***Exhibit 10.5***

 

 

 

**INTERCREDITOR AGREEMENT**

 

among

 

**PROSPECTMEDICAL HOLDINGS, INC.**

as theCompany

** **

and

 

**CERTAINSUBSIDIARIES OF THE COMPANY**

**FROM TIMETO TIME PARTIES HERETO**

asGuarantors,

 

and

 

**ROYALBANK OF CANADA**,

asFirst Lien Collateral Agent

 

and

 

**U.S. BANKNATIONAL ASSOCIATION**,

asSecond Lien Collateral Agent

 

and

 

**ROYALBANK OF CANADA**,

asControl Agent

 

Datedas of July 29, 2009

 

 

 

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**TABLE OF CONTENTS**

** **
| ** **                                             | ** **                                                            | **Page**   |
|--------------------------------------------------------|-----------------------------------------------------------------------|------------|
| ** **                                             | ** **                                                            | ** ** |
| ARTICLE I  DEFINITIONS                            | 2                                                                     |
| SECTION 1.01                                      | Defined Terms                                                         | 2          |
| SECTION 1.02                                      | Other Interpretive Provisions                                         | 10         |
|                                                   |                                                                  |       |
| ARTICLE II LIEN  PRIORITIES                       | 11                                                                    |
| SECTION 2.01                                      | Relative Priorities                                                   | 11         |
| SECTION 2.02                                      | Failure to Perfect                                                    | 11         |
| SECTION 2.03                                      | Nature of First Lien  Obligations                                     | 11         |
| SECTION 2.04                                      | Prohibition on  Contesting Liens                                      | 12         |
| SECTION 2.05                                      | No New Liens                                                          | 12         |
| SECTION 2.06                                      | Similar Liens and  Agreements                                         | 13         |
|                                                   |                                                                  |       |
| ARTICLE III  ENFORCEMENT                          | 14                                                                    |
| SECTION 3.01                                      | Exercise of Remedies                                                  | 14         |
| SECTION 3.02                                      | Actions Upon Breach                                                   | 16         |
|                                                   |                                                                  |       |
| ARTICLE IV  PAYMENTS                              | 17                                                                    |
| SECTION 4.01                                      | Application of Proceeds                                               | 17         |
| SECTION 4.02                                      | Payments Over                                                         | 17         |
|                                                   |                                                                  |       |
| ARTICLE V OTHER  AGREEMENTS                       | 18                                                                    |
| SECTION 5.01                                      | Releases                                                              | 18         |
| SECTION 5.02                                      | Insurance                                                             | 18         |
| SECTION 5.03                                      | Amendments to First  Lien Documents and Second Lien Documents         | 19         |
| SECTION 5.04                                      | Rights As Unsecured  Creditors                                        | 20         |
| SECTION 5.05                                      | Control Agent for  Perfection                                         | 21         |
| SECTION 5.06                                      | When Discharge of First  Lien Obligations Deemed to Not Have Occurred | 23         |
|                                                   |                                                                  |       |
| ARTICLE VI  INSOLVENCY OR LIQUIDATION PROCEEDINGS | 24                                                                    |
| SECTION 6.01                                      | Finance and Sale Issues                                               | 24         |
| SECTION 6.02                                      | Relief from the  Automatic Stay                                       | 24         |
| SECTION 6.03                                      | Adequate Protection                                                   | 25         |
| SECTION 6.04                                      | No Waiver                                                             | 26         |
| SECTION 6.05                                      | Avoidance Issues                                                      | 26         |
| SECTION 6.06                                      | Separate Grants of  Security and Separate Classification              | 26         |
| SECTION 6.07                                      | Reorganization  Securities                                            | 26         |
| SECTION 6.08                                      | Post-Petition Claims                                                  | 26         |
| SECTION 6.09                                      | Waiver                                                                | 27         |
| SECTION 6.10                                      | Expense Claims                                                        | 27         |
| SECTION 6.11                                      | Other Matters                                                         | 27         |
| SECTION 6.12                                      | Effectiveness in  Insolvency or Liquidation Proceedings               | 27         |

 

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| SECTION 6.13                         | Limitation of  Applicability                                                    | 28     |
|-------------------------------------------|---------------------------------------------------------------------------------|--------|
|                                      |                                                                            |   |
| ARTICLE VII  RELIANCE; WAIVERS; ETC. | 28                                                                              |
| SECTION 7.01                         | Non-Reliance                                                                    | 28     |
| SECTION 7.02                         | No Warranties or  Liability                                                     | 28     |
| SECTION 7.03                         | Obligations  Unconditional                                                      | 29     |
| SECTION 7.04                         | Certain Notices                                                                 | 30     |
|                                      |                                                                            |   |
| ARTICLE VIII  MISCELLANEOUS          | 30                                                                              |
| SECTION 8.01                         | Inconsistencies with  Other Documents                                           | 30     |
| SECTION 8.02                         | Effectiveness;  Continuing Nature of this Agreement; Severability               | 30     |
| SECTION 8.03                         | Amendments; Waivers                                                             | 31     |
| SECTION 8.04                         | Information Concerning  Financial Condition of the Company and its Subsidiaries | 31     |
| SECTION 8.05                         | Subrogation                                                                     | 32     |
| SECTION 8.06                         | Application of Payments                                                         | 32     |
| SECTION 8.07                         | SUBMISSION TO  JURISDICTION                                                     | 32     |
| SECTION 8.08                         | Notices                                                                         | 33     |
| SECTION 8.09                         | Further Assurances                                                              | 33     |
| SECTION 8.10                         | APPLICABLE LAW                                                                  | 34     |
| SECTION 8.11                         | Binding on Successors  and Assigns                                              | 34     |
| SECTION 8.12                         | Specific Performance                                                            | 34     |
| SECTION 8.13                         | Titles and Captions                                                             | 34     |
| SECTION 8.14                         | Counterparts;  Integration                                                      | 34     |
| SECTION 8.15                         | Authorization                                                                   | 34     |
| SECTION 8.16                         | No Third Party  Beneficiaries                                                   | 34     |
| SECTION 8.17                         | Provisions Solely to Define Relative Rights                                     | 34     |

 

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**INTERCREDITOR AGREEMENT**

 

ThisINTERCREDITOR AGREEMENT, is dated as of July 29, 2009, and entered into byand among PROSPECT MEDICAL HOLDINGS, INC., a Delaware corporation (“Holdings”or the “Company”), each of the Subsidiaries of Holdings identified on thesignature pages hereof as a Guarantor (such Subsidiaries, the “Guarantors”),****ROYAL BANK OF CANADA,****in its capacity as administrative agentfor the First Lien Obligations (as defined below), including its successors andassigns from time to time (the “First Lien Collateral Agent”), U.S. BANKNATIONAL ASSOCIATION, in its capacity as collateral agent in respect of theSecond Lien Obligations (as defined below), including its successors andassigns from time to time (the “Second Lien Collateral Agent”) and ROYALBANK OF CANADA, in its capacity as Control Agent (as defined below) for theFirst Lien Collateral Agent and the Second Lien Collateral Agent.  Capitalized terms used herein but nototherwise defined herein have the meanings set forth in Article I below.

 

**RECITALS**

** **

WHEREAS,the Company, the lenders party thereto from time to time, and Royal Bank ofCanada, as administrative agent, have entered into that certain CreditAgreement dated as of the date hereof providing for a revolving credit facilityto the Company (as amended, restated, supplemented, modified or Refinanced fromtime to time, the “Credit Agreement”);

 

WHEREAS,the Company, the Guarantors and U.S. Bank National Association, as trustee,have entered into that certain Indenture dated as of the date hereof in respectof the Company’s 2014 Notes (as amended, restated, supplemented, modified orRefinanced from time to time, the “Indenture”);

 

WHEREAS,(a) the obligations of the Company and the Guarantors under the CreditAgreement and the other First Lien Documents, (b) any Secured HedgeAgreement, and (c) any Secured Cash Management Agreement will be secured,in part, by the Controlled Accounts and the Accounts of the Company and theGuarantors and the proceeds thereof (whether by sale or collection) and theControlled Accounts pursuant to the terms of the First Lien CollateralDocuments;

 

WHEREAS,the obligations of the Company and the Guarantors under the Indenture and theother Second Lien Documents will be secured, in part, the Accounts of the Companyand the Guarantors and the proceeds thereof (whether by sale or collection) andthe Controlled Accounts pursuant to the terms of the Second Lien CollateralDocuments;

 

WHEREAS,the First Lien Documents and the Second Lien Documents provide, among otherthings, that the parties thereto shall set forth in this Agreement theirrespective rights and remedies with respect to the Collateral; and

 

WHEREAS,in order to induce the First Lien Collateral Agent and the First LienClaimholders to consent to the incurrence by the Grantors (as defined below) ofthe Second Lien Obligations and to induce the First Lien Claimholders to extendcredit and other financial accommodations to or for the benefit of the Company,or any other Grantor, the Second Lien 

 

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Collateral Agent on behalf of the Second LienClaimholders has agreed to the lien subordination, intercreditor and otherprovisions set forth in this Agreement.

 

NOW,THEREFORE**,** in consideration of theforegoing, the mutual covenants and obligations herein set forth and for othergood and valuable consideration, the sufficiency and receipt of which arehereby acknowledged, the parties hereto, intending to be legally bound, herebyagree as follows:

 

# **ARTICLE IDEFINITIONS**

 

SECTION 1.01               DefinedTerms.  As used in the Agreement, thefollowing terms shall have the following meanings:

 

“2014 Notes” means the Company’s senior securednotes due 2014 issued under the Indenture.

 

“Accounts” has the meaning ascribed to suchterm in the UCC, but shall not include Designated Accounts (as defined in theShared Collateral Agreement).

 

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

 

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

 

“AttributableIndebtedness” means, on any date, (a) in respect of any CapitalizedLease of any Person, the capitalized amount thereof that would appear on abalance sheet of such Person prepared as of such date in accordance with GAAP, (b) inrespect of any Synthetic Lease Obligation, the capitalized amount of theremaining lease or similar payments under the relevant lease or otherapplicable agreement or instrument that would appear on a balance sheet of suchPerson prepared as of such date in accordance with GAAP if such lease or otheragreement or instrument were accounted for as a Capitalized Lease and (c) allSynthetic Debt of such Person.

 

“BankruptcyCode”****means title 11 of theUnited States Code entitled “Bankruptcy,” as now and hereafter in effect, orany successor statute.

 

“BusinessDay”****means any day other thana Saturday, Sunday or other day on which commercial banks are authorized toclose under the laws of, or are in fact closed in, New York,New York.

 

“CapitalizedLease” means all leases that have been or should be, in accordance withGAAP, recorded as capitalized leases.

 

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

 

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

 

“Collateral”****means the assets and property of anyGrantor, whether tangible or intangible, constituting both First LienCollateral and Second Lien Collateral.

 

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

 

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

 

“ControlCollateral” means any Collateral consisting of any cash and any otherCollateral as to which a first priority Lien shall or may be perfected throughpossession or control by the secured party or any agent therefor.

 

“ControlledAccounts” means those certain Deposit Accounts of any Grantor subject toLiens under the terms of the First Lien Collateral Documents and the SecondLien Collateral Documents and subject to control or a control agreement infavor of the Control Agent.

 

“CreditAgreement”****has the meaningassigned thereto in the recitals.

 

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

 

“DepositAccount” has the meaning ascribed to such term in the UCC.

 

“DIPFinancing”****has the meaning setforth in Section 6.01.

 

“Dischargeof First Lien Obligations”****means,except to the extent otherwise provided in Section 5.06, (a) paymentin full in cash of the principal of and interest (including interest accruingon or after the commencement of any Insolvency or Liquidation Proceeding,whether or not a claim for such interest is, or would be, allowed in suchInsolvency or Liquidation Proceeding, in which case such interest shall berepaid from funds otherwise possibly available to the Second Lien Claimholders)and premium, if any, on all Indebtedness outstanding under the First LienDocuments and termination of all commitments to lend or otherwise extend creditunder the First Lien Documents, (b) payment in full in cash of all otherFirst Lien Obligations that are due and payable or otherwise accrued and owingat or prior to the time such principal and interest are paid (including legalfees and other expenses, costs or charges accruing on or after the commencementof any Insolvency or Liquidation Proceeding, whether or not a claim for suchfees, expenses, costs or charges is, or would be, allowed in such Insolvency orLiquidation Proceeding), (c) termination of any Secured Hedge Agreementand the payment in full in cash of all obligations thereunder, (d) terminationof any Secured Cash Management Agreement and the payment in full in cash of allobligations thereunder, (e) termination or cash collateralization (in anamount reasonably satisfactory to the First Lien 

 

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Collateral Agent not to exceed 105%) of all letters ofcredit issued under the First Lien Documents, and (f) adequate provisionhas been made for any contingent or unliquidated First Lien Obligations relatedto claims, causes of action, or liabilities that have been asserted orthreatened against the Lenders or the First Lien Claimholders or that otherwisecan be reasonably identified based on the then known facts and circumstances.

 

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

 

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

 

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

 

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

 

“FirstLien Collateral”****means “Collateral”as defined in the First Lien Security Agreement.

