UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

____________________

 

FORM 8-K

____________________

 

CURRENT REPORT

 

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): March 12, 2015

 

EPL OIL & GAS, INC.

(Exact name of registrant as specified in its charter)

____________________

  

     
Delaware 001-16179 72-1409562
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
     

1021 Main Street,

Suite 2626,

Houston, Texas 77002 

     
Registrant’s telephone number, including area code: (713) 351-3000
     
Not Applicable
Former name or former address, if changed since last report

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

Intercompany Loan

 

On March 12, 2015, in connection with the private placement of $1.45 billion in aggregate principal amount of Energy XXI Gulf Coast, Inc.’s (“EGC”) 11.000% Senior Secured Second Lien Notes due 2020, EPL Oil & Gas, Inc. (the “Company”) entered into a $325.0 million secured second lien promissory note between the Company, as the maker, and EGC, as the payee (the “Promissory Note”). Proceeds from the Promissory Note were used by the Company to repay a like amount of the currently outstanding borrowings under its tranche of EGC’s revolving credit facility. The Promissory Note bears interest at an annual rate of 10%, has a maturity date of October 9, 2018, and is secured by a second priority lien on certain assets of the Company that secure the Company’s obligations under the revolving credit facility. EGC may release the collateral securing the Promissory Note at any time.

 

A copy of the Promissory Note is filed as Exhibit 10.1 to this Form 8-K and is incorporated herein by reference. The description of the Promissory Note in this Form 8-K is a summary and is qualified in its entirety by the terms of the Promissory Note. Additionally, various agreements pertaining to the intercompany loan arrangement provided for in the Promissory Note are filed as Exhibits 10.2 and 10.3 and are incorporated herein by reference.

 

Item 2.03 – Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The information included in Item 1.01 of this Form 8-K is incorporated herein by reference.

 

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits

 

Exhibit No.

Description

10.1 Secured Second Lien Promissory Note, dated as of March 12, 2015, issued by EPL Oil & Gas, Inc., as the Maker, in favor of Energy XXI Gulf Coast, Inc., as the Payee.
10.2 Guaranty, dated as of March 12, 2015, issued by the subsidiaries of EPL Oil & Gas, Inc., in favor of Energy XXI Gulf Coast, Inc., as Lender.
10.3 Second Lien Pledge and Security Agreement and Irrevocable Proxy, dated as of March 12, 2015, by EPL Oil & Gas, Inc. and each Subsidiary Guarantor Party thereto, in favor of Energy XXI Gulf Coast, Inc., as Lender.

 

 
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  EPL OIL & GAS, INC.  
       
  By: /s/ Rick Fox  
    Rick Fox  
March 17, 2015   Chief Financial Officer  

 

 
 

 

Exhibit Index

 

Exhibit No.

Description

10.1 Secured Second Lien Promissory Note, dated as of March 12, 2015, issued by EPL Oil & Gas, Inc., as the Maker, in favor of Energy XXI Gulf Coast, Inc., as the Payee.
10.2 Guaranty, dated as of March 12, 2015, issued by the subsidiaries of EPL Oil & Gas, Inc., in favor of Energy XXI Gulf Coast, Inc., as Lender.
10.3 Second Lien Pledge and Security Agreement and Irrevocable Proxy, dated as of March 12, 2015, by EPL Oil & Gas, Inc. and each Subsidiary Guarantor Party thereto, in favor of Energy XXI Gulf Coast, Inc., as Lender.  

  

 



Exhibit 10.1

 

REFERENCE IS MADE TO THE INTERCREDITOR AGREEMENT, DATED AS OF MARCH 12, 2015, BETWEEN THE ROYAL BANK OF SCOTLAND plc, AS PRIORITY LIEN AGENT (AS DEFINED THEREIN) AND ENERGY XXI GULF COAST, INC., A DELAWARE CORPORATION (“EXXI”) (THE “INTERCREDITOR AGREEMENT”). EXXI, BY ITS ACCEPTANCE OF THIS SECURED SECOND LIEN PROMISSORY NOTE (A) CONSENTS TO THE SUBORDINATION OF LIENS PROVIDED FOR IN THE INTERCREDITOR AGREEMENT, (B) AGREES THAT IT WILL BE BOUND BY, AND WILL TAKE NO ACTIONS CONTRARY TO, THE PROVISIONS OF THE INTERCREDITOR AGREEMENT, (C) REPRESENTS AND WARRANTS THAT IT IS AUTHORIZED TO ENTER INTO THE INTERCREDITOR AGREEMENT AND (D) ACKNOWLEDGES AND AGREES THAT ITS ENTERING INTO THE INTERCREDITOR AGREEMENT IS A MATERIAL INDUCEMENT TO THE PRIORITY LIEN SECURED PARTIES (AS DEFINED IN THE INTERCREDITOR AGREEMENT) TO EXTEND CREDIT TO EXXI AND EPL OIL & GAS, INC. AND SUCH PRIORITY LIEN SECURED PARTIES ARE INTENDED THIRD PARTY BENEFICIARIES OF THE PROVISIONS OF THE INTERCREDITOR AGREEMENT.

 

THIS NOTE (THE “PROMISSORY NOTE”) HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). NEITHER THIS PROMISSORY NOTE NOR ANY INTEREST HEREIN MAY BE SOLD, OFFERED FOR SALE OR OTHERWISE TRANSFERRED WITHOUT REGISTRATION UNDER THE SECURITIES ACT EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.

 

EPL OIL & GAS, INC.

 

SECURED SECOND LIEN PROMISSORY NOTE

 

Wilmington, Delaware

 

March 12, 2015

 

Principal Amount: U.S. $325,000,000.00

 

FOR VALUE RECEIVED, EPL Oil & Gas, Inc., a Delaware corporation (the “Maker”), does hereby promise to pay to the order of Energy XXI Gulf Coast, Inc., a Delaware corporation (the “Payee”), in lawful money of the United States of America, on the Stated Maturity Date (as defined hereinafter), the principal amount of three hundred twenty-five million (U.S. $325,000,000.00) (the “Principal Amount”) or, if less, the unpaid principal amount hereof (the “Outstanding Principal Amount”), together with (a) interest on the Outstanding Principal Amount from time to time outstanding hereunder, payable on the Stated Maturity Date, at the Reference Rate (as defined hereinafter) and (b) interest on any overdue payment of Outstanding Principal Amount or interest, in either case payable on demand, at the rate per annum provided herein.

 

 
 

  

SECTION 1

 

DEFINITIONS

 

For purposes hereof, the following terms shall have the following meanings:

 

Bankruptcy” means, for any Person, such Person’s (a) becoming insolvent or generally failing to pay, or admitting in writing its inability or unwillingness generally to pay, debts as they become due, (b) application for, consent to, or acquiescence in the appointment of a trustee, receiver, sequestrator or other custodian for any substantial part of the property of such Person or making a general assignment for the benefit of such Person’s creditors, (c) in the absence of such application, consent or acquiescence, permitting or suffering to exist the appointment of a trustee, receiver, receiver manager, sequestrator or other custodian for a substantial part of such Person’s property, and such trustee, receiver, receiver manager, sequestrator or other custodian shall not be discharged within sixty (60) days, (d) permitting or suffering to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law or any dissolution, winding up or liquidation proceeding in respect of such Person, and, if any such case is not commenced by such Person, consenting to or acquiescing in such a case or proceeding or such case or proceeding results in the entry of an order for relief or remains undismissed for sixty (60) days; or (e) taking any action authorizing, or in furtherance of, any of the foregoing.

 

Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in Texas or New York are authorized or required by law to remain closed.

 

Credit Agreement” means the Second Amended and Restated First Lien Credit Agreement, dated as of May 5, 2011, among the Maker, the Payee, the lenders party thereto and The Royal Bank of Scotland plc, as administrative agent, as amended, supplemented, amended and restated or otherwise modified from time to time.

 

Default” means any Event of Default or any condition, occurrence or event which, after notice or lapse of time or both, would constitute an Event of Default.

 

Event of Default” has the meaning provided such term in Section 3.2.

 

Guaranty” means that certain Guaranty, dated as of March 12, 2015 made by the guarantor parties thereto in favor of the Payee.

 

- 2 -
 

  

Intercreditor Agreement” means the Intercreditor Agreement, dated as of March 12, 2015, between The Royal Bank of Scotland plc, as Priority Lien Agent (as defined therein), and EXXI, as amended, supplemented, amended and restated or otherwise modified from time to time.

 

Material Adverse Effect” means, in light of all circumstances prevailing at the time, a material adverse effect on (a) the business, assets, condition (financial or otherwise), operations, performance, properties or prospects of the Maker or the Maker and its Subsidiaries taken as a whole, (b) the rights and remedies of the Payee under any Second Lien Loan Document, (c) the ability of the Maker or any of its Subsidiaries to perform its Obligations under any Second Lien Loan Document, (d) the legality, validity or enforceability of this Promissory Note or any other Second Lien Loan Document or (e) the validity, perfection or priority of Liens with respect to any material portion of the Collateral in favor of the Payee.

 

Mortgage” means each mortgage, deed of hypothecation, debenture, pledge, deed of trust or agreement, if any, executed and delivered by Maker or one or more of its Subsidiaries in favor of Payee pursuant to the requirements of this Promissory Note in form and substance reasonably satisfactory to Payee, as applicable, under which a lien is granted on the real property and fixtures described therein, in each case as amended, supplemented, amended and restated or otherwise modified from time to time.

 

Obligations” means all obligations (monetary or otherwise, whether absolute or contingent, matured or unmatured) of the Maker and each other Obligor arising under or in connection with a Second Lien Loan Document and the principal of and premium, if any, and interest on such obligations.

 

Obligor” means, as the context may require, the Maker and each other Person that is a Subsidiary of the Maker that is obligated under any Second Lien Loan Document.

 

Reference Rate” means a rate of ten percent (10.0%) per annum.

 

Second Lien Loan Documents” means, collectively, this Promissory Note, the Pledge and Security Agreement, the Guaranty, the Mortgages and each other agreement, certificate, document or instrument delivered in connection with any Second Lien Loan Document, whether or not specifically mentioned herein or therein.

 

Stated Maturity Date” means October 9, 2018; provided that if the “Stated Maturity Date” under the Credit Agreement is accelerated to an earlier date pursuant to the terms thereof, then the Stated Maturity Date hereunder shall commensurately accelerate to such date that is one hundred eighty (180) days following the date of the then-accelerated “Stated Maturity Date” under the Credit Agreement.

 

- 3 -
 

  

Unless otherwise defined herein or the context otherwise requires, terms used in this Promissory Note, including its preamble and recitals, have the meanings provided in the Pledge and Security Agreement.

 

SECTION 2

 

PAYMENT OF PRINCIPAL AND INTEREST

 

2.1           Interest. Interest shall accrue on the Outstanding Principal Amount hereunder at a rate equal to the Reference Rate; provided, however, that upon the occurrence and during the continuance of any default by the Maker in the payment of any amount due under this Promissory Note or any other Second Lien Loan Document, interest shall accrue and be payable by the Maker on such Outstanding Principal Amount or such other amount due at a rate per annum equal to two percentage points (2%) above the Reference Rate. Accrued and unpaid interest shall be due and payable quarterly, on the fifth day following the end of each calendar quarter (or the first Business Day thereafter if such day is not a Business Day). Notwithstanding the foregoing, the first payment of accrued and unpaid interest under this Promissory Note shall be due on July 5, 2015, and not April 5, 2015. Interest shall be computed on the basis of a year of 360 days and for the actual number of days elapsed (including the first day but excluding the last day) occurring in the period for which payable.

 

2.2           Payment. All payments hereunder shall be made in immediately available funds by wire transfer to the Payee at the account designated by Payee.

 

2.3           Prepayment. Subject to the terms and conditions of the Intercreditor Agreement and to the extent, but only to the extent, permitted by the Credit Agreement, the Maker may at its option, and without any penalty or premium, prepay this Promissory Note in whole or in part at any time. Prepayments shall be applied first to accrued and unpaid costs, expenses and indemnities, then to accrued and unpaid interest, and then to the Outstanding Principal Amount.

 

2.4           Maximum Lawful Rate. Notwithstanding anything to the contrary contained in this Promissory Note, at no time shall the Maker be obligated or be required to pay interest on principal of this Promissory Note at a rate of interest that would be in excess of the maximum rate which the Maker is permitted by applicable law to contract or agree to pay. If the Maker would at any time be required or obligated to pay interest on principal of this Promissory Note at a rate in excess of such maximum rate, then the rate of interest under this Promissory Note shall be deemed to be immediately reduced to such maximum rate. Interest payable hereunder shall be computed at such maximum rate and any prior interest payments made in excess of such maximum rate shall be applied and shall be deemed to have been payments made in reduction of principal of this Promissory Note and thereafter the Payee shall refund any remaining excess to the Maker or as a court of competent jurisdiction may otherwise order.

 

- 4 -
 

 

2.5           Taxes. Any and all payments by the Maker hereunder shall be made free and clear of, and without deduction for, any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding taxes imposed on the Payee’s overall net income, including franchise taxes imposed on it in lieu of net income taxes, by the jurisdiction under the laws of which it is organized or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities in respect of payments hereunder being hereinafter referred to as “Taxes”). If the Maker shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.5) the Payee receives an amount equal to the sum it would have received had no such deduction been made, (ii) the Maker shall make such deduction and (iii) the Maker shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. In addition, the Maker shall pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery or registration of, performing under, or otherwise with respect to, this Promissory Note (hereinafter referred to as “Other Taxes”). The Maker shall indemnify the Payee for and hold the Payee harmless against the full amount of Taxes or Other Taxes (including, without limitation, taxes of any kind imposed by any jurisdiction on amounts payable under this Section 2.5) imposed on or paid by the Payee and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. Such indemnification shall be made within 30 days from the date the Payee makes written demand therefore. Within 30 days after the date of payment of any Taxes or Other Taxes, the Maker shall furnish to Payee the original or a certified copy of a receipt evidencing such payment. The Payee, from time to time hereafter as requested in writing by the Maker, agrees to provide (but only if the Payee is lawfully able to do so) to the Maker a copy of any form, document or other certification, appropriately completed, necessary for the Payee to be exempt from, or entitled to a reduced rate of, Taxes on payments pursuant to this Promissory Note.

