April 14, 1999
Foreland Corporation
000 Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Re: Deferral of Principal Payment; Forbearance
Gentlemen:
You ("Borrowers") and we ("EIF") are parties to a Financing Agreement dated
January 6, 1998, as amended by First Amendment to Financing Agreement dated
August 10, 1998, and as further amended by Second Amendment to Financing
Agreement dated February 4, 1999 (as amended, the "Financing Agreement"),
providing that we will make certain loans to you under the conditions and
subject to the terms set forth in the Financing Agreement.
Payment Default. Borrowers have failed to make the principal payments due on
April 1, 1999 under the Refinancing Loan, the Acquisition Loan and the
Development Loan in the aggregate amount of $338,095.53. Borrowers have
requested that EIF defer this payment.
XXX is willing to agree to this request, subject to the conditions set forth in
this letter. Borrowers shall make the regularly scheduled payments as set forth
in the new amortization schedule attached to this letter as Exhibit A.
Borrowers and EIF acknowledge that this new amortization schedule reflects the
changes set forth in this letter, and that Borrowers have accepted the new
schedule in substitution for the existing schedules that are currently attached
to the Notes.
Covenant Defaults. (i) The financial covenants set forth in Sections 7.23(a),
7.23(b), 7.23(c) and 7.23(d) and (ii) the collateral/indebtedness ratio
covenant set forth in Section 2.14 of the Financing Agreement require Borrowers
to maintain certain ratios and percentages as to equity, current assets to
current liabilities, net income to total debt service expense and collateral
value to debt by April 1, 1999, but Borrowers were not in compliance with these
covenants as of that date. EIF agrees to waive compliance until May 15, 1999.
EIF further agrees to waive Borrowers' compliance with Section 7.39(c) of the
Financing Agreement regarding consummation of a Qualified Offering until May 15,
1999.
Release. To induce EIF to execute this letter and to agree to the forbearance
described in this letter, Borrowers represent and warrant that no Borrower has
any claims, counterclaims, setoffs, actions or causes of action of any kind or
nature whatsoever against EIF, its directors, officers, partners, employees,
agents, attorneys, legal representatives, successors or assigns, directly or
indirectly, arising out of, based upon or in any manner connected with any
"Prior Related Event" (as hereinbelow defined), and hereby releases, discharges
and forever waives and relinquishes any and all such claims, counterclaims,
setoffs, actions and causes of action against EIF, whether known or unknown,
asserted or unasserted, established or unestablished, determined or
undetermined, proven or unproven, absolute or inchoate or contingent, held
individually or jointly, arising directly, indirectly, derivatively or in any
other manner, from the beginning of the world to the date hereof. As used
herein the term "Prior Related Event" means any transaction, event,
circumstance, action, failure to act, or occurrence of any sort or type, whether
known or unknown, which occurred, existed, was taken, permitted or begun, prior
to the date hereof, and occurred, existed, was taken, was permitted or begun in
accordance with, pursuant to, or by virtue of, any of the terms of any of the
Loan Documents, or which was related or connected in any manner, directly or
indirectly, to the Loans or any of the Loan Documents. Nothing contained herein
shall be construed to release EIF from liability for any acts after the date of
execution of this release. Neither the offer of this release by Borrowers nor
its acceptance by EIF shall constitute an acknowledgment of or admission by EIF
of liability for any matter or a precedent upon which any liability may be
asserted.
Any waivers by EIF are limited to the circumstances described in this letter and
will not be deemed to be a waiver of any other provision of the Financing
Agreement, except as expressly set forth herein. Borrowers hereby expressly
acknowledge that failure by EIF to enforce its rights under these sections of
the Financing Agreement in the past does not entitle Borrowers to any such
forbearance under these or any other sections of the Financing Agreement in the
future.
Borrowers further agree that it shall be an Event of Default (as that term is
defined in the Financing Agreement) if Borrowers fail to comply with the
conditions set forth above, and that EIF shall be entitled to exercise any and
all remedies available to it upon the happening of an Event of Default.
All capitalized terms used in this letter that are not otherwise defined herein
shall have the meanings ascribed to them in the Financing Agreement. If the
foregoing accurately reflects your understanding of our agreement, please
execute a copy of this letter and return it to us.
Sincerely yours,
ENERGY INCOME FUND, L.P.
By: EIF General Partner, L.L.C.,
its General Partner
By /s/ Xxxxxx X. XxXxxxxx
Vice President
ACKNOWLEDGED AND AGREED:
FORELAND CORPORATION
By /s/ X. Xxxxxx Xxxxxx
President
EAGLE SPRINGS PRODUCTION LIMITED-LIABILITY COMPANY
By /s/ X. Xxxxxx Xxxxxx
Manager
FORELAND REFINING CORPORATION
By /s/ Xxxxx X. Xxxxxx
President
FORELAND ASPHALT CORPORATION
By /s/ Xxxxx X. Xxxxxx
President
FORELAND ASSET CORPORATION
By /s/ Xxxxx X. Xxxxxx
President
FORELAND TRANSPORTATION, INC.
