SECOND RESTRUCTURE AGREEMENT
BETWEEN
JOINT ENERGY DEVELOPMENT INVESTMENTS LIMITED PARTNERSHIP
AND
FOREST OIL CORPORATION
DECEMBER 29, 1995
TABLE OF CONTENTS
ARTICLE I
INTRODUCTION AND DEFINITIONS
Section 1.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Definitions. . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
SECOND RESTRUCTURE TRANSACTION
Section 2.1 Transaction. . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.2 Xxxx-Xxxxx-Xxxxxx Act Filing . . . . . . . . . . . . . . . 5
Section 2.3 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.4 Simultaneous Closing.. . . . . . . . . . . . . . . . . . . 5
Section 2.5 JEDI Conditions to Closing . . . . . . . . . . . . . . . . 5
Section 2.6 Company Conditions to Closing. . . . . . . . . . . . . . . 8
Section 2.7 Additional Conditions to Closing . . . . . . . . . . . . . 9
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF JEDI
Section 3.1 Organization; Authority. . . . . . . . . . . . . . . . . . 9
Section 3.2 Execution and Delivery; Enforceability . . . . . . . . . . 9
Section 3.3 Approvals and Consents . . . . . . . . . . . . . . . . . .10
Section 3.4 No Violations. . . . . . . . . . . . . . . . . . . . . . .10
Section 3.5 Purchase for Investment. . . . . . . . . . . . . . . . . .10
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.1 Organization and Existence . . . . . . . . . . . . . . . .10
Section 4.2 Capitalization . . . . . . . . . . . . . . . . . . . . . .11
Section 4.4 Authority and Approval . . . . . . . . . . . . . . . . . .13
Section 4.5 No Conflict. . . . . . . . . . . . . . . . . . . . . . . .13
Section 4.6 SEC Documents. . . . . . . . . . . . . . . . . . . . . . .14
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ARTICLE V
ADDITIONAL COVENANTS OF THE PARTIES
Section 5.1 Notification . . . . . . . . . . . . . . . . . . . . . . .14
Section 5.2 Public Statements. . . . . . . . . . . . . . . . . . . . .15
Section 5.3 Confidentiality. . . . . . . . . . . . . . . . . . . . . .15
Section 5.4 Further Assurances . . . . . . . . . . . . . . . . . . . .15
Section 5.5 Expenses . . . . . . . . . . . . . . . . . . . . . . . . .15
Section 5.6 Adjustments to Shares. . . . . . . . . . . . . . . . . . .16
Section 5.7 Suspension of Non-Compliance . . . . . . . . . . . . . . .16
ARTICLE VI
INDEMNIFICATION
Section 6.1 Indemnification. . . . . . . . . . . . . . . . . . . . . .17
Section 6.2 Indemnification Procedures . . . . . . . . . . . . . . . .18
Section 6.3 Appeal . . . . . . . . . . . . . . . . . . . . . . . . . .19
Section 6.4 Contribution . . . . . . . . . . . . . . . . . . . . . . .19
Section 6.5 No Limitation on Other Rights of Recovery. . . . . . . . .20
ARTICLE VII
TERMINATION
Section 7.1 Termination Events . . . . . . . . . . . . . . . . . . . .20
Section 7.2 Limitation on Termination. . . . . . . . . . . . . . . . .20
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Survival . . . . . . . . . . . . . . . . . . . . . . . . .21
Section 8.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . . .21
Section 8.3 Governing Law. . . . . . . . . . . . . . . . . . . . . . .22
Section 8.4 No Waivers; Rights Cumulative. . . . . . . . . . . . . . .22
Section 8.5 Remedies . . . . . . . . . . . . . . . . . . . . . . . . .22
Section 8.6 Amendments, Etc. . . . . . . . . . . . . . . . . . . . . .22
Section 8.7 Entire Agreement . . . . . . . . . . . . . . . . . . . . .23
Section 8.8 Binding Effect and Assignment. . . . . . . . . . . . . . .23
Section 8.9 Severability . . . . . . . . . . . . . . . . . . . . . . .23
Section 8.10 Headings; Schedules. . . . . . . . . . . . . . . . . . . .23
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EXHIBITS
Exhibit A Form of JEDI Shareholders Agreement
Exhibit B Form of Third Amendment to Loan Agreement
Exhibit C Form of Legends for Stock Certificates
Exhibit D Form of Amendment No. 1 to JEDI Registration Rights Agreement
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SECOND RESTRUCTURE AGREEMENT
This Second Restructure Agreement (the "Agreement") is made and entered
into as of December 29, 1995, between Joint Energy Development Investments
Limited Partnership, a Delaware limited partnership ("JEDI"), and Forest Oil
Corporation, a New York corporation (the "Company"), which agree as follows:
ARTICLE I
INTRODUCTION AND DEFINITIONS
SECTION 1.1 INTRODUCTION. JEDI and the Company are parties to a Loan
Agreement dated December 28, 1993, as amended by First Amendment to Loan
Agreement dated as of December 28, 1993, and Second Amendment to Loan Agreement
dated July 27, 1995 (the "Loan Agreement"), and a Restructure Agreement dated
May 17, 1995 (the "First Restructure Agreement"). The Company and JEDI desire
to exchange the Tranche B Loan (as defined in the Loan Agreement) and JEDI's
interest in the Tranche B Warrants (as defined below) for the Shares (as
defined below) on the terms and subject to the conditions specified in this
Agreement.
SECTION 1.2 DEFINITIONS. The following terms shall have the respective
meanings set forth below when used in this Agreement:
"ACTION" against a person means any written claim, or any action, suit,
investigation, complaint or other proceeding pending against or affecting the
person or its property, whether civil or criminal, in law or equity or before
any arbitrator or governmental body.
"ACTS" means, collectively, the Securities Act, the Exchange Act and the
securities laws (including any rules and regulations thereunder) of any state.
"AGREEMENT" shall have the meaning ascribed to it in the first paragraph
hereof, and shall include all schedules and exhibits hereto.
"ANSCHUTZ" means The Anschutz Corporation, a Kansas corporation.
"ANSCHUTZ REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement dated as of May 17, 1995 between Anschutz and the Company.
"ANSCHUTZ SHAREHOLDERS AGREEMENT" means the Shareholders Agreement dated
as of July 27, 1995 between Anschutz and the Company.
"CLOSING" has the meaning ascribed to it in Section 2.1 hereof.
"CLOSING DATE" has the meaning ascribed to it in Section 2.1 hereof.
"COMMON STOCK" means the common stock, par value $0.10 per share, of the
Company, together with the associated Rights.
"COMPANY" has the meaning ascribed to it in the first paragraph hereof.
"CREDIT AGREEMENT" means the Amended and Restated Credit Agreement dated
as of August 31, 1995 between The Chase Manhattan Bank (National Association),
as Agent, the banks party thereto and the Company.
"EMPLOYEE OPTIONS" has the meaning ascribed to it in Section 4.2(b).
"EQUITY SECURITIES" of the Company means the capital stock of the Company
and all other securities convertible into or exchangeable or exercisable for
any shares of its capital stock, all rights to subscribe for or to purchase,
all options for the purchase of, and all calls, commitments or claims of any
character relating to, any shares of its capital stock and any securities
convertible into or exchangeable or exercisable for any of the foregoing.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the related rules, regulations and published interpretations thereunder.
"EXISTING WARRANTS" has the meaning ascribed to it in Section 4.2(b).
"FIRST RESTRUCTURE AGREEMENT" has the meaning ascribed to it in the first
paragraph hereof.
"GOVERNMENTAL BODY" means any agency, bureau, commission, court,
department, official, political subdivision, tribunal or other instrumentality
of any government, whether federal, state, county or local, domestic or foreign.
"XXXX-XXXXX-XXXXXX ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the related rules, regulations and
published interpretations thereunder.
"INDEMNIFIED PERSON" has the meaning ascribed to it in Section 6.1 hereof.
"INDENTURE" means the indenture dated as of September 8, 1993 between the
Company and Shawmut Bank Connecticut, N.A., under which the Subordinated Notes
were issued.
"JEDI" has the meaning ascribed to it in the first paragraph hereof.
"JEDI/ANSCHUTZ OPTION" means the JEDI/Anschutz Option dated July 27, 1995
to purchase the shares of Common Stock issuable upon exercise of the Tranche B
Warrants, executed by JEDI in favor of Anschutz.
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"JEDI REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement dated as of July 27, 1995 between JEDI and the Company.
"JEDI SHAREHOLDERS AGREEMENT" means the Shareholders Agreement between
JEDI and the Company, substantially in the form attached as Exhibit A hereto.
"JUNIOR PREFERRED STOCK" has the meaning ascribed to it in Section 4.2(a).
"LOAN AGREEMENT" has the meaning ascribed to it in Section 1.1 hereof.
"LOSS" means any cost, damage, disbursement, expense, liability,
judgment, loss, deficiency, obligation, penalty or settlement of any kind or
nature, whether foreseeable or unforeseeable, including, but not limited to,
interest or other carrying costs, penalties, legal, accounting and other
professional, expert witness and consultant fees and expenses incurred in the
investigation, collection, prosecution and defense of claims and amounts paid
in settlement, that may be imposed on or otherwise incurred or suffered by the
specified person.
"NASDAQ/NMS" means the NASDAQ National Market System.
"NOTICE" has the meaning ascribed to it in Section 8.2 hereof for the
purposes of that section.
"REGULATION" means (i) any applicable law, rule, regulation, judgment,
decree, ruling, order, award, injunction, recommendation or other official
action of any Governmental Body and (ii) any official change in the
interpretation or administration of any of the foregoing by the Governmental
Body or by any other Governmental Body or other person responsible for the
interpretation or administration of any of the foregoing.
"RIGHTS" means the rights distributed to holders of shares of Common
Stock pursuant to the Rights Agreement.
"RIGHTS AGREEMENT" means the Rights Agreement dated October 14, 1993, as
amended by Amendment No. 1 dated July 27, 1995, between the Company and Mellon
Securities Trust Company, as Rights Agent.
"RIGHTS PREFERRED STOCK" has the meaning ascribed to it in Section 4.2(a).
"SEC" means the United States Securities and Exchange Commission.
"SECOND SERIES CONVERTIBLE PREFERRED STOCK" has the meaning ascribed to
it in Section 4.2(a).
"SECURITIES ACT" means the Securities Act of 1993, as amended, and the
related rules, regulations and published interpretations thereunder.
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"SENIOR PREFERRED STOCK" has the meaning ascribed to it in Section 4.2(a).
"$.75 CONVERTIBLE PREFERRED STOCK" has the meaning ascribed to it in
Section 4.2(a).
"SHARES" has the meaning ascribed to it in Section 2.1(c).
"SUBSIDIARY" of a person means (i) any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such person or (ii) a
partnership in which the person or a Subsidiary of the person is, at the date
of determination, a general or limited partner of such partnership, but only if
the person or its Subsidiary is entitled to receive more than fifty percent of
the assets of such partnership upon its dissolution.
"SUBORDINATED NOTES" means the outstanding 11-1/4% Senior Subordinated
Notes due 2003 of the Company issued under the Indenture.
"THIRD AMENDMENT" means the Third Amendment to the Loan Agreement, which
amendment shall be in substantially the form attached hereto as Exhibit B.
"TRANCHE B WARRANTS" means the Warrants to purchase 11,250,000 shares of
Common Stock (as the number of shares may be adjusted pursuant to the terms of
the Tranche B Warrants).
"TRANSACTION" means the transaction contemplated by Section 2.1 of this
Agreement.
"TRANSACTION DOCUMENTS" means this Agreement, the Third Amendment,
Amendment No. 1 to the JEDI Registration Rights Agreement, the JEDI
Shareholders Agreement and all other documents and instruments executed
pursuant thereto.
ARTICLE II
SECOND RESTRUCTURE TRANSACTION
SECTION 2.1 TRANSACTION. The Company and JEDI agree that, subject to
satisfaction or waiver of the conditions set forth below, the following events
(collectively, the "Transaction") shall occur on the Closing Date:
(a) The Company and JEDI will execute and deliver to each other
the Third Amendment and all other documents or instruments contemplated
therein as being executed on the Closing Date (including exhibits to the
Third Amendment), each of such documents and instruments to be acceptable
to the Company and JEDI in form and substance.
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(b) JEDI will assign the Tranche B Warrants and its rights and
obligations under the JEDI/Anschutz Option to the Company pursuant to an
assignment acceptable to the Company in form and substance.
(c) The Company will issue and deliver to JEDI a certificate(s)
with respect to 8,400,000 shares of Common Stock (subject to adjustment
in accordance with Section 5.6) (the "Shares") in such denominations as
JEDI may request, which certificate(s) and any certificate(s) issued in
exchange therefor or upon transfer, except certificates issued in
connection with a sale registered under the Securities Act, shall bear
the legends set forth on Exhibit C hereto.
(d) The Company and JEDI will execute and deliver to each other
Amendment No. 1 to the JEDI Registration Rights Agreement, which
amendment shall be substantially in the form attached hereto as Exhibit D.
(e) The Company and JEDI will execute and deliver to each other
the JEDI Shareholders Agreement.
SECTION 2.2 XXXX-XXXXX-XXXXXX ACT FILING. As soon as practicable
following the execution hereof, the Company and JEDI shall make all necessary
filings and, subject to Section 5.5, pay any applicable fees which the
Xxxx-Xxxxx-Xxxxxx Act may require with respect to the Transaction.
