SECOND AMENDED AND RESTATED INTERCREDITOR AND SUBORDINATION AGREEMENT
Exhibit
10.4
SECOND
AMENDED AND RESTATED INTERCREDITOR AND
SUBORDINATION AGREEMENT
THIS
SECOND AMENDED AND RESTATED INTERCREDITOR AND SUBORDINATION
AGREEMENT (this "Agreement") is made as of January 21, 2005, by and between
The Royal Bank of Scotland plc, as agent (in such capacity, and together with
any successor
in such capacity, the "Subordinated Agent") for each of the lenders that is
signatory to, or
which
becomes a signatory to, the Subordinated Credit Agreement (as defined below)
(collectively, the "Subordinated Lenders"), and Société Générale, as agent (in
such capacity as agent,
and together with any successor in such capacity, the "Senior Agent") for each
of the lenders
that is signatory to, or which becomes a signatory to the Senior Credit
Agreement (as defined
below) (collectively, the "Senior Lenders").
XXXXXXX
EXPLORATION COMPANY, a Delaware corporation (the "Parent"). XXXXXXX
OIL &
GAS,
L.P., a Delaware limited partnership ("BOG"), and XXXXXXX, INC., a
Nevada
corporation ("BI") are signatories
hereto solely for the purpose of evidencing their acknowledgment
and consent to the terms and conditions of this Agreement and their agreement
to
make
payment of the Senior Indebtedness and Subordinated Indebtedness (as such terms
are defined
below) in accordance with Section 2.2 of this Agreement.
RECITALS
A. BOG,
as
the borrower, the Senior Lenders and the Senior Agent are parties to that
certain
Third Amended and Restated Credit Agreement dated as of January 21, 2005 (such
agreement,
as the same may be from time to time amended, modified, supplemented, restated,
refinanced or replaced, the "Senior Credit Agreement"), pursuant to which the
Senior Lenders have
made
certain credit available to and on behalf of BOG.
B. BOG
has
executed one or more Mortgages (as such term is defined in the Senior
Credit
Agreement) and delivered financing statements (such mortgages and financing
statements, as
the
same may have heretofore been or may hereafter be from time to time amended,
supplemented
or replaced, the "Senior Mortgages") in favor of the Senior Agent to secure,
inter
alia,
the
obligations outstanding under the Senior Credit Agreement.
C. Each
of
the Parent and BI has guaranteed the Obligations under the Senior Credit
Agreement
pursuant to Article VIII thereof (as the same may be from time to time further
amended,
supplemented or replaced, being referred to herein as the "Senior Guaranty
Agreements"),
in favor of the Senior Agent, for the benefit of the Senior Agent and the Senior
Lenders.
D. Each
of
the Parent, BI and BOG has executed a Second Amended and Restated Pledge
Agreement dated as of January 21, 2005 (as the same may be from time to time
further amended, supplemented or replaced, the "Senior Pledge Agreements")
to
secure, inter
alia, the
obligations
of BOG under the Senior Credit Agreement and the obligations of the Parent
and
BI under
their respective Senior Guaranty Agreements.
E. Of
even
date herewith, BOG has entered into that certain Second Amended andRestated
Subordinated Credit Agreement with the Subordinated Agent and the Subordinated
Lenders
(the "Subordinated Credit Agreement") pursuant to which the Subordinated Lenders
will
make
loans to BOG, such advances to be evidenced by a promissory note executed and
delivered
by BOG in accordance with the Subordinated Credit Agreement (the "Subordinated
Note").
F. In
connection with the execution and delivery of the Subordinated Credit
Agreement,
BOG has executed, or will execute, one or more Second Mortgages (as such term
is
defined
in the Subordinated Credit Agreement) and delivered financing statements (as
the
same may
be
from time to time amended, modified, supplemented or replaced, the "Second
Mortgages")
in favor of the Subordinated Agent to secure, inter
alia, the
obligations outstanding under the Subordinated Loan Documents (as hereinafter
defined).
G. In
connection with the execution and delivery of the Subordinated Credit
Agreement,
each of the Parent and BI has guaranteed the Obligations under the Subordinated
Credit
Agreement pursuant to Article VIII thereof (as the same may be from time to
time
further amended,
supplemented or replaced, being referred to herein as the "Subordinated Guaranty
Agreements"),
in favor of the Subordinated Agent, for the benefit of the Subordinated Agent
and the Subordinated Lenders.
H.
Each
of the
Parent, BI and BOG has executed a Second Amended and Restated Second
Pledge Agreement dated as of January 21, 2005 (as the same may be from time
to
time further amended, supplemented or replaced, the "Second Pledge Agreements")
to secure, inter
alia,
the
obligations of BOG under the Subordinated Credit Agreement and the obligations
of the Parent
and BI under their respective Subordinated Guaranty Agreements.
I.
