Document:

Exhibit
10.5

 

SECOND LIEN SECURITY AGREEMENT

 

This SECOND LIEN SECURITY AGREEMENT (this “Security
Agreement”), dated as of April 7, 2010, among SQUARETWO FINANCIAL
CORPORATION, a Delaware corporation (“Issuer”), the Guarantors from time
to time signatory hereto (the “Guarantors” and collectively with Issuer, the “Grantors”
and each a “Grantor”) and U.S. BANK NATIONAL ASSOCIATION, as collateral
agent pursuant to the Indenture (as hereinafter defined), and as a secured
party (in such capacities, “Collateral Agent”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the Indenture dated as of the
date hereof by and among Grantors, Collateral Agent and U.S. BANK NATIONAL
ASSOCIATION, in its capacity as Trustee on behalf of the holders of the Notes
(as defined below) (the “Holders”) (as from time to time amended, restated,
supplemented or otherwise modified, the “Indenture”), pursuant to which
Issuer is issuing $290,000,000 aggregate principal amount of 11.625% Senior
Second Lien Notes due 2017 (together with any Additional Notes issued under the
Indenture, the “Notes”);

 

WHEREAS, each Guarantor has agreed to guarantee the
Second Lien Obligations (as hereinafter defined)  pursuant to Article 10 of the Indenture;

 

WHEREAS, from time to time after the date hereof, the
Issuer may, subject to the terms and conditions of the Indenture and the
Security Documents, incur Permitted Additional Pari Passu Obligations
(including Additional Notes issued under the Indenture), that the Issuer
desires to secure with the Collateral on a pari passu basis with the Notes;

 

WHEREAS, each Guarantor has, pursuant to the
Indenture, among other things, unconditionally guaranteed the Second Lien
Obligations (as hereinafter defined);

 

WHEREAS, the Issuer and each Guarantor will receive
substantial benefits from the issuance of the Notes and each is, therefore,
willing to enter into this Security Agreement and in order to induce Collateral
Agent for the benefit of the Secured Parties (as hereinafter defined) to enter
into this Security Agreement;

 

NOW, THEREFORE, in consideration of the premises and
mutual covenants herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:

 

1.                                       DEFINED TERMS.

 

(a)                                  All capitalized
terms used but not otherwise defined herein have the meanings given to them in
the Indenture.

 

(b)                                 All other terms
contained in this Security Agreement, unless the context indicates otherwise,
have the meanings provided for by the UCC to the extent the same are used or
defined therein, including, without limitation, the following terms: 

 

 

“Accounts”, “Account Debtor”, , “Chattel Paper”, “Commercial
Tort Claim”, “Deposit Account”, “Documents”, “Equipment”, “Fixtures”, “General
Intangibles”, “Goods”, “Instruments”, “Inventory”, “Investment Property”, “Letter
of Credit”, “Letter-of-Credit Rights”,  “Payment
Intangibles”, “Proceeds”, “Record”, “Software”, “Supporting Obligations” and “Tangible
Chattel Paper”.

 

(c)                                   “Additional Pari
Passu Agent” shall mean the Person appointed to act as trustee, agent or
representative for the holders of any Permitted Additional Pari Passu
Obligation pursuant to any Additional Pari Passu Agreement and designated as
such in an Additional Pari Passu Joinder Agreement.

 

(d)                                 “Additional Pari
Passu Agreement” shall mean the indenture, credit agreement or other agreement
under which any Permitted Additional Pari Passu Obligations (other than
Additional Notes) are incurred and any notes or other instruments representing
such Permitted Additional Pari Passu Obligations.

 

(e)                                  “Additional Pari
Passu Joinder Agreement” shall mean an agreement substantially in the form of
Exhibit G hereto.

 

(f)                                    “Applicable
Authorized Representative” shall mean (i) the Trustee so long as the Obligations
under the Notes and the Indenture constitute Second Lien Obligations hereunder,
and (ii) thereafter, the Additional Pari Passu Agent representing the series of
Indebtedness secured hereby with the greatest outstanding aggregate principal
amount.

 

(g)                                 “Contractual
Obligations” means, as applied to any Person, any indenture, mortgage, deed of
trust, contract, undertaking, agreement or other instrument to which that
Person is a party or by which it or any of its properties is bound or to which
it or any of its properties is subject.

 

(h)                                 “Control Agreement”
means a deposit account control agreement by and among the applicable Grantor,
Collateral Agent, Senior Agent (if applicable) and a deposit bank.

 

(i)                                      “Copyright License”
means any and all rights now owned or hereafter acquired by any Grantor under
any written agreement granting any right to such Grantor to use any Copyright
or Copyright registration owned by a third party.

 

(j)                                     “Credit Agreement”
shall mean that certain loan agreement, dated as of the date hereof (as
amended, amended and restated, supplemented or otherwise modified from time to
time) among the Issuer as US Borrower (as such term is defined therein), the
other borrower and guarantors party thereto, the lenders party thereto and the Senior
Agent.

 

(k)                                  “Default” or “Event
of Default” shall mean a “default” or “event of default” under the Indenture or
under any Additional Pari Passu Agreement.

 

(l)                                     “Design” means all
of the following now owned or hereafter acquired by any Grantor: (a) all
industrial designs and intangibles of like nature (whether registered or 

 

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unregistered), now owned or existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all applications
in connection therewith and (b) all reissues, extensions or renewals thereof.

 

(m)                               “Design License”
means rights under any written agreement now owned or hereafter acquired by any
Grantor granting any right to use any Design.

 

(n)                                 “Discharge of Senior
Lien Obligations” shall have the meaning given to the term in the Intercreditor
Agreement.

 

(o)                                  “Excluded Accounts”
has the meaning set forth in Section 5(a)(iii).

 

(p)                                 “Excluded Property”
has the meaning set forth in Section 2(a).

 

(q)                                  “Governmental
Authority” means any federal, provincial, state or municipal court or other
governmental department, commission, board, bureau, agency or instrumentality,
governmental or quasi-governmental, domestic or foreign.

 

(r)                                    “Intercreditor
Agreement” means that certain Intercreditor Agreement, dated as of the date
hereof, among the Issuer, the Grantors from time to time party thereto, the
Senior Agent and the Trustee, in its capacity as the Collateral Agent
thereunder, as it may be amended, restated, supplemented or otherwise modified
from time to time in accordance with the terms thereof.

 

(s)                                  “License” means any
Copyright License, Patent License, Design License, Trademark License or other
license of rights or interests now held or hereafter acquired by any Grantor.

 

(t)                                    “Light Users” means
those attorneys retained by a Grantor to collect an account through legal
action.

 

(u)                                 “Material Adverse
Effect” means a material adverse effect on (a) the business, assets,
operations, properties or financial condition of the Grantors taken as a whole,
(b) the ability of the Grantors, taken as a whole, to perform their
obligations under the Indenture or any Security Document to which they are a
party, (c) the Collateral or Collateral Agent’s Liens, on behalf of the
Collateral Agent and the Secured Parties, on the Collateral or the priority of
such Liens, or (d) the ability of the Collateral Agent or any Secured Party to
enforce or collect any of the Obligations or to exercise the Collateral Agent’s
or any Secured Party’s aggregate rights and remedies under the Indenture and
the Security Documents.

 

(v)                                 “Patent License”
means rights under any written agreement now owned or hereafter acquired by any
Grantor granting any right to such Grantor with respect to any invention on
which a Patent owned by a third party is in existence.

 

(w)                               “Power of Attorney”
shall have the meaning assigned to that term in Section 6(b).

 

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(x)                                   “Proceeds” shall
have the meaning assigned to it under Section 9-102 (64) of the UCC, and in any
event, shall include, but not be limited to, (i) any and all proceeds of any
insurance, indemnity, warranty or guarantee payable to Grantor from time to
time with respect to any of the Collateral, (ii) any and all payments (in any
form whatsoever) made or due and payable to Grantor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any Governmental Authority
(or any person acting under color of Governmental Authority), and (iii) any and
all other amounts from time to time paid or payable under or in connection with
any of the Collateral.

 

(y)                                 “Quarterly Date”
means, at any time, the next date on which financial statements are required to
be delivered pursuant to Section 4.18(a) of the Indenture.

 

(z)                                   “Second Lien
Obligations” means any principal, premium, interest (including any interest
accruing subsequent to the filing of a petition in bankruptcy, reorganization
or similar proceeding at the rate provided for in the documentation with
respect thereto, whether or not such interest is an allowed claim under
applicable state, federal or foreign law), penalties, fees, indemnifications,
reimbursements, damages and other liabilities, and guarantees of payment of
such principal, interest, penalties, fees, indemnifications, reimbursements,
damages and other liabilities, payable under any of (i) the Indenture, the
Notes (other than any Additional Notes except to the extent constituting
Permitted Additional Pari Passu Obligations) and the Security Documents,
including any fees, expenses, indemnities, payments and other amounts payable
to Collateral Agent and Trustee under the Indenture and the Security Documents,
and (ii) any agreement relating to Permitted Additional Pari Passu Obligations
(including the Indenture with respect to Additional Notes) and other
documentation relating to any other Permitted Additional Pari Passu
Obligations; provided that no obligations in respect of Permitted
Additional Pari Passu Obligations (other than Additional Notes) shall
constitute “Second Lien Obligations” unless the Additional Pari Passu Agent for
the holders of such Permitted Additional Pari Passu Obligations has executed an
Additional Pari Passu Joinder Agreement in the form of Exhibit G hereto
and has become a party to the Intercreditor Agreement.

 

(aa)                             “Secured Parties”
shall mean, collectively, Collateral Agent, the Trustee, the Holders, each
Additional Pari Passu Agent, and each holder of Permitted Additional Pari Passu
Obligations that constitute Second Lien Obligations.

 

(bb)                          “Security Documents”  means the Security Agreement, the Pledge
Agreement, any mortgages, the Intercreditor Agreement and all of the security
agreements, pledges, collateral assignments, deeds of trust, trust deeds or
other instruments evidencing or creating or purporting to create any security
interests in favor of the Collateral Agent for its benefit and for the benefit
of the Trustee and the Holders of the Notes and the holders of any Permitted
Additional Pari Passu Obligations, in all or any portion of the Collateral, as
amended, modified, restated, supplemented or replaced from time to time.

 

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(cc)                            “Senior Agent”
shall mean GMAC Commercial Finance LLC, in its capacity as administrative and
collateral agent under the Credit Agreement and any successor appointed from
time to time as Senior Agent relating to any Senior Lien Obligations.

 

(dd)                          “Senior Claimholder”
shall have the meaning assigned to such term under the Intercreditor Agreement.

 

(ee)                            “Senior Lien
Obligations” shall have the meaning assigned to such term under the
Intercreditor Agreement.

 

(ff)                                “Senior Loan
Document” shall have the meaning assigned to such term under the Intercreditor
Agreement.

 

(gg)                          “Special Power of
Attorney” shall have the meaning assigned to that term in Section 6(b).

 

(hh)                          “Supplement” shall
have the meaning assigned to such term in Section 26 hereof.

 

(ii)                                   “Trademark License”
means rights under any written agreement now owned or hereafter acquired by any
Grantor granting any right to such Grantor to use any Trademark owned by a
third party.

 

(jj)                                  “Uniform Commercial
Code Jurisdiction” means any jurisdiction that has adopted all or substantially
all of Article 9 as contained in the 2005 Official Text of the Uniform
Commercial Code, as recommended by the National Conference of Commissioners on
Uniform State Laws and the American Law Institute, together with any subsequent
amendments or modifications to the Official Text.

 

2.                                       GRANT OF LIEN; RELATIONSHIP TO SENIOR LIEN
OBLIGATIONS.

 

(a)                                  Grant.  To secure the prompt payment, performance and
observance of the Second Lien Obligations, including all renewals, extensions,
restructurings and refinancings of any or all of the Second Lien Obligations,
each Grantor hereby grants to Collateral Agent, for the benefit of Collateral
Agent and the Secured Parties, a continuing security interest in, and lien and
mortgage in and to, all of such Grantor’s personal property and other assets
described below, in each case, whether now owned or existing or hereafter
acquired or arising and regardless of where located (all being collectively
referred to as the “Collateral”) including, without limitation, all:

 

(i)                                     Accounts;

 

(ii)                                  Chattel Paper;

 

(iii)                               Commercial Tort Claims, including those
specified on Schedule 2(a) hereto;

 

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(iv)                              Deposit Accounts, and cash and other monies
and property of such Grantor in the possession or under the control of the
Senior Agent or Collateral Agent, any Senior Claimholder, any participant of
any Senior Claimholder or any Secured Party;

 

(v)                                 Documents;

 

(vi)                              Equipment;

 

(vii)                           Fixtures;

 

(viii)                        General Intangibles (including the Patents,
Trademarks and Copyrights listed on Schedule 4(g) hereto, and all other
Intellectual Property);

 

(ix)                                Licenses;

 

(x)                                   Goods;

 

(xi)                                Instruments;

 

(xii)                             Inventory;

 

(xiii)                          Investment Property;

 

(xiv)                         Letter-of-Credit Rights and Supporting
Obligations;

 

(xv)                            all money, cash or cash equivalents of such
Grantor;

 

(xvi)                         other personal property whether or not subject
to the UCC together with all books, records, ledger cards, files,
correspondence, computer programs, tapes, disks and related data processing
software that at any time evidence or contain information relating to any of
the property described above or are otherwise necessary or helpful in the
collection thereof or realization thereon; and

 

(xvii)                      Proceeds and products of all or any of the
property described above;

 

provided, however, that notwithstanding any of
the other provisions set forth in this Section 2, (I) this Security Agreement
shall not constitute a grant of a security interest in, and the Collateral
shall not include, (A) any property to the extent that such grant of a security
interest is (x) prohibited by any requirements of any law, rule or regulation
of a Governmental Authority, or requires a consent not obtained of any
Governmental Authority pursuant to such requirement or (y) prohibited by, or
constitutes a breach or default under or results in the termination of or
requires any consent not obtained under, any contract, license, agreement,
instrument or other document evidencing or giving rise to such property;
provided, further, that the exclusions set forth in clauses (A)(x) and (A)(y)
above shall not apply to Accounts, payment intangibles or to any other category
of Collateral to the extent such requirements of law, rule or regulation or the
term in such contract, license, agreement, instrument or other document
providing for such 

 

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prohibition, breach, default
or termination or requiring such consent is ineffective under applicable law;
(B) Capital Stock in excess of shares representing 100% of the nonvoting
Capital Stock and 65% of the total combined voting power of all classes of
Capital Stock entitled to vote of any Foreign Subsidiary; (C) the Excluded
Accounts; (D) the Capital Stock issued by Collect Air; (E) any “intent to use”
Trademark applications for which a statement of use has not been filed (but
only until such statement is filed); (F) any assets encumbered by the Cargill
Liens as of the date hereof and (G) any “Collateral” as such term is defined in
the Pledge Agreement, including, without limitation, any property of the type
described in Section 2(f) of the Pledge Agreement that, but for the operation
of such Section 2(f) of the Pledge Agreement, would otherwise constitute
Collateral thereunder (any such items described in clauses (A) through (G)
above shall be referred to herein as “Excluded Property”) and (II) the
representations, warranties and covenants in this Security Agreement shall not
apply to (x) any property that is not included in the Collateral and (y) any
matters that are the subject of post-closing obligations so long as the
Grantors are in compliance with such post-closing obligations under the Senior
Loan Documents.

 

(b)                                 Setoff.  In addition, to secure the prompt and
complete payment, performance and observance of the Second Lien Obligations and
in order to induce Collateral Agent and the Secured Parties as aforesaid, each
Grantor hereby grants to Collateral Agent, for the benefit of Collateral Agent
and the Secured Parties, a right of setoff, following the occurrence and during
the continuance of an Event of Default against the property of such Grantor
held by Collateral Agent or any Secured Party, consisting of property described
above in Section 2(a) now or hereafter in the possession or custody of
or in transit to Collateral Agent or any Secured Party, for any purpose,
including safekeeping, collection or pledge, for the account of such Grantor,
or as to which such Grantor may have any right or power.

 

(c)                                  Intercreditor
Agreement; Conflicts.  Anything
herein to the contrary notwithstanding, the liens and security interests
granted pursuant to this Security Agreement and the exercise of certain rights
and/or remedies with respect thereto are subject to the provisions of the
Intercreditor Agreement.  In the event of
any conflict between the terms of the Intercreditor Agreement and this Security
Agreement, the terms of the Intercreditor Agreement shall govern and
control.  In the event of any conflict
between the obligations of any Grantor under this Agreement and any agreement
relating to the Senior Lien Obligations, the terms of the agreement relating to
the Senior Lien Obligations shall govern and control.  All references to specific sections of the
Intercreditor Agreement set forth herein shall refer to such sections as in
effect on the date hereof, or as subsequently amended with the consent of the
Grantors.

 

(d)                                 Effect of
Satisfaction of Certain Obligations Under Senior Loan Documents.  Anything herein to the contrary
notwithstanding, prior to the Discharge of Senior Lien Obligations, the
requirements of this Security Agreement to deliver any certificates,
instruments, Documents or other possessory collateral to Collateral Agent,
shall be deemed satisfied if the applicable Grantor complies with the
requirements of the corresponding provisions of the applicable Senior Loan
Document.

 

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3.                                       COLLATERAL AGENT’S AND SECURED PARTIES’
RIGHTS; LIMITATIONS ON COLLATERAL AGENT’S AND SECURED PARTIES’ OBLIGATIONS.

 

(a)                                  It is expressly
agreed by each Grantor that, anything herein to the contrary notwithstanding,
each Grantor shall remain liable under each of its Contractual Obligations and
each of its Licenses to observe and perform all of the conditions and
obligations to be observed and performed by it thereunder to the same extent as
if this Security Agreement and the other Security Documents, the Indenture and
any Additional Pari Passu Agreement had not been executed.  Neither Collateral Agent nor any Secured
Party shall have any obligation or liability under any Contractual Obligations
or License by reason of or arising out of this Security Agreement or the
granting herein of a Lien thereon or the receipt by Collateral Agent or any
Secured Party of any payment relating to any such Contractual Obligations or
License pursuant hereto.  Neither
Collateral Agent nor any Secured Party shall be required or obligated in any
manner to perform or fulfill any of the obligations of any Grantor under or
pursuant to any Contractual Obligations or License, or to make any payment, or
to make any inquiry as to the nature or the sufficiency of any payment received
by it or the sufficiency of any performance by any party under any Contractual
Obligations or License, or to present or file any claims, or to take any action
to collect or enforce any performance or the payment of any amounts which may
have been assigned to it or to which it may be entitled at any time or times.

 

(b)                                 Collateral Agent
may (subject to the terms of the Intercreditor Agreement) at any time after an
Event of Default has occurred and is continuing without prior notice to
Grantors, notify Account Debtors and other Persons obligated on the Collateral
that Collateral Agent has a security interest therein, and that payments in
respect of such Collateral shall be made directly to Collateral Agent.  Upon the request of Collateral Agent,
following the occurrence and during the continuation of an Event of Default,
Grantors shall so notify Account Debtors and other Persons obligated on the
Collateral.  Once any such notice has
been given to any Account Debtor or other Person obligated on the Collateral,
the affected Grantor shall not give any contrary instructions to such Account
Debtor or other Person without Collateral Agent’s prior written consent.

 

(c)                                  Subject to Section
14 hereof, upon election of Collateral Agent at any time while and so long as
an Event of Default and acceleration of the Second Lien Obligations shall be
continuing, Collateral Agent may at any time in Collateral Agent’s own name, in
the name of a nominee of Collateral Agent or in the name of any Grantor
communicate (by mail, telephone, facsimile or otherwise) with Account Debtors,
parties to Contractual Obligations and obligors in respect of Instruments to
verify with such Persons, to Collateral Agent’s satisfaction, the existence,
amount, terms of, and any other matter relating to, Accounts, Instruments,
Chattel Paper and/or Payment Intangibles. 
If an Event of Default and acceleration of the Obligations shall have
occurred and be continuing, each Grantor, at its own expense, shall cause the
independent certified public accountants then engaged by such Grantor to
prepare and deliver to Collateral Agent and each Secured Party at any time and
from time to time promptly upon Collateral Agent’s request the following
reports with respect to such Grantor: (i) a reconciliation of all Accounts;
(ii) an aging of all Accounts; (iii) trial balances; and (iv) a test
verification of such Accounts as Collateral Agent may request.

 

8

 

(d)                                 The Applicable
Authorized Representative shall direct Collateral Agent in exercising any
right, power, discretionary duty or other remedy available to Collateral Agent
under this Security Agreement or any Security Document and the other Secured
Parties shall not have a right to take any actions with respect to the
Collateral.  If Collateral Agent shall
not have received appropriate instruction within 10 days of a request therefor
from the Applicable Authorized Representative (or such shorter period as
reasonably may be specified in such notice or as may be necessary under the
circumstances) it may, but shall be under no duty to, take or refrain from
taking such action (subject to the terms of the Intercreditor Agreement) as it
shall deem to be in the best interests of the Secured Parties and Collateral
Agent shall have no liability to any Person for such action or inaction.

 

4.                                       REPRESENTATIONS AND WARRANTIES.  Each
Grantor represents and warrants that as of the Issue Date:

 

(a)                                  Each Grantor has
rights in and the corporate or limited liability company power to transfer each
item of the Collateral upon which it purports to grant a Lien hereunder free
and clear of any and all Liens other than Permitted Liens.

 

(b)                                 No effective security
agreement, financing statement, equivalent security or Lien instrument or
continuation statement covering all or any part of the Collateral is on file or
of record in any public office, except such as may have been filed (i) by any
Grantor or Collateral Agent in favor of Collateral Agent pursuant to this
Security Agreement or the other Security Documents, (ii)  in connection with any other Permitted Liens,
(iii) with respect to the Grantors’ Existing Credit Agreement (provided that
any and all of the filed agreements, financing statements, instruments or
continuation statements referenced in this clause (iii) shall be released on
the Issue Date), and (iv) financing statements filed by purchasers of assets in
respect of assets that are no longer owned by any Grantor.

 

(c)                                  This Security
Agreement is effective to create a valid and continuing Lien on and, upon the
filing of the appropriate financing statements, a perfected Lien in favor of
Collateral Agent, for the benefit of Collateral Agent and the Secured Parties,
on the Collateral (other than Fixtures and Commercial Tort Claims that are not
subject to the requirements of Section 5(a)(vii) hereof) with respect to which
a Lien may be perfected by filing pursuant to the UCC.  Such Lien is enforceable as such as against
any and all creditors of and purchasers from Grantors (other than purchasers
and lessees of Inventory in the ordinary course of business and non-exclusive
licensees of General Intangibles in the ordinary course of business).

 

(d)                                 Schedule 4(d) hereto lists, as
of the Issue Date, (x) all Instruments, Letter of Credit Rights and Chattel
Paper with an aggregate value in excess of $500,000 of each Grantor, other than
Instruments, Letter of Credit Rights and Chattel Paper relating to the Charged-off
Receivables, and (y) all Instruments, Letter of Credit Rights and Chattel Paper
of each Grantor relating to the Charged-off Receivables with an individual
value in excess of $100,000.

 

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(e)                                  Schedule 4(e) hereto sets
forth as of the Issue Date, each Grantor’s name (within the meaning of Section 9-503
of the UCC) as it appears in official filings in the state of its incorporation
or organization, all other names (including trade names, fictitious names and
business names) under which any Grantor currently conducts business, or has at
any time during the past five years conducted business, the name of any entity
which any Grantor has acquired in whole or in part or from whom any Grantor has
acquired a significant amount of assets within the past five years (other than
purchases of assets in the ordinary course of business), the type of entity of
such Grantor (including corporation, partnership, limited partnership or
limited liability company), organizational identification number issued by such
Grantor’s state of incorporation or organization or a statement that no such
number has been issued, such Grantor’s state of incorporation or organization,
the location of such Grantor’s chief executive office, principal place of
business, offices, all warehouses and premises where Collateral is stored or
located (other than any documentation relating to assets that is in the
possession of Franchisees or Light Users in the ordinary course of business), and
the locations of its books and records concerning the Collateral (other than
any books and records relating to assets that is in the possession of
Franchisees or Light Users in the ordinary course of business).  Each Grantor has only one state of incorporation
or organization.

 

(f)                                    Intentionally
Omitted.

 

(g)                                 With respect to the
Intellectual Property included in the Collateral that does not constitute
commercial off-the-shelf software that is generally available to the public:

 

(i)                                     Except as would not reasonably be expected to
have a Material Adverse Effect, each Grantor and each of its Subsidiaries owns,
is licensed to use or otherwise has the right to use, all Intellectual Property
used in or necessary for the conduct of its business as currently conducted;

 

(ii)                                  As of the Issue Date, (A) no Grantor has
any interest in, or title to, any Patent, Trademark or Copyright subject to a
registration or application for a registration, except as set forth in Schedule
4(g) hereto, and (B) no Grantor has any License the absence of which
would reasonably be expected to result in a Material Adverse Effect except as
set forth in Schedule 4(g);

 

(iii)                               Except as would not reasonably be expected to
have a Material Adverse Effect, each of the Patents, Trademarks or Copyrights
are subsisting and have not been adjudged invalid or unenforceable in whole or
in part;

 

(iv)                              To the best of Grantors’ knowledge, each of
the Patents, Trademarks, and Copyrights are valid and enforceable, except to
the extent that the lack of such validity or enforceability would not
reasonably be expected to have a Material Adverse Effect;

 

(v)                                 There is no outstanding claim that the use of
any of the Patents, Trademarks, Copyrights or other Intellectual Property
violates the rights of any 

 

10

 

third
person, which claim would reasonably be expected to have a Material Adverse
Effect;

 

(vi)                              Grantors are the sole and exclusive owners of
the entire and unencumbered right, title and interest in and to each of the
material Patents, Trademarks, Copyrights, and other material Intellectual
Property purported to be owned by it free and clear of any liens, charges and
encumbrances (including without limitation pledges, assignments, licenses,
registered user agreements and covenants by Grantors not to sue third persons),
except for Permitted Liens and the Licenses disclosed on Schedule 4(g) attached
hereto;

 

(vii)                           Except as set forth on Schedule 4(g) or
as permitted under the Indenture and each Additional Pari Passu Agreement,
there are no effective restrictions on any Grantor’s or any of its Subsidiaries’
right to create a Lien in any such Intellectual Property that is material nor
in Collateral Agent’s right to perfect and enforce such Lien; and

 

(viii)                        This Security Agreement is effective to create
a valid and continuing Lien on and, upon filing of appropriate financing
statements, the Second Lien Copyright Assignment of Security (in the form
attached hereto as Exhibit A) with the United States Copyright Office and
filing of the Second Lien Patent Assignment of Security (in the form attached
hereto as Exhibit B) and the Second Lien Trademark Assignment of Security
(in the form attached hereto as Exhibit C) with the United States Patent
and Trademark Office, perfected Liens in favor of Collateral Agent on Patents,
Trademarks, Copyrights, and other Intellectual Property, and such perfected
Liens are enforceable as such as against any and all creditors of and
purchasers from Grantors to the extent such Liens are able to be perfected by
such filings, subject only to the right of holders of Permitted Liens.  Upon filing of the Second Lien Copyright
Assignment of Security with the United States Copyright Office and filing of
the Second Lien Patent Assignment of Security and the Second Lien Trademark
Assignment of Security with the United States Patent and Trademark Office and
the filing of appropriate financing statements, all action necessary to protect
and perfect Collateral Agent’s Lien on Grantors’ Patents, Trademarks and
Copyrights shall have been duly taken.

 

(h)                                 Intentionally
Omitted.

 

(i)                                     Intentionally
Omitted.

 

(j)                                     Except for matters
disclosed on Schedule 2(a), no Grantor owns any Commercial Tort Claims
with a value that such Grantor reasonably expects to exceed $500,000.

 

(k)                                  Schedule 4(k) sets forth,
the account numbers and locations of all Deposit Accounts or other bank
accounts of each Grantor.

