EXHIBIT 10.61
SCHEDULE
to the
ISDA MASTER AGREEMENT
dated as of
August 27, 2007
between
X. XXXX & COMPANY,
a general partnership organized under the laws of the State of New York
("Xxxx"),
and
PACIFIC ENERGY ALASKA OPERATING, LLC
a Delaware limited liability company
("Counterparty").
Part 1. Termination Provisions
(a) "Specified Entity"
(i) means, in relation to Aron, Goldman, Sachs & Co., Xxxxxxx Xxxxx
Capital Markets, L.P., Xxxxxxx Sachs International, Xxxxxxx Xxxxx
(Japan) Ltd., Xxxxxxx Sachs International Bank, Xxxxxxx Xxxxx (Asia)
Finance, Xxxxxxx Sachs Financial Markets, L.P., Xxxxxxx Xxxxx Xxxxx
Inc. et Cie, Xxxxxxx Sachs Mitsui Marine Derivative Products, L.P.,
Xxxxxxx, Xxxxx & Co. oHG, X. Xxxx & Company (Singapore) Pte., and X.
Xxxx & Company (U.K.) for the purpose of Section 5(a)(v), and shall
not apply for purposes of Sections 5(a)(vi), 5(a)(vii) and 5(b)(iv);
and
(ii) means, in relation to Counterparty, all Affiliates of Counterparty for
the purpose of Sections 5(a)(v), 5(a)(vi), 5(a)(vii) and 5(b)(iv).
(b) "Specified Transaction". The term "Specified Transaction" in Section 14 of
the Agreement is amended in its entirety as follows:
"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter
entered into between one party to this Agreement (or any Credit Support
Provider of such party or any applicable Specified Entity of such party)
and the other party to this Agreement (or any Credit Support Provider of
such other party or any applicable Specified Entity of such other party)
(i) which is a rate swap transaction, swap option, basis swap, forward rate
transaction, commodity swap, commodity option, commodity spot transaction,
equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency
rate swap transaction, currency option, weather swap, weather derivative,
weather option, credit protection transaction, credit swap, credit default
swap, credit default option, total return swap, credit spread transaction,
repurchase transaction, reverse repurchase transaction, buy/sell-back
transaction, securities lending transaction, or forward purchase or sale of
a security, commodity or other financial instrument or interest (including
any option with respect to any of these transactions) or (ii) which is a
type of
transaction that is similar to any transaction referred to in clause (i)
that is currently, or in the future becomes, recurrently entered into the
financial markets (including terms and conditions incorporated by reference
in such agreement) and that is a forward, swap, future, option or other
derivative on one or more rates, currencies, commodities, equity securities
or other equity instruments, debt securities or other debt instruments, or
economic indices or measures of economic risk or value, (b) any combination
of these transactions and (c) any other transaction identified as a
Specified Transaction in this agreement or the relevant confirmation."
(c) The "Cross Default" provisions of Section 5(a)(vi) will apply to Xxxx and
will apply to Counterparty, provided that with respect to Xxxx only, (i)
the phrase "or becoming capable at such time of being declared" shall be
deleted from clause (1) of such Section 5(a)(vi); and (ii) the following
language shall be added to the end thereof: "Notwithstanding the foregoing,
a default under subsection (2) hereof shall not constitute an Event of
Default if (i) the default was caused solely by error or omission of an
administrative or operational nature; (ii) funds were available to enable
the party to make the payment when due; and (iii) the payment is made
within two Local Business Days of such party's receipt of written notice of
its failure to pay."
"Specified Indebtedness" will have the meaning specified in Section 14 of
the Agreement.
"Threshold Amount" means in relation to Xxxx, US$50,000,000 (or its
equivalent in another currency) and in relation to Counterparty,
US$1,000,000 (or its equivalent in another currency).
(d) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will apply to
Xxxx and will apply to Counterparty.
(e) The "Automatic Early Termination" provision of Section 6(a) will not apply
to Xxxx and will not apply to Counterparty.
