EXHIBIT 10.3
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this "AGREEMENT") dated as of September 24,
1997, is by and between ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇▇▇▇,
individually and as Agent for the holders of the hereinafter defined Subordinate
Notes (together with their respective successors and assigns, collectively
referred to herein as "SUBORDINATE LENDERS"), CREDIT LYONNAIS NEW YORK BRANCH, a
duly licensed branch under the New York Banking Law of a foreign banking
corporation organized under the laws of the Republic of France, as Agent for the
Lenders described therein (together with any successors and assigns, "SENIOR
LENDER"), and XPLOR ENERGY, INC., a Delaware corporation ("BORROWER").
Capitalized terms used herein but not otherwise defined herein shall have the
meanings ascribed to such terms in the Senior Credit Agreement (as hereinafter
defined).
R E C I T A L S
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1. Araxas SPV-1, Inc., an Oklahoma corporation and a wholly-owned second
tier subsidiary of Borrower ("ARAXAS SPV") and Senior Lender have executed that
certain Credit Agreement dated of even date herewith (the "SENIOR CREDIT
AGREEMENT"), pursuant to which Senior Lender agreed to extend credit to Araxas
SPV in a principal amount not to exceed $35,000,000.00.
2. The obligations of Araxas SPV to Senior Lender pursuant to the Senior
Credit Agreement are also evidenced by that certain Promissory Note dated of
even date herewith, executed by Araxas SPV and payable to the order of Credit
Lyonnais New York Branch in the original principal amount of $100,000,000.00
(the "SENIOR NOTE").
3. The obligations of Araxas SPV pursuant to the Senior Credit Agreement
and the Senior Note are secured by, among other collateral, the liens and
security interests created by that certain Security Agreement dated of even date
herewith executed by Araxas SPV, Borrower, Araxas Exploration, Inc., South Coast
Exploration Company, SOCO Exploration, L.P. and Interactive Exploration
Solutions, Inc. (collectively, the "OBLIGORS") for the benefit of Senior Lender
(the "SENIOR SECURITY INSTRUMENT") covering, among other things, all of the
capital stock of Interactive Exploration Solutions, Inc. together with all
general intangibles related thereto and all products and proceeds thereof as
more particularly described in the Senior Security Instrument (the "PROPERTY").
4. All of the indebtedness evidenced by the Senior Credit Agreement and
the Senior Note and secured by the Senior Security Instrument, and all other
obligations, liabilities, and indebtedness of Araxas SPV to Senior Lender,
whether now existing or hereafter arising between Araxas SPV and Senior Lender,
is referred to herein as the "SENIOR INDEBTEDNESS" and all of the documents
evidencing or securing the Senior Indebtedness are referred to herein as the
"SENIOR LOAN DOCUMENTS."
5. Contemporaneously with the execution hereof, Borrower will become
indebted to Subordinate Lenders in the aggregate principal amount of
$3,000,000.00 (the "SUBORDINATE LOANS")
as evidenced by those three certain Promissory Notes of even date herewith
executed by Borrower each in the original principal amount of $1,000,000.00 and
payable to the order of ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇▇▇▇,
respectively (collectively, the "SUBORDINATE NOTES").
6. Borrower has guaranteed the obligations of Araxas SPV under the Senior
Credit Agreement pursuant to the terms and conditions of that certain Guaranty
(the "GUARANTY") of even date herewith executed by the Obligors (other than
Araxas SPV) in favor of Senior Lender.
7. The obligations of Borrower under the Subordinate Notes will be secured
by liens and security interests in the Property granted by Borrower to ▇▇▇ ▇.
▇▇▇▇▇▇▇, as agent for the holders of the Subordinate Notes pursuant to the terms
of the Subordinate Notes.
8. All of the indebtedness of Borrower and all of the obligations created,
evidenced or secured by the Subordinate Notes and the other Subordinate Loan
Documents (defined below), and all other obligations, liabilities, and
indebtedness of Borrower to any Subordinate Lender, whether now existing or
hereafter arising between Borrower and such Subordinate Lender, is referred to
herein as the "SUBORDINATE INDEBTEDNESS," and all of the documents evidencing,
securing, or executed pursuant to the Subordinate Indebtedness are referred to
herein as the "SUBORDINATE LOAN DOCUMENTS."