 

11

 

(l)                                     Except as disclosed
on Schedule 4(l) and other than any documentation relating to
Charged-Off Receivables that is in the possession of Franchisees or Light Users
in the ordinary course of business, as of the Issue Date, none of the
Collateral is in the possession of any consignee, bailee, warehouseman, agent
or processor.

 

(m)                               Intentionally
Omitted.

 

(n)                                 None of the
Collateral (x) constituting Charged-off Receivables or the proceeds
therefrom or (y) with a value in excess of $500,000, is of a type in which
Liens may be registered, recorded or filed under, or notice thereof given
under, any federal statute or regulation except, with respect to clauses (x) and
(y) above, for Collateral described on Schedule 4(g) hereto
and other registered Intellectual Property.

 

(o)                                 Each Grantor shall,
promptly upon providing notice to the Senior Agent pursuant to the Senior Loan
Documents (or, if the Discharge of the Senior Lien Obligations shall have
occurred, promptly upon acquisition thereof) notify Collateral Agent in writing
upon acquiring any interest hereafter in the Collateral constituting any other
Collateral with a value in excess of $500,000 (other than registered
Intellectual Property), that is of a type where a Lien may be registered,
recorded of filed under, or notice thereof given under, any federal statute or
regulation.

 

5.                                       COVENANTS.  Each
Grantor covenants and agrees with Collateral Agent, for the benefit of
Collateral Agent and the Secured Parties:

 

(a)                                  Further Assurances;
Letters of Credit.

 

(i)                                     Generally. At any time and from time to time, upon the
reasonable written request of Collateral Agent and at the sole expense of each
Grantor, such Grantor shall (subject to the terms of the Intercreditor
Agreement) promptly and duly execute and deliver any and all such further
instruments and documents and take such further actions as Collateral Agent may
reasonably request to obtain the full benefits of this Security Agreement and
of the rights and powers herein granted, including (A) using its
commercially reasonable efforts to secure all consents and approvals necessary
for the assignment to or for the benefit of Collateral Agent of any License or
Contractual Obligations held by such Grantor and to enforce the security
interests granted hereunder; and (B) filing any financing or continuation
statements under the UCC with respect to the Liens granted hereunder or under
any other Security Document or Additional Pari Passu Agreement as to those
relevant jurisdictions that are not Uniform Commercial Code Jurisdictions;
provided, however, prior to the Discharge of Senior Lien Obligations, Grantors
shall not be required to obtain third party consents or approvals with respect
to assets included or to be included in the Collateral if such Grantor is not
required to obtain such third party consents or approvals pursuant to the
Senior Loan Documents.

 

(ii)                                  Organizational, Name or Location Changes. Each Grantor will give Collateral Agent
prompt written notice of any (1) change of name of any 

 

12

 

Grantor,
(2) changes in any Grantor’s state or other jurisdiction of organization
or its organizational identification number, or (3) reincorporation or
reorganization of a Grantor under the laws of any jurisdiction other than the
jurisdiction in which it is incorporated or organized as of the Issue Date.  In connection with and as a condition to
taking any action described above, each Grantor shall take all necessary action
to maintain the continued perfection and priority of the liens created
hereunder in the Collateral, including any actions that may be reasonably
requested by Collateral Agent.

 

(iii)                               Deposit Accounts. Prior to the Discharge of Senior Lien
Obligations, each Grantor shall obtain a Control Agreement with each bank or
financial institution holding a Deposit Account for such Grantor Party (other
than any payroll, employee benefit and similar trust accounts and other than
trust accounts pursuant to which any Grantor receives collections on behalf of
third parties, each such account, an “Excluded Account”) in respect of which a
Control Agreement is obtained in favor of the Senior Agent; provided, however,
that the failure of any Grantor to obtain any Control Agreement otherwise
required by this clause (iii) solely as a result of Collateral Agent’s
refusal to execute a Control Agreement which is substantially similar to the
Control Agreement executed by the Senior Agent, shall not result in a breach of
obligations of such Grantor under this clause (iii).  Following the Discharge of Senior Lien
Obligations, each Grantor shall use commercially reasonable efforts to obtain a
Control Agreement from each bank or financial institution maintaining a Deposit
Account for such Grantor (other than with respect to Excluded Accounts).  In connection with any Control Agreements,
Collateral Agent agrees that, (A) notwithstanding anything to the contrary
in any Control Agreement, it shall not deliver a notice of springing dominion
or similar notice to the bank or financial institution thereunder unless an
Event of Default shall have occurred and be continuing and (B) it shall
promptly (and in any event, within 5 Business Days after a written request
therefor) execute any proposed amendment, modification, termination,
restatement, replacement or waiver of any Control Agreement to which it is a
party in respect of which the Senior Agent has approved a corresponding
amendment, modification, termination restatement, replacement or waiver subject
to the terms and conditions of Section 5.3(d) of the Intercreditor
Agreement and to the extent required thereunder.

 

(iv)                              Letters of Credit. If any Grantor becomes the beneficiary of a
letter of credit with a term of six (6) months or more and a face amount
in excess of $500,000, such Grantor shall, promptly upon delivering notice
thereof to the Senior Agent pursuant to the Senior Loan Documents (or, if the
Discharge of the Senior Lien Obligations shall have occurred,  not later than the next Quarterly Date),
notify Collateral Agent thereof and, if requested by Collateral Agent following
the Discharge of Senior Lien Obligations, use commercially reasonable efforts
to enter into a tri party agreement with Collateral Agent and the issuer and/or
confirmation bank with respect to Letter-of-Credit Rights assigning such
Letter-of-Credit Rights to Collateral Agent and to amend such letter of credit
to provide that all payments thereunder shall be made by wire transfer or
deposit to a 

 

13

 

deposit
account subject to a Control Agreement in favor of Collateral Agent, all in
form and substance reasonably satisfactory to Collateral Agent.

 

(v)                                 [Intentionally Omitted]

 

(vi)                              Financing Statements. Each Grantor hereby irrevocably authorizes
Collateral Agent at any time and from time to time to file in any filing office
in any Uniform Commercial Code Jurisdiction any initial financing statements
and amendments thereto that (a) indicate the Collateral (i) as all
assets of such Grantor or words of similar effect, regardless of whether any
particular asset comprised in the Collateral falls within the scope of Article 9
of the UCC of such jurisdiction, or (ii) as being of an equal or lesser
scope or with greater detail, and (b) contain any other information
required by part 5 of Article 9 of the UCC for the sufficiency or filing
office acceptance of any financing statement or amendment, including (i) whether
such Grantor is an organization, the type of organization and any organization
identification number issued to such Grantor, and (ii) in the case of a
financing statement filed as a fixture filing, a sufficient description of real
property to which the Collateral relates. 
Each Grantor agrees to furnish any such information to Collateral Agent
promptly upon request.  Each Grantor also
ratifies its authorization for Collateral Agent to have filed in any Uniform
Commercial Code Jurisdiction any initial financing statements or amendments
thereto if filed prior to the date hereof. 
Notwithstanding the foregoing, if reasonably requested by any Grantor in
writing, Collateral Agent shall make or authorize Grantor to make as may be
reasonably requested to evidence that the security interests hereunder do not
attach to any property that constitutes Excluded Property (solely to the extent
that and so long as, such property constitutes Excluded Property).  Notwithstanding the foregoing authorizations,
in no event shall the Collateral Agent be obligated to prepare or file any
financing statements whatsoever, or to maintain the perfection of the security
interest granted hereunder.  Each Grantor
agrees to prepare, record and file, at its own expense, financing statements
(and continuation statements when applicable) under the UCC with respect to the
Collateral now existing or hereafter created meeting the requirements of
applicable state law in such manner and in such jurisdictions as are necessary
to perfect and maintain perfected the Collateral to the extent required
hereunder, and to deliver a filed stamped copy of each such financing statement
or other evidence of filing to the Collateral Agent.  Neither the Trustee nor the Collateral Agent
shall be under any obligation whatsoever to file any such financing or
continuation statements or to make any other filing under the UCC in connection
with this Security Agreement.

 

(vii)                           Commercial Tort Claims. Each Grantor shall, promptly upon providing
notice to the Senior Agent pursuant to the Senior Loan Documents (or, if the
Discharge of the Senior Lien Obligations shall have occurred,  promptly, and in any event within ten (10) Business
Days after obtaining knowledge that the same is acquired by it), notify
Collateral Agent of any commercial tort claim (as defined in the UCC) acquired
by it that is reasonably anticipated to result in a recovery in excess of
$500,000 and unless otherwise consented by Collateral 

 

14

 

Agent,
such Grantor shall enter into a Supplement granting to Collateral Agent a Lien
in such commercial tort claim.

 

(b)                                 Intentionally
Omitted.

 

(c)                                  Covenants Regarding
Patents, Trademarks, Copyrights and Licenses.

 

(i)                                     Intentionally Omitted.

 

(ii)                                  Each Grantor shall, promptly upon delivering
notice thereof to the Senior Agent pursuant to the Senior Loan Documents (or,
if the Discharge of the Senior Lien Obligations shall have occurred, not later
than the next Quarterly Date), notify Collateral Agent in writing if either
itself or through any agent, employee, licensee or designee, filed an
application for the registration of any material Patent, Trademark or Copyright
with the United States Patent and Trademark Office, the United States Copyright
Office or any similar office or agency, and, to the extent Grantor is required
to do so pursuant to the Senior Loan Documents (or, following the Discharge of
Senior Lien Obligations, upon request of the Collateral Agent), such Grantor
shall (subject to the terms of the Intercreditor Agreement), execute and
deliver Patent Assignments of Security, Copyright Assignments of Security or
Trademark Assignments of Security, as applicable, to evidence Collateral Agent’s
Lien on such Patent, Trademark or Copyright, and the General Intangibles of
such Grantor relating thereto or represented thereby.

 

(iii)                               Intentionally Omitted.

 

(iv)                              Intentionally Omitted.

 

(v)                                 Grantors will not amend, modify, terminate or
waive any provision of any License in any manner which would reasonably be
expected to result in a Material Adverse Effect.

 

(vi)                              Subject to the terms of the Intercreditor
Agreement, each Grantor shall use its commercially reasonable efforts, if
requested by Collateral Agent, to obtain any consents, waivers or agreements
necessary to enable Collateral Agent to exercise remedies hereunder and under
the other Security Documents, the Indenture and any Additional Pari Passu
Agreements with respect to any material Intellectual Property and any of such
Grantor’s other rights under any material General Intangibles, including such
Grantor’s rights as a licensee of computer software; provided, however, that
the requirements of this clause (vi) shall not include an obligation to
enter into an escrow or similar arrangement with respect to the eAGLE Software;
provided, however, that prior to the Discharge of Senior Lien
Obligations, no Grantor shall be required to take any such action requested by
the Collateral Agent if the corresponding action under the Senior Loan
Documents has not been required or taken thereunder.

 

15

 

(vii)                           Grantors will continue to use for the duration
of this Security Agreement, proper statutory notice, where appropriate, in
connection with its use of the Patents, Trademarks, Copyrights, and other
Intellectual Property to the extent that failure to do so would be reasonably
expected to have a Material Adverse Effect.

 

(d)                                 Covenants regarding
eAGLE System.  In the
event that all or any portion of the eAGLE System is comprised of registered
Patents, Trademarks or Copyrights owned by any Grantor, the applicable Grantor
shall, promptly upon providing notice to the Senior Agent pursuant to the
Senior Loan Documents (or, if the Discharge of the Senior Lien Obligations
shall have occurred, promptly), notify Collateral Agent and (subject to the
terms of the Intercreditor Agreement) take all actions reasonably required to
assure that Collateral Agent has a duly perfected security interest therein; provided,
however, that prior to the Discharge of Senior Lien Obligations, no
Grantor shall be required to take any action that is not required by the Senior
Agent or under the terms of the Senior Loan Documents.

 

(e)                                  Covenants Regarding
Equipment.  Each
Grantor shall, promptly upon delivering notice thereof to the Senior Agent
pursuant to the Senior Loan Documents (or, if the Discharge of the Senior Lien
Obligations shall have occurred,  not
later than the next Quarterly Date), notify Collateral Agent in writing in the
event that such Grantor obtains any Equipment covered by any certificate of
title with a value in excess of $500,000 individually or $2,500,000 in the
aggregate.  Following the Discharge of
Senior Lien Obligations, upon request of Collateral Agent, each Grantor shall
promptly deliver to Collateral Agent any and all certificates of title,
applications for title or similar evidence of ownership of all of such
Equipment and shall cause Collateral Agent to be named as lienholder on any
such certificate of title or other evidence of ownership.

 

(f)                                    Covenants Regarding
Documents, Instruments, Chattel Paper and Investment Property.  Each Grantor shall, promptly upon delivering
notice to the Senior Agent pursuant to the Senior Loan Documents (or, if the
Discharge of the Senior Lien Obligations shall have occurred, not later the
next Quarterly Date following the acquisition thereof), notify Collateral Agent
of the existence of all Collateral consisting of negotiable Documents,
certificated and uncertificated securities, Instruments, and Chattel
Paper, each with a value in excess of $500,000 on an individual basis.
Following the Discharge of Senior Lien Obligations, each Grantor shall (i) promptly
deliver to Collateral Agent all such Collateral consisting of negotiable
Documents, certificated securities and Instruments with a value in excess of
$500,000 on an individual basis (in each case, accompanied by stock powers,
allonges or other instruments of transfer executed in blank), (ii) in the
case of any Investment Property constituting uncertificated securities with a
value in excess of $500,000 on an individual basis, use commercially reasonable
efforts to obtain from any issuers of such Investment Property, for the benefit
of Collateral Agent, written confirmation of Collateral Agent’s Control over
such Investment Property upon terms and conditions reasonably satisfactory to
Collateral Agent and (iii) in the case of any Tangible Chattel Paper with
an a value in excess of $500,000 on an individual basis, promptly deliver to
Collateral Agent all such Collateral consisting of Tangible Chattel Paper with
a value in excess of $500,000 on an individual 

 

16

 

basis duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
reasonably satisfactory to Collateral Agent.

 

(g)                                 Additional
Collateral Creation and Perfection Actions.  Each Grantor agrees that, in the event any
Grantor takes any action to grant or perfect a Lien in favor of the Senior
Agent or any holder of a Senior Lien Obligation in any property (other than
Excluded Property) of such Grantor, such Grantor shall promptly notify the
Collateral Agent of such action and shall also take such action to grant or
perfect a Lien (subject to the Intercreditor Agreement) in favor of the
Collateral Agent to secure the Second Lien Obligations without request of the
Collateral Agent, provided, however, that in no event shall this
clause (g) have the effect of requiring any Grantor to (i) obtain
Control Agreements with respect to any Deposit Accounts that are not required
to be subject to a Control Agreement pursuant to Section 5(a)(iii) hereof,
(ii) take actions with respect to Letters of Credit that are not required
pursuant to Section 5(a)(iv) prior to the Discharge of the First Lien
Obligations, (iii) take actions with respect to Equipment subject to a
certificate of title that are not required pursuant to Section 5(e) prior
to the Discharge of the First Lien Obligations, (iv) deliver possession of
any Collateral to the Collateral Agent in respect of which possession is
delivered to the Senior Agent or (v) unless otherwise expressly provided
in this Security Agreement, take actions that are not necessary to perfect any
such Lien in favor of the Collateral Agent.

 

(h)                                 Indemnification.

 

(i)                                     In any suit, proceeding or action brought by
Collateral Agent or any Secured Party relating to any Collateral for any sum
owing with respect thereto or to enforce any rights or claims with respect
thereto, each Grantor will save, indemnify and keep Collateral Agent and the
Secured Parties harmless from and against all expense (including reasonable
attorneys’ fees and expenses), loss or damage suffered by reason of any
defense, setoff, counterclaim, recoupment or reduction of liability whatsoever
of the Account Debtor or other Person obligated on the Collateral, arising out
of a breach by such Grantor of any obligation thereunder or arising out of any
other agreement, indebtedness or liability at any time owing to, or in favor
of, such obligor or its successors from such Grantor, except in the case of
Collateral Agent or any Secured Party, to the extent such expense, loss, or
damage is attributable to the gross negligence or willful misconduct of
Collateral Agent or such Secured Party as determined by a court of competent
jurisdiction.  All such obligations of
each Grantor shall be and remain enforceable against and only against Grantors
and shall not be enforceable against Collateral Agent or any Secured Party.

 

(ii)                                  In addition, with respect to Intellectual
Property, each Grantor assumes all responsibility and liability arising from
the use of the Trademarks, Patents, Copyrights and other Intellectual Property,
and each Grantor hereby indemnifies and holds Collateral Agent and the Secured
Parties harmless from and against any claim, suit, loss, damage or expense
(including reasonable attorneys’ fees) arising out of such Grantor’s operations
of Grantor’s business from the use of the Trademarks, Patents, Copyrights or
other Intellectual Property.  

 

17

 

In
any suit, proceeding or action brought by Collateral Agent or any Secured Party
under any License for any sum owing thereunder, or to enforce any provisions of
such License, Grantors will indemnify and keep Collateral Agent and the Secured
Parties harmless from and against all expense, loss or damage suffered by
reason of any defense, set off, counterclaim, recoupment or reduction or
liability whatsoever of the obligee thereunder, arising out of a breach of
Grantors of any obligation thereunder or arising out of any other agreement,
indebtedness or liability at any time owing to or in favor of such obligee or
its successors from any Grantor, and all such obligations of Grantors shall be
and remain enforceable against and only against Grantors and shall not be
enforceable against Collateral Agent or any Secured Party.

 

(i)                                     Intentionally
Omitted.

 

(j)                                     Limitation on Liens
on Collateral.  Each
Grantor will not create, permit or suffer to exist, and will take commercially
reasonable efforts to defend the Collateral against, and take such other action
as is necessary to remove any Lien on the Collateral, except Permitted Liens,
and will defend (subject to the terms of the Intercreditor Agreement) the
rights of Collateral Agent and the Secured Parties in and to any of such
Grantor’s rights under the Collateral against the claims and demands of all
Persons whomsoever.

 

(k)                                  Limitations on
Disposition.  No Grantor
will sell, license, lease, transfer or otherwise dispose of any of the
Collateral, except as permitted by the Indenture and each Additional Pari Passu
Agreement.

 

(l)                                     Intentionally
Omitted.

 

(m)                               Intentionally
Omitted.

 

(n)                                 Intentionally
Omitted.

 

(o)                                 Intentionally
Omitted.

 

(p)                                 Terminations;
Amendments.  Each
Grantor acknowledges that, except as provided in Section 5(a)(vi), it is
not authorized to file any financing statement or amendment or termination
statement with respect to any financing statement without the prior written
consent of Collateral Agent and agrees that it will not do so without the prior
written consent of Collateral Agent, subject to such Grantor’s rights under Section 9-509(d)(2) of
the UCC.

 

(q)                                 Authorized
Terminations.  Collateral
Agent will promptly deliver to Grantors for filing or authorize Grantors to
prepare and file termination statements and releases in accordance with Section 12.03
of the Indenture and Section 5.1 of the Intercreditor Agreement.

 

18

 

(r)                                    Post-Closing
Obligations.

 

(i)                                     Within sixty (60) days of the Issue Date or
such longer time as may be agreed to by Senior Agent, Collateral Agent shall
have received (x) a lender’s loss payable endorsement naming Collateral Agent
as a lender loss payee with respect to each property insurance policy of Issuer
and its Subsidiaries and (y) an endorsement to each general liability
policy of Issuer and its Subsidiaries, naming Collateral Agent as an additional
insured with respect to such general liability policy, each in form and
substance reasonably satisfactory to Collateral Agent.

 

(ii)                                  Within thirty (30) days of the Issue Date or
such longer time as may be agreed to by Senior Agent, Collateral Agent shall
have received evidence that each of Borrower’s Trademarks and Copyrights set
forth on Schedule 4(g) have been registered with the United States Patent
and Trademark Office and the United States Copyright Office, as applicable,
under Issuer’s legal name, each in form and substance reasonably satisfactory
to Senior Agent.

 

(iii)                               Within five (5) Business Days of the
Issue Date or such longer time as may be agreed to by Senior Agent, Senior
Agent shall have received each of the original stock certificates and limited
liability company certificates listed on Schedule 5(r).

 

6.                                       COLLATERAL AGENT’S APPOINTMENT AS
ATTORNEY-IN-FACT.

 

(a)                                  Each Grantor hereby
irrevocably constitutes and appoints Collateral Agent and any officer or agent
thereof (subject to the terms of the Intercreditor Agreement), with full power
of substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, from time to time in Collateral Agent’s discretion,
but subject to Section 6(d), for the purposes of carrying out the terms of
this Security Agreement, to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Security Agreement, including, without
limitation the power to modify this Security Agreement by amending Schedule
4(g) to include any future Patents, Trademarks or Copyrights
(including registrations or applications appurtenant thereto) covered by this
Security Agreement.

 

(b)                                 On the Issue Date
each Grantor shall execute and deliver to Collateral Agent (i) a power of
attorney (the “General Power of Attorney”) substantially in the form attached
hereto as Exhibit D and (ii) each Grantor that owns any
Intellectual Property as of the Closing Date, shall execute and deliver to
Collateral Agent a special power of attorney (the “Special Power of Attorney”)
substantially in the form attached hereto as Exhibit E
(collectively, the “Power of Attorney”).

 

(c)                                  The power of
attorney granted pursuant to the Power of Attorney (subject to the terms of the
Intercreditor Agreement) is a power coupled with an interest and shall be
irrevocable for the term hereof.  The
powers conferred on Collateral Agent, for the benefit of Collateral Agent and
the Secured Parties, under the Power of Attorney are 

 

19

 

solely to protect Collateral Agent’s interests (for
the benefit of Collateral Agent and the Secured Parties) in the Collateral and
shall not impose any duty upon Collateral Agent or any Secured Party to
exercise any such powers.

 

(d)                                 Collateral Agent
agrees that (i) except for the powers granted in clause (h) of the
General Power of Attorney, it shall not exercise any power or authority granted
under the Power of Attorney, Special Power of Attorney or clause (a) above
unless an Event of Default has occurred and is continuing, and (ii) Collateral
Agent shall (subject to the terms of the Intercreditor Agreement) account for
any moneys received by Collateral Agent in respect of any foreclosure on or
disposition of Collateral pursuant to the Power of Attorney, provided  that
neither Collateral Agent nor any Secured Party shall have any duty as to any
Collateral except as provided herein with respect to Collateral in its
possession or under its control, and Collateral Agent and the Secured Parties
shall be accountable only for amounts they actually receive as a result of the
exercise of such powers.  NONE OF
COLLATERAL AGENT, SECURED PARTIES OR THEIR RESPECTIVE AFFILIATES, OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL BE RESPONSIBLE TO
GRANTORS FOR ANY ACT OR FAILURE TO ACT UNDER ANY POWER OF ATTORNEY OR
OTHERWISE, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE TO THEIR OWN GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT AS DETERMINED BY A COURT OF COMPETENT
JURISDICTION, NOR FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL
DAMAGES.

 

7.                                       REMEDIES; RIGHTS UPON DEFAULT.

 

(a)                                  Subject to the
terms of the Intercreditor Agreement, in addition to all other rights and
remedies granted to it under this Security Agreement, the Indenture, the Notes,
the Security Documents, any Additional Pari Passu Agreement and under any other
instrument or agreement securing, evidencing or relating to any of the Second
Lien Obligations (but subject to the terms of such instruments of agreements),
if any Event of Default shall have occurred and be continuing, Collateral Agent
may exercise all rights and remedies of a secured party under the UCC.  Without limiting the generality of the
foregoing, each Grantor expressly agrees that in any such event Collateral
Agent, without demand of performance or other demand, advertisement or notice
of any kind (except the notice specified below of time and place of public or
private sale) to or upon any Grantor or any other Person (all and each of which
demands, advertisements and notices are hereby expressly waived to the maximum
extent permitted by the UCC and other applicable law), may (subject to the
terms of the Intercreditor Agreement) forthwith enter upon the premises of any
Grantor where any Collateral is located through self-help, without judicial
process, without first obtaining a final judgment or giving any Grantor or any
other Person notice and opportunity for a hearing on Collateral Agent’s claim
or action and may collect, receive, assemble, process, appropriate and realize
upon the Collateral, or any part thereof, and may (subject to the terms of the
Intercreditor Agreement) forthwith sell, lease, license, assign, give an option
or options to purchase, or sell or otherwise dispose of and deliver said
Collateral (or contract to do so), or any part thereof, in one or more parcels
at a public or private sale or sales, at any exchange at such prices as it may
deem acceptable, for cash or on credit or for future delivery without

 

20

 

assumption of any credit risk.  Collateral Agent or any Secured Party shall
have the right upon any such public sale or sales and, to the extent permitted
by law, upon any such private sale or sales, to purchase for the benefit of
Collateral Agent and the Secured Parties, the whole or any part of said
Collateral so sold, free of any right or equity of redemption, which equity of
redemption each Grantor hereby releases. 
Subject to the terms of the Intercreditor Agreement, such sales may be
adjourned and continued from time to time with or without notice.  Collateral Agent shall have the right to
conduct such sales on Grantors’ premises or elsewhere and shall have the right
to use Grantors’ premises without charge for such time or times as Collateral
Agent deems necessary or advisable.

 

If any Event of Default shall have occurred and be
continuing, each Grantor further agrees, at Collateral Agent’s request, to
assemble the Collateral and make it available to Collateral Agent at a place or
places designated by Collateral Agent which are reasonably convenient to
Collateral Agent and Grantors, whether at Grantors’ premises or elsewhere.  Subject to the terms of the Intercreditor
Agreement, until Collateral Agent is able to effect a sale, lease, or other
disposition of Collateral, Collateral Agent shall have the right to hold or use
Collateral, or any part thereof, to the extent that it deems appropriate for
the purpose of preserving Collateral or its value or for any other purpose
deemed appropriate by Collateral Agent. 
Collateral Agent shall not have any obligation to Grantors to maintain
or preserve the rights of Grantors as against third parties with respect to any
Collateral while such Collateral is in the possession of Collateral Agent.  Subject to the terms of the Intercreditor
Agreement, Collateral Agent may, if it so elects, seek the appointment of a
receiver or keeper to take possession of Collateral and to enforce any of
Collateral Agent’s remedies (for the benefit of Collateral Agent and the
Secured Parties), with respect to such appointment without prior notice or
hearing as to such appointment.  Subject
to the terms of the Intercreditor Agreement, Collateral Agent shall apply the
net proceeds of any such collection, recovery, receipt, appropriation, realization
or sale as set forth in Section 24, and only after so paying over such net
proceeds, and after the payment by Collateral Agent of any other amount
required by any provision of law, need Collateral Agent account for the
surplus, if any, to Grantors.  To the
maximum extent permitted by applicable law, each Grantor waives all claims,
damages, and demands against Collateral Agent or any Secured Party arising out
of the repossession, retention or sale of the Collateral except to the extent
that such arise out of the gross negligence or willful misconduct of Collateral
Agent or such Secured Party as determined by a court of competent
jurisdiction.  Each Grantor agrees that
ten (10) days prior notice by Collateral Agent of the time and place of
any public sale or of the time after which a private sale may take place is
reasonable notification of such matters. 
Grantors shall remain liable for any deficiency if the proceeds of any
sale or disposition of the Collateral are insufficient to pay all Second Lien Obligations,
including any attorneys’ fees and other expenses incurred by Collateral Agent
or any Secured Party to collect such deficiency.

 

(b)           Except as otherwise specifically
provided herein, each Grantor hereby waives presentment, demand, protest or any
notice (to the maximum extent permitted by applicable law) of any kind in
connection with this Security Agreement or any Collateral.

