or Liquidation Proceeding the Second Lien
Collateral Agent or any Second Lien Claimholder shall receive any proceeds of
Collateral or Restricted Assets, or any Sale Proceeds, or any proceeds of a
Refinancing DIP Loan secured by any Collateral or Restricted Assets (including
in each case any assets or proceeds subject to Liens that have been avoided or
otherwise invalidated), such proceeds shall in each case be segregated and held
in trust and forthwith paid over to the First Lien Collateral Agent for the
benefit of the First Lien Claimholders in the same form as received, with any
necessary endorsements (which endorsements shall be without recourse and without
any representations or warranties).  Any Lien received by the Second Lien
Collateral Agent or any Second Lien Claimholder in respect of any of the Second
Lien Obligations in any Insolvency or Liquidation Proceeding shall be subject to
the terms of this Agreement.  Nothing in this Section 4.2 shall restrict or
affect the right of any First Lien Claimholder to object to any plan of
reorganization in any Insolvency or Liquidation Proceeding on any grounds
including that such plan violates this Agreement.
 
-18-

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

Section 5.           Other Agreements.

Section 5.1.          Releases.  (a) If in connection with (i) any Enforcement
Action by the First Lien Collateral Agent or (ii) exercise of any First Lien
Collateral Agent’s remedies in respect of the Collateral, in each case prior to
the Discharge of First Lien Obligations (but other than, in the case of clause
(i) or clause (ii), any Disposition of Collateral made to any of the Grantors’
Affiliates), the First Lien Collateral Agent, for itself or on behalf of the
First Lien Claimholders, releases any of its Liens on any part of the
Collateral, then the Liens, if any, of the Second Lien Collateral Agent, for
itself or for the benefit of the Second Lien Claimholders, on such Collateral
shall be automatically, unconditionally and simultaneously released; provided
that the First Lien Collateral Agent shall conduct in a commercially reasonable
matter (consistent with the requirements of Section 9-610 of the Uniform
Commercial Code) any Disposition of Collateral that does not occur during a
proceeding under the Bankruptcy Code; provided further that the cash proceeds of
such Enforcement Action or exercise of remedies received by any First Lien
Claimholder are applied in accordance with Section 4.1.  If in connection with
any Enforcement Action or other exercise of rights and remedies by the First
Lien Collateral Agent, in each case prior to the Discharge of First Lien
Obligations, the equity interests of any Person are foreclosed upon or otherwise
disposed of and the First Lien Collateral Agent releases its Lien on the
property or assets of such Person, then the Liens of the Second Lien Collateral
Agent with respect to the property or assets of such Person will be
automatically released to the same extent as the Liens of the First Lien
Collateral Agent; provided that the cash proceeds of such disposition received
by any First Lien Claimholder are applied in accordance with Section 4.1.  The
Second Lien Collateral Agent, for itself or on behalf of the Second Lien
Claimholders, shall promptly execute and deliver to the First Lien Collateral
Agent or such Grantor such termination statements, releases and other documents
as the First Lien Collateral Agent or such Grantor may request to effectively
confirm the foregoing releases.

(b)          If in connection with any sale, lease, exchange, transfer or other
disposition of any Collateral by any Grantor (collectively, a “Disposition”)
permitted under the terms of the First Lien Credit Agreement and under the terms
of the Second Lien Loan Agreement (other than in connection with an Enforcement
Action or other exercise of the First Lien Collateral Agent’s remedies in
respect of the Collateral, which shall be governed by Section 5.1(a)), the First
Lien Collateral Agent, for itself or on behalf of the First Lien Claimholders,
releases any Liens on any part of the Collateral other than (i) in connection
with, or following, the Discharge of First Lien Obligations or (ii) after the
occurrence and during the continuance of any Event of Default under (and as
defined in) the Second Lien Loan Agreement, then the Liens, if any, of the
Second Lien Collateral Agent, for itself or for the benefit of the Second Lien
Claimholders, on such Collateral shall be automatically, unconditionally and
simultaneously released; provided that the cash proceeds of such Disposition
received by any First Lien Claimholder are applied in accordance with Section
4.1.  The Second Lien Collateral Agent, for itself and on behalf of each Second
Lien Claimholder, shall promptly execute and deliver to the First Lien
Collateral Agent or such Grantor such termination statements, releases and other
documents as the First Lien Collateral Agent or such Grantor may request to
effectively confirm such release.
 
-19-

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

(c)           Until the Discharge of First Lien Obligations occurs, the Second
Lien Collateral Agent, for itself and on behalf of each Second Lien Claimholder,
hereby irrevocably constitutes and appoints the First Lien Collateral Agent and
any officer or agent thereof, 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 Lien Collateral Agent and such Second Lien
Claimholders, or in the First Lien Collateral Agent’s own name, from time to
time in the First Lien Collateral Agent’s discretion, for the purpose of
carrying out the terms of this Section 5.1, to take any and all appropriate
action and to execute any and all documents and instruments which may be
necessary to accomplish the purposes of this Section 5.1, including any
endorsements or other instruments of transfer or release.  This power is coupled
with an interest and is irrevocable until the Discharge of First Lien
Obligations.

 
(d)           Until the Discharge of First Lien Obligations occurs, to the
extent that the First Lien Collateral Agent or the First Lien Claimholders (i)
have released any Lien on Collateral and any such Liens are later reinstated or
(ii) obtain any new Liens or additional guarantees from any Grantor, then the
Second Lien Collateral Agent, for itself and for the Second Lien Claimholders,
shall be granted a Lien on any such Collateral, subject to the lien
subordination provisions of this Agreement, and the Second Lien Collateral
Agent, for itself and for the Second Lien Claimholders, shall be granted an
additional guaranty, as the case may be.

Section 5.2.          Insurance.  Unless and until the Discharge of First Lien
Obligations has occurred, the First Lien Collateral Agent shall have the sole
and exclusive right, subject to the rights of the Grantors under the First Lien
Loan Documents, to adjust settlement for any insurance policy covering the
Collateral in the event of any loss thereunder and to approve any award granted
in any condemnation or similar proceeding (or any deed in lieu of condemnation)
affecting the Collateral.  Unless and until the Discharge of First Lien
Obligations has occurred, and subject to the rights of the Grantors under the
First Lien Loan Documents, all proceeds of any such policy and any such award
(or any payments with respect to a deed in lieu of condemnation) if in respect
of the Collateral shall be paid first, to the First Lien Collateral Agent for
the benefit of the First Lien Claimholders on account of the First Lien
Obligations pursuant to the terms of the First Lien Loan Documents (including
for purposes of cash collateralization of letters of credit), second, if a
Discharge of First Lien Obligations has occurred, and subject to the rights of
the Grantors under the Second Lien Loan Agreement, to the Second Lien Collateral
Agent for the benefit of the Second Lien Claimholders on account of the Second
Lien Obligations pursuant to the Second Lien Loan Agreement, third, if a
Discharge of Second Lien Obligations has occurred, to the First Lien Collateral
Agent for the benefit of First Lien Claimholders on account of Excess First Lien
Obligations and fourth, if a Discharge of Second Lien Obligations and a payment
in full in cash of all Excess First Lien Obligations has occurred, 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.  Until the Discharge of
First Lien Obligations has occurred, if the Second Lien Collateral Agent or any
Second Lien Claimholder shall, at any time, receive any proceeds of any such
insurance policy or any such award or payment in contravention of this
Agreement, then it shall segregate and hold in trust and forthwith pay such
proceeds over to the First Lien Collateral Agent in accordance with the terms of
Section 4.2.
 
-20-

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

Section 5.3.          Amendments to First Lien Loan Documents and Second Lien
Loan Documents.  (a) The First Lien Loan Documents may be amended, restated,
amended and restated, supplemented or otherwise modified from time to time in
accordance with their terms and the First Lien Obligations may be Refinanced in
accordance with this Section 5.3(a), in each case, without notice to, or the
consent of, the Second Lien Collateral Agent or any Second Lien Claimholder, all
without affecting the lien subordination or other provisions of this Agreement;
provided that any such amendment, supplement, modification or Refinancing is not
inconsistent with the terms of this Agreement and, in the case of a Refinancing,
the holders of such Refinancing debt bind themselves in a writing addressed to
the Second Lien Collateral Agent to the terms of this Agreement; provided,
further, that any such amendment, supplement, modification or Refinancing shall
not, without the consent of the Second Lien Collateral Agent:

(i)    increase the then outstanding aggregate principal amount of the
Indebtedness under the First Lien Credit Agreement (including, if any, any
undrawn portion of any commitment under the First Lien Credit Agreement) to an
amount that would exceed the First Lien Cap Amount;

(ii)  increase the “Applicable Margin” (as defined in the First Lien Credit
Agreement as in effect on the date hereof) or any comparable definition in any
Refinancing of the First Lien Credit Agreement, or similar component of the
interest rate or yield provisions applicable to the First Lien Obligations in a
manner that would result in the total yield thereon to increase by more than
3.0% per annum on a weighted average basis (including by modifying or adding any
interest rate floors, but excluding increases resulting from (A) application of
any pricing grid set forth in the First Lien Credit Agreement as in effect on
the date hereof, (B) the accrual of interest at the default rate or (C)
fluctuations in underlying rate indices);

(iii)  shorten the scheduled final maturity date set forth in the First Lien
Credit Agreement or any other First Lien Loan Document or shorten the weighted
average life to maturity of the First Lien Obligations;

(iv) change or add any negative covenant or event of default in the First Lien
Credit Agreement or any other First Lien Loan Document (in each case, as in
effect on the date hereof) in a manner that is materially more restrictive or
change or add any affirmative covenant in the First Lien Credit Agreement or any
other First Lien Loan Document in a manner that is materially adverse to any
Grantor (unless, in each instance, such changes or additions are accompanied by
corresponding changes or additions in the Second Lien Loan Agreement
(maintaining any appropriate cushions consistent with those in existence as of
the date hereof));

(v)   restrict the amendment of the Second Lien Loan Documents except as set
forth in Section 5.3(b);

(vi) modify in a manner more restrictive or add any other express restrictions
on the ability of any Grantor to make a required payment or repayment of the
Second Lien Obligations, including, without limitation, any payment or repayment
of interest, scheduled principal and mandatory prepayments, fees, expenses,
costs and indemnification;
 
-21-

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

(vii)    modify the restrictions relating to the purchase of First Lien
Obligations by the Grantors and their Affiliates; or

(viii)   contravene the provisions of this Agreement.