 

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

 

“FirstLien Collateral Documents”****meansthe First Lien Security Agreement and any other agreement, document orinstrument pursuant to which a Lien is granted on assets intended to constituteFirst Lien Collateral which secures any First Lien Obligations or under whichrights or remedies with respect to such Liens are governed.

 

“FirstLien Documents”****means theCredit Agreement and the Loan Documents (as defined in the Credit Agreement),First Lien Collateral Documents and each of the other agreements, documents andinstruments providing for or evidencing any other First Lien Obligation, andany other document or instrument executed or delivered at any time inconnection with any First Lien Obligations, including any intercreditor orjoinder agreement among holders of First Lien Obligations, to the extent suchare effective at the relevant time, as each may be modified from time to timein accordance with their terms.

 

“FirstLien Obligations”****means all (a) outstanding“Obligations” as defined in and arising under the Credit Agreement and theother First Lien Documents (it being understood, for avoidance of doubt, thatobligations owed to a Hedge Bank and/or a Cash Management Bank that is both aFirst Lien Claimholder and a Second Lien Claimholder at the time such SecuredHedge Agreement and/or Secured Cash Management Agreement was entered into bythe Company shall be considered First Lien Obligations) and (b) any DIPFinancing.  “First Lien Obligations”shall include (i) all interest accrued or accruing (or which would, absent

 

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commencement of an Insolvency or LiquidationProceeding, accrue) in accordance with the rate specified in the relevant FirstLien Document and (ii) all fees, costs and charges incurred in connectionwith the First Lien Documents and provided for thereunder (including, withoutlimitation, legal fees), in the case of clause (i) and (ii) whetherbefore or after commencement of an Insolvency or Liquidation Proceeding andirrespective of whether any claim for such interest, fees, costs or charges isallowed as a claim in such Insolvency or Liquidation Proceeding.

 

“FirstLien Security Agreement” means that certain First Lien Collateral Agreementin respect of the First Lien Collateral dated the date hereof from the Grantorsin favor of the First Lien Collateral Agent, as amended, restated, supplementedor otherwise modified from time to time.

 

“GAAP”means generally accepted accounting principles in the United States as ineffect as of the date hereof and as set forth in the opinions andpronouncements of the Accounting Principles Board and the American Institute ofCertified Public Accountants and statements and pronouncements of the FinancialAccounting Standards Board or such other principles as may be approved by asignificant segment of the accounting profession in the United States, that areapplicable to the circumstances as of the date of determination, consistentlyapplied.

 

“GovernmentalAuthority” 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 otherentity exercising executive, legislative, judicial, taxing, regulatory oradministrative powers or functions of or pertaining to government (includingany supra-national bodies such as the European Union or the European CentralBank).

 

“Grantors”****means the Company and each of theGuarantors that have executed and delivered, or may from time to time hereafterexecute and deliver, a First Lien Collateral Document or a Second Lien CollateralDocument.

 

“Guarantee”means, as to any Person, any (a) obligation, contingent or otherwise, ofsuch Person guaranteeing or having the economic effect of guaranteeing anyIndebtedness or other obligation payable or performable by another Person (the “primaryobligor”) in any manner, whether directly or indirectly, and including anyobligation of such Person, direct or indirect, (i) to purchase or pay (oradvance or supply funds for the purchase or payment of) such Indebtedness orother obligation, (ii) to purchase or lease property, securities orservices for the purpose of assuring the obligee in respect of suchIndebtedness or other obligation of the payment or performance of suchIndebtedness or other obligation, (iii) to maintain working capital,equity capital or any other financial statement condition or liquidity or levelof income or cash flow of the primary obligor so as to enable the primaryobligor to pay such Indebtedness or other obligation, or (iv) entered intofor the purpose of assuring in any other manner the obligee in respect of suchIndebtedness or other obligation of the payment or performance thereof or toprotect such obligee against loss in respect thereof (in whole or in part), or (b) anyLien on any assets of such Person securing any Indebtedness or other obligationof any other Person, whether or not such Indebtedness or other obligation isassumed by such Person (or any right, contingent or otherwise, of any holder ofsuch Indebtedness to obtain any such Lien). The amount of any 

 

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Guarantee shall be deemed to be an amount equal to thestated or determinable amount of the related primary obligation, or portionthereof, in respect of which such Guarantee is made or, if not stated ordeterminable, the maximum reasonably anticipated liability in respect thereofas determined by the guaranteeing Person in good faith.  The term “Guarantee” as a verb has acorresponding meaning.

 

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

 

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

 

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

 

#### (a)           all obligations of such Person forborrowed 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 orcontingent obligations of such Person arising under letters of credit,including standby and commercial, solely to the extent that such letters ofcredit are not fully cash collateralized, bankers’ acceptances, bankguaranties, surety bonds and similar instruments;

####  

#### (c)           net obligations of such Person underany Swap Contract;

####  

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

####  

#### (e)           indebtedness (excluding prepaidinterest thereon) secured by a Lien on property owned or being purchased bysuch Person (including indebtedness arising under conditional sales or othertitle retention agreements), whether or not such indebtedness shall have beenassumed by such Person or is limited in recourse;

####  

#### (f)            all Attributable Indebtedness inrespect of Capitalized Leases and Synthetic Lease Obligations of such Personand all Synthetic Debt of such Person;

####  

#### (g)           all obligations of such Person topurchase, redeem, retire, defease or otherwise make any payment in respect of anyEquity Interest in such Person or any other Person or any warrant, right oroption to acquire such Equity Interest, valued, in the case of a redeemablepreferred interest, at the greater of its voluntary or involuntary liquidationpreference plus accrued and unpaid dividends;

####  

#### (h)           all Guarantees of such Person inrespect of any of the foregoing; and

 

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#### (i)            all obligations of such Person owingin respect of Medicare and/or Medicaid.

####  

Forall purposes hereof, the Indebtedness of any Person shall include theIndebtedness of any partnership or joint venture (other than a joint venturethat is itself a corporation or limited liability company) in which such Personis a general partner or a joint venturer, unless such Indebtedness is expresslymade non-recourse to such Person.  Theamount of any net obligation under any Swap Contract on any date shall bedeemed to be the Swap Termination Value thereof as of such date.

 

“Indenture”has the meaning set forth in the Recitals.

 

“Insolvencyor Liquidation Proceeding” means (a) any voluntary or involuntary caseor proceeding under the Bankruptcy Code or any other Debtor Relief Law withrespect 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 toany Grantor or with respect to a material portion of its respective assets, (c) anyliquidation, dissolution, reorganization or winding up of any Grantor whethervoluntary or involuntary and whether or not involving insolvency or bankruptcyor (d) any assignment for the benefit of creditors generally or any othermarshalling of assets and liabilities of any Grantor.

 

“Lenders”****means the “Lenders” under and as definedin the Credit Agreement.

 

“Lien”****means any mortgage, pledge, hypothecation,assignment, deposit arrangement, encumbrance, lien (statutory or other),charge, or preference, priority or other security interest or preferentialarrangement in the nature of a security interest of any kind or naturewhatsoever (including any conditional sale or other title retention agreement,any easement, right of way or other encumbrance on title to real property, andany financing lease having substantially the same economic effect as any of theforegoing).

 

“OperatingLease” means, as to any Person as determined in accordance with GAAP, anylease of property (whether real, personal or mixed) by such Person as lesseewhich 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.

 

“PMG”means Prospect Medical Group, Inc., a California professional corporation.

 

“PMGParties” means PMG, each direct or indirect Subsidiary of PMG and eachfuture direct or indirect subsidiary of PMG.

 

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

 

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

 

“RequisiteClaimholders” means those lenders under the Credit Agreement or thoseSecond Lien Claimholders in respect of the Indenture, as applicable, that arenecessary to approve the contemplated action.

 

“SecondLien Claimholders”****means, atany relevant time, the holders of Second Lien Obligations at such time,including, without limitation, the Second Lien Collateral Agent and any otheragent under the Indenture.

 

“SecondLien Collateral”****means “Collateral”as defined in the Second Lien Security Agreement.

 

“SecondLien Collateral Agent”****has themeaning set forth in the preamble hereof.

 

“SecondLien Collateral Documents”****meansthe Second Lien Security Agreement and any other agreement, document orinstrument pursuant to which a Lien is granted on assets intended to constituteSecond Lien Collateral which secures any Second Lien Obligations or under whichrights or remedies with respect to such Liens are governed.

 

“SecondLien Documents”****means theIndenture, the 2014 Notes and the Second Lien Collateral Documents andeach of the other agreements, documents and instruments providing for orevidencing any other Second Lien Obligation, and any other document orinstrument executed or delivered at any time in connection with any Second LienObligations, including any intercreditor or joinder agreement among holders ofSecond Lien Obligations, to the extent such are effective at the relevant time,as each may be modified from time to time in accordance with their terms.

 

“SecondLien Enforcement Date” means the date which is 120 days after theoccurrence of (a) an Event of Default (under and as defined in theIndenture) and (b) the First Lien Collateral Agent’s receipt ofwritten notice from the Second Lien Collateral Agent certifying that (i) anEvent of Default (under and as defined in the Indenture) has occurred and iscontinuing and (ii) the Second Lien Obligations are currently due andpayable in full (whether as a result of acceleration thereof or otherwise) inaccordance with terms of the Indenture; provided that the Second Lien Enforcement Date shall bestayed and shall not occur and shall be deemed not to have occurred (1) atany time the First Lien Collateral Agent or the First Lien Claimholders havecommenced and are diligently pursuing in good faith any enforcement action withrespect to all or a material portion of the Collateral, (2) at any timeany 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 theSecond Lien Obligations (if any) is rescinded in accordance with the terms ofthe Indenture or otherwise.

 

“SecondLien Obligations”****means all (a) outstandingobligations arising under the Indenture and the other Second LienDocuments.  “Second Lien Obligations”shall include, without limitation, (i) all principal and interest(including any Additional Interest (as defined in the Indenture)) accrued oraccruing (or which would, absent commencement of an Insolvency or 

 

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Liquidation Proceeding, accrue) in accordance with therate specified in the relevant Second Lien Document and (ii) all fees,costs, premium and charges incurred in connection with the Second LienDocuments and provided for thereunder (including, without limitation, legalfees), in each case after commencement of an Insolvency or LiquidationProceeding irrespective of whether any claim for such interest, fees, costs,premium or charges is allowed as a claim in such Insolvency or LiquidationProceeding.

 

“SecondLien Security Agreement” means that certain Second Lien CollateralAgreement in respect of the Second Lien Collateral dated the date hereof fromthe Grantors in favor of the Second Lien Collateral Agent, as amended,restated, supplemented or otherwise modified from time to time.

 

“SecuredCash Management Agreement” means any Cash Management Agreement that isentered into by and between the Company and any Cash Management Bank.

 

“SecuredHedge Agreement” means any interest rate Swap Contract required orpermitted under the Credit Agreement or the Indenture that is entered into byand between the Company and any Hedge Bank.

 

“SharedCollateral Agreement” means that certain Collateral Agreement dated as ofthe date hereof from the Grantors in favor of U.S. Bank National Association,as collateral agent, for the equal and ratable benefit of (x) Royal Bankof Canada and the lenders referred to therein and (y) U.S. Bank NationalAssociation, as note trustee and the holders of the 2014 Notes, as suchCollateral Agreement may be amended, supplemented or otherwise modified fromtime to time.

 

“StandstillPeriod”****has the meaning setforth in Section 3.01(a)(i)(A) hereof.

 

“Subsidiary”of a Person means a corporation, partnership, joint venture, limited liabilitycompany or other business entity of which a majority of the shares ofsecurities or other interests having ordinary voting power for the election ofdirectors or other governing body (other than securities or interests havingsuch power only by reason of the happening of a contingency) are at the timebeneficially owned, or the management of which is otherwise controlled,directly, or indirectly through one or more intermediaries, or the right todesignate the individual or individuals who own such majority of the shares ofsecurities or other interests having ordinary voting power is controlled,directly or indirectly, or both, by such Person.  Unless otherwise specified or the contextotherwise requires, all references herein to a “Subsidiary” or to “Subsidiaries”shall refer to a Subsidiary or Subsidiaries of Holdings and shall include thePMG Parties.

 

“SwapContract” 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 oroptions, bond or bond price or bond index swaps or options or forward bond orforward 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 swaptransactions, currency options, spot contracts, or any other similartransactions or any 

 

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combination of any of the foregoing (including anyoptions to enter into any of the foregoing), whether or not any suchtransaction is governed by or subject to any master agreement, and (b) anyand all transactions of any kind, and the related confirmations, which aresubject to the terms and conditions of, or governed by, any form of masteragreement published by the International Swaps and Derivatives Association, Inc.,any International Foreign Exchange Master Agreement, or any other masteragreement (any such master agreement, together with any related schedules, a “MasterAgreement”), including any such obligations or liabilities under any MasterAgreement.

 

“SwapTermination Value” means, in respect of any one or more Swap Contracts,after taking into account the effect of any legally enforceable nettingagreement relating to such Swap Contracts, (a) for any date on or afterthe date such Swap Contracts have been closed out and termination value(s) determinedin accordance therewith, such termination value(s), and (b) for any dateprior to the date referenced in clause (a), the amount(s) determinedas the mark-to-market value(s) for such Swap Contracts, as determinedbased upon one or more mid-market or other readily available quotationsprovided by any recognized dealer in such Swap Contracts (which may include aLender or any Affiliate of a Lender).

