EXECUTION COPY
GUARANTEE
THIS GUARANTEE (this "GUARANTEE") dated as of August 19, 1997 is executed
and delivered by FOREST OIL CORPORATION, a corporation duly organized and
validly existing under the laws of the State of New York ("GUARANTOR"), to
THE CHASE MANHATTAN BANK OF CANADA, as Administrative Agent ("ADMINISTRATIVE
AGENT") for itself and the Lenders (as defined in the hereinafter identified
Second Amended and Restated Credit Agreement) under the Second Amended and
Restated Credit Agreement (as hereinafter defined).
ARTICLE 1
SECTION 1.1 DEFINITIONS. As used in this Guarantee, these terms shall
have these respective meanings:
"CANADIAN FOREST" means Canadian Forest Oil Ltd., a corporation organized
under the laws of the Province of Alberta, Canada.
"COMPANY" means 611852 SASKATCHEWAN LTD., a corporation organized under
the laws of the Province of Saskatchewan, Canada.
"DEBT" means at any relevant time the sum of (a) all debt (principal,
interest or other) evidenced by the Notes, the Letter of Credit Liabilities,
the Letter of Credit Reimbursement Obligations, the Bankers' Acceptance
Liabilities or any of the foregoing, and all other obligations incurred under
or arising pursuant to or in connection with the Second Amended and Restated
Credit Agreement or any of the other Loan Documents, (b) all obligations and
indebtedness ("INTEREST RATE OBLIGATIONS") evidenced by all Interest Rate
Protection Agreements of Company, Canadian Forest or any Subsidiary Borrower
to any one or more of the Lenders or an Affiliate of a Lender (and if
Interest Rate Obligations are owed to an Affiliate of a Lender, the
references to "Lender" or "Lenders" shall, where the context permits, be
deemed to include such Affiliate) in connection with any program for interest
rate protection permitted under the Second Amended and Restated Credit
Agreement or otherwise approved in writing by the Majority Lenders and (c)
all obligations and indebtedness ("CONTRACT OBLIGATIONS") evidenced by all
Commodity Hedging Agreements of Company, Canadian Forest or any Subsidiary
Borrower to any one or more of the Lenders permitted under the Second Amended
and Restated Credit Agreement or otherwise approved in writing by the
Majority Lenders. The Debt includes interest and other obligations accruing
or arising in connection with the foregoing after (a) commencement of any
case under any bankruptcy
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or similar laws by or against any Obligor or (b) the obligations of any
Obligor shall cease to exist by operation of law or for any other reason. The
Debt also includes all reasonable attorneys' fees and any other expenses
incurred by Administrative Agent in negotiating, monitoring or enforcing the
Loans, the Notes, the Bankers' Acceptances, the Letter of Credit Liabilities,
the Letter of Credit Reimbursement Obligations, the Interest Rate
Obligations, the Bankers' Acceptance Liabilities, the Contract Obligations or
any of the Loan Documents or defending against any claims arising directly or
indirectly in respect of or on account of any of the Debt.
"INTERCREDITOR AGREEMENT" shall have the meaning ascribed thereto in the
Second Amended and Restated Credit Agreement.
"LENDER GROUP" shall have the meaning ascribed thereto in the
Intercreditor Agreement.
"LOAN DOCUMENTS" means collectively, the Loan Documents (as defined in
the Second Amended and Restated Credit Agreement) and the Loan Documents (as
defined in the Canadian Forest Credit Agreement).
"OBLIGOR" means any person or entity now or hereafter primarily or
secondarily obligated to pay all or any part of the Debt, including Company,
Guarantor, 3189503, Canadian Forest or any of the Subsidiary Borrowers.
"SECOND AMENDED AND RESTATED CREDIT AGREEMENT" means the Second Amended
and Restated Credit Agreement dated as of April 1, 1997 among Company,
the lenders party thereto and the Administrative Agent, as amended by
Amendment No. 1 dated as of even date herewith and as modified by the
Intercreditor Agreement, and as the same may be further modified and
supplemented from time to time.