(f) Payments on Early Termination. For the purpose of Section 6(e):
(i) Loss will apply.
(ii) The Second Method will apply.
(g) "Termination Currency" means United States Dollars.
(h) The parties agree to amend the following subsections of Section 5(a) as
follows:
(i) clause (i): in the third line of this clause, delete the word "third"
and insert the word "first;"
(ii) clause (ii):, in the fifth line of this clause, delete the word
"thirtieth" and insert the word "fifth;" and
(iii) clause (vii)(4): delete, following the word "liquidation" in line 9,
the clause beginning with "and, in the case of and ending with the
word "thereof in line 13; and in Clause (vii)(7): delete, following
the word "assets" in line 19, the clause beginning with "and such
secured party" and ending with the word "thereafter" in line 21, to
eliminate the 30-day grace period.
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(iv) The parties also agree to add a new clause (ix) as follows:
(ix) Adequate Assurance. A party ("X") fails to provide adequate
assurance of its ability to perform all of its outstanding
obligations hereunder to the other party ("Y") on or before 48
hours after a request for such assurance is made by Y when Y has
reasonable grounds for insecurity.
(i) Additional Termination Event will apply. It will constitute an Additional
Termination Event hereunder upon the occurrence of any of the following
events:
(i) Any of the following occurs with respect to Counterparty's
obligations to Xxxx under this Agreement:
(A) such obligations shall cease to be subject to a perfected
first priority Lien (as defined in the Senior Credit Agreement)
on the Collateral (as defined in the Senior Credit Agreement)
pursuant to and in accordance with the Senior Credit Agreement
and the Security Documents (as defined in the Senior Credit
Agreement);
(B) such obligations shall cease to be equally and ratably
secured with Counterparty's obligations to the Secured Parties
holding a first priority Lien pursuant to and in accordance with
the Senior Credit Agreement and the Security Documents;
(C) such obligations shall cease to rank at least pari passu with
Counterparty's obligations to the Secured Parties holding a first
priority Lien pursuant to and in accordance with the Senior
Credit Agreement and the Security Documents; or
(D) such obligations shall cease to be guaranteed pursuant to the
guarantees from each of the Guarantors in favor of the Secured
Parties pursuant to and in accordance with the Senior Credit
Agreement;
(iv) Any collateral under the Security Documents is released at any
time, unless Xxxx shall have consented in writing prior to such
release as set forth in the Security Documents; or
(v) The Senior Credit Agreement is replaced by another credit
facility, or amended and/or amended and restated to increase the
funded indebtedness including any borrowing base or other
redeterminations (from such amount as of the date of this
Agreement) or commitments or to add borrowing tranches or Xxxx or
its affiliates is not a lender under such facility, and Xxxx or
its affiliates indicated its agreement to be such a lender but
such agreement was declined by Counterparty or any Affiliate of
Counterparty or by any administrative agent, syndication agent,
documentation agent, bookrunner or any comparable party with the
right to decline participation in such facility; provided,
however, that any such event shall not constitute an Additional
Termination Event if such terms are acceptable to Xxxx in its
sole discretion.
For the purpose of the foregoing Termination Events, the Affected Party
shall be Counterparty.
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As used herein and throughout this Agreement, the following terms shall have the
following meanings:
"Senior Credit Agreement" means that certain First Lien Credit Agreement,
dated as of the date hereof, by and among Counterparty, as Borrower,
Pacific Energy Alaska Holdings, LLC ("Holdings") and certain Subsidiaries
of Counterparty and Holdings, various Lenders party thereto, Silver Point
Finance, LLC, as Administrative Agent, Collateral Agent and Sole Lead
Arranger; and X. Xxxx, as Documentation Agent, as such Senior Credit
Agreement is in effect on the date hereof and without giving effect to any
further amendments, modifications or supplements thereto, or waiver or
termination thereof, after the date hereof, provided that if Xxxx (in its
sole discretion) consents to any such amendment, modification, supplement
or waiver expressly for purposes this Agreement, then the term "Senior
Credit Agreement" shall refer to the Senior Credit Agreement as so amended,
modified, supplemented or waived.