(b)           The Second Lien Loan Agreement may be amended, restated, amended
and restated, supplemented or otherwise modified from time to time in accordance
with their terms and the Second Lien Obligations may be Refinanced in accordance
with this Section 5.3(b), in each case, without notice to, or the consent of,
the First Lien Collateral Agent or any First Lien Claimholder, all without
affecting the lien subordination or other provisions of this Agreement, to the
extent the terms and conditions of such amendment, supplement or modification
meet any applicable requirements set forth in the First Lien Credit Agreement;
provided that any such amendment, supplement, modification or Refinancing is not
inconsistent with the terms of this Agreement and, in the case of any
Refinancing, the holders of such Refinancing debt bind themselves in a writing
addressed to the First Lien Collateral Agent to the terms of this Agreement;
provided, further, that any such amendment, supplement, modification or
Refinancing shall not, without the consent of the First Lien Collateral Agent:

(i)        increase the then outstanding aggregate principal amount of the
Second Lien Obligations outstanding under the Second Lien Loan Agreement
(including, if any, any undrawn portion of any commitment under the Second Lien
Loan Agreement) to an amount that would exceed the Second Lien Cap Amount;

(ii)       increase the “Interest Rate” (as defined in the Second Lien Loan
Agreement as in effect on the date hereof) or any comparable definition in any
Refinancing of the Second Lien Loan Agreement, or similar component of the
interest rate or yield provisions applicable to the Second Lien Obligations in a
manner that would result in the total yield thereon to increase by more than
3.0% per annum on a weighted average basis (excluding increases resulting from
the accrual of interest at the default rate);

(iii)     accelerate any date upon which a scheduled payment of principal or
interest is due, or otherwise decreases the weighted average life to maturity;

(iv)     modify (or undertake any action having the effect of a modification of)
the mandatory prepayment provisions of the Second Lien Loan Agreement in a
manner adverse to the First Lien Claimholders;

(v)      change or add any negative covenant or event of default in the Second
Lien Loan Agreement (as in effect on the date hereof) in a manner that is
materially more restrictive or change or add any affirmative covenant in the
Second Lien Credit Agreement or any other Second Lien Loan Document in a manner
that is materially adverse to any Grantor (unless, in each instance, such
changes or additions are accompanied by corresponding changes or additions in
the First Lien Credit Agreement (maintaining any appropriate cushions consistent
with those in existence as of the date hereof));
 
-22-

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

(vi)     restrict the amendment of the First Lien Documents, except as set forth
in Section 5.3(a);
 
(vii)    modify in a manner more restrictive or add any other express
restrictions on the ability of any Grantor to make a required payment or
repayment of the First Lien Obligations, including, without limitation, any
payment or repayment of interest, scheduled principal and mandatory prepayments,
fees, expenses, costs and indemnification;

(viii)   modify the restrictions relating to the purchase of First Lien
Obligations by the Grantors and their Affiliates; or

(ix)      contravene the provisions of this Agreement.

Section 5.4.         Confirmation of Subordination in Second Lien Collateral
Documents.  The Borrowers agree that each Second Lien Collateral Document shall
include the following language (or language to similar effect approved by the
First Lien Collateral Agent):

“Notwithstanding anything herein to the contrary, the lien and security interest
granted to Prospect Capital Corporation pursuant to this Agreement and the
exercise of any right or remedy Prospect Capital Corporation hereunder are
subject to the provisions of the Second Lien Intercreditor Agreement, dated as
of February 17, 2017 (as amended, restated, amended and restated, supplemented
or otherwise modified from time to time, the “Second Lien Intercreditor
Agreement”), among Fifth Third Bank, an Ohio banking corporation, as First Lien
Collateral Agent for the First Lien Claimholders, and Prospect Capital
Corporation, a Maryland corporation, as Second Lien Collateral Agent for the
Second Lien Claimholders.  In the event of any conflict between the terms of the
Second Lien Intercreditor Agreement and this Agreement, the terms of the Second
Lien Intercreditor Agreement shall govern and control.”

Section 5.5.          Gratuitous Bailee/Agent for Perfection.  (a) The First
Lien Collateral Agent agrees to hold that part of the Collateral that is in its
possession or control (or in the possession or control of its agents or bailees)
to the extent that possession or control thereof is taken to perfect a Lien
thereon under the UCC (such Collateral being the “Pledged Collateral”) as
collateral agent for the First Lien Claimholders and gratuitous bailee for the
Second Lien Collateral Agent (such bailment being intended, among other things,
to satisfy the requirements of Sections 8-106(d)(3), 8-301(a)(2) and 9-313(c) of
the UCC) and any assignee thereof solely for the purpose of perfecting the
security interest granted under the First Lien Loan Documents and the Second
Lien Loan Documents, respectively, subject to the terms and conditions of this
Section 5.5.  Solely with respect to any deposit accounts under the control
(within the meaning of Section 9-104 of the UCC) of the First Lien Collateral
Agent, the First Lien Collateral Agent agrees to also hold control over such
deposit accounts as gratuitous agent for the Second Lien Collateral Agent,
subject to the terms and conditions of this Section 5.5.
 
-23-

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

(b)          The First Lien Collateral Agent shall not have any obligation
whatsoever to the First Lien Claimholders, the Second Lien Collateral Agent or
the Second Lien Claimholders to ensure that the Pledged Collateral is genuine or
owned by any of the Grantors, to perfect the security interests of the Second
Lien Collateral Agent or the Second Lien Claimholders or to preserve rights or
benefits of any Person except as expressly set forth in this Section 5.5.  The
duties or responsibilities of the First Lien Collateral Agent under this Section
5.5 shall be limited solely to holding the Pledged Collateral as bailee (and
with respect to deposit accounts, agent) in accordance with this Section 5.5 and
delivering the Pledged Collateral upon a Discharge of First Lien Obligations as
provided in Section 5.5(d).
 
(c)           Neither the First Lien Collateral Agent nor any First Lien
Claimholder shall have by reason of the First Lien Collateral Documents, the
Second Lien Collateral Documents, this Agreement or any other document a
fiduciary relationship in respect of the Second Lien Collateral Agent or any
Second Lien Claimholder, and the Second Lien Collateral Agent and the Second
Lien Claimholders hereby waive and release the First Lien Collateral Agent and
the First Lien Claimholders from all claims and liabilities arising pursuant to
the First Lien Collateral Agent’s role under this Section 5.5 as gratuitous
bailee and gratuitous agent with respect to the Pledged Collateral.  It is
understood and agreed that the interests of the First Lien Collateral Agent and
the First Lien Claimholders, on the one hand, and the Second Lien Collateral
Agent and the Second Lien Claimholders on the other hand, may differ and the
First Lien Collateral Agent and the First Lien Claimholders shall be fully
entitled to act in their own interest without taking into account the interests
of the Second Lien Collateral Agent or Second Lien Claimholders.

(d)           Upon the Discharge of First Lien Obligations (other than pursuant
to a Refinancing in accordance with the terms of this Agreement), the First Lien
Collateral Agent shall deliver the remaining Pledged Collateral in its
possession (if any) together with any necessary endorsements (which endorsement
shall be without recourse and without any representation or warranty), (x) if a
Discharge of Second Lien Obligations has not already occurred, to the Second
Lien Collateral Agent, (y) if a Discharge of Second Lien Obligations has already
occurred, to the First Lien Collateral Agent to the extent Excess First Lien
Obligations remain outstanding and (z) if there are no Excess First Lien
Obligations and if a Discharge of Second Lien Obligations has already occurred,
to the Borrowers or to whomever may be lawfully entitled to receive the same. 
Following the Discharge of First Lien Obligations, the First Lien Collateral
Agent further agrees to take all other action reasonably requested by the Second
Lien Collateral Agent at the expense of the Borrowers in connection with the
Second Lien Collateral Agent obtaining a first-priority security interest in the
Collateral.  Following the Discharge of First Lien Obligations and Discharge of
Second Lien Obligations and prior to the payment in full in cash of all Excess
First Lien Obligations, the Second Lien Collateral Agent further agrees to take
all other action reasonably requested by the First Lien Collateral Agent at the
expense of the Borrowers in connection with the First Lien Collateral Agent
obtaining a first-priority security interest in the Collateral to the extent of
any Excess First Lien Obligations that remain outstanding.  After the Discharge
of First Lien Obligations has occurred, upon the Discharge of Second Lien
Obligations (other than pursuant to a Refinancing in accordance with the terms
of this Agreement), the Second Lien Collateral Agent shall deliver the remaining
Pledged Collateral in its possession (if any) together with any necessary
endorsements (which endorsement shall be without recourse and without any
representation or warranty), (i) if there are then any Excess First Lien
Obligations, to the First Lien Collateral Agent and (ii) to the extent no Excess
First Lien Obligations remain outstanding, to the Borrowers or to whomever may
be lawfully entitled to receive the same. 
 
