Exhibit 10.4
INTERCREDITOR AND SUBORDINATION AGREEMENT
This Intercreditor and Subordination Agreement (this "Agreement"), dated as
of January 31, 2008 is among Societe Generale, as administrative agent (in such
capacity, with its successors and assigns, the "Senior Administrative Agent")
for the Senior Lenders (as defined below), Societe Generale, as administrative
agent (in such capacity, the "Subordinated Administrative Agent") for the
Subordinated Lenders (as defined below), and Abraxas Energy Partners, L.P., a
Delaware limited partnership (the "Borrower").
WHEREAS, the Borrower, the lenders party thereto from time to time (the
"Senior Lenders"), and the Senior Administrative Agent are parties to that
certain Credit Agreement dated as of January 31, 2008 (as amended, restated,
supplemented and otherwise modified from time to time, the "Senior Credit
Agreement");
WHEREAS, the Borrower, the lenders party thereto from time to time (the
"Subordinated Lenders"), and the Subordinated Administrative Agent are parties
to that certain Subordinated Credit Agreement dated as of January 31, 2008 (as
amended, restated, supplemented and otherwise modified from time to time, the
"Subordinated Credit Agreement");
WHEREAS, the Senior Lenders have agreed to make loans and other extensions
of credit to the Borrower pursuant to the Senior Credit Agreement on the
condition, among others, that the Obligations (as such term is defined in the
Senior Credit Agreement) shall be secured by first priority liens on, and
security interests in, the assets of the Borrower and any subsidiaries of the
Borrower as provided therein.
WHEREAS, the Subordinated Lenders have agreed to make loans and other
extensions of credit to the Borrower pursuant to the Subordinated Credit
Agreement on the condition, among others, that the Obligations (as such term is
defined in the Subordinated Credit Agreement) shall be secured by second
priority liens on, and security interests in, the assets of the Borrower and any
subsidiaries of the Borrower as provided therein.
WHEREAS, each of the Senior Credit Agreement and the Subordinated Credit
Agreement require, among other things, that the parties set forth in this
Agreement their respective rights, obligations and remedies with respect to the
assets of the Borrower and its subsidiaries.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained and other good and valuable consideration, the existence and
sufficiency of which are expressly recognized by all of the parties hereto, the
parties agree as follows:
ARTICLE I
Defined Terms.
Section 1.01 Each capitalized term used in this Agreement, but not defined
herein, shall have the meaning ascribed to such term in the Senior Credit
Agreement.
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Section 1.02 The following terms have the following meanings when used in
this Agreement:
"Blockage Period" means a Non-Payment Blockage Period or a Payment Blockage
Period.
"Eligible Hedge Contract" means any present or future Hedge Contract
between the Borrower or any Subsidiary and a counterparty that is a Senior
Lender or an Affiliate of a Senior Lender; provided that if such counterparty
ceases to be a Senior Lender under the Senior Credit Agreement (or, in the case
of an Affiliate of a Senior Lender, the Person affiliated therewith ceases to be
a Senior Lender under the Senior Credit Agreement), such Eligible Hedge Contract
shall only cover such obligations to the extent arising from transactions
entered into at the time such counterparty was a Senior Lender or an Affiliate
of a Senior Lender.
"Enforcement Action" means, with respect to any Subordinated Obligations or
Senior Indebtedness, any enforcement of any right or remedy including any
enforcement or foreclosure of Liens granted by the Borrower or any Subsidiary to
secure any or all of such Subordinated Obligations or Senior Indebtedness, any
enforcement or foreclosure of Liens on any capital stock or other equity
interests in the Borrower or any Subsidiary which may be granted by the Borrower
or its Subsidiaries or any holder of equity in the Borrower to secure any or all
of such Subordinated Obligations or Senior Indebtedness, or any other efforts to
collect proceeds from the Borrower's or any of its Subsidiary's assets or
properties (including proceeds of production) to satisfy the Subordinated
Obligations or Senior Indebtedness, including, without limitation, the
commencement or the joining with any other creditor of the Borrower or any
Subsidiary in the commencement of any Insolvency Proceeding against the Borrower
or any Subsidiary; provided, that none of the following shall constitute an
Enforcement Action: (a) acceleration of any of the Subordinated Obligations
following acceleration of any of the Senior Indebtedness (provided that such
acceleration of Senior Indebtedness has not previously been rescinded), (b)
acceleration of any of the Senior Indebtedness following acceleration of any of
the Subordinated Obligations (provided that such acceleration of the
Subordinated Obligations has not previously been rescinded), (c) actions by any
Subordinated Lender to obtain possession of or receive Reorganization
Securities, (d) the sending of any default notice by the Subordinated
Indebtedness Representative or any Subordinated Lender, (e) the charging of a
default rate of interest by any Subordinated Lender, or (f) taking any action
described above during the existence of any Insolvency Proceeding subject to the
jurisdiction of a court of competent authority.
"Insolvency Proceeding" shall mean (a) any voluntary or involuntary case,
action, or proceeding before any Governmental Authority having jurisdiction over
the applicable Person or its assets relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up, or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshaling of assets for creditors, or other similar arrangement in
respect of its creditors generally or any substantial portion of its creditors;
in each case whether undertaken under U.S. federal, state, or foreign law.
"Non-Payment Blockage Period" means, with respect to any Non-Payment
Default, the period from and including the date of receipt by the Subordinated
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Lenders or the Subordinated Administrative Agent or other representative of a
Non-Payment Default Notice relating thereto until the first to occur of (a) the
Payment in Full of Senior Indebtedness, (b) the 179th day after receipt of such
Non-Payment Default Notice, (c) the date on which the Non-Payment Default that
is the subject of such Non-Payment Default Notice has been waived in writing by
the applicable holder or holders of the Senior Indebtedness or an agent or
representative on their behalf, cured, or ceased to exist, or (d) the date upon
which the Person(s) giving such Non-Payment Default Notice notify the
Subordinated Lenders or the Subordinated Administrative Agent or other
representative in writing of the termination of such Non-Payment Blockage
Period.
"Non-Payment Default" means the occurrence of any Borrowing Base Deficiency
(as defined in the Senior Credit Agreement) or any event under any Senior Loan
Document evidencing Senior Indebtedness, not constituting a Payment Default,
which gives the holder(s) of such Senior Indebtedness, or an agent or
representative acting on behalf of such holder(s), the right to cause the
maturity of such Senior Indebtedness to be accelerated immediately without any
further notice (except such notice as may be required to effect such
acceleration) or the expiration of any applicable grace period.
"Non-Payment Default Notice" means a written notice from or on behalf of
the Senior Indebtedness Representative that a Non-Payment Default has occurred
and is continuing which identifies such Non-Payment Default and specifically
designates such notice as a "Non-Payment Default Notice".
