Exhibit 10.1

 

EXECUTION VERSION

	
 
    


 

INTERCREDITOR AGREEMENT

 

dated as of May 21, 2015 between

 

SUNTRUST BANK,
 as Priority Lien Agent,

 

and

 

WILMINGTON TRUST, NATIONAL ASSOCIATION,
 as Second Lien Collateral Agent and Third Lien Collateral Agent

 




 

THIS IS THE INTERCREDITOR AGREEMENT REFERRED TO IN (A) THE INDENTURE DATED AS OF MAY 21, 2015, AMONG MIDSTATES PETROLEUM COMPANY LLC, MIDSTATES PETROLEUM COMPANY, INC., CERTAIN OF THEIR SUBSIDIARIES FROM TIME TO TIME PARTY THERETO AND WILMINGTON TRUST, NATIONAL ASSOCIATION, AS SECOND LIEN TRUSTEE, (B) THE INDENTURE DATED AS OF MAY 21, 2015, AMONG MIDSTATES PETROLEUM COMPANY LLC, MIDSTATES PETROLEUM COMPANY, INC., CERTAIN OF THEIR SUBSIDIARIES FROM TIME TO TIME PARTY THERETO AND WILMINGTON TRUST, NATIONAL ASSOCIATION, AS THIRD LIEN TRUSTEE (C) THE SECOND AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF JUNE 8, 2012, AS AMENDED, SUPPLEMENTED, RESTATED OR OTHERWISE MODIFIED FROM TIME TO TIME, AMONG MIDSTATES PETROLEUM COMPANY, INC., AS PARENT, MIDSTATES PETROLEUM COMPANY LLC, AS BORROWER, THE LENDERS PARTY THERETO FROM TIME TO TIME AND SUNTRUST BANK, AS ADMINISTRATIVE AGENT, SWING LINE LENDER AND AN ISSUING LENDER, (D) THE OTHER NOTE DOCUMENTS REFERRED TO IN SUCH INDENTURES AND (E) THE OTHER LOAN DOCUMENTS REFERRED TO IN SUCH CREDIT AGREEMENT.

	
 
    


 











 

TABLE OF CONTENTS

 

	
 
    	
Page
    
	
ARTICLE I
    
	
DEFINITIONS
    
	
 
    	
 
    
	
Section 1.01
    	
Construction; Certain Defined Terms
    	
1
    
	
 
    	
 
    
	
ARTICLE II
    
	
LIEN PRIORITIES
    
	
 
    	
 
    
	
Section 2.01
    	
Relative Priorities
    	
14
    
	
Section 2.02
    	
Prohibition on Marshalling, Etc.
    	
15
    
	
Section 2.03
    	
No New Liens
    	
15
    
	
Section 2.04
    	
Similar Collateral and Agreements
    	
16
    
	
Section 2.05
    	
No Duties of Priority Lien Agent
    	
17
    
	
Section 2.06
    	
No Duties of Second Lien Collateral Agent
    	
17
    
	
 
    	
 
    
	
ARTICLE III
    
	
ENFORCEMENT RIGHTS; PURCHASE OPTION
    
	
 
    	
 
    
	
Section 3.01
    	
Limitation on Enforcement Action
    	
18
    
	
Section 3.02
    	
Standstill Periods; Permitted Enforcement Action
    	
20
    
	
Section 3.03
    	
Insurance
    	
22
    
	
Section 3.04
    	
Notification of Release of Collateral
    	
23
    
	
Section 3.05
    	
No Interference; Payment Over
    	
23
    
	
Section 3.06
    	
Purchase Option
    	
26
    
	
 
    	
 
    
	
ARTICLE IV
    
	
OTHER AGREEMENTS
    
	
 
    	
 
    
	
Section 4.01
    	
Release of Liens; Automatic Release of Second Liens and   Third Liens
    	
31
    
	
Section 4.02
    	
Certain Agreements With Respect to Insolvency or   Liquidation Proceedings
    	
32
    
	
Section 4.03
    	
Reinstatement
    	
40
    
	
Section 4.04
    	
Refinancings
    	
41
    
	
Section 4.05
    	
Amendments to Second Lien Documents and Third Lien   Documents
    	
42
    
	
Section 4.06
    	
Legends
    	
43
    
	
Section 4.07
    	
Second Lien Secured Parties and Third Lien Secured Parties   Rights as Unsecured Creditors; Judgment Lien Creditor
    	
43
    
	
Section 4.08
    	
Postponement of Subrogation
    	
43
    
	
Section 4.09
    	
Acknowledgment by the Secured Debt Representatives
    	
44
    
	
 
    	
 
    
	
ARTICLE V
    
	
GRATUITOUS BAILMENT FOR PERFECTION OF CERTAIN   SECURITY INTERESTS
    
	
 
    	
 
    
	
Section 5.01
    	
General
    	
44
    
	
Section 5.02
    	
Deposit Accounts
    	
45
    
	
 
    	
 
    
	
ARTICLE VI
    
	
APPLICATION OF PROCEEDS; DETERMINATION OF AMOUNTS
    
	
 
    	
 
    
	
Section 6.01
    	
Application of Proceeds
    	
46
    
	
Section 6.02
    	
Determination of Amounts
    	
46
    


 

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ARTICLE VII
    
	
NO RELIANCE; NO LIABILITY; OBLIGATIONS ABSOLUTE;
    
	
CONSENT OF GRANTORS; ETC.
    
	
 
    	
 
    
	
Section 7.01
    	
No Reliance; Information
    	
47
    
	
Section 7.02
    	
No Warranties or Liability
    	
47
    
	
Section 7.03
    	
Obligations Absolute
    	
48
    
	
Section 7.04
    	
Grantors Consent
    	
49
    
	
 
    	
 
    
	
ARTICLE VIII
    
	
REPRESENTATIONS AND WARRANTIES
    
	
 
    	
 
    
	
Section 8.01
    	
Representations and Warranties of Each Party
    	
49
    
	
Section 8.02
    	
Representations and Warranties of Each Representative
    	
50
    
	
 
    	
 
    
	
ARTICLE IX
    
	
MISCELLANEOUS
    
	
 
    	
 
    
	
Section 9.01
    	
Notices
    	
50
    
	
Section 9.02
    	
Waivers; Amendment
    	
51
    
	
Section 9.03
    	
Actions Upon Breach; Specific Performance
    	
51
    
	
Section 9.04
    	
Parties in Interest
    	
52
    
	
Section 9.05
    	
Survival of Agreement
    	
52
    
	
Section 9.06
    	
Counterparts
    	
52
    
	
Section 9.07
    	
Severability
    	
52
    
	
Section 9.08
    	
Governing Law; Jurisdiction; Consent to Service of Process
    	
52
    
	
Section 9.09
    	
WAIVER OF JURY TRIAL
    	
53
    
	
Section 9.10
    	
Headings
    	
53
    
	
Section 9.11
    	
Conflicts
    	
53
    
	
Section 9.12
    	
Provisions Solely to Define Relative Rights
    	
53
    
	
Section 9.13
    	
Certain Terms Concerning the Second Lien Collateral Agent   and the Third Lien Collateral Agent
    	
54
    
	
Section 9.14
    	
Certain Terms Concerning the Priority Lien Agent, the   Second Lien Collateral Agent and the Third Lien Collateral Agent
    	
54
    
	
Section 9.15
    	
Authorization of Secured Agents
    	
55
    
	
Section 9.16
    	
Further Assurances
    	
55
    
	
Section 9.17
    	
Relationship of Secured Parties
    	
55
    
	
Section 9.18
    	
Third Lien Provisions
    	
55
    


 

Annex and Exhibits

 

Annex I

 

Exhibit A                                             Form of Priority Confirmation Joinder

Exhibit B                                             Security Documents

 

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INTERCREDITOR AGREEMENT, dated as of May 21, 2015 (as amended, supplemented or otherwise modified from time to time in accordance with the terms hereof, this “Agreement”), between SUNTRUST BANK, as administrative agent for the Priority Lien Secured Parties referred to herein (in such capacity, and together with its successors and assigns in such capacity, the “Original Priority Lien Agent”), WILMINGTON TRUST, NATIONAL ASSOCIATION, as collateral agent for the Second Lien Secured Parties referred to herein (in such capacity, and together with its successors and assigns in such capacity, the “Original Second Lien Collateral Agent”) and WILMINGTON TRUST, NATIONAL ASSOCIATION, as collateral agent for the Third Lien Secured Parties referred to herein (in such capacity, and together with its successors and assigns in such capacity, the “Original Third Lien Collateral Agent”).

 

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

 

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 Agent (for itself and on behalf of the Second Lien Secured Parties) and the Third Lien Collateral Agent (for itself and on behalf of the Third Lien Secured Parties) 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 be construed as referring to such agreement, instrument, other document, statute or regulation as from time to time amended, supplemented or otherwise modified, (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.

 

(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 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 (i) the Priority Lien Agent shall be deemed to refer to the Priority Lien Agent in its capacity as administrative agent under the Priority Lien Security Documents, (ii) the Second Lien Collateral Agent shall be deemed to refer to the Second Lien Collateral Agent in its capacity as collateral agent under the Second Lien Security

 











 

Documents and (iii) the Third Lien Collateral Agent shall be deemed to refer to the Third Lien Collateral Agent in its capacity as collateral agent under the Third Lien Security Documents.

 

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

 

“Accounts” has the meaning assigned to such term in Section 3.01(a).

 

“Additional Third Lien Notes” means those certain “Additional Notes” as defined in, and issued under, and in accordance with the terms of, the Third Lien Indenture as in effect on the date hereof.

 

“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.  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 and products provided to Midstates or any other Grantor by any lender under the Priority Credit Agreement or any Affiliate of any such lender: (1) commercial credit or debit cards, (2) stored value cards and (3) 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 Midstates or any other 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 any 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:  (1) with respect to a corporation, the board of directors of the corporation; (2) with respect to a partnership, the Board of Directors of the general partner of the partnership; and (3) with respect to any other Person, the board or committee of such Person serving a similar function.

 

“Borrowing Base” means, with respect to borrowings under the Priority Credit Agreement or Refinancing Priority Credit Agreement, the maximum amount in United States dollars determined or redetermined by the lenders (who, for the avoidance of doubt, must be (i) commercial bank lenders, (ii) investment banks or (iii) Affiliates of Persons described in the foregoing clauses (i) and (ii), which, in each case, regularly participate in reserve based credit facilities) under the Priority Credit Agreement or Refinancing Priority Credit Agreement as the aggregate lending value to be ascribed to the Oil and Gas Properties of Midstates and its Restricted Subsidiaries against which such lenders are prepared to provide loans or other Indebtedness to Midstates and its Restricted Subsidiaries under the Priority Credit Agreement or Refinancing Credit Agreement, using their customary practices and standards for determining borrowing base loans and which are generally applied to borrowers in the Oil and Gas Business, as determined semi-annually during each year and/or on such other occasions as may be required by the Priority Credit Agreement, and which is based upon, inter alia, the review by such lenders

 

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of the Hydrocarbon reserves, royalty interests and assets and liabilities of Midstates and its Restricted Subsidiaries; provided that such amount shall not exceed $350 million in aggregate principal amount.

 

“Business Day” means a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in New York State, Texas State or the place of payment.

 

“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.

 

“Class” means (a) in the case of Priority Lien Debt, the Priority Lien Debt, taken together, (b) in the case of Second Lien Debt, the Second Lien Debt, taken together and (c) in the case of Third Lien Debt, the Third Lien Debt, taken together.

 

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

 

“Commodity Agreements” means, in respect of any Person, any forward contract, commodity swap agreement, commodity option agreement, cap or collar contract, hedging contracts or other derivative contracts or other similar agreement or arrangement in respect of Hydrocarbons used, produced, processed or sold by such Person and designed to protect such Person against fluctuation in Hydrocarbon prices.

 

“Credit Facilities” means one or more debt facilities (including, without limitation, the Priority Credit Agreement and any Refinancing Priority Credit Agreement), with banks or other institutional lenders or investors providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced in whole or in part from time to time, including any agreement extending the maturity thereof or otherwise restructuring all or any portion of the indebtedness thereunder or increasing the amount loaned thereunder or altering the maturity thereof.

 

“Currency Agreement” means any foreign exchange contract, currency swap agreement, currency futures contract, currency option agreement or other similar agreement intended to manage exposure to fluctuations in currency exchange rates.

 

“DIP Financing” has the meaning assigned to such term in Section 4.02(b).

 

“DIP Financing Liens” has the meaning assigned to such term in Section 4.02(b).

 

“DIP Lenders” has the meaning assigned to such term in Section 4.02(b).

 

“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;

 

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

 

(c)                                  discharge or cash collateralization (at 103% of the aggregate undrawn amount) of all outstanding letters of credit constituting Priority Lien Debt;

 

(d)                                 payment in full in cash of obligations in respect of Hedging Obligations that are secured by the Priority Liens (and, with respect to any particular Hedge Obligation, 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); and

 

(e)                                  payment in full in cash of all other Priority Lien Obligations (including Banking Services 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);

 

provided that, if, at any time after the Discharge of Priority Lien Obligations has occurred, Midstates or any other Grantor enters into any Priority Lien Document evidencing a Priority Lien Obligation which incurrence is not prohibited by the applicable Secured Debt 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 Midstates designates such Indebtedness as Priority Lien Debt 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, any Second Lien Obligations shall be deemed to have been at all times Second Lien Obligations and at no time Priority Lien Obligations, and any Third Lien Obligations shall be deemed to have been at all times Third Lien Obligations and at no time Priority Lien Obligations or Second Lien Obligations.  For the avoidance of doubt, a Replacement as contemplated by Section 4.04 shall not be deemed to cause a Discharge of Priority Lien Obligations.

 

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

 

(a)                                 payment in full in cash of the principal of and interest, premium (if any) and fees on all Second Lien Debt; and

 

(b)                                 payment in full in cash of all other Second Lien Obligations that are outstanding and unpaid at the time the Second 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);

 

provided that, if at any time after the Discharge of Second Lien Obligations has occurred, Midstates or any Grantor enters into any Second Lien Document evidencing a Second Lien Obligation which incurrence is not prohibited by the applicable Secured Debt Documents, then such Discharge of Second Lien Obligations shall automatically be deemed not to have occurred for all purposes of this Agreement with respect to such new Second Lien Obligations (other than with respect to any actions taken as a result of the occurrence of such first Discharge of Second Lien Obligations), and, from and after the date on which Midstates designates such Indebtedness as Second Lien Debt in accordance with this Agreement, the obligations under such Second Lien Document shall automatically and without any further action be treated as Second Lien Obligations for all purposes of this Agreement, including for purposes of the Lien

 

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priorities and rights in respect of Collateral set forth in this Agreement, any Third Lien Obligations shall be deemed to have been at all times Third Lien Obligations and at no time Second Lien Obligations.  For the avoidance of doubt, a Replacement as contemplated by Section 4.04(a) shall not be deemed to cause a Discharge of Second 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” means Obligations constituting Priority Lien Obligations for the principal amount of loans, letters of credit and reimbursement obligations under the Priority Credit Agreement and/or any other Credit Facility pursuant to which Priority Lien Debt has been incurred to the extent that such Obligations for principal, letters of credit and reimbursement obligations are in excess of the Priority Lien Cap.

 

“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 Midstates LLC, Midstates and each subsidiary of Midstates that shall have granted any Lien in favor of any of the Priority Lien Agent, the Second Lien Collateral Agent or the Third Lien Collateral Agent on any of its assets or properties to secure any of the Secured Obligations.

 

“Hedging Obligations” means, with respect to any specified Person, the obligations of such Person under Interest Rate Agreements, Currency Agreements or Commodity Agreements.

 

“Hydrocarbon Interests” means all rights, titles, interests and estates now or hereafter acquired in and to oil and gas leases, oil, gas and mineral leases, or other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding royalty and royalty interests, net profit interests and production payment interests, including any reserved or residual interests of whatever nature.

 

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

 

“Insolvency or Liquidation Proceeding” means:

 

(a)                                 any case commenced by or against Midstates or any other Grantor under the Bankruptcy Code or any other Bankruptcy Law, any other proceeding for the reorganization, recapitalization or adjustment or marshalling of the assets or liabilities of Midstates or any other Grantor, any receivership or assignment for the benefit of creditors relating to Midstates or any other Grantor or any similar case or proceeding relative to Midstates 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 Midstates or any other Grantor, in each case whether or not voluntary and whether or not involving bankruptcy or insolvency; or

 

(c)                                  any other proceeding of any type or nature in which substantially all claims of creditors of Midstates or any other Grantor are determined and any payment or distribution is or may be made on account of such claims.

 

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“Interest Rate Agreement” means with respect to any Person any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement as to which such Person is party or a beneficiary.

 

“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 option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

 

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

 

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

 

“Modified ACNTA” has the meaning set forth in the Second Lien Indenture and the Third Lien Indenture as in effect on the date hereof, and any component definition used therein has the meaning set forth in the Second Lien Indenture and Third Lien Indenture as of the date hereof.

 

“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 and obligations to provide cash collateral with respect to letters of credit whether or not drawn), premium, interest (including, to the extent legally permitted, all interest accrued thereon after the commencement of any Insolvency or Liquidation Proceeding at the rate, including any applicable post-default rate even if such interest is not enforceable, allowable or allowed as a claim in such proceeding), premium (if any), penalties, fees, indemnifications, reimbursements, expenses, damages and other liabilities payable under the documentation governing any Indebtedness.

 

“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 or any Vice-President of such Person.

 

“Officer’s Certificate” means a certificate signed on behalf of Midstates or Midstates and Midstates LLC (as applicable) by an Officer of the Midstates or Midstates and Midstates LLC (as applicable).

