Exhibit 4.7
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COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT
AMONG
QUEST CHEROKEE, LLC,
AS BORROWER,
BLUESTEM PIPELINE, LLC,
AS GUARANTOR,
THE QUEST PLEDGORS, DEFINED HEREIN,
AND Cherokee ENERGY Partners LLC,
AS PLEDGORS,
BANK ONE, NA,
AS ADMINISTRATIVE AGENT FOR THE REVOLVER LENDERS
UNDER THE REVOLVING CREDIT AGREEMENT,
THE REVOLVER LENDERS
FROM TIME TO TIME PARTY TO THE REVOLVING CREDIT AGREEMENT,
BANK ONE, NA,
AS AGENT FOR THE TERM LENDERS
UNDER THE TERM LOAN AGREEMENT,
THE TERM LENDERS
FROM TIME TO TIME PARTY TO THE TERM LOAN AGREEMENT,
AND
BANK ONE, NA,
AS COLLATERAL AGENT
Dated: December 22, 2003
<PAGE>
COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT
THIS COLLATERAL
AGENCY AND
INTERCREDITOR
AGREEMENT, dated as of
December
22, 2003 (this "Agreement"), is made and entered into by and among QUEST
CHEROKEE, LLC, a Delaware limited liability
company (the "Borrower"), BLUESTEM
PIPELINE, LLC, a Delaware limited liability
company ("Bluestem"),
Quest Oil &
Gas Corporation, a Kansas corporation, QUEST ENERGY SERVICE, INC., a Kansas
corporation, STP CHEROKEE, INC., an
Oklahoma corporation, PONDEROSA GAS PIPELINE
COMPANY, INC., a Kansas corporation,
PRODUCERS SERVICE
INCORPORATED, a
Kansas
corporation, and J-W GAS GATHERING,
L.L.C., a Kansas
limited liability company
(the "Quest Pledgors"), Cherokee ENERGY Partners LLC, a Delaware limited
liability company ("Cherokee Partners"), Bank One, NA, a national banking
association with its main office in Chicago, Illinois ("Bank One"), in its
capacity as agent for the Revolver Lenders (as defined below) under the
Revolving Credit Agreement (as defined below) (in
such capacity, the
"Revolver
Agent"), the REVOLVER LENDERS, being the financial institutions parties as
"Banks" to the Revolving Credit Agreement (as defined below) from
time to time
(the "Revolver Lenders"), Bank One, in its capacity as agent for the Term
Lenders (as defined below) under the Term Loan
Agreement (as defined below) (in
such capacity, the "Term Agent"), the TERM LENDERS, being the financial
institutions parties as "Lenders" to the Term
Loan Agreement (as defined below)
from time to time (the "Term Lenders"),
and Bank One, as
Collateral Agent under
this Agreement (in such capacity, the
"Collateral Agent") .
WITNESSETH:
WHEREAS,
the Borrower, the Revolver Agent and the Revolver
Lenders are
parties to that certain Credit Agreement, dated as of even date herewith,
pursuant to which the Revolver Lenders have agreed to make various credit
facilities available to the Borrower in an
aggregate maximum principal amount of
up to $200,000,000 at any time outstanding
(as amended, modified,
supplemented
or restated from time to time in accordance
with this Agreement,
the "Revolving
Credit Agreement");
WHEREAS,
the Borrower,
the Term Agent and the
Term Lenders are parties to
that certain Senior Term Second Lien
Secured Credit Agreement, dated as of even
date herewith, pursuant to which the Term
Lenders have agreed to make a term
loan to the Borrower in the aggregate
principal amount of up
to $35,000,000 (as
amended, modified supplemented or restated
from time to time in accordance with
this Agreement, the "Term Loan
Agreement");
WHEREAS,
in order to secure the
payment and
performance of the
Revolver
Debt (as defined below) and the payment
and performance of the Term Debt (as
defined below), the Borrower has granted to the
Collateral Agent, as Collateral
Agent for the benefit of both the Revolver
Lenders and the Term
Lenders, liens
on and security interests in substantially
all of the Borrower's assets pursuant
to various Security Documents (as defined
below); and
WHEREAS,
in order to secure the
payment and
performance of the
Revolver
Debt (as defined below) and the payment
and performance of the Term Debt (as
defined below),
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Bluestem
has executed and delivered the Bluestem Guaranty (as defined
below) to and for the benefit of the
Lenders (as defined below); and
WHEREAS,
in order to secure the
payment and
performance of the
Revolver
Debt (as defined below) and the payment
and performance of the Term Debt (as
defined below), the Quest Pledgors have
executed and delivered the Equityholders
Pledge Agreement (as defined below) to and for the benefit of
the Lenders (as
defined below); and
WHEREAS,
in order to secure the
payment and
performance of the
Revolver
Debt (as defined below) and the payment
and performance of the Term Debt (as
defined below), Cherokee Partners has executed and delivered the Cherokee
Partners Pledge Agreement (as defined below) to and for the benefit of the
Lenders (as defined below); and
WHEREAS,
the parties hereto now wish to set forth various agreements
regarding, among other things, their relative rights in and
obligations
with
respect to (a) the Security Documents (as
defined below), (b) the Collateral (as
defined below), and (c) the Bluestem
Guaranty (as defined below).
