EXECUTION COPY
AMENDMENT XX. 0
XXXXXXXXX XX. 0 dated as of August 19, 1997 between FOREST OIL
CORPORATION, a corporation duly organized and validly existing under the laws
of the State of New York (the "COMPANY"); each of the Subsidiaries of the
Company that becomes a guarantor pursuant to Section 9.16 of the Second
Amended and Restated Credit Agreement (as defined below) (individually, a
"SUBSIDIARY GUARANTOR" and, collectively, the "SUBSIDIARY GUARANTORS" and,
together with the Company, the "OBLIGORS"); each of the lenders that is a
signatory hereto (individually, a "BANK" and, collectively, the "BANKS"); and
THE CHASE MANHATTAN BANK, a New York bank, as agent for the Banks (in such
capacity, together with its successors in such capacity, the "AGENT").
The Company, the Banks and the Agent are parties to a Second Amended
and Restated Credit Agreement dated as of January 31, 1997, as amended by
Amendment No. 1 and Waiver dated April 1, 1997 (as heretofore further
modified and supplemented and in effect on the date hereof, 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 Banks to the Company in an aggregate
principal or face amount not exceeding $100,000,000. Royal Bank of Canada
(the "NEW BANK") wishes to become a party to the Second Amended and Restated
Credit Agreement as a "Bank" thereunder, and Christiania Bank OG Kreditkasse
wishes to become the co-agent for the Banks under the Second Amended and
Restated Credit Agreement (the "CO-AGENT"), the Obligors, the Banks and the
Agent wish to increase the aggregate amount of Commitments under the Second
Amended and Restated Credit Agreement from $100,000,000 to $130,000,000, and
to amend the Second Amended and Restated Credit Agreement in certain
respects, and accordingly, the parties hereto hereby agree as follows:
Section 1. DEFINITIONS. Except as otherwise defined in this
Amendment No. 2, 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 Bank shall be deemed to be a "Bank" under and for all
purposes of the Second Amended and Restated Credit Agreement and each
reference therein to "Bank" shall be deemed to include the New Bank. The
Co-Agent shall be deemed to be the "Co-Agent" under and for all purposes of
the Second Amended and Restated Credit Agreement. 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
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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 2.11 hereof.
"ALLOCATED U.S. BORROWING BASE" shall mean an amount equal to the
Borrowing Base then in effect MINUS the Allocated Canadian Borrowing Base.
"AMENDMENT NO. 2" shall mean Amendment No. 2 dated as of August 19,
1997 to this Agreement.
"BORROWING BASE REPORTS" shall mean collectively, (i) Reserve
Evaluation Reports, (ii) Canadian Forest Reserve Evaluation Reports and (iii)
Canadian Net Back Pool Reports and "BORROWING BASE REPORT" shall mean any
thereof.
"CANADIAN AGENT" means The Chase Manhattan Bank of Canada, as
administrative agent under the Funding Credit Agreement.
"CANADIAN GUARANTEE" shall mean the Guarantee dated as of August 19,
1997 executed by the Company in favor of the Canadian Agent and the Canadian
Lenders party to the Funding Credit Agreement.
"CANADIAN FOREST RESERVE EVALUATION REPORT" shall mean the report
defined in the Funding Credit Agreement as the "Reserve Evaluation Report"
prepared for Canadian Forest.
"CANADIAN LENDERS" shall have the meaning ascribed thereto in the
Intercreditor Agreement.
"CANADIAN LOAN DOCUMENTS" shall mean have the meaning ascribed
thereto in the Intercreditor Agreement.
"CANADIAN NET BACK POOL REPORT" shall mean the report defined in the
Funding Credit Agreement as the "Net Back Pool Report".
"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.
"EQUIVALENT AMOUNT" shall have the meaning ascribed thereto in the
Funding
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Credit Agreement.
"FUNDING CREDIT AGREEMENT OBLIGATIONS" shall mean (i) the Loans
provided for in Section 2.01 of the Funding Credit Agreement, (ii) the
Swingline Loans provided for in Section 2.05 of the Funding Credit Agreement,
(iii) the Letter of Credit Liabilities under the Funding Credit Agreement and
(iv) the Bankers' Acceptance Liabilities under the Funding Credit Agreement.
