INTERCREDITOR AGREEMENT

Exhibit 10.3

INTERCREDITOR AGREEMENT

among

AMERICAN PACIFIC CORPORATION,
as the Company,

THE DOMESTIC SUBSIDIARIES OF THE COMPANY
FROM TIME TO TIME PARTY HERETO,
as Guarantors,

WACHOVIA BANK, NATIONAL ASSOCIATION,
as the First Lien Administrative Agent,

WACHOVIA BANK, NATIONAL ASSOCIATION,
as the Second Lien Administrative Agent

and

WACHOVIA BANK, NATIONAL ASSOCIATION,
as the Control Agent

Dated as of November 30, 2005

TABLE OF CONTENTS

INTERCREDITOR AGREEMENT

     This Intercreditor Agreement, is dated as of November 30, 2005, and entered into by and among AMERICAN PACIFIC CORPORATION, a Delaware corporation (the “ Company ”), the domestic subsidiaries of the Company as may time to time party become a party hereto (the “ Guarantors ”) and WACHOVIA BANK, NATIONAL ASSOCIATION, in its capacity as administrative agent for the First Lien Obligations (as defined below), including its successors and assigns from time to time (the “ First Lien Administrative Agent ”), WACHOVIA BANK, NATIONAL ASSOCIATION, in its capacity as administrative agent for the Second Lien Obligations under the Second Lien Credit Agreement (as defined below), including its successors and assigns from time to time (the “ Second Lien Administrative Agent ”) and WACHOVIA BANK, NATIONAL ASSOCIATION, in its capacity as control agent for the First Lien Administrative Agent and the Second Lien Administrative Agent, including its successor and assigns from time to time (the “ Control Agent ”). Capitalized terms used herein but not otherwise defined herein have the meanings set forth in Section 1 below.

RECITALS

      WHEREAS , the Company, as Borrower, the Guarantors, the lenders party thereto and Wachovia Bank, National Association, as Administrative Agent, have entered into that certain First Lien Credit Agreement dated as of the date hereof providing for a revolving credit and term loan facility to the Company (as amended, restated, supplemented, modified or Refinanced from time to time as permitted hereunder, the “ Initial First Lien Credit Agreement ”);

      WHEREAS , the Company, as Borrower, the Guarantors, the lenders party thereto and Wachovia Bank, National Association, as Administrative Agent have entered into that certain Second Lien Credit Agreement dated as of the date hereof providing for a term loan to the Company (as amended, restated, supplemented, modified or Refinanced from time to time as permitted hereunder, the “ Initial Second Lien Credit Agreement ”);

      WHEREAS , the obligations of the Company and the Guarantors under the Initial First Lien Credit Agreement and any Hedge Agreements provided by any of the First Lien Claimholders (or their affiliates) will be secured by substantially all of the assets of the Company, and the Guarantors pursuant to the terms of the First Lien Collateral Documents;

      WHEREAS , the obligations of the Company and the Guarantors under the Initial Second Lien Credit Agreement and any Hedge Agreements provided by any of the Second Lien Claimholders (or their affiliates) will be secured by substantially all of the assets of the Company and the Guarantors pursuant to the terms of the Second Lien Collateral Documents;

      WHEREAS , the First Lien Credit Documents and the Second Lien Credit Documents provide, among other things, that the parties thereto shall set forth in this Agreement their respective rights and remedies with respect to the Collateral; and

      WHEREAS , in order to induce the First Lien Administrative Agent and the First Lien Claimholders to consent to the Grantors’ incurring the Second Lien Obligations and to induce the

First Lien Claimholders to extend credit and other financial accommodations to or for the benefit of the Company, or any other Grantor, the Second Lien Administrative Agent on behalf of the Second Lien Claimholders has agreed to the lien subordination, intercreditor and other provisions set forth in this Agreement.

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

      SECTION 1 Definitions .

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

     “ Affiliate ” means as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, a Person shall be deemed to be “controlled by” a Person if such Person possesses, directly or indirectly, power either (a) to vote 10% or more of the securities having ordinary voting power for the election of directors of such Person or (b) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

     “ Agreement ” means this Intercreditor Agreement, as amended, renewed, extended, supplemented or otherwise modified from time to time in accordance with the terms 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 all other liquidation, receivership, moratorium, conservatorship, assignment for the benefit of creditors, insolvency or similar federal, state or foreign law for the relief of debtors.

