15% SUBORDINATED NOTE
THE SECURITY REPRESENTED HEREBY WAS ORIGINALLY ISSUED AS OF FEBRUARY 22,
2005, HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM
REGISTRATION THEREUNDER. THE SECURITY REPRESENTED HEREBY IS ALSO SUBJECT
TO THE CONDITIONS SPECIFIED IN THE AMENDED AND RESTATED NOTE PURCHASE
AGREEMENT AMONG THE COMPANY AND THE ORIGINAL HOLDER HEREOF AND CERTAIN
INVESTORS, DATED AS OF FEBRUARY 11, 2005 AND THE COMPANY RESERVES THE
RIGHT TO REFUSE THE TRANSFER OF THIS SECURITY UNTIL THE CONDITIONS THEREIN
HAVE BEEN FULFILLED WITH RESPECT TO SUCH TRANSFER. A COPY OF SUCH NOTE
PURCHASE AGREEMENT MAY BE OBTAINED BY THE HOLDER HEREOF AT THE COMPANY'S
PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE.
THIS INSTRUMENT AND THE OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATED TO
THE PRIOR PAYMENT IN FULL OF THE SUPERIOR DEBT (AS DEFINED HEREINAFTER).
JUNIOR SUBORDINATED
PROMISSORY NOTE
---------------
February 22, 2005 $7,000,000
Quest Cherokee, LLC, a Delaware limited liability company (the "Company"),
hereby promises to pay to the order of Cherokee Energy Partners LLC, a Delaware
limited liability company, the principal amount of $7,000,000 together with
interest thereon calculated from the date hereof (the "Date of Issuance") in
accordance with the provisions of this Junior Subordinated Promissory Note (the
"Note").
This Note was issued pursuant to an Amended and Restated Note Purchase
Agreement, dated as of February 11, 2005 (such agreement to which the initial
holder is a party, as amended and modified from time to time, the "Purchase
Agreement"), by and among the Company and the initial holder of this Note. For
purposes of this Note, "Junior Notes" means this Note, the notes issued pursuant
to the Purchase Agreement on December 22, 2003 and February 11, 2005 and all
other notes issued on the date hereof or at any time hereafter in substantially
the same form whether issued pursuant to the Purchase Agreement or otherwise
(including any PIK Notes (as defined in Section 6 hereof)). The Purchase
Agreement contains terms governing the rights of the holder of this Note, and
all provisions of the Purchase Agreement are hereby incorporated herein by
reference.
1. Payment of Interest. Interest shall accrue at the rate of fifteen
percent (15%) per annum on the unpaid principal amount of this Note from time to
time outstanding. Interest shall be computed on the basis of a 365 or 366-day
year (as applicable) and the actual number of days elapsed, and shall be payable
on each Interest Payment Date (as defined in the Purchase
Page 1
Agreement); provided that, except to the extent same is permitted to be paid in
cash under the Senior Credit Agreement (as defined in Section 6 hereof) on each
Interest Payment Date, the Company shall pay interest in kind by either (i)
issuing a PIK Note to the holder hereof in principal amount equal to the amount
of the interest due on such Interest Payment Date or (ii) deferring the interest
due on such Interest Payment Date and all interest so deferred pursuant to this
clause (ii) shall be added to and become a part of the principal of this Note as
of the Interest Payment Date upon which it was deferred, and shall thereafter
earn interest as provided herein. Except as provided in the last sentence of
this Section 1, in all events an amount of accrued and unpaid interest
(including any interest represented by a PIK Note or otherwise previously added
to principal) shall be paid by the Company in cash, on each Interest Payment
Date occurring after December 22, 2008, equal to the least amount of such
accrued and unpaid interest such that the Note shall not have at any time
"significant original issue discount" within the meaning of section 163(i)(2) of
the Internal Revenue Code of 1986. Any accrued interest which for any reason has
not theretofore been paid shall be paid in full on the date on which the final
principal payment on this Note is made. Except for interest paid by the issuance
of a PIK Note or deferred and paid-in-kind in accordance with the terms hereof,
interest shall be paid only if such payment is permitted by the terms of the
Senior Credit Agreement and only to the extent therefor pursuant to Section 5.4
of the Company's Amended and Restated Limited Liability Company Agreement.
