EXHIBIT 10.71
DEED OF TRUST, ASSIGNMENT, SECURITY AGREEMENT,
FINANCING STATEMENT AND FIXTURE FILING
THIS DEED OF TRUST, ASSIGNMENT, SECURITY AGREEMENT, FINANCING STATEMENT AND
FIXTURE FILING (this "Deed of Trust"), dated as of August 24, 2007, given by
PACIFIC ENERGY ALASKA OPERATING LLC ("Trustor"), a Delaware limited
liability company the address of which for purposes of this Deed of Trust
is set forth at the end of this Deed of Trust immediately prior to Exhibit
A, (formerly known as FOREST ALASKA OPERATING, LLC, a Delaware limited
liability company),
to
FIRST AMERICAN TITLE INSURANCE COMPANY, as trustee ("Trustee"), the address
of which is set forth at the end of this Deed of Trust immediately prior to
Exhibit A,
and
SILVER POINT FINANCE, LLC ("Silver Point"), the address of which is set
forth at the end of this Deed of Trust immediately prior to Exhibit A, as
agent ("Agent") for the Lenders (hereinafter defined) and the Secured
Parties (hereinafter defined),
WITNESSETH:
WHEREAS, pursuant to that certain Second Lien Credit Agreement, dated as of
August 24, 2007 (herein, as the same may be amended, modified or supplemented
from time to time, called the "Credit Agreement"), among Trustor, Pacific Energy
Alaska Holdings LLC("Holdings"), the various financial institutions
(individually a "Lender" and collectively the "Lenders") as are, or may from
time to time become, parties thereto, the various financial institutions as are,
or may from time to time become, Agents under the Credit Agreement and the
Agent, the Lenders have extended Commitments to make Loans to Trustor in a
maximum aggregate principal amount of up to $317,000,000 which Commitments are
currently scheduled to terminate no later than February 24, 2012.
WHEREAS, it is a condition precedent to the making of the Loans under the Credit
Agreement that Trustor is required to execute and deliver this Deed of Trust.
WHEREAS, Trustor has duly authorized the execution, delivery and performance of
this Deed of Trust.
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WHEREAS, capitalized terms not otherwise defined herein shall have the meanings
attributed them in the Credit Agreement.
WHEREAS, without limiting the generality of the foregoing, for all purposes of
this Deed of Trust, unless the context otherwise requires:
"Agent" shall mean Silver Point, in its capacity under the Credit Agreement
as Administrative and Collateral Agent.
"Commitment" shall mean, with respect to each Lender, the commitment of
such Lender to make Loans as set forth on Schedule 2.01 of the Credit
Agreement or in the Assignment and Acceptance pursuant to which such Lender
assumed its Commitment, as applicable, as the same may be reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04 of the Credit Agreement.
"Contracts" shall mean all contracts, agreements, operating agreements,
farm-out or farm-in agreements, sharing agreements, mineral purchase
agreements, contracts for the purchase, exchange, transportation,
processing or sale of Hydrocarbons, rights-of-way, easements, surface
leases, equipment leases, permits, franchises, licenses, pooling or
unitization agreements, and unit or pooling designations and orders now or
hereafter affecting any of the Oil and Gas Properties, Operating Equipment,
Fixture Operating Equipment or Hydrocarbons now or hereafter covered
hereby, or which are useful or appropriate in drilling for, producing,
treating, handling, storing, transporting or marketing oil, gas or other
minerals produced from any of the Oil and Gas Properties, and all as such
contracts and agreements as they may be amended, supplemented or otherwise
modified from time to time.
"Default" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
"Environmental Laws" shall mean all former, current and future Federal,
state, local and foreign laws (including common law), treaties,
regulations, rules, ordinances, codes, decrees, judgments, directives,
orders (including consent orders), and agreements in each case, relating to
protection of the environment, natural resources, human health and safety
or the presence, Release of, or exposure to, Hazardous Materials, or the
generation, manufacture, processing, distribution, use, treatment, storage,
transport, recycling or handling of, or the arrangement for such activities
with respect to, Hazardous Materials.
"Event of Default" shall have the meaning assigned to such term in Article
VII of the Credit Agreement.
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"Fixture Operating Equipment" shall mean any of the items described in the
first sentence of the definition of "Operating Equipment" which as a result
of being incorporated into realty or structures or improvements located
therein or thereon, with the intent that they remain there permanently,
constitute fixtures under the laws of the state in which such equipment is
located.
"Hazardous Materials" shall mean (a) petroleum and any petroleum products
or Hydrocarbons, coal ash, radon gas, asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls, chlorofluorocarbons and all other
ozone-depleting substances and (b) any chemical, material, substance or
waste that is prohibited, limited or regulated by or pursuant to any
Environmental Law.
"Hedging Agreement" means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.
The "principal amount" of the obligations of any person in respect of any
Hedging Agreement at any time shall be the maximum aggregate amount (after
giving effect to any netting agreements) that such person would be required
to pay if such Hedging Agreement were terminated at such time.
"Hedging Obligations" means the due and punctual payment and performance of
all obligations of each Loan Party under each Hedging Agreement (a) that is
in effect on the Closing Date and set forth in Schedule 1.01(a) to the
Credit Agreement, (b) that is in effect on the Closing Date with a
counterparty that is (i) the Agent or Syndication Agent, (ii) a Lender as
of the Closing Date or (iii) an Affiliate of the Agent or Syndication Agent
or any such Lender or (c) that is entered into after the Closing Date with
a counterparty that is (i) the Agent or Syndication Agent, (ii) a Lender as
of the date on which the Hedging Agreement is entered into or (iii) an
Affiliate of the Agent or Syndication Agent or any such Lender.
"Hydrocarbon Interests" shall mean all rights, titles, interests and
estates now owned or hereafter acquired in and to oil and gas leases,
leasehold interests and licenses, oil, gas and mineral leases or other
liquid or gaseous hydrocarbon licenses, leases, fee mineral interests, term
mineral interests, subleases, mineral servitudes, farm-outs, royalties,
overriding royalty and royalty interests, non-consent interests arising out
of or pursuant to Contracts, net profit interests, net revenue and profit
interests, oil payments, production payments, production payment interests
and similar interests and estates, including all reserved or residual
interests of whatever nature and all reversionary or carried interests
relating to any of the foregoing. Unless otherwise indicated herein, each
reference to the term "Hydrocarbon Interests" shall mean Hydrocarbon
Interests of Trustor.
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"Hydrocarbons" shall mean oil, gas, casinghead gas, drip gasoline, natural
gasoline, condensate, distillate, liquid hydrocarbons, gaseous
hydrocarbons, kerosene, liquefied petroleum gas, refined lubricating oils,
diesel fuel and all products refined, separated, settled or dehydrated
therefrom.
"Intercreditor Agreement" shall mean the Intercreditor Agreement, dated as
of August 24, 2007, among the Silver Point, the First Lien Agent, Holdings
and the Trustor.
