Exhibit 10.41


 


Execution Version


	
   

  
	
   

  



INTERCREDITOR AGREEMENT


 


among


 


PROSPECT
MEDICAL HOLDINGS, INC.


and


PROSPECT
MEDICAL GROUP, INC.,


as the Borrowers,


 


and


 


CERTAIN SUBSIDIARIES OF THE BORROWERS


FROM TIME TO TIME PARTIES HERETO


as Guarantors,


 


and


 


BANK OF AMERICA, N.A.,


as First Lien Collateral Agent


 


and


 


BANK OF AMERICA, N.A,


as Second Lien Collateral Agent


 


and


 


BANK OF AMERICA, N.A,


as Control Agent


 


Dated as of August 8, 2007


	
   

  



 

















 


Table of
Contents


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I DEFINITIONS

  	
   

  	
  2

  
	
   

  	
   

  	
   

  
	
  Section 1.01

  	
  Defined
  Terms

  	
  2

  
	
  Section 1.02

  	
  Other
  Interpretive Provisions

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE II LIEN PRIORITIES

  	
   

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 2.01

  	
  Relative
  Priorities

  	
  12

  
	
  Section 2.02

  	
  Failure to
  Perfect

  	
  12

  
	
  Section 2.03

  	
  Nature of
  First Lien Obligations

  	
  12

  
	
  Section 2.04

  	
  Prohibition
  on Contesting Liens

  	
  13

  
	
  Section 2.05

  	
  No New Liens

  	
  13

  
	
  Section 2.06

  	
  Similar
  Liens and Agreements

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE III ENFORCEMENT

  	
   

  	
  15

  
	
  Section 3.01

  	
  Exercise of
  Remedies

  	
  15

  
	
  Section 3.02

  	
  Actions Upon
  Breach

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV PAYMENTS

  	
   

  	
  18

  
	
   

  	
   

  	
   

  
	
  Section 4.01

  	
  Application
  of Proceeds

  	
  18

  
	
  Section 4.02

  	
  Payments
  Over

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE V OTHER AGREEMENTS

  	
   

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 5.01

  	
  Releases

  	
  19

  
	
  Section 5.02

  	
  Insurance

  	
  20

  
	
  Section 5.03

  	
  Amendments
  to First Lien Loan Documents and Second Lien Loan Documents

  	
  20

  
	
  Section 5.04

  	
  Rights As
  Unsecured Creditors

  	
  22

  
	
  Section 5.05

  	
  Control
  Agent for Perfection

  	
  23

  
	
  Section 5.06

  	
  When
  Discharge of First Lien Obligations Deemed to Not Have Occurred

  	
  25

  
	
  Section 5.07

  	
  Purchase
  Right

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI
  INSOLVENCY OR LIQUIDATION PROCEEDINGS

  	
  27

  
	
   

  	
   

  	
   

  
	
  Section 6.01

  	
  Finance and
  Sale Issues

  	
  27

  
	
  Section 6.02

  	
  Relief from
  the Automatic Stay

  	
  27

  
	
  Section 6.03

  	
  Adequate
  Protection

  	
  28

  
	
  Section 6.04

  	
  No Waiver

  	
  29

  
	
  Section 6.05

  	
  Avoidance
  Issues

  	
  29

  
	
  Section 6.06

  	
  Separate
  Grants of Security and Separate Classification

  	
  29

  
				



 


i

















 


	
  Section 6.07

  	
  Reorganization
  Securities

  	
  30

  
	
  Section 6.08

  	
  Post-Petition
  Claims

  	
  30

  
	
  Section 6.09

  	
  Waiver

  	
  30

  
	
  Section 6.10

  	
  Expense
  Claims

  	
  30

  
	
  Section 6.11

  	
  Other
  Matters

  	
  30

  
	
  Section 6.12

  	
  Effectiveness
  in Insolvency or Liquidation Proceedings

  	
  31

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII RELIANCE; WAIVERS;
  ETC

  	
   

  	
  31

  
	
   

  	
   

  	
   

  
	
  Section 7.01

  	
  Non-Reliance

  	
  31

  
	
  Section 7.02

  	
  No
  Warranties or Liability

  	
  32

  
	
  Section 7.03

  	
  No Waiver of
  Lien Priorities

  	
  32

  
	
  Section 7.04

  	
  Obligations
  Unconditional

  	
  34

  
	
  Section 7.05

  	
  Certain
  Notices

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII MISCELLANEOUS

  	
   

  	
  35

  
	
   

  	
   

  	
   

  
	
  Section 8.01

  	
  Inconsistencies
  with Other Documents

  	
  35

  
	
  Section 8.02

  	
  Effectiveness;
  Continuing Nature of this Agreement; Severability

  	
  35

  
	
  Section 8.03

  	
  Amendments;
  Waivers

  	
  36

  
	
  Section 8.04

  	
  Information
  Concerning Financial Condition of the Borrowers and their Subsidiaries

  	
  36

  
	
  Section 8.05

  	
  Subrogation

  	
  37

  
	
  Section 8.06

  	
  Application
  of Payments

  	
  37

  
	
  Section 8.07

  	
  SUBMISSION
  TO JURISDICTION

  	
  37

  
	
  Section 8.08

  	
  California
  Judicial Reference

  	
  38

  
	
  Section 8.09

  	
  Notices

  	
  39

  
	
  Section 8.10

  	
  Further
  Assurances

  	
  39

  
	
  Section 8.11

  	
  APPLICABLE
  LAW

  	
  39

  
	
  Section 8.12

  	
  Binding on
  Successors and Assigns

  	
  39

  
	
  Section 8.13

  	
  Specific
  Performance

  	
  39

  
	
  Section 8.14

  	
  Titles and
  Captions

  	
  39

  
	
  Section 8.15

  	
  Counterparts;
  Integration

  	
  39

  
	
  Section 8.16

  	
  Authorization

  	
  40

  
	
  Section 8.17

  	
  No Third
  Party Beneficiaries

  	
  40

  
	
  Section 8.18

  	
  Provisions
  Solely to Define Relative Rights

  	
  40

  
				



 


ii

















 


INTERCREDITOR AGREEMENT


 


This
INTERCREDITOR AGREEMENT, is dated as of August 8, 2007, and entered into
by and among PROSPECT MEDICAL HOLDINGS, INC., a Delaware corporation (“Holdings”),
PROSPECT MEDICAL GROUP, INC., a California professional corporation (together
with Holdings, each a “Borrower” and collectively, the “Borrowers”),
and certain Subsidiaries of the Borrowers (the “Guarantors”),  BANK OF AMERICA, N.A.,  in its
capacity as administrative agent for the First Lien Obligations (as defined
below), including its successors and assigns from time to time (the “First
Lien Collateral Agent”), BANK OF AMERICA, N.A., in its capacity as
administrative agent for the Second Lien Obligations under the Second Lien
Credit Agreement (as defined below), including its successors and assigns from
time to time (the “Second Lien Collateral Agent”) and BANK OF AMERICA,
N.A., in its capacity as Control Agent (as defined below) for the First Lien
Collateral Agent and the Second Lien Collateral Agent.  Capitalized terms used herein but not
otherwise defined herein have the meanings set forth in Article I below.


 


RECITALS


 


WHEREAS, the
Borrower, the Guarantors, the lenders party thereto, and Bank of America, N.A.,
as Administrative Agent, have entered into that certain Credit Agreement dated
as of the date hereof providing for a revolving credit facility and a term loan
facility to the Borrowers (as amended, restated, supplemented, modified or
Refinanced from time to time, the “Initial First Lien Credit Agreement”);


 


WHEREAS, the
Borrower, the Guarantors, the lenders party thereto, and Bank of America, N.A.,
as Administrative Agent, have entered into that certain Credit Agreement dated
as of the date hereof providing for a term loan to the Borrowers (as amended,
restated, supplemented, modified or Refinanced from time to time, the “Initial
Second Lien Credit Agreement”);


 


WHEREAS, (a) the
obligations of the Borrowers and the Guarantors under the Initial First Lien
Credit Agreement and the other First Lien Loan Documents, (b) any Secured
Hedge Agreement, and (c) any Secured Cash Management Agreement will be
secured by substantially all of the assets of the Borrowers and the Guarantors
pursuant to the terms of the First Lien Collateral Documents;


 


WHEREAS, (a) the
obligations of the Borrower and the Guarantors under the Initial Second Lien
Credit Agreement and the other Second Lien Loan Documents and (b) any
Secured Hedge Agreement, and (c) any Secured Cash Management Agreement,
will be secured by substantially all of the assets of the Borrowers and the
Guarantors pursuant to the terms of the Second Lien Collateral Documents;


 


WHEREAS, the
First Lien Loan Documents and the Second Lien Loan Documents provide, among
other things, that the parties thereto shall set forth in this Agreement their
respective rights and remedies with respect to the Collateral; and


 


WHEREAS, in
order to induce the First Lien Collateral Agent and the First Lien Claimholders
to consent to incurrence by the Grantors (as defined below) of the Second Lien 


 

















 


Obligations and to induce the
First Lien Claimholders to extend credit and other financial accommodations to
or for the benefit of the Borrower, or any other Grantor, the Second Lien
Collateral Agent on behalf of the Second Lien Claimholders has agreed to the
lien subordination, intercreditor and other provisions set forth in this
Agreement.


 


NOW, THEREFORE, 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 parties
hereto, intending to be legally bound, hereby agree as follows:


 


ARTICLE I


 


DEFINITIONS


 


Section 1.01           Defined Terms.  As used in the Agreement, the following terms
shall have the following meanings:


 


“Affiliate”
means, with respect to any Person, another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified.


 


“Agreement”  means this Intercreditor Agreement, as amended, restated
supplemented or otherwise modified from time to time.


 


“Attributable
Indebtedness” means, on any date, (a) in respect of any
Capitalized Lease of any Person, the capitalized amount thereof that would
appear on a balance sheet of such Person prepared as of such date in accordance
with GAAP, (b) in respect of any Synthetic Lease Obligation, the
capitalized amount of the remaining lease or similar payments under the
relevant lease or other applicable agreement or instrument that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP
if such lease or other agreement or instrument were accounted for as a
Capitalized Lease and (c) all Synthetic Debt of such Person.


 


“Bank of America”
means Bank of America, N.A. and its successors.


 


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


 


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


 


“Business
Day”  means any day other than a Saturday,
Sunday or other day on which commercial banks are authorized to close under the
Laws of, or are in fact closed in, New York, New York and Charlotte, North
Carolina.


 


“Capitalized
Lease” means all leases that have been or should be, in accordance with
GAAP, recorded as capitalized leases.


 


2

















 


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


 


“Cash
Management Bank” means any Person that, at the time it enters into a Cash
Management Agreement, is a Lender or an Affiliate of a Lender, in its capacity
as a party to such Cash Management Agreement.


 


“Collateral”  means all of the assets and property of any Grantor,
whether tangible or intangible, constituting both First Lien Collateral and
Second Lien Collateral.


 


“Control
Agent” has the meaning set forth in Section 5.05(a).


 


“Control
Collateral” means any Collateral consisting of any Certificated Security,
Instrument, Investment Property, Deposit Account, Securities Account (each as
defined in the UCC), cash and any other Collateral as to which a first priority
Lien shall or may be perfected through possession or control by the secured
party or any agent therefor.


 


“Controlled
Account” means those certain Deposit Accounts (as defined in the UCC) of
any Grantor subject to Liens under the terms of the First Lien Collateral
Documents and the Second Lien Collateral Documents and subject to control or a
control agreement in favor of the Control Agent.


 


“Debtor Relief Laws”
means the Bankruptcy Code, and all other liquidation, conservatorship,
bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief Laws of the
United States or other applicable jurisdictions from time to time in effect and
affecting the rights of creditors generally.


 


“DIP
Financing”  has the meaning set forth in Section 6.01.


 


“Discharge
of First Lien Obligations”  means, except
to the extent otherwise provided in Section 5.06, (a) payment
in full in cash of the principal of and interest (including interest accruing
on or after the commencement of any Insolvency or Liquidation Proceeding,
whether or not a claim for such interest is, or would be, allowed in such
Insolvency or Liquidation Proceeding, in which case such interest shall be
repaid from funds otherwise possibly available to the Second Lien Claimholders)
and premium, if any, on all Indebtedness outstanding under the First Lien Loan
Documents and termination of all commitments to lend or otherwise extend credit
under the First Lien Loan Documents, (b) payment in full in cash of all
other First Lien Obligations that are due and payable or otherwise accrued and
owing at or prior to the time such principal and interest are paid (including
legal fees and other expenses, costs or charges accruing on or after the
commencement of any Insolvency or Liquidation Proceeding, whether or not a claim
for such fees, expenses, costs or charges is, or would be, allowed in such
Insolvency or Liquidation Proceeding), (c) termination of any Secured
Hedge Agreement and the payment in full in cash of all obligations thereunder, (d) termination
of any Secured Cash Management Agreement and the payment in full in cash of all
obligations thereunder, (e) termination or cash collateralization (in an
amount reasonably satisfactory to the First Lien Collateral Agent not to exceed
105%) of, all letters of credit issued under the First Lien Loan Documents, and
(f) 


 


3

















 


adequate provision has been
made for any contingent or unliquidated First Lien Obligations related to
claims, causes of action, or liabilities that have been asserted or threatened
against the First Lien Lenders or the First Lien Claimholders or that otherwise
can be reasonably identified based on the then known facts and circumstances.


