Document:

snde_Ex4_8

		
			Exhibit 4.8
		

		
			WHEN RECORDED OR FILED,
PLEASE RETURN TO:
Simpson Thacher & Bartlett LLP
600 Travis St., Suite 5400
		

		
			Houston , TX 77002
Attention:  Cameron Bettis
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						Space above for County Recorder’s Use

					
					
						 

				

		
			 
		

		
			MORTGAGE, DEED OF TRUST, ASSIGNMENT OF AS-EXTRACTED
 COLLATERAL, SECURITY AGREEMENT, FIXTURE FILING AND FINANCING
STATEMENT
		

		
			 
		

		
			FROM
		

		
			 
		

		
			ARMADILLO E&P, INC.
		

		
			 
		

		
			TO
		

		
			 
		

		
			DAVID LAZARUS, AS TRUSTEE
		

		
			 
		

		
			 
		

		
			FOR THE BENEFIT OF
		

		
			MORGAN STANLEY ENERGY CAPITAL INC.,
		

		
			as Administrative Agent
		

		
			 
		

		
			for the Secured Parties
		

		
			 
		

		
			 
		

		
			

		 

		

			 

		

 

		

		
			A CARBON, PHOTOGRAPHIC, OR OTHER REPRODUCTION OF THIS MORTGAGE IS SUFFICIENT AS A FINANCING STATEMENT.
		

		
			A POWER OF SALE HAS BEEN GRANTED IN THIS INSTRUMENT.  IN CERTAIN STATES, A POWER OF SALE MAY ALLOW THE TRUSTEE OR THE MORTGAGEE TO TAKE THE MORTGAGED PROPERTY AND SELL IT WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON DEFAULT BY THE MORTGAGOR UNDER THIS INSTRUMENT.
		

		
			THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS.
		

		
			THIS INSTRUMENT COVERS PROCEEDS OF MORTGAGED PROPERTY.
		

		
			THIS INSTRUMENT COVERS MINERALS, AS-EXTRACTED COLLATERAL AND OTHER SUBSTANCES OF VALUE WHICH MAY BE EXTRACTED FROM THE EARTH (INCLUDING WITHOUT LIMITATION OIL AND GAS) AND THE ACCOUNTS RELATED THERETO, WHICH WILL BE FINANCED AT THE WELLHEADS OF THE WELL OR WELLS LOCATED ON THE PROPERTIES DESCRIBED IN EXHIBIT A ATTACHED HERETO.  THIS FINANCING STATEMENT IS TO BE FILED OR FILED FOR RECORD, AMONG OTHER PLACES, IN THE REAL ESTATE RECORDS OR SIMILAR RECORDS OF THE RECORDERS OR COUNTY CLERKS OF THE COUNTIES LISTED ON THE EXHIBIT HERETO.  THE MORTGAGOR HAS AN INTEREST OF RECORD IN THE REAL ESTATE AND PERSONAL PROPERTY CONCERNED, WHICH INTEREST IS DESCRIBED IN EXHIBIT A ATTACHED HERETO.
		

		
			PORTIONS OF THE MORTGAGED PROPERTY ARE GOODS WHICH ARE OR ARE TO BECOME AFFIXED TO OR FIXTURES ON THE LAND DESCRIBED IN OR REFERRED TO IN EXHIBIT A ATTACHED HERETO.  THIS FINANCING STATEMENT IS TO BE FILED FOR RECORD OR RECORDED, AMONG OTHER PLACES, IN THE REAL ESTATE RECORDS OR SIMILAR RECORDS OF EACH COUNTY IN WHICH SAID LAND OR ANY PORTION THEREOF IS LOCATED. THE MORTGAGOR IS THE OWNER OF RECORD INTEREST IN THE REAL ESTATE CONCERNED.  THIS INSTRUMENT IS ALSO TO BE INDEXED IN THE INDEX OF FINANCING STATEMENTS.
		

		
			 
		

		
			

		 

		

			 

		

 

		

		
			TABLE OF CONTENTS
		

			
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						  

					
					
						 

					
					
						Page

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE I

				
	
					
						DEFINITIONS

				
	
					
						Section 1.01.

					
					
						 

					
					
						Terms Defined Above

					
1
				
	
					
						Section 1.02.

					
					
						 

					
					
						UCC and Other Defined Terms

					
1
				
	
					
						Section 1.03.

					
					
						 

					
					
						Definitions

					
2
				
	
					
						ARTICLE II

				
	
					
						GRANT OF LIEN AND SECURED OBLIGATIONS

				
	
					
						Section 2.01.

					
					
						 

					
					
						Grant of Liens

					
4
				
	
					
						Section 2.02.

					
					
						 

					
					
						Grant of Security Interest

					
5
				
	
					
						Section 2.03.

					
					
						 

					
					
						Secured Obligations

					
6
				
	
					
						Section 2.04.

					
					
						 

					
					
						Fixture Filing, Etc. 

					
6
				
	
					
						Section 2.05.

					
					
						 

					
					
						Pro Rata Benefit

					
6
				
	
					
						Section 2.06.

					
					
						 

					
					
						Excluded Properties

					
7
				
	
					
						ARTICLE III

				
	
					
						ASSIGNMENT OF AS-EXTRACTED COLLATERAL

				
	
					
						Section 3.01.

					
					
						 

					
					
						Assignment

					
7
				
	
					
						Section 3.02.

					
					
						 

					
					
						No Modification of Payment Obligations

					
8
				
	
					
						Section 3.03.

					
					
						 

					
					
						Rights and Title of Consignee

					
9
				
	
					
						ARTICLE IV

				
	
					
						REPRESENTATIONS, WARRANTIES AND COVENANTS

				
	
					
						Section 4.01.

					
					
						 

					
					
						Title

					
9
				
	
					
						Section 4.02.

					
					
						 

					
					
						Defend Title

					
9
				
	
					
						Section 4.03.

					
					
						 

					
					
						Not a Foreign Person

					
9
				
	
					
						Section 4.04.

					
					
						 

					
					
						Power to Create Lien and Security

					
10
				
	
					
						Section 4.05.

					
					
						 

					
					
						Revenue and Cost Bearing Interest

					
10
				
	
					
						Section 4.06.

					
					
						 

					
					
						Rentals Paid; Leases in Effect

					
10
				
	
					
						Section 4.07.

					
					
						 

					
					
						Operation By Third Parties

					
10
				
	
					
						Section 4.08.

					
					
						 

					
					
						Failure to Perform

					
10
				
	
					
						Section 4.09.

					
					
						 

					
					
						Abandon, Sales

					
10
				
	
					
						ARTICLE V

				
	
					
						RIGHTS AND REMEDIES

				
	
					
						Section 5.01.

					
					
						 

					
					
						Event of Default

					
11
				
	
					
						Section 5.02.

					
					
						 

					
					
						Foreclosure and Sale

					
11
				

		
			
		

		

		 

		

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						Section 5.03.

					
					
						 

					
					
						Substitute Trustees and Agents

					
12
				
	
					
						Section 5.04.

					
					
						 

					
					
						Judicial Foreclosure; Receivership

					
12
				
	
					
						Section 5.05.

					
					
						 

					
					
						Foreclosure for Installments

					
13
				
	
					
						Section 5.06.

					
					
						 

					
					
						Separate Sales

					
13
				
	
					
						Section 5.07.

					
					
						 

					
					
						Possession of Mortgaged Property

					
13
				
	
					
						Section 5.08.

					
					
						 

					
					
						Occupancy After Foreclosure

					
13
				
	
					
						Section 5.09.

					
					
						 

					
					
						Remedies Cumulative, Concurrent and Nonexclusive

					
14
				
	
					
						Section 5.10.

					
					
						 

					
					
						Discontinuance of Proceedings

					
14
				
	
					
						Section 5.11.

					
					
						 

					
					
						No Release of Obligations

					
14
				
	
					
						Section 5.12.

					
					
						 

					
					
						Release of and Resort to Collateral

					
15
				
	
					
						Section 5.13.

					
					
						 

					
					
						Waiver of Redemption, Notice and Marshalling of Assets, Etc. 

					
15
				
	
					
						Section 5.14.

					
					
						 

					
					
						Application of Proceeds

					
15
				
	
					
						Section 5.15.

					
					
						 

					
					
						Resignation of Operator

					
15
				
	
					
						Section 5.16.

					
					
						 

					
					
						Indemnity

					
16
				
	
					
						ARTICLE VI

				
	
					
						THE TRUSTEE

				
	
					
						Section 6.01.

					
					
						 

					
					
						Duties, Rights, and Powers of Trustee

					
16
				
	
					
						Section 6.02.

					
					
						 

					
					
						Successor Trustee

					
17
				
	
					
						Section 6.03.

					
					
						 

					
					
						Retention of Moneys

					
17
				
	
					
						ARTICLE VII

				
	
					
						MISCELLANEOUS

				
	
					
						Section 7.01.

					
					
						 

					
					
						Instrument Construed as Mortgage, Etc. 

					
17
				
	
					
						Section 7.02.

					
					
						 

					
					
						Releases

					
18
				
	
					
						Section 7.03.

					
					
						 

					
					
						Severability

					
18
				
	
					
						Section 7.04.

					
					
						 

					
					
						Successors and Assigns

					
18
				
	
					
						Section 7.05.

					
					
						 

					
					
						Satisfaction of Prior Encumbrance

					
18
				
	
					
						Section 7.06.

					
					
						 

					
					
						Application of Payments to Certain Obligations

					
19
				
	
					
						Section 7.07.

					
					
						 

					
					
						Nature of Covenants

					
19
				
	
					
						Section 7.08.

					
					
						 

					
					
						Notices

					
19
				
	
					
						Section 7.09.

					
					
						 

					
					
						Counterparts

					
19
				
	
					
						Section 7.10.

					
					
						 

					
					
						Governing Law

					
19
				
	
					
						Section 7.11.

					
					
						 

					
					
						Financing Statement; Fixture Filing

					
19
				
	
					
						Section 7.12.

					
					
						 

					
					
						Financing Statements

					
19
				
	
					
						Section 7.13.

					
					
						 

					
					
						Exculpation Provisions

					
20
				
	
					
						Section 7.14.

					
					
						 

					
					
						References

					
21
				

		
			 
		

		
			
		

		

		 

		

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						Section 7.15.

					
					
						 

					
					
						Integration

					
21
				
	
					
						Section 7.16.

					
					
						 

					
					
						Timing of Payment and Performance

					
21
				
	
					
						Section 7.17.

					
					
						 

					
					
						Intercreditor Agreement

					
21
				

		
			 
		

		
			 
		

		
			Exhibit A   Oil and Gas Properties
		

		
			 
		

		
			 
		

		
			

		 

		

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			THIS MORTGAGE, DEED OF TRUST, ASSIGNMENT OF AS-EXTRACTED COLLATERAL, SECURITY AGREEMENT, FIXTURE FILING AND FINANCING STATEMENT (this “Mortgage”) is entered into as of April 23, 2018 (the “Effective Date”) by ARMADILLO E&P, INC., a Delaware corporation (the “Mortgagor”), in favor of (i) David Lazarus, as Trustee for the benefit of MORGAN STANLEY ENERGY CAPITAL INC., as Administrative Agent (in such capacity, together with its successors and assigns, the “Mortgagee”), and the other Secured Parties with respect to all Mortgaged Properties located in or adjacent to the Deed of Trust State and with respect to all UCC Collateral.
		

		
			R E C I T A L S
		

		
			A.        Pursuant to the provisions of that certain Amended and Restated Term Loan Credit Agreement dated as of April 23, 2018 (such agreement, as it may from time to time be amended, restated, amended and restated, supplemented or otherwise modified, the “Credit Agreement”), among Sundance Energy Australia Limited (ACN 112 202 883), a company registered in South Australia, Australia, as Parent, Sundance Energy, Inc., a Colorado corporation, as Borrower, the Mortgagee, and the lenders party thereto (as each may be a party to the Credit Agreement from time to time, the “Lenders”), the Lenders have agreed to make loans and other extensions of credit to the Borrower.
		

		
			B.         On April 23, 2018, the Mortgagor, each of the signatories thereto and the Mortgagee executed a Guarantee and Collateral Agreement (such agreement, as may from time to time be amended, restated, amended and restated, supplemented or otherwise modified, the “Guarantee”) pursuant to which, upon the terms and conditions stated therein, the Mortgagor and each of the other signatories thereto other than the Mortgagee have agreed to grant a security interest to the Mortgagee in certain assets specified therein and have agreed to guarantee the obligations of the Loan Parties under the Credit Agreement (the Credit Agreement, the Notes and the Guarantee collectively being the “Secured Transaction Documents”).
		

		
			C.         The Mortgagee and the other Secured Parties have conditioned their obligations under the Secured Transaction Documents upon the execution and delivery by the Mortgagor of this Mortgage, and the Mortgagor has agreed to enter into this Mortgage to secure all obligations owing to the Mortgagee and the other Secured Parties under the Secured Transaction Documents.
		

		
			D.        Therefore, in order to comply with the terms and conditions of the Secured Transaction Documents and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Mortgagor hereby agrees as follows:
		

		
			ARTICLE I
		

		
			DEFINITIONS
		

		
			Section 1.01.    Terms Defined Above.  As used in this Mortgage, each term defined above has the meaning indicated above.
		

		
			Section 1.02.   UCC and Other Defined Terms.  Unless otherwise defined in the Applicable UCC, each capitalized term used in this Mortgage and not defined in this Mortgage shall have the meaning ascribed to such term in the Credit Agreement.  Any capitalized term not defined in either
		

		
			
		

		
			

		 

		

			 

		

 

		

		
			 
		

		
			this Mortgage or the Credit Agreement shall have the meaning ascribed to such term in the Applicable UCC.
		

		
			Section 1.03.   Definitions.
		

		
			“Applicable UCC” means the provisions of the Uniform Commercial Code presently in effect in the jurisdiction in which the relevant UCC Collateral is situated or which otherwise is applicable to the creation or perfection of the Liens described herein or the rights and remedies of Mortgagee under this Mortgage.  As used in this Mortgage, the “Uniform Commercial Code” means the Uniform Commercial Code as from time to time in effect in the Deed of Trust State.
		

		
			“Accounts” has the meaning ascribed to such term in the Applicable UCC.
		

		
			“As-Extracted Collateral” has the meaning ascribed to such term in the Applicable UCC.
		

		
			“Collateral” means collectively all the Mortgaged Property and all the UCC Collateral.
		

		
			“Deed of Trust State” has the meaning ascribed such term in Section 2.01.
		

		
			“Event of Default” has the meaning ascribed to such term in Section 5.01.
		

		
			“Excluded Property” has the meaning ascribed to such term in Section 2.06.
		

		
			“Fixtures” has the meaning ascribed to such term in the Applicable UCC.
		

		
			“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
		

		
			“Governmental Requirement” means any law, statute, code, ordinance, order, determination, rule, regulation, judgment, decree, injunction, franchise, permit, certificate, license, rules of common law, authorization or other directive or requirement, whether now or hereinafter in effect, of any Governmental Authority.
		

		
			“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 including but not limited to those of the foregoing which are described on Exhibit A hereto.
		

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

		
			
		

		
			

		 

		

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			“Indemnified Parties” means the Trustee, the Mortgagee, each other Secured Party and their officers, directors, employees, representatives, agents, attorneys, accountants and experts.
		

		
			“Lien” means any interest in property securing an obligation owed to, or a claim by, a Person other than the owner of the property, whether such interest is based on the common law, statute or contract, and whether such obligation or claim is fixed or contingent, and including but not limited to (a) the lien or security interest arising from a mortgage, encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes or (b) production payments and the like payable out of Oil and Gas Properties.
		

		
			“Mortgaged Property” means the Oil and Gas Properties and other properties and assets described in Section 2.01(a) through Section 2.01(e).
		

		
			  “Oil and Gas Properties” means (a) Hydrocarbon Interests; (b) the Properties now or hereafter pooled or unitized with Hydrocarbon Interests; (c) all presently existing or future unitization agreements, pooling agreements and declarations of pooled units and the units created thereby (including all units created under orders, regulations and rules of any Governmental Authority) which may affect all or any portion of the Hydrocarbon Interests; (d) all operating agreements, contracts and other agreements, including production sharing contracts and agreements, which relate to any of the Hydrocarbon Interests or the production, sale, transportation, purchase, exchange or processing of Hydrocarbons from or attributable to such Hydrocarbon Interests; (e) all Hydrocarbons in and under and which may be produced and saved or attributable to the Hydrocarbon Interests, including all oil in tanks, and all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to the Hydrocarbon Interests; (f) all tenements, hereditaments, appurtenances and Properties in any manner appertaining, belonging, affixed or incidental to the Hydrocarbon Interests and (g) all Properties, rights, titles, interests and estates described or referred to above, including any and all Property, real or personal, now owned or hereafter acquired and situated upon, used, held for use or useful in connection with the operating, working or development of any of such Hydrocarbon Interests or Property (excluding drilling rigs, automotive equipment, rental equipment or other personal Property which may be on such premises for the purpose of drilling a well or for other similar temporary uses) and including any and all oil wells, gas wells, injection wells or other wells, buildings, structures, fuel separators, liquid extraction plants, plant compressors, pumps, pumping units, field gathering systems, tanks and tank batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, meters, apparatus, equipment, appliances, tools, implements, cables, wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements and servitudes together with all additions, substitutions, replacements, accessions and attachments to any and all of the foregoing.
		

		
			“Permitted Encumbrances” means all Liens permitted to be placed or exist on the Mortgaged Properties or the UCC Collateral, as applicable, under Section 9.03 of the Credit Agreement.
		

		
			“Property” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, including cash, securities, accounts and contract rights.
		

		
			“Secured Obligations” has the meaning ascribed such term in Section 2.03.
		

		
			
		

		
			

		 

		

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			“Secured Transaction Documents” has the meaning ascribed such term in Recital B above.
		

		
			“Trustee” means David Lazarus of Morgan Stanley, whose address for notice hereunder is 1585 Broadway, 16th Floor, New York, NY  10036 and any successors and substitutes in trust hereunder.
		

		
			“UCC Collateral” means the property and other assets described in Section 2.02.
		

		
			ARTICLE II
		

		
			GRANT OF LIEN AND SECURED OBLIGATIONS
		

		
			Section 2.01.   Grant of Liens.  To secure payment of the Secured Obligations and performance of the covenants and obligations contained herein and in the Secured Transaction Documents, the Mortgagor does by these presents hereby GRANT, BARGAIN, SELL, ASSIGN, MORTGAGE, TRANSFER and CONVEY to the Trustee, in trust, with power of sale, for the use and benefit of the Mortgagee and the other Secured Parties, all the following properties, rights and interests which are located in (or cover or relate to such Oil and Gas Properties located in) the State of Texas (the “Deed of Trust State”), TO HAVE AND TO HOLD unto the Trustee forever to secure the Secured Obligations; :
		

		
			(a)  All rights, titles, interests and estates now owned or hereafter acquired by the Mortgagor in and to the Oil and Gas Properties described on Exhibit A.
		

		
			(b)  All rights, titles, interests and estates now owned or hereafter acquired by the Mortgagor in and to all geological, geophysical, engineering, accounting, title, legal and other technical or business data concerning the Oil and Gas Properties, the Hydrocarbons or any other item of property which are in the possession of the Mortgagor, and all books, files, records, magnetic media, computer records and other forms of recording or obtaining access to such data.
		

		
			(c)  All rights, titles, interests and estates now owned or hereafter acquired by the Mortgagor in and to all Hydrocarbons.
		

		
			(d)  Any property that may from time to time hereafter, by delivery or by writing of any kind, be subjected to the Liens hereof by the Mortgagor or by anyone on the Mortgagor’s behalf; and the Trustee and/or the Mortgagee are hereby authorized to receive the same at any time as additional security hereunder.
		

		
			(e)  All of the rights, titles and interests of every nature whatsoever now owned or hereafter acquired by the Mortgagor in and to the Oil and Gas Properties described in Exhibit A and all other rights, titles, interests and estates of the Mortgagor and every part and parcel thereof, including, without limitation, any rights, titles, interests and estates of the Mortgagor as the same may be enlarged by the discharge of any payments out of production or by the removal of any charges or Permitted Encumbrances to which any of such Oil and Gas Properties or other rights, titles, interests or estates of the Mortgagor are subject or otherwise; all rights of the Mortgagor to Liens securing payment of proceeds from the sale of production from any of such Oil and Gas Properties, together with any and all renewals and extensions of any of such related rights, titles, interests or estates; all of
		

		
			
		

		
			

		 

		

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			Mortgagor’s interest in contracts and agreements supplemental to or amendatory of or in substitution for the contracts and agreements described or mentioned above; and any and all additional interests of any kind hereafter acquired by the Mortgagor in and to such related rights, titles, interests or estates.
		

		
			For the avoidance of doubt, it is the intent of the Mortgagor that all Properties, rights, titles, interests and estates of the nature set forth and described in paragraphs (a) through (e) in this Section 2.01 which are located in, under or which cover, concern or relate to any Property, right, title, interest and estate in the Deed of Trust State shall be subject to the Lien in this Mortgage and thus be “Mortgaged Property” as such term is used in this Mortgage even if (i) the Properties, rights, titles, interests and estates on Exhibit A shall be incorrectly described or (ii) a description of all or a portion of such Properties, rights, titles, interests and estates are omitted or limited in any manner whatsoever.
		

		
			 
		

		
			Notwithstanding any provision in this Mortgage to the contrary, in no event (x) is any Building (as defined in the applicable Flood Insurance Regulation) or Manufactured (Mobile) Home (as defined in the applicable Flood Insurance Regulation) included in the definition of “Mortgaged Property” and no Building or Manufactured (Mobile) Home is hereby encumbered by this Mortgage, or (y) is any Excluded Property included in the definition of Mortgaged Property or UCC Collateral and no Excluded Property is encumbered by this Mortgage.  As used herein, “Flood Insurance Regulations” shall mean (i) the National Flood Insurance Act of 1968 as now or hereafter in effect or any successor statute thereto, (ii) the Flood Disaster Protection Act of 1973 as now or hereafter in effect or any successor statute thereto, (iii) the National Flood Insurance Reform Act of 1994 (amending 42 USC 4001, et. seq.), as the same may be amended or recodified from time to time, (iv) the Flood Insurance Reform Act of 2004, and (v) the Biggert-Waters Flood Reform Act of 2012, together with any regulations promulgated thereunder.
		

