Exhibit 4.8
EXECUTION COPY
AMENDED AND RESTATED INTERCREDITOR AGREEMENT
THIS AMENDED AND RESTATED INTERCREDITOR AGREEMENT (as amended, modified,
supplemented, renewed, restated or replaced in writing from time to time, the
"Agreement") is made as of February 7, 2006, by and among Quest Resource
Corporation, a Nevada corporation and Quest Cherokee, LLC, a Delaware limited
liability company (the "Borrowers"), STP Cherokee, Inc., Quest Oil & Gas
Corporation, Quest Energy Service, Inc., Ponderosa Gas Pipeline Company, Inc.,
Producers Service, Incorporated, X-X Gas Gathering, LLC, Bluestem Pipeline, LLC
and Quest Cherokee Oilfield Service, LLC, (the "Guarantors"), Guggenheim
Corporate Funding, LLC, a Delaware limited liability company, in its capacity as
administrative agent, (in such capacity, the "Senior Administrative Agent") for
itself and for each of the lenders (the "Senior Secured Term Lenders") with
respect to senior secured term loans (the "Senior Secured Term Loans") and each
of the lenders (the "Senior Secured Revolving Lenders" and, with the Senior
Secured Term Lenders, the "Senior Secured Lenders") with respect to the senior
secured revolving loans (the "Senior Secured Revolving Loans") under the Senior
Secured Credit Agreement, as defined below (collectively, the "Senior Secured
Creditor"), Guggenheim Corporate Funding LLC, a Delaware limited liability
company as administrative agent (in such capacity, the "Second Lien
Administrative Agent"), for itself and for each of the lenders (the "Second Lien
Lenders") that is or becomes a party to the Second Lien Credit Agreement, as
defined below (collectively, the "Second Lien Creditor") and Guggenheim
Corporate Funding, LLC, a Delaware limited liability company, as collateral
agent (in such capacity, the "Collateral Agent" and collectively with the Senior
Administrative Agent and the Second Lien Administrative Agent, the "Agents") for
the Senior Secured Creditor, the Second Lien Creditor and the counterparties
with respect to Swap Agreements entered into by either Borrower or any of their
Subsidiaries ("Swap Counterparties"). The Senior Secured Revolving Lenders, the
Senior Secured Term Lenders and the Second Lien Lenders are hereafter referred
to as the "Lenders." BP Corporation North America Inc. is also a party to this
Agreement, solely for purposes of Section 3 hereof. Capitalized terms not
defined in this Agreement have the meanings given them in the Senior Secured
Credit Agreement. This Agreement amends and restates in its entirety that
certain Intercreditor Agreement dated as of November 14, 2005 (the "Original
Agreement") by and among the Borrowers, the Guarantors and the Agents.
RECITALS
WHEREAS, Senior Secured Creditor has made and is continuing to make credit
accommodations available to Borrowers pursuant to the terms and provisions of
the Senior Secured Credit Agreement (as defined below);
WHEREAS, Second Lien Creditor has made credit accommodations available to
Borrowers pursuant to the terms and provisions of a Second Lien Credit Agreement
(as defined below);
WHEREAS, as a condition for executing and entering into the Senior Secured
Credit Agreement, the Senior Secured Creditor required that the Second Lien
Creditor's liens against the Borrowers and the Guarantors be subordinated in
favor of Senior Secured Creditor's liens under the Senior Secured Credit
Agreement and that the Second Lien Creditor make the arrangements set forth
herein with respect to right to payment and claims against the Borrowers and the
Guarantors;
WHEREAS, the parties hereto entered into the Original Agreement in order
to accommodate the Senior Secured Creditor's conditions and obtain the direct
and indirect benefits to the Borrowers and the Second Lien Creditor resulting
from the Borrowers' and Senior Secured Creditor's execution of the Senior
Secured Credit Agreement and other Senior Secured Loan Documents; and
WHEREAS, in order to facilitate and administer the respective rights of
the Lenders with respect to the Collateral, Senior Administrative Agent, on
behalf of the Senior Secured Lenders, and Second Lien Administrative Agent on
behalf of the Second Lien Lenders, entered into the Original Agreement and
appointed Guggenheim Corporate Funding, LLC, as Collateral Agent under the
Security Documents to hold the Liens in trust for the benefit of the Senior
Secured Creditor, the Second Lien Creditor and the Swap Counterparties, subject
to the terms and conditions hereof.
WHEREAS, the Senior Secured Revolving Lenders, the Senior Secured Term
Lenders, the Swap Counterparties and the Second Lien Lenders desire to modify
and amend certain provisions set forth in the Original Agreement regarding their
respective rights and the rights of the Swap Counterparties in the Collateral
and the application of proceeds thereof;
WHEREAS, the parties hereto agree that the Original Agreement is hereby
amended and restated in its entirety and is of no further force and effect.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and the provisions
set forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
Section 1. Definitions. For purposes of this Agreement, (a) terms defined
in the introductory paragraphs and recitals to this Agreement have the meanings
set forth therein and (b) the following terms used herein shall have the
following meanings:
"Acceleration Notice" means a written notice from or on behalf of
the Senior Secured Indebtedness Representative to the Second Lien Lenders
or the Second Lien Administrative Agent or other representative designated
pursuant to Section 17 hereof that a Senior Secured Indebtedness
Acceleration shall have occurred and is continuing.
"Blockage Period" means, with respect to any Senior Secured
Indebtedness Acceleration, the period from and including the date of
receipt by the Second Lien Lenders or the Second Lien Administrative Agent
or other representative designated pursuant to Section 17 hereof of an
Acceleration Notice relating thereto until the first to occur of (a) the
date upon which the Senior Secured Indebtedness has been paid in full in
cash, all commitments of any holder of Senior Secured Indebtedness to make
loans or extensions of credit have terminated, and all letters of credit
issued by Senior Secured Creditor or any Affiliate thereof have expired,
terminated or been fully collateralized in cash, (b) the date on which the
Senior Secured Indebtedness Default which provides the basis for such
Acceleration Notice has been waived in writing by the applicable holder or
holders of the Senior Secured Indebtedness or an agent or representative
on their behalf, or has been cured, or has ceased to exist, or (c) the
date upon which the Second Lien Lenders or the Second Lien Administrative
Agent or other representative designated pursuant to Section 17 hereof
shall have received notice in writing of the termination of such Blockage
Period.
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"Collateral" shall mean any and all property which now constitutes
or hereafter will constitute collateral or other security for payment of
the Senior Secured Indebtedness pursuant to the Senior Secured Loan
Documents, all amounts payable under the Swap Agreements and/or Second
Lien Indebtedness pursuant to the Second Lien Loan Documents.
"Collateral Agent - Related Persons" means Collateral Agent,
together with its Affiliates, and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.
"Enforcement Action" means, with respect to any Second Lien
Indebtedness: any enforcement of any right or remedy including any
enforcement or foreclosure of Liens granted by the Borrowers or any of the
Guarantors to secure any or all of such Second Lien Indebtedness, any
enforcement or foreclosure of Liens on any capital stock or other equity
interests in either of the Borrowers or any of the Guarantors which may be
granted by either of the Borrowers or any of the Guarantors or any holder
of equity in either of the Borrowers to secure any or all of such Second
Lien Indebtedness, or any other efforts to collect proceeds from either of
the Borrowers' or any of the Guarantors' assets or properties (including
proceeds of production) to satisfy the Second Lien Indebtedness,
including, without limitation, the commencement, or the joining with any
other creditor of either of the Borrowers or any Guarantor in the
commencement of any Insolvency Proceeding against either of the Borrowers
or any of the Guarantors; provided, that none of the following shall
constitute an Enforcement Action: (a) acceleration of any of the Second
Lien Indebtedness following acceleration of any of the Senior Indebtedness
(provided that such acceleration of Senior Indebtedness has not previously
been rescinded) or (b) actions by the Second Lien Creditor to obtain
possession of or receive Reorganization Securities.
"Enforcement Notice" means a written notice which states that a
default or an event of default under any provision of the Second Lien
Indebtedness has occurred and that Second Lien Creditor desires to take
enforcement action as a consequence thereof.
"Guarantors" shall mean each of the current Subsidiaries and any
future Subsidiary of the Borrowers and any other Person which at any time
guarantees the Senior Secured Indebtedness and the Second Lien
Indebtedness whether now or in the future.
"Indemnified Liabilities" means any and all liabilities,
obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses and disbursements (including reasonable
attorney's costs and expenses) of any kind or nature whatsoever which may
at any time be imposed on, incurred by or asserted against any Collateral
Agent-Related Person in any way relating to or arising out of or in
connection with (a) the execution, delivery, enforcement, performance or
administration of this Agreement or the Security Documents, (b) the use or
proposed use of the proceeds of any Collateral, or (c) any actual or
prospective claim, litigation, investigation or proceeding relating to any
of the foregoing, whether based on contract, tort or any other theory
(including any investigation of, preparation for, or defense of any
pending or threatened claim, investigation, litigation or proceeding).
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"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.
"Lien" shall mean any interest in Property securing an obligation
owed to, or a claim by, a Person other than the owner of the Property,
whether such interest is based on the common law, statute or contract, and
whether such obligation or claim is fixed or contingent, and including but
not limited to (i) the lien or security interest arising from a mortgage,
encumbrance, pledge, security agreement, conditional sale or trust receipt
or a lease, consignment or bailment for security purposes or (ii)
production payments and the like payable out of Oil and Gas Properties.
The term "Lien" shall include reservations, exceptions, encroachments,
easements, rights of way, covenants, conditions, restrictions, leases and
other title exceptions and encumbrances affecting Property. For the
purposes of this Agreement, the Borrowers or any Guarantor shall be deemed
to be the owner of any Property which it has acquired or holds subject to
a conditional sale agreement, or leases under a financing lease or other
arrangement pursuant to which title to the Property has been retained by
or vested in some other Person in a transaction intended to create a
financing.
"Lien Enforcement Action" shall mean any action, whether legal,
equitable, judicial, non-judicial, or otherwise, to enforce any Lien now
or in the future securing all or any indebtedness or other obligations,
including, without limitation, exercise of any assignments of production
or the right to receive proceeds thereof, division orders or letters in
lieu of division orders, any offset, repossession, foreclosure, public
sale, private sale, or retention of all or any part of an asset for any
indebtedness or other obligations.
"Loan Parties" shall mean, individually and collectively, Borrowers,
Guarantors and any other Person (other than the Senior Secured Creditor,
Swap Counterparties and the Second Lien Creditor) which is at any time a
party to any Senior Secured Loan Documents or Second Lien Loan Documents
or individually, a "Loan Party".
"Non-Payment Default" means the occurrence of any event under any
Senior Secured Loan Document, not constituting a Payment Default, which
gives the holder(s) of such Senior Secured Indebtedness, or an agent or
representative acting on behalf of such holder(s), the right to cause the
maturity of such Senior Secured 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.