 


“Disposition”
has the meaning set forth in Section 5.01(a)(ii).


 


“Equity Interests” means,
with respect to any Person, all of the shares of capital stock of (or other
ownership or profit interests in) such Person, all of the warrants, options or
other rights for the purchase or acquisition from such Person of shares of capital
stock of (or other ownership or profit interests in) such Person, all of the
securities convertible into or exchangeable for shares of capital stock of (or
other ownership or profit interests in) such Person or warrants, rights or
options for the purchase or acquisition from such Person of such shares (or
such other interests), and all of the other ownership or profit interests in
such Person (including partnership, member or trust interests therein), whether
voting or nonvoting.


 


“Exercise
of Remedies” has the meaning set forth in Section 5.01(a)(i).


 


“Federal
Funds Rate” means, for any day, the rate per annum equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day; provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (b) if no such rate is so published on such
next succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%)
charged to Bank of America on such day on such transactions as determined by
Bank of America.


 


“First Lien
Claimholders”  means, at any relevant time, the
holders of First Lien Obligations at such time, including, without limitation,
the First Lien Lenders and any agent under the First Lien Credit Agreement.


 


“First Lien
Collateral”  means all of the assets and
property of any Grantor, whether real, personal or mixed, with respect to which
a Lien is granted as security for any First Lien Obligations.


 


“First Lien
Collateral Agent” has the meaning set forth in the preamble hereof.


 


“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 under which rights or remedies with
respect to such Liens are governed.


 


“First Lien
Credit Agreement”  means  (a) the Initial First Lien Credit Agreement and (b) any
other credit agreement, loan agreement, note agreement, promissory note,
indenture or other agreement or instrument evidencing or governing the terms of
any indebtedness or other financial accommodation that has been incurred to
extend, increase (subject to the limitations set 


 


4

















 


forth herein), replace,
refinance or refund in whole or in part the indebtedness and other obligations
outstanding under (i) the Initial First Lien Credit Agreement or (ii) any
subsequent First Lien Credit Agreement, unless such agreement or instrument
expressly provides that it is not intended to be and is not a First Lien Credit
Agreement hereunder.  Any reference to
the First Lien Credit Agreement hereunder shall be deemed a reference to any
First Lien Credit Agreement then in existence.


 


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


 


“First Lien
Loan Documents”  means the
First Lien Credit Agreement and the Loan Documents (as defined in the First
Lien Credit Agreement) and each of the other agreements, documents and
instruments providing for or evidencing any other First Lien Obligation, and
any other document or instrument executed or delivered at any time in
connection with any First Lien Obligations, including any intercreditor or
joinder agreement among holders of First Lien Obligations, to the extent such
are effective at the relevant time, as each may be modified from time to time
in accordance with this Agreement.


 


“First Lien
Obligations”  means all (a) outstanding “Obligations”
as defined in and arising under the First Lien Credit Agreement and the other
First Lien Loan Documents (it being understood, for avoidance of doubt, that
obligations owed to a Hedge Bank and/or a Cash Management Bank that is both a
First Lien Claimholder and a Second Lien Claimholder at the time such Secured
Hedge Agreement and/or Secured Cash Management Agreement was entered into by
any Borrower shall be considered First Lien Obligations) and (b) any DIP
Financing;  provided that the aggregate
principal amount, without duplication, of any revolving credit commitments,
revolving credit loans, letters of credit, term loans, bonds, debentures, notes
or similar instruments provided for under the First Lien Credit Agreement or
any other First Lien Loan Document (or any Refinancing thereof) in excess of
the Maximum First Lien Indebtedness shall not constitute First Lien Obligations
for purposes of this Agreement.  “First
Lien Obligations” shall include (i) all interest accrued or accruing (or which
would, absent commencement of an Insolvency or Liquidation Proceeding, accrue)
in accordance with the rate specified in the relevant First Lien Loan Document
and (ii) all fees, costs and charges incurred in connection with the First
Lien Loan Documents and provided for thereunder (including, without limitation,
legal fees), in the case of clause (i) and (ii) whether before or after
commencement of an Insolvency or Liquidation Proceeding and irrespective of
whether any claim for such interest, fees, costs or charges is allowed as a
claim in such Insolvency or Liquidation Proceeding.


 


“GAAP”
means generally accepted accounting principles in the United States set forth
in the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.


 


“Governmental
Authority” means the government of the United States or any other nation,
or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, 


 


5

















 


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 Borrower and each of the Guarantors that have
executed and delivered, or may from time to time hereafter execute and deliver,
a First Lien Collateral Document or a Second Lien Collateral Document.


 


“Guarantee”
means, as to any Person, any (a) obligation, contingent or otherwise, of
such Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation payable or performable by another Person (the “primary obligor”)
in any manner, whether directly or indirectly, and including any obligation of
such Person, direct or indirect, (i) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to
purchase or lease property, securities or services for the purpose of assuring
the obligee in respect of such Indebtedness or other obligation of the payment
or performance of such Indebtedness or other obligation, (iii) to maintain
working capital, equity capital or any other financial statement condition or
liquidity or level of income or cash flow of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered
into for the purpose of assuring in any other manner the obligee in respect of
such Indebtedness or other obligation of the payment or performance thereof or
to protect such obligee against loss in respect thereof (in whole or in part),
or (b) any Lien on any assets of such Person securing any Indebtedness or
other obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien).  The amount of any Guarantee shall be deemed
to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the guaranteeing Person in good
faith.  The term “Guarantee”
as a verb has a corresponding meaning.


 


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


 


“Hedge Bank” means any
Person that, at the time it enters into a Secured Hedge Agreement, is a Lender
or an Affiliate of a Lender, in its capacity as a party to such Secured Hedge
Agreement.


 


“Indebtedness”
means, as to any Person at a particular time, without duplication, all of the
following, whether or not included as indebtedness or liabilities in accordance
with GAAP:


 


(a)           all obligations of
such Person for borrowed money and all obligations of such Person evidenced by
bonds, debentures, notes, loan agreements or other similar instruments;


 


(b)           the maximum amount
of all direct or contingent obligations of such Person arising under letters of
credit, including standby and commercial, solely to the extent that such
letters of credit are not fully cash collateralized, bankers’ acceptances, bank
guaranties, surety bonds and similar instruments;


 


6














 


(c)           net obligations of such Person under any
Swap Contract;


 


(d)           all obligations of such Person to pay the
deferred purchase price of property or services (other than trade accounts
payable in the ordinary course of business and not past due for more than 90
days after the date on which such trade account was created);


 


(e)           indebtedness (excluding prepaid interest
thereon) secured by a Lien on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have been assumed
by such Person or is limited in recourse;


 


(f)            all Attributable Indebtedness in respect
of Capitalized Leases and Synthetic Lease Obligations of such Person and all
Synthetic Debt of such Person;


 


(g)           all obligations of such Person to
purchase, redeem, retire, defease or otherwise make any payment in respect of
any Equity Interest in such Person or any other Person or any warrant, right or
option to acquire such Equity Interest, valued, in the case of a redeemable
preferred interest, at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends;


 


(h)           all Guarantees of such Person in respect
of any of the foregoing; and


 


(i)            all obligations owing in respect of
Medicare and/or Medicaid.


 


For all purposes hereof, the
Indebtedness of any Person shall include the Indebtedness of any partnership or
joint venture (other than a joint venture that is itself a corporation or
limited liability company) in which such Person is a general partner or a joint
venturer, unless such Indebtedness is expressly made non-recourse to such
Person.  The amount of any net obligation
under any Swap Contract on any date shall be deemed to be the Swap Termination
Value thereof as of such date.


 


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


 


“Initial Second Lien
Credit Agreement”  has the
meaning set forth in the Recitals.


 


“Insolvency or
Liquidation Proceeding” means (a) any voluntary or involuntary case or
proceeding under the Bankruptcy Code or any other Debtor Relief Law 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 its 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 generally or any other
marshalling of assets and liabilities of any Grantor.


 


“Lien”  means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential arrangement in
the nature of a security interest of any kind or nature whatsoever 


 


7

















 


(including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).


 


“Maximum First Lien
Indebtedness” means the original principal amount of $125,000,000 plus interest, fees and expenses (a) as provided in the
First Lien Credit Agreement and (b) owing in connection with any DIP
Financing less (i) the amount of all
repayments and prepayments applied to the principal amount of any term loans
under the First Lien Credit Agreement and (ii) the amount of all
repayments and prepayments of the principal amount of any revolving loan or
letter of credit under the First Lien Credit Agreement, to the extent
accompanied by a corresponding permanent reduction in the applicable commitment
amount (other than reductions in sub-facility commitment amounts where not
accompanied by a reduction in the related facility commitment amounts) and with
respect to repayments and prepayments described in clause (ii), other than
repayments and prepayments made as a result of a Refinancing or DIP Financing,
the proceeds of which are used to repay the outstanding First Lien Obligations;
provided, that the amount of any DIP Financing as contemplated in Section 6.01
hereof shall be included for purposes of calculating Maximum First Lien
Indebtedness.


 


“Operating Lease”
means, as to any Person as determined in accordance with GAAP, any lease of
property (whether real, personal or mixed) by such Person as lessee which is
not a Capital Lease.


 


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


 


“Recovery”  has the meaning set forth in Section 6.05.


 


“Refinance”  means, in respect of any indebtedness, to refinance,
replace or repay, or to issue other indebtedness, in exchange or replacement
for, such indebtedness.  “Refinanced” and
“Refinancing” shall have correlative meanings.


 


“Requisite Lenders”
means those lenders under the First Lien Credit Agreement or the Second Lien
Credit Agreement, as applicable, that are necessary to approve the contemplated
action.


 


“Second Lien Claimholders”  means, at any relevant time, the holders of Second Lien
Obligations at such time, including, without limitation, the Second Lien
Lenders and any agent under the Second Lien Credit Agreement.


 


“Second Lien Collateral”  means all of the assets and property of any Grantor, whether
real, personal or mixed, with respect to which a Lien is granted as security
for any Second Lien Obligations.


 


“Second Lien Collateral
Agent”  has the meaning set forth in the
preamble hereof.


 


“Second Lien Collateral
Documents”  means the Collateral Documents
(as defined in the Second Lien Credit Agreement) and any other agreement,
document or instrument pursuant to 


 


8

















 


which a Lien is granted
securing any Second Lien Obligations or under which rights or remedies with
respect to such Liens are governed.


 


“Second Lien Credit
Agreement”  means  (a) the
Initial Second Lien Credit Agreement and (b) any other credit agreement,
loan agreement, note agreement, promissory note, indenture, or other agreement
or instrument evidencing or governing the terms of any indebtedness or other
financial accommodation that has been incurred to extend, increase (subject to
the limitations set forth herein), replace, refinance or refund in whole or in
part the indebtedness and other obligations outstanding under the Initial
Second Lien Credit Agreement or other agreement or instrument referred to in
this clause (b).  Any reference to the
Second Lien Credit Agreement hereunder shall be deemed a reference to any
Second Lien Credit Agreement then in existence.


 


“Second Lien Enforcement
Date” means the date which is 120 days after the occurrence of (a) an
Event of Default (under and as defined in the Second Lien Credit Agreement) and
(b) the First Lien Collateral Agent’s receipt of written notice from the
Second Lien Collateral Agent certifying that (i) an Event of Default
(under and as defined in the Second Lien Credit Agreement) has occurred and is
continuing and (ii) the Second Lien Obligations are currently due and
payable in full (whether as a result of acceleration thereof or otherwise) in
accordance with terms of the Second Lien Credit Agreement; provided
that the Second Lien Enforcement Date shall be stayed and shall not occur and
shall be deemed not to have occurred (1) at any time the First Lien
Collateral Agent or the First Lien Claimholders have commenced and are
diligently pursuing in good faith any enforcement action with respect to all or
a material portion of the Collateral, (2) at any time any Grantor is then
a debtor under or with respect to (or otherwise subject to) any Insolvency or
Liquidation Proceeding or (3) if the acceleration of the Second Lien
Obligations (if any) is rescinded in accordance with the terms of the Second
Lien Credit Agreement or otherwise.


 


“Second Lien Lenders”  means the “Lenders” under and as defined in the Initial
Second Lien Credit Agreement.


