EXECUTION COPY
AMENDMENT XX. 0
XXXXXXXXX XX. 0 dated as of August 19, 1997 between 611852
SASKATCHEWAN LTD., a corporation duly organized and validly existing
under the laws of the Province of Saskatchewan, Canada (the "COMPANY");
each of the lenders that is a signatory hereto (individually, a "LENDER"
and, collectively, the "LENDERS"); and THE CHASE MANHATTAN BANK OF
CANADA, as administrative agent for the Lenders (in such capacity,
together with its successors in such capacity, the "ADMINISTRATIVE
AGENT").
The Company, the Lenders and the Administrative Agent are
parties to a Second Amended and Restated Credit Agreement dated as of
April 1, 1997 (the "SECOND AMENDED AND RESTATED CREDIT AGREEMENT"),
providing, subject to the terms and conditions thereof, for extensions
of credit (by making of loans and issuing letters of credit) to be made
by said Lenders to the Company in an aggregate principal or face amount
not exceeding C$80,000,000. CREDIT LYONNAIS CANADA (the "NEW LENDER")
wishes to become a party to the Second Amended and Restated Credit
Agreement as a "Lender" thereunder, the Company, the Lenders and the
Administrative Agent wish to increase the aggregate amount of
Commitments under the Second Amended and Restated Credit Agreement from
C$80,000,000 to C$165,000,000 or the Equivalent Amount in U.S. Dollars
and wish to amend the Second Amended and Restated Credit Agreement in
certain additional respects, and accordingly, the parties hereto hereby
agree as follows:
Section 1. DEFINITIONS. Except as otherwise defined in this
Amendment No. 1, terms defined in the Second Amended and Restated Credit
Agreement are used herein as defined therein.
Section 2. AMENDMENTS. Subject to the satisfaction of the
conditions precedent specified in Section 4 below, but effective as of
the date hereof, the Second Amended and Restated Credit Agreement shall
be further amended as follows:
2.01. The New Lender shall be deemed to be a "Lender" under
and for all purposes of the Second Amended and Restated Credit Agreement
and each reference therein to "Lender" shall be deemed to include the
New Lender. References in the Second Amended and Restated Credit
Agreement (including references to the Second Amended and Restated
Credit Agreement amended hereby) to "this Agreement" (and indirect
references such as "hereunder", "hereby", "herein", and "hereof") shall
be deemed to be references to the Second Amended and Restated Credit
Agreement as amended and as further amended hereby.
2.02. The following definitions are hereby added in
alphabetical order in Section 1.01 of the Second Amended and Restated
Credit Agreement:
"ALLOCATED CANADIAN BORROWING BASE" shall mean, as of any date,
an amount in Dollars designated as such from time to time by the Company
pursuant to Section 2.12 hereof.
AMENDMENT XX. 0
- 0 -
"XXXXXXXXX X.X. XXXXXXXXX XXXX" shall mean an amount equal to
the Borrowing Base then in effect MINUS the Allocated Canadian Borrowing
Base.
"AMENDMENT NO. 1" shall mean Amendment No. 1 dated as of August
19, 1997 to this Agreement.
"APPLICABLE COMMITMENT FEE RATE" shall mean for any period
during which the Usage Ratio is within the range specified under "Usage
Ratio" in Schedule IV to Amendment No. 1, the percentage per annum set
forth opposite the range in such Schedule IV.
"BORROWING BASE REPORTS" shall mean collectively, (i) U.S.
Reserve Evaluation Reports, (ii) Reserve Evaluation Reports and (iii)
Net Back Pool Reports and "BORROWING BASE REPORT" shall mean any thereof.
"CANADIAN GUARANTEE" shall mean the Guarantee dated as of
August 19, 1997 executed by Forest in favor of the Administrative Agent
and the Lenders party to this Agreement.
"COMBINED COMMITMENTS" shall have the meaning ascribed thereto
in the Intercreditor Agreement.
"COMBINED MAJORITY LENDERS" shall have the meaning ascribed
thereto in the Intercreditor Agreement.
"INTERCREDITOR AGREEMENT" shall mean the Intercreditor
Agreement dated as of August 19, 1997 between the U.S. Agent and the
Administrative Agent as the same may be modified, supplemented, amended
and/or restated and in effect from time to time."
"LENDER GROUP" shall have the meaning ascribed thereto in the
Intercreditor Agreement.
"RESTRICTED SUBSIDIARY" shall have the meaning ascribed thereto
in the U.S. Credit Agreement.
"U.S. AGENT" means The Chase Manhattan Bank, as agent under the
U.S. Credit Agreement.
"U.S. CREDIT AGREEMENT" shall have the meaning ascribed thereto
in the Intercreditor Agreement.
"U.S. CREDIT AGREEMENT OBLIGATIONS" shall mean (i) the Loans
provided for in Section 2.01 of the U.S. Credit Agreement and (ii) the
Letter of Credit Liabilities under the U.S. Credit Agreement.
AMENDMENT XX. 0
- 0 -
"X.X. XXXXXXX" shall have the meaning ascribed thereto in the
Intercreditor Agreement.
"U.S. RESERVE EVALUATION REPORT" shall mean the report defined
in the U.S. Credit Agreement as the "Reserve Evaluation Report" prepared
for Forest.
2.03. Section 1.01 of the Second Amended and Restated Credit
Agreement is amended by deleting the existing definitions for the
following terms and inserting new definitions as follows:
"APPLICABLE MARGIN" shall mean, with respect to each Type of
Loan for any period during which the Usage Ratio is within the range
specified under "Usage Ratio" in Schedule V to Amendment No. 1, the
number of basis points set forth opposite the range in such Schedule V
to be expressed as percentages per annum for purposes of the interest
calculations in this Agreement, PROVIDED that the "Applicable Margin"
shall be increased or reduced, as applicable, on the date of the
borrowing of a Loan or the issuance of a Letter of Credit or the
acceptance of a Bankers' Acceptance, or the repayment of a Loan or
expiration of a Letter of Credit or maturity of a Bankers' Acceptance,
as the case may be, which results in the Usage Ratio shifting from one
range to another but that the "Applicable Margin" for any BA Loan,
Bankers' Acceptance or Eurodollar Loan outstanding prior to such date
shall remain the same until the maturity of such Bankers' Acceptance or
the end of the Interest Period for such BA Loan or Eurodollar Loan,
respectively.
"ASSIGNMENT OF PAYMENTS" shall mean the Assignment of Payments
relating to the Canadian Forest Credit Agreement dated February 8, 1996,
provided by the Company to the Administrative Agent as same shall be
amended, modified or supplemented and in effect from time to time.
"ASSIGNMENT OF SECURITY" shall mean the assignment of the
Underlying Loan Documents dated February 8, 1996 provided by the Company
to the Administrative Agent as same shall be amended, modified or
supplemented and in effect from time to time.
"CANADIAN FOREST DEBENTURE" shall mean the Demand Debenture and
Negative Pledge dated February 8, 1996, as has been amended, including
as amended by the Third Security Confirmation, Amendment and
Supplemental Debenture Agreement dated as of August 19, 1997 in the
principal of C$165,000,000 payable to the Company and assigned to the
Administrative Agent and its successors and assigns, as the same shall
be amended, modified and supplemented and in effect from time to time.