NOW,
THEREFORE,
for good and
valuable consideration, the receipt and
sufficiency of which are hereby
acknowledged,
and incorporating the foregoing
recitals herein, the parties hereto agree
as follows.
ARTICLE 1. DEFINITIONS
1.1 Certain
Defined Terms. When used herein, the following terms shall have
the following meanings (such definitions to be equally applicable to the
singular and plural forms thereof) :
Affiliate:
shall mean, as to any
Person, any Subsidiary of such Person, or
any other Person which, directly or indirectly,
controls, is
controlled by, or
is under common control with, such Person and, with respect to any Company,
shall mean, any director, executive officer, general partner
or manager of such
Company and any Person who holds ten
percent (10%) or more
of the voting stock,
partnership interests, membership interests
or other ownership interests of such
Company. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person,
shall mean the possession, directly
or indirectly, of the power to direct or cause
the direction of the management
and policies of such Person, whether
through the ownership of voting securities,
membership interests or partnership
interests, or by contract or otherwise.
Agreement:
shall mean this
Collateral Agency and Intercreditor Agreement,
as amended, modified, supplemented and/or restated from time to time in
accordance with this Agreement.
Agreement
Obligors: shall mean the Borrower, the Companies and Cherokee
Partners, and Agreement Obligor shall mean any one of the
Agreement
Obligors,
individually and severally.
Asset Sale:
shall have the meaning specified in Section 2.4.
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Bank
One: shall have the meaning assigned to such term in the first
paragraph of this Agreement.
Bankruptcy
Code: shall mean Title
11 of the United States Code, as amended
from time to time.
Bluestem: shall have the meaning assigned to such term in the first
paragraph of this Agreement, and shall include the successors and permitted
assigns of the entity identified as such in the first paragraph of this
Agreement.
Bluestem Guaranty: shall mean that certain Guaranty
of even date herewith,
executed by Bluestem for the benefit of the
Lenders, pursuant to
which Bluestem
absolutely and unconditionally guaranteed the prompt, complete
and full payment
of the Master Debt and further guaranteed the proper and timely
performance by
the Borrower of (i) the Revolver
Debt and (ii) the Term
Debt, as such
Guaranty
may be amended, modified, supplemented and/or restated from time to time in
accordance with this Agreement.
Borrower:
shall have the meaning assigned to such term in the first
paragraph of this Agreement, and shall include the successors and permitted
assigns of the entity identified as such in the first paragraph of this
Agreement.
Business Day:
shall mean a day (other than a Saturday or a Sunday) on which
national banking associations are legally
open for business in Dallas, Texas and
Chicago, Illinois.
Cherokee
Partners: shall have the meaning assigned to such term in the
first paragraph of this Agreement, and shall include the successors and
permitted assigns of the entity identified as such in the first paragraph of
this Agreement.
Cherokee
Partners Pledge Agreement: shall mean that certain Pledge
Agreement of even date herewith from
Cherokee Partners to
the Collateral
Agent
for the benefit of the Revolver
Lenders and the Term
Lenders, securing,
inter
alia, the Master Debt.
Class of
Master Debt: shall mean the aggregate of the debt and other
obligations under or issued in connection with a Master Debt Agreement. All
loans and other obligations outstanding under the Revolving Credit Agreement
shall constitute one Class of Master
Debt, and all loans and other obligations
outstanding under the Term Loan Agreement
shall constitute one
Class of Master
Debt.
Collateral:
shall mean all property of any kind or description in which the
Collateral Agent for the benefit of the
Revolver Lenders and the Term Lenders
has, or purports to have, a Lien or other
interest under any Security Document,
including the Collateral Account Collateral and all amounts at any time on
deposit therein, and all Proceeds of
Collateral.
Collateral
Account: shall have the meaning specified in Section 4.4(a).
Collateral
Account Collateral:
shall have the meaning specified in Section
4.4(a).
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Collateral
Estate: shall mean all right, title, and interest of each
Company in the Collateral granted to the Collateral Agent by the Security
Documents and all rights of the Collateral
Agent thereunder.
Collateral
Standstill Period:
shall have the meaning
set forth in Section
6.2(a).
Collateral
Agent: shall mean Bank One in its
capacity as Collateral Agent
and any successor appointed pursuant to Section 5.5 or Section 8.9 of this
Agreement.
Collateral
Distribution:
shall mean, (a) with
respect to any
Collateral,
(i) any payment or distribution of such Collateral, and (ii) any payment or
distribution of Proceeds of such Collateral, and (b) with respect to the
Bluestem Guaranty, any payment or distribution by
Bluestem of cash,
securities
or other property, whether direct, effected by
set-off or otherwise, on account
of the Bluestem Guaranty.