 


“Second Lien Loan
Documents”  means the Second Lien Credit
Agreement and the Loan Documents (as defined in the Second Lien Credit
Agreement) and each of the other agreements, documents and instruments
providing for or evidencing any other Second Lien Obligation, and any other
document or instrument executed or delivered at any time in connection with any
Second Lien Obligations, including any intercreditor or joinder agreement among
holders of Second Lien Obligations, to the extent such are effective at the
relevant time, as each may be modified from time to time to the extent
permitted by this Agreement.


 


“Second Lien Obligations”  means all (a) outstanding “Obligations” as defined in
and arising under the Second Lien Credit Agreement and the other Second Lien
Loan Documents (it being understood, for avoidance of doubt, that obligations
owed to a Hedge Bank and/or a Cash Management Bank that is both a First Lien Claimholder
and a Second Lien Claimholder at the time such Secured Hedge Agreement and/or
Secured Cash Management Agreement was entered into by any Borrower shall be
considered First Lien Obligations).  “Second
Lien Obligations” shall include (i) all interest accrued or accruing (or
which would, absent commencement of an Insolvency or Liquidation Proceeding,
accrue) in accordance with the rate specified in the relevant Second Lien Loan
Document and (ii) all fees, costs and charges incurred in connection 


 


9

















 


with the Second Lien Loan
Documents and provided for thereunder (including, without limitation, legal
fees), in each case after commencement of an Insolvency or Liquidation
Proceeding irrespective of whether any claim for such interest, fees, costs or
charges is allowed as a claim in such Insolvency or Liquidation Proceeding.


 


“Secured Cash Management
Agreement” means any Cash Management Agreement that is entered into by and
between either Borrower and any Cash Management Bank.


 


“Secured Hedge Agreement”
means any interest rate Swap Contract required or permitted under the First
Lien Credit Agreement or the Second Lien Credit Agreement that is entered into
by and between either Borrower and any Hedge Bank.


 


“Standstill Period”  has the meaning set forth in Section 3.01(a)(i)(A) hereof.


 


“Subsidiary” of a
Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of
securities or other interests having ordinary voting power for the election of
directors or other governing body (other than securities or interests having
such power only by reason of the happening of a contingency) are at the time
beneficially owned, or the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries, or both, by such
Person.  Unless otherwise specified or
the context otherwise requires, all references herein to a “Subsidiary”
or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of
Holdings and shall include the PMG Loan Parties (as defined in each of the
First Lien Credit Agreement and the Second Lien Credit Agreement); provided,
however, that the parties agree that Brotman Medical Center, Inc., a California
corporation, in which Holdings’ Subsidiary, Prospect Hospital Advisory Services, Inc.,
holds less than a majority or the shares, is not considered a Subsidiary.


 


“Swap Contract” means (a) any
and all rate swap transactions, basis swaps, credit derivative transactions,
forward rate transactions, commodity swaps, commodity options, forward
commodity contracts, equity or equity index swaps or options, bond or bond
price or bond index swaps or options or forward bond or forward bond price or
forward bond index transactions, interest rate options, forward foreign
exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all
transactions of any kind, and the related confirmations, which are subject to
the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc.,
any International Foreign Exchange Master Agreement, or any other master
agreement (any such master agreement, together with any related schedules, a “Master Agreement”),
including any such obligations or liabilities under any Master Agreement.


 


“Swap Termination Value” means, in
respect of any one or more Swap Contracts, after taking into account the effect
of any legally enforceable netting agreement relating to such Swap Contracts, (a) for
any date on or after the date such Swap Contracts have been closed out and
termination value(s) determined in accordance therewith, such termination
value(s), and (b) for 


 


10

















 


any date prior to the date
referenced in clause (a), the amount(s) determined as the mark-to-market
value(s) for such Swap Contracts, as determined based upon one or more
mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).


 


“Synthetic Debt” means, with respect
to any Person as of any date of determination thereof, all obligations of such
Person in respect of transactions entered into by such Person that are intended
to function primarily as a borrowing of funds but are not otherwise included in
the definition of “Indebtedness” or as a liability on the consolidated
balance sheet of such Person and its Subsidiaries in accordance with GAAP.


 


“Synthetic Lease
Obligation” means the monetary obligation of a Person under (a) a
so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property (including sale and leaseback
transactions), in each case, creating obligations that do not appear on the
balance sheet of such Person but which, upon the application of any Debtor
Relief Laws to such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).


 


“UCC” means the
Uniform Commercial Code as in effect in the State of New York; provided that, if perfection or the effect of
perfection or non-perfection or the priority of any security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New
York, “UCC” means the Uniform Commercial Code as in effect from
time to time in such other jurisdiction for purposes of the provisions hereof
relating to such perfection, effect of perfection or non-perfection or
priority.


 


“United States” means
the United States of America.


 


Section 1.02           Other Interpretive
Provisions.


 


(a)           The definitions of terms herein shall apply equally
to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed to have
the same meaning and effect as the word “shall”.  Unless the context requires otherwise (i) any
definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise modified
(subject to any restriction on such amendments, supplements or modifications
set forth herein), (ii) any reference herein to any Person shall be
construed to include such Person’s successors and assigns, (iii) the words
“herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (iv) all references herein to Recitals, Exhibits or Sections
shall be construed to refer to Recitals, Exhibits, Articles or Sections of this
Agreement and (v) 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.


 


11

















 


(b)           In the computation of periods of time from a
specified date to a later specified date, the word “from” means “from
and including;” the words “to” and “until” each mean “to
but excluding;” and the word “through” means “to and including.”


 


(c)           Section headings herein are included for convenience
of reference only and shall not affect the interpretation of this Agreement.


 


ARTICLE II


 


LIEN PRIORITIES


 


Section 2.01           Relative Priorities.  Notwithstanding the date, 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 applicable Law or the Second Lien Loan Documents, the Second Lien
Collateral Agent (on behalf of itself and the Second Lien Claimholders) hereby
agrees that:  (a) any Lien on the
Collateral securing any 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 therefor, 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 of
the Second Lien Obligations; and (b) any Lien on the Collateral now or
hereafter held by or on behalf of the Second Lien Collateral Agent, any Second
Lien Claimholders or any agent or trustee therefor 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.


 


Section 2.02           Failure to Perfect.  All Liens on the Collateral securing any
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, notwithstanding any failure of the First Lien Collateral Agent or the
First Lien Claimholders to adequately perfect its security interests in the
Collateral, the subordination of any Lien on the Collateral securing any First
Lien Obligations to any Lien securing any other obligation of any Grantor, or
the avoidance, invalidation or lapse of any Lien on the Collateral securing any
First Lien Obligations.


 


Section 2.03           Nature of First Lien
Obligations.  The Second
Lien Collateral Agent (for itself and on behalf of the other Second Lien
Claimholders) acknowledges that (a) a portion of the First Lien
Obligations are revolving in nature, (b) the amount thereof that may be
outstanding at any time or from time to time may be increased or reduced and
subsequently reborrowed, (c) the terms of the First Lien Obligations may be
modified, extended or amended from time to time, and (d), subject to the
limitations on the aggregate principal amount of First Lien Obligations set
forth in the definition of “First Lien Obligations” or in Section 5.03,
the aggregate amount of the First Lien Obligations may be increased or
Refinanced, in either event, without notice to or consent by the Second Lien
Claimholders and without affecting the provisions hereof.  The lien priorities provided in Sections
2.01 and 2.02 shall not be altered or otherwise affected by any such
amendment, modification, supplement, extension, repayment, reborrowing,
increase, replacement, renewal, restatement or Refinancing of either the First
Lien Obligations or the Second Lien Obligations, or any portion thereof.


 


12

















 


Section 2.04           Prohibition on Contesting
Liens.  Each of 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 shall not (and hereby waives any right to) contest
or support any other Person in contesting, in any proceeding (including any
Insolvency or Liquidation Proceeding), the priority, validity or enforceability
of a Lien 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; 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 priority of the Liens securing the First Lien
Obligations as provided in Sections 2.01 and 3.01.


 


Section 2.05           No New Liens.


 


(a)           Limitation on other Collateral for First Lien Claimholders.  So long as any Second Lien Obligations remain
outstanding, and subject to Article VI, (i) the First Lien Collateral
Agent agrees that, after the date hereof, neither the First Lien Collateral
Agent nor any First Lien Claimholder shall acquire or hold any Lien on any
assets of any Grantor securing any First Lien Obligations which assets are not
also subject to the second-priority Lien of the Second Lien Collateral Agent
under the Second Lien Collateral Documents, and (ii) each Grantor agrees not
to grant any Lien on any of its assets, or permit any of its Subsidiaries to
grant a Lien on any of its assets, in favor of the First Lien Collateral Agent
or the First Lien Claimholders unless it, or such Subsidiary, has granted a
similar Lien on such assets in favor of the Second Lien Collateral Agent or the
Second Lien Claimholders.  If the First
Lien Collateral Agent or any First Lien Claimholder shall (nonetheless and in
breach hereof) acquire any Lien on any assets of any Grantor or any of their respective
Subsidiaries securing any First Lien Obligations which assets are not also
subject to the second-priority Lien of the Second Lien Collateral Agent under
the Second Lien Collateral Documents, then the First Lien Collateral Agent (or
the relevant First Lien Claimholder), shall, without the need for any further
consent of any other Person and notwithstanding anything to the contrary in any
other First Lien Loan Document (x) in addition to holding such Lien for
the benefit of itself and the other First Lien Claimholders as security for the
First Lien Obligations, also hold and be deemed to have held such Lien for the
benefit of the Second Lien Collateral Agent as security for the Second Lien
Obligations subject to the priorities set forth herein or (y) release such
Lien.


 


(b)           Limitation on other Collateral for Second Lien
Claimholders.  Until the date upon which
the Discharge of First Lien Obligations shall have occurred, (i) the
Second Lien Collateral Agent agrees that, after the date hereof, neither the
Second Lien Collateral Agent nor any Second Lien Claimholder shall acquire or
hold any Lien on any assets of any Grantor securing any Second Lien Obligations
which assets are not also subject to the senior priority Lien of the First Lien
Collateral Agent under the First Lien Collateral Documents, and (ii) each
Grantor agrees not to grant any Lien on any of its assets, or permit any of its
Subsidiaries to grant a Lien on any of its assets, in favor of the Second Lien
Collateral Agent or the Second Lien Claimholders unless it, or such Subsidiary,
has granted a similar Lien on such assets in favor of the First Lien Collateral



 


13

















 


Agent or the First Lien Claimholders. 
If the Second Lien Collateral Agent or any Second Lien Claimholder shall
(nonetheless and in breach hereof) acquire any Lien on any assets of any
Grantor or any of their respective Subsidiaries securing any Second Lien
Obligations which assets are not also subject to the first-priority Lien of the
First Lien Collateral Agent under the First Lien Collateral Documents, then the
Second Lien Collateral Agent (or the relevant Second Lien Claimholder), shall,
without the need for any further consent of any other Person and
notwithstanding anything to the contrary in any other Second Lien Loan Document
(x) in addition to holding such Lien for the benefit of itself and the
other Second Lien Claimholders as security for the Second Lien Obligations,
also hold and be deemed to have held such Lien for the benefit of the First
Lien Collateral Agent as security for the First Lien Obligations or (y) release
such Lien.


 


Section 2.06           Similar Liens and Agreements.  The parties hereto agree that it is their
intention that the First Lien Collateral and the Second Lien Collateral be
identical.  In furtherance of the
foregoing and of Section 8.09, 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 Liens on the First Lien Collateral and the Second Lien
Collateral and guarantees for the First Lien Obligations and the Second Lien
Obligations shall be in all material respects the same forms of documents other
than with respect to the senior and subordinate nature of the security
interests in the Collateral securing the respective First Lien Obligations and
Second Lien Obligations thereunder.


 


In addition, to the extent
any guaranty is entered into by any Grantor in respect of the Second Lien
Obligations (whether or not the First Lien Collateral Agent or First Lien
Claimholders have consented thereto), a guaranty by such Person shall be
entered into in respect of the First Lien Obligations, and for all purposes
hereunder such Person shall be deemed a guarantor of the First Lien Obligations
and the Second Lien Obligations. 
Furthermore, to the extent any guaranty is entered into by any Grantor
in respect of the First Lien Obligations (whether or not the Second Lien Agent
or the Second Lien Claimholders have consented thereto), a guaranty by such
Person shall be entered into in respect of the Second Lien Obligations and, for
all purposes hereunder, such Person shall be deemed a guarantor of the Second
Lien Obligations and the First Lien Obligations.


 


14

















 


ARTICLE III


 


ENFORCEMENT


 


Section 3.01           Exercise of Remedies.