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"Non-Payment Default Notice" means a written notice from or on
behalf of the Senior Secured 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."
"Notice of Default" means a Non-Payment Default Notice and/or a
Payment Default Notice.
"Payment Default" means a default by the Borrowers or any Guarantor
in the payment of any amount owing with respect to the Senior Secured
Indebtedness, whether with respect to principal, interest, premium, letter
of credit reimbursement 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.
"Payment Default Notice" means a written notice from or on behalf of
the Senior Secured Indebtedness Representative that a Payment Default with
respect to Senior Secured Indebtedness has occurred and is continuing, and
specifically designates such notice as a "Payment Default Notice".
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, or other
entity.
"Proportionate Share" means at any time with respect to any Lender,
the amount equal to (a) the amount of the following owed to such Lender
and/or such Lender's Affiliates, divided by (b) without duplication the
sum of: (i) the principal amount of Senior Secured Indebtedness then
outstanding, including the L/C Exposure, plus (ii) the unused portion of
the Commitments of the Senior Secured Lenders, plus (iii) the principal
amount of the Second Lien Indebtedness then outstanding.
"Proceeds" shall have the meaning assigned to it under the UCC, and,
in any event, shall include, but not be limited to (a) any and all
proceeds of any insurance, indemnity, warranty, letter of credit or
guaranty or collateral security payable to any grantor from time to time
with respect to any of the Collateral, (b) any and all payments (in any
form whatsoever) made or due and payable to the owner of the Collateral
from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Collateral
by any governmental body, authority, bureau or agency (or any Person
acting under color of governmental authority) and (c) any and all other
amounts from time to time paid or payable under or in connection with any
of the Collateral.
"Reorganization Securities" means debt or equity 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 Secured Indebtedness outstanding at the time
of the issuance thereof (including any refinancing of Senior Secured
Indebtedness pursuant to an Insolvency Proceeding) and to the payment of
all debt or equity securities issued in exchange for such Senior Secured
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 Second Lien Lenders or
otherwise); 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.
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"Required Lenders" means (i) Lenders holding, in the aggregate,
Proportionate Shares exceeding 50% and (ii) the Senior Administrative
Agent.
"Required Second Lien Lenders" means (i) Lenders holding, in the
aggregate, outstanding Second Lien Indebtedness representing more than 50%
of all outstanding Second Lien Indebtedness and (ii) the Second Lien
Administrative Agent.
"Required Senior Secured Revolving Lenders" means (i) Lenders
holding commitments to make Senior Secured Revolving Loans that, in the
aggregate, exceed 50% of the sum of all commitments to make Senior Secured
Revolving Loans (or if such commitments have been terminated, Lenders
holding Senior Secured Revolving Loans that, in the aggregate, exceed 50%
of the sum of all outstanding Senior Secured Revolving Loans) and (ii) the
Senior Administrative Agent.
"Required Senior Secured Term Loan Lenders" means (i) Lenders
holding outstanding Senior Secured Term Loans plus unused Commitments to
make Senior Secured Term Loans that, in the aggregate, exceed 50% of the
sum of all commitments to make Senior Secured Term Loans and (ii) the
Senior Administrative Agent.
"Second Lien Credit Agreement" means that certain Second Lien Term
Loan Agreement dated as of November 14, 2005 among the Borrowers,
Guggenheim Corporate Funding, LLC, as administrative agent and the
financial institutions listed therein from time to time as Second Lien
Lenders; as from time to time renewed, extended, amended, supplemented, or
restated, and any agreements representing the refinancing, replacement, or
substitution in whole or in part of the loans made or incurred under such
Second Lien Credit Agreement.
"Second Lien Creditor" means, individually and collectively, Second
Lien Creditor and all other present or future holders of all or part of
the Second Lien Indebtedness, and their respective successors and assigns.
"Second Lien Indebtedness" shall mean and include all indebtedness,
obligations and liabilities of any Loan Party under the Second Lien Loan
Documents, including, without limitation, all principal and interest
(including post-petition interest accrued subsequent to, and interest that
would have accrued but for, the filing of any petition under any
bankruptcy, insolvency or similar law), and other amounts payable under
the Second Lien Loan Documents.
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"Second Lien Indebtedness Default" means the occurrence of any event
under any Second Lien Loan Document which gives the Second Lien Creditor,
or an agent or representative acting on behalf thereof, the right under
the terms of the Second Lien Credit Agreement to cause the maturity of the
Second Lien 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.
"Second Lien Lenders" means all Persons which now or hereafter
constitute a "Lender" under the Second Lien Credit Agreement and their
respective successors and assigns, and all Person refinancing any Second
Lien Indebtedness and their respective successors and assigns.
"Second Lien Loan Documents" means, collectively, (a) the Second
Lien Credit Agreement, (b) the Second Lien Notes, if requested, and any
other note, bond or other instrument evidencing Second Lien Indebtedness,
(c) all mortgages, security agreements, pledge agreements or financing
statements evidencing, creating or perfecting any Lien to secure the
Second Lien Credit Agreement and the Second Lien Notes, if requested, in
any way, (d) all guarantees thereof, (e) all other documents, instruments
or agreements relating to the Second Lien Credit Agreement or the Second
Lien Notes now or hereafter executed or delivered by any Loan Party,
including without limitation each of the other the "Second Lien Loan
Documents", and (f) all renewals, extensions, amendments, modifications or
restatements of the foregoing.
"Second Lien Notes" means each promissory note requested by a Second
Lien Lender and issued under the Second Lien Credit Agreement evidencing
the term loans made pursuant to the term thereof, as from time to time
renewed, extended, amended, supplemented, or restated, and any agreements
representing the refinancing, replacement, or substitution in whole or in
part thereof.
"Secured Parties" means the Senior Administrative Agent, the Second
Lien Administrative Agent, each Swap Counterparty, each of the Senior
Secured Lenders and each of the Second Lien Lenders.
"Security Documents" means all security agreements, pledge
agreements, deeds of trust, mortgages, financing statements, continuation
statements, extension agreements and other agreements or instruments now,
heretofore, or hereafter delivered by any Loan Party to secure the Senior
Secured Indebtedness, amounts payable under the Swap Agreements and/or the
Second Lien Indebtedness.
"Senior Secured Credit Agreement" means that certain Amended and
Restated Senior Credit Agreement dated as of even date herewith among the
Borrowers, Guggenheim Corporate Funding, LLC, as administrative agent and
the financial institutions listed therein from time to time as Senior
Secured Lenders, as from time to time renewed, extended, amended,
supplemented, or restated, and any agreements representing the
refinancing, replacement, or substitution in whole or in part of the loans
and letter of credit liabilities made or incurred under such Senior
Secured Credit Agreement.
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"Senior Secured Creditor" means, individually and collectively,
Senior Secured Creditor and all other present or future holders of all or
part of the Senior Secured Indebtedness, and their respective successors
and assigns.
"Senior Secured Indebtedness" means and includes (a) all principal
indebtedness for loans now outstanding or hereafter incurred, the undrawn
portion of all Commitments (as defined in the Senior Secured Credit
Agreement) and all letter of credit reimbursement obligations now existing
or hereafter arising, under the Senior Secured Credit Agreement, provided
that the aggregate outstanding principal amount of Senior Secured
Indebtedness under this clause (a) shall not exceed $100,000,000 at any
time, and provided further, that if the aggregate principal amount of
Senior Secured Indebtedness (constituting principal and letter of credit
reimbursement obligations) shall exceed $100,000,000, then the
subordination of Liens with respect to the Second Lien Indebtedness, as
contemplated by this Agreement to the Senior Secured Indebtedness of
$100,000,000 or less shall not be impaired, (b) all amounts now or
hereafter owing to any Swap Counterparty, (c) all interest accruing on the
Senior Secured Indebtedness described in the preceding clauses (a) and
(b), and (d) all other monetary obligations (whether now outstanding or
hereafter incurred) for which either of the Borrowers or any of the
Guarantors is responsible or liable as obligor, guarantor or otherwise
under or pursuant to any of the Senior Secured 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 Secured Lenders)
together with interest on the foregoing to the extent provided for in the
Senior Secured Loan Documents. The interest described in the preceding
clause (c) and the monetary obligations described in the preceding clause
(d) include, without limitation, all interest and monetary obligations
accruing after the commencement of any Insolvency Proceeding under the
terms of the Senior Secured Loan Documents whether or not such interest or
monetary obligations constitute an allowed claim in any such Insolvency
Proceeding.
"Senior Secured Indebtedness Acceleration" means, with respect to
the Senior Secured Indebtedness, that the holder or holders of such Senior
Secured Indebtedness, or an agent or representative on behalf of such
holder or holders, have caused the maturity of such Senior Secured
Indebtedness to be accelerated or the Senior Secured Indebtedness has
otherwise been accelerated.
"Senior Secured Indebtedness Default" means a Payment Default or
a Non-Payment Default.
"Senior Secured Indebtedness Representative" means (a) initially,
the Senior Administrative Agent or (b) such other Person selected by the
Majority Lenders (as such term is defined in the Senior Secured Credit
Agreement) to replace the Senior Administrative Agent or the then Senior
Indebtedness Representative.
"Senior Secured Lenders" means all Persons which now or hereafter
constitute "Lenders" under the Senior Secured Credit Agreement and their
respective successors and assigns, and all Persons refinancing any Senior
Secured Indebtedness and their respective successors and assigns.
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"Senior Secured Loan Documents" means, collectively, (a) the Senior
Secured Credit Agreement and the Swap Agreements, (b) any note, bond or
other instrument evidencing Senior Secured Indebtedness, (c) all
mortgages, security agreements, pledge agreements or financing statements
evidencing, creating or perfecting any Lien to secure the Senior Secured
Indebtedness in any way, (d) all guarantees of the Senior Secured
Indebtedness, (e) all other documents, instruments or agreements relating
to the Senior Secured Indebtedness now or hereafter executed or delivered
by any Loan Party, including without limitation each of the other the
"Loan Documents" as such term is defined in the Senior Secured Credit
Agreement, and (f) all renewals, extensions, amendments, modifications or
restatements of the foregoing.
"Standstill Period" means the period beginning with the date of
delivery of the notice by the Second Lien Lenders or the Second Lien
Administrative Agent as set forth in Section 12(a) hereof and ending on
the earliest of (a) the date when the Second Lien Indebtedness Default
giving rise to such Standstill Period has been cured or waived in writing,
(b) the date upon which the Senior Secured Indebtedness has been paid in
full in cash, all commitments of any holder of Senior Secured Indebtedness
to make loans or extensions of credit have terminated, and all letters of
credit issued by Senior Secured Creditor or any Affiliate thereof have
expired, terminated or been fully collateralized in cash, (c) the date on
which the Senior Secured Indebtedness shall have been declared due and
payable prior to its stated maturity and (d) the date upon which any
Insolvency Proceeding is commenced; provided that the total duration of
all Standstill Periods shall not exceed 120 days in any consecutive 365
day period.