"Payment Blockage Period" means, with respect to any Payment Default or
Senior Indebtedness Acceleration, the period from and including the date of
receipt by the Subordinated Lenders or the Subordinated Administrative Agent or
other representative of a Payment Default Notice relating thereto until the
first to occur of (a) the Payment in Full of Senior Indebtedness, (b) if such
Payment Default Notice relates to a Payment Default, the date on which the
Payment Default which is the subject of such Payment Default Notice has been
waived in writing by the applicable holder or holders of the Senior Indebtedness
or an agent or representative on their behalf, cured or ceased to exist, or if
such Payment Default Notice relates to a Senior Indebtedness Acceleration, the
date on which such acceleration is rescinded, annulled or ceased to exist, or
(c) the day upon which the Person(s) giving such Payment Default Notice notify
the Subordinated Lenders or the Subordinated Administrative Agent or other
representative in writing of the termination of such Payment Blockage Period.
"Payment Default" means (a) a default by the Borrower or any Guarantor in
the payment of any amount owing with respect to the Senior Indebtedness, whether
with respect to principal, interest, premium, letter of credit reimbursement
obligations, hedge obligations, commitment fees or letter of credit fees or
otherwise when the same becomes due and payable, whether at maturity or at a
date fixed for payment of an installment or prepayment or by declaration or
acceleration or otherwise or (b) the failure of the Borrower to deliver an
election notice or to perform the actions chosen to remedy a Borrowing Base
Deficiency (as defined in the Senior Credit Agreement) under Section 2.05(b)(i)
of the Senior Credit Agreement.
"Payment Default Notice" means a written notice from or on behalf of the
Senior Indebtedness Representative that either (i) a Payment Default with
respect to such Senior Indebtedness has occurred and is continuing, or (ii) a
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Senior Indebtedness Acceleration with respect to such Senior Indebtedness has
occurred and is continuing, which, in either case, identifies such Payment
Default or such Senior Indebtedness Acceleration, as applicable, and
specifically designates such notice as a "Payment Default Notice".
"Payment in Full of Senior Indebtedness" means the first date on which (a)
the Senior Indebtedness has been paid in cash in full, (b) all commitments of
any holder of the Senior Indebtedness to make loans or extensions of credit have
been terminated, (c) all letters of credit issued by any holder of the Senior
Indebtedness have expired or have been terminated or cash collateralized, and
(d) all Hedge Contracts between the Borrower or any of its Subsidiaries and any
Senior Lender or Affiliate of a Senior Lender have been terminated.
"Reorganization Securities" means (a) debt securities that are issued
pursuant to an Insolvency Proceeding the payment of which is subordinate and
junior at least to the extent provided in this Agreement to the payment of the
Senior Indebtedness outstanding at the time of the issuance thereof (including
any refinancing of Senior Indebtedness pursuant to an Insolvency Proceeding) and
to the payment of all debt securities issued in exchange for such Senior
Indebtedness in such Insolvency Proceeding (whether such subordination is
effected by the terms of such securities, an order or decree issued in such
Insolvency Proceeding, by agreement of the Subordinated Lenders or otherwise),
or (b) equity securities that are issued pursuant to an Insolvency Proceeding;
provided, in either case, that such securities are authorized by an order or
decree made by a court of competent jurisdiction in such Insolvency Proceeding.
"Required Senior Lenders" means the "Required Lenders" as defined in the
Senior Credit Agreement.
"Senior Indebtedness" means and includes (a) all principal indebtedness for
loans now outstanding or hereafter incurred, and all letter of credit
reimbursement obligations now existing or hereafter arising, under the Senior
Credit Agreement, provided that the aggregate outstanding principal amount of
Senior Indebtedness under this clause (a) shall not exceed $300,000,000 at any
time, and provided further, that if the aggregate principal amount of Senior
Indebtedness (constituting principal and letter of credit reimbursement
obligations) shall exceed $300,000,000, then the subordination of the
Subordinated Notes as contemplated by this Agreement to the Senior Indebtedness
of $300,000,000 or less shall not be impaired, (b) all amounts now or hereafter
owing to any of the Senior Lenders or any of their Affiliates under any Eligible
Hedge Contract, (c) all interest accruing on the Senior Indebtedness described
in the preceding clauses (a) and (b), and (d) all other monetary obligations
(whether now outstanding or hereafter incurred) for which the Borrower or any
Guarantor is responsible or liable as obligor, guarantor or otherwise under or
pursuant to any of the Senior Loan Documents including, without limitation, all
fees, penalties, yield protections, breakage costs, damages, indemnification
obligations, reimbursement obligations, and expenses (including, without
limitation, fees and expenses of counsel to the Senior Indebtedness
Representative and the Senior Lenders) together with interest on the foregoing
to the extent provided for in the Senior Loan Documents. The interest described
in the preceding clause (c) and the premiums and penalties described in the
preceding clause (d) include, without limitation, all interest accruing after
the commencement of any Insolvency Proceeding under the terms of the Senior Loan
Documents whether or not such interest constitutes an allowed claim in any such
Insolvency Proceeding.
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"Senior Indebtedness Acceleration" means with, respect to the Senior
Indebtedness, that the holder or holders of such Senior Indebtedness, or an
agent or representative on behalf of such holder or holders, have caused the
maturity of such Senior Indebtedness to be accelerated.
"Senior Credit Agreement Event of Default" means the occurrence of an Event
of Default as defined in the Senior Credit Agreement.
"Senior Indebtedness Default" means a Payment Default or a Non-Payment
Default.
"Senior Indebtedness Representative" means (a) initially, Societe Generale,
as administrative agent for the Senior Lenders under the Senior Credit Agreement
or (b) such other Person selected pursuant to the terms of the Senior Credit
Agreement to replace Societe Generale or the then Senior Indebtedness
Representative.
"Senior Loan Documents" means the "Loan Documents" as defined in the Senior
Credit Agreement.
"Standstill Period" means the period beginning with the commencement of a
Blockage Period and ending on the earliest of (a) the date when the Senior
Indebtedness Default giving rise to such Blockage Period has been cured or
waived in writing, (b) Payment in Full of Senior Indebtedness, (c) the date that
is 179 days after the commencement of a Blockage Period, (d) the date on which
the Senior Indebtedness shall have been declared due and payable prior to its
stated maturity or any holder of Senior Indebtedness commences proceedings to
collect any Senior Indebtedness or realize upon any material part of the
collateral for any Senior Indebtedness, and (e) the date upon which any
Insolvency Proceeding is commenced.