 


(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 any Borrower or any other Grantor:


 


(i)            the Second Lien Collateral Agent and the Second Lien
Claimholders:


 


(A)          from the date hereof until the occurrence of the
Second Lien Enforcement Date (such period, the “Standstill Period”), will not
exercise or seek to exercise any rights or remedies (including any right of
set-off or recoupment) with respect to any Collateral (including, without
limitation, the exercise of any right under any lockbox agreement, account
control or collection agreement, landlord waiver or bailee’s letter or similar
agreement or arrangement to which the Second Lien Collateral Agent or any
Second Lien Claimholder is a party) or institute or commence (or join with any
other Person in commencing) any enforcement, collection, execution, levy or
foreclosure action or proceeding (including, without limitation, any Insolvency
or Liquidation Proceeding) with respect to any Lien held by it under the Second
Lien Collateral Documents or any other Second Lien Loan Document or otherwise;


 


(B)           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, but not
limited to, any motion by the First lien Collateral agent to sell the
Collateral pursuant to Section 363 of the Bankruptcy Code, provided
that the respective interests of the Second Lien Claimholders attach to the
proceeds thereof, subject to the relative priorities described in Article II;
provided, however, that this Section 3.01(B) shall
constitute consent by the Second Lien Collateral Agent and the Second Lien
Claimholders pursuant to Section 363(f) of the Bankruptcy Code to the
Section 363 sale of any or all of the Collateral; and


 


(C)           subject to the rights of the Second Lien Collateral
Agent under clause (i)(A) above, 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; and


 


(ii)           subject to Section 5.01, until the
Discharge of the First Lien Obligations, the First Lien Collateral Agent and
the First Lien Claimholders shall have the exclusive right to enforce rights,
exercise remedies (including set-off and the right to credit bid their debt)
and make determinations regarding the release, disposition, or restrictions with
respect to the Collateral without any consultation 


 


15

















 


with or the consent of the Second Lien Collateral Agent or any Second
Lien Claimholder; provided, that


 


(A)          in any Insolvency or Liquidation Proceeding
commenced by or against any Borrower or any other Grantor, the Second Lien
Collateral Agent may file a claim or statement of interest with respect to the
Second Lien Obligations;


 


(B)           the Second Lien Collateral Agent may take any action
(not adverse to the Liens on the Collateral securing the First Lien
Obligations, or the rights of any First Lien Collateral Agent or the First Lien
Claimholders to exercise remedies in respect thereof) in order to preserve or
protect its Lien on the Collateral;


 


(C)           the Second Lien Claimholders shall be entitled to
file any responsive or defensive pleadings in opposition to any motion, claim,
adversary proceeding or other pleading made by any person objecting to or
otherwise seeking the disallowance of the claims of the Second Lien
Claimholders, including, without limitation, any claims secured by the
Collateral, if any, in each case in accordance with the terms of this
Agreement;


 


(D)          the Second Lien Claimholders shall be entitled to
file any pleadings, objections, motions or agreements which assert rights or
interests available to unsecured creditors of the Grantors arising under either
the Debtor Relief Law or applicable non-bankruptcy law;


 


(E)           the Second Lien Claimholders shall be entitled to
file any proof of claim and other filings and make any arguments and motions
that are, in each case, in accordance with the terms of this Agreement, with
respect to the Second Lien Obligations and the Collateral;


 


(F)           the Second Lien Claimholders shall be entitled, in
any Insolvency or Liquidation Proceeding, to vote on any plan of
reorganization, to the extent  consistent
with the provisions hereof; and


 


(G)           the Second Lien Collateral Agent or any Second Lien
Claimholder may exercise any of its rights or remedies with respect to the
Collateral upon the occurrence and during the effective continuation of the
Second Lien Enforcement Date.


 


In 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 advisable in the exercise of their sole discretion.  Such exercise and enforcement shall include
the rights of an agent appointed by the First Lien Collateral Agent and the
First Lien Claimholders to sell or otherwise dispose of Collateral upon
foreclosure, to incur expenses in connection with such sale or disposition, 


 


16

















 


and to exercise all the rights and remedies
of a secured creditor under the UCC of any applicable jurisdiction and of a
secured creditor under Debtor Relief Laws of any applicable jurisdiction.


 


(b)           The Second Lien Collateral Agent (on behalf of
itself and the Second Lien Claimholders) 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 or recoupment) with respect
to any Collateral, and that any Collateral or proceeds taken or received by it
will be paid over to the First Lien Collateral Agent pursuant to Section 4.02,
unless and until the Discharge of First Lien Obligations has occurred, except
as expressly provided in the proviso in Section 3.01(a)(ii) and
Section 6.07.  Without
limiting the generality of the foregoing, unless and until the Discharge of
First Lien Obligations has occurred, except as expressly provided in the
proviso in Section 3.01(a)(ii), the sole right of the Second Lien
Collateral Agent and the Second Lien Claimholders with respect to the
Collateral is to hold a Lien on the Collateral pursuant to the Second Lien
Collateral Documents for the period and to the extent granted therein and to
receive a share of the proceeds thereof, if any, after the Discharge of the
First Lien Obligations has occurred in accordance with the terms of the Second
Lien Loan Documents and applicable Law.


 


(c)           Subject to the proviso in Section 3.01(a)(ii) and
Section 6.01, (i) the Second Lien Collateral Agent (on behalf
of itself and the Second Lien Claimholders) agrees that the Second Lien
Collateral Agent and the Second Lien Claimholders will not take any action that
would hinder, delay or impede any exercise of remedies under the First Lien
Loan Documents, including any sale, lease, exchange, transfer or other
disposition of the Collateral, whether by foreclosure or otherwise, and (ii) the
Second Lien Collateral Agent (on behalf of itself and the Second Lien
Claimholders) hereby waives any and all rights it or the Second Lien
Claimholders may have as a junior lien creditor or otherwise to object to the
manner or order in which the First Lien Collateral Agent or the First Lien
Claimholders seek to enforce or collect the First Lien Obligations or the Liens
granted in any of the First Lien Collateral.


 


(d)           The Second Lien Collateral Agent hereby acknowledges
and agrees that no covenant, agreement or restriction contained in the Second
Lien Collateral Documents or any other Second Lien Loan Document shall be
deemed to restrict in any way the rights and remedies of the First Lien
Collateral Agent or the First Lien Claimholders with respect to the Collateral
as set forth in this Agreement and the First Lien Loan Documents.


 


Section 3.02           Actions Upon Breach.


 


(a)           If any Second Lien Claimholder, contrary to this
Agreement, commences or participates in any action or proceeding against any
Borrower, any other Grantor or the Collateral, such Borrower or such Grantor,
with the prior written consent of the First Lien Collateral Agent, may
interpose as a defense or dilatory plea the making of this Agreement, and the
First Lien Collateral Agent may intervene and interpose such defense 


 


17

















 


or plea in its name, in the name of the First Lien Claimholders or in
the name of such Borrower or such Grantor.


 


(b)           Should any Second Lien Claimholder, contrary to this
Agreement, in any way take, or attempt or threaten to take, any action with
respect to the Collateral (including, without limitation, any attempt to
realize upon or enforce any remedy with respect to this Agreement), or fail to
take any action required by this Agreement, the First Lien Collateral Agent (in
its own name or in the name of any Borrower) or any Borrower may obtain relief
against such Second Lien Claimholder by injunction, specific performance and/or
other appropriate equitable relief, it being understood and agreed by the
Second Lien Collateral Agent on behalf of each Second Lien Claimholder that (i) the
First Lien Claimholders’ damages from such actions may be difficult to
ascertain and may be irreparable, and (ii) the Second Lien Collateral
Agent on behalf of each Second Lien Claimholder waives any defense that any
Borrower, any other Grantor and/or the First Lien Claimholders cannot
demonstrate damage or be made whole by the awarding of damages.


 


ARTICLE IV


 


PAYMENTS


 


Section 4.01           Application of Proceeds.  So long as the Discharge of First Lien
Obligations has not occurred, any proceeds of Collateral received in connection
with the sale or other disposition of such Collateral, or collection on such
Collateral upon the exercise of remedies, shall be applied by the First Lien
Collateral Agent to the First Lien Obligations in such order as specified in
the relevant First Lien Loan Documents. 
Upon the Discharge of the First Lien Obligations, the First Lien
Collateral Agent shall deliver to the Second Lien Collateral Agent any proceeds
of Collateral held by it in the same form as received, with any necessary
endorsements or as a court of competent jurisdiction may otherwise direct to be
applied by the Second Lien Collateral Agent to the Second Lien Obligations in
such order as specified in the relevant Second Lien Loan Documents.


 


Section 4.02           Payments Over.  So long as the Discharge of First Lien
Obligations has not occurred, any Collateral or proceeds thereof (together with
assets or proceeds subject to Liens referred to in the final sentence of Section 2.05(b))
received by the Second Lien Collateral Agent or any Second Lien Claimholders in
connection with the exercise of any right or remedy (including set-off) in
respect of the Collateral 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 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 such Second Lien Claimholders.  This authorization is coupled with an
interest and is irrevocable until such time as this Agreement is terminated in
accordance with its terms.


 


18














 


ARTICLE V


 


OTHER AGREEMENTS


 


Section 5.01           Releases.


 


(a)           If, in connection with:


 


(i)            the exercise of any
First Lien Collateral Agent’s remedies in respect of the Collateral, including
any sale, lease, exchange, transfer or other disposition of any such Collateral
(an “Exercise of Remedies”); or


 


(ii)           any sale, lease,
exchange, transfer or other disposition of any Collateral permitted under the
terms of the First Lien Loan Documents (whether or not an event of default
thereunder, and as defined therein, has occurred and is continuing) (a “Disposition”);
or


 


(iii)          any release of Liens on
the assets of any Grantor, all of the Equity Interests of which is being
released pursuant to any other provision of this Section 5.01(a);


 


the First Lien Collateral Agent
(on behalf of itself or any of the First Lien Claimholders) releases any of its
Liens on any part of the Collateral, or releases any Grantor from its
obligations under its guaranty of the First Lien Obligations, in each case
other than in connection with the Discharge of the First Lien Obligations, 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, and the
obligations of such Grantor under its guaranty of the Second Lien Obligations,
shall be automatically, unconditionally and simultaneously released (the “Second
Lien Release”) and the Second Lien Collateral Agent (on behalf of itself or
any such 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 such release.


 


(b)           Until the Discharge of
First Lien Obligations occurs, the Second Lien Collateral Agent (on behalf of
itself and the Second Lien Claimholders) hereby irrevocably constitutes and
appoints the First Lien Collateral Agent and any officer or agent of the First
Lien Collateral Agent, 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 the Second Lien Collateral Agent or such holder 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 5.01,
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 5.01,
including any endorsements or other instruments of transfer or release.  This authorization is coupled with an
interest and is irrevocable until such time as this Agreement is terminated in
accordance with its terms.


 


(c)           Until the Discharge of
First Lien Obligations occurs, to the extent that the First Lien Collateral
Agent (on behalf of itself and the First Lien Claimholders) (i) has
released any Lien on Collateral or any Grantor from its obligation under its
guaranty and any such Liens or guaranty are later reinstated or (ii) obtains
any new Liens or additional 


 


19

















 


guaranties from Grantors, then the Second
Lien Collateral Agent (on behalf of itself and the Second Lien Claimholders)
shall be granted a Lien on any such Collateral and an additional guaranty, as
the case may be, subject to the priorities set forth in Article II.


 


Section 5.02           Insurance.  The First Lien Collateral Agent and the
Second Lien Collateral Agent shall be named as additional insureds and the
Control Agent shall be named as loss payee (on behalf of the First Lien
Collateral Agent, the First Lien Claimholders, the Second Lien Collateral Agent
and the Second Lien Claimholders) under any insurance policies maintained from
time to time by any Grantor.  Until the
date upon which the Discharge of First Lien Obligations shall have occurred, as
between 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, the First Lien Collateral Agent and the First Lien Claimholders
shall have the sole and exclusive right (a) to adjust or settle any insurance
policy or claim covering any Collateral in the event of any loss thereunder and
(b) to approve any award granted in any condemnation or similar proceeding
affecting any Collateral.  Until the date
upon which the Discharge of First Lien Obligations shall have occurred, all
proceeds of any such policy and any such award in respect of any Collateral
that are payable to the First Lien Collateral Agent and the Second Lien
Collateral Agent shall be paid to the First Lien Collateral Agent for the
benefit of the First Lien Claimholders to the extent required under the First
Lien Loan Documents and thereafter to the Second Lien Collateral Agent for the
benefit of the Second Lien Claimholders to the extent required under the
applicable Second Lien Loan Documents and then to the owner of the subject
property or as a court of competent jurisdiction may otherwise direct.  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 in contravention of this Agreement, it shall
pay such proceeds over to the First Lien Collateral Agent in accordance with
the terms of Section 4.02.


 


Section 5.03           Amendments to First
Lien Loan Documents and Second Lien Loan Documents.


