exv10w2







Exhibit 10.2




EXECUTION COPY




INTERCREDITOR AGREEMENT




          THIS INTERCREDITOR AGREEMENT is dated as of March 4, 2011, among (i) CREDIT SUISSE AG, CAYMAN
ISLANDS BRANCH (f/k/a Credit Suisse, Cayman Islands Branch), in its capacity as Credit Agreement
Agent, and each Other First Lien Obligations Agent from time to time party hereto, each in its
capacity as First Lien Agent, (ii) THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee and
collateral agent, and each collateral agent for any Future Second Lien Indebtedness from time to
time party hereto, each in its capacity as Second Priority Agent, and (iii) CLAIRE’S INC., a
Delaware corporation (“Holdings”), CLAIRE’S STORES, INC., a Florida corporation (the “Company”),
and each Subsidiary of the Company listed on Schedule I hereto or that becomes a party hereto
pursuant to Section 8.21 below.




          A. The Company is party to the Credit Agreement dated as of May 29, 2007 (as amended, amended
and restated, replaced, refinanced, supplemented or otherwise modified from time to time, the
“Credit Agreement”) among Holdings, the Company, the lenders and other parties party thereto from
time to time, and Credit Suisse AG, Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands
Branch), as administrative agent for the lenders. The Obligations pursuant to the Credit Agreement
has been designated by the Company as Senior Lender Claims hereunder.




          B. The Company is party to the Indenture dated as of March 4, 2011, among Claire’s Escrow
Corporation, a Delaware corporation (“Claire’s Escrow”), and The Bank of New York Mellon Trust
Company, N.A., as Trustee, as supplemented by the Supplemental Indenture dated March 4, 2011 among
Claire’s Escrow, the Company, the Company’s Subsidiaries named therein and the Trustee (such
agreement, as amended, amended and restated, supplemented or otherwise modified from time to time,
the “Second Priority Senior Secured Notes Indenture”). The Obligations of the Company and certain
of the Company’s Subsidiaries under the Second Priority Senior Secured Notes Indenture, the Notes
and the other Noteholder Documents constitute Second Priority Claims hereunder.




          Accordingly, in consideration of the foregoing, the mutual covenants and obligations herein
set forth and for other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:




          SECTION 1. Definitions.




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




          “Affiliate” shall mean, when used with respect to a specified person, another person that
directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is
under common Control with the person specified.







 









 










          “Agreement” shall mean this Agreement, as amended, renewed, extended, supplemented or
otherwise modified from time to time in accordance with the terms hereof.




          “Bankruptcy Law” shall mean Title 11 of the United States Code and any similar Federal, state
or foreign law for the relief of debtors.




          “Closing Date” shall mean March 4, 2011.




          “Common Collateral” shall mean all of the assets of any Grantor, whether real, personal or
mixed, constituting both Senior Lender Collateral and Second Priority Collateral, including without
limitation any assets in which the First Lien Agents are automatically deemed to have a Lien
pursuant to the provisions of Section 2.3.




          “Company” shall have the meaning set forth in the preamble.




          “Comparable Second Priority Collateral Document” shall mean, in relation to any Common
Collateral subject to any Lien created under any Senior Collateral Document, those Second Priority
Collateral Documents that create a Lien on the same Common Collateral, granted by the same Grantor.




          “Control” shall mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a person, whether through the ownership of voting
securities, by contract or otherwise, and “Controlling” and “controlled” shall have meanings
correlative thereto.




          “Credit Agreement” shall have the meaning set forth in the recitals.




          “Credit Agreement Agent” shall mean Credit Suisse AG, Cayman Islands Branch, in its capacity
as administrative agent for the Senior Lenders under the Credit Agreement and the other Senior
Lender Documents entered into pursuant to the Credit Agreement, together with its successors in
such capacity.




          “Domestic Subsidiary” shall have the meaning set forth in the Term Credit Agreement.




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




          “Discharge of Senior Lender Claims” shall mean, except to the extent otherwise provided in
Section 5.7 below, payment in full in cash (except for contingent indemnities and cost and
reimbursement obligations to the extent no claim has been made) of (a) all Obligations in respect
of all outstanding Senior Lender Claims and, with respect to letters of credit or letter of credit
guaranties outstanding thereunder, delivery of cash collateral or backstop letters of credit in
respect thereof in compliance with the Credit Agreement, in each case after or concurrently with
the termination of all commitments to extend credit thereunder and (b) any other Senior Lender
Claims that are due and payable or otherwise accrued and owing at or prior to the time such
principal and interest are paid; provided that the Discharge of Senior Lender Claims shall not be
deemed to have occurred if such payments are made with the proceeds of other Senior Lender Claims
that constitute an exchange or replacement for or a refinancing of such






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Obligations or Senior Lender Claims. In the event the Senior Lender Claims are modified and
the Obligations are paid over time or otherwise modified pursuant to Section 1129 of the Bankruptcy
Code, the Senior Lender Claims shall be deemed to be discharged when the final payment is made, in
cash, in respect of such indebtedness and any obligations pursuant to such new indebtedness shall
have been satisfied.




          “First Lien Agent” shall mean each of (a) the Credit Agreement Agent and (b) any Other First
Priority Lien Obligations Agent.




          “First Lien Designated Agent” shall mean such agent or trustee as is designated “First
Priority Designated Agent” by Senior Lenders holding a majority in principal amount of the Senior
Lender Claims then outstanding; it being understood that as of the date of this Agreement and for
so long as any Obligations under the Credit Agreement remain outstanding, the Credit Agreement
Agent shall be so designated First Priority Designated Agent.




          “Future Second Lien Indebtedness” shall mean Indebtedness or Obligations (other than
Noteholder Claims) of the Company and its Subsidiaries that are to be equally and ratably secured
with the Noteholder Claims and are so designated by the Company as Future Second Lien Indebtedness
in accordance with Section 8.22 hereof; provided, however, that such Future Second Lien
Indebtedness is permitted to be so incurred in accordance with any Senior Lender Documents and any
Second Priority Documents, as applicable.




          “Grantors” shall mean the Company, Holdings and each of the Company’s Subsidiaries that has
executed and delivered a Second Priority Collateral Document or a Senior Collateral Document.




          “Indebtedness” shall mean and include all obligations that constitute “Indebtedness” within
the meaning of the Second Priority Senior Secured Notes Indenture, the Credit Agreement or the
Other First Priority Lien Obligations Credit Documents.




          “Indenture Secured Parties” shall mean the Persons holding Noteholder Claims, including the
Trustee.




          “Insolvency or Liquidation Proceeding” shall mean (a) any voluntary or involuntary case or
proceeding under any Bankruptcy Law with respect to any Grantor, (b) any other voluntary or
involuntary insolvency, reorganization or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding with respect to any Grantor or with
respect to any of its assets, (c) any liquidation, dissolution, reorganization or winding up of any
Grantor whether voluntary or involuntary and whether or not involving insolvency or bankruptcy or
(d) any assignment for the benefit of creditors or any other marshalling of assets and liabilities
of any Grantor.




          “Joinder Agreement” shall mean an agreement in form and substance substantially similar to
Exhibit A hereto, including with appropriate adjustments as permitted by Section 8.22
hereof.




          “Lien” shall mean, with respect to any asset, (a) any mortgage, deed of trust, lien,
hypothecation, pledge, charge, security interest or similar encumbrance in or on such asset and






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(b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease
or title retention agreement (or an financing lease having substantially the same economic effect
as any of the foregoing) relating to such asset.




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




          “Noteholder Claims” shall mean all Obligations in respect of the Notes or arising under the
Noteholder Documents or any of them, including all fees and expenses of the Trustee thereunder.




          “Noteholder Collateral” shall mean all of the assets of any Grantor, whether real, personal or
mixed, with respect to which a Lien is granted as security for any Noteholder Claim.




          “Noteholder Collateral Agreement” shall mean the Collateral Agreement dated as of March 4,
2011, among the Company, certain other Grantors and The Bank of New York Mellon Trust Company,
N.A., as collateral agent, in respect of the Second Priority Senior Secured Notes Indenture, as the
same may be amended, restated, supplemented or otherwise modified from time to time.




          “Noteholder Collateral Documents” shall mean the Noteholder Collateral Agreement and any other
document or instrument pursuant to which a Lien is granted by any Grantor to secure any Noteholder
Claims or under which rights or remedies with respect to any such Lien are governed.




          “Noteholder Documents” shall mean (a) the Second Priority Senior Secured Notes Indenture, the
Notes, the Noteholder Collateral Documents and (b) any other related document or instrument
executed and delivered pursuant to any Noteholder Document described in clause (a) above evidencing
or governing any Obligations thereunder.




          “Notes” shall mean the Second Lien Notes and any additional notes issued under the Second
Priority Senior Secured Notes Indenture by the Company, to the extent permitted by the Second
Priority Senior Secured Notes Indenture, the Credit Agreement, the Other First Priority Lien
Obligations Credit Documents, any other Senior Lender Documents and any Second Priority Document,
as applicable.




          “Obligations” shall mean, with respect to any Person, any payment, performance or other
obligations of such Person of any kind, including, without limitation, any liability of such Person
on any claim, whether or not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is discharged, stayed or
otherwise affected by any Insolvency or Liquidation Proceeding. Without limiting the generality of
the foregoing, the Obligations of any Grantor under any Senior Lender Document or Second Priority
Document include the obligations to pay principal, interest (including interest accrued on or
accruing after the commencement of any Insolvency or Liquidation Proceeding, whether or not a claim
for post-filing interest is allowed in such proceeding) or premium on any Indebtedness, letter of
credit commissions (if applicable), charges, expenses, fees, attorneys’ fees and disbursements,
indemnities and other amounts payable by such Grantor to reimburse any






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amount in respect of any of the foregoing that any Senior Lender or Second Priority Secured
Party, in its sole discretion, many elect to pay or advance on behalf of such Grantor.




          “Officers’ Certificate” shall have the meaning set forth in the Second Priority Senior Secured
Notes Indenture.




          “Other First Priority Lien Obligations ” means all Obligations owing under any Other First
Priority Lien Obligations Document; provided, however, for the avoidance of doubt, none of the
Obligations under the Credit Agreement or any other Loan Document shall constitute Other First
Priority Lien Obligations.




          “Other First Priority Lien Obligations Agent ” shall mean, with respect to any Other First
Priority Lien Obligations Credit Document, the Person elected, designated or appointed as the
administrative agent, trustee, collateral agent or similar representative with respect to such
Other First Priority Lien Obligations Credit Document by or on behalf of the holders of such Other
First Priority Lien Obligations, and its respective successors in such capacity.




          “Other First Priority Lien Obligations Credit Document ” means any (a) instruments, agreements
or documents evidencing debt facilities or commercial paper facilities, providing for revolving
credit loans, term loans, receivables financing (including through the sale of receivables to
lenders or to special purpose entities formed to borrow from lenders against such receivables) or
letters of credit, (b) debt securities, indentures and/or other forms of debt financing (including
convertible or exchangeable debt instruments or bank guarantees or bankers’ acceptances), or (c)
instruments or agreements evidencing any other indebtedness, in each case in respect of which a
First Lien Agent has become a party hereto in accordance with Section 8.22 hereof.