9. Each Subordinate Lender acknowledges that because Araxas SPV is a
wholly-owned second tier subsidiary of Borrower that the loan or advance of
monies or other extensions of credit to Araxas SPV by Senior Lender is of value
to each such Subordinate Lender.
10. Senior Lender is unwilling to make the loan under the Senior Credit
Agreement unless Subordinate Lenders enter into this Agreement.
NOW, THEREFORE, in order to induce Senior Lender to make the loans under
the Senior Credit Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound hereby agrees as follows:
1. DEFINITIONS. The following terms shall have the meanings herein
specified unless the context otherwise requires (such meanings to apply to such
terms in both the singular and plural forms):
"ENFORCEMENT ACTION" means the commencement of the exercise of any remedies
against Borrower including, without limitation, the commencement of any
litigation or proceeding, the commencement of any foreclosure proceeding, the
exercise of any power of sale, the sale by advertisement, the taking of a deed
or assignment in lieu of foreclosure, the obtaining of a receiver or the taking
of any other enforcement action against, or the taking of possession or control
of, the Property, but specifically excluding (a) any requests and demands made
upon Borrower by delivery of notices to Borrower, (b) any assertion or
enforcement of any right of any Subordinate Lender to receive payment from
proceeds of a foreclosure sale of the Property incident to foreclosure of the
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liens or security interests created by the Senior Loan Documents which may
remain after payment of costs and expenses of such foreclosure and payment and
satisfaction in full of the Senior Indebtedness, and (c) the filing of claims in
any Insolvency Proceeding concerning Borrower as may be required to protect and
preserve the right of any Subordinate Lender to participate in such Insolvency
Proceeding as creditor and to participate in distributions of assets of Borrower
in such Insolvency Proceeding with respect to the Subordinate Indebtedness after
payment and satisfaction in full of the Senior Indebtedness, but subject in all
respects to the rights of Senior Lender under and as provided in this Agreement
and without in any way impairing or affecting the right of Senior Lender to
require performance and observance by each Subordinate Lender of or the
obligations of such Subordinate Lender to perform and observe the covenants,
undertakings, and agreements of such Subordinate Lender under and as provided in
this Agreement.
"INSOLVENCY PROCEEDING" means any proceeding under Title 11 of the United
States Code (11 U.S.C. Sec. 101 et. seq.) or any other insolvency, liquidation,
reorganization, or other similar proceeding concerning Borrower, any action for
the dissolution of Borrower, any proceeding Judicial or otherwise) concerning
the application of the assets of Borrower, for the benefit of its creditors, the
appointment of or any proceeding seeking the appointment of a trustee, receiver,
or other similar custodian for all or any substantial part of the assets of
Borrower or any other action concerning the adjustment of the debts of Borrower,
the cessation of business by Borrower, except following a sale, transfer, or
other disposition of all or substantially all of the assets of Borrower in a
transaction permitted under the Senior Loan Documents.
"MATURITY DATE" means the earlier of (a) the Bridge Stated-Termination Date
(as defined in the Senior Credit Agreement) as such date may be extended by
Senior Lender (subject to SECTION 5(A) below), and (b) the date on which the
Bridge Stated-Termination Date has been accelerated by Senior Lender following
the occurrence of a Default (as defined in the Senior Credit Agreement);
provided, however, that if the Facility Conversion Date (as defined in the
Senior Credit Agreement) shall have occurred on or prior to May 24, 1998, the
Maturity Date shall mean the earlier of (x) the Revolving Stated-Termination
Date (as defined in the Senior Credit Agreement) as such date may be extended by
Senior Lender (subject to Section 5(a) below), and (y) the date on which the
Revolving Stated-Termination Date has been accelerated by Senior Lender
following the occurrence of a Default (as defined in the Senior Credit
Agreement).
"PLAN VOTING RIGHTS" means, with respect to any person, the rights of such
person to vote to approve or reject any plan of reorganization in respect of
Borrower in an Insolvency Proceeding.
