Exhibit 4.14
[CANADIAN CREDIT AGREEMENT]
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CREDIT AGREEMENT
dated as of October 10, 2000
among
CANADIAN FOREST OIL LTD.,
THE SUBSIDIARY BORROWERS FROM TIME TO TIME PARTIES HERETO,
THE LENDERS PARTY HERETO,
BANK OF MONTREAL,
as Canadian Syndication Agent,
THE TORONTO-DOMINION BANK,
as Canadian Documentation Agent,
THE CHASE MANHATTAN BANK OF CANADA
as Canadian Administrative Agent
and
THE CHASE MANHATTAN BANK,
as Global Administrative Agent
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CHASE SECURITIES INC.,
as Sole Book Manager and Lead Arranger
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TABLE OF CONTENTS
ARTICLE I Definitions...................................................................................1
1.1. Defined Terms.................................................................................1
1.2. Classification of Loans and Borrowings.......................................................16
1.3. Terms Generally..............................................................................16
1.4. [Intentionally omitted.].....................................................................16
1.5. Provision with Respect to Borrowers..........................................................16
1.6. U.S. Credit Agreement Definitions............................................................16
ARTICLE II The Credits..................................................................................17
2.1. Commitments..................................................................................17
2.2. Loans and Borrowings.........................................................................17
2.3. Requests for Borrowings......................................................................18
2.4. Letters of Credit............................................................................19
2.5. Funding of Borrowings........................................................................23
2.6. Interest Elections...........................................................................23
2.7. [Intentionally omitted.].....................................................................25
2.8. Termination and Reduction of Commitments.....................................................25
2.9. Repayment of Loans; Evidence of Debt.........................................................25
2.10. Prepayment of Loans..........................................................................26
2.11. Fees.........................................................................................28
2.12. Interest.....................................................................................30
2.13. Alternate Rate of Interest...................................................................31
2.14. Illegality...................................................................................32
2.15. Increased Costs..............................................................................33
2.16. Break Funding Payments.......................................................................34
2.17. Taxes........................................................................................34
2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs..................................36
2.19. Mitigation Obligations; Replacement of Lenders...............................................37
2.20. Currency Conversion and Currency Indemnity...................................................38
2.21. Addition of Lenders and Increase in Commitments..............................................39
2.22. Bankers' Acceptances.........................................................................40
ARTICLE III Representations and Warranties...............................................................46
3.1. Organization; Powers.........................................................................46
3.2. Authorization; Enforceability................................................................46
3.3. Approvals; No Conflicts......................................................................46
3.4. Properties...................................................................................47
3.5. Compliance with Laws and Agreements..........................................................47
3.6. Unfunded Pension Liabilities.................................................................47
3.7. Disclosure...................................................................................47
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3.8. Priority; Security Matters...................................................................47
3.9. Solvency.....................................................................................47
3.10. Representations and Warranties in U.S. Credit Agreement......................................48
ARTICLE IV Conditions...................................................................................48
4.1. Effectiveness................................................................................48
4.2. Initial Loan.................................................................................48
4.3. Each Credit Event............................................................................51
ARTICLE V Affirmative Covenants........................................................................51
5.1. Financial Reporting; Ratings Change; Notices and Other Information...........................51
5.2. Notice of Material Events....................................................................52
5.3. Existence; Conduct of Business...............................................................52
5.4. Casualty and Condemnation....................................................................52
5.5. Books and Records; Inspection and Audit Rights...............................................53
5.6. Compliance with Laws.........................................................................53
5.7. Use of Proceeds and Letters of Credit........................................................53
