INTERCREDITOR AGREEMENT

Intercreditor Agreement

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GUGGENHEIM CORPORATE FUNDING, LLC | WELLS FARGO BANK, NA

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Title: INTERCREDITOR AGREEMENT
Governing Law: New York Date: 11/14/2006
Industry: CCOALL Sector: ENERGY

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EXHIBIT 10.3

Execution Version

INTERCREDITOR AGREEMENT

This INTERCREDITOR AGREEMENT is dated as of October 12, 2006, and

entered into by and between GUGGENHEIM CORPORATE FUNDING, LLC, in its capacity

as administrative agent for the holders of the First Lien Obligations (as

defined below) (including its successors and assigns from time to time, the

"FIRST LIEN AGENT"), and WELLS FARGO BANK, N.A.("TRUSTEE"), in its capacity as

trustee and collateral agent for the holders of the Second Lien Obligations (as

defined below) (including its successors and assigns from time to time, the

"SECOND LIEN AGENT"), and acknowledged and agreed to by NATIONAL COAL

CORPORATION., a Tennessee corporation (the "COMPANY"), NATIONAL COAL CORP., a

Florida corporation ("HOLDINGS") and each of the other Guarantors (as defined

below). Capitalized terms used herein but not otherwise defined herein have the

meanings set forth in SECTION 1 below.

RECITALS

WHEREAS, the Company, as borrower (in such capacity, the "FIRST LIEN

DEBTOR"), and the subsidiaries of the Company party thereto from time to time as

guarantors (collectively, the "FIRST LIEN GUARANTORS"), the lender(s) party

thereto, and GUGGENHEIM CORPORATE FUNDING, LLC, as the First Lien Agent, have

entered into that certain Credit Agreement, dated as of October 12 2006,

providing for loans to the First Lien Debtor thereunder (as Modified or

Refinanced from time to time pursuant to a Permitted Modification or a Permitted

Refinancing, the "FIRST LIEN FINANCING AGREEMENT");

WHEREAS, as security for the First Lien Obligations, the First Lien

Debtor executed and delivered, among other instruments, those First Lien

Collateral Documents identified on Exhibit B attached hereto and made a part

hereof, which instruments were recorded in the recording offices as identified

on Exhibit B hereto;

WHEREAS, the Company, as issuer of the Notes (defined below) (in such

capacity, the "SECOND LIEN DEBTOR"; the First Lien Debtor and the Second Lien

Debtor, collectively, the "DEBTOR"), and the subsidiaries of the Company party

thereto from time to time as guarantors (collectively, the "SECOND LIEN

GUARANTORS"; the First Lien Guarantors and the Second Lien Guarantors,

collectively, the "Guarantors"), the purchasers party thereto, and WELLS FARGO

BANK, N.A., as Trustee, have entered into that certain Indenture, dated as of

December 29, 2005 (the "INDENTURE"); pursuant to which the Second Lien Debtor

has issued its 10.5% Senior Secured Notes due 2010 (the "NOTES"), which Notes

are guaranteed by the Second Lien Guarantors (the "SECOND LIEN GUARANTEES");

WHEREAS, as security for the Second Lien Obligations, the Second Lien

Debtor executed and delivered, among other instruments, those Second Lien

<PAGE>

Collateral Documents identified on Exhibit C attached hereto and made a part

hereof, which instruments were recorded in the recording offices as identified

on Exhibit C hereto;

WHEREAS, the parties hereto intend that the First Lien Obligations will

be secured on a first priority basis by Liens on the Common Collateral pursuant

to the terms of the First Lien Documents;

WHEREAS, the parties hereto intend that the Second Lien Obligations

will be secured on a second priority basis by Liens on the Common Collateral

pursuant to the terms of the Second Lien Collateral Documents; and

WHEREAS, the First Lien Documents and the Second Lien Documents

provide, among other things, that the parties thereto shall set forth in this

Agreement their respective rights and remedies with respect to the Common

Collateral;

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. As used in the Agreement, the following terms

shall have the following meanings:

"AGREEMENT" means this Intercreditor Agreement, as Modified from time

to time in accordance with the terms hereof.

"ASSIGNMENT AND ACCEPTANCE AGREEMENT" has the meaning set forth in

SECTION 5.7(J) hereof.

"BANKRUPTCY CODE" means Title 11 of the United States Code entitled

"Bankruptcy," as now and hereafter in effect, or any successor statute.

"BANKRUPTCY LAW" means the Bankruptcy Code and any similar federal,

state or foreign bankruptcy, insolvency, reorganization or other similar laws

affecting the enforcement of creditors' rights generally.

"BUSINESS DAY" means a day other than a Saturday, Sunday or other day

on which commercial banks in New York City are expressly authorized or required

by law to close.

"COMMON COLLATERAL" means, at any time of determination, collectively,

the First Lien Collateral, and all of the other property of Grantor, in each

case above in which each of the First Lien Agent, on behalf of itself and the

First Lien Claimholders, and the Second Lien Agent, on behalf of itself and the

Second Lien Claimholders, has a valid and perfected Lien (which Lien has not

been avoided, disallowed, set aside, invalidated or subordinated pursuant to

Chapter 5 of the Bankruptcy Code or otherwise) securing payment of First Lien

Obligations or Second Lien Obligations, respectively.

<PAGE>

"COMPANY" has the meaning set forth in the Preamble hereto.

"CREDITORS" means, collectively, the First Lien Agent, on behalf of

itself and the First Lien Claimholders, and the Second Lien Agent, on behalf of

itself and the Second Lien Claimholders, and their respective successors and

assigns.

"CUT-OFF DATE" has the meaning set forth in SECTION 5.7(B) hereof.

"DEBTOR" has the meaning set forth in the Recitals hereto.

"DIP FINANCING" means any financing provided by a lender under Section

364 of the Bankruptcy Code or consent to the use of cash collateral under

Section 363 of the Bankruptcy Code.

"DISCHARGE OF FIRST LIEN OBLIGATIONS" means the payment in full in cash

of the principal of and interest and premium, if any, in respect of the

indebtedness of the First Lien Debtor and of the First Lien Guarantors under the

First Lien Financing Agreement or, with respect to Hedging Obligations or

letters of credit outstanding thereunder, delivery of cash collateral or

backstop letters of credit in respect thereof in compliance with the First Lien

Financing Agreement, in each case after or concurrently with termination of all

commitments to extend credit thereunder, and payment in full in cash of any

other First Lien Obligations that are due and payable or otherwise accrued and

owing at or prior to the time such principal, interest and premium, if any, are

paid. If after receipt of any payment of, or of proceeds of Common Collateral

applied to the payment of, any First Lien Obligations, any First Lien

Claimholder is required to surrender or return such payment or proceeds to any

Person for any reason, then the First Lien Obligations intended to be satisfied

and discharged by such payment or proceeds shall be reinstated and continue as

if such payment or proceeds had not been received by such holder.

"DISPOSITION" has the meaning set forth in SECTION 5.1(A)(I).

