Exhibit 4.8
EXECUTION COPY
SECOND AMENDED AND RESTATED INTERCREDITOR AGREEMENT
THIS SECOND 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 June 9, 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, L.L.C., 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") and each Swap
Counterparty (as defined below) under each Swap Agreement (as defined below)
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"), Guggenheim Corporate
Funding LLC, a Delaware limited liability company as administrative agent (in
such capacity, the "Third Lien Administrative Agent"), for itself and for each
of the lenders (the "Third Lien Lenders") that is or becomes a party to the
Third Lien Credit Agreement, as defined below (collectively, the "Third 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, the Second Lien
Administrative Agent, and the Third Lien Administrative Agent, the "Agents") for
the Senior Secured Creditor, the Second Lien Creditor, the Third 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, the Second Lien
Lenders and the Third 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 (as defined
below). This Agreement amends and restates in its entirety that certain Amended
and Restated Intercreditor Agreement dated as of February 7, 2006 (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;
WHEREAS, Second Lien Creditor has made credit accommodations available
to Borrowers pursuant to the terms and provisions of a Second Lien Credit
Agreement;
WHEREAS, Third Lien Creditor has made credit accommodations available to
Borrowers pursuant to the terms and provisions of a Third 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, as a condition for permitting the execution of the Third Lien
Credit Agreement, the Senior Secured Creditor and the Second Lien Creditor
each required that the Third 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 the Second Lien Creditor's
liens under the Second Lien Credit Agreement, and that the Third Lien
Creditor make the arrangements set forth herein with respect to right to
payment and claims against the Borrowers and the Guarantors;
WHEREAS, certain of 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, Second Lien Administrative Agent on
behalf of the Second Lien Lenders and the Swap Counterparties, 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, the Second Lien Lenders and the Third Lien
Lenders desire to modify and amend certain provisions set forth in the
Original Agreement regarding their respective rights in the Collateral and
the application of proceeds thereof and to add the Third Lien Lender as a
party and to appoint Guggenheim Corporate Funding, LLC, as Collateral Agent
under the Security Documents to hold the Liens in trust for the benefit of
the Third Lien Creditor, subject to the terms and conditions hereof;
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.
2
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:
"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, the Second
Lien Indebtedness pursuant to the Second Lien Loan Documents and/or the
Third Lien Indebtedness pursuant to the Third 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.
"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, the Second Lien
Indebtedness and the Third 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).
"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
3
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.
"Loan Parties" shall mean, individually and collectively,
Borrowers, Guarantors and any other Person (other than the Senior
Secured Creditor, Swap Counterparties, the Second Lien Creditor and the
Third Lien Creditor) which is at any time a party to any Senior Secured
Loan Documents, Second Lien Loan Documents or Third Lien Loan Documents
or individually, a "Loan Party".
"Notice of Default" means any Senior Lender Payment Default Notice,
Senior Lender Non-Payment Default Notice, Second Lien Lender Payment
Default Notice, Second Lien Lender Non-Payment Default Notice, or Third
Lien Enforcement 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 plus (iv) the
principal amount of the Third 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
4
Indebtedness and, if applicable, the Second Lien Indebtedness and the Third
Lien Indebtedness outstanding at the time of the issuance thereof
(including any refinancing of Senior Secured Indebtedness and, if
applicable, the Second Lien Indebtedness and the Third Lien 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 and/or Third 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.
"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) Second Lien 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) Senior
Secured Revolving 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, Senior Secured Revolving 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) Senior
Secured Term 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.
"Required Third Lien Lenders" means (i) Third Lien Lenders holding,
in the aggregate, outstanding Third Lien Indebtedness representing more
than 50% of all outstanding Third Lien Indebtedness and (ii) the Third
Lien Administrative Agent.
"Second Lien Acceleration Notice" means a written notice from or on
behalf of the Second Lien Administrative Agent to the Third Lien Lenders
or the Third Lien Administrative Agent or other representative
designated pursuant to Section 20 hereof that a Second Lien Indebtedness
Acceleration shall have occurred and is continuing.
"Second Lien Blockage Period" means, with respect to any Second
Lien Indebtedness Acceleration, the period from and including the date
of receipt by the Third Lien Administrative Agent or the Third Lien
Lenders or other representative designated pursuant to Section 20 hereof
of a Second Lien Acceleration Notice relating thereto until the first to
occur of (a) the date upon which the Second Lien Indebtedness has been
paid in full in cash, (b) the date on which the Second Lien Indebtedness
Default which
5
provides the basis for such Second Lien Acceleration Notice has been waived
in writing by the applicable holder or holders of the Second Lien
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 Third Lien
Lenders or the Third Lien Administrative Agent or other representative
designated pursuant to Section 20 hereof shall have received notice in
writing of the termination of such Second Lien Blockage Period.
"Second Lien Credit Agreement" means that certain Amended and
Restated Second Lien Term Loan Agreement dated 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 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 Enforcement Action" means, with respect to any Second
Lien Indebtedness: any enforcement of any right or remedy with respect
to the Collateral, 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 a
Second Lien Enforcement Action: (a) acceleration of any of the Second
Lien Indebtedness in accordance with Section 12(a) hereof or (b) actions
by the Second Lien Creditor to obtain possession of or receive
Reorganization Securities.
"Second Lien 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.
"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.
6
"Second Lien Indebtedness Acceleration" means, with respect to the
Second Lien Indebtedness, that the holder or holders of such Second Lien
Indebtedness, or an agent or representative on behalf of such holder or
holders, have caused the maturity of such Second Lien Indebtedness to be
accelerated or the Second Lien Indebtedness has otherwise been
accelerated.
"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 Lender Non-Payment Default" means the occurrence of
any event under any Second Lien Loan Document, not constituting a Second
Lien Lender Payment Default, which gives the holder(s) of such Second
Lien Indebtedness, or an agent or representative acting on behalf of
such holder(s), the right to cause the maturity of such 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 Lender Non-Payment Default Notice" means a written
notice from or on behalf of the Second Lien Administrative Agent that a
Second Lien Lender Non-Payment Default has occurred and is continuing
which identifies such Second Lien Lender Non-Payment Default and
specifically designates such notice as a "Second Lien Lender Non-Payment
Default Notice."
"Second Lien Lender Payment Default" means a default by the
Borrowers or any Guarantor in the payment of any amount owing with
respect to the Second Lien 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.
"Second Lien Lender Payment Default Notice" means a written notice
from or on behalf of the Second Lien Administrative Agent that a Second
Lien Lender Payment Default with respect to Second Lien Indebtedness has
occurred and is continuing, and specifically designates such notice as a
"Second Lien Lender Payment Default Notice".
