INTERCREDITOR AGREEMENT

Exhibit 10.7

INTERCREDITOR AGREEMENT

dated as of December 15, 2004

among

INTERDENT SERVICE CORPORATION,

the Guarantors from time to time party hereto,

WELLS FARGO FOOTHILL, INC.,
as Credit Agreement Agent under the Credit Agreement and
Priority Lien Collateral Agent hereunder,

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee under the Indenture and as Collateral Agent hereunder

TABLE OF CONTENTS

i

EXHIBIT A—Form of Intercreditor Agreement Joinder

ii

INTERCREDITOR AGREEMENT

        This Intercreditor Agreement, dated as of December 15, 2004 (this " Agreement " ), is entered into by and among InterDent Service Corporation, a Washington corporation ( " Borrower " ), the Guarantors (as defined below) from time to time party hereto, Wells Fargo Foothill, Inc., a California corporation, as Credit Agreement Agent (as defined below) and as Priority Lien Collateral Agent (in such capacity and together with its successors in such capacity, "Priority Lien Collateral Agent" ), and Wells Fargo Bank, National Association, a national banking association, as Trustee (as defined below) and as collateral agent for the holder of the Notes (as defined below) (in such capacity and together with its successors in such capacity, " Collateral Agent " ).

RECITALS

        Borrower intends to enter into an Amended and Restated Loan and Security Agreement, dated as of the date hereof (as amended, supplemented, amended and restated or otherwise modified and in effect from time to time, the " Credit Agreement " ), among Borrower, InterDent, Inc., a Delaware corporation (" Parent "), the lenders party thereto and Wells Fargo Foothill, Inc., as Credit Agreement Agent (in such capacity and together with its successors, " Credit Agreement Agent " ).

        Borrower and the Guarantors have also entered into the Priority Lien Security Documents pursuant to which Priority Lien Collateral Agent has been granted a first priority security interest in the Collateral.

        IDI Acquisition Corp. has issued $80,000,000 aggregate principal amount of 10 ³ / 4 % Senior Secured Notes (including any related exchange notes, the " Notes " ) pursuant to an Indenture, dated as of the date hereof (as amended, supplemented, amended and restated or otherwise modified and in effect from time to time, the " Indenture " ), among IDI Acquisition Corp., Borrower, Parent and Wells Fargo Bank, National Association, a national banking association, as trustee (in such capacity and together with its successors in such capacity, the " Trustee " ).

        Substantially concurrent with the issuance of the Notes, pursuant to an Agreement and Plan of Merger, dated as of the date hereof, IDI Acquisition Corp. has merged with and into Borrower and Borrower has assumed the Notes and succeeded to all of the rights, obligations and restrictions of the Indenture.

        Substantially concurrent with the issuance of the Notes and the consummation of the Merger, Borrower, IDI Acquisition Corp. and Parent, as the initial Guarantor, have entered into the Security Documents pursuant to which Collateral Agent has been granted a second priority security interest in the Collateral, which security interest is subordinate to the security interest of Priority Lien Collateral Agent.

        Borrower and the Guarantors have secured the Obligations under the Credit Agreement and intend to secure any future Priority Lien Debt on a priority basis and, subject to such priority, intend to secure the Obligations under the Indenture and any future Parity Lien Debt, with Liens on all present and future Collateral to the extent that such Liens have been provided for in the applicable Security Documents, and desire to enter into this Agreement to confirm their relative rights with respect to the Collateral as provided in this Agreement.

        Capitalized terms used in this Agreement have the meanings assigned to them above or in Article 1 below.

AGREEMENT

        In consideration of the premises and the mutual agreements herein set forth, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement agree as follows:

ARTICLE 1.    DEFINITIONS; PRINCIPLES OF CONSTRUCTION

        SECTION 1.1     Defined Terms .    The following terms will have the following meanings:

         " Act of Required Debtholders " means, as to any matter at any time:

•         (1)   prior to the Discharge of Priority Lien Obligations, a direction in writing delivered to Priority Lien Collateral Agent by or with the written consent of the holders of more than 50% of the sum of:

  •         (a)   the aggregate outstanding principal amount of Priority Lien Debt (including outstanding letters of credit whether or not then available or drawn); and

            (b)   other than in connection with the exercise of remedies, the aggregate unfunded commitments to extend credit which, when funded, would constitute Priority Lien Debt; and

          (2)   at any time after the Discharge of Priority Lien Obligations, a direction in writing delivered to Collateral Agent by or with the written consent of the holders of Parity Lien Debt representing the Required Parity Lien Debtholders.