Unless otherwise defined in this Guarantee, any capitalized term used in this
Guarantee has the meaning ascribed to it in the Second Amended and Restated
Credit Agreement.
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ARTICLE 2
SECTION 2.1. EXECUTION OF LOAN DOCUMENTS. Company has executed and
delivered the Notes and the other documents evidencing the Debt to
Administrative Agent and Lenders, and the Debt is secured by certain of the
Liens created, evidenced or carried forward by the Loan Documents.
SECTION 2.2. CONSIDERATION. In consideration of the credit and financial
accommodations extended and contemplated to be extended to Company by
Administrative Agent and Lenders pursuant to the Second Amended and Restated
Credit Agreement, the other Loan Documents or otherwise, which Guarantor has
determined will substantially benefit it directly or indirectly, and for
other good and valuable consideration, the receipt and sufficiency of which
Guarantor hereby acknowledges, Guarantor executes and delivers this Guarantee
to Administrative Agent with the intention of being presently and legally
bound by its terms.
ARTICLE 3
SECTION 3.1. PAYMENT GUARANTEE. Guarantor, as a primary obligor and not
as a surety, unconditionally guarantees to Administrative Agent for the
ratable benefit of Lenders the full, prompt and punctual payment of the Debt
when due (whether at its stated maturity, by acceleration or otherwise) in
accordance with the Loan Documents or documents evidencing Interest Rate
Protection Agreements or Commodity Hedging Agreements, as the case may be.
This Guarantee is irrevocable, unconditional and absolute, and if for any
reason all or any portion of the Debt shall not be paid when due, Guarantor
will immediately pay the Debt to Administrative Agent or other Person
entitled to it, in U.S. Dollars or in Canadian Dollars, whichever currency or
currencies in which the Debt is then denominated, regardless of (a) any
defense, right of set-off or counterclaim which any Obligor may have or
assert, (b) whether Administrative Agent or any other Person shall have taken
any steps to enforce any rights against any Obligor or any other Person to
collect any of the Debt, and (c) any other circumstance, condition or
contingency whatsoever.
SECTION 3.2. APPLICATION OF PAYMENTS OR PREPAYMENTS. The parties hereto
agree that any payment or prepayment by Company or any other Person against
the Debt shall be deemed paid in such order and manner as Administrative
Agent shall determine in its sole discretion.
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SECTION 3.3. OBLIGATIONS NOT AFFECTED. The obligations of the Guarantor
under Section 3.1 hereof are absolute and unconditional irrespective of the
value, genuineness, validity, regularity or enforceability of the Second
Amended and Restated Credit Agreement, the Notes, the other Loan Documents, or
any other agreement or instrument referred to herein or therein, or any
substitution, release or exchange of any other guarantee of or security for
any of the guaranteed Debt, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor. The Guarantor's obligations hereunder shall not be diminished in
any way except by the payment in full of the guaranteed Debt. Without
limiting the generality of the foregoing, and to the fullest extent permitted
by applicable law, Guarantor's covenants, agreements and obligations under
this Guarantee shall in no way be released, diminished, reduced, impaired or
otherwise affected by reason of the happening from time to time of any of the
following things, for any reason, whether by voluntary act, operation of law
or order of any competent governmental authority and whether or not Guarantor
is given any notice or is asked for or gives any further consent (all
requirements for which, however arising, Guarantor hereby WAIVES to the
fullest extent permitted by applicable law):
(a) release or waiver of any obligation or duty to perform or observe
any express or implied agreement, covenant, term or condition imposed in any
of the Loan Documents or by applicable law on any Obligor or any party to the
Loan Documents;
(b) extension of the time for payment of any part of the Debt or any
other sums payable under the Loan Documents, extension of the time for
performance of any other obligation under or arising out of or in connection
with the Loan Documents or change in the manner, place or other terms of such
payment or performance;
(c) settlement or compromise of any or all of the Debt;
(d) renewal, supplement, modification, rearrangement, amendment,
restatement, replacement, cancellation, rescission, revocation or
reinstatement (whether or not material) of any part of any of the Loan
Documents or any obligations under the Loan Documents of any Obligor or any
other party to the Loan Documents;
(e) acceleration of the time for payment or performance of any Debt or