          “Other First Priority Lien Obligations Documents ” means each Other First Priority Lien
Obligations Credit Document and each Other First Priority Lien Obligations Security Document
related thereto.




          “Other First Priority Lien Obligations Security Documents ” means any security agreement or
any other document now existing or entered into after the date hereof that create Liens on any
assets or properties of any Grantor to secure any Other First Priority Lien Obligations.




          “Person” shall mean any natural person, corporation, business trust, joint venture,
association, company, partnership, limited liability company or government, individual or family
trusts, or any agency or political subdivision thereof.




          “Pledged Collateral” shall mean the Common Collateral in the possession of any First Lien
Agent (or its agents or bailees), to the extent that possession thereof perfects a Lien thereon
under the Uniform Commercial Code.




          “Recovery” shall have the meaning set forth in Section 6.4.




          “Required Lenders” shall mean, with respect to any Senior Lender Documents, those Senior
Lenders the approval of which is required to approve an amendment or modification






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of, termination or waiver of any provision of or consent to any departure from such Senior
Lender Documents (or would be required to effect such consent under this Agreement if such consent
were treated as an amendment of the Senior Lender Documents).




          “Second Lien Notes” shall mean the Company’s 8.875% Senior Secured Second Lien Notes due 2019,
issued pursuant to the Second Priority Senior Secured Notes Indenture and any notes issued by the
Company in exchange for, and as contemplated by, the Second Lien Notes and the related registration
rights agreement with substantially identical terms as the Second Lien Notes.




          “Second Priority Agents” shall mean (a) the Trustee as agent for the Indenture Secured Parties
and (b) the collateral agent for any Future Second Lien Indebtedness (including the Trustee).




          “Second Priority Claims” shall mean the Noteholder Claims and all other Obligations in respect
of, or arising under, the Second Priority Documents, including all fees and expenses of the
collateral agent for any Future Second Lien Indebtedness.




          “Second Priority Collateral” shall mean the Noteholder Collateral and all of the assets of any
Grantor, whether real, personal or mixed, with respect to which a Lien is granted as security for
any Second Priority Claim.




          “Second Priority Collateral Agreements” shall mean the Noteholder Collateral Agreement and any
comparable agreement with respect to any Future Second Lien Indebtedness.




          “Second Priority Collateral Documents” shall mean the Noteholder Collateral Documents and any
other agreement, document or instrument pursuant to which a Lien is now or hereafter granted
securing any Second Priority Claims or under which rights or remedies with respect to such Liens
are at any time governed.




          “Second Priority Designated Agent” shall mean such agent or trustee as is designated “Second
Priority Designated Agent” by Second Priority Secured Parties holding a majority in principal
amount of the Second Priority Claims then outstanding; it being understood that as of the date of
this Agreement and for so long as any Obligations under the Second Priority Senior Secured Notes
Indenture remain outstanding, the Trustee shall be so designated Second Priority Designated Agent.




          “Second Priority Documents” shall mean the Noteholder Documents and any other document or
instrument evidencing or governing any Future Second Lien Indebtedness.




          “Second Priority Lien” shall mean any Lien on any assets of the Company or any other Grantor
securing any Second Priority Claims.




          “Second Priority Secured Parties” shall mean the Indenture Secured Parties and all other
Persons holding any Second Priority Claims, including the collateral agent for any Future Second
Lien Indebtedness.







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          “Second Priority Senior Secured Notes Indenture” shall have the meaning set forth in the
recitals.




          “Secured Hedge Agreements” shall mean each Swap Agreement that (i) is in effect on the Closing
Date with a counterparty that is a Senior Lender or an agent or an Affiliate of a Senior Lender as
of the Closing Date or (ii) is entered into after the Closing Date with any counterparty that is a
Senior Lender or an agent or an Affiliate of a Senior Lender at the time such Swap Agreement is
entered into.




          “Senior Collateral Agreement” shall mean the Guarantee and Collateral Agreement dated as of
May 29, 2007, among the Company, Holdings, the other Grantors party thereto, and Credit Suisse AG,
Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch), as administrative agent for the
secured parties referred to therein.




          “Senior Collateral Documents” shall mean the Senior Collateral Agreement, the Other First
Priority Lien Obligations Security Documents and any security agreement, mortgage or other
agreement, document or instrument pursuant to which a Lien is now or hereafter granted securing any
Senior Lender Claims or under which rights or remedies with respect to such Lien are at any time
governed.




          “Senior Lender Cash Management Obligations” shall mean, with respect to any Grantor, the due
and punctual payment and performance of all obligations of such Grantor in respect of overdrafts
and related liabilities owed to a Senior Lender under the Credit Agreement or any of its Affiliates
(or any other Person designated by the Company as a provider of cash management services and
entitled to the benefit of the Senior Collateral Agreement) and arising from cash management
services (including treasury, depository, overdraft, credit or debit card, electronic funds
transfer, Automated Clearing House services and other cash management arrangements).




          “Senior Lender Claims” shall mean all Obligations arising under the Credit Agreement, the
Other First Priority Lien Obligations Credit Documents and any other Senior Lender Documents,
whether or not such Obligations constitute Indebtedness, including, without limitation, (a)
Obligations arising under Secured Hedge Agreements, (b) Senior Lender Cash Management Obligations
and (c) Obligations under any credit agreement that is an exchange or replacement for or an
extension, increase or refinancing of any other Senior Lender Claims. Senior Lender Claims shall
include all interest and expenses accrued or accruing (or that would, absent the commencement of an
Insolvency or Liquidation Proceeding, accrue) after the commencement of an Insolvency or
Liquidation Proceeding in accordance with and at the rate specified in the relevant Senior Lender
Documents whether or not the claim for such interest or expenses is allowed or allowable as a claim
in such Insolvency or Liquidation Proceeding.




          “Senior Lender Collateral” shall mean all of the assets of any Grantor, whether real, personal
or mixed, with respect to which a Lien is granted as security for any Senior Lender Claim.




          “Senior Lender Documents” shall mean the Loan Documents, the Other First Priority Lien
Obligations Documents, the Senior Collateral Documents and each of the other






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agreements, documents and instruments (including each agreement, document or instrument
providing for or evidencing a Senior Lender Hedging Obligation or Senior Lender Cash Management
Obligation) providing for, evidencing or securing any Senior Lender Claim, including, without
limitation, any Obligation under the Credit Agreement and any other related document or instrument
executed or delivered pursuant to any such document at any time or otherwise evidencing or securing
any Indebtedness arising under any such document.




          “Senior Lender Hedging Obligations” shall mean any Obligations under Secured Hedge Agreements.




          “Senior Lenders” shall mean the Persons holding Senior Lender Claims, including the First Lien
Agents.




          “Subsidiary” shall mean any “Subsidiary” of the Company as defined in the Credit Agreement.




          “Swap Agreement” shall mean any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement involving, or settled by reference to, one or
more rates, currencies, commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing risk or value or any
similar transaction or any combination of these transactions; provided, that no phantom
stock or similar plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of Holdings, the Company or any of the
Subsidiaries shall be a Swap Agreement.




          “Trustee” shall mean The Bank of New York Mellon Trust Company, N.A., in its capacity as
trustee under the Second Priority Senior Secured Notes Indenture and as collateral agent under the
Noteholder Collateral Documents, and its successors in such capacity.




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




          1.2. Terms Generally. The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words “include,”
“includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The
word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the
context requires otherwise (a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or other document as
from time to time amended, supplemented or otherwise modified in accordance with this Agreement,
(b) any reference herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular provision hereof,
(d) all references herein to Sections shall be construed to refer to Sections of this Agreement and
(e) the words “asset” and “property” shall be construed to have the same meaning and effect and to
refer to any and all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.







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          SECTION 2. Lien Priorities.




          2.1. Subordination of Liens. Notwithstanding (i) the date, time, method, manner or
order of filing or recordation of any document or instrument or grant, attachment or perfection
(including any defect or deficiency or alleged defect or deficiency in any of the foregoing) of any
Liens granted to the Second Priority Secured Parties on the Common Collateral or of any Liens
granted to any First Lien Agent or Senior Lenders on the Common Collateral, (ii) any provision of
the UCC, the Bankruptcy Code, or any applicable law or the Second Priority Documents or the Senior
Lender Documents, (iii) whether any First Lien Agent, either directly or through agents, holds
possession of, or has control over, all or any part of the Common Collateral, (iv) the fact that
any such Liens may be subordinated, voided, avoided, invalidated or lapsed or (v) any other
circumstance of any kind or nature whatsoever, each Second Priority Agent, on behalf of itself and
each applicable Second Priority Secured Party, hereby agrees that: (a) any Lien on the Common
Collateral securing any Senior Lender Claims now or hereafter held by or on behalf of any First
Lien Agent or any Senior Lenders or any agent or trustee therefor regardless of how acquired,
whether by grant, statute, operation of law, subrogation or otherwise, shall have priority over and
be senior in all respects and prior to any Lien on the Common Collateral securing any Second
Priority Claims and (b) any Lien on the Common Collateral securing any Second Priority Claims now
or hereafter held by or on behalf of the Trustee or any Second Priority Secured Parties or any
agent or trustee therefor regardless of how acquired, whether by grant, statute, operation of law,
subrogation or otherwise, shall be junior and subordinate in all respects to all Liens on the
Common Collateral securing any Senior Lender Claims. All Liens on the Common Collateral securing
any Senior Lender Claims shall be and remain senior in all respects and prior to all Liens on the
Common Collateral securing any Second Priority Claims for all purposes, whether or not such Liens
securing any Senior Lender Claims are subordinated to any Lien securing any other obligation of the
Company, any other Grantor or any other Person.




          2.2. Prohibition on Contesting Liens. Each Second Priority Agent, for itself and on
behalf of each applicable Second Priority Secured Party, and each First Lien Agent, for itself and
on behalf of each Senior Lender in respect of which it serves as First Lien Agent, agrees that it
shall not (and hereby waives any right to) take any action to challenge, contest or support any
other Person in contesting or challenging, directly or indirectly, in any proceeding (including any
Insolvency or Liquidation Proceeding), the validity, perfection, priority or enforceability of (a)
a Lien securing any Senior Lender Claims held (or purported to be held) by or on behalf of any
First Lien Agent or any of the Senior Lenders or any agent or trustee therefor in any Senior Lender
Collateral or (b) a Lien securing any Second Priority Claims held (or purported to be held) by or
on behalf of any Second Priority Secured Party in the Common Collateral, as the case may be;
provided, however, that nothing in this Agreement shall be construed to prevent or impair the
rights of any First Lien Agent or any Senior Lender to enforce this Agreement (including the
priority of the Liens securing the Senior Lender Claims as provided in Section 2.1) or any of the
Senior Lender Documents.