		
			 
		

		
			Any fractions or percentages specified on Exhibit A in referring to the Mortgagor’s interests are solely for purposes of the warranties made by the Mortgagor pursuant to Section 4.01 and Section 4.05 and shall in no manner limit the quantum of interest affected by this Section 2.01 with respect to any Oil and Gas Property or with respect to the Mortgagor’s right, title and interest in any unit or well identified on Exhibit A.
		

		
			Section 2.02.   Grant of Security Interest.  To further secure the payment and performance of the Secured Obligations, the Mortgagor hereby grants to the Mortgagee, for its benefit and the benefit of the other Secured Parties, a security interest in and to all of the following property of the Mortgagor (whether now or hereafter acquired by operation of law or otherwise):
		

		
			(a)  all As-Extracted Collateral from or attributable to the Oil and Gas Properties;
		

		
			(b)  all books and records pertaining to the Oil and Gas Properties;
		

		
			(c)  all Fixtures comprising the Oil and Gas Properties or otherwise located on or affixed to the lands pertaining to the Oil and Gas Properties;
		

		
			(d)  all Hydrocarbons from or attributable to the Oil and Gas Properties;
		

		
			
		

		
			

		 

		

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			(e)  to the extent not otherwise included, all Proceeds and products of any and all of the foregoing and all collateral security, guarantees and other Supporting Obligations (as defined in the Applicable UCC) given with respect to any of the foregoing; and
		

		
			(f)   to the extent not otherwise included in the Collateral, the Mortgaged Property insofar as the Mortgaged Property consists of personal property of any kind or character.
		

		
			Section 2.03.   Secured Obligations.  This Mortgage is executed and delivered by the Mortgagor to secure and enforce the following (the “Secured Obligations”):
		

		
			(a)  Payment of and performance of any and all indebtedness, fees, interest, indemnities, reimbursements, obligations and liabilities of the Borrower or any Guarantor (including interest accruing during the pendency of an insolvency or liquidation proceeding, regardless of whether allowed or allowable in such insolvency or liquidation proceeding) pursuant to the Credit Agreement, the Guarantee, this Mortgage or any other Loan Document, whether now existing or hereafter arising and being in the original principal amount of Two Hundred Fifty Million United States Dollars (US $250,000,000) with final maturity on or before April 23, 2023.
		

		
			(b)  Any sums which may be advanced or paid by the Trustee or the Mortgagee or any other Secured Party under the terms hereof or of the Credit Agreement or any Secured Transaction Document on account of the failure of the Parent, the Borrower or any of their Subsidiaries to comply with the covenants contained herein, in the Credit Agreement or any other Secured Transaction Document whether pursuant to Section 4.08 or otherwise and all other obligations, liabilities and indebtedness of the Parent, the Borrower, the Mortgagor or any other Guarantor arising pursuant to the provisions of this Mortgage or any Secured Transaction Document.
		

		
			(c)  To the extent not otherwise included in Sections 2.03(a) and (b) above, all Secured Obligations (as defined in the Credit Agreement).
		

		
			(d)  Any and all renewals, modifications, substitutions, rearrangements or extensions of any of the foregoing, whether in whole or in part.
		

		
			Section 2.04.   Fixture Filing, Etc.  Without in any manner limiting the generality of any of the other provisions of this Mortgage: (i) some portions of the goods described or to which reference is made herein are or are to become Fixtures on the land described or to which reference is made herein or on Exhibit A; (ii) the security interests created hereby under applicable provisions of the Applicable UCC will attach to all As-Extracted Collateral (all minerals including oil and gas and the Accounts resulting from the sale thereof at the wellhead or minehead located on the Oil and Gas Properties described or to which reference is made herein or on Exhibit A) and all other Hydrocarbons; (iii) this Mortgage is to be filed of record in the real estate records or other appropriate records as a financing statement; and (iv) the Mortgagor is the record owner of the real estate or interests in the real estate or immoveable property comprised of the Mortgaged Property.
		

		
			Section 2.05.   Pro Rata Benefit.  This Mortgage is executed and granted for the pro rata benefit and security of the Mortgagee and the other Secured Parties to secure the Secured
		

		
			
		

		
			

		 

		

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			Obligations until the Secured Obligations have been paid as provided in Section 12.18(a) of the Credit Agreement.
		

		
			Section 2.06.   Excluded Properties.  Notwithstanding anything herein to the contrary, in no event shall the Collateral include, and the Mortgagor shall not be deemed to have granted a Lien in, any of the Mortgagor’s right, title or interest in or under any property to the extent that such grant shall constitute or result in a breach of, a default under, an invalidation of, a termination of, or the unenforceability of any right of such Mortgagor under any agreement related to such property or requires the consent of, or creates a right of termination in favor of, any Person (other than such Mortgagor) (collectively, “Excluded Properties”), provided,  however, that the Collateral shall include (and such Lien shall attach) immediately at such time as the contractual or legal provisions referred to above shall no longer be applicable; provided,  further, that the exclusions referred above shall not apply to the extent that such laws, rules, regulations, agreements, terms or provisions referred to therein would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Applicable UCC or any other applicable law (including any debtor relief law or principle of equity) and shall not include any proceeds (as defined in the Applicable UCC) of such permit, lease, license, contract or other agreement or property, unless any assets constituting such proceeds are themselves subject to the exclusions set forth above.
		

		
			ARTICLE III
		

		
			ASSIGNMENT OF AS-EXTRACTED COLLATERAL
		

		
			Section 3.01.   Assignment.
		

		
			(a)  The Mortgagor has absolutely and unconditionally assigned, transferred, conveyed and granted a security interest, and does hereby absolutely and unconditionally assign, transfer, convey and grant a security interest unto the Mortgagee in and to:
		

		
			(i)        all of its As-Extracted Collateral located in or relating to the Mortgaged Properties located in the county where this Mortgage is filed, including without limitation, all As-Extracted Collateral relating to the Hydrocarbon Interests, the Hydrocarbons and all products obtained or processed therefrom;
		

		
			(ii)       the revenues and proceeds now and hereafter attributable to such Mortgaged Properties, including the Hydrocarbons, and said products and all payments in lieu, such as “take or pay” payments or settlements; and
		

		
			(iii)      all amounts and proceeds hereafter payable to or to become payable to the Mortgagor or now or hereafter relating to any part of such Mortgaged Properties and all amounts, sums, monies, revenues and income which become payable to the Mortgagor from, or with respect to, any of the Mortgaged Properties, present or future, now or hereafter constituting a part of the Hydrocarbon Interests.
		

		
			(b)  The Hydrocarbons and products are to be delivered into pipe lines connected with the Mortgaged Property, or to the purchaser thereof, to the credit of the Mortgagee, for its benefit and the benefit of the other Secured Parties, free and clear of all taxes, charges, costs and expenses; and all such revenues and proceeds shall be paid directly to the Mortgagee, at its offices in New York, New York, with no duty or obligation of any
		

		
			
		

		
			

		 

		

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			party paying the same to inquire into the rights of the Mortgagee to receive the same, what application is made thereof, or as to any other matter.
		

		
			(c)  The Mortgagor agrees to perform all such acts, and to execute all such further assignments, transfers and division orders and other instruments as may be reasonably required or desired by the Mortgagee or any party in order to have said proceeds and revenues so paid to the Mortgagee as provided in this Section 3.01.  In addition to any and all rights of a secured party under Sections 9.607 and 9.609 of the Applicable UCC, the Mortgagee is fully authorized to (i) receive and receipt for said revenues and proceeds; (ii) to endorse and cash any and all checks and drafts payable to the order of the Mortgagor or the Mortgagee for the account of the Mortgagor received from or in connection with said revenues or proceeds and to hold the proceeds thereof in a Deposit Account with the Mortgagee, a Lender or other acceptable commercial bank as additional collateral securing the Secured Obligations; and (iii) to execute transfer and division orders in the name of the Mortgagor, or otherwise, with warranties binding the Mortgagor.  All proceeds received by the Mortgagee pursuant to this grant and assignment shall be applied as provided in Section 5.14.
		

		
			(d)  The Mortgagee shall not be liable for any delay, neglect or failure to effect collection of any proceeds or to take any other action in connection therewith or hereunder; but the Mortgagee shall have the right, at its election, in the name of the Mortgagor or otherwise, to prosecute and defend any and all actions or legal proceedings deemed advisable by the Mortgagee in order to collect such funds and to protect the interests of the Mortgagee and/or the Mortgagor, with all costs, expenses and attorneys’ fees incurred in connection therewith being paid by the Mortgagor as provided in Section 12.03(a) of the Credit Agreement.
		

		
			(e)  The Mortgagor hereby appoints the Mortgagee as its attorney-in-fact with the power and authority to pursue any and all rights of the Mortgagor to Liens in the Hydrocarbons securing payment of proceeds of runs attributable to the Hydrocarbons.  In addition to the Liens granted to the Trustee and/or the Mortgagee in Section 2.01, the Mortgagor hereby further transfers and assigns to the Mortgagee any and all such Liens, security interests, financing statements or similar interests of the Mortgagor attributable to its interest in the As-Extracted Collateral, any other Hydrocarbons and proceeds of runs therefrom arising under or created by said statutory provision, judicial decision or otherwise.  The power of attorney granted to the Mortgagee in this Section 3.01, being coupled with an interest, shall be irrevocable until the Secured Obligations have been paid as provided in Section 12.18(a) of the Credit Agreement.  The Mortgagee hereby agrees that it shall only use the power of attorney granted to it in this Section 3.01 upon the occurrence and during the continuance of an Event of Default.
		

		
			Section 3.02.   No Modification of Payment Obligations.  Nothing herein contained shall modify or otherwise alter the obligation of the Loan Parties to make prompt payment of all amounts constituting Secured Obligations when and as the same become due regardless of whether the proceeds of the As-Extracted Collateral and Hydrocarbons are sufficient to pay the same and the rights provided in accordance with the foregoing assignment provision shall be cumulative of all other security of any and every character now or hereafter existing to secure payment of the
		

		
			
		

		
			

		 

		

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			Secured Obligations.  Nothing in this Article III is intended to be an acceptance of collateral in satisfaction of the Secured Obligations.
		

		
			Section 3.03.    Rights and Title of Consignee.  In addition to the rights, titles and interests hereby conveyed pursuant to Section 2.01 of this Mortgage, the Mortgagor hereby grants to the Mortgagee those Liens given to interest owners, as secured parties, to secure the obligations of the first purchaser of Hydrocarbons to pay the purchase price therefore under applicable law, including those rights provided in Tex. Bus. & Com. Code Ann. §9.343 (Vernon Supp. 1989), as amended from time to time.
		

		
			ARTICLE IV
		

		
			REPRESENTATIONS, WARRANTIES AND COVENANTS
		

		
			The Mortgagor hereby represents, warrants and covenants as follows:
		

		
			Section 4.01.   Title.  To the extent of the undivided interests specified on Exhibit A, the Mortgagor has good and defensible title to and is possessed of the Hydrocarbon Interests and has good title to the UCC Collateral, other than Hydrocarbon Interests and UCC Collateral disposed of in compliance with Section 9.11 of the Credit Agreement from time to time, in each case, free of all Liens except Permitted Encumbrances.
		

		
			Section 4.02.   Defend Title.  This Mortgage is, and always will be kept, a direct first priority Lien upon the Collateral; provided that Permitted Encumbrances may exist, but no intent to subordinate the priority of the Liens created hereby is intended or inferred by such existence.  The Mortgagor will not create or suffer to be created or permit to exist any Lien, security interest or charge prior or junior to or on a parity with the Lien of this Mortgage upon the Collateral or any part thereof other than such Permitted Encumbrances.  Except with respect to Permitted Encumbrances, the Mortgagor will warrant and defend its title to the Collateral against the claims and demands of all other Persons whomsoever and will maintain and preserve the Lien created hereby (and its priority) until the Secured Obligations shall be paid as provided in Section 12.18(a) of the Credit Agreement.  If (i) an adverse claim is made in writing against, or a cloud develops upon the title to, any part of the Collateral other than a Permitted Encumbrance or (ii) any Person, including the holder of a Permitted Encumbrance, shall challenge the priority or validity of the Liens created by this Mortgage, then the Mortgagor agrees to immediately defend against such adverse claim, take appropriate action to remove such cloud or subordinate such Permitted Encumbrance, in each case, at the Mortgagor’s sole cost and expense.  The Mortgagor further agrees that the Trustee and/or the Mortgagee may take such other action as they deem reasonable to protect and preserve their interests in the Collateral, and in such event the Mortgagor will indemnify the Trustee and the Mortgagee against any and all cost, attorneys’ fees and other expenses which they may incur in defending against any such adverse claim or taking action to remove any such cloud as provided in Sections 12.03(a) and (b) of the Credit Agreement.
		

		
			Section 4.03.   Not a Foreign Person.  The Mortgagor is not a “foreign person” within the meaning of the Code, Sections 1445 and 7701 (i.e. the Mortgagor is not a non-resident alien, foreign corporation, foreign partnership, foreign trust or foreign estate as those terms are defined in the Code and any regulations promulgated thereunder).
		

		
			
		

		
			

		 

		

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			Section 4.04.   Power to Create Lien and Security.  The Mortgagor has full power and lawful authority to grant, bargain, sell, assign, transfer, mortgage and convey a security interest in all of the Collateral in the manner and form herein provided.  No authorization, approval, consent or waiver of any lessor, sublessor, Governmental Authority or other party or parties whomsoever is required in connection with the execution and delivery by the Mortgagor of this Mortgage.
		

		
			Section 4.05.   Revenue and Cost Bearing Interest.  The Mortgagor’s ownership of the Hydrocarbon Interests and the undivided interests therein as specified on Exhibit A will, after giving full effect to all Permitted Encumbrances, afford the Mortgagor not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbon Interest specified as Net Revenue Interest on attached Exhibit A and will cause the Mortgagor to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as Working Interest on Exhibit A, of the costs of drilling, developing and operating the wells identified on Exhibit A except to the extent of any proportionate corresponding increase in the Net Revenue Interest.
		

		
			Section 4.06.   Rentals Paid; Leases in Effect.  All rentals and royalties due and payable in accordance with the terms of any material leases or subleases comprising a part of the Mortgaged Property have been duly paid or provided for, and all material leases or subleases comprising a part of the Oil and Gas Property are in full force and effect.
		

		
			Section 4.07.   Operation By Third Parties.  If any portion of the Mortgaged Property is comprised of interests which are not working interests or which are not operated by the Mortgagor or one of its Affiliates, then with respect to such interests and properties, the Mortgagor’s covenants as expressed in this Article IV are modified to require that the Mortgagor use reasonable commercial efforts to obtain compliance with such covenants by the working interest owners or the operator or operators of such Mortgaged Properties.
		

		
			Section 4.08.   Failure to Perform.  The Mortgagor agrees that if it fails to perform any act or to take any action which it is required to perform or take hereunder or pay any money which the Mortgagor is required to pay hereunder, each of the Mortgagee and the Trustee, in the Mortgagor’s name or its or their own name, may, but shall not be obligated to, perform or cause to perform such act or take such action or pay such money, and any expenses so incurred by either of them and any money so paid by either of them shall be a demand obligation owing by the Mortgagor to the Mortgagee or the Trustee, as the case may be, and each of the Mortgagee and the Trustee, upon making such payment, shall be subrogated to all of the rights of the Person receiving such payment.  Each amount due and owing by the Mortgagor to each of the Mortgagee and the Trustee pursuant to this Mortgage shall bear interest from the date of such expenditure or payment to such Person as provided in the Credit Agreement.
		

		
			Section 4.09.   Abandon, Sales.  The Mortgagor will not sell, lease, assign, transfer or otherwise dispose or abandon any of the Collateral except as permitted by the Credit Agreement.
		

		
			
		

		
			

		 

		

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			ARTICLE V
		

		
			RIGHTS AND REMEDIES
		

		
			Section 5.01.   Event of Default.  An Event of Default under the Credit Agreement shall be an “Event of Default” under this Mortgage.
		

		
			Section 5.02.   Foreclosure and Sale.
		

		
			(a)  If an Event of Default shall occur and be continuing, to the extent provided by applicable law, the Mortgagee shall have the right and option to proceed with foreclosure by directing the Trustee to proceed with foreclosure and to sell all or any portion of such Mortgaged Property at one or more sales, as an entirety or in parcels, at such place or places in otherwise such manner and upon such notice as may be required by law, or, in the absence of any such requirement, as the Mortgagee may deem appropriate, and to make conveyance to the purchaser or purchasers.  Where the Mortgaged Property is situated in more than one jurisdiction, notice as above provided shall be posted and filed in all such jurisdictions (if such notices are required by law), and all such Mortgaged Property may be sold in any such jurisdiction and any such notice shall designate the jurisdiction where such Mortgaged Property is to be sold.  Nothing contained in this Section 5.02 shall be construed so as to limit in any way any rights to sell the Mortgaged Property or any portion thereof by private sale if and to the extent that such private sale is permitted under the laws of the applicable jurisdiction or by public or private sale after entry of a judgment by any court of competent jurisdiction so ordering.  The Mortgagor hereby irrevocably appoints the Trustee and the Mortgagee, with full power of substitution, to be the attorneys-in-fact of the Mortgagor and in the name and on behalf of the Mortgagor to execute and deliver any deeds, transfers, conveyances, assignments, assurances and notices which the Mortgagor ought to execute and deliver and do and perform any and all such acts and things which the Mortgagor ought to do and perform under the covenants herein contained and generally, to use the name of the Mortgagor in the exercise of all or any of the powers hereby conferred on the Trustee and/or the Mortgagee.  At any such sale: (i) whether made under the power herein contained or any other legal enactment, or by virtue of any judicial proceedings or any other legal right, remedy or recourse, it shall not be necessary for the Trustee or the Mortgagee, as appropriate, to have physically present, or to have constructive possession of, the Mortgaged Property (the Mortgagor hereby covenanting and agreeing to deliver any portion of the Mortgaged Property not actually or constructively possessed by the Trustee or the Mortgagee immediately upon his or its demand) and the title to and right of possession of any such property shall pass to the purchaser thereof as completely as if the same had been actually present and delivered to purchaser at such sale, (ii) each instrument of conveyance executed by the Trustee or the Mortgagee shall contain a general warranty of title, binding upon the Mortgagor and its successors and assigns, (iii) each and every recital contained in any instrument of conveyance made by the Trustee or the Mortgagee shall conclusively establish the truth and accuracy of the matters recited therein, including, without limitation, nonpayment of the Secured Obligations, advertisement and conduct of such sale in the manner provided herein and otherwise by law and appointment of any successor trustee hereunder, (iv) any and all prerequisites to the validity thereof shall be conclusively presumed to have been performed, (v) the receipt of the Trustee, the Mortgagee or of such other party or officer
		

		
			
		

		
			

		 

		

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			making the sale shall be a sufficient discharge to the purchaser or purchasers for its purchase money and no such purchaser or purchasers, or its assigns or personal representatives, shall thereafter be obligated to see to the application of such purchase money, or be in any way answerable for any loss, misapplication or nonapplication thereof, (vi) to the fullest extent permitted by law, the Mortgagor shall be completely and irrevocably divested of all of its right, title, interest, claim and demand whatsoever, either at law or in equity, in and to the property sold and such sale shall be a perpetual bar both at law and in equity against the Mortgagor, and against any and all other persons claiming or to claim the property sold or any part thereof, by, through or under the Mortgagor, and (vii) to the extent and under such circumstances as are permitted by law, the Mortgagee may be a purchaser at any such sale, and shall have the right, after paying or accounting for all costs of said sale or sales, to credit the amount of the bid upon the amount of the Secured Obligations (in the order of priority set forth in Section 5.14) in lieu of cash payment.
		

		
			(b)  If an Event of Default shall occur and be continuing, then (i) the Mortgagee shall be entitled to all of the rights, powers and remedies afforded a secured party by the Applicable UCC with reference to the UCC Collateral or (ii) the Trustee or the Mortgagee may proceed as to any Collateral in accordance with the rights and remedies granted under this Mortgage or applicable law in respect of the Collateral.  Such rights, powers and remedies shall be cumulative and in addition to those granted to the Trustee or the Mortgagee under any other provision of this Mortgage or under any other Loan Document or any Secured Transaction Document.  Written notice mailed to the Mortgagor as provided herein at least ten (10) days prior to the date of public sale of any part of the Collateral which is personal property subject to the provisions of the Applicable UCC, or prior to the date after which private sale of any such part of the Collateral will be made, shall constitute reasonable notice.
		

		
			Section 5.03.   Substitute Trustees and Agents.  The Trustee or Mortgagee may appoint or delegate any one or more persons as agent to perform any act or acts necessary or incident to any sale held by the Trustee or Mortgagee, including the posting of notices and the conduct of sale, but in the name and on behalf of the Trustee or Mortgagee.  If the Trustee or Mortgagee shall have given notice of sale hereunder, any successor or substitute trustee or mortgagee agent thereafter appointed may complete the sale and the conveyance of the property pursuant thereto as if such notice had been given by the successor or substitute trustee or mortgagee agent conducting the sale.
		