 

(c)           To the extent that applicable law
imposes duties on Collateral Agent to exercise remedies in a commercially
reasonable manner, each Grantor acknowledges and 

 

21

 

agrees that it is not commercially unreasonable for
Collateral Agent (i) to fail to incur expenses reasonably deemed
significant by Collateral Agent to prepare Collateral for disposition or
otherwise to complete raw material or work in process into finished goods or
other finished products for disposition, (ii) to fail to obtain third
party consents for access to Collateral to be disposed of, or to obtain or, if
not required by other law, to fail to obtain governmental or third party
consents for the collection or disposition of Collateral to be collected or
disposed of, (iii) to fail to exercise collection remedies against Account
Debtors or other Persons obligated on Collateral or to remove Liens on or any
adverse claims against Collateral, (iv) to exercise collection remedies
against Account Debtors and other Persons obligated on Collateral directly or
through the use of collection agencies and other collection specialists, (v) to
advertise dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature, (vi) to
contact other Persons, whether or not in the same business as Grantors, for expressions
of interest in acquiring all or any portion of such Collateral, (vii) to
hire one or more professional auctioneers to assist in the disposition of
Collateral, whether or not the Collateral is of a specialized nature, (viii) to
dispose of Collateral by utilizing internet sites that provide for the auction
of assets of the types included in the Collateral or that have the reasonable
capacity of doing so, or that match buyers and sellers of assets, (ix) to
dispose of assets in wholesale rather than retail markets, (x) to disclaim
disposition warranties, such as title, possession or quiet enjoyment, (xi) to
purchase insurance or credit enhancements to insure Collateral Agent against
risks of loss, collection or disposition of Collateral or to provide to
Collateral Agent a guaranteed return from the collection or disposition of
Collateral, or (xii) to the extent deemed appropriate by Collateral Agent,
to obtain the services of other brokers, investment bankers, consultants and
other professionals to assist Collateral Agent in the collection or disposition
of any of the Collateral.  Each Grantor
acknowledges that the purpose of this Section 7(c) is to provide
non-exhaustive indications of what actions or omissions by Collateral Agent
would not be commercially unreasonable in Collateral Agent’s exercise of
remedies against the Collateral and that other actions or omissions by
Collateral Agent shall not be deemed commercially unreasonable solely on
account of not being indicated in this Section 7(c).  Without limitation upon the foregoing,
nothing contained in this Section 7(c) shall be construed to grant
any rights to Grantors or to impose any duties on Collateral Agent that would
not have been granted or imposed by this Security Agreement or by applicable law
in the absence of this Section 7(c).

 

(d)           Neither Collateral Agent nor the
Secured Parties shall be required to make any demand upon, or pursue or exhaust
any of their rights or remedies against, any Grantor, any other obligor,
guarantor, pledgor or any other Person with respect to the payment of the
Second Lien Obligations or to pursue or exhaust any of their rights or remedies
with respect to any Collateral therefor or any direct or indirect guarantee
thereof.  Neither Collateral Agent nor
the Secured Parties shall be required to marshal the Collateral or any
guarantee of the Second Lien Obligations or to resort to the Collateral or any
such guarantee in any particular order, and all of its and their rights
hereunder or under any other Security Document or Additional Pari Passu
Agreement shall be cumulative.  To the
extent it may lawfully do so, each Grantor absolutely and irrevocably waives
and relinquishes the benefit and advantage of, and covenants not to assert
against Collateral Agent or any Secured Party, any valuation, stay,
appraisement, extension, 

 

22

 

redemption or similar laws and any and all rights
or defenses it may have as a surety now or hereafter existing which, but for
this provision, might be applicable to the sale of any Collateral made under
the judgment, order or decree of any court, or privately under the power of
sale conferred by this Security Agreement, or otherwise.

 

8.             GRANT OF LICENSE TO USE
INTELLECTUAL PROPERTY.  Solely for
the purpose of enabling Collateral Agent to exercise rights and remedies under Section 7
hereof (including, without limiting the terms of Section 7 hereof, in
order to take possession of, hold, preserve, process, assemble, prepare for
sale, market for sale, sell, monitor, collect or otherwise dispose of
Collateral), effective upon the occurrence and during the continuance of an
Event of Default and at such time as Collateral Agent shall be lawfully
entitled to exercise such rights and remedies, each Grantor hereby grants to
Collateral Agent, for the benefit of Collateral Agent and the Secured Parties
(subject to the terms of the Intercreditor Agreement), the nonexclusive right
and license (exercisable without payment of royalty or other compensation to
Grantors) to use all Intellectual Property now owned or hereafter acquired by
such Grantor, and wherever the same may be located, and including in such
license access to all material media in which any of the material licensed
items may be recorded or stored and to all material computer software and
programs used for the compilation or printout thereof, and in any case to the
extent that it is permitted to do so under applicable law and, with respect to
Licenses, to the extent it is permitted to do so under contractual obligations.

 

9.             LIMITATION ON COLLATERAL AGENT’S
AND SECURED PARTIES’ DUTY IN RESPECT OF SECURITY AGREEMENT COLLATERAL.  Collateral Agent and each Secured Party shall
use reasonable care with respect to the Collateral in its possession or under
its control.  Neither Collateral Agent
nor any Secured Party shall have any other duty as to any Collateral in its
possession or control or in the possession or control of any agent or nominee
of Collateral Agent or such Secured Party, or any income thereon or as to the
preservation of rights against prior parties or any other rights pertaining
thereto.

 

10.           REINSTATEMENT.  This Security Agreement shall remain in full
force and effect and continue to be effective should any petition be filed by
or against any Grantor for liquidation or reorganization, should any Grantor
become insolvent or make an assignment for the benefit of any creditor or
creditors or should a receiver or trustee be appointed for all or any
significant part of any Grantor’s assets, and shall continue to be effective or
be reinstated, as the case may be, if and to the extent at any time payment and
performance of the Second Lien Obligations, or any part thereof, is, pursuant
to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Second Lien Obligations, whether as
a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though
such payment or performance had not been made. 
In the event that any payment, or any part thereof, is rescinded,
reduced, restored or returned, the Second Lien Obligations shall be reinstated
and deemed reduced only by such amount paid and not so rescinded, reduced,
restored or returned.

 

11.           NOTICES.  Except as otherwise provided herein, whenever
it is provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by any other party, or whenever any of the parties desires to
give and serve upon any other party any communication with respect to this
Security Agreement, each such notice, demand, request, consent, approval,
declaration or other 

 

23

 

communication shall be in
writing and shall be given in the manner, and deemed received, as provided for
in the Indenture. Any notice to an Additional Pari Passu Agent shall be given
at its address set forth in the Additional Pari Passu Joinder Agreement or set
forth in any subsequent notice from such Additional Pari Passu Agent to the
parties hereto.

 

12.           SEVERABILITY.  Whenever possible, each provision of this
Security Agreement shall be interpreted in a manner as to be effective and
valid under applicable law, but if any provision of this Security Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of
this Security Agreement.  This Security
Agreement is to be read, construed and applied together with the Indenture, any
Additional Pari Passu Agreement and the other Security Documents which, taken
together, set forth the complete understanding and agreement of Collateral
Agent, the Secured Parties and Grantors with respect to the matters referred to
herein and therein.

 

13.           NO WAIVER; AMENDMENTS, CUMULATIVE
REMEDIES.  Neither Collateral Agent
nor any Secured Party shall by any act, delay, omission or otherwise be deemed
to have waived any of its rights or remedies hereunder, and no waiver shall be
valid unless in writing, signed by Collateral Agent and then only to the extent
therein set forth.  A waiver by
Collateral Agent of any right or remedy hereunder on any one occasion shall not
be construed as a bar to any right or remedy which Collateral Agent would
otherwise have had on any future occasion. 
No failure to exercise nor any delay in exercising on the part of
Collateral Agent or any Secured Party, any right, power or privilege hereunder,
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or future exercise
thereof or the exercise of any other right, power or privilege.  The rights and remedies hereunder provided
are cumulative and may be exercised singly or concurrently, and are not
exclusive of any rights and remedies provided by law.  Except for waivers, amendments, alterations
and modifications effected by the operation of Section 5.3(d) of the
Intercreditor Agreement, none of the terms or provisions of this Security
Agreement may be waived, altered, modified or amended except by an instrument
in writing, duly executed by Collateral Agent and Grantors.

 

14.           LIMITATION BY LAW.  All rights, remedies and powers provided in
this Security Agreement may be exercised only to the extent that the exercise
thereof does not violate any applicable provision of law, and all the
provisions of this Security Agreement are intended to be subject to all
applicable mandatory provisions of law that may be controlling and to be
limited to the extent necessary so that they shall not render this Security
Agreement invalid, unenforceable, in whole or in part, or not entitled to be
recorded, registered or filed under the provisions of any applicable law.

 

15.           TERMINATION OF THIS SECURITY
AGREEMENT; PARTIAL LIEN RELEASE.  The
Liens securing the Notes, will, automatically and without the need for any
further action by any Person be released, in whole or in part, as provided in Section 8.03
of the Indenture and Section 5.1 of the Intercreditor Agreement.  The Liens securing the Permitted Additional
Pari Passu Obligations of any series will be released, in whole or in part, as
provided in the Additional Pari Passu Agreement governing such obligations. In
connection with any such release, (i) any Collateral then in the custody
of the Collateral Agent or its nominee shall be re-

 

24

 

delivered to the Issuer as
soon as practicable and (ii) the Collateral Agent shall take such other
actions as may be reasonably requested by any Grantor to evidence such release
at the expense of such Grantor.

 

16.           SUCCESSORS AND ASSIGNS.  This Security Agreement and all obligations
of Grantors hereunder shall be binding upon the successors and assigns of
Grantors (including any debtor-in-possession on behalf of Grantors) and shall,
together with the rights and remedies of Collateral Agent, for the benefit of
Collateral Agent and the Secured Parties, hereunder, inure to the benefit of
Collateral Agent and the Secured Parties, all future holders of any instrument
evidencing any of the Second Lien Obligations and their respective successors
and assigns.  No sales of participations,
other sales, assignments, transfers or other dispositions of any agreement
governing or instrument evidencing the Second Lien Obligations or any portion
thereof or interest therein shall in any manner impair the Lien granted to
Collateral Agent, for the benefit of Collateral Agent and the Secured Parties,
hereunder.  No Grantor may assign, sell,
hypothecate or otherwise transfer any interest in or obligation under this
Security Agreement.

 

17.           COUNTERPARTS.  This Security Agreement may be authenticated
in any number of separate counterparts, each of which shall collectively and
separately constitute one agreement. 
This Security Agreement may be authenticated by manual signature,
facsimile or, if approved in writing by Collateral Agent, electronic means, all
of which shall be equally valid.

 

18.           GOVERNING LAW.  THIS SECURITY AGREEMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.  EACH GRANTOR HEREBY CONSENTS AND AGREES THAT
THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY, CITY OF NEW YORK, NEW
YORK, SHALL HAVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES
BETWEEN GRANTORS, COLLATERAL AGENT AND SECURED PARTIES PERTAINING TO THIS
SECURITY AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS SECURITY
AGREEMENT, PROVIDED, THAT COLLATERAL AGENT, SECURED PARTIES AND GRANTORS
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
COURT LOCATED OUTSIDE NEW YORK COUNTY, AND, PROVIDED, FURTHER, NOTHING
IN THIS SECURITY AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM
BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE
ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT.  EACH GRANTOR EXPRESSLY SUBMITS AND CONSENTS
IN ADVANCE TO SUCH JURISDICTION IN ANY SUCH ACTION OR SUIT COMMENCED IN ANY
SUCH COURT, AND EACH GRANTOR HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE
BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM  NON
CONVENIENS.  EACH GRANTOR HEREBY
WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN
ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND
OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO
GRANTORS AT THE ADDRESS SET FORTH IN THE INDENTURE AND THAT SERVICE SO MADE 

 

25

 

SHALL BE DEEMED COMPLETED
UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR FIVE (5) DAYS AFTER DEPOSIT
IN THE U.S. MAILS, PROPER POSTAGE PREPAID.

 

19.           WAIVER OF JURY TRIAL.  BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT DISPUTES
ARISING HEREUNDER OR RELATING HERETO BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS.  THEREFORE, TO ACHIEVE
THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION,
THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE, AMONG COLLATERAL AGENT, SECURED PARTIES, AND GRANTORS ARISING OUT
OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
IN CONNECTION WITH, THIS SECURITY AGREEMENT OR THE TRANSACTIONS RELATED HERETO.

 

20.           SECTION TITLES.  The Section titles contained in this Security
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.

 

21.           NO STRICT CONSTRUCTION.  The parties hereto have participated jointly
in the negotiation and drafting of this Security Agreement.  In the event an ambiguity or question of
intent or interpretation arises, this Security Agreement shall be construed as
if drafted jointly by the parties hereto and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of
any provisions of this Security Agreement.

 

22.           ADVICE OF COUNSEL.  Each of the parties represents to each other
party hereto that it has discussed this Security Agreement and, specifically,
the provisions of Section 18 and Section 19, with its
counsel.

 

23.           BENEFIT OF SECURED PARTIES.  All Liens granted or contemplated hereby
shall be for the benefit of Collateral Agent individually and Collateral Agent
for the benefit of the Secured Parties, and all proceeds or payments realized
from Collateral in accordance herewith shall be applied (subject to the terms
of the Intercreditor Agreement) to the Second Lien Obligations in accordance
with Section 24.

 

24.           APPLICATION OF PROCEEDS.  Subject to the terms of the Intercreditor
Agreement, the proceeds received by the Collateral Agent in respect of any sale
of, collection from or other realization upon all or any part of the Pledged
Collateral pursuant to the exercise by the Collateral Agent of its remedies
shall be applied, together with any other sums then held by the Collateral
Agent pursuant to this Security Agreement, pro rata to the Secured Parties in
proportion to the unpaid amounts of Second Lien Obligations with such proceeds
applied (i) as among the Holders, as set forth in the Indenture and (ii) as
among the holders of the Permitted 

 

26

 

Additional Pari Passu
Obligations (other than the Additional Notes), as set forth in the applicable
Additional Pari Passu Agreement.  In
making the determination and allocations required by this Section 24, the
Collateral Agent may conclusively rely upon information supplied by (i) the
Trustee as to the amounts of unpaid principal and interest and other amounts
outstanding with respect to the Notes and (ii) the applicable Additional
Pari Passu Agent as to the amounts of unpaid principal and interest and other
amounts outstanding with respect to such Permitted Additional Pari Passu
Obligations and the Collateral Agent shall have no liability to any of the
Secured Parties for actions taken in reliance on such information; provided
that nothing in this sentence shall prevent any Grantor from contesting any
amounts claimed by any Secured Party in any information so supplied.  All distributions made by the Collateral
Agent pursuant to this Section 24 shall be (subject to any decree of any
court of competent jurisdiction) final (absent manifest error), and the
Collateral Agent shall have no duty to inquire as to the application by the
Trustee, or an Additional Pari Passu Agent of any amounts distributed to such
Person.  If, despite the provisions of
this Security Agreement, any Secured Party shall receive any payment or other
recovery in excess of its portion of payments on account of the Second Lien
Obligations to which it is then entitled in accordance with this Security
Agreement, such Secured Party shall hold such payment or other recovery in
trust for the benefit of all Secured Parties hereunder for distribution in
accordance with this Section 24.

 

25.           PERMITTED ADDITIONAL PARI PASSU
OBLIGATIONS.  On or after the Issue
Date, the Issuer may from time to time designate additional obligations as
Permitted Additional Pari Passu Obligations by delivering to Collateral Agent,
the Trustee and each Additional Pari Passu Agent (a) a certificate signed
by the chief financial officer of the Issuer (i) identifying the
obligations so designated and the aggregate principal amount or face amount
thereof, stating that such obligations are designated as “Permitted Additional
Pari Passu Obligations” for purposes hereof, (ii) representing that such
designation complies with the terms of the Indenture and each then existing
Additional Pari Passu Agreement, (iii) specifying the name and address of
the Additional Pari Passu Agent for such obligations (if other than the
Trustee) and (iv) stating that no Default or Event of Default exists; (b) except
in the case of Additional Notes, a fully executed Additional Pari Passu Joinder
Agreement (in the form attached as Exhibit G hereto), (c) an
Officers’ Certificate to the effect that the designation of such obligations as
“Permitted Additional Pari Passu Obligations” does not violate the terms of the
Indenture and each then existing Additional Pari Passu Agreement (upon which
Collateral Agent may conclusively rely) and (d) evidence that the
Additional Pari Passu Agent for the applicable series of Permitted Additional
Pari Passu Obligations has entered into an agency agreement with Collateral
Agent that is acceptable to Collateral Agent, acting in its sole discretion.

 

26.           SUPPLEMENTS; JOINDER.  In the event that any Grantor is required to
deliver a supplement pursuant to Section 5(a)(vii), or any Person becomes
required at any time to become a Grantor under this Security Agreement pursuant
to the requirements of the Indenture, this Security Agreement, or the
Intercreditor Agreement, the relevant Grantor or Person shall do so by
delivering an appropriately completed Supplement, substantially in the form of Exhibit F
attached hereto (a “Supplement”) or in such other form as may be reasonably
required to satisfy the applicable requirements of the Indenture, this
Agreement, and the Intercreditor Agreement.

 

[Signature Page Follows]

 

27

 

IN WITNESS WHEREOF, each of the parties hereto has
caused this Security Agreement to be executed and delivered by its duly
authorized officer as of the date first set forth above.

 

	
   

  	
  SQUARETWO FINANCIAL CORPORATION, as

  
	
   

  	
  Grantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul A. Larkins

  
	
   

  	
   

  	
  Name: Paul A. Larkins

  
	
   

  	
   

  	
  Title: President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  HEALTHCARE FUNDING SOLUTIONS, LLC

  
	
   

  	
  CACH, LLC

  
	
   

  	
  CACV OF COLORADO, LLC

  
	
   

  	
  ORSA, LLC

  
	
   

  	
  CANDEO, LLC

  
	
   

  	
  AUTUS, LLC

  
	
   

  	
  CACH OF NJ, LLC

  
	
   

  	
  CACV OF NEW JERSEY, LLC

  
	
   

  	
  COLLECT AMERICA OF CANADA, LLC, as Grantors

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul A. Larkins

  
	
   

  	
   

  	
  Name: Paul A. Larkins

  
	
   

  	
   

  	
  Title:   Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SQUARETWO FINANCIAL COMMERCIAL FUNDING CORPORATION

  
	
   

  	
  REFINANCE AMERICA, LTD., as Grantors

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas G. Good

  
	
   

  	
   

  	
  Name: Thomas G. Good

  
	
   

  	
   

  	
  Title:   Secretary

  

 

 

	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert J. Dunn

  
	
   

  	
   

  	
  Name: Robert J. Dunn

  
	
   

  	
   

  	
  Title:   Vice President

  

 

 

SCHEDULE 2(a)

 

COMMERCIAL TORT CLAIMS

 

Commercial Tort Claims:

 

None.

 

 

SCHEDULE 4(d)

 

INSTRUMENTS, CHATTEL PAPER

AND

LETTER OF CREDIT RIGHTS

 

Instruments:

 

1.  Notes issued by Franchisees as set forth
below:

 

	
   

  	
   

  	
  Original

  	
   

  	
  Maturity

  	
   

  	
  Current

  Balance as of

  	
   

  	
   

  	
   

  
	
  Franchise Name

  	
   

  	
  Note

  	
   

  	
  Date

  	
   

  	
  2/28/10

  	
   

  	
  No.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Superlative Bis, LLC

  	
   

  	
  $

  	
  124,842.28

  	
   

  	
  11/05/11

  	
   

  	
  $

  	
  103,839.67

  	
   

  	
  N-0102

  	
   

  
	
  Landmark Collections

  	
   

  	
  $

  	
  200,000.00

  	
   

  	
  02/16/12

  	
   

  	
  $

  	
  200,000.00

  	
   

  	
  N-0096

  	
   

  
	
  Primo Professionals, Inc

  	
   

  	
  $

  	
  200,000.00

  	
   

  	
  04/05/12

  	
   

  	
  $

  	
  200,000.00

  	
   

  	
  N-0098

  	
   

  
	
  Jerry M Mims

  	
   

  	
  $

  	
  38,124.60

  	
   

  	
  11/01/09

  	
   

  	
  $

  	
  34,088.28

  	
   

  	
  N-0078

  	
   

  
	
  Bronson & Migliaccio

  	
   

  	
  $

  	
  500,000.00

  	
   

  	
  11/05/13

  	
   

  	
  $

  	
  366,666.72

  	
   

  	
  N-0108

  	
   

  
	
  Daniels & Norelli

  	
   

  	
  $

  	
  150,000.00

  	
   

  	
  03/21/13

  	
   

  	
  $

  	
  240,468.01

  	
   

  	
  N-0113

  	
   

  
	
  Primo Professionals, Inc

  	
   

  	
  $

  	
  150,000.00

  	
   

  	
  06/05/13

  	
   

  	
  $

  	
  97,500.00

  	
   

  	
  N-0114

  	
   

  
	
  Graline Financial Services

  	
   

  	
  $

  	
  150,000.00

  	
   

  	
  11/05/10

  	
   

  	
  $

  	
  150,000.00

  	
   

  	
  N-0118

  	
   

  
	
  Advantage Business Services

  	
   

  	
  $

  	
  50,000.00

  	
   

  	
  01/05/11

  	
   

  	
  $

  	
  41,666.68

  	
   

  	
  N-0121

  	
   

  
	
  P Scott Lowery, PC

  	
   

  	
  $

  	
  100,000.00

  	
   

  	
  08/05/10

  	
   

  	
  $

  	
  41,666.69

  	
   

  	
  N-0122

  	
   

  
	
  LMM Management (Landis)

  	
   

  	
  $

  	
  50,000.00

  	
   

  	
  09/05/10

  	
   

  	
  $

  	
  25,000.04

  	
   

  	
  N-0123

  	
   

  
	
  Collect Southeast LLC

  	
   

  	
  $

  	
  44,866.92

  	
   

  	
  09/05/11

  	
   

  	
  $

  	
  33,650.22

  	
   

  	
  N-0124

  	
   

  
	
  CMMM Inc (Mandarich)

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  10/05/10

  	
   

  	
  $

  	
  14,583.35

  	
   

  	
  N-0125

  	
   

  
	
  Superlative Bis, LLC

  	
   

  	
  $

  	
  51,281.16

  	
   

  	
  07/05/10

  	
   

  	
  $

  	
  27,034.30

  	
   

  	
  N-0126

  	
   

  
	
  Prime Collect (Clark)

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  10/05/10

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  N-0127

  	
   

  
	
  Primo Professionals, Inc

  	
   

  	
  $

  	
  75,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  75,000.00

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Notes Receivable

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  1,676,163.96

  	
   

  	
   

  	
   

  

 

Letter of Credit Rights:

 

None.

 

Chattel Paper:

 

None.

 

 

SCHEDULE 4(e)

 

SCHEDULE OF OFFICES, LOCATIONS OF COLLATERAL

AND RECORDS CONCERNING GRANTORS’ COLLATERAL

 

	
  Name of Grantor

  	
   

  	
  Other Names

  	
   

  	
  Type of Entity

  	
   

  	
  Jurisdiction of

  Organization

  	
   

  	
  Chief Executive

  Office & Principal

  Place of Business

  	
   

  	
  Corporate

  Offices

  	
   

  	
  Organizational

  ID Number

  
	
  SquareTwo Financial Corporation

  	
   

  	
  Collect America, Ltd.

  	
   

  	
  Corporation

  	
   

  	
  Delaware

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  Same

  	
   

  	
  2389683

  
	
  CA Holding, Inc.

  	
   

  	
   

  	
   

  	
  Corporation

  	
   

  	
  Delaware

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  Same

  	
   

  	
  3972812

  
	
  SquareTwo Financial Commercial Funding Corporation

  	
   

  	
  Collect America Commercial Services, Inc.  

  

  Guardian Financial Corporation

  	
   

  	
  Corporation

  	
   

  	
  Delaware

  	
   

  	
  16011 College Boulevard  Suite 101  Lenexa,
  Kansas 66219

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  3921804

  
	
  ReFinance America, Ltd.

  	
   

  	
   

  	
   

  	
  Corporation

  	
   

  	
  Nevada

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  Same

  	
   

  	
  C18309-1996

  
	
  CACV of Colorado, LLC

  	
   

  	
   

  	
   

  	
  Limited Liability Company

  	
   

  	
  Colorado

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  Same

  	
   

  	
  20021053155

  
	
  CACV of New Jersey, LLC

  	
   

  	
   

  	
   

  	
  Limited Liability Company

  	
   

  	
  Colorado

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  Same

  	
   

  	
  20041156077

  
	
  Collect America of Canada, LLC

  	
   

  	
   

  	
   

  	
  Limited Liability Company

  	
   

  	
  Colorado

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  Same

  	
   

  	
  20051038054

  

 

 

	
  Name of Grantor

  	
   

  	
  Other Names

  	
   

  	
  Type of Entity

  	
   

  	
  Jurisdiction of

  Organization

  	
   

  	
  Chief Executive

  Office & Principal

  Place of Business

  	
   

  	
  Corporate

  Offices

  	
   

  	
  Organizational

  ID Number

  
	
  CACH, LLC

  	
   

  	
   

  	
   

  	
  Limited Liability Company

  	
   

  	
  Colorado

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  Same

  	
   

  	
  20051120495

  
	
  CACH of NJ, LLC

  	
   

  	
   

  	
   

  	
  Limited Liability Company

  	
   

  	
  Colorado

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  Same

  	
   

  	
  20051152993

  
	
  Healthcare Funding Solutions, LLC

  	
   

  	
   

  	
   

  	
  Limited Liability Company

  	
   

  	
  Colorado

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  Same

  	
   

  	
  20051211589

  
	
  Orsa, LLC

  	
   

  	
   

  	
   

  	
  Limited Liability Company

  	
   

  	
  Colorado

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  Same

  	
   

  	
  20061446586

  
	
  Candeo, LLC

  	
   

  	
   

  	
   

  	
  Limited Liability Company

  	
   

  	
  Colorado

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  Same

  	
   

  	
  20061446551

  
	
  Autus, LLC

  	
   

  	
   

  	
   

  	
  Limited Liability Company

  	
   

  	
  Colorado

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  Same

  	
   

  	
  20061446524

  
	
  SquareTwo Financial Canada Corporation

  	
   

  	
  CA Acquisition Company

  	
   

  	
  Corporation

  	
   

  	
  Nova Scotia, Canada

  	
   

  	
  1310 Kerrisdale Boulevard  Suite 200  Newmarket,
  ON, Canada

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  3097616

  Canada Business Number  

  85548 0174

  
	
  CCL Financial Inc.

  	
   

  	
  Collect Canada, Ltd.

   

  Collections Institute of Canada Ltd.

   

  Agence De Recouvrement CCL Financier

  	
   

  	
  Corporation

  	
   

  	
  Ontario, Canada

  	
   

  	
  1310 Kerrisdale Boulevard  Suite 200  Newmarket,
  ON, Canada

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  001170695

  

 

 

	
  Name of Grantor

  	
   

  	
  Other Names

  	
   

  	
  Type of Entity

  	
   

  	
  Jurisdiction of

  Organization

  	
   

  	
  Chief Executive

  Office & Principal

  Place of Business

  	
   

  	
  Corporate

  Offices

  	
   

  	
  Organizational

  ID Number

  
	
   

  	
   

  	
  Agence De Recouvrement Collection Agency

   

  Agence De Recouvrement CIC

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Preferred Credit Resources Limited

  	
   

  	
   

  	
   

  	
  Corporation

  	
   

  	
  Ontario, Canada

  	
   

  	
  1310 Kerrisdale Boulevard  Suite 200  Newmarket,
  ON, Canada

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  2063817

  
	
  Metropolitan Legal Administration Services Inc.

  	
   

  	
  1437227 Ontario Limited

  	
   

  	
  Corporation

  	
   

  	
  Ontario, Canada

  	
   

  	
  1310 Kerrisdale Boulevard  Suite 200  Newmarket,
  ON, Canada

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  1437227

  

 

Recently acquired entities:

 

Impulse Marketing Group, LLC., AmeriPromotion, LLC,
Bigelow, LLC, Chocolate Punch, LLC, Digital Masters, LLC, Ecaddie, LLC,
Eclipse, LLC, eHanover, LLC,  Email
hello, LLC, Extract, LLC, Govault, LLC, Preference Networks, LLC, Rackorib,
LLC, Tango Telco, LLC, Telway Online, LLC, Vigorous, LLC, and Webexpo, LLC were
acquired on November 21, 2006 and subsequently dissolved after the sale of
all of their assets on December 29, 2008.

