Document:

exv4w9

 

EXHIBIT
4.9

EXECUTION COPY

THREE PARTY INTERCREDITOR AGREEMENT

     Intercreditor Agreement (this “Agreement”), dated as of June 16, 2006, among JPMORGAN CHASE
BANK, N.A., as Administrative Agent (in such capacity, with its successors and assigns, and as more
specifically defined below, the “First Priority Representative”) for the First Priority Secured
Parties (as defined below), The Bank of New York Trust Company, N.A, as Collateral Agent (in such
capacity, with its successors and assigns, and as more specifically defined below, the “Second
Priority Representative”) for the Second Priority Secured Parties (as defined below), Merrill Lynch
PCG, Inc., as Secured Party (in such capacity, with its successors and assigns, and as more
specifically defined below, the “Third Priority Representative”) for the Third Priority Secured
Parties (as defined below), Libbey Glass, Inc. (the “Borrower”) and each of the other Loan Parties
(as defined below) party hereto.

     WHEREAS, the Borrower, Libbey Europe B.V., Libbey Inc., as a loan guarantor, the other Loan
Parties, the First Priority Representative and certain financial institutions and other entities
(the “First Priority Lenders”) are parties to that certain Credit Agreement, dated as of June 16,
2006 (the “Existing First Priority Agreement”), pursuant to which such financial institutions and
other entities have agreed to make loans and extend other financial accommodations to the Borrower
and Libbey Europe, B.V.; and

     WHEREAS, the Borrower, the other Loan Parties and The Bank of New York Trust Company, N.A., as
trustee (the “Trustee”), are parties to the Indenture, dated as of June 16, 2006 (the “Existing
Second Priority Agreement”), pursuant to which the Borrower has issued to the holders (the
“Holders”) its Floating Rate Senior Secured Notes due 2011 (the “Notes”), and may issue from time
to time additional notes, upon the terms and subject to the conditions set forth therein and
herein; and

     WHEREAS, the Borrower, the other Loan Parties and Merrill Lynch PGC, Inc. are parties to the
Indenture, dated as of June 16, 2006 (the “Existing Third Priority Agreement”), pursuant to which
the Borrower has issued to the holders (the “PIK Holders”) its Senior Subordinated Secured Pay in
Kind Notes due 2011 (the “PIK Notes”), and may issue from time to time additional notes, upon the
terms and subject to the conditions set forth therein and herein; and

     WHEREAS, the Borrower and the other Loan Parties have granted to the First Priority
Representative security interests in the Common Collateral (as defined below) as security for
payment and performance of the First Priority Obligations; and

     WHEREAS, the Borrower and the other Loan Parties have granted to the Second Priority
Representative security interests in the Common Collateral as security for payment and performance
of the Second Priority Obligations; and

     WHEREAS, the Borrower and the other Loan Parties have granted to the Third Priority
Representative security interests in the Common Collateral as security for payment and performance
of the Third Priority Obligations; and

     WHEREAS, it is a condition precedent to the purchase by the Holders of the Notes, by the PIK
Holders of the PIK Notes, and to the obligations of the First Priority Lenders to make their
respective extensions of credit from time to time to the Borrower that the parties hereto shall
have executed and delivered this Agreement for the purpose of setting forth the relative priority
of the liens created by the First Priority Security Documents, the Second Priority Security
Documents and the Third Priority Security Documents (as such terms are hereinafter defined) in
respect of the exercise of the rights and remedies in respect of the Common Collateral and the
application of proceeds thereof;

 

 

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     NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained and
other good and valuable consideration, the existence and sufficiency of which is expressly
recognized by all of the parties hereto, the parties agree as follows:

     SECTION 1. Definitions.

     1.1. Defined Terms. The following terms, as used herein, have the following meanings:

     “Additional First Priority Agreement” means any agreement approved for designation as such by
the First Priority Representative, the Second Priority Representative and the Third Priority
Representative.

     “Additional Second Priority Agreement” means any agreement approved for designation as such by
the First Priority Representative, the Second Priority Representative and the Third Priority
Representative.

     “Additional Third Priority Agreement” means any agreement approved for designation as such by
the First Priority Representative, the Second Priority Representative and the Third Priority
Representative.

     “Bankruptcy Code” means the United States Bankruptcy Code (11 U.S.C. §101 et seq.), as amended
from time to time.

     “Borrower” has the meaning set forth in the introductory paragraph hereof.

     “Cash Management Obligations” means, with respect to any Loan Party, any obligations of such
Loan Party owed to any First Priority Secured Party (or any of its affiliates) in respect of
treasury management arrangements, depositary or other cash management services.

     “Common Collateral” means all assets that are First Priority Collateral, Second Priority
Collateral and Third Priority Collateral.

     “DIP Financing” has the meaning set forth in Section 5.2.

     “Enforcement Action” means, with respect to the First Priority Obligations, the Second
Priority Obligations or the Third Priority Obligations, any demand for payment or acceleration
thereof, the exercise of any rights and remedies with respect to any Common Collateral securing
such obligations or the commencement or prosecution of enforcement of any of the rights and
remedies under, as applicable, the First Priority Documents, the Second Priority Documents or the
Third Priority Documents, or applicable law, including without limitation the exercise of any
rights of set-off or recoupment, and the exercise of any rights or remedies of a secured creditor
under the Uniform Commercial Code of any applicable jurisdiction or under the Bankruptcy Code.

     “Existing First Priority Agreement” has the meaning set forth in the first WHEREAS clause of
this Agreement.

 

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     “Existing Second Priority Agreement” has the meaning set forth in the second WHEREAS clause of
this Agreement.

     “Existing Third Priority Agreement” has the meaning set forth in the third WHEREAS clause of
this Agreement.

     “First Priority Agreement” means the collective reference to (a) the Existing First Priority
Agreement, (b) any Additional First Priority Agreement and (c) any other credit agreement, loan
agreement, note agreement, promissory note, indenture or other agreement or instrument evidencing
or governing the terms of any indebtedness or other financial accommodation that has been incurred
to extend, replace, refinance or refund in whole or in part the indebtedness and other obligations
outstanding under the Existing First Priority Agreement, any Additional First Priority Agreement or
any other agreement or instrument referred to in this clause (c) unless such agreement or
instrument expressly provides that it is not intended to be and is not a First Priority Agreement
hereunder (a “Replacement First Priority Agreement”). Any reference to the First Priority
Agreement hereunder shall be deemed a reference to any First Priority Agreement then extant.

     “First Priority Collateral” means all assets, whether now owned or hereafter acquired by the
Borrower or any other Loan Party, in which a Lien is granted or purported to be granted to any
First Priority Secured Party as security for any First Priority Obligation.

     “First Priority Creditors” means the First Priority Lenders, or any Persons that are
designated under the First Priority Agreement as the “First Priority Creditors” for purposes of
this Agreement.

     “First Priority Documents” means the First Priority Agreement, each First Priority Security
Document and each First Priority Guarantee.

     “First Priority Guarantee” means any guarantee by any Loan Party of any or all of the First
Priority Obligations.

     “First Priority Lender” has the meaning set forth in the first WHEREAS clause of this
Agreement.

     “First Priority Lien” means any Lien created by the First Priority Security Documents.

     “First Priority Obligations” means (a) all principal of and interest (including without
limitation any Post-Petition Interest) and premium (if any) on all loans made pursuant to the First
Priority Agreement, (b) 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, (c) all Hedging Obligations, (d) all
Cash Management Obligations and (e) all guarantee obligations, fees, expenses and other amounts
payable from time to time pursuant to the First Priority Documents, in each case whether or not
allowed or allowable in an Insolvency Proceeding; provided, however, that the total amount of
outstanding principal under the First Priority Agreement shall not exceed (i) $180,000,000.00 at
any time during the PIK Period or (ii) $200,000,000.00 at any time following the expiration of the
PIK Period provided no Event of Default has occurred and is continuing under the Existing Third
Priority Agreement (except, in the case of clause (ii), to the extent that the Third Priority
Representative has agreed in writing to permit such amount to be larger). To the extent any

 

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payment
with respect to any First Priority Obligation (whether by or on behalf of any Loan Party, 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 Priority Secured Party or Third Priority Secured Party, 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 Priority Secured Parties, the Second Priority
Secured Parties and the Third Priority Secured Parties, be deemed to be reinstated and outstanding
as if such payment had not occurred.

     “First Priority Obligations Payment Date” means the first date on which (a) the First Priority
Obligations (other than those that constitute Unasserted Contingent Obligations) have been
indefeasibly paid in cash in full (or cash collateralized or defeased in accordance with the terms
of the First Priority Documents), (b) all commitments to extend credit under the First Priority
Documents have been terminated, (c) there are no outstanding letters of credit or similar
instruments issued under the First Priority Documents (other than such as have been cash
collateralized or defeased in accordance with the terms of the First Priority Security Documents),
and (d) the First Priority Representative has delivered a written notice to the Second Priority
Representative and the Third Priority Representative stating that the events described in clauses
(a), (b) and (c) have occurred to the satisfaction of the First Priority Secured Parties.

     “First Priority Representative” has the meaning set forth in the introductory paragraph
hereof. In the case of any Replacement First Priority Agreement, the First Priority Representative
shall be the Person identified as such in such Agreement.

     “First Priority Secured Parties” means the First Priority Representative, the First Priority
Creditors and any other holders of the First Priority Obligations.

     “First Priority Security Documents” means the “US Collateral Documents” as defined in the
First Priority Agreement, and any other documents that are designated under the First Priority
Agreement as “First Priority Security Documents” for purposes of this Agreement.

     “Hedging Obligations” means, with respect to any Loan Party, any obligations of such Loan
Party owed to any First Priority Creditor (or any of its affiliates) in respect of any swap
agreement or hedge agreement in respect of interest rates, currency exchange rates or commodity
prices.

     “Holder” has the meaning set forth in the second WHEREAS clause of this Agreement.

     “Insolvency Proceeding” means any proceeding in respect of bankruptcy, insolvency, winding up,
receivership, dissolution or assignment for the benefit of creditors, in each of the foregoing
events whether under the Bankruptcy Code or any similar federal, state or foreign bankruptcy,
insolvency, reorganization, receivership or similar law.

     “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, deed to secure debt,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b)
the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same economic effect as any of
the foregoing) relating to

 

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such asset and (c) in the case of securities, any purchase option, call
or similar right of a third party with respect to such securities.

     “Loan Party” means the Borrower and each direct or indirect affiliate or shareholder (or
equivalent) of the Borrower or any of its affiliates that is now or hereafter becomes a party to
any First Priority Document, Second Priority Document or Third Priority Document; provided,
however, that any
Loan Party which is not organized under the laws of the United States of America or any state
thereof or the District of Columbia and is not required to be a party to any Second Priority
Document or Third Priority Document shall not be considered a Loan Party hereunder. All references
in this Agreement to any Loan Party shall include such Loan Party as a debtor-in-possession and any
receiver or trustee for such Loan Party in any Insolvency Proceeding.

     “Note” has the meaning set forth in the second WHEREAS clause of this Agreement.

     “Person” means any person, individual, sole proprietorship, partnership, joint venture,
corporation, limited liability company, unincorporated organization, association, institution,
entity, party, including any government and any political subdivision, agency or instrumentality
thereof.

     “PIK Holder” has the meaning set forth in the third WHEREAS clause of this Agreement.

     “PIK Note” has the meaning set forth in the third WHEREAS clause of this Agreement.

     “PIK Period” means the period of time from the issuance of the PIK Notes until the earlier of
(x) the date on which the Borrower shall pay interest on the PIK Notes in cash and (y) the date on
which the PIK Notes are redeemed.

     “Post-Petition Interest” means any interest or entitlement to fees or expenses or other
charges that accrues after the commencement of any Insolvency Proceeding, whether or not allowed or
allowable in any such Insolvency Proceeding.

     “Replacement First Priority Agreement” has the meaning set forth in the definition of “First
Priority Agreement”.

     “Second Priority Agreement” means the collective reference to (a) the Existing Second Priority
Agreement, (b) any Additional Second Priority Agreement and (c) any other credit agreement, loan
agreement, note agreement, promissory note, indenture, or other agreement or instrument evidencing
or governing the terms of any indebtedness or other financial accommodation that has been incurred
to extend, replace, refinance or refund in whole or in part the indebtedness and other obligations
outstanding under the Existing Second Priority Agreement, any Additional Second Priority Agreement
or any other agreement or instrument referred to in this clause (c). Any reference to the Second
Priority Agreement hereunder shall be deemed a reference to any Second Priority Agreement then
extant.

     “Second Priority Collateral” means all assets, whether now owned or hereafter acquired by the
Borrower or any other Loan Party, in which a Lien is granted or purported to be granted to any
Second Priority Secured Party as security for any Second Priority Obligation.

 

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     “Second Priority Creditors” means the Holders, or any Persons that are designated under the
Second Priority Agreement as the “Second Priority Creditors” for purposes of this Agreement.

     “Second Priority Documents” means each Second Priority Agreement, each Second Priority
Security Document and each Second Priority Guarantee.

     “Second Priority Guarantee” means any guarantee by any Loan Party of any or all of the Second
Priority Obligations.

     “Second Priority Lien” means any Lien created by the Second Priority Security Documents.

     “Second Priority Obligations” means (a) all principal of and interest (including without
limitation any Post-Petition Interest) and premium (if any) on all indebtedness under the Second
Priority Agreement, and (b) all guarantee obligations, fees, expenses and other amounts payable
from time to time pursuant to the Second Priority Documents, in each case whether or not allowed or
allowable in an Insolvency Proceeding; provided, however, that the total amount of outstanding
principal under the Second Priority Agreement shall not exceed $306,000,000.00 (except to the
extent that the First Priority Representative and the Third Priority Representative have agreed in
writing to permit such amount to be larger). To the extent any payment with respect to any Second
Priority Obligation (whether by or on behalf of any Loan Party, 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 First
Priority Secured Party or Third Priority Secured Party, 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 Priority Secured Parties, the Second Priority
Secured Parties and the Third Priority Secured Parties, be deemed to be reinstated and outstanding
as if such payment had not occurred.

     “Second Priority Obligations Payment Date” means the first date on which (a) the Second
Priority Obligations have been indefeasibly paid in cash in full (or defeased in accordance with
the terms of the First Priority Documents), and (b) the Second Priority Representative has
delivered a written notice to the First Priority Representative and the Third Priority
Representative stating that the events described in clause (a) have occurred to the satisfaction of
the Second Priority Secured Parties.

     “Second Priority Representative” has the meaning set forth in the introductory paragraph
hereof, but shall also include any Person identified as a “Second Priority Representative” in any
Second Priority Agreement other than the Existing Second Priority Agreement.

     “Second Priority Secured Party” means the Second Priority Representative, the Second Priority
Creditors and any other holders of the Second Priority Obligations.

     “Second Priority Security Documents” means the “Collateral Documents” as defined in the Second
Priority Agreement and any documents that are designated under the Second Priority Agreement as
“Second Priority Security Documents” for purposes of this Agreement.

     “Secured Parties” means the First Priority Secured Parties, the Second Priority Secured
Parties and the Third Priority Secured Parties.

 

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     “Third Priority Agreement” means the collective reference to (a) the Existing Third Priority
Agreement, (b) any Additional Third Priority Agreement and (c) any other credit agreement, loan
agreement, note agreement, promissory note, indenture, or other agreement or instrument evidencing
or governing the terms of any indebtedness or other financial accommodation that has been incurred
to extend, replace, refinance or refund in whole or in part the indebtedness and other obligations
outstanding under the Existing Third Priority Agreement, any Additional Third Priority Agreement or
any other agreement or instrument referred to in this clause (c). Any reference to the Third
Priority Agreement hereunder shall be deemed a reference to any Third Priority Agreement then
extant.

     “Third Priority Collateral” means all assets, whether now owned or hereafter acquired by the
Borrower or any other Loan Party, in which a Lien is granted or purported to be granted to any
Third Priority Secured Party as security for any Third Priority Obligation.

     “Third Priority Creditors” means the PIK Holders, or any Persons that are designated under the
Third Priority Agreement as the “Third Priority Creditors” for purposes of this Agreement.

     “Third Priority Documents” means each Third Priority Agreement, each Third Priority Security
Document and each Third Priority Guarantee.

     “Third Priority Guarantee” means any guarantee by any Loan Party of any or all of the Third
Priority Obligations.

     “Third Priority Lien” means any Lien created by the Third Priority Security Documents.

     “Third Priority Obligations” means (a) all principal of and interest (including without
limitation any Post-Petition Interest) and premium (if any) on all indebtedness under the Third
Priority Agreement, and (b) all guarantee obligations, fees, expenses and other amounts payable
from time to time pursuant to the Third Priority Documents, in each case whether or not allowed or
allowable in an Insolvency Proceeding; provided, however, that the total amount of outstanding
principal under the Third Priority Agreement shall not exceed $102,000,000.00 plus increases in
such principal amount through the issuance of payment-in-kind notes pursuant to the terms of the
Third Priority Agreement (except to the extent that the First Priority Reprentative has agreed in
writing to permit such amount to be larger). To the extent any payment with respect to any Third
Priority Obligation (whether by or on behalf of any Loan Party, 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 First
Priority Secured Party, Second Priority Secured Party 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 Priority Secured Parties, the Second Priority
Secured Parties and Third Priority Secured Parties, be deemed to be reinstated and outstanding as
if such payment had not occurred.

     “Third Priority Representative” has the meaning set forth in the introductory paragraph
hereof, but shall also include any Person identified as a “Third Priority Representative” in any
Third Priority Agreement other than the Existing Third Priority Agreement.

     “Third Priority Secured Party” means the Third Priority Representative, the Third Priority
Creditors and any other holders of the Third Priority Obligations.

 

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     “Third Priority Security Documents” means the “Collateral Documents” as defined in the Third
Priority Agreement and any documents that are designated under the Third Priority Agreement as
“Third Priority Security Documents” for purposes of this Agreement.

     “Trustee” has the meaning set forth in the second WHEREAS clause of this Agreement

     “Unasserted Contingent Obligations” shall mean, at any time, First Priority Obligations for
taxes, costs, indemnifications, reimbursements, damages and other liabilities (excluding (a) the
principal of, and interest and premium (if any) on, and fees and expenses relating to, any First
Priority Obligation
and (b) contingent reimbursement obligations in respect of amounts that may be drawn under
outstanding letters of credit) in respect of which no written assertion of liability and no written
claim or demand for payment has been made (and, in the case of First Priority Obligations for
indemnification, no notice for indemnification has been issued by the indemnitee) at such time.