2. Payment of Principal on Note.
(a) Maturity. The Company shall pay the principal amount outstanding
under this Note (including interest deferred and added to the principal amount
of this Note as provided in Section 1 above) together with all accrued and
unpaid interest on such principal amount, to the holder of this Note on the
Final Maturity Date (as defined in the Purchase Agreement as in effect on the
date hereof).
(b) Prepayments.
(i) Upon notice given as provided in subsection (ii) below, the
Company may at any time and from time to time prepay all or any
proportion of the outstanding principal amount of the Note, plus
accrued interest on the outstanding principal amount of the Note
through the date of prepayment; provided that (A) such prepayment is
permitted by the terms of the Senior Credit Agreement and (B) such
prepayment shall be made pro rata among the holders of the Junior
Notes on the basis of the outstanding principal amount of the Junior
Note held by each holder.
(ii) The Company shall send written notice of its election to
make a prepayment on the Junior Notes to the holder of this Note by
registered or certified mail, return receipt requested, at least three
(3) Business Days prior to the date of prepayment. Such notice shall
specify the date fixed for prepayment, the aggregate principal amount
outstanding, the aggregate amount of interest accrued on the
outstanding principal amount of this Note through the date of
prepayment specified in the Company's notice.
Page 2
(c) Time of Payment. If any payment of principal, interest or premium
shall become due on a day which is not a Business Day (as defined below), such
payment shall be made on the next succeeding Business Day and such extension of
time shall in such case be included in computing interest in connection with
such payment. The term "Business Day" as used herein means any day other than
Saturday or Sunday or public holiday under the laws of the State of New York or
other day on which banking institutions are authorized or obligated to close in
the City of New York in the State of New York.
(d) Form of Payment. Unless otherwise indicated herein, any payment
to be made hereunder shall be made at the direction of the holder hereof by
cashier's or certified check to or upon the order of the holder or by wire
transfer of immediately available funds to an account designated by the holder.
3. Subordination: Restrictions on Payment.
Anything in this Note or the Purchase Agreement to the contrary
notwithstanding, the obligations of the Company in respect of the principal,
interest, fees and charges on this Note shall be subordinate and junior in right
of payment, to the extent and in the manner hereinafter set forth, to the prior
payment in full in cash of all Superior Debt. By its acceptance hereof, the
payee and each other present and future holder of this Note and beneficial owner
of any interest in this Note or any other Subordinated Debt (collectively,
including the payee, the "holders" of Subordinated Debt) irrevocably agree, for
the directly intended and enforceable benefit of each present and future holder
of Superior Debt, that the Subordinated Debt is hereby subordinated to the
Superior Debt on the following terms:
(a) In the event that the Company makes a general assignment for the
benefit of creditors; or an order, judgment or decree is entered adjudicating
the Company bankrupt or insolvent; or any order for relief with respect to the
Company is entered under the Federal Bankruptcy Code; or the Company petitions
or applies to any tribunal for the appointment of a custodian, trustee, receiver
or liquidator of the Company or of any substantial part of the assets of the
Company, or commences any proceeding relating to the Company under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction; or any such petition or
application is filed, or any such proceeding is commenced, against the Company
(collectively referred to as an "Insolvency Event"), or upon any acceleration of
Superior Debt, then:
(i) the holders of Superior Debt shall be entitled to receive
payment in full in cash of all principal, premium, interest, fees,
charges and other amounts then due on all Superior Debt (including
interest, fees, charges and other amounts accruing thereon after the
commencement of any such Insolvency Event at the rate provided in the
documentation for such Superior Debt (irrespective of whether such
interest, fees, charges or other amounts are allowed as a claim in
such proceedings)) before the holder of this Note is entitled to
receive any payment of any kind or character on account of principal,
interest or other amounts due (or past due) upon this Note, and the
holders of Superior Debt shall be entitled to receive for application
in payment thereof all payments and distributions of any kind or
character, whether in cash, property or securities or by
Page 3
set-off or otherwise, which may be payable or deliverable in any
such proceedings in respect of this Note; and
(ii) any payment or distribution of assets of the Company, of any
kind or character, whether in cash, property or securities, to which
the holder of this Note would be entitled except for the provisions of
this Section 3(a) shall be paid or delivered by the Company (or any
receiver or trustee in such proceedings) directly to the Senior Agent
for the benefit of the holders of Superior Debt for application of
such payment or distribution among the holders of the Superior Debt
according to the priorities of such debt, until all Superior Debt
(including interest, fees, charges and other amounts accrued thereon
after the date of commencement of such proceedings at the rate
provided in the documentation for such Superior Debt (irrespective of
whether such interest, fees, charges or other amounts are allowed as a
claim in such proceedings)) shall have been paid in full in cash.