 

Depot Tech, LLC was acquired on or around October 26,
2007 and subsequently dissolved after the sale of all of its assets on December 29,
2008.

 

Warehouses:

None.

 

 

Other Premises at which Collateral is Stored or
Located:

 

None.

 

Locations of Records Concerning Collateral:

 

All records concerning Collateral are located at the
Chief Executive Office and Corporate Office each Grantor.

 

 

SCHEDULE 4(g)

 

INTELLECTUAL PROPERTY

 

Patents:

 

None.

 

Trademarks:

 

	
  Serial

  Number

  	
   

  	
  Reg. Number

  	
   

  	
  Word Mark

  	
   

  	
  Owner

  	
   

  	
  Jurisdiction

  
	
  75109744

  	
   

  	
  2055196

  	
   

  	
  Collect America (Typed Drawing)

  	
   

  	
  Collect America, Ltd.

  (n/k/a SquareTwo Financial Corporation)

  	
   

  	
  USPTO

  
	
  75109743

  	
   

  	
  2077288

  	
   

  	
  Collect America (Eagle Design Plus Words, Letters
  and/or Numbers)

  	
   

  	
  Collect America, Ltd.

  (n/k/a SquareTwo Financial Corporation)

  	
   

  	
  USPTO

  
	
  74526997

  	
   

  	
  2030606

  	
   

  	
  Collect America (Typed Drawing)

  	
   

  	
  Collect America, Ltd.

  (n/k/a SquareTwo Financial Corporation)

  	
   

  	
  USPTO

  

 

Copyrights:

 

	
  Owner

  	
   

  	
  Copyright

  	
   

  	
  Country

  	
   

  	
  Registration 

  No.

  	
   

  	
  Registration Date

  
	
  Collect America, Ltd. (n/k/a SquareTwo
  Financial Corporation)

  	
   

  	
  Success Through America’s Recovery Specialists (STARS)-Client

  	
   

  	
  U.S.

  	
   

  	
  TX 4-926-335

  	
   

  	
  January 19, 1999

  
	
   

  	
  Supplement

  	
   

  	
  U.S.

  	
   

  	
  TX 5-130-092

  	
   

  	
  February 07, 2000

  
	
  Collect America, Ltd. (n/k/a SquareTwo
  Financial Corporation)

  	
   

  	
  Success Through America’s Recovery Specialists (STARS)-Server

  	
   

  	
  U.S.

  	
   

  	
  TX 889-233

  	
   

  	
  January 19, 1999

  
	
   

  	
  Supplement

  	
   

  	
  U.S.

  	
   

  	
  TX 937-910

  	
   

  	
  February 07, 2000

  

 

Material Licenses:

 

None.

 

Restrictions:

 

None.

 

 

SCHEDULE 4(k)

 

DEPOSIT ACCOUNTS

 

	
  Title

  	
   

  	
  Bank

  	
   

  	
  Location

  	
   

  	
  Acct #

  
	
  SquareTwo Financial Corporation

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Operating account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152307768746

  
	
  Legal Cost ZBA

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152307768803

  
	
  Payroll

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152307768761

  
	
  West Healthcare Trust

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152308789899

  
	
  Hilco Receivables Trust

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152308789881

  
	
  North Carolina Trust

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152308791317

  
	
  Collect America Trust

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152307768795

  
	
  Trust Refund ZBA

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152307768811

  
	
  Jefferson Capital Trust

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152307768753

  
	
  Midland Credit Mgt Trust

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152307768829

  
	
  Sales/Recourse account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152307768779

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CACH, LLC

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Trust account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152307771948

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CACV of Colorado, LLC

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Trust account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152307771930

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SquareTwo Financial Commercial Funding
  Corporation

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Operating account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152304521700

  
	
  Trust account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152304521726

  
	
  Payroll account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152304521718

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Operating account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152304521684

  
	
  Trust account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152304521692

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Healthcare Funding Solutions, LLC

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Operating account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152304521684

  
	
  Trust account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152304521692

  

 

 

	
  Title

  	
   

  	
  Bank

  	
   

  	
  Location

  	
   

  	
  Acct #

  
	
  ReFinance America, Ltd.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Operating account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152307768852

  
	
  RLLP trust account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152307768860

  

 

 

SCHEDULE 4(l)

 

BAILEES

 

Collateral in the possession of a consignee, bailee,
warehouseman, agent or processor:

 

None.

 

 

SCHEDULE 5(r)

1.

 

	
  Pledgor

  	
   

  	
  Name of Issuing

  Corporation

  	
   

  	
  Number of

  Shares

  	
   

  	
  Certificate No.

  
	
  CA
  Holding, Inc.

  	
   

  	
  SquareTwo
  Financial Corporation

  	
   

  	
  1,000

  	
   

  	
  1437-3

  
	
  Collect America
  of Canada, LLC

  	
   

  	
  SquareTwo
  Financial Canada Corporation

  	
   

  	
  22,750

  	
   

  	
  4

  
	
  SquareTwo
  Financial Corporation

  	
   

  	
  SquareTwo
  Financial 

  Commercial Funding Corporation

  	
   

  	
  720

  400

  680

  148

  	
   

  	
  1

  11

  12

  13

  
	
  SquareTwo
  Financial Corporation

  	
   

  	
  ReFinance
  America, Ltd

  	
   

  	
  50

  	
   

  	
  1

  
	
  SquareTwo
  Financial Corporation

  	
   

  	
  Collect
  America of Canada, LLC

  	
   

  	
  100%

  	
   

  	
  R-1

  
	
  SquareTwo
  Financial Corporation

  	
   

  	
  Healthcare
  Funding Solutions, LLC

  	
   

  	
  100%

  	
   

  	
  R-1

  
	
  SquareTwo
  Financial Corporation

  	
   

  	
  CACH, LLC

  	
   

  	
  100%

  	
   

  	
  R-1

  
	
  SquareTwo
  Financial Corporation

  	
   

  	
  CACV of
  Colorado, LLC

  	
   

  	
  100%

  	
   

  	
  R-1

  
	
  CACH, LLC

  	
   

  	
  CACH of
  NJ, LLC

  	
   

  	
  100%

  	
   

  	
  R-1

  
	
  CACV of
  Colorado, LLC

  	
   

  	
  CACV of
  New Jersey, LLC

  	
   

  	
  100%

  	
   

  	
  R-1

  

 

 

EXHIBIT A

 

SECOND LIEN COPYRIGHT ASSIGNMENT
OF SECURITY

 

WHEREAS, [NAME OF GRANTOR] a [corporation][limited
liability company] formed under the laws of [                              ],
located at [                              ]
(the “Grantor”) is the owner of all right, title and interest in and to the
United States copyrights and associated United States copyright registrations
and applications for registration set forth under Grantor’s name in Schedule
A  attached hereto (the, “Copyrights”);

 

WHEREAS, Grantor is obligated to U.S. BANK NATIONAL
ASSOCIATION (“Collateral Agent”) and various other secured parties
(collectively, the “Secured Parties”) and pursuant to (i) the Indenture,
dated as of April 7, 2010, among U.S. BANK NATIONAL ASSOCIATION as Trustee,
Collateral Agent, the Secured Parties, Grantor and the other credit parties
named therein and (ii) a certain Second Lien Security Agreement, dated the
date hereof, among Grantor, other parties named therein and Collateral Agent
(as each may be amended, modified, restated or supplemented from time to time,
collectively, the “Agreements”); and

 

WHEREAS, pursuant to the Agreements, Grantor is
granting to Collateral Agent for its benefit and for the ratable benefit of the
Secured Parties a security interest in the security interest in and lien upon
the copyrights and copyright registrations and applications therefor described
above.

 

NOW, THEREFORE, for good and valuable consideration,
receipt of which is hereby acknowledged, Grantor does hereby assign unto Collateral
Agent for its benefit and for the ratable benefit of the Secured Parties and
grant to Collateral Agent for its benefit and for the ratable benefit of the
Secured Parties a security interest in and to the Copyrights, and the copyright
registrations and applications therefor, which assignment and security interest
shall secure all the Second Lien Obligations as defined in the Agreements and
in accordance with the terms and provisions thereof.

 

Grantor expressly acknowledges and affirms that the
rights and remedies of Collateral Agent and the Secured Parties with respect to
the assignment and security interest granted hereby are more fully set forth in
the Agreements.

 

Exhibit A - 1

 

IN WITNESS WHEREOF, the undersigned have executed this
Grant as of the      day of                         ,
2010.

 

	
   

  	
  [NAME OF GRANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Exhibit A - 2

 

	
  STATE OF

  	
  )

  
	
   

  	
  : ss.:

  
	
  COUNTY OF

  	
  )

  

 

On this      day of                       ,
2010, before me personally came                 ,
to me known, who, being by me duly sworn, did depose and say that he is the                       
of [NAME OF GRANTOR], the corporation/limited liability company described in
and which executed the foregoing instrument; and that he signed his name
thereto by order of the directors/members of said corporation/limited liability
company.

 

 

	
   

  	
   

  
	
   

  	
  Notary Public

  

 

 

	
  STATE OF

  	
  )

  
	
   

  	
  : ss.:

  
	
  COUNTY OF

  	
  )

  

 

On this      day of                         
2010, before me personally came               ,
to me known, who, being by me duly sworn, did depose and say that he is                 
of U.S. BANK NATIONAL ASSOCIATION, the financial institution described in and
which executed the foregoing instrument; and that he signed his name thereto by
order of the board of directors of said financial institution .

 

 

	
   

  	
   

  
	
   

  	
  Notary Public

  

 

Exhibit A - 3

 

SCHEDULE A

 

Schedule A to a Second Lien Copyright Assignment of
Security dated                     
    , 2010, by and between Grantor and U.S. BANK NATIONAL
ASSOCIATION, as Collateral Agent

 

	
  TITLE

  	
   

  	
  REGISTRATION NUMBER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

Exhibit A - 4

 

EXHIBIT B

 

SECOND LIEN PATENT ASSIGNMENT OF
SECURITY

 

WHEREAS, [NAME OF GRANTOR], a [corporation][limited
liability company] formed under the laws of [                              ],
located at [                              ]
(“Grantor”), owns the patents and patent applications shown in the attached Schedule
A (the “Patents”), for which there are recordings or applications in the
United States Patent and Trademark Office under the numbers shown in the
attached Schedule A; and

 

WHEREAS, Grantor is obligated to U.S. BANK NATIONAL
ASSOCIATION (“Collateral Agent”) and various other secured parties
(collectively, the “Secured Parties”) and pursuant to (i) the Indenture,
dated as of April 7, 2010, among U.S. BANK NATIONAL ASSOCIATION as
Trustee, Collateral Agent, the Secured Parties, Grantor and the other credit
parties named therein and (ii) a certain Second Lien Security Agreement,
dated the date hereof, among Grantor, other parties named therein and
Collateral Agent (as each may be amended, modified, restated or supplemented
from time to time, collectively, the “Agreements”); and

 

WHEREAS, pursuant to the Agreements, Grantor is
granting to Collateral Agent for its benefit and for the ratable benefit of the
Secured Parties a security interest in the Patents, all proceeds thereof, all
rights corresponding thereto and all reissues, divisions, continuations,
renewals, extensions and continuations-in-part thereof, and the recordings and
applications therefore.

 

NOW, THEREFORE, for good and valuable consideration,
receipt of which is hereby acknowledged, Grantor does hereby assign unto
Collateral Agent for its benefit and for the ratable benefit of the Secured
Parties and grant to Collateral Agent for its benefit and for the ratable
benefit of the Secured Parties a security interest in and to the Patents, and
recordings and applications therefor, which assignment and security interest
shall secure all the Second Lien Obligations as defined in the Agreements and
in accordance with the terms and provisions thereof.

 

Grantor expressly acknowledges and affirms that the
rights and remedies of Collateral Agent and the Secured Parties with respect to
the assignment and security interest granted hereby are more fully set forth in
the Agreements.

 

Dated:                            
        , 2010

 

	
   

  	
  [NAME OF GRANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Exhibit B - 1

 

	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Exhibit B - 2

 

	
  STATE OF

  	
  )

  
	
   

  	
  : ss.:

  
	
  COUNTY OF

  	
  )

  

 

On this      day of                       ,
2010, before me personally came                 ,
to me known, who, being by me duly sworn, did depose and say that he is the                       
of [NAME OF GRANTOR], the corporation/limited liability company described in
and which executed the foregoing instrument; and that he signed his name
thereto by order of the directors/members of said corporation/limited liability
company.

 

 

	
   

  	
   

  
	
   

  	
  Notary Public

  

 

 

	
  STATE OF

  	
  )

  
	
   

  	
  : ss.:

  
	
  COUNTY OF

  	
  )

  

 

 

On this      day of                         
2010, before me personally came               ,
to me known, who, being by me duly sworn, did depose and say that he is                 
of U.S. BANK NATIONAL ASSOCIATION, the financial institution described in and
which executed the foregoing instrument; and that he signed his name thereto by
order of the board of directors of said financial institution .

 

 

	
   

  	
   

  
	
   

  	
  Notary Public

  

 

Exhibit B - 3

 

SCHEDULE A

 

Schedule A to a Second Lien Patent Assignment of
Security dated                     
    , 2010, by and between Grantor and U.S. BANK NATIONAL
ASSOCIATION, as Collateral Agent.

 

	
  APPLICATION

  	
   

  	
  ISSUE OR

  	
   

  	
   

  
	
  OR PATENT NO.

  	
   

  	
  FILING DATE

  	
   

  	
  TITLE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

Exhibit B - 4

 

EXHIBIT C

 

SECOND LIEN TRADEMARK ASSIGNMENT
OF SECURITY

 

WHEREAS, [NAME OF GRANTOR] a [corporation][limited
liability company] formed under the laws of [                              ],
located at [                                ]
(“Grantor”), has adopted, used and is using the marks shown in the attached Schedule
A (the “Marks”), for which there are registrations or applications in the
United States Patent and Trademark Office under the numbers shown in the
attached Schedule A; and

 

WHEREAS, Grantor is obligated to U.S. BANK NATIONAL
ASSOCIATION (“Collateral Agent”) and various other secured parties
(collectively, the “Secured Parties”) and pursuant to (i) the Indenture,
dated as of April 7, 2010, among U.S. BANK NATIONAL ASSOCIATION as
Trustee, Collateral Agent, the Secured Parties, Grantor and the other credit
parties named therein and (ii) a certain Second Lien Security Agreement,
dated the date hereof, among Grantor, other parties named therein and
Collateral Agent (as each may be amended, modified, restated or supplemented
from time to time, collectively, the “Agreements”); and

 

WHEREAS, pursuant to the Agreements, Grantor is
granting to Collateral Agent for its benefit and for the ratable benefit of the
Secured Parties a security interest in the Marks, the goodwill of the business
symbolized by the Marks, and the registrations and applications therefor.

 

NOW, THEREFORE, for good and valuable consideration,
receipt of which is hereby acknowledged, Grantor does hereby assign unto
Collateral Agent for its benefit and for the ratable benefit of the Secured
Parties and grant to Collateral Agent for its benefit and for the ratable
benefit of the Secured Parties a security interest in and to the Marks,
together with the goodwill of the business symbolized by the Marks, and
registrations and applications therefor, which assignment and security interest
shall secure all the Second Lien Obligations as defined in the Agreements and
in accordance with the terms and provisions thereof.

 

Grantor expressly acknowledges and affirms that the
rights and remedies of Collateral Agent and the Secured Parties with respect to
the assignment and security interest granted hereby are more fully set forth in
the Agreements.

 

Dated:                              
        , 2010

 

	
   

  	
  [NAME OF GRANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Exhibit C - 1

 

	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Exhibit C - 2

 

	
  STATE OF

  	
  ) 

  
	
   

  	
  : ss.:

  
	
  COUNTY OF

  	
  )

  

 

On this      day of                       ,
2010, before me personally came                 ,
to me known, who, being by me duly sworn, did depose and say that he is the                       
of [NAME OF GRANTOR], the corporation/limited liability company described in
and which executed the foregoing instrument; and that he signed his name
thereto by order of the directors/members of said corporation/limited liability
company.

 

 

	
   

  	
   

  
	
   

  	
  Notary Public

  

 

 

	
  STATE OF

  	
  ) 

  
	
   

  	
  : ss.:

  
	
  COUNTY OF

  	
  )

  

 

On this      day of                         
2010, before me personally came               ,
to me known, who, being by me duly sworn, did depose and say that he is                 
of U.S. BANK NATIONAL ASSOCIATION, the financial institution described in and
which executed the foregoing instrument; and that he signed his name thereto by
order of the board of directors of said financial institution .

 

	
   

  	
   

  
	
   

  	
  Notary Public

  

 

Exhibit C - 3

 

SCHEDULE A

 

Schedule A to a Second Lien Trademark Assignment of
Security dated                     
    , 2010, by and between Grantor and U.S. BANK NATIONAL
ASSOCIATION, as Collateral Agent.

 

 

	
  REGISTRATION
  NO. OR

  APPLICATION NO.

  	
   

  	
  REGISTRATION OR

  FILING DATE

  	
   

  	
  MARK

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

Exhibit C - 4

 

EXHIBIT D

 

POWER OF ATTORNEY

 

This Power of Attorney is executed and delivered by
[NAME OF GRANTOR], a [                            ]
[corporation][limited liability company] (“Grantor”) to U.S. BANK
NATIONAL ASSOCIATION (“Attorney”), as collateral agent for its benefit
and the benefit of the Secured Parties under a Security Agreement, dated as of
the date hereof, and other related documents (the “Security Documents”).  No person to whom this Power of Attorney is
presented, as authority for Attorney to take any action or actions contemplated
hereby, shall be required to inquire into or seek confirmation from Grantor as
to the authority of Attorney to take any action described below, or as to the
existence of or fulfillment of any condition to this Power of Attorney, which
is intended to grant to Attorney unconditionally the authority to take and
perform the actions contemplated herein, and Grantor irrevocable waives any
right to commence any suit or action, in law or equity, against any person or
entity which acts in reliance upon or acknowledges the authority granted under
this Power of Attorney.  The power of
attorney granted hereby is coupled with an interest, and may not be revoked or
canceled by Grantor without Attorney’s written consent.

 

Grantor hereby irrevocably constitutes and appoints
Attorney (and all officers, employees or agents designated by Attorney), with
full power of substitution, as Grantor’s true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of Grantor and in
the name of Grantor or in its own name, from time to time in Attorney’s
discretion, to take any and all appropriate action and to execute and deliver
any and all documents and instruments which may be necessary to accomplish the
purposes of the Security Documents and, without limiting the generality of the
foregoing, Grantor hereby grants to Attorney the power and right, on behalf of
Grantor, without notice to or assent by Grantor, and subject to the terms of
the Security Agreement at any time, to do the following: (a) change the mailing
address of Grantor, open a post office box on behalf of Grantor, open mail for
Grantor, and ask, demand, collect, give acquittances and receipts for, take
possession of, endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, and notices in connection with any property of Grantor; (b)
effect any repairs to any asset of Grantor, or continue to obtain any insurance
and pay all or any part of the premiums therefor and costs thereof, and make,
settle and adjust all claims under such policies of insurance, and make all
determinations and decisions with respect to such policies; (c) pay or
discharge any taxes, liens, security interests, or other encumbrances levied or
placed on or threatened against Grantor or its property; (d) defend any suit,
action or proceeding brought against Grantor if Grantor does not defend such
suit, action or proceeding or if Attorney reasonably believes that Grantor is
not pursuing such defense in a manner that will maximize the recovery to
Attorney, and settle, compromise or adjust any suit, action, or proceeding
described above and, in connection therewith, give such discharges or releases
as Attorney may deem reasonably appropriate; (e) file or prosecute any claim,
litigation, suit or proceeding in any court of competent jurisdiction or before
any arbitrator, or take any other action otherwise deemed appropriate by
Attorney for the purpose of collecting any and all such moneys due to Grantor
whenever payable and to enforce any other right in respect of Grantor’s
property; (f) cause the

 

Exhibit D - 1

 

certified public accountants then engaged by Grantor
to prepare and deliver to Attorney at any time and from time to time, promptly
upon Attorney’s request, the following reports: (1) a reconciliation of all
accounts; (2) an aging of all accounts, (3) trial balances and (4) test
verifications of such accounts as Attorney may request; (g) communicate in its
own name with any party to any Contract with regard to the assignment of the
right, title and interest of such Grantor in and under the Contractual
Obligations and other matters relating thereto; (h) to file such financing
statements with respect to the Security Agreement, with or without Grantor’s
signature, or to file a photocopy of the Security Agreement in substitution for
a financing statement, as the Attorney may deem appropriate and to execute in
Grantor’s name such financing statements and amendments thereto and
continuation statements which may require Grantor’s signature; and (i) execute,
in connection with sale provided for in any Security Document, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral and to otherwise direct such sale or resale, all as
though Attorney were the absolute owner of the property of Grantor for all
purposes, and to do, at Attorney’s option and Grantor’s expense, at any time or
from time to time, all acts and other things that Attorney reasonably deems
necessary to perfect, preserve, or realize upon Grantor’s property or assets
and Attorney’s Liens thereon, all as fully and effectively as Grantor might
do.  Grantor hereby ratifies, to the
extent permitted by law, all that said Attorney shall lawfully do or cause to
be done by virtue hereof.

 

IN WITNESS WHEREOF, this Power of Attorney is executed
by Grantor pursuant to the authority of its board of directors/members this       
day                         
of 2010.

 

	
   

  	
  GRANTOR

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Exhibit D - 2

 

	
  STATE OF

  	
  )

  
	
   

  	
  : ss.:

  
	
  COUNTY OF

  	
  )

  

 

On this      day of                       ,
2010, before me personally came                 ,
to me known, who, being by me duly sworn, did depose and say that he is the                       
of [NAME OF GRANTOR], the corporation/limited liability company described in
and which executed the foregoing instrument; and that he signed his name
thereto by order of the directors/members of said corporation/limited liability
company.

 

 

	
   

  	
   

  
	
   

  	
  Notary Public

  

 

Exhibit D - 3

 

EXHIBIT E

 

SPECIAL POWER OF ATTORNEY

 

 

	
  STATE OF

  	
  )

  
	
   

  	
  )            ss.:

  
	
  COUNTY OF

  	
  )

  

 

KNOW ALL MEN BY THESE PRESENTS, that [NAME OF
GRANTOR], a [corporation][limited liability company] formed under the laws of
the State of [                        ],
with its principal office at [                                                              ]
(“Grantor”), pursuant to a Second Lien Security Agreement (as amended,
modified, restated or supplemented from time to time, the “Security Agreement”),
hereby appoints and constitutes U.S. BANK NATIONAL ASSOCIATION, with offices at
950 17th Street, Denver, Colorado 80202 (the “Collateral Agent”), its true and
lawful attorney, with full power of substitution, and with full power and
authority to perform the following acts on behalf of Grantor with respect to
Intellectual Property and any License (as described in the Security Agreement)
(the “Collateral”):

 

1)             To
ask, demand, collect, receive and give acquittances and receipts for any and
all moneys due and to become due under any License and, in the name of Grantor
or its own name or otherwise, to take possession of and endorse and collect any
checks, drafts, notes, acceptances or other instruments for the payment of
moneys due under any License and to file any claim or to take any other action
or proceeding in any court of law or equity or otherwise deemed appropriate by
Collateral Agent for the purpose of collecting any and all such moneys due
under any License whenever payable;

 

2)             To
pay or discharge taxes, liens, security interests or other encumbrances levied
or placed on or threatened against the Collateral, to effect any repairs or any
insurance called for by the terms of this Security Agreement and to pay all or
any part of the premiums therefor and the costs thereof; and

 

3)             (A)
To direct any party liable for any payment under any of the Licenses to make
payment of any and all moneys due and to become due thereunder directly to
Collateral Agent or as Collateral Agent shall direct; (B) to receive payment of
and receipt for any and all moneys, claims and other amounts due and to become
due at any time in respect of or arising out of any Collateral; (C) to commence
and prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any part thereof
and to enforce any other right in respect of any Collateral; (D) to defend any
suit, action or proceeding brought against Grantor with respect to any
Collateral; (E) to settle, compromise, or adjust any suit, action or proceeding
described above and, in connection therewith, to give such discharges or
releases as Collateral Agent may deem appropriate; and (F) generally to sell,
transfer, pledge, make any agreement with respect to or otherwise deal with any
of the Collateral as fully and completely as though Collateral Agent were the
absolute owner thereof for all purposes, and to do, at Collateral Agent’s
option all acts and things which Collateral Agent deems necessary to

 

Exhibit E - 1

 

protect, preserve or realize upon the Collateral and
Collateral Agent’s security interest therein, in order to effect the intent of
this Security Agreement, all as fully and effectively as Grantor might do.

 

4)             Assign,
sell or otherwise dispose of all right, title and interest of Grantor in and to
the Patents, Trademarks and Copyrights listed on Schedule 4(g) of the
Security Agreement, the patents, trademarks and copyrights which are added to
the same subsequent hereto, and all registrations and recordings thereof, and
all pending applications therefor, recording, registering and filing of, or
accomplishing any other formality with respect to the foregoing, and executing
and delivering any and all agreements, documents, instruments of assignment or
other papers necessary or advisable to effect such purpose;

 

5)             Execute
any and all documents, statements, certificates or other papers necessary or
advisable in order to obtain the purposes described above as Collateral Agent
may in its sole discretion determine.

 

This power of attorney is made pursuant to the
Security Agreement and may not be revoked until the payment in full of all
Second Lien Obligations (as defined in the Security Agreement) and the
irrevocable termination of the Security Agreement.

 

Dated:                          
    , 2010

 

	
   

  	
  [NAME OF GRANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Exhibit E - 2

 

	
  STATE OF

  	
  )

  
	
   

  	
  : ss.:

  
	
  COUNTY OF

  	
  )

  

 

On this      day of                       ,
2010, before me personally came                 ,
to me known, who, being by me duly sworn, did depose and say that he is the                       
of [NAME OF GRANTOR], the corporation/limited liability company described in
and which executed the foregoing instrument; and that he signed his name
thereto by order of the directors/members of said corporation/limited liability
company.

 

 

	
   

  	
   

  
	
   

  	
  Notary Public

  

 

Exhibit E - 3

 

EXHIBIT F

 

FORM OF SUPPLEMENT

 

This SUPPLEMENT, dated [mm/dd/yy], is delivered by
[NAME OF GRANTOR] (“Grantor”) pursuant to the Second Lien Security Agreement,
dated as of April 7, 2010 (as it may be from time to time amended, restated,
modified or supplemented, the “Security Agreement”), among SQUARETWO FINANCIAL
CORPORATION, the other Guarantors from time to time signatory thereto, and U.S.
BANK NATIONAL ASSOCIATION, as Collateral Agent. 
Capitalized terms used herein not otherwise defined herein shall have
the meanings ascribed thereto in the Security Agreement.

 

[Grantor hereby confirms the grant to Collateral Agent
set forth in the Security Agreement of, and does hereby grant to Collateral
Agent, a security interest in all of Grantor’s right, title and interest in and
to all Collateral to secure the Second Lien Obligations, in each case whether now
or hereafter existing or in which Grantor now has or hereafter acquires an
interest and wherever the same may be located. 
Grantor represents and warrants that the attached [Supplements to
Schedules](1) accurately and completely set forth all additional information
required pursuant to the Security Agreement and hereby agrees that such
Supplements to Schedules shall constitute part of the Schedules to the Security
Agreement.](2)

 

IN WITNESS WHEREOF, Grantor has caused this Supplement
to be duly executed and delivered by its duly authorized officer as of
[mm/dd/yy].

 

	
   

  	
  [NAME OF GRANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

(1)     Attach
supplements to the relevant schedules of the Security Agreement.

 

(2)     Form
may be adjusted or replaced with the approval of the Agent as may be
appropriate to address the requirements of the Security Agreement or other
applicable Loan Documents pursuant to which the Supplement is being delivered.