"COMMITMENT" shall mean, as to each Lender, the obligation of
such Lender to make Loans, to issue or participate in Letters of Credit
and Swingline Loans pursuant to Sections 2.03 and 2.05 hereof, and to
accept Bankers' Acceptances pursuant to Section 2.04 hereof, in an
aggregate principal or face amount (expressed where applicable as the
Equivalent Amount of U.S. Dollars) at any one time outstanding up to but
not exceeding the amount set
AMENDMENT NO. 1
- 4 -
opposite the name of such Lender on the signature pages of Amendment No.
1 under the caption "Commitment" or, in the case of a Person that
becomes a Lender pursuant to an assignment permitted under Section
11.06(b) hereof, as specified in the respective instrument of assignment
pursuant to which such assignment is effected (as the same may be
reduced at any time or from time to time pursuant to Section 2.06 or
11.06(b) hereof).
"COMMITMENT TERMINATION DATE" shall mean August 19, 2001.
"COMPANY DEBENTURE" shall mean the Demand Debenture and
Negative Pledge dated as of February 8, 1996, as the same has been
amended, including as amended by the Third Security Confirmation,
Amendment and Supplemental Debenture Agreement dated as of August 19,
1997, of the Company in the principal amount of C$165,000,000, payable
to the Administrative Agent and its successors and assigns as the same
shall be amended, modified and supplemented and in effect from time to
time.
"FOREST DEBENTURE" shall mean the Limited Recourse Demand
Debenture and Negative Pledge, dated as of April 1, 1997, as the same
has been amended, including as amended by the Third Security
Confirmation, Amendment and Supplemental Debenture Agreement dated as of
August 19, 1997, of Forest in the principal amount of C$165,000,000,
payable to the Company and assigned to the Administrative Agent and its
successors and assigns, as the same shall be amended, modified and
supplemented and in effect from time to time.
"FUTURE NET REVENUES" shall mean, as of any date of
determination for any period, the future gross revenues attributable to
all or a part (as specified herein) of Proved Reserves constituting part
of the Hydrocarbon Properties for such period less the sum for such
period of all projected Operating Expenses and Capital Expenditures with
respect thereto, as set forth in the related Borrowing Base Report, and
less (without duplication) all amounts projected to be applied to the
discharge of any Production Payment and to the unearned balance of any
advance payment received under any contract to be performed relating to
such Proved Reserves.
"INTEREST COVERAGE RATIO" shall mean, for any period, the ratio
of (a) the sum of Cash Flow PLUS Cash Flow under, and as defined in, the
U.S. Credit Agreement on a consolidated basis for such period to (b) the
sum of Interest Expense PLUS Interest Expense under, and as defined in,
the U.S. Credit Agreement on a consolidated basis for such period.
"LOAN DOCUMENTS" shall mean, collectively, this Agreement, the
Notes, the Swingline Notes, the Letter of Credit Documents, the Security
Documents, the Bankers' Acceptance Documents and the Intercreditor
Agreement.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect
on (a) the Property, business, operations, financial condition,
prospects, liabilities or capitalization of Forest and its Subsidiaries
taken as a whole, (b) the ability of any Obligor (as defined in the U.S
Credit Agreement) or the Company to perform their respective obligations
under any of the Basic Documents (as defined in the U.S. Credit
Agreement) or the Loan Documents to which it is a
AMENDMENT NO. 1
- 5 -
party, (c) the validity or enforceability of any of the Basic Documents
or the Loan Documents, (d) the rights and remedies of any member of the
Lender Group, the U.S. Agent and the Administrative Agent under any of
the Basic Documents or the Loan Documents, as the case may be, or (e)
the timely payment of the principal of or interest on the Loans
(including Swingline Loans), Letter of Credit Reimbursement Obligations,
Forest's obligations under the Forest Guarantee or U.S. Credit Agreement
Obligations or other amounts payable in connection therewith.
"PROMARK DEBENTURE" shall mean the Demand Debenture and
Negative Pledge dated July 17, 1996 as the same has been amended,
including as amended by the Third Security Confirmation, Amendment and
Supplemental Debenture Agreement dated as of August 19, 1997, of ProMark
in the principal amount of C$165,000,000 payable to the Company and
assigned to the Administrative Agent and its successors and assigns, as
the same shall be amended, modified and supplemented in accordance with
Section 11.21 hereof and in effect from time to time.
"SECURITY DOCUMENTS" shall mean collectively, the Underlying
Security Documents, the Company Debenture, the deposit agreement in
respect thereof, the Assignment of Payments, the Assignment of Security,
the Consent and Agreement, the Canadian Guarantee, the promissory notes
issued by the Borrowers under the Canadian Forest Credit Agreement,
including the Notes, Swingline Notes as defined in the Canadian Forest
Credit Agreement, and any other security that is now or is hereafter
granted or held with regard to the Company's obligations hereunder or
the Relevant Parties' obligations under the Underlying Loan Documents
and all amendments, modifications, additions to, renewals of and
substitutions and replacements for any of the foregoing made in
accordance with Section 11.21 hereof and all registrations filed with
respect to the Liens created pursuant to such documents and agreements
and without limiting the generality of the foregoing includes the
foregoing security and other documents as confirmed and amended from
time to time including as amended by the Third Security Confirmation,
Amendment and Supplemental Debenture Agreement dated as of August 19,
1997.
"UNDERLYING SECURITY DOCUMENTS" shall mean, collectively, the
Canadian Forest Debenture and the deposit agreement in respect thereof,
the ProMark Debenture and the deposit agreement in respect thereof, the
Forest Guarantee, Canadian Guarantee, the Forest Debenture and the
deposit agreement in respect thereof, the 3189503 Guarantee and Pledge
Agreement, all instruments granting a Lien on any Property of the
Borrower or the Subsidiary Borrowers to the Company and all
registrations with respect to the Liens created by that security.
"USAGE RATIO" shall mean as of any date the ratio of (a) the
aggregate principal amount of all Loans, Swingline Loans, Letter of
Credit Liabilities and Bankers' Acceptance Liabilities outstanding on
such date PLUS the aggregate principal amount of the U.S. Credit
Agreement Obligations pursuant to the U.S. Credit Agreement outstanding
on such date to (b) the lesser of the Borrowing Base or the Combined
Commitments on such date.
AMENDMENT NO. 1
- 6 -
2.04 The reference in Section 2.01(d) of the Second Amended
and Restated Credit Agreement to "C$80,000,000" is amended to read
"C$165,000,000".
2.05. The definitions of "DETERMINATION PERIOD", "INDEPENDENT
PETROLEUM ENGINEER", "PROVED RESERVES" and "NET BACK POOL REPORT" in
Section 1 of the Second Amended and Restated Credit Agreement shall be
amended by changing the words "Reserve Evaluation Report" to "Borrowing
Base Report" wherever they appear.
2.06. Section 1 of the Second Amended and Restated Credit
Agreement shall be amended by deleting the existing Section 1.03 and
inserting a new Section 1.03 as follows:
"1.03 BORROWING BASE.
(a) BORROWING BASE REPORTS. Canadian Forest and Forest have
furnished to the U.S. Agent and the Lenders updated Borrowing Base
Reports dated January 1, 1997. On or before each Report Delivery Date,
Canadian Forest and Forest shall furnish to the U.S. Agent, the
Administrative Agent and the Lenders updated Borrowing Base Reports.
