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EXHIBIT 10.66
SECOND LIEN PLEDGE AND SECURITY AGREEMENT
August 24, 2007
between
EACH OF THE GRANTORS PARTY HERETO
and
SILVER POINT FINANCE, LLC,
as the Secured Party
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TABLE OF CONTENTS
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Page
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Section 1
DEFINITIONS...............................................................
2
1.1 General
Definitions.......................................................
2
1.2 Definitions;
Interpretation...............................................
7
Section 2
GRANT OF
SECURITY.........................................................
8
2.1 Grant of
Security.........................................................
8
2.2 Certain Limited
Exclusions................................................
9
2.3 Lien
Subordination..........................Error! Bookmark not
defined.
Section 3
SECURITY FOR OBLIGATIONS; GRANTORS REMAIN
LIABLE.......................... 9
3.1 Security for
Obligations..................................................
9
3.2 Continuing
Liability Under Collateral.....................................
9
Section 4
REPRESENTATIONS AND WARRANTIES AND
COVENANTS.............................. 10
4.1
Generally.................................................................
10
4.2 Investment Related
Property; Investment Related Property Generally........
12
4.3 Pledged Equity
Interests..................................................
15
4.4 Investment
Accounts.......................................................
16
4.5 Letter of Credit
Rights...................................................
17
4.6 Commercial Tort
Claims....................................................
17
Section 5
ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES; ADDITIONAL
GRANTORS... 18
5.1 Access; Right of
Inspection...............................................
18
5.2 Further
Assurances........................................................
18
5.3 Additional
Grantors.......................................................
19
Section 6
SECURED PARTY APPOINTED
ATTORNEY-IN-FACT.................................. 19
6.1 Power of
Attorney.........................................................
19
6.2 No Duty on the
Part of Secured Party or Lender Parties....................
20
Section 7
REMEDIES..................................................................
21
7.1
Generally.................................................................
21
7.2 Application of
Proceeds...................................................
22
7.3 Sales on
Credit...........................................................
23
7.4 Deposit
Accounts..........................................................
23
7.5 Investment Related
Property...............................................
23
7.6 Intellectual
Property.....................................................
23
7.7 Cash
Proceeds.............................................................
25
Section 8
AGENT.....................................................................
26
Section 9
CONTINUING SECURITY INTEREST; TRANSFER OF
LOANS........................... 26
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Section 10
STANDARD OF CARE; SECURED PARTY MAY
PERFORM............................... 27
Section 11
MISCELLANEOUS.............................................................
27
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SCHEDULES: 4.1
-- General Information
4.3 -- Investment Related Property
4.5 -- Description of Letters of Credit
4.6 -- Commercial Tort Claims
EXHIBITS:
A -- Pledge Supplement
B -- Deposit Account Control Agreement
ii
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SECOND LIEN PLEDGE AND SECURITY AGREEMENT
This
SECOND LIEN PLEDGE AND SECURITY AGREEMENT, dated as of August 24,
2007
(this "Agreement"), between EACH OF THE UNDERSIGNED, whether as an
original
signatory hereto or as an Additional Grantor (as herein defined)
(each, a
"Grantor"), and SILVER POINT FINANCE, LLC, as collateral agent for
the Lender
Parties (as herein defined) (in such capacity, the "Secured
Party").