 

“Oil and Gas Properties” means Hydrocarbon Interests now owned or hereafter acquired by Midstates, Midstates LLC or any of their respective subsidiaries and contracts executed in connection therewith and all tenements, hereditaments, appurtenances, and properties belonging, affixed or incidental to such Hydrocarbon Interests, including, without limitation, any and all property, real or personal, now owned or hereafter acquired by Midstates, Midstates LLC or any of their respective subsidiaries 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, without limitation, any and all petroleum and/or natural gas wells, structures, field separators, processing plants, liquid extractors, plant compressors, pumps, pumping units, field gathering systems, 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,

 

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and all additions, substitutions, replacements for, fixtures and attachments to any and all of the foregoing owned directly or indirectly by Midstates, Midstates LLC or any of their respective subsidiaries.

 

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

 

“Original Second Lien Collateral Agent” has the meaning assigned to such term in the preamble hereto.

 

“Original Second Lien Trustee” means Wilmington Trust, National Association, in its capacity as trustee under the Second Lien Indenture, and together with its successors in such capacity.

 

“Original Third Lien Collateral Agent” has the meaning assigned to such term in the preamble hereto.

 

“Original Third Lien Trustee” means Wilmington Trust, National Association, in its capacity as trustee under the Third Lien Indenture, and together with its successors in such capacity.

 

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

 

“Priority Confirmation Joinder” means an agreement substantially in the form of Exhibit A.

 

“Priority Credit Agreement” means (a) the Second Amended and Restated Credit Agreement dated as of June 8, 2012, among Midstates, as Parent, Midstates LLC, as Borrower, the Lenders party thereto from time to time and SunTrust Bank, as Administrative Agent, Swing Line Lender and an Issuing Lender, as amended, restated, amended and restated, adjusted, waived, renewed, extended, increased, supplemented or otherwise Replaced from time to time with the same and/or different lenders (who, for the avoidance of doubt, must be (i) lenders party to the Priority Credit Agreement on the date hereof, (ii) commercial bank lenders, (iii) investment banks and (iv) Affiliates of Persons described in the foregoing clauses (i), (ii) and (iii), which, in each case, regularly participate in reserve based credit facilities) (such Replaced credit facility, a “Refinancing Priority Credit Agreement”) and/or agents and (b) any credit agreement, loan agreement or any other agreement or instrument evidencing or governing the terms of any Priority Substitute Credit Facility.

 

“Priority Lien” means a Lien granted, or purported to be granted, by Midstates or any other Grantor in favor of the Priority Lien Agent, at any time, upon any Property of Midstates or any other Grantor to secure Priority Lien Obligations (including Liens on such Collateral under the security documents associated with any Priority Substitute Credit Facility).

 

“Priority Lien Agent” means the Original Priority Lien Agent, and, from and after the date of execution and delivery of a Priority Substitute Credit Facility whereby the holders of such indebtedness and other Obligations evidenced thereunder or governed thereby represent the largest outstanding principal amount of any then outstanding Priority Lien Debt, 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, (a) the aggregate principal amount of Priority Lien Debt and all other Obligations in respect of Priority Lien Debt; provided that the aggregate principal amount of all such Indebtedness outstanding at any time does not exceed the greatest of (x) $275.0 million, (y) the Borrowing Base in effect at the time of such incurrence and (z) 25.0% of Modified ACNTA determined as of the date of such incurrence and after giving effect to the application of the

 

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proceeds therefrom (it being understood and agreed that any Priority Lien Debt incurred under any Priority Credit Agreement (or Priority Substitute Credit Facility) in reliance on this clause (a) shall be permitted hereunder so long as such Priority Lien Debt was permitted to be incurred in accordance with this Agreement, the Priority Lien Documents, the Second Lien Documents and the Third Lien Documents), plus (b) the amount of all Hedging Obligations, to the extent such Hedging Obligations are secured by the Priority Liens, plus (c) the amount of all Banking Services Obligations, to the extent such Banking Services Obligations are secured by the Priority Liens, plus (d) the amount of accrued and unpaid interest (excluding any interest paid-in-kind) and outstanding fees, to the extent such Obligations are secured by the Priority Liens.  For purposes of this definition, all letters of credit will be valued at the face amount thereof, whether or not drawn.

 

“Priority Lien Collateral” shall mean all “Collateral” or “Mortgaged Property”, 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.

 

“Priority Lien Debt” means the indebtedness under the Priority Credit Agreement (including letters of credit (with outstanding letters of credit being deemed to have a principal amount equal to the stated amount thereof) and reimbursement obligations with respect thereto) and additional indebtedness under any Priority Substitute Credit Facility, that was permitted to be incurred and secured under the Priority Credit Agreement, the Second Lien Indenture, any Second Lien Substitute Facility, the Third Lien Indenture and any Third Lien Substitute Facility.

 

“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 Credit Facility.

 

“Priority Lien Obligations” means the Priority Lien Debt and all other Obligations in respect of or in connection with Priority Lien Debt together with Hedging Obligations and the Banking Services Obligations, in each case to the extent that such Obligations are secured by Priority Liens.  For the avoidance of doubt, Hedging Obligations shall only constitute Priority Lien Obligations to the extent that such Hedging Obligations are secured under the terms of the Priority Credit Agreement and Priority Lien Security Documents.  Notwithstanding any other provision hereof, the term “Priority Lien Obligations” will include accrued interest, fees, costs, and other charges incurred under the Priority Credit Agreement and the other Priority Lien Documents, whether incurred before or after commencement of an Insolvency or Liquidation Proceeding, and whether or not allowable in an Insolvency or Liquidation Proceeding.  To the extent that any payment with respect to the Priority Lien Obligations (whether by or on behalf of any Grantor, as proceeds of security, enforcement of any right of set-off, or otherwise) is declared to be fraudulent or preferential in any respect, set aside, or required to be paid to a debtor in possession, trustee, receiver, or similar Person, then the obligation or part thereof originally intended to be satisfied will be deemed to be reinstated and outstanding as if such payment had not occurred.

 

“Priority Lien Secured Parties” means, at any time, the Priority Lien Agent, each lender or issuing bank under the Priority Credit Agreement, each holder, provider or obligee of any Hedging Obligations and Banking Services Obligations that is a lender under the Priority Credit Agreement or an Affiliate (as defined herein or in the Priority Credit Agreement) thereof and, in each case, is a secured party (or a party entitled to the benefits of the security) under any Priority Lien Document, the beneficiaries of each indemnification obligation undertaken by any Grantor under any Priority Lien Document, each other Person that provides letters of credit, guarantees or other credit support related thereto under any Priority Lien Document and each other holder of, or obligee in respect of, any Priority Lien Obligations (including

 

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pursuant to a Priority Substitute Credit Facility), 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 B 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 Midstates or any other Grantor creating (or purporting to create) a Lien upon Collateral in favor of the Priority Lien Agent, in each case, as amended, modified, renewed, restated or replaced, in whole or in part, from time to time, in accordance with its terms (including any such agreements, assignments, mortgages, deeds of trust and other documents or instruments associated with any Priority Substitute Credit Facility).

 

“Priority Substitute Credit Facility” means any Credit Facility with respect to which the requirements contained in Section 4.04 of this Agreement have been satisfied and that Replaces the Priority Credit Agreement then in existence.  For the avoidance of doubt, other than as specified in the definition of “Borrowing Base” with respect to any Priority Credit Agreement or Refinancing Priority Credit Agreement, no Priority Substitute Credit Facility shall be required to be a revolving or asset-based loan facility and may be a facility evidenced or governed by a credit agreement, loan agreement or any other agreement or instrument; provided that any Priority Lien securing such Priority Substitute Credit Facility shall be subject to the terms of this Agreement for all purposes (including the lien priorities as set forth herein as of the date hereof).

 

“Property” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, including, without limitation, cash, securities, accounts and contract rights.

 

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

 

“Reserve Report” has the meaning assigned to such term in the Priority Credit Agreement as in effect on the date hereof.

 

“Second Lien” means a Lien granted, or purported to be granted, by a Second Lien Document to the Second Lien Collateral Agent, at any time, upon any Collateral by any Grantor to secure Second Lien

 

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Obligations (including Liens on such Collateral under the security documents associated with any Second Lien Substitute Facility).

 

“Second Lien Collateral” shall mean all “Collateral” or “Mortgaged Property”, 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 Agent” means (i) the Original Second Lien Collateral Agent and (ii) in the case of any Second Lien Substitute Facility, the agent, collateral agent, trustee or other representative of the lenders or other holders of the indebtedness and other obligations evidence thereunder or governed thereby, in each case, together with its successors in such capacity.  In the event that the Second Lien Indenture Notes are Replaced in part, solely for purposes of directing the exercise of remedies with respect to the Collateral under this Agreement, the Second Lien Collateral Agent shall constitute the collateral agent under the Indebtedness representing the largest outstanding principal amount of any then outstanding Second Lien Debt.

 

“Second Lien Debt” means the indebtedness under the Second Lien Indenture Notes issued on the date hereof and guarantees thereof that was permitted to be incurred and secured in accordance with the Secured Debt Documents, and all Indebtedness incurred under any Second Lien Substitute Facility.

 

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

 

“Second Lien Indenture” means the Indenture, dated as of May 21, 2015, among Midstates, Midstates LLC, the other Grantors party thereto from time to time, the Second Lien Collateral Agent and the Second Lien Trustee, as amended, restated, adjusted, waived, renewed, extended, supplemented or otherwise modified from time to time in accordance with the terms hereof 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.

 

“Second Lien Indenture Notes” means the 10.00% Senior Secured Notes due 2020 issued under the Second Lien Indenture on the date hereof.

 

“Second Lien Obligations” means Second Lien Debt and all other Obligations in respect thereof.  Notwithstanding any other provision hereof, the term “Second Lien Obligations” will include accrued interest, fees, costs, and other charges incurred under the Second Lien Indenture and the other Second Lien Documents, whether incurred before or after commencement of an Insolvency or Liquidation Proceeding and whether or not allowable in an Insolvency or Liquidation Proceeding.

 

“Second Lien Purchaser Representative” means a representative of the holders of the Second Lien Indenture Notes, selected to act on their behalf in connection with a purchase option pursuant to Section 3.06.

 

“Second Lien Purchasers” has the meaning assigned to such term in Section 3.06.

 

“Second Lien Secured Parties” means, at any time, the Second Lien Trustee, the Second Lien Collateral Agent, the trustees, agents and other representatives of the holders of the Second Lien Indenture Notes who maintain the transfer register for such Second Lien Indenture Notes, the beneficiaries of each indemnification obligation undertaken by any Grantor under any Second Lien

 

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Document and each other holder of, or obligee in respect of, any Second Lien Indenture Notes, any holder or lender pursuant to any Second Lien Document outstanding at such time.

 

“Second Lien Security Agreement” means the Pledge and Security Agreement dated as of May 21, 2015, by and among Midstates, each of the other Grantors party thereto and the Second Lien Collateral Agent, for the ratable benefit of the Second Lien Secured Parties.

 

“Second Lien Security Documents” means the Second Lien Security Agreement, each other agreement listed in Part B of Exhibit B 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 Midstates or any other Grantor creating (or purporting to create) a Lien upon Collateral in favor of the Second Lien Collateral Agent (including any such agreements, assignments, mortgages, deeds of trust and other documents or instruments associated with any Second Lien Substitute Facility), in each case, as amended, modified, renewed, restated or replaced, in whole or in part, from time to time, in accordance with its terms and Section 4.05.

 

“Second Lien Standstill Period” has the meaning assigned to such term in Section 3.02(a)(i).

 

“Second Lien Substitute Facility” means any facility with respect to which the requirements contained in Section 4.04 of this Agreement have been satisfied and that is permitted to be incurred pursuant to the Priority Lien Documents, the Third Lien Documents and, in the case of a Replacement of the Second Lien Indenture Notes in part, the Second Lien Documents, the proceeds of which are used to, among other things, Replace the Second Lien Indenture.  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 of the date hereof) as the other Liens securing the Second Lien Obligations are subject to under this Agreement.

 

“Second Lien Trustee” means (i) the Original Second Lien Trustee and (ii) in the case of any 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.

 

“Secured Debt” means the Priority Lien Debt, the Second Lien Debt and the Third Lien Debt.

 

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

 

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

 

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

 

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

 

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

 

“Series of Secured Debt” means the Priority Lien Debt, the Second Lien Debt and the Third Lien Debt.

 

“subsidiary” means, with respect to any specified Person:

 

(1)                                 any corporation, association or other business entity (other than a partnership) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) to vote in the election of directors, managers or trustees of the corporation, association or other business entity 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

 

(2)                                 any partnership (a) the sole general partner or the managing general partner of which is such Person or a subsidiary of such Person or (b) the only general partners of which are that Person or one or more subsidiaries of that Person (or any combination thereof).

 

“Standstill Period” means the Second Lien Standstill Period, the Third Lien First Standstill Period and the Third Lien Second Standstill Period, as applicable.

 

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

 

“Third Lien Collateral” shall mean all “Collateral” and “Mortgaged Property”, as defined in any Third 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 Third Lien Obligations.

 

“Third Lien Collateral Agent” means (i) the Original Third Lien Collateral Agent and (ii) in the cases of any Third Lien Substitute Facility, the agent, collateral agent, trustee or other representative of the lenders or other holders of the indebtedness and other obligations evidence thereunder or governed thereby, in each case, together with its successors in such capacity.  In the event that the Third Lien Indenture Notes are Replaced in part, solely for purposes of directing the exercise of remedies with respect to the Collateral under this Agreement, the Third Lien Collateral Agent shall constitute the collateral agent under the Indebtedness representing the largest outstanding principal amount of any then outstanding Third Lien Debt.

 

“Third Lien Debt” means Indebtedness under the Third Lien Indenture Notes issued on the date hereof and guarantees thereof and all additional indebtedness in respect of Additional Third Lien Notes and guarantees thereof, in each case, that was permitted to be incurred and secured in accordance with the Secured Debt Documents, and all Indebtedness incurred under any Third Lien Substitute Facility.  For the avoidance of doubt, any issuance of Additional Third Lien Notes shall constitute “Third Lien Debt” without any further action of any party.

 

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

 

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“Third Lien Indenture” means the Indenture, dated as of May 21, 2015, among Midstates, Midstates LLC, the other Grantors party thereto from time to time, the Third Lien Collateral Agent and the Third Lien Trustee, as amended, restated, adjusted, waived, renewed, extended, supplemented or otherwise modified from time to time in accordance with the terms hereof 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 Third Lien Substitute Facility.

 

“Third Lien Indenture Notes” means (i) the Third Lien Senior Secured Notes Due 2020 issued under the Third Lien Indenture on the date hereof and (ii) any Additional Third Lien Notes.

 

“Third Lien First Standstill Period” has the meaning assigned to such term in Section 3.02(a)(ii).

 

“Third Lien Obligations” means Third Lien Debt and all other Obligations in respect thereof.  Notwithstanding any other provision hereof, the term “Third Lien Obligations” will include accrued interest, fees, costs, and other charges incurred under the Third Lien Documents, whether incurred before or after commencement of an Insolvency or Liquidation Proceeding.

 

“Third Lien Purchaser Representative” means a representative of the holders of the Third Lien Indenture Notes, selected to act on their behalf in connection with a purchase option pursuant to Section 3.07.

 

“Third Lien Purchasers” has the meaning assigned to such term in Section 3.07.

 

“Third Lien Second Standstill Period” has the meaning assigned to such term in Section 3.02(b).

 

“Third Lien Secured Parties” means, at any time, the Third Lien Trustee, the Third Lien Collateral Agent, the trustees, agents and other representatives of the holders of the Third Lien Indenture Notes who maintain the transfer register for such Third Lien Indenture Notes, the beneficiaries of each indemnification obligation undertaken by any Grantor under any Third Lien Document and each other holder of, or oblige in respect of, any Third Lien Indenture Notes, any holder or lender pursuant to any Third Lien Document outstanding at such time.

 

“Third Lien Security Agreement” means the Pledge and Security Agreement dated as of May 21, 2015, by and among Midstates, each of the other Grantors party thereto and the Third Lien Collateral Agent, for the ratable benefit of the Third Lien Secured Parties.

 

“Third Lien Security Documents” means the Third Lien Security Agreement, each other agreement listed in Part C of Exhibit B 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 Midstates or any other Grantor creating (or purporting to create) a Lien upon Collateral in favor of the Third Lien Collateral Agent (including any such agreements, assignments, mortgages, deeds of trust and other documents or instruments associated with any Third Lien Substitute Facility), in each case, as amended, modified, renewed, restated or replaced, in whole or in part, from time to time, in accordance with its terms and Section 4.05.

 

“Third Lien Substitute Facility” means any facility with respect to which the requirements contained in Section 4.04 of this Agreement have been satisfied and that is permitted to be incurred pursuant to the Priority Lien Documents and the Second Lien Documents and, in the case of a Replacement of the Third Lien Indenture Notes in part, the Second Lien Documents, the proceeds of

 

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which are used to, among other things, Replace the Third Lien Indenture.  For the avoidance of doubt, no Third 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 Third Lien Substitute Facility shall be subject to the terms of this Agreement for all purposes (including the lien priority as set forth herein as of the date hereof) as the other Liens securing the Third Lien Obligations are subject to under this Agreement.

 

“Third Lien Trustee” means the Original Third Lien Trustee, and, from and after the date of execution and delivery of the Third Lien Substitute Facility whereby the holders of such indebtedness and other Obligations evidenced thereunder or governed thereby represent the largest outstanding principal amount of any then outstanding Third Lien Debt, 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.

 

“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 (including electronic funds transfer), automated clearinghouse, zero balance accounts, returned check concentration, controlled disbursement, lockbox, interstate depository network services, account reconciliation and reporting and trade finance services and other cash management services.