For purposes of this definition, (a) Secured Debt registered in the name of, or beneficially owned by, Borrower or any Affiliate of Borrower will be deemed not to be outstanding and (b) votes will be determined in accordance with Section 6.2.

         " Additional Secured Debt " has the meaning set forth in Section 4.3.

         " Affiliate " of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control," as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; provided , that beneficial ownership of 10% or more of the Voting Stock of a Person will be deemed to be control. For purposes of this definition, the terms "controlling," "controlled by" and "under common control with" have correlative meanings.

         " Agreement " has the meaning set forth in the preamble.

         " Attributable Debt " in respect of a sale and leaseback transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction including any period for which such lease has been extended or may, at the option of the lessor, be extended. Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP; provided, however , that if such sale and leaseback transaction results in a Capital Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of "Capital Lease Obligation" under the Indenture.

         " Board of Directors " means (a) with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board, (b) with respect to a partnership, the Board of Directors of the general partner of the partnership, (c) with respect to a limited liability company, the managing member or members or any controlling committee of managing members thereof and (d) with respect to any other Person, the board or committee of such Person serving a similar function.

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         " Borrower " has the meaning set forth in the preamble.

         " Business Day " means any day other than a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed.

         " Capital Stock " means:

•         (1)   in the case of a corporation, corporate stock;

          (2)   in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

          (3)   in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and

          (4)   any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person,

but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.

         " Class " means (1) in the case of Parity Lien Debt, every Series of Parity Lien Debt, taken together, and (2) in the case of Priority Lien Debt, every Series of Priority Lien Debt, taken together.

         " Collateral " means all properties and assets of Borrower and the Guarantors now owned or hereafter acquired with respect to which a Priority Lien is granted as security for any Priority Lien Obligations or a Parity Lien is granted as security for any Parity Lien Obligations.

         " Collateral Agent " means Wells Fargo Bank, National Association, in its capacity as Collateral Agent under the Security Documents, together with its successors in such capacity.

         " Credit Agreement " has the meaning set forth in the recitals.

         " Credit Agreement Agent " has the meaning set forth in the recitals.

         " Credit Facilities " means one or more debt facilities or commercial paper facilities (including, without limitation, the Credit Agreement), in each case with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time.

         " Discharge of Priority Lien Obligations " means the occurrence of all of the following:

•         (1)   termination or expiration of all commitments to extend credit that would constitute Priority Lien Debt;

          (2)   payment in full in cash of the principal of and interest and premium (if any) on all Priority Lien Debt (other than any undrawn letters of credit);

          (3)   discharge or cash collateralization (at the lower of (A) 105% of the aggregate undrawn amount and (B) the percentage of the aggregate undrawn amount required for release of liens under the terms of the applicable Priority Lien Document) of all outstanding letters of credit constituting Priority Lien Debt; and

          (4)   payment in full in cash of all other Priority Lien Obligations that are outstanding and unpaid at the time the Priority Lien Debt is paid in full in cash (other than any obligations for

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• taxes, costs, indemnifications, reimbursements, damages and other liabilities in respect of which no claim or demand for payment has been made at such time).

         " equally and ratably " means, in reference to sharing of Liens or proceeds thereof as between holders of Secured Obligations within the same Class, that such Liens or proceeds:

•         (1)   will be allocated and distributed first to the Secured Debt Representative for each outstanding Series of Secured Debt within that Class, for the account of the holders of such Series of Secured Debt, ratably in proportion to the principal of, and interest and premium (if any) and reimbursement obligations (contingent or otherwise) with respect to letters of credit, if any, outstanding (whether or not drawings have been made under such letters of credit) on each outstanding Series of Secured Debt within that Class when the allocation or distribution is made, and thereafter

          (2)   will be allocated and distributed (if any remain after payment in full of all of the principal of, and interest and premium (if any) and reimbursement obligations (contingent or otherwise) with respect to letters of credit, if any, outstanding (whether or not drawings have been made on such letters of credit) on all outstanding Secured Obligations within that Class) to the Secured Debt Representative for each outstanding Series of Secured Obligations within that Class, for the account of the holders of any remaining Secured Obligations within that Class, ratably in proportion to the aggregate unpaid amount of such remaining Secured Obligations within that Class due and demanded (with written notice to the applicable Secured Debt Representative, Priority Lien Collateral Agent and Collateral Agent) prior to the date such distribution is made.