The
Subordinated Credit Agreement, the Subordinated Note, the Second Mortgages,
the Subordinated Guaranty Agreements, the Second Pledge Agreements, and those
other
documents or instruments now or hereafter given in connection therewith, and
including those
identified on Exhibit "A" attached hereto, as any of such documents or
instruments may be amended, supplemented or replaced as permitted herein
are collectively referred to herein as the "Subordinated
Loan Documents".
M.
Therefore,
(i) in order to comply with the terms and conditions of the Subordinated
Credit Agreement, (ii) at the special insistence and request of the Senior
Agent
and the
Senior Lenders, and (iii) for other good and valuable consideration, the receipt
and sufficiency
of which are hereby acknowledged, the Subordinated Agent, for itself and on
behalf of
the
Subordinated Lenders, the Senior Agent, for itself and on behalf of the Senior
Lenders, and
the
Parent (for itself and on behalf of the other Credit Parties), BOG and BI agree
as follows:
ARTICLE
I
Definitions
Section
1.1 Terms
Defined Above.
As used in this Agreement, the terms defined above
shall have the meanings respectively assigned to them.
Section
1.2 Certain
Definitions.
As used in this Agreement the following terms shall have
the
following meanings, unless the context otherwise requires:
"Affiliate"
of any Person shall mean (i) any Person directly or indirectly controlled by,
controlling or under common control with such first Person, (ii) any director
or
officer of such first Person or of any Person referred to in clause (i) above
and (iii) if any Person in clause (i) above is an individual, any member of
the
immediate family (including parents, spouse and children) of such individual
and
any trust whose principal beneficiary is such individual or one or
more
members of such immediate family and any Person who is controlled by any such
member or trust. For purposes of this definition, any Person which owns directly
or indirectly 20%
or
more of the securities having ordinary voting power for the election of
directors or other governing
body of a corporation or 20% or more of the partnership or other ownership
interests of any other Person (other than as a limited partner of such other
Person) will be deemed to "control"
(including, with its correlative meanings, "controlled by" and "under common
control with")
such corporation or other Person.
"Credit
Party" or "Credit Parties" means BOG, the Parent, BI and each other Guarantor
(as
defined in the Senior Credit Agreement).
"Hedging
Agreement" shall mean any commodity, interest rate or currency swap, cap,
floor,
collar, forward agreement or other exchange or protection agreements or any
option with respect
to any such transaction permitted by the terms of the Senior Credit Agreement,
now or hereafter
existing between BOG and any Senior Lender, or any of its Affiliates, successors
or assigns
(''Senior Hedge Party") entered into while such Senior Hedge Party is a Senior
Lender or an Affiliate of a Senior Lender.
"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 the lien or security interest arising from a mortgage,
encumbrance, pledged, security agreement, conditional sale or trust receipt
or a
lease, consignment or bailment for
security purposes.
"Oil
and
Gas Properties" shall have the meaning attributed to such term in the Senior
Credit
Agreement.
"Payment
Blockage Period" means the period commencing on (i) the date on which a
default
in the payment of any principal of or interest on the Senior Indebtedness occurs
and expiring
on the date on which such default is cured or waived as provided in Section
2.2(a)(iii)(A)
or (ii) the date on which a Payment Blockage Notice (as defined below) is given
by the
Senior Agent or any Senior Lender, and expiring on the date which is 60 days
following the first day of the Payment Blockage Period.
"Person"
shall mean any individual, corporation, company, voluntary association,
partnership,
joint venture, trust, limited liability company, unincorporated organization
or
government
or any agency, instrumentality or political subdivision thereof, or any other
form of entity.
"Property"
shall mean any interest in any kind of property or asset, whether real, personal
or
mixed,
or tangible or intangible.
"Senior
Creditor" shall mean any of the Senior Agent, any Senior Lender or any Senior
Hedge Party.
"Senior
Indebtedness" shall mean the principal balance of all loans from time to time
advanced
to or letters of credit issued for the account of BOG pursuant to the terms
and
conditions
of the Senior Loan Documents, and accrued but unpaid interest thereon, all
fees,
expenses,
reimbursement obligations, liabilities, indemnities or other monetary
obligations of any
Credit Party under any Senior Loan Document, and all swap settlement amounts
or
other amounts due and payable under any Hedging Agreements with a Senior Hedge
Party, whether any
of
the foregoing is (i) absolute or contingent, direct or indirect, joint, several
or independent, (ii)
now
outstanding or owing or which may hereafter be existing or incurred, (iii)
due
or to become
due, or (iv) held or to be held by any Senior Creditor, and all renewals,
extensions, rearrangements,
refundings and modifications thereof permitted by the terms hereof.
"Subordinated
Indebtedness" shall mean the principal balance of all loans from time to
time
advanced to BOG and/or rearranged pursuant to the terms and conditions of the
Subordinated
Loan Documents, and accrued but unpaid interest thereon, and all fees, expenses,
reimbursement obligations, liabilities, indemnities or other monetary
obligations of any Credit Party under any Subordinated Loan Document, whether
any of the foregoing is (i) absolute or contingent, direct or indirect,
joint, several or independent, (ii) now outstanding or owing or which
may
hereafter be existing or incurred, (iii) due or to become due, or (iv) held
or
to be held by
the
Subordinated Agent or any Subordinated Lender, and all renewals, extensions,
rearrangements,
refundings and modifications thereof permitted by the terms hereof.