RECITALS:
WHEREAS, reference is made to (x) that certain Second Lien
Credit
Agreement, dated as of the date hereof (as it may be amended,
restated,
supplemented or otherwise modified from time to time, the "Credit
Agreement"),
by and among Pacific Energy Alaska Operating LLC, a limited
liability company
organized under the laws of the state of Delaware ("Alaska
Operating"), Pacific
Energy Alaska Holdings, LLC, a limited liability company organized
under the
laws of the state of Delaware ("Alaska Holdings") certain
Subsidiaries of
Holdings, the lenders party thereto from time to time (the
"Lenders"), Silver
Point Finance, LLC, as Administrative Agent, Collateral Agent, Sole
Lead
Arranger and Sole Bookrunner, Syndication Agent, and Secured Party
and J. Aron &
Company, as documentation agent and (y) that certain Second Lien
Guaranty dated
as of August 24, 2007, (as maybe amended, modified or supplemented
from time to
time) by and among Pacific Energy Resources Ltd., Petrocal
Acquisition Corp. and
San Pedro Bay Pipeline Company, as Guarantors, other guarantors
party thereto
from time to time and Silver Point Finance, LLC, as Administrative
Agent;
WHEREAS, subject to the terms and conditions of the Credit
Agreement,
certain Grantors may enter into one or more Hedging Agreements with
one or more
counterparties;
WHEREAS, in consideration of the extensions of credit and other
accommodations of Lenders and counterparties to Hedging Agreements
as set forth
in the Credit Agreement and the Hedging Agreements, respectively,
each Grantor
has agreed to secure such Grantor's obligations under the Loan
Documents and the
Hedging Agreements as set forth herein;
WHEREAS, certain of the Grantors have also entered into (a) that
certain
Credit and Guaranty Agreement, dated as of November 30, 2006, as
amended on May
24, 2007 (as may be further amended, supplemented or otherwise
modified from
time to time, the "First Lien Credit Agreement"), by and among
Pacific Energy
Resources Ltd. (the "Company"), certain subsidiaries of the
Company, the lenders
party thereto from time to time, J. Aron & Company, as lead
arranger and
syndication agent, administrative agent and Collateral Agent
(together with its
permitted successors and assigns, in such capacity, the "First Lien
Collateral
Agent") and (b) that certain First Lien Pledge and Security
Agreement, dated as
of November 30, 2006 (as may be amended, supplemented or otherwise
modified from
time to time, the "First Lien Security Agreement"), by and between
each of the
Grantors and the First Lien Collateral Agent, pursuant to which
each Grantor has
granted a first priority Lien to the First Lien Collateral Agent
for the benefit
of the holders of First Lien Obligations (as defined in the
Intercreditor
Agreement referred to below) on the Collateral to secure such
Grantor's
obligations under the Transaction Documents (as defined in the
First Lien Credit
Agreement); and
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WHEREAS, in order to set forth their respective rights and remedies
with
respect to the Collateral, Company, the First Lien Collateral Agent
and the
Collateral Agent have entered into an Intercreditor Agreement,
dated as of the
date hereof (as may be amended, supplemented or otherwise modified
from time to
time, the "Intercreditor Agreement").
NOW,
THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, each Grantor and the
Secured Party
agree as follows:
SECTION 1 DEFINITIONS
1.1 General Definitions. In this Agreement, the following terms
shall
have the following meanings:
"Account Debtor" shall mean each Person who is obligated on a
Receivable or
any Supporting Obligation related thereto.
"Accounts" shall mean all "accounts" as defined in Article 9 of the
UCC.
"Agreement" shall have the meaning set forth in the preamble.
"Additional Grantors" shall have the meaning assigned in Section
5.3.
"Assigned Agreements" shall mean all agreements and contracts to
which such
Grantor is a party as of the date hereof, or to which such Grantor
becomes a
party after the date hereof, including each Material Contract, as
each such
agreement may be amended, supplemented or otherwise modified from
time to time.
"Cash Proceeds" shall have the meaning assigned in Section 7.7.
"Chattel Paper" shall mean all "chattel paper" as defined in
Article 9 of
the UCC, including "electronic chattel paper" or "tangible chattel
paper", as
each term is defined in Article 9 of the UCC.
"Collateral" shall have the meaning assigned in Section 2.1.
"Collateral Records" shall mean books, records, ledger cards,
files,
correspondence, customer lists, blueprints, technical
specifications, manuals,
computer software, computer printouts, tapes, disks and related
data processing
software and similar items that at any time evidence or contain
information
relating to any of the Collateral or are otherwise necessary or
helpful in the
collection thereof or realization thereupon.