          2.3. No New Liens. So long as the Discharge of Senior Lender Claims has not occurred
and subject to Section 6, each Second Priority Agent agrees, for itself and on behalf of each
applicable Second Priority Secured Party, whether or not any Insolvency or Liquidation Proceeding
has been commenced by or against the Company or any other Grantor, that it shall






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not acquire or hold any Lien on any assets of the Company or any other Grantor securing any
Second Priority Claims that are not also subject to the first-priority Lien in respect of the
Senior Lender Claims under the Senior Lender Documents. If any Second Priority Agent or any Second
Priority Secured Party shall (nonetheless and in breach hereof) acquire or hold any Lien on any
collateral that is not also subject to the first-priority Lien in respect of the Senior Lender
Claims under the Senior Lender Documents, then such Second Priority Agent shall, without the need
for any further consent of any party and notwithstanding anything to the contrary in any other
document, be deemed to also hold and have held such lien for the benefit of the First Lien Agents
as security for the Senior Lender Claims (subject to the lien priority and other terms hereof) and
shall promptly notify each First Lien Agent in writing of the existence of such Lien and in any
event take such actions as may be requested by any First Lien Agent to assign or release such Liens
to the First Lien Agents (and/or each of its designee) as security for the applicable Senior Lender
Claims.




          2.4. Perfection of Liens. Neither the First Lien Agents nor the Senior Lenders shall
be responsible for perfecting and maintaining the perfection of Liens with respect to the Common
Collateral for the benefit of the Second Priority Agents and the Second Priority Secured Parties.
Neither the Second Priority Agents nor the Second Priority Secured Parties shall be responsible for
perfecting and maintaining the perfection of Liens with respect to the Common Collateral for the
benefit of the First Lien Agents and the Senior Lenders. The provisions of this Agreement are
intended solely to govern the respective Lien priorities as between the Senior Lenders and the
Second Priority Secured Parties and shall not impose on the First Lien Agents, the Second Priority
Agents, the Second Priority Secured Parties or the Senior Lenders or any agent or trustee therefor
any obligations in respect of the disposition of proceeds of any Common Collateral which would
conflict with prior perfected claims therein in favor of any other Person or any order or decree of
any court or governmental authority or any applicable law.




          2.5. Waiver of Marshalling. Until the Discharge of Senior Lender Claims, each Second
Priority Agent, on behalf of itself and the applicable Second Priority Secured Parties, agrees not
to assert and hereby waives, to the fullest extent permitted by law, any right to demand, request,
plead or otherwise assert or otherwise claim the benefit of, any marshalling, appraisal, valuation
or other similar right that may otherwise be available under applicable law with respect to the
Common Collateral or any other similar rights a junior secured creditor may have under applicable
law.




          SECTION 3. Enforcement.




          3.1. Exercise of Remedies.




     (a) So long as the Discharge of Senior Lender Claims has not occurred, whether or not any
Insolvency or Liquidation Proceeding has been commenced by or against the Company or any other
Grantor, (i) no Second Priority Agent or any Second Priority Secured Party will (x) exercise or
seek to exercise any rights or remedies (including setoff or recoupment) with respect to any Common
Collateral or any other security in respect of any applicable Second Priority Claims, or exercise
any right under any lockbox agreement, control agreement, landlord waiver or bailee’s letter or
similar agreement or arrangement, or institute any action or



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proceeding with
respect to such rights or remedies (including any action of foreclosure), (y) contest, protest
or object to any foreclosure proceeding or action brought with respect to the Common Collateral or
any other collateral by any First Lien Agent or any Senior Lender in respect of the Senior Lender
Claims, the exercise of any right by any First Lien Agent or any Senior Lender (or any agent or
sub-agent on their behalf) in respect of the Senior Lender Claims under any lockbox agreement,
control agreement, landlord waiver or bailee’s letter or similar agreement or arrangement to which
any Second Priority Agent or any Second Priority Secured Party either is a party or may have rights
as a third party beneficiary, or any other exercise by any such party, of any rights and remedies
relating to the Common Collateral or any other collateral under the Senior Lender Documents or
otherwise in respect of Senior Lender Claims, or (z) object to the forbearance by the Senior
Lenders from bringing or pursuing any foreclosure proceeding or action or any other exercise of any
rights or remedies relating to the Common Collateral or any other collateral in respect of Senior
Lender Claims and (ii) except as otherwise provided herein, each First Lien Agent and the Senior
Lenders shall have the exclusive right to enforce rights, exercise remedies (including setoff and
the right to credit bid their debt) and make determinations regarding the release, disposition or
restrictions with respect to the Common Collateral without any consultation with or the consent of
any Second Priority Agent or any Second Priority Secured Party; provided, however, that (A) in any
Insolvency or Liquidation Proceeding commenced by or against the Company or any other Grantor, each
Second Priority Agent may file a proof of claim or statement of interest with respect to the
applicable Second Priority Claims (B) each Second Priority Agent may take any action (not adverse
to the prior Liens on the Common Collateral securing the Senior Lender Claims, or the rights of
either First Lien Agent or the Senior Lenders to exercise remedies in respect thereof) in order to
create, prove, perfect, preserve or protect (but not enforce) its rights in, and perfection and
priority of its Lien on, the Common Collateral and (C) each Second Priority Agent may file any
pleadings, objections, motions or agreements which assert rights available to unsecured creditors
of the Company or any other Grantor arising under any Insolvency or Liquidation Proceeding or
applicable non-bankruptcy law. In exercising rights and remedies with respect to the Senior Lender
Collateral, each First Lien Agent and the Senior Lenders may enforce the provisions of the Senior
Lender Documents and exercise remedies thereunder, all in such order and in such manner as they may
determine in the exercise of their sole discretion. Such exercise and enforcement shall include
the rights of an agent appointed by them to sell or otherwise dispose of Common Collateral or other
collateral upon foreclosure, to incur expenses in connection with such sale or disposition, and to
exercise all the rights and remedies of a secured lender under the uniform commercial code of any
applicable jurisdiction and of a secured creditor under Bankruptcy Laws of any applicable
jurisdiction.




     (b) So long as the Discharge of Senior Lender Claims has not occurred, each Second Priority
Agent, on behalf of itself and each applicable Second Priority Secured Party, agrees that it will
not take or receive any Common Collateral or other collateral or any proceeds of Common Collateral
or other collateral in connection with the exercise of any right or remedy (including setoff or
recoupment) with respect to any Common Collateral or other collateral in respect of the applicable
Second Priority Claims. Without limiting the generality of the foregoing, unless and until the
Discharge of Senior Lender Claims has occurred, except as expressly provided in the proviso in
clause (ii) of Section 3.1(a), the sole right of the Second Priority Agents and the Second Priority
Secured Parties with respect to the Common Collateral or any other collateral is to hold a Lien on
the Common Collateral or such other collateral in respect of the applicable



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Second Priority Claims pursuant to the Second Priority Documents, as applicable, for the
period and to the extent granted therein and to receive a share of the proceeds thereof, if any,
after the Discharge of Senior Lender Claims has occurred.




     (c) Subject to the proviso in clause (ii) of Section 3.1(a) above, (i) each Second Priority
Agent, for itself and on behalf of each applicable Second Priority Secured Party, agrees that no
Second Priority Agent or any Second Priority Secured Party will take any action that would hinder
any exercise of remedies undertaken by any First Lien Agent or Senior Lenders with respect to the
Common Collateral or any other collateral under the Senior Lender Documents, including any sale,
lease, exchange, transfer or other disposition of the Common Collateral or such other collateral,
whether by foreclosure or otherwise, and (ii) each Second Priority Agent, for itself and on behalf
of each applicable Second Priority Secured Party, hereby waives any and all rights it or any Second
Priority Secured Party may have as a junior lien creditor or otherwise to object to the manner in
which any First Lien Agent or Senior Lenders seek to enforce or collect the Senior Lender Claims or
the Liens granted in any of the Senior Lender Collateral, regardless of whether any action or
failure to act by or on behalf of any First Lien Agent or Senior Lenders is adverse to the
interests of the Second Priority Secured Parties.



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



          3.2. Cooperation. Subject to the proviso in clause (ii) of Section 3.1(a), each
Second Priority Agent, on behalf of itself and each applicable Second Priority Secured Party,
agrees that, unless and until the Discharge of Senior Lender Claims has occurred, it will not
commence, or join with any Person (other than the Senior Lenders and any First Lien Agent upon the
request thereof) in commencing, any enforcement, collection, execution, levy or foreclosure action
or proceeding with respect to any Lien held by it in the Common Collateral or any other collateral
under any of the applicable Second Priority Documents or otherwise in respect of the applicable
Second Priority Claims relating to the Common Collateral.




          3.3. Actions Upon Breach. If any Second Priority Secured Party, in contravention of
the terms of this Agreement, in any way takes, attempts to or threatens to take any action with
respect to the Common Collateral (including, without limitation, any attempt to realize upon or
enforce any remedy with respect to this Agreement), this Agreement shall create an irrebuttable
presumption and admission by such Second Priority Secured Party that relief against such Second
Priority Secured Party by injunction, specific performance and/or other appropriate equitable
relief is necessary to prevent irreparable harm to the Senior Lenders, it being understood and
agreed by each Second Priority Agent on behalf of each applicable Second Priority Secured Party
that (i) the Senior Lenders’ damages from its actions may at that time be difficult to ascertain
and may be irreparable, and (ii) each Second Priority Secured Party waives any defense that the
Grantors and/or the Senior Lenders cannot demonstrate damage and/or can be made whole by the
awarding of damages.







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          SECTION 4. Payments.




          4.1. Application of Proceeds. So long as the Discharge of Senior Lender Claims has
not occurred, the Common Collateral and any other collateral in respect of the Second Priority
Claims or proceeds thereof received in connection with the sale or other disposition of, or
collection on, such Common Collateral or other collateral upon the exercise of remedies as a
secured party, shall be applied by the First Lien Agents to the Senior Lender Claims in such order
as specified in the relevant Senior Lender Documents until the Discharge of Senior Lender Claims
has occurred. Upon the Discharge of Senior Lender Claims, subject to Section 5.7 hereof, each of
the First Lien Agents shall deliver promptly to the Second Priority Designated Agent any Common
Collateral or proceeds thereof held by it in the same form as received, with any necessary
endorsements or as a court of competent jurisdiction may otherwise direct to be applied by the
Second Priority Designated Agent ratably to the Second Priority Claims in such order as specified
in the Second Priority Documents.




          4.2. Payments Over. Any Common Collateral or other collateral in respect of the
Second Priority Claims or proceeds thereof received by any Second Priority Agent or any Second
Priority Secured Party in connection with the exercise of any right or remedy (including setoff or
recoupment) relating to the Common Collateral or such other collateral prior to the Discharge of
Senior Lender Claims shall be segregated and held in trust for the benefit of and forthwith paid
over to the First Priority Designated Agent (and/or its designees) for the benefit of the Senior
Lenders in the same form as received, with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct. The First Lien Agents are each hereby individually authorized
to make any such endorsements as agent for any Second Priority Agent or any such Second Priority
Secured Party. This authorization is coupled with an interest and is irrevocable.




          SECTION 5. Other Agreements.




