EXECUTION COPY
THIRD SECURITY CONFIRMATION,
AMENDMENT AND SUPPLEMENTAL DEBENTURE AGREEMENT
This Third Security Confirmation, Amendment and Supplemental
Debenture Agreement (the "AGREEMENT") is made as of August 19, 1997 among
Canadian Forest Oil Ltd. ("CANADIAN FOREST"), Producers Marketing Ltd.
("PROMARK"), 3189503 Canada Ltd. ("HOLDCO"), 611852 Saskatchewan Ltd.
("FUNDCO"), Forest Oil Corporation ("FOREST OIL"), and The Chase Manhattan
Bank of Canada ("CHASE" or the "AGENT") in its capacity as Administrative
Agent for the Lenders (the "LENDERS") now or hereafter party to the Second
Amended and Restated Fundco Credit Agreement (as defined below).
WHEREAS:
1. The parties hereto (or certain of them, as applicable) are
parties to various notes, guarantees and security documents given to assure
and secure payment and performance of obligations under the following credit
agreements:
(a) Credit Agreement dated as of February 8, 1996 between Fundco and
Chase (the "ORIGINAL FUNDCO CREDIT AGREEMENT");
(b) Credit Agreement dated as of February 8, 1996 between Canadian
Forest, the Subsidiary Borrowers (as defined therein), and Fundco
(the "ORIGINAL CANADIAN FOREST CREDIT AGREEMENT"); and
(c) Letter of Credit and Reimbursement Agreement dated as of February
8, 1996 between ProMark and Fundco (the "PRODUCERS MARKETING
AGREEMENT").
2. The parties subsequently agreed to certain changes to the above
facilities, including the addition of new lenders to the Original Fundco
Credit Agreement, the inclusion of ProMark as a direct Borrower under the
Original Canadian Forest Credit Agreement, and the termination of the
Producers Marketing Agreement, and agreed to effect such changes by entering
into:
(a) the Amended and Restated Credit Agreement dated July 17, 1996 among
Fundco, as borrower, and Chase, Bank of Montreal and Royal Bank of
Canada, as lenders, and Chase as Administrative AGent for the
Lenders; and
(b) the Amended and Restated Credit Agreement dated July 17, 1996 among
Canadian Forest, ProMark and other Subsidiary Borrowers (as defined
therein), as borrowers, and Fundco, as Lender.
In that regard, the parties entered into a Security Confirmation and
Amendment Agreement dated July 17, 1996 (the "FIRST CONFIRMATION") to effect
certain confirmations and amendments in respect of the Loan Documents, and to
terminate certain Loan Documents.
THIRD CONFIRMATION ETC.
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3. In order to reflect, firstly, certain corporate changes affecting
Canadian Forest (namely, the amalgamation of 3189490 Canada Ltd. and Atcor
Resources Ltd. to form 721940 Alberta Ltd. as the continuing corporation
resulting therefrom, and the amalgamation of 721940 Alberta Ltd. and
Canadian Forest to form Canadian Forest as the continuing corporation
resulting therefrom), and secondly, certain asset sales from Canadian Forest
to Forest Oil and the continued secured position of Fundco with respect to
such assets, the parties hereto (or certain of them) subsequently agreed to
effect certain additional amendments by entering into:
(a) the Second Amended and Restated Credit Agreement dated as of April
1, 1997 among Fundco, as borrower, and Chase, Bank of Montreal and
Royal Bank of Canada, as Lenders, and Chase as Administrative Agent
for the Lenders (as amended, restated or otherwise modified from
time to time, including by the amendments effected by Fundco
Amendment No. 1 (as hereinafter defined), the "SECOND AMENDED AND
RESTATED FUNDCO CREDIT AGREEMENT"); and
(b) the Second Amended and Restated Credit Agreement dated as of April
1, 1997 among Canadian Forest, ProMark and other Subsidiary Borrowers
as borrowers, and Fundco, as lender (as amended, restated or
otherwise modified from to time, including by the amendments
effected by Canadian Forest Amendment No. 1 (as hereinafter defined),
the "SECOND AMENDED AND RESTATED CANADIAN FOREST CREDIT AGREEMENT").
In that regard, the parties entered into a Second Security Confirmation and
Amendment Agreement dated as of April 1, 1997 (the "SECOND CONFIRMATION", the
First Confirmation and the Second Confirmation being collectively referred to
herein as the "CONFIRMATIONS") to effect certain confirmations and amendments
in respect of the Loan Documents, and to terminate certain Loan Documents.