5.8. Additional Subsidiaries......................................................................53
5.9. Further Assurances...........................................................................54
5.10. Covenants in U.S. Credit Agreement...........................................................54
ARTICLE VI [Not Used]...................................................................................55
ARTICLE VII Negative Covenants...........................................................................55
7.1. Transactions with Affiliates.................................................................55
7.2. Restrictive Agreements.......................................................................55
7.3. Subordinated Indebtedness....................................................................56
7.4. No Action to Affect Security Documents.......................................................56
ARTICLE VIII Events of Default............................................................................56
8.1. Listing of Events of Default.................................................................56
8.2. Action if Bankruptcy.........................................................................58
8.3. Action if Other Event of Default.............................................................58
ARTICLE IX Agents.......................................................................................58
ARTICLE X Miscellaneous................................................................................61
10.1. Notices......................................................................................61
10.2. Waivers; Amendments..........................................................................64
10.3. Expenses; Indemnity; Damage Waiver...........................................................65
10.4. Successors and Assigns.......................................................................67
10.5. Survival.....................................................................................69
10.6. Counterparts; Effectiveness..................................................................69
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10.7. Severability.................................................................................70
10.8. Right of Setoff..............................................................................70
10.9. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS......................................................................................70
10.10. WAIVER OF JURY TRIAL.........................................................................71
10.11. Headings.....................................................................................71
10.12. Confidentiality..............................................................................71
10.13. Interest Rate Limitation.....................................................................72
10.14. Collateral Matters; Hedging Agreements.......................................................74
10.15. Arranger; Canadian Documentation Agent; Canadian Syndication Agent...........................74
10.16. Intercreditor Agreement; Security Documents..................................................74
10.17. Status as Senior Indebtedness................................................................74
10.18. NO ORAL AGREEMENTS...........................................................................74
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SCHEDULES AND EXHIBITS
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EXHIBITS:
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Exhibit A-1 Form of Legal Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇
Exhibit A-2 Form of Legal Opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
Exhibit B Form of Lender Certificate
Exhibit C Form of Compliance Certificate
Exhibit D Form of Assignment and Acceptance
Exhibit E-1 Form of Borrowing Request
Exhibit E-2 Form of Interest Election Request
Exhibit F Form of Guaranty -- Parent
Exhibit G Form of Guaranty -- Subsidiary
Exhibit H Form of Debenture
Exhibit I Form of Deposit Agreement
Exhibit J [Intentionally omitted]
Exhibit K Power of Attorney Terms -- Bankers' Acceptances
Exhibit L Form of Bankers' Acceptance Request
Exhibit M Calculation of Net Proceeds of Bankers' Acceptances
Exhibit N Details of Issue of Bankers' Acceptance
SCHEDULES:
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Schedule 2.1 Commitments
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of October 10, 2000, is among CANADIAN
FOREST OIL LTD., a corporation organized under the laws of the Province of
Alberta, Canada ("CANADIAN FOREST"), each of the SUBSIDIARY BORROWERS from time
to time parties hereto (the "SUBSIDIARY BORROWERS") (Canadian Forest and the
Subsidiary Borrowers, collectively the "BORROWER"), the LENDERS party hereto,
BANK OF MONTREAL, as Canadian Syndication Agent, THE TORONTO-DOMINION BANK, as
Canadian Documentation Agent, THE CHASE MANHATTAN BANK OF CANADA, as Canadian
Administrative Agent, and THE CHASE MANHATTAN BANK, as Global Administrative
Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINED TERMS. As used in this Agreement, the
following terms have the meanings specified below:
"ACCEPTANCE DATE" means any date, which must be a Business Day, on
which a Bankers' Acceptance is or is to be issued.
"ACCEPTING LENDER" means any Lender which has accepted a Bankers'
Acceptance issued by Canadian Forest or a Subsidiary Borrower under this
Agreement.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative Questionnaire in
a form supplied by the Global Administrative Agent.
"AGENTS" means each of the Global Administrative Agent, the Canadian
Administrative Agent, the Canadian Syndication Agent, the Canadian Documentation
Agent and the Technical Lenders.
"AGREED CURRENCY" is defined in SECTION 2.20(a).
"AGREEMENT" means this Credit Agreement, as it may be amended,
supplemented, restated or otherwise modified and in effect from time to time.