SECTION 2.3 CLOSING. Subject to the satisfaction of the conditions
precedent set forth in Sections 2.5, 2.6 and 2.7 below, the closing of the
Transaction (the "Closing") shall be held at the offices of Enron Capital &
Trade Resources Corp., 0000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx, at 10
a.m., Denver, Colorado time, on the business day following the date on which
the Closing shall be permitted to occur without violation of the
Xxxx-Xxxxx-Xxxxxx Act, or at such other place, date and time as may be mutually
agreed in writing by the Company and JEDI; PROVIDED, HOWEVER, that if all of
the conditions to Closing set forth in Sections 2.5, 2.6 and 2.7 below have not
been satisfied or waived by such date or any mutually agreeable later date for
Closing, the party whose condition has not been satisfied or waived shall have
the right to extend the date of Closing for successive periods of up to five
days each, or for such longer period to which the parties may agree in writing,
but in no event beyond any date on which this Agreement is terminated pursuant
to Section 7.1. The Closing also may occur at such other place, date and time
as the Company and JEDI may agree. The date on which the Closing occurs shall
be referred to herein as the "Closing Date."
SECTION 2.4 SIMULTANEOUS CLOSING. All events specified in Section 2.1
shall be deemed to occur simultaneously and no event shall be deemed to occur
unless and until all such events shall have occurred.
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SECTION 2.5 JEDI CONDITIONS TO CLOSING. The obligation of JEDI to
consummate the transactions contemplated hereunder is subject, at the option of
JEDI, to satisfaction or waiver of the following conditions (each of which is
deemed to be material) at or before the Closing:
(a) Each of the actions specified in Section 2.1 above shall
have been taken.
(b) The Company shall have taken all action required, if any, to
cause the Shares to be qualified for inclusion in the NASDAQ/NMS, and
shall give such notice as may be required to the National Association of
Securities Dealers, Inc. with respect to the Transaction.
(c) Anschutz shall have consented to the actions contemplated by
Section 2.1(b) and delivered all documents necessary to effect such
consent(s) and to release JEDI from all obligations under the Tranche B
Warrants and the JEDI/Anschutz Option, which documents shall be
acceptable to JEDI in form and substance.
(d) The Company and Anschutz shall have acknowledged in writing
to JEDI that the JEDI Registration Rights Agreement, as amended by
Amendment No. 1 thereto, continues to constitute the "Other Registration
Rights Agreement" for purposes of the Anschutz Registration Rights
Agreement.
(e) The Company and Anschutz shall have entered into an amendment
to the Anschutz Shareholders Agreement to amend lines 5 and 6 of Section
3.1(a) thereof to delete the phrase "(other than Equity Securities of the
Company owned by Purchaser, any of its Affiliates or any such Group)" and
substitute in its place the phrase "(other than Equity Securities of the
Company owned by JEDI, Purchaser, any of their respective Affiliates or
any Group of which any such entity is a member)".
(f) After giving effect to the waiver contemplated by Section
5.7, no Default (as defined in the Loan Agreement) shall have occurred
and be continuing nor shall any Default (as defined in the Loan
Agreement) occur by virtue of the execution and delivery of the Third
Amendment.
(g) The Company shall have paid to or on behalf of JEDI all
amounts payable pursuant to Section 5.5 below.
(h) Except as disclosed in the SEC Documents filed with the
Commission prior to the date hereof, since September 30, 1995, there
shall have occurred no event which could have a Material Adverse Effect
(as defined in the Loan Agreement) on the Company and its Subsidiaries
taken as a whole.
(i) JEDI shall have received the following legal opinions dated
as of the Closing Date:
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(1) a legal opinion from the law firm of Holme Xxxxxxx &
Xxxx L.L.C. that is in substantially the same form as the opinion
dated July 27, 1995, that was issued by such firm to JEDI in
connection with the closing of the transactions contemplated by
the First Restructure Agreement, with such changes as may be
necessary to cause such opinion to cover the Third Amendment;
(2) a legal opinion from the law firm of Xxxxxx & Xxxxxx
L.L.P. that is in substantially the same form as the opinion dated
July 27, 1995, that was issued by such firm to JEDI in connection
with the closing of the transactions contemplated by the First
Restructure Agreement, except that (A) for purposes of such
opinion, the term "Amendment Documents" shall include this
Agreement, the Third Amendment, Amendment No. 1 to the JEDI
Registration Rights Agreement, the JEDI Shareholders Agreement and
the Shares, and (B) such opinion shall cover the matters set forth
in such prior opinion as opinion numbers 1, 2, 3, 4, 5, 7, 8, 10
(with the term "Tranche B Warrants" to be replaced with the term
"Shares" and other appropriate adjustments made to reflect such
change), 12 and 13 as they relate to the Transaction and (C) such
opinion shall contain exceptions, qualifications and assumptions
similar to those contained in such prior opinion, as appropriate;
and
(3) a legal opinion from Xxxxxx X. XxXxxxxx, corporate
counsel for the Company, that is in substantially the same form as
the opinion of such counsel dated July 27, 1995, that JEDI was
expressly authorized to rely upon in connection with the closing of
the transactions contemplated by the First Restructure Agreement,
with such changes as may be necessary to cause such opinion to be
addressed to JEDI and cover the Transaction.
(j) Except as contemplated by this Agreement, (i) the
representations and warranties of the Company contained herein shall be
true and correct in all material respects as of the Closing Date, with
the same force and effect as though made at such time, and (ii) the
Company shall have performed in all material respects all obligations
required of it by the terms of this Agreement to have been performed as
of the Closing Date.
(k) JEDI shall have received a certificate in form and substance
satisfactory to JEDI from each of (a) the Secretary or Assistant
Secretary of the Company to the effect that, (i) the Board of Directors
of the Company has taken all actions necessary with respect to the
Transaction and the issuance of the Shares and (ii) except as set forth
thereon or attached thereto there have been no amendments to the
Company's Articles of Incorporation, as amended, or Bylaws, as amended,
since July 27, 1995, and none are contemplated; and (b) the President or
any Vice President of the Company to the effect that, (i) the
representations and warranties of the Company contained herein are true
and correct in all material respects as of the Closing Date, with the
same force and effect as though made at such time, and (ii) the Company
has performed in all material respects all obligations required of it by
the terms of this Agreement to have been performed as of the Closing
Date.
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SECTION 2.6 COMPANY CONDITIONS TO CLOSING. The obligation of the
Company to consummate the Transaction is subject, at the option of the
Company, to satisfaction or waiver of the following conditions (each of which
is deemed to be material) at or before Closing:
(a) Each of the actions specified in Section 2.1 above shall
have been taken.
(b) Except as contemplated by this Agreement, (i) the
representations and warranties of JEDI contained herein shall be true
and correct in all material respects as of the Closing Date, with the
same force and effect as though made at such time, and (ii) JEDI shall
have performed in all material respects all obligations required of it
by the terms of this Agreement to have been performed as of the Closing
Date.
(c) The Company shall have received from the general partner of
JEDI a certificate in form and substance satisfactory to the Company to
the effect that (i) all actions necessary to be taken by JEDI with
respect to the Transaction have been authorized by its general partner
and limited partner, (ii) the representations and warranties of JEDI
contained herein are true and correct in all material respects as of the
Closing Date, with the same force and effect as though made at such
time, and (iii) JEDI has performed in all material respects all
obligations required of it by the terms of this Agreement to have been
performed as of the Closing Date.
(d) Anschutz shall have consented to the actions contemplated by
Section 2.1(b) and delivered all documents necessary to effect such
consent(s), which documents shall be acceptable to the Company in form
and substance.
(e) Anschutz shall have acknowledged in writing to JEDI that the
JEDI Registration Rights Agreement, as amended by Amendment No. 1
thereto, continues to constitute the "the Other Registration Rights
Agreement" for purposes of the Anschutz Registration Rights Agreement.
(f) Anschutz shall have entered into an amendment to the
Anschutz Shareholders Agreement to amend lines 5 and 6 of Section 3.1(a)
thereof to delete the phrase "(other than Equity Securities of the
Company owned by Purchaser, and of its Affiliates or any such Group)"
and substitute in its place the phrase "(other than Equity Securities of
the Company owned by JEDI, Purchaser, any of their respective Affiliates
or any Group of which any such entity is a member)".
(g) Except for events affecting the oil and gas industry
generally, including, but not limited to, the market prices of the
Company's products, no event shall have occurred since the date hereof
that has had a material adverse effect on the value of the Mortgaged
Properties taken as a whole (as defined in the Loan Agreement).
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SECTION 2.7. ADDITIONAL CONDITIONS TO CLOSING. In addition to those set
forth above, the obligations of JEDI and the Company to consummate the
Transaction shall be subject to satisfaction of the following conditions,
which may be waived only by the consent of both parties:
(a) The consummation of the Transaction shall not violate the
Xxxx-Xxxxx-Xxxxxx Act.
(b) There shall not be in effect any Regulation that makes it
illegal for JEDI or the Company to perform at Closing each of their
respective obligations under this Agreement or any Transaction Document
or that enjoins JEDI or the Company from performing such obligations.
(c) As of the Closing Date, no Action shall be pending or
threatened (i) wherein an unfavorable judgment, decree or order could
prevent, make unlawful or materially affect the consummation of the
transactions contemplated by this Agreement or (ii) which if adversely
determined would have a Material Adverse Effect (as defined in the Loan
Agreement) on the Company and its Subsidiaries taken as a whole.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF JEDI
JEDI hereby represents and warrants to the Company as follows:
SECTION 3.1 ORGANIZATION; AUTHORITY. JEDI is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite power and authority under its Partnership
Agreement and under the laws of the State of Delaware to execute, deliver and
perform its obligations under this Agreement and each of the Transaction
Documents to which it is a party and to execute, deliver and perform its
obligations under all other agreements and instruments executed and delivered
by JEDI pursuant to or in connection with this Agreement or any of the
Transaction Documents.
SECTION 3.2 EXECUTION AND DELIVERY; ENFORCEABILITY. JEDI has taken all
partnership action necessary to authorize the due execution and delivery of
this Agreement and the Transaction Documents and the performance of its
obligations hereunder and thereunder. This Agreement has been, and upon
execution and delivery, each other Transaction Document to which JEDI is a
party shall be, duly executed and delivered by JEDI, and shall constitute the
legal, valid and binding obligation of JEDI, enforceable against JEDI in
accordance with its terms, except to the extent that enforceability may be
subject to applicable bankruptcy, insolvency, fraudulent conveyance, moratorium
and other similar laws affecting generally the enforcement of creditors' rights
and by general principles of equity.
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SECTION 3.3 APPROVALS AND CONSENTS. Except as may be required by the
Acts or the Xxxx-Xxxxx-Xxxxxx Act, no consent or approval is required in
connection with JEDI's execution and delivery of this Agreement or any of the
Transaction Documents and the performance of its obligations hereunder or
thereunder.
SECTION 3.4 NO VIOLATIONS. The execution and delivery by JEDI of this
Agreement and each of the Transaction Documents to which it is a party and the
performance of its obligations hereunder and thereunder will not cause a breach
or violation of, or a default or event of default under, any provision of (i)
the Partnership Agreement of Joint Energy Development Investments Limited
Partnership dated June 29, 1993, as amended, or its Certificate of Limited
Partnership, or any agreement, contract or arrangement, whether written or
oral, to which JEDI is a party or by which JEDI is bound; (ii) any law, rule or
regulation of any Governmental Body applicable to JEDI; or (iii) any decree,
order, injunction or other decision of any court, arbitrator, or Governmental
Body with jurisdiction over JEDI, the violation of which would have an adverse
effect on its ability to perform its obligations hereunder.
SECTION 3.5 PURCHASE FOR INVESTMENT. JEDI acknowledges that (i) the
Shares will be issued and sold pursuant hereto in reliance upon the exemption
afforded by Section 4(2) of the Securities Act; (ii) it is acquiring the Shares
for investment and without any view toward distribution of any of the Shares to
any other person in violation of the Securities Act; (iii) it will not sell or
otherwise dispose of the Shares except in compliance with the registration
requirements under the Securities Act and applicable state securities laws or
available exemptions therefrom; and (iv) before any sale or any disposition of
the Shares which is not registered under the Securities Act or effected
pursuant to Rule 144 under the Securities Act (unless the Company shall have
been advised by counsel that such sale does not meet the requirements of Rule
144), it will deliver to the Company an opinion of counsel reasonably
satisfactory to the Company to the effect that such registration is unnecessary.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to JEDI as follows:
SECTION 4.1 ORGANIZATION AND EXISTENCE. The Company is duly
incorporated, validly existing and in good standing under the laws of the State
of New York. The Company has full corporate power and authority to own and
hold the properties and assets it now owns and holds and to carry on its
businesses as and where such properties are now owned or held and such business
is now conducted. The Company is duly licensed or qualified to do business as
a foreign corporation and is in good standing in each jurisdiction in which the
character of the properties and assets now owned or held by it or the nature of
the business now conducted by it requires it to be so licensed
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or qualified and where the failure so to qualify might reasonably be expected
to affect materially and adversely the business, financial condition or results
of operations of the Company.
SECTION 4.2 CAPITALIZATION. As of the date of this Agreement (unless
another date is specified),
(a) The authorized capital stock of the Company consists, as of
December 21, 1995, of 210,000,000 shares of stock, of which (i) 200,000,000
shares are Common Stock and (ii) 10,000,000 shares are preferred stock, par
value $.01 per share, consisting of (A) a class of 7,350,000 shares of
preferred stock (the "SENIOR PREFERRED STOCK"), of which up to (x) 5,444,425
shares may be issued in a series designated as "$.75 Convertible Preferred
Stock" (the "$.75 CONVERTIBLE PREFERRED STOCK") and (y) 620,000 shares are
authorized to be issued in a series designated as "Second Series Convertible
Preferred Stock" (the "SECOND SERIES CONVERTIBLE PREFERRED STOCK"), and (B) a
class of 2,650,000 shares of preferred stock (the "JUNIOR PREFERRED STOCK"), of
which up to 1,000,000 shares may be issued in a series designated "First Series
Junior Preferred Stock" (the "RIGHTS PREFERRED STOCK"). The Company has
submitted a proposal to its shareholders to effect a reverse stock split of its
outstanding Common Stock. The proposal would cause each share of Common Stock
to be converted into one-fifth of a share of Common Stock. The proposal is
scheduled for consideration at a special meeting of shareholders to be held on
January 5, 1996. The authorized number of shares of Common Stock, however,
will not change.
