INTERCREDITOR AGREEMENT dated as of November 29, 2007 among GASTAR EXPLORATION USA, INC., as the Company GASTAR EXPLORATION LTD., as the Parent certain Subsidiaries of the Parent party hereto AMEGY BANK NATIONAL ASSOCIATION, as First Priority Agent...
Exhibit
4.3
dated
as
of
November
29, 2007
among
GASTAR
EXPLORATION USA, INC.,
as
the
Company
as
the
Parent
certain
Subsidiaries of the Parent party hereto
AMEGY
BANK NATIONAL ASSOCIATION,
as
First
Priority Agent
and
XXXXX
FARGO BANK, NATIONAL ASSOCIATION,
as
Second
Priority Agent
THIS
IS THE INTERCREDITOR AGREEMENT REFERRED TO IN (A) THE INDENTURE DATED AS OF
NOVEMBER 29, 2007, AMONG GASTAR EXPLORATION USA, INC., CERTAIN OF ITS
SUBSIDIARIES FROM TIME TO TIME PARTY THERETO, GASTAR EXPLORATION LTD. AND XXXXX
FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE AND COLLATERAL AGENT, (B) THE
CREDIT AGREEMENT DATED AS OF NOVEMBER 29, 2007, AS AMENDED, SUPPLEMENTED,
RESTATED OR OTHERWISE MODIFIED FROM TIME TO TIME, AMONG GASTAR EXPLORATION
USA,
INC., CERTAIN OF ITS SUBSIDIARIES FROM TIME TO TIME PARTY THERETO, GASTAR
EXPLORATION LTD., THE LENDERS FROM TIME TO TIME PARTY THERETO AND AMEGY BANK
NATIONAL ASSOCIATION, AS AGENT, (C) THE OTHER LOAN DOCUMENTS REFERRED TO IN
SUCH
CREDIT AGREEMENT AND (D) THE OTHER COLLATERAL AGREEMENTS REFERRED TO IN SUCH
INDENTURE.
TABLE
OF CONTENTS
Page
ARTICLE
I
DEFINITIONS
|
SECTION
1.01.
|
Certain
Defined Terms
|
2
|
|
SECTION
1.02.
|
Other
Defined Terms
|
2
|
|
SECTION
1.03.
|
Terms
Generally
|
7
|
ARTICLE
II
LIEN
PRIORITIES
|
SECTION
2.01.
|
Relative
Priorities
|
8
|
|
SECTION
2.02.
|
Prohibition
on Contesting Liens
|
8
|
|
SECTION
2.03.
|
No
New Liens
|
8
|
|
SECTION
2.04.
|
Similar
Collateral
|
9
|
ARTICLE
III
ENFORCEMENT
OF RIGHTS; MATTERS RELATING TO COLLATERAL
|
SECTION
3.01.
|
Exercise
of Rights and Remedies; Option to Purchase
|
9
|
|
SECTION
3.02.
|
No
Interference
|
11
|
|
SECTION
3.03.
|
Rights
as Unsecured Creditors
|
13
|
|
SECTION
3.04.
|
Automatic
Release of Second Priority Liens.
|
13
|
|
SECTION
3.05.
|
Automatic
Release of First Priority Liens
|
14
|
|
SECTION
3.06.
|
Insurance
and Condemnation Awards
|
14
|
|
SECTION
3.07.
|
Notification
of Release of Collateral
|
15
|
ARTICLE
IV
PAYMENTS
|
SECTION
4.01.
|
Application of Proceeds | |
|
SECTION
4.02.
|
Payment
Over
|
15
|
|
SECTION
4.03.
|
Certain
Agreements with Respect to Unenforceable Liens
|
16
|
-i-
ARTICLE
V
BAILMENT
FOR PERFECTION OF CERTAIN SECURITY INTERESTS
ARTICLE
VI
INSOLVENCY
OR LIQUIDATION PROCEEDINGS
|
SECTION
6.01.
|
Finance
and Sale Matters
|
17
|
|
SECTION
6.02.
|
Relief
from the Automatic Stay
|
19
|
|
SECTION
6.03.
|
Reorganization
Securities
|
19
|
|
SECTION
6.04.
|
Post-Petition
Interest
|
19
|
|
SECTION
6.05.
|
Certain
Waivers by the Second Priority Secured Parties
|
20
|
|
SECTION
6.06.
|
Certain
Voting Matters
|
20
|
ARTICLE
VII
OTHER
AGREEMENTS
|
SECTION
7.01.
|
Matters
Relating to Debt Documents
|
20
|
|
SECTION
7.02.
|
Effect
of Refinancing of Indebtedness under First Priority Debt
Documents
|
20
|
|
SECTION
7.03.
|
No
Waiver by First Priority Secured Parties
|
21
|
|
SECTION
7.04.
|
Reinstatement
|
21
|
|
SECTION
7.05.
|
Authorization
of Collateral Agents
|
21
|
|
SECTION
7.06.
|
Further
Assurances
|
22
|
ARTICLE
VIII
REPRESENTATIONS
AND WARRANTIES
|
SECTION
8.01.
|
Representations
and Warranties of Each Party
|
22
|
|
SECTION
8.02.
|
Representations
and Warranties of Each Collateral Agent
|
22
|
ARTICLE
IX
NO
RELIANCE; NO LIABILITY; OBLIGATIONS ABSOLUTE
|
SECTION
9.01.
|
No
Reliance; Information
|
22
|
|
SECTION
9.02.
|
No
Warranties or Liability
|
23
|
|
SECTION
9.03.
|
Obligations
Absolute
|
23
|
-ii-
ARTICLE
X
MISCELLANEOUS
|
SECTION
10.01.
|
Notices
|
24
|
|
SECTION
10.02.
|
Conflicts
|
25
|
|
SECTION
10.03.
|
Effectiveness;
Survival; Termination
|
25
|
|
SECTION
10.04.
|
Severability
|
25
|
|
SECTION
10.05.
|
Amendments;
Waivers
|
26
|
|
SECTION
10.06.
|
Postponement
of Subrogation
|
26
|
|
SECTION
10.07.
|
Applicable
Law; Jurisdiction; Consent to Service of Process
|
26
|
|
SECTION
10.08.
|
Waiver
of Jury Trial
|
27
|
|
SECTION
10.09.
|
Parties
in Interest
|
27
|
|
SECTION
10.10.
|
Specific
Performance
|
27
|
|
SECTION
10.11.
|
Headings
|
27
|
|
SECTION
10.12.
|
Counterparts
|
27
|
|
SECTION
10.13.
|
Provisions
Solely to Define Relative Rights
|
28
|
-iii-
INTERCREDITOR
AGREEMENT dated as of November 29, 2007 (this
“Agreement”) among GASTAR EXPLORATION USA, INC., a
Michigan corporation (the “Company”), GASTAR
EXPLORATION LTD., an Alberta, Canada corporation (the
“Parent”), the Subsidiaries of the Parent party
hereto, AMEGY BANK NATIONAL ASSOCIATION, as agent for the First Priority Secured
Parties (as defined below) (in such capacity, the “First Priority
Agent”), and XXXXX FARGO BANK, NATIONAL ASSOCIATION, as collateral
agent for the Second Priority Secured Parties (as defined below) (in such
capacity, the “Second Priority Agent”).
PRELIMINARY
STATEMENT
Reference
is made to (a) the Credit Agreement dated as of November 29, 2007 (as amended,
supplemented, restated or otherwise modified from time to time in accordance
with the terms hereof, the “First Priority Debt
Agreement”) among the Company, the Parent, certain of the
Company’s subsidiaries, the lenders from time to time party thereto (the
“First Priority Creditors”) and the First Priority
Agent, (b) the Indenture dated as of November 29, 2007 (as amended,
supplemented, restated or otherwise modified from time to time in accordance
with the terms hereof, the “Second Priority Debt
Agreement” and, together with the First Priority Debt Agreement,
the “Debt Agreements”) among the Company, the Parent,
certain of the Company’s subsidiaries, Xxxxx Fargo Bank, National Association,
as Trustee (in such capacity, the “Second Priority
Trustee”) and the Second Priority Agent, (c) the First Lien
Security Agreement dated as of November 29, 2007 (as amended, supplemented,
restated or otherwise modified from time to time in accordance with the terms
hereof, the “First Priority Security Agreement”) among
the Company, certain of the Company’s subsidiaries and the First Priority Agent,
(d) the Second Lien Security Agreement dated as of November 29, 2007 (as
amended, supplemented, restated or otherwise modified from time to time in
accordance with the terms hereof, the “Second Priority Security
Agreement”) among the Company, certain of the Company’s
subsidiaries and the Second Priority Agent, (e) the other Loan Documents as
defined, and referred to, in the First Priority Debt Agreement and (f) the
other
Collateral Agreements as defined, and referred to, in the Second Priority Debt
Agreement.
RECITALS
A. The
First Priority Creditors have agreed to make loans and other extensions of
credit to the Company pursuant to the First Priority Debt Agreement on the
condition, among others, that the First Priority Claims (such term and each
other capitalized term used but not defined in the preliminary statement or
these recitals having the meaning given it in Article I) shall be secured by
first priority Liens on, and security interests in, the Collateral and the
Excluded Collateral.
B. The
Second Priority Creditors have agreed to purchase and/or hold the Notes issued
by the Company from time to time pursuant to the Second Priority Debt Agreement
on the condition, among others, that the Second Priority Claims shall be secured
by second priority Liens on, and security interests in, the
Collateral.
C. The
Debt Agreements require, among other things, that the parties thereto set forth
in this Agreement, among other things, their respective rights, obligations
and
remedies with respect to the Collateral.
Accordingly,
the parties hereto agree as follows:
ARTICLE
I
Definitions
SECTION
1.01. Certain Defined
Terms. Capitalized terms used in this Agreement and not
otherwise defined herein shall, except to the extent the context otherwise
requires, have the meanings set forth in the Second Priority Debt Agreement
(as
in effect on the date hereof) or the Second Priority Security Agreement (as
in
effect on the date hereof), as applicable.
SECTION
1.02. Other Defined
Terms. As used in the Agreement, the following terms
shall have the meanings specified below:
“Bankruptcy
Code” shall mean Title 11 of the United States Code entitled
“Bankruptcy,” as now and hereinafter in effect, or any successor
statute.
“Bankruptcy
Law” shall mean the Bankruptcy Code and any other Federal, state
or foreign bankruptcy, insolvency, receivership or similar law.
“Capital
Stock” shall mean:
(1) in
the case of a corporation, corporate stock;
(2) in
the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock;
(3) in
the case of a partnership or limited liability company, partnership or
membership interests (whether general or limited); and
(4) any
other interest or participation that confers on a person or entity the right
to
receive a share of the profits and losses of, or distributions of assets of,
another person or entity that has issued such interest or
participation.