(b) In any proceedings with respect to any Insolvency Event, or the
application of the assets of the Company to the payment or liquidation thereof,
or upon the dissolution or other winding up of the business of the Company or
upon the sale of all or substantially all of the assets of the Company, then,
and in any such event, (A) each holder of the Superior Debt shall be entitled to
receive full and indefeasible payment and satisfaction in cash of the Superior
Debt prior to the payment of all or any part of the Subordinated Debt by the
Company, other than a distribution of Reorganization Subordinated Securities if
the Senior Agent and the holder of this Note shall have entered into such
amendments to this Note as the Senior Agent may reasonably request to reflect
the continued subordination of the Reorganization Subordinated Securities to the
Superior Debt, and (B) any payment or distribution of any kind or character from
the Company of its assets, whether in cash, securities or other property, which
shall be payable or deliverable upon or with respect to any or all of the
Subordinated Debt, other than a distribution of Reorganization Subordinated
Securities if the Senior Agent and the holder of this Note shall have entered
into such amendments to this Note as the Senior Agent may reasonably request to
reflect the continued subordination of the Reorganization Subordinated
Securities to the Superior Debt, shall be paid or delivered directly to the
Senior Agent for the benefit of the holders of the Superior Debt for application
to the Superior Debt in accordance with the priorities thereof, due or not due,
until such Superior Debt shall have first been fully and indefeasibly paid in
cash and satisfied and all financing arrangements terminated. The holder of this
Note irrevocably authorizes, empowers and directs all receivers, trustees,
liquidators, custodians, conservators and others having authority in the
premises to effect all such payments and distributions, and the holder of this
Note also irrevocably authorizes, empowers and directs the Senior Agent to
demand, xxx for, collect and receive every such payment or distribution for the
benefit of the Senior Lenders. Any amounts collected or received by the Senior
Agent pursuant to the authority granted hereby, shall be paid or delivered
directly to holders of the Superior Debt for application to the Superior Debt in
accordance with the priorities thereof, due or not due, until such Superior Debt
shall have first been fully and indefeasibly paid in cash and satisfied and all
financing arrangements terminated. The holder of this Note agrees to execute and
deliver to the Senior Agent or its representative all such further instruments
confirming the authorization referred to in the foregoing clause and agrees not
to initiate or prosecute or encourage any other person to initiate or prosecute
any
Page 4
claim, action or other proceeding challenging the enforceability of the Superior
Debt or any liens and security interests securing the Superior Debt. The holder
of this Note agrees to execute, verify, deliver and file any proofs of claim in
respect of the Subordinated Debt requested by the Senior Agent in connection
with any such proceeding and hereby irrevocably authorizes, empowers and
appoints the Senior Agent its agent and attorney-in-fact to (i) execute, verify,
deliver and file such proofs of claim upon the failure of the holder of this
Note promptly to do so (and, in any event, prior to 30 days before the
expiration of the time to file any such proof) and (ii) vote such claim in any
such proceeding upon the failure of the holder of this Note to do so prior to 15
days before the expiration of the time to vote any such claim; provided that the
Senior Agent shall not have any obligation to execute, verify, deliver, file
and/or vote any such proof of claim. In the event that the Senior Agent votes
any claim in accordance with the authority granted hereby, no holder shall be
entitled to change or withdraw such vote. The Superior Debt shall continue to be
treated as Superior Debt and the provisions of this Note shall continue to cover
the relative rights and priorities of the Senior Lenders, on the one hand, and
the holder of this Note, on the other hand, even if all or part of the Superior
Debt or the security interests securing the Superior Debt are subordinated, set
aside, avoided or disallowed in connection with any such proceeding and this
Note shall be reinstated if at any time any payment of any of the Superior Debt
is rescinded or must otherwise be returned by any holder of Superior Debt or any
representative of such holder.
