EXHIBIT 10.64
SECOND LIEN GUARANTY
This Second Lien Guaranty (this "GUARANTY"), dated as of
August 24, 2007, is made by each of the undersigned executing this Agreement in
the capacity of a guarantor (the "GUARANTOR"), in favor of and for the benefit
of the Agents, each Lender and each other holder of any Loan Document Obligation
(each as defined in the Credit Agreement referenced below) (each, a
"BENEFICIARY" and, collectively, the "BENEFICIARIES"). Capitalized terms used
herein and not otherwise defined herein shall have the meaning assigned to such
terms in the Credit Agreement (as defined below).
RECITALS:
A. Pacific Energy Alaska Operating LLC, a limited liability
company organized under the laws of the State of Delaware (the "BORROWER"),
Pacific Energy Alaska Holdings, LLC, a limited liability company organized under
the laws of the State of Delaware ("HOLDINGS"), the lenders from time to time
party thereto (the "LENDERS"), Silver Point Finance, LLC, as administrative
agent for the Lenders and collateral agent for the Secured Parties (in such
capacities, together with its successors, the "AGENT"), and the other parties
thereto have entered into that certain Second Lien Credit Agreement, dated as of
the date hereof (as it may be amended, restated, supplemented or otherwise
modified, replaced, refinanced or refunded from time to time, the "CREDIT
AGREEMENT");
B. The Lenders have agreed to extend credit to the Borrower
pursuant to, and upon the terms and conditions specified in, the Credit
Agreement. The obligations of the Lenders to extend credit to the Borrower are
conditioned upon, among other things, the execution and delivery of this
Guaranty by each Guarantor. Each Guarantor is an affiliate of the Borrower, will
derive substantial direct and indirect benefits from the extension of credit to
the Borrower pursuant to the Credit Agreement and is willing to execute and
deliver this Agreement in order to induce the Lenders to extend such credit.
Accordingly, the parties hereto agree as follows:
SECTION 1. GUARANTY OF THE LOAN DOCUMENT OBLIGATIONS Subject to the
provisions of Section 2, each of the Guarantors jointly and severally hereby
irrevocably and unconditionally guarantees to Agent for the ratable benefit of
the Beneficiaries, the due and punctual payment in full of all Loan Document
Obligations when the same shall become due, whether at stated maturity, by
required prepayment, declaration, acceleration, demand or otherwise (including
amounts that would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. ss. 362(a)) (collectively, the
"GUARANTEED OBLIGATIONS").
SECTION 2. CONTRIBUTION BY GUARANTORS. All Guarantors desire to
allocate among themselves (collectively, the "CONTRIBUTING GUARANTORS"), in a
fair and equitable manner, their obligations arising under this Guaranty.
Accordingly, in the event any payment or distribution is made on any date by a
Guarantor (a "FUNDING GUARANTOR") under this Guaranty that exceeds its Fair
Share as of such date, such Funding Guarantor shall be entitled to a
contribution from each of the other Contributing Guarantors in the amount of
such other Contributing Guarantor's Fair Share Shortfall as of such date, with
the result that all such contributions will cause each Contributing Guarantor's
Aggregate Payments to equal its Fair Share as of such date. "FAIR SHARE" means,
with respect to a Contributing Guarantor as of any date of determination, an
amount equal to (a) the ratio of (i) the Fair Share Contribution Amount with
respect to such Contributing Guarantor to (ii) the aggregate of the Fair Share
Contribution Amounts with respect to all Contributing Guarantors multiplied by
(b) the aggregate amount paid or distributed on or before such date by all
Funding Guarantors under this Guaranty in respect of the obligations guaranteed
hereunder. "FAIR SHARE SHORTFALL" means, with respect to a Contributing
Guarantor as of any date of determination, the excess, if any, of the Fair Share
of such Contributing Guarantor over the Aggregate Payments of such Contributing
Guarantor. "FAIR SHARE CONTRIBUTION AMOUNT" means, with respect to a
Contributing Guarantor as of any date of determination, the maximum aggregate
amount of the obligations of such Contributing Guarantor under this Guaranty
that would not render its obligations hereunder or thereunder subject to
avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11
of the United States Code or any comparable applicable provisions of state law;
PROVIDED, solely for purposes of calculating the "Fair Share Contribution
Amount" with respect to any Contributing Guarantor for purposes of this Section
2, any assets or liabilities of such Contributing Guarantor arising by virtue of
any rights to subrogation, reimbursement or indemnification or any rights to or
obligations of contribution hereunder shall not be considered as assets or
liabilities of such Contributing Guarantor. "AGGREGATE PAYMENTS" means, with
respect to a Contributing Guarantor as of any date of determination, an amount
equal to (1) the aggregate amount of all payments and distributions made on or
before such date by such Contributing Guarantor in respect of this Guaranty
(including, without limitation, in respect of this 2), MINUS (2) the aggregate
amount of all payments received on or before such date by such Contributing
Guarantor from the other Contributing Guarantors as contributions under this
Section 2. The amounts payable as contributions hereunder shall be determined as
of the date on which the related payment or distribution is made by the
applicable Funding Guarantor. The allocation among Contributing Guarantors of
their obligations as set forth in this Section 2 shall not be construed in any
way to limit the liability of any Contributing Guarantor hereunder. Each
Guarantor is a third party beneficiary to the contribution agreement set forth
in this Section 2.