"ALLOCATED CANADIAN BORROWING BASE" means from time to time the
"Allocate Canadian Borrowing Base" as determined in accordance with
SECTION 2.7(d)(ii) of the U.S. Credit Agreement.
"ALLOCATED U.S. BORROWING BASE" means from time to time the "Allocated
U.S. Borrowing Base" as determined in accordance with SECTION 2.7(d)(i) of the
U.S. Credit Agreement.
"APPLICABLE LENDING OFFICE" means, for each Lender and for each Type of
Loan, such office of such Lender (or of an Affiliate of such Lender) as such
Lender may from time to time specify in writing to the Global Administrative
Agent, the Canadian Administrative Agent and Borrower as the office by which its
Loans of such Type are to be made and/or issued and maintained.
"APPLICABLE PERCENTAGE" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently set forth in the Register,
giving effect to any assignments made in accordance with SECTION 10.4 or any
increases or decreases in Commitments made in accordance with this Agreement.
"APPLICABLE RATE" means, for any day and with respect to any
Eurodollar Loans, any Canadian Prime Loans, any USBR Loans, any Bankers'
Acceptance, any Unavailable Fees or any Commitment Fees payable hereunder, as
the case may be, the applicable rate per annum set forth below under the caption
"Eurodollar Loans", "Canadian Prime Loans", "USBR Loans", "Bankers' Acceptances
Stamping Fee" or "Commitment Fees & Unavailable Fees", as the case may be, based
on the Applicable Rating Level on such date
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APPLICABLE RATIO OF TOTAL EURODOLLAR CANADIAN USBR BANKERS' COMMITMENT
RATING DEBT TO LOANS (IN PRIME LOANS LOANS (IN ACCEPTANCE FEES &
LEVEL: EBITDA BASIS POINTS) (IN BASIS BASIS POINTS) STAMPING UNAVAILABLE
POINTS) FEE (IN BASIS FEES (IN BASIS
POINTS) POINTS)
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Level I 2.0 > x 87.5 0.0 0.0 87.5 25.0
2.0 < or = to x < 2.5 100.0 0.0 0.0 100.0 25.0
2.5 < or = to x 112.5 12.5 12.5 112.5 25.0
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Level II 2.0 > x 112.5 12.5 12.5 112.5 37.5
2.0 < or = to x < 2.5 137.5 37.5 37.5 137.5 37.5
2.5 < or = to x 150.0 50.0 50.0 150.0 37.5
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Level III 2.0 > x 125.0 25.0 25.0 125.0 37.5
2.0 < or = to x < 2.5 150.0 50.0 50.0 150.0 37.5
2.5 < or = to x 175.0 75.0 75.0 175.0 37.5
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As used in this definition, "x" means, at any time, the ratio of Total Debt to
EBITDA calculated pursuant to SECTION 6.1 of the U.S. Credit Agreement.
For purposes of the foregoing, any change in the Applicable Rate will
occur automatically without prior notice upon any change in the Applicable
Rating Level. Each change in the Applicable Rate shall apply during the period
commencing on the effective date of such change and ending on the date
immediately preceding the effective date of the next such change.
Notwithstanding anything in this definition to the contrary, at all times on or
before December 31, 2000, the Applicable Rate
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for (i) Eurodollar Loans and Bankers Acceptances shall equal 150 basis points,
(ii) Canadian Prime Loans and USBR Loans shall equal 50 basis points, and (iii)
Commitment Fees and Unavailable Fees shall equal 37.5 basis points.
"ARRANGER" means Chase Securities Inc.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by SECTION 10.4), and accepted by the Global Administrative Agent and
the Canadian Administrative Agent, in substantially the form of EXHIBIT D or any
other form approved by the Global Administrative Agent and the Canadian
Administrative Agent.