(b) BORROWING BASE. During the period commencing on the date
hereof and ending on such date the first redetermination of the
Borrowing Base becomes effective as provided below in this Section
1.03(b), the Borrowing Base shall be $130,000,000 (subject to any
adjustments and redeterminations provided for by Sections 1.03(c),
1.03(d), 1.03(e) and 2.11(f) hereof) which amount has been determined on
the basis of the Borrowing Base Reports referred to in the first
sentence of Section 1.03(a) hereof (with such adjustments to the rates,
factors, values, estimates, assumptions and computations set forth in
such Borrowing Base Reports as are acceptable to the Combined Majority
Lenders). As promptly as reasonably practicable after its receipt of
the Borrowing Base Reports furnished to it pursuant to the second
sentence of Section 1.03(a) hereof, the U.S. Agent (in consultation with
the Combined Majority Lenders) shall endeavor to redetermine the
Borrowing Base as an amount in Dollars on the basis of such Borrowing
Base Reports in the manner provided in this clause (b), notify the
Lender Group of such redetermination and, if such redetermination is
approved by all of the Lender Group (in the case of an increase in the
Borrowing Base) or by the Combined Majority Lenders (in the case of (i)
a decrease in the Borrowing Base or (ii) no change in the Borrowing
Base), as applicable, notify the Company and Forest of the Borrowing
Base as an amount in Dollars as so redetermined and such redetermined
Borrowing Base shall become effective on the Determination Date next
following each Report Delivery Date (or, if later, on the date notified
by the U.S. Agent to the Company and Forest) and shall remain effective
until again redetermined as provided in this Section 1.03(b) (subject to
any adjustments and redeterminations provided for by Sections 1.03(c),
1.03(d) and 1.03(e) hereof, reductions pursuant to Section 2.11(e) and
(f) hereof or additions pursuant to Section 2.11(a) hereof). The
determination by the U.S. Agent and the Lender Group or the Combined
Majority Lenders, as the case may be, of the Borrowing Base for any
Determination Period shall be made on the basis of parameters which may
include the Present Value of Reserves attributable to Hydrocarbon
Properties as set forth in the applicable Borrowing Base Report for such
Determination Period, subject, however, to such adjustments as
AMENDMENT NO. 1
- 7 -
the U.S. Agent, with the concurrence of the Lender Group or the Combined
Majority Lenders, as the case may be, may make in its and their sole
discretion to the rates, factors, values, estimates, assumptions and
computations set forth in such Borrowing Base Report and any other
relevant information or factors, including without limitation, any
additional Indebtedness or other obligations that may be incurred by
Forest and its Subsidiaries that the Combined Majority Lenders may deem
appropriate.
As used herein, "BORROWING BASE" means the amount specified in
the first sentence of this Section 1.03(b) as determined from time to
time as provided in the second sentence of Section 1.03(b) and subject
to adjustments, redeterminations and principles provided in Sections
1.03(c), 1.03(d), 1.03(e) and 2.11 hereof.
(c) MATERIAL CHANGE. The Company agrees to notify the
Administrative Agent and the U.S. Agent promptly of any material change
of which the Company, Forest, Canadian Forest or any of their respective
Restricted Subsidiaries is aware which reduces or may result in a
reduction of the Borrowing Base by more than 10%. Promptly upon receipt
of such notice, the U.S. Agent (in consultation with the Combined
Majority Lenders) shall endeavor to adjust the Borrowing Base pursuant
to the procedures set forth in Section 1.03(b) hereof.
(d) REDETERMINATION. If so requested by the Majority Lenders
or the Majority Banks under, and as defined in, the U.S. Credit
Agreement, or Forest at any time, the U.S. Agent shall, as promptly as
reasonably practicable after the receipt of such request, endeavor to
redetermine (in consultation with the Lender Group or the Combined
Majority Lenders, as applicable) the Borrowing Base as then in effect on
the basis of the then most recent applicable Borrowing Base Reports
(subject, however, to such additional adjustments to the rates, factors,
values, estimates, assumptions and computations as set forth therein as
the U.S. Agent, with the concurrence of the Combined Majority Lenders,
may determine to be appropriate) as provided in Section 1.03(b) hereof.
As promptly as reasonably practical following its redetermination of the
Borrowing Base, the U.S. Agent shall notify the Lender Group of such
redetermination and, if such redetermination is approved by all of the
Lender Group (in the case of (i) an increase in the Borrowing Base or
(ii) no change in the Borrowing Base) or by the Combined Majority Lender
(in the case of a decrease in the Borrowing Base), as applicable, notify
the Company and Forest of the Borrowing Base as so redetermined and such
redetermined Borrowing Base shall become effective immediately upon
delivery to the Company and Forest of such notice of redetermination.
(e) DETERMINATIONS, ETC. All determinations and
redeterminations and adjustments by the U.S. Agent provided for above in
this Section 1.03 or in the definition of "Present Value of Reserves" in
Section 1.01 (and any determinations and decisions by the Combined
Majority Lenders in connection therewith, including any thereof
approving or disapproving a proposed redetermination or redetermination
by the U.S. Agent or effecting any adjustment to any element included in
a Borrowing Base Report or the determination or redetermination of the
Borrowing Base) shall be made on a reasonable basis, in good faith and
in a manner reasonably consistent with the basis on which the initial
Borrowing Base was determined
AMENDMENT NO. 1
- 8 -
to be acceptable to the Lender Group (but after giving effect to changes
in facts and circumstances occurring after the date of such initial
determination including, but not limited to, reserves and production,
operating expenses and economic assumptions with respect to price of
hydrocarbons and inflation), and any such determination, redetermination
or adjustment shall consider any other relevant information or factors,
including without limitation, any additional Indebtedness or other
obligations that may be incurred by Forest and its Subsidiaries that the
Combined Majority Lenders may deem appropriate, PROVIDED that no
Hydrocarbon Properties acquired by any Subsidiary of Forest after the
date hereof shall be included in the calculation of the Borrowing Base
unless such Subsidiary is a Subsidiary Guarantor under the U.S. Credit
Agreement or is a Subsidiary Borrower or otherwise liable as a surety
under the Canadian Forest Credit Agreement.
(f) XXXXXX XXXX. The Company and the Lenders agree that the
sale of the Forest Pledged Properties from Canadian Forest to Forest
pursuant to the Forest Purchase Agreement, and the subjecting of such
Forest Pledged Properties to the Forest Debenture, shall not result in a
redetermination or adjustment of the Borrowing Base, and that such
Forest Pledged Properties shall continue to be included in the Borrowing
Base (so long as they are owned by Forest and are not otherwise
subjected to any Lien (other than the Lien of the Forest Debenture) by
Forest) to the same extent as if such sale had not occurred."