 


(a)           The
First Lien Loan Documents may be amended, supplemented or otherwise modified in
accordance with their terms and the First Lien Credit Agreement may be
Refinanced, in each case without the consent of the Second Lien Collateral
Agent or the Second Lien Claimholders; provided, however, that the
holders of such Refinancing debt shall bind themselves in writing to the terms
of this Agreement and any such amendment, supplement, modification or
Refinancing shall not (i) provide for a principal amount of, without
duplication, term loans, revolving loan commitments and letter of credit
facilities (but excluding hedging and cash management obligations) in excess of
the Maximum First Lien Indebtedness, (ii) increase the “Applicable Rate” or
similar component of the interest rate or yield provisions applicable to the
First Lien Obligations by more than 2.0% (excluding increases (A) resulting
from application of the pricing grid set forth in the First Lien Credit
Agreement as in effect on the date hereof or (B) resulting from the
accrual of interest at the Default Rate (as such term is defined in the First
Lien Credit Agreement as in effect on the date hereof)), (iii) extend the
scheduled maturity date of the First Lien Obligations or any Refinancing
thereof beyond the scheduled maturity date of the Second Lien Credit Agreement
or any Refinancing thereof or (iv) contravene the provisions of this
Agreement; provided, however that the 


 


20

















 


extension by the First Lien Collateral Agent and/or or the First Lien
Claimholders of any DIP Financing pursuant to Section 6.01 shall
not be deemed to contravene this Agreement in any way which would require the
consent of the Second Lien Collateral Agent or any Second Lien Claimholder.


 


(b)           Without
the prior written consent of the First Lien Collateral Agent, no Second Lien
Loan Document may be amended, supplemented or otherwise modified or entered
into; provided that the Second Lien Loan Documents may be amended in a manner
that (i) extends the date or reduces the amount of any required repayment,
prepayment or redemption of the principal of such Indebtedness under the Second
Lien Credit Agreement, (ii) reduces the rate or extends the date for
payment of the interest, premium (if any) or fees payable on the Second Lien
Obligations, (iii) makes the covenants, events of default or remedies
relating to Second Lien Obligations less restrictive on any Grantor, or (iv) increase
the “Applicable Rate” or similar component of the interest rate or yield
provisions applicable to the Second Lien Obligations by not more than 2.0%
(excluding increases resulting from the accrual of interest at the Default Rate
(as such term is defined in the Second Lien Credit Agreement as in effect on
the date hereof)).


 


(c)           Notwithstanding the
foregoing clause (a) and (b) of this Section 5.03, until
the date upon which the Discharge of First Lien Obligations shall have
occurred, without the prior written consent of the First Lien Collateral Agent,
no Second Lien Collateral Document may be amended, supplemented or otherwise
modified or entered into to the extent such amendment, supplement or
modification, or the terms of any new Second Lien Credit Agreement or Second
Lien Collateral Document, would contravene any of the terms of this
Agreement.  The Second Lien Collateral
Agent agrees that each Second Lien Collateral Document shall include the
following language or language substantially similar:


 


“Notwithstanding anything
contained herein to the contrary, the lien and security interest granted to the
Administrative Agent, for the benefit of the Lenders, pursuant to this
Agreement, and the exercise of any right or remedy by the Administrative Agent,
for the benefit of the Lenders, under this Agreement, are subject to the
provisions of the Intercreditor Agreement, dated as of August 8, 2007 as
the same may be amended, restated, supplemented, modified or replaced from time
to time (the “Intercreditor Agreement”) by and among Bank of America,
N.A., as First Lien Administrative Agent, Bank of America, N.A., as Second Lien
Administrative Agent, Bank of America, N.A., as Control Agent and the Grantors
(as defined therein) from time to time a party thereto.  In the event of any conflict between the
terms of the Intercreditor Agreement and this Agreement, the terms of the
Intercreditor Agreement shall govern and control.”


 


In addition, the Second Lien
Collateral Agent agrees that each Second Lien Collateral Document under which
any Lien on real property owned by any Grantor is granted to secure the Second
Lien Obligations covering any Collateral shall contain such other language as
the First Lien Collateral Agent may reasonably request to reflect the 


 


21

















 


priority of
the First Lien Collateral Document covering such Collateral over such Second
Lien Collateral Document.


 


(d)           Notwithstanding the
foregoing clauses (a) and (b) of this Section 5.03, until
the date upon which the Discharge of First Lien Obligations shall have
occurred, in the event the First Lien Collateral Agent or the First Lien
Claimholders enter into any amendment, waiver or consent in respect of any of
the First Lien Collateral Documents for the purpose of adding to, or deleting
from, or waiving or consenting to any departures from any provisions of any
First Lien Collateral Document or changing in any manner the rights of the
First Lien Collateral Agent, the First Lien Claimholders, or the Grantors
thereunder, then such amendment, waiver or consent shall automatically apply in
a comparable manner to any comparable provision of the Second Lien Collateral
Documents without the consent of the Second Lien Collateral Agent or the Second
Lien Claimholders and without any action by the Second Lien Collateral Agent or
any Grantor; provided, however, (i) that no such amendment, waiver or
consent shall be effective to (A) release any Lien of the Second Lien
Collateral Documents, (B) remove assets subject to the Lien of the Second
Lien Collateral Documents, (C) adversely affect the perfection or priority
of any such Lien, except, in each case, to the extent that a release of, or
adverse effect on the perfection or priority of, such Lien is permitted by Section 5.01
or Article VI, (D) reduce the principal of, or interest or
other amounts payable on, any amount payable under the Second Lien Credit
Agreement or any Second Lien Loan Document, (E) postpone any date fixed for any
payment of principal of, or interest or other amounts payable on, any amounts
payable under the Second Lien Credit Agreement or any Second Lien Loan
Document, (F) permit any Liens on the Collateral not permitted under the
Second Lien Loan Documents or Article VI, or (G) impose duties on the
Second Lien Collateral Agent, in each case without the consent of the Second
Lien Collateral Agent and (ii) notice of such amendment, waiver or consent
shall have been given to the Second Lien Collateral Agent no later than 10 days
after its effectiveness (provided that the failure to give such notice shall
not affect the effectiveness or validity thereof) provided further that this
paragraph is intended solely to set forth provisions by which the Second Lien
Collateral Documents shall be automatically affected by amendments, waivers and
consents given by the First Lien Collateral Agent and First Lien Claimholders
under the First Lien Credit Agreement and the First Lien Collateral Documents
and is not intended to impose any liability on the First Lien Collateral Agent
or First Lien Claimholders.


 


Section 5.04           Rights As Unsecured
Creditors.  The Second Lien
Collateral Agent and the Second Lien Claimholders may exercise rights and
remedies as unsecured creditors against any Grantor in accordance with the
terms of the Second Lien Loan Documents and applicable law.  Except as otherwise set forth in Section 2.01,
nothing in this Agreement shall prohibit the receipt by the Second Lien
Collateral Agent or any Second Lien Claimholders of the required payments of
interest and principal 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
Claimholders of rights or remedies as a secured creditor (including set-off or
recoupment) or enforcement of any Lien held by any of them.  Nothing in this Agreement impairs or
otherwise adversely affects any rights or remedies the First Lien Collateral
Agent or the First Lien Claimholders may have with respect to the Collateral,
including, without limitation, rights under Section 4.02.  In the event 


 


22

















 


that any Second Lien Claimholder becomes a judgment Lien creditor as a
result of its enforcement of its rights as an unsecured creditor, such judgment
Lien shall be subject to the terms of this Agreement for all purposes
(including in relation to the Liens securing the First Lien Obligations) to the
same extent as all other Liens securing the Second Lien Obligations (created
pursuant to the Second Lien Collateral Documents) subject to this Agreement.


 


Section 5.05           Control Agent for
Perfection.


 


(a)           The First Lien
Collateral Agent (on behalf of itself and the First Lien Claimholders) and the
Second Lien Collateral Agent (on behalf of itself and the Second Lien
Claimholders) each hereby appoint Bank of America, N.A., as its collateral
agent (in such capacity, together with any successor in such capacity appointed
by the First Lien Collateral Agent and the Second Lien Collateral Agent, the “Control
Agent”) for the limited purpose of acting as the agent on behalf of the
First Lien Collateral Agent (on behalf of itself and the First Lien
Claimholders) and the Second Lien Collateral Agent (on behalf of itself and the
Second Lien Claimholders) with respect to the Control Collateral for purposes
perfecting the Liens of such parties on the Control Collateral.  The Control Agent accepts such appointment
and agrees to hold the Control Collateral in its possession or control (or in
the possession or control of its agents or bailees) as Control Agent for the
benefit of the First Lien Collateral Agent (on behalf of itself and the First
Lien Claimholders) and the Second Lien Collateral Agent (on behalf of itself
and the Second Lien Claimholders) and any permitted assignee of any thereof
solely for the purpose of perfecting the security interest granted to such
parties in such Control Collateral, subject to the terms and conditions of this
Section 5.05.  The First Lien
Collateral Agent and the Second Lien Collateral Agent hereby acknowledge that
the Control Agent will obtain “control” under the UCC over each Controlled
Account as contemplated by the First Lien Collateral Documents and the Second
Lien Collateral Documents for the benefit of both the First Lien Collateral
Agent (on behalf of itself and the First Lien Claimholders) and the Second Lien
Collateral Agent (on behalf of itself and the Second Lien Claimholders)
pursuant to the control agreements relating to each respective Controlled
Account.


 


(b)           The Control Agent, the
First Lien Collateral Agent (on behalf of itself and the First Lien
Claimholders), and the Second Lien Collateral Agent (on behalf of itself and
the Second Lien Claimholders) each hereby agrees that the First Lien Collateral
Agent shall have the sole and exclusive right and authority to give
instructions to, and otherwise direct, the Control Agent in respect of the
Control Collateral or any control agreement with respect to any Control
Collateral until the earlier of (i) the date upon which the Discharge of
First Lien Obligations shall have occurred and (ii) the Second Lien
Enforcement Date, and neither the Second Lien Collateral Agent nor any Second
Lien Claimholder will impede, hinder, delay or interfere with the exercise of
such rights by the First Lien Collateral Agent in any respect.  The Grantors hereby jointly and severally
agree to pay, reimburse, indemnify and hold harmless the Control Agent to the
same extent and on the same terms that the Grantors are required to do so for
the First Lien Collateral Agent in accordance with the First Lien Credit
Agreement.  The First Lien Claimholders
and the Second Lien Claimholders hereby jointly and severally agree to pay,
reimburse, indemnify and hold harmless the Control Agent to the same extent and



 


23

















 


on the same terms that the First Lien
Claimholders are required to do so for the First Lien Collateral Agent in
accordance with the First Lien Credit Agreement and the Second Lien
Claimholders are required to do so for the Second Lien Collateral Agent in
accordance with the Second Lien Credit Agreement.


 


(c)           The provisions of Article IX
of the First Lien Credit Agreement and Article IX of the Second
Lien Credit Agreement shall inure to the benefit of the Control Agent in
respect of this Agreement, the First Lien Collateral Documents and the Second
Lien Collateral Documents and shall be binding upon all Grantors, all First
Lien Claimholders and all Second Lien Claimholders and upon the parties hereto
in such respect.  In furtherance and not
in derogation of the rights, privileges and immunities of the Control Agent
therein set forth:


 


(i)            The Control Agent is
authorized to take all such actions as are provided to be taken by it as
Control Agent hereunder, under any First Lien Collateral Document, under any
Second Lien Collateral Document or as instructed by the First Lien Collateral
Agent or the Second Lien Collateral Agent as provided herein, in each case
together with all other actions reasonably incidental thereto.  As to any matters not expressly provided for
herein (including, without limitation, the timing and methods of realization
upon the Collateral) or in one or more of the First Lien Collateral Documents or
Second Lien Collateral Documents, the Control Agent shall act or refrain from
acting in accordance with written instructions from the First Lien Collateral
Agent or the Second Lien Collateral Agent, as applicable, or, in the absence of
such instructions or provisions, in accordance with its reasonable discretion.


 


(ii)           The Control Agent shall
not be responsible for the existence, genuineness or value of any of the
Collateral or for the validity, perfection, priority or enforceability of any
Lien created under and First Lien Collateral Document or Second Lien Collateral
Document in any of the Collateral, whether impaired by operation of law or by
reason of any action or omission to act on its part hereunder unless such
action or omission constitutes gross negligence or willful misconduct.  The Control Agent shall not have a duty to
ascertain or inquire as to the performance or observance of any of the terms of
this Agreement, any First Lien Collateral Document or any Second Lien
Collateral Document by any Grantor.  This
Agreement shall not subject the Control Agent to any obligation or liability
except as expressly set forth herein.  In
particular, the Control Agent shall have no duty to investigate whether the
obligations of any Grantor to the First Lien Collateral Agent or the Second
Lien Collateral Agent or any other First Lien Claimholder or Second Lien
Claimholder are in default or whether the First Lien Collateral Agent or the
Second Lien Collateral Agent is entitled under the First Lien Collateral Documents
or the Second Lien Collateral Documents, as applicable, or otherwise to give
any instructions or notice of exclusive control.  The Control Agent is fully entitled to rely
upon such instructions as it believes in good faith to have originated from the
First Lien Collateral Agent or the Second Lien Collateral Agent, as applicable.