(b) With respect to the Common Stock, as of December 21, 1995,
there are, (i) 53,289,960 shares of Common Stock issued and outstanding; (ii)
3,059,000 shares of Common Stock reserved for issuance upon exercise of
outstanding stock options issued by the Company to current and former employees
of the Company and its subsidiaries (the "EMPLOYEE OPTIONS"); (iii) 10,080,606
shares of Common Stock reserved for issuance upon conversion of the $.75
Convertible Preferred Stock, (iv) 1,244,715 shares of Common Stock reserved for
issuance upon exercise of warrants at an exercise price of $3.00 per share
issued under the Warrant Agreement dated as of December 31, 1991, between the
Company and Mellon Securities Trust Company, as Warrant Agent, successor to The
Chase Manhattan Bank (National Association) (the "EXISTING WARRANTS"); (v)
11,250,000 shares of Common Stock reserved for issuance upon exercise of the
Tranche B Warrants at an exercise price of $2.00 per share; (vi) 19,444,444
shares of Common Stock reserved for issuance upon exercise of the Tranche A
Warrants at an exercise price of $2.10 per share; (vii) 6,200,000 shares of
Common Stock reserved for issuance upon conversion of the 620,000 shares of
Second Series Convertible Preferred Stock.
(c) With respect to preferred stock and warrants of the Company,
as of December 21, 1995, there are (i) 2,880,173 shares of $.75 Convertible
Preferred Stock issued and outstanding; (ii) 532,900 shares of Rights Preferred
Stock reserved for issuance upon the exercise of the Rights, none of which are
issued or outstanding; (iii) 620,000 shares of Second Series Convertible
Preferred Stock issued and outstanding; (iv) 1,244,715 Existing Warrants issued
and outstanding, each of which, upon exercise, entitles the holder thereof to
purchase one share of Common Stock at a price of $3.00 per share; (v)
19,444,444 Tranche A Warrants, each of which, upon exercise, entitles
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Anschutz to purchase one share of Common Stock at a price of $2.10 per share;
and (vi) 11,250,000 Tranche B Warrants, each of which, upon exercise, entitles
the holder thereof to purchase one share of Common Stock at a price of $2.00
per share.
(d) Except as set forth above and except as provided in the
Transaction Documents, no Equity Securities of the Company are issued, reserved
for issuance or outstanding.
(e) All outstanding shares of capital stock of the Company are,
and all shares which may be issued pursuant to the exercise of the Employee
Options or the Existing Warrants, the conversion of the $.75 Convertible
Preferred Stock or the Second Series Convertible Preferred Stock, the Tranche A
Warrants or the Tranche B Warrants, as the case may be, will be, when issued,
duly authorized, validly issued, fully paid and nonassessable and are not
subject to preemptive rights.
(f) Except with respect to the outstanding shares of Common
Stock, the Employee Options, the Existing Warrants, the $.75 Convertible
Preferred Stock, the Second Series Convertible Preferred Stock, the Rights, the
Tranche A Warrants, the Tranche B Warrants and the JEDI/Anschutz Option, there
are no outstanding bonds, debentures, notes or other indebtedness or other
securities of the Company having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
shareholders of the Company may vote.
(g) Except as provided in the Transaction Documents and with
respect to the Employee Options, the Existing Warrants, the $.75 Convertible
Preferred Stock, the Rights, the Second Series Convertible Preferred Stock, the
Tranche B Warrants and the Anschutz Shareholders Agreement, there is no
agreement or arrangement restricting the voting or transfer of the Equity
Securities of the Company;
(h) Except as provided in the Transaction Documents and with
respect to the Employee Options, the Existing Warrants, the $.75 Convertible
Preferred Stock, the Rights, the Second Series Convertible Preferred Stock, the
Tranche B Warrants, the Tranche A Warrants and the JEDI/Anschutz Option, there
are no outstanding securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which the Company is a
party or by which it is bound obligating the Company to issue, deliver or sell,
or cause to be issued, delivered or sold, additional shares of capital stock or
other Equity Securities of the Company or obligating the Company to issue,
grant, extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking.
(i) Except with respect to the Rights and the obligations of the
Company under this Agreement, there are no outstanding contractual obligations,
commitments, understandings or arrangements of the Company to repurchase,
redeem or otherwise acquire, require or make any payment in respect of any
shares of Equity Securities of the Company.
(j) Except with respect to statutory restrictions of general
application and the provisions of the $.75 Convertible Preferred Stock, the
Second Series Convertible Preferred Stock,
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the Indenture, the Subordinated Notes and the Credit Agreement, there are no
legal, contractual or other restrictions on the payment of dividends or other
distributions or amounts on or in respect of any of the Equity Securities of
the Company.
(k) Except as contemplated by the JEDI and Anschutz Registration
Rights Agreements, there are no agreements or arrangements to which the Company
or any of its Subsidiaries is a party pursuant to which the Company is or could
be required to register shares of Common Stock or other securities under the
Securities Act.
(l) Equity Securities of the Company that were issued and
reacquired by the Company were so reacquired (and, if reissued, so reissued) in
compliance with all applicable Regulations, and the Company has no liability
with respect to the reacquisition or reissuance of the Equity Securities.
SECTION 4.3 ISSUANCE OF SHARES. The Shares to be issued hereunder will
be issued free and clear of all liens, charges, pledges and other encumbrances
and free from any prior or preferential rights or other rights to acquire the
Shares. As of the Closing, the Shares will constitute validly issued, fully
paid and non-assessable shares of Common Stock. No shareholder of the Company
or any other person has any preemptive rights with respect to the issuance of
the Shares.
SECTION 4.4 AUTHORITY AND APPROVAL. The Company has the corporate power
and authority to execute and deliver this Agreement and each of the Transaction
Documents to which it is a party, to consummate the transactions contemplated
hereby and thereby and to perform all the terms and conditions hereof and
thereof. The execution and delivery by the Company of this Agreement and each
of the Transaction Documents to which it is a party, the performance by the
Company of all the terms and conditions hereof and thereof and the consummation
of the transactions contemplated hereby and thereby have been duly authorized
and approved by the Board of Directors of the Company and no approval of the
shareholders of the Company is required in connection with the consummation of
the transactions contemplated hereby or thereby. This Agreement constitutes
and each Transaction Document shall, upon its execution, constitute the valid
and binding obligation of the Company enforceable in accordance with its
respective terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
enforcement of creditors' rights generally and by general principles of equity
(whether applied in a proceeding at law or in equity).
SECTION 4.5 NO CONFLICT. Except for the filings under the
Xxxx-Xxxxx-Xxxxxx Act contemplated in Section 2.2, this Agreement and each of
the Transaction Documents to which it is a party and the execution and delivery
hereof and thereof by the Company do not, and the fulfillment and compliance
with the terms and conditions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby will not, (i) conflict with any
of, or require the consent of any person or entity under, the terms, conditions
or provisions of the charter documents or bylaws or equivalent governing
instruments of the Company or any of its Subsidiaries; (ii) violate any
provision of, or require any consent, authorization or approval under, any law
or administrative
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regulation or any judicial, administrative or arbitration order, award,
judgment, writ, injunction or decree applicable to the Company or any of its
Subsidiaries; (iii) conflict with, result in a breach of, constitute a default
under (whether with notice or the lapse of time or both), or accelerate or
permit the acceleration of the performance required by, or, except for the
consent of Anschutz and such consents as may be required under the Credit
Agreement, require any consent, authorization or approval under, any indenture,
mortgage or lien, or any agreement, contract, commitment or instrument to which
the Company or any of its Subsidiaries is a party or by which it is bound or to
which any property of the Company or any of its Subsidiaries is subject; or
(iv) result in the creation of any lien, charge or encumbrance on the assets of
the Company or any of its Subsidiaries under any such indenture, mortgage,
lien, lease, agreement or instrument.
SECTION 4.6 SEC DOCUMENTS. The Company has filed with the SEC all
reports, schedules, forms, statements and other documents required to be filed
by the Company with the SEC since December 31, 1994 and has delivered or made
available to JEDI all reports, schedules, forms, statements and other documents
filed by the Company with the SEC since such date (collectively, and in each
case including all exhibits and schedules thereto and documents incorporated by
reference therein, the "SEC DOCUMENTS"). As of their respective dates, except
to the extent revised or superseded by a subsequent filing with the SEC prior
to the date hereof, the SEC Documents, and any other reports, schedules, forms,
statements and other documents filed by the Company with the SEC after the date
hereof, complied or will comply in all material respects with the requirements
of the Securities Act or the Exchange Act, as the case may be, and none of the
SEC Documents (including any and all financial statements included therein) as
of such dates contained or will contain any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The consolidated financial statements of
the Company included in all SEC Documents, and any other reports, schedules,
forms, statements and other documents filed by the Company with the SEC after
the date hereof, including any amendments thereto, comply or will comply as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the Securities and Exchange Commission with
respect thereto.
ARTICLE V
ADDITIONAL COVENANTS OF THE PARTIES
SECTION 5.1 NOTIFICATION. Until the Closing, the Company or JEDI, as
the case may be, shall give prompt notice to the other party of (i) the
occurrence, or failure to occur, of any event that would be likely to cause any
of the notifying party's representation or warranty which is contained herein
or in any Transaction Document to which it is a party to be untrue or
inaccurate in any material respect at any time from the date of this Agreement
to the Closing Date and (ii) any failure of the notifying party to perform or
otherwise comply with, in any material respect, any covenant, condition or
agreement to be performed or complied with by it under this Agreement or any
Transaction Document to which it is a party. This covenant of notification
shall not limit the right
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of the other party under Article II above to require as a condition precedent
to the performance of its obligations under this Agreement the accuracy in all
material respects of the representations and warranties on the Closing Date,
and performance in all material respects of the covenants of the notifying
party made in this Agreement or in any Transaction Document and to receive an
unqualified certificate with respect to the same.
SECTION 5.2 PUBLIC STATEMENTS. Until the Closing, the Company and JEDI
shall consult with each other and no party shall issue any press release or
written statement with respect to the Transaction without the consent of the
other party, unless the party desiring to make such press release or written
statement, after seeking such consent from the other party (which shall not be
unreasonably withheld), obtains advice from legal counsel that a press release
or written statement is required by applicable law.
SECTION 5.3 CONFIDENTIALITY. Information disclosed by any party or its
representatives to any other party or its representatives, whether before or
after the execution of this Agreement, shall be kept confidential by the other
party and its representatives if the information was or is designated in
writing as confidential and except in each case to the extent that (i) the
information was known by the recipient when received or the information is or
hereafter becomes lawfully obtainable from other sources, (ii) upon the advice
of counsel, the disclosing party determines that disclosure to a Governmental
Body having jurisdiction over such party is necessary or appropriate, (iii)
upon the advice of counsel disclosure is required by applicable laws or
regulations (in each of clause (ii) and (iii), after providing written notice
of the proposed disclosure and the stated reason requiring such disclosure) or
(iv) the duty as to confidentiality is waived in writing by the other party.
SECTION 5.4 FURTHER ASSURANCES. Until the Closing and indefinitely
thereafter, promptly upon request by any other party, each party shall correct
any defect or error in the execution or acknowledgment of any Transaction
Document and execute, acknowledge and deliver such other documents and
instruments as the requesting party may require from time to time in order (i)
to carry out more effectively the purposes of this Agreement and each
Transaction Document, (ii) to enable the requesting party to exercise and
enforce its rights and remedies and collect any payments and proceeds under
this Agreement and any Transaction Document and (iii) to better transfer,
preserve, protect and confirm to the requesting party the rights granted or now
or hereafter intended to be granted to the requesting party under this
Agreement and any Transaction Document or under each other instrument executed
in connection with this Agreement and any Transaction Document.
SECTION 5.5 EXPENSES. Regardless of whether this Agreement is
terminated in accordance with Article VII or whether the transactions
contemplated by this Agreement are consummated:
(a) At Closing or within five business days following the
termination of this Agreement, as applicable, the Company shall pay up
to $25,000 to JEDI to cover a portion of JEDI's legal and other
professional fees in accordance with the letter agreement dated as of
December 19, 1995, and delivered in connection herewith; and
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(b) Contemporaneously with the filing by JEDI of any filing
required by the Xxxx-Xxxxx-Xxxxxx Act, the Company shall pay the filing
fees required pursuant to the Xxxx-Xxxxx-Xxxxxx Act.
(c) Except as provided in clauses (a) and (b) of this Section
5.5 and notwithstanding anything to the contrary contained in any other
agreements between the Company and JEDI, each party shall bear its own
costs and expenses incurred in connection with the evaluation and
consummation of the Transaction and the negotiation, execution and
delivery of any documents in connection therewith.
SECTION 5.6 ADJUSTMENTS TO SHARES; ISSUANCES.
(a) Except as provided to the contrary in the following sentence,
the number of Shares to be received by JEDI hereunder shall be adjusted in the
event of any change in, or with respect to, the Common Stock by reason of the
issuance of any stock or other non-cash dividends, extraordinary cash
dividends, split-ups, mergers, recapitalizations, combinations, subdivisions,
conversions, exchanges of shares or the like on or before the Closing
(including, but not limited to, the proposed one-for-five reverse stock split)
such that, in each case JEDI shall receive at the Closing the number of shares
of Common Stock as if the Closing had occurred immediately prior to such event,
or the record date therefor, as applicable. Notwithstanding anything in this
Agreement or in any other Transaction Document to the contrary, no such
adjustments shall be required with respect to the issuance of shares of Common
Stock pursuant to the underwritten offering of up to 69 million shares
currently contemplated by the Company, the conversion of shares of $.75
Convertible Preferred Stock, the exercise of Employee Options or Existing
Warrants outstanding as of the date of this Agreement, the payment of regular
dividends on the $.75 Convertible Preferred Stock in stock or cash in
accordance with the terms thereof and the issuance of shares of Common Stock
pursuant to the Section 401(k) plan sponsored by the Company in accordance with
the terms thereof.