 

Exhibit F - 1

 

EXHIBIT G

 

ADDITIONAL PARI PASSU JOINDER
AGREEMENT

 

The undersigned is the agent for Persons wishing to
become “Secured Parties” (the “New Secured Parties”) under the Second Lien
Security Agreement, dated as of April 7, 2010 (as amended and/or supplemented,
the “Security Agreement” (terms used without definition herein have the
meanings assigned to such terms by the Security Agreement)) among SquareTwo
Financial Corporation, the other Grantors party thereto and U.S. BANK NATIONAL
ASSOCIATION, as Collateral Agent (the “Agent”), the Second Lien Pledge
Agreement, dated as of April 7, 2010 (as amended and/or supplemented, the “Pledge
Agreement”) among SquareTwo Financial Corporation, the other Pledgors party
thereto and U.S. BANK NATIONAL ASSOCATION, as Collateral Agent (the “Agent”)
and the other Security Documents.

 

In consideration of the foregoing, the undersigned
hereby:

 

(i)            represents
that the Additional Pari Passu Agent has been authorized by the New Secured
Parties to become a party to the Security Agreement and the Pledge Agreement on
behalf of the New Secured Parties under that [DESCRIBE OPERATIVE AGREEMENT]
(the “New Secured Obligations”) and to act as the Additional Pari Passu Agent
for the New Secured Parties hereunder;

 

(ii)           acknowledges
that the New Secured Parties have received a copy of the Security Agreement and
the Pledge Agreement;

 

(iii)          irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under the Security Agreement, the Pledge Agreement
and the other Security Documents as are delegated to the Agent by the terms
thereof, together with all such powers as are reasonably incidental thereto;
and

 

(iv)          accepts
and acknowledges the terms of Agreement applicable to it and the New Secured
Parties and agrees to serve as Additional Pari Passu Agent for the New Secured
Parties with respect to the New Secured Obligations and agrees on its own
behalf and on behalf of the New Secured Parties to be bound by the terms of the
Security Agreement, the Pledge Agreement and the other Security Documents
applicable to holders of Obligations, with all the rights and obligations of a
Secured Party thereunder and bound by all the provisions thereof as fully as if
it had been a Secured Party on the effective date of the Security Agreement and
the effective date of the Pledge Agreement.

 

The name and address of the representative are as
follows:

 

[name and address of Additional
Pari Passu Agent]

 

Exhibit G - 1

 

Section 13.08 of the Indenture is incorporated herein,
mutatis mutandis, as if a part hereof.

 

IN WITNESS WHEREOF, the undersigned has caused this
Additional Pari Passu Joinder Agreement to be duly executed by its authorized
officer as of the           
day of                   ,
20    .

 

	
   

  	
  [NAME]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

AGREED TO AND ACCEPTED:

 

The Collateral Agent hereby acknowledges its
acceptance of this Additional Pari Passu Joinder Agreement and agrees to act as
Collateral Agent for the New Secured Parties, subject to the terms
of the [agency agreement, dated as of                                 ].

 

	
  U.S. Bank National Association, as Collateral Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

Exhibit G - 2Exhibit 10.6

 

 

 

INTERCREDITOR AGREEMENT

 

by and among

 

GMAC COMMERCIAL FINANCE LLC,

 

as Senior Agent,

 

and

 

U.S. BANK, NATIONAL ASSOCIATION,

 

as Junior Agent

 

Dated as of April 7, 2010

 

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
  DEFINITIONS; RULES OF CONSTRUCTION

  	
  2

  
	
  1.1.

  	
  Defined Terms

  	
  2

  
	
  1.2.

  	
  Construction

  	
  9

  
	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  Lien Priorities

  	
  10

  
	
  2.1.

  	
  Relative Priorities

  	
  10

  
	
  2.2.

  	
  Prohibition on Contesting Liens

  	
  11

  
	
  2.3.

  	
  New Liens

  	
  11

  
	
  2.4.

  	
  Similar Liens and Agreements

  	
  12

  
	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  Exercise of Remedies

  	
  12

  
	
  3.1.

  	
  Exercise of Remedies

  	
  12

  
	
  3.2.

  	
  Exclusive Enforcement Rights

  	
  14

  
	
  3.3.

  	
  Junior Permitted Actions

  	
  14

  
	
  3.4.

  	
  Unsecured Creditor Remedies

  	
  15

  
	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  Proceeds

  	
  15

  
	
  4.1.

  	
  Application of Proceeds

  	
  15

  
	
  4.2.

  	
  Turnover

  	
  15

  
	
  4.3.

  	
  No Subordination of the Relative
  Priority of Claims

  	
  16

  
	
  4.4.

  	
  Revolving Nature of Senior
  Obligations

  	
  16

  
	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  Releases; Dispositions; Other
  Agreements

  	
  16

  
	
  5.1.

  	
  Releases

  	
  16

  
	
  5.2.

  	
  Insurance

  	
  18

  
	
  5.3.

  	
  Amendments; Refinancings; Legend

  	
  18

  
	
  5.4.

  	
  Bailee for Perfection

  	
  20

  
	
  5.5.

  	
  When Discharge of Senior Lien
  Obligations Deemed to Not Have Occurred

  	
  21

  
	
  5.6.

  	
  Injunctive Relief

  	
  22

  
	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  Insolvency Proceedings

  	
  22

  
	
  6.1.

  	
  Enforceability and Continuing
  Priority

  	
  22

  
	
  6.2.

  	
  Financing

  	
  23

  
	
  6.3.

  	
  Section 363 Sales of
  Collateral and Releases of Liens securing Senior Lien Obligations

  	
  23

  
	
  6.4.

  	
  Relief from the Automatic Stay

  	
  24

  
	
  6.5.

  	
  Adequate Protection

  	
  24

  
	
  6.6.

  	
  Section 1111(b) of the
  Bankruptcy Code

  	
  26

  
	
  6.7.

  	
  No Waiver

  	
  26

  
	
  6.8.

  	
  Avoidance Issues

  	
  26

  
	
  6.9.

  	
  Plan of Reorganization

  	
  27

  

 

i

 

	
  6.10.

  	
  Nature of Obligations;
  Post-Petition Interest

  	
  27

  
	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  Reliance; Waivers; Etc.

  	
  28

  
	
  7.1.

  	
  Reliance

  	
  28

  
	
  7.2.

  	
  No Warranties or Liability

  	
  28

  
	
  7.3.

  	
  No Waiver of Lien Priorities

  	
  29

  
	
  7.4.

  	
  Obligations Unconditional

  	
  31

  
	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  Representations and Warranties

  	
  32

  
	
  8.1.

  	
  Representations and Warranties of
  Each Party

  	
  32

  
	
  8.2.

  	
  Representations and Warranties of
  Each Agent

  	
  32

  
	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  Miscellaneous

  	
  33

  
	
  9.1.

  	
  Conflicts

  	
  33

  
	
  9.2.

  	
  Effectiveness; Continuing Nature of
  this Agreement; Severability

  	
  33

  
	
  9.3.

  	
  Amendments; Waivers

  	
  33

  
	
  9.4.

  	
  Information Concerning Financial
  Condition of the Loan Parties and their Respective Subsidiaries

  	
  34

  
	
  9.5.

  	
  Subrogation

  	
  35

  
	
  9.6.

  	
  SUBMISSION TO JURISDICTION; WAIVERS

  	
  35

  
	
  9.7.

  	
  Notices

  	
  36

  
	
  9.8.

  	
  Further Assurances

  	
  36

  
	
  9.9.

  	
  APPLICABLE LAW

  	
  36

  
	
  9.10.

  	
  Binding on Successors and Assigns

  	
  36

  
	
  9.11.

  	
  Headings

  	
  36

  
	
  9.12.

  	
  Counterparts

  	
  36

  
	
  9.13.

  	
  No Third Party Beneficiaries

  	
  37

  
	
  9.14.

  	
  Provisions Solely to Define
  Relative Rights

  	
  37

  
	
  9.15.

  	
  Patriot Act Compliance

  	
  37

  

 

ii

 

INTERCREDITOR AGREEMENT

 

This INTERCREDITOR
AGREEMENT (this “Agreement”) is
dated as of April 7, 2010 and entered into by and among GMAC COMMERCIAL FINANCE LLC, a Delaware limited liability company (“GMACCF”), in its capacity as agent
under the Senior Loan Documents (as defined herein) (in such capacity, together
with its successors and assigns in such capacity from time to time, “Senior Agent”), and U.S. BANK, NATIONAL
ASSOCIATION,  a national banking association (“U.S. Bank”),  in its capacity as trustee and collateral agent under
the Junior Lien Documents (as defined below) (in such capacity, including its
successors and assigns in such capacity from time to time, the “Junior Agent”).

 

RECITALS

 

A.            SQUARETWO
FINANCIAL CORPORATION, a Delaware
corporation (“SquareTwo”), PREFERRED
CREDIT RESOURCES LIMITED, an Ontario corporation (“Preferred”) (Preferred and SquareTwo, collectively, “Borrowers” and each, individually, a “Borrower”),
the other ‘Loan Parties’ from time to time party thereto, the lenders from time
to time party thereto, GMACCF, as Senior Agent, have entered into that certain
Loan Agreement, dated as of April 7, 2010 (as amended, restated,
supplemented, Refinanced (as defined below), modified, renewed, extended,
refunded or replaced from time to time in accordance with the terms of this
Agreement, the “Senior Credit Agreement”);

 

B.            The
obligations of the Loan Parties under the Senior Credit Agreement are secured
on a senior priority basis by liens on substantially all of the assets of the
Grantors (as defined herein), pursuant to the terms of certain of the Senior
Loan Documents (as defined below);

 

C.            The
U.S. Grantors and U.S. Bank, in its capacity as trustee and collateral agent
(in such capacity, the “Trustee”) for
the Junior Claimholders (as defined below), have entered into that certain
Indenture dated as of the date hereof (as amended, restated, supplemented,
Refinanced (as defined below), modified, renewed, extended, refunded or
replaced from time to time in accordance with the terms of this Agreement, the “Junior Debt Agreement”) providing for the
issuance of notes and the guaranty of the Junior Lien Obligations (as defined
below) by such U.S. Grantors;

 

D.            The
obligations of the U.S. Grantors under the Junior Debt Agreement are secured on
a junior priority basis by liens on substantially all of the assets of the U.S.
Grantors pursuant to the terms of certain of the Junior Lien Documents;

 

E.             The
Senior Loan Documents and the Junior Lien Documents provide, among other
things, that the parties thereto shall set forth in this Agreement their
respective rights and remedies with respect to the Collateral (as defined
below) and certain other matters; and

 

F.             In
order to induce the Senior Claimholders to consent to the U.S. Grantors
granting the Liens to secure the Junior Lien Obligations and to induce the
Senior Claimholders to extend credit and other financial accommodations and
lend monies to or for the benefit of the Borrowers, the Junior Agent and, by
virtue of accepting the Junior Notes (as defined below), the 

 

 

Junior Claimholders, have agreed to the intercreditor
and other provisions set forth in this Agreement.

 

AGREEMENT

 

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

 

SECTION 1.         DEFINITIONS; RULES OF CONSTRUCTION.

 

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

 

“Additional Credit Facility”
means any “Credit Facility” (other than the Senior Credit Agreement and related
Senior Loan Documents) as defined in and permitted under the Junior Debt
Agreement, as the same may be amended, restated, supplemented, Refinanced,
modified, renewed, extended, refunded or replaced from time to time; provided,
that any such “Credit Facility” shall only constitute an Additional Credit
Facility hereunder if either (a) a Discharge of Senior Lien Obligations
under the Senior Credit Agreement and other related Senior Loan Documents
occurs and a Refinancing thereof occurs pursuant to a Refinancing that will be
secured by a first priority Lien in any Collateral, or (b) the Senior
Agent and existing Senior Lenders consent to such Credit Facility being
designated as an “Additional Credit Facility” in accordance with the terms and
conditions of the Senior Loan Documents. 
The authorized representative of the lenders or holders under any
Additional Credit Facility shall execute a joinder agreement to this Agreement
substantially in the form of Exhibit A, appropriately completed, and any
such representative of an Additional Credit Facility described in the foregoing
clause (a) shall succeed to all rights, benefits and obligations of the
Senior Agent hereunder.

 

“Additional Credit Facility
Agent” means the authorized representative of the lenders or holders
under any Additional Credit Facility which representative has executed a
joinder agreement to this Agreement substantially in the form of Exhibit A
(appropriately completed).

 

“Adequate Protection”
means the granting of additional Liens, replacement Liens, super-priority
claims, cash payments or any other court ordered charge over any of a Grantor’s
property or assets in order to preserve or substitute value where pre-existing
security is diminished (i) by the granting of prior ranking Liens to
secure DIP Financing (as defined in Section 6.2), (ii) by authorizing
the use of Cash Collateral, or (iii) by any other means.

 

“Agent” means
Senior Agent or Junior Agent as the context requires.

 

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

 

“Ancillary Obligations”
has the meaning set forth in the definition of “Maximum Senior Amount.”

 

2

 

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

 

“Bankruptcy Law”
means the Bankruptcy Code and any other federal, state, or foreign law for the
relief of debtors, each as now or hereafter in effect, or any successor
statute.

 

“Borrower”
and “Borrowers” have the respective meanings
set forth in the recitals to this Agreement.

 

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

 

“Cash Collateral”
has the meaning set forth in Section 6.2.

 

“Claimholders”
means Senior Claimholders and Junior Claimholders.

 

“Collateral”
means all of the assets and property of any Grantor, whether real, personal or
mixed, constituting Senior Collateral or Junior Collateral.

 

“Default Disposition”
has the meaning set forth in Section 5.1(d).

 

“DIP Financing”
has the meaning set forth in Section 6.2.

 

“Discharge of Junior Lien
Obligations” means, except to the extent otherwise expressly
provided in Section 5.5, the payment in full in cash of the Junior
Lien Obligations (other than contingent indemnification obligations as to which
no claim has been asserted) and the termination or expiration of all
commitments, if any, to extend credit that would constitute Junior Lien
Obligations.

 

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

 

(a)           payment
in full in cash of the Senior Lien Obligations (other than (i) outstanding
Letters of Credit and obligations under Interest Rate Agreements which are not
then due and payable, and (ii) contingent obligations or contingent indemnification
obligations except as provided in clause (d) below);

 

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

 

(c)           termination
or cash collateralization (in an amount and in the manner required by the
Senior Credit Agreement) of all outstanding Letters of Credit and all
obligations under Interest Rate Agreements and other Ancillary Obligations; and

 

(d)           cash
collateralization (or support by a letter of credit) for any costs, expenses
and contingent indemnification obligations consisting of Senior Lien
Obligations not yet due and payable but with respect to which a claim has been
asserted 

 

3

 

in writing under any Senior Loan Documents (in an
amount and manner reasonably satisfactory to Senior Agent).

 

“Disposition” or
“Dispose” means the sale, assignment,
transfer, license, lease (as lessor), exchange, or other disposition (including
any sale and leaseback transaction) of any property by any person (or the
granting of any option or other right to do any of the foregoing).

 

“Dollars” or “$” means United States dollars.

 

“Exercise any Secured
Creditor Remedies” or “Exercise of Secured
Creditor Remedies” means (a) the taking of any action to
enforce any Lien in respect of the Collateral, including the institution of any
enforcement or foreclosure proceedings, the noticing of any public or private
sale or other disposition pursuant to Article 9 of the UCC or any
diligently pursued in good faith attempt to vacate or obtain relief from a stay
or other injunction restricting any other action described in this definition
or the enforcement of or execution on any judgment Lien on Collateral, (b) the
exercise of any right or remedy with respect to the Collateral provided to a
secured creditor under the Senior Loan Documents or the Junior Lien Documents
(including, in either case, any delivery of any notice to otherwise seek to
obtain payment directly from any account debtor of any Grantor or the taking of
any action or the exercise of any right or remedy in respect of the setoff or
recoupment against the Collateral or proceeds of Collateral or the exercise of
any right under any lockbox agreement, account control agreement, landlord
waiver or bailee letter or similar agreement or arrangement, but excluding the
collection of Collateral and proceeds of Collateral by Senior Agent under any
lockbox agreement or account control agreement), under applicable law, at
equity, in an Insolvency Proceeding or otherwise, including the acceptance of
Collateral in full or partial satisfaction of a Lien, (c) the sale,
assignment, transfer, lease, license, or other Disposition of all or any
portion of the Collateral, by private or public sale or any other means, (d) the
solicitation of bids from third parties to conduct the liquidation of all or a
material portion of Collateral, (e) the engagement or retention of sales
brokers, marketing agents, investment bankers, accountants, appraisers,
auctioneers, or other third parties for the purposes of valuing, marketing, or
Disposing of, all or a material portion of the Collateral, (f) the
exercise of any other enforcement right relating to the Collateral (including
the exercise of any voting rights relating to any capital stock composing a
portion of the Collateral) whether under the Senior Loan Documents, the Junior
Lien Documents, under applicable law of any jurisdiction, in equity, in an
Insolvency Proceeding, or otherwise, (g) the pursuit of Default
Dispositions relative to all or a material portion of the Collateral, or (h) the
commencement of, or the joinder with any creditor in commencing, any Insolvency
Proceeding against any Grantor or any assets of any Grantor or instituting any
action seeking the appointment of a trustee, receiver, liquidator or similar
official appointed for or over any Collateral.

 

“Governmental
Authority” means the government of the United States of America,
Canada or any other nation, any political subdivision thereof, whether state,
provincial or local, and any agency, authority, instrumentality, regulatory
body, court, central bank, or other entity exercising executive, legislative,
judicial, taxing, regulatory, or administrative powers or functions of or
pertaining to government.

 

4

 

“Grantors”
means all Loan Parties (as such term is defined in the Senior Credit
Agreement), and each other person that may from time to time execute and
deliver a Senior Loan Document or a Junior Lien Documents as a “debtor,” “grantor,”
“guarantor” or “pledgor” (or the equivalent thereof).

 

“Guarantor” and “Guarantors” means the “Guarantor” and “Guarantors” as such
terms are defined in the Senior Credit Agreement.

 

“Holding” means
CA Holding, Inc., a Delaware corporation.

 

“Indebtedness” means and includes all obligations that constitute “Indebtedness” within
the meaning of the Senior Credit Agreement.

 

“Insolvency Proceeding”
means:

 

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

 

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

 

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

 

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

 

“Interest Rate Agreements”
means the “Interest Rate Agreements” as such term is defined in the Senior
Credit Agreement.

 

“Junior Agent”
means (i) so long as the obligations under the Junior Debt Agreement are
outstanding, the Trustee, in its capacity as collateral agent for the holders
of the Junior Notes and other secured parties under the Junior Debt Agreement
and the other Junior Lien Documents, and (ii) at any time thereafter, such
agent or trustee as is designated “Junior Agent” by Junior Claimholders holding
a majority in principal amount of the Junior Lien Obligations then outstanding
or pursuant to such other arrangements as agreed to among the holders of the
Junior Lien Obligations; it being understood that as of the date of this
Agreement, the Trustee shall be so designated Junior Agent.

 

“Junior Claimholders”
means, at any relevant time, the holders of Junior Lien Obligations at that
time, including Junior Creditors and Junior Agent, and any agents or trustee of
any of the foregoing persons and each Permitted Additional Junior Lien
Obligations Representative.

 

“Junior Collateral”
means, subject to any applicable limitations set forth in Section 2.3,
all of the assets and property of any U.S. Grantor subject to the Lien of
Junior Agent and granted as security for any Junior Lien Obligation under the
Junior Security Agreement the Junior Pledge 

 

5

 

Agreement, or any other Junior Lien Document, as such
agreements may be in effect from time to time.

 

“Junior Creditors”
means the “Holders” (as such terms are defined in the Junior Debt Agreement).

 

“Junior Debt
Agreement” has the meaning set forth in the recitals to this
Agreement.

 

“Junior Lien
Obligations” means
all obligations and all amounts owing, due, or secured under the terms of the
Junior Debt Agreement (as in effect on the date hereof and as amended,
restated, supplemented, Refinanced, modified, renewed, extended, refunded or
replaced as permitted under this Agreement) or any other Junior Lien Documents
(including any Permitted Additional Junior Lien Indebtedness Documents),
whether now existing or arising hereafter, including all principal, premium,
interest, fees, attorneys fees, costs, charges, expenses, reimbursement
obligations, indemnities, guarantees, and all other amounts payable under or
secured by any Junior Lien Documents (including, in each case, all amounts
accruing on or after the commencement of any Insolvency Proceeding relating to
any U.S. Grantor, or that would have accrued or become due under the terms of
the Junior Lien Documents but for the effect of the Insolvency Proceeding and
irrespective of whether a claim for all or any portion of such amounts is
allowable or allowed in such Insolvency Proceeding).

 

“Junior Lien Documents”
means the Junior Security Agreement, the Junior Debt Agreement, the Junior
Pledge Agreement, the Junior Notes and any other agreement, document, or
instrument (other than this Agreement) pursuant to which a Lien is granted
securing any Junior Lien Obligations or under which rights or remedies with
respect to such Liens are governed (including any Permitted Additional Junior
Lien Indebtedness Documents).

 

“Junior Notes”
means the 11.625% Senior Secured Notes due April, 2017 issued by SquareTwo
pursuant to the Junior Debt Agreement.

 

“Junior Pledge Agreement” means the Pledge Agreement (as such term is defined in the Junior Debt
Agreement).

 

“Junior Security Agreement” means the Security Agreement (as such term is defined in the Junior
Debt Agreement).

 

“Letters of Credit”
means the “Lender Letters of Credit,” as that term is defined in the Senior
Credit Agreement.

 

“Lien”
means any mortgage, deed of trust, pledge, hypothecation, assignment, charge,
deposit arrangement, encumbrance, easement, lien (statutory or other), security
interest, or other security arrangement and any other preference, priority, or
preferential arrangement of any kind or nature whatsoever, including any
conditional sale contract or other title retention agreement, the interest of a
lessor under a capital lease and any synthetic or other financing lease having
substantially the same economic effect as any of the foregoing and any
financing statement under the UCC (other than precautionary lease financing statements).

 

6

 

 

“Maximum Senior Amount”
means the greater of (x) $215,000,000 and (y) as of the date that any
Senior Lien Obligations are incurred, the lesser of (A) 35% of Estimated
Remaining Proceeds and (B) an amount equal to the Consolidated Cash Flow
of the Company and its Restricted Subsidiaries for the most recently ended four
fiscal quarters ending immediately prior to such date for which internal
financial statements are available (all capitalized terms in this clause (y) defined
are as defined in the Junior Debt Agreement, as in effect on the date that any
Senior Lien Obligations are incurred in reliance on this clause (y)) (it being
understood that the Maximum Senior Amount shall not be applicable with respect
to (and therefore shall not limit) any Senior Lien Obligations that consist of
obligations incurred with respect to Interest Rate Agreements, currency hedge
agreements or bank product agreements that are secured under the Senior Credit
Agreement or any Additional Credit Facility (the “Ancillary
Obligations”) or any interest, fees, expenses, indemnification
obligations or other Senior Lien Obligations that do not constitute principal).
For purposes of the determining the amount applicable pursuant to clause (y) above,
(i) the Senior Claimholders shall be entitled to rely on a calculation
certified by SquareTwo as being a true and correct valuation of the then
applicable Maximum Senior Amount, and (ii) in the case of a revolving
credit facility or other similar facility involving the incurrence of
extensions of credit from time to time pursuant to commitments to provide such
extensions of credit, 100% of such commitments shall be deemed an incurrence of
indebtedness on the date on which the commitments under such facility were
initially incurred or, if applicable, subsequently increased in reliance on a
certificate delivered pursuant to the immediately preceding clause (i), and any
borrowings, repayments and reborrowings at any time under such commitments
shall not be deemed a new incurrence of indebtedness.

 

“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 reorder (whether by subordination,
invalidation, or otherwise) or otherwise disregard, in whole or part, the
provisions of Section 2 (including the Lien priorities of Section 2.1),
the provisions of Section 4, or the provisions of Section 6,
unless such Plan of Reorganization has been accepted by the voluntary required
vote of each class of Senior Claimholders for such class to have approved such
Plan of Reorganization.

 

“Permitted Additional
Junior Lien Indebtedness” means Indebtedness, if any, that, at the
time incurred, is permitted under the Senior Credit Agreement and qualifies as “Permitted
Additional Pari Passu Obligations” under the Junior Debt Agreement.

 

“Permitted Additional
Junior Lien Indebtedness Documents” means each of the agreements,
documents, joinders and instruments providing for or evidencing any Permitted
Additional Junior Lien Indebtedness as well as any other document or instrument
executed or delivered at any time in connection with any Permitted Additional
Junior Lien Indebtedness, to the extent such are effective at the relevant
time, as the same may be amended, restated, supplemented, Refinanced, modified,
renewed, extended, refunded or replaced from time to time in accordance with
this Agreement.

 

“Permitted Additional
Junior Lien Obligations” means Obligations, if any, under the
Permitted Additional Junior Lien Indebtedness Documents with respect to
Permitted Additional Junior Lien Indebtedness; provided that each Permitted
Additional Junior Lien Obligations 

 

7

 

Representative of such Permitted Additional Junior
Lien Obligations executes a joinder agreement to this Agreement substantially
in the form of Exhibit A, appropriately completed.

 

“Permitted Additional
Junior Lien Obligations Representative” means each duly authorized
representative of any holders of Permitted Additional Junior Lien Obligations
which representative has executed a joinder agreement to this Agreement
substantially in the form of Exhibit A (appropriately completed) and which
is a party to the Permitted Additional Junior Lien Indebtedness Documents.

 

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

 

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

 

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

 

“Recovery”
has the meaning set forth in Section 6.8.

 

“Refinance”
means, in respect of any indebtedness, to amend, increase, modify, refinance,
extend, renew, defease, supplement, restructure, replace, refund or repay, or
to issue other indebtedness in exchange or replacement for such indebtedness,
in whole or in part, whether with the same or different lenders, creditors,
arrangers, agents, borrowers and/or guarantors and whether or not occurring
contemporaneously with the payoff of the previously existing indebtedness
subject to such transaction.

 

“Refinanced”
and “Refinancing” shall have correlative meanings.

 

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

 

“Senior Claimholders” means, at any relevant time, Senior
Agent, and the holders of Senior Lien Obligations at that time, including
Senior Lenders, the Additional Credit Facility Agent, and any agents or trustee
of any of the foregoing persons.

 

“Senior 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 Senior Lien
Obligation.

 

“Senior Credit Agreement”
has the meaning set forth in the recitals to this Agreement.

 

“Senior Default”
means any “Event of Default”, as such term is defined in any Senior Loan
Document.

 

“Senior Lenders”
means the “Lenders” as defined in the Senior Credit Agreement and in any
Additional Credit Facility.

 

8

 

“Senior Lien
Obligations” means
all Obligations (as such term is defined in the Senior Credit Agreement) and
all other amounts owing, due, or secured under the terms of the Senior Credit
Agreement, any Additional Credit Facility or any other Senior Loan Document,
whether now existing or arising hereafter, including all principal, premium,
interest, fees, attorneys fees, costs, charges, expenses, reimbursement
obligations, obligations to post cash collateral in respect of Letters of
Credit, Interest Rate Agreements or other Ancillary Obligations or indemnities
in respect thereof, any other indemnities or guarantees, and all other amounts
payable under or secured by any Senior Loan Document (including, in each case,
all amounts accruing on or after the commencement of any Insolvency Proceeding
relating to any Grantor, or that would have accrued or become due under the
terms of the Senior Loan Documents but for the effect of the Insolvency
Proceeding and irrespective of whether a claim for all or any portion of such
amounts is allowable or allowed in such Insolvency Proceeding) provided that
the aggregate principal amount of, without duplication, revolving credit loans,
letters of credit, term loans, other loans, notes or similar instruments (other
than the Ancillary Obligations) provided for under the Senior Credit Agreement,
any Additional Credit Facility and/or any other Senior Loan Document (or, to
the extent of the Discharge of the Senior Lien Obligations under the Senior
Credit Agreement, any Refinancing thereof) in excess of the Maximum Senior
Amount, and any interest relating to amounts (other than in respect of
Ancillary Obligations) that are in excess of the Maximum Senior Amount, shall
not constitute Senior Lien Obligations for purposes of this Agreement.

