Exhibit 10.6 

  

Execution Version

  

 

 

INTERCREDITOR AGREEMENT

 

dated as of April 8, 2015 among

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Priority Lien Agent,

 

U.S. BANK NATIONAL ASSOCIATION,
as Second Lien Collateral Trustee,

 

BREITBURN ENERGY PARTNERS LP, BREITBURN FINANCE CORPORATION, and
BREITBURN OPERATING LP

 

and

 

the Subsidiaries of Breitburn Energy Partners LP named herein

 

 

 

THIS IS THE INTERCREDITOR AGREEMENT REFERRED TO IN (A) THE INDENTURE DATED AS OF
APRIL 8, 2015, AS AMENDED, AMENDED AND RESTATED, SUPPLEMENTED OR OTHERWISE
MODIFIED FROM TIME TO TIME AMONG BREITBURN ENERGY PARTNERS LP, BREITBURN FINANCE
CORPORATION AND BREITBURN OPERATING LP, AS ISSUERS, CERTAIN SUBSIDIARIES OF
BREITBURN ENERGY PARTNERS LP FROM TIME TO TIME PARTY THERETO AND U.S. BANK
NATIONAL ASSOCIATION, AS TRUSTEE AND COLLATERAL AGENT, (B) THE THIRD AMENDED AND
RESTATED CREDIT AGREEMENT DATED AS OF NOVEMBER 19, 2014, AS AMENDED,
SUPPLEMENTED, RESTATED OR OTHERWISE MODIFIED FROM TIME TO TIME, AMONG BREITBURN
OPERATING LP, AS BORROWER, BREITBURN ENERGY PARTNERS LP, AS PARENT GUARANTOR,
THE LENDERS PARTY THERETO FROM TIME TO TIME AND WELLS FARGO BANK, NATIONAL
ASSOCIATION, AS ADMINISTRATIVE AGENT, (C) THE OTHER LOAN DOCUMENTS REFERRED TO
IN SUCH CREDIT AGREEMENT AND (D) THE OTHER NOTE DOCUMENTS REFERRED TO IN SUCH
INDENTURE.

 

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INTERCREDITOR AGREEMENT, dated as of April 8, 2015 (as amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof, this
“Agreement”), among WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative
agent for the Priority Lien Secured Parties referred to herein (in such
capacity, and together with its successors in such capacity, the “Original
Priority Lien Agent”), U.S. BANK NATIONAL ASSOCIATION, as trustee and collateral
agent for the Second Lien Secured Parties referred to herein (in such capacity,
and together with its successors in such capacity, the “Original Second Lien
Collateral Trustee”), BREITBURN ENERGY PARTNERS LP, a Delaware limited
partnership (“Parent Company”), BREITBURN FINANCE CORPORATION, a Delaware
corporation and a wholly owned subsidiary of the Parent Company (“Finance Corp”
and together with the Parent Company, the “Issuers”), BREITBURN OPERATING LP, a
Delaware limited partnership and a wholly owned subsidiary of the Parent Company
(the “Borrower”) and the other direct and indirect subsidiaries of the Parent
Company listed on the signature pages hereof or otherwise party hereto from time
to time.

 

Reference is made to (a) the Priority Credit Agreement (defined below), and (b)
the Indenture (defined below) governing the Indenture Notes (defined below).

 

From time to time following the date hereof, the Parent Company may incur
Additional Second Lien Obligations (defined below) to the extent permitted by
the Priority Credit Agreement and the Indenture (each as defined below). In
connection with the Indenture and any Additional Second Lien Obligations, the
Grantors (defined below), the Trustee (defined below) and the Second Lien
Collateral Trustee shall enter into a second lien collateral trust agreement or
similar intercreditor arrangement as may be agreed to by the Trustee, Second
Lien Collateral Trustee and any trustee, agent or other secured parties with
respect to such Additional Second Lien Obligations from time to time.

 

In consideration of the mutual agreements herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Priority Lien Agent (for itself and on behalf of the Priority
Lien Secured Parties), the Second Lien Collateral Trustee (for itself and on
behalf of the Second Lien Secured Parties) and the Grantors hereto agree as
follows:

 

Article I
DEFINITIONS

 

SECTION 1.01.         Construction; Certain Defined Terms.

 

(a)          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, (i) any reference herein to any agreement, instrument, other
document, statute or regulation shall, unless otherwise expressly noted herein,
be construed as referring to such agreement, instrument, other document, statute
or regulation as amended, restated, amended and restated, adjusted, waived,
renewed, extended, supplemented, replaced, refinanced or otherwise modified from
time to time, (ii) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, but shall not be deemed to include
the subsidiaries of such Person unless express reference is made to such
subsidiaries, (iii) 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, (iv) all references herein to
Articles, Sections and Annexes shall be construed to refer to Articles, Sections
and Annexes of this Agreement, (v) unless otherwise expressly qualified herein,
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 and (vi)
the term “or” is not exclusive.

 

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(b)          All terms used in this Agreement that are defined in Article 1, 8
or 9 of the New York UCC (whether capitalized herein or not) and not otherwise
defined herein have the meanings assigned to them in Article 1, 8 or 9 of the
New York UCC. If a term is defined in Article 9 of the New York UCC and another
Article of the New York UCC, such term shall have the meaning assigned to it in
Article 9 of the New York UCC.

 

(c)          Unless otherwise set forth herein, all references herein to the
Second Lien Collateral Trustee shall be deemed to refer to the Second Lien
Collateral Trustee in its capacity as collateral trustee under the Second Lien
Documents.

 

(d)          As used in this Agreement, the following terms have the meanings
specified below:

 

“Accepting Holder” has the meaning assigned to such term in Section 3.06(c).

 

“Account” means a deposit account or securities account, as each such term is
defined in Article 9 of the Uniform Commercial Code as in effect in the State of
New York.

 

“Additional Second Lien Debt Facility” means one or more debt facilities,
commercial paper facilities or indentures for which the requirements of Section
4.04(b) of this Agreement have been satisfied, in each case with banks, other
lenders or trustees, providing for revolving credit loans, term loans, notes or
other borrowings, in each case, as amended, restated, modified, renewed,
refunded, restated, restructured, increased, supplemented, replaced or
refinanced in whole or in part from time to time in accordance with each
applicable Secured Debt Document; provided that neither the Indenture nor any
Second Lien Substitute Facility shall constitute an Additional Second Lien Debt
Facility at any time.

 

“Additional Second Lien Documents” means the Additional Second Lien Debt
Facility and the Additional Second Lien Security Documents.

 

“Additional Second Lien Obligations” means, with respect to any Grantor, any
obligations of such Grantor owed to any Additional Second Lien Secured Party (or
any of its Affiliates) in respect of the Additional Second Lien Documents.

 

“Additional Second Lien Secured Parties” means, at any time, the Second Lien
Collateral Trustee, the trustee, agent or other representative of the holders of
any Series of Second Lien Debt who maintains the transfer register for such
Series of Second Lien Debt, the beneficiaries of each indemnification obligation
undertaken by any Grantor under any Additional Second Lien Document and each
other holder of, or obligee in respect of, any holder or lender pursuant to any
Series of Second Lien Debt outstanding at such time; provided that the Indenture
Second Lien Secured Parties shall not be deemed Additional Second Lien Secured
Parties.

 

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“Additional Second Lien Security Documents” means the Additional Second Lien
Debt Facility (insofar as the same grants a Lien on the Collateral) and any
other security agreements, pledge agreements, collateral assignments, mortgages,
deeds of trust, collateral agency agreements, control agreements, or grants or
transfers for security, now existing or entered into after the date hereof,
executed and delivered by the Parent Company or any other Grantor creating (or
purporting to create) a Lien upon the Second Lien Collateral in favor of the
Additional Second Lien Secured Parties.

 

“Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, “control,”
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person will be deemed to be control. For purposes of this
definition, the terms “controlling,” “controlled by” and “under common control
with” have correlative meanings.

 

“Banking Services” means each and any of the following bank services provided to
any Grantor by any lender under the Priority Credit Agreement or any Affiliate
of any such lender: (a) commercial credit cards, (b) stored value cards and (c)
Treasury Management Arrangement (including controlled disbursement, automated
clearinghouse transactions, return items, overdrafts and interstate depository
network services).

 

“Banking Services Obligations” means any and all obligations of any Grantor,
whether absolute or contingent and howsoever and whensoever created, arising,
evidenced or acquired (including all renewals, extensions and modifications
thereof and substitutions therefor) in connection with Banking Services.

 

“Bankruptcy Code” means Title 11 of the United States Code.

 

“Bankruptcy Law” means the Bankruptcy Code and any similar federal, state or
foreign law for the relief of debtors.

 

“Board of Directors” means (a) with respect to a corporation, the board of
directors of the corporation or any committee thereof duly authorized to act on
behalf of such board; (b) with respect to a partnership, the Board of Directors
of the general partner of the partnership; (c) with respect to a limited
liability company, the manager or managers, or if there are no managers of such
limited liability company, the managing member or members or any controlling
committee of managers or managing members thereof, as the case may be; and (d)
with respect to any other Person, the board or committee of such Person serving
a similar function.

 

“Borrower” has the meaning assigned to such term in the preamble hereto.

 

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“Borrowing Base” has the meaning assigned to such term in the definition of
“Priority Lien Cap.”

 

“Business Day” means any day that is neither a Saturday or Sunday nor a legal
holiday on which banks are authorized or required to be closed in New York.

 

“Capital Stock” means (a) in the case of a corporation, corporate stock; (b) in
the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock; (c) in the case of a partnership or limited liability company,
partnership interests (whether general or limited) or membership interests; and
(d) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person, but excluding from all of the foregoing any debt securities
convertible into Capital Stock, whether or not such debt securities include any
right of participation with Capital Stock.

 

“Collateral” means all of the assets and property of any Grantor, whether real,
personal or mixed, constituting the Priority Lien Collateral and/or the Second
Lien Collateral.

 

“Credit Facilities” means one or more credit facilities (including, without
limitation, the Priority Credit Agreement) meeting the following criteria (the
“Credit Facility Criteria”):

 

(i)          unless and until a default shall occur under such Credit Facility
and commitments to lend thereunder shall have expired or been terminated, the
Priority Lien Agent (or, if there is more than one, that one who is primarily
responsible for administration of the Credit Facility) shall be a commercial
bank, or Affiliate thereof,

 

(ii)         on the date of execution of such Credit Facility, the lenders shall
consist of commercial banks, institutional lenders and other similar financial
institutions,

 

(iii)        the credit facilities established thereunder shall consist of
revolving credit loans, letters of credit and/or term loans, with availability
thereunder determined on a basis consistent with the Borrowing Base and Priority
Lien Cap (or otherwise expressly limited so as not to exceed clause (a) of the
Priority Lien Cap); and

 

(iv)        the contractual rate of interest and any original-issue discount
arrangement thereunder (as such terms are used and described in the definition
herein of “Interest Rate Priority Cap”) shall be consistent with the methodology
and limitations described in (or otherwise shall be expressly limited so as not
to exceed) the Interest Rate Priority Cap.

 

For avoidance of doubt, any such Credit Facility may be in a single tranche or
in multiple tranches, consistent with the foregoing criteria, provided that all
such indebtedness (other than DIP Financing) is pari passu in right of payment,
it being understood that there may be different tranches of loans constituting
Priority Lien Debt with different maturities and amortization profiles, and that
cash flows may be distributed in accordance with varying priorities established
under so-called “waterfall” provisions, but the principal amount of indebtedness
under all such tranches must in all other respects be pari passu in right of
payment.  Any such tranche of loans (other than DIP Financing) that is not
consistent with the foregoing requirement for pari passu treatment in right of
payment with the revolving credit loans under the Priority Lien Documents shall
not constitute Priority Lien Obligations for purposes of this Agreement.

 

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“Credit Facility Criteria” has the meaning assigned to such term in the
definition of “Credit Facilities.”

 

“Declining Holder” has the meaning assigned to such term in Section 3.06(c).

 

“Derivative Contract” means any agreement with respect to any future, forward,
swap, cap or collar, option, hedging, derivative or similar transaction covering
oil and gas commodities or prices or financial, monetary or interest rate
instruments, including any and all trades and confirmations entered into
pursuant thereto.

 

“Derivative Obligations” means obligations of any Grantor to any counterparty
under any Derivative Contract.

 

“Discharge of Priority Lien Obligations” means the occurrence of all of the
following:

 

(a)          termination or expiration of all commitments to extend credit that
would constitute Priority Lien Debt;

 

(b)          payment in full in cash of the principal of and interest and
premium (if any) on all Priority Lien Debt (other than any undrawn letters of
credit);

 

(c)          discharge, cash collateralization or the issuance of back-to-back
letters of credit from an issuing bank reasonably acceptable to the applicable
Priority Lien Secured Party (which such cash collateralization or back-to-back
letters of credit shall be in an amount no lower than the lower of (i) 104% of
the aggregate undrawn amount and (ii) the percentage of the aggregate undrawn
amount required for release of liens under the terms of the applicable Priority
Lien Document) of all outstanding letters of credit constituting Priority Lien
Obligations;

 

(d)          payment of Derivative Obligations owing or to be owing by any
Grantor to any counterparty that are secured by Priority Liens (and, with
respect to any particular Derivative Contract, termination of such agreement and
payment in full in cash of all obligations thereunder or such other arrangements
as have been made by the counterparty thereto (and communicated to the Priority
Lien Agent) pursuant to the terms of the Priority Credit Agreement); and

 

(e)          payment in full in cash of all other Priority Lien Obligations that
are outstanding and unpaid at the time the Priority Lien Debt is paid in full in
cash (other than any obligations for taxes, costs, indemnifications,
reimbursements, damages and other liabilities in respect of which no claim or
demand for payment has been made at or prior to such time);

 

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provided that, if, at any time after the Discharge of Priority Lien Obligations
has occurred, any Grantor enters into any Priority Lien Document evidencing a
Priority Lien Obligation which incurrence is not prohibited by the applicable
Second Lien Documents, then such Discharge of Priority Lien Obligations shall
automatically be deemed not to have occurred for all purposes of this Agreement
with respect to such new Priority Lien Obligations (other than with respect to
any actions taken as a result of the occurrence of such first Discharge of
Priority Lien Obligations), and, from and after the date on which the Parent
Company designates such Indebtedness as Priority Lien Obligations in accordance
with this Agreement, the obligations under such Priority Lien Document shall
automatically and without any further action be treated as Priority Lien
Obligations for all purposes of this Agreement, including for purposes of the
Lien priorities and rights in respect of Collateral set forth in this Agreement
and any Second Lien Obligations shall be deemed to have been at all times Second
Lien Obligations and at no time Priority Lien Obligations. For the avoidance of
doubt, a Replacement as contemplated by Section 4.04(b) shall not be deemed to
cause a Discharge of Priority Lien Obligations.

 

“Disposition” shall mean any sale, lease, exchange, assignment, license,
contribution, transfer or other disposition. “Dispose” shall have a correlative
meaning.

 

“Excess Priority Lien Obligations” shall mean, as of any date of determination,
(i) the amount of outstanding Priority Lien Principal Obligations in excess of
clause (a) of the Priority Lien Cap incurred in contravention of Section 4.04(b)
and (ii) the amount of outstanding interest or other amounts of Priority Lien
Debt in excess of the Interest Rate Priority Cap, in each case together with all
interest and fees accrued on such excess amount.

 

“Finance Corp” has the meaning assigned to that term in the preamble hereto.

 

“Governmental Authority” means the government of the United States or any other
nation, or any political subdivision thereof, whether state, provincial or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other Person exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.

 

“Grantor” means the Parent Company, Finance Corp, the Borrower and each other
subsidiary of the Parent Company that shall have granted any Lien in favor of
either the Priority Lien Agent or the Second Lien Collateral Trustee on any of
its assets or properties to secure any of the Secured Obligations.

 

“Hydrocarbon Interests” means leasehold and other interests in or under oil, gas
and other liquid or gaseous hydrocarbon leases wherever located, mineral fee
interests, overriding royalty and royalty interests, net profit interests, and
production payment interests relating to oil, gas or other liquid or gaseous
hydrocarbons wherever located, including any reserved or residual interest of
whatever nature.

 

“Hydrocarbons” means crude oil, natural gas, casinghead gas, drip gasoline,
natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous
hydrocarbons and all constituents, elements or compounds thereof and products
refined or processed therefrom.

 

“Indenture” means the Indenture, dated as of April 8, 2015, among the Parent
Company, Finance Corp and Borrower, as issuers, the other Grantors party thereto
from time to time, the Second Lien Collateral Trustee and the Trustee (including
any supplements executed in connection with the issuance of any Series of Second
Lien Debt under the Indenture) unless restricted by the terms of this Agreement,
and any credit agreement, loan agreement, note agreement, promissory note,
indenture or any other agreement or instrument evidencing or governing the terms
of any Second Lien Substitute Facility.

 

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“Indenture Notes” means the 9.25% Senior Secured Second Lien Notes due 2020
issued under the Indenture, and any additional senior second lien secured notes
issued thereunder.

 

“Indenture Second Lien Documents” means the Indenture, the Indenture Notes, the
Indenture Second Lien Security Documents and all other loan documents, notes,
guarantees, instruments and agreements governing or evidencing any Second Lien
Substitute Facility.

 

“Indenture Second Lien Obligations” means, with respect to any Grantor, any
obligations of such Grantor owed to any Indenture Second Lien Secured Party in
respect of the Indenture Second Lien Documents.