		
			Section 5.04.   Judicial Foreclosure; Receivership.  If an Event of Default shall occur and be continuing, the Trustee or the Mortgagee shall have the right and power to proceed by a suit or suits in equity or at law, whether for the specific performance of any covenant or agreement herein contained or in aid of the execution of any power herein granted, or for any foreclosure hereunder or for the sale of the Collateral under the judgment or decree of any court or courts of competent jurisdiction, or for the appointment of a receiver pending any foreclosure hereunder or the sale of the Collateral under the order of a court or courts of competent jurisdiction or under executory or other legal process, or for the enforcement of any other appropriate legal or equitable remedy.  Any money advanced by the Trustee and/or the Mortgagee in connection with any such receivership shall be a demand obligation (which obligation the Mortgagor hereby expressly promises to pay)
		

		
			
		

		
			

		 

		

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			owing by the Mortgagor to the Trustee and/or the Mortgagee and shall bear interest from the date of making such advance by the Trustee and/or the Mortgagee until paid as provided in the Credit Agreement.
		

		
			Section 5.05.   Foreclosure for Installments.  The Mortgagee shall also have the option to proceed with foreclosure in satisfaction of any installments of the Secured Obligations which have not been paid when due following the occurrence and during the continuance of an Event of Default either through the courts or by directing the Trustee to proceed with foreclosure in satisfaction of the matured but unpaid portion of the Secured Obligations as if under a full foreclosure, conducting the sale as herein provided and without declaring the entire principal balance and accrued interest and other Secured Obligations then due; such sale may be made subject to the unmatured portion of the Secured Obligations, and any such sale shall not in any manner affect the unmatured portion of the Secured Obligations, but as to such unmatured portion of the Secured Obligations this Mortgage shall remain in full force and effect just as though no sale had been made hereunder.  It is further agreed that several sales may be made hereunder without exhausting the right of sale for any unmatured part of the Secured Obligations, it being the purpose hereof to provide for a foreclosure and sale of the security for any matured portion of the Secured Obligations without exhausting the power to foreclose and sell the Mortgaged Property for any subsequently maturing portion of the Secured Obligations.
		

		
			Section 5.06.   Separate Sales.  If any Event of Default shall occur and be continuing, the Collateral may be sold in one or more parcels and to the extent permitted by applicable law in such manner and order as the Mortgagee, in its sole discretion, may elect, it being expressly understood and agreed that the right of sale arising out of any Event of Default shall not be exhausted by any one or more sales.
		

		
			Section 5.07.   Possession of Mortgaged Property.  If an Event of Default shall have occurred and be continuing, then, to the extent permitted by applicable law, the Trustee or the Mortgagee shall have the right and power to enter into and upon and take possession of all or any part of the Collateral in the possession of the Mortgagor, its successors or assigns, or its or their agents or servants, and may exclude the Mortgagor, its successors or assigns, and all persons claiming under the Mortgagor, and its or their agents or servants wholly or partly therefrom; and, holding the same, the Mortgagee may use, administer, manage, operate and control the Collateral and conduct the business thereof to the same extent as the Mortgagor, its successors or assigns, might at the time do and may exercise all rights and powers of the Mortgagor, in the name, place and stead of the Mortgagor, or otherwise as the Mortgagee shall deem best.  All costs, expenses and liabilities of every character incurred by the Trustee and/or the Mortgagee in administering, managing, operating, and controlling the Mortgaged Property shall constitute a demand obligation (which obligation the Mortgagor hereby expressly promises to pay) owing by the Mortgagor to the Trustee and/or the Mortgagee and shall bear interest from date of expenditure until paid as provided in the Credit Agreement.
		

		
			Section 5.08.   Occupancy After Foreclosure.  In the event there is a foreclosure sale hereunder and at the time of such sale the Mortgagor or the Mortgagor’s heirs, devisees, representatives, successors or assigns or any other person claiming any interest in the Collateral by, through or under the Mortgagor, are occupying or using the Mortgaged Property or any part thereof, each and all shall immediately become the tenant of the purchaser at such sale, which
		

		
			
		

		
			

		 

		

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			tenancy shall be a tenancy from day to day, terminable at the will of either the landlord or tenant, or at a reasonable rental per day based upon the value of the property occupied, such rental to be due daily to the purchaser; to the extent permitted by applicable law, the purchaser at such sale shall, notwithstanding any language herein apparently to the contrary, have the sole option to demand immediate possession following the sale or to permit the occupants to remain as tenants at will.  In the event the tenant fails to surrender possession of said property upon demand, the purchaser shall be entitled to institute and maintain a summary action for possession of the Mortgaged Property (such as an action for forcible entry and detainer) in any court having jurisdiction.
		

		
			Section 5.09.   Remedies Cumulative, Concurrent and Nonexclusive.  Every right, power, privilege and remedy herein given to the Trustee or the Mortgagee shall be cumulative and in addition to every other right, power and remedy herein specifically given or now or hereafter existing in equity, at law or by statute (including specifically those granted by the Applicable UCC in effect and applicable to the Collateral or any portion thereof).  Each and every right, power, privilege and remedy whether specifically herein given or otherwise existing may be exercised from time to time and so often and in such order as may be deemed expedient by the Trustee or the Mortgagee, and the exercise, or the beginning of the exercise, or the abandonment, of any such right, power, privilege or remedy shall not be deemed a waiver of the right to exercise, at the same time or thereafter any other right, power, privilege or remedy.  No delay or omission by the Trustee, the Mortgagee or any other Secured Party in the exercise of any right, power or remedy shall impair any such right, power, privilege or remedy or operate as a waiver thereof or of any other right, power, privilege or remedy then or thereafter existing.
		

		
			Section 5.10.   Discontinuance of Proceedings.  If the Trustee or the Mortgagee shall have proceeded to invoke any right, remedy or recourse permitted hereunder or under any Secured Transaction Document or available at law and shall thereafter elect to discontinue or abandon same for any reason, then it shall have the unqualified right so to do and, in such an event, the parties shall be restored to their former positions with respect to the Secured Obligations, this Mortgage, the Credit Agreement, the Collateral and otherwise, and the rights, remedies, recourses and powers of the Trustee and the Mortgagee, as applicable, shall continue as if same had never been invoked.
		

		
			Section 5.11.   No Release of Obligations.  Neither the Mortgagor, any Guarantor nor any other person hereafter obligated for payment of all or any part of the Secured Obligations shall be relieved of such obligation by reason of: (a) the failure of the Trustee to comply with any request of the Mortgagor, or any Guarantor or any other Person so obligated to foreclose the Lien of this Mortgage or to enforce any provision hereunder or under the Credit Agreement; (b) the release, regardless of consideration, of the Mortgaged Property or any portion thereof or interest therein or the addition of any other property to the Mortgaged Property; (c) any agreement or stipulation between any subsequent owner of the Mortgaged Property and the Mortgagee extending, renewing, rearranging or in any other way modifying the terms of this Mortgage without first having obtained the consent of, given notice to or paid any consideration to the Mortgagor, any Guarantor or such other Person, and in such event the Mortgagor, Guarantor and all such other Persons shall continue to be liable to make payment according to the terms of any such extension or modification agreement unless expressly released and discharged in writing by the Mortgagee; or (d) by any other act or occurrence save and except if the Secured Obligations are paid as provided in Section 12.18(a) of the Credit Agreement.
		

		
			
		

		
			

		 

		

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			Section 5.12.  Release of and Resort to Collateral.  The Mortgagee may release, regardless of consideration, any part of the Collateral without, as to the remainder, in any way impairing, affecting, subordinating or releasing the Lien created in or evidenced by this Mortgage or its stature as a first and prior Lien in and to the Collateral, and without in any way releasing or diminishing the liability of any Person liable for the repayment of the Secured Obligations.  For payment of the Secured Obligations, the Mortgagee may resort to any other security therefor held by the Mortgagee or the Trustee in such order and manner as the Mortgagee may elect.
		

		
			Section 5.13.   Waiver of Redemption, Notice and Marshalling of Assets, Etc.  To the fullest extent permitted by law, the Mortgagor hereby irrevocably and unconditionally waives and releases (a) all benefits that might accrue to the Mortgagor by virtue of any present or future moratorium law or other law exempting the Collateral from attachment, levy or sale on execution or providing for any appraisement, valuation, stay of execution, exemption from civil process, redemption or extension of time for payment; (b) all notices of any Event of Default or of the Mortgagee’s or any other Secured Party’s intention to accelerate maturity of the Secured Obligations or of any election to exercise or any actual exercise of any right, remedy or recourse provided for hereunder or under any Secured Transaction Document or available at law; and (c) any right to a marshalling of assets or a sale in inverse order of alienation.  If any law referred to in this Mortgage and now in force, of which the Mortgagor or its successor or successors might take advantage despite the provisions hereof, shall hereafter be repealed or cease to be in force, such law shall thereafter be deemed not to constitute any part of the contract herein contained or to preclude the operation or application of the provisions hereof.  If the laws of any state which provides for a redemption period do not permit the redemption period to be waived, the redemption period shall be specifically reduced to the minimum amount of time allowable by statute.
		

		
			Section 5.14.   Application of Proceeds.  The proceeds of any sale of the Mortgaged Property or any part thereof and all other monies received in any proceedings for the enforcement hereof or otherwise, whose application has not elsewhere herein been specifically provided for, shall be applied:
		

		
			(a)  First, to the payment of all reasonable expenses incurred by the Trustee or the Mortgagee incident to the enforcement of this Mortgage, the Credit Agreement or any Secured Transaction Document to collect any portion of the Secured Obligations (including, without limiting the generality of the foregoing, expenses of any entry or taking of possession, of any sale, of advertisement thereof, and of conveyances, and court costs, compensation of agents and employees, legal fees and a reasonable commission to the Trustee acting, if applicable), and to the payment of all other reasonable charges, expenses, liabilities and advances incurred or made by the Trustee or the Mortgagee under this Mortgage or in executing any trust or power hereunder; and
		

		
			(b)  Second, as set forth in Section 10.02(c) of the Credit Agreement.
		

		
			Section 5.15.   Resignation of Operator.  In addition to all rights and remedies under this Mortgage, at law and in equity, if any Event of Default shall occur and the Trustee or the Mortgagee shall exercise any remedies under this Mortgage with respect to any portion of the Mortgaged Property (or the Mortgagor shall transfer any Mortgaged Property “in lieu of” foreclosure) whereupon the Mortgagor is divested of its title to any of the Collateral, the Mortgagee
		

		
			
		

		
			

		 

		

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			shall have the right to request that any operator of any Mortgaged Property which is either the Mortgagor or any Affiliate of the Mortgagor to resign as operator under the joint operating agreement applicable thereto, and no later than 60 days after receipt by the Mortgagor of any such request, the Mortgagor shall resign (or cause such other Person to resign) as operator of such Collateral.
		

		
			Section 5.16. Indemnity.  THE INDEMNIFIED PARTIES SHALL NOT BE LIABLE, IN CONNECTION WITH ANY ACTION TAKEN, FOR ANY LOSS SUSTAINED BY THE MORTGAGOR RESULTING FROM AN ASSERTION THAT THE MORTGAGEE HAS RECEIVED FUNDS FROM THE PRODUCTION OF HYDROCARBONS CLAIMED BY THIRD PERSONS OR ANY ACT OR OMISSION OF ANY INDEMNIFIED PARTY IN ADMINISTERING, MANAGING, OPERATING OR CONTROLLING THE MORTGAGED PROPERTY INCLUDING SUCH LOSS WHICH MAY RESULT FROM THE ORDINARY NEGLIGENCE OF AN INDEMNIFIED PARTY UNLESS SUCH LOSS IS CAUSED BY THE WILLFUL MISCONDUCT, BAD FAITH OR GROSS NEGLIGENCE OF THE INDEMNIFIED PARTY SEEKING INDEMNITY.  NO INDEMNIFIED PARTY SHALL BE OBLIGATED TO PERFORM OR DISCHARGE ANY OBLIGATION, DUTY OR LIABILITY OF THE MORTGAGOR.  THE MORTGAGOR SHALL AND DOES HEREBY AGREE TO INDEMNIFY EACH INDEMNIFIED PARTY FOR, AND TO HOLD EACH INDEMNIFIED PARTY HARMLESS FROM, ANY AND ALL LIABILITY, LOSS OR DAMAGE WHICH MAY OR MIGHT BE INCURRED BY ANY INDEMNIFIED PARTY BY REASON OF THIS MORTGAGE OR THE EXERCISE OF RIGHTS OR REMEDIES HEREUNDER UNLESS SUCH LOSS IS CAUSED BY THE WILLFUL MISCONDUCT, BAD FAITH OR GROSS NEGLIGENCE OF THE INDEMNIFIED PARTY SEEKING INDEMNITY.  IF ANY INDEMNIFIED PARTY SHALL MAKE ANY EXPENDITURE ON ACCOUNT OF ANY SUCH LIABILITY, LOSS OR DAMAGE, THE AMOUNT THEREOF, INCLUDING COSTS, EXPENSES AND REASONABLE ATTORNEYS’ FEES, SHALL BE A DEMAND OBLIGATION (WHICH OBLIGATION THE MORTGAGOR HEREBY EXPRESSLY PROMISES TO PAY) OWING BY THE MORTGAGOR TO SUCH INDEMNIFIED PARTY AND SHALL BEAR INTEREST FROM THE DATE EXPENDED UNTIL PAID AS PROVIDED IN THE CREDIT AGREEMENT.  THE MORTGAGOR HEREBY ASSENTS TO, RATIFIES AND CONFIRMS ANY AND ALL ACTIONS OF EACH INDEMNIFIED PARTY WITH RESPECT TO THE MORTGAGED PROPERTY TAKEN UNDER AND IN COMPLIANCE WITH THE TERMS OF THIS MORTGAGE.  THE LIABILITIES OF THE MORTGAGOR AS SET FORTH IN THIS SECTION 5.16 SHALL SURVIVE THE TERMINATION OF THIS MORTGAGE.
		

		
			ARTICLE VI
		

		
			THE TRUSTEE
		

		
			Section 6.01.   Duties, Rights, and Powers of Trustee.  The Trustee shall have no duty to see to any recording, filing or registration of this Mortgage or any other instrument in addition or supplemental thereto, or to give any notice thereof, or to see to the payment of or be under any duty in respect of any tax or assessment or other governmental charge which may be levied or assessed on the Mortgaged Property, or any part thereof, or against the Mortgagor, or to see to the performance or observance by the Mortgagor of any of the covenants and agreements contained herein.  The Trustee shall not be responsible for the execution, acknowledgment or validity of this
		

		
			
		

		
			

		 

		

			16

		

 

		

		
			Mortgage or of any instrument in addition or supplemental hereto or for the sufficiency of the security purported to be created hereby, and makes no representation in respect thereof or in respect of the rights of the Mortgagee.  The Trustee shall have the right to advise with counsel upon any matters arising hereunder and shall be fully protected in relying as to legal matters on the advice of counsel.  The Trustee shall not incur any personal liability hereunder except for the Trustee’s own willful misconduct; and the Trustee shall have the right to rely on any instrument, document or signature authorizing or supporting any action taken or proposed to be taken by him hereunder, believed by him in good faith to be genuine.
		

		
			Section 6.02.   Successor Trustee.  The Trustee may resign by written notice addressed to the Mortgagee or be removed at any time with or without cause by an instrument in writing duly executed on behalf of the Mortgagee.  In case of the death, resignation or removal of the Trustee, a successor may be appointed by the Mortgagee by instrument of substitution complying with any applicable Governmental Requirements, or, in the absence of any such requirement, without formality other than appointment and designation in writing.  Written notice of such appointment and designation shall be given by the Mortgagee to the Mortgagor, but the validity of any such appointment shall not be impaired or affected by failure to give such notice or by any defect therein.  Such appointment and designation shall be full evidence of the right and authority to make the same and of all the facts therein recited.  Upon the making of any such appointment and designation, this Mortgage shall vest in the successor all the estate and title in and to all of the Mortgaged Property in or adjacent to the Deed of Trust State, and the successor shall thereupon succeed to all of the rights, powers, privileges, immunities and duties hereby conferred upon the Trustee named herein, and one such appointment and designation shall not exhaust the right to appoint and designate an additional successor but such right may be exercised repeatedly until the Secured Obligations are paid as provided in Section 12.18(a) of the Credit Agreement.  To facilitate the administration of the duties hereunder, the Mortgagee may appoint multiple trustees to serve in such capacity or in such jurisdictions as the Mortgagee may designate.
		

		
			Section 6.03.   Retention of Moneys.  All moneys received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated in any manner from any other moneys (except to the extent required by law) and the Trustee shall be under no liability for interest on any moneys received by him hereunder.
		

		
			ARTICLE VII
		

		
			MISCELLANEOUS
		

		
			Section 7.01.   Instrument Construed as Mortgage, Etc.  With respect to any portions of the Mortgaged Property located in or adjacent to any State or other jurisdiction the laws of which do not provide for the use or enforcement of a deed of trust or the office, rights and authority of the Trustee as herein provided, the general language of conveyance hereof to the Trustee is intended and the same shall be construed as words of mortgage unto and in favor of the Mortgagee and the rights and authority granted to the Trustee herein may be enforced and asserted by the Mortgagee in accordance with the laws of the jurisdiction in which such portion of the Mortgaged Property is located and the same may be foreclosed at the option of the Mortgagee as to any or all such portions of the Mortgaged Property in any manner permitted by the laws of the jurisdiction in which such portions of the Mortgaged Property is situated.  This Mortgage may be construed as a mortgage,
		

		
			
		

		
			

		 

		

			17

		

 

		

		
			deed of trust, conveyance, assignment, security agreement, fixture filing, pledge, financing statement, hypothecation or contract, or any one or more of them, in order fully to effectuate the Lien hereof and the purposes and agreements herein set forth.
		

		
			Section 7.02.   Releases.
		

		
			(a)  Full Release.  If all Secured Obligations shall be paid as provided in Section 12.18(a) of the Credit Agreement, the Mortgagee shall forthwith release this Mortgage to be entered upon the record at the expense of the Mortgagor and shall execute and deliver or cause to be executed and delivered such instruments of release as may be appropriate or otherwise reasonably requested by the Mortgagor and in such form as required for recordation or filing in all jurisdictions in which this Mortgage has been recorded or filed.  Otherwise, this Mortgage shall remain and continue in full force and effect.
		

		
			(b)  Partial Release.  If any of the Mortgaged Property shall be sold, transferred or otherwise disposed of by the Mortgagor in a transaction permitted by the Credit Agreement, then the Mortgagee, at the request and sole expense of the Mortgagor, shall promptly execute and deliver to the Mortgagor all releases, re-conveyances or other documents reasonably necessary or desirable to evidence the release of the Liens created hereby on the Mortgaged Property and in such form as required for recordation or filing in all jurisdictions in which this Mortgage has been recorded or filed.
		

		
			(c)  Possession of Notes.  The Mortgagor acknowledges and agrees that possession of any Note (or any replacements of any said Note or other instrument evidencing any part of the Secured Obligations) at any time by the Mortgagor or any other Guarantor shall not in any manner extinguish the Secured Obligations or this Mortgage, and the Mortgagor shall have the right to issue and reissue any of the Notes from time to time as its interest or as convenience may require, without in any manner extinguishing or affecting the Secured Obligations or the Lien of this Mortgage.
		

		
			Section 7.03.   Severability.  If any provision hereof is invalid or unenforceable in any jurisdiction, the other provisions hereof shall remain in full force and effect in such jurisdiction and the remaining provisions hereof shall be liberally construed in favor of the Trustee, the Mortgagee and the other Secured Parties in order to effectuate the provisions hereof.  The invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of any such provision in any other jurisdiction.
		

		
			Section 7.04.    Successors and Assigns.  The terms used to designate any Person shall be deemed to include the respective permitted successors and assigns of such Person.
		

		
			Section 7.05.   Satisfaction of Prior Encumbrance.  To the extent that proceeds of the Credit Agreement are used to pay indebtedness by any outstanding Lien against the Mortgaged Property then the parties agree that: (a) such proceeds have been advanced at the Mortgagor’s request, and (b) the Mortgagee and the Lenders shall be subrogated to any and all rights and Liens owned by any owner or holder of such outstanding Liens, irrespective of whether said Liens are or have been released.  It is expressly understood that, in consideration of the payment of such other indebtedness, the Mortgagor hereby waives and releases all demands and causes of action for
		

		
			
		

		
			

		 

		

			18

		

 

		

		
			offsets and payments to, upon and in connection with the said indebtedness.  This Mortgage is made with full substitution and subrogation of the Trustee and the Mortgagee and his successors in this trust and his and their assigns in and to all covenants and warranties by others heretofore given or made in respect of the Mortgaged Property or any part thereof.
		

		
			Section 7.06.   Application of Payments to Certain Obligations.  If any part of the Secured Obligations cannot be lawfully secured by this Mortgage or if any part of the Mortgaged Property cannot be lawfully subject to the Lien hereof to the full extent of the Secured Obligations, then all payments made shall be applied on said Secured Obligations first in discharge of that portion thereof which is not secured by this Mortgage.
		

		
			Section 7.07.   Nature of Covenants.  The covenants and agreements herein contained shall constitute covenants running with the land and interests covered or affected hereby and shall be binding upon the heirs, legal representatives, successors and assigns of the parties hereto.
		

		
			Section 7.08.   Notices.  All notices, requests, consents, demands and other communications required or permitted hereunder shall be in writing and shall be deemed sufficiently given or furnished if delivered to in accordance with Section 12.01 of the Credit Agreement.
		

		
			Section 7.09.   Counterparts.  This Mortgage is being executed in several counterparts, all of which are identical, except that to facilitate recordation, if the Mortgaged Property is situated in more than one county, descriptions of only those portions of the Mortgaged Property located in the county in which a particular counterpart is recorded shall be attached as Exhibit A to such counterpart.  Each of such counterparts shall for all purposes be deemed to be an original and all such counterparts shall together constitute but one and the same instrument.  Complete copies of this Mortgage containing the entire Exhibit A have been retained by the Mortgagee.
		

		
			Section 7.10.   Governing Law.  This Mortgage shall be construed under and governed by the laws of the State of Texas.
		