"Second Lien Lender Standstill Period" means the period beginning
with the date of delivery of the notice by the Third Lien Lenders or the
Third Lien Administrative Agent as set forth in Section 12(c) hereof and
ending on the earliest of (a) the date when the Third Lien Indebtedness
Default giving rise to such Second Lien Lender Standstill Period has
been cured or waived in writing, (b) the date upon which the Senior
Secured Indebtedness and the Second Lien 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
7
any Affiliate thereof have expired, terminated or been fully collateralized
in cash, (c) the date on which the Senior Secured Indebtedness and the
Second Lien 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 Second Lien Lender
Standstill Periods shall not exceed 120 days in any consecutive 365 day
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 Persons 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 "Loan Documents" as such term is defined in the Second Lien Credit
Agreement, 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, the Third Lien Administrative Agent, each
Swap Counterparty, each of the Senior Secured Lenders, the Second Lien
Lenders and the Third 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, the Second Lien Indebtedness and/or the Third Lien
Indebtedness.
"Senior Lender 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 19 and the Third Lien
Administrative Agent or the Third Lien Lenders or other representative
designated pursuant to Section 20 hereof that a Senior Secured
Indebtedness Acceleration shall have occurred and is continuing.
8
"Senior Lender 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 19 and the Third Lien Administrative Agent or the Third Lien
Lenders or other representative designated pursuant to Section 20 hereof
of a Senior Lender 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 Senior Lender
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 19 hereof and the Third Lien Administrative Agent or the Third
Lien Lenders or other representative designated pursuant to Section 20
hereof shall have received notice in writing of the termination of such
Senior Lender Blockage Period.
"Senior Lender Lien Enforcement Action" means any action, whether
legal, equitable, judicial, non-judicial, or otherwise, to enforce any
Lien now or in the future securing the Senior Secured Indebtedness,
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 all
or any of the Senior Secured Indebtedness.
"Senior Lender Non-Payment Default" means the occurrence of any
event under any Senior Secured Loan Document, not constituting a Senior
Lender 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.
"Senior Lender Non-Payment Default Notice" means a written notice
from or on behalf of the Senior Secured Indebtedness Representative that
a Senior Lender Non-Payment Default has occurred and is continuing which
identifies such Senior Lender Non-Payment Default and specifically
designates such notice as a "Senior Lender Non-Payment Default Notice."
"Senior Lender 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.
9
"Senior Lender Payment Default Notice" means a written notice from
or on behalf of the Senior Secured Indebtedness Representative that a
Senior Lender Payment Default with respect to Senior Secured
Indebtedness has occurred and is continuing, and specifically designates
such notice as a "Senior Lender Payment Default Notice".
"Senior Lender 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 Senior Lender 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 Senior
Lender Standstill Periods shall not exceed 120 days in any consecutive
365 day period.
"Senior Secured Credit Agreement" means that certain Amended and
Restated Senior Credit Agreement dated as of February 7, 2006 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.
"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, at any
time, exceed (i) $100,000,000 minus (ii) the aggregate amount of the net
proceeds received from any sale of assets that is applied as described
in Section 9.12(d) of the Second Lien Credit Agreement to repay or
retire term loan debt under the Senior Secured Credit Agreement or
permanently reduce the revolving commitments thereunder (the difference
between (i) and (ii) is the "Senior Cap"), and provided further, that if
the aggregate principal amount of Senior Secured Indebtedness
(constituting principal and letter of credit reimbursement obligations)
shall exceed the Senior Cap, then the subordination of Liens with
respect to the Second Lien Indebtedness and the Third Lien Indebtedness,
as contemplated by this Agreement to the Senior Secured Indebtedness of
the Senior Cap or less, shall not be
10
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 Secured 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 Senior Lender Payment
Default or a Senior Lender 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
Secured 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.
"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.
11
"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.
"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.
"Third Lien Credit Agreement" means that certain Third Lien Term
Loan Agreement dated 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 Third 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 Third Lien Credit Agreement.
"Third Lien Creditor" means, individually and collectively, Third
Lien Creditor and all other present or future holders of all or part of
the Third Lien Indebtedness, and their respective successors and assigns.
"Third Lien Enforcement Action" means, with respect to any Third
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 Third 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
Third 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 Third
12
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 a Third Lien Enforcement Action: (a) acceleration of any
of the Third Lien Indebtedness following acceleration of any of the Senior
Secured Indebtedness or Second Lien Indebtedness (provided that such
acceleration of Senior Secured Indebtedness or Second Lien Indebtedness has
not previously been rescinded) or (b) actions by the Third Lien Creditor to
obtain possession of or receive Reorganization Securities.
"Third Lien Enforcement Notice" means a written notice which states
that a default or an event of default under any provision of the Third
Lien Indebtedness has occurred and that Third Lien Creditor desires to
take enforcement action as a consequence thereof.
"Third Lien Indebtedness" shall mean and include all indebtedness,
obligations and liabilities of any Loan Party under the Third 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 Third Lien Loan Documents.
"Third Lien Indebtedness Default" means the occurrence of any event
under any Third Lien Loan Document which gives the Third Lien Creditor,
or an agent or representative acting on behalf thereof, the right under
the terms of the Third Lien Credit Agreement to cause the maturity of
the Third 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.
"Third Lien Lenders" means all Persons which now or hereafter
constitute a "Lender" under the Third Lien Credit Agreement and their
respective successors and assigns, and all Persons refinancing any Third
Lien Indebtedness and their respective successors and assigns.
"Third Lien Loan Documents" means, collectively, (a) the Third Lien
Credit Agreement, (b) the Third Lien Notes, if requested, and any other
note, bond or other instrument evidencing Third Lien Indebtedness, (c)
all mortgages, security agreements, pledge agreements or financing
statements evidencing, creating or perfecting any Lien to secure the
Third Lien Credit Agreement and the Third Lien Notes, if requested, in
any way, (d) all guarantees thereof, (e) all other documents,
instruments or agreements relating to the Third Lien Credit Agreement or
the Third Lien Notes now or hereafter executed or delivered by any Loan
Party, including without limitation each of the other "Loan Documents"
as such term is defined in the Third Lien Credit Agreement, and (f) all
renewals, extensions, amendments, modifications or restatements of the
foregoing.
"Third Lien Notes" means each promissory note requested by a Third
Lien Lender and issued under the Third Lien Credit Agreement evidencing
the term loans
13
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.
"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 Third Lien
Loan Documents, the Liens securing the Third Lien Indebtedness shall be
subordinate and junior to the Liens securing all or any part of any of the
Senior Secured Indebtedness and the Second Lien Indebtedness to the extent and
in the manner provided in this Agreement and each Third 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 Second Lien Loan Documents
subject to Section 21(a) hereof, 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.
(c) 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 and the obligations owed to the Swap Counterparties under the
Swap Agreements 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.
(d) 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.