2.07. Section 2.01 of the Second Amended and Restated Credit
Agreement is amended by (i) deleting the existing paragraphs (a) and (d)
and inserting a new paragraph (a) as follows:
"(a) Each Lender severally agrees, in accordance with the
terms and conditions of this Agreement, to make one or more loans to the
Company in Canadian Dollars or U.S. Dollars during the period from and
including the Closing Date to and including the Commitment Termination
Date, in an aggregate amount up to but not exceeding the least of (x)
the Commitment of such Lender and (y) an amount equal to such Lender's
Commitment Percentage multiplied by the then effective Allocated
Canadian Borrowing Base determined pursuant to the immediately preceding
Borrowing Base Reports; PROVIDED that (i) in no event shall the
aggregate principal amount of all Loans (including all Swingline Loans)
(with the Principal Amount of U.S. Dollar Loans expressed as an
Equivalent Amount in Canadian Dollars), together with the aggregate
amount of all Letter of Credit Liabilities (with the Letter of Credit
Liabilities in U.S. dollars expressed in an Equivalent Amount in
Canadian Dollar) and all Bankers' Acceptance Liabilities of the Company,
exceed the lesser of (x) the aggregate amount of the Commitments as in
effect from time to time, and (y) the then effective Allocated Canadian
Borrowing Base determined pursuant to Section 2.12 hereof and the
immediately preceding Borrowing Base Reports and (ii) the Company may
not borrow Loans, obtain Letters of Credit or Bankers' Acceptances under
this Agreement at any time while a Borrowing Base Deficiency exists.
The aggregate of the Commitments of the Lenders on the date hereof is
C$165,000,000 or the Equivalent Amount in U.S. Dollars."; and
(ii) relettering clause "(e)" therein to be clause "(d)"."
AMENDMENT NO. 1
- 9 -
2.08. Section 2 of the Second Amended and Restated Credit
Agreement is further amended by:
(i) deleting the existing Section 2.02 and inserting a new
Section 2.02 as follows:
"2.02 BORROWINGS. The Company shall give the
Administrative Agent and the U.S. Agent (which shall promptly notify the
Lenders) notice of each borrowing hereunder as provided in Section 4.06
hereof. Not later than 1:00 p.m. Toronto time on the date specified for
each borrowing hereunder (other than Swingline Loans), each Lender shall
make available the amount of the Loan or Loans to be made by it on such
date to the Administrative Agent, at the Administrative Agent's account
for the Currency in which such Loan is denominated that is maintained by
the Administrative Agent with Chase Canada at the Principal Office, in
immediately available funds, for account of the Company. The amount so
received by the Administrative Agent shall, subject to the terms and
conditions of this Agreement, be made available to the Company by either
depositing the same, in immediately available funds, in an account of
the Company and maintained with Chase Canada at the Principal Office or
by transferring such funds to an account designated by the Company in
writing. At the time of each such notice of borrowing hereunder the
Company shall deliver a certificate of the Chief Financial Officer, the
Treasurer or an Assistant Treasurer of the Company which certificate
shall indicate the Usage Ratio on such date, of Forest and its
Subsidiaries after giving effect to such borrowing and shall show, in
reasonable detail, the calculations used to derive such Usage Ratio.
Notwithstanding any provision of this Agreement to the contrary,
Canadian Prime Loans, BA Loans and Swingline Loans may only be
denominated in Canadian Dollars and U.S. Base Rate Loans and Eurodollar
Loans may only be denominated in U.S. Dollars."; and
(ii) deleting the existing first paragraph of Section 2.03 and
replacing it with the following:
"2.03 LETTERS OF CREDIT. Subject to the terms and conditions
of this Agreement, the Commitments may be utilized, upon the request of
the Company, in addition to the Loans provided for by Section 2.01
hereof and the issuance of Bankers' Acceptances provided for by Section
2.04 hereof, by the issuance by the Issuing Bank of letters of credit
(collectively, "LETTERS OF CREDIT") in Canadian Dollars or U.S. Dollars
for account of the Company, PROVIDED that in no event shall (i) the
aggregate amount of all Letter of Credit Liabilities, together with the
aggregate Principal Amount of the Loans (including all Swingline Loans)
and the aggregate amount of all Bankers' Acceptance Liabilities (with
the amounts of any Loans or Letter of Credit Liabilities outstanding in
U.S. Dollars expressed as an Equivalent Amount in Canadian Dollars),
exceed the lesser of (x) the aggregate amount of the Commitments as in
effect from time to time, and (y) the then effective Allocated Canadian
Borrowing Base determined pursuant to Section 2.12 hereof and the
immediately preceding Borrowing Base Reports, (ii) the aggregate
outstanding amount of all Letter of Credit Liabilities exceed
C$15,000,000, (iii) the expiration date of any Letter of Credit extend
beyond the earlier of the Commitment Termination Date and the date 12
months
AMENDMENT NO. 1
- 10 -
following the issuance of such Letter of Credit and (iv) any Letter of
Credit require payment against a conforming draft to be made thereunder
on the same Business Day on which that draft is presented, if
presentation is made after 1:00 p.m., Toronto time. Whenever the
Company is required to furnish a notice to the Administrative Agent
pursuant to the following additional provisions of this Section 2.03, it
shall give a copy of such notice to the U.S. Agent. The following
additional provisions shall apply to Letters of Credit;";
(iii) deleting the existing first paragraph of Section 2.04 and
replacing it with the following:
"2.04 BANKERS' ACCEPTANCES. Subject to the terms and
conditions of this Agreement, the Commitments may be utilized, upon the
request of the Company, in addition to the Loans provided for by Section
2.01(a) hereof and the issuance of Letters of Credit provided for by
Section 2.03 hereof, for the acceptance by the Lenders of bankers'
acceptances (collectively, "BANKERS' ACCEPTANCES") issued by the
Company, PROVIDED that in no event shall (i) the aggregate amount of all
Bankers' Acceptance Liabilities, together with the aggregate Principal
Amount of the Loans (including all Swingline Loans) and the aggregate
amount of all Letter of Credit Liabilities (with amounts of any Loans or
Letter of Credit Liabilities outstanding in U.S. Dollars expressed as an
Equivalent Amount in Canadian Dollars) exceed the lesser of (A) the
aggregate of the Commitments and (B) the then effective Allocated
Canadian Borrowing Base determined pursuant to Section 2.12 hereof and
the immediately preceding Borrowing Base Reports and (ii) any Bankers'
Acceptances have maturities of less than 30 days or more than 180 days
from the Acceptance Date (and shall in no event mature on a date after
the Commitment Termination Date). Whenever the Company is required to
furnish a notice to the Administrative Agent pursuant to the following
additional provisions of this Section 2.04, it shall give a copy of such
notice to the U.S. Agent. The following additional provisions shall
apply to Bankers' Acceptances:"; and
(iv) deleting the existing Section 2.05 and inserting a new
Section 2.05 as follows:
"2.05 SWINGLINE LOANS. (a) Subject to the terms and
conditions of this Agreement, BOM agrees to make loans ("SWINGLINE
LOANS") to the Company from time to time prior to the Commitment
Termination Date in an aggregate principal amount at any time
outstanding that will not result in (i) the aggregate Principal Amount
of outstanding Swingline Loans exceeding C$5,000,000 or (ii) the
aggregate Principal Amount of all Loans including all Swingline Loans
(with the Principal Amount of U.S. Dollar Loans expressed as the
Equivalent Amount in Canadian Dollars), together with the aggregate
amount of all Letter of Credit Liabilities (with the Letter of Credit
Liabilities in U.S. Dollars expressed as the Equivalent Amount in
Canadian Dollars) and all Bankers' Acceptance Liabilities at any time
exceeding the lesser of (x) the aggregate amount of the Commitments and
(y) the then effective Allocated Canadian Borrowing Base determined
pursuant to Section 2.12 hereof. All Swingline Loans shall be
denominated in Canadian Dollars. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Company may
borrow, prepay and reborrow Swingline
AMENDMENT NO. 1
- 11 -
Loans. Swingline Loans shall constitute Loans hereunder.