"lands described in Exhibit A" shall include any lands which are either
described in Exhibit A or the description of which is incorporated in
Exhibit A by reference to another instrument or document, and shall also
include any lands now or hereafter unitized or pooled with lands which are
either described in Exhibit A or the description of which is incorporated
in Exhibit A by reference.
"Lenders" shall mean the persons listed on Schedule 2.01 to the Credit
Agreement and any other person that has become a party to the Credit
Agreement pursuant to an Assignment and Acceptance, other than any such
person that ceases to be a party to the Credit Agreement pursuant to an
Assignment and Acceptance.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to
such securities.
"Loan Documents" shall mean the Credit Agreement, the Security Documents
and the promissory notes, if any, executed and delivered pursuant to
Section 2.03(e) of the Credit Agreement.
"Loans" shall mean the term loans made by the Lenders to Trustor pursuant
to Section 2.01 of the Credit Agreement.
"Material Adverse Effect" shall mean (a) a materially adverse effect on the
business, assets, liabilities, operations, condition (financial or
otherwise) or operating results of Holdings and its subsidiaries, taken as
a whole, (b) a material impairment of the ability of Trustor or any other
Loan Party to perform any of its obligations under any Loan Document to
which it is or will be a party or (c) a material impairment of the rights
and remedies of or benefits available to the Lenders under any Loan
Document.
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"Mortgaged Properties" shall mean the properties, rights and interests
hereinafter described and defined as the Mortgaged Properties on the
attached Exhibit A.
"Obligations" means (a) the due and punctual payment by Trustor of (i) the
principal of, premium (if any) and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other
similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise and
(ii) all other monetary obligations of Trustor to any of the Secured
Parties under the Credit Agreement and each of the other Loan Documents,
including obligations to pay fees, expense reimbursement obligations and
indemnification obligations, whether primary, secondary, direct,
contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other
similar proceeding, regardless of whether allowed or allowable in such
proceeding), (b) the due and punctual performance of all other obligations
of Trustor under or pursuant to the Credit Agreement and each of the other
Loan Documents to which it is a party and (c) the due and punctual payment
and performance of all the obligations of each other Loan Party under or
pursuant to the Security Documents and each of the other Loan Documents to
which they are a party.
"Oil and Gas Properties" shall mean (a) Hydrocarbon Interests, (b)
properties and assets now or hereafter pooled or unitized with Hydrocarbon
Interests, (c) all currently existing or future unitization, 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
Contracts, including production sharing contracts and agreements, which
relate to any of the Hydrocarbon Interests or the production, sale,
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 and assets in any manner appertaining, belonging, affixed or
incidental to the Hydrocarbon Interests and (g) all properties and assets,
rights, titles, interests and estates described or referred to above,
including any and all properties and assets, real or personal, now owned or
hereinafter 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 properties and assets (excluding drilling rigs,
automotive equipment, rental equipment or other personal property or assets
which may be on such premises for the purpose of drilling a well or for
other similar temporary
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uses) and including any and all oil xxxxx, gas xxxxx, injection xxxxx or
other xxxxx, 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. Unless otherwise indicated herein, each reference to the
term "Oil and Gas Properties" shall mean Oil and Gas Properties of Trustor.
"Operating Equipment" means all surface or subsurface machinery, equipment,
facilities, supplies or other properties and assets of whatsoever kind or
nature now or hereafter located on any of the properties or assets affected
by the Oil and Gas Properties which are useful for the production,
treatment, storage or transportation of Hydrocarbons, including all oil
xxxxx, gas xxxxx, water xxxxx, injection xxxxx, casing, tubing, rods,
pumping units and engines, christmas trees, derricks, separators, gun
barrels, flow lines, pipelines, tanks, gas systems (for gathering, treating
and compression), water systems (for treating, disposal and injection),
supplies, derricks, wells, power plants, poles, cables, wires, meters,
processing plants, compressors, dehydration units, lines, transformers,
starters and controllers, machine shops, tools, storage yards and equipment
stored therein, buildings and camps, telegraph, telephone and other
communication systems, roads, loading racks, shipping facilities and all
additions, substitutes and replacements for, and accessories and
attachments to, any of the foregoing. "Operating Equipment" shall not
include any items incorporated into realty or structures or improvements
located therein or thereon in such a manner that they no longer remain
persona] property under the laws of the State in which such equipment is
located.
"ORRI" shall mean the overriding royalty interest carved out of each Oil
and Gas Property as defined in and pursuant to the terms of the Conveyance
Of Overriding Royalty Interest filed and recorded either before or after
this Deed of Trust.
"Real Property" shall mean, collectively, all right, title and interest of
Trustor in and to any and all parcels of real property owned, leased or
operated by Trustor together with all improvements and appurtenant
fixtures, equipment, personal property, easements and other property and
rights incidental to the ownership, lease or operation thereof, including
all Oil and Gas Properties that constitute real property.
"Release" shall mean any release, spill, emission, leaking, dumping,
injection, pouring, deposit, disposal, discharge, dispersal, leaching or
migration into or through the environment or within or upon any building,
structure, facility or fixture.
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"Secured Obligations" shall have the meaning set forth in Section 1.2
hereof.
"Secured Parties" shall mean (a) the Lenders, (b) the Agent, (c) the
beneficiaries of each indemnification obligation undertaken by any Loan
Party under any Loan Document and (d) the successors and permitted assigns
of each of the foregoing.
"Uniform Commercial Code" shall mean the Uniform Commercial Code as in
effect from time to time in the States of New York, Delaware, and Alaska
(insofar as the same may be applicable) and the terms "Accounts", "Account
Debtor", "As-Extracted Collateral", "Chattel Paper", "Contract Rights",
"Deposit Accounts", "Documents", "General Intangibles", "Goods",
"Equipment", "Fixtures", "Inventory", "Instruments", and "Proceeds" shall
have the respective meanings assigned to such terms in the Uniform
Commercial Code.