(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. Pursuant to the Security Documents executed by, or in favor
of, Third Lien Administrative Agent, the Loan Parties have granted Liens in
favor of the Third Lien Administrative Agent in the Collateral. Each of the
Senior Secured Creditor, the Second Lien Creditor, the Swap Counterparty and the
Third Lien Creditor 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
14
shall have all of the rights and obligations of the Collateral Agent hereunder
and of the Senior Administrative Agent, the Second Lien Administrative Agent and
the Third 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, Third Lien Administrative Agent or any Lender under
the Security Documents;
(ii) to distribute to Senior Administrative Agent, Second Lien
Administrative Agent and Third 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, Second Lien Administrative Agent
and/or Third 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, Second Lien
Administrative Agent and Third 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,
Second Lien Administrative Agent and/or Third 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,
Second Lien Administrative Agent and/or Third Lien Administrative Agent;
(v) to act on behalf of Lenders and the Swap Counterparties at the
direction of Senior Administrative Agent, Second Lien Administrative Agent
and/or Third 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
Senior Lender Lien Enforcement Actions and, subject to the terms and
conditions of this Agreement to exercise on behalf of Second Lien
Administrative Agent all Second Lien Enforcement Actions and on behalf of
the Third Lien Administrative Agent all Third 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, Second Lien Administrative Agent and/or Third Lien
Administrative Agent as are reasonably incident to any powers granted to
Collateral Agent hereunder.
15
(c) Notwithstanding any provision to the contrary contained elsewhere
herein or in any Senior Secured Loan Document, Swap Agreement, Second Lien Loan
Document or Third 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, Second
Lien Loan Document or Third 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 any Collateral (i)
if the property subject to such Lien 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, the Second Lien Credit Agreement and the Third Lien Credit Agreement
and (ii) upon termination of and payment in full of all Senior Secured
Indebtedness, Second Lien Indebtedness and Third Lien Indebtedness (other than
contingent indemnification obligations).
(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, the Third Lien Loan
Documents, 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,
16
consent, certificate, affidavit, letter, facsimile 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 or, if the Senior Secured Indebtedness has been paid in
full in cash, the Second Lien Administrative Agent, or, if the Senior Secured
Indebtedness and the Second Lien Indebtedness have been paid in full in cash,
the Third Lien 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 or, if the Senior Secured Indebtedness has been paid
in full in cash, the Second Lien Administrative Agent, or, if the Senior Secured
Indebtedness and the Second Lien Indebtedness have been paid in full in cash,
the Third Lien 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.
(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 Third 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,
the Second Lien Administrative Agent or the Third Lien Administrative Agent, as
applicable, 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, the Second Lien
Administrative Agent and the Third 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 until the Second Lien Indebtedness is
paid in full in cash and thereafter as directed by the Third Lien Administrative
Agent in accordance with the terms 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 and each Swap Counterparty 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 or Swap Counterparty as to any
17
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,
Second Lien Loan Documents or Third 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, any Swap Agreement, Second Lien Loan Documents or Third 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, Second Lien Administrative Agent or the Third 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.
(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, Second Lien Administrative Agent or Third 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, the Second Lien Credit Agreement and the Third Lien Credit
Agreement.
18
(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 or any Swap Counterparty. The Lenders and the Swap Counterparties
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 or any Swap
Counterparty 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 and the Swap Counterparties, 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 and the Swap Counterparties, 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.
(ii) Any successor Collateral Agent appointed hereunder shall execute,
acknowledge and deliver to Borrowers, the Senior Administrative Agent, the
Senior Secured Lenders, the Swap Counterparties, the Second Lien
Administrative Agent, the Second Lien Lenders, the Third Lien
Administrative Agent, the Third Lien Lenders and the predecessor Collateral
Agent an instrument accepting such appointment, and
19
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, the Second Lien Loan Documents and the Third 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.
(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 or Swap Counterparties, 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
20
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 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) The Third Lien Administrative Agent and each Third 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 or the
Second Lien Creditor to proceed against or exhaust any Collateral at any time
securing the Senior Secured Indebtedness or the Second Lien Indebtedness or to
marshal any assets in favor of Third Lien Administrative Agent, any Third Lien
Lender or any other holder of Third 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
or Second Lien Indebtedness, it being understood that Senior Secured Lenders and
Second Lien Lenders may, in reliance upon these subordination provisions, make
advances under the Senior Secured Loan Documents and/or Second Lien Loan
Documents, or any other agreement, document, or instrument now or hereafter
relating to the Senior Secured Indebtedness and/or Second Lien Indebtedness (in
compliance with the terms of this Agreement), without notice to or authorization
of Third Lien Administrative Agent.
(o) For the limited purpose of perfecting the security interests of
the Senior Secured Creditor, the Second Lien Creditor and the Third 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, the Second Lien Administrative Agent and the Third 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, the Second Lien
Administrative Agent's and the Third Lien Administrative Agent's security
interests by possession or control through an agent or bailee.
(p) 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 Term Loan Lenders,
21
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 Loan 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 Loan 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 Loan 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,
Lender or Swap Counterparty 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(p) shall be
provided by the Second Lien Administrative Agent, when instructed to do so by
the Required Second Lien Lenders.
(q) Notwithstanding anything contained herein to the contrary, the
Second Lien 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 Second Lien Lenders. After,
and only after, the Senior Secured Indebtedness has been paid in full in cash,
upon the occurrence and during the continuance of a Second Lien Indebtedness
Default, the Second Lien Administrative Agent shall (and is hereby authorized by
the parties hereto to), after its receipt of written demand by Required Second
Lien Lenders, accelerate the maturity of the Second Lien 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 Second
22
Lien Lenders and exercise such rights and remedies by the terms of the Second
Lien Loan Documents and/or under applicable law (including, without limitation,
any or all of the following as directed by the Required Second Lien 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 Second Lien 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 this Agreement,
the Second Lien Loan Documents and applicable law, and (C) taking such
enforcement action will not result in any liability of any Agent or any Second
Lien Lender to any Loan Party. From and after the date upon which the Second
Lien Indebtedness has been paid in full in cash, the right to provide any
advice, concurrence, consent and direction to the Collateral Agent that is to be
provided by the Second Lien Administrative Agent pursuant to the terms of this
Section 3(q) shall be provided by the Third Lien Administrative Agent, when
instructed to do so by the Required Third Lien Lenders.
(r) Notwithstanding anything contained herein to the contrary, the
Third Lien 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 Third Lien Lenders. After,
and only after, the Senior Secured Indebtedness and the Second Lien Indebtedness
have been paid in full in cash, upon the occurrence and during the continuance
of a Third Lien Indebtedness Default, the Third Lien Administrative Agent shall
(and is hereby authorized by the parties hereto to), after its receipt of
written demand by Required Third Lien Lenders, accelerate the maturity of the
Third Lien 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 Third Lien Lenders and exercise such rights and remedies by the terms
of the Third Lien Loan Documents and/or under applicable law (including, without
limitation, any or all of the following as directed by the Required Third Lien
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 Third Lien
Indebtedness Default has not been waived or cured, (B) in the good faith
determination of Collateral Agent, taking
23
such enforcement action is permitted under the terms of this Agreement, the
Third Lien Loan Documents and applicable law, and (C) taking such enforcement
action will not result in any liability of any Agent or any Third Lien Lender to
any Loan Party.