ARTICLE
II
Subordination
Section
2.1 Agreement
to Subordinate.
The
payment of any and all Subordinated Indebtedness
and the Subordinated Loan Documents is expressly subordinated to the extent
and
in
the
manner set forth in Sections 2.2 through 2.8 hereof to the Senior Indebtedness
and the Senior
Loan Documents.
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Section
2.2
|
Payment
Subordination upon Default.
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(a)
The
Subordinated Agent (for itself and on behalf of the Subordinated Lenders)
agrees, that:
(i)
the Subordinated Indebtedness is subordinate in right of payment,
to
the
extent and in the manner provided in this Agreement, to the prior payment
in
full
of all Senior Indebtedness (whether outstanding on the date hereof or
hereafter
created, incurred, assumed or guaranteed);
(ii)
no Credit Party or any of its Subsidiaries may make any payment
(whether
by redemption, purchase, retirement, defeasance, set-off or otherwise) upon
or
in respect of the Subordinated Indebtedness, until all principal and other
obligations
with respect to the Senior Indebtedness have been paid in full, if:
(A)
a
default
in the payment of any principal of or interest on the
Senior Indebtedness occurs; or
(B)
the
payment of the Subordinated Indebtedness would result in
a
default or event of default under the Senior Loan Documents or any other
default has occurred and is continuing with respect to the Senior Indebtedness
that permits, or with the giving of notice or passage of time or
both
(unless cured or waived) would permit, any Senior Creditor to accelerate
its maturity and the Subordinated Agent receives a notice of the default
(a "Payment Blockage Notice") from any Credit Party or any Senior
Creditor with regard to the foregoing;
(iii)
the Credit Parties may resume payments on and distributions in
respect
of the Subordinated Indebtedness upon:
(A)
in
the
case of a default referred to in Section 2.2(a)(ii)(A), the
date
upon which the default is cured or waived; or
(B)
in
the
case of a default referred to in Section 2.2(a)(ii)(B), the earliest of (1)
the
date on which such nonpayment default or event of default
is cured or waived or (2) the expiration of the applicable Payment Blockage
Period unless the maturity of the Senior Indebtedness has been accelerated;
and
(iv)
upon any payment or distribution of property or securities to creditors
of any Credit Party in a liquidation or dissolution of such person or its
property,
or in an assignment for the benefit of creditors or any marshaling of its
assets
and liabilities:
(A)
the
Senior Creditors shall be entitled to receive payment in full
of
all Senior Indebtedness (including interest after the commencement of
any
such proceeding at the rate specified in the Senior Loan Documents,
whether or not a claim for such interest would be allowed in such
proceeding) before the Subordinated Agent or any Subordinated Lender
shall be entitled to receive any payment with respect to the Subordinated
Indebtedness;
(B)
until
the
Senior Indebtedness is paid in full, any payment or distribution
to which the Subordinated Agent or any Subordinated Lender would
be
entitled shall be made to the Senior Agent for its benefit and the benefit
of
the Senior Creditors; and
(C)
under
the
circumstances described in this clause (iv), any Credit
Party, or any receiver, trustee in bankruptcy, liquidating trustee, agent
or
other similar Person making any payment or distribution of cash or
other
property or securities is authorized or instructed to make any payment
or distribution to which the Subordinated Agent or any Subordinated
Lender would otherwise be entitled (other than securities that
are
subordinated at least to the same extent as the Subordinated Indebtedness)
directly to the Senior Agent for its benefit and the benefit of the Senior
Creditors to the extent necessary to pay all Senior Indebtedness in
full,
after giving effect to any concurrent payment, distribution or provision
thereof to or for any Senior Creditor.
(b)
The Senior Agent and the Senior Lenders shall have the right, in
their sole and
absolute discretion, to waive the conditions of Section 2.2(a) prohibiting
the
payment of
the
Subordinated Indebtedness whether in an enforcement action brought by the Senior
Agent
or
any Senior Lender on the Senior Indebtedness or otherwise.
(c)
The foregoing provisions of Section 2.2
shall
not
impair or prohibit the rights
of
any Subordinated Lender to receive payments in the form of equity securities
or
additional
subordinated debt that is subordinated to the Senior Indebtedness in
accordance
with the terms of this Agreement. Nothing in this Agreement shall Limit or
restrict
the accrual or charging of default interest on any of the Subordinated
Indebtedness
not paid when due. In addition, the foregoing provisions of this Section 2.2
shall
not
prevent the Subordinated Agent or any Subordinated Lender from exercising its
available
remedies upon a default or event of default under the Subordinated Loan
Documents,
subject to (y) the rights of the Senior Creditors to receive distributions
and
payments otherwise payable to the Subordinated Lenders, and (z) the expiration
of any then
applicable Payment Blockage Period.