(b) In order to request a Swingline Loan, the Company shall
notify BOM and the U.S. Agent of such request by telephone (confirmed by
telecopy), not later than 2:00 p.m., Calgary time (or 4:00 p.m. Calgary
time in the case of borrowings to satisfy outstandings under the BOM
Agreement), on the day of a proposed Swingline Loan. Notwithstanding
the foregoing, in the event that at any time BOM makes demand for
payment of any amounts to which it is entitled under the BOM Agreement
and such amounts are not paid by the close of business on the date of
demand, the Company shall be deemed to have notified BOM of a request
for a Swingline Loan in an amount equal to the lesser of (i) C$5,000,000
less the aggregate Principal Amount of any outstanding Swingline Loans
and (ii) the amounts demanded under the BOM Agreement. Each such notice
provided by the Company by telephone request shall be irrevocable and
shall specify the requested date (which shall be a Business Day) and
amount of the requested Swingline Loan. BOM will promptly advise the
Administrative Agent and the U.S. Agent of any such notice received from
the Company and of any such notice deemed to be provided by the Company.
BOM shall make each Swingline Loan available to the Company by means of
a credit to the general deposit account no. 1212-176 of the Company at
the XXX Xxxx Xxxxxx Xxxxxxx, Xxxxxxx by 2:30 p.m., Calgary time, on the
requested date of such Swingline Loan, or in the case of a deemed
notice, on or before the next Business Day following the date BOM
provides the demand for payment.
(c) On each day during the period commencing with the making
by BOM of any Swingline Loan and until such Swingline Loan shall have
been repaid, the Commitment of each Lender shall be deemed to be
utilized for all purposes of this Agreement in an amount equal to such
Lender's Commitment Percentage of the then outstanding aggregate
Principal Amount of such Swingline Loan. Each Lender (other than BOM)
agrees that, upon the making of any Swingline Loan hereunder, it shall
automatically acquire a participation in the BOM's rights under such
Swingline Loan in an amount equal to such Lender's Commitment Percentage
of the then outstanding aggregate Principal Amount of such Swingline
Loan. BOM shall promptly advise the Administrative Agent and the U.S.
Agent of each Swingline Loan made by BOM and the Administrative Agent
shall promptly advise each of the Lenders of each of those Swingline
Loans being made. In furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees, upon receipt of notice from the
Administrative Agent that a Swingline Loan has been made, to pay to the
Administrative Agent, for the account of BOM, such Lender's Commitment
Percentage of such Swingline Loan or Loans. Each Lender acknowledges
and agrees that its obligation to acquire participations in, and make
payments for, Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever.
Each Lender shall comply with its obligation under this paragraph by
wire transfer of immediately available funds, in the same manner as
provided in Section 2.02 with respect to Loans made by such Lender (and
Section 2.02 shall apply, MUTATIS MUTANDIS, to the payment obligations
of the Lenders), and the Administrative Agent shall promptly pay to BOM
the amounts so received by it from the Lenders. The purchase
AMENDMENT NO. 1
- 12 -
of participations in a Swingline Loan pursuant to this paragraph shall
not relieve the Company of any default in the payment thereof."; and
(v) deleting the existing Section 2.07 and inserting a new
Section 2.07 as follows:
"2.07 COMMITMENT FEE. The Company shall pay to the
Administrative Agent for account of each Lender a commitment fee for
each day at a rate per annum equal to the Applicable Commitment Fee Rate
TIMES such Lender's PRO RATA share (based on its respective Commitment)
of the Allocated Canadian Borrowing Base LESS the aggregate principal
amount of all Loans, Bankers' Acceptances and Letter of Credit
Liabilities (collectively, such difference for all of the Lenders being
the "AVAILABLE BORROWING AMOUNT") (with any amounts outstanding in U.S.
Dollars being expressed as an Equivalent Amount in Canadian Dollars)
outstanding on such day for the period from and including the date of
Amendment No. 1 to but not including the earlier of the date such
Lender's Commitment is terminated and the Commitment Termination Date.
Accrued Commitment Fees shall be payable on each Quarterly Date and on
the earlier of the date the Commitments are terminated and the
Commitment Termination Date.".
2.09. Section 2.09 of the Second Amended and Restated
Credit Agreement shall be amended by deleting the existing paragraph (a)
and inserting a new paragraph (a) as follows:
"(a) The Loans made by each Lender (other than Swingline
Loans) to the Company shall be evidenced by the promissory note of the
Company dated August 19, 1997, payable to such Lender in a principal
amount equal to the amount of its Commitment.".
2.10. Section 2.10 of the Second Amended and Restated
Credit Agreement shall be amended by inserting a new sentence at the end
of Section 2.10 as follows:
"Whenever the Company is required to furnish a notice to the
Administrative Agent pursuant to this Section 2.10, it shall give a copy
of such notice to the U.S. Agent.".
2.11. Section 2.11 of the Second Amended and Restated Credit
Agreement is amended by:
(i) deleting the existing paragraph (a) and inserting a new
paragraph (a) as follows:
"(a) BORROWING BASE. The U.S. Agent shall notify the Company
and Forest (in a "DEFICIENCY NOTICE") any time the Borrowing Base as
then in effect is less than the sum of (i) the aggregate principal
amount of the Loans, Swingline Loans, Bankers' Acceptance Liabilities
and Letter of Credit Liabilities outstanding at such time and (ii) the
aggregate principal amount of the U.S. Credit Agreement Obligations
outstanding at such time (the amount of such difference being called
herein the "BORROWING BASE DEFICIENCY") and within 30 days after the
date of the Deficiency Notice, the Company shall notify the U.S. Agent
and the Administrative Agent of the
AMENDMENT NO. 1
- 13 -
Company's and Forest's intentions with respect to compliance with the
procedures set forth in this Section 2.11(a). As specified in such
notice from the Company, the Company shall (within 90 days after the
date of the Deficiency Notice) prepay, in accordance with Section 3.02
of the Intercreditor Agreement or, provide cover in accordance with
Section 2.11(h) of this Agreement, the aggregate principal amount of all
Loans (including Swingline Loans), Bankers' Acceptance Liabilities and
Letter of Credit Liabilities outstanding at such time, in an amount
sufficient to eliminate such Borrowing Base Deficiency.";
(ii) by deleting the existing paragraph (d) and inserting a
new paragraph (d) as follows:
"(d) EXCESS RESULTING FROM EXCHANGE RATE CHANGE.