"ENFORCEMENT ACTION" means any action under applicable law:

(1) to foreclose, execute or levy on, collect on, take possession of or

control of, or sell or otherwise realize upon (judicially or non-judicially) or

to lease, license or otherwise dispose of (whether publicly or privately), any

Common Collateral or otherwise to exercise or enforce remedial rights with

respect to Common Collateral under the First Lien Documents or the Second Lien

Documents, as applicable, or any other applicable agreement, document or

instrument pertaining thereto (including, without limitation, by way of setoff,

noticing of any public or private sale or other disposition pursuant to the UCC

or other applicable law, notification of account debtors, notification of

depositary banks under deposit account control agreements or exercise of rights

under landlord consents, if applicable),

<PAGE>

(2) to solicit bids from third parties to conduct the liquidation or

disposition of any Common Collateral or to engage or retain sales brokers,

marketing agents, investment bankers, accountants, appraisers, auctioneers or

other third parties for the purposes of valuing, marketing, promoting and

selling any Common Collateral,

(3) to receive a transfer of Common Collateral in satisfaction of any

indebtedness or other obligation secured thereby, or

(4) to otherwise enforce any security interest or other right or

remedy, as a secured creditor or otherwise, pertaining to the Common Collateral

at law, in equity or pursuant to the First Lien Documents or the Second Lien

Documents, as applicable, or any other applicable agreement, document or

instrument pertaining thereto (including, without limitation, the commencement

of any applicable legal proceedings or other actions against or with respect to

all or any portion of the Common Collateral to facilitate the actions described

in the immediately preceding clauses (1), (2) and (3), and exercising voting

rights in respect of any equity interests comprising Common Collateral);

PROVIDED that "Enforcement Action" shall not be deemed to include the

commencement of, or joinder in filing of a petition for commencement of, an

Insolvency Proceeding against the owner of Common Collateral.

"FIRST LIEN AGENT" has the meaning set forth in the preamble hereto.

"FIRST LIEN ANCILLARY OBLIGATIONS" has the meaning set forth in Section

5.7(a) hereof.

"FIRST LIEN CLAIMHOLDERS" means, at any relevant time, the holders of

First Lien Obligations at such time, including without limitation the First Lien

Lenders and the First Lien Agent under the First Lien Financing Agreement.

"FIRST LIEN COLLATERAL" means all of the real property, and interests

therein, and all of the personal property of Grantor, whether now owned or

hereafter acquired or existing, whether tangible or intangible, and wherever

located, with respect to which a Lien is granted in favor of First Lien Agent

for the benefit of itself and the other First Lien Claimholders to secure any

First Lien Obligations (which Lien has not been released by First Lien Agent).

"FIRST LIEN COLLATERAL DOCUMENTS" means the Security Documents (as

defined in the First Lien Financing Agreement) and any other agreement, document

or instrument (including any mortgage or deed of trust or fixture filing)

pursuant to which a Lien is granted securing any First Lien Obligations or under

which rights or remedies with respect to such Liens are governed.

<PAGE>

"FIRST LIEN DEBTOR" has the meaning set forth in the Recitals hereto.

"FIRST LIEN DOCUMENTS" means the First Lien Financing Agreement, the

First Lien Guaranty, the First Lien Collateral Documents and all other

agreements, documents and instruments at any time entered into by Grantor or any

other Person with or in favor of the First Lien Agent and/or the First Lien

Lenders in connection therewith or related thereto, including this Agreement, as

all of the foregoing now exist or may hereafter be Modified pursuant to a

Permitted Modification or be Refinanced pursuant to a Permitted Refinancing.

"FIRST LIEN FINANCING AGREEMENT" has the meaning set forth in the

Recitals hereto.

"FIRST LIEN GUARANTORS" has the meaning set forth in the Recitals

hereto.

"FIRST LIEN GUARANTY" means any guaranty of any First Lien Guarantor

pursuant to which such First Lien Guarantor shall guarantee the First Lien

Obligations of the First Lien Debtor.

"FIRST LIEN LENDERS" means the "LENDERS" under and as defined in the

First Lien Financing Agreement and any other lenders from time to time under the

First Lien Financing Agreement.

"FIRST LIEN OBLIGATIONS" means, at any time of determination, but

subject to the limitations set forth in Section 5.3(a), all Obligations (in an

aggregate amount not to exceed the Maximum First Lien Debt Amount) then secured

by a Lien on the Common Collateral, and owing by Grantor to the First Lien Agent

and/or the First Lien Lenders, under the First Lien Documents, including

principal, premium (if any), interest (including interest accruing on or after

the filing of any petition in bankruptcy or for reorganization relating to the

Grantor to the extent a claim for post-filing interest is allowed in such

proceedings), fees, charges, expenses, reimbursement obligations, and all other

amounts payable thereunder or in respect thereof, including Obligations of any

Grantor in respect of Hedging Obligations under the First Lien Documents in

respect of interest on First Lien Principal Obligations. To the extent any

payment with respect to the First Lien Obligations (whether by or on behalf of

Grantor, as proceeds of security, enforcement of any right of set-off or

otherwise) is declared to be fraudulent or preferential in any respect, set

aside or required to be paid to a debtor in possession, trustee, receiver or

similar Person, then the obligation or part thereof originally intended to be

satisfied shall be deemed to be reinstated and outstanding as if such payment

had not occurred.

"FIRST LIEN PLEDGED COLLATERAL" has the meaning set forth in SECTION

5.5 hereof.

"FIRST LIEN PRINCIPAL OBLIGATIONS" means, at any time of determination,

the aggregate unpaid amount of the First Lien Obligations constituting principal

of indebtedness (with letters of credit being deemed to have a principal amount

equal to the maximum potential liability of the First Lien Debtor and First Lien

Guarantors thereunder or in respect thereof).

<PAGE>

"GOVERNMENTAL AUTHORITY" means the government of the United States of

America, any other nation or any political subdivision thereof, whether state or

local, and any agency, authority, instrumentality, regulatory body, court,

central bank or other entity exercising executive, legislative, judicial,

taxing, regulatory or administrative powers or functions of or pertaining to

government (including any supra-national bodies such as the European Union or

the European Central Bank).

"GRANTOR" means the collective reference to the Debtor and the

Guarantors, or any one or more of them, as the context may require.

"GUARANTORS" has the meaning set forth in the Recitals hereto.

"HEDGING OBLIGATIONS" means, with respect to any specified Person, the

obligations of such Person under:

(1) interest rate swap agreements (whether from fixed to floating or

from floating to fixed), interest rate cap agreements and interest rate collar

agreements;

(2) other agreements or arrangements designed to manage interest rates

or interest rate risk; and

(3) other agreements or arrangements designed to protect such Person

against fluctuations in currency exchange rates or commodity prices,

in each case entered into in the ordinary course of business and not for

speculative purposes.

"INDENTURE" has the meaning set forth in the Recitals hereto.

"INSOLVENCY PROCEEDING" means (a) any voluntary or involuntary case or

proceeding under Bankruptcy Law with respect to Grantor, (b) any other voluntary

or involuntary insolvency, reorganization or bankruptcy case or proceeding, or

any receivership, liquidation, reorganization or other similar case or

proceeding with respect to Grantor or with respect to a material portion of its

assets, (c) any liquidation, dissolution, reorganization or winding up of

Grantor whether voluntary or involuntary and whether or not involving insolvency

or bankruptcy or (d) any assignment for the benefit of creditors or any other

marshalling of assets and liabilities of Grantor.

"LIEN" means any mortgage, deed of trust, pledge, hypothecation,

assignment, charge, deposit arrangement, encumbrance (including easements,

rights-of-way and the like), lien (statutory or other), security interest or

preference, priority or other security agreement, transfer intended as security

or preferential arrangement of any kind or nature whatsoever intended to assure

payment of any indebtedness or other Obligation, including any conditional sale

or other title retention agreement, the interest of a lessor under a capital

<PAGE>

lease, or any financing lease having substantially the same economic effect as

any of the foregoing, in the case of securities, any purchase option, call or

similar right of a third party with respect to such securities, and the filing

of any financing statement under the Uniform Commercial Code or comparable law

of any jurisdiction naming the owner of the asset to which such Lien relates as

debtor.

