Document:

Exhibit 4.5

REGISTRATION RIGHTS AGREEMENT

 

 

by and among

 

 

Tops Holding Corporation,

Tops Markets, LLC

and the Guarantors party hereto

 

 

and

 

 

Morgan Stanley & Co. Incorporated

as the Representative of the several Initial Purchasers

 

 

Dated as of February 12, 2010

 

 

REGISTRATION RIGHTS
AGREEMENT

 

This Registration Rights Agreement (this “Agreement”)
is made and entered into as of February 12, 2010, by and among Tops
Holding Corporation, a Delaware corporation (the “Company”) and Tops Markets,
LLC, a New York limited liability company (“Tops Markets” and, together with
the Company, the “Issuers”), the Guarantors party hereto (collectively, the “Guarantors”),
and Morgan Stanley & Co. Incorporated (the “Representative”) as the
representative of the several initial purchasers (the “Initial Purchasers”)
listed on Schedule A to the Purchase Agreement (as defined below), each of whom
has agreed to purchase the Issuers’ 10.125% Senior Secured Notes due 2015 (the “Notes”)
which are fully and unconditionally guaranteed by the Guarantors (the “Guarantees”)
pursuant to the Purchase Agreement (as defined below).  The Notes and the Guarantees attached thereto
are herein collectively referred to as the “Securities.”

 

This Agreement is made pursuant to the Purchase
Agreement, dated February 9, 2010 (the “Purchase Agreement”), among the
Issuers, the Guarantors and the Representative on behalf of itself and each of
the other Initial Purchasers (i) for the benefit of the Initial Purchasers
and (ii) for the benefit of the holders from time to time of the Transfer
Restricted Securities, including the Initial Purchasers.  In order to induce the Initial Purchasers to
purchase the Securities, the Issuers have agreed to provide the Initial
Purchasers and the Market Maker (as defined below) the registration rights set
forth in this Agreement.  The execution
and delivery of this Agreement is a condition to the obligations of the Initial
Purchasers set forth in Section 5(f) of the Purchase Agreement.

 

The parties hereby agree as follows:

 

SECTION 1.              Definitions.  As used in this Agreement, the following
capitalized terms shall have the following meanings:

 

Additional Interest: As defined in Section 5
hereof.

 

Additional Notes: has the meaning set forth in the Indenture.

 

Advice:  As defined
in Section 6(c) hereof.

 

Agreement:  As defined
in the preamble hereof.

 

Broker-Dealer:  Any broker or
dealer registered under the Exchange Act.

 

Business Day:  Any day other than a Saturday, Sunday or U.S.
federal holiday or a day on which banking institutions or trust companies
located in New York, New York are authorized or obligated to be closed.

 

Closing Date:  The date of
this Agreement.

 

Commission:  The U.S.
Securities and Exchange Commission.

 

Company:  As defined in
the preamble hereof.

 

 

Consummate:  A registered
Exchange Offer shall be deemed “Consummated” for purposes of this Agreement
upon the occurrence of (i) the filing and effectiveness under the Securities
Act of the Exchange Offer Registration Statement relating to the Exchange
Securities to be issued in the Exchange Offer, (ii) the maintenance of
such Registration Statement continuously effective and the keeping of the
Exchange Offer open for a period not less than the minimum period required
pursuant to Section 3(b) hereof, and (iii) the delivery by the Issuers
to the Registrar under the Indenture of Exchange Securities in the same
aggregate principal amount as the aggregate principal amount of Transfer
Restricted Securities that were tendered by Holders thereof pursuant to the Exchange
Offer.

 

Exchange Act:  The Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

 

Exchange Date: As defined in Section 3 hereof.

 

Exchange Offer:  The
registration by the Issuers under the Securities Act of the Exchange Securities
pursuant to a Registration Statement pursuant to which the Issuers offer the
Holders of all outstanding Transfer Restricted Securities permitted under
applicable law and Commission policy to participate in such offer the
opportunity to exchange all such outstanding Transfer Restricted Securities
held by such Holders for Exchange Securities in an aggregate principal amount
equal to the aggregate principal amount of the Transfer Restricted Securities
tendered in such exchange offer by such Holders.

 

Exchange Offer Registration Statement: 
The Registration Statement relating to the Exchange Offer, including
the related Prospectus.

 

Exchange Securities:  The 10.125%
Senior Secured Notes due 2015, of the same series under the Indenture as the
Notes and the Guarantees attached thereto, to be issued to Holders in exchange
for Transfer Restricted Securities (including, without limitation, Additional
Notes).

 

Existing Securities:  The Issuers’ 10.125% Senior Secured Notes due
2015 issued on October 9, 2009 and the guarantees related thereto.

 

FINRA: Financial Industry Regulatory Authority.

 

Guarantees:  As defined
in the preamble hereof.

 

Guarantors:  As defined
in the preamble hereof.

 

Holders:  As defined in Section 2(b) hereof.

 

Indemnified Holder:  As defined in Section 8(a) hereof.

 

Indenture:  The Indenture,
dated as of October 9, 2009, as supplemented by a Supplemental Indenture
dated as of January 29, 2010 and as further supplemented by a Second Supplemental
Indenture dated as of February 12, 2010, by and among the Issuers, the
Guarantors and U.S. Bank National Association, as trustee (the “Trustee”) and
as collateral agent (the “Collateral 

 

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Agent”), pursuant to which
the Existing Securities were issued and the Securities are to be issued, as
such Indenture is amended or supplemented from time to time in accordance with
the terms thereof.

 

Initial Purchasers:  As defined in
the preamble hereof.

 

Initial Placement:  The issuance
and sale by the Issuers of the Securities to the Initial Purchasers pursuant to
the Purchase Agreement.

 

Issuer Indemnified Party:  As defined in Section 8(b) hereof.

 

Issuers:  As defined in
the preamble hereof.

 

Market Maker shall have the meaning set forth in Annex A hereof.

 

Market Maker’s Information shall have the
meaning set forth in Annex A hereof.

 

Market Making Registration Statement shall mean the registration
statement referred to in Annex A hereof and all amendments and supplements to
any such registration statement, including post-effective amendments, in each
case including the Prospectus contained therein or deemed a part thereof, all
exhibits thereto and any document incorporated by reference therein.

 

Person:  Any individual,
corporation, limited liability company, partnership, joint venture,
association, joint stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.

 

Prospectus:  The prospectus
included in a Registration Statement, as amended or supplemented by any
prospectus supplement and by all other amendments thereto, including
post-effective amendments, and all material incorporated by reference into such
Prospectus.

 

Purchase Agreement:  As defined in
the preamble hereof.

 

Registration Default:  As defined in Section 5
hereof.

 

Registration Statement:  Any
registration statement of the Issuers relating to (a) an offering of
Exchange Securities pursuant to an Exchange Offer or (b) the registration
for resale of Transfer Restricted Securities pursuant to the Shelf Registration
Statement, which is filed pursuant to the provisions of this Agreement,
including, without limitation, the Market Making Registration Statement, in
each case, including the Prospectus included therein, all amendments and
supplements thereto (including post-effective amendments) and all exhibits and
material incorporated by reference therein.

 

Securities:  As defined in
the preamble hereof.

 

Securities Act:  The Securities
Act of 1933, as amended and the rules and regulations promulgated
thereunder.

 

Shelf Filing Deadline:  As defined in Section 4(a) hereof.

 

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Shelf Registration Statement:  As defined in Section 4(a) hereof.

 

Tops Markets:  As defined in
the preamble hereof.

 

Trust Indenture Act:  The Trust
Indenture Act of 1939, as amended and the rules and regulations
promulgated thereunder.

 

Transfer Restricted Securities:  The Securities;
provided that the Securities shall cease
to be Transfer Restricted Securities on the earliest to occur of (i) the
date on which a Registration Statement with respect to such Securities has
become effective under the Securities Act and such Securities have been
exchanged or disposed of pursuant to such Registration Statement or (ii) the
date on which such Securities cease to be outstanding.

 

Underwritten Registration or Underwritten Offering:  A registration in which
securities of the Issuers are sold to an underwriter for reoffering to the
public.

 

SECTION 2.              Securities Subject to this
Agreement.

 

(a)           Transfer Restricted
Securities.  The securities
entitled to the benefits of this Agreement are the Transfer Restricted
Securities.

 

(b)           Holders of Transfer Restricted
Securities.  A Person is
deemed to be a holder of Transfer Restricted Securities (each, a “Holder”)
whenever such Person owns Transfer Restricted Securities.

 

SECTION 3.              Registered Exchange Offer.

 

(a)           Unless the Exchange Offer
shall not be permissible under applicable law or Commission policy (after the
procedures set forth in Section 6(a) hereof have been complied with),
each of the Issuers and the Guarantors shall use their reasonable best efforts
to (i) cause to be filed with the Commission, a Registration Statement
under the Securities Act relating to the Exchange Securities and the Exchange
Offer, (ii) cause such Registration Statement to become effective, (iii) in
connection with the foregoing, (A) file all pre-effective amendments to
such Registration Statement as may be necessary in order to cause such Registration
Statement to become effective, (B) if applicable, file a post-effective
amendment to such Registration Statement pursuant to Rule 430A under the
Securities Act and (C) cause all necessary filings in connection with the
registration and qualification of the Exchange Securities to be made under the
state securities or blue sky laws of such jurisdictions as are necessary to
permit Consummation of the Exchange Offer, and (iv) upon the effectiveness
of such Registration Statement, commence the Exchange Offer.  Each of the Issuers and the Guarantors shall
use their reasonable best efforts to Consummate the Exchange Offer not later
than October 9, 2010 (or, if October 9, 2010 is not a Business Day,
the next succeeding Business Day) (the “Exchange Date”).  The Exchange Offer, if required pursuant to
this Section 3(a) shall be on the appropriate form permitting
registration of the Exchange Securities to be offered in exchange for the
Transfer Restricted Securities and to permit resales of Transfer Restricted Securities
held by Broker-Dealers as contemplated by Section 3(c) hereof.  The Issuers shall use commercially reasonable
efforts to cause all Exchange Securities to have the same CUSIP number.

 

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(b)           If an Exchange Offer
Registration Statement is required to be filed and declared effective pursuant
to Section 3(a) above, the Issuers and the Guarantors shall cause the
Exchange Offer Registration Statement to be effective continuously and shall
keep the Exchange Offer open for a period of not less than the minimum period
required under applicable federal and state securities laws to Consummate the
Exchange Offer; provided, however, that in no
event shall such period be less than 20 Business Days after the date notice of
the Exchange Offer is mailed to the Holders. 
The Issuers shall cause the Exchange Offer to comply with all applicable
federal and state securities laws.  No
securities other than the Exchange Securities shall be included in the Exchange
Offer Registration Statement.  The
Issuers shall use their reasonable best efforts to cause the Exchange Offer to
be Consummated on or before the Exchange Date.

 

(c)           The Issuers shall indicate
in a “Plan of Distribution” section contained in the Prospectus forming a part
of the Exchange Offer Registration Statement that any Broker-Dealer who holds
Transfer Restricted Securities that were acquired for its own account as a
result of market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Issuers), may exchange such
Transfer Restricted Securities pursuant to the Exchange Offer; however, such
Broker-Dealer may be deemed to be an “underwriter” within the meaning of the
Securities Act and must, therefore, deliver a prospectus meeting the
requirements of the Securities Act in connection with any resales of the
Exchange Securities received by such Broker-Dealer in the Exchange Offer, which
prospectus delivery requirement may be satisfied by the delivery by such
Broker-Dealer of the Prospectus contained in the Exchange Offer Registration
Statement.  Such “Plan of Distribution”
section shall also contain all other information with respect to such resales
by Broker-Dealers that the Commission may require in order to permit such
resales pursuant thereto, but such “Plan of Distribution” shall not name any
such Broker-Dealer or disclose the amount of Transfer Restricted Securities
held by any such Broker-Dealer except to the extent required by the Commission
as a result of a change in policy after the date of this Agreement.

 

Each of the Issuers and the Guarantors shall use
their reasonable best efforts to keep the Exchange Offer Registration Statement
continuously effective, supplemented and amended as required by the provisions
of Section 6(c) hereof to the extent necessary to ensure that it is
available for resales of Transfer Restricted Securities acquired by
Broker-Dealers for their own accounts as a result of market-making activities
or other trading activities, and to ensure that it conforms with the requirements
of this Agreement, the Securities Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period
ending on the earlier of (i) 180 days from the date on which the Exchange
Offer Registration Statement is declared effective and (ii) the date on
which a Broker-Dealer is no longer required to deliver a prospectus in
connection with market-making or other trading activities.

 

The Issuers shall provide sufficient copies of the
latest version of such Prospectus to Broker-Dealers promptly upon request at
any time during such 180-day (or shorter as provided in the foregoing sentence)
period in order to facilitate such resales.

 

(d)           The Issuers also hereby
agree to comply with the requirements set forth in Annex A hereof.

 

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SECTION 4.              Shelf Registration.

 

(a)           Shelf Registration.  If (i) the Issuers are
not required to file an Exchange Offer Registration Statement or to consummate
the Exchange Offer solely because the Exchange Offer is not permitted by
applicable law or Commission policy (after the procedures set forth in Section 6(a) hereof
have been complied with), (ii) for any reason the Exchange Offer is not Consummated
by the Exchange Date or (iii) prior to the Exchange Date:  (A) the Initial Purchasers request from
the Issuers with respect to Transfer Restricted Securities not eligible to be exchanged
for Exchange Securities in the Exchange Offer, (B) with respect to any Holder
of Transfer Restricted Securities such Holder notifies the Issuers that (i) such
Holder is prohibited by applicable law or Commission policy from participating
in the Exchange Offer, (ii) such Holder may not resell the Exchange
Securities acquired by it in the Exchange Offer to the public without
delivering a prospectus and that the Prospectus contained in the Exchange Offer
Registration Statement is not appropriate or available for such resales by such
Holder, or (iii) such Holder is a Broker-Dealer and holds Transfer Restricted
Securities acquired directly from the Issuers or one of their affiliates or (C) in
the case of the Initial Purchasers, the Initial Purchasers notify the Issuers
they will not receive Exchange Securities in exchange for Transfer Restricted
Securities constituting any portion of the Initial Purchasers’s unsold
allotment, the Issuers and the Guarantors shall

 

(x)            cause to be filed a shelf registration statement
pursuant to Rule 415 under the Securities Act, which may be an amendment
to the Exchange Offer Registration Statement (in either event, the “Shelf
Registration Statement”) as promptly as practicable (such date being the “Shelf
Filing Deadline”), which Shelf Registration Statement shall provide for resales
of all Transfer Restricted Securities the Holders of which shall have provided
the information required pursuant to Section 4(b) hereof; and

 

(y)           use their reasonable best efforts to cause such
Shelf Registration Statement to be declared effective by the Commission.

 

Each of the Issuers and the Guarantors shall use
their reasonable best efforts to keep such Shelf Registration Statement
continuously effective, supplemented and amended as required by the provisions
of Sections 6(b) and (c) hereof to the extent necessary to ensure
that it is available for resales of Transfer Restricted Securities by the
Holders of such Securities entitled to the benefit of this Section 4(a),
and to ensure that it conforms with the requirements of this Agreement, the
Securities Act and the policies, rules and regulations of the Commission
as announced from time to time, from the date on which the Shelf Registration
Statement is declared effective by the Commission until the expiration of the
two-year period after the Closing Date (or shorter period that will terminate
when all the Transfer Restricted Securities covered by such Shelf Registration
Statement have been sold pursuant to such Shelf Registration Statement; provided that the Issuers may for a period of up to 60 days
in any three-month period, not to exceed 90 days in any calendar year determine
that the Shelf Registration Statement is not usable under certain circumstances
relating to corporate developments, public filings with the Commission and
similar events, and suspend the use of the prospectus that is part of the Shelf
Registration Statement).

 

(b)           Provision by Holders of Certain
Information in Connection with the Shelf Registration Statement.  No Holder of Transfer
Restricted Securities may include any of its Transfer 

 

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Restricted Securities in any Shelf
Registration Statement pursuant to this Agreement unless and until such Holder
furnishes to the Issuers in writing, within 20 Business Days after receipt of a
request therefor, such information as the Issuers may reasonably request for
use in connection with any Shelf Registration Statement or Prospectus or
preliminary Prospectus included therein. 
Each Holder as to which any Shelf Registration Statement is being
effected agrees to furnish promptly to the Issuers all information required to
be disclosed in order to make the information previously furnished to the
Issuers by such Holder not materially misleading.

 

SECTION 5.              Additional Interest.  If (i) the Exchange
Offer has not been Consummated by the Exchange Date, (ii) any Shelf
Registration Statement, if required hereby, has not been declared effective by
the Commission 120 days after any obligation to file a shelf registration
statement arises or (iii) any Registration Statement required by this
Agreement has been declared effective but ceases to be effective at any time at
which it is required to be effective under this Agreement (each such event referred
to in clauses (i) through (iii), a “Registration Default”), the Issuers
hereby agree that the interest rate borne by the Transfer Restricted Securities
shall be increased by 0.25% per annum during the 90-day period immediately
following the occurrence of any Registration Default and shall increase by
0.25% per annum at the end of each subsequent 90-day period (such increase, “Additional
Interest”), but in no event shall such increase exceed 1.00% per annum.  At the earlier of (i) the cure of all
Registration Defaults relating to the particular Transfer Restricted Securities
or (ii) October 9, 2011, the interest rate borne by the relevant Transfer
Restricted Securities will be reduced to the original interest rate borne by
such Transfer Restricted Securities; provided,
however, that, if after any such reduction in interest rate, a
different Registration Default occurs, the interest rate borne by the relevant
Transfer Restricted Securities shall again be increased pursuant to the
foregoing provisions.

 

All obligations of the Issuers and the Guarantors
set forth in the preceding paragraph that are outstanding with respect to any
Transfer Restricted Security at the time such security ceases to be a Transfer
Restricted Security shall survive until such time as all such obligations with
respect to such security shall have been satisfied in full.

 

SECTION 6.              Registration Procedures.

 

(a)           Exchange Offer Registration
Statement.  In connection
with the Exchange Offer, if required pursuant to Section 3(a) hereof,
the Issuers and the Guarantors shall comply with all of the provisions of Section 6(c) hereof,
shall use their reasonable best efforts to effect such exchange to permit the
sale of Transfer Restricted Securities being sold in accordance with the intended
method or methods of distribution thereof, and shall comply with all of the
following provisions:

 

(i)      If in the reasonable opinion
of counsel to the Issuers there is a question as to whether the Exchange Offer
is permitted by applicable law, each of the Issuers and the Guarantors hereby
agree to seek a no-action letter or other favorable decision from the
Commission allowing the Issuers and the Guarantors to Consummate an Exchange
Offer for such Transfer Restricted Securities. 
Each of the Issuers and the Guarantors hereby agree to pursue the
issuance of such a decision to the Commission staff level but shall not be
required to take commercially unreasonable action to effect a change of
Commission policy.  Each of the Issuers
and the Guarantors hereby agree, however, to (A) participate 

 

7

 

in
telephonic conferences with the Commission, (B) deliver to the Commission
staff an analysis prepared by counsel to the Issuers setting forth the legal
bases, if any, upon which such counsel has concluded that such an Exchange
Offer should be permitted and (C) diligently pursue a favorable resolution
by the Commission staff of such submission.

 

(ii)     As a condition to its
participation in the Exchange Offer pursuant to the terms of this Agreement,
each Holder of Transfer Restricted Securities shall furnish, upon the request
of the Issuers, prior to the Consummation thereof, a written representation to
the Issuers (which may be contained in the letter of transmittal contemplated
by the Exchange Offer Registration Statement) to the effect that (A) it is
not an affiliate of the Issuers, (B) it is not engaged in, and does not
intend to engage in, and has no arrangement or understanding with any Person to
participate in, a distribution of the Exchange Securities to be issued in the
Exchange Offer and (C) it is acquiring the Exchange Securities in its
ordinary course of business.  In
addition, all such Holders of Transfer Restricted Securities shall otherwise
cooperate in the Issuers’ preparations for the Exchange Offer.  Each Holder hereby acknowledges and agrees
that any Broker-Dealer and any such Holder using the Exchange Offer to
participate in a distribution of the securities to be acquired in the Exchange
Offer (1) could not under Commission policy as in effect on the date of
this Agreement rely on the position of the Commission enunciated in Morgan
Stanley and Co., Inc. (available June 5, 1991) and Exxon
Capital Holdings Corporation (available May 13, 1988), as interpreted
in the Commission’s letter to Shearman & Sterling dated July 2,
1993, and similar no-action letters (which may include any no-action letter obtained
pursuant to clause (i) above), and (2) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with a secondary resale transaction and that such a secondary resale
transaction should be covered by an effective registration statement containing
the selling security holder information required by Item 507 or 508, as
applicable, of Regulation S-K if the resales are of Exchange Securities obtained
by such Holder in exchange for Transfer Restricted Securities acquired by such
Holder directly from the Issuers.

 

(b)           Shelf Registration
Statement.  If required
pursuant to Section 4, in connection with the Shelf Registration
Statement, each of the Issuers and the Guarantors shall comply with all the
provisions of Section 6(c) hereof and shall use their reasonable best
efforts to effect such registration to permit the sale of the Transfer
Restricted Securities being sold in accordance with the intended method or methods
of distribution thereof, and pursuant thereto each of the Issuers and the
Guarantors will as expeditiously as possible prepare and file with the
Commission a Registration Statement relating to the registration on any
appropriate form under the Securities Act, which form shall be available for
the sale of the Transfer Restricted Securities in accordance with the intended
method or methods of distribution thereof.