NOW, THEREFORE, Trustor, for and in consideration of the premises and of the
debts and trusts hereinafter mentioned, does hereby GRANT, BARGAIN, SELL,
WARRANT, MORTGAGE, ASSIGN, PLEDGE AND HYPOTHECATE, TRANSFER AND CONVEY unto the
Trustee, in trust, with a POWER OF SALE, for the use and benefit of the Agent,
for itself and as agent for the Secured Parties, all Trustor's right, title, and
interest, whether now owned or hereafter acquired, in and to all of the
hereinafter described properties, rights, and interests that are located in (or
cover properties located in) the State of Alaska or which are located within (or
cover properties located within) the offshore area over which the United States
of America asserts jurisdiction and to which the laws of Alaska are applicable
with respect to this Deed of Trust and/or the liens or security interests
created hereby (the "Deed of Trust Mortgaged Properties"); and, insofar as such
properties, rights and interests consist of As-Extracted Collateral, Equipment,
General Intangibles, Accounts, Contract Rights, Inventory, Fixtures, Proceeds of
collateral or any other personal property of a kind or character defined in or
subject to the applicable provisions of the Uniform Commercial Code (as in
effect from time to time in the appropriate jurisdiction with respect to each of
said properties, rights and interests) (the "Other Mortgaged Properties"),
Trustor hereby grants to the Agent, for itself and as agent for the Secured
Parties, a security interest therein to the full extent of Trustor's legal and
beneficial interest therein, now owned or hereafter acquired, namely:
(a) the lands described in Exhibit A, the Oil and Gas Properties, and the
fee, mineral, leasehold, royalty, overriding royalty, easement,
right-of-way, and other interests which are described or referred to
in Exhibit A,
(b) the presently existing and hereafter arising unitization, unit
operating, communitization and pooling agreements and the properties
covered and the units created thereby (including, without limitation,
all units formed under orders, regulations, rules, approvals,
decisions or other official acts of any federal, state or other
governmental agency having jurisdiction)
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which are specifically described in Exhibit A or which relate to any
of the properties and interests specifically described in Exhibit A,
(c) the Hydrocarbons which are in, under, upon, produced or to be produced
from or which are attributed or allocated to the lands described in
Exhibit A,
(d) the Contracts,
(e) the Fixture Operating Equipment and the Operating Equipment,
(f) without duplication of any other provision of this granting clause,
Equipment, Fixtures and other Goods necessary or used in connection
with, and As-Extracted Collateral, Fixtures, Inventory, Accounts,
General Intangibles, Contract Rights, Chattel Paper, Deposit Accounts,
Documents, Instruments and Proceeds arising from, or relating to, the
properties and other interests described in Exhibit A, and
(g) any and all liens and security interests in Hydrocarbons securing the
payment of proceeds from the sale of Hydrocarbons, including but not
limited to those liens and security interests provided for in AS
45.29.319;
together with any and all corrections or amendments to, or renewals,
extensions or ratifications of, or replacements or substitutions for, any
of the same, or any instrument relating thereto, and, to the extent
permitted by the terms of any instrument creating the same, all contracts,
options, nominee agreements, unitization or pooling agreements, operating
agreements and unit operating agreements, processing agreements, farm-in
agreements, farmout agreements, joint venture agreements, partnership
agreements (including mining partnerships), exploration agreements, bottom
hole agreements, dry hole agreements, support agreements, acreage
contribution agreements, surface use and surface damage agreements, net
profits agreements, production payment agreements, Hedging Agreements,
insurance policies, title materials and information, files, records,
writings, data bases, information, systems, logs, well cores, fluid
samples, production data and reports, well testing data and reports, maps,
seismic and geophysical, geological and chemical data and information,
interpretative and analytical reports of any kind or nature (including,
without limitation, reserve studies and reserve evaluations), computer
hardware and software and all documentation therefor or relating thereto
(including, without limitation, all licenses relating to or covering such
computer hardware, software and/or documentation), trade secrets,
trademarks, service marks and business names and the goodwill of the
business relating thereto, copyrights, copyright registrations, unpatented
inventions, patent applications and patents, rights-of-way, franchises,
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bonds, easements, surface leases, permits, licenses, tenements,
hereditaments, appurtenances, concessions, occupancy agreements,
privileges, development rights, condemnation awards, claims against third
parties, royalties, issues, profits, products and proceeds, whether now or
hereafter existing or arising, used or useful in connection with, covering,
relating to, or arising from or in connection with, any of the aforesaid
items (a) through (g), inclusive, in this granting clause mentioned, and
all other things of value and incident thereto (including, without
limitation, any and all liens, lien rights, security interests and other
properties, rights and interests) which Trustor might at any time have or
be entitled to,
all the aforesaid properties, rights and interests, together with any additions
thereto which may be subjected to the lien and security interest of this Deed of
Trust by means of supplements hereto, being hereinafter called the "Mortgaged
Properties".
Subject, however, to (i) the restrictions, exceptions, reservations, conditions,
limitations, interests and other matters, if any, set forth or referred to in
the specific descriptions of such properties and interests in Exhibit A
(including all presently existing royalties, overriding royalties, payments out
of production and other burdens which are referred to in Exhibit A), (ii) the
assignment of production contained in Article III hereof, but only insofar and
so long as said assignment of production is not inoperative under the provisions
of Section 3.7 hereof, and (iii) the condition that none of the Trustee, the
Agent, or any of the other Secured Parties shall be liable in any respect for
the performance of any covenant or obligation (including without limitation
measures required to comply with Environmental Laws) of Trustor in respect of
the Mortgaged Properties.
TO HAVE AND TO HOLD (a) the Deed of Trust Mortgaged Properties unto the Trustee
for the benefit of the Agent, for itself and as agent for the Secured Parties,
and (b) the Other Mortgaged Properties unto the Agent, for itself and as agent
for the Secured Parties, forever to secure the payment of the Secured
Obligations and to secure the performance of the obligations of Trustor herein
contained. The Mortgaged Properties are to remain so specially mortgaged,
affected and hypothecated unto and in favor of the Agent to secure payment of
the Secured Obligations (including the performance of the obligations of Trustor
herein contained) until full and final payment or discharge of the Secured
Obligations.
Trustor, in consideration of the premises and to induce the Lenders to make the
Loans to Trustor, hereby covenants and agrees with Trustee and the Agent, for
itself and for the Secured Parties, as follows:
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ARTICLE 1
Secured Obligations
1.1 Obligations Secured. The following items of indebtedness are secured hereby:
A. All Obligations (including all future advances, if any, to be made
under the Credit Agreement by the Lenders), and all other obligations
and liabilities of Trustor and the other Loan Parties under the Credit
Agreement and the other Loan Documents;
B. Any sums advanced or expenses or costs incurred by the Trustee, the
Agent or any of the Secured Parties (or any receiver appointed
hereunder) which are made or incurred pursuant to, or permitted by,
the terms hereof, plus interest thereon at the rate herein specified
or otherwise agreed upon, from the date of the advances or the
incurring of such expenses or costs until reimbursed;
C. Any and all other indebtedness of Trustor to any Lender or any
Affiliate of such Lender now or hereafter owing whether direct or
indirect, primary or secondary, fixed or absolute or contingent, joint
or several, regardless of how evidenced or arising including, without
limitation, all Hedging Obligations arising under Hedging Agreements;
and
D. Any extensions, refinancings, modifications or renewals of all such
indebtedness described in subparagraphs (A) through (C) above, whether
or not Trustor executes any extension agreement or renewal instrument.
1.2 Secured Obligations Defined. All the above obligations are hereinafter
collectively referred to as the "Secured Obligations".
1.3 Limit on Principal Amount of Secured Obligations Secured. Notwithstanding
any provision of this Deed of Trust to the contrary, but subject to the
Intercreditor Agreement, the maximum principal amount of the Secured Obligations
secured hereby (including without limitation as a mortgage and as a collateral
assignment) shall not exceed $600,000,000 (including without limitation any
expenses, advances or costs incurred by Lenders). The maturity of the Secured
Obligations at the time of execution of this Deed of Trust is no later than
February 24, 2012.