-24-

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

Section 5.6.          Reserved. 

Section 5.7.          Purchase Right.  (a) Without prejudice to the enforcement
of any of the First Lien Claimholders’ remedies under the First Lien Loan
Documents or this Agreement, at law or in equity or otherwise, the First Lien
Claimholders agree at any time following (i) the final maturity (whether by
acceleration or otherwise) of the First Lien Obligations in accordance with the
terms of the applicable First Lien Loan Documents, (ii) a payment default (A)
under any First Lien Loan Document that has not been cured or waived by the
First Lien Claimholders within sixty (60) days of the occurrence thereof or (B)
under any Second Lien Loan Document that has not been cured or waived by the
Second Lien Claimholders, (iii) the commencement of any Insolvency or
Liquidation Proceeding with respect to any Grantor or (iv) the commencement of
an Enforcement Action by the First Lien Collateral Agent or, to the extent
permitted by the First Lien Loan Documents, any First Lien Claimholder (each of
(i) through (iv), a “Purchase Option Trigger Event”), the Second Lien
Claimholders shall have the option (the “Purchase Option”) to purchase the
entire aggregate amount (but not less than the entirety) of outstanding First
Lien Obligations (including any unfunded commitments under the First Lien Credit
Agreement) at the Purchase Price (the “First Lien Purchase”) without warranty or
representation or recourse except as provided in Section 5.7(d), on a pro rata
basis among the First Lien Claimholders, which purchase may be made by less than
all of the Second Lien Claimholders so long as all the purchasing Second Lien
Claimholders shall when taken together purchase such entire aggregate amount as
set forth above.  The First Lien Collateral Agent agrees that it will give the
Second Lien Collateral Agent written notice (the “First Lien Enforcement
Notice”) not less than five (5) Business Days prior to commencing any
Enforcement Action with respect to Collateral or accelerating the First Lien
Obligations (other than the automatic acceleration of the First Lien Obligations
as a result of the commencement of an Insolvency or Liquidation Proceeding by or
against any Grantor) (which notice shall be effective for all Enforcement
Actions taken after the date of such notice so long as the First Lien Collateral
Agent is diligently pursuing in good faith such Enforcement Actions, or
diligently attempting in good faith to vacate any stay of enforcement rights of
the Liens on all or a material portion of the Collateral); provided, however, in
the event of any Exigent Circumstance, the First Lien Collateral Agent shall not
be required to give such five (5) Business Days’ notice and shall instead give
such notice as soon as practicable.
 
(b)          The “Purchase Price” will equal the sum of (i) the full amount of
all First Lien Obligations then-outstanding and unpaid at par (including
principal, accrued but unpaid interest and fees and any other unpaid amounts,
including breakage costs), (ii) the cash collateral to be furnished to the First
Lien Claimholders providing letters of credit under the First Lien Credit
Agreement in such amount (not to exceed 103% thereof) as such First Lien
Claimholders determine is reasonably necessary to secure such First Lien
Claimholders in connection with any such outstanding and undrawn letters of
credit, (iii) the cash collateral to be furnished to the relevant First Lien
Claimholders in an amount determined by such First Lien Claimholders to be
reasonably necessary to collateralize their credit risks arising out of Hedging
Liability and Bank Product Liability, and (iv) all accrued and unpaid fees,
expenses and other amounts (including attorneys’ fees and expenses) owed to the
First Lien Claimholders under or pursuant to the First Lien Loan Documents on
the date of purchase to the extent not allocable to Excess First Lien
Obligations.
 
-25-

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

(c)           In order for the Purchase Option to be exercised in respect of any
Purchase Option Trigger Event, the Second Lien Collateral Agent, on behalf of
the Second Lien Claimholders exercising such option, must provide an irrevocable
written notice (the “First Lien Purchase Notice”) to the First Lien Collateral
Agent in a manner so that  the First Lien Purchase Notice is actually received
by the First Lien Collateral Agent no later than 5:00 p.m. (prevailing eastern
time) on the thirtieth (30th) day following (x) in the case of a Purchase Option
based on a Purchase Option Trigger Event set forth in clauses (i) (with respect
to the automatic acceleration of the First Lien Obligations as a result of the
commencement of an Insolvency or Liquidation Proceeding by or against any
Grantor), (ii)(B) or (iii) of the definition thereof, the earlier of (A) the
provision of the First Lien Enforcement Notice by the First Lien Collateral
Agent or (B) the occurrence of such Purchase Option Trigger Event and (y) in the
case of a Purchase Option based on a Purchase Option Trigger Event set forth in
clauses (i) (other than with respect to the automatic acceleration of the First
Lien Obligations as a result of the commencement of an Insolvency or Liquidation
Proceeding by or against any Grantor), (ii)(A) or (iv) of the definition
thereof, the later of (A) the provision of the First Lien Enforcement Notice by
the First Lien Collateral Agent or (B) the occurrence of such Purchase Option
Trigger Event.  If the Second Lien Claimholders (or any subset of them) exercise
such option, it shall be exercised pursuant to documentation based on the form
of Assignment and Assumption attached as an Exhibit to the First Lien Credit
Agreement, with such modifications as are appropriate to reflect differences
between the nature of obligations to be purchased pursuant to an assignment of
loans under the First Lien Credit Agreement and obligations to be purchased
pursuant an exercise of the Purchase Option, and provided that the only
representations and warranties of the First Lien Claimholders set forth therein
will be as provided in clause (d) below.  If the Second Lien Claimholders fail
to exercise the Purchase Option in respect of any Purchase Option Trigger Event
within the required timeframe, the First Lien Claimholders shall have no further
obligations pursuant to this Section 5.7 in respect of such Purchase Option
Trigger Event and may take any further actions in their sole discretion in
respect of such Purchase Option Trigger Event in accordance with the First Lien
Loan Documents and this Agreement.  Upon the Second Lien Claimholders (or any
subset of them) exercising the Purchase Option in respect of any Purchase Option
Trigger Event within the required timeframe, the parties hereto shall cooperate
in good faith to promptly consummate the First Lien Purchase.  After the closing
of the purchase of all First Lien Obligations, the Second Lien Claimholders may
request that the First Lien Collateral Agent immediately resign in its capacity
as such under the First Lien Loan Documents, and the First Lien Collateral Agent
shall immediately resign if so requested. Upon such resignation, a new First
Lien Collateral Agent will be elected or appointed in accordance with the First
Lien Credit Agreement.  Each First Lien Claimholder will retain all rights to
indemnification provided in the relevant First Lien Loan Documents for all
claims and other amounts relating to periods prior to the purchase of the First
Lien Obligations pursuant to this Section 5.7.
 
(d)           The purchase and sale of the First Lien Obligations under this
Section 5.7 will be without recourse and without representation or warranty of
any kind by the First Lien Claimholders, except that the First Lien Claimholders
shall severally and not jointly represent and warrant to the Second Lien
Claimholders that on the date of such purchase, immediately before giving effect
to the purchase;
 
-26-

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

(i)       the principal of and accrued and unpaid interest on the First Lien
Obligations, and the fees and expenses thereof owed to the respective First Lien
Claimholders, are as stated in any assignment agreement prepared in connection
with the purchase and sale of the First Lien Obligations; and

(ii)      each First Lien Claimholder owns the First Lien Obligations purported
to be owned by it free and clear of any Liens (other than participation
interests not prohibited by the First Lien Loan Documents, in which case the
Purchase Price will be appropriately adjusted so that the Second Lien
Claimholders do not pay amounts represented by participation interests to the
extent that the Second Lien Claimholders expressly assume the obligations under
such participation interests).

Section 6.           Insolvency or Liquidation Proceedings.