          5.1. Releases.




     (a) If, at any time any Grantor or the holder of any Senior Lender Claim delivers notice to
each Second Priority Agent that any specified Common Collateral (including all or substantially all
of the equity interests of a Grantor or any of its Subsidiaries) (including for such purpose, in
the case of the sale of equity interests in any Subsidiary, any Common Collateral held by such
Subsidiary or any direct or indirect Subsidiary thereof) is (A) sold, transferred or otherwise
disposed of:



          (i) by the owner of such Common Collateral in a transaction permitted under each Credit
Agreement, the Other First Priority Lien Obligations Credit Documents, the Second Priority Senior
Secured Notes Indenture and each other Senior Lender Document and Second Priority Document (if
any); or




          (ii) during the existence of any Event of Default under (and as defined in) any Credit
Agreement or the Other First Priority Lien Obligations Credit Documents to the extent that any of
the First Lien Agents has consented to such sale, transfer or disposition; or







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(B) or otherwise released as permitted by each Credit Agreement and the Other First Priority Lien
Obligations Credit Documents,



then (whether or not any Insolvency or Liquidation Proceeding is pending at the time) the Liens in
favor of the Second Priority Secured Parties upon such Common Collateral will automatically be
released and discharged as and when, but only to the extent, such Liens on such Common Collateral
securing Senior Lender Claims are released and discharged. Upon delivery to each Second Priority
Agent of a notice from any First Lien Agent stating that any release of Liens securing or
supporting the Senior Lender Claims has become effective (or shall become effective upon each
Second Priority Agent’s release) (whether in connection with a sale of such assets by the relevant
Grantor pursuant to the preceding sentence or otherwise), each Second Priority Agent will promptly
execute and deliver such instruments, releases, termination statements or other documents delivered
to it confirming such release on customary terms at the expense of the Company. In the case of the
sale of all or substantially all of the capital stock of a Grantor or any of its Subsidiaries, the
guarantee in favor of the Second Priority Secured Parties, if any, made by such Grantor or
Subsidiary will automatically be released and discharged as and when, but only to the extent, the
guarantee by such Grantor or Subsidiary of Senior Lender Claims is released and discharged.




     (b) Each Second Priority Agent, until Discharge of Senior Lender Claims, for itself and on
behalf of each applicable Second Priority Secured Party, hereby irrevocably constitutes and
appoints each First Lien Agent and any officer or agent of such First Lien Agent, with full power
of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority
in the place and stead of each Second Priority Agent or such holder or in such First Lien Agent’s
own name, from time to time in such First Lien Agent’s discretion, for the purpose of carrying out
the terms of this Section 5.1, to take any and all appropriate action and to execute any and all
documents and instruments that may be necessary or desirable to accomplish the purposes of this
Section 5.1, including any termination statements, endorsements or other instruments of transfer or
release.



     (c) Unless and until the Discharge of Senior Lender Claims has occurred, each Second Priority
Agent, for itself and on behalf of each applicable Second Priority Secured Party, hereby consents
to the application, whether prior to or after a default, of proceeds of Common Collateral or other
collateral to the repayment of Senior Lender Claims pursuant to the Senior Lender Documents;
provided that nothing in this Section 5.1(c) shall be construed to prevent or impair the rights of
the Second Priority Agents or the Second Priority Secured Parties to receive proceeds in connection
with the Second Priority Claims not otherwise in contravention of this Agreement.



          5.2. Insurance. Unless and until the Discharge of Senior Lender Claims has occurred,
each First Lien Agent and the Senior Lenders shall have the sole and exclusive right, subject to
the rights of the Grantors under the Senior Lender Documents, to adjust settlement for any
insurance policy covering the Common Collateral or any other collateral in respect of the Second
Priority Claims in the event of any loss thereunder and to approve any award granted in any
condemnation or similar proceeding affecting the Common Collateral or such other collateral. Unless
and until the Discharge of Senior Lender Claims has occurred, all proceeds of any such policy and
any such award if in respect of the Common Collateral or such other






14









 







collateral shall be paid (a) first, prior to the occurrence of the Discharge of Senior Lender
Claims, to the First Lien Agents for the benefit of Senior Lenders pursuant to the terms of the
Senior Lender Documents, (b) second, after the occurrence of the Discharge of Senior Lender Claims,
to the Second Priority Agents for the benefit of the Second Priority Secured Parties pursuant to
the terms of the applicable Second Priority Documents and (c) third, if no Second Priority Claims
are outstanding, to the owner of the subject property, such other person as may be entitled thereto
or as a court of competent jurisdiction may otherwise direct. If any Second Priority Agent or any
Second Priority Secured Party shall, at any time, receive any proceeds of any such insurance policy
or any such award in contravention of this Agreement, it shall pay such proceeds over to any First
Lien Agent in accordance with the terms of Section 4.2.




          5.3. Amendments to Second Priority Collateral Documents.




     (a) So long as the Discharge of Senior Lender Claims has not occurred, without the prior
written consent of the First Lien Agents, no Second Priority Collateral Document may be amended,
supplemented or otherwise modified or entered into to the extent such amendment, supplement or
modification, or the terms of any new Second Priority Collateral Document, would be prohibited by
or inconsistent with any of the terms of this Agreement. Each applicable Second Priority
Collateral Document executed as of the date hereof shall include the following language (or
language to similar effect approved by the First Lien Agents):



     “Notwithstanding anything herein to the contrary, (i) the liens and security interests granted
to the [applicable Second Priority Agent] pursuant to this agreement are expressly subject and
subordinate to the liens and security interests granted to Credit Suisse AG, Cayman Islands Branch
(f/k/a Credit Suisse, Cayman Islands Branch), as collateral agent (and its permitted successors),
for the benefit of the secured parties referred to below, pursuant to the Guarantee and Collateral
Agreement dated as of May 29, 2007 (as amended, amended and restated, supplemented or otherwise
modified from time to time), from the Company and the other “Pledgors” referred to therein, in
favor of Credit Suisse, AG Cayman Islands Branch (f/k/a Credit Suisse, Cayman Islands Branch), as
collateral agent for the benefit of the secured parties referred to therein, [and to the liens and
security interests granted to [Other First Priority Lien Obligations Collateral Agent] pursuant to
[Other First Priority Lien Obligations Security Document] (as amended, supplemented or otherwise
modified from time to time)], and (ii) the exercise of any right or remedy by the [applicable
Second Priority Agent] hereunder is subject to the limitations and provisions of the Intercreditor
Agreement dated as of March 4, 2011 (as amended, restated, supplemented or otherwise modified from
time to time, the “Intercreditor Agreement”), by and among Credit Suisse AG, Cayman Islands Branch,
in its capacity as Credit Agreement Agent, The Bank of New York Mellon Trust Company, N.A., in its
capacity as Trustee, Holdings, the Company and the subsidiaries party thereto. In the event of any
conflict between the terms of the Intercreditor Agreement and the terms of this agreement, the
terms of the Intercreditor Agreement shall govern.”



     (b) In the event that the First Lien Agents or the Senior Lenders enter into any amendment,
waiver or consent in respect of or replace any of the Senior Collateral Document for the purpose of
adding to, or deleting from, or waiving or consenting to any departures from any provisions of, any
Senior Collateral Document or changing in any manner the rights of the First Lien Agents, the
Senior Lenders, the Company or any other Grantor thereunder (including the



15









 




release of any Liens in Senior Lender Collateral), then such amendment, waiver or consent
shall apply automatically to any comparable provision of each Comparable Second Priority Collateral
Document without the consent of any Second Priority Agent or any Second Priority Secured Party and
without any action by any Second Priority Agent, any Second Priority Senior Secured Party, the
Company or any other Grantor; provided, that such amendment, waiver or consent does not materially
adversely affect the rights of the Second Priority Secured Parties or the interests of the Second
Priority Secured Parties in the Second Priority Collateral and not the other creditors of the
Company or such Grantor, as the case may be, that have a security interest in the affected
collateral in a like or similar manner (without regard to the fact that the Lien of such Senior
Collateral Document is senior to the Lien of the Comparable Second Priority Collateral Document).
The relevant First Lien Agent may give written notice of such amendment, waiver or consent to each
Second Priority Agent; provided that the failure to give such notice shall not affect the
effectiveness of such amendment, waiver or consent with respect to the provisions of any Second
Priority Collateral Document as set forth in this Section 5.3(b).




     (c) Anything contained herein to the contrary notwithstanding, until the Discharge of Senior
Lender Claims has occurred, no Second Priority Collateral Document shall be entered into unless the
collateral covered thereby is also subject to a perfected first-priority interest in favor of the
First Lien Agents for the benefit of the Senior Lenders pursuant to the Senior Collateral
Documents.



          5.4. Rights As Unsecured Creditors. Notwithstanding anything to the contrary in this
Agreement, the Second Priority Agents and the Second Priority Secured Parties may exercise rights
and remedies as an unsecured creditor against the Company or any Grantor that has guaranteed the
Second Priority Claims in accordance with the terms of the applicable Second Priority Documents and
applicable law, in each case to the extent not inconsistent with the provisions of this Agreement.
Nothing in this Agreement shall prohibit the receipt by any Second Priority Agent or any Second
Priority Secured Party of the required payments of interest and principal so long as such receipt
is not the direct or indirect result of (a) the exercise by any Second Priority Agent or any Second
Priority Secured Party of rights or remedies as a secured creditor in respect of Common Collateral
or other collateral or (b) enforcement in contravention of this Agreement of any Lien in respect of
Second Priority Claims held by any of them. In the event any Second Priority Agent or any Second
Priority Secured Party becomes a judgment lien creditor or other secured creditor in respect of
Common Collateral or other collateral as a result of its enforcement of its rights as an unsecured
creditor in respect of Second Priority Claims or otherwise, such judgment or other lien shall be
subordinated to the Liens securing Senior Lender Claims on the same basis as the other Liens
securing the Second Priority Claims are so subordinated to such Liens securing Senior Lender Claims
under this Agreement. Nothing in this Agreement impairs or otherwise adversely affects any rights
or remedies the First Lien Agents or the Senior Lenders may have with respect to the Senior Lender
Collateral.




          5.5. First Lien Agents as Gratuitous Bailees for Perfection.




     (a) Each First Lien Agent agrees to hold the Pledged Collateral that is part of the Common
Collateral that is in its possession or control (or in the possession or control of its agents or
bailees) as gratuitous bailee for each Second Priority Agent and any assignee solely for the
purpose of perfecting the security interest granted in such Pledged Collateral pursuant to the



16









 




Second Priority Collateral Agreements, subject to the terms and conditions of this Section 5.5
(such bailment being intended, among other things, to satisfy the requirements of Sections
8-106(d)(3), 8-301(a)(2) and 9-313(c) of the UCC).




     (b) In the event that any First Lien Agent (or its agent or bailees) has Lien filings against
Intellectual Property (as defined in the Senior Collateral Agreement) that is part of the Common
Collateral that are necessary for the perfection of Liens in such Common Collateral, such First
Lien Agent agrees to hold such Liens as gratuitous bailee for each Second Priority Agent and any
assignee solely for the purpose of perfecting the security interest granted in such Liens pursuant
to the Second Priority Collateral Agreements, subject to the terms and conditions of this Section
5.5.



     (c) Except as otherwise specifically provided herein (including Sections 3.1 and 4.1), until
the Discharge of Senior Lender Claims has occurred, any First Lien Agent shall be entitled to deal
with the Pledged Collateral in accordance with the terms of the Senior Lender Documents as if the
Liens under the Second Priority Collateral Documents did not exist. The rights of the Second
Priority Agents and the Second Priority Secured Parties with respect to such Pledged Collateral
shall at all times be subject to the terms of this Agreement.