(j) Early Termination. Notwithstanding anything to the contrary in Section 6(a)
or Section 6(b), the parties agree that, except with respect to
Transactions (if any) that are subject to Automatic Early Termination under
Section 6(a), the Non-defaulting Party or the party that is not the
Affected Party (in a case where a Termination Event under Section 5(b)(iv)
, or an Additional Termination Event for which there is a single Affected
Party, has occurred) is not required to terminate the Transactions on a
single day, but rather may terminate the Transactions over a commercially
reasonable period of time (not to exceed ten days) (the "Early Termination
Period"). The last day of the Early Termination Period shall be the Early
Termination Date for purposes of Section 6; provided, however, that
interest shall accrue on the Transactions terminated during the Early
Termination Period prior to the Early Termination Date at the Non-default
Rate.
(k) Each of the Events of Default (as such term is defined in the Senior Credit
Agreement) contained in Article 7 (together with the relevant provisions of
any other Section or Sections to which they refer, including definitions)
of the Senior Credit Agreement is hereby incorporated herein by this
reference and made a part of this Agreement to the same extent as if the
Senior Credit Agreement were set forth in full herein, provided that any
reference in such Events of Default to the "Agent", "Bank", "Administrative
Agent", "Lender(s)", or the "Required Lenders", or other like term, shall
be deemed to be a reference to Xxxx. The occurrence at any time of any such
Event of Default under the Senior Credit Agreement will constitute an Event
of Default with respect to Counterparty for the purposes of Section 5(a) of
the Agreement. If for any reason such Senior Credit Agreement should for
any reason terminate, such Events of Default will be incorporated herein as
they existed immediately prior to such event.
Part 2. Tax Representations
(a) Payer Tax Representations. For the purposes of Section 3(e), Xxxx and
Counterparty make the following representation:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on
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account of any Tax from any payment (other than interest under Section
2(e), 6(d)(ii), or 6(e) of this Agreement) to be made by it to the other
party under this Agreement. In making this representation, it may rely on
(i) the accuracy of any representations made by the other party pursuant to
Section 3(f) of this Agreement, (ii) the satisfaction of the agreement
contained in Section 4(a)(i) or 4(a)(iii) of this Agreement, and the
accuracy and effectiveness of any document provided by the other party
pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement, and (iii) the
satisfaction of the agreement of the other party contained in Section 4(d)
of this Agreement, provided that it shall not be a breach of this
representation where reliance is placed on clause (ii) and the other party
does not deliver a form or document under Section 4(a)(iii) by reason of
material prejudice to its legal or commercial position.
(b) Payee Tax Representations. For the purposes of Section 3(f), Counterparty
makes the following representations:
(i) It is not acting as an agent or intermediary for any foreign person
with respect to the payments received or to be received by it in
connection with this Agreement.
(ii) It is a United States person within the meaning of Section 7701(a)(30)
of the Internal Revenue Code of 1986, as amended.
Part 3. Agreement to Deliver Documents
(a) For the purpose of Section 4(a), Tax forms, documents, or certificates to
be delivered are:
Tax forms, documents, or certificates to be delivered are:
Party required to Date by which
deliver document Forms/Documents/Certificates to be delivered
----------------- ---------------------------- ---------------------------
Counterparty United States Internal (i) On a date which is
Revenue Service Form W-9, or before the first Scheduled
any successor form. Payment Date under this
Agreement, (ii) promptly upon
reasonable demand by Xxxx,
and (iii) promptly upon
learning that any such form
previously provided by
Counterparty has become
obsolete, incorrect, or
ineffective.
