Exhibit 10.5


 




 





 


INTERCREDITOR AGREEMENT


 


among


 


PROSPECT
MEDICAL HOLDINGS, INC.


as the
Company


 


and


 


CERTAIN
SUBSIDIARIES OF THE COMPANY


FROM TIME
TO TIME PARTIES HERETO


as
Guarantors,


 


and


 


ROYAL
BANK OF CANADA,


as
First Lien Collateral Agent


 


and


 


U.S. BANK
NATIONAL ASSOCIATION,


as
Second Lien Collateral Agent


 


and


 


ROYAL
BANK OF CANADA,


as
Control Agent


 


Dated
as of July 29, 2009


 




 





 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I
  DEFINITIONS

  	
  2

  
	
  SECTION 1.01

  	
  Defined Terms

  	
  2

  
	
  SECTION 1.02

  	
  Other Interpretive Provisions

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE II LIEN
  PRIORITIES

  	
  11

  
	
  SECTION 2.01

  	
  Relative Priorities

  	
  11

  
	
  SECTION 2.02

  	
  Failure to Perfect

  	
  11

  
	
  SECTION 2.03

  	
  Nature of First Lien
  Obligations

  	
  11

  
	
  SECTION 2.04

  	
  Prohibition on
  Contesting Liens

  	
  12

  
	
  SECTION 2.05

  	
  No New Liens

  	
  12

  
	
  SECTION 2.06

  	
  Similar Liens and
  Agreements

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE III
  ENFORCEMENT

  	
  14

  
	
  SECTION 3.01

  	
  Exercise of Remedies

  	
  14

  
	
  SECTION 3.02

  	
  Actions Upon Breach

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV
  PAYMENTS

  	
  17

  
	
  SECTION 4.01

  	
  Application of Proceeds

  	
  17

  
	
  SECTION 4.02

  	
  Payments Over

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE V OTHER
  AGREEMENTS

  	
  18

  
	
  SECTION 5.01

  	
  Releases

  	
  18

  
	
  SECTION 5.02

  	
  Insurance

  	
  18

  
	
  SECTION 5.03

  	
  Amendments to First
  Lien Documents and Second Lien Documents

  	
  19

  
	
  SECTION 5.04

  	
  Rights As Unsecured
  Creditors

  	
  20

  
	
  SECTION 5.05

  	
  Control Agent for
  Perfection

  	
  21

  
	
  SECTION 5.06

  	
  When Discharge of First
  Lien Obligations Deemed to Not Have Occurred

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI
  INSOLVENCY OR LIQUIDATION PROCEEDINGS

  	
  24

  
	
  SECTION 6.01

  	
  Finance and Sale Issues

  	
  24

  
	
  SECTION 6.02

  	
  Relief from the
  Automatic Stay

  	
  24

  
	
  SECTION 6.03

  	
  Adequate Protection

  	
  25

  
	
  SECTION 6.04

  	
  No Waiver

  	
  26

  
	
  SECTION 6.05

  	
  Avoidance Issues

  	
  26

  
	
  SECTION 6.06

  	
  Separate Grants of
  Security and Separate Classification

  	
  26

  
	
  SECTION 6.07

  	
  Reorganization
  Securities

  	
  26

  
	
  SECTION 6.08

  	
  Post-Petition Claims

  	
  26

  
	
  SECTION 6.09

  	
  Waiver

  	
  27

  
	
  SECTION 6.10

  	
  Expense Claims

  	
  27

  
	
  SECTION 6.11

  	
  Other Matters

  	
  27

  
	
  SECTION 6.12

  	
  Effectiveness in
  Insolvency or Liquidation Proceedings

  	
  27

  



 


i

















 


	
  SECTION 6.13

  	
  Limitation of
  Applicability

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII
  RELIANCE; WAIVERS; ETC.

  	
  28

  
	
  SECTION 7.01

  	
  Non-Reliance

  	
  28

  
	
  SECTION 7.02

  	
  No Warranties or
  Liability

  	
  28

  
	
  SECTION 7.03

  	
  Obligations
  Unconditional

  	
  29

  
	
  SECTION 7.04

  	
  Certain Notices

  	
  30

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII
  MISCELLANEOUS

  	
  30

  
	
  SECTION 8.01

  	
  Inconsistencies with
  Other Documents

  	
  30

  
	
  SECTION 8.02

  	
  Effectiveness;
  Continuing Nature of this Agreement; Severability

  	
  30

  
	
  SECTION 8.03

  	
  Amendments; Waivers

  	
  31

  
	
  SECTION 8.04

  	
  Information Concerning
  Financial Condition of the Company and its Subsidiaries

  	
  31

  
	
  SECTION 8.05

  	
  Subrogation

  	
  32

  
	
  SECTION 8.06

  	
  Application of Payments

  	
  32

  
	
  SECTION 8.07

  	
  SUBMISSION TO
  JURISDICTION

  	
  32

  
	
  SECTION 8.08

  	
  Notices

  	
  33

  
	
  SECTION 8.09

  	
  Further Assurances

  	
  33

  
	
  SECTION 8.10

  	
  APPLICABLE LAW

  	
  34

  
	
  SECTION 8.11

  	
  Binding on Successors
  and Assigns

  	
  34

  
	
  SECTION 8.12

  	
  Specific Performance

  	
  34

  
	
  SECTION 8.13

  	
  Titles and Captions

  	
  34

  
	
  SECTION 8.14

  	
  Counterparts;
  Integration

  	
  34

  
	
  SECTION 8.15

  	
  Authorization

  	
  34

  
	
  SECTION 8.16

  	
  No Third Party
  Beneficiaries

  	
  34

  
	
  SECTION 8.17

  	
  Provisions Solely to Define Relative Rights

  	
  34

  



 


ii

















 


INTERCREDITOR AGREEMENT


 


This
INTERCREDITOR AGREEMENT, is dated as of July 29, 2009, and entered into by
and among PROSPECT MEDICAL HOLDINGS, INC., a Delaware corporation (“Holdings”
or the “Company”), each of the Subsidiaries of Holdings identified on the
signature pages hereof as a Guarantor (such Subsidiaries, the “Guarantors”),  ROYAL BANK OF CANADA,  in its capacity as administrative agent
for the First Lien Obligations (as defined below), including its successors and
assigns from time to time (the “First Lien Collateral Agent”), U.S. BANK
NATIONAL ASSOCIATION, in its capacity as collateral agent in respect of the
Second Lien Obligations (as defined below), including its successors and
assigns from time to time (the “Second Lien Collateral Agent”) and ROYAL
BANK OF CANADA, in its capacity as Control Agent (as defined below) for the
First Lien Collateral Agent and the Second Lien Collateral Agent.  Capitalized terms used herein but not
otherwise defined herein have the meanings set forth in Article I below.