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

     “ Capital Lease ” means any lease of property, real or personal, the obligations with respect to which are required to be capitalized on a balance sheet of the lessee in accordance with generally accepted accounting principles in effect in the United States of America applied on a consistent basis.

     “ Capital Lease Obligations ” means the capitalized lease obligations relating to a Capital Lease determined in accordance with generally accepted accounting principles in effect in the United States of America applied on a consistent basis.

     “ Capital Stock ” means (i) in the case of a corporation, capital stock, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of capital stock, (iii) in the case of a partnership, partnership interests (whether general or limited), (iv) in the case of a limited liability company, membership interests and (v) 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.

     “ Collateral ” means all of the assets and property of any Grantor, whether tangible or intangible, constituting both First Lien Collateral and Second Lien Collateral.

     “ Control Agent ” has the meaning set forth in Section in Section 5.5(a).

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

     “ Controlled Account ” means those certain Deposit Accounts (as defined in the Uniform Commercial Code) of any Grantor subject to Liens under the terms of the First Lien Collateral Documents and the Second Lien Collateral Documents.

     “ DIP Financing ” has the meaning set forth in Section 6.1.

     “ Discharge of First Lien Obligations ” means, except to the extent otherwise provided in Section 5.6, (i) payment in full in cash or other consideration acceptable to the First Lien Lenders in their sole discretion of the principal of and interest (including interest accruing on or after the commencement of any Insolvency or Liquidation Proceeding, whether or not a claim for such interest is, or would be, allowed in such Insolvency or Liquidation Proceeding) and premium, if any, on all Indebtedness outstanding under the First Lien Credit Documents and termination of all commitments to lend or otherwise extend credit under the First Lien Credit Documents, (ii) payment in full in cash or other consideration acceptable to the First Lien Lenders in their sole discretion of all other First Lien Obligations that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid (including legal fees and other expenses, costs or charges accruing on or after the commencement of any Insolvency or Liquidation Proceeding, whether or not a claim for such fees, expenses, costs or charges is, or would be, allowed in such Insolvency or Liquidation Proceeding), (iii) termination, cancellation or cash collateralization (in an amount reasonably satisfactory to the First Lien Administrative Agent, but in no event more than 105% of the face amount thereof) of, all letters of credit issued under the First Lien Credit Documents and (iv) termination of any Hedge Agreement provided by a First Lien Claimholder (or an affiliate thereof) and the payment in full in cash or other consideration acceptable to the First Lien Lenders in their sole discretion (or cash collateralization in an amount reasonably satisfactory to the First Lien Administrative Agent) of all Hedging Obligations; provided , however, that a Discharge of First Lien Obligations shall be deemed to have occurred when the First Lien Claimholders receive proceeds from Collateral in an amount equal to the Maximum First Lien Indebtedness plus any amount required under clause (iv) above (it being understood that nothing in this Agreement is intended to obligate the First

Lien Claimholders to release their Liens on the Collateral except in connection with satisfaction in full of all Obligations outstanding under (i) the First Lien Credit Agreement, (ii) the other First Lien Credit Documents, and (iii) any Hedge Agreements of the type described in the definition of First Lien Obligations).

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

     “ Enforcement Action ” means the exercise of any rights or remedies against any Collateral, including, without limitation, any right to take possession or control of any Collateral under any lockbox agreement, account control agreement, landlord waiver or bailee’s letter or similar agreement or arrangement to which the Second Lien Administrative Agent or any Second Lien Claimholder is a party, any right of set-off or recoupment with respect to the First Lien Obligations, and any enforcement, collection, execution, levy or foreclosure action or proceeding taken against the Collateral.

     “ Excluded First Lien Obligations ” mean, collectively, (a) the aggregate outstanding principal amount of loans and letter of credit accommodations made, issued or incurred pursuant to the First Lien Credit Agreement that exceeds the Maximum First Lien Indebtedness, (b) any interest and fees payable on account of such excess principal amount under the First Lien Credit Agreement or in respect thereof, and (c) any prepayment premium, make-whole obligation, or early termination fee payable pursuant to the terms of the First Lien Credit Agreement.

     “ Excluded Second Lien Obligations ” means, collectively, (a) the aggregate outstanding principal amount of loans made, issued or incurred pursuant to the Second Lien Credit Agreement after the closing of the Second Lien Credit Agreement, (b) any interest and fees, payable on account of such principal amount under the Second Lien Credit Agreement or in respect thereof, and (c) any prepayment premium, make-whole obligation, or early termination fee payable pursuant to the terms of the Second Lien Credit Agreement.