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Section
2.3
|
Payments
Received or Made in Violation of this
Agreement.
|
(a)
In
the
event the Subordinated Agent or any Subordinated Lender shall receive
any payment or distribution on account of the Subordinated Indebtedness which
it
is
not
entitled to receive under the provisions of Section 2.2. the Subordinated Agent
or such
Subordinated Lender will hold any amount so received in trust for the Senior
Creditors
and will forthwith turn over such payment to the Senior Agent in the form
received by it (together with any necessary endorsement) to be applied to the
Senior Indebtedness.
In the event of any failure by the Subordinated Agent or any Subordinated
Lender
to
make any such endorsement, the Senior Agent is hereby irrevocably authorized
and
granted a power of attorney (which is irrevocable and coupled with interest)
to
make the
same.
(b)
If
any
Credit Party shall become aware that a "Default" or an "Event of Default"
has occurred under the Senior Credit Agreement then such Person shall give
the
Senior
Agent, the other Senior Creditors and the Subordinated Agent prompt written
notice
thereof.
(c)
This Agreement defines the relative rights of the Senior Agent and the
other
Senior Creditors and the Subordinated Agent and the Subordinated Lenders.
Nothing in this Agreement shall: (i) impair, as between or among any of the
Credit Parties,
the Subordinated Agent and the Subordinated Lenders, the obligations of any
of
the
Credit Parties, which are absolute and unconditional, to pay the Subordinated
Indebtedness
in accordance with the terms of the Subordinated Loan Documents, or (ii)
prevent
the Subordinated Agent or any Subordinated Lender from exercising its available
remedies
while no Payment Blockage Period exists.
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Section
2.4
|
Liens
Subordinate.
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(a)
Any
Liens
upon the Property of any Credit Party securing payments of the Subordinated
Indebtedness are and shall be and remain inferior and subordinated to any
Liens
securing payments of the Senior Indebtedness in such Property regardless of
whether
such encumbrances in favor of the Subordinated Agent or any Subordinated
Lender
or
the Senior Agent or any other Senior Creditor presently exist or are hereafter
created
or attached and regardless of the date of execution and delivery or the date
of
filing
or
recording. Any obligation of any Credit Party under the Subordinated Loan
Documents
to deliver possession of any Property to the Subordinated Agent or any
Subordinated
Lender, whether for purposes of perfection or realization of any rights
thereunder
shall be subordinate in all respects to any Credit Party's obligation to deliver
possession of any such Property to the Senior Agent or any other Senior Creditor
under the
Senior Loan Documents for such purposes.
(b)
The
Subordinated Agent (for itself and on behalf of the Subordinated Lenders)
covenants and agrees not to contest or dispute, whether in any proceeding or
otherwise,
the validity, enforceability, attachment, priority or perfected status of any
Lien granted
in favor of the Senior Agent or any other Senior Creditor or take any steps
or
actions,
including the institution of any proceedings, to enjoin or restrain the Senior
Agent
or
any other Senior Creditor from the exercise of the remedies afforded them under
the
Senior Loan Documents or applicable law in and to any of the Senior Lender
Collateral.
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Section
2.5
|
Agreement
Not to Pursue Action.
|
(a)
Following the commencement of any Payment Blockage Period, the
Subordinated
Agent and each Subordinated Lender covenants that it will not, until the earlier
of the date (1) of expiration of the applicable Payment Blockage Period, (2)
the
Senior
Indebtedness is paid in full or the event which gave rise to the Payment
Blockage Period
is
cured or waived, (3) there occurs an event which would cause an automatic
acceleration
of the Subordinated Indebtedness under Section 7.0l(e) of the Subordinated
Credit
Agreement, or (4) the Senior Indebtedness is accelerated and the Senior Agent
or
any
Senior Lender takes any action to enforce any of their respective rights under
the Senior Loan Documents, do any of the following unless the Senior Agent
or
any other Senior
Lender shall also join in such action or commence a similar action: (i) commence
any
action or proceeding against any Credit Party to recover all or any part of
the
Subordinated
Indebtedness or join with any other creditor in bringing any proceedings
against
such Person under any bankruptcy, reorganization, readjustment of debt,
arrangement
of debt, receivership, liquidation or insolvency law or statute of the Federal
or
any
state government, (ii) accelerate the maturity of any Subordinated Indebtedness,
or (iii)
foreclose, repossess, sequester or otherwise take steps or institute any action
or proceeding to enforce any Lien, collateral right, judgment or other
encumbrances on any Property
of any Credit Party held by the Subordinated Agent or any Subordinated Lender,
or
to
take possession of any such Property; provided the foregoing will not prohibit
(A) such
presentment as may be necessary to prevent the discharge of any liable parties
on any
instrument, (B) the filing of claims or notices to prevent the running of any
applicable
statute of limitations, or (C) similar actions necessary to preserve the legal
rights
of
any Subordinated Lender or the Subordinated Agent.