 

ARTICLE II
 LIEN PRIORITIES

 

Section 2.01                             Relative Priorities.  (a) The grant of the Priority Liens pursuant to the Priority Lien Documents, the grant of the Second Liens pursuant to the Second Lien Documents and the grant of the Third Liens pursuant to the Third Lien Documents create three separate and distinct Liens on the Collateral.

 

(b)                                 Notwithstanding anything contained in this Agreement, the Priority Lien Documents, the Second Lien Documents, the Third Lien Documents or any other agreement or instrument or operation of law to the contrary, or any other circumstance whatsoever and irrespective of (i) how a Lien was acquired (whether by grant, possession, statute, operation of law, subrogation, or otherwise), (ii) the time, manner, order of the grant, attachment or perfection of a Lien, (iii) any conflicting provision of the New York UCC or other applicable law, (iv) any defect in, or non-perfection, setting aside, or avoidance of, a Lien or a Priority Lien Document, a Second Lien Document or a Third Lien Document, (v) the modification of a Priority Lien Obligation, a Second Lien Obligation or a Third Lien Obligation or (vi) the subordination of a Lien on Collateral securing a Priority Lien Obligation to a Lien securing another obligation of Midstates or other Person that is permitted under the Priority Lien Documents as in effect on the date hereof or securing a DIP Financing, or the subordination of a Lien on Collateral securing a Second Lien Obligation to a Lien securing another obligation of Midstates or other Person (other than a Priority Lien Obligation) that is permitted under the Second Lien Documents as in effect on the date hereof, each of the Second Lien Collateral Agent, on behalf of itself and the other Second Lien Secured Parties, and the Third Lien Collateral Agent, on behalf of itself and the other Third Lien Secured Parties, hereby agrees that (i) any Priority Lien on any Collateral now or hereafter held by or for the benefit of any Priority Lien Secured Party shall be senior in right, priority, operation, effect and all other respects to (A) any and all Second Liens on any Collateral and (B) any and all Third Liens on any Collateral, (ii) any Second Lien on any Collateral now or hereafter held by or for the benefit of any Second Lien Secured Party shall be (A) junior and subordinate in right, priority, operation, effect and all other respects to any and all Priority Liens on any Collateral, in any case, subject to the Priority Lien Cap as provided herein and (B) senior in right, priority, operation, effect and all other respects to any and all

 

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Third Liens on any Collateral and (iii) any Third Lien on any Collateral now or hereafter held by or for the benefit of any Third Lien Secured Party shall be junior and subordinate in right, priority, operation, effect and all other respects to (A) any and all Priority Liens on any Collateral, in any case, subject to the Priority Lien Cap as provided herein and (B) any and all Second Liens on any Collateral.

 

(c)                                  It is acknowledged that, subject to the Priority Lien Cap (as provided 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) (A) the Priority Lien Documents may be replaced, restated, supplemented, restructured or otherwise amended or modified from time to time and (B) 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, in the case of the foregoing (A) and (B), all without affecting the subordination of the Second Liens or Third Liens hereunder or the provisions of this Agreement defining the relative rights of the Priority Lien Secured Parties, the Second Lien Secured Parties and the Third 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 any of the Priority Lien Obligations (or any part thereof), the Second Lien Obligations (or any part thereof) or the Third 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 other Secured Party may take or fail to take in respect of any Collateral.

 

Section 2.02                             Prohibition on Marshalling, Etc.  (a) Until the Discharge of Priority Lien Obligations, neither the Second Lien Collateral Agent nor any other Second Lien Secured Party will assert, and hereby waive, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or claim the benefit of any marshalling, appraisal, valuation or other similar right that may be available to a junior secured creditor with respect to the Collateral or any similar rights a junior secured creditor may have under applicable law.

 

(b)                                 Until the Discharge of Priority Lien Obligations and the Discharge of Second Lien Obligations, neither the Third Lien Collateral Agent nor any other Third Lien Secured Party will assert, and hereby waive, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or claim the benefit of any marshalling, appraisal, valuation or other similar right that may be available to a junior secured creditor with respect to the Collateral or any similar rights a junior secured creditor may have under applicable law.

 

Section 2.03                             No New Liens.  The parties hereto agree that, (a) 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, (i) grant or permit any additional Liens on any asset of a Grantor to secure any Third Lien Obligation, or take any action to perfect any additional Liens, unless it has granted, or substantially concurrently therewith grants (or offers to grant), a Lien on such asset of such Grantor to secure (A) the Priority Lien Obligations and has taken all actions required to perfect such Liens and (B) the Second Lien Obligations and has taken all actions required to perfect such Liens; provided, however, the refusal or inability of the Priority Lien Agent or the Second Lien Collateral Agent to accept such Lien will not prevent the Third Lien Collateral Agent from taking the Lien, (ii) grant or permit any additional Liens on any asset of a Grantor to secure any Second Lien Obligation, or take any action to perfect any additional Liens, unless it has granted, or substantially concurrently therewith grants (or offers to grant), a Lien on such asset of such Grantor to secure (A) the Priority Lien Obligations and has taken all actions required to perfect such Liens and (B) the Third Lien Obligations and has taken all actions required to perfect such Liens; provided, however, the refusal or inability of the Priority Lien Agent or the Third Lien Collateral

 

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Agent to accept such Lien will not prevent the Second Lien Collateral Agent from taking the Lien or (iii) grant or permit any additional Liens on any asset of a Grantor to secure any Priority Lien Obligation, or take any action to perfect any additional Liens, unless it has granted, or substantially concurrently therewith grants (or offers to grant), a Lien on such asset of such Grantor to secure (A) the Second Lien Obligations and has taken all actions required to perfect such Liens and (B) the Third Lien Obligations and has taken all actions required to perfect such Liens; provided, however, the refusal or inability of the Second Lien Collateral Agent or the Third Lien Collateral Agent to accept such Lien will not prevent the Priority Lien Agent from taking the Lien and (b) after the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations, none of the Grantors shall, nor shall any Grantor permit any of its subsidiaries to, (i) grant or permit any additional Liens on any asset of a Grantor to secure any Second Lien Obligation, or take any action to perfect any additional Liens, unless it has granted, or substantially concurrently therewith grants (or offers to grant), a Lien on such asset of such Grantor to secure the Third Lien Obligations; provided, however, the refusal or inability of the Third Lien Collateral Agent to accept such Lien will not prevent the Second Lien Collateral Agent from taking the Lien or (ii) grant or permit any additional Liens on any asset of a Grantor to secure any Third Lien Obligations unless it has granted, or substantially concurrently therewith grants (or offers to grant), a Lien on such asset of a Grantor to secure the Second Lien Obligations and has taken all actions required to perfect such Liens; provided, however, the refusal or inability of the Second Lien Collateral Agent to accept such Lien will not prevent the Third Lien Collateral Agent from taking the Lien, with each such Lien as described in clauses (a) and (b) of this Section 2.03 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, the other Priority Lien Secured Parties, the Second Lien Collateral Agent or the other Second Lien Secured Parties, each of the Second Lien Collateral Agent, for itself and on behalf of the other Second Lien Secured Parties and the Third Lien Collateral Agent, for itself and on behalf of the other Third Lien Secured Parties, agrees that any amounts received by or distributed to any Second Lien Secured Party or Third Lien Secured Party, as applicable, 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).

 

Section 2.04                             Similar Collateral and Agreements.  The parties hereto acknowledge and agree that it is their intention that the Priority Lien Collateral, the Second Lien Collateral and the Third 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, the Second Lien Collateral Agent or the Third Lien Collateral Agent, the specific assets included in the Priority Lien Collateral, the Second Lien Collateral and the Third Lien Collateral, the steps taken to perfect the Priority Liens, the Second Liens and the Third Liens thereon and the identity of the respective parties obligated under the Priority Lien Documents, the Second Lien Documents and the Third Lien Documents in respect of the Priority Lien Obligations, the Second Lien Obligations and the Third Lien Obligations, respectively, (b) that the Second Lien Security Documents providing for the Second Liens shall be in all material respects the same forms of documents providing for the Priority Liens as the respective Priority Lien Security Documents creating Liens on the Collateral other than as to (i) 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, (iii) provisions in the Second Lien Security Documents which relate solely to the rights and duties of the Second Lien Collateral Agent and the other Second Lien Secured Parties, and (iv) such deletions or modifications of representations, warranties and covenants as are customary with respect to security documents establishing Liens securing publicly traded debt securities, (c) that the Third Lien Security Documents providing for the Third Liens shall be in all material respects the same forms of documents providing for Priority Liens and Second Liens other than as to (i) the priority nature of the Liens created thereunder in such Collateral, (ii) such other modifications to such Third Lien Security Documents which are less restrictive than the corresponding Priority Lien Security Documents and Second Lien Security

 

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Documents, (iii) provisions in the Third Lien Security Documents which related solely to the rights and duties of the Third Lien Collateral Agent and the other Third Lien Secured Parties, and (iv) such deletions or modifications of representations, warranties and covenants as are customary with respect to security documents establishing Liens securing publicly traded debt securities (to the extent applicable), (d) 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 and (e) that at no time shall there be any Grantor that is an obligor in respect of the Third Lien Obligations that is not also an obligor in respect of the Priority Lien Obligations and the Second Lien Obligations.

 

Section 2.05                             No Duties of Priority Lien Agent.  Each of the Second Lien Collateral Agent, for itself and on behalf of each Second Lien Secured Party, and the Third Lien Collateral Agent, for itself and on behalf of each Third 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 any Second Lien Secured Party or Third Lien Secured Party with respect to any Collateral, other than to transfer to the Second Lien Collateral Agent any remaining Collateral and any proceeds of the sale or other Disposition of any such Collateral remaining in its possession following the Discharge of Priority Lien Obligations, in each case, without representation or warranty on the part of the Priority Lien Agent or any other Priority Lien Secured Party.  In furtherance of the foregoing, each Second Lien Secured Party and Third 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 and the Third Lien Secured Parties following the expiration of any applicable 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 the Collateral, as provided herein and in the Priority Lien Documents, without regard to (a) any Second Lien or any rights to which the Second Lien Collateral Agent or any other Second Lien Secured Party would otherwise be entitled as a result of such Second Lien or (b) any Third Lien or any rights to which the Third Lien Collateral Agent or any other Third Lien Secured Party would otherwise be entitled as a result of such Third Lien.  Without limiting the foregoing, each of the Second Lien Collateral Agent, for itself and on behalf of each Second Lien Secured Party, and the Third Lien Collateral Agent, for itself and on behalf of each Third 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 or the Third 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 or the Third Lien Secured Parties, as applicable, from such realization, sale, Disposition or liquidation.  Each of the Second Lien Collateral Agent, for itself and on behalf of each Second Lien Secured Party, and the Third Lien Collateral Agent, for itself and on behalf of each Third Lien Secured Party, hereby waives any claim any Second Lien Secured Party or any Third 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 any other 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 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.

 

Section 2.06                             No Duties of Second Lien Collateral Agent.  The Third Lien Collateral Agent, for itself and on behalf of each Third Lien Secured Party, acknowledges and agrees that neither the Second Lien Collateral Agent nor any other Second Lien Secured Party shall have any duties or other obligations to such Third Lien Secured Party with respect to any Collateral, other than to transfer to the Third Lien Collateral Agent any remaining Collateral and any proceeds of the sale or other Disposition of

 

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any Collateral remaining in its possession following the Discharge of Second Lien Obligations (provided that such discharge of Second Lien Obligations occurs after the Discharge of Priority Lien Obligations), in each case, without representation or warranty on the part of the Second Lien Collateral Agent or any Second Lien Secured Party.  In furtherance of the foregoing, the Third Lien Collateral Agent, for itself and on behalf of each Third Lien Secured Party, acknowledges and agrees that after the Discharge of Priority Lien Obligations and until the Discharge of Second Lien Obligations (subject to the terms of Section 3.02, including the rights of the Third Lien Secured Parties following expiration of the Third Lien Second Standstill Period), the Second Lien Collateral Agent shall be entitled, for the benefit of the Second Lien Secured Parties, to sell, transfer or otherwise Dispose of or deal with such Collateral, as provided herein and in the Second Lien Documents, without regard to any Third Lien or any rights to which the Third Lien Collateral Agent or any Third Lien Secured Party would otherwise be entitled as a result of such Third Lien.  Without limiting the foregoing, each Third Lien Secured Party agrees that neither the Second Lien Collateral Agent nor any other Second 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 Third 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 Third Lien Secured Parties from such realization, sale, Disposition or liquidation.  Following the Discharge of Second Lien Obligations, the Third Lien Collateral Agent and the other Third Lien Secured Parties may, subject to any other agreements binding on the Third Lien Collateral Agent or such other Third 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 Third Lien Secured Parties.  The Third Lien Collateral Agent, for itself and on behalf of each Third Lien Secured Party, hereby waives any claim any Third Lien Secured Party may now or hereafter have against the Second Lien Collateral Agent or any other Second Lien Secured Party arising out of any actions which the Second Lien Collateral Agent or the Second 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 Collateral, and actions with respect to the collection of any claim for all or any part of the Second Lien Obligations from any account debtor, guarantor or any other party) in accordance with this Agreement and the Second Lien Documents or the valuation, use, protection or release of any security for the Second Lien Obligations.

 

ARTICLE III
 ENFORCEMENT RIGHTS; PURCHASE OPTION

 

Section 3.01                             Limitation on Enforcement Action.  (a) Prior to the Discharge of Priority Lien Obligations, each of the Second Lien Collateral Agent, for itself and on behalf of each other Second Lien Secured Party, and the Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, hereby agrees that, subject to Section 3.05(b) and Section 4.07, none of the Second Lien Collateral Agent, any other Second Lien Secured Party, the Third Lien Collateral Agent or any other Third 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 or Third Lien Security Document, as applicable, applicable law or otherwise (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 (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 Agent, any other Second Lien Secured Party, the Third Lien Collateral Agent or any other Third Lien Secured Party.  In exercising rights and remedies with respect to

 

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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 and regardless of whether such exercise and enforcement is adverse to the interest of any Second Lien Secured Party or Third Lien Secured Party.  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, any other Bankruptcy Law and any other applicable law.  Without limiting the generality of the foregoing, 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”) and any funds or financial assets therein, including exercising rights under control agreements with respect to such Accounts.  Each of the Second Lien Collateral Agent, for itself and on behalf of the other Second Lien Secured Parties and the Third Lien Collateral Agent, for itself and on behalf of the other Third Lien Secured Parties, hereby acknowledges and agrees that no covenant, agreement or restriction contained in any Second Lien Security Document, any other Second Lien Document, any Third Lien Security Document or any other Third Lien Document, as applicable, 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.  Notwithstanding the foregoing, subject to Section 3.05, each of the Second Lien Collateral Agent, on behalf of the Second Lien Secured Parties, and the Third Lien Collateral Agent, on behalf of the Third Lien Secured Parties, may, but will have no obligation to, take all such actions (not adverse to the Priority Liens or the rights of the Priority Lien Agent and the other 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 or to perfect or continue the perfection of the Third Liens in the Collateral or to create, preserve or protect (but not enforce) the Third Liens in the Collateral, as applicable.  Nothing herein shall limit the right or ability of the Second Lien Secured Parties or the Third Lien Secured Parties to (i) purchase (by credit bid or otherwise) all or any portion of the Collateral in connection with any enforcement of remedies by the Priority Lien Agent to the extent that, and so long as, the Priority Lien Secured Parties receive payment in full in cash of all Priority Lien Obligations (subject to the Priority Lien Cap) after giving effect thereto, and in the case of such a purchase (by credit bid or otherwise) by the Third Lien Secured Parties, the Second Lien Secured Parties receive payment in full in cash of all Second Lien Obligations after giving effect thereto, or (ii) file a proof of claim with respect to the Second Lien Obligations or the Third Lien Obligations, as applicable.

 

(b)                                 Following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations, the Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, hereby agrees that, subject to Section 3.05(b) and Section 4.07, neither the Third Lien Collateral Agent nor any other Third 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 Third Lien Security Document, applicable law or otherwise (including but not limited to any right of setoff), it being agreed that only the Second Lien Collateral Agent, acting in accordance with the applicable Second Lien Documents, shall have the exclusive right (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 Third Lien Collateral Agent or any other Third Lien Secured Party.  In exercising rights and remedies with respect to the Collateral, the Second Lien Collateral Agent and the other Second Lien Secured Parties may enforce the provisions of the Second Lien Documents and exercise remedies thereunder, all in such order and in such manner as they may determine in their sole discretion and regardless of whether such exercise and enforcement is adverse to the interest of any Third Lien Secured

 

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Party.  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, the Second Lien Collateral Agent will have the exclusive right to deal with the Accounts and any funds or financial assets therein, including exercising rights under control agreements with respect to such Accounts.  The Third Lien Collateral Agent, for itself and on behalf of the other Third Lien Secured Parties, hereby acknowledges and agrees that no covenant, agreement or restriction contained in any Third Lien Security Document or any other Third Lien Document shall be deemed to restrict in any way the rights and remedies of the Second Lien Collateral Agent or the other Second Lien Secured Parties with respect to the Collateral as set forth in this Agreement.  Notwithstanding the foregoing, subject to Section 3.05, the Third Lien Collateral Agent may, but will have no obligation to, on behalf of the Third Lien Secured Parties, take all such actions (not adverse to the Second Liens or the rights of the Second Lien Collateral Agent and the Second Lien Secured Parties) it deems necessary to perfect or continue the perfection of the Third Liens in the Collateral or to create, preserve or protect (but not enforce) the Third Liens in the Collateral.  Nothing herein shall limit the right or ability of the Third Lien Secured Parties to (i) purchase (by credit bid or otherwise) all or any portion of the Collateral in connection with any enforcement of remedies by the Second Lien Collateral Agent to the extent that, and so long as, (x) if the Discharge of Priority Lien Obligations has not occurred, the Priority Lien Secured Parties receive payment in full in cash of all Priority Lien Obligations (subject to the Priority Lien Cap), and (y) the Second Lien Secured Parties receive payment in full in cash of all Second Lien Obligations after giving effect thereto or (ii) file a proof of claim with respect to the Third Lien Obligations.