     “ Exercise of Remedies ” has the meaning set forth in Section 5.1(a)(i).

     “ First Lien Administrative Agent ” has the meaning set forth in the preamble hereto.

     “ 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 any agent under the First Lien Credit Agreement.

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

     “ First Lien Collateral Documents ” means the Security Documents (as defined in the First Lien Credit Agreement as amended from time to time in accordance herewith) and any other agreement, document or instrument 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.

     “ First Lien Credit Agreement ” means (i) the Initial First Lien Credit Agreement and (ii) any other credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation that has been incurred to extend, increase, Refinance (each subject to the limitations set forth herein) in whole or in part the indebtedness and other obligations outstanding under (x) the Initial First Lien Credit Agreement or (y) any subsequent First Lien Credit Agreement, unless such agreement or instrument expressly provides that it is not intended to be and is not a First Lien Credit Agreement hereunder; provided that if and to the extent that any amendment, modification, increase or Refinancing of the Initial First Lien Credit Agreement or any other agreement referred to in this clause (ii) provides for revolving credit commitments, revolving credit loans, term loans, bonds, debentures, notes or similar instruments having a principal amount in excess of the Maximum First Lien Indebtedness, then that portion of such principal amount in excess of the Maximum First Lien Indebtedness (and all interest, fees and amounts accruing thereon) shall not constitute First Lien Obligations for purposes of this Agreement. Any reference to the First Lien Credit Agreement hereunder shall be deemed a reference to any First Lien Credit Agreement then in existence if entered into in compliance with the terms of this Agreement.

     “ First Lien Credit Documents ” means the First Lien Credit Agreement and the Credit Documents (as defined in the First Lien Credit Agreement as amended from time to time in accordance herewith) and each of the other agreements, documents and instruments providing for or evidencing any other First Lien Obligation, and any other document or instrument executed or delivered at any time in connection with any First Lien Obligations, including any intercreditor or joinder agreement among holders of First Lien Obligations, to the extent such are effective at the relevant time, as each may be modified from time to time in accordance with this Agreement.

     “ First Lien Lenders ” means the “Lenders” under and as defined in the First Lien Credit Agreement.

     “ First Lien Obligations ” means all Obligations outstanding under (i) the First Lien Credit Agreement, (ii) the other First Lien Credit Documents, and (iii) any Hedge Agreements entered into by Company or any Guarantor with any counterparty that is or was a First Lien Claimholder (or any of their affiliates) at the time such Hedge Agreement was entered into (it being understood, for avoidance of doubt, that Hedging Obligations of a Person that is both a First Lien Claimholder and a Second Lien Claimholder at the time such Hedge Agreement was entered into by Company or any Guarantor shall be considered First Lien Obligations); provided that the aggregate principal amount, without duplication, of any revolving credit commitments, revolving credit loans, letters of credit, term loans, bonds, debentures, notes or similar instruments or other obligations provided for under the First Lien Credit Agreement or any other First Lien Credit Document (or any Refinancing thereof) in excess of the sum of (i) $95,000,000 plus (ii) any interest and fees payable under the First Lien Credit Agreement in respect thereof and any attorneys fees, costs, expenses or indemnities payable under the First Lien Credit Agreement, minus (iii) the aggregate amount of all payments and prepayments of term loans under the First Lien Credit Agreement and the aggregate amount of all payments and prepayments of revolving loans under the First Lien Credit Agreement (to the extent accompanied by a permanent

commitment reduction (excluding reduction in sub-facility commitments not accompanied by a corresponding reduction in the facility commitment amount)) made from and after the date hereof (such sum, the “ Maximum First Lien Indebtedness ”), shall constitute Excluded First Lien Obligations for purposes of this Agreement. “First Lien Obligations” shall include (x) all interest accrued or accruing (or which would, absent commencement of an Insolvency or Liquidation Proceeding, accrue) in accordance with the rate specified in the relevant First Lien Credit Document and (y) all fees, costs and charges incurred in connection with the First Lien Credit Documents and provided for thereunder, in the case of each of clause (x) and clause (y) whether before or after commencement of an Insolvency or Liquidation Proceeding, irrespective of whether any claim for such interest, fees, costs or charges is allowed as a claim in such Insolvency or Liquidation Proceeding.