"MAJOR EVENT OF DEFAULT" means the occurrence or existence of any event

or condition described in the following Sections of the Indenture: 601(1),

601(2), 601(3), 601(4), 601(5) (solely in respect of the covenants and

agreements of the Company and any other Grantor contained in Articles 3, 4, 5,

9, 10 and 11 of the Indenture), and any comparable provisions of any Second Lien

Financing Agreements evidencing any Permitted Modification or Permitted

Refinancing thereof .

"MAXIMUM FIRST LIEN DEBT AMOUNT" means the sum of (i) the outstanding

amount of First Lien Principal Obligations not to exceed (x) $10,000,000 in the

aggregate (calculated, in the case of any such First Lien Principal Obligations

issued at a discount, at the aggregate amount due at maturity thereof) less (y)

the aggregate amount of all repayments of term indebtedness constituting First

Lien Principal Obligations and all repayments of revolving credit indebtedness

constituting First Lien Principal Obligations (effected with a corresponding

commitment reduction under the First Lien Financing Agreement) pursuant to

clause (i) of the second paragraph of Section 4.10 of the Indenture plus (ii)

accrued but unpaid interest and, if applicable, premiums on the amount of such

principal not in excess of the amount referred to in clause (i) above plus (iii)

all fees, expenses, reimbursement obligations, guarantees and all other amounts

of a type not referred to in clause (i) or (ii) above payable in respect

thereof) plus (iv) Hedging Obligations in respect of interest on First Lien

Principal Obligations referred to in clause (i) above, in each case above

payable pursuant to the First Lien Documents.

"MODIFICATION" means, with respect to any agreement or other document,

any amendment, supplement, extension, renewal, restatement, restructuring or

other modification thereof, and "MODIFY" and "MODIFIED" shall have correlative

meanings.

"NEW AGENT" has the meaning set forth in SECTION 5.6 hereof.

"OBLIGATIONS" means all obligations of every nature outstanding from

time to time, whether for principal, interest, fees, expenses, charges,

premiums, indemnification or otherwise.

"OPINION OF COUNSEL" means an opinion from legal counsel who is

reasonably acceptable to the Trustee. The counsel may be an employee of or

counsel to the Company, any Subsidiary of the Company or the Trustee.

"PERMITTED MODIFICATION" means a Modification that complies with

SECTION 5.3(A) or (B), as applicable, including each proviso thereto.

<PAGE>

"PERMITTED REFINANCING" means a Refinancing that complies with SECTION

5.3(A) or (B), as applicable, including each proviso thereto.

"PERSON" means any natural person, corporation, limited liability

company, trust, joint venture, association, company, partnership, Governmental

Authority or other entity.

"PURCHASE COMMITMENT" has the meaning set forth in SECTION 5.7(B)

hereof.

"PURCHASE DATE" has the meaning set forth in SECTION 5.7(B) hereof.

"PURCHASE OPTION EVENT" means any of (i) the First Lien Agent's or any

First Lien Claimholder's (A) commencement of any Enforcement Action against the

First Lien Collateral or (B) acceleration of the First Lien Obligations (other

than pursuant to commencement by any Person other than any First Lien

Claimholder of an Insolvency Proceeding relating to any Grantor) or (C)

commencement of, or joinder in filing a petition for the commencement of, an

Insolvency Proceeding against any Grantor, (ii) the occurrence of an Event of

Default under the Indenture and (iii) the occurrence of an Insolvency Proceeding

in respect of any Grantor.

"PURCHASE OPTION EVENT NOTICE" has the meaning set forth in SECTION

5.7(A) hereof.

"PURCHASE OPTION STANDSTILL PERIOD" has the meaning set forth in

SECTION 5.7(A) hereof.

"PURCHASE NOTICE" has the meaning set forth in SECTION 5.7(F) hereof.

"PURCHASE OPTION PERIOD" has the meaning set forth in SECTION 5.7(B)

hereof.

"PURCHASE PERCENTAGE" has the meaning set forth in SECTION 5.7(F)

hereof.

"PURCHASE SHORTFALL" has the meaning set forth in SECTION 5.7(D)

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, other than pursuant to a DIP Financing, and

"REFINANCED" and "REFINANCING" shall have correlative meanings.

"REPLACEMENT FIRST LIEN AGENT" has the meaning set forth in Section

5.7(j) hereof.

"SECOND LIEN AGENT" has the meaning set forth in the preamble hereto.

"SECOND LIEN CLAIMHOLDERS" means, at any relevant time, the holders of

Second Lien Obligations at such time, including without limitation the Second

Lien Noteholders and the Second Lien Agent under the Second Lien Financing

Agreements.

<PAGE>

"SECOND LIEN CLAIMHOLDER CONSENT" means the written consent of Holders

(as defined in the Indenture, or any comparable term contained in any successor

Second Lien Financing Agreement) of Notes (or other relevant Second Lien

Obligations) in the minimum aggregate principal amount required under Article 9

of the Indenture (or any comparable provision of any successor Second Lien

Financing Agreement).

"SECOND LIEN COLLATERAL" means all of the real property, and interest

therein, and all of the personal property of Grantor, whether now owned or

hereafter acquired or existing, whether tangible or intangible, and wherever

located, with respect to which a Lien is granted in favor of Second Lien Agent

for the benefit of itself and the other Second Lien Claimholders to secure any

Second Lien Obligations (which Lien has not been released by Second Lien Agent).

"SECOND LIEN COLLATERAL DOCUMENTS" means the Second Lien Financing

Agreements, the Second Lien Security Agreement and any other agreement, document

or instrument (including any mortgage, deed of trust or fixture filing) 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 DEBTOR" has the meaning set forth in the Recitals hereto.

"SECOND LIEN DOCUMENTS" means the Second Lien Financing Agreements and

the Second Lien Collateral Documents.

"SECOND LIEN FINANCING AGREEMENTS" means the Indenture, the Notes, and

the Second Lien Guarantees, and all of the other agreements, documents and

instruments at any time entered into by Grantor or any other Person with or in

favor of the Second Lien Agent and/or the Second Lien Lenders in connection

therewith or related thereto, including this Agreement, as all of the foregoing

now exist or may hereafter be Modified pursuant to a Permitted Modification or

be Refinanced pursuant to a Permitted Refinancing.

"SECOND LIEN GUARANTORS" has the meaning set forth in the Recitals

hereto.

"SECOND LIEN GUARANTEES" has the meaning set forth in the Recitals

hereto.

"SECOND LIEN NOTEHOLDERS" means the "HOLDERS" under and as defined in

the Indenture and any other lenders from time to time under the Second Lien

Financing Agreements.

"SECOND LIEN OBLIGATIONS" means, at any time of determination, all

Obligations outstanding under the Second Lien Financing Agreements and the other

Second Lien Documents owing by the Company or any other Grantor to the Second

Lien Agent and/or the Second Lien Noteholders thereunder, however evidenced,

whether as principal, surety, endorser, guarantor or otherwise, whether arising

(i) during or after the initial or any renewal term of the Second Lien Documents

pursuant to a Permitted Modification or (ii) after the commencement of any case

<PAGE>

with respect to Grantor under Bankruptcy Law, including the payment of interest

and other amounts which would accrue and become due but for the commencement of

such case, to the extent such amounts are allowed or allowable in any such

case), whether direct or indirect, absolute or contingent, joint or several, due

or not due, primary or secondary, liquidated or unliquidated. To the extent any

payment with respect to the Second Lien Obligations (whether by or on behalf of

Grantor, as proceeds of security, enforcement of any right of set-off or

otherwise) is declared to be fraudulent or preferential in any respect, set

aside or required to be paid to a debtor in possession, trustee, receiver or

similar Person, then the obligation or part thereof originally intended to be

satisfied shall be deemed to be reinstated and outstanding as if such payment

had not occurred.

"SECOND LIEN PLEDGED COLLATERAL" has the meaning set forth in SECTION

5.5 hereof.