 

Section 3.02                             Standstill Periods; Permitted Enforcement Action.  (a) Prior to the Discharge of Priority Lien Obligations and notwithstanding the foregoing Section 3.01, both before and during an Insolvency or Liquidation Proceeding:

 

(i)                                     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 (A) any injunction issued by a court of competent jurisdiction or (B) the automatic stay or any other stay or other prohibition in any Insolvency or Liquidation Proceeding) since the date on which the Second Lien Collateral Agent has delivered to the Priority Lien Agent written notice of the acceleration of the Second Lien Debt (the “Second Lien Standstill Period”), the Second Lien Collateral Agent 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 Second Lien Standstill Period, in no event may the Second Lien Collateral Agent 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 any or all of the Priority Lien Secured Parties 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 or other prohibition in any Insolvency or Liquidation Proceeding to enable the commencement and pursuit thereof), the enforcement or exercise of any rights or remedies with respect to any material portion of the Collateral or any such action or proceeding (prompt written notice thereof to be given to the Second Lien Trustee by the Priority Lien Agent); provided, further, that, at any time after the expiration of the Second Lien Standstill Period, if neither the Priority Lien Agent nor any other Priority Lien Secured Party shall have commenced and be diligently pursuing (or shall have sought or requested relief from, or modification of, the automatic stay or any other stay or other prohibition 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, and the Second Lien Collateral Agent shall have

 

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commenced 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, then for so long as the Second Lien Collateral Agent is diligently pursuing such rights or remedies, none of any Priority Lien Secured Party, the Priority Lien Agent, any Third Lien Secured Party or the Third Lien Collateral Agent shall take any action of a similar nature 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; and

 

(ii)                                  after a period of 270 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 (A) any injunction issued by a court of competent jurisdiction or (B) the automatic stay or any other stay or other prohibition in any Insolvency or Liquidation Proceeding) since the date on which the Third Lien Collateral Agent has delivered to the Priority Lien Agent written notice of the acceleration of the Third Lien Debt (the “Third Lien First Standstill Period”), the Third Lien Collateral Agent and the other Third Lien Secured Parties may enforce or exercise any rights or remedies with respect to any Collateral; provided, however that notwithstanding the expiration of the Third Lien First Standstill Period, in no event may the Third Lien Collateral Agent or any other Third 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 (I) the Priority Lien Agent on behalf of any or all of the Priority Lien Secured Parties or any other Priority Lien Secured Party or (II) the Second Lien Collateral Agent on behalf of any or all of the Second Lien Secured Parties 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 or other prohibition in any Insolvency or Liquidation Proceeding to enable the commencement and pursuit thereof), the enforcement or exercise of any rights or remedies with respect of any material portion of the Collateral or any such action or proceeding (prompt written notice thereof to be given to the Third Lien Representatives by the Priority Lien Agent or the Second Lien Collateral Agent, as applicable); provided, further, that, at any time after the expiration of the Third Lien First Standstill Period, if none of any Priority Lien Secured Party, the Priority Lien Agent, any Second Lien Secured Party or the Second Lien Collateral Agent 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 Third Lien Collateral Agent 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 Third Lien Collateral Agent is diligently pursuing such rights or remedies, none of any Priority Lien Secured Party, the Priority Lien Agent, any Second Lien Secured Party or the Second Lien Collateral Agent shall take any action of a similar nature 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.

 

(b)                                 Following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations and 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 Second Lien Collateral Agent is not entitled, on behalf of the Second Lien Secured Parties, to enforce or exercise any rights or remedies with respect to any Collateral as a result of (A) any injunction issued by a court of competent jurisdiction or (B) the automatic stay or any other stay or other prohibition in any Insolvency or Liquidation Proceeding) since the date on which the Third Lien Collateral Agent has delivered to the Second Lien Collateral Agent written notice of the acceleration of any Third Lien Debt (the “Third Lien Second Standstill Period”), the Third Lien Collateral Agent and the other Third Lien Secured Parties may enforce or exercise any rights or remedies with respect to any Collateral; provided, however that notwithstanding the expiration of the Third Lien Second Standstill Period, in no event may the Third Lien Collateral Agent or any other Third Lien Secured Party enforce or exercise any rights or remedies with respect to any Collateral, or commence, join with any Person at any

 

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time in commencing, or petition for or vote in favor of any resolution for, any such action or proceeding, if the Second Lien Collateral Agent on behalf of the Second Lien Secured Parties or any other Second 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 or other prohibition 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 a material portion of the Collateral or any such action or proceeding (prompt written notice thereof to be given to the Third Lien Representatives by the Second Lien Collateral Agent); provided, further, that, at any time after the expiration of the Third Lien Second Standstill Period, if neither the Second Lien Collateral Agent nor any other Second 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 Third Lien Collateral Agent 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 Third Lien Collateral Agent is diligently pursuing such rights or remedies, neither any Second Lien Secured Party nor the Second Lien Collateral Agent shall take any action of a similar nature 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.

 

Section 3.03                             Insurance.  (a) 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 and the Third Lien Secured Parties following expiration of any applicable 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 of 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 Hedging Obligations).  If the Second Lien Collateral Agent, any other Second Lien Secured Party, the Third Lien Collateral Agent or any other Third Lien Secured Party shall, at any time, knowingly 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 accordance with the provisions hereof.  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 Agent, any other Second Lien Secured Party, the Third Lien Collateral Agent or any other Third 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 Agent, any such other Second Lien Secured Party, the Third Lien Collateral Agent and any such other Third 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 and the Third Lien Secured Parties following expiration of any applicable Standstill Period).

 

(b)                                 Following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations (subject to the terms of Section 3.02, including the rights of the Third Lien Secured Parties following the expiration of the Third Lien Second Standstill Period), the Second Lien Collateral Agent shall have the sole and exclusive right, subject to the rights of the Grantors under the Second 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

 

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proceeding (or any deed in lieu of condemnation) affecting the Collateral.  Unless and until the Discharge of Second Lien Obligations has occurred, and subject to the rights of the Grantors under the Second 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 Second Lien Collateral Agent pursuant to the terms of the Second Lien Documents and, after the Discharge of Second Lien Obligations has occurred, to the Third Lien Collateral Agent to the extent required under the Third Lien Documents and then, to the extent no Third 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 Third Lien Collateral Agent or any other Third Lien Secured Party shall, at any time following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations, 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 Second Lien Collateral 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 Third Lien Collateral Agent or any other Third 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 Second Lien Obligations has occurred, the Third Lien Collateral Agent and any such Third Lien Secured Party shall follow the instructions of the Second Lien Collateral Agent, or of the Grantors under the Second Lien Documents to the extent the Second 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 Third Lien Secured Parties following the expiration of the Third Lien Second Standstill Period).

 

Section 3.04                             Notification of Release of Collateral.  Each of the Priority Lien Agent, the Second Lien Collateral Agent and the Third Lien Collateral Agent shall give the other Secured Debt Representatives 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.

 

Section 3.05                             No Interference; Payment Over.

 

(a)                                 No Interference.  (i) The Second Lien Collateral Agent, for itself and on behalf of each other 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 any Collateral 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 the Priority Lien Agent or any other Priority Lien Secured Party, (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)

 

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prior to the Discharge of Priority Lien Obligations, will not seek, and hereby waives any right, to have any Collateral or any part thereof marshaled upon any foreclosure or other Disposition of such Collateral, (vii) prior to the Discharge of Priority Lien Obligations, 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 other Priority Lien Secured Party, and (ix) prior to the Discharge of Priority Lien Obligations, 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 to a junior secured creditor with respect to the Collateral or any similar rights a junior secured creditor may have under applicable law; and

 

(ii)                                  The Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, agrees that each Third 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 Third Lien pari passu with, or to give such Third Lien Secured Party any preference or priority relative to, any Priority Lien or Second Lien with respect to the Collateral or any part thereof, (ii) will not challenge or question in any proceeding the validity or enforceability of any Priority Lien Obligations, Priority Lien Document, Second Lien Obligations or Second Lien Document, or the validity, attachment, perfection or priority of any Priority Lien or Second 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 the Priority Lien Agent, or any other Priority Lien Secured Party or by the Second Lien Collateral Agent or any other Second Lien Secured Party, (iv) shall have no right to (A) direct the Priority Lien Agent, any other Priority Lien Secured Party, the Second Lien Collateral Agent or any other Second 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, any other Priority Lien Secured Party, the Second Lien Collateral Agent or any other Second 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, any other Priority Lien Secured Party, the Second Lien Collateral Agent or any other Second Lien Secured Party seeking damages from or other relief by way of specific performance, instructions or otherwise with respect to, and none of the Priority Lien Agent, any other Priority Lien Secured Party, the Second Lien Collateral Agent or any other Second Lien Secured Party shall be liable for, any action taken or omitted to be taken by the Priority Lien Agent, any other Priority Lien Secured Party, the Second Lien Collateral Agent or any other Second Lien Secured Party with respect to any Priority Lien Collateral or Second Lien Collateral, as applicable, (vi) will not seek, and hereby waives any right, to have any Collateral or any part thereof marshaled 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, any Priority Lien Secured Party, the Second Lien Collateral Agent or any Second 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 to a junior secured creditor with respect to the Collateral or any similar rights a junior secured creditor may have under applicable law.

 

(b)                                 Payment Over.  (i) Each of the Second Lien Collateral Agent, for itself and on behalf of each other Second Lien Secured Party, and the Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, hereby agrees that if any Second Lien Secured Party or Third Lien Secured Party, as applicable, shall obtain possession of any Collateral or shall realize any proceeds or payment in respect of any Collateral, pursuant to the exercise of any rights or remedies with

 

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respect to the Collateral under any Second Lien Security Document or Third Lien Security Document, as applicable, or by the exercise of any rights available to it under applicable law or in any Insolvency or Liquidation Proceeding, to the extent permitted hereunder, at any time prior to the Discharge of Priority Lien Obligations secured, or intended to be secured, by such Collateral, 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 as promptly as practicable.  Furthermore, the Second Lien Collateral Agent or the Third Lien Collateral Agent, as applicable, shall, at the Grantors’ expense, promptly send written notice to the Priority Lien Agent upon receipt of such Collateral by any Second Lien Secured Party or Third Lien Secured Party, as applicable, 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 Agent, any other Second Lien Secured Party, the Third Lien Collateral Agent or any other Third Lien Secured Party, as applicable.  Each of the Second Lien Collateral Agent, for itself and on behalf of each other Second Lien Secured Party, and the Third Lien Collateral Agent, for itself and on behalf of each other Third 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 and Third 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 Agent, any other Second Lien Secured Party, the Third Lien Collateral Agent or any other Third Lien Secured Party, as applicable, is otherwise not prohibited by the Priority Lien Documents.

 

(ii)                                  The Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, hereby agrees that if any Third Lien Secured Party shall obtain possession of any Collateral or shall realize any proceeds or payment in respect of any Collateral, pursuant to the exercise of any rights or remedies with respect to the Collateral under any Third Lien Security Document or by the exercise of any rights available to it under applicable law or in any Insolvency or Liquidation Proceeding, to the extent permitted hereunder, at any time following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations secured, or intended to be secured, by such Collateral, then it shall hold such Collateral, proceeds or payment in trust for the Second Lien Collateral Agent and the other Second Lien Secured Parties and transfer such Collateral, proceeds or payment, as the case may be, to the Second Lien Collateral Agent reasonably promptly after obtaining written notice from the Second Lien Secured Parties that it has possession of such Collateral or proceeds or payments in respect thereof.  Furthermore, the Third Lien Collateral Agent shall, at the Grantors’ expense, promptly send written notice to the Second Lien Collateral Agent upon receipt of such Collateral by any Third Lien Secured Party, proceeds or payment and if directed by the Second Lien Collateral Agent within five (5) days after receipt by the Second Lien Collateral Agent of such written notice, shall deliver such Collateral, proceeds or payment to the Second Lien Collateral Agent in the same form as received, with any necessary endorsements, or as court of competent jurisdiction may otherwise direct.  The Second Lien Collateral Agent is hereby authorized to make any such endorsements as agent for the Third Lien Collateral Agent or any other Third Lien Secured Party.  The Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, agrees that if, at any time, it obtains written notice that all or part of any payment with respect to any Second Lien Obligations previously made shall

 

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be rescinded for any reason whatsoever, it will promptly pay over to the Second Lien Collateral Agent any payment received by it and then in its possession or under its direct control in respect of any such Second Lien Collateral and shall promptly turn any such Collateral then held by it over to the Second Lien Collateral Agent, and the provisions set forth in this Agreement will be reinstated as if such payment had not been made, until the Discharge of Second Lien Obligations.  All Third 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 Second Lien Documents and as to which the possession or receipt thereof by the Third Lien Collateral Agent or any other Third Lien Secured Party is otherwise not prohibited by the Second Lien Documents.

 

Section 3.06     Purchase Option for Second Lien Purchasers.

 

(a)                                 Notwithstanding anything in this Agreement to the contrary, on or at any time after (i) the commencement of an Insolvency or Liquidation Proceeding or (ii) the acceleration of the Priority Lien Obligations (each, a “Priority Lien Trigger Event”), each of the holders of the Second Lien Debt and each of their respective designated Affiliates (the “Second Lien Purchasers”) will have the right, at their sole option and election (but will not be obligated), at any time after the occurrence of the first Priority Lien Trigger Event (but only if Third Lien Purchasers shall not have exercised their option described below by sixty (60) days after the occurrence of the first Priority Lien Trigger Event upon prior written notice to the applicable Priority Lien Agent and Second Lien Collateral Agent, to purchase from the holders of the Priority Lien Obligations and the Second Lien Obligations (x) all (but not less than all) Priority Lien Obligations (including unfunded commitments) other than any Priority Lien Obligations constituting Excess Priority Lien Obligations, (y) if applicable, all loans (and related obligations, including interest, fees and expenses) provided by any of the Priority Lien Secured Parties in connection with a DIP Financing that are outstanding on the date of such purchase and (z) all (but not less than all) Second Lien Obligations.  Promptly following the receipt of such notice (which notice will identify the Second Lien Purchaser Representative), the Priority Lien Agent will deliver to the Second Lien Purchaser Representative a statement of the amount of Priority Lien Debt, other Priority Lien Obligations (other than any Priority Lien Obligations constituting Excess Priority Lien Obligations) and DIP Financing (including interest, fees, expenses and other obligations in respect of such DIP Financing) provided by any of the Priority Lien Secured Parties, if any, 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 20 Business Days after the receipt by the Second Lien Purchaser Representative of such statement from the Priority Lien Agent, the Second Lien Purchaser Representative delivers to the Priority Lien Agent an irrevocable commitment of the Second Lien Purchasers to purchase (A) all (but not less than all) of the Priority Lien Obligations (including unfunded commitments) other than any Priority Lien Obligations constituting Excess Priority Lien Obligations and (B) if applicable, all loans (and related obligations, including interest, fees and expenses) provided by any of the Priority Lien Secured Parties in connection with a DIP Financing and to otherwise complete such purchase on the terms set forth under this Section 3.06.

 

(b)                                 On the date specified by the Second Lien Purchaser Representative (on behalf of the Second Lien 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 Second Lien Purchasers (i) all (but not less than all) Priority Lien Obligations (including unfunded commitments) other than any Priority Lien Obligations constituting Excess Priority Lien Obligations and (ii) if applicable, all loans (and related obligations, including interest, fees and expenses) provided by any of the Priority Lien Secured Parties in connection with a DIP Financing that are outstanding on the date of such sale, subject to any required

 

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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 (i) all Priority Lien Obligations (other than outstanding letters of credit as referred to in clause (ii) below) other than any Priority Lien Obligations constituting Excess Priority Lien Obligations and (ii) if applicable, all loans (and related obligations, including interest, fees and expenses) provided by any of the Priority Lien Secured Parties in connection with a DIP Financing 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 Hedging Obligations that constitute Priority Lien Obligations the Second Lien Purchasers shall cause the applicable agreements governing such Hedging Obligations to be assigned and novated or, if such agreements have been terminated, such purchase price shall include an amount equal to the sum of any unpaid amounts then due in respect of such Hedging Obligations, calculated using the market quotation method and after giving effect to any netting arrangements;

 

(ii)                                  a cash collateral deposit 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 Debt;

 

(iii)                               that may become due and payable after such sale (but not in any event in an amount greater than one hundred five percent (105%) 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 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 Second Lien 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

 

(iv)                              any agreements, documents or instruments which the Priority Lien Agent may reasonably request pursuant to which the Second Lien Purchaser Representative and the Second Lien 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 and in connection with loans (and related obligations, including interest, fees and expenses) provided by any of the Priority Lien Secured Parties in connection with a DIP Financing on and after the date of the purchase and sale and the Second Lien Purchaser Representative (or any other representative appointed by the holders of a majority in aggregate principal amount of the Second Lien Indenture Notes then outstanding) becomes a successor agent thereunder.

 

(c)                                  Such purchase of the Priority Lien Obligations (including unfunded commitments) and any loans provided by any of the Priority Lien Secured Parties in connection with a DIP Financing shall be made on a pro rata basis among the Second Lien Purchasers giving notice to the Priority Lien Agent of their interest to exercise the purchase option hereunder according to each such Second Lien Purchaser’s portion of the Second Lien Debt outstanding on the date of purchase or such portion as such Second Lien Purchasers may otherwise agree among themselves.  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 Second Lien 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 Second Lien Purchasers to the bank account designated by

 

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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 Second Lien Purchasers 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.