 

“Senior Loan
Documents” means the Loan Documents (as defined in the Senior Credit
Agreement) and any comparable term as defined in the Additional Credit
Facility.

 

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

 

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

 

“U.S. Grantor”
means any Grantor organized or incorporated under the laws of a jurisdiction in
the United States of America, excluding Astrum Financial LLC, Collect Air, LLC
and CA Internet Marketing, LLC.

 

1.2.          Construction.  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.”  The term “or” shall be construed to have,
except where otherwise indicated, the inclusive meaning represented by the
phrase “and/or.”  Any term used in this
Agreement and not defined in this Agreement shall have the meaning set forth in
the Senior Credit Agreement.  Unless the
context requires otherwise:

 

9

 

(a)           except as otherwise provided herein, 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, extended,
Refinanced, refunded, or replaced;

 

(b)           any reference to any agreement, instrument, or
other document herein “as in effect on the date hereof” shall be construed as
referring to such agreement, instrument, or other document without giving
effect to any amendment, restatement, supplement, modification, or Refinance
after the date hereof;

 

(c)           any definition of or reference to the Senior Lien
Obligations or the Junior Lien Obligations herein shall be construed as
referring to the Senior Lien Obligations or the Junior Lien Obligations (as
applicable) as from time to time amended, restated, supplemented, modified,
renewed, extended, Refinanced, refunded, or replaced;

 

(d)           any reference herein to any person shall be
construed to include such person’s successors and assigns;

 

(e)           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;

 

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

 

(g)           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; and

 

(h)           unless otherwise specified herein and except for Section 9.6
hereof, any reference to the “parties hereto” shall not include the Grantors.

 

SECTION 2.         LIEN PRIORITIES.

 

2.1.          Relative Priorities.  Notwithstanding the date, time, method,
manner, or order of grant, attachment, perfection, enforcement, execution, or
delivery of any Liens securing the Junior Lien Obligations granted with respect
to the Collateral (including, in each case, irrespective of whether any such
Lien is granted, or secures Junior Lien Obligations relating to the period,
before or after the commencement of any Insolvency Proceeding) or of any Liens
securing the Senior Lien Obligations granted with respect to the Collateral
(including, in each case, irrespective of whether any such Lien is granted, or
secures Senior Lien Obligations relating to the period, before or after the
commencement of any Insolvency Proceeding) and notwithstanding any contrary
provision of the UCC or any other applicable law or the Junior Lien Documents
or any defect or deficiencies in, or failure to attach or perfect, the Liens
securing the Senior Lien Obligations, or any other circumstance whatsoever,
Senior Agent, Junior Agent and, by virtue of accepting the Junior Notes, the
Junior Claimholders, hereby agree that:

 

10

 

(a)           any Lien with respect to the Collateral securing
any Senior Lien Obligations now or hereafter held by or on behalf of, or
created for the benefit of, Senior Agent or any Senior Claimholders or any
agent or trustee therefore shall be senior in all respects and prior to any
Lien with respect to the Collateral securing any Junior Lien Obligations; and

 

(b)           any Lien with respect to the Collateral securing
any Junior Lien Obligations now or hereafter held by or on behalf of, or
created for the benefit of, Junior Agent, any Junior Claimholders or any agent
or trustee therefor shall be junior and subordinate in all respects to all
Liens with respect to the Collateral securing any Senior Lien Obligations;

 

All Liens with respect to the Collateral
securing any Senior Lien Obligations shall be and remain senior in all respects
and prior to all Liens with respect to the Collateral securing any Junior Lien
Obligations, for all purposes, whether or not such Liens securing any Senior
Lien Obligations are subordinated to any Lien securing any other obligation of
any Grantor or any other person.  The
Junior Agent and, by virtue of accepting the Junior Notes, the Junior
Claimholders, expressly agree that any Lien purported to be granted on any
Collateral as security for the Senior Lien Obligations shall be and remain
senior in all respects and prior to all Liens on the Collateral securing any
Junior Lien Obligations for all purposes regardless of whether the Lien
purported to be granted is found to be improperly granted, improperly perfected,
a fraudulent conveyance, legally or otherwise deficient in any manner, is
avoided or is equitably subordinated.

 

2.2.          Prohibition on Contesting
Liens.  Each of
Junior Agent, and, by virtue of accepting the Junior Notes, the Junior
Claimholders, and Senior Agent, for itself and on behalf of each Senior
Claimholder, agrees that it will not (and hereby waives any right to), directly
or indirectly, contest, or support any other person in contesting, in any
proceeding (including any Insolvency Proceeding), the attachment, perfection,
priority, validity, or enforceability of a Lien held by or on behalf of any
Senior Claimholders in the Senior Collateral or by or on behalf of any Junior
Claimholders in the Junior Collateral (including the allowability or priority
of the Senior Lien Obligations or the Junior Lien Obligations, as applicable,
in any Insolvency Proceeding), as the case may be, or the validity or
enforceability of this Agreement; provided, however that nothing in this
Agreement shall be construed to prevent or impair the rights of Senior Agent,
any Senior Claimholder, Junior Agent, or any Junior Claimholder to enforce the
terms of this Agreement, including the provisions of this Agreement relating to
the priority of the Liens securing the Senior Lien Obligations as provided in
Sections 2.1 and 3 and the enforcement of Section 2.3(c) against
Junior Agent and Junior Creditors.

 

2.3.          New Liens.  So long as the Discharge of Senior Lien
Obligations has not occurred, the parties hereto agree that:

 

(a)           no Grantor shall grant any additional Liens on any
assets or property to secure any Junior Lien Obligation unless such Grantor has
granted a Lien on such asset or property to Senior Agent to secure the Senior
Lien Obligations contemporaneously with or prior to the time of the grant of a
Lien thereon in favor of Junior Agent, such Lien being a senior Lien in favor
of the Senior Agent pursuant to the terms hereof;

 

(b)           to the extent that the provisions of clause (a) above
are not complied with for any reason, without limiting any other rights and
remedies available to Senior Agent or the 

 

11

 

Senior Claimholders, Junior Agent, on behalf
Junior Claimholders, agrees that (i) if any Junior Claimholder shall
acquire or hold any Lien on any assets of any Grantor securing any Junior Lien
Obligation which assets are not also subject to the first-priority Lien of the
Senior Agent under the Senior Loan Documents, then the Junior Agent (i) shall
hold such Lien for the benefit of and as agent for the Senior Agent and the
Senior Claimholders and (ii) upon demand by the Senior Agent, without the
need for any further consent of any other Junior Claimholder, and
notwithstanding anything to the contrary in any other Junior Lien Documents,
shall, at the direction of Senior Agent, (x) release such Lien or (y) assign
it to the Senior Agent as security for the Senior Lien Obligations (in which
case the Junior Agent shall retain a junior lien on such assets subject to the
terms hereof) and (ii) 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;

 

(c)           notwithstanding any provision in this Agreement or
any of the Junior Lien Documents to the contrary, (i) the obligors and
grantors of Collateral with respect to the Junior Lien Obligations shall be
limited to the U.S. Grantors and shall specifically not at any time include any
obligors or Grantors other than the U.S. Grantors; and (ii) neither the Junior Agent nor any Junior
Claimholder shall at any time have or make any claim against, accept any
payment from, or exercise any remedies of any kind against, any Grantors other
than the U.S. Grantors.

 

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

 

(a)           upon request by Senior Agent or Junior 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 Senior Collateral and the Junior Collateral and the steps taken or to be
taken to perfect their respective Liens thereon and the identity of the
respective parties obligated under the Senior Loan Documents and the Junior Lien
Documents; and

 

(b)           upon request by a Grantor after the Discharge of
the Senior Lien Obligations, Senior Agent will provide written notice thereof
to each institution in respect of which a control agreement exists in favor of
Senior Agent.

 

SECTION 3.         EXERCISE OF REMEDIES.

 

3.1.          Exercise of Remedies.

 

(a)           Until the Discharge of Senior Lien Obligations has
occurred, whether or not any Insolvency Proceeding has been commenced by or
against any Grantor: Junior Agent, and by virtue of accepting the Junior Note,
each Junior Claimholder agrees that (i) it (x) will not exercise or
seek to exercise any rights or remedies with respect to the Liens on any Junior
Collateral or institute any action or proceeding with respect to such rights or
remedies (including any Exercise of Secured Creditor Remedies with respect to
any Junior Collateral); (y) will not directly or indirectly contest,
protest, or object to or hinder or delay in any manner (whether by judicial
proceeding or otherwise), or otherwise interfere with any Exercise of Secured
Creditor Remedies by Senior Agent or any Senior Claimholder and has no right to
direct Senior Agent to 

 

12

 

Exercise any Secured Creditor Remedies or take
any other action under the Senior Loan Documents; and (z) will not object
to (and waives any and all claims with respect to) the forbearance by Senior
Agent or Senior Claimholders from Exercising any Secured Creditor Remedies and (ii) the
Senior Agent and the Senior Claimholders shall have the exclusive right to
enforce rights (including setoff), exercise remedies (including, without
limitation, Exercise of Secured Creditor Remedies) and make determinations
regarding the Collateral (including the release, disposition, or restrictions
with respect to the Collateral) without any notice to, consultation with, or
consent of, the Junior Agent or any Junior Claimholder;

 

(b)           Except as may be permitted in Section 3.3, the
Junior Agent and by virtue of accepting the Junior Notes, the Junior Claimholders,
irrevocably, absolutely, and unconditionally waive any and all rights Junior
Agent or Junior 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 Senior Agent or any Senior Claimholder (A) enforces
or collects (or attempts to collect) the Senior Lien Obligations or (B) realizes
or seeks to realize upon or otherwise enforce the Liens in and to the Senior
Collateral securing the Senior Lien Obligations, regardless of whether any
action or failure to act by or on behalf of Senior Agent or any Senior
Claimholder is adverse to the interest of Junior Agent or Junior
Claimholders.  Without limiting the
generality of the foregoing, to the maximum extent permitted by law, Junior
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 Senior Collateral, on the ground(s) that
any such disposition of Senior Collateral (x) would not be or was not “commercially
reasonable” within the meaning of any applicable UCC or other applicable law,
or (y) would not or did not comply with any other applicable 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.

 

(c)           The Junior Agent and, by virtue of accepting the
Junior Notes, the Junior Claimholders acknowledge and agree that no covenant,
agreement or restriction contained in the Junior Lien Documents shall be deemed
to restrict in any way the rights and remedies of Senior Agent or any Senior
Claimholder with respect to the Senior Collateral as set forth in this
Agreement and the Senior Loan Documents.

 

(d)           The Junior Agent and, by virtue of accepting the
Junior Notes, the Junior Claimholders acknowledge and agree that they shall not
be entitled to take or receive any Junior Collateral or any proceeds of Junior
Collateral in connection with the exercise of any right or remedy with respect
to any Junior Collateral (including any Exercise of Secured Creditor Remedies
with respect to any Junior Collateral) or by way of distribution in respect of
Junior Collateral or any claim of the Junior Claimholders secured thereby in an
Insolvency Proceeding, unless and until the Discharge of First Lien Obligations
has occurred.  Without limiting the
generality of the foregoing, unless and until the Discharge of Senior Lien
Obligations has occurred, except for actions expressly permitted by Section 3.3
of this Agreement, the sole right of the Junior Agent and the Junior
Claimholders with respect to the Junior Collateral is to hold a Lien on the
Junior Collateral pursuant to the Junior Lien Documents for the period and to
the 

 

13

 

extent granted therein and to receive a share
of the proceeds thereof, if any, after the Discharge of Senior Lien Obligations
has occurred.

 

3.2.          Exclusive Enforcement
Rights.  Until the
Discharge of Senior Lien Obligations has occurred, whether or not any
Insolvency Proceeding has been commenced by or against any Grantor, Senior
Agent and each Senior Claimholder shall have the exclusive right to Exercise
any Secured Creditor Remedies with respect to the Collateral without any
consultation with or the consent of Junior Agent or any Junior Claimholder.  In connection with any Exercise of Secured
Creditor Remedies, Senior Agent and each Senior Claimholder may enforce the
provisions of the Senior Loan Documents and exercise remedies thereunder, all
in such order and in such manner as they may determine in the exercise of their
sole discretion.  Such exercise and
enforcement shall include the rights of an agent appointed by them to Dispose
of Collateral, to incur expenses in connection with such Disposition, and to
exercise all the rights and remedies of a secured creditor under applicable
law.

 

3.3.          Junior Permitted Actions.  Anything to the contrary in this Agreement
notwithstanding, Junior Agent and any Junior Claimholder may:

 

(a)           if an Insolvency Proceeding has been commenced by
or against any U.S. Grantor, file a claim, proof of claim or statement of
interest with respect to such U.S. Grantor and/or the Junior Lien Obligations;

 

(b)           take any action (not adverse to the priority status
of the Liens on the Collateral securing the Senior Lien Obligations, or the
rights of Senior Agent or any Senior Claimholder to Exercise any Secured
Creditor Remedies) in order to create, perfect, file, protect or preserve (to
the extent such action does not constitute the Exercise of Secured Creditor
Remedies), its Lien in and to the Junior Collateral; provided that no such
action is, or could reasonably be expected to be, inconsistent with the terms
of this Agreement, including the automatic release of Liens provided in Section 5.1;

 

(c)           file any necessary responsive or defensive
pleadings or appeal 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 Junior Claimholders or any disallowance of such
claims, including any claims secured by the Junior Collateral, if any; and

 

(d)           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, with respect to the Junior Lien Obligations and the Junior
Collateral.  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 Senior Agent shall
be entitled (under this Agreement, Section 510 of the Bankruptcy Code
and/or other applicable law) 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.

 

14

 

3.4.          Unsecured Creditor Remedies.  Except as set forth in Sections 3.1, 5.1 and
6, Junior Agent and Junior Claimholders may exercise rights and remedies as
unsecured creditors against any U.S. Grantor in accordance with the terms of
the Junior Lien Documents and applicable law. 
Except as otherwise set forth in this Agreement (and subject in any
event to any Lien subordination provisions in any Junior Lien Documents),
nothing in this Agreement shall prohibit the receipt by the Junior Agent or any
other Junior Claimholder of payments on the Junior Lien Obligations so long as
such receipt is not (i) the direct or indirect result of the exercise by
the Junior Agent or any other Junior Claimholder of rights or remedies as a
secured creditor with respect to the Junior Collateral (including setoff or
recoupment) or enforcement in contravention of this Agreement of any Lien held
by any of them or (ii) otherwise in contravention of this Agreement.  In the event that any Junior Claimholder
becomes a judgment creditor in respect of Junior Collateral as a result of its
enforcement of its rights as an unsecured creditor with respect to the Junior
Lien Obligations, such judgment Lien shall be subject to the terms of this
Agreement for all purposes as the other Liens securing the Junior Lien
Obligations.

 

SECTION 4.         PROCEEDS.

 

4.1.          Application of Proceeds.  Until the Discharge of Senior Lien
Obligations has occurred, whether or not any Insolvency Proceeding has been
commenced by or against any Grantor, any Junior Collateral or proceeds thereof
received in connection with any Exercise of Secured Creditor Remedies shall (at
such time as such Junior Collateral or proceeds has been monetized) be applied:
(a) first, to the payment in full in cash of costs and expenses of Senior
Agent in connection with such Exercise of Secured Creditor Remedies, (b) second,
to the payment in full in cash or cash collateralization of the Senior Lien
Obligations in accordance with the Senior Loan Documents, (c) third, to
the payment in full in cash of costs and expenses of Junior Agent and any
Permitted Additional Junior Lien Obligations Representative in connection with
such Exercise of Secured Creditor Remedies (to the extent such Exercise of
Secured Creditor Remedies was permitted hereunder), (d) fourth, to the
payment in full in cash of the Junior Lien Obligations in accordance with the
Junior Lien Documents, and (d) fifth, to the applicable U.S. Grantor, such
other person as may be entitled thereto, or as a court of competent
jurisdiction may otherwise direct.  If
any Exercise of Secured Creditor Remedies with respect to the Junior Collateral
produces non-cash proceeds, then such non-cash proceeds shall be held by the
Agent that conducted the Exercise of Secured Creditor Remedies (or, at Senior
Agent’s request, by Senior Agent) as additional Junior Collateral and, at such
time as such non-cash proceeds are monetized, shall be applied as set forth
above.

 

4.2.          Turnover.  Unless and until the Discharge of Senior Lien
Obligations has occurred, any Collateral or proceeds thereof (including assets
or proceeds subject to Liens referred to in the final sentence of Section 2.3
or the proviso in Section 3.4) received by Junior Agent or any Junior Claimholder
relating to the Collateral or that is otherwise inconsistent with the terms of
this Agreement shall be segregated and held in trust and forthwith paid over to
Senior Agent for the benefit of Senior Claimholders in the same form as
received, with any necessary endorsements. 
Senior Agent is hereby authorized to make any such endorsements as agent
for Junior Agent or any such Junior Claimholders.  This authorization is coupled with an
interest and is irrevocable until the Discharge of Senior Lien Obligations.

 

15

 

4.3.          No Subordination of the
Relative Priority of Claims.  Anything to the contrary contained herein
notwithstanding, the subordination of the Liens of Junior Claimholders to the
Liens of Senior Claimholders in respect of the Senior Lien Obligations as set
forth herein is with respect to the priority of the respective Liens held by or
on behalf of them only and shall not constitute a subordination of the Junior
Lien Obligations in right of payment to the prior payment of the Senior Lien
Obligations.

 

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

 

SECTION 5.         RELEASES; DISPOSITIONS; OTHER AGREEMENTS.

 

5.1.          Releases.

 

(a)           Until the Discharge of Senior Lien Obligations
occurs, Senior Agent shall have the exclusive right to make determinations
regarding the release or Disposition of any Collateral pursuant to the terms of
the Senior Loan Documents or in accordance with the provisions of this
Agreement, in each case without any consultation with, consent of or notice to
Junior Agent or any Junior Claimholder.

 

(b)           If, in connection with the Exercise of Secured
Creditor Remedies by Senior Agent as provided for in Section 3, Senior
Agent releases any of its Liens on any part of the Junior Collateral or
releases any U.S.Grantor from its obligations in respect of the Senior Lien
Obligations, then the Liens of Junior Agent on such Junior Collateral, and the
obligations of such U.S. Grantor in respect of the Junior Lien Obligations
shall be automatically, unconditionally, and simultaneously released; provided,
that any proceeds of Junior Collateral resulting from such Exercise of Secured
Creditor Remedies shall be applied in accordance with Section 4.1
hereof.  Junior Agent, for itself or on
behalf of any such Junior Claimholders, promptly shall execute and deliver to
Senior Agent such termination or amendment statements, releases, and other
documents as Senior Agent may reasonably request to effectively confirm such
release.

 

(c)           If, in connection with any Disposition of any
Junior Collateral or release that is permitted under the terms of the Senior
Loan Documents (including, without limitation, any release under the Senior
Loan Documents in connection with assets to be acquired pursuant to purchase
money financing or a lease), Senior Agent releases or subordinates to the Liens
of any other creditor of a U.S. Grantor any of its Liens on the portion of the
Junior Collateral that is the subject of such Disposition, release or
subordination, or releases any U.S. Grantor from its obligations in respect of
the Senior Lien Obligations (if such U.S. Grantor is the subject of such
Disposition), then the Liens of Junior Agent on such Junior Collateral, and the
obligations of such Junior Grantor in respect of the Junior Lien Obligations,
shall be automatically, unconditionally, and simultaneously released or
subordinated, as applicable.  Junior
Agent, for itself or on behalf of any such Junior Claimholders, promptly (and
in any event, within five (5) Business Days of receipt of a written
request therefor) shall execute and deliver to Senior Agent 

 

16

 

and the U.S. Grantors such termination or
amendment statements, releases, subordination agreements and other documents as
Senior Agent or the U.S. Grantors, as applicable, may request in writing to
effectively confirm such release or subordination, as applicable.

 

(d)           In the event of any private or public Disposition
of all or any material portion of the Junior Collateral by one or more U.S.
Grantors with the consent of Senior Agent after the occurrence and during the
continuance of a Senior Default (and prior to the Discharge of Senior Lien
Obligations), which Disposition is conducted by such U.S. Grantors with the
consent of Senior Agent in connection with good faith efforts by Senior Agent
to collect the Senior Lien Obligations through the Disposition of Junior
Collateral (any such Disposition, a “Default Disposition”), then the Liens of
Junior Agent on such Junior Collateral shall be automatically, unconditionally,
and simultaneously released (and if (i) the Default Disposition includes
equity interests in any U.S. Grantor, and (ii) Senior Agent is also
releasing those U.S. Grantors whose equity interests are Disposed of (together
with their respective Subsidiaries) from all of their obligations under the
Senior Loan Documents, Junior Agent further agrees to release those Persons
whose equity interests are Disposed of (together with their respective
Subsidiaries) from all of their obligations under the Junior Lien Documents));
provided that Senior Agent also releases its Liens on such Junior Collateral
and provided further that any proceeds of Junior Collateral resulting from such
Disposition shall be applied in accordance with Section 4.1 hereof.

 

(e)           Until the Discharge of Senior Lien Obligations
occurs, Junior Agent, for itself and on behalf of Junior Claimholders, hereby
irrevocably constitutes and appoints Senior Agent and any officer or agent of
Senior Agent, with full power of substitution, as its true and lawful attorney
in fact, coupled with an interest, with full irrevocable power and authority in
the place and stead of Junior Agent or such holder or in Senior Agent’s own
name, from time to time in Senior Agent’s discretion, for the purpose of
carrying out the terms of this Section 5.1 and 5.3(d), to take any and all
appropriate action and to execute any and all documents and instruments that
may be necessary to accomplish the purposes of this Section 5.1 and
5.3(d), including any endorsements or other instruments of transfer or release.

 

(f)            Until the Discharge of Senior Lien Obligations
occurs, to the extent that Senior Agent or any Senior Claimholder (i) has
released any Lien on Junior Collateral or any U.S. Grantor with respect to the
Senior Lien Obligations, and any such Liens or obligations are later
reinstated, or (ii) has obtained any new Liens from any U.S. Grantor or
obtained a guaranty from any U.S. Grantor of the Senior Lien Obligations, then
Junior Agent, for itself and for Junior Claimholders, shall be entitled to
obtain (and each of the U.S. Grantors by their acknowledgement to this
Agreement agrees to create and otherwise provide) a Lien on any such U.S.
Collateral, subject to the terms (including the lien subordination provisions)
of this Agreement, and a guaranty from such U.S. Grantor, as the case may be,
subject to any applicable limitations set forth in the Junior Security
Agreement and the Junior Pledge Agreement (it being understood that no guaranty
from Holding, and no assets of Holding, other than the pledge of Holding’s
equity interests in SquareTwo under the Junior Pledge Agreement, are required
to secure the Junior Lien Obligations). 
Notwithstanding the foregoing, the failure of any U.S. Grantor to comply
with the terms of this clause (f) shall not affect the rights of Senior
Agent or any Senior Claimholder.

 

17

 

 

(g)           Notwithstanding anything contained in this Section 5
to the contrary, (i) if the Liens securing the Senior Lien Obligations are
released in connection with the Discharge of Senior Lien Obligations (without a
contemporaneous incurrence of new or replacement Senior Lien Obligations), the
second-priority Liens on the Junior Collateral will not be required to be
released (except to the extent the Junior Collateral or any portion thereof was
disposed of or otherwise transferred or used in order to repay the Senior Lien
Obligations secured by the Junior Collateral) and (ii) any release
effected or occasioned by the terms of this Section 5 by Junior Agent of
any Lien in favor of the Junior Agent or any of the Junior Claimholders shall
not extend to or otherwise affect any of the rights of the Junior Agent or any
Junior Claimholder arising under the Junior Lien Documents to any proceeds of
any disposition of any Junior Collateral occurring in connection with such
Senior Lien Release; provided that such rights to such proceeds shall be
subject in all respects to the terms and conditions of this Agreement.

 

5.2.          Insurance.  Unless and until the Discharge of Senior Lien
Obligations has occurred:

 

(a)           The Senior Agent (on behalf of the Senior
Claimholders) shall be named as first loss payee under all insurance policies
maintained from time to time by any Grantor to the extent required by the
Senior Loan Documents and the Junior Agent (on behalf of the Junior
Claimholders) shall be named as the second loss payee on such policies of
insurance (to the extent covering the Junior Collateral).  The Junior Agent shall be named as an
additional insured on all liability insurance policies maintained from time to
time by any U.S. Grantor on which the Senior Agent is an additional
insured.  Unless and until the Discharge
of Senior Lien Obligations has occurred, the Senior Agent shall have the sole
and exclusive right, subject to the rights of Grantors under the Senior Loan
Documents, to adjust and settle any claim under any insurance policy covering
the Collateral in the event of any loss thereunder and to approve any award
granted in any condemnation or similar proceeding (or any deed in lieu of
condemnation) affecting the Collateral. 
Unless and until the Discharge of Senior Lien Obligations has occurred,
and subject to the rights of the U.S. Grantors under the Senior Loan Documents,
all proceeds of any such insurance policy and any such award (or any payments
with respect to a deed in lieu of condemnation) with respect to U.S. Grantors
shall be paid, first to Senior Claimholders and Junior Claimholders in
accordance with the priorities set forth in Section 4.1, until paid in
full in cash, and second, 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

 

(b)           if Junior Agent or any Junior Claimholders shall,
at any time, receive any proceeds of any such insurance policy or any such
award or payment in contravention of this Section 5.2, it shall pay such
proceeds over to Senior Agent in accordance with the terms of Section 4.2.

 

5.3.          Amendments; Refinancings;
Legend.

 

(a)           The Senior Loan Documents may be amended,
supplemented, or otherwise modified in accordance with their terms and the Senior
Lien Obligations may be Refinanced, in each case without notice to, or the
consent of, Junior Agent or Junior Claimholders, all without affecting the lien
subordination or other provisions of this Agreement; provided, however, that,
in the case of a Refinancing, the holders of such Refinancing debt (or 

 

18

 

their agent on their behalf) shall bind
themselves in writing to the terms of this Agreement; provided further,
however, that any such amendment, supplement, modification, or Refinancing
shall not, without the prior written consent of Junior Agent (which it shall be
authorized to consent to based upon an affirmative vote of Junior Claimholders
holding a majority of the debt under the Junior Lien Debt Agreement) contravene
the provisions of this Agreement. 
Notwithstanding the foregoing, any such amendment, supplement,
modification, or Refinancing of the Senior Loan Documents shall not, without
the prior written consent of Junior Agent increase the outstanding principal
amount of the Senior Lien Obligations to an amount that would exceed the
Maximum Senior Amount.

 

(b)           The Junior Agent and by virtue of accepting the
Junior Notes, the Junior Claimholders, agree that upon prior written notice to
Senior Agent, (i) the Junior Lien Documents may be amended, supplemented,
or otherwise modified and (ii) the Junior Lien Obligations may be
Refinanced; provided, however, that, in the case of a Refinancing, the holders
of such Refinancing debt (or Junior Agent or other representative therefor) to
the extent such Refinancing debt is secured, shall bind themselves in writing
addressed and delivered to Senior Agent for the benefit of itself and the
Senior Claimholders to the terms of this Agreement; provided, further however
that any such amendment, supplement or modification, or the terms of any new
Junior Lien Documents, shall not, without the prior written consent of Senior
Agent, contravene the provisions of this Agreement, the Senior Credit
Agreement, or any other Senior Loan Documents.

 

(c)           Junior Agent agrees that any promissory note
evidencing or security agreement, pledge agreement or mortgage securing the
Junior Lien Obligations shall at all times include the following language (or
language to similar effect approved by Senior Agent):

 

“Anything herein to the contrary notwithstanding, the
liens and security interests [securing the obligations evidenced by this
promissory note][granted pursuant to this agreement] and the exercise of
certain rights or and remedies with respect thereto are subject to the
provisions of the Intercreditor Agreement, dated as of April 7, 2010 (as
amended, restated, supplemented, or otherwise modified from time to time, the “Intercreditor Agreement”), by and among
GMAC Commercial Finance LLC, as Senior Agent, and [U.S. Bank National
Association],  as Junior Agent.  In the event of any conflict between the
terms of the Intercreditor Agreement and this [promissory note][security
agreement][pledge agreement][mortgage], the terms of the Intercreditor
Agreement shall govern and control.”

