Document:

exhibit_10-4.htm

     

    
      
        

      

EXHIBIT 10.4

    

     

    AMENDED AND RESTATED
INTERCREDITOR AGREEMENT

     

     

    This
AMENDED AND RESTATED
INTERCREDITOR AGREEMENT is dated as of October 15, 2009 (as amended,
restated, renewed, extended, supplemented or otherwise modified from time to
time, this “Agreement”),
and entered into by and among SOLUTIA INC., a Delaware corporation (the “Company”), each of the
Company’s Subsidiaries party hereto from time to time and CITIBANK, N.A. (“Citi”), in its capacity as
administrative agent for the holders of the Term Loan Obligations (as defined
below) (together with its successors in such capacity, the “Term Loan Administrative
Agent”), and as collateral agent for the holders of the Term Loan
Obligations (together with its successors in such capacity, the “Term Loan Collateral Agent”),
Citi, in its capacity as administrative agent for the holders of the Revolving
Credit Obligations (as defined below) (together with its successors in such
capacity, the “Revolving Credit
Facility Administrative Agent”), and as collateral agent for the holders
of the Revolving Credit Obligations (together with its successors in such
capacity, the “Revolving Credit
Facility Collateral Agent”), and each other Additional Pari Passu Debt
Representative (as defined below) from time to time party
hereto.  Capitalized terms used but not otherwise defined herein shall
have the meanings assigned to them in Section 1 below.

     

     

    RECITALS

     

     

    The
Company, the Term Loan Lenders, the Term Loan Administrative Agent, the Term
Loan Collateral Agent, GOLDMAN SACHS CREDIT PARTNERS L.P. (“GSCP”), as syndication agent,
DEUTSCHE BANK AG NEW YORK BRANCH (“DBNY”), as documentation
agent, and CITIGROUP GLOBAL MARKETS INC. (“CGMI”), GSCP and DEUTSCHE BANK
SECURITIES INC. (“DBSI”), as joint lead
arrangers and bookrunners, are parties to that certain Credit Agreement, dated
as of February 28, 2008, providing a term loan facility to the Company (as
amended, restated, supplemented, modified, replaced or refinanced from time to
time, the “Term Loan
Agreement”) ; provided that if any
agreement or instrument refinancing or replacing the Term Loan Agreement
expressly provides that it is not intended to be and is not a refinancing or
renewal of the Term Loan Agreement then it shall be deemed not to be a “Term
Loan Agreement”);

     

     

    The
Revolving Credit Facility Borrowers, the Revolving Credit Lenders, the Revolving
Credit Facility Administrative Agent, the Revolving Credit Facility Collateral
Agent, CITIBANK INTERNATIONAL PLC, as European collateral agent, DBNY, as
syndication agent, GSCP, as documentation agent, and CGMI, DBSI and GSCP, as
joint lead arrangers and bookrunners, are parties to that certain Credit
Agreement, dated as of dated as of February 28, 2008, providing a revolving
credit and letter of credit facility to the Revolving Credit Facility Borrowers
(as amended, restated, supplemented, modified, replaced or refinanced from time
to time, the “Revolving Credit
Agreement”); provided that if any
agreement or instrument refinancing or replacing the Revolving Credit Agreement
expressly provides that it is not intended to be and is not a refinancing or
renewal of the Revolving Credit Agreement then it shall be deemed not to be a
“Revolving Credit Agreement”);

     

     

    In order
to induce the Revolving Credit Facility Administrative Agent, the Revolving
Credit Facility Collateral Agent, the Revolving Credit Lenders and the other
parties to the Revolving Credit Agreement to enter into the Revolving Credit
Agreement, and in order to induce the Term Loan Administrative Agent, the Term
Loan Collateral Agent and the Term Loan Lenders to enter into the Term Loan
Agreement, the Revolving Credit Facility Collateral Agent, the parties hereto
have previously entered into an Intercreditor Agreement dated as of February 28,
2008 (the “Original
Intercreditor Agreement”) establishing the relative priority of their
respective Liens on the Collateral and governing their respective rights with
respect thereto;

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Pursuant
to (i) the Term Loan Agreement, the Term Loan Subsidiary Guarantors have
guaranteed the Term Loan Obligations and the Company has agreed to cause certain
future Subsidiaries to guaranty the Term Loan Obligations, and (ii) the
Revolving Credit Agreement, the Revolving Credit Facility Subsidiary Guarantors
have guaranteed the Revolving Credit Obligations and the Revolving Credit
Facility Borrowers have agreed to cause certain future Subsidiaries to guaranty
the Revolving Credit Obligations;

     

     

    The Term
Loan Agreement and the Revolving Credit Agreement are being amended pursuant to
a certain First Amendment to Credit Agreement of even date herewith and a Second
Amendment to Credit Agreement of even date herewith, respectively, in each case
in order to, among other things, allow the Company and its Subsidiaries to incur
additional Indebtedness secured by liens pari passu in priority with the Liens
securing the Term Loan Obligations and the Company may from time to time
following the date hereof issue such Additional Pari Passu Debt in accordance
with the aforesaid amendments;

     

     

    To the
extent permitted by each of Term Loan Agreement and the Revolving Credit
Agreement and any Additional Pari Passu Loan Agreement, each of the Company’s
Subsidiaries party hereto from time to time agree, if so required under any
Additional Pari Passu Credit Documents (and if permitted by the Term Loan
Agreement and the Revolving Credit Agreement), shall guarantee such Additional
Pari Passu Obligations and the Company shall cause, if required under any
Additional Pari Passu Credit Documents, certain future Subsidiaries to guaranty
such Additional Pari Passu Obligations; and

     

     

    In order
to induce any Additional Pari Passu Debt Representative and any Additional Pari
Passu Lenders to enter into the applicable Additional Pari Passu Loan Agreement,
the Revolving Credit Facility Administrative Agent, the Term Loan Collateral
Agent and the Term Loan Administrative Agent have agreed to amend and restate
the Original Intercreditor Agreement in accordance with the terms and conditions
set forth herein.

     

     

    AGREEMENT

     

     

    In
consideration of the foregoing, the mutual covenants and obligations herein set
forth and for other good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby amend and restate the Original Intercreditor Agreement in its
entirety and further agree as follows:

     

     

    SECTION
1.  Definitions.

     

     

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

     

     

    “Access Acceptance Notice” has
the meaning assigned to that term in Section 3.3(b).

     

     

    “Access Period” means, for each
parcel of Mortgaged Premises, the period, after the commencement of an
Enforcement Period, which begins on the day that the Revolving Credit Facility
Administrative Agent or the Revolving Credit Facility Collateral Agent provides
the Term Loan Collateral Agent and any Additional Pari Passu Debt Representative
with the notice of its election to request access to any Mortgaged Premises
pursuant to Section 3.3(b) below and ends on the earlier of (i) the 150th day
after the Revolving Credit Facility Collateral Agent obtains the ability to use,
take physical possession of, remove or otherwise control the use or access to
the Current Asset Collateral located on such Mortgaged Premises following a
Collateral Enforcement Action plus such number of days, if any,

     

    
      
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    after the
Revolving Credit Facility Collateral Agent obtains access to such Current Asset
Collateral that it is stayed or otherwise prohibited by law or court order from
exercising remedies with respect to Current Asset Collateral located on such
Mortgaged Premises, (ii) the date on which all or substantially all of the
Current Asset Collateral located on such Mortgaged Premises is sold, collected
or liquidated, (iii) the date on which the Discharge of Revolving Credit
Obligations occurs or (iv) the date on which the Revolving Credit Facility
Default, the Term Loan Default or the Additional Pari Passu Loan Default that
was the subject of the applicable Enforcement Notice relating to such
Enforcement Period has been cured to the satisfaction of the Revolving Credit
Facility Collateral Agent (in the case of a Revolving Credit Facility Default),
the Term Loan Collateral Agent (in the case of a Term Loan Default) or
Additional Pari Passu Debt Representatives (in the case of Additional Pari Passu
Loan Defaults), or waived in writing in accordance with the requirements of the
applicable Credit Agreement.

     

     

    “Account Agreements” means any
lockbox agreement, pledged account agreement, blocked account agreement, deposit
account control agreement, securities account control agreement, or any similar
deposit or securities account agreements among any Agents and any Grantors and
the relevant financial institution depository or securities
intermediary.

     

     

    “Additional Joinder Agreement”
shall mean a joinder agreement in the form of Exhibit B hereto.

     

     

    “Additional Pari Passu Approved
Counterparty” means the counterparty to an Additional Pari Passu Debt
Hedging Agreement entered into by the Company or any Additional Pari Passu
Subsidiary Guarantor.

     

     

    “Additional Pari Passu
Claimholder” means, at any relevant time, the holders of Additional Pari
Passu Obligations at that time, including the Additional Pari Passu Lenders, the
agents (including any Additional Pari Passu Debt Representative), trustees or
representatives under the Additional Pari Passu Loan Agreement and any
Additional Pari Passu Approved Counterparty.

     

     

    “Additional Pari Passu
Collateral” means all of the assets and property of any Grantor, whether
real, personal or mixed, with respect to which a Lien is granted or purported to
be granted under any Additional Pari Passu Security Documents as security for
any Additional Pari Passu Obligations.

     

     

    “Additional Pari Passu Credit
Documents” means an Additional Pari Passu Loan Agreement, each Additional
Pari Passu Debt Hedging Agreement, and the other “Loan Documents”, “Credit
Documents” (or similar term as may be defined in such Applicable Pari Passu Loan
Agreement), and each of the other agreements, documents and instruments
providing for or evidencing any other applicable Additional Pari Passu
Obligations, and any other document or instrument executed or delivered at any
time in connection with such applicable Additional Pari Passu Obligations,
including any intercreditor or joinder agreement among holders of such
Additional Pari Passu Obligations, to the extent such are effective at the
relevant time, as each may be amended, restated, supplemented, modified,
renewed, increased, replaced, extended or Refinanced from time to time in
accordance with the provisions of this Agreement.

     

     

    “Additional Pari Passu Debt Hedging
Agreement” means any Hedging Agreement (as defined in the Term Loan
Agreement) or similar agreement or instrument serving a like function, as may be
defined and permitted under the applicable Additional Pari Passu Debt Loan
Agreement.

     

     

    “Additional Pari Passu Debt
Representative” means each Person appointed to act as collateral agent,
administrative agent, trustee or representative (or in any similar
representative capacity)

     

    
      
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    for the
holders of Additional Pari Passu Obligations pursuant to any Additional Pari
Passu Loan Agreement (including any successors and assigns from time to
time).

     

     

    “Additional Pari Passu Lender”
means the lenders, investors or noteholders under and as defined in any
Additional Pari Passu Loan Agreement and any other holders of Indebtedness under
any Additional Pari Passu Loan Agreement.

     

     

    “Additional Pari Passu Loan
Agreement” means the indenture, loan agreement, credit agreement, note
purchase agreement or other agreement or instrument (as may be amended,
restated, supplemented, modified, replaced or refinanced from time to time)
under which any Additional Term Loan Pari Passu Obligations are
incurred.

     

     

    “Additional Pari Passu Loan
Default” means an “Event of Default” as defined in any applicable
Additional Pari Passu Loan Agreement, or any other event, circumstance or
condition that permits the holder thereof to accelerate the obligations of the
Company thereunder or to exercise remedies in connection therewith.

     

     

    “Additional Pari Passu
Mortgages” means a collective reference to each mortgage, deed of trust
or other document or instrument under which any Lien under any Real Estate Asset
owned by any Grantor is granted to secure any Additional Pari Passu Obligations
or under which rights or remedies with respect to any such Liens are
governed.

     

     

    “Additional Pari Passu
Obligations” means collectively (a) the loans made, notes issued or
indebtedness otherwise incurred under any Additional Term Loan Pari Passu Loan
Agreement, and all other amounts, obligations, covenants and duties owing by the
Company and any Additional Pari Passu Subsidiary Guarantors to any Additional
Pari Passu Debt Representative, any Additional Pari Passu Lender, any Affiliate
of any of them or any indemnitee thereunder, of every type and description
(whether by reason of an extension of credit, loan, guaranty, indemnification or
otherwise), present or future, arising under such Additional Pari Passu Loan
Agreement or any such other Additional Pari Passu Credit Document, whether
direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired and whether or not evidenced by any note, guaranty or other instrument
or for the payment of money, including all fees, interest (including interest
accruing after the maturity of the loans under such Additional Pari Passu Loan
Agreement and Post-Petition Interest), charges, expenses, attorneys’ fees and
disbursements and other sums chargeable to the Company or any Additional Pari
Passu Subsidiary Guarantor under the applicable Additional Pari Passu Loan
Agreement or any other applicable Additional Pari Passu Credit Document and (b)
the due and punctual payment and performance of all obligations of the Company
and Additional Pari Passu Subsidiary Guarantors under each Additional Pari Passu
Debt Hedging Agreement; provided that such
obligations shall be Additional Pari Passu Obligations hereunder only to the
extent (a) at the time such obligations are incurred, such obligations are not
prohibited from being incurred and secured by Liens on Collateral with the
priority as set forth herein for such Additional Pari Passu Obligations by the
terms of, and do not violate any terms and conditions of, the Revolving Credit
Facility Credit Documents and the Term Loan Credit Documents, (b) the Grantors
have granted Liens on any of the Collateral to secure such obligations, (c) such
obligations have been designated as “Additional Pari Passu Obligations” by the
Company in writing to the Revolving Credit Facility Agent and to the Term Loan
Collateral Agent, and each of such Persons shall have received copies of the
applicable Additional Pari Passu Loan Agreements, and (d) the Additional Pari
Passu Debt Representative, for the holders of such obligations is a party to
this Agreement or has entered into an Additional Joinder Agreement on behalf of
the Additional Pari Passu Claimholders under such agreement acknowledging that
such holders shall be bound by the terms hereof applicable to Additional Pari
Passu Claimholders.

     

    
      
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    Notwithstanding
the foregoing, if the aggregate amount of Indebtedness constituting principal
outstanding under all Additional Pari Passu Loan Agreements and all other
Additional Pari Passu Credit Documents (other than Indebtedness in respect of
Additional Pari Passu Debt Hedging Agreements), when added to the then
outstanding principal balance of the Term Loans, exceeds $1.45 billion, then
only that amount of such Indebtedness which, when added to the then outstanding
principal balance of the Term Loan Obligations equals $1.45 billion (together
with interest, fees, expenses and indemnification obligations with respect
thereto), plus obligations in respect of the Additional Pari Passu Debt Hedging
Agreement shall constitute Additional Pari Passu Obligations for purposes of
this Agreement; provided that
notwithstanding the foregoing, “Additional Pari Passu Obligations” shall
include, if applicable, Indebtedness pursuant to a DIP Financing to the extent
permitted pursuant to Section 6.1(b).

     

     

    “Additional Pari Passu Security
Documents” means any agreement, document or instrument pursuant to which
a Lien is granted or purported to be granted to secure any Additional Pari Passu
Obligations or under which rights or remedies with respect to such Liens are
governed.

     

     

    “Additional Pari Passu Subsidiary
Guarantors” means a Restricted Subsidiary of the Company that is a
“guarantor” under an applicable Additional Pari Passu Credit Documents or is
otherwise liable the obligations of the Company thereunder or which provides
credit support thereunder.

     

     

    “Affiliate” of any Person means
any other Person which, directly or indirectly through one or more
intermediaries, Controls, is Controlled by or is under common Control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan).

     

     

    “Agents” means the Revolving
Credit Facility Collateral Agent, the Term Loan Collateral Agent, each
Additional Pari Passu Debt Representative and the Designated Fixed Asset
Collateral Representative.

     

     

    “Agreement” has the meaning
assigned to that term in the preamble hereto.

     

     

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

     

     

    “Bankruptcy Law” means each of
the Bankruptcy Code, any similar federal, state or foreign laws, rules or
regulations for the relief of debtors or any reorganization, insolvency,
moratorium or assignment for the benefit of creditors or any other marshalling
of the assets and liabilities of any Person and any similar laws, rules or
regulations relating to or affecting the enforcement of creditors’ rights
generally.

     

     

    “Books and Records” means all
instruments, files, records, ledger sheets and documents evidencing, covering or
relating to any of the Collateral.

     

     

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

     

     

    “Capital Stock” means any and
all shares, interests, participations or other equivalents (however designated)
of capital stock of a corporation, any and all equivalent ownership interests in
a Person (other than a corporation), including partnership interests, membership
interests in a limited liability company and beneficial interests in a trust,
and any and all warrants, rights or options to purchase or other arrangements or
rights to acquire any of the foregoing.

     

    
      
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    “Cash Management Document”
means any certificate, agreement or other document executed by any Revolving
Credit Facility Borrower or any Revolving Credit Facility Subsidiary Guarantor
in respect of the Cash Management Obligations of such Revolving Credit Facility
Borrower or Revolving Credit Facility Subsidiary Guarantor.

     

     

    “Cash Management Obligation”
means, as applied to any Person, any direct or indirect liability, contingent or
otherwise, of such Person in respect of cash management services (including
treasury, depository, overdraft, credit or debit card, electronic funds transfer
and other cash management arrangements) provided by any Revolving Credit
Facility Approved Counterparty (regardless of whether these or similar services
were provided prior to the date hereof by such Revolving Credit Facility
Approved Counterparty), including obligations for the payment of fees, interest,
charges, expenses, attorneys’ fees and disbursements in connection
therewith.

     

     

    “CGMI” has the meaning assigned
to that term in the Recitals to this Agreement.

     

     

    “Chattel Paper” means all
present and future “chattel paper” (as defined in Article 9 of the
UCC).

     

     

    “Citi” has the meaning assigned
to that term in the preamble to this Agreement.

     

     

    “Claimholder” means,
collectively, the Revolving Credit Claimholders, the Term Loan Claimholders and
the Additional Pari Passu Claimholders.

     

     

    “Collateral” means all of the
assets and property of any Grantor, whether real, personal or mixed, now owned
or hereafter acquired, constituting both Revolving Credit Facility Grantor
Collateral and either Term Loan Collateral or Additional Pari Passu Collateral,
or both.

     

     

    “Collateral Enforcement Action”
means, collectively or individually for one or more of the Agents, when a
Revolving Credit Facility Default, Term Loan Default or Additional Pari Passu
Loan Default, as the case may be, has occurred and is continuing, whether or not
in consultation with any other Agent, to repossess or join any Person in
repossessing, or exercise or join any Person in exercising, or institute or
maintain or participate in any action or proceeding with respect to, any
remedies with respect to any Collateral or commence the judicial enforcement of
any of the rights and remedies under the Revolving Credit Facility Credit
Documents, the Term Loan Credit Documents, the applicable Additional Pari Passu
Credit Documents or under any applicable law, but in all cases (i) including (a)
instituting or maintaining, or joining any Person in instituting or maintaining,
any enforcement, contest, protest, attachment, collection, execution, levy or
foreclosure action or proceeding with respect to any Collateral, whether under
any Credit Document or otherwise, (b) exercising any right of set-off with
respect to any Grantor, (c) the collection and application of, or the delivery
of any activation notice with respect to, accounts or other monies deposited
from time to time in Deposit Accounts or Securities Accounts or otherwise
exercising any right or remedy under any Account Agreement with respect to
Deposit Accounts or Securities Accounts, (d) exercising any right or remedy
under any landlord access agreement, landlord waiver, bailee letter or similar
agreement or arrangement or (e) causing (or, after the occurrence and during the
continuance of any Event of Default, consenting to or requesting) any sale or
other disposition of any Collateral and (ii) excluding the imposition of a
default rate or late fee, in each case in accordance with the terms of the
Revolving Credit Facility Credit Documents, the Term Loan Credit Documents or
the applicable Additional Pari Passu Credit Documents; provided that
notwithstanding anything to the contrary in the foregoing, the exercise of
rights or remedies by the Revolving Credit Facility Collateral Agent under any
Account Agreement with respect to a Deposit Account or a Securities Account or
the notification of account debtors, in each case, during a “Liquidity Event
Period (Borrowing Base)”, “Liquidity Event Period (Cash Dominion)”, “Liquidity
Event Period (Fixed Charge Coverage Ratio)” or

     

    
      
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    “Liquidity
Event Period (European Notification)” (each, as defined in the Revolving Credit
Agreement) shall not constitute a Collateral Enforcement Action under this
Agreement.

     

     

    “Common Collateral” means all
Collateral which also constitutes Additional Pari Passu Collateral; provided that if more
than one Series of Additional Pari Passu Obligations are outstanding at any time
and the holders of less than all Series of Additional Pari Passu Obligations
hold a valid and perfected Lien on any Additional Pari Passu Collateral at such
time, then such Additional Pari Passu Collateral shall constitute Common
Collateral only for those Series of Additional Pari Passu Obligations that hold
a valid Lien on such Additional Pari Passu Collateral at such time and shall not
constitute Common Collateral for any Series which does not have a valid and
perfected Lien on such Additional Pari Passu Collateral at such
time.

     

     

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

     

     

    “Contingent Obligations” means
at any time, any indemnification or other similar contingent obligations which
are not then due and owing at the time of determination.

     

     

    “Control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person whether by ownership of voting securities,
by con-tract or otherwise, and the terms “Controlling” and “Controlled” shall have
meanings correlative thereto.

     

     

    “Copyrights” means all U.S. and
foreign copyrights (whether registered or unregistered and whether published or
unpublished) and all mask works (as such term is defined in 17 U.S.C. Section
901, et seq.), together with any and all (i) registrations and applications
therefor, (ii) rights and privileges arising under applicable law with respect
thereto, (iii) renewals and extensions thereof, (iv) income, fees, royalties,
damages, claims and payments now or hereafter due and/or payable with respect
thereto, including damage awards and payments for past, present or future
infringements or other violations thereof, (v) rights corresponding thereto
throughout the world and (vi) rights to sue for past, present or future
infringements thereof.

     

     

    “Credit Agreements” means,
collectively, the Term Loan Agreement, the Revolving Credit Agreement and all
Additional Pari Passu Loan Agreements.

     

     

    “Credit Documents” means,
collectively, the Revolving Credit Facility Credit Documents, the Term Loan
Facility Credit Documents and the Additional Pari Passu Credit
Documents.

     

     

    “Current Asset Collateral”
means all Collateral consisting of:  (a) accounts, other than “payment
intangibles” (as defined in Article 9 of the UCC) which constitute identifiable
proceeds of Fixed Asset Collateral; (b) all Inventory or documents of title for
any Inventory; (c) Deposit Accounts, Securities Accounts, Instruments (solely to
the extent constituting or evidencing obligations owing on Accounts and
excluding Intercompany Notes) and Chattel Paper (solely to the extent
constituting or evidencing obligations owing on accounts); (d) Current Asset
General Intangibles; (e) any credit insurance policy maintained with respect to
accounts of any Grantor; (f) Records, Letters of Credit, Letter of Credit
Rights, “supporting obligations” (as defined in Article 9 of the UCC),
commercial tort claims or other claims and causes of action, in each case, to
the extent related primarily to any of the foregoing; and (g) substitutions,
replacements, accessions, products and proceeds (including insurance proceeds,
licenses, royalties, income, payments, claims, damages and proceeds of suit) of
any or all of the foregoing; provided that to the
extent that identifiable Proceeds (including Instruments and Chattel Paper) of
Fixed Asset Collateral are deposited or held in any Deposit Accounts or
Securities Accounts that constitute Current Asset Collateral after an
Enforcement Notice, then (as provided in Section 3.5 below) such

     

    
      
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    Collateral
or other identifiable Proceeds shall be treated as Fixed Asset Collateral for
purposes of this Agreement.

     

     

    “Current Asset General
Intangibles” means all General Intangibles arising out of the other items
of property included within clauses (a), (b), (c) and (e) of the definition of
Current Asset Collateral, including all contingent rights with respect to
warranties on Inventory or accounts which are not yet “payment intangibles” (as
defined in Article 9 of the UCC).

     

     

    “DBNY” has the meaning assigned
to that term in the Recitals to this Agreement.

     

     

    “DBSI” has the meaning assigned
to that term in the Recitals to this Agreement.

     

     

    “Deposit Accounts” means,
collectively, (i) all “deposit accounts” (as defined in Article 9 of the UCC)
and all accounts and sub-accounts relating to any of the foregoing accounts and
(ii) all cash, funds, checks, notes and instruments from time to time held in or
on deposit in any of the accounts or sub-accounts described in clause (i) of
this definition.

     

     

    “Designated Fixed Asset Collateral
Representative” means, as of the date of this Agreement and for so long
as any Obligations under the Term Loan Agreement remain outstanding, the Term
Loan Collateral Agent, and at any time following the Discharge of Term Loan
Obligations, such Person as is designated as the “Designated Fixed Asset
Collateral Representative” by the Additional Pari Passu Claimholders holding a
majority of the aggregate Additional Pari Passu Obligations outstanding at any
given time.

     

     

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

     

     

    “Discharge of Additional Pari Passu
Obligations” means, except to the extent otherwise expressly provided in
Section 5.5:

     

     

    (a)
payment in full in cash of the principal of and interest (including
Post-Petition Interest), on all Indebtedness outstanding under all Additional
Pari Passu Credit Documents and constituting Additional Pari Passu Obligations
secured by such Collateral (including any Refinancings of any thereof to the
extent such Refinancings thereof constitute Additional Pari Passu
Obligations);

     

     

    (b)
payment in full in cash of all other Additional Pari Passu Obligations that are
due and payable or otherwise accrued and owing at or prior to the time such
principal and interest are paid (other than any indemnification obligations for
which no claim or demand for payment, whether oral or written, has been made at
such time); and

     

     

    (c)
termination or expiration of all commitments, if any, to extend credit that
would constitute Additional Pari Passu Obligations (including any Refinancings
of any thereof).

     

     

    If a
Discharge of any Additional Pari Passu Obligations occurs prior to the
termination of this Agreement in accordance with Section 8.2, to the extent that
Additional Pari Passu Obligations are incurred or Additional Pari Passu
Obligations are reinstated in accordance with Sections 4.4 or 6.4, the Discharge
of Additional Pari Passu Obligations shall (effective upon the incurrence of
such Additional Pari Passu Obligations or reinstatement of such Additional Pari
Passu Obligations, as applicable) be deemed to no longer be
effective.

     

     

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

     

    
      
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    (a)
payment in full in cash of the principal of and interest (including
Post-Petition Interest), on all Indebtedness outstanding under the Revolving
Credit Facility Credit Documents and constituting Revolving Credit Obligations
(including any Refinancings of any thereof to the extent such Refinancings
thereof constitute Revolving Credit Obligations);

     

     

    (b)
payment in full in cash of all other Revolving Credit Obligations that are due
and payable or otherwise accrued and owing at or prior to the time such
principal and interest are paid (other than any indemnification obligations for
which no claim or demand for payment, whether oral or written, has been made at
such time);

     

     

    (c)
termination or expiration of all commitments, if any, to extend credit that
would constitute Revolving Credit Obligations (including any Refinancings of any
thereof); and

     

     

    (d)
termination of all letters of credit, bank guarantees and similar instruments
issued or otherwise outstanding under the Revolving Credit Facility Credit
Documents and constituting Revolving Credit Obligations or providing cash
collateral or backstop letters of credit reasonably acceptable to the Revolving
Credit Facility Administrative Agent in an amount equal to 103% of the aggregate
undrawn face amount of such letters of credit, bank guarantees and similar
instruments (in a manner reasonably satisfactory to the Revolving Credit
Facility Administrative Agent).

     

     

    If a
Discharge of Revolving Credit Obligations occurs prior to the termination of
this Agreement in accordance with Section 8.2, to the extent that additional
Revolving Credit Obligations are incurred or Revolving Credit Obligations are
reinstated in accordance with Sections 4.4 or 6.4, the Discharge of Revolving
Credit Obligations shall (effective upon the incurrence of such additional
Revolving Credit Obligations or reinstatement of such Revolving Credit
Obligations, as applicable) be deemed to no longer be effective.

     

     

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

     

     

    (a)
payment in full in cash of the principal of and interest (including
Post-Petition Interest), on all Indebtedness outstanding under the Term Loan
Credit Documents and constituting Term Loan Obligations (including any
Refinancings of any thereof to the extent such Refinancings thereof constitute
Term Loan Obligations);

     

     

    (b)
payment in full in cash of all other Term Loan Obligations that are due and
payable or otherwise accrued and owing at or prior to the time such principal
and interest are paid (other than any indemnification obligations for which no
claim or demand for payment, whether oral or written, has been made at such
time); and

     

     

    (c)
termination or expiration of all commitments, if any, to extend credit that
would constitute Term Loan Obligations (including any Refinancings of any
thereof).

     

     

    If a
Discharge of Term Loan Obligations occurs prior to the termination of this
Agreement in accordance with Section 8.2, to the extent that additional Term
Loan Obligations are incurred or Term Loan Obligations are reinstated in
accordance with Sections 4.4 or 6.4, the Discharge of Term Loan Obligations
shall (effective upon the incurrence of such additional Term Loan Obligations or
reinstatement of such Term Loan Obligations, as applicable) be deemed to no
longer be effective.

     

     

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

     

    
      
        9 

      

      
         

        
          

        

      

      
         

      

    

     

    “Enforcement Notice” means a
written notice delivered, at a time when a Revolving Credit Facility Default,
Term Loan Default or Additional Pari Passu Loan Default has occurred and is
continuing, by either (a) in the case of a Revolving Credit Facility Default,
the Revolving Credit Facility Administrative Agent or the Revolving Credit
Facility Collateral Agent to the Term Loan Collateral Agent and each Additional
Pari Passu Debt Representative; (b) in the case of a Term Loan Default, the Term
Loan Administrative Agent or the Term Loan Collateral Agent to the Revolving
Credit Facility Collateral Agent and each Additional Pari Passu Debt
Representative or (c) in the case of an Additional Pari Passu Loan Default, such
applicable Additional Pari Passu Debt Representative to the Term Loan Collateral
Agent, Revolving Credit Facility Collateral Agent and each other Additional Pari
Passu Debt Representative, in each case, announcing that an Enforcement Period
has commenced, specifying the relevant event of default, stating the current
balance of the Revolving Credit Obligations, the Term Loan Obligations or the
applicable Additional Pari Passu Obligations, as applicable, and requesting the
current balance of the Term Loan Obligations (in the case of a notice sent by
the Revolving Credit Facility Collateral Agent) or the Revolving Credit
Obligations (in the case of a notice sent by the Term Loan Collateral Agent), as
applicable.

     

     

    “Enforcement Period” means the
period of time following the receipt by any of the Revolving Credit Facility
Administrative Agent, the Term Loan Administrative Agent or any Additional Pari
Passu Debt Representative of an Enforcement Notice until the earliest of (i) in
the case of an Enforcement Period commenced by the Term Loan Collateral Agent,
the Discharge of Term Loan Obligations, (ii) in the case of an Enforcement
Period commenced by the Revolving Credit Facility Administrative Agent or the
Revolving Credit Facility Collateral Agent, the Discharge of Revolving Credit
Obligations, (iii) in the case of an Enforcement Period commenced by any
Additional Pari Passu Debt Representative, the Discharge of Additional Pari
Passu Obligations of such Series, (iv) the Revolving Credit Facility
Administrative Agent, the Term Loan Administrative Agent or any Additional Pari
Passu Debt Representative (as applicable) agrees in writing to terminate the
Enforcement Period, or (v) the date on which the Revolving Credit Facility
Default, the Term Loan Default or the Additional Pari Passu Loan Default that
was the subject of the Enforcement Notice relating to such Enforcement Period
has been cured to the satisfaction of the Revolving Credit Facility Agent (in
the case of a Revolving Credit Facility Default), or the Term Loan
Administrative Agent (in the case of a Term Loan Default), or the applicable
Additional Pari Passu Debt Claimholders (in the case of a Additional Pari Passu
Loan Default), as applicable, or waived in writing in accordance with the
requirements of the applicable Credit Agreement.

     

     

    “Equipment”
means:  (i) all “equipment” (as defined in Article 9 of the UCC), (ii)
all machinery, manufacturing equipment, data processing equipment, computers,
office equipment, furnishings, furniture, appliances, “fixtures” (as defined in
Article 9 of the UCC) and tools (in each case, regardless of whether
characterized as equipment under the UCC) and (iii) all accessions or additions
thereto, all parts thereof, whether or not at any time of determination
incorporated or installed therein or attached thereto, and all replacements
therefor, wherever located, now or hereafter existing, including any
fixtures.

     

     

    “Fixed Asset Collateral” means
all Collateral other than the Current Asset Collateral and including
all:  (a) Equipment; (b) Real Estate Assets; (c) Intellectual
Property; (d) Fixed Asset General Intangibles; (e) documents of title related to
Equipment; (f) Records, “supporting obligations” (as defined in Article 9 of the
UCC), commercial tort claims or other claims and causes of action, in each case,
to the extent related primarily to any of the foregoing; (g) Capital Stock owned
by any Grantor and Intercompany Notes; and (h) substitutions, replacements,
accessions, products and proceeds (including insurance proceeds, licenses,
royalties, income, payments, claims, damages and proceeds of suit) of any or all
of the foregoing.

     

    
      
        10 

      

      
         

        
          

        

      

      
         

      

    

     

    “Fixed Asset General
Intangibles” means all General Intangibles which are not Current Asset
General Intangibles.

     

     

    “GAAP” means generally accepted
accounting principles in the United States applied on a consistent
basis.

     

     

    “General Intangibles” means all
present and future “general intangibles” (as defined in Article 9 of the UCC),
but excluding “payment intangibles” (as defined in Article 9 of the UCC),
Hedging Agreements and Intellectual Property and any rights
thereunder.

     

     

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

     

     

    “Grantors” means the (i)
Company, (ii) each of the Term Loan Subsidiary Guarantors, (iii) each other
Person that has or from time to time hereafter guarantees any of the Term Loan
Obligations and executes and delivers a Term Loan Security Document as a
“grantor” or “pledgor” (or the equivalent thereof), (iv) each of the Revolving
Credit Facility Subsidiary Guarantors that is also a Term Loan Subsidiary
Guarantor, (v) each other person that has or from time to time hereafter
guarantees any of the U.S. Obligations (as defined in the Revolving Credit
Agreement) and executes and delivers a Revolving Credit Facility Guarantor
Security Document as a “grantor” or “pledgor” (or the equivalent thereof) (but
only if such person has also guaranteed or provided security for the Term Loan
Obligations); (vi) each of the Additional Pari Passu Subsidiary Guarantors, and
(vii) and each other person that has or from time to time hereafter guarantees
any of the Additional Pari Passu Obligations as a “grantor” or “pledgor” (or the
equivalent thereof) (but only if such person has also guaranteed or provided
security for the Term Loan Obligations and the Revolving Credit
Obligations).

     

     

    “GSCP” has the meaning assigned
to that term in the Recitals to this Agreement.

     

     

    “Hedging Agreement” means any
interest rate protection agreement, foreign currency exchange agreement,
commodity price protection agreement or other interest or currency exchange rate
or commodity price hedging arrangement and all other similar agreements or
arrangements designed to alter the risks of any Person arising from fluctuations
in interest rate, currency values or commodity prices.

     

     

    “Indebtedness” means and
includes all Obligations that constitute “Indebtedness” within the meaning of
the Term Loan Agreement or the Revolving Credit Agreement, as
applicable.

     

     

    “Insolvency or Liquidation
Proceeding” means:

     

     

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

     

     

    (b) any
other voluntary or involuntary insolvency, reorganization, winding-up or
bankruptcy case or proceeding, or any receivership, liquidation, reorganization
or other similar case or proceeding with respect to any Grantor or with respect
to a material portion of their respective assets (other than any merger or
consolidation, liquidation or dissolution not involving bankruptcy or insolvency
that is expressly permitted pursuant to Section 6.03 of the Term Loan Agreement
and of the Revolving Credit Agreement and the comparable provision, if any, of
any Additional Pari Passu Loan Agreement);

     

    
      
        11 

      

      
         

        
          

        

      

      
         

      

    

     

    (c) any
liquidation, dissolution, reorganization or winding up of any Grantor whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy
(other than any merger or consolidation, liquidation or dissolution not
involving bankruptcy or insolvency that is expressly permitted pursuant to
Section 6.03 of the Term Loan Agreement and of the Revolving Credit Agreement
and the comparable provision, if any, of any Additional Pari Passu Loan
Agreement);

     

     

    (d) any
case or proceeding seeking arrangement, adjustment, protection, relief or
composition of any debt or other property of any Grantor;

     

     

    (e) any
case or proceeding seeking the entry of an order of relief or the appointment of
a custodian, receiver, trustee or other similar proceeding with respect to any
Grantor or any property or Indebtedness of any Grantor;

     

     

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

     

     

    (g) any
analogous step or procedure under applicable laws of any
jurisdiction.

     

     

    “Instruments” means all present
and future “instruments” (as defined in Article 9 of the UCC).

     

     

    “Intellectual Property” means,
collectively, with respect to any Grantor, all intellectual and similar property
rights of every kind and nature, whether arising under United States,
multinational or foreign laws or otherwise, including Patents, Copyrights,
Intellectual Property Licenses, Trademarks, Trade Secrets, intangible rights in
software and databases not otherwise included in the foregoing, and all rights
corresponding thereto throughout the world (including the right to sue and to
collect proceeds), and all embodiments or fixations thereof and related
documentation, registrations and franchises, and all additions, improvements and
accessions to, and Books and Records describing or used in connection with, any
of the foregoing.

     

     

    “Intellectual Property
Licenses” means, collectively, with respect to each Grantor, all
agreements pursuant to which such Grantor receives or grants any right in, to,
or under Intellectual Property, including license agreements, distribution
agreements and covenants not to sue (regardless of whether such agreements and
covenants are contained within an agreement that also covers other matters, such
as development or consulting) with respect to any Patent, Trademark, Copyright,
Trade Secrets or other Intellectual Property, whether such Grantor is a licensor
or licensee, distributor or distributee under any such agreement, together with
any and all (i) amendments, renewals, extensions, supplements and continuations
thereof, and (ii) income, fees, royalties, damages, claims and payments now and
hereafter due and/or payable there-under and with respect thereto including
damages and payments for past, present or future infringements or violations
thereof.

     

     

    “Intercompany Notes” means all
indebtedness owing by any of the Company or its Subsidiaries to any Grantor,
whether or not represented by a note or agreement.

     

     

    “Intercreditor Agreement
Joinder” means an agreement substantially in the form of Exhibit A
attached hereto.

     

     

    “Inventory” mean all present
and future “inventory” (as defined in Article 9 of the UCC), and in any event,
including all goods held for sale or lease or to be furnished under contracts of
service or so leased or furnished, all raw materials, work in process, finished
goods, and materials used or consumed in the manufacture, packing, shipping,
advertising, selling, leasing, furnishing or production of such

     

    
      
        12 

      

      
         

        
          

        

      

      
         

      

    

     

    inventory
or otherwise used or consumed in any Grantor’s business; the purchaser’s
interest in any goods being manufactured pursuant to any contract or other
arrangement with a supplier, all goods in transit from suppliers (whether or not
evidenced by a document of title); all goods in which any Grantor has an
interest in mass or a joint or other interest or right of any kind; and all
goods which are returned to or repossessed by any Grantor, all computer programs
embedded in any goods and all accessions thereto and products thereof (in each
case, regardless of whether characterized as inventory under the
UCC).

     

     

    “Lender” means each Term Loan
Lender, each Revolving Credit Lender and each Additional Pari Passu
Lender.

     

     

    “Letter of Credit” means any
present and future “letter of credit” (as defined in Article 5 of the
UCC).

     

     

    “Letter of Credit Right” means
any present and future “letter-of-credit right” (as defined in Article 9 of the
UCC).

     

     

    “Lien” means, with respect to
any Property, (a) any mortgage, deed of trust, deed to secure debt, lien,
pledge, encumbrance, charge, assignment, hypothecation or security interest in
or on such Property, or any arrangement to provide priority or preference or any
filing of any financing statement under the UCC or any other similar notice of
lien under any similar notice or recording statute of any Governmental
Authority, including any easement, right-of-way or other encumbrance on title to
Real Property, in each of the foregoing cases whether voluntary or imposed by
law, (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 such Property, (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities, (d) in the case
of any investment property or deposit account, any contract or other agreement
under which any third party has the right to control such investment property or
deposit account and (e) any other agreement intended to give or create any of
the foregoing.

     

     

    “Mortgaged Premises” means any
Real Estate Asset which shall now or hereafter be subject to a Term Loan
Mortgage or an Additional Pari Passu Mortgage.

     

     

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

     

     

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

     

     

    “Notice of Occupancy” has the
meaning assigned to that term in Section 3.3(b).

     

     

    "Notifying Agent" has the
meaning assigned to such term in Section 3.3(b).

     

     

    “Obligations” means all
Revolving Credit Obligations, all Term Loan Obligations and all Additional Pari
Passu Obligations.

     

     

    “Patents” means, collectively,
all United States and foreign patents, patent applications, certificates of
inventions, and industrial designs, together with any and all (i) rights and
privileges arising under applicable law with respect to any of the foregoing,
(ii) inventions and improvements described and claimed therein, (iii) reissues,
divisions, continuations extensions and continuations-in-part thereof and
amendments thereto, (iv) income, fees, royalties, damages, claims and payments
now or hereafter due and/or payable thereunder and with respect thereto
including damages and payments for past, present or future infringements or
other violations thereof, (v) rights corresponding thereto throughout the world
and (vi) rights to sue for past, present or future infringements or other
violations thereof.

     

    
      
        13 

      

      
         

        
          

        

      

      
         

      

    

     

    “Person” means and includes
natural persons, corporations, limited partnerships, general partnerships,
limited liability companies, limited liability partnerships, joint stock
companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and Governmental Authorities.

     

     

    “Plan” means any “Plan” as
defined in the Term Loan Agreement.

     

     

    “Pledged Collateral” has the
meaning assigned to that term in Section 5.4(a).

     

     

    “Post-Petition Interest” means
interest, fees, expenses and other charges that pursuant to the Term Loan
Agreement, the Revolving Credit Agreement or any Additional Pari Passu Loan
Agreement, continue to accrue after the commencement of any Insolvency or
Liquidation Proceeding or would continue to accrue but for the commencement of
any Insolvency or Liquidation Proceeding, whether or not such interest, fees,
expenses and other charges are allowed or allowable under the Bankruptcy Law or
in any such Insolvency or Liquidation Proceeding.

     

     

    “Property” or “property” means any right,
title or interest in or to property or assets of any kind whatsoever, whether
real, personal or mixed and whether tangible or intangible and including any
ownership interests of any Person.

     

     

    “Real Estate Asset” means, at
any time of determination, any interest (fee, leasehold or otherwise) then owned
by any Grantor in any Real Property.

     

     

    “Real Property” means,
collectively, all right, title and interest (including any leasehold, mineral or
other estate) in and to any and all parcels of or interests in real property
owned, leased or operated by any Person, whether by lease, license or other
means, together with, in each case, all easements, hereditaments and
appurtenances relating thereto, all improvements and appurtenant fixtures and
equipment, all general intangibles and contract rights and other property and
rights incidental to the ownership, lease or operation thereof.

     

     

    “Records” means all present and
future “records” (as defined in Article 9 of the UCC).

     

     

    “Recovery” has the meaning
assigned to that term in Section 6.4.

     

     

    “Refinance” means, in respect
of any Indebtedness, to refinance (including by means of sale of debt securities
to institutional investors), extend, increase, renew, defease, amend, modify,
supplement, restructure, replace (whether upon termination or otherwise), refund
or repay, or to issue other Indebtedness, in exchange or replacement for, such
Indebtedness in whole or in part, and the terms “Refinanced” and “Refinancing” shall have
meanings correlative thereto.

     

     

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

     

     

    “Revolving Credit Claimholders”
means, at any relevant time, the holders of Revolving Credit Obligations at that
time, including the Revolving Credit Lenders, the Issuers (as defined in the
Revolving Credit Agreement), the agents under the Revolving Credit Facility
Credit Documents, any Revolving Credit Facility Approved
Counterparties.

     

     

    “Revolving Credit Commitments”
means the “Revolving Credit Commitments” (as such term is defined in the
Revolving Credit Agreement).

     

    
      
        14 

      

      
         

        
          

        

      

      
         

      

    

     

    “Revolving Credit Facility
Administrative Agent” has the meaning assigned to that term in the
preamble to this Agreement.

     

     

    “Revolving Credit Facility
Agents” means the Revolving Credit Facility Administrative Agent and the
Revolving Credit Facility Collateral Agent.

     

     

    “Revolving Credit Facility Approved
Counterparty” means the Revolving Credit Facility Administrative Agent,
any Revolving Credit Facility Lender or any Affiliate of any of
them.

     

     

    “Revolving Credit Facility
Borrowers” means the Company, Solutia Europe SPRL/BVBA, a private limited
liability company incorporated under Belgian law with registered office Chaussée
de Boondael 6, 1050 Bruxelles, registered with the Crossroads Bank for
Enterprises under number 0460.474.440, Commercial Court of Brussels (formerly
known as Solutia Europe SA/NV, a limited liability company) (“Solutia Europe”);
Flexsys SA/NV, a Belgian limited liability company (“société anonyme”/“naamloze vennootschap”),
having its registered office at Boondaalsesteenweg 6, 1050 Brussels, Belgium and
registered with the Legal Entities Register (RPM/RPR Brussels) under enterprise
number 454.045.419, and any other Person that becomes a “Borrower” under the
Revolving Credit Agreement in accordance with the terms thereof.

     

     

    “Revolving Credit Facility Cap
Amount” means $450.0 million.

     

     

    “Revolving Credit Facility Collateral
Agent” has the meaning assigned to that term in the preamble to this
Agreement.

     

     

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

     

     

    “Revolving Credit Facility
Default” means an “Event of Default” (as defined in the Revolving Credit
Agreement).

     

     

    “Revolving Credit Facility Grantor
Collateral” means all of the assets and property of any Grantor, whether
real, personal or mixed, with respect to which a Lien is granted or purported to
be granted under the Revolving Credit Grantor Security Documents as security for
any Revolving Credit Obligations.

     

     

    “Revolving Credit Facility Grantor
Security Documents” means each Revolving Credit Facility Security
Document with respect to which any Grantor is a party.

     

     

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

     

     

    “Revolving Credit Facility Subsidiary
Guarantor” means a “Subsidiary Guarantor” (as defined in the Revolving
Credit Agreement).

     

    
      
        15 

      

      
         

        
          

        

      

      
         

      

    

     

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

     

     

    “Revolving Credit Obligations”
means, collectively, (a) the loans made under the Revolving Credit Agreement,
reimbursement obligations in respect of letters of credit, bank guarantees and
similar instruments issued or otherwise outstanding under the Revolving Credit
Agreement and all other amounts, obligations, covenants and duties owing by the
Revolving Credit Facility Borrowers and any Revolving Credit Facility Subsidiary
Guarantors to any Revolving Credit Facility Agent, any Revolving Credit Lender,
any Affiliate of any of them or any “Indemnitee” (as defined in the Revolving
Credit Agreement), of every type and description (whether by reason of an
extension of credit, loan, guaranty, indemnification or otherwise), present or
future, arising under the Revolving Credit Agreement or any other Revolving
Credit Facility Credit Document, whether direct or indirect (including those
acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired and whether or not evidenced
by any note, guaranty or other instrument or for the payment of money, including
all fees, interest (including interest accruing after the maturity of the loans
under the Revolving Credit Agreement and Post-Petition Interest), charges,
expenses, attorneys’ fees and disbursements and other sums chargeable to the
Revolving Credit Facility Borrowers or any Revolving Credit Facility Subsidiary
Guarantors under the Revolving Agreement or any other Revolving Credit Facility
Credit Document and (b) the due and punctual payment and performance of all Cash
Management Obligations of the Revolving Credit Facility Borrowers and any
Revolving Credit Facility Subsidiary Guarantors.

     

     

    Notwithstanding
the foregoing, if the sum of (x) the aggregate principal amount of Indebtedness
constituting principal outstanding under the Revolving Credit Agreement and the
other Revolving Credit Facility Credit Documents (other than Indebtedness in
respect of Cash Management Obligations of the Revolving Credit Facility
Borrowers and the Revolving Credit Facility Subsidiary Guarantors ) plus (y) the
aggregate face amount of any outstanding letters of credit, bank guarantees and
similar instruments issued under the Revolving Credit Agreement, exceeds the
Revolving Credit Facility Cap Amount, then only that portion of such
Indebtedness and such aggregate face amount of letters of credit, bank
guarantees and similar instruments equal to the Revolving Credit Facility Cap
Amount plus Cash Management Obligations of the Revolving Credit Facility
Borrowers and the Revolving Credit Facility Subsidiary Guarantors shall be
included in Revolving Credit Obligations and interest, fees, expenses and
indemnification obligations with respect to such Indebtedness and letters of
credit, bank guarantees and similar instruments shall only constitute Revolving
Credit Obligations to the extent related to Indebtedness and the face amounts of
letters of included in the Revolving Credit Obligations; provided that
notwithstanding the foregoing, “Revolving Credit Obligations”
shall include, if applicable, Indebtedness pursuant to a DIP Financing to the
extent permitted pursuant to Section 6.1(a).

     

     

    “Revolving Credit Standstill
Period” has the meaning assigned to that term in Section
3.2(a)(1).

     

     

    “Securities” means any stock,
shares, partnership interests, voting trust certificates, certificates of
interest or participation in any profit-sharing agreement or arrangement,
options, warrants, bonds, debentures, notes, or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as “securities” or any certificates of interest,
shares or participations in temporary or interim certificates for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing.