“Collateral”
shall mean, collectively, all “Collateral”, as defined in each of the First
Priority Debt Agreement or any other First Priority Debt Document and the Second
Priority Debt Agreement or any other Second Priority Debt Document.
“Collateral
Agents” shall mean the First Priority Agent and the Second
Priority Agent.
“Company”
shall have the meaning assigned to such term in the preliminary statement to
this Agreement.
-2-
“Debt
Agreements” shall have the meaning assigned to such term in the
preliminary statement of this Agreement.
“Debt
Documents” shall mean the First Priority Debt Documents and the
Second Priority Debt Documents.
“DIP
Financing” shall have the meaning assigned to such term in Section
6.01(a).
“DIP
Financing Liens” shall have the meaning assigned to such term in
Section 6.01(a).
“Discharge
of First Priority Claims” shall mean, subject to Sections 7.02 and
7.04(a), (a) payment in full in cash of the principal of and interest (including
interest accruing during the pendency of any Insolvency or Liquidation
Proceeding, regardless of whether allowed or allowable in such Insolvency or
Liquidation Proceeding) and premium, if any, on all Indebtedness outstanding
under the First Priority Debt Documents to the extent constituting First
Priority Claims, (b) cancellation of or the entry into arrangements satisfactory
to the First Priority Agent and the Issuing Bank with respect to all Letters
of
Credit issued and outstanding under the First Priority Debt Agreement and (c)
termination or expiration of all commitments to lend and all obligations to
issue or extend Letters of Credit under the First Priority Debt
Agreement.
“Discharge
of Second Priority Claims” shall mean, subject to Section 7.04(b),
(a) payment in full in cash of the principal of and interest (including interest
accruing during the pendency of any Insolvency or Liquidation Proceeding,
regardless of whether allowed or allowable in such Insolvency or Liquidation
Proceeding) and premium, if any, on all Indebtedness outstanding under the
Second Priority Debt Documents to the extent constituting Second Priority Claims
and (b) payment in full of all First Priority Claims acquired by the Second
Priority Agent and/or any of the Second Priority Secured Parties as contemplated
by Section 10.06 hereof.
“Disposition”
shall mean any sale, lease, exchange, transfer or other
disposition. “Dispose” shall have a
correlative meaning.
“Excluded
Collateral” shall mean any Capital Stock of Subsidiaries, whether
or not such Capital Stock is pledged to secure any First Priority
Claims.
“First
Priority Agent” shall have the meaning assigned to such term in
the preamble to this Agreement.
“First
Priority Claims” shall mean, at any time, (i) all Indebtedness
under the First Priority Debt Agreement permitted pursuant to clause (1) of
the
definition of “Permitted Debt” in Section 4.09(b) of the Second Priority Debt
Agreement, and all Obligations (other than principal) related to such
Indebtedness and owing under the documents relating to such Indebtedness and
(ii) all Hedging Obligations permitted under such First Priority Debt Agreement
and secured by the First Priority Liens.
“First
Priority Collateral” shall mean all “Collateral”, as defined in
the First Priority Debt Agreement or any other First Priority Debt Document,
and
any other assets of any Grantor now or at any time hereafter subject to Liens
which secure, but only to the extent securing, any First Priority
Claims.
-3-
“First
Priority Creditors” shall have the meaning assigned to such term
in the preliminary statement of this Agreement.
“First
Priority Debt Agreement” shall have the meaning assigned to such
term in the preliminary statement of this Agreement.
“First
Priority Debt Documents” shall mean the “Loan Documents”, as
defined in the First Priority Debt Agreement.
“First
Priority Liens” shall mean all Liens on the First Priority
Collateral to the extent such Liens secure the First Priority Claims, whether
created under the First Priority Security Documents or acquired by possession,
statute (including any judgment lien), operation of law, subrogation or
otherwise.
“First
Priority Mortgages” shall mean, collectively, each mortgage, deed
of trust, leasehold mortgage, assignment of leases and rents, modifications
and
any other agreement, document or instrument pursuant to which a Lien on real
property is granted by any Grantor to secure any First Priority Claims or under
which rights or remedies with respect to any such Lien are
governed.
“First
Priority Secured Parties” shall mean, at any time, (a) the First
Priority Creditors, (b) the First Priority Agent, (c) each other Person to
whom
any of the First Priority Claims is owed (including any Affiliate of a First
Priority Creditor to whom any First Priority Claims of the type described in
clause (ii) of the definition thereof is owed) and (d) the successors and
assigns of each of the foregoing.
“First
Priority Security Agreement” shall have the meaning assigned to
such term in the preliminary statement of this Agreement.
“First
Priority Security Documents” shall mean the First Priority Debt
Agreement, the First Priority Mortgages, the First Priority Security Agreement
and any other agreement, document or instrument pursuant to which a Lien is
granted by any Grantor to secure any First Priority Claims or under which rights
or remedies with respect to any such Lien are governed.
“Grantors”
shall mean the Company, the Parent and each Subsidiary that shall have created
or purported to create any First Priority Lien or Second Priority Lien on all
or
any part of its assets to secure any First Priority Claims or any Second
Priority Claims.
“Guarantors”
shall mean, collectively, the Parent and each Subsidiary that shall have
guaranteed any First Priority Claims or any Second Priority Claims, whether
by
executing and delivering the applicable Debt Agreement, or a separate guaranty
thereof, or a supplement thereto, or otherwise.
-4-
“Indebtedness”
shall mean and includes all obligations that constitute “Indebtedness”, as
defined in the First Priority Debt Agreement or the Second Priority Debt
Agreement, as applicable.
“Insolvency
or Liquidation Proceeding” shall mean (a) any voluntary or
involuntary proceeding under the Bankruptcy Code or any other Bankruptcy Law
with respect to any Grantor, (b) any voluntary or involuntary appointment of
a
receiver, trustee, custodian, sequestrator, conservator or similar official
for
any Grantor or for a substantial part of the property or assets of any Grantor,
(c) any voluntary or involuntary winding-up or liquidation of any Grantor,
or
(d) a general assignment for the benefit of creditors by any
Grantor.
“Inventory”
means, with respect to any Grantor, all of such Grantor’s now owned or hereafter
acquired right, title, and interest with respect to inventory, including goods
held for sale or lease or to be furnished under a contract of service, goods
that are leased by such Grantor as lessor, goods that are furnished by such
Grantor under a contract of service, and raw materials, work in process, or
materials used or consumed in such Grantor’s business.
“Letter
of Credit” shall have the meaning assigned to such term in the
First Priority Debt Agreement.
“Lien”
shall mean, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law, including
any conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest
in
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction other than a
precautionary financing statement not intended as a security
agreement.
“Liquidation
Sale” shall mean a so-called bulk sale, liquidation sale or “going
out of business sale” conducted either by any Secured Party or a Grantor in
respect to all or a substantial portion of such Grantor’s Collateral following
the occurrence and during the continuance of an Event of Default under, and
as
defined in, either the First Priority Debt Documents or Second Priority Debt
Documents.
“New
First Priority Agent” shall have the meaning assigned to such term
in Section 7.02.
“New
First Priority Claims” shall have the meaning assigned to such
term in Section 7.02.
“New
First Priority Debt Documents” shall have the meaning assigned to
such term in Section 7.02.
“Pledged
or Controlled Collateral” shall have the meaning assigned to such
term in Article V.
“Refinance”
shall mean, in respect of any Indebtedness, to refinance, extend, renew,
restructure (including by the amendment and restatement of any instrument or
agreement evidencing such Indebtedness) or replace or to issue other
Indebtedness in exchange or replacement for, such Indebtedness, in whole or
in
part. “Refinanced” and
“Refinancing” shall have correlative
meanings.
-5-
“Refinancing
Notice” shall have the meaning assigned to such term in Section
7.02.
“Release”
shall have the meaning assigned to such term in Section 3.04.
“Second
Priority Agent” shall have the meaning assigned to such term in
the preamble to this Agreement.
“Second
Priority Claims” shall mean the obligations of the Company and the
Guarantors under or with respect to (i) the Second Priority Debt Agreement,
(ii)
the promissory notes from time to time issued under the Second Priority Debt
Agreement, (iii) any guaranty by a Guarantor of the Second Priority Debt
Agreement or such promissory notes, or (iv) any other Second Priority Debt
Document.
“Second
Priority Collateral” shall mean all “Collateral”, as defined in
any Second Priority Debt Document, and any other assets of any Grantor now
or at
any time hereafter subject to Liens which secure, but only to the extent
securing, any Second Priority Claims.
“Second
Priority Creditors” shall mean the “Holders”, as defined in the
Second Priority Debt Agreement.
“Second
Priority Debt Agreement” shall have the meaning assigned to such
term in the preliminary statement of this Agreement.
“Second
Priority Debt Documents” shall mean the “Indenture Documents”, as
defined in the Second Priority Debt Agreement.
“Second
Priority Liens” shall mean all Liens on the Second Priority
Collateral securing the Second Priority Claims, whether created under the Second
Priority Security Documents or acquired by possession, statute (including any
judgment lien), operation of law, subrogation or otherwise.
“Second
Priority Mortgages” shall mean, collectively, each mortgage, deed
of trust, leasehold mortgage, assignment of leases and rents, modifications
and
any other agreement, document or instrument pursuant to which any Lien on real
property is granted by any Grantor to secure any Second Priority Claims or
under
which rights or remedies with respect to any such Lien are
governed.
“Second
Priority Permitted Actions” shall have the meaning assigned to
such term in Section 3.01(a).
“Second
Priority Secured Parties” shall mean, at any time, (a) the Second
Priority Creditors, (b) the Second Priority Trustee, (c) the Second Priority
Agent, (d) each other Person to whom any of the Second Priority Claims
(including indemnification obligations) is owed and (e) the successors and
assigns of each of the foregoing.
-6-
“Second
Priority Security Agreement” shall have the meaning assigned to
such term in the preliminary statement of this Agreement.
“Second
Priority Security Documents” shall mean the “Collateral
Agreements”, as defined in the Second Priority Debt Agreement, including the
Second Priority Mortgages and the Second Priority Security Agreement, and any
other agreement, document or instrument pursuant to which a Lien is granted
by
any Grantor to secure any Second Priority Claims or under which rights or
remedies with respect to any such Lien are governed.
“Secured
Parties” shall mean, as the context may require, the First
Priority Secured Parties and/or the Second Priority Secured
Parties.
“Security
Documents” shall mean the First Priority Security Documents and
the Second Priority Security Documents.
“Standstill
Period” shall have the meaning assigned to such term in Section
3.02(a).