1.4 Subordination of Deed of Trust. The lien of this Deed of Trust shall be
subordinate to any sale, conveyance, assignment, mortgage, or other disposition
of an ORRI. The Deed of Trust and the indebtedness secured by the Deed of Trust
is and shall be subordinated in all respects to any ORRI granted to , and it is
agreed that the ORRI shall be and remain, at all times, prior and superior to
the lien of this Deed of Trust.
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ARTICLE II
Particular Covenants and Warranties of Trustor
2.1 Certain Representations and Warranties. Trustor represents and warrants to
the Trustee, the Agent and the other Secured Parties that, as of the date of
this Mortgage, (a) the Oil and Gas Properties described in Exhibit A hereto are
valid, subsisting leases, superior and paramount to all other Oil and Gas
Properties respecting the properties to which they pertain except where the
failure hereunder could not reasonably be expected to have a Material Adverse
Effect, (b) all producing xxxxx located on the lands described in Exhibit A have
been drilled, operated and produced in conformity with all applicable laws,
statutes, rules or regulations, except where the failure hereunder could not
reasonably be expected to have a Material Adverse Effect, and are subject to no
penalties on account of past production which could reasonably be expected to
have a Material Adverse Effect, and such xxxxx are in fact bottomed under and
are producing from, and the well bores are wholly within, the lands described in
Exhibit A except where the failure hereunder could not reasonably be expected to
have a Material Adverse Effect, (c) the Mortgaged Properties are free from all
encumbrances or liens whatsoever, except as may be specifically set forth in
Exhibit A or as permitted by Section 6.02 of the Credit Agreement, and (d) the
cover page to this Deed of Trust lists the correct legal name of Trustor and
Trustor is not now known by any trade name. Trustor will warrant and forever
defend the Mortgaged Properties unto the Trustee or the Agent, as applicable,
against every person whomsoever lawfully claiming the same or any part thereof
(subject, however, to The Liens permitted by Section 6.02 of the Credit
Agreement), and Trustor will maintain and preserve the Lien hereby created so
long as any of the Secured Obligations remains unpaid.
2.2 Operation of the Mortgaged Properties. So long as the Secured Obligations or
any part thereof remains unpaid, and whether or not Trustor is the operator of
the Mortgaged Properties, Trustor shall, at Trustor's own expense:
A. Cause to be paid, promptly as and when due and payable, all rentals
and royalties (including shut-in royalties) payable in respect of the
Mortgaged Properties, including payments into suspense accounts if
appropriate, and all expenses incurred in or arising from the
operation or development of the Mortgaged Properties except for those
amounts being contested by Trustor in good faith in such manner as not
to jeopardize the rights of the Trustee, the Agent and the other
Secured Parties in and to the Mortgaged Properties; and
B. Notwithstanding anything in this Section to the contrary, as to any of
the Mortgaged Properties which is a working interest operated by a
person other than Trustor, Trustor agrees to take all such action and
to exercise all rights as are commercially feasible and reasonably
available to Trustor (including, but not limited to, all rights of
Trustor under any operating agreement) to cause the operator of such
property to comply with the covenants and agreements contained herein.
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2.3 Recording, etc. Trustor will promptly, and at Trustor's expense, record,
register, deposit and file this Deed of Trust and every other instrument in
addition or supplemental hereto in such offices and places and at such times and
as often as may be reasonably necessary to preserve, protect and renew the Lien
hereof as a lien on and prior perfected security interest to all other security
interests other than the Lien granted pursuant to the First Lien Credit
Agreement, subject to Liens permitted by Section 6.02 of the Credit Agreement,
in real or personal property, as the case may be, and the rights and remedies of
the Trustee, the Agent and the other Secured Parties, and otherwise will do and
observe all things or matters reasonably necessary or expedient to be done or
observed by reason of any law or regulation of any state or of the United States
of America or of any other Governmental Authority, for the purpose of
effectively creating, maintaining and preserving the Lien on and in the
Mortgaged Properties.
ARTICLE III
Assignment of Production and Leases
3.1 Assignment. As further security for the payment of the Secured Obligations,
Trustor hereby transfers, assigns, warrants and conveys to the Agent, for itself
and as agent for the Secured Parties, effective as of the Closing Date, at 7:00
A.M., local time, all Hydrocarbons which are thereafter produced from and which
accrue to the Mortgaged Properties (the "Production"), and all Proceeds
therefrom. During the continuance of an Event of Default, Trustor authorizes and
empowers the Agent to demand, collect, receive and receipt for all Production
and Proceeds. TRUSTOR IRREVOCABLY APPOINTS THE AGENT AS THE AGENT AND
ATTORNEY-IN-FACT OF TRUSTOR, FOR THE PURPOSE OF EXECUTING ANY TRANSFER ORDERS,
PAYMENT ORDERS, DIVISION ORDERS, RECEIPTS, RELEASES OR OTHER INSTRUMENTS
(COLLECTIVELY, "RECEIPTS") THAT THE AGENT DEEMS REASONABLY NECESSARY IN ORDER
FOR THE AGENT TO DEMAND, COLLECT, RECEIVE AND RECEIPT FOR PRODUCTION AND
PROCEEDS DURING THE CONTINUANCE OF AN EVENT OF DEFAULT. In addition, Trustor
agrees that, upon the Agent's request, Trustor shall promptly execute and
deliver to the Agent such Receipts as the Agent may deem reasonably necessary in
connection with the payment and delivery directly to the Agent of all Production
and Proceeds and to effectuate the purposes of this paragraph. All parties
producing, purchasing or receiving any Production or having Production or
Proceeds in their possession for which they or others are accountable to the
Agent by virtue of the provisions of this Article III are authorized and
directed to treat and regard the Agent as the assignee and transferee of Trustor
and entitled in Trustor's place and stead to receive Production and Proceeds;
and said parties and each of them shall be fully protected in so treating and
regarding the Agent and shall be under no obligation to see to the application
by the Agent of any Production or Proceeds received by it. Notwithstanding the
foregoing, the Agent, for itself and as agent for the Secured Parties, has
agreed not to exercise its right to directly receive delivery of Production and
payment of Proceeds immediately. Rather, each party producing, purchasing or
receiving Production may continue to make such deliveries or payments to Trustor
until such time as such party has received notice from the Agent that an
Page 12
Event of Default has occurred and is continuing and that such party is directed
to make delivery or payment directly to the Agent.
3.2 Assignment of Leases. Trustor absolutely and unconditionally assigns,
transfers, sets over and conveys to Beneficiary the Mortgaged Properties,
including, without limitation, the Oil and Gas Properties and all existing and
future leases, subleases, tenancies, subtenancies, licenses, contracts, contract
rights, and occupancy and all other agreements, whether or not in writing,
affecting the use, enjoyment or occupancy of the Mortgaged Properties, together
with any extension, renewal, or replacement of the same. This assignment
includes all present and future leases and present and future agreements and is
effective without further or supplemental assignment, except as may be required
by any Governmental Authority.