     

     

    “Securities Accounts” means all
present and future “securities accounts” (as defined in Article 8 of the UCC),
including all cash, funds, “uncertificated securities” and “securities
entitlements” (in each case, as defined in Article 8 of the UCC) from time to
time held therein or on deposit therein.

     

    
      
        16 

      

      
         

        
          

        

      

      
         

      

    

     

    “Series” means, with respect to
any Additional Pari Passu Obligations, each Additional Pari Passu Obligations
incurred pursuant to any Additional Pari Passu Loan Agreement, which pursuant to
any Additional Joinder Agreement are intended to constitute Additional Pari
Passu Obligations hereunder.

     

     

    “Subsidiary” means, with
respect to any Person (“parent”), (i) any corporation,
limited liability company, association or other business entity of which more
than 50% of the outstanding Capital Stock having ordinary voting power to elect
a majority of the board of directors of such corporation, limited liability
company, association or other business entity (irrespective of whether at the
time any other class or classes of Capital Stock of such corporation, limited
liability company, association or other business entity shall or might have
voting power upon the occurrence of any contingency) is at the time directly or
indirectly owned by the parent, by the parent and one or more other Subsidiaries
of the parent, or by one or more other Subsidiaries of the parent; (ii) any
partnership of which more than 50% of the outstanding partnership interests
having the power to act as a general partner of such partnership (irrespective
of whether at the time any partnership interests other than general partnership
interests of such partnership shall or might have voting power upon the
occurrence of any contingency) are at the time directly or indirectly owned by
the parent, by the parent and one or more other Subsidiaries of the parent, or
by one or more other Subsidiaries of the parent; or (iii) any other Person that
is otherwise Controlled by the parent, by the parent and one or more other
Subsidiaries of the parent, or by one or more other Subsidiaries of the
parent.  Unless otherwise indicated, when used in this Agreement, the
term “Subsidiary” shall refer to a Subsidiary of the Company.

     

     

    “Term Loan Administrative
Agent” has the meaning assigned to that term in the preamble to this
Agreement.

     

     

    “Term Loan Agents” means the
Term Loan Administrative Agent and the Term Loan Collateral Agent.

     

     

    “Term Loan Agreement” has the
meaning assigned to that term in the Recitals to this Agreement, provided that, for
purposes of this Agreement only, no Additional Pari Passu Credit Document shall
be deemed to be a Term Loan Agreement.

     

     

    “Term Loan Approved
Counterparty” means the counterparty to a Term Loan Hedging Agreement
entered into by the Company or any Term Loan Subsidiary Guarantor.

     

     

    “Term Loan Cap Amount” means,
at any time, $1.45 billion minus the
Indebtedness constituting outstanding principal with respect to any Additional
Pari Passu Obligations.

     

     

    “Term Loan Claimholders” means,
at any relevant time, the holders of Term Loan Obligations at that time,
including the Term Loan Lenders, the agents under the Term Loan Credit
Documents, any Term Loan Approved Counterparties.

     

     

    “Term Loan Collateral” means
all of the assets and property of any Grantor, whether real, personal or mixed,
with respect to which a Lien is granted or purported to be granted under any
Term Loan Security Documents as security for any Term Loan
Obligations.

     

     

    “Term Loan Collateral Agent”
has the meaning assigned to that term in the preamble to this
Agreement.

     

     

    “Term Loan Credit Documents”
means the Term Loan Agreement and the other “Loan Documents” (as defined in the
Term Loan Agreement), each Term Loan Hedging Agreement and each of

     

    
      
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    the other
agreements, documents and instruments providing for or evidencing any other Term
Loan Obligation, and any other document or instrument executed or delivered at
any time in connection with any Term Loan Obligations, including any
intercreditor or joinder agreement among holders of Term Loan Obligations, to
the extent such are effective at the relevant time, as each may be amended,
restated, supplemented, modified, renewed, increased, replaced, extended or
Refinanced from time to time in accordance with the provisions of this
Agreement, provided that, for
purposes of this Agreement only, no Additional Pari Passu Credit Document shall
be deemed to be a Term Loan Credit Document.

     

    “Term Loan Default” means an
“Event of Default” (as defined in the Term Loan Agreement).

     

     

    “Term Loan Hedging Agreement”
means each “Pari Passu Secured Hedging Agreement” (as defined in the Term Loan
Agreement).

     

     

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

     

     

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

     

    “Term Loan Obligations” means,
collectively, (a) the loans made under the Term Loan Agreement and all other
amounts, obligations, covenants and duties owing by the Company and any Term
Loan Subsidiary Guarantors to any Term Loan Agent, any Term Loan Lender, any
Affiliate of any of them or any “Indemnitee” (as defined in the Term Loan
Agreement), of every type and description (whether by reason of an extension of
credit, loan, guaranty, indemnification or otherwise), present or future,
arising under the Term Loan Agreement or any other Term Loan Credit Document,
whether direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired and whether or not evidenced by any note, guaranty or other instrument
or for the payment of money, including all fees, interest (including interest
accruing after the maturity of the loans under the Term Loan Agreement and
Post-Petition Interest), charges, expenses, attorneys’ fees and disbursements
and other sums chargeable to the Company or any Term Loan Subsidiary Guarantor
under the Term Loan Agreement or any other Term Loan Credit Document and (b) the
due and punctual payment and performance of all obligations of the Company and
the Term Loan Subsidiary Guarantors under each Term Loan Hedging
Agreement.

     

    Notwithstanding
the foregoing, if the aggregate amount of Indebtedness constituting principal
outstanding under the Term Loan Agreement and the other Term Loan Credit
Documents (other than Indebtedness in respect of Term Loan Hedging Agreements)
is in excess of the Term Loan Cap Amount, then only that portion of such
Indebtedness equal to the Term Loan Cap Amount plus obligations in respect of
Term Loan Hedging Agreements shall be included in Term Loan Obligations and
interest, fees, expenses and indemnification obligations with respect to such
Indebtedness shall only constitute Term Loan Obligations to the extent related
to Indebtedness included in the Term Loan Obligations; provided that
notwithstanding the foregoing, “Term Loan Obligations” shall
include, if applicable, Indebtedness pursuant to a DIP Financing to the extent
permitted pursuant to Section 6.1(b).

     

    “Term Loan Security Documents”
means the “Security Documents” (as defined in the Term Loan Agreement) and any
other agreement, document or instrument pursuant to which a Lien is granted or
purported to be granted to secure any Term Loan Obligations or under which
rights or remedies with respect to such Liens are governed.

     

    
      
        18 

      

      
         

        
          

        

      

      
         

      

    

     

    “Term Loan/Additional Pari Passu
Standstill Period” has the meaning assigned to that term in Section
3.1(a)(1).

     

     

    “Term Loan Subsidiary
Guarantor” means a “Subsidiary Guarantor” (as defined in the Term Loan
Agreement).

     

     

    “Trademarks” means,
collectively, all United States, state, and foreign
trademarks,  service marks, certification marks, slogans, logos,
certification marks, trade dress, internet domain names, corporate names, trade
names, and other source or business identifiers, whether registered or
unregistered (whether statutory or common law and whether established or
registered in the United States or any other country or any political
subdivision thereof), together with any and all (i) registrations and
applications for any of the foregoing, (ii) good-will connected with the use
thereof and symbolized thereby, (iii) rights and privileges arising under
applicable law with respect to the use of any of the foregoing, (iv) renewals
thereof and amendments thereto, (v) income, fees, royalties, damages and
payments now and hereafter due and/or payable thereunder and with respect
thereto, including damages, claims and payments for past, present or future
infringements, dilutions or other violations thereof, (vi) rights corresponding
thereto throughout the world and (vii) rights to sue for past, present and
future infringements, dilutions or other violations thereof.

     

     

    “Trade Secrets” means all trade
secrets and all other confidential or proprietary information and know-how,
whether or not such information has been reduced to a writing or other tangible
form, together with all (i) rights and privileges arising under applicable law
with respect to the use of any of the foregoing, (ii) income, fees, royalties,
damages and payments now and hereafter due and/or payable thereunder and with
respect thereto, including damages, claims and payments for past, present or
future misappropriation or other violations thereof, (iii) rights corresponding
thereto throughout the world and (iv) rights to sue for past, present and future
misappropriation or other violations thereof.

     

     

    “UCC” means the Uniform
Commercial Code as from time to time in effect in the State of New York; provided that in the
event that, by reason of mandatory provisions of law, any of the attachment,
perfection or priority of any Collateral Agent’s or any secured party’s security
interest in any Collateral is governed by the Uniform Commercial Code as in
effect from time to time in a jurisdiction other than the State of New York, the
term “UCC” shall mean the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such attachment,
perfection or priority and for purposes of definitions related to such
provisions.

     

     

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

     

     

    (a) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, restated, supplemented, modified, renewed or
extended;

     

     

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

     

     

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

     

    
      
        19 

      

      
         

        
          

        

      

      
         

      

    

     

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

     

     

    (e) all
references to terms defined in the UCC in effect in the State of New York shall
have the meaning ascribed to them therein (unless otherwise specifically defined
herein); and

     

     

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

     

     

    SECTION
2.  Lien
Priorities.

     

     

    2.1 Relative
Priorities.  Notwithstanding the date, time, method, manner or
order of grant, attachment or perfection of any Liens securing the Term Loan
Obligations granted on the Collateral, any Liens securing any Additional Pari
Passu Obligations granted on the Collateral (or any portion thereof) or of any
Liens securing the Revolving Credit Obligations granted on the Collateral and
notwithstanding any provision of any UCC, or any other applicable law or the
Revolving Credit Facility Credit Documents, the Term Loan Credit Documents
or any of the Additional Pari Passu Credit Documents or any defect or
deficiencies in, or failure to perfect, the Liens securing the Revolving Credit
Obligations, the Term Loan Obligations or any Additional Pari Passu
Obligations or any or any other circumstance whatsoever, the Revolving Credit
Facility Collateral Agent, on behalf of itself and the Revolving Credit
Claimholders, the Term Loan Collateral Agent, on behalf of itself and the Term
Loan Claimholders and each Additional Pari Passu Debt Representative, on behalf
of itself and the applicable Series of Additional Pari Passu Claimholders,
hereby agree that:

     

     

    (a) any Lien
on the Current Asset Collateral securing any Revolving Credit Obligations,
whether now or hereafter held by or on behalf of the Revolving Credit Facility
Collateral Agent or any Revolving Credit Claimholders or any agent or trustee
therefor, regardless of how acquired, whether by grant, possession, statute,
operation of law, subrogation or otherwise, shall be senior in right, priority,
operation and all other respects to all Liens on the Current Asset Collateral
securing any Term Loan Obligations or any Additional Pari Passu
Obligations;

     

     

    (b) any Lien
on the Fixed Asset Collateral securing any (i) Term Loan Obligations, whether
now or hereafter held by or on behalf of the Term Loan Collateral Agent, any
Term Loan Claimholders or any agent or trustee therefor or (ii) any Additional
Pari Passu Obligations, whether now or hereafter held by or on behalf of the any
Additional Pari Passu Debt Representative, any Additional Pari Passu
Claimholders or any agent or trustee therefore, in each case regardless of how
acquired, whether by grant, possession, statute, operation of law, subrogation
or otherwise, shall be senior in right, priority, operation and all other
respects to all Liens on the Fixed Asset Collateral securing any Revolving
Credit Obligations; and

     

     

    (c) any Lien
on the Collateral securing any Term Loan Obligations whether now or hereafter
held by or on behalf of the Term Loan Collateral Agent, any Term Loan
Claimholders or any agent or trustee therefor regardless of how acquired,
whether by grant, possession, statute, operation of law, subrogation or
otherwise, shall be pari passu in right, priority, operation and all other
respects to all Liens on the Collateral securing any Additional  Pari
Passu Obligations, whether now or hereafter held by or on behalf of such
Additional Pari Passu Debt Representative, such Additional Pari Passu
Claimholders or any agent or trustee therefor regardless of how acquired,
whether by grant, possession, statute, operation of law, subrogation or
otherwise.

     

     

    
      
        20

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.2 Prohibition on Contesting
Liens.  Each of the Term Loan Collateral Agent, for itself and
on behalf of each Term Loan Claimholder, each Additional Pari Passu Debt
Representative, for itself and on behalf of each applicable Series of Additional
Pari Passu Claimholders and the Revolving Credit Facility Collateral Agent, for
itself and on behalf of each Revolving Credit Claimholder, agrees that it will
not (and hereby waives any right to) contest or support any other Person in
contesting, in any proceeding (including any Insolvency or Liquidation
Proceeding), the perfection, priority, validity or enforceability of a Lien held
by or on behalf of any of the Revolving Credit Claimholders, any of the Term
Loan Claimholders or any of the Additional Pari Passu Claimholders in the
Collateral, or the provisions of this Agreement; provided that nothing
in this Agreement shall be construed to prevent or impair the rights of either
Agent or any Revolving Credit Claimholder, Term Loan Claimholder of any
Additional Pari Passu Claimholder to enforce this Agreement, including the
provisions of this Agreement relating to the priority of the Liens securing the
Obligations as provided in Sections 2.1, 3.1 and 3.2.  The Term Loan
Collateral Agent, for itself and on behalf of each Term Loan Claimholder, and
each Additional Pari Passu Debt Representative, on behalf of itself and the
applicable series of Additional Pari Passu Claimholders acknowledges that
the  Revolving Credit Obligations are secured by collateral granted by
European Loan Parties (as such term is defined in the Revolving Credit
Agreement) and, in furtherance of this agreement, agrees that it will not
(and hereby waives any right to) contest or support any other Person in
contesting, in any proceeding (including any Insolvency or Liquidation
Proceeding), the perfection, priority, validity or enforceability of a Lien held
by or on behalf of any of the Revolving Credit Claimholders in any such
collateral.

     

     

    2.3 No New
Liens.  So long as the Discharge of Revolving Credit
Obligations, the Discharge of Term Loan Obligations and the Discharge of
Additional Pari Passu Obligations have not occurred, whether or not any
Insolvency or Liquidation Proceeding has been commenced by or against one or
more of the Company or any other Grantor, the parties hereto agree that neither
the Company nor any other Grantor nor any other Subsidiary that is required to
be a Grantor pursuant to the terms of the Term Loan Credit Documents,
shall:

     

     

    (a) grant or
permit any Liens on any of its property to secure any Term Loan Obligations
unless it has granted or concurrently grants a Lien on such property to secure
the Revolving Credit Obligations and, to the extent applicable and constituting
property that is Common Collateral or is of the type that is meant to be
security for such Additional Pari Passu Obligations, any Series of
Additional Pari Passu Obligations; or

     

     

    (b) grant or
permit any Liens on any of its property to secure any Revolving Credit
Obligations (other than cash collateralization of Revolving Credit
Obligations consisting of Letters of Credit (as such term is defined in the
Revolving Credit Agreement) unless it has granted or concurrently grants a Lien
on such property to secure the Term Loan Obligations or, to the extent
applicable and constituting property that is Common Collateral or is of the type
that is meant to be security for such Additional Pari Passu
Obligations, any Series of Additional Pari Passu Obligations;
or

     

     

    (c) grant or
permit any Liens on any of its property to secure any Series of Additional Pari
Passu Obligations unless it has granted or concurrently grants Liens on
such property to secure the Term Loan Obligations and the Revolving
Credit Obligations pursuant to the terms of such Credit Agreements.

     

     

    To the
extent any additional Liens are granted on any asset or property pursuant to
this Section 2.3, the priority of such additional Liens shall be determined in
accordance with Section 2.1.  In addition, to the extent that the
foregoing provisions are not complied with for any reason, without limiting any
other rights and remedies available hereunder, the Revolving Credit Facility
Collateral Agent, on behalf of the Revolving Credit Claimholders, the Term Loan
Collateral Agent, on behalf of the Term Loan

     

    
      
        21 

      

      
         

        
          

        

      

      
         

      

    

     

    Claimholders,
and each Additional Pari Passu Debt Representative, on behalf of the applicable
Additional Pari Passu Claimholders, 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 2.3 shall be subject to Section 4.2.

     

     

    2.4 Similar Liens and
Agreements.  The parties hereto agree that it is their
intention that the Revolving Credit Facility Grantor Collateral, the Term Loan
Collateral and the Additional Pari Passu Collateral be identical (other than (i)
cash collateralization of Revolving Credit Obligations consisting of Letters of
Credit (as such term is defined in the Revolving Credit Agreement) pursuant to
the terms of the Revolving Credit Agreement and (ii) in the case of Additional
Pari Passu Obligations, property that is not Common Collateral or is not of the
type of property that is meant to be security for such Additional Pari Passu
Obligations).  In furtherance of the foregoing and of Section 8.8, the
parties hereto agree, subject to the other provisions of this Agreement
(including Section 5.3):

     

     

    (a) upon
request by the Revolving Credit Facility Collateral Agent, the Term Loan
Collateral Agent or any Additional Pari Passu Debt Representative, to cooperate
in good faith from time to time in order to determine the specific items
included in the Revolving Credit Facility Grantor Collateral, the Term Loan
Collateral and the applicable Additional Pari Passu Collateral and the steps
taken to perfect their respective Liens thereon and the identity of the
respective parties obligated under the Revolving Credit Facility Credit
Documents, the Term Loan Credit Documents and the Additional Pari Passu Credit
Documents; and

     

     

    (b) that the
Revolving Credit Facility Grantor Security Documents, the Term Loan Security
Documents and the Additional Pari Passu Security Documents and guarantees
delivered by Grantors for the Revolving Credit Obligations, the Term Loan
Obligations and, to the extent applicable and practicable, Additional Pari Passu
Obligations, subject to Section 5.3, shall be in all material respects the same
forms of documents other than with respect to differences to reflect the nature
of the lending arrangements and the respective Obligations secured thereunder
and, to the extent relevant, the priority of the Liens granted thereunder with
respect to the Fixed Asset Collateral and the Current Asset Collateral (and, in
the case of Additional Pari Passu Obligations, any differences reflecting that
such Obligations may be secured by only a subset of the
Collateral).

     

     

    SECTION
3.  Enforcement.

     

     

    3.1 Exercise of Remedies
– Restrictions on the Term
Loan Collateral Agent and Additional Pari Passu Debt
Representatives.

     

     

    (a) Until the
Discharge of Revolving Credit Obligations has occurred, whether or not any
Insolvency or Liquidation Proceeding has been commenced by or against any
Grantor, the Term Loan Collateral Agent, the Term Loan Claimholders, the
Additional Pari Passu Debt Representatives and the Additional Pari Passu
Claimholders:

     

     

    (1) will not
seek to have a trustee, receiver, liquidator or similar official appointed for
or over, attempt any action to take possession of, or otherwise exercise or seek
to exercise any rights or remedies with respect to any Current Asset Collateral
(including the exercise of any right of setoff or any right under any Account
Agreement with respect to Deposit Accounts or Securities Accounts) or institute
any action or proceeding with respect to such rights or remedies (including
any action of foreclosure); provided that the
Term Loan Collateral Agent or any Additional Pari Passu Debt Representative may
exercise any or all such rights or remedies after the passage of a period of at
least 180 days has elapsed since the later of: (A) the date on which any Term
Loan Agent or Additional Pari Passu Debt Representative, as applicable, first
declared the existence of a Term Loan Default or an Additional Pari Passu Loan
Default, as applicable, and demanded the repayment of all the principal amount
of any

     

    
      
        22 

      

      
         

        
          

        

      

      
         

      

    

     

    Term Loan
Obligations or applicable Additional Pari Passu Obligations, as applicable; and
(B) the date on which the Revolving Credit Facility Administrative Agent and the
other Additional Pari Passu Debt Representatives received notice from the Term
Loan Collateral Agent or any Additional Pari Passu Debt Representative of such
declaration of a Term Loan Default or an Additional Pari Passu Loan Default, as
applicable, and demand for repayment (the “Term Loan/Additional Pari Passu Standstill
Period”); provided, further, that
notwithstanding anything herein to the contrary, in no event shall any of the
Term Loan Collateral Agent, the Term Loan Claimholder, Additional Pari Passu
Debt Representative or Additional Pari Passu Claimholder exercise any rights or
remedies with respect to the Current Asset Collateral (unless (x) the final step
triggering the “one action rule” or any similar legal provision in any
applicable state has occurred and (y) the applicable Term Loan Claimholder or
Additional Pari Passu Claimholder has provided written notice to the Revolving
Credit Claimholders and any other Additional Pari Passu Claimholders no later
than five days prior to the commencement of such final step of its exercise of
any rights or remedies permitted hereunder) if, notwithstanding the expiration
of the Term Loan/Additional Pari Passu Standstill Period, the Revolving Credit
Facility Collateral Agent or Revolving Credit Claimholders shall have commenced
and be diligently pursuing the exercise of their rights or remedies with respect
to all or any material portion of such Collateral (prompt notice of such
exercise to be given to the Term Loan Collateral Agent and any applicable
Additional Pari Passu Debt Representative);

     

     

    (2) will not
contest, protest or object to, or otherwise interfere with, any foreclosure
proceeding or action brought by the Revolving Credit Facility Collateral Agent
or any Revolving Credit Claimholder or any other exercise by the Revolving
Credit Facility Collateral Agent or any Revolving Credit Claimholder of any
rights and remedies relating to the Current Asset Collateral, whether under the
Revolving Credit Facility Credit Documents or otherwise; and

     

     

    (3) subject
to their rights under clause (a)(1) above and except as may be permitted in
Section 3.1(c), will not object to the forbearance by the Revolving Credit
Facility Collateral Agent or any of the Revolving Credit Claimholders from
bringing or pursuing any Collateral Enforcement Action;

     

    provided that, in the
case of (1), (2) and (3) above, the Liens granted to secure the Term Loan
Obligations of the Term Loan Claimholders and the Additional Pari Passu
Obligations of the Additional Pari Passu Claimholders shall attach to the
Proceeds of Collateral (and of Common Collateral, in the case of Additional Pari
Passu Obligations) resulting from any such actions taken by the Revolving Credit
Facility Collateral Agent or any Revolving Credit Claimholder in accordance with
this Agreement (after giving effect to any proper application of such Proceeds
to the Revolving Credit Obligations) subject to the relative priorities
described in Section 2.

     

    (b) Until the
Discharge of Revolving Credit Obligations has occurred, whether or not any
Insolvency or Liquidation Proceeding has been commenced by or against any
Grantor, the Term Loan Collateral Agent, for itself and on behalf of the Term
Loan Claimholders, and each Additional Pari Passu Debt Representative, for
itself and on behalf of the applicable Additional Pari Passu Claimholders,
agrees that the Revolving Credit Facility Collateral Agent and the Revolving
Credit Claimholders shall have the right to enforce rights, exercise remedies
(including set-off and the right to credit bid their debt) and, in connection
therewith (including voluntary Dispositions of Current Asset Collateral by the
respective Grantors after a Revolving Credit Facility Default) make
determinations regarding the release, disposition, or restrictions with respect
to the Current Asset Collateral (including exercising remedies under Account
Agreements with respect to Deposit Accounts or Securities Accounts) without any
consultation with or the consent of the Term Loan Collateral Agent, any Term
Loan Claimholder, any Additional Pari Passu Debt Representative or any
Additional Pari Passu Claimholder; provided that the
Lien securing the Term Loan Obligations and Additional Pari Passu Obligations
shall remain on the Proceeds of Common

     

    
      
        23 

      

      
         

        
          

        

      

      
         

      

    

     

    Collateral
(other than those properly applied to the Revolving Credit Obligations) of such
Collateral released or disposed of subject to the relative priorities described
in Section 2.  In exercising rights and remedies with respect to the
Current Asset Collateral, the Term Loan Collateral Agent, for itself and on
behalf of the Term Loan Claimholders, and each Additional Pari Passu Debt
Representative, for itself and on behalf of the applicable Additional Pari Passu
Claimholders agrees that the Revolving Credit Facility Collateral Agent and the
Revolving Credit Claimholders may enforce the provisions of the Revolving Credit
Facility Credit Documents and exercise remedies thereunder, all in such order
and in such manner as they may determine in the exercise of their sole
discretion.  Such exercise and enforcement shall include the rights of
an agent appointed by them to sell or otherwise dispose of the Current Asset
Collateral upon foreclosure, to incur expenses in connection with such sale or
disposition, and to exercise all the rights and remedies of a secured creditor
under the UCC (and any similar or equivalent legislation of any applicable
jurisdiction outside the United States) and of a secured creditor under the
Bankruptcy Laws of any applicable jurisdiction.

     

     

    (c) Notwithstanding
the foregoing, the Term Loan Collateral Agent, and any Term Loan Claimholder,
any Additional Pari Passu Debt Representative or any Additional Pari Passu
Claimholder may:

     

     

    (1) file a
claim or statement of interest with respect to the Term Loan Obligations or the
applicable Additional Pari Passu Obligations, as applicable; provided that an
Insolvency or Liquidation Proceeding has been commenced by or against any
Grantor;

     

     

    (2) take any
action in order to create, perfect, preserve or protect its Lien on any of the
Collateral; provided that such
action shall not be inconsistent with the terms of this Agreement and shall not
be adverse to the priority status of the Liens on the Current Asset Collateral,
or the rights of the Revolving Credit Facility Collateral Agent or the Revolving
Credit Claimholders to exercise remedies in respect thereof;

     

     

    (3) file any
necessary responsive or defensive pleadings in opposition to any motion, claim,
adversary proceeding or other pleading made by any Person objecting to or
otherwise seeking the disallowance of the claims of the Term Loan Claimholders
or the applicable Additional Pari Passu Claimholders, as applicable, including
any claims secured by the Current Asset Collateral, if any, in each case in
accordance with the terms of this Agreement;

     

     

    (4) file any
pleadings, objections, motions or agreements which assert rights or interests
available to unsecured creditors of the Grantors arising under either any
Insolvency or Liquidation Proceeding or applicable non-bankruptcy law, in each
case not inconsistent with the terms of this Agreement;

     

     

    (5) vote on
any plan of reorganization, file any proof of claim, make other filings and make
any arguments and motions that are, in each case, in accordance with the terms
of this Agreement, with respect to the Term Loan Obligations or the applicable
Additional Pari Passu Obligations and the Fixed Asset Collateral (that, in the
case of Additional Pari Passu Obligations, constitutes Common
Collateral);

     

     

    (6) exercise
any of its rights or remedies with respect to any of the Collateral after the
termination of the Term Loan/Additional Pari Passu Standstill Period to the
extent permitted by Section 3.1(a)(1); and

     

     

    (7) make a
cash bid on all or any portion of the Collateral in any foreclosure proceeding
or action.

     

    
      
        24 

      

      
         

        
          

        

      

      
         

      

    

     

    The Term Loan Collateral Agent, on
behalf of itself and the Term Loan Claimholders, and each Additional Pari Passu
Debt Representative, on behalf of itself and the applicable Additional Pari
Passu Claimholders, agrees that it will not take or receive any Current Asset
Collateral or any Proceeds of such Collateral in connection with the exercise of
any right or remedy (including set-off) with respect to any such Collateral in
its capacity as a creditor in violation of this Agreement.  Without
limiting the generality of the foregoing, unless and until, the Discharge of
Revolving Credit Obligations has occurred, except as expressly provided in this
Section 3.1(c) and Sections 3.1(a) and 6.3(c)(1), the sole right of the Term
Loan Collateral Agent, the Term Loan Claimholders, any Additional Pari Passu
Debt Representative or any Additional Pari Passu Claimholder with respect to the
Current Asset Collateral is to hold a Lien on such Collateral pursuant to the
Term Loan Security Documents or the applicable Additional Pari Passu Security
Documents for the period and to the extent granted therein and to receive a
share of the Proceeds thereof, if any, after the Discharge of Revolving Credit
Obligations has occurred.

     

     

    (d) Subject
to Sections 3.l(a), 3.1(c) and 6.3(c)(1):

     

     

    (1) (x) the
Term Loan Collateral Agent, for itself and on behalf of the Term Loan
Claimholders, agrees that the Term Loan Collateral Agent and the Term Loan
Claimholders will not, and (y) each Additional Pari Passu Debt Representative,
for itself and on behalf of the applicable Additional Pari Passu Claimholders,
agrees that such Additional Pari Passu Debt Representative and such applicable
Additional Pari Passu Claimholders will not, except as not prohibited herein,
take any action that would hinder any exercise of remedies under the Revolving
Credit Facility Credit Documents or that is otherwise prohibited hereunder,
including any sale, lease, exchange, transfer or other disposition of the
Current Asset Collateral, whether by foreclosure or otherwise;

     

     

    (2) (x) the
Term Loan Collateral Agent, for itself and on behalf of the Term Loan
Claimholders, hereby waives any and all rights it or the Term Loan Claimholders
may have and (y) each Additional Pari Passu Debt Representative, for itself
and on behalf of the applicable Additional Pari Passu Claimholders, hereby
waives any and all rights it or the applicable Additional Pari Passu
Claimholders may have in each case, as a junior lien creditor with respect to
the Current Asset Collateral or otherwise to object to the manner in which the
Revolving Credit Facility Collateral Agent or the Revolving Credit Claimholders
seek to enforce or collect the Revolving Credit Obligations or the Liens on the
Current Asset Collateral securing the Revolving Credit Obligations granted in
any of the Revolving Credit Facility Credit Documents or to any action that is
not prohibited by this Agreement, regardless of whether any action or failure to
act by or on behalf of the Revolving Credit Facility Collateral Agent or
Revolving Credit Claimholders is adverse to the interest of the Term Loan
Claimholders or such Additional Pari Passu Claimholders; and

     

     

    (3) (x) the
Term Loan Collateral Agent hereby acknowledges and agrees that no covenant,
agreement or restriction contained in any of the Term Loan Security Documents or
any other Term Loan Credit Document (other than this Agreement) shall be deemed
to restrict in any way the rights and remedies of the Revolving Credit Facility
Collateral Agent or the Revolving Credit Claimholders with respect to the
Current Asset Collateral as set forth in this Agreement and the Revolving Credit
Facility Credit Documents and (y) each Additional Pari Passu Debt Representative
hereby acknowledges and agrees that no covenant, agreement or restriction
contained in any of the applicable Additional Pari Passu Security Documents or
any other Additional Pari Passu Credit Document (other than this Agreement)
shall be deemed to restrict in any way the rights and remedies of the Revolving
Credit Facility Collateral Agent or the Revolving Credit Claimholders with
respect to the Current Asset Collateral as set forth in this Agreement and the
Revolving Credit Facility Credit Documents.

     

     

    (e) Except as
otherwise specifically set forth in Sections 3.1(a), 3.1(d) and 3.5, the Term
Loan Collateral Agent, the Term Loan Claimholders, any Additional Pari Passu
Debt

     

    
      
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    Representative
and any Additional Pari Passu Claimholder may exercise rights and remedies as
unsecured creditors against any Grantor (in the case of any Term Loan
Claimholders) or the Company and any applicable Additional Pari Passu Subsidiary
Guarantors (in the case of any Additional Pari Passu Claimholders) and may
exercise rights and remedies with respect to the Fixed Asset Collateral, in each
case, in accordance with the terms of the Term Loan Credit Documents or the
applicable Additional Pari Passu Credit Documents, as applicable, and applicable
law; provided
that in the event that any Term Loan Claimholder or any Additional Pari Passu
Claimholder becomes a judgment Lien creditor in respect of Current Asset
Collateral as a result of its enforcement of its rights as an unsecured creditor
with respect to the Term Loan Obligations or the Applicable Additional Pari
Passu Obligations, such judgment Lien shall be subject to the terms of this
Agreement for all purposes (including in relation to the Revolving Credit
Obligations) as the other Liens securing the Term Loan Obligations and the
Additional Pari Passu Obligations are subject to this Agreement.

     

     

    (f) Nothing
in this Agreement shall prohibit the receipt by the Term Loan Collateral Agent,
any Term Loan Claimholders, any Additional Pari Passu Debt
Representative or any Additional Pari Passu Claimholder of payments of
interest, principal and other amounts owed in respect of the Term Loan
Obligations or the applicable Additional Pari Passu Obligations, so long as such
receipt is not the direct or indirect result of the exercise by the Term Loan
Collateral Agent, any Term Loan Claimholders, any such Additional Pari Passu
Debt Representative or any such Additional Pari Passu Claimholders of rights or
remedies as a secured creditor (including set-off) or enforcement of any Lien
held by any of them, in each case in contravention of this
Agreement.  Nothing in this Agreement impairs or otherwise adversely
affects any rights or remedies the Revolving Credit Facility Collateral Agent or
the Revolving Credit Claimholders may have against the Grantors under the
Revolving Credit Facility Credit Documents, other than with respect to the Fixed
Asset Collateral solely to the extent expressly provided herein.

     

    3.2 Exercise of Remedies
– Restrictions on the Revolving Credit Facility
Collateral Agent

     

    (a) Until the
Discharge of Term Loan Obligations and the Discharge of Additional Pari Passu
Obligations have occurred, whether or not any Insolvency or Liquidation
Proceeding has been commenced by or against any Grantor, the Revolving Credit
Facility Collateral Agent and the Revolving Credit Claimholders:

     

    (1) will not
seek to have a trustee, receiver, liquidator or similar official appointed for
or over, attempt any action to take possession of, or otherwise exercise or seek
to exercise any rights or remedies with respect to any Fixed Asset Collateral or
institute any action or proceeding with respect to such rights or remedies
(including any action of foreclosure); provided that the
Revolving Credit Facility Collateral Agent may exercise the rights provided for
in Section 3.3 (with respect to any Access Period) and may exercise any or all
such other rights or remedies after the passage of a period of at least 180 days
has elapsed since the later of: (A) the date on which the Revolving Credit
Facility Administrative Agent or the Revolving Credit Facility Collateral Agent
declared the existence of any Revolving Credit Facility Default and demanded the
repayment of all the principal amount of any Revolving Credit Obligations; and
(B) the date on which the Term Loan Collateral Agent and each Additional Pari
Passu Debt Representative received notice from the Revolving Credit Facility
Collateral Agent of such declaration of a Revolving Credit Facility Default and
demand for repayment (the “Revolving Credit Standstill
Period”); provided, further, that
notwithstanding anything herein to the contrary, in no event shall the Revolving
Credit Facility Collateral Agent or any Revolving Credit Claimholder exercise
any rights or remedies (other than those under Section 3.3) with respect to the
Fixed Asset Collateral (unless (x) the final step triggering the “one action
rule” or any similar legal provision in any applicable state has occurred and
(y) the applicable Revolving Credit Claimholder has provided

     

    
      
        26 

      

      
         

        
          

        

      

      
         

      

    

     

    written
notice to the Term Loan Claimholders and the Additional Pari Passu Claimholders
no later than five days prior to the commencement of such final step of its
exercise of any rights or remedies permitted hereunder) if, notwithstanding the
expiration of the Revolving Credit Standstill Period, the Term Loan Collateral
Agent, the Term Loan Claimholders, any Additional Pari Passu Debt Representative
or any Series of Additional Pari Passu Claimholders shall have commenced and be
diligently pursuing the exercise of their rights or remedies with respect to all
or any material portion of such Collateral (prompt notice of such exercise to be
given to the Revolving Credit Facility Collateral Agent);

     

     

    (2) will not
contest, protest or object to, or otherwise interfere with, any foreclosure
proceeding or action brought by the Term Loan Collateral Agent, any Term Loan
Claimholder, any Additional Pari Passu Debt Representative or any Additional
Pari Passu Claimholder or any other exercise by the Term Loan Collateral Agent,
any Term Loan Claimholder, any Additional Pari Passu Debt Representative or any
Additional Pari Passu Claimholder of any rights and remedies relating to the
Fixed Asset Collateral, whether under the Term Loan Credit Documents, any
Additional Pari Passu Credit Documents or otherwise; and

     

     

    (3) subject
to their rights under clause (a)(1) above and except as may be permitted in
Section 3.2(c), will not object to the forbearance by the Term Loan Collateral
Agent, the Term Loan Claimholders, any Additional Pari Passu Debt Representative
or any Additional Pari Passu Claimholder from bringing or pursuing any
Collateral Enforcement Action;

     

    provided that in the
case of (1), (2) and (3) above, the Liens granted to secure the Revolving Credit
Obligations of the Revolving Credit Claimholders shall attach to any Proceeds
resulting from any such actions taken by the Term Loan Collateral Agent, any
Term Loan Claimholder, any Additional Pari Passu Debt Representative or any
Additional Pari Passu Claimholder in accordance with this Agreement (after
giving effect to any proper application of such Proceeds to the Term Loan
Obligations and the Additional Pari Passu Obligations) subject to the relative
priorities described in Section 2.

     

    (b) Until the
Discharge of Term Loan Obligations and the Discharge of any applicable
Additional Pari Passu Obligations has occurred, whether or not any Insolvency or
Liquidation Proceeding has been commenced by or against any Grantor, the
Revolving Credit Facility Collateral Agent, on behalf of itself and the
Revolving Credit Claimholders, agrees that the Term Loan Collateral Agent, the
Term Loan Claimholders, the Additional Pari Passu Debt Representatives and the
Additional Pari Passu Claimholders (with respect to such Common Collateral only)
shall have the right to enforce rights, exercise remedies (including set-off and
the right to credit bid their debt) and, in connection therewith (including
voluntary Dispositions of Fixed Asset Collateral by the respective Grantors
after a Term Loan Default or an Additional Pari Passu Default) make
determinations regarding the release, disposition, or restrictions with respect
to the Fixed Asset Collateral without any consultation with or the consent of
the Revolving Credit Facility Collateral Agent or any Revolving Credit
Claimholder; provided that the
Lien securing the Revolving Credit Obligations shall remain on the Proceeds
(other than those properly applied to the Term Loan Obligations and the
Additional Pari Passu Obligations) of such Collateral released or disposed of
subject to the relative priorities described in Section 2.  In
exercising rights and remedies with respect to the Fixed Asset Collateral, the
Revolving Credit Facility Collateral Agent, on behalf of itself and the
Revolving Credit Claimholders, agrees that the Term Loan Collateral Agent, the
Term Loan Claimholders, the Additional Pari Passu Debt Representatives and the
Additional Pari Passu Claimholders may enforce the provisions of the Term Loan
Credit Documents and the Additional Pari Passu Credit Documents, as applicable,
and exercise remedies thereunder, all in such order and in such manner as they
may determine in the exercise of their sole discretion.  Such exercise
and enforcement shall include the rights of an agent appointed by them to sell
or otherwise dispose of the Fixed Asset Collateral upon foreclosure, to incur
expenses in connection with such sale or disposition, and to exercise all the
rights and remedies of a secured creditor under the UCC (and any similar
or

     

    
      
        27 

      

      
         

        
          

        

      

      
         

      

    

     

    equivalent
legislation of any applicable jurisdiction outside the United States) and of a
secured creditor under the Bankruptcy Laws of any applicable
jurisdiction.

     

     

    (c) Notwithstanding
the foregoing, the Revolving Credit Facility Collateral Agent and any Revolving
Credit Claimholder may:

     

     

    (1) file a
claim or statement of interest with respect to the Revolving Credit Obligations;
provided that
an Insolvency or Liquidation Proceeding has been commenced by or against any
Grantor;

     

     

    (2) take any
action in order to create, perfect, preserve or protect its Lien on any of the
Collateral; provided that such
action shall not be inconsistent with the terms of this Agreement and shall not
be adverse to the priority status of the Liens on the Fixed Asset Collateral, or
the rights of the Term Loan Collateral Agent, any of the Term Loan Claimholders,
any Additional Pari Passu Debt Representative or any Additional Pari Passu
Claimholder to exercise remedies in respect thereof;

     

     

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

     

     

    (4) file any
pleadings, objections, motions or agreements which assert rights or interests
available to unsecured creditors of the Grantors arising under either any
Insolvency or Liquidation Proceeding or applicable non-bankruptcy law, in each
case not inconsistent with the terms of this Agreement;

     

     

    (5) vote on
any plan of reorganization, file any proof of claim, make other filings and make
any arguments and motions that are, in each case, in accordance with the terms
of this Agreement, with respect to the Revolving Credit Obligations and the
Current Asset Collateral;

     

     

    (6) exercise
any of its rights or remedies with respect to any of the Collateral after the
termination of the Revolving Credit Standstill Period to the extent permitted by
Section 3.2(a)(1); and

     

     

    (7) make a
cash bid on all or any portion of the Collateral in any foreclosure proceeding
or action.

     

     

    The
Revolving Credit Facility Collateral Agent, on behalf of itself and the
Revolving Credit Claimholders, agrees that it will not take or receive any Fixed
Asset Collateral or any Proceeds of such Collateral in connection with the
exercise of any right or remedy (including set-off) with respect to any such
Collateral in its capacity as a creditor in violation of this
Agreement.  Without limiting the generality of the foregoing, unless
and until the Discharge of Term Loan Obligations and, to the extent applicable
with respect to any specific Common Collateral, the Discharge of Additional Pari
Passu Obligations has occurred, except as expressly provided in this Section
3.2(c) and Sections 3.2(a), 3.3 and 6.3(c)(2), the sole right of the Revolving
Credit Facility Collateral Agent and the Revolving Credit Claimholders with
respect to the Fixed Asset Collateral is to hold a Lien on such Collateral
pursuant to the Revolving Credit Facility Security Documents for the period and
to the extent granted therein and to receive a share of the Proceeds thereof, if
any, after the Discharge of Term Loan Obligations and, to the extent applicable
with respect to any specific Common Collateral, the Discharge of Additional Pari
Passu Obligations has occurred.

     

     

    
      
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    (d) Subject
to Sections 3.2(a), 3.2(c), 3.3 and 6.3(c)(2):

     

     

    (1) the
Revolving Credit Facility Collateral Agent, for itself and on behalf of the
Revolving Credit Claimholders, agrees that the Revolving Credit Facility
Collateral Agent and the Revolving Credit Claimholders will not, except as not
prohibited herein, take any action that would hinder any exercise of remedies
under the Term Loan Credit Documents or the Additional Pari Passu Credit
Documents, or that is otherwise prohibited hereunder, including any sale, lease,
exchange, transfer or other disposition of the Fixed Asset Collateral, whether
by foreclosure or otherwise;

     

     

    (2) the
Revolving Credit Facility Collateral Agent, for itself and on behalf of the
Revolving Credit Claimholders, hereby waives any and all rights it or the
Revolving Credit Claimholders may have as a junior lien creditor with respect to
the Fixed Asset Collateral or otherwise to object to the manner in which the
Term Loan Collateral Agent, the Term Loan Claimholders, any Additional Pari
Passu Debt Representative or the Additional Pari Passu Claimholders seek to
enforce or collect the Term Loan Obligations, or the applicable Additional Pari
Passu Obligations, as applicable, or the Liens on the Fixed Asset Collateral
securing the Term Loan Obligations granted in any of the Term Loan Credit
Documents or to any action that is not prohibited by this Agreement, regardless
of whether any action or failure to act by or on behalf of the Term Loan
Collateral Agent, the Term Loan Claimholders, any Additional Pari Passu Debt
Representative or the Additional Pari Passu Claimholders is adverse to the
interest of the Revolving Credit Claimholders; and

     

     

    (3) the
Revolving Credit Facility Collateral Agent hereby acknowledges and agrees that
no covenant, agreement or restriction contained in any of the Revolving Credit
Facility Security Documents or any other Revolving Credit Facility Credit
Document (other than this Agreement) shall be deemed to restrict in any way the
rights and remedies of the Term Loan Collateral Agent, the Term Loan
Claimholders, any Additional Pari Passu Debt Representative or the Additional
Pari Passu Claimholders, with respect to the Fixed Asset Collateral as set forth
in this Agreement, the Term Loan Credit Documents and the Additional Pari Passu
Credit Documents.

     

     

    (e) Except as
otherwise specifically set forth in Sections 3.2(a), 3.2(d) and 3.5, the
Revolving Credit Facility Collateral Agent and the Revolving Credit Claimholders
may exercise rights and remedies as unsecured creditors against any Grantor and
may exercise rights and remedies with respect to the Current Asset Collateral,
in each case, in accordance with the terms of the Revolving Credit Facility
Credit Documents and applicable law; provided that in the
event that any Revolving Credit Claimholder becomes a judgment Lien creditor in
respect of Fixed Asset Collateral as a result of its enforcement of its rights
as an unsecured creditor with respect to the Revolving Credit Obligations, such
judgment Lien shall be subject to the terms of this Agreement for all purposes
(including in relation to the Term Loan Obligations and, to the extent
applicable with respect to any specific Common Collateral, any Additional Pari
Passu Obligations) as the other Liens securing the Revolving Credit Obligations
are subject to this Agreement.

     

     

    (f) Nothing
in this Agreement shall prohibit the receipt by the Revolving Credit Facility
Collateral Agent or any Revolving Credit Claimholders of payments of interest,
principal and other amounts owed in respect of the Revolving Credit Obligations
so long as such receipt is not the direct or indirect result of the exercise by
the Revolving Credit Facility Collateral Agent or any Revolving Credit
Claimholders of rights or remedies as a secured creditor (including set-off) or
enforcement of any Lien held by any of them, in each case in contravention of
this Agreement.  Nothing in this Agreement impairs or otherwise
adversely affects any rights or remedies the Term Loan Collateral Agent or the
Term Loan Claimholders, any Additional Pari Passu Debt Representative or the
Additional Pari Passu Claimholders may have against the Grantors under the Term
Loan Credit Documents and the Additional

     

    
      
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    Pari
Passu Credit Documents, other than with respect to the Current Asset Collateral
solely to the extent expressly provided herein.

     

     

    3.3 Exercise of Remedies
– Collateral Access
Rights

     

    (a) The
Revolving Credit Facility Collateral Agent, the Term Loan Collateral Agent and
each Additional Pari Passu Debt Representative agree not to commence any
Collateral Enforcement Action until the earlier to occur of (i) delivery of an
Enforcement Notice to each other Agent and (ii) the date on which any Insolvency
or Liquidation Proceeding is commenced by or against any Grantor (provided that in the
case of this clause (ii), the relevant Agent shall deliver an Enforcement Notice
to the other Agent promptly following commencement of any such Collateral
Enforcement Action).  Subject to the provisions of Sections 3.1 and
3.2 above, any Agent may, to the extent permitted by applicable law, join in any
judicial proceedings commenced by another Agent to enforce Liens on the
Collateral, provided that no
Agent, nor any of the Revolving Credit Claimholders, the Term Loan Claimholders
or the Additional Pari Passu Claimholders, as the case may be, shall interfere
with the Collateral Enforcement Actions of another with respect to Collateral in
which such other party has the benefit of the priority Lien in accordance
herewith.

     

     

    (b) If either
(x) the Term Loan Collateral Agent, or any agent or representative of the
Term Loan Collateral Agent, or any receiver, or (y) any Additional Pari
Passu Debt Representative or any representative of such Additional Pari Passu
Debt Representative, or any receiver shall obtain possession or physical control
of any of the Mortgaged Premises, the Term Loan Collateral Agent or such
Additional Pari Passu Debt Representative shall promptly notify the Revolving
Credit Facility Collateral Agent of that fact (such notice, a “Notice of Occupancy”) and the
Revolving Credit Facility Collateral Agent shall, within ten Business Days
thereafter, notify such Agent sending the Notice of Occupancy (hereinafter, the
“Notifying Agent”) as to whether the Revolving
Credit Facility Collateral Agent desires to exercise access rights under this
Agreement (such notice, an “Access Acceptance Notice”), at
which time the parties shall confer in good faith to coordinate with respect to
the Revolving Credit Facility Collateral Agent’s exercise of such access rights;
provided, that
it is understood and agreed that the Notifying Agent shall obtain possession or
physical control of the Mortgaged Premises in the manner provided in the
applicable Term Loan Security Documents or Additional Pari Passu Security
Documents.  Access rights may apply to differing parcels of Mortgaged
Premises at differing times, in which case, a differing Access Period may apply
to each such parcel.  In the event that the Revolving Credit Facility
Collateral Agent elects to exercise its access rights as provided in this
Agreement, the Notifying Agent agrees, for itself and on behalf of the Term Loan
Claimholders or the applicable Additional Pari Passu Claimholders, as
applicable, that in the event that any Term Loan Claimholder or applicable
Additional Pari Passu Claimholder, as applicable, exercises its rights to sell
or otherwise dispose of any Mortgaged Premises, whether before or after the
delivery of a Notice of Occupancy to the Revolving Credit Facility Collateral
Agent, the Notifying Agent shall (i) provide access rights to the Revolving
Credit Facility Collateral Agent for the duration of the Access Period in
accordance with this Agreement and (ii) if such a sale or other disposition
occurs prior to the Revolving Credit Facility Collateral Agent delivering an
Access Acceptance Notice during the time period provided therefor, or if
applicable, the expiration of the applicable Access Period, shall ensure that
the purchaser or other transferee of such Mortgaged Premises provides the
Revolving Credit Facility Collateral Agent the opportunity to exercise its
access rights, and upon delivery of an Access Acceptance Notice to such
purchaser or transferee, continued access rights to the Revolving Credit
Facility for the duration of the applicable Access Period, in the manner and to
the extent required by this Agreement.