(b) Other documents to be delivered are:
Covered by
Date by which to be Section 3(d)
Party required to deliver Form/Document/Certificate delivered Representation
------------------------- ------------------------------------ --------------------------------------- --------------
Xxxx and Counterparty Evidence of authority of signatories Upon or promptly following execution of Yes
this Agreement
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Covered by
Date by which to be Section 3(d)
Party required to deliver Form/Document/Certificate delivered Representation
------------------------- ------------------------------------ --------------------------------------- --------------
Xxxx Any Credit Support Document Within three (3) Business Days No
specified in Part 4(f) herein following execution of this Agreement
Counterparty Any Credit Support Document On the date of execution of this No
specified in Part 4(f) herein Agreement
Xxxx and Counterparty Most recent annual audited and Promptly following reasonable demand by Yes
quarterly financial statements of the other party
the party or, with respect to Xxxx,
its Credit Support Provider
Counterparty Certified resolutions of its board Upon execution of this Agreement Yes
of directors or other governing
body
Counterparty Such documents, reports and At such times such documents, reports Yes
certificates as the Counterparty or certificates, as the case may be,
shall be required to provide to the are required to be delivered by the
Lender under the Senior Credit Counterparty under the Senior Credit
Agreement Agreement
Counterparty Legal opinion with respect to Upon execution of this Agreement Yes
Counterparty
Part 4. Miscellaneous
(a) Addresses for Notices. For the purpose of Section 12(a):
(i) Address for notices or communications to Xxxx:
Address: X. Xxxx & Company
00 Xxxxx Xxxxxx Xxx Xxxx,
Xxx Xxxx 00000
Attention: Energy Operations
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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(ii) Address for notices or communications to Counterparty:
Address:
Attention:
Telephone:
Facsimile:
(b) Process Agent. For the purpose of Section 13(c):
Xxxx appoints as its Process Agent, not applicable.
Counterparty appoints as its Process Agent: in the Borough of Manhattan,
City, County and State of New York:
C. T. Corporation System
000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
(c) Offices. The provisions of Section 10(a) will apply to this Agreement.
(d) Multibranch Party. For the purpose of Section 10(c):
Xxxx is not a Multibranch Party.
Counterparty is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Xxxx.
(f) Credit Support Document. Any guaranty or other form of credit support
provided on behalf of Counterparty at any time shall constitute a Credit
Support Document with respect to the obligations of Counterparty. Details
of any other Credit Support Document, each of which is incorporated by
reference in, and made part of, this Agreement and each Confirmation
(unless provided otherwise in a Confirmation) as if set forth in full in
this Agreement or such Confirmation:
(i) Guaranty by The Xxxxxxx Sachs Group, Inc. ("Goldman Group") in favor
of Counterparty as beneficiary thereof shall constitute a Credit
Support Document with respect to the obligations of Xxxx.
(ii) the Senior Credit Agreement and the Security Documents.
(iii) each of the Guaranties (as defined in the Senior Credit Agreement).
(g) Credit Support Provider.
Credit Support Provider means in relation to Xxxx, Goldman Group.
Credit Support Provider means in relation to Counterparty, the Guarantors
(as defined in the Senior Credit Agreement) and any party that at any time
provides a guaranty or other form of credit support on behalf of
Counterparty.
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(h) Governing Law. Section 13(a) is hereby replaced with the following:
(a) Governing Law. This Agreement and each Transaction entered into
hereunder will be governed by, and construed and enforced in
accordance with, the law of the State of New York without reference to
its choice of law doctrine.
(i) Jurisdiction. Section 13(b) is hereby amended by:
(i) deleting in the second line of subparagraph (i) thereof the word
"non-"; and
(ii) deleting the final paragraph thereof.
(j) Netting of Payments. Subparagraph (ii) of Section 2(c) will not apply to
Transactions. Notwithstanding anything to the contrary in Section 2(c),
unless otherwise expressly agreed by the parties, the netting provided for
in Section 2(c) will not apply separately to any pairings of branches or
Offices through which the parties make and receive payments or deliveries.
Part 5. Other Provisions
(a) Accuracy of Specified Information. Section 3(d) is hereby amended by adding
in the third line thereof after the word "respect" and before the period,
the phrase "or, in the case of audited or unaudited financial statements, a
fair presentation of the financial condition of the relevant person."