 

(d)           In the event the Senior Agent or the other Senior
Claimholders and the relevant Grantor(s) enter into any amendment,
restatement, waiver or consent in respect of any provision of the Senior Loan
Documents for the purpose of adding to, or deleting from, or waiving or
consenting to any departures from any provisions of, any such Senior Loan
Documents or changing in any manner the rights of the Senior Agent, the other
Senior Claimholders, the Borrowers or any other Grantor thereunder, including,
without limitation, for the purpose of terminating any control or similar
agreement entered into for the purpose of perfecting security interests granted
under the Senior Loan Documents, then such amendment, restatement, waiver or
consent shall apply automatically to any comparable provision of the 

 

19

 

Junior Lien Documents (subject to any existing
cushion or setback in such comparable Junior Lien Document provision and subject
to the terms of Section 2.3(c) hereof) without the consent of the
Junior Agent or the other Junior Claimholders and without any action by the
Junior Agent, provided that (A) any such amendment, restatement,
waiver or consent that is prejudicial to the rights of the Junior Claimholders
and does not affect the Senior Agent or the other Senior Claimholders in a like
or similar manner shall not apply to the comparable Junior Lien Documents
without the consent of the Junior Agent, it being agreed that any release
contemplated by Section 5.1 hereof shall be deemed not to be prejudicial
to the rights of the Junior Claimholders, (B) subject to Section 2.3(c) hereof,
no such amendment, restatement, waiver or consent shall result in the liens
securing the Junior Lien Obligations being unperfected with respect to assets
in respect of which the Senior Lien Obligations are perfected, (C) no such
amendment, restatement, waiver or consent shall adversely impact any
indemnification obligations in favor of Junior Agent, (D) in no event
shall any such amendment, restatement, waiver or consent become operative with
respect to any Junior Lien Document until such time (if ever) as written notice
of such amendment, restatement, waiver or consent shall have been given to the Junior
Agent by Square Two (with a copy to the Senior Agent), which notice shall
specify the matters under the Junior Lien Documents that have changed as a
result of the operation of this Section 5.1(d) and (E) in no
event shall this Section 5.1(d) have the effect of changing the terms
any Junior Lien Document that are not specified to be changing in the notice
delivered pursuant to the immediately preceding clause (D).   For clarity, Square Two may, in its sole
discretion, withhold any notice described in clause (D) above.

 

5.4.          Bailee for Perfection.

 

(a)           Senior Agent and Junior Agent agree to hold or
control that part of the Junior Collateral that is in its possession or control
(or in the possession or control of its agents or bailees) to the extent that
possession or control thereof is taken to perfect a Lien thereon under the UCC,
or other applicable law (such Junior Collateral being referred to as the “Pledged
Collateral”) as bailee and as a non-fiduciary agent for Junior Agent or Senior
Agent, as applicable (such bailment and agency being intended, among other
things, to satisfy the requirements of Sections 8-301(a)(2), 9-313(c), 9-104,
9-105, 9-106, and 9-107 of the UCC), solely for the purpose of perfecting the
security interest granted under the Junior Lien Documents or the Senior Loan
Documents, as applicable, subject to the terms and conditions of this Section 5.4(a) and
Senior Agent and Junior Agent hereby appoint each other Agent to act as its
non-fiduciary agent for such purposes and each such Agent accepts such
appointment. Unless and until the Discharge of the Senior Lien Obligations,
Junior Agent agrees to promptly notify Senior Agent of any Pledged Collateral
held by it or by any Junior Claimholders, and, immediately upon the written
request of Senior Agent at any time prior to the Discharge of the Senior Lien
Obligations, Junior Agent agrees to deliver to Senior Agent any such Pledged
Collateral held by it or by any Junior Claimholders, together with any
necessary endorsements (or otherwise allow Senior Agent to obtain sole
possession or control of such Pledged Collateral).

 

(b)           Subject to the terms of this Agreement, until the
Discharge of Senior Lien Obligations has occurred, the Senior Agent shall be
entitled to deal with the Pledged Collateral in accordance with the terms of
the Senior Loan Documents as if the Liens of the Junior Agent under the Junior
Collateral Documents did not exist.  The
rights of the Junior Agent shall at all 

 

20

 

times be subject to the terms of this
Agreement and to the Senior Agent’s rights under the Senior Loan Documents.

 

(c)           Senior Agent shall not have any obligation
whatsoever to Junior Agent or any Junior Claimholder to ensure that the Pledged
Collateral is genuine or owned by any of Grantors or to preserve rights or
benefits of any person except as expressly set forth in this Section 5.4.  Junior Agent shall have no obligation
whatsoever to Senior Agent or any Senior Claimholder to ensure that the Pledged
Collateral is genuine or owned by any of 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 Senior
Agent under this Section 5.4 shall be limited solely to holding or controlling
the Pledged Collateral as bailee and agent in accordance with this Section 5.4
and delivering the Pledged Collateral upon a Discharge of Senior Lien
Obligations as provided in paragraph (d) of this Section 5.4 (in all
cases subject to the terms of Section 2.3(c)).  The duties or responsibilities of Junior
Agent under this Section 5.4 shall be limited solely to holding or
controlling the Pledged Collateral as bailee and agent in accordance with this Section 5.4.

 

(d)           Senior Agent acting pursuant to this Section 5.4
shall not have by reason of the Senior Loan Documents, the Junior Lien
Documents, or this Agreement a fiduciary relationship in respect of Junior
Agent or any Junior Claimholder.  Junior
Agent acting pursuant to this Section 5.4 shall not have by reason of the
Senior Loan Documents, the Junior Lien Documents, or this Agreement a fiduciary
relationship in respect of Senior Agent or any Senior Claimholder.

 

(e)           Upon the Discharge of Senior Lien Obligations and
subject to Section 2.3(c) hereof, Senior Agent shall deliver the
remaining Pledged Collateral (if any) together with any necessary endorsements
(but without representation or warranty or recourse of any kind), first, to
Junior Agent to the extent Junior Lien Obligations remain outstanding as
confirmed in writing by Junior Agent, and, to the extent that Junior Agent
confirms no Junior Lien Obligations are outstanding, second, to U.S. Grantors
to the extent no Senior Lien Obligations or Junior Lien Obligations remain
outstanding (in each case, so as to allow such person to obtain possession or
control of such Pledged Collateral).

 

5.5.          When Discharge of Senior
Lien Obligations Deemed to Not Have Occurred.

 

(a)           If Borrowers enter into any Refinancing of the
Senior Lien Obligations, then a Discharge of Senior Lien Obligations shall be
deemed not to have occurred for all purposes of this Agreement, and the
obligations under such Refinancing of such Senior Lien Obligations shall be
treated as Senior Lien Obligations for all purposes of this Agreement,
including for purposes of the Lien priorities and rights in respect of
Collateral set forth herein, and Senior Agent under the Senior Loan Documents
effecting such Refinancing shall be Senior Agent for all purposes of this
Agreement.  Senior Agent under the Senior
Loan Documents shall agree (in a writing addressed to Junior Agent for the
benefit of itself and the Junior Claimholders in the form of Exhibit A
hereto) to be bound by the terms of this Agreement.  Promptly after receipt of such writing, Junior
Agent agrees to deliver to Senior Agent any Pledged Collateral held by it or by
any Junior Claimholders, together with any necessary endorsements (or otherwise
allow Senior Agent to obtain possession or control of such Pledged Collateral)
and such other documents as may be reasonably requested to enable the
Refinancing of the Senior 

 

21

 

Lien Obligations to obtain the same lien
priority and status as the Senior Lien Obligations in existence as of the date of
this Agreement.

 

(b)           If SquareTwo enters into any Refinancing of the
Junior Lien Obligations, then a Discharge of Junior Lien Obligations shall be
deemed not to have occurred for all purposes of this Agreement, and the
obligations under such Refinancing of such Junior Lien Obligations shall be
treated as Junior Lien Obligations for all purposes of this Agreement,
including for purposes of the Lien priorities and rights in respect of
Collateral set forth herein, and Junior Agent under the Junior Lien Documents
effecting such Refinancing shall be Junior Agent for all purposes of this
Agreement.  Junior Agent under such
Junior Lien Documents shall agree (in a writing addressed to Senior Agent for
the benefit of themselves and the Senior Claimholders substantially in the form
of Exhibit A hereto) to be bound by the terms of this Agreement.

 

5.6.          Injunctive Relief.  Should any Junior Claimholder in any way
take, attempt to, or threaten to take any action contrary to terms of this
Agreement with respect to the Collateral, or fail to take any action required
by this Agreement, Senior Agent or any Senior Claimholder may obtain relief
against such Junior Claimholder by injunction, specific performance, or other
appropriate equitable relief, it being understood and agreed by Junior Agent
that (a) Senior Claimholders’ damages from such actions may at that time
be difficult to ascertain and may be irreparable, and (b) each Junior
Claimholder waives any defense that such Grantor and/or Senior Claimholders
cannot demonstrate damage and/or be made whole by the awarding of damages.  Should any Senior Claimholder in any way
take, attempt to, or threaten to take any action contrary to terms of this
Agreement with respect to the Junior Collateral, or fail to take any action required
by this Agreement, Junior Agent or any Junior Claimholder (in its or their own
name or in the name of any U.S. Grantor) or any U.S. Grantor may obtain relief
against such Senior Claimholder by injunction, specific performance, and/or
other appropriate equitable relief, it being understood and agreed by Senior
Claimholders that (i) Junior Claimholders’ damages from such actions may
at that time be difficult to ascertain and may be irreparable, and (ii) each
Senior Claimholder waives any defense that such U.S. Grantor and/or Junior
Claimholders cannot demonstrate damage and/or be made whole by the awarding of
damages.  Senior Agent and Junior Agent
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 Senior Agent or any Senior
Claimholder or Junior Agent or any Junior Claimholder, as the case may be.

 

SECTION 6.         INSOLVENCY PROCEEDINGS.

 

6.1.          Enforceability and
Continuing Priority.  This Agreement shall be applicable both
before and after the commencement of any Insolvency Proceeding and all
converted or succeeding cases in respect thereof.  The relative rights of Claimholders in or to
any distributions from or in respect of any Collateral or proceeds of
Collateral, shall continue after the commencement of any Insolvency
Proceeding.  Accordingly, the provisions
of this Agreement are intended to be and shall be enforceable as a
subordination agreement within the meaning of Section 510 of the
Bankruptcy Code.

 

22

 

6.2.          Financing.  If any U.S. Grantor shall be subject to any
Insolvency Proceeding and Senior Agent consents to the use of
post-filing/post-petition cash receipts or “cash collateral” (as such term is
defined in Section 363(a) of the Bankruptcy Code) (collectively, “Cash
Collateral”), on which Senior Agent has a Lien or to permit any U.S. Grantor to
obtain financing provided by any one or more Senior Claimholders under Section 364
of the Bankruptcy Code or any similar Bankruptcy Law (such financing, a “DIP
Financing”), then Junior Agent agrees that, subject to the terms and conditions
set forth in Section 6.5(b), it will consent to such Cash Collateral use and
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, 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 such DIP Financing (including, except as provided below (including,
without limitation, in Section 6.5(b)), any claim that the Junior
Claimholders are entitled to Adequate Protection on account of their interests
in the Junior Collateral as a condition thereto) and, to the extent the Liens
securing the Senior Lien Obligations are discharged, subordinated to, or pari
passu with such DIP Financing, Junior Agent will subordinate its Liens in the Junior
Collateral to the Liens securing such DIP Financing; provided that Junior Agent
may object to such DIP Financing if the sum of (i) the maximum aggregate
principal amount of Indebtedness that may be outstanding from time to time
under such DIP Financing plus, without duplication, (ii) the aggregate
principal amount of loans and the aggregate face amount of Letters of Credit
issued but not reimbursed under the Senior Credit Agreement (after giving
effect to any closing with respect to such DIP Financing following the final
hearing in respect thereof) exceeds the Maximum Senior Amount.  Junior Agent agrees that it shall not,
directly or indirectly, provide, offer to provide, or support any DIP Financing
secured by a Lien senior to or pari passu with the Liens securing the Senior
Lien Obligations without the consent of Senior Agent.  If, in connection with any Cash Collateral
use or DIP Financing, any Liens on the Junior Collateral held by Senior
Claimholders are subject to a surcharge or are subordinated to an
administrative priority claim, a professional fee “carve out,” or fees owed to
the United States Trustee, and so long as the amount of such surcharge, claim,
carve out, or fees is reasonable under the circumstances, then the Liens on the
Junior Collateral of Junior Claimholders shall also be subordinated to such
interest or claim and shall remain subordinated to the Liens on the Junior
Collateral of Senior Claimholders consistent with this Agreement.

 

6.3.          Section 363 Sales of
Collateral and Releases of Liens securing Senior Lien Obligations.  Except as otherwise set forth below, until
the Discharge of Senior Lien Obligations has occurred,  Junior Agent agrees that it will be deemed to
have irrevocably, absolutely and unconditionally consented, and will not object
or oppose a motion to Dispose of any Junior Collateral free and clear of the
Liens or other claims in favor of Junior Agent under Section 363 of the
Bankruptcy Code, or pursuant to the terms of any other applicable Bankruptcy
Law or court order in any Insolvency Proceeding, if Senior Agent (with consent
of the requisite Senior Claimholders under the Senior Credit Agreement) has
consented to such Disposition of such assets free and clear of their Liens, and
such motion does not impair, subject to the priorities set forth in this
Agreement, the rights of Junior Claimholders under Section 363(k) of
the Bankruptcy Code, or pursuant to the terms of any other applicable
Bankruptcy Law or court order in any Insolvency Proceeding (so long as the
right of the Junior Claimholders to offset its claim against the purchase price
is only after the Discharge of Senior Lien Obligations has occurred) so long as
the interests of the Junior Creditors in the Junior Collateral (and any
post-petition assets subject to adequate protection liens, if any, in favor of
Junior Agent) attach to the 

 

23

 

proceeds thereof on the same basis and priority as the other Liens
securing the Junior Lien Obligations under this Agreement (i.e., subordinate to
the Liens securing the Senior Lien Obligations). Notwithstanding the foregoing,
to the extent that Junior Agent and Junior Claimholders reasonably believe that
the Junior Lien Obligations are undersecured, the Junior Agent, on behalf of itself
and the Junior Claimholders, may raise objections to any such Disposition of
Junior Collateral that could be raised by any creditor of the Grantors whose
claims were not secured by any Liens on the Junior Collateral so long as such
objections are not based on the Junior Claimholders’ status as secured
creditors.

 

6.4.          Relief from the Automatic
Stay.  Until the
Discharge of Senior Lien Obligations has occurred; Junior Agent agrees not to (a) seek
(or support any other person seeking) relief from any automatic stay or any
other applicable stay in any Insolvency Proceeding in respect of the Junior
Collateral, without the prior written consent of Senior Agent or (b) oppose
any request by Senior Agent or any Senior Claimholder to seek relief from any
automatic stay or any other applicable stay in any Insolvency Proceeding in
respect of the Junior Collateral; provided that the Senior Claimholders shall
otherwise remain subject to all applicable restrictions of this Agreement
following the foreclosure upon or granting of any such relief from the
automatic stay, and the foregoing clause (b) shall not impair the rights
or entitlements of the Junior Claimholders with respect to and to the extent
such Junior Claimholders hold unsecured claims.

 

6.5.          Adequate Protection.

 

(a)           In any Insolvency Proceeding involving a U.S.
Grantor, until the Discharge of Senior Lien Obligations has occurred, Junior
Agent agrees, and by virtue of accepting the Junior Notes, each Junior
Claimholder agrees, that no Junior Claimholder 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 Senior Agent
or any other Senior Claimholder for Adequate Protection; or

 

(ii)           any objection by Senior
Agent or any other Senior Claimholder to any motion, relief, action, or
proceeding based on Senior Agent or such Senior Claimholder claiming a lack of
Adequate Protection; or

 

(iii)          the payment of interest,
fees, expenses or other amounts to the Senior Agent or any other Senior
Claimholders (or the Person or Persons acting in a similar capacity under any
agreement replacing or Refinancing the Senior Credit Agreement as permitted
hereunder) under Section 506(b) or 506(c) of the Bankruptcy Code
or otherwise.

 

(b)           In any Insolvency Proceeding involving a U.S.
Grantor:

 

(i)            if any one or more Senior
Claimholders are granted Adequate Protection in the form of an additional Lien
or a replacement Lien (on existing or future assets of U.S. Grantors) in
connection with any DIP Financing or use of Cash Collateral, then Senior Agent
agrees that Junior Agent shall also be entitled to seek, without objection from
Senior Claimholders, Adequate Protection in the 

 

24

 

form of an additional Lien
or a replacement Lien (on such existing or future assets of U.S. Grantors),
which additional or replacement Lien of Junior Agent, if obtained, shall be
subordinate to the Liens securing the Senior Lien Obligations (including those
under a DIP Financing) on the same basis as the other Liens securing the Junior
Lien Obligations are subordinate to the Senior Lien Obligations under this
Agreement;

 

(ii)           if any one or more Junior
Claimholders request Adequate Protection in the form of an additional Lien or a
replacement Lien (on existing or future assets of U.S. Grantors), then Junior
Agent agrees that Junior Agent and/or Junior Claimholder shall not accept such
Adequate Protection unless Senior Agent shall also be granted or offered an
Adequate Protection Lien on existing or future assets of U.S. Grantors as
security for the Senior Lien Obligations and that any Adequate Protection Lien
on such existing or future assets securing the Junior Lien Obligations shall be
subordinated to the Lien on such assets securing the Senior Lien Obligations on
the same basis as the other Liens securing the Junior Lien Obligations are
subordinated to the Senior Lien Obligations under this Agreement;

 

(iii)          if any one or more Senior
Claimholders request and are granted Adequate Protection in the form of a
super-priority claim in connection with any DIP Financing or use of Cash
Collateral, then Senior Agent agrees that Junior Agent shall also be entitled
to seek, without objection from Senior Claimholders (but subject to the terms
of section 2.3(c) hereof), Adequate Protection in the form of a
super-priority claim, which super-priority claim of Junior Agent, if obtained,
shall be subordinate to the super-priority claims of the Senior Agent on the
same basis as the other claims of the Junior Claimholders are subordinate to
the claims of the Senior Claimholders under this Agreement; provided, however,
the Junior Agent, and by virtue of accepting the Junior Notes, the Junior
Claimholders, agree that they shall not accept such Adequate Protection unless
Senior Agent shall also be granted or offered Adequate Protection in the form
of a super-priority claim, which super-priority claim, if obtained, shall be
subordinate to the super-priority claim of the Senior Claimholders;

 

(iv)          if any one or more Junior
Claimholders are granted Adequate Protection in the form of a super-priority
claim, then Junior Agent agrees that Senior Agent shall also be granted or
offered Adequate Protection in the form of a super-priority claim, which
super-priority claim shall be senior to the super-priority claim of the Junior
Claimholders;

 

(v)           consistent with the
foregoing provisions in this Section 6.5, in any Insolvency Proceeding, no
Junior Claimholder shall be entitled (and each Junior Claimholder shall be
deemed to have hereby irrevocably, absolutely, and unconditionally waived any
right) to seek or otherwise be granted any type of Adequate Protection with
respect to its interests in the Junior Collateral (except as expressly set
forth above in this Section 6.5 or as may otherwise be consented to in
writing by Senior Agent with respect to such Junior Collateral or as may 

 

25

 

otherwise be granted to the
Senior Agent; provided, that any such other type of Adequate Protection granted
to the Junior Agent shall be subordinated to that granted to the Senior Agent;
and

 

(vi)          nothing herein shall limit
the rights of Senior Agent or any Senior Claimholder to seek Adequate Protection
with respect to their rights in the Senior Collateral in any Insolvency
Proceeding (including Adequate Protection in the form of a cash payment,
periodic cash payments or otherwise) so long as such request is not otherwise
inconsistent with this Agreement.

 

(c)           Neither Junior Agent nor any other Junior
Claimholder shall object to, oppose, or challenge any claim by Senior Agent or
any Senior Claimholder for allowance in any Insolvency Proceeding of Senior
Lien Obligations consisting of post-petition interest, fees, or expenses.

 

(d)           So long as Senior Agent and Senior Claimholders
shall have received and shall continue to receive all accrued post-petition
interest, fees or expenses with respect to the Senior Lien Obligations, neither
Senior Agent nor any other Senior Claimholder shall object to, oppose, or
challenge any claim by Junior Agent or any Junior Claimholder for allowance in
any Insolvency Proceeding of Junior Lien Obligations consisting of
post-petition interest, fees, or expenses.

 

6.6.          Section 1111(b) of
the Bankruptcy Code.  Junior Agent, for itself and on behalf of
Junior Claimholders, shall not object to, oppose, support any objection, or
take any other action to impede, the right of any Senior Claimholder to make an
election under Section 1111(b)(2) of the Bankruptcy Code.  Junior Agent, for itself and on behalf of
Junior Claimholders, waives any claim it may hereafter have against any Senior
Claimholder arising out of the election by any Senior Claimholder of the
application of Section 1111(b)(2) of the Bankruptcy Code.

 

6.7.          No Waiver.  Subject to this Section 6, until the
Discharge of Senior Lien Obligations has occurred, nothing contained herein
shall prohibit or in any way limit Senior Agent or any Senior Claimholder from
objecting in any Insolvency Proceeding involving a Grantor to any action taken
by Junior Agent or any Junior Claimholders, including the seeking by Junior
Agent or any Junior Claimholders of Adequate Protection or the assertion by
Junior Agent or any Junior Claimholders of any of its rights and remedies under
the Junior Lien Documents.

 

6.8.          Avoidance Issues.  If any Senior Claimholder is required in any
Insolvency Proceeding or otherwise to turn over, disgorge or otherwise pay to
the estate of any Grantor any amount paid in respect of Senior Lien Obligations
(a “Recovery”), then such Senior Claimholders shall be entitled to a
reinstatement of Senior Lien Obligations with respect to all such recovered
amounts, and all rights, interests, priorities and privileges recognized in
this Agreement shall apply with respect to any such Recovery.  If this Agreement shall have been terminated
prior to such Recovery, this Agreement shall be reinstated in full force and
effect with respect to such Recovery, and such prior termination shall not
diminish, release, discharge, impair, or otherwise affect the obligations of
the parties hereto from such date of reinstatement with respect thereto.  The Junior Agent and, by virtue of accepting
the Junior Notes, the Junior 

 

26

 

Claimholders agree that none of them shall be entitled to benefit in
any manner from any Lien with respect to any avoidance action affecting or
otherwise relating to any distribution or allocation of Collateral or the
proceeds of Collateral made in accordance with this Agreement, whether by
preference or otherwise, to the extent such Lien is prior to the Lien of Agent
therein, it being understood and agreed that the benefit of such avoidance
action otherwise allocable to them shall instead be allocated and turned over
for application in accordance with the priorities set forth in this Agreement;
provided, however, that the foregoing sentence shall not impair the rights or
entitlements of the Junior Claimholders with respect to and to the extent such
Junior Claimholders hold unsecured claims against U.S. Grantors.

 

6.9.          Plan of Reorganization.

 

(a)           If, in any Insolvency Proceeding involving a U.S.
Grantor, debt obligations of the reorganized debtor secured by Liens upon any
property of the reorganized debtor are distributed pursuant to a Plan of
Reorganization or similar dispositive restructuring plan, both on account of
Senior Lien Obligations and on account of Junior Lien Obligations, then, to the
extent the debt obligations distributed on account of the Senior Lien
Obligations and on account of the Junior Lien Obligations are secured by Liens
upon the same property, the provisions of this Agreement will survive the
distribution of such debt obligations pursuant to such plan and will apply with
like effect to the Liens securing such debt obligations.

 

(b)           Junior Claimholders (whether in the capacity of a
secured creditor or an unsecured creditor) shall not propose, vote in favor of
or support any Plan of Reorganization that is inconsistent with the priorities
or other provisions of this Agreement, other than with the consent of the
Senior Agent or to the extent any such plan is proposed or supported by the
number of Senior Claimholders required under Section 1126(d) of the
Bankruptcy Code.

 

6.10.        Nature of Obligations;
Post-Petition Interest.  The Junior Agent and, by virtue of accepting
the Junior Notes, the Junior Claimholders, acknowledge and agree that (i) the
Junior Claimholders’ claims against the Loan Parties in respect of the Junior
Collateral constitute junior claims separate and apart (and of a different
class) from the senior claims of the Senior Claimholders against the Loan
Parties in respect of the Junior Collateral and (ii) the Senior Lien
Obligations include all interest that accrues after the commencement of any
Insolvency Proceeding of any Loan Party at the rate provided for in the Senior
Loan Documents governing the same, whether or not a claim for post-petition
interest is allowed or allowable in any such Insolvency Proceeding.  By virtue of accepting the Junior Notes, the
Junior Claimholders acknowledge and agree that this Agreement constitutes a “subordination
agreement” under Section 510 of the Bankruptcy Code.  To further effectuate the intent of the
parties as provided in the immediately preceding sentence, if it is held that
the claims against the Loan Parties in respect of the Junior Collateral
constitute only one secured claim (rather than separate classes of senior and
junior claims), then the Junior Agent and, by virtue of accepting the Junior
Notes, the Junior Claimholders, acknowledge and agree that all distributions
pursuant to Section 4.1 or otherwise shall be made as if there were
separate classes of senior and junior secured claims against the Loan Parties
in respect of the Junior Collateral (with the effect being that, to the extent
that the aggregate value of the Junior Collateral is sufficient (for this
purpose ignoring all claims held by the Junior Agent on behalf of the Junior
Claimholders), the Senior Claimholders shall be entitled to receive from the
Collateral or in respect of its secured claim with respect

 

27

 

 

thereto, in addition to amounts distributed to them in respect of
principal, prepetition interest and other claims, all amounts owing in respect
of post-petition interest at the relevant contract rate (even though such
claims may or may not be allowed in whole or in part in the respective
Insolvency Proceeding) before any distribution is made in respect of the claims
relating to the Junior Collateral or the Liens thereon securing the Junior Lien
Obligations held by the Junior Agent, on behalf of the Junior Claimholders,
with the Junior Agent and, by virtue of accepting the Junior Notes, the Junior
Claimholders, acknowledging and agreeing to turn over to the holders of the
Senior Lien Obligations all amounts otherwise received or receivable by them
from the Junior Collateral or in respect of the Liens thereon securing the
Junior Lien Obligations to the extent needed to effectuate the intent of this
sentence even if such turnover of amounts has the effect of reducing the amount
of the claim of the Junior Claimholders).

 

SECTION 7.         RELIANCE; WAIVERS; ETC.

 

7.1.          Reliance.

 

(a)           Other than any reliance on the terms of this
Agreement, Senior Agent acknowledges that it and such Senior Claimholders have,
independently and without reliance on Junior Agent or any Junior Claimholders,
and based on documents and information deemed by them appropriate, made their
own credit analysis and decision to enter into the applicable Senior 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
Senior Credit Agreement or this Agreement.

 

(b)           Other than any reliance on the terms of this
Agreement, Junior Agent acknowledges that it and Junior Claimholders have,
independently and without reliance on Senior Agent or any Senior Claimholder,
and based on documents and information deemed by them appropriate, made their
own credit analysis and decision to enter into each of the Junior Lien
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
Junior Lien Documents or this Agreement.

