Exhibit
10.14


 


Execution
Version


 


INTERCREDITOR
AGREEMENT


 


This INTERCREDITOR AGREEMENT (“Agreement”)
is dated as of September 27,
2007, and entered into by and among ERICKSON AIR-CRANE INCORPORATED (the “Company”), KEYBANK
NATIONAL ASSOCIATION (“KeyBank”), 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
Administrative Agent”) and D.B. ZWIRN SPECIAL OPPORTUNITIES FUND, L.P. (“DBZ”),
in its capacity as administrative agent for the Second Lien Obligations (as
defined below), including its successors and assigns from time to time (the “Second
Lien Administrative Agent”)
and acknowledged and agreed
to by the Company and the
Grantors (as defined below).  Capitalized
terms used in this Agreement have the meanings assigned to them in Section 1
below.


 


RECITALS


 


The Company, the lenders and
agents party thereto, and KeyBank,
as Administrative Agent, have entered into that Credit Agreement dated as of
the date hereof providing for a revolving credit facility and letter of credit
facility (as amended, restated, supplemented, modified, replaced or refinanced
from time to time, the “First Lien Credit Agreement”);


 


The Company, the lenders and
agents party thereto, and DBZ,
as Lead Arranger and Bookrunner and Administrative Agent, entered into that
Credit Agreement dated as of the date hereof providing for a term loan (as
amended, restated, supplemented, modified, replaced or refinanced from time to
time, the “Second Lien Credit Agreement”);


 


Pursuant to the First Lien
Credit Agreement, the Company has agreed to cause certain current and future
domestic Subsidiaries of the Company (the “Guarantor Subsidiaries”)
to agree to guaranty the First Lien Obligations pursuant to a Subsidiary
Guaranty (the “First Lien Subsidiary Guaranty”);


 


The obligations of the
Company under the First Lien Credit Agreement and any Hedge Agreements with the
First Lien Lenders (or any of their affiliates) and the obligations of the
Guarantor Subsidiaries under the First Lien Subsidiary Guaranty will be secured
on a first priority basis by liens on substantially all the assets of the
Company, the Guarantor Subsidiaries and the stock in the Company pledged by the
Sponsors (as defined below) pursuant to the terms of the First Lien Collateral
Documents;


 


The obligations of the
Company under the Second Lien Credit Agreement will be secured on a second
priority basis by liens on certain assets of the Company pursuant to the terms
of the Second Lien Collateral Documents;


 


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


 

















 


In order to induce the First
Lien Administrative Agent and the First Lien Claimholders to consent to the
Company  incurring the Second Lien Obligations
and to induce the First Lien Claimholders to extend credit and other financial
accommodations and lend monies to or for the benefit of the Company or any
other Grantor, the Second Lien Administrative Agent on behalf of the Second
Lien Claimholders has agreed to the intercreditor and other provisions set
forth in this Agreement.


 


AGREEMENT


 


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


 


SECTION 1.  Definitions.


 


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


 


“Affiliate” means, with respect to a
specified Person, another Person that directly, or indirectly through one or
more intermediaries, controls or is controlled by or is under common control
with the Person specified.  For purposes
of this definition, a Person shall be deemed to “control” or be “controlled
by” a Person if such Person possesses, directly or
indirectly, power to direct or cause the direction of the management or
policies of such Person whether through ownership of equity interests, by
contract or otherwise.  Without limiting
the generality of the foregoing, in determining whether a Person is controlled
by a Grantor, such Person shall be deemed to be controlled by a Grantor if such
Grantor possesses, directly or indirectly, power to vote fifty percent (50%) or
more of the securities having ordinary voting power for the election of
directors, managing general partners or the equivalent.


 


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


 


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


 


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


 


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


 


“Cap Amount”
means $65,000,000, plus the Company’s obligations under any Hedge Agreements.


 


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


 


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“Company” has the meaning assigned to
that term in the Preamble to this Agreement.


 


“Comparable Second Lien Collateral Document” means, in
relation to any Collateral subject to any Lien created under any First Lien
Collateral Document, the Second Lien Loan Document that creates a Lien on the
same Collateral, granted by the same Grantor.


 


“Currency
Agreement” means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement, each of which is for the purpose of hedging the
foreign currency risk associated with the operations of the Company and/or its Affiliates
and not for speculative purposes.


 


“DIP Financing” has the meaning assigned to
that term in Section 6.1.


 


“Discharge of First Lien Obligations”  means, except to the extent
otherwise expressly provided in Section 5.5:


 


(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
such interest would be allowed in such Insolvency or Liquidation Proceeding),
on all Indebtedness outstanding under the First Lien Loan Documents and
constituting First Lien Obligations;


 


(b)                                 payment in full in
cash of all Hedging Obligations constituting First Lien Obligations and the
expiration or termination of all Hedge Agreements included in the First Lien
Obligations or the cash collateralization of all such Hedging Obligations on
terms satisfactory to each applicable counterparty;


 


(c)                                  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
(other than any indemnification obligations for which no claim or demand for
payment, whether oral or written, has been made at such time);


 


(d)                                 termination or
expiration of all commitments, if any, to extend credit that would constitute
First Lien Obligations; and


 


(e)                                  termination or cash
collateralization (in an amount and manner reasonably satisfactory to the First
Lien Administrative Agent, but in no event greater than 105% of the aggregate
undrawn face amount) of all letters of credit issued under the First Lien Loan
Documents and constituting First Lien Obligations.


 


“Disposition” has the meaning assigned to
that term in Section 5.1(a)(2).


 


“First Lien Administrative Agent” has the
meaning assigned to that term in the Preamble to this Agreement.


 


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“First Lien Claimholders”  means, at any relevant time,
the holders of First Lien Obligations at that time, including the First Lien
Lenders and the agents under the First Lien Loan Documents.


 


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


 


“First Lien Collateral Documents” means the
Collateral Documents (as defined in the First Lien Credit Agreement) and any
other agreement, document or instrument pursuant to which a Lien is granted
securing any First Lien Obligations or under which rights or remedies with
respect to such Liens are governed.


 


“First Lien Credit Agreement” has the
meaning assigned to that term in the Recitals to this Agreement.


 


“First Lien Lenders” means the “Lenders”
under and as defined in the First Lien Loan Documents.


 


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


 


“First Lien Mortgages” means a
collective reference to each mortgage, deed of trust and other document or
instrument under which any Lien on real property owned or leased by any Grantor
is granted to secure any First Lien Obligations or under which rights or
remedies with respect to any such Liens are governed.


 


“First Lien Obligations”  means, subject to clause (c) hereof,
the following:


 


(a) (i) all
principal of and interest (including without limitation any Post-Petition
Interest) and premium (if any) on all loans made pursuant to the First Lien
Credit Agreement, (ii) all reimbursement obligations (if any) and interest
thereon (including without limitation any Post-Petition Interest) with respect
to any letter of credit or similar instruments issued pursuant to the First
Priority Agreement, (iii) all Hedging Agreements entered into with a
Person who at the time such Hedge Agreement was entered into was the
administrative agent under the First Lien Credit Agreement or any First Lien
Lender (or any of their Affiliates), (iv) all guarantee obligations, fees, expenses and
other all other Obligations under the First Lien Credit Agreement and the other
First Lien Loan Documents, and (v) all indemnity obligations under the
First Lien Credit Agreement and other First Lien Loan Documents, in each case,
whether or not allowed or allowable in an Insolvency or Liquidation Proceeding.


 


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(b)  To the extent any
payment with respect to any First Lien Obligation (whether by or on behalf of
any Grantor, as proceeds of security, enforcement of any right of setoff or
otherwise) is declared to be a fraudulent conveyance or a preference in any
respect, set aside or required to be paid to a debtor in possession, any Second
Lien Claimholders, receiver or similar Person, then the obligation or part
thereof originally intended to be satisfied shall, for the purposes of this
Agreement and the rights and obligations of the First Lien Claimholders and the
Second Lien Claimholders, be deemed to be reinstated and outstanding as if such
payment had not occurred.  To the extent
that any interest, fees, expenses or other charges (including, without
limitation, Post-Petition Interest) to be paid pursuant to the First Lien Loan
Documents are disallowed by order of any court, including, without limitation,
by order of a Bankruptcy Court in any Insolvency or Liquidation Proceeding,
such interest, fees, expenses and charges (including, without limitation,
Post-Petition Interest) shall, as between the First Lien Claimholders and the
Second Lien Claimholders, be deemed to continue to accrue and be added to the
amount to be calculated as the “First Lien Obligations”.