(b) Scope of Agreement. Any transaction outstanding between the parties at the
date this Agreement comes into force or entered into by the parties at or
after the date this Agreement comes into force that is: (1) an FX
Transaction or a Currency Option Transaction as defined in the 1998 FX and
Currency Option Definitions (the "FX Definitions"), as published by the
International Swaps and Derivatives Association, Inc. ("ISDA"), the
Emerging Markets Traders Association, and the Foreign Exchange Committee,
unless otherwise specified in the relevant confirmation, and (2) a
transaction between the parties of the type set forth in the definition of
"Specified Transaction" herein unless otherwise specified in the relevant
confirmation relating to such Specified Transaction or unless otherwise
agreed by the parties, will constitute a "Transaction" for the purposes of
this Agreement. Transactions of the type set forth in (1) above will be
deemed to incorporate the FX Definitions.
(c) Additional Representations. The parties agree to amend Section 3 by adding
new Sections 3(g), (h), (i), and (j) as follows:
(g) Eligible Contract Participant. It is an "eligible contract
participant" as defined in the U.S. Commodity Exchange Act.
(h) Non-Reliance. It is acting for its own account, and it has made its
own independent decisions to enter into that Transaction and as to
whether that Transaction is appropriate or proper for it based upon
its own judgment and upon advice from such advisers as it has deemed
necessary. It is not relying on any communication (written or oral) of
the other party as investment advice or as a recommendation to enter
into that Transaction; it being understood that information and
explanations related to the terms and conditions of a Transaction
shall not be considered investment advice or a recommendation to enter
into that Transaction. No communication (written or oral) received
from the other party shall be deemed to be an assurance or guarantee
as to the expected results of that Transaction.
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(i) Assessment and Understanding. It is capable of assessing the merits of
and understanding (on its own behalf or through independent
professional advice), and understands and accepts, the terms,
conditions and risks of that Transaction. It is also capable of
assuming, and assumes, the risks of that Transaction.
(j) Status of Parties. The other party is not acting as a fiduciary for or
an adviser to it in respect of that Transaction.
(d) Transfer. The following amendments are hereby made to Section 7:
(i) In the third line, insert the words "which consent will not be
arbitrarily withheld or delayed," immediately before the word
"except"; and
(ii) in clause (a), insert the words "or reorganization, incorporation,
reincorporation, or reconstitution into or as," immediately before the
word "another."
(e) Consent to Recording. Each party consents to the recording of telephone
conversations between the trading, marketing and other relevant personnel
of the parties, with or without the use of a warning tone, and their
Affiliates in connection with this Agreement or any potential Transaction.
(f) Definitions. The following amendments are hereby made to Section 14:
(i) The definition of "Termination Currency Equivalent" in Section 14 is
hereby amended by deleting in its entirety the text after the first
three lines thereof and replacing it with the following:
"by the party making the relevant determination in any commercially
reasonable manner as being required to purchase such amount of such
Other Currency as at the relevant Early Termination Date, or, if the
relevant amount determined in accordance with Section 6(e) is
determined as of a later date, that later date, for value on the date
the payment or settlement payment is due."
(g) Set-off. The parties agree to amend Section 6 by adding a new Section 6(f)
as follows:
"(f) Upon the occurrence of an Event of Default or Termination Event
under Section 5(b)(iv) with respect to a party ("X"), the other party
("Y") will have the right (but not be obliged) without prior notice to
X or any other person to set-off or apply any obligation of X owed to
Y (or any Affiliate of Y) (whether or not matured or contingent and
whether or not arising under this Agreement, and regardless of the
currency, place of payment or booking office of the obligation)
against any obligation of Y (or any Affiliate of Y) owed to X (whether
or not matured or contingent and whether or not arising under this
Agreement, and regardless of the currency, place of payment or booking
office of the obligation). Y will give notice to the other party of
any set-off effected under this Section 6(f).