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, Second Lien Loan Document or the Third 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 a Senior Lender 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, interest, fees, expense reimbursements and indemnities
due and unpaid with respect to the Second Lien Indebtedness and interest,
fees, expense reimbursements and indemnities due and unpaid with respect to
the Third 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;
24
(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 pay the principal amounts due and unpaid of the
Third Lien Indebtedness until all such amounts have been paid in full;
(viii) eighth, to the Borrowers;
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 (vii), 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) (A) the Second Lien Lenders or the Second Lien
Administrative Agent or other representative shall have received a Senior Lender
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 Senior Lender 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 Senior Lender
Acceleration Notice) have been due and payable on any date (a "Scheduled Payment
Date") during such Senior Lender 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 17 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 the Second Lien Credit Agreement or
the Second Lien Notes, on or after the date immediately following the
termination of such Senior Lender Blockage Period, and/or (B) the Third Lien
Lenders or the Third Lien Administrative Agent or other representative shall
have received a Senior Lender Acceleration Notice, then neither of the Borrower
nor any Guarantor shall make and no Third 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 Third Lien Indebtedness during the related
Senior Lender Blockage Period; provided, however, that in the case of any
payment on or in respect of any Third Lien Indebtedness that would (in the
absence of any such Senior Lender Acceleration Notice) have been due and payable
on a Scheduled Payment Date during such Senior Lender Blockage Period pursuant
to the terms of the Third Lien Credit Agreement as in effect on the date hereof
or as amended consistent with the provisions of Section 17 of this Agreement,
the provisions of this Section 6 shall not prevent the making and acceptance of
a Scheduled Payment, together with any additional default interest as is due on
the
25
Third Lien Credit Agreement or the Third Lien Notes, on or after the date
immediately following the termination of such Senior Lender 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
or Third 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 Senior Lender Acceleration
Notice shall be deemed received by the Second Lien Lenders and Third 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
19 or the Third Lien Lenders or the Third Lien Administrative Agent or other
representative designated pursuant to Section 20 hereof of such Senior Lender
Acceleration Notice in writing.
(b) On and after receipt by the Second Lien Lenders and Third Lien
Lenders of a Senior Lender 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 and
Third 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 or Third 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;
26
(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;
(ix) ninth, to pay interest, fees, expense reimbursements and
indemnities due and unpaid in respect of the Third Lien Indebtedness until
such amounts have been paid in full;
(x) tenth, to pay all principal amounts unpaid in respect of the Third
Lien Indebtedness until all such amounts have been paid in full; and
(xi) eleventh, 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 (x), 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.
(c) Except under circumstances when the terms of Section 9 of this
Agreement are applicable, if (i) a Second Lien Indebtedness Acceleration shall
have occurred and be continuing and (ii) the Third Lien Lenders or the Third
Lien Administrative Agent or other representative shall have received a Second
Lien Acceleration Notice, then neither of the Borrowers nor any Guarantor may
make, and no Third 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 Third Lien Indebtedness during the related Second Lien Blockage Period;
provided, however, that in the case of any payment on or in respect of any Third
Lien Indebtedness that would (in the absence of any such Second Lien
Acceleration Notice) have been due and payable on any date (a "Scheduled Payment
Date") during such Second Lien Blockage Period pursuant to the terms of the
Third Lien Credit Agreement or the Third Lien Notes, if requested, as in effect
on the date hereof or as amended consistent with the provisions of Section 17 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 the Third Lien Credit Agreement or the
Third Lien Notes, on or after the date immediately following the termination of
such Second Lien 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 Third 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 Second Lien Acceleration Notice shall be deemed received by the
Third Lien Lenders upon the date of actual
27
receipt by the Third Lien Lenders or the Third Lien Administrative Agent or
other representative designated pursuant to Section 20 hereof of such Second
Lien Acceleration Notice in writing.
(d) After, and only after, the Senior Secured Indebtedness has been
paid in full in cash, on and after receipt by the Third Lien Lenders of a Second
Lien Acceleration Notice, the holders of the Second Lien Indebtedness shall be
entitled to receive payment in full in cash of the Second Lien Indebtedness,
before the Third 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 Third 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 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 Second Lien Indebtedness until
such amounts have been paid in full;
(iv) fourth, to pay all principal amounts unpaid in respect of the
Second Lien Indebtedness 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 Third Lien Indebtedness until
such amounts have been paid in full;
(vi) sixth, to pay all principal amounts unpaid in respect of the
Third Lien Indebtedness until all such amounts have been paid in full; and
(vii) seventh, to the Borrower.
Section 7. Second Lien Standstill. Upon the delivery of notice to the
Senior Administrative Agent by the Second Lien Lenders or Second Lien
Administrative Agent pursuant to Section 12(a) 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 Second Lien
Enforcement Action relative to any of the Borrowers or any of the Guarantors
during the Senior Lender Standstill Period. Upon the termination of the Senior
Lender Standstill Period, the Second Lien Lenders may exercise all rights or
remedies they may have in law or equity; provided, however, that if a Senior
Lender 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 Senior Lender Standstill Period would
have been in effect but for termination pursuant to clause (d) of the definition
of "Senior Lender Standstill Period."
28
Section 8. Third Lien Standstill. Upon the delivery of notice to the Senior
Administrative Agent and the Second Lien Administrative Agent by the Third Lien
Lenders or Third Lien Administrative Agent pursuant to Section 12(c) of this
Agreement, the Third Lien Lenders and the Third Lien Administrative Agent or
other representative of the Third Lien Lenders designated hereunder will not
commence any Third Lien Enforcement Action relative to any of the Borrowers or
any of the Guarantors during the Second Lien Lender Standstill Period. Upon the
termination of the Second Lien Lender Standstill Period, the Third Lien Lenders
may exercise all rights or remedies they may have in law or equity; provided,
however, that if a Second Lien Lender Standstill Period terminates pursuant to
clause (d) of the definition thereof, no Third 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 Second Lien
Lender Standstill Period would have been in effect but for termination pursuant
to clause (d) of the definition of "Second Lien Lender Standstill Period."
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 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 or Third 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 or Third Lien Indebtedness, as
applicable; 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;
29
(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;
(ix) ninth, to pay interest, fees, expense reimbursements and
indemnities due and unpaid in respect of the Third Lien Indebtedness until
such amounts have been paid in full;
(x) tenth, to pay all principal amounts unpaid in respect of the Third
Lien Indebtedness until all such amounts have been paid in full; and
(xi) eleventh, 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 (x), 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.
(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.