3.3 License to Collect. Beneficiary hereby grants to Trustor an exclusive
license, revocable upon occurrence of an Event of Default, to possess, use, and
enjoy the Mortgaged Properties and to coiled and retain the proceeds of and from
the Mortgaged Properties, unless and until an Event of Default occurs.
3.4 Application of Proceeds. All payments received by the Agent pursuant to this
Article III shall be applied in the manner set forth in Section 4.01 of the
Intercreditor Agreement.
3.5 No Liability of the Agent in Collecting. The Agent is hereby absolved from
all liability for failure to enforce collection of any proceeds so assigned (and
no such failure shall be deemed to be a waiver of any right of the Agent under
this Article) and from all other responsibility in connection therewith, except
the responsibility to account to Trustor for funds actually received.
3.6 Assignment Not a Restriction on the Agent's Rights. Nothing herein contained
shall detract from or limit the absolute obligation of Trustor to make payment
of the Secured Obligations regardless of whether the proceeds assigned by this
Article would be sufficient to pay the same, and the rights under this Article
shall be in addition to all other security now or hereafter existing to secure
the payment of the Secured Obligations.
3.7 Status of Assignment. Notwithstanding the other provisions of this Article
and in addition to the other rights hereunder, the Trustee, the Agent or any
receiver appointed in judicial proceedings for the enforcement of this Deed of
Trust shall have the right to receive all of the Production and Proceeds after
the Secured Obligations have been declared due and payable and to apply all of
said proceeds as provided in Section 3.4 hereof. Upon any sale of the Mortgaged
Properties or any part thereof pursuant to Article V, the Hydrocarbons
thereafter produced from the property so sold, and the proceeds therefrom, shall
be included in such sale and shall pass to the purchaser free and clear of the
assignment contained in this Article.
3.8 Indemnity. Trustor shall indemnify the Trustee, the Agent and the other
Secured Parties, and all of the Related Parties of any of the foregoing Persons
(each such Person being called an "Indemnitee") against, and hold each
Indemnitee harmless from, any and all losses, claims,
Page 13
damages, liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of, (i) the
assertion, either before or after the payment in full of the Secured
Obligations, that any Indemnitee received Production or Proceeds claimed by
third persons, or (ii) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or wilful
misconduct of such Indemnitee (IT BEING UNDERSTOOD THAT IT IS THE INTENTION OF
THE PARTIES HERETO THAT, EXCEPT AS PROVIDED BY LAW TO THE CONTRARY, EACH OF THE
AGENTS BE INDEMNIFIED IN THE CASE OF ITS OWN NEGLIGENCE (OTHER THAN GROSS
NEGLIGENCE), REGARDLESS OF WHETHER SUCH NEGLIGENCE IS SOLE OR CONTRIBUTORY,
ACTIVE OR PASSIVE, IMPUTED, JOINT OR TECHNICAL). All amounts due under this
Section 3.8 shall be payable not later than thirty (30) days after written
demand therefor. The obligations of Trustor as herein set forth in this Section
3.8 shall survive the release, termination, foreclosure or assignment of this
Deed of Trust or any sale hereunder.
3.9 Rights Under Statutes. Trustor hereby appoints the Agent as its
attorney-in-fact to pursue any and all lien rights of Trustor to liens and
security interests in the Mortgaged Properties securing payment of Production
and Proceeds attributable to the Mortgaged Properties, including, but not
limited to, those liens and security interests provided for by AS 45.29.319.
Trustor further hereby assigns to the Agent any and all such liens, security
interests, financing statements, or similar interests of Trustor attributable to
its interests in the Mortgaged Properties and Production and Proceeds therefrom
arising under or created by said statutory provision, judicial decision, or
otherwise.
ARTICLE IV
Events of Default
4.1 Events of Default Hereunder. The occurrence of an Event of Default under the
terms and provisions of the Credit Agreement and the continuance of such Event
of Default for the applicable period of grace, if any, shall be an "Event of
Default" hereunder.
Page 14
ARTICLE V
Enforcement of the Security
5.1 Power of Sale and Foreclosure of Real Property Constituting a Part of the
Mortgaged Properties.
During the continuation of an Event of Default, the Trustee shall have the
right and power to sell, to the extent permitted by law, at one or more sales,
as an entirety or in parcels, as it may elect, the real property constituting a
part of the Deed of Trust Mortgaged Properties, at such place or places and
otherwise in such manner and upon such notice as may be required by law, or, in
the absence of any such requirement, as the Trustee may deem appropriate, and to
make conveyance to the purchaser or purchasers, without any covenant or
warranty, express or implied. The Trustee may postpone the sale of all or any
portion of such real property by public announcement at the time and place of
such sale, and from time to time thereafter may further postpone such sale by
public announcement made at the time of sale fixed by the preceding
postponement. The right of sale hereunder shall not be exhausted by one or any
sale, and the Trustee may make other and successive sales until all of the trust
estate be legally sold.
Notice of any such sale shall be given as required by law, after the
completion of which the Trustee, without demand on Trustor, shall sell said
portion of the Deed of Trust Mortgaged Properties in Anchorage, Alaska (or at
such location as may be permitted by law if Anchorage is not permitted to be the
point of sale), at the place provided by law at the time fixed by the Trustee in
said notice of sale, either as a whole or in separate parcels and in such order
as it may determine, at public auction to the highest and best cash bidder. In
conformity with Section 5.6 hereof, the Agent shall have the right to make an
offset bid without cash in an amount not in excess of the balance owed by
Trustor at the time of the sale, including any sums expended by the Agent and
the Trustee under this Deed of Trust with interest, attorneys' fees, and costs
of sale. The Trustee may postpone sale of all or any portion of said property by
public announcement at such time and place of sale and from time to time
thereafter may postpone such sale by public announcement at the time fixed by
the preceding postponement. The Trustee shall deliver to the purchaser its deed
conveying the property so sold, but without any covenant or warranty, express or
implied. After deducting all allowable costs, fees, and expenses of the Trustee
in connection with the sale, the Trustee shall apply the proceeds of sale as set
forth in Section 5.9 hereof. Nothing contained herein shall be construed to
limit the right of the Agent to foreclose this Deed of Trust by judicial action.
The Agent shall further be entitled to bring an action upon any or all of the
Secured Obligations without attempting to foreclose this Deed of Trust either by
judicial action or by exercise of the power of sale.