4. In order to reflect the establishment of a global U.S. and Canadian
borrowing structure for Forest Oil and its Subsidiaries, to increase the
amounts available to Fundco under the second Amended and Restated Fundco
Credit Agreement and to Canadian Forest, ProMark and other Subsidiary
Borrowers under the Second Amended and Restated Canadian Forest Credit
Agreement, and to add Credit Lyonnais Canada as a new lender to the Second
Amended and Restated Fundco Credit Agreement, the parties hereto have agreed
to effect certain additional amendments by entering into:
(a) an amendment dated as of August 19, 1997 among Fundco, as borrower,
and Chase, Bank of Montreal, Royal Bank of Canada and Credit Lyonnais
Canada as Lenders, and Chase as Administrative Agent for the Lenders
("FUNDCO AMENDMENT NO.1"); and
(b) an amendment dated as of August 19, 1997 among Canadian Forest,
ProMark and other Subsidiary Borrowers, as borrowers, and Fundco,
as lender ("CANADIAN FOREST AMENDMENT NO. 1").
THIRD CONFIRMATION ETC.
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5. The parties desire to confirm that in connection with the
amendments and restatements referred to in Recital 4 above, certain
guarantees and security given in connection with the original agreements
referred to in Recital 1 above continue in effect with certain amendments as
herein and in the Confirmations set out, while certain other instruments are
terminated as herein set out.
NOW THEREFORE, in consideration of Chase and the Lenders agreeing
to the amendment of the Second Amended and Restated Fundco Credit Agreement
in the manner provided in Fundco Amendment No. 1 and the amendment of the
Second Amended and Restated Canadian Forest Credit Agreement in the manner
provided in Canadian Forest Amendment No. 1 and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
Canadian Forest, ProMark, Holdco, Fundco and Forest Oil, the parties agree as
follows:
1. DEFINITIONS
Capitalized terms used but not defined in this Agreement shall have
the meanings ascribed to them in the Second Amended and Restated Fundco
Credit Agreement as amended by Fundco Amendment No. 1.
2. EXISTING FUNDCO NOTES
The existing Notes dated July 17, 1996 and issued by Fundco
pursuant to Section 2.09(a) of the Amended and Restated Credit Agreement
referred to in Recital 2(a) of this Agreement are hereby cancelled
concurrently with the issuance of new Notes in favour of each of the Lenders
that are party to the Second Amended and Restated Fundco Credit Agreement as
amended by Fundco Amendment No. 1 to reflect the amendment to Section 2.09(a)
of the Second Amended and Restated Fundco Credit Agreement effected by
Section 2.09 of Fundco Amendment No. 1.
The Swingline Note dated July 17, 1996 and issued by Fundco
pursuant to Section 2.09(b) of the Amended and Restated Credit Agreement
referred to in Recital 2(a) of this Agreement shall continue in full force
and effect, with each reference to "Amended and Restated Credit Agreement"
therein being deemed to refer to and include the Second Amended and Restated
Fundco Credit Agreement as amended by Fundco Amendment No. 1.
3. FUNDCO ASSIGNMENT OF SECURITY (RE: CANADIAN FOREST)
The Assignment of Security (Canadian Forest Credit Agreement) made
February 8, 1996 by Fundco in favour of Chase, as amended by the
Confirmations, is hereby confirmed as continuing security in favour of Chase
for the timely payment of the principal, interest (including interest on
amounts in default) and all other indebtedness and liabilities, present or
future, direct or indirect, now or hereafter owing by Fundco under the Second
Amended and Restated Fundco Credit Agreement, as amended by Fundco Amendment
No. 1, and for the due performance by Fundco of all of its covenants and
obligations under that Second Amended and Restated Fundco Credit Agreement as
amended by Fundco Amendment No. 1, with each reference to "Credit Agreement"
therin being deemed to refer to and include the Second Amended and Restated
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Fundco Credit Agreement as amended by Fundco Amendment No. 1, and each
reference to "Canadian Forest Credit Agreement" shall be deemed to refer to
and include the Second Amended and Restated Canadian Forest Credit Agreement
as amended by Canadian Forest Amendment No. 1.