Section 6.1.          Finance and Sale Issues.  Until the Discharge of First
Lien Obligations has occurred, if either Borrower or any other Grantor shall be
subject to any Insolvency or Liquidation Proceeding and the First Lien
Collateral Agent shall desire to permit the use of “Cash Collateral” (as such
term is defined in Section 363(a) of the Bankruptcy Code) on which such First
Lien Collateral Agent or any First Lien Claimholder has a Lien or to permit
either Borrower or any other Grantor to obtain financing from the First Lien
Claimholders under Section 364 of the Bankruptcy Code or any similar Bankruptcy
Law (“DIP Financing”), then the Second Lien Collateral Agent, for itself and on
behalf of each Second Lien Claimholder, will not object to such Cash Collateral
use or DIP Financing and will subordinate its Liens in the Collateral to the
Liens securing such DIP Financing (and all Obligations relating thereto) and the
Second Lien Collateral Agent, for itself and on behalf of each Second Lien
Claimholder, will not request adequate protection or any other relief in
connection therewith (except as expressly agreed by the First Lien Collateral
Agent or to the extent permitted by Section 6.3); provided that (a) the Liens
securing the First Lien Obligations are subordinated to or pari passu with such
DIP Financing, (b) the aggregate principal amount of the DIP Financing plus the
aggregate outstanding principal amount of First Lien Obligations plus the
aggregate face amount of any letters of credit issued and outstanding under the
First Lien Loan Documents does not exceed the DIP Cap Amount, (c) the Second
Lien Collateral Agent and the Second Lien Claimholders retain a Lien on the
Second Lien Collateral in which they had a Lien immediately prior to such DIP
Financing or use of Cash Collateral with the same priority vis-à-vis the First
Lien Collateral as existed prior to the commencement of such Insolvency or
Liquidation Proceeding, (d) to the extent that the First Lien Collateral Agent
or any First Lien Claimholder is granted adequate protection in the form of a
Lien on Collateral acquired by any Grantor after the commencement of such
Insolvency or Liquidation Proceeding, the Second Lien Collateral Agent, for
itself and on behalf of each Second Lien Claimholder, is permitted to seek a
Lien (without objection from the First Lien Collateral Agent or any First Lien
Claimholder) thereon (so long as such Lien is junior to the Liens securing such
DIP Financing and the Lien on the First Lien Collateral), (e) such use of Cash
Collateral or DIP Financing does not compel any Grantor to seek confirmation of
a specific plan of reorganization for which any of the material terms are set
forth in the Cash Collateral order or DIP Financing documentation, (f) any Cash
Collateral order or DIP Financing documentation does not expressly require the
liquidation of the Collateral prior to a default under the Cash Collateral order
or DIP Financing documentation and (g) such DIP Financing is otherwise subject
to the terms of this Agreement.  Nothing in this Section 6.1 limits or impairs
the right of the Second Lien Collateral Agent or Second Lien Claimholder to
object to any motion regarding DIP Financing or use of Cash Collateral to the
extent that (x) the objection could be asserted in an Insolvency or Liquidation
Proceeding by unsecured creditors generally and is not based on the status of
any Second Lien Claimholder as holder of a Lien (provided that this clause (x)
shall not permit any Second Lien Claimholder to propose any DIP Financing except
to the extent permitted by this Section 6.1) or (y) the DIP Financing or use of
Cash Collateral does not meet the requirements of this Section 6.1.
 
-27-

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

No Second Lien Claimholder may provide DIP Financing to either Borrower or any
other Grantor secured by Liens equal or senior in priority to the Liens securing
any First Lien Obligations; provided that, if no First Lien Claimholder offers
to provide DIP Financing to the extent permitted under this Section 6.1 on or
before the date of the hearing to approve DIP Financing, then a Second Lien
Claimholder may seek to provide such DIP Financing secured by Liens equal or
senior in priority to the Liens securing any First Lien Obligations, and First
Lien Claimholders may object thereto; provided, further, that such DIP Financing
may not “roll-up” or otherwise include or refinance any pre-petition Second Lien
Obligations.  The Second Lien Collateral Agent, for itself and on behalf of each
Second Lien Claimholder, agrees that it will not seek consultation rights in
connection with, and it will not object to or oppose, a motion to sell,
liquidate or otherwise dispose of Collateral under Section 363 of the Bankruptcy
Code if the requisite First Lien Claimholders have consented to such sale,
liquidation or other disposition and such motion does not impair the rights of
the Second Lien Claimholders under Section 363(k) of the Bankruptcy Code;
provided that the foregoing shall not impair the right of the Second Lien
Collateral Agent or Second Lien Claimholder to seek such consultation rights or
to object to or oppose such motion to the extent that such consultation rights
could be sought or such objection could be asserted in an Insolvency or
Liquidation Proceeding by unsecured creditors generally and is not based on the
status of any Second Lien Claimholder as holder of a Lien; provided further that
the cash proceeds of such sale, liquidation or other disposition received by the
First Lien Collateral Agent are applied in accordance with Section 4.1; provided
further, that the DIP Cap Amount shall be reduced by an amount equal to the net
cash proceeds of any such sale, liquidation or other disposition which are used
to pay the principal or face amount of the First Lien Obligations.

Notwithstanding any other provision hereof to the contrary, the Second Lien
Collateral Agent, for itself and on behalf of each Second Lien Claimholder,
agrees that (A) without the consent of the First Lien Claimholders, none of the
Second Lien Collateral Agent, the Second Lien Claimholders or any agent or the
trustee on behalf of any of them shall, for any purpose during any Insolvency or
Liquidation Proceeding or otherwise, support, endorse, propose or submit,
whether directly or indirectly, any valuation of any of the Grantors or their
respective assets that allocates or ascribes any value whatsoever to any of the
Restricted Assets and (B) without the consent of the First Lien Claimholders,
none of the Second Lien Collateral Agent, the Second Lien Claimholders or any
agent or trustee on behalf of any of them shall for any purpose during any
Insolvency or Liquidation Proceeding or otherwise challenge, dispute or object,
whether directly or indirectly, to any valuation of any of the Grantors or their
respective assets, or otherwise take any position with respect to such
valuation, that is proposed, supported or otherwise arises in any Insolvency or
Liquidation Proceeding, on grounds that such valuation does not allocate or
ascribe adequate or appropriate value to any of the Restricted Assets.
 
-28-

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

Notwithstanding any other provision hereof to the contrary, the First Lien
Collateral Agent, for itself and on behalf of each First Lien Claimholder,
agrees that (A) without the consent of the Second Lien Claimholders, none of the
First Lien Collateral Agent, the First Lien Claimholders or any agent or the
trustee on behalf of any of them shall, for any purpose during any Insolvency or
Liquidation Proceeding or otherwise, support, endorse, propose or submit,
whether directly or indirectly, any valuation of any of the Grantors or their
respective assets that allocates or ascribes any value whatsoever to any of the
Restricted Assets and (B) without the consent of the Second Lien Claimholders,
none of the First Lien Collateral Agent, the First Lien Claimholders or any
agent or trustee on behalf of any of them shall for any purpose during any
Insolvency or Liquidation Proceeding or otherwise challenge, dispute or object,
whether directly or indirectly, to any valuation of any of the Grantors or their
respective assets, or otherwise take any position with respect to such
valuation, that is proposed, supported or otherwise arises in any Insolvency or
Liquidation Proceeding, on grounds that such valuation does not allocate or
ascribe adequate or appropriate value to any of the Restricted Assets.

Section 6.2.          Relief from the Automatic Stay.  Until the Discharge of
First Lien Obligations has occurred, the Second Lien Collateral Agent, for
itself and on behalf of each Second Lien Claimholder, agrees that none of them
shall: (a) seek (or support any other Person seeking) relief from the automatic
stay or any other stay in any Insolvency or Liquidation Proceeding in respect of
the Collateral or the Restricted Assets, without the prior written consent of
the First Lien Collateral Agent, unless a motion for adequate protection
permitted under Section 6.3 has been denied by a bankruptcy court or (b) oppose
(or support any other Person in opposing) any request by the First Lien
Collateral Agent for relief from such stay.

Section 6.3.          Adequate Protection.  (a) The Second Lien Collateral
Agent, for itself and on behalf of each Second Lien Claimholder, agrees that
none of them shall contest (or support any other Person contesting):

(i)       any request by the First Lien Collateral Agent or First Lien
Claimholder for adequate protection under any Bankruptcy Law; or

(ii)       any objection by the First Lien Collateral Agent or First Lien
Claimholder to any motion, relief, action or proceeding based on the First Lien
Collateral Agent or First Lien Claimholder claiming a lack of adequate
protection.

(b)          Notwithstanding the foregoing provisions in this Section 6.3, in
any Insolvency or Liquidation Proceeding:

(i)        if the First Lien Claimholders (or any subset thereof) are granted
adequate protection in the form of additional collateral in connection with any
Cash Collateral use or DIP Financing, then the Second Lien Collateral Agent, for
itself or on behalf of any Second Lien Claimholder, may seek or request adequate
protection in the form of a Lien on such additional collateral, which Lien will
be subordinated to the Liens securing the First Lien Obligations and such Cash
Collateral use or DIP Financing (and all Obligations relating thereto) on the
same basis as the other Liens securing the Second Lien Obligations are so
subordinated to the First Lien Obligations under this Agreement; and
 
