Document:

Exhibit 4.17

Exhibit 4.17

EXECUTION VERSION

INTERCREDITOR AND SUBORDINATION AGREEMENT

(Interactive Network First Lien/Second Lien)

This
INTERCREDITOR AND SUBORDINATION AGREEMENT (this “Agreement”), is dated as
of December 6, 2007, and entered into by and among:

1.

 INTERACTIVE
NETWORK, INC., a Nevada corporation (the “Issuer”), 

2.

EACH
SUBSIDIARY OF ISSUER THAT EXECUTES THIS AGREEMENT OR A JOINDER HERETO (each
an “Interactive Subsidiary” and collectively with the Issuer, the
“Obligors”), 

3.

THE
PERSONS LISTED ON SCHEDULE 1 AS THE INITIAL HOLDERS OF SENIOR LIEN NOTES
(the “Initial First Lien Holders”) that are party to the Senior Lien Note
Agreement (as defined below) and this Agreement, 

4.

ANDREW
B. CONRU TRUST AGREEMENT, ANDREW B. CONRU TRUSTEE, AND MAPSTEAD TRUST, CREATED
ON APRIL 16, 2002, LARS AND MARIN MAPSTEAD TRUSTEES, as the initial
“Holders” (the “Initial Second Lien Holders”) that are party to the
Second Lien Note Agreement (as defined below) 

5.

U.S.
BANK NATIONAL ASSOCIATION, not individually but solely in its capacity as
collateral agent for the Senior Lien Claimholders (as defined below), including
its successors and assigns from time to time (in such capacity, the “Senior
Lien Collateral Agent”), and 

6.

U.S.
BANK NATIONAL ASSOCIATION, not individually but solely in its capacity as
Agent for the Second Lien Claimholders (as defined below), including its
successors and assigns from time to time (in such capacity, the “Second Lien
Collateral Agent”).

RECITALS

A.

This
Agreement is being entered into in connection with:

(i)
the Securities Purchase Agreement (“Senior Lien Note Agreement”) of even
date herewith among the Issuer, the “Guarantors” defined in and party thereto
(herein the “Senior Lien Guarantors”), the “Subordinated Guarantors”
defined in and party thereto (herein the “Senior Lien Subordinated
Guarantors”), the Initial Holders as “Holders” defined in and party thereto,
and Senior Lien Collateral Agent, as “Administrative Agent” and “Collateral
Agent” defined therein and party thereto; and 

(ii)
the Sellers’ Securities Agreement (“Second Lien Note Agreement”) of even
date herewith among the Issuer, the “Senior Subordinated Guarantors” defined
therein and party thereto (herein the “Second Lien Guarantors”), the
“Junior Subordinated Guarantors” defined therein and party thereto (herein the
“Second Lien Subordinated Guarantors”), the Initial Second Lien Holders,
and Second Lien Collateral Agent, as “Administrative Agent” and “Collateral
Agent” defined therein and party thereto.

  

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B.

Pursuant
to Article XI of the Senior Lien Note Agreement (the “Senior Lien
Guaranty”), the Senior Lien Guarantors (and the Subordinated Guarantors)
have guarantied the full payment and performance of the Senior Lien Obligations
(as defined below).  For avoidance of doubt, the Subordinated Guarantors
are not parties to this Agreement.  

C.

Pursuant
to Article XI of the Second Lien Note Agreement (the “Second Lien
Guaranty”), the Second Lien Guarantors (and the Second Lien Subordinated
Guarantors) have guarantied the full payment and performance of the Second Lien
Obligations (as defined below).  For avoidance of doubt, the Second Lien
Subordinated Guarantors are not parties to this Agreement.  

D.

The
Obligations defined in the Senior Lien Note Agreement, including the obligations
of the Senior Lien Guarantors and the Senior Lien Subordinated Guarantors under
the Senior Lien Guaranty (collectively, the “Senior Lien Obligations”),
are secured by the liens and security interests granted under the Security
Documents defined in the Senior Lien Note Agreement (collectively herein, the
“Senior Lien Security Agreements”).  

E.

The
Obligations defined in the Second Lien Note Agreement, including the obligations
of the Second Lien Guarantors and Second Lien Subordinated Guarantors under the
Second Lien Guaranty (collectively, the “Second Lien Obligations”) are
secured by the liens and security interests granted under the Sellers’ Security
Documents defined in the Second Lien Note Agreement (collectively herein, the
“Second Lien Security Agreements”).  

F.

The
Initial First Lien Holders, and at any relevant time, the holders of Senior Lien
Obligations at such time and the Senior Lien Collateral Agent, in its capacity
as Administrative Agent and Collateral Agent under the Senior Lien Note
Agreement, and their successors and assigns, are collectively referred to as the
“Senior Lien Claimholders” and each without differentiation as a
“Senior Lien Claimholder.”  

G.

The
Initial Second Lien Holders, and at any relevant time, the holders of Second
Lien Obligations at such time, and the Second Lien Collateral Agent, in its
capacity as “Administrative Agent” and “Collateral Agent” under the Second Lien
Note Agreement, and their successors and assigns, are collectively referred to
as the “Second Lien Claimholders” and each without differentiation as a
“Second Lien Claimholder.” 

H.

The
Second Lien Claimholders are the sellers, and Issuer is the buyer, of certain
securities and other assets pursuant to the Various Acquisition Agreement.
 The proceeds of the Senior Lien Notes are being used to pay the cash
portion of the purchase price due Second Lien Claimholders as sellers under the
Various Acquisition Agreement, and the Second Lien Notes are being issued in
partial payment of the non-cash portion of the purchase price due to Second Lien
Claimholders as sellers under the Various Acquisition Agreement.  

I.

In
order to induce the Senior Lien Claimholders to purchase the securities offered
under the Senior Lien Note Agreement, the Second Lien Claimholders have agreed
to subordinate their right to payment under the Second Lien Note Documents (as
defined below) 

  

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and the enforcement
of their liens and security interests under the Second Lien Collateral Documents
to the first to occur of the prior payment in full in cash of the Senior Lien
Obligations or the occurrence of the Second Lien Maturity Date (defined below)
on the terms and conditions set forth in this Agreement. 

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

Section
1.

Definitions.

1.1

Defined
Terms.  Capitalized terms used but not defined herein shall have the
meanings given them in the Senior Lien Note Agreement.  As used in this
Agreement, the following terms shall have the following meanings:

“Agreement”
means this Intercreditor and Subordination Agreement, as amended, renewed,
extended, supplemented or otherwise modified from time to time in accordance
with the terms hereof.

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

“Collateral”
means all of the Senior Lien Collateral and Second Lien Collateral.  

"Control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.  "Controlling"
and "Controlled" have meanings correlative thereto.

"Control
Collateral" means any Collateral consisting of any Certificated Security,
Instrument, Investment Property, Deposit Accounts (each as defined in the
Uniform Commercial Code), cash and any other Collateral as to which a first
priority Lien shall or may be perfected through possession or control by the
secured party or any agent therefor.

"Controlled
Account" means those certain Deposit Accounts or Security Accounts (each as
defined in the Uniform Commercial Code) of any Grantor subject to Liens under
the terms of the Senior Lien Collateral Documents and the Second Lien Collateral
Documents.

“DIP
Financing” has the meaning assigned to that term in Section 6.2 hereof.

“Discharge
of Senior Lien Obligations” means the Senior Lien Obligations being Paid in
Full, notice of which will be given pursuant to Section 1.4.

“Disposition”
has the meaning set forth in Section 5.1(a)(ii).

  

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“Family
Group” with respect to any Second Lien Claimholder, means the spouse,
siblings and descendants (whether or not adopted) of any such Second Lien
Claimholder or if such Second Lien Claimholder is a limited liability company, a
member of such Second Lien Claimholder and any trust, family limited partnership
or limited liability company that is and remains solely for the benefit of such
Second Lien Claimholder and/or such Second Lien Claimholder’s spouse, siblings
and/or descendants.

“Grantors”
means the Issuer and each Guarantor that has executed and delivered, or may from
time to time hereafter execute and deliver, a Senior Lien Collateral Document or
a Second Lien Collateral Document.

“Guarantor”
means each subsidiary or affiliate of Issuer that executes the Senior Lien Note
Agreement or a joinder thereto as a Senior Lien Guarantor thereunder and the
Second Lien Note Agreement or a joinder thereto as a Second Lien Guarantor.

“Insolvency
Proceeding” means as to any Obligor (i) any proceeding, voluntary case or
involuntary case seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for any such Obligor or for any substantial
part of its property or (ii) shall make a general assignment for the benefit of
creditors.

“Issuer”
has the meaning assigned to that term in the Preamble hereto.

“New
Senior Lien Collateral Agent” has the meaning assigned to that term in
Section 5.6 hereof.  

“Obligors”
has the meaning assigned to that term in the Preamble hereto.  

“Paid
in Full” and “Payment in Full” each mean the occurrence of the
indefeasible payment in full in cash and performance of all Senior Lien
Obligations.  For avoidance of doubt, any termination of rights and
remedies of Senior Lien Claimholders that is provided for in this Agreement upon
Payment in Full shall be subject to the continuing effectiveness of Section 8.18
of this Agreement. 

“Permitted
Refinancing” means a Refinancing that does not result in an increase in the
amount of Senior Lien Obligations by more than ten percent (10%) over the lowest
intermediate balance of the Senior Lien Obligations that is reached at any time
prior to such Refinancing.

“Recovery”
has the meaning set forth in Section 8.18 hereof.

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

“Second
Lien Claimholders” has the meaning set forth in the Recitals.

  

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

“Second
Lien Collateral Agent” has the meaning set forth in the Recitals hereto.

“Second
Lien Collateral Documents” means the Second Lien Security Agreements and any
other mortgage, lockbox agreement, account control agreement, landlord waiver or
bailee’s letter or similar agreement or arrangement, or other agreement,
document or instrument pursuant to which a Lien is granted securing any Second
Lien Obligations or under which rights or remedies with respect to such Liens
are governed.

“Second
Lien Guaranty” has the meaning assigned to that term in the Recitals
hereto.

“Second
Lien Maturity Date” means, for purposes of this Agreement, the fourth
anniversary of the Closing Date (it being understood that the occurrence for any
reason of the “Final Maturity Date” as defined in the Second Lien Note Agreement
prior to the fourth anniversary of the Closing Date shall not alter the Second
Lien Maturity Date as such definition is used in this Agreement).

“Second
Lien Note Agreement” has the meaning set forth in the Recitals.

“Second
Lien Note Documents” means the Second Lien Note Agreement (including the
Second Lien Guaranty), the Second Lien Notes, the Second Lien Collateral
Documents and the other agreements, documents and
instruments providing for or evidencing any other Second Lien Obligation, and
any other document or instrument executed or delivered at any time in connection
with any Second Lien Obligations, as the same may be modified from time to time
pursuant hereto.  

“Second
Lien Notes” shall mean the “Sellers’ Secured Notes” defined in the Second
Lien Note Agreement.  

“Second
Lien Obligations” has the meaning set forth in the Recitals.  

“Second
Lien Security Agreements” has the meaning assigned to that term in the
Recitals hereto.  

“Senior
Lien Claimholders” has the meaning set forth in the Recitals.

“Senior
Lien Collateral Agent” has the meaning set forth in the Recitals hereto.

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

“Senior
Lien Collateral Documents” means, collectively, the Senior Lien Security
Agreements and any other mortgage, lockbox agreement, account control agreement,
landlord waiver or bailee’s letter or similar agreement or arrangement, or other
agreement, document or 

  

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instrument
pursuant to which a Lien is granted securing any Senior Lien Obligations or
under which rights or remedies with respect to such Liens are governed.

“Senior
Lien Note Agreement” has the meaning set forth in the Recitals.  

“Senior
Lien Note Documents” means the Senior Lien Note Agreement (including the
Senior Lien Guaranty), the Senior Lien Notes, the Senior Lien Collateral
Documents, and each of the other agreements, documents and instruments providing
for or evidencing any other Senior Lien Obligation, and any other document or
instrument executed or delivered at any time in connection with any Senior Lien
Obligations, including any intercreditor or joinder agreement among holders of
Senior Lien Obligations, to the extent such are effective at the relevant time,
as each may be modified or Refinanced from time to time, provided that any such
modification or Refinancing does not increase the principal amount thereof
beyond the aggregate principal amount of Senior Lien Obligations as of the date
hereof.

“Senior
Lien Guaranty” has the meaning assigned to that term in the Recitals
hereto.

“Senior
Lien Obligations” has the meaning assigned to that term in the Recitals
hereto.  

“Senior
Lien Security Agreements” has the meaning assigned to that term in the
Recitals hereto.  

“Subordinated
Guarantor” means each subsidiary or affiliate of Penthouse Media Group Inc.
that executes the Senior Lien Note Agreement or a joinder thereto as a Senior
Lien Subordinated Guarantor thereunder and the Second Lien Note Agreement or a
joinder thereto as a Second Lien Subordinated Guarantor.

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

1.2

Terms
Generally.  The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined.  Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms.  The words “include”, “includes” and “including” shall be
deemed to be followed by the phrase “without limitation.” The word “will” shall
be construed to have the same meaning and effect as the word “shall”.
 Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified, (b) any
reference herein to any Person shall be construed to include such Person’s
successors and assigns, (c) the words “herein”, “hereof” and “hereunder”,
and words of similar import, shall be construed to refer to this Agreement in
its entirety and not to any particular provision hereof, (d) all
references herein to Exhibits or Sections shall be construed to refer to
Exhibits or Sections of this Agreement, and (e) the words “asset” and
“property” shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights.

1.3

Relationship
Among Claimholders in each Tranche.  The terms and provisions of this
Agreement shall not govern the relationship of the Senior Lien Claimholders as
among 

  

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themselves
or the relationship of the Second Lien Claimholders as among themselves, which
relationship shall be governed by the provisions of the Senior Lien Note
Documents or the Second Lien Note Documents, as applicable.  

1.4

Notice
of Payment in Full.  Promptly, and in every event within three business
days, after the receipt by Senior Lien Claimholders of Payment in Full of the
Senior Lien Obligations, the Senior Lien Claim holders shall instruct the Senior
Lien Collateral Agent to give written notice to the Second Lien Collateral Agent
and the Control Agent that the Discharge of First Lien Obligations has
occurred.

1.5

Agents’
Authority to Execute Agreement.  The Initial Senior Lien Holders party
hereto hereby represent and warrant that this Agreement has been approved and
executed by the “Required Holders” as defined in the Senior Lien Note Agreement
and that such “Required Holders” further authorized the Senior Lien Collateral
Agent to enter into and deliver this Agreement.  The Initial Second Lien
Holders party hereto hereby represent and warrant that this Agreement has been
approved and executed by the “Required Holders” as defined in the Second Lien
Note Agreement and that such “Required Holders” further authorized the Second
Interactive Agent to enter into and deliver this Agreement.  

1.6

Continuing
Effectiveness.  For avoidance of doubt, the occurrence of the Second
Lien Maturity Date shall not have any impact on the agreements of the parties
hereto set forth in this Section 1.

Section
2.

Lien
Priorities.

2.1

Relative
Priorities.  Notwithstanding the date, manner or order of grant,
attachment or perfection of any Liens securing the Second Lien Obligations
granted on the Collateral, or of any Liens securing the Senior Lien Obligations
granted on the Collateral and notwithstanding any provision of the UCC or any
other applicable law or the provisions of the Second Lien Note Documents or any
other circumstance whatsoever (including, without limitation, the time, order or
method of grant, attachment, recording or perfection of any financing statements
or other security interests, assignments, pledges, deeds, mortgages and other
liens, charges or encumbrances or any defect or deficiency or alleged defect or
deficiency in any of the foregoing, or the fact that any such Liens securing
Senior Lien Obligations are at any time (x) subordinated to any Lien securing
any obligation of any Person or to any Indebtedness in favor of any Person or
(y) otherwise subordinated, voided, avoided, invalidated or lapsed), the Second
Lien Claimholders hereby agree that:  (a) any Lien on the Collateral
securing any Senior Lien Obligations now or hereafter held by or on behalf of
the Senior Lien Collateral Agent or any Senior Lien Claimholders or any agent or
trustee therefor, regardless of how acquired, whether by grant, possession,
statute, operation of law, subrogation or otherwise, shall be senior in all
respects and prior to any Lien on the Collateral securing any Second Lien
Obligations; and (b) any Lien on the Collateral now or hereafter held by
or on behalf of  any Second Lien Claimholder or any agent or trustee
therefor, regardless of how acquired, whether by grant, possession, statute,
operation of law, subrogation or otherwise, shall be junior and subordinate in
all respects to all Liens on the Collateral securing any Senior Lien
Obligations.  All Liens on the Collateral securing any Senior Lien
Obligations shall be and remain senior in all respects and prior to all Liens on
the Collateral securing any Second Lien Obligations for all 

  

7

 

purposes,
regardless of the time, order or method of grant, attachment, recording or
perfection of any financing statements or other security interests, assignments,
pledges, deeds, mortgages and other liens, charges or encumbrances or any defect
or deficiency or alleged defect or deficiency in any of the foregoing, or the
fact that any such Liens in favor of any Senior Lien Collateral Agent are (x)
subordinated to any Lien securing any obligation of any Person or to any
Indebtedness in favor of any Person or (y) otherwise subordinated, voided,
avoided, invalidated or lapsed.  

2.2

Prohibition
on Contesting Liens.  Each Second Lien Claimholder, and the Senior Lien
Collateral Agent, for itself and on behalf of each Senior Lien Claimholder,
agrees that it shall not (and hereby waives any right to) (and regardless of
whether the Second Lien Maturity Date has occurred) contest, or support any
other Person in contesting, in any proceeding (including any Insolvency
Proceeding), the priority, validity or enforceability of a Lien held by or on
behalf of any of the Senior Lien Claimholders in the Senior Lien Collateral or
by or on behalf of any of the Second Lien Claimholders in the Second Lien
Collateral, as the case may be; provided that nothing in this Agreement
shall be construed to prevent or impair the rights of the Senior Lien Collateral
Agent or any Senior Lien Claimholder to enforce this Agreement, including the
priority of the Liens securing the Senior Lien Obligations as provided in
Sections 2.1 and 3, and release of the Liens encumbering Second Lien Collateral
as provided in Section 5.

2.3

No
New Liens.  So long as the Discharge of Senior Lien Obligations has not
occurred, the parties hereto agree that the Issuer shall not, and shall not
permit any Guarantor to, grant or permit any additional Liens on any asset or
property to secure any Second Lien Obligation unless it has granted a Lien on
such asset or property to secure the Senior Lien Obligations.  To the
extent that the foregoing provisions are not complied with for any reason,
without limiting any other rights and remedies available to the Senior Lien
Collateral Agent and/or the Senior Lien Claimholders, the Second Lien
Claimholders agree that any amounts received by or distributed to any of them
pursuant to or as a result of Liens granted in contravention of this Section 2.3
shall be subject to Section 4.3.

2.4

Continuing
Effectiveness.  For avoidance of doubt, the occurrence of the Second
Lien Maturity Date shall not have any impact on the agreements of the parties
hereto set forth in this Section 2.

Section
3.

Enforcement.

3.1

Exercise
of Remedies.  

(a)

Whether
or not any Insolvency Proceeding has been commenced by or against the Issuer or
any other Grantor:

(i)

Until
the first to occur of either the Discharge of Senior Lien Obligations or the
Second Lien Maturity Date, but subject to the limited rights of the Second Lien
Claimholders under 4.1 to make demand for and receive payment of interest in the
specific circumstances provided in that Section, and the Second Lien
Claimholders’ rights under Section 3.3, the Second Lien Claimholders will not
make any demand for or accept any payment under the Second Lien Notes or
exercise or seek to 

  

8

 

exercise
any other rights or remedies in respect of the Second Lien Obligations
(including set-off) under any Second Lien Note Documents (including, without
limitation, the exercise of any right under any Second Lien Collateral Document
to which a Second Lien Claimholder is a party) or institute any action or
proceeding with respect to such rights or remedies (including any action of
foreclosure) (for avoidance of doubt, no such action may be taken by or on
behalf of any Second Lien Claimholders against any of Issuer, any Second Lien
Guarantor or any Second Lien Subordinated Guarantor, nor may any payment be
received therefrom (except as permitted in Section 4.1 of this Agreement) until
the Discharge of Senior Lien Obligations has occurred); 

(ii)

Except
to the extent permitted in Section 6.5 of this Agreement, no Second Lien
Claimholder will at any time (regardless of whether the Second Lien Maturity
Date has occurred) (a) contest, protest or object to any enforcement or
foreclosure proceeding or action brought by the Senior Lien Collateral Agent or
any Senior Lien Claimholder or any other exercise by the Senior Lien Collateral
Agent or any Senior Lien Claimholder, of any rights and remedies under the
Senior Lien Note Documents or otherwise, or (b) object to the forbearance by the
Senior Lien Collateral Agent or the Senior Lien Claimholders from bringing or
pursuing any enforcement or foreclosure proceeding or action or any other
exercise of any rights or remedies against the Issuer or the Guarantor, in each
case so long as the respective interests of the Second Lien Claimholders attach
to the proceeds of foreclosure proceedings against the Collateral, subject to
the relative priorities described in Section 2 hereof; and

(iii)

Until
the first to occur of either the Discharge of Senior Lien Obligations or the
Second Lien Maturity Date, but subject to the limited rights of the Second Lien
Claimholders under 4.1 to make demand for and receive payment of interest in the
specific circumstances provided in that Section, and the Second Lien
Claimholders’ rights under Section 3.3, the Senior Lien Collateral Agent and the
Senior Lien Claimholders shall have the exclusive right to enforce rights,
exercise remedies (including set-off and the right to credit bid their debt) and
make determinations regarding the release, disposition or restrictions with
respect to the Collateral without any consultation with or the consent of the
Second Lien Claimholder; provided, however, that, regardless of whether
the Second Lien Maturity Date has occurred, (A) in any Insolvency
Proceeding commenced by or against the Issuer or any other Grantor, any Second
Lien Claimholder may file a proof of claim or statement of interest with respect
to the Second Lien Obligations, (B) any Second Lien Claimholder may take
any action (not adverse to the prior Liens on the Collateral securing the Senior
Lien Obligations, or the rights of the Senior Lien Collateral Agent or any
Senior Lien Claimholders to exercise remedies in respect thereof and not
inconsistent with the term of this Agreement) in order to preserve or protect
its Lien on the Collateral, (C) the Second Lien Claimholders shall be
entitled to file any necessary responsive or defensive pleadings in opposition
to any motion, claim, adversary proceeding or other pleading made by any Person
objecting to or otherwise seeking the disallowance of the claims of the Second
Lien Claimholders, including without limitation any claims secured by the
Collateral, if any, in each case in accordance with the terms of this Agreement,
(D) the Second Lien Claimholders shall be entitled to file any pleadings,
objections, motions or agreements which assert rights or interests available to
unsecured creditors of the Grantors arising 

  

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under
either Bankruptcy Law or applicable non-bankruptcy law, in each case in
accordance with the terms of this Agreement, and (E) the Second Lien
Claimholders shall be entitled to file any proof of claim and other filings and
make any arguments and motions that are, in each case, in accordance with the
terms of this Agreement, with respect to the Second Lien Obligations and the
Collateral.  

(b)

In
exercising rights and remedies with respect to the Collateral at any time, the
Senior Lien Collateral Agent and the Senior Lien Claimholders may at any time
(regardless of whether the Second Lien Maturity Date has occurred) enforce the
provisions of the Senior Lien Note Documents and exercise remedies thereunder,
all in such order and in such manner as they may determine in the exercise of
their sole discretion.  Such exercise and enforcement shall include the
rights of an agent appointed by them to sell or otherwise dispose of Collateral
upon foreclosure, to incur expenses in connection with such sale or disposition,
and to exercise all the rights and remedies of a secured creditor under the
Uniform Commercial Code of any applicable jurisdiction and of a secured creditor
under Bankruptcy Laws of any applicable jurisdiction.

(c)

Until
the first to occur of either the Discharge of Senior Lien Obligations or the
Second Lien Maturity Date, but subject to the limited rights of the Second Lien
Claimholders under 4.1 to make demand for and receive payment of interest in the
specific circumstances provided in that Section, and the Second Lien
Claimholders’ rights under Section 3.3, and whether or not any Insolvency
Proceeding has been commenced by or against the Issuer or any other Grantor, the
Second Lien Claimholders agree that they will not take or receive any Collateral
or any proceeds of Collateral in connection with the exercise of any right or
remedy (including set-off) with respect to any Collateral.  Without
limiting the generality of the foregoing, until the first to occur of either the
Discharge of Senior Lien Obligations or the Second Lien Maturity Date, but
subject to the limited rights of the Second Lien Claimholders under 4.1 to make
demand for and receive payment of interest in the specific circumstances
provided in that Section, and the Second Lien Claimholders’ rights under Section
3.3, the sole right of the Second Lien Claimholders with respect to the
Collateral is to hold a Lien on the Collateral pursuant to the Second Lien
Collateral Documents for the period and to the extent granted therein and to
receive a share of the proceeds thereof, if any, after the Discharge of the
Senior Lien Obligations has occurred and otherwise in accordance with the terms
of the Second Lien Note Documents and applicable law.

(d)

Without
waiving any of their rights to at any time take the actions permitted in Section
6.5 of this Agreement, the Second Lien Claimholders, (i) agree that both before
and after the Second Lien Maturity Date, the Second Lien Claimholders will not
take any action that would hinder any current exercise of remedies under the
Senior Lien Note Documents or that is otherwise prohibited hereunder, including
any sale, lease, exchange, transfer or other disposition of the Collateral,
whether by foreclosure or otherwise, and (ii) hereby waive any and all
rights they may have as a junior lien creditor or otherwise to object to the
manner in which the Senior Lien Collateral Agent or the Senior Lien Claimholders
seek to enforce or collect the Senior Lien Obligations or the Liens granted in
any of the Senior Lien Collateral, regardless of whether any action or 

  

10

 

failure
to act by or on behalf of the Senior Lien Collateral Agent or Senior Lien
Claimholders is adverse to the interest of the Second Lien Claimholders.

(e)

All
enforcement actions of the Senior Lien Claimholders taken by them or on their
behalf shall be subject to the requirement that such enforcement action on the
part of the Senior Lien Claimholders is commercially reasonable under the
circumstances and in compliance with applicable law.  All actions of the
Senior Lien Claimholders shall be presumed to be commercially reasonable for all
purposes hereunder unless and until a contrary determination is made by final,
non-appealable order of a court of competent jurisdiction.

(f)

Each
Second Lien Claimholder hereby acknowledges and agrees that no covenant,
agreement or restriction contained in the Second Lien Collateral Documents or
any other Second Lien Note Document shall be deemed to restrict in any way the
rights and remedies of the Senior Lien Collateral Agent or the Senior Lien
Claimholders with respect to the Collateral as set forth in this Agreement and
the Senior Lien Note Documents.

(g)

The
Senior Lien Claimholders acknowledge and agree that, if any portion of the
principal amount of Second Lien Obligations remains due, owing and unpaid by the
Issuer after the Second Line Maturity Date, then subject to the terms of this
Agreement, including without limitation the continuing agreements of the Second
Lien Claimholders with respect to (i) the priority of Liens set forth in Section
2 of this Agreement and (ii) the subordination of right of payment and turnover
of unauthorized payments set forth in Section 4 of this Agreement, then from and
after such Second Lien Maturity Date, the Second Lien Claimholders may take any
enforcement action available to them by contract, at law or in equity, including
without limitation commencement of an involuntary bankruptcy case or other
Insolvency Proceeding and prosecute the same to completion, provided that (x)
such action is not in violation of this Agreement and (y) until the Discharge of
First Lien Obligations, any proceeds of the prosecution or settlement of such
action or the enforcement of any judgment resulting therefrom, or other payments
or transfers received on account of the Second Lien Obligations, are turned over
to the First Lien Claimholders pursuant to this Agreement.  

3.2

Cooperation.
 Until the first to occur of either the Discharge of Senior Lien
Obligations or the Second Lien Maturity Date, but subject to the limited rights
of the Second Lien Claimholders under 4.1 to make demand for and receive payment
of interest in the specific circumstances provided in that Section, and the
Second Lien Claimholders’ rights under Section 3.3, the Second Lien Claimholders
agree that they will not commence, or join with any Person in commencing, any
enforcement, collection, execution, levy or foreclosure action or proceeding
(including, without limitation, any Insolvency Proceeding) with respect to any
Lien held by them under the Second Lien Collateral Documents or any other Second
Lien Note Document or otherwise; for avoidance of doubt, this sentence shall
have no force or effect after first to occur of either the Discharge of Senior
Lien Obligations or the Second Lien Maturity Date.  Following the Discharge
of the Senior Lien Obligations, Senior Lien Collateral Agent shall reasonably
promptly execute documents and take other steps that Senior Lien Collateral
Agent determines to be reasonably necessary, at the expense of the Second Lien
Claimholders, to transfer to the 

  

11

Second
Lien Claimholders all deposit account control agreements and other similar
Senior Lien Collateral Documents in which Second Lien Claimholders have a
residual interest for continuing perfection of heretofore shared Liens.
 