 


(c)  Notwithstanding
the foregoing, if the sum of:  (1) Indebtedness
for borrowed money constituting principal outstanding under the First Lien
Credit Agreement and the other First Lien Documents; plus (2) the
aggregate face amount of any letters of credit issued but not reimbursed under
the First Lien Credit Agreement, is in excess of the Cap Amount, then only that portion of such Indebtedness and such
aggregate face amount of letters of credit equal to the Cap Amount shall be
included in First Lien Obligations and interest and reimbursement obligations
with respect to such Indebtedness and letters of credit shall only constitute
First Lien Obligations to the extent related to Indebtedness and face amounts
of letters of credit included in the First Lien Obligations.


 


“First Lien Subsidiary Guaranty” has the
meaning assigned to that term in the Recitals to this Agreement.


 


“Governmental Authority” means any
federal, state, municipal, national or other government, governmental
department, commission, board, bureau, court, agency or instrumentality or
political subdivision thereof or any entity or officer exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to any government or any court, in each case, whether associated with a state
of the United States, the United States, or a foreign entity or government.


 


“Grantors” means the Company, each of
the Guarantor Subsidiaries  and each other
Person that has or may from time to time hereafter execute and deliver a First
Lien Collateral Document or a Second Lien Collateral Document as a “grantor” or
“pledgor” (or the equivalent thereof).


 


“Guarantor Subsidiaries” has the
meaning set forth in the Recitals to this Agreement.


 


“Hedge Agreements”  means an
Interest Rate Agreement or a Currency Agreement entered into with a Lender
Counterparty in order to satisfy the requirements of


 


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the
First Lien Credit Agreement or otherwise in the ordinary course of business of
the Company and/or its Affiliates.


 


“Hedging Obligation” of any Person
means any obligation of such Person pursuant to any Hedge Agreements.


 


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


 


“Insolvency or Liquidation Proceeding” means:


 


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


 


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


 


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


 


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


 


“Interest Rate Agreement” means any
interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement or other similar agreement or arrangement designed to protect the
Company or any of its Affiliates against fluctuations in interest rates and is
not for speculative purposes.


 


“Lender
Counterparty” means Person who at the time such Hedge Agreement was
entered into was the administrative agent under the First Lien Credit Agreement,
a First Lien Lender or an Affiliate of any of the foregoing Persons.


 


“Lien” means any lien (including,
without limitation, judgment liens and liens arising by operation of law),
mortgage, pledge, assignment, security interest, charge or encumbrance of any
kind (including any agreement to give any of the foregoing, any conditional
sale or other title retention agreement, and any lease in the nature thereof)
and any option, call, trust, UCC financing statement or other preferential
arrangement having the practical effect of any of the foregoing.


 


“New Agent” has the meaning assigned to
that term in Section 5.5.


 


“Obligations” means all obligations of
every nature of each Grantor from time to time owed to any agent or trustee,
the First Lien Claimholders, the Second Lien Claimholders or any of them or
their respective Affiliates under the First Lien Loan


 


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Documents,
the Second Lien Loan Documents or Hedge Agreements, whether for principal,
interest or payments for early termination of Interest Rate Agreements, fees,
expenses, indemnification or otherwise and all guarantees of any of the
foregoing.


 


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


 


“Pledged Collateral” has the
meaning set forth in Section 5.4.


 


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


 


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


 


“Refinance” means, in respect of any
Indebtedness, to refinance, extend, renew, defease, amend, modify, supplement,
restructure, replace, refund or repay, or to issue other indebtedness, in
exchange or replacement for, such Indebtedness in whole or in part.  “Refinanced” and “Refinancing”  shall have correlative meanings.


 


“Second Lien Administrative Agent” has the
meaning assigned to that term in the Preamble of this Agreement.


 


“Second Lien Claimholders” means, at any
relevant time, the holders of Second Lien Obligations at that time, including
the Second Lien Lenders and the agents under the Second Lien Loan Documents.


 


“Second Lien Collateral” means all of
the Company’s (i) Eligible Aircranes and installed Engines and rotables, (ii) Other
Aircranes and (iii) Real Property (each as defined in the First Lien
Credit Agreement), with respect to which a Lien is granted as security for any
Second Lien Obligations.


 


“Second Lien Collateral Documents” means the
Collateral Documents (as defined in the Second Lien Credit Agreement) and any
other agreement, document or instrument pursuant to which a Lien is granted
securing any Second Lien Obligations or under which rights or remedies with
respect to such Liens are governed.


 


“Second Lien Credit Agreement” has the
meaning assigned to that term in the Recitals to this Agreement.


 


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


 


“Second Lien Loan Documents” means the
Second Lien Credit Agreement and the Loan Documents (as defined in the Second
Lien Credit Agreement) and each of the


 


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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 amended,
restated, supplemented, modified, renewed or extended from time to time in
accordance with the provisions of this Agreement.


 


“Second Lien Mortgages” means a
collective reference to each mortgage, deed of trust and any other document or
instrument under which any Lien on real property owned or leased by any Grantor
is granted to secure any Second Lien Obligations or under which rights or
remedies with respect to any such Liens are governed.


 


“Second Lien Obligations” means all
Obligations outstanding under the Second Lien Credit Agreement and the other
Second Lien Loan Documents.  “Second Lien
Obligations” shall include all interest accrued or accruing (or which would,
absent commencement of an Insolvency or Liquidation Proceeding, accrue) after
commencement of an Insolvency or Liquidation Proceeding in accordance with the
rate specified in the relevant Second Lien Loan Document whether or not the
claim for such interest is allowed as a claim in such Insolvency or Liquidation
Proceeding.


 


“Sponsors” means ZM Equity Partners, L.P., a
Delaware limited partnership, D.B. Zwirn & Co., L.P., a Delaware
limited partnership, Stonehouse Capital Partners, LLC, a Delaware limited
liability company and each of their respective Affiliates.


 


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


 


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


 


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


 


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


 


(a)                                  any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other


 


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document as from time
to time amended, restated, supplemented, modified, renewed or extended;


 


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


 


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


 


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


 


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


 


SECTION 2.  Lien Priorities.


 


2.1                               Relative
Priorities. 
Notwithstanding the date, time, method, manner or order of grant,
attachment or perfection of any Liens securing the Second Lien Obligations
granted on the Collateral or of any Liens securing the First Lien Obligations
granted on the Collateral and notwithstanding any provision of the UCC, or any
other applicable law or the Second Lien Loan Documents or any defect or
deficiencies in, or failure to perfect or lapse in perfection of, or avoidance
as a fraudulent conveyance or otherwise of, the Liens securing the First Lien
Obligations or any other circumstance whatsoever, the Second Lien
Administrative 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 Administrative 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
Second Lien Obligations now or hereafter created; and


 


(b)                                 any Lien on the
Collateral securing any Second Lien Obligations now or hereafter held by or on behalf
of the Second Lien Administrative 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 any Liens on the Collateral securing
any First Lien Obligations now or hereafter created.  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, whether or not such Liens securing any First Lien Obligations are
subordinated to any Lien securing any other obligation of the Company, any
other Grantor or any other Person.


 


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2.2                               Prohibition on
Contesting Liens.  Each of the
Second Lien Administrative Agent, for itself and on behalf of each Second Lien
Claimholder, and the First Lien Administrative Agent, for itself and on behalf
of each First Lien Claimholder, agrees that it will 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,
perfection 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, or
the provisions of this Agreement; provided that nothing in this
Agreement shall be construed to prevent or impair the rights of the First Lien
Administrative Agent or any First Lien Claimholder to enforce this Agreement,
including the provisions of this Agreement relating to the priority of the
Liens securing the First Lien Obligations as provided in Sections 2.1 and 3.1.