"Collateral Support" shall mean all property (real or personal)
assigned,
hypothecated or otherwise securing any Collateral and shall include
any security
agreement or other agreement granting a lien or security interest
in such real
or personal property.
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"Commercial Tort Claims" shall mean all "commercial tort claims" as
defined
in Article 9 of the UCC, including all commercial tort claims
listed on Schedule
4.6 (as such schedule may be amended or supplemented from time to
time).
"Commodities Accounts" shall mean all "commodity accounts" as
defined in
Article 9 of the UCC.
"Copyright Licenses" shall mean any and all agreements providing
for the
granting of any right in or to Copyrights (whether such Grantor is
licensee or
licensor thereunder).
"Copyrights" shall mean all United States and foreign copyrights,
all mask
works fixed in semi-conductor chip products (as defined under 17
U.S.C. 901 of
the U.S. Copyright Act), whether registered or unregistered, now or
hereafter in
force throughout the world, all registrations and applications
therefor, all
rights corresponding thereto throughout the world, all extensions
and renewals
of any thereof, the right to sue for past, present and future
infringements of
any of the foregoing, and all proceeds of the foregoing, including
licenses,
royalties, income, payments, claims, damages, and proceeds of
suit.
"Credit Agreement" shall have the meaning set forth in the
recitals.
"Deposit Accounts" (i) shall mean all "deposit accounts" as defined
in
Article 9 of the UCC and (ii) shall include, without limitation,
all of the
accounts listed on Schedule 4.3 under the heading "Deposit
Accounts" (as such
schedule may be amended or supplemented from time to time).
"Documents" shall mean all "documents" as defined in Article 9 of
the UCC.
"Equipment" shall mean: (i) all "equipment" as defined in Article 9
of the
UCC, (ii) all machinery, manufacturing equipment, data processing
equipment,
computers, office equipment, furnishings, furniture, appliances,
fixtures and
tools (in each case, regardless of whether characterized as
equipment under the
UCC) and (iii) all accessions or additions thereto, all parts
thereof, whether
or not at any time of determination incorporated or installed
therein or
attached thereto, and all replacements therefor, wherever located,
now or
hereafter existing, including any fixtures.
"First Lien Collateral Agent" shall have the meaning set forth in
the
recitals.
"First Lien Credit Agreement" shall have the meaning set forth in
the
recitals.
"First Lien Security Agreement" shall have the meaning set forth in
the
recitals.
"General Intangibles" (i) shall mean all "general intangibles" as
defined
in Article 9 of the UCC, including "payment intangibles" also as
defined in
Article 9 of the UCC and (ii) shall include, without limitation,
all interest
rate or currency protection or hedging arrangements, all tax
refunds, all
licenses, permits, concessions and authorizations, all Assigned
Agreements and
all Intellectual Property (in each case, regardless of whether
characterized as
general intangibles under the UCC).
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"Goods" (i) shall mean all "goods" as defined in Article 9 of the
UCC and
(ii) shall include, without limitation, all Inventory and Equipment
(in each
case, regardless of whether characterized as goods under the
UCC).
"Grantors" shall have the meaning set forth in the preamble.
"Instruments" shall mean all "instruments" as defined in Article 9
of the
UCC.
"Insurance" shall mean: (i) all insurance policies covering any or
all of
the Collateral (regardless of whether the Secured Party is the loss
payee
thereof) and (ii) any key man life insurance policies.
"Intellectual Property" shall mean, collectively, the Copyrights,
the
Copyright Licenses, the Patents, the Patent Licenses, the
Trademarks, the
Trademark Licenses, the Trade Secrets, and the Trade Secret
Licenses.
"Intercreditor Agreement" shall have the meaning set forth in the
recitals.