(c) Except for payments of interest in kind, and the issuance of
Reorganization Subordinated Securities expressly permitted herein, no holder of
the Subordinated Debt will, except as otherwise agreed to by the Senior Agent
and the Required Lenders (as defined in Section 6 hereof) or to the extent
permitted under the Senior Credit Agreement, ask, demand, xxx for, take or
receive from the Company, by set off or in any other manner, the whole or any
part of the Subordinated Debt (whether such amounts represent principal or
interest, or obligations which are due or not due, including costs, fees and
expenses with respect to the Junior Notes, direct or indirect, absolute or
contingent), including, without limitation, the taking of any negotiable
instruments evidencing such Subordinated Debt nor any security for any
Subordinated Debt, unless and until all Superior Debt, whether now existing or
hereafter arising directly between the Company and any holder of the Superior
Debt, or acquired outright, conditionally or as collateral security from another
by any holder the Superior Debt, shall have been fully and indefeasibly paid in
full in cash and satisfied and all financing arrangements and commitments
between the Company and all holders of the Superior Debt have been terminated.
(d) Any amendment or modification of the terms of Section 3 of this
Note shall not be effective against any Person who was a holder of Superior Debt
prior to or at the time of such amendment or modification unless such holder of
Superior Debt so consents in writing.
(e) The holders of Superior Debt may, at any time, in their
discretion, renew, amend, extend, increase, restate, refinance or otherwise
modify the terms and provisions of the Superior Debt so held or exercise or
release any of their rights under the Superior Debt including, without
limitation, the waiver of defaults thereunder and the amendment of any of the
terms or provisions thereof (or any notice evidencing or creating the same), or
the release of collateral securing the Superior Debt, all without notice to or
assent from the holder of this Note.
Page 5
No compromise, alteration, amendment, renewal, restatement, refinancing or other
change of, or waiver, consent or other action in respect of any liability or
obligation under or in respect of, any terms, covenants or conditions of the
Superior Debt (or any instrument evidencing or creating the same), whether or
not such release is in accordance with the provisions of the Superior Debt (or
any instrument evidencing or creating the same), shall in any way alter or
affect the enforceability of the subordination provisions of this Note against
the holder hereof.
(f) If, notwithstanding the provisions of Section 3 of this Note, any
payment or distribution of any kind or character (whether in cash, securities or
other property) or any security shall be received by the holder of this Note in
contravention of this Section 3 and before all the Superior Debt shall have been
paid in full in cash, such payment, distribution or security shall be held in
trust for the benefit of, and shall be immediately paid over or delivered or
transferred to the Senior Agent for the benefit of the holders of Superior Debt
or their duly appointed agents for application of such payment, distribution or
security among the holders of each class of Superior Debt according to the
priorities of such Superior Debt. Any such payments received by the holder of
this Note and delivered to the Senior Agent for the benefit of the holders of
the Superior Debt shall be deemed not to be a payment on this Note for any
reason whatsoever and the indebtedness under this Note shall remain as if such
erroneous payment had never been paid by the Company or received by the holder
of this Note. In the event of the failure of any holder of this Note to endorse
or assign any such payment, distribution or security, the Senior Agent is hereby
irrevocably authorized to endorse or assign the same.
(g) No present or future holder of Superior Debt shall be prejudiced
in its right to enforce the provisions of Section 3 of this Note by any act or
failure to act on the part of the Company or such holder or any other holder of
Superior Debt.
(h) The holder of this Note shall not take or continue any action, or
exercise or continue to exercise any rights, remedies or powers under the terms
of this Note, or exercise or continue to exercise any other right or remedy at
law or equity that such holder might otherwise possess, to collect any amount
due and payable in respect of this Note, including, without limitation, the
acceleration of this Note, the commencement of any foreclosure on any Lien, the
filing of any petition in bankruptcy or the taking advantage of any other
insolvency law of any jurisdiction.