 


RECITALS


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


Collateral Agent on behalf of the Second Lien
Claimholders has agreed to the lien subordination, intercreditor and other
provisions set forth in this Agreement.


 


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


 


ARTICLE I

DEFINITIONS


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


2

















 


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


 


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


 


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


 


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


 


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


 


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


 


“Credit
Agreement”  has the meaning
assigned thereto in the recitals.


 


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


 


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


 


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


 


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


 


3

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“First
Lien Collateral Documents”  means
the First Lien Security Agreement and any other agreement, document or
instrument pursuant to which a Lien is granted on assets intended to constitute
First Lien Collateral which secures any First Lien Obligations or under which
rights or remedies with respect to such Liens are governed.


 


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


 


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



 


4

















 


commencement of an Insolvency or Liquidation
Proceeding, accrue) in accordance with the rate specified in the relevant First
Lien Document and (ii) all fees, costs and charges incurred in connection
with the First Lien Documents and provided for thereunder (including, without
limitation, legal fees), in the case of clause (i) and (ii) whether
before or after commencement of an Insolvency or Liquidation Proceeding and
irrespective of whether any claim for such interest, fees, costs or charges is
allowed as a claim in such Insolvency or Liquidation Proceeding.


 


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


 


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


 


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


 


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


 


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


 


5

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


6

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“PMG
Parties” means PMG, each direct or indirect Subsidiary of PMG and each
future direct or indirect subsidiary of PMG.


 


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


 


7
















 


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


 


“Requisite
Claimholders” means those lenders under the Credit Agreement or those
Second Lien Claimholders in respect of the Indenture, as applicable, that are
necessary to approve the contemplated action.


 


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


 


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


 


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


 


“Second
Lien Collateral Documents”  means
the Second Lien Security Agreement and any other agreement, document or
instrument pursuant to which a Lien is granted on assets intended to constitute
Second Lien Collateral which secures any Second Lien Obligations or under which
rights or remedies with respect to such Liens are governed.


 


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


 


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


 


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


 


8

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Swap
Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any 


 


9

















 


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


 


“Swap
Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s) determined
in accordance therewith, such termination value(s), and (b) for any date
prior to the date referenced in clause (a), the amount(s) determined
as the mark-to-market value(s) for such Swap Contracts, as determined
based upon one or more mid-market or other readily available quotations
provided by any recognized dealer in such Swap Contracts (which may include a
Lender or any Affiliate of a Lender).


 


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


 


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


 


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


 


“United
States” means the United States of America.


 


SECTION 1.02               Other
Interpretive Provisions.


 


(a)           The
definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation.”  The word “will” shall be construed
to have the same meaning and effect as the word “shall”.  Unless the context 


 


10

















 


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


 


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


 


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


 


ARTICLE II

LIEN PRIORITIES


 


SECTION 2.01               Relative
Priorities.  Notwithstanding the
date, manner or order of grant, attachment or perfection of any Liens securing
the Second Lien Obligations granted on the Collateral or of any Liens securing
the First Lien Obligations granted on the Collateral and notwithstanding any
provision of the UCC, or any applicable law or the Second Lien Documents, the
Second Lien Collateral Agent (on behalf of itself and the Second Lien
Claimholders) hereby agrees that:  (a) any
Lien on the Collateral securing any First Lien Obligations now or hereafter
held by or on behalf of the First Lien Collateral Agent or any First Lien
Claimholders or any agent or trustee therefor, regardless of how acquired,
whether by grant, possession, statute, operation of law, subrogation or
otherwise, shall be senior in all respects and prior to any Lien on the
Collateral securing any of the Second Lien Obligations; and (b) any Lien
on the Collateral now or hereafter held by or on behalf of the Second Lien
Collateral Agent, any Second Lien Claimholders or any agent or trustee therefor
regardless of how acquired, whether by grant, possession, statute, operation of
law, subrogation or otherwise, shall be junior and subordinate in all respects
to all Liens on the Collateral securing any First Lien Obligations.


 


SECTION 2.02               Failure
to Perfect.  All Liens on the
Collateral securing any First Lien Obligations shall be and remain senior in
all respects and prior to all Liens on the Collateral securing any Second Lien
Obligations for all purposes, notwithstanding any failure of the First Lien
Collateral Agent or the First Lien Claimholders to adequately perfect its
security interests in the Collateral, the subordination of any Lien on the
Collateral securing any First Lien Obligations to any Lien securing any other
obligation of any Grantor, or the avoidance, invalidation or lapse of any Lien
on the Collateral securing any First Lien Obligations.


 


SECTION 2.03               Nature
of First Lien Obligations.  The
Second Lien Collateral Agent (for itself and on behalf of the other Second Lien
Claimholders) acknowledges that (a) the 


 


11

















 


First Lien Obligations
are revolving in nature, (b) the amount thereof that may be outstanding at
any time or from time to time may be increased or reduced and subsequently
reborrowed and (c) the terms of the First Lien Obligations may be
modified, extended or amended from time to time and the aggregate amount of the
First Lien Obligations may be increased or Refinanced, in either event, without
notice to or consent by the Second Lien Claimholders and without affecting the
provisions hereof.  The lien priorities
provided in Sections 2.01 and 2.02 shall not be altered or
otherwise affected by any such amendment, modification, supplement, extension,
repayment, reborrowing, increase, replacement, renewal, restatement or
Refinancing of either the First Lien Obligations or the Second Lien
Obligations, or any portion thereof.


 


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


 


SECTION 2.05               No
New Liens.