(c) 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 Third
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 (i) 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 or (ii) if all such indebtedness is paid or cash collateralized as
provided in the Senior
30
Secured Loan Documents, for the account of the holders of the Second Lien
Indebtedness to the extent necessary to make payment in full of such
indebtedness; provided, however, that no such delivery of any Reorganization
Securities intended to be issued to the Third Lien Lenders shall be made to any
holders of the Senior Secured Indebtedness or to any Swap Counterparty or the
Second Lien Lenders and no such delivery of Reorganization Securities intended
to be issued to the Third Lien Lenders shall be made to any party other than the
Third Lien Administrative Agent or the Third Lien Lenders.
(d) In the event that, notwithstanding the foregoing provisions of
this Section 9, the Senior Secured Creditor or the Second Lien Creditor or the
Third 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 and the Third Lien Indebtedness
remaining unpaid, pursuant to the terms of this Section 9.
(e) If no proof of claim is filed in any Insolvency Proceeding with
respect to any Second Lien Indebtedness or Third 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 19 hereof or the Third
Lien Lenders or the Third Lien Administrative Agent or other representative
designated pursuant to Section 20 hereof, as applicable, file such a proof of
claim on behalf of the Second Lien Lenders or Third Lien Lenders, as applicable,
and each Second Lien Lender and Third 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 and
Third Lien Lenders in any Insolvency Proceedings.
(f) 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 or the Second Lien 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, or the Third Lien
Credit Agreement or the Third Lien Notes, if any, regardless of any knowledge
thereof any such Second Lien Lender or Third 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, the Senior Secured Indebtedness Representative, any holder
of the Second Lien Indebtedness and/or the Second Lien Administrative Agent.
31
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, the Second Lien Lenders and
the Third Lien Lenders, and nothing herein shall impair, as between the
Borrowers and the Guarantors and the Second Lien Lenders and the Third 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 and to pay the Third Lien Lenders the principal of
the Third Lien Indebtedness and interest thereon in accordance with the terms
and provisions thereof, nor shall anything herein, except as otherwise provided
in Section 7 and 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) or the Third Lien Lenders from exercising
all rights and remedies otherwise permitted by applicable law or hereunder upon
default under the Third Lien Credit Agreement, subject to the rights of holders
of the Senior Secured Indebtedness and Swap Counterparties and Second Lien
Creditors 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. Upon payment of the Senior
Secured Indebtedness in full in cash and the Second Lien Indebtedness in full in
cash, the Third 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 the Second Lien Indebtedness or otherwise
applied to the Senior Secured Indebtedness or the Second Lien Indebtedness
pursuant to the provisions of this Agreement, be subrogated to the rights of the
32
holders of the Senior Secured Indebtedness or the Second Lien Indebtedness to
receive payments or distributions of assets of the Borrowers or any Guarantor
made on Senior Secured Indebtedness or the Second Lien Indebtedness (and any
security therefor) until the Third 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
or Second Lien Indebtedness or otherwise applied to the Senior Secured
Indebtedness or Second Lien Indebtedness shall be deemed to have discharged the
Third 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 or Second Lien Indebtedness of any cash, assets, stock, or
obligations to which the Third 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 the Second Lien Indebtedness), and the Third Lien Lenders, be
deemed to be a payment by either of the Borrowers or any Guarantor to or on
account of Third Lien Indebtedness. The fact that failure to make any payment on
account of the Third 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 Indebtedness, 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 Collateral
Agent and the holders of the Senior Secured Indebtedness or the Senior Secured
Indebtedness Representative. Following a Second Lien Indebtedness Acceleration,
neither of the Borrowers nor any Guarantor may pay any Second Lien Indebtedness
until ten (10) Business Days after the Senior Secured Lenders or Senior Secured
Indebtedness Representative and the Collateral Agent receives the notice
described above and, after that ten (10) Business Day period, the Borrowers and
Guarantors may pay any Second Lien Indebtedness, 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.
(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 Second Lien 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 Second Lien Enforcement Action, and (ii) one (1)
Business Day after such Second Lien Enforcement Action is taken.
(c) Each Third Lien Lender agrees that in the event any event of
default under the Third Lien Credit Agreement (a "Third Lien Event of Default")
shall occur, and as a result thereof, any Third Lien Lender or the Third Lien
Administrative Agent or other representative of
33
such Third Lien Lender accelerates maturity of the Third Lien Indebtedness, then
such Third Lien Lender or the Third Lien Administrative Agent or other
representative shall give prompt (and in any event within three (3) Business
Days) notice thereof in writing to the Collateral Agent and the holders of the
Senior Secured Indebtedness or the Senior Secured Indebtedness Representative
and the holders of the Second Lien Indebtedness or the Second Lien
Administrative Agent. Neither of the Borrowers nor any Guarantor may pay any
Third Lien Indebtedness 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 Third Lien
Indebtedness, and the Third Lien Lenders may receive or collect such payment,
only if the provisions of this Agreement do not prohibit such payment at that
time.
(d) Each Third Lien Lender agrees that in the event any Third Lien
Event of Default shall occur, and as a result thereof, any Third Lien Lender or
the Third Lien Administrative Agent or other representative of such Third Lien
Lender intends to commence any Third Lien Enforcement Action, then such Third
Lien Lender or the Third Lien Administrative Agent or other representative shall
first deliver notice thereof in writing to the Senior Secured Indebtedness
Representative and the Second Lien Administrative Agent and the Collateral Agent
both (i) not less than ten (10) days prior to taking any such Third Lien
Enforcement Action, and (ii) one (1) Business Day after such Third Lien
Enforcement Action is taken.
Section 13. Senior Lender 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 or Third
Lien Creditor has received proceeds, payments or other amounts to which the
Second Lien Creditor or Third Lien Creditor would not have been entitled under
this Agreement had such reimbursement occurred prior to the receipt by the
Second Lien Creditor or Third Lien Creditor of such proceeds, payments or other
amounts, the Second Lien Creditor or Third 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.
34
Section 14. Second Lien Reinstatement. If the Second Lien Creditor is
required to disgorge any proceeds, payment or other amount received by such
Second Lien Creditor (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 Second Lien
Indebtedness 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 Third Lien Creditor has received proceeds, payments or other amounts to
which the Third Lien Creditor would not have been entitled under this Agreement
had such reimbursement occurred prior to the receipt by the Third Lien Creditor
of such proceeds, payments or other amounts, the Third Lien Creditor shall turn
over such proceeds, payments or other amounts to the Collateral Agent for
reapplication 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 Second Lien Indebtedness.
Section 15. 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 or the
Third Lien Lenders or the Third Lien Administrative Agent or other
representative of the Third Lien Lenders, without incurring responsibility to
the Second Lien Creditor or Third Lien Lenders, as applicable, and without
impairing or releasing the subordination or other benefits provided in this
Agreement or the obligations hereunder of the Second Lien Creditor or Third Lien
Creditor, as applicable, 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 Senior 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
35
Agreement and the terms and conditions thereof in all respects equivalent to
those of holders of Senior Secured Indebtedness under this Section 15 with
respect to the Senior Secured Indebtedness under the Senior Secured Credit
Agreement.