     (d) The First Lien Agents shall have no obligation whatsoever to any Second Priority Agent or
any Second Priority Secured Party to assure that the Pledged Collateral is genuine or owned by the
Grantors or to protect or preserve rights or benefits of any Person or any rights pertaining to the
Common Collateral except as expressly set forth in this Section 5.5. The duties or responsibilities
of the First Lien Agents under this Section 5.5 shall be limited solely to holding the Pledged
Collateral as gratuitous bailee for each Second Priority Agent for purposes of perfecting the Lien
held by the Second Priority Secured Parties.



     (e) The First Lien Agents shall not have by reason of the Second Priority Collateral
Documents or this Agreement or any other document a fiduciary relationship in respect of any Second
Priority Agent or any Second Priority Secured Party and the Second Priority Agents and the Second
Priority Secured Parties hereby waive and release the First Lien Agents from all claims and
liabilities arising pursuant to the First Lien Agents’ role under this Section 5.5, as agent and
gratuitous bailee with respect to the Common Collateral.



     (f) Upon the Discharge of Senior Lender Claims, the relevant First Lien Agent shall deliver
to the Second Priority Designated Agent the remaining Pledged Collateral (if any) and to the extent
such Pledged Collateral is in the possession or control of such First Lien Agent (or its agents or
bailees) together with any necessary endorsements (or otherwise allow the Second Priority
Designated Agent to obtain control of such Pledged Collateral) or as a court of competent
jurisdiction may otherwise direct. The Company shall take such further action as is required to
effectuate the transfer contemplated hereby and shall indemnify the First Lien Agents for loss or
damage suffered by any First Lien Agent as a result of such transfer except for loss or damage
suffered by any First Lien Agent as a result of its own willful misconduct, gross negligence or bad
faith. The First Lien Agents have no obligation to follow instructions from any Second Priority
Agent in contravention of this Agreement.



17









 





     (g) Neither the First Lien Agents nor the Senior Lenders shall be required to marshal any
present or future collateral security for the Company’s or its Subsidiaries’ obligations to the
First Lien Agents or the Senior Lenders under the Credit Agreement or the Senior Collateral
Documents or any assurance of payment in respect thereof or to resort to such collateral security
or other assurances of payment in any particular order, and all of their rights in respect of such
collateral security or any assurance of payment in respect thereof shall be cumulative and in
addition to all other rights, however existing or arising.



          5.6. Second Priority Designated Agent as Gratuitous Bailee for Perfection.




     (a) Upon the Discharge of Senior Lender Claims, the Second Priority Designated Agent agrees
to hold the Pledged Collateral that is part of the Common Collateral in its possession or control
(or in the possession or control of its agents or bailees) as gratuitous bailee for the other
Second Priority Agents and any assignee solely for the purpose of perfecting the security interest
granted in such Pledged Collateral pursuant to the applicable Second Priority Collateral Agreement,
subject to the terms and conditions of this Section 5.6.



     (b) In the event that the Second Priority Designated Agent (or its agent or bailees) has Lien
filings against Intellectual Property (as defined in the Senior Collateral Agreement) that is part
of the Common Collateral that are necessary for the perfection of Liens in such Common Collateral,
upon the Discharge of Senior Lender Claims, the Second Priority Designated Agent agrees to hold
such Liens as gratuitous bailee for the other Second Priority Agents and any assignee solely for
the purpose of perfecting the security interest granted in such Liens pursuant to the applicable
Second Priority Collateral Agreement, subject to the terms and conditions of this Section 5.6.



     (c) The Second Priority Designated Agent, in its capacity as gratuitous bailee, shall have no
obligation whatsoever to the other Second Priority Agents to assure that the Pledged Collateral is
genuine or owned by the Grantors or to protect or preserve rights or benefits of any Person or any
rights pertaining to the Common Collateral except as expressly set forth in this Section 5.6. The
duties or responsibilities of the Second Priority Designated Agent under this Section 5.6 upon the
Discharge of Senior Lender Claims shall be limited solely to holding the Pledged Collateral as
gratuitous bailee for the other Second Priority Agents for purposes of perfecting the Lien held by
the applicable Second Priority Secured Parties.



     (d) The Second Priority Designated Agent shall not have by reason of the Second Priority
Collateral Documents or this Agreement or any other document a fiduciary relationship in respect of
the other Second Priority Agents (or the Second Priority Secured Parties for which such other
Second Priority Agents are agents) and the other Second Priority Agents hereby waive and release
the Second Priority Designated Agent from all claims and liabilities arising pursuant to the Second
Priority Designated Agent’s role under this Section 5.6, as agent and gratuitous bailee with
respect to the Common Collateral.



     (e) In the event that the Second Priority Designated Agent shall cease to be so designated
the Second Priority Designated Agent pursuant to the definition of such term, the then Second
Priority Designated Agent shall deliver to the successor Second Priority Designated Agent, to the
extent that it is legally permitted to do so, the remaining Pledged Collateral (if any), together



18









 




with any necessary endorsements (or otherwise allow the successor Second Priority Designated
Agent to obtain control of such Pledged Collateral) or as a court of competent jurisdiction may
otherwise direct, and such successor Second Priority Designated Agent shall perform all duties of
the Second Priority Designated Agent as set forth herein. The Company shall take such further
action as is required to effectuate the transfer contemplated hereto and shall indemnify the Second
Priority Designated Agent for loss or damage suffered by the Second Priority Designated Agent as a
result of such transfer except for loss or damage suffered by the Second Priority Designated Agent
as a result of its own willful misconduct, gross negligence or bad faith. The Second Priority
Designated Agent has no obligation to follow instructions from the successor Second Priority
Designated Agent in contravention of this Agreement.




          5.7. Release Upon Discharge of Senior Lender Claims; No Release If Event of Default;
Reinstatement.




     (a) Except as otherwise provided in clause (b) and (c) of this Section 5.7, upon the
Discharge of Senior Lender Claims and the concurrent release of the Liens securing Senior Lender
Claims, the Liens in favor of the Second Priority Secured Parties shall automatically be released
and discharged.



     (b) Notwithstanding any other provisions contained in this Agreement, if an Event of Default
(as defined in the Second Priority Senior Secured Notes Indenture or any other Second Priority
Document, as applicable) exists on the date of Discharge of Senior Lender Claims, the Second
Priority Liens on the Second Priority Collateral securing the Second Priority Claims relating to
such Event of Default will not be released, except to the extent such Second Priority Collateral or
any portion thereof was disposed of in order to repay Senior Lender Claims secured by such Second
Priority Collateral, and thereafter the applicable Second Priority Agent will have the right to
foreclose upon such Second Priority Collateral (but in such event, the Liens on such Second
Priority Collateral securing the applicable Second Priority Claims will be released when such Event
of Default and all other Events of Default under the Second Priority Senior Secured Notes Indenture
or any other Second Priority Document, as applicable, cease to exist).



     (c) If, at any time after the Discharge of Senior Lender Claims has occurred, the Company
incurs and designates any Senior Lender Claims, then such Discharge of Senior Lender Claims shall
automatically be deemed not to have occurred for all purposes of this Agreement (other than with
respect to any actions taken prior to the date of such designation as a result of the occurrence of
such first Discharge of Senior Lender Claims), and the applicable agreement governing such Senior
Lender Claims shall automatically be treated as the Credit Agreement for all purposes of this
Agreement, including for purposes of the Lien priorities and rights in respect of Common Collateral
set forth herein and the granting by the First Lien Agents of amendments, waivers and consents
hereunder. Upon receipt of notice of such designation (including the identity of any new First
Lien Agent), each Second Priority Agent shall promptly (i) enter into such documents and agreements
(at the expense of the Company), including amendments or supplements to this Agreement, as the
Company or such new First Lien Agent shall reasonably request in writing in order to provide the
new First Lien Agent the rights of the First Lien Agents contemplated hereby and (ii) to the extent
then held by any Second Priority Agent, deliver to either First Lien Agent the Pledged Collateral
that is Common Collateral



19









 




together with any necessary endorsements (or otherwise allow such First Lien Agent to obtain
possession or control of such Pledged Collateral).




          SECTION 6. Insolvency or Liquidation Proceedings.




          6.1. Financing Issues. If the Company or any other Grantor shall be subject to any
Insolvency or Liquidation Proceeding and any First Lien Agent shall desire to permit the use of
cash collateral or to permit the Company or any other Grantor to obtain financing under Section 363
or Section 364 of Title 11 of the United States Code or any similar provision in any Bankruptcy Law
(“DIP Financing”), then each Second Priority Agent, on behalf of itself and each applicable Second
Priority Secured Party, agrees that it will raise no objection to, and will not support any
objection to, and will not otherwise contest (a) such use of cash collateral or DIP Financing and
will not request adequate protection or any other relief in connection therewith (except to the
extent permitted by Section 6.3) and, to the extent the Liens securing the Senior Lender Claims
under the Senior Lender Documents are subordinated or pari passu with such DIP Financing, will
subordinate its Liens in the Common Collateral and any other collateral to such DIP Financing (and
all Obligations relating thereto) on the same basis as the other Liens securing the Second Priority
Claims are so subordinated to Liens securing Senior Lender Claims under this Agreement, (b) any
motion for relief from the automatic stay or from any injunction against foreclosure or enforcement
in respect of Senior Lender Claims made by any First Lien Agent or any holder of Senior Lender
Claims, (c) any lawful exercise by any holder of Senior Lender Claims of the right to credit bid
Senior Lender Claims at any sale in foreclosure of Senior Lender Collateral, (d) any other request
for judicial relief made in any court by any holder of Senior Lender Claims relating to the lawful
enforcement of any Lien on Senior Lender Collateral or (e) any order relating to a sale of assets
of any Grantor for which any First Lien Agent has consented that provides, to the extent the sale
is to be free and clear of Liens, that the Liens securing the Senior Lender Claims and the Second
Priority Claims will attach to the proceeds of the sale on the same basis of priority as the Liens
securing the Senior Lender Collateral do to the Liens securing the Second Priority Collateral in
accordance with this Agreement.




          6.2. Relief from the Automatic Stay. Until the Discharge of Senior Lender Claims has
occurred, each Second Priority Agent, on behalf of itself and each applicable Second Priority
Secured Party, agrees that none of them shall seek relief from the automatic stay or any other stay
in any Insolvency or Liquidation Proceeding in respect of the Common Collateral or any other
collateral, without the prior written consent of all First Lien Agents.