"SECOND LIEN SECURITY AGREEMENT" means the Security Agreement, dated as

of December 29, 2005, among the Second Lien Debtor, the Second Lien Guarantors

and the Second Lien Agent.

"STANDSTILL PERIOD" has the meaning set forth in SECTION 3.1(A)(I)

hereof.

"SUBSIDIARY" means, with respect to any Person, any corporation,

partnership, association, joint venture or other business entity of which more

than 50% of the total voting power of shares of stock or other ownership

interests entitled (without regard to the occurrence of any contingency) to vote

in the election of the Person or Persons (whether directors, managers, trustees

or other Persons performing similar functions) having the power to direct or

cause the direction of the management and policies thereof is at the time owned

or controlled, directly or indirectly, by that Person or one or more of the

other Subsidiaries of that Person or a combination thereof.

"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 or provides otherwise (a) subject, where applicable,

to the limitations set forth in this Agreement, 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)

<PAGE>

the words "asset" and "property" shall be construed to have the same meaning and

effect and to refer to any and all tangible and intangible assets and

properties, including cash, securities, accounts and contract rights.

Section 2 LIEN PRIORITIES.

2.1 RELATIVE PRIORITIES.

(a) Each Creditor hereby acknowledges its understanding

that the other Creditor has been granted a Lien upon the Common Collateral.

Notwithstanding the date, manner or order of grant, attachment or perfection of

any Liens securing the Second Lien Obligations granted on the Common Collateral

or of any Liens securing the First Lien Obligations granted on the Common

Collateral and notwithstanding any provision of the UCC or any other applicable

law or the provisions of the Second Lien Documents or any other circumstance

whatsoever, each of the Second Lien Agent, on behalf of itself and the Second

Lien Claimholders, and the First Lien Agent, on behalf of itself and the First

Lien Claimholders hereby agrees that:

(i) all Liens granted under or pursuant to the First Lien

Documents on the Common Collateral securing the First

Lien Obligations up to but not exceeding the Maximum

First Lien Debt Amount now or hereafter held by or on

behalf of the First Lien Agent or any First Lien

Claimholder, or any agent or trustee therefor, shall,

so long as such Liens are valid and perfected, be and

remain senior in all respects and prior to all Liens

granted to the Second Lien Agent or the Second Lien

Claimholders under or pursuant to the Second Lien

Collateral Documents on the Common Collateral

securing any Second Lien Obligations;

(ii) any Lien granted under or pursuant to the Second Lien

Collateral Documents on the Common Collateral now or

hereafter held by or on behalf of the Second Lien

Agent or any Second Lien Claimholders or any agent or

trustee therefor, shall be junior and subordinate in

all respects to the Liens granted under or pursuant

to the First Lien Documents on the Common Collateral

securing the First Lien Obligations up to the Maximum

First Lien Debt Amount, so long as such Liens under

or pursuant to the First Lien Documents are valid and

perfected; and

(iii) provided that Second Lien Claimholder Consent shall

have been obtained to (i) the incurrence of

Obligations pursuant to the First Lien Documents in

excess of the Maximum First Lien Debt Amount and (ii)

the Liens granted pursuant to the First Lien

Documents on any Common Collateral securing any such

excess amounts, and subject to Section 5.3(a), all

Liens of the Second Lien Agent and the Second Lien

Claimholders on the Common Collateral shall, so long

as such Liens are valid and perfected, have priority

over the Liens of the First Lien Agent or the First

Lien Claimholders on the Common Collateral to the

extent that the Liens of the First Lien Agent or the

First Lien Claimholders secure First Lien Obligations

in excess of the Maximum First Lien Debt Amount, and

to the extent that the Liens of the First Lien Agent

or the First Lien Claimholders on the Common

<PAGE>

Collateral secure First Lien Obligations in excess of

the Maximum First Lien Debt Amount, but only with

respect to such excess amounts, such Liens of the

First Lien Agent and the First Lien Claimholders

shall be junior and subordinate in all respects to

the Liens of the Second Lien Agent and the Second

Lien Claimholders granted under or pursuant to the

Second Lien Documents on the Common Collateral so

long as such Liens under or pursuant to the Second

Lien Documents are valid and perfected, and the First

Lien Agent and First Lien Claimholders shall have,

mutatis mutandis, with respect thereto, and to Common

Collateral held or received therefor (including

proceeds), analogous obligations (other than the

obligations in respect of the Standstill Period) to

the Second Lien Agent and Second Lien Claimholders

under this Agreement as the Second Lien Agent and

Second Lien Claimholders have under this Agreement in

favor of the First Lien Agent and First Lien

Claimholders with respect to the First Lien

Obligations not exceeding the Maximum First Lien Debt

Amount and the Common Collateral securing such First

Lien Obligations not exceeding the Maximum First Lien

Debt Amount, and the Second Lien Agent and Second

Lien Claimholders shall have, mutatis mutandis, the

same limitations on responsibilities, duties and

liability in respect of the foregoing as the First

Lien Agent and First Lien Claimholders have under

this Agreement with respect to the Second Lien Agent

and Second Lien Claimholders.

(b) The lien priorities provided in this SECTION 2.1 in

respect of the Common Collateral on or in which the Creditors have a valid and

perfected Lien shall not be altered or otherwise affected by any Permitted

Modification of the Second Lien Documents or Permitted Modification of the First

Lien Documents or any Permitted Refinancing of the Second Lien Obligations or

Permitted Refinancing of the First Lien Obligations, or by any action that any

Creditor may take or fail to take in respect of Grantor or the Common Collateral

(other than failure to maintain the validity or perfection of their respective

Liens).

2.2 PROHIBITION ON CONTESTING LIENS. Each of the Second Lien

Agent, for itself and on behalf of each Second Lien Claimholder, and the First

Lien Agent, for itself and on behalf of each First Lien Claimholder, agrees that

it will not contest the validity, perfection, priority (as set forth in SECTION

2.1) or enforceability of the Liens of the other Creditor upon the assets of the

Debtor or the Guarantors that are Common Collateral and that as between First

Lien Claimholders and Second Lien Claimholders, the terms of this Agreement

shall govern the priority of their respective valid and perfected Liens on or in

the Common Collateral securing the First Lien Obligations or Second Lien

Obligations, respectively. For avoidance of doubt, the parties confirm that the

assertion in any proceeding or otherwise by one party (Party A) of invalidity or

nonperfection of the other party's (Party B's) security interest as a defense to

a claim or assertion by Party B against Party A for or alleging breach of this

Agreement arising out of Party A's exercise of rights or enforcement of remedies

<PAGE>

under this Agreement or any First Lien Documents or Second Lien Documents, as

applicable, shall not be deemed to be a "contest" for purposes of this SECTION

2.2. In the event that Second Lien Agent or any Second Lien Claimholder

believes, in good faith, that the Lien in favor of First Lien Agent in any

assets of Grantor is invalid or unperfected, prior to the commencement by Second

Lien Agent or any Second Lien Claimholder of any such exercise of rights or

enforcement of remedies which would violate this Agreement but for such

invalidity or nonperfection of First Lien Agent's Lien, the Second Lien Agent or

Second Lien Claimholder will furnish to the First Lien Agent not less than five

Business Days' prior written notice of the contemplated commencement of such

exercise or enforcement, which notice shall identify the basis for the belief by

the Second Lien Agent or Second Lien Claimholder, as the case may be, that such

invalidity or nonperfection exists.