2. STANDBY; SUBORDINATION.
(A) SUBORDINATION OF LOAN. Each Subordinate Lender hereby agrees that the
Subordinate Indebtedness is and shall be subordinate, to the extent and in the
manner hereinafter set forth, to the prior indefeasible payment in full of the
Senior Indebtedness. Except as specifically provided in SECTION 2(F), no
payment shall be made by or on behalf of Borrower for or on account of any
Subordinate Indebtedness, and no Subordinate Lender shall take or receive from
Borrower, directly or indirectly, in cash or other property or by setoff or in
any other manner, including,
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without limitation, from or by way of collateral, payment of all or any of the
Subordinate Indebtedness, unless and until the Senior Indebtedness shall have
been indefeasibly paid in full. In the event of any distribution, division, or
application, partial or complete, voluntary or involuntary, by operation of law
or otherwise, of all or any part of the assets of Borrower or the proceeds
thereof (including any assets now or hereafter securing any Subordinate
Indebtedness) to creditors of Borrower or upon any indebtedness of Borrower, as
a result of the liquidation, dissolution, or other winding up, partial or
complete, of Borrower, or as a result of any receivership, insolvency, or
bankruptcy proceeding, or assignment for the benefit of creditors or marshaling
of assets, or as a result of any proceeding by or against Borrower for any
relief under any bankruptcy or insolvency law or laws relating to the relief of
debtors, readjustment of indebtedness, arrangements, reorganizations,
compositions, or extensions, or as a result of the sale of all or substantially
all of the assets of Borrower, then and in any such event:
(I) Senior Lender shall be entitled to receive payment in full of all
Senior Indebtedness before any Subordinate Lender shall be entitled to
receive any payment or other distributions on, or with respect to, the
Subordinate Indebtedness;
(II) Any payment or distribution of any kind or character, whether in cash,
securities, or other property, which but for these provisions would be
payable or deliverable upon or with respect to the Subordinated
Indebtedness, shall instead be paid or delivered directly to Senior Lender
for the benefit of the holders of the Senior Indebtedness for application
on the Senior Indebtedness, whether then due or not due, until all of the
Senior Indebtedness shall have first been fully and indefeasibly paid in
full and Senior Lender shall have no further commitment to extent any
credit to Borrower;
(III) Each Subordinate Lender shall duly and promptly take such action as
may reasonably be requested by Senior Lender to assist in the collection of
the Subordinate Indebtedness for the account of any holder of the Senior
Indebtedness, including, without limitation, the filing of appropriate
proofs of claim with respect to the Subordinated Indebtedness and the
voting of such claims; and
(IV) In the event that any Subordinate Lender shall not have filed a claim
in any bankruptcy, insolvency, or similar proceeding with respect to
Borrower at least sixty (60) days prior to the expiration of the time to
file such claims, then Senior Lender, on behalf of such Subordinate Lender,
shall be authorized to file a claim with respect to the Subordinate
Indebtedness.
(B) SUBORDINATION OF LIEN. Each Subordinate Lender hereby subordinates any
and all liens, pledges and security interests in the Property to any and all
liens, pledges and security interests of Senior Lender in the Property.
(C) STANDSTILL; LIMITATION ON SUBORDINATE LENDERS' RIGHTS.
(I) Notwithstanding any Subordinate Lender's rights under applicable
law or any provision of the Subordinate Loan Documents to the
contrary, each Subordinate Lender hereby acknowledges and agrees that
such Subordinate Lender shall not (1) accelerate the Subordinate
Indebtedness or any portion thereof, or (2) take any
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Enforcement Action until the indefeasible satisfaction in full of the
Senior Indebtedness. Each Subordinate Lender hereby waives any right
it may have to require that Senior Lender marshal any assets of
Borrower in favor of any Subordinate Lender and each Subordinate
Lender agrees that it shall not acquire, by subrogation or otherwise,
any lien, estate, right, or other interest in the Property or the
proceeds therefrom that is or may be equal or prior to any Senior Loan
Document until the indefeasible payment in full of the Senior
Indebtedness.
(II) Until the indefeasible satisfaction in full of the Senior
Indebtedness, each Subordinate Lender hereby covenants and agrees that
such Subordinate Lender will not acquiesce in, petition, or otherwise
invoke or cause any other person to invoke the process of the United
States of America, any state or other political subdivision thereof or
any other jurisdiction, any entity exercising executive, legislative,
judicial, regulatory, or administrative functions of or pertaining to
government for the purpose of commencing or sustaining a case against
Borrower, under a Federal or state bankruptcy, insolvency, or similar
law or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator, or other similar official of Borrower or all
or any part of its property or assets or ordering the winding-up or
liquidation of the affairs of Borrower.
(D) NON-INTERFERENCE BY SUBORDINATE LENDERS. No Subordinate Lender shall
institute any judicial or administrative proceeding against Borrower or Senior
Lender which directly or indirectly would interfere with or delay the exercise
by Senior Lender of its rights and remedies in respect of the Property or any
part thereof or under the Senior Loan Documents, this Agreement or the Guaranty.