     

    (c) Upon
delivery of notice to the Notifying Agent by the Revolving Credit Facility
Collateral Agent as provided in Section 3.3(b), the Access Period shall
commence for the subject parcel of Mortgaged Premises.  During the
Access Period, the Revolving Credit Facility Collateral Agent and
its

     

    
      
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    agents,
representatives and designees shall have a non-exclusive right to have access
to, and a rent free right to use, the Fixed Asset Collateral for the purpose of
arranging for and effecting the sale or disposition of Current Asset Collateral,
including the production, completion, packaging and other preparation of
such Current Asset Collateral for sale or disposition.  During any
such Access Period, the Revolving Credit Facility Collateral Agent and its
agents, representatives and designees (and Persons employed on their respective
behalves), may continue to operate, service, maintain, process and sell the
Current Asset Collateral, as well as to engage in bulk sales of Current Asset
Collateral.  The Revolving Credit Facility Collateral Agent shall take
proper care of any Fixed Asset Collateral that is used by the Revolving Credit
Facility Collateral Agent during the Access Period and repair and replace any
damage (ordinary wear-and-tear excepted) caused by the Revolving Credit Facility
Collateral Agent or its agents, representatives or designees and the Revolving
Credit Facility Collateral Agent shall comply with all applicable laws in
connection with its use or occupancy of the Fixed Asset
Collateral.  The Revolving Credit Facility Collateral Agent and the
Revolving Credit Claimholders shall (to the extent that there are sufficient
available proceeds of Current Asset Collateral for the purposes of paying such
indemnity) indemnify and hold harmless the Term Loan Collateral Agent, the Term
Loan Claimholders, the Additional Pari Passu Debt Representatives and the
Additional Pari Passu Claimholders for any injury or damage to Persons or
property caused by the acts or omissions of Persons under its
control.  The Revolving Credit Facility Collateral Agent and the
Notifying Agent shall cooperate and use reasonable efforts to ensure that their
activities during the Access Period as described above do not interfere
materially with the activities of the other as described above, including the
right of the Notifying Agent to commence foreclosure of the Term Loan Mortgages
or the Additional Pari Passu Mortgages, as applicable, to show the Fixed Asset
Collateral to prospective purchasers and to ready the Fixed Asset Collateral for
sale.

     

     

    (d) If any
order or injunction is issued or stay is granted or otherwise comes into force
which prohibits the Revolving Credit Facility Collateral Agent from exercising
any of its rights hereunder, then at the Revolving Credit Facility Collateral
Agent’s option, the Access Period granted to the Revolving Credit Facility
Collateral Agent under this Section 3.3 shall be stayed during the period of
such prohibition and shall continue thereafter for the number of days remaining
as required under this Section 3.3.  If the Term Loan Collateral Agent
or any Additional Pari Passu Debt Representative shall foreclose or otherwise
sell any of the Fixed Asset Collateral, the Term Loan Collateral Agent or such
Additional Pari Passu Debt Representative, as applicable, will notify the buyer
thereof of the existence of this Agreement and that the buyer is acquiring the
Fixed Asset Collateral subject to the terms of this Agreement.

     

     

    3.4 Exercise of Remedies
– Intellectual Property
Rights/Access to Information.  The Term Loan Collateral Agent,
on behalf of itself and the Term Loan Claimholders, hereby grants (to the full
extent of the Term Loan Collateral Agent’s rights and interests therein) and
each Additional Pari Passu Debt Representative, on behalf of itself and the
Additional Pari Passu Claimholders, hereby grants (to the full extent of such
Additional Pari Passu’s Agent’s rights and interests therein) the Revolving
Credit Facility Collateral Agent and its agents, representatives and designees,
(a) a royalty free, rent free non-exclusive worldwide license (or sublicense, as
applicable, subject to the terms of the underlying license) and lease (or
sublease, as applicable, subject to the terms of the underlying lease) to use
all of the Fixed Asset Collateral constituting Intellectual Property, solely to
the extent necessary to complete the sale, lease transfer or other disposition
of inventory and (b) a royalty free nonexclusive worldwide license (or
sublicense, subject to the terms of the underlying license) (which will be
binding on any successor or assignee of the Intellectual Property) to use any
and all Intellectual Property, in each case, at any time in connection with its
Collateral Enforcement Action; provided that the
royalty free, rent free non-exclusive license (or sublicense, as applicable) and
lease (or sublease, as applicable) granted in clause (a) shall immediately
expire upon the earlier of (i) the sale, lease, transfer or other disposition of
all such inventory and (ii) the occurrence of the Discharge of Revolving Credit
Obligations.

     

    
      
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    3.5 Exercise of Remedies
– Set Off and Tracing of
and Priorities
in Proceeds.

     

     

    (a) The
Revolving Credit Facility Collateral Agent, for itself and on behalf of the
Revolving Credit Claimholders, acknowledges and agrees that, to the extent the
Revolving Credit Facility Collateral Agent or any Revolving Credit Claimholder
exercises its rights of setoff against any Grantors’ Deposit Accounts or
Securities Accounts that contain identifiable Proceeds of Fixed Asset
Collateral, a percentage of the amount of such setoff equal to the percentage
that such Proceeds bear to the total amount on deposit in or credited to
the balance of such Deposit Accounts or Securities Accounts shall be deemed to
constitute Fixed Asset Collateral, which amount shall be held and distributed
pursuant to Section 4.3; provided that the
foregoing shall not apply to any setoff by the Revolving Credit Facility
Collateral Agent against any Current Asset Collateral to the extent applied to
the payment of Revolving Credit Obligations.

     

     

    (b) The Term
Loan Collateral Agent, for itself and on behalf of the Term Loan Claimholders,
and each Additional Pari Passu Collateral Agent, for itself and on behalf of the
applicable Additional Pari Passu Claimholders, also agrees that prior to an
issuance of an Enforcement Notice, all funds deposited in a Deposit
Account or a Securities Account that is subject to an Account Agreement in
favor of the Revolving Credit Facility Collateral Agent and constitutes Current
Asset Collateral and then applied to the Revolving Credit Obligations shall be
treated as Current Asset Collateral and, unless the Revolving Credit Facility
Collateral Agent has actual knowledge to the contrary, any claim that payments
made to the Revolving Credit Facility Collateral Agent through the Deposit
Accounts and Securities Accounts that are subject to such Account Agreements,
are Proceeds of or otherwise constitute Fixed Asset Collateral are waived by the
Term Loan Collateral Agent, the Term Loan Claimholders, the Additional Pari
Passu Debt Representatives and the Additional Pari Passu
Claimholders.

     

     

    (c) The Revolving
Credit Facility Collateral Agent, for itself and on behalf of the Revolving
Credit Claimholders, the Term Loan Collateral Agent, for itself and on behalf of
the Term Loan Claimholders, and each Additional Pari Passu Collateral Agent, for
itself and on behalf of the applicable Additional Pari Passu Claimholders,
further agree that prior to an issuance of an Enforcement Notice, any Proceeds
of Collateral, whether or not deposited in a Deposit Account or a Securities
Account subject to an Account Agreement in favor of the Revolving Credit
Facility Collateral Agent, shall not (as between the Agents, the Revolving
Credit Claimholders, the Term Loan Claimholders and the Additional Pari Passu
Claimholders) be treated as Proceeds of Collateral for purposes of determining
the relative priorities in the Collateral.

     

     

    SECTION
4.  Payments.

     

    4.1 Application of
Proceeds.

     

    (a) So long
as the Discharge of Revolving Credit Obligations has not occurred, whether or
not any Insolvency or Liquidation Proceeding has been commenced by or against
any Grantor, all Current Asset Collateral or Proceeds thereof received in
connection with the sale or other disposition of, or collection on, such
Collateral upon the exercise of remedies by the Revolving Credit Facility
Collateral Agent or any Revolving Credit Claimholder, shall be applied by the
Revolving Credit Facility Collateral Agent to the Revolving Credit Obligations
in such order as specified in the relevant Revolving Credit Facility Credit
Documents.  Upon the Discharge of Revolving Credit Obligations,
(A) if the Discharge of Term Loan Obligations and the Discharge of the
Additional Pari Passu Obligations have not occurred, the Revolving Credit
Facility Collateral Agent shall deliver to the Designated Fixed Asset Collateral
Representative, any Common Collateral and Proceeds of Common Collateral held by
it as a result of the exercise of remedies in the same form as received, with
any necessary endorsements or as a court of competent jurisdiction may otherwise
direct to be applied on a ratable basis based on the amount

     

    
      
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    of Term
Loan Obligations then outstanding and the amount of Additional Pari Passu
Obligations then outstanding, in each case secured by such Common Collateral
under the respective Term Loan Credit Documents and Additional Pari Passu Credit
Documents (it being understood that in each case, such proceeds shall be
distributed by each Agent in such order specified in the Term Loan Credit
Documents or the Additional Pari Passu Credit Documents, as applicable) or
(B) if the Discharge of Term Loan Obligations has occurred but the
Discharge of the Additional Pari Passu Obligations has not occurred, to
Designated Fixed Asset Collateral Agent for distribution in accordance with the
applicable Additional Pari Passu Credit Documents, or (C) if the Discharge of
the Additional Pari Passu Obligations has occurred (or no Additional Pari Passu
Obligations are otherwise outstanding for any reason) but the Discharge of Term
Loan Obligations has not occurred, to the Term Loan Administrative Agent for
distribution in accordance with the Term Loan Agreement, or (D) if the Discharge
of Term Loan Obligations and the Discharge of the Additional Pari Passu
Obligations have occurred, the Revolving Credit Facility Collateral Agent shall
direct and deliver such Collateral and Proceeds of Collateral held by it as a
result of the exercise of remedies as a court of competent jurisdiction
directs.

     

     

    (b) So long
as the Discharge of Term Loan Obligations and the Discharge of the Additional
Pari Passu Obligations have not occurred, whether or not any Insolvency or
Liquidation Proceeding has been commenced by or against any Grantor, all Fixed
Asset Collateral or Proceeds thereof received in connection with the sale or
other disposition of, or collection on, such Collateral upon the exercise of
remedies by the Term Loan Collateral Agent, any Term Loan Claimholder, any
Additional Pari Passu Debt Representative or any Additional Pari Passu
Claimholder shall be applied on a ratable basis based on the amount of Term Loan
Obligations and Additional Pari Passu Obligations secured by such Common
Collateral outstanding under the respective Term Loan Credit Documents and
Additional Pari Passu Credit Documents (it being understood that in each case,
such proceeds shall be distributed by each Agent in such order specified in the
Term Loan Credit Documents or the applicable Additional Pari Passu Credit
Documents).  Upon the Discharge of Term Loan Obligations and, to the
extent applicable with respect to Fixed Asset Collateral or proceeds thereof
constituting Common Collateral, upon the Discharge of the Additional Pari
Passu Obligations, (A) if the Discharge of Revolving Credit Obligations has not
occurred, the Term Loan Collateral Agent (to the extent it holds Collateral or
Proceeds of Collateral) and the applicable Additional Pari Passu Debt
Representatives (to the extent any such Additional Pari Passu Debt
Representative holds Collateral or the Proceeds thereof) shall deliver to the
Revolving Credit Facility Collateral Agent any Collateral and Proceeds of
Collateral held by it as a result of the exercise of remedies in the same form
as received, with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct to be applied by the Revolving Credit Facility
Collateral Agent to the Revolving Credit Obligations in such order as specified
in the Revolving Credit Facility Security Documents or (B) if the Discharge of
Revolving Credit Obligations has occurred, the Term Loan Collateral Agent (to
the extent it holds Collateral or Proceeds of Collateral) and the applicable
Additional Pari Passu Debt Representatives (to the extent any such
Additional Pari Passu Debt Representative holds Collateral or the Proceeds
thereof) shall direct and deliver such Collateral and Proceeds of Collateral
held by it as a result of the exercise of remedies as a court of competent
jurisdiction directs.

     

     

    4.2 Payments Over in Violation
of Agreement.  So long as neither the Discharge of Revolving
Credit Obligations nor both the Discharge of Term Loan Obligations and the
Discharge of the Additional Pari Passu Obligations has occurred, whether or not
any Insolvency or Liquidation Proceeding has been commenced by or against any
Grantor, any Collateral or Proceeds thereof (including assets or Proceeds
subject to Liens referred to in the final sentence of Section 2.3) received by
any Agent or any Term Loan Claimholders, Revolving Credit Claimholders or
Additional Pari Passu Claimholders in connection with the exercise of any right
or remedy (including set-off) relating to the Collateral in contravention of
this Agreement shall be segregated and held in trust for and on behalf of, and
forthwith paid over to, the appropriate Agent for the benefit of the Term Loan
Claimholders, the Revolving Credit Claimholders, or Additional Pari Passu
Claimholders, as the case may be, in the same form as received,

     

    
      
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    with any
necessary endorsements or as a court of competent jurisdiction may otherwise
direct.  Each Agent is hereby authorized by each other Agent to make
any such endorsements as agent for the other Agents or any Term Loan
Claimholders or Revolving Credit Claimholders or Additional Pari Passu
Claimholders, as the case may be.  This authorization is coupled with
an interest and is irrevocable until all of the Discharge of Revolving Credit
Obligations, the Discharge of Term Loan Obligations, and the Discharge of the
Additional Pari Passu Obligations have occurred.

     

     

    4.3 Application of
Payments.  Subject to the other terms of this Agreement, all
payments received by (a) the Revolving Credit Facility Collateral Agent or the
Revolving Credit Claimholders may be applied, reversed and reapplied, in whole
or in part, to the Revolving Credit Obligations to the extent provided for in
the Revolving Credit Facility Credit Documents, (b) the Term Loan
Collateral Agent or the Term Loan Claimholders may be applied, reversed and
reapplied, in whole or in part, to the Term Loan Obligations to the extent
provided for in the Term Loan Credit Documents, and (c) each Additional Pari
Passu Debt Representative or the applicable Additional Pari Passu Claimholders
may be applied, reversed and reapplied, in whole or in part, to the applicable
Additional Pari Passu Obligations to the extent provided for in the applicable
Additional Pari Passu Credit Documents.

     

     

    4.4 Reinstatement.

     

     

    (a) To the
extent any payment with respect to any Revolving Credit Obligation (whether by
or on behalf of any Grantor, as Proceeds of security, enforcement of any right
of setoff or otherwise) is declared to be a fraudulent conveyance or a
preference in any respect, set aside or required to be paid to a debtor in
possession, any Term Loan Claimholders or Additional Pari Passu Claimholders,
receiver or similar Person, whether in connection with any Insolvency or
Liquidation Proceeding or otherwise, 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 Revolving Credit Claimholders, the Term
Loan Claimholders and the Additional Pari Passu Claimholders, be deemed to be
reinstated and outstanding as if such payment had not occurred.  To
the extent that any interest, fees, expenses or other charges (including
Post-Petition Interest) to be paid pursuant to the Revolving Credit Facility
Credit Documents are disallowed by order of any court, including by order of a
Bankruptcy Court in any Insolvency or Liquidation Proceeding, such interest,
fees, expenses and charges (including Post-Petition Interest) shall, as among
the Revolving Credit Claimholders, the Term Loan Claimholders and the Additional
Pari Passu Claimholders, be deemed to continue to accrue and be added to the
amount to be calculated as the “Revolving Credit Obligations.”

     

     

    (b) To the
extent any payment with respect to any Term Loan Obligation or any Additional
Pari Passu Obligation (whether by or on behalf of any Grantor, as Proceeds of
security, enforcement of any right of setoff or otherwise) is declared to be a
fraudulent conveyance or a preference in any respect, set aside or required to
be paid to a debtor in possession, any Revolving Credit Claimholders or any
other Additional Pari Passu Claimholders, receiver or similar Person, whether in
connection with any Insolvency or Liquidation Proceeding or otherwise, 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 Term Loan
Claimholders, the Revolving Credit Claimholders and any other Additional Pari
Passu Claimholders, be deemed to be reinstated and outstanding as if such
payment had not occurred.  To the extent that any interest, fees,
expenses or other charges (including Post-Petition Interest) to be paid pursuant
to the Term Loan Credit Documents are disallowed by order of any court,
including by order of a Bankruptcy Court in any Insolvency or Liquidation
Proceeding, such interest, fees, expenses and charges (including Post-Petition
Interest) shall, as between the Term Loan Claimholders and the Revolving Credit
Claimholders, be deemed to continue to accrue and be added to the amount to be
calculated as the “Term Loan Obligations.”

     

    
      
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    SECTION
5.  Other
Agreements.

     

    5.1 Releases.

     

     

    (a) (i) If in
connection with the exercise of the Revolving Credit Facility Collateral Agent’s
remedies in respect of any Collateral as provided for in Section 3.1, the
Revolving Credit Facility Collateral Agent, for itself or on behalf of any of
the Revolving Credit Claimholders, releases any of its Liens on any part of the
Current Asset Collateral, then the Liens, if any, of the Term Loan Collateral
Agent, for itself or for the benefit of the Term Loan Claimholders, and the
Liens, if any, of the Additional Pari Passu Debt Representative, for itself or
for the benefit of the Additional Pari Passu Claimholders on the Current Asset
Collateral sold or disposed of in connection with such exercise, shall be
automatically, unconditionally and simultaneously released.  The Term
Loan Collateral Agent, for itself or on behalf of any such Term Loan
Claimholders, and the Additional Pari Passu Debt Representative, for itself or
for the benefit of the Additional Pari Passu Claimholders, promptly shall
execute and deliver to the Revolving Credit Facility Collateral Agent or such
Grantor such termination statements, releases and other documents as the
Revolving Credit Facility Collateral Agent or such Grantor may request to
effectively confirm such release.

     

     

    (ii)           If
in connection with the exercise of the Term Loan Collateral Agent’s remedies or
the Additional Pari Passu Representative’s remedies in respect of any Fixed
Asset Collateral as provided for in Section 3.2, the Term Loan Collateral Agent,
for itself or on behalf of any of the Term Loan Claimholders and the applicable
Additional Pari Passu Debt Representative, on behalf of any of the Additional
Pari Passu Claimholders, each release their respective Liens on any part of
the Fixed Asset Collateral, then the Liens, if any, of the Revolving Credit
Facility Collateral Agent, for itself or for the benefit of the Revolving Credit
Claimholders, on such Fixed Asset Collateral sold or disposed of in connection
with such exercise, shall be automatically, unconditionally and simultaneously
released.  The Revolving Credit Facility Collateral Agent, for itself
or on behalf of any such Revolving Credit Claimholders, promptly shall execute
and deliver to the Term Loan Collateral Agent, the applicable Additional Pari
Passu Debt Representative or such Grantor such termination statements, releases
and other documents as the Term Loan Collateral Agent or such Grantor may
request to effectively confirm such release.

     

     

    (b) If in
connection with any sale, lease, exchange, transfer or other disposition of any
Collateral (collectively, a “Disposition”) permitted under
the terms of each of the Revolving Credit Facility Credit Documents, the
Term Loan Credit Documents and the applicable Additional Pari Passu Credit
Documents, if any (other than in connection with the exercise of the respective
Agent’s rights and remedies in respect of the Collateral as provided for in
Sections 3.1 and 3.2), (i) the Revolving Credit Facility Collateral Agent, for
itself or on behalf of any of the Revolving Credit Claimholders, releases any of
its Liens on any part of the Current Asset Collateral, in each case other than
(A) in connection with the Discharge of Revolving Credit Obligations or (B)
after the occurrence and during the continuance of a Term Loan Default or
Additional Pari Passu Loan Default, then the Liens, if any, of the Term Loan
Collateral Agent, for itself or for the benefit of the Term Loan Claimholders,
and the Liens, if any, of the applicable Additional Pari Passu Debt
Representative, for itself and for the benefit of the applicable Additional Pari
Passu Claimholders, on such Collateral shall, in each case, be automatically,
unconditionally and simultaneously released, and (ii) the Term Loan Collateral
Agent, for itself or on behalf of any of the Term Loan Claimholders, and each
applicable Additional Pari Passu Debt Representative, for itself and for the
benefit of the applicable Additional Pari Passu Claimholders, releases any
of its Liens on any part of the Fixed Asset Collateral, in each case other than
(A) in connection with the Discharge of Term Loan Obligations or the Discharge
of Additional Pari Passu Obligations, or (B) after the occurrence and during the
continuance of a Revolving Credit Facility Default, then the Liens, if any, of
the Revolving Credit Facility Collateral Agent, for itself or for the benefit of
the

     

    
      
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    Revolving
Credit Claimholders, on such Collateral (and, if such Collateral includes the
Capital Stock of any Subsidiary, the Liens on Collateral owned by such
Subsidiary) shall be automatically, unconditionally and simultaneously
released.  The Revolving Credit Facility Collateral Agent, Term Loan
Collateral Agent, each for itself and on behalf of any such Revolving Credit
Claimholders or Term Loan Claimholders, and each Additional Pari Passu Debt
Representative, for itself and for the benefit of the applicable Additional Pari
Passu Claimholders, as the case may be, each shall promptly execute and deliver
to each other Agent or such Grantor such termination statements, releases and
other documents as such other Agent or such Grantor may request to effectively
confirm such release.

     

     

    (c) Until the
Discharge of Revolving Credit Obligations, the Discharge of Term Loan
Obligations and the Discharge of the Additional Pari Passu Obligations shall
occur, the Revolving Credit Facility Collateral Agent, for itself and on behalf
of the Revolving Credit Claimholders, the Term Loan Collateral Agent, for itself
and on behalf of the Term Loan Claimholders, and each Additional Pari Passu Debt
Representative, for itself and for the benefit of the applicable Additional Pari
Passu Claimholders, as the case may be, hereby irrevocably constitutes and
appoints each other Agent and any officer or agent of such other Agent, with
full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Agent or such
holder or in such Agent’s own name, from time to time in such other Agent’s
discretion, for the purpose of carrying out the terms of this Section 5.1, to
take any and all appropriate action and to execute any and all documents and
instruments which may be necessary to accomplish the purposes of this Section
5.1, including any endorsements or other instruments of transfer or
release.

     

     

    (d) Until the
Discharge of Revolving Credit Obligations, the Discharge of Term Loan
Obligations and the Discharge of Additional Pari Passu Obligations shall occur,
to the extent that the Agents, the Revolving Credit Claimholders, the Term Loan
Claimholders or the Additional Pari Passu Claimholders (i) have released any
Lien on Collateral and such Lien is later reinstated or (ii) obtain any new
Liens from any Grantor, then each other Agent, for itself and for the Revolving
Credit Claimholders, Term Loan Claimholders or Additional Pari Passu
Claimholders, as the case may be, shall, subject to the exceptions set forth in
Section 2.3, be granted a Lien on any such Collateral, subject to the lien
priority provisions of this Agreement.

     

     

    5.2 Insurance.

     

    (a) Unless
and until the Discharge of Revolving Credit Obligations has occurred, subject to
the terms of, and the rights of the Grantors under, the Revolving Credit
Facility Credit Documents, the Term Loan Collateral Agent, for itself and on
behalf of the Term Loan Claimholders and Additional Pari Passu Debt
Representative, for itself and on behalf of the Additional Pari Passu
Claimholders, agrees, that (i) the Revolving Credit Facility Collateral Agent
and the Revolving Credit Claimholders shall have the sole and exclusive right to
adjust settlement for any insurance policy covering the Current Asset Collateral
or the Liens with respect thereto in the event of any loss thereunder or with
respect thereto and to approve any award granted in any condemnation or similar
proceeding (or any deed in lieu of condemnation) affecting such Collateral; (ii)
all Proceeds of any such policy and any such award (or any payments with respect
to a deed in lieu of condemnation) if in respect of such Collateral and to the
extent required by the Revolving Credit Facility Credit Documents shall be paid
to the Revolving Credit Facility Collateral Agent for the benefit of the
Revolving Credit Claimholders pursuant to the terms of the Revolving Credit
Facility Credit Documents (including for purposes of cash collateralization of
letters of credit, bank guarantees and similar instruments) and thereafter,
to the extent no Revolving Credit Obligations are outstanding, and subject
to the rights of the Grantors under the Term Loan Credit Documents and the
Additional Pari Passu Credit Documents, to the Term Loan Collateral Agent for
the benefit of the Term Loan Claimholders to the extent required under the Term
Loan Security Documents and the Additional Pari Passu Debt Representative, for
itself and on behalf of the Additional

     

    
      
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    Pari
Passu Claimholders, and then, to the extent no Term Loan Obligations and no
Additional Pari Passu Obligations are outstanding, to the owner of the
subject property, such other Person as may be entitled thereto or as a court of
competent jurisdiction may otherwise direct, and (iii) if the Term Loan
Collateral Agent, any Term Loan Claimholder, any Additional Pari Passu Debt
Representative or any Additional Pari Passu Claimholders shall, at any time,
receive any Proceeds of any such insurance policy or any such award or payment
in contravention of this Agreement, it shall segregate and hold in trust and
forthwith pay such Proceeds over to the Revolving Credit Facility Collateral
Agent in accordance with the terms of Section 4.2.

     

     

    (b) Unless
and until the Discharge of Term Loan Obligations and the Discharge of Additional
Pari Passu Debt have occurred, subject to the terms of, and the rights of
the Grantors under, the Term Loan Credit Documents and the Additional Pari Passu
Credit Documents, the Revolving Credit Facility Collateral Agent, for itself and
on behalf of the Revolving Credit Claimholders, agrees that (i) the Term Loan
Collateral Agent, the Term Loan Claimholders, the Additional Pari Passu Debt
Representatives and the Additional Pari Passu Claimholders shall have the
sole and exclusive right to adjust settlement for any insurance policy covering
the Fixed Asset Collateral or the Liens with respect thereto in the event of any
loss thereunder or with respect thereto and to approve any award granted in any
condemnation or similar proceeding (or any deed in lieu of condemnation)
affecting such Collateral; (ii) all Proceeds of any such policy and any
such award (or any payments with respect to a deed in lieu of condemnation) if
in respect of such Collateral and to the extent required by the Term Loan Credit
Documents and the Additional Pari Passu Credit Documents shall be paid to
Designated Fixed Asset Collateral Representative on behalf of the Term Loan
Collateral Agent for the benefit of the Term Loan Claimholders and the
Additional Pari Passu Debt Representative, for itself and on behalf of
the Additional Pari Passu Claimholders, if any, pursuant to the terms
of the Term Loan Credit Documents and the Additional Pari Passu Credit
Documents and thereafter, to the extent no Term Loan Obligations and no
Additional Pari Passu Obligations are outstanding, and subject to the
rights of the Grantors under the Revolving Credit Facility Credit Documents, to
the Revolving Credit Facility Collateral Agent for the benefit of the Revolving
Credit Claimholders to the extent required under the Revolving Credit Facility
Security Documents and then, to the extent no Revolving Credit Obligations are
outstanding, to the owner of the subject property, such other Person as may be
entitled thereto or as a court of competent jurisdiction may otherwise direct,
and (iii) if the Revolving Credit Facility Collateral Agent or any Revolving
Credit Claimholder shall, at any time, receive any Proceeds of any such
insurance policy or any such award or payment in contravention of this
Agreement, it shall segregate and hold in trust and forthwith pay such Proceeds
over to the Designated Fixed Asset Collateral Representative on behalf of
the Term Loan Collateral Agent and the Additional Pari Passu Debt
Representative in accordance with the terms of Section 4.2.

     

     

    (c) To
effectuate the foregoing, each Agent shall each receive separate lender’s loss
payable endorsements naming themselves as loss payee and additional insured, as
their interests may appear, with respect to policies which insure Collateral
hereunder.  To the extent any Proceeds are received for business
interruption or for any liability or indemnification and those Proceeds are not
compensation for a casualty loss with respect to the Fixed Asset Collateral,
such Proceeds shall first be applied to repay the Revolving Credit Obligations
(to the extent required pursuant to the Revolving Credit Agreement) and then be
applied, to the extent required by the Term Loan Credit Documents or the
applicable Additional Pari Passu Credit Documents, to the Term Loan Obligations
and the applicable Additional Pari Passu Obligations ratably.

     

     

    5.3 Amendments to Revolving
Credit Facility
Credit Documents, the Term Loan Credit
Documents and
the Additional
Pari Passu Credit Documents;
Refinancing.

     

     

    
      
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    (a) The Term
Loan Credit Documents and the Additional Pari Passu Credit Documents may be
amended, supplemented or otherwise modified in accordance with their respective
terms and the Term Loan Agreement and each Additional Pari Passu Loan
Agreement may be Refinanced, in each case, without notice to, or the
consent of the Revolving Credit Facility Collateral Agent or the Revolving
Credit Claimholders, all without affecting the lien subordination or other
provisions of this Agreement; provided that, in
each case, the holders of such Refinancing debt bind themselves in a writing
addressed to the Revolving Credit Facility Collateral Agent and the Revolving
Credit Claimholders to the terms of this Agreement and any such amendment,
supplement, modification or Refinancing shall not, without the consent of the
Revolving Credit Facility Collateral Agent:

     

    (1) increase
the sum of the then outstanding aggregate principal amount of the Term Loan
Agreement in excess of the Term Loan Cap Amount;

     

    (2) increase
the “Applicable Margin” or similar component of the interest rate by more than
3% per annum at any level of the pricing grid applicable thereto (excluding
increases resulting from the accrual of interest at the default rate);
or

     

    (3) contravene
any provision of this Agreement.

     

    (b) The
Revolving Credit Facility Credit Documents may be amended, supplemented or
otherwise modified in accordance with their terms and the Revolving Credit
Agreement may be Refinanced, in each case, without notice to, or the consent of
the Term Loan Collateral Agent, the Term Loan Claimholders, any Additional Pari
Passu Debt Representative or the Additional Pari Passu Claimholders, all without
affecting the lien subordination or other provisions of this Agreement; provided that the
holders of such Refinancing debt bind themselves in a writing addressed to the
Term Loan Collateral Agent, the Term Loan Claimholders, the applicable
Additional Pari Passu Debt Representative and the applicable Additional Pari
Passu Claimholders to the terms of this Agreement and any such amendment,
supplement, modification or Refinancing shall not, without the consent of the
Term Loan Collateral Agent and any Additional Pari Passu Debt
Representative:

     

    (1) except to
the extent permitted pursuant to Section 6.1(a), increase the aggregate
commitments of the Revolving Credit Lenders to an amount greater than the
Revolving Credit Facility Cap Amount;

     

    (2) increase
the “Applicable Margin” or similar component of the interest rate by more than
3% per annum at any level of the pricing grid applicable thereto (excluding
increases resulting from the accrual of interest at the default rate);
or

     

    (3) contravene
any provision of this Agreement.

     

    (c) Each of
the Revolving Credit Facility Collateral Agent, the Term Loan Collateral Agent
and each Additional Pari Passu Debt Representative shall use good faith
efforts to notify each other party of any written amendment or modification to
the Revolving Credit Agreement, the Term Loan Agreement and any applicable
Additional Pari Passu Loan Agreement, but the failure to do so shall not create
a cause of action against the party failing to give such notice or create any
claim or right on behalf of any third party.

     

    (d) Except to
the extent such legend would be prohibited by or inconsistent with the laws of
any applicable jurisdiction outside of the United States, each of the Revolving
Credit Facility Administrative Agent, the Term Loan Administrative Agent and
each Additional Pari Passu Debt Representative will cause to be clearly,
conspicuously and prominently inserted on the face of each

     

    
      
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    Revolving
Credit Facility Security Document, each Term Loan Security Document and each
Additional Pari Passu Security Document to which a Grantor is a party, as well
as any renewals or replacements thereof, the following legend “This instrument,
the rights and obligations evidenced hereby, and the liens created hereunder,
are subordinate in the manner and to the extent set forth in the Intercreditor
Agreement, dated as of February 28, 2008, by and among SOLUTIA INC., a Delaware
corporation (the “Company”), each of the Company’s Subsidiaries party thereto
from time to time and CITIBANK, N.A. (“Citi”), in its capacity as administrative
agent for the holders of the Term Loan Obligations, and as collateral agent for
the holders of the Term Loan Obligations, Citi, in its capacity as
administrative agent for the holders of the Revolving Credit Obligations,
and as collateral agent for the holders of the Revolving Credit Obligations, and
[insert applicable
Additional Pari Passu
Loan Agreement
description], as amended from time to time; and each holder of this
instrument, by its acceptance hereof, irrevocably agrees to be bound by the
provisions of the Intercreditor Agreement.”

     

     

    5.4 Bailees for
Perfection.

     

    (a) (i) Each
Agent agrees to hold that part of the Collateral that is in its possession or
control (or in the possession or control of its agents or bailees) (such
Collateral being the “Pledged
Collateral”) as collateral agent for the Revolving Credit Claimholders or
the Term Loan Claimholders or the Additional Pari Passu Claimholders, as the
case may be, and on behalf of and for the benefit of each other Agent (such
bailment being intended, among other things, to satisfy the requirements of
Sections 8-106(d)(3), 8-301(a)(2) and 9-313(c) of the UCC) and any of such other
Agent’s assignees solely for the purpose of perfecting the security interest
granted under the Revolving Credit Facility Credit Documents, the Term Loan
Credit Documents and the applicable Additional Pari Passu Credit Documents,
respectively, subject to the terms and conditions of this Section
5.4.

     

     

    (ii)           To
the extent a junior pledge of or junior lien on any Fixed Asset Collateral
(solely under clause (g) of such definition) is prohibited or unenforceable
under the law of any applicable jurisdiction outside the United States, the Term
Loan Collateral Agent shall accept a Lien on any such Fixed Asset Collateral as
sub-agent for the Revolving Credit Facility Collateral Agent, for the benefit of
the Revolving Credit Claimholders, solely for the purpose of the creation and/or
perfection of Liens in such Fixed Asset Collateral to secure the Revolving
Credit Obligations, and subject to the terms and conditions of this Agreement,
it being expressly understood and agreed that the claims of the Revolving Credit
Claimholders in respect of such Fixed Asset Collateral shall be subordinated to
the claims of the Term Loan Claimholders and any Additional Pari Passu
Claimholders in respect of such Fixed Asset Collateral on the same basis as the
Liens on the other Fixed Asset Collateral securing any Revolving Credit
Obligations are subordinated to the Liens on such other Fixed Asset Collateral
securing any Term Loan Obligations and any Additional Pari Passu Obligations,
and nothing in this Section 5.4 shall affect the status of such Collateral as
Fixed Asset Collateral.

     

     

    (iii)           In
the event the Term Loan Collateral Agent becomes subject to liability, or
suffers any costs, damages or expenses as a result of acting in any such
capacity under Section 5.4(a)(ii) for the Revolving Credit Facility Collateral
Agent or the Revolving Credit Claimholders, (A) the Grantors shall pay,
reimburse, indemnify and hold harmless the Term Loan Collateral Agent for any
such liabilities, costs, damages or expenses subject to the limitation set forth
in Section 9.05 of the Term Loan Agreement (but without giving effect to clause
(B) of the first proviso to Section 9.05(b)) to the extent applicable and (B) in
the event the Grantors fail to so pay, reimburse, indemnify and hold harmless
the Term Loan Collateral Agent, the Revolving Credit Claimholders shall pay,
reimburse, indemnify and hold harmless the Term Loan Collateral Agent for any
such liabilities, costs, damages or expenses.

     

     

    (iv)           To
the extent a junior pledge of or junior lien on any Current Asset Collateral is
prohibited or unenforceable under the law of any applicable jurisdiction outside
the United

     

    
      
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    States,
the Revolving Credit Facility Collateral Agent may, in its sole discretion,
elect to accept a Lien on any such Current Asset Collateral as sub-agent for the
Term Loan Collateral Agent, for the benefit of the Term Loan Claimholders, and
for any applicable Additional Pari Passu Debt Representative, for itself and on
behalf of the Additional Pari Passu Claimholders, solely for the purpose of
the creation and/or perfection of Liens in such Current Asset Collateral to
secure the Term Loan Obligations or the Additional Pari Passu Obligations, as
the case may be, and subject to the terms and conditions of this Agreement, it
being expressly understood and agreed that the claims of the Term Loan
Claimholders and the Additional Pari Passu Claimholders in respect of such
Current Asset Collateral shall be subordinated to the claims of the Revolving
Credit Claimholders in respect of such Current Asset Collateral on the same
basis as the Liens on the other Current Asset Collateral securing any Term Loan
Obligations and any Additional Pari Passu Obligations are subordinated to
the Liens on such other Current Asset Collateral securing any Revolving Credit
Obligations, and nothing in this Section 5.4 shall affect the status of such
Collateral as Current Asset Collateral.

     

     

    (v)           In
the event the Revolving Credit Facility Collateral Agent becomes subject to
liability, or suffers any costs, damages or expenses as a result of acting in
any such capacity under Section 5.4(a)(iv) for the Term Loan Collateral Agent,
the Term Loan Claimholders, the Additional Pari Passu Debt Representative or the
Additional Pari Passu Claimholders, (A) the Grantors shall pay, reimburse,
indemnify and hold harmless the Revolving Credit Facility Collateral Agent for
any such liabilities, costs, damages or expenses subject to the limitation set
forth in Section 9.05 of the Revolving Credit Agreement (but without giving
effect to clause (B) of the first proviso to Section 9.05(b)) to the extent
applicable and (B) in the event the Grantors fail to so pay, reimburse,
indemnify and hold harmless the Revolving Credit Facility Collateral Agent, the
Term Loan Claimholders or Additional Pari Passu Claimholders, as applicable,
shall pay, reimburse, indemnify and hold harmless the Revolving Credit Facility
Collateral Agent for any such liabilities, costs, damages or
expenses.

     

     

    (b) No Agent
shall have any obligation whatsoever to any other Agent, to any Revolving Credit
Claimholder, to any Term Loan Claimholder or to any Additional Pari Passu
Claimholders to ensure that any Collateral is genuine or owned by any of
the Grantors or to preserve rights or benefits of any Person except as expressly
set forth in this Section 5.4.  The duties or responsibilities of the
respective Agents under this Section 5.4 shall be limited solely to (i) holding
the Pledged Collateral as collateral agent and/or bailee in accordance with this
Section 5.4 and delivering the Pledged Collateral upon a Discharge of Revolving
Credit Obligations, a Discharge of Term Loan Obligations or a Discharge of
Additional Pari Passu Obligations, as the case may be, as provided in paragraph
(d) below and (ii) holding a Lien on Fixed Asset Collateral (in the case of the
Term Loan Collateral Agent) or Current Asset Collateral (in the case of the
Revolving Credit Facility Collateral Agent) as sub-agent for the other Agent in
accordance with this Section 5.4.

     

     

    (c) No Agent
acting pursuant to this Section 5.4 shall have by reason of the Revolving Credit
Facility Credit Documents, the Term Loan Credit Documents, the Additional Pari
Passu Credit Documents, this Agreement or any other document a fiduciary
relationship in respect of any other Agent, or any Revolving Credit
Claimholders, any Term Loan Claimholders or any Additional Pari Passu
Claimholders.

     

     

    (d) Upon the
Discharge of Revolving Credit Obligations, the Discharge of Additional Pari
Passu Obligations or the Discharge of Term Loan Obligations, as the case may be,
the Agent under the credit facility which has been discharged shall deliver the
remaining Pledged Collateral in its (or its agents’) possession or control (if
any) together with any necessary endorsements and without recourse or warranty,
first, (i) in
the case of the Additional Pari Passu Debt Representative to the Term Loan
Collateral Agent to the extent the Term Loan Obligations (other than Contingent
Obligations) remain outstanding and if not, then to the Revolving Credit
Facility Agent, (ii) in the case of the

     

    
      
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    Revolving
Credit Facility Agent to the Designated Fixed Asset Collateral Representative on
behalf of the Term Loan Collateral Agent to the extent the Term Loan Obligations
(other than Contingent Obligations) remain outstanding and the Additional Pari
Passu Debt Representatives to the extent of any outstanding Additional Pari
Passu Obligations, and (iii) in the case of the Term Loan Collateral Agent, to
the Designated Fixed Asset Collateral Representative on behalf of the applicable
Additional Pari Passu Debt Representatives to the extent any Additional Pari
Passu Obligations remains outstanding, and second, to the
applicable Grantor to the extent no Revolving Credit Obligations, no Additional
Pari Passu Obligations and no Term Loan Obligations remain outstanding (in
each case, so as to allow such Person to obtain possession or control of such
Pledged Collateral).  Each Agent further agrees, to the extent that
any other Obligations (other than Contingent Obligations) remain outstanding, to
take all other commercially reasonable action as shall be reasonably requested
by the Agent obtaining possession or control, at the sole cost and expense of
such Agent obtaining possession or control or of the Credit Parties, to permit
such other Agent to obtain, for the benefit of the Revolving Credit
Claimholders, the Term Loan Claimholders or the Additional Pari Passu
Claimholders, as applicable, a first-priority security interest in the
Collateral or as a court of competent jurisdiction may otherwise
direct.

     

     

    (e) Subject
to the terms of this Agreement, (i) so long as the Discharge of Revolving Credit
Obligations has not occurred, the Revolving Credit Facility Collateral Agent
shall be entitled to deal with the Pledged Collateral or Collateral within its
“control” in accordance with the terms of this Agreement and other Revolving
Credit Facility Credit Documents, but only to the extent that such Collateral
constitutes Current Asset Collateral, as if the Liens of the Term Loan
Collateral Agent, the Term Loan Claimholders, the Additional Pari Passu
Debt Representative and the Additional Pari Passu Claimholders did not exist and
(ii) so long as the Discharge of Term Loan Obligations and the Discharge of
Additional Pari Passu Obligations have not occurred, the Designated Fixed Asset
Collateral Representative shall be entitled to deal with the Pledged
Collateral or Collateral within its “control” on behalf of the Term Loan
Collateral Agent and the applicable Additional Pari Passu Debt
Representatives in accordance with the terms of this Agreement, the other
Term Loan Credit Documents and the other Additional Pari Passu Credit Documents,
but only to the extent that such Collateral constitutes Fixed Asset Collateral,
as if the Liens of the Revolving Credit Facility Collateral Agent and Revolving
Credit Claimholders did not exist.  In furtherance of the foregoing,
promptly following the Discharge of Revolving Credit Obligations, unless a New
Debt Notice in respect of new Revolving Credit Facility Credit Documents shall
have been delivered as provided in Section 5.5 below, the Revolving Credit
Facility Collateral Agent hereby agrees to deliver, at the cost and expense of
the Grantors, to each financial institution depository or securities
intermediary, if any, that is counterparty to an Account Agreement, written
notice as contemplated in such Account Agreement, directing such financial
institution depository or securities intermediary, as applicable, to comply with
the instructions of the Designated Fixed Asset Collateral Representative on
behalf of the Term Loan Collateral Agent and the applicable Additional Pari
Passu Debt Representative, unless the Discharge of Term Loan Obligations and the
Discharge of Additional Pari Passu Obligations has occurred (as notified to
the Revolving Credit Facility Collateral Agent by the Term Loan Collateral Agent
and applicable Additional Pari Passu Debt Representatives), in which case, such
Account Agreement shall be terminated.

     

     

    (f) Notwithstanding
anything in this Agreement to the contrary:

     

     

    (1) the
Revolving Credit Facility Collateral Agent, for itself and on behalf of the
Revolving Credit Claimholders, agrees that any requirement under any Revolving
Credit Facility Security Document that any Grantor deliver any Collateral that
constitutes Fixed Asset Collateral to the Revolving Credit Facility Collateral
Agent, or that requires any Grantor to vest the Revolving Credit Facility
Collateral Agent with possession or “control” (as defined in the UCC) of any
Collateral that constitutes Fixed Asset Collateral, in each case, shall be
deemed satisfied to the extent that, prior to the Discharge of Term Loan
Obligations and Discharge of Additional Pari Passu Obligations, such
Collateral

     

    
      
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    is
delivered to the Designated Fixed Asset Collateral Representative, or the
Designated Fixed Asset Collateral Representative shall have been vested with
such possession or (unless, pursuant to the UCC, control may be given
concurrently to the Revolving Credit Facility Collateral Agent and the
Designated Fixed Asset Collateral Representative) “control”, in each case,
subject to the provisions of Section 5.4; and

     

     

    (2) the Term
Loan Collateral Agent, for itself and on behalf of the Term Loan Claimholders,
and Additional Pari Passu Debt Representative, for itself and on behalf of the
Additional Pari Passu Claimholders, in each case agrees that any requirement
under any Term Loan Security Document or under any Additional Pari Passu Credit
Documents that any Grantor deliver any Collateral that constitutes Current
Asset Collateral to the Term Loan Collateral Agent or to an Additional Pari
Passu Debt Representative, or that requires any Grantor to vest the Term Loan
Collateral Agent or such Additional Pari Passu Debt Representative with
possession or “control” (as defined in the UCC) of any Collateral that
constitutes Current Asset Collateral, in each case, shall be deemed satisfied to
the extent that, prior to the Discharge of Revolving Credit Obligations, such
Collateral is delivered to the Revolving Credit Facility Collateral Agent, or
the Revolving Credit Facility Collateral Agent shall have been vested with such
possession or (unless, pursuant to the UCC, control may be given concurrently to
the Designated Fixed Asset Collateral Representative and the Revolving Credit
Facility Collateral Agent) “control”, in each case, subject to the provisions of
Section 5.4.

     

     

    5.5 When Discharge of Revolving Credit
Obligations,
Discharge of Term Loan Obligations and Discharge of Additional Pari
Passu Obligations Deemed to Not Have
Occurred.  If in connection with the Discharge of Revolving
Credit Obligations, the Discharge of Term Loan Obligations or the Discharge of
Additional Pari Passu Obligations, any of the Grantors substantially
concurrently enter into any Refinancing of any Revolving Credit Obligation, Term
Loan Obligation or Additional Pari Passu Obligations, as the case may be, which
Refinancing is permitted by each of the Term Loan Credit Documents, the
Revolving Credit Facility Credit Documents and the applicable Additional Pari
Passu Credit Documents, then such Discharge of Revolving Credit Obligations,
Discharge of Term Loan Obligations or Discharge of Additional Pari Passu
Obligations, as the case may be, shall automatically be deemed not to have
occurred for all purposes of this Agreement (other than with respect to any
actions taken pursuant to this Agreement as a result of the occurrence of such
Discharge of Revolving Credit Obligations, Discharge of Term Loan Obligations or
Discharge of Additional Pari Passu Obligations, as applicable) and, from and
after the date on which the New Debt Notice is delivered to the appropriate
Agent in accordance with the next sentence, the Indebtedness, liabilities and
other obligations under such Refinancing shall automatically be treated as
Revolving Credit Obligations, Term Loan Obligations or Additional Pari Passu
Obligations for all purposes of this Agreement, including for purposes of
the Lien priorities and rights in respect of Collateral set forth herein, and
the Revolving Credit Facility Collateral Agent, Term Loan Collateral Agent or
Additional Pari Passu Debt Representative, as the case may be, under such new
Revolving Credit Facility Credit Documents, new Term Loan Credit Documents or
new Additional Pari Passu Credit Documents shall be the Revolving Credit
Facility Collateral Agent, the Term Loan Collateral Agent or the Additional Pari
Passu Debt Representative for all purposes of this
Agreement.  Upon receipt of a notice (the “New Debt Notice”) stating that
any of the Grantors have entered into new Revolving Credit Facility Credit
Documents, new Term Loan Credit Documents or new Additional Pari Passu Credit
Documents (which notice shall include a complete copy of the relevant new
documents (but excluding any commitment and fee letters) and provide the
identity and address for notices of the new collateral agent, such agent, the
“New Agent”), each other
Agent shall promptly (a) enter into such documents and agreements (including
amendments or supplements to this Agreement) as such Grantors or such New Agent
shall reasonably request in order to provide to the New Agent the rights
contemplated hereby, in each case consistent in all material respects with the
terms of this Agreement and (b) subject to Section 5.4(f) hereof, deliver to the
New Agent any Pledged Collateral (that is Fixed Asset Collateral, in the
case of a New Agent that is the agent under any new Term Loan Credit Documents
or

     

    
      
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    any new
Additional Pari Passu Credit Documents or that is Current Asset Collateral, in
the case of a New Agent that is the agent under any new Revolving Credit
Facility Credit Documents), held by it together with any necessary endorsements
(or otherwise allow the New Agent to obtain control of such Pledged
Collateral).  The New Agent shall agree in a writing in form and
substance reasonably acceptable to each other Agent and addressed to each other
Agent and to the Revolving Credit Claimholders, the Term Loan Claimholders and
the applicable Additional Pari Passu Claimholders, as the case may be, to be
bound by the terms of this Agreement.  If the new Revolving Credit
Obligations under the new Revolving Credit Facility Credit Documents or the new
Term Loan Obligations under the new Term Loan Credit Documents or the new
Additional Pari Passu Obligations under the new Additional Pari Passu Credit
Documents are secured by property of the Grantors (or any other Subsidiary
that is required to be a Grantor pursuant to the terms of the Term Loan Credit
Documents) that does not also secure the other Obligations, then the other
Obligations shall be secured at such time by a Lien on such property to the same
extent provided in the Revolving Credit Facility Credit Documents, the Term Loan
Security Documents and this Agreement or as required under the applicable
Additional Pari Passu Credit Documents and provided in this
Agreement.

     

     

    SECTION
6.  Insolvency or Liquidation
Proceedings.