Companies:
shall mean (a) the
Borrower, (b)
Bluestem, (c) all present and
future Subsidiaries of the Borrower and (d) the Quest
Pledgors; and Company
shall mean any one of the Companies.
Distribution
Date: shall mean each
date for the distribution of amounts on
deposit in the Collateral Account.
Dollars
and the symbol
"$": shall mean the lawful money of the United
States of America.
Effective Date:
shall mean the date of this Agreement.
Enforcement
Action: shall mean any action by the Term Lenders to: (i)
foreclose or otherwise enforce any Lien now or hereafter
existing in favor
of
the Collateral Agent for the benefit of the Term Lenders in any of the
Collateral pursuant to any of the Security
Documents,
(ii) exercise as
against
any of the Collateral any other rights or remedies the Term Lenders may have
under the Term Documents, the UCC or any other applicable law with respect to
the Collateral pursuant to any of the Security
Documents,
or (iii) issue any
written instruction, direction, request or objection pursuant to Article 4,
provided however, that, notwithstanding anything to the contrary herein,
the
issuance of an Enforcement Notice by or on behalf of the Term
Lenders shall not
constitute an Enforcement Action.
Enforcement
Notice: shall mean a written notice which states that a
Significant Term Default has occurred and that the Term Lenders desire to
commence an Enforcement Action as a
consequence thereof.
Equityholders
Pledge Agreement: shall mean that certain Pledge Agreement of
even date herewith from the Quest Pledgors to the Collateral Agent for the
benefit of the Revolver Lenders and the
Term Lenders,
securing, inter alia, the
Revolver Debt and the Term Debt.
Event of
Default: shall mean any "Event of Default," as defined in the
Revolving Credit Agreement, and/or any "Default," as defined
in the Term Loan
Agreement.
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Hedging
Obligations:
shall
mean, with respect to any Person, the
obligations of such Person with respect to
Hedging Transactions.
Hedging
Transaction:
shall mean any
transaction
(including an
agreement
with respect thereto) now existing or
hereafter entered into
by any one or more
of the Companies which is a rate swap, basis swap, forward rate transaction,
commodity swap, commodity option,
equity or equity index
swap, equity or equity
index option, bond option, interest rate option, forward exchange transaction,
cap transaction, floor transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency
rate swap transaction, currency option
or any other similar transaction (including any option with respect to any
of
these transactions) or any combination
thereof, whether linked to one or more
interest rates, foreign currencies, commodity prices, equity prices or other
financial measures.
Lenders:
shall mean the
Revolver Lenders and
the Term Lenders, and
their
respective successors and assignees.
Letters of
Credit: shall
mean letters of credit (as defined in the UCC)
issued under the Revolving Credit
Agreement.
Lien: shall mean
any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or
other), or preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including any conditional sale or
other title retention
agreement,
any capital lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing
statement under the UCC or comparable
law of any jurisdiction in respect of any
of the foregoing) .
Master Debt:
shall mean, collectively, the Revolver Debt and the Term Debt.
Master Debt
Agreements:
shall mean the
Revolving Credit Agreement and the
Term Loan Agreement.
Master
Debt Documents: shall mean the Revolver Documents and the Term
Documents.
Master Debt
Outstanding:
shall mean,
at any date of
determination,
the
total outstanding amount of all Master Debt; provided, however, that, for
purposes of determining the amount of all Revolver
Hedging Obligations as of
such date, Master Debt Outstanding shall only include the Revolver Hedging
Liabilities.
Master Debt
Guaranty: shall mean,
individually and
collectively, (a)
the
Bluestem Guaranty, and (b) each other and additional guarantee at any time
executed by any Person for the benefit of the Lenders (or any of
them) for the
purpose of guaranteeing the payment of the Master Debt and
the performance by
the Borrower of (i) the "Obligations," as defined in the Revolving Credit
Agreement, and (ii) the "Obligations," as
defined in the Term Loan Agreement.
Moody's: shall
mean Moody's Investors Services, Inc.
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Notice of Event
of Default: shall mean a written certification delivered in
accordance with Section 4.2(b) hereof
certifying
that an Event of
Default has
occurred and is continuing.
Paid in Full:
shall mean,
with respect to the
Revolver Debt,
payment in
full in cash of such Revolver Debt and the
termination of all commitments of the
Revolver Lenders to lend or otherwise
extend credit pursuant to the Revolver
Documents.
Permitted
Investment:
shall mean investments
in (a) direct obligations of
the United States, or any Person for which
investments
are guaranteed by
the
full faith and credit of the United
States, maturing in twelve months or less
from the date of acquisition thereof,
including repurchase agreements entered
into with banks or trust companies described in clause (c) below
having a term
of less than one year and fully collateralized by such obligations; (b)
commercial paper and bankers' acceptances
maturing in twelve months or less from
the date of issuance and which, at the time of acquisition, are rated A-2 or
better by S&P and P-2 or better by
Moody's; (c) time deposits or certificates of
deposit maturing within one year from the date such investment is made and
issued by a bank or trust company or any
branch of any Lender, which bank, trust
company or branch is organized under the laws of the United
States or any state
thereof, having capital, surplus, and undivided profits aggregating at least
$250,000,000 and whose long-term certificates of deposit are, at the time of
acquisition thereof, rated A-2 by S&P or P2 by
Moody's; and (d) investments in
money market funds which invest solely in
the types of investments described in
paragraphs (a) through (c) above.