     “Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect from time to
time in the applicable jurisdiction.

     1.2 Amended Agreements. All references in this Agreement to agreements or other
contractual obligations shall, unless otherwise specified, be deemed to refer to such agreements or
contractual obligations as amended, supplemented, restated or otherwise modified from time to time.

     SECTION 2. Lien Priorities.

     2.1 Subordination of Liens. (a) Any and all Liens now existing or hereafter created
or arising in favor of any Second Priority Secured Party securing the Second Priority Obligations,
regardless of how acquired, whether by grant, statute, operation of law, subrogation or otherwise
are expressly junior in priority, operation and effect to any and all Liens now existing or
hereafter created or arising in favor of the First Priority Secured Parties securing the First
Priority Obligations, notwithstanding (i) anything to the contrary contained in any agreement or
filing to which any Second Priority Secured Party may now or hereafter be a party, and regardless
of the time, order or method of grant, attachment, recording or perfection of any financing
statements or other security interests, assignments, pledges, deeds, mortgages and other liens,
charges or encumbrances or any defect or deficiency or alleged defect or deficiency in any of the
foregoing, (ii) any provision of the Uniform Commercial Code or any applicable law or any First
Priority Document or Second Priority Document or any other circumstance whatsoever and (iii) the
fact that any such Liens in favor of any First Priority Secured Party securing any of the First
Priority Obligations are (x) subordinated to any Lien securing any obligation of any Loan Party
other than the Second Priority Obligations or (y) otherwise subordinated, voided, avoided,
invalidated or lapsed.

     (b) Any and all Liens now existing or hereafter created or arising in favor of any Third
Priority Secured Party securing the Third Priority Obligations, regardless of how acquired, whether
by grant, statute, operation of law, subrogation or otherwise are expressly junior in priority,
operation and effect to any and all Liens now existing or hereafter created or arising in favor of
the First Priority Secured Parties securing the First Priority Obligations and the Second Priority
Secured Parties securing the Second Priority Obligations, notwithstanding (i) anything to the
contrary contained in any agreement or filing to which any Third Priority Secured Party may now or
hereafter be a party, and regardless of the time, order or method of grant, attachment, recording
or perfection of any financing statements or other security interests, assignments, pledges, deeds,
mortgages and other liens, charges or encumbrances or any defect

 

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or deficiency or alleged defect or
deficiency in any of the foregoing, (ii) any provision of the Uniform Commercial Code or any
applicable law or any First Priority Document, Second Priority Document or Third Priority Security
Document or any other circumstance whatsoever and (iii) the fact that any such Liens in favor of
any First Priority Secured Party securing any of the First Priority Obligations or Second Priority
Secured Party securing any of the Second Priority Obligations are (x) subordinated to any Lien
securing any obligation of any Loan Party other than the Third Priority Obligations or (y)
otherwise subordinated, voided, avoided, invalidated or lapsed.

     (c) No First Priority Secured Party, Second Priority Secured Party or Third Priority Secured
Party shall object to or contest, or support any other Person in contesting or objecting to, in any
proceeding (including without limitation, any Insolvency Proceeding), the validity, extent,
perfection, priority or enforceability of any security interest in the Common Collateral granted to
any other. Notwithstanding any failure by any First Priority Secured Party, Second Priority
Secured Party or Third Priority Secured Party to perfect its security interests in the Common
Collateral or any avoidance, invalidation or subordination by any third party or court of competent
jurisdiction of the security interests in the Common Collateral granted to the First Priority
Secured Parties, the Second Priority Secured Parties or the Third Priority Secured Parties, the
priority and rights as among the First Priority Secured Parties, the Second Priority Secured
Parties and the Third Priority Secured Parties with respect to the Common Collateral shall be as
set forth herein.

     2.2 Nature of First Priority Obligations. The Second Priority Representative on
behalf of itself and the other Second Priority Secured Parties and the Third Priority
Representative on behalf of the itself and the other Third Priority Secured Parties acknowledge
that a portion of the First Priority Obligations represents debt that is revolving in nature and
that the amount thereof that may be outstanding at any time or from time to time may be increased
or reduced and subsequently reborrowed, and that the terms of the First Priority Obligations may be
modified, extended or amended from time to time, and that the aggregate amount of the First
Priority Obligations may be increased, replaced or refinanced, in each event, without notice to or
consent by the Second Priority Secured Parties and the Third Priority Secured Parties and without
affecting the provisions hereof. The lien priorities provided in Section 2.1 shall not be altered
or otherwise affected by any such amendment, modification, supplement, extension, repayment,
reborrowing, increase, replacement, renewal, restatement or refinancing of either the First
Priority Obligations, the Second Priority Obligations or the Third Priority Obligations, or any
portion thereof.

     2.3 Agreements Regarding Actions to Perfect Liens. (a) The Second Priority
Representative on behalf of itself and the other Second Priority Secured Parties agrees that UCC-1
financing statements, patent, trademark or copyright filings or other filings or recordings filed
or recorded by or on behalf of the Second Priority Representative shall be in form satisfactory to
the First Priority Representative. The Third Priority Representative on behalf of itself and the
other Third Priority Secured Parties agrees that UCC-1 financing statements, patent, trademark or
copyright filings or other filings or recordings filed or recorded by or on behalf of the Third
Priority Representative shall be in form satisfactory to the First Priority Representative and the
Second Priority Representative.

     (b) The Second Priority Representative agrees on behalf of itself and the other Second
Priority Secured Parties that all mortgages, deeds of trust, deeds and similar instruments
(collectively, “mortgages”) now or thereafter filed against real property in favor of or for the
benefit of the Second Priority Representative shall be in form satisfactory to the First Priority
Representative and shall contain

 

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the following notation: “The lien created by this mortgage on the
property described herein is junior and subordinate to the lien on such property created by any
mortgage, deed of trust or similar instrument now or hereafter granted to JPMorgan Chase Bank,
N.A., as Administrative Agent, and its successors and assigns, in such property, in accordance with
the provisions of the Intercreditor Agreement dated as of June 16, 2006 among JPMorgan Chase Bank,
N.A., as Administrative Agent, The Bank of New York Trust Company, N.A., as Collateral Agent,
Merrill PCG, Inc., as Secured Party and the Loan Parties referred to therein, as amended from time
to time.” The Third Priority Representative agrees on behalf of itself and the other Third
Priority Secured Parties that all mortgages, deeds of trust, deeds and similar instruments
(collectively, “mortgages”) now or thereafter filed against real property in favor of or for the
benefit of the Third Priority Representative shall be in form satisfactory to the First Priority
Representative and the Second Priority Representative and shall contain the following notation:
“The lien
created by this mortgage on the property described herein is junior and subordinate to the
lien on such property created by any mortgage, deed of trust or similar instrument now or hereafter
granted to JPMorgan Chase Bank, N.A., as Administrative Agent, and its successors and assigns, in
such property, and the lien on such property created by any mortgage, deed of trust or similar
instrument now or hereafter granted to The Bank of New York Trust Company, N.A., as Collateral
Agent, and its successors and assigns, in such property, in accordance with the provisions of the
Intercreditor Agreement dated as of June 16, 2006 among JPMorgan Chase Bank, N.A., as
Administrative Agent, The Bank of New York Trust Company, N.A., as Collateral Agent, Merrill PCG,
Inc., as Secured Party, and the Loan Parties referred to therein, as amended from time to time.”

     (c) The First Priority Representative hereby acknowledges that, to the extent that it holds,
or a third party holds on its behalf, physical possession of or “control” (as defined in the
Uniform Commercial Code) over Common Collateral pursuant to the First Priority Security Documents,
such possession or control is also for the benefit of the Second Priority Representative and the
other Second Priority Secured Parties, and the Third Priority Representative and the other Third
Priority Secured Parties, solely to the extent required to perfect their security interest in such
Common Collateral. Nothing in the preceding sentence shall be construed to impose any duty on the
First Priority Representative (or any third party acting on its behalf) with respect to such Common
Collateral or provide the Second Priority Representative or any other Second Priority Secured
Party, or the Third Priority Representative or any other Third Priority Secured Party, with any
rights with respect to such Common Collateral beyond those specified in this Agreement and the
Second Priority Security Documents or Third Priority Security Documents, as applicable;
provided that subsequent to the occurrence of the First Priority Obligations Payment Date,
the First Priority Representative shall (i) deliver to the Second Priority Representative, at the
Borrower’s sole cost and expense, the Common Collateral in its possession or control together with
any necessary endorsements to the extent required by the Second Priority Documents or (ii) direct
and deliver such Common Collateral as a court of competent jurisdiction otherwise directs, and
provided, further, that the provisions of this Agreement are intended solely to
govern the respective Lien priorities as between the First Priority Secured Parties, the Second
Priority Secured Parties and the Third Priority Secured Parties and shall not impose on the First
Priority Secured Parties any obligations in respect of the disposition of any Common Collateral (or
any proceeds thereof) that would conflict with prior perfected Liens or any claims thereon in favor
of any other Person that is not a Secured Party.

     (d) The Second Priority Representative hereby acknowledges that, to the extent that it holds,
or a third party holds on its behalf, physical possession of or “control” (as defined in the
Uniform Commercial Code) over Common Collateral pursuant to the Second Priority Security Documents,
such possession or control is also for the benefit of the Third Priority Representative and the
other Third Priority Secured

 

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Parties and the First Priority Representative and the other First
Priority Secured Parties, solely to the extent required to perfect their security interest in such
Common Collateral. Nothing in the preceding sentence shall be construed to impose any duty on the
Second Priority Representative (or any third party acting on its behalf) with respect to such
Common Collateral or provide the Third Priority Representative or any other Third Priority Secured
Party, or the First Priority Representative or any other First Priority Secured Party, with any
rights with respect to such Common Collateral beyond those specified in this Agreement and the
Third Priority Security Documents or First Priority Security Documents, as applicable;
provided that subsequent to the occurrence of the Second Priority Obligations Payment Date,
the Second Priority Representative shall (i) deliver to the Third Priority Representative, at the
Borrower’s sole cost and expense, the Common Collateral in its possession or control together with
any necessary endorsements to the extent required by the Third Priority Documents or (ii) direct
and deliver such Common Collateral as a court of competent jurisdiction otherwise directs, and
provided, further, that the
provisions of this Agreement are intended solely to govern the respective Lien priorities as
between the First Priority Secured Parties, the Second Priority Secured Parties and the Third
Priority Secured Parties and shall not impose on the Second Priority Secured Parties any
obligations in respect of the disposition of any Common Collateral (or any proceeds thereof) that
would conflict with prior perfected Liens or any claims thereon in favor of any other Person that
is not a Secured Party.

     (e) The Third Priority Representative hereby acknowledges that, to the extent that it holds,
or a third party holds on its behalf, physical possession of or “control” (as defined in the
Uniform Commercial Code) over Common Collateral pursuant to the Second Priority Security Documents,
such possession or control is also for the benefit of the Second Priority Representative and the
other Second Priority Secured Parties and the First Priority Representative and the other First
Priority Secured Parties, solely to the extent required to perfect their security interest in such
Common Collateral. Nothing in the preceding sentence shall be construed to impose any duty on the
Third Priority Representative (or any third party acting on its behalf) with respect to such Common
Collateral or provide the Second Priority Representative or any other Second Priority Secured
Party, or the First Priority Representative or any other First Priority Secured Party, with any
rights with respect to such Common Collateral beyond those specified in this Agreement and the
Second Priority Security Documents or First Priority Security Documents, as applicable;
provided that the provisions of this Agreement are intended solely to govern the respective
Lien priorities as between the First Priority Secured Parties, the Second Priority Secured Parties
and the Third Priority Secured Parties and shall not impose on the Third Priority Secured Parties
any obligations in respect of the disposition of any Common Collateral (or any proceeds thereof)
that would conflict with prior perfected Liens or any claims thereon in favor of any other Person
that is not a Secured Party.

     2.4 No New Liens. (a) So long as the First Priority Obligations Payment Date has not
occurred, the parties hereto agree that (x) there shall be no Lien, and no Loan Party shall have
any right to create any Lien, on any assets of any Loan Party securing any Second Priority
Obligation or Third Priority Obligation if these same assets are not subject to, and do not become
subject to, a Lien securing the First Priority Obligations and (y) if any Second Priority Secured
Party or Third Priority Secured Party shall acquire or hold any Lien on any assets of any Loan
Party securing any Second Priority Obligation or Third Priority Obligation which assets are not
also subject to the first-priority Lien of the First Priority Representative under the First
Priority Documents, then the Second Priority Representative or Third Priority Representative, as
the case may be, upon demand by the First Priority Representative, will without the need for any
further consent of any other Second Priority Secured Party or Third Priority Secured Party,
notwithstanding anything to the contrary in any other Second Priority Document or Third

 

12

Priority
Document either (i) release such Lien or (ii) assign it to the First Priority Representative as
security for the First Priority Obligations (in which case the Second Priority Representative or
Third Priority Representative, as the case may be, may retain a junior lien on such assets subject
to the terms hereof). To the extent that the foregoing provisions are not complied with for any
reason, without limiting any other rights and remedies available to the First Priority Secured
Parties, the Second Priority Representative and the other Second Priority Secured Parties, and the
Third Priority Secured Representative and the other Third Priority Secured Parties agree that any
amounts received by or distributed to any of them pursuant to or as a result of Liens granted in
contravention of this Section 2.4 shall be subject to Section 4.1.

     (b) So long as the Second Priority Obligations Payment Date has not occurred, the parties
hereto agree that (x) there shall be no Lien, and no Loan Party shall have any right to create any
Lien, on any assets of any Loan Party securing any Third Priority Obligation if these same assets
are not subject to, and
do not become subject to, a Lien securing the Second Priority Obligations and (y) if any Third
Priority Secured Party shall acquire or hold any Lien on any assets of any Loan Party securing any
Third Priority Obligation which assets are not also subject to the second-priority Lien of the
Second Priority Representative under the Second Priority Documents, then the Third Priority
Representative, upon demand by the Second Priority Representative, will without the need for any
further consent of any other Third Priority Secured Party, notwithstanding anything to the contrary
in any other Third Priority Document either (i) release such Lien or (ii) assign it to the Second
Priority Representative as security for the Second Priority Obligations (in which case the Third
Priority Representative may retain a junior lien on such assets subject to the terms hereof). To
the extent that the foregoing provisions are not complied with for any reason, without limiting any
other rights and remedies available to the Second Priority Secured Parties, the Third Priority
Secured Representative and the other Third Priority Secured Parties agree that any amounts received
by or distributed to any of them pursuant to or as a result of Liens granted in contravention of
this Section 2.4 shall be subject to Section 4.1.

     SECTION 3. Enforcement Rights.

     3.1 Exclusive Enforcement. (a) Until the First Priority Obligations Payment Date has
occurred, whether or not an Insolvency Proceeding has been commenced by or against any Loan Party,
the First Priority Secured Parties shall have the exclusive right to take and continue any
Enforcement Action with respect to the Common Collateral, without any consultation with or consent
of any Second Priority Secured Party or Third Priority Secured Party, but subject to the proviso
set forth in Section 5.1; provided, however, that (i) the Second Priority Representative may take
and continue any Enforcement Action with respect to the Common Collateral after a period of at
least 180 days has elapsed since the later of: (I) the date on which the Second Priority
Representative declared the existence of a default with respect to the Second Priority Agreement,
accelerated (to the extent such amount was not already due and owing) the payment of the principal
amount of the Second Priority Obligations, and demanded payment thereof and (II) the date on which
the First Priority Representative received a notice from the Second Priority Representative as to
actions described in clause (I), above, and (ii) the Third Priority Representative may take and
continue any Enforcement Action with respect to the Common Collateral after a period of at least
360 days has elapsed since the later of: (I) the date on which the Third Priority Representative
declared the existence of a default with respect to the Third Priority Agreement, accelerated (to
the extent such amount was not already due and owing) the payment of the principal amount of the
Third Priority Obligations, and demanded payment therof and (II) the date on which the First
Priority Representative and the Second Priority Representative received a notice from the Third

 

13

Priority Representative as to actions described in clause (I), above; provided further, however,
that (x) neither the Second Priority Representative nor any other Second Priority Secured Party
shall be entitled to exercise (and shall not exercise) any rights, powers, or remedies with respect
to the Common Collateral if, notwithstanding the expiration of such 180 day period, the First
Priority Representative or the other First Priority Secured Parties (A) shall have commenced and be
diligently pursuing the exercise of their rights, powers, or remedies with respect to all or any
material portion of such Common Collateral (prompt notice of such exercise to be given to the
Second Priority Representative) or (B) shall have been stayed by operation of law or any court
order from pursuing any such exercise of remedies and (y) neither the Third Priority
Representative nor any other Third Priority Secured Party shall be entitled to exercise (and shall
not exercise) any rights, powers, or remedies with respect to the Common Collateral if,
notwithstanding the expiration of such 360 day period, the First Priority Representative or the
other First Priority Secured Parties, or the Second Priority Representative or the other Second
Priority Secured Parties, (A) shall have commenced and be diligently pursuing the exercise of their
rights, powers, or remedies with respect to all or any material portion of such Common Collateral
(prompt notice of such exercise to be given to the
Third Priority Representative) or (B) shall have been stayed by operation of law or any court
order from pursuing any such exercise of remedies. Upon the occurrence and during the continuance
of a default or an event of default under the First Priority Documents, the First Priority
Representative and the other First Priority Secured Parties may take and continue any Enforcement
Action with respect to the First Priority Obligations and the Common Collateral in such order and
manner as they may determine in their sole discretion, in accordance with the terms of the First
Priority Documents.