4. FUNDCO ASSIGNMENT OF PAYMENTS (RE: CANADIAN FOREST)
The Assignment of Payments (Canadian Forest Credit Agreement)
dated effective February 8, 1996 and executed by Fundco in favour of Chase,
as amended by the Confirmations, is hereby confirmed as continuing security
in favour of Chase for the timely payment of the principal, interest
(including interest on amounts in default) and all other indebtedness and
liabilities, present or future, direct or indirect, now or hereafter owing by
Fundco under the second Amended and Restated Fundco Credit Agreement, as
amended by Fundco Amendment No. 1, and for the due performance by Fundco of
all of its covenants and obligations under that Second Amended and Restated
Fundco Credit Agreement as amended by Fundco Amendment No. 1, with each
reference to "Credit Agreement" therein being deemed to refer to and include
the Second Amended and Restated Fundco Credit Agreement as amended by Fundco
Amendment No. 1, and each reference to "Canadian Forest Credit Agreement"
being deemed to refer to and include the Second Amended and Restated Canadian
Forest Credit Agreement as amended by Canadian Forest Amendment No. 1.
5. CANADIAN FOREST/ATCOR RESOURCES AGREEMENT (RE: CANADIAN FOREST)
The Consent and Agreement (Canadian Forest Credit Agreement) made
February 8, 1996 and executed by Canadian Forest and Atcor Resources Ltd. in
favour of Chase, as amended by the Confirmations, is hereby confirmed as a
continuing consent and agreement in favour of Chase for the timely payment of
the principal, interest (including interest on amounts in default) and all
other indebtedness and liabilities, present or future, direct or indirect,
now or hereafter owing by Fundco under the Second Amended and Restated Fundco
Credit Agreement, as amended by Fundco Amendment No. 1, and for the due
performance by Fundco of all of its covenants and obligations under that
Second Amended and Restated Fundco Credit Agreement as amended by Fundco
Amendment No. 1, with each reference to "Credit Agreement" therein being
deemed to refer to and include the Second Amended and Restated Fundco Credit
Agreement as amended by Fundco Amendment No. 1, and each reference to
"Canadian Forest Agreement" shall be deemed to refer to and include the Second
Amended and Restated Canadian Forest Credit Agreement as amended by Canadian
Forest Amendment No. 1.
6. FUNDCO DEMAND DEBENTURE
The Demand Debenture and Negative Pledge issued February 8, 1996
(the "FUNDCO DEBENTURE") by Fundco in favour of Chase, as amended by the
Confirmations, is hereby confirmed as continuing security in favour of Chase
for the timely payment of the principal, interest (including interest on
amounts in default) and all other indebtedness and liabilities, present or
future, direct or indirect, now or hereafter owing by Fundco under the
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Second Amended and Restated Fundco Credit Agreement, as amended by Fundco
Amendment No. 1, and for the due performance by Fundco of all of its
covenants and obligations under that Second Amended and Restated Fundco
Credit Agreement as amended by Fundco Amendment No. 1, with the following
deemed reference and amendment:
(a) each reference to "Credit Agreement" in the Fundco Debenture shall
be deemed to refer to and include the Second Amended and Restated
Fundco Credit Agreement as amended by Fundco Amendment No. 1;
(b) by deleting from the sixth and seventh lines of Section 1.1 "the
principal amount of Eighty Million Canadian dollars ($80,000,000)"
and replacing it with "the principal amount of One Hundred Sixty
Five Million Canadian dollars (Cdn. $165,000,000)" with the intent
and result that the Principal Amount owed by Fundco under and
secured by the Fundco Debenture and Negative Pledge is hereby
increased from Cdn. $80,000,000 to Cdn. $165,000,000;
and the Fundco Debenture is hereby supplemented and amended accordingly in
accordance with this Section 6 and Section 6A below.
6A. FUNDCO SUPPLEMENTAL CHARGES
Fundco hereby continues the original grants, assignments,
conveyances, transfers, mortgages, charges and security interests created by
the Fundco Debenture and, in consideration of the premises herein contained,
the amendments to the Fundco Debenture described in Fundco Amendment No. 1
including, but not limited to, the increase of the amount available under the
Second Amended and Restated Fundco Credit Agreement, and of $10.00 paid by
Chase to Fundco (the receipt and sufficiency of which is hereby acknowledged
by Fundco), and for securing repayment to Chase and the Lenders of the
increased principal amount of the Fundco Debenture referred to in Section
6(b) above, Fundco hereby grants, assigns, transfers, mortgages and charges
as and by way of:
(a) a first floating charge to and in favour of the Holder (as defined
in the Fundco Debenture), in and to all of Fundco's Property that
is described in Section 4.1(a) of the Fundco Debenture (subject to
Section 7.1 of the Fundco Debenture); and
(b) a first fixed and specific mortgage and charge to and in favour of
the Holder (as defined in the Fundco Debenture), and the Holder
hereby takes a continuing security interest, in all of Fundco's
Property described in Sections 4.1(b), (c), and (d) of the Fundco
Debenture (subject to Section 7.1 of the Fundco Debenture).