 

“Indenture Second Lien Secured Parties” means, at any time, the Trustee, the
Second Lien Collateral Trustee, the trustees, agents and other representatives
of the holders of the Indenture Notes (including any holders of notes pursuant
to supplements executed in connection with the issuance of a Series of Second
Lien Debt under the Indenture) who maintains the transfer register for such
Indenture Notes or such Series of Second Lien Debt, the beneficiaries of each
indemnification obligation undertaken by any Grantor under any Indenture Second
Lien Document and each other holder of, or obligee in respect of, any Indenture
Second Lien Obligations, any holder or lender pursuant to any Indenture Second
Lien Document outstanding at such time; provided that the Additional Second Lien
Secured Parties shall not be deemed Indenture Second Lien Secured Parties.

 

“Indenture Second Lien Security Documents” means the Indenture (insofar as the
same grants a Lien on the Collateral), each agreement listed in Part B of
Exhibit C hereto and any other security agreements, pledge agreements,
collateral assignments, mortgages, deeds of trust, collateral agency agreements,
control agreements, or grants or transfers for security, now existing or entered
into after the date hereof, executed and delivered by the Parent Company or any
other Grantor creating (or purporting to create) a Lien upon Collateral in favor
of the Second Lien Collateral Trustee (including any such agreements,
assignments, mortgages, deeds of trust and other documents or instruments
associated with any Second Lien Substitute Facility).

 

“Insolvency or Liquidation Proceeding” means:

 

(a)          any case commenced by or against the Parent Company, Finance Corp,
the Borrower or any other Grantor under the Bankruptcy Code or any similar
federal or state law for the relief of debtors, any other proceeding for the
reorganization, recapitalization or adjustment or marshalling of the assets or
liabilities of the Parent Company, Finance Corp, the Borrower or any other
Grantor, any receivership or assignment for the benefit of creditors relating to
the Parent Company, Finance Corp, the Borrower or any other Grantor or any
similar case or proceeding relative to the Parent Company, Finance Corp, the
Borrower or any other Grantor or its creditors, as such, in each case whether or
not voluntary;

 

(b)          any liquidation, dissolution, marshalling of assets or liabilities
or other winding up of or relating to the Parent Company, Finance Corp, the
Borrower or any other Grantor, in each case whether or not voluntary and whether
or not involving bankruptcy or insolvency; or

 

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(c)          any other proceeding of any type or nature in which substantially
all claims of creditors of the Parent Company, Finance Corp, the Borrower or any
other Grantor are determined and any payment or distribution is or may be made
on account of such claims.

 

“Intercreditor Agreement Joinder” means an agreement substantially in the form
of Exhibit A.

 

“Interest Rate Priority Cap” means, as of any date of determination under
Section 4.04(a), compliance with the following two criteria:

 

(a)a maximum original-issue discount arrangement (whether in the form of a
discount of funds advanced in comparison to the principal amount of loan
obligations incurred, or in the form of an upfront fee payable generally to
lenders at the time of, and in connection with, the creation or increase of any
commitment to lend or the making of loans) not greater than 3.00% of the
principal amount of such commitment amount or loan principal amount, in each
case as computed on the date of such advance of funds, creation or increase of
commitment or making of loans; and

 

(b)contractual rate of interest applicable to the outstanding principal amount
of loans (including any amounts drawn under any letters of credit and not yet
reimbursed) constituting Priority Lien Debt not to exceed 3.5% per annum above a
designated Reference Rate specified in the applicable Priority Credit Agreement,
as determined on a Dollar-weighted average basis.

 

For purposes of the foregoing:

 

(i) the two criteria specified above shall be mutually exclusive (meaning that
any compensation arrangement included in clause (a) above shall be ignored for
purposes of clause (b), and vice-versa);

 

(ii) the Interest Rate Priority Cap shall not apply to (and the phrase
“contractual rate of interest” or “original-issue discount arrangement” as used
herein shall not include) (A) any indemnity payments (including, without
limitation, for interest period “breakage” and increased costs due to changes in
law and similar contingencies), costs, expenses or other reimbursements payable
to any Secured Party, (B) any increase in the contractual rate of interest (not
to exceed 2.00% per annum) arising from or during a breach or other default, (C)
any increase in the interest rate arising from an adjustment for regulatory or
reserve costs or applicable taxes, or from customary market disruption events
relating to the illegality or unavailability of LIBOR-rate loans, (D) fees
payable to lenders in respect of unfunded commitments at a rate not exceeding
1.00% per annum, (E) fees payable to lenders in respect of unfunded obligations
in respect of letters of credit at a rate not exceeding 3.5% per annum, (F) fees
payable to the Administrative Agent or any collateral or other agent(s), letter
of credit fees payable to issuers of letters of credit, arrangement fees payable
to fewer than all of the lenders, Reciprocal Fee Payments (as defined in the
Priority Credit Agreement as in effect on the date hereof, after giving effect
to the First Amendment thereto) and such other fees as are included in the
computation of the term “Additional First Lien Fee” pursuant to Section 4(c) of
the Note Purchase Agreement referenced in the Indenture, (G) other fees
dissimilar to those described in this clause (ii) or in clause (a) above,
payable from time to time to the lenders and (H) any Derivative Obligations or
Banking Services Obligations; and

 

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(iii) “Reference Rate” means and refers to a base lending rate, alternative base
lending rate or interbank funds rate as specified in such Priority Credit
Agreement, in each case substantially identical to the definitions, and with
such other adjustments and terms, as are in effect in the Priority Credit
Agreement on the date hereof (including, by way of example, “Base Rate,” “LIBOR”
or “LIBOR Market Index Rate” as defined and used in the Priority Credit
Agreement on the date hereof), with such variations to said definitions (other
than variations instituting or changing any “floor” or similar minimum rate of
interest in the calculation of such Reference Rate) as may be within prevailing
commercial bank market practices for such reference rates at the time of
determination.

 

“Issuers” has the meaning assigned to that term in the preamble hereto.

 

“Lien” means, 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 agreement to give a security interest therein.

 

“Lien Sharing and Priority Confirmation Joinder” means an agreement
substantially in the form of Exhibit B.

 

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties or financial condition
of the Grantors taken as a whole, or as to the Parent Company, including any
material adverse change in reserve estimates of the Oil and Gas Properties of
the Grantors taken as a whole; (b) a material impairment of the ability of any
Grantor to perform its material obligations under the Secured Debt Documents; or
(c) a material adverse effect upon the legality, validity, binding effect or
enforceability against any Grantor of any material Secured Debt Document.

 

“New York UCC” means the Uniform Commercial Code as from time to time in effect
in the State of New York.

 

“Obligations” means any principal (including reimbursement obligations with
respect to letters of credit whether or not drawn), interest (including, to the
extent legally permitted, all accrued and unpaid interest at the default rate
and any interest accrued thereon after the commencement of any Insolvency or
Liquidation Proceeding at the rate, including any applicable post-default rate,
specified in the Priority Lien Documents or Second Lien Documents, even if such
interest is not enforceable, allowable or allowed as a claim in such
proceeding), make-whole amounts, premium (if any), fees, indemnifications,
reimbursements, expenses and other liabilities payable under the documentation
governing any indebtedness.

 

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“Officer” means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary, any Senior Vice President, any Vice President or any Assistant Vice
President of such Person.

 

“Officers’ Certificate” means a certificate signed on behalf of the Parent
Company by any two of the chief executive officer, president, chief financial
officer or any vice president of the Parent Company.

 

“Oil and Gas Properties” means Hydrocarbon Interests now owned by the Grantors
thereof and contracts executed in connection therewith and all tenements,
hereditaments, appurtenances, and properties belonging, affixed or incidental to
such Hydrocarbon Interests, including any and all property, real or personal,
now owned by the Grantors and situated upon or to be situated upon, and used,
built for use, or useful in connection with the operating, working or developing
of such Hydrocarbon Interests, including any and all petroleum and/or natural
gas wells, buildings, structures, field separators, liquid extractors, plant
compressors, pumps, pumping units, field gathering systems, pipelines, tank and
tank batteries, fixtures, valves, fittings, machinery and parts, engines,
boilers, liters, apparatus, equipment, appliances, tools, implements, cables,
wires, towers, taping, tubing and rods, surface leases, rights-of-way, easements
and servitudes, and all additions, substitutions, replacements for, and fixtures
and attachments to, any and all of the foregoing owned directly or indirectly by
the Grantor.

 

“Original Priority Lien Agent” has the meaning assigned to that term in the
preamble hereto.

 

“Original Second Lien Collateral Trustee” has the meaning assigned to that term
in the preamble hereto. “Parent Company” has the meaning assigned to that term
in the preamble hereto.

 

“Person” means any individual, sole proprietorship, partnership, limited
liability company, joint venture, joint-stock company, trust, unincorporated
organization, association, corporation, government or any agency or political
subdivision thereof or any other entity.

 

“Priority Credit Agreement” means the Third Amended and Restated Credit
Agreement, dated as of November 19, 2014, among the Borrower as borrower, the
Parent Company as parent guarantor, the Original Priority Lien Agent, the
lenders party thereto from time to time and the other agents named therein as in
effect as of the date hereof (including the First Amendment thereto dated the
date hereof), as the same may hereafter be amended, restated, amended and
restated, adjusted, waived, renewed, extended, supplemented, replaced,
refinanced or otherwise modified from time to time in accordance with this
Agreement, including any credit agreement, loan agreement, promissory note, or
other instrument evidencing or governing the terms of any Priority Substitute
Facility.

 

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“Priority Lien” means a Lien granted by the Priority Lien Documents to the
Priority Lien Agent at any time upon any property of any Grantor to secure
Priority Lien Obligations (including Liens on such Collateral under the security
documents associated with any Priority Substitute Facility).

 

“Priority Lien Agent” means the Original Priority Lien Agent, and, from and
after the date of execution and delivery of a Priority Substitute Facility, the
agent, collateral agent, trustee or other representative of the lenders or
holders of the indebtedness and other Obligations evidenced thereunder or
governed thereby, in each case, together with its successors in such capacity.

 

“Priority Lien Cap” means, as of any date of determination under Section
4.04(b), the sum of:

 

(a)          the Borrowing Base, plus

 

(b)          the amount of all Derivative Obligations, plus,

 

(c)          the amount of all Banking Services Obligations;

 

provided, that for purposes of the foregoing, “Borrowing Base” shall mean, on
any date of determination, an amount equal to the most recent determination made
under the Priority Credit Agreement (including any Priority Substitute Facility)
by the Priority Lien Secured Parties (or such of them as shall be entitled
thereunder to make such determination), in their sole discretion and in
accordance with their customary policies and procedures for extending credit to
oil and gas reserve-based customers, of the maximum amount of Priority Lien
Principal Obligations that may be outstanding under and in accordance with such
Credit Facilities. Such Borrowing Base determination shall be based upon the
loan collateral value assigned to the oil and gas properties of the Grantors and
such other credit factors (including the assets. Liabilities, cash flow,
business, properties, prospects, management and ownership of the Grantors) that
such Priority Lien Secured Parties deem significant. For the avoidance of doubt,
(i) the Second Lien Secured Parties acknowledge and agree that the Priority Lien
Principal Obligations outstanding on the date hereof under the Priority Credit
Agreement constitute Priority Lien Obligations as of the date hereof, (ii) the
“Borrowing Base” determination as of April 1, 2015, and application of the
“October 1, 2015 Borrowing Base Floor” to such determination as of October 1,
2015, in each case as such terms are defined in, and as such determinations are
made pursuant to Section 2.05(a) of, the Priority Credit Agreement (as amended
on the date hereof by the First Amendment thereto) shall each be deemed to be in
accordance with the foregoing criteria and to be compliant with the Priority
Lien Cap and (iii) the calculation of “Priority Lien Cap” represents an
incurrence-only determination under Section 4.04(b) with respect to Priority
Lien Principal Obligations (including without limitation any increases or
refinancings (by Replacement) of the amount thereof) and does not otherwise
apply to Priority Lien Obligations that may be outstanding from time to time.

 

“Priority Lien Collateral” shall mean all “Collateral”, as defined in the
Priority Credit Agreement or any other Priority Lien 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 Priority Lien Obligation.

 

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“Priority Lien Credit Obligations” means all Priority Lien Obligations other
than those Derivative Obligations and Banking Services Obligations as are
secured by Priority Liens.

 

“Priority Lien Debt” means Priority Lien Obligations other than the Derivative
Obligations and Banking Services Obligations.

 

“Priority Lien Documents” means the Priority Credit Agreement, the Priority Lien
Security Documents, the other “Loan Documents” (as defined in the Priority
Credit Agreement) and all other loan documents, notes, guarantees, instruments
and agreements governing or evidencing, or executed or delivered in connection
with, any Priority Substitute Facility.

 

“Priority Lien Obligations” means the obligations under the Priority Credit
Agreement (including letters of credit and reimbursement obligations with
respect thereto, Derivative Obligations and Banking Services Obligations and
obligations for accrued and unpaid interest at the default rate of interest and
post-petition interest, as applicable, as provided in the Priority Credit
Agreement) that was permitted to be incurred and secured under or in accordance
with the Priority Credit Agreement and additional or Replacement indebtedness
under any Priority Substitute Facility, in each case, other than Excess Priority
Lien Obligations. For avoidance of doubt, the Priority Lien Obligations may be
in a single tranche or in multiple tranches, provided that all such indebtedness
(other than DIP Financing) is pari passu in right of payment, it being
understood that there may be different tranches of loans constituting Priority
Lien Debt with different maturities and amortization profiles, and that cash
flows may be distributed in accordance with varying priorities established under
so-called “waterfall” provisions, but the principal amount of indebtedness under
all such tranches must in all other respects be pari passu in right of payment. 
Any such tranche of loans (other than DIP Financing) that is not consistent with
the foregoing requirement for pari passu treatment in right of payment with the
revolving credit loans under the Priority Lien Documents shall not constitute
Priority Lien Obligations for purposes of this Agreement.

 

“Priority Lien Principal Obligations” means, at any time of determination, the
aggregate of that part of the Priority Lien Obligations consisting of (i) unpaid
principal of the loans outstanding under the Priority Lien Documents (including
any amounts drawn under any letters of credit ant not yet reimbursed) together
with (ii) the undrawn amount of all outstanding letters of credit under the
Priority Lien Documents (such undrawn amount being the face amount thereof, less
amounts drawn thereunder, whether or not the remaining balance is then available
to be drawn thereunder).

 

“Priority Lien Secured Parties” means, at any time:

 

(a)          the Priority Lien Agent, each lender, issuing bank or swing line
lender under the Priority Credit Agreement,

 

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(b)          each counterparty, holder, provider or obligee of any Derivative
Obligations and Banking Services Obligations that, in the case of this clause
(b), is or was a lender under the Priority Credit Agreement (or under the
Existing Credit Agreement (as defined in the Priority Credit Agreement)) at the
time of entering into the applicable Derivative Contract (or, in the case of
Derivative Contracts listed on Schedule 6.21 of the Priority Credit Agreement as
of the date hereof, was a lender under the QR Energy Credit Agreement (as
defined in the Priority Credit Agreement as in effect on the date hereof) at
time of entering into such Derivative Contract) or Bank Services Agreement with
respect thereto or an Affiliate (as defined in the Priority Credit Agreement)
thereof and is a secured party (or a party entitled to the benefits of the
security) under any Priority Lien Document,

 

(c)          the beneficiaries of each indemnification obligation undertaken by
any Grantor under any Priority Lien Document, and

 

(d)          each other Person that provides letters of credit, guarantees or
other credit support related thereto, or is a holder or obligee of loans, under
any Priority Lien Document under a Priority Substitute Facility, or that is a
holder or obligee in respect of any Derivative Obligation or Banking Services
Obligation (either as described in (b) above or if such holder or obligee is a
lender or Affiliate thereof under such Priority Substitute Facility at the time
of entering into such Derivative Contract or agreement relating to such Banking
Services Obligation), in each case to the extent designated as a secured party
(or a party entitled to the benefits of the security) under any Priority Lien
Document outstanding at such time.

 

“Priority Lien Security Documents” means the Priority Credit Agreement (insofar
as the same grants a Lien on the Collateral), each agreement listed in Part A of
Exhibit C hereto, and any other security agreements, pledge agreements,
collateral assignments, mortgages, deeds of trust, control agreements, or grants
or transfers for security, now existing or entered into after the date hereof,
executed and delivered by the Parent Company or any other Grantor creating (or
purporting to create) a Lien upon Collateral in favor of the Priority Lien Agent
(including any such agreements, assignments, mortgages, deeds of trust and other
documents or instruments associated with any Priority Substitute Facility).

 

“Priority Substitute Facility” means either (i) any Credit Facility with respect
to which the requirements contained in Section 4.04(b) of this Agreement have
been satisfied or (ii) any DIP Financing with respect to which the requirements
contained in Section 4.02(b) of this Agreement have been satisfied, that, in
each case Replaces the Priority Credit Agreement then in existence; provided
that any Priority Lien securing such Priority Substitute Facility shall be
subject to the terms of this Agreement for all purposes (including the Lien
priorities as set forth herein).

 

“Purchaser Representative” means (a) initially the Trustee or (b) such other
Person that is unanimously appointed from time to time by the Second Lien
Representatives to replace the Trustee (or any subsequent Purchaser
Representative) pursuant to a written notice to the Priority Lien Agent.