 

“SyntheticDebt” means, with respect to any Person as of any date of determinationthereof, all obligations of such Person in respect of transactions entered intoby such Person that are intended to function primarily as a borrowing of fundsbut are not otherwise included in the definition of “Indebtedness” or as aliability on the consolidated balance sheet of such Person and its Subsidiariesin accordance with GAAP.

 

“SyntheticLease Obligation” means the monetary obligation of a Person under (a) aso-called synthetic, off-balance sheet or tax retention lease, or (b) anagreement for the use or possession of property (including sale and leasebacktransactions), in each case, creating obligations that do not appear on thebalance sheet of such Person but which, upon the application of any DebtorRelief Laws to such Person, would be characterized as the indebtedness of suchPerson (without regard to accounting treatment).

 

“UCC”means the Uniform Commercial Code as in effect in the State of New York; providedthat, if perfection or the effect of perfection or non-perfection or thepriority of any security interest in any Collateral is governed by the UniformCommercial Code as in effect in a jurisdiction other than the State ofNew York, “UCC” means the Uniform Commercial Code as in effect from timeto time in such other jurisdiction for purposes of the provisions hereofrelating to such perfection, effect of perfection or non-perfection orpriority.

 

“UnitedStates” means the United States of America.

 

SECTION 1.02               OtherInterpretive Provisions.

 

### (a)           Thedefinitions of terms herein shall apply equally to the singular and pluralforms of the terms defined.  Whenever thecontext 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 “withoutlimitation.”  The word “will” shall be construedto have the same meaning and effect as the word “shall”.  Unless the context 

 

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### requires otherwise (i) any definition of or reference to anyagreement, instrument or other document herein shall be construed as referringto such agreement, instrument or other document as from time to time amended,supplemented or otherwise modified (subject to any restriction on suchamendments, supplements or modifications set forth herein), (ii) anyreference herein to any Person shall be construed to include such Person’ssuccessors and assigns, (iii) the words “herein”, “hereof” and “hereunder”,and words of similar import, shall be construed to refer to this Agreement inits entirety and not to any particular provision hereof, (iv) allreferences herein to Recitals, Exhibits or Sections shall be construed to referto Recitals, Exhibits, Articles or Sections of this Agreement and (v) thewords “asset” and “property” shall be construed to have the same meaning and effectand to refer to any and all tangible and intangible assets and properties,including cash, securities, accounts and contract rights.

###  

### (b)           Inthe computation of periods of time from a specified date to a later specifieddate, 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 headingsherein are included for convenience of reference only and shall not affect theinterpretation of this Agreement.

###  

# **ARTICLE IILIEN PRIORITIES**

 

SECTION 2.01               RelativePriorities.  Notwithstanding thedate, manner or order of grant, attachment or perfection of any Liens securingthe Second Lien Obligations granted on the Collateral or of any Liens securingthe First Lien Obligations granted on the Collateral and notwithstanding anyprovision of the UCC, or any applicable law or the Second Lien Documents, theSecond Lien Collateral Agent (on behalf of itself and the Second LienClaimholders) hereby agrees that:  (a) anyLien on the Collateral securing any First Lien Obligations now or hereafterheld by or on behalf of the First Lien Collateral Agent or any First LienClaimholders or any agent or trustee therefor, regardless of how acquired,whether by grant, possession, statute, operation of law, subrogation orotherwise, shall be senior in all respects and prior to any Lien on theCollateral securing any of the Second Lien Obligations; and (b) any Lienon the Collateral now or hereafter held by or on behalf of the Second LienCollateral Agent, any Second Lien Claimholders or any agent or trustee thereforregardless of how acquired, whether by grant, possession, statute, operation oflaw, subrogation or otherwise, shall be junior and subordinate in all respectsto all Liens on the Collateral securing any First Lien Obligations.

 

SECTION 2.02               Failureto Perfect.  All Liens on theCollateral securing any First Lien Obligations shall be and remain senior inall respects and prior to all Liens on the Collateral securing any Second LienObligations for all purposes, notwithstanding any failure of the First LienCollateral Agent or the First Lien Claimholders to adequately perfect itssecurity interests in the Collateral, the subordination of any Lien on theCollateral securing any First Lien Obligations to any Lien securing any otherobligation of any Grantor, or the avoidance, invalidation or lapse of any Lienon the Collateral securing any First Lien Obligations.

 

SECTION 2.03               Natureof First Lien Obligations.  TheSecond Lien Collateral Agent (for itself and on behalf of the other Second LienClaimholders) acknowledges that (a) the 

 

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First Lien Obligationsare revolving in nature, (b) the amount thereof that may be outstanding atany time or from time to time may be increased or reduced and subsequentlyreborrowed and (c) the terms of the First Lien Obligations may bemodified, extended or amended from time to time and the aggregate amount of theFirst Lien Obligations may be increased or Refinanced, in either event, withoutnotice to or consent by the Second Lien Claimholders and without affecting theprovisions hereof.  The lien prioritiesprovided in Sections 2.01 and 2.02 shall not be altered orotherwise affected by any such amendment, modification, supplement, extension,repayment, reborrowing, increase, replacement, renewal, restatement orRefinancing of either the First Lien Obligations or the Second LienObligations, or any portion thereof.

 

SECTION 2.04               Prohibitionon Contesting Liens.  Each of theSecond Lien Collateral Agent (for itself and on behalf of each Second LienClaimholder) and the First Lien Collateral Agent (for itself and on behalf ofeach First Lien Claimholder) agrees that it shall not (and hereby waives anyright to) contest or support any other Person in contesting, in any proceeding(including any Insolvency or Liquidation Proceeding), the priority, validity orenforceability of a Lien held by or on behalf of any of the First LienClaimholders in the First Lien Collateral or by or on behalf of any of theSecond Lien Claimholders in the Second Lien Collateral, as the case may be; providedthat nothing in this Agreement shall be construed to prevent or impair therights of the First Lien Collateral Agent or any First Lien Claimholder toenforce this Agreement, including the priority of the Liens securing the FirstLien Obligations as provided in Sections 2.01 and 3.01.

 

SECTION 2.05               NoNew Liens.

 

### (a)           Limitationon other Collateral for First Lien Claimholders.  So long as any Second Lien Obligations remainoutstanding, and subject to Article VI, (i) the First Lien CollateralAgent agrees that, after the date hereof, neither the First Lien CollateralAgent nor any First Lien Claimholder shall acquire or hold any Lien on anyassets of the type contemplated by the definition of “First Lien Collateral” ofany Grantor securing any First Lien Obligations which assets are not alsosubject to the second-priority Lien of the Second Lien Collateral Agent underthe Second Lien Collateral Documents, and (ii) each Grantor agrees not togrant any Lien on any assets of the type contemplated by the definition of “FirstLien Collateral”, or permit any of its Subsidiaries to grant a Lien on any suchassets, in favor of the First Lien Collateral Agent or the First LienClaimholders unless it, or such Subsidiary, has granted a similar Lien on suchassets in favor of the Second Lien Collateral Agent or the Second LienClaimholders.  If the First LienCollateral Agent or any First Lien Claimholder shall (nonetheless and in breachhereof) acquire any Lien on any assets of the type contemplated by thedefinition of “First Lien Collateral” of any Grantor or any of their respectiveSubsidiaries securing any First Lien Obligations which assets are not alsosubject to the second-priority Lien of the Second Lien Collateral Agent underthe Second Lien Collateral Documents, then the First Lien Collateral Agent (orthe relevant First Lien Claimholder), shall, without the need for any further consentof any other Person and notwithstanding anything to the contrary in any otherFirst Lien Document (x) in addition to holding such Lien for the benefitof itself and the other First Lien Claimholders as security for the First LienObligations, also hold and be deemed to have held such Lien for the benefit ofthe Second Lien Collateral Agent as security for the Second Lien Obligationssubject to the priorities set forth herein or (y) release such Lien.

 

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### (b)           Limitationon other Collateral for Second Lien Claimholders.  Until the date upon which the Discharge ofFirst Lien Obligations shall have occurred, (i) the Second Lien CollateralAgent agrees that, after the date hereof, neither the Second Lien CollateralAgent nor any Second Lien Claimholder shall acquire or hold any Lien on anyassets of the type contemplated by the definition of “Second Lien Collateral”of any Grantor securing any Second Lien Obligations which assets are not alsosubject to the senior priority Lien of the First Lien Collateral Agent underthe First Lien Collateral Documents, and (ii) each Grantor agrees not togrant any Lien on any assets of the type contemplated by the definition of “SecondLien Collateral”, or permit any of its Subsidiaries to grant a Lien on any suchassets, in favor of the Second Lien Collateral Agent or the Second LienClaimholders unless it, or such Subsidiary, has granted a similar Lien on suchassets in favor of the First Lien Collateral Agent or the First LienClaimholders.  If the Second LienCollateral Agent or any Second Lien Claimholder shall (nonetheless and inbreach hereof) acquire any Lien on any assets of the type contemplated by thedefinition of “Second Lien Collateral” of any Grantor or any of theirrespective Subsidiaries securing any Second Lien Obligations which assets arenot also subject to the first-priority Lien of the First Lien Collateral Agentunder the First Lien Collateral Documents, then the Second Lien CollateralAgent (or the relevant Second Lien Claimholder), shall, without the need forany further consent of any other Person and notwithstanding anything to thecontrary in any other Second Lien Document (x) in addition to holding suchLien for the benefit of itself and the other Second Lien Claimholders assecurity for the Second Lien Obligations, also hold and be deemed to have heldsuch Lien for the benefit of the First Lien Collateral Agent as security forthe First Lien Obligations or (y) release such Lien.

###  

SECTION 2.06               SimilarLiens and Agreements.  The partieshereto agree that it is their intention that the First Lien Collateral and theSecond Lien Collateral be identical.  Infurtherance of the foregoing and of Section 8.09, the partieshereto agree, subject to the other provisions of this Agreement:

 

#### (a)           upon request by the First LienCollateral Agent or the Second Lien Collateral Agent, to cooperate in goodfaith (and to direct their counsel to cooperate in good faith) from time totime in order to determine the specific items included in the First LienCollateral and the Second Lien Collateral and the steps taken to perfect theirrespective Liens thereon and the identity of the respective parties obligatedunder the First Lien Documents and the Second Lien Documents; and

####  

#### (b)           that the documents and agreementscreating or evidencing the Liens on the First Lien Collateral and the SecondLien Collateral shall be in all material respects the same forms of documentsother than with respect to the senior and subordinate nature of the securityinterests in the Collateral securing the respective First Lien Obligations andSecond Lien Obligations thereunder.

####  

In addition, to the extent any guaranty is entered into by any Grantorin respect of the Second Lien Obligations (whether or not the First LienCollateral Agent or First Lien Claimholders have consented thereto), a guarantyby 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 FirstLien Obligations and the Second Lien Obligations.  Furthermore, to the extent any guaranty isentered into by any Grantor in respect of the First Lien Obligations (whetheror not the Second 

 

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Lien Agent or the Second Lien Claimholders have consented thereto), aguaranty by such Person shall be entered into in respect of the Second LienObligations and, for all purposes hereunder, such Person shall be deemed aguarantor of the Second Lien Obligations and the First Lien Obligations.

 

# **ARTICLE IIIENFORCEMENT**

 

SECTION 3.01               Exerciseof Remedies.