2.3 SIMILAR LIENS AND AGREEMENTS. The parties hereto agree that it

is their intention that the First Lien Collateral constituting Common Collateral

and the Second Lien Collateral constituting Common Collateral be identical. In

furtherance of the foregoing, the parties hereto agree, subject to the other

provisions of this Agreement, upon request by the First Lien Agent or the Second

Lien Agent, to cooperate in good faith (and to direct their counsel to cooperate

in good faith) from time to time in order to determine the specific items

included in the First Lien Collateral and the Second Lien Collateral and the

steps taken to perfect their respective Liens thereon and the identity of the

respective parties obligated under the First Lien Documents and the Second Lien

Documents.

2.4 LIMITATIONS ON DUTIES AND OBLIGATIONS. Each of the Second Lien

Agent, for itself and on behalf of each Second Lien Claimholder, and the First

Lien Agent, for itself and on behalf of each First Lien Claimholder, agrees

that, except in the case of (i) the obligations of the First Lien Agent under

SECTION 5.5 as bailee and agent for perfection for the Second Lien Agent and

(ii) the obligations of the Second Lien Agent under SECTION 5.5 as bailee and

agent for perfection for the First Lien Agent, each of the First Lien Agent (on

behalf of the First Lien Claimholders) and the Second Lien Agent (on behalf of

the Second Lien Claimholders) shall be solely responsible for perfecting and

maintaining the perfection of its Lien in and to each item constituting the

Common Collateral in which the First Lien Agent (on behalf of the First Lien

Claimholders) or the Second Lien Agent (on behalf of the Second Lien

Claimholders) has been granted a Lien. The foregoing provisions of this

Agreement are intended solely to govern the respective Lien priorities as

between the Creditors and shall not impose on either the First Lien Agent (on

behalf of the First Lien Claimholders) or the Second Lien Agent (on behalf of

the Second Lien Claimholders) any obligations in respect of the disposition of

proceeds of foreclosure on any Common Collateral that would conflict with prior

perfected claims therein in favor of any other Person or any order or decree of

any court or other Governmental Authority or any applicable law.

Section 3 ENFORCEMENT.

3.1 EXERCISE OF REMEDIES.

<PAGE>

(a) So long as the Discharge of First Lien Obligations

has not occurred, whether or not any Insolvency Proceeding has been commenced by

or against Grantor:

(i) the Second Lien Agent and the Second Lien

Claimholders:

(x) will not take any Enforcement Action with

respect to any Common Collateral; PROVIDED,

HOWEVER, that the Second Lien Agent or the

other Second Lien Claimholders may take any

such Enforcement Action with respect to the

Common Collateral after the expiration of a

period of 180 days following the date on

which the Second Lien Agent shall have (1)

declared, and notified the First Lien Agent

of, the existence of any "Event of Default"

or event of default, under or as defined in

the Second Lien Financing Agreements, that

is a Major Event of Default, or (2)

accelerated any of the Second Lien

Obligations under the Second Lien Financing

Agreements (such 180 day period, the

"STANDSTILL PERIOD"); PROVIDED that, at the

time of such exercise, either any "Event of

Default" or event of default under or as

defined in the Second Lien Financing

Agreements that is a Major Event of Default

shall exist or any of the Second Lien

Obligations shall have been accelerated or

otherwise have become due and payable; and

PROVIDED, FURTHER, however, that

notwithstanding anything herein to the

contrary, in no event shall the Second Lien

Agent or any Second Lien Claimholder take

any Enforcement Action with respect to the

Common Collateral if, notwithstanding the

expiration of the Standstill Period, the

First Lien Agent or First Lien Claimholders

shall have commenced Enforcement Action with

respect to all or any material portion of

the Common Collateral (which Enforcement

Action of the First Lien Agent is other than

the exercise of set off or analogous

remedies in respect of cash and cash

equivalents or deposit or cash collateral

accounts) (prompt notice of any such

exercise to be given by the First Lien Agent

to the Second Lien Agent),

(y) will not contest or protest or object to any

foreclosure proceeding or action brought by

the First Lien Agent or any First Lien

Claimholder, or any other exercise by the

First Lien Agent or any First Lien

Claimholder of any rights and remedies, in

each case relating to the Common Collateral

(whether under the First Lien Documents or

otherwise) provided that such foreclosure or

exercise is in compliance with applicable

law and is not prohibited by SECTION 5.7, or

<PAGE>

(z) subject to their rights under clause (i)(x)

above, will not object to the forbearance by

the First Lien Agent or the First Lien

Claimholders from bringing or pursuing any

foreclosure proceeding or action or any

other exercise of any rights or remedies

relating to the Common Collateral,

in each case in clauses (x), (y) and (z)

above so long as the respective Liens of the

Second Lien Agent and the other Second Lien

Claimholders attach to the proceeds thereof

subject to the relative priorities described

in SECTION 2 hereof; and

(ii) notwithstanding anything to the contrary set forth in

the Second Lien Documents, but subject to SECTION

3.1(A)(I), SECTION 5.1(A), SECTION 5.7 and any other

express provision of this Agreement, and subject to

applicable law, the First Lien Agent and the First

Lien Claimholders shall have the exclusive right to

manage the Common Collateral and enforce rights,

exercise remedies (including set-off) and make

determinations regarding the sale, transfer or other

disposition of Common Collateral (whether by the

First Lien Agent, any agent of the First Lien Agent

or Grantor with the consent of the First Lien Agent)

or restrictions with respect to the Common

Collateral, without any consultation with or the

consent of the Second Lien Agent or any Second Lien

Claimholder; PROVIDED that (A) in any Insolvency

Proceeding commenced by or against Grantor, the

Second Lien Agent and each other Second Lien

Claimholder may file a claim or statement of interest

with respect to the Second Lien Obligations not

inconsistent with the terms and agreements set forth

in this Agreement, (B) the Second Lien Agent and each

other Second Lien Claimholder may take any action

(not adverse to the prior valid and perfected Liens

on the Common Collateral securing the First Lien

Obligations, or the rights of the First Lien Agent or

any First Lien Claimholders to exercise remedies in

respect thereof (except as otherwise provided in this

Agreement), and not inconsistent with the terms of

this Agreement) in order to preserve or protect its

Lien on the Common Collateral (including actions

permitted pursuant to SECTION 6.3), (C) the Second

Lien Agent and each other Second Lien Claimholder

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, avoidance, subordination or other

modification of the claims or Liens of the Second

Lien Agent or any other Second Lien Claimholders,

including without limitation any claims secured by

the Common Collateral, if any, in each case in a

manner not inconsistent with the other terms of this

Agreement, (D) the Second Lien Agent and each other

Second Lien Claimholder shall be entitled to file any

pleadings, objections, motions or agreements that

assert rights or interests available to unsecured

creditors of Grantor arising under either Bankruptcy

Law or applicable non-bankruptcy law, (E) the Second

Lien Agent and each other Second Lien Claimholder

shall be entitled to file any proof of claim and

<PAGE>

other filings and make any arguments and motions that

are, in each case, not inconsistent with the terms of

this Agreement, with respect to the Second Lien

Obligations and the Common Collateral and (F) the

Second Lien Agent or any Second Lien Claimholder may

exercise any of its rights or remedies with respect

to the Common Collateral after the termination of the

Standstill Period to the extent permitted by clause

(i)(x) above. In exercising rights and remedies with

respect to the Common Collateral, subject to the

provisions hereof, the First Lien Agent and the First

Lien Claimholders may enforce the provisions of the

First Lien 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, subject to the provisions hereof, the rights

of an agent appointed by them to sell or otherwise

dispose of Common Collateral in accordance with

applicable law 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.

The First Lien Agent shall comply with the provisions

of SECTION 5.7 in connection with its exercise and

enforcement of its rights or remedies with respect to

the Common Collateral.