(b)
Notwithstanding
anything contained in this Agreement to the contrary, the Subordinated
Agent and the Subordinated Lenders shall not be prohibited at any time, whether
during a Payment Blockage Period or otherwise, from delivering any notice of
default
to any Credit Party, and the existence of any Payment Blockage Period shall
not
prevent,
xxxxx or delay the running of any applicable cure period under the Subordinated
Loan
Documents following any default or notice of any default under the Subordinated
Loan
Documents.
(c)
The
Senior Lenders and the Senior Agent may enforce no more than two (2)
Payment Blockage Periods during any 365 day period.
Section
2.6. Rights
of the Senior Agent and the Senior Lenders. The
Senior Agent and the
Senior Lenders may, at any time, and from time to time, without the consent
of
or notice to the
Subordinated Agent or any Subordinated Lender, without incurring responsibility
to the Subordinated Agent and/or any Subordinated Lender, without impairing
or
releasing any of the Senior
Agent's or any Senior Lender's rights or any of the obligations of the
Subordinated Agent and the Subordinated Lenders under this
Agreement:
(a)
change the amount, manner, place or terms of payment, or change or extend
for any period the time of payment of, or renew, increase or otherwise alter
the
Senior
Indebtedness or any Senior Loan Document or any other instrument or agreement
now
or
hereafter executed or evidencing any of the Senior Indebtedness in any manner,
or
enter
into or amend in any manner any other agreement relating to the Senior
Indebtedness,
except as follows:
(i)
to increase any rate of interest except with respect to imposing the
default
rate as provided for in the Senior Credit Agreement on the date hereof;
or
(ii)
to further restrict (beyond those restrictions in the Senior Credit
Agreement
as in effect on the date hereof) any payment of dividends or similar
distributions
by any subsidiary of the Parent to the Parent or the granting of any
Lien
or
other security interest securing payment of the Subordinated Indebtedness or
any
guarantees of the Subordinated Indebtedness; or
(iii)
to restrict any payments of the Subordinated Indebtedness except
as
provided in Section 2.2 above;
(b)
sell,
exchange, release or otherwise deal with all or any part of any Property
by whomsoever at any time pledged or mortgaged to secure, howsoever securing,
the Senior Indebtedness;
(c)
release
any Person liable in any manner for payment or collection of the Senior
Indebtedness;
(d)
exercise
or refrain from exercising any rights against any Credit Party or others,
including the Subordinated Agent and the Subordinated Lenders; and
(e) apply
any
sums received by any Senior Creditor, paid by any Person and however
realized, to payment of the Senior Indebtedness in such a manner as the Senior
Agent
or
any other Senior Creditor, in their sole discretion, may deem
appropriate.
Section
2.7
Subordination
May Not Be Impaired by the Parent, BOG or any Credit Parties.
No right
of any present or future Senior Creditor to enforce the subordination as
provided
in this Agreement will at any time or in any way be prejudiced or impaired
by
any act or
failure to act on the part of any Credit Party or by any act or failure to
act,
in good faith, by the Senior
Agent or any other Senior Creditor, or by any noncompliance by any Credit Party
with the terms of any Subordinated Loan Document, regardless of any knowledge
thereof that the Senior
Agent or any other Senior Creditor may have or otherwise be charged with. The
provisions
of this Section 2.7 are intended to be for the benefit of, and shall be
enforceable directly
by, any Senior Creditor.
Section
2.8.
Authorization
to File Proof of Claim.
If the
Subordinated Agent or any Subordinated
Lender does not file a proper proof of claim or proof of debt in the form
required in any
proceeding referred to in Section 2.2(a)(iv) hereof at least 30 days before
the
expiration of the
time
to file such claim, the Senior Agent is hereby authorized to file an appropriate
claim for and on behalf of the Subordinated Agent and the Subordinated
Lenders.
ARTICLE
III
Representations,
Warranties and Covenant
Section
3.1.
Representations
of Subordinated Agent.
The
Subordinated Agent represents and
warrants that:
(a)
neither
the execution nor delivery of this Agreement nor fulfillment of or compliance
with the terms and provisions hereof will conflict with, or result in a breach
of the terms, conditions or provisions of, or constitute a default under, any
agreement or instrument
to which it is now subject;
(b)
it
has
all requisite authority (for itself and as agent acting on behalf of the
Subordinated
Lenders) to execute, deliver and perform its obligations under this Agreement;
and
(c)
this
Agreement constitutes the legal, valid, and binding obligation of the
Senior
Agent and the Subordinated Agent, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency or similar laws and general
principles of equity.
Section
3.2.
Representations
of Senior Agent.