(b) No adjustment made pursuant to this Section 5.6 shall
constitute or be deemed a waiver by JEDI of any breach of any of the
representations, warranties or obligations of the Company contained in this
Agreement.
(c) Except with respect to issuances resulting from the actions
specifically set forth in the last sentence of paragraph (a) of this Section
5.6, prior to Closing and without the prior written consent of JEDI, the
Company will not issue, or enter into any agreement which would require it to
issue, any of its Equity Securities.
SECTION 5.7 SUSPENSION OF NON-COMPLIANCE. JEDI acknowledges that the
Company may not be in compliance with the requirements of the Loan Agreement
with respect to the status of the Company's title to that certain oil and gas
lease from El Peyote Mineral Trust dated as of May 24, 1994 (as amended, the
"Subject Lease"). JEDI agrees that until the earlier of the Closing Date and
the date on which this Agreement is terminated, JEDI will not enforce any
rights it may have against the Company or the Mortgaged Properties (as defined
in the Loan Agreement) with respect to any
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event of non-compliance under the Loan Agreement that relates solely to the
status of the Company's title to the Subject Lease. If Closing does not
occur, then the suspension provided for herein shall terminate and JEDI shall
have all of its rights set forth in the Loan Agreement. Except as expressly
provided herein, JEDI does not waive any of its rights with respect to such
noncompliance. If Closing occurs, JEDI hereby waives any rights it may have
against the Company (including, without limitation, the right to assert that
an Event of Default (as such term is defined in the Loan Agreement) has
occurred and the right to exercise any remedies under the Loan Agreement as a
result thereof) and releases the Company from any liability with respect to
any non-compliance under the Loan Agreement resulting solely from the status
of the Company's title to the Subject Lease; in exchange therefor, if Closing
occurs, the Company hereby agrees that on or before July 1, 1996, the Company
shall either (a) (i) obtain, on terms no less favorable to the Company in any
material respect than those contained in the Subject Lease, oil and gas
leasehold interests ("Replacement Leases") covering the acreage and depths
which were previously covered by the Subject Lease and pledged to JEDI
pursuant to the Security Instruments (as defined in the Loan Agreement) but
that, as of the Closing Date, are no longer subject to (A) the Subject Lease
or (B) leasehold interests constituting Mortgaged Properties and (ii) execute
and deliver to JEDI such Security Instruments as may be necessary or that are
reasonably requested by JEDI to grant JEDI a first priority perfected lien in
the Replacement Leases, subject only to the Permitted Encumbrances described
in Exhibit A to that certain Deed of Trust, Assignment of Production, Security
Agreement and Financing Statement dated as of December 28, 1993, between the
Company and JEDI, as amended, or (b) prepay the principal amount of the Loan
(as defined in the Loan Agreement) outstanding under the Loan Agreement in an
amount to be mutually agreed upon by both parties. In connection with any
prepayment made pursuant to this Section 5.7, the Company shall also pay the
accrued but unpaid interest on the outstanding principal amount of the Loan
being prepaid to the date of prepayment.
ARTICLE VI
INDEMNIFICATION
SECTION 6.1 INDEMNIFICATION. The Company shall indemnify and defend (i)
JEDI, (ii) each partner of JEDI, (iii) each "controlling person" (within the
meaning of Section 20 of the Exchange Act) of JEDI and each of its partners
and (iv) the shareholders, directors, officers, employees, agents and
affiliates of each of the foregoing (each referred to herein as an
"indemnified person"), and shall hold each indemnified person harmless from,
any and all Losses in any way relating to or arising out of any of the
following:
(a) any breach of the representations, warranties, covenants or
agreements of the Company contained in this Agreement or any Transaction
Document; and
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(b) any Action brought against such indemnified person to the
extent the Action arises out of or is attributable to the Transaction,
excluding however any Action that is asserted by (i) one or more
indemnified persons, (ii) any person having a contractual or other
relationship with one or more of such indemnified persons, which
contractual or other relationship serves as the basis upon which such
person has standing to bring such Action or (iii) any Governmental Body
in the exercise of its regulatory authority over the business and
affairs of such indemnified person.
The Company shall have no obligation under this Section to JEDI or any
other person indemnified under this Section 6.1 with respect to any of the
foregoing arising primarily out of the gross negligence or willful misconduct
of JEDI or the other indemnified person, as the case may be, as determined by
a final judgment of a court of competent jurisdiction. Notwithstanding
anything herein or in any Transaction Document to the contrary, the terms and
provisions of such documents, including the indemnification provisions set
forth in this Article VI, shall not limit or otherwise affect in any way the
terms of Section 6.03 of the Loan Agreement.
SECTION 6.2 INDEMNIFICATION PROCEDURES. If any Action indemnifiable
under this Article VI shall be brought, asserted or threatened against any
person indemnified under this Article VI, the indemnified person shall
promptly notify the indemnifying person. A failure to notify the indemnifying
person timely or at all shall reduce the liabilities and obligations of the
indemnifying person under this Article VI only to the extent the indemnifying
person actually shall be prejudiced by the failure. The indemnifying person
shall assume the defense of the Action, including the employment of counsel
satisfactory to the indemnified person and the payment of all related fees and
expenses, but the indemnified person may employ separate counsel in the Action
and participate in the defense of the Action at its own expense. The
indemnified person, however, may by written notice to the indemnifying person
assume the defense of the Action, including the employment of counsel, at the
expense of the indemnifying person (except that the indemnifying person shall
not be liable for the fees and expense of more than one such separate counsel
with respect to the Action) if:
(a) the indemnifying person fails to take one or more of the
following acts without a delay that reasonably could be expected to be
prejudicial to the interests of the indemnified person: (i) acknowledge in
writing to the indemnified person the liability of the indemnifying person to
the indemnified person under this Article VI with respect to the Action, (ii)
assume the defense, (iii) post an indemnity or similar bond (in form and
substance satisfactory to the indemnified person) in an amount equal to the
full amount for which the indemnified person may be liable as a result of the
Action (including penalties and interest) or provide other evidence
satisfactory to the indemnified person of the ability of the indemnifying
person to pay that amount in full or (D) employ counsel reasonably
satisfactory to the indemnified person; or
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(b) the persons against whom the Action shall have been brought,
asserted or threatened (including any impleaded parties) include both the
indemnified person and the indemnifying person and the indemnified person is
advised by counsel that there may be one or more legal defenses available to
the indemnified person that are different from or in addition to those
available to the indemnifying person; or
(c) the indemnified person reasonably believes that the Action
or an unfavorable resolution of the Action may materially and adversely affect
the business, properties, operations, prospects or condition (financial or
otherwise) of the indemnified person and its affiliates other than as a result
of the payment of money damages.
If the indemnified person has assumed the defense of the Action pursuant
to any of the conditions stated above, then the indemnifying person shall not
have the right to assume the defense of the Action on behalf of the
indemnified person and the indemnified person shall have the right to control
the defense, compromise or settlement of any Action indemnifiable under this
Article on behalf of and for the account and risk of the indemnifying person.
The indemnifying person shall be bound by the result of the defense of any
Action, whether the defense shall have been assumed by the indemnifying
person or by the indemnified person, and shall indemnify the indemnified
person against, and hold the indemnified person harmless from, any Loss in
any way relating to or allegedly arising in connection with the matter or
matters which shall be the basis of the Action or otherwise connected to the
Action, except that the indemnifying person shall not be liable for the
payment of the amount of money damages provided in a settlement of any Action
indemnifiable under this Article defended by the indemnified person pursuant
to the second or third conditions stated above that shall have been effected
without the written consent of the indemnifying person, which consent shall
not be unreasonably withheld.
SECTION 6.3 APPEAL. Notwithstanding anything in this Article VI to the
contrary, if, in connection with an Action indemnifiable under this Article, a
Governmental Body or authority of competent jurisdiction or other person
having authority or jurisdiction over a matter or matters related to the
Action shall have rendered, entered or granted a binding judgment, decision,
ruling, order or award with respect to the matter or matters providing for the
payment of money damages or the claimant and the indemnifying party shall have
agreed to settle the Action for an amount of money damages without reservation
of any rights or defenses against the indemnified person, and if the
indemnified person elects to appeal the judgment, decision, ruling, order or
award or declines to agree to the proposed settlement, as the case may be,
then the indemnified person may continue to defend the Action, free of any
participation by the indemnifying person, but the amount of any ultimate
liability under this Article VI with respect to Losses related to or allegedly
arising in connection with the matter or matters that shall have been
comprehended by the judgment, decision,
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ruling, order or award or by the proposed settlement, as the case may be,
shall then be limited to the amount of the judgment, decision, ruling, order
or award or the amount of the proposed settlement, as the case may be, plus
the other indemnified Losses of the indemnified person relating to the matter
or matters through the date of its election to appeal or its rejection of the
proposed settlement, as the case may be.
SECTION 6.4 CONTRIBUTION. If the indemnification provided for in this
Article VI is unavailable to an indemnified person (other than by reason of
exceptions provided in this Article VI), or is insufficient to hold harmless
an indemnified person in respect of any Loss, then the indemnifying person, in
lieu of indemnifying the indemnified person, shall contribute to the amount
paid or payable by the indemnified person as a result of the Loss in the
proportion that is appropriate to reflect the relative fault of the
indemnifying person on the one part and of the indemnified person on the other
part in connection with the events or circumstances which resulted in the Loss
as well as any other relevant equitable considerations. The relative fault of
the indemnifying person on the one part and of the indemnified person on the
other part shall be determined by reference to, among other things, those
persons' relative intent, knowledge, access to information and opportunity to
correct or prevent the events or circumstances resulting in the Loss. The
amount of any Loss suffered, incurred or paid by any person shall be deemed to
include all expenses incurred or paid by the person in connection with
investigating or defending any action, including, but not limited to, the fees
and expenses of counsel.
SECTION 6.5 NO LIMITATION ON OTHER RIGHTS OF RECOVERY. The
indemnification set forth in this Article VI shall be in addition to any other
obligations or liabilities of any indemnifying person to an indemnified person
at common law or otherwise. The provisions of this Article VI shall not
eliminate or otherwise limit the right of any indemnified person or any other
person to seek to recover contribution, damages or otherwise enforce its
rights against the indemnifying person or any other person without regard to
the provisions of this Article VI. JEDI and the Company further agree that if
at any time all or any part of any indemnification payment hereunder is or
must be rescinded or returned to the person making such indemnity payment for
any reason whatsoever (including, without limitation, the insolvency,
bankruptcy or reorganization of any person) the indemnification obligations of
the person making such payment shall be reinstated with respect to such
payment so rescinded or returned as though such payment had never been made or
received.
ARTICLE VII
TERMINATION
SECTION 7.1 TERMINATION EVENTS. This Agreement may be terminated as
follows:
(a) Upon the mutual written consent of each of the parties
hereto; or
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(b) By either of the parties hereto upon written notice to the
other party if the Transaction shall not have been consummated by
February 29, 1996.
SECTION 7.2 LIMITATION ON TERMINATION. Except with respect to Section
6.1 above regarding indemnification and Section 5.5 regarding payment of
certain of JEDI's expenses, each of which shall survive in accordance with
their terms, upon termination of this Agreement, the parties hereto shall have
no further rights and obligations hereunder; PROVIDED, HOWEVER, termination of
this Agreement shall not release, or be construed as releasing, either party
hereto from any liability or damage to the other party hereto arising out of
the breaching party's willful and material breach of the warranties and
representations made by it, or willful and material failure in performance of
any its covenants, agreements, duties or obligations arising hereunder or
under any of the Transaction Documents.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 SURVIVAL. Except as otherwise specifically provided herein
or in any Transaction Document, and notwithstanding any investigation or
notice to the contrary or any waiver by any other party of a related condition
precedent to the performance by the other party of an obligation hereunder or
under a Transaction Document, (i) each representation, warranty or covenant of
each party made pursuant to this Agreement or any Transaction Document shall
survive the Closing and remain in full force and effect until the last day of
the eighteenth calendar month following the calendar month in which the
Closing occurs and (ii) each party may assert or commence an Action against
the other party with respect to the breach of any such representation,
warranty or covenant on or before such date (but not thereafter) and may
maintain any such action thereafter.
SECTION 8.2 NOTICES. Any notice, request, instruction, correspondence
or other document to be given under this Agreement by either party hereto
(each, a "Notice" for purposes of this Section 8.2) shall be in writing and
(i) delivered in person or by courier service requiring acknowledgment of
receipt of delivery; (ii) mailed by certified mail, postage prepaid and return
receipt requested; (iii) or sent by telecopier, if appropriate. All Notices
shall be sent to the address for each party set forth below, as the same may
be amended from time to time upon proper Notice given by either party hereto:
If to JEDI: Joint Energy Development Investments
Limited Partnership
c/o Enron Capital Corp.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxx/Xxxxxx XxXxx
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Room 2940
Telecopier: (000) 000-0000
with a copy to: Enron Capital & Trade Resources Corp.
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxxxx Xxxxxx
Telecopier: (000) 000-0000
Enron Capital & Trade Resources Corp.
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxxx Xxxxxxx
Telecopier: (000) 000-0000
If to the Company:Forest Oil Corporation
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Corporate Secretary
Telecopier: (000) 000-0000
Notice given by personal delivery, courier service or mail shall be effective
upon actual receipt. Notice given by telecopier shall be confirmed by
appropriate answer back and shall be effective upon actual receipt if received
during the recipient's normal business hours, or at the beginning of the
recipient's next business day after receipt if not received during the
recipient's normal business hours. All Notices by telecopier shall be
confirmed promptly after transmission in writing by personal delivery, courier
service or certified mail in the manners provided above. Any procedural
modification pertaining to the delivery of Notice may be made in the same
manner as any other amendment to this Agreement.
SECTION 8.3 GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the laws of the State of Colorado,
notwithstanding principles of conflicts of law.