"INTERCREDITOR AGREEMENT" shall mean the Intercreditor Agreement
dated as of August 19, 1997 between the Agent and the Canadian 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.
"USAGE RATIO" shall mean as of any date the ratio of (a) the
aggregate principal amount of all Loans and Letter of Credit Liabilities
outstanding on such date PLUS the aggregate principal amount of the Funding
Credit Agreement Obligations pursuant to the Funding Credit Agreement
outstanding on such date to (b) the lesser of the Borrowing Base or the
Combined Commitments on such date.
"3189503 PLEDGE AGREEMENT" shall mean the Pledge Agreement dated as
of August 19, 1997 between 3189503 and the Agent, as the same shall be
modified and supplemented and in effect from time to time.
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 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. 2, the percentage per annum set forth opposite
the range in such Schedule IV.
"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. 2, the percentage per
annum set forth opposite the range in such Schedule V, 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
repayment of a Loan or expiration of a Letter of Credit, as the case may be,
which results in the Usage Ratio shifting from one range to another but that
the "Applicable Margin" for any Eurodollar Loan outstanding prior to such
date shall remain the same until the end of the Interest Period for such
Eurodollar Loan.
"BASIC DOCUMENTS" shall mean, collectively, this Agreement, the
Notes, the Letter
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of Credit Documents, the Security Documents, the Intercreditor Agreement and
the Canadian Guarantee.
"COMMITMENT" shall mean, for each Bank, the obligation of such Bank
to make Loans in an aggregate principal amount up to but not exceeding (a) in
the case of a Bank that is a party to this Agreement as of the date of this
Amendment No. 2, the amount set opposite the name of such Bank on the
signature pages of this Amendment No. 2 under the caption "Commitment" or (b)
in the case of any other Bank, the aggregate amount of the Commitments of
other Banks acquired by it pursuant to Section 12.06(b) hereof (in each case,
as the same may be reduced from time to time pursuant to Section 2.04 hereof
or increased or reduced from time to time pursuant to said Section 12.06(b)).
"COMMITMENT TERMINATION DATE" shall mean August 19, 2001.
"FUNDING CREDIT AGREEMENT" shall mean the Second Amended and
Restated Credit Agreement dated as of April 1, 1997 among Funding Co., the
Canadian Lenders and the Canadian Agent, as amended by Amendment No. 1 dated
as of August 19, 1997 and the Intercreditor Agreement, and as the same may be
further modified, supplemented, amended and/or restated from time to time.
"FUTURE NET REVENUES" shall mean, 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 Funding
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 Funding
Credit Agreement on a consolidated basis for such period.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on
(a) the Property, business, operations, financial condition, prospects,
liabilities or capitalization of the Company and its Subsidiaries taken as a
whole, (b) the ability of any Obligor or Funding Co. to perform their
respective obligations under any of the Basic Documents or the Canadian Loan
Documents to which it is a party, (c) the validity or enforceability of any
of the Basic Documents or the Canadian Loan Documents, (d) the right and
remedies of any member of the Lender Group, the Canadian Agent and the Agent
under any of the Basic Documents or the Canadian Loan Documents, as the case
may be, or (e) the timely payment of the principal of or interest on the
Loans, Reimbursement Obligations or Funding Credit Agreement Obligations or
other amounts payable in connection therewith.