 

(c)           General Provisions.  In connection with any
Registration Statement and any Prospectus required by this Agreement to permit
the sale or resale of Transfer Restricted Securities (including, without
limitation, any Registration Statement and the related Prospectus required to
permit resales of Transfer Restricted Securities by Broker-Dealers), each of
the Issuers and the Guarantors shall:

 

8

 

(i)            use their
reasonable best efforts to keep such Registration Statement continuously
effective and provide all requisite financial statements (including, if
required by the Securities Act or any regulation thereunder, financial
statements of the Guarantors) for the period specified in Section 3 or 4
hereof, as applicable; upon the occurrence of any event that would cause any
such Registration Statement or the Prospectus contained therein (A) to
contain a material misstatement or omission or (B) not to be effective and
usable for resale of Transfer Restricted Securities during the period required
by this Agreement, the Issuers shall file promptly an appropriate amendment to
such Registration Statement, in the case of clause (A), correcting any such
misstatement or omission, and, in the case of either clause (A) or (B),
use their reasonable best efforts to cause such amendment to be declared
effective and such Registration Statement and the related Prospectus to become
usable for their intended purpose(s) as soon as practicable thereafter;

 

(ii)           use their
reasonable best efforts to prepare and file with the Commission such amendments
and post-effective amendments to the applicable Registration Statement as may
be necessary to keep the Registration Statement effective for the applicable
period set forth in Section 3 or 4 hereof, as applicable, or such shorter
period as will terminate when all Transfer Restricted Securities covered by
such Registration Statement have been sold; cause the Prospectus to be supplemented
by any required Prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 under the Securities Act, and to comply fully with
the applicable provisions of Rules 424 and 430A under the Securities Act
in a timely manner; and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the intended method
or methods of distribution by the sellers thereof set forth in such
Registration Statement or supplement to the Prospectus;

 

(iii)          advise the
underwriter(s), if any, and selling Holders promptly and, if requested by such
Persons, to confirm such advice in writing, (A) when the Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and, with
respect to any Registration Statement or any post-effective amendment thereto,
when the same has become effective, (B) of any request by the Commission
for amendments to the Registration Statement or amendments or supplements to
the Prospectus or for additional information relating thereto, (C) of the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement under the Securities Act or of the suspension by any
state securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation of any
proceeding for any of the preceding purposes, (D) of the existence of any
fact or the happening of any event that makes any statement of a material fact
made in the Registration Statement, the Prospectus, any amendment or supplement
thereto, or any document incorporated by reference therein untrue, or that
requires the making of any additions to or changes in the Registration
Statement or the Prospectus in order to make the statements therein not misleading.  If at any time the Commission shall issue any
stop order suspending the effectiveness of the Registration Statement, or any
state securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or blue sky laws, each of 

 

9

 

the
Issuers and the Guarantors shall use their reasonable best efforts to obtain
the withdrawal or lifting of such order at the earliest possible time;

 

(iv)          furnish without
charge to the Initial Purchasers, each selling Holder named in any Registration
Statement, and each of the underwriter(s), if any, before filing with the
Commission, copies of any Registration Statement or any Prospectus included
therein or any amendments or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference after the initial
filing of such Registration Statement), which documents will be subject to the
review and comment of such Holders and underwriter(s) in connection with
such sale, if any, for a period of at least five Business Days, and the Issuers
will not file any such Registration Statement or Prospectus or any amendment or
supplement to any such Registration Statement or Prospectus (including all such
documents incorporated by reference) to which the Initial Purchasers of
Transfer Restricted Securities covered by such Registration Statement or the underwriter(s),
if any, shall reasonably object in writing within five Business Days after the
receipt thereof (such objection to be deemed timely made upon confirmation of
telecopy transmission within such period). 
The objection of the Initial Purchasers or underwriters, if any, shall
be deemed to be reasonable if such Registration Statement, amendment, Prospectus
or supplement, as applicable, as proposed to be filed, contains a material misstatement
or omission;

 

(v)           promptly prior
to the filing of any document that is to be incorporated by reference into a
Registration Statement or Prospectus, provide copies of such document to the
Initial Purchasers, each selling Holder named in any Registration Statement,
and to the underwriter(s), if any, make the Issuers’ and the Guarantors’
representatives available for discussion of such document and other customary
due diligence matters, and include such information in such document prior to
the filing thereof as such selling Holders or underwriter(s), if any,
reasonably may request;

 

(vi)          make available
at reasonable times for inspection by the Initial Purchasers, the managing
underwriter(s), if any, participating in any disposition pursuant to such
Registration Statement and any attorney or accountant retained by the Initial
Purchasers or any of the underwriter(s), all financial and other records,
pertinent corporate documents and properties of each of the Issuers and the
Guarantors and cause the Issuers’ and the Guarantors’ officers, directors and
employees to supply all information reasonably requested by any such Holder,
underwriter, attorney or accountant in connection with such Registration
Statement or any post-effective amendment thereto subsequent to the filing
thereof and prior to its effectiveness and to participate in meetings with
investors to the extent requested by the managing underwriter(s), if any;

 

(vii)         if requested by
any selling Holders or the underwriter(s), if any, promptly incorporate in any
Registration Statement or Prospectus, pursuant to a supplement or
post-effective amendment if necessary, such information as such selling Holders
and underwriter(s), if any, may reasonably request to have included therein,
including, without limitation, information relating to the “Plan of
Distribution” of the Transfer Restricted Securities, information with respect
to the principal amount of Transfer Restricted Securities 

 

10

 

being
sold to such underwriter(s), the purchase price being paid therefor and any
other terms of the offering of the Transfer Restricted Securities to be sold in
such offering; and make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after the Issuers are notified
of the matters to be incorporated in such Prospectus supplement or
post-effective amendment;

 

(viii)        cause the
Transfer Restricted Securities covered by the Registration Statement to be rated
with the appropriate rating agencies, if so requested by the Holders of a
majority in aggregate principal amount of securities covered thereby or the
underwriter(s), if any;

 

(ix)           furnish to the
Initial Purchasers, each selling Holder and each of the underwriter(s), if any,
without charge, at least one copy of the Registration Statement, as first filed
with the Commission, and of each amendment thereto, including financial
statements and schedules, all documents incorporated by reference therein and
all exhibits (including exhibits incorporated therein by reference);

 

(x)            deliver to each
selling Holder and each of the underwriter(s), if any, without charge, as many
copies of the Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such Persons reasonably may request; each of
the Issuers and the Guarantors hereby consent to the use of the Prospectus and
any amendment or supplement thereto by each of the selling Holders and each of
the underwriter(s), if any, in connection with the offering and the sale of the
Transfer Restricted Securities covered by the Prospectus or any amendment or
supplement thereto;

 

(xi)           enter into such
agreements (including an underwriting agreement), and make such representations
and warranties, and take all such other actions in connection therewith in
order to expedite or facilitate the disposition of the Transfer Restricted Securities
pursuant to any Registration Statement contemplated by this Agreement, all to
such extent as may be requested by the Initial Purchasers or by any Holder of
Transfer Restricted Securities or underwriter in connection with any sale or
resale pursuant to any Registration Statement contemplated by this Agreement;
and whether or not an underwriting agreement is entered into and whether or not
the registration is an Underwritten Registration, each of the Issuers and the
Guarantors shall:

 

(A)          furnish to the
Initial Purchasers, each selling Holder and each underwriter, if any, in such
substance and scope as they may request and as are customarily made by issuers
to underwriters in primary underwritten offerings, upon the date of the
Consummation of the Exchange Offer or, if applicable, the effectiveness of the
Shelf Registration Statement:

 

(1)           a certificate,
dated the date of Consummation of the Exchange Offer or the date of
effectiveness of the Shelf Registration Statement, as the case may be, signed
by (y) the President or any Vice President and (z) a principal
financial or accounting officer of each of the Issuers and the Guarantors,
confirming, as of the date thereof, the matters set 

 

11

 

forth
in paragraphs (i), (ii) and (iii) of Section 5(e) of the
Purchase Agreement and such other matters as such parties may reasonably
request;

 

(2)           an opinion,
dated the date of Consummation of the Exchange Offer or the date of
effectiveness of the Shelf Registration Statement, as the case may be, of
counsel for the Issuers and the Guarantors, covering the matters set forth in Section 5(c) of
the Purchase Agreement and such other matters as such parties may reasonably
request, and in any event including a statement to the effect that such counsel
has participated in conferences with officers and other representatives of the
Issuers and the Guarantors, representatives of the independent public
accountants for the Issuers and the Guarantors, representatives of the
underwriter(s), if any, and counsel to the underwriter(s), if any, in
connection with the preparation of such Registration Statement and the related
Prospectus and have considered the matters required to be stated therein and
the statements contained therein, although such counsel has not independently
verified the accuracy, completeness or fairness of such statements; and that such
counsel advises that, on the basis of the foregoing, no facts came to such
counsel’s attention that caused such counsel to believe that the applicable
Registration Statement, at the time such Registration Statement or any
post-effective amendment thereto became effective, and, in the case of the
Exchange Offer Registration Statement, as of the date of Consummation,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus contained in such Registration Statement
as of its date and, in the case of the opinion dated the date of Consummation
of the Exchange Offer, as of the date of Consummation, contained an untrue statement
of a material fact or omitted to state a material fact necessary in order to
make the statements therein not misleading. 
Without limiting the foregoing, such counsel may state further that such
counsel assumes no responsibility for, and has not independently verified, the
accuracy, completeness or fairness of the financial statements, notes and
schedules and other financial data included in any Registration Statement
contemplated by this Agreement or the related Prospectus; and

 

(3)           a customary
comfort letter, dated the date of effectiveness of the Shelf Registration
Statement, from the Issuers’ independent accountants, in the customary form and
covering matters of the type customarily requested to be covered in comfort
letters by underwriters in connection with primary underwritten offerings, and
covering or affirming the matters set forth in the comfort letters delivered
pursuant to Section 5(a) of the Purchase Agreement, without
exception;

 

12

 

(B)           set forth in
full or incorporate by reference in the underwriting agreement, if any, the
indemnification provisions and procedures of Section 8 hereof with respect
to all parties to be indemnified pursuant to said Section; and

 

(C)           deliver such
other documents and certificates as may be reasonably requested by such parties
to evidence compliance with Section 6(c)(xi)(A) hereof and with any
customary conditions contained in the underwriting agreement or other agreement
entered into by the Issuers or any of the Guarantors pursuant to this Section 6(c)(xi),
if any.

 

If at any time the representations and
warranties of the Issuers and the Guarantors contemplated in Section 6(c)(xi)(A)(1) hereof
cease to be true and correct, the Issuers or the Guarantors shall so advise the
Initial Purchasers and the underwriters, if any, and each selling Holder
promptly and, if requested by such Persons, shall confirm such advice in writing;

 

(xii)          prior to any
public offering of Transfer Restricted Securities, cooperate with the selling
Holders, the underwriter(s), if any, and their respective counsel in connection
with the registration and qualification of the Transfer Restricted Securities
under the state securities or blue sky laws of such jurisdictions as the
selling Holders or underwriter(s), if any, may request and do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the Shelf
Registration Statement; provided, however,
that none of the Issuers or the Guarantors shall be required to register or
qualify as a foreign corporation where it is not then so qualified or to take
any action that would subject it to the service of process in suits or to
taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not then so subject;

 

(xiii)         shall issue,
upon the request of any Holder of Transfer Restricted Securities covered by the
Shelf Registration Statement, Exchange Securities having an aggregate principal
amount equal to the aggregate principal amount of Transfer Restricted
Securities surrendered to the Issuers by such Holder in exchange therefor or being
sold by such Holder; such Exchange Securities to be registered in the name of
such Holder or in the name of the purchaser(s) of such Securities, as the
case may be; in return, the Transfer Restricted Securities held by such Holder
shall be surrendered to the Issuers for cancellation;

 

(xiv)        cooperate with
the selling Holders and the underwriter(s), if any, to facilitate the timely
preparation and delivery of certificates representing Transfer Restricted
Securities to be sold and not bearing any restrictive legends; and enable such
Transfer Restricted Securities to be in such denominations and registered in
such names as the Holders or the underwriter(s), if any, may request at least
two Business Days prior to any sale of Transfer Restricted Securities made by
such Holders or underwriter(s);

 

(xv)         use their
reasonable best efforts to cause the Transfer Restricted Securities covered by
the Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the seller
or sellers 

 

13

 

thereof
or the underwriter(s), if any, to consummate the disposition of such Transfer Restricted
Securities, subject to the proviso contained in Section 6(c)(xii) hereof;

 

(xvi)        if any fact or
event contemplated by Section 6(c)(iii)(D) hereof shall exist or have
occurred, prepare a supplement or post-effective amendment to the Registration
Statement or related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of Transfer Restricted Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein not misleading;

 

(xvii)       provide a CUSIP
number for all Securities not later than the effective date of the Registration
Statement covering such Securities and provide the Trustee under the Indenture
with printed certificates for such Securities which are in a form eligible for
deposit with the Depository Trust Company and take all other action necessary
to ensure that all such Securities are eligible for deposit with the Depository
Trust Company;

 

(xviii)      cooperate and
assist in any filings required to be made with FINRA and in the performance of
any due diligence investigation by any underwriter (including any “qualified
independent underwriter”) that is required to be retained in accordance with
the rules and regulations of FINRA;

 

(xix)         otherwise use
their reasonable best efforts to comply with all applicable rules and
regulations of the Commission, and make generally available to their security
holders, as soon as practicable, a consolidated earnings statement meeting the
requirements of Rule 158 of the Securities Act (which need not be audited)
for the twelve-month period (A) commencing at the end of any fiscal
quarter in which Transfer Restricted Securities are sold to underwriters in a
firm commitment or best efforts Underwritten Offering or (B) if not sold
to underwriters in such an offering, beginning with the first month of the
Issuers’ first fiscal quarter commencing after the effective date of the
Registration Statement;

 

(xx)          cause the
Indenture to be qualified under the Trust Indenture Act not later than the
effective date of the first Registration Statement required by this Agreement,
and, in connection therewith, cooperate with the Trustee and the Holders of
Securities to effect such changes to the Indenture as may be required for such
Indenture to be so qualified in accordance with the terms of the Trust
Indenture Act; and to execute and use their reasonable best efforts to cause
the Trustee to execute, all documents that may be required to effect such
changes and all other forms and documents required to be filed with the Commission
to enable such Indenture to be so qualified in a timely manner;

 

(xxi)         cause all
Securities covered by the Registration Statement to be listed on each
securities exchange or automated quotation system on which similar securities
issued by the Issuers are then listed if requested by the Holders of a majority
in aggregate principal amount of Securities or the managing underwriter(s), if
any; and

 

14

 

(xxii)        provide
promptly to each Holder upon request each document filed with the Commission
pursuant to the requirements of Section 13 and Section 15 of the
Exchange Act.

 

Each Holder agrees by acquisition of a Transfer
Restricted Security that, upon receipt of any notice from the Issuers of the
existence of any fact of the kind described in Section 6(c)(iii)(D) hereof,
such Holder will forthwith discontinue disposition of Transfer Restricted Securities
pursuant to the applicable Registration Statement until such Holder’s receipt
of the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xvi)
hereof, or until it is advised in writing (the “Advice”) by the Issuers that
the use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated by reference in the
Prospectus.  If so directed by the
Issuers, each Holder will deliver to the Issuers (at the Issuers’ expense) all
copies, other than permanent file copies then in such Holder’s possession, of
the Prospectus covering such Transfer Restricted Securities that was current at
the time of receipt of such notice.  In
the event the Issuers shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4
hereof, as applicable, shall be extended by the number of days during the
period from and including the date of the giving of such notice pursuant to Section 6(c)(iii)(D) hereof
to and including the date when each selling Holder covered by such Registration
Statement shall have received the copies of the supplemented or amended Prospectus
contemplated by Section 6(c)(xvi) hereof or shall have received the
Advice; provided, however, that
no such extension shall be taken into account in determining whether Additional
Interest is due pursuant to Section 5 hereof or the amount of such
Additional Interest, it being agreed that the Issuers’ option to suspend use of
a Registration Statement pursuant to this paragraph shall be treated as a
Registration Default for purposes of Section 5 hereof.

 

SECTION 7.              Registration Expenses.

 

(a)           All expenses incident to the
Issuers’ and the Guarantors’ performance of or compliance with this Agreement
will be borne by the Issuers and the Guarantors, jointly and severally,
regardless of whether a Registration Statement becomes effective, including,
without limitation: (i) all registration and filing fees and expenses
(including filings made by the Initial Purchasers or Holder with FINRA (and, if
applicable, the fees and expenses of any “qualified independent underwriter”
and its counsel that may be required by the rules and regulations of
FINRA)); (ii) all fees and expenses of compliance with federal securities
and state securities or blue sky laws; (iii) all expenses of printing
(including printing certificates for the Exchange Securities to be issued in
the Exchange Offer and printing of Prospectuses), messenger and delivery
services and telephone; (iv) all fees and disbursements of counsel for the
Issuers, the Guarantors and, subject to Section 7(b) hereof, the
Holders of Transfer Restricted Securities; (v) all application and filing
fees, if applicable, in connection with listing the Exchange Securities on a
securities exchange or automated quotation system pursuant to the requirements
thereof; (vi) all reasonable fees and disbursements of counsel for the
Market Maker; and (vi) all fees and disbursements of independent certified
public accountants of the Issuers and the Guarantors (including the expenses of
any special audit and comfort letters required by or incident to such performance).

 

15

 

Each of the Issuers and the Guarantors will, in any
event, bear their internal expenses (including, without limitation, all
salaries and expenses of their officers and employees performing legal or
accounting duties), the expenses of any annual audit and the fees and expenses
of any Person, including special experts, retained by the Issuers or the
Guarantors.

 

(b)           In connection with any
Registration Statement required by this Agreement (including, without
limitation, the Exchange Offer Registration Statement and the Shelf Registration
Statement), the Issuers and the Guarantors, jointly and severally, will
reimburse the Initial Purchasers and the Holders of Transfer Restricted
Securities being tendered in the Exchange Offer and/or resold pursuant to the “Plan
of Distribution” contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel, who shall be
Cahill Gordon & Reindel LLP or such other counsel as may be chosen by
the Holders of a majority in principal amount of the Transfer Restricted
Securities for whose benefit such Registration Statement is being prepared.

 

SECTION 8.              Indemnification.

 

(a)           The Issuers and the
Guarantors, jointly and severally, agree to indemnify and hold harmless (A) (i) each
Holder, (ii) each Person, if any, who controls (within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act) any Holder (any
of the Persons referred to in this clause (ii) being hereinafter referred
to as a “controlling person”), (iii) the respective officers, directors,
partners, employees, representatives and agents of any Holder or any
controlling person and (iv) the Market Maker (any Person referred to in
clause (i), (ii), (iii) or (iv) may hereinafter be referred to as an “Indemnified
Holder”), to the fullest extent lawful, from and against any and all losses,
claims, damages, liabilities, judgments, actions and expenses (including,
without limitation, and as incurred, reimbursement of all reasonable costs of
investigating, preparing, pursuing, settling, compromising, paying or defending
any claim or action, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, including the reasonable fees and
expenses of counsel to any Indemnified Holder), joint or several, directly or
indirectly caused by, related to, based upon, arising out of or in connection
with any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or Prospectus (or any amendment or
supplement thereto), or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or expenses are caused by an untrue statement or omission or
alleged untrue statement or omission that is made in reliance upon and in
conformity with information relating to any of the Holders or the Market Maker
furnished in writing to the Issuers by any of the Holders or the Market Maker
expressly for use therein and (B) the Market Maker from and against any
and all losses, claims, damages and liabilities (including, without limitation,
legal fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted, as such fees and expenses are incurred), that
arise out of, or are based upon, any breach by the Issuers of their representations,
warranties and agreements contained in Annex A hereof.  This indemnity agreement shall be in addition
to any liability which the Issuers or any of the Guarantors may otherwise have.

 

16

 

In case any action or proceeding (including any
governmental or regulatory investigation or proceeding) shall be brought or
asserted against any of the Indemnified Holders with respect to which indemnity
may be sought against the Issuers or the Guarantors, such Indemnified Holder
(or the Indemnified Holder controlled by such controlling person) shall
promptly notify the Issuers and the Guarantors in writing; provided,
however, that the failure to give such notice shall not relieve any
of the Issuers or the Guarantors of their obligations pursuant to this Agreement.  Such Indemnified Holder shall have the right
to employ its own counsel in any such action and the fees and expenses of such
counsel shall be paid, as incurred, by the Issuers and the Guarantors
(regardless of whether it is ultimately determined that an Indemnified Holder
is not entitled to indemnification hereunder). 
The Issuers and the Guarantors shall not, in connection with any one
such action or proceeding or separate but substantially similar or related actions
or proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) at any time
for such Indemnified Holders.  Any such
firm (x) for the Market Maker, its affiliates, directors and officers and
any control Persons of the Market Maker shall be designated by the
Representative and (y) for each Holder, any controlling person or the respective
officers, directors, partners, employees, representatives and agents of any
Holder or any controlling person shall be designated by the Holders.  The Issuers and the Guarantors shall be liable
for any settlement of any such action or proceeding effected with the Issuers’
and the Guarantors’ prior written consent, which consent shall not be withheld
unreasonably, and each of the Issuers and the Guarantors agrees to indemnify
and hold harmless any Indemnified Holder from and against any loss, claim,
damage, liability or expense by reason of any settlement of any action effected
with the written consent of the Issuers and the Guarantors.  The Issuers and the Guarantors shall not,
without the prior written consent of each Indemnified Holder, settle or
compromise or consent to the entry of judgment in or otherwise seek to
terminate any pending or threatened action, claim, litigation or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not any Indemnified Holder is a party thereto), unless such
settlement, compromise, consent or termination includes an unconditional
release of each Indemnified Holder from all liability arising out of such
action, claim, litigation or proceeding.

 

(b)           Each Holder of Transfer
Restricted Securities agrees, severally and not jointly, to indemnify and hold
harmless (i) the Issuers, the Guarantors and their respective directors,
officers of each of the Issuers and the Guarantors who sign a Registration
Statement, and (ii) any Person controlling (within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act) the Issuers or
any of the Guarantors, and the respective officers, directors, partners,
employees, representatives and agents of each such Person (any Person referred
to in clause (i) or (ii) may hereinafter be referred to as an “Issuer
Indemnified Party”), to the same extent as the foregoing indemnity from the
Issuers and the Guarantors to each of the Indemnified Holders, but only with
respect to claims and actions based on information relating to such Holder furnished
in writing by such Holder expressly for use in any Registration Statement.  In case any action or proceeding shall be
brought against an Issuer Indemnified Party in respect of which indemnity may
be sought against a Holder of Transfer Restricted Securities, such Holder shall
have the rights and duties given the Issuers and the Guarantors, and the Issuer
Indemnified Party shall have the rights and duties given to each Holder by the
preceding paragraph.

 

17

 

(c)           The Market Maker Agrees to
indemnify and hold harmless (i) the Issuers, the Guarantors and their
respective directors, officers of each of the Issuers and the Guarantors who
sign the Market Making Registration Statement, and (ii) any Person
controlling (within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) the Issuers or any of the Guarantors, and the respective
officers, directors, partners, employees, representatives and agents of each
such Person (any Person referred to in clause (i) or (ii) may
hereinafter be referred to as an “Issuer Indemnified Party”), to the same
extent as the foregoing indemnity from the Issuers and the Guarantors to each
of the Indemnified Holders, but only with respect to claims and actions based
on information relating to the Market Maker furnished in writing by the Market
Maker expressly for use in the Market Making Registration Statement and any
Prospectus.  In case any action or
proceeding shall be brought against an Issuer Indemnified Party in respect of
which indemnity may be sought against the Market Maker, the Market Maker shall
have the rights and duties given the Issuers and the Guarantors, and the Issuer
Indemnified Party shall have the rights and duties given to the Market Maker
under Section 8(a) hereof.

 

(d)           If the indemnification
provided for in this Section 8 is unavailable to an indemnified party
under Section 8(a) (b) or (c) hereof (other than by reason
of exceptions provided in those Sections) in respect of any losses, claims,
damages, liabilities, judgments, actions or expenses referred to therein, then
each applicable indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities, judgments or expenses
in such proportion as is appropriate to reflect the relative benefits received
by the Issuers and the Guarantors, on the one hand, and the Holders or the
Market Maker, on the other hand, from the Initial Placement (which in the case
of the Issuers and the Guarantors shall be deemed to be equal to the total
gross proceeds to the Issuers and the Guarantors from the Initial Placement),
the amount of Additional Interest which did not become payable as a result of
the filing of the Registration Statement resulting in such losses, claims,
damages, liabilities, judgments, actions or expenses, and such Registration
Statement, or if such allocation is not permitted by applicable law, the
relative fault of the Issuers and the Guarantors, on the one hand, and the
Holders or the Market Maker, on the other hand, in connection with the statements
or omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations.  The relative fault of the Issuers and the
Guarantors on the one hand and of the Holders or the Market Maker on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Issuers or any
of the Guarantors, on the one hand, or the Holders or the Market Maker, on the
other hand, and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.  The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in the
second paragraph of Section 8(a) hereof, any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim.