"Subsidiary" means: (a) any Person of which at least a majority of
the outstanding Equity Interests having by the terms thereof ordinary
voting power to elect a majority of the board of directors, managers or
other governing body of such Person (irrespective of whether or not at the
time Equity Interests of any other class or classes of such Person shall
have or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned or controlled by
the Borrowers or one or more of their respective Subsidiaries or by one of
the Borrowers or one or more of its Subsidiaries and (b) any partnership
of which one of the Borrowers or any of its Subsidiaries is a general
partner. Unless otherwise indicated herein, each reference to the term
"Subsidiary" shall mean a Subsidiary of one of the Borrowers.
"Swap Agreement" means, at any date of determination, any agreement
entered into by either Borrower or any of their Subsidiaries that is in
full force and effect with respect to any swap, forward, future or
derivative transaction, collar or option or similar agreement, whether
exchange traded, "over-the-counter" or otherwise, involving, or settled by
reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or
measures of economic, financial or pricing risk or value or any similar
transaction or any combination of these transactions; provided that no
phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrowers or their Subsidiaries shall be a Swap
Agreement.
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"Swap Counterparty" means any party to a Swap Agreement other than
Borrower or any Subsidiary of Borrower and, initially shall be BP
Corporation North America Inc.
"UCC" shall mean the Uniform Commercial Code as in effect from time
to time in the State of New York.
Section 2. General. (a) Notwithstanding any provision of the Second Lien
Loan Documents, the Liens securing the Second Lien Indebtedness shall be
subordinate and junior to the Liens securing all or any part of any of the
Senior Secured Indebtedness to the extent and in the manner provided in this
Agreement and each Second Lien Lender, by acceptance thereof whether upon
original issuance, transfer, assignment or exchange, agrees to be bound by the
provisions of this Agreement.
(b) Notwithstanding any provision of the Senior Secured Loan Documents,
the Liens securing all or any part of the Senior Secured Term Loans shall be
subordinate and junior to the Liens securing the Senior Secured Revolving Loans
to the extent and in the manner provided in this Agreement and each Senior
Secured Term Lender, by acceptance thereof whether upon original issuance,
transfer, assignment or exchange, agrees to be bound by the provisions of this
Agreement.
(c) At any time when an event of default has occurred and is continuing
under the terms of any Swap Agreement, the Swap Counterparty under that Swap
Agreement may deliver a written notice to that effect to the Senior
Administrative Agent and/or the Collateral Agent.
Section 3. Collateral Agent Appointment. Powers, Duties and Immunities.
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(a) Pursuant to the Security Documents executed by, or in favor of, the
Senior Administrative Agent, the Loan Parties have granted Liens in favor of the
Senior Administrative Agent in the Collateral. Pursuant to the Security
Documents executed by, or in favor of, Second Lien Administrative Agent, the
Loan Parties have granted Liens in favor of the Second Lien Administrative Agent
in the Collateral. Each of the Senior Secured Creditor, the Second Lien Creditor
and the Swap Counterparty that is a signatory hereto hereby irrevocably appoints
and authorizes Guggenheim Corporate Funding, LLC to act as Collateral Agent
under the Security Documents on the terms and conditions set forth in this
Agreement and Guggenheim Corporate Funding, LLC, hereby accepts such appointment
and shall have all of the rights and obligations of the Collateral Agent
hereunder and of the Senior Administrative Agent and the Second Lien
Administrative Agent under the Security Documents.
(b) Each Lender hereby authorizes Collateral Agent to do the following in
accordance with the terms of this Agreement and the Security Documents:
(i) to receive all documents and items to be furnished from time to
time to Collateral Agent, Senior Administrative Agent, Second Lien
Administrative Agent or any Lender under the Security Documents;
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(ii) to distribute to Senior Administrative Agent and Second Lien
Administrative Agent information, requests, documents, and other items
received from the Loan Parties and other Persons under the Security
Documents;
(iii) to execute and deliver to Borrowers and other Persons
requests, demands, notices, approvals, consents, waivers, and other
communications received from Senior Administrative Agent and Second Lien
Administrative Agent in connection with the Security Documents and
herewith subject to the terms and conditions set forth therein and herein;
(iv) to receive on behalf of Senior Administrative Agent and Second
Lien Administrative Agent any payment of monies paid to Collateral Agent
in accordance with this Agreement and the Security Documents, and to
distribute to Senior Administrative Agent and/or Second Lien
Administrative Agent for the account of the applicable Lenders in
accordance with the terms of this Agreement such monies so received by
such Senior Administrative Agent and/or Second Lien Administrative Agent;
(v) to act on behalf of Lenders and the Swap Counterparties at the
direction of Senior Administrative Agent and/or Second Lien Administrative
Agent to maintain the perfection and priority of the Liens created under
the Security Documents;
(vi) subject to the terms and conditions of the Security Documents
and this Agreement, to exercise on behalf of Senior Administrative Agent
all Lien Enforcement Actions and, subject to the terms and conditions of
this Agreement to exercise on behalf of Second Lien Administrative Agent
all Lien Enforcement Actions permitted hereunder; and
(vii) subject to the terms and conditions of the Security Documents
and this Agreement, to take such other actions as may be directed by
Senior Administrative Agent and/or Second Lien Administrative Agent as are
reasonably incident to any powers granted to Collateral Agent hereunder.
(c) Notwithstanding any provision to the contrary contained elsewhere
herein or in any Senior Secured Loan Document, Swap Agreement or Second Lien
Loan Document, the Collateral Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the
Collateral Agent have or be deemed to have any fiduciary relationship with any
Lender, Swap Counterparty or participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any Senior Secured Loan Document, Swap Agreement or Second Lien
Loan Document or otherwise exist against the Collateral Agent. Without limiting
the generality of the foregoing sentence, the use of the term "agent" herein
with reference to the Collateral Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties. The Lenders and the Swap Counterparties
irrevocably authorize the Collateral Agent, at its option and in its discretion,
to release any lien on or security interest in any Collateral (i) if the
property subject to such lien or security interest is permitted to be sold or
otherwise transferred pursuant to the Senior Secured Credit Agreement or such
lien is otherwise permitted to be released pursuant to the Senior Secured Loan
Documents and (ii) upon termination of and payment in full of all Senior Secured
Indebtedness and Second Lien Indebtedness (other than contingent indemnification
obligations).
11
(d) The Collateral Agent may execute any of its duties under this
Agreement or the Security Documents by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel and other
consultants or experts concerning all matters pertaining to such duties. The
Collateral Agent shall not be responsible for the negligence or misconduct of
any agent or attorney-in-fact that it selects in the absence of gross negligence
or willful misconduct.
(e) No Collateral Agent-Related Person shall (i) be liable for any action
taken or omitted to be taken by any of them under or in connection with this
Agreement or the Security Documents or the transactions contemplated hereby and
thereby including but not limited to those arising from its own negligence
(except for its own gross negligence or willful misconduct in connection with
its duties expressly set forth herein), or (ii) be responsible in any manner to
any Lender, Swap Counterparty or participant for any recital, statement,
representation or warranty made by the Loan Parties, or any officer thereof,
contained herein or in the Security Documents, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Collateral Agent under or in connection with, this Agreement or the Security
Documents, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or the Security Documents, or for any failure of
the Loan Parties to perform their obligations hereunder or thereunder. No
Collateral Agent-Related Person shall be under any obligation to any Lender or
participant to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement, the Senior
Secured Loan Documents, the Second Lien Loan Documents, this Agreement, the
Security Documents, or to inspect the properties, books or records of the Loan
Parties.
(f) The Collateral Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, electronic mail message, statement or
other document or conversation reasonably believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the Loan
Parties), independent accountants and other experts selected by the Collateral
Agent. The Collateral Agent shall be fully justified in failing or refusing to
take any action under the Security Documents unless it shall first receive such
advice or concurrence of Senior Administrative Agent as it deems appropriate
and, if it so requests, it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Collateral Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement or the Security Documents in accordance with a request or
consent of Senior Administrative Agent and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and Swap
Counterparties.
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(g) The Collateral Agent shall not be deemed to have knowledge or notice
of the occurrence of any "Default" or "Event of Default" under the Senior
Secured Credit Agreement, the Second Lien Credit Agreement, the Security
Documents or any Swap Agreement (as "Default" or "Event of Default" is defined
in any of such documents), unless the Collateral Agent shall have received
written notice from the Senior Administrative Agent or Second Lien
Administrative Agent, as applicable, or the Swap Counterparty or a Borrower,
describing such "Default" or "Event of Default" and stating that such notice is
a "notice of default." The Collateral Agent will notify Senior Administrative
Agent and the Second Lien Administrative Agent of its receipt of any such
notice. The Collateral Agent shall take such action with respect to the
Collateral after any such "Default" or "Event of Default" as may be directed by
Senior Administrative Agent in accordance with the terms hereof until the Senior
Secured Indebtedness has been paid in full in cash and all Commitments under the
Senior Secured Credit Agreement have been terminated and thereafter as directed
by the Second Lien Administrative Agent in accordance with the terms of hereof.
Unless and until the Collateral Agent has received any such direction, the
Collateral Agent shall not be obligated to take such action with respect to such
"Default" or "Event of Default". Furthermore, the Collateral Agent may (but
shall not be obligated to) take action hereunder to the extent necessary to
maintain insurance on the Collateral or otherwise protect the Collateral from
damage or destruction.
(h) Each Lender acknowledges that no Collateral Agent-Related Person has
made any representation or warranty to it, and that no act by the Collateral
Agent hereafter taken, including any consent to and acceptance of any assignment
or review of the affairs of the Loan Parties, shall be deemed to constitute any
representation or warranty by any Collateral Agent-Related Person to any Lender
as to any matter, including whether Collateral Agent-Related Persons have
disclosed material information in their possession. Each Lender and Swap
Counterparty represents to the Collateral Agent that it has, independently and
without reliance upon any Collateral Agent-Related Person and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, prospects, operations, property,
financial and other condition and creditworthiness of the Loan Parties, and all
applicable bank or other regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into the Senior Secured
Loan Documents or Second Lien Loan Documents, as applicable, and this Agreement
and to extend credit to Borrowers under the applicable credit agreement. Each
Lender and each Swap Counterparty also represents that it will, independently
and without reliance upon any Collateral Agent-Related Person and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the Senior Secured Loan Documents, Swap
Agreement or Second Lien Loan Documents, as applicable, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties. Except for notices, reports and other
documents expressly required to be furnished to Senior Administrative Agent or
Second Lien Administrative Agent by the Collateral Agent herein, the Collateral
Agent shall not have any duty or responsibility to provide any Lender or Swap
Counterparty with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of any of the Loan Parties which may come into the possession
of any Collateral Agent-Related Person.