Amounts (or the relevant portion of such amounts) subject to set-off
may be converted by Y into the Termination Currency at the rate of
exchange at which such party would be able, acting in a reasonable
manner and in good faith, to purchase the relevant amount of such
currency.
If any obligation is unascertained, Y may in good faith estimate that
obligation and set-off in respect of the estimate, subject to the
relevant party accounting to the other when the obligation is
ascertained.
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Nothing in this Section 6(f) shall be effective to create a charge or other
security interest. This Section 6(f) shall be without prejudice and in
addition to any right of set-off, combination of accounts, lien or other
right to which any party is at any time otherwise entitled (whether by
operation of law, contract or otherwise)."
(h) Definitions. This Agreement, each Confirmation and each Transaction is
subject to the 2005 ISDA Commodity Derivatives Definitions, as published by
ISDA (together, the "Definitions"), and will be governed in all respects by
the Definitions (except that references to "Swap Transactions" in the
Definitions will be deemed to be references to "Transactions"). The
Definitions are incorporated by reference in, and made part of, this
Agreement and each Confirmation as if set forth in full in this Agreement
and such Confirmations. In the event of any inconsistency between the
provisions of this Agreement and the Definitions, this Agreement will
prevail. Subject to Section l(b), in the event of any inconsistency between
the provisions of any Confirmation, this Agreement, and the Definitions,
such Confirmation will prevail for the purpose of the relevant Transaction.
(i) Incorporation of Covenants by Reference. Each of the covenants contained in
Articles 5 and 6 (together with the relevant provisions of any other
Section or Sections to which they refer, including definitions) of the
Senior Credit Agreement is hereby incorporated herein by this reference and
made a part of this Agreement to the same extent as if the Senior Credit
Agreement were set forth in full herein, provided that any reference in
such provisions to, "Bank", "Deposit Bank", the "Administrative Agent," the
"Agent", the "Required Lenders" and the "Lenders" shall be deemed to be a
reference to Xxxx. If for any reason such Senior Credit Agreement should
for any reason terminate, such covenants will be incorporated herein as
they existed immediately prior to such event. Each such incorporated
covenant will be deemed an agreement or obligation for the purposes of
Section 5(a)(ii) of the Agreement.
(j) Waiver of Trial by Jury. Each party hereby irrevocably waives any and all
right to trial by jury in any Proceeding.
(k) Confirmations. Counterparty shall be deemed to have agreed to the terms
contained in any Confirmation (as amended and revised) sent by Xxxx to
Counterparty unless Counterparty objects to such terms within three (3)
Business Days of receipt.
Part 6. Disruption Fallbacks
(a) The following "Disruption Fallbacks" specified in Section 7.5(c) of
the Definitions shall apply, in the following order, except as
otherwise specified in the relevant Confirmation:
(i) "Fallback Reference Price";
(ii) "Postponement", with two (2) Commodity Business Days as the
Maximum Days of Disruption;
(iii) Negotiated Fallback;
(iv) "Fallback Reference Dealers"; and
(v) "Calculation Agent Determination".
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(b) Section 7.5(e) of the Commodity Definitions is hereby deleted in its
entirety.
(c) Section 6.2(b) of the Commodity Definitions is hereby amended by
deleting the words ", as determined on the Trade Date of the
Transaction as of the time of execution of the Transaction".
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IN WITNESS WHEREOF, the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
X. XXXX & COMPANY PACIFIC ENERGY ALASKA OPERATING, LLC,
/s/ Xxxxx Xxxxxxxxx
------------------------------ --------------------------------------
Name: Xxxxx Xxxxxxxxx Name:
Title: Attorney In Fact Title:
Date: Date:
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IN WITNESS WHEREOF, the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
X. XXXX & COMPANY PACIFIC ENERGY ALASKA OPERATING, LLC,
/s/ XXXXXX XXXXX
------------------------------ --------------------------------------
Name: Name: XXXXXX XXXXX
Title: Title: PRESIDENT
Date: Date:
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