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EXHIBIT 10.70
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 First 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 $200,000,000 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 Second Lien Agent,
Moldings
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.
"Loan Document 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,
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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.
"Loans" shall mean the 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.
"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 Loan Document Obligations and (b) the
Hedging
Obligations.
"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
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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 uses) and including any and all oil wells,
gas
wells, injection wells or other wells, buildings, structures,
fuel
separators, liquid extraction plants, plant compressors, pumps,
pumping
units, field gathering systems, tanks and tank batteries, fixtures,
valves,
fittings, machinery and parts, engines, boilers, meters,
apparatus,
equipment, appliances, tools, implements, cables, wires, towers,
casing,
tubing and rods, surface leases, rights-of-way, easements and
servitudes
together with all additions, substitutions, replacements,
accessions and
attachments to any and all of the foregoing. 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
wells, gas wells, water wells, injection wells, 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
personal 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.
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"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.
"Secured Obligations" shall have the meaning set forth in Section
1.2
hereof.
"Secured Parties" shall mean (a) the Lenders, (b) the Agent, (c)
each
counterparty to any Hedging Agreement entered into with a Loan
Party the
obligations under which constitute Obligations, (d) the
beneficiaries of
each
indemnification obligation undertaken by any Loan Party under any
Loan
Document and (e) 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,
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(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) 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
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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, 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, and to induce certain Lenders to extend
Financial
accommodations to Trustor pursuant to the Hedging Agreements,
hereby covenants
and agrees with Trustee and the Agent, for itself and for the
Secured Parties,
as follows:
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ARTICLE I
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 $450,000,000 (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