         " GAAP " means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect from time to time.

         " Guarantee " means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take or pay or to maintain financial statement conditions or otherwise).

         " Guarantors " means each of:

•         (1)   Parent; and

          (2)   any Subsidiary of the Company that executes a Guarantee in accordance with the provisions of the Indenture and the Credit Agreement,

and their respective successors and permitted assigns, in each case, until the Guarantee of such Person has been released in accordance with the provisions of the Indenture and the Credit Agreement.

         " 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

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• 
  

          (3)   other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates or commodity prices.

         " Indebtedness " means, with respect to any specified Person, any indebtedness of such Person (excluding accrued expenses and trade payables), whether or not contingent:

•         (1)   in respect of borrowed money;

          (2)   evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);

          (3)   in respect of banker's acceptances;

          (4)   representing Capital Lease Obligations or Attributable Debt in respect of sale and leaseback transactions;

          (5)   representing the balance deferred and unpaid of the purchase price of any property or services due more than six months after such property is acquired or such services are completed; or

          (6)   representing any Hedging Obligations,

if and to the extent any of the preceding items (other than letters of credit, Attributable Debt and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term "Indebtedness" includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person.

         " Indenture " has the meaning set forth in the recitals.

         " Insolvency or Liquidation Proceeding " means:

•         (1)   any case commenced by or against Borrower or any Guarantor under Title 11, U.S. Code or any similar federal or state law for the relief of debtors, any other proceeding for the reorganization, recapitalization or adjustment or marshalling of the assets or liabilities of Borrower or any Guarantor, any receivership or assignment for the benefit of creditors relating to Borrower or any Guarantor or any similar case or proceeding relative to Borrower or any Guarantor or its creditors, as such, in each case whether or not voluntary;

          (2)   any liquidation, dissolution, marshalling of assets or liabilities or other winding up of or relating to Borrower or any Guarantor, in each case whether or not voluntary and whether or not involving bankruptcy or insolvency; or

          (3)   any other proceeding of any type or nature in which substantially all claims of creditors of Borrower or any Guarantor are determined and any payment or distribution is or may be made on account of such claims.

         " Intercreditor Agreement Joinder " means an agreement substantially in the form of Exhibit A .

         " Lien " means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

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         " Lien Sharing and Priority Confirmation " means:

•         (1)   as to any Series of Parity Lien Debt, the written agreement of the holders of such Series of Parity Lien Debt, as set forth in the indenture, credit agreement or other agreement governing such Series of Parity Lien Debt, for the enforceable benefit of all holders of each existing and future Series of Priority Lien Debt, each existing and future Priority Lien Representative and each existing and future holder of Permitted Prior Liens:

  •         (a)   that all Parity Lien Obligations will be and are secured equally and ratably by all Parity Liens at any time granted by Borrower or any Guarantor to secure any Obligations in respect of such Series of Parity Lien Debt, whether or not upon property otherwise constituting collateral for such Series of Parity Lien Debt, and that all such Parity Liens will be enforceable by Collateral Agent for the benefit of all holders of Parity Lien Obligations equally and ratably;

            (b)   that the holders of Obligations in respect of such Series of Parity Lien Debt are bound by the provisions of this Agreement, including the provisions relating to the ranking of Parity Liens and the order of application of proceeds from the enforcement of Parity Liens; and

            (c)   consenting to and directing Collateral Agent to perform its obligations under this Agreement and the other Security Documents; and

          (2)   as to any Series of Priority Lien Debt, the written agreement of the holders of such Series of Priority Lien Debt, as set forth in the credit agreement or other agreement governing such Series of Priority Lien Debt, for the enforceable benefit of all holders of each existing and future Series of Parity Lien Debt, Collateral Agent and each existing and future holder of Permitted Prior Liens:

  •         (a)   that all Priority Lien Obligations will be and are secured equally and ratably by all Priority Liens at any time granted by Borrower or any Guarantor to secure any Obligations in respect of such Series of Priority Lien Debt, whether or not upon property otherwise constituting collateral for such Series of Priority Lien Debt, and that all such Priority Liens will be enforceable by Priority Lien Collateral Agent for the benefit of all holders of Priority Lien Obligations equally and ratably;

            (b)   that the holders of Obligations in respect of such Series of Priority Lien Debt are bound by the provisions of this Agreement, including the provisions relating to the ranking of Priority Liens and the order of application of proceeds from enforcement of Priority Liens; and

            (c)   consenting to and directing Priority Lien Collateral Agent to perform its obligations under this Agreement and the other Priority Lien Security Documents.