(i) Subject to Section 2.11(d)(ii), any time that, following one
or more fluctuations in the exchange rate of the U.S. Dollar against the
Canadian Dollar, the sum of the Equivalent Amount in Canadian Dollars of
the aggregate Principal Amount of Loans and Letter of Credit Liabilities
outstanding at such time denominated in U.S. Dollars PLUS the aggregate
Principal Amount of Canadian Dollar denominated Loans, Letter of Credit
Liabilities and Bankers' Acceptance Liabilities outstanding at such time
(the amount of such sum being called herein the "AGGREGATE BORROWINGS")
EXCEEDS by an amount equal to or in excess of 1% of the lesser of (x) the
aggregate amount of the Commitments of the Lenders on such date and (y) the
then effective Allocated Canadian Borrowing Base or the Equivalent Amount
in Canadian Dollars determined pursuant to Section 2.12 hereof and the
immediately preceding Borrowing Base Reports, the Company shall promptly
after receipt of notice from the Administrative Agent and, in any case,
within 10 days after receipt of such notice, either (A) prepay the Loans
(except BA Loans) (and/or provide cover for the Letter of Credit
Liabilities, BA Loans and the Bankers' Acceptance Liabilities as specified
in clause (h) below) in an amount (such amount being called herein the
"EXCHANGE RATE DEFICIENCY") necessary to reduce the Aggregate Borrowings to
an amount equal to or less than the lesser of (x) the aggregate amount of
the Commitments of the Lenders on such date and (y) the then effective
Allocated Canadian Borrowing Base or the Equivalent Amount in Canadian
Dollars determined pursuant to Section 2.12 hereof and the immediately
preceding Borrowing Base Reports or (B) maintain or cause to be maintained
with the Administrative Agent deposits of Canadian Dollars in an amount
equal to the Exchange Rate Deficiency, such deposits to be maintained in
such form and upon such terms as are acceptable to the Administrative
Agent. Without in any way limiting the forgoing provisions, the
Administrative Agent shall on each Acceptance Date, Maturity Date,
Quarterly Date and on the date of any borrowing hereunder make any
necessary exchange rate calculations to determine whether any such excess
exists on such date and, if such excess exists on such date and if there is
an excess, it shall so notify the Company.
(ii) Notwithstanding Section 2.11(d)(i), the Combined Majority
Lenders shall be entitled, in their sole discretion, to require that the
Company, at the Company's
AMENDMENT NO. 1
- 14 -
option, (A) make the payments or prepayments or maintain the deposits
required to be maintained under Section 2.11(d)(i) or (B) fully hedge,
to the reasonable satisfaction of the Combined Majority Lenders, the
Exchange Rate Deficiency and assign the benefit of all hedging contracts
to the Administrative Agent, for the benefit of the Lender Group, in any
case where an Exchange Rate Deficiency exists."
(iii) deleting the existing paragraph (e) and inserting a new
paragraph (e) as follows:
"(e) CASUALTY EVENTS. Upon the date 30 days following the receipt
by Canadian Forest or any of the Subsidiary Borrowers incorporated in Canada
(or Forest, in the case of the Forest Pledged Properties) of the proceeds of
insurance, condemnation award or other compensation in respect of any
Casualty Event affecting any Hydrocarbon Property other than Unrestricted
Properties of Canadian Forest or any Subsidiary Borrower incorporated in
Canada or assets used in connection with the gas marketing business of any of
the Subsidiary Borrowers incorporated in Canada (or Forest, in the case of
the Forest Pledged Properties) the Company shall prepay the Loans (and/or
provide cover for Letter of Credit and Bankers' Acceptance Liabilities as
specified in clause (h) below), and if such Casualty Event shall result in
the receipt by the Company or any of the Subsidiary Borrowers incorporated in
Canada (or Forest, in the case of the Forest Pledged Properties) of Net
Available Proceeds in excess of $2,500,000 or the Equivalent Amount in
Canadian Dollars, the Combined Majority Lenders, in their sole discretion
based on their review of such Casualty Event, may reduce the Borrowing Base
in an aggregate amount not in excess of 100% of the Net Available Proceeds of
such Casualty Event not theretofore applied to the repair or replacement of
such Hydrocarbon Property, or such lesser amount as is specified in a written
notice from the Combined Majority Lenders, such prepayment and reduction to
be effected in each case in the manner and to the extent specified in clause
(g) of this Section 2.11. Nothing in this clause (e) shall be deemed to
limit any obligation of the Company pursuant to any of the Security Documents
to remit to a collateral or similar account maintained by the Administrative
Agent pursuant to any of the Security Documents the proceeds of insurance,
condemnation award or other compensation received in respect of any Casualty
Event";
(iv) deleting the existing paragraph (f) and inserting a new
paragraph (f) as follows:
"(f) SALE OF ASSETS. Without limiting the obligation of the
Company to obtain consent of the Combined Majority Lenders pursuant to
Section 8.05 hereof to any Disposition not otherwise permitted hereunder, no
later than five Business Days prior to the occurrence of any Disposition, the
Company will cause Canadian Forest to deliver to the Lender Group a
statement, certified by the chief financial officer or treasurer of such
company, in form and detail satisfactory to the Administrative Agent, of the
amount of the Net Available Proceeds of such Disposition and, if the Net
Available Proceeds of such Disposition together with the aggregate of all
other Dispositions during the current Determination Period is in excess of
$5,000,000 or the Equivalent Amount in Canadian Dollars, the Combined
Majority Lenders, based on their review
AMENDMENT NO. 1
- 15 -
of the statement referred to in this Section 2.11(f) may, in their sole
discretion, reduce the Borrowing Base in an aggregate amount not in excess of
100% of the Net Available Proceeds of such Disposition, or such lesser amount
as is specified in a written notice from the Combined Majority Lenders. If a
Borrowing Base Deficiency results from such reduction, then the Company
shall, notwithstanding Section 2.11(a) to the contrary, immediately prepay
the Loans (including Swingline Loans) (and/or provide cover for Letter of
Credit and Bankers' Acceptance Liabilities) with the Net Available Proceeds
to cure such deficiency. Notwithstanding the foregoing, the Company shall
not be required to prepay the Loans (including Swingline Loans)(and/or
provide cover for the Letter of Credit and Bankers' Acceptance Liabilities
pursuant to Section 2.11(h) hereof), and the Borrowing Base shall not be
subject to automatic reduction upon any sale of Property by Canadian Forest
or any Subsidiary Borrower or sale of any of the Forest Pledged Properties in
the case of Forest permitted pursuant to Section 8.05 of the Canadian Forest
Credit Agreement."; and
(v) deleting the existing paragraph (g) and inserting a new
paragraph (g) as follows:
"(g) APPLICATION. Prepayments and reductions of the Borrowing Base
described in the above clauses of this Section 2.11 shall be effected as
follows: the Borrowing Base shall be automatically reduced by an amount equal
to the amount specified in such clauses and to the extent that, after giving
effect to such reduction, the aggregate Principal Amount of the Loans,
together with the aggregate amount of all Letter of Credit Liabilities and
Bankers' Acceptances (with the amount of Loans and the Letter of Credit
Liabilities in U.S. Dollars expressed as an Equivalent Amount in Canadian
Dollars), would exceed the then effective Allocated Canadian Borrowing Base
determined pursuant to Section 2.12 hereof and the immediately preceding
Borrowing Base Reports, the Company shall first, prepay the Loans (except BA
Loans) and second, provide cover for Letter of Credit Liabilities, BA Loans
and Bankers' Acceptance Liabilities as specified in clause (h) below, in an
aggregate amount equal to such excess. To the extent possible, any
prepayments required pursuant to this Section 2.11 shall be applied FIRST to
U.S. Base Rate Loans, SECOND to Canadian Prime Rate Loans and THIRD to
Eurodollar Loans."
2.12 A new Section 2.12 of the Second Amended and Restated Credit
Agreement shall be added as follows:
"Section 2.12 ALLOCATION OF BORROWING BASE.