 

### (a)           Solong as the Discharge of First Lien Obligations has not occurred, whether ornot any Insolvency or Liquidation Proceeding has been commenced by or againstthe Company or any other Grantor:

###  

###### (i)            the Second Lien Collateral Agent andthe Second Lien Claimholders:

######  

(A)          from the date hereof until theoccurrence of the Second Lien Enforcement Date (such period, the “StandstillPeriod”), 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 lockboxagreement, account control or collection agreement or similar agreement orarrangement to which the Second Lien Collateral Agent or any Second LienClaimholder is a party) or institute or commence (or join with any other Personin commencing) any enforcement, collection, execution, levy or foreclosureaction or proceeding (including, without limitation, any Insolvency orLiquidation Proceeding) with respect to any Lien held by it under the SecondLien Collateral Documents;

 

(B)           will not contest, protest or objectto any foreclosure proceeding or action brought by the First Lien CollateralAgent or any First Lien Claimholder or any other exercise by the First LienCollateral Agent or any First Lien Claimholder, of any rights and remediesrelating to the Collateral under the First Lien Collateral Documents,including, but not limited to, any motion by the First lien Collateral agent tosell the Collateral pursuant to Section 363 of the Bankruptcy Code, providedthat the respective interests of the Second Lien Claimholders attach to theproceeds thereof, subject to the relative priorities described in Article II;provided, however, that this Section 3.01(B) shallconstitute consent by the Second Lien Collateral Agent and the Second LienClaimholders pursuant to Section 363(f) of the Bankruptcy Code to theSection 363 sale of any or all of the Collateral; and

 

(C)           subject to the rights of the SecondLien Collateral Agent under clause (i)(A) above, will not object tothe forbearance by the First Lien Collateral Agent or the First LienClaimholders from bringing or 

 

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pursuing any foreclosureproceeding or action or any other exercise of any rights or remedies relatingto the Collateral; and

 

###### (ii)           subject to Section 5.01,until the Discharge of the First Lien Obligations, the First Lien CollateralAgent and the First Lien Claimholders shall have the exclusive right to enforcerights, exercise remedies (including set-off and the right to credit bid theirdebt) and make determinations regarding the release, disposition, orrestrictions with respect to the Collateral without any consultation with orthe consent of the Second Lien Collateral Agent or any Second Lien Claimholder;provided, that

######  

(A)          in any Insolvency or LiquidationProceeding commenced by or against the Company or any other Grantor, the SecondLien Collateral Agent may file a claim or statement of interest with respect tothe Second Lien Obligations;

 

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

 

(C)           the Second Lien Claimholders shall beentitled to file any responsive or defensive pleadings in opposition to anymotion, claim, adversary proceeding or other pleading made by any personobjecting to or otherwise seeking the disallowance of the claims of the SecondLien Claimholders, including, without limitation, any claims secured by theCollateral, if any, in each case in accordance with the terms of thisAgreement;

 

(D)          the Second Lien Claimholders shall beentitled to file any pleadings, objections, motions or agreements which assertrights or interests available to unsecured creditors of the Grantors arisingunder either the Debtor Relief Law or applicable non-bankruptcy law;

 

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

 

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

 

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

 

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Inexercising rights and remedies with respect to the Collateral, the First LienCollateral Agent and the First Lien Claimholders may enforce the provisions ofthe First Lien Documents and exercise remedies thereunder, all in such orderand in such manner as they may determine advisable in the exercise of theirsole discretion.  Such exercise andenforcement shall include the rights of an agent appointed by the First LienCollateral Agent and the First Lien Claimholders to sell or otherwise disposeof Collateral upon foreclosure, to incur expenses in connection with such saleor disposition, and to exercise all the rights and remedies of a securedcreditor under the UCC of any applicable jurisdiction and of a secured creditorunder Debtor Relief Laws of any applicable jurisdiction.

 

### (b)           TheSecond Lien Collateral Agent (on behalf of itself and the Second LienClaimholders) agrees that it will not take or receive any Collateral or anyproceeds of Collateral in connection with the exercise of any right or remedy(including set-off or recoupment) with respect to any Collateral, and that anyCollateral or proceeds taken or received by it will be paid over to the FirstLien Collateral Agent pursuant to Section 4.02, unless and untilthe Discharge of First Lien Obligations has occurred, except as expresslyprovided 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, exceptas expressly provided in the proviso in Section 3.01(a)(ii), thesole right of the Second Lien Collateral Agent and the Second Lien Claimholderswith respect to the Collateral is to hold a Lien on the Collateral pursuant tothe Second Lien Collateral Documents for the period and to the extent grantedtherein and to receive a share of the proceeds thereof, if any, after theDischarge of the First Lien Obligations has occurred in accordance with theterms of the Second Lien Documents and applicable law.

###  

### (c)           Subjectto the proviso in Section 3.01(a)(ii) and Section 6.01,(i) the Second Lien Collateral Agent (on behalf of itself and the SecondLien Claimholders) agrees that the Second Lien Collateral Agent and the SecondLien Claimholders will not take any action that would hinder, delay or impedeany exercise of remedies under the First Lien Collateral Documents, includingany sale, lease, exchange, transfer or other disposition of the Collateral,whether by foreclosure or otherwise, and (ii) the Second Lien CollateralAgent (on behalf of itself and the Second Lien Claimholders) hereby waives anyand all rights it or the Second Lien Claimholders may have as a junior liencreditor or otherwise to object to the manner or order in which the First LienCollateral Agent or the First Lien Claimholders seek to enforce the Liensgranted in any of the First Lien Collateral.

###  

### (d)           TheSecond Lien Collateral Agent hereby acknowledges and agrees that no covenant,agreement or restriction contained in the Second Lien Collateral Documentsshall be deemed to restrict in any way the rights and remedies of the FirstLien Collateral Agent or the First Lien Claimholders with respect to theCollateral as set forth in this Agreement and the First Lien CollateralDocuments.

###  

SECTION 3.02               ActionsUpon Breach.

 

### (a)           Ifany Second Lien Claimholder, contrary to this Agreement, commences orparticipates in any action or proceeding against the Company, any other Grantoror the Collateral, the Company or such Grantor, with the prior written consentof the First Lien Collateral Agent, may interpose as a defense or dilatory pleathe making of this Agreement, and 

 

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### the First Lien Collateral Agent may intervene and interpose suchdefense or plea in its name, in the name of the First Lien Claimholders or inthe name of the Company or such Grantor.

###  

### (b)           Shouldany Second Lien Claimholder, contrary to this Agreement, in any way take, orattempt or threaten to take, any action with respect to the Collateral(including, without limitation, any attempt to realize upon or enforce anyremedy with respect to this Agreement), or fail to take any action required bythis Agreement, the First Lien Collateral Agent (in its own name or in the nameof the Company) or the Company may obtain relief against such Second LienClaimholder by injunction, specific performance and/or other appropriateequitable relief, it being understood and agreed by the Second Lien CollateralAgent on behalf of each Second Lien Claimholder that (i) the First LienClaimholders’ damages from such actions may be difficult to ascertain and maybe irreparable, and (ii) the Second Lien Collateral Agent on behalf of eachSecond Lien Claimholder waives any defense that the Company, any other Grantorand/or the First Lien Claimholders cannot demonstrate damage or be made wholeby the awarding of damages.

###  

# **ARTICLE IVPAYMENTS**

 

SECTION 4.01               Applicationof Proceeds.  So long as theDischarge of First Lien Obligations has not occurred, any proceeds ofCollateral received in connection with the sale or other disposition of suchCollateral, or collection on such Collateral upon the exercise of remedies,shall be applied by the First Lien Collateral Agent to the First LienObligations in such order as specified in the relevant First LienDocuments.  Upon the Discharge of theFirst Lien Obligations, the First Lien Collateral Agent shall deliver to theSecond Lien Collateral Agent any proceeds of Collateral held by it in the sameform as received, with any necessary endorsements or as a court of competentjurisdiction may otherwise direct to be applied by the Second Lien CollateralAgent to the Second Lien Obligations in such order as specified in the relevantSecond Lien Documents.

 

SECTION 4.02               PaymentsOver.  So long as the Discharge ofFirst Lien Obligations has not occurred, any Collateral or proceeds thereof(together with assets or proceeds subject to Liens referred to in the finalsentence of Section 2.05(b)) received by the Second Lien CollateralAgent or any Second Lien Claimholders in connection with the exercise of anyright or remedy (including set-off) in respect of the Collateral shall besegregated and held in trust and forthwith paid over to the First LienCollateral Agent for the benefit of the First Lien Claimholders in the sameform as received, with any necessary endorsements or as a court of competentjurisdiction may otherwise direct.  TheFirst Lien Collateral Agent is hereby authorized to make any such endorsementsas agent for the Second Lien Collateral Agent or any such Second LienClaimholders.  This authorization iscoupled with an interest and is irrevocable until such time as this Agreementis terminated in accordance with its terms.

 

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# ** **

# **ARTICLE VOTHER AGREEMENTS**

# ** **

SECTION 5.01               Releases.

 

### (a)           If, in connection with:

###  

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

######  

###### (ii)           any sale, exchange, transfer or otherdisposition of any Collateral permitted under the terms of the First LienDocuments (whether or not an event of default thereunder, and as definedtherein, has occurred and is continuing) (a “Disposition”);

######  

the First Lien Collateral Agent (on behalf of itself or any of theFirst Lien Claimholders) releases any of its Liens on any part of theCollateral other than in connection with the Discharge of the First LienObligations, then the Liens, if any, of the Second Lien Collateral Agent, foritself or for the benefit of the Second Lien Claimholders, on such Collateralshall be automatically, unconditionally and simultaneously released (the “SecondLien Release”) and the Second Lien Collateral Agent (on behalf of itself orany such Second Lien Claimholders) shall promptly execute and deliver to theFirst Lien Collateral Agent or such Grantor such termination statements,releases and other documents as the First Lien Collateral Agent or such Grantormay request to effectively confirm such release.

 

### (b)           Untilthe Discharge of First Lien Obligations occurs, the Second Lien CollateralAgent (on behalf of itself and the Second Lien Claimholders) hereby irrevocablyconstitutes and appoints the First Lien Collateral Agent and any officer oragent of the First Lien Collateral Agent, with full power of substitution, asits true and lawful attorney-in-fact with full irrevocable power and authorityin the place and stead of the Second Lien Collateral Agent or such holder or inthe First Lien Collateral Agent’s own name, from time to time in the First LienCollateral Agent’s discretion, for the purpose of carrying out the terms ofthis Section 5.01, to take any and all appropriate action and toexecute any and all documents and instruments which may be necessary toaccomplish the purposes of this Section 5.01, including anyendorsements or other instruments of transfer or release.  This authorization is coupled with aninterest and is irrevocable until such time as this Agreement is terminated inaccordance with its terms.

###  

### (c)           Untilthe Discharge of First Lien Obligations occurs, to the extent that the FirstLien Collateral Agent (on behalf of itself and the First Lien Claimholders) (i) hasreleased any Lien on Collateral and any such Liens are later reinstated or (ii) obtainsany new Liens then the Second Lien Collateral Agent (on behalf of itself andthe Second Lien Claimholders) shall be granted a Lien on any such Collateralsubject to the priorities set forth in Article II.

###  

SECTION 5.02               Insurance.  The First Lien Collateral Agent and theSecond Lien Collateral Agent shall be named as additional insureds and theControl Agent shall be named as loss payee (on behalf of the First LienCollateral Agent, the First Lien Claimholders, the Second Lien Collateral Agentand the Second Lien Claimholders) under any insurance 

 

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policies maintained fromtime to time by any Grantor.  Until thedate upon which the Discharge of First Lien Obligations shall have occurred, asbetween the First Lien Collateral Agent and the First Lien Claimholders, on theone hand, and the Second Lien Collateral Agent and the Second Lien Claimholderson the other, the First Lien Collateral Agent and the First Lien Claimholdersshall have the sole and exclusive right (a) to adjust or settle anyinsurance policy or claim covering any Collateral in the event of any lossthereunder and (b) to approve any award granted in any condemnation orsimilar proceeding affecting any Collateral. Until the date upon which the Discharge of First Lien Obligations shallhave occurred, all proceeds of any such policy and any such award in respect ofany Collateral that are payable to the First Lien Collateral Agent and theSecond Lien Collateral Agent shall be paid to the First Lien Collateral Agentfor the benefit of the First Lien Claimholders to the extent required under theFirst Lien Documents and thereafter to the Second Lien Collateral Agent for thebenefit of the Second Lien Claimholders to the extent required under theapplicable Second Lien Documents and then to the owner of the subject propertyor as a court of competent jurisdiction may otherwise direct.  If the Second Lien Collateral Agent or anySecond Lien Claimholder shall, at any time, receive any proceeds of any suchinsurance policy or any such award in contravention of this Agreement, it shallpay such proceeds over to the First Lien Collateral Agent in accordance withthe terms of Section 4.02.

 

SECTION 5.03               Amendmentsto First Lien Documents and Second Lien Documents.

 

### (a)           Untilthe date upon which the Discharge of First Lien Obligations shall haveoccurred, without the prior written consent of the First Lien Collateral Agent,no Second Lien Collateral Document may be amended, supplemented or otherwisemodified or entered into to the extent such amendment, supplement ormodification, or the terms of any new Second Lien Collateral Document wouldcontravene any of the terms of this Agreement. The Second Lien Collateral Agent agrees that the Second Lien SecurityAgreement shall include the following language or language substantiallysimilar:

###  

“Notwithstandinganything contained herein to the contrary, the lien and security interest grantedto the Trustee, for the benefit of the holders of the 2014 Notes, pursuantto this Agreement, and the exercise of any right or remedy by the Trustee, forthe benefit of the holders of the 2014 Notes, under this Agreement, are subjectto the provisions of the Intercreditor Agreement, dated as of July 29,2009 as the same may be amended, restated, supplemented, modified or replacedfrom time to time (the ‘Intercreditor Agreement’) by and among RoyalBank of Canada, as First Lien Collateral Agent, U.S. Bank National Association,as Second Lien Collateral Agent, Royal Bank of Canada as Control Agent and theGrantors (as defined therein) from time to time a party thereto.  In the event of any conflict between theterms of the Intercreditor Agreement and this Agreement, the terms of theIntercreditor Agreement shall govern and control.”

 

In the event of aRefinancing of the First Lien Obligations not prohibited under the Indenture,the Control Agent and the Second Lien Collateral Agent agree to enter into areplacement or amendment of this Agreement to maintain the lien subordination,intercreditor and other provisions set forth herein.  In the event of a Refinancing of the SecondLien Obligations permitted under the Credit Agreement and the Indenture, theFirst Lien Collateral Agent agrees 

 

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to enter into areplacement or amendment of this Agreement to maintain the lien subordination,intercreditor and other provisions set forth herein.