other obligation under any of the Loan Documents or exercise of any other
right, privilege or remedy under or in regard to any of the Loan Documents;
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(f) failure, omission, delay, neglect, refusal or lack of diligence by
Administrative Agent or any other Person to assert, enforce, give notice of
intent to exercise or any other notice with respect to or exercise any right,
privilege, power or remedy conferred on Administrative Agent or any other
Person in any of the Loan Documents or by law or action on the part of
Administrative Agent or any other Person granting indulgence, grace,
adjustment, forbearance or extension of any kind to any Obligor or any other
Person;
(g) release, surrender, exchange, subordination or loss of any security
or Lien or the priority thereof under any of the Loan Documents or in
connection with the Debt;
(h) release, modification or waiver of, or failure, omission, delay,
neglect, refusal or lack of diligence to enforce, any guaranty, pledge,
mortgage, deed of trust, security agreement, lien, charge, insurance
agreement, bond, letter of credit or other security device, guaranty, surety
or indemnity agreement whatsoever;
(i) taking or acceptance of any other security or guaranty for the
payment or performance of any or all of the Debt or the obligations of any
Obligor;
(j) release, modification or waiver of, or failure, omission, delay,
neglect, refusal or lack of diligence to enforce, any right, benefit,
privilege or interest under any contract or agreement, under which the rights
of any Obligor have been collaterally or absolutely assigned, or in which a
security interest has been granted, to Administrative Agent or any Lender as
direct or indirect security for payment of the Debt or performance of any
other obligations to or at any time held by Administrative Agent or any
Lender;
(k) death, legal incapacity, disability, voluntary or involuntary
liquidation, dissolution, sale of any collateral, marshaling of assets and
liabilities, change in corporate or organizational status, receivership,
insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt or other
similar proceedings of or affecting any Obligor or any of the assets of any
Obligor, even if any of the Debt is thereby rendered void, unenforceable or
uncollectible against any other Person;
(l) occurrence or discovery of any irregularity, invalidity or
unenforceability of any of the Debt or Loan Documents or any defect or
deficiency in any of the Debt or Loan Documents, including the
unenforceability of any provisions of any of the Loan Documents because
entering into any such Loan Documents was ULTRA XXXXX or because anyone who
executed them exceeded their authority;
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(m) failure to acquire, protect or perfect any lien or security interest
in any collateral intended to secure any part of the Debt or any other
obligations under the Loan Documents or failure to maintain perfection;
(n) failure by Administrative Agent or any other Person to notify, or
timely notify, Guarantor of any default, event of default or similar event
(however denominated) under any of the Loan Documents, any renewal,
extension, supplement, modification, rearrangement, amendment, restatement,
replacement, cancellation, rescission, revocation or reinstatement (whether
or not material) or assignment of any part of the Debt, or of the Loan
Documents, release or exchange of any security, any other action taken or not
taken by Administrative Agent or any other Person against any Obligor or any
other Person or any direct or indirect security for any part of the Debt or
other obligation of Company, any new agreement between Administrative Agent
and/or any Lender and any Obligor or any other Person or any other event or
circumstance. Neither Administrative Agent nor any Lender has any duty or
obligation to give Guarantor any notice of any kind under any circumstances
whatsoever with respect to or in connection with the Debt or the Loan
Documents;
(o) occurrence of any event or circumstances which might otherwise
constitute a defense available to, or a discharge of, any Obligor, including
failure of consideration, fraud by or affecting any Person, usury, forgery,
breach of warranty, failure to satisfy any requirement of the statute of
frauds, running of any statute of limitation, accord and satisfaction and any
defense based on election of remedies of any type;
(p) receipt and/or application of any proceeds, credits or recoveries
from any source, including any proceeds, credits, or amounts realized from
exercise of any of Administrative Agents' rights, remedies, powers or
privileges under the Loan Documents, by law or otherwise available to
Administrative Agent or any Lender; and
(q) occurrence of any act, error or omission of Administrative Agent or
any other Person.