-29-

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

(ii)      the Second Lien Collateral Agent and Second Lien Claimholders shall
only be permitted to seek adequate protection with respect to their rights in
the Collateral in any Insolvency or Liquidation Proceeding in the form of (A)
additional collateral; provided that, as adequate protection for the First Lien
Obligations, the First Lien Collateral Agent, on behalf of the First Lien
Claimholders, is also granted a Lien on such additional collateral, which Lien
shall be senior to any Lien of the Second Lien Collateral Agent and the Second
Lien Claimholders on such additional collateral; (B) replacement Liens on the
Collateral; provided that, as adequate protection for the First Lien
Obligations, the First Lien Collateral Agent, on behalf of the First Lien
Claimholders, is also granted replacement Liens on the Collateral, which Liens
shall be senior to the Liens of the Second Lien Collateral Agent and the Second
Lien Claimholders on the Collateral; (C) an administrative expense claim;
provided that, as adequate protection for the First Lien Obligations, the First
Lien Collateral Agent, on behalf of the First Lien Claimholders, is also granted
an administrative expense claim which is senior and prior to the administrative
expense claim of the Second Lien Collateral Agent and the Second Lien
Claimholders; and (D) cash payments with respect to interest on and expenses in
respect of the Second Lien Obligations; provided that, (1) as adequate
protection for the First Lien Obligations, the First Lien Collateral Agent, on
behalf of the First Lien Claimholders, is also granted cash payments with
respect to interest on the First Lien Obligation represented by it and (2) such
cash payments do not exceed an amount equal to the interest accruing on the
principal amount of Second Lien Obligations outstanding on the date such relief
is granted at the interest rate under the applicable Second Lien Loan Documents
and accruing from the date the Second Lien Collateral Agent is granted such
relief and any expenses in respect of the Second Lien Obligations.  If any
Second Lien Claimholder receives Post-Petition Interest and/or adequate
protection payments in an Insolvency or Liquidation Proceeding (“Second Lien
Adequate Protection Payments”) and the First Lien Claimholders do not receive
payment in full in cash of all First Lien Obligations (subject, in the case of
principal outstanding under the First Lien Loan Documents and face amounts of
letters of credit issued and outstanding, to the DIP Cap Amount) upon the
effectiveness of the plan of reorganization for, or conclusion of, that
Insolvency or Liquidation Proceeding, then each Second Lien Claimholder shall
pay over to the First Lien Collateral Agent for the benefit of the First Lien
Claimholders an amount (the “Pay-Over Amount”) equal to the lesser of (i) the
Second Lien Adequate Protection Payments received by such Second Lien
Claimholder and (ii) the amount of the short-fall (the “Short Fall”) in payment
in full in cash of the First Lien Obligations (subject, in the case of principal
outstanding under the First Lien Loan Documents and face amounts of letters of
credit issued and outstanding, to the DIP Cap Amount); provided that, to the
extent any portion of the Short Fall represents payments received by the First
Lien Claimholders in the form of promissory notes, equity or other property
equal in value to the cash paid in respect of the Pay-Over Amount, the First
Lien Claimholders shall, upon receipt of the Pay-Over Amount, transfer those
promissory notes, equity or other property, equal in value to the cash paid in
respect of the Pay-Over Amount, to the applicable Second Lien Claimholders pro
rata in exchange for the Pay-Over Amount.  Notwithstanding anything herein to
the contrary, the First Lien Claimholders shall not be deemed to have consented
to, and expressly retain their rights to object to, the grant of adequate
protection in the form of cash payments to the Second Lien Claimholders made
pursuant to this Section 6.3(b).
 
-30-

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

(c)           The Second Lien Collateral Agent, for itself and on behalf of each
Second Lien Claimholder, agrees that notice of a hearing to approve DIP
Financing or use of Cash Collateral on an interim basis shall be adequate if
delivered to the Second Lien Collateral Agent at least three (3) Business Days
in advance of such hearing and that notice of a hearing to approve DIP Financing
or use of Cash Collateral on a final basis shall be adequate if delivered to the
Second Lien Collateral Agent at least fifteen (15) days in advance of such
hearing.

Section 6.4.          No Waiver.  Subject to Section 6.7(b), nothing contained
herein shall prohibit or in any way limit the First Lien Collateral Agent or any
First Lien Claimholder from objecting in any Insolvency or Liquidation
Proceeding or otherwise to any action taken by the Second Lien Collateral Agent
or any Second Lien Claimholder, including the seeking by the Second Lien
Collateral Agent or any Second Lien Claimholder of adequate protection or the
asserting by the Second Lien Collateral Agent or any Second Lien Claimholder of
any of its rights and remedies under the Second Lien Loan Documents or
otherwise.

Section 6.5.          Avoidance Issues.  If any First Lien Claimholder is
required in any Insolvency or Liquidation Proceeding or otherwise to turn over
or otherwise pay to the estate of either Borrower or any other Grantor any
amount paid in respect of First Lien Obligations (a “Recovery”), then such First
Lien Claimholder shall be entitled to a reinstatement of its First Lien
Obligations with respect to all such recovered amounts on the date of such
Recovery, and from and after the date of such reinstatement the Discharge of
First Lien Obligations shall be deemed not to have occurred for all purposes
hereunder.  If this Agreement shall have been terminated prior to such Recovery,
this Agreement shall be reinstated in full force and effect, and such prior
termination shall not diminish, release, discharge, impair or otherwise affect
the obligations of the parties hereto from such date of reinstatement.  This
Section 6.5 shall survive termination of this Agreement.

Section 6.6.          Reorganization Securities.  If, in any Insolvency or
Liquidation Proceeding, debt obligations of the reorganized debtor secured by
Liens upon any property of the reorganized debtor are distributed pursuant to a
plan of reorganization, arrangement, compromise or liquidation or similar
dispositive restructuring plan, both on account of First Lien Obligations and on
account of Second Lien Obligations, then, to the extent the debt obligations
distributed on account of the First Lien Obligations and on account of the
Second Lien Obligations are secured by Liens upon the same property, the
provisions of this Agreement will survive the distribution of such debt
obligations pursuant to such plan and will apply with like effect to the Liens
securing such debt obligations.

Section 6.7.          Post-Petition Interest.  (a) None of the Second Lien
Collateral Agent or any Second Lien Claimholder shall oppose or seek to
challenge any claim by the First Lien Collateral Agent or any First Lien
Claimholder for allowance in any Insolvency or Liquidation Proceeding of First
Lien Obligations consisting of Post-Petition Interest to the extent of the value
of the Lien of the First Lien Collateral Agent on behalf of the First Lien
Claimholders on the Collateral or any First Lien Claimholder’s Lien on the
Collateral, without regard to the existence of the Liens of the Second Lien
Collateral Agents or the Second Lien Claimholders on the Collateral.
 
-31-

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

(b)           None of the First Lien Collateral Agent or any First Lien
Claimholder shall oppose or seek to challenge any claim by the Second Lien
Collateral Agent or any Second Lien Claimholder for allowance in any Insolvency
or Liquidation Proceeding of Second Lien Obligations consisting of Post-Petition
Interest to the extent of the value of the Lien of the Second Lien Collateral
Agent, on behalf of the Second Lien Claimholders, on the Collateral (after
taking into account the amount of the First Lien Obligations).
 
Section 6.8.          Waiver.  The Second Lien Collateral Agent, for itself and
on behalf of each Second Lien Claimholder, waives any claim it may hereafter
have against any First Lien Claimholder arising out of the election of any First
Lien Claimholder of the application of Section 1111(b)(2) of the Bankruptcy
Code, and/or out of any cash collateral or financing arrangement or out of any
grant of a security interest in connection with the Collateral in any Insolvency
or Liquidation Proceeding so long as such actions are not in express
contravention of the terms of this Agreement.

Section 6.9.          Separate Grants of Security and Separate Classification. 
The Second Lien Collateral Agent, for itself and on behalf of each Second Lien
Claimholder, and the First Lien Collateral Agent, for itself and on behalf of
each First Lien Claimholder, acknowledges and agrees that:

(a)      the grants of Liens pursuant to the First Lien Collateral Documents and
the Second Lien Collateral Documents constitute two separate and distinct grants
of Liens; and

(b)      because of, among other things, their differing rights in the
Collateral, the Second Lien Obligations are fundamentally different from the
First Lien Obligations and must be separately classified in any plan of
reorganization proposed or adopted in an Insolvency or Liquidation Proceeding.

To further effectuate the intent of the parties as provided in the immediately
preceding sentence, if it is held that the claims of the First Lien Claimholders
and the Second Lien Claimholders in respect of the Collateral constitute only
one secured claim (rather than separate classes of senior and junior secured
claims), then each of the parties hereto hereby acknowledges and agrees that all
distributions shall be made as if there were separate classes of senior and
junior secured claims against the Grantors in respect of the Collateral (with
the effect being that, to the extent that the aggregate value of the Collateral
is sufficient (for this purpose ignoring all claims held by the Second Lien
Claimholders), the First Lien Claimholders shall be entitled to receive, in
addition to amounts distributed to them in respect of principal, pre-petition
interest and other claims, all amounts owing (or that would be owing if there
were such separate classes of senior and junior secured claims) in respect of
Post-Petition Interest (including any additional interest payable pursuant to
the First Lien Loan Documents, arising from or related to a default, which is
disallowed as a claim in any Insolvency or Liquidation Proceeding) before any
distribution is made in respect of the claims held by the Second Lien
Claimholders with respect to the Collateral, with the Second Lien Collateral
Agent, for itself and on behalf of each Second Lien Claimholder, hereby
acknowledging and agreeing to turn over to the First Lien Collateral Agent, for
itself and on behalf of each First Lien Claimholder, Collateral or proceeds of
Collateral 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 Lien Claimholders.
 
-32-

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

Section 6.10.       Effectiveness in Insolvency or Liquidation Proceedings . 
The Parties acknowledge that this Agreement is a “subordination agreement” under
Section 510(a) of the Bankruptcy Code, which will be effective before, during
and after the commencement of an Insolvency or Liquidation Proceeding.  All
references in this Agreement to any Grantor will include such Person as a
debtor-in-possession and any receiver or trustee for such Person in an
Insolvency or Liquidation Proceeding.