(a) The Borrowing Base may be allocated between the Company under
this Agreement and Forest under the U.S. Credit Agreement. The Allocated
U.S. Borrowing Base in effect from time to time shall represent the maximum
amount of credit in the form of Loans and Letters of Credit (subject to the
aggregate Commitments and the other provisions of the U.S. Credit Agreement)
that the U.S Lenders will extend to Forest at any one time prior to the
"Commitment Termination Date" specified in the U.S. Credit Agreement. The
Allocated Canadian Borrowing Base in effect from time to time shall represent
the maximum amount of credit in the form of Loans, Letters of Credit and
Bankers' Acceptances (subject to the aggregate
AMENDMENT NO. 1
-16-
Commitments and the other provisions of this Agreement) that the Lenders will
extend to the Company at any one time prior to the Commitment Termination
Date. On the date of Amendment No. 1, the Allocated Canadian Borrowing Base
shall be $100,000,000, resulting in an initial Allocated U.S. Borrowing Base
of $30,000,000.
(b) The Company at any time shall have the right to request in
writing to the Administrative Agent, U.S. Agent and the Lender Group, in
their sole discretion, an increase in the Allocated Canadian Borrowing Base
and a corresponding decrease in the Allocated U.S. Borrowing Base; provided
that any such increase shall require the approval of all of the Lenders and
at no time shall the Allocated Canadian Borrowing Base exceed $100,000,000;
and provided further that the Company may not make a request for an increase
in the Allocated Canadian Borrowing Base more than four (4) times during any
twelve (12) month period. Within ten (10) Business Days of the receipt by
the Lenders of such request, the Lenders shall give written notice to the
Company, Forest and the U.S. Agent of their approval or disapproval of such
increase. If such increase is approved, each such Lender shall have its
share of the Allocated Canadian Borrowing Base increased by an amount equal
to its proportion of the Commitment Percentage. The revised Allocated U.S.
Borrowing Base and Allocated Canadian Borrowing Base shall become effective
upon the distribution by the U.S. Agent to the Company, Forest, the
Administrative Agent and the Lender Group of written notice thereof which
shall occur not later than three (3) Business Days after its receipt of the
notice of increase.
(c) Forest at any time shall have the right to request in writing
to the Administrative Agent, the U.S. Agent and the U.S. Lenders that such
U.S. Lenders, in their sole discretion, permit Forest to increase the
Allocated U.S. Borrowing Base and decrease the Allocated Canadian Borrowing
Base; provided that any such change shall require the approval of all of such
U.S. Lenders and at no time shall the Allocated U.S. Borrowing Base exceed
$100,000,000; and provided further that Forest may not make a request for an
increase in the Allocated U.S. Borrowing Base more than four (4) times during
any twelve (12) month period. Within ten (10) Business Days of the receipt by
such U.S. Lenders of such request, such U.S. Lenders shall give written
notice to the Company, Forest and the U.S. Agent of their approval or
disapproval of such change. The revised Allocated U.S. Borrowing Base and
Allocated Canadian Borrowing Base shall become effective upon the
distribution by the U.S. Agent to the Company, Forest, the Administrative
Agent and the Lender Group of written notice thereof which shall occur not
later than three (3) Business Days after its receipt of the notice of
increase.
(d) For purposes of this Agreement, the Allocated Canadian
Borrowing Base shall be expressed as the Equivalent Amount in Canadian
Dollars. The Equivalent Amount shall be calculated (i) on the date a
reallocation pursuant to this Section 2.12 between the Allocated U.S.
Borrowing Base and the Allocated Canadian Borrowing Base occurs, (ii) on each
Determination Date, or (iii) in any event, at ninety (90) day intervals
following the most recent Determination Date."
2.13. Section 4.01 of the Second Amended and Restated Credit
Agreement shall be amended by inserting a new paragraph (g) as follows:
AMENDMENT NO. 1
-17-
"(g) The Company shall give the U.S. Agent notice of each payment
hereunder within 3 Business Days of the relevant payment."
2.14. The introduction to Section 8 of the Second Amended and
Restated Credit Agreement shall be amended by replacing the word "Lender"
with the words "Lender Group" on the second line.
2.15. Section 8.10 of the Second Amended and Restated Credit
Agreement shall be amended in its entirety as follows:
"8.10 INTEREST COVERAGE RATIO.
The Company will not permit the Interest Coverage Ratio for any
period of four consecutive fiscal quarters (treated for this purpose as a
single accounting period) following March 31, 1997, to be less than 2.0:1.0
as of the end of any fiscal quarter of the Canadian Forest."
2.16. Section 8.11 of the Second Amended and Restated Credit
Agreement shall be amended in its entirety as follows:
"8.11 WORKING CAPITAL. The Company will not permit the current
assets of Forest and its Subsidiaries (determined on a consolidated basis in
accordance with GAAP) to be equal to or less than the current liabilities of
Forest and its Subsidiaries (so determined). For purposes hereof, the terms
"CURRENT ASSETS" and "CURRENT LIABILITIES" shall have the respective meanings
assigned to them by GAAP, PROVIDED that in any event there shall be (i)
included in current assets the aggregate amount of the unused Combined
Commitments (but only to the extent such unused Combined Commitments could
then be utilized as provided in Section 6.02 hereof and Section 7.02 of the
U.S. Credit Agreement), (ii) excluded from current liabilities all
Indebtedness hereunder PLUS all Indebtedness under, and as defined in, the
U.S. Credit Agreement PLUS all Indebtedness under, and as defined in, the
Canadian Forest Credit Agreement, (iii) excluded from current liabilities all
Production Payments (as defined in the U.S. Credit Agreement) and (iv)
excluded from current liabilities the current portion of any gas balancing
liabilities hereunder and under the U.S. Credit Agreement."
2.17. Section 11 of the Second Amended and Restated Credit
Agreement is amended by inserting a new Section 11.22 as follows:
"11.22 INTERCREDITOR AGREEMENT. (a) Reference is hereby made to
the Intercreditor Agreement, which provides for certain matters relating to
this Agreement and the U.S. Credit Agreement. To the extent of any conflict
between the terms of this Agreement and the terms of the Intercreditor
Agreement, the Intercreditor Agreement shall control. Each Lender hereby
authorizes the Administrative Agent to execute and deliver the Intercreditor
Agreement on its behalf and the execution and delivery by the Administrative
Agent of the Intercreditor
AMENDMENT NO. 1
-18-
Agreement on behalf of the Lenders is hereby ratified and confirmed by each
of the Lenders. Any Lender that becomes a party to this Agreement after the
date hereof agrees to be bound by the terms and provisions of the
Intercreditor Agreement.
(b) The Company acknowledges that certain financial institutions
including certain of the Lenders are providing financing to Forest. The
Company consents to the disclosure of information provided by the Company to
the Lenders to such other financial institutions. The Company also
acknowledges that the Lenders may enter into participation arrangements and
payment sharing understandings with such financial institutions and consents
to such arrangements and understandings. To the extent any such arrangements
or understandings give rise to any liability for any withholding tax payments
in connection with any payments made by Forest, the Company or any other
Obligor under either this Agreement or the U.S. Credit Agreement, then
(notwithstanding any provisions to the contrary set forth in this Agreement
or the U.S. Credit Agreement), Forest, pursuant to the U.S. Credit Agreement
has agreed to indemnify each of the applicable members of the Lender Group
and shall hold each of the applicable members of the Lender Group harmless
from and against any such liability; PROVIDED, HOWEVER, that each member of
the Lender Group (if so requested by the Company under this Agreement or
Forest under the U.S. Credit Agreement) will use good faith efforts to
accommodate any reasonable request by the Company or Forest in order to avoid
the need for, or reduce the amount of, such compensation so long as the
request will not, in the sole opinion of the applicable member of the Lender
Group, be disadvantageous to such member of the Lender Group.