Section 16. Rights of Holders of the Second Lien Indebtedness. Solely as
between the Second Lien Lenders and the Third Lien Lenders, the holders of the
Second Lien Indebtedness may, at any time and from time to time subject to the
terms of the Second Lien Indebtedness, without the consent of or notice to the
Third Lien Lenders or the Third Lien Administrative Agent or other
representative of the Third Lien Lenders, without incurring responsibility to
the Third Lien Lenders and without impairing or releasing the subordination or
other benefits provided in this Agreement or the obligations hereunder of the
Third 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 principal amount of $100,000,000),
alter or amend Second Lien Indebtedness or any instrument evidencing the same or
any covenant or agreement under which Second Lien 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 Second Lien Indebtedness; (c) settle or
compromise any Second Lien Indebtedness or any liability of any obligor thereon
or release any Person liable in any manner for the payment of Second Lien
Indebtedness; and (d) waive any default under Second Lien Indebtedness and
exercise or refrain from exercising any rights against either of the Borrowers,
any of their Subsidiary or any other Person. 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 Second Lien 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.
Section 17. Modification of Indebtedness. Each of the Lenders agrees that
it will not: (i) amend or modify any of the Senior Secured Loan Documents, the
Second Lien Loan Documents or the Third Lien Loan Documents , as applicable, to
add any covenant thereto; or (ii) amend or otherwise change the terms of any
Senior Secured Indebtedness, Second Lien Indebtedness or the Third 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, Second Lien Indebtedness or
the Third 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, Second Lien Indebtedness or the
Third 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, Second Lien Indebtedness or the
Third Lien Indebtedness, as applicable, that would be adverse to any Loan Party
or Lender.
Section 18. Amendments.
(a) Except as otherwise set forth in this Section 18, no amendment,
waiver, discharge or termination of this Agreement, any of the terms hereof or
any of the definitions used
36
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, Second Lien Creditor and Third Lien
Creditor and, to the extent applicable, any Swap Counterparty affected thereby.
(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 their 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 their 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.
(f) 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 Third Lien Lenders shall be effective if it is in writing and made
with the prior written consent of the Required Third Lien Lenders or the Third
Lien Administrative Agent acting at their written direction on their behalf.
Section 19. 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, the Senior
Secured Indebtedness Representative or the holders of the Third Lien
Indebtedness to the Second Lien Lenders, or any of them, the Collateral Agent,
the holders of the Senior Secured Indebtedness, the Senior Secured Indebtedness
Representative and holders of the Third Lien Indebtedness 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
37
Representative and the holders of the Third Lien Indebtedness 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 20. Identity of Third Lien Lenders for Notice Purposes. For
purposes of any notice required or permitted to be given hereunder to the Third
Lien Lenders, or any of them, the Collateral Agent, the holders of the Senior
Secured Indebtedness, the Senior Secured Indebtedness Representative and the
Second Lien Administrative Agent shall be entitled to rely, conclusively, on the
identity and address of each Third Lien Lender as set forth in the Third Lien
Loan Agreement or as otherwise set forth in the most recent notice received by
the Senior Secured Indebtedness Representative or Second Lien Administrative
Agent, as applicable, from a Third Lien Lender referring to the Third Lien Loan
Agreement for purposes of providing the identity and address of each Third Lien
Lender. The Third Lien Lenders agree that any notices required to be given to
the Third Lien Lenders shall be effective if such notice is given to the Third
Lien Administrative Agent or other representative of the Third Lien Lenders. For
so long as the Third Lien Indebtedness is outstanding, the Third Lien Lenders
agree to designate and maintain an agent or other representative for such
purposes.
Section 21. Liens.
(a) (i) 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 Senior Secured Indebtedness and any amounts payable under the Swap
Agreements are 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.
(ii) All Liens granted by either of the Borrowers or any Guarantor
which at any time secure the Third Lien Credit Agreement or any other Third Lien
Loan Document are hereby made, and will at all times prior to the full payment
or discharge of the Senior Secured
38
Indebtedness and the Second Lien 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 and the Second Lien Indebtedness, which subordination
shall be effective whether or not all such Liens securing Senior Secured
Indebtedness and the Second Lien Indebtedness and amounts payable under Swap
Agreements have been properly recorded, filed and otherwise perfected prior to
all such Liens securing any Third 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 Third Lien Indebtedness is
outstanding, as between the Third Lien Lenders and the holders of the Senior
Secured Indebtedness and any Swap Counterparty and the Second Lien Indebtedness,
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 and only the Second Lien Indebtedness shall be deemed to
be secured under the Second Lien Loan Documents.
(b) (i) 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.
(ii) Each of the Third Lien Lenders and the Third 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 Second Lien Indebtedness or
the Liens securing the Senior Secured Indebtedness or the Second Lien
Indebtedness and amounts payable under any Swap Agreement.
Section 22. Purchase of the Senior Indebtedness or Second Lien
Indebtedness. (a) In the event that (i) a Senior Lender 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 their sole and absolute discretion,
upon the direction of the Required Second Lien Lenders including, to the extent
assigned to it by a Second Lien Lender, the Second Lien Administrative Agent,
direct the Second Lien Administrative Agent to purchase all, but not less than
all, of the Senior Secured Indebtedness held by the Senior Secured Lenders from
the Senior Secured Lenders by sending a notice to buy such Senior Secured
Indebtedness and Liens securing same from the Senior Secured Lenders upon the
following terms and conditions: (w) the Second Lien Lenders shall direct the
Second Lien Administrative Agent to give written notice to the Senior Secured
Lenders and the Third Lien Lenders, informing the Senior Secured Lenders and the
Third Lien Lenders of the Second Lien Lenders' election, and, to the extent
assigned to it by a Second Lien Lender, the Second Lien Administrative Agent's
election to purchase such Senior Secured Indebtedness and Liens
39
securing same (the purchase hereinafter called a "Purchase" and any such notice
being hereinafter called a "Purchase Notice"), (x) the Second Lien Lenders shall
consummate the purchase of such Senior Secured Indebtedness not less than
forty-five (45) days and not more than ninety (90) days from the date of the
Purchase Notice for an amount equal to 100% of such 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 Senior Lender Payment Default Notice or a Senior Lender
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 Senior Lender Payment Default Notice or the Senior Lender
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 direct the Senior
Administrative Agent to execute an assignment of such 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 such Senior Secured Indebtedness and Liens securing same
to the Second Lien Lenders and the amount of such 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.