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(i) The Lenders shall indemnify upon demand each Collateral Agent-Related
Person (to the extent not reimbursed by or on behalf of the Loan Parties and
without limiting the obligation of the Loan Parties to do so), to the extent of
each Lender's Proportionate Share, and hold harmless each Collateral
Agent-Related Person from and against any and all Indemnified Liabilities
incurred by it, including but not limited to those arising from its own
negligence; PROVIDED, HOWEVER, THAT NO LENDER SHALL BE LIABLE FOR THE PAYMENT TO
ANY COLLATERAL AGENT-RELATED PERSON OF ANY PORTION OF SUCH INDEMNIFIED
LIABILITIES TO THE EXTENT DETERMINED IN A FINAL, NONAPPEALABLE JUDGMENT BY A
COURT OF COMPETENT JURISDICTION TO HAVE RESULTED FROM SUCH COLLATERAL
AGENT-RELATED PERSON'S OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT; provided
further, however, that no action taken in accordance with the directions of
Senior Administrative Agent or Second Lien Administrative Agent shall be deemed
to constitute gross negligence or willful misconduct for purposes of this
Section 3(i). Without limitation of the foregoing, each Lender shall reimburse
the Collateral Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including reasonable attorney's fees and expenses)
incurred by the Collateral Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement or the Security
Documents to the extent that the Collateral Agent is not reimbursed for such
expenses by or on behalf of the Loan Parties. The undertaking in this Section
3(i) shall survive termination of the Senior Secured Credit Agreement and the
Second Lien Credit Agreement.
(j) Guggenheim Corporate Funding, LLC, and its Affiliates may make loans
to, issue letters of credit for the account of, accept deposits from, acquire
equity interests in, enter into hedging and derivative agreements, and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with the Loan Parties as though Guggenheim Corporate Funding, LLC were
not the Collateral Agent hereunder and without notice to or consent of the
Lenders. The Lenders acknowledge that, pursuant to such activities, Guggenheim
Corporate Funding, LLC or its Affiliates may receive information regarding the
Loan Parties (including information that may be subject to confidentiality
obligations in favor of the Loan Parties) and acknowledge that the Collateral
Agent shall be under no obligation to provide such information to them. With
respect to the Collateral, Guggenheim Corporate Funding, LLC shall have the same
rights and powers under this Agreement and the Security Documents as any other
Lender and may exercise such rights and powers as though it were not the
Collateral Agent, and the terms "Lender" and "Lenders" include Guggenheim
Corporate Funding, LLC in its individual capacity.
(k) Successor Collateral Agent.
(i) The Collateral Agent may resign as Collateral Agent upon not less than
20 days' notice to the Lenders, with such resignation to take effect upon the
acceptance by a successor Collateral Agent of its appointment as the Collateral
Agent hereunder. In addition in the event the Collateral Agent is no longer a
Lender or the Senior Administrative Agent, the Required Lenders may remove the
Collateral Agent by giving written notice thereof to the Collateral Agent at
least 20 days' prior to the effective date of such removal. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Collateral Agent. If no successor Collateral Agent shall have been so
appointed and shall have accepted such appointment in writing within 20 days
after the retiring Collateral Agent's giving of notice of resignation or its
removal, then the retiring Collateral Agent may, on behalf of the Lenders,
appoint a successor Collateral Agent which meets the eligibility requirements of
paragraph (k)(iii) below. Upon acceptance of appointment as Collateral Agent,
such successor shall thereupon and forthwith succeed to and become vested with
all the rights, powers and privileges, immunities and duties of the retiring
Collateral Agent, the term "Collateral Agent" shall mean such successor
Collateral Agent, and the retiring Collateral Agent, upon the transferring and
setting over to such successor Collateral Agent all rights, moneys and other
collateral held by it in its capacity as Collateral Agent, shall be discharged
from its duties and obligations hereunder. After any retiring Collateral Agent's
resignation or removal hereunder as Collateral Agent, the provisions of this
paragraph (k)(i) shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Collateral Agent under this Agreement.
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(ii) Any successor Collateral Agent appointed hereunder shall
execute, acknowledge and deliver to Borrowers, the Senior Administrative
Agent, the Senior Secured Lenders, the Second Lien Administrative Agent,
the Second Lien Lenders and the predecessor Collateral Agent an instrument
accepting such appointment, and thereupon such successor Collateral Agent,
without any further act, deed, conveyance or transfer, shall become vested
with the title to the Collateral, and with all the rights, powers, duties
and obligations of the predecessor Collateral Agent in the trust
hereunder, with like effect as if originally named as Collateral Agent
herein. Upon the request of any such successor Collateral Agent, Borrowers
and the predecessor Collateral Agent shall promptly execute and deliver
such instruments of conveyance and further assurance reflecting terms
consistent with the terms of the Senior Secured Loan Documents and the
Second Lien Loan Documents then in effect and do such other things as may
reasonably be required for more fully and certainly vesting and confirming
in such successor Collateral Agent its interest in the Collateral and all
such rights, powers, duties and obligations of the predecessor Collateral
Agent hereunder, and the predecessor Collateral Agent shall also promptly
assign and deliver to the successor Collateral Agent any Collateral
subject to the lien and security interest of this Agreement which may then
be in its possession.
(iii) Any successor Collateral Agent appointed by a retiring
Collateral Agent pursuant to paragraph (k)(i) above shall be a state or
national bank or trust company in good standing, organized under the laws
of the United States of America or of any state, having a capital, surplus
and undivided profits aggregating at least $500,000,000 and whose
certificates of deposit have a Satisfactory Rating, if there be such a
bank or trust company willing and able to accept the duties hereunder upon
reasonable and customary terms. As used in this paragraph (k)(iii), the
term "Satisfactory Rating" means, with respect to any Person, that such
Person and its bank deposits or other short term credit obligations have
both a short-term bank deposit rating of Prime-2 or better from Xxxxx'x
Investors Service, Inc. and a short term credit obligation rating of A-3
or better from Standard and Poor's Rating Service, a division of The
XxXxxx-Xxxx Companies.
(iv) Any corporation or limited liability company into which the
Collateral Agent may be merged or with which it may be consolidated, or
any corporation or limited liability company resulting from any merger or
consolidation to which the Collateral Agent shall be a party, shall be the
successor of the Collateral Agent hereunder without the execution or
filing of any paper or any further act on the part of any of the parties
hereto, anything to the contrary contained herein notwithstanding.
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(l) Whenever Collateral Agent in good faith determines that it is
uncertain about how to distribute any funds which it has received, or whenever
Collateral Agent in good faith determines that there is any dispute among
Lenders and/or Swap Counterparties about how such funds should be distributed,
Collateral Agent may choose to defer distribution of the funds which are the
subject of such uncertainty or dispute. If Collateral Agent in good faith
believes that the uncertainty or dispute will not be promptly resolved, or if
Collateral Agent is otherwise required to invest funds pending distribution to
Lenders, Collateral Agent shall invest such funds pending distribution; all
interest on any such investment shall be distributed upon the distribution of
such investment and in the same proportion and to the same Persons as such
investment. All moneys received by Collateral Agent for distribution to Lenders
and Swap Counterparties shall be held by Collateral Agent pending such
distribution solely as Collateral Agent for such Lenders and Swap
Counterparties, and Collateral Agent shall have no equitable title to any
portion thereof except in its separate capacity as a Lender.
(m) The Second Lien Administrative Agent and each Second Lien Lender
hereby waives and agrees not to assert: (i) any right, now or hereafter
existing, to require Collateral Agent or the Senior Secured Creditor to proceed
against or exhaust any Collateral at any time securing the Senior Secured
Indebtedness or amounts payable under any Swap Agreement, or to marshal any
assets in favor of Second Lien Administrative Agent, any Second Lien Lender or
any other holder of Second Lien Indebtedness or to receive notice that the
Collateral Agent has elected to, or is pursuing, remedies against the
Collateral; and (ii) any notice of the incurrence of Senior Secured
Indebtedness, it being understood that Senior Secured Lenders may, in reliance
upon these subordination provisions, make advances under the Senior Secured Loan
Documents, or any other agreement, document, or instrument now or hereafter
relating to the Senior Secured Indebtedness (in compliance with the terms of
this Agreement), without notice to or authorization of Second Lien
Administrative Agent.
(n) For the limited purpose of perfecting the security interests of the
Senior Secured Creditor and the Second Lien Creditor in those types or items of
Collateral in which a security interest may only be perfected by possession or
control, each of the Senior Administrative Agent and the Second Lien
Administrative Agent hereby appoints the Collateral Agent as its agent and
bailee for the limited purpose of possessing or controlling on its behalf any
such Collateral that is in or may come into the possession of the Collateral
Agent from time to time, and the Collateral Agent agrees to act as the agent and
bailee for such limited purpose of perfecting the Senior Administrative Agent's
and the Second Lien Administrative Agent's security interests by possession or
control through an agent or bailee.
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(o) Notwithstanding anything contained herein to the contrary, the Senior
Administrative Agent shall not provide any advice, concurrence, request, consent
or direction to Collateral Agent under Section 3(f) or Section 3(g) hereof
unless instructed to do so by Required Senior Secured Revolving Lenders (or if
the Senior Secured Indebtedness described in clauses (i) through (iv) of Section
5 has been paid in full, by Required Senior Secured Tern Lenders, if
applicable). Upon the occurrence and during the continuance of a Senior Secured
Indebtedness Default, Senior Administrative Agent shall (and is hereby
authorized by the parties hereto to), after its receipt of written demand by
Required Senior Secured Revolving Lenders (or if the Senior Secured Indebtedness
described in clauses (i) through (iv) of Section 5 has been paid in full, by the
Required Senior Secured Term Lenders, if applicable), accelerate the maturity of
the Senior Secured Indebtedness and direct Collateral Agent to commence and
diligently pursue in good faith the exercise of its enforcement rights or
remedies against, and take action to enforce its Liens on, the Collateral as
directed by the Required Senior Secured Revolving Lenders (or if the Senior
Secured Indebtedness described in clauses (i) through (iv) of Section 5 has been
paid in full, by Required Senior Secured Term Lenders, if applicable) and
exercise such rights and remedies by the terms of the Senior Secured Loan
Documents and/or under applicable law (including, without limitation, any or all
of the following as directed by the Required Senior Secured Revolving Lenders
(or if the Senior Secured Indebtedness described in clauses (i) through (iv) of
Section 5 has been paid in full, by the Required Senior Secured Term Lenders):
solicitation of bids from third parties to conduct the liquidation of all or a
material portion of Collateral, the engagement or retention of sales brokers,
marketing agents, investment bankers, accountants, appraisers, auctioneers or
other third parties for the purposes of valuing, marketing, promoting, and
selling a material portion of the Collateral, the opposition of the use of cash
collateral or sale of assets in an Insolvency Proceeding, seeking to obtain
relief from any stay imposed by applicable law governing an Insolvency
Proceeding, the commencement of any action to foreclose on its Lien on all or
any material portion of the Collateral, notification of account debtors to make
payments to the Collateral Agent or its agents, any action to take possession of
all or any material portion of the Collateral or commencement of any legal
proceedings or actions against or with respect to all or any material portion of
the Collateral); provided that (A) such Senior Secured Indebtedness Default has
not been waived or cured, (B) in the good faith determination of Collateral
Agent, taking such enforcement action is permitted under the terms of the Senior
Secured Loan Documents and applicable law, and (C) taking such enforcement
action will not result in any liability of any Agent or any Lender to any Loan
Party. From and after the date upon which the Senior Secured Indebtedness has
been paid in full in cash, all commitments of any holder of Senior Secured
Indebtedness to make loans or extensions of credit have terminated, and all
letters of credit issued by Senior Secured Creditor or any Affiliate thereof
have expired, terminated or been fully collateralized in cash, the right to
provide any advice, concurrence, consent and direction to the Collateral Agent
that is to be provided by the Senior Administrative Agent pursuant to the terms
of this Section 3(o) shall be provided by the Second Lien Administrative Agent,
when instructed to do so by the Required Second Lien Lenders.