Without limiting the generality of the foregoing, in the event of a bankruptcy
or insolvency of Borrower, no Subordinate Lender shall object to or oppose any
efforts by Senior Lender to obtain relief from the automatic stay under Section
362 of the United States Bankruptcy Code or to seek to cause such entity's
bankruptcy estate to abandon the Property (or any portion thereof) that is
subject to the Senior Security Instrument.
(E) ASSIGNMENT OF VOTING RIGHTS. Each Subordinate Lender hereby
absolutely, irrevocably, and unconditionally assigns and sets over to such
Senior Lender all of such Subordinate Lender's Plan Voting Rights in any
Insolvency Proceeding respecting Borrower. Senior Lender, however, acknowledges
and agrees that it will not exercise any such Plan Voting Rights of Subordinate
Lender in favor of any plan of reorganization which would result in or have the
effect of lowering the payment priority of the claims evidenced by the
Subordinate Loan Documents below that which such claims would otherwise be
entitled based on the ranking and priority of claims at the commencement of such
Insolvency Proceeding (a "PRIORITY REDUCTION"); provided, however, that Senior
Lender may exercise such Plan Voting Rights of Subordinate Lender in favor of a
plan of reorganization containing any Priority Reduction resulting from (i)
administrative claims and claims in favor of persons providing post-petition
financing in such Insolvency Proceedings and approved by the applicable court,
or (ii) a judicial determination made in such Insolvency Proceeding or ancillary
proceedings relating thereto approving or ordering such Priority Reduction under
applicable law, including, without limitation, principles of equitable
subordination or other equitable remedies available to the debtor, trustee or
other creditors in such Insolvency Proceeding.
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(F) PAYMENTS ON SUBORDINATE INDEBTEDNESS. Notwithstanding any provision
contained herein to the contrary, until the Maturity Date and provided no
Default or Potential Default (as each of such terms are defined in the Senior
Credit Agreement) has occurred and is continuing, Subordinate Lenders may
receive and retain the outstanding principal balance of the Subordinate Notes on
the maturity date thereof.
(G) DISTRIBUTIONS HELD IN TRUST. If any Subordinate Lender shall receive
any cash distributions in respect of, or other proceeds of, the Property
(including, without limitation, (i) any distribution arising directly or
indirectly from any lien of Senior Lender being avoided, declared to be
fraudulent, or otherwise set aside under the provisions of any law governing
fraudulent conveyances or transfers, and (ii) any distribution arising directly
or indirectly by reason of or in connection with an Insolvency Proceeding), in
excess of what such Subordinate Lender is entitled to pursuant to the
Subordinate Loan Documents and SECTION 2(F) (or would have been entitled to if
such Insolvency Proceeding had not occurred or if any such lien had not been
avoided, declared to be fraudulent, or otherwise set aside under the provisions
of any law governing fraudulent conveyances or transfers), then such Subordinate
Lender shall hold the same in trust, as trustee, for the benefit of Senior
Lender and shall promptly deliver the same to or at the direction of Senior
Lender, for the benefit of Senior Lender in precisely the form received (except
for the endorsement or assignment thereof by such Subordinate Lender without
recourse or warranty), it being understood that it is the intention of the
parties that until the Senior Indebtedness (without regard to any modifications
thereof arising by reason of or in connection with an Insolvency Proceeding) is
repaid in full, Senior Lender shall receive all proceeds relating to any
realization upon, distribution in respect of, or interest in any of the Property
as and to the extent set forth in the Senior Loan Documents. In the event any
Subordinate Lender fails to make any such endorsement or assignment, Senior
Lender, or any of its officers or employees, is hereby irrevocably authorized to
make the same.
3. REPRESENTATIONS. Each Subordinate Lender represents and warrants to
Senior Lender that:
(A) Such Subordinate Lender has all necessary power and authority to
execute, deliver, and perform its obligations under this Agreement.
(B) All action on the part of such Subordinate Lender that is required for
the authorization, execution, delivery, and performance of this Agreement has
been duly and effectively taken.
(C) This Agreement has been duly executed and delivered by such Subordinate
Lender and constitutes the legal, valid, and binding obligation of such
Subordinate Lender, enforceable against such Subordinate Lender in accordance
with the terms thereof.