 

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“Replaces” means, (a) in respect of any agreement with reference to the Priority
Credit Agreement or the Priority Lien Obligations or any Priority Substitute
Facility, that such agreement refunds, refinances or replaces the Priority
Credit Agreement, the Priority Lien Obligations or such Priority Substitute
Facility in whole (in a transaction that is in compliance with Section 4.04 or
Section 4.02(b) and satisfies the Credit Facility Criteria) and that all
commitments thereunder are terminated, or, to the extent permitted by the terms
of the Priority Credit Agreement or such Priority Substitute Facility, in part,
and (b) in respect of any agreement with reference to the Second Lien Documents,
the Second Lien Obligations or any Second Lien Substitute Facility, that such
indebtedness refunds, refinances or replaces the Second Lien Documents, the
Second Lien Obligations or such Second Lien Substitute Facility in whole (in a
transaction that is in compliance with Section 4.04(b) or Section 4.04(c)) and
that all commitments thereunder are terminated, or, to the extent permitted by
the terms of the Second Lien Documents or such Second Lien Substitute Facility,
in part. “Replace,” “Replaced” and “Replacement” shall have correlative
meanings.

 

“Second Lien” means a Lien granted by a Second Lien Document to the Second Lien
Collateral Trustee, at any time, upon any Collateral by any Grantor to secure
Second Lien Obligations (including Liens on such Collateral under the security
documents associated with any Second Lien Substitute Facility).

 

“Second Lien Collateral” shall mean all “Collateral”, as defined in any Second
Lien 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 Lien
Obligations. “Second Lien Collateral Trustee” means the Original Second Lien
Collateral Trustee, and, from and after the date of execution and delivery of a
Second Lien Substitute Facility, the agent, collateral agent, trustee or other
representative of the lenders or other holders of the indebtedness and other
obligations evidenced thereunder or governed thereby, in each case, together
with its successors in such capacity

 

“Second Lien Debt” means the indebtedness under the Indenture Notes and all
additional indebtedness incurred under any Additional Second Lien Documents and
with respect to which the requirements of Section 4.04(b) have been satisfied,
and all indebtedness incurred under any Second Lien Substitute Facility.

 

“Second Lien Documents” means the Indenture Second Lien Documents and the
Additional Second Lien Documents.

 

“Second Lien Obligations” means Second Lien Debt and all other Obligations in
respect thereof.

 

“Second Lien Representative” means (a) in the case of the Indenture Notes, the
Trustee, and (b) in the case of any other Series of Second Lien Debt, the
trustee, agent or representative of the holders of such Series of Second Lien
Debt who is appointed as a Second Lien Representative (for purposes related to
the administration of the Second Lien Security Documents) pursuant to the
indenture, credit agreement or other agreement governing such Series of Second
Lien Debt, together with its successors in such capacity.

 

“Second Lien Secured Parties” means the Indenture Second Lien Secured Parties
and the Additional Second Lien Secured Parties.

 

“Second Lien Security Documents” means the Indenture Second Lien Security
Documents and the Additional Second Lien Security Documents.

 

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“Second Lien Substitute Facility” means any facility with respect to which the
requirements contained in Section 4.04(b) of this Agreement have been satisfied
and that is permitted to be incurred pursuant to the Priority Lien Documents,
the proceeds of which are used to, among other things, Replace the Indenture
and/or any Additional Second Lien Debt Facility then in existence. For the
avoidance of doubt, no Second Lien Substitute Facility shall be required to be
evidenced by notes or other instruments and may be a facility evidenced or
governed by a credit agreement, loan agreement, note agreement, promissory note,
indenture or any other agreement or instrument; provided that any such Second
Lien Substitute Facility shall be subject to the terms of this Agreement for all
purposes (including the Lien priority as set forth herein) as the other Liens
securing the Second Lien Obligations are subject to under this Agreement.

 

“Secured Debt Documents” means the Priority Lien Documents and the Second Lien
Security Documents.

 

“Secured Debt Representative” means the Second Lien Collateral Trustee and the
Priority Lien Agent.

 

“Secured Obligations” means, the Priority Lien Obligations and the Second Lien
Obligations.

 

“Secured Parties” means the Priority Lien Secured Parties and the Second Lien
Secured Parties.

 

“Security Documents” means the Priority Lien Security Documents and the Second
Lien Security Documents.

 

“Series of Second Lien Debt” means, severally, the Indenture Notes and each
other issue or series of Second Lien Debt (including any Additional Second Lien
Debt Facility) for which a single transfer register is maintained.

 

“Series of Secured Debt” means the Priority Lien Obligations and each Series of
Second Lien Debt.

 

“Standstill Period” shall have the meaning assigned to such term in Section
3.02.

 

“subsidiary” means, with respect to any specified Person (a) any corporation,
association or other business entity (other than a partnership or limited
liability company) of which more than 50% of the total voting power of the
Voting Stock of such Person is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other subsidiaries of that
Person (or a combination thereof); and (b) any partnership (whether general or
limited) or limited liability company (x) the sole general partner or member of
which is such Person or a subsidiary of such Person, or (y) if there is more
than a single general partner or member, either (i) the only managing general
partners or managing members of which are such Person or one or more
subsidiaries of such Person (or any combination thereof) or (ii) such Person
owns or controls, directly or indirectly, a majority of the outstanding general
partner interests, member interests or other Voting Stock of such partnership or
limited liability company, respectively.

 

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“Treasury Management Arrangement” means any agreement or other arrangement
governing the provision of treasury or cash management services, including
deposit accounts, overdraft, credit or debit card, funds transfer, automated
clearinghouse, zero balance accounts, returned check concentration, controlled
disbursement, lockbox, account reconciliation and reporting and trade finance
services and other cash management services.

 

“Trustee” means the Original Second Lien Collateral Trustee, and, from and after
the date of execution and delivery of the Second Lien Substitute Facility, the
agent, collateral agent, trustee or other representative of the lenders or other
holders of the indebtedness and other obligations evidenced thereunder or
governed thereby, together with its successors in such capacity.

 

“Voting Stock” of any specified Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.

 

Article II
LIEN PRIORITIES

 

SECTION 2.01.         Relative Priorities.

 

(a)          The grant of the Priority Liens pursuant to the Priority Lien
Documents and the grant of the Second Liens pursuant to the Second Lien
Documents create two separate and distinct Liens on the Collateral.

 

(b)          Notwithstanding anything contained in this Agreement, the Priority
Lien Documents, the Second Lien Documents, or any other agreement or instrument
or operation of law to the contrary, or any other circumstance whatsoever and
irrespective of (i) the timing of incurrence of any Series of Secured Debt, (ii)
the order or method of creation, attachment or perfection of any Liens securing
any Series of Secured Debt, (iii) the time or order of filing or recording of
financing statements, mortgages or other documents filed or recorded to perfect
any Lien upon any Collateral, (iv) the time of taking possession or control over
any Collateral, (v) that any Priority Lien may not have been perfected or may be
or have become subordinated, by equitable subordination or otherwise, to any
other Lien, and (vi) the rules for determining priority under any law governing
relative priorities of Liens, the Second Lien Collateral Trustee, on behalf of
itself and the other Second Lien Secured Parties, hereby agrees that (x) any
Priority Lien on any Collateral now or hereafter held by or for the benefit of
any Priority Lien Secured Party to secure Priority Lien Obligations shall be
senior in right, priority, operation, effect and all other respects to any and
all Second Liens on any Collateral, and (y) any Second Lien on any Collateral
now or hereafter held by or for the benefit of any Second Lien Secured Party
shall be junior and subordinate in right, priority, operation, effect and all
other respects to any and all such Priority Liens on any Collateral, in any
case, subject to and up to the Priority Lien Cap as provided herein.

 

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(c)          It is acknowledged that, subject to the Priority Lien Cap (as
provided in Section 4.04(b) herein), (i) the aggregate amount of the Priority
Lien Obligations may be increased from time to time pursuant to the terms of the
Priority Lien Documents, (ii) a portion of the Priority Lien Obligations
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, and (iii) the Priority Lien
Obligations may be increased, extended, renewed, replaced, restated,
supplemented, restructured, repaid, refunded, refinanced or otherwise amended or
modified from time to time, all without affecting the subordination of the
Second Liens hereunder or the provisions of this Agreement defining the relative
rights of the Priority Lien Secured Parties and the Second Lien Secured Parties.
The Lien priorities provided for herein shall not be altered or otherwise
affected by any amendment, modification, supplement, extension, increase,
renewal, restatement or Replacement of either the Second Lien Obligations (or
any part thereof) or the Priority Lien Obligations (or any part thereof), by the
release of any Collateral or of any guarantees for any Priority Lien Obligations
or by any action that any Secured Debt Representative or Secured Party may take
or fail to take in respect of any Collateral.

 

SECTION 2.02.         Prohibition on Contesting Liens. Each of the Second Lien
Collateral Trustee, for itself and on behalf of each Second Lien Secured Party,
and the Priority Lien Agent, for itself and on behalf of each Priority Lien
Secured Party, agrees that it shall not (and hereby waives any right to) contest
or support any other Person in contesting, in any proceeding (including any
Insolvency or Liquidation Proceeding), (a) the validity or enforceability of any
Secured Debt Document or any Obligation thereunder, (b) the validity,
perfection, priority or enforceability of the Liens, mortgages, assignments and
security interests granted pursuant to the Security Documents with respect to
the Priority Lien Obligations or the Second Lien Obligations or (c) the relative
rights and duties of the Priority Lien Secured Parties and the Second Lien
Secured Parties granted and/or established in this Agreement or any other
Security Document with respect to such Liens, mortgages, assignments, and
security interests; provided that nothing in this Agreement shall be construed
to prevent or impair the rights of the Priority Lien Agent or any other Priority
Lien Secured Party or the Second Lien Collateral Trustee or any other Second
Lien Secured Party to enforce this Agreement, including the Priority Lien
Agent’s or Second Lien Collateral Trustee’s right to enforce the priority of the
Liens securing the Priority Lien Obligations as provided in Section 2.01 hereof.

 

SECTION 2.03.         No New Liens. The parties hereto agree that, so long as
the Discharge of Priority Lien Obligations has not occurred, none of the
Grantors shall, nor shall any Grantor permit any of its subsidiaries to, (a)
grant or permit any additional Liens on any asset of a Grantor or any of its
Subsidiaries to secure any Second Lien Obligation, or take any action to perfect
any additional Liens, unless it has granted, or substantially concurrently
therewith grants, a Lien on such asset of such Grantor to secure the Priority
Lien Obligations and has taken all actions required to perfect such Liens or (b)
grant or permit any additional Liens on any asset of a Grantor or any of its
Subsidiaries to secure any Priority Lien Obligations, or take any action to
perfect any additional Liens, unless it has granted, or substantially
concurrently therewith grants, a Lien on such asset of a Grantor or any of its
Subsidiaries to secure the Second Lien Obligations, and has taken all actions
required to perfect such Liens, 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 Priority Lien Agent or the
other Priority Lien Secured Parties, the Second Lien Collateral Trustee agrees,
for itself and on behalf of the other Second Lien Secured Parties, that any
amounts received by or distributed to any Second Lien Secured Party pursuant to
or as a result of any Lien granted in contravention of this Section 2.03 shall
be subject to Section 3.05(b).

 

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SECTION 2.04.         Similar Collateral and Agreements. The parties hereto
acknowledge and agree that it is their intention that the Priority Lien
Collateral and the Second Lien Collateral be identical. In furtherance of the
foregoing, the parties hereto agree (a) to cooperate in good faith in order to
determine, upon any reasonable request by the Priority Lien Agent or the Second
Lien Collateral Trustee, the specific assets included in the Priority Lien
Collateral and the Second Lien Collateral, the steps taken to perfect the
Priority Liens and the Second Liens thereon and the identity of the respective
parties obligated under the Priority Lien Documents and the Second Lien
Documents in respect of the Priority Lien Obligations and the Second Lien
Obligations, respectively, (b) that, except as may be agreed by the Priority
Lien Agent concurrent with the execution of this Agreement with respect to
Second Lien Documents or otherwise from time to time by the Priority Lien Agent,
the Second Lien Security Documents creating Liens on the Collateral shall be in
all material respects the same forms of documents as the respective Priority
Lien Security Documents creating Liens on the Collateral other than (i) with
respect to the priority nature of the Liens created thereunder in such
Collateral, (ii) such other modifications to such Second Lien Security Documents
which are less restrictive than the corresponding Priority Lien Security
Documents and (iii) provisions in the Second Lien Security Documents which are
solely applicable to the rights and duties of the Second Lien Collateral Trustee
and/or the Trustee, and (c) that at no time shall there be any Grantor that is
an obligor in respect of the Second Lien Obligations that is not also an obligor
in respect of the Priority Lien Obligations.

 

SECTION 2.05.         No Duties of Priority Lien Agent. The Second Lien
Collateral Trustee, for itself and on behalf of each Second Lien Secured Party,
acknowledges and agrees that neither the Priority Lien Agent nor any other
Priority Lien Secured Party shall have any duties or other obligations to such
Second Lien Secured Party with respect to any Collateral, other than to transfer
to the Second Lien Collateral Trustee any remaining Collateral and any proceeds
of the sale or other Disposition of any such Collateral remaining in its
possession following the associated Discharge of Priority Lien Obligations, in
each case without representation or warranty on the part of the Priority Lien
Agent or any Priority Lien Secured Party. In furtherance of the foregoing, each
Second Lien Secured Party acknowledges and agrees that until the Discharge of
Priority Lien Obligations (subject to the terms of Section 3.02, including the
rights of the Second Lien Secured Parties following expiration of the Standstill
Period), the Priority Lien Agent shall be entitled, for the benefit of the
Priority Lien Secured Parties, to sell, transfer or otherwise Dispose of or deal
with such Collateral, as provided herein and in the Priority Lien Documents,
without regard to any Second Lien or any rights to which the Second Lien
Collateral Trustee or any Second Lien Secured Party would otherwise be entitled
as a result of such Second Lien. Without limiting the foregoing, each Second
Lien Secured Party agrees that neither the Priority Lien Agent nor any other
Priority Lien Secured Party shall have any duty or obligation first to marshal
or realize upon any type of Collateral, or to sell, Dispose of or otherwise
liquidate all or any portion of such Collateral, in any manner that would
maximize the return to the Second Lien Secured Parties, notwithstanding that the
order and timing of any such realization, sale, Disposition or liquidation may
affect the amount of proceeds actually received by the Second Lien Secured
Parties from such realization, sale, Disposition or liquidation. Following the
Discharge of Priority Lien Obligations, the Second Lien Collateral Trustee and
the other Second Lien Secured Parties may, subject to any other agreements
binding on the Second Lien Collateral Trustee or such other Second Lien Secured
Parties, assert their rights under the New York UCC or otherwise to any proceeds
remaining following a sale, Disposition or other liquidation of Collateral by,
or on behalf of the Second Lien Secured Parties. Each of the Second Lien Secured
Parties waives any claim such Second Lien Secured Party may now or hereafter
have against the Priority Lien Agent or any other Priority Lien Secured Party
arising out of any actions which the Priority Lien Agent or the Priority Lien
Secured Parties take or omit to take (including actions with respect to the
creation, perfection or continuation of Liens on any Collateral, actions with
respect to the foreclosure upon, sale, release or depreciation of, or failure to
realize upon, any of the Collateral, and actions with respect to the collection
of any claim for all or any part of the Priority Lien Obligations from any
account debtor, guarantor or any other party) in accordance with this Agreement
and the Priority Lien Documents or the valuation, use, protection or release of
any security for the Priority Lien Obligations.

 

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Article III
ENFORCEMENT RIGHTS; PURCHASE OPTION

 

SECTION 3.01.         Limitation on Enforcement Action. The Second Lien
Collateral Trustee, for itself and on behalf of each Second Lien Secured Party,
hereby agrees that, subject to Section 3.02, 3.05(b) and 4.07, neither the
Second Lien Collateral Trustee nor any other Second Lien Secured Party shall
commence any judicial or nonjudicial foreclosure proceedings with respect to,
seek to have a trustee, receiver, liquidator or similar official appointed for
or over, attempt any action to take possession of, exercise any right, remedy or
power with respect to, or otherwise take any action to enforce its interest in
or realize upon, or take any other action available to it in respect of, any
Collateral under any Second Lien Security Document, applicable law or otherwise
until the Discharge of Priority Lien Obligations (including but not limited to
any right of setoff), it being agreed that only the Priority Lien Agent, acting
in accordance with the applicable Priority Lien Documents, shall have the
exclusive right, prior to the Discharge of Priority Lien Obligations (and
whether or not any Insolvency or Liquidation Proceeding has been commenced), to
take any such actions or exercise any such remedies, in each case, without any
consultation with or the consent of the Second Lien Collateral Trustee or any
other Second Lien Secured Party. In exercising rights and remedies with respect
to the Collateral, the Priority Lien Agent and the other Priority Lien Secured
Parties may enforce the provisions of the Priority Lien 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. Without limiting the generality of
the foregoing, until the Discharge of Priority Lien Obligations, the Priority
Lien Agent will have the exclusive right to deal with that portion of the
Collateral consisting of deposit accounts and securities accounts (collectively
“Accounts”), including exercising rights under control agreements with respect
to such Accounts. The Second Lien Collateral Trustee, for itself and on behalf
of the other Second Lien Secured Parties, hereby acknowledges and agrees that no
covenant, agreement or restriction contained in any Second Lien Security
Document or any other Second Lien Document shall be deemed to restrict in any
way the rights and remedies of the Priority Lien Agent or the other Priority
Lien Secured Parties with respect to the Collateral as set forth in this
Agreement (other than Section 3.02 below). Notwithstanding the foregoing,
subject to Section 3.05, the Second Lien Collateral Trustee may, but will have
no obligation to, on behalf of the Second Lien Secured Parties, take all such
actions (not adverse to the Priority Liens or the rights of the Priority Lien
Agent and the Priority Lien Secured Parties) it deems necessary to perfect or
continue the perfection of the Second Liens in the Collateral or to create,
preserve or protect (but not enforce) the Second Liens in the Collateral.