SECTION 3.4. WAIVER OF CERTAIN RIGHTS AND NOTICES. To the fullest extent
permitted by applicable law, Guarantor hereby WAIVES and RELEASES all right
to require marshalling of assets and liabilities, sale in inverse order of
alienation, notice of acceptance of this Guarantee and of any liability to
which it applies or may apply, notice of the creation, accrual, renewal,
increase, extension, modification, amendment or rearrangement of any part of
the Debt, presentment, demand for payment, protest, notice of nonpayment,
notice of dishonor, notice of intent to accelerate, notice of acceleration
and, all other notices and
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demands, collection, suit and the taking of any other action by
Administrative Agent or any Lender.
SECTION 3.5. NOT A COLLECTION GUARANTEE. This is an absolute guarantee
of payment, and not of collection, and to the fullest extent permitted by
applicable law, Guarantor WAIVES any right to require that any action be
brought against any Obligor or any other Person, or that Administrative Agent
or any Lender be required to enforce or exhaust any of its rights, benefits
or privileges under any of the Loan Documents, by law or otherwise; PROVIDED
that nothing herein shall be construed to prevent Administrative Agent or any
Lender from exercising and enforcing at any time any right, benefit or
privilege which it may have under any Loan Document or by law from time to
time, and at any time, and Guarantor agrees that Guarantor's obligations
hereunder are and shall be absolute, independent and unconditional under any
and all circumstances. Should Administrative Agent or any Lender seek to
enforce Guarantor's obligations by action in any court, Guarantor WAIVES any
requirement, substantive or procedural, that such Administrative Agent or
such Lender pursue any foreclosure action or that a judgment first be sought
or rendered against any Obligor or any other Person or that any Obligor or
any other Person be joined in such cause or that a separate action be brought
against any Obligor or any other Person. All waivers in this Guarantee or any
of the Loan Documents shall be without prejudice to Administrative Agent or
any Lender at its option to proceed against any Obligor or any other Person,
whether by separate action or joinder. The guarantee in Section 3.1 is a
continuing guarantee and shall apply to all Debt whenever arising. Guarantor
agrees that this Guarantee shall not be discharged except by payment of the
Debt in full in the applicable currency, complete performance of all payment
obligations of the Obligors on the Debt and termination of the obligation (if
any) to make any further advances under the Loan Documents or extend other
financial accommodations to any Obligor.
SECTION 3.6. SUBROGATION. Guarantor agrees that it shall not be entitled
to exercise any rights of subrogation to Administrative Agent's or any
Lender's rights against any Obligor or any other Person or any collateral or
offset rights held by Administrative Agent or any Lender for payment of the
Debt until the later of complete and final payment of all of the guaranteed
Debt under this Guarantee and final termination of this Guarantee.
SECTION 3.7. RELIANCE ON GUARANTEE. All extensions of credit and
financial accommodations heretofore or hereafter made by Administrative Agent
or any Lender under or in respect of the Debt or any Loan Documents shall be
conclusively presumed to have been accepted by the Guarantor as part of the
Debt guaranteed hereby.
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SECTION 3.8. DEMANDS ARE CONCLUSIVE. A certificate submitted to
Guarantor by Administrative Agent setting forth the basis for any demand by
Administrative Agent hereunder shall constitute a demand hereunder and shall
be conclusive, absent manifest error, as to the matters therein stated,
including the amount due.
SECTION 3.9. JOINT AND SEVERAL. If any Person makes any guaranty of any
of the obligations guaranteed hereby or gives any security for them,
Guarantor's obligations hereunder shall be joint and several with the
obligations of such other Persons pursuant to such agreement or other papers
making the guaranty or giving the security.