5.2 Rights of the Trustee and the Agent with Respect to Personal Property
Constituting a Part of the Mortgaged Properties. During the continuation of an
Event of Default, the Agent will have all rights and remedies granted by law,
and particularly by the Uniform Commercial Code or similar statute in force in
any other state to the extent the same is applicable law, including, but not
limited to, the right to take possession of all personal property constituting a
part of the
Page 15
Mortgaged Properties and for this purpose the Agent may enter upon any premises
on which any or all of such personal property is situated and take possession of
and operate such personal property (or any portion thereof) or remove it
therefrom. The Agent may require Trustor to assemble such personal property to
the extent feasible and make it available to the Agent at a place to be
designated by the Agent which is reasonably convenient to all parties. Unless
such personal property is perishable or threatens to decline speedily in value
or is of a type customarily sold on a recognized market, the Agent will give
Trustor reasonable notice of the time and place of any public sale or of the
time after which any private sale or other disposition of such personal property
is to be made. This requirement of sending reasonable notice will be met if the
notice is mailed by first-class mail, postage prepaid, to Trustor at the address
shown below the signatures at the end of this Deed of Trust (or at such other
address for notice hereafter designated by Trustor in conformity with the Credit
Agreement) at least ten (10) days before the time of the sale or disposition.
5.3 Rights of the Trustee with Respect to Fixtures Constituting a Part of the
Mortgaged Properties. During the continuation of an Event of Default, the
Trustee or the Agent, as applicable, may elect to treat the fixtures
constituting a part of the Mortgaged Properties as either real property
collateral or personal property collateral and then proceed to exercise such
rights as apply to such type of collateral.
5.4 Judicial Proceedings. The Trustee, with respect to the Deed of Trust
Mortgaged Properties, and the Agent, with respect to the Other Mortgaged
Properties, in lieu of or in addition to exercising any power of sale herein
given, may proceed by a suit or suits in equity or at law, whether for a
foreclosure hereunder, or for the sale of the Mortgaged Properties, or for the
specific performance of any covenant or agreement herein contained or in aid of
the execution of any power herein granted, or for the appointment of a receiver
pending any foreclosure hereunder or the sale of the Mortgaged Properties, or
for the enforcement of any other appropriate legal or equitable remedy.
5.5 Possession of the Mortgaged Properties. It shall not be necessary for the
Trustee or the Agent to have physically present or constructively in their
possession at any sale held by the Trustee, the Agent, or by any court, receiver
or public officer any of the Mortgaged Properties; and Trustor shall deliver to
the purchasers at such sale on the date of sale the Mortgaged Properties
purchased by such purchasers at such sale, and if it should be impossible or
impracticable for any of such purchasers to take actual delivery of the
Mortgaged Properties, then the title and right of possession to the Mortgaged
Properties shall pass to such purchaser at such sale as completely as if the
same had been actually present and delivered.
5.6 Certain Aspects of a Sale. The Agent and any Secured Party shall have the
right to become the purchaser at any sale made pursuant to this Article V, but
only the Agent shall have the right to credit upon the amount of the bid made
therefor the amount payable to the Secured Parties out of the net proceeds of
such sale. To the extent permitted by applicable law, recitals contained in any
conveyance made to any purchaser at any sale made hereunder shall
Page 16
conclusively establish the truth and accuracy of the matters therein stated,
including, without limiting the generality of the foregoing, nonpayment of the
Secured Obligations, after the same have become due and payable, advertisement
and conduct of such sale in the manner provided herein or appointment of any
successor Trustee hereunder.
5.7 Receipt to Purchaser. Upon any sale, whether made under the power of sale
herein granted and conferred or by virtue of judicial proceedings, the receipt
of the Trustee, or of the officer making sale under judicial proceedings, shall
be sufficient discharge to the purchaser or purchasers at any sale for his or
their purchase money, and such purchaser or purchasers, or his or their assigns
or personal representatives, shall not, after paying such purchase money and
receiving such receipt of the Trustee or of such officer therefor, be obliged to
see to the application of such purchase money, or be in anywise answerable for
any loss, misapplication or nonapplication thereof.
5.8 Effect of Sale. Any sale or sales of the Mortgaged Properties, whether under
the power of sale herein granted and conferred or by virtue of judicial
proceedings, shall operate to divest all right, title, interest, claim and
demand whatsoever either at law or in equity, of Trustor of, in and to the
premises and the property sold, and shall be a perpetual bar, both at law and in
equity, against Trustor, and Trustor's successors or assigns, and against any
and all persons claiming or who shall thereafter claim all or any of the
property sold from, through or under Trustor or Trustor's successors or assigns.
Nevertheless, Trustor, if requested by the Agent or the Trustee to do so, shall
join in the execution and delivery of all proper conveyances, assignments and
transfers of the properties so sold.
5.9 Application of Proceeds. The proceeds of any sale of the Mortgaged
Properties, or any part thereof, whether under the power of sale herein granted
and conferred or by virtue of judicial proceedings, shall be applied in the
manner set forth in Section 4.01 of the Intercreditor Agreement.
5.10 Trustor's Waiver of Appraisement, Marshaling and Other Rights. Trustor
agrees, to the full extent that Trustor may lawfully so agree, that Trustor will
not at any time insist upon or plead or in any manner whatever claim the benefit
of any appraisement, valuation, stay, extension or redemption law now or
hereafter in force, in order to prevent or hinder the enforcement or foreclosure
of this Deed of Trust or the absolute sale of the Mortgaged Properties or the
possession thereof by any purchaser at any sale made pursuant to any provision
hereof, or pursuant to the decree of any court of competent jurisdiction;
Trustor, for Trustor and all who may claim through or under Trustor, so far as
Trustor or those claiming through or under Trustor now or hereafter lawfully
may, hereby waives the benefit of all such laws. Trustor, for Trustor and all
who may claim through or under Trustor, waives, to the extent that Trustor may
lawfully do so, any and all right to have the Mortgaged Properties marshaled
upon any foreclosure of the lien hereof, or sold in inverse order of alienation,
and agrees that the Trustee, the Agent or any court having jurisdiction to
foreclose such lien may sell the Mortgaged Properties as an entirety. Trustor,
for Trustor and all who may claim through or under Trustor, further waives, to
the full
Page 17
extent that Trustor may lawfully do so, any requirement for posting a receiver's
bond or replevin bond or other similar type of bond if the Trustee or the Agent
commence an action for appointment of a receiver or an action for replevin to
recover possession of any of the Mortgaged Properties. If any law in this
paragraph referred to and now in force, of which Trustor or Trustor's successor
or successors might take advantage despite the provisions hereof, shall
hereafter be repealed or cease to be in force, such law shall not thereafter be
deemed to constitute any part of the contract herein contained or to preclude
the operation or application of the provisions of this paragraph.
5.11 Costs and Expenses. All costs and expenses (including attorneys' fees)
incurred by the Trustee, the Agent or the other Secured Parties in protecting
and enforcing their rights hereunder shall constitute a demand obligation owing
by Trustor to the party incurring such costs and expenses and shall draw
interest at the applicable rate specified in the Credit Agreement until paid,
all of which shall constitute a portion of the Secured Obligations.