 

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SECTION 3.02.         Standstill Period; Permitted Enforcement Action.
Notwithstanding the foregoing Section 3.01, both before and during an Insolvency
or Liquidation Proceeding, after a period of 180 days has elapsed (which period
will be tolled during any period in which the Priority Lien Agent is not
entitled, on behalf of the Priority Lien Secured Parties, 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 Lien Collateral Trustee has delivered to the Priority Lien
Agent written notice of the acceleration of the Second Lien Debt (the
“Standstill Period”), the Second Lien Collateral Trustee and the other Second
Lien Secured Parties may enforce or exercise any rights or remedies with respect
to any Collateral; provided, however that notwithstanding the expiration of the
Standstill Period or anything in the Second Lien Documents to the contrary, in
no event may the Second Lien Collateral Trustee or any other Second Lien 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
Priority Lien Agent on behalf of the Priority Lien Secured Parties or any other
Priority Lien 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 all or any material portion of the Collateral
or any such action or proceeding (prompt written notice thereof to be given to
the Second Lien Representatives by the Second Lien Collateral Trustee);
provided, further, that, at any time after the expiration of the Standstill
Period, if neither the Priority Lien Agent nor any other Priority Lien Secured
Party shall have commenced and be diligently pursuing the enforcement or
exercise of any rights or remedies with respect to any material portion of the
Collateral or any such action or proceeding, and the Second Lien Collateral
Trustee shall have commenced the enforcement or exercise of any rights or
remedies with respect to any material portion of the Collateral or any such
action or proceeding, then for so long as the Second Lien Collateral Trustee is
diligently pursuing such rights or remedies, neither any Priority Lien Secured
Party nor the Priority Lien Agent shall take any action of a similar nature
(other than a joinder in connection with such action or proceeding as may
reasonably be considered necessary to preserve the rights of the Priority Lien
Secured Parties therein) with respect to such 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.

 

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SECTION 3.03.         Insurance. Unless and until the Discharge of Priority Lien
Obligations has occurred (subject to the terms of Section 3.02, including the
rights of the Second Lien Secured Parties following expiration of the Standstill
Period), the Priority Lien Agent shall have the sole and exclusive right,
subject to the rights of the Grantors under the Priority Lien Documents, to
adjust and settle claims in respect of Collateral under any insurance policy in
the event of any loss thereunder and to approve any award granted in any
condemnation or similar proceeding (or any deed in lieu of condemnation)
affecting the Collateral. Unless and until the Discharge of Priority Lien
Obligations has occurred, and subject to the rights of the Grantors under the
Priority Lien Documents, all proceeds of any such policy and any such award (or
any payments with respect to a deed in lieu of condemnation) in respect to the
Collateral shall be paid to the Priority Lien Agent pursuant to the terms of the
Priority Lien Documents (including for purposes of cash collateralization of
commitments, letters of credit and Derivative Obligations that are secured by
Priority Liens) and, after the Discharge of Priority Lien Obligations has
occurred, to the Second Lien Collateral Trustee to the extent required under the
Second Lien Documents and then, to the extent no Second Lien Obligations are
outstanding, to the owner of the subject property, to such other Person as may
be entitled thereto or as a court of competent jurisdiction may otherwise
direct. If the Second Lien Collateral Trustee or any Second Lien Secured Party
shall, at any time, receive any proceeds of any such insurance policy or any
such award or payment in contravention of the foregoing, it shall pay such
proceeds over to the Priority Lien Agent. In addition, if by virtue of being
named as an additional insured or loss payee of any insurance policy of any
Grantor covering any of the Collateral, the Second Lien Collateral Trustee or
any other Second Lien Secured Party shall have the right to adjust or settle any
claim under any such insurance policy, then unless and until the Discharge of
Priority Lien Obligations has occurred, the Second Lien Collateral Trustee and
any such Second Lien Secured Party shall follow the instructions of the Priority
Lien Agent, or of the Grantors under the Priority Lien Documents to the extent
the Priority Lien Documents grant such Grantors the right to adjust or settle
such claims, with respect to such adjustment or settlement (subject to the terms
of Section 3.02, including the rights of the Second Lien Secured Parties
following expiration of the Standstill Period).

 

SECTION 3.04.         Notification of Release of Collateral. Each of the
Priority Lien Agent and the Second Lien Collateral Trustee 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;
provided, further, in the event of a Release, no such notice shall be required
to the extent any such Release occurs automatically and without any further
action by the First Priority Agent or Second Lien Collateral Trustee, as
applicable, in accordance with the terms of the applicable Secured Debt
Documents.

 

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SECTION 3.05.         No Interference; Payment Over.

 

(a)          No Interference. The Second Lien Collateral Trustee, for itself and
on behalf of each Second Lien Secured Party, agrees that each Second Lien
Secured Party (i) will not take or cause to be taken any action the purpose or
effect of which is, or could be, to make any Second Lien pari passu with, or to
give such Second Lien Secured Party any preference or priority relative to, any
Priority Lien with respect to the Collateral or any part thereof (other than
with respect to any Excess Priority Lien Obligations or any part thereof), (ii)
will not challenge or question in any proceeding the validity or enforceability
of any Priority Lien Obligations or Priority Lien Document, or the validity,
attachment, perfection or priority of any Priority Lien, or the validity or
enforceability of the priorities, rights or duties established by the provisions
of this Agreement, (iii) will not take or cause to be taken any action the
purpose or effect of which is, or could be, to interfere, hinder or delay, in
any manner, whether by judicial proceedings or otherwise, any sale, transfer or
other Disposition of the Collateral by any Priority Lien Secured Party or the
Priority Lien Agent acting on their behalf, (iv) shall have no right to (A)
direct the Priority Lien Agent or any other Priority Lien Secured Party to
exercise any right, remedy or power with respect to any Collateral or (B)
consent to the exercise by the Priority Lien Agent or any other Priority Lien
Secured Party of any right, remedy or power with respect to any Collateral, (v)
will not institute any suit or assert in any suit or Insolvency or Liquidation
Proceeding any claim against the Priority Lien Agent or other Priority Lien
Secured Party seeking damages from or other relief by way of specific
performance, instructions or otherwise with respect to, and neither the Priority
Lien Agent nor any other Priority Lien Secured Party shall be liable for, any
action taken or omitted to be taken by the Priority Lien Agent or other Priority
Lien Secured Party with respect to any Priority Lien Collateral, (vi) will not
seek, and hereby waives any right, to have any Collateral or any part thereof
marshalled upon any foreclosure or other Disposition of such Collateral, (vii)
will not attempt, directly or indirectly, whether by judicial proceedings or
otherwise, to challenge the enforceability of any provision of this Agreement,
(viii) will not object to forbearance by the Priority Lien Agent or any Priority
Lien Secured Party, and (ix) will not assert, and hereby waives, 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.

 

(b)          Payment Over. The Second Lien Collateral Trustee, for itself and on
behalf of each other Second Lien Secured Party, hereby agrees that if it shall
obtain possession of any Collateral or shall realize any proceeds or payment in
respect of any Collateral, pursuant to any Second Lien Security Document or by
the exercise of any rights available to it under applicable law or in any
Insolvency or Liquidation Proceeding or through any other exercise of remedies,
at any time prior to the Discharge of Priority Lien Obligations, then it shall
hold such Collateral, proceeds or payment in trust for the Priority Lien Agent
and the other Priority Lien Secured Parties and transfer such Collateral,
proceeds or payment, as the case may be, to the Priority Lien Agent reasonably
promptly after obtaining written notice from the Priority Lien Secured Parties
that it has possession of such Collateral or proceeds or payments in respect
thereof. Furthermore, the Second Lien Collateral Trustee shall, at the Grantors’
expense, promptly send written notice to the Priority Lien Agent upon receipt of
such Collateral, proceeds or payment and if directed by the Priority Lien Agent
within five (5) days after receipt by the Priority Lien Agent of such written
notice, shall deliver such Collateral, proceeds or payment to the Priority Lien
Agent in the same form as received, with any necessary endorsements, or as court
of competent jurisdiction may otherwise direct. The Priority Lien Agent is
hereby authorized to make any such endorsements as agent for the Second Lien
Collateral Trustee or any other Second Lien Secured Party. The Second Lien
Collateral Trustee, for itself and on behalf of each other Second Lien Secured
Party, agrees that if, at any time, it obtains written notice that all or part
of any payment with respect to any Priority Lien Obligations previously made
shall be rescinded for any reason whatsoever, it will promptly pay over to the
Priority Lien Agent any payment received by it and then in its possession or
under its direct control in respect of any such Priority Lien Collateral and
shall promptly turn any such Collateral then held by it over to the Priority
Lien Agent, and the provisions set forth in this Agreement will be reinstated as
if such payment had not been made, until the Discharge of Priority Lien
Obligations. All Second Liens will remain attached to and enforceable against
all proceeds so held or remitted, subject to the priorities set forth in this
Agreement. Anything contained herein to the contrary notwithstanding, this
Section 3.05(b) shall not apply to any proceeds of Collateral realized in a
transaction not prohibited by the Priority Lien Documents and as to which the
possession or receipt thereof by the Second Lien Collateral Trustee or any other
Second Lien Secured Party is otherwise permitted by the Priority Lien Documents.

 

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SECTION 3.06.         Purchase Option.

 

(a)          Notwithstanding anything in this Agreement to the contrary, on or
at any time after (i) the commencement of an Insolvency or Liquidation
Proceeding, (ii) the acceleration of the Priority Lien Obligations, or (iii) the
acceleration of the Second Lien Obligations, the holders of the Second Lien
Obligations and each of their respective designated Affiliates (the
“Purchasers”) will have the right, at their sole option and election (but will
not be obligated), at any time upon prior written notice to the Priority Lien
Agent, to purchase from the Priority Lien Secured Parties all (but not less than
all) Priority Lien Obligations (including unfunded commitments) that are
outstanding on the date of such purchase. Promptly following the receipt of such
notice, the Priority Lien Agent will deliver to the Purchaser Representative a
statement of the amount of the Priority Lien Obligations then outstanding and
the amount of the cash collateral requested by the Priority Lien Agent to be
delivered pursuant to Section 3.06(b)(ii) below. The right to purchase provided
for in this Section 3.06 will expire unless, within 10 Business Days after the
receipt by the Purchaser Representative of such notice from the Priority Lien
Agent, the Purchaser Representative delivers to the Priority Lien Agent an
irrevocable commitment of the Purchasers to purchase all (but not less than all)
of the Priority Lien Obligations (including unfunded commitments) and to
otherwise complete such purchase on the terms set forth under this Section 3.06.

 

(b)          On the date specified by the Purchaser Representative (on behalf of
the Purchasers) in such irrevocable commitment (which shall not be less than
five Business Days nor more than 20 Business Days, after the receipt by the
Priority Lien Agent of such irrevocable commitment), the Priority Lien Secured
Parties shall sell to the Purchasers all (but not less than all) Priority Lien
Credit Obligations (including unfunded commitments) that are outstanding on the
date of such sale, subject to any required approval of any Governmental
Authority then in effect, if any, and only if on the date of such sale, the
Priority Lien Agent receives the following:

 

(i)          payment, as the purchase price for all Priority Lien Obligations
sold in such sale, of an amount equal to the full amount of all Priority Lien
Obligations (other than outstanding letters of credit) then outstanding
(including principal, interest, fees, reasonable attorneys’ fees and legal
expenses, but excluding contingent indemnification obligations for which no
claim or demand for payment has been made at or prior to such time); provided
that in the case of Derivative Obligations that are secured by Priority Liens
the Purchasers shall cause the applicable Derivative Contract to be assigned and
novated or, if such Derivative Contract have been terminated, such purchase
price shall include an amount equal to the sum of any unpaid amounts then due in
respect of such Derivative Contract, calculated using the market quotation
method and after giving effect to any netting arrangements;

 

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(ii)         a cash collateral deposit or back-to-back letter of credit from an
issuing bank reasonably acceptable to the Priority Lien Agent (which such cash
collateralization or back-to-back letters of credit shall be in such amount as
the Priority Lien Agent determines is reasonably necessary to secure the payment
of any outstanding letters of credit constituting Priority Lien Obligations that
may become due and payable after such sale (but not in any event in an amount
greater than one hundred four percent (104%) of the amount then reasonably
estimated by the Priority Lien Agent to be the aggregate outstanding amount of
such letters of credit at such time), which cash collateral or back-to-back
letter of credit shall be (A) held by the Priority Lien Agent as security solely
to reimburse the issuers of such letters of credit that become due and payable
after such sale and any fees and expenses incurred in connection with such
letters of credit and (B) returned to the Purchaser Representative (except as
may otherwise be required by applicable law or any order of any court or other
Governmental Authority) promptly after the expiration or termination from time
to time of all payment contingencies affecting such letters of credit; and

 

(iii)        any agreements, documents or instruments which the Priority Lien
Agent may reasonably request pursuant to which the Purchaser Representative and
the Purchasers in such sale expressly assume and adopt all of the obligations of
the Priority Lien Agent and the Priority Lien Secured Parties under the Priority
Lien Documents on and after the date of the purchase and sale and the Purchaser
Representative (or any other representative appointed by the Purchaser(s)
holding a majority in aggregate principal amount of the Second Lien Obligations
held by Purchasers then outstanding) becomes a successor agent thereunder.

 

(c)          Such purchase of the Priority Lien Obligations shall be made on a
pro rata basis among the holders of Second Lien Obligations (and their
respective designated Affiliates) giving notice by the time required by the
Second Lien Collateral Agent to the Priority Lien Agent and Second Lien
Collateral Agent of their interest to exercise the purchase option hereunder
according to each such holder’s portion of the Second Lien Obligations
outstanding on the date of purchase (any holder of Second Lien Obligations
giving such notice, an “Accepting Holder” and any holder of Second Lien
Obligations not giving such notice, a “Declining Second Lien Holder”); provided,
however, Accepting Holders shall have the right to purchase any amounts not
purchased by the Declining Second Lien Holders in such amounts and in such
proportions as the Second Lien Collateral Agent (at the written direction of
holders of at least 50.1% of the outstanding principal amount of the Second Lien
Debt) shall select. Such purchase price and cash collateral shall be remitted by
wire transfer in federal funds to such bank account of the Priority Lien Agent
as the Priority Lien Agent may designate in writing to the Purchaser
Representative for such purpose. Interest shall be calculated to but excluding
the Business Day on which such sale occurs if the amounts so paid by the
Purchaser Representative and holders of the Second Lien Obligations to the bank
account designated by the Priority Lien Agent are received in such bank account
prior to 12:00 noon, New York City time, and interest shall be calculated to and
including such Business Day if the amounts so paid by the Purchaser
Representative and holders of the Second Lien Obligations to the bank account
designated by the Priority Lien Agent are received in such bank account later
than 12:00 noon, New York City time.

 

25

 

  

(d)          Such sale shall be expressly made without representation or
warranty of any kind by the Priority Lien Secured Parties as to the Priority
Lien Obligations, the Collateral or otherwise and without recourse to any
Priority Lien Secured Party, except that the Priority Lien Secured Parties shall
represent and warrant severally as to the Priority Lien Obligations then owing
to it: (i) that such applicable Priority Lien Secured Party own such Priority
Lien Obligations; and (ii) that such applicable Priority Lien Secured Party has
the necessary corporate or other governing authority to assign such interests.

 

(e)          After such sale becomes effective, the outstanding letters of
credit, will remain enforceable against the issuers thereof and will remain
secured by the Priority Liens upon the Collateral in accordance with the
applicable provisions of the Priority Lien Documents as in effect immediately
prior to the exercise of the purchase option under this Section 3.06, and the
issuers of letters of credit will remain entitled to the benefit of the Priority
Liens upon the Collateral and sharing rights in the proceeds thereof in
accordance with the provisions of the Priority Lien Documents as in effect
immediately prior to the exercise of the purchase option under this Section
3.06, as fully as if the sale of the Priority Lien Obligations had not been
made, but only the Person or successor agent to whom the Priority Liens are
transferred in such sale will have the right to foreclose upon or otherwise
enforce the Priority Liens and only the Purchasers in the sale will have the
right to direct such Person or successor as to matters relating to the
foreclosure or other enforcement of the Priority Liens.

 

Article IV
OTHER AGREEMENTS

 

SECTION 4.01.         Release of Liens; Automatic Release of Second Liens;
Supplemental Liens.

 

(a)          The Second Lien Collateral Trustee, for itself and on behalf of
each other Second Lien Secured Party, agrees that, in the event the Priority
Lien Secured Parties release their Lien on any Collateral, the Second Lien on
such Collateral shall terminate and be released automatically and without
further action if (i) such release is effected in connection with the Priority
Lien Agent’s foreclosure upon, or other exercise of rights or remedies with
respect to, such Collateral (including by way of a Disposition of all of the
Capital Stock of the relevant Grantor owning such Collateral), (ii) such release
is permitted under Section 4.10 of the Indenture (or any similar provision of
any other Second Lien Documents) or (iii) such release is being made in
connection with the expiration of the rights of the respective Grantor under an
oil and/or gas lease in the ordinary course of business; provided that, in the
case of each of clauses (i)-(iii) above, the Second Liens on such Collateral
shall remain in place (and shall remain subject and subordinate to all Priority
Liens securing Priority Lien Obligations in accordance with this Agreement) with
respect to any proceeds of a sale, transfer or other Disposition of Collateral
not paid to the Priority Lien Secured Parties or that remain after the Discharge
of Priority Lien Obligations. Notwithstanding the foregoing, in the event of
release of Priority Liens by the Priority Lien Secured Parties on all or
substantially all of the Collateral (other than when such release occurs in
connection with the Priority Lien Secured Parties’ foreclosure upon or other
exercise of rights and remedies with respect to such Collateral), no release of
the Second Lien on such Collateral shall be made unless (A) consent to the
release of such Second Liens has been given by the requisite percentage or
number of the Second Lien Secured Parties at the time outstanding as provided
for in the applicable Second Lien Documents and (B) the Parent Company has
delivered an Officers’ Certificate to the Priority Lien Agent and the Second
Lien Collateral Trustee certifying that all such consents have been obtained.