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"RESERVE EVALUATION REPORT" shall mean an unsuperceded report that
(a) is (i) prepared, in the case of the report required to be delivered by
the Company pursuant to Section 9.01(f) hereof in connection with the
Determination Date occurring on May 1 of each year, by the Independent
Petroleum Engineer on the basis of assumptions and projections which the
Company believes in good faith to be reasonable or, in the case of the report
required to be delivered by the Company pursuant to Section 9.01(f) hereof in
connection with each other Determination Date, by the Independent Petroleum
Engineer on the basis of the most recently delivered Reserve Evaluation
Report delivered in connection with the Determination Date occurring on May 1
of each year as adjusted for reserve additions and production from the date
of such report, each as acceptable to the Independent Petroleum Engineer and
(ii) satisfactory in form and substance to the Combined Majority Lenders
(including as to assumptions) and (b) is prepared on the basis of findings
and material data as of a date not more than 90 days prior to the effective
date of such report, (i) identifies the Hydrocarbon Properties covered
thereby, (ii) as to each of the Hydrocarbon Properties, sets forth (A) the
Proved Reserves attributable to such Hydrocarbon Property, (B) the total
amount of such Proved Reserves attributable to such Hydrocarbon Property
that, in the opinion of the preparer of such report, the Company and its
Restricted Subsidiaries have the right to produce for their own account in
the current and each succeeding calendar year, (C) a projection of the rate
of production and the Future Net Revenues of the Company and its Restricted
Subsidiaries (including as additional information the data and assumptions
used to determine such Future Net Revenues) from such Proved Reserves for the
current and each succeeding calendar year, (D) the quantity and type of
hydrocarbons recoverable from such Proved Reserves in the current and each
succeeding calendar year, (E) an estimate of the projected revenues and
expenses attributable to such Proved Reserves in the current and each
succeeding calendar year, and (F) any reports or evaluations prepared by the
Company regarding the expediency of any change in methods of treatment or
operation of all or any xxxxx drilled to produce any of such Proved Reserves
that are producing or capable of producing hydrocarbons, any new drilling or
development, any method of secondary recovery by repressuring or otherwise,
or any other action with respect to such Proved Reserves, the decision as to
which may increase or reduce the quantity of hydrocarbons ultimately
recoverable, or the rate of production thereof and (c) reconciles (i) the
total amount of Proved Reserves attributable to each Hydrocarbon Property and
(ii) any material changes in Operating Expenses or Capital Expenditures
contained in such Reserve Evaluation Report with the information contained in
the immediately preceding Reserve Evaluation Report, if any.
"SECURITY DOCUMENTS" shall mean, collectively, the Security
Agreement, the Pledge Agreement, the 3189503 Pledge Agreement, the Mortgages
and all Uniform Commercial Code financing statements required by this
Agreement, the Security Agreement, the Pledge Agreement or the Mortgages to
be filed with respect to the security interests in personal Property and
fixtures created pursuant to the Security Agreement, the Pledge Agreement or
the Mortgages.
2.04 The reference in Section 2.01(a) of the Second Amended and
Restated Credit Agreement to "$100,000,000" is amended to read "$130,000,000".
2.05. The definitions of "DETERMINATION DATE", "INDEPENDENT
PETROLEUM
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ENGINEER", "PROVED RESERVES" and "REPORT DELIVERY DATE" in Section 1 of the
Second Amended and Restated Credit Agreement and Sections 2.03 and 9.01(f) 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. The Company and Canadian Forest have
furnished to the Agent and the Lenders updated Borrowing Base Reports dated
January 1, 1997. On or before each Report Delivery Date, the Company and
Canadian Forest shall furnish to the 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
2.10(c) 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 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 Funding Co. of the Borrowing Base 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 Agent to the Company and Funding Co.) 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 2.10(b)
and (c) hereof or additions pursuant to Section 2.10(a) hereof). The
determination by the 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 the 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
AMENDMENT NO. 2
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information or factors, including without limitation, any additional
Indebtedness or other obligations that may be incurred by the Company 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 2.10 hereof.