"Subordinated Credit Agreement Event of Default" means the occurrence of an
Event of Default as defined in the Subordinated Credit Agreement.
"Subordinated Indebtedness Representative" means (a) initially, Societe
Generale, as administrative agent for the Subordinated Lenders under the
Subordinated Credit Agreement or (b) such other Person selected pursuant to the
terms of the Subordinated Credit Agreement to replace Societe Generale or the
then Subordinated Indebtedness Representative.
"Subordinated Loan Documents" means the "Loan Documents" as defined in the
Subordinated Credit Agreement.
"Subordinated Notes" means the "Notes" as defined in the Subordinated
Credit Agreement.
"Subordinated Obligations" means the "Obligations" as such term is defined
in the Subordinated Credit Agreement (other than obligations owing in respect of
any Eligible Hedge Contract with a Subordinated Lender or an Affiliate thereof
that is also a Senior Lender or an Affiliate thereof, which obligations shall
constitute "Senior Indebtedness").
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ARTICLE II
Subordination
Section 2.01 Subordination of Obligations. The Borrower and each Subsidiary
covenant and agree, and each Subordinated Lender by its acceptance of a
Subordinated Note covenants and agrees, that the payment of the Subordinated
Obligations shall, to the extent set forth in this Agreement, be subordinate and
junior and subject in right of payment to the prior payment in full in cash of
all Senior Indebtedness, whether outstanding on the date hereof or hereafter
created, incurred, assumed or guaranteed. Notwithstanding anything to the
contrary set forth in this Agreement, the Borrower may make and each
Subordinated Lender may accept payments, scheduled or otherwise, in respect of
the Subordinated Obligations so long as (a) no Payment Blockage Period exists,
(b) no Non-Payment Blockage Period exists, (c) no Standstill Period exists, (d)
no Default (as defined in the Senior Credit Agreement) or Senior Credit
Agreement Event of Default exists, and (e) no Borrowing Base Deficiency (as
defined in the Senior Credit Agreement) exists; provided, however, that the
existence of any Non-Payment Default or a Standstill Period resulting from any
Non-Payment Default, shall not prevent or prohibit the Borrower or any
Subsidiary from paying or prepaying the Subordinated Obligations in full or in
part prior to the repayment or prepayment of any Senior Indebtedness so long as
(y) any Borrowing Base Deficiency is cured prior to such payment or prepayment
and (z) such payment or prepayment of the Subordinated Obligations is made using
Equity Issuance Proceeds to the extent permitted under Section 2.05(b) of the
Senior Credit Agreement.
Section 2.02 Payment Default or Acceleration. Except under circumstances
when the terms of Section 2.05 of this Agreement are applicable, if (a) a
Payment Default or Senior Indebtedness Acceleration shall have occurred and be
continuing and (b) the Subordinated Lenders or the Subordinated Indebtedness
Representative shall have received a Payment Default Notice, then neither the
Borrower nor any Subsidiary may make, and no Subordinated Lender shall accept,
receive or collect, any direct or indirect payment or distribution of any kind
or character (in cash, securities, other Property, by setoff, or otherwise other
than Reorganization Securities) of any properties or assets of the Borrower or
any Subsidiary on account of the Subordinated Obligations during the Payment
Blockage Period; provided, however, that in the case of any payment on or in
respect of any Subordinated Obligation that would (in the absence of any such
Payment Default Notice) have been due and payable on any date (a "Scheduled
Payment Date") during such Payment Blockage Period pursuant to the terms of the
Subordinated Notes as in effect on the date hereof or as amended consistent with
the provisions of Section 2.12 of this Agreement, the provisions of this Section
2.02 shall not prevent the making and acceptance of such payment (a "Scheduled
Payment"), together with any additional default interest as is due on the
Subordinated Notes, on or after the date immediately following the termination
of such Payment Blockage Period. In the event that, notwithstanding the
foregoing, either the Borrower or any Subsidiary shall make any payment or
distribution to any Subordinated Lender prohibited by the foregoing provisions
of this Section 2.02, then and in such event such payment or distribution shall
be held in trust for the benefit of and immediately shall be paid over to the
holders of the Senior Indebtedness or the Senior Indebtedness Representative for
application against the Senior Indebtedness remaining unpaid until such Senior
Indebtedness is paid in full in cash. Any Payment Default Notice shall be deemed
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received by the Subordinated Lenders upon the date of actual receipt by the
Subordinated Lenders or the Subordinated Indebtedness Representative of such
Payment Default Notice in writing.
Section 2.03 Non-Payment Default. Except under circumstances when the terms
of Section 2.02 or Section 2.05 of this Agreement are applicable, if (a) a
Non-Payment Default shall have occurred and be continuing, (b) the Subordinated
Lenders or the Subordinated Indebtedness Representative shall have received a
Non-Payment Default Notice, and (c) no Non-Payment Default Notice shall have
been given within the 360-day period immediately preceding the giving of such
Non-Payment Default Notice, then neither the Borrower nor any Subsidiary may
make, and no Subordinated Lender shall accept, receive or collect, any direct or
indirect payment or distribution of any kind or character (in cash, securities,
other Property, by setoff, or otherwise other than Reorganization Securities) of
any properties or assets of the Borrower or any Subsidiary on account of the
Subordinated Obligations during the Non-Payment Blockage Period; provided,
however, that in the case of any Scheduled Payment on or in respect of any
Subordinated Obligation that would (in the absence of any such Non-Payment
Default Notice) have been due and payable on any Scheduled Payment Date during
such Non-Payment Blockage Period pursuant to the terms of the Subordinated Notes
as in effect on the date hereof or as amended consistent with the requirements
of Section 2.12 of this Agreement, the provisions of this Section 2.03 shall not
prevent the making and acceptance of such Scheduled Payment, together with any
additional default interest as is due on the Subordinated Notes, on or after the
date immediately following the termination of such Non-Payment Blockage Period.
In the event that, notwithstanding the foregoing, the Borrower or any Subsidiary
shall make any payment or distribution to any Subordinated Lender prohibited by
the foregoing provisions of this Section 2.03, then and in such event such
payment or distribution shall be held in trust for the benefit of and
immediately shall be paid over to the holders of the Senior Indebtedness or the
Senior Indebtedness Representative for application against the Senior
Indebtedness remaining unpaid until such Senior Indebtedness is paid in full in
cash. Any Non-Payment Default Notice shall be deemed received by the
Subordinated Lenders upon the date of actual receipt by the Subordinated Lenders
or the Subordinated Indebtedness Representative of such Non-Payment Default
Notice in writing.