"AUTHORIZED OFFICER" means, with respect to a Borrower, the Chairman,
the President, any Vice President or the Treasurer of such Borrower or any other
officer of such Borrower specified as such to the Canadian Administrative Agent
in writing by any of the aforementioned officers of Borrower or, with respect to
Parent, the Chairman, the President, any Vice President or the Treasurer of
Parent or any other officer of Parent specified as such to the Global
Administrative Agent in writing by any of the aforementioned officers of Parent.
"AVAILABILITY PERIOD" means the period from and including the Global
Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.
"BA EXPOSURE" means, with respect to any Accepting Lender, the
Principal Amount of Bankers' Acceptances and BA Loans to be paid by a Borrower
to the Canadian Administrative Agent at the Principal Office for which such
Borrower has not reimbursed such Accepting Lender.
"BA LOAN" is defined in SECTION 2.22(h) hereof.
"BA MATURITY DATE" means the date on which a Bankers' Acceptance is
payable.
"BA NET PROCEEDS" means, in respect of any Bankers' Acceptance, the
amount determined in accordance with the formula set forth in EXHIBIT M LESS the
Stamping Fees applicable to each Bankers' Acceptances.
"BANKERS' ACCEPTANCES" means bankers' acceptances denominated in
Canadian Dollars in the form of either a depository ▇▇▇▇, as defined in the
DEPOSITORY BILLS AND NOTES ACT (Canada), or a blank non-interest bearing ▇▇▇▇ of
exchange, as defined in the BILLS OF EXCHANGE ACT (Canada), in either case
issued by a Borrower and accepted by a Lender (and, if applicable, purchased by
a Lender) at the request of such Borrower, such depository ▇▇▇▇ or ▇▇▇▇ of
exchange to be substantially in the standard form of such Lender.
"BANKERS' ACCEPTANCE LIABILITY" means, with respect to any Bankers'
Acceptance, the obligation of a Borrower to pay to the Canadian Administrative
Agent at the Principal Office the
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Principal Amount of any Bankers' Acceptances for which such Borrower has not
reimbursed the Accepting Lender.
"BANKERS' ACCEPTANCE RATE" means:
(i) for a Lender which is a Schedule I Lender, the arithmetic
average of the rates for the Schedule I Reference Lenders
which are listed in Schedule I to the Bank Act (Canada) as
quoted on Reuters Services page CDOR as at 10:00 a.m. on the
Acceptance Date for the appropriate term of the requested
Bankers' Acceptance; and
(ii) for a Lender which is a Schedule II Lender, the arithmetic
average of the actual discount rates applicable to Bankers'
Acceptances accepted by the Schedule II Reference Lenders
which are listed in Schedule II of the Bank Act (Canada) as at
10:00 a.m. on the Acceptance Date for the appropriate term of
the requested Bankers' Acceptance, but not to exceed the sum
of (a) Banker's Acceptance Rate in paragraph (i) of this
definition PLUS (b) 10 basis points per annum.
"BANKERS' ACCEPTANCE REQUEST" is defined in SECTION 2.22(b) and
contains the information set forth in EXHIBIT L.
"BANKRUPTCY INSOLVENCY ACT (CANADA)" means, collectively, the
Bankruptcy and Insolvency Act (Canada) and the Companies' Creditor Arrangement
Act (Canada), each as amended from time to time and any similar statute of
Canada or any province thereof.
"BORROWER" has the meaning given to such term in the preamble as
further described in SECTION 1.5.
"BORROWER ARRANGEMENT" is defined in SECTION 2.22(c).
"BORROWING" means Loans of the same Type, made, converted or continued
on the same date and, in the case of Eurodollar Loans, BA Loans or Bankers'
Acceptances, as to which a single Interest Period is in effect.