 

### (b)           Untilthe date upon which the Discharge of First Lien Obligations shall haveoccurred, in the event the First Lien Collateral Agent or the First LienClaimholders enter into any amendment, waiver or consent in respect of any ofthe First Lien Collateral Documents for the purpose of adding to, or deletingfrom, or waiving or consenting to any departures from any provisions of anyFirst Lien Collateral Document or changing in any manner the rights of theFirst Lien Collateral Agent, the First Lien Claimholders, or the Grantors thereunder,then such amendment, waiver or consent shall automatically apply in acomparable manner to any comparable provision of the Second Lien CollateralDocuments (which, for the avoidance of doubt, shall not include the NoteCollateral Documents (as defined in the Shared Collateral Agreement), theIndenture or the 2014 Notes) without the consent of the Second Lien CollateralAgent or the Second Lien Claimholders and without any action by the Second LienCollateral Agent or any Grantor; provided, however, (i) thatno such amendment, waiver or consent shall be effective to (A) release anyLien of the Second Lien Collateral Documents, (B) remove assets subject tothe Lien of the Second Lien Collateral Documents, (C) adversely affect theperfection or priority of any such Lien, except, in each case, to the extentthat a release of, or adverse effect on the perfection or priority of, suchLien is permitted by Section 5.01 or Article VI, (D) reducethe principal of, or interest or other amounts payable on, any amount payableunder the Indenture or any Second Lien Document, (E) postpone any datefixed for any payment of principal of, or interest or other amounts payable on,any amounts payable under the Indenture or any Second Lien Document, (F) permitany Liens on the Collateral not permitted under the Second Lien Documents or Article VI,or (G) impose duties on the Second Lien Collateral Agent, in each casewithout the consent of the Second Lien Collateral Agent and (ii) notice ofsuch amendment, waiver or consent shall have been given to the Second LienCollateral Agent no later than 10 days after its effectiveness (providedthat the failure to give such notice shall not affect the effectiveness orvalidity thereof) provided further that this paragraph is intended solely toset forth provisions by which the Second Lien Collateral Documents shall beautomatically affected by amendments, waivers and consents given by the FirstLien Collateral Agent and First Lien Claimholders under the Credit Agreementand the First Lien Collateral Documents and is not intended to impose anyliability on the First Lien Collateral Agent or First Lien Claimholders.

###  

SECTION 5.04               RightsAs Unsecured Creditors.  The SecondLien Collateral Agent and the Second Lien Claimholders may exercise rights andremedies as unsecured creditors against any Grantor in accordance with theterms of the Second Lien Documents and applicable law.  Except as otherwise set forth in Section 2.01,nothing in this Agreement shall prohibit the receipt by the Second LienCollateral Agent or any Second Lien Claimholders of the required payments ofinterest and principal so long as such receipt is not the direct or indirectresult of the exercise by the Second Lien Collateral Agent or any Second LienClaimholders of rights or remedies as a secured creditor (including set-off orrecoupment) or enforcement of any Lien created under the Second Lien CollateralDocuments held by any of them.  Nothingin this Agreement impairs or otherwise adversely affects any rights or remediesthe First Lien Collateral Agent or the First Lien Claimholders may have withrespect to the Collateral, including, without limitation, rights under Section 4.02.  In the event that any Second Lien Claimholderbecomes a judgment Lien creditor as a result of its enforcement of its rightsas an unsecured creditor, such judgment Lien shall be subject to the terms ofthis Agreement for all purposes (including in 

 

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relation to the Lienssecuring the First Lien Obligations) to the same extent as all other Lienssecuring the Second Lien Obligations (created pursuant to the Second LienCollateral Documents) subject to this Agreement.

 

SECTION 5.05               ControlAgent for Perfection.

 

### (a)           TheFirst Lien Collateral Agent (on behalf of itself and the First LienClaimholders) and the Second Lien Collateral Agent (on behalf of itself and theSecond Lien Claimholders) each hereby appoint Royal Bank of Canada, as itscollateral agent (in such capacity, together with any successor in suchcapacity appointed by the First Lien Collateral Agent and the Second LienCollateral Agent, the “Control Agent”) for the limited purpose of actingas the agent on behalf of the First Lien Collateral Agent (on behalf of itselfand the First Lien Claimholders) and the Second Lien Collateral Agent (onbehalf of itself and the Second Lien Claimholders) with respect to the ControlCollateral for the purposes of perfecting the Liens of such parties on theControl Collateral.  The Control Agent acceptssuch appointment and agrees to hold the Control Collateral in its possession orcontrol (or in the possession or control of its agents or bailees) as ControlAgent for the benefit of the First Lien Collateral Agent (on behalf of itselfand the First Lien Claimholders) and the Second Lien Collateral Agent (onbehalf of itself and the Second Lien Claimholders) and any permitted assigneeof any thereof solely for the purpose of perfecting the security interestgranted to such parties in such Control Collateral, subject to the terms andconditions of this Section 5.05.

###  

### (b)           TheControl Agent, the First Lien Collateral Agent (on behalf of itself and theFirst Lien Claimholders), and the Second Lien Collateral Agent (on behalf ofitself and the Second Lien Claimholders) each hereby agrees that the First LienCollateral Agent shall have the sole and exclusive right and authority to giveinstructions to, and otherwise direct, the Control Agent in respect of theControl Collateral or any control agreement with respect to any ControlledAccounts until the earlier of (i) the date upon which the Discharge ofFirst Lien Obligations shall have occurred and (ii) the Second LienEnforcement Date, and neither the Second Lien Collateral Agent nor any SecondLien Claimholder will impede, hinder, delay or interfere with the exercise ofsuch rights by the First Lien Collateral Agent in any respect.  The Grantors hereby jointly and severallyagree to pay, reimburse, indemnify and hold harmless the Control Agent to thesame extent and on the same terms that the Grantors are required to do so forthe First Lien Collateral Agent in accordance with the Credit Agreement.

###  

### (c)           Theprovisions of Article IX of the Credit Agreement and Article VII ofthe Indenture shall inure to the benefit of the Control Agent in respect ofthis Agreement, the First Lien Collateral Documents and the Second LienCollateral Documents and shall be binding upon all Grantors, all First LienClaimholders and all Second Lien Claimholders and upon the parties hereto insuch respect.  In furtherance and not inderogation of the rights, privileges and immunities of the Control Agenttherein set forth:

###  

###### (i)            The Control Agent is authorized totake all such actions as are provided to be taken by it as Control Agenthereunder, under any First Lien Collateral Document, under any Second LienCollateral Document or as instructed by the First Lien Collateral Agent or theSecond Lien Collateral Agent as provided herein, in each case together with allother actions reasonably 

 

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###### incidental thereto.  As to any matters not expressly provided forherein (including, without limitation, the timing and methods of realizationupon the Collateral) or in one or more of the First Lien Collateral Documentsor Second Lien Collateral Documents, the Control Agent shall act or refrainfrom acting in accordance with written instructions from the First LienCollateral Agent or the Second Lien Collateral Agent, as applicable, or, in theabsence of such instructions or provisions, in accordance with its reasonablediscretion.

######  

###### (ii)           The Control Agent shall not beresponsible for the existence, genuineness or value of any of the Collateral orfor the validity, perfection, priority or enforceability of any Lien createdunder and First Lien Collateral Document or Second Lien Collateral Document inany of the Collateral, whether impaired by operation of law or by reason of anyaction or omission to act on its part hereunder unless such action or omissionconstitutes gross negligence or willful misconduct.  The Control Agent shall not have a duty toascertain or inquire as to the performance or observance of any of the terms ofthis Agreement, any First Lien Collateral Document or any Second Lien CollateralDocument by any Grantor.  This Agreementshall not subject the Control Agent to any obligation or liability except asexpressly set forth herein.  Inparticular, the Control Agent shall have no duty to investigate whether theobligations of any Grantor to the First Lien Collateral Agent or the SecondLien Collateral Agent or any other First Lien Claimholder or Second LienClaimholder are in default or whether the First Lien Collateral Agent or theSecond Lien Collateral Agent is entitled under the First Lien CollateralDocuments or the Second Lien Collateral Documents, as applicable, or otherwiseto give any instructions or notice of exclusive control.  The Control Agent is fully entitled to relyupon such instructions as it believes in good faith to have originated from theFirst Lien Collateral Agent or the Second Lien Collateral Agent, as applicable.

######  

### (d)           Exceptas set forth below, the Control Agent shall have no obligation whatsoever tothe First Lien Collateral Agent, the Second Lien Collateral Agent or any FirstLien Claimholder or any Second Lien Claimholder including, without limitation,any obligation to assure that the Control Collateral is genuine or owned by anyGrantor or one of their respective Subsidiaries or to preserve rights or benefitsof any Person except as expressly set forth in this Section 5.05.  In acting on behalf of the Second LienCollateral Agent and the Second Lien Claimholders and the First Lien CollateralAgent and the First Lien Claimholders, the duties or responsibilities of theControl Agent under this Section 5.05 shall be limited solely to (i) obtaining“control” under the UCC over each Controlled Account as contemplated by theFirst Lien Collateral Documents and the Second Lien Collateral Documents inaccordance with Section 5.05(a), and (ii) delivering suchcollateral (or otherwise allowing the Second Lien Collateral Agent to obtaincontrol of Control Collateral) as set forth in Section 5.05(f) and5.05(g).  The rights of the SecondLien Collateral Agent with respect to the Collateral shall at all times besubject to the terms of this Agreement and to the First Lien Collateral Agent’srights under the First Lien Documents.

 

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### (e)           Neitherthe Control Agent nor the First Lien Collateral Agent shall have by reason ofthe Second Lien Documents or this Agreement or any other document a fiduciaryrelationship in respect of the Second Lien Collateral Agent or any Second LienClaimholder.

###  

### (f)            Uponthe Discharge of First Lien Obligations (other than in connection with aRefinancing of the First Lien Obligations), the Control Agent shall deliver tothe Second Lien Collateral Agent the Control Collateral together with anynecessary endorsements (or otherwise allow the Second Lien Collateral Agent toobtain control of such Control Collateral) or as a court of competentjurisdiction may otherwise direct and the Second Lien Collateral Agent shallaccept and succeed to the role of the Control Agent as the agent for perfectionon the Control Collateral.

###  

### (g)           TheControl Agent shall have an unfettered right to resign as Control Agent uponthirty (30) days notice to the First Lien Collateral Agent and the Second LienCollateral Agent.  Upon the effectivedate of such resignation, the Control Agent shall deliver the ControlCollateral to the successor Control Agent (or otherwise allow the successorControl Agent to obtain control of such Control Collateral).  If upon the effective date of such resignationno successor Control Agent has been appointed by the First Lien CollateralAgent and the Second Lien Collateral Agent, the Control Agent shall deliver tothe First Lien Collateral Agent the Control Collateral together with anynecessary endorsements (or otherwise allow the First Lien Collateral Agent toobtain control of such Control Collateral) or as a court of competentjurisdiction may otherwise direct and the First Lien Collateral Agent shallaccept and succeed to the role of the Control Agent as the agent for perfectionon the Control Collateral.

###  

SECTION 5.06               WhenDischarge of First Lien Obligations Deemed to Not Have Occurred.  If at any time after the Discharge of FirstLien Obligations has occurred, the Company thereafter enters into anyRefinancing of any First Lien Document evidencing a First Lien Obligation,which Refinancing is permitted by the Indenture, then such Discharge of FirstLien Obligations shall automatically be deemed not to have occurred for allpurposes of this Agreement (other than with respect to any actions taken priorto the date of such designation as a result of the occurrence of such firstDischarge of First Lien Obligations), and the obligations under suchRefinancing First Lien Document shall automatically be treated as First LienObligations for all purposes of this Agreement, including for purposes of theLien priorities and rights in respect of Collateral set forth herein, and theFirst Lien Collateral Agent under such First Lien Documents shall be a FirstLien Collateral Agent for all purposes of this Agreement.  Upon receipt of a notice stating that theCompany has entered into a new First Lien Document (which notice shall includethe identity of the new collateral agent, such agent, the “New Agent”),the Second Lien Collateral Agent shall promptly (a) enter into suchdocuments and agreements (including amendments or supplements to this Agreementas the Company or such New Agent shall reasonably request in order to provideto the New Agent the rights contemplated hereby, in each case consistent in allmaterial respects with the terms of this Agreement and (b) deliver to theNew Agent any Control Collateral held by it together with any necessaryendorsements (or otherwise allow the New Agent to obtain control of the ControlCollateral).  If the new First Lien Obligationsunder the new First Lien Documents are secured by assets of the Grantors of thetype constituting Collateral that do not also secure the Second LienObligations, then the Second Lien Obligations shall be secured at such time bya Lien on such assets to the same extent provided in the Second Lien CollateralDocuments.