7. FUNDCO DEPOSIT AGREEMENT
The Deposit Agreement made February 8, 1996 by Fundco in favour of
Chase, as amended by the Confirmations, is hereby confirmed as continuing
security in favour of Chase for the timely payment of the principal, interest
(including interest on amounts in default) and all other indebtedness and
liabilities, present or future, direct or indirect, now or hereafter owing by
Fundco under the Second Amended and Restated Fundco Credit Agreement, as
amended by
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Fundco Amendment No. 1, and for the due performance by Fundco of all of its
covenants and obligations under that Second Amended and Restated Fundco
Credit Agreement as amended by Fundco Amendment No. 1, with each reference to
"Credit Agreement" in that Deposit Agreement being deemed to refer to and
include the Second Amended and Restated Fundco Credit Agreement as amended by
Fundco Amendment No. 1.
8. CHASE CONFIRMATION RE: INCREMENTAL INTEREST RATE
The letter acknowledgement of Chase dated February 8, 1996 to
Fundco, as amended by the Confirmations, is confirmed as a continuing
acknowledgement in favour of Fundco, with each reference to "Credit
Agreement" therein being deemed to refer to and include the Second Amended
and Restated Fundco Credit Agreement as amended by Fundco Amendment No. 1.
9. CANADIAN FOREST AND PROMARK NOTES
The existing Note dated July 17, 1996 issued by Canadian Forest,
and the existing Note dated July 17, 1996 issued by ProMark, in each case
pursuant to Section 2.09(a) of the Amended and Restated Credit Agreement
referred to in Recital 2(b) of this Agreement are hereby cancelled
concurrently with the issuance of new Notes in favour of Fundco to reflect
the amendment to Section 2.09(a) of the Second Amended and Restated Canadian
Forest Credit Agreement effected by Section 2.08 of Canadian Forest Amendment
No. 1.
The existing Note dated July 17, 1996 issued by Canadian Forest,
and the existing Note dated July 17, 1996 issued by ProMark, in each case
pursuant to Section 2.09(b) of the Amended and Restated Credit Agreement
referred to in Recital 2(b) of this Agreement, shall continue in full force
and effect, with each reference to "Amended and Restated Credit Agreement"
therein being deemed to refer to and include the Second Amended and Restated
Canadian Forest Credit Agreement as amended by Canadian Forest Amendment
No. 1.
10. CANADIAN FOREST AND PROMARK DEMAND DEBENTURES
The Demand Debenture and Negative Pledge issued February 8, 1996
by Canadian Forest in favour of Fundco, as amended by the Confirmations (the
"CANADIAN FOREST DEBENTURE"), and the Demand Debenture and Negative Pledge
issued July 17, 1996 by ProMark in favour of Fundco, as amended by the Second
Confirmation (the "PROMARK DEBENTURE") are hereby confirmed as continuing
security in favour of Fundco for the timely payment of the principal,
interest (including interest on amounts in default) and all other
indebtedness and liabilities, present or future, direct or indirect, now or
hereafter owing by the Borrowers under the Second Amended and Restated
Canadian Forest Credit Agreement, as amended by Canadian Forest Amendment No.
1, and for the due performance by the Borrowers of all of their covenants and
obligations under that Second Amended and Restated Canadian Forest Credit
Agreement as amended by Canadian Forest Amendment No. 1 with the following
deemed reference and amendment:
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(a) each reference to "Canadian Forest Credit Agreement" therein shall
be deemed to refer to and include the Second Amended and Restated
Canadian Forest Credit Agreement as amended by Canadian Forest
Amendment No.1;
(b) by deleting from the fifth and sixth lines of Section 1.1 of each
Debenture "the principal amount of Eighty Million Canadian dollars
($80,000,000)" and replacing it with "the principal amount of One
Hundred Sixty Five Million Canadian dollars (Cdn.$165,000,000)" with
the intent and result that the Principal Amount owed by each of
Canadian Forest and ProMark under and secured by the Canadian Forest
Debenture and Promark Debenture, respectively, is hereby increased
from Cdn. $80,000,000 to Cdn. $165,000,000;
and each of the Canadian Forest Debenture and the ProMark Debenture are
hereby supplemented and amended accordingly in accordance with this Section
10 and Section 10A and Section 10B below.