     (b) Following the occurrence of the First Priority Obligations Payment Date, and until the
Second Priority Obligations Payment Date has occurred, whether or not an Insolvency Proceeding has
been commenced by or against any Loan Party, the Second Priority Secured Parties shall have the
exclusive right to take and continue any Enforcement Action with respect to the Common Collateral,
without any consultation with or consent of any Third Priority Secured Party, but subject to the
proviso set forth in Section 5.1; provided, however, that the Third Priority Representative may
take and continue any Enforcement Action with respect to the Common Collateral after a period of at
least 180 days has elapsed since the later of: (i) the date on which the Third Priority
Representative declared the existence of a default with respect to the Third Priority Agreement,
accelerated (to the extent such amount was not already due and owing) the payment of the principal
amount of the Third Priority Obligations, and demanded payment thereof and (ii) the date on which
the Second Priority Representative received a notice from the Third Priority Representative as to
actions described in clause (i), above; provided further, however, that neither the Third Priority
Representative nor any other Third Priority Secured Party shall be entitled to exercise (and shall
not exercise) any rights, powers, or remedies with respect to the Common Collateral if,
notwithstanding the expiration of such 180 day period, the Second Priority Representative or the
other Second Priority Secured Parties (A) shall have commenced and be diligently pursuing the
exercise of their rights, powers, or remedies with respect to all or any material portion of such
Common Collateral (prompt notice of such exercise to be given to the Third Priority Representative)
or (B) shall have been stayed by operation of law or any court order from pursuing any such
exercise of remedies. Following the occurrence of the First Priority Obligations Payment Date, and
upon the occurrence and during the continuance of a default or an event of default under the Second
Priority Documents, the Second Priority Representative and the other Second Priority Secured
Parties may take and continue any Enforcement Action with respect to the Second Priority
Obligations and the Common Collateral in such order and manner as they may determine in their sole
discretion, in accordance with the terms of the Second Priority Documents.

 

14

     3.2 Standstill and Waivers. (a) The Second Priority Representative, on behalf of
itself as a Second Priority Secured Party and the other Second Priority Secured Parties, and the
Third Priority Representative, on behalf of itself and the other Third Priority Secured Parties,
each agree that, until the First Priority Obligations Payment Date has occurred, subject to the
provisos set forth in Section 3.1(a), Section 3.1(b) and Section 5.1:

     (1) they will not take or cause to be taken any action, the purpose or effect of which
is to make any Lien in respect of any Second Priority Obligation or Third Priority
Obligation pari passu with or senior to, or to give any Second Priority Secured Party or
Third Priority Secured Party any preference or priority relative to, the Liens with respect
to the First Priority Obligations or the First Priority Secured Parties with respect to any
of the Common Collateral;

     (2) they will not contest, oppose, object to, interfere with, hinder or delay, in any
manner, whether by judicial proceedings (including without limitation the filing of an
Insolvency Proceeding) or otherwise, any foreclosure, sale, lease, exchange, transfer or
other disposition of
the Common Collateral by any First Priority Secured Party or any other Enforcement
Action taken (or any forbearance from taking any Enforcement Action) by or on behalf of any
First Priority Secured Party with respect to the Common Collateral;

     (3) they have no right to (i) direct either the First Priority Representative or any
other First Priority Secured Party to exercise any right, remedy or power with respect to
the Common Collateral or pursuant to the First Priority Security Documents or (ii) consent
or object to the exercise by the First Priority Representative or any other First Priority
Secured Party of any right, remedy or power with respect to the Common Collateral or
pursuant to the First Priority Security Documents or to the timing or manner in which any
such right is exercised or not exercised (or, to the extent they may have any such right
described in this clause (3), whether as a junior lien creditor or otherwise, they hereby
irrevocably waive such right);

     (4) they will not institute any suit or other proceeding or assert in any suit,
Insolvency Proceeding or other proceeding any claim against any First Priority Secured Party
seeking damages from or other relief by way of specific performance, instructions or
otherwise, with respect to, and no First Priority Secured Party shall be liable for, any
action taken or omitted to be taken by any First Priority Secured Party with respect to the
Common Collateral or pursuant to the First Priority Documents to the extent done in
conformance with the terms of this Agreement;

     (5) they will not make any judicial or nonjudicial claim or demand or commence any
judicial or non-judicial proceedings against any Loan Party or any of its subsidiaries or
affiliates under or with respect to any Second Priority Security Document or Third Priority
Security Document seeking payment or damages from or other relief by way of specific
performance, instructions or otherwise under or with respect to any Second Priority Security
Document or Third Priority Security Document (other than filing a proof of claim) or
exercise any right, remedy or power under or with respect to, or otherwise take any action
to enforce, other than filing a proof of claim, any Second Priority Security Document or
Third Priority Security Document;

     (6) they will not commence judicial or nonjudicial foreclosure proceedings with
respect to, seek to have a trustee, receiver, liquidator or similar official appointed for
or over, attempt any

 

15

action to take possession of any Common Collateral, exercise any right,
remedy or power with respect to, or otherwise take any action to enforce their interest in
or realize upon, the Common Collateral or pursuant to the Second Priority Security Documents
or the Third Priority Security Documents; and

     (7) they will not seek, and hereby waive any right, to have the Common Collateral or
any part thereof marshaled upon any foreclosure or other disposition of the Common
Collateral.

       (b) Following the occurrence of the First Priority Obligations Payment Date, the
Third Priority Representative, on behalf of itself and the other Third Priority Secured Parties,
agrees that, until the Second Priority Obligations Payment Date has occurred, subject to the
proviso set forth in Section 5.1:

     (1) it will not take or cause to be taken any action, the purpose or effect of which
is to make any Lien in respect of any Third Priority Obligation pari passu with or senior
to, or to give any Third Priority Secured Party any preference or priority relative to, the
Liens with respect to
the Second Priority Obligations or the Second Priority Secured Parties with respect to
any of the Common Collateral;

     (2) it will not contest, oppose, object to, interfere with, hinder or delay, in any
manner, whether by judicial proceedings (including without limitation the filing of an
Insolvency Proceeding) or otherwise, any foreclosure, sale, lease, exchange, transfer or
other disposition of the Common Collateral by any Second Priority Secured Party or any other
Enforcement Action taken (or any forbearance from taking any Enforcement Action) by or on
behalf of any Second Priority Secured Party with respect to the Common Collateral;

     (3) it has no right to (i) direct either the Second Priority Representative or any
other Second Priority Secured Party to exercise any right, remedy or power with respect to
the Common Collateral or pursuant to the Second Priority Security Documents or (ii) consent
or object to the exercise by the Second Priority Representative or any other Second Priority
Secured Party of any right, remedy or power with respect to the Common Collateral or
pursuant to the Second Priority Security Documents or to the timing or manner in which any
such right is exercised or not exercised (or, to the extent they may have any such right
described in this clause (3), whether as a junior lien creditor or otherwise, they hereby
irrevocably waive such right);

     (4) it will not institute any suit or other proceeding or assert in any suit,
Insolvency Proceeding or other proceeding any claim against any Second Priority Secured
Party seeking damages from or other relief by way of specific performance, instructions or
otherwise, with respect to, and no Second Priority Secured Party shall be liable for, any
action taken or omitted to be taken by any Second Priority Secured Party with respect to the
Common Collateral or pursuant to the Second Priority Documents to the extent done in
conformance with the terms of this Agreement;

     (5) it will not make any judicial or nonjudicial claim or demand or commence any
judicial or non-judicial proceedings against any Loan Party or any of its subsidiaries or
affiliates under or with respect to any Third Priority Security Document seeking payment or
damages from or other relief by way of specific performance, instructions or otherwise under
or with respect to any Third Priority Security Document (other than filing a proof of claim)
or exercise any right,

 

16

remedy or power under or with respect to, or otherwise take any
action to enforce, other than filing a proof of claim, any Third Priority Security Document;

     (6) it will not commence judicial or nonjudicial foreclosure proceedings with respect
to, seek to have a trustee, receiver, liquidator or similar official appointed for or over,
attempt any action to take possession of any Common Collateral, exercise any right, remedy
or power with respect to, or otherwise take any action to enforce their interest in or
realize upon, the Common Collateral or pursuant to the Third Priority Security Documents;

     (7) it will seek, and hereby waive any right, to have the Common Collateral or any
part thereof marshaled upon any foreclosure or other disposition of the Common Collateral.

       3.3 Judgment Creditors. In the event that any Second Priority Secured Party or Third
Priority Secured Party becomes a judgment lien creditor in respect of Common Collateral as a result
of its enforcement of its rights as an unsecured creditor, such judgment lien shall be subject to
the terms of this Agreement for all purposes (including in relation to the First Priority Liens and
the First Priority
Obligations and the Second Priority Liens and the Second Priority Obligations) to the same
extent as all other Liens securing the Second Priority Obligations or the Third Priority
Obligations are subject to the terms of this Agreement.

       3.4 Cooperation. The Second Priority Representative, on behalf of itself as a Second
Priority Secured Party and the other Second Priority Secured Parties, and the Third Priority
Representative, on behalf of itself and the other Third Priority Secured Parties, each agree that
each of them shall take such actions as the First Priority Representative shall request in
connection with the exercise by the First Priority Secured Parties of their rights set forth
herein. Following the occurrence of the First Priority Obligations Payment Date, the Third
Priority Representative, on behalf of itself and the other Third Priority Secured Parties, agrees
that each of them shall take such actions as the Second Priority Representative shall request in
connection with the exercise by the Second Priority Secured Parties of their rights set forth
herein

       3.5 No Additional Rights For the Loan Parties Hereunder. Except as provided in
Section 3.6, if any First Priority Secured Party, Second Priority Secured Party or Third Priority
Secured Party shall enforce its rights or remedies in violation of the terms of this Agreement, no
Loan Party shall be entitled to use such violation as a defense to any action by any First Priority
Secured Party, Second Priority Secured Party or Third Priority Secured Party, nor to assert such
violation as a counterclaim or basis for set off or recoupment against any First Priority Secured
Party, Second Priority Secured Party or Third Priority Secured Party.

       3.6 Actions Upon Breach. (a) If any Second Priority Secured Party or Third Priority
Secured Party, contrary to this Agreement, commences or participates in any action or proceeding
against any Loan Party or the Common Collateral, such Loan Party, with the prior written consent of
the First Priority Secured Representative (or, after the occurrence of the First Priority
Obligations Payment Date, the Second Priority Secured Representative), may interpose as a defense
or dilatory plea the making of this Agreement, and any First Priority Secured Party (or, after the
occurrence of the First Priority Obligations Payment Date, any Second Priority Secured Party) may
intervene and interpose such defense or plea in its or their name or in the name of such Loan
Party.

 

17

     (b) Should any Second Priority Secured Party or Third Priority Secured Party, contrary to
this Agreement, in any way take, attempt to or threaten to take any action with respect to the
Common Collateral (including, without limitation, any attempt to realize upon or enforce any remedy
with respect to this Agreement), or fail to take any action required by this Agreement, any First
Priority Secured Party or, following the occurrence of the First Priority Obligations Payment Date,
any Second Priority Secured Party (in each case in its own name or in the name of the relevant Loan
Party) or the relevant Loan Party may obtain relief against such Second Priority Secured Party or
Third Priority Secured Party by injunction, specific performance and/or other appropriate equitable
relief, it being understood and agreed by the Second Priority Representative on behalf of each
Second Priority Secured Party and the Third Priority Representative on behalf of each Third
Priority Secured Party that (i) the First Priority Secured Parties’ and (following the occurrence
of the First Priority Obligations Payment Date) Second Priority Secured Parties’ damages from its
actions may at that time be difficult to ascertain and may be irreparable, and (ii) each Second
Priority Secured Party and Third Priority Secured Party waives any defense that the Loan Parties
and/or the First Priority Secured Parties or (following the occurrence of the First Priority
Obligations Payment Date) Second Priority Secured Parties cannot demonstrate damage and/or be made
whole by the awarding of damages.

     3.7 Rights of Junior Secured Parties. Notwithstanding anything in this Article 3, the
Second Priority Representative and any Second Priority Secured Party, and the Third Priority
Representative and any Third Priority Secured Party, may: (i) file a claim, proof of claim or
statement of interest with respect to the Second Priority Obligations or Third Priority
Obligations, respectively, provided that an Insolvency Proceeding has been commenced by or against
any Loan Party; (ii) take any action not adverse to the priority status of the Liens on the Common
Collateral securing the First Priority Obligations or the Second Priority Obligations,
respectively, or the rights of the First Priority Representative or the First Priority Secured
Parties or the Second Priority Representative or the Second Priority Secured Parties to exercise
remedies in respect thereof in accordance with the terms of this Agreement, in order to create,
perfect, preserve or protect their respective Liens on the Common Collateral; or (iii) 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 Priority Representative or Second Priority Secured Parties, or the
Third Priority Representative or Third Priority Secured Parties, respectively, including any claims
secured by the Common Collateral, in each case in accordance with the terms of this Agreement.

     SECTION 4. Application Of Proceeds Of Common Collateral; Dispositions And Releases
Of Common Collateral; Inspection and Insurance.

     4.1 Application of Proceeds; Turnover Provisions. All proceeds of Common Collateral
(including without limitation any interest earned thereon) resulting from the sale, collection or
other disposition of Common Collateral pursuant to an Enforcement Action, whether or not pursuant
to an Insolvency Proceeding, shall be distributed as follows: first to the First Priority
Representative for application to the First Priority Obligations in accordance with the terms of
the First Priority Documents, until the First Priority Obligations Payment Date has occurred;
second to the Second Priority Representative for application to the Second Priority
Obligations in accordance with the terms of the Second Priority Documents, until the Second
Priority Obligations Payment Date has occurred and thereafter, to the Third Priority
Representative for application in accordance with the Third Priority Documents. Until the
occurrence of the First Priority Obligations Payment Date, any Common Collateral, including without
limitation any such Common Collateral constituting proceeds, that may be

 

18

received by any Second
Priority Secured Party or Third Priority Secured Party in violation of this Agreement (other than
payments of Second Priority Obligations or Third Priority Obligations received, respectively, by
the Second Priority Representative or Third Priority Representative in the ordinary course of
business, without notice of being received in violation of this agreement, and distributed to the
Second Priority Secured Parties or Third Priority Secured Parties entitled to receive such payments
made in the ordinary course) shall be segregated and held in trust and promptly paid over to the
First Priority Representative, for the benefit of the First Priority Secured Parties, in the same
form as received, with any necessary endorsements, and each Second Priority Secured Party and Third
Priority Secured Party hereby authorizes the First Priority Representative to make any such
endorsements as agent for the Second Priority Representative and the Third Priority Representative
(which authorization, being coupled with an interest, is irrevocable). After the occurrence of the
First Priority Obligations Payment Date and until the occurrence of the First Priority Obligations
Payment Date, any Common Collateral, including without limitation any such Common Collateral
constituting proceeds, that may be received by any Third Priority Secured Party in violation of
this Agreement shall be segregated and held in trust and promptly paid over to the Second Priority
Representative, for the benefit of the Second Priority Secured Parties, in the same form as
received, with any necessary endorsements, and each Third Priority Secured Party hereby authorizes
the Second Priority Representative to make any such endorsements as agent for the Third Priority
Representative (which authorization, being coupled with an interest, is irrevocable).

     4.2 Releases of Second Priority Lien and Third Priority Lien. (a) Upon any release,
sale or disposition of Common Collateral permitted pursuant to the terms of the First Priority
Documents that results in the release of the First Priority Lien on any Common Collateral
(excluding any sale or other disposition that is expressly prohibited by the Second Priority
Agreement or the Third Priority Agreement unless such sale or disposition is consummated in
connection with an Enforcement Action or consummated after the institution of any Insolvency
Proceeding), the Second Priority Lien and the Third Priority Lien on such Common Collateral
(excluding any portion of the proceeds of such Common Collateral remaining after the First Priority
Obligations Payment Date occurs) shall be automatically and unconditionally released with no
further consent or action of any Person; provided, however, that if the total amount of outstanding
First Priority Obligations plus the amount of any unfunded commitments then outstanding with
respect to the First Priority Agreement is (or would become in connection with such release, sale
or disposition) less than $20,000,000.00, any such release must be consented to by the Second
Priority Representative.

     (b) The Second Priority Representative and the Third Priority Representative shall promptly
execute and deliver such release documents and instruments and shall take such further actions as
the First Priority Representative shall request to evidence any release of the Second Priority Lien
and the Third Priority Lien described in paragraph (a). The Second Priority Representative and the
Third Priority Representative hereby appoint the First Priority Representative and any officer or
duly authorized person of the First Priority Representative, with full power of substitution, as
their true and lawful attorney-in-fact with full irrevocable power of attorney in the place and
stead of the Second Priority Representative and the Third Priority Representative and in the name
of the Second Priority Representative and the Third Priority Representative or in the First
Priority Representative’s own name, from time to time, in the First Priority Representative’s sole
discretion, for the purposes of carrying out the terms of this Section 4.2, to take any and all
appropriate action and to execute and deliver any and all documents and instruments as may be
necessary or desirable to accomplish the purposes of this Section 4.2, including, without
limitation, any financing statements, endorsements, assignments, releases or other documents or
instruments of transfer (which appointment, being coupled with an interest, is irrevocable).

 

19

     (c) After the occurrence of the First Priority Obligations Payment Date, upon any release,
sale or disposition of Common Collateral permitted pursuant to the terms of the Second Priority
Documents that results in the release of the Second Priority Lien on any Common Collateral
(excluding any sale or other disposition that is expressly prohibited by the Third Priority
Agreement unless such sale or disposition is consummated in connection with an Enforcement Action
or consummated after the institution of any Insolvency Proceeding), the Third Priority Lien on such
Common Collateral (excluding any portion of the proceeds of such Common Collateral remaining after
the Second Priority Obligations Payment Date occurs) shall be automatically and unconditionally
released with no further consent or action of any Person.

     (d) The Third Priority Representative shall promptly execute and deliver such release
documents and instruments and shall take such further actions as the Second Priority Representative
shall request to evidence any release of the Third Priority Lien described in paragraph (c). The
Third Priority Representative hereby appoints the Second Priority Representative and any officer or
duly authorized person of the Second Priority Representative, with full power of substitution, as
its true and lawful attorney-in-fact with full irrevocable power of attorney in the place and stead
of the Third Priority Representative and in the name of the Third Priority Representative or in the
Second Priority Representative’s own name, from time to time, in the Second Priority
Representative’s sole discretion, for the purposes of carrying out the terms of this Section 4.2,
to take any and all appropriate action and to
execute and deliver any and all documents and instruments as may be necessary or desirable to
accomplish the purposes of this Section 4.2, including, without limitation, any financing
statements, endorsements, assignments, releases or other documents or instruments of transfer
(which appointment, being coupled with an interest, is irrevocable).