 

The Issuers, the Guarantors, each Holder of Transfer
Restricted Securities and the Market Maker agree that it would not be just and
equitable if contribution pursuant to this Section 8(c) were
determined by pro rata allocation (even if the Holders were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations 

 

18

 

referred to in the
immediately preceding paragraph.  The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or expenses referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim.  Notwithstanding the provisions of
this Section 8, none of the Holders (and its related Indemnified Holders)
or the Market Maker shall be required to contribute, in the aggregate, any
amount in excess of the amount by which the total discount with respect to the
Securities received by such Holder or the Securities received by the Market
Maker exceeds the amount of any damages which such Holder or the Market Maker
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. 
No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.  The Holders’ obligations to contribute
pursuant to this Section 8(c) are several in proportion to the
respective principal amount of Securities held by each of the Holders hereunder
and not joint.

 

SECTION 9.              Rule 144A.  Each
of the Issuers and the Guarantors hereby agrees with each Holder, for so
long as any Transfer Restricted Securities remain outstanding, to make available
to any Holder or beneficial owner of Transfer Restricted Securities in connection
with any sale thereof and any prospective purchaser of such Transfer Restricted
Securities from such Holder or beneficial owner, the information required by Rule 144A(d)(4) under
the Securities Act in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144A under the Securities Act.

 

SECTION 10.            Participation in Underwritten
Registrations.  No Holder may
participate in any Underwritten Registration hereunder unless such Holder (a) agrees
to sell such Holder’s Transfer Restricted Securities on the basis provided in
any underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents required under the terms of such
underwriting arrangements.

 

SECTION 11.            Selection of Underwriters.  The Holders of Transfer
Restricted Securities covered by the Shelf Registration Statement who desire to
do so may sell such Transfer Restricted Securities in an Underwritten
Offering.  In any such Underwritten
Offering, the investment banker(s) and managing underwriter(s) that
will administer such offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided, however, that such
investment banker(s) and managing underwriter(s) must be reasonably
satisfactory to the Issuers.

 

19

 

SECTION 12.            Miscellaneous.

 

(a)           Remedies.  Each
of the Issuers and the Guarantors hereby agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of the provisions of this Agreement and hereby agree to waive the defense in
any action for specific performance that a remedy at law would be adequate.

 

(b)           No Inconsistent Agreements.  Each
of the Issuers and the Guarantors will not on or after the date of this
Agreement enter into any agreement with respect to their securities that is
inconsistent with the rights granted to the Holders or the Market Maker in this
Agreement or otherwise conflicts with the provisions hereof.  Neither the Issuers nor any of the Guarantors
has previously entered into any agreement granting any registration rights with
respect to their securities to any Person that would conflict with this
Agreement.  The rights granted to the
Holders and the Market Maker hereunder do not in any way conflict with and are
not inconsistent with the rights granted to the holders of the Issuers’ or any
of the Guarantors’ securities under any agreement in effect on the date hereof.

 

(c)           Adjustments Affecting the
Securities.  The Issuers
will not take any action, or permit any change to occur, with respect to the
Securities that would materially and adversely affect the ability of the
Holders to Consummate any Exchange Offer.

 

(d)           Amendments and Waivers.  The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to or departures from the provisions hereof may not be given unless the Issuers
have (i) in the case of Section 5 hereof and this Section 12(d)(i) obtained
the written consent of Holders of all outstanding Transfer Restricted
Securities, (ii) in the case of any of the provisions of (x) Annex A
hereof or (y) Section 8 hereof as they relate to the Market Maker,
the written consent of the Market Maker and (iii) in the case of all other
provisions hereof (including Section 8 hereof as it relates to the Holders),
obtained the written consent of Holders of a majority of the outstanding
principal amount of Transfer Restricted Securities (excluding any Transfer
Restricted Securities held by the Issuers or their Affiliates).  Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose securities are being tendered pursuant to the Exchange
Offer and that does not affect directly or indirectly the rights of other Holders
whose securities are not being tendered pursuant to such Exchange Offer may be
given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities being tendered or registered; provided, however, that, with respect to
any matter that directly or indirectly affects the rights of the Initial
Purchasers or the Market Maker hereunder, the Issuers shall obtain the written
consent of the Initial Purchasers and the Market Maker with respect to which
such amendment, qualification, supplement, waiver, consent or departure is to
be effective.

 

(e)           Notices.  All notices and other
communications provided for or permitted hereunder shall be made in writing by
hand-delivery, first-class mail (registered or certified, return receipt
requested), telex, telecopier, or air courier guaranteeing overnight delivery:

 

(i)            if to a Holder,
at the address set forth on the records of the Registrar under the Indenture,
with a copy to the Registrar under the Indenture; and

 

20

 

(ii)           If to the Issuers or the
Guarantors:

Tops Holding Corporation

P.O. Box 1027

Buffalo, New York  14240-1027

Facsimile:  (716) 635-5102

Attention:  Kevin Darrington

 

with a copy to:

 

Shearman &
Sterling LLP

599 Lexington Avenue

New York, New York 10022

Facsimile:  (212) 848-7179

Attention:  Michael Benjamin, Esq.

 

(iii)          If to the Market Maker:

 

Morgan Stanley &
Co. Incorporated

1585 Broadway

New York, New York  10036

Facsimile:  (212) 761-0260

Attention:  Legal Department

 

All such notices and communications shall be deemed
to have been duly given:  at the time delivered
by hand, if personally delivered; five Business Days after being deposited in
the mail, postage prepaid, if mailed; when answered back, if telexed; when
receipt acknowledged, if telecopied; and on the next Business Day, if timely
delivered to an air courier guaranteeing overnight delivery.

 

Copies of all such notices, demands or other
communications shall be concurrently delivered by the Person giving the same to
the Trustee at the address specified in the Indenture.

 

(f)            Successors and Assigns.  This Agreement shall inure
to the benefit of and be binding upon the successors and assigns of each of the
parties, including, without limitation, and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; provided, however, that this Agreement shall not inure to
the benefit of or be binding upon a successor or assign of a Holder unless and
to the extent such successor or assign acquired Transfer Restricted Securities
from such Holder.

 

(g)           Counterparts.  This Agreement may be
executed in any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.

 

21

 

(h)           Headings.  The headings in this
Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.

 

(i)            Governing Law.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE CONFLICTS OF LAW RULES THEREOF.

 

(j)            Severability.  In the event that any one or
more of the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.

 

(k)           Entire Agreement.  This Agreement is intended
by the parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein.  There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Issuers with respect to
the Transfer Restricted Securities.  This
Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.

 

22

 

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

 

	
   

  	
  TOPS HOLDING CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Kanter

  
	
   

  	
   

  	
  Name:

  	
  Eric Kanter

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TOPS
  MARKETS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frank Curci

  
	
   

  	
   

  	
  Name:

  	
  Frank Curci

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TOPS
  PT, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frank Curci

  
	
   

  	
   

  	
  Name:

  	
  Frank Curci

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TOPS
  GIFT CARD COMPANY, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frank Curci

  
	
   

  	
   

  	
  Name:

  	
  Frank Curci

  
	
   

  	
   

  	
  Title:

  	
  President

  

 

23

 

The foregoing Registration Rights Agreement is
hereby confirmed and accepted as of the date first above written:

 

MORGAN
STANLEY & CO. INCORPORATED

Acting
on behalf of itself 

and as the Representative of

the several Initial Purchasers

 

	
  By:

  	
  Morgan
  Stanley & Co. Incorporated

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Paul B. Franks

  	
   

  
	
   

  	
   

  	
  Managing
  Director

  	
   

  

 

 

Annex A

 

Market Making.

 

(a)           For so long as any of the
Securities or Exchange Securities are outstanding and the Representative (in
such capacity, the “Market Maker”) or any of its affiliates (as defined in the rules and
regulations of the Commission) owns any equity securities of the Issuers, the
Guarantors or any of their affiliates and proposes to make a market in the
Securities or Exchange Securities as part of its business in the ordinary
course, the following provisions shall apply for the sole benefit of the Market
Maker:

 

(i)            The Issuers and
the Guarantors shall (A) on the date that the Exchange Offer Registration
Statement or, if required hereby, the Shelf Registration Statement is filed
with the Commission, file a registration statement (the “Market Making
Registration Statement”) (which may be the Exchange Offer Registration
Statement or the Shelf Registration Statement if permitted by the rules and
regulations of the Commission) and use their reasonable best efforts to cause
such Market Making Registration Statement to be declared effective by the
Commission on or prior to the consummation of the Exchange Offer or the initial
effective date of the Shelf Registration Statement, as applicable; (B) periodically
amend such Market Making Registration Statement so that the information
contained therein complies with the requirements of Section 10(a) under
the Securities Act; (C) amend the Market Making Registration Statement or
amend or supplement the related Prospectus when necessary to reflect any
material changes in the information provided therein; and (D) amend the
Market Making Registration Statement when required to do so in order to comply
with Section 10(a)(3) of the Securities Act; provided,
however, that (1) prior to filing
the Market Making Registration Statement, any amendment thereto or any
amendment or supplement to the related Prospectus, the Issuers will furnish to
the Market Maker copies of all such documents proposed to be filed, which
documents will be subject to the review of the Market Maker and its counsel and
(2) the Issuers and the Guarantors will not file the Market Making
Registration Statement, any amendment thereto or any amendment or supplement to
the related Prospectus to which the Market Maker and its counsel shall
reasonably object unless the Issuers are advised by counsel that such Market
Making Registration Statement or any such amendment or supplement is required
to be filed under applicable securities laws and the Issuers will provide the
Market Maker and its counsel with copies of the Market Making Registration
Statement and each amendment and supplement filed.

 

(ii)           The Issuers
shall notify the Market Maker and, if requested by the Market Maker, confirm
such advice in writing, (A) when any Market Making Registration Statement,
any post-effective amendment to the Market Making Registration Statement or any
amendment or supplement to the related Prospectus has been filed, and, with respect
to any Market Making Registration Statement or any post-effective amendment,
when the same has become effective; (B) of any request by the Commission
for any post-effective amendment to the Market Making Registration Statement,
any supplement or amendment to the related Prospectus or for additional
information; (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Market Making 

 

 

Registration
Statement or the initiation of any proceedings for that purpose, including the
receipt by the Issuers of any notice of objection of the Commission to the use
of the Market Making Registration Statement or any post-effective amendment
thereto pursuant to Rule 401(g)(2) under the Securities Act; (D) of
the receipt by the Issuers of any notification with respect to the suspension
of the qualification of the Securities or Exchange Securities for sale in any
jurisdiction or the initiation or threatening of any proceedings for such
purpose; and (E) of the happening of any material event that makes any
statement made in the Market Making Registration Statement, the related
Prospectus or any amendment or supplement thereto untrue or that requires the
making of any changes in the Market Making Registration Statement, such
Prospectus or any amendment or supplement thereto, in order to make the statements
therein not misleading.

 

(iii)          If any event
contemplated by (a)(ii)(B) through (E) of this Annex A occurs during
the period for which the Issuers and the Guarantors are required to maintain an
effective Market Making Registration Statement, the Issuers and the Guarantors
shall, subject to (a)(i) of this Annex A, promptly prepare and file with
the Commission a post-effective amendment to the Market Making Registration
Statement or an amendment or supplement to the related Prospectus or file any
other required document so that the Prospectus will not include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.

 

(iv)          In the event of
the issuance of any stop order suspending the effectiveness of the Market
Making Registration Statement, any notice of objection pursuant to Rule 401(g)(2) under
the Securities Act or any order suspending the qualification of the Securities
or Exchange Securities for sale in any jurisdiction, the Issuers and the
Guarantors shall promptly use their reasonable best efforts to obtain the
withdrawal or lifting of such order or the resolution of such objection,
including by filing an amendment to the Market Making Registration Statement on
the proper form as necessary.

 

(v)           The Issuers
shall furnish to the Market Maker, without charge, (i) at least one
conformed copy of the Market Making Registration Statement and any
post-effective amendment thereto; and (ii) as many copies of the related
Prospectus and any amendment or supplement thereto as the Market Maker may reasonably
request.

 

(vi)          The Issuers and
the Guarantors shall consent to the use of the Prospectus contained in the
Market Making Registration Statement or any amendment or supplement thereto by
the Market Maker in connection with its market-making activities.

 

(vii)         Notwithstanding
the foregoing provisions of this Annex A, the Issuers and the Guarantors may
for valid business reasons, including without limitation, a potential material
acquisition, divestiture of assets or other material corporate transaction,
notify the Market Maker in writing that the Market Making Registration
Statement is no longer effective or the Prospectus included therein is no
longer usable for offers and sales of Securities or Exchange Securities; provided that the use of the Market Making Registration
Statement or the Prospectus contained therein shall not be suspended for more
than 60 days (whether or not consecutive) in the aggregate in any 12-month
period.  The Market 

 

2

 

Maker
agrees that upon receipt of any notice from the Issuers pursuant to this clause
(a)(vii), it will discontinue use of the Prospectus contained in the Market
Making Registration Statement until receipt of copies of the supplemented or
amended Prospectus relating thereto or until advised in writing by the Issuers
that the use of the Prospectus contained in the Market Making Registration Statement
may be resumed.

 

(b)           In connection with the
Market Making Registration Statement, the Issuers shall (i) make available
for inspection by a representative of, and counsel acting for, the Market
Maker, at reasonable times and in a reasonable manner, all pertinent financial
and other records, documents and properties of the Issuers and their
subsidiaries and (ii) cause the respective officers, directors and
employees of the Issuers and the Guarantors to supply all relevant information
reasonably requested by such representative or counsel or the Market Maker; provided that if any such information is identified by the
Issuers or any Guarantor as being confidential or proprietary, each Person
receiving such information shall take such actions as are reasonably necessary
to protect the confidentiality of such information to the extent such action is
otherwise not inconsistent with, an impairment of or in derogation of the
rights and interests of any Market Maker.

 

(c)           Prior to the initial
effective date of the Market Making Registration Statement, the Issuers and the
Guarantors shall use their reasonable best efforts to register or qualify the
Securities or Exchange Securities for offer and sale under all applicable state
securities or blue sky laws of such jurisdictions as the Market Maker
reasonably requests in writing, cooperate with the Market Maker in connection
with any filings required to be made with FINRA and do any and all other acts
or things that may be reasonably necessary or advisable to enable the offer and
sale in such jurisdictions of the Securities or Exchange Securities covered by
the Market Making Registration Statement; provided that
the Issuers and the Guarantors shall not be required to (i) qualify as a
foreign corporation or other entity or as a dealer in securities in any
jurisdiction where it would not otherwise be required to so qualify, (ii) file
any general consent to subject itself to service of process in any such
jurisdictions or (iii) subject itself to taxation in any such jurisdiction
if it is not so then subject.

 

(d)           The Issuers and the
Guarantors represent and agree that the Market Making Registration Statement,
any post-effective amendments thereto, any amendments or supplements to the
related Prospectus and any documents filed by them under the Exchange Act will,
when they become effective or are filed with the Commission, as the case may
be, conform in all material respects to the requirements of the Securities Act
and the Exchange Act and the rules and regulations of the Commission
thereunder and will not, as of each effective date of such Market Making
Registration Statement or post-effective amendments and as of the filing date
of any amendments or supplements to such Prospectus or filings under the
Exchange Act, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that no representation or
warranty is made as to information contained in or omitted from the Market
Making Registration Statement or the related Prospectus in reliance upon and in
conformity with written information furnished to the Issuers by the Market
Maker specifically for inclusion therein, which information the parties hereto
agree will be limited to the statements concerning the market-making activities
of the Market Maker to be set 

 

3

 

forth on the cover page and in the “Plan
of Distribution” section of the Prospectus (the “Market Maker’s Information”).

 

(e)           At the time of initial
effectiveness of the Market Making Registration Statement and concurrently with
each time the Market Making Registration Statement shall be amended by
post-effective amendment, including by the filing of an annual report
incorporated by reference into the Market Making Registration Statement, or the
related Prospectus shall be amended or supplemented, the Issuers shall (if
requested by the Market Maker) furnish the Market Maker with a certificate of
its Chief Executive Officer, Chairman of the Board of Directors, President or
Chief Financial Officer to the effect that:

 

(i)            the Market
Making Registration Statement has been declared effective;

 

(ii)           in the case of
an amendment to the Market Making Registration Statement, such amendment has
become effective under the Securities Act as of the date and time specified in
such certificate, if applicable; and in the case of an amendment or supplement
to the Prospectus, such amendment or supplement to the Prospectus was filed
with the Commission pursuant to the subparagraph of Rule 424(b) under
the Securities Act specified in such certificate on the date specified therein;

 

(iii)          to the
knowledge of such officers, no stop order suspending the effectiveness of the
Market Making Registration Statement has been issued, including any notice of
objection of the Commission to the use of the Market Making Registration
Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under
the Securities Act, and no proceeding for that purpose is pending or threatened
by the Commission; and

 

(iv)          such officers
have carefully examined the Market Making Registration Statement and the
Prospectus (and, in the case of an amendment or supplement, such amendment or
supplement) and, to the knowledge of such officer, as of the applicable effective
date of such Market Making Registration Statement, or the date of such amendment
or supplement, as applicable, the Market Making Registration Statement and the
Prospectus, as amended or supplemented, if applicable, did not include any
untrue statement of a material fact and did not omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.

 

(f)            The Issuers and the
Guarantors, on the one hand, and the Market Maker, on the other hand, hereby
agree to indemnify each other, and, if applicable, contribute to the other, in
accordance with Section 8 of this Agreement.

 

(g)           The Issuers and the
Guarantors will comply with the provisions of this Annex A at their own expense
and will reimburse the Market Maker for its expenses associated with this Annex
A (including reasonable fees of counsel for the Market Maker).

 

(h)           The agreements contained in
this Annex A and the representations, warranties and agreements contained in
this Agreement shall survive all offers and sales of the Securities and
Exchange Securities and shall remain in full force and effect, regardless of
any termination or 

 

4

 

cancellation of this Agreement or any investigation
made by or on behalf of any indemnified party.

 

(i)            For purposes of this Annex
A, (i) any reference to the terms “amend”, “amendment” or “supplement”
with respect to the Market Making Registration Statement or the Prospectus
contained therein shall be deemed to refer to and include the filing under the
Exchange Act of any document deemed to be incorporated therein by reference and
(ii) any reference to the terms “Securities” or “Exchange Securities”
shall be deemed to refer to and include any securities issued in exchange for
or with respect to such Securities or Exchange Securities.

 

5Exhibit
4.6

 

EXECUTION
VERSION

 

INTERCREDITOR AGREEMENT

 

This INTERCREDITOR AGREEMENT
(this “Agreement”) is dated as of October 9, 2009, and entered
into by and between Bank of America, N.A., in its capacity as agent under the
ABL Credit Agreement, including its successors and assigns from time to time
(the “Initial ABL Agent”), and U.S. Bank National Association, as
Trustee (the “Trustee”), not in its individual capacity, but solely in
its capacity as trustee and collateral agent under the Indenture and (as the
case may be) as collateral agent for and representative hereunder of the
holders of the Additional Pari Passu Notes Obligations, including in each case
its successors and assigns from time to time (in such capacities, the “Notes
Agent”) and is acknowledged by Tops Holding Corporation, a Delaware
corporation (the “Company”), Tops Markets, LLC, a New York limited
liability company (“Tops Markets” and, together with the Company, the “Issuers”)
and the subsidiaries of the Company listed on the signature pages hereof
(together with any subsidiary that becomes a party hereto after the date
hereof, each a “Company Subsidiary”, and, collectively, the “Company
Subsidiaries”).  Capitalized terms
used in this Agreement have the meanings assigned to them in Article 1.

 

RECITALS

 

The Issuers, the Company Subsidiaries, the ABL
Lenders, and the Initial ABL Agent have entered into that certain senior
secured asset based revolving credit facility, dated as of October 9, 2009
(as amended, restated, supplemented, modified, replaced, or refinanced from
time to time, the “Initial ABL Credit Agreement”);

 

The Issuers have issued, or will issue 10 1/8%
senior secured notes due 2015 in a principal amount of $275,000,000 (the “Initial
Notes”) under an indenture, dated as of October 9, 2009 (as
amended, restated, supplemented, modified, replaced, or refinanced from time to
time, the “Indenture”) among the Issuers, each Company Subsidiary, the
Trustee and Notes Agent;

 

The Issuers may from time to time following the date
hereof issue Additional Pari Passu Notes Obligations to the extent permitted by
the ABL Credit Agreement and the Indenture; and

 

In order to induce the ABL Agent and the ABL Lenders
to consent to the Grantors incurring the Note Obligations and granting the
Liens to the Notes Agent and in order to induce the Notes Agent and the
Noteholders to consent to the Grantors incurring the ABL Obligations and
granting the Liens to the ABL Agent, the ABL Agent, on behalf of the ABL
Lenders, and the Notes Agent, on behalf of the Noteholders, have agreed to the
relative priority of their respective Liens on the Collateral and certain other
rights, priorities and interests as set forth in this Agreement.

 

AGREEMENT

 

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

 

 

I.

DEFINITIONS.

 

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

 

“ABL Agent” means the Initial ABL Agent and
any successor or other agent under any ABL Credit Agreement.

 

“ABL Claimholders” means, at any relevant
time, the holders of ABL Obligations at that time, including, without
limitation, the ABL Lenders and the ABL Agent under the ABL Credit Agreement
and the Bank Product Providers.

 

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

 

“ABL Credit Agreement” means collectively, (a) the
Initial ABL Credit Agreement and (b) any other credit agreement or credit
agreements, one or more debt facilities, and/or commercial paper facilities, in
each case, with banks or other lenders providing for revolving credit loans,
term loans, receivables financing (including through the sale of receivables to
such lenders or to special purpose entities formed to borrow from (or sell such
receivables to) such lenders), letters of credit, bankers’ acceptances, or
other borrowings, that have been incurred to increase, replace (whether upon or
after termination or otherwise), refinance or refund in whole or in part from
time to time the Obligations outstanding under the Initial ABL Credit Agreement
or any other agreement or instrument referred to in this clause, whether or not
such increase, replacement, refinancing or refunding occurs (i) with the
original parties thereto, (ii) on one or more separate occasions or (iii) simultaneously
or not with the termination or repayment of the Initial ABL Credit Agreement or
any other agreement or instrument referred to in this clause, unless such
agreement or instrument expressly provides that it is not intended to be and is
not an ABL Credit Agreement, or such agreement or instrument is not a Permitted
Refinancing Agreement.  Any reference to
the ABL Credit Agreement hereunder shall be deemed a reference to any ABL
Credit Agreement then in existence.

 

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

 

“ABL Lenders” means the “Lenders” under and
as defined in the ABL Credit Agreement or any other Person which extends credit
under the ABL Credit Agreement.