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SECTION 3. PAYMENT BY GUARANTORS. Subject to Section 2, Guarantors
hereby jointly and severally agree, in furtherance of the foregoing and not in
limitation of any other right which any Beneficiary may have at law or in equity
against any Guarantor by virtue hereof, that upon the failure of the Borrower to
pay any of the Guaranteed Obligations when and as the same shall become due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C. ss. 362(a)), Guarantors will upon demand pay, or cause to be paid, in
immediately available funds, to Agent for the ratable benefit of Beneficiaries,
an amount equal to the sum of the unpaid principal amount of all Guaranteed
Obligations then due as aforesaid, all accrued and unpaid interest on such
Guaranteed Obligations (including interest which, but for the Borrower's
becoming the subject of a case under the Bankruptcy Code, would have accrued on
such Guaranteed Obligations, whether or not a claim is allowed against The
Borrower for such interest in the related bankruptcy case) and all other
Guaranteed Obligations then owed to Beneficiaries as aforesaid.
SECTION 4. LIABILITY OF GUARANTORS ABSOLUTE. Each Guarantor agrees that
its obligations hereunder are irrevocable, absolute, independent and
unconditional and shall not be affected by any circumstance which constitutes a
legal or equitable discharge of a guarantor or surety other than payment in full
of the Guaranteed Obligations. In furtherance of the foregoing and without
limiting the generality thereof, each Guarantor agrees as follows:
(a) this Guaranty is a guaranty of payment when due and not of
collectibility. This Guaranty is a primary obligation of each Guarantor and not
merely a contract of surety;
(b) Agent may enforce this Guaranty upon the occurrence of an
Event of Default notwithstanding the existence of any dispute between the
Borrower and any Beneficiary with respect to the existence of such Event of
Default;
(c) the obligations of each Guarantor hereunder are
independent of the obligations of the Borrower and the obligations of any other
guarantor (including any other Guarantor) of the obligations of the Borrower,
and a separate action or actions may be brought and prosecuted against such
Guarantor whether or not any action is brought against the Borrower or any of
such other guarantors and whether or not the Borrower is joined in any such
action or actions;
(d) payment by any Guarantor of a portion, but not all, of the
Guaranteed Obligations shall in no way limit, affect, modify or abridge any
Guarantor's liability for any portion of the Guaranteed Obligations which has
not been paid. Without limiting the generality of the foregoing, if the Agent is
awarded a judgment in any suit brought to enforce any Guarantor's covenant to
pay a portion of the Guaranteed Obligations, such judgment shall not be deemed
to release such Guarantor from its covenant to pay the portion of the Guaranteed
Obligations that is not the subject of such suit, and such judgment shall not,
except to the extent satisfied by such Guarantor, limit, affect, modify or
abridge any other Guarantor's liability hereunder in respect of the Guaranteed
Obligations;
(e) any Beneficiary, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or enforceability
hereof or giving rise to any reduction, limitation, impairment, discharge or
termination of any Guarantor's liability hereunder, from time to time may (i)
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renew, extend, accelerate, increase the rate of interest on, or otherwise change
the time, place, manner or terms of payment of the Guaranteed Obligations; (ii)
settle, compromise, release or discharge, or accept or refuse any offer of
performance with respect to, or substitutions for, the Guaranteed Obligations or
any agreement relating thereto, or subordinate the payment of the same to the
payment of any other obligations; (iii) request and accept other guaranties of
the Guaranteed Obligations and take and hold security for the payment hereof or
the Guaranteed Obligations; (iv) release, surrender, exchange, substitute,