(b) The Second Lien Agent, on behalf of itself and the

Second Lien Claimholders, agrees that prior to the expiration of the Standstill

Period, it will not take or receive any Common Collateral or any proceeds of

Common Collateral in connection with the exercise by it of any Enforcement

Action with respect to any Common Collateral, unless and until the Discharge of

First Lien Obligations has occurred, except as otherwise expressly provided in

the proviso in clause (ii) of SECTION 3.1(A), subject in any event to SECTION

4.2. Without limiting the generality of the foregoing, prior to the expiration

of the Standstill Period, unless and until the Discharge of First Lien

Obligations has occurred, and except as otherwise expressly provided in SECTION

2.2 and in the proviso in clause (ii) of SECTION 3.1(A) and any other express

provision of this Agreement, the sole right of the Second Lien Agent and the

Second Lien Claimholders with respect to the Common Collateral is to hold and

maintain perfection of a Lien on the Common 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

First Lien Obligations has occurred in accordance with the terms of the Second

Lien Documents and applicable law. The exercise of rights or enforcement of

remedies by the Second Lien Agent is subject, where applicable, to the last

sentence of SECTION 2.2.

of the Standstill Period and subject to SECTION 2.2 and the proviso in clause

(ii) of SECTION 3.1(A) and any other express provision of this Agreement, (i)

the Second Lien Agent, for itself and on behalf of the Second Lien Claimholders,

agrees that the Second Lien Agent and the Second Lien Claimholders will not take

any action that would hinder any exercise of remedies by the First Lien Agent or

the First Lien

<PAGE>

Claimholders in respect of the Common Collateral under the First Lien Documents

or that is otherwise prohibited hereunder, including any sale, lease, exchange,

transfer or other disposition of the Common Collateral prior to the expiration

of the Standstill Period, whether by foreclosure or otherwise, and (ii) the

Second Lien Agent, for itself and on behalf of the Second Lien Claimholders,

hereby waives any and all rights it or the Second Lien Claimholders may have as

a junior lien creditor to object to the manner in which the First Lien Agent or

the First Lien Claimholders seek to enforce or collect the First Lien

Obligations or the Liens granted in any of the First Lien Collateral (PROVIDED

that such enforcement or collection complies with applicable law and this

Agreement), regardless of whether any action or failure to act by or on behalf

of the First Lien Agent or First Lien Claimholders is adverse to the interest of

the Second Lien Claimholders.

(d) The Second Lien Agent hereby acknowledges and agrees

that no covenant, agreement or restriction contained in the Second Lien

Collateral Documents or any other Second Lien Document (other than this

Agreement) shall be deemed to restrict in any way the rights and remedies of the

First Lien Agent or the First Lien Claimholders with respect to the Common

Collateral as set forth in this Agreement and the First Lien Documents, subject,

however, to the provisions hereof and of applicable law.

Section 4 PAYMENTS.

4.1 APPLICATION OF PROCEEDS AND PAYMENTS. So long as the Discharge

of First Lien Obligations has not occurred, any Common Collateral or proceeds

thereof received by the First Lien Agent in connection with the sale or other

disposition of, or collection on, such Common Collateral upon the exercise of

remedies, shall be applied by the First Lien Agent to the First Lien Obligations

in such order, if any, as is specified in the relevant First Lien Documents,

PROVIDED HOWEVER that notwithstanding the foregoing, amounts received by the

First Lien Agent or any other First Lien Claimholder in respect of Obligations

outstanding under any First Lien Document shall be deemed for all purposes of

this Agreement, including determination of Discharge of First Lien Obligations,

to be applied first to payment and satisfaction of all outstanding First Lien

Obligations and thereafter to payment of Obligations thereunder, if any, not

constituting First Lien Obligations. Upon the Discharge of the First Lien

Obligations, the First Lien Agent shall deliver to the Second Lien Agent (except

as may otherwise be required by applicable law or any court order) any proceeds

of Common Collateral held by it 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 Agent to the Second Lien Obligations in such

order, if any, as is specified in the relevant Second Lien Collateral Documents.

4.2 PAYMENTS OVER. So long as the Discharge of First Lien

Obligations has not occurred, any Common Collateral or proceeds of sale or other

disposition thereof received by the Second Lien Agent or any Second Lien

Claimholders in connection with the exercise of any right or remedy (including

set-off) relating to the Common Collateral not otherwise permitted by this

Agreement, and any Common Collateral or proceeds of the sale or other

disposition thereof received by the Second Lien Agent or any Second Lien

<PAGE>

Claimholders solely as a result of an Enforcement Action taken by the Second

Lien Agent or any Second Lien Claimholders in respect of the Common Collateral,

shall be segregated and held in trust and forthwith paid over to the First Lien

Agent for the benefit of the First Lien Claimholders in the same form as

received, with any necessary endorsements, for immediate application to the

repayment of the First Lien Obligations, or as a court of competent jurisdiction

may otherwise direct. The First Lien Agent is hereby authorized to make any such

endorsements as agent for the Second Lien Agent or any such Second Lien

Claimholders. This authorization is coupled with an interest and is irrevocable

until such time as this Agreement is terminated in accordance with its terms.

Section 5 OTHER AGREEMENTS.

5.1 RELEASES.

(a) If, in connection with:

(i) any sale, exchange, transfer or other disposition of

ownership (collectively, a "DISPOSITION") of any

Common Collateral permitted under the terms of the

First Lien Documents as in effect on the date hereof

and not involving any exercise of remedies referred

to in clause (ii) below, or

(ii) the exercise of any of the First Lien Agent's

remedies in respect of the Common Collateral provided

for in SECTION 3.1 upon or following acceleration or

maturity of the First Lien Obligations and

non-payment thereof, including any Disposition of any

such Common Collateral pursuant to any such exercise

of remedies,

the First Lien Agent, for itself or on behalf of any of the First Lien

Claimholders, releases any of its Liens on any part of the Common Collateral,

and/or releases any Grantor from its obligations under its guaranty of the First

Lien Obligations the outstanding equity interests of which Grantor have been

disposed of in connection with a Disposition under clause (i) or (ii) above

(such Grantor, a "DISPOSED GRANTOR"), in each case above (x) other than in

connection with the Discharge of First Lien Obligations and (y) in the case of

clause (i) above, other than after the occurrence and during the continuance of

any Default, default, Event of Default or event of default under or as defined

in the Second Lien Financing Agreements, and upon the request of the Company

pursuant to an Officer's Certificate (as defined in the Indenture) certifying

that all conditions precedent under the Indenture have been met, then the Liens,

if any, of the Second Lien Agent, for itself or for the benefit of the Second

Lien Claimholders, on such Common Collateral, and, if applicable, the

obligations of such Disposed Grantor under its guaranty of the Second Lien

Obligations, shall be automatically, unconditionally and simultaneously released

and the Second Lien Agent, for itself or on behalf of any such Second Lien

Claimholders, promptly shall execute and deliver to the First Lien Agent or such

Grantor such termination statements, releases and other documents as the First

Lien Agent or such Grantor may request to effectively confirm such release;

PROVIDED that notwithstanding the foregoing, (x) in the case of a Disposition

under SECTION 5.1(A)(I), the Liens, if any, of the Second Lien Agent, for itself

<PAGE>

or for the benefit of the Second Lien Claimholders, on any Common Collateral

and, if applicable, the obligations of any Disposed Grantor under its guaranty

of the Second Lien Obligations, shall not be automatically released, and such

Disposition shall result in an Event of Default or event of default under or as

defined in the Second Lien Financing Agreements, if such Disposition is not then

expressly permitted under the terms of the Second Lien Financing Agreements and

(y ) in the case of a Disposition under SECTION 5.1(A)(I) or (II), the Liens, if

any, of the Second Lien Agent, for itself or for the benefit of the Second Lien

Claimholders, on all proceeds of any Common Collateral (including all amounts

and other property received upon such Disposition or exercise of remedies) shall

continue (subject to the priorities set forth in SECTION 2.1) and shall not be

automatically released.