4. AGREEMENT BY BORROWER. Borrower agrees that Senior Lender and
Subordinate Lenders may share information that each may acquire with respect to
Borrower or the Property and
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consents to the transfer of such information, whether financial or otherwise,
between them, without having to obtain Borrower's consent.
5. AGREEMENTS BY SUBORDINATE LENDERS. Each Subordinate Lender agrees
that so long as the Senior Credit Agreement is outstanding:
(A) Senior Lender and Borrower may from time-to-time enter into
modifications, renewals, extensions, and replacements of the Senior Credit
Agreement and the Senior Loan Documents without the further consent of, or
notice to, such Subordinate Lender.
(B) Such Subordinate Lender shall not make any further loans or advances to
Borrower.
(C) Such Subordinate Lender shall not amend the Subordinate Loan Documents
without Senior Lender's prior written consent.
6. DEFAULTS AND NOTICES. The parties agree that:
(A) The occurrence of a Default or an event of default under the Senior
Loan Documents shall not, in and of itself, constitute a default under the
Subordinate Loan Documents.
(B) The occurrence of a default under the Subordinate Loan Documents shall
constitute a default under the Senior Loan Documents.
(C) Senior Lender shall provide Subordinate Lenders with copies of all
written notices which are sent to Borrower under the Senior Loan Documents
(including notices of default and notices of intention to exercise remedies
under the Senior Loan Documents), simultaneously with the sending of such
notices to Borrower.
(D) Subordinate Lenders shall provide Senior Lender with copies of all
written notices which are sent to Borrower under the Subordinate Loan Documents
(including notices of default and notices of intention to exercise remedies
under the Subordinate Loan Documents), simultaneously with the sending of such
notices to Borrower.
(E) Senior Lender shall have the right, but not the obligation, to cure any
monetary default by Borrower under the Subordinate Loan Documents at any time on
or before the thirtieth (30th) day following the expiration of any grace,
notice, or cure period available to Borrower for any monetary default under the
Subordinate Loan Documents and written notice thereof from the applicable
Subordinate Lender to Senior Lender. Senior Lender shall have the right, but
not the obligation, to cure any nonmonetary default by Borrower under the
Subordinate Loan Documents at any time on or before the (i) sixtieth (60th) day
following the expiration of any grace, notice, or cure period available to
Borrower for any non-monetary default under the Subordinate Loan Documents and
written notice thereof from the applicable Subordinate Lender to Senior Lender,
and (ii) the sixtieth (60th) day thereafter, if such nonmonetary default is not
susceptible of being cured within sixty (60) days of expiration of Borrower's
nonmonetary cure period under the Subordinate Loan Documents.
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7. INSTRUMENT LEGEND. Any instrument evidencing any of the Subordinate
Indebtedness shall, on the date hereof, be inscribed with a legend conspicuously
indicating that payment thereof is subordinated to the claims of Senior Lender
pursuant to the terms of this Agreement, and a certified copy thereof will be
delivered to Senior Lender on the date hereof. Any instrument evidencing any of
the Subordinate Indebtedness, or any portion thereof, which is hereafter
executed by Borrower, will, on the date thereof, be inscribed with the aforesaid
legend and a copy thereof will be delivered to Senior Lender on the date of its
execution or within five (5) days thereafter.
8. CONTINUING NATURE OF SUBORDINATION. This Agreement shall continue to
be effective until the Senior Indebtedness shall have been fully discharged or
the termination of this Agreement. This is a continuing agreement of
subordination.