         " Moody's " means Moody's Investors Service, Inc., and its successors and assigns.

         " Notes " has the meaning set forth in the recitals.

         " Note Documents " means the Indenture, the Notes and the Security Documents, in each case as amended, supplemented or otherwise modified from time to time.

         " Obligations " means any principal (including reimbursement obligations with respect to letters of credit whether or not drawn), interest (including, to the extent legally permitted, all interest accrued thereon after the commencement of any Insolvency or Liquidation Proceeding at the rate, including any applicable post-default rate, specified in the Priority Lien Documents, even if such interest is not enforceable, allowable or allowed as a claim in such proceeding), premium (if any), fees,

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indemnifications, reimbursements, expenses and other liabilities payable under the documentation governing any Indebtedness.

         " Officers' Certificate " means a certificate with respect to compliance with a condition or covenant provided for in this Agreement, signed on behalf of Borrower by two officers of Borrower, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of Borrower, including:

• •         (a)   a statement that the Person making such certificate has read such covenant or condition;

            (b)   a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate are based;

            (c)   a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been satisfied; and

            (d)   a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied.

         " Parent " means InterDent, Inc., a Delaware corporation, and its successors and permitted assigns.

         " Parity Lien " means a Lien granted by a Security Document to Collateral Agent, at any time, upon any property of Borrower or any Guarantor to secure Parity Lien Obligations.

         " Parity Lien Debt " means:

•         (1)   the Notes issued on the date hereof (including any related exchange notes); and

          (2)   any other Indebtedness of the Company pursuant to additional Notes under the Indenture.

         " Parity Lien Obligations " means Parity Lien Debt and all other Obligations in respect thereof.

         " Permitted Prior Liens " means:

•         (1)   Liens described in clause (1) of the definition of "Permitted Liens" under the Indenture;

          (2)   Liens described in clauses (4), (5), (7), (8), (15), (16) or (17) of the definition of "Permitted Liens" under the Indenture;

          (3)   Liens described in clause (20) of the definition of "Permitted Liens" to the extent constituting purchase money liens that secured Permitted Debt; and

          (4)   Permitted Liens (as defined in the Indenture) that arise by operation of law and are not voluntarily granted, to the extent entitled by law to priority over the Liens created by the Priority Lien Security Documents or the Security Documents.

        " Person " means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.

         " Priority Lien " means a Lien granted by a Priority Lien Security Document to Priority Lien Collateral Agent, at any time, upon any property of Borrower or any Guarantor to secure Priority Lien Obligations.

         " Priority Lien Collateral Agent " means Wells Fargo Foothill, Inc., in its capacity as Priority Lien Collateral Agent under the Priority Lien Security Documents, together with its successors in such capacity.

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         " Priority Lien Debt " means:

•         (1)   Indebtedness under the Credit Agreement that was permitted to be incurred and secured under each applicable Secured Debt Document (or as to which the lenders under the Credit Agreement obtained an Officers' Certificate at the time of incurrence to the effect that such Indebtedness was permitted to be incurred and secured by all applicable Secured Debt Documents);

          (2)   Indebtedness under any other Credit Facility that is secured equally and ratably with the Credit Agreement by a Priority Lien that was permitted to be incurred and so secured under each applicable Secured Debt Document; provided , in the case of any Indebtedness referred to in this clause (2), that:

  •         (a)   on or before the date on which such Indebtedness is incurred by Borrower such Indebtedness is designated by Borrower, in an Officers' Certificate delivered to each Priority Lien Representative, Priority Lien Collateral Agent and Collateral Agent, as "Priority Lien Debt" for the purposes of the Secured Debt Documents; provided , that no Series of Secured Debt may be designated as both Parity Lien Debt and Priority Lien Debt;

            (b)   such Indebtedness is governed by a credit agreement or other agreement that includes a Lien Sharing and Priority Confirmation; and

            (c)   all requirements set forth in this Agreement as to the confirmation, grant or perfection of Priority Lien Collateral Agent's Lien to secure such Indebtedness or Obligations in respect thereof are satisfied (and the satisfaction of such requirements and the other provisions of this clause (c) will be conclusively established if Borrower delivers to Priority Lien Collateral Agent and Collateral Agent an Officers' Certificate stating that such requirements and other provisions have been satisfied and that such Indebtedness is "Priority Lien Debt"); and

          (3)   Hedging Obligations incurred to hedge or manage interest rate risk with respect to Priority Lien Debt; provided , that:

  •         (a)   such Hedging Obligations are secured by a Priority Lien on all of the assets and properties that secure Indebtedness under the Credit Facility in respect of which such Hedging Obligations are incurred; and

            (b)   such Priority Lien is senior to or on a parity with the Priority Liens securing Indebtedness under the Credit Facility in respect of which such Hedging Obligations are incurred.