"Inventory" shall mean: (i) all "inventory" as defined in Article 9
of the
UCC and (ii) all goods held for sale or lease or to be furnished
under contracts
of service or so leased or furnished, all raw materials, work in
process,
finished goods, and materials used or consumed in the manufacture,
packing,
shipping, advertising, selling, leasing, furnishing or production
of such
inventory or otherwise used or consumed in any Grantor's business;
all goods in
which any Grantor has an interest in mass or a joint or other
interest or right
of any kind; and all goods which are returned to or repossessed by
any Grantor,
all computer programs embedded in any goods and all accessions
thereto and
products thereof (in each case, regardless of whether characterized
as inventory
under the UCC).
"Investment Accounts" shall mean the Securities Accounts,
Commodities
Accounts and Deposit Accounts.
"Investment Related Property" shall mean: (i) all "investment
property" (as
such term is defined in Article 9 of the UCC) and (ii) all of the
following
(regardless of whether classified as investment property under the
UCC): all
Pledged Equity Interests, the Investment Accounts, and certificates
of deposit.
"Lender" shall have the meaning set forth in the recitals.
"Lender Parties" means the Lenders and the counterparties to
Hedging
Agreements and shall include, without limitation, all former
Lenders and
counterparties to Hedging Agreements to the extent that any
Obligations owing to
such Persons were incurred while such Persons were Lenders or
Lender
Counterparties and such Obligations have not been paid or satisfied
in full.
"Letter of Credit Right" shall mean "letter-of-credit right" as
defined in
Article 9 of the UCC.
"Money" shall mean "money" as defined in the UCC.
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"Patent Licenses" shall mean all agreements providing for the
granting of
any right in or to Patents (whether such Grantor is licensee or
licensor
thereunder).
"Patents" shall mean all United States and foreign patents and
applications
for letters patent throughout the world, all reissues, divisions,
continuations,
continuations-in-part, extensions, renewals, and reexaminations of
any of the
foregoing, all rights corresponding thereto throughout the world,
and all
proceeds of the foregoing, including licenses, royalties, income,
payments,
claims, damages, and proceeds of suit and the right to sue for
past, present and
future infringements of any of the foregoing.
"Payment Intangible" shall have the meaning specified in Article 9
of the
UCC.
"Pledge Supplement" shall mean any supplement to this agreement
in
substantially the form of Exhibit A.
"Pledged Debt" shall mean all Indebtedness owed to each Grantor
issued by
the obligors named thereunder, the instruments evidencing such
Indebtedness, and
all interest, cash, instruments and other property or proceeds from
time to time
received, receivable or otherwise distributed in respect of or in
exchange for
any or all of such Indebtedness.
"Pledged Equity Interests" shall mean all Pledged Stock, Pledged
LLC
Interests, Pledged Partnership Interests and Pledged Trust
Interests.
"Pledged LLC Interests" shall mean all interests in any limited
liability
company, including all limited liability company interests listed
on Schedule
4.3 under the heading "Pledged LLC Interests" (as such schedule may
be amended
or supplemented from time to time) and the certificates, if any,
representing
such limited liability company interests and any interest of such
Grantor on the
books and records of such limited liability company or on the books
and records
of any securities intermediary pertaining to such interest and all
dividends,
distributions, cash, warrants, rights, options, instruments,
securities and
other property or proceeds from time to time received, receivable
or otherwise
distributed in respect of or in exchange for any or all of such
limited
liability company interests.
"Pledged Partnership Interests" shall mean all interests in any
general
partnership, limited partnership, limited liability partnership or
other
partnership, including all partnership interests listed on Schedule
4.3 under
the heading "Pledged Partnership Interests" (as such schedule may
be amended or
supplemented from time to time) and the certificates, if any,
representing such
partnership interests and any interest of such Grantor on the books
and records
of such partnership or on the books and records of any securities
intermediary
pertaining to such interest and all dividends, distributions, cash,
warrants,
rights, options, instruments, securities and other property or
proceeds from
time to time received, receivable or otherwise distributed in
respect of or in
exchange for any or all of such partnership interests.