SECTION 3.10. PAYMENTS RETURNED. Guarantor agrees that, if at any time all
or any part of any payment previously applied by Administrative Agent or any
Lender to the Debt is or must be returned by Administrative Agent or any
Lender or recovered from Administrative Agent or any Lender for any reason
(including the order of any bankruptcy court), this Guarantee shall
automatically be reinstated to the same effect as if the prior application
had not been made, and, in addition, Guarantor hereby agrees to indemnify
Administrative Agents and Lenders against, and to save and hold
Administrative Agents and Lenders harmless from any required return by
Administrative Agent and any Lender or recovery from Administrative Agent or
any Lender of any such payment because of its being deemed preferential under
applicable bankruptcy, receivership or insolvency laws, or for any other
reason.
SECTION 3.11. REMEDIES. Guarantor agrees that, as between Guarantor and
Administrative Agent, the obligations of Company under the Second Amended and
Restated Credit Agreement and the Notes may be declared to be forthwith due
and payable as provided in Section 9 of the Second Amended and Restated
Credit Agreement (and shall be deemed to have become automatically due and
payable in the circumstances provided in said Section 9) for purposes of
Section 3.1 hereof notwithstanding any stay, injunction or other prohibition
preventing such declaration (or such obligations from becoming automatically
due and payable) as against the applicable Obligor and that, in the event of
such declaration (or such obligations being deemed to have become
automatically due and payable), such obligations (whether or not due and
payable by the applicable Obligor) shall forthwith become due and payable by
Guarantor for purposes of said Section 3.1.
SECTION 3.12. CONTINUING GUARANTEE. The guarantee in Section 3.1 is a
continuing guarantee, and shall apply to all guaranteed Debt whenever arising.
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SECTION 3.13. PRINCIPAL DEBTOR. Notwithstanding any other obligations of
Guarantor under this Guarantee, any amounts which may not be recoverable from
Guarantor as guarantor under this Guarantee shall be recoverable from
Guarantor as principal debtor in respect thereof and shall be paid to
Administrative Agent by Guarantor after demand therefor.
ARTICLE 4
Guarantor warrants and represents as follows:
SECTION 4.1. RELATIONSHIP TO COMPANY, 3189503, CANADIAN FOREST AND THE
SUBSIDIARY BORROWERS. Guarantor has determined that its liability and
obligation under this Guarantee may reasonably be expected to substantially
benefit Guarantor directly or indirectly, and Guarantor's board of directors
has made that determination. Company, 3189503, Canadian Forest and the
Subsidiary Borrowers and Guarantor are mutually dependent on each other in the
conduct to their respective businesses and are, and do business together with
the other Subsidiaries of Guarantor as, an integrated business enterprise
involved in the development, exploration, production, marketing and
transportation of oil, gas and other minerals. The maintenance and
improvement of Company's, 3189503's, Canadian Forest's and the Subsidiary
Borrowers' financial condition is vital to the business of Guarantor and the
transactions contemplated in the Second Amended and Restated Credit Agreement
produce distinct and identifiable financial and economic direct or indirect
benefits to Guarantor. Guarantor has had full and complete access to the
underlying papers relating to the Debt and all other papers executed by any
Obligor or any other Person in connection with the Debt, has reviewed them
and is fully aware of the meaning and effect of their contents. Guarantor is
fully informed of all circumstances which bear upon the risks of executing
this Guarantee and which a diligent inquiry would reveal. Guarantor has
adequate means to obtain from Company, Canadian Forest, 3189503 and the
Subsidiary Borrowers on a continuing basis information concerning Company's,
Canadian Forest's, 3189503's and the Subsidiary Borrowers' financial
condition, and is not depending on Administrative Agent or any Lender to
provide such information, now or in the future. Guarantor agrees that neither
Administrative Agent nor any Lender shall have an obligation to advise or
notify Guarantor or to provide Guarantor with any data or information. The
execution and delivery of this Guarantee is not a condition precedent (and
neither Administrative Agent nor any Lender has in any way implied that the
execution of this Guarantee is a condition precedent) to Administrative
Agent's or any Lender's making, extending or modifying any loan or any other
financial accommodation to or for Guarantor.
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SECTION 4.2 PROCEEDINGS. No bankruptcy or insolvency proceedings are
pending or contemplated by or, to the best of Guarantor's knowledge, against
Guarantor.