(b) Until the Discharge of First Lien Obligations occurs,

the Second Lien Agent, for itself and on behalf of the Second Lien Claimholders,

hereby irrevocably constitutes and appoints the First Lien Agent and any officer

or agent of the First Lien Agent, with full power of substitution, as its true

and lawful attorney-in-fact (which appointment is coupled with an interest) with

full irrevocable power and authority in the place and stead of the Second Lien

Agent or such Second Lien Claimholder or in the First Lien Agent's own name,

from time to time in the First Lien Agent's discretion, for the purpose of

carrying out the terms of this SECTION 5.1, but subject to the limitations

contained herein, to take any and all appropriate action and to execute any and

all documents and instruments that may be necessary to accomplish the purposes

of this SECTION 5.1 in accordance herewith, including any endorsements or other

instruments of transfer or release.

to the extent that the First Lien Claimholders (i) have released any Lien on

Common Collateral or Grantor from its obligation under its guaranty and any such

Lien or guaranty is later reinstated or (ii) obtain any new first priority Liens

or additional guarantees from any Grantor, then the Second Lien Claimholders

shall be granted a second priority Lien on any such Common Collateral and an

equivalent additional guaranty, as the case may be

5.2 INSURANCE. Unless and until the Discharge of First Lien

Obligations has occurred, the First Lien Agent and the First Lien Claimholders

shall have the sole and exclusive right, subject to the rights of Grantor under

the First Lien Documents, to adjust settlement for any insurance policy covering

the Common 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 Common Collateral. Unless and until the Discharge of

First Lien Obligations has occurred, and subject to the rights of the Grantor

under the First Lien 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 of the Common Collateral, shall be paid to the First Lien Agent for the

benefit of the First Lien Claimholders pursuant to the terms of the First Lien

Documents, if, but only if, so required and thereafter, if the Discharge of

First Lien Obligations has occurred, or initially, if such proceeds are not so

required to be paid to the First Lien Agent for the benefit of the First Lien

Claimholders, and subject to the rights of the applicable Grantor under the

<PAGE>

Second Lien Collateral Documents, to the Second Lien Agent for the benefit of

the Second Lien Claimholders to the extent required under the Second Lien

Collateral Documents and then, to the extent no mandatory prepayment or

repayment of the Second Lien Obligations is then required, to the owner of the

subject property, or such other Person as may be entitled thereto or as a court

of competent jurisdiction may otherwise direct, PROVIDED that if such owner or

other Person is a Grantor, such proceeds or award (or any payments with respect

thereto) shall constitute Common Collateral to the extent constituting First

Lien Collateral in which the security interest of the First Lien Agent for the

benefit of the First Lien Claimholders pursuant to the terms of the First Lien

Documents is perfected and be pledged to the Second Lien Agent (which pledge

shall be fully perfected) pursuant to the terms of the Second Lien Collateral

Documents for the benefit of the Second Lien Noteholders. Until the Discharge of

First Lien Obligations has occurred, and if such proceeds or award or payment

are required to have been paid to the First Lien Agent pursuant to the

provisions of the First Lien Documents, if the Second Lien Agent or any 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 First Lien Agent in accordance with the terms of

SECTION 4.2.

5.3 CERTAIN PROVISIONS OF FIRST LIEN DOCUMENTS; AMENDMENTS TO

FIRST LIEN DOCUMENTS AND SECOND LIEN DOCUMENTS.

(a) The First Lien Documents shall not: (i) provide for

or permit the principal amount of loans and other extensions of credit

thereunder, including, without limitation, outstanding First Lien Principal

Obligations, to exceed $10,000,000 at any time or the outstanding Obligations

under the First Lien Documents exceed the Maximum First Lien Debt Amount, in

each case above without having previously obtained the Second Lien Claimholder

Consent) or (ii) provide for a scheduled final maturity date of the First Lien

Principal Obligations under the First Lien Financing Agreement or any

Refinancing thereof that is within one year before or after the scheduled final

maturity date of the Notes as in effect on the date hereof. The First Lien

Documents may be Modified in accordance with their terms, and the First Lien

Financing Agreement may be Refinanced, in each case, without the consent of the

Second Lien Agent or the Second Lien Claimholders, PROVIDED, HOWEVER, that in

the case of a Refinancing, such Refinancing is designated by the Company, by

notice to Second Lien Agent, as a Permitted Refinancing to which this Agreement

shall apply, and the holders of such Refinancing debt, if such Refinancing debt

is secured by a Lien on the Common Collateral, shall bind themselves in writing

to the terms of this Agreement, and PROVIDED FURTHER that the First Lien Credit

Documents and any such Modification or Refinancing shall not: (i) provide for or

permit the principal amount of loans and other extensions of credit thereunder,

including, without limitation, outstanding First Lien Principal Obligations, to

exceed $10,000,000 at any time or the outstanding Obligations under the First

Lien Documents exceed the Maximum First Lien Debt Amount without the Second Lien

Claimholder Consent) or (ii) extend the scheduled final maturity date of the

First Lien Principal Obligations under the First Lien Financing

<PAGE>

Agreement or any Refinancing thereof to a date within one year before or after

the scheduled final maturity date of the Notes as in effect on the date hereof .

As a condition to having the benefits of this Agreement, the holders of any such

Refinancing debt, if such Refinancing debt is secured by a Lien on the Common

Collateral, shall bind themselves in writing to the terms of this Agreement.

(b) The Second Lien Documents may be Modified in

accordance with their terms, and the Second Lien Financing Agreements may be

Refinanced, in each case, without the consent of the First Lien Agent or the

First Lien Lenders; PROVIDED, HOWEVER, that in the case of a Refinancing, such

Refinancing is designated by the Company, by notice to First Lien Agent, as a

Permitted Refinancing to which this Agreement shall apply, and the holders of

such Refinancing debt, if such Refinancing debt is secured by a Lien on the

Common Collateral, shall bind themselves in writing to the terms of this

Agreement, PROVIDED FURTHER, that any such Modification or Refinancing of the

Second Lien Documents shall not, without the consent of the First Lien Agent or

the First Lien Lenders, (i) provide for or permit the principal amount of loans

and other extensions of credit thereunder to be incurred pursuant to such

Modification or Refinancing or thereafter to exceed the amount permitted to be

incurred pursuant to the provisions of the First Lien Documents as then in

effect, (ii) amend covenants or events of default, along with related

definitions, to make them more restrictive than those contained from time to

time in the First Lien Financing Agreement, or (iii) shorten the scheduled final

maturity date of the Notes or any debt Refinancing the Notes to a date prior to

the stated maturity date of the Notes as in effect on the date hereof. As a

condition to having the benefits of this Agreement, the holders of any such

Refinancing debt, if such Refinancing debt is secured by a Lien on the Common

Collateral, shall bind themselves in writing to the terms of this Agreement.

5.4 RIGHTS AS UNSECURED CREDITORS, ETC.. The Second Lien

Obligations shall constitute senior indebtedness of each Grantor, PARI PASSU in

right of payment to all other senior indebtedness of such Grantor, including the

First Lien Obligations. Except as otherwise set forth in SECTION 3.1, the Second

Lien Agent and the Second Lien Claimholders may exercise rights and remedies as

creditors against Debtor or any other Grantor in accordance with the terms of

the Second Lien Documents and applicable law, PROVIDED that the Second Lien

Agent and the Second Lien Claimholders may not exercise any such rights or

remedies against the Common Collateral except as provided in SECTION 3.1, and

FURTHER PROVIDED that enforcement of any judgment lien by the Second Lien Agent

or the Second Lien Claimholders against the Common Collateral shall be subject

to the same limitations and restrictions as apply to an Enforcement Action under

SECTION 3.1(A) hereof. Except as otherwise set forth in SECTION 2.1 or SECTION

3.1, nothing in this Agreement shall prohibit or subordinate the receipt by the

Second Lien Agent or any Second Lien Claimholders of (or its right to receive)

the required payments of all Second Lien Obligations or subordinate the claims

of the Second Lien Agent and the Second Lien Claimholders in respect of property

of Grantor that is not Common Collateral.