		
			Section 7.11.   Financing Statement; Fixture Filing.  This Mortgage shall be effective as a financing statement filed as a fixture filing with respect to all Fixtures included within the Mortgaged Property and is to be filed or filed for record in the real estate records, Mortgage records or other appropriate records of each jurisdiction where any part of the Mortgaged Property (including said fixtures) are situated.  This Mortgage shall also be effective as a financing statement covering As-Extracted Collateral (including oil and gas and all other substances of value which may be extracted from the ground) and accounts financed at the wellhead or minehead of wells or mines located on the properties subject to the Applicable UCC and is to be filed for record in the real estate records, Uniform Commercial Code records or other appropriate records of each jurisdiction where any part of the Mortgaged Property is situated.
		

		
			Section 7.12.   Financing Statements.  Pursuant to the Applicable UCC, the Mortgagor authorizes the Mortgagee, its counsel or its representative, at any time and from time to time, to file or record financing statements, continuation statements, amendments thereto and other filing or recording documents or instruments with respect to the Mortgaged Property in such form and in such offices as the Mortgagee reasonably determines appropriate to perfect the security interests
		

		
			
		

		
			

		 

		

			19

		

 

		

		
			of the Mortgagee under this Agreement.  The Mortgagor also authorizes the Mortgagee, its counsel or its representative, at any time and from time to time, to file or record such financing statements that describe the collateral covered thereby as “all assets of the Mortgagor”, “all personal property of the Mortgagor” or words of similar effect. The Mortgagor shall pay all costs associated with the filing of such instruments.
		

		
			In that regard, the following information is provided:
		

			
					
						 

					
					
						 

				
	
					
						Name of Debtor:

					
					
						ARMADILLO E&P, INC.

				
	
					
						Address of Debtor

					
					
						633 17th Street, Suite 1950

				
	
					
						 

					
					
						Denver, Colorado 80202

				
	
					
						State of Formation/Location

					
					
						Delaware

				
	
					
						Organizational ID Number

					
					
						4261017

				
	
					
						Facsimile:

					
					
						(303) 543-5701

				
	
					
						 

					
					
						Attention:  Eric P. McCrady

				
	
					
						Telephone:

					
					
						(303) 543-5700

				
	
					
						Principal Place of

					
					
						633 17th Street, Suite 1950

				
	
					
						Business of Debtor:

					
					
						Denver, Colorado 80202

				
	
					
						 

					
					
						 

				
	
					
						Name of Secured Party:

					
					
						MORGAN STANLEY ENERGY CAPITAL INC.,

				
	
					
						 

					
					
						as Administrative Agent

				
	
					
						Address of Secured

					
					
						1585 Broadway, 16th Floor

				
	
					
						Party:

					
					
						New York, New York 10036

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						Attention: David Lazarus

				
	
					
						E-mail:

					
					
						David.Lazarus@morganstanley.com

				
	
					
						Telephone:

					
					
						(212) 296-8134

				
	
					
						 

					
					
						 

				
	
					
						Owner of Record of

					
					
						 

				
	
					
						Real Property:

					
					
						Mortgagor

				

		
			 
		

		
			Section 7.13.    Exculpation Provisions.  EACH OF THE PARTIES HERETO SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS MORTGAGE; AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS OF THIS MORTGAGE; THAT IT HAS IN FACT READ THIS MORTGAGE AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS OF THIS MORTGAGE; THAT IT HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS MORTGAGE; AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS MORTGAGE; AND THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS MORTGAGE RESULT IN ONE PARTY ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY.  EACH PARTY HERETO AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS MORTGAGE ON THE BASIS THAT THE PARTY HAD NO NOTICE
		

		
			
		

		
			

		 

		

			20

		

 

		

		
			OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT “CONSPICUOUS.”
		

		
			Section 7.14.   References.  The words “herein,” “hereof,” “hereunder” and other words of similar import when used in this Mortgage refer to this Mortgage as a whole, and not to any particular article, section or subsection.  Any reference herein to a Section shall be deemed to refer to the applicable Section of this Mortgage unless otherwise stated herein.  Any reference herein to an exhibit or schedule shall be deemed to refer to the applicable exhibit or schedule attached hereto unless otherwise stated herein.
		

		
			Section 7.15.   Integration. THIS MORTGAGE AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND THERETO, AS APPLICABLE, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. In the event of a conflict between the terms of this Mortgage, the terms of the Guarantee and the terms of the Credit Agreement, as between any of the Loan Parties and the Mortgagee, the terms of the Credit Agreement shall control.
		

		
			Section 7.16.   Timing of Payment and Performance.  If the day specified in this Mortgage for giving any notice, the payment of any obligation, performing any covenant, duty or obligation, or taking any action is not a Business Day (or if the period during which any notice is required to be given, payment to be made, any covenant, duty or obligation is required to be performed, or any action is required to be taken expires on a day that is not a Business Day), then the date for giving such notice, making such payment, performing such covenant, duty or obligation, or taking such action (and the expiration date of such period during which notice is required to be given, any covenant, duty or obligation is required to be performed, or any action is required to be taken) shall be the next day that is a Business Day.
		

		
			Section 7.17.   Intercreditor Agreement.  Notwithstanding anything herein to the contrary, (a) the liens and security interests granted to the Trustee and/or the Mortgagee pursuant to this Mortgage are expressly subject and subordinate to the liens and security interests granted in favor of the Senior Secured Parties (as defined in the Intercreditor Agreement referred to below), including liens and security interests granted to Natixis, New York Branch, as administrative agent, pursuant to or in connection with the Credit Agreement, dated as of April 23, 2018 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time), among the Parent, the Borrower, the banks, financial institutions and other lending institutions from time to time parties as lenders thereto and Natixis, New York Branch, as administrative agent, and (b) the exercise of any right or remedy by Morgan Stanley Energy Capital Inc., as Second Priority Representative (as defined in the Intercreditor Agreement referred to below), hereunder is subject to the limitations and provisions of the Intercreditor Agreement dated as of April 23, 2018 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”), among Natixis, New York Branch, as Senior Representative, Morgan Stanley Energy Capital Inc., as Second Priority Representative, the Parent, the Borrower and its subsidiaries and affiliated entities party thereto. In the event of any conflict between the terms of the Intercreditor Agreement and the terms of this Agreement, the terms of the Intercreditor Agreement shall govern.
		

		
			
		

		
			

		 

		

			21

		

 

		

		
			[THIS SPACE INTENTIONALLY LEFT BLANK]
		

		
			 
		

		
			

		 

		

			22

		

 

		

		
			EXECUTED this __ day of ______, 2018, to be effective as of the Effective Date.
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						ARMADILLO E&P, INC.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						 

				
	
					
						 

					
					
						Name:

					
					
						Cathy L. Anderson

				
	
					
						 

					
					
						Title:

					
					
						Chief Financial Officer

				

		
			 
		

		
			 
		

			
					
						 

					
					
						 

				
	
					
						STATE OF COLORADO

					
					
						§

				
	
					
						 

					
					
						§

				
	
					
						COUNTY OF DENVER

					
					
						§

				

		
			 
		

		
			This instrument was acknowledged before me on April _____, 2018 by Cathy L. Anderson, Chief Financial Officer of Armadillo E&P, Inc., a Delaware corporation, on behalf of said corporation.
		

		
			 
		

		

		
			Notary Public
		

		
			SEAL:
		

		
			 
		

		
			 
		

		
			

		 

		

			Signature Page to Mortgage

		

 

		

		
			EXHIBIT A
		

		
			to
		

		
			MORTGAGE, DEED OF TRUST, ASSIGNMENT OF AS-EXTRACTED COLLATERAL, SECURITY AGREEMENT, FIXTURE FILING AND FINANCING STATEMENT
		

		
			 
		

		
			Introduction
		

		
			The capitalized terms used but not defined in this Exhibit A are used as defined in the Mortgage.  For purposes of this Exhibit A the capitalized terms not defined in the Mortgage are as follows:
		

		
			1.   “Working Interest” or “Gross Working Interest” and “W.I.” or “G.W.I.” means an interest owned in an oil, gas and mineral lease that determines the cost bearing percentage of the owner of such interest.
		

		
			2.         “Net Revenue Interest” or “N.R.I.” means an interest (expressed as a percentage or decimal fraction) in and to all Hydrocarbons produced and saved from or attributable to a Well. In the case of any Well listed in Exhibit A, the Net Revenue Interest specified for such Well shall mean the sum of the percentage or decimal fraction set forth after the words “Net Revenue Interest” in the portion applicable to such Well.
		

		
			3.         “Well” means (i) any existing well identified in Exhibit A, including replacement wells drilled in lieu thereof from which Hydrocarbons are now or hereafter produced and (ii) any well at any time producing or capable of producing Hydrocarbons as defined above, including any well which has been shut-in, has temporarily ceased production or on which workover, reworking, plugging and abandonment or other operations are being conducted or planned.
		

		
			All references contained in this Exhibit A to the Oil and Gas Properties are intended to include references to (i) the volume or book and page, file, entry or instrument number of the appropriate records of the particular county in the state where each such lease or other instrument is recorded and (ii) all valid and existing amendments to such lease or other instrument of record in such county records regardless of whether such amendments are expressly described herein.  A special reference is here made to each such lease or other instrument and the record thereof for a more particular description of the property and interests sought to be affected by the Mortgage and for all other purposes.
		

		
			For recording purposes, in regards to each county portion to this Exhibit A, this Introduction may be attached to an original executed copy of the Mortgage, Deed of Trust, Assignment of As-Extracted Collateral, Security Agreement, Fixture Filing and Financing Statement to be separately filed of record in each county.
		

		
			WHENEVER IN EXHIBIT A TO THIS MORTGAGE THERE IS A PROPERTY DESCRIPTION THAT REFERS TO A GOVERNMENTAL SECTION (WHETHER AS “SECTION” OR “SEC,” SIMPLY “S” OR WITHOUT ANY DESIGNATION EXCEPT IN THE COLUMN HEADER) WITHOUT FURTHER REFERRING TO A PARTICULAR
		

		
			
		

		
			

		 

		

			Exhibit A – Page 1

		

 

		

		
			GOVERNMENTAL SUBDIVISION(S) OF THE SECTION, THAT PROPERTY DESCRIPTION IS INTENDED TO REFER TO AND ENCOMPASS THE ENTIRE GOVERNMENTAL SECTION.  FOR AVOIDANCE OF DOUBT, IT IS THE INTENT OF MORTGAGOR IN SUCH CASES THAT THE GRANT OF A MORTGAGE LIEN UNDER § 2.01 INCLUDES ALL OF MORTGAGOR’S RIGHT, TITLE AND INTEREST IN AND TO ANY AND ALL HYDROCARBON INTERESTS OF WHATSOEVER KIND OR NATURE NOW OWNED OR HEREAFTER ACQUIRED LYING WITHIN THE ENTIRE GOVERNMENTAL SECTION IDENTIFIED ON SAID EXHIBIT A.
		

		 

		

			Exhibit A – Page 2snde_Ex4_9

		

			 

		

		
			Exhibit 4.9
		

		
			INTERCREDITOR AGREEMENT
		

		
			among
		

		
			SUNDANCE ENERGY, INC.,
		

		
			the other Grantors party hereto,
		

		
			NATIXIS, NEW YORK BRANCH,
		

		
			 as Senior Representative,
		

		
			and
		

		
			MORGAN STANLEY ENERGY CAPITAL, INC.,
		

		
			 as the Second Priority Representative,
		

		
			dated as of April 23, 2018.
		

		
			 
		

		
			

		 

 

		

		
			INTERCREDITOR AGREEMENT dated as of April 23, 2018 (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”), among SUNDANCE ENERGY, INC., a Colorado corporation (the “Company”), the other Grantors (as defined below) party hereto, NATIXIS, NEW YORK BRANCH, as representative for the Senior Secured Parties (in such capacity and together with its successors in such capacity, the “Senior Representative”), and MORGAN STANLEY ENERGY CAPITAL, INC., as representative for the Second Priority Debt Parties (in such capacity and together with its successors in such capacity, the “Second Priority Representative”).
		

		
			R E C I T A L S
		

		
			WHEREAS, Sundance Energy Australia Limited, a limited company organized under the laws of South Australia (the “Parent”), the Company, as borrower, the Senior Representative, as administrative agent, and the various financial institutions party thereto as agents or lenders are parties to that certain Credit Agreement dated as of the date hereof (as amended, restated, extended, replaced, supplemented, modified or Refinanced in accordance with the terms hereof, the “Senior Credit Agreement”), pursuant to which such financial institutions and other entities have agreed to make loans and extended other financial accommodations to the Company, which are secured, along with certain Swap Agreements, on a first priority basis pursuant thereto;
		

		
			WHEREAS, the Parent, the Company, as borrower, the Second Priority Representative, as administrative agent, and the various financial institutions and other entities parties thereto as agents or lenders are parties to that certain Amended and Restated Term Loan Credit Agreement dated as of the date hereof (as amended, restated, extended, replaced, supplemented, modified or Refinanced in accordance with the terms hereof, the “Second Priority Credit Agreement”), pursuant to which such financial institutions and other entities have agreed to make loans to the Company which will be secured on a second priority basis pursuant thereto;
		

		
			WHEREAS, the Company and the Grantors (as defined below) have granted to the Senior Representative security interests in the Collateral (as defined below) as security for payment and performance of the Senior Obligations (as defined below); and
		

		
			WHEREAS, the Company and the other Grantors have granted to the Second Priority Representative junior security interests in the Collateral as security for payment and performance of the Second Priority Debt Obligations (as defined below), so that they may be secured on a junior priority basis by the same collateral that secures the obligations under the Senior Credit Agreement;
		

		
			NOW THEREFORE, in consideration of the mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Senior Representative (for itself and on behalf of the Senior Secured Parties (as defined below)), the Second Priority Representative (for itself and on behalf of the Second Priority Debt Parties (as defined below)), agree as follows:
		

		
			
		

		
			

		 

		

			 

		

		

			 

		

 

		

			 

		

		

		
			ARTICLE I

Definitions
		

		
			SECTION 1.01.     Certain Defined Terms. Capitalized terms used but not otherwise defined herein have the meanings set forth in the Senior Credit Agreement or in the UCC (it being understood that if any term is defined both under the Senior Credit Agreement and the UCC, the Senior Credit Agreement defined term shall be used absent manifest error). As used in this Agreement, the following terms have the meanings specified below:
		

		
			“Agreement” has the meaning assigned to such term in the introductory paragraph of this Agreement.
		

		
			“Bankruptcy Case” means a case under the Bankruptcy Code or any other Bankruptcy Law.
		

		
			“Bankruptcy Code” means Title 11 of the United States Code, as amended or any similar federal or state law for the relief of debtors.
		

		
			“Bankruptcy Law” means the Bankruptcy Code and any other federal, state or foreign law for the relief of debtors, or any arrangement, reorganization, insolvency, moratorium, assignment for the benefit of creditors, any other marshalling of the assets or liabilities of the Company or any of its Subsidiaries, or similar law affecting creditors’ rights generally.
		

		
			“Borrowing Base” means, on any date, an amount equal to the most recent determination or adjustment made under the Senior Credit Agreement by the Senior Secured Parties, in accordance with  usual and customary industry policies and procedures of commercial banks engaged in US oil and gas reserve based lending in the ordinary course of their respective businesses for extending conforming credit to oil and gas reserve-based customers, as the maximum amount of principal obligations that may be outstanding plus the maximum stated amount of all letters of credit outstanding under and in accordance with the Senior Credit Agreement, which determination shall be based upon the loan collateral value assigned to the Oil and Gas Properties of the Grantors and such other credit factors (including without limitation the assets, liabilities, cash flow, business, properties, prospects, management and ownership of the Grantors) that the Senior Secured Parties deem significant.
		

		
			“Cap Amount” means, as of any day any debt in respect of a Loan is incurred or a Letter of Credit is issued (other than renewal of outstanding Letters of Credit in amounts not exceeding the outstanding face amounts), the lesser of (a) $250,000,000 and (b) the Borrowing Base in effect on such day.  The “Cap Amount” shall not include any additional amounts to the extent such amounts are customary advances made to pay taxes on or to insure any Collateral or otherwise to protect and preserve the Collateral or the perfection and priority of the Liens of the Senior Representative or any Senior Secured Party with respect thereto, in each case to the extent not timely paid or reimbursed by the Grantors).
		

		
			“Collateral” means all of the property of the Grantors whether real, personal or mixed with respect to which a Lien is granted (or is required to be granted) pursuant to a Senior Collateral Document as security for the Senior Obligations.
		

		
			
		

		
			

		 

		

			-2-

		

 

		

			 

		

		

		
			“Collateral Documents” means the Senior Collateral Documents and the Second Priority Collateral Documents.
		

		
			“Company” has the meaning assigned to such term in the introductory paragraph of this Agreement.
		

		
			“Debt Facility” means any Senior Facility and any Second Priority Debt Facility.
		

		
			“DIP Cap” has the meaning assigned to such term in Section 6.01.
		

		
			“DIP Financing” has the meaning assigned to such term in Section 6.01.
		

		
			“Discharge of Senior Obligations” means, except to the extent otherwise expressly provided in Section 5.06:
		

		
			(a)        payment in full in cash of the principal of and interest (including interest accruing on or after the commencement of any Insolvency or Liquidation Proceeding, whether or not such interest would be allowed in such Insolvency or Liquidation Proceeding), on all Debt outstanding under the Senior Debt Documents and constituting Senior Obligations (other than Excess Senior Obligations until repayment in full of the Second Priority Debt Obligations);
		

		
			(b)        payment in full in cash of all other Senior Obligations (other than (i) Excess Senior Obligations until repayment in full of the Second Priority Debt Obligations and (ii) Senior Obligations owed to Secured Swap Providers or Secured Cash Management Providers) that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid;
		

		
			(c)        termination or expiration of all commitments, if any, to extend credit that would constitute Senior Obligations (other than Excess Senior Obligations until repayment in full of the Second Priority Debt Obligations);
		

		
			(d)        termination or cash collateralization of (in an amount and manner reasonably satisfactory to the Senior Representative, but in no event greater than 105% of the aggregate maximum undrawn face amount), or the entry into arrangements reasonably satisfactory to the Senior Representative and the Issuing Bank with respect to, all Letters of Credit issued under the Senior Debt Documents and constituting Senior Obligations (other than Excess Senior Obligations until repayment in full of the Second Priority Debt Obligations);
		

		
			(e)        termination of all Secured Swap Agreements and payment of all Senior Obligations owed to all Secured Swap Providers or, with respect to any particular Secured Swap Agreement, such other arrangements as have been made by the Borrower and the Secured Swap Provider who is a party to such Secured Swap Agreement (and communicated to the Senior Representative); and
		

		
			(f)        payment of all Senior Obligations owed to all Secured Cash Management Providers (or, with respect to any particular Secured Cash Management Agreement, such other arrangements as have been made by the Borrower and the Secured Cash Management Provider
		

		
			
		

		
			

		 

		

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			who is a party to such Secured Cash Management Agreement (and communicated to the Senior Representative).
		

		
			“Excess Senior Obligations” means, at any time a determination thereof is to be made, the amount of Senior Obligations, if any, constituting the principal amount of loans and unreimbursed draws under Letters of Credit plus the maximum stated amount of undrawn Letters of Credit outstanding under the Senior Credit Agreement that are in excess of the Cap Amount.
		

		
			“Grantors” means the Parent, the Company and any Subsidiary which has granted a Lien on any Collateral pursuant to any Collateral Document to secure any Senior Obligation.
		

		
			“Guarantors” means the “Guarantors” as defined in the Senior Credit Agreement.
		

		
			“Insolvency or Liquidation Proceeding” means:
		

		
			(a)        any case commenced by or against the Company or any other Guarantor under any Bankruptcy Law, any other proceeding for the reorganization, recapitalization or adjustment or marshalling of the assets or liabilities of the Company or any other Guarantor, any receivership or assignment for the benefit of creditors relating to the Company or any other Guarantor or any similar case or proceeding relative to the Company or any other Guarantor or its creditors, as such, in each case whether or not voluntary;
		

		
			(b)        any liquidation, dissolution, marshalling of assets or liabilities or other winding up of or relating to the Company or any other Guarantor, 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 the Company or any other Guarantor are determined and any payment or distribution is or may be made on account of such claims.
		

		
			“New Senior Debt Notice” has the meaning assigned to such term in Section 5.06.
		

		
			“Officer’s Certificate” has the meaning assigned to such term in Section 8.08.
		

		
			“Permitted Delay” means any period during which the Senior Representative or the Senior Secured Parties are diligently pursuing their rights and remedies with respect to all or a material portion of the Collateral or the Company or any other Grantor is then a debtor under or with respect to (or otherwise subject to) any Insolvency or Liquidation Proceeding.
		

		
			“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
		

		
			“Pledged or Controlled Collateral” has the meaning assigned to such term in Section 5.05(a).
		

		
			“Proceeds” means the proceeds of any sale, collection or other liquidation of Collateral and any payment or distribution made in respect of Collateral in a Bankruptcy Case and
		

		
			
		

		
			

		 

		

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			any amounts received by the Senior Representative or any Senior Secured Party from a Second Priority Debt Party in respect of Collateral pursuant to this Agreement.
		

		
			“Purchase” has the meaning assigned to such term in Section 5.07(a).
		

		
			“Recovery” has the meaning assigned to such term in Section 6.04.
		

		
			“Refinance” means, in respect of a Debt Facility, to refinance, extend, renew, defease, amend, increase, modify, supplement, restructure, refund, replace or repay, or to issue other Debt or enter alternative financing arrangements, in exchange or replacement for such Debt Facility (in whole or in part), including by adding or replacing lenders, creditors, agents, borrowers and/or guarantors, and including, in each case, through any credit agreement, indenture or other agreement. “Refinanced” and “Refinancing” have correlative meanings.
		

		
			“Representatives” means the Senior Representative and the Second Priority Representative.
		