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Section 4. Collateral Accounts
(a) The Collateral Agent shall maintain one or more accounts (the
"Collateral Accounts") into which shall be deposited all amounts received by it
in its capacity as the Collateral Agent, in respect of any Senior Secured Loan
Document or Second Lien Loan Document, including all proceeds of Collateral. The
Collateral Accounts referred to in the preceding sentence shall be established
and maintained for the benefit of all Secured Parties. The Collateral Agent, for
the benefit of the Agents, the Lenders and the Swap Counterparties, shall have
exclusive dominion and control over the Collateral Accounts.
(b) Prior to the delivery of Notice of Default, any amounts deposited in
the Collateral Accounts shall be disbursed to the Borrowers. After the delivery
of a Notice of Default, except as otherwise set forth herein, all amounts
deposited in the Collateral Accounts shall be disbursed only as provided in
Section 5 hereof.
Section 5. Application of Proceeds. After delivery of a Notice of Default but
prior to delivery of an Acceleration Notice all amounts deposited in the
Collateral Accounts shall be applied in the following order of priority:
(i) first, to pay obligations in respect of any expense
reimbursements, indemnities or other liabilities then due to any Agent
until such obligations have been paid in full;
(ii) second, to pay obligations in respect of any fees then due to
any Agent or the Issuing Bank until such obligations have been paid in
full;
(iii) third, to pay interest, fees, expense reimbursements and
indemnities due and unpaid in respect of the Senior Secured Indebtedness,
interest, fees, expense reimbursements, indemnities and other
non-accelerated regularly scheduled amounts due and unpaid in respect of
any Swap Agreement, and interest, fees, expense reimbursements and
indemnities due and unpaid with respect to the Second Lien Indebtedness
until such amounts have been paid in full;
(iv) fourth, to (A) pay all other amounts due and payable pursuant
to the terms of any Swap Agreement, (B) pay the principal amount
outstanding of the Senior Secured Revolving Loans and (C) pay
reimbursement obligations with respect to any letter of credit and to cash
collateralize the LC Exposure under the Senior Secured Credit Agreement
until all such amounts have been paid in full;
(v) fifth, to pay the principal amounts due and unpaid of the Senior
Secured Term Loans until all such amounts have been paid in full;
(vi) sixth, to pay the principal amounts due and unpaid of the
Second Lien Indebtedness until all such amounts have been paid in full;
(vii) seventh, to the Borrowers;
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provided, however, if sufficient funds are not available to fund all payments to
be made in respect of any of the obligations described in any one of the
foregoing clauses (i) through (vi), the available funds being applied with
respect to any such obligations referred to in such clause shall be allocated to
the payment of such obligations ratably, based on the proportion of each
Agent's, each Lender's, each Swap Counterparty's or the Issuing Bank's interest
in the aggregate outstanding obligations described in such clause. No obligation
shall be considered paid in full unless paid in cash.
Section 6. Senior Secured Indebtedness Acceleration. (a) Except under
circumstances when the terms of Section 9 of this Agreement are applicable, if
(i) a Senior Secured Indebtedness Acceleration shall have occurred and be
continuing and (ii) the Second Lien Lenders or the Second Lien Administrative
Agent or other representative shall have received an Acceleration Notice, then
neither of the Borrowers nor any Guarantor may make, and no Second Lien 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 Borrowers or any of the Guarantors on account of the Second Lien
Indebtedness during the related Blockage Period; provided, however, that in the
case of any payment on or in respect of any Second Lien Indebtedness that would
(in the absence of any such Acceleration Notice) have been due and payable on
any date (a "Scheduled Payment Date") during such Blockage Period pursuant to
the terms of the Second Lien Credit Agreement or the Second Lien Notes, if
requested, as in effect on the date hereof or as amended consistent with the
provisions of Section 15 of this Agreement, the provisions of this Section 6
shall not prevent the making and acceptance of such payment (a "Scheduled
Payment"), together with any additional default interest as is due on Second
Lien Credit Agreement or the Second Lien Notes, on or after the date immediately
following the termination of such Blockage Period. In the event that,
notwithstanding the foregoing, either of the Borrowers or any of the Guarantors
shall make any payment or distribution to any Second Lien Lender prohibited by
the foregoing provisions of this Section 6, 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 Collateral Agent for application as set forth in this
Agreement. Any Acceleration Notice shall be deemed received by the Second Lien
Lenders upon the date of actual receipt by the Second Lien Lenders or the Second
Lien Administrative Agent or other representative designated pursuant to Section
17 hereof of such Acceleration Notice in writing.
(b) On and after receipt by the Second Lien Lenders of an Acceleration
Notice, the holders of the Senior Secured Indebtedness shall be entitled to
receive payment in full in cash of the Senior Secured Indebtedness and cash
collateral in respect of all outstanding letters of credit and Swap
Counterparties shall be entitled to receive all amounts payable under the Swap
Agreements, before the Second Lien 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
Second Lien Indebtedness; provided that the priority of payment shall, in each
case, be as follows:
(i) first, to pay obligations in respect of any expense
reimbursements, indemnities or other liabilities then due to any Agent
until such obligations have been paid in full;
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(ii) second, to pay obligations in respect of any fees then due to
any Agent or the Issuing Bank until such obligations have been paid in
full;
(iii) third, to pay interest, fees, expense reimbursements and
indemnities due and unpaid in respect of the Senior Secured Revolving
Loans;
(iv) fourth, to pay (A) all principal amounts unpaid in respect of
the Senior Secured Revolving Loans, (B) all reimbursement obligations with
respect to any letter of credit and to cash collateralize the LC Exposure
under the Senior Secured Credit Agreement and (C) all amounts due and
payable pursuant to the terms of any Swap Agreement, until all such
amounts have been paid in full;
(v) fifth, to pay interest, fees, expense reimbursements and
indemnities due and unpaid in respect of the Senior Secured Term Loans
until such amounts have been paid in full;
(vi) sixth, to pay all principal amounts unpaid in respect of the
Senior Secured Term Loans until all such amounts have been paid in full;
(vii) seventh, to pay interest, fees, expense reimbursements and
indemnities due and unpaid in respect of the Second Lien Indebtedness
until such amounts have been paid in full;
(viii) eighth, to pay all principal amounts unpaid in respect of the
Second Lien Indebtedness until all such amounts have been paid in full;
and
(ix) ninth, to the Borrower;
provided, however, if sufficient funds are not available to fund all payments to
be made in respect of any of the obligations described in any one of the
foregoing clauses (i) through (viii), the available funds being applied with
respect to any such obligations referred to in such clause shall be allocated to
the payment of such obligations ratably, based on the proportion of each
Agent's, each Lender's, each Swap Counterparty's or the Issuing Bank's interest
in the aggregate outstanding obligations described in such clause.
Section 7. RESERVED
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Section 8. Standstill. Upon the delivery of notice to the holders of the
Senior Secured Indebtedness by the Second Lien Lenders or Second Lien
Administrative Agent pursuant to Section 12 of this Agreement, the Second Lien
Lenders and the Second Lien Administrative Agent or other representative of the
Second Lien Lenders designated hereunder will not commence any Enforcement
Action relative to any of the Borrowers or any of the Guarantors during the
Standstill Period. Upon the termination of the Standstill Period, the Second
Lien 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 (d)
of the definition thereof, no Second Lien 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 (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 (d) of the definition
of "Standstill Period."
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Section 9. Insolvency; Bankruptcy; Etc. In the event of the institution of
any Insolvency Proceeding relative to either of the Borrowers or any of the
Guarantors, then:
(a) The holders of the Senior Secured Indebtedness shall be entitled
to receive payment in full in cash of the Senior Indebtedness and cash
collateral in respect of all outstanding letters of credit and Swap
Counterparties shall be entitled to receive all amounts payable under the
Swap Agreements, before the Second Lien 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 Second Lien Indebtedness; provided that the
priority of payment shall, in each case, be as follows:
(i) first, to pay obligations in respect of any expense
reimbursements, indemnities or other liabilities then due to any Agent
until such obligations have been paid in full;
(ii) second, to pay obligations in respect of any fees then due to
any Agent or the Issuing Bank until such obligations have been paid in
full;
(iii) third, to pay interest, fees, expense reimbursements and
indemnities due and unpaid in respect of the Senior Secured Revolving
Loans;
(iv) fourth, to pay (A) all principal amounts unpaid in respect of
the Senior Secured Revolving Loans, (B) all reimbursement obligations with
respect to any letter of credit and to cash collateralize the LC Exposure
under the Senior Secured Credit Agreement and (C) all amounts due and
payable pursuant to the terms of any Swap Agreement, until all such
amounts have been paid in full;
(v) fifth, to pay interest, fees, expense reimbursements and
indemnities due and unpaid in respect of the Senior Secured Term Loans
until such amounts have been paid in full;
(vi) sixth, to pay all principal amounts unpaid in respect of the
Senior Secured Term Loans until all such amounts have been paid in full;
(vii) seventh, to pay interest, fees, expense reimbursements and
indemnities due and unpaid in respect of the Second Lien Indebtedness
until such amounts have been paid in full;
(viii) eighth, to pay all principal amounts unpaid in respect of the
Second Lien Indebtedness until all such amounts have been paid in full;
and
(ix) ninth, to the Borrower;
provided, however, if sufficient funds are not available to fund all payments to
be made in respect of any of the obligations described in any one of the
foregoing clauses (i) through (viii), the available funds being applied with
respect to any such obligations referred to in such clause shall be allocated to
the payment of such obligations ratably, based on the proportion of each
Agent's, each Lender's, each Swap Counterparty's or the Issuing Bank's interest
in the aggregate outstanding obligations described in such clause.