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

     “ Grantors ” means Company, Holdings and each of the Guarantor Subsidiaries that have executed and delivered, or may from time to time hereafter execute and deliver, a First Lien Collateral Document or a Second Lien Collateral Document.

     “ Guarantor Subsidiaries ” has the meaning set forth in the recitals hereto.

     “ Guaranty Obligations ” means, with respect to any Person, without duplication, any obligations of such Person (other than endorsements in the ordinary course of business of negotiable instruments for deposit or collection) guaranteeing or intended to guarantee any Indebtedness of any other Person in any manner, whether direct or indirect, and including without limitation any obligation, whether or not contingent, (i) to purchase any such Indebtedness or any property constituting security therefor, (ii) to advance or provide funds or other support for the payment or purchase of any such Indebtedness or to maintain working capital, solvency or other balance sheet condition of such other Person (including without limitation keep well agreements, maintenance agreements, comfort letters or similar agreements or arrangements) for the benefit of any holder of Indebtedness of such other Person, (iii) to lease or purchase property, securities or services primarily for the purpose of assuring the holder of such Indebtedness, or (iv) to otherwise assure or hold harmless the holder of such Indebtedness against loss in respect thereof.

     “ Hedge Agreements ” means with respect to any Person, any agreement entered into to protect such Person against fluctuations in interest rates, or currency or raw materials values, including, without limitation, any interest rate swap, cap or collar agreement or similar arrangement between such Person and one or more counterparties, any foreign currency exchange agreement, currency protection agreements, commodity purchase or option agreements or other interest or exchange rate hedging agreements.

     “ Hedging Obligation ” means, with respect to any Person, any obligation of such Person pursuant to any Hedge Agreements; provided that such Hedging Obligations are permitted pursuant to both the First Lien Credit Documents and the Second Lien Credit Documents on the date such Obligation is incurred.

     “ Holdings ” has the meaning set forth in the recitals hereto.

     “ Improper Act ” means, with respect to the avoidance, invalidation or subordination of any Lien, an act by the First Lien Administrative Agent or the First Lien Claimholders that is determined by a final, non-appealable judgment of a court of competent jurisdiction to have constituted an act of actual fraud (it being understood that receipt of an allegedly fraudulent conveyance shall not constitute actual fraud) or other egregious conduct justifying equitable subordination of such Lien pursuant to Section 510(c) of the Bankruptcy Code.

     “ Indebtedness ” means and includes, with respect to any Person, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, or upon which interest payments are customarily made, (iii) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business), (iv) all obligations (including, without limitation, the reasonably anticipated amount of any earnout obligations) of such Person incurred, issued or assumed as the deferred purchase price of property or services purchased by such Person (other than trade debt incurred in the ordinary course of business and due within six months of the incurrence thereof) which would appear as liabilities on a balance sheet of such Person, (v) all obligations of such Person under take-or-pay or similar arrangements or under commodities agreements, (vi) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on, or payable out of the proceeds of production from, property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (vii) all Guaranty Obligations of such Person with respect to Indebtedness of another Person, (viii) the principal portion of all Capital Lease Obligations of such Person, (ix) all obligations of such Person under Hedge Agreements, excluding any portion thereof which would be accounted for as interest expense under generally accepted accounting principles in effect in the United States of America applied on a consistent basis, (x) the maximum amount of all letters of credit issued or bankers’ acceptances facilities created for the account of such Person and, without duplication, all drafts drawn thereunder (to the extent unreimbursed), (xi) all preferred Capital Stock issued by such Person and which by the terms thereof could be (at the request of the holders thereof or otherwise) subject to mandatory sinking fund payments, redemption or other acceleration, (xii) the principal balance outstanding under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product, (xiii) the Indebtedness of any partnership or unincorporated joint venture in which such Person is a general partner or a joint venturer and (xiv) obligations of such Person under non-compete agreements.

     “ Initial First Lien Credit Agreement ” has the meaning set forth in the recitals hereto.

     “ Initial Second Lien Credit Agreement ” has the meaning set forth in the recitals hereto.

     “ Insolvency or Liquidation Proceeding ” means (i) any voluntary or involuntary case or proceeding under the Bankruptcy Code or any other Bankruptcy Law with respect to any Grantor, (ii) any other voluntary or involuntary insolvency, reorganization or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding with respect to any Grantor or with respect to a material portion of their respective assets, (iii) any liquidation, dissolution, reorganization or winding up of any Grantor whether voluntary or involuntary and whether or not involving insolvency or bankruptcy or (iv) any assignment for the benefit of creditors or any other marshalling of assets and liabilities of any Grantor.