"Pledged Stock" shall mean all shares of capital stock owned by
such
Grantor, including all shares of capital stock described on
Schedule 4.3 under
the heading "Pledged Stock" (as such schedule may be amended or
supplemented
from time to time), and the certificates, if any, representing such
shares and
any interest of such Grantor in the entries on the books of the
issuer of such
shares or on the books of any securities intermediary pertaining to
such shares,
and all
5
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dividends, distributions, cash, warrants, rights, options,
instruments,
securities and other property or proceeds from time to time
received, receivable
or otherwise distributed in respect of or in exchange for any or
all of such
shares.
"Pledged Trust Interests" shall mean all interests in a Delaware
statutory
trust or other trust, including all trust interests listed on
Schedule 4.3 under
the heading "Pledged Trust Interests" (as such schedule may be
amended or
supplemented from time to time) and the certificates, if any,
representing such
trust interests and any interest of such Grantor on the books and
records of
such trust or on the books and records of any securities
intermediary pertaining
to such interest and all dividends, distributions, cash, warrants,
rights,
options, instruments, securities and other property or proceeds
from time to
time received, receivable or otherwise distributed in respect of or
in exchange
for any or all of such trust interests.
"Proceeds" shall mean: (i) all "proceeds" as defined in Article 9
of the
UCC, (ii) payments or distributions made with respect to any
Investment Related
Property and (iii) whatever is receivable or received when
Collateral or
proceeds are sold, exchanged, collected or otherwise disposed of,
whether such
disposition is voluntary or involuntary.
"Receivables" shall mean all rights to payment, whether or not
earned by
performance, for goods or other property sold, leased, licensed,
assigned or
otherwise disposed of, or services rendered or to be rendered,
including all
such rights constituting or evidenced by any Account, Chattel
Paper, Instrument,
General Intangible or Investment Related Property, together with
all of
Grantor's rights, if any, in any goods or other property giving
rise to such
right to payment and all Collateral Support and Supporting
Obligations related
thereto and all Receivables Records.
"Receivables Records" shall mean (i) all original copies of all
documents,
instruments or other writings or electronic records or other
Records evidencing
the Receivables, (ii) all books, correspondence, credit or other
files, Records,
ledger sheets or cards, invoices, and other papers relating to
Receivables,
including all tapes, cards, computer tapes, computer discs,
computer runs,
record keeping systems and other papers and documents relating to
the
Receivables, whether in the possession or under the control of
Grantor or any
computer bureau or agent from time to time acting for Grantor or
otherwise,
(iii) all evidences of the filing of financing statements and the
registration
of other instruments in connection therewith, and amendments,
supplements or
other modifications thereto, notices to other creditors or Lender
Parties, and
certificates, acknowledgments, or other writings, including lien
search reports,
from filing or other registration officers, (iv) all credit
information, reports
and memoranda relating thereto and (v) all other written or
nonwritten forms of
information related in any way to the foregoing or any
Receivable.
"Record" shall have the meaning specified in Article 9 of the
UCC.
"Second Lien Guaranty" shall have the meaning set forth in the
recitals.
"Secured Obligations" shall have the meaning assigned in Section
3.1.
"Secured Party" shall have the meaning set forth in the
preamble.
6
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"Securities" shall mean any stock, shares, partnership interests,
voting
trust certificates, certificates of interest or participation in
any
profit-sharing agreement or arrangement, options, warrants, bonds,
debentures,
notes, or other evidences of indebtedness, secured or unsecured,
convertible,
subordinated or otherwise, or in general any instruments commonly
known as
"securities" or any certificates of interest, shares or
participations in
temporary or interim certificates for the purchase or acquisition
of, or any
right to subscribe to, purchase or acquire, any of the
foregoing.
"Securities Accounts" shall mean all "securities accounts" as
defined in
Article 8 of the UCC.
"Supporting Obligation" shall mean all "supporting obligations" as
defined
in Article 9 of the UCC.
"Trade Secret Licenses" shall mean any and all agreements providing
for the
granting of any right in or to Trade Secrets (whether such Grantor
is licensee
or licensor thereunder).