     4.3 Inspection Rights and Insurance. (a) Any First Priority Secured Party and its
representatives and invitees may at any time inspect, repossess, remove and otherwise deal with the
Common Collateral, and the First Priority Representative may advertise and conduct public auctions
or private sales of the Common Collateral, in each case without notice to, the involvement of or
interference by any Second Priority Secured Party or Third Priority Secured Party or liability to
any Second Priority Secured Party or Third Priority Secured Party. Following the occurrence of the
First Priority Obligations Payment Date, any Second Priority Secured Party and its representatives
and invitees may at any time inspect, repossess, remove and otherwise deal with the Common
Collateral, and the Second Priority Representative may advertise and conduct public auctions or
private sales of the Common Collateral, in each case without notice to, the involvement of or
interference by any Third Priority Secured Party or liability to any Third Priority Secured Party.

     (b) Until the First Priority Obligations Payment Date has occurred, the First Priority
Representative will have the sole and exclusive right (i) to be named as additional insured and
loss payee under any insurance policies maintained from time to time by any Loan Party (except that
the Second Priority Representative and the Third Priority Representative shall have the right to be
named as additional insureds and loss payees so long as their second and third lien status,
respectively, is identified in a manner satisfactory to the First Priority Representative); (ii) as
between the Secured Parties, to adjust or settle any insurance policy or claim covering the Common
Collateral in the event of any loss thereunder and (iii) as between the Secured Parties, to approve
any award granted in any condemnation or similar proceeding affecting the Common Collateral.
Following the occurrence of the First Priority Obligations Payment Date and until the Second
Priority Obligations Payment Date has occurred, the Second Priority Representative will have the
sole and exclusive right (i) to be named as additional insured

 

 

20

and loss payee under any insurance
policies maintained from time to time by any Loan Party (except that the Third Priority
Representative shall have the right to be named as additional insured and loss payee so long as its
third lien status is identified in a manner satisfactory to the Second Priority Representative);
(ii) as between the Secured Parties, to adjust or settle any insurance policy or claim covering the
Common Collateral in the event of any loss thereunder and (iii) as between the Secured Parties, to
approve any award granted in any condemnation or similar proceeding affecting the Common
Collateral.

     SECTION 5. Insolvency Proceedings.

     5.1 Filing of Motions. (a) Until the First Priority Obligations Payment Date has
occurred, the Second Priority Representative agrees on behalf of itself as a Second Priority
Secured Party and the other Second Priority Secured Parties that no Second Priority Secured Party
shall, and the Third Priority Representative agrees on behalf of itself and the other Third
Priority Secured Parties that no Third Priority Secured Party shall, in or in connection with any
Insolvency Proceeding, file any pleadings or motions, take any position at any hearing or
proceeding of any nature, or otherwise take any action whatsoever, in each case in respect of any
of the Common Collateral, including, without limitation, with respect to the determination of any
Liens or claims held by the First Priority Representative (including the validity and
enforceability thereof) or any other First Priority Secured Party or the value of any claims of
such parties under Section 506(a) of the Bankruptcy Code or otherwise in each such case if such
action is inconsistent with the terms and limitations on the Second Priority Representative and the
Third Priority Representative
imposed hereby; provided that the Second Priority Representative and the Third
Priority Representative may file proof of claims in an Insolvency Proceeding, subject to the
limitations contained in this Agreement and only if consistent with the terms and the limitations
on the Second Priority Representative and the Third Priority Representative imposed hereby.

     (b) Until the Second Priority Obligations Payment Date has occurred, the Third Priority
Representative agrees on behalf of itself and the other Third Priority Secured Parties that no
Third Priority Secured Party shall, in or in connection with any Insolvency Proceeding, file any
pleadings or motions, take any position at any hearing or proceeding of any nature, or otherwise
take any action whatsoever, in each case in respect of any of the Common Collateral, including,
without limitation, with respect to the determination of any Liens or claims held by the Second
Priority Representative (including the validity and enforceability thereof) or any other First
Priority Secured Party or the value of any claims of such parties under Section 506(a) of the
Bankruptcy Code or otherwise; provided that the Third Priority Representative may file
proof of claims in an Insolvency Proceeding, subject to the limitations contained in this Agreement
and only if consistent with the terms and the limitations on the Third Priority Representative
imposed hereby.

     5.2 Financing Matters. If any Loan Party becomes subject to any Insolvency
Proceeding, and if the First Priority Representative or the other First Priority Secured Parties
desire to consent (or not object) to the use of cash collateral under the Bankruptcy Code or to
provide financing to any Loan Party under the Bankruptcy Code or to consent (or not object) to the
provision of such financing to any Loan Party by any third party (any such financing, “DIP
Financing”), then the Second Priority Representative agrees, on behalf of itself as a Second
Priority Secured Party and the other Second Priority Secured Parties, and the Third Priority
Representative agrees, on behalf of itself and the other Third Priority Secured Parties, that each
Second Priority Secured Party and Third Priority Secured Party (a) will be deemed to have consented
to, will raise no objection to, nor support any other Person objecting to, the use of such cash
collateral or to such DIP Financing, (b) will not request or accept adequate protection or any

 

 

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other relief in connection with the use of such cash collateral or such DIP Financing except as set
forth in paragraph 5.4 below and (c) will subordinate (and will be deemed hereunder to have
subordinated) the Second Priority Liens and the Third Priority Liens (i) to such DIP Financing on
the same terms as the First Priority Liens are subordinated thereto (and such subordination will
not alter in any manner the terms of this Agreement), (ii) to any adequate protection provided to
the First Priority Secured Parties and (iii) to any “carve-out” agreed to by the First Priority
Representative or the other First Priority Secured Parties, and (d) agrees that notice received two
calendar days prior to the entry of an order approving such usage of cash collateral or approving
such financing shall be adequate notice; provided, however, that (1) the total principal amount
available under such DIP Financing, when added to the total amount of outstanding principal under
the First Priority Agreement at the time of such DIP Financing shall not exceed 110% of what the
total amount of outstanding principal under the First Priority Agreement was on the date of
commencement of such Insolvency Proceeding, and (2) the terms of such DIP Financing or cash
collateral use order (A) do not compel the applicable Loan Party to seek confirmation of a specific
plan of reorganization for which all or substantially all of the material terms are set forth in
the DIP Financing documentation or a related document and (B) do not expressly require the
liquidation of the Common Collateral prior to a default under the DIP Financing documentation or
cash collateral use order.

     5.3 Relief From the Automatic Stay. The Second Priority Representative agrees, on
behalf of itself as a Second Priority Secured Party and the other Second Priority Secured Parties,
that none of them will seek relief from the automatic stay or from any other stay in any Insolvency
Proceeding or take any action in derogation thereof, in each case in respect of any Common
Collateral, without the prior written
consent of the First Priority Representative. The Third Priority Representative agrees, on
behalf of itself and the other Third Priority Secured Parties, that none of them will seek relief
from the automatic stay or from any other stay in any Insolvency Proceeding or take any action in
derogation thereof, in each case in respect of any Common Collateral, without the prior written
consent of the First Priority Representative and the Second Priority Representative.

     5.4 Adequate Protection. (a) The Second Priority Representative, on behalf of itself
as a Second Priority Secured Party and the other Second Priority Secured Parties, and the Third
Priority Representative, on behalf of itself and the other Third Priority Secured Parties, agree
that none of them shall object, contest, or support any other Person objecting to or contesting,
(1) any request by the First Priority Representative or the other First Priority Secured Parties
for adequate protection or any adequate protection provided to the First Priority Representative or
the other First Priority Secured Parties or (2) any objection by the First Priority Representative
or any other First Priority Secured Parties to any motion, relief, action or proceeding based on a
claim of a lack of adequate protection or (3) the payment of interest, fees, expenses or other
amounts to the First Priority Representative or any other First Priority Secured Party under
Section 506(b) or 506(c) of the Bankruptcy Code or otherwise. Notwithstanding anything contained
in this Section and in Section 5.2(b) (but subject to all other provisions of this Agreement,
including, without limitation, Sections 5.2(a) and 5.3), in any Insolvency Proceeding, (i) if the
First Priority Secured Parties (or any subset thereof) are granted adequate protection consisting
of additional collateral (with replacement liens on such additional collateral) and superpriority
claims in connection with any DIP Financing or use of cash collateral, and the First Priority
Secured Parties do not object to the adequate protection being provided to them, then in connection
with any such DIP Financing or use of cash collateral the Second Priority Representative, on behalf
of itself and any of the Second Priority Secured Parties, and the Third Priority Representative, on
behalf of itself and any of the Third Priority Secured Parties, may seek or accept adequate
protection consisting solely of (x) a replacement Lien on the same additional collateral,
subordinated to the Liens securing the First Priority Obligations

 

 

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and such DIP Financing on the
same basis as the other Liens securing the Second Priority Obligations and Third Priority
Obligations are so subordinated to the First Priority Obligations under this Agreement and (y)
superpriority claims junior in all respects to the superpriority claims granted to the First
Priority Secured Parties, provided, however, that the Second Priority
Representative and the Third Priority Representative shall have irrevocably agreed, pursuant to
Section 1129(a)(9) of the Bankruptcy Code, on behalf of themselves as Secured Parties and the
Second Priority Secured Parties and the Third Priority Secured Parties, in any stipulation and/or
order granting such adequate protection, that such junior superpriority claims may be paid under
any plan of reorganization in any combination of cash, debt, equity or other property having a
value on the effective date of such plan equal to the allowed amount of such claims and (ii) in the
event the Second Priority Representative, on behalf of itself as a Second Priority Secured Party
and the Second Priority Secured Parties, or the Third Priority Representative, on behalf of itself
and the Third Priority Secured Parties, seek or accept adequate protection in accordance with
clause (i) above and such adequate protection is granted in the form of additional collateral, then
the Second Priority Representative, on behalf of itself as a Second Priority Secured Party or any
of the Second Priority Secured Parties, and the Third Priority Representative, on behalf of itself
and the Third Priority Secured Parties, agree that the First Priority Representative shall also be
granted a senior Lien on such additional collateral as security for the First Priority Obligations
and any such DIP Financing and that any Lien on such additional collateral securing the Second
Priority Obligations and/or the Third Priority Obligations shall be subordinated to the Liens on
such collateral securing the First Priority Obligations and any such DIP Financing (and all
Obligations relating thereto) and any other Liens granted to the First Priority Secured Parties as
adequate protection, with such subordination to be on the same terms that the other Liens securing
the Second Priority Obligations and/or the Third Priority Obligations
are subordinated to such First Priority Obligations under this Agreement. The Second Priority
Representative, on behalf of itself as a Second Priority Secured Party and the other Second
Priority Secured Parties, and the Third Priority Representative, on behalf of itself and the other
Third Priority Secured Parties, agree that except as expressly set forth in this Section none of
them shall seek or accept adequate protection without the prior written consent of the First
Priority Representative.

     (b) The Third Priority Representative, on behalf of itself and the other Third Priority
Secured Parties, agrees that none of them shall object, contest, or support any other Person
objecting to or contesting, (1) any request by the Second Priority Representative or the other
Second Priority Secured Parties for adequate protection or any adequate protection provided to the
Second Priority Representative or the other Second Priority Secured Parties or (2) any objection by
the Second Priority Representative or any other Second Priority Secured Parties to any motion,
relief, action or proceeding based on a claim of a lack of adequate protection or (3) the payment
of interest, fees, expenses or other amounts to the Second Priority Representative or any other
Second Priority Secured Party under Section 506(b) or 506(c) of the Bankruptcy Code or otherwise.
Notwithstanding anything contained in this Section and in Section 5.2(b) (but subject to all other
provisions of this Agreement, including, without limitation, Sections 5.2(a) and 5.3), in any
Insolvency Proceeding, (i) if the Second Priority Secured Parties (or any subset thereof) are
granted adequate protection consisting of additional collateral (with replacement liens on such
additional collateral) and superpriority claims in connection with any DIP Financing or use of cash
collateral, and the Second Priority Secured Parties do not object to the adequate protection being
provided to them, then in connection with any such DIP Financing or use of cash collateral the
Third Priority Representative, on behalf of itself and any of the Third Priority Secured Parties,
may seek or accept adequate protection consisting solely of (x) a replacement Lien on the same
additional collateral, subordinated to the Liens securing the Second Priority Obligations and such
DIP Financing on the same basis as the other Liens securing the Third Priority Obligations are so
subordinated to the Second Priority Obligations under this

 

 

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Agreement and (y) superpriority claims
junior in all respects to the superpriority claims granted to the Second Priority Secured Parties,
provided, however, that the Third Priority Representative shall have irrevocably
agreed, pursuant to Section 1129(a)(9) of the Bankruptcy Code, on behalf of itself and the Third
Priority Secured Parties, in any stipulation and/or order granting such adequate protection, that
such junior superpriority claims may be paid under any plan of reorganization in any combination of
cash, debt, equity or other property having a value on the effective date of such plan equal to the
allowed amount of such claims and (ii) in the event the Third Priority Representative, on behalf of
itself and the Third Priority Secured Parties, seeks or accepts adequate protection in accordance
with clause (i) above and such adequate protection is granted in the form of additional collateral,
then the Third Priority Representative, on behalf of itself and the Third Priority Secured Parties,
agrees that the Second Priority Representative shall also be granted a senior Lien on such
additional collateral as security for the Second Priority Obligations and any such DIP Financing
and that any Lien on such additional collateral securing the Third Priority Obligations shall be
subordinated to the Liens on such collateral securing the Second Priority Obligations and any such
DIP Financing (and all Obligations relating thereto) and any other Liens granted to the Second
Priority Secured Parties as adequate protection, with such subordination to be on the same terms
that the other Liens securing the Third Priority Obligations are subordinated to such Second
Priority Obligations under this Agreement. The Third Priority Representative, on behalf of itself
and the other Third Priority Secured Parties, agrees that except as expressly set forth in this
Section none of them shall seek or accept adequate protection without the prior written consent of
the Second Priority Representative. .

     (c) Nothing contained herein shall be deemed to prevent the Second Priority Representative,
any Second Priority Secured Party, the Third Priority Representative or any Third Priority Secured
Party from
making any application in any Insolvency Proceeding to receive cash payment of post-petition
interest, expenses or fees at any point during the Insolvency Proceeding.

     5.5 Avoidance Issues. (a) If any First Priority Secured Party is required in any
Insolvency Proceeding or otherwise to disgorge, turn over or otherwise pay to the estate of any
Loan Party, because such amount was avoided or ordered to be paid or disgorged for any reason,
including without limitation because it was found to be a fraudulent or preferential transfer, any
amount (a “First Priority Recovery”), whether received as proceeds of security, enforcement of any
right of set-off or otherwise, then the First Priority Obligations shall be reinstated to the
extent of such First Priority Recovery and deemed to be outstanding as if such payment had not
occurred and the First Priority Obligations Payment Date shall be deemed not to have occurred. If
this Agreement shall have been terminated prior to such First Priority 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. The Second
Priority Secured Parties and the Third Priority Secured Parties agree that none of them shall be
entitled to benefit from any avoidance action affecting or otherwise relating to any distribution
or allocation made in accordance with this Agreement, whether by preference or otherwise, it being
understood and agreed that the benefit of such avoidance action otherwise allocable to them shall
instead be allocated and turned over for application in accordance with the priorities set forth in
this Agreement.

     (b) If any Second Priority Secured Party is required in any Insolvency Proceeding or
otherwise to disgorge, turn over or otherwise pay to the estate of any Loan Party, because such
amount was avoided or ordered to be paid or disgorged for any reason, including without limitation
because it was found to be a fraudulent or preferential transfer, any amount (a “Second Priority
Recovery”), whether received as

 

 

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proceeds of security, enforcement of any right of set-off or
otherwise, then the Second Priority Obligations shall be reinstated to the extent of such Second
Priority Recovery and deemed to be outstanding as if such payment had not occurred and the Second
Priority Obligations Payment Date shall be deemed not to have occurred. If this Agreement shall
have been terminated prior to such Second Priority 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. The Third Priority Secured Parties agree
that none of them shall be entitled to benefit from any avoidance action affecting or otherwise
relating to any distribution or allocation made in accordance with this Agreement, whether by
preference or otherwise, it being understood and agreed that the benefit of such avoidance action
otherwise allocable to them shall instead be allocated and turned over for application in
accordance with the priorities set forth in this Agreement.

     5.6 Asset Dispositions in an Insolvency Proceeding. (a) None of the Second Priority
Representative, the Third Priority Representative, any other Second Priority Secured Party nor any
other Third Priority Secured Party shall, in an Insolvency Proceeding or otherwise, oppose any sale
or disposition of any assets of any Loan Party that is supported by the First Priority Secured
Parties, and the Second Priority Representative, the Third Priority Secured Party and each other
Second Priority Secured Party and Third Priority Secured Party will be deemed to have consented
under Section 363 of the Bankruptcy Code (and otherwise) to any sale supported by the First
Priority Secured Parties and to have released their Liens on such assets, provided, however, that
the Lien of the Second Priority Representative, the Third Priority Representative and each other
Second Priority Secured Party and Third Priority Secured Party shall continue in the proceeds of
any such sale or disposition, which Lien shall be governed by the terms of this Agreement; and
provided further, that that if the total amount of outstanding First Priority Obligations plus the
amount of any unfunded commitments then outstanding with respect to the First Priority Agreement is (or would become in connection with such sale or disposition)
less than $20,000,000.00, any such release must be consented to by the Second Priority
Representative.

     (b) Neither the Third Priority Representative nor any other Third Priority Secured Party
shall, in an Insolvency Proceeding or otherwise, oppose any sale or disposition of any assets of
any Loan Party that is supported by the Second Priority Secured Parties, and the Third Priority
Representative and each other Third Priority Secured Party will be deemed to have consented under
Section 363 of the Bankruptcy Code (and otherwise) to any sale supported by the Second Priority
Secured Parties and to have released their Liens on such assets, provided, however, that the Lien
of the Third Priority Representative and each other Third Priority Secured Party shall continue in
the proceeds of any such sale or disposition, which Lien shall be governed by the terms of this
Agreement.