     

     

    6.1 Finance and Sale Issues.

     

     

    (a) Until the
Discharge of Revolving Credit Obligations has occurred, if any Grantor shall be
subject to any Insolvency or Liquidation Proceeding and the Revolving Credit
Facility Collateral Agent or the other Revolving Credit Claimholders shall
desire to permit the use of “Cash Collateral” (as such term is defined in
Section 363(a) of the Bankruptcy Code) constituting Current Asset Collateral on
which the Revolving Credit Facility Collateral Agent or any other creditor has a
Lien or to permit any Grantor to obtain financing, whether from the Revolving
Credit Claimholders or any other Person under Section 364 of the Bankruptcy Code
or any similar Bankruptcy Law or pursuant to the order of a court of competent
jurisdiction (“DIP
Financing”) then each of the Term Loan Collateral Agent, on behalf of
itself and the Term Loan Claimholders, and the Additional Pari Passu Debt
Representative, on behalf of the Additional Pari Passu Claimholders, agrees that
it will have been deemed to have consented to, and will raise no objection (nor
support any other Person objecting) to, such Cash Collateral use or DIP
Financing so long as such Cash Collateral use or DIP Financing meets the
following requirements: (i) a judicial finding is made that it is on
commercially reasonable terms, (ii) the aggregate principal amount of the DIP
Financing plus
the aggregate outstanding principal amount of Revolving Credit Obligations
(other than Cash Management Obligations of the Revolving Credit Facility
Borrowers and the Revolving Credit Facility Subsidiary Guarantors) does not
exceed the sum of (I) the Revolving Credit Facility Cap Amount plus (II)
$50,000,000, (iii) the Term Loan Collateral Agent, the Term Loan Claimholders,
the Additional Pari Passu Debt Representatives and the Additional Pari Passu
Claimholders retain the right to object to any ancillary agreements or
arrangements regarding the Cash Collateral use or the DIP Financing that are
materially prejudicial to their interests in the Fixed Asset Collateral, and
(iv) the terms of the DIP Financing (A) do not compel any Grantor 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, (B) do not expressly require the liquidation of the Collateral
prior to a default under the DIP Financing documentation or Cash Collateral
order and (C) do not require that any Lien of the Term Loan Collateral Agent or
any Additional Pari Passu Debt Representative on the Fixed Asset Collateral
be subordinated to or pari passu with the Lien on the Fixed Asset Collateral
securing such DIP Financing.  To the extent the Liens on the Current
Asset Collateral securing the Revolving Credit Obligations are subordinated to
or pari passu with the Liens securing such DIP Financing which meets the
requirements of clauses (i) through (iv) of this Section 6.1(a), the Term Loan
Collateral Agent and each Additional Pari Passu Debt Representative will
subordinate its Liens on the Current Asset Collateral to the Liens securing such
DIP Financing (and all obligations relating thereto)

     

    
      
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    and to
any adequate protection provided to the Revolving Credit Claimholders in respect
of the Current Asset Collateral and to any “carve-out,” including for debtors’
professionals, agreed to by the Revolving Credit Facility Administrative Agent
or the other Revolving Credit Claimholders and will not request adequate
protection or any other relief in connection therewith (except, as expressly
agreed by the Revolving Credit Facility Collateral Agent or to the extent
permitted by Section 6.3).

     

     

    (b) Until the
Discharge of Term Loan Obligations and the Discharge of Additional Pari Passu
Obligations have occurred, if any Grantor shall be subject to any
Insolvency or Liquidation Proceeding and the Term Loan Collateral Agent, the
other Term Loan Claimholders, the applicable Additional Pari Passu Debt
Representative or Additional Pari Passu Claimholders shall desire to permit
the use of “Cash Collateral” (as such term is defined in Section 363(a) of the
Bankruptcy Code) constituting Fixed Asset Collateral on which the Term Loan
Collateral Agent or applicable Additional Pari Passu Debt
Representative has a Lien or to permit any Grantor to obtain DIP Financing,
then the each of the Revolving Credit Facility Collateral Agent, on behalf of
itself and the Revolving Credit Claimholders, the Term Loan Collateral Agent, on
behalf of itself and the other Term Loan Claimholders, and each Additional
Pari Passu Debt Representative, on behalf of itself and the applicable
Additional Pari Passu Claimholders, agrees that it will have been deemed to
have consented to, and will raise no objection (nor support any other Person
objecting) to, such Cash Collateral use or DIP Financing so long as such Cash
Collateral use or DIP Financing meet the following requirements: (i) a judicial
finding is made that it is on commercially reasonable terms, (ii) the aggregate
principal amount of the DIP Financing plus (A) the
aggregate outstanding principal amount of Term Loan Obligations (other than the
Term Loan Obligations in respect of Term Loan Hedging Agreements), plus (B) the
aggregate outstanding principal amount of Additional Pari Passu Obligations
(other than the Additional Pari Passu Obligations in respect of Additional Pari
Passu Debt Hedging Agreements) does not exceed $1.45 billion, (iii) the
Revolving Credit Facility Collateral Agent and the Revolving Credit Claimholders
retain the right to object to any ancillary agreements or arrangements regarding
the Cash Collateral use or the DIP Financing that are materially prejudicial to
their interests in the Current Asset Collateral, and (iv) the terms of the DIP
Financing (A) do not compel any Grantor 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, (B) do not
expressly require the liquidation of the Collateral prior to a default under the
DIP Financing documentation or Cash Collateral order, and (C) do not require
that any Lien of the Revolving Credit Facility Collateral Agent on the
Current Asset Collateral be subordinated to or pari passu with the Lien on the
Current Asset Collateral securing such DIP Financing.  To the extent
the Liens on the Fixed Asset Collateral securing the Term Loan Obligations and
the applicable Additional Pari Passu Obligations are subordinated to or
pari passu with the Liens securing such DIP Financing which meets the
requirements of clauses (i) through (iv) of this Section 6.1(b), the Revolving
Credit Facility Collateral Agent will subordinate its Liens on the Fixed Asset
Collateral to the Liens securing such DIP Financing (and all obligations
relating thereto) and to any adequate protection provided to the Term Loan
Claimholders or to Additional Pari Passu Claimholders in respect of the
Fixed Asset Collateral and to any “carve-out,” including for debtors’
professionals, agreed to by the Term Loan Administrative Agent, the other Term
Loan Claimholders, the Additional Pari Passu Debt Representative or
the Additional Pari Passu Claimholders and will not request adequate
protection or any other relief in connection therewith (except, as expressly
agreed by the Term Loan Collateral Agent or the applicable Additional Pari Passu
Debt Representative or to the extent permitted by Section
6.3).

     

     

    6.2 Relief from the Automatic
Stay.

     

     

    (a) Until the
Discharge of Revolving Credit Obligations has occurred, the Term Loan Collateral
Agent, on behalf of itself and the Term Loan Claimholders, and the Additional
Pari Passu Debt Representative, for itself and on behalf of the Additional Pari
Passu Claimholders each agrees that none of them shall seek (or support any
other Person seeking) relief from the automatic stay or any other

     

    
      
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    stay in
any Insolvency or Liquidation Proceeding in respect of the Current Asset
Collateral, without the prior written consent of the Revolving Credit Facility
Collateral Agent, unless a motion for adequate protection permitted under
Section 6.3 has been denied by the relevant bankruptcy court.

     

     

    (b) Until the
Discharge of Term Loan Obligations has occurred and a Discharge of Additional
Pari Passu Obligations has occurred, the Revolving Credit Facility Collateral
Agent, on behalf of itself and the Revolving Credit Claimholders, agrees that
none of them shall seek (or support any other Person seeking) relief from the
automatic stay or any other stay in any Insolvency or Liquidation Proceeding in
respect of the Fixed Asset Collateral (other than to the extent such relief is
required to exercise its rights under Section 3.3), without the prior written
consent of the Term Loan Collateral Agent and the Additional Pari Passu Debt
Representatives, unless a motion for adequate protection permitted under Section
6.3 has been denied by the relevant bankruptcy court.

     

     

    6.3 Adequate Protection.

     

     

    (a) The Term
Loan Collateral Agent, on behalf of itself and the Term Loan Claimholders, and
the Additional Pari Passu Debt Representative, on behalf of the Additional Pari
Passu Claimholders, each agrees that none of them shall contest (or support any
other Person contesting):

     

    (1) any
request by the Revolving Credit Facility Collateral Agent or the Revolving
Credit Claimholders for adequate protection with respect to the Current Asset
Collateral; provided that (A)
such adequate protection claim shall not seek the creation of any Lien over
additional property of any Grantor other than with respect to property that
constitutes Revolving Credit Facility Grantor Collateral and (B) if such
additional property shall also constitute Fixed Asset Collateral, (i) a Lien
shall have been created in favor of the Term Loan Claimholders and the
Additional Pari Passu Claimholders in respect of such Collateral and (ii)
the Lien in favor of the Revolving Credit Claimholders shall be subordinated to
the extent set forth in this Agreement; or

     

    (2) any
objection by the Revolving Credit Facility Collateral Agent or the Revolving
Credit Claimholders to any motion, relief, action or proceeding based on the
Revolving Credit Facility Collateral Agent or the Revolving Credit Claimholders
claiming a lack of adequate protection with respect to the Current Asset
Collateral; provided that if the
Revolving Credit Facility Collateral Agent is granted adequate protection in the
form of additional collateral, the Term Loan Collateral Agent, the Term Loan
Claimholders, the Additional Pari Passu Debt Representative and the Additional
Pari Passu Claimholders may seek or request adequate protection in the form
of a Lien on such additional collateral; it being understood and agreed that (A)
to the extent such additional collateral shall also constitute Fixed Asset
Collateral, the Lien on such additional collateral in favor of the Revolving
Credit Facility Collateral Agent shall be subordinated to the Lien on such
additional collateral in favor of the Term Loan Collateral Agent and Additional
Pari Passu Debt Representative and (B) to the extent such additional
collateral shall also constitute Current Asset Collateral, the Lien on such
additional collateral in favor of the Revolving Credit Facility Collateral Agent
shall be senior to the Lien on such additional collateral in favor of the Term
Loan Collateral Agent and any Additional Pari Passu Debt Representative, in each
case with respect to the foregoing clauses (A) and (B) of this Section
6.3(a)(2), to the extent required by this Agreement.

     

    (b) The
Revolving Credit Facility Collateral Agent, on behalf of itself and the
Revolving Credit Claimholders, agrees that none of them shall contest (or
support any other Person contesting):

     

    (1) any
request by the Term Loan Collateral Agent, the Term Loan Claimholders, a
Additional Pari Passu Debt Representative or the Additional Pari Passu
Claimholders for

     

    
      
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    adequate
protection with respect to the Fixed Asset Collateral; provided that (A)
such adequate protection claim shall not seek the creation of any Lien over
additional property of any Grantor other than with respect to property that
constitutes Fixed Asset Collateral and (B) if such additional property shall
also constitute Current Asset Collateral, (i) a Lien shall have been created in
favor of the Revolving Credit Claimholders in respect of such Collateral and
(ii) the Lien in favor of the Term Loan Claimholders and Additional Pari Passu
Claimholders shall be subordinated to the extent set forth in this
Agreement; or

     

     

    (2) any
objection by the Term Loan Collateral Agent, the Term Loan Claimholders, any
Additional Pari Passu Debt Representative or the Additional Pari Passu
Claimholders to any motion, relief, action or proceeding based on such
Persons claiming a lack of adequate protection with respect to the Fixed Asset
Collateral; provided that if the
Term Loan Collateral Agent or an Additional Pari Passu Debt
Representative is granted adequate protection in the form of additional
collateral, the Revolving Credit Facility Collateral Agent and the Revolving
Credit Claimholders may seek or request adequate protection in the form of a
Lien on such additional collateral; it being understood and agreed that (A) to
the extent such additional collateral shall also constitute Current Asset
Collateral, the Lien on such additional collateral in favor of the Term Loan
Collateral Agent or any Additional Pari Passu Debt Representative shall be
subordinated to the Lien on such additional collateral in favor of the Revolving
Credit Facility Collateral Agent and (B) to the extent such additional
collateral shall also constitute Fixed Asset Collateral, the Lien on such
additional collateral in favor of the Term Loan Collateral Agent or any
Additional Pari Passu Debt Representative shall be senior to the Lien on
such additional collateral in favor of the Revolving Credit Facility Collateral
Agent, in each case with respect to the foregoing clauses (A) and (B) of this
Section 6.3(b)(2), to the extent required by this Agreement.

     

     

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

     

     

    (1) if the
Revolving Credit Claimholders (or any subset thereof) are granted adequate
protection with respect to the Current Asset Collateral in the form of
additional collateral (even if such collateral is not of a type which would
otherwise have constituted Current Asset Collateral) in connection with any Cash
Collateral use or DIP Financing, then the Term Loan Collateral Agent, on behalf
of itself or any of the Term Loan Claimholders, and any Additional Pari Passu
Debt Representative, for itself and on behalf of the Additional Pari Passu
Claimholders, may seek or request adequate protection with respect to its
interests in such Collateral in the form of a Lien on the same additional
collateral, which Lien will be subordinated to the Liens securing the Revolving
Credit Obligations and such Cash Collateral use or DIP Financing (and all
obligations relating thereto) on the same basis as the other Liens of the Term
Loan Collateral Agent or such Additional Pari Passu Debt Representative on
Current Asset Collateral;

     

     

    (2) if the
Term Loan Claimholders or any Additional Pari Passu Claimholders (or any
subset of the foregoing) are granted adequate protection with respect to the
Fixed Asset Collateral in the form of additional collateral (even if such
collateral is not of a type which would otherwise have constituted Fixed Asset
Collateral) in connection with any Cash Collateral use or DIP Financing, then
the Revolving Credit Facility Collateral Agent, on behalf of itself or any of
the Revolving Credit Claimholders, may seek or request adequate protection with
respect to its interests in such Collateral in the form of a Lien on the same
additional collateral, which Lien will be subordinated to the Liens securing the
Term Loan Obligations and the Additional Pari Passu Obligations and such
Cash Collateral use or DIP Financing (and all obligations relating thereto) on
the same basis as the other Liens of the Revolving Credit Facility Collateral
Agent on Fixed Asset Collateral;

     

     

    (3) in the
event the Revolving Credit Facility Collateral Agent, on behalf of itself or any
of the Revolving Credit Claimholders, seeks or requests adequate protection in
respect of

     

    
      
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    Current
Asset Collateral and such adequate protection is granted in the form of
additional collateral (even if such collateral is not of a type which would
otherwise have constituted Current Asset Collateral), then the Revolving Credit
Facility Collateral Agent, on behalf of itself and any of the Revolving Credit
Claimholders, agrees that the Term Loan Collateral Agent and any Additional Pari
Passu Debt Representative may also be granted a Lien on the same additional
collateral as security for the Term Loan Obligations and for any Cash Collateral
use or DIP Financing provided by the Term Loan Claimholders or Additional Pari
Passu Claimholders, and each of the Term Loan Collateral Agent, on behalf of
itself and any of the Term Loan Claimholders, and the Additional Pari Passu Debt
Representative, on behalf of the Additional Pari Passu Claimholders, agrees
that any Lien on such additional collateral securing the Term Loan Obligations
shall be subordinated to the Liens on such collateral securing the Revolving
Credit Obligations, any such use of Cash Collateral or any such DIP Financing
provided by the Term Loan Claimholders or any Additional Pari Passu Claimholders
(and all obligations relating thereto), and to any other Liens granted to the
Term Loan Claimholders and to the Additional Pari Passu Claimholders as
adequate protection, all on the same basis as the other Liens of the Term Loan
Collateral Agent and Additional Pari Passu Debt Representative on Current
Asset Collateral; and

     

     

    (4) in the
event the Term Loan Collateral Agent, on behalf of itself or any of the Term
Loan Claimholders, or a Additional Pari Passu Debt Representative, for itself
and on behalf of the Additional Pari Passu Claimholders, seeks or requests
adequate protection in respect of Fixed Asset Collateral and such adequate
protection is granted in the form of additional collateral (even if such
collateral is not of a type which would otherwise have constituted Fixed Asset
Collateral), then each of the Term Loan Collateral Agent, on behalf of itself
and any of the Term Loan Claimholders, and the  Additional Pari Passu Debt
Representatives, on behalf of the Additional Pari Passu Claimholders, agrees
that the Revolving Credit Facility Collateral Agent may also be granted a Lien
on the same additional collateral as security for the Revolving Credit
Obligations and for any Cash Collateral use or DIP Financing provided by the
Revolving Credit Claimholders, and the Revolving Credit Facility Collateral
Agent, on behalf of itself and any of the Revolving Credit Claimholders, agrees
that any Lien on such additional collateral securing the Revolving Credit
Obligations shall be subordinated to the Liens on such collateral securing the
Term Loan Obligations or the Additional Pari Passu Obligations, any such use of
cash Collateral or any such DIP Financing provided by the Revolving Credit
Claimholders (and all obligations relating thereto) and to any other Liens
granted to the Revolving Credit Claimholders as adequate protection, all on the
same basis as the other Liens of the Revolving Credit Facility Collateral Agent
on Fixed Asset Collateral.

     

     

    (d) Except as
otherwise expressly set forth in this Section 6 or in connection with the
exercise of remedies with respect to (i) the Current Asset Collateral, nothing
herein shall limit the rights of the Term Loan Collateral Agent, the Term Loan
Claimholders, any Additional Pari Passu Debt Representative or the Additional
Pari Passu Claimholders from seeking adequate protection with respect to their
rights in the Fixed Asset Collateral in any Insolvency or Liquidation Proceeding
(including adequate protection in the form of a cash payment, periodic cash
payments or otherwise) or (ii) the Fixed Asset Collateral, nothing herein shall
limit the rights of the Revolving Credit Facility Collateral Agent or the
Revolving Credit Claimholders from seeking adequate protection with respect to
their rights in the Current Asset Collateral in any Insolvency or Liquidation
Proceeding (including adequate protection in the form of a cash payment,
periodic cash payments or otherwise).

     

     

    6.4 Avoidance
Issues.  If any Revolving Credit Claimholder, Additional Pari
Passu Claimholders or Term Loan Claimholder is required in any Insolvency or
Liquidation Proceeding or otherwise to turn over or otherwise pay to the estate
of the applicable Grantor any amount paid in respect of Revolving Credit
Obligations, Additional Pari Passu Obligations or the Term Loan Obligations, as
the case may be (a “Recovery”), then such
Revolving Credit Claimholders, Additional Pari Passu Claimholders or Term Loan
Claimholders shall be entitled to a reinstatement of Revolving
Credit

     

    
      
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    Obligations,
Additional Pari Passu Obligations or the Term Loan Obligations, as the case may
be, with respect to all such recovered amounts.  If this Agreement
shall have been terminated prior to such Recovery, this Agreement shall be
reinstated in full force and effect, and such prior termination shall not
diminish, release, discharge, impair or otherwise affect the obligations of the
parties hereto from such date of reinstatement.

     

     

    6.5 Reorganization
Securities.  If, in any Insolvency or Liquidation Proceeding,
debt obligations of the reorganized debtor secured by Liens upon any property of
the reorganized debtor are distributed pursuant to a plan of reorganization or
similar dispositive restructuring plan, on account of Revolving Credit
Obligations, on account of the Additional Pari Passu Obligations and on account
of the Term Loan Obligations, then, to the extent the debt obligations
distributed on account of the Revolving Credit Obligations, on account of the
Additional Pari Passu Obligations and on account of the Term Loan Obligations
are secured by Liens upon the same property, the provisions of this Agreement
will survive the distribution of such debt obligations pursuant to such plan and
will apply with like effect to the debt obligations so distributed, to the Liens
securing such debt obligations and the distribution of proceeds
thereof.

     

     

    6.6 Post-Petition
Interest.

     

     

    (a) None of
the Term Loan Collateral Agent, any Additional Pari Passu Debt Representative,
any Term Loan Claimholder or any of the Additional Pari Passu
Claimholders shall oppose or seek to challenge any claim by the Revolving
Credit Facility Collateral Agent or any Revolving Credit Claimholder for
allowance in any Insolvency or Liquidation Proceeding of Revolving Credit
Obligations consisting of Post-Petition Interest, fees or expenses to the extent
of (i) the value of the Lien on the Current Asset Collateral securing any
Revolving Credit Obligations, without regard to the existence of any Lien
of the Term Loan Collateral Agent or any Additional Pari Passu Debt
Representative on the Current Asset Collateral and (ii) the value of the
Lien on the Fixed Asset Collateral securing any Revolving Credit Obligations,
taking into account the existence of any Lien of the Term Loan Collateral Agent
or a Additional Pari Passu Debt Representative on the Fixed Asset
Collateral.

     

     

    (b) Neither
the Revolving Credit Facility Collateral Agent nor any other Revolving Credit
Claimholder shall oppose or seek to challenge any claim by the Term Loan
Collateral Agent, any Term Loan Claimholder, any Additional Pari Passu Debt
Representative or any of the Additional Pari Passu Claimholders for allowance in
any Insolvency or Liquidation Proceeding of Term Loan Obligations or of the
Additional Pari Passu Obligations consisting of Post-Petition Interest,
fees or expenses to the extent of (i) the value of the Lien on the Fixed Asset
Collateral securing any Term Loan Obligations or any Additional Pari Passu
Obligations, without regard to the existence of any Lien of the Revolving Credit
Facility Collateral Agent on behalf of the Revolving Credit Claimholders on the
Fixed Asset Collateral and (ii) the value of the Lien on the Current Asset
Collateral securing any Term Loan Obligations and any Additional Pari Passu
Obligations, taking into account the existence of any Lien of the Revolving
Credit Facility Collateral Agent on behalf of the Revolving Credit Claimholders
on the Current Asset Collateral.

     

     

    6.7 Waiver – 1111(b)(2)
Issues.

     

     

    (a) The Term
Loan Collateral Agent, for itself and on behalf of the Term Loan Claimholders,
and the Additional Pari Passu Debt Representative, on behalf of the Additional
Pari Passu Claimholders, each waives any objection or claim any Term Loan
Claimholder or any of the Additional Pari Passu Claimholders may hereafter
have against any Revolving Credit Claimholder arising out of the election of any
Revolving Credit Claimholder of the application of Section 1111(b)(2) of the
Bankruptcy Code to any claims of such Revolving Credit Claimholder and agrees
that in the case of any such election

     

    
      
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    it shall
have no claim or right to payment with respect to the Current Asset Collateral
in or from such Insolvency or Liquidation Proceeding.

     

     

    (b) The
Revolving Credit Facility Collateral Agent, for itself and on behalf of the
Revolving Credit Claimholders, waives any objection or claim any Revolving
Credit Claimholder may hereafter have against any Term Loan Claimholder or any
of the Additional Pari Passu Claimholders arising out of the election of
any Term Loan Claimholder or any of the Additional Pari Passu
Claimholders of the application of Section 1111(b)(2) of the Bankruptcy
Code to any claims of such Term Loan Claimholder or any such Additional Pari
Passu Claimholders and agrees that in the case of any such election it
shall have no claim or right to payment with respect to the Fixed Asset
Collateral in or from such Insolvency or Liquidation Proceeding.

     

     

    6.8 Asset Dispositions in an
Insolvency or Liquidation Proceeding.

     

     

    (a) None of
the Term Loan Collateral Agent, any Term Loan Claimholder, any Additional Pari
Passu Debt Representative or any of the Additional Pari Passu
Claimholders shall, in any Insolvency or Liquidation Proceeding or
otherwise, oppose any sale or disposition of any Current Asset Collateral that
is supported by the Revolving Credit Claimholders, and the Term Loan Collateral
Agent, the Term Loan Claimholders and the Additional Pari Passu Claimholders
shall be deemed to have consented under Section 363 of the Bankruptcy Code (and
otherwise) to any sale of any Current Asset Collateral supported by the
Revolving Credit Claimholders and to have released their Liens on such
assets.

     

     

    (b) Neither
the Revolving Credit Facility Collateral Agent nor any Revolving Credit
Claimholder shall, in any Insolvency or Liquidation Proceeding or otherwise,
oppose any sale or disposition of any Fixed Asset Collateral that is supported
by the Term Loan Claimholders and the Additional Pari Passu Claimholders,
and the Revolving Credit Facility Collateral Agent and the Revolving Credit
Claimholders shall be deemed to have consented under Section 363 of the
Bankruptcy Code (and otherwise) to any sale of any Fixed Asset Collateral
supported by the Term Claimholders and the Additional Pari Passu Claimholders
and to have released their Liens on such assets; provided that this
Section 6.8(b) shall not apply to any sale or disposition of Real Property
unless the Revolving Credit Facility Collateral Agent have received at least 90
days’ prior notice of the consummation of any such sale.

     

     

    6.9 Additional Section 363 and
Section 364 Matters.

     

     

    (a) To the
extent that the Revolving Credit Facility Collateral Agent or any Revolving
Credit Claimholder has or acquires rights under Section 363 or Section 364 of
the Bankruptcy Code or otherwise with respect to any of the Fixed Asset
Collateral, the Revolving Credit Facility Collateral Agent, for itself and on
behalf of the Revolving Credit Claimholders, agrees not to assert any of such
rights without the prior written consent of the Term Loan Collateral Agent and
each Additional Pari Passu Debt Representative; provided that if
requested by the Term Loan Collateral Agent or a Additional Pari Passu Debt
Representative, the Revolving Credit Facility Collateral Agent shall timely
exercise such rights in the manner reasonably requested by the Term Loan
Collateral Agent or such Additional Pari Passu Debt Representative, including
any rights to payments in respect of such rights.

     

     

    (b) To the
extent that the Term Loan Collateral Agent, any Term Loan Claimholder, any
Additional Pari Passu Debt Representative or any of the Additional Pari Passu
Claimholders has or acquires rights under Section 363 or Section 364 of the
Bankruptcy Code or otherwise with respect to any of the Current Asset
Collateral, the Term Loan Collateral Agent, for itself and on behalf of the Term
Loan Claimholders, and the Additional Pari Passu Debt Representative, for
itself and on behalf of the Additional Pari Passu Claimholders, each agrees not
to assert any of such rights without the prior written

     

    
      
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    consent
of the Revolving Credit Facility Collateral Agent; provided that if
requested by the Revolving Credit Facility Collateral Agent, the Term Loan
Collateral Agent and the applicable Additional Pari Passu Debt
Representative shall timely exercise such rights in the manner reasonably
requested by the Revolving Credit Facility Collateral Agent, including any
rights to payments in respect of such rights.

     

     

    6.10 Effectiveness in Insolvency
or Liquidation Proceedings.  The parties hereto expressly
acknowledge that this Agreement is a “subordination agreement” under Section
510(a) of the Bankruptcy Code.

     

     

    6.11 Separate Grants of Security
and Separate Classification.

     

     

    (a) The Term
Loan Collateral Agent, for itself and on behalf of the Term Loan Claimholders,
each Additional Pari Passu Debt Representative, for itself and on behalf of the
Additional Pari Passu Claimholders, and the Revolving Credit Facility Collateral
Agent, for itself and on behalf of the Revolving Credit Claimholders,
acknowledges and agrees that the grants of Liens pursuant to the Revolving
Credit Facility Security Documents, the Term Loan Security Documents and each
Additional Pari Passu Security Document constitute separate and distinct
grants of Liens, and because of, among other things, their differing rights in
the Collateral, the Term Loan Obligations, the Additional Pari Passu Obligations
and the Revolving Credit Obligations are fundamentally different from one
another, and must be separately classified in any plan of reorganization
proposed or adopted in an Insolvency or Liquidation Proceeding.  In
furtherance of the foregoing, each of the Term Loan Collateral Agent, for itself
and on behalf of the Term Loan Claimholders, the Revolving Credit Facility
Collateral Agent, for itself and on behalf of the Revolving Credit Claimholders,
and Additional Pari Passu Debt Representative, for itself and on behalf of the
Additional Pari Passu Claimholders, agrees that the Term Loan Claimholders, the
Revolving Credit Claimholders and each Series of applicable Additional Pari
Passu Claimholders will vote as separate classes in connection with any
plan of reorganization in any Insolvency or Liquidation Proceeding and that
neither any Agent nor any Claimholder will seek to vote with the other as a
single class in connection with any plan of reorganization in any Insolvency or
Liquidation Proceeding.

     

     

    (b) To
further effectuate the intent of the parties as provided in this Section 6.11,
if it is held that the claims of the Term Loan Claimholders or any Series of
Additional Pari Passu Claimholders, on the one hand, and the Revolving
Credit Claimholders, on the other hand, in respect of the Fixed Asset Collateral
constitute only one secured claim (rather than separate classes of senior and
junior secured claims), then each of the Term Loan Collateral Agent, for itself
and on behalf of the Term Loan Claimholders, the Additional Pari Passu Debt
Representative, for itself and on behalf of the Additional Pari Passu
Claimholders, and the Revolving Credit Facility Collateral Agent, for itself and
on behalf of the Revolving Credit Claimholders, hereby acknowledges and agrees
that, subject to Sections 2.1 and 4.1, all distributions shall be made as if
there were separate classes of senior and junior secured claims against the
Grantors in respect of the Fixed Asset Collateral (with the effect being that,
to the extent that the aggregate value of the Fixed Asset Collateral is
sufficient (for this purpose ignoring all claims held by the Revolving Credit
Claimholders), the Term Loan Claimholders and Additional Pari Passu
Claimholders shall be entitled to receive, in addition to amounts
distributed to them in respect of principal, pre-petition interest and other
claims, all amounts owing in respect of Post-Petition Interest, including any
additional interest payable pursuant to the Term Loan Agreement and applicable
Additional Pari Passu Loan Agreement, arising from or related to a default,
which is disallowed as a claim in any Insolvency or Liquidation Proceeding)
before any distribution is made in respect of the claims held by the Revolving
Credit Claimholders, with the Revolving Credit Facility Collateral Agent, for
itself and on behalf of the Revolving Credit Claimholders, hereby acknowledging
and agreeing to turn over to the Designated Fixed Asset Collateral
Representative, for itself and on behalf of the Term Loan Claimholders and the
applicable Additional Pari Passu Claimholders, amounts otherwise received or
receivable by them

     

    
      
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    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 Revolving
Credit Claimholders).

     

     

    (c) To
further effectuate the intent of the parties as provided in this Section 6.11,
if it is held that the claims of the Term Loan Claimholders and any of the
Additional Pari Passu Claimholders, on the one hand, and the Revolving Credit
Claimholders, on the other hand, in respect of the Current Asset Collateral
constitute only one secured claim (rather than separate classes of senior and
junior secured claims), then each of the Term Loan Collateral Agent, for itself
and on behalf of the Term Loan Claimholders, each Additional Pari Passu Debt
Representative, for itself and on behalf of the applicable Additional Pari Passu
Claimholders, and the Revolving Credit Facility Collateral Agent, for itself and
on behalf of the Revolving Credit Claimholders, hereby acknowledges and agrees
that, subject to Sections 2.1 and 4.1, all distributions shall be made as if
there were separate classes of senior and junior secured claims against the
Grantors in respect of the Current Asset Collateral (with the effect being that,
to the extent that the aggregate value of the Current Asset Collateral is
sufficient (for this purpose ignoring all claims held by the Term Loan
Claimholders and the Additional Pari Passu Claimholders), the Revolving Credit
Claimholders shall be entitled to receive, in addition to amounts distributed to
them in respect of principal, pre-petition interest and other claims, all
amounts owing in respect of Post-Petition Interest, including any additional
interest payable pursuant to the Revolving Credit Agreement, arising from or
related to a default, which is disallowed as a claim in any Insolvency or
Liquidation Proceeding) before any distribution is made in respect of the claims
held by the Term Loan Claimholders or the Additional Pari Passu Claimholders,
with the Term Loan Collateral Agent, for itself and on behalf of the Term Loan
Claimholders and the Additional Pari Passu Debt Representative, for itself and
on behalf of the Additional Pari Passu Claimholders, each hereby
acknowledging and agreeing to turn over to the Revolving Credit Facility
Collateral Agent, for itself and on behalf of the Revolving Credit Claimholders,
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 Term Loan Claimholders or the Additional
Pari Passu Claimholders).

     

     

    (d) Notwithstanding
anything in the foregoing to the contrary, each of the Term Loan Collateral
Agent, the Term Loan Claimholders, each Additional Pari Passu Debt
Representative and the Additional Pari Passu Claimholders, on the one hand, and
the Revolving Credit Facility Collateral Agent and the Revolving Credit
Claimholders, on the other hand, shall retain the right to vote and otherwise
act in any Insolvency or Liquidation Proceeding (including the right to vote to
accept or reject any plan of reorganization) to the extent not inconsistent with
the provisions hereof.

     

     

    SECTION
7.  Reliance; Waivers,
Etc.

     

     

    7.1 Reliance.  Other
than any reliance on the terms of this Agreement, the Revolving Credit Facility
Collateral Agent, on behalf of itself and the Revolving Credit Claimholders
under its Revolving Credit Facility Credit Documents, acknowledges that it and
such Revolving Credit Claimholders have, independently and without reliance on
the Term Loan Collateral Agent, any Term Loan Claimholders, any Additional Pari
Passu Debt Representative or any of the Additional Pari Passu Claimholders, and
based on documents and information deemed by them appropriate, made their own
credit analysis and decision to enter into such Revolving Credit Facility Credit
Documents and be bound by the terms of this Agreement and they will continue to
make their own credit decision in taking or not taking any action under the
Revolving Credit Agreement or this Agreement.  Other than any reliance
on the terms of this Agreement, the Term Loan Collateral Agent, on behalf of
itself and the Term Loan Claimholders, and each Additional Pari Passu Debt
Representative, for itself and on behalf of the applicable Additional Pari Passu
Claimholders, each acknowledges that it and the Term Loan Claimholders and
Additional Pari Passu Claimholders have, independently and without reliance
on the Revolving Credit Facility Collateral Agent or any Revolving Credit
Claimholder, and based on

     

    
      
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    documents
and information deemed by them appropriate, made their own credit analysis and
decision to enter into each of the Term Loan Credit Documents and each of the
Additional Pari Passu Credit Documents, as applicable, and be bound by the terms
of this Agreement and they will continue to make their own credit decision in
taking or not taking any action under the Term Loan Credit Documents, the
applicable Additional Pari Passu Credit Documents or this
Agreement.

     

     

    7.2 No Warranties or
Liability.  The Revolving Credit Facility Collateral Agent, on
behalf of itself and the Revolving Credit Claimholders under the Revolving
Credit Facility Credit Documents, acknowledges and agrees that none of the Term
Loan Collateral Agent, the Term Loan Claimholders, any Additional Pari Passu
Debt Representative or any of the Additional Pari Passu Claimholders have made
any express or implied representation or warranty, including with respect
to the execution, validity, legality, completeness, collectibility or
enforceability of any of the Term Loan Credit Documents or any of the Additional
Pari Passu Credit Documents, the ownership of any Collateral or the perfection
or priority of any Liens thereon.  Except as otherwise provided in
this Agreement, the Term Loan Collateral Agent and the Term Loan Claimholders
and the Additional Pari Passu Debt Representative and the Additional Pari Passu
Claimholders will be entitled to manage and supervise their respective
loans and extensions of credit under the Term Loan Credit Documents and the
applicable Additional Pari Passu Credit Documents in accordance with law
and such documents, as they may, in their sole discretion, deem
appropriate.  The Term Loan Collateral Agent, on behalf of itself and
the Term Loan Claimholders, and the Additional Pari Passu Debt Representative,
for itself and on behalf of the benefit of the applicable Additional Pari
Passu Claimholders, each acknowledges and agrees that each of the Revolving
Credit Facility Collateral Agent and the Revolving Credit Claimholders have made
no express or implied representation or warranty, including with respect to the
execution, validity, legality, completeness, collectibility or enforceability of
any of the Revolving Credit Facility Credit Documents, the ownership of any
Collateral or the perfection or priority of any Liens thereon.  Except
as otherwise provided in this Agreement, the Revolving Credit Facility
Collateral Agent and the Revolving Credit Claimholders will be entitled to
manage and supervise their respective loans and extensions of credit under their
respective Revolving Credit Facility Credit Documents in accordance with law and
the Revolving Credit Documents, as they may, in their sole discretion, deem
appropriate.  None of the Term Loan Collateral Agent, the Term Loan
Claimholders, any Additional Pari Passu Debt Representative or the Additional
Pari Passu Claimholders shall have any duty to the Revolving Credit
Facility Collateral Agent or any of the Revolving Credit Claimholders, and the
Revolving Credit Facility Collateral Agent and the Revolving Credit Claimholders
shall have no duty to the Term Loan Collateral Agent, any of the Term Loan
Claimholders, any Additional Pari Passu Debt Representative or any of the
Additional Pari Passu Claimholders to act or refrain from acting in a manner
which allows, or results in, the occurrence or continuance of an event of
default or default under any agreements with any Grantor (including the
Revolving Credit Facility Credit Documents and the Term Loan Credit Documents),
regardless of any knowledge thereof which they may have or be charged
with.

     

     

    7.3 No Waiver of Lien
Priorities.

     

     

    (a) No right
of the Agents, the Revolving Credit Claimholders, the Term Loan Claimholders or
the Additional Pari Passu Claimholders to enforce any provision of this
Agreement or any of their respective credit documents shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of any
Grantor or by any act or failure to act by such Agents, Revolving Credit
Claimholders, Term Loan Claimholders or Additional Pari Passu Claimholders, or
by any noncompliance by any Person with the terms, provisions and covenants of
this Agreement, any of the Revolving Credit Facility Credit Documents,
Additional Pari Passu Credit Documents or any of the Term Loan Credit Documents,
regardless of any knowledge thereof which the Agents or the Revolving Credit
Claimholders, Additional Pari Passu Claimholders or the Term Loan Claimholders,
or any of them, may have or be otherwise charged with.

     

    
      
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    (b) Without
in any way limiting the generality of the foregoing paragraph (but subject to
the rights of the Grantors under the Revolving Credit Facility Credit
Documents, the Term Loan Credit Documents and the applicable Additional
Pari Passu Credit Documents, and subject to the provisions of Sections 2.3, 2.4
and 5.3), the Agents, the Revolving Credit Claimholders, the Term Loan
Claimholders and the Additional Pari Passu Claimholders may, at any time
and from time to time in accordance with the Revolving Credit Facility Credit
Documents, the Term Loan Credit Documents, the Additional Pari Passu Credit
Documents and/or applicable law, without the consent of, or notice to, the other
Agent or the Revolving Credit Claimholders, the Term Loan Claimholders or the
Additional Pari Passu Claimholders (as the case may be), without incurring
any liabilities to such Persons (except for liabilities for breach of
obligations under this Agreement) and without impairing or releasing the Lien
priorities and other benefits provided in this Agreement (even if any right of
subrogation or other right or remedy is affected, impaired or extinguished
thereby) do any one or more of the following:

     

     

    (1) change
the manner, place or terms of payment or change or extend the time of payment
of, or amend, renew, exchange, increase or alter, the terms of any of the
Obligations or any Lien or guaranty thereof or any liability of any Grantor, or
any liability incurred directly or indirectly in respect thereof (including any
increase in or extension of the Obligations, without any restriction as to the
tenor or terms of any such increase or extension) or otherwise amend, renew,
exchange, extend, modify or supplement in any manner any Liens held by the
applicable Agent or any rights or remedies under any of the Revolving Credit
Facility Credit Documents, the Term Loan Credit Documents or any Additional Pari
Passu Credit Documents; provided that any
such increase in the Revolving Credit Obligations, the Term Loan Obligations or
the Additional Pari Passu Obligations, as applicable, shall not, except to the
extent permitted pursuant to Section 6.1(a), increase the sum of the
Indebtedness (as defined in the Revolving Credit Agreement or Term Loan
Agreement, as applicable) constituting principal under the Revolving Credit
Agreement, the Term Loan Agreement or any Additional Pari Passu Loan Agreement,
as applicable, and (in the case of the Revolving Credit Obligations), the face
amount of any letters of credit, bank guarantees and similar instruments issued
or otherwise outstanding under the Revolving Credit Agreement and not
reimbursed, to an amount in excess of the Revolving Credit Facility Cap Amount
(in the case of Revolving Credit Obligations) or the Term Loan Cap Amount (in
the case of Term Loan Obligations) or an amount that when added to the Term Loan
Cap Amount would exceed $1.45 billion (in the case of Additional Pari Passu
Obligations);

     

     

    (2) sell,
exchange, release, surrender, realize upon, enforce or otherwise deal with in
any manner and in any order any part of the Collateral (except to the extent
provided in this Agreement) or any liability of any Grantor or any liability
incurred directly or indirectly in respect thereof;

     

     

    (3) settle or
compromise any Obligation or any other liability of any Grantor or any security
therefor or any liability incurred directly or indirectly in respect thereof and
apply any sums by whomsoever paid and however realized to any liability in any
manner or order that is not inconsistent with the terms of this Agreement;
and

     

     

    (4) exercise
or delay in or refrain from exercising any right or remedy against any security
or any Grantor or any other Person, elect any remedy and otherwise deal freely
with any Grantor.

     

     

    (c) Except as
otherwise provided herein, the Revolving Credit Facility Collateral Agent, on
behalf of itself and the Revolving Credit Claimholders, also agrees that none of
the Term Loan Claimholders, the Term Loan Collateral Agent, any Additional Pari
Passu Debt Representative or any of the Additional Pari Passu Claimholders shall
have any liability to the Revolving Credit Facility Collateral Agent or any
Revolving Credit Claimholders, and the Revolving Credit Facility Collateral
Agent, on

     

    
      
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    behalf of
itself and the Revolving Credit Claimholders, hereby waives any claim against
any such Person, arising out of any and all actions which such Person may take
or permit or omit to take with respect to:

     

     

    (1) the Term
Loan Credit Documents or any of the Additional Pari Passu Credit
Documents;

     

     

    (2) the
collection of the Term Loan Obligations or the Additional Pari Passu
Obligations; or

     

     

    (3) the
foreclosure upon, or sale, liquidation or other disposition of, any Fixed Asset
Collateral.

     

     

    The
Revolving Credit Facility Collateral Agent, on behalf of itself and the
Revolving Credit Claimholders, agrees that neither the Term Loan Claimholders,
the Term Loan Collateral Agent, any Additional Pari Passu Debt Representative
nor the Additional Pari Passu Claimholders have any duty to them in respect of
the maintenance or preservation of the Fixed Asset Collateral, the Term Loan
Obligations or otherwise.

     

     

    (d) Except as
otherwise provided herein, each of the Term Loan Collateral Agent, on behalf of
itself and the Term Loan Claimholders, and each Additional Pari Passu Debt
Representative, on behalf of itself and the applicable Additional Pari Passu
Claimholders, also agrees that the Revolving Credit Claimholders and the
Revolving Credit Facility Collateral Agent shall have no liability to the Term
Loan Collateral Agent, any Term Loan Claimholders, any Additional Pari Passu
Debt Representative or any of the Additional Pari Passu Claimholders, and the
Term Loan Collateral Agent, on behalf of itself and the Term Loan Lenders, and
each Additional Pari Passu Debt Representative, on behalf of itself and the
applicable Additional Pari Passu Claimholders, each hereby waives any claim
against any Revolving Credit Claimholder or the Revolving Credit Facility
Collateral Agent, arising out of any and all actions which the Revolving Credit
Claimholders or the Revolving Credit Facility Collateral Agent may take or
permit or omit to take with respect to:

     

     

    (1) the
Revolving Credit Facility Credit Documents;

     

     

    (2) the
collection of the Revolving Credit Obligations; or

     

     

    (3) the
foreclosure upon, or sale, liquidation or other disposition of, any Current
Asset Collateral.

     

     

    The Term
Loan Collateral Agent, on behalf of itself and the Term Loan Claimholders, and
each Additional Pari Passu Debt Representatives on behalf of itself and the
applicable Additional Pari Passu Claimholders, each agrees that the Revolving
Credit Claimholders and the Revolving Credit Facility Collateral Agent have no
duty to them in respect of the maintenance or preservation of the Current Asset
Collateral, the Revolving Credit Obligations or otherwise.

     

     

    (e) Until the
Discharge of Term Loan Obligations and the Discharge of Additional Pari Passu
Obligations, the Revolving Credit Facility Collateral Agent, on behalf of itself
and the Revolving Credit Claimholders, agrees not to assert and hereby waives,
to the fullest extent permitted by law, any right to demand, request, plead or
otherwise assert or otherwise claim the benefit of, any marshalling, appraisal,
valuation or other similar right that may otherwise be available under
applicable law with respect to the Fixed Asset Collateral or any other similar
rights a junior secured creditor may have under applicable law.

     

    
      
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    (f) Until the
Discharge of Revolving Credit Obligations, the Term Loan Collateral Agent, on
behalf of itself and the Term Loan Claimholders, and each Additional Pari Passu
Debt Representative, on behalf of itself and the applicable Additional Pari
Passu Claimholders, each agrees not to assert and hereby waives, to the fullest
extent permitted by law, any right to demand, request, plead or otherwise assert
or otherwise claim the benefit of, any marshalling, appraisal, valuation or
other similar right that may otherwise be available under applicable law with
respect to the Current Asset Collateral or any other similar rights a junior
secured creditor may have under applicable law.

     

     

    7.4 Obligations
Unconditional.  All rights, interests, agreements and
obligations of the Revolving Credit Facility Collateral Agent and the Revolving
Credit Claimholders, the Term Loan Collateral Agent and the Term Loan
Claimholders, and each Additional Pari Passu Debt Representative and the
Additional Pari Passu Claimholders, respectively, hereunder shall remain in full
force and effect irrespective of:

     

     

    (a) any lack
of validity or enforceability of any Revolving Credit Facility Credit Documents,
any Term Loan Credit Documents, or any Additional Pari Passu Credit Documents,
as the case may be;

     

     

    (b) except as
otherwise expressly set forth in this Agreement, any change in the time, manner
or place of payment of, or in any other terms of, all or any of the Revolving
Credit Obligations, any Additional Pari Passu Obligations or the Term Loan
Obligations, or any amendment or waiver or other modification, including any
increase in the amount thereof, whether by course of conduct or otherwise, of
the terms of any Revolving Credit Facility Credit Document, any Term Loan Credit
Document or any Additional Pari Passu Credit Documents;

     

     

    (c) except as
otherwise expressly set forth in this Agreement, any exchange of any security
interest in any Collateral or any other collateral, or any amendment, waiver or
other modification, whether in writing or by course of conduct or otherwise, of
all or any of the Revolving Credit Obligations, the Term Loan Obligations
or the Additional Pari Passu Obligations, or any guaranty of the
foregoing;

     

     

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

     

     

    (e) any other
circumstances which otherwise might constitute a defense available to, or a
discharge of, any Grantor in respect of the Revolving Credit Facility Collateral
Agent, the Revolving Credit Obligations, any Revolving Credit Claimholder, the
Term Loan Collateral Agent, the Term Loan Obligations, any Term Loan
Claimholder, any Additional Pari Passu Debt Representative, the Additional Pari
Passu Obligations or any of the Additional Pari Passu Claimholders in respect of
this Agreement.

     

     

    SECTION
8.  Miscellaneous.

     

     

    8.1 Conflicts.  In
the event of any conflict between the provisions of this Agreement and the
provisions of any Revolving Credit Facility Credit Document, any Term Loan
Credit Document, or any Additional Pari Passu Credit Documents, the provisions
of this Agreement shall govern and control.  Notwithstanding the
foregoing, the parties hereto acknowledge that, except as expressly set forth
herein, this Agreement does not impose any obligations on the Loan Parties.

      

       

      8.2 Effectiveness; Continuing
Nature of this Agreement; Severability.  This Agreement shall
become effective when executed and delivered by the parties
hereto.  This is a continuing agreement of lien subordination and the
Revolving Credit Claimholders, the Term Loan Claimholders and the
Additional Pari Passu Claimholders may continue, at any time and without notice
to any Agent, to extend credit and other financial accommodations and lend
monies to or for the benefit of any Grantor in reliance hereon.  Each
of the Agents, on behalf of itself and the Revolving Credit Claimholders, the
Term Loan Claimholders or the Additional Pari Passu Claimholders, as the case
may be, hereby waives any right it may have under applicable law to revoke this
Agreement or any of the provisions of this Agreement.  The terms of
this Agreement shall survive, and shall continue in full force and effect,
during and after the commencement of an Insolvency or Liquidation
Proceeding.  Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall not invalidate the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.  All references to any Grantor shall include such
Grantor as debtor and debtor-in-possession and any receiver or trustee for any
Grantor (as the case may be) in any Insolvency or Liquidation
Proceeding.  This Agreement shall terminate and be of no further force
and effect:

       

    

     

     

     

    
      
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    (a) with
respect to the Revolving Credit Facility Collateral Agent, the Revolving Credit
Facility Administrative Agent, the Revolving Credit Claimholders and the
Revolving Credit Obligations, on the date of the Discharge of Revolving Credit
Obligations, subject to the provisions of Section 5.5 and the rights of the
Revolving Credit Claimholders under Sections 4.4 and 6.4;

     

     

    (b)  with
respect to the Term Loan Collateral Agent, the Term Loan Administrative Agent,
the Term Loan Claimholders and the Term Loan Obligations, on the date of the
Discharge of Term Loan Obligations, subject to the provisions of Section 5.5 and
the rights of the Term Loan Claimholders under Sections 4.4 and 6.4;
and

     

     

    (c) with
respect to each applicable Additional Pari Passu Debt Representative, the
Additional Pari Passu Claimholders of any Series and any Additional Pari
Passu Obligations relating to such Series, on the date of the Discharge of
Additional Pari Passu Obligations with respect to such Series only, subject to
the provisions of Section 5.5 and the rights of the Additional Pari Passu
Claimholders under Sections 4.4 and 6.4.

     

     

    8.3 Amendments;
Waivers.  No amendment, modification or waiver of any of the
provisions of this Agreement by the Term Loan Collateral Agent, the Revolving
Credit Facility Collateral Agent or any Additional Pari Passu Debt
Representative shall be deemed to be made unless the same shall be in writing
signed on behalf of each party hereto or its authorized agent and each waiver,
if any, shall be a waiver only with respect to the specific instance involved
and shall in no way impair the rights of the parties making such waiver or
the obligations of the other parties to such party in any other respect or at
any other time.  Notwithstanding the foregoing, no Grantor shall have
any right to consent to or approve any amendment, modification or waiver of any
provision of this Agreement except to the extent that such amendment,
modification or waiver (i) directly and adversely affects or impairs its rights
under this Agreement, under the Term Loan Credit Documents, under any Additional
Pari Passu Credit Documents or under the Revolving Credit Facility Credit
Documents, or (ii) directly imposes any additional obligation or liability upon
it.