 

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(b)          The Second Lien Collateral Trustee agrees to execute and deliver
(at the sole cost and expense of the Grantors) all such releases and other
instruments as shall reasonably be requested by the Priority Lien Agent to
evidence and confirm any release of Collateral provided for in this Section
4.01.

 

(c)          If at any time the Second Lien Collateral Trustee, or holders of at
least 50.1% of the principal amount of Second Lien Debt outstanding, shall
determine that additional Collateral is required to be delivered under the
Second Lien Documents to secure the obligations owing to the Second Lien Secured
Parties, the Second Lien Collateral Trustee or such holders may inform the
Priority Lien Agent of such determination and request that the Priority Lien
Agent negotiate and obtain such additional Collateral for the benefit of the
Secured Parties in accordance with this Agreement; provided, that if the
Priority Lien Agent shall not have obtained such additional Collateral within 60
days following receipt of such request, or prior to expiry of such 60-day period
shall have informed the Second Lien Collateral Trustee or such holders (as the
case may be) that it has elected to not pursue obtaining such additional
Collateral, the Second Lien Collateral Trustee or such holders may take actions
directly to acquire such Collateral for the benefit of the Secured Parties in
accordance with this Agreement.

 

SECTION 4.02.         Certain Agreements With Respect to Insolvency or
Liquidation Proceedings.

 

(a)          This Agreement shall continue in full force and effect,
notwithstanding the commencement of any Insolvency or Liquidation Proceeding by
or against any Borrower or any subsidiary of the Parent Company.

 

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(b)          If the Parent Company or any of its subsidiaries shall become
subject to any Insolvency or Liquidation Proceeding and shall, as
debtor(s)-in-possession, move for approval of financing (“DIP Financing”) to be
provided by one or more lenders (the “DIP Lenders”) under Section 364 of the
Bankruptcy Code or the use of cash collateral under Section 363 of the
Bankruptcy Code, the Second Lien Collateral Trustee, for itself and on behalf of
each Second Lien Secured Party, agrees that neither it nor any other Second Lien
Secured Party will raise any objection, contest or oppose, and each Second Lien
Secured Party will waive any claim such Person may now or hereafter have, to any
such financing or to the Liens on the Collateral securing the same (“DIP
Financing Liens”), or to any use of cash collateral that constitutes Collateral
or to any grant of administrative expense priority under Section 364 of the
Bankruptcy Code, unless (i) the Priority Lien Agent or the Priority Lien Secured
Parties oppose or object to such DIP Financing or such DIP Financing Liens or
such use of cash collateral, (ii) such DIP Financing Liens are neither senior
to, nor rank pari passu with, the Priority Liens upon any property of the estate
in such Insolvency or Liquidation Proceeding or (iii) the maximum principal
amount of indebtedness permitted under such DIP Financing exceeds the sum of (x)
the amount of Priority Lien Obligations refinanced with the proceeds thereof and
(y) the greater of (A) $150,000,000 and (B) 15% of the amount of the Priority
Lien Principal Obligations outstanding at the time of such Insolvency or
Liquidation Proceeding. To the extent such DIP Financing Liens are senior to, or
rank pari passu with, the Priority Liens, the Second Lien Collateral Trustee
will, for itself and on behalf of the other Second Lien Secured Parties,
subordinate the Second Liens on the Collateral to the Priority Liens and to such
DIP Financing Liens, so long as the Second Lien Collateral Trustee, on behalf of
the Second Lien Secured Parties, retains Liens on all the Collateral, including
proceeds thereof arising after the commencement of any Insolvency or Liquidation
Proceeding, with the same priority as existed prior to the commencement of the
case under the Bankruptcy Code.

 

(c)          Without the consent of the Priority Lien Agent, the Second Lien
Collateral Trustee, for itself and on behalf of each Second Lien Secured Party,
agrees not to propose, support or enter into any DIP Financing, if the effect of
such DIP Financing would be that the Second Lien Obligations would no longer be
subordinated to the Priority Lien Obligations in the manner set forth in this
Agreement, or the Second Lien Secured Parties would recover any payments they
are not otherwise entitled to under this Agreement, including by way of adequate
protection.

 

(d)          The Second Lien Collateral Trustee, for itself and on behalf of
each Second Lien Secured Party, agrees that it will not object to, oppose or
contest (or join with or support any third party objecting to, opposing or
contesting) a sale or other Disposition of any Collateral (or any portion
thereof) under Section 363 of the Bankruptcy Code or any other provision of the
Bankruptcy Code if the Priority Lien Secured Parties shall have consented to
such sale or Disposition of such Collateral and all Priority Liens and Second
Liens will attach to the proceeds of the sale in the same respective priorities
as set forth in this Agreement.

 

(e)          The Second Lien Collateral Trustee, for itself and on behalf of
each other Second Lien Secured Party, waives any claim that may be had against
the Priority Lien Agent or any other Priority Lien Secured Party arising out of
any DIP Financing Liens (granted in a manner that is consistent with this
Agreement) or administrative expense priority under Section 364 of the
Bankruptcy Code.

 

(f)          The Second Lien Collateral Trustee, for itself and on behalf of
each other Second Lien Secured Party, agrees that neither the Second Lien
Collateral Trustee nor any other Second Lien Secured Party will file or
prosecute in any Insolvency or Liquidation Proceeding any motion for adequate
protection (or any comparable request for relief) based upon their interest in
the Collateral, nor object to, oppose or contest (or join with or support any
third party objecting to, opposing or contesting) (i) any request by the
Priority Lien Agent or any other Priority Lien Secured Party for adequate
protection or (ii) any objection by the Priority Lien Agent or any other
Priority Lien Secured Party to any motion, relief, action or proceeding based on
the Priority Lien Agent or Priority Lien Secured Parties claiming a lack of
adequate protection, except that the Second Lien Secured Parties may:

 

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(i)          freely seek and obtain relief granting a Second Lien co-extensive
in all respects with, but subordinated (as set forth in Section 2.01) to, all
Liens granted in the Insolvency or Liquidation Proceeding to, or for the benefit
of, the Priority Lien Secured Parties;

 

(ii)         freely seek and obtain relief granting a superpriority claim
co-extensive in all respects with (but junior to) any such claims granted in the
Insolvency or Liquidation Proceeding to or for the benefit of the Priority Lien
Secured Parties and relating to the Collateral, provided, that any payments or
proceeds in respect of such superpriority claim shall be considered proceeds of
Collateral for purposes of Section 3.05(b); and

 

(iii)        freely seek and obtain any relief upon a motion for adequate
protection (or any comparable relief), without any condition or restriction
whatsoever, at any time after the Discharge of Priority Lien Obligations.

 

(g)          The Second Lien Collateral Trustee, for itself and on behalf of
each of the other of the Second Lien Secured Parties, waives any claim the
Second Lien Collateral Trustee or any such other Second Lien Secured Party may
now or hereafter have against the Priority Lien Agent or any other Priority Lien
Secured Party (or their representatives) arising out of any election by the
Priority Lien Agent or any Priority Lien Secured Parties, in any proceeding
instituted under the Bankruptcy Code, of the application of Section 1111(b) of
the Bankruptcy Code.

 

(h)          The Second Lien Collateral Trustee, for itself and on behalf of
each other Second Lien Secured Party, agrees that in any Insolvency or
Liquidation Proceeding, neither the Second Lien Collateral Trustee nor any other
Second Lien Secured Party shall support or vote for any plan of reorganization
or disclosure statement of the Parent Company or any other Grantor unless (i)
such plan is accepted by the class of Priority Lien Secured Parties in
accordance with Section 1126(c) of the Bankruptcy Code or otherwise provides for
the payment in full in cash of all Priority Lien Obligations (including all
post-petition interest, fees and expenses) on the effective date of such plan of
reorganization, or (ii) such plan provides on account of the Priority Lien
Secured Parties for the retention by the Priority Lien Agent, for the benefit of
the Priority Lien Secured Parties, of the Liens on the Collateral securing the
Priority Lien Obligations, and on all proceeds thereof, and such plan also
provides that any Liens retained by, or granted to, the Second Lien Collateral
Trustee are only on property securing the Priority Lien Obligations and shall
have the same relative priority with respect to the Collateral or other
property, respectively, as provided in this Agreement with respect to the
Collateral, and to the extent such plan provides for deferred cash payments, or
for the distribution of any other property of any kind or nature, on account of
the Priority Lien Obligations or the Second Lien Obligations, such plan provides
that any such deferred cash payments or other distributions in respect of the
Second Lien Obligations shall be delivered to the Priority Lien Agent and
distributed in accordance with the priorities provided in this Agreement. Except
as provided herein, the Second Lien Secured Parties shall remain entitled to
vote their claims in any such Insolvency or Liquidation Proceeding.

 

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(i)          The Second Lien Collateral Trustee, for itself and on behalf of
each other Second Lien Secured Party, hereby agrees that until the Discharge of
Priority Lien Obligations has occurred, neither Second Lien Collateral Trustee
nor any Second Lien Secured Party shall seek relief, pursuant to Section 362(d)
of the Bankruptcy Code or otherwise, from the automatic stay of Section 362(a)
of the Bankruptcy Code or from any other stay in any Insolvency or Liquidation
Proceeding in respect of the Collateral, without the prior written consent of
the Priority Lien Agent.

 

(j)          The Second Lien Collateral Trustee, for itself and on behalf of
each other Second Lien Secured Party, agrees that neither Second Lien Collateral
Trustee nor any other Second Lien Secured Party shall oppose or seek to
challenge any claim by the Priority Lien Agent or any other Priority Lien
Secured Party for allowance or payment in any Insolvency or Liquidation
Proceeding of Priority Lien Obligations consisting of post-petition interest,
fees or expenses to the extent of the value of the Priority Liens (it being
understood that such value will be determined without regard to the existence of
the Second Liens on the Collateral). Neither Priority Lien Agent nor any other
Priority Lien Secured Party shall oppose or seek to challenge any claim by the
Second Lien Collateral Trustee or any other Second Lien Secured Party for
allowance or payment in any Insolvency or Liquidation Proceeding of Second Lien
Obligations consisting of post-petition interest, fees or expenses to the extent
of the value of the Second Liens on the Collateral; provided that if the
Priority Lien Agent or any other Priority Lien Secured Party shall have made any
such claim, such claim (i) shall have been approved or (ii) will be approved
contemporaneously with the approval of any such claim by the Second Lien
Collateral Trustee or any Second Lien Secured Party.

 

(k)          So long as the Discharge of Priority Lien Obligations has not
occurred, without the express written consent of the Priority Lien Agent,
neither Second Lien Collateral Trustee nor any other Second Lien Secured Party
shall (or shall join with or support any third party in opposing, objecting to
or contesting, as the case may be), in any Insolvency or Liquidation Proceeding
involving any Grantor, (i) oppose, object to or contest the determination of the
extent of any Liens held by any of Priority Lien Secured Party or the value of
any claims of any such holder under Section 506(a) of the Bankruptcy Code or
(ii) oppose, object to or contest the payment to the Priority Lien Secured Party
of interest, fees or expenses under Section 506(b) of the Bankruptcy Code.

 

(l)          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
Lien Collateral Trustee for itself and on behalf of each other Second Lien
Secured Party, agrees 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 Lien Secured Parties or
any proceeds thereof shall (for so long as the Discharge of Priority Lien
Obligations has not occurred) be segregated and held in trust and forthwith paid
over to the Priority Lien Agent for the benefit of the Priority Lien Secured
Parties in the same form as received without recourse, representation or
warranty (other than a representation of the Second Lien Collateral Trustee 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 Priority Lien Obligations occurs, the Second Lien Collateral
Trustee, for itself and on behalf of each other Second Lien Secured Party,
hereby appoints the Priority Lien Agent, and any officer or agent of the
Priority Lien Agent, with full power of substitution, the attorney-in-fact of
each Second Lien Secured Party for the limited purpose of carrying out the
provisions of this Section 4.02(1) and taking any action and executing any
instrument that the Priority Lien Agent may deem necessary or advisable to
accomplish the purposes of this Section 4.02(1), which appointment is
irrevocable and coupled with an interest.

 

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SECTION 4.03.         Reinstatement. If any Priority Lien Secured Party is
required in any Insolvency or Liquidation Proceeding or otherwise to turn over
or otherwise pay to the estate of any Grantor any amount (a “Recovery”) for any
reason whatsoever, then the Priority Lien Obligations shall be reinstated to the
extent of such Recovery and the Priority Lien Secured Parties shall be entitled
to a reinstatement of Priority Lien Obligations with respect to all such
recovered amounts. The Second Lien Collateral Trustee, for itself and on behalf
of each other Second Lien Secured Party, agrees that if, at any time, it
receives notice of any Recovery, the Second Lien Collateral Trustee or such
other Second Lien Secured Party shall promptly pay over to the Priority Lien
Agent any payment received by it and then in its possession or under its control
in respect of any Collateral subject to any Priority Lien securing such Priority
Lien Obligations and shall promptly turn any Collateral subject to any such
Priority Lien then held by it over to the Priority Lien Agent, and the
provisions set forth in this Agreement shall be reinstated as if such payment
had not been made, until the Discharge of Priority Lien Obligations. If this
Agreement shall have been terminated prior to such Recovery, this Agreement
shall be reinstated in full force and effect, and such prior termination shall
not diminish, release, discharge, impair or otherwise affect the obligations of
the parties hereto from such date of reinstatement. Any amounts received by the
Second Lien Collateral Trustee or any other Second Lien Secured Party and then
in its possession or under its control on account of the Second Lien Obligations
after the termination of this Agreement shall, in the event of a reinstatement
of this Agreement pursuant to this Section 4.03, be held in trust for and paid
over to the Priority Lien Agent for the benefit of the Priority Lien Secured
Parties for application to the reinstated Priority Lien Obligations until the
discharge thereof. This Section 4.03 shall survive termination of this
Agreement.

 

SECTION 4.04.         Amendments, Refinancings and Additional Debt.

 

(a)          The Priority Credit Agreement may be amended, modified,
supplemented or Replaced by any Priority Substitute Facility without notice to,
or the consent of, any Secured Party, all without affecting the Lien priorities
provided for herein or the other provisions hereof, subject to compliance with
the Interest Rate Priority Cap and such of the other Credit Facility Criteria as
may then be applicable (excluding, by way of example and without limitation, any
requirement to evaluate whether then-outstanding Priority Lien Principal
Obligations are in accordance with the Priority Lien Cap as then in effect,
which shall not be required except and to the extent so provided in Section
4.04(b) below) as of the date of such amendment, modification, supplement or
Replacement; provided, however, that as between the Second Lien Secured Parties
and the Grantors, this Section 4.04(a) shall not be deemed consent by any Second
Lien Secured Party to the incurrence by any Grantor of obligations or
indebtedness that are not permitted under the applicable Second Lien Documents.

 

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(b)          The outstanding Priority Lien Obligations and the Second Lien
Obligations may be increased in accordance with the respective terms of the
Priority Lien Documents and the Second Lien Documents, or Replaced by any
Priority Substitute Facility or Second Lien Substitute Facility in accordance
with the respective terms of the respective Priority Lien Documents and the
Second Lien Documents under which such increase is being made or which is being
Replaced, without notice to, or the consent of any Secured Party, all without
affecting the Lien priorities provided for herein or the other provisions
hereof; provided, that:

 

(i) in the case only of a Replacement of the Priority Credit Agreement, any
Priority Substitute Facility, the Indenture or any Second Lien Substitute
Facility, the Second Lien Collateral Trustee and the Priority Lien Agent shall
receive on or prior to the first incurrence of Secured Debt under such
Replacement Priority Substitute Facility or Second Lien Substitute Facility (y)
an Officers’ Certificate from the Parent Company stating that (A) such
incurrence is permitted by each applicable Secured Debt Document then
outstanding, or to the extent a consent is otherwise required to permit the
Replacement under any Secured Debt Document the Grantors have obtained the
requisite consent, and (B) the requirements of Section 4.06 have been satisfied,
and (z) a Lien Sharing and Priority Confirmation Joinder from the holders or
lenders of any indebtedness that Replaces the Priority Lien Obligations or the
Second Lien Obligations (or an authorized agent, trustee or other representative
on their behalf),

 

(ii) in the case of an increase in the aggregate outstanding Priority Lien
Principal Obligations (whether or not arising from a Replacement), such
aggregate outstanding amount (after giving effect to such increase), shall not
exceed clause (a) of the Priority Lien Cap as of such date of incurrence, and

 

(iii) in the case only of a Priority Substitute Facility or Second Lien
Substitute Facility (whether additional to or as a Replacement of any
theretofore-outstanding Secured Obligations), on or before the date of the first
incurrence of Secured Debt thereunder, such Priority Substitute Facility or
Second Lien Substitute Facility is designated by the Parent Company, in an
Officers’ Certificate delivered to the Priority Lien Agent and the Second Lien
Collateral Trustee, as “Priority Lien Obligations” or “Second Lien Obligations”,
as applicable, for the purposes of the Secured Debt Documents and this
Agreement; provided that no Series of Secured Debt may be designated as both
Priority Lien Obligations and Second Lien Obligations.