5.5 BAILEE FOR PERFECTION, ETC.

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(a) First Lien Agent hereby agrees and acknowledges that,

to the extent that it holds, or a third party (as bailee, agent or otherwise)

holds on its behalf, physical possession of or "control" (as defined in the UCC)

over Common Collateral (including proceeds thereof) pursuant to any of the First

Lien Documents (the "FIRST LIEN PLEDGED COLLATERAL"), First Lien Agent (and

others holding on its behalf) holds such First Lien Pledged Collateral as bailee

and agent for perfection for the benefit of the Second Lien Agent and Second

Lien Claimholders and their successors and assigns (such holding for the benefit

of the Second Lien Agent and Second Lien Claimholders being intended, among

other things, to satisfy the requirements of Sections 8-301(a)(2) and 9-313(c)

of the UCC) and in each case solely to the extent required to perfect and

enforce the security interests of Second Lien Agent in such First Lien Pledged

Collateral.

(b) Second Lien Agent hereby agrees and acknowledges

that, to the extent that it holds, or a third party (as bailee, agent or

otherwise) holds on its behalf, physical possession of or "control" (as defined

in the UCC) over Common Collateral (including proceeds thereof) pursuant to any

of the Second Lien Documents (the "SECOND LIEN PLEDGED COLLATERAL") prior to the

Discharge of First Lien Obligations, Second Lien Agent (and others holding on

its behalf) holds such Second Lien Pledged Collateral as bailee and agent for

perfection for the benefit of the First Lien Agent and First Lien Claimholders

and their successors and assigns (such holding for the benefit of the First Lien

Agent and First Lien Claimholders being intended, among other things, to satisfy

the requirements of Sections 8-301(a)(2) and 9-313(c) of the UCC) and in each

case solely to the extent required to perfect and enforce the security interests

of First Lien Agent in such Second Lien Pledged Collateral.

law, until the Discharge of First Lien Obligations has occurred, the First Lien

Agent shall be entitled to deal with the First Lien Pledged Collateral in

accordance with the terms of the First Lien Documents as if the Liens of the

Second Lien Agent under the Second Lien Collateral Documents did not exist. The

rights of the Second Lien Agent in the Common Collateral shall at all times

prior to the Discharge of First Lien Obligations be subject to the terms of this

Agreement.

(d) The First Lien Agent shall have no obligation

whatsoever to the Second Lien Agent or any Second Lien Claimholder to ensure

that the First Lien Pledged Collateral is genuine or owned by Grantor. The

duties or responsibilities of the First Lien Agent under this SECTION 5.5 shall

be limited solely to holding the First Lien Pledged Collateral as bailee and

agent for perfection for the benefit of the Second Lien Agent and Second Lien

Claimholders and their successors and assigns, which duty and responsibility the

First Lien Agent shall fulfill using the same degree of care with respect

thereto as it uses for similar property pledged to it as collateral for

indebtedness of others to the First Lien Agent, and the First Lien Agent shall

have no liability in connection therewith except for its negligence or willful

misconduct as determined pursuant to a final non-appealable order of a court of

competent jurisdiction.

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(e) The Second Lien Agent shall have no obligation

whatsoever to the First Lien Agent or any First Lien Claimholder to ensure that

the Second Lien Pledged Collateral is genuine or owned by Grantor. The duties or

responsibilities of the Second Lien Agent under this SECTION 5.5 shall be

limited solely to holding the Second Lien Pledged Collateral as bailee and agent

for perfection for the benefit of the First Lien Agent and First Lien

Claimholders and their successors and assigns, which duty and responsibility the

Second Lien Agent shall fulfill using the same degree of care with respect

thereto as it uses for similar property pledged to it as collateral for

indebtedness of others to the Second Lien Agent, and the Second Lien Agent shall

have no liability in connection therewith except for its negligence or willful

misconduct as determined pursuant to a final non-appealable order of a court of

competent jurisdiction.

(f) The First Lien Agent acting pursuant to this SECTION

5.5 shall not have by reason of the First Lien Documents, the Second Lien

Collateral Documents, this Agreement or any other related document a fiduciary

relationship in respect of the Second Lien Agent or any Second Lien Claimholder.

(g) The Second Lien Agent acting pursuant to this SECTION

5.5 shall not have by reason of the First Lien Documents, the Second Lien

Collateral Documents, this Agreement or any other related document a fiduciary

relationship in respect of the First Lien Agent or any First Lien Claimholder.

(h) First Lien Agent and the other First Lien

Claimholders (and any third Person acting on its or their behalf, as agent,

bailee or otherwise) shall not have any duty to the Second Lien Agent or the

other Second Lien Claimholders with respect to the First Lien Pledged Collateral

or to provide the Second Lien Claimholders with any rights with respect to such

First Lien Pledged Collateral EXCEPT (1) as specified in this Agreement and (2)

promptly upon the Discharge of First Lien Obligations, subject to SECTIONS 2.2

and 2.4 hereof, and at the expense of Grantor, First Lien Agent and each other

First Lien Claimholder shall (and shall cause each Person acting on behalf of

any of the foregoing, as agent, bailee or otherwise, to) deliver all First Lien

Pledged Collateral (if any), together with any necessary endorsements and other

documents (including any applicable stock powers or bond powers), then in its

possession or in the possession of its agent or bailee, or turn over control as

to any First Lien Pledged Collateral for which it or its agent or bailee then

has control, as the case may be, to Second Lien Agent, except to the extent that

(i) First Lien Agent or any other First Lien Claimholder has retained or

otherwise acquired such First Lien Pledged Collateral in satisfaction of all or

any part of the First Lien Obligations, (ii) such First Lien Pledged Collateral

has been sold or otherwise disposed of by First Lien Agent or First Lien

Claimholders in accordance with this Agreement or by Grantor in accordance with

this Agreement and the Second Lien Documents or (iii) it may otherwise be

required by applicable law or any order of any court or other Governmental

Authority. First Lien Agent and, where applicable, the First Lien Claimholders

shall cause each Person acting on behalf of any of the foregoing, as agent,

bailee or otherwise, to comply with the provisions of this Agreement in respect

of Common Collateral in its possession or control. Subject to and upon

compliance by the First Lien Agent and First Lien Claimholders (and each such

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Person acting on behalf of any of the foregoing) with the duties and obligations

contemplated by this SECTION 5.5 and the other provisions of this Agreement,

effective upon such delivery of all such possession and control of such First

Lien Pledged Collateral, First Lien Agent and First Lien Claimholders shall be

automatically released from all claims and liabilities arising pursuant to the

role of First Lien Agent as bailee and agent for perfection with respect to the

First Lien Pledged Collateral. Each Grantor acknowledges and agrees to the

delivery by First Lien Agent and each other First Lien Claimholder (and each

such Person acting on behalf of any of the foregoing) to Second Lien Agent of

any such First Lien Pledged Collateral and waives and releases First Lien Agent

and the other First Lien Claimholders (and each such Person acting on behalf of

any of the foregoing) from any liability as a result of such action.

(i) Second Lien Agent and the other Second Lien

Claimhold