     

     

    8.4 Information Concerning
Financial Condition of the Grantors and their
Subsidiaries.  The Revolving Credit Facility Collateral Agent,
the Revolving Credit Claimholders, the Term Loan Collateral Agent, the Term Loan
Claimholders, each Additional Pari Passu Debt Representative and the Additional
Pari Passu Claimholders, shall each be responsible for keeping themselves
informed of (a) the financial condition of the Grantors and their Subsidiaries
and all endorsers and/or guarantors of the Revolving Credit Obligations, the
Term Loan Obligations and the applicable Additional Pari Passu Obligations, and
(b) all other circumstances bearing upon the risk of nonpayment of the
respective obligations.  None of the Agents or Claimholders shall have
any duty to advise any other such Person of information known to it or them
regarding such condition or any such circumstances or

     

    
      
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    otherwise.  In
the event that any Agent or any Claimholder undertakes at any time or from time
to time to provide any such information to any of the others, it or they shall
be under no obligation:

     

     

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

     

     

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

     

     

    (c) to
undertake any investigation; or

     

     

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

     

     

    8.5 Subrogation.

     

     

    (a) With
respect to the value of any payments or distributions in cash, property or other
assets that any of the Term Loan Claimholders, the Term Loan Collateral Agent,
any Additional Pari Passu Debt Representative or the Additional Pari Passu
Claimholders (each a “Payor”) pays over to the Revolving Credit Facility
Collateral Agent or the Revolving Credit Claimholders under the terms of this
Agreement, such Payor shall be subrogated to the rights of the Revolving Credit
Facility Collateral Agent and the Revolving Credit Claimholders; provided that, the
Term Loan Collateral Agent, on behalf of itself and the Term Loan Claimholders,
and Additional Pari Passu Debt Representatives for the benefit of the applicable
Additional Pari Passu Claimholders, each hereby agrees not to assert or enforce
all such rights of subrogation it may acquire as a result of any payment
hereunder until the Discharge of Revolving Credit Obligations has
occurred.  The Grantors acknowledge and agree that, to the extent
permitted by applicable law, the value of any payments or distributions in cash,
property or other assets received by any Payor that are paid over to the
Revolving Credit Facility Collateral Agent or the Revolving Credit Claimholders
pursuant to this Agreement shall not reduce any of the Term Loan Obligations or
applicable Additional Pari Passu Obligations.

     

     

    (b) With
respect to the value of any payments or distributions in cash, property or other
assets that any of the Revolving Credit Claimholders or the Revolving Credit
Facility Collateral Agent pays over to the Term Loan Collateral Agent, the Term
Loan Claimholders, any Additional Pari Passu Debt Representative or the
Additional Pari Passu Claimholders (each such Person, a “Payee”) under the terms
of this Agreement, the Revolving Credit Claimholders and the Revolving Credit
Facility Collateral Agent shall be subrogated to the rights of such Payee; provided that, the
Revolving Credit Facility Collateral Agent, on behalf of itself and the
Revolving Credit Claimholders, hereby agrees not to assert or enforce all such
rights of subrogation it may acquire as a result of any payment hereunder until
the Discharge of Term Loan Obligations and the Discharge of Additional Pari
Passu Obligations have occurred.  The Grantors acknowledge and
agree that, to the extent permitted by applicable law, the value of any payments
or distributions in cash, property or other assets received by the Revolving
Credit Facility Collateral Agent or the Revolving Credit Claimholders that are
paid over to a Payee pursuant to this Agreement shall not reduce any of the
Revolving Credit Obligations.

     

     

    8.6 SUBMISSION TO JURISDICTION;
WAIVERS.

     

     

    (a) JUDICIAL
PROCEEDINGS BROUGHT AGAINST ANY PARTY ARISING OUT OF OR RELATING HERETO MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF

     

    
      
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    COMPETENT
JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK.  BY
EXECUTING AND DELIVERING THIS AGREEMENT, EACH PARTY FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, IRREVOCABLY:

     

     

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

     

     

    (2) WAIVES
ANY DEFENSE OF FORUM NON CONVENIENS;

     

     

    (3) AGREES
THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE
BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE
PARTY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 8.7 (OR IN THE CASE OF
ANY GRANTOR ORGANIZED OR EXISTING UNDER THE LAWS OF A JURISDICTION OUTSIDE THE
UNITED STATES, TO ITS AGENT SPECIFIED IN SECTION 8.18); AND

     

     

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

     

     

    (b) EACH OF
THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER.  THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL
DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER
HEREOF, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS
AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.  EACH PARTY HERETO
ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS
AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED
FUTURE DEALINGS.  EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS
THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY
AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.  THIS WAIVER IS IRREVOCABLE; MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER
SPECIFICALLY REFERRING TO THIS SECTION 8.6(b) AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO.  IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.

     

     

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

     

     

    8.7 Notices.  All
notices to the Term Loan Claimholders and the Revolving Credit Claimholders
permitted or required under this Agreement shall also be sent to the Term Loan
Collateral Agent and the Revolving Credit Facility Collateral Agent,
respectively.  Unless otherwise specifically

     

    
      
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    provided
herein, any notice hereunder shall be in writing and may be personally served or
sent by telecopier or mail or courier service and shall be deemed to have been
given when delivered in person or by courier service and signed for against
receipt thereof, upon receipt of telecopier transmission, or upon deposit in the
mail with postage prepaid and properly addressed.  For the purposes
hereof, the addresses of the parties hereto shall be as set forth below each
party’s name on the signature pages hereto, or, as to each party, at such other
address as may be designated by such party in a written notice to all of the
other parties.

     

     

    8.8 Further
Assurances.  The Revolving Credit Facility Collateral Agent, on
behalf of itself and the Revolving Credit Claimholders under the Revolving
Credit Facility Credit Documents, the Term Loan Collateral Agent, on behalf of
itself and the Term Loan Claimholders under the Term Loan Credit Documents, the
Additional Pari Passu Debt Representatives, on behalf of itself and the
applicable Additional Pari Passu Claimholders under the Additional Pari Passu
Credit Documents, and the Grantors, agree that each of them shall take such
further action and shall execute and deliver such additional documents and
instruments (in recordable form, if requested) as an Agent may reasonably
request to effectuate the terms of and the Lien priorities contemplated by this
Agreement.

     

     

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

     

     

    8.10 Binding on Successors and
Assigns.  This Agreement shall be binding upon the Revolving
Credit Facility Collateral Agent, the Revolving Credit Facility Administrative
Agent, the Revolving Credit Claimholders, the Term Loan Collateral Agent, the
Term Loan Administrative Agent, the Term Loan Claimholders, each Additional Pari
Passu Debt Representative, the Additional Pari Passu Claimholders and their
respective successors and assigns.  Each Revolving Credit Facility
Agent represents that it has not agreed to any modification of the provisions in
the Revolving Credit Facility Credit Documents authorizing it to execute this
Agreement and bind the other Revolving Credit Claimholders.  Each Term
Loan Agent represents that it has not agreed to any modification of the
provisions in the Term Loan Credit Documents authorizing it to execute this
Agreement and bind the other Term Loan Claimholders.  Each Additional
Pari Passu Debt Representative represents that it has not agreed to any
modification of the provisions in the applicable Additional Pari Passu Credit
Documents authorizing it to execute this Agreement and bind the Additional
Pari Passu Claimholders.  Notwithstanding any implication to the
contrary in any provision in any other section of the Agreement, no Agent makes
any representation regarding the validity or binding effect of any of the
Revolving Credit Facility Credit Documents or any of the Term Loan Credit
Documents, or their authority to bind any of the Revolving Credit
Claimholders or the Term Loan Claimholders through their execution of this
Agreement.

     

     

    8.11 Specific
Performance.  Each Agent may demand specific performance of
this Agreement.  The Revolving Credit Facility Collateral Agent, on
behalf of itself and the Revolving Credit Claimholders, the Term Loan Collateral
Agent, on behalf of itself and the Term Loan Claimholders, and Additional Pari
Passu Debt Representatives for the benefit of the applicable Additional Pari
Passu Claimholders each hereby irrevocably waive any defense based on the
adequacy of a remedy at law and any other defense which might be asserted to bar
the remedy of specific performance in any action which may be brought by any
other Agent or Claimholder, as the case may be.

     

     

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

     

    
      
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    8.13 Counterparts.  This
Agreement may be executed in counterparts (and by different parties hereto in
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single
contract.  Delivery of an executed counterpart of a signature page of
this Agreement or any document or instrument delivered in connection herewith by
telecopier or other electronic image scan transmission (e.g., “PDF” or “tif” via
e-mail) shall be effective as delivery of a manually executed counterpart of
this Agreement or such other document or instrument, as applicable.

     

     

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

     

     

    8.15 No Third Party
Beneficiaries.  This Agreement and the rights and benefits
hereof shall inure to the benefit of each of the Agents, the Revolving Credit
Claimholders and the Term Loan Claimholders, and to the extent applicable, to
the Grantors.  Nothing in this Agreement shall impair, as between the
Grantors and each Agent and each of the Claimholders, the obligations of the
Grantors to pay principal, interest, fees and other amounts as provided in the
applicable credit documents.

     

     

    8.16 Provisions to Define
Relative Rights; Other Intercreditor
Agreements.  Except with respect to the bailee and agency
provisions of Section 5.4, the provisions of this Agreement are and are intended
for the purpose of defining the relative rights of the Revolving Credit Facility
Collateral Agent and the Revolving Credit Claimholders on the one hand, and the
Term Loan Collateral Agent, the Term Loan Claimholders, the Additional Pari
Passu Debt Representatives and the Additional Pari Passu Claimholders, on the
other hand.  No Grantor nor any other creditor of any Grantor shall
have any rights hereunder (other than the rights of the Grantors expressly set
forth in Section 8.3) and no Grantor may rely on the terms hereof, except that
the Grantors may rely on Sections 5.4 and 8.3 hereof with respect to matters set
forth therein and, to the extent that any provision hereof governs the priority
of security interests, the Grantors may rely on such provision in making
representations and warranties relating to priority of security interests in the
Revolving Credit Facility Credit Documents, the Term Loan Credit Documents and
the Additional Pari Passu Credit Documents.  Nothing in this Agreement
is intended to or shall impair the obligations of any Grantor, which are
absolute and unconditional, to pay and perform the Revolving Credit Obligations,
the Term Loan Obligations and the Additional Pari Passu Obligations, in each
case as and when the same shall become due and payable in accordance with their
terms. Nothing in this Agreement shall prevent one or more Series of Additional
Pari Passu Claimholders from entering into intercreditor agreements with any
other Series of Additional Pari Passu Claimholders or with the Term Loan Agents
and Term Loan Claimholders in order to define the relative rights of such Agents
and Claimholders with respect to the Common Collateral; provided that (i) any
such agreement provides that it is subject to the terms of this Agreement, and
(ii) no such agreement shall be binding on any Revolving Credit Claimholder or
Revolving Credit Facility Agent or, unless an express party thereto, on any Term
Loan Claimholder or any Term Loan Agent.

     

     

    8.17 Actions Upon
Breach.  If any Term Loan Claimholder, any of the Additional
Pari Passu Claimholders or any Revolving Credit Claimholder, contrary to this
Agreement, commences or participates in any action or proceeding against any
Grantor or the Collateral, such Grantor, with the prior written consent of the
applicable Agent, may interpose as a defense or dilatory plea the making of this
Agreement, and any Claimholder may intervene and interpose such defense or plea
in its or their name or in the name of such Grantor.

     

     

    8.18 Joinder of Additional
Grantors.  The Grantors party hereto shall cause each Person
which, from time to time, after the date hereof, is required to be a Grantor
pursuant to the terms of the Term Loan Credit Documents, to execute and deliver
to the Agents an Intercreditor Agreement Joinder within five days (or such
longer period as may be determined by the Agents in their sole

     

    
      
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    discretion)
of the date on which such Person becomes a party to any Revolving Credit
Facility Security Document, any Additional Pari Passu Credit Documents or any
Term Loan Security Document and, upon execution and delivery of such
Intercreditor Joinder Agreement, such Person shall constitute a “Grantor” for
all purposes hereunder with the same force and effect as if originally named as
a Grantor herein.  The execution and delivery of such Intercreditor
Agreement Joinder shall not require the consent of any other party
hereto.  The obligations of each Grantor hereunder shall remain in
full force and effect notwithstanding the addition of any new Grantor as a party
to this Agreement.

     

     

    SECTION
9.  Designated
Fixed Asset Collateral Agent

     

     

    9.1 Appointment, Duties, Powers and
Authority.

     

     

    (a) Each of
the Term Loan Agent, for itself and on behalf of each Term Loan Claimholder, and
each Additional Pari Passu Debt Representative, for itself and on behalf of the
Additional Pari Passu Claimholders, irrevocably appoints and authorizes the
Designated Fixed Asset Collateral Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are expressly
delegated to it by the terms hereof, together with all such powers as are
reasonably incidental thereto.  The Designated Fixed Asset Collateral
Representative shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Claimholder
or any Agent, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities on the part of the Designated Fixed Asset Collateral
Representative shall be read into this Agreement or shall otherwise exist
against the Designated Fixed Asset Collateral Representative.  The
provisions of this Section 9 are solely for the benefit of the Designated Fixed
Asset Collateral Representative, the Agents and the Claimholders.

     

     

    (b) The
Designated Fixed Asset Collateral Representative’s duties hereunder are solely
ministerial and administrative in nature and it shall not have any duties or
obligations except those expressly set forth herein.  Without limiting
the generality of the foregoing, the Designated Fixed Asset Collateral
Representative shall not have any duty to take any discretionary action or to
exercise any discretionary powers, but shall be required to act or refrain from
acting (and shall be fully protected in so acting or refraining from acting)
solely in accordance with this Agreement, provided that it
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose the Designated Fixed Asset Collateral Representative or
any of its Affiliates to liability or that is contrary to any applicable
law.

     

     

    (c) Neither
the Designated Fixed Asset Collateral Representative or any of its agents,
officers, shareholders, affiliates, directors, managers, administrators,
trustees, partners, employees, advisors and other representatives shall be
liable to the other Agents or Claimholders for any action taken or not taken by
it in the absence of its own gross negligence or willful misconduct, as
determined by a final judgment of a court of competent
jurisdiction.

     

     

    (d) The
Designated Fixed Asset Collateral Representative shall not be responsible for or
have any duty to ascertain or inquire into (i) any statement, warranty,
representation or other information made or supplied in or in connection with
this Agreement, any other Credit Agreement or the Collateral, (ii) the contents
of any certificate, report or other document delivered hereunder or thereunder
or in connection herewith or therewith or the adequacy, accuracy and/or
completeness of the information contained therein, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein, or (iv) the validity, effectiveness, enforceability or
genuineness of this Agreement, the other Credit Agreements or any other
instrument or writing furnished in connection herewith.

     

     

    
      
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    9.2 Exculpatory Provisions and
Indemnity. 

     

     

    (a) The
Designated Fixed Asset Collateral Representative shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement, any
Credit Agreement or any other document furnished in connection herewith or
therewith in accordance with the terms hereof.  The Designated Fixed
Asset Collateral Representative shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated by the
proper Person.  The Designated Fixed Asset Collateral
Representative also may rely upon any statement made to it orally or by
telephone and believed by it to have been made by the proper Person, and shall
not incur any liability for relying thereon.  The Designated Fixed
Asset Collateral Representative may consult with legal counsel, independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

     

     

    (b) The
Company agrees to indemnify the Designated Fixed Asset Collateral
Representative, and each of its Affiliates (each such Person being called
an “Indemnitee”) against,
and to hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and out-of-pocket expenses, including reasonable counsel fees,
charges and disbursements, incurred by or asserted against any Indemnitee
arising out of, in any way connected with, or as a result of (i) the execution,
delivery and enforcement of this Agreement or any agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective
obligations hereunder or the other transactions contemplated hereby, or (ii) any
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or expenses (A) are determined by a final
judgment of a court of competent jurisdiction to have arisen by reason of the
Indemnitee’s gross negligence, bad faith or willful misconduct or (B) arise from
any action solely among Indemnitees, other than any such actions that arise from
an act or an omission of the Company or any Subsidiary (and provided that
withstanding the foregoing provisions of this clause (B), the Designated Fixed
Asset Collateral Representative, acting in such capacity, shall in any event be
indemnified subject to the other limitations set forth in this Section; and
provided, further, that in the
absence of conflicts, reimbursement of reasonable legal fees, charges and
disbursements in respect of any matter for which indemnification is sought shall
be limited to reasonable fees, charges and disbursements of one counsel for all
such Indemnitees (and any appropriate foreign and local counsel in applicable
foreign and local jurisdictions).

     

     

    (c) To the
extent that the Company fails to promptly pay any amount to be paid by it to the
Designated Fixed Asset Collateral Representative under paragraph (b) of this
Section, each Agent severally agrees to pay to the Designated Fixed Asset
Collateral Representative, such Agent’s pro rata share (determined as of the
time that the applicable un-reimbursed expense or indemnity payment is sought)
of such unpaid amount; provided that the
un-reimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the Designated
Fixed Asset Collateral Representative in its capacity as such.  For
purposes hereof, an Agent’s “pro rata share” shall be determined based upon
its Claimholders’ share of the sum of the total outstanding Obligations at
the time.

     

     

    (d) To the
extent permitted by applicable law, neither the Company nor any Agent shall
assert, and such Persons hereby waive, any claim against the Designated Fixed
Asset Collateral Representative or any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Agreement or any other agreement or instrument contemplated hereby; provided that
notwithstanding the foregoing, to the extent required by Section 9.2(b), the
Company shall be required to

     

    
      
        62 

      

      
         

        
          

        

      

      
         

      

    

     

    indemnify
each Indemnitee for any special, indirect, consequential or punitive damages of
Persons other than any Indemnitee.

     

     

    (e) The
provisions of this Section 9.2 shall remain operative and in full force and
effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Obligations, the invalidity or unenforceability of any term or provision of
this Agreement or of any Credit Agreements, or any investigation made by or on
behalf of the Designated Fixed Asset Collateral Representative.  All
amounts due under this Section 9.2 shall be payable on written demand (together
with customary backup documentation supporting such reimbursement request)
therefor.

     

     

    9.3 Delegation of
Duties.  The Designated Fixed Asset Collateral Representative
may perform any and all of its duties and exercise its rights and powers
hereunder by or through any one or more sub-agents appointed by the Designated
Fixed Asset Collateral Representative.  The Designated Fixed Asset
Collateral Representative and any such sub-agent may perform any and all of its
duties and exercise its rights and powers by or through their respective
Affiliates.  Each such sub-agent and the Affiliates of the Designated
Fixed Asset Collateral Representative and each such sub-agent shall be entitled
to the benefits of all provisions of this Section 9 (as though such sub-agents
were the “The Designated Fixed Asset Collateral Representative”) as if set forth
in full herein with respect thereto.

     

     

    9.4 Resignation and
Removal.  The Designated Fixed Asset Collateral Representative
may resign at any time by giving 30 days' prior written notice thereof to the
Claimholders and the Agents.  Upon any such resignation, the Term Loan
Agents and the Additional Pari Passu Debt Representatives shall have the right
to appoint a successor Designated Fixed Asset Collateral Representative with the
consent of the Revolving Credit Facility Agent (which consent shall not be
unreasonably withheld, conditioned or delayed).  If no successor
Designated Fixed Asset Collateral Representative shall have been so appointed by
the Term Loan Agents and the Additional Pari Passu Debt Representatives, and
shall have accepted such appointment, within 30 days after the retiring
Designated Fixed Asset Collateral Representative gives notice of resignation,
then the Revolving Credit Facility Agent may appoint a successor Designated
Fixed Asset Collateral Representative.  Upon the acceptance of its
appointment as such Designated Fixed Asset Collateral Representative hereunder
by a successor Designated Fixed Asset Collateral Representative, such successor
Designated Fixed Asset Collateral Representative shall thereupon succeed to and
become vested with all the rights and duties of the retiring Designated Fixed
Asset Collateral Representative, and the retiring Designated Fixed Asset
Collateral Representative shall be discharged from its duties and obligations
hereunder.  After any retiring Designated Fixed Asset Collateral
Representative's resignation hereunder as Designated Fixed Asset Collateral
Representative, the provisions of this Article shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was an Designated Fixed
Asset Collateral Representative.

     

     

    

     

     

    [Remainder of page intentionally left
blank]

     

    
      
        63 

      

      
         

        
          

        

      

      
         

      

    

     

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

     

    
      
        
          
            	 	CITIBANK,
      N.A.,	 
	 	as
      Term Loan Administrative Agent and as Term Loan Collateral Agent	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/
      David Jaffe	 
	 	 	Name: 
      David Jaffe	 
	 	 	
                    Title: 
      Director/Vice President

                     

                  	 
	 	 	
                    Citibank,
      N.A.

                    2 Penn's Way

                    New Castle, DE 19720

                     

                    Attention of:  Kenneth Rineheimer

                     

                    Telecopier No.:  212-994-0961

                     

                    E-Mail
      Address:  Kenneth.Rinehimer@citigroup.com

                  	 

          

        

      

    

     

     

     

    
      
        
          
            	 	CITIBANK,
      N.A.,	 
	 	as
      Revolving Credit Facility Administrative Agent and as Revolving Credit
      Facility Collateral Agent	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/ David
      Jaffe	 
	 	 	Name: 
      David Jaffe	 
	 	 	
                    Title: 
      Director/Vice President

                     

                  	 
	 	 	
                    Citibank,
      N.A.

                    2 Penn's Way

                    New Castle, DE 19720

                     

                    Attention of:  Kenneth Rinehimer

                     

                    Telecopier No.:  212-994-0961

                     

                    E-Mail
      Address:  Kenneth.Rinehimer@citigroup.com

                  	 

          

        

      

    

    
    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Acknowledged
and Agreed to by:

     

    SOLUTIA
INC.

     

     

    
      
        
          
            
              	 By:	 /s/ James A. Tichenor	 	 
	 Name:	 James
      A. Tichenor	 	 
	 Title:	 Authorized
      Officer	 	 

            

          

        

      

    

                                                                

    575
Maryville Centre Drive

    P.O. Box
66760

    St.
Louis, Missouri  63166-6760

    (courier
delivers to: 575 Maryville Centre Drive, St. Louis,
Missouri  63141)

    Attention
of:  James Tichenor and Paul J. Berra, III

    Telecopier
No.:  314-674-2721

    E-Mail
Address:

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    CPFILMS
INC.

    
       

      
        
          
            
              
                	 By:	 /s/ James A. Tichenor	 	 
	 Name:	 James
      A. Tichenor	 	 
	 Title:	 Authorized
      Officer	 	 

              

            

          

        

      

                                         

    

     

    c/o
Solutia Inc.

    575
Maryville Centre Drive

    P.O. Box
66760

    St.
Louis, Missouri  63166-6760

    (courier
delivers to: 575 Maryville Centre Drive, St. Louis,
Missouri  63141)

    Attention
of:  James Tichenor and Paul J. Berra, III

    Telecopier
No.:  314-674-2721

    E-Mail
Address:

    

    

    FLEXSYS
AMERICA CO.

     

    
      
        
          
            
              
                	 By:	 /s/ James A. Tichenor	 	 
	 Name:	 James
      A. Tichenor	 	 
	 Title:	 Authorized
      Officer	 	 

              

            

          

        

      

                                         

    

    c/o
Solutia Inc.

    575
Maryville Centre Drive

    P.O. Box
66760

    St.
Louis, Missouri  63166-6760

    (courier
delivers to: 575 Maryville Centre Drive, St. Louis,
Missouri  63141)

    Attention
of:  James Tichenor and Paul J. Berra, III

    Telecopier
No.:  314-674-2721

    E-Mail
Address:

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    FLEXSYS
AMERICA L.P.

    

    by FLEXSYS AMERICA CO.,

    its general partner

    
       

      
        
          
            
              
                
                  	 By:	 /s/ James A. Tichenor	 	 
	 Name:	 James
      A. Tichenor	 	 
	 Title:	 Authorized
      Officer	 	 

                

              

            

          

        

                                           

      

    

    c/o
Solutia Inc.

    575
Maryville Centre Drive

    P.O. Box
66760

    St.
Louis, Missouri  63166-6760

    (courier
delivers to: 575 Maryville Centre Drive, St. Louis,
Missouri  63141)

    Attention
of:  James Tichenor and Paul J. Berra, III

    Telecopier
No.:  314-674-2721

    E-Mail
Address:

    

    

    MONCHEM
INTERNATIONAL, INC.

    
       

      
        
          
            
              
                
                  	 By:	 /s/ James A. Tichenor	 	 
	 Name:	 James
      A. Tichenor	 	 
	 Title:	 Authorized
      Officer	 	 

                

              

            

          

        

                                           

      

    

    c/o
Solutia Inc.

    575
Maryville Centre Drive

    P.O. Box
66760

    St.
Louis, Missouri  63166-6760

    (courier
delivers to: 575 Maryville Centre Drive, St. Louis,
Missouri  63141)

    Attention
of:  James Tichenor and Paul J. Berra, III

    Telecopier
No.:  314-674-2721

    E-Mail
Address:

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SOLUTIA
BUSINESS ENTERPRISES, INC.

     

    
      
        
          
            
              
                
                  	 By:	 /s/ James A. Tichenor	 	 
	 Name:	 James
      A. Tichenor	 	 
	 Title:	 Authorized
      Officer	 	 

                

              

            

          

        

                                           

      

    

    c/o
Solutia Inc.

    575
Maryville Centre Drive

    P.O. Box
66760

    St.
Louis, Missouri  63166-6760

    (courier
delivers to: 575 Maryville Centre Drive, St. Louis,
Missouri  63141)

    Attention
of:  James Tichenor and Paul J. Berra, III

    Telecopier
No.:  314-674-2721

    E-Mail
Address:

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SOLUTIA
INTER-AMERICA, INC.

    
       

      
        
          
            
              
                
                  	 By:	 /s/ James A. Tichenor	 	 
	 Name:	 James
      A. Tichenor	 	 
	 Title:	 Authorized
      Officer	 	 

                

              

            

          

        

                                           

      

    

    c/o
Solutia Inc.

    575
Maryville Centre Drive

    P.O. Box
66760

    St.
Louis, Missouri  63166-6760

    (courier
delivers to: 575 Maryville Centre Drive, St. Louis,
Missouri  63141)

    Attention
of:  James Tichenor and Paul J. Berra, III

    Telecopier
No.:  314-674-2721

    E-Mail
Address:

    

    

    SOLUTIA
OVERSEAS, INC.

     

    
      
        
          
            
              
                
                  	 By:	 /s/ James A. Tichenor	 	 
	 Name:	 James
      A. Tichenor	 	 
	 Title:	 Authorized
      Officer	 	 

                

              

            

          

        

                                           

      

    

    c/o
Solutia Inc.

    575
Maryville Centre Drive

    P.O. Box
66760

    St.
Louis, Missouri  63166-6760

    (courier
delivers to: 575 Maryville Centre Drive, St. Louis,
Missouri  63141)

    Attention
of:  James Tichenor and Paul J. Berra, III

    Telecopier
No.:  314-674-2721

    E-Mail
Address:

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SOLUTIA
SYSTEMS, INC.

    
       

      
        
          
            
              
                
                  	 By:	 /s/ James A. Tichenor	 	 
	 Name:	 James
      A. Tichenor	 	 
	 Title:	 Authorized
      Officer	 	 

                

              

            

          

        

                                    

      

    

    c/o
Solutia Inc.

    575
Maryville Centre Drive

    P.O. Box
66760

    St.
Louis, Missouri  63166-6760

    (courier
delivers to: 575 Maryville Centre Drive, St. Louis,
Missouri  63141)

    Attention
of:  James Tichenor and Paul J. Berra, III

    Telecopier
No.:  314-674-2721

    E-Mail
Address:

    

    

    

    S E
INVESTMENT LLC

    
       

      
        
          
            
              
                
                  	 By:	 /s/ James A. Tichenor	 	 
	 Name:	 James
      A. Tichenor	 	 
	 Title:	 Authorized
      Officer	 	 

                

              

            

          

        

                                           

      

    

    c/o
Solutia Inc.

    575
Maryville Centre Drive

    P.O. Box
66760

    St.
Louis, Missouri  63166-6760

    (courier
delivers to: 575 Maryville Centre Drive, St. Louis,
Missouri  63141)

    Attention
of:  James Tichenor and Paul J. Berra, III

    Telecopier
No.:  314-674-2721

    E-Mail
Address:Exhibit 10.91

 

AMENDED
AND RESTATED LOAN AGREEMENT

 

by
and between

 

U.S. BANK NATIONAL ASSOCIATION, a national banking association, and
EAST-WEST BANK, a California banking corporation,

 

“Banks”
or “Lenders,”

 

U.S. BANK NATIONAL ASSOCIATION, a national banking association, “Agent,”

 

and

 

KENNEDY-WILSON,
INC., a Delaware corporation,

 

“Borrower”

 

Dated
as of June 5, 2008

 

 

TABLE OF CONTENTS

 

	
   

  	
  Page

  
	
  DEFINITIONS
  AND CONSTRUCTION

  	
  1

  
	
   

  	
  1.1

  	
  Definitions

  	
  1

  
	
   

  	
  1.2

  	
  Accounting
  Terms

  	
  10

  
	
   

  	
  1.3

  	
  Code

  	
  10

  
	
   

  	
  1.4

  	
  Construction

  	
  10

  
	
   

  	
  1.5

  	
  Schedules
  and Exhibits

  	
  11

  
	
  2.
  LOAN AND TERMS OF PAYMENT

  	
  11

  
	
   

  	
  2.1

  	
  Revolving
  Advances

  	
  11

  
	
   

  	
  2.2

  	
  Interest
  Rates, Payments, and Calculations

  	
  11

  
	
   

  	
  2.3

  	
  Crediting
  Payments; Application of Collections

  	
  13

  
	
   

  	
  2.4

  	
  Designated
  Account

  	
  14

  
	
   

  	
  2.5

  	
  Maintenance
  of Loan Accounts; Statements of Obligations

  	
  14

  
	
   

  	
  2.6

  	
  Fees,
  Costs, and Charges

  	
  14

  
	
  3.

  	
  CONDITIONS; TERM OF AGREEMENT

  	
  15

  
	
   

  	
  3.1

  	
  Conditions
  Precedent to the Initial Advance

  	
  15

  
	
   

  	
  3.2

  	
  Conditions
  Precedent to all Advances

  	
  16

  
	
   

  	
  3.3

  	
  [Intentionally
  Omitted.]

  	
  17

  
	
   

  	
  3.4

  	
  Term

  	
  17

  
	
   

  	
  3.5

  	
  Early
  Termination by Borrower

  	
  17

  
	
  4.

  	
  RIGHT OF INSPECTION

  	
  17

  
	
  5.

  	
  REPRESENTATIONS AND WARRANTIES

  	
  17

  
	
   

  	
  5.1

  	
  No
  Encumbrances

  	
  17

  
	
   

  	
  5.2

  	
  Equipment

  	
  17

  
	
   

  	
  5.3

  	
  Intentionally
  Omitted

  	
  18

  
	
   

  	
  5.4

  	
  Schedule
  of Indebtedness

  	
  18

  
	
   

  	
  5.5

  	
  Location
  of Chief Executive Office; FEIN

  	
  18

  
	
   

  	
  5.6

  	
  Due
  Organization and Qualification; Subsidiaries

  	
  18

  
	
   

  	
  5.7

  	
  Due
  Authorization; No Conflict

  	
  18

  
	
   

  	
  5.8

  	
  Litigation

  	
  19

  
	
   

  	
  5.9

  	
  No
  Material Adverse Change

  	
  19

  
	
   

  	
  5.10

  	
  Solvency

  	
  19

  
	
   

  	
  5.11

  	
  Employee
  Benefits

  	
  19

  
	
   

  	
  5.12

  	
  Maximum
  Balance Sheet Leverage

  	
  20

  
	
   

  	
  5.13

  	
  Minimum
  Rent Adjusted Fixed Charge Coverage Ratio

  	
  20

  
	
  6.

  	
  AFFIRMATIVE COVENANTS

  	
  20

  
	
   

  	
  6.1

  	
  Accounting
  System

  	
  20

  
	
   

  	
  6.2

  	
  Financial
  Covenants

  	
  20

  
	
   

  	
  6.3

  	
  Financial
  Statements, Reports, Certificates

  	
  20

  

 

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
  6.4

  	
  Chairman;
  CEO

  	
  22

  
	
   

  	
  6.5

  	
  Title
  to Equipment

  	
  22

  
	
   

  	
  6.6

  	
  Maintenance
  of Equipment

  	
  22

  
	
   

  	
  6.7

  	
  Taxes

  	
  22

  
	
   

  	
  6.8

  	
  Insurance

  	
  22

  
	
   

  	
  6.9

  	
  No
  Setoffs or Counterclaims

  	
  23

  
	
   

  	
  6.10

  	
  Dispositions
  at Fair Market Consideration

  	
  23

  
	
   

  	
  6.11

  	
  CompliancewithLaws

  	
  23

  
	
   

  	
  6.12

  	
  Employee
  Benefits

  	
  23

  
	
   

  	
  6.13

  	
  Compliance
  with Leases

  	
  24

  
	
  7.
  NEGATIVE COVENANTS

  	
  24

  
	
   

  	
  7.1

  	
  Indebtedness

  	
  24

  
	
   

  	
  7.2

  	
  Liens

  	
  25

  
	
   

  	
  7.3

  	
  Restrictions
  on Fundamental Changes

  	
  25

  
	
   

  	
  7.4

  	
  Disposal
  of Assets

  	
  25

  
	
   

  	
  7.5

  	
  Change
  Name

  	
  25

  
	
   

  	
  7.6

  	
  Guaranty

  	
  25

  
	
   

  	
  7.7

  	
  Nature
  of Business

  	
  25

  
	
   

  	
  7.8

  	
  Prepayments
  and Amendments

  	
  25

  
	
   

  	
  7.9

  	
  Change
  of Control

  	
  26

  
	
   

  	
  7.10

  	
  Intentionally
  Omitted

  	
  26

  
	
   

  	
  7.11

  	
  Accounting
  Methods

  	
  26

  
	
   

  	
  7.12

  	
  Investments

  	
  26

  
	
   

  	
  7.13

  	
  Transactions
  with Affiliates

  	
  26

  
	
   

  	
  7.14

  	
  Suspension

  	
  26

  
	
   

  	
  7.15

  	
  Intentionally
  Omitted

  	
  26

  
	
   

  	
  7.16

  	
  Use
  of Proceeds

  	
  27

  
	
   

  	
  7.17

  	
  Change
  in Location of Chief Executive Office Equipment with Bailees

  	
  27

  
	
   

  	
  7.18

  	
  Intentionally
  Omitted

  	
  27

  
	
   

  	
  7.19

  	
  Intentionally
  Omitted

  	
  27

  
	
   

  	
  7.20

  	
  Downstreaming
  of Funds

  	
  27

  
	
   

  	
  7.21

  	
  Excessive
  Acquisitions

  	
  27

  
	
   

  	
  7.22

  	
  Intentionally
  Omitted

  	
  27

  
	
   

  	
  7,23

  	
  Dividends

  	
  27

  
	
   

  	
  7.24

  	
  Stock
  Repurchases

  	
  27

  
	
  8.

  	
  EVENTS OF DEFAULT

  	
  27

  
	
   

  	
  8.1

  	
  Failure
  to Make Payment

  	
  28

  
	
   

  	
  8.2

  	
  Failure
  to Perform

  	
  28

  
	
   

  	
  8.3

  	
  Material
  Adverse Change

  	
  28

  
	
   

  	
  8.4

  	
  Attachment
  or Other Process

  	
  28

  

 

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
  8.5

  	
  Insolvency
  Proceeding by Borrower

  	
  28

  
	
   

  	
  8.6

  	
  Insolvency
  Proceeding Against Borrower

  	
  28

  
	
   

  	
  8.7

  	
  Injunction
  or Other Process

  	
  28

  
	
   

  	
  8.8

  	
  Lien
  or Other Process

  	
  28

  
	
   

  	
  8.9

  	
  Judgment
  or Claim, Lien

  	
  28

  
	
   

  	
  8.10

  	
  Defaults
  in Material Agreement

  	
  28

  
	
   

  	
  8.11

  	
  Payment
  on Subordinated Indebtedness

  	
  29

  
	
   

  	
  8.12

  	
  Misstatements
  and Misrepresentations

  	
  29

  
	
   

  	
  8.13

  	
  Other
  Events of Default

  	
  29

  
	
   

  	
  8.14

  	
  Cure
  Period, Notice to Cure

  	
  29

  
	
  9.

  	
  BANKS
  RIGHTS AND REMEDIES

  	
  30

  
	
   

  	
  9.1

  	
  Rights
  and Remedies

  	
  30

  
	
   

  	
  9.2

  	
  Remedies
  Cumulative

  	
  31

  
	
   

  	
  10.

  	
  TAXES
  AND EXPENSES

  	
  31

  
	
   

  	
  11.

  	
  WAIVERS; INDEMNIFICATION

  	
  31

  
	
   

  	
  11.1

  	
  Demand; Protest; etc

  	
  31

  
	
   

  	
  11.2

  	
  Intentionally
  Omitted

  	
  31

  
	
   

  	
  11.3

  	
  Jndeninification

  	
  31

  
	
  12.

  	
  NOTICES

  	
  32

  
	
  13.

  	
  CHOICE
  OF LAW AND VENUE; JURY TRIAL WAIVER

  	
  33

  
	
  14.

  	
  DESTRUCTION
  OF BOflOWERS DOCUMENTS

  	
  34

  
	
  15.

  	
  AGENCY
  AND GOVERNANCE PROVISIONS

  	
  34

  
	
   

  	
  15.1

  	
  Actions

  	
  34

  
	
   

  	
  15.2

  	
  Exculpation

  	
  34

  
	
   

  	
  15.3

  	
  Successors

  	
  35

  
	
   

  	
  15.4

  	
  Other
  Transactions by U.S. Bank

  	
  35

  
	
   

  	
  15.5

  	
  Independent
  Credit Decision

  	
  35

  
	
   

  	
  15.6

  	
  Copies

  	
  35

  
	
   

  	
  15.7

  	
  Payments
  to be Made to Agent

  	
  36

  
	
   

  	
  15.8

  	
  Reimbursement
  by Lenders

  	
  36

  
	
   

  	
  15.9

  	
  Collateral
  and Guarantees Held by Agent

  	
  36

  
	
   

  	
  15.10

  	
  Lenders’
  Commitments Independent

  	
  36

  
	
   

  	
  15.11

  	
  Borrower
  to deal with Agent

  	
  37

  
	
   

  	
  15.12

  	
  Loans
  to be Funded Through Agent

  	
  37

  
	
  16.

  	
  ASSIGNMENTS
  AND PARTICIPATIONS

  	
  38

  
	
   

  	
  16.1

  	
  Assignments

  	
  38

  
	
   

  	
  16.2

  	
  Participations

  	
  39

  
	
  17.

  	
  GENERAL
  PROVISIONS

  	
  39

  

 

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
  17.1

  	
  Effectiveness

  	
  39

  
	
   

  	
  17.2

  	
  Successors
  and Assigns

  	
  39

  
	
   

  	
  17.3

  	
  SectionHeadings

  	
  39

  
	
   

  	
  17.4

  	
  Interpretation

  	
  40

  
	
   

  	
  17.5

  	
  Severability
  of Provisions

  	
  40

  
	
   

  	
  17.6

  	
  Amendments
  in Writing

  	
  40

  
	
   

  	
  17.7

  	
  Counterparts;
  Telefacsimile Execution

  	
  40

  
	
   

  	
  17.8

  	
  Revival
  and Reinstatement of Obligations

  	
  40

  
	
   

  	
  17.9

  	
  Integration

  	
  40

  
	
   

  	
  17.10

  	
  Attomeys’
  Fees

  	
  40

  

 

 

AMENDED AND RESTATED LOAN AGREEMENT

 

THIS LOAN AGREEMENT (this “Agreement”), is entered into as of June 5,
2008, between U.S. BANK NATIONAL ASSOCIATION, a national banking association (“jj~
Bank”), with a place of business located at 633 W. Fifth Street, 30°’ Floor,
Los Angeles, California 90071 and EAST-WEST BANK, a California banking
corporation (“East-West Bank”), with its chief place of business located
at 135 N. Los Robles Ave., 2~ Floor, Pasadena, California 91101 (individually,
a “Bank” or a “Lender,” and collectively, “Banks” or “Lenders”),
U.S. BANK NATIONAL ASSOCIATION, a national banking association, as agent for
the Banks (“Agent”), and KENNEDY-WILSON, INC., a Delaware corporation (“Borrower’),
with its chief place of business located at 9601 Wilshire Boulevard, Suite 220,
Beverly Hills, California 90210. This Agreement amends and restates in its
entirety that certain Loan Agreement between Borrower and Banks dated June 13,
2002, as amended by that (i) Amendment Number One to Promissory Notes and
Loan Agreement dated December 30, 2002, (ii) First Amendment to Loan
Agreement dated March 30, 2004, (iii) Second Amendment to Loan
Agreement dated November 10, 2004, and (iv) Third Amendment to Loan
Agreement dated June 16, 2005.

 

The parties agree as follows:

 

1. DEFINITIONS AND CONSTRUCTION.

 

1.1                  Definitions.
As used in this Agreement, the following terms shall have the following
definitions:

 

“Account Debtor” means any Person who is or who may become
obligated under, with respect to, or on account of, an Account.

 

“Accounts” means all currently existing and hereafter arising
accounts (as that term is defined from time to time in the Code), contract
rights, and all other forms of obligations owing to Borrower, and any and all
credit insurance, guaranties, or security therefor, and specifically includes
all of Borrower’s rights to payments of every kind under all license agreements
under which Borrower is a licensor.

 

“Advances” has the meaning set forth in Section 2.1(a).

 

 

“Affiliate” means, as applied to any Person, any other Person
who directly or indirectly controls, is controlled by, is under common control
with or is a director or officer of such Person. For purposes of this
definition, “control” means the possession, directly or indirectly, of the
power to vote 10% or more of the securities having ordinary voting power for
the election of directors or the direct or indirect power to direct the
management and policies of a Person.

 

“Agent” has the meaning set forth in Section 15.1.

 

“Agreement” has the meaning set forth in the preamble hereto.

 

“Asset Access Agreement” means a landlord
waiver, mortgagee waiver, acknowledgment agreement of any Person in possession
of, having a Lien upon, or having rights or interests in any asset of Borrower,
in each case, in form and substance satisfactory to Agent.

 

“Authorized Person” means any officer or other employee of
Borrower listed on Schedule A-1, as amended from time to time. Borrower
shall furnish, from time to time, a resolution of its Board of Directors, in a
form acceptable to Lenders, confirming its initial appointment of, and any
change in, such Authorized Persons.

 

“Bank” and “Banks” have the meaning set forth in the
preamble to this Agreement.

 

“Bankruptcy Code” means the United States Bankruptcy Code (11
U.S.C. § 101, et seq.), as amended, and any successor statute.

 

“Bank Expenses” means, without limitation, all: reasonable costs
or expenses required to be paid by Borrower under any of the Loan Documents
that are paid or incurred by Banks or by Agent; fees, charges, taxes, and
insurance premiums paid or incurred by Banks or by Agent in connection with
Banks’ transactions with Borrower, including, fees or charges for photocopying,
notarization, couriers and messengers, telecommunication, public record
searches (including tax lien, litigation, and UCC searches and including
searches with any Governmental Agencies, filing, recording, publication,
appraisals, costs and expenses incurred by Banks or by Agent in the
disbursement of funds to Borrower (by wire transfer or otherwise); charges paid
or incurred by Banks or by Agent resulting from the dishonor of checks; costs
and expenses paid orincurred by Banks or by Agent to correct any default or
enforce any provision of the Loan Documents; costs and expenses paid or
incurred by Banks or by Agent in examining Borrower’s Books; costs and expenses
of third party claims or any other suit paid or incurred by Banks or by Agent
in enforcing or defending the Loan Documents or in connection with the
transactions contemplated by the Loan Documents or Banks’ relationship with
Borrower and its Affiliates or Subsidiaries, and Banks’ or Agent’s reasonable
attorneys’ fees and expenses incurred in advising, structuring, drafting,
reviewing, administering, amending, terminating, enforcing, defending, or
concerning the Loan Documents (including attorneys’ fees and expenses incurred
in connection with a “workout,” a “restructuring,” or an Insolvency Proceeding
concerning Borrower or any guarantor of the Obligations), irrespective of
whether suit is brought. All Bank Expenses charged by Banks shall be deemed
reasonable in the absence of compelling circumstances to the contrary.

 

“Benefit Plan” means a “defined benefit plan” (as defined in Section 3(35)
of ERISA) for 

 

2

 

which Borrower, any Subsidiary of Borrower, or any
ERISA Affiliate has been an “employer” (as defined in Section 3(5) of
ERISA) within the past six (6) years.

 

“Borrower” has the meaning set forth in the preamble to this
Agreement.

 

“Borrower’s Books” means all of Borrower’s books and records
including: ledgers; records indicating, summarizing, or evidencing Borrower’s
properties or assets or liabilities; all information relating to Borrower’s
business operations or financial condition; and all computer programs, disk,
tape, or other media files, printouts, runs, or other computer- prepared
information.

 

“Business Day” means any day that is not a
Saturday, Sunday, or other day on which national banks are authorized or
required to close in New York City or San Francisco, California, and if the
Business Day relates to a determination of the LIBOR Rate applicable to an
Advance under the credit facilities under this Agreement, it also means a day
on which dealings are carried on in the London interbank market.

 

“Change of Control” shall be deemed to have occurred at such
time as there is (a) any change in the Chief Executive Officer (currently
William McMorrow) of the Borrower, or (b) change of ownership (whether by
transfer of existing shares, issuance of new shares, or a combination, or
otherwise) of more than 50% in the aggregate of the common stock of the
Borrower.

 

“Closing Date” means the date all conditions precedent set forth
in Section 3.1 of this Agreement have been satisfied in Agent’s
sole determination.

 

“Code” means the California Uniform Commercial Code as it may be
amended from time to time.

 

“Collections” means all cash, checks, notes, instruments, and
other items of payment (including, insurance proceeds, proceeds of cash sales,
rental proceeds, and tax refunds).

 

“Commitment” means the agreement of each of the Lenders to
extend its Pro-Rata Share of the credit facilities called for under the terms
and conditions of this Agreement and, depending upon the context, all or
specified rights of such Lender in such credit facilities.

 

“Compliance Certificate” means a certificate substantially in
the form of Schedule 6.3 and delivered by the Chief Financial Officer of
Borrower to Agent.

 

“Daily Balance” means, with respect to each day during the term
of this Agreement, the amount of an Obligation owed at the end of such day.

 

“deems itself insecure” means that the Person deems itself
insecure in accordance with the provisions of Section 1208 of the Code.

 

“Default” means an event, condition, or default that, with the
giving of notice, the 

 

3

 

passage of time, or both, would be an Event of
Default, except and then solely to the extent provided in Section 8.14.

 

“Advance Request Form and Disbursement Letter” means an
instructional letter in the form of Schedule 1.1-1 executed and
delivered by Borrower to Agent for each Advance, the form and substance of
which shall be satisfactory to Agent.

 

“Dollars or $”  means dollars
of the United States of America.

 

“EBITDA” means the net income of Borrower (excluding
extraordinary items), for the applicable period, plus all interest expense,
income tax expense, depreciation and amortization (including amortization of
any goodwill or other intangibles) for the period.

 

“Effective Tangible Net Worth” means
stockholders’ equity, less Intangible Assets.

 

“Equipment” means all of Borrower’s present and hereafter
acquired machinery, office and other equipment, furniture, furnishings,
fixtures, vehicles (including motor vehicles and trailers), and tools, and
goods, wherever located, and all attachments, accessories, accessions,
replacements, substitutions, additions, and improvements to any of the
foregoing.

 

“ERISA” means the Employee Retirement Income Security Act of
1974, 29 U.S.C. § 1000, et seq., amendments thereto, successor
statutes, and regulations or guidance promulgated thereunder.

 

“ERISA Affiliate” means (a) any corporation subject to
ERISA whose employees are treated as employed by the same employer as the
employees of Borrower under IRC Section 414(b), (b) any trade or
business subject to ERISA whose employees are treated as employed by the same
employer as the employees of Borrower under IRC Section 4 14(c), (c) solely
for purposes of Section 302 of ERISA and Section 412 of the IRC, any
organization subject to ERISA that is a member of an affiliated service group
of which Borrower is a member under IRC Section 4 14(m), or (d) solely
for purposes of Section 302 of ERISA and Section 412 of the IRC, any
party subject to ERISA that is a party to an arrangement with Borrower and
whose employees are aggregated with the employees of Borrower under IRC Section 4
14(o).

 

“ERISA Event” means (a) a Reportable Event with respect to
any Benefit Plan or Multiemployer Plan, (b) the withdrawal of Borrower,
any of its Subsidiaries or ERISA Affiliates from a Benefit Plan during a plan
year in which it was a “substantial employer” (as defined in Section 4001
(a)(2) of ERISA), (c) the providing of notice of intent to terminate
a Benefit Plan in a distress termination (as described in Section 404 1(c) of
ERISA), (d) the institution by the PBGC of proceedings to terminate a
Benefit Plan or Multiemployer Plan, (e) any event or condition (i) that
provides a basis under Section 4042(a)(1), (2), or (3) of ERISA for
the termination of, or the appointment of a trustee to administer, any Benefit
Plan or Multiemployer Plan, or (ii) that may result in termination of a
Multiemployer Plan pursuant to Section 4041A of ERISA, (f) the
partial or complete withdrawal within the meaning of Sections 4203 and 4205 of
ERISA, of Borrower, any of its Subsidiaries or ERISA Affiliates from a
Multiemployer Plan, or (g) providing any security to any Plan under Section 40l(a)(29)
of the IRC by Borrower or its 

 

4

 

Subsidiaries or any of their ERISA Affiliates.