          6.3. Adequate Protection. Each Second Priority Agent, on behalf of itself and each
applicable Second Priority Secured Party, agrees that none of them shall contest (or support any
other Person contesting) (a) any request by any First Lien Agent or Senior Lenders for adequate
protection or (b) any objection by any First Lien Agent or Senior Lenders to any motion, relief,
action or proceeding based on such First Lien Agent’s or the Senior Lenders’ claiming a lack of
adequate protection. Notwithstanding the foregoing, in any Insolvency or Liquidation Proceeding,
(i) if the Senior Lenders (or any subset thereof) are granted adequate protection in the form of
additional collateral in connection with any DIP Financing or use of cash collateral under Section
363 or Section 364 of Title 11 of the United States Bankruptcy Code or any similar Bankruptcy Law,
then each Second Priority Agent, on behalf of itself and any applicable Second Priority Secured
Party, (A) may seek or request adequate protection in the






20









 







form of a replacement Lien on such additional collateral, which Lien is subordinated to the
Liens securing the Senior Lender Claims and such DIP Financing (and all Obligations relating
thereto) on the same basis as the other Liens securing the Second Priority Claims are so
subordinated to the Liens securing Senior Lender Claims under this Agreement and (B) agrees that it
will not seek or request, and will not accept, adequate protection in any other form, and (ii) in
the event any Second Priority Agent, on behalf of itself or any applicable Second Priority Secured
Party, seeks or requests adequate protection and such adequate protection is granted in the form of
additional collateral, then such Second Priority Agent, on behalf of itself or each such Second
Priority Secured Party, agrees that the First Lien Agents shall also be granted a senior Lien on
such additional collateral as security for the applicable Senior Lender Claims and any such DIP
Financing and that any Lien on such additional collateral securing the Second Priority Claims shall
be subordinated to the Liens on such collateral securing the Senior Lender Claims and any such DIP
Financing (and all Obligations relating thereto) and any other Liens granted to the Senior Lenders
as adequate protection on the same basis as the other Liens securing the Second Priority Claims are
so subordinated to such Liens securing Senior Lender Claims under this Agreement.




          6.4. Avoidance Issues. If any Senior Lender is required in any Insolvency or
Liquidation Proceeding or otherwise to turn over or otherwise pay to the estate of the Company or
any other Grantor (or any trustee, receiver or similar person therefor), because the payment of
such amount was declared to be fraudulent or preferential in any respect or for any other reason,
any amount (a “Recovery”), whether received as proceeds of security, enforcement of any right of
setoff or otherwise, then as among the parties hereto the Senior Lender Claims shall be deemed to
be reinstated to the extent of such Recovery and to be outstanding as if such payment had not
occurred and the Senior Lenders shall be entitled to a Discharge of Senior Lender Claims with
respect to all such recovered amounts and shall have all rights hereunder until such time. If this
Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in
full force and effect, and such prior termination shall not diminish, release, discharge, impair or
otherwise affect the obligations of the parties hereto.




          6.5. Application. This Agreement shall be applicable prior to and after the
commencement of any Insolvency or Liquidation Proceeding. All references herein to any Grantor
shall apply to any trustee for such Person and such Person as debtor in possession. The relative
rights as to the Common Collateral and other collateral and proceeds thereof shall continue after
the filing thereof on the same basis as prior to the date of the petition, subject to any court
order approving the financing of, or use of cash collateral by, any Grantor.




          6.6. Waivers. Until the Discharge of Senior Lender Claims has occurred, each Second
Priority Agent, on behalf of itself and each applicable Second Priority Secured Party, (a) will not
assert or enforce any claim under Section 506(c) of the United States Bankruptcy Code senior to or
on a parity with the Liens securing the Senior Lender Claims for costs or expenses of preserving or
disposing of any Common Collateral or other collateral, and (b) waives any claim it may now or
hereafter have arising out of the election by any Senior Lender of the application of Section
1111(b)(2) of the Bankruptcy Code.







21









 








          SECTION 7. Reliance; Waivers; etc.




          7.1. Reliance. The consent by the Senior Lenders to the execution and delivery of
the Second Priority Documents to which the Senior Lenders have consented and all loans and other
extensions of credit made or deemed made on and after May 29, 2007 by the Senior Lenders to the
Company or any Subsidiary shall be deemed to have been given and made in reliance upon this
Agreement. Each Second Priority Agent, on behalf of itself and each applicable Second Priority
Secured Party, acknowledges that it and the applicable Second Priority Secured Parties is not
entitled to rely on any credit decision or other decisions made by any First Lien Agent or any
Senior Lender in taking or not taking any action under the applicable Second Priority Document or
this Agreement.




          7.2. No Warranties or Liability. Neither any First Lien Agent nor any Senior Lender
shall have been deemed to have made any express or implied representation or warranty upon which
the Second Priority Agent or the Second Priority Secured Parties may rely, including with respect
to the execution, validity, legality, completeness, collectibility or enforceability of any of the
Senior Lender Documents, the ownership of any Common Collateral or the perfection or priority of
any Liens thereon. The Senior Lenders will be entitled to manage and supervise their respective
loans and extensions of credit under the Senior Lender Documents in accordance with law and as they
may otherwise, in their sole discretion, deem appropriate, and the Senior Lenders may manage their
loans and extensions of credit without regard to any rights or interests that any Second Priority
Agent or any of the Second Priority Secured Parties have in the Common Collateral or otherwise,
except as otherwise provided in this Agreement. Neither any First Lien Agent nor any Senior Lender
shall have any duty to any Second Priority Agent or any Second Priority Secured Party to act or
refrain from acting in a manner that allows, or results in, the occurrence or continuance of an
event of default or default under any agreements with the Company or any Subsidiary thereof
(including the Second Priority Documents), regardless of any knowledge thereof that they may have
or be charged with. Except as expressly set forth in this Agreement, the First Lien Agents, the
Senior Lenders, the Second Priority Agents and the Second Priority Secured Parties have not
otherwise made to each other, nor do they hereby make to each other, any warranties, express or
implied, nor do they assume any liability to each other with respect to (a) the enforceability,
validity, value or collectibility of any of the Second Priority Claims, the Senior Lender Claims or
any guarantee or security which may have been granted to any of them in connection therewith, (b)
the Company’s title to or right to transfer any of the Common Collateral or (c) any other matter
except as expressly set forth in this Agreement.




          7.3. Obligations Unconditional. All rights, interests, agreements and obligations of
the First Lien Agents and the Senior Lenders, and the Second Priority Agents and the Second
Priority Secured Parties, respectively, hereunder shall remain in full force and effect
irrespective of:




     (a) any lack of validity or enforceability of any Senior Lender Documents or any Second
Priority Documents;



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



22









 




or otherwise, of the terms of the Credit Agreement or any other Senior Lender Document or of
the terms of the Second Priority Senior Secured Notes Indenture or any other Second Priority
Document;




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



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



     (e) any other circumstances that otherwise might constitute a defense available to, or a
discharge of, the Company or any other Grantor in respect of the Senior Lender Claims, or of any
Second Priority Agent or any Second Priority Secured Party in respect of this Agreement.



          SECTION 8. Miscellaneous.




          8.1. Conflicts. Subject to Section 8.19, in the event of any conflict between the
provisions of this Agreement and the provisions of any Senior Lender Document or any Second
Priority Document, the provisions of this Agreement shall govern.




          8.2. Continuing Nature of this Agreement; Severability. Subject to Section 6.4, this
Agreement shall continue to be effective until the Discharge of Senior Lender Claims shall have
occurred or such later time as all the Obligations in respect of the Second Priority Claims shall
have been paid in full. This is a continuing agreement of lien subordination and the Senior Lenders
may continue, at any time and without notice to each Second Priority Agent or any Second Priority
Secured Party, to extend credit and other financial accommodations and lend monies to or for the
benefit of the Company or any other Grantor constituting Senior Lender Claims in reliance hereon.
The terms of this Agreement shall survive, and shall continue in full force and effect, in any
Insolvency or Liquidation Proceeding. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall not invalidate the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.




          8.3. Amendments; Waivers. No amendment, modification or waiver of any of the
provisions of this Agreement by any Second Priority Agent or any First Lien Agent shall be deemed
to be made unless the same shall be in writing signed on behalf of the party making the same or its
authorized agent and each waiver, if any, shall be a waiver only with respect to the specific
instance involved and shall in no way impair the rights of the parties making such waiver or the
obligations of the other parties to such party in any other respect or at any other time. The
Company and the other Grantors shall not have any right to consent to or approve any amendment,
modification or waiver of any provision of this Agreement except to the extent their rights are
adversely affected. Notwithstanding anything in this Section 8.3 to the contrary, this Agreement
may be amended from time to time at the request of the Company, at the Company’s expense, and
without the consent of any Second Priority Agent, any First Lien Agent, any Senior Lender or any
Second Priority Secured Party to (i) add other parties holding Future Second Lien






23









 







Indebtedness (or any agent or trustee therefor) to the extent such Indebtedness is not
prohibited by the Credit Agreement, the Other First Priority Lien Obligations Credit Documents, the
Second Priority Senior Secured Notes Indenture or any other Second Priority Document governing
Future Second Lien Indebtedness, (ii) add other parties holding Obligations arising under the Other
First Priority Lien Obligations Credit Documents (or any agent or trustee thereof) to the extent
such Obligations are not prohibited by the Credit Agreement, the Other First Priority Lien
Obligations Credit Documents, the Second Priority Senior Secured Notes Indenture or any other
Second Priority Document governing Future Second Lien Indebtedness and (iii) in the case of Future
Second Lien Indebtedness, (a) establish that the Lien on the Common Collateral securing such Future
Second Lien Indebtedness shall be junior and subordinate in all respects to all Liens on the Common
Collateral securing any Senior Lender Claims and shall share in the benefits of the Common
Collateral equally and ratably with all Liens on the Common Collateral securing any Second Priority
Claims, and (b) provide to the holders of such Future Second Lien Indebtedness (or any agent or
trustee thereof) the comparable rights and benefits (including any improved rights and benefits
that have been consented to by the First Lien Agents) as are provided to the holders of Second
Priority Claims under this Agreement. Any such additional party, each First Lien Agent and each
Second Priority Agent shall be entitled to rely on the determination of officers of the Company
that such modifications do not violate the Credit Agreement, the Other First Priority Lien
Obligations Credit Documents, the Second Priority Senior Secured Notes Indenture or any other
Second Priority Document governing Future Second Lien Indebtedness if such determination is set
forth in an Officers’ Certificate delivered to such party, the First Lien Agents and each Second
Priority Agent; provided, however, that such determination will not affect whether or not the
Company has complied with its undertakings in the Credit Agreement, the Other First Priority Lien
Obligations Credit Documents, the Senior Collateral Documents, the Second Priority Senior Secured
Notes Indenture, any other Second Priority Document governing Future Second Lien Indebtedness, the
Second Priority Collateral Documents or this Agreement.