     5.7 Separate Grants of Security and Separate Classification. Each Second Priority
Secured Party and Third Priority Secured Party acknowledges and agrees that (a) the grants of Liens
pursuant to the First Priority Security Documents, the Second Priority Security Documents and the
Third Priority Security Documents constitute three separate and distinct grants of Liens and (b)
because of, among other things, their differing rights in the Common Collateral, the First Priority
Obligations, the Second Priority Obligations and the Third Priority Obligations are each
fundamentally different from each other and must be separately classified in any plan of
reorganization proposed or adopted in an Insolvency 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 Priority Secured Parties, Second Priority Secured Parties and Third Priority Secured
Parties in respect of the Common Collateral constitute only one secured claim (rather than three
separate classes of first, second and third priority secured claims), then the Second Priority

 

 

25

Secured Parties and Third Priority Secured Parties hereby acknowledge and agree that all
distributions shall be made as if there were three separate classes of first, second and third
priority secured claims against the Loan Parties in respect of the Common Collateral (with the
effect being that, to the extent that the aggregate value of the Common Collateral is sufficient
(for this purpose ignoring all claims held by the Second Priority Secured Parties and the Third
Priority Secured Parties), (i) the First Priority Secured Parties 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 in respect of Post-Petition Interest before any distribution is made in
respect of the claims held by the Second Secured Priority Secured Parties and the Third Priority
Secured Parties, with the Second Priority Secured Parties and Third Priority Secured Parties hereby
acknowledging and agreeing to turn over to the First Priority Secured Parties amounts otherwise
received or receivable by them to the extent necessary to effectuate the intent of this sentence,
even if such turnover has the effect of reducing the claim or recovery of the Second Priority
Secured Parties and Third Priority Secured Parties; and (ii) following the application of clause
(i) hereto, the Second Priority Secured Parties 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 in respect of Post-Petition Interest before any distribution is made in respect of
the claims held by the Third Priority Secured Parties, with the Third Priority Secured Parties
hereby acknowledging and agreeing to turn over to the Second Priority Secured Parties amounts
otherwise received or receivable by them to the extent necessary to effectuate the intent of this
sentence, even if such turnover has the effect of reducing the claim or recovery of the Third
Priority Secured Parties.

     5.8 No Waivers of Rights of First Priority Secured Parties and Second Priority Secured
Parties. Nothing contained herein shall prohibit or in any way limit the First Priority
Representative or any other First Priority Secured Party from objecting in any Insolvency
Proceeding or otherwise to any action taken by any Second Priority Secured Party or Third Priority
Secured Party, including the seeking
by any Second Priority Secured Party or Third Priority Secured Party of adequate protection
(except as provided in Section 5.4) or the asserting by any Second Priority Secured Party or Third
Priority Secured Party of any of its rights and remedies under the Second Priority Documents, the
Third Priority Documents or otherwise, or limit the Second Priority Representative or any other
Second Priority Secured Party from objecting in any Insolvency Proceeding or otherwise to any
action taken by any Third Priority Secured Party, including the seeking by any Third Priority
Secured Party of adequate protection (except as provided in Section 5.4) or the asserting by any
Third Priority Secured Party of any of its rights and remedies under the Third Priority Documents
or otherwise.

     5.9 Other Matters. (a) To the extent that the Second Priority Representative as a
Second Priority Secured Party or any Second Priority Secured Party, or the Third Priority
Representative or any Third Priority Secured Party, has or acquires rights under Section 363 or
Section 364 of the Bankruptcy Code with respect to any of the Common Collateral, the Second
Priority Representative agrees, on behalf of itself and the other Second Priority Secured Parties,
and the Third Priority Representative agrees, on behalf of itself and the other Third Priority
Secured Parties, not to assert any of such rights without the prior written consent of the First
Priority Representative; provided that if requested by the First Priority Representative, the
Second Priority Representative and/or the Third Priority Representative shall timely exercise such
rights in the manner requested by the First Priority Representative, including any rights to
payments in respect of such rights.

     (b) To the extent that the Third Priority Representative or any Third Priority Secured Party
has or acquires rights under Section 363 or Section 364 of the Bankruptcy Code with respect to any
of the

 

 

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Common Collateral, the Third Priority Representative agrees, on behalf of itself and the
other Third Priority Secured Parties not to assert any of such rights without the prior written
consent of the Second Priority Representative; provided that if requested by the Second Priority
Representative, the Third Priority Representative shall timely exercise such rights in the manner
requested by the Second Priority Representative, including any rights to payments in respect of
such rights.

     5.10 Effectiveness in Insolvency Proceedings. This Agreement, which the parties
hereto expressly acknowledge is a “subordination agreement” under section 510(a) of the Bankruptcy
Code, shall be effective before, during and after the commencement of an Insolvency Proceeding.

     SECTION 6. Second Priority Documents and First Priority Documents.

     (a) Each Loan Party and the Second Priority Representative, on behalf of itself and the
Second Priority Secured Parties, agrees that it shall not at any time execute or deliver any
amendment or other modification to any of the Second Priority Documents in violation of this
Agreement.

     (b) Each Loan Party and the First Priority Representative, on behalf of itself and the First
Priority Secured Parties, agrees that it shall not at any time execute or deliver any amendment or
other modification to any of the First Priority Documents in violation of this Agreement.

     (c) Each Loan Party and the Third Priority Representative, on behalf of itself and the Third
Priority Secured Parties, agrees that it shall not at any time execute or deliver any amendment or
other modification to any of the Third Priority Documents in violation of this Agreement.

     SECTION 7 . Reliance; Waivers; etc.

     7.1 Reliance. The First Priority Documents are deemed to have been executed and
delivered, and all extensions of credit thereunder are deemed to have been made or incurred, in
reliance upon this Agreement. The Second Priority Representative, on behalf of itself as a Second
Priority Secured Party and the Second Priority Secured Parties, and the Third Priority
Representative, on behalf of itself and the Third Priority Secured Parties, expressly waive all
notice of the acceptance of and reliance on this Agreement by the First Priority Representative and
the First Priority Secured Parties. The Second Priority Documents are deemed to have been executed
and delivered and all extensions of credit thereunder are deemed to have been made or incurred, in
reliance upon this Agreement. The First Priority Representative, on behalf of itself and the First
Priority Secured Parties, and the Third Priority Representative, on behalf of itself and the Third
Priority Secured Parties, expressly waive all notices of the acceptance of and reliance by the
Second Priority Representative and the Second Priority Secured Parties. The Third Priority
Documents are deemed to have been executed and delivered and all extensions of credit thereunder
are deemed to have been made or incurred, in reliance upon this Agreement. The First Priority
Representative, on behalf of itself and the First Priority Secured Parties, and the Second Priority
Representative, on behalf of itself and the Second Priority Secured Parties, expressly waive all
notices of the acceptance of and reliance by the Third Priority Representative and the Third
Priority Secured Parties.

     7.2 No Warranties or Liability. The Third Priority Representative, the Second
Priority Representative and the First Priority Representative acknowledge and agree that neither
has made any representation or warranty with respect to the execution, validity, legality,
completeness, collectibility or

 

 

27

enforceability of any other First Priority Document, any other
Second Priority Document or any other Third Priority Document. Except as otherwise provided in
this Agreement, the Third Priority Representative, the Second Priority Representative and the First
Priority Representative will be entitled to manage and supervise their respective extensions of
credit to any Loan Party in accordance with law and their usual practices, modified from time to
time as they deem appropriate.

     7.3 No Waivers. No right or benefit of any party hereunder shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of such party or any other
party hereto or by any noncompliance by any Loan Party with the terms and conditions of any of the
First Priority Documents, the Second Priority Documents or the Third Priority Documents.

     SECTION 8. Obligations Unconditional.

     8.1 First Priority Obligations Unconditional. All rights and interests of the First
Priority Secured Parties hereunder, and all agreements and obligations of the Second Priority
Secured Parties and the Third Priority Secured Parties (and, to the extent applicable, the Loan
Parties) hereunder, shall remain in full force and effect irrespective of:

     (a) any lack of validity or enforceability of any First Priority Document;

     (b) any change in the time, place or manner of payment of, or in any other term of,
all or any portion of the First Priority Obligations, or any amendment, waiver or other
modification, whether by course of conduct or otherwise, or any refinancing, replacement,
refunding or restatement of any First Priority Document;

     (c) prior to the First Priority Obligations Payment Date, any exchange, release,
voiding, avoidance or non-perfection of any security interest in any Common Collateral or
any other collateral, or any release, amendment, waiver or other modification, whether by
course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of
all or any portion of the First Priority Obligations or any guarantee or guaranty thereof;
or

     (d) any other circumstances that otherwise might constitute a defense available to, or
a discharge of, any Loan Party in respect of the First Priority Obligations, or of any of
the Second Priority Representative, the Third Priority Representative, or any Loan Party, to
the extent applicable, in respect of this Agreement.

     8.2 Second Priority Obligations Unconditional. All rights and interests of the Second
Priority Secured Parties hereunder, and all agreements and obligations of the First Priority
Secured Parties and the Third Priority Secured Parties (and, to the extent applicable, the Loan
Parties) hereunder, shall remain in full force and effect irrespective of:

     (a) any lack of validity or enforceability of any Second Priority Document;

     (b) any change in the time, place or manner of payment of, or in any other term of,
all or any portion of the Second Priority Obligations, or any amendment, waiver or other
modification, whether by course of conduct or otherwise, or any refinancing, replacement,
refunding or restatement of any Second Priority Document;

 

 

28

     (c) any exchange, release, voiding, avoidance or non-perfection of any security
interest in any Common Collateral or any other collateral, or any release, amendment, waiver
or other modification, whether by course of conduct or otherwise, or any refinancing,
replacement, refunding or restatement of all or any portion of the Second Priority
Obligations or any guarantee or guaranty thereof; or

     (d) any other circumstances that otherwise might constitute a defense available to, or
a discharge of, any Loan Party in respect of the Second Priority Obligations or any First
Priority Secured Party or Third Priority Secured Party in respect of this Agreement.

     8.3 Third Priority Obligations Unconditional. All rights and interests of the Third
Priority Secured Parties hereunder, and all agreements and obligations of the First Priority
Secured Parties and the Second Priority Secured Parties (and, to the extent applicable, the Loan
Parties) hereunder, shall remain in full force and effect irrespective of:

     (a) any lack of validity or enforceability of any Third Priority Document;

     (b) any change in the time, place or manner of payment of, or in any other term of,
all or any portion of the Third Priority Obligations, or any amendment, waiver or other
modification, whether by course of conduct or otherwise, or any refinancing, replacement,
refunding or restatement of any Third Priority Document;

     (c) any exchange, release, voiding, avoidance or non-perfection of any security
interest in any Common Collateral or any other collateral, or any release, amendment, waiver
or other modification, whether by course of conduct or otherwise, or any refinancing,
replacement,
refunding or restatement of all or any portion of the Third Priority Obligations or any
guarantee or guaranty thereof; or

     (d) any other circumstances that otherwise might constitute a defense available to, or
a discharge of, any Loan Party in respect of the Third Priority Obligations or any First
Priority Secured Party or Second Priority Secured Party in respect of this Agreement.

     SECTION 9. Purchase Option.

     9.1 Purchase Notice. Upon (i) notice by the First Priority Representative (a “Trigger
Notice”) to the Second Priority Representative, which notice shall be delivered not less than 10
business days prior to the earlier to occur of (a) the acceleration of the First Priority
Obligations in accordance with the terms of the First Priority Documents, or (b) the commencement
of an Enforcement Action by the First Priority Representative or any First Priority Secured Party,
or, if earlier (ii) the occurrence of any event described in clauses (i)(a) or (i)(b) above (a
“Trigger Event”), Holders of the Second Priority Obligations participating in such a purchase shall
have the option, at any time upon ten (10) business days’ prior written notice to the First
Priority Representative on behalf of the First Priority Creditors (the “Purchase Notice”) to
purchase all of the First Priority Obligations from the First Priority Creditors pursuant to the
assignment provisions contained in the First Priority Agreement. The Purchase Notice shall be
irrevocable. Any number of the Holders of the Second Priority Obligations agreeing as a group to
purchase the entire aggregate may exercise such purchase option. For the avoidance of doubt, each
Holder of Second Priority Obligations shall have the option to purchase up to such Holder’s pro
rate share

 

 

29

(such pro rate share based on those Holders of Second Priority Obligations participating
in such purchase) and this right may be exercised by any number of Holders of Second Priority
Obligations to purchase the entire aggregate amount of the outstanding First Priority Obligations.
If such Holders of Second Priority Obligations exercise such purchase option, it shall be exercised
pursuant to documentation consistent with this Article 9 and otherwise mutually acceptable to each
of the First Priority Representative and such Holders.

     9.2 Cessation of Enforcement Action. The Second Priority Representative may send to
the First Priority Representative on behalf of the First Priority Creditors the Purchase Notice
referred to in Section 9.1 above within 10 business days of receipt of such Trigger Notice (or, if
earlier, the occurrence of such Trigger Event), in which event, First Priority Representative and
the First Priority Creditors shall not (a) accelerate any of the First Priority
Obligations, (b) commence any Enforcement Action or (c) request that the Second Priority
Representative release any Second Priority Lien, as the case may be, provided, that, the parties
shall endeavor to use commercially reasonable means to close the sale of the First Priority
Obligations to such Holders requesting such sale pursuant to Section 9.1 hereof, as promptly as
possible thereafter and in no event later than 20 business days after receipt of the Purchase
Notice.

     9.3 Sale. On the date of the consummation of the sale of First Priority Obligations
to the Holders requesting such sale pursuant to Section 9.1 hereof, First Priority Creditors shall
sell to such Holders, and such Holders shall purchase from First Priority Creditors, the First
Priority Obligations, provided that, First Priority Creditors shall retain all rights to be
indemnified or held harmless by Borrower and the other Loan Parties in accordance with the terms of
the First Priority Agreement but shall not retain any rights to the security therefor.

     9.4 Purchase. Upon the date of such purchase and sale, Second Priority Creditors
shall:

     (a) pay in cash to First Priority Representative on behalf of First Priority Creditors
as the purchase price therefor the full amount of all the First Priority Obligations then
outstanding and unpaid (including principal, interest, fees and expenses, including
reasonable attorneys’ fees and legal expenses (including default interest)), if any;

     (b) furnish cash collateral to First Priority Representative in such amounts as First
Priority Representative determines is reasonably necessary to secure First Priority
Creditors in connection with any issued and outstanding letters of credit provided by First
Priority Creditors (or letters of credit that First Priority Creditors have arranged to be
provided by third parties pursuant to the financing arrangements of First Priority Creditors
with Borrower or any other Loan Party) to Borrower or any Party (but not in any event in an
amount greater than 105% of the aggregate undrawn face amount of such letters of credit),
and

     (c) agree to reimburse on demand First Priority Creditors for any loss, cost, damage
or expense (including reasonable attorneys’ fees and legal expenses) in connection with any
commissions, fees, costs or expenses related to any issued and outstanding letters of credit
as described above and any checks or other payments provisionally credited to the First
Priority Obligations, and/or as to which any First Priority Creditor has not yet received
final payment.

     Such purchase price and cash collateral shall be remitted by wire transfer in federal funds to
such bank account of First Priority Representative in New York, New York, as First Priority
Representative

 

 

30

may designate in writing to Second Priority Representative for such purpose.
Interest shall be calculated to but excluding the business day on which such purchase and sale
shall occur if the amounts so paid by the Holders requesting such sale pursuant to Section 9.1
hereof to the bank account designated by First Priority Representative are received in such bank
account prior to 1:00 p.m., New York City time and interest shall be calculated to and including
such business day if the amounts so paid by the Holders requesting such sale pursuant to Section
9.1 hereof to the bank account designated by First Lien Agent are received in such bank account
later than 1:00 p.m., New York City time.

     9.5 Terms of Purchase. Such purchase shall be expressly made without representation
or warranty of any kind by any First Priority Creditor as to the First Priority Obligations or
otherwise and without recourse to any First Priority Creditor, except that each First Priority
Creditor shall represent and warrant: (a) the amount of its portion of the First Priority
Obligations being purchased, (b) that such First Priority Creditor owns its portion of the First
Priority Obligations free and clear of any Liens or encumbrances and (c) such First Priority
Creditor has the right and power to assign such First Priority Obligations and the assignment has
been duly authorized by all necessary corporate action by such First Priority Creditor.

     SECTION 10. Miscellaneous.

     10.1 Conflicts. In the event of any conflict between the provisions of this Agreement
and the provisions of any First Priority Document, any Second Priority Document or any Third
Priority Document, the provisions of this Agreement shall govern.

     10.2 Continuing Nature of Provisions. This Agreement shall continue to be effective,
and shall not be revocable by any party hereto, until the First Priority Obligations Payment Date
and the Second Priority Obligations Payment Date shall have occurred. This is a continuing
agreement and the First Priority Secured Parties, the Second Priority Secured Parties and the Third
Priority Secured Parties
may continue, at any time and without notice to the other parties hereto, to extend credit and
other financial accommodations, lend monies and provide indebtedness to, or for the benefit of,
Borrower or any other Loan Party on the faith hereof.

     10.3 Amendments; Waivers. (a) No amendment or modification of any of the provisions
of this Agreement shall be effective unless the same shall be in writing and signed by the First
Priority Representative, the Second Priority Representative and the Third Priority Representative,
and, in the case of amendments or modifications that affects the rights or duties of, or imposes
additional obligations or liabilities on, any Loan Party, such Loan Party.

     (b) It is understood that the First Priority Representative, the Second Priority
Representative and the Third Priority Representative, without the consent of any other First
Priority Secured Party, Second Priority Secured Party or Third Priority Secured Party, may in their
discretion determine that a supplemental agreement (which make take the form of an amendment and
restatement of this Agreement) is necessary or appropriate to facilitate having additional
indebtedness or other obligations (“Additional Debt”) of any of the Loan Parties become First
Priority Obligations, Second Priority Obligations or Third Priority Obligations, as the case may
be, under this Agreement, which supplemental agreement shall specify whether such Additional Debt
constitutes First Priority Obligations, Second Priority Obligations or Third Priority Obligations,
provided, that such Additional Debt is permitted to be incurred by the First Priority
Agreement, Second Priority Agreement and Third Priority Agreement then extant, and is

 

 

31

permitted by
said Agreements to be subject to the provisions of this Agreement as First Priority Obligations,
Second Priority Obligations or Third Priority Obligations, as applicable.

     10.4 Information Concerning Financial Condition of the Borrower and the other Loan
Parties. Each of the Third Priority Representative, the Second Priority Representative and the
First Priority Representative hereby assume responsibility for keeping itself informed of the
financial condition of the Borrower and each of the other Loan Parties and all other circumstances
bearing upon the risk of nonpayment of the First Priority Obligations, the Second Priority
Obligations or the Third Priority Obligations. The Third Priority Representative, the Second
Priority Representative and the First Priority Representative hereby agree that no party shall have
any duty to advise any other party of information known to it regarding such condition or any such
circumstances. In the event the Third Priority Representative, the Second Priority Representative
or the First Priority Representative, in its sole discretion, undertakes at any time or from time
to time to provide any information to any other party to this Agreement, it shall be under no
obligation (a) to provide any such information to such other party or any other party on any
subsequent occasion, (b) to undertake any investigation not a part of its regular business routine,
or (c) to disclose any other information.