 

- 5 -
 

  

SECTION 3

 

GUARANTY; SECURITY; DEFAULT

 

3.1           Subsidiary Guaranty and Security. Until paid in full in cash, the obligations of Maker under this Promissory Note shall be guaranteed by and secured by substantially all of Maker’s and its Subsidiaries’ assets, whether now owned or hereinafter acquired (the “Collateral”), including as set forth in that certain Second Lien Pledge and Security Agreement and Irrevocable Proxy, dated as of even date herewith, made by Maker and its Subsidiaries in favor of Payee (the “Pledge and Security Agreement”). Maker will execute any documents, Uniform Commercial Code Form UCC-1 financing statements and Uniform Commercial Code Form UCC-3 amendment or continuation statements (“Filing Statements”), agreements and instruments, and take all further action (including filing Mortgages) that may be required under applicable law, or that Payee may request, in order to effectuate the transactions contemplated by this Promissory Note and in order to grant, preserve, protect and perfect the validity and second priority of the liens created or intended to be created by this Promissory Note, such Pledge and Security Agreement and such Mortgages. In addition, from time to time, Maker will, and will cause each of its Subsidiaries to, at Maker’s cost and expense, promptly guarantee and secure the obligations under this Promissory Note by pledging or creating, or causing to be pledged or created, perfected liens with respect to such of its assets and properties as Payee shall designate, it being agreed that it is the intent of the parties that such obligations shall be secured by, among other things, substantially all the assets of Maker and its Subsidiaries (including real and personal property acquired subsequent to the date hereof). Such liens will be created in form and substance satisfactory to Payee, and Maker shall deliver or cause to be delivered to Payee all such instruments and documents as Payee shall request to evidence compliance with this Section. Without limiting the foregoing, Maker, on its own behalf and on behalf of its Subsidiaries, agrees that Payee is hereby authorized to file, at such times as Payee deems necessary or desirable, Filing Statements naming Maker or such Subsidiary as debtor and describing the collateral as “all personal property” or “all assets” of Maker and any of such Subsidiaries whether now or hereafter acquired, or words of like import. Maker shall provide further assurances and all such signatures to documents (including, without limitation, any security agreement, mortgage or deed of trust), consents and other actions requested by the Payee to cause the liens upon the Collateral to become and remain fully perfected liens. Upon payment in full of all amounts owed pursuant to this Promissory Note and the other Second Lien Loan Documents, Payee shall promptly act to release all liens under this Promissory Note, and provide reasonable assistance to Maker and its Subsidiaries in any and all necessary public filings to reflect such releases.

 

3.2           Default. A default shall arise in respect of this Promissory Note upon (each of the following, an “Event of Default”):

 

 (a)          the Maker failing to pay any principal or interest when due under this Promissory Note;

 

 (b)          a Bankruptcy of the Maker or any of its Subsidiaries;

 

 (c)          the breach by the Maker or any of its Subsidiaries of any representation or warranty in, or any term or provision of, this Promissory Note, any Second Lien Loan Document or the Intercreditor Agreement, and such breach shall continue unremedied for a period of thirty (30) days; or

 

- 6 -
 

  

 (d)          the default of any amount when due (subject to any applicable grace period), whether by acceleration or otherwise, of any principal or stated amount of, or interest or fees on, any Indebtedness (as defined in the Credit Agreement) of the Maker or any of its Subsidiaries having a principal or stated amount, individually or in the aggregate, in excess of $2,500,000, or a default shall occur in the performance or observance of any obligation or condition with respect to such Indebtedness if the effect of such default is to accelerate the maturity of any such Indebtedness or such default shall continue unremedied for any applicable period of time sufficient to permit the holder or holders of such Indebtedness, or any trustee or agent for such holders, to cause or declare such Indebtedness to become due and payable or to require such Indebtedness to be prepaid, redeemed, purchased or defeased, or require an offer to purchase or defease such Indebtedness to be made, prior to its expressed maturity.

 

If any Event of Default under this Promissory Note shall occur for any reason, whether voluntary or involuntary, and be continuing, the Payee may by notice to the Maker declare all or any portion of the Outstanding Principal Amount and any and all accrued but unpaid interest in respect hereof to be immediately due and payable, whereupon such amounts shall immediately become due and payable, without further notice, demand or presentment.

 

SECTION 4

 

REPRESENTATIONS AND WARRANTIES

 

4.1           The Maker hereby represents and warrants that after giving effect to the terms hereof:

 

 (a)          the representations and warranties of the Maker and its Subsidiaries contained in the Second Lien Loan Documents are true and correct as of the date hereof in all material respects, other than those representations and warranties that expressly relate solely to a specific earlier date, which shall remain correct in all material respects as of such earlier date;

 

 (b)          the execution, delivery and performance by the Maker and its Subsidiaries of this Promissory Note and the other Second Lien Loan Documents have been duly authorized by all necessary corporate or other action required on their part and this Promissory Note and the other Second Lien Loan Documents constitutes the legal, valid and binding obligation of the Maker and its Subsidiaries enforceable against them in accordance with its terms, except as its enforceability may be affected by the effect of bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting the rights or remedies of creditors generally;

 

 (c)          neither the execution, delivery and performance of this Promissory Note and the Second Lien Loan Documents by the Maker and its Subsidiaries, nor the consummation of the transactions contemplated hereby or thereby, does or shall contravene, result in a breach of, or violate (i) any provision of the Maker’s or any of its Subsidiaries’ certificate or articles of incorporation or bylaws or other similar documents, or agreements, (ii) any law or regulation, or any order or decree of any court or government instrumentality, or (iii) any indenture, mortgage, deed of trust, lease, agreement or other instrument to which the Maker or any of its Subsidiaries is a party or by which the Maker or any of its Subsidiaries or any of their property is bound, except in any such case to the extent such conflict or breach has been waived by a written waiver document, a copy of which has been delivered to EXXI on or before the date hereof;

 

- 7 -
 

  

 (d)          no Material Adverse Effect has occurred since December 31, 2014; and

 

 (e)          no Default or Event of Default has occurred and is continuing.

 

SECTION 5

 

MISCELLANEOUS

 

4.1           Governing Law. This Promissory Note shall be governed by, and construed in accordance with the laws of the State of New York.

 

4.2           Waiver. PRESENTMENT, PROTEST, NOTICE OF INTENT TO ACCELERATE AND NOTICE OF DISHONOR ARE HEREBY WAIVED BY THE MAKER.

 

4.3           Amendments. This Promissory Note may not be modified, amended or changed except by an agreement in writing signed by the Payee and the Maker.

 

4.4           Assignments and Other Matters. The Maker shall not assign or transfer any of its obligations under this Promissory Note in any manner whatsoever (i) unless such assignment or transfer is in accordance with, and permissible under, the terms and conditions of the Intercreditor Agreement and the Credit Agreement and (ii) without the prior written consent of Payee. Subject to the terms and conditions of the Intercreditor Agreement and the Credit Agreement, if Payee and/or any transferee wishes to transfer this Promissory Note, Payee or such transferee shall surrender it to the Maker duly endorsed, or accompanied by written instruments of transfer duly executed by the Payee, with written instructions as to the account(s) for payments and address(es) for notices to the transferee(s) and the Maker shall immediately issue a new instrument or instruments, as the case may be, representing the outstanding principal and premium (if any) of this Promissory Note in the name(s) of the transferee(s) and, if applicable, the Payee, which instrument(s) shall be in substantially the same form as this Promissory Note. Subject to the foregoing provisions of this Section 4.4, the covenants, terms and conditions contained in this Promissory Note and, to the extent applicable to the Maker, the provisions of the Credit Agreement, including without limitation Section 7.2.24 of the Credit Agreement, shall apply to and bind the legatees, heirs, successors and assigns of the parties.

 

[signatures are on following page]

 

- 8 -
 

 

IN WITNESS WHEREOF, the undersigned has executed and delivered this Promissory Note as of the date first written above.

 

  EPL OIL & GAS, INC.
     
  By: /s/ Antonio de Pinho
     
    Name:  Antonio de Pinho
     
    Its:  President

 

AGREED and ACKNOWLEDGED,
as of the date set forth above.

 

ENERGY XXI GULF COAST, INC.  
     
By: /s/ Antonio de Pinho  
     
  Name: Antonio de Pinho  
     
  Its: President  

 

- 9 -



Exhibit 10.2

 

REFERENCE IS MADE TO THE INTERCREDITOR AGREEMENT, DATED AS OF MARCH 12, 2015, BETWEEN THE ROYAL BANK OF SCOTLAND plc, AS PRIORITY LIEN AGENT (AS DEFINED THEREIN) AND ENERGY XXI GULF COAST, INC., A DELAWARE CORPORATION (“EXXI”) (THE “INTERCREDITOR AGREEMENT”). EXXI, BY ITS ACCEPTANCE OF THIS SECOND LIEN DOCUMENT (AS DEFINED IN THE INTERCREDITOR AGREEMENT) (A) CONSENTS TO THE SUBORDINATION OF LIENS PROVIDED FOR IN THE INTERCREDITOR AGREEMENT, (B) AGREES THAT IT WILL BE BOUND BY, AND WILL TAKE NO ACTIONS CONTRARY TO, THE PROVISIONS OF THE INTERCREDITOR AGREEMENT, (C) REPRESENTS AND WARRANTS THAT IT IS AUTHORIZED TO ENTER INTO THE INTERCREDITOR AGREEMENT AND (D) ACKNOWLEDGES AND AGREES THAT ITS ENTERING INTO THE INTERCREDITOR AGREEMENT IS A MATERIAL INDUCEMENT TO THE PRIORITY LIEN SECURED PARTIES (AS DEFINED IN THE INTERCREDITOR AGREEMENT) TO EXTEND CREDIT TO EXXI AND EPL OIL & GAS, INC. AND SUCH PRIORITY LIEN SECURED PARTIES ARE INTENDED THIRD PARTY BENEFICIARIES OF THE PROVISIONS OF THE INTERCREDITOR AGREEMENT.

 

GUARANTY

 

This GUARANTY (as amended, supplemented, amended and restated or otherwise modified from time to time, this “Guaranty”), dated as of March 12, 2015, is made by each of the undersigned (each a “Guarantor” and, together with each of the other signatories hereto and any other entities from time to time parties hereto, the “Guarantors”), in favor of Energy XXI Gulf Coast, Inc., a Delaware corporation (together with successor(s) and assign(s), the “Lender”).

 

WITNESSETH:

 

WHEREAS, pursuant to that certain Secured Promissory Note dated on the date hereof (as amended, supplemented, amended and restated or otherwise modified from time to time, the “Second Lien Note”), made payable by EPL Oil & Gas, Inc., as borrower (together with any successor(s) and assign(s) thereto, the “Borrower”), to the Lender in the amount of $325,000,000.00 (the “Loan”), the Lender has made a loan to the Borrower; and

 

WHEREAS, under the Second Lien Note, the Guarantors are required to execute and deliver this Guaranty; and

 

WHEREAS, each of the Guarantors has duly authorized the execution, delivery and performance of this Guaranty; and

 

WHEREAS, it is in the best interests of each of the Guarantors to execute this Guaranty inasmuch as each Guarantor will derive substantial direct and indirect benefits from the Loan made to the Borrower;

 

  Subsidiary Guaranty—EPL Note
 

  

NOW THEREFORE, for good and valuable consideration the receipt of which is hereby acknowledged, and in order to induce the Lender to make the Loan to the Borrower pursuant to the Second Lien Note, each of the Guarantors agrees, for the benefit of the Lender, as follows:

 

ARTICLE 1. DEFINITIONS

 

SECTION 1.1.          Certain Terms. The following terms (whether or not underscored) when used in this Guaranty, including its preamble and recitals, shall have the following meanings (such definitions to be equally applicable to the singular and plural forms thereof):

 

Borrower” is defined in the first recital.

 

Guarantor” is defined in the preamble.

 

Guarantors” is defined in the preamble.

 

Guaranty” is defined in the preamble.

 

Junior Liabilities” is defined in Section 2.7(a).

 

Lender” is defined in the preamble.

 

Liabilities” is defined in Section 2.7(a).

 

Loan” is defined in the first recital.

 

Maximum Liability” is defined in Section 2.1(b).

 

Second Lien Note” is defined in the first recital.

 

Senior Liabilities” is defined in Section 2.7(a).

 

UCC” means the Uniform Commercial Code, as in effect in the State of New York, as the same may be amended from time to time.

 

SECTION 1.2.          Second Lien Note Definitions. Unless otherwise defined herein or the context otherwise requires, terms used in this Guaranty, including its preamble and recitals, have the meanings provided in the Second Lien Note.

 

SECTION 1.3.          UCC Definitions. Unless otherwise defined herein or the context otherwise requires, terms for which meanings are provided in the UCC are used in this Guaranty, including its preamble and recitals, with such meanings.

 

ARTICLE 2. GUARANTY PROVISIONS

 

SECTION 2.1.          Guaranty. Guarantor hereby absolutely, unconditionally and irrevocably:

 

 2Subsidiary Guaranty—EPL Note
 

  

(a)          guarantees (i) the full and punctual payment when due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise, of all Obligations now or hereafter existing under the Second Lien Note and each other Second Lien Loan Document to which any Obligor is or may become a party, whether for principal, interest, fees, expenses or otherwise, and (ii) all renewals, rearrangements, increases, extensions for any period, substitutions, modification, amendments or supplements in whole or in part of any of the above Second Lien Loan Documents or Obligations, (in each case including all such amounts which would become due but for the operation of the automatic stay under Section 362(a) of the United States Bankruptcy Code, 11 U.S.C. § 362(a), and the operation of Sections 502(b) and 506(b) of the United States Bankruptcy Code, 11 U.S.C. § 502(b) and § 506(b)); and

 

(b)          indemnifies and holds harmless the Lender for any and all costs and expenses (including reasonable attorney’s fees and expenses) incurred by the Lender in enforcing any rights under this Guaranty, except for costs and expenses resulting from the Lender’s gross negligence or willful misconduct (IT BEING UNDERSTOOD THAT IT IS THE INTENTION OF THE PARTIES HERETO THAT THE LENDER BE INDEMNIFIED IN THE CASE OF ITS OWN NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE), REGARDLESS OF WHETHER SUCH NEGLIGENCE IS SOLE OR CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR TECHNICAL); provided, however, that each Guarantor shall be liable under this Guaranty for the maximum amount of such liability that can be hereby incurred without rendering this Guaranty, as it relates to such Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount (such highest amount determined hereunder being Guarantor’s “Maximum Liability”). This Section 2.1(b) with respect to the Maximum Liability of each Guarantor is intended solely to preserve the rights of the Lender hereunder to the maximum extent not subject to avoidance under applicable law, and none of the Guarantors nor any other Person or entity shall have any right or claim under this Section 2.1(b) with respect to the Maximum Liability, except to the extent necessary so that the obligations of such Guarantor hereunder shall not be rendered voidable under applicable law. Each Guarantor agrees that the Obligations guaranteed hereunder may at any time and from time to time exceed such Guarantor’s Maximum Liability without impairing this Guaranty or affecting the rights and remedies of the Lender hereunder. This Guaranty constitutes a guaranty of payment when due and not of collection, and each Guarantor specifically agrees that it shall not be necessary or required that the Lender exercise any right, assert any claim or demand or enforce any remedy whatsoever against the Borrower or any other Obligor (or any other Person) before or as a condition to the obligations of such Guarantor hereunder. All payments hereunder are to be made in the currency in which they are due under the Second Lien Note.