(i) Subject to the indefeasible payment in full in cash of all
Superior Debt and the termination of all lending commitments under the Senior
Credit Agreement, the holder of this Note shall be subrogated to the rights of
the Senior Agent and Senior Lenders to receive payments and distributions with
respect to the Superior Debt until this Note is paid in full. The holder of this
Note agrees that in the event that all or any part of a payment made with
respect to the Superior Debt is recovered from the holders of the Superior Debt
in a proceeding with respect to an Insolvency Event or otherwise, any payment or
distribution received by the holder of this Note with respect to this Note at
any time after the date of the payment that is so recovered, whether pursuant to
the right of subrogation provided for in this Note or otherwise, shall be deemed
to have been received by the holder of this Note in trust as property of the
holders of the Superior Debt and the holder of this Note shall forthwith deliver
the same to the Senior Agent for the benefit of the Senior Lenders for
application to the Superior Debt until the Superior Debt is paid in full. A
payment or distribution made pursuant to this Section 3(i) to the
Page 6
Senior Agent or any Senior Lender which otherwise would have been paid to or
retained by the holder of this Note is not, as between the Company and the
holder of this Note, a payment by the Company to or on account of the Superior
Debt.
(j) The provisions of this Section 3 are solely for the purpose of
defining the relative rights of the holders of Superior Debt, on the one hand,
and the holder of this Note on the other, against the Company and its assets,
and nothing herein is intended to or shall impair, as between the Company and
the holder of this Note, the obligations of this Company which are absolute and
unconditional, to pay to the holder of this Note the principal and interest on
this Note as and when they become due and payable in accordance with their
terms, or is intended to or will affect the relative rights of the holder of
this Note and creditors of the Company other than the holders of the Superior
Debt, nor, except as provided in this Section 3, will anything herein or therein
prevent the holder of this Note from exercising all remedies otherwise permitted
by applicable law upon default under this Note subject to the rights, if any,
under this Section 3 of the holders of Superior Debt in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy and subject to this Section 3.
(k) Each holder of the Subordinated Debt has purchased or acquired
the Subordinated Debt held by it with the express understanding that:
(i) the Subordinated Debt constitutes the liability solely of the
Company;
(ii) no member of the Company has guaranteed or is otherwise
liable for any Subordinated Debt;
(iii) the Subordinated Debt is not secured by any mortgage, lien,
pledge, charge, financing statement, security interest, hypothecation
or other security device of any type (a "Lien"), nor is such
Subordinated Debt supported directly or indirectly by any direct or
indirect guaranty of any Person; and
(iv) such holder of Subordinated Debt will never ask, demand,
accept, receive or retain any guarantee of any Subordinated Debt, or
any collateral security for the payment of any Subordinated Debt, or
any other form of payment assurance as to any Subordinated Debt, from
any member or Subsidiary of the Company, and will not initiate or
prosecute, or encourage any other Person to initiate or prosecute any
claim or other proceeding.
(l) Except for the payment of interest in kind in accordance with the
terms of this Note, if by the terms of this Note any payment becomes due and
payable on account of the principal of or interest on this Note at any time and
payment hereon is not permitted under the Senior Credit Agreement, then the
holder of this Note hereby agrees that, notwithstanding the terms of this Note,
the date on which such payment would otherwise be due shall automatically be
deferred, extended and postponed until the date (the "Extension Date") such
payment is permitted pursuant to the terms of said Senior Credit Agreement, as
fully as if by the terms of this Note such payment was not due until the
Extension Date. The Company shall not be in any respect in default under this
Note by reason of any such deferral, extension and postponement to
Page 7
the Extension Date, and such deferral, extension and postponement shall not
otherwise subject the Company to any claim of default or any enforcement remedy.
The holder of this Note, in its capacity as a creditor, and by its acceptance of
this Note, covenants and agrees that it will not, and will not encourage any
other individual or entity to, at any time, contest the validity, perfection,
priority or enforceability of any Superior Debt and the promissory notes issued
pursuant thereto or any guarantees thereof or any of the other Superior Loan
Documents (as defined in Section 6 hereof) (or the liens and security interests
granted to the Collateral Agent (as defined in Section 6 hereof) pursuant
thereto.
(m) Any and all payments and distributions on account of this Note
that are received by the Senior Agent or any Senior Lender as a result of this
Section 3 shall be distributed to the holders of the Superior Debt according to
the priorities of such Superior Debt.
4. Transfer of Note. This Note may be transferred subject to the
restrictions set forth in the Purchase Agreement. Upon any such transfer, the
holder shall send written notice to the Company specifying the new holder's name
and address. The term "Note" as used herein includes this Note and any notes or
other evidences of indebtedness issued in exchange for or in respect of this
Note or any portion hereof.
