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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").
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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 w