10A. CANADIAN FOREST SUPPLEMENTAL CHARGES
Canadian Forest hereby continues the grants, assignments,
conveyances, transfers, mortgages, charges and security interests created by
the Canadian Forest Debenture and, in consideration of the premises herein
contained, the amendments to the Second Amended and Restated Canadian Forest
Agreement described in Canadian Forest Amendment No. 1 including, but not
limited to, the increase of the amount available under the Second Amended and
Restated Canadian Forest Credit Agreement, and of $10.00 paid by Fundco to
Canadian Forest (the receipt and sufficiency of which is hereby acknowledged
by Fundco), and for securing repayment to Chase and the Lenders of the
increased principal amount of the Canadian Forest Debenture referred to in
Section 10(b) above, Canadian Forest hereby grants, assigns, transfers,
mortgages and charges as and by way of:
(a) a first floating charge to and in favor of the Holder (as defined
in the Canadian Forest Debenture), in and to all of Canadian Forest's
Property that is described in Section 4.1(a) of the Canadian Forest
Debenture (subject to Section 7.1 of the Canadian Forest Debenture);
and
(b) a first fixed and specific mortgage and charge to and in favour of
the Holder (as defined in the Canadian Forest Debenture), and the
Holder hereby takes a continuing security interest in, all of Canadian
Forest's Property described in Sections 4.1(b), (c), and (d) of the
Canadian Forest Debenture (subject to Section 7.1 of the Canadian
Forest Debenture);
PROVIDED that the charges referred to in (a) and (b) above the Excluded
Property (as defined in the Canadian Forest Debenture).
THIRD CONFIRMATION ETC.
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10B. PROMARK SUPPLEMENTAL CHARGES
ProMark hereby continues the grants, assignments,conveyances,
transfers, mortgages, charges and security interests created by the Promark
Debenture and, in consideration of the premises herein contained the
amendments to the Second Amended and Restated Canadian Forest Agreement
described in Canadian Forest Amendment No. 1 including, but not limited to,
the increase of the amount available under the Second Amended and Restated
Canadian Forest Credit Agreement, and of $10.00 paid by Fundco to ProMark
(the receipt and sufficiency of which is hereby acknowledged by ProMark), and
for securing repayment to Chase and the Lenders of the increased principal
amount of the ProMark Debenture referred to in Section 10(b) above, ProMark
hereby grants, assigns, transfers, mortgages and charges as and by way of:
(a) a first floating charge to and in favour of the Holder (as defined
in the ProMark Debenture), in and to all of ProMark's Property that
is described in Section 4.1(a) of the ProMark Debenture (subject to
Section 7.1 of the ProMark Debenture); and
(b) a first fixed and specific mortgage and charge to and in favour of
the Holder (as defined in the ProMark Debenture), and the Holder
hereby takes a continuing security interest in, all of ProMark's
Property described in Section 4.1(b), (c), and (d) of the ProMark
Debenture (subject of Section 7.1 of the ProMark Debenture);
PROVIDED that the charges referred to in (a) and (b) above exclude the
Excluded Property (as defined in the ProMark Debenture).
11. CANADIAN FOREST AND PROMARK DEPOSIT AGREEMENTS
The Deposit Agreement made February 8, 1996 by Canadian Forest in
favour of Fundco, as amended by the Confirmations, and the Deposit Agreement
made July 17, 1996 by ProMark in favour of Fundco, as amended by the Second
Confirmation, are hereby confirmed as continuing security in favour of Fundco
for the timely payment of the principal, interest (including interest on
amounts of default) and all other indebtedness and liabilities, present or
future, direct or indirect, now or hereafter owing by the Borrowers under the
Second Amended and Restated Canadian Forest Credit Agreement, as amended by
Canadian Forest Amendment No. 1, and for the due performance by the Borrowers
of all of their covenants and obligations under that Second Amended and
Restated Canadian Forest Credit Agreement as amended by Canadian Forest
Amendment No. 1, with each reference to "Credit Agreement" therein being
deemed to refer to and include the Second Amended and Restated Canadian
Forest Credit Agreement as amended by Canadian Forest Amendment No. 1.