     “ Lien ” means any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, and any lease in the nature thereof) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing.

     “ Maximum First Lien Indebtedness ” has the meaning as set forth in the definition of First Lien Obligations.

     “ Obligations ” means any and all obligations, liquidated or contingent, with respect to the payment of (i) any principal of or interest or premium on any Indebtedness, including any reimbursement obligation in respect of any letter of credit, or any other liability, including, without limitation, interest and premiums accruing after the filing of a petition initiating any proceeding under the Bankruptcy Laws irrespective of whether a claim for such interest or premium is allowed or allowable in such proceeding, (ii) any fees, indemnification obligations, expense reimbursement obligations or other liabilities payable under the documentation governing any Indebtedness, including, without limitation, fees, costs, premiums and other charges accruing or incurred after the filing of a petition initiating any proceeding under the Bankruptcy Laws irrespective of whether a claim for such fees, costs, premiums and other charges is allowed or allowable in such proceeding, (iii) any obligation to provide cash collateral in respect of letters of credit or any other Indebtedness or (iv) any Hedging Obligations.

     “ Permitted Refinancing Documents ” shall mean any financing documentation which replaces (i) the Initial First Lien Credit Agreement and the other First Lien Credit Documents and pursuant to which the outstanding First Lien Obligations are refinanced in their entirety, as such financing documentation may be amended, supplemented, restated, refinanced or otherwise modified from time to time in compliance with this Agreement, but specifically excluding any such financing documentation to the extent that it contains, either initially or by amendment or other modification, any terms, conditions, covenants or defaults other than those which (a) then exist in the Initial First Lien Credit Agreement and the other First Lien Credit Documents or (b) could be included in the Initial First Lien Credit Agreement and the other First Lien Credit Documents by an amendment or other modification that would not be prohibited by the terms of this Agreement.

     “ Person ” means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies,

joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and Governmental Authorities.

     “ Recovery ” has the meaning set forth in Section 6.5.

     “ Refinance ” means, in respect of any Indebtedness, to refinance, replace or repay, or to issue other Indebtedness, in exchange or replacement for, such indebtedness. “ Refinanced ” and “ Refinancing ” shall have correlative meanings, provided that the Company and Guarantors shall not be permitted to Refinance the First Lien Obligations unless the financing documentation entered into by the Company and the Guarantors in connection with any such Refinancing constitutes Permitted Refinancing Documents.

     “ Requisite Lenders ” means with respect to the First Lien Credit Agreement or the Second Lien Credit Agreement, as applicable, those First Lien Lenders or Second Lien Lenders, as applicable, the approval of which is required to approve an amendment or modification of, termination or waiver of any provision of or consent to any departure from the First Lien Credit Agreement or the Second Lien Credit Agreement (or would be required to effect such consent under this Agreement if such consent were treated as an amendment of the First Lien Credit Agreement or the Second Lien Credit Agreement) as applicable.

     “ Second Lien Administrative Agent ” has the meaning set forth in the preamble hereof.

     “ Second Lien Claimholders ” means, at any relevant time, the holders of Second Lien Obligations at such time, including without limitation the Second Lien Lenders and any agent under the Second Lien Credit Agreement.

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

     “ Second Lien Collateral Documents ” means the Security Documents (as defined in the Second Lien Credit Agreement as amended from time to time in accordance herewith) and any other agreement, document or instrument pursuant to which a Lien is granted securing any Second Lien Obligations or under which rights or remedies with respect to such Liens are governed.

     “ Second Lien Credit Agreement ” means (i) the Initial Second Lien Credit Agreement, (ii) any other credit agreement, loan agreement, note agreement, promissory note, indenture, or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation that has been incurred to extend, increase or Refinance in whole or in part the indebtedness and other obligations outstanding under the Initial Second Lien Credit Agreement or other agreement or instrument referred to in this clause (ii), subject to the limitations set forth herein and only to the extent permitted hereby. Any reference to the Second Lien Credit Agreement hereunder shall be deemed a reference to any Second Lien Credit Agreement then in existence.