Section 7.           Reliance; Waivers; Etc.

Section 7.1.          Reliance.  Other than any reliance on the terms of this
Agreement, the First Lien Collateral Agent, on behalf of itself and each First
Lien Claimholder, acknowledges that it and such First Lien Claimholders have,
independently and without reliance on the Second Lien Collateral Agent or any
Second Lien Claimholder, and based on documents and information deemed by them
appropriate, made their own credit analysis and decision to enter into each of
the First Lien Loan Documents and be bound by the terms of this Agreement and
they will continue to make their own credit decision in taking or not taking any
action under the First Lien Loan Documents or this Agreement.  The Second Lien
Collateral Agent, on behalf of itself and each Second Lien Claimholder,
acknowledges that it and such Second Lien Claimholders have, independently and
without reliance on the First Lien Collateral Agent or any First Lien
Claimholder, and based on documents and information deemed by them appropriate,
made their own credit analysis and decision to enter into each of the Second
Lien Loan Documents and be bound by the terms of this Agreement and they will
continue to make their own credit decision in taking or not taking any action
under the Second Lien Loan Documents or this Agreement.

Section 7.2.          No Warranties or Liability.  The First Lien Collateral
Agent, on behalf of itself and each First Lien Claimholder, acknowledges and
agrees that no Second Lien Collateral Agent or Second Lien Claimholder has made
any express or implied representation or warranty, including with respect to the
execution, validity, legality, completeness, collectability or enforceability of
any of the Second Lien Loan Documents, the ownership of any Collateral or the
perfection or priority of any Liens thereon.  Except as otherwise provided
herein, the Second Lien Claimholders will be entitled to manage and supervise
their respective extensions of credit under the Second Lien Loan Documents in
accordance with law and as they may otherwise, in their sole discretion, deem
appropriate.  The Second Lien Collateral Agent, on behalf of itself and each
Second Lien Claimholder, acknowledges and agrees that no First Lien Collateral
Agent or First Lien Claimholder has made any express or implied representation
or warranty, including with respect to the execution, validity, legality,
completeness, collectability or enforceability of any of the First Lien Loan
Documents, the ownership of any Collateral or the perfection or priority of any
Liens thereon.  Except as otherwise provided herein, the First Lien Claimholders
will be entitled to manage and supervise their respective loans and extensions
of credit under the First Lien Loan Documents in accordance with law and as they
may otherwise, in their sole discretion, deem appropriate.  The Second Lien
Collateral Agent and the Second Lien Claimholders shall have no duty to the
First Lien Collateral Agent or any of the First Lien Claimholders, and the First
Lien Collateral Agent and the First Lien Claimholders shall have no duty to the
Second Lien Collateral Agent or any of the Second Lien Claimholders, to act or
refrain from acting in a manner which allows, or results in, the occurrence or
continuance of an event of default or default under any agreements with either
Borrower or any other Grantor (including the First Lien Loan Documents and the
Second Lien Loan Documents), regardless of any knowledge thereof which they may
have or be charged with.
 
-33-

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

Section 7.3.          No Waiver of Lien Priorities.  (a) No right of the First
Lien Claimholders, the First Lien Collateral Agent or any of them to enforce any
provision of this Agreement or any First Lien Loan Document shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
either Borrower or any other Grantor or by any act or failure to act by any
First Lien Claimholder or First Lien Collateral Agent, or by any noncompliance
by any Person with the terms, provisions and covenants of this Agreement, any of
the First Lien Loan Documents or any of the Second Lien Loan Documents,
regardless of any knowledge thereof which any First Lien Claimholder, the First
Lien Collateral Agent or any of them, may have or be otherwise charged with.

(b)           Without in any way limiting the generality of the foregoing
paragraph (but subject to the rights of the Borrowers and the other Grantors
under the First Lien Loan Documents and subject to the provisions of Section
5.3(a)), the First Lien Claimholders, the First Lien Collateral Agent and any of
them may, at any time and from time to time in accordance with the First Lien
Loan Documents and/or applicable law, without the consent of, or notice to, the
Second Lien Collateral Agent or any Second Lien Claimholder, without incurring
any liabilities to the Second Lien Collateral Agent or any Second Lien
Claimholder and without impairing or releasing the Lien priorities and other
benefits provided in this Agreement (even if any right of subrogation or other
right or remedy of the Second Lien Collateral Agent or any Second Lien
Claimholder is affected, impaired or extinguished thereby) do any one or more of
the following:

(i)       change the manner, place or terms of payment or change or extend the
time of payment of, or amend, renew, exchange, increase or alter, the terms of
any of the First Lien Obligations or any Lien on any First Lien Collateral or
guaranty of any of the First Lien Obligations or any liability of either
Borrower or any other Grantor, or any liability incurred directly or indirectly
in respect thereof (including any increase in or extension of the First Lien
Obligations, without any restriction as to the tenor or terms of any such
increase or extension) or otherwise amend, renew, exchange, extend, modify or
supplement in any manner any Liens held by the First Lien Collateral Agent or
any of the First Lien Claimholders, the First Lien Obligations or any of the
First Lien Loan Documents; provided, that any such increase in the First Lien
Obligations shall not increase the sum of the First Lien Obligations to an
amount in excess of the First Lien Cap Amount;

(ii)      sell, exchange, release, surrender, realize upon, enforce or otherwise
deal with in any manner and in any order any part of the First Lien Collateral
or any liability of either Borrower or any other Grantor to any of the First
Lien Claimholders or the First Lien Collateral Agent, or any liability incurred
directly or indirectly in respect thereof;
 
-34-

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

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

(iv)     exercise or delay in or refrain from exercising any right or remedy
against either Borrower or any other Grantor or any other Person or any
security, and elect any remedy and otherwise deal freely with either Borrower,
any other Grantor or any First Lien Collateral and any security and any
guarantor or any liability of either Borrower or any other Grantor to the First
Lien Claimholders or any liability incurred directly or indirectly in respect
thereof.

(c)           Except as otherwise expressly provided herein, the Second Lien
Collateral Agent, on behalf of itself and each Second Lien Claimholder, also
agrees that the First Lien Claimholders and the First Lien Collateral Agent
shall have no liability to the Second Lien Collateral Agent or any Second Lien
Claimholders, and the Second Lien Collateral Agent, on behalf of itself and each
Second Lien Claimholder, hereby waives any claim against any First Lien
Claimholder or the First Lien Collateral Agent arising out of any and all
actions which the First Lien Claimholders or the First Lien Collateral Agent may
take or permit or omit to take with respect to:

(i)       the First Lien Loan Documents (other than this Agreement);

(ii)      the collection of the First Lien Obligations; or

(iii)     the foreclosure upon, or sale, liquidation or other disposition of,
any First Lien Collateral.

The Second Lien Collateral Agent, on behalf of itself and each Second Lien
Claimholder, agrees that the First Lien Claimholders and the First Lien
Collateral Agent have no duty to them in respect of the maintenance or
preservation of the First Lien Collateral, the First Lien Obligations or
otherwise.

(d)          Until the Discharge of First Lien Obligations, the Second Lien
Collateral Agent, on behalf of itself and each Second Lien Claimholder, agrees
not to assert and hereby waives, to the fullest extent permitted by law, any
right to demand, request, plead or otherwise assert or otherwise claim the
benefit of any marshaling, appraisal or other similar statutory right that may
otherwise be available under applicable law with respect to any First Lien
Collateral or any other similar rights a junior secured creditor may have under
applicable law.

Section 7.4.          Obligations Unconditional.  All rights, interests,
agreements and obligations of the First Lien Collateral Agent and the First Lien
Claimholders and the Second Lien Collateral Agent and the Second Lien
Claimholders, respectively, hereunder shall remain in full force and effect
irrespective of:
 
-35-

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

(a)       any lack of validity or enforceability of any First Lien Loan
Documents or any Second Lien Loan Documents;

(b)      except as otherwise expressly set forth in this Agreement, any change
in the time, manner or place of payment of, or in any other terms of, all or any
of the First Lien Obligations or Second Lien Obligations, or any amendment or
waiver or other modification, including any increase in the amount thereof,
whether by course of conduct or otherwise, of the terms of any First Lien Loan
Document or any Second Lien Loan Document;

(c)      except as otherwise expressly set forth in this Agreement, any exchange
of any security interest in any Collateral or any other collateral, or any
amendment, waiver or other modification, whether in writing or by course of
conduct or otherwise, of all or any of the First Lien Obligations or Second Lien
Obligations or any guaranty thereof;

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

(e)      any other circumstances which otherwise might constitute a defense
available to, or a discharge of, either Borrower or any other Grantor in respect
of the First Lien Collateral Agent, the First Lien Obligations, any First Lien
Claimholder, the Second Lien Collateral Agent, the Second Lien Obligations or
any Second Lien Claimholder in respect of this Agreement.

Section 8.           Miscellaneous.

Section 8.1.          Integration/Conflicts.  This Agreement, the First Lien
Loan Documents and the Second Lien Loan Documents represent the entire agreement
of the Grantors, the First Lien Claimholders and the Second Lien Claimholders
with respect to the subject matter hereof and thereof, and supersede any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof and thereof.  There are no promises, undertakings, representations
or warranties by the First Lien Claimholders or the Second Lien Claimholders
relative to the subject matter hereof and thereof not expressly set forth or
referred to herein or therein.  In the event of any conflict between the
provisions of this Agreement and the provisions of the First Lien Loan Documents
or the Second Lien Loan Documents, the provisions of this Agreement shall govern
and control.
 