 

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

 

2

 

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

 

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

 

“ABL Priority Collateral” means all now-owned
or hereafter acquired ABL Collateral that constitutes:

 

(a)           all Accounts, other than Accounts which constitute
identifiable Proceeds which arise from the sale, license, assignment or other
disposition of Notes Priority Collateral;

 

(b)           all Chattel Paper, other than Chattel Paper which
constitutes identifiable Proceeds of Notes Priority Collateral;

 

(c)           all (x) Deposit Accounts (other than the Notes
Collateral Account and Notes Trust Monies) and money and all cash, checks,
other negotiable instruments, funds and other evidences of payments held
therein (other than the Notes Collateral Account and Notes Trust Monies), and (y) Securities
Accounts and Security Entitlements and securities credited thereto (other than
the Notes Collateral Account and Notes Trust Monies), and, in each case, all
cash, checks and other property held therein or credited thereto;

 

(d)           all Inventory;

 

(e)           all Prescription Lists;

 

(f)            to the extent relating to, evidencing or governing
any of the items referred to in the preceding clauses (a) through (e) of
this definition, all Documents, General Intangibles (other than Intellectual
Property except as set forth in clause (e) above), Instruments (including
promissory notes) and Commercial Tort Claims;

 

(g)           to the extent relating to any of the items referred
to in the preceding clauses (a) through (f) above, all Supporting Obligations
and Letter of Credit Rights;

 

(h)           all books and records relating to the items referred
to in the preceding clauses (a) through (g) above (including all
books, databases, customer lists, and records, whether tangible or electronic,
which contain any information relating to any of the items referred to in the
preceding clauses (a) through (g)); and

 

3

 

(i)            subject to Section 3.5, all Proceeds of any of
the foregoing, including collateral security and guarantees with respect to any
of the foregoing and all cash, Money, insurance proceeds, Instruments,
Securities, Financial Assets and Deposit Accounts constituting Proceeds of the
foregoing.

 

“ABL Security Documents” means any agreement,
document or instrument pursuant to which a Lien is granted securing any ABL
Obligations or under which rights or remedies with respect to such Liens are
governed.

 

“ABL Standstill Period” has the meaning set
forth in Section 3.2(a)(i).

 

“Access Period” means for each parcel of
Mortgaged Premises, the period, after the commencement of an Enforcement Period
by the ABL Agent, which begins on the earlier of (a) the day on which the
ABL Agent provides the Notes Agent with the written notice of its election to
request access pursuant to Section 3.3(b) and (b) the
fifth Business Day after the Notes Agent provides the ABL Agent with notice
that the Notes Agent (or its agent) has obtained possession or control of such
parcel and ends on the earliest of (i) the 270th day after the date (the “Initial
Access Date”) on which the ABL Agent, or its designee, initially obtains
the ability to take physical possession of, remove, or otherwise control
physical access to, or actually uses, the ABL Collateral located on such Mortgaged
Premises plus such number of days, if any, after the Initial Access Date that
it is stayed or otherwise prohibited by law or court order from exercising
remedies with respect to Collateral located on such Mortgaged Premises, and (ii) the
termination of such Enforcement Period.

 

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

 

“Accounts” means all now present and future “accounts”
(as defined in Article 9 of the UCC).

 

“Additional Pari Passu Notes Agent” means the
Person appointed to act as trustee, agent or representative for the holders of
Additional Pari Passu Notes Obligations pursuant to any Additional Pari Passu
Notes Agreement, it being understood and agreed that no Additional Pari Passu
Notes Agent (if other than the Notes Agent) shall hold any Lien on Collateral.

 

“Additional Pari Passu Notes Agreement” means
the indenture, credit agreement or other agreement under which any Additional
Pari Passu Notes Obligations are incurred.

 

“Additional Pari Passu Notes Obligations”
means Indebtedness of the Grantors issued following the date of this Agreement
to the extent (a) such Indebtedness is permitted by the terms of the ABL
Credit Agreement to be secured by Liens on the Collateral ranking pari  passu
with the Liens securing the Note Obligations, (b) the Grantors have
granted Liens on the Collateral to secure the obligations in respect of such
Indebtedness, and (c) the Additional Pari Passu Notes Agent, for the
holders of such Indebtedness has executed a joinder agreement to the Note
Security Agreement in the form attached thereto (or other form reasonably
satisfactory to the Notes Agent) agreeing on behalf of itself and such holders
to (i) be bound by the terms of this 

 

4

 

Agreement applicable to
them, (ii) appoint the Notes Agent to act as their collateral agent and
representative hereunder and (iii) agree to be bound by the pari  passu
intercreditor provisions contained in the Note Security Documents entered into
in connection with the Indenture (which provisions are binding on the Note Claimholders
only).

 

“Affiliate” means, with respect to a
specified Person, another Person that directly, or indirectly through one or
more intermediaries, controls or is controlled by or is under common control
with the Person specified.  For purposes
of this definition, a Person shall be deemed to “control” or be “controlled
by” a Person if such Person possesses, directly or indirectly, power to direct
or cause the direction of the management or policies of such Person whether
through ownership of equity interests, by contract or otherwise.

 

“Agents” means the ABL Agent and the Notes
Agent.

 

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

 

“Bank Product Debt” means Indebtedness and
other Obligations relating to Bank Products.

 

“Bank Product Provider” shall mean any ABL
Lender or Affiliate of an ABL Lender that provides any Bank Products to any
Grantor.

 

“Bank Products” means “Bank Products” and “Cash
Management Services” as each such term is defined in the ABL Credit Agreement.

 

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

 

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

 

“Business Day” means a day that is a “Business
Day” under both the Indenture and the ABL Credit Agreement.

 

“Capital Stock” means (a) in the case of
a corporation, capital stock, (b) in the case of an association or
business entity, any and all shares, interests, participations, rights or other
equivalents (however designated) of capital stock, (c) in the case of a
partnership, partnership interests (whether general or limited), (d) in
the case of a limited liability company, membership interests and (e) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person and all rights, warrants or options exchangeable for or convertible into
any of the items described in clauses (a) through (e) above; provided
that with respect to the foregoing, Capital Stock shall exclude any debt securities
convertible into Capital Stock, whether or not such debt securities include any
right of vote or participation with Capital Stock.

 

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

 

5

 

“Claimholder” means any Note Claimholder or
ABL Claimholder, as applicable.

 

“Collateral” means any and all of the assets
and property of any Grantor, whether real, personal or mixed, which constitute
ABL Collateral or Notes Collateral.

 

“Commercial Tort Claims” means all present
and future “commercial tort claims” (as defined in Article 9 of the UCC).

 

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

 

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

 

“Conforming Plan of Reorganization” means any
Plan of Reorganization whose provisions are consistent with the provisions of
this Agreement.

 

“Deposit Accounts” means all present and
future “deposit accounts” (as defined in Article 9 of the UCC).

 

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

 

“Discharge of ABL Obligations” means:

 

(a)           payment in full in cash of all ABL Obligations
(other than contingent obligations or contingent indemnification obligations
except as provided in clause (e) below and other than ABL Obligations
constituting Bank Product Debt except as provided in clause (d) below);

 

(b)           termination or expiration of all commitments, if
any, to extend credit under the ABL Loan Documents;

 

(c)           termination, cash collateralization (in an amount
and manner reasonably satisfactory to the ABL Agent, but in no event greater
than 105% of the aggregate undrawn face amount, plus commissions, fees, and
expenses) or backstop of all letters of credit issued under the ABL Credit
Agreement in compliance with the terms of the ABL Credit Agreement;

 

(d)           the provision of credit support (which may include
cash collateralization or support by a letter of credit therefor) for any ABL
Obligations constituting Bank Product Debt (in an amount and manner and, if
other than pursuant to cash collateralization, of a kind reasonably
satisfactory to the providers of such Bank Product Debt); and

 

(e)           the provision of credit support (which may include
cash collateralization or support by a letter of credit) for any costs,
expenses and contingent indemnification obligations consisting of ABL
Obligations not yet due and payable but with respect to which a claim has been
threatened or asserted under any ABL Loan Documents (in an amount and manner
and, if other than pursuant to cash collateralization, of a kind reasonably
satisfactory to the ABL Agent).

 

6

 

“Discharge of Note Obligations” means payment
in full in cash of all Note Obligations, satisfaction and discharge of the
Indenture and any Additional Pari Passu Notes Agreement or legal or covenant
defeasance of the Indenture and any Additional Pari Passu Notes Agreement
(other than obligations that expressly survive such satisfaction and discharge
or legal or covenant defeasance).

 

“Disposition” means any sale, lease,
exchange, transfer or other disposition of any Collateral.

 

“Documents” means all present and future “documents”
(as defined in Article 9 of the UCC.

 

“Enforcement” means, collectively or
individually for one or both of the ABL Agent and the Notes Agent, when an ABL
Default or Note Default, as applicable, has occurred and is continuing, to
enforce or attempt to enforce any right or power to repossess, replevy, attach,
garnish, levy upon, collect the Proceeds of, foreclose or realize in any manner
whatsoever its Lien upon, sell, liquidate or otherwise dispose of, or otherwise
restrict or interfere with the use of, or exercise any remedies with respect
to, or conduct any Going Out of Business Sale with respect to, any material amount
of Collateral, whether by judicial enforcement of any of the rights and
remedies under the ABL Loan Documents, the Note Documents and/or under any
applicable law, by self-help repossession, by non-judicial foreclosure sale,
lease, or other disposition, by set-off, by notification to account obligors of
any Grantor, by any sale, lease, or other disposition implemented by any
Grantor following an ABL Default or a Note Default, as applicable, in connection
with which the ABL Agent or the Notes Agent, as applicable, has agreed to
release its Liens on the subject property, or otherwise, but in all cases
excluding (i) the establishment of borrowing base reserves, collateral
ineligibles, or other conditions for advances, (ii) the changing of
advance rates or advance sublimits, (iii) the imposition of a default rate
or late fee, (iv) the collection and application of Accounts or other
monies deposited from time to time in Deposit Accounts or Securities Accounts,
in each case, to the extent constituting ABL Priority Collateral, against the
ABL Obligations pursuant to the provisions of the ABL Loan Documents
(including, without limitation, the notification of account debtors, depositary
institutions or any other Person to deliver proceeds of Collateral to the ABL Agent
or any “cash dominion event” or mandatory prepayment event under the ABL Loan
Documents), (v) the cessation of lending pursuant to the provisions of the
ABL Loan Documents, including upon the occurrence of a default on the existence
of an over-advance, (vi) the filing of a proof of claim in any Insolvency
or Liquidation Proceeding, (vii) the consent by the ABL Agent to disposition
by any Grantor of any of the ABL Priority Collateral, and (viii) the
acceleration of the Notes Obligations or the ABL Obligations.

 

“Enforcement Notice” means a written notice
delivered, at a time when an ABL Default or Note Default has occurred and is
continuing, by either the ABL Agent or the Notes Agent to the other announcing
that an Enforcement Period has commenced, specifying the relevant event of
default, stating the current balance of the ABL Obligations or the Note
Obligations, as applicable, and requesting the current balance of the ABL
Obligations or Note Obligations, as applicable, owing to the noticed party.

 

“Enforcement Period” means the period of time
following the receipt by either the ABL Agent or the Notes Agent of an
Enforcement Notice from the other until the earliest of (a) in the 

 

7

 

case of an Enforcement Period
commenced by the Notes Agent, the Discharge of Note Obligations, (b) in
the case of an Enforcement Period commenced by the ABL Agent, the Discharge of
ABL Obligations, (c) the ABL Agent or the Notes Agent (as applicable)
agreeing in writing to terminate the Enforcement Period, or (d) the date
on which the ABL Default or the Note Default that was the subject of the
Enforcement Notice relating to such Enforcement Period has been cured to the
satisfaction of the ABL Agent or the Notes Agent, as applicable, or waived in
writing.

 

“Equipment” means, as to each Grantor, all of
such Grantor’s now owned and hereafter acquired equipment, as defined in Article 9
of the UCC.

 

“Financial Assets” means all present and
future “financial assets” (as defined in Article 9 of the UCC).

 

“General Intangibles” means all present and
future “general intangibles” (as defined in Article 9 of the UCC).

 

“Going Out of Business Sale” means, following
the occurrence and during the continuance of any ABL Default, any sale or
liquidation of the ABL Priority Collateral consented to by the ABL Agent for
purposes of permitting the Grantors to obtain funds to permanently repay the
ABL Obligations in whole or in part.

 

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

 

“Grantors” means the Issuers, each Company
Subsidiary and each other Person that has or may from time to time hereafter
execute and deliver an ABL Security Document or a Note Security Document as a
grantor of a security interest (or the equivalent thereof).

 

“Indebtedness” means and includes all
Obligations that constitute “Debt,” “Indebtedness,” “Obligations,” “Liabilities”
or any similar term within the meaning of the ABL Credit Agreement or the Indenture,
as applicable.

 

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

 

“Initial ABL Credit Agreement” has the meaning
assigned to that term in the Recitals.

 

“Initial Access Date” has the meaning
assigned to that term in the definition of the term “Access Period.”

 

“Initial Notes” has the meaning assigned to
that term in the Recitals.

 

“Initial Use Date” has the meaning assigned
to that term in the definition of the term “Use Period.”

 

8

 

“Insolvency or Liquidation Proceeding” means:

 

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

 

(b)           any other voluntary or involuntary insolvency,
reorganization or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding with respect to
any Grantor or with respect to a material portion of their respective assets,
in each case, except as permitted under the ABL Credit Agreement, the Indenture
and any Additional Pari Passu Notes Agreement;

 

(c)           any composition of liabilities or similar
arrangement relating to any Grantor, whether or not under a court’s jurisdiction
or supervision;

 

(d)           any liquidation, dissolution, reorganization or
winding up of any Grantor, whether voluntary or involuntary, whether or not
under a court’s jurisdiction or supervision, and whether or not involving
insolvency or bankruptcy; or

 

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

 

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

 

“Intellectual Property” means, all of the
following in any jurisdiction throughout the world:  (a) patents, patent applications and
inventions, including all renewals, extensions, combinations, divisions, or
reissues thereof (“Patents”); (b) trademarks, service marks, trade
names, trade dress, logos, internet domain names and other business
identifiers, together with the goodwill symbolized by any of the foregoing, and
all applications, registrations, renewals and extensions thereof (“Trademarks”);
(c) copyrights and all works of authorship including all registrations,
applications, renewals, extensions and reversions thereof (“Copyrights”);
(d) all computer software, source code, executable code, data, databases
and documentation thereof; (e) all trade secret rights in information,
including trade secret rights in any formula, pattern, compilation, program,
device, method, technique, or process, that (1) derives independent
economic value, actual or potential, from not being generally known to, and not
being readily ascertainable by proper means by, other Persons who can obtain
economic value from its disclosure or use, and (2) is the subject of
efforts that are reasonable under the circumstances to maintain its secrecy; (f) all
other intellectual property or proprietary rights in any discoveries, concepts,
ideas, research and development, know-how, formulae, patterns, inventions,
compilations, compositions, manufacturing and production processes and
techniques, program, device, method, technique, technical data, procedures,
designs, recordings, graphs, drawings, reports, analyses, specifications, databases,
and other proprietary or confidential information, including customer lists
(other than Prescription Lists), supplier lists, pricing and cost information
(other than related to Prescription Lists), business and marketing plans and
proposals and advertising and promotional materials; and (g) all rights to
sue at law or in equity for any infringement or other impairment or violation
thereof and all products and proceeds of the foregoing.

 

9

 

“Inventory” means as to each Grantor, all of
such Grantor’s now owned and hereafter existing or acquired inventory, as
defined in Article 9 of the UCC.

 

“Investment Property” means all present and
future “investment property” (as defined in Article 9 of the UCC),
including, without limitation, all Capital Stock held by each of the Issuers
and the Company Subsidiaries.

 

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

 

“Letter of Credit Rights” means all present
and future “letter of credit rights” (as defined in Article 9 of the UCC).

 

“Lien” means any mortgage, pledge, hypothec,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), charge or other security interest or any other security agreement
(including, without limitation, any conditional sale or other title retention
agreement and any Capital Lease (as defined in the ABL Credit Agreement) having
substantially the same economic effect as any of the foregoing).

 

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

 

“Mortgaged Premises” means any real property
which shall now or hereafter be subject to a Note Mortgage and/or an ABL
Mortgage.

 

“Non-Conforming Plan of Reorganization” means
any Plan of Reorganization whose provisions are inconsistent with the
provisions of this Agreement, including any plan of reorganization that
purports to re-order (whether by subordination, invalidation, or otherwise) or
otherwise disregard, in whole or part, the provisions of Article II
(including the Lien priorities of Section 2.1), the provisions of Article IV,
or the provisions of Article VI, unless such Plan of Reorganization
has been accepted by the voluntary required vote of each class of ABL Claimholders
and Note Claimholders.

 

“Note Claimholders” means, at any relevant
time, the holders of Note Obligations at that time, including the Noteholders,
each Additional Pari Passu Notes Agent and the Notes Agent.

 

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

 

“Note Default” means an “Event of Default” as
defined in the Indenture or in any Additional Pari Passu Notes Agreement.

 

“Note Documents” means the Indenture, the
Notes, each Additional Pari Passu Notes Agreement, the Note Security Documents
and each of the other agreements, documents and instruments executed pursuant
thereto, and any other document or instrument executed or delivered at any time
in connection with any Note Obligations, including any intercreditor or joinder
agreement among holders of Note Obligations to the extent such are effective at
the relevant time, as each may be amended, restated, supplemented, modified,
renewed, extended or Refinanced from time to time in accordance with the provisions
of this Agreement.

 

10

 

“Noteholders” means
the “Holders” as defined in the Indenture and any holders of Additional Pari
Passu Notes Obligations.

 

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

 

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

 

“Note Security Agreement” means the Security
Agreement, dated as of October 9, 2009, by and among the Issuers, the
Company Subsidiaries, the Trustee and the Notes Agent, as the same may be
amended, modified, restated, supplemented or replaced from time to time in accordance
with its terms.

 

“Note Security Documents” means any
agreement, document or instrument pursuant to which a Lien is granted securing
any Note Obligations or under which rights or remedies with respect to such
Liens are governed.

 

“Note Standstill Period” has the meaning set
forth in Section 3.1(a)(i).

 

“Notes” means, collectively, (a) the
Initial Notes and (b) any other credit agreement, loan agreement, note
agreement, promissory note, indenture or other agreement or instrument evidencing
or governing the terms of any indebtedness or other financial accommodation
that has been incurred to increase, replace, refinance or refund in whole or in
part the Obligations outstanding under the Initial Notes or any other agreement
or instrument referred to in this clause, unless such agreement or instrument
expressly provides that it is not intended to be and is not a Note, or such
agreement or instrument is not a Permitted Refinancing Agreement.  Any reference to the Notes hereunder shall be
deemed a reference to any Notes then in existence.

 

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

 

“Notes Collateral Account” means any deposit
account or securities account required to be established pursuant to the Note
Documents for purposes of holding Notes Priority Collateral pending application
as required under the Note Documents (it being understood that ABL Priority
Collateral deposited in the Notes Collateral Account shall continue to be ABL
Priority Collateral).

 

“Notes Priority Collateral” means all now
owned or hereafter acquired Note Collateral that constitutes:

 

(a)           Real Estate Assets;

 

11

 

(b)           Intellectual Property (other than Prescription
Lists);

 

(c)           Notes Trust Monies;

 

(d)           the Notes Collateral Account;

 

(e)           Investment Property (except as set forth in clauses
(c), (f) and (i) of the definition of ABL Priority Collateral);

 

(f)            Equipment and Fixtures;

 

(g)           General Intangibles (other than General Intangibles
described in clauses (e), (f), (g) and (i) of the definition of ABL
Priority Collateral);

 

(h)           Supporting Obligations to the extent arising out of,
or related to, or derivative of, the property or interests described in this
definition;

 

(i)            contracts, contract rights and other General
Intangibles, Commercial Tort Claims, Documents, Chattel Paper, and Instruments
(including promissory notes), in each case, to the extent arising out of, or
related to, or derivative of the property or interests in property described in
this definition;

 

(j)            books and records relating to the items referred to
in the preceding clauses (a) though (i) (including books, databases,
data processing software, customer lists, engineer drawings, and Records,
whether tangible or electronic, which contain any information relating to any
of the items referred to in the preceding clauses (a) through (i));

 

(k)           Accounts which constitute identifiable Proceeds from
the sale, license, assignment or other disposition of any of the property
described in the foregoing clauses (a) through (k);

 

(l)            subject to Section 3.5, all other Collateral
for the Note Obligations other than ABL Priority Collateral; and

 

(m)          subject to Section 3.5,
all Proceeds of any of the foregoing, including collateral security and guarantees
with respect to any of the foregoing and all cash, Money, insurance proceeds,
Instruments, Securities, Financial Assets and Deposit Accounts constituting
Proceeds of the foregoing.

 

“Notes Trust Monies” means Notes Priority
Collateral required pursuant to the Note Documents to be deposited into the
Notes Collateral Account.

 

“Obligations” means all present and future
loans, advances, liabilities, obligations, covenants, duties, and debts from
time to time owing by any Grantor to any agent or trustee (including either
Agent), the ABL Claimholders, the Note Claimholders or any of them or their
respective Affiliates, arising from or in connection with the ABL Loan
Documents, the Note Documents or Bank Products, whether for principal, interest
or payments for early termination, whether or not evidenced by any note, or
other instrument or document, whether arising from an 

 

12

 

extension of credit, opening
of a letter of credit, acceptance, loan, guaranty, indemnification or
otherwise, whether direct or indirect, absolute or contingent, due or to become
due, primary or secondary, as principal or guarantor, and including all
principal, interest, charges, expenses, fees, attorneys’ fees, filing fees and
any other sums chargeable to the Grantors, including, without limitation, the “Obligations”,
as defined in the ABL Credit Agreement, and the “Obligations”, as defined in
the Indenture, under the Notes and any Additional Pari Passu Notes Agreement.

 

“Permitted Refinancing”
means any Refinancing the governing documentation of which constitutes
Permitted Refinancing Agreements.

 

“Permitted Refinancing Agreements” means,
with respect to either the ABL Credit Agreement, the Notes or any Additional
Pari Passu Notes Agreement, as applicable, any credit agreement, loan
agreement, note agreement, promissory note, indenture or other agreement or
instrument evidencing or governing the terms of any indebtedness or other
financial accommodation that has been incurred to increase, replace (whether
upon or after termination or otherwise), refinance or refund in whole or in
part the Obligations outstanding under the ABL Credit Agreement, the Notes or
any Additional Pari Passu Notes Agreement, whether or not such increase,
replacement, refinancing or refunding occurs (i) with the original parties
thereto, (ii) on one or more separate occasions or (iii) simultaneously
or not with the termination or repayment of the ABL Credit Agreement, the Notes
or any Additional Pari Passu Notes Agreement or any other agreement or
instrument referred to in this clause, unless such agreement or instrument expressly
provides that it is not intended to be and is not a Permitted Refinancing
Agreement, as such financing documentation may be amended, restated,
supplemented or otherwise modified from time to time and that would not be
prohibited by Section 5.3(c) or Section 5.3(d), as
applicable.

 

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

 

“Plan of Reorganization” means any plan of
reorganization, plan of liquidation, agreement for composition, or other type
of plan of arrangement proposed in or in connection with any Insolvency or
Liquidation Proceeding.