 


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


 


12

















 


(b)           Limitation
on other Collateral for Second Lien Claimholders.  Until the date upon which the Discharge of
First Lien Obligations shall have occurred, (i) the Second Lien Collateral
Agent agrees that, after the date hereof, neither the Second Lien Collateral
Agent nor any Second Lien Claimholder shall acquire or hold any Lien on any
assets of the type contemplated by the definition of “Second Lien Collateral”
of any Grantor securing any Second Lien Obligations which assets are not also
subject to the senior priority Lien of the First Lien Collateral Agent under
the First Lien Collateral Documents, and (ii) each Grantor agrees not to
grant any Lien on any assets of the type contemplated by the definition of “Second
Lien Collateral”, or permit any of its Subsidiaries to grant a Lien on any such
assets, in favor of the Second Lien Collateral Agent or the Second Lien
Claimholders unless it, or such Subsidiary, has granted a similar Lien on such
assets in favor of the First Lien Collateral Agent or the First Lien
Claimholders.  If the Second Lien
Collateral Agent or any Second Lien Claimholder shall (nonetheless and in
breach hereof) acquire any Lien on any assets of the type contemplated by the
definition of “Second Lien Collateral” of any Grantor or any of their
respective Subsidiaries securing any Second Lien Obligations which assets are
not also subject to the first-priority Lien of the First Lien Collateral Agent
under the First Lien Collateral Documents, then the Second Lien Collateral
Agent (or the relevant Second Lien Claimholder), shall, without the need for
any further consent of any other Person and notwithstanding anything to the
contrary in any other Second Lien Document (x) in addition to holding such
Lien for the benefit of itself and the other Second Lien Claimholders as
security for the Second Lien Obligations, also hold and be deemed to have held
such Lien for the benefit of the First Lien Collateral Agent as security for
the First Lien Obligations or (y) release such Lien.


 


SECTION 2.06               Similar
Liens and Agreements.  The parties
hereto agree that it is their intention that the First Lien Collateral and the
Second Lien Collateral be identical.  In
furtherance of the foregoing and of Section 8.09, the parties
hereto agree, subject to the other provisions of this Agreement:


 


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


 


(b)           that the documents and agreements
creating or evidencing the Liens on the First Lien Collateral and the Second
Lien Collateral shall be in all material respects the same forms of documents
other than with respect to the senior and subordinate nature of the security
interests in the Collateral securing the respective First Lien Obligations and
Second Lien Obligations thereunder.


 


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


 


13

















 


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


 


ARTICLE III

ENFORCEMENT


 


SECTION 3.01               Exercise
of Remedies.


 


(a)           So
long as the Discharge of First Lien Obligations has not occurred, whether or
not any Insolvency or Liquidation Proceeding has been commenced by or against
the Company or any other Grantor:


 


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


 


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


 


(B)           will not contest, protest or object
to any foreclosure proceeding or action brought by the First Lien Collateral
Agent or any First Lien Claimholder or any other exercise by the First Lien
Collateral Agent or any First Lien Claimholder, of any rights and remedies
relating to the Collateral under the First Lien Collateral Documents,
including, but not limited to, any motion by the First lien Collateral agent to
sell the Collateral pursuant to Section 363 of the Bankruptcy Code, provided
that the respective interests of the Second Lien Claimholders attach to the
proceeds thereof, subject to the relative priorities described in Article II;
provided, however, that this Section 3.01(B) shall
constitute consent by the Second Lien Collateral Agent and the Second Lien
Claimholders pursuant to Section 363(f) of the Bankruptcy Code to the
Section 363 sale of any or all of the Collateral; and


 


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


 


14

















 


pursuing any foreclosure
proceeding or action or any other exercise of any rights or remedies relating
to the Collateral; and


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


15

















 


In
exercising rights and remedies with respect to the Collateral, the First Lien
Collateral Agent and the First Lien Claimholders may enforce the provisions of
the First Lien Documents and exercise remedies thereunder, all in such order
and in such manner as they may determine advisable in the exercise of their
sole discretion.  Such exercise and
enforcement shall include the rights of an agent appointed by the First Lien
Collateral Agent and the First Lien Claimholders to sell or otherwise dispose
of Collateral upon foreclosure, to incur expenses in connection with such sale
or disposition, and to exercise all the rights and remedies of a secured
creditor under the UCC of any applicable jurisdiction and of a secured creditor
under Debtor Relief Laws of any applicable jurisdiction.


 


(b)           The
Second Lien Collateral Agent (on behalf of itself and the Second Lien
Claimholders) agrees that it will not take or receive any Collateral or any
proceeds of Collateral in connection with the exercise of any right or remedy
(including set-off or recoupment) with respect to any Collateral, and that any
Collateral or proceeds taken or received by it will be paid over to the First
Lien Collateral Agent pursuant to Section 4.02, unless and until
the Discharge of First Lien Obligations has occurred, except as expressly
provided in the proviso in Section 3.01(a)(ii) and Section 6.07.  Without limiting the generality of the foregoing,
unless and until the Discharge of First Lien Obligations has occurred, except
as expressly provided in the proviso in Section 3.01(a)(ii), the
sole right of the Second Lien Collateral Agent and the Second Lien Claimholders
with respect to the Collateral is to hold a Lien on the Collateral pursuant to
the Second Lien Collateral Documents for the period and to the extent granted
therein and to receive a share of the proceeds thereof, if any, after the
Discharge of the First Lien Obligations has occurred in accordance with the
terms of the Second Lien Documents and applicable law.


 


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


 


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


 


SECTION 3.02               Actions
Upon Breach.


 


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


 


16

















 


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


 


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


 


ARTICLE IV

PAYMENTS


 


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


 


SECTION 4.02               Payments
Over.  So long as the Discharge of
First Lien Obligations has not occurred, any Collateral or proceeds thereof
(together with assets or proceeds subject to Liens referred to in the final
sentence of Section 2.05(b)) received by the Second Lien Collateral
Agent or any Second Lien Claimholders in connection with the exercise of any
right or remedy (including set-off) in respect of the Collateral shall be
segregated and held in trust and forthwith paid over to the First Lien
Collateral Agent for the benefit of the First Lien Claimholders in the same
form as received, with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct.  The
First Lien Collateral Agent is hereby authorized to make any such endorsements
as agent for the Second Lien Collateral Agent or any such Second Lien
Claimholders.  This authorization is
coupled with an interest and is irrevocable until such time as this Agreement
is terminated in accordance with its terms.