Person:
shall mean a
corporation,
business trust, joint stock company,
trust, joint venture, association, partnership, limited liability company,
organization, business, individual,
government or political subdivision thereof,
governmental agency, or other entity of
whatever nature.
Potential
Default: shall mean any event which with notice or lapse of
time,
or both, would become an Event of
Default.
Proceeding:
shall mean any voluntary or involuntary (a) insolvency,
bankruptcy, receivership, custodianship,
liquidation, reorganization,
readjustment, composition or any other similar proceeding relating to the
Borrower or any of its properties, whether
under any bankruptcy,
reorganization
or insolvency law or laws, federal or state, or any law, federal or state,
relating to relief of debtors, readjustment of indebtedness, reorganization,
composition or extension, (b) proceeding for any liquidation, liquidating
distribution, dissolution or other winding up of
the Borrower or appointment of
a custodian, receiver, trustee or other officer
with similar powers, whether or
not involving insolvency or bankruptcy
proceedings,
(c) general assignment
for
the benefit of creditors of the Borrower or
(d) other marshaling
of the assets
of the Borrower.
Proceeds:
shall mean all "proceeds" as such term is defined in Section
9-102 of the UCC and all present and future
proceeds of any Collateral, whether
arising from the collection, sale, lease, exchange,
assignment,
licensing, or
other disposition of or other realization upon any Collateral,
the proceeds of
any casualty or condemnation of any
Collateral (including
proceeds of
property
insurance and condemnation awards), all
claims of the Borrower or any of its
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Subsidiaries against third parties for
impairment, loss,
damage, or impairment
of the value of any Collateral, and all rights of the Borrower or any of its
Subsidiaries under any insurance,
indemnity, warranty, or guaranty of or for any
of the foregoing, whether such proceeds are represented as money, deposit
accounts, accounts, general intangibles,
securities,
instruments,
documents,
chattel paper, inventory, equipment, fixtures, goods, or otherwise, and all
proceeds of such proceeds.
Quest Pledgors:
shall have the meaning
assigned to such term
in the first
paragraph of this Agreement, and shall include the respective successors and
permitted assigns of each of the entities identified as such in the first
paragraph of this Agreement; Quest Pledgor shall mean any one of the Quest
Pledgors.
Refinancing:
shall mean any
renewal or
extension of any Class of Master
Debt and any refinancing, replacement or
substitution in whole or in part of the
Master Debt of any Class of Master
Debt, including any number of subsequent
refinancings, replacements or substitutions
of any prior Refinancings.
Refinancing
Lender: shall mean any Person which
provides a Refinancing to
the Borrower.
Reimbursement
Obligations:
shall mean,
at any time,
that portion of
the
Revolver Debt attributable to the obligations of the Borrower under the
Revolving Credit Agreement in respect of the
Letters of Credit then outstanding
under the Revolving Credit Agreement to reimburse
amounts paid by any
Revolver
Lender (whether in such capacity or in its
capacity as "Letter of Credit Issuer"
under the Revolving Credit Agreement) in respect of any drawing or drawings
under a Letter of Credit.
Release
Consent: shall mean, in connection with any Release Notice, a
written consent or consents, executed by the Revolver Agent and by the Term
Agent, expressly consenting to the release of the
specific items of Collateral
specified in such Release Notice from the Liens held by the
Collateral
Agent
pursuant to the Security Documents, in form and substance satisfactory to the
Collateral Agent in its sole
discretion.
Release
Notice: shall mean a written notice, signed by a Responsible
Officer of the Borrower, which requests the release of the
specific items of
Collateral specified in such notice from the
Liens held by the Collateral Agent
pursuant to the Security Documents,
and which certifies to
the Collateral Agent
that such Collateral is properly
permitted to be
disposed of by a Company in a
transaction contemplated and permitted
under each Master Debt Agreement and that
the Borrower and/or such Company, as the case may be, is entitled
under the
terms of the Master Debt Agreements to have such
specific items of Collateral
released from such Liens in connection with
consummation of such transaction.
Required
Majority: shall mean
the Required
Percentage of each (or, if the
context requires, any) Class of Master Debt
then outstanding.