compromise, settle, rescind, waive, alter, subordinate or modify, with or
without consideration, any security for payment of the Guaranteed Obligations,
any other guaranties of the Guaranteed Obligations, or any other obligation of
any Person (including any other Guarantor) with respect to the Guaranteed
Obligations; (v) enforce and apply any security now or hereafter held by or for
the benefit of such Beneficiary in respect hereof or the Guaranteed Obligations
and direct the order or manner of sale thereof, or exercise any other right or
remedy that such Beneficiary may have against any such security, in each case as
such Beneficiary in its discretion may determine consistent herewith and any
applicable security agreement, including foreclosure on any such security
pursuant to one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable, and even though such action
operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of any Guarantor against the Borrower or any security for
the Guaranteed Obligations; and (vi) exercise any other rights available to it
under the Loan Documents; and
(f) this Guaranty and the obligations of Guarantors hereunder
shall be valid and enforceable and shall not be subject to any reduction,
limitation, impairment, discharge or termination for any reason (other than
payment in full of the Guaranteed Obligations), including the occurrence of any
of the following, whether or not any Guarantor shall have had notice or
knowledge of any of them: (i) any failure or omission to assert or enforce or
agreement or election not to assert or enforce, or the stay or enjoining, by
order of court, by operation of law or otherwise, of the exercise or enforcement
of, any claim or demand or any right, power or remedy (whether arising under the
Loans Documents, the Transactions, at law, in equity or otherwise) with respect
to the Guaranteed Obligations or any agreement relating thereto, or with respect
to any other guaranty of or security for the payment of the Guaranteed
Obligations; (ii) any rescission, waiver, amendment or modification of, or any
consent to departure from, any of the terms or provisions (including provisions
relating to events of default) hereof, any of the other Loans Documents, the
Transactions or any agreement or instrument executed pursuant thereto, or of any
other guaranty or security for the Guaranteed Obligations, in each case whether
or not in accordance with the terms hereof or such Loans Documents, the
Transactions or any agreement relating to such other guaranty or security; (iii)
the Guaranteed Obligations, or any agreement relating thereto, at any time being
found to be illegal, invalid or unenforceable in any respect; (iv) the
application of payments received from any source (other than payments received
pursuant to the Loan Documents or from the proceeds of any security for the
Guaranteed Obligations, except to the extent such security also serves as
collateral for indebtedness other than the Guaranteed Obligations) to the
payment of indebtedness other than the Guaranteed Obligations, even though any
Beneficiary might have elected to apply such payment to any part or all of the
Guaranteed Obligations; (v) any Beneficiary's consent to the change,
reorganization or termination of the corporate structure or existence of the
Borrower or any of its Subsidiaries and to any corresponding restructuring of
the Guaranteed Obligations; (vi) any failure to perfect or continue perfection
of a security interest in any collateral which secures any of the Guaranteed
Obligations; (vii) any defenses, set-offs or counterclaims which the Borrower
may allege or assert against any Beneficiary in respect of the Guaranteed
Obligations, including failure of consideration, breach of warranty, payment,
statute of frauds, statute of limitations, accord and satisfaction and usury;
and (viii) any other act or thing or omission, or delay to do any other act or
thing, which may or might in any manner or to any extent vary the risk of any
Guarantor as an obligor in respect of the Guaranteed Obligations.