          8.4. Information Concerning Financial Condition of the Company and the Subsidiaries.
Neither any First Lien Agent nor any Senior Lender shall have any obligation to the Second Priority
Agent or any Second Priority Secured Party to keep the Second Priority Agent or any Second Priority
Secured Party informed of, and the Second Priority Agent and the Second Priority Secured Parties
shall not be entitled to rely on the First Lien Agents or the Senior Lenders with respect to, (a)
the financial condition of the Company and the Subsidiaries and all endorsers, pledgors and/or
guarantors of the Second Priority Claims or the Senior Lender Claims and (b) all other
circumstances bearing upon the risk of nonpayment of the Second Priority Claims or the Senior
Lender Claims. Neither any Second Priority Agent nor any Second Priority Secured Party shall have
any obligation to any First Lien Agent or any Senior Lender to keep any First Lien Agent or any
Senior Lender informed of, and the First Lien Agents and the Senior Lenders shall not be entitled
to rely on the Second Priority Agents or the Second Priority Secured Parties with respect to, (a)
the financial condition of the Company and the Subsidiaries and all endorsers, pledgors and/or
guarantors of the Second Priority Claims or the Senior Lender Claims and (b) all other
circumstances bearing upon the risk of nonpayment of the Second Priority Claims or the Senior
Lender Claims. The First Lien Agents, the Senior Lenders, each Second Priority Agent and the
Second Priority Secured Parties shall have no duty to advise any other party hereunder of
information known to it or them regarding such condition or any such circumstances or otherwise.
In the event that any First Lien Agent, any Senior Lender, any





24












 




Second Priority Agent or any Second Priority Secured Party, in its or their sole
discretion, undertakes at any time or from time to time to provide any such information to any
other party, it or they shall be under no obligation (w) to make, and the First Lien Agents, the
Senior Lenders, the Second Priority Agents and the Second Priority Secured Parties shall not make,
any express or implied representation or warranty, including with respect to the accuracy,
completeness, truthfulness or validity of any such information so provided, (x) to provide any
additional information or to provide any such information on any subsequent occasion, (y) to
undertake any investigation or (z) to disclose any information that, pursuant to accepted or
reasonable commercial finance practices, such party wishes to maintain confidential or is otherwise
required to maintain confidential.




          8.5. Subrogation. Each Second Priority Agent, on behalf of itself and each
applicable Second Priority Secured Party, hereby waives any rights of subrogation it may acquire as
a result of any payment hereunder until the Discharge of Senior Lender Claims has occurred.




          8.6. Application of Payments. Except as otherwise provided herein, all payments
received by the Senior Lenders may be applied, reversed and reapplied, in whole or in part, to such
part of the Senior Lender Claims as the Senior Lenders, in their sole discretion, deem appropriate,
consistent with the terms of the Senior Lender Documents. Except as otherwise provided herein,
each Second Priority Agent, on behalf of itself and each applicable Second Priority Secured Party,
assents to any such extension or postponement of the time of payment of the Senior Lender Claims or
any part thereof and to any other indulgence with respect thereto, to any substitution, exchange or
release of any security that may at any time secure any part of the Senior Lender Claims and to the
addition or release of any other Person primarily or secondarily liable therefor.




          8.7. Consent to Jurisdiction; Waivers. The parties hereto consent to the
nonexclusive jurisdiction of any state or federal court located in New York, New York (the “New
York Courts”), and consent that all service of process may be made by registered mail directed to
such party as provided in Section 8.8 for such party. Service so made shall be deemed to be
completed three days after the same shall be posted as aforesaid. The parties hereto waive any
objection to any action instituted hereunder in any such court based on forum non conveniens, and
any objection to the venue of any action instituted hereunder in any such court. Each of the
parties hereto waives any right it may have to trial by jury in respect of any litigation based on,
or arising out of, under or in connection with this Agreement, or any course of conduct, course of
dealing, verbal or written statement or action of any party hereto in connection with the subject
matter hereof.




          8.8. Notices. All notices to the Second Priority Secured Parties and the Senior
Lenders permitted or required under this Agreement may be sent to the Trustee, the First Lien
Agents or any Second Priority Agent as provided in the Second Priority Senior Secured Notes
Indenture, the Credit Agreement, the Other First Priority Lien Obligations Credit Documents, the
other relevant Senior Lender Documents or the other relevant Second Priority Documents, as
applicable. Unless otherwise specifically provided herein, any notice or other communication
herein required or permitted to be given shall be in writing and may be personally served,
telecopied, electronically mailed or sent by courier service or U.S. mail and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of a telecopy or






25









 







electronic mail or upon receipt via U.S. mail (registered or certified, with postage prepaid
and properly addressed). For the purposes hereof, the addresses of the parties hereto shall be as
set forth below each party’s name on the signature pages hereto, or, as to each party, at such
other address as may be designated by such party in a written notice to all of the other parties.
The First Lien Agents hereby agree to promptly notify each Second Priority Agent upon payment in
full in cash of all Obligations under the applicable Senior Lender Documents (except for contingent
indemnities and cost and reimbursement obligations to the extent no claim therefor has been made).




          8.9. Further Assurances. Each of the Second Priority Agents, on behalf of itself and
each applicable Second Priority Secured Party, and each applicable First Lien Agent, on behalf of
itself and each Senior Lender, agrees that each of them shall take such further action and shall
execute and deliver to each other First Lien Agent and Second Priority Agent, the Second Priority
Secured Parties and the Senior Lenders such additional documents and instruments (in recordable
form, if requested) as each other First Lien Agent and Second Priority Agent, the Second Priority
Secured Parties or the Senior Lenders may reasonably request, at the expense of the Company, to
effectuate the terms of and the lien priorities contemplated by this Agreement.




          8.10. Governing Law. This Agreement has been delivered and accepted in and shall be
deemed to have been made in New York, New York and shall be interpreted, and the rights and
liabilities of the parties bound hereby determined, in accordance with the laws of the State of New
York.




          8.11. Binding on Successors and Assigns. This Agreement shall be binding upon the
First Lien Agents, the Senior Lenders, the Second Priority Agents, the Second Priority Secured
Parties, Holdings, the Company, the Company’s Subsidiaries party hereto and their respective
permitted successors and assigns.




          8.12. Specific Performance. Each First Lien Agent may demand specific performance of
this Agreement. Each Second Priority Agent, on behalf of itself and each applicable Second
Priority Secured Party, hereby irrevocably waives any defense based on the adequacy of a remedy at
law and any other defense that might be asserted to bar the remedy of specific performance in any
action that may be brought by either First Lien Agent.




          8.13. Section Titles. The section titles contained in this Agreement are and shall
be without substantive meaning or content of any kind whatsoever and are not a part of this
Agreement.




          8.14. Counterparts. This Agreement may be executed in one or more counterparts,
including by means of facsimile, each of which shall be an original and all of which shall together
constitute one and the same document.




          8.15. Authorization. By its signature, each Person executing this Agreement on
behalf of a party hereto represents and warrants to the other parties hereto that it is duly
authorized to execute this Agreement. The First Lien Agents represent and warrant that this






26









 







Agreement is binding upon the Senior Lenders. The Trustee represents and warrants that this
Agreement is binding upon the Indenture Secured Parties.




          8.16. No Third Party Beneficiaries; Successors and Assigns. This Agreement and the
rights and benefits hereof shall inure to the benefit of, and be binding upon, each of the parties
hereto and their respective successors and assigns and shall inure to the benefit of each of, and
be binding upon, the holders of Senior Lender Claims and Second Priority Claims. No other Person
shall have or be entitled to assert rights or benefits hereunder.




          8.17. Effectiveness. This Agreement shall become effective when executed and
delivered by the parties hereto. This Agreement shall be effective both before and after the
commencement of any Insolvency or Liquidation Proceeding. All references to the Company or any
other Grantor shall include the Company or any other Grantor as debtor and debtor-in-possession and
any receiver or trustee for the Company or any other Grantor (as the case may be) in any Insolvency
or Liquidation Proceeding.




          8.18. First Lien Agents and Second Priority Agents. It is understood and agreed that
(a) Credit Suisse AG, Cayman Islands Branch, is entering into this Agreement in its capacity as
administrative agent under the Credit Agreement and the provisions of Article VIII of the Credit
Agreement applicable to Credit Suisse AG, Cayman Islands Branch, as administrative agent thereunder
shall also apply to Credit Suisse AG, Cayman Islands Branch, as Credit Agreement Agent hereunder,
and (b) The Bank of New York Mellon Trust Company, N.A. is entering into this Agreement in its
capacity as Trustee pursuant to the Indenture and Collateral Agent pursuant to the Noteholder
Collateral Agreement and, as such is entitled to all rights, privileges, protections, benefits,
immunities and indemnities provided in the Indenture and the Noteholder Collateral Agreement.




          8.19. Relative Rights. Notwithstanding anything in this Agreement to the contrary
(except to the extent contemplated by Section 5.3(b)), nothing in this Agreement is intended to or
will (a) amend, waive or otherwise modify the provisions of the Credit Agreement, the Other First
Priority Lien Obligations Credit Documents, the Second Priority Senior Secured Notes Indenture or
any other Senior Lender Documents or Second Priority Documents entered into in connection with the
Credit Agreement, tthe Other First Priority Lien Obligations Credit Documents, the Second Priority
Senior Secured Notes Indenture or any other Senior Lender Document or Second Priority Document or
permit Holdings, the Company or any Subsidiary to take any action, or fail to take any action, to
the extent such action or failure would otherwise constitute a breach of, or default under, the
Credit Agreement or any other Senior Lender Documents entered into in connection with the Credit
Agreement, the Other First Priority Lien Obligations Credit Documents, the Second Priority Senior
Secured Notes Indenture or any other Second Priority Documents, (b) change the relative priorities
of the Senior Lender Claims or the Liens granted under the Senior Lender Documents on the Common
Collateral (or any other assets) as among the Senior Lenders, (c) otherwise change the relative
rights of the Senior Lenders in respect of the Common Collateral as among such Senior Lenders or
(d) obligate Holdings, the Company or any Subsidiary to take any action, or fail to take any
action, that would otherwise constitute a breach of, or default under, the Credit Agreement, the
Other First Priority Lien Obligations Credit Documents or any other Senior Lender Document entered
into in connection with the Credit Agreement, the Other First Priority Lien Obligations Credit






27









 







Documents, the Second Priority Senior Secured Notes Indenture or any other Second Priority
Documents.




          8.20. References. Notwithstanding anything to the contrary in this Agreement, any
references contained herein to any Section, clause, paragraph, definition or other provision of the
Second Priority Senior Secured Notes Indenture (including any definition contained therein) shall
be deemed to be a reference to such Section, clause, paragraph, definition or other provision as in
effect on the date of this Agreement; provided that any reference to any such Section, clause,
paragraph or other provision shall refer to such Section, clause, paragraph or other provision of
the Second Priority Senior Secured Notes Indenture, as applicable (including any definition
contained therein), as amended or modified from time to time if such amendment or modification has
been (1) made in accordance with the Second Priority Senior Secured Notes Indenture, and (2)
approved in writing by, or on behalf of, the requisite Senior Lenders as are needed under the terms
of the Credit Agreement and the Other First Priority Lien Obligations Credit Documents, to approve
such amendment or modification.




          8.21. Supplements. Upon the execution by any Subsidiary of the Company of a
supplement hereto in form and substance satisfactory to the First Lien Agent, such Subsidiary shall
be a party to this Agreement and shall be bound by the provisions hereof to the same extent as the
Company and each other Grantor are so bound.