		
			“Second Priority Collateral” means any “Collateral” or the assets encompassed by any equivalent term, in each case, as defined in any Second Priority Debt Document or any other assets of the Company or any other Grantor with respect to which a Lien is granted or purported to be granted pursuant to a Second Priority Collateral Document as security for any Second Priority Debt Obligation.
		

		
			“Second Priority Collateral Documents” means the “Guarantee and Collateral Agreement” and the other “Security Instruments” as each of such terms are defined in the Second Priority Credit Agreement or any similar term in any Second Priority Debt Document in respect of any Refinancing of the Second Priority Credit Agreement, and each of the collateral agreements, security agreements, mortgages, deeds of trust and other instruments and documents executed and delivered by the Company or any Grantor for purposes of providing Second Priority Collateral.
		

		
			“Second Priority Credit Agreement” has the meaning assigned to such term in the recitals.
		

		
			“Second Priority Debt Documents” means the Second Priority Credit Agreement and the “Loan Documents” as such term is defined in the Second Priority Credit Agreement or any similar term in any Second Priority Debt Document in respect of any Refinancing of the Second Priority Credit Agreement.
		

		
			“Second Priority Debt Facility” means the Second Priority Credit Agreement and any Refinancing thereof.
		

		
			“Second Priority Debt Obligations” means the “Secured Obligations” as defined in the Second Priority Credit Agreement or any similar term in any Second Priority Debt Document in respect of any Refinancing of the Second Priority Credit Agreement, including any interest which accrues after the commencement of any Bankruptcy Case, whether or not allowed or allowable as a claim in any such proceeding.
		

		
			
		

		
			

		 

		

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			“Second Priority Debt Parties” means the Agents or any Lender, each as defined in the Second Priority Credit Agreement, together with the beneficiaries of each indemnification obligation undertaken by the Company or any other Guarantor under any related Second Priority Debt Documents and other Person holding Refinanced Debt in respect thereof (including Refinanced Debt of Refinanced Debt).
		

		
			“Second Priority Representative” has the meaning assigned to such term in the introductory paragraph of this Agreement.
		

		
			“Secured Parties” means the Senior Secured Parties and the Second Priority Debt Parties.
		

		
			“Selling Party” has the meaning assigned to such term in Section 5.07(e).
		

		
			  “Senior Collateral Documents” means the “Guaranty and Collateral Agreement” and the other “Security Instruments” as each of such terms are defined in the Senior Credit Agreement and each of the collateral agreements, security agreements, mortgages, deeds of trust and other instruments and documents executed and delivered by the Company or any other Grantor for purposes of providing collateral security for any Senior Obligation.
		

		
			“Senior Credit Agreement” has the meaning assigned to such term in the recitals to this Agreement.
		

		
			“Senior Debt Documents” means the Senior Credit Agreement and the other “Loan Documents” as such term is defined in the Senior Credit Agreement or any similar term in any Senior Debt Document in respect of any Refinancing of the Senior Credit Agreement.
		

		
			“Senior Facility” means the Senior Credit Agreement and any Refinancing thereof.
		

		
			“Senior Obligations” means the “Secured Obligations” as defined in the Senior Credit Agreement and any equivalent term in any Refinancing thereof.
		

		
			“Senior Representative” has the meaning assigned to such term in the introductory paragraph of this Agreement.
		

		
			“Senior Secured Parties” means the “Secured Parties” as defined in the Senior Credit Agreement and other Person holding Refinanced Debt in respect thereof (including Refinanced Debt of Refinanced Debt).
		

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

		
			“Subsidiary” has the meaning assigned to such term in the Senior Credit Agreement in effect on the date hereof.
		

		
			“Swap Agreements” means “Swap Agreement” as defined in the Senior Credit Agreement or any similar term in any Senior Debt Document in respect of any Refinancing of the Senior Credit Agreement.
		

		
			
		

		
			

		 

		

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			“Uniform Commercial Code” or “UCC” means the Uniform Commercial Code as from time to time in effect in the State of New York, or the Uniform Commercial Code (or any similar or comparable legislation) of another jurisdiction, to the extent it may be required to apply to any item or items of Collateral.
		

		
			SECTION 1.02.    Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument, other document, statute or regulation herein shall be construed as referring to such agreement, instrument, other document, statute or regulation as from time to time amended, supplemented or otherwise modified, (b) 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, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections and Annexes shall be construed to refer to Articles, Sections and Annexes of this Agreement, (e) 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 (f) the term “or” is not exclusive.
		

		
			ARTICLE II

Priorities and Agreements with Respect to Collateral
		

		
			SECTION 2.01.    Lien Subordination.  Notwithstanding the date, time, manner or order of filing or recordation of any document or instrument or grant, attachment or perfection of any Liens granted to any Second Priority Representative or any Second Priority Debt Parties on the Collateral or of any Liens granted to the Senior Representative or any other Senior Secured Party on the Collateral (or any actual or alleged defect in any of the foregoing) or any defect or deficiencies in, or failure to perfect or lapse in perfection of, or avoidance as a fraudulent conveyance or otherwise and notwithstanding any provision of the UCC, any applicable law, any Second Priority Debt Document or any Senior Debt Document or any other circumstance whatsoever, the Second Priority Representative, on behalf of itself and each Second Priority Debt Party under the Second Priority Debt Facility, hereby agrees that (a) any Lien on the Collateral securing any Senior Obligations now or hereafter held by or on behalf of the Senior Representative or any other Senior Secured Party or other agent or trustee therefor, regardless of how acquired, whether by grant, statute, operation of law, subrogation or otherwise, shall have priority over and be senior in all respects and prior to any Lien on the Collateral securing any Second Priority Debt Obligations and (b) any Lien on the Collateral securing any Second Priority Debt Obligations now or hereafter held by or on behalf of the Second Priority Representative, any Second Priority Debt Parties or any other agent or trustee therefor, regardless of how acquired, whether by grant, statute, operation of law, subrogation or otherwise, shall be junior and subordinate in all respects to all Liens on the Collateral securing any Senior Obligations. All Liens on the Collateral securing any
		

		
			
		

		
			

		 

		

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			Senior Obligations shall be and remain senior in all respects and prior to all Liens on the Collateral securing any Second Priority Debt Obligations for all purposes, whether or not such Liens securing any Senior Obligations are subordinated to any Lien securing any other obligation of the Company, any Grantor or any other Person or otherwise subordinated, voided, avoided, invalidated or lapsed. For the avoidance of doubt, the subordination provided for in this Agreement is lien subordination only and the Second Priority Debt Obligations are not subordinated in right of payment to the Senior Obligations.
		

		
			SECTION 2.02.    Nature of Senior Secured Party Claims.  The Second Priority Representative, on behalf of itself and each Second Priority Debt Party under the Second Priority Debt Facility, acknowledges that (a) a portion of the Senior Obligations may be revolving in nature and that the amount thereof that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed, (b) the terms of the Senior Debt Documents and the Senior Obligations may be amended, supplemented or otherwise modified, and the Senior Obligations, or a portion thereof, may be Refinanced from time to time and (c) the aggregate amount of the Senior Obligations may be increased, in each case, without notice to or consent by the Second Priority Representative or the Second Priority Debt Parties and without affecting the provisions hereof. The Lien priorities provided for in Section 2.01 shall not be altered or otherwise affected by any amendment, supplement or other modification, or any Refinancing, of either the Senior Obligations or the Second Priority Debt Obligations, or any portion thereof. As between the Company and the other Grantors and the Second Priority Debt Parties or Senior Secured Parties, as the case may be, the foregoing provisions will not limit or otherwise affect the obligations of the Company and the Grantors contained in any Senior Debt Document or Second Priority Debt Document, as the case may be, with respect to the incurrence of additional Senior Obligations or Second Priority Debt, as the case may be.
		

		
			SECTION 2.03.     Prohibition on Contesting Liens.  The Second Priority Representative, for itself and on behalf of each Second Priority Debt Party under the Second Priority Debt Facility, agrees that it shall not (and hereby waives any right to) contest or support any other Person in contesting, in any proceeding (including any Insolvency or Liquidation Proceeding), the validity, extent, perfection, priority or enforceability of any Lien securing any Senior Obligations held (or purported to be held) by or on behalf of the Senior Representative or any of the other Senior Secured Parties or other agent or trustee therefor in any Collateral, and the Senior Representative, for itself and on behalf of each Senior Secured Party under the Senior Facility, agrees that it shall not (and hereby waives any right to) contest or support any other Person in contesting, in any proceeding (including any Insolvency or Liquidation Proceeding), the validity, extent, perfection, priority or enforceability of any Lien securing any Second Priority Debt Obligations held (or purported to be held) by or on behalf of any Second Priority Representative or any of the Second Priority Debt Parties in the Second Priority Collateral. Notwithstanding the foregoing, no provision in this Agreement shall be construed to prevent or impair the rights of the Senior Representative to enforce this Agreement (including the priority of the Liens securing the Senior Obligations as provided in Section 2.01) or any of the Senior Debt Documents.
		

		
			SECTION 2.04.     No New Liens.  The parties hereto agree that, so long as the Discharge of Senior Obligations has not occurred, (a) none of the Grantors shall grant or permit any additional Liens on any asset or property of any Grantor to secure any Second Priority Debt
		

		
			
		

		
			

		 

		

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			Obligation unless it has granted, or concurrently therewith grants, a Lien on such asset or property of such Grantor to secure the Senior Obligations; (b) subject to Section 2.06, none of the Grantors shall grant or permit any additional Liens on any asset or property of any Grantor to secure any Senior Obligations unless it has granted, or concurrently therewith grants, a Lien on such asset or property of such Grantor to secure the Second Priority Debt Obligations; and (c) if any Second Priority Representative or any Second Priority Debt Party shall hold any Lien on any assets or property of any Grantor securing any Second Priority Debt Obligations that are not also subject to the first-priority Liens securing all Senior Obligations under the Senior Collateral Documents, such Second Priority Representative or Second Priority Debt Party (i) shall notify the Senior Representative promptly upon becoming aware thereof and, unless such Grantor shall promptly grant a similar Lien on such assets or property to the Senior Representative as security for the Senior Obligations, shall assign such Lien to the Senior Representative as security for all Senior Obligations for the benefit of the Senior Secured Parties (but may retain a junior lien on such assets or property subject to the terms hereof) and (ii) until such assignment or such grant of a similar Lien to the Senior Representative, shall be deemed to hold and have held such Lien for the benefit of the Senior Representative and the other Senior Secured Parties as security for the Senior Obligations.
		

		
			To the extent that the foregoing provisions are not complied with for any reason, without limiting any other rights and remedies available to the Senior Representative and/or the Senior Secured Parties, the Representatives, on behalf of the Secured Parties of the Debt Facility for which it is acting, agrees that any amounts received by or distributed to any of them pursuant to or as a result of Liens granted in contravention of this Section 2.04 shall be treated in the same manner as set forth in Section 4.02.
		

		
			SECTION 2.05.   Perfection of Liens.  Except for the limited agreements of the Senior Representative pursuant to Section 5.05 hereof, neither the Senior Representative nor the Senior Secured Parties shall be responsible for perfecting and maintaining the perfection of Liens with respect to the Collateral for the benefit of the Second Priority Representative or the Second Priority Debt Parties. The provisions of this Agreement are intended solely to govern the respective Lien priorities as between the Senior Secured Parties and the Second Priority Debt Parties and shall not impose on the Senior Representative, the Senior Secured Parties, the Second Priority Representative, the Second Priority Debt Parties or any agent or trustee therefor any obligations in respect of the disposition of Proceeds of any Collateral which would conflict with prior perfected claims therein in favor of any other Person or any order or decree of any court or governmental authority or any applicable law.
		

		
			SECTION 2.06.    Certain Cash Collateral.  Notwithstanding anything in this Agreement or any other Senior Debt Documents or Second Priority Debt Documents to the contrary, collateral consisting of cash and cash equivalents pledged to secure Senior Obligations consisting of reimbursement obligations in respect of Letters of Credit or otherwise held by the Senior Representative pursuant to Section 2.08(j) of the Senior Credit Agreement as in effect on the date hereof (or any successor provision in any Senior Debt Document in respect of any Refinancing of the Senior Credit Agreement with equivalent terms and requirements) shall be applied as specified in the Senior Credit Agreement and will not constitute Collateral.
		

		
			
		

		
			

		 

		

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			SECTION 2.07.   Similar Liens and Agreements.  Except as provided in Section 2.06, the Representatives, on behalf of the Secured Parties of the Debt Facility for which it is acting, agree that it is their intention that the Collateral securing each Debt Facility be identical. In furtherance of the foregoing and of Section 8.11, the parties hereto agree, subject to the other provisions of this Agreement:
		

		
			(a)        upon request by the Senior Representative or the Second Priority Representative, to cooperate in good faith from time to time in order to determine the specific items included in the Collateral and the steps taken to perfect their respective Liens thereon and the identity of the respective parties obligated under the Senior Loan Documents and the Second Priority Loan Documents; and
		

		
			(b)        that the documents and agreements creating or evidencing the Collateral and guarantees for the Senior Obligations and the Second Priority Obligations, subject to Section 5.03, shall be in all material respects the same forms of documents other than with respect to the first lien and the second lien nature of the Obligations thereunder.
		

		
			ARTICLE III

Enforcement
		

		
			SECTION 3.01.    Exercise of Remedies.
		

		
			(a)        So long as the Discharge of Senior Obligations has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Company or any other Grantor,
		

		
			(i)         neither the Second Priority Representative nor any Second Priority Debt Party will (A) exercise or seek to exercise any rights or remedies (including setoff or recoupment) with respect to any Collateral in respect of any Second Priority Debt Obligations, or institute any action or proceeding with respect to such rights or remedies (including any action of foreclosure); provided, that, subject to extension as a result of any Permitted Delay, the Second Priority Representative may exercise any or all such rights (but not rights the exercise of which is otherwise prohibited by this Agreement including Article VI hereof) after a period (such period, as extended as a result of any Permitted Delay, the “Standstill Period”) of 180 consecutive days has elapsed from the date of delivery of written notice from the Second Priority Representative to the Senior Representative stating that (1) an Event of Default (as defined under the Second Priority Debt Documents) has occurred and is continuing thereunder and (2) the Second Priority Debt Obligations are currently due and payable in full (whether as a result of acceleration thereof or otherwise) in accordance with the terms of the Second Priority Debt Documents, (B) except to the extent not prohibited herein, contest, protest or object to any foreclosure proceeding or action brought with respect to the Collateral by the Senior Representative or any Senior Secured Party in respect of the Senior Obligations, the exercise of any right by the Senior Representative or any Senior Secured Party (or any agent or sub-agent on their behalf) in respect of the Senior Obligations under any lockbox agreement, control agreement, landlord waiver or bailee’s letter or similar agreement or arrangement to which
		

		
			
		

		
			

		 

		

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			the Senior Representative or any Senior Secured Party either is a party or may have rights as a third party beneficiary, or any other exercise by any such party of any rights and remedies relating to the Collateral under the Senior Debt Documents or otherwise in respect of the Senior Obligations, (C) object to the forbearance by the Senior Secured Parties from bringing or pursuing any foreclosure proceeding or action during the Standstill Period or any other exercise of any rights or remedies relating to the Collateral in respect of Senior Obligations or (D) credit bid (it being understood, for the avoidance of doubt, that a credit bid which includes a cash portion sufficient to cause a Discharge of Senior Obligations will not be precluded); provided further, after the expiration of the Standstill Period, so long as neither the Senior Representative nor any of the Senior Secured Parties have commenced any action to enforce their Lien on any material portion of the Collateral and any acceleration of the Second Priority Debt Obligations has not been rescinded, in the event that and for so long as the Second Priority Debt Parties (or the Second Priority Representative on their behalf) have commenced actions to enforce their Lien with respect to all or any material portion of the Collateral to the extent permitted hereunder and are diligently pursuing such actions (it being understood that this proviso shall not constitute a waiver by the Senior Representative or the Senior Secured Parties of the provisions of Article VI), neither the Senior Secured Parties nor the Senior Representative shall take any action of a similar nature with respect to such Collateral so long as the other provisions of this Agreement (including the turnover provisions of Article VI) are complied with; and provided further that (x) the Standstill Period shall be tolled for so long as any automatic stay or any other stay or other order prohibiting the exercise of remedies by the Senior Representative or the Senior Secured Parties with respect to the Collateral is in effect by operation of law or has been entered into by a court of competent jurisdiction and (y) the period set forth in the immediately preceding proviso shall be tolled for so long as any automatic stay or any other stay or other order prohibiting the exercise of remedies by the Second Priority Representative or the Second Priority Secured Parties with respect to the Collateral is in effect by operation of law or has been entered into by a court of competent jurisdiction, and
		

		
			(ii)       except as otherwise provided herein, the Senior Representative and the Senior Secured Parties shall have the exclusive right to enforce rights, exercise remedies (including setoff, recoupment and the right to credit bid their debt, except that the Second Priority Debt Parties shall have the credit bidding rights set forth in Section 3.01(a)(i)(D)) and, in that connection, subject to Section 5.01, to make determinations regarding the release, disposition or restrictions with respect to the Collateral without any consultation with or the consent of any Second Priority Representative or any Second Priority Debt Party; provided,  however, that (A) in any Insolvency or Liquidation Proceeding commenced by or against the Company or any other Grantor, any Second Priority Representative may file a claim, proof of claim, or statement of interest with respect to the Second Priority Debt Obligations under the Second Priority Debt Facility, (B) any Second Priority Representative may take any action (not adverse to the prior Liens on the Collateral securing the Senior Obligations or the rights of the Senior Representative or the Senior Secured Parties to exercise remedies in respect thereof) in order to create, prove, perfect, preserve or protect (but not enforce) its rights in, and perfection and priority of its Lien on, the Collateral, (C) the Second Priority Representative and the Second Priority Debt Parties may exercise their rights and remedies as unsecured creditors to the extent provided in
		

		
			
		

		
			

		 

		

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			Section 5.04, (D) the Second Priority Representative may exercise the rights and remedies provided for in Article VI, (E) in any Insolvency or Liquidation Proceeding, any Second Priority Debt Party may file any necessary or appropriate responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any person objecting to or otherwise seeking the disallowance of the claims or Liens of the Second Priority Debt Parties, including any claims secured by the Collateral, if any, in each case in accordance with the terms of this Agreement, (F) in any Insolvency or Liquidation Proceeding, the Second Priority Debt Parties may vote on any plan of reorganization, but only to the extent consistent with the provisions hereof, and (G) the Second Priority Representative and the Second Priority Debt Parties may exercise any of their rights or remedies with respect to the Collateral after the termination of the Standstill Period to the extent permitted by Section 3.01(a)(i).  In exercising rights and remedies with respect to the Collateral, the Senior Representative and the Senior Secured Parties may enforce the provisions of the Senior Debt Documents and exercise remedies thereunder, all in such order and in such manner as they may determine in the exercise of their sole discretion. Such exercise and enforcement shall include the rights of an agent appointed by them to sell or otherwise dispose of Collateral upon foreclosure, to incur expenses in connection with such sale or disposition and to exercise all the rights and remedies of a secured lender under the Uniform Commercial Code of any applicable jurisdiction and of a secured creditor under Bankruptcy Laws of any applicable jurisdiction.
		

		
			(b)        Until the expiration of the Standstill Period and subject to Sections 4.01 and 4.02, the Second Priority Representative, on behalf of itself and each Second Priority Debt Party under the Second Priority Debt Facility, agrees that it will not, in the context of its role as secured creditor, take or receive any Collateral or any Proceeds of Collateral in connection with the exercise of any right or remedy (including setoff and recoupment) with respect to any Collateral in respect of Second Priority Debt Obligations until after the Discharge of Senior Obligations has occurred, except in connection with any foreclosure expressly permitted by Section 3.01(a)(i), but then only to the extent the Second Priority Representative and Second Priority Debt Parties are permitted to retain the proceeds thereof in accordance with Section 4.01).  Without limiting the generality of the foregoing, unless and until the expiration of the Standstill Period has occurred, except as expressly provided in the proviso in clause (ii) of Section 3.01(a) and Section 6.03, the sole right of the Second Priority Representative and the Second Priority Debt Parties with respect to the Collateral is to hold a Lien on the Collateral in respect of Second Priority Debt Obligations pursuant to the Second Priority Debt Documents for the period and to the extent granted therein and to receive a share of the Proceeds thereof, if any, after the Discharge of Senior Obligations has occurred.
		

		
			(c)        Subject to the proviso in clause (ii) of Section 3.01(a) and Section 6.03, (i) the Second Priority Representative, for itself and on behalf of each Second Priority Debt Party under the Second Priority Debt Facility, agrees that neither such Second Priority Representative nor any such Second Priority Debt Party will take any action that would hinder any exercise of remedies undertaken by the Senior Representative or any Senior Secured Party with respect to the Collateral under the Senior Debt Documents, including any sale, lease, exchange, transfer or other disposition of the Collateral, whether by foreclosure or otherwise, and (ii) the Second Priority Representative, for itself and on behalf of each Second Priority Debt Party under the Second Priority Debt Facility, hereby waives any and all rights it or any such Second Priority Debt Party
		

		
			
		

		
			

		 

		

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			may have as a junior lien creditor or otherwise to object to the manner in which the Senior Representative or the Senior Secured Parties seek to enforce or collect the Senior Obligations or the Liens granted on any of the Collateral, regardless of whether any action or failure to act by or on behalf of the Senior Representative or any other Senior Secured Party is adverse to the interests of the Second Priority Debt Parties.
		

		
			(d)        Until the expiration of the Standstill Period, the Senior Representative shall have the exclusive right to exercise any right or remedy with respect to the Collateral and shall have the exclusive right to determine and direct the time, method and place for exercising such right or remedy or conducting any proceeding with respect thereto. Following the Discharge of Senior Obligations, the Second Priority Representative shall have the exclusive right to exercise any right or remedy with respect to the Collateral, and the Second Priority Representative shall have the exclusive right to direct the time, method and place of exercising or conducting any proceeding for the exercise of any right or remedy available to the Second Priority Debt Parties with respect to the Collateral, or of exercising or directing the exercise of any trust or power conferred on the Second Priority Representative, or for the taking of any other action authorized by the Second Priority Collateral Documents.
		