 

(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 (including unfunded commitments) and any loans provided by any of the Priority Lien Secured Parties in connection with a DIP Financing then owing to it: (i) that such applicable Priority Lien Secured Party own such Priority Lien Obligations (including unfunded commitments) and any loans provided by any of the Priority Lien Secured Parties in connection with a DIP Financing; 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 solely by the cash collateral provided pursuant to Section 3.06(b)(ii).

 

Section 3.07     Purchase Option for Third Lien Purchasers.

 

(a)                                 Notwithstanding anything in this Agreement to the contrary, on or at any time after (i) a Priority Lien Trigger Event has occurred, (ii) the commencement of an Insolvency or Liquidation or (iii) the acceleration of the Second Lien Obligations (any such event, a “Third Lien Purchase Trigger Event”), each of the holders of the Third Lien Debt and each of their respective designated affiliates (the “Third Lien Purchasers”) will have the right, at their sole option and election (but will not be obligated), at any time within sixty (60) days after the occurrence of the Third Lien Purchase Trigger Event (A) upon prior written notice to the Priority Lien Agent, to purchase from the Priority Lien Secured Parties both (x) all (but not less than all) Priority Lien Obligations (including unfunded commitments) other than any Priority Lien Obligations constituting Excess Priority Lien Obligations and (y) if applicable, all loans (and related obligations, including interest, fees and expenses) provided by any of the Priority Lien Secured Parties in connection with a DIP Financing that are outstanding on the date of such purchase and (B) upon prior written notice to the Second Lien Trustee (who shall forward such notice to the holders of the Second Lien Indenture Notes), to purchase from the Second lien Secured Parties all (but not less than all) Priority Lien Obligations.  Promptly following the receipt of such notices described above, (which notice will identify the Third Lien Purchaser Representative), (i) the Priority Lien Agent will deliver to the Third Lien Purchaser Representative a statement of the amount of Priority Lien Debt, other Priority Lien Obligations (other than any Priority Lien Obligations constituting Excess Priority Lien Obligations) and DIP Financing provided by any of the Priority Lien Agent or holder of the Priority Lien Obligations, if any, then outstanding and the amount of the cash collateral requested by the Priority Lien Agent to be delivered pursuant to clause (2) of the immediately following paragraph and (ii) the applicable Second Lien Trustee will deliver to the Third Lien Purchaser Representative a statement of the amount of outstanding principal on the Second Lien Notes, the interest rate of the Second Lien Notes, and any Second Lien Obligations owed to the Second Lien Trustee and Second Lien Collateral Agent.  The right to purchase provided for in this paragraph will expire unless, within 15 Business Days after the receipt by the Third Lien Purchaser Representative of such statements from the applicable Priority Lien Agent and Second Lien Trustee, the Third Lien Purchaser Representative (i) delivers to the applicable Priority Lien Agent an irrevocable commitment of the Third Lien Purchasers to purchase all (but not less than all) of the Priority Lien Obligations (including unfunded commitments) other than any Priority Lien Obligations constituting Excess Priority Lien Obligations and any loans provided by any of the Priority Lien Agent or any holder of Priority Lien

 

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Obligations in connection with a DIP Financing and (ii) delivers to the applicable to the Second Lien Trustee (who shall forward such notice to the holders of the Second Lien Indenture Notes)an irrevocable commitment of the Third Lien Purchasers to purchase all (but not less than all) of the Second Lien Obligations and to otherwise complete the purchase on the terms set forth under this Section 3.07.

 

(b)                                 On the date specified by the Third Lien Purchaser Representative (on behalf of the Third Lien Purchasers) in such irrevocable commitment (which shall not be less than five Business Days, nor more than 20 Business Days (as such date may be extended by the Third Lien Purchaser Representative (on behalf of the Third Lien Purchasers) and the holders of the Second Lien Debt (or their appointed representative), after the receipt by the applicable Priority Lien Agent and Second Lien Trustee of such irrevocable commitment), (x) the holders of the Priority Lien Obligations shall sell to the Third Lien Purchasers all (but not less than all) Priority Lien Obligations (including unfunded commitments) other than any Priority Lien Obligations constituting Excess Priority Lien Obligations and any loans provided by the Priority Lien Collateral Agent or any holder of Priority Lien Obligations in connection with a DIP Financing that are outstanding on the date of such sale and (y) the holders of the Second Lien Debt shall sell to the Third Lien Purchasers all (but not less than all) of the Second Lien Debt and amounts owed to the Second Lien Trustee and Second Lien Collateral Agent shall be paid to such Second Lien Trustee and Second Lien Collateral Agent, subject in each case to any required approval of any court or other regulatory or governmental authority then in effect, if any, and only if on the date of such sale, (I) the applicable 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 as referred to in the clause (ii) of this Section 3.07(b)) other than any Priority Lien Obligations constituting Excess Priority Lien Obligations and loans provided by any of the Priority Lien Agent or any holder of Priority Lien Obligations in connection with a DIP Financing 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 Obligations in respect of Hedging Obligations that are secured by the Priority Liens, the Parity Lien Purchasers shall cause the applicable agreements governing such Hedging Obligations to be assigned and novated or, if such agreements have been terminated, such purchase price shall include an amount equal to the sum of any unpaid amounts then due in respect of such Hedging Obligations, calculated using the market quotation method and after giving effect to any netting arrangements;

 

(ii)                                  a cash collateral deposit in such amount as the applicable Priority Lien Agent determines is reasonably necessary to secure the payment of any outstanding letters of credit constituting Priority Lien Debt that may become due and payable after such sale (but not in any event in an amount greater than one hundred five percent (105%) of the amount then reasonably estimated by the applicable Priority Lien Agent to be the aggregate outstanding amount of such letters of credit at such time), which cash collateral shall be (A) held by the applicable 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 Second Lien 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 applicable Priority Lien Agent may reasonably request pursuant to which the Third Lien Purchaser Representative

 

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and the Third Lien Purchasers in such sale expressly assume and adopt all of the Obligations of the applicable Priority Lien Agent and the holders of the Priority Lien Obligations under the documents providing for the Priority Lien and in connection with loans provided by the Priority Lien Agent or any holder of Priority Lien Obligations in connection with a DIP Financing on and after the date of the purchase and sale and the Third Lien Purchaser Representative (or any other representative appointed by the holders of a majority in aggregate principal amount of the Third Lien Obligations owned by the purchasers) becomes a successor agent thereunder; and

 

(II) the applicable holders of the Second Lien Indenture Notes receive the following:

 

(i)                                     payment, as the purchase price for all principal interest and other amounts owing to such holders of the Second Lien Debt sold in such sale, of an amount equal to the full amount of all Second Lien Obligations (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 as notified by such holders of the Second Lien Debt (or their appointed representative) to the Third Lien Purchaser Representative); and

 

(ii)                                  and the payment of Second Lien Obligations due and owing to the Second Lien Trustee and Second Lien Collateral Agent shall have been received.

 

(c)                                  The purchase of the Priority Lien Obligations (including unfunded commitments) and any loans provided by any of the Priority Lien Collateral Agent or any holder of Priority Lien Obligations in connection with a DIP Financing shall be made on a pro rata basis among the Third Lien Purchasers giving notice to the applicable Priority Lien Agent of their interest to exercise the purchase option under this Agreement according to each such holder’s portion of the Third Lien Debt owned by the purchasers or as such Third Lien Purchasers may otherwise agree.  Such purchase price and cash collateral shall be remitted by wire transfer in federal funds to such bank account of the applicable Priority Lien Agent as the applicable Priority Lien Agent may designate in writing to the Third Lien 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 Third Lien Purchaser Representative and holders of the Third Lien Debt to the bank account designated by the applicable 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 Third Lien Purchaser Representative and holders of the Third Lien Debt to the bank account designated by the applicable Priority Lien Agent are received in such bank account later than 12:00 noon, New York City time.

 

(d)                                 The purchase of the Second Lien Obligations shall be made on a pro rata basis among the Third Lien Purchasers giving notice to the applicable Second Lien Trustee (who shall forward such notice to the holders of the Second Lien Debt) or appointed representative of the holders of the Second Lien Debt of their interest to exercise the purchase option under this Agreement according to each such holder’s portion of the Third Lien Debt owned by the purchasers or as such Third Lien Purchasers may otherwise agree.  Such purchase price shall be remitted by wire transfer in federal funds to such bank account(s) as the holders of the Second Lien Debt (or their appointed representative) may designate in writing to the Third Lien 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 Third Lien Purchaser Representative and holders of the Third Lien Debt to the bank account(s) designated by the applicable the holders of the Second Lien Debt (or their appointed representative)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 Third Lien Purchaser Representative and holders of the Third Lien Debt to the bank account(s) designated by the applicable holders of the Second Lien Indenture Notes (or

 

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their appointed representative) are received in such bank account(s) later than 12:00 noon, New York City time.

 

(e)                                  Such sale shall be expressly made without representation or warranty of any kind by the applicable Priority Lien Agent and the holders of Priority Lien Obligations as to the Priority Lien Obligations, the Collateral or otherwise and without recourse to the applicable Priority Lien Agent and the holders of Priority Lien Obligations, except that the applicable Priority Lien Agent and the holders of Priority Lien Obligations shall represent and warrant severally as to the Priority Lien Obligations (including unfunded commitments) and any loans provided by any of the Priority Lien Agent or any holder of Priority Lien Obligations in connection with a DIP Financing then owing to them: (i) that the applicable Priority Lien Agent and such holders of the Priority Lien Obligations own the Priority Lien Obligations (including unfunded commitments) and any loans provided by any of the Priority Lien Agent or any holder of Priority Lien Obligations in connection with a DIP Financing; and (ii) the applicable Priority Lien Agent and such holders of the Priority Lien Obligations have the necessary corporate or other governing authority to assign such interests.

 

(f)                                   Such sale shall be expressly made without representation or warranty of any kind by the applicable Second Lien Collateral Agent and the holders of Second Lien Obligations as to the Second Lien Obligations, the Collateral or otherwise and without recourse to the applicable Second Lien Collateral Agent and the holders of Second Lien Obligations, except that the applicable holders of the Second Lien Debt shall be deemed to represent and warrant severally as to the Second Lien Obligations: (i) that the applicable holders of the Second Lien Indenture Notes own the Second Lien Obligations and (ii) the applicable holders of the Second Lien Indenture Notes have the necessary corporate or other governing authority to assign such interests.

 

(g)                                  After such sale becomes effective, the outstanding letters of credit will remain enforceable against the issuers thereof and will be secured solely by the cash collateral provided pursuant to Section 3.07(b)(ii).

 

(h)                                 In no event shall the Second Lien Collateral Agent or Second Lien Trustee be required to take any action in connection with the purchase or sale of the Second Lien Indenture Notes under this Section 3.07.  The purchases and sales of the Second Lien Obligations shall be coordinated among the holders of the Second Lien Obligations (or their appointed representative) and the Third Lien Purchaser Representative.

 

ARTICLE IV
 OTHER AGREEMENTS

 

Section 4.01     Release of Liens; Automatic Release of Second Liens and Third Liens.  (a) Prior to the Discharge of Priority Lien Obligations, each of the Second Lien Collateral Agent, for itself and on behalf of each other Second Lien Secured Party, and the Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, agrees that, in the event the Priority Lien Agent or the requisite Priority Lien Secured Parties under the Priority Lien Documents release the Priority Lien on any Collateral, each of the Second Lien and Third Lien on such Collateral shall terminate and be released automatically and without further action if (i) such release is permitted under the Second Lien Documents and the Third Lien Documents, as applicable (ii) 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, or (iii) such release is effected in connection with 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

 

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Code if the Priority Lien Agent or the requisite Priority Lien Secured Parties under the Priority Lien Documents shall have consented to such sale or Disposition of such Collateral; provided that, in the case of each of clauses (i), (ii) and (iii), (A) the net proceeds of such Collateral are applied pursuant to Section 6.01 and (B) the Second Liens and Third Liens on such Collateral shall attach to (and shall remain subject and subordinate to all Priority Liens securing Priority Lien Obligations, subject to the Priority Lien Cap and, in the case of the Third Liens, shall remain subject and subordinate to (I) all Priority Liens securing Priority Lien Obligations, subject to the Priority Lien Cap and (II) all Second Liens securing Second Lien Obligations) 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.

 

(b)                                 Following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations, the Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, agrees that, in the event the Second Lien Collateral Agent or the requisite Second Lien Secured Parties under the Second Lien Documents release the Second Lien on any Collateral, the Third Lien on such Collateral shall terminate and be released automatically and without further action if (i) such release is permitted under the Third Lien Documents, (ii) such release is effected in connection with the Second Lien Collateral Agent’s foreclosure upon, or other exercise of rights or remedies with respect to, such Collateral, or (iii) such release is effected in connection with 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 Second Lien Collateral Agent or the requisite Second Lien Secured Parties under the Second Lien Documents shall have consented to such sale or Disposition of such Collateral; provided that, in the case of each of clauses (i), (ii) and (iii), (A) the net proceeds of such Collateral are applied pursuant to Section 6.01 and (B) the Third Liens on such Collateral shall attach to (and shall remain subject and subordinate to all Second Liens securing Second Lien Obligations) any proceeds of a sale, transfer or other Disposition of Collateral not paid to the Second Lien Secured Parties or that remain after the Discharge of Second Lien Obligations.

 

(c)                                  Each of the Second Lien Collateral Agent and the Third Lien Collateral Agent 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 or the Second Lien Collateral Agent, as applicable, to evidence and confirm any release of Collateral provided for in this Section 4.01.

 

Section 4.02     Certain Agreements With Respect to Insolvency or Liquidation Proceedings.  (a) The parties hereto acknowledge that this Agreement is a “subordination agreement” under Section 510(a) of the Bankruptcy Code and shall continue in full force and effect, notwithstanding the commencement of any Insolvency or Liquidation Proceeding by or against Midstates or any subsidiary of Midstates.  All references in this Agreement to Midstates or any subsidiary of Midstates or any other Grantor will include such Person or Persons as a debtor-in-possession and any receiver or trustee for such Person or Persons in an Insolvency or Liquidation Proceeding.  For the purposes of this Section 4.02, unless otherwise provided herein, clauses (b) through and including (o) shall be in full force and effect prior to the Discharge of Priority Lien Obligations and clauses (p) through and including (cc) shall be in full force and effect following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations.

 

(b)                                 If Midstates or any of its subsidiaries shall become subject to any Insolvency or Liquidation Proceeding and shall, as debtor(s)-in-possession, or if any receiver or trustee for such Person or Persons shall, 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, (i) the Second Lien Collateral Agent, for itself and on behalf of each other Second Lien Secured Party, agrees that neither it nor any other Second Lien Secured Party and (ii)

 

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the Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, agrees that neither it nor any other Third Lien Secured Party, will raise any objection, contest or oppose (or join or support any third party in objecting, contesting or opposing), and each Second Lien Secured Party and Third Lien Secured Party shall be deemed to have consented to and 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, sale or lease of cash collateral that constitutes Collateral or to any grant of administrative expense priority or any super-administrative priority under Section 364 of the Bankruptcy Code, unless (A) the Priority Lien Agent opposes or objects to such DIP Financing or such DIP Financing Liens or such use of cash collateral, (B) the maximum principal amount of Indebtedness permitted under such DIP Financing exceeds the sum of (I) the amount of Priority Lien Obligations refinanced with the proceeds thereof (not including the amount of any Excess Priority Lien Obligations) and (II) $50,000,000 or (C) the terms of such DIP Financing provide for the sale of a substantial part of the Collateral (other than a sale or disposition pursuant to Section 363 of the Bankruptcy Code and with respect to which the Second Lien Secured Parties are deemed to have consented pursuant to Section 4.02(d)) or require the confirmation of a plan of reorganization containing specific terms or provisions (other than repayment in cash of such DIP Financing on the effective date thereof).  To the extent such DIP Financing Liens are senior to, or rank pari passu with, the Priority Liens, (1) the Second Lien Collateral Agent 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 Agent, 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 relative to the Priority Liens and the Third Liens as existed prior to the commencement of the case under the Bankruptcy Code and (2) the Third Lien Collateral Agent will, for itself and on behalf of the other Third Lien Secured Parties, subordinate the Third Liens on the Collateral to the Priority Liens, the Second Liens and to such DIP Financing Liens, so long as the Third Lien Collateral Agent, on behalf of the Third 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 relative to the Priority Liens and the Second Liens as existed prior to the commencement of the case under the Bankruptcy Code.

 

(c)                                  Prior to the Discharge of Priority Lien Obligations, without the written consent of the Priority Lien Agent, in its sole discretion, each of the Second Lien Collateral Agent, for itself and on behalf of each Second Lien Secured Party and the Third Lien Collateral Agent, for itself and on behalf of each Third Lien Secured Party, agrees not to propose, support or enter into any DIP Financing.

 

(d)                                 Each of the Second Lien Collateral Agent, for itself and on behalf of each other Second Lien Secured Party and the Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, agrees that it shall be deemed to have consented to, and shall not object to, oppose or contest (or join with or support any third party objecting to, opposing or contesting), a sale or other Disposition, a motion to sell or Dispose or the bidding procedures for such sale or Disposition of any Collateral (or any portion thereof) under Section 363 of the Bankruptcy Code or any other provision of the Bankruptcy Code if (1) the Priority Lien Agent or the requisite Priority Lien Secured Parties under the Priority Lien Documents shall have consented to such sale or Disposition, such motion to sell or Dispose or such bidding procedures for such sale or Disposition of such Collateral, (2) all Priority Liens, Second Liens and Third Liens will attach to the proceeds of the sale or Disposition in the same respective priorities as set forth in this Agreement, (3) Section 6.01 is complied with in connection with such Disposition or credit bid and (4) each of the Second Lien Collateral Agent, the holders of Second Lien Obligations, the Third Lien Collateral Agent and the holders of Third Lien Obligations shall have the right to credit bid all or any portion of the Collateral so long as the Priority Lien Agent and the holders of the Priority Lien Obligations receive payment in full in cash of all Priority Lien Obligations after giving effect thereto.