3.3

Second
Lien Claimholder Right to Declare Default and Accelerate.  Strictly
subject to the restrictions against enforcement action imposed upon Second Lien
Claimholders in this Section 3 or elsewhere in this Agreement, Senior Lien
Claimholders acknowledge and agree that, whether before or after the Second Lien
Maturity Date and whether or not the Discharge of Senior Lien Obligations has
occurred, nothing set forth in this Agreement is intended to prohibit the Second
Lien Claimholders from (i) declaring the occurrence of, and notifying Issuer,
any Second Lien Guarantor or any Second Lien Subordinated Guarantor of the
occurrence of, an “Event of Default” under the Second Lien Note Documents and
(ii) accelerating the Second Lien Obligations in response to such Event of
Default.  

3.4

Reciprocal
Delivery of Notices and Demands.  Senior Lien Claimholders and Second
Lien Claimholders each hereby agree that any formal written (i) notice of the
occurrence and continuance of a “Default” or “Event of Default” under the Senior
Lien Note Documents or the Second Lien Note Documents, as applicable, (ii)
demand for payment or performance under the under the Senior Lien Note Documents
or the Second Lien Note Documents, as applicable, (iii) forbearance in respect
of a “Default” or “Event of Default” under the Senior Lien Note Documents or the
Second Lien Note Documents, as applicable, or (iv) waiver of a “Default” or
“Event of Default” under the Senior Lien Note Documents or the Second Lien Note
Documents, as applicable, that is delivered to the Issuer, any Guarantor or any
Subordinated Guarantor shall also be substantially concurrently delivered to the
Senior Lien Collateral Agent and the Second Lien Collateral Agent.  For
avoidance of doubt, (x) the failure of Senior Lien Claimholders or Second Lien
Claimholders, as applicable, to make such substantially concurrent delivery to
the Senior Lien Collateral Agent and the Second Lien Collateral Agent shall not
invalidate such writing as to the Issuer, any Guarantor or any Subordinated
Guarantor and (y) nothing set forth herein is intended to authorize the making
of any demand by the Second Lien Claimholders for payment or performance that is
not otherwise expressly permitted pursuant to this Agreement.

Section
4.

Payment
Subordination.

4.1

Subordination
of Payment of Second Lien Obligations..   Each Second Lien
Claimholder hereby agrees, in each case with respect to each Second Lien Note or
other Second Lien Obligation now or hereafter held by such Second Lien
Claimholder, that until the Discharge of the Senior Lien Obligations has
occurred (and regardless of whether the Second Lien Maturity Date has
occurred):

(a)

(i)
No principal payments (whether or not scheduled) may be made by or on behalf of
Issuer or any Guarantor, and no such principal payments if made in contravention
hereof shall be accepted by any Second Lien Claimholder, in respect of the
Second Lien Obligations, whether or not such Second Lien Obligations have become
due and payable for any reason whatsoever and regardless of the source of such
payments, and (ii) any principal payments so received by or for the benefit of a
Second Lien Claimholder shall be immediately turned over to the Senior Lien
Collateral Agent pursuant to Section 4.3, below.  Each Second Lien
Claimholder further agrees that any  

  

12

principal
payments received by or for the benefit of a Second Lien Claimholder in respect
of such Claimholder’s Second Lien Obligations (both before and after maturity
thereof) in any manner and from any source whatsoever shall be conclusively
presumed to constitute Collateral or proceeds of Collateral.  

(b)

Until
Second Lien Collateral Agent is notified in writing by the Senior Lien
Collateral Agent of the occurrence and continuance of an Event of Default under
the Senior Lien Note Agreement, scheduled interest payments and scheduled fees
due on the Second Lien Notes or under the Second Lien Note Documents may be paid
by Issuer in the ordinary course of business in cash, and Second Lien
Claimholders are authorized to receive and retain, current interest and fees due
on the principal amount of the Second Lien Notes pursuant to the Second Lien
Notes and Second Lien Note Agreement in the form in effect on the date first set
forth above.  For avoidance of doubt, no interest or fee may be paid by or
on behalf of Issuer, any Second Lien Guarantor or any Second Lien Subordinated
Guarantor, or received by or for the benefit of any Second Lien Claimholder, on
account of any Second Lien Obligation after written notice is delivered to
Second Lien Collateral Agent by Senior Lien Collateral Agent that an Event of
Default has occurred under the Senior Lien Note Agreement and while such Event
of Default is continuing.  

(c)

In
the event of a default in any obligation to pay cash interest to a Second Lien
Claimholder when permitted pursuant to this Section 4.1, and notwithstanding
anything to the contrary set forth in this Agreement, but subject in all other
respects to the terms of this Agreement, including the turnover provisions set
forth in Section 4.3, any Second Lien Claimholder may, upon written notice of
its intention to do so delivered to the Senior Lien Collateral Agent five
Business Days prior to taking any action, declare the occurrence of a default
under the Second Lien Note Documents, make written demand to the Issuer, any
Second Lien Guarantor or any Second Lien Subordinated Guarantor for payment of
such interest thereby and if such demand to pay interest is not timely satisfied
then such Second Lien Claimholder may sue Issuer, any Second Lien Guarantor or
any Second Lien Subordinated Guarantor only for such unpaid interest (but until
the Second Lien Maturity Date shall neither take any judicial or non-judicial
action to enforce any lien securing such obligation to pay interest, commence an
Insolvency Proceeding, nor sue for the principal balance due on the Second Lien
Notes).  

4.2

Application
of Proceeds and Payments.  

(a)

So
long as the Discharge of Senior Lien Obligations has not occurred (and
regardless of whether the Second Lien Maturity Date has occurred), any
Collateral or proceeds thereof received by the Senior Lien Collateral Agent in
connection with the sale or other disposition of, or collection on, such
Collateral upon the exercise of remedies, shall be applied by the Senior Lien
Collateral Agent to the Senior Lien Obligations in such order as specified in
the relevant Senior Lien Note Documents.  Upon the Discharge of the Senior
Lien Obligations, the Senior Lien Collateral Agent shall deliver to the Second
Lien Claimholders any proceeds of Collateral held by the Senior Lien Collateral
Agent in the same form as received, with any necessary endorsements or as a
court of competent jurisdiction may otherwise direct to be applied by the Second
Lien 

 

  

13

 

 Claimholders
to the Second Lien Obligations in such order as specified in the relevant Second
Lien Collateral Documents.

(b)

In
the event of any Insolvency Proceeding involving the Issuer or any Guarantor
(and regardless of whether the Second Lien Maturity Date has occurred), all
Senior Lien Obligations shall first be Paid in Full in cash before any payments
or other distributions, whether in cash, securities or other property, shall be
made to the Second Lien Claimholders on account of any Second Lien Obligations.
 Any amounts that would otherwise be paid to the Second Lien Claimholders
but for the provisions of this Section 4.2(b) shall instead be paid to the
Senior Lien Claimholders until Discharge of Senior Lien Obligations has
occurred, and any amounts received by the Second Lien Claimholders in
contravention of the provisions of this Section 4.2(b) shall be subject to the
turnover provisions of Section 4.3.    

4.3

Authorization
of Receipt of Funds by the Agent Under the Collateral Documents; Turnover of
Collections on Collateral.  Subject to Section 4.1 of this Agreement,
the Senior Lien Collateral Agent is authorized to receive for the benefit of the
Senior Lien Claimholders any funds distributed to the Second Lien Claimholders
under the Collateral Documents or in any Insolvency Proceeding, and to make
further distributions of such funds to the Senior Lien Claimholders according to
the provisions of the Senior Lien Note Documents.  Until the Discharge of
Senior Lien Obligations (and regardless of whether the Second Lien Maturity Date
has occurred), any Collateral or proceeds thereof received by the Second Lien
Claimholders or any one of them in connection with the exercise (including
pursuant to Section 3 after the Second Lien Maturity Date or Section 4.1 of this
Agreement) of any right or remedy (including set-off) relating to the
Collateral, both before and after commencement of any Insolvency Proceeding and
including specifically any principal payments made for any reason whatsoever or
any distribution on account of any proof of claim or interest of any Second Lien
Claimholders in any Insolvency Proceeding, in contravention of this Agreement
shall be segregated and held in trust and forthwith paid over to the Senior Lien
Collateral Agent for the benefit of the Senior Lien Claimholders in the same
form as received, with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct.  The Senior Lien Collateral Agent is
hereby authorized to make any such endorsements as agent for any such Second
Lien Claimholder(s).  This authorization is coupled with an interest and is
irrevocable until such time as this Agreement is terminated in accordance with
its terms.  For avoidance of doubt, (i) interest paid in kind on the Second
Lien Obligations and interest paid in cash on the Second Lien Obligations as
permitted by Section 4.1, shall not be subject to turn over pursuant to this
Section and (ii) any amounts received by Second Lien Claimholders on account of
the Second Lien Obligations (x) after the Second Lien Maturity Date and (y)
before the Discharge of Senior Lien Obligations must be turned over to the
Senior Lien Claimholders pursuant to this Agreement.  

Section
5.

Other
Agreements.

 

5.1

Releases.

(a)

If,
in connection with:

  

14

 

(i)

the
exercise of any of the Senior Lien Collateral Agent’s remedies in respect of the
Collateral provided for in Section 3.1, including any sale, lease, exchange,
transfer or other disposition of any such Collateral; or

(ii)

any
sale, lease, exchange, transfer or other disposition (collectively, a
“Disposition”) of any Collateral permitted under the terms of the Senior
Lien Note Documents (whether or not an event of default thereunder, and as
defined therein, has occurred and is continuing),

and
regardless of whether Second Lien Claimholders are at such time permitted to
take independent action under Section 4.1 of this Agreement, the Senior Lien
Collateral Agent, for itself or on behalf of any of the Senior Lien
Claimholders, releases any of its Liens on any part of the Collateral, or
releases any Guarantor from its obligations under its guaranty of the Senior
Lien Obligations, in each case other than in connection with the Discharge of
Senior Lien Obligations, then the Liens, if any, of the Second Lien Claimholders
on such Collateral, including real property Collateral, and the obligations of
such Guarantor under its guaranty of the Second Lien Obligations, shall be
automatically, unconditionally and simultaneously released and any such Second
Lien Claimholders, promptly shall execute and deliver to the Senior Lien
Collateral Agent or Issuer or Guarantor such termination statements,
reconveyances of mortgage, releases and other documents as the Senior Lien
Collateral Agent or Issuer or such Guarantor may request to effectively confirm
such release.

(b)

Until
the Discharge of Senior Lien Obligations occurs, and regardless of whether
Second Lien Claimholders are at such time permitted to take independent action
under Section 4.1 of this Agreement (and regardless of whether the Second Lien
Maturity Date has occurred), the Second Lien Claimholders hereby irrevocably
constitute and appoint the Senior Lien Collateral Agent and any officer or agent
of the Senior Lien Collateral Agent, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of the Second Lien Claimholders or such holder or in the
Senior Lien Collateral Agent’s own name, from time to time in the Senior Lien
Collateral Agent’s discretion, for the purpose of carrying out the terms of this
Section 5.1, to take any and all appropriate action and to execute any and all
documents and instruments, including without limitation reconveyances of
Mortgages, which may be necessary to accomplish the purposes of this Section
5.1, including any endorsements or other instruments of transfer or release.
 This power of attorney is coupled with an interest and is irrevocable.

(c)

Until
the Discharge of the Senior Lien Obligations occurs (and regardless of whether
the Second Lien Maturity Date has occurred), the Second Lien Note Documents
shall be deemed for all purposes to permit any Disposition of Collateral,
including all or substantially all of the Collateral, so long as the proceeds of
such Collateral are used either for working capital of the Issuer and its
Guarantor or is used to pay or prepay the Senior Lien Obligations.

(d)

Until
the Discharge of Senior Lien Obligations occurs, to the extent that the Senior
Lien Claimholders (i) have released any Lien on Collateral or any Grantor
from its obligation under its guaranty and any such Liens or guaranty are later
reinstated 

  

15

 

or
(ii) obtain any new senior priority liens or additional guarantees
from Grantors, then the Second Lien Claimholders shall be granted a second
priority lien on any such Collateral and an additional guaranty, as the case may
be.

(e)

Upon
the occurrence of the Second Lien Maturity Date, Second Lien Claimholders shall
not have any obligation to release Liens against the Collateral as provided in
this Section 5.1 unless such release (i) occurs pursuant to operation of
applicable law in respect of any foreclosure sale or sale occurring pursuant to
court order in any Insolvency Proceeding, (ii) is permitted pursuant to the
Second Lien Credit Documents, or (iii) is consented to by the Second Lien
Claimholders.

(f)

Senior
Lien Claimholders agree that all actions taken by them in respect of a
disposition of Collateral, whether consensually or by foreclosure, shall be
subject to the commercial reasonableness requirement of Section 3.1(e) of this
Agreement.

5.2

Insurance.
 Unless and until the Discharge of Senior Lien Obligations has occurred,
the Senior Lien Collateral Agent and the Senior Lien Claimholders shall have the
sole and exclusive right, subject to the rights of the Grantors under the Senior
Lien Note Documents, to adjust settlement for any insurance policy covering the
Collateral in the event of any loss thereunder and to approve any award granted
in any condemnation or similar proceeding (or any deed in lieu of condemnation)
affecting the Collateral.  Unless and until the Discharge of Senior Lien
Obligations has occurred, and subject to the rights of the Grantors under the
Senior Lien Collateral Documents, all proceeds of any such policy and any such
award (or any payments with respect to a deed in lieu of condemnation) if in
respect to the Collateral shall be paid to the Senior Lien Collateral Agent for
the benefit of the Senior Lien Claimholders pursuant to the terms of the Senior
Lien Note Documents (including, without limitation, for purposes of cash
collateralization of commitments, letters of credit and hedging agreements, in
each case in an amount reasonably satisfactory to the Senior Lien Collateral
Agent) and thereafter, to the extent no Senior Lien Obligations are outstanding,
and subject to the rights of the Grantors under the Second Lien Collateral
Documents, to the Second Lien Claimholders to the extent required under the
Second Lien Collateral Documents and then, to the extent no Second Lien
Obligations are outstanding, to the owner of the subject property, such other
Person as may be entitled thereto or as a court of competent jurisdiction may
otherwise direct.  Until the Discharge of Senior Lien Obligations has
occurred, if the Second Lien Claimholders shall, at any time, receive any
proceeds of any such insurance policy or any such award or payment in
contravention of this Agreement, it shall pay such proceeds over to the Senior
Lien Collateral Agent in accordance with the terms of Section 4.3 of this
Agreement.  For avoidance of doubt, the occurrence of the Second Lien
Maturity Date shall not have any impact on the agreements of the parties hereto
set forth in this Section 5.2.

5.3

Amendments
to Senior Lien Note Documents and Second Lien Note Documents; Refinancing of the
Senior Lien Obligations and Second Lien Credit Obligations.

(a)

The
Senior Lien Note Documents may be amended, supplemented or otherwise modified in
accordance with their terms, and the Senior Lien Note Agreement may be
Refinanced, in each case, without the consent of the Second Lien Claimholders,
provided that the principal amount of any Refinancing shall not exceed the
amount of a 

  

16

 

Permitted
Refinancing.  The holders of any such Refinancing debt shall bind
themselves in writing to the terms of this Agreement and the collateral agent
under such Refinancing debt shall execute a joinder agreement in each case
pursuant Section 5.6 of this Agreement.  

(b)

No
Second Lien Note Document may be amended, supplemented or otherwise modified or
entered into without the prior written consent of the Senior Lien Collateral
Agent.

(c)

No
amendment by the Second Lien Claimholders of any Second Lien Note Document shall
apply to any of the Senior Lien Note Documents.  No waiver, consent or
amendment by the Second Lien Claimholders of any covenant or condition under the
Second Lien Note Documents, nor any waiver by the Second Lien Claimholders of a
breach under the Second Lien Note Documents, shall act as a waiver of, or
otherwise cure, any cross default arising under the Senior Lien Note Documents,
and any such cross default under the Senior Lien Note Documents shall constitute
a continuing Event of Default under the Senior Lien Note Documents until waived
by the Senior Lien Claimholders pursuant to the Senior Lien Note Agreement.

(d)

The
Second Lien Claimholders agree that each Second Lien Note shall include the
following legend or language (or language to similar effect approved by the
Senior Lien Collateral Agent), and shall be surrendered for application of such
Legend thereto:

“Payment
of principal and interest under this note, the transfer or hypothecation of this
note and enforcement of any security for the timely payment hereof, is strictly
subject to the provisions of the Intercreditor and Subordination Agreement dated
as of December 6, 2007 (as amended, restated, supplemented or otherwise modified
from time to time, the “Intercreditor Agreement”), among Interactive
Network, Inc., a Nevada corporation (the “Issuer”), each subsidiary of Issuer
that executed the Intercreditor Agreement or a joinder thereto, U.S. Bank
National Association, not individually but solely in its capacity as collateral
agent, including its successors and assigns from time to time, and the other
parties thereto.  In the event of any conflict between the terms of the
Intercreditor Agreement and this note, the terms of the Intercreditor Agreement
shall govern and control.”  

(e)

For
avoidance of doubt, the occurrence of the Second Lien Maturity Date shall not
have any impact on the agreements of the parties hereto set forth in this
Section 5.3.

5.4

Intentionally
Omitted.

(a)

Bailee
for Perfection; Appointment of Control Agent.  The Senior Lien
Claimholders and the Second Lien Claimholders, each hereby appoint U.S. Bank
National Association as its control agent (in such capacity, together with any
successor in 

  

17

such
capacity appointed by the Senior Lien Claimholders, the "Control Agent") for the
limited purpose of acting as the agent on behalf of the Senior Lien Claimholders
and the Second Lien Claimholders with respect to the Control Collateral for
purposes of perfecting the Liens of such parties on the Control Collateral.
 The Control Agent accepts such appointment and agrees to hold the Control
Collateral in its possession or control (or in the possession or control of its
agents or bailees) as Control Agent for the benefit of the Senior Lien
Claimholders and the Second Lien Claimholders and any permitted assignee of any
thereof solely for the purpose of perfecting the security interest granted to
such parties in such Control Collateral, subject to the terms and conditions of
this Section.  The Senior Lien Claimholders and the Second Lien
Claimholders hereby acknowledge that the Control Agent will obtain "control"
under the UCC over each Controlled Account as contemplated by the Senior Lien
Collateral Documents for the benefit of both the Senior Lien Claimholders and
the Second Lien Claimholders pursuant to the control agreements relating to each
respective Controlled Account.  The Control Agent, each of the Senior Lien
Claimholders and each of the Second Lien Claimholders, hereby agrees that the
Senior Lien Collateral Agent shall have the sole and exclusive right and
authority to give instructions to, and otherwise direct, the Control Agent in
respect of the Control Collateral or any control agreement with respect to any
Control Collateral until the Discharge of Senior Lien Obligations shall have
occurred and no Second Lien Claimholder will impede, hinder, delay or interfere
with the exercise of such rights by the Senior Lien Collateral Agent in any
respect.  The Grantors hereby jointly and severally agree to pay,
reimburse, indemnify and hold harmless the Control Agent to the same extent and
on the same terms that the Grantors are required to do so for the Senior Lien
Collateral Agent in accordance with the Senior Lien Note Agreement.  The
Senior Lien Claimholders and the Second Lien Claimholders hereby jointly and
severally agree to pay, reimburse, indemnify and hold harmless the Control Agent
to the same extent and on the same terms that the same are required to do so for
the Senior Lien Collateral Agent in accordance Section 8.9 of this Agreement.
 Except as set forth below, the Control Agent shall have no obligation
whatsoever to any Senior Lien Claimholder or Second Lien Claimholder including,
without limitation, any obligation to assure that the Control Collateral is
genuine or owned by any Grantor or one of their respective Subsidiaries or to
preserve rights or benefits of any Person except as expressly set forth in this
Section.  In acting on behalf of the Second Lien Claimholders and the
Senior Lien Claimholders, the duties or responsibilities of the Control Agent
under this Section shall be limited solely (i) to physically holding the Control
Collateral delivered to the Control Agent by any Grantor as agent for the Senior
Lien Collateral Agent and the Second Lien Claimholders for purposes of
perfecting the Lien held by the Senior Lien Claimholders and the Second Lien
Claimholders and (ii) delivering such collateral to the Senior Lien Collateral
Agent as set forth in this Section, and following the Discharge of the Senior
Lien Obligations, to the Second Lien Collateral Agent.  The rights of the
Second Lien Claimholders in the Control Collateral shall at all times be subject
to the terms of this Agreement and to the Senior Lien Collateral Agent’s rights
under the Senior Lien Note Documents.  Neither the Control Agent nor the
Senior Lien Collateral Agent shall have by reason of the Second Lien Note
Documents or this Agreement or any other document a fiduciary relationship in
respect of any Second Lien Claimholder.  Upon the Discharge of Senior Lien
Obligations (other than in connection with a Refinancing of the Senior 

  

18

 

Lien
Obligations), the Control Agent shall deliver to the Second Lien Claimholders or
their designee the Control Collateral together with any necessary endorsements
(or otherwise allow the Second Lien Claimholders to obtain control of such
Control Collateral) or as a court of competent jurisdiction may otherwise direct
and the Second Lien Claimholders or their designee shall accept and succeed to
the role of the Control Agent as the agent for perfection on the Control
Collateral.  For avoidance of doubt, the occurrence of the Second Lien
Maturity Date shall not have any impact on the agreements of the parties hereto
set forth in this Section 5.4.

5.5

Refinancing
of Senior Lien Obligations; Joinder of New Agent.  If at any time the
Issuer, substantially concurrently with the Discharge of Senior Lien
Obligations, enters into a Refinancing, then such Discharge of Senior Lien
Obligations shall automatically be deemed not to have occurred for all purposes
of this Agreement, and the obligations under such Refinancing shall
automatically 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 the Senior Lien Collateral Agent under such
Senior Lien Note Documents shall be the Senior Lien Collateral Agent for all
purposes of this Agreement, provided that the amount of the Refinancing shall
not exceed the amount of a Permitted Refinancing.  Upon receipt of a notice
stating that the Issuer has entered into a new Senior Lien Note Document
pursuant to a  Refinancing (which notice shall include the identity of the
new collateral agent, such agent, the “New Senior Lien Collateral
Agent”), the Second Lien Claimholders shall promptly (a) enter
into such documents and agreements (including amendments or supplements to this
Agreement) as the Issuer or such New Senior Lien Collateral Agent shall
reasonably request in order to provide to the New Senior Lien Collateral Agent
the rights contemplated hereby, in each case consistent in all material respects
with the terms of this Agreement and (b) deliver to the New Senior Lien
Collateral Agent any pledged Collateral then held by it together with any
necessary endorsements (or otherwise allow the New Senior Lien Collateral Agent
to obtain control of such pledged Collateral).  The New Senior Lien
Collateral Agent shall agree to be bound by the terms of this Agreement.
 If the new Senior Lien Obligations under the new Senior Lien Note
Documents are secured by assets of the Grantors of the type constituting
Collateral that do not also secure the Second Lien Obligations, then the Second
Lien Obligations shall be secured at such time by a second priority Lien on such
assets to the same extent provided in the Second Lien Collateral Documents.
 For avoidance of doubt, the occurrence of the Second Lien Maturity Date
shall not have any impact on the agreements of the parties hereto set forth in
this Section 5.5.

5.6

Assignment
of Second Lien Obligations.  Each Second Lien Claimholder agrees that it
will not sell, assign, transfer, grant a lien or security interest in, pledge or
otherwise hypothecate any of its right, title or interest in any of its
respective Second Lien Obligations or the Second Lien Note Documents to any
Person except upon prior written consent of the Second Lien Claimholders (which
consent shall not be unreasonably withheld or delayed) unless such Person
satisfies all of the following criteria (in which case such written consent
shall not be required): (i) such Person is (A) an “Accredited Investor” (as
defined in Regulation D promulgated under the Securities Act of 1933 (as
amended)) or (B) a member of the Family Group with respect to any assigning
Second Lien Claimholder; (ii) such person is not a competitor of the Issuer or a
person in Control of a competitor of the Issuer; and (iii) such Person is a
party to this Agreement or has executed and delivered a joinder to this
Agreement pursuant 

  

19

to
which such Person agrees to be bound by this Agreement in such Person’s capacity
as the holder of Second Lien Obligations.  For avoidance of doubt, the
occurrence of the Second Lien Maturity Date shall not have any impact on the
agreements of the parties hereto set forth in this Section 5.6.

5.7

Insolvency
Proceedings.

5.8

Bankruptcy.
 This Agreement shall be applicable both before and after the filing of any
petition by or against any Grantor under the Bankruptcy Code or any other
Insolvency Proceeding and all converted or succeeding cases in respect thereof,
and all references herein to any Grantor shall be deemed to apply to the trustee
for such Grantor and such Grantor as a debtor-in-possession.  This
Agreement shall constitute a subordination agreement within the meaning of
Section 510(a) of the Bankruptcy Code.

5.9

Post
Petition Financing; Cash Collateral.

(a)

If
any Grantor shall become subject to a case under the Bankruptcy Code and such
Grantor as debtor-in-possession (or a trustee appointed on behalf of such
Grantor) shall move for either (x) approval of financing (“DIP
Financing”) to be provided by any one or more of the Senior Lien
Claimholders under Section 364 of the Bankruptcy Code with the consent of
Senior Lien Collateral Agent or as otherwise to be provided by another Person
with the consent of Senior Lien Collateral Agent or (y) the use of cash
collateral with the consent of the Senior Lien Collateral Agent under
Section 363 of the Bankruptcy Code, the Second Lien Claimholders agree as
follows:  until the first to occur of either the Discharge of Senior Lien
Obligations or the Second Lien Maturity Date; (i) such DIP Financing
(including any Senior Lien Obligations which arose prior to the Insolvency
Proceeding) may be secured by Liens on all or a part of the assets of the
Grantors which may be superior in priority to the Liens on the assets of the
Grantors held by any other Person, and (ii) the Second Lien Claimholders
shall not contest or oppose in any manner such DIP Financing or cash collateral
use and shall be deemed to have waived any objections to such financing or cash
collateral use, including by any objection alleging Grantors' failure to provide
“adequate protection” for the Liens of the Second Lien Claimholders or
otherwise, as long as (A) the Second Lien Claimholders retain a Lien on the
Collateral (including proceeds thereof arising after the commencement of such
proceeding) with the same priority as existed prior to the commencement of the
case under the Bankruptcy Code (but also junior in priority to the Liens
securing such DIP Financing), (B) the Second Lien Claimholders receive a
replacement Lien on post-petition assets, with the same priority as existed
prior to the commencement of the case under the Bankruptcy Code (junior in
priority to the Liens securing such DIP Financing, provided that the
inability of the Second Lien Claimholders to receive a Lien on actions under
Chapter 5 of the Bankruptcy Code or proceeds thereof shall not affect the
agreements and waivers set forth in this clause), and (C) such DIP
Financing or use of cash collateral is subject to the terms of this Agreement.
 If Senior Lien Collateral Agent objects to any motion by a Grantor for use
of cash collateral under Section 363 of the Bankruptcy Code or to incur
financing under Section 364 of the Bankruptcy Code, then at the written
request of Senior Lien Collateral Agent, Second Lien Claimholders shall, if
neither the Discharge of Senior Lien Obligations nor the Second Lien Maturity
Date has 

  

20

 

occurred,
join the objection by Senior Lien Collateral Agent.  Second Lien
Claimholders shall not, directly or through an affiliate and regardless of the
occurrence of the Second Lien Maturity Date has occurred, seek to provide DIP
Financing secured by Liens equal or senior to the Liens of the Senior Lien
Claimholders, without the prior written consent of Senior Lien Collateral
Agent.

(b)

Notwithstanding
the foregoing provisions in this Section 6.2, in any Insolvency Proceeding,
(i) if the Senior Lien Claimholders (or any subset thereof) are granted
adequate protection in the form of additional or replacement collateral, the
Second Lien Claimholders may seek adequate protection in the form of a Lien on
such additional or replacement collateral, which Lien, if granted, will be
subordinate to the Liens securing the Senior Lien Obligations on the same basis
as the other Liens securing the Second Lien Obligations are so subordinated
under this Agreement (provided that any failure of the Second Lien Claimholders
to obtain such adequate protection shall not impair or otherwise affect the
agreements, undertakings and consents of the Second Lien Claimholders pursuant
to Section 6.2(a)), and (ii) in the event any Second Lien Claimholder
seeks or requests such adequate protection in respect of Second Lien
Obligations, then (A) such adequate protection shall be limited to a Lien
on additional or replacement collateral, and (B) Senior Lien Claimholders
may seek and obtain, and each Second Lien Claimholder hereby consents to the
granting of, a Lien on such additional collateral as security for the Senior
Lien Obligations and such Lien shall be senior in priority to the Lien of the
Second Lien Claimholders on the same basis as the other Liens securing the
Senior Lien Obligations are senior to Liens securing the Second  Lien
Obligations under this Agreement.  If and to the extent such additional or
replacement Liens are insufficient to provide adequate protection of the
interests of the Second Lien Claimholders, then the Second Lien Claimholders
shall be entitled to assert a claim under Section 507(b) of the Bankruptcy
Code in the amount of any such insufficiency; provided, however, that any such
claim under Section 507(b) shall be subordinate in right of payment to the
Discharge of the Senior Lien Claimholders.  For avoidance of doubt, the
occurrence of the Second Lien Maturity Date shall not have any impact on the
agreements of the parties hereto set forth in this Section 6.2(b).