 

(c)          Each of the then-existing Priority Lien Agent and the Second Lien
Collateral Trustee shall be authorized to execute and deliver such documents and
agreements (including amendments or supplements to this Agreement) as such
holders, lenders, agent, trustee or other representative may reasonably request
to give effect to such Replacement, it being understood that the Priority Lien
Agent and the Second Lien Collateral Trustee, without the consent of any other
Secured Party, may amend, supplement, modify or restate this Agreement to the
extent necessary or appropriate to facilitate such amendments or supplements to
effect such Replacement, all at the expense of the Grantors. Upon the
consummation of such Replacement and the execution and delivery of the documents
and agreements contemplated in the preceding sentence, the holders or lenders of
such indebtedness and any authorized agent, trustee or other representative
thereof shall be entitled to the benefits of this Agreement.

 

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(d)          The Parent Company will be permitted to designate as an additional
holder of Second Lien Obligations hereunder each Person who is, or who becomes,
the registered holder of Second Lien Debt incurred by either or both such
Issuers and/or Borrower after the date of this Agreement in accordance with the
terms of all applicable Secured Debt Documents. The Parent Company may effect
such designation by delivering to the Second Lien Collateral Trustee and the
Priority Lien Agent, each of the following:

 

(i)          an Officers’ Certificate stating that either or both such Issuers
and/or Borrower intends to incur Additional Second Lien Obligations which will
be Second Lien Debt permitted by each applicable Secured Debt Document to be
incurred and secured by a Second Lien equally and ratably with all previously
existing and future Second Lien Debt; and

 

(ii)         an authorized agent, trustee or other representative on behalf of
the holders or lenders of any Additional Second Lien Obligations must be
designated as an additional holder of Secured Obligations hereunder and must,
prior to such designation, sign and deliver on behalf of the holders or lenders
of such Additional Second Lien Obligations a Lien Sharing and Priority
Confirmation Joinder, and, to the extent necessary or appropriate to facilitate
such transaction, a new intercreditor agreement substantially similar to this
Agreement, as in effect on the date hereof.

 

(e)          Notwithstanding the foregoing, nothing in this Agreement will be
construed to allow any Grantor to incur additional indebtedness unless otherwise
permitted by the terms of each applicable Secured Debt Document. Promptly
following the recordation or filing thereof, the Parent Company shall deliver to
the Second Lien Collateral Trustee and the Priority Lien Agent copies of all
relevant filings and recordations deemed necessary by the Parent Company and the
holder of such Additional Second Lien Obligations, or its Secured Debt
Representative, to ensure that the Additional Second Lien Obligations are
secured by the Collateral in accordance with the Second Lien Security Documents.

 

SECTION 4.05.         Amendments. Without the prior written consent of the
Priority Lien Agent, no Second Lien Document may be amended, supplemented,
restated or otherwise modified and/or refinanced or entered into to the extent
such amendment, supplement, restatement or modification and/or refinancing, or
the terms of any new Second Lien Document, would contravene the provisions of
this Agreement. Without the prior written consent of the Second Lien Collateral
Trustee, no Priority Lien Document may be amended, supplemented, restated or
otherwise modified and/or refinanced or entered into to the extent such
amendment, supplement, restatement or modification and/or refinancing, or the
terms of any new Priority Lien Document, would contravene the provisions of this
Agreement.

 

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SECTION 4.06.         Legends. The Second Lien Collateral Trustee acknowledges
with respect to (a) the Indenture and the Indenture Second Lien Security
Documents, and (b) the Additional Second Lien Debt Facility and the Additional
Second Lien Security Documents, that the Indenture, the Additional Second Lien
Debt Facility (if any) and the Second Lien Documents (other than control
agreements to which both the Priority Lien Agent and the Second Lien Collateral
Trustee are parties) and each associated Security Document (other than control
agreements to which both the Priority Lien Agent and the Second Lien Collateral
Trustee are parties) granting any security interest in the Collateral will
contain the appropriate legend set forth on Annex I.

 

SECTION 4.07.         Second Lien Secured Parties Rights as Unsecured Creditors;
Judgment Lien Creditor. Both before and during an Insolvency or Liquidation
Proceeding, any of the Second Lien Secured Parties may take any actions and
exercise any and all rights that would be available to a holder of unsecured
claims, including, without limitation, the commencement of an Insolvency or
Liquidation Proceeding against any Grantor in accordance with applicable law;
provided, that the Second Lien Secured Parties may not take any of the actions
prohibited by Section 3.05(a) or Section 4.02; provided, further, that in the
event that any of the Second Lien Secured Parties becomes a judgment lien
creditor in respect of any Collateral as a result of its enforcement of its
rights as an unsecured creditor with respect to the Second Lien Obligations,
such judgment lien shall be subject to the terms of this Agreement for all
purposes (including in relation to the Priority Lien Obligations) as the Second
Liens are subject to this Agreement.

 

SECTION 4.08.         Postponement of Subrogation. The Second Lien Collateral
Trustee, for itself and on behalf of each other Second Lien Secured Party,
agrees that no payment or distribution to any Priority Lien Secured Party
pursuant to the provisions of this Agreement shall entitle any Second Lien
Secured Party to exercise any rights of subrogation in respect thereof until the
Discharge of Priority Lien Obligations shall have occurred. Following the
Discharge of Priority Lien Obligations, but subject to the reinstatement as
provided in Section 4.03, each Priority Lien Secured Party will execute such
documents, agreements, and instruments as any Second Lien Secured Party may
reasonably request to evidence the transfer by subrogation to any such Person of
an interest in the Priority Lien Obligations resulting from payments or
distributions to such Priority Lien 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 Priority Lien Secured Party are paid by
such Person upon request for payment thereof.

 

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Article V
Gratuitous Bailment for Perfection of Certain Security Interests

 

SECTION 5.01.         General. The Priority Lien Agent agrees that if it shall
at any time hold a Priority Lien on any Collateral that can be perfected 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 Priority Lien Agent, the Priority Lien
Agent will serve as gratuitous bailee for the Second Lien Collateral Trustee for
the sole purpose of perfecting the Second Lien of the Second Lien Collateral
Trustee on such Collateral. It is agreed that the obligations of the Priority
Lien Agent and the rights of the Second Lien Collateral Trustee and the other
Second Lien Secured Parties in connection with any such bailment arrangement
will be in all respects subject to the provisions of Article II. Notwithstanding
anything to the contrary herein, the Priority Lien Agent will be deemed to make
no representation as to the adequacy of the steps taken by it to perfect the
Second Lien on any such Collateral and shall have no responsibility, duty,
obligation or liability to the Second Lien Collateral Trustee or other Second
Lien Secured Party or any other Person for such perfection or failure to
perfect, it being understood that the sole purpose of this Article is to enable
the Second Lien Secured Parties to obtain a perfected Second Lien in such
Collateral to the extent, if any, that such perfection results from the
possession or control of such Collateral or any such account by the Priority
Lien Agent. The Priority Lien Agent acting pursuant to this Section 5.01 shall
not have by reason of the Priority Lien Security Documents, the Second Lien
Security Documents, this Agreement or any other document or theory, a fiduciary
relationship in respect of any Priority Lien Secured Party, the Second Lien
Collateral Trustee or any Second Lien Secured Party. Subject to Section 4.03,
from and after the Discharge of Priority Lien Obligations, the Priority Lien
Agent shall take all such actions in its power as shall reasonably be requested
by the Second Lien Collateral Trustee (at the sole cost and expense of the
Grantors) to transfer possession or control of such Collateral or any such
account (in each case to the extent the Second Lien Collateral Trustee has a
Lien on such Collateral or account after giving effect to any prior or
concurrent releases of Liens) to the Second Lien Collateral Trustee for the
benefit of all Second Lien Secured Parties.

 

SECTION 5.02.         Accounts. To the extent that any Account is at any time
under the control of the Priority Lien Agent (within the meaning of the term
“control” as relates to Accounts under Articles 8 and 9 of the Uniform
Commercial Code as in effect in the State of New York) as part of the
Collateral, the Priority Lien Agent will act as gratuitous bailee for the Second
Lien Collateral Trustee for the purpose of perfecting the Liens of the Second
Lien Secured Parties in such Accounts and the financial assets therein as
provided in Section 3.01 (but will have no duty, responsibility or obligation to
the Second Lien Secured Parties (including, without limitation, any duty,
responsibility or obligation as to the maintenance of such control, the effect
of such arrangement or the establishment of such perfection) except as set forth
in the last sentence of this Section). Unless the Second Liens on such
Collateral shall have been or concurrently are released, after the occurrence of
Discharge of Priority Lien Obligations, the Priority Lien Agent shall, at the
request of the Second Lien Collateral Trustee, cooperate with the Grantors and
the Second Lien Collateral Trustee (at the expense of the Grantors) in
permitting control of any Accounts to be transferred to the Second Lien
Collateral Trustee (or for other arrangements with respect to such Accounts
satisfactory to the Second Lien Collateral Trustee to be made).

 

Article VI
Application of Payments; Determination of Amounts

 

SECTION 6.01.         Application of Payments. All payments received by the
Priority Lien Agent or the other Priority Lien Secured Parties may be applied,
reversed and reapplied, in whole or in part, to such part of the Priority Lien
Obligations as the Priority Lien Secured Parties, in their sole discretion, deem
appropriate, subject to the terms of the Priority Lien Documents.

 

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SECTION 6.02.         Determination of Amounts. Whenever a Secured Debt
Representative shall be required, in connection with the exercise of its rights
or the performance of its obligations hereunder, to determine the existence or
amount of any Priority Lien Obligations (or the existence of any commitment to
extend credit that would constitute Priority Lien Obligations) or Second Lien
Obligations, or the existence of any Lien securing any such obligations, or the
Collateral subject to any such Lien, it may request that such information be
furnished to it in writing by the other Secured Debt Representative and shall be
entitled to make such determination on the basis of the information so
furnished; provided, however, that if a Secured Debt Representative shall fail
or refuse reasonably promptly to provide the requested information, the
requesting Secured Debt Representative shall be entitled to make any such
determination by such method as it may, in the exercise of its good faith
judgment, determine, including by reliance upon a certificate of the Parent
Company. Each Secured Debt Representative may rely conclusively, and shall be
fully protected in so relying, on any determination made by it in accordance
with the provisions of the preceding sentence (or as otherwise directed by a
court of competent jurisdiction) and shall have no liability to the Parent
Company or any of its subsidiaries, any Secured Party or any other Person as a
result of such determination.

 

Article VII
No Reliance; No Liability; Obligations Absolute; Consent of Grantors; Etc.

 

SECTION 7.01.         No Reliance; Information. The Priority Lien Secured
Parties and the Second Lien Secured Parties shall have no duty to disclose to
any Second Lien Secured Party or to any Priority Lien Secured Party,
respectively, any information relating to the Parent Company or any of the other
Grantors, or any other circumstance bearing upon the risk of nonpayment of any
of the Priority Lien Obligations or the Second Priority Obligations, as the case
may be, that is known or becomes known to any of them or any of their
Affiliates. In the event any Priority Lien Secured Party or any Second Lien
Secured Party, in its sole discretion, undertakes at any time or from time to
time to provide any such information to, respectively, any Second Lien Secured
Party or any Priority Lien 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.

 

SECTION 7.02.         No Warranties or Liability. The Priority Lien Agent, for
itself and on behalf of the other Priority Lien Secured Parties, acknowledges
and agrees that, except for the representations and warranties set forth in
Article VIII, neither the Second Lien Collateral Trustee nor any other Second
Lien Secured Party has made any express or implied representation or warranty,
including with respect to the execution, validity, legality, completeness,
collectability or enforceability of any of the Second Lien Documents, the
ownership of any Collateral or the perfection or priority of any Liens thereon.
The Second Lien Collateral Trustee, for itself and on behalf of the other Second
Lien Secured Parties, acknowledges and agrees that, except for the
representations and warranties set forth in Article VIII, neither the Priority
Lien Agent nor any other Priority Lien Secured Party has made any express or
implied representation or warranty, including with respect to the execution,
validity, legality, completeness, collectability or enforceability of any of the
Priority Lien Documents, the ownership of any Collateral or the perfection or
priority of any Liens thereon.

 

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(a)          The Second Lien Collateral Trustee and the other Second Lien
Secured Parties shall have no express or implied duty to the Priority Lien Agent
or any other Priority Lien Secured Party, and the Priority Lien Agent and the
other Priority Lien Secured Parties shall have no express or implied duty to the
Second Lien Collateral Trustee or any other Second Lien 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 Priority Lien Document
and any Second Lien Document (other than, in each case, this Agreement),
regardless of any knowledge thereof which they may have or be charged with.

 

(b)          The Second Lien Collateral Trustee, for itself and on behalf each
other Second Lien Secured Party, hereby waives any claim that may be had against
the Priority Lien Agent or any other Priority Lien Secured Party arising out of
any actions which the Priority Lien Agent or such Priority Lien Secured Party
takes or omits to take (including actions with respect to the creation,
perfection or continuation of Liens on any Collateral, actions with respect to
the foreclosure upon, sale, release or depreciation of, or failure to realize
upon, any Collateral, and actions with respect to the collection of any claim
for all or only part of the Priority Lien Obligations from any account debtor,
guarantor or any other party) in accordance with this Agreement and the Priority
Lien Documents or the valuation, use, protection or release of any security for
such Priority Lien Obligations in accordance with this Agreement and the
Priority Lien Documents.

 

SECTION 7.03.         Obligations Absolute. The Lien priorities provided for
herein and the respective rights, interests, agreements and obligations
hereunder of the Priority Lien Agent and the other Priority Lien Secured Parties
and the Second Lien Collateral Trustee and the other Second Lien Secured Parties
shall remain in full force and effect irrespective of:

 

(a)          any lack of validity or enforceability of any Secured Debt
Document;

 

(b)          any change in the time, place or manner of payment of, or in any
other term of (including the Replacing of), all or any portion of the Priority
Lien Obligations, it being specifically acknowledged that a portion of the
Priority Lien Obligations 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 amendment, waiver or other modification, whether by course of
conduct or otherwise, of any Secured Debt Document;

 

(d)          the securing of any Priority Lien Obligations or Second Lien
Obligations 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
Priority Lien Obligations or Second Lien Obligations;

 

(e)          the commencement of any Insolvency or Liquidation Proceeding in
respect of the Parent Company or any other Grantor; or

 

(f)          any other circumstances that otherwise might constitute a defense
available to, or a discharge of, the Parent Company or any other Grantor in
respect of the Priority Lien Obligations or this Agreement, or any of the Second
Lien Secured Parties in respect of this Agreement.

 

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SECTION 7.04.         Grantors Consent. Each Grantor hereby consents to the
provisions of this Agreement and the intercreditor arrangements provided for
herein and agrees that the obligations of the Grantors under the Secured Debt
Documents will in no way be diminished or otherwise affected by such provisions
or arrangements (except as expressly provided 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 enter into and perform its obligations under this
Agreement.

 

(b)          This Agreement has been duly executed and delivered by such party.

 

(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 of which the failure to
obtain could reasonably be expected to have a Material Adverse Effect, (ii) will
not violate any applicable law or regulation or any order of any Governmental
Authority or any indenture, agreement or other instrument binding upon such
party which could reasonably be expected to have a Material Adverse Effect and
(iii) will not violate the charter, by-laws or other organizational documents of
such party.

 

SECTION 8.02.         Representations and Warranties of Each Representative.
Each of the Second Lien Collateral Trustee and the Priority Lien Agent
represents and warrants to the other parties hereto that it is authorized under
the Second Lien Documents and the Priority Credit Agreement, as the case may be,
to enter into this Agreement.

 

Article IX
Miscellaneous

 

SECTION 9.01.         Notices. All 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 telecopy, as follows:

 

(a)          if to the Original Priority Lien Agent, to it at 1525 W. WT Harris
Blvd., Charlotte, NC 28262, Attn: Manager, Agency Department, Telephone: (704)
590-2760, Facsimile: (704) 590-2790; with a copy to 1000 Louisiana Street, 9th
Floor, MAC T5002-031, Houston, Texas 77002, Attn: Energy Division, Telephone:
(713) 319-1350, Facsimile: (713) 739-1087;

 

(b)          if to the Original Second Lien Collateral Trustee, to it at: 950
17th Street – 12th Floor, Denver, CO 80202, Attention: Corporate Trust,
Facsimile: (303) 585-6865, with a copy (which shall not constitute notice) to
Richard Aftanas, Kirkland & Ellis LLP, 601 Lexington Avenue, New York, NY 10022
(Fax: 212-446-4900) and John Pitts, Kirkland & Ellis LLP, 600 Travis Street,
Suite 3300, Houston, TX 77002 (Fax: 713-835-3601);

 

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(c)          if to the Parent Company, to it at: 515 S. Flower Street, Suite
4800, Los Angeles, California 90071, Attn: Chief Financial Officer, Telephone:
(213) 225-5900, Facsimile: (213) 225-5916;

 

(d)          if to any other Grantor, to it in care of the Parent Company as
provided in clause (c) above; and

 

(e)          and if to any other Secured Debt Representative, to such address as
specified in the Lien Sharing and Priority Confirmation Joinder.

 

Any party hereto may change its address or facsimile number for notices and
other communications hereunder by notice to the other parties hereto (and for
this purpose a notice to the Parent Company shall be deemed to be a notice to
each Grantor). 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 a Business Day) and on the next Business Day
thereafter (in all other cases) if delivered by hand or overnight courier
service or sent by telecopy 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 9.01 or in
accordance with the latest unrevoked direction from such party given in
accordance with this Section 9.01. As agreed to in writing among the Parent
Company, the Second Lien Collateral Trustee and the Priority Lien 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.

 

SECTION 9.02.         Waivers; Amendment.

 

(a)          No failure or delay on the part of any party hereto in exercising
any right or power 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, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice or demand on any party
hereto in any case shall entitle such party to any other or further notice or
demand in similar or other circumstances.