-36-

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

Section 8.2.          Effectiveness; Continuing Nature of this Agreement;
Severability.  This Agreement shall become effective when executed and delivered
by the parties hereto.  This is a continuing agreement of lien subordination and
the First Lien Claimholders may continue, at any time and without notice to the
Second Lien Collateral Agent or any Second Lien Claimholder, to extend credit
and other financial accommodations and lend monies to or for the benefit of
either Borrower or any Grantor constituting First Lien Obligations in reliance
hereon.  The Second Lien Collateral Agent, on behalf of itself and each Second
Lien Claimholder, hereby waives any right it may have under applicable law to
revoke this Agreement or any of the provisions of this Agreement.  The terms of
this Agreement shall survive, and shall 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, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating 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
hereto shall endeavor in good-faith negotiations to replace any invalid, illegal
or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to those of the invalid, illegal or unenforceable
provisions.  All references to either Borrower or any other Grantor shall
include such Borrower or such Grantor as debtor and debtor-in-possession and any
receiver, trustee or similar person for either Borrower or any other Grantor (as
the case may be) in any Insolvency or Liquidation Proceeding.  This Agreement
shall terminate and be of no further force and effect:

(a)      with respect to the First Lien Collateral Agent, the First Lien
Claimholders and the First Lien Obligations, on the date on which the First Lien
Obligations are Discharged, subject to the rights of such First Lien
Claimholders under Section 6.5; and

(b)      with respect to the Second Lien Collateral Agent, the Second Lien
Claimholders and the Second Lien Obligations, on the date on which the Second
Lien Obligations are Discharged, subject to the rights of such Second Lien
Claimholders under Section 6.5;

provided, however, that in each case, such termination shall not relieve any
such party of its obligations incurred hereunder prior to the date of such
termination.

Section 8.3.          Amendments; Waivers.  No amendment, modification or waiver
of any of the provisions of this Agreement shall be deemed to be made unless the
same shall be in writing signed on behalf of each party hereto or its authorized
agent and each waiver, if any, shall be a waiver only with respect to the
specific instance involved and shall in no way impair the rights of the parties
making such waiver or the obligations of the other parties to such party in any
other respect or at any other time; provided, however, for so long as Prospect
Capital Corporation (“Prospect”) is the Second Lien Collateral Agent, this
Agreement may not be amended, modified or supplemented, and no term or provision
of this Agreement may be waived, except by a formal written instrument (and not
by an email or series of emails) signed in blue ink by John F. Barry III, as
Chief Executive Officer of Prospect, or M. Grier Eliasek, as Chief Operating
Officer of Prospect, or the successor of either of them, or by Joseph A.
Ferraro, as an Authorized Signatory of Prospect, in its capacity as the Second
Lien Collateral Agent.  Notwithstanding the foregoing, the Borrowers and the
other Grantors shall not have any right to consent to or approve any amendment,
modification or waiver of any provision of this Agreement except to the extent
provided for in Section 8.18.
 
-37-

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

Section 8.4.          Information Concerning Financial Condition of the Grantors
and their Subsidiaries.  The First Lien Collateral Agent and the First Lien
Claimholders, on the one hand, and the Second Lien Collateral Agent and the
Second Lien Claimholders, on the other hand, shall each be responsible for
keeping themselves informed of (a) the financial condition of the Grantors and
their Subsidiaries and all endorsers and/or guarantors of the First Lien
Obligations or the Second Lien Obligations and (b) all other circumstances
bearing upon the risk of nonpayment of the First Lien Obligations or the Second
Lien Obligations.  The First Lien Collateral Agent and the First Lien
Claimholders shall have no duty to advise the Second Lien Collateral Agent or
any Second Lien Claimholder of information known to it or them regarding such
condition or any such circumstances or otherwise.  In the event the First Lien
Collateral Agent or any of the First Lien Claimholders, in its or their sole
discretion, undertakes at any time or from time to time to provide any such
information to the Second Lien Collateral Agent or any Second Lien Claimholder,
it or they shall be under no obligation:

(a)      to make, and the First Lien Collateral Agent and the First Lien
Claimholders shall not make, any express or implied representation or warranty,
including with respect to the accuracy, completeness, truthfulness or validity
of any such information so provided;

(b)      to provide any additional information or to provide any such
information on any subsequent occasion;

(c)      to undertake any investigation; or

(d)      to disclose any information, which pursuant to accepted or reasonable
commercial finance practices, such party wishes to maintain confidential or is
otherwise required to maintain confidential.

Section 8.5.          Subrogation.  With respect to the value of any payments or
distributions in cash, property or other assets that the Second Lien Collateral
Agent or the Second Lien Claimholders pay over to any of the First Lien
Collateral Agent or the First Lien Claimholders under the terms of this
Agreement, such Second Lien Collateral Agent and Second Lien Claimholders shall
be subrogated to the rights of the First Lien Collateral Agent and First Lien
Claimholders; provided that the Second Lien Collateral Agent, on behalf of
itself and each Second Lien Claimholder, hereby agrees not to assert or enforce
any such rights of subrogation it may acquire as a result of any payment
hereunder until the Discharge of First Lien Obligations has occurred. Each
Borrower and each other Grantor acknowledges and agrees that the value of any
payments or distributions in cash, property or other assets received by the
Second Lien Collateral Agent or Second Lien Claimholder that are paid over to
the First Lien Collateral Agent or First Lien Claimholder pursuant to this
Agreement shall not reduce any of the Second Lien Obligations.

Section 8.6.          Application of Payments.  All payments received by the
First Lien Collateral Agent or any First Lien Claimholder may be applied,
reversed and reapplied, in whole or in part, to such part of the First Lien
Obligations provided for in the First Lien Loan Documents.  The Second Lien
Collateral Agent, on behalf of itself and each Second Lien Claimholder, agrees
to any extension or postponement of the time of payment of the First Lien
Obligations or any part thereof and to any other indulgence with respect
thereto, to any substitution, exchange or release of any Lien which may at any
time secure any part of the First Lien Obligations and to the addition or
release of any other Person primarily or secondarily liable therefor.
 
-38-

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

Section 8.7.          Reserved.

Section 8.8.          Agency Capacities.  Except as expressly provided herein,
(a) Fifth Third Bank, an Ohio banking corporation, is acting in the capacity of
First Lien Collateral Agent for itself and the First Lien Claimholders and (b)
Prospect Capital Corporation, a Maryland corporation, is acting in the capacity
of Second Lien Collateral Agent for itself and the Second Lien Claimholders. 

Section 8.9.          Submission to Jurisdiction; Certain Waivers.  Each party
hereto, on behalf of itself and each applicable Claimholder, each Borrower and
each other Grantor hereby irrevocably and unconditionally:

(a)      submits for itself and its property in any legal action or proceeding
relating to this Agreement (whether arising in contract, tort or otherwise) to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the exclusive general jurisdiction of the courts of the
State of New York sitting in the Borough of Manhattan, the courts of the United
States for the Southern District of New York sitting in the Borough of
Manhattan, and appellate courts from any thereof;

(b)      agrees that all claims in respect of any such action or proceeding
shall be heard and determined in such New York state court or, to the fullest
extent permitted by applicable law, in such federal court;

(c)      agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law and that nothing in this Agreement or any
other First Lien Loan Document or Second Lien Loan Document shall affect any
right that any Secured Party may otherwise have, subject to the terms hereof, to
bring any action or proceeding relating to this Agreement or any other First
Lien Loan Document or Second Lien Loan Document against any Grantor or any of
its assets in the courts of any jurisdiction;

(d)      waives, to the fullest extent permitted by applicable law, any
objection that it may now or hereafter have to the laying of venue of any action
or proceeding arising out of or relating to this Agreement or any other
Collateral Document in any court referred to in Section 8.9(a) (and irrevocably
waives to the fullest extent permitted by applicable law the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court);

(e)      consents to service of process in any such proceeding in any such court
by registered or certified mail, return receipt requested, to the applicable
party at its address provided in accordance with Section 8.11 (and agrees that
nothing in this Agreement will affect the right of any party hereto to serve
process in any other manner permitted by applicable law);
 
-39-

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

(f)       agrees that service as provided in Section 8.9(e) above is sufficient
to confer personal jurisdiction over the applicable party in any such proceeding
in any such court, and otherwise constitutes effective and binding service in
every respect; and

(g )     waives, to the maximum extent not prohibited by law, any right it may
have to claim or recover any special, exemplary, punitive or consequential
damages.

Section 8.10.          Waiver of Jury Trial.  Each party hereto and each
Borrower and the other Grantors hereby irrevocably waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by jury in any
legal proceeding directly or indirectly arising out of or relating to this
Agreement or the transactions contemplated hereby or thereby (whether based on
contract, tort, breach of duty, common law, statute or any other theory).  Each
party hereto and each Borrower and the other Grantors (a) certifies that no
representative, agent or attorney of any other  Person has represented,
expressly or otherwise, that such other Person would not, in the event of
litigation, seek to enforce the foregoing waiver and (b) acknowledges that it
and the other parties hereto have been induced to enter into this Agreement by,
among other things, the mutual waivers and certifications in this Section 8.10. 
Each party hereto and each Borrower and the other Grantors further represents
and warrants that it has reviewed this waiver with its legal counsel and that it
knowingly and voluntarily waives its jury trial rights following consultation
with legal counsel.