“Subsidiary”
means:
(1) any
corporation, association or other business entity (other than a partnership)
of
which more than 50% of the total voting power (without regard to the occurrence
of any contingency) of Capital Stock is at the time owned or controlled,
directly or through another Subsidiary, by Parent or one or more of the other
Subsidiaries of Parent (or a combination thereof); and
(2) any
partnership (a) the sole general partner or the managing general partner of
which is Parent or a Subsidiary of Parent, (b) the only general partners of
which are Parent or one or more Subsidiaries of Parent (or any combination
thereof), or (c) as to which Parent and its Subsidiaries are entitled to receive
more than 50% of the assets of such partnership upon its
dissolution.
“Uniform
Commercial Code” or “UCC” shall mean the
Uniform Commercial Code (or any similar or equivalent legislation) as in effect
from time to time in any applicable jurisdiction.
SECTION
1.03. Terms
Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include
the corresponding masculine, feminine and neuter forms. The words
“include”, “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.” The word “will” shall be construed to
have the same meaning and effect as the word “shall”. Unless the
context requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended, restated,
supplemented or otherwise modified, (b) any reference herein (i) to any Person
shall be construed to include such Person’s successors and assigns and (ii) to
the Company or any other Grantor shall be construed to include the Company
or
such Grantor as debtor and debtor-in-possession and any receiver or trustee
for
the Company or any other Grantor, as the case may be, in any Insolvency or
Liquidation Proceeding or Liquidation Sale, (c) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles or Sections shall be construed to refer to
Articles or Sections of this Agreement and (e) the words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any
and
all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
-7-
ARTICLE
II
Lien
Priorities
SECTION
2.01. Relative
Priorities. Notwithstanding the date, manner or order
of grant, attachment or perfection of any Second Priority Lien or any First
Priority Lien, and notwithstanding any provision of the UCC or any other
applicable law or the provisions of any Security Document or any other Debt
Document or any other circumstance whatsoever, each Collateral Agent, for itself
and on behalf of the Secured Parties on whose behalf it acts in such capacity
therefor, hereby agrees that so long as the Discharge of First Priority Claims
has not occurred, (i) any First Priority Lien on any Collateral now or hereafter
held by or for the benefit of any First Priority Secured Party shall be senior
in right, priority, operation, effect and all other respects to any and all
Second Priority Liens on any Collateral and (ii) any Second Priority Lien on
any
Collateral now or hereafter held by or for the benefit of any Second Priority
Secured Party shall be junior and subordinate in right, priority, operation,
effect and all other respects to any and all First Priority Liens on any
Collateral.
SECTION
2.02. Prohibition on Contesting
Liens. Each Collateral Agent, for itself and on behalf
of the other Secured Parties on whose behalf it acts in such capacity therefor,
agrees that it will not, and hereby waives any right to, contest or support
any
other Person in contesting, in any proceeding (including any Insolvency or
Liquidation Proceeding), the priority, validity or enforceability of any Second
Priority Lien or any First Priority Lien, as the case may be; provided that
nothing in this Agreement shall be construed to prevent or impair the rights
of
any Collateral Agent or any other Secured Party to enforce this Agreement to
the
extent provided hereby.
SECTION
2.03. No New Liens. The
parties hereto agree that, so long as the Discharge of First Priority Claims
has
not occurred, none of the Grantors shall, nor shall any Grantor permit any
of
its subsidiaries to, (i) grant or permit any additional Liens on any asset
of a
Grantor to secure any Second Priority Claim unless it has granted, or
substantially concurrently therewith grants, a Lien on such asset of such
Grantor to secure the First Priority Claims or (ii) grant or permit any
additional Liens on any asset of a Grantor (other than Excluded Collateral)
to
secure any First Priority Claims unless it has granted, or substantially
concurrently therewith grants, a Lien on such asset of a Grantor to secure
the
Second Priority Claims, with each such Lien to be subject to the provisions
of
this Agreement. To the extent that the provisions of the immediately
preceding sentence are not complied with for any reason, without limiting any
other right or remedy available to the First Priority Agent or the other First
Priority Secured Parties, the Second Priority Agent agrees, for itself and
on
behalf of the other Second Priority Secured Parties, that any amounts received
by or distributed to any Second Priority Secured Party pursuant to or as a
result of any Lien granted in contravention of this Section 2.03 shall be
subject to Section 4.02.
-8-
SECTION
2.04. Similar
Collateral. The parties hereto acknowledge and agree
that it is their intention that the First Priority Collateral and the Second
Priority Collateral be identical, except that only the First Priority Collateral
will include the Excluded Collateral. In furtherance of the
foregoing, the parties hereto agree to cooperate in good faith in order to
determine, upon any reasonable request by the First Priority Agent or the Second
Priority Agent, the specific assets included in the First Priority Collateral
and the Second Priority Collateral, the steps taken to perfect the First
Priority Liens and the Second Priority Liens thereon and the identity of the
respective parties obligated under the First Priority Debt Documents and the
Second Priority Debt Documents in respect of the First Priority Claims and
the
Second Priority Claims, respectively.
ARTICLE
III
Enforcement
of Rights; Matters Relating to Collateral
SECTION
3.01. Exercise of Rights and Remedies; Option to
Purchase. (a) So long as the Discharge of First
Priority Claims has not occurred, whether or not any Insolvency or Liquidation
Proceeding or Liquidation Sale has been commenced, the First Priority Agent
and
the other First Priority Secured Parties shall have the exclusive right to
enforce rights and exercise remedies (including any right of setoff) with
respect to the Collateral (including making determinations regarding the
release, Disposition or restrictions with respect to the Collateral), or to
commence or seek to commence any action or proceeding with respect to such
rights or remedies (including any foreclosure action or proceeding or any
Insolvency or Liquidation Proceeding or Liquidation Sale), in each case, without
any consultation with or the consent of the Second Priority Agent or any other
Second Priority Secured Party; provided that, notwithstanding the
foregoing, (i) in any Insolvency or Liquidation Proceeding, the Second Priority
Agent may file a proof of claim or statement of interest with respect to the
Second Priority Claims; (ii) the Second Priority Agent may take any action
to
preserve or protect the validity and enforceability of the Second Priority
Liens, provided that no such action is (A) adverse to the First Priority Liens
or the rights of the First Priority Agent or any other First Priority Secured
Party to exercise remedies in respect thereof or (B) otherwise inconsistent
with
the terms of this Agreement, including the automatic release of Second Priority
Liens provided in Section 3.04; (iii) the Second Priority Secured
Parties may file any responsive or defensive pleadings in opposition to any
motion, claim, adversary proceeding or other pleading made by any Person
objecting to or otherwise seeking the disallowance of the claims of the Second
Priority Secured Parties, including any claims secured by the Collateral or
otherwise make any agreements or file any motions pertaining to the Second
Priority Claims, in each case, to the extent not inconsistent with the terms
of
this Agreement; (iv) the Second Priority Secured Parties may exercise rights
and
remedies as unsecured creditors, as provided in Section 3.03(a); and (v) subject
to Section 3.02, the Second Priority Agent and the other Second Priority Secured
Parties may enforce any of their rights and exercise any of their remedies
with
respect to the Collateral after the termination of the Standstill Period (the
actions described in this proviso being referred to herein as the
“Second Priority Permitted
Actions”). Except for the Second Priority Permitted
Actions, unless and until the Discharge of First Priority Claims has occurred,
the sole right of the Second Priority Agent and the other Second Priority
Secured Parties with respect to the Collateral shall be to receive the proceeds
of the Collateral, if any, remaining after the Discharge of First Priority
Claims has occurred and in accordance with the Second Priority Debt Documents
and applicable law.
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(b) In
exercising rights and remedies with respect to the Collateral, the First
Priority Agent and the other First Priority Secured Parties may enforce the
provisions of the First Priority Debt Documents and exercise remedies
thereunder, all in such order and in such manner as they may determine in their
sole discretion. Such exercise and enforcement shall include the
rights of an agent appointed by them to Dispose of Collateral upon foreclosure,
to incur expenses in connection with any such Disposition and to exercise all
the rights and remedies of a secured creditor under the Uniform Commercial
Code,
the Bankruptcy Code or any other Bankruptcy Law. The First Priority
Agent agrees to provide at least ten Business Days’ prior written notice to the
Second Priority Agent of its intention to foreclose upon or Dispose of any
Collateral; provided, however, that the failure to give any such notice
shall not in any way limit its ability to foreclose upon or Dispose of any
Collateral.
(c) The
Second Priority Agent, for itself and on behalf of the other Second Priority
Secured Parties, hereby acknowledges and agrees that no covenant, agreement
or
restriction contained in any Second Priority Security Document or any other
Second Priority Debt Document shall be deemed to restrict in any way the rights
and remedies of the First Priority Agent or the other First Priority Secured
Parties with respect to the Collateral as set forth in this Agreement and the
other First Priority Debt Documents.
(d) Notwithstanding
anything in this Agreement to the contrary, following the acceleration of the
Indebtedness then outstanding under the First Priority Debt Agreement, the
Second Priority Secured Parties may (but shall not be obligated to), at their
sole expense and effort, upon notice to the Company and the First Priority
Agent, require the First Priority Secured Parties to transfer and assign to
the
Second Priority Secured Parties, without warranty or representation or recourse,
all (but not less than all) of the First Priority Claims; provided that
(x) such assignment shall not conflict with any law, rule or regulation or
order
of any court or other Governmental Authority having jurisdiction, and (y) the
Second Priority Secured Parties shall have paid to the First Priority Agent,
for
the account of the First Priority Secured Parties, in immediately available
funds, an amount equal to 100% of the principal of such Indebtedness
plus all accrued and unpaid interest thereon plus all accrued
and unpaid fees plus all the other First Priority Claims then
outstanding (which shall include, with respect to (i) the aggregate face amount
of the Letters of Credit outstanding under the First Priority Debt Documents,
posting cash collateral in an amount equal to 105% thereof, and (ii) each
commodity or interest rate hedging, cap, collar, swap or other similar agreement
that evidences any Hedging Obligations included in such First Priority Claims,
100% of the aggregate amount of such First Priority Claims, after giving effect
to any netting arrangements, that the applicable Grantor would be required
to
pay if such commodity or interest rate hedging, cap, collar, swap or other
similar agreements were terminated at such time, calculated using the market
quotation method. In order to effectuate the foregoing, the First
Priority Agent shall calculate, upon the written request of the Second Priority
Agent from time to time, the amount in cash that would be necessary so to
purchase the First Priority Claims. If the right set forth in this
Section 3.01(d) is exercised, the parties shall endeavor to close promptly
thereafter but in any event within ten Business Days of the request set forth
in
the first sentence of this Section 3.01(d). If the Second Priority
Secured Parties exercise the right set forth in this Section 3.01(d), it shall
be exercised pursuant to documentation mutually acceptable to each of the First
Priority Agent and the Second Priority Agent.