Section 2.04 Standstill. At any time that a Standstill Period is in effect,
the Subordinated Lenders and the Subordinated Indebtedness Representative or any
other representative of the Subordinated Lenders will not commence any
Enforcement Action relative to the Borrower or any Subsidiary. Upon the
termination of the Standstill Period, the Subordinated Lenders may exercise all
rights or remedies they may have in law or equity; provided, however, that if a
Standstill Period terminates pursuant to clause (e) of the definition thereof,
no Subordinated Lender and no agent or representative thereof shall exercise any
remedies against, or attempt to foreclose upon, garnish, sequester or execute
upon, any Property known to it as constituting collateral for the Senior
Indebtedness (other than to file or record any judgment Liens it may have
obtained against such collateral) during the period that such Standstill Period
would have been in effect but for termination pursuant to clause (e) of the
definition of "Standstill Period;" provided further, that the Payment Blockage
Period or the Non-Payment Blockage Period, as the case may be, if not also
terminated, shall continue for its full period notwithstanding the termination
of the Standstill Period. Notwithstanding the foregoing, no Standstill Period
may be commenced while any other Standstill Period exists or within 180 days
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following the termination of any prior Standstill Period (provided that this
sentence shall not relieve any Subordinated Lender of its obligation to provide
notice under Section 2.09 of this Agreement).
Section 2.05 Insolvency; Bankruptcy; Etc. In the event of the institution
of any Insolvency Proceeding relative to the Borrower or any Subsidiary, then:
(a) The holders of the Senior Indebtedness shall be entitled to receive
payment in full in cash of the Senior Indebtedness before the Subordinated
Lenders are entitled to receive any direct or indirect payment or distribution
of any kind or character, whether in cash, Property or securities (other than
Reorganization Securities) on account of the Subordinated Obligations.
(b) Any direct or indirect payment or distribution of any kind or
character, whether in cash, Property or securities, by setoff or otherwise,
which may be payable or deliverable in such proceedings in respect of the
Subordinated Obligations but for the provisions of this Agreement shall be paid
or delivered by the Person making such payment or distribution, whether the
Borrower, a Subsidiary of the Borrower, a trustee in bankruptcy, a receiver, a
liquidating trustee, or otherwise, directly to the holders of the Senior
Indebtedness or the Senior Indebtedness Representative, to the extent necessary
to make payment in full in cash of all Senior Indebtedness remaining unpaid;
provided, however, that no delivery of any Reorganization Securities shall be
made to any holders of the Senior Indebtedness. In the event that,
notwithstanding the foregoing provisions of this Section 2.05, any Subordinated
Lender shall have received any such payment or distribution of any kind or
character, whether in cash, Property or securities (other than Reorganization
Securities), by setoff or otherwise, before all Senior Indebtedness is paid in
full in cash, which is to be paid to the holders of the Senior Indebtedness
under the foregoing provisions of this Section 2.05, then and in such event such
payment or distribution shall be held in trust for the benefit of and
immediately shall be paid over to the holders of the Senior Indebtedness or the
Senior Indebtedness Representative for application to the payment of all Senior
Indebtedness remaining unpaid until all such Senior Indebtedness shall have been
paid in full in cash.
(c) If no proof of claim is filed in any Insolvency Proceeding with
respect to any Subordinated Obligations by the tenth day prior to the bar date
for any such proof of claim, the Senior Indebtedness Representative may, after
notice to the Subordinated Lenders or the Subordinated Administrative Agent or
other representative, file such a proof of claim on behalf of the Subordinated
Lenders, and each Subordinated Lender hereby irrevocably appoints the Senior
Indebtedness Representative as its agent and attorney-in-fact for such limited
purpose; provided, that the foregoing shall not confer to the holder of any
Senior Indebtedness the right to vote on behalf of the Subordinated Lenders in
any Insolvency Proceedings. The Senior Indebtedness Representative shall
promptly deliver to the Subordinated Indebtedness Representative a copy of any
proof of claim filed by it pursuant to this Section, but there shall no be no
liability for failure to deliver such copy.
Section 2.06 No Impairment. No right of any present or future holder of
Senior Indebtedness to enforce subordination as herein provided shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of the Borrower or any Subsidiary or by any non-compliance by the Borrower
or any Subsidiary with the terms, provisions, and covenants of this Agreement,
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the Subordinated Credit Agreement or the Subordinated Notes, regardless of any
knowledge thereof any such Subordinated Lender may have or be otherwise charged
with. The provisions of this Agreement shall be enforceable directly by any
present or future holder of the Senior Indebtedness and/or the Senior
Indebtedness Representative.
Section 2.07 Rights of Creditors; Subrogation. The provisions of this
Agreement are for the purpose of defining the relative rights of the holders of
the Senior Indebtedness on the one hand, and the Subordinated Lenders on the
other hand, and nothing herein shall impair, as between the Borrower and the
Guarantors and the Subordinated Lenders, the obligation of the Borrower and the
Guarantors, which are unconditional and absolute, to pay to the Subordinated
Lenders the principal thereof and interest thereon and any other amounts owing
in accordance with their terms and the provisions thereof, nor shall anything
herein, except as otherwise provided in Section 2.04 of this Agreement, prevent
the Subordinated Lenders from exercising all remedies otherwise permitted by
applicable law or hereunder upon default under the Subordinated Credit Agreement
or under the Subordinated Notes (including the right to demand payment and xxx
for performance thereof and of the Subordinated Notes and to accelerate the
maturity thereof as provided by the terms of the Subordinated Notes), subject to
the rights of holders of the Senior Indebtedness under this Agreement. Upon the
Payment in Full of Senior Indebtedness, the Subordinated Lenders shall, to the
extent of any payments or distributions paid or delivered to the holders of the
Senior Indebtedness or otherwise applied to the Senior Indebtedness pursuant to
the provisions of this Agreement, be subrogated to the rights of the holders of
the Senior Indebtedness to receive payments or distributions of assets of the
Borrower or any Guarantor made on Senior Indebtedness (and any security
therefor) until the Subordinated Obligations shall be paid in full (and, for
this purpose, no such payments or distributions paid or delivered to the holders
of the Senior Indebtedness or otherwise applied to the Senior Indebtedness shall
be deemed to have discharged the Subordinated Obligations), and, for the
purposes of such subrogation, no payments to the holders of the Senior
Indebtedness of any cash, assets, stock, or obligations to which the
Subordinated Lenders would be entitled except for the provisions of this
Agreement shall, as between the Borrower and the Guarantors, any of their
respective creditors (other than the holders of the Senior Indebtedness), and
the Subordinated Lenders, be deemed to be a payment by the Borrower or any
Guarantor to or on account of Senior Indebtedness. The fact that failure to make
any payment on account of the Subordinated Obligations is caused by reason of
the operation of any provision of this Agreement shall not be construed as
preventing the occurrence of a Subordinated Credit Agreement Event of Default.