 

7.2.          No Warranties or Liability.  Senior Agent acknowledges and agrees that
each of Junior Agent and Junior Claimholders have made no express or implied
representation or warranty, including with respect to the execution, validity,
legality, completeness, collectability, or enforceability of any of the Junior
Lien Documents (other than this Agreement, to the extent provided in Section 8),
the ownership of any Junior Collateral, or the perfection or priority of any
Liens thereon.  Except as otherwise
expressly provided herein, Junior Claimholders will be entitled to manage and
supervise their respective loans and extensions of credit under the Junior Lien
Documents in accordance with law and as they may otherwise, in their sole
discretion, deem appropriate.  Junior
Agent acknowledges and agrees that none of Senior Agent or any Senior
Claimholder has made any express or implied representation or warranty,
including with respect to the execution, validity, legality, completeness,
collectability, or enforceability of any of the Senior Loan Documents, (other
than this Agreement, to the extent provided in Section 8), the ownership
of any Collateral, or the perfection or priority of any Liens thereon.  Except as otherwise expressly provided
herein, Senior Claimholders will be entitled to manage and supervise their
respective loans and extensions of credit under their respective Senior Loan 

 

28

 

Documents in accordance with law and as they may otherwise, in their
sole discretion, deem appropriate. 
Except as provided herein, Junior Agent and Junior Claimholders shall
not have any duty to Senior Agent or any Senior Claimholders, and each of
Senior Agent and Senior Claimholders have no duty to Junior Agent or any Junior
Claimholders, to act or refrain from acting in a manner that allows, or results
in, the occurrence or continuance of an event of default or default under any
agreements with any Grantor (including the Senior Loan Documents and the Junior
Lien 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 Senior Claimholders, Senior Agent or
any of them to enforce any provision of this Agreement or any Senior Loan
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
any Senior Claimholder or Senior Agent, or by any noncompliance by any person
with the terms, provisions, and covenants of this Agreement, any of the Senior
Loan Documents or any of the Junior Lien Documents, regardless of any knowledge
thereof which Senior Agent or Senior Claimholders, or any of them, may have or
be otherwise charged with.

 

(b)           No right of Junior Claimholders, Junior Agent or
any of them to enforce any provision of this Agreement or any Junior Lien
Documents shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of any U.S. Grantor or by any act or failure to act
by any Junior Claimholder or Junior Agent, or by any noncompliance by any
person with the terms, provisions, and covenants of this Agreement, any of the
Junior Lien Documents or any of the Senior Loan Documents, regardless of any
knowledge thereof which Junior Agent or Junior Claimholders, or any of them,
may have or be otherwise charged with.

 

(c)           Without in any way limiting the generality of Section 7.3(a) (but
subject to any rights of Grantors under the Senior Loan Documents and subject
to the provisions of Section 5.3(a)), Senior Claimholders, Senior Agent
and any of them may, at any time and from time to time in accordance with the
Senior Loan Documents and/or applicable law, without the consent of, or notice
to, Junior Agent or any Junior Claimholders, without incurring any liabilities
to Junior Agent or any Junior Claimholders and without impairing or releasing
the Lien priorities and other benefits provided in this Agreement (even if any
right of subrogation or other right or remedy of Junior Agent or any Junior
Claimholders is affected, impaired, or extinguished thereby) do any one or more
of the following without the prior written consent of Junior Agent:

 

(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 Senior Lien
Obligations or any Lien on any Senior Collateral or guarantee 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 Senior Lien
Obligations, without any restriction as to the tenor or terms of any such
increase or extension) or otherwise amend, renew, exchange, extend, modify, or
supplement in any manner any Liens held by Senior Agent or any Senior
Claimholder, the Senior Lien Obligations, or any of the Senior Loan 

 

29

 

Documents (it being
understood that if any such change or increase results in the principal amount
of such Senior Lien Obligations exceeding the Maximum Senior Amount, the
amounts that are in excess of the Maximum Senior Amount shall not constitute “Senior
Lien Obligations” for purposes of this Agreement);

 

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

 

(iii)          settle or compromise any
Senior Lien 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
(including the Senior Lien Obligations) in any manner or order; and

 

(iv)          exercise or delay in or
refrain from exercising any right or remedy against any Grantor or any other
person, elect any remedy and otherwise deal freely with any Grantor or any
Senior Collateral and any security and any guarantor or any liability of any
Grantor to Senior Claimholders or any liability incurred directly or indirectly
in respect thereof.

 

(d)           Without in any way limiting the generality of Section 7.3(b) (but
subject to any rights of Grantors under the Junior Lien Documents and subject
to the provisions of Section 2.3(c) and Section 5.3(b) and
the other provisions of this Agreement), Junior Claimholders, Junior Agent and
any of them may, at any time and from time to time in accordance with the
Junior Lien Documents and/or applicable law, without the consent of, or notice
to, Senior Agent or any Senior Claimholder, without incurring any liabilities
to Senior Agent or any Senior Claimholders and without impairing or releasing
the Lien priorities and other benefits provided in this Agreement (even if any
right of subrogation or other right or remedy of Senior Agent or any Senior
Claimholders is affected, impaired, or extinguished thereby) do any one or more
of the following without the prior written consent of Senior Agent:

 

(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 Junior Lien
Obligations or any Lien on any Junior Collateral or guarantee thereof or any
liability of any U.S. Grantor, or any liability incurred directly or indirectly
in respect thereof (including any increase in or extension of the Junior Lien
Obligations, without any restriction as to the tenor or terms of any such
increase or extension) or otherwise amend, renew, exchange, extend, modify, or
supplement in any manner any Liens held by Junior Agent or any Junior
Claimholders, the Junior Lien Obligations, or any of the Junior Lien Documents;

 

(ii)           sell, exchange, release,
surrender, realize upon, enforce or otherwise deal with in any manner and in
any order any part of the Junior 

 

30

 

Collateral or any liability
of any U.S. Grantor to Junior Claimholders or Junior Agent, or any liability
incurred directly or indirectly in respect thereof;

 

(iii)          settle or compromise any Junior
Lien Obligation or any other liability of any U.S. 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
(including the Junior Lien Obligations) in any manner or order; and

 

(iv)          exercise or delay in or
refrain from exercising any right or remedy against any U.S. Grantor or any
other person, elect any remedy and otherwise deal freely with any U.S. Grantor
or any Junior Collateral and any security and any guarantor or any liability of
any U.S. Grantor to Junior Claimholders or any liability incurred directly or
indirectly in respect thereof.

 

(e)           Except as otherwise provided in this Agreement,
Junior Agent also agrees that Senior Claimholders and Senior Agent shall have
no liability to Junior Agent or any Junior Claimholders, and Junior Agent
hereby waives any claim against any Senior Claimholder or Senior Agent, arising
out of any and all actions which Senior Claimholders or Senior Agent may,
pursuant to and not in contravention of the terms hereof, take, permit or omit
to take with respect to:

 

(i)            the Senior Loan Documents;

 

(ii)           the collection of the
Senior Lien Obligations; or

 

(iii)          the enforcement, sale,
liquidation, foreclosure upon or other disposition of, or the failure to
enforce, sell, liquidate, foreclose upon or otherwise dispose of, any Senior
Collateral.  Except as otherwise provided
in this Agreement, Junior Agent agrees that no Senior Claimholders and Senior
Agent have any duty to them in respect of the maintenance or preservation of
the Senior Collateral, the Senior Lien Obligations, or otherwise.

 

(f)            Until the Discharge of Senior Lien Obligations,
Junior Agent and the Junior Claimholders agree not to assert and hereby waive,
to the fullest extent permitted by law, any right to demand, request, plead, or
otherwise assert, or otherwise claim the benefit of, any marshaling, appraisal,
valuation, or other similar right that may otherwise be available under
applicable law with respect to the Junior Collateral or any other similar
rights a junior secured creditor may have under applicable law.

 

7.4.          Obligations Unconditional.  For so long as this Agreement is in full
force and effect, all rights, interests, agreements and obligations of Senior
Agent and Senior Claimholders and Junior Agent and Junior Claimholders,
respectively, hereunder shall remain in full force and effect irrespective of:

 

(a)           any lack of validity or enforceability of any
Senior Loan Documents or any Junior Lien Documents;

 

31

 

(b)           except as otherwise expressly restricted 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 Senior Lien Obligations or Junior Lien
Obligations, or any amendment or waiver or other modification, including any
increase in the amount thereof, whether by course of conduct or otherwise, of
the terms of any Senior Loan Document or any Junior Lien Documents;

 

(c)           except as otherwise expressly restricted in this
Agreement, any exchange of any security interest in any Collateral or any other
collateral, or any amendment, waiver or other modification, whether in writing
or by course of conduct or otherwise, of all or any of the Senior Lien
Obligations or Junior Lien Obligations or any guarantee thereof;

 

(d)           the commencement of any Insolvency 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
Senior Agent, the Senior Lien Obligations, any Senior Claimholder, Junior
Agent, the Junior Lien Obligations or any Junior Claimholder in respect of this
Agreement..

 

SECTION 8.         REPRESENTATIONS AND WARRANTIES.

 

8.1.          Representations and
Warranties of Each Party.  Each party hereto represents and warrants to
the other parties hereto as follows:

 

(a)           such party is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization and has
all requisite power and authority to execute and deliver this Agreement and to
perform its obligations hereunder;

 

(b)           this Agreement has been duly executed and delivered
by such party and constitutes a legal, valid and binding obligation of such
party, enforceable in accordance with its terms; and

 

(c)           the execution, delivery, and performance by such
party of this Agreement (i) do not require any consent or approval of,
registration or filing with or any other action by any Governmental Authority
and (ii) will not violate any provision of law, statute, rule or
regulation, or of the governing documents of such party or any order of any
Governmental Authority or any provision of any indenture, agreement or other
instrument binding upon such party.

 

8.2.          Representations and
Warranties of Each Agent.  Senior Agent and Junior Agent each represents
and warrants to the other that it has been authorized by Senior Lenders or
Junior Creditors, as applicable, under the Senior Credit Agreement or the
Junior Debt Agreement, as applicable, to enter into this Agreement and that
each of the agreements, covenants, waivers, and other provisions hereof is
valid, binding, and enforceable against the Senior Lenders or Junior Creditors,
as applicable, as fully as if each such Person had duly executed this
Agreement.

 

32

 

SECTION 9.         MISCELLANEOUS.

 

9.1.          Conflicts.  Senior Agent, on behalf of the Senior
Claimholders, and Junior Agent, on behalf of the Junior Claimholders, agree
that, as between the Senior Claimholders and the Junior Claimholders, in the
event of any conflict between the provisions of this Agreement and the
provisions of any of the Senior Loan Documents or any of the Junior Lien
Documents, the provisions of this Agreement shall govern and control; provided,
that nothing in this Section 9.1, (x) as between the Senior Agent,
the other Senior Claimholders and the Grantors, shall be deemed to waive any
rights, protections, privileges, immunities or indemnities of the Senior Agent
and the Senior Claimholders as set forth in the Senior Loan Documents and (y) as
between the Junior Agent, the other Junior Claimholders, and the Guarantors,
shall be deemed to waive any rights, protections, privileges, immunities or
indemnities of the Junior Agent and the Junior Claimholders set forth in the
Junior Lien Documents

 

9.2.          Effectiveness; Continuing
Nature of this Agreement; Severability.  This Agreement shall become effective when
executed and delivered by the parties hereto. 
This is a continuing agreement of Lien subordination and Senior
Claimholders may continue, at any time and without notice to Junior Agent or
any Junior Claimholder, to extend credit and other financial accommodations to
or for the benefit of any Grantor constituting Senior Lien Obligations in
reliance hereof.  Junior Agent hereby
waives any right it may have under applicable law to revoke this Agreement or
any of the provisions of this Agreement. 
The terms of this Agreement shall survive, and shall continue in full
force and effect, in any Insolvency Proceeding. 
Any provision of this Agreement that is prohibited or unenforceable
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, interim
receiver, trustee-in-bankruptcy, or other similar Person for such Grantor in
any Insolvency Proceeding.  This
Agreement shall terminate and be of no further force and effect on the date of
the Discharge of Senior Lien Obligations.

 

9.3.          Amendments; Waivers.

 

(a)           No amendment, modification, or waiver of any of the
provisions of this Agreement shall be effective unless the same shall be in
writing signed on behalf of each party hereto or its authorized agent and in
the case of amendments, modifications or waivers in respect of Sections
5.1(c), 5.1(d), 5.1(f), 5.3, 5.4(a), 5.5,
5.6, 7.3(c)(i), 7.3(d)(i), 9.3 or 9.13 (or
any amendments to any defined terms used in such Sections, solely to the extent
that such amendments to such defined terms affect such Sections) to the extent
any such amendment, modification or waiver affects any U.S. Grantor, the U.S.
Grantors.  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.  Senior Agent and Junior Agent agree that they
shall provide to the Grantors a copy of any amendment, modification, or waiver
with respect to this Agreement following the execution thereof.

 

(b)           It is understood that the Senior Agent and the
Junior Agent, without the consent of any other Senior Claimholder or Junior
Claimholder, may in their discretion 

 

33

 

determine
that a supplemental agreement (which may take the form of an amendment and
restatement of this Agreement) is necessary or appropriate to facilitate having
additional indebtedness or other obligations, including, without limitation,
any refinancing of the Senior Lien Obligations, any Additional Credit Facility,
any Permitted Additional Junior Lien Obligation, or any Refinancing of the
Junior Lien Obligations (“Additional Debt”)
of any of the Grantors become Senior Lien Obligations or of any of the U.S.
Grantors become Junior Lien Obligations, as the case may be, under this
Agreement, which supplemental agreement shall specify whether such Additional
Debt constitutes Senior Lien Obligations or Junior Lien Obligations; provided,
that such Additional Debt is permitted to be incurred by the Senior Loan
Documents and the Junior Lien Documents as then in effect, and is permitted by
such agreements to be subject to the provisions of this Agreement as Senior
Lien Obligations or Junior Lien Obligations, as applicable.

 

(c)           In the event that the Junior Agent does not take
the actions contemplated by Section 9.3(b) in connection with
any permitted Additional Debt within ten (10) Business Days after the
delivery of a written request to do so, the Senior Agent, without the consent
of the Junior Agent, may modify this Agreement (which modification may take the
form of an amendment and restatement of this Agreement) for the purpose of
having any Additional Debt become Senior Lien Obligations under this Agreement,
which agreement shall specify that such Additional Debt constitutes Senior Lien
Obligations; provided, that such Additional Debt is permitted to be
incurred pursuant to the Junior Lien Documents as then in effect, and is
permitted by such agreement (as determined by the Senior Agent in good faith
and certified by an officer of the Borrowers to the Junior Agent) to be subject
to the provisions of this Agreement as Senior Lien Obligations.

 

9.4.          Information Concerning
Financial Condition of the Loan Parties and their Respective Subsidiaries.  Senior Agent and Senior Claimholders, on the
one hand, and Junior Claimholders and Junior Agent, on the other hand, shall
each be responsible for keeping themselves informed of (a) the financial
condition of the Loan Parties and their respective subsidiaries and all
endorsers or guarantors of the Senior Lien Obligations or the Junior Lien
Obligations and (b) all other circumstances bearing upon the risk of
nonpayment of the Senior Lien Obligations or the Junior Lien Obligations.  None of Senior Agent or any Senior
Claimholder shall have any duty to advise Junior Agent or any Junior
Claimholder of information known to it or them regarding such condition or any
such circumstances or otherwise.  Junior
Agent and Junior Claimholders shall have no duty to advise Senior Agent or any
Senior Claimholder of information known to it or them regarding such condition
or any such circumstances or otherwise. 
In the event Senior Agent or any Senior Claimholder, in its or their
sole discretion, undertakes at any time or from time to time to provide any such
information to Junior Agent or any Junior Claimholder, it or they shall be
under no obligation:

 

(a)           to make, and none of Senior Agent or any Senior
Claimholder shall make, any express or implied representation or warranty,
including with respect to the accuracy, completeness, truthfulness, or validity
of any such information so provided;

 

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

 

34

 

(c)           to undertake any investigation; or

 

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

 

9.5.          Subrogation.  The Junior Agent and the Junior Claimholders
waive any rights of subrogation they may acquire as a result of any payment
hereunder until the Discharge of Senior Lien Obligations has occurred.

 

9.6.          SUBMISSION TO JURISDICTION;
WAIVERS.

 

(a)           THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY
SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
SITTING IN NEW YORK COUNTY, NEW YORK, AND OF THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY
THEREOF. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH PARTY, FOR ITSELF AND
IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY:

 

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

 

(ii)           WAIVES ANY DEFENSE OF FORUM
NON CONVENIENS;

 

(iii)          AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED
OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE PARTY AT ITS
ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 9.7; AND

 

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

 

(b)           EACH OF THE PARTIES HERETO (INCLUDING EACH OF THE
GRANTORS ON BEHALF OF ITSELF AND ITS SUBSIDIARIES) HEREBY WAIVES ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
HEREUNDER.  THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED
IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER HEREOF, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW
AND STATUTORY CLAIMS.  EACH PARTY HERETO
ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS
AGREEMENT, AND THAT EACH WILL CONTINUE 

 

35

 

TO RELY ON THIS WAIVER IN ITS RELATED FUTURE
DEALINGS.  EACH PARTY HERETO FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL
AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL.  THIS
WAIVER IS IRREVOCABLE; MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY
OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO
THIS SECTION 9.6(b) AND EXECUTED BY SENIOR AGENT AND JUNIOR AGENT),
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS, OR MODIFICATIONS HERETO.  IN
THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT
TO A TRIAL BY THE COURT.

 

9.7.          Notices.  All notices to Junior Claimholders and Senior
Claimholders permitted or required under this Agreement shall also be sent to
Junior Agent and Senior Agent, respectively. 
Unless otherwise specifically provided herein, any notice hereunder
shall be in writing and may be personally served or sent by telefacsimile,
electronic mail or mail or courier service and shall be deemed to have been
given when delivered in person or by courier service and signed for against
receipt thereof, upon receipt of telefacsimile, electronic mail or 3 Business
Days after depositing it in the mail with postage prepaid and properly
addressed.  For the purposes hereof, the
addresses of the parties hereto shall be as designated on Exhibit B
attached hereto or as may be otherwise designated by such party in a written
notice to all of the other parties.

 

9.8.          Further Assurances.  Senior Agent and Junior Agent agree to take
such further action and shall execute and deliver such additional documents and
instruments (in recordable form, if requested) as Senior Agent or Junior Agent
may reasonably request to effectuate the terms of and the Lien priorities
contemplated by this Agreement, all at the expense of Borrowers.

 

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

 

9.10.        Binding on Successors and
Assigns.  This
Agreement shall be binding upon Senior Agent, Senior Claimholders, Junior
Agent, Junior Claimholders, any Additional Credit Facility Agent, any Permitted
Additional Junior Lien Obligations Representative, and their respective
successors and assigns.

 

9.11.        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.

 

9.12.        Counterparts.  This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. 
Delivery of an executed counterpart of a signature page of this
Agreement or any document or instrument delivered in connection herewith by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement or such other document or instrument, as applicable.

 

36

 

9.13.        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 bind
each of Senior Claimholders and Junior Claimholders.  In no event shall any Grantor be a third
party beneficiary of this Agreement, except to the extent that the provisions
set forth in Sections 5.1(c), 5.1(d), 5.1(f), 5.3, 5.4(a),
5.5, 5.6, 7.3(c)(i), 7.3(d)(i), 9.3 or 9.13
hereof affect any U.S. Grantor.

 

9.14.        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 Senior Agent
and Senior Claimholders on the one hand and Junior Agent and Junior
Claimholders on the other hand.  Except
as specifically provided in Section 9.13 hereof, 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
shall impair, as between Grantors and Senior Agent and Senior Claimholders, or
as between U.S. Grantors and Junior Agent and Junior Claimholders, the rights
of the Grantors under, or the obligations of the applicable Grantors to pay
principal, interest, fees and other amounts as provided in, the Senior Loan
Documents and the Junior Lien Documents, respectively.

 

9.15.        Patriot Act Compliance.  The parties hereto acknowledge that in
accordance with Section 326 of the USA PATRIOT Act Senior Agent, like all
financial institutions and in order to help fight the funding of terrorism and
money laundering, is required to obtain, verify, and record information that
identifies each person or legal entity that establishes a relationship or opens
an account.  The parties to this
Agreement agree that they will provide Senior Agent with such information as it
may request in order for Senior Agent to satisfy the requirements of the USA
PATRIOT Act.

 

37

 

 

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

 

	
   

  	
  GMAC COMMERCIAL FINANCE LLC,

  
	
   

  	
  a Delaware limited liability company,

  
	
   

  	
  as Senior Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas Maiale

  
	
   

  	
  Name:

  	
  Thomas Maiale

  
	
   

  	
  Title:

  	
  Director

  

 

 

	
   

  	
  U.S. BANK NATIONAL ASSOCIATION,

  
	
   

  	
  a national banking association,

  
	
   

  	
  as Junior Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert J. Dunn

  
	
   

  	
  Name:

  	
  Robert J. Dunn

  
	
   

  	
  Title:

  	
  Vice
  President

  

 

 

ACKNOWLEDGMENT

 

The Grantors each hereby acknowledge that they have
received a copy of the foregoing Intercreditor Agreement and consent thereto,
agree to recognize all rights granted thereby to Senior Agent, Senior
Claimholders, Junior Agent, and Junior Claimholders, and will not do any act or
perform any obligation the effect of which would result in a breach of the
agreements set forth in the Intercreditor Agreement, as amended, restated,
supplemented or otherwise modified from time to time.  The Grantors and each of the Grantors’
undersigned Subsidiaries each further acknowledge and agree that, except as
provided in Section 9.13 of the Intercreditor Agreement, they are
not an intended beneficiary or third party beneficiary under the foregoing
Intercreditor Agreement, as amended, restated, supplemented or otherwise
modified from time to time.

 

[signatures
on following pages]

 

 

ACKNOWLEDGED AS OF THE DATE FIRST WRITTEN ABOVE:

 

	
   

  	
  SQUARETWO FINANCIAL CORPORATION,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul A. Larkins

  
	
   

  	
  Name:

  	
  Paul A. Larkins

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PREFERRED CREDIT RESOURCES LIMITED,

  
	
   

  	
  an Ontario corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Chris Walker

  
	
   

  	
  Name:

  	
  Christopher Walker

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CACH, LLC

  
	
   

  	
  CACH OF NJ, LLC

  
	
   

  	
  COLLECT AMERICA OF CANADA LLC

  
	
   

  	
  CACV OF COLORADO, LLC

  
	
   

  	
  CACV OF NEW JERSEY, LLC

  
	
   

  	
  HEALTHCARE FUNDING SOLUTIONS, LLC

  
	
   

  	
  ORSA, LLC

  
	
   

  	
  CANDEO, LLC

  
	
   

  	
  AUTUS, LLC, each
  a Colorado limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul A. Larkins

  
	
   

  	
  Name:

  	
  Paul A. Larkins

  
	
   

  	
  Title:

  	
  Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  REFINANCE AMERICA, LTD., a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas G. Good

  
	
   

  	
  Name:

  	
  Thomas G. Good

  
	
   

  	
  Title:

  	
  Secretary

  

 

 

	
   

  	
  METROPOLITAN LEGAL ADMINISTRATION SERVICES INC., an Ontario corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Chris Walker

  
	
   

  	
  Name:

  	
  Christopher Walker

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CA HOLDING, INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul A. Larkins

  
	
   

  	
  Name:

  	
  Paul A. Larkins

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CCL FINANCIAL INC., an Ontario corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Chris Walker

  
	
   

  	
  Name:

  	
  Christopher Walker

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SQUARE TWO FINANCIAL CANADA CORPORATION, a Nova Scotia corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Chris Walker

  
	
   

  	
  Name:

  	
  Christopher Walker

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SQUARETWO FINANCIAL COMMERCIAL FUNDING
  CORPORATION, a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas G. Good

  
	
   

  	
  Name:

  	
  Thomas G. Good

  
	
   

  	
  Title:

  	
  Secretary

  

 

 

EXHIBIT A

 

ACKNOWLEDGMENT

 

Reference is hereby made to the Intercreditor
Agreement, dated as of April 7, 2010 (as amended, restated, supplemented
or otherwise modified from time to time, the “Agreement”),
among the Agents referred to therein, to which this Acknowledgment is
attached.  All capitalized terms not
otherwise defined herein shall have the meanings assigned to such terms in the
Agreement when used herein.  The
undersigned, in its capacity as [Senior Agent] [Junior Agent] [Permitted
Additional Junior Liens Obligation Representative] [Additional Credit Facility
Agent] hereby acknowledges the terms and conditions of the Agreement and agrees
to be bound thereby.

 

	
   

  	
  SUCCESSOR [SENIOR AGENT][JUNIOR AGENT] [PERMITTED
  ADDITIONAL JUNIOR LIENS OBLIGATION REPRESENTATIVE] [ADDITIONAL CREDIT
  FACILITY AGENT]:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

Exhibit A - 1

 

EXHIBIT B

 

NOTICE
ADDRESSES

 

	
  If to Junior Agent:

  	
  U.S. BANK NATIONAL ASSOCIATION

  
	
   

  	
  Corporate Trust Services

  
	
   

  	
  950 17th Street

  
	
   

  	
  Denver, CO 80202

  
	
   

  	
  Attn: SquareTwo Administrator

  
	
   

  	
  Facsimile:

  
	
   

  	
  Email:

  
	
   

  	
   

  
	
  If to Senior Agent:

  	
  GMAC COMMERCIAL FINANCE LLC

  
	
   

  	
  Structured Finance Division

  
	
   

  	
  1290 Avenue of the Americas, 3rd Floor

  
	
   

  	
  New York, NY 10104

  
	
   

  	
  Attention:

  	
  Thomas J. Maiale

  
	
   

  	
  Facsimile:

  	
  (212) 884-7692

  
	
   

  	
  Email:

  	
  tmaiale@gmaccf.com

  
	
   

  	
   

  
	
  with copies to:

  	
  GMAC COMMERCIAL FINANCE LLC

  
	
   

  	
  Structured Finance Division

  
	
   

  	
  1290 Avenue of the Americas, 3rd Floor

  
	
   

  	
  New York, NY 10104

  
	
   

  	
  Attn: SFD Counsel

  
	
   

  	
  Facsimile:

  
	
   

  	
  Email:

  
	
   

  	
   

  
	
  with copies to:

  	
  HAHN & HESSEN LLP

  
	
   

  	
  488 Madison Avenue

  
	
   

  	
  New York, NY 10022

  
	
   

  	
  Attention:

  	
  Leonard Lee Podair

  
	
   

  	
  Facsimile:

  	
  (212) 478-7400

  
	
   

  	
  Email:

  	
  lpodair@hahnhessen.com

  
	
   

  	
   

  
	
  If to Grantors:

  	
  SQUARETWO FINANCIAL CORPORATION

  
	
   

  	
  4340 S. Monaco, Second Floor

  
	
   

  	
  Denver, Colorado 80237

  
	
   

  	
  Attention:

  	
  L. Heath Sampson and Thomas Good

  
	
   

  	
  Facsimile:

  	
  (303) 713-2509

  
	
   

  	
  Email:

  	
  hsampson@squaretwofinancial.com and

  
	
   

  	
  tgood@squaretwofinancial.com

  
	
   

  	
   

  
	
  with copies to:

  	
  KRG CAPITAL PARTNERS, L.L.C.

  
	
   

  	
  1515 Arapahoe Street, Tower One Suite 1500

  
	
   

  	
  Denver, Colorado 80202

  
	
   

  	
  Attention:

  	
  Mark M. King and

  
	
   

  	
   

  	
  Chris Bock

  
	
   

  	
  Facsimile:

  	
  (303) 390-5015

  
	
   

  	
  Email:

  	
  mking@krgcapital.com and

  
	
   

  	
  cbock@krgcapital.com

  

 

Exhibit B - 1

 

 

	
  and:

  	
  HOGAN & HARTSON LLP

  
	
   

  	
  1200 17th Street

  
	
   

  	
  Denver, CO 80202-5840

  
	
   

  	
  Attention:

  	
  George A. Hagerty, Esq.

  
	
   

  	
  Facsimile:

  	
  (303) 899-7333

  
	
   

  	
  Email:

  	
  gahagerty@hhlaw.com

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00181-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00181-of-00352.parquet"}]]