ARTICLE 5
SECTION 5.1 TERM. Subject to the automatic reinstatement provisions of
ARTICLE 3 above, this Guarantee shall terminate and be of no further force or
effect upon full and final payment of the Debt, complete performance of all of
the obligations of the Obligors under the Loan Documents and Guarantor
hereunder and final termination of the obligation (if any) to make any
further advances under the Loan Documents or to provide any other financial
accommodations to any Obligor.
ARTICLE 6
SECTION 6.1. BINDING ON SUCCESSORS; NO ASSIGNMENT BY GUARANTOR. All
guaranties, warranties, representations, covenants and agreements in this
Guarantee shall bind the successors and assigns of Guarantor and shall benefit
Administrative Agent and Lenders and their respective successors and assigns,
and any holder of any part of the Debt. Guarantor shall not assign or
delegate any of its obligations under this Guarantee or any of the Loan
Documents without Administrative Agent's and Lenders' express prior written
consent.
SECTION 6.2. SUBORDINATION OF COMPANY'S OBLIGATIONS TO GUARANTOR.
Guarantor agrees that if, for any reason whatsoever, Company, Canadian
Forest, 3189503 or the Subsidiary Borrowers now or hereafter becomes liable,
obligated or indebted to Guarantor, all such liabilities, obligations and
indebtedness, together with all interest thereon and fees and other charges
in connection therewith, and all Liens shall at all times, be second,
subordinate and inferior in right of payment, in lien priority and in all
other respects to the Debt and all Liens securing the Debt.
SECTION 6.3. WAIVER OF SURETYSHIP RIGHTS. By signing this Guarantee,
Guarantor WAIVES each and every right to which it may be entitled by virtue
of any suretyship law, including any rights it may have under applicable laws
to require that any action or proceeding be commenced against Company,
Canadian Forest, 3189503, the Subsidiary Borrowers or any other Person as a
condition to the institution of any action or proceeding relating to the
obligations of Guarantor hereunder.
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SECTION 6.4. AMENDMENTS IN WRITING. This Guarantee shall be changed
only by agreement in writing signed by Guarantor and Administrative Agent.
Any waiver or consent with respect to this Guarantee shall be effective only
in the specific instance and for the specific purpose for which given. No
course of dealing between the parties, no usage of trade and no parole or
extrinsic evidence of any nature shall be used to supplement or modify any of
the terms or provisions of this Guarantee.
SECTION 6.5. NOTICES. Any notices or other communications required or
permitted to be given hereunder shall be given or made by telegraph, telecopy
(confirmed by mail), mail or other writing and telecopied, telegraphed,
mailed or delivered to the intended recipient at the address set forth below
for such recipient or at such other address as shall be designated by such
recipient in a notice to the other parties hereto given in accordance with
this Section:
If to Guarantor: Forest Oil Corporation
0000 Xxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
If to Administrative Agent: The Chase Manhattan Bank of Canada,
as Administrative Agent
First Canadian Place
000 Xxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Attention: Vice President
Corporate Finance
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
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Except as may be otherwise provided herein, all notices and other
communications shall be deemed to have been duly received when transmitted by
telecopier during regular business hours, delivered to the telegraph office,
or personally delivered or, in the case of a mailed notice, three (3) days
after deposit in the United States mail, postage prepaid, certified mail with
return receipt requested (or upon actual receipt, if earlier), in each case
given or addressed as aforesaid. Actual notice, however and from whomever
given or received, shall always be effective when received.
SECTION 6.6. SECTION HEADINGS. The table of contents, captions and
section headings used in this Guarantee are included for reference only and
shall not be considered in interpreting, applying or enforcing this Guarantee.
SECTION 6.7. VENUE. This Guarantee is performable in Alberta, Canada,
which shall be a proper place of venue for suit on or in respect of this
Guarantee. Guarantor irrevocably agrees that any legal proceeding in respect
of this Guarantee shall be brought in the courts of the Province of Alberta
and the courts of appeal therefrom (collectively, the "SPECIFIED COURTS").