SECTION 8.4 NO WAIVERS; RIGHTS CUMULATIVE. Unless expressly provided to
the contrary (i) no failure or delay by any party in exercising any right,
power or privilege hereunder or under any Transaction Document shall operate
as a waiver of any such right, power or privilege; and (ii) a single or
partial exercise of any right, power or privilege shall not preclude any other
or further exercise of the right, power or privilege or the exercise of any
other right, power or privilege. The rights and remedies provided in this
Agreement and the Transaction Documents shall be cumulative and not exclusive
of any rights or remedies provided by law.
SECTION 8.5 REMEDIES. With respect to disputes between the parties as
to the validity of a party's refusal to perform its obligations hereunder on
the grounds that a condition to its obligations
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hereunder has not been satisfied, and provided that the party asserting the
failure of such condition is acting in good faith, neither party shall be
liable to the other for any lost or prospective profits or any other special,
consequential, incidental or indirect losses or damages in connection
therewith. With respect to all other disputes arising between the parties,
each party shall be entitled to seek such remedies, damages and other relief
as may be available under applicable law.
SECTION 8.6 AMENDMENTS, ETC. No amendment, modification, termination,
or waiver of any provision of this Agreement or any Transaction Document (or
any schedule or exhibit hereto or thereto), and no consent by any party to a
departure from any provision of this Agreement or such Transaction Document,
shall be effective unless it shall be in writing and signed and delivered by
the other party(ies) to this Agreement or the Transaction Document as the case
may be, and then it shall be effective only in the specific instance and for
the specific purpose for which it is given.
SECTION 8.7 ENTIRE AGREEMENT. This Agreement, together with any
schedules and exhibits attached hereto, and any documents delivered pursuant
hereto, including the Transaction Documents and the letter agreement dated
December 19, 1995 referenced in Section 5.5, shall constitute the entire
agreement among the parties hereto pertaining to the Transaction and, except
for the First Restructure Agreement, supersedes all prior agreements,
understandings, negotiations and discussions of the parties, whether oral or
written.
SECTION 8.8 BINDING EFFECT AND ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective permitted successors and assigns. Neither this Agreement nor any
of the rights, benefits or obligations hereunder shall be assigned, conveyed,
transferred or otherwise disposed of, by operation of law or otherwise, by any
party hereto without the prior written consent of the other party; PROVIDED,
HOWEVER, that notwithstanding the foregoing, JEDI may assign, convey or
transfer any or all of its rights, privileges and obligations hereunder (i) to
any direct or indirect affiliate of JEDI organized under the laws of any of
the United States, (ii) any entity managed by Enron Corp. or one of its
affiliates or for which Enron Corp. or one of its affiliates acts as
administrative agent, or (iii) to any financial institution financing or
refinancing the transactions contemplated by this Agreement. Any assignment,
conveyance, transfer or other disposition made or attempted in violation of
this Section 8.8 shall be void and of no effect.
SECTION 8.9 SEVERABILITY. If a minor or immaterial provision of this
Agreement (I.E., one that does not affect the essential nature of, or
consideration for, the arrangement among the parties reflected hereby) is
declared by a court of competent jurisdiction to be invalid, illegal or
unenforceable, such declaration shall not affect the validity or
enforceability of the remaining provisions of this Agreement, which shall
continue in full force and effect. In such event, however, the parties shall
negotiate in good faith to replace such invalid, illegal or unenforceable
provision with a valid, legal and enforceable provision that places each party
in substantially the same position it would have been in had such original
provision been valid, legal and enforceable. If any one or more of the
provisions contained in Article VI of this Agreement shall, for any reason, be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement, and this Agreement shall be reformed and
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construed as if such invalid, illegal or unenforceable provisions had never
been contained in this Agreement and such provisions shall be reformed so
that they would be valid, legal and enforceable to the maximum extent
permitted by law.
SECTION 8.10 HEADINGS; SCHEDULES. The headings of the several Articles
and Sections of this Agreement are inserted for convenience of reference only
and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement. The exhibits and schedules referred to
herein and attached hereto are incorporated in this Agreement by this
reference.
SECTION 8.11 MULTIPLE COUNTERPARTS. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original for all
purposes, but all of which together shall constitute one and the same
instrument.
-24-
IN WITNESS WHEREOF, the parties execute this Agreement effective as of
the date first set forth above.
JOINT ENERGY DEVELOPMENT INVESTMENTS
LIMITED PARTNERSHIP
By: Enron Capital Management Limited
Partnership, its General Partner
By: Enron Capital Corp., its
General Partner
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxxx X. Xxxxxx
Vice President
FOREST OIL CORPORATION
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
EXHIBIT A
SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT (the "Agreement") dated as of ___________,
1996 is between FOREST OIL CORPORATION, a New York corporation (the "Company"),
and JOINT ENERGY DEVELOPMENT INVESTMENTS LIMITED PARTNERSHIP, a Delaware limited
partnership ("JEDI").
RECITALS
A. The parties have entered into the Second Restructure Agreement
(the "Second Restructure Agreement") dated as of December ___, 1995.
B. Pursuant to the Second Restructure Agreement, JEDI has acquired
[** insert number at Closing**] (the "JEDI Shares") of the Company's common
stock, par value $.10 per share, together with the associated Rights (as defined
in the Second Restructure Agreement) (the "Common Stock").
AGREEMENT
The parties agree as follows:
ARTICLE I
DEFINITIONS
The following terms have the following meanings:
"Action" against a person means an action, suit, investigation,
complaint or other proceeding, whether civil or criminal, in law or equity or
before any arbitrator or Governmental Body, pending against or affecting the
person or its property.
"Affiliate" of a person means any other person (i) that directly or
indirectly controls, is controlled by or is under common control with, the
person or any of its Subsidiaries, (ii) that directly or indirectly beneficially
owns or holds 5% or more of any class of voting stock of the person or any of
its Subsidiaries or (iii) 5% or more of the voting stock of which is directly or
indirectly beneficially owned or held by the person or any of its Subsidiaries.
The term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a person,
whether through the ownership of voting securities, by contract or otherwise;
PROVIDED that in relation to JEDI, "Affiliate" shall not include any Affiliate
of Enron Corp. that is not wholly owned, directly or indirectly, by Enron Corp.,
unless such Affiliate (a) beneficially owns any of the JEDI Shares or (b) is a
member of a Group in which any person that beneficially owns any of the JEDI
Shares is a member or (ii) the California Public Employees Retirement System.
"Anschutz" means The Anschutz Corporation, a Kansas corporation.
"Anschutz Shareholders Agreement" means the Shareholders Agreement
entered into between the Company and Anschutz dated May 17, 1995.
"beneficial ownership" has the meaning assigned to that term under
Section 13(d) of the Exchange Act, unless otherwise specified herein.
"Board of Directors" means the board of directors of the Company, from
time to time.
"Business Combination Transaction" means a merger, consolidation or
similar transaction and each transaction that constitutes a "Change of Control"
within the meaning of the Indenture dated as of September 8, 1993 between the
Company and Shawmut Bank Connecticut, N.A. (giving effect to other terms and
provisions of such indenture that are directly or indirectly incorporated or
referenced by the definition therein of "Change of Control").
"Common Stock" has the meaning ascribed to it in Paragraph B of the
Recitals hereof.
"Equity Securities" of a person means the capital stock of such person
and all other securities convertible into or exchangeable or exercisable for any
shares of its capital stock, all rights to subscribe for or to purchase, all
options for the purchase of, and all calls, commitments, or claims of any
character relating to any shares of its capital stock and any securities
convertible into or exchangeable or exercisable for any of the foregoing.
A-2
"Excess JEDI Shares" means, at any time of determination and with
respect to the matter subject to the vote or consent for which the Excess JEDI
Shares are then being determined, (i) the Equity Securities of the Company owned
by any of JEDI and its Affiliates and the Groups in which any of them may be
members that may then be voted or with respect to which consent may then be
given, in each case with respect to such matter less (ii) the Non-Restricted
Shares.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the related rules and regulations.
"Governmental Body" means any agency, bureau, commission, court,
department, official, political subdivision, tribunal or other instrumentality
of any government, whether federal, state, county or local, domestic or foreign.
"Group" has the meaning given such term in Section 13(d)(3) of the
Exchange Act.
"Independent Director" means any director who is not and has not been
during the preceding two years an officer or employee of the Company or a
director, officer or employee of a beneficial owner of 5% or more of the shares
of Common Stock then issued and outstanding or of any Affiliate of such
beneficial owner.
"JEDI Registration Rights Agreement" means the Registration Rights
Agreement dated July 27, 1995 between JEDI and the Company, as amended the date
hereof.
"JEDI Designee" shall have the meaning ascribed to it in Section
2.1(a).
"JEDI Shares" has the meaning set forth in Paragraph B of the Recitals
hereof.
"Material Adverse Change" means any of (i) the average price for a
share of Common Stock over a period of thirty trading days being less than or
equal to $1.75, such number being subject to adjustment for any stock or other
non-cash dividends, split-ups, mergers, recapitalizations, combinations,
subdivisions, conversions, exchanges of shares or the like; or (ii) (a) any
downgrading by any "nationally recognized statistical rating organization" (as
that term is defined by the SEC for purposes of Rule 436(g)(2) under the
Securities Act of 1933, as amended) in the rating accorded to any debt security
of the Company by two or more ratings (including the relative standings within a
major rating category) (x) below the rating existing as of the date hereof or
(y) if not issued as of the date hereof, below the rating accorded thereto at
the time of its initial issuance, or (b) any such downgrading which results in
any debt security being accorded a rating of CCC or below by Standard & Poor's
Ratings Group, a division of XxXxxx-Xxxx, Inc., or a rating of Caa or below by
Xxxxx'x Investors Service, Inc. or their respective equivalents by any other
such nationally recognized statistical rating organization.
A-3
"Non-Restricted Shares" means those shares of Common Stock, calculated
by multiplying (i) the number of Equity Securities of the Company owned by any
of JEDI and its Affiliates and the Groups in which any of them may be members
that may then be voted or with respect to which consent may then be given by
(ii) the quotient of (x) the number of Effective Equity Securities (as defined
in the Anschutz Shareholders Agreement) less the number of Excess Purchaser
Securities (as defined in the Anschutz Shareholders Agreement) divided by (y)
the sum of the number of Effective Equity Securities and the shares of Common
Stock issuable to Anschutz or its Affiliates or Groups upon conversion of the
shares of Second Series Convertible Preferred Stock owned by Anschutz; PROVIDED,
HOWEVER, that if the Excess Purchaser Securities is equal to zero, the Effective
Equity Securities shall be deemed to include such number of shares of Common
Stock issuable upon conversion of the shares of Second Series Convertible
Preferred Stock owned by Anschutz or its Affiliates or Groups, which when added
to the Effective Equity Securities would result in Anschutz and its Affiliates
and Groups having voting power at the time of determination equal to 19.99% of
the aggregate voting power of all Equity Securities of the Company then issued
and outstanding.
"Permitted Transfer Date" means the earlier to occur of (i) July 27,
1998 or (ii) the date on which Anschutz and its Affiliates or Groups shall have
sold 50% or more of the shares of Common Stock beneficially owned by Anschutz
and its Affiliates or Groups, which figure shall include shares of Common Stock
issuable pursuant to the Second Series Convertible Preferred Stock, the
JEDI/Anschutz Option and the Tranche A Warrants (as each such term is defined in
the Second Restructure Agreement), held by Anschutz and its Affiliates or Groups
on the date hereof, but excluding any shares of Common Stock issuable pursuant
to the JEDI/Anschutz Option or the Tranche A Warrants if such option or warrants
expires or is canceled or terminated during the period between the date hereof
and July 27, 1998.
"Related Transaction" means, with respect to any acquisition or
disposition, or deemed acquisition or disposition, of any securities, a
transaction that (i) has been disclosed in a document filed with the SEC with
respect to the Company (that is then available for inspection at the offices of
the SEC) or has been otherwise publicly announced and (ii) by its terms is
effective upon, or immediately before or after giving effect to, the occurrence
of such acquisition or disposition or deemed acquisition or disposition.
"Rights Agreement" has the meaning ascribed to it in the Second
Restructure Agreement.
"SEC" means the United States Securities and Exchange Commission.
"Second Restructure Agreement" has the meaning set forth in Paragraph
A of the Recitals hereof.
A-4
"Section 16(b) Liability" means liability under Section 16(b) of the
Exchange Act with respect to or as a consequence, directly or indirectly, of
JEDI's or JEDI's Affiliate's acquisition (or deemed acquisition) or disposition
(or deemed disposition) of "beneficial ownership" of, or a "pecuniary interest"
or "indirect pecuniary interest" in, any of the JEDI Shares that shall have been
issued or otherwise created, acquired (or deemed to have been acquired) or
disposed of (or deemed to have been disposed of) by or pursuant to the Second
Restructure Agreement.
"Section 16(b) Matter" means each matter or series of matters
(including, without limitation, a proposed transaction or series of transactions
involving any stock or other non-cash dividend, split-up, reverse split-up,
reclassification, recapitalization, reorganization, combination, subdivision,
conversion, exchange of shares or Business Combination Transaction) which,
directly or indirectly, as a result of the taking of action with respect thereto
by the Company, its Board of Directors or shareholders or any Governmental Body
having jurisdiction thereover, or the conclusion of any such matter will or may,
directly or indirectly, whether taken alone or together with other facts or
events, result in Section 16(b) Liability; PROVIDED, HOWEVER, that a Section
16(b) Matter shall not include any of the foregoing matters that will or may,
directly or indirectly, result in Section 16(b) Liability with respect to or as
a consequence of the transfer by JEDI or any of its Affiliates of any JEDI
Shares in violation of the provisions of Section 3.2 or in transfers that would
violate the provisions of Section 3.2 but for clauses (a), (d) and (e) thereof
(collectively, "Excluded Transfers").