		
			SECTION 3.02.     Cooperation.  Subject to the proviso in clause (ii) of Section 3.01(a), the Second Priority Representative, on behalf of itself and each Second Priority Debt Party under the Second Priority Debt Facility, agrees that, unless and until the Discharge of Senior Obligations or both the expiration of the Standstill Period (as such Standstill Period may be extended or tolled as expressly provided in this Agreement), and the date, if any, that neither the Senior Representative nor any of the Senior Secured Parties has commenced or, if commenced, is diligently pursuing any action to enforce their Lien on any material portion of the Collateral or exercising any other right or remedy with respect to the Collateral or the Senior Obligations has occurred, it will not commence, or join with any Person (other than the Senior Secured Parties and the Senior Representative upon the request of the Senior Representative) in commencing, any enforcement, collection, execution, levy or foreclosure action or proceeding with respect to any Lien held by it in the Collateral under any of the Second Priority Debt Documents or otherwise in respect of the Second Priority Debt Obligations.
		

		
			SECTION 3.03.    Actions upon Breach.  Should any Second Priority Representative or any Second Priority Debt Party, any Senior Representative or any Senior Secured Party, contrary to this Agreement, in any way take, attempt to take 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 fail to take any action required by this Agreement, the Senior Representative or other Senior Secured Party or the Second Priority Representative or other Second Priority Debt Party, as applicable (in its or their own name or in the name of the Company or any other Grantor), may obtain relief against such Second Priority Representative or such Second Priority Debt Party or such Senior Representative or such Senior Secured Party, as applicable, by injunction, specific performance or other appropriate equitable relief. The Second Priority Representative, on behalf of itself and each Second Priority Debt Party under the Second Priority Debt Facility, and the Senior Representative, on behalf of itself and each Senior Secured Party under the Senior Facility, hereby agrees that the Senior Secured Parties’ damages from the actions of the Second Priority Representative or any Second Priority Debt Party or the Second Priority Debt Parties’ damages from the actions of the Senior Representative or any Senior Secured
		

		
			
		

		
			

		 

		

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			Party, as applicable, may at that time be difficult to ascertain and may be irreparable and waives any defense that the Company, any other Grantor, the Senior Secured Parties or the Second Priority Debt Parties, as applicable, cannot demonstrate damage or be made whole by the awarding of damages.  Each Representative may demand specific performance of this Agreement.  Each Representative, on behalf of itself and on behalf of the Secured Parties of the Debt Facility for which it is acting, hereby irrevocably waive any defense based on the adequacy of a remedy at law and any other defense which might be asserted to bar the remedy of specific performance in any action which may be brought by a Representative or any Secured Party.  No provision of this Agreement shall constitute or be deemed to constitute a waiver by a Representative, on behalf of itself and on behalf of the Secured Parties of the Debt Facility for which it is acting, of any right to seek damages from any Person in connection with any breach or alleged breach of this Agreement.
		

		
			ARTICLE IV

Payments
		

		
			SECTION 4.01.    Application of Proceeds.  Prior to the Discharge of Senior 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:
		

		
			first, to the payment in full in cash of all Senior Obligations that are not Excess Senior Obligations,
		

		
			second, to the payment in full in cash of all Second Priority Debt Obligations,
		

		
			third, to the payment in full in cash of all Excess Senior Obligations, and
		

		
			fourth, to the Company or as otherwise required by applicable law
		

		
			SECTION 4.02.    Payments Over.  Unless and until the Discharge of Senior Obligations has occurred, and subject to the terms of Section 6.10, any Collateral or Proceeds thereof received by any Second Priority Representative or any Second Priority Debt Party in connection with the exercise of any right or remedy (including setoff or recoupment) relating to the Collateral shall be segregated and held in trust for the benefit of and promptly paid over to the Senior Representative for the benefit of the Senior Secured Parties in the same form as received, with any necessary endorsements, or as a court of competent jurisdiction may otherwise direct. The Senior Representative is hereby authorized to make any such endorsements as agent for each of the Second Priority Debt Parties. This authorization is coupled with an interest and is irrevocable.
		

		
			
		

		
			

		 

		

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			ARTICLE V

Other Agreements
		

		
			SECTION 5.01.    Releases.
		

		
			(a)        The Second Priority Representative, for itself and on behalf of each Second Priority Debt Party under the Second Priority Debt Facility, agrees that, in the event of a sale, transfer or other disposition of any specified item of Collateral (including all or substantially all of the equity interests of any subsidiary of the Company) in connection with (i) the exercise of remedies in respect of Collateral or (ii) any sale, transfer or other disposition that is permitted under the Second Priority Debt Documents as in effect on the date hereof or subsequently permitted thereunder, the Liens granted to the Second Priority Representative and the Second Priority Debt Parties upon such Collateral to secure Second Priority Debt Obligations shall terminate and be released, automatically and without any further action, concurrently with the termination and release of all Liens granted upon such Collateral to secure Senior Obligations; provided that the Liens securing the Senior Obligations and the Second Priority Debt Obligations will attach to the Proceeds of the sale on the same basis of priority as the Liens on the Collateral securing the Senior Obligations rank to the Liens on the Collateral securing the Second Priority Debt Obligations pursuant to this Agreement. Upon notice from the Senior Representative to a Second Priority Representative (with respect to any termination and release of Liens pursuant to clause (i) of the preceding sentence) or delivery to a Second Priority Representative of an Officer’s Certificate (with respect to any termination and release of Liens pursuant to clause (ii) of the preceding sentence) stating that any such termination and release of Liens securing the Senior Obligations has become effective (or shall become effective concurrently with such termination and release of the Liens granted to the Second Priority Debt Parties and the Second Priority Representative) and any necessary or proper instruments of termination or release prepared by the Company or any other Grantor, such Second Priority Representative will promptly execute, deliver or acknowledge, at the Company’s or the other Grantor’s sole cost and expense, such termination statements, mortgage releases, instruments and other agreements that the Senior Representative or the Company or such Guarantor may reasonably request to evidence such termination and release of such Liens.  Nothing in this Section 5.01(a) will be deemed to affect any agreement of a Second Priority Representative, for itself and on behalf of the Second Priority Debt Parties under the Second Priority Debt Facility, to release the Liens on the Collateral as set forth in the relevant Second Priority Debt Documents.
		

		
			(b)        Until the Discharge of the Senior Obligations, the Second Priority Representative, for itself and on behalf of each Second Priority Debt Party under the Second Priority Debt Facility, hereby irrevocably constitutes and appoints the Senior Representative and any officer or agent of the Senior Representative, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Second Priority Representative or such Second Priority Debt Party or in the Senior Representative’s own name, from time to time in the Senior Representative’s discretion, for the purpose of carrying out the terms of Section 5.01(a), to take any and all appropriate action and to execute any and all documents and instruments that may be necessary or desirable to accomplish the purposes of Section 5.01(a), including any termination statements, endorsements or other instruments of transfer or release.
		

		
			(c)        Notwithstanding anything to the contrary in any Second Priority Collateral Document, in the event the terms of a Senior Collateral Document and a Second Priority Collateral Document each require any Grantor (i) to make payment in respect of any item of Collateral to, (ii) to deliver or afford control over (to the extent only one party can have control of such Collateral) any item of Collateral to, or deposit any item of Collateral with, (iii) to register
		

		
			

		 

		

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			ownership of any item of Collateral in the name of or make an assignment of ownership of any Collateral or the rights thereunder, and (iv) to hold any item of Collateral in trust for (to the extent such item of Collateral cannot be held in trust for multiple parties under applicable law), in favor of, in any case, both the Senior Representative and any Second Priority Representative or Second Priority Debt Party, such Grantor may, until the Discharge of Senior Obligations has occurred, comply with such requirement under the Second Priority Collateral Document as it relates to such Collateral by taking any of the actions set forth above only with respect to, or in favor of, the Senior Representative.
		

		
			SECTION 5.02.     Insurance and Condemnation Awards.  Unless and until the Discharge of Senior Obligations has occurred, the Senior Representative and the Senior Secured Parties shall have the sole and exclusive right, subject to the rights of the Grantors under the Senior Debt Documents, (a) to adjust settlement for any insurance policy covering the Collateral in the event of any loss thereunder and (b) to approve any award granted in any condemnation or similar proceeding affecting the Collateral. Unless and until the Discharge of Senior Obligations has occurred, all Proceeds of any such policy and any such award, if in respect of the Collateral, shall be applied in accordance with Section 4.01. If any Second Priority Representative or any Second Priority Debt Party shall, at any time, receive any Proceeds of any such insurance policy or any such award in contravention of this Agreement, it shall pay such Proceeds over to the Senior Representative in accordance with the terms of Section 4.02.
		

		
			SECTION 5.03.    Amendments to Senior Collateral Documents and Second Priority Collateral Documents.
		

		
			(a)        No Second Priority Collateral Document with respect to the Collateral may be amended, supplemented or otherwise modified or entered into, or the non-compliance from the terms thereof be consented to or waived, to the extent such amendment, supplement, consent, waiver or modification, or the terms of any new Second Priority Collateral Document, would be prohibited by or inconsistent with any of the terms of this Agreement. The Company agrees to promptly (and in any event within 3 Business Days thereof) deliver to the Senior Representative copies of (i) any amendments, supplements or other modifications to the Second Priority Collateral Documents and (ii) any new Second Priority Collateral Documents promptly after effectiveness thereof. The Second Priority Representative, for itself and on behalf of each Second Priority Debt Party under the Second Priority Debt Facility, agrees that each Second Priority Collateral Document with respect to the Collateral under the Second Priority Debt Facility shall include the following language (or language to similar effect reasonably approved by the Senior Representative):
		

		
			“Notwithstanding anything herein to the contrary, (a) the liens and security interests granted to the Second Priority Representative pursuant to this Agreement are expressly subject and subordinate to the liens and security interests granted in favor of the Senior Secured Parties (as defined in the Intercreditor Agreement referred to below), including liens and security interests granted to Natixis, New York Branch, as administrative agent, pursuant to or in connection with the Credit Agreement, dated as of April 23, 2018 (as amended, restated, supplemented, replaced or otherwise modified from time to time), among the Company, the banks, financial institutions and other lending institutions from time to time parties as lenders
		

		
			
		

		
			

		 

		

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			thereto and Natixis, New York Branch, as administrative agent, and (b) the exercise of any right or remedy by Morgan Stanley Energy Capital Inc., as Second Priority Representative, hereunder is subject to the limitations and provisions of the Intercreditor Agreement dated as of April 23, 2018 (as amended, restated, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”), among Natixis, New York Branch, as Senior Representative, Morgan Stanley Energy Capital Inc., as Second Priority Representative, the Company and its subsidiaries and affiliated entities party thereto. In the event of any conflict between the terms of the Intercreditor Agreement and the terms of this Agreement, the terms of the Intercreditor Agreement shall govern.”
		

		
			(b)        In the event that the Senior Representative or the Senior Secured Parties enter into any amendment, waiver or consent in respect of any of the Senior Collateral Documents for the purpose of adding to or deleting from, or waiving or consenting to any departures from any provisions of, any Senior Collateral Document or changing in any manner the rights of the Senior Representative, the Senior Secured Parties, the Company or any other Grantor thereunder (including the release of any Liens in Collateral), then such amendment, waiver or consent shall apply automatically to any comparable provision of each comparable Second Priority Collateral Document without the consent of any Second Priority Representative or any Second Priority Debt Party and without any action by any Second Priority Representative, the Company or any other Grantor; provided,  however, that (i) no such amendment, waiver or consent shall have the effect of (A) removing assets subject to the Lien of the Second Priority Collateral Documents, except to the extent that a release of such Lien is permitted under Section 5.01(a) and provided that there is a corresponding release of the Lien securing the Senior Obligations, (B) imposing duties on the Second Priority Representative without its consent, (C) altering the terms of the Second Priority Debt Documents to permit other Liens on the Collateral not permitted under the terms of the Second Priority Debt Documents as in effect on the date hereof or Article VI hereof, (D) being prejudicial to the interests of the Second Priority Debt Parties to a greater extent than the Senior Secured Parties (other than by virtue of their relative priority and the rights and obligations hereunder) or (E) otherwise amending or waiving any provision with respect to any right or remedy of the Second Priority Representative or any Second Priority Debt Party as set forth in the Second Priority Debt Documents and (ii) written notice of such amendment, waiver or consent shall have been given by the Company to the Second Priority Representative within ten (10) Business Days after the effectiveness of such amendment, waiver or consent.  The Company agrees to deliver to the Second Priority Representative copies of (1) any amendments, supplements or other modifications to the Senior Collateral Documents with respect to the Collateral and (2) any new Senior Collateral Documents with respect to the Collateral promptly (but in no event more than 3 Business Days) after effectiveness thereof.
		

		
			(c)        The Senior Loan Documents may be amended, supplemented or otherwise modified and any non-compliance with their terms consented to or waived in accordance with their terms and the Senior Credit Agreement may be Refinanced, in each case, without notice to, or the consent of the Second Priority Representative or the Second Priority Debt Parties, all without affecting the Lien subordination or other provisions of this Agreement; provided that the holders of such Refinancing debt bind themselves in a writing addressed to the Second Priority Representative and the Second Priority Debt Parties to the terms of this Agreement and any such
		

		
			
		

		
			

		 

		

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			amendment, supplement, modification, consent, waiver or Refinancing shall not, without the consent of the Second Priority Representative:
		

		
			(i)         increase (A) the “Applicable Margin” or similar component of the interest rate or yield provisions applicable to the Senior Debt Facility, or a letter of credit, commitment, facility, utilization, upfront, original issue discount or similar fee so that the combined interest rate and fees are increased by more than 2.00% per annum in the aggregate at any level of pricing, but excluding increases resulting from (x) application of the pricing grid set forth in the Senior Credit Agreement as in effect on the date hereof or (y) the accrual of interest at the default rate, or (B) the default rate of interest (including by changing the conditions to the application thereof);
		

		
			(ii)       modify a covenant or event of default that directly restricts one or more Grantors from making payments under the Second Priority Loan Documents that would otherwise not be prohibited under the Senior Loan Documents as in effect on the date hereof;
		

		
			(iii)      subordinate any Lien on any of the Collateral securing the Senior Obligations or subordinate in right of payment any of the Senior Obligations; or
		

		
			(iv)       extend the maturity of the Senior Obligations beyond the maturity of the Second Priority Debt Obligations.
		

		
			(d)        The Second Priority Debt Documents may be amended, supplemented, waived or otherwise modified in accordance with their terms and the Second Priority Credit Agreement may be Refinanced, in each case, without notice to, or the consent of the Senior Representative or the Senior Secured Parties, all without affecting the Lien subordination or other provisions of this Agreement; provided that the holders of such Refinancing debt bind themselves in a writing addressed to the Senior Representative and the Senior Secured Parties to the terms of this Agreement and any such amendment, supplement, modification, waiver or Refinancing shall not, without the consent of the Senior Representative:
		

		
			(i)         increase (A) the “Applicable Margin” or similar component of the interest rate or yield provisions, or any commitment, facility, utilization, upfront, original issue discount or similar fee applicable to the Second Priority Debt Facility so that  the combined interest rate and fees are increased by more than 2.00% per annum in the aggregate thereunder (excluding increases resulting from the accrual of interest at the default rate), or (B) the default rate of interest (including by changing the conditions to the application thereof);
		

		
			(ii)       result in the aggregate outstanding principal amount (including reimbursement obligations) of loans under the Second Priority Debt Documents to exceed $250,000,000 plus interest (including interest accruing, including at any post-default rate, during the pendency of an Insolvency or Liquidation Proceeding, regardless of whether allowed or allowable in such Insolvency or Liquidation Proceeding), premium (if any), make-whole obligations, fees, indemnifications, reimbursements, expenses and other liabilities payable under the Second Priority Debt Documents or any Refinancing thereof;
		

		
			
		

		
			

		 

		

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			(iii)      change to earlier dates any scheduled dates for payment of principal or of interest on the Second Priority Debt Obligations, or change the redemption, prepayment, repurchase, tender or defeasance provisions set forth in the Second Priority Debt Documents in a manner that would require a redemption, prepayment, repurchase, tender or defeasance not required pursuant to the terms of the Second Priority Debt Documents as of the date hereof (including any increases to the prepayment premiums required in connection therewith); or
		

		
			(iv)       modifies covenants, defaults, or events of default to make them materially more restrictive than in existence on the date hereof as to any Grantor.
		

		
			SECTION 5.04.     Rights as Unsecured Creditors. Notwithstanding anything to the contrary in this Agreement, during an Event of Default (as defined under the Second Priority Debt Documents), the Second Priority Representative and the Second Priority Debt Parties may exercise rights and remedies as unsecured creditors against the Company and any other Grantor in accordance with the terms of the Second Priority Debt Documents and applicable law (other than initiating or joining any involuntary case or proceeding under the Bankruptcy Code not initiated by the Senior Representative) so long as such rights and remedies do not violate any express provision of this Agreement. Nothing in this Agreement shall prohibit the receipt by any Second Priority Representative or any Second Priority Debt Party of the required payments of principal, premium, interest, fees and other amounts due under the Second Priority Debt Documents so long as such receipt is not the direct or indirect result of the exercise by a Second Priority Representative or any Second Priority Debt Party of rights or remedies as a secured creditor in respect of Collateral. In the event any Second Priority Representative or any Second Priority Debt Party becomes a judgment lien creditor in respect of Collateral as a result of its enforcement of its rights as an unsecured creditor in respect of Second Priority Debt Obligations, such judgment lien shall be subordinated to the Liens securing Senior Obligations on the same basis as the other Liens securing the Second Priority Debt Obligations are so subordinated to such Liens securing Senior Obligations under this Agreement.
		

		
			SECTION 5.05.    Gratuitous Bailee for Perfection.
		

		
			(a)        The Senior Representative acknowledges and agrees that if it shall at any time hold a Lien securing any Senior Obligations 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 Senior Representative, or of agents or bailees of such Person (such Collateral being referred to herein as the “Pledged or Controlled Collateral”), or if it shall any time obtain any landlord waiver or bailee’s letter or any similar agreement or arrangement granting it rights or access to Collateral, the Senior Representative shall also hold such Pledged or Controlled Collateral, or take such actions with respect to such landlord waiver, bailee’s letter or similar agreement or arrangement, as sub-agent or gratuitous bailee for the relevant Second Priority Representative, in each case solely for the purpose of perfecting the Liens granted under the relevant Second Priority Collateral Documents and subject to the terms and conditions of this Section 5.05.
		

		
			
		

		
			

		 

		

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			(b)        The rights of the Second Priority Representative and the Second Priority Debt Parties with respect to the Pledged or Controlled Collateral shall at all times be subject to the terms of this Agreement.
		

		
			(c)        The Senior Representative and the Senior Secured Parties shall have no obligation whatsoever to the Second Priority Representative or any Second Priority Debt Party to assure that any of the Pledged or Controlled Collateral is genuine or owned by the Grantors or to protect or preserve rights or benefits of any Person or any rights pertaining to the Collateral, except as expressly set forth in this Section 5.05.  The duties or responsibilities of the Senior Representative under this Section 5.05 shall be limited solely to holding or controlling the Collateral and the related Liens referred to in paragraphs (a) and (b) of this Section 5.05 as sub-agent and gratuitous bailee for the relevant Second Priority Representative for purposes of perfecting the Lien held by such Second Priority Representative.
		

		
			(d)        The Senior Representative shall not have by reason of the Second Priority Collateral Documents or this Agreement, or any other document, a fiduciary relationship in respect of any Second Priority Representative or any Second Priority Debt Party, and the Second Priority Representative, for itself and on behalf of each Second Priority Debt Party under the Second Priority Debt Facility, hereby waives and releases the Senior Representative and the Senior Secured Parties from all claims and liabilities arising pursuant to the Senior Representative’s roles under this Section 5.05 as sub-agent and gratuitous bailee with respect to the Collateral.
		

		
			(e)        Following the Discharge of Senior Obligations, the Senior Representative shall, at the Grantors’ sole cost and expense, upon request (i) (A) deliver to the Second Priority Representative, to the extent that it is legally permitted to do so, all Collateral, including all Proceeds thereof, held or controlled by the Senior Representative or any of its agents or bailees, including the transfer of possession and control, as applicable, of the Pledged or Controlled Collateral, together with any necessary endorsements and notices to depositary banks, securities intermediaries and commodities intermediaries, and assign its rights under any landlord waiver or bailee’s letter or any similar agreement or arrangement granting it rights or access to Collateral, or (B) direct and deliver such Collateral as a court of competent jurisdiction may otherwise direct, (ii) notify any applicable insurance carrier that it is no longer entitled to be a loss payee or additional insured under the insurance policies of any Grantor issued by such insurance carrier and (iii) notify any governmental authority involved in any condemnation or similar proceeding involving any Grantor that the Second Priority Representative is entitled to approve any awards granted in such proceeding. The Company and the other Grantors shall take such further action at their expense as is required to effectuate the transfer contemplated hereby and shall indemnify the Senior Representative for loss or damage suffered by the Senior Representative as a result of such transfer, except for loss or damage suffered by any such Person as a result of its own willful misconduct, gross negligence or bad faith.  The Senior Representative has no obligations to follow instructions from any Second Priority Representative or any other Second Priority Debt Party in contravention of this Agreement.
		

		
			(f)        Neither the Senior Representative nor any of the other Senior Secured Parties shall be required to marshal any present or future collateral security for any obligations of the Company or any Grantor to the Senior Representative or any Senior Secured Party under the Senior Debt Documents or any assurance of payment in respect thereof, or to resort to such
		

		
			
		

		
			

		 

		

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			collateral security or other assurances of payment in any particular order, and all of their rights in respect of such collateral security or any assurance of payment in respect thereof shall be cumulative and in addition to all other rights, however existing or arising.
		