12. HOLDCO GUARANTEE AND PLEDGE AGREEMENT
The Guarantee and Pledge Agreement dated as of April 1, 1997 by
Holdco in favour of Fundco (the "HOLDCO GUARANTEE AND PLEDGE AGREEMENT"), is
hereby confirmed as a continuing guarantee in favour of Fundco with that
security and all payments thereunder being assigned to Chase pursuant to the
Assignment of Security (Canadian Forest Credit Agreement) referred to in
Section 3 hereof and the Assignment of Payments (Canadian Forest Credit
Agreement) referred to in Section 4 hereof, PROVIDED that the pledge of and
grant of a security
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interest in the shares of Canadian Forest (the "PLEDGED STOCK") and other
collateral (as defined therein) contained therein (the "ORIGINAL PLEDGE") is
hereby terminated and wholly discharged and in that regard Section 3.10,
Article 4, Article 5, Article 7 and Section 8.13 of the Holdco Guarantee and
Pledge Agreement are hereby deleted without affecting the ongoing validity of
the Holdco Guarantee and Pledge Agreement as to all other parts thereof.
Chase is hereby authorized to transfer possession of all of the Pledged Stock
to The Chase Manhattan Bank, 66 shares of which are to be held by it as
continuing collateral security for the obligations secured by the Pledge
Agreement provided by Holdco to The Chase Manhattan Bank concurrently with
the execution and effectiveness of this Agreement (the "U.S. PLEDGE
AGREEMENT").
13. HOLDCO POWERS OF ATTORNEY
Each Power of Attorney dated April 1, 1997 given by Holdco in
respect of the Pledged Stock in connection with the security interests
granted by it to Fundco with regard to the Pledged Stock, is terminated
concurrently with the granting of a Power of Attorney by Holdco in respect of
the share certificate issued in respect of the Pledged Stock and delivered
pursuant to The Chase Manhattan Bank pursuant to the U.S. Pledge Agreement.
14. CANADIAN FOREST POWER OF ATTORNEY
The Powers of Attorney dated February 8, 1996 given by Canadian
Forest in respect of the share certificates of ProMark in connection with the
security interest granted by Canadian Forest to Fundco shall continue in full
force and effect.
15. FOREST LIMITED RECOURSE SECURED GUARANTEE
The Limited Recourse Secured Guarantee of Forest Oil dated as of
April 1, 1997 (the "FOREST LIMITED RECOURSE SECURED GUARANTEE") is hereby
confirmed as continuing security in favour of Fundco for the timely payment
of the principal, interest (including interest on amounts in default) and all
other indebtedness and liabilities, present or future, direct or indirect,
now or hereafter owing by the Borrowers under the Second Amended and Restated
Canadian Forest Credit Agreement, as amended by Canadian Forest Amendment No.
1, and for due performance by the Borrowers of all their covenants and
obligations under that Second Amended and Restated Canadian Forest Credit
Agreement as amended by Canadian Forest Amendment No. 1, with the following
deemed reference and amendments:
(a) each reference to "Credit Agreement" therein shall be deemed to refer
to and include the Second Amended and Restated Canadian Forest
Credit Agreement as amended by Canadian Forest Amendment No. 1;
(b) the first paragraph of the recitals is hereby amended by deleting
"Cdn. $80,000,000" and replacing it with "Cdn. $165,000,000";
(c) the definition of "Debenture" is amended by replacing "Cdn.
$80,000,000" with "Cdn. $165,000,000";
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(d) Section 4.03 is hereby deleted and replaced with the following:
"4.03 RIGHTS NOT AFFECTED. Nothing in Section 4.02
shall be construed as: (i) limiting Saskco's rights
to enforce the Loan Documents against any of the
parties hereto other than the Guarantor; and
(ii) limiting the rights of The Chase Manhattan Bank
of Canada to enforce that certain Guarantee dated as
of August 19, 1997 granted in its favour by Forest
Oil Corporation."
16. FOREST LIMITED RECOURSE DEMAND DEBENTURE
The Limited Recourse Demand Debenture and Negative Pledge issued as of
April 1, 1997 by Forest Oil in favour of Fundco (the "FOREST OIL DEBENTURE")
is hereby confirmed as continuing security in favour of Fundco for the timely
payment of the principal, interest (including interest on amounts in default)
and all other indebtedness and liabilities, present or future, direct or
indirect, now or hereafter owing by the Borrowers under the Second Amended
and Restated Canadian Forest Credit Agreement, as amended by Canadian Forest
Amendment No. 1, and for due performance by the Borrowers of all their
covenants and obligations under the Second Amended and Restated Canadian
Forest Credit Agreement as amended by Canadian Forest Amendment No. 1, with
the following deemed reference and amendments;
(a) each reference to "Credit Agreement" therein shall be deemed to
refer to and include the Second Amended and Restated Canadian Forest
Credit Agreement as amended by Canadian Forest Amendment No. 1;
(b) by deleting from the fourth and fifth lines of Section 1.1 "the
principal amount of Eighty Million Canadian dollars ($80,000,000)"
and replacing it with "the principal amount of One Hundred Sixty
Five Million Canadian dollars (Cdn. $165,000,000)" with the intent
and result that the Principal Amount owed by Forest Oil under and
secured by the Forest Oil Debenture is hereby increased from
Cdn. $80,000,000 to Cdn. $165,000,000;
and the Forest Oil Debenture is hereby supplemented and amended accordingly
in accordance with this Section 16 and Section 16A below.