(c) MATERIAL CHANGE. The Company agrees to notify the Agent
promptly of any material change of which the Company, Funding Co., 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 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 Banks or the
Majority Lenders under, and as defined in, the Funding Credit Agreement, or
the Company at any time, the 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 Agent, with the concurrence of
the Combined Majority Lenders, may determine to be appropriate) and any other
relevant information and factors, including, without limitation, any
additional Indebtedness or other obligations that have been or are reasonably
anticipated to be incurred by the Company and its Restricted Subsidiaries and
any Hydrocarbon Properties acquired by the Company and its Restricted
Subsidiaries which are not subject to any Lien other than Liens created
hereunder or under the Security Documents or Liens permitted by Section 9.06
hereof, that the Combined Majority Lenders may deem appropriate and as
otherwise provided in Section 1.03(b) hereof, PROVIDED that no Hydrocarbon
Properties acquired by any Subsidiary of the Company after the date hereof
shall be included in the calculation of the Borrowing Base unless such
Subsidiary is a Subsidiary Guarantor under this Agreement or is a Subsidiary
Borrower or otherwise liable as a surety under the Canadian Forest Credit
Agreement. As promptly as reasonably practical following its redetermination
of the Borrowing Base, the 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 Lenders (in the case of a
decrease in the Borrowing Base), as applicable, notify the Company and the
Funding Co. of the Borrowing Base as so redetermined and such redetermined
Borrowing Base shall become effective immediately upon delivery to the
Company and Funding Co. of such notice of redetermination.
(e) DETERMINATIONS, ETC. All determinations and redeterminations
and adjustments by the Agent provided for above in this Section 1.03 or in
the definition of "Present
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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 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
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 the Company and its Subsidiaries that the
Combined Majority Lenders may deem appropriate, PROVIDED that no Hydrocarbon
Properties acquired by any Subsidiary of the Company after the date hereof
shall be included in the calculation of the Borrowing Base unless such
Subsidiary is a Subsidiary Guarantor under this Agreement or is a Subsidiary
Borrower or otherwise liable as a surety under the Canadian Forest Credit
Agreement."
2.07. Section 2.01 of the Second Amended and Restated Credit
Agreement is amended by deleting the existing paragraph (a) and inserting a
new paragraph (a) as follows:
"(a) Each Bank severally agrees, in accordance with the terms and
conditions of this Agreement, to make one or more loans to the Company in
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 Bank and (y) an amount
equal to such Bank's Commitment Percentage multiplied by the then effective
Allocated U.S. 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, together with the aggregate amount
of all Letter of Credit Liabilities, exceed the least of (x) the aggregate
amount of the Commitments as in effect from time to time, and (y) the then
effective Allocated U.S. Borrowing Base determined pursuant to Section 2.11
hereof and the immediately preceding Borrowing Base Reports and (ii) the
Company may not borrow Loans or obtain Letters of Credit under this Agreement
at any time while a Borrowing Base Deficiency exists. The aggregate of the
Commitments of the Banks on the date hereof is $130,000,000."
2.08. Section 2 of the Second Amended and Restated Credit Agreement
is 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 Agent (which
shall promptly notify the Banks) notice of each borrowing hereunder as
provided in Section 4.05 hereof. Not later than 1:00 p.m. New York time on
the date specified for each borrowing
AMENDMENT NO. 2
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hereunder, each Bank shall make available the amount of the Loan or Loans to
be made by it on such date to the Agent, at an account specified by the Agent
maintained by the Agent with Chase, in immediately available funds, for
account of the Company. The amount so received by the Agent shall, subject
to the terms and conditions of this Agreement, be made available to the
Company by depositing the same, in immediately available funds, in an account
of the Company maintained with Chase in New York, New York, designated by the
Company. 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 the Company and its Subsidiaries after giving
effect to such borrowing and shall show, in reasonable detail, the
calculations used to derive such Usage Ratio.";
(ii) deleting the existing Section 2.03 and inserting a new Section
2.03 as follows:
"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(a) hereof, for
the issuance by the Issuing Bank of letters of credit (collectively, "LETTERS
OF CREDIT") for account of the Company and its Restricted Subsidiaries,
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, exceed the lesser of (A) the aggregate of the Commitments and (B) the
then effective Allocated U.S. Borrowing Base as determined pursuant to
Section 2.11 hereof and the immediately preceding Borrowing Base Reports,