(c)

The
Second Lien Claimholders may seek post-petition interest and/or adequate
protection payments in any Insolvency Proceeding, and Senior Lien Claimholders
may oppose such motions.  If the Second Lien Claimholders receive
post-petition interest and/or adequate protection payments in an Insolvency
Proceeding (“Second Lien Bankruptcy Payments”), and Discharge of the
Senior Lien Obligations does not occur upon first to occur of the effective date
of the plan of reorganization for, or conclusion of, that Insolvency Proceeding,
then, the Second Lien Claimholders shall pay over to the Senior Lien
Claimholders pursuant to Section 4.3 an amount equal to the lesser of
(i) the Second Lien Bankruptcy Payments and (ii) the amount by which
the Senior Lien Obligations have not been discharged.

5.10

Sale
of Collateral; Waivers.  The Second Lien Claimholders agree that, until
the first to occur of the Discharge of Senior Lien Obligations or the Second
Lien Maturity Date, they will limit objections to a sale or other disposition of
any assets securing the Senior Lien Obligations under the Senior Lien Note
Documents (or any portion thereof) free and clear of 

  

21

Liens,
claims and other interests under the Bankruptcy Code, including
Sections 363, 365 and 1129, if Senior Lien Collateral Agent has consented
to such sale or other disposition to those objections that are available in
Section 6.5.  Until the first to occur of the Discharge of Senior Lien
Obligations or the Second Lien Maturity Date, at the written request of Senior
Lien Collateral Agent, Second Lien Claimholders will object to any such sale.
 The Second Lien Claimholders waive any claim they may now or hereafter
have arising out of the Senior Lien Claimholders' election of the application of
Section 1111(b)(2) of the Bankruptcy Code.  The Second Lien
Claimholders agree not to, until the first to occur of either the Discharge of
Senior Lien Obligations or the Second Lien Maturity Date, (i) initiate or
prosecute or join with any other Person to initiate or prosecute any claim,
action or other proceeding opposing a motion by Senior Lien Collateral Agent to
lift the automatic stay, or (ii) propose or vote (to the extent such vote
is required to satisfy Section 1129(a)(10) of the Bankruptcy Code) in favor
of any chapter 11 plan that seeks confirmation under
Section 1129(b)(2)(A) of the Bankruptcy Code with respect to the Senior
Lien Obligations.  

5.11

Notice
of Claims.  The parties acknowledge and agree that (i) the claims
and interests of the Senior Lien Claimholders under the Senior Lien Note
Documents are substantially different from the claims and interests of Second
Lien Claimholders under the Second Lien Note Documents and (ii) such claims
and interests should be treated as separate classes for purposes of
Section 1122 of the Bankruptcy Code.  For avoidance of doubt, the
occurrence of the Second Lien Maturity Date shall not have any impact on the
agreements of the parties hereto set forth in this Section 6.4.

5.12

Rights
as Unsecured Creditors.  Except as otherwise provided herein, in any
Insolvency Proceeding Second Lien Claimholders may exercise rights and remedies
as unsecured creditors (whether or not such Second Lien Claimholders in fact
hold such a claim) against any Grantor in accordance with the Second Lien Note
Documents and applicable law.  For avoidance of doubt, the occurrence of
the Second Lien Maturity Date shall not have any impact on the agreements of the
parties hereto set forth in this Section 6.5.

5.13

Separate
Grants of Security and Separate Classification.  Each Second Lien
Claimholder acknowledges and agrees that (i) the grants of Liens pursuant to the
Senior Lien Collateral Documents and the Second Lien Collateral Documents
constitute separate and distinct grants of Liens and (ii) because of, among
other things, their differing rights in the Collateral, the Second Lien
Obligations are fundamentally different from the Senior Lien Obligations and
must be separately classified in any plan of reorganization proposed or adopted
in an Insolvency Proceeding.  To further effectuate the intent of the
parties as provided in the immediately preceding sentence, if it is held that
the claims against the Senior Lien Claimholders and Second Lien Claimholders in
respect of the Collateral constitute only one secured claim (rather than
separate classes of senior and junior secured claims), then the Second Lien
Claimholders hereby acknowledge and agree that all distributions shall be made
as if there were separate classes of senior and junior secured claims against
the Issuer and the Guarantors in respect of the Collateral (with the effect
being that, to the extent that the aggregate value of the Collateral is
sufficient (for this purpose ignoring all claims held by the Second Lien
Claimholders), the Senior Lien Claimholders shall be entitled to receive, in
addition to amounts distributed to them in respect of principal, pre-petition
interest and other claims, all amounts owing in respect of post-petition
interest before any distribution is made in respect of the claims held by the
Second Lien 

  

22

 

Claimholders,
with the Second Lien Claimholders hereby acknowledging and agreeing to turn over
to the Senior Lien Claimholders amounts otherwise received or receivable by them
to the extent necessary to effectuate the intent of this sentence, even if such
turnover has the effect of reducing the claim or recovery of the Second Lien
Claimholders.  For avoidance of doubt, the occurrence of the Second Lien
Maturity Date shall not have any impact on the agreements of the parties hereto
set forth in this Section 6.6. 

5.14

Avoidance
Issues.  If any Senior Lien Claimholder is required in any Insolvency
Proceeding or otherwise to disgorge, turn over or otherwise pay to the estate of
any Grantor, because such amount was avoided or ordered to be paid or disgorged
for any reason, including without limitation because it was found to be a
fraudulent or preferential transfer, any Recovery, whether received as proceeds
of security, enforcement of any right of set-off or otherwise, then the claims
of the Senior Lien Claimholders shall be reinstated pursuant to Section 8.18.
 The Second Lien Claimholders further agree that none of them shall be
entitled to benefit from any avoidance action affecting or otherwise relating to
any distribution or allocation made in accordance with this Agreement, whether
by preference or otherwise, it being understood and agreed that the benefit of
such avoidance action otherwise allocable to them shall instead by allocated and
turned over to the Senior Lien Collateral Agent for application in accordance
with the priorities set forth in this Agreement pursuant to Section 4.3.
 For avoidance of doubt, the occurrence of the Second Lien Maturity Date
shall not have any impact on the agreements of the parties hereto set forth in
this Section 6.7.

5.15

Reorganization
Securities.  If, in any Insolvency Proceeding, debt obligations 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 Second Lien Obligations, the provisions of this
Agreement will survive the distribution of such debt obligations pursuant to
such plan and will apply with like effect to such debt obligations.  This
Agreement shall not apply to any equity securities 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
Second Lien Obligations.  For avoidance of doubt, the occurrence of the
Second Lien Maturity Date shall not have any impact on the agreements of the
parties hereto set forth in this Section 6.8.

5.16

Post-Petition
Interest.

No
Second Lien Claimholder shall oppose or seek to challenge any claim by the
Senior Lien Collateral Agent or any Senior Lien Claimholder for allowance in any
Insolvency Proceeding of Senior Lien Obligations consisting of post-petition
interest, fees or expenses to the extent of the value of the Senior Lien
Claimholder’s Lien, without regard to the existence of the Liens of the Second
Lien Claimholders on the Collateral.

Section
6.

Reliance;
Waivers; Etc.

6.1

Reliance.
 Other than any reliance on the terms of this Agreement, the Senior Lien
Claimholders under the Senior Lien Note Documents acknowledge that such Senior
Lien Claimholders have, independently and without reliance on the Second Lien
Claimholders, and based on documents and information deemed by them appropriate,
made their own credit 

  

23

 

analysis
and decision to enter into such Senior Lien Note Documents and be bound by the
terms of this Agreement and they will continue to make their own credit decision
in taking or not taking any action under the Senior Lien Note Agreement or this
Agreement.  The Second Lien Claimholders acknowledge that they have,
independently and without reliance on the Senior Lien Collateral Agent or any
Senior Lien Claimholder, and based on documents and information deemed by them
appropriate, made their own credit analysis and decision to enter into each of
the Second Lien Note Documents and be bound by the terms of this Agreement and
they will continue to make their own credit decision in taking or not taking any
action under the Second Lien Note Documents or this Agreement.

6.2

No
Warranties or Liability.  The Senior Lien Claimholders under the Senior
Lien Note Documents acknowledge and agree that neither the Second Lien Agent nor
any of the Second Lien Claimholders have made an express or implied
representation or warranty, including with respect to the execution, validity,
legality, completeness, collectibility or enforceability of any of the Second
Lien Note Documents, the ownership of any Collateral or the perfection or
priority of any Liens thereon.  Subject to the provisions of this
Agreement, the Second Lien Claimholders will be entitled to manage and supervise
their respective loans and extensions of credit under the Second Lien Note
Documents in accordance with law and as they may otherwise, in their sole
discretion, deem appropriate.  The Second Lien Claimholders acknowledge and
agree that the Senior Lien Collateral Agent and the Senior Lien Claimholders
have made no express or implied representation or warranty, including with
respect to the execution, validity, legality, completeness, collectibility or
enforceability of any of the Senior Lien Documents, the ownership of any
Collateral or the perfection or priority of any Liens thereon.  The Senior
Lien Claimholders will be entitled to manage and supervise their respective
loans and extensions of credit under their respective Senior Lien Documents in
accordance with law and as they may otherwise, in their sole discretion, deem
appropriate.  The Second Lien Claimholders shall have no duty to the Senior
Lien Collateral Agent or any of the Senior Lien Claimholders, and the Senior
Lien Collateral Agent and the Senior Lien Claimholders shall have no duty to the
Second Lien Claimholders to act or refrain from acting in a manner which allows,
or results in, the occurrence or continuance of an event of default or default
under any agreements with the Issuer or any Guarantor (including the Senior Lien
Note Documents and the Second Lien Note Documents), regardless of any knowledge
thereof which they may have or be charged with.

6.3

No
Waiver of Lien Priorities.

(a)

No
right of the Senior Lien Claimholders, the Senior Lien Collateral Agent or any
of them acting collectively to enforce any provision of this Agreement or any
Senior Lien Note Document shall at any time in any way be prejudiced or impaired
by any act or failure to act on the part of the Issuer or any other Grantor or
by any act or failure to act of any one individual Second Lien Claimholder or
the Second Lien Collateral Agent in a manner that is inconsistent with the
terms, provisions and covenants of this Agreement, any of the Senior Lien Note
Documents or any of the Second Lien Note Documents, regardless of any knowledge
thereof which the Senior Lien Collateral Agent or the Senior Lien Claimholders,
or any of them, may have or be otherwise charged with, unless such inconsistent
action was directed or approved by a majority in amount of the Senior Lien
Claimholders;

  

24

 

(b)

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

(i)

change
the manner, place or terms of payment or change or extend the time of payment
of, or amend, renew, exchange, increase or alter, the terms of any of the Senior
Lien Obligations or any Lien on any Senior Lien Collateral or guaranty thereof
or any liability of the Issuer or any other Grantor, or any liability incurred
directly or indirectly in respect thereof (including any increase in or
extension of the Senior Lien Obligations or issuance by Issuer of any secured
Indebtedness permitted under the Senior Lien Note Agreement, without any
restriction as to the amount, tenor or terms of any such increase or extension
or issuance, all of which shall constitute Senior Lien Obligations) or otherwise
amend, renew, exchange, extend, modify or supplement in any manner any Liens
held by the Senior Lien Collateral Agent or any of the Senior Lien Claimholders,
the Senior Lien Obligations or any of the Senior Lien Note Documents; provided,
however, that no change, increase, amendment, modification, alteration, renewal,
exchange, extension or other action shall cause or have the effect of increasing
the principal amount of Senior Lien Obligations to an amount in excess of a
Permitted Refinancing;

(ii)

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

(iii)

settle
or compromise any Senior Lien Obligation or any other liability of the Issuer or
any other 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; 

(iv)

exercise
or delay in or refrain from exercising any right or remedy against the Issuer or
any security or any other Grantor or any other Person, elect any remedy and
otherwise deal freely with the Issuer, any other Grantor or any Senior Lien
Collateral and any security and any guarantor or any liability of the Issuer or
any other Grantor to the Senior Lien Claimholders or any liability incurred
directly or indirectly in respect thereof; and

  

25

 

(v)

Senior
Lien Claimholders shall use commercially reasonable efforts to provide
reasonable prior notice to Second Lien Collateral Agent of the occurrence of an
event specified this Section 7.3(b), provided that if prior notice is not
practicable, then commercially reasonable efforts will be used to deliver such
notice promptly after such action, provided that the failure of Senior Lien
Claimholders to the Second Lien Collateral Agent pursuant to this provision
shall not, in and of itself, constitute a basis for objecting to or otherwise
challenging the validity and enforceability of such action.

(c)

The
Second Lien Claimholders also agree that the Senior Lien Claimholders and the
Senior Lien Collateral Agent shall have no liability to the Second Lien
Claimholders, and the Second Lien Claimholders hereby waive any claim against
any Senior Lien Claimholder or the Senior Lien Collateral Agent, arising out of
any and all actions which the Senior Lien Claimholders or the Senior Lien
Collateral Agent may take or permit or omit to take with respect to:
 (i) the Senior Lien Note Documents, (ii) the collection of
the Senior Lien Obligations or (iii) the foreclosure upon, or sale,
liquidation or other disposition of, any Senior Lien Collateral.  The
Second Lien Claimholders agree that the Senior Lien Claimholders and the Senior
Lien Collateral Agent have no duty to them in respect of the maintenance or
preservation of the Senior Lien Collateral, the Senior Lien Obligations or
otherwise; and

(d)

The
Second Lien 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 marshalling, appraisal, valuation or
other similar right that may otherwise be available under applicable law with
respect to the Collateral or any other similar rights a junior secured creditor
may have under applicable law.

(e)

Senior
Lien Claimholders agree that all actions taken by them in respect of a
disposition of Collateral under this Section 7.3, whether consensually or by
foreclosure, shall be subject to the commercial reasonableness requirement of
Section 3.1(e) of this Agreement.

6.4

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

(a)

any
lack of validity or enforceability of any Senior Lien Note Documents or any
Second Lien Note Documents;

(b)

except
as otherwise set forth in the 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 Second Lien Obligations, or any amendment or waiver or other
modification, including any increase in the amount thereof, whether by course of
conduct or otherwise, of the terms of any Senior Lien Note Document or any
Second Lien Note Document;

  

26

 

(c)

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 Second
Lien Obligations or any guarantee thereof;

(d)

the
commencement of any Insolvency Proceeding in respect of the Issuer or any other
Grantor; or

(e)

any
other circumstances which otherwise might constitute a defense available to, or
a discharge of, the Issuer or any other Grantor in respect of the Senior Lien
Obligations, or of the Second Lien Claimholder in respect of this Agreement.

6.5

For
avoidance of doubt, the occurrence of the Second Lien Maturity Date shall not
have any impact on the agreements of the parties hereto set forth in this
Section 7.

Section
7.

Miscellaneous.

7.1

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

7.2

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 intercreditor
agreement and the Senior Lien Claimholders may continue, at any time and without
notice to the Second Lien Claimholder subject to the Second Lien Note Documents,
in reliance hereof and in compliance herewith, to extend credit and other
financial accommodations and lend monies to or for the benefit of the Issuer or
any Grantor constituting Senior Lien Obligations.  The Second Lien
Claimholders hereby waive any right they 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 which is
prohibited or unenforceable in any jurisdiction shall not invalidate the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.  All references to the Issuer or any other Grantor
shall include the Issuer or such Grantor as debtor and debtor-in-possession and
any receiver or trustee for the Issuer or any other Grantor (as the case may be)
in any Insolvency Proceeding.  This Agreement shall terminate and be of no
further force and effect upon the Discharge of Senior Lien Obligations.
 

7.3

Amendments;
Waivers.  No amendment, modification or waiver of any provision of this
Agreement that applies to any of the Senior Lien Claimholders shall be effective
against such Persons unless such amendment, modification or waiver shall be in a
writing signed by both the Senior Lien Collateral Agent and each such other
party hereto that is so effected by the provision being so amended, modified or
waived.  Each waiver, if any, shall be a waiver only with respect to the
specific instance involved and shall in no way impair the rights of the parties
making such waiver or the obligations of the other parties to such party in any
other respect or at any other time.  Notwithstanding the foregoing, the
Issuer shall not have any right to consent to 

  

27

 

or
approve any amendment, modification or waiver of any provision of this Agreement
except to the extent its rights are directly affected.

7.4

Information
Concerning Financial Condition of the Issuer and its Subsidiaries.  The
Senior Lien Collateral Agent and the Senior Lien Claimholders, on the one hand,
and the Second Lien Claimholders, on the other hand, shall each be responsible
for keeping themselves informed of (a) the financial condition of the
Issuer and its Subsidiaries and all endorsers and/or guarantors of the Senior
Lien Obligations or the Second Lien Obligations and (b) all other
circumstances bearing upon the risk of nonpayment of the Senior Lien Obligations
or the Second Lien Obligations.  The Senior Lien Collateral Agent and the
Senior Lien Claimholders shall have no duty to advise the Second Lien
Claimholder of information known to it or them regarding such condition or any
such circumstances or otherwise.  In the event the Senior Lien Collateral
Agent or any of the Senior Lien Claimholders, in its or their sole discretion,
undertakes at any time or from time to time to provide any such information to
the Second Lien Claimholders, it or they shall be under no obligation (w)
to make, and the Senior Lien Collateral Agent and the Senior Lien Claimholders
shall not make, any express or implied representation or warranty, including
with respect to the accuracy, completeness, truthfulness or validity of any such
information so provided, (x) to provide any additional information or to
provide any such information on any subsequent occasion, (y) to undertake
any investigation or (z) to disclose any information which, pursuant to
accepted or reasonable commercial finance practices, such party wishes to
maintain confidential or is otherwise required to maintain confidential.

7.5

Subrogation.
 The Second Lien Claimholders hereby defer enforcement of any rights of
subrogation that they may acquire as a result of any payment hereunder until the
Discharge of Senior Lien Obligations has occurred.  Upon Discharge of the
Senior Lien Obligations, the Second Lien Claimholders shall be entitled to
enforce rights of subrogation in respect of the rights of the Senior Lien
Claimholders under the Senior Lien Note Documents to receive payments and
distributions of cash, property and securities, and to exercise rights with
respect to Collateral, applicable to the Senior Lien Obligations to the extent
that distributions otherwise payable to the Second Lien Claimholders have been
applied to the Discharge of the Senior Lien Obligations, until all amounts
payable under the Second Lien Obligations are paid in full.  For purposes
of such subrogation, no payments or distributions to the Senior Lien
Claimholders of any cash, property or securities that the Second Lien
Claimholders would be entitled to receive the except for the provisions of this
Agreement, and no payment pursuant to the provisions of this Agreement to the
Senior Lien Claimholders by the Second Lien Claimholders, shall, as among the
Issuer and its creditors (other than the Senior Lien Claimholders), be treated
as a payment or distribution by the Issuer to or on account of the Senior Lien
Obligations.  If the Issuer fails to make any payment on the Second Lien
Obligations by reason of any provision contained in this Agreement, such failure
shall, notwithstanding such provision, constitute a default with respect to the
Second Lien Obligations if and to the extent such failure would otherwise
constitute such a default in accordance with the terms of the Second Lien
Obligations.

7.6

Application
of Payments.  All payments received by the Senior Lien Collateral Agent
or the Senior Lien Claimholders may be applied, reversed and reapplied, in whole
or in part, to such part of the Senior Lien Obligations provided for in the
Senior Lien Note Documents.  The Second Lien Claimholders assent to any
extension or postponement of the time 

  

28

 

of
payment of the Senior Lien Obligations or any part thereof and to any other
indulgence with respect thereto, to any substitution, exchange or release of any
security which may at any time secure any part of the Senior Lien Obligations
and to the addition or release of any other Person primarily or secondarily
liable therefor.

7.7

WAIVER
OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT, ANY OTHER SENIOR LIEN NOTE DOCUMENT, ANY OTHER SECOND LIEN NOTE
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

7.8

Notices.
 All notices to the Second Lien Claimholders and the Senior Lien
Claimholders permitted or required under this Agreement shall also be sent to
the Senior Lien Collateral Agent.  Unless otherwise specifically provided
herein, any notice hereunder shall be in writing and may be personally served,
telexed or sent by telefacsimile or United States mail or courier service and
shall be deemed to have been given when delivered in person or by courier
service and signed for against receipt thereof, upon receipt of telefacsimile or
telex, or three Business Days after depositing it in the United States mail with
postage prepaid and properly addressed.  For the purposes hereof, the
addresses of the parties hereto shall be as set forth below each party’s name on
the signature pages hereto, or, as to each party, at such other address as may
be designated by such party in a written notice to all of the other parties.

7.9

Further
Assurances; Applicability of Indemnification and Waivers in favor of the
Collateral Agent.  The Senior Lien Collateral Agent, the Senior Lien
Claimholders, the Second Lien Claimholders, the Issuer and the Guarantors each
hereby agree that each of them shall take such further action and shall execute
and deliver such additional documents and instruments (in recordable form, if
requested) as the Senior Lien Collateral Agent or the Second Lien Claimholders
may reasonably request to effectuate the terms of and the lien priorities
contemplated by this Agreement.  Issuer, each Guarantor, each Senior Lien
Claimholder (other than Senior Lien Collateral Agent) and each Second Lien
Claimholder acknowledges and agrees that the Senior Lien Collateral Agent shall
be fully protected by and shall at all times be entitled to enjoy the full
benefit of the rights, remedies, indemnities, covenants, obligations and
undertakings and other protections in favor of the Agent that are set forth in
Article X and Section 12.15 of the Senior Lien Note Agreement in the form in
effect on the Closing Date as if set forth herein at length, provided that all
limitations on the protection of the Agent set forth in Article X and Section
12.15 shall also be equally applicable to the Senior Lien Collateral Agent.

  

29

 

7.10

Governing
Law; Jurisdiction; Consent to Service of Process.

(a)

This Agreement shall be construed in accordance with and governed by the law of
the State of New York.

(b)

Each
party hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the Supreme Court of the State of
New York sitting in New York County and of the United States District Court of
the Southern District of New York, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court.  Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.  Nothing in this Agreement, any other
Senior Lien Note Document or any other Second Lien Note Document shall affect
any right that any Senior Lien Claimholder or Second Lien Claimholder may
otherwise have to bring any action or proceeding relating to this Agreement, any
other Senior Lien Note Document or any other Second Lien Note Document against
the Issuer, the Guarantors or any of their respective properties in the courts
of any jurisdiction.

(c)

Each
party hereto hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement, any other Senior Lien Note Document or any
Second Lien Note Document in any court referred to in paragraph (b) of this
Section.  Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

(d)

Each
party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 8.8.  Nothing in this Agreement, any other
Senior Lien Note Document or any Second Lien Note Document will affect the right
of any party to this Agreement to serve process in any other manner permitted by
law.

7.11

Binding
on Successors and Assigns.  This Agreement shall be binding upon the
Senior Lien Collateral Agent, the Senior Lien Claimholders, the Second Lien
Claimholders and their respective successors and assigns.

7.12

Specific
Performance.  Each of the Senior Lien Collateral Agent and the Second
Lien Claimholders may demand specific performance of this Agreement.  The
Senior Lien Collateral Agent, for itself and on behalf of the Senior Lien
Claimholders under its Senior Lien Note Documents, and the Second Lien
Claimholders hereby irrevocably waive any defense based on the adequacy of a
remedy at law and any other defense which might be asserted to bar the remedy of
specific performance in any action which may be brought by any Senior Lien
Collateral Agent or the Second Lien Claimholders, as the case may be. 

  

30

 

 

7.13

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

7.14

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

7.15

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

7.16

No
Third Party Beneficiaries.  This Agreement and the rights and benefits
hereof shall inure to the benefit of each of the parties hereto and its
respective successors and assigns and shall inure to the benefit of each of the
Senior Lien Claimholders and the Second Lien Claimholders.  No other Person
shall have or be entitled to assert rights or benefits hereunder.

7.17

Provisions
Solely to Define Relative Rights.  The provisions of this Agreement are
and are intended solely for the purpose of defining the relative rights of the
Senior Lien Claimholders on the one hand and the Second Lien Claimholders on the
other hand.  None of the Issuer, any other Grantor or any other creditor
thereof shall have any rights hereunder and neither the Issuer nor any Grantor
may rely on the terms hereof.  Nothing in this Agreement is intended to or
shall impair the obligations of the Issuer or any other Grantor, which are
absolute and unconditional, to pay the Senior Lien Obligations and the Second
Lien Obligations as and when the same shall become due and payable in accordance
with their terms.

7.18

Reinstatement
of Rights and Obligations upon Recovery of Payment from Senior Lien
Claimholders.  If the Senior Lien Claimholders or the Senior Lien
Collateral Agent are required in any bankruptcy, reorganization, debt
arrangement, or other case or proceeding under any bankruptcy or insolvency law,
or any dissolution or liquidation proceeding, in respect of the Issuer or the
Guarantor, or otherwise to disgorge, turn over or otherwise pay to the estate of
any of the Issuer or the Guarantor, because such amount was avoided or ordered
to be paid or disgorged for any reason, including without limitation because it
was found to be a fraudulent or preferential transfer, any amount (a
“Recovery”), whether received as proceeds of security, enforcement of any right
of set-off or otherwise, then the claims of the Senior Lien Claimholders and the
Senior Lien Collateral Agent shall be reinstated to the extent of such Recovery
and deemed to be outstanding as if such amount had not been received and the
Senior Lien Obligations shall be deemed not to have been Paid in Full.  If
this Agreement or any Senior Lien Note Document shall have been terminated prior
to such Recovery, this Agreement and each such Senior Lien Note Document shall
be reinstated in full force and effect and the liens thereunder deemed
reinstated with no loss of relative priority, and such prior termination shall
not diminish, release, discharge, impair or otherwise affect the obligations of
the parties hereto or  

  

31

 

thereto.
 The provisions of this Section 8.18 and agreements of the parties hereto
set forth herein, together with other provisions so designated, shall survive
the termination of this Agreement. 

7.19

For
avoidance of doubt, the occurrence of the Second Lien Maturity Date shall not
have any impact on the agreements of the parties hereto set forth in this
Section 8.

[Signatures Follow on Next Page]

  

32

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

SENIOR
LIEN COLLATERAL AGENT, 

SECOND
LIEN COLLATERAL AGENT and 

CONTROL
AGENT:

U.S.
BANK NATIONAL ASSOCIATION
solely as Senior Lien Collateral Agent, Second
Lien

Collateral
Agent and Control Agent,

By:

/s/
Kathy L. Mitchell
Name:  Kathy L. Mitchell
Title:
   Vice President

  

S-1

[Signature Page to Interactive First Lien/Second Lien Intercreditor
Agreement]

 

ISSUER:

INTERACTIVE
NETWORK, INC., 

a
Nevada corporation

By:
 /s/ Paul Asher

Name: Paul Asher

Title: Secretary

  

S-2

[Signature Page to Interactive First Lien/Second Lien Intercreditor
Agreement]

 

GUARANTORS:

VARIOUS,
INC. 

By:
/s/ Daniel C. Staton

Name: Daniel C. Staton

Title: CFO

GLOBAL
ALPHABET, INC. 
SHARKFISH, INC. 
TRAFFIC CAT, INC. 
BIG ISLAND
TECHNOLOGY GROUP, INC. 
FASTCUPID, INC. 
MEDLEY.COM INCORPORATED 
PPM
TECHNOLOGY GROUP, INC. 
FRIENDFINDER NETWORK, INC. 

By:
/s/ Daniel C. Staton 

Name: Daniel C. Staton

Title: CFO

FRIENDFINDER
PROCESSING LTD. 

By:
/s/ Daniel C. Staton 

Name: Daniel C. Staton

Title: CFO

STREAMRAY,
INC.

By:
/s/ Daniel C. Staton

Name: Daniel C. Staton

Title:
 CFO

CONFIRM
ID, INC. 
FRNK TECHNOLOGY GROUP 
TRANSBLOOM, INC. 
STREAMRAY INC. 

By:
/s/ David Bloom 

Name:
 David Bloom

Title:
  Secretary

 

  

S-3

[Signature Page to Interactive First Lien/Second Lien Intercreditor
Agreement]

SENIOR
LIEN CLAIMHOLDERS:

SATELLITE
SENIOR INCOME FUND, LLC

By:

Satellite
Asset Management, L.P.,

Its
Investment Manager

By:
 /s/ Simon Raykher
Name:  Simon Raykher
Title:
  General Counsel

[signatures continue on following page]

  

S-4-A

[Signature Page to Interactive First Lien/Second Lien Intercreditor
Agreement]

EPIC
DISTRESSED DEBT OPPORTUNITY 

MASTER
FUND, LTD

By:
 /s/ Herbert Seif
Name:

Herbert
Seif
Title:

Director

By:
 /s/ James Duplessie
Name: James Duplessie
Title:

Managing
Member, Epic Asset 

Management

[signatures continue on following page]

  

S-4-B

[Signature Page to Interactive First Lien/Second Lien Intercreditor
Agreement]

 

DEL
MAR MASTER FUND LTD.