"Trade Secrets" shall mean all trade secrets and all other
confidential or
proprietary information and know-how now or hereafter owned or used
in, or
contemplated at any time for use in, the business of such Grantor
(all of the
foregoing being collectively called a "Trade Secret"), whether or
not such Trade
Secret has been reduced to a writing or other tangible form,
including all
documents and things embodying, incorporating, or referring in any
way to such
Trade Secret, the right to sue for past, present and future
infringement of any
Trade Secret, and all proceeds of the foregoing, including
licenses, royalties,
income, payments, claims, damages, and proceeds of suit.
"Trademark Licenses" shall mean any and all agreements providing
for the
granting of any right in or to Trademarks (whether such Grantor is
licensee or
licensor thereunder).
"Trademarks" shall mean all United States, state and foreign
trademarks,
trade names, corporate names, company names, business names,
fictitious business
names, internet domain names, trade styles, service marks,
certification marks,
collective marks, logos, other source or business identifiers,
designs and
general intangibles of a like nature, all registrations and
applications for any
of the foregoing, all extensions or renewals of any of the
foregoing, all of the
goodwill of the business connected with the use of and symbolized
by the
foregoing, the right to sue for past, present and future
infringement or
dilution of any of the foregoing or for any injury to goodwill, and
all proceeds
of the foregoing, including licenses, royalties, income, payments,
claims,
damages, and proceeds of suit.
"UCC" shall mean the Uniform Commercial Code as in effect from time
to time
in the State of New York or, when the context implies, the Uniform
Commercial
Code as in effect from time to time in any other applicable
jurisdiction.
"United States" shall mean the United States of America.
1.2 Definitions; Interpretation. All capitalized terms used
herein
(including the preamble and recitals hereto) and not otherwise
defined herein
shall have the meanings ascribed thereto in the Credit Agreement
or, if not
defined therein, in the UCC. References to
7
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"Sections," "Exhibits" and "Schedules" shall be to Sections,
Exhibits and
Schedules, as the case may be, of this Agreement unless otherwise
specifically
provided. Section headings in this Agreement are included herein
for convenience
of reference only and shall not constitute a part of this Agreement
for any
other purpose or be given any substantive effect. Any of the terms
defined
herein may, unless the context otherwise requires, be used in the
singular or
the plural, depending on the reference. The use herein of the word
"include" or
"including", when following any general statement, term or matter,
shall not be
construed to limit such statement, term or matter to the specific
items or
matters set forth immediately following such word or to similar
items or
matters, whether or not nonlimiting language (such as "without
limitation" or
"but not limited to" or words of similar import) is used with
reference thereto,
but rather shall be deemed to refer to all other items or matters
that fall
within the broadest possible scope of such general statement, term
or matter. If
any conflict or inconsistency exists between this Agreement and the
Credit
Agreement, the Credit Agreement shall govern. All references herein
to
provisions of the UCC shall include all successor provisions under
any
subsequent version or amendment to any Article of the UCC.
SECTION 2 GRANT OF SECURITY
2.1 Grant of Security. Each Grantor hereby grants to the Secured
Party
a security interest and continuing lien on all of such Grantor's
right, title
and interest in, to and under all personal property of such Grantor
including,
but not limited to the following, in each case whether now owned or
existing or
hereafter acquired or arising and wherever located (all of which
being
hereinafter collectively referred to as the "Collateral"):
(a) Accounts;
(b) Chattel Paper;
(c) Documents;
(d) General Intangibles;
(e) Goods;
(f) Instruments;
(g) Insurance;
(h) Intellectual Property;
(i) Investment Related Property;
(j) Letter of Credit Rights;
(k) Money;
(l) Receivables and Receivable Records;
8
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(m) Commercial Tort Claims;
(n) to the extent not otherwise included above, all Collateral
Records, Collateral Support and Supporting Obligations relating to
any of the
foregoing; and
(o) to the extent not otherwise included above, all Proceeds,
products, accessions, rents and profits of or in respect of any of
the
foregoing.