(ii) the outstanding aggregate amount of all Letter of Credit Liabilities
exceed $10,000,000 and (iii) the expiration date of any Letter of Credit
extend beyond the earlier of the Commitment Termination Date and the date 12
months following the issuance of such Letter of Credit. The following
additional provisions shall apply to Letters of Credit:"; and
(iii) deleting the existing Section 2.05 and inserting a new
Section 2.05 as follows:
"2.05 COMMITMENT FEE. The Company shall pay to the Agent for
account of each Bank a commitment fee for each day at a rate per annum equal
to the Applicable Commitment Fee Rate TIMES such Bank's PRO RATA share (based
on its respective Commitment) of the Allocated U.S. Borrowing Base LESS the
aggregate principal amount of all Loans and Letter of Credit Liabilities
outstanding on such day for the period from and including the date of
Amendment No. 2 to but not including the earlier of the date such Bank'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 2.10 of the Second Amended and Restated Credit
Agreement is amended by:
(i) deleting the existing paragraph (a) and inserting a new
paragraph (a) as
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follows:
"(a) BORROWING BASE. The Agent shall notify the Company and Funding
Co. (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 and Letter
of Credit Liabilities outstanding at such time and (ii) the aggregate principal
amount of the Funding 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 Agent of the Company's and Funding Co.'s intentions with respect to
compliance with the procedures set forth in this Section 2.10(a). As specified
in such notice from the Company, the Company shall or shall cause Funding Co. to
(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 2.10(e) of this Agreement, the aggregate principal amount of all
Loans and Letter of Credit Liabilities outstanding at such time and the
aggregate principal amount of the Funding Credit Agreement Obligations
outstanding at such time, in an amount sufficient to eliminate such Borrowing
Base Deficiency.";
(ii) deleting the existing paragraph (b) and inserting a new
paragraph (b) as follows:
"(b) CASUALTY EVENTS. Upon the date 30 days following the receipt by
the Company or any of its Restricted Subsidiaries incorporated in the United
States 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 any Restricted Subsidiary, the Company shall prepay
the Loans (and/or provide cover for Letter of Credit Liabilities as specified in
clause (e) below), and if such Casualty Event shall result in the receipt by the
Company or any of its Restricted Subsidiaries incorporated in the United States
of Net Available Proceeds in excess of $2,500,000, 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 (d) of this Section 2.10. Nothing in this clause (b)
shall be deemed to limit any obligation of the Company and any of its Restricted
Subsidiaries incorporated in the United States pursuant to any of the Security
Documents to remit to a collateral or similar account (including, without
limitation, the Collateral Account) maintained by the Agent pursuant to any of
the Security Documents the proceeds of insurance, condemnation award or other
compensation received in respect of any Casualty Event";
(iii) deleting the existing paragraph (c) and inserting a new
paragraph (c) as follows:
"(c) SALE OF ASSETS. Without limiting the obligation of the Obligors
to obtain the
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consent of the Combined Majority Lenders pursuant to Section 9.05
hereof to any Disposition not otherwise permitted hereunder, no later than five
Business Days prior to the occurrence of any Disposition, the Company, on behalf
of the applicable Obligor will deliver to the Lender Group a statement,
certified by the chief financial officer or treasurer of the Company, in form
and detail satisfactory to the 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, the Combined Majority
Lenders, based on their review of the statement referred to in this
Section 2.10(c) 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 2.10(a) to the
contrary, immediately prepay the Loans (and/or provide cover for the Letter of
Credit Liabilities) with the Net Available Proceeds to cure such deficiency.
Notwithstanding the foregoing, the Company shall not be required to prepay the
Loans (and/or provide cover for the Letter of Credit Liabilities pursuant to
Section 2.10(e) hereof), and the Borrowing Base shall not be subject to
automatic reduction upon any sale of Property, other than any Hydrocarbon
Property, pursuant to Section 9.05 hereof."; and
(iv) deleting the existing paragraph (d) and inserting a new
paragraph (d) as follows:
"(d) APPLICATION. Prepayments and reductions of Commitments or the
Borrowing Base, as the case may be, described in the above clauses of this
Section 2.10 shall be effected as follows: the Commitments or the Borrowing
Base, as the case may be, 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, would exceed the
Commitments or the then effective Allocated U.S. Borrowing Base determined
pursuant to Section 2.11 hereof and the immediately preceding Borrowing Base
Reports, as applicable, the Company shall first, prepay the Loans and second,
provide cover for Letter of Credit Liabilities with respect to the Commitments
or the Borrowing Base, as applicable, as specified in clause (e) below, in an
aggregate amount equal to such excess)."