5. Events of Default.
(a) Definition. For purposes of this Note, an Event of Default shall
be deemed to have occurred if:
(i) the Company fails to pay (A) when due, the full amount of any
principal payment on any Junior Note or (B) within five days of the
date when due, the full amount of any interest then accrued on any
Junior Note; or
(ii) the Company or any subsidiary makes an assignment for the
benefit of creditors or admits in writing its inability to pay its
debts generally as they become due; or an order, judgment or decree is
entered adjudicating the Company or any Subsidiary bankrupt or
insolvent; or any order for relief with respect to the company or any
Subsidiary is entered under the Federal Bankruptcy Code; or the
Company or any Subsidiary petitions or applies to any tribunal for the
appointment of a custodian, trustee, receiver or liquidator of the
Company or any Subsidiary, or of any substantial part of the assets of
the Company or any Subsidiary, or commences any proceeding (other than
a proceeding for the voluntary liquidation and dissolution of any
Subsidiary) relating to the Company or any Subsidiary under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation law of any jurisdiction; or any such
petition or application is filed, or any such proceeding is commenced,
against the Company or any Subsidiary and either (A) the Company or
any such Subsidiary by any act indicates its approval thereof, consent
thereto or acquiescence therein or (B) such petition, application or
proceeding is not dismissed within 60 days.
Page 8
(b) Consequences of Events of Default. Subject to the provisions of
Section 3 hereof, if an Event of Default has occurred and is continuing, the
holder or holders of the Junior Notes representing a majority of the aggregate
principal amount of the Junior Notes then outstanding may declare all or any
portion of the outstanding principal amount of the Junior Notes due and payable
and demand immediate payment of all or any portion of the outstanding principal
amount of the Junior Notes owned by such holder or holders. The Company shall
give prompt written notice of any such demand to the other holders of the Junior
Notes, each of which may demand immediate payment of all or any portion of such
holder's Note.
6. Definitions. For purposes of this Note, the following capitalized
terms have the following meaning.
"Collateral Agent" has the meaning assigned to such term in the Superior
Loan Documents.
"paid in full", "paid in full in cash", "payment in full" or similar
phrases mean with respect to the Superior Debt, the final and indefeasible
payment in full in cash of such Superior Debt and the termination of all
commitments of the Senior Lenders (as applicable) pursuant to the Senior Credit
Agreement.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"PIK Note" means a junior subordinated promissory note of the Company that
is substantially identical to this Note except for the stated principal amount
thereof.
"Refinancing Lender" means any Person which provides refinancing to the
Company of all or a portion of the Superior Debt outstanding prior to such
refinancing.
"Reorganization Subordinated Securities" means (a) any equity securities
issued in substitution of all or any portion of the Subordinated Debt that are
subordinated in right of payment to the Superior Debt (or any notes or other
securities issued in substitution of all or any portion of the Superior Debt),
and (b) any notes or other debt securities issued in substitution of all or any
portion of the Subordinated Debt that are subordinated to the Superior Debt (or
any notes or other securities issued in substitution of all or any portion of
the Superior Debt) to the same extent that the Subordinated Debt is subordinated
to the Superior Debt pursuant to the terms of this Note.
"Required Lenders" means the Required Lenders as defined in the Senior
Credit Agreement.
"Senior Agent" means UBS AG, Stamford Branch, as Administrative Agent
under the Senior Credit Agreement, in its capacity as contractual representative
of the Senior Lenders pursuant to the Senior Credit Agreement and not in its
individual capacity as a Senior Lender, and any successor Administrative Agent
appointed pursuant to the Senior Credit Agreement (including any Refinancing
Lender or successor or replacement administrative agent under any
Page 9
successor or new credit agreement entered into in connection with the
refinancing, replacement or substitution in whole or in part of the Superior
Debt).
"Senior Credit Agreement" means that certain Credit Agreement dated as of
July 22, 2004, by and among the Company, as Borrower, other guarantors party
thereto, as Guarantors, the lenders from time to time a party thereto, UBS
Securities LLC, as Arranger, Bookmanager, Documentation Agent and Syndication
Agent, the Senior Agent, as Issuing Bank ,LC Facility Issuing Bank,
Administrative Agent and Collateral Agent, and UBS Loan Finance LLC, as
Swingline Lender, as amended, modified or supplemented from time to time and any
replacement, successor or new credit agreement entered into in connection with
the refinancing thereof.
"Senior Lenders" means Lenders as defined in the Senior Credit Agreement.