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Required
Percentage:
shall mean, with
respect to any Class of Master Debt
and with respect to any determination in question,
the percentage or
number of
the holder or holders of such Class of Master Debt required to make such
determination under the terms of the Master
Debt Agreement under which such
Class of Master Debt was issued; provided, however, that (a) if no such
percentage or number is specified under the
terms of such Master Debt Agreement,
then, (i) if there be more than two such
holders, the holder or holders of at
least sixty-six and two-thirds percent (66 2/3%) of the Master
Debt Outstanding
with respect to such Class of Master
Debt, or (ii) if there be less than
three
such holders, all such holders of the Master
Debt Outstanding
with respect to
such Class of Master Debt, and (b) Hedging
Obligations shall not
be included in
the determination of such percentage for
any purpose.
Responsible
Officer: shall mean the chief executive
officer, president,
executive vice president, chief financial officer,
treasurer,
or secretary of
the Borrower.
Restricted
Subsidiary: shall have
the meaning assigned to such term in the
Revolving Credit Agreement.
Revolver
Agent: shall mean the Person at the time
in question serving
in
the capacity of "Administrative Agent" under the Revolving
Credit Agreement,
and, from and after any Refinancing of the
Revolver Debt, any agent, trustee or
other representative of the Refinancing
Lenders effecting such Refinancing, or,
in the event there is no Person serving in
any such capacity,
such Refinancing
Lenders.
Revolver Debt:
shall mean the
"Obligations,"
as defined in the
Revolving
Credit Agreement, and all principal
indebtedness for loans now or hereafter made
under any credit agreement for a Refinancing
of such Revolver Debt
(provided,
however, that, although there can be
Refinancings of Revolver Debt and successor
credit agreements for such Refinancings, there must be only one credit
agreement, loan agreement or indenture in effect at any one time for the
principal indebtedness included within the
Revolver Debt) .
Revolver
Documents: shall mean the Revolving Credit Agreement, the
Revolver
Notes, the Security Documents, the Master Debt Guaranty, and all other
agreements, documents and instruments
executed from time to
time in connection
therewith, as the same may be amended,
supplemented or
otherwise modified from
time to time.
Revolver Hedging
Liabilities: shall
mean, as of any date of determination,
the sum of, if greater than zero, (i) with respect to each Revolver Hedging
Obligation that is terminated and
unsatisfied as of such
date, (A) zero or (B)
the actual liability of Borrower and its Subsidiaries as of such date as a
result of the early termination of such
Revolver Hedging Obligation whichever is
greater, minus (ii) the actual liability, if any, of any Revolver Lender
Counterparty to the Borrower and its
Subsidiaries
with respect to any
Revolver
Hedging Obligations that are terminated and
unsatisfied as of such date.
Revolver Hedging
Obligation: shall mean
any Hedging Obligation owed by any
Company to any Revolver
----------------------------- Lender Counterparty.
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Revolver
Lender Counterparty: shall mean each Revolver Lender or any
Affiliate of a Revolver Lender counterparty
to a Hedging Transaction.
Revolver
Lenders: shall have the meaning assigned to such term in the
first
paragraph of this Agreement, and shall include (a) each Person at the
time in
question party as a "Bank" under the
Revolving Credit
Agreement,
and (b) each
Refinancing Lender with respect to a
Refinancing of the Revolver Debt.
Revolver Notes:
shall mean those
certain promissory
notes issued pursuant
to the Revolving Credit Agreement, as amended, modified, supplemented or
restated from time to time in accordance
with this Agreement.
Revolving Credit
Agreement: shall have the meaning assigned to such term in
the first recital of this Agreement, and shall include any credit agreement,
loan agreement or indenture
setting forth the
terms of any
Refinancing of the
Revolver Debt (provided, however, that, although there can be Refinancings
of
Revolver Debt and successor credit
agreements for such Refinancings, there must
be only one credit agreement, loan agreement or indenture in
effect at any one
time for the principal indebtedness
included within the Revolver Debt) .
Secured
Obligations:
shall mean (a) all
Master Debt, and (b)
all amounts
payable by any Company to the Collateral
Agent under the Security Documents.
Security
Documents:
shall mean this Agreement and all deeds of trust,
mortgages, security agreements, pledge agreements, financing statements,
pledges, documents, and other instruments
listed on Schedule 1 attached hereto,
and all future deeds of trust, mortgages, security agreements, pledge
agreements, financing statements, pledges,
documents, and other instruments made
by any Company in favor of the
Collateral
Agent for the
purposes of
granting
Liens on property included or to be included in the
Collateral Estate to secure
the payment and performance of the Master Debt, in each case as amended,
modified, supplemented or restated from
time to time.
Significant
Term Default: shall mean any Term Default (a)
arising under
Section 8.2 of the Term Loan Agreement or (b) arising
under Section 8.3 of
the
Term Loan Agreement by reason of the
Borrower's
failure to comply with
Section
7.22 of the Term Loan Agreement, in each case as Sections 7.22, 8.2
and 8.3 of
the Term Loan Agreement are in effect on
the Effective Date,
Stated Maturity
Date: shall mean December ___, 2008.
Subsidiary:
shall mean,
with respect to any
specified Person,
any other
Person of which, at the time of
determination, such
specified Person,
directly
and/or indirectly through one or more other Persons,
owns more than 50% of
the
voting interests. Unless otherwise qualified,
all references to a
"Subsidiary"
or to "Subsidiaries" in this Agreement shall refer to a Subsidiary or
Subsidiaries of the Borrower.