By: 
Del Mar Asset Management, L.P.

 

By:
 /s/ Marc V. Simons

Name:
Marc V. Simons

Title:   Director

[signatures continue on following page]

  

S-4-C

[Signature Page to Interactive First Lien/Second Lien Intercreditor
Agreement]

ANDREW
B. CONRU TRUST AGREEMENT

By:
/s/ Andrew B. Conru

Andrew
B. Conru, Trustee

[signatures continue on following page]

  

S-4-D

[Signature Page to Interactive First Lien/Second Lien Intercreditor
Agreement]

MAPSTEAD
TRUST, 

CREATED
ON APRIL 16, 2002

By:
/s/ Lars Mapstead

Lars
Mapstead, Trustee

By:
/s/ Marin A. Mapstead

Marin
A. Mapstead, Trustee

[signatures continue on following page]

  

S-4-E

[Signature Page to Interactive First Lien/Second Lien Intercreditor
Agreement]

ROCK/VIEW
TRADING, LTD.

By:
 /s/ Kevin Schweitzer

Name:
Kevin Schweitzer

Title:   Chief
Investment Officer, RockView

Management,
LLC

[signatures continue on following page]

  

S-4-F

[Signature Page to Interactive First Lien/Second Lien Intercreditor
Agreement]

MARC
H. BELL

/s/
Marc H. Bell

[signatures continue on following page]

  

S-4-G

[Signature Page to Interactive First Lien/Second Lien Intercreditor
Agreement]

STATON
FAMILY INVESTMENTS, LTD.

By:
 /s/ Daniel C. Staton

Name:
Daniel C. Staton

Title:   

[signatures continue on following page]

  

S-4-H

[Signature Page to Interactive First Lien/Second Lien Intercreditor
Agreement]

 

CAMOFI
MASTER LDC

By:
 /s/ Richard Smithline

Name:
Richard Smithline

Title:   Director

CAMHZN
MASTER LDC

By:
 /s/ Richard Smithline

Name:
Richard Smithline

Title:   Director

[signatures continue on following page]

  

S-4-I

[Signature Page to Interactive First Lien/Second Lien Intercreditor
Agreement]

 

VISIUM
LONG BIAS OFFSHORE FUND, LTD.

By:
Visium Asset Management, LLC, its Investment Advisor

By:
 /s/ Mark Gottlieb

Name:
Mark Gottlieb

Title:   Member
and Chief Compliance Officer 

of
Visium Asset Management, LLC

VISIUM
LONG BIAS FUND, LP

By:
Visium Asset Management, LLC, its Investment Advisor

By:
 /s/ Mark Gottlieb

Name:
Mark Gottlieb

Title:   Member
and Chief Compliance Officer 

of
Visium Asset Management, LLC

VISIUM
BALANCED OFFSHORE FUND, LTD.

By:
Visium Asset Management, LLC, its Investment Advisor

By:
 /s/ Mark Gottlieb

Name:
Mark Gottlieb

Title:   Member
and Chief Compliance Officer 

of
Visium Asset Management, LLC

VISIUM
BALANCED FUND, LP

By:
Visium Asset Management, LLC, its Investment Advisor

By:
 /s/ Mark Gottlieb

Name:
Mark Gottlieb

Title:   Member
and Chief Compliance Officer 

of
Visium Asset Management, LLC

[signatures continue on following page]

  

S-4-J

[Signature Page to Interactive First Lien/Second Lien Intercreditor
Agreement]

IMPERIAL
CAPITAL, LLC

By:
 /s/ Mark Martis

Name:
Mark Martis 

Title:   Chief
Operating Officer

  

S-4-K

[Signature Page to Interactive First Lien/Second Lien Intercreditor
Agreement]

SECOND
LIEN CLAIMHOLDERS:

TRUST
1:

ANDREW
B. CONRU TRUST AGREEMENT

By:
/s/ Andrew B. Conru

Andrew
B. Conru, Trustee

TRUST
2:

MAPSTEAD
TRUST, 

CREATED
ON APRIL 16, 2002

By:
/s/ Lars Mapstead

Lars
Mapstead, Trustee

By:
/s/ Marin A. Mapstead

Marin
A. Mapstead, Trustee

 

  

S-5

[Signature Page to Interactive First Lien/Second Lien Intercreditor
Agreement]

SCHEDULE 1

INITIAL
FIRST LIEN NOTE HOLDERS

1.

Satellite
Senior Income Fund, LLC (Class A)

2.

Epic
Distressed Debt Opportunity Master Fund, Ltd (Class A)

3.

Del
Mar Master Fund Ltd. (Class A)

4.

Rock/View
Trading, Ltd. (Class A)

5.

CAMOFI
Master LDC (Class A)

6.

CAMHZN
Master LDC (Class A)

7.

Visium
Long Bias Offshore Fund, Ltd. (Class A)

8.

Visium
Long Bias Fund, LP (Class A)

9.

Visium
Balanced Offshore Fund, Ltd. (Class A)

10.

Visium
Balanced Fund, LP (Class A)

11.

Marc
H. Bell (Class A)

12.

Staton
Family Investments, Ltd. (Class A)

13.

Imperial
Capital, LLC (Class A)

14.

Andrew
B. Conru Trust Agreement (Class B)

15.

Mapstead
Trust, created April 16, 2002 (Class B)Exhibit 4.18

Exhibit 4.18

EXECUTION VERSION

INTERCREDITOR AND SUBORDINATION AGREEMENT

(PMGI Senior Lien Notes/Subordinated Guaranty by PMGI of Interactive Notes/Marc Bell Notes/Various Seller Notes Guaranties)

This INTERCREDITOR AND SUBORDINATION AGREEMENT (this “Agreement”), is dated as of December 6, 2007, and entered into by and among:

PENTHOUSE MEDIA GROUP INC., a Nevada corporation (the “Issuer”), 

EACH SUBSIDIARY OF ISSUER THAT EXECUTES THIS AGREEMENT OR A JOINDER HERETO (each an “Issuer Subsidiary”), 

THOSE HOLDERS OF 15.0% SENIOR SECURED NOTES DUE 2010 ISSUED PURSUANT TO THE 2005 NOTE AGREEMENT (defined below) (the “2005 Holders”) THAT ARE PARTY HERETO, 

THOSE HOLDERS OF 15.0% SENIOR SECURED NOTES DUE 2010 ISSUED PURSUANT TO THE 2006 NOTE AGREEMENT (defined below) (the “2006 Holders”) THAT ARE PARTY HERETO, 

THOSE HOLDERS OF SENIOR SECURED NOTES DUE 2010 ISSUED PURSUANT TO THE SENIOR INTERACTIVE NOTE AGREEMENT (defined below) (the “Initial Senior Interactive Holders”) THAT ARE PARTY HERETO, 

THOSE HOLDERS OF SUBORDINATED SECURED NOTES DUE 2011  ISSUED PURSUANT TO THE SECOND INTERACTIVE NOTE AGREEMENT (defined below) (the “Initial Second Interactive Holders”) THAT ARE PARTY HERETO, 

THOSE HOLDERS OF THE “SELLER NOTES GUARANTIES” MADE BY ISSUER PURSUANT TO THE VARIOUS ACQUISITION AGREEMENT (defined below) AND INCORPORATED WITHIN THE “SELLER NOTES” DEFINED IN THE SECOND INTERACTIVE NOTE AGREEMENT(the “Seller Note Holders”) THAT ARE PARTY HERETO, 

THOSE HOLDERS OF THE “PET NOTES” (defined below) (the “PET Note Holders”) THAT ARE PARTY HERETO, 

U.S. BANK NATIONAL ASSOCIATION, not individually but solely in its capacity as administrative and collateral agent for and on behalf of all of the 2005 Holders pursuant to the 2005 Note Agreement (in such capacity, the “2005 Agent”), 

U.S. BANK NATIONAL ASSOCIATION, not individually but solely in its capacity as administrative and collateral agent for and on behalf of all of the 2006 Holders pursuant to the 2006 Note Agreement (in such capacity, the “2006 Agent”),

U.S. BANK NATIONAL ASSOCIATION, not individually but solely in its capacity as administrative and collateral agent for and on behalf of all of the Senior Interactive Holders pursuant to the Senior Interactive Note Agreement (in such capacity, the “Senior Interactive Agent”),

U.S. BANK NATIONAL ASSOCIATION, not individually but solely in its capacity as administrative and collateral agent for and on behalf of all of the Second Interactive Holders pursuant to the Second Interactive Note Agreement (in such capacity, the “Second Interactive Agent”), and 

PET CAPITAL PARTNERS, LLC, in its capacity as a PET Note Holder and as Agent for and on behalf of the PET Note Holders pursuant to the PET Note (in such agency capacity, the “Pet Note Agent”).

RECITALS

A.

This Agreement is being entered into in connection with:

(i) the Securities Purchase Agreement (15.0% Senior Secured Notes Due 2010) dated as of August 17, 2005, among the Issuer, the “Guarantors” defined in and party thereto, the 2005 Holders as “Holders” defined in and party thereto, and the 2005 Agent, as “Administrative Agent” and “Collateral Agent” defined therein and party thereto (as amended by the First Amendment and Limited Waiver dated as of August 23, 2007 entered into by and among the Issuer, the Issuer Subsidiaries, the 2005 Holders and the 2005 Agent, and as further amended concurrently with the execution of this Agreement, the “2005 Note Agreement”); 

(ii) the Securities Purchase Agreement (15.0% Senior Secured Notes Due 2010) (as amended concurrently with the execution of this Agreement, “2006 Note Agreement”) dated as of August 28, 2006, among the Issuer, the “Guarantors” defined in and party thereto, the 2006 Holders as “Holders” defined in and party thereto, and the 2006 Agent, as “Administrative Agent” and “Collateral Agent” defined therein and party thereto; 

2

(iii) the guaranty set forth in Section XI of the Securities Purchase Agreement ($257,337,629 Senior Secured Notes due 2011) (“Senior Interactive Note Agreement”) of even date herewith among Interactive Network, Inc., a Nevada Corporation (“Interactive”) as the “Issuer” thereunder, the subsidiaries of Interactive as the “Guarantors” thereunder, the Interactive Holders as “Holders” defined in and party thereto, the Grantors hereunder as the “Subordinated Guarantors” thereunder, and Senior Interactive Agent as “Administrative Agent” and “Collateral Agent” thereunder;  

(iv) the guaranty set forth in Section XI of the Sellers’ Securities Agreement ($80,000,000 Senior Secured Notes due 2011) (“Second Interactive Note Agreement”) of even date herewith among Interactive, as the “Issuer” thereunder, the subsidiaries of Interactive as the “Senior Subordinated Guarantors” thereunder, , the Initial Second Interactive Holders as “Holders” defined in and party thereto, the Grantors hereunder as the “Junior Subordinated Guarantors” thereunder, and Second Interactive Agent as “Administrative Agent” and “Collateral Agent” thereunder;

(v) the 13% Subordinated Term Loan Notes due 2001 (the “PET Note”) dated August 23, 2006, in the face amount of $24,441,056.14 made by Issuer and the Issuer Subsidiaries in favor of the Pet Note Holders and the Pet Note Agent; and 

(vi) the guaranty by Issuer of, and set forth in, the 6% Subordinated Convertible Notes due 2011 (the “Seller Notes”) dated of even date herewith, in the aggregate face amount of $170,000,000 made by Interactive in favor of the Andrew B. Conru Trust Agreement, Andrew B. Conru Trustee, and the Mapstead Trust, Created On April 16, 2002, Lars And Marin Mapstead Trustees, respectively (collectively, the “Seller Note Holders”) 

B.

The 2005 Note Agreement and the 2006 Note Agreement are hereinafter collectively referred to as the “Senior Lien Note Agreements.”  The 2005 Agent and the 2006 Agent are hereinafter collectively and individually as the context may require referred to as the “Senior Lien Collateral Agent.”

C.

The Senior Interactive Note Agreement and the Second Interactive Note Agreement are hereinafter collectively referred to as the “Second Lien Note Agreements.”  The Senior Interactive Agent and the Second Interactive Agent are hereinafter collectively and individually as the context may require referred to as the “Second Lien Collateral Agent.”

D.

The Obligations defined in each of the Senior Lien Note Agreements, respectively, (collectively and in the aggregate, the “Senior Lien Obligations”), are secured by the liens and security interests granted under the Security Documents defined in each the Senior Lien Note Agreements, respectively (collectively herein without differentiation, the “Senior Lien Security Agreements”).  

E.

The Obligations (as defined in the Senior Interactive Note Agreement and the Second Interactive Note Agreement, respectively) of Interactive and the Guarantors, Subordinated Guarantors and Junior Subordinated Guarantors (as defined in the Senior 

3

Interactive Note Agreement and the Second Interactive Note Agreement, respectively) as guarantors (herein collectively  the “Second Lien Obligations”) are secured by (i) the “Security Documents” executed by the Grantors and defined in the Senior Interactive Note Agreement and (ii) the “Sellers’ Security Documents” executed by the Grantors and defined in the Second Interactive Note Agreement, respectively (such “Security Documents” and “Sellers’ Security Documents” herein collectively referred to as the “Second Lien Security Agreements”).  

F.

The Pet Note and the Seller Notes Guaranties are hereinafter collectively referred to as the “Subordinated Issuer Instruments.”

G.

The obligations of the Grantors under each of the Subordinated Issuer Instruments are hereinafter collectively referred to as the “Subordinated Obligations.”

H.

The Senior Lien Note Agreements and the Second Lien Note Agreements are hereinafter collectively referred to as the “Secured Note Agreements.”  The Senior Lien Obligations and the Second Lien Obligations are hereinafter collectively referred to as the “Secured Note Obligations.”  The Senior Lien Security Agreements and the Second Lien Security Agreements are hereinafter collectively referred to as the “Secured Note Security Agreements.”  The Senior Lien Claimholders and the Second Lien Claimholders are hereinafter collectively referred to as the “Secured Note Claimholders.”  The Senior Lien Collateral Agent and the Second Lien Collateral Agent are hereinafter collectively referred to as the “Secured Note Agents” and individually in such capacity without differentiation as a “Secured Note Agent;” provided, that until Discharge of the Senior Note Obligations, references in the singular to the Secured Note Collateral Agent shall be construed as references to the Senior Lien Collateral Agent.  

I.

The 2005 Holders, the 2006 Holders, and at any relevant time, the Holders of any Senior Lien Obligations at such time and the Senior Lien Collateral Agent, in its capacity as Administrative Agent and Collateral Agent under each of the Senior Lien Note Agreements, and their successors and assigns, are collectively referred to as the “Senior Lien Claimholders” and each without differentiation as a “Senior Lien Claimholder.”  

J.

The Initial Senior Interactive Holders, the Initial Second Interactive Holders, and at any relevant time, the “Holders” of Second Lien Obligations at such time, and the Second Lien Collateral Agents, in their capacity as Administrative Agent and Collateral Agent under the Second Lien Note Agreements, and their successors and assigns, are collectively referred to as the “Second Lien Claimholders” and each without differentiation as a “Second Lien Claimholder.”  

K.

The PET Note Holders, the Seller Note Holders, and at any relevant time, the holders of any Subordinated Obligations at such time and the Pet Note Agent, in its capacity as Agent under the PET Note, and their successors and assigns, are collectively referred to as the “Subordinated Claimholders” and each without differentiation as a “Subordinated Claimholder.”  The PET Note Agent, in its capacity as collateral agent to a Subordinated Claimholder, is hereinafter referred to as the “Subordinated Collateral Agent.”

4

L.

The Second Lien Claimholders are providing secured financing to Interactive for the purpose of, among other things, paying the cash portion of the consideration to be paid to the sellers of certain securities and other assets pursuant to the Various Acquisition Agreement.  The Grantors are party to the Second Lien Note Agreements and the Second Lien Collateral Documents for the purpose of providing their secured guaranty of the Second Lien Obligations pursuant to Article XI thereof (each such Article XI being the “Grantor Guaranties”), pursuant to which the Grantors, as “Subordinated Guarantors” and “Junior Subordinated Guarantors” under the Second Lien Note Agreements have guarantied the full payment and performance of the Second Lien Obligations.  

M.

The payment obligations of the Grantors as “Subordinated Guarantors” and “Junior Subordinated Guarantors” under the Grantor Guaranties, and the enforcement of the liens granted to the Second Lien Collateral Agents under the Second Lien Collateral Documents securing the Second Lien Obligations and the payment obligations of the Grantors as “Subordinated Guarantors” and “Junior Subordinated Guarantors” under the Grantor Guaranties are to be subordinated pursuant to this Agreement to the prior payment in full and in cash of the Senior Lien Obligations.  

N.

The payment obligations of the Grantors to the Subordinated Claimholders under the Subordinated Issuer Instruments, and the enforcement of the liens granted to the PET Note Agent under the PET Note are to be subordinated pursuant to this Agreement to the prior payment in full and in cash of the Senior Lien Obligations and the Second Lien Obligations.  

O.

For avoidance of doubt, this Agreement is not intended to, nor shall it be construed to, in any way affect the priority or seniority of: (i) the Senior Lien Obligations or the security therefor as between and among Senior Lien Claimholders; (ii) the Second Lien Obligations or the security therefore as between and among the Second Lien Claimholders; or (iii) the Subordinated Obligations or the security therefore as between and among the Subordinated Claimholders.  

P.

In order to induce the Senior Lien Claimholders to waive the restrictive provisions of the Senior Lien Note Agreements to the extent necessary to permit (i) the creation, collateralization and performance of the Second Lien Obligations as senior secured first lien obligations of Interactive and its subsidiaries, (ii) the Grantors’ entry into the Grantor Guaranties and (iii) the Grantors’ grant of security interests in favor of the Second Lien Claimholders pursuant to the Second Lien Collateral Documents, (x) the Second Lien Claimholders have agreed to subordinate their right to payment of the Second Lien Obligations under the Grantor Guaranties and the enforcement of their liens and security interests under the Second Lien Security Documents to the prior payment in full in cash of the Senior Lien Obligations and (y) the Subordinated Claimholders have agreed to subordinate their right to payment of the Subordinated Obligations under the Grantor Guaranties and the enforcement of their liens and security interests under the PET Note to the prior payment in full in cash of the Senior Lien Obligations and the Second Lien Obligations.  For avoidance of doubt, this Agreement is not intended to, nor shall it be construed to, in any manner impair, restrict or subordinate the rights of the Second Lien Claimholders under the Second Lien Credit Documents as against Interactive and the and the Senior Guarantors under the Second Lien Note Agreements that are party thereto.

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

Section 1.

Definitions.

1.1

Defined Terms.  Capitalized terms used but not defined herein shall have the meanings given them in the Senior Interactive Note Agreement.  All terms defined in the Recitals are used as so defined.  As used in this Agreement, the following terms shall have the following meanings:

“Agreement” means this Intercreditor and Subordination Agreement, as amended, renewed, extended, supplemented or otherwise modified from time to time in accordance with the terms hereof.

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

“Collateral” means all of the Senior Lien Collateral, Second Lien Collateral and Subordinated Collateral.  

"Control Collateral" means any Collateral consisting of any Certificated Security, Instrument, Investment Property, Deposit Accounts (each as defined in the Uniform Commercial Code), cash and any other Collateral as to which a first priority Lien shall or may be perfected through possession or control by the secured party or any agent therefor.

"Controlled Account" means those certain Deposit Accounts or Security Accounts (each as defined in the Uniform Commercial Code) of any Grantor subject to Liens under the terms of the Senior Lien Collateral Documents and the Second Lien Collateral Documents.

“DIP Financing” has the meaning assigned to that term in Section 6.2 hereof.

“Discharge of Senior Lien Obligations” means the Senior Lien Obligations being Paid in Full.

“Discharge of Secured Note Obligations” means the Secured Note Obligations, collectively, being Paid in Full.

“Disposition” has the meaning set forth in Section 5.1(a)(ii).

“Family Group” with respect to any holders of Second Interactive Notes, means the spouse, siblings and descendants (whether or not adopted) of any such holder of Second Interactive Notes or if such holder of Second Interactive Notes is a limited liability company, a member of such holder of Second Interactive Notes and any trust, family limited partnership or limited liability company that is and remains solely for the benefit of such holder of Second Interactive Notes and/or such holder of Second Interactive Notes’ spouse, siblings and/or descendants.

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“Grantors” means collectively the Issuer and each Guarantor that executes and delivers, or may from time to time hereafter execute and deliver, the Second Lien Note Agreements and/or any Second Lien Collateral Document.

“Guarantor” means each subsidiary or affiliate of Issuer (for avoidance of doubt, other than Interactive or any direct or indirect subsidiary of Interactive) that executes the Grantor Guaranties or a joinder thereto as a “Guarantor,” “Subordinated Guarantor” or “Junior Subordinated Guarantor” thereunder.

“Insolvency Proceeding” means as to any Obligor (i) any proceeding, voluntary case or involuntary case seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for any such Obligor or for any substantial part of its property or (ii) shall make a general assignment for the benefit of creditors.

“Issuer” has the meaning assigned to that term in the Preamble hereto.

“New Senior Lien Collateral Agent” has the meaning assigned to that term in Section 5.7 hereof.  

“Paid in Full” and “Payment in Full” each mean the occurrence of both of (i) the indefeasible payment in full in cash and performance of all Senior Lien Obligations and/or Second Lien Obligations, as the context may require and (ii) termination of the Senior Lien Obligations under the Senior Lien Note Documents in connection with such payment in full and/or termination of the Second Lien Obligations under the Second Lien Credit Documents, as the context may require.  For avoidance of doubt, any termination of rights and remedies of Senior Lien Claimholders and/or Second Lien Creditors, as the context may require, that is provided for in this Agreement upon Payment in Full shall be subject to the continuing effectiveness of Section 8.18 of this Agreement. 

“Recovery” has the meaning set forth in Section 8.18 hereof.

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

“Second Interactive Notes” means the notes issued pursuant to the Second Interactive Note Agreement.

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“Second Lien Collateral” means all Senior Lien Primary Assets, whether real, personal or mixed, with respect to which a Lien is granted pursuant to any Second Lien Collateral Document as security for or otherwise secures any Second Lien Obligations.  

“Second Lien Collateral Documents” means the Second Lien Security Agreements and any other mortgage, lockbox agreement, account control agreement, landlord waiver or bailee’s letter or similar agreement or arrangement, or other agreement, document or instrument pursuant to which a Lien is granted securing any Second Lien Obligations or under which rights or remedies with respect to such Liens are governed.

“Second Lien Credit Documents” means the Second Lien Note Agreements, the Grantor Guaranties, the Second Lien Collateral Documents and the other agreements, documents and instruments providing for or evidencing any other Second Lien Obligations, and any other document or instrument executed or delivered at any time in connection with any Second Lien Obligations, as the same may be modified from time to time pursuant hereto.  

“Second Lien Note Documents” means, collectively, the Second Lien Note Agreements (including the Grantor Guaranties), the Second Lien Notes, the Second Lien Collateral Documents, and each of the other agreements, documents and instruments providing for or evidencing any other Second Lien Obligation, and any other document or instrument executed or delivered at any time in connection with any Second Lien Obligations, including any intercreditor or joinder agreement among holders of Second Lien Obligations, to the extent such are effective at the relevant time, as each may be modified or Refinanced from time to time.

“Second Lien Notes” means, collectively, the Senior Interactive Notes and the Second Interactive Notes.

“Secured Note Documents” means, collectively, the Senior Lien Note Documents and the Second Lien Note Documents.

“Senior Interactive Notes” means, collectively, the notes issued pursuant to the Senior Interactive Note Agreement.

“Senior Lien Collateral” means all Senior Lien Primary Assets, whether real, personal or mixed, with respect to which a Lien is granted pursuant to a Senior Lien Collateral Document as security for, or otherwise secures, any Senior Lien Obligations.

“Senior Lien Collateral Documents” means, collectively, the Senior Lien Security Agreements and any other mortgage, lockbox agreement, account control agreement, landlord waiver or bailee’s letter or similar agreement or arrangement, or other agreement, document or instrument pursuant to which a Lien is granted securing any Senior Lien Obligations or under which rights or remedies with respect to such Liens are governed.

“Senior Lien Note Documents” means, collectively, the Senior Lien Note Agreements, the Senior Lien Notes, the Senior Lien Collateral Documents, and each of the other agreements, documents and instruments providing for or evidencing any other Senior Lien Obligation, and any other document or instrument executed or delivered at any time in connection with any 

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Senior Lien Obligations, including any intercreditor or joinder agreement among holders of Senior Lien Obligations, to the extent such are effective at the relevant time, as each may be modified or Refinanced from time to time.

“Senior Lien Notes” means, collectively, the notes issued pursuant either to the 2005 Note Agreement or the 2006 Note Agreement.

“Senior Lien Primary Assets” means the Issuer and its Subsidiaries and all of their assets, but excluding Interactive and its Subsidiaries and all of their assets.  A payment shall only be deemed to be made from the Senior Lien Primary Assets if it constitutes solely proceeds of the sale, disposition or enforcement of rights against any Senior Lien Primary Assets (including demand under any guaranty of any entity included in the Senior Lien Primary Assets).

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

“Subordinated Collateral Documents” means, collectively, the PET Note and any other security agreement, mortgage, lockbox agreement, account control agreement, landlord waiver or bailee’s letter or similar agreement or arrangement, or other agreement, document or instrument pursuant to which a Lien is granted securing any Subordinated Obligations or under which rights or remedies with respect to such Liens are governed.

“Subordinated Credit Documents” means the Pet Note, the Seller Notes Guaranties, the Subordinated Lien Collateral Documents, and each of the other agreements, documents and instruments providing for or evidencing any other Subordinated Obligation, and any other document or instrument executed or delivered at any time in connection with any Subordinated Obligations, including any intercreditor or joinder agreement among holders of Subordinated Obligations, to the extent such are effective at the relevant time, as each may be modified or Refinanced from time to time.

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

“Various Acquisition Agreement” means the Stock Purchase Agreement, dated as of September 21, 2007, by and among Various, Inc., the Andrew B. Conru Trust Agreement, Andrew B. Conru Trustee, the Mapstead Trust, created on April 16, 2002, Lars and Marin Mapstead Trustees, Andrew B. Conru, Lars Mapstead and Penthouse Media Group Inc., as amended as of the date hereof.

1.2

Terms Generally.  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, 

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instrument or other document as from time to time amended, supplemented or otherwise modified, (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Exhibits or Sections shall be construed to refer to Exhibits or Sections of this Agreement, and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

1.3

Relationship Among Claimholders in each Tranche.  The terms and provisions of this Agreement shall not govern the relationship of the Senior Lien Claimholders or the Second Lien Claimholders as among themselves, which relationship shall be governed by the provisions of the Senior Lien Note Documents or the Second Lien Note Documents, respectively.  

1.4

Agents’ Agreement Binding on All Holders of Respective Notes.  The 2005 Holders party hereto hereby represent and warrant, that this Agreement has been approved and executed  by the “Required Holders” as defined in the 2005 Note Agreement and that such “Required Holders” further authorized the 2005 Agent to enter into and deliver this Agreement.   The 2006 Holders party hereto hereby represent and warrant, that this Agreement has been approved and executed  by the “Required Holders” as defined in the 2006 Note Agreement and that such “Required Holders” further authorized the 2006 Agent to enter into and deliver this Agreement.  The Initial Senior Interactive Holders party hereto hereby represent and warrant, that this Agreement has been approved and executed  by the “Required Holders” as defined in the Senior Interactive Note Agreement and that such “Required Holders” further authorized the Senior Interactive Agent to enter into and deliver this Agreement on behalf of and with the power to legally bind all persons who currently are and who in the future become Holders of Senior Interactive Notes to the terms of this Agreement, including the consents set forth in Section 1.5.  The Initial Second Interactive Holders party hereto hereby represent and warrant, that this Agreement has been approved and executed  by the “Required Holders” as defined in the Second Interactive Note Agreement and that such “Required Holders” further authorized the Second Interactive Agent to enter into and deliver this Agreement on behalf of and with the power to legally bind all persons who currently are and who in the future become Holders of Second Interactive Notes to the terms of this Agreement, including the consents set forth in Section 1.5.  The PET Note Agent hereby confirms, and the PET Note Holders party hereto hereby represent and warrant, that this Agreement has been approved and executed  by the “Required Holders” as defined in the PET Note and that such “Required Holders” further authorized the PET Note Agent to enter into and deliver this Agreement on behalf of and with the power to legally bind all persons who currently are and who in the future become Holders of PET Notes to the terms of this Agreement, including the consents set forth in Section 1.5(b).   

1.5

Waivers and Consents.  

(a) 

The Senior Lien Claimholders, acting by and through their duly authorized Senior Lien Agents, do hereby acknowledge that they have waived the restrictive provisions of the Senior Lien Note Agreements to the extent necessary to permit (i) the creation, collateralization and performance of the Second Lien Obligations as senior secured first lien obligations of 

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Interactive and its subsidiaries, (ii) the Grantors’ entry into the Grantor Guaranties and (iii) the Grantors’ grant of security interests in favor of the Second Lien Claimholders pursuant to the Second Lien Collateral Documents.  