The
Senior Agent represents and warrants
that:
(a)
neither
the execution nor delivery of this Agreement nor fulfillment of or compliance
with the terms and provisions hereof will conflict with, or result in a breach
of the terms, conditions or provisions of, or constitute a default under, any
of
the Senior Loan
Documents or any other agreement or instrument to which it is now
subject;
(b)
it
has
all requisite authority for itself and as agent acting on behalf of the Senior
Lenders to execute, deliver and perform its and the Senior Lenders' obligations
under
this Agreement; and
(c)
this
Agreement constitutes the legal, valid, and binding obligation of the
Senior
Agent, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws and general principles of
equity.
Section
3.3 Subordinated
Agent, Subordinated Lender Covenants.
The
Subordinated Agent
(for itself and on behalf of each Subordinated Lender) covenants that so long
as
any of the Senior
Indebtedness remains outstanding and until the termination of the "Commitments"
(as defined
in the Senior Credit Agreement), it will:
(a)
cause
any
note, debenture, or instrument evidencing or securing the Subordinated
Indebtedness to contain a statement or legend to the effect that such note,
debenture, of other instrument is subordinated to the Senior Indebtedness in
the
manner and
to
the extent set forth in this Agreement;
(b)
not
assign or transfer to others the Subordinated Indebtedness or any claim
it
has or
may have against any Credit Party as long as any of the Senior Indebtedness
remains
outstanding, unless such assignment or transfer is expressly made subject to
this Agreement;
(c)
not
amend, supplement or otherwise modify the terms of the Subordinated
Indebtedness, (including, without limitation, the Subordinated Loan Documents)
without the
express written consent of the Senior Agent, which consent will not be
unreasonably withheld,
which has the effect of (i) increasing the outstanding principal amount of
the
Subordinated
Indebtedness above $20,000,000, and (ii) increasing the rate of interest or
any
fees
charged on the Subordinated Indebtedness.
(d) not
ask
for, xxx for, take, or demand any payment on such indebtedness, except
as
permitted hereby; and
(e)
execute
any and all other instruments necessary as reasonably required by the
Senior Agent or the Senior Lenders to effect the subordinations intended
hereby.
ARTICLE
IV
Miscellaneous
Section
4.1
Acceptance
by the Senior Creditors.
The
foregoing subordination provisions
are, and are intended to be, an inducement and a consideration to each Senior
Creditor,
whether such Senior Creditor's Senior Indebtedness is created or acquired before
or after
the
issuance of Subordinated Indebtedness, to acquire and hold, or continue to
hold,
such Senior Indebtedness and each such Senior Creditor shall be deemed
conclusively to have relied on
such
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such
Senior Indebtedness. Notice of acceptance of this Agreement is waived,
acceptance on the part
of
the Senior Creditors being conclusively presumed by their request for this
Agreement and delivery
of the same to them.
Section
4.2
Assignment
by any Senior Creditor. This Agreement may be assigned by any
Senior Creditor in connection with any assignment or transfer of the Senior
Indebtedness or any replacement or refinancing of the Senior Loan
Documents.
Section
4.3
Notice.
All
notices and other communications provided for herein shall be given
or
made by telecopy, courier or U.S. Mail or in writing and telecopied, mailed
or
delivered to the intended recipient at the "Address for Notices" specified
below
its name on the signature pages
hereof or at such other address as shall be designated by such party in a notice
to each other
party; and in the case of any Senior Creditor in care of the Senior Agent
at the
following address:
Société
Générale, as Agent
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Telecopier
No.: (000) 000-0000
Telephone
No.: (000) 000-0000
Attention:
Xxxxxx Xxxxxx
or
at
such other address as shall be designated by the Senior Agent in a notice to
each other parry.
Except as otherwise provided in this Agreement, all such communications shall
be
deemed to
have
been duly given when transmitted by telecopier or personally delivered or,
in
the case of a
mailed
notice, five (5) days after the date deposited in the mails, postage prepaid,
in
each case given or addressed as aforesaid.
Section
4.4 Amendments
and Waivers.
The
Senior Agent's, the Subordinated Agent's,
any other Senior Creditor's or any Subordinated Lender's acceptance of partial
or delinquent payments or any forbearance, failure or delay by any of the
foregoing in exercising any right, power or remedy hereunder shall not be deemed
a waiver of any obligation of any Credit
Party or any Senior Creditor, Subordinated Agent or any Subordinated Lender,
or
of any right,
power or remedy of any Senior Creditor, the Subordinated Agent or any
Subordinated Lender;
and no partial exercise of any right, power or remedy shall preclude any other
or further exercise
thereof. The Subordinated Agent and the Subordinated Lenders hereby agree that
if the Senior
Agent or any Senior Lender agrees to a waiver of any provision hereunder, or
an
exchange
of or release of collateral, or the addition or release of any Person as a
Credit Party, any
such
action shall not constitute a waiver of any of the Senior Creditor's other
rights or of the Subordinated Agent's or any Subordinated Lender's obligations
hereunder. This Agreement may be
amended only by an instrument in writing executed jointly by the Subordinated
Agent and the Senior
Agent and may be supplemented only by documents delivered or to be delivered
in
accordance
with the express terms hereof.
Section
4.5
Parties
to the Agreement.