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(e) In
exercising rights and remedies with respect to the Collateral, the Second
Priority Agent may enforce the provisions of the Second Priority Debt Documents
and exercise remedies thereunder, all in such order and in such manner as it
may
determine in its sole discretion, in each case, to the extent that such
enforcement or exercise is not otherwise prohibited by clauses (a) through
(d)
of this Section 3.01. Such exercise and enforcement shall, in each
case, to the extent that such enforcement or exercise is not otherwise
prohibited by clauses (a) through (d) of this Section 3.01, include the rights
of an agent appointed by it to Dispose of Collateral upon foreclosure, to incur
expenses in connection with any such Disposition and to exercise all the rights
and remedies of a secured creditor under the Uniform Commercial Code, the
Bankruptcy Code or any other Bankruptcy Law. The Second Priority
Agent agrees to provide at least ten Business Days’ prior written notice to the
First Priority Agent of its intention to foreclose upon or Dispose of any
Collateral; provided, however, that the failure to give any such notice shall
not in any way limit its ability to foreclose upon or Dispose of any Collateral
to the extent that such foreclosure is not otherwise prohibited by clauses
(a)
through (d) of this Section 3.01.
SECTION
3.02. No
Interference. The Second Priority Agent, for itself and
on behalf of the other Second Priority Secured Parties, agrees that, whether
or
not any Insolvency or Liquidation Proceeding or Liquidation Sale has been
commenced, the Second Priority Secured Parties:
(a) except
for Second Priority Permitted Actions, will not, so long as the Discharge of
First Priority Claims has not occurred, (A) enforce or exercise, or seek to
enforce or exercise, any rights or remedies (including any right of setoff)
with
respect to any Collateral (including the enforcement of any right under any
account control agreement, landlord waiver or bailee’s letter or any similar
agreement or arrangement to which the Second Priority Agent or any other Second
Priority Secured Party is a party) or (B) commence or join with any Person
(other than the First Priority Agent) in commencing, or petition for or vote
in
favor of any resolution for, any action or proceeding with respect to such
rights or remedies (including any foreclosure action); provided,
however, that the Second Priority Agent may enforce or exercise any or all
such rights and remedies, or commence, join with any Person in commencing,
or
petition for or vote in favor of any resolution for, any such action or
proceeding, after a period of 90 days has elapsed (which period shall be tolled
during any period in which the First Priority Agent shall not be entitled to
enforce or exercise any rights or remedies with respect to any Collateral as
a
result of (x) any injunction issued by a court of competent jurisdiction or
(y)
the automatic stay or any other stay in any Insolvency or Liquidation
Proceeding) since the date on which the Second Priority Agent has delivered
to
the First Priority Agent written notice of the acceleration of the Indebtedness
then outstanding under the Second Priority Debt Agreement (the
“Standstill Period”); provided further,
however, that (1) notwithstanding the expiration of the Standstill Period
or anything herein to the contrary, in no event shall the Second Priority Agent
or any other Second Priority Secured Party enforce or exercise any rights or
remedies with respect to any Collateral, or commence, join with any Person
at
any time in commencing, or petition for or vote in favor of any resolution
for,
any such action or proceeding, if the First Priority Agent or any other First
Priority Secured Party shall have commenced, and shall be diligently pursuing
(or shall have sought or requested relief from or modification of the automatic
stay or any other stay in any Insolvency or Liquidation Proceeding to enable
the
commencement and pursuit thereof), the enforcement or exercise of any rights
or
remedies with respect to any material portion of the Collateral or any such
action or proceeding (prompt written notice thereof to be given to the Second
Priority Agent by the First Priority Agent) and (2) after the expiration of
the
Standstill Period, so long as neither the First Priority Agent nor the First
Priority Secured Parties have commenced any action to enforce their Lien on
any
material portion of the Collateral, in the event that and for so long as the
Second Priority Secured Parties (or the Second Priority Agent on their behalf)
have commenced any actions to enforce their Liens with respect to any material
portion of the Collateral to the extent permitted hereunder and are diligently
pursuing such actions, neither the First Priority Secured Parties nor the First
Priority Agent shall take any action of a similar nature with respect to such
Collateral; provided that all other provisions of this Intercreditor
Agreement (including the turnover provisions of Article IV) are complied
with;
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(b) will
not contest, protest or object to any foreclosure action or proceeding brought
by the First Priority Agent or any other First Priority Secured Party, or any
other enforcement or exercise by any First Priority Secured Party of any rights
or remedies relating to the Collateral under the First Priority Debt Documents
or an Insolvency or Liquidation Proceeding or in connection with a Liquidation
Sale or otherwise, so long as Second Priority Liens attach to the proceeds
thereof subject to the relative priorities set forth in Section
2.01(a);
(c) subject
to the rights of the Second Priority Secured Parties under clause (i) above,
will not object to the forbearance by the First Priority Agent or any other
First Priority Secured Party from commencing or pursuing any foreclosure action
or proceeding or any other enforcement or exercise of any rights or remedies
with respect to the Collateral;
(d) will
not, so long as the Discharge of First Priority Claims has not occurred and
except for Second Priority Permitted Actions, take or receive any Collateral,
or
any proceeds thereof or payment with respect thereto, in connection with the
exercise of any right or enforcement of any remedy (including any right of
setoff) with respect to any Collateral or in connection with any insurance
policy award under a policy of insurance relating to any Collateral or any
condemnation award (or deed in lieu of condemnation) relating to any
Collateral;
(e) will
not, except for Second Priority Permitted Actions, take any action that would,
or could reasonably be expected to, hinder, in any manner, any exercise of
remedies under the First Priority Debt Documents, including any Disposition
of
any Collateral, whether by foreclosure or otherwise;
(f) will
not, except for Second Priority Permitted Actions, object to the manner in
which
the First Priority Agent or any other First Priority Secured Party may seek
to
enforce or collect the First Priority Claims or the First Priority Liens,
regardless of whether any action or failure to act by or on behalf of the First
Priority Agent or any other First Priority Secured Party is, or could be,
adverse to the interests of the Second Priority Secured Parties, and will not
assert, and hereby waive, to the fullest extent permitted by law, any right
to
demand, request, plead or otherwise assert or claim the benefit of any
marshalling, appraisal, valuation or other similar right that may be available
under applicable law with respect to the Collateral or any similar rights a
junior secured creditor may have under applicable law; and
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(g) will
not attempt, directly or indirectly, whether by judicial proceeding or
otherwise, to challenge or question the validity or enforceability of any First
Priority Claim or any First Priority Security Document, including this
Agreement, or the validity or enforceability of the priorities, rights or
obligations established by this Agreement.
SECTION
3.03. Rights as Unsecured
Creditors. The Second Priority Agent and the other
Second Priority Secured Parties may, in accordance with the terms of the Second
Priority Debt Documents and applicable law, enforce rights and exercise remedies
against any Grantor as unsecured creditors; provided that no such
action is otherwise inconsistent with the terms of this
Agreement. Without limiting the generality of the foregoing sentence,
the Second Priority Secured Parties shall be entitled to prosecute litigation
against any Grantor or any other Person liable in respect of the Second Priority
Claims, notwithstanding whether any Standstill Period is then in effect, but
shall be prohibited from taking any action to enforce any judgment until the
lapse of any applicable Standstill Period. Nothing in this Agreement
shall prohibit the receipt by the Second Priority Agent or any other Second
Priority Secured Party of the required payments of principal, premium, interest,
fees and other amounts due under the Second Priority Debt Documents so long
as
such receipt is not the direct or indirect result of the enforcement or exercise
by the Second Priority Agent or any other Second Priority Secured Party of
rights or remedies in contravention of this Agreement as a secured creditor
(including any right of setoff) against Collateral or enforcement in
contravention of this Agreement of any Second Priority Lien against Collateral
(including any judgment lien resulting from the exercise of remedies available
to an unsecured creditor).
SECTION
3.04. Automatic Release of Second Priority
Liens.
(a)
If, in connection with (i) any Disposition of any Collateral permitted under
the
terms of the First Priority Debt Documents or (ii) the enforcement or exercise
of any rights or remedies with respect to the Collateral, including any
Disposition of Collateral, the First Priority Agent, for itself and on behalf
of
the other First Priority Secured Parties, (x) releases any of the First Priority
Liens, or (y) releases any Guarantor (other than the Parent) from its
obligations under its guarantee of the First Priority Claims (in each case,
a
“Release”), other than any such Release granted
following (and not as a condition to) the Discharge of First Priority Claims,
then the Second Priority Liens on such Collateral, and the obligations of such
Guarantor under its guarantee of the Second Priority Claims, shall be
automatically, unconditionally and simultaneously released, and the Second
Priority Agent shall, for itself and on behalf of the other Second Priority
Secured Parties, promptly execute and deliver to the First Priority Agent,
the
relevant Grantor or such Guarantor such termination statements, releases and
other documents as the First Priority Agent or the relevant Grantor or Guarantor
may reasonably request to effectively confirm such Release.
(b) Until
the Discharge of First Priority Claims occurs, the Second Priority Agent, for
itself and on behalf of each other Second Priority Secured Party, hereby
appoints the First Priority Agent, and any officer or agent of the First
Priority Agent, with full power of substitution, as the attorney-in-fact of
each
Second Priority Secured Party for the purpose of carrying out the provisions
of
this Section 3.04 and taking any action and executing any instrument that the
First Priority Agent may deem necessary or advisable to accomplish the purposes
of this Section 3.04 (including any endorsements or other instruments of
transfer or release), which appointment is irrevocable and coupled with an
interest but may only be exercised if the First Priority Agent requests that
the
Second Priority Agent (or applicable Second Priority Secured Party) execute
such
instrument and such request is declined.