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SECTION 5. WAIVERS BY GUARANTORS. Each Guarantor hereby waives, for the
benefit of Beneficiaries: (a) any right to require any Beneficiary, as a
condition of payment or performance by such Guarantor, to (i) proceed against
the Borrower, any other guarantor (including any other Guarantor) of the
Guaranteed Obligations or any other Person, (ii) proceed against or exhaust any
security held from the Borrower, any such other guarantor or any other Person,
(iii) proceed against or have resort to any balance of any deposit account or
credit on the books of any Beneficiary in favor of the Borrower or any other
Person, or (iv) pursue any other remedy in the power of any Beneficiary
whatsoever; (b) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of the Borrower or any other
Guarantor including any defense based on or arising out of the lack of validity
or the unenforceability of the Guaranteed Obligations or any agreement or
instrument relating thereto or by reason of the cessation of the liability of
the Borrower or any other Guarantor from any cause other than payment in full of
the Guaranteed Obligations; (c) any defense based upon any statute or rule of
law which provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the principal; (d) any
defense based upon any Beneficiary's errors or omissions in the administration
of the Guaranteed Obligations, except behavior which amounts to bad faith;
(e)(i) any principles or provisions of law, statutory or otherwise, which are or
might be in conflict with the terms hereof and any legal or equitable discharge
of such Guarantor's obligations hereunder, (ii) the benefit of any statute of
limitations affecting such Guarantor's liability hereunder or the enforcement
hereof, (iii) any rights to set-offs, recoupments and counterclaims, and (iv)
promptness, diligence and any requirement that any Beneficiary protect, secure,
perfect or insure any security interest or lien or any property subject thereto;
(f) notices, demands, presentments, protests, notices of protest, notices of
dishonor and notices of any action or inaction, including acceptance hereof,
notices of default hereunder or any agreement or instrument related hereto,
notices of any renewal, extension or modification of the Guaranteed Obligations
or any agreement related thereto, notices of any extension of credit to the
Borrower and notices of any of the matters referred to in Section 5 and any
right to consent to any thereof; and (g) any defenses or benefits that may be
derived from or afforded by law which limit the liability of or exonerate
guarantors or sureties, or which may conflict with the terms hereof.
SECTION 6. GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC.. Until
the Guaranteed Obligations shall have been indefeasibly paid in full, each
Guarantor hereby waives any claim, right or remedy, direct or indirect, that
such Guarantor now has or may hereafter have against the Borrower or any other
Guarantor or any of its assets in connection with this Guaranty or the
performance by such Guarantor of its obligations hereunder, in each case whether
such claim, right or remedy arises in equity, under contract, by statute, under
common law or otherwise and including (a) any right of subrogation,
reimbursement or indemnification that such Guarantor now has or may hereafter
have against the Borrower with respect to the Guaranteed Obligations, (b) any
right to enforce, or to participate in, any claim, right or remedy that any
Beneficiary now has or may hereafter have against the Borrower, and (c) any
benefit of, and any right to participate in, any collateral or security now or
hereafter held by any Beneficiary. In addition, until the Guaranteed Obligations
shall have been indefeasibly paid in full, each Guarantor shall withhold
exercise of any right of contribution such Guarantor may have against any other
guarantor (including any other Guarantor) of the Guaranteed Obligations,
including, without limitation, any such right of contribution as contemplated by
Section 2. Each Guarantor further agrees that, to the extent the waiver or
agreement to withhold the exercise of its rights of subrogation, reimbursement,
indemnification and contribution as set forth herein is found by a court of
competent jurisdiction to be void or voidable for any reason, any rights of
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subrogation, reimbursement or indemnification such Guarantor may have against
the Borrower or against any collateral or security, and any rights of
contribution such Guarantor may have against any such other guarantor, shall be
junior and subordinate to any rights any Beneficiary may have against the
Borrower, to all right, title and interest any Beneficiary may have in any such
collateral or security, and to any right any Beneficiary may have against such
other guarantor. If any amount shall be paid to any Guarantor on account of any
such subrogation, reimbursement, indemnification or contribution rights at any
time when all Guaranteed Obligations shall not have been finally and
indefeasibly paid in full, such amount shall be held in trust for Agent on
behalf of Beneficiaries and shall forthwith be paid over to Agent for the
benefit of Beneficiaries to be credited and applied against the Guaranteed
Obligations, whether matured or unmatured, in accordance with the terms hereof.
SECTION 7. SUBORDINATION OF OTHER OBLIGATIONS. Any Indebtedness of the
Borrower or any Guarantor now or hereafter held by any Guarantor (the "OBLIGEE
GUARANTOR") is hereby subordinated in right of payment to the Guaranteed
Obligations, and any such Indebtedness collected or received by the Obligee
Guarantor after an Event of Default has occurred and is continuing shall be held
in trust for Agent on behalf of Beneficiaries and shall forthwith be paid over
to Agent for the benefit of Beneficiaries to be credited and applied against the
Guaranteed Obligations but without affecting, impairing or limiting in any
manner the liability of the Obligee Guarantor under any other provision hereof.
SECTION 8. CONTINUING GUARANTY. This Guaranty is a continuing guaranty
and shall remain in effect until all of the Guaranteed Obligations shall have
been paid in full. Each Guarantor hereby irrevocably waives any right to revoke
this Guaranty as to future transactions giving rise to any Guaranteed
Obligations.