 


17
















 


ARTICLE V

OTHER AGREEMENTS


 


SECTION 5.01               Releases.


 


(a)           If, in connection with:


 


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


 


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


 


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


 


(b)           Until
the Discharge of First Lien Obligations occurs, the Second Lien Collateral
Agent (on behalf of itself and the Second Lien Claimholders) hereby irrevocably
constitutes and appoints the First Lien Collateral Agent and any officer or
agent of the First Lien Collateral Agent, with full power of substitution, as
its true and lawful attorney-in-fact with full irrevocable power and authority
in the place and stead of the Second Lien Collateral Agent or such holder or in
the First Lien Collateral Agent’s own name, from time to time in the First Lien
Collateral Agent’s discretion, for the purpose of carrying out the terms of
this Section 5.01, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary to
accomplish the purposes of this Section 5.01, including any
endorsements or other instruments of transfer or release.  This authorization is coupled with an
interest and is irrevocable until such time as this Agreement is terminated in
accordance with its terms.


 


(c)           Until
the Discharge of First Lien Obligations occurs, to the extent that the First
Lien Collateral Agent (on behalf of itself and the First Lien Claimholders) (i) has
released any Lien on Collateral and any such Liens are later reinstated or (ii) obtains
any new Liens then the Second Lien Collateral Agent (on behalf of itself and
the Second Lien Claimholders) shall be granted a Lien on any such Collateral
subject to the priorities set forth in Article II.


 


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


 


18

















 


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


 


SECTION 5.03               Amendments
to First Lien Documents and Second Lien Documents.


 


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


 


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


 


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


 


19

















 


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


 


(b)           Until
the date upon which the Discharge of First Lien Obligations shall have
occurred, in the event the First Lien Collateral Agent or the First Lien
Claimholders enter into any amendment, waiver or consent in respect of any of
the First Lien Collateral Documents for the purpose of adding to, or deleting
from, or waiving or consenting to any departures from any provisions of any
First Lien Collateral Document or changing in any manner the rights of the
First Lien Collateral Agent, the First Lien Claimholders, or the Grantors thereunder,
then such amendment, waiver or consent shall automatically apply in a
comparable manner to any comparable provision of the Second Lien Collateral
Documents (which, for the avoidance of doubt, shall not include the Note
Collateral Documents (as defined in the Shared Collateral Agreement), the
Indenture or the 2014 Notes) without the consent of the Second Lien Collateral
Agent or the Second Lien Claimholders and without any action by the Second Lien
Collateral Agent or any Grantor; provided, however, (i) that
no such amendment, waiver or consent shall be effective to (A) release any
Lien of the Second Lien Collateral Documents, (B) remove assets subject to
the Lien of the Second Lien Collateral Documents, (C) adversely affect the
perfection or priority of any such Lien, except, in each case, to the extent
that a release of, or adverse effect on the perfection or priority of, such
Lien is permitted by Section 5.01 or Article VI, (D) reduce
the principal of, or interest or other amounts payable on, any amount payable
under the Indenture or any Second Lien Document, (E) postpone any date
fixed for any payment of principal of, or interest or other amounts payable on,
any amounts payable under the Indenture or any Second Lien Document, (F) permit
any Liens on the Collateral not permitted under the Second Lien Documents or Article VI,
or (G) impose duties on the Second Lien Collateral Agent, in each case
without the consent of the Second Lien Collateral Agent and (ii) notice of
such amendment, waiver or consent shall have been given to the Second Lien
Collateral Agent no later than 10 days after its effectiveness (provided
that the failure to give such notice shall not affect the effectiveness or
validity thereof) provided further that this paragraph is intended solely to
set forth provisions by which the Second Lien Collateral Documents shall be
automatically affected by amendments, waivers and consents given by the First
Lien Collateral Agent and First Lien Claimholders under the Credit Agreement
and the First Lien Collateral Documents and is not intended to impose any
liability on the First Lien Collateral Agent or First Lien Claimholders.


 


SECTION 5.04               Rights
As Unsecured Creditors.  The Second
Lien Collateral Agent and the Second Lien Claimholders may exercise rights and
remedies as unsecured creditors against any Grantor in accordance with the
terms of the Second Lien Documents and applicable law.  Except as otherwise set forth in Section 2.01,
nothing in this Agreement shall prohibit the receipt by the Second Lien
Collateral Agent or any Second Lien Claimholders of the required payments of
interest and principal so long as such receipt is not the direct or indirect
result of the exercise by the Second Lien Collateral Agent or any Second Lien
Claimholders of rights or remedies as a secured creditor (including set-off or
recoupment) or enforcement of any Lien created under the Second Lien Collateral
Documents held by any of them.  Nothing
in this Agreement impairs or otherwise adversely affects any rights or remedies
the First Lien Collateral Agent or the First Lien Claimholders may have with
respect to the Collateral, including, without limitation, rights under Section 4.02.  In the event that any Second Lien Claimholder
becomes a judgment Lien creditor as a result of its enforcement of its rights
as an unsecured creditor, such judgment Lien shall be subject to the terms of
this Agreement for all purposes (including in 


 


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


 


SECTION 5.05               Control
Agent for Perfection.


 


(a)           The
First Lien Collateral Agent (on behalf of itself and the First Lien
Claimholders) and the Second Lien Collateral Agent (on behalf of itself and the
Second Lien Claimholders) each hereby appoint Royal Bank of Canada, as its
collateral agent (in such capacity, together with any successor in such
capacity appointed by the First Lien Collateral Agent and the Second Lien
Collateral Agent, the “Control Agent”) for the limited purpose of acting
as the agent on behalf of the First Lien Collateral Agent (on behalf of itself
and the First Lien Claimholders) and the Second Lien Collateral Agent (on
behalf of itself and the Second Lien Claimholders) with respect to the Control
Collateral for the purposes of perfecting the Liens of such parties on the
Control Collateral.  The Control Agent accepts
such appointment and agrees to hold the Control Collateral in its possession or
control (or in the possession or control of its agents or bailees) as Control
Agent for the benefit of the First Lien Collateral Agent (on behalf of itself
and the First Lien Claimholders) and the Second Lien Collateral Agent (on
behalf of itself and the Second Lien Claimholders) and any permitted assignee
of any thereof solely for the purpose of perfecting the security interest
granted to such parties in such Control Collateral, subject to the terms and
conditions of this Section 5.05.