2.2 Certain Limited Exclusions. Notwithstanding anything herein to
the
contrary, in no event shall the security interest granted under
Section 2.1
hereof attach to any lease, license, contract, property rights or
agreement to
which any Grantor is a party or any of its rights or interests
thereunder if and
for so long as the grant of such security interest shall constitute
or result in
(i) the abandonment, invalidation or unenforceability of any right,
title or
interest of any Grantor therein or (ii) in a breach or termination
pursuant to
the terms of, or a default under, any such lease license, contract
property
rights or agreement (other than to the extent that any such term
would be
rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or
9-409 of the
UCC (or any successor provision or provisions) of any relevant
jurisdiction or
any other applicable law (including the Bankruptcy Code) or
principles of
equity), provided however that such security interest shall attach
immediately
at such time as the condition causing such abandonment,
invalidation or
unenforceability shall be remedied and to the extent severable,
shall attach
immediately to any portion of such Lease, license, contract,
property rights or
agreement that does not result in any of the consequences specified
in (i) or
(ii) above. It is the intention of Grantors (other than Company)
and Secured
Party that this Agreement not constitute a fraudulent transfer or
fraudulent
conveyance under any state or federal law that may be applied
hereto. Each
Grantor (other than Company) and, by its acceptance hereof, Secured
Party hereby
acknowledges and agrees that, notwithstanding any other provision
of this
Agreement: (a) the indebtedness secured hereby shall be limited to
the maximum
amount of indebtedness that can be incurred or secured by such
Grantor without
rendering this Agreement subject to avoidance under Section 548 of
the United
States Bankruptcy Code or any comparable provisions of any
applicable state or
federal law, and (b) the Collateral pledged by such Grantor
hereunder shall be
limited to the maximum amount of Collateral that can be pledged by
such Grantor
without rendering this Agreement subject to avoidance under Section
548 of the
United States Bankruptcy Code or any comparable provisions of any
applicable
state or federal law.
SECTION 3 SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE
3.1 Security for Obligations. This Agreement secures, and the
Collateral is collateral security for, the prompt and complete
payment or
performance in full when due, whether at stated maturity, by
required
prepayment, declaration, acceleration, demand or otherwise
(including the
payment of 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. Section
362(a) (and
any successor provision thereof)), of all Guaranteed Obligations
(as defined in
the Second Lien Guaranty) with respect to every Grantor (the
"Secured
Obligations").
3.2 Continuing Liability Under Collateral. Notwithstanding
anything
herein to the contrary, (i) each Grantor shall remain liable for
all obligations
under the Collateral
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and nothing contained herein is intended or shall be a delegation
of duties to
the Secured Party or any Lender Party and (ii) each Grantor shall
remain liable
under each of the agreements included in the Collateral, including
any
agreements relating to Pledged Partnership Interests or Pledged LLC
Interests,
to perform all of the obligations undertaken by it thereunder all
in accordance
with and pursuant to the terms and provisions thereof and neither
the Secured
Party nor any Lender Party shall have any obligation or liability
under any of
such agreements by reason of or arising out of this Agreement or
any other
document related thereto nor shall the Secured Party nor any Lender
Party have
any obligation to make any inquiry as to the nature or sufficiency
of any
payment received by it or have any obligation to take any action to
collect or
enforce any rights under any agreement included in the Collateral,
including any
agreements relating to Pledged Partnership Interests or Pledged LLC
Interests,
and (iii) the exercise by the Secured Party of any of its rights
hereunder shall
not release any Grantor from any of its duties or obligations under
the
contracts and agreements included in the Collateral.