SECTION 9. AUTHORITY OF GUARANTORS OR THE BORROWER. It is not necessary
for any Beneficiary to inquire into the capacity or powers of any Guarantor or
the Borrower or the officers, directors or any agents acting or purporting to
act on behalf of any of them.
SECTION 10. FINANCIAL CONDITION OF THE BORROWER. No Beneficiary shall
have any obligation to disclose or discuss with any Guarantor its assessment, or
any Guarantor's assessment, of the financial condition of the Borrower. Each
Guarantor acknowledges that it has adequate means to obtain information from the
Borrower on a continuing basis concerning the financial condition of the
Borrower and its ability to perform its obligations under the Loan Documents,
and each Guarantor assumes the responsibility for being and keeping informed of
the financial condition of the Borrower and of all circumstances bearing upon
the risk of nonpayment of the Guaranteed Obligations. Each Guarantor hereby
waives and relinquishes any duty on the part of any Beneficiary to disclose any
matter, fact or thing relating to the business, operations or conditions of the
Borrower now known or hereafter known by any Beneficiary.
SECTION 11. BANKRUPTCY, ETC. (a) So long as any Guaranteed Obligations
remain outstanding, no Guarantor shall, without the prior written consent of
Agent acting pursuant to the instructions of Required Lenders, commence or join
with any other Person in commencing any bankruptcy, reorganization or insolvency
case or proceeding of or against the Borrower or any other Guarantor. The
obligations of Guarantors hereunder shall not be reduced, limited, impaired,
discharged, deferred, suspended or terminated by any case or proceeding,
voluntary or involuntary, involving the bankruptcy, insolvency, receivership,
reorganization, liquidation or arrangement of the Borrower or any other
Guarantor or by any defense which the Borrower or any other Guarantor may have
by reason of the order, decree or decision of any court or administrative body
resulting from any such proceeding.
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(b) Each Guarantor acknowledges and agrees that any interest
on any portion of the Guaranteed Obligations which accrues after the
commencement of any case or proceeding referred to in clause (a) above (or, if
interest on any portion of the Guaranteed Obligations ceases to accrue by
operation of law by reason of the commencement of such case or proceeding, such
interest as would have accrued on such portion of the Guaranteed Obligations if
such case or proceeding had not been commenced) shall be included in the
Guaranteed Obligations because it is the intention of Guarantors and
Beneficiaries that the Guaranteed Obligations which are guaranteed by Guarantors
pursuant hereto should be determined without regard to any rule of law or order
which may relieve the Borrower of any portion of such Guaranteed Obligations.
Guarantors will permit any trustee in bankruptcy, receiver, debtor in
possession, assignee for the benefit of creditors or similar person to pay
Agent, or allow the claim of Agent in respect of, any such interest accruing
after the date on which such case or proceeding is commenced.
(c) In the event that all or any portion of the Guaranteed
Obligations are paid by the Borrower, the obligations of Guarantors hereunder
shall continue and remain in full force and effect or be reinstated, as the case
may be, in the event that all or any part of such payment(s) are rescinded or
recovered directly or indirectly from any Beneficiary as a preference,
fraudulent transfer or otherwise, and any such payments which are so rescinded
or recovered shall constitute Guaranteed Obligations for all purposes hereunder.
SECTION 12. SUBORDINATION, ETC. Notwithstanding anything contained
herein to the contrary, the Guaranteed Obligations are subject and subordinate
to the First Lien Obligations (as defined in the Intercreditor Agreement
referred to below) on the terms and conditions contained in that certain
Intercreditor Agreement dated as of the date hereof among X. Xxxx & Company, as
Administrative Agent, the Agent and the Guarantors, as amended, modified,
supplemented, restated or replaced from time to time (the "INTERCREDITOR
AGREEMENT"). In the event of any conflict between the terms of the Intercreditor
Agreement and this Guaranty, the terms of the Intercreditor Agreement shall
govern and control.