 

SECTION 2.2.          Acceleration of Guaranty. Each Guarantor agrees that, in the event of the dissolution or insolvency of the Borrower or any other Obligor, or the inability or failure of the Borrower or any other Obligor to pay debts as they become due, or an assignment by the Borrower or any other Obligor for the benefit of creditors, or the commencement of any case or proceeding in respect of the Borrower or any other Obligor under any bankruptcy, insolvency or similar laws, and if such event shall occur at a time when any of the Obligations of the Borrower or any other Obligor may not then be due and payable, such Guarantor will pay to the Lender forthwith the full amount which would be payable hereunder by Guarantor if all such Obligations were then due and payable.

 

 3Subsidiary Guaranty—EPL Note
 

  

SECTION 2.3.          Guaranty Absolute, etc. This Guaranty shall in all respects be a continuing, absolute, unconditional and irrevocable guaranty of payment, and shall remain in full force and effect until payment in full of the Second Lien Note. Each Guarantor guarantees that the Obligations will be paid strictly in accordance with the terms of the Second Lien Note and each other Second Lien Loan Document under which they arise, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Lender with respect thereto. The liability of each Guarantor under this Guaranty shall be absolute, unconditional and irrevocable irrespective of:

 

(a)          (i) any lack of validity, legality or enforceability of the Second Lien Note or any other Second Lien Loan Document or any portion of any thereof or (ii) the Second Lien Note or any other Second Lien Loan Document or any portion of any thereof being void or voidable;

 

(b)          the failure of the Lender (i) to assert any claim or demand or to enforce any right or remedy against the Borrower, any other Obligor or any other Person (including any other guarantor) under the provisions of the Second Lien Note, any other Second Lien Loan Document or otherwise, or (ii) to exercise any right or remedy against any other guarantor of, or collateral securing, any of the Obligations;

 

(c)          any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other extension, increase, compromise or renewal of any of the Obligations;

 

(d)          any reduction, limitation, impairment or termination of any Obligations for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to (and each Guarantor hereby waives any right to or claim of) any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality, nongenuineness, irregularity, compromise, unenforceability of, or any other event or occurrence affecting, any of the Obligations;

 

(e)          any amendment to, extension, variance, alteration, rescission, waiver, increase, or other modification of, or any consent to departure from, any of the terms of the Second Lien Note or any other Second Lien Loan Document including, without limitation, any increase or reduction to the rate of interest on all or any of the Obligations thereunder;

 

(f)          any addition, exchange, release, surrender or non-perfection of any collateral, or any amendment to or waiver or release or addition of, or consent to departure from, any other guaranty, held by the Lender securing any of the Obligations; or

 

 4Subsidiary Guaranty—EPL Note
 

  

(g)          any other circumstance which might otherwise constitute a defense available to, or a legal or equitable discharge of, the Borrower, any other Obligor, any surety or any guarantor.

 

SECTION 2.4.          Reinstatement. Each Guarantor agrees that this Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment (in whole or in part) of any of the Obligations guaranteed hereby is rescinded or must otherwise be restored by the Lender upon the insolvency, bankruptcy or reorganization of the Borrower or any other Obligor or otherwise, all as though such payment had not been made.

 

SECTION 2.5.          Waiver. Guarantor hereby expressly waives:

 

(a)          promptness, diligence, presentment, notice of acceptance and any other notice with respect to any of the Obligations and this Guaranty and any requirement that the Lender protect, secure, perfect or insure any security interest or lien, or any property subject thereto, or exhaust any right or take any action against the Borrower, any other Obligor or any other Person (including any other guarantor) or entity or any collateral securing the Obligations. Guarantor hereby further waives all rights that it may have now or in the future under any statute, or at common law, or in law or equity, or otherwise, to compel the Lender to marshall assets or to proceed in respect of Obligations guaranteed hereunder or under any Second Lien Loan Document against any other Obligor, any other party or against any security for the payment and performance of the Obligations before proceeding against, or as a condition to proceeding against, such Guarantor; and

 

(b)          each and every right to which it may be entitled by virtue of the suretyship under any applicable law.

 

SECTION 2.6.          Waiver of Subrogation. Until one year and one day after the Stated Maturity Date, each Guarantor hereby irrevocably waives any claim or other rights which it may now or hereafter acquire against the Borrower or any other Obligor that arise from the existence, payment, performance or enforcement of such Guarantor’s obligations under this Guaranty or any other Second Lien Loan Document, including any right of subrogation, reimbursement, contribution, exoneration, or indemnification, any right to participate in any claim or remedy of the Lender against the Borrower or any other Obligor or any collateral which the Lender now has or hereafter acquires, whether or not such claim, remedy or right arises in equity, or under contract, statute or common law, including the right to take or receive from the Borrower or any other Obligor, directly or indirectly, in cash or other property or by set-off or in any manner, payment or security on account of such claim or other rights. If any amount shall be paid to any Guarantor in violation of the preceding sentence, such amount shall be deemed to have been paid to such Guarantor for the benefit of, and held in trust for, the Lender, and shall forthwith be paid to the Lender to be credited and applied upon the Obligations, whether matured or unmatured. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Second Lien Note and that the waiver set forth in this Section 2.6 is knowingly made in contemplation of such benefits.

 

 5Subsidiary Guaranty—EPL Note
 

  

SECTION 2.7.          Subordination of Obligations of Guarantor.

 

(a)          Definitions. All obligations of each Guarantor, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, or now or hereafter existing, or due or to become due, are hereinafter collectively called the “Liabilities”. All Liabilities to the Lender under or in connection with this Guaranty are hereinafter called the “Senior Liabilities”; and all Liabilities to the Borrower or to any other Obligor (other than such Guarantor) are hereinafter collectively called the “Junior Liabilities”; it being expressly understood and agreed that the term “Senior Liabilities”, as used herein, shall include, without limitation, any and all interest accruing on any of the Senior Liabilities after the commencement of any bankruptcy, insolvency, receivership, liquidation, dissolution or similar circumstance, notwithstanding any provision or rule of law which might restrict the rights of the Lender, as against the Borrower, any other Guarantor or anyone else, to collect such interest.

 

(b)          Subordination. Except as otherwise expressly provided in this Guaranty or in the Second Lien Note, or as the Lender may hereafter otherwise expressly consent in writing, the payment of all Junior Liabilities shall be postponed and subordinated to the payment in full of the Senior Liabilities and the indefeasible payment in cash in full of the Obligations, and no payments or other distributions whatsoever in respect of any Junior Liabilities shall be made, nor shall any properties or assets of Guarantor be applied to the purchase or other acquisition or retirement of any Junior Liabilities; provided, however, except as otherwise expressly provided in the Second Lien Note that until such time as the Lender shall have notified the Guarantors and the Borrower to the contrary, or any Guarantor shall be in default in the payment when due, whether by acceleration or otherwise, of any amount payable in respect of the Senior Liabilities, payments made to third parties in the ordinary course of business are excepted from the terms of the foregoing provisions of this Section 2.7(b).

 

(c)          Payments Held in Trust. Any amounts paid in violation of this Section 2.7 shall be received in trust for the Lender and shall be promptly turned over to the Lender. Each Guarantor will mark its books and records, and cause any Subsidiary of the Guarantor to mark its books and records, so as to indicate that the Junior Liabilities are subordinated in accordance with the terms of this Guaranty, and will cause to be clearly inserted in any promissory note or other instrument which at any time evidences any of the Junior Liabilities a statement to the effect that the payment thereof is subordinated in accordance with the terms of this Guaranty. Guarantor shall execute such further documents or instruments and take such further action as the Lender may reasonably from time to time request to carry out the intent of this Guaranty.

 

SECTION 2.8.          Successors, Transferees and Assigns; Transfers of Notes. This Guaranty shall (a) be binding upon each Guarantor, and its respective successors, transferees and assigns (provided, however, that no Guarantor may assign any of its obligations hereunder without the prior written consent of the Lender), and (b) inure to the benefit of and be enforceable by the Lender.

 

 6Subsidiary Guaranty—EPL Note
 

  

SECTION 2.9.          Election of Remedies. Except as otherwise provided in the Second Lien Note, the Lender may, under applicable law, proceed to realize its benefits under any of this Guaranty or the other Second Lien Loan Documents giving it a lien upon any collateral, either by judicial foreclosure or by non-judicial sale or enforcement, the Lender may, at its sole option, determine which of its remedies or rights it may pursue without affecting any of its rights and remedies under this Guaranty. If, in the exercise of any of its rights and remedies, the Lender shall forfeit any of its rights or remedies, including its right to enter a deficiency judgment against any Obligor or any other Person, whether because of any applicable laws pertaining to “election of remedies” or the like, each Guarantor hereby consents to such action by the Lender and waives any claim based upon such action, even if such action by the Lender shall result in a full or partial loss of any rights of subrogation that such Guarantor might otherwise have had but for such action by the Lender. Any election of remedies that results in the denial or impairment of the right of the Lender to seek a deficiency judgment against the Borrower shall not impair each Guarantor’s obligation to pay the full amount of the Obligations.

 

ARTICLE 3. REPRESENTATIONS AND WARRANTIES

 

Each Guarantor hereby represents and warrants to the Lender as set forth in this Article 3.

 

SECTION 3.1.          Organization, etc. Such Guarantor is validly organized and existing and in good standing under the laws of its jurisdiction of formation, and has full power and authority and holds all requisite governmental licenses, permits and other approvals to enter into and perform its Obligations under this Guaranty and each other Second Lien Loan Document to which it is a party.

 

SECTION 3.2.          Due Authorization, Non-Contravention, Defaults etc. The execution, delivery and performance by such Guarantor of this Guaranty and each Second Lien Loan Document executed or to be executed by it, such Guarantor’s participation in the consummation of all aspects of the Second Lien Loan Documents, and the execution, delivery and performance by such Guarantor of the agreements executed and delivered by it in connection with the Second Lien Loan Documents are in each case within such Person’s powers, have been duly authorized by all necessary action, and do not

 

(a)          contravene any (i) of Guarantor’s constituent document, (ii) court decree or order binding on or affecting any Obligor, or (iii) law or governmental regulation binding on or affecting such Guarantor; or

 

(b)          result in (i) or require the creation or imposition of, any lien on such Guarantor’s properties (except as permitted by this Guaranty), (ii) a default under any material contractual restriction binding on or affecting or (iii) any noncompliance, suspension, impairment, forfeiture or nonrenewal of any material license, permit or other governmental approval, except as could not reasonably be expected to have a material adverse effect.

 

SECTION 3.3.          Government Approval, Regulation, etc. Except for filings to perfect and maintain the perfection of the Liens arising pursuant to the Security Agreement, no authorization or approval or other action by, and no notice to or filing with, any governmental authority or other Person (other than those that have been duly obtained or made and that are in full force and effect) is required for the due execution, delivery or performance by such Guarantor of this Guaranty or any Second Lien Loan Document to which it is a party.

 

 7Subsidiary Guaranty—EPL Note
 

  

SECTION 3.4.          Validity, etc. This Guaranty and the other Second Lien Loan Documents to which such Guarantor is a party constitutes the legal, valid and binding obligations of such Guarantor, enforceable against such Guarantor in accordance with their respective terms (except, in any case, as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally and by principles of equity).

 

SECTION 3.5.          Informed on Financial Condition. Such Guarantor has knowledge of the Borrower’s and each other Obligor’s financial condition and affairs and has adequate means to obtain from the Borrower and each other Obligor on an ongoing basis information relating thereto and to the Borrower’s and such Obligor’s ability to pay and perform the Obligations, and agrees to assume the responsibility for keeping, and to keep, so informed for so long as this Guaranty is in effect. Such Guarantor acknowledges and agrees that the Lender shall have no obligation to investigate the financial condition or affairs of any Obligor for the benefit of such Guarantor nor to advise such Guarantor of any fact respecting, or any change in, the financial condition or affairs of the Borrower or any other Obligor that might become known to the Lender at any time, whether or not the Lender knows or believes or has reason to know or believe that any such fact or change is unknown to such Guarantor, or might (or does) materially increase the risk of such Guarantor as guarantor, or might (or would) affect the willingness of such Guarantor to continue as a guarantor of the Obligations.

 

SECTION 3.6.          Benefit to Guarantor. Such Guarantor represents that it is in its best interests to execute this Guaranty inasmuch as such Guarantor will derive substantial direct and indirect benefits from the Loan made to the Borrower by the Lender. Such Guarantor is willing to guarantee the Obligations of the Borrower and the other Obligors under the Second Lien Note and any other Second Lien Loan Document, and agrees that the Lender is relying on this representation in agreeing to make the Loan to the Borrower.

 

ARTICLE 4. MISCELLANEOUS PROVISIONS

 

SECTION 4.1.          Waiver of Fraudulent Conveyance Claims. Each Guarantor hereby waives the right to assert any claim or cause of action to avoid any transfer to the Lender contemplated by and made pursuant to the Second Lien Note or any other Second Lien Loan Document that may exist by virtue of any federal or state statute providing for such avoidance.

 

SECTION 4.2.          Second Lien Loan Document. This Guaranty is a Second Lien Loan Document executed pursuant to the Second Lien Note and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions thereof.

 

SECTION 4.3.          Binding on Successors, Transferees and Assigns; Assignment. In addition to, and not in limitation of, Section 2.8, this Guaranty shall be binding upon each Guarantor and its respective successors, transferees and assigns and shall inure to the benefit of and be enforceable by the Lender and its successors, transferees and assigns (to the full extent provided pursuant to Section 2.9); provided, however, that no Guarantor may assign any of its obligations hereunder without the prior written consent of the Lender.

 

 8Subsidiary Guaranty—EPL Note
 

  

SECTION 4.4.          Amendments. No amendment to or waiver of any provision of this Guaranty nor consent to any departure by any Guarantor from its obligations under this Guaranty shall in any event be effective unless the same shall be in writing and signed by the Lender and such Guarantor and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

 

SECTION 4.5.          Notices. Except as otherwise provided in this Guaranty, all notices and other communications provided for hereunder shall be in writing, by facsimile or via electronic mail and addressed, delivered or transmitted to the appropriate party at the address or facsimile number of (a) each Guarantor, as specified on Annex I of this Guaranty, (b) the Lender, as specified on Annex I of this Guaranty, or (c) at such other address or facsimile number as may be designated by such party in a prior written notice to the other party. Except as otherwise provided in this Guaranty, any notice or other communication, if mailed and properly addressed with postage prepaid or if properly addressed and sent by pre-paid courier service, shall be deemed given when received; any such notice or other communication, if transmitted by facsimile, shall be deemed given when transmitted and electronically confirmed.

 

SECTION 4.6.          No Waiver; Remedies. In addition to, and not in limitation of, Section 2.3 and Section 2.5, no failure on the part of the Lender to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

 

SECTION 4.7.          Section Captions. The various headings of this Guaranty are inserted for convenience only and shall not affect the meaning or interpretation of this Guaranty or any provisions thereof.