 

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

 

“Prescription Lists”
means any and all lists of customers and their prescription medical history,
all pricing and cost information in connection therewith and all books and
records pertaining thereto.

 

“Proceeds” means all “proceeds”
(as defined in Article 9 of the UCC), including any payment or property
received on account of any claim secured by Collateral in any Insolvency or
Liquidation Proceeding.

 

“Real Estate Asset” means, the Company’s
warehouse distribution facility in Lancaster, New York and at any time of
determination, any interest (fee, leasehold or otherwise) then owned by the
Issuers or any Grantor in any real property.

 

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

 

13

 

“Recovery” has the meaning set forth in Section 6.4.

 

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

 

“Secured Parties” means the ABL Claimholders
and the Note Claimholders.

 

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

 

“Security Entitlements” means all present and
future “security entitlements” (as defined in Article 9 of the UCC).

 

“Securities Accounts” means all present and
future “securities accounts” (as defined in Article 8 of the UCC),
including all monies, “uncertificated securities,” and “securities entitlements”
(as defined in Article 8 of the UCC) contained therein.

 

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

 

“Supporting Obligations” means all present
and future “supporting obligations” (as defined in Article 9 of the UCC).

 

“UCC” means the Uniform Commercial Code (or
any similar equivalent legislation) as in effect from time to time in the State
of New York; provided, however, that, at any time, if by reason
of mandatory provisions of law, any or all of the perfection or priority of the
Agents’ security interest in any item or portion of the Collateral is governed
by the Uniform Commercial Code as in effect in a jurisdiction other that the
State of New York, the term “UCC” shall mean the Uniform Commercial Code as in
effect, at such time, in such other jurisdiction for purposes of the provisions
hereof relating to such perfection or priority and for purposes of definitions
relating to such provisions.

 

“Use Period” means, with respect to the Notes
Priority Collateral, the period, after the commencement of an Enforcement
Period by the ABL Agent, which begins on the earlier of (a) the day on
which the ABL Agent provides the Notes Agent with an Enforcement Notice and (b) the
fifth Business Day after the Notes Agent provides the ABL Agent with notice
that the Notes Agent (or its agent) has obtained possession or control of such
Collateral and ends on the earliest of (i) the 270th day after the date
(the “Initial Use Date”) on which the ABL Agent, or its designee,
initially obtains the ability to take physical possession of, remove, or
otherwise control physical access to, or actually uses, such Notes Priority
Collateral plus such number of days, if any, after the Initial Use Date that it
is stayed or otherwise prohibited by law or court order from 

 

14

 

exercising remedies with
respect to such Notes Priority Collateral and (ii) the termination of such
Enforcement Period.

 

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;

 

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

 

(e)           all uncapitalized terms have
the meanings, if any, given to them in the UCC, as now or hereafter enacted in
the State of New York (unless otherwise specifically defined herein);

 

(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;

 

(g)           any reference herein to a
Person in a particular capacity or capacities excludes such Person in any other
capacity or individually;

 

(h)           any reference herein to any
law shall be construed to refer to such law as amended, modified, codified,
replaced, or re-enacted, in whole or in part, and in effect on the pertinent
date; and

 

(i)            in the compilation of
periods of time hereunder from a specified date to a later specified date, the
word “from” means “from and including” and the words “to” and “until” each
means “to, but not through or including.”

 

15

 

II.

LIEN PRIORITIES.

 

2.1.         Relative Priorities.  Irrespective of the date, time, method,
manner or order of grant, attachment or perfection of any Liens securing the
Note Obligations granted on the Collateral or of any Liens securing the ABL
Obligations granted on the Collateral (including, in each case, irrespective of
whether any such Lien is granted (or secures Obligations relating to the period)
before or after the commencement of any Insolvency or Liquidation Proceeding)
and notwithstanding any provision of any UCC, or any other applicable law, or
the ABL Loan Documents or the Note Documents, the ABL Agent, on behalf of the
ABL Claimholders, and the Notes Agent, on behalf of the Note Claimholders,
hereby agree that:

 

(a)           any Lien of the ABL Agent on
the ABL Priority Collateral securing the ABL Obligations, whether such Lien is
now or hereafter held by or on behalf of the ABL Agent or any other ABL
Claimholder or any other agent or trustee therefor, regardless of how or when
acquired, whether by grant, possession, statute, operation of law, subrogation
or otherwise, shall be senior in all respects and prior to any Lien on the ABL
Priority Collateral securing any Note Obligations; and

 

(b)           any Lien of the Notes Agent
on the Notes Priority Collateral securing the Note Obligations, whether such
Lien is now or hereafter held by or on behalf of the Notes Agent, any other
Note Claimholder or any other agent or trustee therefor, regardless of how or
when acquired, whether by grant, possession, statute, operation of law,
subrogation or otherwise, shall be senior in all respects to all Liens on the
Notes Priority Collateral securing any ABL Obligations.

 

2.2.         Prohibition on Contesting Liens.  Each of the Notes Agent, on behalf of each
Note Claimholder, and the ABL Agent, on behalf of each ABL Claimholder, consents
to the granting of Liens in favor of the other to secure the ABL Obligations
and the Note Obligations, as applicable, and agrees that no Claimholder will be
entitled to, and it will not (and shall be deemed to have irrevocably,
absolutely, and unconditionally waived any right to), contest (directly or indirectly)
or support (directly or indirectly) any other Person in contesting, in any
proceeding (including any Insolvency or Liquidation Proceeding):  (a) the attachment, perfection,
priority, validity or enforceability of any Lien in the Collateral held by or
on behalf of any of the ABL Claimholders to secure the payment of the ABL
Obligations or any of the Note Claimholders to secure the payment of the Note
Obligations, (b) the priority, validity or enforceability of the ABL
Obligations or the Note Obligations, including the allowability or priority of
the Note Obligations or the ABL Obligations, as applicable, in any Insolvency
or Liquidation Proceeding, or (c) the validity or enforceability of the
provisions of this Agreement; provided that nothing in this Agreement
shall be construed to prevent or impair the rights of the ABL Agent, on behalf
of the ABL Claimholders, or the Notes Agent, on behalf of the Note Claimholders,
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, 3.2 and 6.1.

 

2.3.         No New Liens.  So long as neither the Discharge of ABL
Obligations nor the Discharge of Note Obligations has occurred, whether or not
any Insolvency or Liquidation Proceeding has been commenced by or against one
or more of the Issuers or any other Grantor, the parties 

 

16

 

hereto agree, subject to Article VI, that the Issuers shall not,
and shall not permit any other Grantor to:

 

(a)           grant or permit any
additional Liens on any asset or property to secure any Note Obligations unless
it has granted or concurrently grants a Lien on such asset or property to
secure the ABL Obligations; or

 

(b)           grant or permit any
additional Liens on any asset or property to secure any ABL Obligations unless
it has granted or concurrently grants a Lien on such asset or property to
secure the Note Obligations.

 

To the extent any additional Liens are
granted on any asset or property (except as contemplated by Section 2.4)
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 or remedies available hereunder, the ABL Agent, on behalf of the ABL
Claimholders, and the Notes Agent, on behalf of Note 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 ABL Collateral and the Note Collateral be identical except (a) the
Notes Collateral shall not include a Lien on securities of the Issuers and the
Company Subsidiaries included in the ABL Collateral to the extent a Lien in
favor of the Notes Agent thereon would require the filing of financial
statements with the Securities and Exchange Commission pursuant to Rule 3-16
of Regulation S-X under the Securities Act of 1933, as amended, and (b) as
provided in Article VI and as otherwise provided herein.  In furtherance of the foregoing and of Section 8.8,
the parties hereto agree, subject to the other provisions of this Agreement,
upon request by the ABL Agent or the Notes Agent, to cooperate in good faith
(and to direct their counsel to cooperate in good faith) from time to time in
order to determine the specific items included in the ABL Collateral and the
Note Collateral and the steps taken to perfect their respective Liens thereon
and the identity of the respective parties obligated under the ABL Loan
Documents and the Note Documents.

 

III.

EXERCISE OF REMEDIES; ENFORCEMENT.

 

3.1.         Restrictions on the Notes Agent and the Note
Claimholders.

 

(a)           Until the Discharge of ABL
Obligations has occurred, whether or not any Insolvency or Liquidation
Proceeding has been commenced by or against any Grantor, the Notes Agent and
the other Note Claimholders:

 

(i)       will not exercise or seek to exercise (but instead
shall be deemed to have hereby irrevocably, absolutely and unconditionally
waived for the duration of the Note Standstill Period), any rights, powers, or
remedies with respect to any ABL Priority Collateral (including (A) any
right of set-off or any right under any Account Agreement, landlord waiver or
bailee’s letter or similar agreement or arrangement to which the Notes Agent or
any Note Claimholder is a party, (B) any right to undertake self-help
re-possession or non-judicial disposition of any ABL Priority Collateral
(including any

 

17

 

partial
or complete strict foreclosure), and/or (C) any right to institute,
prosecute, or otherwise maintain any action or proceeding with respect to such
rights, powers or remedies (including any action of foreclosure)) provided,
however, that the Notes Agent may exercise any or all of such rights,
powers, or remedies after a period of at least 270 days has elapsed since the
later of:  (i) the date on which the
Notes Agent declared the existence of a Note Default, accelerated (to the
extent such amount was not already due and owing) the payment of the principal
amount of all Note Obligations, and demanded payment thereof and (ii) the
date on which the ABL Agent received the Enforcement Notice from the Notes
Agent; provided, further, however, that neither the Notes
Agent nor any other Note Claimholder shall exercise any rights or remedies with
respect to the ABL Priority Collateral if, notwithstanding the expiration of
such 270-day period, the ABL Agent or the other ABL Claimholders (A) shall
have commenced, whether before or after the expiration of such 270-day period,
and be diligently pursuing the exercise of their rights, powers, or remedies
with respect to all or any material portion of such Collateral (prompt written
notice of such exercise to be given to the Notes Agent), or (B) shall have
been stayed by operation of law or any court order from pursuing any such
exercise of remedies (the period during which the Notes Agent and the other
Note Claimholders may not pursuant to this Section 3.1(a)(i) exercise
any rights, powers, or remedies with respect to the ABL Priority Collateral,
the “Note Standstill Period”);

 

(ii)      will not, directly or indirectly, contest, protest
or object to or hinder any judicial or non-judicial foreclosure proceeding or
action (including any partial or complete strict foreclosure) brought by the
ABL Agent or any other ABL Claimholder relating to the ABL Priority Collateral
or any other exercise by the ABL Agent or any other ABL Claimholder of any
other rights, powers and remedies relating to the ABL Priority Collateral,
including any sale, lease, exchange, transfer, or other disposition of the ABL
Priority Collateral, whether under the ABL Loan Documents, applicable law, or
otherwise;

 

(iii)     subject to their rights under clause (a)(i) above
(and under clause (vi) of Section 3.1(c)), will not object to
the forbearance by the ABL Agent or the ABL Claimholders from bringing or
pursuing any Enforcement with respect to the ABL Priority Collateral;

 

(iv)     except as may be permitted in Section 3.1(c),
irrevocably, absolutely, and unconditionally waive any and all rights the Notes
Agent or the Note Claimholders may have as a junior lien creditor or otherwise
to object (and seek or be awarded any relief of any nature whatsoever based on
any such objection) to the manner in which the ABL Agent or the ABL
Claimholders (A) enforce or collect (or attempt to collect) the ABL
Obligations or (B) realize or seek to realize upon or otherwise enforce
the Liens in and to the ABL Priority Collateral securing the ABL Obligations,
regardless of whether any action or failure to act by or on behalf of the ABL
Agent or ABL Claimholders is adverse to the interest of the Notes Agent or the
Note Claimholders.  Without limiting the
generality of the foregoing, the Note Claimholders shall be deemed to have
hereby irrevocably, absolutely, and unconditionally waived any right to object
(and seek or be awarded any relief of any nature whatsoever based on any such
objection), at any time prior or subsequent to any disposition of any of the
ABL Priority Collateral, on the ground(s) that any 

 

18

 

such
disposition of ABL Priority Collateral (x) would not be or was not “commercially
reasonable” within the meaning of any applicable UCC and/or (y) would not
or did not comply with any other requirement under any applicable UCC or under
any other applicable law governing the manner in which a secured creditor
(including one with a Lien on real property) is to realize on its collateral;
and

 

(v)      subject to Section 3.1(a) and (c),
acknowledge and agree that no covenant, agreement or restriction contained in
the Note Security Documents or any other Note Document (other than this
Agreement) shall be deemed to restrict in any way the rights and remedies of
the ABL Agent or the ABL Claimholders with respect to the ABL Priority Collateral
as set forth in this Agreement and the ABL Loan Documents;

 

provided, however,
that, in the case of (i), (ii) and (iii) above, the Liens granted to
secure the Note Obligations of the Note Claimholders shall attach to any
Proceeds resulting from actions taken by the ABL Agent or any ABL Claimholder
with respect to the ABL Priority Collateral in accordance with this Agreement
after application of such Proceeds to the extent necessary to meet the
requirements of a Discharge of ABL Obligations.

 

(b)           Until the Discharge of ABL
Obligations, whether or not any Insolvency or Liquidation Proceeding has been
commenced by or against any Grantor, the ABL Agent and the other ABL
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 ABL Priority Collateral by the
respective Grantors after an ABL Default) make determinations regarding the
release, disposition, or restrictions with respect to the ABL Priority
Collateral without any consultation with or the consent of the Notes Agent or
any Note Claimholder; provided, however, that the Lien securing
the Note Obligations shall remain on the Proceeds (other than those properly
applied to the ABL Obligations in accordance with Section 4.1) of
such Collateral released or disposed of subject to the relative priorities
described in Section 2.1.  In
exercising rights, powers, and remedies with respect to the ABL Priority
Collateral, the ABL Agent and the ABL Claimholders may enforce the provisions
of the ABL Loan Documents and exercise rights, powers, and/or remedies
thereunder and/or under applicable law or otherwise, 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
ABL Priority Collateral upon foreclosure, to incur expenses in connection with
such sale or disposition, and to exercise all the rights and remedies of a
secured creditor under the UCC and of a secured creditor under the Bankruptcy
Laws of any applicable jurisdiction.

 

(c)           Notwithstanding anything to
the contrary contained herein, the Notes Agent and any Note Claimholder may:

 

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

 

(ii)           take any action
(not adverse to the priority status of the Liens on the ABL Priority
Collateral, or the rights of the ABL Agent or any of the ABL Claimholders to

 

19

 

exercise
rights, powers, and/or remedies in respect thereof, including those under Article VI)
in order to create, perfect, preserve or protect (but not enforce) its Lien on
any of the ABL Priority Collateral;

 

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

 

(iv)          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 or applicable law (including the
Bankruptcy Laws of any applicable jurisdiction) and any pleadings, objections,
motions or agreements which assert rights or interests available to secured
creditors solely with respect to the Notes Priority Collateral;

 

(v)           vote on any
Plan of Reorganization, file any proof of claim, make other filings and make
any arguments, obligations, and motions (including in support of or opposition
to, as applicable, the confirmation or approval of any Plan of Reorganization)
that are, in each case, in accordance with the terms of this Agreement.  Without limiting the generality of the
foregoing or of the other provisions of this Agreement, any vote to accept, and
any other act to support the confirmation or approval of, any Non-Conforming
Plan of Reorganization shall be inconsistent with and accordingly, a violation
of the terms of this Agreement, and the ABL Agent shall be entitled to have any
such vote to accept a Non-Conforming Plan of Reorganization changed and any
such support of any Non-Conforming Plan of Reorganization withdrawn;

 

(vi)          exercise any of
the rights, powers and/or remedies with respect to any of the ABL Priority
Collateral after the termination of the Note Standstill Period to the extent permitted
by Section 3.1(a)(i); and

 

(vii)         take any action
described in clauses (iii), (vi) and (viii) of the definition of “Enforcement.”

 

The Notes Agent, on behalf of the Note
Claimholders, agrees that no Note Claimholder will take or receive any ABL
Priority Collateral (including Proceeds) in connection with the exercise of any
right or remedy (including set-off) with respect to ABL Priority 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 ABL Obligations has occurred,
except as expressly provided in Sections 3.1(a)(i), 6.7 and clause
(vi) of Section 3.1(c), the sole right of the Notes Agent
and the Note Claimholders with respect to the ABL Priority Collateral is to hold
a Lien on such Collateral pursuant to the Note Security Documents for the period
and to the extent granted therein and to receive a share of the Proceeds
thereof, if any, in accordance with Section 4.1.

 

20

 

(d)          Except as otherwise
specifically set forth in Sections 3.1(a), 3.4 and 3.5 and
Article VI, the Notes Agent and the Note Claimholders may exercise
rights and remedies as unsecured creditors against any Grantor and may exercise
rights and remedies with respect to the Notes Priority Collateral, in each
case, in accordance with the terms of the Note Documents and applicable law; provided,
however, that in the event that the Notes Agent or any Note Claimholder
becomes a judgment Lien creditor in respect of ABL Priority Collateral as a
result of its enforcement of its rights as an unsecured creditor with respect
to the Note Obligations, such judgment Lien shall be subject to the terms of
this Agreement for all purposes (including in relation to the ABL Obligations)
as the other Liens securing the Note Obligations are subject to this Agreement.

 

(e)           Except as provided in Section 5.3(d),
nothing in this Agreement shall prohibit the receipt by the Notes Agent or any
other Note Claimholders of the required payments of interest, principal and
other amounts owed in respect of the Note Obligations so long as such receipt
is not the direct or indirect result of the exercise by the Notes Agent or any
Note Claimholders of rights or remedies as a secured creditor (including
set-off) with respect to ABL Priority Collateral or enforcement in
contravention of this Agreement of any Lien held by any of them.  Nothing in this Agreement impairs or
otherwise adversely affects any rights or remedies the ABL Agent or the ABL
Claimholders may have against the Grantors under the ABL Loan Documents.

 

3.2.         Restrictions on the ABL Agent and ABL Claimholders.

 

(a)           Until the Discharge of Note
Obligations has occurred, whether or not any Insolvency or Liquidation
Proceeding has been commenced by or against any Grantor, subject to the limited
extent provided in Article VI, the ABL Agent and the other ABL
Claimholders:

 

(i)            will not
exercise or seek to exercise (but instead shall be deemed to have hereby
irrevocably, absolutely and unconditionally waived for the duration of the ABL
Standstill Period) any rights, powers, or remedies with respect to any Notes
Priority Collateral (including (A) any right of set-off or any right under
any Account Agreement, landlord waiver or bailee’s letter or similar agreement
or arrangement to which the ABL Agent or any ABL Claimholder is a party, (B) any
right to undertake self-help repossession or nonjudicial disposition of any
Notes Priority Collateral (including any partial or complete strict
foreclosure), or (C) any right to institute, prosecute or otherwise
maintain any action or proceeding with respect to such rights, powers, or
remedies (including any action of foreclosure)); provided, however,
that the ABL Agent may exercise any or all of such rights, powers, or remedies
after a period of at least 270 days has elapsed since the later of:  (i) the date on which the ABL Agent
declared the existence of an ABL Default, accelerated (to the extent such
amount was not already due and owing) the payment of the principal amount of
all ABL Obligations, and demanded payment thereof and (ii) the date on
which the Notes Agent received the Enforcement Notice from the ABL Agent relating
to such action; provided, further, however, that neither
the ABL Agent nor the other ABL Claimholders shall exercise any remedies with
respect to the Notes Priority Collateral if, notwithstanding the expiration of
such 270-day period, the Notes Agent or the Notes Claimholders (A) shall
have commenced, whether before or after the expiration of such 270-day period,
and be diligently pursuing the exercise of their rights or remedies 

 

21

 

with
respect to all or any material portion of such Collateral (prompt notice of
such exercise to be given to the ABL Agent) or (B) shall have been stayed
by operation of law or by any court order from pursuing any such exercise of
remedies (the period during which the ABL Agent and the other ABL Claimholders
may not pursuant to this Section 3.2(a)(i) exercise any rights
or remedies with respect to the Notes Priority Collateral, the “ABL Standstill Period”); provided,
finally, however, that the ABL Agent, independent in all respects
of the preceding provisos, may exercise the rights provided for in Section 3.3
(with respect to any Access Period) and Section 3.4 (with respect
to any Access Period or Use Period);

 

(ii)           will not,
directly or indirectly, contest, protest or object to or hinder any judicial or
non-judicial foreclosure proceeding or action (including any partial or complete
strict foreclosure) brought by the Notes Agent or any other Note Claimholder
relating to the Notes Priority Collateral or any other exercise by the Notes
Agent or any other Note Claimholder of any rights, powers and remedies relating
to the Notes Priority Collateral, including any sale, lease, exchange,
transfer, or other disposition of the Notes Priority Collateral, whether under
the Note Documents, applicable law, or otherwise subject to the Notes Agent’s
and the other Note Claimholders’ obligations under Sections 3.3 and 3.4;

 

(iii)          subject to Section 3.2(a),
will not object to the forbearance by the Notes Agent or the Note Claimholders
from bringing or pursuing any Enforcement with respect to the Notes Priority
Collateral;

 

(iv)          subject to Sections
3.2(c), 3.3, 3.4, and 3.5, irrevocably, absolutely and
unconditionally waive any and all rights the ABL Agent and ABL Claimholders may
have as a junior lien creditor or otherwise to object (and seek or be awarded
any relief of any nature whatsoever based on any such objection) to the manner
in which the Notes Agent or the Note Claimholders (a) enforce or collect
(or attempt to collect) the Note Obligations or (b) realize or seek to realize
upon or otherwise enforce the Liens in and to the Notes Priority Collateral
securing the Note Obligations, regardless of whether any action or failure to
act by or on behalf of the Notes Agent or Note Claimholders is adverse to the
interest of the ABL Claimholders. 
Without limiting the generality of the foregoing, the ABL Claimholders
shall be deemed to have hereby irrevocably, absolutely and unconditionally
waived any right to object (and seek or be awarded any relief of any nature whatsoever
based on any such objection), at any time prior to or subsequent to any
disposition of any Notes Priority Collateral, on the ground(s) that any
such disposition of Notes Priority Collateral (a) would not be or was not “commercially
reasonable” within the meaning of any applicable UCC and/or (b) would not
or did not comply with any other requirement under any applicable UCC or under
any other applicable law governing the manner in which a secured creditor
(including one with a Lien on real property) is to realize on its collateral;
and

 

(v)           subject to Sections
3.2(a) and (c) and Sections 3.3, 3.4, and 3.5,
acknowledge and agree that no covenant, agreement or restriction contained in
the ABL Security Documents or any other ABL Loan Document (other than this
Agreement) shall be deemed to restrict in any way the rights and remedies of
the Notes Agent or the Note 

 

22

 

Claimholders
with respect to the Notes Priority Collateral as set forth in this Agreement
and the Note Documents;

 

provided, however,
that in the case of (i), (ii) and (iii) above, the Liens granted to
secure the ABL Obligations of the ABL Claimholders shall attach to any Proceeds
resulting from actions taken by the Notes Agent or any Note Claimholder with
respect to the Notes Priority Collateral in accordance with this Agreement
after application of such Proceeds to the extent necessary to meet the
requirements of a Discharge of Note Obligations.