21
(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 Second
Lien Indebtedness but for the provisions of this Agreement shall be paid or
delivered by the Person making such payment or distribution, whether either of
the Borrowers, any Guarantor, a trustee in bankruptcy, a receiver, a liquidating
trustee, or otherwise, to the Collateral Agent for the account of the holders of
Senior Secured Indebtedness and/or the Swap Counterparties, to the extent
necessary to make payment in full in cash of all Senior Secured Indebtedness
remaining unpaid, to fully cash collateralize all outstanding letters of credit,
and to make payment of amounts payable under the Swap Agreements; provided,
however, that no such delivery of any Reorganization Securities shall be made to
any holders of the Senior Secured Indebtedness or to any Swap Counterparty. In
the event that, notwithstanding the foregoing provisions of this Section 9, the
Senior Secured Creditor or the Second Lien Creditor 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, 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 Collateral Agent for
application to the payment of all Senior Secured Indebtedness, amounts payable
under Swap Agreements and Second Lien Indebtedness remaining unpaid, pursuant to
the terms of this Section 9.
(c) If no proof of claim is filed in any Insolvency Proceeding with
respect to any Second Lien Indebtedness by the tenth day prior to the bar date
for any such proof of claim, the Collateral Agent may, after notice to the
Second Lien Lenders or the Second Lien Administrative Agent or other
representative designated pursuant to Section 16 hereof, file such a proof of
claim on behalf of the Second Lien Lenders, and each Second Lien Lender hereby
irrevocably appoints the Collateral Agent as its agent and attorney-in-fact for
such limited purpose; provided, that the foregoing shall not confer to the
holder of any Senior Secured Indebtedness the right to vote on behalf of the
Second Lien Lenders in any Insolvency Proceedings.
(d) If the Required Senior Secured Revolving Lenders have consented to a
sale or other disposition of any assets securing the Senior Secured Indebtedness
free and clear of Liens, claims and other interests under Xxxxx 00, Xxxxxx
Xxxxxx Code, including under Sections 363, 365 and 1129 of Xxxxx 00, Xxxxxx
Xxxxxx Code, then the other Secured Parties agree that they will consent and
will not otherwise object to such sale or disposition.
Section 10. No Impairment. No right of any present or future holder of Senior
Secured 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 either of the Borrowers or any Guarantor or by any non-compliance by
either of the Borrowers or any Guarantor with the terms, provisions, and
covenants of this Agreement, the Second Lien Credit Agreement or the Second Lien
Notes, if any, regardless of any knowledge thereof any such Second Lien Lender
may have or be otherwise charged with. The provisions of this Agreement shall be
enforceable directly by the Collateral Agent, by any present or future holder of
the Senior Secured Indebtedness and/or the Senior Indebtedness Representative.
22
Section 11. Rights of Creditors; Subrogation. The provisions of this
Agreement are for the purpose of defining the relative rights of holders of the
Senior Secured Indebtedness, any Swap Counterparty, holders of Senior Secured
Term Indebtedness and the Second Lien Lenders, and nothing herein shall impair,
as between the Borrowers and the Guarantors and the Second Lien Lenders, the
obligation of the Borrowers and the Guarantors, which are unconditional and
absolute, to pay to the Second Lien Lenders the principal of the Second Lien
Indebtedness and interest thereon in accordance with their terms and the
provisions thereof, nor shall anything herein, except as otherwise provided in
Section 8 of this Agreement, prevent the Second Lien Lenders from exercising all
remedies otherwise permitted by applicable law or hereunder upon default under
the Second Lien Credit Agreement or under the Second Lien Notes, if requested,
(including the right to demand payment and xxx for performance thereof and of
the Second Lien Notes, if requested, and to accelerate the maturity thereof as
provided by the terms of the Second Lien Credit Agreement or the Second Lien
Notes, if requested), subject to the rights of holders of the Senior Secured
Indebtedness and Swap Counterparties under this Agreement. Upon payment in full
of the Senior Secured Indebtedness in cash and termination of the commitments of
any holder of the Senior Secured Indebtedness to make loans or extensions of
credit, expiration or termination of all letters of credit issued under the
Senior Secured Credit Agreement and payment of any amounts payable under the
Swap Agreements, the Second Lien Lenders shall, to the extent of any payments or
distributions paid or delivered to the Collateral Agent for payment to holders
of the Senior Secured Indebtedness or otherwise applied to the Senior Secured
Indebtedness pursuant to the provisions of this Agreement, be subrogated to the
rights of the holders of the Senior Secured Indebtedness to receive payments or
distributions of assets of the Borrowers or any Guarantor made on Senior Secured
Indebtedness (and any security therefor) until the Second Lien Indebtedness
shall be paid in full (and, for this purpose, no such payments or distributions
paid or delivered to the Collateral Agent for payment to the holders of the
Senior Secured Indebtedness and the Swap Counterparties or otherwise applied to
the Senior Secured Indebtedness and any amounts payable under the Swap
Agreements shall be deemed to have discharged the Second Lien Indebtedness),
and, for the purposes of such subrogation, no payments to the Collateral Agent
for payment to the holders of the Senior Secured Indebtedness and Swap
Counterparties of any cash, assets, stock, or obligations to which the Second
Lien Lenders would be entitled except for the provisions of this Agreement
shall, as between the Borrowers and the Guarantors, any of their respective
creditors (other than the holders of the Senior Secured Indebtedness and Swap
Counterparties), and the Second Lien Lenders, be deemed to be a payment by
either of the Borrowers or any Guarantor to or on account of Second Lien
Indebtedness. The fact that failure to make any payment on account of the Second
Lien Indebtedness is caused by reason of the operation of any provision of this
Agreement shall not be construed as preventing the occurrence of an Event of
Default.
Section 12. Notice of Acceleration, Enforcement Action.
-------------------------------------------
(a) Each Second Lien Lender agrees that in the event any event of default
under the Second Lien Credit Agreement (or the Second Lien Notes, if any) (a
"Second Lien Event of Default") shall occur, and as a result thereof, any Second
Lien Lender or the Second Lien Administrative Agent or other representative of
such Second Lien Lender accelerates maturity of the Second Lien Notes, if any,
then such Second Lien Lender or the Second Lien Administrative Agent 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 Secured
Indebtedness or the Senior Secured Indebtedness Representative. Neither of the
Borrowers nor any Guarantor may pay any Second Lien Notes until ten (10)
Business Days after the Senior Secured Lenders or Senior Secured Indebtedness
Representative, the Second Lien Administrative Agent and the Collateral Agent
receives the notice described above and, after that ten (10) Business Day
period, may pay any Second Lien Notes, and the Second Lien Lenders may receive
or collect such payment, only if the provisions of this Agreement do not
prohibit such payment at that time.
23
(b) Each Second Lien Lender agrees that in the event any Second Lien Event
of Default shall occur, and as a result thereof, any Second Lien Lender or the
Second Lien Administrative Agent or other representative of such Second Lien
Lender intends to commence any Enforcement Action, then such Second Lien Lender
or the Second Lien Administrative Agent or other representative shall first
deliver notice thereof in writing to the Senior Secured Indebtedness
Representative and the Collateral Agent 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.
Section 13. Reinstatement. If the Senior Secured Creditor or any Swap
Counterparty is required to disgorge any proceeds, payment or other amount
received by such Senior Secured Creditor or Swap Counterparty (whether because
such proceeds, payment or other amount is invalidated, declared to be fraudulent
or preferential or otherwise) or turn over or otherwise pay any amount (a
"Recovery") to the estate or to any creditor or representative of a Loan Party
or any other Person, then the Senior Secured Indebtedness or payment required
under the related Swap Agreement, as applicable, shall be reinstated (to the
extent of such Recovery) as if such proceeds, payment or other amount had never
been paid and, to the extent that the Second Lien Creditor has received
proceeds, payments or other amounts to which the Second Lien Creditor would not
have been entitled under this Agreement had such reimbursement occurred prior to
the receipt by the Second Lien Creditor of such proceeds, payments or other
amounts, the Second Lien Creditor shall turn over such proceeds, payments or
other amounts to the Collateral Agent for reapplication to the Senior Secured
Indebtedness and required payments under any Swap Agreement in accordance with
this Agreement. If this Agreement shall have been terminated prior to such
Recovery, this Agreement shall be reinstated in full force and effect, and such
prior termination shall not diminish, release, discharge, impair or otherwise
affect the obligations hereunder of the parties hereto. All rights, interests,
agreements and obligations of the Secured Parties hereunder shall remain in full
force and effect and shall continue irrespective of the commencement of, or any
discharge, confirmation, conversion or dismissal of any Insolvency Proceeding by
or against any Loan Party or any other Person and irrespective of any other
circumstance that otherwise might constitute a defense available to, or a
discharge of, any Loan Party or any other Person in respect of the Senior
Secured Indebtedness or any Swap Agreement.
Section 14. Rights of Holders of the Senior Secured Indebtedness and Swap
Counterparties. The holders of the Senior Secured Indebtedness may, at any time
and from time to time subject to the terms of the Senior Secured Indebtedness,
without the consent of or notice to the Second Lien Lenders or the Second Lien
Administrative Agent or other representative of the Second Lien Lenders, without
incurring responsibility to the Second Lien Creditor and without impairing or
releasing the subordination or other benefits provided in this Agreement or the
obligations hereunder of the Second Lien Creditor hereunder, 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 not in excess of the cap provided
for in the definition of "Senior Secured Indebtedness"), alter or amend Senior
Secured Indebtedness or any instrument evidencing the same or any covenant or
agreement under which Senior Secured Indebtedness is outstanding or secured or
any liability of any obligor thereon; (b) instruct the Collateral Agent to sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Secured Indebtedness; (c) settle or compromise any
Senior Secured Indebtedness or any liability of any obligor thereon or release
any Person liable in any manner for the payment of Senior Secured Indebtedness;
and (d) waive any default under Senior Secured Indebtedness and exercise or
refrain from exercising any rights against either of the Borrowers, any of their
Subsidiary or any other Person. The foregoing provisions are not intended to
permit a change to the definition of "Senior Secured Indebtedness." No
compromise, alteration, amendment, modification, extension, renewal or other
change of; or waiver, consent or other action in respect of any liabilities or
obligations under or in respect of any of the terms, covenants, or conditions of
any Senior Secured Loan Document, whether or not in accordance with the
provisions of any applicable document, shall in any way alter or affect any of
the provisions of this Agreement. Each Swap Counterparty, mutis mutandis, shall
have rights with respect to the related Swap Agreement and the terms and
conditions thereof in all respects equivalent to those of holders of Senior
Secured Indebtedness under this Section 14 with respect to the Senior Secured
Indebtedness under the Senior Secured Credit Agreement.