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SECTION
3.05. Automatic Release of First Priority
Liens. If, in connection with the enforcement or
exercise of any rights or remedies with respect to the Collateral after the
expiration of the Standstill Period that is permitted in accordance with clause
(2) of the second proviso to Section 3.02(a), including any Disposition of
Collateral, the Second Priority Agent, for itself and on behalf of the other
Second Priority Secured Parties, (x) releases any of the Second Priority Liens,
or (y) releases any Guarantor from its obligations under its guarantee of the
Second Priority Claims (in each case, a “Second Priority
Release”), then the First Priority Liens on such Collateral, and
the obligations of such Guarantor under its guarantee of the First Priority
Claims, shall be automatically, unconditionally and simultaneously released,
and
the First Priority Agent shall, for itself and on behalf of the other First
Priority Secured Parties, promptly execute and deliver to the Second Priority
Agent, the relevant Grantor or such Guarantor such termination statements,
releases and other documents as the Second Priority Agent or the relevant
Grantor or Guarantor may reasonably request to effectively confirm such release;
provided that so long as the Discharge of First Priority Claims has not
occurred, the proceeds of, or payments with respect to, any Second Priority
Release that are received by the Second Priority Agent or any other Second
Priority Secured Party, shall be segregated and held in trust and forthwith
transferred or paid over to the First Priority Agent for the benefit of the
First Priority Secured Parties in accordance with Section 4.02; provided
further, however, that the First Priority Lender shall not be obligated to
release the First Priority Liens on any Collateral in connection with any sale
or other Disposition of Collateral to a Second Priority Secured Party or an
affiliate thereof or any other transaction other than a sale of such Collateral
to a third Person with respect to which at least 75% of the consideration
therefor consists of cash and cash equivalents.
SECTION
3.06. Insurance and Condemnation
Awards. So long as the Discharge of First Priority
Claims has not occurred, the First Priority Agent and the other First Priority
Secured Parties shall have the exclusive right, subject to the rights of the
Grantors under the First Priority Debt Documents, to settle and adjust claims
in
respect of Collateral under policies of insurance covering Collateral and to
approve any award granted in any condemnation or similar proceeding, or any
deed
in lieu of condemnation, in respect of the Collateral. All proceeds
of any such policy and any such award, or any payments with respect to a deed
in
lieu of condemnation, shall (a) first, prior to the Discharge of First Priority
Claims and subject to the rights of the Grantors under the First Priority Debt
Documents, be paid to the First Priority Agent for the benefit of First Priority
Secured Parties pursuant to the terms of the First Priority Debt Documents,
(b)
second, after the Discharge of First Priority Claims and subject to the rights
of the Grantors under the Second Priority Debt Documents, be paid to the Second
Priority Agent for the benefit of the Second Priority Secured Parties pursuant
to the terms of the Second Priority Debt Documents, and (c) third, be paid
to
the owner of the subject property or as a court of competent jurisdiction may
otherwise direct. Until the Discharge of First Priority Claims has
occurred, if the Second Priority Agent or any other Second Priority Secured
Party shall, at any time, receive any proceeds of any such insurance policy
or
any such award or payment, it shall transfer and pay over such proceeds to
the
First Priority Agent in accordance with Section 4.02.
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SECTION
3.07. Notification of Release of
Collateral. Each of the First Priority Agent and the
Second Priority Agent shall give the other prompt written notice of the
Disposition by it of, and Release by it of the Lien on, any
Collateral. Such notice shall describe in reasonable detail the
subject Collateral, the parties involved in such Disposition or Release, the
place, time manner and method thereof, and the consideration, if any, received
therefor; provided, however, that the failure to give any such notice
shall not in and of itself in any way impair the effectiveness of any such
Disposition or Release.
ARTICLE
IV
Payments
SECTION
4.01. Application of
Proceeds. Any Collateral or proceeds thereof received
by any Secured Party in connection with any Disposition of, or collection on,
such Collateral upon the enforcement or exercise of any right or remedy
(including any right of setoff) will be applied as follows:
first,
to
the payment of costs and expenses of the applicable Secured Party in connection
with such enforcement or exercise;
second,
after all such costs and expenses have been paid in full in cash, to the payment
of the First Priority Claims in accordance with the First Priority Debt
Documents;
third,
after all such costs and expenses have been paid in full in cash and the
Discharge of First Priority Claims has occurred, to the payment of the Second
Priority Claims, and
fourth,
after all such costs and expenses have been paid in full in cash, the Discharge
of First Priority Claims has occurred, and the Discharge of Second Priority
Claims has occurred, any surplus Collateral or proceeds then remaining will
be
returned to the Company, the applicable Guarantor or to whosoever may be
lawfully entitled to receive the same or as a court of competent jurisdiction
may direct.
SECTION
4.02. Payment Over. So
long as the Discharge of First Priority Claims has not occurred, any Collateral
or any proceeds thereof (together with assets or proceeds subject to Liens
referred to in the final sentence of Section 2.03) received by the Second
Priority Agent or any other Second Priority Secured Party in connection with
any
Disposition of, or collection on, such Collateral upon the enforcement or the
exercise of any right or remedy (including any right of setoff) with respect
to
the Collateral, or in connection with any insurance policy claim or any
condemnation award (or deed in lieu of condemnation) with respect to the
Collateral, shall be segregated and held in trust and forthwith transferred
or
paid over to the First Priority Agent for the benefit of the First Priority
Secured Parties in the same form as received, together with any necessary
endorsements, or as a court of competent jurisdiction may otherwise
direct. Until the Discharge of First Priority Claims occurs, the
Second Priority Agent, for itself and on behalf of each other Second Priority
Secured Party, hereby appoints the First Priority Agent, and any officer or
agent of the First Priority Agent, with full power of substitution, the
attorney-in-fact of each Second Priority Secured Party for the purpose of
carrying out the provisions of this Section 4.02 and taking any action and
executing any instrument that the First Priority Agent may deem necessary or
advisable to accomplish the purposes of this Section 4.02, which appointment
is
irrevocable and coupled with an interest.
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SECTION
4.03. Certain Agreements with Respect to
Unenforceable Liens. Notwithstanding anything to the
contrary contained herein, if in any Insolvency or Liquidation Proceeding a
determination is made that any Lien encumbering any Collateral is not
enforceable for any reason, then the Second Priority Agent and the Second
Priority Secured Parties agree that, any distribution or recovery they may
receive with respect to, or allocable to, the value of the assets constituting
Collateral subject to an enforceable Lien in favor of the Second Priority
Secured Parties or any proceeds thereof shall (for so long as the Discharge
of
First Priority Claims has not occurred) be segregated and held in trust and
forthwith paid over to the First Priority Agent for the benefit of the First
Priority Secured Parties in the same form as received without recourse,
representation or warranty (other than a representation of the Second Priority
Agent that it has not otherwise sold, assigned, transferred or pledged any
right, title or interest in and to such distribution or recovery) but with
any
necessary endorsements or as a court of competent jurisdiction may otherwise
direct. Until the Discharge of First Priority Claims occurs, the
Second Priority Agent, for itself and on behalf of each other Second Priority
Secured Party, hereby appoints the First Priority Agent, and any officer or
agent of the First Priority Agent, with full power of substitution, the
attorney-in-fact of each Second Priority Secured Party for the limited purpose
of carrying out the provisions of this Section 4.03 and taking any action and
executing any instrument that the First Priority Agent may deem necessary or
advisable to accomplish the purposes of this Section 4.03, which appointment
is
irrevocable and coupled with an interest.
ARTICLE
V
Bailment
for Perfection of Certain Security Interests
(a) The
parties agree that if the First Priority Agent shall at any time hold a First
Priority Lien on any Collateral that can be perfected or the priority of which
can be enhanced by the possession or control of such Collateral or of any
account in which such Collateral is held, and if such Collateral or any such
account is in fact in the possession or under the control of the First Priority
Agent, or of agents or bailees of the First Priority Agent (such Collateral
being referred to herein as the “Pledged or Controlled
Collateral”), the First Priority Agent shall, solely for the
purpose of perfecting the Second Priority Liens granted under the Second
Priority Debt Documents and subject to the terms and conditions of this Article
V, also (i) hold and/or maintain control of such Pledged or Controlled
Collateral as gratuitous bailee for and representative (as defined in Section
1-201(35) of the Uniform Commercial Code as in effect in the State of New York)
of, or as agent for, the Second Priority Agent, (ii) with respect to any
securities accounts included in the Collateral, have “control” (within the
meaning of Section 8-106(d)(3) of the UCC) of such securities accounts on behalf
of the Second Priority Agent and (iii) with respect to any deposit accounts
included in the Collateral, act as agent for the Second Priority Agent and
any
assignee.
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(b) So
long as the Discharge of First Priority Claims has not occurred, the First
Priority Agent shall be entitled to deal with the Pledged or Controlled
Collateral in accordance with the terms of this Agreement and the other First
Priority Debt Documents as if the Second Priority Liens did not
exist. The obligations and responsibilities of the First Priority
Agent to the Second Priority Agent and the other Second Priority Secured Parties
under this Article V shall be limited solely to holding or controlling the
Pledged or Controlled Collateral as gratuitous bailee and representative (as
defined in Section 1 201(35) of the Uniform Commercial Code as in effect in
the
State of New York) in accordance with this Article
V. Without limiting the foregoing, the First Priority Agent shall
have no obligation or responsibility to ensure that any Pledged or Controlled
Collateral is genuine or owned by any of the Grantors. The First
Priority Agent acting pursuant to this Article V shall not, by reason of this
Agreement, any other Security Document or any other document, have a fiduciary
relationship in respect of any other First Priority Secured Party, the Second
Priority Agent or any other Second Priority Secured Party.
(c) Upon
the Discharge of First Priority Claims, the First Priority Agent shall transfer
the possession and control of the Pledged or Controlled Collateral, together
with any necessary endorsements but without recourse or warranty, to the Second
Priority Agent, and if no Second Priority Claims are outstanding at such time,
to the applicable Grantor, in each case so as to allow such Person to obtain
possession and control of such Pledged or Controlled Collateral. In
connection with any transfer under the immediately preceding sentence, the
First
Priority Agent agrees, at the expense of the Grantors, to take all actions
in
its power as shall be reasonably requested by the Second Priority Agent to
permit the Second Priority Agent to obtain, for the benefit of the Second
Priority Secured Parties, a first priority security interest in the Pledged
or
Controlled Collateral.
(d) After
the Discharge of First Priority Claims and upon the Discharge of Second Priority
Claims, the Second Priority Agent shall transfer the possession and control
of
the Pledged or Controlled Collateral, together with any necessary endorsements
but without recourse or warranty, to the applicable Grantor, in each case so
as
to allow such Person to obtain possession and control of such Pledged or
Controlled Collateral.