 


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


 


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


 


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


 


21

















 


incidental thereto.  As to any matters not expressly provided for
herein (including, without limitation, the timing and methods of realization
upon the Collateral) or in one or more of the First Lien Collateral Documents
or Second Lien Collateral Documents, the Control Agent shall act or refrain
from acting in accordance with written instructions from the First Lien
Collateral Agent or the Second Lien Collateral Agent, as applicable, or, in the
absence of such instructions or provisions, in accordance with its reasonable
discretion.


 


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


 


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


 


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


 


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


 


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


 


SECTION 5.06               When
Discharge of First Lien Obligations Deemed to Not Have Occurred.  If at any time after the Discharge of First
Lien Obligations has occurred, the Company thereafter enters into any
Refinancing of any First Lien Document evidencing a First Lien Obligation,
which Refinancing is permitted by the Indenture, then such Discharge of First
Lien Obligations shall automatically be deemed not to have occurred for all
purposes of this Agreement (other than with respect to any actions taken prior
to the date of such designation as a result of the occurrence of such first
Discharge of First Lien Obligations), and the obligations under such
Refinancing First Lien Document shall automatically be treated as First Lien
Obligations for all purposes of this Agreement, including for purposes of the
Lien priorities and rights in respect of Collateral set forth herein, and the
First Lien Collateral Agent under such First Lien Documents shall be a First
Lien Collateral Agent for all purposes of this Agreement.  Upon receipt of a notice stating that the
Company has entered into a new First Lien Document (which notice shall include
the identity of the new collateral agent, such agent, the “New Agent”),
the Second Lien Collateral Agent shall promptly (a) enter into such
documents and agreements (including amendments or supplements to this Agreement
as the Company or such New Agent shall reasonably request in order to provide
to the New Agent the rights contemplated hereby, in each case consistent in all
material respects with the terms of this Agreement and (b) deliver to the
New Agent any Control Collateral held by it together with any necessary
endorsements (or otherwise allow the New Agent to obtain control of the Control
Collateral).  If the new First Lien Obligations
under the new First Lien Documents are secured by assets of the Grantors of the
type constituting Collateral that do not also secure the Second Lien
Obligations, then the Second Lien Obligations shall be secured at such time by
a Lien on such assets to the same extent provided in the Second Lien Collateral
Documents.


 


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ARTICLE VI

INSOLVENCY OR LIQUIDATION PROCEEDINGS


 


SECTION 6.01               Finance
and Sale Issues.  Until the Discharge
of First Lien Obligations has occurred, if the Company or any other Grantor
shall be subject to any Insolvency or Liquidation Proceeding and the First Lien
Collateral Agent shall desire to permit the use of all or a portion of the
Collateral as cash collateral or to permit the Company or any other Grantor to
obtain financing, whether from the First Lien Claimholders or any other entity
under Section 363 or Section 364 of the Bankruptcy Code or any
similar Debtor Relief Law, which financing may include a Refinancing of the
First Lien Obligations (provided that (i) such financing or Refinancing
shall be secured by all or any portion of the Collateral (including assets that
but for the application of Section 552 of the Bankruptcy Code would be
Collateral) and (ii) any such financing, whether or not pursuant to Section 363
or Section 364 of the Bankruptcy Code or any similar Debtor Relief Law,
shall not be secured by any assets of any Grantor other than the Collateral)
(each, a “DIP Financing”), then the Second Lien Collateral Agent (on
behalf of itself and the Second Lien Claimholders) agrees that (a) it will
not in respect of the Collateral (i) raise any objection to, or otherwise
contest or interfere with, such use of cash collateral or DIP Financing, (ii) support
any other Person objecting to, such sale, use, or lease of cash collateral or
DIP Financing or (iii) request any form of adequate protection or any
other relief in connection therewith with respect to the Collateral (except as
agreed by the First Lien Collateral Agent or to the extent expressly permitted
by Section 6.03) and, to the extent the Liens in respect of the
Collateral securing the First Lien Obligations are subordinated to or pari
passu with such DIP Financing, the Second Lien Collateral Agent will
subordinate its Liens in the Collateral to (A) the Liens securing such DIP
Financing (and all obligations relating thereto), (B) any adequate
protection provided to the First Lien Claimholders and (C) any “carve-out”
for professional and United States Trustee fees, claims of reclamation
creditors or holders of claims under Section 503(b) of the Bankruptcy
Code agreed to by the First Lien Collateral Agent; and (b) notice received
two (2) calendar days prior to the entry of an order approving such usage
of cash collateral or approving such DIP Financing shall be adequate notice; provided
that the foregoing shall not prohibit the Second Lien Collateral Agent or the
Second Lien Claimholders from objecting solely to any provisions in any DIP
Financing relating to, describing or requiring any provision or content of a
plan of reorganization other than provisions solely requiring that the DIP
Financing be paid in full in cash.  The
Second Lien Collateral Agent (on behalf of itself and the Second Lien
Claimholders) agrees that it will raise no objection to or oppose a sale or
other disposition of any Collateral (and any post-petition assets subject to
adequate protection liens in favor of the First Lien Collateral Agent) free and
clear of its Liens or other claims under Section 363 of the Bankruptcy
Code if the Requisite Claimholders under the Credit Agreement have consented to
such sale or disposition of such assets so long as the respective interests of
the Second Lien Claimholders attach to the proceeds thereof, subject to the terms
of this Agreement.  If requested by the
First Lien Collateral Agent in connection therewith, the Second Lien Collateral
Agent shall affirmatively consent to such a sale or disposition.


 


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


 


24

















 


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


 


SECTION 6.03               Adequate
Protection.


 


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


 


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


 


25

















 


SECTION 6.04               No
Waiver.  Nothing contained herein
shall prohibit or in any way limit the First Lien Collateral Agent or any First
Lien Claimholder from objecting in any Insolvency or Liquidation Proceeding or
otherwise to any action taken by the Second Lien Collateral Agent or any of the
Second Lien Claimholders in respect of the Collateral, including the seeking by
the Second Lien Collateral Agent or any Second Lien Claimholders of adequate
protection in respect of the Collateral or the asserting by the Second Lien
Collateral Agent or any Second Lien Claimholders of any of its rights and
remedies under the Second Lien Documents or otherwise; provided, however, that
this Section 6.04 shall not limit the rights of the Second Lien
Claimholders under the proviso in Section 3.01(a)(ii) or under
Section 6.03 or Section 6.08.