2.10 A new Section 2.11 of the Second Amended and Restated Credit
Agreement shall be added as follows:
"Section 2.11 ALLOCATION OF BORROWING BASE.
(a) The Borrowing Base may be allocated between the Company under
this Agreement and Funding Co. under the Funding 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 this Agreement) that the
Banks will extend to the Company at any one time prior to
AMENDMENT NO. 2
- 12 -
the Commitment Termination Date. 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 Commitments and the other provisions of the Funding Credit
Agreement) that the Canadian Lenders will extend to Funding Co. at any one
time prior to the "Commitment Termination Date" specified in the Funding
Credit Agreement. On the date of Amendment No. 2, the Allocated Canadian
Borrowing Base shall be $100,000,000, resulting in an initial Allocated U.S.
Borrowing Base of $30,000,000.
(b) Funding Co. at any time shall have the right to request in
writing to the Agent, Canadian 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 Canadian Lenders and at
no time shall the Allocated Canadian Borrowing Base exceed $100,000,000; and
provided further that Funding Co. 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 Canadian
Lenders of such request, the Canadian Lenders shall give written notice to the
Company and the Agent of their approval or disapproval of such increase. The
revised Allocated U.S. Borrowing Base and Allocated Canadian Borrowing Base
shall become effective upon the distribution by the Agent to the Company, the
Canadian 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) The Company at any time shall have the right to request in
writing to the Agent, the Canadian Agent and the Banks that such Banks, in their
sole discretion, permit the Company 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 Banks and at no time shall the
Allocated U.S. Borrowing Base exceed $100,000,000; and provided further that the
Company 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 Banks of such request, such Banks
shall give written notice to the Company and the Agent of their approval or
disapproval of such change. If such increase is approved, each such Bank shall
have its share of the Allocated U.S. Borrowing Base increased by an amount in
proportion to its Commitment Percentage. The revised Allocated U.S. Borrowing
Base and Allocated Canadian Borrowing Base shall become effective upon the
distribution by the Agent to the Company, the Canadian 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 the Funding Credit Agreement, the Allocated
Canadian Borrowing Base shall be the Equivalent Amount. The Equivalent Amount
shall be calculated (i) on the date a reallocation pursuant to this Section 2.11
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."
AMENDMENT NO. 2
- 13 -
2.11. The introduction to Section 9 of the Second Amended and
Restated Credit Agreement shall be amended by replacing the word "Banks" with
the words "Lender Group" on the second line.
2.12. Section 9.06 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) Liens created pursuant to the Security Documents and the
Canadian Loan Documents;".
2.13. Section 9.07(a) of the Secod Amended and Restated Credit
Agreement shall be amended by deleting the existing paragraph (i) and inserting
a new paragraph (i) as follows:
"(i) Indebtedness to the Agent and the Banks hereunder or to the
Canadian Agent and the Canadian Lenders under the Canadian Guarantee;".
2.14. Section 9.10 of the Second Amended and Restated Credit
Agreement shall be amended in its entirety as follows:
"9.10 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 Company."
2.15. Section 9.11 of the Second Amended and Restated Credit
Agreement shall be amended in its entirety as follows:
"9.11 WORKING CAPITAL. The Company will not permit the current
assets of the Company and its Subsidiaries (determined on a consolidated basis
in accordance with GAAP) to be equal to or less than the current liabilities of
the Company 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 7.02 hereof and Section 6.02 of the Funding
Credit Agreement), (ii) excluded from current liabilities all Indebtedness
hereunder PLUS all Indebtedness under, and as defined in, the Funding Credit
Agreement PLUS all Indebtedness under, and as defined in, the Canadian Forest
Credit Agreement, (iii) excluded from current liabilities all Production
Payments and (iv) excluded from current liabilities the current portion of any
gas balancing liabilities hereunder and under the Funding Credit Agreement."