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S&P:
shall mean
Standard & Poor's
Ratings Services, a division of the
McGraw Hill Companies, Inc.
Term Agent:
shall mean the Person
at the time in
question serving in
the
capacity of "Agent" under the Term Loan Agreement, and, from and after any
Refinancing of the Term Debt, any agent,
trustee or other
representative of the
Refinancing Lenders effecting such Refinancing, or, in the event there is no
Person serving in any such capacity, such
Refinancing Lenders.
Term
Debt: shall mean the "Obligations," as defined in the Term Loan
Agreement, and all principal indebtedness for
loans now or hereafter made under
any credit agreement for a Refinancing
of such Term Debt
(provided,
however,
that, although there can be Refinancings of Term Debt and successor credit
agreements for such Refinancings,
there must be only one
credit agreement, loan
agreement or indenture in effect at any one
time for the principal
indebtedness
included within the Term Debt) .
Term
Default: shall mean a "Default," as defined in the Term Loan
Agreement.
Term Documents:
shall mean, collectively, the Term Loan Agreement, the Term
Notes, if any, the Security Documents, the Master Debt Guaranty, and all
instruments, documents, certificates contemplated by or
executed in connection
with any of them.
Term
Lenders: shall have the meaning assigned to such term in the
first
paragraph of this Agreement, and shall include (a) each Person at the
time in
question party as a "Lender" under the Term Loan Agreement, and (b) each
Refinancing Lender with respect to a
Refinancing of the Term Debt.
Term Loan
Agreement:
shall have the meaning
assigned to such term
in the
second recital of this Agreement,
and shall include any
credit agreement,
loan
agreement or indenture setting forth the terms of any
Refinancing
of the Term
Debt (provided, however, that, although there can be
Refinancings of Term Debt
and successor credit agreements for such Refinancings, there must be only one
credit agreement, loan agreement or indenture in
effect at any one time for the
principal indebtedness included within the
Term Debt) .
Term Notes:
shall mean those
certain promissory notes, if any, issued
pursuant to the Term Loan Agreement, as amended, modified, supplemented or
restated from time to time in accordance
with this Agreement.
UCC: shall mean
the Uniform Commercial
Code as in effect from time to time
in the State of Texas; provided, however, that if, by reason of mandatory
provisions of law, the perfection or the
effect of perfection or non-perfection
of any Lien in any Collateral is governed
by the Uniform
Commercial Code as
in
effect in a jurisdiction other than the State of Texas,
"UCC" shall mean the
Uniform Commercial Code as in effect in
such other jurisdiction for purposes of
the provisions hereof relating to such
perfection or the effect of perfection or
non-perfection.
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Withdrawal
Notice: shall have the meaning specified in Section 4.2(c)
hereof.
ARTICLE 2. COLLATERAL
AGENCY
2.1 Creation of
Collateral
Agency. In order to provide for the
creation,
perfection and maintenance of all Liens
granted under Security Documents and for
the enforcement of the various rights and remedies set forth in the
Security
Documents, and to set forth the relative rights of the Lenders with regard
to
the Collateral and the Bluestem Guaranty as
set forth herein, the Lenders hereby
appoint Bank One as the Collateral Agent under this Agreement and the other
Security Documents, and the Collateral Agent hereby accepts its appointment
subject to the terms and conditions of this Agreement and the Security
Documents. Each Company hereby reaffirms and confirms the grant of the
Collateral Estate in favor of the Collateral
Agent in accordance with the terms
of the Security Documents and for the benefit of the Lenders as set forth
therein and herein.
2.2 Possession and Use of Collateral. So long as no Event of Default
exists, each Company shall have the right to remain in
possession
and retain
control of the Collateral (other than any Collateral for which applicable law
requires that Liens on such Collateral be
perfected by control or possession) in
accordance with, and to the extent permitted by, the terms of the
Master Debt
Agreements and the terms of the Security
Documents.
2.3 Addition of
Collateral
to the Collateral Estate. At any time, any
Company and the Collateral Agent may, without necessity of consent from the
Revolver Agent, the Term Agent or any of the
Lenders, enter into one or more
Security Documents, in form reasonably
satisfactory to the Collateral Agent: (a)
to supplement or add to the covenants of such Company for the benefit of
all
Lenders or to surrender any right or power
conferred upon any one or more of the
Companies; (b) to mortgage or pledge to the Collateral Agent, or grant a
security interest in favor of the
Collateral Agent in, any property or assets as
additional security for the Secured
Obligations;
or (c) to cure any
ambiguity,
to correct or supplement any provision
herein or in any Security Document which
may be defective or inconsistent with any
other provision herein or therein, or
to make any other provision with respect to matters or questions arising
hereunder which shall not be inconsistent with any provision hereof. The
Collateral Agent, the Revolver Agent, the
Term Agent and the Lenders agree that
the forms of Security Documents being executed and
delivered concurrently
with
(and dated of even date with) this
Agreement are
satisfactory to such
parties.