By /s/Xxxxx X. Xxxxxx
President
Foreland Corporation
Combined Loan Amortization Schedule
January 9, 1998
Beginning Ending |------------Payments---------------------|
Days Date Principal Principal Interest Principal Total
9-Jan-98 - 5,425,279.34 - - -
23 1-Feb-98 5,425,279.34 5,925,279.34 41,593.80 - 41,593.80
28 1-Mar-98 5,925,279.34 5,925,279.34 54,969.27 - 54,969.27
31 1-Apr-98 5,925,279.34 5,925,279.34 61,227.89 - 61,227.89
30 1-May-98 5,925,279.34 5,925,279.34 59,252.79 - 59,252.79
31 1-Jun-98 5,925,279.34 5,925,279.34 61,227.89 - 61,227.89
30 1-Jul-98 5,925,279.34 5,925,279.34 59,252.79 - 59,252.79
31 1-Aug-98 5,925,279.34 12,375,279.34 61,227.89 - 61,227.89
31 1-Sep-98 12,375,279.34 12,375,279.34 104,227.89 - 104,227.89
30 1-Oct-98 12,375,279.34 12,375,279.34 123,752.79 - 123,752.79
31 1-Nov-98 12,375,279.34 12,375,279.34 127,877.89 - 127,877.89
30 1-Dec-98 12,375,279.34 12,375,279.34 123,752.79 - 123,752.79
31 1-Jan-99 12,375,279.34 12,375,279.34 127,877.89 - 127,877.89
31 1-Feb-99 12,375,279.34 12,375,279.34 127,877.89 - 127,877.89
28 1-Mar-99 12,375,279.34 12,575,279.34 115,502.61 - 115,502.61
31 1-Apr-99 12,575,279.34 12,575,279.34 129,744.56 - 129,744.56
30 1-May-99 12,575,279.34 12,227,842.72 125,752.79 347,436.62 473,189.41
31 1-Jun-99 12,227,842.72 11,880,406.10 126,354.38 347,436.62 473,791.00
30 1-Jul-99 11,880,406.10 11,532,969.48 118,804.06 347,436.62 466,240.68
31 1-Aug-99 11,532,969.48 11,185,532.86 119,174.02 347,436.62 466,610.64
31 1-Sep-99 11,185,532.86 10,838,096.24 115,583.84 347,436.62 463,020.46
30 1-Oct-99 10,838,096.24 10,490,659.62 108,380.97 347,436.62 455,817.59
31 1-Nov-99 10,490,659.62 10,143,223.00 108,403.47 347,436.62 455,840.09
30 1-Dec-99 10,143,223.00 9,795,786.38 101,432.23 347,436.62 448,868.85
31 1-Jan-00 9,795,786.38 9,488,438.61 101,223.14 307,347.77 408,570.91
31 1-Feb-00 9,488,438.61 9,181,090.84 98,047.20 307,347.77 405,394.97
29 1-Mar-00 9,181,090.84 8,873,743.07 88,750.55 307,347.77 396,098.32
31 1-Apr-00 8,873,743.07 8,566,395.30 91,695.34 307,347.77 399,043.11
30 1-May-00 8,566,395.30 8,259,047.53 85,663.96 307,347.77 393,011.73
31 1-Jun-00 8,259,047.53 7,951,699.76 85,343.48 307,347.77 392,691.25
30 1-Jul-00 7,951,699.76 7,644,351.99 79,517.01 307,347.77 386,864.78
31 1-Aug-00 7,644,351.99 7,337,004.22 78,991.64 307,347.77 386,339.41
31 1-Sep-00 7,337,004.22 7,029,656.45 75,815.70 307,347.77 383,163.47
30 1-Oct-00 7,029,656.45 6,722,308.68 70,296.56 307,347.77 377,644.33
31 1-Nov-00 6,722,308.68 6,414,960.91 69,463.85 307,347.77 376,811.62
30 1-Dec-00 6,414,960.91 6,107,613.14 64,149.62 307,347.77 371,497.39
31 1-Jan-01 6,107,613.14 5,853,717.16 63,112.00 253,895.98 317,007.98
31 1-Feb-01 5,853,717.16 5,599,821.18 60,488.41 253,895.98 314,384.39
28 1-Mar-01 5,599,821.18 5,345,925.20 52,264.99 253,895.98 306,160.97
31 1-Apr-01 5,345,925.20 5,092,029.22 55,241.23 253,895.98 309,137.21
30 1-May-01 5,092,029.22 4,838,133.24 50,920.31 253,895.98 304,816.29
31 1-Jun-01 4,838,133.24 4,584,237.26 49,994.05 253,895.98 303,890.03
30 1-Jul-01 4,584,237.26 4,330,341.28 45,842.38 253,895.98 299,738.36
31 1-Aug-01 4,330,341.28 4,076,445.30 44,746.86 253,895.98 298,642.84
31 1-Sep-01 4,076,445.30 3,822,549.32 42,123.27 253,895.98 296,019.25
30 1-Oct-01 3,822,549.32 3,568,653.34 38,225.50 253,895.98 292,121.48
31 1-Nov-01 3,568,653.34 3,314,757.36 36,876.08 253,895.98 290,772.06
30 1-Dec-01 3,314,757.36 3,060,861.38 33,147.58 253,895.98 287,043.56
31 1-Jan-02 3,060,861.38 0.00 31,628.90 3,060,861.38 3,092,490.28
$3,896,822.00 $12,575,279.34 $16,472,101.34