Section 3. COMMITMENT FEE. Notwithstanding that the increase of
the Commitments contemplated by Section 2 hereof shall not become effective
until the satisfaction of the conditions precedent specified in Section 5
hereof, for purposes of calculating the amount of commitment fee payable
under Section 2.07 of the Second Amended and Restated Credit Agreement, the
Allocated Canadian Borrowing Base of the Lender shall be deemed to have been
so increased (and the Commitments of the New Lenders shall be deemed to have
become effective) immediately upon the execution of Amendment No. 1 by each
of the Lenders.
Section 4. REPRESENTATIONS AND WARRANTIES. The Company represents
and warrants to the Lenders that the representations and warranties set forth
in Section 7 of the Second Amended and Restated Credit Agreement are true and
complete on the date hereof (unless otherwise limited to an earlier date) as
if made on and as of the date hereof and as if each reference in said
Section 7 to "this Agreement" and "the Notes" included reference to this
Amendment No. 1.
Section 5. CONDITIONS PRECEDENT. As provided in Section 2 above,
the amendments to the Second Amended and Restated Credit Agreement set forth
in said Section 2 shall become effective, as of the date hereof, upon the
satisfaction of the following conditions precedent:
5.01. EXECUTION BY ALL PARTIES. This Amendment No. 1 shall have
been executed
AMENDMENT NO. 1
-19-
and delivered by each of the parties hereto.
5.02. NOTES AND INITIAL LOANS. The Company shall deliver for each
Bank whose Commitment is increasing (an "INCREASING LENDER"), a new
promissory note of the Company in substantially the form of Exhibit A to the
Second Amended and Restated Credit Agreement, dated the date hereof, payable
to such Bank in a principal amount equal to its Commitment (as increased
hereby) and otherwise duly completed and shall deliver for the New Lender a
promissory note of the Company in substantially the form of Exhibit A to the
Second Amended and Restated Credit Agreement, dated the date hereof, payable
to the order of such New Lender in a principal amount equal to its Commitment
and otherwise duly completed, and each of such promissory notes (a "NEW
NOTE") delivered to each Increasing Lender and the New Lender shall
constitute a "Note" under the Second Amended and Restated Credit Agreement as
amended hereby. In addition, the Company shall have borrowed from, and the
New Lender shall have made Loans to, the Company.
5.03. INTERCREDITOR AGREEMENT. The Intercreditor Agreement shall
have been executed and delivered by each of the parties thereto.
5.04. FOREST AMENDMENT AGREEMENT. The Amendment No. 2 to the U.S.
Credit Agreement shall have been executed and delivered by each of the
parties thereto.
5.05. OPINION OF COUNSEL TO THE COMPANY. An opinion of Xxxxxx
XxXxxxxx, Corporate Counsel to the Company, Xxxxxxx Xxxxx, special Canadian
counsel to the Company and Xxxxxx & Xxxxxx L.L.P., special New York counsel
to Forest shall have been delivered to the Administrative Agent.
5.06. NOTES. The Notes, duly completed and executed, delivered by
the party thereto.
5.07. OTHER DOCUMENTS. The Administrative Agent shall have
received such other documents, certificates and opinions as the
Administrative Agent or any Lender or special counsel to Chase Canada may
reasonably request including the Canadian Guarantee and Third Security
Confirmation, Amendment and Supplemental Debenture Agreement.
Section 6. MISCELLANEOUS. Except as herein provided, the Second
Amended and Restated Credit Agreement shall remain unchanged and in full
force and effect. This Amendment No. 1 may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
amendatory instrument and any of the parties hereto may execute this
Amendment No. 1 by signing any such counterpart. This Amendment No. 1 shall
be governed by, and construed in accordance with, the laws of the Province of
Alberta and the laws of Canada applicable therein.
AMENDMENT NO. 1
S-1
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 1 to be duly executed and delivered as of the day and year first
above written.
611852 SASKATCHEWAN LTD.
By /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Title: Vice President
Address for Notices:
611852 SASKATCHEWAN LTD.
c/o Canadian Forest Oil Ltd.
000, 000-Xxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Vice President-Finance
with a copy to:
Forest Oil Corporation
0000 Xxxxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Vice President and Treasurer
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
AMENDMENT NO. 1
S-2
LENDERS
THE CHASE MANHATTAN BANK OF CANADA
COMMITMENT
----------
C$45,000,000
By /s/ Xxxxxxxxx Xxxx
-----------------------------------
Title: Vice President
By /s/ X. XxXxxxxx
-----------------------------------
Title: Vice President
X-0
XXXXXXXXXX XXXXX XXXX XX XXXXXX
----------
C$40,000,000
By /s/ X.X. Xxxxx
-----------------------------------
Title: Senior Account Manager
S-4
COMMITMENT BANK OF MONTREAL
----------
C$40,000,000
By /s/ Xxxxxxx St. X. Xxxxxxx
-----------------------------------
Title: Director
S-5
COMMITMENT CREDIT LYONNAIS CANADA
----------
C$40,000,000
By /s/ X.X. Xxxxx Xxxxxxxxxxx By /s/ X.X. (Xxx) Xxxxxxxxx
---------------------------- -----------------------------
Title: Vice President Title: Manager, Corp. Banking
Lending Office:
Address for Notices:
The Stock Exchange Tower
000 - 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
XXXXXX X0X 0X0
Attention: First Vice President and Manager,
Western Region
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
S-6
THE CHASE MANHATTAN BANK OF CANADA
as Administrative Agent
By /s/ Xxxxxxxxx Xxxx
----------------------------------
Title: Vice President
By /s/ X. XxXxxxxx
----------------------------------
Title: Vice President
Address for Notices to
Chase Canada as Administrative Agent:
1 First Canadian Place
000 Xxxx Xxxxxx Xxxx
Xxxxx 0000, X.X. Xxx 000
Xxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Attention: Vice President Corporate Finance
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
with a copy to:
The Chase Manhattan Bank
One Chase Xxxxxxxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
SCHEDULE IV
APPLICABLE COMMITMENT FEE RATE
RANGE OF APPLICABLE COMMITMENT
-------- ----------------------
USAGE RATIO FEE RATE (BPS PER ANNUM)
----------- ------------------------
less than or equal to .330:1.00 30.0
greater than .330:1.00 but less than
or equal to 0.660:1.00 35.0
greater than .660:1.00 37.5
SCHEDULE V
APPLICABLE MARGIN
APPLICABLE MARGIN (BPS)
-----------------------
CANADIAN U.S. BASE EURODOLLAR
RANGE OF USAGE RATIO PRIME LOANS RATE LOANS LOANS BA FEE RATE
-------------------- ----------- ---------- ----------- -----------
less than or equal to .330:1.00 0.0 0.0 100.0 100.0
greater than .330:1.00 but less than
or equal to .660:1.00 25.0 25.0 125.0 125.0
greater than .660:1.00 0.0 50.0 50.0 150.0 150.0