24
Section 15. Modification of Indebtedness. Each of the Lenders agrees that it
will not: (i) amend or modify any of the Senior Secured Loan Documents or the
Second Lien Loan Documents, as applicable, to add any covenant thereto; or (ii)
amend or otherwise change the terms of any Senior Secured Indebtedness or Second
Lien Indebtedness, as applicable, or accept any payment consistent with an
amendment or change thereto, if the effect of such amendment or change is to
increase the interest rate on such Senior Secured Indebtedness or Second Lien
Indebtedness, as applicable, change any date on which a payment of principal or
interest is due thereon to an earlier date or increase the amount of any such
payment, change any default or condition to a default with respect to such
Senior Secured Indebtedness or Second Lien Indebtedness, as applicable, take any
Collateral or make any other change which, together with all other amendments or
changes made, increase materially the obligations of the obligor or confer
additional rights on the holder of such Senior Secured Indebtedness or Second
Lien Indebtedness, as applicable, that would be adverse to any Loan Party or
Lender.
Section 16. Amendments.
-----------
(a) Except as otherwise set forth in this Section 16, no amendment,
waiver, discharge or termination of this Agreement, any of the terms hereof or
any of the definitions used in this Agreement, that would have the effect of
modifying this Agreement with respect to the various parties hereto shall be
effective unless it is in writing and signed by Senior Secured Creditor and
Second Lien Creditor and, to the extent applicable, any Swap Counterparty
affected thereby.
25
(b) Any amendment of this Agreement or the definitions used in this
Agreement that would have the effect of modifying this Agreement or the
definitions used in this Agreement in such a way so as to adversely affect the
rights of all of the Senior Secured Lenders or any Swap Counterparty shall be
effective if it is in writing and made with the prior written consent of the
Required Senior Secured Revolving Lenders and the Required Senior Secured Term
Loan Lenders or the Senior Secured Indebtedness Representative acting at their
written direction on their behalf and such Swap Counterparty.
(c) Any amendment of this Agreement or the definitions used in this
Agreement that would have the effect of modifying this Agreement or the
definitions used in this Agreement in such a way so as to adversely affect the
rights of the Senior Secured Revolving Lenders shall be effective if it is in
writing and made with the prior written consent of the Required Senior Secured
Revolving Lenders or the Senior Secured Indebtedness Representative acting at
their written direction on theft behalf
(d) Any amendment of this Agreement or the definitions used in this
Agreement that would have the effect of modifying this Agreement or the
definitions used in this Agreement in such a way so as to adversely affect the
rights of the Senior Secured Term Lenders shall be effective if it is in writing
and made with the prior written consent of the Required Senior Secured Term
Lenders or the Senior Secured Indebtedness Representative acting at their
written direction on theft behalf.
(e) Any amendment of this Agreement or the definitions used in this
Agreement that would have the effect of modifying this Agreement or the
definitions used in this Agreement in such a way so as to adversely affect the
rights of the Second Lien Lenders shall be effective if it is in writing and
made with the prior written consent of the Required Second Lien Lenders or the
Second Lien Administrative Agent acting at their written direction on their
behalf.
Section 17. Identity of Second Lien Lenders for Notice Purposes. For purposes
of any notice required or permitted to be given hereunder by the Collateral
Agent, the holders of the Senior Secured Indebtedness or the Senior Secured
Indebtedness Representative to the Second Lien Lenders, or any of them, the
Collateral Agent, the holders of the Senior Secured Indebtedness and the Senior
Secured Indebtedness Representative shall be entitled to rely, conclusively, on
the identity and address of each Second Lien Lender as set forth in the Second
Lien Loan Agreement or as otherwise set forth in the most recent notice received
by the Senior Secured Indebtedness Representative from a Second Lien Lender
referring to the Second Lien Loan Agreement for purposes of providing the
identity and address of each Second Lien Lender. The Second Lien Lenders agree
that any notices required to be given to the Second Lien Lenders shall be
effective if such notice is given to the Second Lien Administrative Agent or
other representative of the Second Lien Lenders. For so long as the Second Lien
Indebtedness is outstanding, the Second Lien Lenders agree to designate and
maintain an agent or other representative for such purposes.
Section 18. Liens.
------
(a) All Liens granted by either of the Borrowers or any Guarantor which at
any time secure the Second Lien Credit Agreement, any Second Lien Note or any
other Second Lien Loan Document are hereby made, and will at all times prior to
the full payment or discharge of the Senior Secured Indebtedness and the payment
in full of all amounts payable and termination of all of the Swap Agreements be,
subject and subordinate to all Liens granted by either of the Borrowers or any
Guarantor which at any time secure the Senior Secured Indebtedness and amounts
payable under Swap Agreements, which subordination shall be effective whether or
not all such Liens securing Senior Secured Indebtedness and amounts payable
under Swap Agreements have been properly recorded, filed and otherwise perfected
prior to all such Liens securing any Second Lien Indebtedness and regardless of
the relative priority of such Liens as determined without regard to this
Agreement. The mortgages included in the Senior Secured Loan Documents do (and
other mortgages, security agreements and similar Senior Secured Loan Documents
may) describe the indebtedness secured thereby in a manner which might include
indebtedness (including amounts payable under Swap Agreements) other than the
Senior Secured Indebtedness. For so long as any Second Lien Indebtedness is
outstanding, as between the Second Lien Lenders and the holders of the Senior
Secured Indebtedness and any Swap Counterparty, only the Senior Secured
Indebtedness and amounts payable under the Swap Agreements shall be deemed to be
secured by any Liens granted under the Senior Secured Loan Documents.
26
(b) Each of the Second Lien Lenders and the Second Lien Administrative
Agent agrees that it will not initiate, join in or prosecute any claim, action
or other proceeding challenging the validity or enforceability of the Senior
Secured Indebtedness or any Swap Agreement or the Liens securing the Senior
Secured Indebtedness and amounts payable under any Swap Agreement.
Section 19. Purchase of the Senior Indebtedness. In the event that (i) a
Blockage Period shall have commenced pursuant to Section 6 hereof and shall be
continuing, or (ii) an event of default under the Second Lien Loan Documents
shall have occurred and is continuing, regardless of whether any notice has been
sent pursuant to Section 12 hereof, or (iii) if any Insolvency Proceeding has
been commenced and is continuing, the Second Lien Lenders may, in theft sole and
absolute discretion, purchase all, but not less than all, of the Senior Secured
Indebtedness from the Senior Secured Lenders by sending a notice to buy the
Senior Secured Indebtedness and Liens securing same from the Senior Secured
Lenders upon the following terms and conditions: (w) the Second Lien Lenders
shall give written notice to the Senior Secured Lenders, informing the Senior
Secured Lenders of the Second Lien Lenders election to purchase the Senior
Secured Indebtedness and Liens securing same (the purchase hereinafter called a
"Purchase" and any such notice being hereinafter called a "Purchase Notice"),
(x) the Second Lien Lenders shall have forty-five (45) days from the date of the
Purchase Notice to consummate the purchase of the Senior Secured Indebtedness
for an amount equal to 100% of the outstanding Senior Secured Indebtedness
(including, without limitation, principal, interest, fees, and expenses
(reimbursable under the Senior Secured Loan Documents) outstanding on the date
of the purchase and fully cash collateralize letters of credit, (y) if based
upon the receipt of a Payment Default Notice or a Non-Payment Default Notice, as
the case may be, said Purchase shall not occur (at Senior Secured Lenders'
election) if all events of default that precipitated the delivery of the Payment
Default Notice or the Non-Payment Default Notice have been waived or cured prior
to the consummation of the Purchase, and (z) upon receipt of payment with
respect to the Purchase as described above, the Senior Secured Lenders shall
execute an assignment of the Senior Secured Indebtedness and Liens securing same
to the Second Lien Lenders without recourse and without representation or
warranty (either express or implied), other than to the effect that the Senior
Secured Lenders at the closing of the Purchase have sold or assigned the Senior
Secured Indebtedness and Liens securing same to the Second Lien Lenders and the
amount of the Senior Secured Indebtedness. Contemporaneously with the
consummation of the Purchase, the Borrowers and the Guarantors shall acknowledge
such assignment and shall do all things necessary to give full force and effect
thereto.
27
Section 20. Legend.
-------
(a) Each Second Lien 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 AGREEMENT DATED AS OF NOVEMBER 14, 2005 BY AND AMONG QUEST
RESOURCE CORPORATION AND QUEST CHEROKEE, LLC, GUGGENHEIM CORPORATE
FUNDING, LLC, AS SENIOR SECURED ADMINISTRATIVE AGENT UNDER THE TERMS OF
THE SENIOR SECURED CREDIT AGREEMENT DATED AS OF NOVEMBER 14, 2005, ON ITS
OWN BEHALF AND ON BEHALF OF THE SENIOR SECURED LENDERS PARTIES THERETO,
GUGGENHEIM CORPORATE FUNDING, LLC, AS SECOND LIEN ADMINISTRATIVE AGENT,
UNDER THE TERMS OF THE SECOND LIEN TERM LOAN AGREEMENT DATED AS OF
NOVEMBER 14, 2005, ON ITS OWN BEHALF AND ON BEHALF OF THE SECOND LIEN
LENDERS PARTIES THERETO, BE SUBORDINATE AND JUNIOR IN RIGHT OF PAYMENT TO
THE PRIOR PAYMENT IN FULL OF ALL SENIOR SECURED INDEBTEDNESS AND ALL
AMOUNTS PAYABLE UNDER ANY SWAP AGREEMENT, THE PROVISIONS OF WHICH
INTERCREDITOR AGREEMENT BEING INCORPORATED HEREIN AND BY THIS REFERENCE
BEING MADE A PART HEREOF.
(b) The Borrowers and each Second Lien Lender or the Second Lien
Administrative Agent or other representative of the Second Lien Lenders shall
cause each mortgage, security agreement and other instrument securing all or any
part of the Second Lien Indebtedness to be conspicuously inscribed with a legend
substantially in the form and substance as follows:
ALL LIENS GRANTED BY THIS INSTRUMENT SHALL, TO THE EXTENT SET FORTH IN THE
1NTERCREDITOR AGREEMENT DATED AS OF NOVEMBER 14, 2005, BY AND AMONG QUEST
RESOURCE CORPORATION AND QUEST CHEROKEE, LLC, GUGGENHEIM CORPORATE
FUNDING, LLC, AS ADMINISTRATIVE AGENT UNDER THE TERMS OF THE SENIOR CREDIT
AGREEMENT DATED AS OF NOVEMBER 14, 2005, ON ITS OWN BEHALF AND ON BEHALF
OF SENIOR SECURED LENDERS PARTIES THERETO, GUGGENHEIM CORPORATE FUNDING,
LLC, ADMINISTRATIVE AGENT UNDER THE TERMS OF THE SECOND LIEN TERM LOAN
AGREEMENT DATED AS OF NOVEMBER 14, 2005, ON ITS OWN BEHALF AND ON BEHALF
OF THE SECOND LIEN LENDERS PARTIES THERETO, BE SUBORDINATE AND JUNIOR TO
ALL LIENS GRANTED BY GRANTOR TO SECURE THE SENIOR SECURED INDEBTEDNESS
REGARDLESS OF THE RELATIVE PRIORITY OF SUCH LIENS AS DETERMINED WITHOUT
REGARD TO SUCH INTERCREDITOR AGREEMENT, THE PROVISIONS OF WHICH
1NTERCREDITOR AGREEMENT BEING INCORPORATED HEREIN AND BY THIS REFERENCE
BEING MADE A PART HEREOF.