(b) 

The PET Note Holders, acting by and through their duly authorized PET Agent, do hereby to (i) consent to the transactions contemplated by the Various Acquisition Agreement, (ii) consent to the creation and collateralization of the Second Lien Obligations and the consummation of the other transactions contemplated in the Second Lien Note Agreements as senior secured obligations of Interactive and its subsidiaries, (iii) consent to the Grantors’ entry into the Grantor Guaranties and (iv) consent to the Grantors’ grant of security interests in favor of the Second Lien Claimholders pursuant to the Second Lien Collateral Documents. 

1.6

No Limitations Except as to Senior Lien Primary Assets.  Notwithstanding any other provision of this Agreement to the contrary, nothing contained herein shall be construed to limit, restrict, abridge, diminish or in any way impair any right, remedy, benefit or privilege available to the Second Lien Claimholders under the Second Lien Credit Documents, applicable law or otherwise, except with respect to the Senior Lien Primary Assets.

Section 2.

Lien Priorities.

2.1

Relative Priorities.  

(a)

Notwithstanding the date, manner or order of grant, attachment or perfection of any Liens securing the Second Lien Obligations granted on any of the Collateral, or of any Liens securing the Senior Lien Obligations granted on any of the Collateral and notwithstanding any provision of the UCC or any other applicable law or the provisions of the Second Lien Credit Documents or any other circumstance whatsoever (including, without limitation, the time, order or method of grant, attachment, recording or perfection of any financing statements or other security interests, assignments, pledges, deeds, mortgages and other liens, charges or encumbrances or any defect or deficiency or alleged defect or deficiency in, or omission with respect to, any of the foregoing, or the fact that any such Liens securing Senior Lien Obligations are at any time (x) subordinated to any Lien securing any obligation of any Person or to any Indebtedness in favor of any Person or (y) otherwise subordinated (whether consensually, by court order or otherwise), voided, avoided, invalidated or lapsed), the Second Lien Claimholders hereby agree that:  (a) any Lien on the Collateral or any part thereof securing any Senior Lien Obligations now or hereafter held by or on behalf of the Senior Lien Collateral Agent or any Senior Lien Claimholders or any agent or trustee therefor, regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be senior in all respects and prior to any Lien on the Collateral or any part thereof securing any Second Lien Obligations; and (b) any Lien on the Collateral or any part thereof now or hereafter held by or on behalf of  any Second Lien Claimholder or any agent or trustee therefor, regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be junior and subordinate in all respects to all Liens on the Collateral securing any Senior Lien Obligations.  All Liens on the Collateral securing any Senior Lien Obligations shall be and remain senior in all respects and prior to all Liens on the Collateral securing any 

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Second Lien Obligations for all purposes, regardless of the time, order or method of grant, attachment, recording or perfection of any financing statements or other security interests, assignments, pledges, deeds, mortgages and other liens, charges or encumbrances or any defect or deficiency or alleged defect or deficiency in, or omission with respect to, any of the foregoing, or the fact that any such Liens in favor of any Senior Lien Collateral Agent are (x) subordinated to any Lien securing any obligation of any Person or to any Indebtedness in favor of any Person or (y) otherwise subordinated (whether consensually, by court order or otherwise), voided, avoided, invalidated or lapsed.

(b)

Notwithstanding the date, manner or order of grant, attachment or perfection of any Liens securing the Subordinated Obligations granted on the Collateral, or of any Liens securing the Secured Note Obligations granted on the Collateral and notwithstanding any provision of the UCC or any other applicable law or the provisions of the Subordinated Credit Documents or any other circumstance whatsoever (including, without limitation, the time, order or method of grant, attachment, recording or perfection of any financing statements or other security interests, assignments, pledges, deeds, mortgages and other liens, charges or encumbrances or any defect or deficiency or alleged defect or deficiency in any of the foregoing, or the fact that any such Liens securing Secured Note Obligations are at any time (x) subordinated to any Lien securing any obligation of any Person or to any Indebtedness in favor of any Person or (y) otherwise subordinated (whether consensually, by court order or otherwise), voided, avoided, invalidated or lapsed), the Subordinated Claimholders hereby agree that:  (a) any Lien on the Collateral or any part thereof securing any Secured Note Obligations now or hereafter held by or on behalf of the Secured Note Collateral Agent or any Secured Note Claimholders or any agent or trustee therefor, regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be senior in all respects and prior to any Lien on the Collateral or any part thereof securing any Subordinated Obligations; and (b) any Lien on the Collateral or any part thereof  now or hereafter held by or on behalf of  any Subordinated Claimholder or any agent or trustee therefor, regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be junior and subordinate in all respects to all Liens on the Collateral securing any Secured Note Obligations.  All Liens on the Collateral securing any Secured Note Obligations shall be and remain senior in all respects and prior to all Liens on the Collateral securing any Subordinated Obligations for all purposes, regardless of the time, order or method of grant, attachment, recording or perfection of any financing statements or other security interests, assignments, pledges, deeds, mortgages and other liens, charges or encumbrances or any defect or deficiency or alleged defect or deficiency in, or omission with respect to, any of the foregoing, or the fact that any such Liens in favor of any Secured Note Collateral Agent are (x) subordinated to any Lien securing any obligation of any Person or to any Indebtedness in favor of any Person or (y) otherwise subordinated (whether consensually, by court order or otherwise), voided, avoided, invalidated or lapsed.

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2.2

Prohibition on Contesting Liens.  

(a)

Each Second Lien Claimholder, and the Senior Lien Collateral Agent, for itself and on behalf of each Senior Lien Claimholder, agrees that it shall not (and hereby waives any right to) contest, or support any other Person in contesting, in any proceeding (including any Insolvency Proceeding), the priority, validity or enforceability of a Lien held by or on behalf of any of the Senior Lien Claimholders in the Senior Lien Collateral or by or on behalf of any of the Second Lien Claimholders in the Second Lien Collateral, as the case may be; provided that nothing in this Agreement shall be construed to prevent or impair the rights of the Senior Lien Collateral Agent or any Senior Lien Claimholder to enforce this Agreement, including the priority of the Liens securing the Senior Lien Obligations as provided in Sections 2.1 and 3.1, and release of the Liens encumbering Second Lien Collateral as provided in Section 5.

(b)

Each Subordinated Claimholder, and the Secured Note Collateral Agents, for themselves and on behalf of each Secured Note Claimholder, agree that it shall not (and hereby waives any right to) contest, or support any other Person in contesting, in any proceeding (including any Insolvency Proceeding), the priority, validity or enforceability of a Lien held by or on behalf of any of the Secured Note Claimholders in the Secured Note Collateral or by or on behalf of any of the Subordinated Claimholders in the Subordinated Collateral, as the case may be; provided that nothing in this Agreement shall be construed to prevent or impair the rights of the Secured Note Collateral Agents or any Secured Note Claimholder to enforce this Agreement, including the priority of the Liens securing the Secured Note Obligations as provided in Sections 2.1 and 3.1, and release of the Liens encumbering Subordinated Collateral as provided in Section 5.

2.3

No New Liens.  

(a)

So long as the Discharge of Senior Lien Obligations has not occurred, the parties hereto agree that the Issuer shall not, and shall not permit any Issuer Subsidiary to, grant or permit any additional Liens on any asset or property to secure any Second Lien Obligation unless it has granted a Lien on such asset or property to secure the Senior Lien Obligations.  To the extent that the foregoing provisions are not complied with for any reason, without limiting any other rights and remedies available to the Senior Lien Collateral Agent and/or the Senior Lien Claimholders, the Second Lien Claimholders agree that any amounts, property, priorities or other benefits received by, distributed to or otherwise inuring to the benefit of, any of them pursuant to or as a result of Liens granted in contravention of this Section 2.3 shall be subject to Section 4.3.

(b)

So long as the Discharge of Secured Note Obligations has not occurred, the parties hereto agree that the Issuer shall not, and shall not permit any Issuer Subsidiary to, grant or permit any additional Liens on any asset or property to secure any Subordinated Obligation unless it has granted a Lien on such asset or property to secure the Secured Note Obligations.  To the extent that the foregoing provisions are not complied with for any reason, without limiting any other rights and remedies available to the Secured Notes Collateral Agent and/or the Secured Notes Claimholders, the Subordinated Claimholders agree that any amounts, property, priorities or other benefits received by, distributed to or otherwise inuring to the benefit of, any of them pursuant to or as a result of Liens granted in contravention of this Section 2.3 shall be subject to Section 4.3.

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2.4

Senior Lien on Equity of Interactive.  Notwithstanding anything to the contrary set forth herein, the Senior Lien Claimholders each acknowledge and agree that the Lien of the Second Lien Claimholders pursuant to the Second Lien Collateral Documents on the equity issued by Interactive may be enforced by the Second Lien Collateral Agents for the benefit of the Second Lien Claimholders pursuant to the terms of the Second Lien Credit Agreements without regard for the terms of this Agreement.

2.5

Limitation on Scope of Provision.  For avoidance of doubt, nothing set forth in this Section is intended to subordinate, affect, impair or otherwise restrict in any manner the Lien in favor of Second Lien Claimholders on equity issued by Interactive, property of Interactive or its Subsidiaries or the enforcement thereof against such property.

Section 3.

Enforcement.

3.1

Exercise of Remedies by Second Lien Claimholders.  

(a)

So long as the Discharge of Senior Lien Obligations has not occurred (but subject to the Second Lien Claimholders’ rights under Section 4.1), whether or not any Insolvency Proceeding has been commenced by or against the Issuer or any other Grantor:

(i)

subject to the limited rights of the Second Lien Claimholders under Section 4.1 to make demand for and receive payment of interest in the specific circumstances provided in that Section, the Second Lien Claimholders will not accelerate, make any demand for or accept any payment under the Grantor Guaranties or exercise or seek to exercise any other rights or remedies in respect of the Second Lien Obligations (including set-off) under any Second Lien Credit Documents (including, without limitation, the exercise of any right under any Second Lien Collateral Document to which a Grantor is a party) or institute any action or proceeding with respect to such rights or remedies (including any action of foreclosure).

(ii)

no Second Lien Claimholder will (a) contest, protest or object to any enforcement or foreclosure proceeding or action brought by the Senior Lien Collateral Agent or any Senior Lien Claimholder or any other exercise by the Senior Lien Collateral Agent or any Senior Lien Claimholder, of any rights and remedies under the Senior Lien Note Documents or otherwise, or (b) object to the forbearance by the Senior Lien Collateral Agent or the Senior Lien Claimholders from bringing or pursuing any enforcement or foreclosure proceeding or action or any other exercise of any rights or remedies against the Issuer or the Guarantor, in each case so long as the respective interests of the Second Lien Claimholders attach to any remaining proceeds of foreclosure proceedings against the Collateral, after application to the Senior Lien Obligations and subject to the relative priorities described in Section 2 hereof; and

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(iii)

the Senior Lien Collateral Agent and the Senior Lien Claimholders shall have the exclusive right to enforce rights, exercise remedies (including set-off and the right to credit bid their debt) and make determinations regarding the release, disposition, or restrictions with respect to the Collateral without any consultation with or the consent of the Second Lien Claimholder; provided, that (A) in any Insolvency Proceeding commenced by or against the Issuer or any other Grantor, any Second Lien Claimholder may file a proof of claim or statement of interest with respect to the Second Lien Obligations, (B) any Second Lien Claimholder may take any action (not adverse, as reasonably determined by the Senior Lien Claimholders, to the prior Liens on the Collateral securing the Senior Lien Obligations, or the rights of the Senior Lien Collateral Agent or any Senior Lien Claimholders to exercise remedies in respect thereof and not inconsistent with the term of this Agreement) in order to preserve or protect its Lien on the Collateral, (C) the Second Lien Claimholders shall be entitled to file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any Person objecting to or otherwise seeking the disallowance of the claims of the Second Lien Claimholders, including without limitation any claims secured by the Collateral, if any, in each case in accordance with the terms of this Agreement, (D) the Second Lien Claimholders shall be entitled to file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Grantors arising under either Bankruptcy Law or applicable non-bankruptcy law, in each case in accordance with the terms of this Agreement, and (E) the Second Lien Claimholders shall be entitled to file any proof of claim and other filings and make any arguments and motions that are, in each case, in accordance with the terms of this Agreement, with respect to the Second Lien Obligations and the Collateral.  

(b)

In exercising rights and remedies with respect to the Collateral, the Senior Lien Collateral Agent and the Senior Lien Claimholders may enforce the provisions of the Senior Lien Note Documents and exercise remedies thereunder, all in such order and in such manner as they may determine in the exercise of their sole discretion.  Such exercise and enforcement shall include the rights of an agent appointed by them to sell or otherwise dispose of Collateral upon foreclosure, to incur expenses in connection with such sale or disposition, and to exercise, in addition to the rights and remedies provided under the Senior Lien Note Documents, all the rights and remedies of a secured creditor under the Uniform Commercial Code of any applicable jurisdiction and of a secured creditor under Bankruptcy Laws of any applicable jurisdiction, all such rights and remedies being cumulative and not exclusive.

(c)

So long as the Discharge of Senior Lien Obligations has not occurred (but subject to the Second Lien Claimholders’ rights under Section 4.1), whether or not any Insolvency Proceeding has been commenced by or against the Issuer or any other Grantor, the Second Lien Claimholders agree that they will not take or receive any Collateral or any proceeds of Collateral in connection with the exercise of any right or remedy (including set-off) with respect to any Collateral.  Without limiting the generality of the foregoing, unless and until the Discharge of Senior Lien Obligations has occurred (but subject to the Second Lien Claimholders’ rights under Section 4.1), the sole right of the Second Lien Claimholders with respect to the Collateral is to hold a Lien on the 

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Collateral pursuant to the Second Lien Collateral Documents for the period and to the extent granted therein and to receive a share of the proceeds thereof, if any, after the Discharge of the Senior Lien Obligations has occurred and in accordance with the terms of the Second Lien Credit Documents and applicable law.

(d)

The Second Lien Claimholders (i) agree that the Second Lien Claimholders will not take any action that would hinder any exercise of remedies under the Senior Lien Note Documents or that is otherwise prohibited hereunder, including any sale, lease, exchange, transfer or other disposition of the Collateral, whether by foreclosure or otherwise, and (ii) hereby waive any and all rights they may have as a junior lien creditor or otherwise to object to the manner in which the Senior Lien Collateral Agent or the Senior Lien Claimholders seek to enforce or collect the Senior Lien Obligations or the Liens granted in any of the Senior Lien Collateral, regardless of whether any action or failure to act by or on behalf of the Senior Lien Collateral Agent or Senior Lien Claimholders is adverse to the interest of the Second Lien Claimholders.

(e)

Each Second Lien Claimholder hereby acknowledges and agrees that no covenant, agreement or restriction contained in the Second Lien Collateral Documents or any other Second Lien Credit Document shall be deemed to restrict in any way the rights and remedies of the Senior Lien Collateral Agent or the Senior Lien Claimholders with respect to the Collateral as set forth in this Agreement and the Senior Lien Note Documents.

(f)

Notwithstanding anything to the contrary set forth in the Second Lien Credit Documents, no rights or remedies may be enforced, and no notices or demands may be given, with respect to any Senior Lien Primary Assets as a consequence of an Event of Default arising solely under (and as defined in) any cross default provision of the Second Lien Credit Documents by reason of the occurrence of an Event of Default under (and as defined in) Senior Lien Note Agreements, unless such Event of Default has continued without permanent or temporary waiver or cure for more than 180 days.  Upon a cure or permanent or temporary waiver of any Event of Default under the Senior Lien Note Agreements, any Event of Default under the Second Lien Credit Documents that arises solely as a result of a cross default provision under the Second Lien Credit Documents shall thereupon be automatically and concurrently be deemed cured or permanently or temporarily waived, as applicable, to the same extent as the cure or permanent or temporary waiver under the Senior Lien Note Documents.

3.2

Exercise of Remedies by Subordinated Claimholders.  

(a)

So long as the Discharge of Secured Note Obligations has not occurred, whether or not any Insolvency Proceeding has been commenced by or against the Issuer or any other Grantor:

(i)

the Subordinated Claimholders will not accelerate, make any demand for or accept any payment under the Grantor Guaranties or exercise or seek to exercise any other rights or remedies in respect of the Subordinated Obligations (including set-off) under any Subordinated Credit Documents (including, without 

16

limitation, the exercise of any right under any Subordinated Collateral Document to which a Grantor is a party) or institute any action or proceeding with respect to such rights or remedies (including any action of foreclosure or action on a judgment).

(ii)

no Subordinated Claimholder will (a) contest, protest or object to any enforcement or foreclosure proceeding or action brought by the Secured Note Collateral Agent or any Secured Note Claimholder or any other exercise by the Secured Note Collateral Agent or any Secured Note Claimholder, of any rights and remedies under the Secured Note Documents or otherwise, or (b) object to the forbearance by the Secured Note Collateral Agent or the Secured Note Claimholders from bringing or pursuing any enforcement or foreclosure proceeding or action or any other exercise of any rights or remedies against the Issuer or the Guarantor, in each case so long as the respective interests of the Subordinated Claimholders attach to any remaining proceeds of foreclosure proceedings against the Collateral, after application to the Secured Note Obligations and subject to the relative priorities described in Section 2 hereof; and

(iii)

the applicable Secured Note Collateral Agent and the Secured Note Claimholders shall have the exclusive right to enforce rights, exercise remedies (including set-off and the right to credit bid their debt) and make determinations regarding the release, disposition, or restrictions with respect to the Collateral without any consultation with or the consent of the Subordinated Claimholder; provided, that (A) in any Insolvency Proceeding commenced by or against the Issuer or any other Grantor, any Subordinated Claimholder may file a proof of claim or statement of interest with respect to the Subordinated Obligations, (B) any Subordinated Claimholder may take any action (not adverse, as reasonably determined by the Secured Note Claimholders, to the prior Liens on the Collateral securing the Secured Note Obligations, or the rights of the Secured Note Collateral Agent or any Secured Note Claimholders to exercise remedies in respect thereof and not inconsistent with the term of this Agreement) in order to preserve or protect its Lien on the Collateral, (C) the Subordinated Claimholders shall be entitled to file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any Person objecting to or otherwise seeking the disallowance of the claims of the Subordinated Claimholders, including without limitation any claims secured by the Collateral, if any, in each case in accordance with the terms of this Agreement, (D) the Subordinated Claimholders shall be entitled to file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Grantors arising under either Bankruptcy Law or applicable non-bankruptcy law, in each case in accordance with the terms of this Agreement, and (E) the Subordinated Claimholders shall be entitled to file any proof of claim and other filings and make any arguments and motions that are, in each case, in accordance with the terms of this Agreement, with respect to the Subordinated Obligations and the Collateral.  

(b)

In exercising rights and remedies with respect to the Collateral, the Secured Note Collateral Agent and the Secured Note Claimholders may enforce the provisions of the Secured Note Documents and exercise remedies thereunder, all in such order and in such manner as they may determine in the exercise of their sole discretion.  

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Such exercise and enforcement shall include the rights of an agent appointed by them to sell or otherwise dispose of Collateral upon foreclosure, to incur expenses in connection with such sale or disposition, and to exercise, in addition to the rights and remedies provided under the Secured Note Documents, all the rights and remedies of a secured creditor under the Uniform Commercial Code of any applicable jurisdiction and of a secured creditor under Bankruptcy Laws of any applicable jurisdiction, all such rights and remedies being cumulative and not exclusive.

(c)

So long as the Discharge of Secured Note Obligations has not occurred (but subject to the Subordinated Claimholders’ rights under Section 4.1), whether or not any Insolvency Proceeding has been commenced by or against the Issuer or any other Grantor, the Subordinated Claimholders agree that they will not take or receive any Collateral or any proceeds of Collateral in connection with the exercise of any right or remedy (including set-off) with respect to any Collateral.  Without limiting the generality of the foregoing, unless and until the Discharge of Secured Note Obligations has occurred (but subject to the Subordinated Claimholders’ rights under Section 4.1), the sole right of the Subordinated Claimholders with respect to the Collateral is to hold a Lien on the Collateral pursuant to the Subordinated Collateral Documents for the period and to the extent granted therein and to receive a share of the proceeds thereof, if any, after the Discharge of the Secured Note Obligations has occurred and in accordance with the terms of the Subordinated Credit Documents and applicable law.

(d)

The Subordinated Claimholders (i) agree that the Subordinated Claimholders will not take any action that would hinder any exercise of remedies under the Secured Note Documents or that is otherwise prohibited hereunder, including any sale, lease, exchange, transfer or other disposition of the Collateral, whether by foreclosure or otherwise, and (ii) hereby waive any and all rights they may have as a junior lien creditor or otherwise to object to the manner in which the Secured Note Collateral Agent or the Secured Note Claimholders seek to enforce or collect the Secured Note Obligations or the Liens granted in any of the Secured Note Collateral, regardless of whether any action or failure to act by or on behalf of the Secured Note Collateral Agent or Secured Note Claimholders is adverse to the interest of the Subordinated Claimholders.

(e)

Each Subordinated Claimholder hereby acknowledges and agrees that no covenant, agreement or restriction contained in the Subordinated Collateral Documents or any other Subordinated Credit Document shall be deemed to restrict in any way the rights and remedies of the Secured Note Collateral Agent or the Secured Note Claimholders with respect to the Collateral as set forth in this Agreement and the Secured Note Documents.

(f)

Notwithstanding anything to the contrary set forth in the Subordinated Credit Documents, no rights or remedies may be enforced, and no notices or demands may be given, with respect to an Event of Default arising solely under (and as defined in) any cross default provision of the Subordinated Credit Documents by reason of the occurrence of an Event of Default under (and as defined in) a Senior Note Credit 

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Agreement unless such Event of Default has continued without permanent or temporary waiver or cure for more than 180 days.  Upon a cure or permanent or temporary waiver of any Event of Default under the Secured Note Agreements, any Event of Default under the Subordinated Credit Documents that arises solely as a result of a cross default provision under the Subordinated Credit Documents shall thereupon be automatically and concurrently be deemed cured or permanently or temporarily waived, as applicable, to the same extent as the cure or permanent or temporary waiver under the Secured Note Documents.

3.3

Cooperation.  

(a)

The Second Lien Claimholders agree that, unless and until the Discharge of Senior Lien Obligations has occurred, they will not commence, or join with any Person in commencing, any enforcement, collection, execution, levy or foreclosure action or proceeding (including, without limitation, any Insolvency Proceeding) with respect to any Lien held by them on Senior Lien Primary Assets under the Second Lien Collateral Documents or any other Second Lien Credit Document or otherwise.  Following the Discharge of the Senior Lien Obligations, Senior Lien Collateral Agent shall reasonably promptly execute documents and take other steps that Senior Lien Collateral Agent determines to be reasonably necessary, at the expense of the Second Lien Claimholders, to transfer to the Second Lien Claimholders all deposit account control agreements and other similar Senior Lien Collateral Documents in which Second Lien Claimholders have a residual interest for continuing perfection of heretofore shared Liens.

(b)

The Subordinated Claimholders agree that, unless and until the Discharge of Secured Note Obligations has occurred, they will not commence, or join with any Person in commencing, any enforcement, collection, execution, levy or foreclosure action or proceeding (including, without limitation, any Insolvency Proceeding) with respect to any Lien held by them under the Subordinated Collateral Documents or any other Subordinated Credit Document or otherwise.  Following the Discharge of the Secured Note Obligations, Secured Note Collateral Agent shall reasonably promptly execute documents and take other steps that Secured Note Collateral Agent determines to be reasonably necessary, at the expense of the Subordinated Claimholders, to transfer to the Subordinated Claimholders all deposit account control agreements and other similar Secured Note Collateral Documents in which Subordinated Claimholders have a residual interest for continuing perfection of heretofore shared Liens.

3.4

Limitation on Scope of Provision.  For avoidance of doubt, nothing set forth in this Section is intended to subordinate, affect, impair or otherwise restrict in any manner the rights of the Second Lien Claimholders to take any action available at law, by contract or in equity to enforce all of their rights and remedies under the Second Lien Credit Documents and applicable law against Interactive or its Subsidiaries and each of their respective assets.

Section 4.

Payment Subordination.

4.1

Subordination of Payment of Second Lien Obligations.  i) Each Senior Lien Claimholder acknowledges and agrees that Grantors may make transfers to the Second 

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Lien Claimholders from the Senior Lien Primary Assets to the extent not prohibited by  the Senior Lien Note Agreements.  Except as set forth in the preceding sentence, each Second Lien Claimholder hereby agrees, in each case with respect to each Second Lien Obligation now or hereafter held by such Second Lien Claimholder, that until the Discharge of the Senior Lien Obligations, no payments may be made by or on behalf of Issuer or any Guarantor, and no such payments if made in contravention hereof shall be accepted by any Second Lien Claimholder from Senior Lien Primary Assets, in respect of the Second Lien Obligations, whether or not such Second Lien Obligations have become due and payable for any reason whatsoever, and any payments so received by or for the benefit of a Second Lien Claimholder shall be immediately turned over to the Senior Lien Collateral Agent pursuant to Section 4.3, below.  Each Second Lien Claimholder further agrees that any payments received by or for the benefit of a Second Lien Claimholder in respect of such Claimholder’s Second Lien Obligations (both before and after maturity thereof) in any manner and from the Senior Lien Primary Assets shall be conclusively presumed to constitute Collateral or proceeds of Collateral.  

(b)

For avoidance of doubt, no payment may be paid from the Senior Lien Primary Assets by or on behalf of Issuer or any Guarantor, or received by or for the benefit of any Second Lien Claimholder, on account of any Second Lien Obligation after a Default or an Event of Default (as such terms are respectively defined in the Senior Lien Note Agreements) has occurred under the Senior Lien Note Agreements and while such Default or Event of Default is continuing.  Notwithstanding the occurrence of a default in any obligation to make payments to a Second Lien Claimholder when permitted pursuant to this Section 4.1, and notwithstanding anything to the contrary set forth in this Agreement, but subject in all other respects to the terms of this Agreement, including the turnover provisions set forth in Section 4.3, neither the Second Lien Collateral Agent nor any other Second Lien Claimholder may take any action, make written demand for payment or commence any lawsuit against Issuer or any Guarantor, nor take any judicial or non-judicial action to enforce any lien securing such Second Lien Obligation nor commence an Insolvency Proceeding with respect to payment from any Senior Lien Primary Assets.  

(c)

Each Subordinated Claimholder hereby agrees, in each case with respect to each Subordinated Note or other Subordinated Obligation now or hereafter held by such Subordinated Claimholder, that (i) until the Discharge of the Secured Note Obligations, no payments may be made by or on behalf of Issuer or any Guarantor, and no such payments if made in contravention hereof shall be accepted by any Subordinated Claimholder, in respect of the Subordinated Obligations, whether or not such Subordinated Obligations have become due and payable for any reason whatsoever and regardless of the source of such payments, and any payments so received by or for the benefit of a Subordinated Claimholder shall be immediately turned over to the Secured Note Collateral Agent pursuant to Section 4.3, below.  Each Subordinated Claimholder further agrees that any payments received by or for the benefit of a Subordinated Claimholder in respect of such Claimholder’s Subordinated Obligations (both before and after maturity thereof) in any manner and from any source whatsoever shall be conclusively presumed to constitute Collateral or proceeds of Collateral.  

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4.2

Application of Proceeds and Payments.  

(a)

So long as the Discharge of Senior Lien Obligations has not occurred, any Collateral or proceeds thereof received by the Senior Lien Collateral Agent in connection with the sale or other disposition of, or collection on, such Collateral upon the exercise of remedies or in connection with any Insolvency Proceeding, shall be applied by the Senior Lien Collateral Agent to the Senior Lien Obligations in such order as specified in the relevant Senior Lien Note Documents.  Upon the Discharge of the Senior Lien Obligations, the Senior Lien Collateral Agent shall deliver to the Second Lien Claimholders any proceeds of Collateral held by the Senior Lien Collateral Agent in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct to be applied by the Second Lien Claimholders to the Second Lien Obligations in such order as specified in the relevant Second Lien Collateral Documents.

(b)

In the event of any Insolvency Proceeding involving the Issuer or any Guarantor, all Senior Lien Obligations shall first be Paid in Full in cash before any payments or other distributions, whether in cash, securities or other property, shall be made to the Second Lien Claimholders from the Senior Lien Primary Assets on account of any Second Lien Obligations.  Any amounts that would otherwise be paid to the Second Lien Claimholders but for the provisions of this Section 4.1(b) shall instead be paid to the Senior Lien Claimholders until Discharge of Senior Lien Obligations has occurred, and any amounts received by the Second Lien Claimholders in contravention of the provisions of this Section 4.2(b) shall be subject to the turnover provisions of Section 4.3.    