9. SUBORDINATE LENDERS' WAIVERS. All of the Senior Indebtedness shall be
deemed to have been made or incurred in reliance upon this Agreement. Each
Subordinate Lender expressly waives all notices of the acceptance by Senior
Lender of the subordination and other provisions of this Agreement and all other
notices not specifically required pursuant to the terms of this Agreement
whatsoever, and each Subordinate Lender expressly waives reliance by Senior
Lender upon the subordination and other agreements contained herein. Each
Subordinate Lender agrees that Senior Lender has made no warranties or
representations with respect to the due execution, legality, validity,
completeness, or enforceability of the Senior Loan Documents, or the
collectability of the Senior Indebtedness, that Senior Lender shall be entitled
to manage and supervise loans to Borrower in accordance with applicable law and
its usual practices, modified from time-to-time as Senior Lender deems
appropriate under the circumstances, without regard to the existence of any
rights that any Subordinate Lender may now or hereafter have in or to any of the
assets of Borrower, and that Senior Lender shall have no liability to any
Subordinate Lender for, and each Subordinate Lender waives any claim which such
Subordinate Lender may now or hereafter have against Senior Lender arising out
of, any and all actions which Senior Lender, in good faith, takes or omits to
take (including, without limitation, actions with respect to the creation,
perfection or continuation of liens or security interests in collateral or
security, actions with respect to the occurrence of default, actions with
respect to the foreclosure upon, sale, release, or depreciation of, or failure
to realize upon, any collateral or security and actions with respect to the
collection of any claim for all or any part of the Senior Indebtedness from any
account debtor, guarantor, or any other party and actions with respect to any
bankruptcy proceeding or the extension of credit by Senior Lender to Borrower in
any such proceeding) with respect to the Senior Loan Documents, or any other
agreement related thereto or to the collection of the Senior Indebtedness or the
valuation, use protection or release of collateral or security for the Senior
Indebtedness.
10. SENIOR LENDER'S WAIVERS. No waiver shall be deemed to be made by
Senior Lender of any of their rights hereunder, unless the same shall be in
writing signed on behalf of Senior Lender, and each waiver, if any, shall be a
waiver only with respect to the specific instance involved and shall in no way
impair the rights of Senior Lender or the obligations of any Subordinate Lender
to Senior Lender in any other respect at any other time.
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11. INFORMATION CONCERNING FINANCIAL CONDITION OF BORROWER. Each
Subordinate Lender hereby assumes responsibility for keeping itself informed of
the financial condition of Borrower, any and all endorsers and any and all
guarantors of the Senior Indebtedness and the Subordinate Indebtedness and of
all other circumstances bearing upon the risk of nonpayment of the Senior
Indebtedness and the Subordinate Indebtedness that diligent inquiry would
reveal, and such Subordinate Lender hereby agrees that Senior Lender shall have
no duty to advise such Subordinate Lender of information known to Senior Lender
regarding such condition or any such circumstances.
12. PRIORITIES. The subordinations and priorities specified hereinabove
are applicable irrespective of the time or order of attachment or perfection of
any security interest or other interests referred to herein, the time or order
of filing of financing statements or mortgages, the acquisition of purchase
money or other security interests, or the time of giving or failure to give
notice of the acquisition or expected acquisition of purchase money or other
security interests. The subordinations and priorities specified herein are not
conditioned upon the non-avoidability or perfection of Senior Lender's security
interests in any collateral for the Senior Indebtedness.
13. CONTROLLING AGREEMENTS. In the event of any conflict between the
terms and conditions of this Agreement and the terms and provisions of the
Senior Loan Documents or the Subordinate Loan Documents, then the terms and
provisions of this Agreement shall control.
14. NO THIRD-PARTY BENEFICIARY. Nothing in this Agreement, express or
implied, is intended or shall be construed to confer upon, or to give to, any
party other than the parties hereto and their respective successors and assigns,
any right, remedy, or claim under or by reason of this Agreement or any
covenant, condition, or stipulation thereto; and the covenants, stipulations,
and agreements contained in this Agreement are and shall be for the sole and
exclusive benefit of the parties hereto and their respective successors and
assigns.
15. MISCELLANEOUS.
(A) SEVERABILITY. In case any one or more of the provisions contained in
this Agreement shall be invalid, illegal, or unenforceable in any respect, the
validity, legality, and enforceability of the remaining provisions contained
herein shall not in any way be affected and/or impaired thereby.
(B) NOTICES. All notices, demands, certificates, or other communications
hereunder shall be in writing and shall be deemed sufficiently given or served
for all purposes when delivered personally, when sent by certified or registered
mail, postage prepaid, return receipt requested or by private courier service,
in each case, with the proper address as indicated below. Each party may, by
written notice given to the other parties, designate any other address or
addresses to which notices, certificates or other communications to them shall
be sent as contemplated by this Agreement. Until otherwise so provided by the
respective parties, all notices, certificates and communications to each of them
shall be addressed as follows:
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SENIOR LENDER: Credit Lyonnais New York Branch
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇
Vice President and Group Manager
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
SUBORDINATE ▇▇▇▇▇ ▇. ▇▇▇▇▇
LENDERS: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
BORROWER: XPLOR Energy, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chief Financial Officer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(C) SUCCESSORS AND ASSIGNS. Whenever in this Agreement any party hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included and all rights, benefits, covenants, promises, and agreements in
this Agreement by or on behalf of the respective parties hereto shall bind and
inure to the benefit of the respective successors and assigns of such parties,
whether so expressed or not.