 

“Equity Infusion” shall mean and refer to Bank-funded investment
capital to be used by Borrower for investments and! or acquisitions.

 

“Event of Default” has the meaning set forth in Section 8.

 

“Facility A” means a credit facility in the maximum amount of
Twenty Five Million Dollars ($25,000,000), to be furnished to Borrower by Banks
under the terms of this Agreement for purposes of financing Borrower’s
acquisition of real property. In no event shall U.S. Bank be required to make
Advances totaling more than Twelve Million Five Hundred Thousand Dollars
($12,500,000) of such facility. In no event shall East-West Bank be required to
make Advances totaling more than Twelve Million Five Hundred Thousand Dollars
($12,500,0000) of such facility.

 

“Facility B” means a credit facility in the maximum amount of
Five Million Dollars ($5,000,000), to be furnished to Borrower by Banks under
the terms of this Agreement for purposes of providing working capital to
Borrower. In no event shall U.S. Bank be required to make Advances totaling
more than Two Million Five Hundred Thousand Dollars ($2,500,000) of such
facility. In no event shall East-West Bank be required to make Advances
totaling more than Two Million Five Hundred Thousand Dollars ($2,500,0000) of
such facility.

 

“FEIN” means Federal Employer Identification Number.

 

“GAAP” means generally accepted accounting principles as in
effect from time to time in the United States, consistently applied.

 

“General Intangibles” means all of Borrower’s present and future
general intangibles (as that term is defined from time to time in the Code),
payment intangibles and other personal property (including without limitation
contract rights, rights arising under common law, statutes, or regulations,
choses or things in action, goodwill, patents, trade names, trademarks, service
marks, copyrights, blueprints, drawings, purchase orders, customer lists,
monies due or recoverable from pension funds, rights to payment and other
rights under any royalty or licensing agreements, infringement claims,
software, computer programs, information contained on computer disks, tapes, or
other media, literature, reports, catalogs, deposit accounts, insurance premium
rebates, tax refunds, and tax refund claims), other than goods, Accounts, and
Negotiable Collateral as applicable.

 

“Governing Documents” means the certificate or articles of
incorporation, by-laws, operating agreement, partnership agreement, or other
organizational or governing documents of any Person.

 

“Governmental Authority” means any nation or government, any
state or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory, or administrative functions of or
pertaining to government.

 

5

 

“Indebtedness” means: (a) all obligations of Borrower for
borrowed money, (b) all obligations of Borrower evidenced by bonds, debentures,
notes, or other similar instruments and all reimbursement or other obligations
of Borrower in respect of letters of credit, bankers acceptances, interest rate
swaps, or other financial products, (e) all obligations of Borrower under
capital leases, (d) all obligations or liabilities of others secured by a
Lien on any property or asset of Borrower, irrespective of whether such
obligation or liability is assumed, and (e) any obligation of Borrower
guaranteeing or intended to guarantee (whether guaranteed, endorsed, co-made,
discounted, or sold with recourse to Borrower) any indebtedness, lease,
dividend, letter of credit, or other obligation of any other Person.

 

“Indenmified Liabilities” has the meaning set forth in Section 11.3.

 

“Indemnified Person” has the meaning set forth in Section 11.3.

 

“Insolvency Proceeding” means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code, Title 11, United
States Code, or under any other bankruptcy or insolvency law of any jurisdiction,
assignments for the benefit of creditors, formal or informal moratoria,
compositions, extensions generally with creditors, or proceedings seeking
reorganization, arrangement, or other similar relief.

 

“Intangible Assets” means, with respect to any Person, that
portion of the book value of all of such Person’s assets, net of amortization,
that would be treated as intangibles under GAAP, including, without limitation,
property management contracts, capitalized loan fees, and Affiliate or
stockholder loans.

 

“Investment Property” means all of Borrower’s presently existing
and hereafter acquired or arising investment property (as that term is defined
form time to time in the Code).

 

“IRC” means the Internal Revenue Code of 1986, as amended, and the regulations
thereunder.

 

“Lender” and “Lenders” have the meaning set forth in the preamble to this Agreement.

 

“LIBOR Notice” means the written notice from Borrower to Agent
indentifying the Advances that are to bear interest at the LIBOR Rate for the
Loan Period selected in the form set forth on Schedule 2.2 hereto, the
terms and conditions of which supplement and are made a part of this agreement.

 

“LIBOR Rate” means,
with respect to the Loan Period applicable to any Advance hereunder, the LIBOR
rate for such period quoted by Agent from Reuters Screen LIBOROI Page or
any successor thereto, adjusted for any reserve requirement and any subsequent
costs to Lenders arising from any change in government requirements. The LIBOR
Rate for the Loan Period for each such Advance shall be determined by Agent
prior to the first day of such Loan Period.

 

“LIBOR Rate Loan” has the meaning set forth in the Notes. No
more than five (5) 

 

6

 

LIBOR Rate Loans may be outstanding at any one time.

 

“Lien” means any interest in property securing an obligation owed to,
or a claim by, any Person other than the owner of the property, whether such
interest shall be based on the common law, statute, or contract, whether such
interest shall be recorded or perfected, and whether such interest shall be
contingent upon the occurrence of some future event or events or the existence
of some future circumstance or circumstances, including the Lien or security
interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement, adverse
claim or charge, conditional sale or trust receipt, or from a lease,
consignment, or bailment for security purposes.

 

“Loan Accounts” has the meaning set forth in Section 2.5.

 

“Loan Documents” means this Agreement, the Advance Request Form and
Disbursement Letter, any Note or Notes executed by Borrower and payable to
Banks, and any other agreement entered into, now or in the future, in
connection with this Agreement.

 

“Loan Period”
means the period commencing on the Advance date of the applicable LIBOR Rate
Loan and ending on the numerically corresponding day 1, 2, 3, 6, or 12 months thereafter
matching the interest rate term selected by the Borrower; provided, however, (a) if
any Loan Period would otherwise end on a day which is not a New York Banking
Day, then the Loan Period shall end on the next succeeding New York Banking Day
unless the next succeeding New York Banking Day falls in another calendar month,
in which case the Loan Period shall end on the immediately preceding New York
Banking Day; or (b) if any Loan Period begins on the last New York Banking
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of the Loan Period), then
the Loan Period shall end on the last New York Banking Day of the calendar
month at the end of such Loan Period.

 

“Loans” means the credit facilities to be extended by Lenders to
Borrower subject to the terms and conditions of this Agreement.

 

“Material Adverse Change” means (a) a material adverse
change in the business, prospects, operations, results of operations, assets,
liabilities or condition (financial or otherwise) of Borrower, or (b) the
material impairment of Borrower’s ability to perform its obligations under the
Loan Documents to which it is a party or of Banks to enforce the Obligations.

 

“Maturity Date” means July 1, 2011, unless extended in
writing by Banks in their sole discretion. The Maturity Date is the date on or
before which all obligations of Borrower under the credit facilities to be
furnished under this Agreement shall be paid in full, subject to the terms and
conditions of this Agreement.

 

“Maximum Balance Sheet Leverage” means total debt divided by
Effective Tangible Net Worth.

 

“Maximum Revolving Amount” means, in the case of Facility A,
Twenty Five Million 

 

7

 

Dollars ($25,000,000), and in the case of Facility
B, Five Million Dollars ($5,000,000).

 

“Minimum Rent Adjusted Fixed Charge Coverage Ratio” means, as of
the end of the most recently concluded fiscal quarter of Borrower, and/or as of
any other date specified in this Agreement, as applicable, (i) EBITDA for
that portion of the fiscal year of Borrower then concluded, minus cash taxes,
cash dividends, cash used to repurchase corporate stock, and the higher of
un-financed capital expenditures or maintenance capital expenditures plus
rental/lease expense, divided by (ii) interest expense plus current
portion of long term debt (“CPLTD”) secured by any property held by Borrower in
excess of three (3) years (excluding those properties listed in Schedule
1.1-2) plus rental lease expense. CPLTD shall exclude balloon payments due
on real estate indebtedness of Borrower and lump sum principal payments
required by Facility A. (Borrower shall include in its financial statements, or
a side letter thereto, provided to Banks hereunder, in addition to all other
information required under this Agreement, information sufficiently detailed to
enable Banks to verify the financial elements described in this paragraph.)

 

“Multiemployer Plan” means a “multiemployer plan” (as defined in
Section 4001(a)(3) of ERISA) to which Borrower, any of its
Subsidiaries, or any ERISA Affiliate has contributed, or was obligated to
contribute, within the past six (6) years.

 

“New York Banking Day” means any day (other
than a Saturday or Sunday) on which commercial banks are open for business in
New York, New York.

 

“Note” or “Notes” means the promissory note or notes to be
executed by Borrower in favor of Lenders to evidence the indebtedness incurred
pursuant to this Agreement.

 

“Obligstions” means all loans, Advances, debts, principal,
interest (including any interest that, but for the provisions of the Bankruptcy
Code, would have accrued), liabilities (including all amounts charged to
Borrower’s Loan Accounts pursuant hereto), obligations, fees, charges, costs,
or Bank Expenses (including any fees or expenses that, but for the provisions
of the Bankruptcy Code, would have accrued), lease payments, guaranties,
covenants, and duties owing by Borrower to Banks of any kind and description
(whether pursuant to or evidenced by the Loan Documents or pursuant to any
other agreement between Banks and Borrower, and irrespective of whether for the
payment of money), whether direct or indirect, absolute or contingent, due or
to become due, now existing or hereafter arising, and including any debt,
liability, or obligation owing from Borrower to others that Banks may have
obtained by assignment or otherwise, and further including all interest not
paid when due and all Bank Expenses that Borrower is required to pay or
reimburse by the Loan Documents, by law, or otherwise.

 

“Participant” means any Person to which Banks or either of them
have at any time sold a participation interest in their or either of their
rights under the Loan Documents.

 

“PBGC” means the Pension Benefit Guaranty Corporation as defined
in Title IV of ERISA, or any successor thereto.

 

“Permitted Liens” means (a) Liens held by Banks or either
of them, (b) Liens for unpaid 

 

8

 

taxes that either (i) are not yet due and
payable or (ii) are the subject of Permitted Protests, (c) Liens set
forth on Schedule P-1, (d) the interests of lessors under operating
leases and purchase money security interests so long as the Lien only attaches
to the asset purchased or acquired and only secures the purchase price of the
asset, (e) Liens arising by operation of law in favor of warehousemen,
landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred
in the ordinary course of business of Borrower and not in connection with the
borrowing of money, and which Liens either (i) are for sums not yet due
and payable, or (ii) are the subject of Permitted Protests, (f) Liens
arising from deposits made in connection with obtaining worker’s compensation
or other unemployment insurance, (g) Liens or deposits to secure
performance of bids, tenders, or leases (to the extent permitted under this
Agreement), incurred in the ordinary course of business of Borrower and not in
connection with the borrowing of money, (h) Liens arising by reason of
security for surety or appeal bonds in the ordinary course of business of
Borrower, and (i) Liens of or resulting from any judgment or award that
would not cause a Material Adverse Change and as to which the time for the
appeal or petition for rehearing of which has not yet expired, or in respect of
which Borrower is in good faith prosecuting an appeal or proceeding for a
review, and in respect of which a stay of execution pending such appeal or
proceeding for review has been secured.

 

“Permitted Protest”
means the right of Borrower to protest any Lien (other than any such Lien that
secures the Obligations), tax (other than payroll taxes or taxes that are the
subject of a United States federal tax Lien), or rental payment, provided that (a) a
reserve with respect to such obligation is established on the books of Borrower
in an amount that is reasonably satisfactory to Agent, (b) any such
protest is instituted and diligently prosecuted by Borrower in good faith, and (e) Agent
is satisfied that, while any such protest is pending, there will be no
impairment of the enforceability, validity, or priority of any of the Banks’
rights under or in connection with this Agreement.

 

“Person” means and
includes natural persons, corporations, limited liability companies, limited
partnerships, general partnerships, limited liability partnerships, joint
ventures, trusts, land trusts, business trusts, or other organizations,
irrespective of whether they are legal entities, and Governmental Authorities
and agencies and political subdivisions thereof means any employee benefit plan,
program, or arrangement maintained or contributed to by Borrower or with
respect to which it may incur liability.

 

“Prime Rate” means the rate of interest announced from time to
time by U.S. Bank National Association in New York, New York as its “prime
rate.” In the event the Prime Rate is changed from time to time hereafter, the
applicable rate of interest hereunder and under the Notes automatically and
immediately shall be increased or decreased by an amount equal to such change
in the Prime Rate.

 

“Prime Rate Loan” has the meaning given in the Notes.

 

“Pro-Rata Share” means each Lender’s percentage share of the
total credit to be extended pursuant to the Loan Documents. Initially, U.S.
Bank’s Pro-Rata Share is 50% and East-West Bank’s Pro-Rata Share is 50%.

 

9

 

“Reportable Event” means any of the events described in Section 4043(c) of
ERISA or the regulations thereunder other than a Reportable Event as to which
the provision of thirty (30) days’ notice to the PBGC is waived under
applicable regulations.

 

“Retiree Health Plan” means an “employee welfare benefit plan”
within the meaning of Section 3(1) of ERISA that provides benefits to
individuals after termination of their employment, other than as required by Section 601
of ERISA.

 

“Solvent” means, with
respect to any Person on a particular date, that on such date (a) at fair
valuations, all of the properties and assets of such Person are greater than
the sum of the debts, including contingent liabilities, of such Person, (b) the
present fair salable value of the properties and assets of such Person is not
less than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured, (c) such
Person is able to realize upon its properties and assets and pay its debts and
other liabilities, contingent obligations, and other commitments as they mature
in the normal course of business, (d) such Person does not intend to, and
does not believe that it will, incur debts beyond such Person’s ability to pay
as such debts mature, and (e) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person’s properties and assets would constitute unreasonably small capital
after giving due consideration to the prevailing practices in the industry in
which such Person is engaged. In computing the amount of contingent liabilities
at any time, it is intended that such liabilities will be computed at the
amount that, in light of all the facts and circumstances existing at such time,
represents the amount that reasonably can be expected to become an actual or
matured liability.

 

“Subsidiary” of a Person means a corporation, partnership,
limited liability company, or other entity in which that Person directly or
indirectly owns or controls the shares of stock or other ownership interests
having ordinary voting power to elect a majority of the board of directors (or
appoint other comparable managers) of such corporation, partnership, limited
liability company, or other entity.

 

“Voidable Transfer” has the meaning set forth in Section 17.8.

 

1.2          Accounting Terms. All
accounting terms not specifically defined herein shall be construed in
accordance with GAAP. When used herein, the term “financial statements” shall include
the notes and schedules thereto. Whenever the term “Borrower” is used in
respect of a financial covenant or a related definition, it shall be understood
to mean Borrower on a consolidated basis unless the context clearly requires
otherwise.

 

1.3          Code. Any terms used
in this Agreement that are defined in the Code shall be construed and defined
as set forth in the Code, as it is amended from time to time, unless otherwise
defined herein.

 

1.4          Construction. Unless
the context of this Agreement clearly requires otherwise, references to the
plural include the singular, references to the singular include the plural, the
term “including” is not limiting, and the term “or” has, except where otherwise

 

10

 

indicated, the inclusive meaning represented by the
phrase “and/or.” The words “hereof,” “herein,” “hereby,” “hereunder,” and
similar terms in this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement. An Event of Default shall “continue”
or be “continuing” until such Event of Default has been waived in writing by
Agent. Section, subsection, clause, schedule, and exhibit references are to
this Agreement unless otherwise specified. Any reference in this Agreement or
in the Loan Documents to this Agreement or any of the Loan Documents shall
include all alterations, amendments, changes, extensions, modifications,
renewals, replacements, substitutions, and supplements, thereto and thereof, as
applicable.

 

1.5                              Schedules
and Exhibits. All of the schedules and exhibits attached to

 

this Agreement shall be deemed incorporated herein by reference

 

2. LOAN AND TERMS OF PAYMENT.

 

2.1                               Revolving
Advances.

 

(a)           From the Closing Date to the Maturity Date (unless
extended in writing by Banks in their sole discretion), subject to the terms
and conditions of this Agreement, Banks agree to make advances (“Advances”) to
Borrower in an amount outstanding not to exceed at any one time (i) the
Maximum Revolving Amount of Facility A, and (ii) the Maximum Revolving
Amount of Facility B, determined separately for each such Facility A and B. No
Advance, or combination of Advances under Facility A for one purpose or
property, shall exceed Five Million Dollars ($5,000,000). Advances shall be made
by the Borrower’s delivery to the Agent of an Advance Request Form and
Disbursement Letter not later than 11:00 a.m. (Los Angeles time) on the
Business Day before the date on which the Borrower requests the Advance.

 

(b)          Amounts borrowed
pursuant to this Section 2.1 may be repaid and, subject to the
terms and conditions of this Agreement, reborrowed at any time during the term
of this Agreement.

 

(c)           No Advance shall be
made in an amount less than One Hundred Thousand Dollars ($100,000).

 

2.2                             Interest Rates,
Payments, and Calculations.

 

(a)           Facility A Interest
Rate. Except as provided in clause (c) below, Advances under Facility A
shall bear interest on the Daily Balance at a per annum rate equal to Borrower’s
choice of(A) the sum of 0.50% plus
the Prime Rate, or (B) the sum of(a) 3.00% and (b) the one (1),
two (2), three (3), six (6) or twelve (12) month LIBOR Rate. Borrower
shall identify in writing, from time to time, which of such interest rates
Borrower desires to apply with respect to all or any portion of the Facility A
outstanding balance by completing and submitting to Agent a LIBOR Notice.

 

(b)          Facility B Interest
Rate. Except as provided in clause (e) below, 

 

11

 

Advances under Facility B shall bear interest on the
Daily Balance at a per annum rate equal to Borrower’s choice of (A) the
Prime Rate, or (B) the sum of (a) 2.50%
and (b) the one (1), two (2), three (3), six (6) or twelve
(12) month LIBOR Rate. Borrower shall identify in writing, from time to time,
which of such interest rates Borrower desires to apply with respect to all or
any portion of the Facility B outstanding balance by completing and submitting
to Agent a LIBOR Notice.

 

(c)                              Default Rate.
Upon the occurrence and during the continuation of an Event of Default, all
Obligations shall bear interest on the Daily Balance at a per annum rate equal
to 5.00% above the Reference
Rate.

 

(d)                             Payments.

 

(i)                                 Interest
payable hereunder on each of Facility A and Facility B shall be due and
payable, in arrears, on the fifth (5th)
day of each calendar month during the term hereof Borrower hereby
authorizes Banks, at their option, without prior notice to Borrower, to charge
such interest, all Bank Expenses (as and when incurred), the fees and charges
provided for in Section 2.6 and elsewhere in this Agreement (as and
when accrued or incurred), and all other payments due under any Loan Document
to Borrower as an Advance under this Agreement, which amounts thereafter shall
accrue interest at the rate then applicable to Advances hereunder. Any interest
not paid when due shall be compounded and shall thereafter accrue interest at
the rate then applicable to Advances hereunder.

 

(ii)                              Advance Limits;
Principal Repayment. No Advance or combinations of Advances under
Facility A for one (1) purpose or property shall exceed the amount of Five
Million Dollars ($5,000,000) and shall be conditioned on and subject to a
repayment schedule (which includes the source and timing of such repayment)
mutually agreed upon by Borrower and Agent (the “Repayment Schedule”)
with respect to each Advance. Principal under the Facility A Note shall be
repaid on the earlier of:

 

(A)          The date required by
the applicable Repayment Schedule for each Advance;

 

(B)          Upon the closing of
any sale, refinance or Equity Infusion with respect to any asset purchased with
Facility A Advances in an amount equal to such Advances;

 

(C)          Twenty-four (24)
months after the date of each Advance made by Banks; or

 

(D)          The Maturity Date.

 

(iii)                           Without notice,
Borrower shall repay the entire principal balance of Facility B at least once
each calendar year and shall maintain such Facility B at a zero balance for at
least thirty (30) consecutive calendar days thereafter.

 

12

 

(iv) Prepayment. If a LIBOR Rate Loan is prepaid prior to the end
of the Loan Period for such loan, whether voluntarily or because prepayment is
required due to the Note maturing or due to acceleration of the Note upon
default or otherwise, the Borrower agrees to pay all of the Bank Costs,
expenses and Interest Differential (as determined by the Agent) incurred as a
result of such prepayment. The term “Interest Differential” shall mean
that sum equal to the greater of zero or the financial loss incurred by the
Banks resulting from prepayment, calculated as the difference between the
amount of interest the Banks would have earned (from like investments in the
money markets, as determined by Agent, as of the first day of the LIBOR Rate
Loan) had prepayment not occurred and the interest the Banks will actually earn
(from like investments in the money markets as of the date of prepayment) as a
result of the redeployment of funds from the prepayment. Because of the
short-term nature of this facility, the Borrower agrees that the Interest
Differential shall not be discounted to its present value. Any prepayment of a
LIBOR Rate Loan shall be in an amount equal to the remaining entire principal
balance of such Loan.

 

(e)                                LIBOR Rate
Unavailable or Unascertainable. If for any reason (i) deposits are not
available to the Lenders in the relevant market or, (ii) by reasons of
circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the LIBOR Rate, or (iii) it becomes unlawful or
impracticable to make or maintain Advances accruing interest at the LIBOR Rate,
or (iv) as a result of any change in law, the cost to any Lender of making
or maintaining Advances accruing at the LIBOR Rate is increased, or (v) at
any time that an Event of Default of exists, or (vi) an insufficient
number of days remain from the date the Advance is requested to be made or
continued until the Maturity Date to constitute a Loan Period, then in each
such ease, upon the Borrower’s receipt of notice thereof from the Agent, the
rate of interest thereafter applicable to outstanding Advances shall be, (x) with
respect to Facility A, the sum of 0.30% plus the Prime Rate, or (y) with
respect to Facility B, the Prime Rate.

 

(f)                             Computation.
All interest and fees chargeable under the Loan Documents shall be computed on
the basis of a three hundred sixty (360) day year for the actual number of days
elapsed.

 

(g)                          Intent to Limit
Charges to Maximum Lawful Rate. In no event shall the interest rate or rates
payable under this Agreement, plus any other amounts paid in connection
herewith, exceed the highest rate permissible under any law that a court of
competent jurisdiction shall, in a final determination, deem applicable.
Borrower and Banks, in executing and delivering this Agreement, intend legally
to agree upon the rate or rates of interest and manner of payment stated within
it; provided, however, that, anything contained herein to
the contrary notwithstanding, if said rate or rates of interest or manner of
payment exceeds the maximum allowable under applicable law, then, ipso facto as
of the date of this Agreement, Borrower is and shall be liable only for the
payment of such maximum as allowed by law, and all payment received from
Borrower in excess of such legal maximum, whenever received, shall be applied
to reduce the principal balance of the Obligations to the extent of such
excess.

 

2.3          Crediting Payments;
Application of Collections. The receipt of any payments by Banks from Borrower
shall be applied provisionally to reduce the Obligations 

 

13

 

outstanding under Section 2.1, but shall
not be considered a payment on account unless such payment item is a wire
transfer of immediately available federal funds and is made to Banks in
accordance with wiring instructions issued by Banks to Borrower or unless and
until such payment is honored when presented for payment. Should any payment to
Banks not be honored when presented for payment, then Borrower shall be deemed
not to have made such payment, and interest shall be recalculated accordingly.
Anything to the contrary contained herein notwithstanding, any payment shall be
deemed received by Banks only if it is received by Agent on a Business Day on
or before (i) 11:00 a.m. (Los Angeles time) for regular payments or
deposits and (ii) 9:30 a.m. California time for payments or deposits
covering overdrafts. If any payment is received by Agent on a non-Business Day
or after the time specified on a Business Day, it shall be deemed to have been
received by Agent as of the opening of business on the immediately following
Business Day.

 

2.4                               Designated
Account. The Agent is authorized to make the Advances under this Agreement
based upon faxed or other written instructions received from anyone purporting
to be an Authorized Person, or without instructions if pursuant to Section 2.2(d).
Borrower agrees to establish and maintain an account with the Agent for the
purpose of receiving the proceeds of the Advances requested by Borrower and
made by the Agent hereunder. Unless otherwise agreed by the Agent and Borrower,
any Advance requested by Borrower and made by Banks hereunder shall be credited
to Borrower’s account with Agent.

 

2.5                                 Maintenance of
Loan Accounts; Statements of Obligations. Banks shall maintain accounts on
their books in the name of Borrower (the “Loan Accounts”) on which
Borrower will be charged with all Advances made by Banks to Borrower or for
Borrower’s account, including, accrued interest, Bank Expenses, and any other payment
Obligations of Borrower. In accordance with Section 2.3, the Loan
Accounts will be credited with all payments received by Banks from Borrower or
for Borrower’s account. Banks shall render statements regarding the Loan
Accounts to Borrower, including principal, interest, and fees, and including an
itemization of all charges and expenses constituting Bank Expenses owing, and
such statements shall be conclusively presumed to be correct and accurate and
constitute an account stated between Borrower and Banks absent manifest error
and unless, within thirty (30) days after receipt thereof by Borrower, Borrower
shall deliver to Banks written objection thereto describing the error or errors
claimed to be contained in any such statements.

 

2.6                               Fees, Costs,
and Charges. Borrower shall pay to the Agent the following fees:

 

(a)          Annual
Fee. On the Closing Date, and, beginning July 1, 2009 and annually
thereafter on July 1 of each succeeding year during the term of this
Agreement, a fee equal to 0.50% of the Maximum Revolving Amount on each of
Facility A and Facility B.

 

(b)          Financial
Examination, and Documentation Fees. (i) Banks’ out of pocket expenses for
each auditor or other personnel, whether employed by or an independent
contractor to Banks or either of them, plus out-of-pocket expenses for each
financial analysis and examination (i.e., audits or otherwise) of Borrower and
its Subsidiaries or Affiliates in connection therewith.

 

14

 

(c)          Other
Costs and Charges. All Bank Expenses and other costs, fees, and charges of
every description payable by Borrower to Banks or either of them under this
Agreement.

 

3. CONDITIONS; TERM OF AGREEMENT.

 

3.1                               Conditions
Precedent to the Initial Advance. The obligation of Banks under this Agreement
is subject to the fulfillment, to the satisfaction of Banks and their counsel,
of each of the following conditions on or before July 1, 2008:

 

(a)                              Banks shall
have received each of the following documents, duly executed, and each such
document shall be in full force and effect:

 

(i)           this Agreement duly
executed by Borrower;

 

(ii)          the Advance Request Form and
Disbursement Letter;

 

(iii) any Notes required or provided by Banks for execution by
Borrower to document Facility A and/or Facility B; and

 

(iv) any other instruments required or provided by Banks for
execution by Borrower to document Facility A and/or Facility B.

 

(b)                             Banks shall
have received a certificate from an Authorized Person attesting to the
corporate authorization of Borrower authorizing the execution, delivery, and
performance of this Agreement and the other Loan Documents to which Borrower is
a party and authorizing specific individuals associated with and authorized by
Borrower to execute the same.

 

(c)                              Banks shall
have received copies of Borrower’s Governing Documents, as amended, modified,
or supplemented to the Closing Date, certified by an Authorized Person.

 

(d)                             Banks shall
have received a certificate of insurance, together with the endorsements
thereto, as are required by Section 6.8, the form and substance of
which shall be satisfactory to Banks and their counsel;

 

(e)                              Banks shall
have received satisfactory evidence that all tax returns required to be filed
by Borrower have been timely filed and all taxes upon Borrower or its
properties, assets, income, and franchises (including real property taxes and
payroll taxes) have been paid prior to delinquency, except such taxes that are
the subject of a Permitted Protest; such satisfactory evidence shall be
provided in the form of written certification by Borrower’s Chief Financial
Officer to the effect that the foregoing matters in this paragraph have been
fully satisfied, unless Banks in their discretion shall request further
evidence thereof

 

(f)                                  Borrower shall
have paid (i) the fees payable on the Closing Date 

 

15

 

and (ii) all expenses of Banks incurred in
connection with the transactions contemplated by this Agreement, including
without limitation asset searches, credit reports, and the fees and expenses of
its outside counsel, as of the Closing Date;

 

(g)          all other documents
and legal matters in connection with the transactions contemplated by this
Agreement shall have been delivered, executed, or recorded and shall be in form
and substance satisfactory to Banks and their counsel;

 

(h)          Banks shall have
given, in their sole discretion, final credit approval of the credit facilities
set forth in this Agreement;

 

(i)            Banks shall have
been satisfied, in their sole discretion, with the results of a review of
Borrower’s most recent interim financial statement;

 

(i)            No adverse changes
in Borrower’s most recent interim financial statement, or in Borrower’s
profits, property, business prospects, or financial condition, shall have
occurred since the Banks’ review of Borrower’s most recent financial statement
for the period ending March 31, 2008;

 

(k)           Banks shall have
completed and been satisfied, in Banks’ sole discretion, with Borrower’s trade,
credit, and background cheeks, conducted by or for Banks, utilizing resources
and data bases selected by Banks;

 

(1)           Banks shall have
received the written opinion of counsel for Borrower, in form and substance
satisfactory to Banks; and

 

3.2                             Conditions
Precedent to all Advances. The following shall be conditions precedent to all
Advances hereunder:

 

(a)           the representations
and warranties contained in this Agreement and the other Loan Documents shall
be true and correct in all respects on and as of the date of each such Advance,
as though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date);

 

(b)          no Default or Event
of Default shall have occurred and be continuing on the date of such Advance,
nor shall either result from the making thereof;

 

(e)          no
injunction, writ, restraining order, or other order of any nature prohibiting,
directly or indirectly, the extending of such credit shall have been issued and
remain in force by any governmental authority against Borrower, Banks, or any
of their Affiliates;

 

(d)          no Change of Control
shall have occurred after the date of this Agreement; and

 

(e)          With
respect to Advances under Facility A, Borrower shall have furnished to Banks,
as and when required, such documentation as may be specified by Banks, by 

 

16

 

notice given to Borrower, to be furnished in
connection with Advances, including without limitation the items set forth in Schedule
3.2.

 

3.3          Intentionally
Omitted.]

 

3.4          Term. This Agreement
shall become effective upon the execution and delivery hereof by Borrower and
Banks and shall continue in full force and effect for a term ending on the
Maturity Date, unless sooner terminated or extended in writing pursuant to the
terms hereof. The foregoing notwithstanding, Banks shall have the right to
terminate their obligations under this Agreement immediately and without notice
upon the occurrence and during the continuation of an Event of Default.

 

3.5          Early Termination by
Borrower. Borrower has the option, at any time, upon thirty (30) days’ prior
written notice to Banks, to terminate this Agreement by paying to Banks, in
cash, the Obligations in full.

 

4.                                  RIGHT OF
INSPECTION.

 

Banks (through any of their respective officers, employees, or agents)
shall have the right, at any time and from time to time, during of the term of
the transactions contemplated by this Agreement and/or at any time there is any
balance owed to Banks under or in connection with such transactions, upon not
less than 24 hours’ advance written notice, to inspect Borrower’s Books and to
check, test, and evaluate Borrower’s assets in order to verify Borrower’s
financial condition or the amount, quality, value, condition of, or any other
matter relating to, Borrower’s assets of every description.

 

5. REPRESENTATIONS AND WARRANTIES.

 

In
order to induce Banks to enter into this Agreement, Borrower makes the
following representations and warranties which shall be true, correct, and
complete in all respects as of the date hereof, and as of the Closing Date, and
as of the date of the making of each Advance, as though made on and as of such
date (except to the extent that such representations and warranties relate
solely to an earlier date) and such representations and warranties shall survive
the execution and delivery of this Agreement:

 

5.1          No Encumbrances.
Borrower has good and indefeasible title to or leasehold interest in, as the
case may be, its assets, free and clear of Liens except for Permitted Liens.

 

5.2          Equipment. All of the
Equipment is used or held for use in Borrower’s business and is fit for such
purposes.

 

17

 

5.3                               Intentionally
Omitted.

 

5.4                               Schedule of
Indebtedness. The Schedule of Indebtedness attached hereto as Schedule 5.4
contains a true, correct, and complete listing of Borrower’s unsecured
indebtedness and guarantees of unsecured indebtedness, including all secured
indebtedness and all guaranties of secured indebtedness for which the amount of
the debt exceeds the fair market value of the security property (i.e.,
partially secured indebtedness and guarantees of partially secured
indebtedness).

 

5.5                               Location of
Chief Executive Office; FEIN. The chief executive office of Borrower is located
at the address indicated in the preamble to this Agreement and Borrower’s FEIN
is 95-4364537.

 

5.6                               Due
Organization and Qualification; Subsidiaries.

 

(a)           Borrower is duly
organized and existing and in good standing under the laws of Delaware and is
qualified and licensed to do business in, and in good standing in, California
and all other states where such qualification and licensing is required andlor
where the failure to be so qualified or licensed reasonably could be expected
to cause a Material Adverse Change.

 

(b)          Set forth on Schedule
5.6, is a complete and accurate list of Borrower’s direct and indirect
Subsidiaries, showing: (i) the jurisdiction of their incorporation or
formation; (ii) the number of shares of each class of common and preferred
stock authorized for each of such Subsidiaries; and (iii) the number and
the percentage of the outstanding shares of each such class owned directly or
indirectly by Borrower. All of the outstanding capital stock or other capital
ownership interest of each such Subsidiary has been validly issued and is fully
paid and non-assessable.

 

(c)           Except as set forth
on Schedule 5.6, no capital stock (or any securities, instruments, warrants,
options, purchase rights, conversion or exchange rights, calls, commitments or
claims of any character convertible into or exercisable for capital stock) of
any direct or indirect Subsidiary of Borrower is subject to the issuance of any
security, instrument, warrant, option, purchase right, conversion or exchange
right, call, commitment or claim of any right, title, or interest therein or
thereto.

 

5.7                               Due
Authorization; No Conflict.

 

(a)           The execution,
delivery, and performance by Borrower of this Agreement and the Loan Documents
to which it is a party have been duly authorized by all necessary corporate
action.

 

(b)          The execution,
delivery, and performance by Borrower of this Agreement and the Loan Doeun1ents
to which it is a party do not and will not (i) violate any provision of
federal, state, or local law or regulation (including Regulations T, U, and X
of the Federal Reserve Board) applicable to Borrower, the Governing Documents
of Borrower, or any 

 

18

 

order, judgment, or decree of any court or other
Governmental Authority binding on Borrower, (ii) conflict with, result in
a breach of; or constitute (with due notice or lapse of time or both) a default
under any material contractual obligation or material lease of Borrower, (iii) result
in or require the creation or imposition of any Lien of any nature whatsoever
upon any properties or assets of Borrower, other than Permitted Liens, or (iv) require
any approval of stockholders or any approval or consent of any Person under any
material contractual obligation of Borrower.

 

(e)           The execution,
delivery, and performance by Borrower of this Agreement and the Loan Documents
to which Borrower is a party do not and will not require any registration with,
consent, or approval of, or notice to, or other action with or by, any federal,
state, foreign, or other Governmental Authority or other Person.

 

(d)          This Agreement and
the Loan Documents to which Borrower is a party, and all other documents
contemplated hereby and thereby, when executed and delivered by Borrower will
be the legally valid and binding obligations of Borrower, enforceable against
Borrower in accordance with their respective terms, except as enforcement may
be limited by equitable principles or by bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or limiting creditors’
rights generally.

 

5.8                               Litigation.
There are no actions or proceedings pending by or against Borrower or its
directors, officers, or senior executives before any court or administrative
agency and Borrower does not have knowledge or belief of any pending,
threatened, or imminent litigation, governmental investigations, or claims,
complaints, actions, or prosecutions involving Borrower, any of its partners or
any guarantor of the Obligations, except for: (a) ongoing collection
matters in which Borrower is the plaintiff; (b) matters disclosed on Schedule
5.8 and (c) matters arising after the date hereof that, if decided
adversely to Borrower, would not cause a Material Adverse Change.

 

5.9                               No Material
Adverse Change. All financial statements relating to Borrower that have been
delivered by Borrower to Banks have been prepared in accordance with GAAP
(except, in the case of unaudited financial statements, for the lack of
footnotes and being subject to year-end audit adjustments) and fairly present
Borrower’s financial condition as of the date thereof and Borrower’s results of
operations for the period then ended. There has not been a Material Adverse
Change with respect to Borrower since the date of the latest financial
statements submitted to Banks on or before the Closing Date.

 

5.10                         Solvency.
Borrower is Solvent. No transfer of property is being made by Borrower and no
obligation is being incurred by Borrower in connection with the transactions contemplated
by this Agreement or the other Loan Documents with the intent to hinder, delay,
or defraud either present or future creditors of Borrower.

 

5.11                         Employee
Benefits. None of Borrower, any of its Subsidiaries, or any of their ERISA
Affiliates maintains or contributes to any Benefit Plan, other than those
listed on Schedule 5.11. Borrower, each of its Subsidiaries and
each ERISA Affiliate have satisfied the minimum funding standards of ERISA and
the IRC with respect to each Benefit Plan to which it is obligated to
contribute. No ERISA Event has occurred nor has any other event occurred that 

 

19

 

may result in an ERISA Event that reasonably could
be expected to result in a Material Adverse Change. None of Borrower or its
Subsidiaries, any ERISA Affiliate, or any fiduciary of any Plan is subject to
any direct or indirect liability with respect to any Plan under any applicable
law, treaty, rule, regulation, or agreement. None of Borrower or its
Subsidiaries or any ERISA Affiliate is required to provide security to any Plan
under Section 401(a)(29) of the IRC.

 

5.12                         Maximum Balance
Sheet Leverage. Borrower’s Maximum Balance Sheet Leverage was 0.97:1 as of December 31,2007.

 

5.13                         Minimum Rent
Adjusted Fixed Charge Coverage Ratio. Borrower’s Minimum Rent Adjusted Fixed
Charge Coverage Ratio was 2.74:1 as of December 31, 2007.

 

6. AFFIRMATIVE COVENANTS.

 

Borrower covenants and agrees that, so long as any credit hereunder shall
be available and until full and final payment of the Obligations, Borrower
shall do all of the following:

 

6.1                               Accounting
System. Maintain a standard and modem system of accounting that enables
Borrower to produce financial statements in accordance with GAAP, and maintain
records pertaining to the assets of Borrower and its Subsidiaries or Affiliates
that contain information as from time to time may be requested by Banks.
Borrower also shall keep a modern asset reporting system that shows all purchases,
additions, sales, and dispositions of Borrower’s assets.

 

6.2                               Financial
Covenants. Borrower shall at all times maintain the following financial
covenants:

 

(a)           Minimum Rent
Adjusted Fixed Charge Coverage Ratio. A Minimum Rent Adjusted Fixed Charge
Coverage Ratio of not less than 1.75:1, measured on a four (4) quarter
rolling average basis;

 

(b)          Minimum Liquidity.
The Borrower shall maintain cash, cash equivalents and marketable securities in
the aggregate amount of at least Seven Million Five Hundred Thousand dollars ($7,500,000), tested quarterly;

 

(c)           Maximum Balance
Sheet Leverage. Maximum Balance Sheet leverage not greater than 2.50:1,
measured at the end of each calendar quarter; and

 

(d)          Minimum Net Worth. As
determined in accordance with GAAP, Net Worth equal to or greater than Thirty
Million Dollars ($30,000,000), measured at the end of each calendar quarter.

 

6.3                                                                         Financial
Statements, Reports, Certificates. Deliver or cause to be delivered, to Banks: (a) as
soon as available, but in any event within ninety (90) days after the end of
each fiscal year of Borrower, consolidated and separate financial statements
including a balance sheet, income statement, and statement of cash flow of
Borrower and its Subsidiaries or 

 

20

 

Affiliates during such period, prepared and audited
by a certified public accounting firm whose identity is approved in advance by
Banks; (b) as soon as available, but in any event within ninety (90) days
after the end of each fiscal quarter of Borrower, consolidated and separate
financial statements of Borrower and its Subsidiaries or Affiliates, prepared
by Borrower or by a certified public accountant firm whose identity is approved
in advance by Banks; (c) as soon as available, but in any event within
thirty (30) days prior to the commencement of each fiscal year of Borrower, an
annual financial projection for such succeeding fiscal year, including a
balance sheet, income statement, and statement of cash flow of Borrower and its
Subsidiaries, or Affiliates during such period, prepared by Borrower or by a
certified public accounting firm whose identity is approved in advance by
Banks; (d) as soon as available, but in any event within fifteen (15) days
after filing with the Securities Exchange Commission, copies of all filings
made by Borrower under the Securities Act of 1934 and the regulations and rules promulgated
thereunder, in electronic and paper form. Each of the items in subsections (a) through
(d), inclusive, above shall be accompanied by a certificate, without any
qualifications, by such accountants or by Borrower (as applicable to the each
document) to have been prepared in accordance with GAAP, together with a
certificate of such accountants addressed to Banks stating that such accountants
do not have knowledge of the existence of any Default or Event of Default. Such
audited financial statements shall include a balance sheet, profit and loss
statement, and statement of cash flow and, if prepared, such accountants’
letter to management. In addition to the financial statements referred to
above, Borrower agrees to deliver to Banks, within the specified time periods,
financial statements prepared on a consolidated basis so as to present Borrower
and each of Borrower’s Subsidiaries or Affiliates on a consolidated basis, and
each such related entity separately.

 

Each
quarter, together with the financial statements provided pursuant to this Section 6.3,
Borrower shall deliver to Banks a Compliance Certificate signed by its chief
financial officer to the effect that: (i) all financial statements
delivered or caused to be delivered to Banks hereunder have been prepared in
accordance with GAAP (except, in the case of unaudited financial statements,
for the lack of footnotes and being subject to year-end audit adjustments) and
fairly present the financial condition of Borrower, (ii) the
representations and warranties of Borrower contained in this Agreement and the
other Loan Documents are true and correct in all material respects on and as of
the date of such certificate, as though made on and as of such date (except to
the extent that such representations and warranties relate solely to an earlier
date), (iii) Borrower is in compliance at the end of such period with the
applicable financial covenants contained in Section 7.19 (and
demonstrating such compliance in reasonable detail), and (iv) on the date
of delivery of such certificate to Banks there does not exist any condition or
event that constitutes a Default or Event of Default (or, in the case of
clauses (i), (ii), or (iii), to the extent of any non-compliance, describing
such non-compliance as to which he or she may have knowledge and what action
Borrower has taken, is taking, or proposes to take with respect thereto).

 

Borrower shall have issued written instructions to its independent
certified public accountants authorizing them to communicate with Banks and to
release to Banks whatever financial information concerning Borrower that Banks
may request. Borrower hereby irrevocably authorizes and directs all auditors,
accountants, or other third parties to deliver to Banks, at Borrower’s expense,
copies of Borrower’s financial statements, papers related thereto, and other 

 

21

 

accounting records of any nature in their
possession, and to disclose to Banks any information they may at any time have
regarding Borrower’s business affairs and financial conditions.

 

6.4                               Chairman; CEO.
William McMorrow shall at all times remain the Chairman of the Board and Chief
Executive Officer of Borrower.

 

6.5                               Title to
Equipment. Upon Banks’ request, Borrower immediately shall deliver to Banks,
properly endorsed, any and all evidences of ownership of, certificates of
title, or applications for title to any items of Equipment.

 

6.6                               Maintenance of
Equipment. Maintain the Equipment in good operating condition and repair
(ordinary wear and tear excepted), and make all necessary replacements thereto
so that the value and operating efficiency thereof shall at all times be
maintained and preserved. Other than those items of Equipment that constitute
fixtures on the Closing Date, Borrower shall not permit any item of Equipment
to become a fixture to real estate or an accession to other property, and such
Equipment shall at all times remain personal property.

 

6.7                               Taxes. Cause
all assessments and taxes, whether real, personal, or otherwise, due or payable
by, or imposed, levied, or assessed against, Borrower or any of its property to
be paid in full, before delinquency or before the expiration of any extension
period, except to the extent that the validity of such assessment or tax shall
be the subject of a Permitted Protest. Borrower shall make due and timely
payment or deposit of all such federal, state, and local taxes, assessments, or
contributions required of it by law, and will execute and deliver to Banks, on
demand, appropriate certificates attesting to the payment thereof or deposit
with respect thereto. Borrower will make timely payment or deposit of all tax
payments and withholding taxes required of it by applicable laws, including
those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state,
and federal income taxes, and will, upon request, furnish Banks with proof
satisfactory to Banks indicating that Borrower has made such payments or
deposits.

 

6.8                               Insurance.

 

(a)           (i) At its
expense, keep the assets of Borrower and its Subsidiaries or Affiliates insured
against loss or damage by fire, theft, explosion, sprinklers, and all other
hazards and risks, and in such amounts, as are ordinarily insured against by
other owners in similar businesses. (ii) Borrower also shall maintain
business interruption, and product liability insurance relating to Borrower’s
ownership and use of such assets, as well as insurance against larceny,
embezzlement, and criminal misappropriation. (iii) Borrower shall also
maintain commercial general liability insurance with minimum limits of Ten
Million Dollars ($10,000,000) per occurrence and in the aggregate.

 

(b)          All such policies of
insurance shall be in such form, with such companies, with such deductibles or
retention amounts, and such endorsements, and in such amounts, as may be
reasonably satisfactory to Banks. All insurance required herein shall be
written by companies which are acceptable to Banks. Borrower shall deliver to
Banks certified copies of such policies of insurance, and all renewals and
replacements thereof, and evidence of 

 

22

 

the payment of all premiums therefore.

 

6.9                               No Setoffs or
Counterclaims. Make payments hereunder and under the other Loan Documents by or
on behalf of Borrower without setoff or counterclaim and free and clear of, and
without deduction or withholding for or on account of, any federal, state, or local
taxes.

 

6.10                         Dispositions at
Fair Market Consideration. Sell or otherwise dispose of property of the
Borrower only for fair market consideration.

 

6.11                         Compliance with
Laws. Substantially comply with the requirements of all applicable laws, rules,
regulations, and orders of any governmental authority, including the Fair Labor
Standards Act and the Americans With Disabilities Act, other than laws, rules,
regulations, and orders the non-compliance with which, individually or in the
aggregate, would not have and could not reasonably be expected to cause a
Material Adverse Change.

 

6.12                         Employee
Benefits.

 

(a)          Deliver
to Banks: (i) promptly, and in any event within ten (10) Business
Days after Borrower or any of its Subsidiaries knows or has reason to know that
an ERISA Event has occurred that reasonably could be expected to result in a
Material Adverse Change, a written statement of the chief financial officer of
Borrower describing such ERISA Event and any action that is being taking with
respect thereto by Borrower, any such Subsidiary or ERJSA Affiliate, and any
action taken or threatened by the IRS, Department of Labor, or PBGC. Borrower
or such Subsidiary, as applicable, shall be deemed to know all facts known by
the administrator of any Benefit Plan of which it is the plan sponsor, (ii) promptly,
and in any event within three (3) Business Days after the filing thereof
with the IRS, a copy of each funding waiver request filed with respect to any
Benefit Plan and all communications received by Borrower, any of its
Subsidiaries or, to the knowledge of Borrower, any ERISA Affiliate with respect
to such request, and (iii) promptly, and in any event within three (3) Business
Days after receipt by Borrower, any of its Subsidiaries or, to the knowledge of
Borrower, any ERISA Affiliate, of the PBGC’s intention to terminate a Benefit
Plan or to have a trustee appointed to administer a Benefit Plan, copies of
each such notice.

 

(b)           Cause to be delivered to Banks, upon
Banks’ or either of their request, each of the following: (i) a copy of
each Plan (or, where any such plan is not in writing, complete description
thereof) (and if applicable, related trust agreements or other funding
instruments) and all amendments thereto, all written interpretations thereof
and written descriptions thereof that have been distributed to employees or
former employees of Borrower or its Subsidiaries; (ii) the most recent
determination letter issued by the IRS with respect to each Benefit Plan; (iii) for
the three (3) most recent plan years, annual reports on Form 5500 Series required to be filed
with any governmental agency for each Benefit Plan; (iv) all actuarial
reports prepared for the last three (3) plan years for each Benefit Plan; (v) a
listing of all Multiemployer Plans, with the aggregate amount of the most
recent annual contributions required to be made by Borrower or any ERISA
Affiliate to each such plan and copies of the collective bargaining agreements
requiring such contributions; (vi) any information that has been provided to

 

23

 

Borrower or any ERISA Affiliate regarding
withdrawal liability under any Multiemployer Plan; and (vii) the aggregate
amount of the most recent annual payments made to former employees of Borrower
or its Subsidiaries under any Retiree Health Plan.

 

6.13                         Compliance with
Leases. Pay when due all rents and other amounts payable under any leases to
which Borrower is a party or by which Borrower’s properties and assets are
bound, unless such payments are the subject of a Permitted Protest. To the
extent that Borrower fails timely to make payment of such rents and other
amounts payable when due under its leases, Banks shall be entitled, in their
discretion, to reserve an amount equal to such unpaid amounts against Facility
A or Facility B.