"Significant Transactions" means any one or more of the following:
(i) the approval of the annual budget of the Company and any
amendments thereto;
(ii) the incurrence of any indebtedness (excluding the
indebtedness represented by the Loan Agreement (as defined in the
Second Restructure Agreement)) by the Company or any Subsidiary in an
amount in excess of $20,000,000 in the aggregate, in a single
transaction or series of related transactions, or any amendment to
any material term of any agreement representing such indebtedness;
(iii) the issuance, redemption or repurchase of 20% of the
Equity Securities of the Company then outstanding, in one transaction
or a series of transactions, whether or not pursuant to a
recapitalization, reorganization, merger or consolidation of the
Company;
(iv) the sale, lease, exchange, transfer or other disposition,
directly or indirectly, of the Company's or any Subsidiary's assets,
in a single transaction or series of transactions, if such assets
constitute or would constitute Substantial Assets;
A-5
the merger or consolidation of the Company or the adoption of a plan
of liquidation or dissolution of the Company; any motion by the
Company to commence any case, proceeding or other action (A) under any
existing or future law of any jurisdiction relating to bankruptcy,
insolvency, reorganization or relief of debtors seeking to have an
order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it, or (B) seeking appointment of a receiver,
trustee, custodian or other similar official for it or for all or any
substantial part of its assets, or making a general assignment for the
benefit of its creditors; and
(v) any purchase, lease, exchange or other acquisition, directly
or indirectly, of assets (including securities) by the Company or any
Subsidiary, in a single transaction or series of related transactions,
if such assets constitute or would constitute Substantial Assets,
except purchases of equipment made in the ordinary course of
business.
"Subsidiary " of a person means (i) any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by the person or (ii) a
partnership in which the person or a Subsidiary of the person is, at the date
of determination, a general or limited partner of such partnership, but only if
the person or its Subsidiary is entitled to receive more than fifty percent of
the assets of such partnership upon its dissolution. For purpose of the
foregoing definition, an arrangement by which a person who owns an oil and gas
interest is subject to a joint operating agreement, processing agreement, net
profits interest, overriding royalty interest, farmout agreement, development
agreement, area of mutual interest agreement, joint bidding agreement,
unitization agreement, pooling arrangement or other similar agreement or
arrangement shall not, by reason of such agreement or arrangement alone, be
considered a Subsidiary. Unless the context otherwise requires, references to
one or more Subsidiaries shall be references to Subsidiaries of the Company.
"Substantial Assets" means assets having a fair market value that, or
assets to be acquired for a consideration that, equals or exceeds 10% of the
amount of the Consolidated Tangible Net Assets of the Company, as reflected on
the most recent audited consolidated balance sheet of the Company existing at
the time the Board makes the determination whether or not to approve, adopt or
authorize the Significant Transaction involved. The term "Consolidated Tangible
Net Assets" means, as of any date of determination, the amount of total assets
on a consolidated balance sheet of the Company, determined in accordance with
generally accepted accounting principles in
A-6
the United States as in effect from time to time consistently applied ("GAAP"),
less the sum of the amounts of all intangible assets determined in accordance
with GAAP.
"Transaction Documents" has the meaning ascribed to it in the Second
Restructure Agreement.
ARTICLE A.
COMPANY COVENANTS
Section 2.1 BOARD OF DIRECTORS.
(a) At any time during the period of 90 days following the
occurrence of a Material Adverse Change, JEDI may, in writing, request that the
Company take all actions necessary (including, without limitation, the
amendment of the bylaws of the Company and other applicable agreements,
including the Anschutz Shareholders Agreement) to cause (1) the election as a
director of the Company of a person selected by JEDI who may lawfully serve as a
director and who shall be reasonably satisfactory to the Company (the "JEDI
Designee"), (2) if the JEDI Designee shall cease to be a director for any
reason, the filling of the vacancy resulting thereby with another JEDI Designee
and (3) the calling of meetings of the Board of Directors upon the written
request of the JEDI Designee. JEDI shall only be entitled to one JEDI Designee
at any given time. The term of the JEDI Designee shall be until the second
annual meeting of the Company's shareholders following the date of such Material
Adverse Change (which term may be extended by JEDI for consecutive periods of
one year each if a Material Adverse Change is in existence or continuing on the
date of such second annual meeting). Upon termination of this Agreement, the
Company may remove the JEDI Designee as a director.
(b) At any time during which a JEDI Designee is not serving as a
director of the Company, one individual who shall be designated from time to
time in writing by JEDI to the Company and who shall be reasonably satisfactory
to the Company (each such individual, during the period of such designation, a
"JEDI Observer") shall be entitled to (1) receive prior notice (at the time
given to members of the Board of Directors) of any meeting of the Board of
Directors of the Company at which the authorization or approval of a Significant
Transaction is proposed to be considered, (2) attend such portion of such
meeting at which such Significant Transaction shall be so considered and (3)
receive all written management reports relating to any Significant Transaction
that shall be considered for authorization and approval at such meeting;
PROVIDED, HOWEVER, that (x) JEDI and each JEDI Observer shall agree to keep
strictly confidential all information relating to the Company, whether or not
related to any Significant Transaction, that JEDI and such JEDI Observer shall
obtain in connection with the foregoing and shall acknowledge his, her or its
responsibilities
A-7
under securities laws and other laws in connection therewith, (y) JEDI and each
such JEDI Observer shall not be entitled to receive any such notice, attend any
such meeting (or portion thereof) or receive such written management reports if
doing so could, in the judgment of the Company, violate any obligation or duty
(whether contractual, statutory, fiduciary or otherwise) to which the Company or
its officers, directors or employees were then subject (including, without
limitation, obligations of confidentiality) or otherwise subject the Company or
any of such persons to any liability or otherwise materially and adversely
affect the interests of the Company and (z) JEDI and each such JEDI Observer
shall not be entitled to attend such portion of such meeting if, in the judgment
of the Chairman of the Board of Directors or a majority of the directors of the
Company, such attendance would impair the due consideration by the Board of
Directors of any matter.
(c) If at any time when permitted to be appointed by JEDI
pursuant to Section 2.1(a) the JEDI Designee shall not be elected to the Board
of Directors by the shareholders of the Company (notwithstanding JEDI and its
Affiliates having voted all shares of Common Stock owned by them in favor of
such election) and the JEDI Designee shall not otherwise have been elected to
the Board of Directors before a date that is 10 days after the date of such vote
by the shareholders of the Company and, in any event, before any other material
action or matter is considered and resolved by the Board of Directors, the
provisions set forth in Article III shall thereafter be of no further force or
effect.
Section 2.2 EXCHANGE ACT SECTION 16(B).
(a) Without the prior written consent of JEDI, for a period of
six months from the date hereof, the Company shall take no action with respect
to a Section 16(b) Matter that will or may, directly or indirectly, whether
taken alone or together with other facts or events, result in JEDI or an
Affiliate of JEDI having Section 16(b) Liability, PROVIDED that the Company may
take any such action (1) with respect to a Section 16(b) Matter if there shall
have been entered a final judgment to the effect that JEDI and its Affiliates do
not and will not, directly or indirectly, have any Section 16(b) Liability,
which judgment shall not be subject to appeal and is RES JUDICATA as to all
matters that may give rise to Section 16(b) Liability in connection therewith,
or (2) that may, directly or indirectly, result in any such liability with
respect to or as a consequence of any Excluded Transfer.
(b) The Company may seek to determine by an Action brought
against JEDI in the United States District Court in the Southern District of New
York, or other jurisdiction approved by the Company and JEDI, the respective
rights and obligations of the parties under Section 2.2(a).
Section 2.3 RESTRICTIONS ON JEDI. Without the prior written
consent of JEDI, the Company shall not take or recommend to its shareholders any
action which would impose
A-8
limitations on the legal rights to be enjoyed by JEDI or Affiliates of JEDI as a
shareholder of the Company, other than those imposed by the express terms of
this Agreement and the Transaction Documents including, without limitation, any
action which would impose or increase restrictions on JEDI or Affiliates of JEDI
(a) based upon the size of its security holdings, the business in which it is
engaged or other considerations applicable to it and not to security holders
generally, (b) by means of the issuance of or proposal to issue any other class
of securities having voting power disproportionately greater than the equity
investment in the Company represented by such securities or by charter or by-law
amendment or (c) by reducing by any means (including, without limitation, by
split-up, reverse split-up, reclassification, recapitalization, reorganization,
combination, redemption, repurchase, or cancellation of securities or rights or
by a Business Combination Transaction) the number of shares of Common Stock that
are then issued and outstanding or are then subject to issuance upon the
conversion of or exercise or exchange for any Equity Securities (including
securities exchangeable or convertible into Equity Securities) of the Company
then outstanding, excepting only (i) the reduction in such number of shares of
Common Stock then issued and outstanding or subject to issuance resulting from
the conversion of, exercise or exchange for, or cancellation, termination or
modification of, Equity Securities of the Company and adjustments in the number
of shares of Common Stock subject to issuance under the outstanding stock
options issued by the Company to current and former employees of the Company and
its Subsidiaries pursuant to which 3,059,000 shares of Common Stock are reserved
for issuance or under other Equity Securities of the Company, or (ii) the
reduction in the number of shares of Common Stock issued and outstanding as a
result of the one-for-five reverse stock split contemplated by the Company to be
approved by shareholders of the Company at a special meeting to be held January
5, 1996.
Section 2.4 ACCESS TO INFORMATION.
(a) The Company shall promptly furnish to JEDI all information
that is required by GAAP to enable JEDI to account for its investment in the
Company. To the extent reasonably requested by JEDI, the Company shall, and
shall cause its employees, independent public accountants and other
representatives to, provide information regarding the Company to, and otherwise
cooperate with, JEDI and the representatives of JEDI so as to enable JEDI to
prepare financial statements in accordance with GAAP.
(b) Upon reasonable notice, JEDI may from time to time request
that the Company (1) promptly disclose to JEDI the number of shares of Common
Stock issued and outstanding on a date not more than five days prior to the date
of such request and the number of shares of Common Stock subject to issuance
upon the conversion of or exercise or exchange for the Equity Securities of the
Company outstanding on such date and (2) give JEDI reasonable access to all
books and records of the Company, including its minute books.
A-9
ARTICLE III
JEDI RESTRICTIONS
Section 3.1 VOTING RESTRICTIONS.
(a) In connection with each vote or written consent of the
holders of Common Stock, JEDI and its Affiliates shall vote, or consent with
respect to, and cause each of its Affiliates and each Group of which it is a
member, to vote or consent with respect to, all Excess JEDI Shares in respect of
the matters subject to such vote or consent in the same proportion that all
other Equity Securities of the Company (other than Equity Securities of the
Company owned by JEDI, Anschutz, any of their respective Affiliates or any Group
of which any such entity is a member) are voted or with respect to which such
consent is given by holders of such Equity Securities with respect to such
matter; PROVIDED, HOWEVER, that notwithstanding the foregoing, each of JEDI, its
Affiliates and such Groups at all times may vote, or consent with respect to,
Excess Purchaser Securities (1) for the election of the JEDI Designee, (2) as
JEDI, such Affiliate or such Group shall determine with respect to each Section
16(b) Matter with respect to which (A) any of JEDI and its Affiliates and the
respective Groups in which any of them may be members will have or may, directly
or indirectly, have Section 16(b) Liability and (B) there shall not have been
entered, as of the date such vote or consent shall be required to be given, a
final judgment to the effect that JEDI and its Affiliates and the respective
Groups in which any of them may be members do not and will not, directly or
indirectly, have any Section 16(b) Liability, which judgment shall not be
subject to appeal and is RES JUDICATA as to all matters that may give rise to
Section 16(b) Liability in connection therewith, and (3) as otherwise approved
by the Board of Directors of the Company, including a majority of Independent
Directors, with respect to the matter subject to such vote or consent.
(b) Notwithstanding anything contained in this Agreement, JEDI
and its Affiliates and the respective Groups in which any of them may be members
shall not be restricted in any manner whatsoever from voting, or consenting with
respect to, Equity Securities of the Company owned by any of them that are not
Excess JEDI Shares with respect to the matter subject to such vote or consent.
(c) The provisions of Section 3.1(a) shall terminate
contemporaneously with the termination of the restrictions contained in the
Anschutz Shareholders Agreement on the voting by Anschutz of its Excess
Purchaser Securities (as defined in the Anschutz Shareholders Agreement).
Section 3.2 TRANSFER RESTRICTIONS. Unless otherwise permitted
under the JEDI Registration Rights Agreement to include Registrable Shares (as
defined in the JEDI Registration
A-10
Rights Agreement) in an offering of the Company's Equity Securities, prior to
the Permitted Transfer Date JEDI shall not, and shall not cause or permit its
Affiliates to, transfer the beneficial ownership of any JEDI Shares, except in
one or more of the following transactions:
(a) each transfer approved by the Board of Directors, including
a majority of Independent Directors; and
(b) each transfer in a Business Combination Transaction approved
by the Board of Directors, including a majority of Independent Directors, or by
two-thirds of the shares of Common Stock voted with respect to the transaction
(in which the JEDI Shares are voted in accordance with the restrictions
contained in Section 3.1, if applicable); and
(c) each transfer pursuant to a tender or exchange offer for
outstanding Common Stock by any person other than JEDI, any of its Affiliates or
any Group including JEDI or any of its Affiliates (1) which the Board of
Directors, including a majority of the Independent Directors, does not oppose,
or (2) which the Board of Directors or a majority of Independent Directors
opposes if after completion of such tender or exchange offer securities not
tendered or exchanged may be treated less favorably than securities tendered;
PROVIDED that no tender, indication or arrangement to tender Common Stock may be
made in the case of the preceding clause (2) until forty-eight hours prior to
the expiration of any time after which securities tendered may be treated less
favorably than securities tendered prior thereto; and
(d) each bona fide pledge of or the granting of a security
interest in or any other mortgage, deed of trust, lien, hypothecation, charge,
deposit, arrangement, preference, priority, or encumbrance ("Lien") relating to
the JEDI Shares to secure a bona fide loan, guarantee or other financial
support, the foreclosure of such pledge or security interest or any Lien that
may be placed involuntarily upon any JEDI Shares, or the subsequent sale or
other disposition of such JEDI Shares by such lender or its agent, provided that
such lender is not a member of a Group with respect to Common Stock which Group
includes JEDI or Affiliates of JEDI; and
(e) each transfer of JEDI Shares to any Affiliate of JEDI, or a
bona fide pledge of or the granting of a security interest in or any other Lien
relating to such JEDI Shares to an Affiliate of JEDI, provided in each case that
such Affiliate shall expressly assume by written instrument satisfactory to the
Company and JEDI all of the obligations and restrictions contained in this
Agreement to which such JEDI Shares shall be subject immediately before such
transfer; and
(f) a transfer upon the liquidation or dissolution of the
Company or a transfer which is effected by operation of law.