(D) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each executed counterpart constituting an original but all
counterparts together constituting only one instrument.
(E) GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Texas applicable to
contracts made and to be performed in such state; provided that with respect to
obligations running solely between Borrower, Araxas SPV and Senior Lender, the
applicable law shall be determined in the same manner as is provided in the
Senior Credit Agreement and the Guaranty.
(F) AMENDMENTS. No amendment or waiver of any provision of this Agreement
shall be effective unless the same shall be in writing and signed by the party
or parties against whom it
10
is to be enforced, and any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. No delay on the
part of Senior Lender or any Subordinate Lender in the exercise of any right,
power, or remedy shall operate as a waiver thereof, nor shall any single or
partial waiver by either Senior Lender or such Subordinate Lender of any right,
power, or remedy preclude any further exercise thereof, or the exercise of any
other right, power or remedy.
(G) SURVIVAL. This Agreement shall remain in full force and effect until
payment in full of the Senior Indebtedness.
(H) ENTIRETY. This Agreement, including the documents referred to herein,
embodies the entire agreement and understanding of the parties hereto and
supersedes all prior agreements and understandings of the parties hereto
relating to the subject matter herein contained.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto on the date first above written.
SUBORDINATE LENDERS:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇, individually and as
Agent for the holders of the
Subordinate Notes
11
SENIOR LENDER:
CREDIT LYONNAIS NEW YORK BRANCH, AS
AGENT
By: /s/ Pascal Poupelle
------------------------------------
Name: Pascal Poupelle
Title: Executive Vice President
BORROWER:
XPLOR ENERGY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
12
ACKNOWLEDGMENT PAGE TO SUBORDINATION AGREEMENT
STATE OF TEXAS (S)
(S)
COUNTY OF ▇▇▇▇▇▇▇▇▇▇ (S)
Before me, a Notary Public, on this day personally appeared ▇▇▇▇▇ ▇. ▇▇▇▇▇,
known to me to be the person whose name is subscribed to the foregoing
instrument and acknowledged to me that he executed the same for the purposes and
consideration therein expressed.
Given under my hand and seal of office this 24th day of September, 1997
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Notary Public Signature
(PERSONALIZED SEAL)
STATE OF TEXAS (S)
(S)
COUNTY OF ▇▇▇▇▇▇▇▇▇▇ (S)
Before me, a Notary Public, on this day personally appeared ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, known to me to be the person whose name is subscribed to the foregoing
instrument and acknowledged to me that he executed the same for the purposes and
consideration therein expressed.
Given under my hand and seal of office this 24th day of September, 1997
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Notary Public Signature
(PERSONALIZED SEAL)
STATE OF TEXAS (S)
(S)
COUNTY OF ▇▇▇▇▇▇▇▇▇▇ (S)
Before me, a Notary Public, on this day personally appeared ▇▇▇ ▇. ▇▇▇▇▇▇▇,
known to me to be the person whose name is subscribed to the foregoing
instrument and acknowledged to me that he executed the same for the purposes and
consideration therein expressed.
Given under my hand and seal of office this 24th day of September, 1997
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Notary Public Signature
(PERSONALIZED SEAL)
13
ACKNOWLEDGMENT PAGE TO SUBORDINATION AGREEMENT
STATE OF NEW YORK (S)
(S)
COUNTY OF NEW YORK (S)
This instrument was acknowledged before me on September 24, 1997 by Pascal
Poupelle, Executive Vice President of CREDIT LYONNAIS NEW YORK BRANCH, a duly
licensed branch under the New York Banking Law of a foreign banking corporation
organized under the laws of the Republic of France, on behalf of such
corporation.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Notary Public Signature
(PERSONALIZED SEAL)
14
ACKNOWLEDGMENT PAGE TO SUBORDINATION AGREEMENT
STATE OF TEXAS (S)
(S)
COUNTY OF ▇▇▇▇▇▇▇▇▇▇ (S)
This instrument was acknowledged before me on September 24, 1997 by ▇▇▇▇▇▇
▇. ▇▇▇▇▇, President of XPLOR Energy, Inc., a Delaware corporation on behalf of
said corporation.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Notary Public Signature
(PERSONALIZED SEAL)
15