 

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# **ARTICLE VIINSOLVENCY OR LIQUIDATION PROCEEDINGS**

 

SECTION 6.01               Financeand Sale Issues.  Until the Dischargeof First Lien Obligations has occurred, if the Company or any other Grantorshall be subject to any Insolvency or Liquidation Proceeding and the First LienCollateral Agent shall desire to permit the use of all or a portion of theCollateral as cash collateral or to permit the Company or any other Grantor toobtain financing, whether from the First Lien Claimholders or any other entityunder Section 363 or Section 364 of the Bankruptcy Code or anysimilar Debtor Relief Law, which financing may include a Refinancing of theFirst Lien Obligations (provided that (i) such financing or Refinancingshall be secured by all or any portion of the Collateral (including assets thatbut for the application of Section 552 of the Bankruptcy Code would beCollateral) and (ii) any such financing, whether or not pursuant to Section 363or Section 364 of the Bankruptcy Code or any similar Debtor Relief Law,shall not be secured by any assets of any Grantor other than the Collateral)(each, a “DIP Financing”), then the Second Lien Collateral Agent (onbehalf of itself and the Second Lien Claimholders) agrees that (a) it willnot in respect of the Collateral (i) raise any objection to, or otherwisecontest or interfere with, such use of cash collateral or DIP Financing, (ii) supportany other Person objecting to, such sale, use, or lease of cash collateral orDIP Financing or (iii) request any form of adequate protection or anyother relief in connection therewith with respect to the Collateral (except asagreed by the First Lien Collateral Agent or to the extent expressly permittedby Section 6.03) and, to the extent the Liens in respect of theCollateral securing the First Lien Obligations are subordinated to or paripassu with such DIP Financing, the Second Lien Collateral Agent willsubordinate its Liens in the Collateral to (A) the Liens securing such DIPFinancing (and all obligations relating thereto), (B) any adequateprotection provided to the First Lien Claimholders and (C) any “carve-out”for professional and United States Trustee fees, claims of reclamationcreditors or holders of claims under Section 503(b) of the BankruptcyCode agreed to by the First Lien Collateral Agent; and (b) notice receivedtwo (2) calendar days prior to the entry of an order approving such usageof cash collateral or approving such DIP Financing shall be adequate notice; providedthat the foregoing shall not prohibit the Second Lien Collateral Agent or theSecond Lien Claimholders from objecting solely to any provisions in any DIPFinancing relating to, describing or requiring any provision or content of aplan of reorganization other than provisions solely requiring that the DIPFinancing be paid in full in cash.  TheSecond Lien Collateral Agent (on behalf of itself and the Second LienClaimholders) agrees that it will raise no objection to or oppose a sale orother disposition of any Collateral (and any post-petition assets subject toadequate protection liens in favor of the First Lien Collateral Agent) free andclear of its Liens or other claims under Section 363 of the BankruptcyCode if the Requisite Claimholders under the Credit Agreement have consented tosuch sale or disposition of such assets so long as the respective interests ofthe Second Lien Claimholders attach to the proceeds thereof, subject to the termsof this Agreement.  If requested by theFirst Lien Collateral Agent in connection therewith, the Second Lien CollateralAgent shall affirmatively consent to such a sale or disposition.

 

SECTION 6.02               Relieffrom the Automatic Stay.  Until theDischarge of First Lien Obligations has occurred, the Second Lien CollateralAgent (on behalf of itself and the Second Lien Claimholders) agrees that noneof them shall (a) seek relief from the automatic stay or any other stay inany Insolvency or Liquidation Proceeding in respect of the Collateral, withoutthe prior written consent of the First Lien Collateral Agent and RequisiteClaimholders 

 

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under the First LienCollateral Agreement, or (b) oppose any request by the First LienCollateral Agent or any First Lien Claimholder to seek relief from theautomatic stay or any other stay in any Insolvency or Liquidation Proceeding inrespect of the Collateral.

 

SECTION 6.03               AdequateProtection.

 

### (a)           TheSecond Lien Collateral Agent (on behalf of itself and the Second LienClaimholders) agrees that none of them shall contest (or support any otherperson contesting) (i) any request by the First Lien Collateral Agent orthe First Lien Claimholders for adequate protection in respect of theCollateral or (ii) any objection by the First Lien Collateral Agent or theFirst Lien Claimholders to any motion, relief, action or proceeding based onthe First Lien Collateral Agent or the First Lien Claimholders claiming a lackof adequate protection in respect of the Collateral.  In any Insolvency or Liquidation Proceeding,the Second Lien Collateral Agent (on behalf of itself and the Second LienClaimholders) may seek adequate protection in respect of the Second LienObligations and the Collateral, subject to the provisions of this Agreement,only if (x) the First Lien Claimholders (or any subset thereof) aregranted adequate protection in the form of additional collateral includingreplacement liens on post-petition collateral, and (y) such additionalprotection is in the form of a Lien on such additional collateral, which Lien,if granted, will be subordinated to the adequate protection Liens securing theFirst Lien Obligations and the Liens securing any DIP Financing (and allobligations relating thereto) on the same basis as the other Liens securing theSecond Lien Obligations are so subordinated to the Liens securing the FirstLien Obligations under this Agreement and the Liens securing any such DIPFinancing.  In the event the Second LienCollateral Agent (on behalf of itself or any of the Second Lien Claimholders)seeks or requests adequate protection in respect of Second Lien Obligations andthe Collateral and such adequate protection is granted in the form ofadditional collateral, then the Second Lien Collateral Agent (on behalf ofitself and the Second Lien Claimholders) agrees that the First Lien CollateralAgent shall also be granted a Lien on such additional collateral as securityfor the First Lien Obligations and for any DIP Financing and that any Lien onsuch additional collateral securing the Second Lien Obligations shall besubordinated to the Liens on such collateral securing the First LienObligations and any DIP Financing (and all obligations relating thereto)and to any other Liens granted to the First Lien Claimholders as adequateprotection on the same basis as the other Liens securing the Second LienObligations are so subordinated to the Liens securing the First LienObligations under this Agreement and the Liens securing DIP Financing.

###  

### (b)           Similarly,if the First Lien Claimholders (or any subset thereof) are granted adequateprotection in the form of a superpriority claim, then the Second LienCollateral Agent (on behalf of itself or any of the Second Lien Claimholders)may seek or request a superpriority claim, which superpriority claim will bejunior in all respects to the superpriority claim granted to the First LienCollateral Agent and the First Lien Claimholders, and, in the event that theSecond Lien Collateral Agent (on behalf of itself or any of the Second LienClaimholders) seeks or requests adequate protection in respect of Second LienObligations and such adequate protection is granted in the form of asuperpriority claim, then the Second Lien Collateral Agent (on behalf of itselfand the Second Lien Claimholders) agrees that the First Lien Collateral Agentand the providers of any DIP Financing also shall be granted a superpriorityclaim, which superpriority claim will be senior in all respects to the superpriorityclaim granted to the Second Lien Collateral Agent and the Second LienClaimholders.

 

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SECTION 6.04               NoWaiver.  Nothing contained hereinshall prohibit or in any way limit the First Lien Collateral Agent or any FirstLien Claimholder from objecting in any Insolvency or Liquidation Proceeding orotherwise to any action taken by the Second Lien Collateral Agent or any of theSecond Lien Claimholders in respect of the Collateral, including the seeking bythe Second Lien Collateral Agent or any Second Lien Claimholders of adequateprotection in respect of the Collateral or the asserting by the Second LienCollateral Agent or any Second Lien Claimholders of any of its rights andremedies under the Second Lien Documents or otherwise; provided, however, thatthis Section 6.04 shall not limit the rights of the Second LienClaimholders under the proviso in Section 3.01(a)(ii) or underSection 6.03 or Section 6.08.

 

SECTION 6.05               AvoidanceIssues.  If any First LienClaimholder is required in any Insolvency or Liquidation Proceeding, orotherwise, to turn over or otherwise pay to the estate of the Company or anyother Grantor any amount in respect of a First Lien Obligation (a “Recovery”),then such First Lien Claimholders shall be entitled to a reinstatement of FirstLien Obligations with respect to all such recovered amounts.  If this Agreement shall have been terminatedprior to such Recovery, this Agreement shall be reinstated in full force andeffect, and such prior termination shall not diminish, release, discharge,impair or otherwise affect the obligations of the parties hereto from such dateof reinstatement.  Collateral or proceedsthereof received by the Second Lien Collateral Agent or any Second Lien Claimholderafter a Discharge of First Lien Obligations and prior to the reinstatement ofsuch First Lien Obligations shall be delivered to the First Lien CollateralAgent upon such reinstatement in accordance with Section 4.02.

 

SECTION 6.06               SeparateGrants of Security and Separate Classification.  Each of the Grantors, the First LienClaimholders and the Second Lien Claimholders acknowledges and agrees that (a) thegrants of Liens pursuant to the First Lien Collateral Documents and the SecondLien Collateral Documents constitute two separate and distinct grants of Liensand (b) because of, among other things, their differing rights in theCollateral, the Second Lien Obligations are fundamentally different from theFirst Lien Obligations and must be separately classified in any plan ofreorganization proposed or adopted in an Insolvency or Liquidation Proceeding.

 

SECTION 6.07               ReorganizationSecurities.  If, in any Insolvency orLiquidation Proceeding, debt obligations of the reorganized debtor secured byLiens upon any property of the reorganized debtor of the type contemplated bythe definition of “Collateral” are distributed pursuant to a plan ofreorganization or similar dispositive restructuring plan, both on account ofFirst Lien Obligations and on account of Second Lien Obligations, then, to theextent the debt obligations distributed on account of the First LienObligations and on account of the Second Lien Obligations are secured by Liensupon the same property of the type contemplated by the definition of “Collateral”,the provisions of this Agreement will survive the distribution of such debtobligations pursuant to such plan and will apply with like effect to the Lienssecuring such debt obligations.

 

SECTION 6.08               Post-PetitionClaims.

 

### (a)           Neitherthe Second Lien Collateral Agent nor any other Second Lien Claimholder shalloppose or seek to challenge any claim by the First Lien Collateral Agent or 

 

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### any First Lien Claimholder for allowance in any Insolvency orLiquidation Proceeding of First Lien Obligations consisting of post-petitioninterest, fees, costs, charges or expenses to the extent of the value of theFirst Lien Collateral Agent’s Lien on the Collateral held for the benefit ofthe First Lien Claimholders, without regard to the existence of the Lien of theSecond Lien Collateral Agent on behalf of the Second Lien Claimholders on theCollateral.

###  

### (b)           Neitherthe First Lien Collateral Agent nor any other First Lien Claimholder shalloppose or seek to challenge any claim by the Second Lien Collateral Agent orany Second Lien Claimholder for allowance in any Insolvency or LiquidationProceeding of Second Lien Obligations consisting of post-petition interest,fees, costs, charges or expenses to the extent of the value of the Lien of theSecond Lien Collateral Agent on behalf of the Second Lien Claimholders on theCollateral (after taking into account the First Lien Obligations).

###  

SECTION 6.09               Waiver.  The Second Lien Collateral Agent (on behalfof itself and the Second Lien Claimholders) waives any claim it or they mayhereafter have against the First Lien Collateral Agent or any First LienClaimholder arising out of the election of the First Lien Collateral Agent orany First Lien Claimholder of the application of Section 1111(b)(2) ofthe Bankruptcy Code in respect of the Collateral, or out of any cash collateralor financing arrangement or out of any grant of a security interest inconnection with the Collateral in any Insolvency or Liquidation Proceeding.

 

SECTION 6.10               ExpenseClaims.  Neither the Second LienCollateral Agent nor any Second Lien Claimholder will (a) contest thepayment of fees, expenses or other amounts to the First Lien Collateral Agentor any First Lien Claimholder under Section 506(b) of the BankruptcyCode or otherwise to the extent provided for in the First Lien Credit Agreementor (b) assert or enforce, at any time prior to the Discharge of First LienObligations, any claim under Section 506(c) of the Bankruptcy Codesenior to or on parity with the First Lien Obligations for costs or expenses ofpreserving or disposing of any Collateral.

 

SECTION 6.11               OtherMatters.  To the extent that theSecond Lien Collateral Agent or any Second Lien Claimholder has or acquiresrights under Section 361, Section 363 or Section 364 of theBankruptcy Code with respect to any of the Collateral, the Second LienCollateral Agent (on behalf of itself and the Second Lien Claimholders) agrees,unless the Discharge of the First Lien Obligations has occurred, not to assertany of such rights without the prior written consent of the First LienCollateral Agent; provided that if requested by the First LienCollateral Agent, the Second Lien Collateral Agent shall timely exercise suchrights in the manner requested by the First Lien Collateral Agent, includingany rights to payments in respect of such rights.

 

SECTION 6.12               Effectivenessin Insolvency or Liquidation Proceedings. This Agreement, which the parties hereto expressly acknowledge is a “subordinationagreement” under Section 510(a) of the Bankruptcy Code, shall beeffective before, during and after the commencement of an Insolvency orLiquidation Proceeding.  All referencesin this Agreement to any Grantor shall include such Person as a debtor-in-possessionand any receiver or trustee for such Person in any Insolvency or LiquidationProceeding.

 

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SECTION 6.13               Limitationof Applicability.  Notwithstandinganything to the contrary in this Agreement, Article VI hereof shallapply only with respect to the Collateral and shall not in any way affect therights of any of the Collateral Agent (as defined in the Shared CollateralAgreement), the Note Trustee (as defined in the Shared Collateral Agreement) orthe holders of the 2014 Notes in their respective capacity as an unsecuredcreditor or as a result of the Liens held by any of them on other assets of theCompany and the Guarantors not constituting Collateral.