 

(b)           Until the Discharge of Note
Obligations has occurred, whether or not any Insolvency or Liquidation
Proceeding has been commenced by or against any Grantor, the Notes Agent and
the Note Claimholders shall have the right to enforce rights, exercise remedies
(including set-off and the right to credit bid their debt) and make, in
connection therewith (including voluntary Dispositions of Notes Priority
Collateral by the respective Grantors after a Note Default) determinations
regarding the release, disposition, or restrictions with respect to the Notes
Priority Collateral without any consultation with or the consent of the ABL
Agent or any ABL Claimholder subject to the Notes Agent’s and the Note
Claimholders’ obligations under Sections 3.3 and 3.4; provided,
however, that the Lien securing the ABL Obligations shall remain on the
Proceeds (other than those properly applied to the Note Obligations in
accordance with the Note Documents) of such Collateral released or disposed of
subject to the relative priorities described in Section 2.1.  In exercising rights and remedies with
respect to the Notes Priority Collateral, the Notes Agent and the Note
Claimholders may enforce the provisions of the Note Documents and exercise
remedies thereunder, all in such order and in such manner as they may determine
in the exercise of their sole discretion subject to the Notes Agent’s and the
Note Claimholders’ obligations under Sections 3.3 and 3.4.  Such exercise and enforcement shall include
the rights of an agent appointed by them to sell or otherwise dispose of the
Notes Priority Collateral upon foreclosure, to incur expenses in connection with
such sale or disposition, and to exercise all the rights and remedies of a
secured creditor under the UCC and of a secured creditor under the Bankruptcy
Laws of any applicable jurisdiction.

 

(c)           Notwithstanding anything to
the contrary contained herein, the ABL Agent and any ABL Claimholder may:

 

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

 

(ii)           take any action
(not adverse to the priority status of the Liens on the Notes Priority
Collateral, or the rights of the Notes Agent or any of the Note Claimholders to
exercise rights, powers and/or remedies in respect thereof, including those
under Article VI) in order to create, perfect, preserve or protect
(but, subject to the provisions of Sections 3.3 and 3.4, not
enforce) its Lien on any of the Notes Priority Collateral;

 

(iii)          file any
necessary responsive or defensive pleadings in opposition to any motion, claim,
adversary proceeding or other pleading made by any person objecting to or
otherwise seeking the disallowance of the claims of the ABL Claimholders,
including 

 

23

 

any
claims secured by the Notes Priority Collateral, if any, in each case in
accordance with the terms of this Agreement;

 

(iv)          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 or applicable law (including the
Bankruptcy Laws of any applicable jurisdiction) and any pleadings, objections,
motions or agreements which assert rights or interests available to secured
creditors solely with respect to the ABL Priority Collateral;

 

(v)           vote on any
Plan of Reorganization, file any proof of claim, make other filings and make
any arguments and motions (including in support of or opposition to, as
applicable, the confirmation or approval of any Plan of Reorganization) that
are, in each case, in accordance with the terms of this Agreement.  Without limiting the generality of the
foregoing or of the other provisions of this Agreement, any vote to accept, and
any other act to support the confirmation or approval of, any Non-Conforming
Plan of Reorganization shall be inconsistent with and, accordingly, a violation
of the terms of this Agreement, and the Notes Agent shall be entitled to have
any such vote to accept a Non-Conforming Plan of Reorganization changed and any
such support of any Non-Conforming Plan of Reorganization withdrawn;

 

(vi)          exercise any of
its rights, powers, and/or remedies with respect to any of the Notes Priority
Collateral to the extent permitted by Sections 3.2(a)(i), 3.3,
and 3.4; and

 

(vii)         take any action
described in clauses (i) through (viii) of the definition of “Enforcement.”

 

The ABL Agent, on behalf of the ABL
Claimholders, agrees that no ABL Claimholder will take or receive any Notes
Priority Collateral (including Proceeds) in connection with the exercise of any
right or remedy (including set-off) with respect to any Notes Priority
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 Note Obligations has occurred,
except as expressly provided in Sections 3.2(a)(i), 3.3, 3.4
and 3.5 and clause (vi) of this Section 3.2(c), the
sole right of the ABL Agent and the ABL Claimholders with respect to the Notes
Priority Collateral is to hold a Lien on such Collateral pursuant to the ABL
Security Documents for the period and to the extent granted therein and to
receive a share of the Proceeds thereof, if any, in accordance with Section 4.1.

 

(d)           Except as otherwise
specifically set forth in Sections 3.2(a) and 3.5 and Article VI,
the ABL Agent and the ABL Claimholders may exercise rights and remedies as unsecured
creditors against any Grantor and may exercise rights and remedies with respect
to the ABL Priority Collateral, in each case, in accordance with the terms of
the ABL Loan Documents and applicable law; provided, however,
that in the event that any the ABL Agent or ABL Claimholder becomes a judgment
Lien creditor in respect of Notes Priority Collateral as a result of its enforcement
of its rights as an unsecured creditor with respect to the ABL Obligations,
such 

 

24

 

judgment Lien shall be subject to the terms
of this Agreement for all purposes (including in relation to the Note
Obligations) as the other Liens securing the ABL Obligations are subject to
this Agreement.

 

(e)           Except as provided in Section 5.3(c),
nothing in this Agreement shall prohibit the receipt by the ABL Agent or any
ABL Claimholders of the required payments of interest, principal and other
amounts owed in respect of the ABL Obligations so long as such receipt is not
the direct or indirect result of the exercise by the ABL Agent or any ABL
Claimholders of rights or remedies as a secured creditor (including set-off)
with respect to Notes Priority Collateral or enforcement in contravention of
this Agreement of any Lien held by any of them. 
Nothing in this Agreement impairs or otherwise adversely affects any
rights or remedies the Notes Agent or the Note Claimholders may have against
the Grantors under the Note Documents.

 

3.3.         Collateral Access Rights.

 

(a)           The ABL Agent and the Notes
Agent agree not to commence Enforcement or Going Out of Business Sale until an
Enforcement Notice has been given to the other Agent.  Subject to the provisions of Sections 3.1
and 3.2, either Agent may join in any judicial proceedings commenced by
the other Agent to enforce Liens on the Collateral, provided that
neither Agent, nor the other ABL Claimholders or the other Note Claimholders,
as applicable, shall interfere with the Enforcement actions of the other with
respect to Collateral in which such party has the priority Lien in accordance
with Section 2.1 and Section 2.2.

 

(b)           If the Notes Agent, or any
agent or representative of the Notes Agent, or any receiver, shall, after any
Note Default, obtain possession or physical control of any of the Mortgaged
Premises, the Notes Agent shall promptly notify the ABL Agent in writing of
that fact, and the ABL Agent shall, within ten (10) Business Days
thereafter, notify the Notes Agent in writing as to whether the ABL Agent
desires to exercise access rights under this Agreement.  In addition, if the ABL Agent, or any agent
or representative or the ABL Agent, or any receiver, shall obtain possession or
physical control of any of the Mortgaged Premises or any of the tangible Notes
Priority Collateral located on any premises other than a Mortgaged Premises or
control over any intangible Notes Priority Collateral, following the delivery
to the Note Agent of an Enforcement Notice, then the ABL Agent shall promptly
notify the Note Agent in writing that the ABL Agent is exercising its access
rights under this Agreement and its rights under Section 3.4 under
either circumstance.  Upon delivery of
such notice by the ABL Agent to the Notes Agent, the parties shall confer in
good faith to coordinate with respect to the ABL Agent’s exercise of such
access rights.  Consistent with the
definition of “Access Period,” access rights will apply to differing parcels of
Mortgaged Premises at differing times, in which case, a differing Access Period
will apply to each such property.

 

(c)           During any pertinent Access
Period, the ABL Agent and the Issuers and their Subsidiaries, with the consent
of the ABL Agent in connection with a Going Out of Business Sale, and their
agents, representatives and designees shall have an irrevocable, non-exclusive
right to have access to, and a rent-free right to use, the Notes Priority
Collateral for the purpose of (i) arranging for and effecting the sale or
disposition of ABL Priority Collateral located on such parcel, including the production,
completion, packaging and other preparation of such ABL Priority Collateral for
sale or disposition, (ii) selling (by public auction, private sale or 

 

25

 

a “store closing”, Going Out of Business Sale or similar sale, whether
in bulk, in lots or to customers in the ordinary course of business or
otherwise and which sale may include augmented Inventory of the same type sold
in any Grantor’s business), (iii) storing or otherwise dealing with the
ABL Priority Collateral, in each case without notice to, the involvement of or
interference by the Notes Agent or any Note Claimholder or liability to the
Notes Agent or any Note Claimholder. 
During any such Access Period, the ABL Agent and its representatives
(and persons employed on their behalf), may continue to operate, service,
maintain, process and sell the ABL Priority Collateral, as well as to engage in
bulk sales of ABL Priority Collateral. 
The ABL Agent shall take proper and reasonable care under the
circumstances of any Notes Priority Collateral that is used by the ABL Agent
during the Access Period and repair and replace any damage (ordinary
wear-and-tear excepted) caused by the ABL Agent or its agents, representatives
or designees and the ABL Agent shall comply with all applicable laws in all
material respects in connection with its use or occupancy of the Notes Priority
Collateral.  The ABL Agent and the ABL
Claimholders shall reimburse the Notes Agent and the Note Claimholders for any
injury or damage to Persons or property (ordinary wear-and-tear excepted)
caused by the acts or omissions of Persons under its control; provided, however,
that the ABL Agent and the ABL Claimholders will not be liable for any
diminution in the value of the Mortgaged Premises caused by the absence of the
ABL Priority Collateral therefrom.  In no
event shall the ABL Claimholders or the ABL Agent have any liability to the
Note Claimholders and/or to the Notes Agent hereunder as a result of any
condition (including any environmental condition, claim or liability) on or
with respect to the Notes Priority Collateral existing prior to the date of the
exercise by the ABL Agent) of its rights under this Agreement.  The ABL Agent and the Notes 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 Notes Agent
to show the Notes Priority Collateral to prospective purchasers and to ready
the Notes Priority Collateral for sale.

 

(d)           Consistent with the
definition of the term “Access Period,” if any order or injunction is issued or
stay is granted or is otherwise effective by operation of law that prohibits
the ABL Agent from exercising any of its rights hereunder, then the Access Period
granted to the ABL 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 in the applicable Access Period or Use Period, as the
case may be.  The Notes Agent shall not
foreclose or otherwise sell or dispose of any of the Notes Priority Collateral
during the Access Period or Use Period, as applicable, unless the buyer agrees
in writing to acquire the Notes Priority Collateral subject to the terms of Section 3.3
and Section 3.4 of this Agreement and agrees therein to comply with
the terms of this Section 3.3. 
The rights of ABL Agent and the ABL Claimholders under this Section 3.3
and Section 3.4 during the Access Period or Use Period shall
continue notwithstanding such foreclosure, sale or other disposition by the
Notes Agent.

 

(e)           The ABL Agent and the ABL
Claimholders shall have the right to bring an action to enforce their rights
under this Section 3.3 and Section 3.4, including,
without limitation, an action seeking possession of the applicable Collateral
and/or specific performance of this Section 3.3 and Section 3.4.

 

3.4.         Notes Priority Collateral Rights/Access to
Information.  For the
purposes of enabling the ABL Agent to exercise rights and remedies under this
Agreement during the Enforcement Period, the Notes Agent and each Grantor
hereby grants (to the full extent of their respective 

 

26

 

rights and interests) the ABL Agent and its agents, representatives and
designees an irrevocable, non-exclusive, royalty-free, rent-free license and
lease (which will be binding on any successor or assignee of any Notes Priority
Collateral) to use all of the Notes Priority Collateral to collect all Accounts
included in ABL Priority Collateral, to copy, use, or preserve any and all
information relating to any of the ABL Priority Collateral, and to complete the
manufacture, packaging, advertising for sale and sale of (i) work-in-process,
(ii) raw materials and (iii) complete inventory; provided, however,
the royalty-free, rent-free license and lease with respect to the applicable
Notes Priority Collateral, shall immediately expire upon the end of (1) the
Access Period applicable to such Notes Priority Collateral located on any
Mortgaged Premises and (2) the applicable Use Period with respect to any
Notes Priority Collateral not located on any Mortgaged Premises; provided,
further, that such expiration shall be without prejudice to the sale or other
disposition of the ABL Priority Collateral in accordance with applicable law.

 

3.5.         Set-Off and Tracing of and Priorities in Proceeds.  The Notes Agent, on behalf of the Note
Claimholders, acknowledges and agrees that, to the extent the Notes Agent or
any Note Claimholder exercises its rights of set-off against any ABL Priority
Collateral, the amount of such set-off shall be held and distributed pursuant
to Section 4.1.  The ABL
Agent, on behalf of the ABL Claimholders, acknowledges and agrees that, to the
extent the ABL Agent or any ABL Claimholder exercises its rights of set-off
against any Notes Priority Collateral, the amount of such set-off shall be held
and distributed pursuant to Section 4.1.  The ABL Agent, for itself and on behalf of
the ABL Claimholders, and the Notes Agent, for itself and on behalf of the Note
Claimholders, further agree that prior to an issuance of an Enforcement Notice
or the commencement of any Insolvency or Liquidation Proceeding, any Proceeds
of Collateral, whether or not deposited under Account Agreements, which are
used by any Grantor to acquire other property which is Collateral shall not
(solely as between the Agents, the ABL Claimholders and the Note Claimholders)
be treated as Proceeds of Collateral for purposes of determining the relative
priorities in the Collateral which was so acquired.  In addition, unless and until the Discharge
of ABL Obligations occurs, subject to Section 4.2, the Notes Agent
and the Note Claimholders each hereby consents to the application, prior to the
receipt by the ABL Agent of an Enforcement Notice issued by the Notes Agent, of
cash or other Proceeds of Collateral, deposited under Account Agreements to the
repayment of ABL Obligations pursuant to the ABL Loan Documents.

 

IV.

PAYMENTS.

 

4.1.         Application of Proceeds.

 

(a)          So long as the Discharge of
ABL Obligations has not occurred, whether or not any Insolvency or Liquidation
Proceeding has been commenced by or against any Grantor, all ABL Priority
Collateral or Proceeds thereof received in connection with the sale or other disposition
of, or collection on, such ABL Priority Collateral as a result of the exercise
of remedies or other Enforcement or Going Out of Business Sale by either Agent
or any ABL Claimholders or Note Claimholders, shall be delivered to the ABL
Agent and shall be applied or further distributed by the ABL Agent to or on
account of the ABL Obligations in such order, if any, as specified in the
relevant ABL Loan Documents or as a court of competent jurisdiction may otherwise
direct.  Upon the Discharge of ABL
Obligations, the ABL Agent shall deliver to the Notes Agent any Collateral and
Proceeds of Collateral received or delivered to it pursuant to the 

 

27

 

preceding sentence, in the same form as
received, with any necessary endorsements, to be applied by the Notes Agent to
the Note Obligations in such order as specified in the Note Security Documents
or as a court of competent jurisdiction may otherwise direct.

 

(b)           So long as the Discharge of
Note Obligations has not occurred, whether or not any Insolvency or Liquidation
Proceeding has been commenced by or against any Grantor, all Notes Priority
Collateral or Proceeds thereof received in connection with the sale or other disposition
of, or collection on, such Notes Priority Collateral as a result of the
exercise of remedies or other Enforcement by either Agent or any Note
Claimholders or ABL Claimholders, shall be delivered to the Notes Agent and
shall be applied by the Notes Agent to the Note Obligations in such order as
specified in the relevant Note Documents or as a court of competent
jurisdiction may otherwise direct.  Upon
the Discharge of Note Obligations, the Notes Agent shall deliver to the ABL
Agent any Collateral and Proceeds of Collateral received or delivered to it
pursuant to the preceding sentence, in the same form as received, with any
necessary endorsements to be applied by the ABL Agent to the ABL Obligations in
such order as specified in the ABL Security Documents or as a court of
competent jurisdiction may otherwise direct.

 

4.2.          Payments Over in Violation of Agreement.  So long as neither the Discharge of ABL
Obligations nor the Discharge of Note Obligations has occurred, whether or not
any Insolvency or Liquidation Proceeding has been commenced by or against any
Grantor, any Collateral (including assets or Proceeds subject to Liens referred
to in the final sentence of Section 2.3) received by either Agent or any
Note Claimholders or ABL Claimholders in connection with the exercise of any
right, power, or remedy (including set-off) relating to the Collateral in
contravention of this Agreement shall be segregated and held in trust and
forthwith paid over to the appropriate Agent for the benefit of the Note
Claimholders or the ABL Claimholders, as applicable, in the same form as
received, with any necessary endorsements or as a court of competent jurisdiction
may otherwise direct.  Each Agent is
hereby authorized by the other Agent to make any such endorsements as agent for
the other Agent or any Note Claimholders or ABL Claimholders, as
applicable.  This authorization is
coupled with an interest and is irrevocable until the Discharge of ABL
Obligations and Discharge of Note Obligations.

 

4.3.          Application of Payments.  Subject to the other terms of this Agreement,
all payments received by (a) the ABL Agent or the ABL Claimholders may be
applied, reversed and reapplied, in whole or in part, to the ABL Obligations to
the extent provided for in the ABL Loan Documents and (b) the Notes Agent
or the Note Claimholders may be applied, reversed and reapplied, in whole or in
part, to the Note Obligations to the extent provided for in the Note Documents.

 

4.4.          Revolving Nature of ABL Obligations.  The Notes Agent, on behalf of the Note
Claimholders, acknowledges and agrees that the ABL Credit Agreement includes a
revolving commitment and that the amount of the ABL Obligations that may be outstanding
at any time or from time to time may be increased or reduced and subsequently
reborrowed.

 

V.

OTHER AGREEMENTS.

 

5.1.          Releases.

 

28

 

(a)           (i)  If, in connection
with (A) any exercise of remedies or Enforcement (including as provided
for in Section 3.1(b) or Section 6.8(a)) or any
Going Out of Business Sale, or (B) any sale, transfer or other disposition
of all or any portion of the ABL Priority Collateral, so long as such sale,
transfer or other disposition is then not prohibited by the ABL Documents (or
consented to by the requisite ABL Lenders) or by the Note Documents (or consented
to by the requisite Noteholders), irrespective of whether an ABL Default has
occurred and is continuing, the ABL Agent, on behalf of any of the ABL
Claimholders, releases any of its Liens on any part of the ABL Priority
Collateral, then the Liens, if any, of the Notes Agent, for the benefit of the
Note Claimholders, on the Collateral sold or disposed of in connection
therewith, shall be automatically, unconditionally and simultaneously released;
provided that, to the extent the Proceeds of such ABL Priority
Collateral are not applied to reduce ABL Obligations, the Notes Agent shall
retain a Lien on such Proceeds in accordance with the terms of this
Agreement.  The Notes Agent, on behalf of
the Note Claimholders, promptly shall execute and deliver to the ABL Agent or
such Grantor such termination statements, releases and other documents as the
ABL Agent or such Grantor may request in writing to effectively confirm such release.

 

(ii)           If, in connection with (A) any
exercise of remedies or Enforcement (including as provided for in Sections 3.2(b) or
Section 6.8(b)), or (B) any sale, transfer or other disposition of
all or any portion of the Notes Priority Collateral, so long as such sale,
transfer or other disposition is then not prohibited by the Note Documents (or
consented to by the requisite Noteholders) or by the ABL Documents (or
consented to by the requisite ABL Lenders), irrespective of whether a Note
Default has occurred and is continuing, the Notes Agent, on behalf of any of
the Note Claimholders, releases any of its Liens on any part of the Notes
Priority Collateral, then the Liens, if any, of the ABL Agent, for the benefit
of the ABL Claimholders, on the Collateral sold or disposed of in connection
therewith, shall be automatically, unconditionally and simultaneously released;
provided that the provisions of Section 3.3 and 3.4 shall continue, to the
extent such Sections are applicable at the time of such sale, transfer or other
disposition; provided, further that, to the extent the Proceeds of such Notes
Priority Collateral are not applied to reduce Note Obligations, the ABL Agent
shall retain a Lien on such Proceeds in accordance with the terms of this
Agreement.  The ABL Agent, on behalf of
the ABL Claimholders, promptly shall execute and deliver to the Notes Agent or
such Grantor such termination statements, releases and other documents as the
Notes Agent or such Grantor may request to effectively confirm such release.

 

(b)           Until the Discharge of ABL
Obligations and Discharge of Note Obligations shall occur, the ABL Agent, on
behalf of the ABL Claimholders, and the Notes Agent, on behalf of the Note
Claimholders, as applicable, hereby irrevocably constitutes and appoints the
other Agent and any officer or agent of the 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 the other Agent or such holder or
in the Agent’s own name, from time to time in such Agent’s discretion exercised
in good faith, 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.

 

29

 

(c)           Until the Discharge of ABL
Obligations and Discharge of Note Obligations shall occur, to the extent that
the Agents or the ABL Claimholders or the Note Claimholders (i) have released
any Lien on Collateral and such Lien is later reinstated or (ii) obtain
any new Liens from any Grantor, then, in accordance with Section 2.3,
the Grantors shall grant a Lien on any such Collateral, subject to the Lien
priority provisions of this Agreement, to the other Agent, for the benefit of
the ABL Claimholders or Note Claimholders, as applicable.

 

5.2.          Insurance.

 

(a)           Unless and until the
Discharge of ABL Obligations and subject to the terms of, and the rights of the
Grantors under, the ABL Loan Documents, the ABL Agent, on behalf of the ABL
Claimholders, shall have the sole and exclusive right to adjust settlement for
any insurance policy covering the ABL Priority Collateral in the event of any
loss thereunder and to approve any award granted in any condemnation or similar
proceeding (or any deed in lieu of condemnation) affecting such
Collateral.  Until the Discharge of ABL
Obligations has occurred, (i) 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 the ABL Priority Collateral and to the extent required by the ABL Loan
Documents shall be paid to the ABL Agent for the benefit of the ABL Claimholders
pursuant to the terms of the ABL Loan Documents (including, without limitation,
for purposes of cash collateralization of letters of credit) and thereafter, if
the Discharge of ABL Obligations has occurred, and subject to the rights of the
Grantors under the Note Security Documents, to the Notes Agent for the benefit
of the Note Claimholders to the extent required under the Note Security
Documents and then, to the extent no Note 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 (ii) if the
Notes Agent or any Note Claimholders shall, at any time, receive any Proceeds
of any such insurance policy or any such award or payment with respect to ABL
Priority Collateral in contravention of this Agreement, it shall segregate and
hold in trust and forthwith pay such Proceeds over to the ABL Agent in
accordance with the terms of Section 4.2.

 

(b)           Unless and until the
Discharge of Note Obligations has occurred, subject to the terms of, and the
rights of the Grantors under, the Note Documents, (i) the Notes Agent, on
behalf of the Note Claimholders, shall have the sole and exclusive right to adjust
settlement for any insurance policy covering the Notes Priority Collateral in
the event of any loss thereunder and to approve any award granted in any condemnation
or similar proceeding (or any deed in lieu of condemnation) affecting 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
the Notes Priority Collateral and to the extent required by the Note Documents
shall be paid to the Notes Agent for the benefit of the Note Claimholders
pursuant to the terms of the Note Documents and thereafter, if the Discharge of
Note Obligations has occurred, and subject to the rights of the Grantors under
the ABL Loan Documents, to the ABL Agent for the benefit of the ABL Claimholders
to the extent required under the ABL Security Documents and then, to the extent
no ABL 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 ABL Agent or any ABL Claimholders
shall, at any time, receive any Proceeds of any such insurance policy or any
such award or payment with respect to Notes Priority Collateral in
contravention of 

 

30

 

this Agreement, it shall segregate and hold
in trust and forthwith pay such Proceeds over to the Notes Agent in accordance
with the terms of Section 4.2.