Guarantor hereby irrevocably submits to the nonexclusive jurisdiction of such
courts. Guarantor hereby irrevocably waives, to the fullest extent permitted
by law, any objection which it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to any
Loan Document brought in any Specified Court, and hereby further irrevocably
waives any claims that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum. Guarantor further (1)
agrees to designate and maintain Canadian Forest Oil Ltd., at 000, 000-Xxxxx
Xxxxxx X.X., Xxxxxxx, Xxxxxxx 72P 3G3, as its agent for service of process in
Alberta, Canada in connection with any such suit, action or proceeding and to
deliver to Administrative Agent evidence thereof and (2) irrevocably consents
to the service of process out of any of the aforementioned courts in any such
suit, action or proceeding by the mailing of copies thereof by registered
mail, return receipt requested, postage prepaid, to Guarantor at its address
as provided in this Guarantee or as otherwise provided by governing law.
Nothing herein shall affect the right of Administrative Agent or any Lender
to commence legal proceedings or otherwise proceed against Guarantor in any
jurisdiction or to serve process in any manner permitted by applicable law.
Guarantor agrees that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. THIS GUARANTEE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE APPLICABLE LAWS OF THE
PROVINCE OF ALBERTA AND OF CANADA FROM TIME TO TIME IN EFFECT.
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SECTION 6.8. SURVIVAL. The guarantees, representations, warranties,
covenants and agreements set forth in this Guarantee shall continue and
survive until final termination of this Guarantee.
SECTION 6.9. RIGHTS CUMULATIVE; DELAY NOT WAIVER. Administrative
Agent's or any Lender's exercise of any right, benefit or privilege under any
of the Loan Documents or at law or in equity shall not preclude the
concurrent or subsequent exercise of any of Administrative Agent's or any
Lender's other present or future rights, benefits or privileges. The remedies
provided in this Guarantee are cumulative and not exclusive of any remedies
provided by law or the Loan Documents. No failure by Administrative Agent or
any Lender to exercise, and no delay in exercising, any right under any Loan
Document shall operate as a waiver thereof.
SECTION 6.10. SEVERABILITY. If any provision of this Guarantee is held
to be illegal, invalid or unenforceable under present or future laws, the
legality, validity and enforceability of the remaining provisions of this
Guarantee shall not be affected thereby, and this Guarantee shall be
liberally construed so as to carry out the intent of the parties to it.
SECTION 6.11. ADDITIONAL AGREEMENT. This Guarantee is in addition to
and not in substitution for the Limited Recourse Secured Guarantee provided
by Guarantor to Company that was assigned to Administrative Agent as of
April 1, 1997. Subject to the foregoing, this Guarantee embodies the entire
agreement and understanding among Guarantor, Administrative Agent and Lenders
with respect to its subject matter. Guarantor acknowledges and agrees that
there is no oral agreement among Guarantor, Administrative Agents and Lenders
which has not been incorporated in this Guarantee.
SECTION 6.12. USURY NOT INTENDED; SAVING PROVISIONS. Notwithstanding
any provision to the contrary contained in any Loan Document, it is expressly
provided that in no case or event shall the aggregate of any amounts accrued
or paid pursuant to this Guarantee which under applicable laws are or may be
deemed to constitute interest ever exceed the maximum nonusurious interest
rate permitted by applicable laws of the Province of Alberta or the applicable
laws of Canada, whichever permit the higher rate. In this connection,
Guarantor, Administrative Agent and Lenders stipulate and agree that it is
their common and overriding intent to contract in strict compliance with
applicable usury laws. In furtherance thereof, none of the terms of this
Guarantee shall ever be construed to create a contract to pay, as
consideration for the use, forbearance or detention of money, interest at a
rate in excess of the maximum rate permitted by applicable laws. The
Guarantor shall never be liable for interest in excess of the maximum rate
permitted by applicable laws. If, for any reason whatever, such interest paid
or received during the full term of the applicable
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indebtedness produces a rate which exceeds the maximum rate permitted by
applicable laws, then Administrative Agent or Lenders, as the case may be,
shall credit against the principal of such indebtedness (or, if such
indebtedness shall have been paid in full, shall refund to the payor of such
interest) such portion of said interest as shall be necessary to cause the
interest paid to produce a rate equal to the maximum rate permitted by
applicable laws. All sums paid or agreed to be paid to Administrative Agent
or any Lender for the use, forbearance or detention of money shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and
spread in equal parts throughout the full term of the applicable
indebtedness, so that the interest rate is uniform throughout the full term
of such indebtedness. The provisions of this Section shall control all
agreements, whether now or hereafter existing and whether written or oral,
among Guarantor, Administrative Agent and Lenders.