The Borrower will deliver or cause to be
delivered to the Collateral Agent,
promptly upon the execution and delivery
thereof, executed
counterparts of
all
Security Documents and all amendments and
supplements thereto.
The Collateral
Agent shall keep all Security Documents held by it at the principal office
maintained by it in Dallas, Texas, or, if none is there maintained, at its
primary address for notice under this
Agreement,
shall provide copies
of such
Security Documents to the Lenders within a
reasonable time after its receipt of
a written request therefor, and permit any Lender or the
representative thereof
to inspect the same at such office during
normal business hours
upon reasonable
prior notice.
2.4 Releases of Collateral. In connection with the proposed sale,
assignment, transfer, or other disposition of
any Collateral by any Company (an
"Asset Sale"), the Borrower, on behalf of
such selling Company,
shall deliver a
Release Notice to the Collateral
Agent, the Revolver Agent and the Term
Agent.
If (a) the Collateral Agent receives a
Release Consent relative to such Release
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<PAGE>
Notice within fifteen (15) Business Days after, the delivery of such Release
Notice, or (b) within fifteen (15) Business Days after the delivery of
such
Release Notice, the Collateral Agent shall
not have received a written objection
from either the Revolver Agent or the Term Agent stating that the selling
Borrower is not entitled under the terms of the Revolving
Credit Agreement or
the Term Loan Agreement, as the case may be, to obtain the release of the
Collateral specified in the Release Notice, then, in either event, the
Collateral Agent shall provide for the
release of the Liens with respect to such
Collateral to the extent requested by the Borrower in the Release Notice,
provided, however, that the effective delivery of any releases provided
under
this Section 2.4 shall be expressly
conditioned
upon the consummation of the
Asset Sale to which the Release
Notice relates. If, however, the Collateral
Agent receives a timely written objection from the Revolver Agent
or the Term
Agent, the Collateral Agent may not release the Liens with respect to such
Collateral, and the Collateral Agent may
not take any actions requested of it by
the Borrower until such objection
shall be withdrawn in
writing by the Revolver
Agent or the Term Agent, as the case may be, or until five
(5) Business
Days
after the Collateral Agent shall have received an order
of a court of competent
jurisdiction, which shall be final and no
longer subject to appeal, directing it
to release the Liens of the Collateral Agent with respect to such
Collateral;
provided, however, that, notwithstanding the foregoing,
such selling
Company
shall not be entitled to such release, and
the Collateral Agent shall not effect
such release, without the prior written consent
of the Revolver Agent, the Term
Agent and the Required Percentage of each Class of Master
Debt then outstanding
if, at the time such release would otherwise be effected by the Collateral
Agent, the Collateral Agent is in receipt of a Notice of Event of Default
(whether given prior to or after the
delivery by the
Borrower or such
selling
Company of the Release Notice to which such release is related) for which no
Withdrawal Notice withdrawing the same has been received by the Collateral
Agent. Upon consummation of the Asset Sale for which a release of Liens is
granted hereunder, (i) all cash Proceeds received by or owing to any
Company
from the sale of such released Collateral shall be immediately turned over to
the Collateral Agent, together with any
necessary endorsements or instruments of
assignment or transfer, for deposit in the Collateral
Account and
distribution
in accordance with the provisions of Section 4.4
hereof, and (ii) all
non-cash
Proceeds received by or owing to any Company from the sale of such released
Collateral shall be immediately
pledged to the
Collateral Agent for the benefit
of the Lenders pursuant to an appropriate
Security Document
(and, to the extent
constituting instruments, securities or
other property as to which perfection of
the Collateral Agent's Lien thereon is
established by possession pursuant to the
UCC, turned over to the Collateral Agent, together with any necessary
endorsements or instruments of assignment
or transfer) to be held as part of the
Collateral Estate hereunder as additional
Collateral hereunder.
Notwithstanding
anything to the contrary contained herein,
during the existence
of any Event of
Default or Borrowing Base Deficiency (in each case as
defined in the Revolving
Credit Agreement), the Collateral Agent will (and the
Term Agent and each Term
Lender hereby irrevocably authorizes the Collateral Agent to), to the extent
requested by the Revolver Agent,
release or otherwise
terminate (pursuant to an
instrument or instruments in form and substance acceptable to the Revolver
Agent) the Liens securing the Term Debt with respect to any Collateral
encumbered by such Liens to the extent
such Collateral is the subject of an
Asset Sale (to an unaffiliated third party in good faith in an arms length
transaction for cash proceeds in an amount proposed by Revolver Agent and
consented to by the Required Percentage of
the Term Lenders, such consent not to
be unreasonably withheld or delayed) and the
proceeds thereof
applied to the
repayment of the Revolver Debt. Any covenant or other restriction in the Term
Loan Agreement that is inconsistent with
the provisions of the
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<PAGE>
preceding sentence is hereby waived to the extent of such
inconsistency
such
that the provisions of the preceding
sentence shall prevail
in the event of any
conflict with the provisions of the Term
Loan Agreement.