 


2.3                               No New Liens.  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,
the parties hereto agree that the Company shall not, and shall not permit any
other Grantor to grant or permit any additional Liens on any asset or property
to secure any Second Lien Obligation unless it has granted or concurrently
grants a Lien on such asset or property to secure the First Lien Obligations,
the parties hereto agreeing that any such Lien shall be subject to Section 2.1
hereof.


 


2.4                               Similar Liens
and Agreements.  The parties
hereto agree, subject to the other provisions of this Agreement:


 


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


 


(b)                                 that the documents and
agreements creating or evidencing any Second Lien Collateral, subject to Section 5.3(d),
shall be in all material respects the same forms of documents covering the same
First Lien Collateral other than with respect to the first lien and the second
lien nature of the Obligations thereunder.


 


SECTION 3.  Enforcement.


 


3.1                               Exercise of Remedies.


 


(a)                                  Until the Discharge of
First Lien Obligations has occurred, whether or not any Insolvency or
Liquidation Proceeding has been commenced by or against the Company or any
other Grantor, the Second Lien Administrative Agent and the Second Lien
Claimholders:


 


(1)                                  will not
exercise or seek to exercise any rights or remedies with respect to any
Collateral (including the exercise of any right of setoff or any


 


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right
under any lockbox agreement, account control agreement, landlord waiver or
bailee’s letter or similar agreement or arrangement to which the Second Lien
Administrative Agent or any Second Lien Claimholder is a party) or institute
any action or proceeding with respect to such rights or remedies (including any
action of foreclosure); provided, however, that the Second
Lien Administrative Agent may exercise any or all such rights or remedies
and/or the Second Lien Claimholders may direct the Second Lien Administrative
Agent to exercise remedies with respect to the Collateral, in each case, after
the passage of a period of at least 180 days has elapsed since the later of: (i) the
date on which the Second Lien Administrative Agent declared the existence of
any Event of Default under any Second Lien Loan Documents and demanded the
repayment of all the principal amount of any Second Lien Obligations; and (ii) the
date on which the First Lien Administrative Agent received notice from the
Second Lien Administrative Agent of such declarations of an Event of Default,
(the “Standstill Period”); provided further, however,
that notwithstanding anything herein to the contrary, in no event shall the Second
Lien Administrative Agent or any Second Lien Claimholder exercise any rights or
remedies with respect to the Collateral if, notwithstanding the expiration of
the Standstill Period, the First Lien Administrative Agent or First Lien
Claimholders shall have commenced and be diligently pursuing the exercise of
their rights or remedies with respect to all or any material portion of the
Collateral (prompt notice of such exercise to be given to the Second Lien
Administrative Agent);


 


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


 


(3)                                  subject to
their rights under clause (a)(1) above, will not object to the forbearance
by the First Lien Administrative Agent or the First Lien Claimholders from
bringing or pursuing any foreclosure proceeding or action or any other exercise
of any rights or remedies relating to the Collateral, in each case, so long as
the Liens granted to secure the Second Lien Obligations of the Second Lien
Claimholders attach to the proceeds thereof subject to the relative priorities
described in Section 2.


 


(b)                                 Until the Discharge of
First Lien Obligations has occurred, whether or not any Insolvency or
Liquidation Proceeding has been commenced by or against the Company or any
other Grantor, subject to Section 3.1(a)(1), the First Lien Administrative
Agent and the First Lien Claimholders shall have the exclusive right to enforce
rights, exercise remedies (including set-off, recoupment and the right to
credit bid their debt) and, subject to Section 5.1, to make determinations
regarding the release, disposition, or restrictions with respect to the
Collateral without any consultation with or the consent of the Second Lien
Administrative Agent or any Second Lien Claimholder; provided that the
Lien securing the Second Lien Obligations shall remain on the proceeds of such
First Lien Collateral not applied to reduce First Lien Obligations subject to
the relative priorities described in Section 2.  In exercising rights and remedies with
respect to the First Lien


 


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


 


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


 


(1)                                  file a claim or
statement of interest with respect to the Second Lien Obligations; provided
that an Insolvency or Liquidation Proceeding has been commenced by or against
the Company;


 


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


 


(3)                                  file any
necessary responsive or defensive pleadings in opposition to any motion, claim,
adversary proceeding or other pleading made by any person objecting to or
otherwise seeking the disallowance of the claims of the Second Lien
Claimholders, including any claims secured by the Second Lien Collateral, if
any, in each case in accordance with the terms of this Agreement;


 


(4)                                  vote on any
plan of reorganization, file any proof of claim, make 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 Second
Lien Collateral; and


 


(5)                                  exercise any of
its rights or remedies with respect to the Second Lien Collateral after the
termination of the Standstill Period to the extent permitted by Section 3.1(a)(1).


 


The Second Lien
Administrative 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 and recoupment) with respect to any Collateral in its capacity as a
creditor, unless and until the Discharge of First Lien Obligations has
occurred, except in connection with any foreclosure expressly permitted by Section 3.1(a)(1) to
the extent the Second Lien Administrative Agent and Second Lien Claimholders
are permitted to retain the proceeds thereof in accordance with Section 4.2
of this Agreement).  Without limiting the
generality of the foregoing, unless and until the Discharge of First Lien
Obligations has occurred, except as expressly provided in Sections 3.1(a), 6.3(b) and
this Section 3.1(c), the sole right


 


12

















 


of
the Second Lien Administrative Agent and the Second Lien Claimholders with
respect to the Second Lien Collateral is to hold a Lien on such 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 First Lien Obligations has occurred.


 


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


 


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


 


(2)                                  the Second Lien
Administrative Agent, for itself and on behalf of 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 in which the First
Lien Administrative Agent or the First Lien Claimholders seek to enforce or
collect the First Lien Obligations or the Liens securing the First Lien
Obligations granted in any of the First Lien Collateral undertaken in
accordance with this Agreement, regardless of whether any action or failure to
act by or on behalf of the First Lien Administrative Agent or First Lien
Claimholders is adverse to the interest of the Second Lien Claimholders.


 


(e)                                  Except as specifically
set forth in Sections 3.1(a) and (d), the Second Lien Administrative Agent
and the Second Lien Claimholders may exercise rights and remedies as unsecured
creditors against the Company in accordance with the terms of the Second Lien
Loan Documents and applicable law; provided that in the event that any
Second Lien Claimholder becomes a judgment Lien creditor in respect of First
Lien Collateral as a result of its enforcement of its rights as an unsecured
creditor with respect to the Second Lien Obligations, such judgment Lien shall
be subject to the terms of this Agreement for all purposes (including in
relation to the First Lien Obligations) as the other Liens securing the Second
Lien Obligations are subject to this Agreement.


 


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


 


13

















 


3.2          Actions Upon Breach.  If any Second
Lien Claimholder, in contravention of the terms of this Agreement, in any way
take, attempt to or threaten to take any action with respect to the Second Lien
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, this Agreement shall create an irrebutable
presumption and admission by such Second Lien Claimholder that relief against
such Second Lien Claimholder by injunction, specific performance and/or other
appropriate equitable relief is necessary to prevent irreparable harm to the
First Lien Claimholders, it being understood and agreed by the Second Lien
Administrative Agent on behalf of each Second Lien Claimholder that (i) the
First Lien Claimholders’ damages from its actions may at that time be difficult
to ascertain and may be irreparable, and (ii) each Second Lien Claimholder
waives any defense that the Grantors and/or the First Lien Claimholders cannot
demonstrate damage and/or be made whole by the awarding of damages.


 


SECTION 4.  Payments.