"BORROWING REQUEST" means a request by Borrower for a Borrowing in
accordance with SECTION 2.3, in substantially the form of EXHIBIT E-1 or any
other form approved by the Canadian Administrative Agent and the Global
Administrative Agent.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other
day on which commercial banks in ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ are
authorized or required by law to remain closed; PROVIDED that, (a) when used in
connection with a Eurodollar Loan, the term "BUSINESS DAY" shall also exclude
any day on which banks are not open for dealings in dollar deposits in the
London interbank market, (b) when used in connection with a Canadian Prime Loan,
BA Loan or Banker's Acceptance, the term "BUSINESS DAY" shall also exclude any
day on which
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commercial banks in Calgary, Canada and Toronto, Canada are authorized or
required by law to remain closed, and (c) when used in connection with a USBR
Loan, the term "BUSINESS DAY" shall also exclude any day on which commercial
banks in Calgary, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and New York, New York are authorized
or required by law to remain closed.
"CANADIAN ADMINISTRATIVE AGENT" means The Chase Manhattan Bank of
Canada, in its capacity as Canadian administrative agent for the Lenders
hereunder and any successor thereto.
"CANADIAN BORROWING BASE DEFICIENCY" means the amount by which (a) the
aggregate Credit Exposures of the Lenders exceeds (b) the then current Allocated
Canadian Borrowing Base.
"CANADIAN DOCUMENTATION AGENT" means The Toronto-Dominion Bank, in its
capacity as Canadian documentation agent for the Lenders hereunder and includes
any successors thereto.
"CANADIAN DOLLARS" or "C$" refers to lawful money of Canada.
"CANADIAN FOREST" means Canadian Forest Oil Ltd, a corporation
organized under the laws of the Province of Alberta, Canada.
"CANADIAN LIEN SEARCHES" means central and local current financing
statement searches from each province in which any Collateral or a Borrowing
Base Property owned by a Borrower or any Restricted Subsidiary of a Borrower is
located, and such other jurisdictions as the Global Administrative Agent may
request, covering each Loan Party together with copies of all financing
statements listed in such searches.
"CANADIAN PRIME", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Canadian Prime Rate.
"CANADIAN PRIME RATE" means the greater of (a) per annum floating rate
of interest established from time to time by the Canadian Administrative Agent
as the base rate the Canadian Administrative Agent will use to determine rates
of interest on Canadian Dollar loans to its customers in Canada and (b) the sum
of (i) the discount rate expressed as a rate of interest per annum payable by
the purchasers of thirty-day bankers' acceptances, duly accepted by the Canadian
Administrative Agent, as established by the Canadian Administrative Agent, and
(ii) 100 basis points. Without notice to Borrower or any other Person, the
Canadian Prime Rate shall change automatically from time to time as and in the
amount by which said prime rate shall fluctuate. The Canadian Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. The Canadian Administrative Agent may make
commercial loans and other loans at rates of interest at, above or below the
Canadian Prime Rate. For purposes of this Agreement, any change in any interest
rate due to a change in the Canadian Prime Rate shall be effective on the date
such change in the Canadian Prime Rate is announced.
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"CANADIAN SYNDICATION AGENT" means Bank of Montreal, in its capacity as
Canadian syndication agent for the Lenders hereunder and includes any successors
thereto.
"CASUALTY EVENT" means any loss, casualty or other insured damage to,
or any taking under power of eminent domain or by condemnation or similar
proceeding of, any Property or asset of Parent or any of its Restricted
Subsidiaries having a fair market value in excess of U.S. $1,000,000 (or its
equivalent in other currencies).
"CHANGE IN LAW" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or any Issuing
Bank (or, for purposes of SECTION 2.15(b), by any Applicable Lending Office of
such Lender or any Issuing Bank or by such Lender's or any Issuing Bank's
holding company, if any) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority made or issued after
the date of this Agreement.
"COLLATERAL" means any and all "Mortgaged Property" and "Collateral",
as defined in all Security Documents.
"COMBINED COMMITMENTS" means, with respect to each Combined Lender, the
commitment of such Combined Lender to make Loans (or in the case of U.S.