 


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


 


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


 


SECTION 6.07               Reorganization
Securities.  If, in any Insolvency or
Liquidation Proceeding, debt obligations of the reorganized debtor secured by
Liens upon any property of the reorganized debtor of the type contemplated by
the definition of “Collateral” are distributed pursuant to a plan of
reorganization or similar dispositive restructuring plan, both on account of
First Lien Obligations and on account of Second Lien Obligations, then, to the
extent the debt obligations distributed on account of the First Lien
Obligations and on account of the Second Lien Obligations are secured by Liens
upon the same property of the type contemplated by the definition of “Collateral”,
the provisions of this Agreement will survive the distribution of such debt
obligations pursuant to such plan and will apply with like effect to the Liens
securing such debt obligations.


 


SECTION 6.08               Post-Petition
Claims.


 


(a)           Neither
the Second Lien Collateral Agent nor any other Second Lien Claimholder shall
oppose or seek to challenge any claim by the First Lien Collateral Agent or 


 


26

















 


any First Lien Claimholder for allowance in any Insolvency or
Liquidation Proceeding of First Lien Obligations consisting of post-petition
interest, fees, costs, charges or expenses to the extent of the value of the
First Lien Collateral Agent’s Lien on the Collateral held for the benefit of
the First Lien Claimholders, without regard to the existence of the Lien of the
Second Lien Collateral Agent on behalf of the Second Lien Claimholders on the
Collateral.


 


(b)           Neither
the First Lien Collateral Agent nor any other First Lien Claimholder shall
oppose or seek to challenge any claim by the Second Lien Collateral Agent or
any Second Lien Claimholder for allowance in any Insolvency or Liquidation
Proceeding of Second Lien Obligations consisting of post-petition interest,
fees, costs, charges or expenses to the extent of the value of the Lien of the
Second Lien Collateral Agent on behalf of the Second Lien Claimholders on the
Collateral (after taking into account the First Lien Obligations).


 


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


 


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


 


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


 


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


 


27
















 


SECTION 6.13               Limitation
of Applicability.  Notwithstanding
anything to the contrary in this Agreement, Article VI hereof shall
apply only with respect to the Collateral and shall not in any way affect the
rights of any of the Collateral Agent (as defined in the Shared Collateral
Agreement), the Note Trustee (as defined in the Shared Collateral Agreement) or
the holders of the 2014 Notes in their respective capacity as an unsecured
creditor or as a result of the Liens held by any of them on other assets of the
Company and the Guarantors not constituting Collateral.


 


ARTICLE VII

RELIANCE; WAIVERS; ETC.


 


SECTION 7.01               Non-Reliance.


 


(a)           The
consent by the First Lien Claimholders to the execution and delivery of the
Second Lien Documents and the grant to the Second Lien Collateral Agent on
behalf of the Second Lien Claimholders of a Lien on the Collateral and all
loans and other extensions of credit made or deemed made on and after the date
hereof by the First Lien Claimholders to the Grantors shall be deemed to have
been given and made in reliance upon this Agreement.


 


(b)           The
consent by the Second Lien Claimholders to the execution and delivery of the
First Lien Documents and the grant to the First Lien Collateral Agent on behalf
of the First Lien Claimholders of a Lien on the Collateral and all extensions
of credit made or deemed made on and after the date hereof by the Second Lien
Claimholders to the Grantors shall be deemed to have been given and made in
reliance upon this Agreement.


 


SECTION 7.02               No
Warranties or Liability.


 


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


 


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


 


(c)           The
Second Lien Collateral Agent and the Second Lien Claimholders shall have no
duty to the First Lien Collateral Agent or any of the First Lien Claimholders,
and the First Lien Collateral Agent and the First Lien Claimholders shall have
no duty to the Second 


 


28

















 


Lien Collateral Agent or any of the Second Lien Claimholders, to act or
refrain from acting in a manner which allows, or results in, the occurrence or
continuance of an event of default or default under any agreements with the
Company or any other Grantor (including the First Lien Documents and the Second
Lien Documents), regardless of any knowledge thereof which they may have or be
charged with.


 


(d)           The
Second Lien Collateral Agent (on behalf of itself and the Second Lien
Claimholders) hereby waives all claims against any First Lien Claimholder and
the First Lien Collateral Agent, arising out of any and all actions which the
First Lien Claimholders or the First Lien Collateral Agent may take or permit
or omit to take with respect to the foreclosure upon, or sale, liquidation or
other disposition of, any Collateral. 
The First Lien Collateral Agent (on behalf of itself and the First Lien
Claimholders) agrees that the Second Lien Claimholders and the Second Lien
Collateral Agent have no duty to them in respect of the maintenance or
preservation of the Collateral, the Second Lien Obligations or otherwise.  The Second Lien Collateral Agent (on behalf
of itself and the Second Lien Claimholders) agrees that the First Lien Claimholders
and the First Lien Collateral Agent have no duty to them in respect of the
maintenance or preservation of the Collateral, the First Lien Obligations or
otherwise.


 


(e)           The
Second Lien Collateral Agent (on behalf of itself and the Second Lien
Claimholders) agrees not to assert and hereby waives, to the fullest extent
permitted by law, any right to demand, request, plead or otherwise assert or
otherwise claim the benefit of, any marshalling, appraisal, valuation or other
similar right that may otherwise be available under applicable law with respect
to the Collateral or any other similar rights a junior secured creditor may
have under applicable law.


 


SECTION 7.03               Obligations
Unconditional.  All rights,
interests, agreements and obligations of the First Lien Collateral Agent and
the First Lien Claimholders and the Second Lien Collateral Agent and the Second
Lien Claimholders, respectively, hereunder shall remain in full force and
effect irrespective of:


 


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


 


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


 


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


 


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


 


29

















 


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


 


SECTION 7.04               Certain
Notices.