         " Priority Lien Documents " means the Credit Agreement and any other Credit Facility pursuant to which any Priority Lien Debt is incurred and the Priority Lien Security Documents.

         " Priority Lien Obligations " means the Priority Lien Debt and all other Obligations in respect of Priority Lien Debt.

         " Priority Lien Representative " means:

• •         (a)   Credit Agreement Agent; or

            (b)   in the case of any other Series of Priority Lien Debt, the trustee, agent or representative of the holders of such Series of Priority Lien Debt who maintains the transfer register for such Series of Priority Lien Debt and is appointed as a representative of the Priority Lien Debt (for purposes related to the administration of the Priority Lien Security Documents) pursuant to the credit agreement or other agreement governing such Series of Priority Lien Debt, and who has executed an Intercreditor Agreement Joinder.

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         "Priority Lien Security Documents" means this Agreement, each Lien Sharing and Priority Confirmation, the Credit Agreement, and all security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust, collateral agency agreements, control agreements or other grants or transfers for security executed and delivered by Borrower or any Guarantor creating (or purporting to create) a Priority Lien upon Collateral in favor of Priority Lien Collateral Agent, in each case, as amended, modified, renewed, restated or replaced, in whole or in part, from time to time, in accordance with its terms.

         " Required Parity Lien Debtholders " means, at any time, the holders of a majority in aggregate principal amount of all Parity Lien Debt then outstanding, calculated in accordance with the provisions of Section 6.2. For purposes of this definition, Parity Lien Debt registered in the name of, or beneficially owned by, Borrower or any Affiliate of Borrower will be deemed not to be outstanding.

         "Required Priority Lien Debtholders" means, at any time, the holders of a majority of the sum of:

• •         (a)   the aggregate outstanding principal amount of Priority Lien Debt (including outstanding letters of credit whether or not then available or drawn); and

            (b)   other than in connection with the exercise of remedies, the aggregate unfunded commitments to extend credit which, when funded, would constitute Priority Lien Debt.

        For purposes of this definition, (a) Priority Lien Debt registered in the name of, or beneficially owned by, Borrower or any Affiliate of Borrower will be deemed not to be outstanding, and (b) votes will be determined in accordance with Section 6.2.

         " Restricted Subsidiary " has the meaning set forth in the Indenture.

         " S&P " means Standard & Poor's Ratings Group and its successors and assigns.

         " Secured Debt " means Parity Lien Debt and Priority Lien Debt.

         " Secured Debt Default " means any event or condition which, under the terms of any credit agreement, indenture or other agreement governing any Series of Secured Debt causes, or permits holders of Secured Debt outstanding thereunder (with or without the giving of notice or lapse of time, or both, and whether or not notice has been given or time has lapsed) to cause, the Secured Debt outstanding thereunder to become immediately due and payable.

         " Secured Debt Documents " means the Parity Lien Documents and the Priority Lien Documents.

         " Secured Debt Representative " means Collateral Agent and each Priority Lien Representative.

         " Secured Obligations " means Parity Lien Obligations and Priority Lien Obligations.

         " Secured Parties " means the holders of Secured Obligations and the Secured Debt Representatives.

         " Security Documents " means this Agreement, each Lien Sharing and Priority Confirmation, and all security agreements, pledge agreements, collateral assignments, mortgages, collateral agency agreements, control agreements, deeds of trust or other grants or transfers for security executed and delivered by Borrower or any Guarantor creating (or purporting to create) a Parity Lien upon Collateral in favor of Collateral Agent, in each case, as amended, modified, renewed, restated or replaced, in whole or in part, from time to time, in accordance with its terms and Section 3.9.

         " Series of Parity Lien Debt " means, severally, the Notes, and each other issue or series of Parity Lien Debt for which a single transfer register is maintained.

         " Series of Priority Lien Debt " means, severally, Indebtedness outstanding under the Credit Agreement and each other issue or series of Priority Lien Debt for which a single transfer register is maintained.