Section 2.08 Payments on Senior Indebtedness. In the event that any
Subordinated Lender determines in good faith that evidence is required with
respect to (a) the right of any holder of the Senior Indebtedness to participate
in any payment or distribution pursuant to this Agreement or (b) the amount of
such participation, such Subordinated Lender may request such Person to furnish
evidence to the reasonable satisfaction of such Subordinated Lender as to the
amount of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Agreement, and if such
evidence is not furnished, such Subordinated Lender may defer any payment to
such Person pending judicial determination as to the right of such Person to
receive such payment; provided that, upon the written request of such Person to
such Subordinated Lender, such payment shall be made to the court having
jurisdiction over such judicial determination or to another Person mutually
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satisfactory to such Person and such Subordinated Lender, as escrowee, to be
held and invested pending such judicial determination in accordance with such
instructions as shall be mutually satisfactory to such Person and such
Subordinated Lender and upon such judicial determination becoming final and
non-appealable to be distributed in accordance therewith to the Person entitled
thereto.
Section 2.09 Notice of Acceleration, Enforcement Action.
(a) Each Subordinated Lender agrees that in the event any Subordinated
Credit Agreement Event of Default shall occur, and as a result thereof, any
Subordinated Lender or the Subordinated Indebtedness Representative or any other
representative of such Subordinated Lender accelerates maturity of the
Subordinated Notes, then such Subordinated Lender or the Subordinated
Indebtedness Representative or other representative shall give prompt (and in
any event within three (3) Business Days) notice thereof in writing to the
holders of the Senior Indebtedness or the Senior Indebtedness Representative.
Neither the Borrower nor any Subsidiary may pay the Subordinated Notes until ten
(10) Business Days after the Senior Indebtedness Representative receives the
notice described above and, after that ten (10) Business Day period, may pay the
Subordinated Notes and the Subordinated Lenders may receive or collect such
payment only if the provisions of this Agreement do not prohibit such payment at
that time.
(b) Each Subordinated Lender agrees that in the event any Subordinated
Credit Agreement Event of Default shall occur, and as a result thereof, any
Subordinated Lender or the Subordinated Indebtedness Representative or any other
representative of such Subordinated Lender intends to commence any Enforcement
Action, then such Subordinated Lender or the Subordinated Indebtedness
Representative or other representative shall first deliver notice thereof in
writing to the Senior Indebtedness Representative both (i) not less than ten
(10) days prior to taking any such Enforcement Action and (ii) one (1) Business
Day after such Enforcement Action is taken.
(c) Each Senior Lender agrees that in the event any Senior Credit
Agreement Event of Default shall occur, and as a result thereof, any Senior
Lender or the Senior Indebtedness Representative or any other representative of
such Senior Lender accelerates maturity of the Senior Indebtedness, then such
Senior Lender or the Senior Indebtedness Representative or other representative
shall use reasonable efforts to give prompt (and in any event within three (3)
Business Days) notice thereof in writing to the holders of the Subordinated
Notes or the Subordinated Administrative Agent, but there shall be no liability
for failure to deliver such notice.
(d) Each Senior Lender agrees that in the event any Senior Credit
Agreement Event of Default shall occur, and as a result thereof, any Senior
Lender or the Senior Indebtedness Representative or other representative of such
Senior Lender intends to commence any Enforcement Action, then such Senior
Lender or the Senior Indebtedness Representative or other representative shall
use reasonable efforts to give notice thereof in writing to the Subordinated
Administrative Agent within one (1) Business Day after such Enforcement Action
is taken, but there shall be no liability for failure to deliver such notice.
10
Section 2.10 Reinstatement. Subject to the provisions of this Section 2.10,
the provisions of this Agreement shall remain in force and effect until the
termination of this Agreement pursuant to Section 5.02. To the extent any
payment of or distribution in respect of the Senior Indebtedness (whether by or
on behalf of the Borrower or any of its Subsidiaries, as proceeds of security or
enforcement of any right of set off or otherwise) is declared to be fraudulent
or preferential, set aside or required to be paid to the Borrower or any
Subsidiary or any receiver, trustee in bankruptcy, liquidating trustee, agent or
other similar person under any bankruptcy, insolvency, receivership, fraudulent
conveyance or similar law, then if such payment or distribution is recovered by,
or paid over to, the Borrower or any Subsidiary or such receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar Person, the Senior
Indebtedness or part thereof originally intended to be satisfied shall be deemed
to be reinstated and outstanding as if such payment had not occurred and the
provisions of this Agreement shall continue to be applicable in respect of said
reinstated Senior Indebtedness.
Section 2.11 Rights of Holders of the Senior Indebtedness. The holders of
the Senior Indebtedness may, at any time and from time to time, subject to the
terms of the Senior Indebtedness, without the consent of or notice to the
Subordinated Lenders or the Subordinated Indebtedness Representative or any
other representative of the Subordinated Lenders, without incurring
responsibility to the Subordinated Lenders and without impairing or releasing
the subordination or other benefits provided in this Agreement or the
obligations hereunder of the Subordinated Lenders to the holders of the Senior
Indebtedness, do any one or more of the following: (a) change the manner, place
or terms of payment or extend the time of payment of, or renew, increase (but
with respect to the principal amount of the Senior Indebtedness, not in excess
of the cap provided for in clause (a) of the definition of "Senior
Indebtedness"), alter or amend, Senior Indebtedness or any instrument evidencing
the same or any covenant or agreement under which Senior Indebtedness is
outstanding or secured or any liability of any obligor thereon; (b) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness to the extent currently permitted under
the terms of the Senior Credit Agreement, but any sale, exchange or release of
property pledged, mortgaged or otherwise securing Senior Indebtedness in
contravention of such currently existing provisions can only be made with the
prior written consent of the Subordinated Indebtedness Representative; (c)
settle or compromise any Senior Indebtedness or any liability of any obligor
thereon or release any Person liable in any manner for the payment of Senior
Indebtedness; and (d) waive any default under Senior Indebtedness and exercise
or refrain from exercising any rights against the Borrower, any Subsidiary or
any other Person. The foregoing provisions are not intended to permit a change
to the definition of "Senior Indebtedness".