 


24

















 


(d)           Except as set forth
below, the Control Agent shall have no obligation whatsoever to the First Lien
Collateral Agent, the Second Lien Collateral Agent or any First Lien
Claimholder or any Second Lien Claimholder including, without limitation, any
obligation to assure that the Control Collateral is genuine or owned by any
Grantor or one of their respective Subsidiaries or to preserve rights or
benefits of any Person except as expressly set forth in this Section 5.05.  In acting on behalf of the Second Lien
Collateral Agent and the Second Lien Claimholders and the First Lien Collateral
Agent and the First Lien Claimholders, the duties or responsibilities of the
Control Agent under this Section 5.05 shall be limited solely (i) to
physically holding the Control Collateral delivered to the Control Agent by any
Grantor as agent for the First Lien Collateral Agent (on behalf of itself and
the First Lien Claimholders) and the Second Lien Collateral Agent (on behalf of
itself and the Second Lien Claimholders) for purposes of perfecting the Lien
held by the First Lien Collateral Agent and the Second Lien Collateral Agent, (ii) obtaining
“control” under the UCC over each Controlled Account as contemplated by the
First Lien Collateral Documents and the Second Lien Collateral Documents in
accordance with Section 5.05(a), and (iii) delivering such
collateral as set forth in Section 5.05(f) and 5.05(g).
The rights of the Second Lien Collateral Agent shall at all times be subject to
the terms of this Agreement and to the First Lien Collateral Agent’s rights
under the First Lien Loan Documents.


 


(e)           Neither the Control
Agent nor the First Lien Collateral Agent shall have by reason of the Second
Lien Loan Documents or this Agreement or any other document a fiduciary
relationship in respect of the Second Lien Collateral Agent or any Second Lien
Claimholder.


 


(f)            Upon the Discharge of
First Lien Obligations (other than in connection with a Refinancing of the
First Lien Obligations), the Control Agent shall deliver to the Second Lien
Collateral Agent the Control Collateral together with any necessary
endorsements (or otherwise allow the Second Lien Collateral Agent to obtain
control of such Control Collateral) or as a court of competent jurisdiction may
otherwise direct and the Second Lien Collateral Agent shall accept and succeed
to the role of the Control Agent as the agent for perfection on the Control
Collateral.


 


(g)           The Control Agent shall
have an unfettered right to resign as Control Agent upon thirty (30) days
notice to the First Lien Collateral Agent and the Second Lien Collateral
Agent.  Upon the effective date of such
resignation, the Control Agent shall deliver the Control Collateral to the
successor Control Agent.  If upon the
effective date of such resignation no successor Control Agent has been
appointed by the First Lien Collateral Agent and the Second Lien Collateral
Agent, the Control Agent shall deliver to the First Lien Collateral Agent the
Control Collateral together with any necessary endorsements (or otherwise allow
the First Lien Collateral Agent to obtain control of such Control Collateral)
or as a court of competent jurisdiction may otherwise direct and the First Lien
Collateral Agent shall accept and succeed to the role of the Control Agent as
the agent for perfection on the Control Collateral.


 


Section 5.06           When Discharge of
First Lien Obligations Deemed to Not Have Occurred.  If at any time after the Discharge of First
Lien Obligations has occurred, the 


 


25

















 


Borrowers (or either Borrower) thereafter enter into any Refinancing of
any First Lien Loan Document evidencing a First Lien Obligation which
Refinancing is permitted hereby and by the terms of the Second Lien Loan
Documents, then such Discharge of First Lien Obligations shall automatically be
deemed not to have occurred for all purposes of this Agreement (other than with
respect to any actions taken prior to the date of such designation as a result
of the occurrence of such first Discharge of First Lien Obligations), and the
obligations under such Refinancing First Lien Loan Document shall automatically
be treated as First Lien Obligations for all purposes of this Agreement,
including for purposes of the Lien priorities and rights in respect of
Collateral set forth herein, and the First Lien Collateral Agent under such
First Lien Loan Documents shall be a First Lien Collateral Agent for all
purposes of this Agreement.  Upon receipt
of a notice stating that the Borrowers have (or either Borrower has) entered
into a new First Lien Loan Document (which notice shall include the identity of
the new collateral agent, such agent, the “New Agent”), the Second Lien
Collateral Agent shall promptly (a) enter into such documents and
agreements (including amendments or supplements to this Agreement) as the
Borrowers or such New Agent shall reasonably request in order to provide to the
New Agent the rights contemplated hereby, in each case consistent in all
material respects with the terms of this Agreement and (b) deliver to the
New Agent any Control Collateral held by it together with  any necessary endorsements (other otherwise
allow the New Agent to obtain control of the Control Collateral).  If the new First Lien Obligations under the
new First Lien Loan Documents are secured by assets of the Grantors of the type
constituting Collateral that do not also secure the Second Lien Obligations, then
the Second Lien Obligations shall be secured at such time by a Lien on such
assets to the same extent provided in the Second Lien Collateral Documents.


 


Section 5.07           Purchase Right.  Without prejudice to the enforcement of the
First Lien Claimholders’ remedies, the First Lien Claimholders agree that at
any time during the sixty (60) day period following (a) acceleration of
the First Lien Obligations in accordance with the terms of the First Lien
Credit Agreement or (b) the commencement of an Insolvency or Liquidation
Proceeding (each, a “Purchase Event”), one or more of the Second Lien
Claimholders may request, and the First Lien Claimholders hereby offer the
Second Lien Claimholders the option, to purchase all, but not less than all, of
the aggregate amount of outstanding First Lien Obligations outstanding at the
time of purchase at par (including any applicable premium), without warranty or
representation or recourse (except for representations and warranties required
to be made by assigning lenders pursuant to the Assignment and Assumption (as
such term is defined in the Initial First Lien Credit Agreement)).  If such right is exercised within the
aforementioned sixty (60) day period, the parties shall endeavor to close
promptly thereafter but in any event within ten (10) Business Days of the
request.  If one or more of the Second
Lien Claimholders exercise such purchase right, it shall be exercised pursuant
to documentation mutually acceptable to each of the First Lien Collateral Agent
and the Second Lien Collateral Agent.  If
none of the Second Lien Claimholders exercise such right, the First Lien
Claimholders shall have no further obligations pursuant to this Section 5.07
for such Purchase Event and may take any further actions in their sole
discretion in accordance with the First Lien Loan Documents and this Agreement.


 


26

















 


ARTICLE VI


 


INSOLVENCY OR LIQUIDATION PROCEEDINGS


 


Section 6.01           Finance and Sale
Issues.  Until the Discharge of First
Lien Obligations has occurred, if any 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 on which the
First Lien Collateral Agent or any other creditor has a Lien or to permit any
Borrower or any other Grantor to obtain financing, whether from the First Lien
Claimholders or any other entity under Section 363 or Section 364 of
the Bankruptcy Code or any similar Debtor Relief Law, which financing may
include a Refinancing of the First Lien Obligations (each, a “DIP Financing”)
in an aggregate outstanding principal amount, when combined with the
outstanding amount of all First Lien Obligations, not to exceed the Maximum
First Lien Indebtedness, then the Second Lien Collateral Agent (on behalf of
itself and the Second Lien Claimholders) agrees that (a) it will not (i) raise
any objection to, or otherwise contest or interfere with, such use of cash
collateral or DIP Financing, (ii) support any other Person objecting to,
such sale, use, or lease of cash collateral or DIP Financing or (iii) request
any form of adequate protection or any other relief in connection therewith
(except as agreed by the First Lien Collateral Agent or to the extent expressly
permitted by Section 6.03) and, to the extent the Liens securing
the First Lien Obligations are subordinated to or pari passu with such
DIP Financing, the Second Lien Collateral Agent will subordinate its Liens in
the Collateral to (A) the Liens securing such DIP Financing (and all
obligations relating thereto), (B) any adequate protection provided to the
First Lien Claimholders and (C) any “carve-out” for professional and
United States Trustee fees, claims of reclamation creditors or holders of
claims under Section 503(b) of the Bankruptcy Code agreed to by the
First Lien Collateral Agent; and (b) notice received two (2) calendar
days prior to the entry of an order approving such usage of cash collateral or
approving such DIP Financing shall be adequate notice; provided that the
foregoing shall not prohibit the Second Lien Collateral Agent or the Second
Lien Claimholders from objecting solely to any provisions in any DIP Financing
relating to, describing or requiring any provision or content of a plan of
reorganization other than provisions solely requiring that the DIP Financing be
paid in full in cash.  The Second Lien
Collateral Agent (on behalf of itself and the Second Lien Claimholders) agrees
that it will raise no objection to or oppose a sale or other disposition of any
Collateral (and any post-petition assets subject to adequate protection liens
in favor of  the First Lien Collateral
Agent) free and clear of its Liens or other claims under Section 363 of
the Bankruptcy Code if the Requisite Lenders under the First Lien Credit
Agreement have consented to such sale or disposition of such assets so long as
the respective interests of the Second Lien Claimholders attach to the proceeds
thereof, subject to the terms of this Agreement.  If requested by the First Lien Collateral
Agent in connection therewith, the Second Lien Collateral Agent shall
affirmatively consent to such a sale or disposition.


 


Section 6.02           Relief from the
Automatic Stay.  Until the Discharge
of First Lien Obligations has occurred, the Second Lien Collateral Agent (on
behalf of itself and the Second Lien Claimholders) agrees that none of them
shall (a) seek relief from the automatic stay or any other stay in any
Insolvency or Liquidation Proceeding in respect of the Collateral, without the
prior written consent of the First Lien Collateral Agent and Requisite Lenders
under the First Lien Collateral Agreement, or (b) oppose any request by
the First Lien Collateral Agent or any 


 


27

















 


First Lien Claimholder to seek relief from the automatic stay or any
other stay in any Insolvency or Liquidation Proceeding in respect of the
Collateral.


 


Section 6.03           Adequate Protection.


 


(a)           The Second Lien
Collateral Agent (on behalf of itself and the Second Lien Claimholders) agrees
that none of them shall contest (or support any other person contesting) (i) any
request by the First Lien Collateral Agent or the First Lien Claimholders for
adequate protection or (ii) any objection by the First Lien Collateral
Agent or the First Lien Claimholders to any motion, relief, action or
proceeding based on the First Lien Collateral Agent or the First Lien
Claimholders claiming a lack of adequate protection.  In any Insolvency or Liquidation Proceeding,
the Second Lien Collateral Agent (on behalf of itself and the Second Lien
Claimholders) may seek adequate protection in respect of the Second Lien
Obligations, subject to the provisions of this Agreement, only if (x) the
First Lien Claimholders (or any subset thereof) are granted adequate protection
in the form of additional collateral including replacement liens on
post-petition collateral, and (y) such additional protection is in the
form of a Lien on such additional collateral, which Lien, if granted, will be
subordinated to the adequate protection Liens securing the First Lien
Obligations and the Liens securing any 
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 Liens securing the First Lien Obligations under this Agreement and the
Liens securing any such DIP Financing. 
In the event the Second Lien Collateral Agent (on behalf of itself or
any of the Second Lien Claimholders) seeks or requests adequate protection in
respect of Second Lien Obligations and such adequate protection is granted in
the form of additional collateral, then the Second Lien Collateral Agent (on
behalf of itself and the Second Lien Claimholders) agrees that the First Lien
Collateral Agent  shall also be granted a
Lien on such additional collateral as security for the First Lien Obligations
and for any DIP Financing and that any Lien on such additional collateral
securing the Second Lien Obligations shall be subordinated to the Liens on such
collateral securing the First Lien Obligations and any DIP Financing (and all
obligations relating thereto) and to any other Liens granted to the First Lien
Claimholders as adequate protection on the same basis as the other Liens
securing the Second Lien Obligations are so subordinated to the Liens securing
the First Lien Obligations under this Agreement and the Liens securing DIP
Financing.


 


(b)           Similarly, if the First
Lien Claimholders (or any subset thereof) are granted adequate protection in
the form of a superpriority claim, then the Second Lien Collateral Agent (on
behalf of itself or any of the Second Lien Claimholders) may seek or request a
superpriority claim, which superpriority claim will be junior in all respects
to the superpriority claim granted to the First Lien Collateral Agent and the
First Lien Claimholders, and, in the event that the Second Lien Collateral
Agent (on behalf of itself or any of the Second Lien Claimholders) seeks or
requests adequate protection in respect of Second Lien Obligations and such
adequate protection is granted in the form of a superpriority claim, then the
Second Lien Collateral Agent (on behalf of itself and the Second Lien
Claimholders) agrees that the First Lien Collateral Agent and the providers of
any DIP Financing also shall be granted a superpriority claim, which
superpriority 


 


28

















 


claim will be senior in all respects to the
superpriority claim granted to the Second Lien Collateral Agent and the Second
Lien Claimholders.