Subject to the receipt
of reasonable prior notice by the
Collateral Agent, such releases, terminations
and other instruments and agreements shall be delivered substantially
contemporaneous with such sale or
disposition.
2.5 Obligations
Absolute.
(a) No Security
Document, and no Master Debt Guaranty, may in any
event be revoked by any Company. Each Company agrees that such Company's
obligations and the obligations of such Company's Subsidiaries under the
Security Documents and each Master Debt Guaranty shall not be released,
diminished, or impaired by, and waives, to the fullest extent permitted by
applicable law, any rights which such Company
might otherwise have which relate
to:
(i) Any lack of
validity or enforceability of any of the Secured
Obligations,
any Security Document,
any Master Debt Guaranty, or any other
agreement
or instrument relating thereto; any increase, reduction,
extension,
or rearrangement of any of the Secured Obligations; any
amendment,
supplement,
or other modification of any of the Security
Documents
or any Master
Debt Guaranty; any release, waiver or consent
granted under
any of the Security Documents or any Master Debt Guaranty; or
any sale,
assignment,
delegation, or other
transfer of any of the Secured
Obligations
and/or any of the Security Documents or any Master Debt
Guaranty;
(ii) Any grant of any
security or support for any of the Secured
Obligations
or any impairment of any security or support for any of
the
Secured
Obligations,
including any full or partial release, exchange,
subordination,
or waste of any collateral for any of the Secured
Obligations
or any full or
partial release of any Company or any other
Person
liable for the payment or performance of any of the Secured
Obligations;
any change in the
organization or structure of any Company or
any other
Person liable for the payment or performance of any of the
Secured
Obligations;
or the insolvency, bankruptcy, liquidation, or
dissolution
of any Company or any
other Person
liable for the payment
or
performance of
any of the Secured Obligations;
(iii) The manner of applying payments on any of the Secured
Obligations
or the proceeds of any security or support for any of the
Secured
Obligations against any of the Secured Obligations;
(iv) The failure to give notice of the occurrence of any of
the events or actions referred to in this Section 2.5, notice of any
Potential
Default or Event of Default, notice of intent to demand,
notice
of demand,
notice of presentment for payment, notice of nonpayment,
notice
of intent to protest, notice of protest, notice of grace, notice of
dishonor, notice
of intent to accelerate, notice of acceleration, notice of
bringing
of action to enforce
the payment or performance of any of the
Secured
Obligations,
notice of any sale or
foreclosure of any
collateral
for any of the
Secured Obligations,
notice of any
transfer of any of
the
Secured
Obligations, notice of the financial condition of or other
14
<PAGE>
circumstances
regarding the Borrower, any other Company, or any other
Person
liable for any of the
Secured Obligations,
or any other notice
of
any kind
relating to any of the Secured Obligations; or
(v) Any other action taken or omitted which affects any of
the Secured Obligations or any of the Collateral, whether or not such
action or
omission prejudices
any Company or increases the likelihood that
any Company will be required to pay or support payment of the Secured
Obligations
pursuant to the terms hereof, of any of the Master Debt
Guaranty, or of
any of the Security Documents.
(b) The Master Debt
Guaranty and each of the Security Documents shall
continue to be
effective or be reinstated if any payment on the Secured
Obligations must
be refunded for any reason, including as a result of or by
reason of any
Proceeding. In the
event that the Collateral Agent or any of
the Lenders must refund any payment received against the Secured
Obligations,
any prior release from the terms of this
Agreement or the
other Security
Documents given to any Company by the
Collateral Agent
in
connection with
such payment shall be without effect, and all such Security
Documents shall
be reinstated in full force and effect as to the Collateral
subject to such
release.
ARTICLE 3. MASTER DEBT
3.1 Modification of Master Debt.
(a) The Borrower, the
Revolver Agent, and
the Revolver
Lenders
agree that without the prior written
consent of the Term
Agent and the Required
Percentage of the Term Lenders they will
not renew, extend,
modify or amend the
Revolving Credit Agreement or any of the
instruments or documents relating to
the Revolver Debt to (i) increase the maximum principal amount of the
commitments under the Revolving Credit Agreement to an amount in excess of
$200,000,000, or (ii) increase the applicable margin with respect to the
interest rate on any of the Revolver Debt by more than 2.00% per annum
(excluding any increase resulting from the imposition of any default rate
of
interest in accordance with the terms of
the Revolver Documents) .
(b) The Borrower, the Term Agent, and the Term Lenders agree
that
without the prior written consent of the Revolver Agent and the Required
Percentage of the Revolver Lenders they
will not renew, extend, modify or amend
the Term Loan Agreement or any of the
instruments or
documents relating to
the
Term Debt to (i) increase the maximum principal amount of the Term Debt to an
amount in excess of $35,000,000