 

(c)           To effectuate the foregoing,
and to the extent that the pertinent insurance company agrees to issue such
endorsements, the Agents 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 any policies which insure Collateral hereunder.

 

5.3.          Amendments to ABL Loan Documents and Note Documents;
Refinancing.

 

(a)           Subject to Sections 5.3(c) and
5.3(d), the ABL Loan Documents and Note Documents may be amended,
supplemented or otherwise modified in accordance with their terms, all without
affecting the Lien subordination or other provisions of this Agreement.  The ABL Obligations may be Refinanced without
notice to, or the consent of, the Notes Agent or the Note Claimholders and
without affecting the Lien subordination or other provisions of this Agreement,
and the Note Obligations may be Refinanced without notice to, or consent of, the
ABL Agent or the ABL Claimholders and without affecting the Lien subordination
and other provisions of this Agreement so long as such Refinancing is on terms
and conditions that would not violate the Note Documents or the ABL Loan
Documents, each as in effect on the date hereof (or, if less restrictive to the
Issuers, as in effect on the date of such amendment or Refinancing); provided,
however, that, in each case, the lenders or holders of such Refinancing
debt bind themselves in a writing addressed to the Notes Agent and the Note
Claimholders or the ABL Agent and the ABL Claimholders, as applicable, to the
terms of this Agreement; provided  further, however, that,
if such Refinancing debt is secured by a Lien on any Collateral the holders of
such Refinancing debt shall be deemed bound by the terms hereof regardless of
whether or not such writing is provided. 
For the avoidance of doubt, the sale or other transfer of Indebtedness
is not restricted by this Agreement but the provisions of this Agreement shall
be binding on all holders of ABL Obligations and Note Obligations.

 

(b)           Subject to Sections 5.3(c) and
5.3(d), the ABL Agent and the Notes Agent shall each use good faith
efforts to notify the other party of any written amendment or modification to
the ABL Documents and Note Documents, 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.

 

(c)           Without the consent of the
Notes Agent, the ABL Claimholders will not be entitled to agree (and will not
agree) to any amendment to or modification of the ABL Loan Documents, whether
in a Refinancing or otherwise, that is not permitted by the Indenture as in
effect on the date hereof (or, if less restrictive to the ABL Claimholders, on
the date of such amendment or modification).

 

(d)           Without the consent of the
ABL Agent, the Notes Agent and the Note Claimholders will not be entitled to
agree (and will not agree) to any amendment to or modification of the Note
Documents, whether in a Refinancing or otherwise, that is not permitted by the
ABL Credit Agreement as in effect on the date hereof (or, if less restrictive
to the Note Claimholders, on the date of such amendment or modification).

 

31

 

(e)          So long as the Discharge
of ABL Obligations has not occurred, the Notes Agent agrees that each
applicable Note Security Document that grants a Lien on any material Collateral
shall include the following language (or similar language acceptable to the ABL
Agent):  “Notwithstanding anything herein
to the contrary, the liens and security interests granted to U.S. Bank National
Association, as Trustee, pursuant to this Agreement and the exercise of any
right or remedy by U.S. Bank National Association, as Trustee hereunder, are
subject to the provisions of the Intercreditor Agreement dated as of October 9,
2009 (as amended, restated, supplemented or otherwise modified from time to
time, the “Intercreditor Agreement”), among Bank of America, N.A., as
the ABL Agent, U.S. Bank National Association, as Trustee and as Notes Agent
and the Grantors (as defined in the Intercreditor Agreement) from time to time
party thereto.  In the event of any
conflict between the terms of the Intercreditor Agreement and the terms of this
Agreement, the terms of the Intercreditor Agreement shall govern and control.”

 

(f)            So long as the
Discharge of Note Obligations has not occurred, the ABL Agent agrees that each
applicable ABL Security Document executed on or after the date hereof that
grants a Lien on any material Collateral shall include the following language
(or similar language acceptable to the Note Agent):  “Notwithstanding anything herein to the
contrary, the liens and security interests granted to the Agent pursuant to this
Agreement and the exercise of any right or remedy by the Agent hereunder, are
subject to the provisions of the Intercreditor Agreement dated as of October 9,
2009 (as amended, restated, supplemented or otherwise modified from time to
time, the “Intercreditor Agreement”), among the Administrative Agent, as
ABL Agent, U.S. Bank National Association, as Trustee and as Notes Agent and
the Grantors (as defined in the Intercreditor Agreement) from time to time
party thereto.  In the event of any
conflict between the terms of the Intercreditor Agreement and the terms of this
Agreement, the terms of the Intercreditor Agreement shall govern and control.”

 

5.4.         Bailees for Perfection.

 

(a)           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) to the extent that possession
or control thereof is taken to perfect a Lien thereon (such Collateral, which
shall include, without limitation, Deposit Accounts, Securities Accounts and
Capital Stock, being the “Pledged Collateral”) as (i) in the case
of the ABL Agent, the collateral agent for the ABL Claimholders under the ABL
Loan Documents or, in the case of the Notes Agent, the collateral agent for the
Note Claimholders under the Note Documents and (ii) gratuitous bailee for
the benefit of the other Agent (such bailment being intended, among other
things, to satisfy the requirements of Sections 8-301(a)(2) and 9-313(c) of
the UCC) and any assignee solely for the purpose of perfecting the security interest
granted under the ABL Loan Documents and the Note Documents, respectively,
subject to the terms and conditions of this Section 5.4.  The Notes Agent and the Note Claimholders
hereby appoint the ABL Agent as their agent for the purposes of perfecting
their security interest in all Deposit Accounts and Securities Accounts of the
Issuers and the Company Subsidiaries. 
The ABL Agent hereby accepts such appointment and acknowledges and
agrees that it shall act for the benefit of the Notes Agent and the other Note
Claimholders under each Account Agreement and that any Proceeds received by the
ABL Agent under any Account Agreement shall be applied in accordance with Article IV.  In furtherance of the foregoing, each Grantor
hereby grants (x) a security interest in the Pledged Collateral to the
Notes 

 

32

 

Agent for the benefit of the
ABL Claimholders and (y) a security interest in the Pledged Collateral
(other than securities of the Issuers or the Company Subsidiaries to the extent
such security interest would require the filing of financial statements with
the Securities and Exchange Commission pursuant to Rule 3-16 of Regulation
S-X under the Securities Act of 1933, as amended) to the ABL Agent for the
benefit of the Note Claimholders.

 

(b)           Neither Agent shall
have any obligation whatsoever to the other Agent, to any other ABL
Claimholder, or to any other Note Claimholder to ensure that the Pledged Collateral
is genuine or owned by any of the Grantors or to preserve rights or benefits of
any Person except as expressly set forth in this Section 5.4.  The duties or responsibilities of the
respective Agents under this Section 5.4 shall be limited solely to
holding the Pledged Collateral as bailee in accordance with this Section 5.4
and delivering the Pledged Collateral or Proceeds thereof upon a Discharge of
ABL Obligations or Discharge of Note Obligations, as applicable, as provided in
paragraph (d) below.

 

(c)           Neither Agent acting
pursuant to this Section 5.4 shall have by reason of the ABL Loan
Documents, the Note Documents, this Agreement or any other document a fiduciary
relationship in respect of the other Agent, any other ABL Claimholder or any
other Note Claimholder.

 

(d)           Upon the Discharge of
ABL Obligations or the Discharge of Note Obligations, as applicable, the Agent
under the ABL Credit Agreement or Note Agreement, as applicable, that has been
discharged shall deliver the remaining Pledged Collateral (if any) together
with any necessary endorsements, first, to the other Agent to the extent
the other Obligations remain outstanding, and second, to the applicable
Grantor to the extent the Discharge of ABL Obligations and the Discharge of
Note Obligations have occurred (in each case, so as to allow such Person to
obtain possession or control of such Pledged Collateral) or as otherwise
required by law.  Each Agent further
agrees to take all other action reasonably requested by the other Agent in
connection with the other Agent obtaining a first-priority interest in the
Collateral or as a court of competent jurisdiction may otherwise direct.  Notwithstanding anything to the contrary
contained in this Agreement, any obligation of the Agent, which has been
discharged, to make any delivery to the other Agent under this Section 5.4(d) is
subject to (i) the order of any court of competent jurisdiction, or (ii) any
automatic stay imposed in connection with any Insolvency or Liquidation
Proceeding.

 

(e)           Subject to the terms of
this Agreement, (i) so long as the Discharge of ABL Obligations has not
occurred, the ABL 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 ABL Loan Documents, but only to the extent that such
Collateral constitutes ABL Priority Collateral, as if the Liens of the Notes
Agent on behalf of the Note Claimholders did not exist, and (ii) so long
as the Discharge of Note Obligations has not occurred, the Notes 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 Note Documents, but
only to the extent that such Collateral constitutes Notes Priority Collateral,
as if the Liens of the ABL Agent on behalf of the ABL Claimholders did not
exist.

 

33

 

VI.

INSOLVENCY OR LIQUIDATION PROCEEDINGS.

 

6.1.         Finance and Sale Issues.  The Notes Agent, on behalf of the Note
Claimholders, hereby agrees that, until the Discharge of ABL Obligations has
occurred, if any Grantor shall be subject to any Insolvency or Liquidation
Proceeding and the ABL Agent shall desire to permit the use of “Cash Collateral”
(as such term is defined in Section 363(a) of the Bankruptcy Code)
constituting ABL Priority Collateral or to permit any Grantor to obtain
financing, whether from the ABL Claimholders or any other Person under Section 364
of the Bankruptcy Code or any similar Bankruptcy Law (“DIP Financing”)
secured by a Lien on ABL Priority Collateral, then any Note Claimholder will
not be entitled to raise (and will not raise or support any Person in raising),
but instead shall be deemed to have hereby irrevocably and absolutely waived,
any objection to, and shall not otherwise in any manner be entitled to oppose
or will oppose or support any Person in opposing, such Cash Collateral use or
DIP Financing (including, except as expressly provided below, that the Note
Claimholders are entitled to adequate protection of their interest in the
Collateral as a condition thereto) so long as such Cash Collateral use or DIP Financing
meets the following requirements:  (i) the
Notes Agent and the other Note Claimholders retain a Lien on the Collateral
and, with respect to the Notes Priority Collateral, with the same priority as
existed prior to the commencement of the Insolvency or Liquidation Proceeding, (ii) to
the extent that the ABL Agent is granted adequate protection in the form of a
Lien, the Notes Agent is permitted to seek a Lien (without objection from the
ABL Agent or any ABL Claimholder) on Collateral arising after the commencement
of the Insolvency or Liquidation Proceeding (so long as, with respect to ABL Priority
Collateral, such Lien is junior to the Liens securing such DIP Financing and
any other Liens in favor of the ABL Agent), (iii) the terms of the Cash
Collateral use or the DIP Financing require that any Lien on the Notes Priority
Collateral to secure such DIP Financing is subordinate to the Lien of the Notes
Agent securing the Note Obligations with respect thereto and (iv) the
terms of such DIP Financing or use of Cash Collateral do not require any
Grantor to seek approval for any Plan of Reorganization that is inconsistent
with this Agreement.  The Notes Agent
shall be required to subordinate and will subordinate its Liens in the ABL
Priority Collateral to the Liens securing such DIP Financing (and all
obligations relating thereto, including any “carve-out” granting administrative
priority status or Lien priority to secure repayment of fees and expenses of
professionals retained by any debtor or creditors’ committee) and, consistent
with the preceding provisions of this Section 6.1, will not request
adequate protection or any other relief in connection therewith (except as expressly
provided in clause (ii) above); provided, however, if the
Liens securing the DIP Financing rank junior to the Liens securing the ABL Obligations,
the Notes Agent shall be required to subordinate its Liens in the ABL Priority
Collateral to the Liens securing such DIP Financing.  The Notes Agent, on behalf of itself and the
Note Claimholders, agrees that no such Person shall provide to such Grantor any
DIP Financing to the extent that the Notes Agent or any Note Claimholder would,
in connection with such financing, be granted a Lien on the ABL Priority Collateral
senior to or pari passu with the Liens of the ABL Agent.  The ABL Agent, on behalf of itself and the
ABL Claimholders, agrees that no such Persons shall provide to such Grantor any
DIP Financing to the extent that the ABL Agent or any ABL Claimholder would, in
connection with such financing, be granted a Lien on the Notes Priority
Collateral senior to or pari passu with the Liens of the Notes Agent.

 

34

 

6.2.         Relief from the Automatic
Stay.

 

(a)           Until the Discharge of
ABL Obligations, the Notes Agent, on behalf of the other Note 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 ABL Priority Collateral, without the prior written
consent of the ABL Agent (given or not given in its sole and absolute
discretion), unless (i) the ABL Agent already has filed a motion (which
remains pending) for such relief with respect to its interest in such ABL
Priority Collateral and (ii) a corresponding motion, in the reasonable
judgment of the Notes Agent, must be filed for the purpose of preserving the
Notes Agent’s ability to receive residual distributions pursuant to Section 4.1,
although the Note Claimholders shall otherwise remain subject to the
restrictions in Section 3.1 following the granting of any such
relief from the automatic stay.

 

(b)           Until the Discharge of
Note Obligations has occurred, the ABL Agent, on behalf of the other ABL
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 Notes Priority Collateral (other than
to the extent such relief is required to exercise its rights under Sections
3.3 and 3.4), without the prior written consent of the Notes Agent
(given or not given in its sole and absolute discretion), unless (i) the
Notes Agent already has filed a motion (which remains pending) for such relief
with respect to its interest in the Notes Priority Collateral and (ii) a
corresponding motion, in the reasonable judgment of the ABL Agent, must be
filed for the purpose of preserving the ABL Agent’s ability to receive residual
distributions pursuant to Section 4.1, although the ABL Agent shall
otherwise remain subject to the restrictions in Section 3.2
following the granting of any such relief from the automatic stay.

 

6.3.         Adequate Protection.

 

(a)           The Notes Agent, on
behalf of itself and the Note Claimholders, agrees that none of them shall be
entitled to contest and none of them shall contest (or support any other Person
contesting) (but instead shall be deemed to have hereby irrevocably,
absolutely, and unconditionally waived any right):

 

(i)       any request by the ABL Agent or the other ABL
Claimholders for relief from the automatic stay with respect to the ABL Priority
Collateral; or

 

(ii)      any request by the ABL Agent or the other ABL
Claimholders for adequate protection with respect to the ABL Priority Collateral
(except to the extent any such adequate protection is a payment from Notes
Priority Collateral); or

 

(iii)     any objection by the ABL Agent or the other ABL
Claimholders to any motion, relief, action or proceeding based on the ABL Agent
or the other ABL Claimholders claiming a lack of adequate protection with
respect to the ABL Priority Collateral.

 

(b)           The ABL Agent, on
behalf of itself and the ABL Claimholders, agrees that none of them shall be
entitled to contest and none of them shall contest (or support any other 

 

35

 

Person contesting) (but instead
shall be deemed to have hereby irrevocably, absolutely, and unconditionally
waived any right):

 

(i)            any request by the Notes Agent or the other Note
Claimholders for relief from the automatic stay with respect to the Notes
Priority Collateral; or

 

(ii)           any request by the Notes Agent or the Note
Claimholders for adequate protection with respect to the Notes Priority
Collateral (except to the extent any such adequate protection is a payment from
ABL Priority Collateral); or

 

(iii)          any objection by the Notes Agent or the Note
Claimholders to any motion, relief, action or proceeding based on the Notes
Agent or the Note Claimholders claiming a lack of adequate protection with
respect to the Notes Priority Collateral.

 

(c)           Consistent with the
foregoing provisions in this Section 6.3, and except as provided in
Sections 6.1 and 6.7, in any Insolvency or Liquidation
Proceeding:

 

(i)            no Note Claimholder shall be entitled (and each Note
Claimholder shall be

 

deemed
to have hereby irrevocably, absolutely, and unconditionally waived any right):

 

(1) to seek or otherwise be granted any type of
adequate protection with respect to its interests in the ABL Priority
Collateral (except as expressly set forth in Section 6.1 or as may
otherwise be consented to in writing by the ABL Agent in its sole and absolute
discretion); provided, however, subject to Section 6.1,
Note Claimholders may seek and obtain adequate protection in the form of an additional
or replacement Lien on Collateral so long as (i) the ABL Claimholders have
been granted adequate protection in the form of a replacement lien on such
Collateral, and (ii) any such Lien on ABL Priority Collateral (and on any
Collateral granted as adequate protection for the ABL Claimholders in respect
of their interest in such ABL Priority Collateral) is subordinated to the Liens
of the ABL Agent in such Collateral on the same basis as the other Liens of the
Notes Agent on ABL Priority Collateral; and

 

(2) to seek or otherwise be granted any
adequate protection payments with respect to its interests in the Collateral
from Proceeds of ABL Priority Collateral (except as may be consented to in
writing by the ABL Agent in its sole and absolute discretion)

 

(ii) no ABL Claimholder shall be entitled (and
each ABL Claimholder shall be deemed to have hereby irrevocably, absolutely,
and unconditionally waived any right):

 

(1)           to seek or otherwise be granted any type of adequate
protection in respect of Notes Priority Collateral except as may be consented
to in writing by the Notes Agent in its sole and absolute discretion; provided,
however, ABL Claimholders may seek and obtain adequate protection in the
form of an additional or replacement Lien on Collateral so long as (i) the
Note Claimholders have been granted adequate protection in the form of a
replacement lien on such Collateral, and (ii) any such Lien on Notes
Priority Collateral (and on any Collateral granted as adequate protection for
the Note Claimholders in respect of their interest in such Notes Priority
Collateral) is subordinated to the Liens of 

 

36

 

the Notes Agent in such Collateral on the same basis as the other Liens
of the ABL Agent on Notes Priority Collateral; and

 

(2) to seek or otherwise be granted any
adequate protection payments with respect to its interests in the Collateral
from Proceeds of Notes Priority Collateral (except as may be consented to in
writing by the Notes Agent in its sole and absolute discretion)

 

(d)           With respect to (i) the
ABL Priority Collateral, nothing herein shall limit the rights of the Notes
Agent or the Note Claimholders from seeking adequate protection with respect to
their rights in the Notes Priority Collateral in any Insolvency or Liquidation
Proceeding (including adequate protection in the form of a cash payment,
periodic cash payments or otherwise, other than from Proceeds of ABL Priority
Collateral) so long as such request is not otherwise inconsistent with this
Agreement and (ii) the Notes Priority Collateral, nothing herein shall
limit the rights of the ABL Agent or the ABL Claimholders from seeking adequate
protection with respect to their rights in the ABL Priority Collateral in any
Insolvency or Liquidation Proceeding (including adequate protection in the form
of a cash payment, periodic cash payments or otherwise, other than from
Proceeds of Notes Priority Collateral) so long as such request is not otherwise
inconsistent with this Agreement.

 

6.4.         Avoidance Issues.  If any ABL Claimholder or Note 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 ABL Obligations or the Note Obligations, as applicable (a “Recovery”),
then such ABL Claimholders or Note Claimholders shall be entitled to a
reinstatement of ABL Obligations or the Note Obligations, as applicable, 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.  Subject to the ability of the ABL Claimholders
and the Note Claimholders, as applicable, to support or oppose confirmation or
approval of any Conforming Plan of Reorganization or to oppose confirmation or
approval of any Non-Conforming Plan of Reorganization, as provided herein, 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, both on account of ABL
Obligations and on account of Note Obligations, then, to the extent the debt
obligations distributed on account of the ABL Obligations and on account of the
Note 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)           Neither the Notes Agent
nor any Note Claimholder shall oppose or seek to challenge:

 

37

 

(i) any
claim by the ABL Agent or any ABL Claimholder for allowance in any Insolvency
or Liquidation Proceeding of ABL Obligations consisting of post-petition interest,
fees or expenses to the extent of the value of the Lien on the ABL Priority
Collateral securing any ABL Claimholder’s claim, without regard to the
existence of the Lien of the Notes Agent on behalf of the Note Claimholders on
the Collateral;

 

(ii) the payment of such expenses allowed in accordance with Section 6.6(a)(i);

 

or

 

(iii) the payment of such interest and fees allowed in accordance
with Section

 

6.6(a)(i) solely from Proceeds of ABL
Priority Collateral;

 

provided
that nothing contained in this Section 6.6(a) prohibits the
Notes Agent on behalf of the Note Claimholders from seeking adequate protection
(to the extent it has not already done so under other provisions of this
Agreement) with respect to their rights in the Notes Priority Collateral in any
Insolvency or Liquidation Proceeding if such Notes Priority Collateral is the
source of payment of post-petition expenses payable to the ABL Agent or any ABL
Claimholder.

 

(b) Neither the ABL
Agent nor any other ABL Claimholder shall oppose or seek to challenge:

 

(i) any claim by the
Notes Agent or any Note Claimholder for allowance in any Insolvency or
Liquidation Proceeding of Note Obligations consisting of post-petition interest,
fees or expenses to the extent of the value of the Lien on the Notes Priority Collateral
securing any Note Claimholder’s claim, without regard to the existence of the Lien
of the ABL Agent on behalf of the ABL Claimholders on the Collateral;

 

(ii) the payment of
such expenses allowed in accordance with Section 6.6(b)(i);

 

or

 

(iii) the payment of
such interest and fees allowed in accordance with Section 6.6(b)(i) solely
from Proceeds of Notes Priority Collateral

 

provided that
nothing contained in this Section 6.6(b) prohibits the ABL
Agent on behalf of the ABL Claimholders from seeking adequate protection (to
the extent it has not already done so under other provisions of this Agreement)
with respect to their rights in the ABL Priority Collateral in any Insolvency
or Liquidation Proceeding if such ABL Priority Collateral is the source of
payment of post-petition expenses payable to the Notes Agent or any Note Claimholder.

 

6.7.         Separate Grants of Security
and Separate Classification.  The Notes Agent, on behalf of the Note
Claimholders, and the ABL Agent on behalf of the ABL Claimholders, acknowledge
and intend that:  the grants of Liens
pursuant to the ABL Security Documents and the Note Security Documents
constitute two separate and distinct grants of Liens, and because of, among
other things, their differing rights in the Collateral, the Note Obligations
are fundamentally different from the ABL Obligations and must be separately
classified in any Plan of

 

38

 

Reorganization proposed or confirmed (or approved) in an Insolvency or
Liquidation Proceeding.  To further
effectuate the intent of the parties as provided in the immediately preceding
sentence, if it is held that the claims of the ABL Claimholders and the Note
Claimholders in respect of the Collateral constitute claims in the same class
(rather than separate classes of senior and junior secured claims), then the
ABL Claimholders and the Note Claimholders hereby acknowledge and agree that
all distributions shall be made as if there were separate classes of ABL
Obligations and Note Obligations against the Grantors (with the effect being
that, to the extent that the aggregate value of the ABL Priority Collateral or
Notes Priority Collateral is sufficient (for this purpose ignoring all claims
held by the other Secured Parties for whom such Collateral is non-priority in
accordance with Section 2.1 and Section 2.2), the ABL
Claimholders or the Note Claimholders, respectively, 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, fees or expenses that is available from each pool of
priority Collateral for each of the ABL Claimholders and the Note Claimholders,
respectively, before any distribution is made in respect of the claims held by
the other Secured Parties for whom such Collateral is non-priority, with such
other Secured Parties hereby acknowledging and agreeing to turn over to the
respective other Secured Parties amounts otherwise received or receivable by
them to the extent necessary to effectuate the intent of this sentence, even if
such turnover has the effect of reducing the aggregate recoveries.