 

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

 

(f)                                   The Second Lien Collateral Agent, for itself and on behalf of each other Second Lien Secured Party, agrees that neither the Second Lien Collateral Agent nor any other Second Lien Secured Party and the Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, agrees that neither the Third Lien Collateral Agent nor any other Third 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

 

(A)                               the Second Lien Secured Parties may:

 

(I)                                   freely seek and obtain relief granting adequate protection only in the form of a replacement lien co-extensive in all respects with, but subordinated (as set forth in Section 2.01) to, and with the same relative priority to the Priority Liens and the Third Liens as existed prior to the commencement of the Insolvency or Liquidation Proceeding, all Liens granted in the Insolvency or Liquidation Proceeding to, or for the benefit of, the Priority Lien Secured Parties;

 

(II)                              with the prior written consent of the Priority Lien Agent, may seek and obtain relief granting a superpriority claim co-extensive in all respect with (but junior to) any such claims granted in the Insolvency or Liquidation Proceeding to or for the benefit of the holders of the Priority Lien Obligations 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; 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; and

 

(B)                               the Third Lien Secured Parties may:

 

(I)                                   freely seek and obtain relief granting adequate protection only in the form of a replacement lien co-extensive in all respects with, but subordinated (as set forth in Section 2.01) to, and with the same relative priority to the Priority Liens and the Second Liens as existed prior to the commencement of the Insolvency or Liquidation Proceeding, all Liens granted in the Insolvency or Liquidation Proceeding to, or for the benefit of, the Priority Lien Secured Parties and the Second Lien Secured Parties,

 

(II)                              with the prior written consent of the Priority Lien Agent and the Second Lien Collateral Agent, may seek and obtain relief granting a superpriority claim co-extensive in all respect with (but junior to) any such claims granted in the Insolvency or

 

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Liquidation Proceeding to or for the benefit of the holders of the Priority Lien Obligations and the holders of the Second Lien Obligations 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; 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 and the Discharge of Second Lien Obligations.

 

(g)                                  Each of the Second Lien Collateral Agent, for itself and on behalf of each of the other of the Second Lien Secured Parties and the Third Lien Collateral Agent, for itself and on behalf of each of the other Third Lien Secured Parties, waives any claim it or any such other Second Lien Secured Party or Third Lien Secured Party, as applicable, 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 Agent, 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 Agent nor any other Second Lien Secured Party and the Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, agrees that in any Insolvency or Liquidation Proceeding, neither the Third Lien Collateral Agent nor any other Third Lien Secured Party, shall support or vote to accept any plan of reorganization or disclosure statement of Midstates or any other Grantor unless such plan is either accepted by the Class of Priority Lien Secured Parties in accordance with Section 1126(c) of the Bankruptcy Code or provides for the payment in full in cash of all Priority Lien Obligations not constituting Excess Priority Lien Obligations on the effective date of such plan of reorganization.  Except as otherwise provided in this clause (h), each of the Second Lien Secured Parties and the Third Lien Secured Parties shall remain entitled to vote their claims in any such Insolvency or Liquidation Proceeding.

 

(i)                                     The Second Lien Collateral Agent, for itself and on behalf of each other Second Lien Secured Party, agrees that neither the Second Lien Collateral Agent nor any other Second Lien Secured Party and the Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, agrees that neither the Third Lien Collateral Agent nor any other Third 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 if the Priority Lien Agent has not received relief from the automatic stay (or it has not been lifted for the Priority Lien Agent’s benefit) without the prior written consent of the Priority Lien Agent.

 

(j)                                    The Second Lien Collateral Agent, for itself and on behalf of each other Second Lien Secured Party, agrees that neither the Second Lien Collateral Agent nor any other Second Lien Secured Party and the Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, agrees that neither the Third Lien Collateral Agent nor any other Third Lien Secured Party, shall oppose or seek to challenge (or join or support any third party in opposing or seeking to challenge) any claim by the Priority Lien Agent or any other Priority Lien Secured Party for allowance (but not payment until the Discharge of the Priority Lien Obligations has occurred) in any Insolvency or Liquidation Proceeding of Priority Lien Obligations consisting of post-petition interest, fees or expenses or cash collateralization of all letters of credit 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 or the

 

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Third Liens on the Collateral) subject to the Priority Lien Cap.  Neither Priority Lien Agent nor any other Priority Lien Secured Party shall oppose or seek to challenge any claim by the Second Lien Collateral Agent, any other Second Lien Secured Party, the Third Lien Collateral Agent or any other Third Lien Secured Party for allowance (but not payment until the Discharge of the Priority Lien Obligations has occurred) in any Insolvency or Liquidation Proceeding of Second Lien Obligations or Third Lien Obligations, as applicable, consisting of post-petition interest, fees or expenses to the extent of the value of the Second Liens or the Third Liens, as applicable, 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 Agent or any other Second Lien Secured Party or the Third Lien Collateral Agent or any other Third Lien Secured Party, as applicable.

 

(k)                                 Without the express written consent of the Priority Lien Agent, and subject to the provisions of Section 4.02(j), none of the Second Lien Collateral Agent, any other Second Lien Secured Party, the Third Lien Collateral Agent or any other Third 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, or to the cash collateralization of letters of credit, under Section 506(b) of the Bankruptcy Code subject to the Priority Lien Cap.

 

(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 each of the Second Lien Collateral Agent for itself and on behalf of each other Second Lien Secured Party and the Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, agrees that, any distribution or recovery they may receive in respect of any such Collateral shall 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 Agent or the Third Lien Collateral Agent, as applicable, 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.  Each of the Second Lien Collateral Agent, for itself and on behalf of each other Second Lien Secured Party and the Third Lien Collateral Agent, for itself and on behalf of each other Third 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 and Third Lien Secured Party for the limited purpose of carrying out the provisions of this Section 4.02(l) 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(l), which appointment is irrevocable and coupled with an interest.

 

(m)                             Each of the Second Lien Collateral Agent, for itself and on behalf of each other Second Lien Secured Party and the Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, hereby agrees that the Priority Lien Agent shall have the exclusive right to credit bid the Priority Lien Obligations subject to the Priority Lien Cap and further that none of the Second Lien Collateral Agent, any other Second Lien Secured Party, the Third Lien Collateral Agent or any other Third Lien Secured Party shall (or shall join with or support any third party in opposing, objecting to or contesting, as the case may be) oppose, object to or contest such credit bid by the Priority Lien Agent; provided that (A) Section 6.01 is complied with in connection with such credit bid and (B) each of the Second Lien Collateral Agent, the holders of Second Lien Obligations, the Third Lien Collateral Agent and the holders of Third Lien Obligations shall have the right to credit bid all or any

 

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portion of the Collateral so long as the Priority Lien Agent and the holders of the Priority Lien Obligations receive payment in full in cash of all Priority Lien Obligations after giving effect thereto.

 

(n)                                 Until the expiry of the Second Lien Standstill Period, in the case of the Second Lien Collateral Agent and the holders of Second Lien Obligations, and the expiry of the Third Lien First Standstill Period, in the case of the Third Lien Collateral Agent and the holders of Third Lien Obligations, without the written consent of the Priority Lien Agent in its sole discretion, each of the Second Lien Collateral Agent, for itself and on behalf of each other Second Lien Secured Party and the Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, agrees that it will not file an involuntary bankruptcy claim or seek the appointment of an examiner or a trustee for Midstates or any of its subsidiaries.

 

(o)                                 Each of the Second Lien Collateral Agent, for itself and on behalf of each other Second Lien Secured Party and the Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, waives any right to assert or enforce any claim under Section 506(c) or 552 of the Bankruptcy Code as against any Priority Lien Secured Party or any of the Collateral, except as expressly permitted by this Agreement.

 

(p)                                 If Midstates 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 DIP Financing to be provided by one or more DIP Lenders under Section 364 of the Bankruptcy Code or the use of cash collateral under Section 363 of the Bankruptcy Code, the Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, agrees that neither it nor any other Third Lien Secured Party will raise any objection, contest or oppose, and each Third Lien Secured Party will waive any claim such Person may now or hereafter have, to any such financing or to the DIP Financing Liens on the Collateral securing the same, or to any use, sale or lease of cash collateral that constitutes Collateral or to any grant of administrative expense priority or any super-administrative priority under Section 364 of the Bankruptcy Code, unless (i) the Second Lien Collateral Agent or the Second Lien Secured Parties oppose or object to such DIP Financing or such DIP Financing Liens or such use of cash collateral or (ii) the maximum principal amount of Indebtedness permitted under such DIP Financing exceeds the sum of (A) the amount of Second Lien Obligations refinanced with the proceeds thereof and (B) $50,000,000.  To the extent such DIP Financing Liens are senior to, or rank pari passu with, the Second Liens, the Third Lien Collateral Agent will, for itself and on behalf of each other Third Lien Secured Party, subordinate the Third Liens on the Collateral to the Second Liens and to such DIP Financing Liens, so long as the Third Lien Collateral Agent, on behalf of the Third 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 relative to the Priority Liens and the Second Liens as existed prior to the commencement of the case under the Bankruptcy Code.

 

(q)                                 Without the written consent of the Second Lien Collateral Agent (acting at the direction of a majority of the aggregate principal amount of the Second Lien Indenture Notes) in its sole discretion, the Third Lien Collateral Agent, for itself and on behalf of each Third Lien Secured Party, agrees not to propose, support or enter into any DIP Financing.

 

(r)                                    The Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, agrees that it shall be deemed to have consented to, and shall not object to, oppose or contest (or join with or support any third party objecting to, opposing or contesting), a sale or other Disposition, a motion to sell or Dispose or the bidding procedures for such sale or Disposition of any Collateral (or any portion thereof) under Section 363 of the Bankruptcy Code or any other provision of the Bankruptcy Code if (1) the Second Lien Collateral Agent or the requisite Second Lien Secured Parties under the Second Lien Documents shall have consented to such sale or Disposition, such motion to sell or

 

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Dispose or such bidding procedures for such sale or Disposition of such Collateral, (2) all Second Liens and Third Liens will attach to the proceeds of the sale or Disposition in the same respective priorities as set forth in this Agreement, (3) Section 6.01 is complied with in connection with such Disposition or credit bid and (4) each of the Third Lien Collateral Agent and the holders of Third Lien Obligations shall have the right to credit bid all or any portion of the Collateral so long as the Second Lien Agent and the holders of the Second Lien Obligations receive payment in full in cash of all Second Lien Obligations after giving effect thereto.

 

(s)                                   The Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, waives any claim that it may now or hereafter have against the Second Lien Collateral Agent or any other Second Lien Secured Party arising out of any DIP Financing Liens (granted in a manner that is consistent with this Agreement) or administrative expense priority or super-administrative priority under Section 364 of the Bankruptcy Code.

 

(t)                                    The Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, agrees that neither the Third Lien Collateral Agent nor any other Third 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 Second Lien Collateral Agent or any other Second Lien Secured Party for adequate protection or (ii) any objection by the Second Lien Collateral Agent or any other Second Lien Secured Party to any motion, relief, action or proceeding based on the Second Lien Collateral Agent or Second Lien Secured Parties claiming a lack of adequate protection, except that the Third Lien Secured Parties may:

 

(A)                               freely seek and obtain relief granting adequate protection only in the form of a replacement lien co-extensive in all respects with, but subordinated (as set forth in Section 2.01) to, with the same relative priority to the Second Liens as existed prior to the commencement of the Insolvency or Liquidation Proceeding, all Liens granted in the Insolvency or Liquidation Proceeding to, or for the benefit of, the Second Lien Secured Parties;

 

(B)                               with the prior written consent of the Second Lien Collateral Agent, may seek and obtain relief granting a superpriority claim co-extensive in all respect with (but junior to) any such claims granted in the Insolvency or Liquidation Proceeding to or for the benefit of the holders of the Second Lien Obligations 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; and

 

(C)                               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 Second Lien Obligations.

 

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

 

(v)                                 The Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, agrees that in any Insolvency or Liquidation Proceeding, neither the Third Lien Collateral Agent nor any other Third Lien Secured Party shall support or vote for any plan of reorganization or

 

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disclosure statement of Midstates or any other Grantor unless such plan is either accepted by the Class of Second Lien Secured Parties in accordance with Section 1126(c) of the Bankruptcy Code or provides for the payment in full in cash of all Second Lien Obligations (including all post-petition interest, fees and expenses) on the effective date of such plan of reorganization.  Except as otherwise provided in this clause (u), the Third Lien Secured Parties shall remain entitled to vote their claims in any such Insolvency or Liquidation Proceeding.

 

(w)                               The Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, hereby agrees that until the Discharge of Second Lien Obligations has occurred, neither Third Lien Collateral Agent nor any Third 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 Second Lien Collateral Agent.

 

(x)                                 The Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, agrees that neither Third Lien Collateral Agent nor any other Third Lien Secured Party shall oppose or seek to challenge any claim by the Second Lien Collateral Agent or any other Second Lien Secured Party for allowance (but not payment until the Discharge of the Second Lien Obligations has occurred) 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 (it being understood that such value will be determined without regard to the existence of the Third Liens on the Collateral).  Neither Second Lien Collateral Agent nor any other Second Lien Secured Party shall oppose or seek to challenge any claim by the Third Lien Collateral Agent or any other Third Lien Secured Party for allowance (but not payment until the Discharge of the Second Lien Obligations has occurred) in any Insolvency or Liquidation Proceeding of Third Lien Obligations consisting of post-petition interest, fees or expenses to the extent of the value of the Third Liens on the Collateral (it being understood that the value of the Third Liens will be determined by taking into account the existence of the Second Liens); provided that if the Second Lien Collateral Agent or any other Second 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 Third Lien Collateral Agent or any other Third Lien Secured Party.

 

(y)                                 Without the express written consent of the Second Lien Collateral Agent and subject to the provisions of Section 4.02(x), neither Third Lien Collateral Agent nor any other Third 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 Second 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 Second Lien Secured Party of interest, fees or expenses under Section 506(b) of the Bankruptcy Code.

 

(z)                                  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 Third Lien Collateral Agent for itself and on behalf of each other Third Lien Secured Party, agrees that, any distribution or recovery they may receive in respect of any such Collateral shall be segregated and held in trust and, following the Discharge of Priority Lien Obligations, forthwith paid over to the Second Lien Collateral Agent for the benefit of the Second Lien Secured Parties in the same form as received without recourse, representation or warranty (other than a representation of the Third Lien Collateral Agent that it has not otherwise sold, assigned, transferred or pledged any right, title or interest in and to such distribution or recovery) but with any necessary endorsements or as a court of competent jurisdiction may otherwise direct.  The Third Lien Collateral

 

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Agent, for itself and on behalf of each other Third Lien Secured Party, hereby appoints the Second Lien Collateral Agent, and any officer or agent of the Second Lien Collateral Agent, with full power of substitution, the attorney-in-fact of each Third Lien Secured Party for the limited purpose of carrying out the provisions of this Section 4.02(z) and taking any action and executing any instrument that the Second Lien Collateral Agent may deem necessary or advisable to accomplish the purposes of this Section 4.02(z), which appointment is irrevocable and coupled with an interest.

 

(aa)                          The Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, hereby agrees that the Second Lien Collateral Agent shall have the exclusive right to credit bid the Second Lien Obligations and further that neither the Third Lien Collateral Agent nor any other Third Lien Secured Party shall (or shall join with or support any third party in opposing, objecting to or contesting, as the case may be) oppose, object to or contest such credit bid by the Second Lien Collateral Agent; provided that (A) Section 6.01 is complied with in connection with such credit bid and (B) the Third Lien Collateral Agent or the holders of Third Lien Obligations shall have the right to credit bid all or any portion of the Collateral so long as the Second Lien Collateral Agent and the holders of the Second Lien Obligations receive payment in full in cash of all Second Lien Obligations after giving effect thereto.

 

(bb)                          Until the expiry of the Second Lien Second Standstill Period, without the written consent of the Second Lien Collateral Agent in its sole discretion, the Third Lien Trustee, for itself and on behalf of each other Third Lien Secured Party, agrees it will not file an involuntary bankruptcy claim or seek the appointment of an examiner or a trustee for Midstates or any of its subsidiaries.

 

(cc)                            The Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, waives any right to assert or enforce any claim under Section 506(c) or 552 of the Bankruptcy Code as against any Second Lien Secured Party or any of the Collateral, except as expressly permitted by this Agreement.