16A. FOREST OIL SUPPLEMENTAL CHARGES
Forest Oil hereby continues the grants, assignments, conveyances,
transfers, mortgages, charges and security interests created by the Forest
Oil Debenture and, in consideration of the premises herein contained and of
$10.00 paid by Fundco to Forest Oil (the receipt and sufficiency of which is
hereby acknowledged by Forest Oil), and for securing repayment to Chase and
the Lenders of the increased principal amount of the Forest Debenture
referred to in Section 16(b) above, Forest Oil hereby grants, assigns,
transfers, mortgages and charges as and by way of:
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(a) a first floating charge to and in favour of the Holder (as defined
in the Forest Oil Debenture), in and to all of Forest Oil's Property
that is described in Section 4.1(a) of the Forest Oil Debenture
(subject to Section 7.1 of the Forest Oil Debenture); and
(b) a first fixed and specific mortgage and charge to and in favour of
the Holder (as defined in the Forest Oil Debenture), and the Holder hereby
takes a continuing security interest in, all of Forest Oil's Property
described in Section 4.1(b), (c), and (d) of the Forest Oil Debenture
(subject to Section 7.1 of the Forest Oil Debenture).
17. FOREST OIL DEPOSIT AGREEMENT
The Deposit Agreement made as of April 1, 1997 by Forest Oil in favour
of Fundco is hereby confirmed as continuing security in favour of Fundco for
the timely payment of the principal, interest (including interest on amounts
in default) and all other indebtedness and liabilities, present or future,
direct or indirect, now or hereafter owing by the Borrowers under the Second
Amended and Restated Canadian Forest Credit Agreement, as amended by Canadian
Forest Amendment No. 1, and for the due performance by the Borrowers of all
their covenants and obligations under that Second Amended and Restated
Canadian Forest Credit Agreement as amended by Canadian Forest Amendment
No. 1, with the reference to "Cdn. $80,000,000" in the second paragraph of
the recitals therein being hereby deleted and replaced by "Cdn. $165,000,000"
and each reference to "Credit Agreement" therein being deemed to refer to the
Second Amended and Restated Canadian Forest Credit Agreement as amended by
Canadian Forest Amendment No. 1.
18. PRINCIPLE AMOUNT
Any reference made in the Security Documents (as they refer to any of
the Debentures referred to in this Agreement) to "Eighty Million Canadian
dollars", "Cdn. $80,000,000" and similar expressions of such amount in
Canadian funds shall be deemed to be replaced by, respectively, a reference
to "One hundred Sixty Five Million Canadian dollars", "Cdn. $165,000,000", or
such similar expression of such amount in Canadian funds as the context may
require.
19. FOREST GUARANTEE AND MORTGAGE AMENDMENTS
The parties acknowledge that, in connection with the transaction
referred to in Recital 4 of this Agreement, Forest Oil is granting the
following new security as security for the fulfillment of all debts and
liabilities, present and future, direct and indirect, absolute and contingent,
matured or not, at any time owing by Fundco under the Second Amended and
Restated Fundco Credit Agreement as amended by Fundco Amendment No. 1:
(a) a Guarantee of Forest Oil dated as of August 19, 1997;
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(b) the Deed of Trust, Mortgage, Security Agreement, Assignment of
Production, Financing Statement (Personal Property Including
Hydrocarbons) and Fixture Filing dated as of June 3, 1994 from
Forest Oil to Secured Party and the Trustee (as defined therein) as
supplemented and amended to the date hereof including pursuant to
Amendment No. 3 dated as of August 19, 1997; and
(c) the Deed of Trust, Mortgage, Security Agreement, Assignment of
Production, Financing Statement (Personal Property Including
Hydrocarbons) and Fixture Filing dated as of June 3, 1994 from
Forest Oil to Secured Party and the Trustee (as defined therein) as
supplemented and amended to the date hereof including pursuant to
Amendment No. 4 dated as of August 19, 1997.