     10.5 Governing Law. This Agreement shall be construed in accordance with and governed
by the law of the State of New York, except as otherwise required by mandatory provisions of law
and except to the extent that remedies provided by the laws of any jurisdiction other than the
State of New York are governed by the laws of such jurisdiction.

     10.6 Submission to Jurisdiction. (a) Each First Priority Secured Party, each Second
Priority Secured Party, each Third Priority Secured Party and each Loan Party hereby irrevocably
and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the United States District
Court of the Southern District of New York, and any appellate court from any thereof, in any action
or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of
any judgment, and each
such party hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each such party agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right
that the any First Priority Secured Party, Second Priority Secured Party or Third Priority Secured
Party may otherwise have to bring any action or proceeding against any Loan Party or its properties
in the courts of any jurisdiction.

     (b) Each First Priority Secured Party, each Second Priority Secured Party, each Third
Priority Secured Party and each Loan Party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so (i) any objection it may now or hereafter have
to the laying of venue of any suit, action or proceeding arising out of or relating to this
Agreement in any court referred to in paragraph (a) of this Section and (ii) the defense of an
inconvenient forum to the maintenance of such action or proceeding.

     (c) Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 10.7. Nothing in this Agreement will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.

 

 

32

     10.7 Notices. Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and may be personally
served, telecopied, or sent by overnight express courier service or United States mail and shall be
deemed to have been given when delivered in person or by courier service, upon receipt of a
telecopy or five days after deposit in the United States mail (certified, with postage prepaid and
properly addressed). For the purposes hereof, the addresses of the parties hereto (until notice of
a change thereof is delivered as provided in this Section) shall be as set forth below each party’s
name on the signature pages hereof, 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.

     10.8 Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of each of the parties hereto and each of the First Priority Secured Parties, Second
Priority Secured Parties and Third Priority Secured Parties and their respective successors and
assigns, and nothing herein is intended, or shall be construed to give, any other Person any right,
remedy or claim under, to or in respect of this Agreement or any Common Collateral.

     10.9 Headings. Section headings used herein are for convenience of reference only,
are not part of this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

     10.10 Severability. Any provision of this Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

     10.11 Other Remedies. For avoidance of doubt, it is understood that nothing in this
Agreement shall prevent (i) any Second Priority Secured Party from exercising any available remedy
to accelerate the maturity of any indebtedness or other obligations owing under the Second Priority
Agreement or to
demand payment under any guarantee in respect thereof, or (ii) any Third Priority Secured
Party from exercising any available remedy to accelerate the maturity of any indebtedness or other
obligations owing under the Third Priority Agreement or to demand payment under any guarantee in
respect thereof.

     10.12 Counterparts; Integration; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto on 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 by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement. This Agreement shall
become effective when it shall have been executed by each party hereto.

     10.13 Additional Loan Parties. Each Person that becomes a Loan Party after the
date hereof shall become a party to this Agreement upon execution and delivery by such Person of an
Assumption Agreement in the form of Annex 1 to the Guarantee and Collateral Agreement referred to
in the First Priority Agreement.

 

 

33

     10.14 Rights as Unsecured Creditors. Notwithstanding anything to the contrary herein,
it is understood and agreed that the Second Priority Secured Parties and the Third Priority Secured
Parties may exercise rights and remedies as unsecured creditors.

     10.15 No Fiduciary Duties. None of the First Priority Representative, the Second
Priority Representative or the Third Priority Representative shall have a fiduciary duty with any
other Person with respect to any acts under this Agreement.

     10.16 Subordination Provisions. Each of the parties hereto recognizes and
acknowledges that, pursuant to Article X of the Existing Third Priority Agreement, the Third
Priority Obligations are subordinated in right of payment to the First Priority Obligations and the
Second Priority Obligations, and the Third Priority Representative acknowledges that the First
Priority Representative and the Second Priority Representative are third party beneficiaries to
such subordination provisions and have the right to seek to enforce such provisions on behalf of
the First Priority Secured Parties and the Second Priority Secured Parties, as applicable.

 

34

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

	 	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A., as First Priority Representative
for and on behalf of the First Priority Secured Parties
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/
Geoff Benson	 	 
	 

	 	Name:	 	 Geoff Benson	 	 
	 

	 	Title:	 	 Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Notices:
	 
	 	 	 	 	 	 
	 	 	Attention:
	 	 	Telecopy No.:
	 
	 	 	 	 	 	 
	 	 	THE BANK OF NEW YORK TRUST COMPANY, N.A., as Collateral
Agent, as Second Priority Representative for and on behalf of
the Second Priority Secured Parties
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/
Linda Garcia 	 	 
	 

	 	Name:
	 	Linda Garcia	 	 
	 

	 	Title:	 	Assistant Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Notices:
	 
	 	 	 	 	 	 
	 	 	Attention:
	 	 	Telecopy No.:
	 
	 	 	 	 	 	 
	 	 	MERRILL LYNCH PCG, INC., as Third Priority Representative for
and on behalf of the Third Priority Secured Parties
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/
Neven Viducis 	 	 
	 

	 	Name:	 	 Neven Viducis	 	 
	 

	 	Title:	 	 Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Notices:
	 
	 	 	 	 	 	 
	 	 	Attention:
	 	 	Telecopy No.:

 

35

	 	 	 	 	 	 	 
	 	 	LIBBEY GLASS INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Susan A. Kovach
	 	 
	 

	 	Name:
	 	Susan A. Kovach
	 	 
	 

	 	Title:	 	Vice President, General Counsel and
Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Notices:
	 
	 	 	 	 	 	 
	 	 	Attention:
	 	 	Telecopy No.:
	 
	 	 	 	 	 	 
	 	 	LIBBEY INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Susan A. Kovach
	 	 
	 

	 	Name:
	 	Susan A. Kovach
	 	 
	 

	 	Title:	 	Vice President, General Counsel and
Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Notices:
	 
	 	 	 	 	 	 
	 	 	Attention:
	 	 	Telecopy No.:
	 
	 	 	 	 	 	 
	 	 	LGA3 CORP.
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Susan A. Kovach
	 	 
	 

	 	Name:
	 	Susan A. Kovach
	 	 
	 

	 	Title:	 	Vice President, General Counsel and
Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Notices:
	 
	 	 	 	 	 	 
	 	 	Attention:
	 	 	Telecopy No.:
	 
	 	 	 	 	 	 
	 	 	THE DRUMMOND GLASS COMPANY
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Susan A. Kovach
	 	 
	 

	 	Name:
	 	Susan A. Kovach
	 	 
	 

	 	Title:	 	Vice President, General Counsel and
Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Notices:

 

36

	 	 	 	 	 	 	 
	 	 	Attention:
	 	 	Telecopy No.:
	 
	 	 	 	 	 	 
	 	 	LGA4 CORP.
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/
Susan A. Kovach
	 	 
	 

	 	Name:
		Susan A. Kovach
	 	 
	 

	 	Title:	 	Vice President, General Counsel,
and Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Notices:
	 
	 	 	 	 	 	 
	 	 	Attention:
	 	 	Telecopy No.:
	 
	 	 	 	 	 	 
	 	 	SYRACUSE CHINA COMPANY
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/
Susan A. Kovach
	 	 
	 

	 	Name:
		Susan A. Kovach
	 	 
	 

	 	Title:	 	Vice President, General Counsel,
and Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Notices:
	 
	 	 	 	 	 	 
	 	 	Attention:
	 	 	Telecopy No.:
	 
	 	 	 	 	 	 
	 	 	LGFS INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/
Susan A. Kovach
	 	 
	 

	 	Name:
		Susan A. Kovach
	 	 
	 

	 	Title:	 	Vice President, General Counsel,
and Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Notices:
	 
	 	 	 	 	 	 
	 	 	Attention:
	 	 	Telecopy No.:
	 

 

37

	 	 	 	 	 	 	 
	 	 	WORLD TABLEWARE INC.
	 
	 

	By:	/s/  Susan A. Kovach

	 	 
	 

	 	Name:	 	Susan A. Kovach
	 	 
	 

	 	Title:	 	Vice President, General Counsel and Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Notices:
	 
	 	 	 	 	 	 
	 	 	Attention:
	 	 	Telecopy No.:
	 
	 	 	 	 	 	 
	 	 	TRAEX COMPANY
	 
	 	 	 	 	 	 
	 

	By:	/s/  Susan A. Kovach

	 	 
	 

	 	Name:
	 	Susan A. Kovach
	 	 
	 

	 	Title:	 	Vice President, General Counsel and Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Notices:
	 
	 	 	 	 	 	 
	 	 	Attention:
	 	 	Telecopy No.:
	 
	 	 	 	 	 	 
	 	 	LGC CORP.
	 
	 	 	 	 	 	 
	 

	By:	/s/  Susan A. Kovach

	 	 
	 

	 	Name:
	 	Susan A. Kovach
	 	 
	 

	 	Title:	 	Vice President, General Counsel and Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Notices:
	 
	 	 	 	 	 	 
	 	 	Attention:
	 	 	Telecopy No.:
	 
	 	 	 	 	 	 
	 	 	LGAC LLC
	 
	 	 	 	 	 	 
	 

	By:	/s/  Susan A. Kovach

	 	 
	 

	 	Name:
	 	Susan A. Kovach
	 	 
	 

	 	Title:	 	Vice President, General Counsel and Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Notices:
	 
	 	 	 	 	 	 
	 	 	Attention:
	 	 	Telecopy No.:

 

38

	 	 	 	 	 	 	 
	 	 	Attention:
	 	 	Telecopy No.:
	 
	 	 	LIBBEY.COM LLC
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/
Susan A. Kovach
	 	 
	 

	 	Name:
		Susan A. Kovach
	 	 
	 

	 	Title:	 	Vice President, General Counsel,
and Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Notices:
	 
	 	 	 	 	 	 
	 	 	Attention:
	 	 	Telecopy No.:
	 
	 	 	 	 	 	 
	 	 	CRISA INDUSTRIAL, L.L.C.
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/
Susan A. Kovach
	 	 
	 

	 	Name:
		Susan A. Kovach
	 	 
	 

	 	Title:	 	Vice President, General Counsel,
and Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Notices:
	 
	 	 	 	 	 	 
	 	 	Attention:
	 	 	Telecopy No.:exv10w1

 

EXHIBIT
10.1

EXECUTION COPY

TRANSITION SERVICES AGREEMENT

          TRANSITION SERVICES AGREEMENT (this “Agreement”), dated June 16, 2006, among Crisa
Libbey S.A. de C.V., a Mexican Sociedad Anónima de Capital Variable (“Crisa Libbey”),
Vitrocrisa Holding, S. de R.L. de C.V., a Mexican Sociedad de Responsabilidad Limitada de Capital
Variable (“VC Holding”), Vitrocrisa S. de R.L. de C.V., a Mexican Sociedad de
Responsabilidad Limitada de Capital Variable (“Vitrocrisa”), Vitrocrisa Comercial, S. de
R.L. de C.V., a Mexican Sociedad de Responsabilidad Limitada de Capital Variable (“VC
Comercial”), Crisa Industrial, L.L.C., a Delaware limited liability company (“Crisa
Industrial” and, collectively with Crisa Libbey, VC Holding, Vitrocrisa and VC Comercial, the
“Acquired Companies” or the “Recipient”) and Vitro Corporativo, S.A. de C.V., a
Mexican Sociedad Anónima de Capital Variable (“Vitro”). Each of Vitro and the Recipient is
referred to sometimes in this Agreement as a “Party,” and Vitro and the Recipient are
referred to collectively in this Agreement as the “Parties.”

          Unless otherwise defined herein, all capitalized terms have the meanings set forth in the
Purchase Agreement (as defined below).

          WHEREAS, Vitro, S.A. de C.V., Crisa Corporation, a Delaware corporation (together with Vitro,
“Sellers”), the Acquired Companies, Libbey Mexico, S. de R.L. de C.V., a Mexican Sociedad
de Responsibilidad Limitada de Capital Variable (“Libbey Mexico”), Libbey Europe B.V., a
limited liability company (besloten vennotschap met beperkte aansprakelijkheid) organized under the
laws of the Netherlands (“Libbey Europe”) and LGA3 Corp., a Delaware corporation
(“LGA3” and, together with Libbey Europe and Libbey Mexico, “Purchasers”) have
entered into that certain Purchase Agreement, dated as of April 2, 2006, as amended on or prior to
the date hereof (as amended, the “Purchase Agreement”), pursuant to which Sellers have
agreed to sell to Purchasers, and Purchasers have agreed to buy from Sellers, all right, title and
interest of Sellers in and to the Acquired Companies and certain related assets; and

          WHEREAS, the Purchase Agreement contemplates, from and after the Closing, that the Vitro
Entities shall provide, or shall cause to be provided, certain transition services to the Acquired
Companies.

          NOW, THEREFORE, in consideration of the foregoing and the mutual agreements and covenants set
forth in this Agreement and the Purchase Agreement, and intending to be legally bound, the Parties
agree as follows:

     1. Transition Services. Vitro shall provide, or use commercially reasonable efforts
to cause to be provided by its vendors (as specified on Exhibit A), to the Recipient the
services set forth on Exhibit A attached hereto and incorporated herein by reference (each
a “Transition Service” and, collectively, the “Transition Services”) for the Term
in accordance with this Agreement. Subject to the terms of the Purchase Agreement, Vitro shall
perform, or, where set forth on Exhibit A, use commercially reasonable efforts to cause to
be performed by its vendors, all services necessary for the performance of the Transition Services.
For a period of three years from the Closing Date or such other shorter period as the Acquired
Companies or Purchasers may indicate, Vitro shall cause the General Manager to allocate 80% of his
time to the provision and performance of Transition Services and other such duties as the Acquired
Companies, Purchasers or any of their Affiliates may determine pursuant to the terms and conditions
set forth on Exhibit 1.01-I of the Purchase Agreement.

 

 

     2. Standard of Performance.

In all material respects, Vitro shall use, and shall use commercially reasonable efforts to cause
its vendors to use, the same degree of diligence as Vitro or its vendor, as applicable, exercised
in providing services to the Recipient during the 12-month period prior to the date hereof. The
Transition Services shall be of the type and quality, and shall be provided at staffing levels and
with timeliness, provided to the Acquired Companies during the 12-month period prior to the date
hereof, provided that: (a) to the extent a Transition Service was not provided to the Recipient
during the 12-month period prior to the date hereof, the Transition Service shall be of the type
and quality, and shall be provided at staffing levels and with timeliness, consistent with the
provision of similar services to Vitro or its Affiliates during the 12-month period prior to the
date hereof; (b) in no event shall the staffing levels and timeliness with which the Transition
Services are provided to the Recipient be less than those with which Vitro or its affiliates
provide similar services to the Excluded Business; and (c) except as set forth in clauses (a) and
(b), in no event shall the type and quality of Transition Services, or staffing levels and
timeliness with which they are provided, be required to be provided in a manner materially greater
than such services were provided during the 12-month period prior to the date hereof. Vitro, in
the performance of the Transition Services and other obligations hereunder, shall comply with Laws
applicable to the Transition Services performed by Vitro, and shall use commercially reasonable
efforts to enforce the terms and conditions of its or its Affiliate’s contracts with vendors that
relate to the Transition Services hereunder.

     3. Fees & Expenses.

	 	(a)	 	Vitro shall sell, and the Recipient shall purchase, the
Transition Services provided by Vitro or caused to be provided by Vitro
pursuant to this Agreement at the prices set forth on Exhibit A,
which prices represent, except as noted under such Exhibit, Vitro’s fiscal
year 2005 actual charges in Mexican Pesos to the Acquired Companies for each
Transition Service (the “2005 Vitro Charges”), plus any applicable
value added tax (the “VAT”). Vitro shall submit on a monthly basis a
single consolidated invoice to Vitrocrisa describing with reasonable
particularity the Transition Services provided by Vitro and the fees and
applicable VAT due therefor. Invoices for Transition Services provided by
Vitro vendors, with reasonably available supporting detail as to the charges,
shall be submitted by Vitro together with such consolidated invoice, or
directly by such vendors, at the option of Vitro. All amounts payable under
this Agreement for each month during the term shall be due and payable within
45 days of the date of invoice issued hereunder. Except as noted in
Exhibit A, all invoices will be denominated, and payment will be
made, in Mexican Pesos. Any invoice denominated in US$ dollars shall be
translated to Mexican Pesos at the exchange rate published by Banco de Mexico
in the Official Gazette (Diario Oficial de la Federación) as of the last
Business Day prior to the date of payment for the month in question. All
invoices will clearly identify the “pass-through” amounts due by Vitro to
third-party providers of goods or services and such amounts shall be
passed-through to Vitrocrisa without mark-up or margin of any kind.
Notwithstanding the foregoing, until the earlier of the third anniversary of
the date hereof or the date on which the General Manager’s services are no
longer required by or otherwise made available to the Acquired Companies as
contemplated hereby, the amount payable by the Acquired

2

 

	 	 	 	Companies to Vitro as total compensation for the General Manager’s
services shall be equal to US $41,666.66 per month, translated to Mexican
pesos at the exchange rate published by Banco de México in the Official
Gazette (Diario Oficial de la Federación) for the date of the invoice for
the month in question. In addition to the foregoing, the Acquired
Companies shall be responsible for and pay all travel, entertainment and
other expenses incurred by the General Manager in connection with his
services to the Acquired Companies hereunder or to such other duties as
Recipient, Purchasers, or the Acquired Companies may determine. If any
amount payable by Recipient under this Agreement is not paid when due,
Recipient shall pay interest on such past due amount, accruing commencing
on the date such amount is due until such amount is paid, at an annual
rate equal to TIIE (Tasa Interbancaria de Equilibrio) multiplied by 1.5
(if such amount is due in Mexican pesos) or 30-day LIBOR plus 4.00% (if
such amount is due in U.S. dollars).
	 
	 	(b)	 	Fee Adjustments.

                    (i) With respect to any Transition Service other than the General Manager’s services,
after the second anniversary of the date hereof, Vitro may prospectively and proportionally
adjust the amount charged by Vitro with respect to such Transition Service to account for
increases in the actual cost incurred by Vitro for materials, services and labor costs in
connection with the Transition Service, provided, that in no event shall the amount of any
such proportionate annual increase with respect to the Transition Service in question exceed
the proportionate amount of any direct cost increases incurred by Vitro since year-end 2005
relating to such Transition Service.