(b) In the event that (i) a Senior Lender Blockage Period or
Second Lien 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 or the Third Lien Loan Documents shall have occurred and is
continuing, regardless of whether any notice has been sent pursuant to
Section 12 or Section 22(a) hereof, or (iii) if any Insolvency Proceeding has
been commenced and is continuing, the Third Lien Lenders may, in their sole
and absolute discretion, upon the direction of the Required Third Lien
Lenders including, to the extent assigned to it by a Third Lien Lender, the
Third Lien Administrative Agent, direct the Third Lien Administrative Agent
to purchase all, but not less than all, of the Senior Secured Indebtedness
from the Senior Secured Lenders together with all, but not less than all, of
the Second Lien Indebtedness (and any Senior Secured Indebtedness purchased
pursuant to and in accordance with the terms of Section 22(a) above) from the
Second Lien Lenders by sending a notice to buy the Senior Secured
Indebtedness and Liens securing same from the Senior Secured Lenders and the
Second Lien Indebtedness and Liens securing same from the Second Lien Lenders
upon the following terms and conditions: (w) the Third Lien Lenders shall
direct the Third Lien Administrative Agent to give written notice to the
Senior Secured Lenders and the Second Lien Lenders, informing the Senior
Secured Lenders and the Second Lien Lenders of the Third Lien Lenders'
election and, to the extent assigned to it by a Third Lien Lender, the Third
Lien Administrative Agent's election to purchase the Senior Secured
Indebtedness and the Second Lien Indebtedness and Liens securing same (the
purchase hereinafter called a "Purchase" and any such notice being
hereinafter called a "Purchase Notice"), (x) the Third Lien Lenders shall
have forty-five (45) days from the date of the Purchase Notice to consummate
the purchase of the Senior Secured Indebtedness and the Second Lien
Indebtedness for an amount equal to 100% of the outstanding Senior Secured
Indebtedness and the Second Lien Indebtedness (and any Senior Secured
Indebtedness purchased pursuant to and in accordance with the terms of
Section 22(a) above) (including, without limitation, principal, interest,
fees, and expenses (reimbursable under the
40
Senior Secured Loan Documents or Second Lien Loan Documents) outstanding on the
date of the purchase, (y) if based upon the receipt of a Senior Lender Payment
Default Notice or a Senior Lender 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 Senior Lender Payment
Default Notice or the Senior Lender Non-Payment Default Notice have been waived
or cured prior to the consummation of the Purchase, and if based upon the
receipt of a Second Lien Lender Payment Default Notice or a Second Lien Lender
Non-Payment Default Notice, as the case may be, said Purchase shall not occur
(at Second Lien Lenders' election) if all events of default that precipitated
the delivery of the Second Lien Lender Payment Default Notice or the Second Lien
Lender 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 direct the
Senior Administrative Agent and the Second Lien Lenders shall direct the Second
Lien Administrative Agent to execute an assignment of the Senior Secured
Indebtedness and the Second Lien Indebtedness and Liens securing same to the
Third Lien Lenders without recourse and without representation or warranty
(either express or implied), other than to the effect that the Senior Secured
Lenders and the Second Lien Lenders at the closing of the Purchase have sold or
assigned the Senior Secured Indebtedness and the Second Lien Indebtedness and
Liens securing same to the Third Lien Lenders and the amount of the Senior
Secured Indebtedness and the Second Lien 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.
Section 23. Legend.
(a) (i) 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
SECOND AMENDED AND RESTATED INTERCREDITOR AGREEMENT DATED AS OF JUNE
__, 2006 BY AND AMONG QUEST RESOURCE CORPORATION AND QUEST CHEROKEE,
LLC, GUGGENHEIM CORPORATE FUNDING, LLC, AS SENIOR SECURED
ADMINISTRATIVE AGENT UNDER THE TERMS OF THE AMENDED AND RESTATED
SENIOR SECURED CREDIT AGREEMENT DATED AS OF FEBRUARY 7, 2006, 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 AMENDED AND RESTATED
SECOND LIEN TERM LOAN AGREEMENT DATED AS OF JUNE __, 2006, ON ITS OWN
BEHALF AND ON BEHALF OF THE SECOND LIEN LENDERS PARTIES THERETO, AND
GUGGENHEIM CORPORATE FUNDING, LLC, AS THIRD LIEN ADMINISTRATIVE AGENT,
UNDER THE TERMS OF THE THIRD LIEN TERM LOAN AGREEMENT DATED AS OF JUNE
__, 2006, ON ITS OWN BEHALF AND ON BEHALF OF THE THIRD LIEN LENDERS
PARTIES THERETO, BE SUBORDINATE AND JUNIOR IN RIGHT OF PAYMENT TO THE
PRIOR PAYMENT IN FULL OF
41
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.
(ii) Each Third 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
SECOND AMENDED AND RESTATED INTERCREDITOR AGREEMENT DATED AS OF JUNE
__, 2006 BY AND AMONG QUEST RESOURCE CORPORATION AND QUEST CHEROKEE,
LLC, GUGGENHEIM CORPORATE FUNDING, LLC, AS SENIOR SECURED
ADMINISTRATIVE AGENT UNDER THE TERMS OF THE AMENDED AND RESTATED
SENIOR SECURED CREDIT AGREEMENT DATED AS OF FEBRUARY 7, 2006, 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 AMENDED AND RESTATED
SECOND LIEN TERM LOAN AGREEMENT DATED AS OF JUNE __, 2006, ON ITS OWN
BEHALF AND ON BEHALF OF THE SECOND LIEN LENDERS PARTIES THERETO, AND
GUGGENHEIM CORPORATE FUNDING, LLC, AS THIRD LIEN ADMINISTRATIVE AGENT,
UNDER THE TERMS OF THE THIRD LIEN TERM LOAN AGREEMENT DATED AS OF JUNE
__, 2006, ON ITS OWN BEHALF AND ON BEHALF OF THE THIRD 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 AND ALL SECOND LIEN
INDEBTEDNESS, THE PROVISIONS OF WHICH INTERCREDITOR AGREEMENT BEING
INCORPORATED HEREIN AND BY THIS REFERENCE BEING MADE A PART HEREOF.