20. GOVERNING LAW
This Agreement shall be governed by and interpreted in accordance with
the laws of the Province of Alberta and the laws of Canada applicable therein
and shall be treated as an Alberta contract. Each party hereby irrevocably
submits to the non-exclusive jurisdiction of the courts of the Province of
Alberta, without prejudice to the rights of a party to take proceedings in
any other jurisdictions.
21. SEVERABILITY
If one or more of the provisions of this Agreement is, or is adjudged to
be, invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby, and such invalid, illegal or unenforceable
provision shall, to the extent permitted at law, be severable.
22. SECURITY IN ADDITION
The rights hereby constituted are in addition to and not in substitution
for any other security, or for any other agreement between the parties
whether or not creating any security interest in all or part of the Property
of any party hereto whether heretofore or hereafter made, and such security
and such agreement shall be deemed to be continued and not affected hereby
unless expressly provided to the contrary herein. The taking of any action or
proceedings or refraining from so doing, or any other dealing with any other
security or any part thereof shall not release or affect this Agreement and
neither the taking of any proceedings hereunder or under the documents
continued hereunder for the realization of any security shall release or
affect any other security held by Chase.
23. CONTINUING SECURITY
Without limiting the generality of the foregoing, Forest Oil, Holdco,
Canadian Forest, ProMark and Fundco acknowledge and agree with the Agent that
the Security Documents (as defined in the Second Amended and Restated Fundco
Credit Agreement as amended by Fundco Amendment No. 1), and including the
security provided by Forest Oil that is referred to in Section 19 above,
except as expressly changed, altered, amended, modified or supplemented by
the Confirmations and by this Agreement, are and shall remain in full force
and effect as
THIRD CONFIRMATION ETC.
-13-
amended as provided in the Confirmations and in this Agreement, and shall
continue to constitute collateral security for the fulfillment of all debts and
liabilities, present and future, direct and indirect, absolute and
contingent, matured or not, at any time owing by Fundco under the Second
Amended and Restated Fundco Credit Agreement as amended by the Fundco
Amendment No. 1, howsoever arising. Each of the Fundco Debenture, the
Canadian Forest Debenture, the ProMark Debenture and the Forest Oil Debenture
(collectively, the "DEBENTURES") shall henceforth be read in conjunction with
the Confirmations and this Agreement (the applicable provisions of those
Confirmations and this Agreement constituting supplemental debentures to
those Debentures, respectively) and the Debentures, the Confirmations and
this Agreement shall henceforth have effect so far as is practicable as if
all of the provisions of the Debentures as originally executed, and as
amended by the First Confirmation, the Second Confirmation and this Agreement
were contained in a single instrument in respect of each of those
Debentures.
24. WAIVERS AND CONSENTS
No waiver of any provision hereof, or consent to any action or inaction
shall be effective unless the same is in writing and signed by the party
granting the same. Such waivers and consents shall not extend to any matters
other than those in respect of which the same were given, and the same may be
subject to such conditions as the party giving the same may stipulate.
25. FURTHER ASSURANCES
Each of Forest Oil, Holdco, Canadian Forest, ProMark and Fundco shall
from time to time, whether before or after the occurrence of any default in
the performance of any obligation to Chase under the Second Amended and
Restated Fundco Credit Agreement or the Second Amended and Restated Canadian
Forest Credit Agreement, do all such acts and things and execute and deliver
all such deeds, transfers, assignments and instruments as Chase may require
to give effect to the intent of this Agreement.
THIRD CONFIRMATION ETC.
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument and any of
the parties hereto may execute this Agreement by signing any such counterpart.
IN WITNESS WHEREOF the parties have executed this Agreement.
3189503 CANADA LTD.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------
Xxxxxxx X. Xxxxxx
Secretary
CANADIAN FOREST OIL LTD.
By: /s/ Xxxxxx X. Xxxxx
------------------------
Xxxxxx X. Xxxxx
Vice President, Finance
PRODUCERS MARKETING LTD.
By: /s/ Xxxxxx X. Xxxxx
------------------------
Xxxxxx X. Xxxxx
Secretary
FOREST OIL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
------------------------
Xxxxxx X. Xxxxxxx
Vice President and Treasurer
611852 SASKATCHEWAN LTD.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Xxxxxxx X. Xxxxxx
Secretary
THE CHASE MANHATTAN BANK OF
CANADA, AS ADMINISTRATIVE AGENT
By: /s/ Xxxxxxxxx Xxxx /s/ Xxxx X. Xxxx
-------------------------------------
Xxxxxxxxx Xxxx Xxxx X. Xxxx
Vice President Vice President
THIRD CONFIRMATION ETC.