SECTION 13. DEFAULT; REMEDIES. The obligations of the Guarantors
hereunder are independent of and separate from the Loan DocumenT Obligations. If
any Guaranteed Obligations not paid when due, or upon any Event of Default under
the Credit Agreement, the Agent may, at its sole election but subject to the
terms of the Intercreditor Agreement, proceed directly and at once, without
notice, against any or each Guarantor to collect and recover the full amount or
any portion of the Guaranteed Obligations then due, without first proceeding
against the Borrower or any other guarantor of the Guaranteed Obligations, or
against any Collateral under the Loan Documents or joining the Borrower or any
other guarantor in any proceeding against any Guarantor. At any time after
maturity of the Guaranteed Obligations (or any of them), each Guaranteed Party
may (until such time as the Guaranteed Obligations are indefeasibly paid in full
in cash), with notice to the Agent but without notice to any Guarantor, and
regardless of the acceptance of any Collateral or security for the payment
hereof, appropriate and apply toward the payment of all or any part of the
Guaranteed Obligations (a) any indebtedness due or to become due from such
Beneficiary or any of its Affiliates to or for the credit of any Guarantor and
(b) any deposits, moneys, credits or other property belonging to any Guarantor,
at any time held by, or coming into the possession of, or under the control of,
such Beneficiary or any of its Affiliates.
SECTION 14. CONTINUING GUARANTY; IRREVOCABILITY. This Guaranty shall be
a continuing guaranty and shall be operative and binding and the obligations and
liabilities of each Guarantor hereunder shall be irrevocable until such time as
the Agent shall have acknowledged in writing that all of the Guaranteed
Obligations have been indefeasibly paid in full in cash and other obligations
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under the Credit Agreement have been terminated, at which time this Guaranty
shall automatically terminate. Upon termination of this Guaranty and at the
written request of any Guarantor or its respective successors or assigns, and at
the cost and expense of such Guarantor or its successors or assigns, the Agent
shall execute such instruments, documents or agreements as are reasonably
necessary to evidence such termination.
SECTION 15. SETOFF. In addition to any rights now or hereafter granted
under applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of an Event of Default and with notice to
the Agent, each Beneficiary and each Affiliate of a Beneficiary may at any time
or from time to time without notice to any Guarantor (any such notice being
expressly waived) or to any other Person and regardless of the acceptance of any
security or collateral for the payment hereof, appropriate and apply toward the
payment of all or any part of the Guaranteed Obligations (a) any indebtedness
due or to become due from such Beneficiary or such Affiliate to or for the
credit of any Guarantor and (b) any deposits, moneys, credits or other property
belonging to any Guarantor, at any time held by, or coming into the possession
of, or under the control of, such Beneficiary or such Affiliate.
SECTION 16. NO MARSHALLING. Each Guarantor consents and agrees that no
Beneficiary or Person acting for or on behalf of any Beneficiary shall be under
any obligation to marshal any assets in favor of any Guarantor or against or in
payment of any or all of the Guarantied Obligations.
SECTION 17. ADDITIONAL GUARANTORS. Subject to applicable law, each
Guarantor shall cause each of its wholly-owned Subsidiaries formed or acquired
after the date of this Guaranty (other than Subsidiaries of Holdings or the
Borrower) to execute a Joinder Agreement in the form set forth as Exhibit A
hereto (the "JOINDER AGREEMENT"). Upon execution and delivery thereof, each such
Person (i) shall automatically become a Guarantor hereunder and (ii) shall be
obligated to (and each Guarantor shall cause such Subsidiary to) become party to
the Second Lien Security Agreement by executing and delivering a Pledge
Supplement (as defined therein) pursuant to which it shall grant Liens to the
Collateral Agent, for the benefit of the Beneficiaries, in any property of such
Person that constitutes Collateral thereunder. As used herein, "SECOND LIEN
SECURITY AGREEMENT" shall mean that certain Second Lien Pledge and Security
Agreement, dated as of the date hereof, among the Guarantors and the Agent, as
the same may be amended, modified, supplemented, restated, refinanced or
replaced from time to time.
SECTION 18. NOTICES. All notices and other communications provided for
herein shall be made at the address set forth on the signature pages hereof, in
the manner and with the effect provided in the Credit Agreement.