 


4.1                               Application of
Proceeds.  So long as
the Discharge of First Lien Obligations has not occurred, whether or not any
Insolvency or Liquidation Proceeding has been commenced by or against the
Company or any other Grantor, Collateral or proceeds thereof received in
connection with the sale or other disposition of, or collection on, such
Collateral upon the exercise of remedies by the First Lien Administrative Agent
or First Lien Claimholders shall be applied by the First Lien Administrative
Agent to the First Lien Obligations in such order as specified in the relevant
First Lien Loan Documents.  Upon the
Discharge of First Lien Obligations, the First Lien Administrative Agent shall
deliver to the Second Lien Administrative Agent any Second Lien Collateral and
proceeds of such 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 Administrative Agent to the Second Lien
Obligations in such order as specified in the Second Lien Collateral Documents.


 


4.2                               Payments Over.  (a)  So long as the Discharge of First
Lien Obligations has not occurred, whether or not any Insolvency or Liquidation
Proceeding has been commenced by or against the Company or any other Grantor,
any Collateral or proceeds thereof (including assets or proceeds subject to
Liens referred to in the final sentence of Section 2.3) received by the
Second Lien Administrative Agent or any Second Lien Claimholders in connection
with the exercise of any right or remedy (including set-off or recoupment)
relating to the Collateral in contravention of this Agreement in all cases
shall be segregated and held in trust and forthwith paid over to the First Lien
Administrative 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 Administrative Agent is hereby authorized to make any such
endorsements as agent for the Second Lien Administrative Agent or any such
Second Lien Claimholders.  This
authorization is coupled with an interest and is irrevocable until the
Discharge of First Lien Obligations.


 


(b)  So long as the
Discharge of First Lien Obligations has not occurred, whether or not any
Insolvency or Liquidation Proceeding has been commenced by or


 


14

















 


against
the Company or any other Grantor, any Collateral or proceeds thereof (including
assets or proceeds subject to Liens referred to in the final sentence of Section 2.3)
received by the Second Lien Administrative Agent or any Second Lien
Claimholders in connection with the exercise of any right or remedy (including
set-off or recoupment) relating to the Second Lien Collateral not in
contravention of this Agreement shall be segregated and held in trust and,
subject to reductions for reasonable costs and attorneys’ fees permitted under
the Second Lien Loan Documents incurred in the exercise of such right or remedy
by the Second Lien Administrative Agent or any Second Lien Claimholder in
connection with the recovery of such Collateral, forthwith paid over to the
First Lien Administrative 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 Administrative Agent is hereby authorized to make any
such endorsements as agent for the Second Lien Administrative Agent or any such
Second Lien Claimholders.  This
authorization is coupled with an interest and is irrevocable until the
Discharge of First Lien Obligations.


 


(c)  So long as the
Discharge of First Lien Obligations has not occurred, if in any Insolvency or
Liquidation Proceeding the Second Lien Administrative Agent or any Second Lien
Claimholders shall receive any distribution of money or other property in
respect of the Second Lien Collateral, such money or other property shall be
segregated and held in trust and forthwith paid over to the First Lien
Administrative Agent for the benefit of the First Lien Claimholders in the same
form as received, with any necessary endorsements.  Any Lien received by the Second Lien
Administrative Agent or any Second Lien Claimholders in any Insolvency or
Liquidation Proceeding shall be subject to the terms of this Agreement.


 


SECTION 5.  Other
Agreements.


 


5.1                               Releases.  (a) If in connection with the exercise
of the First Lien Administrative Agent’s remedies in respect of the Collateral,
the First Lien Administrative Agent, for itself or on behalf of any of the
First Lien Claimholders, releases any of its Liens on any part of the
Collateral, then the Liens, if any, of the Second Lien Administrative 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 Administrative
Agent, for itself or on behalf of any such Second Lien Claimholders, promptly
shall execute and deliver to the First Lien Administrative Agent such
termination statements, releases and other documents as the First Lien
Administrative Agent or Grantor may request to effectively confirm such
release.


 


(b)                                 If, in connection with
any sale, lease, exchange, transfer or other disposition of any Collateral by
any Grantor (collectively, a “Disposition”)
permitted under the terms of the First Lien Loan Documents and not expressly
prohibited under the terms of the Second Lien Loan Documents (other than in
connection with the exercise of the First Lien Administrative Agent’s remedies
in respect of the Collateral which shall be governed by Section 5.1(a) above),
the First Lien Administrative Agent, for itself or on behalf of any of the
First Lien Claimholders, releases any of its Liens on any part of the
Collateral, other than (A) in connection with the payment applied to the
First Lien Obligations and (B) after


 


15

















 


the occurrence and
during the continuance of any Event of Default under the Second Lien Credit
Agreement, then the Liens, if any, of the Second Lien Administrative 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 Administrative Agent, for
itself or on behalf of any such Second Lien Claimholders, promptly shall
execute and deliver to the First Lien Administrative Agent or Grantor such termination
statements, releases and other documents as the First Lien Administrative Agent
or such Grantor may request to effectively confirm such release.


 


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


 


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


 


5.2                               Insurance.  Unless and until the Discharge of First Lien
Obligations has occurred, the First Lien Administrative Agent and the First
Lien Claimholders shall have the sole and exclusive right, subject to the
rights of the Grantors under the First Lien Loan Documents, to adjust
settlement for any insurance policy covering the Collateral in the event of any
loss thereunder and to approve any award granted in any condemnation or similar
proceeding (or any deed in lieu of condemnation) affecting the Collateral.  Unless and until the Discharge of First Lien
Obligations has occurred, and subject to the rights of the Grantors under the
First Lien Loan Documents, all proceeds of any such policy and any such award
(or any payments with respect to a deed in lieu of condemnation) if in respect
to the Collateral shall be paid to the First Lien Administrative Agent for the
benefit of the First Lien Claimholders pursuant to the terms of the First Lien
Loan Documents (including for purposes of cash collateralization of letters of
credit) and thereafter, to the extent no First Lien Obligations are
outstanding, and subject to the rights of the Company under the Second Lien
Loan Documents, to the Second Lien Administrative Agent for the benefit of the
Second Lien Claimholders to the extent required under the Second Lien
Collateral Documents and then, to the extent no Second Lien Obligations are
outstanding, to the owner of the subject property, such other Person as may be
entitled thereto or as a court of competent jurisdiction may otherwise
direct.  Until the Discharge of First
Lien Obligations has occurred, if the Second Lien Administrative Agent or any
Second Lien Claimholders


 


16

















 


shall, at any time, receive any proceeds of any such insurance policy
or any such award or payment in contravention of this Agreement, it shall
segregate and hold in trust and forthwith pay such proceeds over to the First
Lien Administrative Agent in accordance with the terms of Section 4.2.


 


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


 


(1)                                  increase the
sum of the aggregate principal amount of the First Lien Obligations in excess
of the Cap Amount;


 


(2)                                  increase the “Applicable
Margin” or similar component of the interest rate or yield provisions
applicable to the First Lien Obligations (excluding increases (A) resulting
from application of the pricing grid set forth in the First Lien Credit
Agreement as in effect on the date hereof or (B) resulting from the
accrual of interest at the default rate) by more than 200 basis points;


 


(3)                                  extend the
scheduled maturity of the First Lien Credit Agreement or any Refinancing
thereof beyond the scheduled maturity of the Second Lien Credit Agreement or
any Refinancing thereof; or


 


(4)                                  modify (or have
the effect of a modification of) the mandatory prepayment provisions of the
First Lien Credit Agreement in a manner adverse to the lenders under the Second
Lien Credit Agreement.


 


(b)                                 Without the prior
written consent of the First Lien Administrative Agent, no Second Lien Loan
Document may be Refinanced, amended, restated, supplemented or otherwise
modified or entered into to the extent such Refinancing, amendment,
restatement, supplement or modification, or the terms of any new Second Lien
Loan Document, would:


 


(1)                                  increase the “Applicable
Margin” or similar component of the interest rate (excluding increases
resulting from the accrual of interest at the default rate);


 


(2)                                  change any
default or Event of Default thereunder in a manner adverse to the loan parties
thereunder;


 


(3)                                  change (to
earlier dates) any dates upon which payments of principal or interest are due
thereon;


 


17

















 


(4)                                  change the prepayment
provisions thereof; or


 


(5)                                  increase
materially the obligations of the obligor thereunder or to confer any
additional material rights of the Second Lien Lenders (or a representative on
their behalf) which would be adverse to any loan parties, any First Lien
Lenders, the First Lien Administrative Agent or the holders of any other First
Lien Obligations.