 


Section 6.04           No Waiver.  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 of the Second Lien
Claimholders, including the seeking by the Second Lien Collateral Agent or any
Second Lien Claimholders of adequate protection or the asserting by the Second
Lien Collateral Agent or any Second Lien Claimholders of any of its rights and
remedies under the Second Lien Loan Documents or otherwise; provided, however,
that this Section 6.04 shall not limit the rights of the Second
Lien Claimholders under the proviso in Section 3.01(a)(ii) or
under Section 6.03 or Section 6.08.


 


Section 6.05           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 any Borrower or any other Grantor any amount in
respect of a First Lien Obligation (a “Recovery”), then such First Lien
Claimholders shall be entitled to a reinstatement of First Lien Obligations
with respect to all such recovered amounts. 
If this Agreement shall have been terminated prior to such Recovery, this
Agreement shall be reinstated in full force and effect, and such prior
termination shall not diminish, release, discharge, impair or otherwise affect
the obligations of the parties hereto from such date of reinstatement.   Collateral or proceeds thereof received by
the Second Lien Collateral Agent or any Second Lien Claimholder after a
Discharge of First Lien Obligations and prior to the reinstatement of such
First Lien Obligations shall be delivered to the First Lien Collateral Agent
upon such reinstatement in accordance with Section 4.02.


 


Section 6.06           Separate Grants of
Security and Separate Classification. 
Each of the Grantors, the First Lien Claimholders and the Second Lien
Claimholders 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 Second Lien Claimholders in respect of the Collateral
constitute only one secured claim (rather than separate classes of senior and
junior secured claims), then the First Lien Claimholders shall be entitled to
receive, in addition to amounts distributed to them from, or in respect of, the
Collateral 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, fees,
costs, premium  and other charges, irrespective
of whether a claim for such amounts is allowed or allowable in such Insolvency
or Liquidation Proceeding, before any distribution from, or in respect of, any
Collateral is made in respect of the claims held by the Second Lien
Claimholders, with the Second Lien Claimholders hereby acknowledging and
agreeing to turn over to the First Lien Claimholders amounts otherwise received
or receivable by them to the extent necessary to effectuate the intent of this
sentence, even if such turnover has the effect of reducing the claim or
recovery of the Second Lien Claimholders.


 


29














 


Section 6.07           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 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 6.08           Post-Petition Claims.


 


(a)           Neither the Second Lien
Collateral Agent nor any other 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, fees, costs, charges or
expenses to the extent of the value of the First Lien Collateral Agent’s Lien
held for the benefit of the First Lien Claimholders, without regard to the existence
of the Lien of the Second Lien Collateral Agent on behalf of the Second Lien
Claimholders on the Collateral.


 


(b)           Neither the First Lien
Collateral Agent nor any other 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, fees, costs, charges or
expenses 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 First Lien Obligations).


 


Section 6.09           Waiver.  The Second Lien Collateral Agent (on behalf
of itself and the Second Lien Claimholders) waives any claim it or they may
hereafter have against the First Lien Collateral Agent or any First Lien
Claimholder arising out of the election of the First Lien Collateral Agent or
any First Lien Claimholder of the application of Section 1111(b)(2) of
the Bankruptcy Code, 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.


 


Section 6.10           Expense Claims.  Neither the Second Lien Collateral Agent nor
any Second Lien Claimholder will (a) contest the payment of fees, expenses
or other amounts to the First Lien Collateral Agent or any First Lien
Claimholder under Section 506(b) of the Bankruptcy Code or otherwise
to the extent provided for in the First Lien Credit Agreement or (b) assert
or enforce, at any time prior to the Discharge of First Lien Obligations, any
claim under Section 506(c) of the Bankruptcy Code senior to or on
parity with the First Lien Obligations for costs or expenses of preserving or
disposing of any Collateral.


 


Section 6.11           Other Matters.  To the extent that the Second Lien Collateral
Agent or any Second Lien Claimholder has or acquires rights under Section 361,
Section 363 or Section 364 of the Bankruptcy Code with respect to any
of the Collateral, the Second Lien Collateral Agent (on behalf of itself and
the Second Lien Claimholders) agrees not to assert any 


 


30

















 


of such rights without the prior written consent of the First Lien
Collateral Agent; provided that if requested by the First Lien
Collateral Agent, the Second Lien Collateral Agent shall timely exercise such
rights in the manner requested by the First Lien Collateral Agent, including
any rights to payments in respect of such rights.


 


Section 6.12           Effectiveness in
Insolvency or Liquidation Proceedings. 
This Agreement, which the parties hereto expressly acknowledge is a “subordination
agreement” under Section 510(a) of the Bankruptcy Code, shall be
effective before, during and after the commencement of an Insolvency or
Liquidation Proceeding.  All references
in this Agreement to any Grantor shall include such Person as a
debtor-in-possession and any receiver or trustee for such Person in any
Insolvency or Liquidation Proceeding.


 


ARTICLE VII


 


RELIANCE; WAIVERS; ETC.


 


Section 7.01           Non-Reliance.


 


(a)           The consent by the
First Lien Claimholders to the execution and delivery of the Second Lien Loan
Documents and the grant to the Second Lien Collateral Agent on behalf of the
Second Lien Claimholders of a Lien on the Collateral and all loans and other
extensions of credit made or deemed made on and after the date hereof by the
First Lien Claimholders to the Grantors shall be deemed to have been given and
made in reliance upon this Agreement. 
The Second Lien Collateral Agent (on behalf of itself and the Second
Lien Claimholders) acknowledges that it and the 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 the
Second Lien Credit Agreement, the other Second Lien Loan Documents, this
Agreement and the transactions contemplated hereby and thereby and they will
continue to make their own credit decision in taking or not taking any action
under the Second Lien Credit Agreement, the other Second Lien Loan Documents or
this Agreement.


 


(b)           The consent by the
Second Lien Claimholders to the execution and delivery of the First Lien Loan
Documents and the grant to the First Lien Collateral Agent on behalf of the
First Lien Claimholders of a Lien on the Collateral and all loans and other
extensions of credit made or deemed made on and after the date hereof by the
Second Lien Claimholders to the Grantors shall be deemed to have been given and
made in reliance upon this Agreement. 
The First Lien Collateral Agent (on behalf of itself and the First Lien
Claimholders) acknowledges that it and the 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 the
First Lien Credit Agreement, the other First Lien Loan Documents, this
Agreement and the transactions contemplated hereby and thereby and they will
continue to make their own credit decision in taking or not taking any action
under the First Lien Credit Agreement, the other First Lien Loan Documents or
this Agreement.


 


31

















 


Section 7.02           No Warranties or
Liability.


 


(a)           The First Lien
Collateral Agent (on behalf of itself and the First Lien Claimholders)
acknowledges and agrees that each of the Second Lien Collateral Agent and the
Second Lien Claimholders have made no express or implied representation or
warranty, including with respect to the execution, validity, legality,
completeness, collectibility or enforceability of any of the Second Lien Loan
Documents, the ownership of any Collateral or the perfection or priority of any
Liens thereon.  The Second Lien
Claimholders will be entitled to manage and supervise their respective loans
and extensions of credit under the Second Lien Loan Documents in accordance
with law and as they may otherwise, in their sole discretion, deem appropriate.


 


(b)           The Second Lien
Collateral Agent (on behalf of itself and the Second Lien Claimholders),
acknowledges and agrees that the First Lien Collateral Agent and the First Lien
Claimholders have made no express or implied representation or warranty,
including with respect to the execution, validity, legality, completeness,
collectibility or enforceability of any of the First Lien Loan Documents, the
ownership of any Collateral or the perfection or priority of any Liens
thereon.  The First Lien Claimholders
will be entitled to manage and supervise their respective loans and extensions
of credit under their respective First Lien Loan Documents in accordance with
law and as they may otherwise, in their sole discretion, deem appropriate.


 


(c)           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 any 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.


 


Section 7.03           No Waiver of Lien
Priorities.


 


(a)           No right of the First
Lien Claimholders, the Control Agent, 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 any Borrower or any other Grantor or by any act or failure
to act by any First Lien Claimholder or the 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 the First Lien
Collateral Agent or the First Lien Claimholders, 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 5.03(a)), the First Lien
Claimholders or the First Lien Collateral Agent may, at any time and from time
to time in accordance 


 


32

















 


with the First Lien Loan Documents or
applicable law, without the consent of, or notice to, the Second Lien
Collateral Agent or any Second Lien Claimholders, without incurring any
liabilities to the Second Lien Collateral Agent or any Second Lien Claimholders
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 Claimholders is
affected, impaired or extinguished thereby) do any one or more of the following:


 


(i)            make loans and
advances to any Grantor or issue, guaranty or obtain letters of credit for
account of any Grantor or otherwise extend credit to any Grantor, in any amount
and on any terms, whether pursuant to a commitment or as a discretionary advance
and whether or not any default or event of default or failure of condition is
then continuing (subject, in each case, to the limits set forth in the
definition of “First Lien Obligations” and Section 5.03);


 


(ii)           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 thereof or any
liability of any Borrower or any other Grantor, or any liability incurred
directly or indirectly in respect thereof (including any increase in or
extension of the First Lien Obligations, without any restriction as to the
amount, tenor or terms of any such increase or extension, subject to the limits
set forth in the definition of “First Lien Obligations”) or, subject to
the provisions of this Agreement, 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;


 


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


 


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


 


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


 


33

















 


(vi)          take or fail to take any
Lien securing the First Lien Obligations or any other collateral security for
any First Lien Obligations or take or fail to take any action which may be
necessary or appropriate to ensure that any Lien securing First Lien
Obligations or any other Lien upon any property is duly enforceable or
perfected or entitled to priority as against any other Lien or to ensure that
any proceeds of any property subject to any Lien are applied to the payment of
any First Lien Obligation or any Obligation secured thereby; or


 


(vii)         otherwise release,
discharge or permit the lapse of any or all Liens securing the First Lien
Obligations or any other Liens upon any property at any time securing any First
Lien Obligations.


 


(c)           The Second Lien
Collateral Agent  (on behalf of itself
and the Second Lien Claimholders) also agrees that the Control Agent, 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 the Second Lien
Claimholders) hereby waives all claims against the Control Agent, any First
Lien Claimholder and the First Lien Collateral Agent, arising out of any and
all actions which the Control Agent, 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, (ii) the
collection of the First Lien Obligations or (iii) the foreclosure upon, or
sale, liquidation or other disposition of, any Collateral (including, without
limitation, the Control Collateral, as applicable).  The Second Lien Collateral Agent (on behalf
of itself and the Second Lien Claimholders) 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 Collateral, the First Lien
Obligations or otherwise.


 


(d)           The Second Lien
Collateral Agent (on behalf of itself and the Second Lien Claimholders) 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 marshalling, appraisal, valuation or other similar right that
may otherwise be available under applicable law with respect to the Collateral
or any other similar rights a junior secured creditor may have under applicable
law.


 


Section 7.04           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:


 


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


 


(b)           except as otherwise 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 


 


34

















 


or otherwise, of the terms of any First Lien
Loan Document or any Second Lien Loan Document;


 


(c)           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 guarantee thereof;


 


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


 


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


 


Section 7.05           Certain Notices.


 


(a)           Promptly upon the
satisfaction of the conditions set forth in clauses (a) through (f) of
the definition of Discharge of First Lien Obligations, the First Lien
Collateral Agent shall deliver written notice confirming same to the Second
Lien Collateral Agent provided that the failure to give any such notice shall
not result in any liability of the First Lien Collateral Agent or the First
Lien Claimholders hereunder or in the modification, alteration, impairment, or
waiver of the rights of any party hereunder.


 


(b)           Promptly upon (or as
soon as practicable following) the commencement by the First Lien Collateral
Agent of any enforcement action or the exercise of any remedy with respect to
any Collateral (including by way of a public or private sale of Collateral),
the First Lien Collateral Agent shall notify the Second Lien Collateral Agent
of such action; provided that the failure to give any such notice shall not
result in any liability of the First Lien Collateral Agent or the First Lien
Claimholders hereunder or in the modification, alteration, impairment, or
waiver of the rights of any party hereunder.


 


ARTICLE VIII


 


MISCELLANEOUS


 


Section 8.01           Inconsistencies with
Other Documents.  In the event of any
conflict or inconsistency between this Agreement and any First Lien Loan
Document or the Second Lien Loan Document, the terms of this Agreement shall
control.  The parties hereto acknowledge
that the terms of this Agreement are not intended to negate any specific rights
granted to the Borrowers in the First Lien Loan Documents and the Second Lien
Loan Documents.