 

SECTION 4.8.          Severability. Any provision of this Guaranty which is prohibited, inoperative, invalid or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition, non-operation, invalidity or unenforceability without invalidating the remaining provisions of this Guaranty or affecting the validity or enforceability of such provision in any other jurisdiction.

 

SECTION 4.9.          Counterparts. This Guaranty may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. Delivery of an executed counterpart of a signature page to this Guaranty by facsimile or electronic mail shall be effective as delivery of a manually executed counterpart of this Guaranty.

 

SECTION 4.10.       Governing Law, Entire Agreement. THIS GUARANTY SHALL BE GOVERNED BY AND IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICT OF LAW EXCEPT SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW). THIS GUARANTY AND THE OTHER SECOND LIEN LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.

 

 9Subsidiary Guaranty—EPL Note
 

  

THIS WRITTEN AGREEMENT AND THE OTHER SECOND LIEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

 

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

[Signatures Begin On Following Page]

 

 10Subsidiary Guaranty—EPL Note
 

 

IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written.

 

  GUARANTOR
   
  DELAWARE EPL OF TEXAS, LLC
     
  By: /s/ Antonio de Pinho
    Name: Antonio de Pinho
    Title: President
     
  EPL OF LOUISIANA, LLC
     
  By: /s/ Antonio de Pinho
    Name: Antonio de Pinho
    Title: President
     
  ENERGY PARTNERS LTD., LLC
     
  By: /s/ Antonio de Pinho
    Name: Antonio de Pinho
    Title: President
     
  EPL PIONEER HOUSTON, INC.
     
  By: /s/ Antonio de Pinho
    Name: Antonio de Pinho
    Title: President

 

 S-1- Subsidiary Guaranty EPL Note -
 

  

  EPL PIPELINE, LLC
     
  By: /s/ Antonio de Pinho
    Name: Antonio de Pinho
    Title: President
     
  NIGHTHAWK, LLC
     
  By: /s/ Antonio de Pinho
    Name: Antonio de Pinho
    Title: President
     
  ANGLO-SUISSE OFFSHORE PIPELINE PARTNERS, LLC
     
  By: /s/ Antonio de Pinho
    Name: Antonio de Pinho
    Title: President

 

 S-2- Subsidiary Guaranty EPL Note -
 

 

Annex I

 

Notice Address of each Guarantor

 

  Address: 1021 Main (One City Centre), Suite 2626
    Houston, TX 77002

 

with a copy to:

 

EPL Oil & Gas, Inc.
1021 Main (One City Centre), Suite 2626
Houston, TX 77002
Attention: Bruce W. Busmire
Telephone No.: 713-351-3033
Facsimile No.: 713-351-3333

 

  Subsidiary Guaranty EPL Note



Exhibit 10.3

 

Reference is made to the Intercreditor Agreement described below. The Lender, by accepting the benefits of the security provided hereby, (i) consents (or is deemed to consent), to the subordination of Liens provided for in the Intercreditor Agreement, (ii) agrees (or is deemed to agree) that it will be bound by, and will take no actions contrary to, the provisions of the Intercreditor Agreement, (iii) authorizes (or is deemed to authorize) the Lender to enter into, and perform under, the Intercreditor Agreement and (iv) acknowledges (or is deemed to acknowledge) that a copy of the Intercreditor Agreement was delivered, or made available, to the Lender.

 

Notwithstanding any other provision contained herein, this Security Agreement, the Liens created hereby and the rights, remedies, duties and obligations provided for herein are subject in all respects to the provisions of the Intercreditor Agreement. In the event of any conflict or inconsistency between the provisions of this Security Agreement and the Intercreditor Agreement, the provisions of the Intercreditor Agreement shall control.

 

SECOND LIEN PLEDGE AND SECURITY AGREEMENT
and irrevocable proxy

 

This SECOND LIEN PLEDGE AND SECURITY AGREEMENT AND IRREVOCABLE PROXY, dated as of March 12, 2015 (as amended, supplemented, amended and restated or otherwise modified from time to time, this “Security Agreement”), is entered into by EPL Oil & Gas, Inc., a Delaware corporation (“EPL”), and each Subsidiary Guarantor party hereto on the date hereof or that becomes a party hereto after the date hereof (EPL and each such Subsidiary Guarantor from time to time a party hereto, collectively, the “Grantors” and each, individually, a “Grantor”), in favor of Energy XXI Gulf Coast, Inc., a Delaware corporation, (together with any successor(s) and assign(s) thereto, the “Lender”).

 

WITNESSETH:

 

A.           EPL and the Lender have heretofore entered into that certain Secured Second Lien Promissory Note, dated as of March 12, 2015 (as the same may be amended, modified, supplemented or restated from time to time, herein called the “Note”).

 

B.           As a condition under the Note, each Grantor is required to execute and deliver this Security Agreement.

 

C.           Each Grantor has duly authorized the execution, delivery and performance of this Security Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

  Pledge and Security Agreement and
Irrevocable Proxy
 

 

ARTICLE I
DEFINITIONS

 

SECTION 1.1. Certain Terms. The following terms (whether or not underscored) when used in this Security Agreement, including its preamble and recitals, shall have the following meanings (such definitions to be equally applicable to the singular and plural forms thereof):

 

Business Days” means any day that is neither a Saturday or Sunday nor a legal holiday on which banks are authorized or required to be closed in New York, New York.

 

Capital Securities” means, with respect to any Person, all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) of such Person’s capital (including all capital stock, partnership, membership or other equity interests in such Person), whether or not certificated.

 

Collateral” is defined in Section 2.1.

 

Collateral Account” is defined in Section 4.3(b).

 

Lender” is defined in the preamble.

 

Computer Hardware and Software Collateral” means (a) all computer and other electronic data processing hardware, integrated computer systems, central processing units, memory units, display terminals, printers, features, computer elements, card readers, tape drives, hard and soft disk drives, cables, electrical supply hardware, generators, power equalizers, accessories and all peripheral devices and other related computer hardware, including all operating system software, utilities and application programs in whatsoever form, (b) software programs (including both source code, object code and all related applications and data files), designed for use on the computers and electronic data processing hardware described in clause (a) above, (c) all firmware associated therewith, (d) all documentation (including flow charts, logic diagrams, manuals, guides, specifications, training materials, charts and pseudo codes) with respect to such hardware, software and firmware described in the preceding clauses (a) through (c), and (e) all rights with respect to all of the foregoing, including copyrights, licenses, options, warranties, service contracts, program services, test rights, maintenance rights, support rights, improvement rights, renewal rights and indemnifications and any substitutions, replacements, improvements, error corrections, updates, additions or model conversions of any of the foregoing.

 

Control Agreement” means an authenticated record in form and substance reasonably satisfactory to the Lender, that provides for the Lender to have “control” (as defined in the UCC) over certain Collateral.

 

Copyright Collateral” means all copyrights of any Grantor, registered or unregistered and whether published or unpublished, now or hereafter in force throughout the world including all of such Grantor’s rights, titles and interests in and to all copyrights registered in the United States Copyright Office or anywhere else in the world, including without limitation those copyrights referred to in Item C of Schedule III hereto, and registrations and recordings thereof and all applications for registration thereof, whether pending or in preparation, all copyright licenses, the right to sue for past, present and future infringements of any of the foregoing, all rights corresponding thereto, all extensions and renewals of any thereof and all Proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages and Proceeds of suit, which are owned or licensed by such Grantor.

 

 2Pledge and Security Agreement
and Irrevocable Proxy
 

 

Credit Agreement” shall have the meaning provided to the term “Priority Credit Agreement” in the Intercreditor Agreement.

 

Distributions” means all cash, cash dividends, stock dividends, other distributions, liquidating dividends, shares of stock resulting from (or in connection with the exercise of) stock splits, reclassifications, warrants, options, non-cash dividends, mergers, consolidations, and all other distributions or payments (whether similar or dissimilar to the foregoing) on or with respect to, or on account of, any Pledged Share or Pledged Interest or other rights or interests constituting Collateral.

 

Equipment” is defined in Section 2.1(a).

 

First Lien Administrative Agent” shall have the meaning provided to the term “Priority Lien Agent” in the Intercreditor Agreement.

 

General Intangibles” means all “general intangibles” and all “payment intangibles”, each as defined in the UCC, and shall include all interest rate or currency protection or hedging arrangements, all tax refunds, all licenses, permits, concessions and authorizations and all Intellectual Property Collateral (in each case, regardless of whether characterized as general intangibles under the UCC).

 

Governmental Approval” is defined in Section 2.1(f).

 

Grantor” is defined in the preamble.

 

Indemnified Parties” is defined in Section 6.5(a).

 

Intellectual Property Collateral” means, collectively, the Computer Hardware and Software Collateral, the Copyright Collateral, the Patent Collateral, the Trademark Collateral and the Trade Secrets Collateral.

 

Intercreditor Agreement” means that certain Intercreditor Agreement dated as of March 12, 2015 by and between Lender and the First Lien Administrative Agent.

 

Inventory” is defined in Section 2.1(b).

 

Lien” means any security interest, mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), privilege, charge against or security interest in property, or other priority or preferential arrangement of any kind or nature whatsoever, including any conditional sale or title retention arrangement, any capitalized lease liability and any assignment, deposit arrangement or financing lease intended as security.

 

 3Pledge and Security Agreement
and Irrevocable Proxy
 

 

Patent Collateral” means (a) all inventions and discoveries, whether patentable or not, all letters patent and applications for letters patent throughout the world, including without limitation those patents referred to in Item A of Schedule III hereto, and any patent applications in preparation for filing, (b) all reissues, divisions, continuations, continuations-in-part, extensions, renewals and reexaminations of any of the items described in clause (a), (c) all patent licenses, and other agreements providing any Grantor with the right to use any items of the type referred to in clauses (a) and (b) above, and (d) all Proceeds of, and rights associated with, the foregoing (including licenses, royalties income, payments, claims, damages and Proceeds of infringement suits), the right to sue third parties for past, present or future infringements of any patent or patent application, and for breach or enforcement of any patent license.

 

Person” means any natural person, corporation, limited liability company, partnership, limited partnership, joint venture, association, trust or unincorporated organization, governmental authority or any other legal entity, whether acting in an individual, fiduciary or other capacity.

 

Pledged Interests” means all Capital Securities or other ownership interests of any Pledged Interests Issuer described in Item A of Schedule I hereto; all registrations, certificates, articles, by-laws, regulations, limited liability company agreements or constitutive agreements governing or representing any such interests; all options and other rights, contractual or otherwise, at any time existing with respect to such interests, as such interests are amended, modified, or supplemented from time to time, and together with any interests in any Pledge Interests Issuer taken in extension or renewal thereof or substitution therefor.         

 

Pledged Interests Issuer” means each Person identified in Item A of Schedule I hereto as the issuer of the Pledged Shares or the Pledged Interests identified adjacent to the name of such Person.

 

Pledged Note Issuer” means any issuer of a Pledged Note.

 

Pledged Notes” means all promissory notes issued to any Grantor, as such promissory notes are amended, modified or supplemented from time to time and together with any promissory note of any Pledged Note Issuer taken in extension or renewal thereof or substitution therefor.

 

Pledged Property” means all Pledged Notes, Pledged Interests, Pledged Shares, all assignments of any amounts due or to become due with respect to the Pledged Interests or the Pledged Shares, all other instruments which are required to be delivered by any Grantor to the Lender under this Security Agreement, and all proceeds of any of the foregoing.

 

Pledged Shares” means all Capital Securities of any Pledged Interests Issuer identified under Item A of Schedule I.

 

Receivables” is defined in Section 2.1(c).

 

Related Contracts” is defined in Section 2.1(c).

 

Secured Obligations” is defined in Section 2.2.

 

 4Pledge and Security Agreement
and Irrevocable Proxy
 

 

Securities Act” is defined in Section 6.2(a).

 

Security Agreement” is defined in the preamble.

 

Subsidiaries” shall mean with respect to any Person, any other Person of which more than 50% of the outstanding Voting Securities of such other Person (irrespective of whether at the time Capital Securities of any other class or classes of such other Person shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more other Subsidiaries of such Person, or by one or more other Subsidiaries of such Person.

 

Subsidiary Guarantor” shall mean each Subsidiary of EPL.

 

Termination Date” shall mean the date on which the Liens created under this Security Agreement are to be released by the Lender or otherwise terminate in accordance with the Note.

 

Trademark Collateral” means (a) (i) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, certification marks, collective marks, logos and other source or business identifiers, and all goodwill of the business associated therewith, now existing or hereafter adopted or acquired, including without limitation those trademarks referred to in Item B of Schedule III hereto, whether currently in use or not, all registrations and recordings thereof and all applications in connection therewith, whether pending or in preparation for filing, including registrations, recordings and applications in the United States Patent and Trademark Office or in any office or agency of the United States of America, or any State thereof or any other country or political subdivision thereof or otherwise, and all common-law rights relating to the foregoing, and (ii) the right to obtain all reissues, extensions or renewals of the foregoing (collectively referred to as the “Trademark”), (b) all trademark licenses for the grant by or to any Grantor of any right to use any trademark, (c) all of the goodwill of the business connected with the use of, and symbolized by the items described in, clause (a), and to the extent applicable clause (b), (d) the right to sue third parties for past, present and future infringements of any Trademark Collateral described in clause (a) and, to the extent applicable, clause (b), and (e) all Proceeds of, and rights associated with, the foregoing, including any claim by any Grantor against third parties for past, present or future infringement or dilution of any Trademark, Trademark registration or Trademark license, or for any injury to the goodwill associated with the use of any such Trademark or for breach or enforcement of any Trademark license and all rights corresponding thereto throughout the world.

 

Trade Secrets Collateral” means all common law and statutory trade secrets and all other confidential, proprietary or useful information and all know-how obtained by or used in or contemplated at any time for use in the business of any Grantor (all of the foregoing being collectively called a “Trade Secret”), including all Documents and things embodying, incorporating or referring in any way to such Trade Secret, all Trade Secret licenses, and including the right to sue for and to enjoin and to collect damages for the actual or threatened misappropriation of any Trade Secret and for the breach or enforcement of any such Trade Secret license.

 

 5Pledge and Security Agreement
and Irrevocable Proxy
 

 

UCC” means the Uniform Commercial Code, as in effect in the State of New York, as the same may be amended from time to time.

 

Voting Securities” means, with respect to any Person, Capital Securities of any class or kind ordinarily having the power to vote for the election of directors, managers or other voting members of the governing body of such Person.

 

SECTION 1.2. Note Definitions. Unless otherwise defined herein or the context otherwise requires, terms used in this Security Agreement, including its preamble and recitals, have the meanings provided in the Note.

 

SECTION 1.3. UCC Definitions. Unless otherwise defined herein or the context otherwise requires, terms for which meanings are provided in the UCC are used in this Security Agreement, including its preamble and recitals, with such meanings.