 


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


 


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


 


ARTICLE VIII

MISCELLANEOUS


 


SECTION 8.01               Inconsistencies
with Other Documents.  In the event
of any conflict or inconsistency between this Agreement and any First Lien
Collateral Document or any Second Lien Collateral Document, the terms of this
Agreement shall control.  The parties
hereto acknowledge that the terms of this Agreement are not intended (i) to
negate any specific rights granted to the Company in the First Lien Documents
and the Second Lien Documents or (ii) to negate the rights of the
Collateral Agent (as defined in the Shared Collateral Agreement), the Note
Trustee (as defined in the Shared Collateral Agreement) and/or the holders of
the 2014 Notes with respect to assets of the Company and the Grantors (other
than the Collateral) granted pursuant to the Indenture, the Shared Collateral
Agreement or other Collateral Documents (as defined in the Shared Collateral
Agreement).


 


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


 


30

















 


any Insolvency or
Liquidation Proceeding.  Any provision of
this Agreement which is prohibited or unenforceable in any jurisdiction shall
not invalidate the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall as to such jurisdiction, be
ineffective only to the extent of such prohibition or unenforceability without
invalidating the remainder of such provision or the remaining provisions hereof
or affecting the validity or enforceability of such provision in any other jurisdiction.  All references to the Company or any other
Grantor shall include the Company or such 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.  This Agreement shall terminate and be of no
further force and effect, (a) with respect to the Second Lien Collateral
Agent, the Second Lien Claimholders and the Second Lien Obligations, upon the
later of (i) the date upon which the obligations under the Indenture
terminate and payment has been made in full in cash of all other Second Lien
Obligations outstanding on such date and (ii) if there are other Second
Lien Obligations outstanding on such date, the date upon which such Second Lien
Obligations terminate and (b) with respect to the First Lien Collateral
Agent, the First Lien Claimholders and the First Lien Obligations, the date of
Discharge of First Lien Obligations, subject to the rights of the First Lien
Claimholders under Section 5.06 and Section 6.05.


 


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


 


SECTION 8.04               Information
Concerning Financial Condition of the Company and its Subsidiaries.


 


(a)           The
First Lien Collateral Agent and the First Lien Claimholders, on the one hand,
and the Second Lien Claimholders and the Second Lien Collateral Agent, on the
other hand, shall each be responsible for keeping themselves informed of (i) the
financial condition of the Company and its Subsidiaries and all endorsers
and/or guarantors of the First Lien Obligations or the Second Lien Obligations
and (ii) all other circumstances bearing upon the risk of nonpayment of
the First Lien Obligations or the Second Lien Obligations.  The First Lien Collateral Agent and the First
Lien Claimholders shall have no duty to advise the Second Lien Collateral Agent
or any Second Lien Claimholder of information known to it or them regarding
such condition or any such circumstances or otherwise.  In the event the First Lien Collateral Agent
or any of the First Lien Claimholders, in its or their sole discretion,
undertakes at any time or from time to time to provide any such information to
the Second Lien Collateral Agent or any Second Lien Claimholder, it or they
shall be under no obligation (w) to make, and the First Lien Collateral
Agent and the First Lien Claimholders shall not make, any express or implied
representation or warranty, including with respect to the accuracy,
completeness, truthfulness or validity of any such information so provided, (x) to
provide any additional information or to provide any such information on any
subsequent occasion, (y) to undertake any investigation or 


 


31

















 


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


 


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


 


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


 


SECTION 8.06               Application
of Payments.  All payments received
by the First Lien Collateral Agent or the First Lien Claimholders with respect
to the Collateral may be applied, reversed and reapplied, in whole or in part,
to such part of the First Lien Obligations provided for in the First Lien
Documents.  The Second Lien Collateral
Agent (on behalf of itself and the Second Lien Claimholders), assents to any
extension or postponement of the time of payment of the First Lien Obligations
or any part thereof and to any other indulgence with respect thereto, to any
substitution, exchange or release of any security which may at any time secure
any part of the First Lien Obligations (it being understood that the First Lien
Collateral Agent shall receive only assets of the type contemplated by the
definition of “Collateral” in consideration for such substitution, exchange or
release and that such assets shall be subject to the Lien of the Second Lien
Collateral Agent) and to the addition or release of any other Person primarily
or secondarily liable therefor.


 


SECTION 8.07               SUBMISSION
TO JURISDICTION.


 


(a)           EACH
PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK SITTING IN THE BOROUGH OF MANHATTAN, NEW YORK AND OF THE UNITED STATES
DISTRICT COURT SITTING IN THE SOUTHERN DISTRICT OF NEW YORK AND ANY APPELLATE COURT
THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
SUCH NEW YORK STATE COURTS OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, IN SUCH FEDERAL COURT.  EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON
THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER
FIRST LIEN DOCUMENT OR SECOND LIEN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
FIRST LIEN COLLATERAL 


 


32

















 


AGENT, THE SECOND LIEN COLLATERAL AGENT, ANY FIRST LIEN CLAIMHOLDER OR
SECOND LIEN CLAIMHOLDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER FIRST LIEN DOCUMENT OR SECOND LIEN
DOCUMENT AGAINST THE COMPANY OR ANY OTHER GRANTOR OR ITS PROPERTIES IN THE
COURTS OF ANY JURISDICTION.


 


(b)           EACH
PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY COURT
REFERRED TO IN PARAGRAPH (A) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT.


 


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


 


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


 


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


 


33

















 


Agent may reasonably
request to effectuate the terms of and the lien priorities contemplated by this
Agreement.


 


SECTION 8.10               APPLICABLE
LAW.  THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.


 


SECTION 8.11               Binding
on Successors and Assigns.  This
Agreement shall be binding upon and inure to the benefit of the First Lien
Collateral Agent, the First Lien Claimholders, the Second Lien Collateral
Agent, the Second Lien Claimholders, the Control Agent and their respective
successors and assigns.


 


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


 


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


 


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


 


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


 


SECTION 8.15               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.


 


SECTION 8.16               No
Third Party Beneficiaries.  Nothing
in this Agreement express or implied shall be construed to confer upon any
Person (other than the parties hereto and their respective successors and
assigns permitted hereby) any legal or equitable right, remedy or claim under
or by reason of this Agreement.