                    (ii) If requested by the Recipient, or by Vitrocrisa on behalf of the Recipient, Vitro
shall provide the Recipient, or Vitrocrisa on behalf of the Recipient, but subject to and
limited by any confidentiality agreements with vendors, if applicable, with reasonable
access to Vitro’s bills of material or services costs and evidence of increased labor costs
necessary to enable the Recipient to verify any such increase. Any adjustment pursuant to
this paragraph shall be reflected in an amendment to Exhibit A, provided to the
Recipient contemporaneously with the invoice reflecting any such adjustment.

	 	(c)	 	With respect to any Transition Service other than the
General Manager’s services, after the third anniversary of the date hereof,
the Parties will negotiate the terms upon which the Transition Services could
be continued, if any, and without obligation of any of the Parties to enter
into a new transition services agreement, or to extend the terms of this
Agreement.
	 
	 	(d)	 	The Recipient will reimburse, to the extent not incurred in
the 2005 Vitro Charges, Vitro for all reasonable, extraordinary,
out-of-pocket travel, lodging, food and other similar expenses in connection
with the Transition Services furnished. The Recipient will reimburse Vitro
vendors for all reasonable, extraordinary, out-of-pocket travel, lodging,
food and other similar expenses incurred by such vendors in connection with
the Transition Services furnished.

3

 

	 	(e)	 	Any Taxes or other governmental charges (not including
those based upon income) which may now or later be imposed upon the sale or
use of the Transition Services provided pursuant to this Agreement shall be
paid by the Recipient.
	 
	 	(f)	 	The Parties acknowledge that the General Manager shall be
an employee of Vitro or an Affiliate thereof. Vitro shall be responsible for
and pay to the General Manager all compensation and other consideration
payable to the General Manager during the term hereof, and Vitro shall
indemnify and hold Purchasers and the Acquired Companies harmless from and
against any Loss arising therefrom or related thereto. In furtherance of the
foregoing, during the term hereof, Recipients agree to provide Vitro (i)
reports of the Acquired Companies as a whole for EBITDA, working capital and
capital expenditures as may be reasonably requested by Vitro, and (ii) such
additional financial information regarding the Acquired Companies as Vitro
and the Recipient mutually agree, in their reasonable discretion, is
necessary and appropriate for Vitro to determine the compensation and other
consideration payable to the General Manager. Vitro shall have
responsibility for deducting and withholding any amounts required to be
deducted and withheld from payments made to the General Manager under
applicable Tax Law, and shall promptly remit any such amounts to the
appropriate Governmental Authorities. Vitro shall indemnify and hold
Purchasers and the Acquired Companies harmless from any Losses arising out of
any assertion by any Governmental Authority or any other third Party that
during the term hereof Purchasers or the Acquired Companies (i) improperly
failed to withhold any Taxes from the payments made to the General Manager,
(ii) improperly failed to pay the General Manager any wages, benefits or
severance, or (iii) are the employer of the General Manager.
	 
	 	(g)	 	Until the second anniversary of the date hereof, the
Acquired Companies shall receive a credit in the amount of US $52,083.33 each
month against the Transition Services Fees (as defined below) payable by any
of the Acquired Companies for the Transition Services provided under (i) this
Agreement; (ii) the Agreement between Desarrollo Personal y Familiar, A.C.
and Vitrocrisa with respect to “Vitro Club” and “El Manzano”; (iii) the
Agreement between Compañía Vidriera, S.A. de C.V and VC Comercial with
respect to the weighbridge (industrial scale) owned by Compañía Vidriera,
S.A. de C.V and located within Vidriera Monterrey; (iv) the Agreement
between Compañía Vidriera, S.A. de C.V. and VC Comercial with respect to an
electrical substation (but limited to the “Fixed Fee” under the electrical
substation contract); and (v) the Medical Services Agreement between Clínica
Vitro, A.C. and Vitrocrisa. The fees payable by any of the Acquired
Companies pursuant to the agreements listed in the preceding sentence are
referred to in this Agreement as the “Transition Services Fees”. For
purposes of applying all or any portion of the Credit against any Transition
Services Fees that are payable by any of the Acquired Companies in Mexican
pesos, the applicable portion of the Credit shall be determined by reference
to the U.S. dollar / Mexican peso exchange rate published by Banco de México
in the Official Gazette (Diario Oficial de la Federación) for the date of the
invoices in question. If

4

 

	 	 	 	the Transition Services Fees in any given month are not at least equal to
the applicable monthly credit, the Acquired Companies may accrue and carry
forward 100% of the unutilized portion of such credit to any subsequent
month until the Acquired Companies shall have received the full benefit of
all such monthly credits, but in no event after the 24th month
after the date of this agreement. Notwithstanding the foregoing, the
Transition Services Fees shall not include, and the credit contemplated by
this Section 3(g) shall not apply to, any fees, charges, expenses or costs
related to any approved Migration Plan hereunder or Transition Services
provided by Vitro vendors or with respect to goods or services provided
by, or any pass through amounts payable to, third party suppliers or
vendors
	 
	 	(h)	 	With respect to amounts payable under this Agreement, the
Recipient shall be entitled to exercise any rights of set-off granted to
Purchasers in accordance with and subject to the terms of Section 9.06(b) of
the Purchase Agreement.

     4. Further Assurances. Each Party agrees that it will take such actions, provide such
information and execute and deliver such further instruments and documents as may be necessary to
ensure and evidence the intent of this Agreement.

     5. Term and Termination.

	 	(a)	 	The term of this Agreement shall commence on the date
hereof and shall expire on the third anniversary of the date of this
Agreement (the “Initial Term”). Certain services shall be provided
for such shorter period of time as set forth in Column 2 of Exhibit
A. Should the Recipient desire to extend the time period for any
Transition Service beyond the Initial Term (or, with respect to Transition
Services to be provided for a shorter period, if Recipient desires to extend
the time period for such services beyond the shorter period provided in
Exhibit A), it shall provide at least 30 days prior written notice of
such request to Vitro (the Initial Term and any extension period are referred
to as the “Term”); provided, however Vitro shall not
be obligated to agree to any extension. The Recipient may terminate any
Transition Service as contemplated in paragraph (c) below. Upon termination
of any Transition Service, the portion of the monthly fees payable by the
Recipient after such termination shall be reduced to the extent of fees
attributable to the terminated Transition Service.
	 
	 	(b)	 	If Vitro determines at any time that it will no longer
provide, or that it will materially alter or reduce, any services provided
(whether provided by Vitro, any of its Affiliates, or by any third party
vendors) to any of its Affiliates of substantially the same kind, level and
nature as any of the Transition Services Vitro is obligated to provide to the
Recipient pursuant to this Agreement, Vitro will provide Vitrocrisa, on
behalf of the Recipient, with written notice specifying (i) the Transition
Services to be discontinued, altered or reduced and (ii) the final date upon
which such Transition Services will be provided to the Recipient, which date
will be not less than 90 days after the date of such notice is received by
Vitrocrisa. Upon notice from Vitro to the Recipient regarding the

5

 

	 	 	 	discontinuance, alteration or reduction of any Transition Service, Vitro
and the Recipient shall use commercially reasonable efforts to establish a
Migration Plan (as defined below) with respect to such Transition Service.
	 
	 	(c)	 	Provided that the Transition Services Vitro is obligated to
provide to the Recipient pursuant to this Agreement are not discontinued,
materially altered or reduced (except as otherwise provided and permitted
pursuant to Section 5(b) above), Vitro, at its sole discretion, may change or
substitute any third party vendor currently providing goods or services
under, or change the terms and conditions of, any Shared Contract without the
authorization of the Recipient. Vitro shall inform the Recipient as soon as
practicable of any new terms and conditions negotiated. To the extent this
subparagraph (c) conflicts with the Section 5.08 of the Purchase Agreement,
the terms of the Purchase Agreement shall control.
	 
	 	(d)	 	The Recipient may, for convenience, and for any reason and
without any penalty or Liability whatsoever except as provided below,
terminate this Agreement, or remove from Exhibit A any Transition
Service subject to this Agreement, by giving Vitro not less than 30 days
written notice specifying (i) either the termination of this Agreement or the
Transition Service(s) to be removed from Exhibit A and, therefore, to
be no longer subject to this Agreement; and (ii) the effective date of such
termination or removal of Transition Service(s). The Recipient shall be
responsible for and pay all early termination penalties, fees and similar
payments or Liabilities payable to any Vitro third party vendors, if any,
arising solely as a result of any early termination by Recipient pursuant
hereto, or its proportionate share of all such early termination penalties,
fees, and similar payments or Liabilities, if Vitro, at its discretion and
for its own convenience (subject to subparagraph (b), above), decides to
simultaneously with Recipient, terminate its obligations under the relevant
contract. The Parties shall cooperate in good faith to minimize any
termination fees associated with any termination of the a Transition Service
provided by any Vitro third party vendor. Vitro shall notify Recipient,
within 5 Business Days of Vitro’s receipt, of any early termination
notification provided by any Vitro third party vendors to Vitro. In
addition, Recipient acknowledges and agrees that the early termination of
certain Transition Services may adversely impact or result in the early
termination of other related Transition Services as reasonably determined by
Vitro (for example, the termination of IT Services would require the
termination of payroll services).
	 
	 	(e)	 	The Recipient may terminate this Agreement upon 30 days
prior written notice to Vitro if Vitro is in material breach of this
Agreement unless Vitro, within such 30 day period, remedies such breach or,
in the case of a material breach which cannot be reasonably remedied within
such period, initiates action which can reasonably be expected to result in
curing such breach within a reasonable period of time. If such breach is
cured in the period specified above and, subsequently, Vitro breaches this
Agreement in the same manner, the Recipient may terminate this Agreement upon
30 days prior written notice to Vitro, and Vitro shall not have any further
opportunity to cure. Vitro may suspend performance of

6

 

	 	 	 	all or any portion of the Transition Services upon 30 days prior written
notice if Recipient fails to pay when due any undisputed amounts to Vitro
or to third party vendors on a direct or pass through payment basis,
unless the Recipient within such 30 day period cures such payment default;
provided, however, that after any such suspension of the
provision hereunder of the Transition Services by Vitro in accordance the
foregoing the Recipient may, upon payment to Vitro of the necessary past
due amount (including payment of the Transition Services fees accrued
during the suspension period), reinstate the provision by Vitro of the
Transition Services under this Agreement. In addition to the foregoing
right to suspend the Transition Services and the right to receive interest
on past due payments as provided in Section 3(a), Vitro may terminate this
Agreement upon 30 days prior written notice to Recipient (without any
opportunity or right of Recipient to cure), if three (3) or more times
during the Term Recipient fails to pay any undisputed amounts payable to
Vitro or to any third party vendors on a direct or pass through payment
basis more than 30 days after the date such payments are due. This
Agreement may not be terminated by Vitro for any other reason and shall
continue in full force and effect notwithstanding any breach of this
Agreement by the Recipient (other than as provided in the preceding
sentence), and Vitro’s remedies in the event of any such other breach of
this Agreement by the Recipient shall be limited to claims for monetary
damages or for injunctive or other legal or equitable relief to prevent
any continuation or recurrence of any breach of this Agreement. Recipient
acknowledges and agrees that with respect to any Transition Services
provided by any Vitro vendors, the failure of Recipient to pay the fees
for such services when due may result in the suspension or termination of
such services by such vendors without any liability of Vitro therefor.
	 
	 	(f)	 	Upon the expiration or termination of this Agreement for
any reason, each of Vitro, on the one hand, and the Recipient, on the other
hand, shall return or destroy, or cause to be returned or destroyed, any and
all Confidential Information (as defined below) of the other Party in its
possession or control and, upon request, provide written certification of
compliance with this obligation to the other Party.
	 
	 	(g)	 	With respect to the Transition Services provided by the
General Manager, if Vitro determines that Cause exists for the termination of
the General Manager it shall notify Vitrocrisa in writing, and Vitro shall,
no earlier than 30 days after the date of such notice, have the right to
terminate the General Manager’s employment for Cause. If at any time
Vitrocrisa determines that it no longer requires the services of the General
Manager, then it shall notify Vitro of such election, and within the 60 day
period following such notice Vitro shall amend the General Manager’s
employment agreement so that 0% of his duties are allocated to Transition
Services or other such duties as the Acquired Companies, Purchasers or any of
their Affiliates may have determined. If during or upon the expiration of
the Term (x) Vitro terminates the General Manager in connection with his
decision to accept an offer of employment with any of the Acquired Companies,
Purchasers or their Affiliates, or (y) any of the Acquired Companies,
Purchasers or their Affiliates were to notify Vitro

7

 

	 	 	 	that the General Manager’s services are no longer required and Vitro were
to terminate the General Manager’s employment, in each case for any reason
other than for Cause, then, upon termination of the General Manager’s
employment with Vitro, Vitro shall pay the General Manager an amount equal
to the lump sum retirement benefit to which he will then be entitled under
his current retirement plan at age 60, to the extent that such benefit
shall not already have been paid in connection with his termination of
employment with the Acquired Companies or otherwise, with such amount
being actuarially reduced to the date on which such payment is made and
without duplication, all other benefits due by Law or Contract to the
General Manager. In the event of termination under clause (x) or (y)
above, then the Acquired Companies shall pay to Vitro an amount equal to
50% of the aggregate severance required by Law to be payable to the
General Manager in connection with the termination of his employment with
Vitro (with the Acquired Companies’ portion thereof not to exceed US
$500,000). If the General Manager terminates his employment for Good
Reason, Vitro shall indemnify and hold the Acquired Companies and
Purchasers harmless from and against any Loss suffered or incurred by the
Acquired Companies and Purchasers resulting or arising from such
termination for Good Reason. If the General Manager ceases to be employed
by Vitro for any reason other than that set forth in clause (x) of this
paragraph, Vitro shall use commercially reasonable efforts (but shall not
be required to expend any funds) to assist the Acquired Companies in
identifying and recruiting a replacement and Vitro shall have no further
Liability or obligation hereunder with respect to the General Manager or
his replacement. The obligations of the Acquired Companies to pay
compensation for the General Manager’s services under Section 3(a) shall
end upon the termination of the General Manager’s employment or amendment
of the General Manager’s employment agreement so that 0% of his duties are
allocated to Transition Services or other such duties as the Acquired
Companies, Purchasers or any of their Affiliates may have determined.
	 
	 	(h)	 	If the aggregate monthly fees payable for the “Vitro IT
Services” identified under “Application Support” (in each case as identified
in Annex A to Exhibit A) (the “Monthly IT Fees”) are
reduced to $226,323.21 Mexican pesos (the “Vitro IT Threshold”) as a
result of a reduction in the number of users, then upon Vitro’s request, the
Parties will negotiate in good faith appropriate adjustments to the Vitro IT
Fees to ensure that the ongoing Vitro IT Fees will be sufficient for Vitro to
be able to continue to cover its costs associated with the provision of the
Vitro IT Services; provided, however, that Vitro shall be
under no obligation to accept an adjustment to Vitro IT Fees below the Vitro
IT Threshold for the Vitro IT Services. Further, if at anytime, the
Recipient reasonably demonstrates that the Vitro IT Services specified in
Exhibit A as “Management and Administration” could be provided by a
third party on substantially the same terms and conditions as provided herein
but for less fees than those payable hereunder, then, upon providing
reasonable evidence of the foregoing to Vitro, Vitro shall adjust
prospectively its fees hereunder to match the third party quotation.

8

 

     6. Contact Persons. Each Party shall promptly appoint a management level person or
persons (who may be employed by an Affiliate of such Party) for the purpose of coordinating the
provision of Transition Services to the Recipient (the “Contact Persons”) under this
Agreement. The Contact Persons shall resolve issues that may arise under this Agreement by: (a)
coordinating management team meetings (in person or by phone) on an expedited basis to decide on an
appropriate resolution or plan of resolution of the issue; (b) implementing, on a timely basis,
such mutually agreed upon plan or resolution; and (c) taking any other steps necessary in the
Contact Persons’ reasonable judgment to resolve the issue. The initial Contact Persons for each
Party are set forth on Exhibit B.

     7. Migration From Certain Transition Services.

	 	(a)	 	The Recipient agrees that, not later than 90 days prior to
the initial expiration date of each Transition Service, as set forth in
Column 2 of Exhibit A, it shall cause the Acquired Companies to provide to
Vitro for its review and approval, a written plan to transfer or otherwise
replace such Transition Services as continue to be provided as of that date
pursuant to this Agreement (each a “Migration Plan”). The respective
Contact Persons shall meet to review the Migration Plan, which shall include,
as applicable, phases of implementation, milestones, the requested Vitro
involvement and expected costs, including the per hour rate for the use of
Vitro personnel service for inter-dependency issues, data migration issues,
and contingencies. The approval by Vitro of the Migration Plan will not be
unreasonably withheld, and Vitro will make counterproposals if the schedule
in or other provisions of any proposed Migration Plan cannot be commercially
reasonably met by Vitro based on existing Vitro resources and commitments.
Reasonable out-of-pocket expenses incurred by Vitro in connection with the
implementation of any Migration Plan, including for the avoidance of doubt
payments to Vitro vendors for services and consents or approvals directly
required to implement the Migration Plan and the payment of salaries and
fringe benefits only to the extent required by Law (“Minimum
Benefits”) for Vitro employees who work on such Migration Plan, shall be
set-out initially as a per hour rate and reimbursed by the Recipient, or any
Purchaser or Acquired Company on behalf of the Recipient. Subject to the
agreement by Vitro with such Migration Plan as set forth above, Vitro shall
prior to the expiration of any Transition Service, take all commercially
reasonable steps necessary to assist in the implementation of such Migration
Plan related to each such Transition Service. The Parties agree that Vitro
personnel are required for the Migration Plan only as a result of Vitro’s
specific knowledge and experience as former provider of services to, and
corporate affiliation with, the Acquired Companies. Therefore, Vitro’s (and
its personnel’s) involvement in the Migration Plan shall be primarily limited
to the migration activities that only Vitro personnel can perform as a result
of past services provided by Vitro and Vitro’s prior affiliation with the
Acquired Companies. For the avoidance of doubt, the Parties agree that Vitro
shall not be obligated to provide Migration Services which are general in
nature and for which there is a market of third party contractors who can
provide such services without requiring the specific knowledge possessed by
Vitro in any material respect.