 


Section 8.02           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 


 


35

















 


Claimholder subject to the Second Lien Loan Documents, to extend credit
and other financial accommodations and lend monies to or for the benefit of the
Borrowers or any Grantor constituting First Lien Obligations in reliance
hereof.  The Second Lien Collateral Agent
(on behalf of itself and the Second Lien Claimholders), hereby waives any right
it may have under applicable law to revoke this Agreement or any of the
provisions of this Agreement.  This
Agreement shall survive, and shall continue in full force and effect, in any
Insolvency or Liquidation Proceeding. 
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall not invalidate the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall as to such
jurisdiction, be ineffective only to the extent of such prohibition or
unenforceability without invalidating the remainder of such provision or the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.  All
references to any Borrower or any other Grantor shall include such Borrower or
such Grantor as debtor and debtor-in-possession and any receiver or trustee for
any Borrower or any other Grantor (as the case may be) in any Insolvency or
Liquidation Proceeding.  This Agreement
shall terminate and be of no further force and effect, (a) with respect to
the Second Lien Collateral Agent, the Second Lien Claimholders and the Second
Lien Obligations, upon the later of (i) the date upon which the
obligations under the Second Lien Credit Agreement terminate and payment has
been made in full in cash of all other Second Lien Obligations outstanding on
such date and (ii) if there are other Second Lien Obligations outstanding
on such date, the date upon which such Second Lien Obligations terminate and (b) with
respect to the First Lien Collateral Agent, the First Lien Claimholders and the
First Lien Obligations, the date of Discharge of First Lien Obligations,
subject to the rights of the First Lien Claimholders under Section 5.06
and Section 6.05.


 


Section 8.03           Amendments; Waivers.  No amendment, modification or waiver of any
of the provisions of this Agreement by the Second Lien Collateral Agent or the
First Lien Collateral Agent 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. 
Notwithstanding the foregoing, neither Borrower shall have any right to
consent to or approve any amendment, modification or waiver of any provision of
this Agreement except to the extent its rights or obligations are directly
affected.


 


Section 8.04           Information
Concerning Financial Condition of the Borrowers and their Subsidiaries.


 


(a)           The First Lien
Collateral Agent and the First Lien Claimholders, on the one hand, and the
Second Lien Claimholders and the Second Lien Collateral Agent, on the other
hand, shall each be responsible for keeping themselves informed of (i) the
financial condition of the Borrowers and their Subsidiaries and all endorsers
and/or guarantors of the First Lien Obligations or the Second Lien Obligations
and (ii) 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 


 


36

















 


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 (w) 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, (x) to provide any additional information or to provide any such
information on any subsequent occasion, (y) to undertake any investigation
or (z) 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.


 


(b)           The Grantors agree that
any information provided to the First Lien Collateral Agent, the Second Lien
Collateral Agent, the Control Agent, any First Lien Claimholder or any Second
Lien Claimholder may be shared by such Person with any First Lien Claimholder,
any Second Lien Claimholder, the Control Agent, the First Lien Collateral Agent
or the Second Lien Collateral Agent notwithstanding a request or demand by such
Grantor that such information be kept confidential.


 


Section 8.05           Subrogation.  The Second Lien Collateral Agent (on behalf
of itself and the Second Lien Claimholders), hereby waives any rights of
subrogation it may acquire as a result of any payment hereunder until the
Discharge of First Lien Obligations has occurred.


 


Section 8.06           Application of
Payments.  All payments received by
the First Lien Collateral Agent or the First Lien Claimholders 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 the Second Lien Claimholders), assents 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 security 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.


 


Section 8.07           SUBMISSION TO
JURISDICTION.


 


(a)           EACH PARTY HERETO
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN THE
BOROUGH OF MANHATTAN, NEW YORK AND OF THE UNITED STATES DISTRICT COURT SITTING
IN THE SOUTHERN DISTRICT OF NEW YORK AND ANY APPELLATE COURT THEREOF, IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION
OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURTS OR,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT A
FINAL JUDGMENT 


 


37

















 


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.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER
FIRST LIEN LOAN DOCUMENT OR SECOND LIEN LOAN DOCUMENT SHALL AFFECT ANY RIGHT
THAT THE FIRST LIEN COLLATERAL AGENT, THE SECOND LIEN COLLATERAL AGENT, ANY
FIRST LIEN CLAIMHOLDER OR SECOND LIEN CLAIMHOLDER MAY OTHERWISE HAVE TO BRING
ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER FIRST LIEN
LOAN DOCUMENT OR SECOND LIEN LOAN DOCUMENT AGAINST THE BORROWER OR ANY OTHER
GRANTOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.


 


(b)           EACH PARTY HERETO
IRREVOCABLY AND UNCONDITIONALLY 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 THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY COURT REFERRED TO IN
PARAGRAPH (A) OF THIS SECTION. 
EACH OF THE PARTIES HERETO HEREBY 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.


 


(c)           EACH PARTY HERETO
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 (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (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.


 


Section 8.08           California Judicial Reference.  If any action or proceeding is
filed in a court of the State of California by or against any party hereto in
connection with any of the transactions contemplated by this Agreement (a) the
court shall, and is hereby directed to, make a general reference pursuant to
California Code of Civil Procedure Section 638 to a referee (who shall be
a single active or retired judge) to hear and determine all of the issues in
such action or proceeding (whether of fact or of law) and to report a statement
of decision, provided that at the option of any party to such proceeding, any
such issues pertaining to a “provisional remedy” as defined in California Code
of Civil Procedure Section 1281.8 shall be heard and determined by the
court, and (b) the Borrowers shall be solely responsible to pay all fees
and expenses of any referee appointed in such action or proceeding.


 


38














 


Section 8.09           Notices.  Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing (for
purposes hereof, the term “writing” shall include information in electronic
format such as electronic mail and internet web pages), or by telephone
subsequently confirmed in writing.  Any
notice shall be effective if delivered by hand delivery or sent via electronic
mail, posting on an internet web page, telecopy, recognized overnight courier
service or certified mail, return receipt requested, and shall be presumed to
be received by a party hereto (i) on the date of delivery if delivered by
hand or sent by electronic mail, posting on an internet web page, or by
telecopy, (ii) on the next Business Day if sent by recognized overnight
courier service and (iii) on the third (3rd) Business Day following the
date sent by certified mail, return receipt requested.  A telephonic notice to the First Lien
Collateral Agent, the Second Lien Collateral Agent or the Control Agent as understood
by the First Lien Collateral Agent, the Second Lien Collateral Agent or the
Control Agent will be deemed to be the controlling and proper notice in the
event of a discrepancy with or failure to receive a confirming written notice.


 


Section 8.10           Further Assurances.  The First Lien Collateral Agent (on behalf of
itself and the First Lien Claimholders) and the Second Lien Collateral Agent
(on behalf of itself and the Second Lien Claimholders), and the Borrowers 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 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 8.11           APPLICABLE LAW.  THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.


 


Section 8.12           Binding on
Successors and Assigns.  This
Agreement shall be binding upon and inure to the benefit of the First Lien
Collateral Agent, the First Lien Claimholders, the Second Lien Collateral
Agent, the Second Lien Claimholders, the Control Agent and their respective
successors and assigns.


 


Section 8.13           Specific Performance.  Each of the First Lien Collateral Agent and
the Second Lien Collateral Agent may demand specific performance of this
Agreement.  The First Lien Collateral
Agent (on behalf of itself and the First Lien Claimholders) and the Second Lien
Collateral Agent (on behalf of itself and the Second Lien Claimholders) hereby
irrevocably waive 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 any First Lien Collateral Agent or the
Second Lien Collateral Agent, as the case may be.


 


Section 8.14           Titles and Captions.  Titles and Captions of Articles, Sections and
Subsections in this Agreement are for convenience only, and neither limit nor amplify
the provisions of this Agreement.


 


Section 8.15           Counterparts;
Integration.  This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which
when taken together shall constitute a single contract.  


 


39

















 


This Agreement constitutes the entire contract among the parties
relating to the subject matter hereof and supersedes any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof.  Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.


 


Section 8.16           Authorization.  By its signature, each Person executing this
Agreement on behalf of a party hereto represents and warrants to the other
parties hereto that it is duly authorized to execute this Agreement.


 


Section 8.17           No Third Party
Beneficiaries.  Nothing in this
Agreement express or implied shall be construed to confer upon any Person
(other than the parties hereto and their respective successors and assigns
permitted hereby) any legal or equitable right, remedy or claim under or by
reason of this Agreement.


 


Section 8.18           Provisions Solely to
Define Relative Rights.  The
provisions of this Agreement are and are intended solely for the purpose of
defining the relative rights of the First Lien Claimholders on the one hand and
the Second Lien Claimholders on the other hand. 
Nothing in this Agreement is intended to or shall impair the rights of
any Borrower or any other Grantor, or the obligations of any 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.


 


40

















 


IN WITNESS
WHEREOF, the parties hereto have executed this Intercreditor Agreement as of
the date first written above.


 


	
   

  	
  BANK OF AMERICA, N.A., as First Lien

  Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


Notice Address:


 


Agency
Management


Mail
Code:  WA1-501-32-37


800 Fifth
Avenue, Floor 32


Seattle, WA
98104


Attention:         Tiffany Shin


Telephone:  (206)358-0078


Telecopier:  (206)358-0971


Electronic
Mail:  tiffany.shin@bankofamerica.com


 

















 


	
   

  	
  BANK OF AMERICA, N.A., as Second Lien

  Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


Notice Address:


 


Agency
Management


Mail
Code:  WA1-501-32-37


800 Fifth
Avenue, Floor 32


Seattle, WA
98104


Attention:         Tiffany Shin


Telephone:  (206)358-0078


Telecopier:  (206)358-0971


Electronic
Mail:  tiffany.shin@bankofamerica.com


 


 


	
   

  	
  BANK OF AMERICA, N.A., as Control Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


Notice Address:


 


Agency
Management


Mail
Code:  WA1-501-32-37


800 Fifth
Avenue, Floor 32


Seattle, WA 98104


Attention:         Tiffany Shin


Telephone:  (206)358-0078


Telecopier:  (206)358-0971


Electronic
Mail:  tiffany.shin@bankofamerica.com


 


 


[Prospect Medical Holdings, Inc.
Intercreditor Agreement]


 

















 


	
   

  	
  PROSPECT MEDICAL HOLDINGS, INC., 

  as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


 


	
   

  	
  PROSPECT MEDICAL GROUP, INC., 

  as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


Notice Address:


 


400 Corporate
Pointe, Suite 525


Culver City, CA
90230


Attention:         Jacob Y. Terner, M.D.


Telephone:  (310) 338-8677


Telecopier:  (714) 560-7361


Electronic
Mail:


 


 


	
   

  	
  SIERRA MEDICAL MANAGEMENT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


 


	
   

  	
  PROSPECT MEDICAL SYSTEMS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


 


[Prospect Medical Holdings,
Inc. Intercreditor Agreement]


 

















 


	
   

  	
  PROSPECT HOSPITAL ADVISORY SERVICES,

  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


 


	
   

  	
  PROSPECT ADVANTAGE NETWORK, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


 


	
   

  	
  PROSPECT
  HOSPITALS SYSTEM, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


 


	
   

  	
  ALTA
  HOLLYWOOD HOSPITALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


 


	
   

  	
  ALTA LOS
  ANGELES HOSPITALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


 


[Prospect Medical Holdings,
Inc. Intercreditor Agreement]


 

















 


	
   

  	
  PROMED
  HEALTH CARE ADMINISTRATORS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PINNACLE  HEALTH RESOURCES

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PROSPECT PHYSICIAN ASSOCIATES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PROSPECT
  HEALTH SOURCE MEDICAL

  GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PROSPECT
  PROFESSIONAL CARE MEDICAL

  GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				



 


 


[Prospect Medical Holdings,
Inc. Intercreditor Agreement]


 

















 


	
   

  	
  NUESTRA FAMILIA MEDICAL GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  APAC MEDICAL GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PROSPECT NWOC MEDICAL GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SIERRA PRIMARY CARE MEDICAL GROUP, A

  MEDICAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  STARCARE MEDICAL GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				



 


 


[Prospect Medical Holdings,
Inc. Intercreditor Agreement]


 

















 


	
   

  	
  PEGASUS
  MEDICAL GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ANTELOPE
  VALLEY MEDICAL ASSOCIATES,

  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SANTA ANA/TUSTIN PHYSICIANS GROUP,

  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PROMED HEALTH SERVICES COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GENESIS
  HEALTHCARE OF SOUTHERN

  CALIFORNIA, INC., A MEDICAL GROUP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				



 


 


[Prospect Medical Holdings,
Inc. Intercreditor Agreement]


 

















 


	
   

  	
  POMONA
  VALLEY MEDICAL GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  UPLAND MEDICAL GROUP, A

  PROFESSIONAL MEDICAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				



 


 


Notice Address:


 


 


[Prospect Medical Holdings, Inc. Intercreditor Agreement]