		
			SECTION 5.06.    When Discharge of Senior Obligations Deemed To Not Have  Occurred.  If, at any time after the Discharge of Senior Obligations has occurred, the Company or any Subsidiary substantially concurrently enters into any Refinancing of any Senior Obligations (other than in respect of the payment of indemnities surviving the Discharge of Senior Obligations), then such Discharge of Senior Obligations shall automatically be deemed not to have occurred for all purposes of this Agreement (other than with respect to any actions taken prior to the date of such designation as a result of the occurrence of such first Discharge of Senior Obligations) and, from and after the date on which the New Senior Debt Notice is delivered to the Second Priority Representative in accordance with the next sentence, the obligations under such Refinancing of the Senior Loan Documents shall automatically be treated as Senior Obligations for all purposes of this Agreement, the applicable agreement governing such Senior Obligations shall automatically be treated as a Senior Debt Document for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Collateral set forth herein and the agent, representative or trustee for the holders of such Senior Obligations shall be the Senior Representative for all purposes of this Agreement. Upon receipt of notice (the “New Senior Debt Notice”) of such incurrence (including the identity of the new Senior Representative), the Second Priority Representative (including the Second Priority Representative) shall promptly upon request (a) enter into such documents and agreements (at the expense of the Company), including amendments or supplements to this Agreement, as the Company or such new Senior Representative shall reasonably request in writing in order to provide the new Senior Representative the rights of the Senior Representative contemplated hereby, in each case consistent in all material respects with the terms of this Agreement, (b) deliver to the Senior Representative, to the extent that it is legally permitted to do so, all Collateral, including all Proceeds thereof, held or controlled by such Second Priority Representative or any of its agents or bailees, including the transfer of possession and control, as applicable, of the Pledged or Controlled Collateral, together with any necessary endorsements and notices to depositary banks, securities intermediaries and commodities intermediaries, and agree to amendments to any landlord waiver or bailee’s letter or any similar agreement or arrangement granting it rights or access to Collateral, (c) notify any applicable insurance carrier that it is no longer entitled to be a sole loss payee or additional insured under the insurance policies of any Grantor issued by such insurance carrier and (d) notify any governmental authority involved in any condemnation or similar proceeding involving a Grantor that the new Senior Representative is entitled to approve any awards granted in such proceeding. The new Senior Representative shall agree in writing addressed to the Second Priority Representative and the Second Priority Debt Parties to be bound by the terms of this Agreement.
		

		
			SECTION 5.07.    Option to Repurchase.
		

		
			(a)        Without prejudice to the enforcement of the Senior Secured Parties’ remedies, the Senior Secured Parties agree at any time following (i) an acceleration of the Senior Obligations in accordance with the terms of the Senior Credit Agreement, (ii) the commencement of an Insolvency or Liquidation Proceeding involving the Company as debtor  or (iii) the occurrence of any “event of default” (as defined in the Senior Debt Documents) or the occurrence of any “default” (as defined in the Senior Debt Documents) based on the non-payment of principal
		

		
			
		

		
			

		 

		

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			or interest under any Senior Debt Document (and such payment default shall continue unremedied for a period of 5 Business Days, the Senior Secured Parties will be deemed to have automatically offered the Second Priority Debt Parties the option to purchase (the “Purchase”) at par/face amount the entire aggregate amount of outstanding Senior Obligations (which includes principal, interest, fees, breakage costs, attorneys’ fees and expenses, and, in the case of any Swap Agreements, on a per Secured Swap Provider basis, unless the parties to any such Swap Agreement have agreed to other satisfactory arrangements with respect thereto, the positive amount that is payable by the Company or relevant Guarantor thereunder reflecting any unpaid amount then due or amount owing in connection with the termination (or early termination) on or prior to the date of the Purchase after giving effect to offset and netting arrangements in respect of such Secured Swap Provider, but which excludes any rights of the Senior Secured Parties with respect to indemnification and other obligations of the Company and Guarantors under the Senior Debt Documents that are expressly stated to survive the termination of the Senior Debt Documents).  For avoidance of doubt, Senior Obligations not purchased will continue to constitute Senior Obligations hereunder and shall be secured in the same manner and subject to the same protections hereunder as existed immediately prior to the Purchase.  The Purchase shall be made without warranty or representation or recourse, on a pro rata basis across Senior Secured Parties.
		

		
			(b)        In connection with the exercise of such option, the purchasing Second Priority Debt Parties shall furnish cash collateral to any relevant Senior Secured Party as it reasonably deems necessary to secure any such Senior Secured Party’s outstanding Letters of Credit (not to exceed 105% of the face amount of the aggregate undrawn face amount of such Letters of Credit).
		

		
			(c)        The Second Priority Debt Parties shall irrevocably accept or reject such offer within thirty (30) calendar days following receipt of written notice from the Senior Representative that any of the events described in Sections 5.07(a)(i) through (iii), as applicable, has occurred, and the parties shall endeavor to close promptly thereafter, but in no event later than sixty (60) calendar days after receipt of such written notice.  If the Second Priority Debt Parties accept such offer, it shall be exercised pursuant to documentation mutually acceptable to the Senior Representative and the Second Priority Representative.  If the Second Priority Debt Parties reject such offer (or do not so irrevocably accept such offer within the required timeframe), the Senior Secured Parties shall have no further obligations pursuant to this Section 5.07 and may take any further actions in their sole discretion in accordance with the Senior Debt Documents and this Agreement.
		

		
			(d)        Such purchase of the Senior Obligations shall be made on a pro rata basis among the Second Priority Debt Parties giving notice to the Second Priority Representative of their interest to exercise the purchase option hereunder according to each such Second Priority Debt Party’s portion of the principal amount of the loans under the Second Priority Credit Agreement outstanding on the date of purchase (as ratably adjusted in case less than all Second Priority Debt Parties elect to participate in such purchase).
		

		
			SECTION 5.08.     Role of Senior Representative.  Upon an event of default under any Senior Debt Document and receipt of Collateral or Proceeds thereof in connection with the sale or other disposition of, or collection on, such Collateral upon the exercise of remedies by the Senior Secured Parties in an amount equal to the Senior Obligations (other than any Excess Senior
		

		
			
		

		
			

		 

		

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			Obligations), the Second Priority Representative shall assume the roles hereunder of the Senior Representative and all receipts of Collateral or Proceeds shall thereafter be applied to the Second Priority Debt up to an amount equal to the Second Priority Debt Obligations at which time the Senior Representative shall reassume such roles until the amount of Secured Obligations in excess of the Cap Amount is paid in full.
		

		
			ARTICLE VI

Insolvency or Liquidation Proceedings.
		

		
			SECTION 6.01.    Financing Issues.  Until the Discharge of Senior Obligations has occurred, if the Company or any other Grantor shall be subject to any Insolvency or Liquidation Proceeding and the Senior Representative or any Senior Secured Party shall desire to consent (or not object) to the sale, use or lease of cash collateral or to consent (or not object) to the Company’s or any other Grantor’s obtaining financing under Section 363 or Section 364 of The Bankruptcy Code or any similar provision of any other Bankruptcy Law (“DIP Financing”), then the Second Priority Representative, for itself and on behalf of each Second Priority Debt Party under the Second Priority Debt Facility, agrees that (except to the extent permitted by this Section 6.01 and so long as such  DIP Financing is in an amount that does not exceed the greater of (A) $20,000,000 and (B) 20% of the aggregate principal amount of Loans and drawn Letters of Credit and the face amount of undrawn Letters of Credit outstanding under the Senior Credit Agreement on the date of the commencement of such Insolvency or Liquidation Proceeding but excluding any Excess Senior Obligations (the “DIP Cap”)), it will raise no: (a) objection to and will not otherwise contest such sale, use or lease of such cash collateral or such DIP Financing and, except to the extent permitted by the proviso in clause (ii) of Section 3.01(a), this Section 6.01, and Section 6.03, will not request adequate protection or any other relief in connection therewith and, to the extent the Liens securing any Senior Obligations are subordinated or pari passu with such DIP Financing, will subordinate (and will be deemed hereunder to have subordinated) its Liens in the Collateral to (i) such DIP Financing (and all obligations relating thereto) on the same basis as the Liens securing the Second Priority Debt Obligations are so subordinated to Liens securing Senior Obligations under this Agreement, (ii) any adequate protection Liens provided to the Senior Secured Parties, and (iii) to any “carve-out” for professional and United States Trustee fees agreed to by the Senior Representative; (b) objection to (and will not otherwise contest) any motion for relief from the automatic stay or from any injunction against foreclosure or enforcement in respect of Senior Obligations and the Collateral made by the Senior Representative or any other Senior Secured Party; (c) objection to (and will not otherwise contest) any lawful exercise by any Senior Secured Party of the right to credit bid Senior Obligations at any sale in foreclosure of Collateral or to exercise any rights under Section 1111(b) of the Bankruptcy Code with respect to the Collateral; (d) objection to (and will not otherwise contest) any other request for judicial relief made in any court by any Senior Secured Party relating to the lawful enforcement of any Lien on Collateral; or (e) objection to (and will not otherwise contest or oppose) any order relating to a sale or other disposition of any of the Collateral for which the Senior Representative has consented that provides, to the extent such sale or other disposition is to be free and clear of Liens, (i) that the Liens securing the Senior Obligations and the Second Priority Debt Obligations will attach to the Proceeds of the sale on the same basis of priority as the Liens on the Collateral securing the Senior Obligations rank to the Liens on the Collateral securing the Second Priority Debt Obligations pursuant to this Agreement, (ii) that Proceeds of such sale shall be applied to reduce the Senior
		

		
			
		

		
			

		 

		

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			Obligations, and (iii) Second Priority Debt Parties will not have been deemed to have waived the right to bid in cash in connection with the sale; notwithstanding the foregoing, the Second Priority Debt Parties may assert any objection to a sale or disposition of any Collateral that is inconsistent with the respective rights and obligations of the Senior Secured Parties and the Second Priority Debt Parties under this Agreement (without limiting the foregoing, Second Priority Debt Parties may not raise any objections based on rights afforded by Sections 363(e), (f) and (k) of the Bankruptcy Code to secured creditors or any comparable provision of any other Bankruptcy Law); provided that the foregoing shall not prevent the Second Priority Debt Parties from objecting to any DIP Financing relating to any provision or content of a plan of reorganization. The Second Priority Representative, for itself and on behalf of each Second Priority Debt Party under the Second Priority Debt Facility, agrees that notice from the Company received two (2) Business Days prior to the entry of an order approving such usage of cash collateral or approving such DIP Financing shall be adequate notice.
		

		
			SECTION 6.02.     Relief from the Automatic Stay.  Until the Discharge of Senior Obligations has occurred, the Second Priority Representative, for itself and on behalf of each Second Priority Debt Party under the Second Priority Debt Facility, agrees that none of them shall seek relief from the automatic stay or any other stay in any Insolvency or Liquidation Proceeding or take any action in derogation thereof, in each case in respect of any Collateral, without the prior written consent of the Senior Representative.
		

		
			SECTION 6.03.    Adequate Protection.  The Second Priority Representative, for itself and on behalf of each Second Priority Debt Party under the Second Priority Debt Facility, agrees that none of them shall (a) object, contest or support any other Person objecting to or contesting (i) any request by the Senior Representative or any Senior Secured Parties for adequate protection, (ii) any objection by the Senior Representative or any Senior Secured Parties to any motion, relief, action or proceeding based on the Senior Representative’s or Senior Secured Party’s claiming a lack of adequate protection or (iii) the payment of interest, fees, expenses or other amounts of the Senior Representative or any other Senior Secured Party under Section 506(b) of the Bankruptcy Code or any similar provision of any other Bankruptcy Law, (b) assert or support any claim for costs or expenses of preserving or disposing of any Collateral under Section 506(c) of the Bankruptcy Code or any similar provision of any other Bankruptcy Law, or (c) request adequate protection or any other relief in connection with such use of cash collateral except as expressly provided herein. Notwithstanding anything contained in this Section 6.03 or in Section 6.01, in any Insolvency or Liquidation Proceeding, (1) if the Senior Secured Parties (or any subset thereof) are granted adequate protection in the form of additional collateral or superpriority claims in connection with any DIP Financing or use of cash collateral under Section 363 or 364 of the Bankruptcy Code or any similar provision of any other Bankruptcy Law, then the Second Priority Representative, for itself and on behalf of each Second Priority Debt Party under the Second Priority Debt Facility, may seek or request adequate protection in the form of a replacement Lien on such additional collateral or superpriority claim, which Lien or superpriority claim is subordinated to the Liens securing all Senior Obligations and such DIP Financing (and all obligations relating thereto) on the same basis as the other Liens securing the Second Priority Debt Obligations are so subordinated to the Liens securing Senior Obligations under this Agreement and (2) in the event any Second Priority Representative, for itself and on behalf of the Second Priority Debt Parties under the Second Priority Debt Facility, seek or request adequate protection and such adequate protection is granted in the form of additional collateral or superpriority claims
		

		
			
		

		
			

		 

		

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			(in each instance, to the extent such grant is otherwise permissible under the terms and conditions of this Agreement), then such Second Priority Representative, for itself and on behalf of each Second Priority Debt Party under the Second Priority Debt Facility, agree that the Senior Representative shall also be granted (as applicable) a senior superpriority claim or senior Lien on such additional collateral as security for the Senior Obligations, and that any Lien on such additional collateral securing the Second Priority Debt Obligations or superpriority claim granted to the Second Priority Debt Parties shall be subordinated to the Liens on such collateral securing the Senior Obligations and any such DIP Financing (and all obligations relating thereto) and any other Liens granted to the Senior Secured Parties, or the superpriority claim granted to the Senior Secured Parties, as adequate protection on the same basis as the other Liens securing the Second Priority Debt Obligations are so subordinated to such Liens securing Senior Obligations under this Agreement. Notwithstanding anything contained in this Section 6.03 or in Section 6.01, in any Insolvency or Liquidation Proceeding, to the extent that the Senior Secured Parties are granted adequate protection in the form of payments in the amount of current incurred fees and expenses and/or other cash payments, or otherwise with the consent of the Senior Representative, then the Second Priority Representative and the Second Priority Debt Parties may seek adequate protection in the form of payments in the amount of current incurred reasonable fees and expenses and/or other cash payments (as applicable), subject to the right of any of the Senior Secured Parties to object to the reasonableness of the amounts of fees and expenses or other cash payments so sought by the Second Priority Debt Parties. In addition, to the extent the Senior Secured Parties are awarded or otherwise granted an allowed claim in any Insolvency or Liquidation Proceeding with respect to post-petition interest, nothing herein shall prevent the Second Priority Debt Parties from seeking or otherwise asserting a claim for post-petition interest to the extent of the value of the Lien of the Second Priority Debt Parties on the Collateral (after taking into account the Senior Obligations).
		

		
			SECTION 6.04.     Preference Issues.  If any Senior Secured Party is required in any Insolvency or Liquidation Proceeding or otherwise to disgorge, turn over or otherwise pay any amount to the estate of the Company or any other Grantor (or any trustee, receiver or similar Person therefor), because the payment of such amount was declared to be fraudulent or preferential in any respect or for any other reason, any amount (a “Recovery”), whether received as proceeds of security, enforcement of any right of setoff or otherwise, then the Senior Obligations shall be reinstated to the extent of such Recovery and deemed to be outstanding as if such payment had not occurred and the Senior Secured Parties shall be entitled to the benefits of this Agreement until a Discharge of Senior Obligations with respect to all such recovered amounts. If this Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto. The Second Priority Representative, for itself and on behalf of each Second Priority Debt Party under the Second Priority Debt Facility, hereby agrees that none of them shall be entitled to benefit from any avoidance action affecting or otherwise relating to any distribution or allocation made in accordance with this Agreement, whether by preference or otherwise, it being understood and agreed that the benefit of such avoidance action otherwise allocable to them shall instead be allocated and turned over for application in accordance with the priorities set forth in this Agreement.
		

		
			SECTION 6.05.    Separate Grants of Security and Separate Classifications.  The Second Priority Representative, for itself and on behalf of each Second Priority Debt Party under
		

		
			
		

		
			

		 

		

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			the Second Priority Debt Facility, acknowledges and agrees that (a) the grants of Liens pursuant to the Senior Collateral Documents and the Second Priority Collateral Documents constitute separate and distinct grants of Liens and (b) because of, among other things, their differing rights in the Collateral, the Second Priority Debt Obligations are fundamentally different from the Senior Obligations and must be separately classified in any plan of reorganization proposed or adopted in an Insolvency or Liquidation Proceeding. To further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that any claims of the Senior Secured Parties and the Second Priority Debt Parties in respect of the Collateral constitute a single class of claims (rather than separate classes of senior and junior secured claims), then the Second Priority Representative, for itself and on behalf of each Second Priority Debt Party under the Second Priority Debt Facility, hereby acknowledges and agrees that all distributions shall be made as if there were separate classes of senior and junior secured claims against the Grantors in respect of the Collateral (with the effect being that, to the extent that the aggregate value of the Collateral is sufficient (for this purpose ignoring all claims held by the Second Priority Debt Parties), the Senior Secured Parties shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of post-petition interest (whether or not allowed or allowable) before any distribution is made from the Collateral in respect of the Second Priority Debt Obligations, with the Second Priority Representative, for itself and on behalf of each Second Priority Debt Party under the Second Priority Debt Facility, hereby acknowledging and agreeing to turn over to the Senior Representative amounts otherwise received or receivable by them from the Collateral to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the claim or recovery of the Second Priority Debt Parties.
		

		
			SECTION 6.06.    No Waivers of Rights of Senior Secured Parties.  Nothing contained herein shall, except as expressly provided herein, prohibit or in any way limit the Senior Representative or any other Senior Secured Party from objecting in any Insolvency or Liquidation Proceeding or otherwise to any action taken by any Second Priority Debt Party, including the seeking by any Second Priority Debt Party of adequate protection or the asserting by any Second Priority Debt Party of any of its rights and remedies under the Second Priority Debt Documents or otherwise.
		

		
			SECTION 6.07.     Application.  This Agreement, which the parties hereto expressly acknowledge is a “subordination agreement” under Section 510(a) of the Bankruptcy Code or any similar provision of any other Bankruptcy Law, shall be effective before, during and after the commencement of any Insolvency or Liquidation Proceeding. The relative rights as to the Collateral and Proceeds thereof shall continue after the commencement of any Insolvency or Liquidation Proceeding on the same basis as prior to the date of the petition therefor, subject to any court order approving the financing of, or use of cash collateral by, any Grantor. All references herein to any Grantor shall include such Grantor as a debtor-in-possession and any receiver or trustee for such Grantor.
		

		
			SECTION 6.08.    Other Matters.  To the extent that any Second Priority Representative or any Second Priority Debt Party has or acquires rights under Section 363 or Section 364 of the Bankruptcy Code or any similar provision of any other Bankruptcy Law with respect to any of the Collateral, such Second Priority Representative, on behalf of itself and each Second Priority Debt Party under the Second Priority Debt Facility, agrees not to assert any such
		

		
			
		

		
			

		 

		

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			rights except as otherwise permitted herein without the prior written consent of the Senior Representative, provided that if requested by the Senior Representative, such Second Priority Representative shall timely exercise such rights in the manner requested by the Senior Representative, including any rights to payments in respect of such rights.
		

		
			SECTION 6.09.    506(c) Claims.  Until the Discharge of Senior Obligations has occurred, the Second Priority Representative, on behalf of itself and each Second Priority Debt Party under the Second Priority Debt Facility, agrees that it will not assert or enforce any claim under Section 506(c) of the Bankruptcy Code or any similar provision of any other Bankruptcy Law senior to or on a parity with the Liens securing the Senior Obligations for costs or expenses of preserving or disposing of any Collateral.
		

		
			SECTION 6.10.    Reorganization Securities.  If, in any Insolvency or Liquidation Proceeding, debt obligations of the reorganized debtor secured by Liens upon any property of the reorganized debtor are distributed, pursuant to a plan of reorganization or similar dispositive restructuring plan, on account of both the Senior Obligations and the Second Priority Debt Obligations, then, to the extent the debt obligations distributed on account of the Senior Obligations and on account of the Second Priority Debt Obligations are secured by Liens upon the same assets or property, the provisions of this Agreement will survive the distribution of such debt obligations pursuant to such plan and will apply with like effect to the Liens securing such debt obligations.
		

		
			ARTICLE VII

Reliance; Etc.
		

		
			SECTION 7.01.    Reliance.  The consent by the Senior Secured Parties to the execution and delivery of the Second Priority Debt Documents to which the Senior Secured Parties have consented and all loans and other extensions of credit made or deemed made on and after the date hereof by the Senior Secured Parties to the Company or any Subsidiary shall be deemed to have been given and made in reliance upon this Agreement. All loans and other extensions of credit made or deemed made on and after the date hereof by the Second Priority Debt Parties to the Company or any Grantor shall be deemed to have been given and made in reliance upon this Agreement. The Second Priority Representative, on behalf of itself and each Second Priority Debt Party under the Second Priority Debt Facility, acknowledges that it and such Second Priority Debt Parties have, independently and without reliance on the Senior Representative or other Senior Secured Party, and based on documents and information deemed by them appropriate, made their own credit analysis and decision to enter into the Second Priority Debt Documents to which they are party or by which they are bound, this Agreement and the transactions contemplated hereby and thereby, and they will continue to make their own credit decisions in taking or not taking any action under the Second Priority Debt Documents or this Agreement. The Senior Representative, on behalf of itself and each Senior Secured Party under the Senior Facility, acknowledges that it and such Senior Secured Parties have, independently and without reliance on the Second Priority Representative or other Second Priority Debt Party, and based on documents and information deemed by them appropriate, made their own credit analysis and decision to enter into the Senior Debt Documents to which they are party or by which they are bound, this Agreement and the
		

		
			
		

		
			

		 

		

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			transactions contemplated hereby and thereby, and they will continue to make their own credit decisions in taking or not taking any action under the Senior Debt Documents or this Agreement.
		