 

ARTICLE II
SECURITY INTEREST

 

SECTION 2.1. Grant of Security Interest. Each Grantor hereby pledges, hypothecates, assigns, charges, mortgages, delivers, and transfers to the Lender, and hereby grants to the Lender, a continuing security interest in all of such Grantor’s following property, whether now or hereafter existing, owned or acquired by such Grantor, and wherever located, (collectively, the “Collateral”):

 

(a)          all equipment in all of its forms of such Grantor, wherever located, and all machinery, apparatus, installation facilities and other tangible personal property, and all parts thereof and all accessions, additions, attachments, improvements, substitutions, replacements and proceeds thereto and therefor (any and all of the foregoing being the “Equipment”);

 

(b)          all inventory in all of its forms of such Grantor, wherever located, including (i) all oil, gas, or other hydrocarbons and all products and substances derived therefrom, all raw materials and work in process therefore, finished goods thereof, and materials used or consumed in the manufacture or production thereof, (ii) all goods in which such Grantor has an interest in mass or a joint or other interest or right of any kind (including goods in which such Grantor has an interest or right as consignee), and (iii) all goods which are returned to or repossessed by such Grantor, and all accessions thereto, products thereof and documents therefore (any and all such inventory, materials, goods, accessions, products and documents being the “Inventory”);

 

 6Pledge and Security Agreement
and Irrevocable Proxy
 

 

(c)          all accounts, money, payment intangibles, deposit accounts (including the Collateral Accounts and all amounts on deposit therein and all cash equivalent investments carried therein and all proceeds thereof), contracts, contract rights, all rights constituting a right to the payment of money, chattel paper, documents, documents of title, instruments, letters of credit, letter-of-credit rights and General Intangibles of such Grantor, whether or not earned by performance or arising out of or in connection with the sale or lease of goods or the rendering of services, including all moneys due or to become due in repayment of any loans or advances, and all rights of such Grantor now or hereafter existing in and to all security agreements, guaranties, leases, agreements and other contracts securing or otherwise relating to any such accounts, money, payment intangibles, deposit accounts, contracts, contract rights, rights to the payment of money, chattel paper, documents, documents of title, instruments, letters of credit, letter-of-credit rights and General Intangibles (any and all such accounts, money, payment intangibles, deposit accounts, contracts, contract rights, rights to the payment of money, chattel paper, documents, documents of title, instruments, letters of credit, letter-of-credit rights and General Intangibles being the “Receivables”, and any and all such security agreements, guaranties, leases, agreements and other contracts being the “Related Contracts”);

 

(d)          all Intellectual Property Collateral of such Grantor;

 

(e)          all books, correspondence, credit files, records, invoices, tapes, cards, computer runs, writings, data bases, information in all forms, paper and documents and other property relating to, used or useful in connection with, evidencing, embodying, incorporating or referring to, any of the foregoing in this Section 2.1;

 

(f)          all governmental approvals, permits, licenses, authorizations, consents, rulings, tariffs, rates, certifications, waivers, exemptions, filings, claims, orders, judgments and decrees (each a “Governmental Approval”), to the extent a security interest may be granted therein; provided that any Governmental Approval that by its terms or by operation of law would be void, voidable, terminable or revocable if mortgaged, pledged or assigned hereunder is expressly excepted and excluded from the Liens and terms of this Security Agreement, including the grant of security interest in this Section 2.1;

 

(g)          all interest rate swap agreements, interest rate cap agreements and interest rate collar agreements, and all other agreements or arrangements designed to protect such Grantor against fluctuations in interest rates or currency exchange rates and all commodity hedge, commodity swap, exchange, forward, future, floor, collar or cap agreements, fixed price agreements and all other agreements or arrangements designed to protect such Grantor against fluctuations in commodity prices;

 

(h)          to the extent not included in the foregoing, all bank accounts, investment property, fixtures and supporting obligations;

 

(i)          all Pledged Interests, Pledged Notes, Pledged Shares and any other Pledged Property and all Distributions, interest, and other payments and rights with respect to such Pledged Property;

 

(j)          all accessions, substitutions, replacements, products, offspring, rents, issues, profits, returns, income and proceeds of and from any and all of the foregoing Collateral (including proceeds which constitute property of the types described in clauses (a), (b), (c), (d), (e), (f), (g), (h), and (i) and proceeds deposited from time to time in any lock boxes of such Grantor, and, to the extent not otherwise included, all payments and proceeds under insurance (whether or not the Lender is the loss payee thereof), or any condemnation award, indemnity, warranty or guaranty, payable by reason of loss or damage to or otherwise with respect to any of the Collateral); and

 

 7Pledge and Security Agreement
and Irrevocable Proxy
 

 

(k)          all of such Grantor’s other property and rights of every kind and description and interests therein, including without limitation, all other “Accounts”, “Certificated Securities”, “Chattel Paper”, “Commercial Tort Claims” (including those set forth on Item I of Schedule II attached hereto (as such schedule may be updated from time to time in accordance with Section 4.7 hereof)), “Commodity Accounts”, “Commodity Contracts”, “Deposit Accounts”, “Documents”, “Equipment”, “Fixtures”, “General Intangibles”, “Goods”, “Instruments”, “Inventory”, “Investment Property”, “Letter of Credit Rights”, “Letters of Credit”, “Money”, “Proceeds”, “Securities”, “Securities Account”, “Security Entitlements”, “Supporting Obligations” and “Uncertificated Securities” as such terms are defined in the UCC.

 

SECTION 2.2. Security for Obligations. This Security Agreement, and the Collateral in which the Lender is granted a security interest hereunder by the Grantors, secures the prompt and indefeasible payment in full and performance of all obligations of the Grantors now or hereafter existing under this Security Agreement and the Note, whether for principal, interest, costs, fees, expenses or otherwise, howsoever created, arising or evidenced, whether direct or indirect, primary or secondary, fixed or absolute or contingent, joint or several, or now or hereafter existing under this Security Agreement and the Note (all such obligations being the “Secured Obligations”).

 

SECTION 2.3. Continuing Security Interest; Transfer of Notes. This Security Agreement shall create a continuing security interest in the Collateral and shall (a) remain in full force and effect until the Termination Date, (b) be binding upon each Grantor and its successors, transferees and assigns, and (c) inure, together with the rights and remedies of the Lender hereunder, to the benefit of the Lender and its respective successors, transferees and assigns. Without limiting the generality of the foregoing clause (c), the Lender may assign or otherwise transfer (in whole or in part) the Note, and any successor or assignee thereof shall thereupon become vested with all the rights and benefits in respect thereof granted to the Lender under this Security Agreement, or otherwise, subject, however, to any contrary provisions in such assignment or transfer. Upon the Termination Date, the security interest granted herein shall terminate and all rights to the Collateral shall revert to the applicable Grantor. Upon any such payment and termination or expiration, the Lender will, at the Grantors’ sole expense, deliver or cause to be delivered to each applicable Grantor, without any representations, warranties or recourse of any kind whatsoever, all certificates and instruments representing or evidencing all Pledged Notes, Pledged Shares and Pledged Interests, together with all other Collateral held by the Lender or the First Lien Administrative Agent, as the Lender’s bailee in accordance with the Intercreditor Agreement, hereunder, and execute and deliver to any Grantor such documents as such Grantor shall reasonably request to evidence such termination. If at any time all or any part of any payment theretofore applied by the Lender to any of the Secured Obligations is or must be rescinded or returned by the Lender for any reason whatsoever (including, without limitation, the insolvency, bankruptcy, reorganization or other similar proceeding of any Grantor or any other Person), such Secured Obligations shall, for purposes of this Security Agreement, to the extent that such payment is or must be rescinded or returned, be deemed to have continued to be in existence, notwithstanding any application by the Lender or any termination agreement or release provided to any Grantor, and this Security Agreement shall continue to be effective or reinstated, as the case may be, as to such Secured Obligations, all as though such application by the Lender had not been made. This Section 2.3 shall survive the Termination Date.

 

 8Pledge and Security Agreement
and Irrevocable Proxy
 

 

SECTION 2.4. Grantor Remains Liable. Anything herein to the contrary notwithstanding, (a) each Grantor shall remain liable under the contracts and agreements included in the Collateral to the extent set forth therein, and will perform all of its duties and obligations under such contracts and agreements to the same extent as if this Security Agreement had not been executed, (b) the exercise by the Lender of any of its rights hereunder shall not release any Grantor from any of its duties or obligations under any such contracts or agreements included in the Collateral, and (c) the Lender shall not have any obligation or liability under any contracts or agreements included in the Collateral by reason of this Security Agreement, nor shall the Lender be obligated to perform any of the obligations or duties of any Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

 

SECTION 2.5. Delivery of Pledged Property.

 

(a)          All certificates or instruments representing or evidencing any Collateral, including all Pledged Shares and Pledged Notes, shall be delivered to and held by or on behalf of (or in the case of the Pledged Notes, endorsed to the order of) the Lender, pursuant hereto, shall be in suitable form for transfer by delivery, and shall be accompanied by all necessary indorsements or instruments of transfer or assignment, duly executed in blank.

 

(b)          To the extent any of the Collateral constitutes an “uncertificated security” (as defined in Section 8-102(a)(18) of the UCC) or a “security entitlement” (as defined in Section 8-102(a)(17) of the UCC), the applicable Grantor shall take and cause the appropriate Person (including any issuer, entitlement holder or securities intermediary thereof) to take all actions necessary to grant “control” (as defined in 8-106 of the UCC) to the Lender over such Collateral.

 

SECTION 2.6. Distributions on Pledged Shares. In the event that any Distribution with respect to any Pledged Shares or Pledged Interests pledged hereunder is permitted to be paid, such Distribution or payment may be paid directly to the applicable Grantor.

 

SECTION 2.7. Security Interest Absolute, etc. This Security Agreement shall in all respects be a continuing, absolute, unconditional and irrevocable grant of security interest, and shall remain in full force and effect until the Termination Date. All rights of the Lender and the security interests granted to the Lender hereunder, and all obligations of the Grantors hereunder, shall, in each case, be absolute, unconditional and irrevocable irrespective of (a) any lack of validity, legality or enforceability of this Security Agreement, (b) the failure of the Lender (i) to assert any claim or demand or to enforce any right or remedy against any Grantor or any other Person under the provisions of this Security Agreement or otherwise, or (ii) to exercise any right or remedy against any other guarantor of, or collateral securing, any Secured Obligations, (c) any change in the time, manner or place of payment of, or in any other term of, all or any part of the Secured Obligations, or any other extension, compromise or renewal of any Secured Obligations, (d) any reduction, limitation, impairment or termination of any Secured Obligations (except in the case of the occurrence of the Termination Date) for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to (and each Grantor hereby waives any right to or claim of) any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality, nongenuineness, irregularity, compromise, unenforceability of, or any other event or occurrence affecting, any Secured Obligations or otherwise, (e) any amendment to, rescission, waiver, or other modification of, or any consent to or departure from, any of the terms of this Security Agreement, (f) any addition, exchange or release of any Collateral for the Secured Obligations, or any surrender or non-perfection of any collateral, or (g) any other circumstance which might otherwise constitute a defense available to, or a legal or equitable discharge of, any Grantor, any surety or any guarantor.

 

 9Pledge and Security Agreement
and Irrevocable Proxy
 

 

SECTION 2.8. Election of Remedies. Except as otherwise provided in the Note, if the Lender may, under applicable law, proceed to realize its benefits under this Security Agreement or the other security documents giving the Lender a lien upon any Collateral, either by judicial foreclosure or by non-judicial sale or enforcement, the Lender may, at its sole option, determine which of its remedies or rights it may pursue without affecting any of its rights and remedies under this Security Agreement. If, in the exercise of any of its rights and remedies, the Lender shall forfeit any of its rights or remedies, including its right to enter a deficiency judgment against any Grantor or any other Person, whether because of any applicable laws pertaining to “election of remedies” or the like, each Grantor hereby consents to such action by the Lender and waives any claim based upon such action, even if such action by the Lender shall result in a full or partial loss of any rights of subrogation that such Grantor might otherwise have had but for such action by the Lender.

 

ARTICLE III
REPRESENTATIONS AND WARRANTIES

 

Each Grantor represents and warrants unto the Lender, as at date hereof and at the date of each pledge and delivery hereunder by such Grantor to the Lender of any Collateral (including each pledge and delivery of any Pledged Shares or Pledged Notes), as set forth in this Article.

 

SECTION 3.1. As to Capital Securities of the Subsidiaries, Investment Property.

 

(a)          With respect to the Pledged Shares, all such Pledged Shares are duly authorized and validly issued, fully paid and non-assessable, and represented by a certificate.

 

(b)          With respect to the Pledged Interests, no such Pledged Interests (i) are dealt in or traded on securities exchanges or in securities markets, (ii) expressly provide that such Pledged Interests are securities governed by Article 8 of the UCC, or (iii) are held in a Securities Account, except, with respect to this clause (b), Pledged Interests (A) for which the Lender is the registered owner or (B) with respect to which the Pledged Interests Issuer has agreed in an authenticated record with the applicable Grantor and the Lender to comply with any instructions of the Lender, without the consent of such Grantor.

 

 10Pledge and Security Agreement
and Irrevocable Proxy
 

 

(c)          Such Grantor has delivered all Certificated Securities constituting Collateral held by such Grantor on the date hereof to the Lender, together with duly executed undated blank stock powers, or other equivalent instruments of transfer in form and substance reasonably acceptable to the Lender.

 

(d)          With respect to Uncertificated Securities constituting Collateral owned by such Grantor, such Grantor has caused the Pledged Interests Issuer or other issuer thereof either (i) to register the Lender as the registered owner of such security, or (ii) to agree in an authenticated record with such Grantor and the Lender that such Pledged Interests Issuer or other issuer will comply with instructions with respect to such security originated by the Lender, without further consent of such Grantor.

 

(e)          The percentage of the issued and outstanding Capital Securities in any Person owned by such Grantor is set forth on Schedule I. All of the Pledged Shares and Pledged Interests of such Grantor constitute one hundred percent (100%) of such Grantor’s interest in the applicable Pledged Interests Issuer and the percentage of the total membership, partnership and/or other equity interests in the Pledged Interests Issuer indicated on Schedule I.

 

SECTION 3.2. Grantor’s Name, Location, etc.

 

(a)          (i) The jurisdiction in which such Grantor is located for purposes of Sections 9-301 and 9-307 of the UCC is set forth in Item A-1 of Schedule II hereto, (ii) the place of business of such Grantor or, if such Grantor has more than one place of business, the chief executive office of such Grantor and the office where such Grantor keeps its records concerning the Receivables, and all originals of all chattel paper which evidence Receivables, is set forth in Item A-2 of Schedule II hereto, and (iii) such Grantor’s federal taxpayer identification number is set forth in Item A-3 of Schedule II hereto.

 

(b)          All of the Equipment, Inventory and Goods of such Grantor are located at the places specified in Item B, Item C and Item D, respectively, of Schedule II hereto.

 

(c)          Such Grantor does not have any trade names.