Section 2.12 Modification of Subordinated Obligations. The Borrower, the
Subordinated Administrative Agent, and the Subordinated Lenders agree that
without the prior written consent of the Senior Indebtedness Representative and
the Required Senior Lenders, they will not renew, extend, modify or amend the
Subordinated Credit Agreement or any of the instruments or documents relating to
the Subordinated Obligations to (i) increase the maximum principal amount of the
debt to be advanced or outstanding under the Subordinated Credit Agreement to
more than $50,000,000 (other than increases in principal resulting from the
capitalization of interest, fees, expenses or indemnities), (ii) except in
connection with the imposition of a default rate of interest in accordance with
the terms of the Subordinated Loan Documents and increases that require payment
of the interest with respect to such increase only in kind and not in cash,
11
securities or other property, increase the interest rate by more than two
percent (2%) per annum, (iii) change the maturity date, (iv) increase the
frequency or amount of mandatory repayments due pursuant to the Subordinated
Loan Documents, (v) increase the frequency of or change to be earlier in the
calendar quarter the dates upon which payments of interest on the Subordinated
Obligations are due, (vi) change or add any event of default or any covenant
under or with respect to the Subordinated Obligations, (vii) change any
redemption or prepayment provisions of the Subordinated Obligations, (viii)
subordinate the Subordinated Obligations to any other indebtedness, or (ix)
change or amend any other term of the Subordinated Loan Documents if such change
or amendment would result in a Senior Indebtedness Default, increase the
obligations of the Borrower or any guarantor of the Subordinated Indebtedness or
confer additional material rights on Subordinated Lender or any other holder of
the Subordinated Indebtedness in a manner adverse to the Borrower unless with
respect to the foregoing clause (vi) such change or amendment is necessary to
maintain the same relative position with respect to a corresponding provision of
any Senior Loan Document.
Section 2.13 Amendments. No amendment of this Agreement or the definitions
used in this Agreement, or which would have the effect of modifying this
Agreement or the definitions used in this Agreement, shall be effective unless
it is in writing and complies with Section 5.03.
Section 2.14 Identity of Subordinated Lenders and Senior Lenders for Notice
Purposes.
(a) For purposes of any notice required or permitted to be given
hereunder by the holders of the Senior Indebtedness or the Senior Indebtedness
Representative to the Subordinated Lenders, or any of them, the holders of the
Senior Indebtedness and the Senior Indebtedness Representative shall be entitled
to rely, conclusively, on the identity and address of each Subordinated Lender
as set forth in the Subordinated Credit Agreement or as otherwise set forth in
the most recent notice received by the Senior Indebtedness Representative from a
Subordinated Lender referring to the Subordinated Credit Agreement for purposes
of providing the identity and address of each Subordinated Lender. The
Subordinated Lenders agree that any notice required to be given to the
Subordinated Lenders shall be effective if such notice is given to the
Subordinated Indebtedness Representative or other representative of the
Subordinated Lenders. For so long as the Subordinated Obligations are
outstanding, the Subordinated Lenders agree to designate and maintain an agent
or other representative for such purposes.
(b) For purposes of any notice required or permitted to be given
hereunder by the holders of the Subordinated Obligations or the Subordinated
Administrative Agent to the Senior Lenders, or any of them, the holders of the
Subordinated Obligations and the Subordinated Administrative Agent shall be
entitled to rely, conclusively, on the identity and address of each Senior
Lender as set forth in the Senior Credit Agreement or as otherwise set forth in
the most recent notice received by the Subordinated Administrative Agent from a
Senior Lender referring to the Senior Credit Agreement for purposes of providing
the identity and address of each Senior Lender. The Senior Lenders agree that
any notice required to be given to the Senior Lenders shall be effective if such
notice is given to the Senior Indebtedness Representative or other
representative of the Senior Lenders. For so long as the Senior Indebtedness is
outstanding, the Senior Lenders agree to designate and maintain an agent or
other representative for such purposes.
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Section 2.15 Liens.
(a) All Liens granted by the Borrower, or, if applicable, any
Guarantor, which at any time secure the Subordinated Credit Agreement, any
Subordinated Note or any other Subordinated Loan Document are hereby made, and
will at all times prior to the Payment in Full of Senior Indebtedness be,
subject and subordinate to all Liens granted by the Borrower or any Guarantor
which at any time secure the Senior Indebtedness, which subordination shall be
effective whether or not all such Liens securing Senior Indebtedness have been
properly recorded, filed and otherwise perfected prior to all such Liens
securing any Subordinated Note and regardless of the relative priority of such
Liens as determined without regard to this Agreement. The mortgages included in
the Senior Loan Documents do (and other mortgages, security agreements and
similar Senior Loan Documents may) describe the indebtedness secured thereby in
a manner which might include indebtedness other than the Senior Indebtedness.
For so long as any Subordinated Note is outstanding, as between the Subordinated
Lenders and the holders of the Senior Indebtedness, only the Senior Indebtedness
shall be deemed to be secured by any Liens granted under the Senior Loan
Documents.
(b) Each Subordinated Lender agrees that it will not initiate, join in
or prosecute any claim, action or other proceeding challenging the validity or
enforceability of the Senior Indebtedness or the Liens securing the Senior
Indebtedness. Furthermore, each Subordinated Lender agrees that if the Senior
Indebtedness Representative shall take any Enforcement Action respecting any
collateral under the Senior Indebtedness, the Subordinated Lenders will not
enjoin or otherwise interfere with such Enforcement Action.
(c) The Subordinated Indebtedness Representative agrees to promptly
release all Liens granted by the Borrower, or, if applicable, any Guarantor,
which at any time secure the Subordinated Credit Agreement, any Subordinated
Note or any other Subordinated Loan Document if such release is authorized by
the terms of the Senior Loan Documents.
Section 2.16 Legend.
(a) Each Subordinated Note shall be conspicuously inscribed with a
legend substantially in the form and substance as follows:
PAYMENT OF THIS INSTRUMENT SHALL, TO THE EXTENT SET
FORTH IN THE INTERCREDITOR AND SUBORDINATION AGREEMENT
DATED JANUARY 31, 2008 BY AND AMONG SOCIETE GENERALE, AS
SENIOR ADMINISTRATIVE AGENT, SOCIETE GENERALE, AS
SUBORDINATED ADMINISTRATIVE AGENT AND ABRAXAS ENERGY
PARTNERS, L.P., BE SUBORDINATE AND JUNIOR IN RIGHT OF
PAYMENT TO THE PRIOR PAYMENT IN FULL OF ALL SENIOR
INDEBTEDNESS, THE PROVISIONS OF SUCH INTERCREDITOR
AGREEMENT BEING INCORPORATED HEREIN AND BY THIS
REFERENCE BEING MADE A PART HEREOF.