Lenders, "Loans" (as defined in the U.S. Credit Agreement)), expressed as an
amount representing the maximum aggregate amount of such Combined Lender's
Credit Exposure (or in the case of U.S. Lenders, "Credit Exposure" (as defined
in the U.S. Credit Agreement)) under the Combined Credit Agreements with amounts
outstanding in Canadian Dollars being converted into an Equivalent Amount
(calculated by the Global Administrative Agent) of U.S. Dollars solely for this
purpose, as such commitment may be reduced, increased or terminated from time to
time pursuant to the Combined Loan Documents. The initial amount of each
Combined Lender's Commitment is set forth on SCHEDULE 2.1 to the applicable
Combined Credit Agreement, or in a Assignment and Acceptance (as defined in this
Agreement and the U.S. Credit Agreement) or pursuant to which such Combined
Lender shall have assumed its Combined Commitment, as applicable. The initial
aggregate amount of the Combined Lenders' Combined Commitments is
U.S.$600,000,000.
"COMBINED CREDIT AGREEMENTS" means this Agreement and the U.S. Credit
Agreement.
"COMBINED CREDIT EXPOSURES" means the Equivalent Amount in U.S. Dollars
of the Credit Exposures and the "Credit Exposures" (as defined in the U.S.
Credit Agreement).
"COMBINED LENDERS" means the Lenders hereunder and the U.S. Lenders.
"COMBINED LOAN DOCUMENTS" means the Loan Documents and the U.S. Loan
Documents.
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"COMBINED LOANS" means the loans made by the Combined Lenders to
Borrower and Parent pursuant to the Combined Loan Documents.
"COMBINED OBLIGATIONS" means the aggregate of the Equivalent Amount of
the Obligations (expressed in U.S. Dollars) and the U.S. Obligations.
"COMMITMENT" means, with respect to each Lender, the commitment of such
Lender to make Loans, to acquire participations in Letters of Credit hereunder,
and to accept Bankers' Acceptances or make a BA Loan hereunder, expressed as an
amount representing the maximum aggregate amount of such Lender's Credit
Exposure hereunder, as such commitment may be (a) reduced from time to time
pursuant to SECTION 2.8, (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to SECTION 10.4, (c) increased from
time to time pursuant to SECTION 2.21, and (d) terminated pursuant to
SECTIONS 8.2 or 8.3. The initial amount of each Lender's Commitment is set forth
on SCHEDULE 2.1, or in the Register following any Assignment and Acceptance to
which such Lender is a party or the delivery of a Lender Certificate to which
such Lender is a party. The initial aggregate amount of the Commitments of the
Lenders is U.S.$100,000,000.
"COMMITMENT FEE" is defined in SECTION 2.11(a).
"CREDIT EXPOSURE" means, with respect to any Lender at any time, the
Equivalent Amount in U.S. Dollars of the sum of (a) the outstanding principal
amount of such Lender's Loans PLUS (b) its LC Exposure PLUS (c) its BA Exposure
at such time.
"CURRENCY" means, with respect to any Loan, whether such Loan is
denominated in Canadian Dollars or U.S. Dollars.
"DBNA" is defined in SECTION 2.22(l).
"DEBENTURE" means a Demand Debenture and Negative Pledge, dated as of
the Global Effective Date or otherwise delivered pursuant to the Loan Documents,
substantially in the form of EXHIBIT H, as amended, supplemented, restated or
otherwise modified from time to time in accordance with the Loan Documents. The
term "Debentures" shall include each and every Debenture executed and delivered
pursuant to the Loan Documents.
"DEFAULT" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"DEPOSIT AGREEMENT" means a Deposit Agreement, dated as of the Global
Effective Date or otherwise delivered pursuant to the Loan Documents,
substantially in the form of EXHIBIT I, as amended, supplemented, restated or
otherwise modified from time to time in accordance with the Loan Documents. The
term "DEPOSIT AGREEMENTS" shall include each and every Deposit Agreement
executed and delivered pursuant to the Loan Documents.