 

# **ARTICLE VIIRELIANCE; WAIVERS; ETC.**

 

SECTION 7.01               Non-Reliance.

 

### (a)           Theconsent by the First Lien Claimholders to the execution and delivery of theSecond Lien Documents and the grant to the Second Lien Collateral Agent onbehalf of the Second Lien Claimholders of a Lien on the Collateral and allloans and other extensions of credit made or deemed made on and after the datehereof by the First Lien Claimholders to the Grantors shall be deemed to havebeen given and made in reliance upon this Agreement.

###  

### (b)           Theconsent by the Second Lien Claimholders to the execution and delivery of theFirst Lien Documents and the grant to the First Lien Collateral Agent on behalfof the First Lien Claimholders of a Lien on the Collateral and all extensionsof credit made or deemed made on and after the date hereof by the Second LienClaimholders to the Grantors shall be deemed to have been given and made inreliance upon this Agreement.

###  

SECTION 7.02               NoWarranties or Liability.

 

### (a)           TheFirst Lien Collateral Agent (on behalf of itself and the First LienClaimholders) acknowledges and agrees that each of the Second Lien CollateralAgent and the Second Lien Claimholders have made no express or impliedrepresentation or warranty, including with respect to the execution, validity,legality, completeness, collectibility or enforceability of any of the SecondLien Documents, the ownership of any Collateral or the perfection or priorityof any Liens thereon.  The Second LienClaimholders will be entitled to manage and supervise their respectiveextensions of credit under the Second Lien Documents in accordance with law andas they may otherwise, in their sole discretion, deem appropriate.

###  

### (b)           TheSecond Lien Collateral Agent (on behalf of itself and the Second LienClaimholders), acknowledges and agrees that the First Lien Collateral Agent andthe First Lien Claimholders have made no express or implied representation orwarranty, including with respect to the execution, validity, legality,completeness, collectibility or enforceability of any of the First LienDocuments, the ownership of any Collateral or the perfection or priority of anyLiens thereon.  The First LienClaimholders will be entitled to manage and supervise their respective loansand extensions of credit under their respective First Lien Documents inaccordance with law and as they may otherwise, in their sole discretion, deemappropriate.

###  

### (c)           TheSecond Lien Collateral Agent and the Second Lien Claimholders shall have noduty 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 haveno duty to the Second 

 

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### Lien Collateral Agent or any of the Second Lien Claimholders, to act orrefrain from acting in a manner which allows, or results in, the occurrence orcontinuance of an event of default or default under any agreements with theCompany or any other Grantor (including the First Lien Documents and the SecondLien Documents), regardless of any knowledge thereof which they may have or becharged with.

###  

### (d)           TheSecond Lien Collateral Agent (on behalf of itself and the Second LienClaimholders) hereby waives all claims against any First Lien Claimholder andthe First Lien Collateral Agent, arising out of any and all actions which theFirst Lien Claimholders or the First Lien Collateral Agent may take or permitor omit to take with respect to the foreclosure upon, or sale, liquidation orother disposition of, any Collateral. The First Lien Collateral Agent (on behalf of itself and the First LienClaimholders) agrees that the Second Lien Claimholders and the Second LienCollateral Agent have no duty to them in respect of the maintenance orpreservation of the Collateral, the Second Lien Obligations or otherwise.  The Second Lien Collateral Agent (on behalfof itself and the Second Lien Claimholders) agrees that the First Lien Claimholdersand the First Lien Collateral Agent have no duty to them in respect of themaintenance or preservation of the Collateral, the First Lien Obligations orotherwise.

###  

### (e)           TheSecond Lien Collateral Agent (on behalf of itself and the Second LienClaimholders) agrees not to assert and hereby waives, to the fullest extentpermitted by law, any right to demand, request, plead or otherwise assert orotherwise claim the benefit of, any marshalling, appraisal, valuation or othersimilar right that may otherwise be available under applicable law with respectto the Collateral or any other similar rights a junior secured creditor mayhave under applicable law.

###  

SECTION 7.03               ObligationsUnconditional.  All rights,interests, agreements and obligations of the First Lien Collateral Agent andthe First Lien Claimholders and the Second Lien Collateral Agent and the SecondLien Claimholders, respectively, hereunder shall remain in full force andeffect irrespective of:

 

#### (a)           any lack of validity orenforceability of any First Lien Documents or any Second Lien Documents or anysetting aside or avoidance of any Lien on the Collateral;

####  

#### (b)           except as otherwise set forth in thisAgreement, any change in the time, manner or place of payment of, or in anyother terms of, all or any of the First Lien Obligations or Second LienObligations, or any amendment or waiver or other modification, including anyincrease in the amount thereof, whether by course of conduct or otherwise, ofthe terms of any First Lien Document or any Second Lien Document;

####  

#### (c)           any exchange of any security interestin any Collateral or any other collateral, or any amendment, waiver or othermodification, whether in writing or by course of conduct or otherwise, of allor any of the First Lien Obligations or Second Lien Obligations or anyguarantee thereof;

####  

#### (d)           the commencement of any Insolvency orLiquidation Proceeding in respect of the Company or any other Grantor; or

 

29

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#### (e)           any other circumstances whichotherwise might constitute a defense available to, or a discharge of, theCompany or any other Grantor in respect of the First Lien Obligations, or ofthe Second Lien Collateral Agent or any Second Lien Claimholder in respect ofthis Agreement.

####  

SECTION 7.04               CertainNotices.

 

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

###  

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

###  

# **ARTICLE VIIIMISCELLANEOUS**

 

SECTION 8.01               Inconsistencieswith Other Documents.  In the eventof any conflict or inconsistency between this Agreement and any First LienCollateral Document or any Second Lien Collateral Document, the terms of thisAgreement shall control.  The partieshereto acknowledge that the terms of this Agreement are not intended (i) tonegate any specific rights granted to the Company in the First Lien Documentsand the Second Lien Documents or (ii) to negate the rights of theCollateral Agent (as defined in the Shared Collateral Agreement), the NoteTrustee (as defined in the Shared Collateral Agreement) and/or the holders ofthe 2014 Notes with respect to assets of the Company and the Grantors (otherthan the Collateral) granted pursuant to the Indenture, the Shared CollateralAgreement or other Collateral Documents (as defined in the Shared CollateralAgreement).

 

SECTION 8.02               Effectiveness;Continuing Nature of this Agreement; Severability.  This Agreement shall become effective whenexecuted and delivered by the parties hereto. This is a continuing agreement of lien subordination and the First LienClaimholders may continue, at any time and without notice to the Second LienCollateral Agent or any Second Lien Claimholder subject to the Second LienDocuments, to extend credit and other financial accommodations and lend moniesto or for the benefit of the Company or any Grantor constituting First LienObligations in reliance hereof, subject to the provisions of the First LienDocuments and the Second Lien Documents. The Second Lien Collateral Agent (on behalf of itself and the SecondLien Claimholders), hereby waives any right it may have under applicable law torevoke this Agreement or any of the provisions of this Agreement, other than asset forth in this Agreement.  ThisAgreement shall survive, and shall continue in full force and effect, in 

 

30

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any Insolvency orLiquidation Proceeding.  Any provision ofthis Agreement which is prohibited or unenforceable in any jurisdiction shallnot invalidate the remaining provisions hereof, and any such prohibition orunenforceability in any jurisdiction shall as to such jurisdiction, beineffective only to the extent of such prohibition or unenforceability withoutinvalidating the remainder of such provision or the remaining provisions hereofor affecting the validity or enforceability of such provision in any other jurisdiction.  All references to the Company or any otherGrantor shall include the Company or such Grantor as debtor anddebtor-in-possession and any receiver or trustee for the Company or any otherGrantor (as the case may be) in any Insolvency or Liquidation Proceeding.  This Agreement shall terminate and be of nofurther force and effect, (a) with respect to the Second Lien CollateralAgent, the Second Lien Claimholders and the Second Lien Obligations, upon thelater of (i) the date upon which the obligations under the Indentureterminate and payment has been made in full in cash of all other Second LienObligations outstanding on such date and (ii) if there are other SecondLien Obligations outstanding on such date, the date upon which such Second LienObligations terminate and (b) with respect to the First Lien CollateralAgent, the First Lien Claimholders and the First Lien Obligations, the date ofDischarge of First Lien Obligations, subject to the rights of the First LienClaimholders under Section 5.06 and Section 6.05.

 

SECTION 8.03               Amendments;Waivers.  No amendment, modificationor waiver of any of the provisions of this Agreement by the Second LienCollateral Agent or the First Lien Collateral Agent shall be deemed to be madeunless the same shall be in writing signed on behalf of each party hereto orits authorized agent and each waiver, if any, shall be a waiver only withrespect to the specific instance involved and shall in no way impair the rightsof the parties making such waiver or the obligations of the other parties tosuch party in any other respect or at any other time.  Notwithstanding the foregoing, neither theCompany nor any Grantor shall have any right to consent to or approve anyamendment, modification or waiver of any provision of this Agreement except tothe extent its rights or obligations are directly affected.

 

SECTION 8.04               InformationConcerning Financial Condition of the Company and its Subsidiaries.

 

### (a)           TheFirst Lien Collateral Agent and the First Lien Claimholders, on the one hand,and the Second Lien Claimholders and the Second Lien Collateral Agent, on theother hand, shall each be responsible for keeping themselves informed of (i) thefinancial condition of the Company and its Subsidiaries and all endorsersand/or guarantors of the First Lien Obligations or the Second Lien Obligationsand (ii) all other circumstances bearing upon the risk of nonpayment ofthe First Lien Obligations or the Second Lien Obligations.  The First Lien Collateral Agent and the FirstLien Claimholders shall have no duty to advise the Second Lien Collateral Agentor any Second Lien Claimholder of information known to it or them regardingsuch condition or any such circumstances or otherwise.  In the event the First Lien Collateral Agentor any of the First Lien Claimholders, in its or their sole discretion,undertakes at any time or from time to time to provide any such information tothe Second Lien Collateral Agent or any Second Lien Claimholder, it or theyshall be under no obligation (w) to make, and the First Lien CollateralAgent and the First Lien Claimholders shall not make, any express or impliedrepresentation or warranty, including with respect to the accuracy,completeness, truthfulness or validity of any such information so provided, (x) toprovide any additional information or to provide any such information on anysubsequent occasion, (y) to undertake any investigation or 

 

31

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### (z) to disclose any information which, pursuant to accepted or reasonablecommercial finance practices, such party wishes to maintain confidential or isotherwise required to maintain confidential.

###  

### (b)           TheGrantors agree that any information provided to the First Lien CollateralAgent, the Second Lien Collateral Agent, the Control Agent, any First LienClaimholder or any Second Lien Claimholder may be shared by such Person withany First Lien Claimholder, any Second Lien Claimholder, the Control Agent, theFirst Lien Collateral Agent or the Second Lien Collateral Agent notwithstandinga request or demand by such Grantor that such information be kept confidential.

###  

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

 

SECTION 8.06               Applicationof Payments.  All payments receivedby the First Lien Collateral Agent or the First Lien Claimholders with respectto the Collateral may be applied, reversed and reapplied, in whole or in part,to such part of the First Lien Obligations provided for in the First LienDocuments.  The Second Lien CollateralAgent (on behalf of itself and the Second Lien Claimholders), assents to anyextension or postponement of the time of payment of the First Lien Obligationsor any part thereof and to any other indulgence with respect thereto, to anysubstitution, exchange or release of any security which may at any time secureany part of the First Lien Obligations (it being understood that the First LienCollateral Agent shall receive only assets of the type contemplated by thedefinition of “Collateral” in consideration for such substitution, exchange orrelease and that such assets shall be subject to the Lien of the Second LienCollateral Agent) and to the addition or release of any other Person primarilyor secondarily liable therefor.

 

SECTION 8.07               SUBMISSIONTO JURISDICTION.

 

### (a)           EACHPARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITSPROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEWYORK SITTING IN THE BOROUGH OF MANHATTAN, NEW YORK AND OF THE UNITED STATESDISTRICT COURT SITTING IN THE SOUTHERN DISTRICT OF NEW YORK AND ANY APPELLATE COURTTHEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THISAGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THEPARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS INRESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED INSUCH NEW YORK STATE COURTS OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLELAW, IN SUCH FEDERAL COURT.  EACH OF THEPARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDINGSHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ONTHE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR IN ANY OTHERFIRST LIEN DOCUMENT OR SECOND LIEN DOCUMENT SHALL AFFECT ANY RIGHT THAT THEFIRST LIEN COLLATERAL 

 

32

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### AGENT, THE SECOND LIEN COLLATERAL AGENT, ANY FIRST LIEN CLAIMHOLDER ORSECOND LIEN CLAIMHOLDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDINGRELATING TO THIS AGREEMENT OR ANY OTHER FIRST LIEN DOCUMENT OR SECOND LIENDOCUMENT AGAINST THE COMPANY OR ANY OTHER GRANTOR OR ITS PROPERTIES IN THECOURTS OF ANY JURISDICTION.