 


SECTION 8.17               Provisions
Solely to Define Relative Rights. 
The provisions of this Agreement are and are intended solely for the
purpose of defining the relative rights with respect to the Collateral of the
First Lien Claimholders on the one hand and the Second Lien Claimholders on the
other hand.  Nothing in this Agreement is
intended to or shall impair the rights of the Company or any other Grantor, or
the obligations of the Company or any other 


 


34

















 


Grantor, which are
absolute and unconditional, to pay the First Lien Obligations and the Second
Lien Obligations as and when the same shall become due and payable in
accordance with their terms.


 


[Signature Pages Follow]


 


35
















 


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


 


	
   

  	
  ROYAL BANK OF CANADA, as First Lien Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Ann Hurley

  
	
   

  	
   

  	
  Name: Ann Hurley

  
	
   

  	
   

  	
  Title: Manager, Agency

  



 


 


Notice Address:


 


200 Bay Street, 12th Floor

South Tower, Royal Bank Plaza

Toronto, Ontario

M5J 2W7


 


[Prospect Intercreditor
Agreement]


 

















 


	
   

  	
  ROYAL BANK OF CANADA, as Control Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Ann Hurley

  
	
   

  	
   

  	
  Name: Ann Hurley

  
	
   

  	
   

  	
  Title: Manager, Agency

  



 


 


Notice Address:


 


200 Bay Street, 12th Floor

South Tower, Royal Bank Plaza

Toronto, Ontario

M5J 2W7


 


[Prospect Intercreditor
Agreement]


 

















 


	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as Second Lien Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Michael M. Hopkins

  
	
   

  	
   

  	
  Name: Michael M. Hopkins

  
	
   

  	
   

  	
  Title: Vice President

  



 


 


Notice Address:


 


Corporate
Trust Services


225
Asylum Street, 23rd Floor


Hartford,
CT  06103


Attention:  Michael M. Hopkins  (Prospect


Medical
Holdings 2009 Collateral Agency)


Telephone:  (860) 241-6820


Telecopier:  (860) 241-6881


 


[Prospect Intercreditor
Agreement]


 

















 


	
   

  	
  PROSPECT MEDICAL HOLDINGS, INC., as the Company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Samuel S. Lee

  
	
   

  	
   

  	
  Name: Samuel S. Lee

  
	
   

  	
   

  	
  Title: Chief Executive Officer

  



 


 


Notice Address:


 


10780
Santa Monica Blvd., Suite 400


Los
Angeles, CA 90025


Attention:  General Counsel


Telephone:  (310) 943-4500


Telecopier:  (310) 943-4501


 


 


	
   

  	
  SUBSIDIARIES:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ALTA HOSPITALS SYSTEM, LLC, as Grantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Samuel S. Lee

  
	
   

  	
   

  	
  Name: Samuel S. Lee

  
	
   

  	
   

  	
  Title: Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ALTA HOLLYWOOD HOSPITALS, INC., as Grantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Samuel S. Lee

  
	
   

  	
   

  	
  Name: Samuel S. Lee

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ALTA LOS ANGELES HOSPITALS, INC., as Grantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Samuel S. Lee

  
	
   

  	
   

  	
  Name: Samuel S. Lee

  
	
   

  	
   

  	
  Title: President

  



 


[Prospect Intercreditor
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  GENESIS HEALTHCARE OF SOUTHERN CALIFORNIA, INC.,
  A MEDICAL GROUP,
  as Grantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/
  Samuel S. Lee

  
	
   

  	
   

  	
  Name:
  Samuel S. Lee

  
	
   

  	
   

  	
  Title:
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  POMONA VALLEY MEDICAL GROUP,
  INC., as Grantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Samuel S. Lee

  
	
   

  	
   

  	
  Name:
  Samuel S. Lee

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PROMED HEALTH CARE
  ADMINISTRATORS,
  as Grantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Samuel S. Lee

  
	
   

  	
   

  	
  Name:
  Samuel S. Lee

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PROMED HEALTH SERVICES COMPANY, as Grantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Samuel S. Lee

  
	
   

  	
   

  	
  Name:
  Samuel S. Lee

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PROSPECT HOSPITAL ADVISORY SERVICES, INC., as Grantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Samuel S. Lee

  
	
   

  	
   

  	
  Name:
  Samuel S. Lee

  
	
   

  	
   

  	
  Title:
  Chief Executive Officer

  



 


[Prospect Intercreditor
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  PROSPECT HEALTH SOURCE MEDICAL GROUP, INC., as Grantor

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Samuel S. Lee

  
	
   

  	
   

  	
  Name:
  Samuel S. Lee

  
	
   

  	
   

  	
  Title:
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PROSPECT MEDICAL GROUP, INC., as Grantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Samuel S. Lee

  
	
   

  	
   

  	
  Name:
  Samuel S. Lee

  
	
   

  	
   

  	
  Title:
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PROSPECT MEDICAL SYSTEMS, INC.,
  as Grantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Samuel S. Lee

  
	
   

  	
   

  	
  Name:
  Samuel S. Lee

  
	
   

  	
   

  	
  Title:
  Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PROSPECT NWOC MEDICAL GROUP,
  INC., as
  Grantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Samuel S. Lee

  
	
   

  	
   

  	
  Name:
  Samuel S. Lee

  
	
   

  	
   

  	
  Title:
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PROSPECT PROFESSIONAL CARE MEDICAL GROUP, INC., as Grantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Samuel S. Lee

  
	
   

  	
   

  	
  Name:
  Samuel S. Lee

  
	
   

  	
   

  	
  Title:
  Senior Vice President

  



 


[Prospect Intercreditor
Agreement]


 

















 


	
   

  	
  STARCARE MEDICAL GROUP, INC., as Grantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Samuel S. Lee

  
	
   

  	
   

  	
  Name:
  Samuel S. Lee

  
	
   

  	
   

  	
  Title:
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  UPLAND MEDICAL GROUP, A PROFESSIONAL MEDICAL
  CORPORATION, as
  Grantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Samuel S. Lee

  
	
   

  	
   

  	
  Name: Samuel S. Lee

  
	
   

  	
   

  	
  Title: Vice President

  



 


 


Notice Address:


 


c/o
Prospect Medical Holdings, Inc.


10780
Santa Monica Blvd., Suite 400


Los
Angeles, CA 90025


Attention:  General Counsel


Telephone:  (310) 943-4500


Telecopier:  (310) 943-4501


 


[Prospect Intercreditor
Agreement]