SECTION 4 REPRESENTATIONS AND WARRANTIES AND COVENANTS
4.1 Generally.
(a) Representations and Warranties. Each Grantor hereby
represents and warrants that:
(i) it owns the Collateral purported to be owned by it or
otherwise has the rights it purports to have in each item of
Collateral
and,
as to all Collateral whether now existing or hereafter acquired,
will
continue to own or have such rights in each item of the Collateral,
in each
case
free and clear of any and all Liens, rights or claims of all
other
Persons other than Liens permitted under Section 6.02 of the
Credit
Agreement;
(ii) it has indicated on Schedule 4.1 (A) (as such schedule
may
be amended or supplemented from time to time): (w) the type of
organization of such Grantor, (x) the jurisdiction of organization
of such
Grantor, (y) its organizational identification number and (z)
the
jurisdiction where the chief executive office or its sole place of
business
is
(or the principal residence if such Grantor is a natural person),
and
for
the one-year period preceding the date hereof has been,
located.
(iii) the full legal name of such Grantor is as set forth on
Schedule 4.1(A) and it has not done in the last five (5) years, and
does
not
do, business under any other name (including any trade-name or
fictitious business name) except for those names set forth on
Schedule
4.1(B) (as such schedule may be amended or supplemented from time
to time);
(iv) except as provided on Schedule 4.1(C), it has not
changed its name, jurisdiction of organization, chief executive
office or
sole
place of business (or principal residence if such Grantor is a
natural
person) or its corporate structure in any way (e.g, by merger,
consolidation, change in corporate form or otherwise) within the
past five
(5)
years;
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(v) it has not within the last five (5) years become bound
(whether as a result of merger or otherwise) as debtor under a
security
agreement entered into by another Person, which has not heretofore
or
contemporaneously herewith been terminated;
(vi) upon the filing of all UCC financing statements naming
each
Grantor as "debtor" and the Secured Party as "secured party"
and
describing the Collateral in the filing offices set forth opposite
such
Grantor's name on Schedule 4.1(D) hereof (as such schedule may be
amended
or
supplemented from time to time) and other filings delivered by
each
Grantor, upon execution of a control agreement substantively in the
form of
Exhibit B hereto with respect to any Deposit Account, and upon
consent of
the
issuer with respect to Letter of Credit Rights, the security
interests
granted to the Secured Party
hereunder constitute valid and perfected Liens
prior to all other liens (other than the Liens granted pursuant to
the
First Lien Security Agreement and the First Lien Credit Agreement
(in
accordance with the provisions of the Intercreditor Agreement), the
other
Liens permitted pursuant to Section 6.02 of the Credit Agreement
which have
priority as a matter of law and Liens permitted under Section 6.02
of the
Credit Agreement) on all of the Collateral;
(vii) all actions and consents, including all filings,
notices, registrations and recordings necessary or desirable for
the
exercise by the Secured Party of the voting or other rights
provided for in
this
Agreement or the exercise of remedies in respect of the
Collateral
have
been made or obtained;
(viii) other than the financing statements filed in favor of
the
Secured Party and the First Lien Collateral Agent, no effective
UCC
financing statement, fixture filing or other instrument similar in
effect
under any applicable law covering all or any part of the Collateral
is on
file
in any filing or recording office except for financing statements
for
which proper termination statements have been delivered to the
Secured
Party for filing;
(ix) no authorization, approval or other action by, and no
notice to or filing with, any Governmental Authority or regulatory
body is
required for either (i) the pledge or grant by any Grantor of the
Liens
purported to be created in favor of the Secured Party hereunder or
(ii) the
exercise by Secured Party of any rights or remedies in respect of
any
Collateral (whether specifically granted or created hereunder or
created or
provided for by applicable law), except (A) for the filings
contemplated by
clause (vii) above and (B) as may be required, in connection with
the
disposition of any Investment Related Property, by laws generally
affecting
the
offering and sale of Securities;
(x) each Receivable (a) is and will be the legal, valid and
binding obligation of the Account Debtor in respect thereof,
representing
an
unsatisfied obligation of such Account Debtor, (b) is and will
be
enforceable in accordance with its terms, (c) is not and will not
be
subject to any setoffs, defenses, taxes, counterclaims (except with
respect
to
refunds, returns and allowances in the ordinary course of business
with
respect to damaged merchandise) and (d)