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"EQUIVALENT AMOUNT" means as at any date the amount of Canadian Dollars
into which an amount of U.S. Dollars may be converted, or the amount of U.S.
Dollars into which an amount of Canadian Dollars may be converted, in either
case at The Bank of Canada mid-point noon spot rate of exchange for such date in
Toronto at approximately 12:00 noon, Toronto time on such date.
"EURODOLLAR", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the LIBO Rate.
"EVENT OF DEFAULT" has the meaning assigned to such term in
SECTION 8.1.
"EXCLUDED TAXES" means, with respect to any Agent, any Lender, any
Issuing Bank or any other recipient of any payment to be made by or on account
of any obligation of Borrower hereunder, (a) income or franchise taxes imposed
on (or measured by) its net income by the federal, or any provincial, government
of Canada, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its Applicable Lending Office is located, (b) any branch
profits taxes imposed by the federal, or any provincial, government of Canada or
any similar tax imposed by any other jurisdiction in which Borrower is located
and (c) in the case of a Foreign Lender (other than an assignee pursuant to a
request by Borrower under SECTION 2.19(b)), any withholding tax that is imposed
on amounts payable to such Foreign Lender.
"EXISTING CREDIT FACILITIES" means that certain Fourth Amended and
Restated Credit Agreement, dated as of March 4, 1999, among Borrower, Parent,
each of the subsidiaries of Parent that becomes a guarantor pursuant to such
agreement, the banks party thereto, The Chase Manhattan Bank, as U.S.
administrative agent, Christiania Bank og Kreditkasse, Hibernia National Bank,
and Societe Generale, Southwest Agency, as co-agents, and The Chase Manhattan
Bank of Canada, as Canadian administrative agent, as amended by Amendment No. 1
dated as of June 24, 1999.
"FEE LETTER" means that certain Fee Letter dated as of July 17, 2000,
by and among Parent, the Global Administrative Agent and the Arranger, as such
letter may be amended, supplemented, restated or otherwise modified from time to
time in accordance with the Loan Documents.
"FINANCING TRANSACTIONS" means the execution, delivery and performance
by each Loan Party of the Loan Documents to which it is to be a party, the
borrowing of Loans, the use of the proceeds thereof and the issuance of Letters
of Credit hereunder.
"FORCE" means Forcenergy Inc., a Delaware corporation.
"FOREIGN LENDER" means any Lender that is not a resident in Canada for
purposes of the INCOME TAX ACT (CANADA). For purposes of this definition, Canada
and each province thereof shall be deemed to constitute a single jurisdiction.
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"FOREIGN SUBSIDIARY" means any Subsidiary that is organized under the
laws of a jurisdiction other than Canada or any province thereof.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
of the United States arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Global Administrative Agent from
three Federal funds brokers of recognized standing selected by it.
"GLOBAL ADMINISTRATIVE AGENT" means The Chase Manhattan Bank, in its
capacity as global administrative agent for the Combined Lenders and its
successors.
"GLOBAL BORROWING BASE" means the "Global Borrowing Base" (as defined
in the U.S. Credit Agreement) as determined from time to time pursuant to
SECTION 2.7 of the U.S. Credit Agreement.
"GLOBAL BORROWING BASE DEFICIENCY" means the amount by which (a) the
Combined Credit Exposures of all Combined Lenders under this Agreement and the
U.S. Credit Agreement exceeds (b) the then current Global Borrowing Base.
"GLOBAL EFFECTIVE DATE" means a date agreed upon by Parent and Borrower
and the Global Administrative Agent as the date on which the conditions
specified in SECTION 4.2 of each Combined Credit Agreement are satisfied (or
waived in accordance with SECTION 10.2 of each Combined Credit Agreement).
"GLOBAL EFFECTIVENESS NOTICE" means a notice and certificate of Parent
properly executed by an Authorized Officer of Parent, addressed to the Combined
Lenders and delivered to the Global Administrative Agent whereby Parent
certifies satisfaction or waiver of all the conditions precedent to the
effectiveness under SECTION 4.2 of each Combined Credit Agreement.