9

 

	 	(b)	 	With respect to any software that is subject to the Vitro
Software License Agreement (the “SLA”), upon Recipient’s request at
any time during the term of this Agreement, Vitro shall provide reasonable
technical assistance to Recipients with respect to the technical
functionality, operating environment, interfaces and data inputs and outputs
of the Software so as to provide Recipients’ technical staff with sufficient
knowledge of such Applications, without accessing the Source Code, to
evaluate and understand such functionality in sufficient detail for Recipient
to develop and execute a Migration Plan for such Software even if Vitro has
not yet released to Recipients the Source Code for such Applications. In the
event that Recipients terminate any Transition Services relating to
Applications for which Vitro has not yet delivered Source Code pursuant to
the terms of the SLA, the Recipients shall pay to Vitro vendors for direct
services and pay the salaries and Minimum Benefits for Vitro employees, as
expressed as an hourly rate pursuant to subparagraph (a) of this Section, for
continued provision of technical support and maintenance of such
Applications, including patches, bug fixes, and Permitted Modifications as
required, until such time as the Source Code for such Application is
delivered by Vitro to Recipient and, at the request of Recipient, for a
period of up to six months thereafter. (For purposes of the foregoing, the
terms Application, Permitted Modification, Software, and Source Code shall
have the meanings set forth in the SLA.)

     8. Confidential Information.

	 	(a)	 	“Confidential Information” means (i) any financial
information provided to Vitro pursuant to Section 3(f), (ii) any information
provided by Vitro pursuant to Sections 11 or 12, and (iii) any and all
information of any kind and any format and medium that is not generally known
to the public and that: (A) is marked confidential, restricted or
proprietary; or (B) under all of the circumstances ought reasonably to be
treated as confidential and/or proprietary. Notwithstanding the foregoing,
Confidential Information does not include information that: (a) is, as of the
time of its disclosure, or thereafter becomes, part of the public domain
through a source other than the receiving Party; or (b) was known to the
receiving Party as of the time of its disclosure except for Confidential
Information of any Party known by the other Party as of the date of this
Agreement, provided, however, that information related to the
Business that would be considered Confidential Information but for the fact
that Vitro and/or its Affiliates know such information as a result of their
affiliation with the Business prior to the date of this agreement and such
information is not otherwise used in connection with the Excluded Businesses
shall be considered Confidential Information of Recipient and the Acquired
Companies; or (c) the receiving Party is required, by Law or court order, to
disclose.
	 
	 	(b)	 	Each Party shall maintain in confidence all Confidential
Information of the other Parties. Further, no Party shall use the
Confidential Information of the other Parties for any purpose not directly
related to this Agreement.

10

 

	 	(c)	 	The terms of this Section 8 will survive the
expiration or earlier termination of this Agreement for a period of five
years from the date of such expiration or termination.

     9. Indemnification.

	 	(a)	 	Vitro, at its sole cost and expense, shall indemnify and
hold harmless the Recipient, their Affiliates and their respective
Representatives from any and all Losses arising out of or resulting from any
Actions brought by or on behalf of any employees of Vitro or its Affiliates
against the Recipient, their Affiliates and their respective Representatives,
claiming any benefits or other rights available to such employees under Labor
Laws related to this Agreement. For the avoidance of doubt, all Losses
arising out of or resulting from the employment relationship of any Vitro
Entity and its employees, including the General Manager, will be the sole
responsibility of Vitro, which shall be considered the employer of such
individuals. Notwithstanding the foregoing, the parties agree that nothing
in this paragraph shall limit the Acquired Companies’ payment obligations set
forth in Section 5(g) of this Agreement.
	 
	 	(b)	 	Recipient, at its sole cost and expense, shall indemnify
and hold harmless Vitro, its Affiliates and Representatives from any and all
Losses arising out of or resulting from any Actions brought by or on behalf
of any employees of Recipient, the Acquired Companies, or their Affiliates
against the Vitro, its Affiliates and their respective Representatives,
claiming any benefits or other rights available to such employees under Labor
Laws related to this Agreement. For the avoidance of doubt, all Losses
arising out of or resulting from the employment relationship of any
Recipient, the Acquired Companies and their employees, will be the sole
responsibility of Recipient and the Acquired Companies, which shall be
considered the employer of such individuals.

     10. Information and Materials.

          (a) Except as otherwise expressly provided in this Agreement, the SLA, or in the Purchase
Agreement, as between Vitro and Recipient, the Recipient shall own and retain all right, title and
interest in and to any and all Intellectual Property rights in and to data or Confidential
Information of the Recipient and all data, software, source and object code, specifications,
designs, processes, techniques, concepts, improvements, discoveries, and inventions, including
without limitation any modifications, improvements, or derivative works thereof, created or
provided by or for the Recipient in connection with the performance of this Agreement by Vitro
except for Intellectual Property developed by Vitro for the primary benefit of the Excluded
Businesses (“Recipient Content”).

          (b) Except as otherwise expressly provided in this Agreement, the SLA, or in the Purchase
Agreement, to the extent that any Intellectual Property rights arise out of the performance of this
Agreement as between the Parties, the Recipient will own all such Recipient Content and any
deliverables created in connection with such Transition Services (and such Recipient Content shall
be deemed to be a “work-made-for-hire”). Vitro hereby assigns, and shall cause its third party
vendors, agents or contractors to assign, all of their respective right, title and

11

 

interest in and to any such Recipient Content to the Recipient to effectuate the allocation of
such rights as provided in this subsection and such assignment shall be deemed made upon the
creation of such Intellectual Property rights without need for further action of any Party. Vitro
shall, at the Recipient’s request and expense, assist the Recipient in obtaining, registering, and
recording Recipient Content rights as allocated hereunder. Such assistance shall include execution
of all documents reasonably required by the Recipient.

          (c) At any time during the Term, promptly at the Recipient’s written request, (but in no event
more than 20 days after the date of the request) Vitro shall deliver to the Recipient a true and
correct copy of any and all materials or data owned by the Recipient and in the possession of
Vitro, in such form and format as are then being used by Vitro to perform the Transition Services.

          (d) Vitro represents and warrants that it has sufficient rights in any third party materials,
properties or Contracts to provide the Transition Services as contemplated hereunder without
payment of any fees or breach of any Contract or violation of the right of third parties other than
as specifically stated in the Shared Contracts and agreed by the Parties to be the responsibility
of the Recipient. Subject to Sections 5(b), 5(c) and other applicable provisions of this
Agreement, Vitro shall maintain in effect during the Term any such rights as are required to
provide the Transition Services at its own expense except as any such costs are incorporated into
and are part of the fees payable by the Recipient pursuant to Section 3 or other applicable
provisions of this Agreement.

     11. Audits and Inspections.

          (a) Performance Audit. Vitro will provide to Libbey Inc. (“Libbey”) or the
Recipient (or Vitrocrisa on the Recipient’s behalf), their internal and external auditors
(“Libbey’s auditors”), and such other Representatives as Libbey or the Recipient may from time to
time designate, reasonable access to Vitro’s internal and external auditors (“Vitro’s auditors”)
and other personnel and data, and to any third-party (such as E.D.S.) rendering services to Vitro
for the benefit of the Acquired Companies (to the extent agreed by such third-parties), for the
purpose of enabling Libbey’s auditors, at the sole cost and expense of Libbey or the Recipient, to
perform audits, inspections and tests of the effectiveness of Vitro’s logical and physical security
and data protection controls relating to the Transition Services, as more particularly described in
attached Exhibit C. Vitro’s obligation to provide such access to Libbey or the Recipient
(and Libbey’s auditors) is subject to the following:

       (i) Libbey, the Recipient and Libbey’s auditors shall be entitled only to such access
as is reasonably necessary in order for Libbey to (A) obtain the unqualified opinion of
Libbey’s external auditors in connection with the audit of Libbey’s consolidated financial
statements and/or internal controls (whether such audit is required pursuant to applicable
U.S. securities Laws or any agreement to which Libbey or Libbey Glass Inc. is a party which
requires that such audit comply with such Laws) and (B) file such certifications of Libbey
or its executives as Libbey is required by applicable Laws to file with the U.S. Securities
and Exchange Commission with respect to Libbey’s financial statements and internal controls;

       (ii) Vitro shall not be required to provide any proprietary or other confidential
information to Libbey’s auditors until such time as Vitro has received from Libbey’s
auditors an executed confidentiality agreement in commercially reasonable form;

12

 

       (iii) Prior to performing any independent audits, inspections or tests pursuant to this
Section 11, Libbey’s auditors shall consult with Vitro’s auditors to determine whether
Vitro’s auditors have performed such audits, inspections and/or tests and, if so, the scope
of such audits, inspections and/or tests and results thereof. If (A) Vitro’s auditors have
not performed such audits, inspections and/or tests or (B) Libbey’s auditors are not, in the
exercise of their professional judgment, satisfied with the scope or results of such audits,
inspections or tests, Libbey’s auditors shall advise Vitro’s auditors of any additional
inspection or testing that Libbey’s auditors require, and such inspection or testing shall
be performed by Vitro’s auditors, at the sole cost and expense of Libbey. If, after such
additional inspection or testing, Libbey’s auditors require access to Vitro’s personnel or
to data or records for purposes of the audits, inspections or testing contemplated by this
Section 11(a), then Vitro will, within a reasonable period of time after receipt of written
request from Libbey or Libbey’s auditors, furnish to Libbey’s auditors access to such
personnel, data or records at reasonable times during normal working hours, without undue
disruption to Vitro’s day-to-day operations, and Libbey’s auditors will perform such
inspections, audits or testing as expeditiously as possible. Libbey agrees to provide Vitro
copies of all reports or results of such audits, inspections or tests upon request, and
Libbey agrees that all such reports or results are subject to the provisions of Section 8
above;

       (iv) Vitro shall not be obligated to provide to Libbey, the Recipient or Libbey’s
auditors any information or access (A) with respect to which Vitro owes a contractual duty
of confidentiality to an unrelated third party (provided, however, that Vitro shall use
commercially reasonable efforts to obtain such third party’s consent to the disclosure of
such information to Libbey’s auditors solely for purposes of enabling Libbey’s auditors to
issue the unqualified audit opinion contemplated in this Section 11(a)) or (B) that relates
to the business and operations of other Vitro Entities and does not relate to the business
of the Acquired Companies; and

       (v) While on Vitro’s premises, Libbey’s auditors or other Representatives shall adhere
to Vitro’s corporate security and safety policies.

          (b) Cooperation with Audit. Subject to the conditions in paragraph (a) above, Vitro
shall assist the Libbey or the Recipient (or Vitrocrisa on the Recipient’s behalf) and/or their
representatives during the Term as is reasonably required including, but not limited to, making
available all books, records, and documents relevant to such audit in Vitro’s or any of its
Affiliates’ possession. Vitro shall reasonably cooperate with Libbey or the Recipient and/or their
designees in connection with audit functions and with regard to examinations by any Governmental
Authority during the Term. Recipient will reimburse Vitro for the reasonable costs and expenses
incurred by it in complying with this Section 11. Vitro agrees to use commercially reasonable
efforts to remedy any significant deficiency identified during the course of any audit that the
Libbey auditors identify as a significant deficiency with respect to Libbey’s audited financial
statements or internal controls.

          (c) Follow-Up Audits. If any audit conducted by Libbey, the Recipient or Libbey’s
auditors pursuant to this Section 11 reveals significant deficiencies in connection with any
audited items, Libbey or the Recipient (or Vitrocrisa on the Recipient’s behalf) and Libbey’s
auditors shall be entitled to conduct follow-up audits during the Term not more often than twice
during the period ending December 31, 2006 and once every three months thereafter until such time
as such significant deficiencies are determined to have been remediated and no additional
significant deficiencies are identified.

13

 

     12. Force Majeure.

	 	(a)	 	An event of “Force Majeure” shall mean an event or
circumstance that prevents, impacts or delays the affected Party from
performing its obligations under this Agreement if such event or circumstance
is beyond the reasonable control of and not due to the fault of the affected
Party, including, without limitation, acts of God (e.g., earthquake, flood,
hurricane, tornado, and other severe weather conditions); strikes or other
labor disturbance; acts of third parties, including suppliers and vendors;
acts of a public enemy; civil or military conflicts or commotions, unrest, or
disturbance; and compliance with an order of a governmental authority. The
mere inability to meet a payment obligation as a result of insufficient funds
shall not constitute an event of Force Majeure, but an inability to meet a
payment obligation as a result of an event or circumstance that results in
the closure of financial institutions generally or the closure of the Party’s
financial institutions specifically and that prevents or delays the
transmission of funds to the other Party shall constitute an event of Force
Majeure.
	 
	 	(b)	 	If either Party is rendered wholly or partly unable to
perform its obligations under this Agreement because of a Force Majeure
event, that Party will be excused from whatever performance is affected by
the Force Majeure event to the extent so affected; provided, that: (i) the
non-performing Party, as soon as reasonably possible after knowing of the
occurrence of the Force Majeure event, gives the other Party written notice
describing the particulars of the occurrence; (ii) the suspension of
performance is of no greater scope and of no longer duration than is
reasonably required by the Force Majeure event; (iii) the non-performing
Party uses reasonable efforts to overcome or mitigate the effects of such
occurrence; and (iv) when the non-performing Party is able to resume
performance of its obligations hereunder, that Party shall give the other
Party written notice to that effect and shall promptly resume such
performance.

     13. Miscellaneous.

	 	(a)	 	Access. Upon reasonable notice, and only to the
extent reasonably required for Vitro to perform the Transition Services, the
Recipient shall provide the Vitro personnel with access to the equipment,
office space, manufacturing facilities and telecommunications and computer
equipment and systems used in the Business. Access, if any, to the
Recipient’s premises and/or systems is granted solely to facilitate the
provision of the Transition Services. Access, if any, to the foregoing is
limited to those specific premises and/or systems, time periods and personnel
as are agreed to by the Recipient, which agreement shall not be unreasonably
withheld. Use of any other of the Recipient’s premises or systems is
expressly prohibited. This prohibition applies even when the premises or
systems which Vitro are authorized to access serve as a gateway to other
premises or systems outside the scope of Vitro’s authorization. In the event
that access to the Recipient’s premises or system is reasonably required to
perform services and such access is denied, then Vitro shall have no
obligation to provide services to the extent it cannot perform

14

 

	 	 	 	such services due to the denial of such access. When accessing the
Recipient’s premises or systems in connection herewith, the personnel
accessing such premises or systems shall comply with all policies and
procedures applicable to the use of such premises and systems including,
but not limited to, health, safety and security policies and procedures.
	 
	 	(b)	 	Relationship of the Parties. It is expressly
understood and agreed that in rendering the Transition Services hereunder,
Vitro is acting as independent contractor and that this Agreement does not
constitute any Party (or any Representative of a Party) as an employee, agent
or other representative of any other Party for any purpose whatsoever.
Notwithstanding Section 11.13 of the Purchase Agreement, no Party has
the right or authority to enter into any Contract, warranty, guarantee or
other undertaking in the name or for the account of any other Party, or to
assume or create any obligation or liability of any kind, expressed or
implied, on behalf of any other Party, or to bind any other Party in any
manner whatsoever, or to hold itself out as having any right, power or
authority to create any such obligation or liability on behalf of any other
or to bind any other Party in any manner whatsoever.
	 
	 	(c)	 	Nonwaiver. Failure to insist in any instance upon
strict performance of any provisions of this Agreement or to enforce any
right hereunder will not be construed as a waiver of any such provision or
any other provision of this Agreement or the relinquishment of any such right
or any other right but the same will continue in full force and effect.
	 
	 	(d)	 	Headings. The headings used in this Agreement are
intended for convenience only. They are not a part of the written
understanding between the Parties, and they shall not affect the construction
and interpretation of this Agreement
	 
	 	(e)	 	Survival. The provisions of Sections 5(g)
(Return of Confidential Information upon Termination), 8
(Confidential Information), 9 (Indemnification), 10
(Information and Materials) and 13 (Miscellaneous) shall survive any
expiration or termination of this Agreement.
	 
	 	(f)	 	Incorporation by Reference. The provisions of
Sections 11.04 (Severability), 11.05 (Entire Agreement), 11.06 (Assignment),
11.07 (Amendment), 11.08 (Waiver), 11.11 (Governing Law; Agent for Service of
Process), 11.12 (Waiver of Jury Trial), 11.14 (Specific Performance) and
11.15 (Counterparts) of the Purchase Agreement shall be incorporated into
this Agreement, mutatis mutandis, as if references to “this Agreement” in the
Purchase Agreement were references to “this Agreement” in this Agreement.

[remainder of page intentionally left blank; signatures appear on following page(s)]

15

 

     IN WITNESS WHEREOF, Acquired Companies and Vitro have caused this Agreement to be executed as
of the date first written above by their respective officers thereunto duly authorized.

	 	 	 	 	 	 	 
	RECIPIENT:
	 	VITRO:
	 
	 	 	 	 	 	 
	Crisa Libbey S.A. de C.V.
	 	Vitro Corporotivo, S.A. de C.V.
	 
	 	 	 	 	 	 
	By:

	 	/s/ Roberto Rubio
	 	By:
	 	/s/ Roberto Colomé
	 

	 	 
	 	
	 	 
	 

	 	Name: Roberto Rubio

Title: Attorney-in-Fact
	 	
	 	Name: Roberto Colomé

Title: Attorney-in-Fact
	 
	 	 	 	 	 	 
	Vitrocrisa Holding, S. de R.L. de C.V.
	 	 
	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Roberto Rubio	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name: Roberto Rubio

Title: Attorney-in-Fact	 	 	 	 
	 
	 	 	 	 	 	 
	Vitrocrisa S. de R.L. de C.V.
	 	 
	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Roberto Rubio	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:

Title: Attorney-in-Fact	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ José Antonio Pérez	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name: José Antonio Pérez

Title: Attorney-in-Fact	 	 	 	 
	 
	 	 	 	 	 	 
	Vitrocrisa Comercial, S. de R.L. de C.V.,
	 	 
	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Roberto Rubio	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name: Roberto Rubio

Title: Attorney-in-Fact	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ José Antonio Pérez	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name: José Antonio Pérez

Title: Attorney-in-Fact	 	 	 	 
	 
	 	 	 	 	 	 
	Crisa Industrial, L.L.C.
	 	 
	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Roberto Rubio	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name: Roberto Rubio 

Title: Authorized Signatory	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ José Antonio Pérez	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name: José Antonio Pérez 

Title: Authorized Signatory	 	 	 	 

[Signature Page to the Transition Services Agreement]

16

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