Section 8.11.        Notices.  All notices to the Second Lien Claimholders and
the First Lien Claimholders permitted or required under this Agreement shall
also be sent to the Second Lien Collateral Agent and the First Lien Collateral
Agent, respectively.  Unless otherwise specifically provided herein, any notice
hereunder shall be in writing and may be personally served, sent by facsimile or
United States mail or courier service and shall be deemed to have been given
when delivered in person or by courier service and signed for against receipt
thereof, upon receipt of facsimile, or three (3) Business Days after depositing
it in the United States mail with postage prepaid and properly addressed,
provided, however, that notwithstanding anything to the contrary herein, all
notices and other communications given to Prospect in its capacity as Second
Lien Collateral Agent shall be deemed to have been given (i) in the case of
notices and other communications delivered by hand or overnight courier service,
upon actual receipt thereof, (ii) in the case of notices and other
communications delivered by certified or registered mail, upon actual receipt
thereof, and (iii) in the case of notices and other communications delivered by
telefacsimile, upon receipt by the sender of an acknowledgment or transmission
report generated by the machine from which the telefacsimile was sent indicating
that the telefacsimile was sent in its entirety to the recipient’s telefacsimile
number; and provided, further, that, in each case, if a notice or other
communication would be deemed to have been given in accordance with the
foregoing at any time other than during the recipient’s normal business hours on
a Business Day for such recipient, such notice or other communication shall be
deemed given on the next succeeding Business Day for such recipient; and
provided, further, that no notice to Prospect in its capacity as Second Lien
Collateral Agent shall be effective until delivered by at least two, not one, of
the methods described in clauses (i) through (iii) above.  For the purposes
hereof, the addresses of the parties hereto shall be as set forth below each
party’s name on the signature pages hereto, 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.
 
-40-

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

Section 8.12.       Further Assurances.  The First Lien Collateral Agent, on
behalf of itself and each First Lien Claimholder, the Second Lien Collateral
Agent, on behalf of itself and each Second Lien Claimholder, and each Borrower
and each other Grantor, agree that each of them shall take such further action
and shall execute and deliver such additional documents and instruments (in
recordable form, if requested) as the Borrowers or the First Lien Collateral
Agent or the Second Lien Collateral Agent may reasonably request to effectuate
the terms of and the Lien priorities contemplated by this Agreement.

Section 8.13.        Applicable Law.  This Agreement, and any dispute, claim or
controversy arising out of or relating to this Agreement (whether arising in
contract, tort or otherwise) shall be governed by, and construed and interpreted
in accordance with, the law of the State of New York without regard to conflicts
of law rules that would result in the application of a different governing law
(other than any mandatory provisions of the UCC relating to the law governing
perfection and the effect of perfection or priority of the security interests in
the Collateral).

Section 8.14.        Binding on Successors and Assigns.  This Agreement shall be
binding upon the First Lien Collateral Agent, the First Lien Claimholders, the
Second Lien Collateral Agent, the Second Lien Claimholders, the Borrowers and
the other Grantors, and their respective successors and assigns from time to
time.  If any of the First Lien Collateral Agent or the Second Lien Collateral
Agent resigns or is replaced pursuant to the First Lien Loan Documents or the
Second Lien Loan Documents, as applicable, its successor shall be deemed to be a
party to this Agreement and shall have all the rights of, and be subject to all
the obligations of, this Agreement.  No provision of this Agreement will inure
to the benefit of a trustee, debtor-in-possession, creditor trust or other
representative of an estate or creditor of any Grantor, including where any such
trustee, debtor-in-possession, creditor trust or other representative of an
estate is the beneficiary of a Lien securing Collateral by virtue of the
avoidance of such Lien in an Insolvency or Liquidation Proceeding.

Section 8.15.       Section Headings.  The section headings and the table of
contents used in this Agreement are included herein for convenience of reference
only and shall not constitute a part of this Agreement for any other purpose, be
given any substantive effect, affect the construction hereof or be taken into
consideration in the interpretation hereof.

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 imaging means), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.  Delivery of an executed signature page of this Agreement by
facsimile or other electronic transmission (e.g. “pdf” or “tif” format) shall be
effective as delivery of a manually executed counterpart hereof.
 
-41-

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

Section 8.17.        Authorization.  By its signature, each Person executing
this Agreement, on behalf of such Person but not in his or her personal capacity
as a signatory, represents and warrants to the other parties hereto that it is
duly authorized to execute this Agreement.

Section 8.18.        No Third Party Beneficiaries/Provisions Solely to Define
Relative Rights.  This Agreement and the rights and benefits hereof shall inure
to the benefit of each of the First Lien Claimholders and the Second Lien
Claimholders and their respective successors and assigns from time to time and,
solely with respect to Sections 5.3 and 8.18 and the last sentence of Section
8.3, the Grantors and their respective successors and assigns from time to
time.  The provisions of this Agreement are and are intended solely for the
purpose of defining the relative rights of the First Lien Collateral Agent and
the First Lien Claimholders on the one hand and the Second Lien Collateral Agent
and the Second Lien Claimholders on the other hand.  Nothing herein shall be
construed to limit the relative rights and obligations as among the First Lien
Claimholders or as among the Second Lien Claimholders.  None of the Borrowers,
any other Grantor or any other creditor thereof shall have any rights or
obligations hereunder and no such Person is an intended beneficiary or third
party beneficiary hereof, except, in each case, as expressly provided in this
Agreement, and none of the Borrowers nor any Grantor may rely on the terms
hereof (other than as set forth in Sections 5.3 and 8.18 and the last sentence
of Section 8.3(a)).  Nothing in this Agreement is intended to or shall impair
the obligations of either Borrower or any other Grantor, which are absolute and
unconditional, to pay the First Lien Obligations and the Second Lien Obligations
as and when the same shall become due and payable in accordance with their
terms.

Section 8.19.        No Indirect Actions.  Unless otherwise expressly stated, if
a party may not take an action under this Agreement, then it may not take that
action indirectly, or support any other Person in taking that action directly or
indirectly.  “Taking an action indirectly” means taking an action that is not
expressly prohibited for the party but is intended to have substantially the
same effects as the prohibited action.

[Remainder of this page intentionally left blank]
 
-42-

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

In Witness Whereof, the parties hereto have executed this Second Lien
Intercreditor Agreement as of the date first written above.

Fifth Third Bank, an Ohio banking corporation, as First Lien Collateral Agent
     
By:
/s/ Michael Guenthner    
Name: Michael Guenthner
   
Title:  Senior Vice President
      
Notice address:
     
Fifth Third Bank
 
Fifth Third Center
 
38 Fountain Square Plaza
 
Cincinnati, Ohio  45263
 
Attention: Loan Syndications/Judy Huls
 
Telephone: (513) 534 4224
 
Facsimile: (513) 534 0875
 
Email: judy.huls@53.com

 

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

 
Prospect Capital Corporation, a Maryland corporation, as Second Lien Collateral
Agent
     
By:
/s/ M. Grier Eliasek    
Name: M. Grier Eliasek
   
Title: President and Chief Operating Officer
      
Notice address:
     
Prospect Capital Corporation
 
10 East 40th Street, 42nd Floor
 
New York, New York 10016
 
Attention:   General Counsel and David Moszer
 
Facsimile:   (212) 443-9652
 
Email:          fax@prospectstreet.com
 
pl@prospectstreet.com
 
pacct@prospectstreet.com
 
dmoszer@prospectstreet.com
 
grier@prospectstreet.com
 
jbarry@prospectstreet.com
      
With copies (which shall not constitute notice) to:
      
Proskauer Rose LLP
 
One International Place
 
Boston, Massachusetts 02110
 
Attention: Stephen A. Boyko
 
Facsimile: (617) 526-9899
 
E-mail: sboyko@proskauer.com

 

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

Acknowledged and Agreed:
     
Borrowers:
     
Turning Point Brands, Inc.
 
North Atlantic Trading Company, Inc.
     
By:
/s/ Mark A. Stegeman    
Name:
Mark A. Stegeman
   
Title:  
Senior Vice President and Chief
     
Financial Officer
 
Grantors:
     
NATC Holding Company, Inc.
 
Turning Point Brands, LLC
 
Intrepid Brands, LLC
 
National Tobacco Finance Corporation
 
North Atlantic Operating Company, Inc.
 
North Atlantic Cigarette Company, Inc.
 
Stoker, Inc.
 
National Tobacco Company, L.P.
 
RBJ Sales, Inc.
 
Smoke Free Technologies Inc.
          
By:
/s/ Mark A. Stegeman    
Name:
Mark A. Stegeman
   
Title:  
Senior Vice President and Chief
     
Financial Officer
          
Notice Address:
     
Turning Point Brands, Inc.
 
5201 Interchange Way
 
Louisville, Kentucky 40229
 
Attention:  General Counsel, c/o James Dobbins
 
Telephone No.: 502-774-9267
 
Facsimile No.: 502-774-9275
 
E-mail:  jdobbins@natcinc.net
 

 

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

Schedule 1

None.
 
 

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