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(b) The Borrower and each Subordinated Lender or the Subordinated
Indebtedness Representative or other representative of the Subordinated Lenders
shall cause each mortgage, security agreement and other instrument securing all
or any part of the Subordinated Obligations to be conspicuously inscribed with a
legend substantially in the form and substance as follows:
ALL LIENS GRANTED BY, AND THE INDEBTEDNESS SECURED BY,
THIS INSTRUMENT SHALL, TO THE EXTENT SET FORTH IN THE
INTERCREDITOR AND SUBORDINATION AGREEMENT JANUARY 31,
2008 BY AND AMONG SOCIETE GENERALE, AS SENIOR
ADMINISTRATIVE AGENT, SOCIETE GENERALE, AS SUBORDINATED
ADMINISTRATIVE AGENT AND ABRAXAS ENERGY PARTNERS, L.P.,
BE SUBORDINATE AND JUNIOR TO ALL LIENS GRANTED BY
GRANTOR TO SECURE THE SENIOR INDEBTEDNESS REGARDLESS OF
THE RELATIVE PRIORITY OF SUCH LIENS, SUCH INTERCREDITOR
AGREEMENT BEING INCORPORATED HEREIN AND BY THIS
REFERENCE BEING MADE A PART HEREOF.
Section 2.17 Successors and Assigns. Each Subordinated Lender acknowledges
and agrees that the provisions of this Agreement are, and are intended to be, an
inducement and a consideration to each holder of the Senior Indebtedness to
make, extend and continue the Senior Indebtedness, and each holder of the Senior
Indebtedness shall be deemed conclusively to have relied upon the provisions of
this Agreement in permitting the Borrower to incur the Subordinated Obligations
and in making, extending, continuing and/or acquiring such Senior Indebtedness.
This Agreement shall pass to and be fully binding upon the successors and
assigns of each Subordinated Lender and shall inure to the benefit of the
present and future holders of the Senior Indebtedness and the Senior
Indebtedness Representative and their respective successors and assigns
(including without limitation any Person refinancing any Senior Indebtedness).
Section 2.18 Rights of Subordinated Lenders as Unsecured Creditors. Except
as otherwise provided herein, in any Insolvency Proceeding, the Subordinated
Indebtedness Representative and the Subordinated Lenders may exercise their
respective rights and remedies as unsecured creditors against the Borrower and
any Guarantor in accordance with the Subordinated Loan Documents and applicable
law; provided that any payment received or judgment Lien obtained and all rights
and remedies in respect of any such payment or judgment Lien obtained by the
Subordinated Indebtedness Representative or any Subordinated Lender shall be
subject in all respects to the terms of this Agreement.
ARTICLE III
RELIANCE; WAIVERS; ETC.
Section 3.01 Reliance. The Senior Loan Documents are deemed to have been
executed and delivered, and all extensions of credit thereunder are deemed to
have been made or incurred, in reliance upon this Agreement. The Subordinated
Administrative Agent expressly waives all notice of the acceptance of and
reliance on this Agreement by the Senior Lenders.
14
Section 3.02 No Warranties or Liability. The Subordinated Administrative
Agent and the Senior Administrative Agent acknowledge and agree that neither has
made any representation or warranty with respect to the execution, validity,
legality, completeness, collectibility or enforceability of any Senior Loan
Document. Except as otherwise provided in this Agreement, the Subordinated
Administrative Agent and the Senior Administrative Agent will be entitled to
manage and supervise their respective extensions of credit to the Borrower in
accordance with law and their usual practices, modified from time to time as
they deem appropriate.
Section 3.03 No Waivers. Except as provided in Section 5.03, no right or
benefit of any party hereunder shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of such party or any other
party hereto or by any noncompliance by the Borrower or any of its Subsidiaries
with the terms and conditions of any of the Senior Loan Documents.
ARTICLE IV
OBLIGATIONS UNCONDITIONAL
Section 4.01 Senior Indebtedness Unconditional. All rights of the Senior
Administrative Agent and the Senior Lenders hereunder, and all agreements and
obligations of each of the Subordinated Administrative Agent, Subordinated
Lenders, the Borrower and the Guarantors under the Senior Loan Documents (to the
extent applicable) hereunder, shall remain in full force and effect irrespective
of:
(a) any lack of validity or enforceability of any Senior Loan Document;
(b) any change in the time, place or manner of payment of, or in any
other term of, all or any portion of the Senior Indebtedness, or any amendment,
waiver or other modification, whether by course of conduct or otherwise, or any
refinancing, replacement, refunding or restatement of any Senior Loan Document;
(c) prior to the Payment in Full of Senior Indebtedness, and except as
provided in Section 2.11(b), any exchange, release, voiding, avoidance or
non-perfection of any security interest in any collateral, or any release,
amendment, waiver or other modification, whether by course of conduct or
otherwise, or any refinancing, replacement, refunding or restatement of all or
any portion of the Senior Indebtedness or any guarantee thereof; or
(d) any other circumstances that otherwise might constitute a defense
available to, or a discharge of, (i) the Borrower or any Guarantor in respect of
the Senior Indebtedness or (ii) the Subordinated Indebtedness Representative,
any Subordinated Lender, the Borrower or any Guarantor, to the extent
applicable, in respect of this Agreement.
ARTICLE V
MISCELLANEOUS
Section 5.01 Conflicts. In the event of any conflict between the provisions
of this Agreement and the provisions of any Senior Loan Document or the
Subordinated Loan Documents, the provisions of this Agreement shall govern.
15
Section 5.02 Continuing Nature of Provisions; Termination. This Agreement
shall continue to be effective, and shall not be revocable by any party hereto,
until, but, subject to Section 2.10, shall automatically terminate and be of no
further force or effect on, the earlier to occur of (i) the date upon which the
Senior Indebtedness has been paid in full in cash, all commitments of any holder
of Senior Indebtedness to make loans or extensions of credit have terminated,
and all letters of credit issued by any holder of Senior Indebtedness have
expired, terminated or been fully collateralized in cash and (ii) to the extent
not in violation of this Agreement, the date that the Subordinated Obligations
have been paid in full. This is a continuing agreement and the Senior Lenders
and the Subordinated Lenders may continue, at any time and without notice to the
other parties hereto, to extend credit and other financial accommodations, lend
monies and provide indebtedness to, or for the benefit of, Borrower or any
Guarantor on the faith hereof.
Section 5.03 Amendments; Waivers. No amendment or modification of any of
the provisions of this Agreement shall be effective unless the same shall be in
writing and signed by the Senior Indebtedness Representative, the Subordinated
Indebtedness Representative and, only if the rights or duties of the Borrower or
any Guarantor are directly affected thereby, such Person.
Section 5.04 Information Concerning Financial Condition of the Borrower.