(c)

So long as the Discharge of Secured Note Obligations has not occurred, any Collateral or proceeds thereof received by the Secured Note Collateral Agent in connection with the sale or other disposition of, or collection on, such Collateral upon the exercise of remedies or in connection with any Insolvency Proceeding, shall be applied by the Secured Note Collateral Agent to the Secured Note Obligations in such order as specified in the relevant Secured Note Documents.  Upon the Discharge of the Secured Note Obligations, the Secured Note Collateral Agent shall deliver to the Subordinated Claimholders any proceeds of Collateral held by the Secured Note Collateral Agent in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct to be applied by the Subordinated Claimholders to the Subordinated Obligations in such order as specified in the relevant Subordinated Collateral Documents.

(d)

In the event of any Insolvency Proceeding involving the Issuer or any Guarantor, all Secured Note Obligations shall first be Paid in Full in cash before any payments or other distributions, whether in cash, securities or other property, shall be made to the Subordinated Claimholders on account of any Subordinated Obligations.  Any amounts that would otherwise be paid to the Subordinated Claimholders but for the provisions of this Section 4.1(b) shall instead be paid to the Secured Note Claimholders until Discharge of Secured Note Obligations has occurred, and any amounts received by the Subordinated Claimholders in contravention of the provisions of this Section 4.2(b) shall be subject to the turnover provisions of Section 4.3.

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4.3

Authorization of Receipt of Funds by the Agent Under the Collateral Documents; Turnover of Collections on Collateral.  

(a)

Subject to Section 4.1 of this Agreement, the Senior Lien Collateral Agent is authorized to receive for the benefit of the Senior Lien Claimholders any funds distributed to the Second Lien Claimholders under the Collateral Documents or in any Insolvency Proceeding with respect to the Senior Lien Primary Assets, and to make further distributions of such funds to the Senior Lien Claimholders according to the provisions of the Senior Lien Note Documents.  Until the Discharge of Senior Lien Obligations, any Collateral or proceeds thereof received by the Second Lien Claimholders or any one of them in connection with the exercise (including pursuant to Section 4.1 of this Agreement) of any right or remedy (including set-off) relating to the Collateral, both before and after commencement of any Insolvency Proceeding and including specifically any principal payments made for any reason whatsoever or any distribution on account of any proof of claim or interest of any Second Lien Claimholders in any Insolvency Proceeding, in each case, with respect to the Senior Lien Primary Assets and in contravention of this Agreement, shall be segregated and held in trust and forthwith paid over to the Senior Lien Collateral Agent for the benefit of the Senior Lien Claimholders in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct.  The Senior Lien Collateral Agent is hereby authorized to make any such endorsements as agent for any such Second Lien Claimholder(s).  This authorization is coupled with an interest and is irrevocable until such time as this Agreement is terminated in accordance with its terms and shall be reinstated upon any reinstatement of this Agreement pursuant to Section 8.18.  For avoidance of doubt, interest paid in kind on the Subordinated Obligations, and interest paid in cash on the Second Lien Obligations as permitted by Section 4.1, shall not be subject to turn over pursuant to this Section. 

(b)

The Secured Note Collateral Agent is authorized to receive for the benefit of the Secured Note Claimholders, as their interests may appear, any funds distributed to the Subordinated Claimholders under the Collateral Documents or in any Insolvency Proceeding, and to make further distributions of such funds to the Secured Note Claimholders according to the provisions of the Secured Note Documents.  Until the Discharge of Secured Note Obligations, any Collateral or proceeds thereof received by the Subordinated Claimholders or any one of them in connection with the exercise of any right or remedy (including set-off) relating to the Collateral, both before and after commencement of any Insolvency Proceeding and including specifically any principal payments made for any reason whatsoever or any distribution on account of any proof of claim or interest of any Subordinated Claimholders in any Insolvency Proceeding, in contravention of this Agreement shall be segregated and held in trust and forthwith paid over to the Secured Note Collateral Agent for the benefit of the Secured Note Claimholders in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct.  The Secured Note Collateral Agent 

22

is hereby authorized to make any such endorsements as agent for any such Subordinated Claimholder(s).  This authorization is coupled with an interest and is irrevocable until such time as this Agreement is terminated in accordance with its terms and shall be reinstated upon any reinstatement of this Agreement pursuant to Section 8.18.  For avoidance of doubt, interest paid in kind on the Subordinated Obligations, shall not be subject to turn over pursuant to this Section.

4.4

Limitation on Scope of Provision.  For avoidance of doubt, nothing set forth in this Section is intended to subordinate, affect, impair or otherwise restrict in any manner the rights of the Second Lien Claimholders to receive any payment from Interactive and its Subsidiaries, or to take any action available at law, by contract or in equity to enforce all of their rights and remedies under the Second Lien Credit Documents and applicable law against Interactive and its Subsidiaries.

Section 5.

Other Agreements.

5.1

Collateral Releases by Second Lien Claimholders.

(a)

If, in connection with:

(i)

the exercise of any of the Senior Lien Collateral Agent’s remedies in respect of the Collateral provided for in Section 3.1, including any sale, lease, exchange, transfer or other disposition of any such Collateral; or

(ii)

any sale, lease, exchange, transfer or other disposition (collectively, a “Disposition”) of any Collateral permitted under the terms of the Senior Lien Note Documents (whether or not an Event of Default thereunder, and as defined therein, has occurred and is continuing),

and regardless of whether Second Lien Claimholders are at such time permitted to take independent action under Section 4.1 of this Agreement, the Senior Lien Collateral Agent, for itself or on behalf of any of the Senior Lien Claimholders, releases any of its Liens on any part of the Collateral, or releases any Grantor from its obligations under its guaranty of the Senior Lien Obligations, in each case other than in connection with the Discharge of Senior Lien Obligations, then the Liens, if any, of the Second Lien Claimholders on such Collateral, including real property Collateral, and the obligations of such Grantor under its guaranty of the Second Lien Obligations, shall be automatically, unconditionally and simultaneously released and any such Second Lien Claimholders, promptly shall execute and deliver to the Senior Lien Collateral Agent or such Grantor such termination statements, reconveyances of mortgage, releases and other documents as the Senior Lien Collateral Agent or such Grantor may request to effectively confirm such release.

(b)

Until the Discharge of Senior Lien Obligations occurs, and regardless of whether Second Lien Claimholders are at such time permitted to take independent action under Section 4.1 of this Agreement, the Second Lien Claimholders hereby irrevocably constitute and appoint the Senior Lien Collateral Agent and any officer or agent of the Senior Lien Collateral Agent, with full power of substitution, as its true and lawful 

23

attorney-in-fact with full irrevocable power and authority in the place and stead of the Second Lien Claimholders or such holder or in the Senior Lien Collateral Agent’s own name, from time to time in the Senior Lien Collateral Agent’s discretion, for the purpose of carrying out the terms of this Section 5.1, to take any and all appropriate action and to execute any and all documents and instruments, including without limitation reconveyances of mortgages, which may be necessary to accomplish the purposes of this Section 5.1, including any endorsements or other instruments of transfer or release.  This power of attorney is coupled with an interest and is irrevocable.

(c)

Until the Discharge of the Senior Lien Obligations occurs, the Second Lien Credit Documents shall be deemed for all purposes to permit any Disposition of Senior Lien Primary Assets, including all or substantially all of the Senior Lien Primary Assets, so long as the Senior Lien Note Documents permit, or the Senior Lien Claimholders have consented to, such Disposition. 

(d)

Until the Discharge of Senior Lien Obligations occurs, to the extent that the Senior Lien Claimholders (i) have released any Lien on Collateral or any Grantor from its obligation under its guaranty and any such Liens or guaranty are later reinstated or (ii) obtain any new senior priority liens or additional guarantees from Grantors, then the Second Lien Claimholders shall be granted a second priority lien on any such Collateral and an additional guaranty, as the case may be.

5.2

Collateral Releases by Subordinated Claimholders.

(a)

If, in connection with:

(i)

the exercise of any of the Secured Note Collateral Agent’s remedies in respect of the Collateral provided for in Section 3.1, including any sale, lease, exchange, transfer or other disposition of any such Collateral; or

(ii)

any sale, lease, exchange, transfer or other disposition (collectively, a “Disposition”) of any Collateral permitted under the terms of the Secured Note Documents (whether or not an Event of Default thereunder, and as defined therein, has occurred and is continuing),

the Secured Note Collateral Agent, for itself or on behalf of any of the Secured Note Claimholders, releases any of its Liens on any part of the Collateral, or releases any Grantor from its obligations under its guaranty of the Secured Note Obligations, in each case other than in connection with the Discharge of Secured Note Obligations, then the Liens, if any, of the Subordinated Claimholders on such Collateral, including real property Collateral, and the obligations of such Grantor under its guaranty of the Subordinated Obligations, shall be automatically, unconditionally and simultaneously released and any such Subordinated Claimholders, promptly shall execute and deliver to the Secured Note Collateral Agent or such Grantor such termination statements, reconveyances of mortgage, releases and other documents as the Secured Note Collateral Agent or such Grantor may request to effectively confirm such release.

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(b)

Until the Discharge of Secured Note Obligations occurs, the Subordinated Claimholders hereby irrevocably constitute and appoint the Secured Note Collateral Agent and any officer or agent of the Secured Note Collateral Agent, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of the Subordinated Claimholders or such holder or in the Secured Note Collateral Agent’s own name, from time to time in the Secured Note Collateral Agent’s discretion, for the purpose of carrying out the terms of this Section 5.2, to take any and all appropriate action and to execute any and all documents and instruments, including without limitation reconveyances of mortgages, which may be necessary to accomplish the purposes of this Section 5.2, including any endorsements or other instruments of transfer or release.  This power of attorney is coupled with an interest and is irrevocable.

(c)

Until the Discharge of the Secured Note Obligations occurs, the Subordinated Credit Documents shall be deemed for all purposes to permit any Disposition of Collateral, including all or substantially all of the Collateral, so long as the Senior Lien Note Documents and the Second Lien Credit Documents permit, or the Senior Note Claimholders and the Second Note Claimholders have consented to, such Disposition.

(d)

Until the Discharge of Secured Note Obligations occurs, to the extent that the Secured Note Claimholders (i) have released any Lien on Collateral or any Grantor from its obligation under its guaranty and any such Liens or guaranty are later reinstated or (ii) obtain any new senior priority liens or additional guarantees from Grantors, then the Subordinated Claimholders shall be granted a second priority lien on any such Collateral and an additional guaranty, as the case may be.

5.3

Insurance.  

(a)

Unless and until the Discharge of Senior Lien Obligations has occurred, the Senior Lien Collateral Agent and the Senior Lien Claimholders shall have the sole and exclusive right, subject to the rights of the Grantors under the Senior Lien Note Documents, to adjust settlement for any insurance policy solely 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) solely affecting the Collateral.  Unless and until the Discharge of Senior Lien Obligations has occurred, and subject to the rights of the Grantors under the Senior Lien Collateral Documents, all proceeds of any such policy and any such award (or any payments with respect to a deed in lieu of condemnation) if in respect to the Collateral shall be paid to the Senior Lien Collateral Agent for the benefit of the Senior Lien Claimholders pursuant to the terms of the Senior Lien Note Documents (including, without limitation, for purposes of cash collateralization of commitments, letters of credit and hedging agreements, in each case in an amount reasonably satisfactory to the Senior Lien Collateral Agent) and thereafter, to the extent no Senior Lien Obligations are outstanding, and subject to the rights of the Grantors under the Second Lien Collateral Documents, to the Second Lien Claimholders to the extent required under the Second Lien Collateral Documents and then, to the extent 

25

no Second Lien Obligations are outstanding, to the owner of the subject property, such other Person as may be entitled thereto or as a court of competent jurisdiction may otherwise direct.  Until the Discharge of Senior Lien Obligations has occurred, if the Second Lien Claimholders shall, at any time, receive any proceeds of any such insurance policy or any such award or payment in contravention of this Agreement, it shall pay such proceeds over to the Senior Lien Collateral Agent in accordance with the terms of Section 4.3 of this Agreement.

(b)

Unless and until the Discharge of Secured Note Obligations has occurred, the Secured Note Collateral Agent and the Secured Note Claimholders shall have the sole and exclusive right, subject to the rights of the Grantors under the Secured Note Documents, to adjust settlement for any insurance policy covering the Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding (or any deed in lieu of condemnation) affecting the Collateral.  Unless and until the Discharge of Secured Note Obligations has occurred, and subject to the rights of the Grantors under the Secured Note Collateral Documents, all proceeds of any such policy and any such award (or any payments with respect to a deed in lieu of condemnation) if in respect to the Collateral shall be paid to the Secured Note Collateral Agent for the benefit of the Secured Note Claimholders pursuant to the terms of the Secured Note Documents (including, without limitation, for purposes of cash collateralization of commitments, letters of credit and hedging agreements, in each case in an amount reasonably satisfactory to the Secured Note Collateral Agent) and thereafter, to the extent no Secured Note Obligations are outstanding, and subject to the rights of the Grantors under the Subordinated Collateral Documents, to the Subordinated Claimholders to the extent required under the Subordinated Collateral Documents and then, to the extent no Subordinated Obligations are outstanding, to the owner of the subject property, such other Person as may be entitled thereto or as a court of competent jurisdiction may otherwise direct.  Until the Discharge of Secured Note Obligations has occurred, if the Subordinated Claimholders shall, at any time, receive any proceeds of any such insurance policy or any such award or payment in contravention of this Agreement, it shall pay such proceeds over to the Secured Note Collateral Agent in accordance with the terms of Section 4.3 of this Agreement.

5.4

Amendments to Senior Lien Note Documents and Second Lien Credit Documents; Refinancing of the Senior Lien Obligations and Second Lien Credit Obligations.

(a)

The Senior Lien Note Documents may be amended, supplemented or otherwise modified in any manner whatsoever so long as the same is completed in accordance with their terms, and the Senior Lien Note Agreements and Senior Lien Obligations may be Refinanced, in each case, without the consent of the Second Lien Claimholders.  The holders of any such Refinancing debt shall bind themselves in writing to the terms of this Agreement and the collateral agent under such Refinancing debt shall execute a joinder agreement in each case pursuant Section 5.6 of this Agreement. 

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(b)

The Second Lien Credit Documents may be amended, supplemented or otherwise modified in any manner whatsoever so long as the same is completed in accordance with their terms and the terms of this Agreement, and the Second Lien Note Agreements and the Second Lien Obligations may be Refinanced, in each case, without the consent of the Senior Lien Claimholders.  The holders of any such Refinancing debt shall bind themselves in writing to the terms of this Agreement and the collateral agent under such Refinancing debt shall execute a joinder agreement in each case pursuant Section 5.6 of this Agreement.  

(c)

No waiver, consent or amendment by the Second Lien Claimholders of any covenant or condition under the Second Lien Credit Documents relating to the Senior Lien Primary Assets, nor any waiver by the Second Lien Claimholders of a breach under the Second Lien Credit Documents relating to the Senior Lien Primary Assets, shall act as a waiver of, or otherwise cure, any cross default arising under the Senior Lien Note Documents, and any such cross default under the Senior Lien Note Documents shall constitute a continuing Event of Default under the Senior Lien Note Documents until waived by the Senior Lien Claimholders pursuant to the Senior Lien Note Agreements.

5.5

Amendments to Secured Note Documents and Subordinated Credit Documents; Refinancing of the Secured Note Obligations and Subordinated Credit Obligations.

(a)

The Secured Note Documents may be amended, supplemented or otherwise modified in any manner whatsoever so long as the same is completed in accordance with their terms, and the Secured Note Agreements and Secured Note Obligations may be Refinanced, in each case, without the consent of the Subordinated Claimholders.  The holders of any such Refinancing debt shall bind themselves in writing to the terms of this Agreement and the collateral agent under such Refinancing debt shall execute a joinder agreement in each case pursuant Section 5.6 of this Agreement. 

(b)

The Subordinated Credit Documents may not be amended, supplemented or otherwise modified in any manner whatsoever, and the Subordinated Note Agreements and the Subordinated Obligations may not be Refinanced, in each case, except with the written consent of the Senior Lien Claimholders and the Second Lien Claimholders.  The holders of any such Refinancing debt shall bind themselves in writing to the terms of this Agreement and the collateral agent under such Refinancing debt shall execute a joinder agreement in each case pursuant Section 5.6 of this Agreement.

(c)

No waiver, consent or amendment by the Subordinated Claimholders of any covenant or condition under the Subordinated Credit Documents, nor any waiver by the Subordinated Claimholders of a breach under the Subordinated Credit Documents, shall act as a waiver of, or otherwise cure, any cross default arising under the Secured Note Documents, and any such cross default under the Secured Note Documents shall constitute a continuing Event of Default under the Secured Note Documents until waived by the Secured Note Claimholders pursuant to the Secured Note Agreements.

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5.6

Bailee for Perfection.  

(a)

The Senior Lien Claimholders and the Second Lien Claimholders, each hereby appoint U.S. Bank National Association as its control agent (in such capacity, together with any successor in such capacity appointed by the Senior Lien Claimholders, the “Control Agent”) for the limited purpose of acting as the agent on behalf of the Senior Lien Claimholders and the Second Lien Claimholders with respect to the Control Collateral for purposes of perfecting the Liens of such parties on the Control Collateral.  The Control Agent accepts such appointment and agrees to hold the Control Collateral in its possession or control (or in the possession or control of its agents or bailees) as Control Agent for the benefit of the Senior Lien Claimholders and the Second Lien Claimholders and any permitted assignee of any thereof, as their respective interests appear, solely for the purpose of perfecting the security interest granted to such parties in such Control Collateral, subject to the terms and conditions of this Agreement.  The Senior Lien Claimholders and the Second Lien Claimholders hereby acknowledge that the Control Agent will obtain "control" under the UCC over each Controlled Account as contemplated by the Senior Lien Collateral Documents for the benefit of both the Senior Lien Claimholders and the Second Lien Claimholders, as their respective interests appear, pursuant to the control agreements relating to each respective Controlled Account.  The Control Agent, each of the Senior Lien Claimholders and each of the Second Lien Claimholders, hereby agrees that the Senior Lien Collateral Agent shall have the sole and exclusive right and authority to give instructions to, and otherwise direct, the Control Agent in respect of the Control Collateral or any control agreement with respect to any Control Collateral until the Discharge of Senior Lien Obligations shall have occurred and no Second Lien Claimholder will impede, hinder, delay or interfere with the exercise of such rights by the Senior Lien Collateral Agent in any respect.  The Grantors hereby jointly and severally agree to pay, reimburse, indemnify and hold harmless the Control Agent to the same extent and on the same terms that the Grantors are required to do so for the Senior Lien Collateral Agent in accordance with the Senior Lien Note Agreements.  The Senior Lien Claimholders and the Second Lien Claimholders hereby severally and not jointly agree to pay, reimburse, indemnify and hold harmless the Control Agent to the same extent and on the same terms that the same are required to do so for the Senior Lien Collateral Agent in accordance with Section 8.9 of this Agreement.  Except as set forth below, the Control Agent shall have no obligation whatsoever to any Second Lien Claimholder including, without limitation, any obligation to assure that the Control Collateral is genuine or owned by any Grantor or one of their respective Subsidiaries or to preserve rights or benefits of any Person except as expressly set forth in this Section.  In acting on behalf of the Second Lien Claimholders and the Senior Lien Claimholders, the duties or responsibilities of the Control Agent under this Section shall be limited solely (i) to physically holding any Control Collateral delivered to the Control Agent by any Grantor as agent for the Senior Lien Collateral Agent (on behalf of itself and the Senior Lien Claimholders) and the Second Lien Claimholders for purposes of perfecting the Lien held by the Senior Lien Collateral Agent and the Second Lien Claimholders and (ii) delivering such Collateral as set forth in this Section.  The rights of the Second Lien Claimholders in the Control Collateral shall at all times be subject to the terms of this Agreement and to the Senior Lien Collateral Agent’s rights under the Senior Lien Note Documents.  Neither the Control Agent nor the Senior Lien Collateral Agent shall have by reason of the Second Lien Credit Documents or this Agreement or any other document a fiduciary relationship in respect of any Second Lien Claimholder.  Upon the Discharge of Senior Lien Obligations (other than in connection 

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with a Refinancing of the Senior Lien Obligations), the Control Agent shall deliver to the Second Lien Claimholders or their designee the Control Collateral together with any necessary endorsements (or otherwise allow the Second Lien Claimholders to obtain control of such Control Collateral) or as a court of competent jurisdiction may otherwise direct and the Second Lien Claimholders or their designee shall accept and succeed to the role of the Control Agent as the agent for perfection on the Control Collateral.

(b)

The Secured Note Claimholders and the Subordinated Claimholders, each hereby appoint U.S. Bank National Association as its control agent (in such capacity, together with any successor in such capacity appointed by the Secured Note Claimholders, the “Control Agent”) for the limited purpose of acting as the agent on behalf of the Secured Note Claimholders and the Subordinated Claimholders with respect to the Control Collateral for purposes of perfecting the Liens of such parties on the Control Collateral.  The Control Agent accepts such appointment and agrees to hold the Control Collateral in its possession or control (or in the possession or control of its agents or bailees) as Control Agent for the benefit of the Secured Note Claimholders and the Subordinated Claimholders and any permitted assignee of any thereof, as their respective interests may appear, solely for the purpose of perfecting the security interest granted to such parties in such Control Collateral, subject to the terms and conditions of this Agreement.  The Secured Note Claimholders and the Subordinated Claimholders hereby acknowledge that the Control Agent will obtain “control” under the UCC over each Controlled Account as contemplated by the Secured Note Collateral Documents for the benefit of both the Secured Note Claimholders and the Subordinated Claimholders, as their respective interests may appear, pursuant to the control agreements relating to each respective Controlled Account.  The Control Agent, each of the Secured Note Claimholders and each of the Subordinated Claimholders, hereby agrees that the Secured Note Collateral Agent shall have the sole and exclusive right and authority to give instructions to, and otherwise direct, the Control Agent in respect of the Control Collateral or any control agreement with respect to any Control Collateral until the Discharge of Secured Note Obligations shall have occurred and no Subordinated Claimholder will impede, hinder, delay or interfere with the exercise of such rights by the Secured Note Collateral Agent in any respect.  The Grantors hereby jointly and severally agree to pay, reimburse, indemnify and hold harmless the Control Agent to the same extent and on the same terms that the Grantors are required to do so for the Secured Note Collateral Agent in accordance with the Secured Note Agreements.  The Secured Note Claimholders and the Subordinated Claimholders hereby severally and not jointly agree to pay, reimburse, indemnify and hold harmless the Control Agent to the same extent and on the same terms that the same are required to do so for the Secured Note Collateral Agent in accordance with Section 8.9 of this Agreement.  Except as set forth below, the Control Agent shall have no obligation whatsoever to any Subordinated Claimholder including, without limitation, any obligation to assure that the Control Collateral is genuine or owned by any Grantor or one of their respective Subsidiaries or to preserve rights or benefits of any Person except as expressly set forth in this Section.  In acting on behalf of the Subordinated Claimholders and the Secured Note Claimholders, the duties or responsibilities of the Control Agent under this Section shall be limited solely (i) to physically holding any Control Collateral delivered to the Control Agent by any Grantor 

29

as agent for the Secured Note Collateral Agent (on behalf of itself and the Secured Note Claimholders) and the Subordinated Claimholders) for purposes of perfecting the Lien held by the Secured Note Collateral Agent and the Subordinated Claimholders and (ii) delivering such Collateral as set forth in this Section.  The rights of the Subordinated Claimholders in the Control Collateral shall at all times be subject to the terms of this Agreement and to the Secured Note Collateral Agent’s rights under the Secured Note Documents.  Neither the Control Agent nor the Secured Note Collateral Agent shall have by reason of the Subordinated Credit Documents or this Agreement or any other document a fiduciary relationship in respect of any Subordinated Claimholder.  Upon the Discharge of Secured Note Obligations (other than in connection with a Refinancing of the Secured Note Obligations), the Control Agent shall deliver to the Subordinated Claimholders or their designee the Control Collateral together with any necessary endorsements (or otherwise allow the Subordinated Claimholders to obtain control of such Control Collateral) or as a court of competent jurisdiction may otherwise direct and the Subordinated Claimholders or their designee shall accept and succeed to the role of the Control Agent as the agent for perfection on the Control Collateral.

5.7

Refinancing of Obligations; Joinder of New Agent.  

(a)

If at any time after the Discharge of Senior Lien Obligations has occurred or concurrently with the occurrence thereof, the Issuer concurrently or promptly thereafter enters into any Refinancing of any Senior Lien Note Document evidencing a Senior Lien Obligation which Refinancing is permitted by Section 5.4(a), then such Discharge of Senior Lien Obligations shall automatically be deemed not to have occurred for all purposes of this Agreement (other than with respect to any actions taken prior to the date of such designation as a result of the occurrence of such first Discharge of Senior Lien Obligations), and the obligations under such Refinancing Senior Lien Note Document shall automatically 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 the Senior Lien Collateral Agent under such Senior Lien Note Documents shall be the Senior Lien Collateral Agent for all purposes of this Agreement.  Upon receipt of a notice stating that the Issuer has entered into a new Senior Lien Note Document (which notice shall include the identity of the new collateral agent, such agent, the “New Senior Lien Collateral Agent”), the Second Lien Claimholders shall promptly (a) enter into such documents and agreements (including amendments or supplements to this Agreement) as the Issuer or such New Senior Lien Collateral Agent shall reasonably request in order to provide to the New Senior Lien Collateral Agent the rights contemplated hereby, in each case consistent in all material respects with the terms of this Agreement and (b) deliver to the New Senior Lien Collateral Agent any Pledged Collateral then held by it together with any necessary endorsements (or otherwise allow the New Senior Lien Collateral Agent to obtain control of such Pledged Collateral).  The New Senior Lien Collateral Agent shall agree to be bound by the terms of this Agreement.  If the new Senior Lien Obligations under the new Senior Lien Note Documents are secured by assets of the Grantors of the type constituting Collateral that do not also secure the Second Lien Obligations, then the Second Lien Obligations shall be secured at such time by a second priority Lien on such assets to the same extent provided in the Second Lien Collateral Documents.

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(b)

If at any time after the Second Lien Obligations have been Paid in Full or concurrently with the occurrence thereof, Interactive concurrently or promptly thereafter enters into any Refinancing of any Second Lien Credit Document evidencing a Second Lien Obligation which Refinancing is permitted by Section 5.4(b), then such Payment in Full of Second Lien Obligations shall automatically be deemed not to have occurred for all purposes of this Agreement (other than with respect to any actions taken prior to the date of such designation as a result of the occurrence of such first Payment in Full of Second Lien Obligations), and the obligations under such Refinancing Second Lien Credit Document shall automatically be treated as Second Lien Obligations for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Collateral set forth herein, and the Second Lien Collateral Agent under such Second Lien Credit Documents shall be the Second Lien Collateral Agent for all purposes of this Agreement.  Upon receipt of a notice stating that Interactive has entered into a new Second Lien Credit Document (which notice shall include the identity of the new collateral agent, such agent, the “New Second Lien Collateral Agent”), the Senior Lien Claimholders shall promptly enter into such documents and agreements (including amendments or supplements to this Agreement) as Interactive or such New Second Lien Collateral Agent shall reasonably request in order to provide to the New Second Lien Collateral Agent the rights contemplated hereby, in each case consistent in all material respects with the terms of this Agreement.  The New Second Lien Collateral Agent shall agree to be bound by the terms of this Agreement.  If the new Second Lien Obligations under the new Second Lien Credit Documents are secured by assets of the Grantors of the type constituting Collateral that do not also secure the Senior Lien Obligations, then the Senior Lien Obligations shall be secured at such time by a first priority Lien on such assets to the same extent provided in the Senior Lien Collateral Documents.

(c)

If at any time after the Subordinated Obligations have been Paid in Full or concurrently with the occurrence thereof, Issuer concurrently or promptly thereafter enters into any Refinancing of any Subordinated Credit Document evidencing a Subordinated Obligation which Refinancing is permitted by Section 5.5(b), then such Payment in Full of Subordinated Obligations shall automatically be deemed not to have occurred for all purposes of this Agreement (other than with respect to any actions taken prior to the date of such designation as a result of the occurrence of such first Payment in Full of Subordinated Obligations), and the obligations under such Refinancing Subordinated Credit Document shall automatically be treated as Subordinated Obligations for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Collateral set forth herein, and the Subordinated Collateral Agent under such Subordinated Credit Documents shall be the Subordinated Collateral Agent for all purposes of this Agreement.  Upon receipt of a notice stating that Interactive has entered into a new Subordinated Credit Document (which notice shall include the identity of the new collateral agent, such agent, the “New Subordinated Collateral Agent”), the Secured Note Claimholders shall promptly enter into such documents and agreements (including amendments or supplements to this Agreement) as 

31

Interactive or such New Subordinated Collateral Agent shall reasonably request in order to provide to the New Subordinated Collateral Agent the rights contemplated hereby, in each case consistent in all material respects with the terms of this Agreement.  The New Subordinated Collateral Agent shall agree to be bound by the terms of this Agreement.  If the new Subordinated Obligations under the new Subordinated Credit Documents are secured by assets of the Grantors of the type constituting Collateral that do not also secure the Secured Note Obligations, then the Secured Note Obligations shall be secured at such time by priority Liens of more senior priority on such assets to the same extent respectively provided in the Secured Note Collateral Documents.

Section 6.

Insolvency Proceedings.