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         " Series of Secured Debt " means, severally, each Series of Priority Lien Debt and each Series of Parity Lien Debt.

         " Subsidiary " means, with respect to any specified Person:

•         (1)   any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders' agreement that effectively transfers voting power) to vote in the election of directors, managers or trustees of the corporation, association or other business entity 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); and

          (2)   any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof).

         " Trustee " has the meaning set forth in the recitals.

         " UCC " means the Uniform Commercial Code as in effect in the State of New York or any other applicable jurisdiction.

         " Unrestricted Subsidiary " has the meaning set forth in the Indenture.

         " Voting Stock " of any specified Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

        SECTION 1.2     Rules of Interpretation .

        (a)   All terms used in this Agreement that are defined in Article 9 of the UCC and not otherwise defined herein have the meanings assigned to them in Article 9 of the UCC.

        (b)   Unless otherwise indicated, any reference to any agreement or instrument will be deemed to include a reference to that agreement or instrument as assigned, amended, supplemented, amended and restated, or otherwise modified and in effect from time to time or replaced in accordance with the terms of this Agreement.

        (c)   The use in this Agreement or any of the other Security Documents or Priority Lien Security Documents of the word "include" or "including," when following any general statement, term or matter, will not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not nonlimiting language (such as "without limitation" or "but not limited to" or words of similar import) is used with reference thereto, but will be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter. The word "will" shall be construed to have the same meaning and effect as the word "shall."

        (d)   References to "Sections," "clauses," "recitals" and the "preamble" will be to Sections, clauses, recitals and the preamble, respectively, of this Agreement unless otherwise specifically provided. References to "Articles" will be to Articles of this Agreement unless otherwise specifically provided. References to "Exhibits" and "Schedules" will be to Exhibits and Schedules, respectively, to this Agreement unless otherwise specifically provided.

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        (e)   Notwithstanding anything to the contrary in this Agreement, any references contained herein to any section, clause, paragraph, definition or other provision of the Indenture (including any definition contained therein) shall be deemed to be a reference to such section, clause, paragraph, definition or other provision as in effect on the date of this Agreement; provided , that any reference to any such section, clause, paragraph or other provision shall refer to such section, clause, paragraph or other provision of the Indenture (including any definition contained therein) as amended or modified from time to time if such amendment or modification has been (1) made in accordance with the Indenture and (2) prior to the Discharge of Priority Lien Obligations, approved in a writing delivered to the Trustee, Priority Lien Collateral Agent and Collateral Agent by, or on behalf of, the requisite holders of Priority Lien Obligations as are needed (if any) under the terms of the applicable Priority Lien Documents to approve such amendment or modification.

        (f)    This Agreement, the Security Documents and the Priority Lien Security Documents will be construed without regard to the identity of the party who drafted it and as though the parties participated equally in drafting it. Consequently, each of the parties acknowledges and agrees that any rule of construction that a document is to be construed against the drafting party will not be applicable to this Agreement or the other Security Documents or Priority Lien Security Documents.

ARTICLE 2.    REPRESENTATIONS AND WARRANTIES

        SECTION 2.1     Representations and Warranties of Priority Lien Collateral Agent .

        Priority Lien Collateral Agent represents, warrants, acknowledges and agrees on behalf of itself and the holders of Priority Lien Obligations that (1) it is authorized to enter into this Agreement on behalf of itself and such holders, (2) it has the corporate power and authority and the legal right to execute and deliver and perform its obligations under this Agreement and has taken all necessary corporate action to authorize its execution, delivery and performance of this Agreement and (3) this Agreement constitutes a valid and legally binding obligation of Priority Lien Collateral Agent, enforceable against Priority Lien Collateral Agent in accordance with its terms.

        SECTION 2.2     Representations and Warranties of Collateral Agent .

        Collateral Agent represents, warrants, acknowledges and agrees on behalf of itself and the holders of Parity Lien Obligations that (1) it is authorized to enter into this Agreement on behalf of itself and such holders, (2) it has the corporate power and authority and the legal right to execute and deliver and perform its obligations under this Agreement and has taken all necessary corporate action to authorize its execution, delivery and performance of this Agreement and (3) this Agreement constitutes a valid and legally binding obligation of Collateral Agent, enforceable against Collateral Agent in accordance with its terms.

ARTICLE 3.    SEPARATE LIENS

        SECTION 3.1     Priority of Liens .    Notwithstanding anything else contained herein or in any of the other Security Documents or Priority Lien Security Documents and notwithsta