 

39

 

  

(b)          Neither this Agreement nor any provision hereof may be terminated,
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by each Secured Debt Representative and the Grantors;
provided, however, that this Agreement may be amended from time to time (x) at
the sole written request and expense of the Parent Company, as provided in
Section 4.04 with respect to a Lien Sharing and Priority Confirmation Joinder
and the designation of “Priority Lien Obligations” and “Second Lien Debt”, (y)
at the sole written request and expense of the Parent Company, and without the
consent of any Second Lien Representative, to add additional Indebtedness as
Priority Lien Obligations and add other parties (or any authorized agent thereof
or trustee therefor) holding such Indebtedness to this Agreement and to
establish that the Liens on any Collateral securing such Indebtedness shall rank
equally with the Liens on such Collateral securing the obligations under the
Priority Credit Agreement or any Priority Substitute Facility, in each case, as
long as such Priority Lien Obligation is permitted to be incurred under Section
4.04(a) and (b) hereof and under each applicable Secured Debt Document (provided
that the Parent Company shall deliver to the Second Lien Collateral Trustee an
Officers’ Certificate stating that such Indebtedness is permitted by each
applicable Priority Lien Document and Second Lien Document and that with respect
to any amendments or modifications to this Agreement pursuant to this clause
(y), such amendments or modifications do not adversely affect the rights or
obligations under this Agreement of any of the Second Lien Collateral Trustee or
the Second Lien Secured Parties) and (z) at the sole written request and expense
of the Grantors, and without the consent of either Secured Debt Representative,
to add, pursuant to an Intercreditor Agreement Joinder, additional Grantors
whereupon such Person will be bound by the terms hereof to the same extent as if
it had executed and delivered this Agreement as of the date hereof. Any
amendment of this Agreement that is proposed to be effected without the consent
of a Secured Debt Representative as permitted by the proviso to the preceding
sentence shall be submitted to such Secured Debt Representative for its review
at least 5 Business Days prior to the proposed effectiveness of such amendment.
The Second Lien Collateral Trustee shall not be “bound” by any amendment,
modification, or waiver of this Agreement that adversely affects its or any
other Second Lien Secured Party’s obligations, rights and protections without
its written consent.

 

SECTION 9.03.         Actions Upon Breach; Specific Performance.

 

(a)          If any Secured Party, contrary to this Agreement, commences or
participates in any action or proceeding against any Grantor or the Collateral,
such Grantor, with the prior written consent of the Secured Debt Representative
(or any Secured Party represented by such Secured Debt Representative) against
whose rights such action or proceeding shall have been taken (the “Aggrieved
Secured Party”), may interpose as a defense or dilatory plea the making of this
Agreement, and any such Aggrieved Secured Party may intervene and interpose such
defense or plea in its or their name or in the name of such Grantor.

(b)          Should any Secured Party, contrary to this Agreement, in any way
take, attempt to or threaten to take any action with respect to the Collateral
(including any attempt to realize upon or enforce any remedy with respect to
this Agreement), or take any other action in violation of this Agreement or fail
to take any action required by this Agreement, the Aggrieved Secured Party (in
its own name or in the name of the relevant Grantor) or the relevant Grantor
(with the prior written consent of the Aggrieved Secured Party) (i) may obtain
relief against such Secured Party’s action by injunction, specific performance
and/or other appropriate equitable relief, it being understood and agreed by
each Secured Party Representative (on behalf of the respective Secured Parties)
that (x) the Aggrieved Secured Parties’ damages from such actions may at that
time be difficult to ascertain and may be irreparable, and (y) each Secured
Party waives any defense that the Grantors and/or the Aggrieved Secured Parties
cannot demonstrate damage and/or be made whole by the awarding of damages, and
(ii) shall be entitled to damages, as well as reimbursement for all reasonable
and documented costs and expenses incurred in connection with any action to
enforce the provisions of this Agreement.

 

40

 

  

SECTION 9.04.         Parties in Interest. 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 Secured Parties, all of whom are intended to
be bound by, and to be third party beneficiaries of, this Agreement.

 

SECTION 9.05.         Survival of Agreement. 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.

 

SECTION 9.06.         Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute a single contract. 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.

 

SECTION 9.07.         Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate 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.

 

SECTION 9.08.         Governing Law; Jurisdiction; Consent to Service of
Process.

 

(a)          THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK.

 

(b)          Each party hereto hereby irrevocably and unconditionally submits,
for itself and its property, to the exclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of 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 in such New
York State court or, to the extent permitted by law, in such federal court. Each
of the parties 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. The foregoing shall
not affect any right that any party may otherwise have to bring any action or
proceeding relating to enforcement of the Collateral in the courts of any
jurisdiction where the Collateral may be located.

 

(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 court referred to
in paragraph (b) of this Section. Each of the parties 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.

 

41

 

  

(d)          Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. 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 9.09.         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 ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO 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.

 

SECTION 9.10.         Headings. Article, Section and Annex headings used herein
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 9.11.         Conflicts. Subject to Section 9.12, in the event of any
conflict or inconsistency between the provisions of this Agreement and the
provisions of any Secured Debt Documents, the provisions of this Agreement shall
control.

 

SECTION 9.12.         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 Priority Lien Secured Parties, on the one
hand, and the Second Lien Secured Parties, on the other hand. None of the
Issuers, Borrower, any other Grantor or any other creditor thereof shall have
any rights (including any rights to assert a conflict or inconsistency
referenced in Section 9.11) or obligations hereunder, except as expressly
provided in this Agreement (provided that nothing in this Agreement is intended
to or will amend, waive or otherwise modify the provisions of the Priority
Credit Agreement or the Indenture), and except as expressly provided in this
Agreement no Grantor may rely on the terms hereof. Nothing in this Agreement is
intended to or shall impair the obligations of any Grantor, which are absolute
and unconditional, to pay the Obligations under the Secured Debt Documents as
and when the same shall become due and payable in accordance with their terms.
Notwithstanding anything to the contrary herein or in any Secured Debt Document,
the Grantors shall not be required to act or refrain from acting pursuant to
this Agreement, any Priority Lien Document or any Second Lien Document with
respect to any Collateral in any manner that would cause a default under any
Priority Lien Document or any Priority Lien Document.

 

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SECTION 9.13.         Certain Terms Concerning the Second Lien Collateral
Trustee. The Second Lien Collateral Trustee is executing and delivering this
Agreement solely in its capacity as such and pursuant to direction set forth in
the Second Lien Documents; and in so doing, the Second Lien Collateral Trustee
shall not be responsible for the terms or sufficiency of this Agreement for any
purpose. The Second Lien Collateral Trustee shall have no duties or obligations
under or pursuant to this Agreement other than such duties and obligations as
may be expressly set forth in this Agreement as duties and obligations on its
part to be performed or observed. In entering into this Agreement, or in taking
(or forbearing from) any action under or pursuant to the Agreement, the Second
Lien Collateral Trustee shall have and be protected by all of the rights,
immunities, indemnities and other protections granted to it under the Indenture
(including without limitation Sections 7.01, 7.02 and 7.07 thereof), and the
Second Lien Documents.

 

SECTION 9.14.         Certain Terms Concerning Priority Lien Agent and Second
Lien Collateral Trustee. Neither the Priority Lien Agent nor the Second Lien
Collateral Trustee shall have any liability or responsibility for the actions or
omissions of any other Secured Party, or for any other Secured Party’s
compliance with (or failure to comply with) the terms of this Agreement. Neither
the Priority Lien Agent nor the Second Lien Collateral Trustee shall have
individual liability to any Person if it shall mistakenly pay over or distribute
to any Secured Party (or the Grantors) any amounts in violation of the terms of
this Agreement, so long as the Priority Lien Agent or the Second Lien Collateral
Trustee, as the case may be, is acting in good faith. Each party hereto hereby
acknowledges and agrees that each of the Priority Lien Agent and the Second Lien
Collateral Trustee is entering into this Agreement solely in its capacity under
the Priority Lien Documents and the Second Lien Documents, respectively, and not
in its individual capacity. The Priority Lien Agent shall not be deemed to owe
any fiduciary duty to the Second Lien Collateral Trustee or any other Second
Lien Representative or any other Second Lien Secured Party, and the Second Lien
Collateral Trustee shall not be deemed to owe any fiduciary duty to the Priority
Lien Agent or any other Priority Lien Secured Party.

 

SECTION 9.15.         Authorization of Secured Agents. By accepting the benefits
of this Agreement and the other Priority Lien Security Documents, each Priority
Lien Secured Party authorizes the Priority Lien 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 Lien Security Documents, each Second Lien Secured Party authorizes the
Second Lien Collateral Trustee to enter into this Agreement and to act on its
behalf as collateral agent hereunder and in connection herewith.

 

SECTION 9.16.         Further Assurances.

 

(a)          Each of the Priority Lien Agent, for itself and on behalf of the
other Priority Lien Secured Party, and the Second Lien Collateral Trustee, for
itself and on behalf of the other Second Lien 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 Priority Lien Agent or the Second Lien Collateral
Trustee may reasonably request, to effectuate the terms of this Agreement,
including the relative Lien priorities provided for herein.

 

43

 

  

(b)          Without in any way altering, minimizing or otherwise failing to
give the fullest effect under applicable law to the waivers and limitations of
rights, and disclaimers and limitations of obligations or duties, herein
provided (however characterized), the parties agree that, except as may
otherwise be expressly provided herein, if and to the extent that any Secured
Party shall owe any duty or obligation to any other Secured Party hereunder the
provisions of this Agreement are not intended to excuse such Secured Party from
its gross negligence or wilful misconduct in the performance of such duty or
obligation.

 

SECTION 9.17.         Relationship of Secured Parties. Nothing set forth herein
shall create or evidence a joint venture, partnership or an agency or fiduciary
relationship among the Secured Parties. None of the Secured Parties nor any of
their respective directors, officers, agents or employees shall be responsible
to any other Secured Party or to any other Person for any Grantor’s solvency,
financial condition or ability to repay the Priority Lien Obligations or the
Second Lien Obligations, or for statements of any Grantor, oral or written, or
for the validity, sufficiency or enforceability of the Priority Lien Documents
or the Second Lien Documents, or any security interests granted by any Grantor
to any Secured Party in connection therewith. Each Secured Party has entered
into its respective financing agreements with the Grantors based upon its own
independent investigation, and neither the Priority Lien Agent nor Second Lien
Collateral Trustee makes any warranty or representation to the other Secured
Debt Representative or the Secured Parties for which it acts as agent nor does
it rely upon any representation of the other agent or the Secured Parties for
which it acts as agent with respect to matters identified or referred to in this
Agreement.

 

[Remainder of this page intentionally left blank]

 

44

 

  

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

  WELLS FARGO BANK, NATIONAL ASSOCIATION,   as Priority Lien Agent       By /S/
Michael Real   Name: Michael Real   Title: Director

 

Signature Page to the Intercreditor Agreement

 

 

 

  

  U.S. BANK, NATIONAL ASSOCIATION,   as Second Lien Collateral Trustee       By
/S/ Kathleen Connnelly   Name: Kathleen Connelly   Title: Vice President

 

Signature Page to the Intercreditor Agreement

 

 

 

 

  Grantors:       BREITBURN OPERATING LP       By: BREITBURN OPERATING GP LLC,
its general partner       By /S/ James G. Jackson   Name: James G. Jackson  
Title: Executive Vice President and Chief Financial Officer       BREITBURN
ENERGY PARTNERS LP       By: BREITBURN OPERATING GP LLC, its general partner    
  By /S/ James G. Jackson   Name: James G. Jackson   Title: Executive Vice
President and Chief Financial Officer       BREITBURN GP LLC   BREITBURN
OPERATING GP LLC       By /S/ James G. Jackson   Name: James G. Jackson   Title:
Executive Vice President and Chief Financial Officer       BREITBURN MANAGEMENT
COMPANY LLC       By: BREITBURN ENERGY PARTNERS LP, its sole member   By:
BREITBURN OPERATING GP LLC, its general partner       By /S/ James G. Jackson  
Name: James G. Jackson   Title: Executive Vice President and Chief Financial
Officer

 

Signature Page to the Intercreditor Agreement

 

 

 

  

  BREITBURN FLORIDA LLC   BREITBURN OKLAHOMA LLC   BREITBURN SAWTELLE LLC
(formerly Breitburn Fulton LLC)   BREITBURN TRANSPETCO GP LLC   BREITBURN
TRANSPETCO LP LLC       By: BREITBURN OPERATING LP, its sole member   By:
BREITBURN OPERATING GP LLC, its general partner       By /S/ James G. Jackson  
Name: James G. Jackson   Title: Executive Vice President and Chief Financial
Officer       TRANSPETCO PIPELINE COMPANY, L.P.       By: BREITBURN TRANSPETCO
GP LLC, its general partner   By: BREITBURN OPERATING LP, its sole member   By:
BREITBURN OPERATING GP LLC, its general partner       By /S/ James G. Jackson  
Name: James G. Jackson   Title: Executive Vice President and Chief Financial
Officer       By: BREITBURN OPERATING LP, its general partner   By: BREITBURN
OPERATING GP LLC, its general partner       By /S/ James G. Jackson   Name:
James G. Jackson   Title: Executive Vice President and Chief Financial Officer

 

Signature Page to the Intercreditor Agreement

 

 

 

 

  BREITBURN FINANCE CORPORATION   BEAVER CREEK PIPELINE, L.L.C.   ALAMITOS
COMPANY   PHOENIX PRODUCTION COMPANY   GTG PIPELINE LLC   MERCURY MICHIGAN
COMPANY, LLC   TERRA ENERGY COMPANY LLC   TERRA PIPELINE COMPANY LLC       By
/S/ James G. Jackson     Name: James G. Jackson   Title: Chief Financial Officer
      QR ENERGY, LP   By: QRE GP, LLC, its general partner       By /S/ James G.
Jackson   Name: James G. Jackson   Title: Chief Financial Officer       QRE GP,
LLC   By: BREITBURN GP LLC, its manager       By /S/ James G. Jackson   Name:
James G. Jackson   Title: Chief Financial Officer           QRE OPERATING, LLC  
By: QR ENERGY, LP, its sole member   By: QRE GP, LLC, its general partner      
By /S/ James G. Jackson   Name: James G. Jackson   Title: Chief Financial
Officer

 

Signature Page to the Intercreditor Agreement

 

 

 

  

ANNEX I
Provision for the Indenture, the Additional Second Lien Debt Facility
and the Second Lien Documents

 

Reference is made to the Intercreditor Agreement, dated as of April 8, 2015,
among Wells Fargo Bank, National Association as agent for the Priority Lien
Secured Parties referred to therein; U.S. Bank National Association, as Second
Lien Collateral Trustee (as defined therein); Breitburn Energy Partners LP,
Breitburn Finance Corporation, Breitburn Operating LP, and the other
subsidiaries of Breitburn Energy Partners LP, named therein from time to time
(the “Intercreditor Agreement”). Each holder of the [Indenture Notes][notes
issued under the Additional Second Lien Debt Facility], by its acceptance of
[the Indenture Notes][the notes issued under the Additional Second Lien Debt
Facility] (a) consents to the subordination of Liens provided for in the
Intercreditor Agreement, (b) agrees that it will be bound by, and will take no
actions contrary to, the provisions of the Intercreditor Agreement and (c)
authorizes and instructs the Second Lien Collateral Trustee on behalf of each
Second Lien Secured Party (as defined therein) to enter into the Intercreditor
Agreement as Second Lien Collateral Trustee on behalf of such Second Lien
Secured Parties. The foregoing provisions are intended as an inducement to the
lenders under the Priority Credit Agreement to extend credit to the Borrowers
and such lenders are intended third party beneficiaries of such provisions and
the provisions of the Intercreditor Agreement.

 

Provision for the Indenture, Second Lien Security Documents, and the Additional
Second Lien Security Documents that Grant a Security Interest in Collateral

 

Reference is made to the Intercreditor Agreement, dated as of April 8, 2015,
among Wells Fargo Bank, National Association as agent for the Priority Lien
Secured Parties referred to therein; U.S. Bank National Association, as Second
Lien Collateral Trustee (as defined therein); Breitburn Energy Partners LP,
Breitburn Finance Corporation, Breitburn Operating LP, and the other
subsidiaries of Breitburn Energy Partners LP, named therein from time to time
(the “Intercreditor Agreement”). Each Person that is secured hereunder, by
accepting the benefits of the security provided hereby, (i) consents (or is
deemed to consent), to the subordination of Liens provided for in the
Intercreditor Agreement, (ii) agrees (or is deemed to agree) that it will be
bound by, and will take no actions contrary to, the provisions of the
Intercreditor Agreement, (iii) authorizes (or is deemed to authorize) the Second
Lien Collateral Trustee on behalf of such Person to enter into, and perform
under, the Intercreditor Agreement and (iv) acknowledges (or is deemed to
acknowledge) that a copy of the Intercreditor Agreement was delivered, or made
available, to such Person.

 

Notwithstanding any other provision contained herein, this Agreement, the Liens
created hereby and the rights, remedies, duties and obligations provided for
herein are subject in all respects to the provisions of the Intercreditor
Agreement. In the event of any conflict or inconsistency between the provisions
of this Agreement and the Intercreditor Agreement, the provisions of the
Intercreditor Agreement shall control.