###  

### (b)           EACHPARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENTPERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTERHAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF ORRELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY COURTREFERRED TO IN PARAGRAPH (A) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLYWAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF ANINCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCHCOURT.

###  

### (c)           EACHPARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BYAPPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGALPROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENTOR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANYOTHER THEORY).  EACH PARTY HERETO (A) CERTIFIESTHAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OFLITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THATIT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENTBY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

###  

SECTION 8.08               Notices.  Except as otherwise provided in thisAgreement, all notices and communications hereunder shall be in writing.  Any notice shall be effective if delivered byhand delivery or sent via telecopy, recognized overnight courier service orcertified mail, return receipt requested, and shall be presumed to be receivedby a party hereto (i) on the date of delivery if delivered by hand or bytelecopy, (ii) on the next Business Day if sent by recognized overnightcourier service and (iii) on the third (3rd) Business Day following thedate sent by certified mail, return receipt requested.  A telephonic notice to the First LienCollateral Agent or the Control Agent as understood by the First LienCollateral Agent or the Control Agent will be deemed to be the controlling andproper notice in the event of a discrepancy with or failure to receive a confirmingwritten notice.

 

SECTION 8.09               FurtherAssurances.  The First LienCollateral Agent (on behalf of itself and the First Lien Claimholders) and theSecond Lien Collateral Agent (on behalf of itself and the Second LienClaimholders), and the Company agree that each of them shall take such furtheraction and shall execute and deliver such additional documents and instruments(in recordable form, if requested) as the First Lien Collateral Agent or theSecond Lien Collateral 

 

33

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Agent may reasonablyrequest to effectuate the terms of and the lien priorities contemplated by thisAgreement.

 

SECTION 8.10               APPLICABLELAW.  **THISAGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OFTHE STATE OF NEW YORK.**

 

SECTION 8.11               Bindingon Successors and Assigns.  ThisAgreement shall be binding upon and inure to the benefit of the First LienCollateral Agent, the First Lien Claimholders, the Second Lien CollateralAgent, the Second Lien Claimholders, the Control Agent and their respectivesuccessors and assigns.

 

SECTION 8.12               SpecificPerformance.  Each of the First LienCollateral Agent and the Second Lien Collateral Agent may demand specificperformance of this Agreement.  The FirstLien Collateral Agent (on behalf of itself and the First Lien Claimholders) andthe Second Lien Collateral Agent (on behalf of itself and the Second LienClaimholders) hereby irrevocably waive any defense based on the adequacy of aremedy at law and any other defense which might be asserted to bar the remedyof specific performance in any action which may be brought by any First LienCollateral Agent or the Second Lien Collateral Agent, as the case may be.

 

SECTION 8.13               Titlesand Captions.  Titles and Captions ofArticles, Sections and Subsections in this Agreement are for convenience only,and neither limit nor amplify the provisions of this Agreement.

 

SECTION 8.14               Counterparts;Integration.  This Agreement may beexecuted in counterparts (and by different parties hereto in differentcounterparts), each of which shall constitute an original, but all of whichwhen taken together shall constitute a single contract.

 

ThisAgreement constitutes the entire contract among the parties relating to thesubject matter hereof and supersedes any and all previous agreements andunderstandings, oral or written, relating to the subject matter hereof.  Delivery of an executed counterpart of asignature page of this Agreement by telecopy shall be effective asdelivery of a manually executed counterpart of this Agreement.

 

SECTION 8.15               Authorization.  By its signature, each Person executing thisAgreement on behalf of a party hereto represents and warrants to the otherparties hereto that it is duly authorized to execute this Agreement.

 

SECTION 8.16               NoThird Party Beneficiaries.  Nothingin this Agreement express or implied shall be construed to confer upon anyPerson (other than the parties hereto and their respective successors andassigns permitted hereby) any legal or equitable right, remedy or claim underor by reason of this Agreement.

 

SECTION 8.17               ProvisionsSolely to Define Relative Rights. The provisions of this Agreement are and are intended solely for thepurpose of defining the relative rights with respect to the Collateral of theFirst Lien Claimholders on the one hand and the Second Lien Claimholders on theother hand.  Nothing in this Agreement isintended to or shall impair the rights of the Company or any other Grantor, orthe obligations of the Company or any other 

 

34

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Grantor, which areabsolute and unconditional, to pay the First Lien Obligations and the SecondLien Obligations as and when the same shall become due and payable inaccordance with their terms.

 

[*Signature Pages Follow*]

 

35

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INWITNESS WHEREOF, the parties hereto have executed this Intercreditor Agreementas of the date first written above.

 
|   | **ROYAL BANK OF CANADA**, as First Lien Collateral Agent |
|--------|----------------------------------------------------------|
|   |                                                     |   |
|   |                                                     |   |
|   | By:                                                 | /s/ Ann Hurley |
|   |                                                     | Name: Ann Hurley |
|   |                                                     | Title: Manager, Agency |

 

 

Notice Address:

 

200 Bay Street, 12th FloorSouth Tower, Royal Bank PlazaToronto, OntarioM5J 2W7

 

[Prospect IntercreditorAgreement]

 

----

 
|   | **ROYAL BANK OF CANADA**, as Control Agent |
|--------|--------------------------------------------|
|   |                                       | ** ** |
|   |                                       | ** ** |
|   | By:                                   | /s/ Ann Hurley |
|   |                                       | Name: Ann Hurley |
|   |                                       | Title: Manager, Agency |

 

 

Notice Address:

 

200 Bay Street, 12th FloorSouth Tower, Royal Bank PlazaToronto, OntarioM5J 2W7

 

[Prospect IntercreditorAgreement]

 

----

 
|   | **U.S. BANK NATIONAL ASSOCIATION**, as Second Lien Collateral Agent |
|--------|---------------------------------------------------------------------|
|   | ** **                                                          |
|   |                                                                | ** ** |
|   | By:                                                            | /s/ Michael M. Hopkins |
|   |                                                                | Name: Michael M. Hopkins |
|   |                                                                | Title: Vice President |

 

 

Notice Address:

 

CorporateTrust Services

225Asylum Street, 23rd Floor

Hartford,CT  06103

Attention:  Michael M. Hopkins  (Prospect

MedicalHoldings 2009 Collateral Agency)

Telephone:  (860) 241-6820

Telecopier:  (860) 241-6881

 

[Prospect IntercreditorAgreement]

 

----

 
|   | **PROSPECT MEDICAL HOLDINGS, INC.**, as the Company |
|--------|-----------------------------------------------------|
|   |                                                | ** ** |
|   |                                                | ** ** |
|   | By:                                            | /s/ Samuel S. Lee |
|   |                                                | Name: Samuel S. Lee |
|   |                                                | Title: Chief Executive Officer |

 

 

Notice Address:

 

10780Santa Monica Blvd., Suite 400

LosAngeles, CA 90025

Attention:  General Counsel

Telephone:  (310) 943-4500

Telecopier:  (310) 943-4501

 

 
|   | **SUBSIDIARIES:**                               |
|--------|-------------------------------------------------|
|   |                                            | ** ** |
|   |                                            |   |
|   | **ALTA HOSPITALS SYSTEM, LLC**, as Grantor      |
|   |                                            | ** ** |
|   |                                            |   |
|   | By:                                        | /s/ Samuel S. Lee |
|   |                                            | Name: Samuel S. Lee |
|   |                                            | Title: Chief Executive  Officer |
|   |                                            |   |
|   |                                            |   |
|   | **ALTA HOLLYWOOD HOSPITALS, INC.,** as Grantor  |
|   |                                            |   |
|   |                                            |   |
|   | By:                                             | /s/ Samuel S. Lee |
|   |                                            | Name: Samuel S. Lee |
|   |                                            | Title: President |
|   |                                            |   |
|   |                                            |   |
|   | **ALTA LOS ANGELES HOSPITALS, INC.,**as Grantor |
|   |                                            |   |
|   |                                            |   |
|   | By:                                             | /s/ Samuel S. Lee |
|   |                                            | Name: Samuel S. Lee |
|   |                                            | Title: President |

 

[Prospect IntercreditorAgreement]

 

----

 
|   | **GENESIS HEALTHCARE OF SOUTHERN CALIFORNIA, INC.,  A MEDICAL GROUP**,  as Grantor |
|--------|------------------------------------------------------------------------------------|
|   |                                                                               |   |
|   |                                                                               |   |
|   | By:                                                                           | /s/  Samuel S. Lee |
|   |                                                                               | Name:  Samuel S. Lee |
|   |                                                                               | Title:  Senior Vice President |
|   |                                                                               |   |
|   |                                                                               |   |
|   | **POMONA VALLEY MEDICAL GROUP,  INC.**, as Grantor                                 |
|   |                                                                               |   |
|   |                                                                               |   |
|   | By:                                                                                | /s/  Samuel S. Lee |
|   |                                                                               | Name:  Samuel S. Lee |
|   |                                                                               | Title:  Vice President |
|   |                                                                               |   |
|   |                                                                               |   |
|   | **PROMED HEALTH CARE  ADMINISTRATORS**,  as Grantor                                |
|   |                                                                               |   |
|   |                                                                               |   |
|   | By:                                                                                | /s/  Samuel S. Lee |
|   |                                                                               | Name:  Samuel S. Lee |
|   |                                                                               | Title:  Vice President |
|   |                                                                               |   |
|   |                                                                               |   |
|   | **PROMED HEALTH SERVICES COMPANY**, as Grantor                                     |
|   |                                                                               |   |
|   |                                                                               |   |
|   | By:                                                                                | /s/  Samuel S. Lee |
|   |                                                                               | Name:  Samuel S. Lee |
|   |                                                                               | Title:  Vice President |
|   |                                                                               |   |
|   |                                                                               |   |
|   | **PROSPECT HOSPITAL ADVISORY SERVICES, INC.**, as Grantor                          |
|   |                                                                               |   |
|   |                                                                               |   |
|   | By:                                                                                | /s/  Samuel S. Lee |
|   |                                                                               | Name:  Samuel S. Lee |
|   |                                                                               | Title:  Chief Executive Officer |

 

[Prospect IntercreditorAgreement]

 

----

 
|   | **PROSPECT HEALTH SOURCE MEDICAL GROUP, INC.,**as Grantor      |
|--------|----------------------------------------------------------------|
|   | ** **                                                     |
|   |                                                           |   |
|   | By:                                                            | /s/  Samuel S. Lee |
|   |                                                           | Name:  Samuel S. Lee |
|   |                                                           | Title:  Senior Vice President |
|   |                                                           |   |
|   |                                                           |   |
|   | **PROSPECT MEDICAL GROUP, INC.,** as Grantor                   |
|   |                                                           |   |
|   |                                                           |   |
|   | By:                                                            | /s/  Samuel S. Lee |
|   |                                                           | Name:  Samuel S. Lee |
|   |                                                           | Title:  Senior Vice President |
|   |                                                           |   |
|   |                                                           |   |
|   | **PROSPECT MEDICAL SYSTEMS, INC.,**as Grantor                  |
|   |                                                           |   |
|   |                                                           |   |
|   | By:                                                            | /s/  Samuel S. Lee |
|   |                                                           | Name:  Samuel S. Lee |
|   |                                                           | Title:  Chairman |
|   |                                                           |   |
|   |                                                           |   |
|   | **PROSPECT NWOC MEDICAL GROUP,  INC.**, as  Grantor            |
|   |                                                           |   |
|   |                                                           |   |
|   | By:                                                            | /s/  Samuel S. Lee |
|   |                                                           | Name:  Samuel S. Lee |
|   |                                                           | Title:  Senior Vice President |
|   |                                                           |   |
|   |                                                           |   |
|   | **PROSPECT PROFESSIONAL CARE MEDICAL GROUP, INC.**, as Grantor |
|   |                                                           |   |
|   |                                                           |   |
|   | By:                                                            | /s/  Samuel S. Lee |
|   |                                                           | Name:  Samuel S. Lee |
|   |                                                           | Title:  Senior Vice President |

 

[Prospect IntercreditorAgreement]

 

----

 
|   | **STARCARE MEDICAL GROUP, INC.**, as Grantor                              |
|--------|---------------------------------------------------------------------------|
|   |                                                                      |   |
|   |                                                                      |   |
|   | By:                                                                       | /s/  Samuel S. Lee |
|   |                                                                      | Name:  Samuel S. Lee |
|   |                                                                      | Title:  Senior Vice President |
|   |                                                                      |   |
|   |                                                                      |   |
|   | **UPLAND MEDICAL GROUP, A PROFESSIONAL MEDICAL  CORPORATION,**as  Grantor |
|   |                                                                      |   |
|   |                                                                      |   |
|   | By:                                                                       | /s/ Samuel S. Lee |
|   |                                                                      | Name: Samuel S. Lee |
|   |                                                                      | Title: Vice President |

 

 

Notice Address:

 

c/oProspect Medical Holdings, Inc.

10780Santa Monica Blvd., Suite 400

LosAngeles, CA 90025

Attention:  General Counsel

Telephone:  (310) 943-4500

Telecopier:  (310) 943-4501

 

[Prospect IntercreditorAgreement]

 

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