     “ Second Lien Credit Documents ” means the Second Lien Credit Agreement and the Credit Documents (as defined in the Second Lien Credit Agreement) and each of the other agreements, documents and instruments providing for or evidencing any other Second Lien Obligation, and any other document or instrument executed or delivered at any time in connection with any Second Lien Obligations, as the same may be modified from time to time, including any intercreditor or joinder agreement among holders of Second Lien Obligations, to the extent such are effective at the relevant time, as each may be modified from time to time in accordance with this Agreement.

     “ Second Lien Enforcement Date ” means the date which is 180 days after the occurrence of (i) an Event of Default (under and as defined in the Second Lien Credit Agreement) and (ii) the First Lien Administrative Agent’s receipt of written notice from the Second Lien Administrative Agent certifying that an Event of Default (under and as defined in the Second Lien Credit Agreement) has occurred and is continuing; provided that the Second Lien Enforcement Date shall be stayed and shall not occur and shall be deemed not to have occurred (1) at any time the First Lien Administrative Agent or the First Lien Claimholders have commenced and are diligently pursuing any Enforcement Action against all or a material portion of the Collateral, (2) at any time any Grantor is then a debtor under or with respect to (or otherwise subject to) any Insolvency or Liquidation Proceeding or (3) if the Event of Default described in such written notice is waived by the Second Lien Claimholders or such written notice is otherwise rescinded by the Second Lien Claimholders.

     “ Second Lien Lenders ” means the “Lenders” under and as defined in the Second Lien Credit Agreement.

     “ Second Lien Obligations ” means all Obligations outstanding under the Second Lien Credit Agreement, the other Second Lien Credit Documents and Hedge Agreements entered into by Company or any Guarantor with any counterparty that is a Second Lien Claimholder (or any of their affiliates) at the time such Hedge Agreement was entered into (it being understood, for avoidance of doubt, that Hedging Obligations of a Person that is both a First Lien Claimholder and a Second Lien Claimholder at the time such Hedge Agreement was entered into by Company or any Guarantor shall be considered First Lien Obligations). “Second Lien Obligations” shall include (i) all interest accrued or accruing (or which would, absent commencement of an Insolvency or Liquidation Proceeding, accrue) in accordance with the rate specified in the relevant Second Lien Credit Document and (ii) all fees, costs and charges incurred in connection with the Second Lien Credit Documents and provided for thereunder, in each case whether before or after commencement of an Insolvency or Liquidation Proceeding irrespective of whether any claim for such interest, fees, costs or charges is allowed as a claim in such Insolvency or Liquidation Proceeding.

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

controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof; provided , in determining the percentage of ownership interests of any Person controlled by another Person, no ownership interest in the nature of a “qualifying share” of the former Person shall be deemed to be outstanding.

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

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

      SECTION 2 Lien Priorities .

      2.1 Relative Priorities . Notwithstanding the date, manner or order of grant, attachment or perfection of any Liens securing the Second Lien Obligations granted on the Collateral or of any Liens securing the First Lien Obligations granted on the Collateral and notwithstanding any provision of the UCC, or any applicable law or the Second Lien Credit Documents, the Second Lien Administrative Agent, on behalf of itself and the Second Lien Claimholders, hereby agrees that: (a) any Lien on the Collateral securing any First Lien Obligations now or hereafter held by or on behalf of the First Lien Administrative Agent or any First Lien Claimholders or any agent or trustee therefor, regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be senior in all respects and prior to any Lien on the Collateral securing any of the Second Lien Obligations; and (b) any Lien on the Collateral now or hereafter held by or on behalf of the Second Lien Administrative Agent, any Second Lien Claimholders or any agent or trustee therefor regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be junior and subordinate in all respects to all Liens on the Collateral securing any First Lien Obligations.

      2.2 Failure to Perfect . All Liens on the Collateral securing any First Lien Obligations shall be and remain senior in all respects and prior to all Liens on the Collateral securing any Second Lien Obligations for all purposes, notwithstanding any failure of the First

Lien Administrative Agent or the First Lien Claimholders to adequately perfect its security interests in the Collateral, the subordination of any Lien on the Collateral securing any First Lien Obligations to any Lien securing any other obligation of any Grantor, or the avoidance, invalidation or lapse of any Lien on the Collateral securing any First Lien Obligations (other than as a result of a final non-appealable judgment of a court of competent jurisdiction avoiding, invalidating or subordinating any such Lien as a result of an Improper Act of the First Lien Claimholders).