 

6.8.         Asset Dispositions in an
Insolvency or Liquidation Proceeding.

 

(a)           Without limiting the
ABL Agent’s and the ABL Claimholders’ rights under Section 3.1(b),
neither the Notes Agent nor any other Note Claimholder shall, in any Insolvency
or Liquidation Proceeding or otherwise, oppose any sale or disposition of any
ABL Priority Collateral that is supported by the ABL Claimholders, and the
Notes Agent and each other Note Claimholder will be deemed to have irrevocably,
absolutely, and unconditionally consented under Section 363 of the
Bankruptcy Code (and otherwise) to any sale of any ABL Priority Collateral
supported by the ABL Claimholders and to have released their Liens on such
assets; provided that to the extent the Proceeds of such Collateral are
not applied to reduce ABL Obligations the Notes Agent shall retain a Lien on
such Proceeds in accordance with the terms of this Agreement.

 

(b)           Without limiting the
Notes Agent’s and the Note Claimholders’ rights under Section 3.2(b),
neither the ABL Agent nor any other ABL Claimholder shall, in any Insolvency Proceeding
or otherwise, oppose any sale or disposition of any Notes Priority Collateral
that is supported by the Note Claimholders and made subject to Section 3.3(d),
and the ABL Agent and each other ABL Claimholder will be deemed to have
consented under Section 363 of the Bankruptcy Code (and otherwise) to any
sale of any Notes Priority Collateral supported by the Note Claimholders and to
have released their Liens on such assets; provided that to the extent
the Proceeds of such Collateral are not applied to reduce Note Obligations, the
ABL Agent shall retain a Lien on such Proceeds in accordance with the terms of
this Agreement; provided  further that the ABL Agent’s and the ABL
Claimholders’ rights under Sections 3.3 and 3.4 shall survive any
such sale or disposition.

 

39

 

VII.

RELIANCE; WAIVERS; ETC.

 

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

 

7.2.         No Warranties or Liability.  The ABL Agent, on behalf of the ABL
Claimholders, acknowledges and agrees that each of the Notes Agent and the Note
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 other Note Documents, the
ownership of any Collateral or the perfection or priority of any Liens
thereon.  Except as otherwise provided in
this Agreement, the Notes Agent and the Note Claimholders will be entitled to
manage and supervise their respective loans and extensions of credit under the
Note Documents in accordance with law and as they may otherwise, in their sole
discretion, deem appropriate.  The Notes
Agent, on behalf the Note Claimholders, acknowledges and agrees that the ABL
Agent and the other ABL 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 other
ABL Loan Documents, the ownership of any Collateral or the perfection or
priority of any Liens thereon.  Except as
otherwise provided herein, the ABL Agent and the other ABL Claimholders will be
entitled to manage and supervise their respective loans and extensions of
credit under their respective ABL Loan Documents in accordance with law and as
they may otherwise, in their sole discretion, deem appropriate.  The Notes Agent and the Note Claimholders
shall have no duty to the ABL Agent or any of the ABL Claimholders, and the ABL
Agent and the other ABL Claimholders shall have no duty to the Notes Agent or
any of the other Note 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 ABL
Loan Documents and the Note 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 other ABL Claimholders or the other Note Claimholders to enforce any
provision of this Agreement or any ABL Loan Document or Note Document 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, ABL
Claimholders or Note Claimholders or by any noncompliance by any Person with
the terms, provisions and covenants 

 

40

 

of this Agreement, any of the
ABL Loan Documents or any of the Note Documents, regardless of any knowledge
thereof which the Agents or the ABL Claimholders or Note Claimholders, or any
of them, may have or be otherwise charged with.

 

(b)           Without in any way
limiting the generality of the foregoing paragraph (but subject to the rights
of the Grantors under the ABL Loan Documents and Note Documents and subject to
the provisions of Sections 5.3(a), 5.3(c), and, as applicable, 5.3(d)),
the Agents, the other ABL Claimholders and the other Note Claimholders may, at
any time and from time to time in accordance with the ABL Loan Documents and
Note Documents and/or applicable law, without the consent of, or notice to, the
other Agent or the ABL Claimholder or the Note Claimholders (as applicable),
without incurring any liabilities to such Persons 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:

 

(i)       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 Agents or any rights or remedies under any of
the ABL Loan Documents or the Note Documents;

 

(ii)      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;

 

(iii)     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

 

(iv)     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.

 

7.4.         Obligations Unconditional.  All rights, interests, agreements and
obligations of the ABL Claimholders and the Note Claimholders, respectively,
hereunder shall remain in full force and effect irrespective of:

 

(a)           any
lack of validity or enforceability of any ABL Loan Documents or any Note
Documents;

 

(b)           except,
in each case, 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 ABL Obligations or Note Obligations, or any amendment or waiver 

 

41

 

or other
modification, including any increase in the amount thereof, whether by course
of conduct or otherwise, of the terms of any ABL Loan Document or any Note
Document;

 

(c)           except
as otherwise expressly set forth in this Agreement, any exchange, release,
voiding, avoidance or non-perfection 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
ABL Obligations or Note Obligations or any guaranty thereof;

 

(d)           the
commencement of any Insolvency or Liquidation Proceeding in respect of 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 ABL Agent, the ABL Obligations,
any ABL Claimholder, the Notes Agent, the Note Obligations or any Note
Claimholder in respect of this Agreement.

 

VIII.

MISCELLANEOUS.

 

8.1.         Conflicts.  In the event of any conflict between the
provisions of this Agreement and the provisions of any ABL Loan Document or any
Note Document, the provisions of this Agreement shall govern and control.

 

8.2.         Effectiveness; Continuing
Nature of this Agreement; Severability.  This Agreement shall become effective when
executed and delivered by the parties hereto. 
This is a continuing agreement of Lien subordination (as opposed to an
agreement of debt or claim subordination), and the ABL Claimholders and Note
Claimholders may continue, at any time and without notice to the other 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 the ABL Claimholders or the Note
Claimholders, as applicable, hereby irrevocably, absolutely, and unconditionally
waives any right any Claimholder may have under applicable law to revoke this
Agreement or any of the provisions of this Agreement.  The terms of this Agreement shall survive,
and shall continue in full force and effect, in any Insolvency or Liquidation
Proceeding.  Consistent with, but not in
limitation of, the preceding sentence, each of the Agents, on behalf of the ABL
Claimholders and the Note Claimholders, as applicable, irrevocably acknowledges
that this Agreement constitutes a “subordination agreement” within the meaning
of both New York law and Section 510(a) of the Bankruptcy Code.  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 applicable) in any Insolvency or
Liquidation Proceeding.  This Agreement
shall terminate and be of no further force and effect:

 

42

 

(a)                              with respect to
the ABL Agent, the ABL Claimholders and the ABL Obligations, the date of the
Discharge of ABL Obligations, subject to the rights of the ABL Claimholders under
Section 6.4; and

 

(b)                                 with respect to
the Notes Agent, the Note Claimholders and the Note Obligations, the date of
the Discharge of Note Obligations, subject to the rights of the Note
Claimholders under Section 6.4.

 

8.3.                            Amendments;
Waivers.  No amendment, modification or
waiver of any of the provisions of this Agreement by the Notes Agent or the ABL
Agent shall be deemed to be made unless the same shall be in writing signed on
behalf of each party hereto or its authorized agent and each waiver, if any,
shall be a waiver only with respect to the specific instance involved and shall
in no way impair the rights of the parties making such waiver or the
obligations of the other parties to such party in any other respect or at any
other time.  Notwithstanding the
foregoing, 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
its rights are directly affected.

 

8.4.                            Information
Concerning Financial Condition of the Issuers and Their Subsidiaries.  The ABL Agent and the ABL Claimholders, on the
one hand, and the Notes Agent and the Note Claimholders, on the other hand,
shall each be responsible for keeping themselves informed of (a) the
financial condition of the Issuers and the Company Subsidiaries and all
endorsers and/or guarantors and other Grantors of the ABL Obligations or the
Note Obligations and (b) all other circumstances bearing upon the risk of
nonpayment of the ABL Obligations or the Note Obligations.  Neither the ABL Claimholders, on the one
hand, nor the Note Claimholders, on the other hand, shall have any duty to
advise the other of information known to it or them regarding such condition or
any such circumstances or otherwise.  In
the event that either the ABL Agent or any of the other ABL Claimholders, on
the one hand, or the Notes Agent or any of the other Note Claimholders, on the
other hand, 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, (i) 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, (ii) to provide any additional information
or to provide any such information on any subsequent occasion, (iii) to
undertake any investigation, or (iv) 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 Note Claimholders actually pays over to the ABL Agent or the
ABL Claimholders under the terms of this Agreement, the Note Claimholders shall
be subrogated to the rights of the ABL Claimholders; provided, however,
that the Notes Agent, on behalf of the Note 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 ABL 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 the Note Claimholders that are paid
over to the ABL Claimholders pursuant to this Agreement shall not 

 

43

 

reduce any of the Note Obligations.  Notwithstanding the foregoing provisions of
this Section 8.5(a), none of the Note Claimholders shall have any
claim against any of the ABL Claimholders for any impairment of any subrogation
rights herein granted to the Note Claimholders.

 

(b)                                 With respect to
the value of any payments or distributions in cash, property or other assets
that any of the ABL Claimholders actually pays over to the Note Claimholders
under the terms of this Agreement, the ABL Claimholders shall be subrogated to
the rights of the Note Claimholders; provided, however, that the
ABL Agent, on behalf of the ABL 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 Note 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 the ABL Claimholders that are
paid over to the Note Claimholders pursuant to this Agreement shall not reduce
any of the ABL Obligations.  Notwithstanding
the foregoing provisions of this Section 8.5(b), none of the ABL
Claimholders shall have any claim against any of the Note Claimholders for any
impairment of any subrogation rights herein granted to the ABL Claimholders.

 

8.6.                            SUBMISSION TO
JURISDICTION; WAIVERS.

 

(a)                                  ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST ANY PERSON ARISING OUT OF OR RELATING HERETO MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE,
COUNTY AND CITY OF NEW YORK.  BY
EXECUTING AND DELIVERING THIS AGREEMENT, EACH PARTY, FOR ITSELF AND ON BEHALF
OF THE NOTE CLAIMHOLDERS (IN THE CASE OF THE NOTES AGENT) AND THE ABL
CLAIMHOLDERS (IN THE CASE OF THE ABL AGENT), IRREVOCABLY:

 

(1)                                AGREES THAT THE
ONLY NECESSARY PARTIES TO ANY AND ALL JUDICIAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT SHALL BE THE PARTIES HERETO, EXCEPT WHERE IN ANY
SUCH JUDICIAL PROCEEDING RELIEF (INCLUDING INJUNCTIVE RELIEF OR THE RECOVERY OF
MONEY) IS BEING SOUGHT DIRECTLY AGAINST OR FROM A PERSON THAT IS NOT A PARTY
AND EXCEPT THAT, IN ANY SUCH JUDICIAL PROCEEDINGS BETWEEN THE NOTES AGENT AND
THE ABL AGENT THAT DOES NOT SEEK ANY RELIEF AGAINST OR FROM THE ISSUERS OR ANY
OF THE COMPANY SUBSIDIARIES, THE ISSUERS AND THE COMPANY SUBSIDIARIES SHALL NOT
BE NECESSARY PARTIES.  WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, AND CONSISTENT WITH THE PROVISIONS OF SECTIONS
8.14 AND 8.17, NONE OF THE ABL CLAIMHOLDERS (OTHER THAN THE ABL
AGENT) OR THE NOTE CLAIMHOLDERS (OTHER THAN THE NOTES AGENT) SHALL BE NECESSARY
OR OTHERWISE APPROPRIATE PARTIES TO ANY SUCH JUDICIAL PROCEEDINGS, UNLESS IN
SUCH JUDICIAL PROCEEDING SUMS ARE BEING SOUGHT TO BE RECOVERED DIRECTLY FROM
SUCH PERSONS, INCLUDING PURSUANT TO SECTION 4.2.

 

44

 

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

 

(3)                                WAIVES ANY
DEFENSE OF FORUM NON CONVENIENS;

 

(4)                                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 PERSON (AND IN THE CASE OF A PARTY, AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 8.7); AND

 

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

 

(b)                                 WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, ANY OF THE ABL LOAN DOCUMENTS
OR ANY OF THE NOTE DOCUMENTS.  EACH OF
THE PARTIES HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT, THE ABL LOAN DOCUMENTS AND THE NOTE
DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 8.6.

 

8.7.                            Notices.  All notices permitted or required under this
Agreement need be sent only to the Notes Agent and the ABL Agent, as applicable,
in order to be effective and otherwise binding on any applicable
Claimholder.  If any notice is sent for
whatever reason to the other Note Claimholders or the ABL Claimholders, such
notice shall also be sent to the applicable Agent.  Unless otherwise specifically provided
herein, any notice hereunder shall be in writing and may be personally served,
telexed or sent by telefacsimile or United States mail or courier service and
shall be deemed to have been given when delivered in person or by overnight courier
service and signed for against receipt thereof, upon receipt of telefacsimile
or telex during normal business hours, or three Business Days after depositing
it in the United States certified mails (return receipt requested) 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 ABL
Agent, on behalf of the ABL Claimholders, and the Notes Agent, on behalf of the
Note Claimholders, and the Grantors, agree that each of them shall take such
further action and shall execute and deliver such additional documents and instruments

 

45

 

(in recordable form, if requested) as the ABL Agent or the Notes 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.                      Specific
Performance.  Each of the
ABL Agent and the Notes Agent may demand specific performance of this
Agreement.  The ABL Agent, on behalf of itself
and the ABL Claimholders, and the Notes Agent, on behalf of itself and the Note
Claimholders, hereby irrevocably waive any defense based on the adequacy of a
remedy at law and any other defense which might be asserted to bar the remedy
of specific performance in any action which may be brought by the ABL Agent or
the other ABL Claimholders or the Notes Agent or the other Note Claimholders,
as applicable.  Without limiting the generality
of the foregoing or of the other provisions of this Agreement, in seeking
specific performance in any Insolvency or Liquidation Proceeding, an Agent may
seek such relief as if it were the “holder” of the claims of the other Agent’s
Claimholders under Section 1126(a) of the Bankruptcy Code or
otherwise had been granted an irrevocable power of attorney by the other Agent’s
Claimholders.

 

8.11.                      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.

 

8.12.                      Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same
instrument.  In proving this Agreement in
any judicial proceedings, it shall not be necessary to produce or account for
more than one such counterpart signed by the party against whom such enforcement
is sought.  Any signatures delivered by a
party by facsimile transmission or by e-mail transmission shall be deemed an
original signature hereto.

 

8.13.                      Authorization.  By its signature, each party hereto
represents and warrants to the other parties hereto that the individual signing
this Agreement on its behalf is duly authorized to execute this Agreement.  The Notes Agent hereby represents that it is
authorized to, and by its signature hereon does, bind the other Note
Claimholders to the terms of this Agreement. 
The ABL Agent hereby represents that it is authorized to, and by its
signature hereon does, bind the other ABL Claimholders to the terms of this
Agreement.

 

8.14.                      No Third Party
Beneficiaries.  This
Agreement and the rights and benefits hereof shall inure to the benefit of each
of the parties hereto and its respective successors and assigns and shall inure
to the benefit of (and shall be binding upon) each of the Agents, the other ABL
Claimholders and the other Note Claimholders and their respective successors
and assigns.  Without limiting the
generality of the foregoing, each of the Indenture, each Additional Pari Passu
Notes Agreement and the amendments to ABL Security Documents shall expressly
refer to this Agreement and acknowledge that its provisions shall be binding on
the Notes Agent, and the other Note Claimholders (and their respective
successors and assigns) and on the ABL Agent and the other ABL Claimholders
(and their respective successors and assigns), as applicable, and, in any event,
this Agreement shall be binding on the Agents, the other ABL Claimholders, 

 

46

 

and the other Note Claimholders and their respective successors and
assigns as if its provisions were set forth in their entirety in the ABL Credit
Agreement, the Indenture and each Additional Pari Passu Notes Agreement.

 

8.15.                      Provisions
Solely to Define Relative Rights.  The provisions of this Agreement are and are
intended solely for the purpose of defining the relative rights of the ABL
Claimholders on the one hand and the Note Claimholders on the other hand.  No Grantor or any other creditor thereof
shall have any rights hereunder, and no Grantor may rely on the terms
hereof.  Nothing in this Agreement is
intended to or shall impair as between the Grantors and the ABL Agent and the
other ABL Claimholders, or as between the Grantors and the Notes Agent and the
other Note Claimholders, the obligations of any Grantor, which are absolute and
unconditional, to pay principal, interest, fees and other amounts as provided
in the other ABL Loan Documents and the other Note Documents, respectively,
including as and when the same shall become due and payable in accordance with
their terms.

 

8.16.                      Marshalling of
Assets.  The Notes Agent, on behalf of
the Note Claimholders, hereby irrevocably, absolutely, and unconditionally
waives any and all rights or powers any Note Claimholder may have at any time
under applicable law or otherwise to have the ABL Priority Collateral, or any
part thereof, marshaled upon any foreclosure or other enforcement of the ABL
Agent’s Liens.  The ABL Agent, on behalf
of the ABL Claimholders, hereby waives irrevocably, absolutely, and
unconditionally any and all rights any ABL Claimholder may have at any time under
applicable law or otherwise to have the Notes Priority Collateral, or any part
thereof, marshaled upon any foreclosure or other enforcement of the Notes Agent’s
Liens.

 

8.17.                      Exclusive Means
of Exercising Rights under this Agreement.  The Note Claimholders shall be deemed to have
irrevocably appointed the Notes Agent, and the ABL Claimholders shall be deemed
to have irrevocably appointed the ABL Agent, as their respective and exclusive
agents hereunder.  Consistent with such
appointment, the Note Claimholders and the ABL Claimholders further shall be
deemed to have agreed that only their respective Agent (and not any individual
Claimholder or group of Claimholders) shall have the exclusive right to exercise
any rights, powers, and/or remedies under or in connection with this Agreement
(including bringing any action to interpret or otherwise enforce the provisions
of this Agreement) or the Collateral; provided, that (i) ABL
Claimholders holding obligations in respect to Bank Products or Obligations in
respect of Hedging Agreements may exercise customary netting rights with respect
thereto, (ii) cash collateral may be held pursuant to the terms of the ABL
Loan Documents (including any relating to Bank Products or Hedging Agreements)
and any such individual ABL Claimholder may act against such Collateral, and (iii) ABL
Claimholders may exercise customary rights of setoff against depository or
other accounts maintained with them. 
Specifically, but without limiting the generality of the foregoing, each
Noteholder or group of Noteholders, and each ABL Lender or group of ABL
Lenders, shall not be entitled to take or file, but instead shall be precluded
from taking or filing (whether in any Insolvency or Liquidation Proceeding or
otherwise), any action, judicial or otherwise, to enforce any right or power or
pursue any remedy under this Agreement (including any declaratory judgment or
other action to interpret or otherwise enforce the provisions of this Agreement)
or otherwise in relation to the Collateral, except solely as provided in the
proviso in the preceding sentence.

 

47

 

8.18.                      Interpretation.  This Agreement is a product of negotiations
among representatives of, and has been reviewed by counsel to, the Notes Agent,
the ABL Agent, the Issuers, and the Company Subsidiaries and is the product of
those Persons on behalf of themselves and the Note Claimholders (in the case of
the Notes Agent) and the ABL Claimholders (in the case of the ABL
Claimholders).  Accordingly, this
Agreement’s provisions shall not be construed against, or in favor of, any
party or other Person merely by virtue of that party or other Person’s involvement,
or lack of involvement, in the preparation of this Agreement and of any of its
specific provisions.

 

8.19.                      Capacity of
Notes Agent.  U.S. Bank
National Association is entering into this Agreement solely in its capacity as
Trustee and Collateral Agent under the Indenture and the rights, powers,
privileges and protections afforded to the Trustee and Collateral Agent under
the Indenture shall also apply to U.S. Bank National Association as the Notes
Agent hereunder.  The Note Claimholders
have expressly authorized and instructed the Notes Agent to execute and deliver
this Agreement.

 

8.20.                      Termination.  This Agreement shall terminate and be of no
further force and effect upon the Discharge of the ABL Obligations or upon the
Discharge of the Note Obligations, subject to the rights of the ABL Lenders and
the Noteholders, as applicable, under Section 6.4.

 

[Signature Pages Follow]

 

48

 

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

 

	
   

  	
  ABL
  Agent:

  
	
   

  	
   

  	
   

  
	
   

  	
  Bank
  of America, N.A., as ABL Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Roger Malouf

  
	
   

  	
   

  	
  Name:

  	
  Roger
  Malouf

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  Notice
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
  Bank
  of America, N.A.

  100 Federal Street

  MA5-100-09-09

  Boston, MA 02110

  Attn: James Ward

  

 

INTERCREDITOR
AGREEMENT

 

 

	
   

  	
  Notes
  Agent:

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S.
  BANK NATIONAL ASSOCIATION,

  not in its individual capacity, but solely in its capacity as Trustee and
  Collateral Agent under the Indenture and Collateral Agent under the Note Documents,
  as Notes Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Beverly A. Freeney

  
	
   

  	
   

  	
  Name:

  	
  Beverly
  A. Freeney

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  Notice
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S.
  Bank National Association

  100 Wall Street - Suite 1600

  New York, New York 10005

  Attn: Beverly A. Freeney, Vice President & Account Manager

  

 

INTERCREDITOR
AGREEMENT

 

 

	
  Acknowledged
  and Agreed to by:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Issuers:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TOPS
  HOLDING CORPORATION

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Eric J. Kanter

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Eric
  J. Kanter

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice
  President

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOPS MARKETS, LLC

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Frank Curci

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Frank
  Curci

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Chief
  Executive Officer

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Notice
  Address:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Tops
  Holding Corporation

  P.O. Box 1027

  Buffalo, New York 14240-1027

  Attn: Kevin Darrington

  	
   

  	
   

  	
   

  

 

INTERCREDITOR
AGREEMENT

 

 

	
  Company Subsidiaries:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARP BRADFORD LLC

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  Tops
  Markets, LLC, its sole member

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Frank Curci

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Frank
  Curci

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Chief
  Executive Officer

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BATH LLC

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  Tops
  Markets, LLC, its sole member

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Frank Curci

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Frank
  Curci

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Chief
  Executive Officer

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOPS GIFT CARD COMPANY, LLC

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Frank Curci

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Frank
  Curci

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  President

  	
   

  	
   

  	
   

  

 

INTERCREDITOR
AGREEMENT

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