6.1

Bankruptcy.  This Agreement shall be applicable both before and after the filing of any petition by or against any Grantor under the Bankruptcy Code or any other Insolvency Proceeding and all converted or succeeding cases in respect thereof, and all references herein to any Grantor shall be deemed to apply to any trustee, assignee for the benefit of creditors or receiver for, or other successor to, such Grantor and such Grantor as a debtor-in-possession.  This Agreement shall constitute a subordination agreement within the meaning of Section 510(a) of the Bankruptcy Code.

6.2

Post Petition Financing; Cash Collateral.

(a)

If any Grantor shall become subject to a case under the Bankruptcy Code and such Grantor as debtor-in-possession (or a trustee appointed on behalf of such Grantor) shall move for either (x) approval of financing (“DIP Financing”) to be provided by any one or more of the Senior Lien Claimholders under Section 364 of the Bankruptcy Code with the consent of Senior Lien Collateral Agent or as otherwise to be provided by another Person with the consent of Senior Lien Collateral Agent or (y) the use of cash collateral with the consent of the Senior Lien Collateral Agent under Section 363 of the Bankruptcy Code, in either case, involving only Senior Lien Primary Assets, the Second Lien Claimholders agree as follows:  (i) such DIP Financing (including any Senior Lien Obligations which arose prior to the Insolvency Proceeding) may be secured by Liens on all or a part of the Senior Lien Primary Assets which may be superior in priority to the Liens on such Senior Lien Primary Assets held by (A) the Senior Lien Claimholders, the Second Lien Claimholders and the Subordinated Claimholders or (B) the Subordinated Claimholders, and (ii) the Second Lien Claimholders shall not contest or oppose in any manner such DIP Financing or cash collateral use and shall be deemed to have waived any objections to such financing or cash collateral use, including by any objection alleging Grantors' failure to provide “adequate protection” for the Liens of the Second Lien Claimholders or otherwise, as long as (A) the Second Lien Claimholders retain a Lien on the Senior Lien Primary Assets (including proceeds thereof arising after the commencement of such proceeding) with the same priority as existed prior to the commencement of the case under the Bankruptcy Code (but also junior in priority to the Liens securing such DIP Financing), (B) the Second Lien Claimholders receive a replacement Lien on post-petition assets, with the same priority as existed prior to the commencement of the case under the Bankruptcy Code (but also junior in priority to the 

32

Liens securing such DIP Financing, provided that the inability of the Second Lien Claimholders to receive a Lien on actions under Chapter 5 of the Bankruptcy Code or proceeds thereof shall not affect the agreements and waivers set forth in this clause), and (C) such DIP Financing or use of cash collateral is subject to the applicable terms of this Agreement.  Second Lien Claimholders shall not, directly or through an affiliate, seek to provide DIP Financing secured by Liens on Senior Lien Primary Assets equal or senior to the Liens of the Senior Lien Claimholders, without the prior written consent of Senior Lien Collateral Agent.

(b)

Notwithstanding the foregoing provisions in this Section 6.2, in any Insolvency Proceeding, (i) if the Senior Lien Claimholders (or any subset thereof) are granted adequate protection in the form of additional or replacement collateral, the Second Lien Claimholders may seek adequate protection in the form of a Lien on such additional or replacement collateral, which Lien, if granted, will be subordinate to the Liens securing the Senior Lien Obligations on the same basis as the other Liens securing the Second Lien Obligations are so subordinated under this Agreement (provided that any failure of the Second Lien Claimholders to obtain such adequate protection shall not impair or otherwise affect the agreements, undertakings and consents of the Second Lien Claimholders pursuant to Section 6.2(a)), and (ii) in the event any Second Lien Claimholder seeks or requests such adequate protection in respect of Second Lien Obligations, then (A) such adequate protection shall be limited to a Lien on additional or replacement collateral, and (B) Senior Lien Claimholders may seek and obtain, and each Second Lien Claimholder hereby consents to the granting of, a Lien on such additional collateral as security for the Senior Lien Obligations and such Lien shall be senior in priority to the Lien of the Second Lien Claimholders on the same basis as the other Liens securing the Senior Lien Obligations are senior to Liens securing the Second  Lien Obligations under this Agreement.  If and to the extent such additional or replacement Liens are insufficient to provide adequate protection of the interests of the Second Lien Claimholders, then the Second Lien Claimholders shall be entitled to assert a claim under Section 507(b) of the Bankruptcy Code in the amount of any such insufficiency; provided, however, that any such claim under Section 507(b) shall be subordinate in right of payment to any 507(b) claim of the Senior Lien Claimholders.

(c)

The Second Lien Claimholders may seek post-petition interest and/or adequate protection payments in any Insolvency Proceeding, and Senior Lien Claimholders may oppose such motions.  If the Second Lien Claimholders receive post-petition interest and/or adequate protection payments in an Insolvency Proceeding (“Second Lien Bankruptcy Payments”), and Discharge of the Senior Lien Obligations does not occur upon first to occur of the effective date of the plan of reorganization for, the dismissal of, or the entry of an order approving the final report and accounting for, that Insolvency Proceeding, then, the Second Lien Claimholders shall pay over to the Senior Lien Claimholders pursuant to Section 4.3 an amount equal to the lesser of (i) the Second Lien Bankruptcy Payments and (ii) the amount by which the Senior Lien Obligations have not been discharged.

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(d)

If any Grantor as debtor-in-possession (or a trustee appointed on behalf of such Grantor) shall move for either (x) approval of financing (“DIP Financing”) to be provided by any one or more of the Secured Note Claimholders under Section 364 of the Bankruptcy Code with the consent of Secured Note Collateral Agent or as otherwise to be provided by another Person with the consent of Secured Note Collateral Agent or (y) the use of cash collateral with the consent of the Secured Note Collateral Agent under Section 363 of the Bankruptcy Code, the Subordinated Claimholders agree as follows:  (i) such DIP Financing (including any Secured Note Obligations which arose prior to the Insolvency Proceeding) may be secured by Liens on all or a part of the assets of the Grantors which may be superior in priority to the Liens on the assets of the Grantors held by the Subordinated Claimholders and/or any other Person, and (ii) the Subordinated Claimholders shall not contest or oppose in any manner any such DIP Financing or cash collateral use and shall be deemed to have waived any objections to such financing or cash collateral use, including by any objection alleging Grantors' failure to provide “adequate protection” for the Liens of the Subordinated Claimholders or otherwise, as long as (A) the Subordinated Claimholders retain a Lien on the Collateral (including proceeds thereof arising after the commencement of such proceeding) with the same priority as existed prior to the commencement of the case under the Bankruptcy Code (but also junior in priority to the Liens securing such DIP Financing), (B) the Subordinated Claimholders receive a replacement Lien on post-petition assets, with the same priority as existed prior to the commencement of the case under the Bankruptcy Code (but also junior in priority to the Liens securing such DIP Financing, provided that the inability of the Subordinated Claimholders to receive a Lien on actions under Chapter 5 of the Bankruptcy Code or proceeds thereof shall not affect the agreements and waivers set forth in this clause), and (C) such DIP Financing or use of cash collateral is subject to the applicable terms of this Agreement.  If Secured Note Collateral Agent objects to any motion by a Grantor for use of cash collateral under Section 363 of the Bankruptcy Code or to incur financing under Section 364 of the Bankruptcy Code, then at the written request of Secured Note Collateral Agent, Subordinated Claimholders will join the objection by Secured Note Collateral Agent.  Subordinated Claimholders shall not, directly or through an affiliate, seek to provide DIP Financing secured by Liens equal or senior to the Liens of the Secured Note Claimholders, without the prior written consent of Secured Note Collateral Agent.

(e)

Notwithstanding the foregoing provisions in this Section 6.2, in any Insolvency Proceeding, (i) if the Secured Note Claimholders (or any subset thereof) are granted adequate protection in the form of additional or replacement collateral, the Subordinated Claimholders may seek adequate protection in the form of a Lien on such additional or replacement collateral, which Lien, if granted, will be subordinate to the Liens securing the Secured Note Obligations on the same basis as the other Liens securing the Subordinated Obligations are so subordinated under this Agreement (provided that any failure of the Subordinated Claimholders to obtain such adequate protection shall not impair or otherwise affect the agreements, undertakings and consents of the Subordinated Claimholders pursuant to Section 6.2(c)), and (ii) in the event any Subordinated Claimholder seeks or requests such adequate protection in respect of Subordinated Obligations, then (A) such adequate protection shall be limited to a Lien on 

34

additional or replacement collateral, and (B) Secured Note Claimholders may seek and obtain, and each Subordinated Claimholder hereby consents to the granting of, a Lien on such additional collateral as security for the Secured Note Obligations and such Lien shall be senior in priority to the Lien of the Subordinated Claimholders on the same basis as the other Liens securing the Secured Note Obligations are senior to Liens securing the Second  Lien Obligations under this Agreement.  If and to the extent such additional or replacement Liens are insufficient to provide adequate protection of the interests of the Subordinated Claimholders, then the Subordinated Claimholders shall be entitled to assert a claim under Section 507(b) of the Bankruptcy Code in the amount of any such insufficiency; provided, however, that any such claim under Section 507(b) shall be subordinate in right of payment to the Discharge of the Secured Note Obligations.

(f)

The Subordinated Claimholders may not seek post-petition interest and/or adequate protection payments in any Insolvency Proceeding.  If the Subordinated Claimholders receive post-petition interest and/or adequate protection payments in an Insolvency Proceeding (“Subordinated Bankruptcy Payments”), and Discharge of the Secured Note Obligations does not occur upon first to occur of the effective date of the plan of reorganization for, or conclusion of, that Insolvency Proceeding, then, the Subordinated Claimholders shall pay over to the Secured Note Claimholders pursuant to Section 4.3 an amount equal to the lesser of (i) the Subordinated Bankruptcy Payments and (ii) the amount by which the Secured Note Obligations have not been discharged.

6.3

Sale of Collateral; Waivers.  

(a)

The Second Lien Claimholders agree that they will consent and not otherwise object to a sale or other disposition that is solely of Senior Lien Primary Assets (or any portion thereof) free and clear of Liens, claims and other interests under the Bankruptcy Code, including Sections 363 and 365, if Senior Lien Collateral Agent has consented to such sale or other disposition.  The Second Lien Claimholders waive any claim they may now or hereafter have arising out of the Senior Lien Claimholders' election of the application of Section 1111(b)(2) of the Bankruptcy Code with respect solely to Senior Lien Primary Assets.  The Second Lien Claimholders agree not to  initiate or prosecute or join with any other Person to initiate or prosecute any claim, action or other proceeding opposing a motion by Senior Lien Collateral Agent to lift the automatic stay solely with respect to any Senior Lien Primary Assets.  

(b)

The Subordinated Claimholders agree that they will consent and not otherwise object to a sale or other disposition of any assets securing the Secured Note Obligations under the Secured Note Documents (or any portion thereof) free and clear of Liens, claims and other interests under the Bankruptcy Code, including Sections 363, 365 and 1129, if Secured Note Collateral Agent has consented to such sale or other disposition.  At the written request of Secured Note Collateral Agent, Subordinated Claimholders will object to any such sale.  The Subordinated Claimholders waive any claim they may now or hereafter have arising out of the Secured Note Claimholders' election of the application of Section 1111(b)(2) of the Bankruptcy Code.  The Subordinated Claimholders agree not to (i) initiate or prosecute or join with any other 

35

Person to initiate or prosecute any claim, action or other proceeding opposing a motion by Secured Note Collateral Agent to lift the automatic stay, or (ii) propose or vote (to the extent such vote is required to satisfy Section 1129(a)(10) of the Bankruptcy Code) in favor of any chapter 11 plan that seeks confirmation under Section 1129(b)(2)(A) of the Bankruptcy Code with respect to the Secured Note Obligations.

6.4

Notice of Claims.  The parties acknowledge and agree that (i) the claims and interests of the Holders of Notes issued under the Senior Interactive Note Agreement and related Second Lien Note Documents are substantially different from the claims and interests of the Holders of Notes issued under the Second Interactive Note Agreement and related Second Lien Note Documents and (ii) such claims and interests should be treated as separate classes for purposes of Section 1122 of the Bankruptcy Code.  The parties further acknowledge and agree that (i) the claims and interests of the 2005 Holders under the 2005 Note Agreement and related Senior Lien Note Documents are substantially different from the claims and interests of the 2006 Holders under the 2006 Note Agreement and related Senior Lien Note Documents and (ii) such claims and interests should be treated as separate classes for purposes of Section 1122 of the Bankruptcy Code.  The parties further acknowledge and agree that (i) the claims and interests of the Senior Lien Claimholders under the Senior Lien Note Documents are substantially different from the claims and interests of Second Lien Claimholders under the Second Lien Credit Documents and (ii) such claims and interests should be treated as separate classes for purposes of Section 1122 of the Bankruptcy Code.  The parties further acknowledge and agree that (i) the claims and interests of the Secured Note Claimholders under the Secured Note Documents are substantially different from the claims and interests of Subordinated Claimholders under the Subordinated Credit Documents and (ii) such claims and interests should be treated as separate classes for purposes of Section 1122 of the Bankruptcy Code.

6.5

Rights as Unsecured Creditors.  Except as otherwise provided herein, in any Insolvency Proceeding, Second Lien Claimholders may exercise any applicable rights and remedies as unsecured creditors against any Grantor in accordance with the Second Lien Credit Documents and applicable law.  Except as otherwise provided herein, in any Insolvency Proceeding, Subordinated Claimholders may exercise any applicable rights and remedies as unsecured creditors against any Grantor in accordance with the Subordinated Credit Documents and applicable law.

6.6

Separate Grants of Security and Separate Classification.  

(a)

Each Second Lien Claimholder acknowledges and agrees that (i) the grants of Liens to the pursuant to the Senior Lien Collateral Documents and the Second Lien Collateral Documents constitute separate and distinct grants of Liens and (ii) because of, among other things, their differing rights in the Collateral, the Second Lien Obligations are fundamentally different from the Senior Lien Obligations and must be separately classified in any plan of reorganization proposed or adopted in an Insolvency Proceeding.  To further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that the claims of the Senior Lien Claimholders and Second Lien Claimholders in respect of the Collateral constitute only one secured claim (rather than separate classes of senior and junior secured claims), then the Second Lien 

36

Claimholders hereby acknowledge and agree that all distributions shall be made as if there were separate classes of senior and junior secured claims against the Issuer and the Issuer Subsidiaries in respect of the Collateral (with the effect being that, to the extent that the aggregate value of the Collateral is sufficient (for this purpose ignoring all claims held by the Second Lien Claimholders)), the Senior Lien Claimholders shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of post-petition interest before any distribution is made in respect of the claims held by the Second Lien Claimholders, with the Second Lien Claimholders hereby acknowledging and agreeing to turn over to the Senior Lien Claimholders amounts otherwise received or receivable by them to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the claim or recovery of the Second Lien Claimholders.

(b)

Each Second Lien Claimholder and each Subordinated Claimholder acknowledges and agrees that (i) the grants of Liens to each of the 2005 Agent and the 2006 Agent pursuant to the Security Documents defined in the 2005 Note Agreement or the 2006 Note Agreement, respectively, constitute separate and distinct grants of Liens and (ii) because of, among other things, their differing rights in the Senior Lien Primary Assets, the Second Lien Obligations are fundamentally different from the Obligations defined in the 2005 Note Agreement or the 2006 Note Agreement, respectively, and must be separately classified in any plan of reorganization proposed or adopted in an Insolvency Proceeding.  To further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that the claims of the 2005 Holders and the 2006 Holders in respect of the Senior Lien Primary Assets constitute only one secured claim (rather than separate classes of secured claims), then the Second Lien Claimholders and Subordinated Claimholders hereby acknowledge and agree that all distributions shall be made as if there were separate classes of secured claims against the Issuer and the Issuer Subsidiaries in respect of the Senior Lien Primary Assets (with the effect being that, to the extent that the aggregate value of the Senior Lien Primary Assets is sufficient (for this purpose ignoring all claims held by the Second Lien Claimholders and Subordinated Claimholders)), each Senior Lien Claimholder shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of post-petition interest before any distribution is made in respect of the claims held by the Second Lien Claimholders or the Subordinated Claimholders, with the Second Lien Claimholders and Subordinated Claimholders hereby acknowledging and agreeing to turn over to the Senior Lien Claimholders amounts otherwise received or receivable by them to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the claim or recovery of the Second Lien Claimholders or Subordinated Creditors.

(c)

Each Subordinated Claimholder acknowledges and agrees that (i) the grants of Liens pursuant to the Secured Note Collateral Documents and the Subordinated Collateral Documents constitute separate and distinct grants of Liens and (ii) because of, among other things, their differing rights in the Collateral, the Subordinated Obligations are fundamentally different from the Secured Note Obligations and must be separately classified in any plan of reorganization proposed or adopted in an Insolvency Proceeding.  

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To further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that the claims of the Secured Note Claimholders and Subordinated Claimholders in respect of the Collateral constitute only one secured claim (rather than separate classes of senior and junior secured claims), then the Subordinated Claimholders hereby acknowledge and agree that all distributions shall be made as if there were separate classes of senior and junior secured claims against the Issuer and the Issuer Subsidiaries in respect of the Collateral (with the effect being that, to the extent that the aggregate value of the Collateral is sufficient (for this purpose ignoring all claims held by the Subordinated Claimholders)), the Secured Note Claimholders shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of post-petition interest before any distribution is made in respect of the claims held by the Subordinated Claimholders, with the Subordinated Claimholders hereby acknowledging and agreeing to turn over to the Secured Note Claimholders amounts otherwise received or receivable by them to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the claim or recovery of the Subordinated Claimholders.

(d)

Each Subordinated Claimholder acknowledges and agrees that (i) the grants of Liens to each of the Senior Interactive Agent and the Second Interactive Agent pursuant to the Security Documents defined in the Senior Interactive Agreement or the Second Interactive Note Agreement, respectively, constitute separate and distinct grants of Liens and (ii) because of, among other things, their differing rights in the Collateral, the Subordinated Obligations are fundamentally different from the Obligations defined in the Senior Interactive Note Agreement or the Second Interactive Note Agreement, respectively, and must be separately classified in any plan of reorganization proposed or adopted in an Insolvency Proceeding.  To further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that the claims of the Senior Interactive Note Holders and the Second Interactive Note Holders in respect of the Collateral constitute only one secured claim (rather than separate classes of secured claims), then the Subordinated Claimholders hereby acknowledge and agree that all distributions shall be made as if there were separate classes of secured claims against the Issuer and the Issuer Subsidiaries in respect of the Collateral (with the effect being that, to the extent that the aggregate value of the Collateral is sufficient (for this purpose ignoring all claims held by the Subordinated Claimholders)), each Second Lien Claimholder shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of post-petition interest before any distribution is made in respect of the claims held by the Subordinated Claimholders, with the Subordinated Claimholders hereby acknowledging and agreeing to turn over to the Second Lien Claimholders amounts otherwise received or receivable by them to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the claim or recovery of the Subordinated Creditors.

6.7

Avoidance Issues.  If any Secured Note Claimholder is required in any Insolvency Proceeding or otherwise to disgorge, turn over or otherwise pay to the estate of any Grantor, because such amount was avoided or ordered to be paid or disgorged for any reason, including 

38

without limitation because it was found to be a fraudulent or preferential transfer, any Recovery, whether received as proceeds of security, enforcement of any right of set-off or otherwise, then the claims of the Secured Note Claimholders shall be reinstated pursuant to Section 8.18.  

6.8

Reorganization Securities.  If, in any Insolvency Proceeding, debt obligations 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 Second Lien Obligations, the provisions of this Agreement will survive the distribution of such debt obligations pursuant to such plan and will apply with like effect to such debt obligations.  This Agreement shall not apply to any equity securities of the reorganized debtor that are distributed pursuant to a plan of reorganization or similar dispositive restructuring plan, both on account of Senior Lien Obligations and on account of Second Lien Obligations.  If, in any Insolvency Proceeding, debt obligations of the reorganized debtor that are distributed pursuant to a plan of reorganization or similar dispositive restructuring plan, both on account of Secured Note Obligations and on account of Subordinated Obligations, the provisions of this Agreement will survive the distribution of such debt obligations pursuant to such plan and will apply with like effect to such debt obligations.  This Agreement shall not apply to any equity securities of the reorganized debtor are distributed pursuant to a plan of reorganization or similar dispositive restructuring plan, both on account of Secured Note Obligations and on account of Subordinated Obligations.  

6.9

Post-Petition Interest.

No Second Lien Claimholder shall oppose or seek to challenge any claim by the Senior Lien Collateral Agent or any Senior Lien Claimholder for allowance in any Insolvency Proceeding of Senior Lien Obligations consisting of post-petition interest, fees or expenses, and other amounts allowable under Section 506(b) of the Bankruptcy Code, to the extent of the value of the Senior Lien Claimholder’s Lien, without regard to the existence of the Liens of the Second Lien Claimholders on the Collateral.  No Subordinated Claimholder shall oppose or seek to challenge any claim by the Secured Note Collateral Agent or any Secured Note Claimholder for allowance in any Insolvency Proceeding of Secured Note Obligations consisting of post-petition interest, fees or expenses, and other amounts allowable under Section 506(b) of the Bankruptcy Code, to the extent of the value of the Secured Note Claimholder’s Lien, without regard to the existence of the Liens of the Subordinated Claimholders on the Collateral.

Section 7.

Reliance; Waivers; Etc.

7.1

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

39

their own credit analysis and decision to enter into each of the Second Lien Credit Documents and be bound by the terms of this Agreement and they will continue to make their own credit decision in taking or not taking any action under the Second Lien Credit Documents or this Agreement.  The Subordinated Claimholders acknowledge that they have, independently and without reliance on the Secured Note Collateral Agent or any Secured Note Claimholder, and based on documents and information deemed by them appropriate, made their own credit analysis and decision to enter into each of the Subordinated Credit Documents and be bound by the terms of this Agreement and they will continue to make their own credit decision in taking or not taking any action under the Subordinated Credit Documents or this Agreement.  

7.2

No Warranties or Liability.  The Senior Lien Collateral Agent, for itself and on behalf of the Senior Lien Claimholders under its Senior Lien Note Documents, acknowledges and agrees that each of the Second Lien Claimholders have made no express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectibility or enforceability of any of the Second Lien Credit Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon.  Subject to the provisions of this Agreement, the Second Lien Claimholders will be entitled to manage and supervise their respective loans and extensions of credit under the Second Lien Credit Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate.  The Second Lien Claimholders acknowledge and agree that the Senior Lien Collateral Agent and the Senior Lien Claimholders have made no express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectibility or enforceability of any of the Senior Lien Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon.  The Senior Lien Claimholders will be entitled to manage and supervise their respective loans and extensions of credit under their respective Senior Lien Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate.  The Second Lien Claimholders shall have no duty to the Senior Lien Collateral Agent or any of the Senior Lien Claimholders, and the Senior Lien Collateral Agent and the Senior Lien Claimholders shall have no duty to the Second Lien Claimholders to act or refrain from acting in a manner which allows, or results in, the occurrence or continuance of an event of default or default under any agreements with the Issuer or any Issuer Subsidiary(including the Senior Lien Note Documents and the Second Lien Credit Documents), regardless of any knowledge thereof which they may have or be charged with.  The Subordinated Claimholders acknowledge and agree that the Secured Note Collateral Agent and the Secured Note Claimholders have made no express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectibility or enforceability of any of the Secured Note Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon.  The Secured Note Claimholders will be entitled to manage and supervise their respective loans and extensions of credit under their respective Secured Note Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate.  The Subordinated Claimholders shall have no duty to the Secured Note Collateral Agent or any of the Secured Note Claimholders, and the Secured Note Collateral Agent and the Secured Note Claimholders shall have no duty to the Subordinated Claimholders to act or refrain from acting in a manner which allows, or results in, the occurrence or continuance of an event of default or default under any agreements with the Issuer or any Issuer Subsidiary (including the Secured Note Documents and the Subordinated Credit Documents), regardless of any knowledge thereof which they may have or be charged with.

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7.3

No Waiver of Lien Priorities.

(a)

No right of the Senior Lien Claimholders, the Senior Lien Collateral Agent or any of them to enforce any provision of this Agreement or any Senior Lien Note Document shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Issuer or any other Grantor or by any act or failure to act by any Senior Lien Claimholder or the Senior Lien Collateral Agent, or by any noncompliance by any Person with the terms, provisions and covenants of this Agreement, any of the Senior Lien Note Documents or any of the Second Lien Credit Documents, regardless of any knowledge thereof which the Senior Lien Collateral Agent or the Senior Lien Claimholders, or any of them, may have or be otherwise charged with;

(b)

Without in any way limiting the generality of the foregoing paragraph (but subject to the rights of the Issuer and the other Grantors under the Senior Lien Note Documents and subject to the provisions of Section 5.5(a)), the Senior Lien Claimholders, the Senior Lien Collateral Agent and any of them may, at any time and from time to time in accordance with the Senior Lien Note Documents and/or applicable law, without the consent of, or notice to, the Second Lien Claimholders, without incurring any liabilities to the Second Lien Claimholders and without impairing or releasing the Lien priorities and other benefits provided in this Agreement (even if any right of subrogation or other right or remedy of the Second Lien Claimholders are affected, impaired or extinguished thereby) do any one or more of the following:

(i)

change the manner, place or terms of payment or change or extend (but not beyond the scheduled final maturity thereof) the time of payment of, or amend, renew, exchange, increase, supplement or alter, the terms of any of the Senior Lien Obligations or any Lien on any Senior Lien Collateral or guaranty thereof or any liability of the Issuer or any other Grantor, or any liability incurred directly or indirectly in respect thereof (including any increase in or extension of the Senior Lien Obligations or issuance by Issuer of any secured Indebtedness permitted under the Senior Lien Note Agreements, without any restriction as to the amount, tenor or terms of any such increase or extension or issuance, all of which shall constitute Senior Lien Obligations) or otherwise amend, renew, exchange, extend, modify or supplement in any manner any Liens held by the Senior Lien Collateral Agent or any of the Senior Lien Claimholders, the Senior Lien Obligations or any of the Senior Lien Note Documents;

(ii)

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

(iii)

settle or compromise any Senior Lien Obligation or any other liability of the Issuer or any other 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

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(iv)

exercise or delay in or refrain from exercising any right or remedy against the Issuer or any security or any other Grantor or any other Person, elect any remedy and otherwise deal freely with the Issuer, any other Grantor or any Senior Lien Collateral and any security and any guarantor or any liability of the Issuer or any other Grantor to the Senior Lien Claimholders or any liability incurred directly or indirectly in respect thereof, in any order, at any time, or from time to time;

(c)

The Second Lien Claimholders also agree that the Senior Lien Claimholders and the Senior Lien Collateral Agent shall have no liability to the Second Lien Claimholders, and the Second Lien Claimholders hereby waive any claim against any Senior Lien Claimholder or the Senior Lien Collateral Agent, arising out of any and all actions which the Senior Lien Claimholders or the Senior Lien Collateral Agent may take or permit or omit to take with respect to: (i) the Senior Lien Note Documents, (ii) the collection of the Senior Lien Obligations, (iii) the foreclosure upon, or sale, liquidation or other disposition of, any Senior Lien Collateral or (iv) the exercise of any other rights or remedies of the Senior Lien Claimholders whatsoever.  The Second Lien Claimholders agree that the Senior Lien Claimholders and the Senior Lien Collateral Agent have no duty to them in respect of the maintenance or preservation of the Senior Lien Collateral, the Senior Lien Obligations or otherwise; and

(d)

The Second Lien 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 marshalling, appraisal, valuation, one-action, antideficiency or other similar right that may otherwise be available under applicable law with respect to the Collateral or any other similar rights a junior secured creditor may have under applicable law.  In addition, to the extent applicable, the Second Lien Claimholders also waive (i)

 

all rights and defenses that are  or may become available to the Second Lien Claimholders by reason of Sections 2787, inclusive, and Section 3433 of the California Civil Code or similar applicable law , (ii) all rights and benefits under Section 2809 of the California Civil Code and any similar applicable law , (iii) the benefit of any statute of limitations affecting the Senior Lien Obligations or the provisions hereof and (iv) all rights and benefits under Section 359.5 of the California Code of Civil Procedure and any similar applicable laws.