The
provisions of this Agreement are and are intended solely for the purpose of
defining the relative rights of the Subordinated Agent, the Subordinated
Lenders and the Senior Creditors, and are solely for the benefit of the Senior
Creditors,
the Subordinated Agent and the Subordinated Lenders (including their respective
assignees
and successors) and may not be relied upon or enforced by any other Person
except as otherwise
provided in Section 4.11 below. Each Credit Party has joined herein solely
for
the purpose
of evidencing its acknowledgment and consent to the terms and conditions of
this
Agreement
and their agreement to make payments of the Senior Indebtedness and Subordinated
Indebtedness in accordance with the terms of Section 2.2. The Parent shall
cause
any Person that becomes
a
Credit Party after the date hereof to execute and deliver a joinder to this
Agreement (a "Joinder
Agreement") and shall promptly deliver to the Senior Agent and the Subordinated
Agent
an
original executed copy of such Joinder Agreement, together with evidence of
corporate authority
to enter into and such legal opinions in relation to such Joinder Agreement
as
the Senior
Agent or Subordinated Agent may reasonably request.
Section
4.6
Reinstatement.
To the
extent that any payments on the Senior Indebtedness
or proceeds of any collateral are subsequently invalidated, declared to be
fraudulent or
preferential, set aside or required to be repaid by any Senior Creditor to
a
trustee, debtor in possession,
receiver or other Person under any bankruptcy law, common law or equitable
cause, then
to
such extent, obligations hereunder with respect to the Senior Indebtedness
so
satisfied shall
be
revived and continue as if such payment or proceeds had not been received and
the Senior
Creditors' Liens, interests, rights, powers and remedies under the Senior Loan
Documents and
this
Agreement shall continue in full force and effect. In such event, each Senior
Loan Document
and this Agreement shall be automatically reinstated and the Credit Parties,
the
Subordinated Agent and the Subordinated Lenders shall take such action as may
be
reasonably requested
by the Senior Creditors to effect such reinstatement. Any Senior Creditor which
has assigned
its rights hereunder shall continue to be entitled to the benefits of this
Section notwithstanding
such assignment.
Section
4.7
Governing
Law.
THIS
AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF
NEW YORK.
Section
4.8
ENTIRE
AGREEMENT.
THIS
WRITTEN AGREEMENT EMBODIES THE
ENTIRE AGREEMENT AND UNDERSTANDING AMONG THE SENIOR AGENT AND
THE
SENIOR CREDITORS, THE SUBORDINATED AGENT AND THE SUBORDINATED
LENDERS AND SUPERSEDES ALL OTHER AGREEMENTS AND UNDERSTANDINGS
BETWEEN SUCH PARTIES RELATING TO THE SUBJECT MATTER
HEREOF AND THEREOF. THIS WRITTEN AGREEMENT REPRESENTS 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
4.9
References
and Title.
All
references in this Agreement to articles, sections,
subsections and other subdivisions refer to the articles, sections, subsections
and other subdivisions of this Agreement unless expressly provided otherwise.
Titles appearing at the beginning
of any subdivisions are for convenience only and do not constitute any part
of
such subdivisions
and shall be disregarded in construing the language contained in such
subdivisions.
Section
4.10 Severability.
All
rights, remedies and powers provided herein may be exercised
only to the extent that the exercise thereof does not violate any applicable
provision of law;
and
all the provisions hereof are intended (a) to be subject to all applicable
mandatory provisions
of law which, may be controlling and (b) to be limited to the extent necessary
so that they
will
not render this Agreement invalid under the provisions of any applicable law.
If
any term
or
provision of this Agreement shall be determined to be illegal or unenforceable,
all other terms and provisions of this Agreement shall nevertheless remain
effective and shall be enforced to
the
fullest extent permitted by applicable law and the parties agree to promptly
meet and negotiate
in good faith to establish new arrangements which have the effect of preserving
the economic
and commercial benefits established by this Agreement.
Section
4.11 Subrogation.
Subject
to the terms of Section 4.6, after all Senior Indebtedness
is paid in full and until the Subordinated Indebtedness has been paid in full,
the Subordinated
Lender shall be subrogated to the rights of the Senior Creditors to receive
distributions
and payments applicable to the Senior Indebtedness to the extent that
distributions and payments otherwise payable to the Subordinated Lenders have
been applied to the payment of Senior Indebtedness. A payment or distribution
made under this Agreement to any Senior Creditor that otherwise would have
been
made to the Subordinated Agent or any Subordinated Lender is not, as between
or
among any of the Credit Parties and the Subordinated Agent and Subordinated
Lenders, a payment on the Subordinated Indebtedness.
Section
4.10 Hedging
Agreements.
Notwithstanding anything to the contrary herein, no
Senior
Hedge Party shall have any voting rights under this Agreement as a result of
the
existence
of obligations owed to it under any such Hedging Agreements.
Section
4.11 Conflicts
between the Senior Loan Documents and the Subordinated Loan Documents.