 

Annex I to the Intercreditor Agreement

 

 

 

  

EXHIBIT A
to Intercreditor Agreement

 

[FORM OF]
INTERCREDITOR AGREEMENT JOINDER

 

The undersigned, _________________, a _______________, hereby agrees to become
party as a [Grantor] under the Intercreditor Agreement dated as of April 8, 2015
(the “Intercreditor Agreement”) among Breitburn Energy Partners LP, Breitburn
Finance Corporation, Breitburn Operating LP, and the other Grantors from time to
time party thereto, Wells Fargo Bank, National Association as agent under the
Priority Credit Agreement (as defined therein) and U.S. Bank National
Association, as collateral trustee under the Indenture (as defined therein), for
all purposes thereof on the terms set forth therein, and to be bound by the
terms of the Intercreditor Agreement as fully as if the undersigned had executed
and delivered the Intercreditor Agreement as of the date thereof.

 

The provisions of Article 9 of the Intercreditor Agreement will apply with like
effect to this Joinder.

 

IN WITNESS WHEREOF, the parties hereto have caused this Intercreditor Agreement
Joinder to be executed by their respective officers or representatives as of
______________, 20____.

 

[_____________________]

 

  By:       Name:       Title:    

 

Exhibit A to the Intercreditor Agreement

 

 

 

  

EXHIBIT B
to Intercreditor Agreement

 

[FORM OF]
LIEN SHARING AND PRIORITY CONFIRMATION JOINDER

 

Reference is made to the Intercreditor Agreement, dated as of April 8, 2015 (as
amended, supplemented, amended and restated or otherwise modified and in effect
from time to time, the “Intercreditor Agreement”) among WELLS FARGO BANK,
NATIONAL ASSOCIATION, as Agent for the priority Lien Secured Parties (as defined
therein), U.S. Bank National Association, as Collateral Trustee for the Second
Lien Secured Parties (as defined therein), BREITBURN ENERGY PARTNERS LP, a
Delaware limited partnership (“Parent Company”), BREITBURN FINANCE CORPORATION,
a Delaware corporation and a wholly owned subsidiary of the Parent Company
(“Finance Corp” and together with the Parent Company, the “Issuers”), and
BREITBURN OPERATING LP, a Delaware limited partnership and a wholly owned
subsidiary of the Parent Company (the “Borrower”) and the other direct and
indirect subsidiaries of the Parent Company party hereto from time to time.

 

Capitalized terms used but not otherwise defined herein shall have the meaning
set forth in the Intercreditor Agreement. This Lien Sharing and Priority
Confirmation Joinder is being executed and delivered pursuant to Section 4.04 of
the Intercreditor Agreement as a condition precedent to the debt for which the
undersigned is acting as representative being entitled to the rights and
obligations of being Additional Second Lien Obligations under the Intercreditor
Agreement.

 

1.          Joinder. The undersigned, [_______________], a [_______________],
(the “New Representative”) as [trustee] [collateral trustee] [administrative
agent] [collateral agent] under that certain [described applicable indenture,
credit agreement or other document governing the Additional Second Lien
Obligations] hereby:

 

(a)          represents that the New Representative has been authorized to
become a party to the Intercreditor Agreement on behalf of the [Priority Lien
Secured Parties under a Priority Substitute Facility][Indenture Second Lien
Secured Parties under the Second Lien Substitute Facility][Additional Second
Lien Secured Parties under the Additional Second Lien Debt Facility] as [a
Priority Lien Agent under a Priority Substitute Facility] [a Second Lien
Collateral Trustee under a Second Lien Substitute Facility] [a Secured Debt
Representative] under the Intercreditor Agreement for all purposes thereof on
the terms set forth therein, and to be bound by the terms of the Intercreditor
Agreement as fully as if the undersigned had executed and delivered the
Intercreditor Agreement as of the date thereof; and

 

(b)          agrees that its address for receiving notices pursuant to the
Intercreditor Agreement shall be as follows:

 

Exhibit B to the Intercreditor Agreement

 

 

 

  

[Address];

 

2.          Lien Sharing and Priority Confirmation.

 

[Option A: to be used if Additional Debt constitutes Priority Debt] The
undersigned New Representative, on behalf of itself and each Priority Lien
Secured Party for which the undersigned is acting as [Administrative Agent]
hereby agrees, for the benefit of all Secured Parties and each future Secured
Debt Representative, and as a condition to being treated as Priority Lien
Obligations under the Intercreditor Agreement, that the New Representative is
bound by the provisions of the Intercreditor Agreement, including the provisions
relating to the ranking of Priority Liens. [or]

 

[Option B: to be used if Additional Debt constitutes a Series of Second Lien
Debt] The undersigned New Representative, on behalf of itself and each holder of
Obligations in respect of the Series of Second Lien Debt [that constitutes
Second Lien Substitute Facility] for which the undersigned is acting as [Secured
Debt Representative][Second Lien Collateral Trustee] hereby agrees, for the
benefit of all Secured Parties and each future Secured Debt Representative, and
as a condition to being treated as Secured Debt under the Intercreditor
Agreement, that:

 

(a)          all Second Lien Obligations will be and are secured equally and
ratably by all Second Liens at any time granted by the Borrowers or any other
Grantor to secure any Obligations in respect of such Series of Second Lien Debt,
whether or not upon property otherwise constituting Collateral for such Series
of Second Lien Debt, and that all such Second Liens will be enforceable by the
Second Lien Collateral Trustee with respect to such Series of Second Lien Debt
for the benefit of all Second Lien Secured Parties equally and ratably;

 

(b) the New Representative and each holder of Obligations in respect of the
Series of Second Lien Debt for which the undersigned is acting as [Secured Debt
Representative] are bound by the provisions of the Intercreditor Agreement,
including the provisions relating to the ranking of Priority Liens and Second
Liens and the order of application of proceeds from enforcement of Priority
Liens and Second Liens; and

 

(c)          the New Representative and each holder of Obligations in respect of
the Series of Second Lien Debt for which the undersigned is acting as [Secured
Debt Representative] appoints the Second Lien Collateral Trustee and consents to
the terms of the Intercreditor Agreement and the performance by the Second Lien
Collateral Trustee of, and directs the Second Lien Collateral Trustee to
perform, its obligations under the Intercreditor Agreement and the Second Lien
Collateral Trust Agreement, together with all such powers as are reasonably
incidental thereto.

 

3.          Governing Law and Miscellaneous Provisions. The provisions of
Article 7 of the Intercreditor Agreement will apply with like effect to this
Lien Sharing and Priority Confirmation Joinder.

 

Exhibit B to the Intercreditor Agreement

 

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Lien Sharing and
Priority Confirmation Joinder to be executed by their respective officers or
representatives as of [______________, 20____].

 

  [insert name of New Representative]       By:       Name:     Title:  

 

The Second Lien Collateral Trustee hereby acknowledges receipt of this Lien
Sharing and Priority Confirmation Joinder and agrees to act as Second Lien
Collateral Trustee for the New Representative and the holders of the Obligations
represented thereby:

 

  ,   as Second Lien Collateral Trustee       By:       Name:     Title:  

 

The Priority Lien Agent hereby acknowledges receipt of this Lien Sharing and
Priority Confirmation Joinder and agrees to act as Priority Lien Agent for the
New Representative and the holders of the Obligations represented thereby:

 

  ,   as Priority Lien Agent       By:       Name:   Title:

 

Exhibit B to the Intercreditor Agreement

 

 

 

  

EXHIBIT C
to Intercreditor Agreement

 

SECURITY DOCUMENTS

 

PART A.

 

List of Priority Lien Security Documents

 

1.Amended and Restated Security Agreement dated as of November 19, 2014, by and
among the Borrower, the Parent Company and the other Debtors (as defined
therein) and the Priority Lien Agent and all related financing statements filed
in connection therewith.

 

2.Omnibus Acknowledgement of Pledge dated as of November 19, 2014, executed by
each Company (as defined therein) and the Priority Lien Agent.

 

3.Amended and Restated Acknowledgment of Pledge dated as of November 19, 2014,
executed by Transpetco Pipeline Company, L.P., Breitburn Transpetco GP LLC,
Breitburn Transpetco LP LLC and Borrower and the Priority Lien Agent.

 

4.Stock Certificates and executed stock powers:

 

(a)Irrevocable Stock Power and Stock Certificate for Phoenix Production Company
(Certificate No. 6 for 2,500 Units).

 

(b)Irrevocable Stock Power and Stock Certificate for Alamitos Company
(Certificate No. 11 for 1,110 Units).

 

(c)Irrevocable Membership Interest Power and Certificate Evidencing Common Units
Representing Limited Liability Company Interests for QRE Operating, LLC
(Certificate No. 1 for 1000 Units).

 

Mortgage Instruments

 

Each mortgage set forth below, and all supplements, assignments, amendments and
restatements thereto (or any agreement in substitution therefor):

 

1.Deed of Trust, Mortgage, Assignment of Production, Fixture Filing, Security
Agreement and Financing Statement from QRE Operating, LLC to Wells Fargo Bank,
National Association, as Priority Lien Agent, and filed in Escambia County,
Alabama, including all fixture filing financing statements filed in connected
therewith.

 

2.Mortgage, Fixture Filing, As-Extracted Collateral Filing, Security Agreement,
Financing Statement, and Assignment of Production from QRE Operating, LLC to
Wells Fargo Bank, National Association, as Priority Lien Agent, and filed in
Columbia and Lafayette Counties, Arkansas.

 

3.Mortgage, Security Agreement, Financing Statement and Assignment of Production
from QRE Operating, LLC to Wells Fargo Bank, National Association, as Priority
Lien Agent, and filed in Escambia and Santa Rosa Counties, Florida.

 

Exhibit C to the Intercreditor Agreement

 

 

 

  

4.Act of Mortgage, Fixture Filing, Security Agreement, Financing Statement and
Assignment of Production from QRE Operating, LLC to Wells Fargo Bank, National
Association, as Priority Lien Agent, and filed in Caddo, Claiborne, and Webster
Counties, Louisiana, including all fixture filing financing statements filed in
connected therewith.

 

5.Security Conveyance from QRE Operating, LLC to Wells Fargo Bank, National
Association, as Priority Lien Agent, and filed in Lapeer County, Michigan.

 

6.Mortgage, with Power of Sale, Fixture Filing, As-Extracted Collateral Filing,
Security Agreement, Financing Statement, and Assignment of Production (Oil and
Gas) from QRE Operating, LLC to Wells Fargo Bank, National Association, as
Priority Lien Agent, and filed in Beaver, Beckham, Blaine, Caddo, Canadian,
Carter, Custer, Dewey, Ellis, Garfield, Garvin, Grady, Harper, Haskell,
Kingfisher, Major, Murray, Pittsburg, Roger Mills, Woods, and Woodward Counties,
Oklahoma.

 

7.Mortgage, with Power of Sale, Fixture Filing, Security Agreement, and
Financing Statement (Surface Interests) from QRE Operating, LLC to Wells Fargo
Bank, National Association, as Priority Lien Agent, and filed in Caddo,
Canadian, Ellis, Garfield, Grady, Major, Murray, Pittsburg, Roger Mills and
Woods Counties, Oklahoma.

 

8.Deed of Trust, Mortgage, Assignment of Production, Security Agreement and
Financing Statement from QRE Operating, LLC to Wells Fargo Bank, National
Association, as Priority Lien Agent, and filed in Anderson, Andrews, Cass,
Cherokee, Cochran, Coke, Crane, Ector, Freestone, Gaines, Glasscock, Gregg,
Hansford, Harris, Harrison, Henderson, Howard, Hutchinson, Irion, Leon,
Lipscomb, Live Oak, Marion, McMullen, Midland, Mitchell, Nolan, Ochiltree,
Panola, Pecos, Reeves, Rusk, Schleicher, Smith, Sterling, Terrell, Terry,
Upshur, Upton, Van Zandt, Ward, Wheeler, Winkler and Yoakum Counties, Texas.

 

9.Deed of Trust, Mortgage, Assignment of Production, Security Agreement and
Financing Statement from BreitBurn Operating L.P. to Wells Fargo Bank, National
Association, as Priority Lien Agent, and filed in Kern, Los Angeles and Orange
Counties, California.

 

10.Mortgage, Security Agreement, Financing Statement and Assignment of
Production from BreitBurn Florida LLC to Wells Fargo Bank, National Association,
as Priority Lien Agent, and filed in Collier, Hendry and Lee Counties, Florida,
including all fixture filing financing statements filed in connected therewith.

 

11.Mortgage, Indenture, Security Agreement, Fixture Filing, As-Extracted
Collateral Filing, Financing Statement and Assignment of Production from
BreitBurn Operating L.P. to Wells Fargo Bank, National Association, as Priority
Lien Agent, and filed in Bartholomew, Clark, Crawford, Floyd, Greene, Harrison,
Jackson, Johnson, Lawrence, Morgan, Orange and Washington Counties, Indiana.

 

12.Mortgage, Indenture, Security Agreement, Fixture Filing, As-Extracted
Collateral Filing, Financing Statement and Assignment of Production from
BreitBurn Operating L.P. to Wells Fargo Bank, National Association, as Priority
Lien Agent, and filed in Breckinridge, Grayson, Meade and Ohio Counties,
Kentucky.

 

Exhibit C to the Intercreditor Agreement

 

 

 

  

13.Mortgage, Indenture, Security Agreement, Fixture Filing, Financing Statement
and Assignment of Production from BreitBurn Operating L.P. and Terra Energy
Company, LLC to Wells Fargo Bank, National Association, as Priority Lien Agent,
and filed in Alcona, Alpena, Antrim, Bay, Benzie, Calhoun, Charlevoix,
Cheboygan, Clare, Crawford, Eaton, Grand Traverse, Ingham, Iosco, Kalkaska,
Lake, Lenawee, Manistee, Mecosta, Midland, Montcalm, Montmorency, Newaygo,
Oakland, Oceana, Ogemaw, Osceola, Oscoda, Ostego, Presque Isle, and St. Clair
Counties, Michigan.

 

14.Deed of Trust, Mortgage, Fixture Filing, Security Agreement and Financing
Statement from BreitBurn Operating L.P. to Wells Fargo Bank, National
Association, as Priority Lien Agent, and filed in Harding and Union Counties,
New Mexico (Libby Ranch – surface).

 

15.Deed of Trust, Mortgage, Fixture Filing, Security Agreement and Financing
Statement from Transpetco Pipeline Company, L.P. to Wells Fargo Bank, National
Association, as Priority Lien Agent, and filed in Union County, New Mexico
(Transpetco Surface).

 

16.Mortgage, With Power of Sale, Fixture Filing, As-Extracted Collateral Filing,
Security Agreement, Financing Statement and Assignment of Production from
BreitBurn Operating L.P. to Wells Fargo Bank, National Association, as Priority
Lien Agent, and filed in Texas County, Oklahoma (Oil and Gas Properties).

 

17.Mortgage, with Power of Sale, Fixture Filing, Security Agreement and
Financing Statement from BreitBurn Operating L.P. to Wells Fargo Bank, National
Association, as Priority Lien Agent, and filed in Beaver and Texas Counties,
Oklahoma (Surface Interests).

 

18.Mortgage, With Power of Sale, Fixture Filing, As-Extracted Collateral Filing,
Security Agreement, Financing Statement and Assignment of Production from
BreitBurn Oklahoma LLC to Wells Fargo Bank, National Association, as Priority
Lien Agent, and filed in Texas County, Oklahoma (Oil and Gas Properties).

 

19.Mortgage, With Power of Sale, Fixture Filing, Security Agreement and
Financing Statement from Transpetco Pipeline Company, L.P. d/b/a BreitBurn
Transpetco Pipeline Company LP to Wells Fargo Bank, National Association, as
Priority Lien Agent, and filed in Cimarron and Texas Counties, Oklahoma (Surface
Interests).

 

20.Deed of Trust, Mortgage, Security Agreement and Financing Statement from
Transpetco Pipeline Company, L.P. to Wells Fargo Bank, National Association, as
Priority Lien Agent, and filed in Dallam County, Texas.

 

21.Deed of Trust, Mortgage, Assignment of Production, Security Agreement and
Financing Statement from BreitBurn Operating L.P. to Wells Fargo Bank, National
Association, as Priority Lien Agent, and filed in Dallam, Garza, Glasscock,
Howard, Martin and Midland Counties, Texas.

 

22.Deed of Trust, Mortgage, Assignment of Production, Security Agreement and
Financing Statement from BreitBurn Operating L.P. to Wells Fargo Bank, National
Association, as Priority Lien Agent, and filed in Campbell, Carbon, Converse,
Crook, Fremont, Hot Springs, Lincoln, Natrona, Niobrara, Park, Sublette,
Sweetwater, Uinta, and Washakie Counties, Wyoming.

 

Exhibit C to the Intercreditor Agreement

 

 

 

  

23.Deed of Trust, Mortgage, Security Agreement, Financing Statement and
Assignment of Production from Phoenix Production Company to Wells Fargo Bank,
National Association, as Priority Lien Agent, and filed in Fremont and Park
Counties, Wyoming.

 

PART B.

 

List of Indenture Second Lien Security Documents

 

1.Security Agreement dated as of April 8, 2015, by and among the Borrower, the
Parent Company, Finance Corp and the other Debtors (as defined therein) and the
Original Second Lien Collateral Trustee and all related financing statements
filed in connection therewith.

 

2.Stock Certificates and executed stock powers (held by the Priority Lien Agent
as bailee in accordance with this Agreement):

 

(d)Irrevocable Stock Power and Stock Certificate for Phoenix Production Company
(Certificate No. 6 for 2,500 Units).

 

(e)Irrevocable Stock Power and Stock Certificate for Alamitos Company
(Certificate No. 11 for 1,110 Units).

 

(f)Irrevocable Membership Interest Power and Certificate Evidencing Common Units
Representing Limited Liability Company Interests for QRE Operating, LLC
(Certificate No. 1 for 1000 Units).

 

Exhibit C to the Intercreditor Agreement