(b) (i) 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 SECOND AMENDED AND RESTATED INTERCREDITOR AGREEMENT DATED AS OF
JUNE __, 2006, BY AND AMONG QUEST RESOURCE CORPORATION AND QUEST
CHEROKEE, LLC, GUGGENHEIM CORPORATE FUNDING, LLC, AS ADMINISTRATIVE
AGENT UNDER THE TERMS OF THE AMENDED AND RESTATED SENIOR CREDIT
AGREEMENT DATED AS OF FEBRUARY 7, 2006, ON ITS OWN BEHALF AND ON
BEHALF OF SENIOR
42
SECURED LENDERS PARTIES THERETO, GUGGENHEIM CORPORATE FUNDING, LLC,
ADMINISTRATIVE AGENT UNDER THE TERMS OF THE SECOND LIEN TERM LOAN
AGREEMENT DATED AS OF JUNE __, 2006, ON ITS OWN BEHALF AND ON BEHALF
OF THE SECOND LIEN LENDERS PARTIES THERETO, AND GUGGENHEIM CORPORATE
FUNDING, LLC, ADMINISTRATIVE AGENT UNDER THE TERMS OF THE THIRD LIEN
TERM LOAN AGREEMENT DATED AS OF JUNE __, 2006, ON ITS OWN BEHALF AND
ON BEHALF OF THE THIRD LIEN LENDERS PARTIES THERETO, BE SUBORDINATE
AND JUNIOR TO ALL LIENS GRANTED BY GRANTOR TO SECURE THE SENIOR
SECURED INDEBTEDNESS AND ALL AMOUNTS PAYABLE UNDER ANY SWAP AGREEMENTS
REGARDLESS OF THE RELATIVE PRIORITY OF SUCH LIENS AS DETERMINED
WITHOUT REGARD TO SUCH INTERCREDITOR AGREEMENT, THE PROVISIONS OF
WHICH INTERCREDITOR AGREEMENT BEING INCORPORATED HEREIN AND BY THIS
REFERENCE BEING MADE A PART HEREOF.
(ii) The Borrowers and each Third Lien Lender or the Third Lien
Administrative Agent or other representative of the Third Lien Lenders shall
cause each mortgage, security agreement and other instrument securing all or any
part of the Third 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 SECOND AMENDED AND RESTATED INTERCREDITOR AGREEMENT DATED AS OF
JUNE __, 2006, BY AND AMONG QUEST RESOURCE CORPORATION AND QUEST
CHEROKEE, LLC, GUGGENHEIM CORPORATE FUNDING, LLC, AS ADMINISTRATIVE
AGENT UNDER THE TERMS OF THE AMENDED AND RESTATED SENIOR CREDIT
AGREEMENT DATED AS OF FEBRUARY 7, 2006, 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 JUNE __, 2006, ON ITS OWN BEHALF AND
ON BEHALF OF THE SECOND LIEN LENDERS PARTIES THERETO, AND GUGGENHEIM
CORPORATE FUNDING, LLC, ADMINISTRATIVE AGENT UNDER THE TERMS OF THE
THIRD LIEN TERM LOAN AGREEMENT DATED AS OF JUNE __, 2006, ON ITS OWN
BEHALF AND ON BEHALF OF THE THIRD LIEN LENDERS PARTIES THERETO, BE
SUBORDINATE AND JUNIOR TO ALL LIENS GRANTED BY GRANTOR TO SECURE THE
SENIOR SECURED INDEBTEDNESS AND ALL AMOUNTS PAYABLE UNDER ANY SWAP
AGREEMENTS AND THE SECOND LIEN INDEBTEDNESS REGARDLESS OF THE RELATIVE
PRIORITY OF SUCH LIENS AS DETERMINED WITHOUT REGARD TO SUCH
INTERCREDITOR AGREEMENT, THE PROVISIONS OF WHICH INTERCREDITOR
AGREEMENT BEING INCORPORATED HEREIN AND BY THIS REFERENCE BEING MADE A
PART HEREOF.
43
Section 24. 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 25. 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, Third Lien Creditor, Borrowers and Guarantors regardless
of whether Senior Secured Creditor, Second Lien Creditor, Third Lien Creditor,
or Guarantors comply with the provisions of Section 12(b) of the Senior Secured
Credit Agreement.
Section 26. 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 27. 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:
If to Borrower: Quest Resource Corporation
0000 X. Xxx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Attn: Chief Executive Officer
Telecopy No: (000) 000-0000
44
With a Copy to: Xxxxxxx Xxxxxxxx Xxxxxx LLP
0000 Xxxxxx
Xxxxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxxxx
Telecopy No: (000) 000-0000
If to Guarantors: To each of them
c/o Quest Resource Corporation
Quest Resource 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
0000 Xxxxxx
Xxxxxx Xxxx, XX 00000
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
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
45
If to Third Lien 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 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 28. 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 29. Further Assurances. Third 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 or Second Lien Creditor may from time to
time reasonably request to effect the provisions of this Agreement. Third Lien
Creditor hereby agrees to make reference in all Third Lien Loan Documents to its
obligations under this Agreement.
Section 30. 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
46
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 31. 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 32. 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.
Section 33. 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 34. WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING 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 35. NO ORAL AGREEMENTS. THIS AGREEMENT AND THE LOAN DOCUMENTS
EMBODY THE 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
47
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 36. 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.]
48
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 RESOURCE CORPORATION
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
------------------------------------
Title: Chief Executive Officer
-----------------------------------
QUEST CHEROKEE, LLC
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
------------------------------------
Title: Chief Executive Officer
-----------------------------------
GUARANTOR:
STP CHEROKEE, INC.,
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
------------------------------------
Title: Chief Executive Officer
-----------------------------------
GUARANTOR:
QUEST OIL & GAS CORPORATION
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
------------------------------------
Title: Chief Executive Officer
-----------------------------------
GUARANTOR:
QUEST ENERGY SERVICE, INC.
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
------------------------------------
Title: Chief Executive Officer
-----------------------------------
GUARANTOR:
PONDEROSA GAS PIPELINE COMPANY, INC.
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
------------------------------------
Title: Chief Executive Officer
-----------------------------------
GUARANTOR:
PRODUCERS SERVICE INCORPORATED
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
------------------------------------
Title: Chief Executive Officer
-----------------------------------
GUARANTOR:
X-X GAS GATHERING, L.L.C.
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
------------------------------------
Title: Chief Executive Officer
-----------------------------------
GUARANTOR:
BLUESTEM PIPELINE, LLC
By: Quest Cherokee, LLC, its sole member
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
------------------------------------
Title: Chief Executive Officer
-----------------------------------
GUARANTOR:
QUEST CHEROKEE OILFIELD SERVICE, LLC
By: Quest Cherokee, LLC, its sole member
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
------------------------------------
Title: Chief Executive Officer
-----------------------------------
SENIOR SECURED CREDITOR:
GUGGENHEIM CORPORATE FUNDING, LLC, as
Administrative Agent
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------------------
Title: Managing Director
-----------------------------------
SECOND LIEN CREDITOR:
GUGGENHEIM CORPORATE FUNDING, LLC, as
Administrative Agent
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------------------
Title: Managing Director
-----------------------------------
THIRD LIEN CREDITOR:
GUGGENHEIM CORPORATE FUNDING, LLC, as
Administrative Agent
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------------------
Title: Managing Director
-----------------------------------
SWAP COUNTERPARTY:
BP CORPORATION NORTH AMERICA INC., as Swap
Counterparty
By: /s/ Xxx Xxxxxx
------------------------------------
Name: Xxx Xxxxxx
------------------------------------
Title: Manager, Trade Control
-----------------------------------