A-11
ARTICLE IV
TERMINATION
Section 4.1 TERMINATION. This Agreement shall terminate on the
earlier of (i) the date of termination of the Anschutz Shareholders Agreement
and (ii) the date on which JEDI has beneficial ownership of JEDI Shares
constituting less than 3% of the issued and outstanding shares of Common Stock.
ARTICLE V
MISCELLANEOUS
Section 5.1 LEGENDS. Certificates representing the JEDI Shares
shall bear the legends set forth in Exhibit C to the Second Restructure
Agreement; PROVIDED, HOWEVER, that after (a) the transfer of any JEDI Shares in
accordance with Section 3.2 or (b) the termination of this Agreement, the third
paragraph of such legend shall be removed with respect to such JEDI Shares and
all JEDI Shares, respectively.
Section 5.2 NOTICES. All notices, requests and other
communications given under this Agreement shall be in writing. Each
communication shall be given to such party at its address stated on the
signature pages of this Agreement or at any other address as such party may from
time to time specify in writing to the other party. Each communication shall be
effective (a) if given by telecopy, when the telecopy is transmitted to the
proper address and the receipt of the transmission is confirmed, (b) if given by
mail, 72 hours after the communication is deposited in the mails properly
addressed with first class postage prepaid, or (c) if given by any other means,
when delivered to the proper address and a written acknowledgment of delivery is
received.
Section 5.3 NO WAIVERS; REMEDIES; SPECIFIC PERFORMANCE.
(a) No failure or delay by either party in exercising any right,
power or privilege under this Agreement shall operate as a waiver of such right,
power or privilege. A single or partial exercise of any right, power or
privilege shall not preclude any other or further exercise of such right, power
or privilege or the exercise of any other right, power or privilege. The rights
and remedies provided in this Agreement shall be cumulative and not exclusive of
any rights or remedies available at law or in equity.
(b) In view of the uniqueness of the agreements contained in
this Agreement and the transactions contemplated hereby and the fact that each
party would not have an
A-12
adequate remedy at law for money damages in the event that any obligation under
this Agreement is not performed in accordance with its terms, each party
therefore agrees that the other party to this Agreement shall be entitled to
specific enforcement of the terms of this Agreement in addition to any other
remedy to which either of them may be entitled, at law or in equity.
Section 5.4 AMENDMENTS, ETC. No amendment, modification,
termination, or waiver of any provision of this Agreement, and no consent to any
departure by a party from any provision of this Agreement, shall be effective
unless it shall be in writing and signed and delivered by the other party to
this Agreement, and then it shall be effective only in the specific instance and
for the specific purpose for which it is given.
Section 5.5 SUCCESSORS AND ASSIGNS.
(a) Except as expressly contemplated by this Agreement, no party
may assign its rights or delegate its obligations under this Agreement without
the prior written consent of the other party; PROVIDED that JEDI may assign its
rights and delegate its responsibilities under this Agreement (other than those
set forth in Article II) pursuant to Sections 3.2(d) or (e) without the consent
of the Company; provided, further, that the consent of the Company shall not be
unreasonably withheld with respect to an assignment and delegation of JEDI's
rights and obligations under Article II if all of the JEDI Shares then owned
are transferred pursuant to Section 3.2(e). Any assignment or delegation in
contravention of this Section 5.5 shall be void AB INITIO and shall not relieve
the delegating party of any of its obligations under this Agreement.
(b) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties to this Agreement and their respective
permitted successors and assigns.
(c) Notwithstanding anything herein to the contrary, each
transferee of JEDI Shares transferred in one or more of the transactions
specified in any of clauses (a) through (f), inclusive, of Section 3.2 shall
acquire such JEDI Shares free and clear of any restrictions or obligations
contained in this Agreement.
Section 5.6 GOVERNING LAW . This Agreement shall be governed by
and construed in accordance with the internal laws of the State of New York. All
rights and obligations of the parties shall be in addition to and not in
limitation of those provided by applicable law.
Section 5.7 COUNTERPARTS; EFFECTIVENESS. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if all signatures were on the same instrument.
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Section 5.8 SEVERABILITY OF PROVISIONS. Any provision of this
Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
that jurisdiction, be ineffective to the extent of the prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of the provision in any other
jurisdiction.
Section 5.9 HEADINGS AND REFERENCES. Article and section headings
in this Agreement are included for the convenience of reference only and do not
constitute a part of this Agreement for any other purpose. References to parties
and articles and sections in this Agreement are references to the parties to or
the articles and sections of this Agreement, as the case may be, unless the
context shall require otherwise.
Section 5.10 ENTIRE AGREEMENT. Except for the Second Restructure
Agreement and the agreements referred to therein, this Agreement embodies the
entire agreement and understanding of the parties and supersedes all prior
agreements or understandings with respect to the subject matters of this
Agreement.
Section 5.11 SURVIVAL. Except as otherwise specifically provided in
this Agreement, each representation, warranty or covenant of each party
contained in this Agreement shall remain in full force and effect,
notwithstanding any investigation or notice to the contrary.
Section 5.12 WAIVER OF JURY TRIAL. Each party waives any right to a
trial by jury in any action to enforce or defend any right under this Agreement
or any amendment, instrument, document or agreement delivered, or which in the
future may be delivered, in connection with this Agreement and agrees that any
action shall be tried before a court and not before a jury.
Section 5.13 AFFILIATE. Nothing contained in this Agreement shall
cause JEDI to be or be deemed an "affiliate" of any of the Company and its
Subsidiaries within the meaning of Rule 13e-3 under the Exchange Act.
[The remainder of this page is intentionally left blank.]
A-14
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Shareholders Agreement as of the date first written above.
FOREST OIL CORPORATION
By:
----------------------------------------------------
Name:
--------------------------------------------------
Title:
-------------------------------------------------
Address: 0000 Xxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
JOINT ENERGY DEVELOPMENT INVESTMENTS
LIMITED PARTNERSHIP
By: Enron Capital Management Limited
Partnership, its General Partner
By: Enron Capital Corp., its
General Partner
By:
------------------------------------------
Xxxxxxxx X. Xxxxxx
Vice President
Address: 0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
with a copy to:
Joint Energy Development Investments
Limited Partnership
c/o Enron Capital Corp.
Attention: Xxxxx Xxxxx/Xxxxxx XxXxx
0000 Xxxxx Xxxxxx, Xxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Enron Capital & Trade Resources Corp.
Attention: Xxxxx Xxxxxxx
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
EXHIBIT B
THIRD AMENDMENT TO LOAN AGREEMENT
This Third Amendment to Loan Agreement (this "Amendment") is made and
entered into as of January __, 1996 ("Third Amendment Date"), by and between
FOREST OIL CORPORATION, a New York corporation, with principal offices at 0000
Xxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000 (the "Borrower"), and JOINT ENERGY
DEVELOPMENT INVESTMENTS LIMITED PARTNERSHIP, a Delaware limited partnership,
with offices at 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000 (the "Lender").
WHEREAS, reference for all purposes is hereby made to that certain Loan
Agreement dated December 28, 1993, between the Borrower and the Lender, as
amended by the First Amendment to Loan Agreement dated as of December 28, 1993,
and the Second Amendment to Loan Agreement dated as of July 27, 1995 (as so
amended, the "Agreement");
WHEREAS, the Borrower and the Lender desire to amend the Agreement as
hereinafter set forth;
NOW, THEREFORE, for and in consideration of ten dollars ($10.00) and other
good and valuable consideration, the Borrower and the Lender hereby agree as
follows:
1. Borrower and Lender hereby acknowledge and agree to the following:
(a) As of even date herewith and prior to the consummation of the
transactions provided for herein, the Tranche B Loan had an outstanding
principal balance of $[22,368,185.88]. On even date herewith, Lender has
conveyed to Borrower the Tranche B Warrant and its rights and obligations under
the Anschutz Option and in exchange therefor Borrower has, in full repayment of
the outstanding principal balance due under the Tranche B Loan, issued to
Lender the Shares, all as contemplated by the Second Restructure Agreement. To
evidence the repayment of the Tranche B Loan, Lender shall make an appropriate
notation on the ledger forming a part of the Note or if no ledger is attached
to the Note, otherwise reflect the payment of the Tranche B Loan in its
records.
(b) As of the Third Amendment Date and after giving effect to this
Amendment, the Loan has an outstanding principal balance of $[____________]
together with accrued but unpaid interest thereon in the amount of $______.
(c) Lender hereby acknowledges that for purposes of the Agreement
(i) the Conveyance Expiration Date shall be deemed to have occurred; (ii) the
Anschutz Option shall be
B-1
deemed to have expired; and (iii) the Tranche B Loan shall be deemed to have
been fully repaid by Borrower.
2. All references within the Agreement to either "110%" or "115%" shall
be modified to read "125%".
3. Section 1.01 of the Agreement is amended by replacing or inserting
the following defined terms, as appropriate:
"PARTIAL RELEASE OF LIENS" shall mean an instrument or instruments in
recordable form pursuant to which Lender shall release the appropriate
interest in the Mortgaged Properties from the Liens granted pursuant to
the terms of the Security Instruments. Such instruments shall expressly
state that they are partial release of liens only and that such release
will not affect any other Liens securing the Mortgaged Properties or
release any other property from such Liens.
"SECOND RESTRUCTURE AGREEMENT" shall mean the Second Restructure
Agreement dated as of December __, 1995 by and between Borrower and
Lender, as the same may be amended from time to time.
"SHARES" shall have the meaning given such term in the Second
Restructure Agreement.
"WARRANTS" shall mean the Tranche A Warrant.
4. Section 2.02(c) of the Agreement is deleted.
5. Section 2.03(a) of the Agreement is amended in its entirety to read
as follows:
(a) With respect to any Capital Operation, if Borrower elects or is
required to submit an AFE to Lender pursuant to the terms of this Agreement,
such AFE shall set forth among other things, the estimated commencement date,
the proposed depth, the objective zone or zones to be tested, the surface and
bottom hole locations, applicable details regarding directional drilling, the
equipment to be used and the estimated costs of the operation, and such other
information as Lender reasonably may request.
6. Section 2.03(c) of the Agreement is amended in its entirety to read
as follows:
(c) With respect to any AFEs submitted pursuant to the terms of
Sections 2.02(b), 2.03(b), 2.18, 2.20, and as provided in Footnote 1 to Exhibit
I, Lender shall have ten (10) Business Days (48 hours if the rig is on location
and Borrower notifies Lender of such circumstance at the time the AFE or
Supplemental AFE is submitted for approval, or sixty (60) Business Days if the
AFE involves the construction of a platform and/or facilities either as a part
of the well proposal or
B-2
as a separate proposal) after receipt of such AFE and all other information
requested by Lender within which to approve the proposed AFE and the related
operation. Failure of Lender to notify Borrower in writing within such period
of time of such approval shall be deemed disapproval of the proposed AFE and
the related operation. If, however, Lender notifies Borrower in writing prior
to the expiration of such period that it consents to Borrower's AFE, Lender
shall be deemed to have consented to the commencement and completion by
Borrower of such operation pursuant to such AFE. In addition, if within 60
days after Borrower's receipt from Lender of a consent as provided for pursuant
to the terms of this Section 2.03 Borrower has not commenced the operation
covered by such consent, such consent shall be void; provided, however,
Borrower may resubmit the applicable AFE and operation to Lender for its
approval.
7. Section 2.03(d) of the Agreement is amended in its entirety to read
as follows:
(d) If at any time Lender elects not to consent or is deemed to have
elected not to consent to a Capital Operation and the related AFE submitted by
Borrower pursuant to Section 2.02(b) or 2.03(b), then Borrower shall have the
following options: (x) Borrower may elect not to perform such Capital
Operation, and if such Capital Operation is a Scheduled Capital Operation,
Borrower's obligation to complete such Scheduled Capital Operation shall
terminate and Exhibit J to this Agreement shall be revised as provided for in
Section 2.17; or (y) Borrower may complete at its sole cost and expense the
operation provided for in such AFE ("Excluded Operation") pursuant to the terms
of this Section 2.03(d) and the zone or zones targeted in such Capital
Operation (as specified in the AFE) shall be released from the Liens granted to
Lender pursuant to the Security Instruments. To obtain such a release, the
Borrower must commence the operation proposed in the rejected AFE within 60
days after the first to occur of the date on which Borrower received written
notice of Lender's election not to consent or the date on which Lender is
deemed to have elected not to consent to the applicable Capital Operation. For
purposes of all Scheduled Capital Operations providing for the drilling of a
well, such operation shall be deemed to have commenced on the date the well is
spudded, for purposes of all recompletion operations, such operation shall be
deemed to have commenced on the date the workover rig is on-site and operations
using such rig are underway, and for purposes of all other Capital Operations,
such operations shall be deemed to have commenced on the date on which on-site
operations with respect to such Capital Operation have commenced and costs in
excess of 10% of costs set out in the AFE have been incurred. Once the
Borrower has commenced a Capital Operation in accordance with the terms of the
immediately preceding sentence, Borrower shall so notify Lender and Lender
shall, within 10 Business Days following receipt of such notice, execute and
deliver to Borrower a Partial Release of Liens pursuant to which the Lender
releases only the zone or zones targeted pursuant to the terms of the AFE.