28
Section 21. Representations and Warranties. Each of the parties hereto hereby
represents and warrants that (a) it has full power, authority and legal right to
make and perform this Agreement, and (b) this Agreement is its legal, valid and
binding obligation, enforceable against it in accordance with its terms.
Section 22. Successors and Assigns. This Agreement, and the terms, covenants
and conditions hereof, shall be binding upon, and inure to the benefit of the
successors and assigns of Senior Secured Creditor, any Swap Counterparty, Second
Lien Creditor, Borrowers and Guarantors regardless of whether Senior Secured
Creditor, Second Lien Creditor or Guarantors comply with the provisions of
Section 12(b) of the Senior Secured Credit Agreement.
Section 23. GOVERNING LAW. IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY, AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES
THEREOF REGARDING THE CONFLICTS OF LAW, AND ANY APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA. THE PARTIES HERETO CONSENT TO PERSONAL JURISDICTION, WAIVE
ANY OBJECTION AS TO JURISDICTION OR VENUE, AND AGREE NOT TO ASSERT ANY DEFENSE
BASED ON LACK OF JURISDICTION OR VENUE IN ANY STATE OR FEDERAL COURT IN THE
BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK. SERVICE OF PROCESS ON ANY OF THE
PARTIES HERETO IN ANY ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL
BE, EFFECTIVE IF MAILED TO SUCH PARTY AT THE ADDRESS LISTED IN SECTION 24 OF
THIS AGREEMENT.
Section 24. Notices. Whenever it is provided herein that any notice, demand,
request, consent, approval, declaration or other communication shall or may be
given to or served upon any of the parties by another, or whenever any of the
parties desires to give or serve upon another any such communication with
respect to this Agreement, each such notice, demand, request, consent, approval,
declaration, or other communication shall be in writing (including by facsimile)
and shall be deemed to have been duly given and received, for purposes hereof
when delivered by hand or three days after being deposited in the mail, postage
prepaid, certified, return receipt requested, or, in the case of facsimile
notice, when sent, answer back received, in each case, addressed as follows:
29
If to Borrower: Quest Resources Corporation
0000 X. Xxx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Attn: Chief Executive Officer
Telecopy No: (000) 000-0000
With a Copy to: Xxxxxxx Xxxxxxxx Xxxxxx LLP
1201 Walnut
Attn: Xxxxxxx X. Xxxxxxxxxx
Telecopy No: (000) 000-0000
If to Guarantors: To each of them
c/o Quest Resources Corporation
Quest Resources Corporation
0000 X. Xxx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Attn: Chief Executive Officer
Telecopy No: (000) 000-0000
With a Copy to: Xxxxxxx Xxxxxxxx Xxxxxx LLP
1201 Walnut
Attn: Xxxxxxx X. Xxxxxxxxxx
Telecopy No: (000) 000-0000
If to Senior Secured Creditor: Guggenheim Corporate Funding, LLC
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxxx
Telecopy No.: (000) 000-0000
with a copy to: Sidley Austin LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxx, Esq.
Xxxx X. Xxxxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
If to Second Lien Creditor: Guggenheim Corporate Funding, LLC
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxxx
Telecopy No.: (000) 000-0000
30
with a copy to: Sidley Austin LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxx, Esq.
Xxxx X. Xxxxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
If to the Initial Swap Counterparty: BP Corporation North America Inc.
000 Xxxxxxxx Xxxx Xxxxxxxxx
Xxxxxxx, XX 00000
with a copy to: Managing Director Structured Products
North American Gas and Power
Telephone: (000) 000-0000
Telecopy No.: (000) 000-0000
or at such address as may be substituted by notice given as herein provided. The
giving of any notice required hereunder may be waived in writing by the party
entitled to receive such notice. Failure or delay in delivering copies of any
notice, demand, request, consent, approval, declaration or other communication
to the persons designated above to receive copies shall in no way adversely
affect the effectiveness of such notice, demand, request, consent, approval,
declaration or other communication.
Section 25. Further Assurances. Second Lien Creditor hereby covenants and
agrees to take any and all additional actions and execute, deliver, file and/or
record any and all additional agreements, documents and instruments as may be
necessary or as Senior Secured Creditor may from time to time reasonably request
to effect the provisions of this Agreement. Second Lien Creditor hereby agrees
to make reference in all Second Lien Loan Documents to its obligations under
this Agreement.
Section 26. Modifications in Writing. No amendment, modification, supplement,
termination, consent or waiver of or to any provision of this Agreement nor any
consent to any departure therefrom shall in any event be effective unless the
same shall be in writing and signed by or on behalf of each party hereto. Any
waiver of any provision of this Agreement, and any consent to any departure from
the terms of any provision of this Agreement, shall be effective only in the
specific instance and for the specific purpose for which given.
Section 27. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provisions or the remaining provisions of this Agreement.
Section 28. Equitable Remedies. Each party to this Agreement acknowledges
that the breach by it of any of the provisions of this Agreement is likely to
cause irreparable damage to the other party. Therefore, the relief to which any
party shall be entitled in the event of any such breach or threatened breach
shall include, but not be limited to, a mandatory injunction for specific
performance, injunctive or other judicial relief to prevent a violation of any
of the provisions of this Agreement, damages and any other relief to which it
may be entitled at law or in equity.
31
Section 29. Exculpation Provisions. Each of the parties hereto specifically
agrees that it has a duty to read this Agreement and the Security Instruments
and agrees that it is charged with notice and knowledge of the terms of this
Agreement and the Security Instruments; that it has in fact read this Agreement
and is fully informed and has full notice and knowledge of the terms,
conditions, and effects of this Agreement; that it has independently made its
own analysis of the financial condition of the Borrower and the Guarantors and
their assets including, without limitation, their Collateral; that it has been
represented by independent legal counsel of its choice throughout the
negotiations preceding its execution of this Agreement and the Security
Instruments; and has received the advice of its attorney in entering into this
Agreement and the Security Instruments; and that it recognizes that certain of
the terms of this Agreement and the Security Instruments result in one party
assuming the liability inherent in some aspects of the transaction and relieving
the other party of its responsibility for such liability. Each party hereto
agrees and covenants that it will not contest the validity or enforceability of
any exculpatory provision of this Agreement and the Security Instruments on the
basis that the party had no notice or knowledge of such provision or that the
provision is not "conspicuous."
Section 30. WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARIS1NG IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE FEDERAL AND STATE
LAWS TO APPLY, THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE
APPLYING SUCH APPLICABLE LAWS, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS
OR REMEDIES UNDER THIS AGREEMENT.
Section 31. NO ORAL AGREEMENTS. THIS AGREEMENT AND THE LOAN DOCUMENTS EMBODY
TUE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES AND SUPERSEDE ALL
OTHER AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH PARTIES RELATING TO THE SUBJECT
MATTER HEREOF AND THEREOF. THIS AGREEMENT AND THE LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 32. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Signatures given by
facsimile or other electronic transmission shall be binding and effective as
originals.
[Balance of page left blank intentionally.]
32
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their proper and duly authorized officers as of the day and
year first above written.
BORROWERS:
QUEST RESOURCES CORPORATION
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
------------------------------------
Title: CFO
------------------------------------
QUEST CHEROKEE, LLC
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
------------------------------------
Title: CFO
------------------------------------
SIGNATURE PAGE - SUBORDINATION AND INTERCREDITOR AGREEMENT
GUARANTOR:
STP CHEROKEE, INC.,
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
------------------------------------
Title: CFO
------------------------------------
SIGNATURE PAGE - SUBORDINATION AND INTERCREDITOR AGREEMENT
GUARANTOR:
QUEST OIL & GAS CORPORATION
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
------------------------------------
Title: CFO
------------------------------------
SIGNATURE PAGE - SUBORDINATION AND INTERCREDITOR AGREEMENT
GUARANTOR:
QUEST ENERGY SERVICE, INC.
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
------------------------------------
Title: CFO
------------------------------------
SIGNATURE PAGE - SUBORDINATION AND INTERCREDITOR AGREEMENT
GUARANTOR:
PONDEROSA GAS PIPELINE COMPANY, INC.
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
------------------------------------
Title: CFO
------------------------------------
SIGNATURE PAGE - SUBORDINATION AND INTERCREDITOR AGREEMENT
GUARANTOR:
PRODUCERS SERVICE, INCORPORATED
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
------------------------------------
Title: CFO
------------------------------------
SIGNATURE PAGE - SUBORDINATION AND INTERCREDITOR AGREEMENT
GUARANTOR:
X-X GAS GATHERING, LLC
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
CFO
------------------------------------
SIGNATURE PAGE - SUBORDINATION AND INTERCREDITOR AGREEMENT
GUARANTOR:
BLUESTEM PIPELINE, LLC
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
------------------------------------
Title: CFO
------------------------------------
SIGNATURE PAGE - SUBORDINATION AND INTERCREDITOR AGREEMENT
GUARANTOR:
QUEST CHEROKEE OILFIELD SERVICE, LLC
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
------------------------------------
Title: CFO
------------------------------------
SIGNATURE PAGE - SUBORDINATION AND INTERCREDITOR AGREEMENT
SENIOR SECURED CREDITOR:
GUGGENHEIM CORPORATE FUNDING, LLC, as
Administrative Agent
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
------------------------------------
Title: Managing Director
------------------------------------
SECOND LIEN CREDITOR:
GUGGENHEIM CORPORATE FUNDING, LLC, as
Administrative Agent
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
------------------------------------
Title: Managing Director
------------------------------------
SIGNATURE PAGE - SUBORDINATION AND INTERCREDITOR AGREEMENT
SWAP COUNTERPARTY:
BP CORPORATION NORTH AMERICA INC., as
Swap Counterparty
By: /s/ Xxxx Xxxx
------------------------------------
Name: Xxxx Xxxx
------------------------------------
Title: Controller
------------------------------------
SIGNATURE PAGE - SUBORDINATION AND INTERCREDITOR AGREEMENT