5.12 Operation of the Mortgaged Properties by the Trustee or the Agent. Upon the
occurrence of an Event of Default and in addition to all other rights herein
conferred on the Trustee and the Agent, the Trustee, with respect to the Deed of
Trust Mortgaged Properties, or the Agent, with respect to the Other Mortgaged
Properties, (or any person, firm or corporation designated by the Trustee or the
Agent) shall have the right and power, but shall not be obligated, to enter upon
and take possession of any of the Mortgaged Properties, and to exclude Trustor,
and Trustor's agents or servants, wholly therefrom, and to hold, use,
administer, manage and operate the same to the extent that Trustor shall be at
the time entitled and in its place and stead. The Trustee or the Agent, or any
person, firm or corporation designated by the Trustee or by the Agent, may
operate the same without any liability to Trustor in connection with such
operations, except to use ordinary care in the operation of such properties, and
the Trustee or the Agent or any person, firm or corporation designated by the
Trustee or the Agent, shall have the right to collect, receive and receipt for
all Hydrocarbons produced and sold from said properties, to make repairs,
purchase machinery and equipment, conduct work-over operations, drill additional
xxxxx and to exercise every power, right and privilege of Trustor with respect
to the Mortgaged Properties. When and if the expenses of such operation and
development (including costs of unsuccessful work- over operations or additional
xxxxx) have been paid and the Secured Obligations paid, said properties shall,
if there has been no sale or foreclosure, be returned to Trustor.
ARTICLE VI
Miscellaneous Provisions
6.1 Pooling and Unitization. Trustor shall have the right, and is hereby
authorized, to pool or unitize all or any part of any tract of land described in
Exhibit A, insofar as relates to the Mortgaged Properties, with adjacent lands,
leaseholds and other interests, when, in the reasonable judgment of Trustor, it
is necessary, advisable or desirable to do so in order to form a drilling unit
to facilitate the orderly development of that part of the Mortgaged Properties
affected thereby, or to comply with the requirements of any law or governmental
order or
Page 18
regulation relating to the spacing of xxxxx or proration of the production
therefrom; provided, however, that the Hydrocarbons produced from any unit so
formed shall be allocated among the separately owned tracts or interests
comprising the unit in a uniform manner consistently applied. Any unit so formed
may relate to one or more zones or horizons, and a unit formed for a particular
zone or horizon need not conform in area to any other unit relating to a
different zone or horizon, and a unit formed for the production of oil need not
conform in area with any unit formed for the production of gas. The interest of
Trustor in any such unit attributable to the Mortgaged Properties (or any part
thereof) included therein shall become a part of the Mortgaged Properties and
shall be subject to the lien hereof in the same manner and with the same effect
as though such unit and the interest of Trustor therein were specifically
described in Exhibit A.
6.2 Successor Trustee. Any Trustee may resign in writing addressed to the Agent
or may be removed at any time with or without cause by an instrument in writing
duly executed by the Agent. In case of the death, resignation or removal of a
Trustee, one or more successor Trustee may be appointed by the Agent by
instrument of substitution complying with any applicable requirements of law,
and in the absence of any such requirement without formality other than
appointment and designation in writing. Such appointment and designation shall
be full evidence of the right and authority to make the same and of all facts
therein recited, and upon the making of any such appointment and designation
this conveyance shall vest in the named successor Trustee, all the estate and
title of the prior Trustee in the Mortgaged Properties, and he or they shall
thereupon succeed to all the rights, powers, privileges, immunities and duties
hereby conferred upon the prior Trustee. All references herein to the Trustee
shall be deemed to refer to the Trustee from time to time acting hereunder.
6.3 Actions or Advances by the Agent, the Secured Parties or the Trustee. Each
and every covenant herein contained shall be performed and kept by Trustor
solely at Trustor's expense. If Trustor shall fail to perform or keep any of the
covenants of whatsoever kind or nature contained in this Deed of Trust, the
Agent, the Trustee, any Secured Party or any receiver appointed hereunder, may,
but shall not be obligated to, take action and/or make advances to perform the
same in Trustor's behalf, and Trustor hereby agrees to repay the reasonable
expense of such action and such advances upon demand plus interest at the
applicable rate specified in the Credit Agreement until paid. No such advance or
action by the Agent, the Trustee, any Secured Party or any receiver appointed
hereunder shall be deemed to relieve Trustor from any default hereunder.
6.4 The Mortgaged Properties to Revert; Release of this Deed of Trust. If the
Secured Obligations shall be paid in full in cash and all of the Commitments
have been terminated, then this Deed of Trust shall terminate and, to the extent
applicable under local law, all of the Mortgaged Properties shall revert to
Trustor and the entire estate, right, title and interest of the Trustee and the
Agent and the other Secured Parties granted hereunder shall thereupon cease; and
the Trustee and the Agent (for itself and as agent for the Secured Parties) in
such case shall, upon the request of Trustor and at Trustor's cost and expense,
deliver to Trustor proper instruments in recordable form acknowledging
satisfaction of this Deed of Trust.
Page 19
6.5 Renewals, Amendments and Other Security. Renewals and extensions of the
Secured Obligations may be given at any time and amendments may be made to
agreements (other than this Deed of Trust) relating to any part of such Secured
Obligations or the Mortgaged Properties and the Trustee and the Secured Parties
may take or may now hold other security for the Secured Obligations, all without
notice to or consent of Trustor. The Trustee or the Secured Parties may resort
first to such other security or any part thereof or first to the security herein
given or any part thereof, or from time to time to either or both, even to the
partial or complete abandonment of either security, and such action shall not be
a waiver of any rights conferred by this Deed of Trust, which shall continue as
a Lien upon and prior perfected security interest, subject to Liens permitted by
Section 6.02 of the Credit Agreement, in the Mortgaged Properties not expressly
released until the Secured Obligations are fully paid.
6.6 Deed of Trust as Assignment, etc. This Deed of Trust shall be deemed to be
and may be enforced from time to time as an assignment, chattel mortgage,
contract, deed of trust, financing statement, real estate mortgage, or security
agreement, and from time to time as any one or more thereof.
6.7 Unenforceable or Inapplicable Provisions. 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 invalidity of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of any such provision in any other jurisdiction. Any reference
herein contained to a statute or law of a state in which no part of the
Mortgaged Properties is situated shall be deemed inapplicable to, and not used
in, the interpretation hereof.
6.8 Rights Cumulative. Each and every right, power and remedy herein given to
the Trustee, the Agent or the other Secured Parties under this Deed of Trust
shall be cumulative and not exclusive; and each and every right, power 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, the Agent or the other Secured Parties, as the case may be, and the
exercise, or the beginning of the exercise, of any such right, power or remedy
shall not be deemed a waiver of the right to exercise, at the same time or
thereafter, any other right, power or remedy. No delay or omission by the
Trustee, the Agent or the other Secured Parties in the exercise of any right,
power or remedy shall impair any such right, power or remedy or operate as a
waiver thereof or of any other right, power or remedy then or thereafter
existing.
6.9 Waiver by the Trustee. Any and all covenants in this Deed of Trust may from
time to time be waived by instrument in writing signed by the Trustee and the
Agent to such extent and in such manner as the Required Lenders may desire, but
no such waiver shall ever affect or impair either the Trustee's, the Agent's or
the other Secured Parties' rights or liens or security interests hereunder,
except to the extent specifically stated in such written instrument.