 

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.  Each of the Second Lien Collateral Agent, for itself and on behalf of each other Second Lien Secured Party, and the Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, agrees that if, at any time, a Second Lien Secured Party or a Third Lien Secured Party, as applicable, receives notice of any Recovery, and any Priority Lien Obligations (including any reinstated Priority Lien Obligations) not constituting Excess Priority Lien Obligations are outstanding, then the Second Lien Collateral Agent, any other Second Lien Secured Party, the Third Lien Collateral Agent or any other Third Lien Secured Party, as applicable, 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.  If this Agreement shall have been terminated prior to any 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 Agent, any other Second Lien Secured Party, the Third Lien Collateral Agent or any other Third Lien Secured Party and then in its possession or under its control on account of the Second Lien Obligations or Third Lien Obligations, as applicable, 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 (other than

 

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reinstated Priority Lien Obligations constituting Excess Priority Lien Obligations) until the discharge thereof.  If any Second 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 “Second Lien Recovery”) for any reason whatsoever, then the Second Lien Obligations shall be reinstated to the extent of such Recovery and the Second Lien Secured Parties shall be entitled to a reinstatement of Second Lien Obligations with respect to all such recovered amounts.  The Third Lien Collateral Agent, for itself and on behalf of each other Third Lien Secured Party, agrees that if, at any time, a Third Lien Secured Party receives notice of any Second Recovery, and any Second Lien Obligations (including any reinstated Second Lien Obligations) are outstanding, then the Third Lien Collateral Agent or any other Third Lien Secured Party, as applicable, shall promptly pay over to the Second Lien Collateral Agent any payment received by it and then in its possession or under its control in respect of any Collateral subject to any Second Lien securing such Second Lien Obligations and shall promptly turn any Collateral subject to any such Second Lien then held by it over to the Second Lien Collateral Agent, and the provisions set forth in this Agreement shall be reinstated as if such payment had not been made.  If this Agreement shall have been terminated prior to any such Second Lien 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 Third Lien Collateral Agent or any other Third Lien Secured Party and then in its possession or under its control on account of the Third 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 Second Lien Collateral Agent for the benefit of the Second Lien Secured Parties for application to the reinstated Second Lien Obligations until the discharge thereof.  This Section 4.03 shall survive termination of this Agreement.

 

Section 4.04     Refinancings.

 

The Priority Lien Obligations, the Second Lien Obligations and the Third Lien Obligations may be Replaced, by any Priority Substitute Credit Facility, Second Lien Substitute Facility or Third Lien Substitute Facility, as the case may be, in each case, 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) the Priority Lien Agent, the Second Lien Collateral Agent and the Third Lien Collateral Agent shall receive on or prior to incurrence of a Priority Substitute Credit Facility, Second Lien Substitute Facility or Third Lien Substitute Credit Facility (A) an Officer’s Certificate from Midstates stating that (I) the incurrence thereof is permitted by each applicable Secured Debt Document to be incurred and (II) the requirements of Section 4.06 have been satisfied, and (B) a Priority Confirmation Joinder from the holders or lenders of any indebtedness that Replaces the Priority Lien Obligations, the Second Lien Obligations or the Third Lien Obligations (or an authorized agent, trustee or other representative on their behalf), (ii) the aggregate outstanding principal amount of the Priority Lien Obligations, after giving effect to such Priority Substitute Credit Facility, shall not exceed the Priority Lien Cap and (iii) on or before the date of such incurrence, such Priority Substitute Credit Facility, Second Lien Substitute Facility or Third Lien Substitute Facility is designated by Midstates, in an Officer’s Certificate delivered to the Priority Lien Agent, the Second Lien Collateral Agent and the Third Lien Collateral Agent, as “Priority Lien Debt”, “Second Lien Debt” or “Third Lien Debt”, as applicable, for the purposes of the Secured Debt Documents and this Agreement; provided that no Series of Secured Debt may be designated as more than one of Priority Lien Debt, Second Lien Debt or Third Lien Debt.

 

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For the avoidance of doubt, the deliveries set forth above shall not be required (and shall be deemed satisfied) in connection with an issuance of Additional Third Lien Notes constituting Third Lien Indenture Notes.

 

Each of the then-exiting Priority Lien Agent, the Second Lien Collateral Agent and the Third Lien Collateral Agent 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 any such Replacement, it being understood that the Priority Lien Agent, the Second Lien Collateral Agent and the Third Lien Collateral Agent or (if permitted by the terms of the applicable Secured Debt Documents) the Grantors, without the consent of any other Secured Party or (in the case of the Grantors) one or more Secured Debt Representatives, may amend, supplement, modify or restate this Agreement to the extent necessary or appropriate to facilitate such amendments or supplements to effect such Replacement or incurrence all at the expense of the Grantors.  Upon the consummation of such Replacement or incurrence 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.

 

Section 4.05     Amendments to Second Lien Documents and Third Lien Documents.

 

(a)                                 Prior to the Discharge of Priority Lien Obligations, without the prior written consent of the Priority Lien Agent, no Second Lien Document or Third 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 or Third Lien Document, as applicable, would (i) adversely affect the lien priority rights of the Priority Lien Secured Parties or the rights of the Priority Lien Secured Parties to receive payments owing pursuant to the Priority Lien Documents, (ii) except as otherwise provided for in this Agreement, add any Liens securing the Collateral granted under the Second Lien Security Documents or the Third Lien Security Documents, (iii) confer any additional rights on the Second Lien Collateral Agent, any other Second Lien Secured Party, the Third Lien Collateral Agent or any other Third Lien Secured Party in a manner adverse to the Priority Lien Secured Parties, (iv) contravene the provisions of this Agreement or the Priority Lien Documents or (v) modify any Second Lien Document or any Third Lien Document in any manner that would not have been permitted under the Priority Lien Documents to have been included in such Second Lien Document or any Third Lien Document if such Second Lien Document or any Third Lien Document, respectively, was entered into as of the date of such amendment, supplement, restatement or modification; and

 

(b)                                 prior to the Discharge of Second Lien Obligations, without the prior written consent of the Second Lien Collateral Agent, no Third 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 Third Lien Document, as applicable, would (i) adversely affect the lien priority rights of the Second Lien Secured Parties or the rights of the Second Lien Secured Parties to receive payments owing pursuant to the Second Lien Documents, (ii) except as otherwise provided for in this Agreement, add any Liens securing the Collateral granted under the Third Lien Security Documents, (iii) confer any additional rights on the Third Lien Collateral Agent or any other Third Lien Secured Party in a manner adverse to the Second Lien Secured Parties, (iv) contravene the provisions of this Agreement or the Second Lien Documents or (v) modify any Third Lien Document in any manner that would not have been permitted under any Third Lien Document if such Third Lien Document was entered into as of the date of such amendment, supplement, restatement or modification.

 

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Section 4.06     Legends.  Each of

 

(a)                                 the Priority Lien Agent acknowledges with respect to the Priority Credit Agreement and the Priority Lien Security Documents,

 

(b)                                 the Second Lien Collateral Agent acknowledges with respect to the Second Lien Indenture and the Second Lien Security Documents and

 

(c)                                  the Third Lien Collateral Agent acknowledges with respect to the Third Lien Indenture and the Third Lien Security Documents, if any, that

 

the Second Lien Indenture, the Third Lien Indenture, the Second Lien Documents (other than control agreements to which both the Priority Lien Agent and the Second Lien Collateral Agent are parties), the Third Lien Documents (other than control agreements to which the Priority Lien Agent or the Second Lien Collateral Agent, as applicable, and the Third Lien Collateral Agent, are parties) and each associated Security Document (other than control agreements to which both the Priority Lien Agent and the Second Lien Collateral Agent are parties or, in the case of Third Lien Security Documents, other than control agreements to which the Priority Lien Agent or the Second Lien Collateral Agent, as applicable, and the Third Lien Collateral Agent 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 and Third 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 and the Third Lien Secured Parties may take any actions and exercise any and all rights that would be available to a holder of unsecured claims; provided, however, that the Second Lien Secured Parties and the Third Lien Secured Parties may not take any of the actions prohibited by Section 3.05(a) or clauses (b) through (f) of Section 4.02 (and in the case of the Third Lien Secured Parties, clauses (p) through (t) of Section 4.02) or any other provisions in this Agreement; provided, further, that in the event that any of the Second Lien Secured Parties or Third 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 or the Third Lien Obligations, as applicable, such judgment lien shall be subject to the terms of this Agreement for all purposes (including in relation to the Priority Lien Obligations and the Second Lien Obligations, as applicable) as the Second Liens and Third Liens, as applicable, are subject to this Agreement.

 

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

 

Section 4.09     Acknowledgment by the Secured Debt Representatives.  Each of the Priority Lien Agent, for itself and on behalf of the other Priority Lien Secured Parties, the Second Lien Collateral Agent, for itself and on behalf of the other Second Lien Secured Parties, and the Third Lien Collateral Agent, for itself and on behalf of the other Third Lien Secured Parties, hereby acknowledges that this Agreement is a material inducement to enter into a business relationship, that each has relied on this Agreement to enter into the Priority Credit Agreement, the Second Lien Indenture, the Third Lien Indenture, as applicable, and all documentation related thereto, and that each will continue to rely on this Agreement in their related future dealings.

 

ARTICLE V
 GRATUITOUS BAILMENT FOR PERFECTION OF CERTAIN SECURITY INTERESTS

 

Section 5.01     General.  (a) Prior to the Discharge of Priority Lien Obligations, 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 or agent for (i) the Second Lien Collateral Agent for the sole purpose of perfecting the Second Lien of the Second Lien Collateral Agent on such Collateral and (ii) the Third Lien Collateral Agent for the sole purpose of perfecting the Third Lien of the Third Lien Collateral Agent on such Collateral.  It is agreed that the obligations of the Priority Lien Agent and the rights of the Second Lien Collateral Agent, the other Second Lien Secured Parties, the Third Lien Collateral Agent and the other Third Lien Secured Parties in connection with any such bailment or agency 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 or Third Lien on any such Collateral and shall have no responsibility, duty, obligation or liability to the Second Lien Collateral Agent, any other Second Lien Secured Party, the Third Lien Collateral Agent or any other Third 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 and the Third Lien Secured Parties to obtain a perfected Third 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, the Third 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 Agent, any Second Lien Secured Party, the Third Lien Collateral Agent or any Third 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 Agent (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

 

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extent the Second Lien Collateral Agent has a Lien on such Collateral or Account after giving effect to any prior or concurrent releases of Liens) to the Second Lien Collateral Agent for the benefit of all Second Lien Secured Parties.

 

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

 

Section 5.02     Deposit Accounts.  (a) Prior to the Discharge of Priority Lien Obligations, to the extent that any Account is under the control of the Priority Lien Agent at any time, the Priority Lien Agent will act as gratuitous bailee or agent for (i) the Second Lien Collateral Agent for the purpose of perfecting the Liens of the Second Lien Secured Parties and (ii) the Third Lien Collateral Agent for the purpose of perfecting the Liens of the Third Lien Secured Parties in such Accounts and the cash and other assets therein as provided in Section 3.01 (but will have no duty, responsibility or obligation to the Second Lien Secured Parties or the Third 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 5.02(a)).  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 Agent, cooperate with the Grantors and the Second Lien Collateral Agent (at the expense of the Grantors) in permitting control of any other Accounts to be transferred to the Second Lien Collateral Agent (or for other arrangements with respect to each such Accounts satisfactory to the Second Lien Collateral Agent to be made).

 

(b)                                 Following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations, to the extent that any Account is under the control of the Second Lien Collateral Agent at any time, the Second Lien Collateral Agent will act as gratuitous bailee or agent for the Third Lien Collateral Agent for the purpose of perfecting the Liens of the Third Lien Secured Parties

 

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in such Accounts and the cash and other assets therein as provided in Section 3.01 (but will have no duty, responsibility or obligation to the Third 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 5.02(b)).  Unless the Third Liens on such Collateral shall have been or concurrently are released, after the occurrence of Discharge of Second Lien Obligations, the Second Lien Collateral Agent shall, at the request of the Third Lien Collateral Agent, cooperate with the Grantors and the Third Lien Collateral Agent (at the expense of the Grantors) in permitting control of any other Accounts to be transferred to the Third Lien Collateral Agent (or for other arrangements with respect to each such Accounts satisfactory to the Third Lien Collateral Agent to be made).

 

ARTICLE VI
 APPLICATION OF PROCEEDS; DETERMINATION OF AMOUNTS

 

Section 6.01     Application of Proceeds.  (a) Prior to the Discharge of Priority Lien Obligations, and regardless of whether an Insolvency or Liquidation Proceeding has been commenced, Collateral or Proceeds received in connection with the enforcement or exercise of any rights or remedies with respect to any portion of the Collateral will be applied:

 

(i)                                     first, to the payment in full in cash of all Priority Lien Obligations that are not Excess Priority Lien Obligations,

 

(ii)                                  second, to the payment in full in cash of all Second Lien Obligations,

 

(iii)                               third, to the payment in full in cash of all Third Lien Obligations,

 

(iv)                              fourth, to the payment in full in cash of all Excess Priority Lien Obligations, and

 

(v)                                 fifth, to Midstates or as otherwise required by applicable law.

 

(b)                                 Following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations, and regardless of whether an Insolvency or Liquidation Proceeding has been commenced, Collateral or Proceeds received in connection with the enforcement or exercise of any rights or remedies with respect to any portion of the Collateral will be applied:

 

(i)                                     first, to the payment in full of all Second Lien Obligations,

 

(ii)                                  second, to the payment in full of all Third Lien Obligations,

 

(iii)                               third, to the payment in full in cash of all Excess Priority Lien Obligations, and

 

(iv)                              fourth, to Midstates or as otherwise required by applicable law.

 

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), Second Lien Obligations or Third 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

 

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Representatives 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 Midstates.  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 Midstates 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, the Second Lien Secured Parties and the Third Lien Secured Parties shall have no duty to disclose to any Third Lien Secured Party, Second Lien Secured Party or to any Priority Lien Secured Party, as the case may be, any information relating to Midstates or any of the other Grantors, or any other circumstance bearing upon the risk of non-payment of any of the Priority Lien Obligations, the Second Lien Obligations or the Third Lien 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, any Second Lien Secured Party or any Third Lien Secured Party, in its sole discretion, undertakes at any time or from time to time to provide any such information to, any Third Lien Secured Party, any Second Lien Secured Party or any Priority Lien Secured Party, as the case may be, it shall be under no obligation (a) 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, (b) to provide any additional information or to provide any such information on any subsequent occasion or (c) to undertake any investigation.

 

Section 7.02     No Warranties or Liability.

 

(a)                                 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, (i) neither the Second Lien Collateral Agent 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 and (ii) neither the Third Lien Collateral Agent nor any other Third 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 Third Lien Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon.

 

(b)                                 The Second Lien Collateral Agent, 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, (i) 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 and (ii) neither the Third Lien Collateral Agent nor any other Third Lien Secured Party has made any express or implied representation or warranty, including with respect to the execution, validity, legality, completeness,

 

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collectability or enforceability of any of the Third Lien Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon.

 

(c)                                  The Third Lien Collateral Agent, for itself and on behalf of the other Third Lien Secured Parties, acknowledges and agrees that, except for the representations and warranties set forth in Article VIII, (i) 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 and (ii) neither the Second Lien Collateral Agent 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.

 

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

 

(e)                                  Each of the Second Lien Collateral Agent, for itself and on behalf of each other Second Lien Secured Party and the Third Lien Collateral Agent, for itself and on behalf of each other Third 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.  The Third Lien Collateral Agent, for itself and on behalf each other Third Lien Secured Party, hereby waives any claim that may be had against the Second Lien Collateral Agent or any other Second Lien Secured Party arising out of any actions which the Second Lien Collateral Agent or such Second Lien Secured Party takes or omits to take following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations (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 Second Lien Obligations from any account debtor, guarantor or any other party) in accordance with this Agreement and the Second Lien Documents or the valuation, use, protection or release of any security for such Second Lien Obligations.

 

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, the Second Lien Collateral Agent and the other Second Lien Secured Parties, and

 

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the Third Lien Collateral Agent and the other Third 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, Second Lien Obligations or Third 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, Second Lien Obligations or Third Lien Obligations;

 

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

 

(f)                                   any other circumstances that otherwise might constitute a defense available to, or a discharge of, Midstates or any other Grantor in respect of the Priority Lien Obligations, the Second Lien Obligations or the Third Lien Obligations.

 

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 (as defined in the Priority Credit Agreement), (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.

 

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Section 8.02     Representations and Warranties of Each Representative.  Each of the Priority Lien Agent, the Second Lien Collateral Agent and the Third Lien Collateral Agent represents and warrants to the other parties hereto that it has been directed under the Priority Credit Agreement, the Second Lien Indenture and the Third Lien Indenture, 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:

 

303 Peachtree Street

25 Floor

Mail Code 7662

Atlanta, Georgia 30308

Attn: Doug Weltz, Agency Services

Phone: (404) 813-5156

Fax: (404) 495-2170

Agency.services@suntrust.com

 

(b)                                 if to the Original Second Lien Collateral Agent, to it at:

 

Wilmington Trust, National Association

15950 N. Dallas Parkway, Suite 550

Dallas, TX 75248

Attention: Midstates Petroleum Administrator

Fax: (888) 316 6238

Email: sgoffinet@wilmingtontrust.com

 

(c)                                  if to the Original Third Lien Collateral Agent, to it at:

 

Wilmington Trust, National Association

15950 N. Dallas Parkway, Suite 550

Dallas, TX 75248

Attention: Midstates Petroleum Administrator

Fax: (888) 316 6238

Email sgoffinet@wilmingtontrust.com

 

(d)                                 if to any other Secured Debt Representative, to such address as specified in the 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.  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

 

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(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 Midstates, the other Grantors the Priority Lien Agent, the Second Lien Collateral Agent and the Third Lien Collateral Agent from time to time, notices and other communications may also be delivered by e-mail to the e-mail address of a representative of the applicable person provided from time to time by such person.

 

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 9.02, 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.

 

(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; provided, however, that this Agreement may be amended from time to time as provided in Section 4.04.  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.  Notwithstanding the foregoing, none of the Grantors shall have the right to consent to or approve any amendment, modification or waiver of any provision of this Agreement except solely to the extent such amendment, modification or waiver has the effect of limiting the ability to incur Priority Lien Debt, Second Lien Debt or Third Lien Debt that the Grantors would otherwise be permitted to incur under each of the Priority Lien Documents, the Second Lien Documents and the Third Lien Documents or the ability of the Grantors to incur DIP Financing.