      2.3 Nature of First Lien Obligations . The Second Lien Administrative Agent, for itself and on behalf of the other Second Lien Claimholders, acknowledges that (a) a portion of the First Lien Obligations are revolving in nature, (b) the amount thereof that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed subject to the limitations set forth in this Agreement, (c) the terms of the First Lien Obligations may be modified, extended or amended from time to time subject to the limitations set forth in this Agreement, and (d), subject to the limitations on the aggregate principal amount of First Lien Obligations set forth in the definition of “First Lien Obligations” or in Section 5.3, the aggregate amount of the First Lien Obligations may be increased or Refinanced, in either event, without notice to or consent by the Second Lien Claimholders and without affecting the provisions hereof. The lien priorities provided in Sections 2.1 and 2.2 shall not be altered or otherwise affected by any such amendment, modification, supplement, extension, repayment, reborrowing, increase, replacement, renewal, restatement or Refinancing of either the First Lien Obligations or the Second Lien Obligations, or any portion thereof to the extent made in compliance with the terms of this Agreement.

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

      2.5 No New Liens .

     (a) Limitation on other Collateral for First Lien Claimholders . So long as any Second Lien Obligations remain outstanding, and subject to Section 6, (i) the First Lien Administrative Agent agrees that, after the date hereof, neither the First Lien Administrative Agent nor any First Lien Claimholder shall acquire or hold any Lien on any assets of any Grantor securing any First Lien Obligations which assets are not also subject to the Lien of the Second Lien Administrative Agent under the Second Lien Collateral Documents, and (ii) each Grantor agrees not to grant any Lien on any of its assets, or permit any of its Subsidiaries to grant a Lien on any of its assets, in favor of the

First Lien Administrative Agent or the First Lien Claimholders unless it, or such Subsidiary, has granted an identical but subordinated Lien on such assets in favor of the Second Lien Administrative Agent or the Second Lien Claimholders. If the First Lien Administrative Agent or any First Lien Claimholder shall (nonetheless and in breach hereof) acquire any Lien on any assets of any Grantor or any of their respective Subsidiaries securing any First Lien Obligations which assets are not also subject to the Lien of the Second Lien Administrative Agent under the Second Lien Collateral Documents, then the First Lien Administrative Agent (or the relevant First Lien Claimholder), shall, without the need for any further consent of any other Person and notwithstanding anything to the contrary in any other First Lien Document hold and be deemed to have held such Lien for the benefit of the Second Lien Administrative Agent as security for the Second Lien Obligations subject to the priorities set forth herein with any amounts received in respect thereof subject to distribution and turnover under Section 4.

     (b) Limitation on other Collateral for Second Lien Claimholders . Until the date upon which the Discharge of First Lien Obligations shall have occurred, (i) the Second Lien Administrative Agent agrees that, after the date hereof, neither the Second Lien Administrative Agent nor any Second Lien Claimholder shall acquire or hold any Lien on any assets of any Company, any Guarantor or any of their respective Subsidiaries securing any Second Lien Obligations which assets are not also subject to the senior priority Lien of the First Lien Administrative Agent under the First Lien Collateral Documents, and (ii) each Grantor agrees not to grant any Lien (other than a Permitted Lien) on any of its assets, or permit any of its Subsidiaries to grant a Lien (other than a Permitted Lien) on any of its assets, in favor of the Second Lien Administrative Agent or the Second Lien Claimholders unless it, or such Subsidiary, has granted an identical Lien on such assets in favor of the First Lien Administrative Agent or the First Lien Claimholders. If the Second Lien Administrative Agent or any Second Lien Claimholder shall (nonetheless and in breach hereof) acquire any Lien on any assets of any Grantor or any of their respective Subsidiaries securing any Second Lien Obligations which assets are not also subject to the Lien of the First Lien Administrative Agent under the First Lien Collateral Documents, then the Second Lien Administrative Agent (or the relevant Second Lien Claimholder), shall, without the need for any further consent of any other Person and notwithstanding anything to the contrary in any other Second Lien Document hold and be deemed to have held such Lien and security interest for the benefit of the First Lien Administrative Agent as security for the First Lien Obligations.

      2.6 Similar Liens and Agreements . The parties hereto agree that it is their intention that the First Lien Collateral and the Second Lien Collateral be identical. In furtherance of the foregoing and of Section 8.9, the parties hereto agree, subject to the other provisions of this Agreement:

     (a) upon request by the First Lien Administrative Agent or the Second Lien Administrative 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 Credit Documents and the Second Lien Credit Documents; and

     (b) that the documents and agreements creating or evidencing the First Lien Collateral and the Second Lien Collateral and guarantees for the First Lien Obligations and the Second Lien Obligations shall be in all material respects the same forms of documents other than with respect to the senior and subordinate nature of the security interest in the Collateral securing the respective Obligations thereunder.