Notwithstanding the delivery of the Partial Release, Borrower shall thereafter
be obligated to conduct such operation as a reasonable and prudent operator.
8. Sections 2.08(d), (e) and (f) of the Agreement are hereby deleted.
9. Section 2.16 of the Agreement is hereby deleted.
B-3
10. Section 2.17(a) of the Agreement is hereby modified in its entirety
to read as follows:
(a) If Lender does not consent to an AFE with respect to a Scheduled
Capital Operation, or if an adjustment to Exhibit J is required pursuant to
Sections 2.18 or 2.20, then in any such case Borrower and Lender shall attempt
to mutually agree on an appropriate adjustment to the Scheduled Principal
Amount and the Required Trailing Twelve Month Cash Flow. If Borrower and
Lender are unable to agree on an appropriate adjustment to such amounts, then
the Scheduled Principal Amount and the Required Trailing Twelve Month Cash Flow
shall instead be adjusted as provided for on Attachment 1 to Exhibit J.
11. Section 2.18 of the Agreement is hereby modified in its entirety to
read as follows:
Section 2.18 COST OVERRUNS.
If Borrower anticipates incurring Overrun Expenses in connection with
any Capital Operation, Borrower shall have the right to submit a Supplemental
AFE ("Supplemental AFE") to Lender, which Supplemental AFE shall set forth the
estimated amount of the Overrun Expenses, a copy of the original AFE for such
operation, the status of the work on the operation including the depth drilled,
any objective zone or zones that have been tested, the expenses incurred, the
work remaining to be completed, the estimated costs necessary to complete such
work and such other information as Lender may reasonably request. Lender shall
respond to any such Supplemental AFE within the time period provided for in
Section 2.03(c). If Lender approves such Supplemental AFE then the costs set
forth in the Supplemental AFE shall be the only Overrun Expenses approved with
respect to such operation and such costs shall be used in calculating the
Approved Overrun Expenses. If Lender elects not to consent to the Supplemental
AFE or is deemed to have elected not to consent to the Supplemental AFE,
Borrower shall have the right to either (i) terminate its participation in the
operation covered by the Supplemental AFE or (ii) continue its participation in
such operation. If Borrower elects the option set forth in either clause (i)
or clause (ii) above, then Borrower's obligation to complete such operation
shall terminate and Exhibit J attached hereto shall be revised as provided for
in Section 2.17. If Borrower elects to continue with its participation as
provided for in clause (ii), then Borrower shall so notify Lender and within 10
Business Days thereafter (if the operations subject to the Supplemental AFE
have already been commenced as of the date of Borrower's notification), or
within 10 Business Days following commencement of the operations subject to the
Supplemental AFE, Lender shall execute and deliver to Borrower a Partial
Release of Liens releasing only the objective zone or zones designated in the
Supplemental AFE. Notwithstanding the delivery of the Partial Release,
Borrower shall thereafter be obligated to conduct such operation as a
reasonable and prudent operator. Borrower shall not have the right to propose
a Supplemental AFE with respect to Overrun Expenses incurred in connection with
any Scheduled Capital Operation if Borrower's share of the initial AFE
submitted to the working interest owners prior to the commencement of such
Scheduled Capital Operation was more than 125% of the Schedule I amount for
such operation and such initial AFE was not submitted to Lender prior to the
commencement of such operation pursuant to the terms of Section 2.02(b).
B-4
12. Section 2.20 of the Agreement is hereby modified in its entirety to
read as follows:
Section 2.20 MANDATORY CAPITAL EXPENSES. From and after the Third
Amendment Date and subject to the terms of this Section 2.20, Borrower shall
maintain the leases described on Exhibit S attached hereto in full force and
effect. If Borrower determines at any time that in order to maintain any lease
described on Exhibit S it anticipates incurring expenses in excess of 125% of
the amount set forth on Exhibit S as the projected cost of extending or
renewing such lease for the time period specified on Exhibit S, then Borrower
shall have the right to submit a request for approval (a "Lease Extension AFE")
to Lender setting forth the amount of such excess. Borrower's Lease Extension
AFE shall include information relating to the consideration being requested by
the lessor and such other information as Lender may reasonably request. Lender
shall respond to any such request within the time period provided for in
Section 2.03(c) with respect to AFEs. If Lender consents to Borrower's Lease
Extension AFE, then Exhibit S shall be deemed modified to increase the
applicable amount set forth on Exhibit S by the excess amount approved by
Lender. If Lender elects not to consent to Borrower's request or is deemed to
have elected not to consent to such request, Borrower shall have the right to
either (i) allow the lease in question to terminate or (ii) make the payments
provided for in its request. If Borrower elects the option set forth in either
clause (i) or clause (ii) above, then Borrower's obligation with respect to
any Scheduled Capital Operations attributable to the lease in question shall
terminate and Exhibit J attached hereto shall be revised as provided for in
Section 2.17. If Borrower elects to extend the lease in question as provided
for in clause (ii), then provided Borrower pays to the lessor of such lease an
amount equal to or in excess of the amount set forth in the Lease Extension
AFE, Lender shall execute a Partial Release of Liens releasing the lease in
question. Such Partial Release of Liens shall be delivered by Lender to
Borrower within 10 Business Days after receiving evidence of Borrower's payment
of the amounts required to effect the extension.
13. Section 4.17 of this Agreement is amended in its entirety to read as
follows:
Section 4.17 CAPITAL EXPENDITURES. Subject to the terms of this
Section 4.17 and to Lender's approval rights as set forth in Section 2.02 and
2.03(a), Borrower agrees to make the capital expenditures involved in and to
drill, complete, and equip for production, or recomplete and rework, as the
case may be, each of the xxxxx and to conduct each of the other Scheduled
Capital Operations and Prior Capital Operations described or referred to on
Exhibit I hereto. Borrower shall commence each Scheduled Capital Operation at
any time after the Third Amendment Date and no later than twelve (12) months
after the last day of, the month specified on Exhibit I with respect to such
Scheduled Capital Operation (such time period, with respect to a particular
Scheduled Operation being herein referred to as the "Window Period") and shall
thereafter conduct such operation as a reasonable and prudent operator. For
purposes of all Scheduled Capital Operations providing for the drilling of a
well, such operation shall be deemed to have commenced on the date the well is
spudded. Notwithstanding the foregoing or any other provision within this
Agreement to the contrary, Borrower shall not be required to commence a
Scheduled Capital Operation with respect to which (i) Borrower submits an AFE
pursuant to Section 2.02(b) and Lender does not consent thereto or is deemed to
have elected not to consent thereto; (ii) Lender elects not to or is
B-5
deemed to have elected not to consent to a Supplemental AFE with respect to
such operation pursuant to Section 2.18; (iii) Borrower's obligations have
terminated pursuant to Section 2.20; or (iv) Borrower provides evidence
satisfactory to the Lender that such operation is not reasonably necessary and
Lender has consented in writing to delay or elimination thereof.
14. Section 4.19 of the Agreement is hereby modified by deleting the
reference to "Sections 2.08(c), (d) and (e)" and inserting therefor the
following: "Section 2.08(c)".
15. Section 5.13 of the Agreement is hereby amended by deleting the two
references in such Section to "Sections 2.08(c) and (d)" and inserting therefor
"Section 2.08(c)".
16. The Borrower represents and warrants to the Lender that as of the
date of this Amendment:
(a) Each of the representations and warranties contained in (i)
Sections 3.01 through 3.04, 3.13 through 3.16, and 3.21 through 3.27 are true
and correct in all material respects;
(b) After giving effect to the amendments hereunder and the waiver
provided in Section 5.7 of the Second Restructure Agreement, there exists no
Default or Event of Default; and
(c) the Agreements described in Sections 3.18(a) and 3.18(b) (other
than the gas purchase agreement referenced in Section 3.18(a)) have not been
modified, terminated, assigned or pledged by Borrower, are in full force and
effect and Borrower, and to the best of Borrower's knowledge, no other party,
is in default in the performance of its obligations thereunder.
17. Except as amended and modified hereby, the Agreement, including,
without limitation, the terms and provisions of Section 6.03 thereof, shall
remain in full force and effect and the Borrower and the Lender hereby ratify,
adopt, and confirm the Agreement as hereby amended. The amendments to the
Agreement effected under this Amendment shall be effective as of the date of
this Amendment. The execution of this Amendment shall not waive, modify,
release or limit any of Lender's existing rights, claims or remedies.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed as of the date first above written.
BORROWER:
FOREST OIL CORPORATION
By: ____________________________________________
Xxxxxx X. Xxxxxxx
Vice President
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LENDER:
JOINT ENERGY DEVELOPMENT
INVESTMENTS LIMITED PARTNERSHIP
By: Enron Capital Management Limited
Partnership, its general partner
By: Enron Capital Corp., its general
partner
By: ________________________________________
Xxxxxxxx X. Xxxxxx
Vice President
B-7
EXHIBIT C
Legends for Stock Certificates
1. "The shares represented by this certificate have not been registered
under the Securities Act of 1933 and may not be offered, sold,
transferred or otherwise disposed of except in compliance with said
Act."
2. "The shares represented by this certificate are subject to the
restrictions contained in a Registration Rights Agreement dated as of
July 27, 1995, as amended, a copy of which is on file at the office of
the Secretary of the Company."
3. "The shares represented by this certificate are subject to the
restrictions contained in a Shareholders Agreement dated as of
__________, 1996, a copy of which is on file at the office of the
Secretary of the Company."
4. "This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Forest Oil
Corporation and Mellon Securities Trust Company, dated as of October 14,
1993 (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of Forest Oil Corporation. Under certain
circumstances, as set forth in the Rights Agreement, those Rights will
be evidenced by separate certificates and will no longer be evidenced by
this certificate. Forest Oil Corporation will mail to the holder of
this certificate a copy of the Rights Agreement without charge after
receipt of a written request therefor. As described in the Rights
Agreement, Rights issued to or acquired by any Acquiring Person (as
defined in the Rights Agreement) shall, under certain circumstances,
become null and void."
EXHIBIT D
AMENDMENT NO. 1 TO
REGISTRATION RIGHTS AGREEMENT
THIS AMENDMENT TO REGISTRATION RIGHTS AGREEMENT ("Amendment") dated
___________, 1996 is between FOREST OIL CORPORATION, a New York corporation
(the "Company"), and JOINT ENERGY DEVELOPMENT INVESTMENTS LIMITED
PARTNERSHIP, a Delaware limited partnership (the "Shareholder").
RECITALS
WHEREAS, the Company and the Shareholder entered into a Registration
Rights Agreement (the "Registration Rights Agreement") dated July 27, 1995
relating to registration rights granted by the Company to the Shareholder in
respect of certain Tranche B Warrant Shares.
WHEREAS, pursuant to the Second Restructure Agreement dated December __,
1995 between the Company and the Shareholder, the Tranche B Warrants shall,
on the closing of the Second Restructure Agreement, be exchanged for
8,400,000 shares of common stock of the Company, par value $.10 per share,
together with the associated Rights.
WHEREAS, the Company and the Shareholder wish to amend the Registration
Rights Agreement to take account of the exchange referred to above and to
make certain other amendments thereto.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration the adequacy and
sufficiency of which are hereby acknowledged by the parties, it is agreed as
follows:
1. The Registration Rights Agreement shall be amended as follows:
(a) In the Recitals, the last sentence of Paragraph A shall be deleted
and the following substituted therefor: "The 8,400,000 shares of the
Common Stock of the Company acquired pursuant to the Second
Restructure Agreement are referred to as the "Registrable Shares"."
(b) In Section 1(a), the phrase "Termination Date (as defined in the
JEDI/Anschutz Option)" shall be deleted and the following substituted
therefor: "Permitted Transfer Date (as defined in the Shareholders
Agreement dated ___________, 1996, between the Company and the
Shareholder)".
(c) In Section 1(b):
(i) The following clause shall be inserted at the beginning of the
first sentence of Section 1(b): "Subject to the provisions of
Section 1(b)(4),";
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(ii) The following Section 1(b)(4) shall be inserted:
"(4) If prior to the Effective Date the Other Shareholder
requests inclusion or demands registration of any Other
Registrable Shares in an offering pursuant to its rights
under the Other Registration Rights Agreement, the
Shareholder shall be permitted to include in such offering
the same percentage of its Registrable Shares as the
percentage of Other Registrable Shares for which such
request has been made; provided that the percentage of
Other Registrable Shares shall be calculated based on the
number of shares of Common Stock of the Company owned by
the Other Shareholder, together with shares of Common
Stock issuable pursuant to any derivative security owned
by the Other Shareholder which is then in effect and
convertible into or exchangeable for, or which entitles
the Other Shareholder to purchase, Common Stock of the
Company. If the managing underwriter of such offering
advises the Company in writing that, in its opinion, the
number of securities requested to be included in the
registration is so great as would adversely affect the
offering, including the price as to which the Registrable
Shares can be sold, the Company will include in the
registration the maximum number of securities which it is
so advised can be sold without the adverse effect,
allocated in accordance with the priorities set forth in
Section 1(b)(2) or Section 1(b)(3), as the case may be."
2. Except as modified by the terms of this Amendment, the terms of the
Registration Rights Agreement shall continue in full force and effect.
Any reference in the Registration Rights Agreement to "this Agreement"
shall be deemed to include the amendments to the Registration Rights
Agreement effected by this Amendment.
3. This Amendment may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if all signatures
were on the same instrument.
4. This Amendment shall be governed by and construed in accordance with the
internal laws of the State of New York.
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IN WITNESS WHEREOF, the parties have executed and delivered this Amendment
as of the date first written above.
JOINT ENERGY DEVELOPMENT INVESTMENTS
LIMITED PARTNERSHIP
By: Enron Capital Management Limited
Partnership, its General Partner
By: Enron Capital Corp., its
General Partner
By:
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Xxxxxxxx X. Xxxxxx
Vice President
FOREST OIL CORPORATION
By:
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Name:
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Title:
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