 

Section 9.03     Actions Upon Breach; Specific Performance.  (a) (i) Prior to the Discharge of Priority Lien Obligations, if any Second Lien Secured Party or Third Lien 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 Priority Lien Agent, may interpose as a defense or dilatory plea the making of this Agreement, and any Priority Lien Secured Party may intervene and interpose such defense or plea in its or their name or in the name of such Grantor and (ii) following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations, if any Third Lien 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 Second Lien Collateral Agent, may interpose as a defense or dilatory plea the making of this Agreement, and any Second Lien Secured Party may intervene and interpose such defense or plea in its or their name or in the name of such Grantor.

 

(b)                                 (i) Prior to the Discharge of Priority Lien Obligations, should any Second Lien Secured Party or Third Lien 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 Priority Lien Agent or any other Priority Lien 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 Priority Lien Agent, (A) may obtain relief against such Second Lien Secured Party

 

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or Third Lien Secured Party, as applicable, by injunction, specific performance and/or other appropriate equitable relief, it being understood and agreed by each of the Second Lien Collateral Agent on behalf of each Second Lien Secured Party and the Third Lien Collateral Agent on behalf of each Third Lien Secured Party that (I) the Priority Lien Secured Parties’ damages from its actions may at that time be difficult to ascertain and may be irreparable, and (II) each Second Lien Secured Party and Third Lien Secured Party waives any defense that the Grantors and/or the Priority Lien Secured Parties cannot demonstrate damage and/or be made whole by the awarding of damages, and (B) 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 and (ii) following the Discharge of Priority Lien Obligations but prior to the Discharge of Second Lien Obligations, should any Third Lien 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 Second Lien Collateral Agent or any other Second Lien 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 Second Lien Collateral Agent, (A) may obtain relief against such Third Lien Secured Party by injunction, specific performance and/or other appropriate equitable relief, it being understood and agreed by the Third Lien Collateral Agent on behalf of each Third Lien Secured Party that (I) the Second Lien Secured Parties damages from its actions may at that time be difficult to ascertain and may be irreparable, and (II) each Third Lien Secured Party waives any defense that the Grantors and/or the Second Lien Secured Parties cannot demonstrate damage and/or be made whole by the awarding of damages, and (B) 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.

 

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.  Notwithstanding the foregoing, the Grantors shall be third party beneficiaries of the last sentence of Section 9.02(b).

 

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, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES (BUT GIVING EFFECT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATION LAW).

 

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(b)                                 Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive 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.  Nothing in this Agreement shall affect any right that any party hereto may otherwise have to bring any action or proceeding relating to this Agreement in the courts of any jurisdiction.

 

(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 9.08.  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.

 

(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.  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 distinct and separate relative rights of the Priority Lien Secured Parties, the Second Lien Secured Parties and the Third Lien Secured Parties.  None of Midstates, any other Grantor or any other creditor thereof shall have any rights 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 Lien Documents, the Second Lien Documents or the Third Lien Documents, as applicable), and except as expressly provided in this Agreement neither Midstates nor any other Grantor may rely on the terms hereof.  Nothing in this Agreement is intended to or shall impair the obligations of Midstates or any other Grantor, which are

 

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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, any Second Lien Document or any Third Lien Document with respect to any Collateral in any manner that would cause a default under any Priority Lien Document.

 

Section 9.13                             Certain Terms Concerning the Second Lien Collateral Agent and the Third Lien Collateral Agent.  (a) The Second Lien Collateral Agent is executing and delivering this Agreement solely in its capacity as such and pursuant to direction set forth in the Second Lien Indenture; and in so doing, the Second Lien Collateral Agent shall not be responsible for the terms or sufficiency of this Agreement for any purpose.  The Second Lien Collateral Agent 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 Agent shall have and be protected by all of the rights, immunities, indemnities and other protections granted to it under the Second Lien Indenture and the other Second Lien Documents (including without limitation Article 7 of the Second Lien Indenture and Section 7(m) of the Second Lien Security Agreement).

 

(b)                                 The Third Lien Collateral Agent is executing and delivering this Agreement solely in its capacity as such and pursuant to direction set forth in the Third Lien Indenture; and in so doing, the Third Lien Collateral Agent shall not be responsible for the terms or sufficiency of this Agreement for any purpose.  The Third Lien Collateral Agent 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 Third Lien Collateral Agent shall have and be protected by all of the rights, immunities, indemnities and other protections granted to it under the Third Lien Indenture and the Third Lien Documents (including without limitation Article 7 of the Second Lien Indenture and Section 7(m) of the Second Lien Security Agreement.

 

Section 9.14                             Certain Terms Concerning the Priority Lien Agent, the Second Lien Collateral Agent and the Third Lien Collateral Agent.  None of the Priority Lien Agent, the Second Lien Collateral Agent or the Third Lien Collateral Agent 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.  None of the Priority Lien Agent, the Second Lien Collateral Agent or the Third Lien Collateral Agent shall have individual liability to any Person if it shall mistakenly pay over or distribute to any Secured Party (or Midstates or any other Grantor) any amounts in violation of the terms of this Agreement, so long as the Priority Lien Agent, the Second Lien Collateral Agent or the Third Lien Collateral Agent, as the case may be, is acting in good faith.  Each party hereto hereby acknowledges and agrees that each of the Priority Lien Agent, the Second Lien Collateral Agent and the Third Lien Collateral Agent is entering into this Agreement solely in its capacity under the Priority Lien Documents, the Second Lien Documents and the Third Lien Documents, respectively, and not in its individual capacity.  (a) The Priority Lien Agent shall not be deemed to owe any fiduciary duty to (i) the Second Lien Collateral Agent or any other Second Lien Secured Party or (ii) the Third Lien Collateral Agent or any other Third Lien Representative or any other Third Lien Secured Party; (b) the Second Lien Collateral Agent shall not be deemed to owe any fiduciary duty to (i) the Priority Lien Agent or any other Priority Lien Secured Party or (ii) the Third Lien Collateral Agent or any other Third Lien Representative or any other Third Lien Secured Party; and (c) the Third Lien Collateral Agent shall not be deemed to

 

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owe any fiduciary duty to (i) the Priority Lien Agent or any other Priority Lien Secured Party or (ii) the Second Lien Collateral Agent or any other Second 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 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 Third Lien Security Documents, each Third Lien Secured Party authorizes the Third Lien Collateral Agent to enter into this Agreement and to act on its behalf as collateral agent hereunder and in connection herewith.

 

Section 9.16                             Further Assurances.  Each of the Priority Lien Agent, for itself and on behalf of the other Priority Lien Secured Party, the Second Lien Collateral Agent, for itself and on behalf of the other Second Lien Secured Parties, the Third Lien Collateral Agent, for itself and on behalf of the other Third 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, the Second Lien Collateral Agent or the Third Lien Collateral Agent may reasonably request, to effectuate the terms of this Agreement, including the relative Lien priorities provided for herein.

 

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, the Second Lien Obligations or the Third Lien Obligations, or for statements of any Grantor, oral or written, or for the validity, sufficiency or enforceability of the Priority Lien Documents, the Second Lien Documents or the Third 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 none of the Priority Lien Agent, the Second Lien Collateral Agent or the Third Lien Collateral Agent makes any warranty or representation to the other Secured Debt Representatives or the Secured Parties for which it acts as agent nor does it rely upon any representation of the other agents or the Secured Parties for which it acts as agent with respect to matters identified or referred to in this Agreement.

 

[SIGNATURES BEGIN NEXT PAGE]

 

55












 

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.

 

	
 
    	
SUNTRUST   BANK, as Priority Lien Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Shannon Juhan
    
	
 
    	
Name:   
    	
Shannon   Juhan
    
	
 
    	
Title:   
    	
Director
    


 

Signature Page
 Intercreditor Agreement

 











 

	
 
    	
WILMINGTON   TRUST, NATIONAL ASSOCIATION, as Second Lien   Collateral Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Shawn Goffinet
    
	
 
    	
Name:   
    	
Shawn   Goffinet
    
	
 
    	
Title:   
    	
Assistant   Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WILMINGTON   TRUST, NATIONAL ASSOCIATION, as Third Lien Collateral   Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Shawn Goffinet
    
	
 
    	
Name:   
    	
Shawn   Goffinet
    
	
 
    	
Title:   
    	
Assistant   Vice President
    


 

Signature Page
 Intercreditor Agreement

 











 

	
 
    	
ACKNOWLEDGED   AND AGREED AS OF THE DATE FIRST ABOVE WRITTEN:
    
	
 
    	
 
    
	
 
    	
MIDSTATES   PETROLEUM COMPANY, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Nelson M. Haight
    
	
 
    	
Name:   
    	
Nelson   M. Haight
    
	
 
    	
Title:   
    	
Senior   Vice President and Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
MIDSTATES   PETROLEUM COMPANY, LLC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Nelson M. Haight
    
	
 
    	
Name:   
    	
Nelson   M. Haight
    
	
 
    	
Title:   
    	
Senior   Vice President and Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[OTHER   GRANTORS]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
 
    
	
 
    	
Name:   
    	
 
    
	
 
    	
Title:   
    	
 
    


 

Signature Page
 Intercreditor Agreement

 











 

ANNEX I

 

Provision for the Second Lien Indenture, the Second Lien Documents, the Third Lien Indenture and the Third Lien Documents

 

Reference is made to the Intercreditor Agreement, dated as of May 21, 2015, between SUNTRUST BANK, as Priority Lien Agent (as defined therein), and WILMINGTON TRUST, NATIONAL ASSOCIATION, as Second Lien Collateral Agent (as defined therein) (the “Intercreditor Agreement”).  Each holder of Third Lien Obligations, by its acceptance of such Third Lien Obligations i) consents to the subordination of Liens provided for in the Intercreditor Agreement, ii) agrees that it will be bound by, and will take no actions contrary to, the provisions of the Intercreditor Agreement and iii) authorizes and instructs the [Second/Third] Lien Collateral Agent on behalf of each [Second/Third] Lien Secured Party (as defined therein) to enter into the Intercreditor Agreement as [Second/Third] Lien Collateral Agent on behalf of such [Second/Third] Lien Secured Parties.  The foregoing provisions are intended as an inducement to the lenders under the Priority Credit Agreement to extend credit to Midstates LLC and such lenders are intended third party beneficiaries of such provisions and the provisions of the Intercreditor Agreement.

 

Provision for all Priority Lien Security Documents, Second Lien Security Documents, and Third Lien Security Documents that Grant a Security Interest in Collateral

 

Reference is made to the Intercreditor Agreement, dated as of May 21, 2015, between SUNTRUST BANK, as Priority Lien Agent (as defined therein), and WILMINGTON TRUST, NATIONAL ASSOCIATION, as Second Lien Collateral Agent (as defined therein) (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,](1) [(i)][(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, [(ii)][(iii)] authorizes (or is deemed to authorize) the [Priority Lien Agent] [Second Lien Collateral Agent] [Third Lien Collateral Agent] on behalf of such Person to enter into, and perform under, the Intercreditor Agreement and [(iii)][(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 and, to the extent provided therein, the applicable Security Documents (as defined in 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.

 




(1)  This bracketed language would not apply to the Priority Lien Security Documents.

 

Annex I - 1











 

EXHIBIT A
 to Intercreditor Agreement

 

[FORM OF]
 PRIORITY CONFIRMATION JOINDER

 

Reference is made to the Intercreditor Agreement, dated as of May 21, 2015 (as amended, supplemented, amended and restated or otherwise modified and in effect from time to time, the “Intercreditor Agreement”) between SUNTRUST BANK, as Priority Lien Agent for the Priority Lien Secured Parties (as defined therein), and WILMINGTON TRUST, NATIONAL ASSOCIATION, as Second Lien Collateral Agent for the Second Lien Secured Parties (as defined therein).

 

Capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Intercreditor Agreement.  This Priority Confirmation Joinder is being executed and delivered pursuant to Section 4.04 [(a)][(b)][(c)] 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 Third 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 [describe applicable indenture, credit agreement or other document governing the Additional Second or Third 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 Credit Facility] [Second Lien Secured Parties under the Second Lien Substitute Facility] [Third Lien Secured Parties under the Third Lien Indenture as [a Priority Lien Agent under a Priority Substitute Credit Facility] [a Second Lien Collateral Agent under a Second Lien Substitute Facility] [a Third Lien Collateral Agent under a Third Lien Substitute Facility] [Secured Debt Representative] [Third Lien 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:

 

[Address];

 

2.                                      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]

 

Exhibit A - 1











 

[Option B: to be used if additional debt constitutes Second Lien Debt] The undersigned New Representative, on behalf of itself and each holder of Obligations in respect of the Second Lien Debt that constitutes Second Lien Substitute Facility for which the undersigned is acting as Second Lien Collateral Agent 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 Midstates or any other Grantor to secure any Obligations in respect of the Second Lien Debt, whether or not upon property otherwise constituting Collateral for the Second Lien Debt, and that all such Second Liens will be enforceable by the Second Lien Collateral Agent with respect to the 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 Second Lien Debt for which the undersigned is acting are bound by the provisions of the Intercreditor Agreement, including the provisions relating to the ranking of Priority Liens, Second Liens and Third Liens and the order of application of proceeds from enforcement of Priority Liens, Second Liens and Third Liens; and

 

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

 

[Option C: to be used if additional debt constitutes a Series of Third Lien Debt] The undersigned New Representative, on behalf of itself and each holder of Obligations in respect of the Series of Third Lien Debt [that constitutes Third Lien Substitute Facility] for which the undersigned is acting as [Third Lien Representative][Third Lien Collateral Agent] 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 Third Lien Obligations will be and are secured equally and ratably by all Third Liens at any time granted by Midstates or any other Grantor to secure any Obligations in respect of such Series of Third Lien Debt, whether or not upon property otherwise constituting Collateral for such Series of Third Lien Debt, and that all such Third Liens will be enforceable by the Third Lien Collateral Agent with respect to such Series of Third Lien Debt for the benefit of all Third Lien Secured Parties equally and ratably;

 

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

 

3.                                      Full Force and Effect of Intercreditor Agreement.  Except as expressly supplemented hereby, the Intercreditor Agreement shall remain in full force and effect.

 

4.                                      Governing Law and Miscellaneous Provisions.  The provisions of Article IX of the Intercreditor Agreement will apply with like effect to this Priority Confirmation Joinder.

 

Exhibit A - 2











 

5.                                      Expenses.  Midstates agree to reimburse each Secured Debt Representative for its reasonable out of pocket expenses in connection with this Priority Confirmation Joinder, including the reasonable fees, other charges and disbursements of counsel.

 

Exhibit A - 3











 

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

 

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


 

The Priority Lien Agent hereby acknowledges receipt of this 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:
    	
 
    


 

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

 

	
 
    	
 
    
	
 
    	
as   Second Lien Collateral Agent
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    


 

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

 

	
 
    	
 
    
	
 
    	
as   Third Lien Collateral Agent
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    


 

Exhibit A - 4











 

	
 
    	
Acknowledged   and Agreed to by:
    
	
 
    	
 
    
	
 
    	
MIDSTATES   PETROLEUM COMPANY, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
MIDSTATES   PETROLEUM COMPANY, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    


 

Exhibit A - 5











 

EXHIBIT B
 to Intercreditor Agreement

 

SECURITY DOCUMENTS

 

PART A.

 

List of Priority Lien Security Documents

 

1.                                      Second Amended and Restated Pledge and Security Agreement dated as of June 8, 2012 among Midstates, each of the other Grantors party thereto, and the Priority Lien Agent as Administrative Agent for the Priority Lien Secured Parties.

 

2.                                      Each mortgage and deed of trust entered into after the date hereof, executed and delivered by Midstates or any other Grantor creating (or purporting to create) a Lien upon Collateral in favor of the Priority Lien Agent, to secure the Priority Lien Obligations, except to the extent released by the Priority Lien Agent in accordance with this Agreement and the Priority Lien Security Documents.

 

3.                                      Each UCC Financing Statement filed in connection with the documents listed in items 1 and 2 of this Part A.

 

4.                                      Each deposit account control agreement and securities account control agreement entered into after the date hereof among Midstates or any other Grantor, the Priority Lien Agent, the Second Lien Collateral Agent and the applicable depositary bank or securities intermediary.

 

PART B.

 

List of Second Lien Security Documents

 

1.                                      Each mortgage and deed of trust entered into after the date hereof, executed and delivered by Midstates or any other Grantor creating (or purporting to create) a Lien upon Collateral in favor of the Second Lien Collateral Agent, to secure the Second Lien Obligations, except to the extent released by the Second Lien Collateral Agent in accordance with this Agreement and the Second Lien Security Documents.

 

2.                                      Each UCC Financing Statement filed in connection with the documents listed in items 1 and 2 of this Part B.

 

3.                                      Each deposit account control agreement and securities account control agreement entered into after the date hereof among Midstates or any other Grantor, the Priority Lien Agent, the Second Lien Collateral Agent and the applicable depositary bank or securities intermediary.

 

PART C.

 

List of Third Lien Security Documents

 

1.                                      Each mortgage and deed of trust entered into after the date hereof, executed and delivered by Midstates or any other Grantor creating (or purporting to create) a Lien upon Collateral in favor of the Third Lien Collateral Agent, to secure the Third Lien Obligations, except to the extent

 

Exhibit B - 1











 

released by the Third Lien Collateral Agent in accordance with this Agreement and the Third Lien Security Documents.

 

2.                                      Each UCC Financing Statement filed in connection with the documents listed in items 1 and 2 of this Part C.

 

3.                                      Each deposit account control agreement and securities account control agreement entered into after the date hereof among Midstates or any other Grantor, the Priority Lien Agent, the Second Lien Collateral Agent, the Third Lien Collateral Agent and the applicable depositary bank or securities intermediary.