 

7. NEGATIVE COVENANTS.

 

Borrower covenants and agrees that, so long as any credit hereunder
shall be available and until full and final payment of the Obligations,
Borrower will not do any of the following:

 

7.1                               Indebtedness.
Create, incur, assume, permit, guarantee, or otherwise become or remain,
directly or indirectly, liable with respect to any Indebtedness, except:

 

(a) Indebtedness evidenced by this
Agreement;

 

(b) Indebtedness set forth on Schedule
5.4

 

(c)          Indebtedness
fully secured by Permitted Liens or by Liens described in Section 7.2(u)

 

(d)          a
guarantee obligation in connection with an exchange permitted under Section 1031
of the IRC;

 

(e)          refinancings,
renewals, or extensions of Indebtedness permitted under clauses (b), (e), (f),
or (g) of this Section 7.1 (and continuance or renewal of any
Permitted Liens associated therewith) so long as: (i) the terms and
conditions of such refinancings, renewals, or extensions do not materially
impair the prospects of repayment of the Obligations by Borrower, (ii) to
the extent that the Indebtedness that is refinanced was subordinated in right
of payment to the Obligations, then the subordination terms and conditions of
the refinancing Indebtedness must be at least as favorable to Banks as those
applicable to the refinanced Indebtedness, and (iii) if and to the extent
any such refinancings, renewals or extensions are for assets acquired, sold,
refinanced, or funded by an Equity Infusion, the original amount of the Advance
corresponding to such asset shall be repaid to Lender concurrently with such
refinancing, extension or renewal;

 

(1)          non-recourse
debt incurred by Borrower as a portion of Borrower’s purchase price of (i) real
property, or (ii) pools of notes fully secured by liens on real property;
and(g) debt which is recourse to or guaranteed by Borrower, where such
debt is incurred or assumed by Borrower or Borrower’s Subsidiaries or
Affiliates and fully secured by (i) real property, or (ii) pools of
notes fully secured by liens on real property;

 

(g)          financing
or refinancing of any real property or pool of notes now 

 

24

 

or hereafter owned by Borrower, and fully secured
thereby;

 

(h)         additional senior indebtedness up to One Million Dollars
($1,000,000), so long as all such additional senior indebtedness is for a term
which extends beyond the Maturity Date, provided, that all indebtedness
permitted by this paragraph shall satisfy all other applicable requirements of
this Agreement;

 

(i)          a guaranty of any indebtedness of any Person or Persons up
to One Million Dollars ($1,000,000) in the aggregate, provided, that all
guaranties permitted by this paragraph shall satisfy all other applicable
requirements of this Agreement; and

 

All indebtedness described in subsections (a) through (i) above
must also satisfy all other applicable requirements of this Agreement.

 

7.2          Liens. Create, incur,
or permit to exist, directly or indirectly, any Lien on or with respect to any
of its property or assets, of any kind, whether now owned or hereafter
acquired, or any income or profits therefrom, except for (i) Permitted
Liens (including Liens that are replacements of Permitted Liens to the extent
that the original Indebtedness is refinanced under Section 7.1(e) and
so long as the replacement Liens only encumber those assets or property that
secured the original Indebtedness), or (ii) Liens given to vendors or
lenders to enable Borrower to acquire real property or pools of notes secured
by real property after the date of this Agreement and fully secured exclusively
by the property so acquired.

 

7.3          Restrictions on
Fundamental Changes. Enter into any merger, consolidation, reorganization, or
recapitalization, or reclassify its capital stock, or liquidate, wind up, or
dissolve itself (or suffer any such event), or reincorporate in a different
jurisdiction or (except as otherwise provided in Section 7.4)
convey, sell, assign, lease, transfer, or otherwise dispose of, in a single
transaction or a series of transactions, all or any substantial part of its
property or assets.

 

7.4          Disposal of Assets.
Sell, lease, assign, transfer, or otherwise dispose of any of Borrower’s
properties or assets other than sales in the ordinary course of Borrower’s
business as currently conducted.

 

7.5          Change Name. Change
Borrower’s name, FEIN, corporate structure (within the meaning of the Code), or
identity.

 

7.6          Guaranty. Guaranty or
otherwise become in any way liable with respect to the obligations of any third
Person except (a) by endorsement of instruments or items of payment for
deposit to the account of Borrower or which are transmitted or turned over to
Banks, or (b) as permitted by Section 7.1.

 

7.7          Nature of Business.
Make any change in the principal nature of Borrower’s business.

 

7.8          Prepayments and
Amendments.

 

25

 

(a)           Except in connection
with (i) a refinancing permitted by Section 7.1(e), or (ii) a
purchase (for investment or sale) of pools of notes secured by real property,
prepay, redeem, retire, defease, purchase, or otherwise acquire any
Indebtedness owing to any third Person, other than the Obligations in
accordance with this Agreement, and

 

(b)          Directly or
indirectly, amend, modify, alter, increase, or change, materially and
adversely, any of the terms or conditions of any agreement, instrument,
document, indenture, or other writing evidencing or concerning Indebtedness
permitted under Sections 7.1(b), (c), (d\ or (e).

 

7.9                               Change of
Control. Cause, permit, or suffer, directly or indirectly, any Change of
Control.

 

7.10                         Intentionally
Omitted.

 

7.11                         Accounting
Methods. Modify or change its method of accounting or enter into, modify, or
terminate any agreement currently existing, or at any time hereafter entered
into with any third party accounting firm or service bureau for the preparation
or storage of Borrower’s accounting records without said accounting firm or
service bureau agreeing to provide Banks information regarding the assets of
Borrower and its Subsidiaries or Affiliates or Borrower’s financial condition.
Borrower waives the right to assert a confidential relationship, if any, it may
have with any accounting firm or service bureau in connection with any
information requested by Banks pursuant to or in accordance with this
Agreement, and agrees that Banks may contact directly any such accounting firm
or service bureau in order to obtain such information.

 

7.12                         Investments.
Directly or indirectly make, acquire, or incur any liabilities (including
contingent obligations), other than those under this Agreement, for or in
connection with (a) the acquisition of the securities (whether debt or
equity) of, or other interests in, a Person, (b) loans, advances, capital
contributions, or transfers of property to a Person; provided, that such
loans, advances and capital contributions would be permitted so long as
immediately before and after each such loan, advance, or capital contribution
no Event of Default exists or results, or (c) the acquisition of all or
substantially all of the properties or assets of a Person.

 

7.13                         Transactions
with Affiliates. Directly or indirectly enter into or permit to exist any
material transaction with any Affiliate of Borrower except for transactions
that are in the ordinary course of Borrower’s business, upon fair and
reasonable terms, that are fully disclosed to Banks, and that are no less
favorable to Borrower than would be obtained in an arm’s length transaction
with a non-Affiliate.

 

7.14                         Suspension.
Suspend or go out of a substantial portion of its business.

 

7.15                         Intentionally
Omitted.

 

26

 

7.16                         Use of
Proceeds. Use the proceeds of the Advances made hereunder for any purpose other
than (i) on the Closing Date, to pay sums due the Banks for transactional
costs and expenses under or in connection with this Agreement, and (ii) thereafter,
consistent with the terms and conditions hereof, in the case of Facility A, to
finance Borrower’s acquisition of real property or pools of notes secured by
real property, and in the case of Facility B, to provide working capital for
Borrower.

 

7.17                         Change in
Location of Chief Executive Office Equipment with Bailees. Relocate its chief
executive office to a new location without providing thirty (30) days’ prior
written notification thereof to Banks and so long as, at the time of such
written notification, Borrower also provides to Banks an Asset Access Agreement
with respect to such new location. The Equipment shall not at any time now or
hereafter be stored with a bailee, warehouseman, or similar party without Banks’
prior written consent.

 

7.18 Intentionally Omitted.

 

7.19 Intentionally Omitted.

 

7.20        Downstreaming of
Funds. Borrower shall not (i) pay, apply, transfer, disburse, credit, or
otherwise permit any portion of Facility A or Facility B nor (ii) make or
extend any loan or guaranty, to or for the benefit of Kennedy-Wilson Japan and
subsidiaries (including without limitation Kennedy-Wilson Japan Co., Ltd. and
Kennedy-Wilson Japan K.K.).

 

7.21        Excessive Acquisitions.
Borrower shall make no corporate acquisitions without the prior written consent
of Banks; provided, that any such acquisitions approved by Banks shall satisfy
all other applicable requirements of this Agreement.

 

7.22        Intentionally Omitted.

 

7.23        Dividends. Borrower
shall not declare or pay corporate dividends without the prior written consent
of Banks; provided that any corporate dividends approved by Banks shall satisfy
all other applicable requirements of this Agreement.

 

7.24        Stock Repurchases. Borrower
shall not purchase or repurchase any corporate stock of Borrower or Borrower’s
Subsidiaries or Affiliates, unless, at the time of any such repurchase (i) there
exists no Event of Default, (ii) Borrower is in strict compliance with all
covenants contained herein, (iii) Borrower demonstrates, to the reasonable
satisfaction of Bank, that Borrower shall remain in compliance with the
covenants contained herein for the twelve (12) months following such
repurchase, and (iv) Borrower provides the Agent with such updated
financial projections as the Agent shall reasonably require, which projections
shall be reasonably satisfactory to the Agent in all material respects.

 

8. EVENTS OF DEFAULT.

 

Any one or more of the following events shall constitute an event of
default (each, an “Event of  Default”) under this Agreement:

 

27

 

8.1                               Failure to Make
Payment. If Borrower fails to pay when due and payable, or when declared due
and payable, any portion of the Obligations (whether of principal, interest
(including any interest which, but for the provisions of the Bankruptcy Code,
would have accrued on such amounts), fees and charges due Banks, reimbursement
of Bank Expenses, or other amounts constituting Obligations);

 

8.2                               Failure to
Perform. If Borrower fails to perform, keep, or observe any material term,
provision, condition, covenant, or agreement contained in this Agreement, in
any of the Loan Documents, or in any other present or future agreement between
Borrower and Banks or either of them;

 

8.3                               Material
Adverse Change. If there is a Material Adverse Change;

 

8.4                               Attachment or
Other Process. If any material portion of Borrower’s properties or assets is
attached, seized, subjected to a writ or distress warrant, or is levied upon,
or comes into the possession of any third Person;

 

8.5                               Insolvency
Proceeding by Borrower. If an Insolvency Proceeding is commenced by Borrower;

 

8.6                               Insolvency
Proceeding Against Borrower. If an Insolvency Proceeding is commenced against
Borrower and any of the following events occur: (a) Borrower consents to
the institution of the Insolvency Proceeding against it; (b) the petition
commencing the Insolvency Proceeding is not timely controverted; (c) the
petition commencing the Insolvency Proceeding is not dismissed within forty
five (45) calendar days of the date of the filing thereof; provided,  however,
that, during the pendency of such period, Banks shall be relieved of their
obligation to extend credit hereunder; (d) an interim trustee is appointed
to take possession of all or a substantial portion of the properties or assets
of, or to operate all or any substantial portion of the business of, Borrower;
or (e) an order for relief shall have been issued or entered therein;

 

8.7                               Injunction or
Other Process. If Borrower is enjoined, restrained, or in any way prevented by
court order from continuing to conduct all or any material part of its business
affairs;

 

8.8                               Lien or Other
Process. If a notice of Lien, levy, or assessment is filed of record with
respect to any of Borrower’s properties or assets by the United States
Government, or any federal, state, local, or other Governmental Agency, or if
any taxes or debts owing at any time hereafter to any one or more of such
entities becomes a Lien, whether choate or otherwise, upon any of Borrower’s
properties or assets and the same is not paid on the payment due date thereof;

 

8.9                               Judgment or
Claim, Lien. If a judgment or other claim becomes a material Lien or
encumbrance upon any portion of Borrower’s properties or assets;

 

8.10                         Defaults in
Material Agreement. If there is a default in any material

 

28

 

agreement to which Borrower is a party with
one or more third Persons and such default (a) occurs at the final
maturity of the obligations thereunder, or (b) results in a right by such
third Person(s), irrespective of whether exercised, to accelerate the maturity
of Borrower’s obligations thereunder;

 

8.11                         Payment on
Subordinated Indebtedness. If Borrower makes any payment on account of
Indebtedness that has been contractually subordinated in right of payment to
the payment of the Obligations, except to the extent such payment is permitted
by the terms of the subordination provisions applicable to such Indebtedness;
or

 

8.12                         Misstatements
and Misrepresentations. If any material misstatement or misrepresentation
exists now or hereafter in any warranty, representation, statement, or report
made to Banks by Borrower or any officer, employee, agent, or director of
Borrower, or if any such warranty or representation is withdrawn.

 

8.13                         Other Events of
Default. If an Event of Default as defined elsewhere in the Loan Documents
shall occur.

 

8.14                         Cure Period,
Notice to Cure.

 

(a)          Notwithstanding
anything contained in this Article 8 to the contrary, Banks shall
refrain from exercising their rights and remedies and an Event of Default shall
not be deemed to have occurred by reason of the occurrence of any of the events
set forth in Sections 8.3, 8.4, 8.7. 8.8. 8.9, or 8.10 if, within
fifteen (15) calendar days from the date thereof (the “Cure Period”),
the same is released, discharged, dismissed, bonded against or satisfied.

 

(b)          In addition, with
respect to an Event of Default set forth in Sections 8.3. 8.4. 8.7, or
8.8, and provided the Borrower has given Notice (“Notice of Occurrence”)
to Banks not later than three (3) Business Days after the occurrence of
one or more of the Events of Default set forth in those subsections, the Cure
Period shall begin on the date the Agent or the Banks, or either of them, gives
to the Borrower a Notice to cure such Event of Default (the “Notice to Cure”).
Provided, however, that if Borrower fails for any reason to give such Notice of
Occurrence within such three (3) Business Day period, no Notice to Cure
shall be required and the Agent or the Banks, or either of them, may pursue all
available remedies without Notice.

 

(c)           No Notice to Cure
shall be applicable or required with respect to an Event of Default under this
Agreement except as specified in Section 8.14(b), and shall
specifically not be required with respect to an Event of Default specified in Section 8.1.
8.2. 8.5, 8.6, 8.9, 8,10, 8.11, or 8.12.

 

(d)          No Cure Period shall
be applicable or required with respect to any Event of Default under this
Agreement except as specified in Section 8.6 or 8.I4(b\ and
shall specifically not be applicable or required with respect to an Event of
Default specified in Section 8.1, 8.2, 8.5. 8.6 (except as
specified therein), 8.11, or

 

(e)          Notwithstanding
any other provision of this Agreement, any Event 

 

29

 

of Default specified in Section 8.1, 8.2.
8.4, 8.5. 8.6 (except as specified therein), or jfl shall conclusively be
deemed a material default.

 

(I)           With regard (i) the
date Notice to cure (“Notice to Cure Default”) is sent to Borrower by
Agent or Banks, or either of them, provided Borrower has given Notice (“Notice
of Occurrence”) to Banks not later than three (3) business days after
the occurrence of one or more of the events set forth in those subsections, the
fifteen (15) day period shall begin to run. In the event Borrower fails to give
such Notice of Occurrence within such three (3) day period, Agent and
Banks shall not be required to give Notice to Cure Default and may immediately
proceed with all available remedies.

 

9. BANKS’ RIGIITS AND REMEDIES.

 

9.1                               Rights and
Rcmedies. Upon the occurrence, and during the continuation, of an Event of
Default Banks may, at their or either of their election, without notice of such
election and without demand, do any one or more of the following, all of which
are authorized by Borrower:

 

(a)          Declare
all Obligations, whether evidenced by this Agreement, by any of the other Loan
Documents, or otherwise, immediately due and payable;

 

(b)          Cease making Advances
or extending credit to or for the benefit of Borrower under this Agreement,
under any of the Loan Documents, or under any other agreement between Borrower
and Banks;

 

(c)          Terminate
this Agreement and any of the other Loan Documents as to any future liability
or obligation of Banks, but without affecting Banks’ rights and without
affecting the Obligations;

 

(d)          Settle or adjust
disputes and claims directly with Account Debtors for amounts and upon tenns
which Banks considers advisable, and in such cases, Banks will credit Borrower’s
Loan Accounts with only the net amounts received by Banks in payment of such
disputed Accounts after deducting all Bank Expenses incurred or expended in
connection therewith;

 

(e)          Without
notice to or demand upon Borrower or any guarantor, make such payments and do
such acts as Banks considers necessary or reasonable to protect Banks’ rights.
Borrower agrees to make available for inspection, at any time during regular
business hours on a Business Day, by Banks or Banks’ designees any of the
assets of Borrower and its Subsidiaries or Affiliates. With respect to any of
Borrower’s owned or leased properties, Borrower hereby grants Banks a license
to enter into and inspect any such premises and to exercise any of Banks’
rights or remedies provided herein, at law, in equity, or otherwise; and

 

(1)          Without
notice to Borrower (such notice being expressly waived), and without
constituting a retention of any collateral in satisfaction of an obligation
(within the meaning of the Code), set off and apply to the Obligations any and
all (i) balances and deposits 

 

30

 

of Borrower held by Banks, or (ii) indebtedness
at any time owing to or for the credit or the account of Borrower held by
Banks.

 

9.2                                 Remedies
Cumulative.      Banks’ rights and remedies under
this Agreement, the Loan Documents, and all other agreements shall be
emulative. Banks shall have all other rights and remedies not inconsistent
herewith as provided under the Code, by law, or in equity. No exercise by Banks
of any right or remedy shall be deemed an election, and no waiver by Banks of
any Event of Default shall be deemed a continuing waiver. No delay by Banks
shall constitute a waiver, election, or acquiescence by them.

 

10. TAXES AND EXPENSES.

 

If Borrower fails to pay any monies (whether taxes, assessments,
insurance premiums, or, in the case of leased properties or assets, rents or
other amounts payable under such leases) due to third Persons, or fails to make
any deposits or furnish any required proof of payment or deposit, all as
required under the terms of this Agreement, then, to the extent that Banks
determine that such failure by Borrower could result in a Material Adverse
Change, in its discretion and without prior notice to Borrower, Banks may do
any or all of the following: (a) make payment of the same or any part
thereof~ (b) set up such reserves in Borrower’s Loan Accounts as Banks or
either of them deem necessary to protect Banks from the exposure created by
such failure; or (c) obtain and maintain insurance policies of the type
described in Section 6.8, and take any action with respect to such
policies as Banks deem prudent. Any such amounts paid by Banks shall constitute
Bank Expenses. Any such payments made by Banks shall not constitute an
agreement by Banks to make similar payments in the future or a waiver by Banks
of any Event of Default under this Agreement. Banks need not inquire as to, or
contest the validity of, any such expense, tax, or Lien and the receipt of the
usual official notice for the payment thereof shall be conclusive evidence that
the same was validly due and owthg.

 

11. WAIVERS; INDEMNIFICATION,

 

11.1        Demand;
Protest; etc. Borrower waives demand, protest, notice of protest,
notice of default or dishonor, notice of payment and nonpayment, nonpayment at
maturity, release, compromise, settlement, extension, or renewal of accounts,
documents, instruments, chattel paper, and guarantees at any time held by Banks
on which Borrower may in any way be liable.

 

11.2        Intentionally Omitted.

 

11.3        Indemnification.
Borrower shall pay, indemnify, defend, and hold Banks, each Participant, and
each of their respective officers, directors, employees, counsel, agents, and
attorneys-in-fact (each, an “Indemnified Person”) harmless (to the
fullest extent permitted by law) from and against any and all claims, demands,
suits, actions, investigations, proceedings, and damages, and all reasonable
attorneys’ fees and disbursements and other costs and expenses actually
incurred in connection therewith (as and when they are incurred and
irrespective of whether suit is brought), at any time asserted against, imposed
upon, or incurred by any of them in connection with or as a result of or
related to the execution, delivery, enforcement, 

 

31

 

performance, and administration of this
Agreement and any other Loan Documents or the transactions contemplated herein,
and with respect to any investigation, litigation, or proceeding related to
this Agreement, any other Loan Document, or the use of the proceeds of the
credit provided hereunder (irrespective of whether any Indemnified Person is a
party thereto), or any act, omission, event or circumstance in any manner
related thereto (all the foregoing, collectively, the “Indemnified
Liabilities”). Borrower shall have no obligation to any Indemnified Person
under this Section 11.3 with respect to any Indemnified Liability
that a court of competent jurisdiction finally determines to have resulted from
the gross negligence or willful misconduct of such Indemnified Person. This
provision shall survive the termination of this Agreement and the repayment of
the Obligations.

 

12. NOTICES.

 

Unless otherwise provided in this Agreement, all notices or demands by
any party relating to this Agreement or any other Loan Document shall be in
writing and (except for financial statements and other informational documents
which may be sent by first-class mail, postage prepaid) shall be personally
delivered or sent by registered or certified mail postage prepaid, return
receipt requested), overnight courier, or telefacsimile to Borrower or to
Banks, as the case may be, at its address set forth below:

 

	
  If to Borrower:

  	
   

  	
  KENNEDY-WILSON,
  INC.

  
	
   

  	
   

  	
  9601
  Wilshire Boulevard, Suite 220

  
	
   

  	
   

  	
  Beverly
  Hills, California 90210

  
	
   

  	
   

  	
  Attn:
  Freeman Lyle, EVP/CFO/Seeretary

  
	
   

  	
   

  	
  Fax
  No. (310) 887-6454

  
	
   

  	
   

  	
   

  
	
  with copies to:

  	
   

  	
  KULLK,
  GOTTESMAN & MOUTON, LLP

  
	
   

  	
   

  	
  15303
  Ventura Boulevard, Suite 1400

  
	
   

  	
   

  	
  Sherman
  Oaks, California 91403

  
	
   

  	
   

  	
  Attn:
  Kent Y. Mouton, Esq.

  
	
   

  	
   

  	
  Fax
  No. (310) 557-0224

  
	
   

  	
   

  	
   

  
	
  If to U.S. Bank:

  	
   

  	
  U.S.
  BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  	
  633
  West 5th  Street

  
	
   

  	
   

  	
  30th Floor

  
	
   

  	
   

  	
  Los
  Angeles, California 90071

  
	
   

  	
   

  	
  Attn:
  Linda Morgan, Vice President

  
	
   

  	
   

  	
  Fax
  No. (213) 615-6792

  
	
   

  	
   

  	
   

  
	
  with copies to:

  	
   

  	
  RUTAN
  AND TUCKER LLP

  
	
   

  	
   

  	
  611 Anton Blvd., Suite 1400

  
	
   

  	
   

  	
  Costa Mesa, CA 92626

  
	
   

  	
   

  	
  Atm:
  Bob L. Hagle, Esq.

  
	
   

  	
   

  	
  Fax
  No. (714) 546-9035

  
	
   

  	
   

  	
   

  
	
  If to East-West Bank:

  	
   

  	
  EAST-WEST
  BANK

  
	
   

  	
   

  	
  135
  N. Los Robles Avenue

  
	
   

  	
   

  	
  2nd Floor

  
	
   

  	
   

  	
  Pasadena,
  CA 91101

  
	
   

  	
   

  	
  Atth: Kathy Kwan, Vice
  President

  
	
   

  	
   

  	
  Fax No. (626)
  817-8869

  

 

32

 

	
  with copies to:

  	
   

  	
  NEVERS,
  PALAZZO, MADDUX & PACKARD

  
	
   

  	
   

  	
  3
  1248 Oak Crest Drive, Suite 100

  
	
   

  	
   

  	
  Westlake
  Village, California 91361

  
	
   

  	
   

  	
  Attn:
  Carisle Packard, Esq.

  
	
   

  	
   

  	
  Fax No.: (818) 879-9680

  

 

The parties hereto may change the address at which
they are to receive notices hereunder, by notice in writing in the foregoing
manner given to the other. All notices or demands sent in accordance with this Section 12
shall be deemed received on the earlier of the date of actual receipt or three (3) days
after the deposit thereof in the U.S. mail or, where applicable, two (2) days
after deposit with a nationally recognized overnight carrier, all with postage
and charges prepaid, or two (2) days after the latter of transmission by
telefacsimile with an electronic transmission receipt and deposit of a copy
into the U.S. mail by first class U.S. mail.

 

13.          CHOICE OF LAW AND VENUE; JURY TRIAL
WAIVER.

 

THE VALIDITY OF THIS AGREEMENT AND
THE OTHER LOAN  DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY
IN  ANOTHER LOAN DOCUMENT), THE
CONSTRUCTION, INTERPRETATION, AND  ENFORCEMENT
HEREOF AND  THEREOF, AND THE RIGHTS OF THE PARTIES  HERETO AND  THERETO WITH RESPECT TO ALL MATTERS ARISING
HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE  DETERMINED UNDER,
GOVERNED BY, AND CONSTRUED IN ACCORDANCE  WITH THE LAWS OF THE STATE OF CALIFORNIA. THE PARTIES HERETO  AGREE THAT ALL
ACTIONS OR PROCEEDINGS ARISING IN CONNECTION
WITH THIS AGREEMENT AND THE  OTHER LOAN
DOCUMENTS SHALL BE  TRIED AND
LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED  IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA OR,
AT THE SOLE  OPTION OF BANKS, IN
ANY OTHER COURT IN WHICH BANKS SHALL INITIATE  LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT
MATTER  JURISDICTION OVER THE
MATTER IN CONTROVERSY. EACH OF BORROWER  AND BANKS WAIVES TO THE EXTENT PERMITTED UNDER APPLICABLE LAW,
ANY RIGHT EACH MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON  CONVENIENS
OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS  BROUGHT IN ACCORDANCE WITH THIS SECTION 13.
BORROWER AND BANKS  HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM  OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY  OF THE LOAN
DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED THEREIN,  INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS,  AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH OF
BORROWER AND BANKS REPRESENTS THAT IT HAS
REVIEWED THIS WAIVER  AND  EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL  RIGHTS  FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE
EVENT OF  

 

33

 

LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED
AS A WRITTEN  CONSENT TO A
TRIAL BY THE COURT.  

 

14.                                   DESTRUCTION OF BORROWER’S DOCUMENTS.

 

All documents, schedules,
invoices, agings, or other papers delivered to Banks may be destroyed or otherwise disposed of by
Banks one (1) year after they are
delivered to or received by Agent or
Banks, unless Borrower requests, in writing, the return of said documents,
schedules, or other papers and makes arrangements, at Borrower’s expense, for their return.

 

15.                              AGENCY AND GOVERNANCE PROVISIONS.

 

15.1         Actions. Each Lender hereby appoints
U.S. BANK NATIONAL ASSOCIATION as its Agent (in such capacity, together
with its successors and assigns, “Agent”) under and for purposes of this
Agreement and each other Loan Document. Each Lender authorizes Agent to act on
behalf of such Lender under this Agreement and each other Loan Document and, in
the absence of other written instructions from the Lenders received from time
to time by Agent (with respect to which Agent agrees that it will comply,
except as otherwise provided in this Article 15 or as otherwise
advised by counsel), to exercise such powers hereunder and thereunder as are
specifically delegated to or required of Agent by the term is hereof and
thereof, together with such powers as may reasonably be incidental thereto.
Each Lender hereby indenmifies (which indemnity shall survive any termination
of this Agreement) Agent, pro rata according to such Lender’s Pro-Rata Share,
from and against any all liabilities, obligations, losses, damages, claims,
costs or expenses of any kind or nature whatsoever which may at any time be
imposed on, incurred by, or asserted against, Agent in any way relating to or
arising out of this Agreement and any other Loan Document, including reasonable
attorneys’ fees, and as to which Agent is not reimbursed by Borrower; provided,
however, that no Lender shall be liable for the payment of any portion of
such liabilities, obligations, losses, damages, claims, costs or expenses which
are determined by a court of competent jurisdiction in a final proceeding to
have resulted solely from Agent’s gross negligence or willful misconduct. Agent
shall not be required to take any action hereunder, or under any other Loan
Document, or prosecute or defend any suit in respect of this Agreement or any
other Loan Document, unless it is indemnified hereunder to its satisfaction. If
any indemnity in favor of Agent shall be or become, in Agent’s determination,
inadequate, Agent may call for additional indemnification from the Lenders and
cease to do the acts indenmified against hereunder until such additional
indemnity is given.

 

15.2        Exculpation. Neither
Agent nor any of its directors, officers, employees, or agents shall be liable
to any Lender for any action taken or omitted to be taken by it under this
Agreement or any other Loan Document, or in connection herewith or therewith,
except for its own willful misconduct or gross negligence, nor responsible for
any recitals or warranties herein or therein, nor for the effectiveness,
enforceability, validity, or due execution of this Agreement or any other Loan
Document, nor for the creation, perfection, or priority of any Liens purported
to be created by any of the Loan Documents, or the validity, genuineness,
enforceability, existence, value, or sufficiency of any collateral security,
not to make any inquiry respecting the 

 

34

 

performance by Borrower or any of its Subsidiaries or
Affiliates of their respective obligations under the Loan Documents. Any such
inquiry which may be made by Agent shall not obligate it to make any further
inquiry or to take  any action. Agent shall be entitled
to rely upon advice of counsel concerning legal matters and upon any notice,
consent, certificate, statement, or writing which Agent believes to be genuine
and to have been presented by a proper Person.

 

15.3        Successors. Agent may
resign as such at any time upon at least thirty (30) days’ prior notice to
Borrower and all Lenders. If Agent at any time shall resign, the Lenders may
appoint another Lender as a successor Agent which shall upon acceptance of such
appointment, thereupon become Agent hereunder. If no successor Agent shall have
been so appointed by the Lenders, and shall have accepted such appointment,
within thirty (30) days after the retiring Agent’s giving notice of
resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall be a Lender or a commercial banking institution
organized under the laws of the United States (or any State thereof) or a U.S.
branch or agency of a commercial banking institution, and having a combined
capital and surplus of at least Five Hundred Million Dollars ($500,000,000).
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall be entitled to receive from the retiring Agent such
documents of transfer and assignment as such successor Agent may reasonably
request, and shall thereupon succeed to and become vested with all rights,
powers, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under this Agreement. After
any retiring Agent’s resignation hereunder as Agent, the provisions of this Article 15
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement.

 

15.4        Other
Transactions by U.S. Bank. U.S. Bank shall have the same
rights and powers with respect to (x) Facility
A and Facility B made by it or any of its Affiliates, and (y) the Notes
held by it or any of its Affiliates as any other Lender and may
exercise the same as if it were
not Agent. U.S. Bank and its
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of business with Borrower, any of its Subsidiaries or any of their Affiliates as if U.S. Bank
were not Agent hereunder.

 

15.5        Independent
Credit Decision. Each Lender acknowledges that it has, independently of Agent
and each other Lender, and based on such Lender’s review of the financial information of
Borrower and its Subsidiaries and Affiliates, this Agreement, the other Loan
Documents (the terms and provisions of which being satisfactory to such Lender)
and such other documents, information and investigations as such Lender has
deemed appropriate, made its own credit decision in regard to Facility A and
Facility B. Each Lender also acknowledges that it will, independently of Agent
and each other Lender, and based on such other documents, information, and
investigations as it shall deem appropriate at any time, continue to make its
own credit decisions as to exercising or not exercising from time to time any
rights and privileges available to it under this Agreement or any other Loan
Document.

 

15.6        Copies.
Agent shall give prompt notice to each Lender of each notice or request
required or permitted to be given to Agent by Borrower pursuant to the terms of
this Agreement (unless concurrently delivered to the Lenders by Borrower).
Agent will distribute to each Lender each document or instrument received for
its account and copies of all other 

 

35

 

communications received by Agent from Borrower for
distribution to the Lenders by Agent in accordance with the terms of this
Agreement.

 

15.7        Payments to be Made to
Agent. All payments of principal, interest, fees, costs, expenses, and other
amounts made by the Borrower pursuant to this Agreement and the other Loan Documents
shall be made by the Borrower to Agent, on behalf of the Lenders. Whenever
Agent receives any payment or prepayment from or on behalf of the Borrower pursuant
to this Agreement or any other Loan Document, Agent shall promptly pay over to
each Lender an amount equal to its Pro-Rata Share of such payment or repayment,
as the case may be. Any determination by Agent as to the allocation of any
payment or prepayment to a particular Loan, or to interest, principal, fees or
any other amount payable in respect of this Agreement or the other, Loan
Documents shall be final and conclusive absent manifest error.

 

15.8        Reimbursement by
Lenders. Each Lender shall on demand reimburse Agent for its Pro-Rata Share of
any and all costs, expenses and disbursements (other than normal overhead costs
and expenses) which Agent may incur or sustain in connection with the Loans or
any action which may be taken by Agent to administer or collect the same on
behalf of the Lenders and for which Agent is not otherwise reimbursed by the
Borrower, including, without limitation, all expenses incurred or sustained in
connection with the enforcement of rights or remedies against the Borrower, all
court costs, disbursements and accountants’ fees and disbursements, filing and
recording fees, title investigation and insurance charges, appraisal fees, and
expenses of special examinations and audits.

 

15.9       Collateral
and Guarantees Held by Agent. All collateral security mortgaged,
pledged, assigned, transferred, or in the possession of Agent and all
guarantees of the Borrower’s obligations under the Loan Documents which Agent
holds or which may hereafter come into its possession as collateral security
for or guarantees of the Loans shall be held by Agent in its own name for the
ratable benefit of the Lenders in accordance with their Pro-Rata Shares.
However, neither Agent (in its capacity as Agent) nor any Lender shall have any
interest in any property that may at any time be taken as collateral security
for any other loan or loans made to the Borrower by U.S. Bank, or in any
property now or hereafter in the possession or control of U.S. Bank which may
be or become collateral security for such loans by reason of the general
description contained in any general loan or collateral agreement or collateral
note held at any time by U.S. Bank, or by reason of any right or set-off,
counterclaim, banker’s lien, or otherwise, except that if such property or the
proceeds thereof are applied in reduction of any amounts outstanding under this
Agreement, the Notes, or any other Loan Document, then each Lender shall be
entitled to its Pro-Rata Share of such application.

 

15.10     Lenders’
Commitments Independent. All advances of loan funds under this Agreement
shall be made by the Lenders proportionately in accordance with their Pro-Rata
Shares, and no Lender shall be obligated to fund more than its Pro-Rata Share
of any requested Advance. All collateral security at any time mortgaged,
pledged, assigned, transferred, or in the possession of Agent and all guarantees
of the Borrower’s obligations under the Loan Documents which Agent at any time
holds as collateral security for or guarantees of the Loans shall be held by
Agent in its own name for the ratable benefit of the Lenders based upon their
respective Pro-Rata Shares. However, neither Agent (in its capacity as Agent)
nor any Lender shall have any 

 

36

 

interest in any property that may be taken as
collateral security for any other loan or loans made to the Borrower by U.S.
Bank, or in any property now or hereafter in the possession or control of U.S.
Bank which may be or become collateral security for such loans by reason of the
general description contained in any general loan or collateral agreement or
collateral note held by U.S. Bank or by
reason of any right or set-off, counterclaim,
banker’s lien, or otherwise, except that if such property or
the proceeds thereof are applied in reduction of any amounts outstanding under
this Agreement, the Notes, or any other Loan Document, then each Lender shall
be entitled to its Pro-Rata Share of such application.

 

15.11      Borrower
to deal with Agent. Borrower shall deal
solely and directly with Agent, as Agent for the Lenders, for all purposes
under the Loan Documents and shall deliver all notices, communications,
and other information required or desired to be delivered under the Loan
Documents, and make all payments due thereunder, directly to Agent.

 

15.12      Loans to be Funded
Through Agent. Promptly upon receipt of notice of each proposed Advance of Loan
funds, the Agent shall notify each Lender of the date and amount of each such
Advance and each Pro-Rata Share thereof and provide each Lender with a copy of
the Advance Request Form and Disbursement Letter reflecting the Borrower’s
request for such Advance. Each Lender shall, on or before 10:00 a.m.
California time on the date of each such Advance, pay to the Agent, at its
office at 633 West 5th Street, 30th Floor, Los Angeles, California 90071, Account No. 6517339330,
Reference: Kennedy-Wilson, Inc., Attention: Linda
Morgan, Vice President, Telephone (213) 615-6683, its Pro-Rata Share thereof in
lawful money of the United States of America and in immediately available
funds. All Advances of Loan funds shall be made by the Lenders simultaneously
and proportionately in accordance with their respective Pro-Rata Shares, but
each Lender may, at its option, fulfill its Commitments with respect to any
LIBOR Rate portion of such Loans, if applicable, by causing a foreign branch or
Affiliate to make the requested Advance, provided that any exercise of that
option does not result in increased costs to the Borrower. Subject to the
satisfaction of the conditions specified in Article 3 hereof, Agent
shall make the proceeds of the Advance available to the Borrower on the
required funding date by causing an amount equal to such proceeds to be
credited to Borrower’s Account; it is understood, however, that the Agent shall
only be required to credit to the Borrower’s Account such proceeds of such
Advance as are actually received by it from the Lenders. Unless the Agent has
been notified by a Lender prior to the required funding date that such Lender
will not make its Pro-Rata Share of the applicable Advance available to the
Agent, the Agent may assume that the Lender has made its portion available on
the funding date, and the Agent may in reliance upon such assumption make a
corresponding amount available to the Borrower. No Lender shall be relieved of
its obligation to make its Pro-Rata Share of any requested Advance under this
Agreement available to the Agent by the failure of any other Lender to make its
Pro-Rata Share of that Advance available to the Agent. However, no Lender shall
be responsible for any such default by any other Lender; nor shall the
Commitment of any Lender be increased as a result of any such default by any
other Lender; nor shall the Agent be responsible for any such default by a
Lender. If and to the extent a Lender does not make its Pro-Rata Share of a
requested Advance available to the Agent, that Lender shall repay to the Agent,
on demand, the amount of its Pro-Rata Share of that Advance together with
interest thereon at the Federal Funds Effective Rate for each day from the date
the amount is made available to the Borrower until the date the amount is
repaid to the Agent, and the Agent may exercise any and

 

37

 

all voting rights otherwise accorded to that Lender
under this Agreement until all required payments are received by the Agent. If
a Lender so repays its Pro-Rata Share of that Advance to the Agent, the amount
so repaid shall constitute that Lender’s Pro-Rata Share of the Advance for all
purposes of this Agreement. “Federal Funds Effective Rate” means the
rate per annum equal to the Agent’s cost of obtaining overnight funds in the
New York Federal Funds Market, as in effect from time to time.

 

16.                           ASSIGNMENTS AND PARTICIPATIONS.

 

16.1        Assignments. Either Bank may at any time, with notice to Borrower and Agent,
assign and delegate to one or more commercial banks or other financial
institutions

reasonably acceptable to Agent (each Person to whom such assignment and
delegation is to be made, being hereinafter referred to as an “Assignee
Lender”), all or any fraction of such Bank’s Commitment (which assignment
and delegation shall be of a constant, and not a varying, percentage of all the
assigning Lender’s Commitment) (each Lender from whom such assignment and
delegation is to be made, being hereinafter referred to as an “Assignor
Lender”), but not less than an aggregate principal amount of Five Million
Dollars ($5,000,000) and an integral multiple of Five Hundred Thousand Dollars
($500,000) in excess thereof; provided,  however, that Borrower
and Agent shall be entitled to continue to deal solely and directly with such
Lender in connection with the interests so assigned and delegated to an
Assignee Lender until (a) written notice of such as assignment; and
delegation, together with payment instructions, addresses and related
information with respect to such Assignee Lender, shall have been given to
Borrower and Agent by such Lender and such Assignee Lender, and (b) Agent
shall have received a processing fee of Three Thousand Dollars ($3,000) from
such Lender or Assignee Lender and an executed assignment agreement in form and
substance satisfactory to Agent.

 

From and after the date that an assignment becomes effective as
provided in the preceding paragraph, (a) the Assignee Lender thereunder
shall be deemed automatically to have become a party hereto and to the extent
that rights and obligations hereunder have been assigned and delegated to such
Assignee Lender in connection with such assignment, shall have the rights and
obligations of a Lender hereunder and under the other Loan Documents, and (b) the
Assignor Lender, to the extent that rights and obligations hereunder have been
assigned and delegated by it in connection with such assignment, shall be
released from its obligations hereunder, and under the Loan Documents. Within
five (5) Business Days after its receipt of notice of such assignment and
associated documentation reasonably required by the Agent, Borrower shall
execute and deliver to Agent (for delivery to the relevant Assignee Lender) new
Notes (if requested by Agent in its sole discretion) evidencing such Assignee
Lender’s assigned Commitments and, if the Assignor Lender has retained any
portion of its Commitment hereunder, replacement Notes evidencing such Assignor
Lender’s retained portion of the Commitments (each such Note to be in exchange
for, but not in payment of, the Note then held by such Assignor Lender). Each
such replacement Note shall be dated the date of the predecessor Note. Accrued
interest on that part of the predecessor Note evidenced by the replacement
Note, and accrued fees, shall be paid as provided in the documentation
effecting the Assignment. Accrued interest on that part of the predecessor Note
shall be paid by the Agent, following its 

 

38

 

receipt from the Borrower, to the Assignor Lender.
Accrued interest and accrued fees shall be paid at the same time or times
provided in the predecessor Note and in this Agreement. Any attempted
assignment and delegation not made in accordance with this Section 16.1
shall be null and void.

 

16.2                     Participations. Any Lender may at any time sell to one or more

commercial banks or other Persons (each of such commercial banks and
other Persons being herein called a “Participant”) participating
interests in any of its Commitment; provided, however, that:

 

(a)          no participation contemplated in this Section 16.2
shall relieve such Lender from its Commitment or its other obligations
hereunder or under any other Loan Document;

 

(b)          such Lender shall remain solely responsible for the
performance of its Commitment and such other obligations;

 

(c)          Borrower and Agent shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and each of the other Loan Documents;

 

(d)          No Participant, unless such Participant is itself a Lender,
shall be entitled to require such Lender to take or refrain from taking any
action hereunder or under any other Loan Document.

 

17.                           GENERAL
PROVISIONS.

 

17.1       Effectiveness. This Agreement shall
be binding and deemed effective when executed by Borrower and Banks.

 

17.2                         Successors and
Assigns. This Agreement shall bind and inure to the benefit of the respective
successors and assigns of each of the parties; provided, however, that Borrower
may not assign this Agreement or any rights or duties hereunder without Agent’s
prior written consent and any prohibited assignment shall be absolutely void.
No consent to an assignment by Banks shall release Borrower from its
Obligations hereunder. Banks may assign this Agreement and its rights and
duties hereunder and no consent or approval by Borrower is required in
connection with any such assignment. Banks and each of them reserve the right
to sell, assign, transfer, negotiate, or grant participations in all or any
part of, or any interest in Banks’ rights and benefits hereunder. In connection
with any such assignment or participation, Banks may disclose to a prospective
or actual purchaser or participant all documents and information which Banks
now or hereafter may have relating to Borrower or Borrower’s business. To the
extent that Banks or either of them assign their rights and obligations
hereunder to a third Person, Banks thereafter shall be released from such
assigned obligations to Borrower and such assignment shall effect a novation
between Borrower and such third Person.

 

17.3                         Section Headings.
Headings and numbers have been set forth herein for convenience only. Unless
the contrary is compelled by the context, everything contained in each 

 

39

 

section
applies equally to this entire Agreement.

 

17.4        Interpretation. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against Banks or Borrower,
whether under any rule of construction or otherwise. On the contrary, this
Agreement has been reviewed by all parties and shall be construed and interpreted
according to the ordinary meaning of the words used so as to fairly accomplish
the purposes and intentions of all parties hereto.

 

17.5        Severability of Provisions. Each provision of this Agreement
shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of any specific provision.

 

17.6       Amendments
in Writing. This Agreement can only be amended by a writing signed by both
Banks and Borrower.

 

17.7        Counterparts;
Telefacsimile Execution. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and the same Agreement.
Delivery of an executed counterpart of this Agreement by telefacsimile shall be
equally as effective as delivery of an original executed counterpart of this
Agreement. Any party delivering an executed counterpart of this Agreement by
telefacsimile also shall deliver an original executed counterpart of this
Agreement but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Agreement or of
any of the Loan Documents..

 

17.8       Revival
and Reinstatement of Obligations. If the incurrence or payment

of the Obligations by Borrower or any guarantor of the Obligations or
the transfer by either or both of such parties to Banks of any property of
either or both of such parties should for any reason subsequently be declared
to be void or voidable under any state or federal law relating to creditors’
rights, including provisions of the Bankruptcy Code relating to fraudulent
conveyances, preferences, and other voidable or recoverable payments of money
or transfers of property (collectively, a “Voidable Transfer”), and if
Banks are required to repay or restore, in whole or in part, any such Voidable
Transfer, or elects to do so upon the reasonable advice of their counsel, then,
as to any such Voidable Transfer, or the amount thereof that Banks or either of
them is required or elects to repay or restore, and as to all reasonable costs,
expenses, and attorneys’ fees of Banks related thereto, the liability of
Borrower or such guarantor automatically shall be revived, reinstated, and
restored and shall exist as though such Voidable Transfer had never been made.

 

17.9       Integration.
This Agreement, together with the other Loan Documents, reflects the entire
understanding of the parties with respect to the transactions
contemplated hereby and shall not be
contradicted or qualified by any other agreement, oral or written, before the date hereof

 

17.10     Attorneys’
Fees. If any action or proceeding, at law, in equity, or 

 

40

 

otherwise, including any action for
declaratory relief, is brought by or on behalf of any party hereunder, or is
required by any court of competent jurisdiction, as the case may be, which is
in any manner related to this Agreement or any other Loan Document or its or
their breach, interpretation, or enforcement, the prevailing party in any final judgment or award shall be entitled to
recover from the non-prevailing party or parties to such and or proceeding the full amount of all reasonable
expenses, including all court costs and actual attorneys’ fees paid or incurred
in good faith (including, without limitation, fees incurred pursuant to Title
11, United States Code, by such prevailing party, in addition to any other
relief to which it may be entitled.

 

[SIGNATURE PAGE FOLLOWS]

 

41

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in Los Angeles, California.

 

	
   

  	
   

  	
  Borrower:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  KENNEDY-WILSON, INC.,

  
	
   

  	
   

  	
  /s/  William J.
  McMorrow

  
	
   

  	
   

  	
  /s/  Freeman Lyle, CFO

  
	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION,

  
	
   

  	
  a national banking association

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Linda Morgan

  
	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  
	
   

  	
   East-West
  Bank:

  
	
   

  	
   

  
	
   

  	
  EAST-WEST BANK,

  
	
   

  	
  a California corporation

  
	
   

  	
  By

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Agent:

  
	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION,

  
	
   

  	
  a national banking association

  
	
   

  	
  By

  	
  /s/ Linda Morgan

  
	
   

  	
  Title: Vice
  President

  
					

 

42

 

Schedule A-1

 

Authorized
Persons

 

	
  Name

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
  William J. McMorrow

  	
   

  	
  Chairman and Chief
  Executive Officer

  
	
  Freeman Lyle

  	
   

  	
  Executive Vice President,
  Chief Financial Officer, and Secretary

  

 

 

Schedule P-1

 

Permitted Liens

None

 

 

Schedule 1.1-1

 

Advance Request Form and Disbursement Letter

 

[SEE
ATTACHED]

 

 

U.S. BANK

 

AD VANCE REQUEST FORM

 

(Advances made same day if request is’ received before 11:00 Am..
Monday through Friday, except holidays)

 

	
  BORROWER NAME:
  KENNEDY-WILSON, INC.

  	
  DATE:

  

 

	
  LOAN NUMBER

  	
   

  	
   

  	
  AMOUNT OF REQUEST:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ADVANCE

  	
   

  	
  PAYOFF

  	
  PAYDOWN

  	
   

  

 

IF ADVANCE ON ACQUISITION
FACILITY, PLEASE DETAIL:

 

PROJECT
NAME DESCRIPTION:
                  

 

ASSOCIATED
DEBT TERMS:
                  

 

MATURITY OF ADVANCE:
                  

(not to exceed time periods set forth in Loan Documents)

 

FUNDS DEPOSITED TO! TAKEN FROM:  TO BE DETERMINED

 

ACCOUNT NUMBER:  TO BE DETERMINED

 

PERSON
AUTHORIZING REQUEST: (signature)

 

FOR QUESTIONS REGARDING THIS REQUEST, PLEASE
CALL:

 

NAME:  FREEMAN 
LYLE, EVP/CFO/ SECRETARY  PHONE NUMBER: (310) 887-6453

 

COMMENTS:

 

REQUESTS
RECEIVED AFTER 11:00 A.AL 
WILL BE PROCESSED THE NEXT BUSINESS DAY.

PLEASE FAX
REQUEST TO: (213) 615-6792

ATTN: LINDA
MORGAN

 

 

[Borrower’s letterhead]

 

DISBURSEMENT LETTER

 

U.S. Bank National
Association, as Agent

633 West 5th Street, 30th Floor

Los Angeles, California 90071

Attention: Linda Morgan

 

Re:                               Loan Agreement
dated as of June 5, 2008 among U.S. Bank National
Association and East-West Bank, U.S. Bank National
Association, as agent, and Kennedy-Wilson, Inc. (the “Loan Agreement”)

 

Dear Mr. Mitchell:

 

This is an ‘Advance Request Form and
Disbursement Letter” (as defined in the Loan Agreement). All capitalized
terms not otherwise defined are used in this Advance Request
Form and Disbursement Letter with the meanings given them in the Loan
Agreement.

 

Borrower requests an Advance
from Facility choose one: [A] [B] in the amount of $                                  .

 

Borrower certifies to the Banks as
follows with respect to the Advance requested above:

 

I.              The amount requested above, when
aggregated with all other Advances outstanding under Facility choose the
applicable Facility: [A] [B], does not exceed the amount available to be
advanced under the Loan Agreement;

 

2.             All of the representations and warranties contained in
the Loan Agreement and the other Loan Documents are true and correct in
all respects;

 

3.             No Default or Event of Default has occurred and is
continuing nor shall result from the making of the Advance requested above;

 

4.             All of the other conditions to
the Banks’ making the requested Advance set forth in the Loan Agreement have
been satisfied.