2.16. Section 9.17 of the Second Amended and Restated Credit
Agreement shall be amended in its entirety as follows:
AMENDMENT NO. 2
- 14 -
"9.17 MODIFICATIONS AND PAYMENTS OF SUBORDINATED INDEBTEDNESS AND
PRODUCTION PAYMENTS INDEBTEDNESS. The Company will not, and will not permit any
of its Restricted Subsidiaries to, (a) agree to any amendment, supplement or
other modification of any of the Senior Subordinated Debt Documents or any other
documents providing for or evidencing any Subordinated Indebtedness or
Production Payments, or (b) pay, prepay, redeem, retire, purchase or otherwise
acquire for value, or defease, any Subordinated Indebtedness or Production
Payments except for (subject to the subordination provisions, if applicable,
relating thereto) regularly scheduled payments of principal thereof and interest
thereon or regularly scheduled redemptions thereof on the respective dates on
which such payments or redemptions are required to be made; PROVIDED that the
Company may (if no Default has occurred and is continuing or will result
therefrom): (i) apply the net cash proceeds received by the Company from any
Person other than a Subsidiary of the Company as a result of an Equity Issuance
to prepay, redeem or retire any Subordinated Indebtedness or Production
Payments; (ii) refinance such Senior Subordinated Debt provided that (w) the
subordination for such Indebtedness remains unchanged; (x) the interest rate
applicable to such Indebtedness is not increased; (y) the final maturity of such
Indebtedness is not accelerated; and (z) the covenants and other provisions
thereof are not modified in any respect determined by the Majority Banks to be
materially adverse to the Company, any such Restricted Subsidiary or the Banks;
and (iii) apply amounts that would be available for the Dividend Payments
pursuant to Section 9.09 hereof for the prepayment, redemption or retirement of
Subordinated Indebtedness or Production Payments."
2.17. Section 9.18 of the Second Amended and Restated Credit
Agreement is deleted in its entirety.
2.18. Section 10 of the Second Amended and Restated Credit Agreement
is amended by:
(i) inserting a new clause (k) as follows:
"Any Event of Default shall occur under the Funding Credit Agreement";
and
(ii) relettering clauses "(k)" and "(l)" as clauses "(l)" and "(m)",
respectively.
2.19 Section 11 of the Second Amended and Restated Credit Agreement
shall be amended by inserting a new Section 11.11 as follows:
"11.11 CO-AGENTS. If at any time the Banks shall appoint more than
one agent under this Agreement or the other Basic Documents all references to
"Agent" in this Section 11 shall be deemed to be a reference to "any Agent"."
2.20. Section 12 of the Second Amended and Restated Credit Agreement
is amended by inserting a new Section 12.14 as follows:
AMENDMENT NO. 2
-15-
"12.14 INTERCREDITOR AGREEMENT. (a) Reference is hereby made to
the Intercreditor Agreement, which provides for certain matters relating to
this Agreement and the Funding 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
Bank hereby authorizes the Agent to execute and deliver the Intercreditor
Agreement on its behalf and the execution and delivery by the Agent of the
Intercreditor Agreement on behalf of the Banks is hereby ratified and
confirmed by each of the Banks. Any Bank 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 Banks are providing financing to Funding Co. The
Company consents to the disclosure of information provided by the Company to
the Banks to such other financial institutions. The Company also
acknowledges that the Banks 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 undertakings give rise to any liability for any withholding tax payments
in connection with any payments made by the Funding Co., the Company or any
other Obligor under either this Agreement or the Funding Credit Agreement,
then (notwithstanding any provisions to the contrary set forth in this
Agreement or the Funding Credit Agreement), the Company shall 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 Funding Co. under the
Funding Credit Agreement) will use good faith efforts to accommodate any
reasonable request by the Company or Funding Co. 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 2.05 of the Second Amended and Restated Credit Agreement, the
Allocated U.S. Borrowing Base of the Banks shall be deemed to have been
changed (and the Commitments of the New Bank shall be deemed to have become
effective) immediately upon the execution of Amendment No. 2 by each of the
Banks.