Page 20
6.10 Action by Individual Trustee. Any Trustee (including any successor Trustee)
from time to time serving hereunder shall have the absolute right, acting
individually, to take any action and to exercise any right, remedy, power,
privilege or authority conferred upon Trustee.
6.11 No Partnership. Nothing contained in this Deed of Trust is intended to, or
shall be construed as, creating to any extent and in any manner whatsoever, any
partnership, joint venture, or association among Trustor, the Trustee, the
Agent, the other Secured Parties and their respective Affiliates, or in any way
as to make the Agent, the other Secured Parties or the Trustee co-principals
with Trustor with reference to the Mortgaged Properties, and any inferences to
the contrary are hereby expressly negated.
6.12 Successors and Assigns. This Deed of Trust is binding upon Trustor,
Trustor's successors and assigns, and shall inure to the benefit of the Trustee,
its or his successors, and the Agent and the other Secured Parties and their
respective successors and assigns, and the provisions hereof shall likewise be
covenants running with the land.
6.13 Article and Section Headings. The article and section headings in this Deed
of Trust are inserted for convenience of reference and shall not be considered a
part of this Deed of Trust or used in its interpretation.
6.14 Execution in Counterparts. This Deed of Trust may be executed in any number
of counterparts, each of which shall for all purposes be deemed to be an
original and all of which are identical, except that, to facilitate recordation
or filing, in any particular counterpart portions of Exhibit A hereto which
describe properties situated in recording districts other than the recording
district in which such counterpart is to be recorded or filed may have been
omitted. Complete copies of this Deed of Trust containing the entire Exhibit A
have been retained by Trustor and the Agent.
6.15 Special Filing as Financing Statement. This Deed of Trust shall likewise be
a Security Agreement and a Financing Statement. This Deed of Trust shall be
filed for record, among other places, in the real estate records of each
recording district in which any portion of the real property covered by the Oil
and Gas Properties described in Exhibit A hereto is situated, and, when filed
for record in such recording districts shall be effective as a financing
statement covering (1) fixtures located or to become located on the Oil and Gas
Properties and (2) oil, gas and other minerals extracted from the Oil and Gas
Properties (and accounts arising from the sale of said oil, gas and other
minerals) at the wellheads of xxxxx located now or hereafter on the lands
described in Exhibit A hereto. At the option of the Agent, a carbon,
photographic or other reproduction of this Deed of Trust or of any financing
statement covering the Mortgaged Properties or any portion thereof shall be
sufficient as a financing statement and may be filed as such.
6.16 Notices. Except as otherwise expressly provided herein, any notice,
request, demand or other instrument which may be required or permitted to be
given or served upon Trustor shall be
Page 21
sufficiently given when given to Trustor in care of Trustor in accordance with
Section 9.01 of the Credit Agreement.
6.17 Reliance. Notwithstanding any reference herein to the Credit Agreement or
any Hedging Agreement, no party shall have any obligation to inquire into the
terms or conditions of any such documents and all parties shall be fully
authorized to rely upon any statement, certificate, or affidavit of the Agent or
any future holder of any portion of the indebtedness evidenced by the Credit
Agreement and the other Loan Documents as to the occurrence of any event such as
the occurrence of any Event of Default.
6.18 No Liability for Trustee. THE TRUSTEE SHALL NOT BE LIABLE FOR ANY ERROR OF
JUDGMENT OR ACT DONE BY THE TRUSTEE IN GOOD FAITH, OR BE OTHERWISE RESPONSIBLE
OR ACCOUNTABLE UNDER ANY CIRCUMSTANCES WHATSOEVER (INCLUDING, WITHOUT
LIMITATION, THE TRUSTEE'S NEGLIGENCE), EXCEPT FOR THE TRUSTEE'S GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT. 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 them hereunder, believed by them in good faith to be
genuine. 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 them hereunder.
6.19 GOVERNING LAW. THIS INSTRUMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF ALASKA.
6.20 NO UNWRITTEN ORAL AGREEMENTS. THIS INSTRUMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES 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.
6.21 Intercreditor Agreement. Notwithstanding anything herein to the contrary,
the lien and security interest granted to the Agent, for the benefit of the
Secured Parties, pursuant to this Deed of Trust and the exercise of any right or
remedy by the Agent and the other Secured Parties hereunder are subject to the
provisions of the Intercreditor Agreement. In the event of any conflict or
inconsistency between the provisions of the Intercreditor Agreement and this
Deed of Trust, the provisions of the Intercreditor Agreement shall control.
6.22 Acceptance. The Agent has not signed this Deed of Trust but its acceptance,
on behalf of the Secured Parties, is evidenced by the execution and delivery of
the Credit Agreement.
Page 22
REMAINDER OF XXXX INTENTIONALLY LEFT BLANK
SIGNATURES APPEAR ON SUBSEQUENT PAGES
Page 23
IN WITNESS WHEREOF, this Deed of Trust is executed and delivered on the date
first set forth above.
PACIFIC ENERGY ALASKA OPERATING LLC
By: /s/ Xxxxxx Xxxxx
------------------------------------
Name:
Title:
STATE OF COLORADO )
) ss.
COUNTY OF DENVER )
THIS CERTIFIES that on the 24th day of August, 2007, the foregoing instrument
was acknowledged before me by Xxxxxx Xxxxx, President of PACIFIC ENERGY ALASKA
OPERATING LLC, a Delaware limited liability company, on behalf of said company.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal the day and
year first above written.
/s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------
Notary Public in and for Colorado
My commission expires 5-11-2008
[SEAL]
Xxxxxxx X. Xxxxxxxxx
Notary Public
State of Colorado
My Commission Expires:
May 11, 2008
DEED OF TRUST
Counterpart Signature Page
The name and mailing address of Trustor is:
PACIFIC ENERGY ALASKA OPERATING, LLC
Attention: Xxxxxx Xxxxx, President
000 Xxxx Xxxxx Xxxx., Xxxxx 0000
Xxxx Xxxxx, XX 00000
Facsimile: (562)-628-l536
with a copy to:
Xxxxx & Xxxxxx, LLP
Attention: Xxxxx X. X'Xxxx, Esq.
000 Xxxxx Xxxx., 00xx Xxxxx
Xxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
The name and mailing address of the Trustee is:
FIRST AMERICAN TITLE INSURANCE COMPANY
0000 X Xxxxxx
Xxxxxxxxx, XX 00000
The name and mailing address of the Agent is:
Silver Point Finance, LLC (Borrowings, Paydowns, Interest, Fees, Rate Settings)
0 Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxx Xxxxxxx
Phone: 000-000-0000
Fax: 000-000-0000
Email: xxxxxxx@xxxxxxxxxxxxxxxxxx.xxx
With a copy to:
Silver Point Finance, LLC (Financials, Credit Agreements, Amendments, Waivers,
Compliance)
0 Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxxxx
Phone: 000-000-0000
Fax: 000-000-0000
Email: xxxxxxxxxxx@xxxxxxxxxxxxxxxxxx.xxx