SECTION 6.13. TAXES. If any payment made by Guarantor to
Administrative Agent hereunder becomes subject to any withholding or
deduction with respect to Covered Taxes (as defined in the Second Amended and
Restated Credit Agreement), Guarantor shall also duly and punctually pay to
Administrative Agent such additional amount as may be necessary to ensure
that Administrative Agent receives an amount, after taking into account all
applicable Covered Taxes, equal to the amount which would have been received
by Administrative Agent had such payment not been made subject to any
withholding or deduction. In any circumstance, to the extent available,
Guarantor shall also promptly remit to Administrative Agent the relevant
official receipts or other evidence satisfactory to Administrative Agent
evidencing payment to the appropriate taxing authority of each such Covered
Tax by Guarantor on behalf of Administrative Agent.
SECTION 6.14. JUDGEMENT CURRENCY. The credit provided in the Second
Amended and Restated Credit Agreement is an international loan transaction in
which the specification of Canadian Dollars or U.S. Dollars is of the
essence, and the stipulated currency shall in each instance be the currency
of account and payment in all instances. A payment obligation in one currency
hereunder (the "ORIGINAL CURRENCY") shall not be discharged by an amount paid
in another Currency (the "OTHER CURRENCY"), whether pursuant to any judgment
expressed in or converted into any Other Currency or in another place except
to the extent that such tender or recovery results in the effective receipt
by Administrative Agent or a Lender of the full amount of the Original
Currency payable under this Guarantee. If for the purpose of obtaining
judgment in any court it is necessary to convert a sum due hereunder in the
Original Currency into the Other Currency, the rate of exchange that shall be
applied shall be that at which in accordance with normal banking procedures
Administrative Agent could purchase Original Currency at the Principal Office
with the Other Currency on the Business Day next preceding the day on which
such judgment is rendered or otherwise in accordance with applicable law. The
obligation of Guarantor in respect of any such sum due from it to the
Administrative Agent or any Lenders under the Second Amended and Restated
Credit
GUARANTEE
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Agreement, hereunder (in this Section 6.14 called an "ENTITLED PERSON")
shall, notwithstanding the rate of exchange actually applied in rendering
such judgment, be discharged only to the extent that on the Business Day
following receipt by such Entitled Person of any sum adjudged to be due
hereunder in the Other Currency such Entitled Person may in accordance with
normal banking procedures purchase and transfer the Original Currency to
Toronto with the amount of the judgment currency so adjudged to be due; and
Guarantor hereby, as a separate obligation and notwithstanding any such
judgment, agrees to indemnify such Entitled Person against, and to pay such
Entitled Person on demand, in the Original Currency, the amount (if any) by
which the sum originally due to such Entitled Person the Original Currency
hereunder exceeds the amount of the Other Currency so purchased and
transferred.
SECTION 6.15. INTERCREDITOR AGREEMENT. Guarantor acknowledges that
Lenders may enter into participation arrangements and payment sharing
understandings with the banks and other financial institutions which are or
may from time to time become parties to the U.S. Credit Agreement pursuant to
the Intercreditor Agreement or otherwise 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 the Company or any other Obligor under or in
connection with the Second Amended and Restated Credit Agreement, then
(notwithstanding any provisions to the contrary set forth in this Guarantee
or the Second Amended and Restated Credit Agreement), Guarantor 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 Guarantor under this Guarantee or Funding Co. under the
Second Amended and Restated Credit Agreement) will use good faith efforts to
accommodate any reasonable request by Company or Guarantor 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.
GUARANTEE