 


The Second Lien Credit
Agreement may be Refinanced to the extent the terms and conditions of such
Refinancing debt meet the requirements of this Section 5.3(b), the average
life to maturity thereof is greater than or equal to that of the Second Lien
Credit Agreement and the holders of such Refinancing debt bind themselves in a
writing addressed to the First Lien Administrative Agent and the First Lien
Claimholders to the terms of this Agreement.


 


(c)                                  The Company agrees
that each Second Lien Collateral Document shall include the following language
(or language to similar effect approved by the First Lien Administrative
Agent):


 


“Notwithstanding anything
herein to the contrary, the lien and security interest granted to the Second
Lien Administrative Agent pursuant to this Agreement and the exercise of any
right or remedy by the Second Lien Administrative Agent hereunder are subject
to the provisions of the Intercreditor Agreement, dated as of September 27,
2007 (as amended, restated, supplemented or otherwise modified from time to
time, the “Intercreditor Agreement”), among Erickson Air-Crane
Incorporated, KeyBank National Association, as First Lien Administrative Agent
and D.B. Zwirn Special Opportunities Fund, L.P., as Second Lien Administrative
Agent and certain other persons party or that may become party thereto from
time to time.  In the event of any
conflict between the terms of the Intercreditor Agreement and this Agreement,
the terms of the Intercreditor Agreement shall govern and control.”


 


In addition, the Company
agrees that each Second Lien Mortgage covering any Collateral shall contain
such other language as the First Lien Administrative Agent may reasonably
request to reflect the subordination of such Second Lien Mortgage to the First
Lien Collateral Document covering such Collateral.


 


(d)                                 In the event any First
Lien Administrative Agent or the First Lien Claimholders and the relevant
Grantor 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
Administrative Agent, such First Lien Claimholders, the Company or any other
Grantor thereunder, then such amendment, waiver or consent shall apply
automatically to any comparable provision of the Comparable Second Lien
Collateral Document without the consent of the Second Lien Administrative Agent
or the Second Lien Claimholders and


 


18

















 


without any action by the Second Lien Administrative Agent,
the Company or any other Grantor, provided that:


 


(1)                                  no such
amendment, waiver or consent shall have the effect of:


 


(A)                              removing assets
subject to the Lien of the Second Lien Collateral Documents, except to the
extent that a release of such Lien is permitted or required by Section 5.1
and provided that there is a corresponding release of the Liens securing the
First Lien Obligations;


 


(B)                                imposing duties
on the Second Lien Administrative Agent without its consent;


 


(C)                                permitting
other Liens on the Collateral not permitted under the terms of the Second Lien
Loan Documents or Section 6; or


 


(D)                               being
prejudicial to the interests of the Second Lien Claimholders to a greater
extent than the First Lien Claimholders; and


 


(2)                                  notice of such
amendment, waiver or consent shall have been given to the Second Lien
Administrative Agent within ten Business Days after the effective date of such
amendment, waiver or consent.


 


5.4                               Gratuitous Bailee for
Perfection.  (a)  The First
Lien Administrative Agent agrees to hold that part of the Second Lien
Collateral that is in its possession or control (or in the possession or control
of its agents or bailees) to the extent that possession or control thereof is
taken to perfect a Lien thereon under the UCC (such Collateral being the “Pledged Collateral”) as collateral agent
for the First Lien Claimholders and as gratuitous bailee for the Second Lien
Administrative Agent (such bailment being intended, among other things, to
satisfy the requirements of Sections 8-106(d)(3), 8-301(a)(2) and 9-313(c) of
the UCC) and any assignee solely for the purpose of perfecting the security
interest granted under the First Lien Loan Documents and the Second Lien Loan
Documents, respectively, subject to the terms and conditions of this Section 5.4.


 


(b)                                 The First Lien
Administrative Agent shall have no obligation whatsoever to the First Lien
Claimholders, the Second Lien Administrative Agent or any Second Lien
Claimholder to ensure that the Pledged Collateral is genuine or owned by any of
the Grantors or to preserve rights or benefits of any Person except as
expressly set forth in this Section 5.4. 
The duties or responsibilities of the First Lien Administrative Agent
under this Section 5.4 shall be limited solely to holding the Pledged
Collateral as bailee in accordance with this Section 5.4 and delivering
the Pledged Collateral upon a Discharge of First Lien Obligations as provided
in paragraph (d) below.


 


(c)                                  The First Lien
Administrative Agent shall not have by reason of the First Lien Collateral
Documents, the Second Lien Collateral Documents, this Agreement or any other
document a fiduciary relationship in respect of the First Lien Claimholders,
the Second Lien Administrative Agent or any Second Lien Claimholder and the
Second Lien


 


19

















 


Administrative Agent
and the Second Lien Claimholders hereby waive and release the First Lien
Administrative Agent from all claims and liabilities arising pursuant to the
First Lien Administrative Agent’s role under this Section 5.4 as
gratuitous bailee with respect to the Common Collateral.  It is understood and agreed that the
interests of the First Lien Administrative Agent and the Second Lien
Administrative Agent may differ and the First Lien Administrative Agent shall
be fully entitled to act in its own interest without taking into account the
interests of the Second Lien Administrative Agent or Second Lien Claimholders.


 


(d)                                 Upon the Discharge of
First Lien Obligations under the First Lien Loan Documents to which the First
Lien Administrative Agent is a party, the First Lien Administrative Agent shall
deliver the remaining Pledged Collateral in its possession (if any) together
with any necessary endorsements (such endorsement shall be without recourse and
without any representation or warranty), first, to the Second Lien
Administrative Agent to the extent Second Lien Obligations remain outstanding
and, second, to the Company to the extent no First Lien Obligations or
Second Lien Obligations remain outstanding (in each case, so as to allow such
Person to obtain possession or control of such Pledged Collateral).  The First Lien Administrative Agent further
agrees to take all other action reasonably requested by the Second Lien
Administrative Agent at the expense of the Second Lien Administrative Agent or
the Company in connection with the Second Lien Administrative Agent obtaining a
first-priority interest in the remaining Pledged Collateral or as a court of
competent jurisdiction may otherwise direct.


 


5.5                               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 Loan Document evidencing a First Lien Obligation
which Refinancing is permitted by the Second Lien Loan Documents, then such
Discharge of First Lien Obligations shall automatically be deemed not to have
occurred for all purposes of this Agreement (other than with respect to any
actions taken as a result of the occurrence of such first Discharge of First
Lien Obligations), and, from and after the date on which the New First Lien
Debt Notice is delivered to the Second Lien Administrative Agent in accordance
with the next sentence, the obligations under such Refinancing of the First
Lien Loan Document shall automatically be treated as First Lien Obligations for
all purposes of this Agreement, including for purposes of the Lien priorities
and rights in respect of Collateral set forth herein, and the First Lien
Administrative Agent under such First Lien Loan Documents shall be the First
Lien Administrative Agent for all purposes of this Agreement.  Upon receipt of a notice (the “New First
Lien Debt Notice”) stating that the Company has entered into
a new First Lien Loan Document (which notice shall include the identity of the
new first lien collateral agent, such agent, the “New Agent”), the
Second Lien Administrative 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 Pledged Collateral held by it together with any necessary
endorsements (or otherwise allow the New Agent to obtain control of such
Pledged Collateral).  The New Agent shall
agree in a writing addressed to the Second


 


20

















 


Lien Administrative Agent and the Second Lien Claimholders to be bound
by the terms of this Agreement.