SECTION 19. ENFORCEMENT; AMENDMENTS; WAIVER. No failure or delay on the
part of any Beneficiary in the exercise of any right, power, privilege or remedy
arising under this Guaranty, the Credit Agreement, any other Loan Document or
otherwise shall operate as a waiver thereof, and no single or partial exercise
by any such Person of any such right or remedy shall preclude any other or
further exercise thereof or the exercise of any other right or remedy and no
course of dealing between any Guarantor and any Beneficiary shall operate as a
waiver thereof. No modification or waiver of any term or provision of this
Guaranty shall be binding upon any Beneficiary except as expressly set forth in
a writing duly signed and delivered by the Guarantors and the Agent. Failure by
any Beneficiary at any time or times hereafter to require strict performance by
the Borrower, the Guarantors or any other guarantor of all or any part of the
Loan Document Obligations or any other Person of any provision, warranty, term
or condition contained in any Loan Document now or at any time hereafter
executed by any such Persons and delivered to any Beneficiary shall not waive,
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affect or diminish any right of any Beneficiary at any time or from time to time
thereafter to demand strict performance thereof and such right shall not be
deemed to have been waived by any act or knowledge of any Beneficiary, or its
respective agents, officers or employees, unless such waiver is contained in an
instrument in writing, directed and delivered to the Borrower or the Guarantors,
as applicable, specifying such waiver, and is signed by the party or parties
necessary to give such waiver under the Credit Agreement. No waiver of any Event
of Default by any Beneficiary shall operate as a waiver of any other Event of
Default or any recurrence of such Event of Default on a future occasion, and no
action by any Beneficiary permitted hereunder shall in any way affect or impair
this Guaranty or any right, power, privilege or remedy of any Beneficiary
hereunder or the obligations of the Guarantors under this Guaranty. Any
determination by a court of competent jurisdiction of the amount of any
principal or interest owing by the Borrower to a Beneficiary shall be conclusive
and binding on each Guarantor irrespective of whether any Guarantor was a party
to the suit or action in which such determination was made. The remedies
provided in this Guaranty are cumulative and are not exclusive of any other
remedies provided by any other Loan Document or by law.
SECTION 20. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon
each Guarantor and its respective successors and assigns and shall inure to the
benefit of the Beneficiaries and their successors and assigns, PROVIDED,
HOWEVER, that no Guarantor may transfer, or otherwise assign, any of its
obligations hereunder without the prior written consent of the Agent.
SECTION 21. SEVERABILITY. Any provision of this Guaranty held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions thereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 22. COLLATERAL. Each Guarantor hereby acknowledges and agrees
that its obligations under this Guaranty are secured pursuant to the terms and
provisions of the Second Lien Security Agreement.
SECTION 23. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.
THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.
EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR
ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR
NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS GUARANTY, OR FOR RECOGNITION OR ENFORCEMENT
OF ANY JUDGMENT, AND EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, IN
SUCH FEDERAL COURT. EACH GUARANTOR AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS GUARANTY SHALL AFFECT ANY RIGHT THAT THE AGENT MAY OTHERWISE
HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS GUARANTY AGAINST SUCH
GUARANTOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
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Each Guarantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Guaranty in any court referred to in this
Section 23. Each Guarantor hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.
Each Guarantor irrevocably consents to service of process in the manner
provided for notices in Section 18 hereof. Nothing in this Guaranty will affect
the right of any party to this Guaranty to serve process in any other manner
permitted by law.
SECTION 24. WAIVER OF JURY TRIAL. EACH GUARANTOR AND EACH BENEFICIARY
BY ITS ACCEPTANCE OF THE BENEFITS HEREOF HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
GUARANTY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS GUARANTY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION.
SECTION 25. WAIVER OF CONSEQUENTIAL DAMAGES. No Guarantor shall assert,
and each Guarantor hereby waives, any claim against any Beneficiary, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, this Guaranty or any other Loan Document.
SECTION 26. HEADINGS. Article and Section headings used herein are for
convenience of reference only, are not part of this Guaranty and shall not
affect the construction of, or be taken into consideration in interpreting, this
Guaranty.
SECTION 27. COUNTERPARTS. This Guaranty and any amendments, waivers,
consents or supplements hereto or in connection herewith may be executed and
delivered by facsimile transmission or other electronic means and in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
SECTION 28. ENTIRE AGREEMENT. This Guaranty, taken together with all of
the Second Lien Security Agreement and the Intercreditor Agreement, represents
the entire agreement and understanding of the parties hereto and supersedes all
prior understandings, written and oral, relating to the subject matter hereof.