 

5.             If Borrower  has elected
that the Advance bear interest at an interest rate based on the LIBOR Rate,
Borrower has delivered to Agent an appropriately completed LIBOR Notice in the form of Schedule
2.2 to the Loan Agreement.

 

 

6.             The repayment date for the requested Advance in
accordance with Section 2.2(d) of the Loan Agreement is                             .

 

	
   

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  KENNEDY-WILSON, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  

 

 

Schedule
1.1-2

Excluded
Properties

None

 

 

Schedule 2.2

LIBOR Notice

[SEE
ATTACHED]

 

 

Schedule 2.2

 

LIBOR NOTICE

 

	
  To:

  	
  U.S. Bank National
  Association

  
	
   

  	
  633 West 5th Street, 30Eh Floor

  
	
   

  	
  Los Angeles, California
  90071

  
	
   

  	
  Attn: Linda Morgan

  
	
   

  	
  Facsimile: (213) 615-6683

  

 

This LIBOR Notice is given pursuant to Section 2.2
of that certain Loan Agreement, dated as of June 5, 2008 (the “Agreement”),
between KENNEDY-WILSON, INC. (“Borrower”), EAST-WEST BANK and U.S. BANK
NATIONAL BANK (“Bank”). All initially capitalized terms used but not defined
in this Notice of Conversion or Continuation shall have the meanings assigned to
them in the Agreement.

 

In connection with the Advances, the undersigned hereby requests that
you:

 

1.            Convert $          
in principal amount of the Prime Rate Loans on                     200   ,
to a LIBOR Rate Loan with an Loan Period of               [1, 2 or 3] months and expiring on
                                , 200   
($500,000 minimum with incremental increases of $100,000 in excess thereof);

 

2.            Convert $              
in principal amount of LIBOR Rate Loans on the expiration of
the Loan Period applicable thereto, to a Prime Rate Loan;

 

3.            Continue as LIBOR
Rate Loans $                  
in principal amount of presently outstanding LIBOR Rate Loans
commencing on the expiration of the Loan Period applicable thereto, with a new
Loan Period of               [1, 2, 3, 6 or
12] months and expiring on                       ,
200   .

 

The undersigned certifies that, as of the date hereof:

 

(a)          the representations and warranties
of Borrower contained in the Agreement are true and correct on and
as of such date, except to the extent such representations and warranties
expressly relate solely to an earlier date;

 

(b)          no Event of Default
has occurred or is continuing;

 

(c)           after giving
effect to the continuation or conversion requested hereby, there
shall be no more than five (5) LIBOR Rate
Loans outstanding;

 

(d)          Borrower has
satisfied in all respects all conditions under the Agreement to be performed or
satisfied by it on or before such date.

 

 

	
  Dated:
                          , 200   

  	
  KENNEDY-WILSON,
  INC.

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

Schedule 3.2

 

Documentation to Be Furnished to Banks in Connection with

Each Facility A or Facility B Advance

 

Document

 

1.             Advance
Request Form and Disbursement Letter, in the form attached as Schedule
1.1-1.

 

2.             Such
additional documentation as may from time to time be requested by Banks.

 

 

Schedule 5.4

Schedule of Indebtedness

None.

 

 

Schedule 5.6

Borrower Subsidiaries

 

Kennedy-Wilson, Inc.

K-W Properties

Kennedy-Wilson International

Kennedy-Wilson Properties, Ltd

Kennedy-Wilson Properties Ltd

Kennedy-Wilson Austin Inc.

Kennedy-Wilson International of New York Inc.

Kennedy Wilson Capital

Kennedy-Wilson Tech, Ltd

Techsource Services, Inc.

Kennedy-Wilson Properties Northwest, Ltd

Kennedy-Wilson Properties of Dallas

Kennedy-Wilson Florida Management Inc.

Kennedy-Wilson Nevada Management, Inc.

Kennedy-Wilson Ohio Management, Inc.

Kennedy-Wilson Pennsylvania Management, Inc.

Kennedy-Wilson Properties of Arizona Ltd.

Kennedy-Wilson Properties of Missouri Ltd.

Kennedy-Wilson Properties of Texas Ltd.

Kennedy-Wilson Virginia Management Inc.

Kennedy-Wilson Wisconsin Management, Inc.

KWP Financial, Inc.

KWP
Financial I

KWP
Financial II

KWP Financial IV

KWP Financial VI (formerly Falcon Crest)

KWP Servicer, LLC

KWP REO, LLC

KWP
Financial IX, Inc.

KWP Financial X, Inc. (formerly NLS 187
Corp)

KWP Financial XI LP, Inc.

KW Seattle Fund I, LLC

KWP Marina Club, LP

KWP Marina Club, UP, Inc.

KWP Marina Club Executives, LLC

K-W Santiago Inc.

KW Ravenswood LLC

KW Ravenswood Member LLC

KW Ravenswood Equity LLC

KW Ravenswood Executives LLC

KW/WDC Vista, LLC

 

 

KW Vista Land Partners LLC

KW Vista Executives LLC

KW Napa LLC

KW Napa Equity LLC

KW Davis LLC

KW Davis Equity LLC

KW Davis Executives, LLC

KW Pinole LLC

KW Pinole Equity LLC

KW Pinole Executives, LLC

KW-MSK San Jose LLC

KW San Jose Member LLC

KW San Jose Executives, LLC

KW/WDC La
Mesa, LLC

KW La Mesa
Land Partners, LLC

Japan Ventures, LLC

Chipwell, LLC

Kennedy Wilson Overseas Investments, LLC

Kennedy Wilson Overseas Investments, Inc

KW
Multi-Family Management Group Ltd

Fairways 340,LLC

Fairways 340 Corp

Hokkaido Apartments LLC

1KW Hawaii Development LLC

KW Hawaii Executives LLC

KW/WDC Apartment
Portfolio LLC

KW/WDC
Portfolio Member LLC

KW/WDC Beaverton LLC

KW/WDC Norwalk LLC

KW/WDC Sacramento LLC

KW/WDC Vallejo LLC

KW/WDC
Executives LLC

KW-M5K Anaheim LLC

KW Anaheim Manager LLC

KW Anaheim Land Partners LLC

KW Anaheim
Executives LLC

KW Hidden
Creek, LLC

KW Western
Fund II, LLC

KW Western
Fund Manager, LLC

KW Western Fund Executives, LLC

KW Federal
Way, LLC

KW Federal Way Equity, LLC

1KW Federal Way Executives

Kenedix UP, LLC

KW/HFC Paramount, LP

 

 

KW Paramount GP, LLC

KW/HFC Paramount, LLC

KW
Paramount Member, LLC

KW Paramount Investors, LLC

Dillingham Ranch Ama LLC

68-540 Farrington LLC

1KW
Dillingham Ama LLC

KW
Dillingham Ama Investors LLC

Mokuleia Water LLC

North Shores Water company LLC

Mokuleia Farmington shores, LLC

Mokuleia shores Holder LLC

Panako LLC

Kennedy Capital Trust I

KW Palisades Center, LLC

1KW Palisades Center Manager, LLC

1KW
Palisades Executives, LLC

KWI America Multifamily, LLC

KW America Multifamily Manager, LLC

1KW America Multifamily Executives, LLC

KW/WDC Westmoreland, LLC

KW/WDC West Campus, LLC

900 Fourth Avenue Property
LLC

KW Portfolio XI Manager, LLC

1KW Portfolio 900 Fourth Property Manager,
LLC

KW 900 Fourth Property Executives, LLC

Fifth and Madison LLC

KW Portfolio XII Manager, LLC

KW Portfolio Fifth and Madison
Property Manager, LLC

KW Fifth and Madison Property Executives, LLC

300 California Partners LLC

KW 300 California Manager LLC

KW 300 California LLC

1KW Fund II
300 California, LLC

KW
Portfolio XIII, LLC

KW Portfolio XIII Manager, LLC

KW Portfolio XIII Executives, LLC

KW - RAR3 Mill Creek, LLC

KW - RAR3 Mill Creek Manager, LLC

KW Mill
Creek Property Manager, LLC

1KW Mill Creek Executives, LLC

KW Fruitdale, LLC

KW Fruitdale Equity, LLC

KW Fruitdale Executives, LLC

 

 

Glendora Partners

KW James Street, LLC

1KW James Street Manager, LLC

1KW James
Street Executives, LLC

KW Fund I - I Carlsbad,
General Partner LLC

KW Fund I - 1 Carlsbad, LP

KW Fund I - Hegenberger
General Partner LLC

1KW Fund I - Hegenberger LP

1KW Fund I - Fifth and
Madison, LLC

KW Fund I - 900 Fourth LLC

1KW Fund I - 300 California

KW Fund I - Baxter Way LLC (Formely 201
Figueroa)

KW Fund I - One Tech LLC

Kennedy-Wilson Property Services, Inc.

Kennedy-Wilson Property Equity, Inc.

Kennedy-Wilson Property Special Equity, Inc

KWI Property Fund I, LP

KWI Continental Building, General Partner LLC

KWI Briareroft Building, General Partner LLC

KWI Briarcroft Building, LP

KWI
Continental Building, LP

KWI Ashford Westchase Buildings General
Partner LLC

KWT Ashford Westchase Buildings, LP

1KW
Property Fund II LP

Kennedy-Wilson Property Services II, Inc.

Kennedy-Wilson Property Special Equity II, Inc.

Kennedy-Wilson Property Equity II, Inc.

1KW Fund II
Executives LLC

1KW Fund II
Howe CC LP

KW Fund II
Howe CC General Partner LLC

1860 Howe Avenue Corp

1KW Fund II - 1860 Howe LP

1KW Fund II - 1860 Howe General Partner
LLC

KW Fund II Metro Center General Partner

KW Fund II Metro Center LP

KW Fund II - 300 California LLC

KW Fund II -303 North Glenoaks, LLC

1KW Fund II - 333 North Glenoaks, LLC

1KW Fund II - 7060 Hollywood, LLC

1KW Fund IT - Burbank Executive Plaza, LLC

KW Fund II
Executives LLC

1KW Fund II - One Tech LLC

1KW Fund III - 333 North Glenoaks, LLC

 

 

KW Fund III - Burbank Executive Plaza, LLC

KW Fund II- Baxter Way LLC

1KW Fund II- Palm desert LLC

1KW Fund III - 303 North Glenoaks, LLC

1KW Funds - Burbank Executive Plaza LLC

1KW Fund III-Woodstone, LLC

KW Fund III-Woodstone Manager, LLC

1KW Funds - 303 North Glenoaks, LLC

1KW Funds - 333 North Glenoaks, LLC

KW BASGF II Manager LLC

 

 

Schedule 5.8

Litigation

None.

 

 

Schedule  5.11

 

Benefit Plans

 

KENNEDY-WILSON. INC. 1992 INCENTIVE
AND NONSTATUTORY STOCK OPTION PLAN

 

 

Schedule 6.3

Compliance Certificate

[To Be Furnished]

 

 

AMENDED AND RESTATED PROMISSORY NOTE

(Facility
A)

 

	
  June 5, 2008

  	
  Los Angeles,
  California

  	
  $25,000,000

  

 

FOR
VALUE RECEIVED, the sufficiency of which is hereby acknowledged, the
undersigned, KENNEDY-WILSON, INC., a Delaware corporation (“Maker” or “Borrower”),
having a place of business at 9601 Wilshire Boulevard, Suite 220, Beverly
Hills, California 90210, promises to pay to the order of U.S. BANK NATIONAL
ASSOCIATION, a national banking association, having a place of business at 633
West 5th Street, 30th Floor, Los Angeles, California 90071, and EAST-WEST BANK,
a California banking corporation, having a place of business at 135 N. Los
Robles Ave., 2nd Floor, Pasadena, California 91101,
(collectively, “Payees” or “Lenders”), the principal sum of Twenty Five
Million Dollars ($25,000,000), or so much of such sum as may from lime to time
be disbursed and unpaid, together with interest on the unpaid principal amount
of this Note from time to lime outstanding, and all other charges coming due
hereunder, in lawful money of the United States of America, as set forth
herein. This Note amends and restates in its entirety that Promissory Note
(Facility A) in the original principal amount of $25,000,000 dated June 13,
2002, executed by Maker to order of Payees, as amended by that Amendment Number
One to Promissory Notes and Loan Agreement dated December 20, 2002, and
that Amendment Number Two to Promissory Notes dated June 16, 2005.

 

1.                                          Interest;
Payments of Interest and Principal.

 

(a)                               Interest Rate
Options. Interest on each Advance hereunder shall accrue at one of the
following per annum rates selected by the Borrower (“n/a” indicates rate option
is not available): (i) upon notice to the Agent, 0.50% plus the Prime Rate
announced by the Agent from time to lime, as and when such rate changes (a “Prime
Rate Loan”); (ii) upon a minimum of two New York Banking Days’ prior
notice to the Agent, 3.00% plus the 1, 2, 3, 6 or 12 month LIBOR Rate, which
shall be the LIBOR Rate in effect two New York Banking Days prior to
commencement of the Advance (a “LIBOR Rate Loan”) or (iii) (n/a)
upon notice to the Agent, n/a % plus the rate, determined solely by the Agent,
at which the Agent would be able to borrow funds of comparable amounts in the
Money Markets for a 1, 2,3, 6 or 12 month period, adjusted for any reserve
requirement and any subsequent costs arising from a change in government
regulation (a ‘Money Market Rate Loan”). The term ‘Money Markets”
refers to one or more wholesale funding markets available to the Agent,
including negotiable certificates of deposit, commercial paper, Eurodollar
deposits, bank notes, federal funds, interest rate swaps or others. No LIBOR
Rate Loan or Money Market Rate Loan may extend beyond the maturity of this
Note. In any event, if the Loan Period for a LIBOR Rate Loan or Money Market
Rate Loan should happen to extend beyond the maturity of this Note, such loan
must be prepaid at the time this Note matures.

 

In
the event the Borrower does not timely select another interest rate option at
least two New York Banking Days before the end of the Loan Period for a LIBOR
Rate Loan or Money Market Rate Loan, the Agent may at any time after the end of
the Loan

 

 

Period convert the LIBOR Rate Loan or Money Market Rate Loan to a Prime
Rate Loan, but until such conversion, the funds advanced under the LIBOR Rate
Loan or Money Market Rate Loan shall continue to accrue interest at the same
rate as the interest rate in effect for such LIBOR Rate Loan or Money Market
Rate Loan prior to the end of the Loan Period.

 

The
Agent’s internal records of applicable interest rates shall be determinative in
the absence of manifest error. Each LIBOR Rate Loan and each Money Market Rate
Loan shall be in a minimum principal amount of One Hundred Thousand Dollars ($100,000).

 

(b)                              Default
Interest Rate. Upon the occurrence and during the continuation of
an Event of Default, all Obligations shall bear interest on the Daily Balance
at a per annum rate equal to 5.00% above the Prime Rate.

 

(c)                               Payment
of Interest. Interest accruing hereunder shall be due and
payable as specified in the Loan Agreement.

 

(d)                              Principal
Repayment. Principal under this Note shall be repaid in the
amounts, on the dates, and in the manner specified in the Loan Agreement.

 

(e)                               Payment
on Maturity Date. If not previously paid, the entire unpaid
principal amount of this Note, together with all accrued interest, shall be due
and payable on or before July 1, 2011 (the “Maturity Date”).

 

(1)                               Crediting
Payments, Application of Collections. In no event shall any
payment be deemed received until actual receipt by the Agent. Payers may apply
any payments received by Payees on account of this Note in such order as Payees
determine in their sole and absolute discretion, irrespective of any notation,
memorandum, or other communication on or accompanying such payment specifying a
different application of such payment. The receipt of any payments by Payees
from Maker shall be applied provisionally to reduce the Obligations outstanding
under this Note but shall not be considered a payment on account unless such
payment item is a wire transfer of immediately available federal funds and is
made to Agent in accordance with wiring instructions issued by Agent to Maker
or unless and until such payment is honored when presented for payment. Should
any payment to Agent not be honored when presented for payment, then Maker
shall be deemed not to have made such payment, and interest shall be
recalculated accordingly. Anything to the contrary contained herein
notwithstanding, any payment shall be deemed received by Agent only if it is
received by Agent on a Business Day on or before 11:00 a.m. California
time If any payment is received by Agent on a non-Business Day or after 11:00 a.m.
California time on a Business Day, it shall be deemed to have been received by
Agent as of the opening of business on the immediately following Business Day.

 

(g)                              Prepayment. Upon not less
than two (2) business days’ notice to Agent, Maker shall have the right to
prepay amounts owing under this Note in an amount in each case of not less than
One Hundred Thousand Dollars ($100,000), subject to all other

 

 

terms and conditions hereof
and of the Loan Agreement. If a LIBOR Rate Loan is prepaid prior to the end of
the Loan Period for such loan, whether voluntarily or because prepayment is
required due to the Note maturing or due to acceleration of the Note upon
default or otherwise, the Borrower agrees to pay all of the Bank Costs,
expenses and Interest Differential (as determined by the Agent) incurred as a
result of such prepayment.

 

2.                                   Late Charges. If any
installment of principal or interest due under this Note shall be overdue for
longer than ten (10) days, Maker shall pay to Agent a late charge of six (6) cents
for each dollar so overdue; provided, however, that no such late charge shall
be charged on the principal balance outstanding under this Note upon
acceleration or maturity. Maker acknowledges that late payment to Agent will
cause Payees to incur costs they would not have incurred, and to lose
opportunities they would not have lost, if payment had been made timely, the
exact amount of which would be difficult and impracticable to assess. The
parties further agree that proof of actual damages would be costly and
inconvenient. Such costs and damages include, without limitation, processing
and accounting charges, potential costs to be incurred as a result of Payees’
inability to meet their other commitments, and loss of opportunity. The parties
agree that such late charge represents a reasonable sum considering all of the
circumstances existing as of the date of this Note and represents a fair and
reasonable estimate of the costs that Payees will incur by reason of late
payments. Acceptance of any late charge shall not constitute a waiver of the
default with respect to the overdue amount, and shall not prevent Payees from
exercising any of the other rights and remedies available to Payees. All late
charges shall be due and payable immediately without demand.

 

3.                                   Events of Default. Any one or
more of the following events shall constitute an event of default (each, an “Event
of Default”) under this Note:

 

(a)                               If Maker fails
to pay when due and payable, or when declared due and payable, any portion of
Maker’s Obligations (whether of principal, interest (including any interest
which, but for the provisions of the Bankruptcy Code, would have accrued on
such amounts), fees and charges due Payees, reimbursement of Bank Expenses, or
other amounts constituting Obligations);

 

(b)                              If Maker falls
to perform, keep, or observe any term, provision, condition, covenant, or
agreement contained in this Agreement, in any of the Loan Documents, or in any
other present or fixture agreement between Maker and Payees or either of them.

 

(c)                               If there is a
Material Adverse Change;

 

(d)                              If any material
portion of Maker’s properties or assets is attached, seized, subjected to a
writ or distress warrant, or is levied upon, or comes into the possession of
any third Person;

 

(e)                               If an
Insolvency Proceeding is commenced by Maker;

 

 

(f)                                 If an Insolvency
Proceeding is commenced against Maker and any of the following events occur: (a) Maker
consents to the institution of the Insolvency Proceeding against it; (b) the
petition commencing the Insolvency Proceeding is not timely controverted; (c) The
petition commencing the Insolvency Proceeding is not dismissed within forty
five (45) calendar days of the date of the filing thereof; provided. however,
that, during the pendency of such period, Payees and each of them shall be
relieved of theft obligation to extend credit hereunder; (d) an interim
trustee is appointed to take possession of all or a substantial portion of the
properties or assets of, or to operate all or any substantial portion of the
business of, Maker; or (e) an order for relief shall have been issued or
entered therein;

 

(g)                              If Maker is
enjoined, restrained, or in any way prevented by court order from continuing to
conduct all or any material part of its business affairs;

 

(h)                              If a notice of
Lien, levy, or assessment is filed of record with respect to any of Maker’s
properties or assets by the United States Government, or any federal, state,
local, or other Governmental Agency, or if any taxes or debts owing at any time
hereafter to any one or more of such entities becomes a Lien, whether choate or
otherwise, upon any of Maker’s properties or assets and the same is not paid on
the payment due date thereof,

 

(i)                                  If a judgment
or other claim becomes a Lien or encumbrance upon any portion of Maker’s
properties or assets;

 

(j)                                  If there is a
default in any material agreement to which Maker is a party with one or more
third Persons and such default (a) occurs at the final maturity of the
obligations thereunder, or (b) results in a right by such third Person(s),
irrespective of whether exercised, to accelerate the maturity of Maker’s
obligations thereunder;

 

(k)                               If Maker makes
any payment on account of Indebtedness that has been contractually subordinated
in right of payment to the payment of the Obligations, except to the extent
such payment is permitted by the terms of the subordination provisions
applicable to such Indebtedness;

 

(1)                               If any material
misstatement or misrepresentation exists now or hereafter in any warranty,
representation, statement, or report made to Payees by Maker or any officer,
employee, agent, or director of Maker, or if any such warranty or
representation is withdrawn; or.

 

(m)                            If an Event of
Default as defined elsewhere in the Loan Documents shall occur.

 

(n)                                 Notwithstanding anything
contained in this Section 3 to the contrary, Payees shall refrain from
exercising their rights and remedies and an Event of Default

 

 

shall not be deemed to have occurred by
reason of the occurrence of any of the events set forth in subsections (c),
(d), (g), (h), (i), or U) above if, within fifteen (15) calendar days from the
date thereof, the same is released, discharged, dismissed, bonded against or
satisfied.

 

4.                                   Remedies.

 

(i)                                   On the
occurrence and during the continuance of any Event of Default, Payees may, at
their option:

 

(a)                              terminate their
or either of their obligation to disburse any amounts of the loan evidenced by
this Note not yet disbursed;

 

(b)                             collect
interest on the entire unpaid principal amount of this Note from time to time
outstanding at the Default Rate;

 

(c)                              declare all of
Maker’s Obligations under this Note immediately due and payable, without
notice, notice being expressly waived; and

 

(d)                             pursue any and
every others right, remedy, or power available to it under this Note or the
other Loan Documents or at law or in equity.

 

(ii)                                The rights,
remedies, and powers of Payees under and pursuant to this Note are cumulative
and concurrent, and may be pursued singly, successively, or together against
Maker, any endorser, guarantor, surety, accommodation party, if any, or person
liable or who may become liable hereunder, and any security given at any time
to secure the payment of Maker’s obligations, all at Payees’ sole discretion.
Payees may resort to any and every other right, remedy, or power available at
law or in equity without first exhausting the rights and remedies contained in
this Note, in Payees’ sole discretion,

 

(iii) Failure of Payees, for any period
of time or on more than one occasion, to exercise their option to accelerate
the Maturity Date shall not constitute a waiver of the right to exercise such
right at any time during the continued existence of any Event of Default or
with respect to any prior, concurrent, or subsequent Event of Default. Payees
shall not, by any other act or omission, be deemed to waive any of their rights
or remedies under this Note unless such waiver is
contained in a writing signed by Payees, and then only to the extent
specifically set forth in such writing. A waiver in connection with one event
shall not be construed as continuing or as a bar to or waiver of any right or
remedy in connection with any other prior, concurrent, or subsequent event.

 

5. Waivers and Consents. Maker and each
endorser, guarantor, surety, or accommodation party, if any, of this Note, and
each other person liable or who may become liable for any part of the
indebtedness evidenced by this Note, waives presentment for payment, demand,
notice of

 

 

nonpayment, notice of dishonor, protest of any dishonor, notice of
protest and protest of this Note, and all other notices in connection with the
delivery, acceptance, performance, default, or enforcement of the payment of
this Note, and agree that their liability shall be unconditional and without
regard to the liability of any other person and shall not in any manner be
affected by any indulgence, extension of time, renewal, waiver, or modification
granted or consented to by Payees. Maker and each such endorser, guarantor,
surety, accommodation party, if any, and person liable or who may become liable
further consent to every indulgence, extension of time, renewal, waiver, or
modification that may be granted by Payees with respect to the payment or other
provisions of this Note, and to the release of any collateral given to secure
the payment of amounts owing under this Note, with or without substitution, and
agree that additional makers, endorsers, guarantor; sureties, or accommodation
parties, if any, may become parties to this Note without notice to Maker or any
other person and without affecting the liability of Maker or any such other
parties under this Note.

 

6.                                   Miscellaneous.

 

(a)                               Governing
Law; Venue, The laws of the State of California shall govern
all questions with respect to the construction of this Note and the rights and
liabilities Maker, Payees, and all endorsers, guarantor; sureties, and
accommodation parties, if any. Any suit at law or action in equity shall be
brought solely in a Court of competent jurisdiction situated in Los Angeles
County, California.

 

(b)                              Binding
on Successors. This Note shall inure to the benefit of, and shall
be binding upon, the successors and assigns of Maker, Payees, and all
endorsers, guarantors, sureties, and accommodation parties, if any.

 

(c)                               Attorney’s
Fees.

 

(i)                                   Maker shall
reimburse Payees for all reasonable attorneys’ fees, costs, and expenses
incurred by Payees in connection with the enforcement of Payees’ rights under
this Note. The foregoing fees, costs, and expenses include, without limitation,
those related to trial, appellate proceedings, out-of-court negotiations,
workouts, settlements, enforcement of rights under any state or federal
statute, intended or designed to protect or enforce Payees’ rights, including,
without limitation, those involving bankruptcy, insolvency, or other judicial
proceedings of every type, and the fees and expenses of any appraisers,
consultants, and expert witnesses retained or consulted by Payees in connection
with any such proceeding.

 

(ii)                 - Payees shall
be entitled to recover from Maker Payees’ attorneys’ fees, costs, and expenses
incurred in any post3idgment proceedings to collect and enforce the judgment.

 

(d)                              Joint and
Several Obligations; Survival. If Maker at any time
consists of more than one person, all Obligations of Maker shall be joint and
several and shall survive the merger of this Note into any judgment on this
Note.

 

 

(e)                                     Entire
Agreement. This Note is subject to the terms of the Loan
Agreement. This Note, together with the Loan Agreement with which it is
executed, and the other Loan Documents referred to therein, constitutes the
entire agreement and understanding between the parties in respect of the
general subject matter hereof, and supersedes all prior or contemporaneous
agreements, understandings, and communications with respect to such subject
matter, whether oral or written.

 

(f)                                 Severability. If any term
or provision of this Note is finally determined by a Court of competent
jurisdiction to be invalid or unenforceable for any reason, such determination
shall not affect the validity or enforceability of any other term or provision,
or of the same term or provision as applied in a different circumstance, all of
which shall remain in effect except to the extent of such determination.

 

(g)                              Waiver. Waiver by
Payees of any term, covenant, or condition under this Note, shall be effective
or binding on Payees only if made in writing by Agent or Payees and
specifically setting forth the nature and extent of such waiver. No such waiver
shall be implied from any failure or delay by Payees to insist on strict
performance of, or to take action to enforce, any such term, covenant,
condition, or default. A waiver in connection with one event shall not
constitute or be construed as continuing or as a bar to or waiver of any right
or remedy in connection with any other prior, concurrent, or subsequent event.
This Note and all of the terms hereof may be amended only by an instrument in
writing signed by Maker and Payees.

 

(h)                              Construction
of Note. Maker and Payees are all financially
sophisticated parties, and each has had the opportunity to have its attorneys
participate in the negotiation and preparation of this Note. Accordingly, Maker
and Payees shall be deemed for all purposes to have mutually drafted and
prepared this Note and each and every provision thereof and no ambiguity shall
be resolved for or against either party based on which party drafted this Note
or any portion thereof. The masculine, feminine, and neuter genders, and the
singular and plural numbers, shall each include the other(s) when the
context so indicates. All monetary figures expressed in this Note as “$”or “Dollars” refer to Dollars of
the United States of America unless otherwise specified.

 

(i) Defined Terms. All terms which
appear in this Note with initial capital letters are defined as set forth in
this Note and, if not so defined, then as set forth in the Amended and Restated
Loan Agreement of even date herewith (“Loan Agreement”) entered into by
Maker, as “Borrower”, and Payees, as “Banks” or “Lenders”.

 

a)                                   Intent to Limit Charges to Maximum Lawful Rate. In no event
shall the interest rate or rates payable under this Note, plus any other
amounts paid in connection herewith, exceed the highest rate permissible under
any law that a court of competent jurisdiction shall, in a final determination,
deem applicable. Maker and Payees, in executing and delivering this Note,
intend legally to agree upon the rate or rates of interest and manner of
payment stated within it; provided, however, that, anything
contained herein to the contrary notwithstanding, if said rate or rates of
interest or manner of payment exceeds the maximum allowable under applicable
law, then, ipso facto as of the date of this Note, Maker is and shall be liable
only for the payment of such maximum as allowed by law, and payment received
from Maker in excess of such legal maximum, 

 

 

whenever received, shall be
applied to reduce the principal balance of the Obligations to the extent of
such excess.

 

7. Choice of Law and Venue; JURY
TRIAL WAlVER. THE VALIDITY OF THIS NOTE AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE
CONTRARY IN ANOTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION,
AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER
OR THEREUNDER OR RELATE]) HERETO OR THERETO
SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS NOTE AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND
FEDERAL COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA
OR, AT THE SOLE OPTION OF PAYEES, IN ANY OTHER COURT IN WHICH PAYEES SHALL
INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER
JURISDICTION OVER THE MATTER IN CONTROVERSY.
EACH OF MAKER AND PAYEES WAIVES
TO THE EXTENT PERMH17ED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS OR TO
OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 7. MAKER AND PAYTEES
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A WRY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR
ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND
ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH OF MAKER AND PAYEES REPRESENT THAT IT HAS REVIEWED THIS WAIVER
AND EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A
COPY OF THIS NOTE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
BY THE COURT.

 

[SIGNATURE PAGE FOLLOWS]

 

 

	
   

  	
  Maker:

  
	
   

  	
   

  
	
   

  	
  KENNEDY-WILSON,
  INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  William J. McMorrow

  
	
   

  	
   

  	
  Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Freeman Lyle

  
	
   

  	
   

  	
  Executive
  Vice President

  
	
   

  	
   

  	
  Chief
  Executive Officer, Secretary

  

 

 

AMENDED AND RESTATED
PROMISSORY NOTE

(Facility B)

 

	
  June 5, 2008

  	
  Los Angeles, California

  	
  $5,000,000

  

 

FOR
VALUE RECEIVED, the sufficiency of which is hereby acknowledged, the
undersigned, KENNEDY-WILSON, INC., a Delaware corporation (“Maker” or “Borrower”),
having a place of business at 9601 Wilshire Boulevard, Suite 220, Beverly
Hills, California 90210, promises to pay to the order of U.S. BANK NATIONAL
ASSOCIATION, a national banking association, having a place of business at 633
West 5th  Street, 30th
Floor, Los Angeles, California 90071, and EAST-WEST BANK, a California banking
corporation, having a place of business at 135 N. Los Robles Ave., 2nd Floor, Pasadena, California 91101,
(collectively, “Payees” or “Lenders”), the principal sum of Five Million
Dollars ($5,000,000), or so much of such sum as may from lime to time be
disbursed and unpaid, together with interest on the unpaid principal amount of
this Note from time to time outstanding, and all other charges coming due
hereunder, in lawful money of the United States of America, as set forth
herein. This Note amends and restates in its entirety that Promissory Note
(Facility B) in the original amount of $5,000,000 dated June 13, 2002,
executed by Maker to the order of Payees, as amended by that Amendment Number
One to Promissory Notes and Loan Agreement dated December 20, 2002, and
that Amendment Number Two to Promissory Notes dated June 16, 2005.

 

1.                                    Interest;
Payments of Interest and Principal.

 

(a)                               Interest Rate
Options. Interest on each Advance hereunder shall accrue at one of the
following per annum rates selected by the Borrower (“n/a” indicates rate option
is not available): (i) upon notice to the Agent, 0.00% plus the Prime Rate
announced by the Agent from time to time, as and when such rate changes (a “Prime
Rate Loan”); (ii) upon a minimum of two New York Banking Days’ prior
notice to the Agent, 2.50% plus the 1, 2, 3, 6 or 12 month LIBOR Rate, which
shall be the LIBOR Rate in effect two New York Banking Days prior to
commencement of the Advance (a “LIBOR Rate Loan’) or (iii) (n/a) upon
notice to the Bank, n/a % plus the rate, determined solely by the Bank, at
which the Bank would be able to borrow funds of comparable amounts in the Money
Markets for a 1, 2, 3, 6 or 12 month period, adjusted for any reserve
requirement and any subsequent costs arising from a change in government
regulation (a “Money Market Rate Loan”). The term “Money Markets”
refers to one or more wholesale funding markets available to the Bank,
including negotiable certificates of deposit, commercial paper, eurodollar
deposits, bank notes, federal funds, interest rate swaps or others. No LIBOR
Rate Loan or Money Market Rate Loan may extend beyond the maturity of this
Note. In any event, if the Loan Period for a LIBOR Rate Loan or Money Market
Rate Loan should happen to extend beyond the maturity of this Note, such loan
must be prepaid at the lime this Note matures.

 

In
the event the Borrower does not timely select another interest rate option at
least two New York Banking Days before the end of the Loan Period for a LIBOR
Rate Loan or Money Market Rate Loan, the Bank may at any time after the end of
the Loan Period convert the LIBOR Rate Loan or Money Market Rate Loan to a
Prime Rate Loan,

 

 

but until such conversion, the funds advanced under
the LIBOR Rate Loan or Money Market Rate Loan shall continue to accrue interest
at the same rate as the interest rate in effect for suck LIBOR Rate Loan or
Money Market Rate Loan prior to the end of the Loan Period.

 

The Bank’s internal records
of applicable interest rates shall be determinative in the absence of manifest
error. Each LIBOR Rate Loan and each Money Market Rate Loan shall be in a
minimum principal amount of One Hundred Thousand Dollars ($100,000).

 

(b)                              Default
Interest Rate. Upon the occurrence and during the continuation of
an Event of Default, all Obligations shall bear interest on the Daily Balance
at a per annum rate equal to 5.00% above the Reference Rate, Each change in the
Reference Rate shall be effective as of the opening of business on the date
announced as the effective date of any change in the Reference Rate.

 

(c)                               Payment of
Interest. Interest accruing hereunder shall be due and
payable as specified in the Loan Agreement

 

(d)                              Principal
Payment. Principal under this Note shall be repaid in the amounts, on the
dates and in the manner specified in the Loan Agreement.

 

(e)                              Payment on
Maturity Date. If not previously paid, the entire unpaid  principal amount of this Note, together with all
accrued interest, shall be due and payable on or before July 1,2011 (the “Maturity
Date”).

 

(1)                               Crediting
Payments, Application of Collections. In no event shall any
payment be deemed received until actual receipt by the Agent. Payees may apply
any payments received by Payees on account of this Note in such order as Payees
determine in their sole and absolute discretion, irrespective of any notation,
memorandum, or other communication on or accompanying such payment specifying a
different application of such payment. The receipt of any payments by Payees
from Maker shall be applied provisionally to reduce the Obligations outstanding
under this Note but shall not be considered a payment on account unless such
payment item is a wire transfer of immediately available federal funds and is
made to Agent in accordance with wiring instructions issued by Agent to Maker
or unless and until such payment is honored when presented for payment. Should
any payment to Agent not be honored when presented for payment, then Maker
shall be deemed not to have made such payment, and interest shall be
recalculated accordingly. Anything to the contrary contained herein
notwithstanding, any payment shall be deemed received by Agent only if it is
received by Agent on a Business Day on or before 11:00 a.m. California lime.
If any payment is received by Agent on a non-Business Day or after 11:00 a.m.
California time on a Business Day, it shall be deemed to have been received by
Agent as of the opening of business on the immediately following Business Day.

 

 

(g)                              Prepayment. Upon not less than two (2) business days’
notice to Agent, Maker shall have the right to prepay amounts owing under this
Note in an amount in each case of not less than One Hundred Thousand Dollars
($l00,000), subject to all other terms and conditions hereof and of the Loan
Agreement. If a LIBOR Rate Loan is prepaid prior to the end of the Loan Period
for such loan, whether voluntarily or because prepayment is required due to the
Note maturing or due to acceleration of this Note upon default or otherwise,
the Borrower agrees to pay all of the Banks costs, expenses and Interest
Differential (as determined by the Bank) incurred as a result of such
prepayment.

 

2.                                    Late Charges. If any
installment of principal or interest due under this Note shall be overdue for
longer than ten (10) days, Maker shall pay to Agent a late charge of six (6) cents
for each dollar so overdue; provided, however, that no such late charge shall
be charged on the principal balance outstanding under this Note upon
acceleration or maturity. Maker acknowledges that late payment to Agent will
cause Payees to incur costs they would not have incurred, and to lose
opportunities they would not have lost, if payment had been made timely, the
exact amount of which would be difficult and impracticable to assess, The
parties further agree that proof of actual damages would be
costly and inconvenient. Such costs and damages include, without limitation,
processing and accounting charges, potential costs to be incurred as a result
of Payees’ inability to meet their other commitments, and loss of opportunity.
The parties agree that such late charge represents a reasonable
sum considering all of the circumstances existing as of the date of this Note
and represents a fair and reasonable estimate of the costs that Payees will
incur by reason of late payments. Acceptance of any late charge shall not
constitute a waiver of the default with respect to the overdue amount, and
shall not prevent Payees from exercising any of the other rights and remedies
available to Payees. All late charges shall be due and payable immediately
without demand.

 

3.                                    Events of
Default. Any one or more of the following events shall constitute an event of
default (each, an “Event of Default”) under this
Note:

 

(a)                               If Maker fails
to pay when due and payable, or when declared due and payable, any portion of
Maker’ s Obligations (whether of principal, interest (including any interest
which, but for the provisions of the Bankruptcy Code, would have accrued on
such amounts), fees and charges due Payees, reimbursement of Bank Expenses, or
other amounts constituting Obligations);

 

(b)                              If Maker fails to perform, keep, or
observe any term, provision, condition, covenant, or agreement contained in
this Agreement, in any of the Loan Documents, or in any other present or future
agreement between Maker and Payees or either of them,

 

(c)                                If there is a
Material Adverse Change;

 

(d)                              If any material
portion of Maker’s properties or assets is attached, seized, subjected to a
writ or distress warrant, or is levied upon, or comes into the possession of
any third Person;

 

 

(e)                               If an
Insolvency Proceeding is commenced by Maker;

 

(f)                                If an Insolvency Proceeding
is commenced against Maker and any of the following
events occur: (a) Maker consents to the institution of the Insolvency
Proceeding against it; (b) the petition commencing the Insolvency
Proceeding is not  timely
controverted; (c) the petition commencing the Insolvency Proceeding is not
dismissed within forty five (45) calendar days of the date of the filing
thereof; provided, however, that, during the pendency of such period,
Payees and each of them shall be relieved of their obligation to extend credit
hereunder; (d) an interim trustee is appointed to take possession of all
or a substantial portion of the properties or assets of, or to operate all or
any substantial portion of the business of, Maker; or (e) an order for
relief shall have been issued or entered therein;

 

(g)                              If Maker is
enjoined, restrained, or in any way prevented by court order from continuing to
conduct all or any material part of its business affairs;

 

(h)                              If a notice of
Lien, levy, or assessment is filed of record with respect to any of Maker’s
properties or assets by the United States Government, or any federal, state,
local, or other Governmental Agency, or if any taxes or debts owing at any time
hereafter to any one or more of such entities becomes a Lien, whether choate or
otherwise, upon any of Maker’s properties or assets and the same is not paid on
the payment due date thereof;

 

(i)                                  If a judgment
or other claim becomes a Lien or encumbrance upon any portion of Maker’s
properties or assets;

 

j)                                      If there is a
default in any material agreement to which Maker is a party with one or more
third Persons and such default (a) occurs at the final maturity of the
obligations thereunder, or (b) results in a right by such third Person(s),
irrespective of whether exercised, to accelerate the maturity of Maker’s
obligations thereunder;

 

(k)                               If Maker makes
any payment on account of Indebtedness that has been contractually subordinated
in right of payment to the payment of the Obligations, except to the extent
such payment is permitted by the terms of the subordination provisions
applicable to such Indebtedness;

 

(l)                                  If any material
misstatement or misrepresentation exists now or hereafter in any warranty,
representation, statement, or report made to Payees by Maker or any officer,
employee, agent, or director of Maker, or if any such warranty or
representation is withdrawn; or.

 

(m)                            If an Event of Default
as defined elsewhere in the Loan Documents shall occur.

 

 

(n)                                 Notwithstanding
anything contained in this Section 3 to the contrary, Payees shall refrain
from exercising their rights and remedies and an Event of Default shall not be
deemed to have occurred by reason of the occurrence of any of the events set
forth in subsections (c), (d), (g), (h), (i), or j) above if, within fifteen
(15) calendar days from the date thereof, the same is released, discharged,
dismissed, bonded against or satisfied.

 

4.                                       Remedies.

 

i)                                         On the
occurrence and during the continuance of any Event of Default, Payees may, at
their option:

 

(a)                              terminate their or either of their obligation to
disburse any amounts of the loan evidenced by this Note not yet disbursed;

 

(b)                             collect interest on the entire unpaid principal
amount of this Note from time to time outstanding at the Default Rate;

 

(e)                              declare all of
Maker’s Obligations under this Note immediately due and payable, without
notice, notice being expressly waived; and

 

(d)                              pursue any and every others right,
remedy, or power available to it under this Note or the other Loan Documents or
at law or in equity.

 

(ii)                               The rights,
remedies, and powers of Payees under and pursuant to this Note are cumulative
and concurrent, and may be pursued singly, successively, or together against
Maker, any endorser, guarantor, surety, accommodation party, if any, or person
liable or who may become liable hereunder, and any security given at any time
to secure the payment of Maker’s obligations, all at Payees’ sole discretion.
Payees may resort to any and every other right, remedy, or power available at
law or in equity without first exhausting the rights and remedies contained in
this Note, in Payees’ sole discretion.

 

(iii) Failure of Payees, for any period of time or on more than
one occasion, to exercise their option to accelerate the Maturity Date shall
not constitute a waiver of the right to exercise such right at any time during
the continued existence of any Event of Default or with respect to any prior, concurrent, or
subsequent Event of Default. Payees shall not, by any other act or omission, be
deemed to waive any of their rights or remedies under this Note unless such
waiver is contained in a writing signed by Payees, and then only to the extent
specifically set forth in such writing. A waiver in connection with one event
shall not be construed as continuing or as a bar to or waiver of any right or
remedy in connection with any other prior, concurrent, or subsequent event.

 

5.                                    Waivers and Consents. Maker and
each endorser, guarantor, surety, or accommodation party, if any, of this Note,
and each other person liable or who may become

 

 

liable
for any part of the indebtedness evidenced by this Note, waives presentment for
payment, demand, notice of nonpayment, notice of dishonor, protest of any
dishonor, notice of protest and protest of this Note, and all other notices in
connection with the delivery, acceptance, performance, default, or enforcement
of the payment of this Note, and agree that their liability shall be
unconditional and without regard to the liability of any other person and shall
not in any manner be affected by any indulgence, extension of time, renewal,
waiver, or modification granted or consented to by Payees. Maker and each such
endorser, guarantor, surety, accommodation party, if any, and person liable or
who may become liable further consent to every indulgence, extension of time,
renewal, waiver, or modification that may be granted by Payees with respect to
the payment or other provisions of this Note, and to the release of any collateral
given to secure the payment of amounts owing under this Note, with or without
substitution, and agree that additional makers, endorsers, guarantors,
sureties, or accommodation parties, if any, may become parties to this Note
without notice to Maker or any other person and without affecting the liability
of Maker or any such other parties under this Note.

 

6.                                   Miscellaneous.

 

(a)                               Governing
Laws; Venue. The laws of the State of California shall govern
all questions with respect to the construction of this Note and the rights and
liabilities Maker, Payees, and all endorsers, guarantors, sureties, and
accommodation parties, if any. Any suit at law or action in equity shall be
brought solely in a Court of competent jurisdiction situated in Los Angeles
County, California.

 

(b)                              Binding
on Successors. This Note shall inure to the benefit of; and shall
be binding upon, the successors and assigns of Maker, Payees, and all endorsers,  guarantors,
sureties, and accommodation parties, if any.

 

(c)                               Attorney’s
Fees.

 

(i)                                  Maker shall
reimburse Payees for all reasonable attorneys’ fees, costs, and expenses
incurred by Payees in connection with the enforcement of Payees’ rights under
this Note. The foregoing fees, costs, and expenses include, without limitation,
those related to trial, appellate proceedings, out-of-court negotiations,
workouts, settlements, enforcement of rights under any state or federal
statute, intended or designed to protect or enforce Payees’ rights, including,
without limitation, those involving bankruptcy, insolvency, or other judicial
proceedings of every type, and the fees and expenses of any appraisers,
consultants, and expert witnesses retained or consulted by Payees in connection
with any such proceeding.

 

(ii)                               Payees shall be
entitled to recover from Maker Payees’ attorneys’ fees, costs, and expenses
incurred in any post-judgment proceedings to collect and enforce the judgment.

 

 

(d)                              Joint
and Several Obligations; Survival. If Maker at any time
consists of more than one person, all Obligations of Maker shall be joint and
several and shall survive the merger of this Note into any judgment on this
Note.

 

(e)                               Entire
Agreement. This Note is subject to the
terms of the Loan Agreement. This Note, together with the Loan Agreement with
which it is executed, and the other Loan Documents referred to therein,
constitutes the entire agreement and understanding between the parties in
respect of the general subject matter hereof, and supersedes all prior or
contemporaneous agreements, understandings, and communications with respect to
such subject matter, whether oral or written.

 

(f)                                 Severability. If any term
or provision of this Note is finally determined by a Court of competent
jurisdiction to be invalid or unenforceable for any reason, such determination
shall not affect the validity or enforceability of any other term or provision,
or of the same term or provision as applied in a different circumstance, all of
which shall remain in effect except to the extent of such determination.

 

(g)                              Waiver. Waiver by
Payees of any term, covenant, or condition under this Note, shall be effective
or binding on Payees only if made in writing by Agent or Payees and
specifically setting forth the nature and extent of such waiver.. No such
waiver shall be implied from any failure or delay by Payees to insist on strict
performance of, or to take action to enforce, any such term~ covenant,
condition, or default. A waiver in connection with one event shall not constitute
or be construed as continuing or as a bar to or waiver of any right or remedy
in connection with any other prior, concurrent, or subsequent event. This Note
and all of the terms hereof may be amended only by an instrument in writing
signed by Maker and Payees.

 

(h)    Construction of Note.
Maker and Payees are all financially sophisticated parties, and each has had
the opportunity to have its attorneys participate in the negotiation and
preparation of this Note. Accordingly, Maker and Payees shall be deemed for all
purposes to have mutually drafted and prepared this Note and each and every
provision thereof, and no ambiguity shall be resolved for or against either
party based on which party drafted this Note or any portion thereof The
masculine, feminine, and neuter genders, and the singular and plural numbers,
shall each include the other(s) when the context so indicates. All
monetary figures expressed in this Note as “$”
or “Dollars” refer to Dollars of the United States of America unless
otherwise specified.

 

(i)                                  Defined Terms. All terms which
appear in this Note with initial capital letters are defined as set forth in
this Note and, if not so defined, then as set forth in the Amended and Restated
Loan Agreement of even date herewith (“Loan Agreement”) entered into by
Maker, as “Borrower” and Payees as “Banks” or “Lenders”.

 

(j)                                  Intent
to Limit Charges to Maximum Lawful Rate. In no event shall the
interest rate or rates payable under this Note, plus any other amounts paid in
connection herewith, exceed the highest rate permissible under any law that a
court of competent jurisdiction shall, in a final determination, deem
applicable. Maker and Payees, in

 

 

executing and delivering this Note, intend
legally to agree upon the rate or rates of interest and manner of payment
stated within it; provided, however, that, anything
contained herein to the contrary notwithstanding, if said rate or rates of
interest or manner of payment exceeds the maximum allowable under applicable
law, then, ipso facto as of the date of this Note, Maker is and shall be liable
only for the payment of such maximum as allowed by law, and payment received
from Maker in excess of such legal maximum, whenever received, shall be applied
to reduce the principal balance of the Obligations to the extent of such
excess.

 

7.                                   Choice of Law and Venue; JURY TRIAL
WAIVER. THE VALIDITY OF THIS NOTE AND THE OTHER LOAN
DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN
DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF ANDTHEREOF, AND THE RIGHTS OF THE  PARTIES HERETO AND THERETO
WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR

 

RELATED
HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS NOTE AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AN]) LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF  CALIFORNIA OR, AT THE SOLE OPTION OF PAYEES, IN ANY OTHER COURT IN WHICH PAYEES SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS
AND WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH OF MAKER AND PAYEES WAIVES TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT
EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CON VENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 7. MAKER AND PAYEES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. EACH OF MAKER
AND PAYEES REPRESENT THAT IT HAS REVIEWED THIS WAIVER AND EACH
KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS NOTE MAY BE FILED AS A WRITTEN CONSENT
TO A TRIAL BY THE COURT.

 

[SIGNATURE
PAGE FOLLOWS]

 

 

	
   

  	
  Maker:

  
	
   

  	
  KENNEDY-WILSON,
  INC.,

  
	
   

  	
  a
  Delaware corpopration

  
	
   

  	
  By:

  	
  /s/
  William J. McMorrow

  
	
   

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Freeman Lyle

  
	
   

  	
   

  	
  Chief
  Financial Officer, and

  
	
   

  	
   

  	
  Secretary

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