 


5.6                               Purchase Right.  Without prejudice to the enforcement of the
First Lien Claimholders remedies, the First Lien Claimholders agree that, at
any time following (a) an acceleration of the First Lien Obligations in
accordance with the terms of the First Lien Credit Agreement, (b) a
payment default under the First Lien Credit Agreement that has not been cured
or waived by the First Lien Secured Parties within 60 days of the occurrence
thereof or (c) the commencement of any Insolvency or Liquidation
Proceeding, the First Lien Claimholders will offer the Second Lien Claimholders
the option to purchase the entire aggregate amount of outstanding First Lien
Obligations (including unfunded commitments under the First Lien Credit
Agreement) at par plus accrued interest (without regard to any prepayment
penalty or premium), without warranty or representation or recourse, on a pro
rata basis across First Lien Claimholders. 
The Second Lien Claimholders shall irrevocably accept or reject such
offer within ten (10) Business Days of the receipt thereof and the parties
shall endeavor to close promptly thereafter. 
If the Second Lien Claimholders accept such offer, it shall be exercised
pursuant to documentation mutually acceptable to each of the First Lien
Administrative Agent and the Second Lien Administrative Agent.  If the Second Lien Claimholders reject such
offer (or do not so irrevocably accept such offer within the required
timeframe), the First Lien Claimholders shall have no further obligations pursuant
to this Section 5.6 and may take any further actions in their sole
discretion in accordance with the First Lien Loan Documents and this Agreement.


 


SECTION 6.  Insolvency or
Liquidation Proceedings.


 


6.1                               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 Administrative Agent shall desire to permit the use of “Cash
Collateral” (as such term is defined in Section 363(a) of the
Bankruptcy Code), on which the First Lien Administrative Agent or any other
creditor has a Lien or to permit the Company or any other Grantor to obtain
financing, whether from the First Lien Claimholders or any other Person under Section 364
of the Bankruptcy Code or any similar Bankruptcy Law (“DIP
Financing”), then the Second Lien Administrative Agent, on behalf of
itself and the Second Lien Claimholders, agrees that it will raise no objection
to such Cash Collateral use or DIP Financing and will not request adequate
protection or any other relief in connection therewith (except, as expressly
agreed by the First Lien Administrative Agent or to the extent permitted by Section 6.3);
provided  that the aggregate principal amount of the DIP Financing
plus the aggregate outstanding principal amount of First Lien
Obligations plus the aggregate face amount of any letters of credit
issued and not reimbursed under the First Lien Credit Agreement does not exceed
the Cap Amount and the Second Lien Administrative Agent and the Second Lien
Claimholders retain the right to object to any ancillary agreements or
arrangements regarding Cash Collateral use or the DIP Financing that are
materially prejudicial to their interests. 
The Second Lien Administrative Agent on behalf of the Second Lien
Claimholders, agrees that it will raise no objection or oppose a motion to sell
or otherwise dispose of any Second Lien Collateral free and clear of its Liens
or other claims under Section 363 of the


 


21














 


Bankruptcy Code if the requisite First Lien Claimholders have consented
to such sale or disposition of such assets, and such motion does not impair the
rights of the Second Lien Claimholders under Section 363(k) of the
Bankruptcy Code; provided that the Cap Amount shall be reduced by an
amount equal to the net cash proceeds of such sale or other disposition which
are used to pay the principal or face amount of the First Lien Obligations.


 


6.2          Relief from the Automatic
Stay.  Until the Discharge of First
Lien Obligations has occurred, the Second Lien Administrative Agent, on behalf
of itself and the Second Lien Claimholders, agrees that none of them shall seek
(or support any other Person seeking) relief from the automatic stay or any
other stay in any Insolvency or Liquidation Proceeding in respect of the Second
Lien Collateral, without the prior written consent of the First Lien
Administrative Agent, unless a motion for adequate protection permitted under Section 6.3
has been denied by the Bankruptcy Court.


 


6.3          Adequate Protection.


 


(a)           The Second Lien Administrative Agent, on
behalf of itself and the Second Lien Claimholders, agrees that none of them
shall contest (or support any other Person contesting):


 


(1)           any request by the First Lien Administrative Agent or the
First Lien Claimholders for adequate protection; or


 


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


 


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


 


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


 


(2)           The Second Lien Administrative Agent and Second Lien
Claimholders shall only be permitted to seek adequate protection with respect
to their rights in the Second Lien Collateral in any Insolvency or Liquidation
Proceeding in the form of (A) additional collateral; provided that,
as adequate protection for the First Lien Obligations, the First Lien
Administrative Agent, on behalf of the First Lien Claimholders, is also granted
a senior Lien on such 


 


22

















 


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


 


(c)           The Second Lien Administrative Agent, for
itself and on behalf of the other Second Lien Claimholders, agrees that notice
of a hearing to approve DIP Financing or use of Cash Collateral on an interim
basis shall be adequate if delivered to the Second Lien Administrative Agent at
least two (2) Business Days in advance of such hearing and that notice of
a hearing to approve DIP Financing or use of Cash Collateral on 


 


23

















 


a final basis shall be
adequate if delivered to the Second Lien Administrative Agent at least fifteen
(15) days in advance of such hearing.


 


6.4          No Waiver.  Subject to Sections 3.1(a) and (d),
nothing contained herein shall prohibit or in any way limit the First Lien Administrative
Agent or any First Lien Claimholder from objecting in any Insolvency or
Liquidation Proceeding or otherwise to any action taken by the Second Lien
Administrative Agent or any of the Second Lien Claimholders, including the
seeking by the Second Lien Administrative Agent or any Second Lien Claimholders
of adequate protection or the asserting by the Second Lien Administrative Agent
or any Second Lien Claimholders of any of its rights and remedies under the
Second Lien Loan Documents or otherwise.


 


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


 


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


 


6.7          Post-Petition Interest.  (a)  Neither the Second Lien
Administrative Agent nor any Second Lien Claimholder shall oppose or seek to
challenge any claim by the First Lien Administrative Agent or any First Lien
Claimholder for allowance in any Insolvency or Liquidation Proceeding of First
Lien Obligations consisting of Post-Petition Interest to the extent of the
value of any First Lien Claimholder’s Lien, without regard to the existence of
the Lien of the Second Lien Administrative Agent on behalf of the Second Lien
Claimholders on the Collateral.


 


(b)           Neither the First Lien Administrative
Agent nor any other First Lien Claimholder shall oppose or seek to challenge
any claim by the Second Lien Administrative Agent or any Second Lien
Claimholder for allowance in any Insolvency or Liquidation Proceeding of Second
Lien Obligations consisting of Post-Petition Interest to the extent of the
value of the Lien of the Second Lien Administrative Agent on behalf of 


 


24

















 


the Second Lien Claimholders on the Second Lien Collateral
(after taking into account the value of the First Lien Obligations).


 


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


 


6.9          Separate Grants of Security
and Separate Classification. The Second Lien Administrative
Agent, for itself and on behalf of the Second Lien Claimholders, and the First
Lien Administrative Agent for itself and on behalf of the First Lien
Claimholders, acknowledges and agrees that:


 


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


 


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


 


To further effectuate the
intent of the parties as provided in the immediately preceding sentence, if it
is held that the claims of the First Lien Claimholders and the Second Lien
Claimholders in respect of the Second Lien Collateral constitute only one
secured claim (rather than separate classes of senior and junior secured
claims), then each of the parties hereto hereby acknowledges and agrees that,
subject to Sections 2.1 and 4.1, all distributions shall be made as if there
were separate classes of senior and junior secured claims against the Grantors
in respect of the Second Lien Collateral (with the effect being that, to the
extent that the aggregate value of the Second Lien Collateral is sufficient
(for this purpose ignoring all claims held by the Second Lien Claimholders),
the First Lien Claimholders shall be entitled to receive, in addition to amounts
distributed to them in respect of principal, pre-petition interest and other
claims, all amounts owing (or that would be owing if there were such separate
classes of senior and junior secured claims) in respect of post-petition
interest, including any additional interest payable pursuant to the First Lien
Credit Agreement, arising from or related to a default, which is disallowed as
a claim in any Insolvency or Liquidation Proceeding) before any distribution is
made in respect of the claims held by the Second Lien Claimholders with respect
to the Second Lien Collateral, with the Second Lien Administrative Agent, for
itself and on behalf of the Second Lien Claimholders, hereby acknowledging and
agreeing to turn over to the First Lien Administrative Agent, for itself and on
behalf of the First Lien Claimholders, Second Lien Collateral or proceeds of
Second Lien Collateral otherwise received or receivable by them to the extent
necessary to effectuate the intent of this sentence, even if such turnover has
the effect of reducing the claim or recovery of the Second Lien Claimholders).