ARTICLE
VI
Insolvency
or Liquidation Proceedings
SECTION
6.01. Finance and Sale
Matters. (a) Until the Discharge of First Priority
Claims has occurred, the Second Priority Agent, for itself and on behalf of
the
other Second Priority Secured Parties, and subject to the provisions of Section
6.01(c), agrees that, in the event of any Insolvency or Liquidation Proceeding,
the Second Priority Secured Parties:
(i) will
not oppose or object to the use of any Collateral constituting cash collateral
under Section 363 of the Bankruptcy Code, or any comparable provision of any
other Bankruptcy Law, unless the First Priority Secured Parties, or a
representative authorized by the First Priority Secured Parties, shall oppose
or
object to such use of cash collateral;
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(ii) will
not oppose or object to any post-petition financing provided to any Grantor,
whether provided by the First Priority Secured Parties or any other Person,
under Section 364 of the Bankruptcy Code, or any comparable provision of any
other Bankruptcy Law (a “DIP Financing”), or the Liens
securing any DIP Financing (“DIP Financing Liens”),
unless the First Priority Secured Parties, or a representative authorized by
the
First Priority Secured Parties, shall then oppose or object to such DIP
Financing or such DIP Financing Liens, and, to the extent that such DIP
Financing Liens are senior to, or rank pari passu with, the First
Priority Liens on the Collateral, the Second Priority Agent will, for itself
and
on behalf of the other Second Priority Secured Parties, subordinate the Second
Priority Liens on the Collateral to the First Priority Liens on the Collateral,
if applicable, and the DIP Financing Liens on the terms of this Agreement;
provided that, notwithstanding anything herein to the contrary, the
Second Priority Secured Parties retain their rights under the Bankruptcy Code
to
make post-petition financing proposals and such proposals shall not be deemed
to
be an objection to any other DIP Financing proposals so long as (x) any court
order approving such post-petition financing requires that the First Priority
Claims be paid in full in cash as a condition to such post-petition financing,
and (y) the First Priority Claims are paid in full in cash on the date of such
post-petition financing, which date shall be no later than 10 days after the
date on which such post-petition financing is approved by the court in which
such Insolvency or Liquidation Proceeding is pending;
(iii) except
to the extent permitted by paragraph (b) of this Section 6.01, in connection
with the use of cash collateral as described in clause (i) above or a DIP
Financing, will not request adequate protection with respect to any Collateral
or any other relief in connection with such use of cash collateral, DIP
Financing or DIP Financing Liens; and
(iv) will
not oppose or object to any Disposition of any Collateral free and clear of
the
Second Priority Liens or other claims under Section 363 of the Bankruptcy Code,
or any comparable provision of any other Bankruptcy Law, if the First Priority
Secured Parties, or a representative authorized by the First Priority Secured
Parties, shall consent to such Disposition free and clear of First Priority
Liens.
(b) The
Second Priority Agent, for itself and on behalf of the other Second Priority
Secured Parties, agrees that no Second Priority Secured Party shall contest,
or
support any other Person in contesting, (i) any request by the First Priority
Agent or any other First Priority Secured Party for adequate protection in
respect of any First Priority Claims or (ii) any objection, based on a claim
of
a lack of adequate protection with respect of any First Priority Claims, by
the
First Priority Agent or any other First Priority Secured Party to any motion,
relief, action or proceeding. Notwithstanding the immediately
preceding sentence, if, in connection with any DIP Financing or use of cash
collateral, (A) any First Priority Secured Party seeks or requests adequate
protection in the form of a Lien on additional collateral, the Second Priority
Agent may, for itself and on behalf of the other Second Priority Secured
Parties, seek or request adequate protection in the form of a Lien on such
additional collateral, which Lien will be subordinated to the First Priority
Liens and DIP Financing Liens on the same basis as the other Second Priority
Liens are subordinated to the First Priority Liens under this Agreement or
(B)
any Second Priority Secured Party is granted adequate protection in the form
of
a Lien on additional collateral, the First Priority Agent shall, for itself
and
on behalf of the other First Priority Secured Parties, be granted adequate
protection in the form of a Lien on such additional collateral that is senior
to
such Second Priority Lien as security for the First Priority
Claims.
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(c) Notwithstanding
the foregoing, the applicable provisions of Section 6.01(a) and (b) shall only
be binding on the Second Priority Secured Parties with respect to any DIP
Financing to the extent the principal amount of such DIP Financing, when taken
together with the aggregate principal amount of the First Priority Claims
(which, in each case, for the avoidance of doubt shall not include any First
Priority Claims of the type described in clause (ii) of the definition thereof),
does not exceed the sum of (i) the amount of Indebtedness at the time permitted
to be outstanding pursuant to clause (1) of the definition of “Permitted Debt”
in Section 4.09(b) of the Second Priority Debt Document, and (ii)
$5,000,000.
SECTION
6.02. Relief from the Automatic
Stay. The Second Priority Agent, for itself and on
behalf of the other Second Priority Secured Parties, agrees that, so long as
the
Discharge of First Priority Claims has not occurred, no Second Priority Secured
Party shall, without the prior written consent of the First Priority Agent,
seek
or request relief from or modification of the automatic stay or any other stay
in any Insolvency or Liquidation Proceeding in respect of any part of the
Collateral, any proceeds thereof or any Second Priority Lien on the
Collateral.
SECTION
6.03. Reorganization
Securities. If, in any Insolvency or Liquidation
Proceeding, debt obligations of the reorganized debtor secured by Liens upon
any
property of the reorganized debtor are distributed, pursuant to a plan of
reorganization or similar dispositive restructuring plan, on account of the
First Priority Claims and the Second Priority Claims, then, to the extent the
debt obligations distributed on account of the First Priority Claims, on account
of the Second Priority Claims are secured by Liens upon the same assets or
property, the provisions of this Agreement will survive the distribution of
such
debt obligations pursuant to such plan and will apply with like effect to the
Liens securing such debt obligations.
SECTION
6.04. Post-Petition
Interest. (a) The Second Priority Agent, for itself and
on behalf of the other Second Priority Secured Parties, agrees that no Second
Priority Secured Party shall oppose or seek to challenge any claim by the First
Priority Agent or any other First Priority Secured Party for allowance in any
Insolvency or Liquidation Proceeding of First Priority Claims consisting of
post-petition interest, fees or expenses to the extent of the value of the
First
Priority Liens (it being understood and agreed that such value shall be
determined without regard to the existence of the Second Priority Liens on
the
Collateral).
(b) The
First Priority Agent, for itself and on behalf of the other First Priority
Secured Parties, agrees that the Second Priority Agent or any other Second
Priority Secured Party may make a claim for allowance in any Insolvency or
Liquidation Proceeding of Second Priority Claims consisting of post-petition
interest, fees or expenses to the extent of the value of the Second Priority
Liens; provided, however, that if the First Priority Secured Parties
shall have made any such claim, such claim (A) shall have also have been
approved or (B) shall have been approved prior to, or will be approved
contemporaneous with, the approval of any such claim by any Second Priority
Secured Party.
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SECTION
6.05. Certain Waivers by the Second Priority
Secured Parties. The Second Priority Agent, for itself
and on behalf of the other Second Priority Secured Parties, waives any claim
any
Second Priority Secured Party may hereafter have against any First Priority
Secured Party arising out of (a) the election by any First Priority Secured
Party of the application of Section 1111(b)(2) of the Bankruptcy Code, or any
comparable provision of any other Bankruptcy Law, or (b) any use of cash
collateral or financing arrangement, or any grant of a security interest in
the
Collateral, in any Insolvency or Liquidation Proceeding.
SECTION
6.06. Certain Voting
Matters. Each of the First Priority Agent, on behalf of
the First Priority Secured Parties and the Second Priority Agent on behalf
of
the Second Priority Secured Parties, agrees that, without the written consent
of
the other, it will not seek to vote with the other as a single class in
connection with any plan of reorganization in any Insolvency or Liquidation
Proceeding. Except as provided in this Section 6.06, nothing in this
Agreement is intended, or shall be construed, to limit the ability of the Second
Priority Agent or the Second Priority Secured Parties to vote on any plan of
reorganization that maintains the lien subordination provisions of this
Agreement or of either the First Priority Secured Parties or Second Priority
Secured Parties, to contest any plan of reorganization that does not maintain
the lien subordination provisions of this Agreement.
ARTICLE
VII
Other
Agreements
SECTION
7.01. Matters Relating to Debt
Documents. (a) Each of the Company and the Second
Priority Agent agrees that the Second Priority Debt Agreement and each Second
Priority Security Document shall contain the applicable provisions set forth
on
Annex I hereto, or similar provisions approved by the First Priority Agent,
which approval shall not be unreasonably withheld or delayed. Each of
the Company and the Second Priority Agent further agrees that each Second
Priority Mortgage covering any Collateral shall contain such other language
as
the First Priority Agent may reasonably request to reflect the subordination
of
such Second Priority Mortgage to the First Priority Security Document covering
such Collateral pursuant to this Agreement.
SECTION
7.02. Effect of Refinancing of Indebtedness under
First Priority Debt Documents. If, substantially
contemporaneously with the Discharge of First Priority Claims, the Grantors
Refinance Indebtedness outstanding under the First Priority Debt Documents
and
provided that (a) such Refinancing is permitted hereby and (b) the Company
gives
to the Second Priority Agent written notice (the “Refinancing
Notice”) electing the application of the provisions of this
Section 7.02 to such Refinancing Indebtedness, then (i) such Discharge of First
Priority Claims shall automatically be deemed not to have occurred for all
purposes of this Agreement, (ii) such Refinancing Indebtedness and all other
obligations under the documents evidencing such Indebtedness (the
“New First Priority Claims”) shall automatically be
treated as First Priority Claims for all purposes of this Agreement, including
for purposes of the Lien priorities and rights in respect of Collateral set
forth herein, (iii) the Debt Agreement and the other documents evidencing such
Refinancing Indebtedness (the “New First Priority Debt
Documents”) shall automatically be treated as the First Priority
Debt Agreement and the First Priority Debt Documents and, in the case of New
First Priority Debt Documents that are security documents pursuant to which
any
Grantor has granted a Lien to secure any New First Priority Claim, as the First
Priority Security Documents for all purposes of this Agreement, (iv) the
collateral agent under the New First Priority Debt Documents (the
“New First Priority Agent”) shall be deemed to be the
First Priority Agent for all purposes of this Agreement and (v) the lenders
under the New First Priority Debt Documents shall be deemed to be the First
Priority Creditors for all purposes of this Agreement. Upon receipt
of a Refinancing Notice, which notice shall include the identity of the New
First Priority Agent, the Second Priority Agent shall promptly enter into such
documents and agreements (including amendments or supplements to this Agreement)
as the Company or such New First Priority Agent may reasonably request in order
to provide to the New First Priority Agent the rights and powers contemplated
hereby, in each case consistent in all material respects with the terms of
this
Agreement. The Company shall cause the agreement, document or
instrument pursuant to which the New First Priority Agent is appointed to
provide that the New First Priority Agent agrees to be bound by the terms of
this Agreement. In furtherance of Section 2.03, if the New First
Priority Claims are secured by assets of the Grantors (other than Excluded
Collateral) that do not also secure the Second Priority Claims, the applicable
Grantors shall promptly grant a Second Priority Lien on such assets to secure
the Second Priority Claims.