		
			SECTION 7.02.    No Warranties or Liability.  The Second Priority Representative, on behalf of itself and each Second Priority Debt Party under the Second Priority Debt Facility, acknowledges and agrees that neither the Senior Representative nor any other Senior 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 Senior Debt Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon. The Senior Representative, on behalf of itself and each Senior Secured Party under the Senior Debt Facility, acknowledges and agrees that neither the Second Priority Representative nor any other Second Priority Debt 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 Priority Debt Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon (except that it has agreed that the Liens of the Second Priority Representative on behalf of the Second Priority Debt Parties are subordinated to the Liens of the Senior Representative on behalf of the Senior Secured Parties). The Senior Secured Parties will be entitled to manage and supervise their respective loans and extensions of credit under the Senior Debt Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate, and the Senior Secured Parties may manage their loans and extensions of credit without regard to any rights or interests that the Second Priority Representative and the Second Priority Debt Parties have in the Collateral or otherwise, except as otherwise provided in this Agreement. The Second Priority Debt Parties will be entitled to manage and supervise their respective loans and extensions of credit under the Second Priority Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate, and the Second Priority Debt Parties may manage their loans and extensions of credit without regard to any rights or interests that the Senior Representative and the Senior Secured Parties have in the Collateral or otherwise, except as otherwise provided in this Agreement. Neither the Senior Representative nor any other Senior Secured Party shall have any duty to any Second Priority Representative or Second Priority Debt Party to act or refrain from acting in a manner that allows, or results in, the occurrence or continuance of an event of default or default under any agreement with the Company or any Grantor (including the Second Priority Debt Documents), regardless of any knowledge thereof that they may have or be charged with. Except as permitted in this Agreement, neither the Second Priority Representative nor any other Second Priority Debt Party shall have any duty to any Senior Representative or Senior Secured Party to act or refrain from acting in a manner that allows, or results in, the occurrence or continuance of an event of default or default under any agreement with the Company or any Subsidiary (including the Senior Debt Documents), regardless of any knowledge thereof that they may have or be charged with. Except as expressly set forth in this Agreement, the Senior Representative, the Senior Secured Parties, the Second Priority Representative and the Second Priority Debt Parties have not otherwise made to each other, nor do they hereby make to each other, any warranties, express or implied, nor do they assume any liability to each other with respect to (a) the enforceability, validity, value or collectability of any of the Senior Obligations, the Second Priority Debt Obligations or any guarantee or security which may have been granted to any of them in connection therewith, (b) any Grantor’s title to or right to transfer any of the Collateral or (c) any other matter except as expressly set forth in this Agreement.
		

		
			
		

		
			

		 

		

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			SECTION 7.03.    Obligations Unconditional. All rights, interests, agreements and obligations of the Senior Representative, the Senior Secured Parties, the Second Priority Representative and the Second Priority Debt Parties hereunder shall remain in full force and effect irrespective of:
		

		
			(a)        any lack of validity or enforceability of any Senior Debt Document or any Second Priority Debt Document;
		

		
			(b)        any change in the time, manner or place of payment of, or in any other terms of, all or any of the Senior Obligations or Second Priority Debt Obligations, or any amendment or waiver or other modification, including any increase in the amount thereof, whether by course of conduct or otherwise, of the terms of the Senior Credit Agreement or any other Senior Debt Document or of the terms of any Second Priority Debt Document;
		

		
			(c)        any exchange of any security interest in any Collateral or any other collateral or any amendment, waiver or other modification, whether in writing or by course of conduct or otherwise, of all or any of the Senior Obligations or Second Priority Debt Obligations or any guarantee thereof;
		

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

		
			(e)        any other circumstances that otherwise might constitute a defense available to, or a discharge of, (i) the Company or any other Grantor in respect of the Senior Obligations or the Second Priority Obligations, (ii) any Senior Representative or Senior Secured Party in respect of this Agreement, or (iii) any Second Priority Representative or Second Priority Debt Party in respect of this Agreement.
		

		
			ARTICLE VIII

Miscellaneous
		

		
			SECTION 8.01.     Conflicts.  In the event of any conflict between the provisions of this Agreement and the provisions of any Senior Debt Document or any Second Priority Debt Document, the provisions of this Agreement shall govern.
		

		
			SECTION 8.02.    Continuing Nature of this Agreement; Severability.  Subject to Section 6.04, this Agreement shall continue to be effective until the Discharge of Senior Obligations shall have occurred. This is a continuing agreement of Lien subordination, and the Senior Secured Parties may continue, at any time and without notice to the Second Priority Representative or any Second Priority Debt Party, to extend credit and other financial accommodations and lend monies to or for the benefit of the Company or any Subsidiary constituting Senior Obligations in reliance hereon. The terms of this Agreement shall survive and continue in full force and effect in any Insolvency or Liquidation Proceeding. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with
		

		
			
		

		
			

		 

		

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			valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
		

		
			SECTION 8.03.    Amendments; Waivers.
		

		
			(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 8.03, 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)        This Agreement may be amended, supplemented or waived in writing signed by each Representative (in each case, acting in accordance with the documents governing the applicable Debt Facility); provided that any such amendment, supplement or waiver which by the terms of this Agreement expressly requires the Company’s consent or which increases the obligations or reduces the rights of the Company or any Grantor, shall require the consent of the Company. Any such amendment, supplement or waiver shall be in writing and shall be binding upon the Senior Secured Parties and the Second Priority Debt Parties and their respective successors and assigns.
		

		
			SECTION 8.04.   Information Concerning Financial Condition of the Company and the Subsidiaries.  The Senior Representative, the Senior Secured Parties, the Second Priority Representative and the Second Priority Debt Parties shall each be responsible for keeping themselves informed of (a) the financial condition of the Company and the Subsidiaries and all endorsers or guarantors of the Senior Obligations or the Second Priority Debt Obligations and (b) all other circumstances bearing upon the risk of nonpayment of the Senior Obligations or the Second Priority Debt Obligations. The Senior Representative, the Senior Debt Parties, the Second Priority Representative and the Second Priority Debt Parties shall have no duty to advise any other party hereunder of information known to it or them regarding such condition or any such circumstances or otherwise. In the event that the Senior Representative, any Senior Secured Party, any Second Priority Representative or any Second Priority Debt Party, in its sole discretion, undertakes at any time or from time to time to provide any such information to any other party, it shall be under no obligation to (i) make, and the Senior Representative, the Senior Secured Parties, the Second Priority Representative and the Second Priority Debt Parties 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 any such information so provided, (ii) provide any additional information or to provide any such information on any subsequent occasion, (iii) undertake any investigation or (iv) disclose any information that, pursuant to accepted or reasonable commercial finance practices, such party wishes to maintain confidential or is otherwise required to maintain confidential.
		

		
			
		

		
			

		 

		

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			SECTION 8.05.    Subrogation.  The Second Priority Representative, on behalf of itself and each Second Priority Debt Party under the Second Priority Debt Facility, hereby waives any rights of subrogation it may acquire as a result of any payment hereunder until the Discharge of Senior Obligations has occurred.
		

		
			SECTION 8.06.    Application of Payments.  Except as otherwise provided herein, all payments received by the Senior Secured Parties may be applied, reversed and reapplied, in whole or in part, to such part of the Senior Obligations as the Senior Secured Parties, in their sole discretion, deem appropriate, consistent with the terms of the Senior Debt Documents. Except as otherwise provided herein, the Second Priority Representative, on behalf of itself and each Second Priority Debt Party under the Second Priority Debt Facility, assents to any extension or postponement of the time of payment of the Senior Obligations or any part thereof and to any other indulgence with respect thereto, to any substitution, exchange or release of any security that may at any time secure any part of the Senior Obligations and to the addition or release of any other Person primarily or secondarily liable therefor. Except as otherwise provided herein, all payments received by the Second Priority Debt Parties may be applied, reversed and reapplied, in whole or in part, to such part of the Second Priority Obligations as the Second Priority Debt Parties, in their sole discretion, deem appropriate, consistent with the terms of the Second Priority Debt Documents. Except as otherwise provided herein, the Senior Representative, on behalf of itself and each Senior Secured Party under the Senior Facility, assents to any such extension or postponement of the time of payment of the Second Priority Obligations or any part thereof and to any other indulgence with respect thereto, to any substitution, exchange or release of any security that may at any time secure any part of the Second Priority Obligations and to the addition or release of any other Person primarily or secondarily liable therefor.
		

		
			SECTION 8.07.    Additional Grantors.  The Company agrees that, if any Person shall become a Grantor after the date hereof, it will promptly cause such Person to become party hereto by executing and delivering an instrument in the form of Annex I.  Upon such execution and delivery, such Person will become a Grantor hereunder with the same force and effect as if originally named as a Grantor herein.  The execution and delivery of such instrument shall not require the consent of any other party hereunder, and will be acknowledged by the Second Priority Representative and the Senior Representative. The rights and obligations of each Grantor hereunder shall remain in full force and effect notwithstanding the addition of any new Grantor as a party to this Agreement.
		

		
			SECTION 8.08.    Dealings with Grantors.  Upon any application or demand by the Company or any Grantor to any Representative to take or permit any action under any of the provisions of this Agreement or under any Collateral Document (if such action is subject to the provisions hereof), the Company or such Grantor, as appropriate, shall furnish to such Representative a certificate of a Responsible Officer (an “Officer’s Certificate”) stating that all conditions precedent, if any, provided for in this Agreement or such Collateral Document, as the case may be, relating to the proposed action have been complied with, except that in the case of any such application or demand as to which the furnishing of such documents is specifically required by any provision of this Agreement or any Collateral Document relating to such particular application or demand, no additional certificate or opinion need be furnished.
		

		
			
		

		
			

		 

		

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			SECTION 8.09.    Consent to Jurisdiction; Waivers.  Each Representative, on behalf of itself and the Secured Parties of the Debt Facility for which it is acting, irrevocably and unconditionally:
		

		
			(a)        submits for itself and its property in any legal action or proceeding relating to this Agreement and the Collateral Documents, or for recognition and enforcement of any judgment in respect thereof, to the exclusive jurisdiction of the courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof;
		

		
			(b)        consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;
		

		
			(c)        agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such Person (or its Representative) at the address referred to in Section 8.10 or by a procedure permitted under the relevant Senior Debt Document or Second Priority Debt Documents, as the case may be;
		

		
			(d)        agrees that nothing herein shall affect the right of any other party hereto (or any Secured Party) to effect service of process in any other manner permitted by law; and
		

		
			(e)        waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section 8.09 any special, exemplary, punitive or consequential damages.
		

		
			SECTION 8.10.    Notices.  All notices, requests, demands and other communications provided for or permitted hereunder shall be in writing and shall be sent:
		

		
			(a)        if to the Company or any Grantor, to the Company, at its address at: Sundance Energy, Inc., 633 17th Street, Suite 1950 Denver, Colorado 80202, Attention: Eric P. McCrady;
		

		
			(b)        if to the Second Priority Representative, to it at: Morgan Stanley Energy Capital Inc., 1585 Broadway, 16th Floor, New York, New York 10036, Attention: David Lazarus (Telephone 212-296-8134); and
		

		
			(c)        if to the Senior Representative, to it at: Natixis, New York Branch, 1251 Avenue of the Americas, 5th Floor, New York, New York 10020, Attention: Robert Amdursky.
		

		
			Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and, may be personally served, telecopied or sent by courier service or U.S. mail and shall be deemed to have been given when delivered in person or by courier service, upon receipt of a telecopy or, if agreed to, electronic mail or upon receipt via U.S. mail (registered or certified, with postage prepaid and properly addressed). For the purposes
		

		
			
		

		
			

		 

		

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			hereof, the addresses of the parties hereto shall be as set forth above or, as to each party, at such other address as may be designated by such party in a written notice to all of the other parties. As agreed to in writing among each Representative 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 8.11.    Further Assurances.  The Senior Representative, on behalf of itself and each Senior Secured Party under the Senior Debt Facility for which it is acting, and the Second Priority Representative, on behalf of itself, and each Second Priority Debt Party under the Second Priority Debt Facility, agrees that it will take such further action and shall execute and deliver such additional documents and instruments (in recordable form, if requested) as the other parties hereto may reasonably request to effectuate the terms of, and the Lien priorities contemplated by, this Agreement.
		

		
			SECTION 8.12.    GOVERNING LAW; WAIVER OF JURY TRIAL.
		

		
			(A)       THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
		

		
			(B)       EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
		

		
			SECTION 8.13.     Binding on Successors and Assigns.  This Agreement shall be binding upon the Senior Representative, the Senior Secured Parties, the Second Priority Representative, the Second Priority Debt Parties, the Company, the other Grantors party hereto and their respective successors and assigns.
		

		
			SECTION 8.14.    Section Titles.  The section titles contained in this Agreement are and shall be without substantive meaning or content of any kind whatsoever and are not a part of this Agreement.
		

		
			SECTION 8.15.    Counterparts.  This Agreement may be executed in one or more counterparts, including by means of facsimile or other electronic method, each of which shall be an original and all of which shall together constitute one and the same document. Delivery of an executed signature page to this Agreement by facsimile or other electronic transmission shall be as effective as delivery of a manually signed counterpart of this Agreement.
		

		
			SECTION 8.16.    Authorization.  By its signature, each Person executing this Agreement on behalf of a party hereto represents and warrants to the other parties hereto that it is duly authorized to execute this Agreement. The Senior Representative represents and warrants that it has been authorized to enter into this Agreement by the Senior Secured Parties. The Second Priority Representative represents and warrants that this Agreement is binding upon the Second Priority Debt Parties.
		

		
			
		

		
			

		 

		

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			SECTION 8.17.    No Third Party Beneficiaries; Successors and Assigns.  The lien priorities set forth in this Agreement and the rights and benefits hereunder in respect of such lien priorities shall inure solely to the benefit of the Senior Representative, the Senior Secured Parties, the Second Priority Representative and the Second Priority Debt Parties, and their respective permitted successors and assigns, and no other Person (including the Grantors, or any trustee, receiver, debtor in possession or bankruptcy estate in a bankruptcy or like proceeding) shall have or be entitled to assert such rights.
		

		
			SECTION 8.18.    Effectiveness.  This Agreement shall become effective when executed and delivered by the parties hereto.
		

		
			SECTION 8.19.    Representative Capacities.  It is understood and agreed that (a) the Senior Representative is entering into this Agreement in its capacity as administrative agent under the Senior Credit Agreement and the provisions of Article XI of the Senior Credit Agreement applicable to the Administrative Agent (as defined therein) thereunder shall also apply to the Senior Representative hereunder and (b) the Second Priority Representative is entering into this Agreement in its capacity as administrative agent under the Second Priority Credit Agreement and the provisions of Article XI of the Second Priority Credit Agreement applicable to the Administrative Agent (as defined therein) thereunder shall also apply to the Second Priority Representative hereunder.
		

		
			SECTION 8.20.    Relative Rights.  Notwithstanding anything in this Agreement to the contrary, nothing in this Agreement is intended to or will (a) except to the extent contemplated by Section 5.01(a), 5.01(c) or 5.03(b), amend, waive or otherwise modify the provisions of the Senior Credit Agreement, any other Senior Debt Document or any Second Priority Debt Documents, or permit the Company or any Grantor to take any action, or fail to take any action, to the extent such action or failure would otherwise constitute a breach of, or default under, the Senior Credit Agreement or any other Senior Debt Document or any Second Priority Debt Documents or (b) obligate the Company or any Grantor to take any action, or fail to take any action, that would otherwise constitute a breach of, or default under, the Senior Credit Agreement or any other Senior Debt Document or any Second Priority Debt Document.
		

		
			SECTION 8.21.   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 8.22.    Timing.  If the day specified in this Agreement for giving any notice, the payment of any obligation, performing any covenant, duty or obligation, or taking any action is not a Business Day (or if the period during which any notice is required to be given, payment to be made, any covenant, duty or obligation is required to be performed, or any action is required to be taken expires on a day that is not a Business Day), then the date for giving such notice, making such payment, performing such covenant, duty or obligation, or taking such action (and the expiration date of such period during which notice is required to be given, any covenant, duty or obligation is required to be performed, or any action is required to be taken) shall be the next day that is a Business Day.
		

		
			
		

		
			

		 

		

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			[SIGNATURES BEGIN NEXT PAGE]
		

		
			 
		

		
			 
		

		
			

		 

		

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			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.
		

			
					
						 

					
					
						NATIXIS, NEW YORK BRANCH,

				
	
					
						 

					
					
						as Senior Representative

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Name:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Title:

					
					
						 

				

		
			 
		

		
			
		

		
			

		 

		

			[Signature Page Intercreditor Agreement]

		

 

		

			 

		

		

		
			 
		

			
					
						 

					
					
						MORGAN STANLEY ENERGY CAPITAL

				
	
					
						 

					
					
						INC., as the Second Priority Representative

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Name:

					
					
						Parker Corbin

				
	
					
						 

					
					
						 

					
					
						Title:

					
					
						Vice President

				

		
			 
		

		
			
		

		

		 

		

			[Signature Page Intercreditor Agreement]

		

 

		

			 

		

	
					
						

					
						 

					
					
						SUNDANCE ENERGY, INC.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Name:

					
					
						Cathy L. Anderson

				
	
					
						 

					
					
						 

					
					
						Title:

					
					
						Chief Financial Officer

				

		
			 
		

			
					
						 

					
					
						SUNDANCE ENERGY AUSTRALIA LIMITED

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Name:

					
					
						Cathy L. Anderson

				
	
					
						 

					
					
						 

					
					
						Title:

					
					
						Chief Financial Officer

				

		
			 
		

			
					
						 

					
					
						ARMADILLO E&P, INC.

				
	
					
						 

					
					
						SEA EAGLE FORD, LLC

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						 

				
	
					
						 

					
					
						Name:

					
					
						Cathy L. Anderson

				
	
					
						 

					
					
						Title:

					
					
						Chief Financial Officer

				

		
			 
		

		
			 
		

		
			

		 

		

			[Signature Page Intercreditor Agreement]

		

 

		

		
			SUPPLEMENT NO. dated as of _________ __, 20[__] to the INTERCREDITOR AGREEMENT dated as of April 23, 2018 (the “Intercreditor Agreement”), among Sundance Energy Inc., a Colorado corporation (the “Company”), and certain subsidiaries and affiliates of the Company (each a “Grantor”), Natixis, New York Branch, as Senior Representative, and Morgan Stanley Energy Capital, Inc., as Second Priority Representative.
		

		
			A.        Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Intercreditor Agreement.
		

		
			B.         The Grantors have entered into the Intercreditor Agreement. Pursuant to the Senior Credit Agreement and certain Second Priority Debt Documents, certain newly acquired or organized Subsidiaries of the Company are required to enter into the Intercreditor Agreement. Section 8.07 of the Intercreditor Agreement provides that such Subsidiaries may become party to the Intercreditor Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned Subsidiary (the “New Grantor”) is executing this Supplement in accordance with the requirements of the Senior Credit Agreement and the Second Priority Debt Documents.
		

		
			Accordingly, the New Grantor agrees as follows:
		

		
			SECTION 1.   In accordance with Section 8.07 of the Intercreditor Agreement, the New Grantor by its signature below becomes a Grantor under the Intercreditor Agreement with the same force and effect as if originally named therein as a Grantor, and the New Grantor hereby agrees to all the terms and provisions of the Intercreditor Agreement applicable to it as a Grantor thereunder. Each reference to a “Grantor” in the Intercreditor Agreement shall be deemed to include the New Grantor. The Intercreditor Agreement is hereby incorporated herein by reference.
		

		
			SECTION 2.    The New Grantor represents and warrants to the Senior Representative and the other Secured Parties that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.
		

		
			SECTION 3.   This Supplement may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when the Senior Representative shall have received a counterpart of this Supplement that bears the signature of the New Grantor. Delivery of an executed signature page to this Supplement by facsimile transmission or other electronic method shall be as effective as delivery of a manually signed counterpart of this Supplement.
		

		
			SECTION 4.    Except as expressly supplemented hereby, the Intercreditor Agreement shall remain in full force and effect.
		

		
			SECTION 5.  THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
		

		
			SECTION 6.   In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, no party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal
		

		
			
		

		
			

		 

		

			 

		

		

			 

		

 

		

			 

		

		

		
			or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the Intercreditor Agreement shall not in any way be affected or impaired. The parties hereto 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 7.    All communications and notices hereunder shall be in writing and given as provided in Section 8.10 of the Intercreditor Agreement. All communications and notices hereunder to the New Grantor shall be given to it in care of the Company as specified in the Intercreditor Agreement.
		

		
			SECTION 8.   The Company agrees to reimburse the Representatives for their reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Representatives.
		

		
			 
		

		
			 
		

		
			

		 

		

			Annex I-2

		

 

		

		
			IN WITNESS WHEREOF, the New Grantor, and the Senior Representative have duly executed this Supplement to the Intercreditor Agreement as of the day and year first above written.
		

			
					
						 

					
					
						[NAME OF NEW GRANTOR]

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Name:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Title:

					
					
						 

				

		
			 
		

			
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Acknowledged by:

				
	
					
						 

				
	
					
						NATIXIS, NEW YORK BRANCH, as Senior Representative

				
	
					
						 

					
					
						 

				
	
					
						By:

					
					
						 

					
					
						 

				
	
					
						 

					
					
						Name:

					
					
						 

					
					
						 

				
	
					
						 

					
					
						Title:

					
					
						 

					
					
						 

				

		
			 
		

			
					
						MORGAN STANLEY ENERGY CAPITAL, INC., as Second Priority Representative

				
	
					
						 

				
	
					
						 

					
					
						 

				
	
					
						By:

					
					
						 

					
					
						 

				
	
					
						 

					
					
						Name:

					
					
						 

					
					
						 

				
	
					
						 

					
					
						Title:

					
					
						 

					
					
						 

				

		
			 
		

		 

		

			Annex I-3

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