 


25

















 


 


SECTION
7.  Reliance; Waivers; Etc.


 


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


 


7.2          No Warranties or Liability.  The First Lien Administrative Agent, on
behalf of itself and the First Lien Claimholders under the First Lien Loan
Documents, acknowledges and agrees that each of the Second Lien Administrative
Agent and the Second Lien Claimholders have made no express or implied
representation or warranty, including with respect to the execution, validity,
legality, completeness, collectibility or enforceability of any of the Second
Lien Loan Documents, the ownership of any Collateral or the perfection or
priority of any Liens thereon.  Except as
otherwise provided herein, the Second Lien Claimholders will be entitled to
manage and supervise their respective loans and extensions of credit under the
Second Lien Loan Documents in accordance with law and as they may otherwise, in
their sole discretion, deem appropriate. 
Except as otherwise provided herein, the Second Lien Administrative
Agent, on behalf of itself and the Second Lien Obligations, acknowledges and
agrees that the First Lien Administrative Agent and the First Lien Claimholders
have made no express or implied representation or warranty, including with
respect to the execution, validity, legality, completeness, collectibility or
enforceability of any of the First Lien Loan Documents, the ownership of any
Collateral or the perfection or priority of any Liens thereon.  Except as otherwise provided herein, the
First Lien Claimholders will be entitled to manage and supervise their
respective loans and extensions of credit under their respective First Lien
Loan Documents in accordance with law and as they may otherwise, in their sole
discretion, deem appropriate.  The Second
Lien Administrative Agent and the Second Lien Claimholders shall have no duty
to the First Lien Administrative Agent or any of the First Lien Claimholders,
and the First Lien Administrative Agent and the First Lien Claimholders shall
have no duty to the Second Lien Administrative 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 Loan Documents and the Second Lien Loan Documents), regardless of any
knowledge thereof which they may have or be charged with.


 


26

















 


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


 


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


 


(1)           change the manner, place or terms of payment or change or
extend the time of payment of, or amend, renew, exchange, increase or alter,
the terms of any of the First Lien Obligations or any Lien on any First Lien
Collateral or guaranty thereof or any liability of the Company or any other
Grantor, or any liability incurred directly or indirectly in respect thereof
(including any increase in or extension of the First Lien Obligations, without
any restriction as to the tenor or terms of any such increase or extension) or
otherwise amend, renew, exchange, extend, modify or supplement in any manner
any Liens held by the First Lien Administrative Agent or any of the First Lien
Claimholders, the First Lien Obligations or any of the First Lien Loan
Documents; provided that any such increase in the First Lien Obligations
shall not increase the sum of the Indebtedness constituting principal under the
First Lien Credit Agreement and the face amount of any letters of credit issued
under the First Lien Credit Agreement and not reimbursed to an amount in excess
of the Cap Amount;


 


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


 


(3)           settle or compromise any First Lien Obligation or any
other liability of the Company or any other Grantor or any security therefor or
any 


 


27

















 


liability
incurred directly or indirectly in respect thereof and apply any sums by whomsoever
paid and however realized to any liability (including the First Lien
Obligations) in any manner or order; and


 


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


 


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


 


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


 


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


 


(3)           the foreclosure upon, or sale, liquidation or other
disposition of, any First Lien Collateral. 
The Second Lien Administrative Agent, on behalf of itself and the Second
Lien Claimholders, agrees that the First Lien Claimholders and the First Lien
Administrative Agent have no duty to them in respect of the maintenance or
preservation of the First Lien Collateral, the First Lien Obligations or
otherwise.


 


(d)           Until the Discharge of First Lien
Obligations, the Second Lien Administrative 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.


 


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


 


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


 


28

















 


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


 


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


 


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


 


(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 Administrative Agent,
the First Lien Obligations, any First Lien Claimholder, the Second Lien
Administrative Agent, the Second Lien Obligations or any Second Lien
Claimholder in respect of this Agreement.


 


SECTION
8.  Miscellaneous.


 


8.1          Conflicts.  In the event of any conflict between the
provisions of this Agreement and the provisions of the First Lien Loan
Documents or the Second Lien Loan Documents, the provisions of this Agreement
shall govern and control.


 


8.2          Effectiveness; Continuing
Nature of this Agreement; Severability.  This Agreement shall become effective when
executed and delivered by the parties hereto. 
This is a continuing agreement of lien subordination and the First Lien
Claimholders may continue, at any time and without notice to the Second Lien
Administrative Agent or any Second Lien Claimholder subject to the Second Lien
Loan Documents, to extend credit and other financial accommodations and lend
monies to or for the benefit of the Company or any Grantor constituting First
Lien Obligations in reliance hereof.  The
Second Lien Administrative 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.  The terms of this Agreement shall survive,
and shall continue in full force and effect, in any Insolvency or Liquidation
Proceeding.  Any provision of this
Agreement that is prohibited or unenforceable in any jurisdiction shall not
invalidate the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.  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:


 


29

















 


(a)           with respect to the First Lien
Administrative 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 6.5; and


 


(b)           with respect to the Second Lien Administrative
Agent, the Second Lien Claimholders and the Second Lien Obligations, upon the
later of (1) the date upon which the obligations under the Second Lien
Credit Agreement terminate if there are no other Second Lien Obligations
outstanding on such date and (2) if there are other Second Lien
Obligations outstanding on such date, the date upon which such Second Lien
Obligations terminate.


 


8.3          Amendments; Waivers.  No amendment, modification or waiver of any
of the provisions of this Agreement by the Second Lien Administrative Agent or
the First Lien Administrative 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, the Company shall not have any right to
consent to or approve any amendment, modification or waiver of any provision of
this Agreement except to the extent its rights are directly and adversely
affected.


 


8.4          Information Concerning
Financial Condition of the Company and its Subsidiaries.  The First Lien Administrative Agent and the
First Lien Claimholders, on the one hand, and the Second Lien Claimholders and
the Second Lien Administrative Agent, on the other hand, shall each be
responsible for keeping themselves informed of (a) 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 (b) all other
circumstances bearing upon the risk of nonpayment of the First Lien Obligations
or the Second Lien Obligations.  The
First Lien Administrative Agent and the First Lien Claimholders shall have no
duty to advise the Second Lien Administrative 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 Administrative 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 Administrative
Agent or any Second Lien Claimholder, it or they shall be under no obligation:


 


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


 


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


 


(c)           to undertake any investigation; or


 


30

















 


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


 


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


 


8.6          Application of Payments.  All payments received by the First Lien
Administrative Agent or the First Lien Claimholders may be applied, reversed
and reapplied, in whole or in part, to such part of the First Lien Obligations
provided for in the First Lien Loan Documents. 
The Second Lien Administrative Agent, on behalf of itself and the Second
Lien Claimholders, assents to any extension or postponement of the time of
payment, subject to Section 5.3(a)(3), of the First Lien Obligations or
any part thereof and to any other indulgence with respect thereto, to any
substitution, exchange or release of any security which may at any time secure
any part of the First Lien Obligations and to the addition or release of any
other Person primarily or secondarily liable therefor.


 


8.7          SUBMISSION TO
JURISDICTION; WAIVERS.  (a)  ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST ANY PARTY ARISING OUT OF OR RELATING HERETO MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE,
COUNTY AND CITY OF NEW YORK.  BY
EXECUTING AND DELIVERING THIS AGREEMENT, EACH PARTY, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY:


 


(1)           ACCEPTS GENERALLY AND UNCONDITIONALLY
THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;


 


(2)           WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS;


 


(3)           AGREES THAT SERVICE OF ALL PROCESS IN
ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED,


 


31














 


TO THE APPLICABLE PARTY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 8.8;
AND


 


(4)           AGREES THAT SERVICE AS PROVIDED IN
CLAUSE (3) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE
APPLICABLE PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE
CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT.