"Subordinated Debt" means (i) indebtedness under the Junior Notes,
including, without limitation, principal, premium, interest and other
liabilities payable from time to time and similar obligations, premiums,
penalties, fees, indemnities or expenses, and regardless of whether direct or
indirect, now existing or hereafter arising, absolute or contingent, secured or
unsecured, or long or short term, (ii) obligations arising under guarantees
executed by the Company or any of its Subsidiaries of items described in (i)
above, and (iii) renewals, extensions, refundings, refinancings, deferrals,
restructurings, amendments and modifications of the items described in (i)
and/or (ii) above.
"Subsidiary" means, with respect to any Person, any corporation, limited
liability company, partnership, association or other business entity of which
(i) if a corporation, a majority of the total voting power of shares of stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a limited
liability company, partnership, association or other business entity, a majority
of the partnership or other similar ownership interest thereof is at the time
owned or controlled, directly or indirectly, by any Person or one or more
Subsidiaries of that Person or a combination thereof. For purposes hereof, a
Person or Persons shall be deemed to have a majority ownership interest in a
limited liability company, partnership, association or other business entity if
such Person or Persons shall be allocated a majority of limited liability
company, partnership, association or other business entity gains or losses or
shall be or control any managing director or general partner of such limited
liability company, partnership, association or other business entity.
"Superior Debt" means (i) the Obligations (as defined in the Senior Credit
Agreement) and the promissory notes issued pursuant thereto, including, without
limitation, principal, premium, interest and other liabilities payable from time
to time and similar obligations, interest accruing before and after any event of
insolvency at the rate provided in the documentation with respect thereto
(irrespective of whether such principal, premium, interest or other liabilities
are allowed as a claim in any such proceeding), premiums, penalties, fees,
indemnities or expenses, and regardless of whether direct or indirect, now
existing or hereafter arising, absolute or contingent, secured or unsecured, or
long or short term, (ii) obligations arising under guarantees executed by the
Company or any of its members or Subsidiaries of items described in (i) above,
Page 10
and (iii) renewals, extensions, refundings, refinancings, deferrals,
restructurings, amendments and modifications of the items described in (i)
and/or (ii) above.
"Superior Loan Documents" means the "Loan Documents" as defined in the
Senior Credit Agreement.
7. Amendment and Waiver. Except as otherwise expressly provided herein,
the provisions of the Note may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it, only if the Company has obtained the written consent of the holders of the
Junior Notes then outstanding and the Senior Agent and the Required Lenders with
respect to any Superior Debt then outstanding.
8. Cancellation. After all principal and accrued interest at any time
owed on this Note has been paid in full, this Note shall be surrendered to the
Company for cancellation and shall not be reissued.
9. Remedies Cumulative. No remedy herein conferred upon the holder of
this Note is intended to be exclusive of any other remedy, and each and every
such remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by statute
or otherwise.
10. Remedies not Waived. No course of dealing between the Company and the
holder of this Note or any delay on the part of the holder hereof in exercising
any rights hereunder shall operate as a waiver of any right of the holder of
this Note.
11. Covenants Bind Successors and Assigns. All the covenants,
stipulations, promises and agreements in this Note contained by or on behalf of
the Company shall bind its successors and assigns, whether so expressed or not.
12. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of New York.
13. Heading. The headings of the sections and subsections of this Note are
inserted for convenience only and do not constitute a part of this Note.
14. Third Party Beneficiary. The Company and the holder of this Note
acknowledge and agree that the Senior Agent and the Senior Lenders and each of
their successors and assigns are third party beneficiaries of the provisions of
Section 3 of this Note, and the provisions of Section 3 of this Note shall inure
to the benefit of and be enforceable by the Senior Agent and the Senior Lenders
and their respective successors and assigns.
15. Acceptance and Acknowledgment. By accepting this Note and advancing
the proceeds of the Subordinated Debt evidenced by this Note, the holder hereof
hereby agrees to, acknowledges and accepts, each of the terms and provisions of
this Note.
[Remainder Of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Company has executed and delivered this Note on
the Date of Issuance.
QUEST CHEROKEE, LLC
By: /s/ Xxxxx X. Xxxx
---------------------------------
Name: Xxxxx X. Xxxx
-----------------------------
Title: CEO
-----------------------------
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