(e)

No right of the Secured Note Claimholders, the Secured Note Collateral Agent or any of them to enforce any provision of this Agreement or any Secured Note Document shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Issuer or any other Grantor or by any act or failure to act by any Secured Note Claimholder or the Secured Note Collateral Agent, or by any noncompliance by any Person with the terms, provisions and covenants of this Agreement, any of the Secured Note Documents or any of the Subordinated Credit Documents, regardless of any knowledge thereof which the Secured Note Collateral Agent or the Secured Note Claimholders, or any of them, may have or be otherwise charged with;

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(f)

Without in any way limiting the generality of the foregoing paragraph (but subject to the rights of the Issuer and the other Grantors under the Secured Note Documents and subject to the provisions of Section 5.4(a)), the Secured Note Claimholders, the Secured Note Collateral Agent and any of them may, at any time and from time to time in accordance with the Secured Note Documents and/or applicable law, without the consent of, or notice to, the Subordinated Claimholders, without incurring any liabilities to the Subordinated Claimholders and without impairing or releasing the Lien priorities and other benefits provided in this Agreement (even if any right of subrogation or other right or remedy of the Subordinated Claimholders are affected, impaired or extinguished thereby) do any one or more of the following:

(i)

change the manner, place or terms of payment or change or extend the time of payment of, or amend, renew, exchange, increase, supplement or alter, the terms of any of the Secured Note Obligations or any Lien on any Secured Note Collateral or guaranty thereof or any liability of the Issuer or any other Grantor, or any liability incurred directly or indirectly in respect thereof (including any increase in or extension of the Secured Note Obligations or issuance by Issuer of any secured Indebtedness permitted under the Secured Note Agreements, without any restriction as to the amount, tenor or terms of any such increase or extension or issuance, all of which shall constitute Secured Note Obligations) or otherwise amend, renew, exchange, extend, modify or supplement in any manner any Liens held by the Secured Note Collateral Agent or any of the Secured Note Claimholders, the Secured Note Obligations or any of the Secured Note Documents;

(ii)

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

(iii)

settle or compromise any Secured Note Obligation or any other liability of the Issuer or any other 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 Secured Note Obligations) in any manner or order; and

(iv)

exercise or delay in or refrain from exercising any right or remedy against the Issuer or any security or any other Grantor or any other Person, elect any remedy and otherwise deal freely with the Issuer, any other Grantor or any Secured Note Collateral and any security and any guarantor or any liability of the Issuer or any other Grantor to the Secured Note Claimholders or any liability incurred directly or indirectly in respect thereof, in any order, at any time, or from time to time;

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(g)

The Subordinated Claimholders also agree that the Secured Note Claimholders and the Secured Note Collateral Agent shall have no liability to the Subordinated Claimholders, and the Subordinated Claimholders hereby waive any claim against any Secured Note Claimholder or the Secured Note Collateral Agent, arising out of any and all actions which the Secured Note Claimholders or the Secured Note Collateral Agent may take or permit or omit to take with respect to:  (i) the Secured Note Documents, (ii) the collection of the Secured Note Obligations, (iii) the foreclosure upon, or sale, liquidation or other disposition of, any Secured Note Collateral, or (iv) the exercise of any other rights or remedies of the Secured Note Claimholders whatsoever.  The Subordinated Claimholders agree that the Secured Note Claimholders and the Secured Note Collateral Agent have no duty to them in respect of the maintenance or preservation of the Secured Note Collateral, the Secured Note Obligations or otherwise; and

(h)

The Subordinated 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 marshalling, appraisal, valuation, one-action, antideficiency or other similar right that may otherwise be available under applicable law with respect to the Collateral or any other similar rights a junior secured creditor may have under applicable law.  In addition, to the extent applicable, the Subordinated Claimholders also waive (i)

all rights and defenses that are or may become available to the Subordinated Claimholders by reason of Sections 2787, inclusive, and Section 3433 of the California Civil Code or similar applicable law , (ii) all rights and benefits under Section 2809 of the California Civil Code and any similar applicable law , (iii) the benefit of any statute of limitations affecting the Secured Note Obligations or the provisions hereof and (iv) all rights and benefits under Section 359.5 of the California Code of Civil Procedure and any similar applicable laws. 

7.4

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

(a)

any lack of validity or enforceability of any Senior Lien Note Documents or any Second Lien Credit Documents;

(b)

except as otherwise set forth in the 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 Second Lien Obligations, or any amendment or waiver or other modification, including any increase in the amount thereof, whether by course of conduct or otherwise, of the terms of any Senior Lien Note Document or any Second Lien Credit Document;

(c)

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 Second Lien Obligations or any guarantee thereof;

44

(d)

the commencement of any Insolvency Proceeding in respect of the Issuer or any other Grantor; or

(e)

any other circumstances which otherwise might constitute a defense available to, or a discharge of, the Issuer or any other Grantor in respect of the Senior Lien Obligations, or of the Second Lien Claimholder in respect of this Agreement.

7.5

Subordinated Claimholder Obligations Unconditional.  All rights, interests, agreements and obligations of the Secured Note Collateral Agent, the Secured Note Claimholders and the Subordinated Claimholders, respectively, hereunder shall remain in full force and effect irrespective of:

(a)

any lack of validity or enforceability of any Secured Note Documents or any Subordinated Credit Documents;

(b)

except as otherwise set forth in the Agreement, any change in the time, manner or place of payment of, or in any other terms of, all or any of the Secured Note Obligations or Subordinated 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 Secured Note Document or any Subordinated Credit Document;

(c)

any exchange or release 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 Secured Note Obligations or Subordinated Obligations or any guarantee thereof;

(d)

the commencement of any Insolvency Proceeding in respect of the Issuer or any other Grantor; or

(e)

any other circumstances which otherwise might constitute a defense available to, or a discharge of, the Issuer or any other Grantor in respect of the Secured Note Obligations, or of the Subordinated Claimholder in respect of this Agreement.

Section 8.

Miscellaneous.

8.1

Conflicts.  In the event of any conflict between the provisions of this Agreement and the provisions of the Senior Lien Note Documents, the Second Lien Credit Documents or the Subordinated Credit Documents, the provisions of this Agreement shall govern and control.

8.2

Effectiveness; Continuing Nature of this Agreement; Severability.  This Agreement shall become effective when executed and delivered by the parties hereto.  This is a continuing agreement of lien subordination and intercreditor agreement and the Senior Lien Claimholders may continue, at any time and without notice to the Second Lien Claimholder subject to the Second Lien Credit Documents, to extend credit and other financial accommodations and lend monies to or for the benefit of the Issuer or any Grantor constituting Senior Lien Obligations in reliance hereof.  The Second Lien Claimholders hereby waive any 

45

right they 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 which is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  All references to the Issuer or any other Grantor shall include the Issuer or such Grantor as debtor and debtor-in-possession and any receiver, assignee for the benefit of creditors, trustee or other successor for the Issuer or any other Grantor (as the case may be) in any Insolvency Proceeding.  This Agreement shall terminate and be of no further force and effect upon the Discharge of Senior Lien Obligations.  

8.3

Amendments; Waivers.  No amendment, modification or waiver of any provision of this Agreement that applies to any of the Second Lien Claimholders shall be effective against such Persons unless such amendment, modification or waiver shall be in a writing signed by both the Collateral Agent and each such other party hereto that is so effected by the provision being so amended, modified or waived.  Each waiver, if any, shall be a waiver only with respect to the specific instance involved and shall in no way impair the rights of the parties making such waiver or the obligations of the other parties to such party in any other respect or at any other time.  Notwithstanding the foregoing, the Issuer shall not have any right to consent to or approve any amendment, modification or waiver of any provision of this Agreement except to the extent its rights are directly affected.

8.4

Information Concerning Financial Condition of the Issuer and its Subsidiaries.  The Senior Lien Collateral Agent and the Senior Lien Claimholders, on the one hand, and the Second Lien Claimholders, on the other hand, shall each be responsible for keeping themselves informed of (a) the financial condition of the Issuer and its Subsidiaries and all endorsers and/or guarantors of the Senior Lien Obligations or the Second Lien Obligations and (b) all other circumstances bearing upon the risk of nonpayment of the Senior Lien Obligations or the Second Lien Obligations.  The Senior Lien Collateral Agent and the Senior Lien Claimholders shall have no duty to advise the Second Lien Claimholder of information known to it or them regarding such condition or any such circumstances or otherwise.  In the event the Senior Lien Collateral Agent or any of the Senior Lien Claimholders, in its or their sole discretion, undertakes at any time or from time to time to provide any such information to the Second Lien Claimholders, it or they shall be under no obligation (w) to make, and the Senior Lien Collateral Agent and the Senior Lien Claimholders shall not make, any express or implied representation or warranty, including with respect to the accuracy, completeness, truthfulness or validity of any such information so provided, (x) to provide any additional information or to provide any such information on any subsequent occasion, (y) to undertake any investigation or (z) to disclose any information which, pursuant to accepted or reasonable commercial finance practices, such party wishes to maintain confidential or is otherwise required to maintain confidential.  The Secured Note Collateral Agent and the Secured Note Claimholders, on the one hand, and the Subordinated Claimholders, on the other hand, shall each be responsible for keeping themselves informed of (a) the financial condition of the Issuer and its Subsidiaries and all endorsers and/or guarantors of the Secured Note Obligations or the Subordinated Obligations and (b) all other circumstances bearing upon the risk of nonpayment of the Secured Note Obligations or the Subordinated Obligations.  The Secured Note Collateral Agent and the Secured Note 

46

Claimholders shall have no duty to advise the Subordinated Claimholder of information known to it or them regarding such condition or any such circumstances or otherwise.  In the event the Secured Note Collateral Agent or any of the Secured Note Claimholders, in its or their sole discretion, undertakes at any time or from time to time to provide any such information to the Subordinated Claimholders, it or they shall be under no obligation (w) to make, and the Secured Note Collateral Agent and the Secured Note Claimholders shall not make, any express or implied representation or warranty, including with respect to the accuracy, completeness, truthfulness or validity of any such information so provided, (x) to provide any additional information or to provide any such information on any subsequent occasion, (y) to undertake any investigation or (z) to disclose any information which, pursuant to accepted or reasonable commercial finance practices, such party wishes to maintain confidential or is otherwise required to maintain confidential.

8.5

Subrogation.  The Second Lien Claimholders hereby defer enforcement of any rights of subrogation that they may acquire as a result of any payment hereunder until the Discharge of Senior Lien Obligations has occurred.  Upon Discharge of the Senior Lien Obligations, the Second Lien Claimholders shall be entitled to enforce rights of subrogation in respect of the rights of the Senior Lien Claimholders under the Senior Lien Note Documents to receive payments and distributions of cash, property and securities applicable to the Senior Lien Obligations to the extent that distributions otherwise payable to the Second Lien Claimholders have been applied to the Discharge of the Senior Lien Obligations, until all amounts payable under the Second Lien Obligations are paid in full.  For purposes of such subrogation, no payments or distributions to the Senior Lien Claimholders of any cash, property or securities to which the Second Lien Claimholders would be entitled pursuant to the except for the provisions of this Agreement, and no payment pursuant to the provisions of this Agreement to the Senior Lien Claimholders by the Second Lien Claimholders, shall, as among the Issuer and its creditors (other than the Senior Lien Claimholders), be treated as a payment or distribution by the Issuer to or on account of the Senior Lien Obligations.  If the Issuer fails to make any payment on the Second Lien Obligations by reason of any provision contained in this Agreement, such failure shall, notwithstanding such provision, constitute a default with respect to the Second Lien Obligations if and to the extent such failure would otherwise constitute such a default in accordance with the terms of the Second Lien Obligations.  The Subordinated Claimholders hereby defer enforcement of any rights of subrogation that they may acquire as a result of any payment hereunder until the Discharge of Secured Note Obligations has occurred.  Upon Discharge of the Secured Note Obligations, the Subordinated Claimholders shall be entitled to enforce rights of subrogation in respect of the rights of the Secured Note Claimholders under the Secured Note Documents to receive payments and distributions of cash, property and securities applicable to the Secured Note Obligations to the extent that distributions otherwise payable to the Subordinated Claimholders have been applied to the Discharge of the Secured Note Obligations, until all amounts payable under the Subordinated Obligations are paid in full.  For purposes of such subrogation, no payments or distributions to the Secured Note Claimholders of any cash, property or securities to which the Subordinated Claimholders would be entitled pursuant to the except for the provisions of this Agreement, and no payment pursuant to the provisions of this Agreement to the Secured Note Claimholders by the Subordinated Claimholders, shall, as among the Issuer and its creditors (other than the Secured Note Claimholders), be treated as a payment or distribution by the Issuer to or on account of

47

the Secured Note Obligations.  If the Issuer fails to make any payment on the Subordinated Obligations by reason of any provision contained in this Agreement, such failure shall, notwithstanding such provision, constitute a default with respect to the Subordinated Obligations if and to the extent such failure would otherwise constitute such a default in accordance with the terms of the Subordinated Obligations.

8.6

Application of Payments.  All payments received by the Senior Lien Collateral Agent or the Senior Lien Claimholders may be applied, reversed and reapplied, in whole or in part, to such part of the Senior Lien Obligations provided for in the Senior Lien Note Documents.  The Second Lien Claimholders assent to any extension or postponement of the time of payment of the Senior Lien Obligations or any part thereof and to any other indulgence or forbearance with respect thereto, to any substitution, exchange or release of any security which may at any time secure any part of the Senior Lien Obligations and to the addition or release of any other Person primarily or secondarily liable therefor.  All payments received by the Secured Note Collateral Agent or the Secured Note Claimholders may be applied, reversed and reapplied, in whole or in part, to such part of the Secured Note Obligations provided for in the Secured Note Documents.  The Subordinated Claimholders assent to any extension or postponement of the time of payment of the Secured Note Obligations or any part thereof and to any other indulgence with respect thereto, to any substitution, exchange or release of any security which may at any time secure any part of the Secured Note Obligations and to the addition or release of any other Person primarily or secondarily liable therefor.

8.7

WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER SENIOR LIEN NOTE DOCUMENT, ANY OTHER SECOND LIEN CREDIT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

8.8

Notices.  All notices permitted or required under this Agreement shall also be sent to the Senior Lien Collateral Agent, the Second Lien Collateral Agent and the PET Agent.  Unless otherwise specifically provided herein, any notice hereunder shall be in writing and may be personally served, telexed or sent by telefacsimile or United States mail or courier service and shall be deemed to have been given when delivered in person or by courier service and signed for against receipt thereof, upon receipt of telefacsimile or telex, or three Business Days after depositing it in the United States mail with postage prepaid and properly addressed.  For the purposes hereof, the addresses of the parties hereto shall be as set forth below each party’s name on the signature pages hereto, or, as to each party, at such other address as may be designated by such party in a written notice to all of the other parties.

48

8.9

Further Assurances; Applicability of Indemnification and Waivers in favor of the Collateral Agent.  The Senior Lien Collateral Agent, the Senior Lien Claimholders, the Second Lien Claimholders, the PET Agent, the Subordinated Claimholders, the Issuer and the Issuer Subsidiaries each hereby agree that each of them shall take such further action and shall execute and deliver such additional documents and instruments (in recordable form, if requested) as a party hereto may reasonably request to effectuate the terms of and the lien priorities contemplated by this Agreement.  Each party hereto acknowledges and agrees that the Senior Lien Collateral Agents shall be fully protected by and shall at all times be entitled to enjoy the full benefit of the rights, remedies, indemnities, covenants, obligations and undertakings and other protections in favor of the Agent that are set forth in such party's agreements with the Agent in the form in effect on the Closing Date as if set forth herein at length, provided that all limitations on the protection of the Agent set forth such agreements shall also be equally applicable to the Senior Lien Collateral Agent. 

8.10

Governing Law; Jurisdiction; Consent to Service of Process.  

(a)

This Agreement shall be construed in accordance with and governed by the law of the State of New York.

(b)

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

(c)

Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement, any other Secured Note Document or any Second Lien Credit Document in any court referred to in paragraph (b) of this Section.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

49

(d)

Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 8.8.  Nothing in this Agreement, any other Secured Note Document or any Second Lien Credit Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

8.11

Binding on Successors and Assigns.  This Agreement shall be binding upon the Senior Lien Collateral Agent, the Senior Lien Claimholders, the Second Lien Claimholders, the Subordinated Claimholders and their respective successors and assigns.

8.12

Specific Performance.  Each party hereto may demand specific performance of this Agreement.  Each party hereto hereby irrevocably waives any defense based on the adequacy of a remedy at law and any other defense which might be asserted to bar the remedy of specific performance in any action which may be brought by any party hereto, as the case may be.

8.13

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

8.14

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

8.15

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

8.16

No Third Party Beneficiaries.  This Agreement and the rights and benefits hereof shall inure to the benefit of each of the parties hereto and its respective successors and assigns and shall inure to the benefit of each of the parties hereto.  No other Person shall have or be entitled to assert rights or benefits hereunder.

8.17

Provisions Solely to Define Relative Rights.  The provisions of this Agreement are and are intended solely for the purpose of defining the relative rights of the Senior Lien Claimholders, the Second Lien Claimholders and the Subordinated Claimholders.  None of the Issuer, any other Grantor or any other creditor thereof shall have any rights hereunder and neither the Issuer nor any Grantor may rely on the terms hereof.  Nothing in this Agreement is intended to or shall impair the obligations of the Issuer or any other Grantor, which are absolute and unconditional, to pay the Senior Lien Obligations, the Second Lien Obligations or the Subordinated Obligations as and when the same shall become due and payable in accordance with their terms.

50

8.18

Reinstatement of Rights and Obligations upon Recovery of Payment from Senior Lien Claimholders.  

(a)

If the Senior Lien Claimholders or the Senior Lien Collateral Agent are required in any bankruptcy, reorganization, debt arrangement, or other case or proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding, in respect of the Issuer or the Guarantor, or otherwise to disgorge, turn over or otherwise pay to the estate of any of the Issuer or the Guarantor, because such amount was avoided or ordered to be paid or disgorged for any reason, including without limitation because it was found to be a fraudulent or preferential transfer, any amount (a “Recovery”), whether received as proceeds of security, enforcement of any right of set-off or otherwise, then the claims of the Senior Lien Claimholders and the Senior Lien Collateral Agent shall be reinstated to the extent of such Recovery and deemed to be outstanding as if such amount had not been received and the Senior Lien Obligations shall be deemed not to have been Paid in Full.  If this Agreement or any Senior Lien Note Document shall have been terminated prior to such Recovery, this Agreement and each such Senior Lien Note Document shall be reinstated in full force and effect and the liens thereunder deemed reinstated with no loss of relative priority, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto or thereto.  The provisions of this Section 8.18 and agreements of the parties hereto set forth herein, together with other provisions so designated, shall survive the termination of this Agreement.  

(b)

If the Secured Note Claimholders or the Secured Note Collateral Agent are required in any bankruptcy, reorganization, debt arrangement, or other case or proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding, in respect of the Issuer or the Guarantor, or otherwise to disgorge, turn over or otherwise pay to the estate of any of the Issuer or the Guarantor, because such amount was avoided or ordered to be paid or disgorged for any reason, including without limitation because it was found to be a fraudulent or preferential transfer, any amount (a “Recovery”), whether received as proceeds of security, enforcement of any right of set-off or otherwise, then the claims of the Secured Note Claimholders and the Secured Note Collateral Agent shall be reinstated to the extent of such Recovery and deemed to be outstanding as if such amount had not been received and the Secured Note Obligations shall be deemed not to have been Paid in Full.  If this Agreement or any Secured Note Document shall have been terminated prior to such Recovery, this Agreement and each such Secured Note Document shall be reinstated in full force and effect and the liens thereunder deemed reinstated with no loss of relative priority, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto or thereto.  The provisions of this Section 8.18 and agreements of the parties hereto set forth herein, together with other provisions so designated, shall survive the termination of this Agreement.  

(c)

[Signatures Follow on Next Page]

51

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

2005 AGENT; 2006 AGENT;

SENIOR INTERACTIVE AGENT; SECOND INTERACTIVE AGENT and 

CONTROL AGENT:

U.S. BANK NATIONAL ASSOCIATION

solely in its respective capacities as 2005 Agent, 2006 Agent, Senior Interactive Agent, Second Interactive Agent and Control Agent,

By:

/s/ Kathy L. Mitchell

Name:

Kathy L. Mitchell

Title:

Vice President

S-1

[Signature Page to Interactive Parent Guaranty Intercreditor Agreement]

ISSUER:

PENTHOUSE MEDIA GROUP INC., 

a Nevada corporation

By:

/s/ Paul Asher

Name: Paul Asher

 

Title: Secretary

 

S-2

 

 [Signature Page to Interactive Parent Guaranty Intercreditor Agreement]

ISSUER SUBSIDIARIES:

GENERAL MEDIA ART HOLDING, INC.

GENERAL MEDIA COMMUNICATIONS, INC.

GENERAL MEDIA ENTERTAINMENT, INC.

GENERAL MEDIA UK LIMITED

GMCI INTERNET OPERATIONS, INC.

GMI ON-LINE VENTURES, LTD.

PENTHOUSE CLUBS INTERNATIONAL ESTABLISHMENT

PENTHOUSE IMAGES ACQUISITIONS, LTD.

WEST COAST FACILITIES INC.

PMGI HOLDINGS INC.

PURE ENTERTAINMENT TELECOMMUNICATIONS, INC.

By: /s/ Daniel C. Staton

Name: Daniel C. Staton

 

Title: Chairman

PENTHOUSE FINANCIAL SERVICES N.V.

By: /s/ Daniel C. Staton

Name: Daniel C. Staton

 

Title: Managing Director

PENTHOUSE DIGITAL MEDIA PRODUCTIONS INC.

VIDEO BLISS, INC.

DANNI ASHE, INC.

By: /s/ Paul Asher

Name:

Paul Asher

Title:

President

SNAPSHOT PRODUCTIONS, LLC

By: /s/ Paul Asher

Name:

Paul Asher

Title:

Manager

S-3

 

 [Signature Page to Interactive Parent Guaranty Intercreditor Agreement]

SENIOR LIEN CLAIMHOLDERS:

SATELLITE SENIOR INCOME FUND, LLC

By:

Satellite Asset Management, L.P.,

Its Investment Manager

By:

/s/ Simon Raykher

Name: Simon Raykher

Title: General Counsel

S-4-A

[Signature Page to Interactive Parent Guaranty Intercreditor Agreement]

EPIC DISTRESSED DEBT OPPORTUNITY MASTER FUND, LTD

By:

/s/ Herbert Seif

Name:

Herbert Seif

Title:

Director

By:

/s/ James Duplessie

Name: James Duplessie

Title:

Managing Member, Epic Asset

Management

S-4-B

[Signature Page to Interactive Parent Guaranty Intercreditor Agreement]

DEL MAR MASTER FUND LTD.

By:

Del Mar Asset Management, L.P.

 

By:

/s/ Marc V. Simons

Name: Marc V. Simons

Title:

Director

S-4-C

[Signature Page to PMGI Notes Guaranty Intercreditor Agreement]

ANDREW B. CONRU TRUST AGREEMENT

By: /s/ Andrew B. Conru

Andrew B. Conru, Trustee

S-4-D

[Signature Page to Interactive Parent Guaranty Intercreditor Agreement]

MAPSTEAD TRUST, 

CREATED ON APRIL 16, 2002

By: /s/ Lars Mapstead

Lars Mapstead, Trustee

By: /s/ Marin A. Mapstead

Marin A. Mapstead, Trustee

S-4-E

[Signature Page to Interactive Parent Guaranty Intercreditor Agreement]

ROCK/VIEW TRADING, LTD.

By:

/s/ Kevin Schweitzer

Name: Kevin Schweitzer

Title:

Chief Investment Officer, RockView

Management, LLC

S-4-F

[Signature Page to Interactive Parent Guaranty Intercreditor Agreement]

MARC H. BELL

/s/ Marc H. Bell

S-4-G

[Signature Page to Interactive Parent Guaranty Intercreditor Agreement]

STATON FAMILY INVESTMENTS, LTD.

By:

/s/ Daniel C. Staton

Name: Daniel C. Staton

Title:

S-4-H

[Signature Page to Interactive Parent Guaranty Intercreditor Agreement]

CAMOFI MASTER LDC

By:

/s/ Richard Smithline

Name: Richard Smithline

Title:   Director

CAMHZN MASTER LDC

By:

/s/ Richard Smithline

Name: Richard Smithline

Title:   Director

S-4-I

[Signature Page to Interactive Parent Guaranty Intercreditor Agreement]

VISIUM LONG BIAS OFFSHORE FUND, LTD.

By: Visium Asset Management, LLC, its Investment Advisor

By:

/s/ Mark Gottlieb

Name: Mark Gottlieb

Title:

Member and Chief Compliance Officer of Visium Asset Management, LLC

VISIUM LONG BIAS FUND, LP

By: Visium Asset Management, LLC, its Investment Advisor

By:

/s/ Mark Gottlieb

Name: Mark Gottlieb

Title:

Member and Chief Compliance Officer of Visium Asset Management, LLC

VISIUM BALANCED OFFSHORE FUND, LTD.

By: Visium Asset Management, LLC, its Investment Advisor

By:

/s/ Mark Gottlieb

Name: Mark Gottlieb

Title:

Member and Chief Compliance Officer of Visium Asset Management, LLC

VISIUM BALANCED FUND, LP

By: Visium Asset Management, LLC, its Investment Advisor

By:

/s/ Mark Gottlieb

Name: Mark Gottlieb

Title:

Member and Chief Compliance Officer of Visium Asset Management, LLC

S-4-J

[Signature Page to Interactive Parent Guaranty Intercreditor Agreement]

IMPERIAL CAPITAL, LLC

By:

/s/ Mark Martis

Name: Mark Martis

Title:

Chief Operating Officer

S-4-K

[Signature Page to Interactive Parent Guaranty Intercreditor Agreement]

SECOND LIEN CLAIMHOLDERS:

TRUST 1:

ANDREW B. CONRU TRUST AGREEMENT

By: /s/ Andrew B. Conru

Andrew B. Conru, Trustee

TRUST 2:

MAPSTEAD TRUST, 

CREATED ON APRIL 16, 2002

By: /s/ Lars Mapstead

Lars Mapstead, Trustee

By: /s/ Marin A. Mapstead

Marin A. Mapstead, Trustee

 

S-5

[Signature Page to Interactive Parent Guaranty Intercreditor Agreement]

PET NOTE AGENT:

PET Capital Partners LLC

By: /s/ Daniel C. Staton

Name:

 

Title:

By: /s/ Marc H. Bell

Name:

 

Title:

S-6

[Signature Page to Interactive Parent Guaranty Intercreditor Agreement]

PET Capital Partners LLC

By: /s/ Daniel C. Staton

Name:

 

Title:

By: /s/ Marc H. Bell

Name:

Title:  

Absolute Return Europe Fund

By: /s/ Glenn Kennedy

Name:  Glenn Kenedy

Title:  authorized signatory

Florescue Family Corporation 

By: /s/ Barry Florescue

Name:  Barry Florescue

Title:  President

S-7

[Signature Page to Interactive Parent Guaranty Intercreditor Agreement]

SELLER NOTE HOLDERS:

TRUST 1:

ANDREW B. CONRU TRUST AGREEMENT

By: /s/ Andrew B. Conru

Andrew B. Conru, Trustee

TRUST 2:

MAPSTEAD TRUST, 

CREATED ON APRIL 16, 2002

By: /s/ Lars Mapstead

Lars Mapstead, Trustee

By: /s/ Marin A. Mapstead

Marin A. Mapstead, Trustee

[Signature Page to Interactive Parent Guaranty Intercreditor Agreement]

2005 HOLDERS

DB DISTRESSED OPPORTUNITIES MASTER PORTFOLIO, LTD

THE OPPORTUNITY FUND, LLC

MW POST PORTFOLIO FUND, LTD.

POST DISTRESSED MASTER FUND, L.P.

POST TOTAL RETURN MASTER FUND, L.P.

POST STRATEGIC MASTER FUND, L.P.

SPHINX DISTRESSED SEGREGATED PORTFOLIO

STATE OF SOUTH DAKOTA RETIREMENT SYSTEM

By:

Post Advisory Group, LLC, 

as Authorized Agent

By:

/s/ Gary Hobart

Name:

 

Title:

[Signature Page to Interactive Parent Guaranty Intercreditor Agreement]

SATELLITE SENIOR INCOME FUND, LLC

By:

Satellite Asset Management, L.P. 

By:

/s/ Simon Raykher

Name:

Simon Raykher

[Signature Page to Interactive Parent Guaranty Intercreditor Agreement]

CANYON VALUE REALIZATION FUND, L.P.

FINVEST CAPITAL LTD.

CANYON BALANCED EQUITY MASTER FUND, LTD.

MACVEST 1, LTD.

CANPARTNERS INVESTMENTS IV, LLC

INSTITUTIONAL BENCHMARKS SERIES (MASTER FEEDER) LIMITED IN RESPECT OF CENTAUR SERIES

By:

Canyon Capital Advisors LLC, 

as Investment Advisor

By:

/s/ John H. Simpson

Name: 

Title: 

CANPARTNERS INVESTMENTS IV, LLC

By:

/s/ John H. Simpson

Name: 

Title: 

[Signature Page to Interactive Parent Guaranty Intercreditor Agreement]

2006 HOLDERS

THE OPPORTUNITY FUND, LLC

POST DISTRESSED MASTER FUND, L.P.

POST STRATEGIC MASTER FUND, L.P.

POST TOTAL RETURN MASTER FUND, L.P.

By:

Post Advisory Group, LLC, 

as Authorized Agent

By:

/s/ Gary Hobart

Name:

Title:

[Signature Page to Interactive Parent Guaranty Intercreditor Agreement]

SATELLITE SENIOR INCOME FUND, LLC

By:

Satellite Asset Management, L.P. 

By:

/s/ Simon Raykher

Name: 

Simon Raykher

Title:

General Counsel

[Signature Page to Interactive Parent Guaranty Intercreditor Agreement]

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