      SECTION 3 Enforcement .

      3.1 Exercise of Remedies .

     (a) Except as set forth in Section 5.4, so long as the Discharge of First Lien Obligations has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against Borrower or any other Grantor:

     (i) the Second Lien Administrative Agent and the Second Lien Claimholders:

     (A) from the date hereof until the occurrence of the Second Lien Enforcement Date, will not take any Enforcement Action with respect to any Lien held by it under the Second Lien Collateral Documents or any other Second Lien Credit Document or otherwise; and

     (B) will not contest, protest or object to, or otherwise interfere with, hinder, or delay, any Enforcement Action by the First Lien Administrative Agent or any First Lien Claimholder, provided that the respective interests of the Second Lien Claimholders attach to the proceeds thereof, subject to the relative priorities described in Section 2 and Section 4; and

     (C) subject to the rights of the Second Lien Administrative Agent under clause (i)(A) above, will not contest, protest or object to the forbearance by the First Lien Administrative Agent or the First Lien Claimholders from bringing or pursuing any Enforcement Action; and

     (ii) subject to Section 5.1, the First Lien Administrative Agent and the First Lien Claimholders shall have the exclusive right to commence and, if applicable, maintain an Enforcement Action and make determinations regarding the release, disposition, or restrictions with respect to the Collateral without any consultation with or the consent of the Second Lien Administrative Agent or any Second Lien Claimholder;

      provided , that :

     (A) in any Insolvency or Liquidation Proceeding commenced by or against Company or any other Grantor, the Second Lien Administrative Agent may file a claim or statement of interest with respect to the Second Lien Obligations,

     (B) the Second Lien Administrative Agent may take any action (not adverse to the Liens on the Collateral securing the First Lien Obligations, or the rights of any First Lien Administrative Agent or the First Lien Claimholders to exercise remedies in respect thereof) in order to preserve or protect its Lien on the Collateral,

     (C) the Second Lien Claimholders shall be entitled to file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any person objecting to or otherwise seeking the disallowance of the claims of the Second Lien Claimholders, including without limitation any claims secured by the Collateral, if any, in each case in accordance with the terms of this Agreement,

     (D) in any Insolvency or Liquidation Proceeding, the Second Lien Claimholders shall be entitled to file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Grantors arising under either Bankruptcy Law or applicable non-bankruptcy law, in each case in accordance with the terms of this Agreement,

     (E) in any Insolvency or Liquidation Proceeding, the Second Lien Claimholders shall be entitled to file any proof of claim and other filings and make any arguments and motions that are, in each case, in accordance with the terms of this Agreement, with respect to the Second Lien Obligations and the Collateral,

     (F) the Second Lien Claimholders shall be entitled, in any Insolvency or Liquidation Proceeding, to vote on any plan of reorganization (including without limitation the right to vote to accept or reject any plan of partial or complete liquidation), provided, it is understood and agreed that nothing in a plan of reorganization is meant to supersede the priorities set forth herein with respect to liens on and rights against the Collateral, which priorities and rights shall survive any such plan of reorganization,

     (G) the Second Lien Administrative Agent or any Second Lien Claimholder may exercise any of its rights or remedies with respect to the Collateral upon the occurrence and during the effective continuation of the Second Lien Enforcement Date; and

     (I) the Second Lien Claimholders may bid for and purchase Collateral at any private or judicial foreclosure sale of such Collateral initiated by the First Lien Claimholders (the actions described in this proviso being referred to herein as “ Permitted Second Lien Actions ”).

In exercising rights and remedies with respect to the Collateral, the First Lien Administrative Agent and the First Lien Claimholders may enforce the provisions of the First Lien Credit Documents and exercise remedies thereunder, all in such order and in

such manner as they may determine in the exercise of their sole discretion. Such exercise and enforcement shall include the rights of an agent appointed by the First Lien Administrative Agent and the First Lien Claimholders to sell or otherwise dispose of Collateral upon foreclosure, to incur expenses in connection with such sale or disposition, and to exercise all the rights and remedies of a secured creditor under the Uniform Commercial Code of any applicable jurisdiction and of a secured creditor under Bankruptcy Laws of any applicable jurisdiction.

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