 

(d)          Such Grantor has not been known by any legal name different from the one set forth on the signature page hereto, nor has such Grantor been the subject of any merger or other corporate reorganization, except as set forth in Item E of Schedule II hereto.

 

(e)          Such Grantor is not a party to any federal, state or local government contract except (i) contracts with the Bureau of Ocean Energy Management, Regulation and Enforcement, United States Department of Interior (including its predecessor agency, the Mineral Management Services) or other Federal leases, or (ii) as set forth in Item F of Schedule II hereto.

 

 11Pledge and Security Agreement
and Irrevocable Proxy
 

 

(f)          Such Grantor does not maintain any Deposit Accounts, Securities Accounts or Commodity Accounts with any Person, in each case, except as set forth on Item G of Schedule II.

 

(g)          None of the Receivables is evidenced by a promissory note or other instrument other than a promissory note or instrument that has been delivered to the Lender (with appropriate endorsements).

 

(h)          Such Grantor is not the beneficiary of any Letters of Credit, except as set forth on Item H of Schedule II (as such schedule may be amended or supplemented from time to time) hereto and such Grantor has obtained the consent of each issuer of any material Letter of Credit to the assignment of the proceeds of the letter of credit to the Lender.

 

(i)          Such Grantor does not have Commercial Tort Claims (i) in which a suit has been filed by such Grantor, and (ii) where the amount of damages reasonably expected to be claimed exceeds $1,000,000, except as set forth on Item I of Schedule II.

 

(j)          The name set forth on the signature page attached hereto is the true and correct legal name (as defined in the UCC) of such Grantor.

 

(k)          Such Grantor has obtained a legal, valid and enforceable consent of each issuer of any Letter of Credit with a stated amount in excess of $2,500,000 to the assignment of the Proceeds of such Letter of Credit to the Lender, and has not consented to, and is otherwise aware of, any Person (other than the Lender pursuant hereto) having control (within the meaning of Section 9-104 of the UCC) over, or any other interest in any of such Grantor’s rights in respect thereof.

 

SECTION 3.3. Negotiable Documents, Instruments and Chattel Paper. Such Grantor has, contemporaneously herewith, delivered to the Lender possession of all originals of all Documents, Instruments, promissory notes, Pledged Notes and tangible Chattel Paper owned or held by such Grantor (duly endorsed, in blank, if requested by the Lender).

 

SECTION 3.4. Intellectual Property Collateral. Such Grantor represents that except for any Patent Collateral, Trademark Collateral, and Copyright Collateral specified in Item A, Item B and Item C, respectively, of Schedule III hereto, and any and Trade Secrets Collateral, such Grantor owns and has no interests in any Intellectual Property Collateral as of the date hereof, other than the Computer Hardware and Software Collateral.

 

ARTICLE IV
COVENANTS

 

Each Grantor covenants and agrees that, until the Termination Date, it will perform, comply with and be bound by the obligations set forth below.

 

 12Pledge and Security Agreement
and Irrevocable Proxy
 

 

SECTION 4.1. As to Investment Property, etc.

 

(a)          Capital Securities of Subsidiaries. No Grantor shall allow or permit any of its Subsidiaries (i) that is a corporation, business trust, joint stock company or similar Person, to issue Uncertificated Securities, unless such Person promptly takes the actions set forth in Section 4.1(b)(ii) with respect to any such Uncertificated Securities, (ii) that is a partnership or limited liability company, to (A) issue Capital Securities that are to be dealt in or traded on securities exchanges or in securities markets, (B) expressly provide in its organic documents that its Capital Securities are securities governed by Article 8 of the UCC, or (C) place such Subsidiary’s Capital Securities in a Securities Account, unless such Person promptly takes the actions set forth in Section 4.1(b)(ii) with respect to any such Capital Securities, and (iii) to issue Capital Securities in addition to or in substitution for the Pledged Property or any other Capital Securities pledged hereunder, except for additional Capital Securities issued to such Grantor; provided that (A) such Capital Securities are immediately pledged and delivered to the Lender and (B) such Grantor delivers a supplement to Schedule I to the Lender identifying such new Capital Securities as Pledged Property, in each case pursuant to the terms of this Security Agreement. No Grantor shall permit any of its Subsidiaries to issue any warrants, options, contracts or other commitments or other securities that are convertible to any of the foregoing or that entitle any Person to purchase any of the foregoing, and except for this Security Agreement or the Intercreditor Agreement shall not, and shall not permit any of its Subsidiaries to, enter into any agreement creating any restriction or condition upon the transfer, voting or control of any Pledged Property.

 

(b)          Investment Property (other than Certificated Securities). With respect to (i) any Deposit Accounts, Securities Accounts, Commodity Accounts, Commodity Contracts or Security Entitlements constituting Investment Property owned or held by any Grantor, such Grantor will, upon the Lender’s request, cause the intermediary maintaining such Investment Property to execute a Control Agreement relating to such Investment Property pursuant to which such intermediary agrees to comply with the Lender’s instructions with respect to such Investment Property without further consent by such Grantor, or (ii) any Uncertificated Securities (other than Uncertificated Securities credited to a Securities Account) constituting Investment Property owned or held by such Grantor, such Grantor will cause the Pledged Interests Issuer or other issuer of such securities to either (A) register the Lender as the registered owner thereof on the books and records of the issuer, or (B) execute a Control Agreement relating to such Investment Property pursuant to which the Pledged Interests Issuer or other issuer agrees to comply with the Lender’s instructions with respect to such Uncertificated Securities without further consent by such Grantor.

 

(c)          Certificated Securities (Stock Powers). Each Grantor agrees that all Pledged Shares (and all other certificated shares of Capital Securities constituting Collateral) delivered by such Grantor pursuant to this Security Agreement will be accompanied by duly endorsed undated blank stock powers, or other equivalent instruments of transfer in form and substance reasonably satisfactory to the Lender. Each Grantor will, from time to time upon the request of the Lender, promptly deliver to the Lender on its behalf, such stock powers, instruments and similar documents, in form and substance reasonably satisfactory to the Lender, with respect to the Collateral as the Lender may reasonably request and will, from time to time upon the request of the Lender after the occurrence of any default under the Note (“Event of Default”), promptly transfer any Pledged Shares, Pledged Interests or other shares of Capital Securities constituting Collateral into the name of any nominee designated by the Lender, but subject to the Intercreditor Agreement.

 

 13Pledge and Security Agreement
and Irrevocable Proxy
 

 

(d)          Continuous Pledge. Each Grantor will (subject to the terms of the Note) deliver to the Lender, and at all times keep pledged to the Lender pursuant hereto, on a second-priority, perfected basis all Pledged Property, Investment Property, all dividends and Distributions with respect thereto, all payment intangibles to the extent they are evidenced by a Document, Instrument, promissory note or Chattel Paper, and all interest and principal with respect to such payment intangibles, and all Proceeds and rights from time to time received by or distributable to such Grantor in respect of any of the foregoing Collateral. Each Grantor agrees that it will, promptly (but in any event no later than seven Business Days) following receipt thereof, deliver to the Lender possession of all originals of Pledged Interests, Pledged Shares, Pledged Notes and any other Pledged Property, negotiable Documents, Instruments, promissory notes and Chattel Paper that it acquires following the date hereof and shall deliver to the Lender a supplement to Schedule I identifying any such new Pledged Interests, Pledged Shares, Pledged Notes or other Pledged Property.

 

(e)          Voting Rights; Dividends, etc. Each Grantor agrees:

 

(i)          that promptly upon receipt of notice of the occurrence and continuance of an Event of Default from the Lender and without any request therefor by the Lender, so long as such Event of Default shall continue, to deliver (properly endorsed where required hereby or requested by the Lender) to the Lender, subject to the Intercreditor Agreement, all Distributions with respect to Investment Property, all interest principal and other cash payments on payment intangibles, the Pledged Property and all Proceeds of the Pledged Property or any other Collateral, in case thereafter received by such Grantor, all of which shall be held by the Lender as additional Collateral;

 

(ii)         that, with respect to Pledged Property or any other Collateral consisting of general partner interests, limited partnership interests or limited liability company interests, subject to the Intercreditor Agreement, promptly upon receipt of notice of the occurrence and continuance of an Event of Default from the Lender and of the Lender’s intention to exercise its voting power under Section 4.1(e)(iii) such Grantor shall modify the applicable organic documents to admit the Lender as a general partner, limited partner or member, as applicable; and

 

(iii)        if an Event of Default shall have occurred and be continuing and the Lender has notified such Grantor of the Lender’s intention to exercise its voting power under this Section 4.1(e)(iii), subject to the Intercreditor Agreement,

 

 14Pledge and Security Agreement
and Irrevocable Proxy
 

 

(A) the Lender may exercise (to the exclusion of such Grantor) the voting power and all other incidental rights of ownership with respect to any Pledged Shares, Investment Property or other Capital Securities constituting Collateral; SUBJECT TO THE INTERCREDITOR AGREEMENT AND EACH GRANTOR HEREBY GRANTS THE LENDER AN IRREVOCABLE PROXY (WHICH IRREVOCABLE PROXY SHALL CONTINUE IN EFFECT UNTIL THE TERMINATION DATE) EXERCISABLE UNDER SUCH CIRCUMSTANCES, TO VOTE THE PLEDGED SHARES, PLEDGED INTERESTS, INVESTMENT PROPERTY AND SUCH OTHER COLLATERAL; AND

 

(B) promptly to deliver to the Lender such additional proxies and other documents as may be necessary to allow the Lender to exercise such voting power.

 

All Distributions, interest, principal, cash payments, payment intangibles and Proceeds that may at any time and from time to time be held by any Grantor but which such Grantor is then obligated to deliver to the Lender, shall, until delivery to the Lender, be held by such Grantor separate and apart from its other property in trust for the Lender. The Lender agrees that unless an Event of Default shall have occurred and be continuing and the Lender shall have given the notice referred to in Section 4.1(e), such Grantor shall have the exclusive voting power, and is granted a proxy, with respect to any Capital Securities (including any of the Pledged Shares) constituting Collateral. The Lender shall, upon the written request of such Grantor, promptly deliver, or cause to be delivered, such proxies and other documents, if any, as shall be reasonably requested by such Grantor which are necessary to allow such Grantor to exercise that voting power with respect to any such Capital Securities (including any of the Pledged Shares) constituting Collateral; provided, however, that no vote shall be cast, or consent, waiver, or ratification given, or action taken by such Grantor that would violate any provision of the Note or this Security Agreement.

 

SECTION 4.2. Organic Documents; Change of Name, etc. No Grantor will change its state of incorporation, formation or organization or its name, identity, organizational identification number or corporate structure unless such Grantor shall have (a) given the Lender at least thirty (30) days’ prior notice of such change and (b) taken all actions necessary or as requested by the Lender to ensure that the Liens on the Collateral granted in favor of the Lender remain perfected, second-priority Liens.

 

SECTION 4.3. As to Accounts.

 

(a)          Each Grantor shall have the right to collect all Accounts so long as no Event of Default shall have occurred and be continuing.

 

(b)          Upon (i) the occurrence and continuance of an Event of Default and (ii) the delivery of notice by the Lender to the applicable Grantor, all Proceeds of Collateral received by such Grantor shall be delivered in kind to the Lender for deposit in a Deposit Account of such Grantor maintained at a depositary bank to which such Grantor, the Lender and the depositary bank have entered into a Control Agreement in form and substance reasonably satisfactory to the Lender providing that the depositary bank will comply with the instructions originated by the Lender directing disposition of the funds in the account without further consent by such Grantor (any such Deposit Accounts, together with any other Accounts pursuant to which any portion of the Collateral is deposited with the Lender, a “Collateral Account,” and collectively, the “Collateral Accounts”), and such Grantor shall not commingle any such Proceeds, and shall hold separate and apart from all other property, all such Proceeds in express trust for the benefit of the Lender until delivery thereof is made to the Lender.

 

 15Pledge and Security Agreement
and Irrevocable Proxy
 

 

(c)          Following the delivery of notice pursuant to clause (b)(ii), the Lender shall have, subject to the Intercreditor Agreement, the right to apply any amount in the Collateral Account to the payment of any Secured Obligations which are due and payable or in accordance with the Note or this Security Agreement.

 

(d)          With respect to each of the Collateral Accounts, it is hereby confirmed and agreed that (i) deposits in such Collateral Account are subject to a security interest as contemplated hereby, (ii) such Collateral Account shall be under the control of the Lender and (iii) the Lender shall have the sole right of withdrawal over such Collateral Account.

 

(e)          Following the occurrence and during the continuance of an Event of Default, at the request of the Lender, such Grantor will maintain all of its Deposit Accounts only with any depositary institution that has entered into a Control Agreement in favor of the Lender.

 

SECTION 4.4. As to the Grantors’ Use of Collateral.

 

(a)          At any time following the occurrence and during the continuance of an Event of Default, whether before or after the maturity of any of the Secured Obligations, subject to the terms of the Intercreditor Agreement, the Lender may (i) notify any parties obligated on any of the Collateral to make payment to the Lender of any amounts due or to become due thereunder, and (ii) enforce collection of any of the Collateral by suit or otherwise and surrender, release, or exchange all or any part thereof, or compromise or extend or renew for any period (whether or not longer than the original period) any indebtedness thereunder or evidenced thereby.

 

(b)          Upon request of the Lender following the occurrence and during the continuance of an Event of Default, subject to the terms of the Intercreditor Agreement, each Grantor will, at its own expense, notify any parties obligated on any of the Collateral to make payment to the Lender of any amounts due or to become due thereunder.

 

(c)          At any time following the occurrence and during the continuation of an Event of Default, subject to the terms of the Intercreditor Agreement, the Lender may endorse, in the name of any Grantor, any item, howsoever received by the Lender, representing any payment on or other Proceeds of any of the Collateral.

 

 16Pledge and Security Agreement
and Irrevocable Proxy
 

 

SECTION 4.5. As to Intellectual Property Collateral. Each Grantor covenants and agrees to comply with the following provisions as such provisions relate to any Intellectual Property Collateral material to the operations or business of such Grantor:

 

(a)          in no event will such Grantor or any of its agents, employees, designees or licensees file an application for the registration of any Intellectual Property Collateral with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in any other country or any political subdivision thereof, unless it promptly informs the Lender, and upon request of the Lender (subject to the terms of the Note and the Intercreditor Agreement), executes and delivers all agreements, instruments and documents as the Lender may reasonably request to evidence the Lender’s security interest in such Intellectual Property Collateral;

 

(b)          following the obtaining of an interest in any material Intellectual Property, such Grantor shall deliver a supplement to Schedule II identifying such new Intellectual Property; and

 

(c)          following the obtaining of an interest in any material Intellectual Property by such Grantor or, following the occurrence and during the continuance of an Event of Default, upon the request of the Lender, subject to the terms of the Intercreditor Agreement, Grantor shall deliver all agreements, instruments and documents the Lender may reasonably request to evidence the Lender’s security interest in such Intellectual Property Collateral and as may otherwise be required to acknowledge or register or perfect the Lender’s interest in any part of such item of Intellectual Property Collateral unless such Grantor shall determine in good faith that any Intellectual Property Collateral is of negligible economic value to such Grantor.