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SECTION
7.03. No Waiver by First Priority Secured
Parties. Other than with respect to the Second Priority
Permitted Actions, nothing contained herein shall prohibit or in any way limit
the First Priority Agent or any other First Priority Secured Party from
opposing, challenging or objecting to, in any Insolvency or Liquidation
Proceeding or otherwise, any action taken, or any claim made, by the Second
Priority Agent or any other Second Priority Secured Party, including any request
by the Second Priority Agent or any other Second Priority Secured Party for
adequate protection or any exercise by the Second Priority Agent or any other
Second Priority Secured Party of any of its rights and remedies under the Second
Priority Debt Documents or otherwise.
SECTION
7.04. Reinstatement. If,
in any Insolvency or Liquidation Proceeding or otherwise, all or part of any
payment with respect to the First Priority Claims previously made shall be
rescinded for any reason whatsoever, then the First Priority Claims shall be
reinstated to the extent of the amount so rescinded and, if theretofore
terminated, this Agreement shall be reinstated in full force and effect and
such
prior termination shall not diminish, release, discharge, impair or otherwise
affect the Lien priorities and the relative rights and obligations of the First
Priority Secured Parties and the Second Priority Secured Parties provided for
herein.
SECTION
7.05. Authorization of Collateral
Agents. By accepting the benefits of this Agreement and
the other First Priority Security Documents, each First Priority Secured Party
hereby authorizes the First Priority Agent to enter into this Agreement and
to
act on its behalf as collateral agent hereunder and in connection
herewith. By accepting the benefits of this Agreement and the other
Second Priority Security Documents, each Second Priority Secured Party hereby
authorizes the Second Priority Agent to enter into this Agreement and to act
on
its behalf as collateral agent hereunder and in connection
herewith.
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SECTION
7.06. Further
Assurances. Each of the First Priority Agent, for
itself and on behalf of the other First Priority Secured Parties, and the Second
Priority Agent, for itself and on behalf of the other Second Priority Secured
Parties, and each Grantor party hereto, for itself and on behalf of its
subsidiaries, agrees that it will execute, or will cause to be executed, any
and
all further documents, agreements and instruments, and take all such further
actions, as may be required under any applicable law, or which the First
Priority Agent or the Second Priority Agent may reasonably request, to
effectuate the terms of this Agreement, including the relative Lien priorities
provided for herein.
ARTICLE
VIII
Representations
and Warranties
SECTION
8.01. Representations and Warranties of Each
Party. Each party hereto represents and warrants to the
other parties hereto as follows:
(a) Such
party is duly organized, validly existing and in good standing under the laws
of
the jurisdiction of its organization and has all requisite power and authority
to execute and deliver this Agreement and perform its obligations
hereunder.
(b) This
Agreement has been duly executed and delivered by such party and constitutes
a
legal, valid and binding obligation of such party, enforceable in accordance
with its terms.
(c) The
execution, delivery and performance by such party of this Agreement (i) do
not
require any consent or approval of, registration or filing with or any other
action by any governmental authority (except as contemplated hereby) and (ii)
will not violate any provision of law, statute, rule or regulation, or of the
certificate or articles of incorporation or other constitutive documents or
by-laws of such party or any order of any governmental authority or any
provision of any indenture, agreement or other instrument applicable to or
binding upon such party.
SECTION
8.02. Representations and Warranties of Each
Collateral Agent. Each Collateral Agent represents and
warrants to the other parties hereto that it has been authorized by the Secured
Parties under and as defined in the First Priority Debt Agreement or the Second
Priority Security Agreement, as applicable, to enter into this
Agreement.
ARTICLE
IX
No
Reliance; No Liability; Obligations Absolute
SECTION
9.01. No Reliance;
Information. The First Priority Secured Parties and the
Second Priority Secured Parties shall have no duty to disclose to any Second
Priority Secured Party or to any First Priority Secured Party, respectively,
any
information relating to the Company or any of the Grantors, or any other
circumstance bearing upon the risk of nonpayment of any of the First Priority
Claims or the Second Priority Claims, as the case may be, that is known or
becomes known to any of them or any of their Affiliates. In the event
any First Priority Secured Party or any Second Priority Secured Party, in its
sole discretion, undertakes at any time or from time to time to provide any
such
information to, respectively, any Second Priority Secured Party or any First
Priority Secured Party, it shall be under no obligation (i) to make, and shall
not make or be deemed to have made, any express or implied representation or
warranty, including with respect to the accuracy, completeness, truthfulness
or
validity of the information so provided, (ii) to provide any additional
information or to provide any such information on any subsequent occasion or
(iii) to undertake any investigation.
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SECTION
9.02. No Warranties or
Liability. (a) The First Priority Agent, for itself and on
behalf of the other First Priority Secured Parties, acknowledges and agrees
that, except for the representations and warranties set forth in Article VIII,
neither the Second Priority Agent nor any other Second Priority Secured Party
has made any express or implied representation or warranty, including with
respect to the execution, validity, legality, completeness, collectibility
or
enforceability of any of the Second Priority Debt Documents, the ownership
of
any Collateral or the perfection or priority of any Liens
thereon. The Second Priority Agent, for itself and on behalf of the
other Second Priority Secured Parties, acknowledges and agrees that, except
for
the representations and warranties set forth in Article VIII, neither the First
Priority Agent nor any other First Priority Secured Party has made any express
or implied representation or warranty, including with respect to the execution,
validity, legality, completeness, collectibility or enforceability of any of
the
First Priority Debt Documents, the ownership of any Collateral or the perfection
or priority of any Liens thereon.
(b) The
Second Priority Agent and the other Second Priority Secured Parties shall have
no express or implied duty to the First Priority Agent or any other First
Priority Secured Party, and the First Priority Agent and the other First
Priority Secured Parties shall have no express or implied duty to the Second
Priority Agent or any other Second Priority Secured Party, to act or refrain
from acting in a manner which allows, or results in, the occurrence or
continuance of a default or an event of default under any First Priority Debt
Document and any Second Priority Debt Document (other than, in each case, this
Agreement), regardless of any knowledge thereof which they may have or be
charged with.
(c) The
Second Priority Agent, for itself and on behalf of the other Second Priority
Secured Parties, agrees no First Priority Secured Party shall have any liability
to the Second Priority Agent or any other Second Priority Secured Party, and
hereby waives any claim against any First Priority Secured Party, arising out
of
any and all actions which the First Priority Agent or the other First Priority
Secured Parties may take or permit or omit to take with respect to (i) the
First
Priority Debt Documents (other than this Agreement), (ii) the collection of
the
First Priority Claims or (iii) the maintenance of, the preservation of, the
foreclosure upon or the Disposition of any Collateral.
SECTION
9.03. Obligations
Absolute. The Lien priorities provided for herein and
the respective rights, interests, agreements and obligations hereunder of the
First Priority Agent and the other First Priority Secured Parties and the Second
Priority Agent and the other Second Priority Secured Parties shall remain in
full force and effect irrespective of:
(a) any
lack of validity or enforceability of any Debt Document;
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(b) any
change in the time, place or manner of payment of, or in any other term of
(including, subject to the limitations set forth in Section 7.01(a), the
Refinancing of), all or any portion of the First Priority Claims, it being
specifically acknowledged that a portion of the First Priority Claims consists
or may consist of Indebtedness that is revolving in nature, and the amount
thereof that may be outstanding at any time or from time to time may be
increased or reduced and subsequently reborrowed;
(c) any
change in the time, place or manner of payment of, or, subject to the
limitations set forth in Section 7.01(a), in any other term of, all or any
portion of the First Priority Claims;
(d) any
amendment, waiver or other modification, whether by course of conduct or
otherwise, of any Debt Document;
(e) the
securing of any First Priority Claims or Second Priority Claims with any
additional collateral or guarantees, or any exchange, release, voiding,
avoidance or non perfection of any security interest in any Collateral or any
other collateral or any release of any guarantee securing any First Priority
Claims or Second Priority Claims;
(f) the
commencement of any Insolvency or Liquidation Proceeding or Liquidation Sale
in
respect of the Company or any other Grantor; or
(g) any
other circumstances that otherwise might constitute a defense available to,
or a
discharge of, the Company or any other Grantor in respect of the First Priority
Claims or this Agreement, or any of the Second Priority Secured Parties in
respect of this Agreement.
ARTICLE
X
Miscellaneous
SECTION
10.01. Notices. Notices
and other communications provided for herein shall be in writing and shall
be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by fax, as follows:
(a) if
to the Company or any other Grantor, to it, at Gastar Exploration USA, Inc.,
0000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000,
Attention: Treasurer, (Fax No. (000) 000-0000);
(b) if
to the First Priority Agent, to Amegy Bank National Association, as Agent,
0000
Xxxx Xxx Xxxxxxx, 0xx Xxxxx,
Xxxxxxx,
Xxxxx 00000, Attention: Energy Lending Dept. (Fax No. (000) 000-0000);
and
(c) if
to the Second Priority Agent, to Xxxxx Fargo Bank, National Association, as
Agent, 0000 Xxxx Xxxxxx, 0xx Xxxxx,
Xxxxxx,
Xxxxx 00000-0000, Attention: Corporate Trust Services (Fax No. (000)
000-0000).
All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the
date
of receipt if delivered by hand or overnight courier service or sent by fax
or
on the date five Business Days after dispatch by certified or registered mail
if
mailed, in each case delivered, sent or mailed (properly addressed) to such
party as provided in this Section 10.01 or in accordance with the latest
unrevoked direction from such party given in accordance with this Section
10.01. As agreed to between the Company and any Collateral Agent from
time to time, notices and other communications may also be delivered by e-mail
to the e-mail address of a representative of the applicable Person provided
from
time to time by such Person.
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The
First
Priority Lender and the Second Priority Agent agree to use diligent efforts
to
provide each other with copies of any notices of default or acceleration or
similar notices which they give to the Borrower under the First Priority Debt
Documents and Second Priority Debt Documents respectively; provided, however,
that in the event that either of such parties fails to provide the other with
such notice, such failure shall not affect their respective obligations
hereunder or the effectiveness of any such notice.
SECTION
10.02. Conflicts. IN
THE EVENT OF ANY CONFLICT OR INCONSISTENCY BETWEEN THE PROVISIONS OF THIS
AGREEMENT AND THE PROVISIONS OF THE OTHER DEBT DOCUMENTS, THE PROVISIONS OF
THIS
AGREEMENT SHALL CONTROL.