          8.22. Joinder Requirements. The Company may designate additional obligations as
Other First Priority Lien Obligations or Future Second Lien Indebtedness only if the incurrence of
such obligations is permitted under each of the Credit Agreement, the Second Priority Senior
Secured Notes Indenture and this Agreement. If so permitted, the Company shall (i) notify each
First Lien Agent and Second Priority Agent in writing of such designation and (ii) cause the
applicable Other First Priority Lien Obligations Administrative Agent and the applicable Other
First Priority Lien Obligations Collateral Agent or the administrative agent or trustee and
collateral agent for such Future Second Lien Indebtedness to execute and deliver to each First Lien
Agent and Second Priority Agent, a Joinder Agreement substantially in the form of Exhibit A hereto
(with appropriate adjustments in the case of Future Second Lien Indebtedness). Notwithstanding
anything to the contrary set forth in this Section 8.22 or in Section 8.3 hereof, any First Lien
Agent and/or any Second Priority Agent may, and, at the request of the Company, shall, in each
case, without the consent of any other First Lien Agent or Second Priority Agent, any Senior Lender
or any Second Priority Secured Party, enter into a supplemental agreement (which may take the form
of an amendment, an amendment and restatement or a supplement of this Agreement) to facilitate the
designation of such additional obligations as Other First Priority Lien Obligations or Future
Second Lien Indebtedness. Any such amendment may, among other things, (i) add other parties holding
Future Second Lien Indebtedness (or any agent or trustee therefor) to the extent such Indebtedness
is not prohibited by the Credit Agreement, the Other First Priority Lien Obligations Credit
Documents, the Second Priority Senior Secured Notes Indenture or any other Second Priority Document
governing Future Second Lien Indebtedness, (ii) add other parties holding Obligations arising under
the Other First Priority Lien Obligations Credit Documents (or any agent or trustee thereof) to the
extent such Obligations are not prohibited by the Credit Agreement, the Other First Priority Lien
Obligations Credit Documents, the Second Priority Senior Secured Notes Indenture or any other
Second Priority Document governing Future Second Lien Indebtedness,






28









 







(iii) in the case of Future Second Lien Indebtedness, (a) establish that the Lien on the
Common Collateral securing such Future Second Lien Indebtedness shall be junior and subordinate in
all respects to all Liens on the Common Collateral securing any Senior Lender Claims and shall
share in the benefits of the Common Collateral equally and ratably with all Liens on the Common
Collateral securing any Second Priority Claims, and (b) provide to the holders of such Future
Second Lien Indebtedness (or any agent or trustee thereof) the comparable rights and benefits
(including any improved rights and benefits that have been consented to by the First Lien Agents)
as are provided to the holders of Second Priority Claims under the foregoing Agreement prior to the
incurrence of such Future Second Lien Indebtedness, and (iv) in the case of Obligations arising
under Other First Priority Lien Obligations Credit Documents, (a) establish that the Lien on the
Common Collateral securing such Obligations shall be superior in all respects to all Liens on the
Common Collateral securing any Second Priority Claims and any Future Second Lien Indebtedness and
shall share in the benefits of the Common Collateral equally and ratably with all Liens on the
Common Collateral securing any other Senior Lender Claims, and (b) provide to the holders of such
Obligations arising under the Other First Priority Lien Obligations Credit Documents (or any agent
or trustee thereof) the comparable rights and benefits as are provided to the holders of Senior
Lender Claims under the foregoing Agreement prior to the incurrence of such Obligations. Any such
additional party, each First Lien Agent and each Second Priority Agent shall be entitled to rely on
the determination of officers of the Company that such modifications do not violate the Credit
Agreement, the Other First Priority Lien Obligations Credit Documents, the Second Priority Senior
Secured Notes Indenture or any other Second Priority Document governing Future Second Lien
Indebtedness if such determination is set forth in an officers’ certificate delivered to such
party, the First Lien Agents and each Second Priority Agent; provided, however, that such
determination will not affect whether or not the Company has complied with its undertakings in the
Credit Agreement, the Other First Priority Lien Obligations Credit Documents, the Senior Collateral
Documents, the Second Priority Senior Secured Notes Indenture, any other Second Priority Document
governing Future Second Lien Indebtedness or the Second Priority Collateral Documents.




          8.23. Intercreditor Agreements. Each party hereto agrees that the Senior Lenders (as
among themselves) and the Second-Priority Secured Parties (as among themselves) may each enter into
intercreditor agreements (or similar arrangements) with the applicable First Lien Agent or Second
Priority Agent governing the rights, benefits and privileges as among the Senior Lenders or the
Second-Priority Secured Parties, as the case may be, in respect of the Common Collateral, this
Agreement and the other Senior Collateral Documents or Second Priority Collateral Documents, as the
case may be, including as to application of proceeds of the Common Collateral, voting rights,
control of the Common Collateral and waivers with respect to the Common Collateral, in each case so
long as (A) the terms thereof do not violate or conflict with the provisions of this Agreement or
the other Senior Collateral Documents or Second Priority Collateral Documents, as the case maybe,
(B) in the case of any such intercreditor agreement (or similar arrangement) affecting any Senior
Lenders, the First Lien Agent acting on behalf of such Senior Lenders agrees in its sole discretion
to enter into any such intercreditor agreement (or similar arrangement) and (C) in the case of any
such intercreditor agreement (or similar arrangement) affecting the Senior Lenders holding Senior
Lender Claims under the Credit Agreement, such intercreditor agreement (or similar arrangement) is
permitted under the Credit Agreement or the Required Lenders otherwise authorize the applicable
First Lien Agent to enter into any such intercreditor agreement (or similar arrangement).
Notwithstanding the






29









 







preceding clauses (B) and (C), to the extent that the applicable First Lien Agent is not
authorized to enter into any such intercreditor agreement (or similar arrangement) or does not
agree to enter into such intercreditor agreement (or similar arrangement ), such intercreditor
agreement (or similar arrangement) shall not be binding upon the applicable First Lien Agent but,
subject to the immediately succeeding sentence, may still bind the other parties party thereto. In
any event, if a respective intercreditor agreement (or similar arrangement) exists, the provisions
thereof shall not be (or be construed to be) an amendment, modification or other change to this
Agreement or any other Senior Collateral Document or Second Priority Collateral Document, and the
provisions of this Agreement and the other Senior Collateral Documents and Second Priority
Collateral Documents shall remain in full force and effect in accordance with the terms hereof and
thereof (as such provisions may be amended, modified or otherwise supplemented from time to time in
accordance with the terms thereof, including to give effect to any intercreditor agreement (or
similar arrangement)).




[Remainder of page intentionally left blank]



30









 





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




	 	 	 	 	 
	 	CREDIT SUISSE AG, CAYMAN ISLANDS


BRANCH (f/k/a Credit Suisse, Cayman Islands
Branch),

as Credit Agreement Agent	 
	 
	 	By:  	/s/
Christopher Reo Day	 
	 	 	Name:  	Christopher Reo Day	 
	 	 	Title:  	Vice President 	 
	 
	 	 	 
	 	By:  	/s/
Sanja Gazahi	 
	 	 	Name:  	Sanja Gazahi	 
	 	 	Title:  	Associate	 
	 





	 	 	 	 	 
	 	Address: 	Eleven Madison Avenue
	 	 	 	New York, NY 10010	 	 
	 	Attention: Agency Group

Telecopier: (212) 325-8304
 	 




Intercreditor Agreement Signature Page



 








 




	 	 	 	 	 
	 	THE BANK OF NEW YORK MELLON TRUST 

COMPANY, N.A.,

as Trustee

 	 
	 	By:  	/s/
Geraldine Creswell 	 
	 	 	Name:  	Geraldine Creswell 	 
	 	 	Title:  	Vice President	 
	 
	 	Address: 10161 Centurion Parkway

Jacksonville, FL 32256

Attention: Corporate Trust Administration

Telecopier: (904) 645-1921
 	 



Intercreditor Agreement Signature Page



 









 





	 	 	 	 	 
	 	CLAIRE’S INC.

 	 
	 	By:  	/s/
J. Per Brodin	 
	 	 	Name:  	J. Per Brodin	 
	 	 	Title:  	Executive Vice President 

and Chief Financial
Officer
	 
	 
	 	CLAIRE’S STORES, INC.

 	 
	 	By:  	/s/
J. Per
Brodin	 
	 	 	Name:  	J. Per
Brodin	 
	 	 	Title:  	Executive Vice President 

and Chief Financial
Officer
	 
	 



	 	 	 	 	 
	 	 CLAIRE’S BOUTIQUES, INC.
 
	 	 CSI CANADA LLC
 	 
	 	 CLAIRE’S PUERTO RICO CORP.
 	 
	 	 CBI DISTRIBUTING CORP.
 	 
	 	 CLAIRE’S CANADA CORP.
 	 
	 	BMS DISTRIBUTING CORP.

 	 
	 	By:  	/s/
J. Per Brodin	 
	 	 	Name:  	J. Per Brodin	 
	 	 	Title:  	Executive Vice President 

and Chief Financial
Officer
	 
	 
	 	CSI CANADA LLC.

 	 
	 	By:  	/s/
J. Per Brodin	 
	 	 	Name:  	J. Per Brodin	 
	 	 	Title:  	Manager
	 



Intercreditor Agreement



 









 





SCHEDULE I




CLAIRE’S BOUTIQUES, INC.

CSI CANADA LLC

CLAIRE’S PUERTO RICO CORP.

CBI DISTRIBUTING CORP.

CLAIRE’S CANADA CORP.

BMS DISTRIBUTING CORP.




 









 





EXHIBIT A

Joinder Agreement




JOINDER AGREEMENT




          JOINDER AGREEMENT (this “Agreement”) dated as of [___] [__], [____], among [____________]
(the “New Agent”), as an Other First Priority Lien Obligations Agent, CREDIT SUISSE AG, CAYMAN
ISLANDS BRANCH as Credit Agreement Agent, The Bank of New York Mellon Trust Company, N.A., as
Trustee, and CLAIRE’S STORES, INC. (on behalf of itself and its subsidiaries), and any other First
Lien Agent and other Second Priority Agent from time to time a party hereto.




          This Agreement is supplemental to that certain Intercreditor Agreement, dated as of March 4,
2011 (as the same may be amended, restated, supplemented or otherwise modified from time to time,
the “Intercreditor Agreement”), between [________]. This Agreement has been entered into to record
the accession of the New Agent as Other First Priority Lien Obligations Agent under the
Intercreditor Agreement.




Definitions




          Capitalized terms used but not defined herein shall have the meanings assigned thereto in the
Intercreditor Agreement.




SECTION 1.




Accession




          1.1. The New Agent agrees to become, with immediate effect, a party to and agrees to be bound
by the terms of, the Intercreditor Agreement as an Other First Priority Lien Obligations Agent as
if it had originally been party to the Intercreditor Agreement as an Other First Priority Lien
Obligations Agent.




          1.2. The New Agent confirm that its address details for notices pursuant to the Intercreditor
Agreement are as follows: [_____________].




          1.3. Each party to this Agreement (other than the New Agent) confirms the acceptance of the
New Agent as an Other First Priority Lien Obligations Agent for purposes of the Intercreditor
Agreement.




          1.4. [________] is acting in the capacity of Other First Priority Lien Obligations Agent
solely for the Secured Parties under [_____________].




Intercreditor
Agreement Signature Page





 









 








SECTION 2.




Miscellaneous




          2.1. This Agreement shall be construed in accordance with and governed by the law of the
State of New York.




          2.2. This Agreement may be executed in counterparts, each of which shall constitute an
original but all of which when taken together shall constitute a single contract. Delivery of an
executed signature page to this Agreement by facsimile transmission shall be as effective as
delivery of a manually signed counterpart of this Agreement.




          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.




[INSERT SIGNATURE BLOCKS]