 

SECTION 4.6. As to Letter-of-Credit Rights.

 

(a)          Each Grantor, by granting a security interest in its Letter of Credit Rights to the Lender, intends to (and hereby does) collaterally assign to the Lender its rights (including its contingent rights) to the Proceeds of all Letter of Credit Rights of which it is or hereafter becomes a beneficiary or assignee. Promptly following the date on which any Grantor obtains any Letter of Credit Rights after the date hereof, such Grantor shall (i) deliver a supplement to Schedule II identifying such new Letter-of-Credit Right and (ii) cause the issuer of each Letter of Credit and each nominated person (if any) with respect thereto to consent to such assignment of the Proceeds thereof in a consent agreement in form and substance reasonably satisfactory to the Lender and deliver written evidence of such consent to the Lender.

 

(b)          Upon the occurrence of an Event of Default, such Grantor will, promptly upon request by the Lender and subject to the terms of the Intercreditor Agreement, (i) notify (and each Grantor hereby authorizes the Lender to notify) the issuer and each nominated person with respect to each of the Letters of Credit that the Proceeds thereof have been assigned to the Lender hereunder and any payments due or to become due in respect thereof are to be made directly to the Lender and (ii) arrange for the Lender to become the transferee beneficiary Letter of Credit.

 

 17Pledge and Security Agreement
and Irrevocable Proxy
 

 

SECTION 4.7. As to Commercial Tort Claims. Each Grantor covenants and agrees that, until the Termination Date, with respect to any Commercial Tort Claim in excess of $1,000,000 individually or in the aggregate hereafter arising, it shall, subject to the terms of the Intercreditor Agreement, deliver to the Lender a supplement to Schedule II in form and substance reasonably satisfactory to the Lender, identifying such new Commercial Tort Claims.

 

SECTION 4.8. Electronic Chattel Paper and Transferable Records. If any Grantor at any time holds or acquires an interest in any electronic chattel paper or any “transferable record,” as that term is defined in Section 201 of the U.S. Federal Electronic Signatures in Global and National Commerce Act, or in Section 16 of the U.S. Uniform Electronic Transactions Act as in effect in any relevant jurisdiction, with a value in excess of $1,000,000, such Grantor shall promptly notify the Lender thereof and, at the request of the Lender and subject to the terms of the Intercreditor Agreement, shall take such action as the Lender may request (which shall be consistent with that taken in connection with the Credit Agreement ) to vest in the Lender control under Section 9-105 of the UCC of such electronic chattel paper or control under Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or, as the case may be, Section 16 of the Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of such transferable record. The Lender agrees with such Grantor that the Lender will arrange, pursuant to procedures substantially similar to those utilized by the First Lien Administrative Agent pursuant to the Credit Agreement and so long as such procedures will not result in the Lender’s loss of control, for such Grantor to make alterations to the electronic chattel paper or transferable record permitted under Section 9-105 of the UCC or, as the case may be, Section 201 of the U.S. Federal Electronic Signatures in Global and National Commerce Act or Section 16 of the U.S. Uniform Electronic Transactions Act for a party in control to allow without loss of control, unless an Event of Default has occurred and is continuing or would occur after taking into account any action by such Grantor with respect to such electronic chattel paper or transferable record.

 

SECTION 4.9. Further Assurances, etc. Each Grantor shall warrant and defend the right and title herein granted unto the Lender in and to the Collateral (and any right, title and interest represented by the Collateral) against the claims and demands of all Persons whomsoever. Each Grantor agrees that, from time to time at its own expense, it will promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or that the Lender may reasonably request, in order to perfect, preserve and protect any security interest granted or purported to be granted hereby or to enable the Lender to exercise and enforce its rights and remedies hereunder with respect to any Collateral. Each Grantor agrees that, upon the acquisition after the date hereof by such Grantor of any Collateral, with respect to which the security interest granted hereunder is not perfected automatically upon such acquisition, to take such actions with respect to such Collateral or any part thereof as required by this Security Agreement. Without limiting the generality of the foregoing, such Grantor will:

 

(a)          from time to time upon the request of the Lender, promptly deliver to the Lender such stock powers, instruments and similar documents, in form and substance reasonably satisfactory to the Lender, with respect to such Collateral as the Lender may reasonably request and will, from time to time upon the request of the Lender, after the occurrence and during the continuance of any Event of Default, promptly transfer any securities constituting Collateral into the name of any nominee designated by the Lender; if any Collateral shall be evidenced by an Instrument, negotiable Document, promissory note or tangible Chattel Paper, deliver and pledge to the Lender hereunder such Instrument, negotiable Document, promissory note, Pledged Note or tangible Chattel Paper duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in accordance with the terms of the Intercreditor Agreement and in form and substance reasonably satisfactory to the Lender;

 

 18Pledge and Security Agreement
and Irrevocable Proxy
 

 

(b)          file (and each Grantor hereby authorizes the Lender to file) such filing statements or continuation statements, or amendments thereto, and such other instruments or notices (including any assignment of claim form under or pursuant to the federal assignment of claims statute, 31 U.S.C. § 3726, any successor or amended version thereof or any regulation promulgated under or pursuant to any version thereof), as may be necessary or that the Lender may request in order to perfect and preserve the security interests and other rights granted or purported to be granted to the Lender hereby. The authorization contained in this Section 4.9 shall be irrevocable and continuing until the Termination Date;

 

(c)          deliver to the Lender or a bailee therefore and at all times keep pledged to the Lender pursuant hereto, on a second-priority, perfected basis, at the request of the Lender, all Investment Property constituting Collateral (except for Permitted Liens), all Distributions with respect thereto, and all interest and principal with respect to promissory notes, and all Proceeds and rights from time to time received by or distributable to such Grantor in respect of any of the foregoing Collateral;

 

(d)          not create any tangible Chattel Paper without placing a legend on such tangible Chattel Paper indicating that the Lender has a security interest in such Chattel Paper;

 

(e)          furnish to the Lender, from time to time at the Lender’s request, statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Lender may reasonably request, all in reasonable detail; and

 

(f)          do all things reasonably requested by the Lender in accordance with this Security Agreement in order to enable the Lender to have and maintain control over the Collateral consisting of Investment Property, Deposit Accounts, Letter of Credit Rights and Electronic Chattel Paper.

 

With respect to the foregoing and the grant of the security interest hereunder, each Grantor hereby authorizes the Lender to file one or more financing or continuation statements, any amendments thereto, and other similar documents necessary or desirable in the opinion of the Lender to perfect or maintain the perfection of the Lender’s security interest in the Collateral or any portion thereof, in each of the foregoing cases, without the signature and without further authorization of such Grantor. Each Grantor agrees that a carbon, photographic or other reproduction of this Security Agreement or any UCC financing statement covering the Collateral or any part thereof shall be sufficient as a UCC financing statement where permitted by law. Each Grantor hereby authorizes the Lender to file financing statements describing as the collateral covered thereby “all of the debtor’s personal property or assets” or words to that effect, notwithstanding that such wording may be broader in scope than the Collateral described in this Security Agreement.

 

 19Pledge and Security Agreement
and Irrevocable Proxy
 

 

ARTICLE V
THE LENDER

 

SECTION 5.1. Lender Appointed Attorney-in-Fact. Each Grantor hereby irrevocably appoints the Lender its attorney-in-fact, with full authority in the place and stead of such Grantor and in the name of such Grantor or otherwise, from time to time in the Lender’s discretion, following the occurrence and during the continuance of an Event of Default, to take any action and to execute any instrument, subject to the Intercreditor Agreement, which the Lender may deem necessary or advisable to accomplish the purposes of this Security Agreement, including (a) to ask, demand, collect, sue for, recover, compromise, receive and give acquittance and receipts for moneys due and to become due under or in respect of any of the Collateral, (b) to receive, endorse, and collect any drafts or other Instruments, Documents and Chattel Paper, in connection with clause (a) above, (c) to file any claims or take any action or institute any proceedings which the Lender may deem necessary or desirable for the collection of any of the Collateral or otherwise to enforce the rights of the Lender with respect to any of the Collateral, and (d) to perform the affirmative obligations of such Grantor hereunder. EACH GRANTOR HEREBY ACKNOWLEDGES, CONSENTS AND AGREES THAT THE POWER OF ATTORNEY GRANTED PURSUANT TO THIS SECTION 5.1 IS IRREVOCABLE AND COUPLED WITH AN INTEREST AND SHALL BE EFFECTIVE UNTIL THE TERMINATION DATE.

 

SECTION 5.2. Lender Has No Duty.

 

(a)          The powers conferred on the Lender hereunder are solely to protect its interest in the Collateral and shall not impose any duty on it to exercise any such powers. Except for reasonable care of any Collateral in its possession and the accounting for moneys actually received by it hereunder, the Lender shall not have any duty as to any Collateral or responsibility for (a) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any Investment Property and any other Pledged Property, whether or not the Lender has or is deemed to have knowledge of such matters, or (b) taking any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral.

 

(b)          Anything contained herein to the contrary notwithstanding, the Lender may from time to time, when the Lender deems it to be necessary, appoint one or more subagents (each a “Subagent”) for the Lender hereunder with respect to all or any part of the Collateral (and shall notify EPL of such appointment; provided, that the failure to so notify EPL shall not affect the provisions of this Section 5.2(b)). In the event that the Lender so appoints any Subagent with respect to any Collateral, (i) the assignment and pledge of such Collateral and the security interest granted in such Collateral by the Grantors hereunder shall be deemed for purposes of this Agreement to have been made to such Subagent, in addition to the Lender, as security for the Secured Obligations, (ii) such Subagent shall automatically be vested, in addition to the Lender, with all rights, powers, privileges, interests, obligations and remedies of the Lender hereunder with respect to such Collateral, and (iii) the term “Lender,” when used herein in relation to any rights, powers, privileges, interests, obligations and remedies of the Lender with respect to such Collateral, shall include such Subagent; provided, however, that no such Subagent shall be authorized to take any action with respect to any such Collateral unless and except to the extent expressly authorized in writing by the Lender.

 

 20Pledge and Security Agreement
and Irrevocable Proxy
 

 

SECTION 5.3. Reasonable Care. The Lender is required to exercise reasonable care in the custody and preservation of any of the Collateral in its possession; provided, that the Lender shall be deemed to have exercised reasonable care in the custody and preservation of any of the Collateral (a) if such Collateral is accorded treatment substantially equal to that which the Lender accords its own personal property, or (b) if the Lender takes such action for that purpose as any Grantor reasonably requests in writing at times other than upon the occurrence and during the continuance of an Event of Default; provided, further, that failure of the Lender to comply with any such request at any time shall not in itself be deemed a failure to exercise reasonable care.

 

ARTICLE VI
REMEDIES

 

SECTION 6.1. Certain Remedies. Subject to the Intercreditor Agreement, if any Event of Default shall have occurred and be continuing:

 

(a)          The Lender may exercise in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party on default under the UCC (whether or not the UCC applies to the affected Collateral) and also may (i) take possession of any Collateral not already in its possession without demand and without legal process, (ii) require any Grantor to, and each Grantor hereby agrees that it will, at its expense and upon request of the Lender forthwith, assemble all or part of the Collateral as directed by the Lender and make it available to the Lender at a place to be designated by the Lender that is reasonably convenient to both parties, (iii) enter onto the property where any Collateral is located and take possession thereof without demand and without legal process, (iv) without notice except as specified below, lease, license, sell or otherwise dispose of the Collateral or any part thereof in one or more parcels at public or private sale, at any of the Lender’s offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Lender may deem commercially reasonable. Each Grantor agrees that, to the extent notice of sale shall be required by law, at least ten days’ prior notice to such Grantor of the time and place of any public sale or the time of any private sale is to be made shall constitute reasonable notification; provided, however, that with respect to Collateral that is (x) perishable or threatens to decline speedily in value, or (y) is of a type customarily sold on a recognized market (including but not limited to, Investment Property), no notice of sale or disposition need be given. For purposes of this Article VI, notice of any intended sale or disposition of any Collateral may be given by first-class mail, hand-delivery (through a delivery service or otherwise), facsimile or email, and shall be deemed to have been “sent” upon deposit in the U.S. Mails with adequate postage properly affixed, upon delivery to an express delivery service or upon electronic submission through telephonic or internet services, as applicable. The Lender shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. The Lender may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.

 

 21Pledge and Security Agreement
and Irrevocable Proxy
 

 

(b)          Each Grantor agrees and acknowledges that a commercially reasonable disposition of Inventory, Equipment, Goods, Computer Hardware and Software Collateral, or Intellectual Property may be by lease or license of, in addition to the sale of, such Collateral. Each Grantor further agrees and acknowledges that the following shall be deemed a reasonable commercial disposition: (i) a disposition made in the usual manner on any recognized market, (ii) a disposition at the price current in any recognized market at the time of disposition, and (iii) a disposition in conformity with reasonable commercial practices among dealers in the type of property subject to the disposition.

 

(c)          All cash Proceeds received by the Lender in respect of any sale of, collection from, or other realization upon, all or any part of the Collateral shall be applied by the Lender against, all or any part of the obligations under the Note. The Lender shall not be obligated to apply or pay over for application noncash proceeds of collection or enforcement unless (i) the failure to do so would be commercially unreasonable, and (ii) the affected party has provided the Lender with a written demand to apply or pay over such noncash proceeds on such basis.

 

(d)          The Lender may do any or all of the following: (i) transfer all or any part of the Collateral into the name of the Lender or its nominee, with or without disclosing that such Collateral is subject to the Lien hereunder, (ii) notify the parties obligated on any of the Collateral to make payment to the Lender of any amount due or to become due thereunder, (iii) withdraw, or cause or direct the withdrawal, of all funds with respect to the Collateral Account, (iv) enforce collection of any of the Collateral by suit or otherwise, and surrender, release or exchange all or any part thereof, or compromise or extend or renew for any period (whether or not longer than the original period) any obligations of any nature of any party with respect thereto, (v) endorse any checks, drafts, or other writings in any Grantor’s name to allow collection of the Collateral, (vi) take control of any Proceeds of the Collateral, or (vii) execute (in the name, place and stead of any Grantor) endorsements, assignments, stock powers and other instruments of conveyance or transfer with respect to all or any of the Collateral.