Notwithstanding the terms and conditions of the Subordinated Loan Documents,
whenever
any Credit Party is required to take a specific action under the Senior Loan
Documents with
respect to particular Collateral and is at tie same time required to take a
different and conflicting
action under the Subordinated Loan Documents with respect to the same Collateral
and
it is
not possible to take both actions, then the Credit Party will take the action
required under
the
Senior Loan Documents rather than the action required under the Subordinated
Loan Documents
(unless the Senior Agent and the Subordinated Agent both instruct the Credit
Party to take
the
action required under the Subordinated Loan Documents). No Credit Party shall
be
deemed
in
default under the Subordinated Loan Documents as a result of complying with
this
Section 4.11, and each of the Credit Parties is an express third-party
beneficiary of this Section 4.11.
|
WITNESS
THE EXECUTION HEREOF, as of this the 21st day of January,
2005.
|
|||
|
SENIOR
AGENT:
|
|||
|
SOCIÉTÉ
GÉNÉRALÉ,
|
|||
|
as
the Senior Agent and the Collateral Agent
|
|||
|
By:
|
/s/
Xxxxxx Xxxxxx
|
||
|
Xxxxxx
Xxxxxx
|
|||
|
Vice
President
|
|||
|
SUBORDINATED
AGENT:
|
|||
|
THE
ROYAL BANK OF SCOTLAND plc,
|
|||
|
as
the Subordinated Agent,
|
|||
|
By:
|
/s/
Xxxxxxx Xxxxxxx
|
||
|
Xxxxxxx
Xxxxxxx
|
|||
|
|
Senior
Vice President
|
||
|
Address
for the Subordinated Agent
|
|||
|
and
Subordinated Lender:
|
|||
|
000
Xxxx Xxxxxx
|
|||
|
Xxx
Xxxx, Xxx Xxxx 00000
|
|||
|
Attention:
Xxxxxx Xxxx
|
|||
|
Fax:
(000) 000-0000
|
|||
|
Phone:
(000) 000-0000
|
|||
|
with
a copy to:
|
|||
|
Xxxxxxx
Xxxxxxx, Senior Vice President
|
|||
|
000
Xxxxxx Xxxxxx, Xxxxx 0000
|
|||
|
Xxxxxxx,
Xxxxx 00000
|
|||
|
Phone:
(000) 000-0000
|
|||
|
Fax:
(000) 000-0000
|
|||
|
XXXXXXX
EXPLORATION COMPANY,
a
Delaware corporation
|
|||
|
By:
|
/s/
Xxxxxx X. Xxxxxxx, Xx.
|
||
|
|
Xxxxxx
X. Xxxxxxx, Xx.
|
||
|
Executive
Vice President and Chief Financial Officer
|
|||
|
XXXXXXX
OIL & GAS, L.P.,
a
Delaware limited partnership
|
|||
|
By:
|
Xxxxxxx,
Inc., its General Partner
|
||
|
By:
|
/s/
Xxxxxx X. Xxxxxxx, Xx.
|
||
|
Xxxxxx
X. Xxxxxxx, Xx.
|
|||
|
Executive
Vice President and Chief Financial Officer
|
|||
|
XXXXXXX,
INC.,
a
Nevada corporation
|
|||
|
By:
|
/s/
Xxxxxx X. Xxxxxxx, Xx.
|
||
|
Xxxxxx
X. Xxxxxxx, Xx.
|
|||
|
Executive
Vice President and Chief Financial Officer
|
|||
EXHIBIT
A
Subordinated
Loan Documents
|
1.
|
The
Subordinated Credit Agreement.
|
|
2.
|
Subordinated
Note in the aggregate face amount of $20,000,000 issued by BOG
in favor
of
the Subordinated Lender.
|
|
3.
|
Second
Mortgage, Deed of Trust, Assignment of Production, Security Agreement
and
Financing
Statement agreements dated as of March 21, 2003 and thereafter
executed by
BOG in favor of the Subordinated Agent, for the benefit of the
Subordinated Agent and the
Subordinated Lenders, as amended by the First Amendment to Second
Mortgage, Deed
of Trust, Assignment of Production, Security Agreement and Financing
Statement dated
as of January__,
2005.
|
|
4.
|
Second
Amended and Restated Second Pledge Agreement dated as of January
21, 2005
executed
by the Parent in favor of the Subordinated Agent for the benefit
of the
Subordinated
Agent and the Subordinated Lenders.
|
|
5.
|
Second
Amended and Restated Second Pledge Agreement dated as of January
21, 2005
executed
by BI in favor of the Subordinated Agent for the benefit of the
Subordinated Agent
and the Subordinated Lenders.
|
|
6.
|
Financing
Statements in connection with any of the items
above.
|
|
7.
|
Any
guaranty agreements, pledges, security agreements or financing
statements
that may hereafter
be executed by any subsidiaries of the Parent in favor of the Subordinated
Agent
or any Subordinated Lender.
|