SECTION
10.03. Effectiveness; Survival;
Termination. This Agreement shall become effective when
executed and delivered by the parties hereto. All covenants,
agreements, representations and warranties made by any party in this Agreement
shall be considered to have been relied upon by the other parties hereto and
shall survive the execution and delivery of this Agreement. The terms
of this Agreement shall survive, and shall continue in full force and effect,
in
any Insolvency or Liquidation Proceeding. The Second Priority Agent,
for itself and on behalf of the other Second Priority Secured Parties, hereby
waives any and all rights the Second Priority Secured Parties may now or
hereafter have under applicable law to revoke this Agreement or any of the
provisions of this Agreement. This Agreement shall terminate and be
of no further force and effect, (i) subject to compliance with its obligations
to take certain actions upon Discharge of the Second Priority Claims pursuant
to
Article V and Section 3.01(d), with respect to the Second Priority Agent, the
Second Priority Secured Parties and the Second Priority Claims, upon the later
of (1) the date upon which the obligations under the Second Priority Debt
Agreement terminate if there are no other Second Priority Claims outstanding
on
such date and (2) if there are other Second Priority Claims outstanding on
such
date, the date upon which such Second Priority Claims terminate and (ii) subject
to Section 7.02 and compliance with its obligations to take certain actions
upon
Discharge of the First Priority Claims pursuant to Article V, with respect
to
the First Priority Agent, the First Priority Secured Parties and the First
Priority Claims, the date of Discharge of First Priority Claims, subject to
the
rights of the First Priority Secured Parties under Section 7.04.
SECTION
10.04. Severability. In
the event any one or more of the provisions contained in this Agreement should
be held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein shall not in
any
way be affected or impaired thereby (it being understood that the invalidity
of
a particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The
parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect
of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
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SECTION
10.05. Amendments;
Waivers. (a) No failure or delay on the part of any
party hereto in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right
or
power, or any abandonment or discontinuance of steps to enforce such a right
or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the parties hereto
are cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or
consent to any departure by any party therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) of this Section 10.05,
and
then such waiver or consent shall be effective only in the specific instance
and
for the purpose for which given.
(b) Neither
this Agreement nor any provision hereof may be waived, amended or modified
except pursuant to an agreement or agreements in writing entered into by the
First Priority Agent and the Second Priority Agent; provided that no such
agreement shall amend, modify or otherwise affect the rights or obligations
of
any Grantor without such Person’s prior written consent.
SECTION
10.06. Postponement of
Subrogation. The Second Priority Agent agrees that no
payment or distribution to any First Priority Secured Party pursuant to the
provisions of this Agreement shall entitle any Second Priority Secured Party
to
exercise any rights of subrogation in respect thereof until the Discharge of
First Priority Claims shall have occurred. Following the Discharge of
First Priority Claims, each First Priority Secured Party agrees to execute
such
documents, agreements, and instruments as any Second Priority Secured Party
may
reasonably request to evidence the transfer by subrogation to any such Person
of
an interest in the First Priority Claims resulting from payments or
distributions to such First Priority Secured Party by such Person, so long
as
all costs and expenses (including all reasonable legal fees and disbursements)
incurred in connection therewith by such First Priority Secured Party are paid
by such Person upon request for payment thereof.
SECTION
10.07. Applicable Law; Jurisdiction; Consent to
Service of Process. (a) THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THAT WOULD REQUIRE THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION.
(b) Each
party hereto hereby irrevocably and unconditionally submits, for itself and
its
property, to the non-exclusive jurisdiction of any Supreme Court for New York
County, New York or in The United States District Court for the Southern
District of New York, and any appellate court from any thereof, in any action
or
proceeding arising out of or relating to this Agreement, or for recognition
or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined only in such New York court or, to the
extent permitted by law, in such Federal court. Each party hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or
in any other manner provided by law.
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(c) Each
party hereto hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now
or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement in any New York court or in any such
Federal court. Each party hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(d) Each
party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 10.01. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.
SECTION
10.08. Waiver of Jury
Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT,
BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
10.08.
SECTION
10.09. Parties in
Interest. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, as well as the other First Priority Secured Parties
and
Second Priority Secured Parties, all of whom are intended to be bound by, and
to
be third party beneficiaries of, this Agreement. No other Person
shall have or be entitled to assert rights or benefits hereunder.
SECTION
10.10. Specific
Performance. Each Collateral Agent may demand specific
performance of this Agreement and, on behalf of itself and the respective other
Secured Parties, hereby irrevocably waives any defense based on the adequacy
of
a remedy at law and any other defense that might be asserted to bar the remedy
of specific performance in any action which may be brought by the respective
Secured Parties.
SECTION
10.11. Headings. Article
and Section headings used herein and the Table of Contents hereto are for
convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION
10.12. Counterparts. This
Agreement may be executed in counterparts (and by different parties hereto
on
different counterparts), each of which shall constitute an original but all
of
which when taken together shall constitute a single contract, and shall become
effective as provided in Section 10.03. Delivery of an executed
signature page to this Agreement by facsimile transmission shall be as effective
as delivery of a manually signed counterpart of this Agreement.
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SECTION
10.13. Provisions Solely to Define Relative
Rights. The provisions of this Agreement are and are
intended solely for the purpose of defining the relative rights of the First
Priority Secured Parties, on the one hand, and the Second Priority Secured
Parties, on the other hand. None of the Company, any other Grantor,
any Guarantor or any other creditor thereof shall have any rights or
obligations, except as expressly provided in this Agreement hereunder and none
of the Company, any other Grantor or any Guarantor may rely on the terms
hereof. Nothing in this Agreement is intended to or shall impair the
obligations of the Company or any other Grantor or any Guarantor, which are
absolute and unconditional, to pay the First Priority Claims and the Second
Priority Claims as and when the same shall become due and payable in accordance
with their terms.
(Signatures
appear on following pages)
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers or other representatives as
of
the day and year first above written.
|
COMPANY:
|
||
| GASTAR EXPLORATION USA, INC., a Michigan corporation | ||
|
By:
|
/s/
XXXXXXX X. XXXXXXX
|
|
|
Xxxxxxx
X. Xxxxxxx
|
||
|
Secretary
and Treasurer
|
||
| GUARANTORS: | ||
| GASTAR EXPLORATION LTD., an Alberta, Canada corporation | ||
|
By:
|
/s/
XXXXXXX X. XXXXXXX
|
|
|
Xxxxxxx
X. Xxxxxxx
|
||
|
Vice
President and
|
||
|
Chief
Financial Officer
|
||
| GASTAR EXPLORATION NEW SOUTH WALES, INC. a Michigan corporation | ||
|
By:
|
/s/
XXXXXXX X. XXXXXXX
|
|
|
Xxxxxxx
X. Xxxxxxx
|
||
|
Secretary
and Treasurer
|
||
| GASTAR EXPLORATION VICTORIA, INC. a Michigan corporation | ||
|
By:
|
/s/
XXXXXXX X. XXXXXXX
|
|
|
Xxxxxxx
X. Xxxxxxx
|
||
|
Secretary
and Treasurer
|
||
(Signatures
continue on following pages)
-29-
| GASTAR EXPLORATION TEXAS, INC., a Michigan corporation | |||
|
By:
|
/s/
XXXXXXX X. XXXXXXX
|
||
|
Xxxxxxx
X. Xxxxxxx
|
|||
|
Secretary
and Treasurer
|
|||
| GASTAR EXPLORATION TEXAS, LLC, a Delaware limited liability company | |||
|
By:
|
/s/
XXXXXXX X. XXXXXXX
|
||
|
Xxxxxxx
X. Xxxxxxx
|
|||
|
Secretary
and Treasurer
|
|||
| GASTAR EXPLORATION TEXAS, LP, | |||
|
By:
|
GASTAR
EXPLORATION TEXAS LLC, its General Partner
|
||
|
|
By:
|
/s/ XXXXXXX X. XXXXXXX | |
|
|
Xxxxxxx X. Xxxxxxx | ||
|
|
Secretary and Treasurer | ||
(Signatures
continue on following pages)
-30-
| FIRST PRIORITY AGENT: | ||
| AMEGY BANK NATIONAL ASSOCIATION, as First Priority Agent | ||
|
By:
|
/s/
W. XXXXX XXXXXXX
|
|
|
W.
Xxxxx Xxxxxxx
|
||
|
Senior
Vice President
|
||
(Signature
continues on following page)
-31-
| SECOND PRIORITY AGENT | ||
| XXXXX FARGO BANK, NATIONAL ASSOCIATION, as Second Priority Agent | ||
|
By:
|
/s/
XXXXXXX XXXXXXXX
|
|
|
Xxxxxxx
Xxxxxxxx
|
||
|
Vice
President
|
||
-32-
Provision
for the Second Priority Debt Agreement
THIS
INDENTURE AND THE COLLATERAL AGREEMENTS ARE SUBJECT TO THE TERMS, LIMITATIONS
AND CONDITIONS SET FORTH IN THE INTERCREDITOR AGREEMENT. THE TRUSTEE,
THE COMPANY AND EACH HOLDER OF A NOTE, BY ITS ACCPETANCE THEREOF, IS DEEMED
TO
HAVE AUTHORIZED AND INSTRUCTED THE COLLATERAL AGENT TO ENTER INTO THE
INTERCREDITOR AGREEMENT ON ITS BEHALF.
Provision
for the Second Priority Security Documents
“REFERENCE
IS MADE TO THE INTERCREDITOR AGREEMENT DATED AS OF NOVEMBER 29, 2007 (AS
AMENDED, SUPPLEMENTED, RESTATED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE
“INTERCREDITOR AGREEMENT”), AMONG THE COMPANY, THE SUBSIDIARIES OF THE
COMPANY FROM TIME TO TIME PARTY THERETO, AMEGY BANK NATIONAL ASSOCIATION, AS
FIRST PRIORITY AGENT (AS DEFINED THEREIN), AND XXXXX FARGO BANK, NATIONAL
ASSOCIATION, AS SECOND PRIORITY AGENT (AS DEFINED
THEREIN). NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE LIEN
AND SECURITY INTEREST GRANTED TO THE COLLATERAL AGENT, FOR THE BENEFIT OF THE
SECURED PARTIES, PURSUANT TO THIS AGREEMENT AND THE EXERCISE OF ANY RIGHT OR
REMEDY BY THE COLLATERAL AGENT AND THE OTHER SECURED PARTIES HEREUNDER ARE
SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. IN THE
EVENT OF ANY CONFLICT OR INCONSISTENCY BETWEEN THE PROVISIONS OF THE
INTERCREDITOR AGREEMENT AND THE PROVISIONS OF THIS AGREEMENT OR THE OTHER
INDENTURE DOCUMENTS, THE PROVISIONS OF THE INTERCREDITOR AGREEMENT SHALL
CONTROL.”
-33-