 

SECTION 6.2. Securities Laws. If the Lender shall determine to exercise its right to sell all or any of the Collateral that are Capital Securities pursuant to Section 6.1, each Grantor agrees that, upon request of the Lender, such Grantor will, at its own expense:

 

 22Pledge and Security Agreement
and Irrevocable Proxy
 

 

(a)          execute and deliver, and cause (or, with respect to any issuer which is not a Subsidiary of such Grantor, use its reasonable efforts to cause) each Pledged Interests Issuer or other issuer of the Collateral contemplated to be sold and the directors and officers thereof to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts and things, as may be necessary or, in the reasonable opinion of the Lender, advisable to register such Collateral under the provisions of the Securities Act of 1933, as from time to time amended (the “Securities Act”), and cause the registration statement relating thereto to become effective and to remain effective for such period as prospectuses are required by law to be furnished, and to make all amendments and supplements thereto and to the related prospectus which, in the reasonable opinion of the Lender, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the SEC applicable thereto;

 

(b)          use its reasonable efforts to exempt the Collateral under the state securities or “Blue Sky” laws and to obtain all necessary Governmental Approvals for the sale of the Collateral, as requested by the Lender;

 

(c)          cause (or, with respect to any issuer that is not a Subsidiary of such Grantor, use its reasonable efforts to cause) each such Pledged Interests Issuer or other issuer to make available to its security holders, as soon as practicable, an earnings statement that will satisfy the provisions of Section 11(a) of the Securities Act; and

 

(d)          do or cause to be done all such other acts and things as may be reasonably necessary to make such sale of the Collateral or any part thereof valid and binding and in compliance with applicable law.

 

Each Grantor acknowledges the impossibility of ascertaining the amount of damages that would be suffered by the Lender by reason of the failure by such Grantor to perform any of the covenants contained in this Section 6.2 and consequently agrees that, if such Grantor shall fail to perform any of such covenants, it shall pay, as liquidated damages and not as a penalty, an amount equal to the value (as reasonably determined by the Lender in good faith) of such Collateral on the date the Lender shall demand compliance with this Section 6.2.

 

SECTION 6.3. Compliance with Restrictions. Each Grantor agrees that in any sale of any of the Collateral whenever an Event of Default shall have occurred and be continuing, the Lender is hereby authorized to comply with any limitation or restriction in connection with such sale as it may be advised by counsel is necessary in order to avoid any violation of applicable law (including compliance with such procedures as may restrict the number of prospective bidders and purchasers, require that such prospective bidders and purchasers have certain qualifications, and restrict such prospective bidders and purchasers to Persons who will represent and agree that they are purchasing for their own account for investment and not with a view to the distribution or resale of such Collateral), or in order to obtain any required approval of the sale or of the purchaser by any governmental authority or official, and each Grantor further agrees that such compliance shall not result in such sale being considered or deemed not to have been made in a commercially reasonable manner, nor shall the Lender be liable nor accountable to such Grantor for any discount allowed by the reason of the fact that such Collateral is sold in compliance with any such limitation or restriction.

 

SECTION 6.4. Protection of Collateral. The Lender may from time to time, at its option, perform any act which any Grantor fails to perform after being requested in writing so to perform (it being understood that no such request need be given after the occurrence and during the continuance of an Event of Default) and the Lender may from time to time take any other action which the Lender deems reasonably necessary for the maintenance, preservation or protection of any of the Collateral or of its security interest therein.

 

 23Pledge and Security Agreement
and Irrevocable Proxy
 

 

SECTION 6.5. Indemnity and Expenses.

 

(a)          Without limiting the generality of any of the provisions of the Note, each Grantor hereby indemnifies and holds harmless the Lender, and each of its respective officers, directors, employees and agents (the “Indemnified Parties”) from and against any and all claims, losses and liabilities arising out of or resulting from this Security Agreement (including, without limitation, enforcement of this Security Agreement), except claims, losses or liabilities resulting from any Indemnified Party’s gross negligence, willful misconduct or unlawful acts; PROVIDED, HOWEVER, THAT IT IS THE INTENTION OF THE PARTIES HERETO THAT EACH INDEMNIFIED PARTY BE INDEMNIFIED IN THE CASE OF ITS OWN NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE), REGARDLESS OF WHETHER SUCH NEGLIGENCE IS SOLE OR CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR TECHNICAL. If and to the extent that the foregoing undertaking may be unenforceable for any reason, such Grantor hereby agrees to make the maximum contribution to the payment and satisfaction of each of the foregoing which is permissible under applicable law.

 

(b)          Each Grantor will upon demand pay to the Lender and any local counsel the amount of any and all reasonable expenses, including the reasonable fees and disbursements of its counsel and of any experts and agents, which the Lender and any local counsel may incur in connection herewith, including without limitation in connection with (i) the administration of this Security Agreement, (ii) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, any of the Collateral, (iii) the exercise or enforcement of any of the rights of the Lender and any local counsel, or (iv) the failure by such Grantor to perform or observe any of the provisions hereof.

 

SECTION 6.6. Warranties. The Lender may sell the Collateral without giving any warranties or representations as to the Collateral. The Lender may disclaim any warranties of title or the like. Each Grantor agrees that this procedure will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.

 

ARTICLE VII
MISCELLANEOUS PROVISIONS

 

SECTION 7.1. Reserved.

 

SECTION 7.2. Binding on Successors, Transferees and Assigns; Assignment. This Security Agreement shall remain in full force and effect until the Termination Date has occurred, shall be binding upon each Grantor and their successors, transferees and assigns and shall inure to the benefit of the Lender and its successors, transferees and assigns; provided that no Grantor shall (unless otherwise permitted under the terms of the Note or this Security Agreement) assign any of its obligations hereunder.

 

 24Pledge and Security Agreement
and Irrevocable Proxy
 

 

SECTION 7.3. Amendments, etc. No amendment to or waiver of any provision of this Security Agreement, nor consent to any departure by any Grantor from its obligations under this Security Agreement, shall in any event be effective unless the same shall be in writing and signed by the Lender and each Grantor and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

 

SECTION 7.4. Notices. Except as otherwise provided in this Security Agreement, all notices and other communications provided for hereunder shall be provided in accordance with the terms of the Note.

 

SECTION 7.5. Release of Liens. Upon (a) the disposition of Collateral in accordance with the Note or (b) the occurrence of the Termination Date, the security interests granted herein shall automatically terminate with respect to (i) such Collateral (in the case of clause (a)) or (ii) all Collateral (in the case of clause (b)). Upon any such disposition or termination, the Lender will, at the Grantors’ sole expense, deliver to each Grantor, without any representations, warranties or recourse of any kind whatsoever, all Collateral held by the Lender hereunder, and execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination.

 

SECTION 7.6. No Waiver; Remedies. In addition to, and not in limitation of Section 2.7, no failure on the part of the Lender to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

 

SECTION 7.7. Headings. The various headings of this Security Agreement are inserted for convenience only and shall not affect the meaning or interpretation of this Security Agreement or any provisions thereof.

 

SECTION 7.8. Severability. Any provision of this Security Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Security Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

 

SECTION 7.9. Governing Law, Entire Agreement, etc. THIS SECURITY AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), EXCEPT TO THE EXTENT THAT THE PERFECTION, EFFECT OF PERFECTION OR NONPERFECTION, AND PRIORITY OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

 

 25Pledge and Security Agreement
and Irrevocable Proxy
 

 

THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

 

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

SECTION 7.10. Counterparts. This Security Agreement may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. Delivery of an executed counterpart of a signature page to this Security Agreement by facsimile shall be effective as delivery of a manually executed counterpart of this Security Agreement.

 

SECTION 7.11. Additional Grantors. If at any time any Person is required to become a “Grantor” hereunder pursuant to the Note, such Person shall execute and deliver a Second Lien Pledge and Security Agreement Supplement in form and substance reasonably acceptable to the Lender (each, a “Supplement”). Upon such execution and delivery, any such Person shall become a “Grantor” hereunder for all purposes under this Security Agreement, and each Schedule hereto shall be automatically updated to reflect the information set forth on each Schedule attached to the applicable Supplement.

 

SECTION 7.12. Intercreditor Agreement Controls.

 

(a)          The Lender, by accepting the benefits of the security provided hereby, (i) consents (or is deemed to consent), to the subordination of Liens provided for in the Intercreditor Agreement and (ii) agrees (or is deemed to agree) that it will be bound by, and will take no actions contrary to, the provisions of the Intercreditor Agreement.

 

(b)          Notwithstanding any other provision contained herein, this Security Agreement, the Liens created hereby and the rights, remedies, duties and obligations provided for herein are subject in all respects to the provisions of the Intercreditor Agreement. In the event of any conflict or inconsistency between the provisions of this Security Agreement and the Intercreditor Agreement, the provisions of the Intercreditor Agreement shall control.

 

(c)          Without limiting the foregoing, at any time prior to the Liens related to the Credit Agreement, any provision hereof requiring any Grantor to deliver possession of any Collateral to the Lender, or to cause the Lender to control any Collateral, shall be deemed to have been complied with, if and for so long as (i) the Intercreditor Agreement is in full force and effect and (ii) the First Lien Administrative Agent shall have such possession or control for the benefit of the Lender and as bailee or sub-agent of the Lender as provided in the Intercreditor Agreement.

 

 26Pledge and Security Agreement
and Irrevocable Proxy
 

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Security Agreement to be duly executed and delivered by its Authorized Officer as of the date first above written.

 

  GRANTORS
     
  EPL OIL & GAS, INC.
     
  By: /s/ Antonio de Pinho
  Name: Antonio de Pinho
  Title: President
     
  DELAWARE EPL OF TEXAS, LLC
     
  By: /s/ Antonio de Pinho
  Name: Antonio de Pinho
  Title: President
     
  EPL OF LOUISIANA, LLC
     
  By: /s/ Antonio de Pinho
  Name: Antonio de Pinho
  Title: President
     
  ENERGY PARTNERS LTD., LLC
     
  By: /s/ Antonio de Pinho
  Name: Antonio de Pinho
  Title: President
     
  EPL PIONEER HOUSTON, INC.
     
  By: /s/ Antonio de Pinho
  Name: Antonio de Pinho
  Title: President
     
  EPL PIPELINE, LLC
     
  By: /s/ Antonio de Pinho
  Name: Antonio de Pinho
  Title: President
     
  NIGHTHAWK, LLC
     
  By: /s/ Antonio de Pinho
  Name: Antonio de Pinho
  Title: President

 

 S-1Pledge and Security Agreement
and Irrevocable Proxy
 

 

  ANGLO-SUISSE OFFSHORE PIPELINE
PARTNERS, LLC
     
  By: /s/ Antonio de Pinho
  Name: Antonio de Pinho
  Title: President
     
  Address for Grantors:
   
  1021 Main (One City Centre), Suite 2626
  Houston, Texas 77002
   
  with copy to:
   
  1021 Main (One City Centre), Suite 2626
  Houston, Texas 77002
  Attention:  Bruce W. Busmire
  Telephone No.:  713-351-3033
  Telecopier No.:  713-351-3333  

 

 S-2Second Lien Pledge and Security Agreement
and Irrevocable Proxy (GOM)
 

 

  LENDER:
     
  Energy XXI Gulf Coast, Inc.
     
  By: /s/ Antonio de Pinho
  Name:  Antonio de Pinho
  Title:  President
     
  Address: 1021 Main (One City Centre), Suite 2626
    Houston, Texas 77002
  Attention: Bruce W. Busmire
  Telephone No.:  713-351-3033
  Telecopier No.  713-351-3333

 

 S-3Pledge and Security Agreement
and Irrevocable Proxy
 

 

SCHEDULE I
to Security Agreement

 

ITEM A – PLEDGED INTERESTS

  

            Common Stock
Pledged Interests Issuer (corporate)   Cert. #   # of
Shares
  Authorized
Shares
  Outstanding
Shares
  % of Shares
Pledged
                     
                     
                     

 

    Limited Liability Company Interests
Pledged Interests Issuer (limited
liability company)
 

% of Limited Liability

Company Interests Pledged

 

Type of Limited Liability

Company Interests Pledged

         
         
         

 

    Partnership Interests
Pledged Interests Issuer (partnership)   % of Partnership
Interests Owned
  % of Partnership
Interests Pledged
         
         
         

 

ITEM B – PLEDGED NOTES

 

1. Pledged Note Issuer Description:

 

SCHEDULE II
to Security Agreement

 

Item A-1.Location of Grantor for purposes of UCC.

 

 Schedule II-1Pledge and Security Agreement
and Irrevocable Proxy
 

 

Item A-2.Grantor’s place of business or principal office.

 

Item A-3.Taxpayer ID number.

 

Item B.Equipment.

 

Item C.Inventory.

 

SCHEDULE II
to Security Agreement

 

Item D.Goods

 

Item E.Merger or other corporate reorganization.

 

Description of Merger:

 

 Schedule II-2Pledge and Security Agreement
and Irrevocable Proxy
 

 

Item F.Government Contracts.

 

Description of Contract:

 

Item G.Deposit Accounts and Securities Accounts.

 

Deposit Accounts:    
     
Account Description   Account Number
     
     
     
     
Securities Accounts:    
     
Account Description   Account Number
     
     
     

 

SCHEDULE II
to Security Agreement

 

Item H.Letter of Credit Rights.

 

Description of Letter of Credit Rights:

 

Item I.Commercial Tort Claims.

 

Description of Commercial Tort Claims:

 

 Schedule II-3Pledge and Security Agreement
and Irrevocable Proxy
 

 

SCHEDULE III - A
to Security Agreement

 

INTELLECTUAL PROPERTY COLLATERAL

 

Item A.           Patent Collateral.

 

Issued Patents

 

Country    Patent No.    Issue Date    Inventor(s)    Title
                 
                 
                 

 

Pending Patent Applications

 

Country    Serial No.    Filing Date    Inventor(s)    Title
                 
                 
                 

 

Patent Applications in Preparation

 

        Expected        
Country   Docket No.   Filing Date   Inventor(s)   Title
                 
                 
                 

  

 Schedule III-A-1Pledge and Security Agreement
and Irrevocable Proxy
 

 

SCHEDULE III - B
to Security Agreement

 

Item B.           Trademark Collateral

 

Registered Trademarks

 

Country    Trademark    Registration No.    Registration Date
             
             
             

 

Pending Trademark Applications

 

Country    Trademark    Serial No.    Filing Date
             
             
             

 

Trademark Applications In Preparation

 

            Expected   Products/
Country    Trademark    Docket No.    Filing Date    Services
                 
                 
                 

 

 Schedule III-B-1Pledge and Security Agreement
and Irrevocable Proxy
 

 

SCHEDULE III - C
to Security Agreement

 

Item C.           Copyright Collateral.

 

Registered Copyrights/Mask Works

 

Country    Registration No.    Registration Date    Author(s)    Title
                 
                 
                 

 

Copyright/Mask Work Pending Registration Applications

 

Country    Serial No.    Filing Date    Author(s)    Title
                 
                 
                 

 

Copyright/Mask Work Registration Applications In Preparation

 

        Expected        
Country    Docket No.    Filing Date    Author(s)    Title
                 
                 
                 

 

 Schedule II-C-1Pledge and Security Agreement
and Irrevocable Proxy

Energy Partners (NYSE:EPL)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Energy Partners Charts.
Energy Partners (NYSE:EPL)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Energy Partners Charts.