The Subordinated Administrative Agent and the Senior Administrative Agent each
hereby assume responsibility for keeping itself informed of the financial
condition of the Borrower and each of the Guarantors and all other circumstances
bearing upon the risk of nonpayment of the Senior Indebtedness or the
Subordinated Obligations. The Subordinated Administrative Agent and the Senior
Administrative Agent hereby agree that no party shall have any duty to advise
any other party of information known to it regarding such condition or any such
circumstances. In the event the Subordinated Administrative Agent or the Senior
Administrative Agent, in its sole discretion, undertakes at any time or from
time to time to provide any information to any other party to this Agreement, it
shall be under no obligation (1) to provide any such information to such other
party or any other party on any subsequent occasion, (2) to undertake any
investigation not a part of its regular business routine, or (3) to disclose any
other information.
Section 5.05 Governing Law. This Agreement shall be construed in accordance
with and governed by the law of the State of New York, except as otherwise
required by mandatory provisions of law and except to the extent that remedies
provided by the laws of any jurisdiction other than the State of New York are
governed by the laws of such jurisdiction.
Section 5.06 Submission to Jurisdiction; Waiver of Jury Trial.
(a) Submission to Jurisdiction. Each party hereto hereby irrevocably
and unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the courts of the State of New York sitting in New York City and
of the United States District Court for the Southern District of the State of
New York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State court or, to the fullest extent permitted
16
by applicable law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that any
Senior Lender may otherwise have to bring any action or proceeding relating to
this Agreement or any Senior Loan Documents against the Borrower or any
Guarantor or its properties in the courts of any jurisdiction.
(b) The Borrower and the Subordinated Administrative Agent hereby
irrevocably and unconditionally waive to the fullest extent permitted by
applicable law (x) any objection they may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to this
Agreement in any court referred to in paragraph (a) of this Section 5.06 and (y)
the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 5.07. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
(d) EACH PARTY HERETO HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (i) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. EACH PARTY HEREBY
AGREES AND CONSENTS THAT THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
Section 5.07 Notices. Unless otherwise specifically provided herein, any
notice or other communication herein required or permitted to be given shall be
in writing and may be personally served, telecopied, or sent by overnight
express courier service or United States mail and shall be deemed to have been
given when delivered in person or by courier service, upon receipt of a telecopy
or five (5) days after deposit in the United States mail (certified, with
postage prepaid and properly addressed). For the purposes hereof, the addresses
of the parties hereto (until notice of a change thereof is delivered as provided
in this Section) shall be as set forth below each party's name on the signature
pages hereof, or, as to each party, at such other address as may be designated
by such party in a written notice to all of the other parties.
17
Section 5.08 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of each of the parties hereto and each of the Senior
Lenders and Subordinated Lenders and their respective successors and assigns,
and nothing herein is intended, or shall be construed to give, any other Person
any right, remedy or claim under, to or in respect of this Agreement or any
collateral. All references to any Person shall include such Person as
debtor-in-possession and any receiver or trustee for such Person in any
Insolvency Proceeding.
Section 5.09 Headings. Section headings used herein are for convenience of
reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this Agreement.
Section 5.10 Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; the invalidity of a particular provision in a
particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
Section 5.11 Counterparts; Integration; Effectiveness. This Agreement may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective
as delivery of a manually executed counterpart of this Agreement. This Agreement
shall become effective when it has been executed by each party hereto.
Section 5.12 Consent to Incurrence of Senior Indebtedness. Notwithstanding
any provision of the Subordinated Loan Documents to the contrary, the
Subordinated Administrative Agent and each of the Subordinated Lenders consents
to the incurrence of the Senior Indebtedness in amounts up to the caps on the
principal amount thereof set forth in the definition of Senior Indebtedness.
Section 5.13 Senior Administrative Agent Acting as Bailee and Agent. The
Senior Administrative Agent may from time to time, in order to perfect a
security interest in certain collateral securing the Senior Indebtedness, hold
possession of stock certificates or other collateral in which a security
interest can be perfected by possession or may enter into a control agreement
with respect to collateral in which a security interest can be perfected by
having control. For purposes of perfecting the junior and subordinate lien of
the Subordinated Lenders in such collateral, the Senior Administrative Agent
agrees to also hold such certificates or other collateral as agent and bailee
for the Subordinated Lenders, subject to the provisions of this Agreement.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Senior Administrative Agent shall not have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary relationship with any
Subordinated Lender or the Subordinated Administrative Agent, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Senior Administrative
Agent.
Section 5.14 Purchase of Senior Indebtedness. The Senior Indebtedness
Representative, on behalf of itself and the Senior Lenders (and, where
appropriate with regard to the Eligible Hedge Contracts, their respective
18
Affiliates), and the Borrower hereby agree with the Subordinated Lenders that,
if the Senior Indebtedness Representative delivers a Payment Default Notice to
the Subordinated Administrative Agent or the Subordinated Lenders, then the
Subordinated Lenders may (but shall not be obligated to) purchase the Senior
Indebtedness and all of the rights, titles and interests of the Senior
Indebtedness Representative and the Senior Lenders under the Senior Loan
Documents, by giving notice of Subordinated Lenders' intent to buy within ten
days after delivery of such Payment Default Notice and consummating such sale
within thirty days after the delivery of such Payment Default Notice for a price
in immediately available funds equal to the unpaid principal of and accrued
interest on the Senior Indebtedness, all other amounts then due to the Senior
Indebtedness Representative and the Senior Lenders under the Senior Loan
Documents and all unpaid amounts and termination payments due to the Senior
Lenders (and their respective Affiliates, where appropriate) of the Eligible
Hedge Contracts, all subject to documents reasonably acceptable to the Senior
Indebtedness Representative, the Senior Lenders and the Subordinated Lenders,
but without any necessity for any consent from the Borrower or any Guarantor.
[Signature Pages Begin on the Next Page]
19
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
SOCIETE GENERALE, as Senior
Administrative Agent for
and on behalf of the Senior
Lenders
By:______________________________________
Xxxxx Xxxxxxx
Director
Address for Notices:
Societe Generale
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Cameron Null
Telephone: 000-000-0000
Facsimile: 000-000-0000
E-Mail: xxxxxxx.xxxx@xxxxx.xxx
SOCIETE GENERALE, as Subordinated
Administrative Agent for and on behalf of
the Subordinated Lenders
By:______________________________________
Xxxxx Xxxxxxx
Director
Address for Notices:
Societe Generale
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Cameron Null
Telephone: 000-000-0000
Facsimile: 000-000-0000
E-Mail: xxxxxxx.xxxx@xxxxx.xxx
ABRAXAS ENERGY PARTNERS, L.P.
By: Abraxas General Partner, LLC,
its general partner
By:_____________________________________
Xxxxxxx X. Xxxxxxx
President and Chief Operating Officer
Address for Notices:
c/o Abraxas Energy Partners, L.P.
000 X. Xxxx 0000 Xxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Facsimile: 210-490-8816