SECTION 29. CALIFORNIA WAIVERS. Guarantors hereby waive and agree not
to assert or take advantage of:
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(a) any suretyship defenses and suretyship rights of every
nature otherwise available under California law and the laws of any other state,
including, without limitation, all defenses and rights arising under Sections
2787 through 2855 (the "SURETYSHIP PROVISIONS") of the California Civil Code
(the "CIVIL CODE") and any successor provisions to those Sections. Without
limiting the generality of the foregoing, each Guarantor hereby acknowledges its
understanding that the Suretyship Provisions provide various partial or complete
defenses to the recovery by Beneficiaries from such Guarantor and/or grant such
Guarantor rights the enforcement of which could reduce or eliminate entirely
such Guarantor's liability hereunder to the Beneficiaries. Among the defenses
and rights contained in the Suretyship Provisions are the following:
(i) Section 2809 of the Civil Code, which provides,
in part, that the obligation of a surety must not be either larger in
amount or in other respects more burdensome than that of the principal;
(ii) Section 2810 of the Civil Code, which provides,
in part, that a surety is not liable if for any reason other than the
mere personal disability of the principal there is no liability upon
the part of the principal at the time of execution of the contract, or
the liability of the principal thereafter ceases;
(iii) Section 2819 of the Civil Code, which provides,
in part, that a surety is exonerated if the creditor alters the
original obligation of the principal without the consent of the surety;
(iv) Section 2845 of the Civil Code, which provides,
in part, that a surety is exonerated to the extent that the creditor
fails to proceed against the principal, or to pursue any other remedy
in the creditor's power which the surety cannot pursue and which would
lighten the surety's burden;
(v) Section 2846 of the Civil Code, which provides
that a surety may compel his principal to perform the obligation when
due;
(vi) Section 2847 of the Civil Code, which provides,
in part, that if a surety satisfies the principal obligation, or any
part thereof, the principal is obligated to reimburse the surety for
the amounts paid by the surety;
(vii) Section 2848 of the Civil Code, which provides,
in part, that a surety, upon satisfaction of the obligation of the
principal is entitled to enforce remedies which the creditor then has
against the principal;
(viii) Section 2849 of the Civil Code, which
provides, in part, that a surety is entitled to the benefit of security
held by the creditor for the performance of the principal obligation
held by the creditor;
(ix) Section 2850 of the Civil Code, which provides,
in part, that whenever the property of a surety is hypothecated with
property of the principal, the surety is entitled to have the property
of the principal first applied to the discharge of the obligation; and
(x) Section 2822 of the Civil Code, which provides,
in part, for a right to have the principal designate the portion of any
obligation to be satisfied by the surety in the event that the
principal provides partial satisfaction of such obligation.
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(b) all rights and defenses that any Guarantor may have
because the Borrower's debt is secured by real property. This means among other
things:
(i) Lender may collect from any Guarantor without
first foreclosing on any real or personal property collateral pledged
by the Borrower.
(ii) if Lender forecloses on any real property
collateral pledged by the Borrower:
(A) the amount of the debt may be reduced
only by the price for which that collateral is sold at the
foreclosure sale, even if the collateral is worth more than
the sale price.
(B) Lender may collect from any Guarantor
even if Lender, by foreclosing on the real property
collateral, has destroyed any right such Guarantor may have to
collect from the Borrower.
This is an unconditional and irrevocable waiver of any rights and
defenses any Guarantor may have because the Borrower's debt is secured
by real property. These rights and defenses include, but are not
limited to, any rights or defenses based upon Section 580a, 580b, 580d
or 726 of the CALIFORNIA CODE OF CIVIL PROCEDURE.
(c) all rights and defenses arising out of an election of
remedies by any Beneficiary, even though that election of remedies, such as
nonjudicial foreclosure with respect to security for a guaranteed obligation,
has destroyed the Guarantor's rights of subrogation and reimbursement against
the principal by the operation of Section 580d of the Code of Civil Procedure or
otherwise.
This Section 29 is included solely out of an abundance of caution, and shall not
be construed to mean that any of the above-referenced provisions of California
law are in any way applicable to this Guaranty or to any of the Guaranteed
Obligations.
[SIGNATURES TO FOLLOW]
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IN WITNESS WHEREOF, the undersigned has caused this Guaranty
to be duly executed by its authorized representative as of the day and year
first above written.
Address: PACIFIC ENERGY RESOURCES LTD., A GUARANTOR
By: /S/ XXXXXX XXXXX
----------------------------------------
Name: Xxxxxx Xxxxx
Title: President
PETROCAL ACQUISITION CORP., A GUARANTOR
By: /S/ XXXXXX XXXXX
----------------------------------------
Name: Xxxxxx Xxxxx
Title: President
SAN XXXXX BAY PIPELINE COMPANY, A GUARANTOR
By: /S/ XXXXXX XXXXX
----------------------------------------
Name: Xxxxxx Xxxxx
Title: President
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