 


(b)           EACH OF THE PARTIES HERETO
HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT
AND THAT RELATE TO THE SUBJECT MATTER HEREOF, INCLUDING CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS.  EACH PARTY HERETO ACKNOWLEDGES
THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP
THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT,
AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS.  EACH PARTY HERETO FURTHER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.  THIS WAIVER IS
IRREVOCABLE; MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 8.7(b) AND
EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO.  IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.


 


(c)           EACH OF THE PARTIES HERETO
WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER FIRST LIEN LOAN DOCUMENT OR SECOND LIEN LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR ACTION OF ANY PARTY
HERETO.


 


8.8          Notices.  All notices to the Second Lien Claimholders
and the First Lien Claimholders permitted or required under this Agreement
shall also be sent to the Second Lien Administrative Agent and the First Lien
Administrative Agent, respectively. 
Unless otherwise specifically provided herein, any notice hereunder
shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier 


 


32

















 


service and shall be deemed to have been given when delivered in person
or by courier service and signed for against receipt thereof, upon receipt of
telefacsimile or telex, or three Business Days after depositing it in the
United States mail with postage prepaid and properly addressed.  For the purposes hereof, the addresses of the
parties hereto shall be as set forth below each party’s name on the signature pages hereto,
or, as to each party, at such other address as may be designated by such party
in a written notice to all of the other parties.


 


8.9          Further Assurances.  The First Lien Administrative Agent, on
behalf of itself and the First Lien Claimholders under the First Lien Loan
Documents, and the Second Lien Administrative Agent, on behalf of itself and
the Second Lien Claimholders under the Second Lien Loan Documents, 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 Administrative Agent or the Second Lien
Administrative Agent may reasonably request to effectuate the terms of and the
Lien priorities contemplated by this Agreement.


 


8.10        APPLICABLE
LAW.  THIS AGREEMENT, AND ANY CLAIM
OR CONTROVERSY RELATING TO THE SUBJECT MATTER HEREOF WHETHER SOUNDING IN
CONTRACT LAW OR TORT LAW, SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.


 


8.11        Binding on Successors and
Assigns.  This Agreement shall be
binding upon the First Lien Administrative Agent, the First Lien Claimholders,
the Second Lien Administrative Agent, the Second Lien Claimholders and their
respective successors and assigns.  If
either of the First Lien Administrative Agent or the Second Lien Administrative
Agent resigns or is replaced pursuant to the First Lien Credit Agreement or the
Second Lien Credit Agreement, as applicable, its successor shall be deemed to
be a party to this Agreement and shall have all the rights of, and be subject
to all the obligations of, this Agreement.


 


8.12        Specific Performance. Each of the
First Lien Administrative Agent and the Second Lien Administrative Agent may
demand specific performance of this Agreement. 
The First Lien Administrative Agent, on behalf of itself and the First
Lien Claimholders under the First Lien Loan Documents, and the Second Lien
Administrative 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 the First Lien Administrative
Agent or the First Lien Claimholders or the Second Lien Administrative Agent or
the Second Lien Claimholders, as the case may be.


 


8.13        Headings.  Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive
effect.


 


33

















 


8.14        Counterparts.  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. 
Delivery of an executed counterpart of a signature page of this
Agreement or any document or instrument delivered in connection herewith by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement or such other document or instrument, as applicable.


 


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.


 


8.16        No Third Party Beneficiaries.  This Agreement and the rights and benefits
hereof shall inure to the benefit of each of the parties hereto and its
respective successors and assigns and shall inure to the benefit of each of the
First Lien Claimholders and the Second Lien Claimholders.  Nothing in this Agreement shall impair, as
between the Company and the other Grantors and the First Lien Administrative
Agent and the First Lien Claimholders, or as between the Company and the other
Grantors and the Second Lien Administrative Agent and the Second Lien
Claimholders, the obligations of the Company and the other Grantors to pay
principal, interest, fees and other amounts as provided in the First Lien Loan
Documents and the Second Lien Loan Documents, respectively.


 


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 of the First Lien Administrative Agent and the
First Lien Claimholders on the one hand and the Second Lien Administrative
Agent and the Second Lien Claimholders on the other hand.  None of the Company, any other Grantor or any
other creditor thereof shall have any rights hereunder and neither the Company
nor any Grantor may rely on the terms hereof. 
Nothing in this Agreement is intended to or shall impair the obligations
of the Company or any other Grantor, which are absolute and unconditional, to
pay the First Lien Obligations and the Second Lien Obligations as and when the
same shall become due and payable in accordance with their terms.


 


34

















 


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


 


	
   

  	
  First
  Lien Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KEYBANK
  NATIONAL ASSOCIATION,

  
	
   

  	
  as First Lien
  Administrative Agent,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ RONALD J. MIDDLETON

  
	
   

  	
   

  	
  Name:   Ronald
  J. Middleton

  
	
   

  	
   

  	
  Title:   Vice
  President

  
	
   

  	
   

  
	
   

  	
  Large Middle Market

  
	
   

  	
  Mail Code:  OH-01-27-0500

  
	
   

  	
  127 Public Square

  
	
   

  	
  Cleveland, Ohio 44114-1306

  
	
   

  	
  Attn:    David
  J. Ray, Credit Officer

  
	
   

  	
  Telephone:

  	
  (216)
  689-4863

  
	
   

  	
  Facsimile:

  	
  (216)
  689-8468

  
	
   

  	
  Electronic Mail: David_J_Ray@keybank.com

  
				



 


S-1

















 


	
   

  	
  Second Lien Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  D.B. ZWIRN SPECIAL OPPORTUNITIES FUND, L.P.,

  
	
   

  	
  as Second Lien Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ LAWRENCE D. CUTLER

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  c/o D.B. Zwirn & Co.

  
	
   

  	
  745 5th Ave. 16th Floor

  
	
   

  	
  New York, New York 10001

  
	
   

  	
  Attn: Quinn Morgan

  
	
   

  	
  Telephone:  646-720-9100

  
	
   

  	
  Facsimile:  646-720-9000

  
	
   

  	
  Electronic
  Mail: qmorgan@dbzco.com

  



 


S-2

















 


	
  Acknowledged and Agreed to by:

  	
   

  
	
   

  	
   

  
	
  ERICKSON AIR-CRANE INCORPORATED

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ JAMES RILEY LOFTIN

  	
   

  
	
   

  	
  Name: James Riley Loftin

  	
   

  
	
   

  	
  Title: Chief Financial Officer

  	
   

  
	
   

  	
    Erickson Air-Crane Incorporated

  	
   

  
	
   

  	
   

  
	
  3100 Willow Springs Road

  	
   

  
	
  Central Point, Oregon 97502

  	
   

  
	
  Attn:

  	
  Mark F. Deems

  	
   

  
	
   

  	
  Executive Vice President, Chief Legal Officer and

  	
   

  
	
   

  	
  Corporate Secretary

  	
   

  
	
   

  	
  Telephone:

  	
  (541) 664-9405

  	
   

  
	
   

  	
  Fax:

  	
  (541) 664-9440

  	
   

  
	
   

  	
  Email:

  	
  mdeems@ericksonaircrane.com

  	
   

  
	
   

  	
   

  
	
  or

  	
   

  
	
   

  	
   

  
	
  Attn:

  	
  J. Riley Loftin

  	
   

  
	
   

  	
  Chief Financial Officer

  	
   

  
	
   

  	
  Telephone:

  	
  (541) 664-9541

  	
   

  
	
   

  	
  Fax:

  	
  (541) 664-9565

  	
   

  
	
   

  	
  Email:

  	
  rloftin@ericksonaircrane.com

  	
   

  
					



 


S-3