Section 4. REPRESENTATIONS AND WARRANTIES. The Company represents
and warrants to the Banks that the representations and warranties set forth
in Section 8 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
8 to "this Agreement" and "the Notes" included reference to this Amendment
No. 2 and to the New Notes.
AMENDMENT NO. 2
-16-
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. 2 shall have
been executed and delivered by each of the parties hereto.
5.02. NOTES AND INITIAL LOANS. The Company shall deliver for the
Bank whose Commitment is increasing (the "INCREASING BANK"), 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 and otherwise duly
completed and shall deliver for the New Bank 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 Bank in
a principal amount equal to its Commitment and otherwise duly completed, and
each of such promissory notes (a "NEW NOTE") delivered to the Increasing Bank
and the New Bank 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 Bank 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. FUNDING AMENDMENT AGREEMENT. The Amendment No. 1 to the
Funding Credit Agreement shall have been executed and delivered by each of
the parties thereto.
5.05. OPINION OF COUNSEL TO THE OBLIGORS. An opinion of Xxxxxx
XxXxxxxx, Corporate Counsel to the Obligors and Xxxxxx & Xxxxxx L.L.P.,
special New York counsel to the Obligors shall have been delivered to the
Agent.
5.06. OTHER DOCUMENTS. The Agent shall have received such other
documents as the Agent or any Bank or special New York counsel to Chase may
reasonably request.
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. 2 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. 2 by signing any such counterpart. This Amendment No. 2 shall
be governed by, and construed in accordance with, the law of the State of New
York.
AMENDMENT NO. 2
S-1
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 2 to be duly executed and delivered as of the day and year
first above written.
FOREST OIL CORPORATION
By /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Title: Vice President & Treasurer
Address for Notices:
0000 Xxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxx Xxxxxxx
AMENDMENT NO. 2
S-2
Banks
-----
Commitment THE CHASE MANHATTAN BANK
----------
$40,000,000
By /s/ Xxxx Xx Xxxxxxxx
-------------------------------
Title: Vice President
AMENDMENT NO. 2
S-3
Commitment CHRISTIANIA BANK OG KREDITKASSE
----------
$30,000,000
By /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
Title: Vice President
By /s/ Hans Chr. Kjelsrud
-------------------------------
Title: First Vice President
AMENDMENT NO. 2
S-4
COMMITMENT CREDIT LYONNAIS NEW YORK BRANCH
-----------
$20,000,000
By /s/ Pascal Poupelle
-------------------------------
Title: Executive Vice President
AMENDMENT NO. 2
S-5
COMMITMENT BANK OF MONTREAL
-----------
$20,000,000
By /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Title: Director, U.S. Corporate Banking
AMENDMENT XX. 0
X-0
XXXXXXXXXX XXXXX XXXX XX XXXXXX
-----------
$20,000,000
By /s/ illegible
-------------------------------
Title:
Address for Notices:
00000 Xxxxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxx Xxxxxx
Senior Manager
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
AMENDMENT XX. 0
X-0
XXX XXXXX XXXXXXXXX BANK
as Agent
By /s/ Xxxx Xx Xxxxxxxx
-------------------------------
Title: Vice President
Address for Notices to
Chase as Agent:
The Chase Manhattan Bank
One Chase Xxxxxxxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Agency Services,
Xxxxxx Xxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
AMENDMENT NO. 2
S-8
CHRISTIANIA BANK OG KREDITKASSE,
as Co-Agent
By /s/ Xxxxxxx X. Xxxxxxxx /s/ Hans Chr. Kjelsrud
------------------------------- -------------------------------
Title: Vice President Title: First Vice President
Address for Notices to
Christiania as Co-Agent:
Christiania Bank OG Kreditkasse
00 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: First Vice President
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
AMENDMENT NO. 2
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)
RANGE OF -----------------------
USAGE RATIO BASE RATE LOANS EURODOLLAR LOANS
----------- --------------- ----------------
less than or equal to .330:1.00 0.0 100.0
greater than .330:1.00 but less than
or equal to .660:1.00 25.0 125.0
greater than .660:1.00 50.0 150.0