"GUARANTY" means a Guaranty, dated as of the Global Effective Date or
otherwise delivered pursuant to the Loan Documents, made by Parent, Force (if
Force is not merged into Parent on or before the Global Effective Date), 3189503
or Producers Marketing or any other Restricted Subsidiary of Borrower in favor
of the Global Administrative Agent, substantially in the form of EXHIBIT F, in
the case of the Parent or Force, or EXHIBIT G, in the case of 3189503, Producers
Marketing or any Restricted Subsidiary, as amended, supplemented, restated or
otherwise modified from time to time in accordance with the terms of this
Agreement and the other Loan Documents. The term "Guaranties" shall include each
and every Guaranty executed and delivered hereunder.
"HIGHEST LAWFUL RATE" is defined in ▇▇▇▇▇▇▇ ▇▇.▇▇.
▇
"▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (▇▇▇▇▇▇)" means the Income Tax Act (Canada), as amended
from time to time.
"INCREASED COMMITMENT AMOUNT" is defined in SECTION 2.21.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
"INDEMNITEE" is defined in SECTION 10.3(b).
"INFORMATION" is defined in SECTION 10.12.
"INITIAL RESERVE REPORT" means the Independent Reserve Report delivered
to the Global Administrative Agent dated as of January 1, 2000, with respect to
the Oil and Gas Properties of Parent and its Restricted Subsidiaries, a true and
correct copy of which has been delivered to the Global Administrative Agent, the
Canadian Administrative Agent and the Lenders.
"INTERCREDITOR AGREEMENT" means that certain Intercreditor Agreement
dated as of even date herewith, by and among the Global Administrative Agent,
the U.S. Documentation Agent, the U.S. Syndication Agent, the Canadian
Administrative Agent, the Canadian Documentation Agent, the Canadian Syndication
Agent, and the Combined Lenders, as amended, supplemented, restated or otherwise
modified from time to time in accordance with the Loan Documents.
"INTEREST ELECTION REQUEST" means a request by Borrower to convert or
continue a Borrowing in accordance with SECTION 2.6, in substantially the form
of EXHIBIT E-2 or any other form approved by the Global Administrative Agent and
the Canadian Administrative Agent.
"INTEREST PAYMENT DATE" means (a) with respect to any Canadian Prime
Loan or USBR Loan, the last day of each March, June, September and December, (b)
with respect to any Eurodollar Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three (3) months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three (3) months' duration after the first day of such Interest
Period, and (c) with respect to any BA Loan, the maturity date of the Bankers'
Acceptances issued concurrently with the advance of such BA Loan.
"INTEREST PERIOD" means (a) with respect to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day, or, with the consent of the Global Administrative
Agent and the Canadian Administrative Agent, such other day, in the calendar
month that is one, two, three or six months (or, with the consent of each
Lender, nine or twelve months) thereafter, as Borrower may elect and (b) with
respect to any BA Loan, each period commencing on the date such BA Loan is made
or converted from another Type of Loan or the last day of the next preceding
Interest Period for such BA Loan and ending on the date not less than 30 days or
more than 180 days thereafter, as Borrower may select as provided in
SECTION 2.6; PROVIDED, that (a) if any Interest Period would end on a day other
than a Business Day, such
10
Interest Period shall be extended to the next succeeding Business Day unless
such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business Day,
(b) any Interest Period pertaining to a Eurodollar Borrowing that commences on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period,(c) no Interest Period may end later than the last day of the
Availability Period, and (d) the Interest Period for a BA Loan shall end on the
BA Maturity Date of the Bankers' Acceptances issued concurrently therewith. For
purposes hereof, the date of a Borrowing initially shall be the date on which
such Borrowing is made and thereafter shall be the effective date of the most
recent conversion or continuation of such Borrowing.
"ISSUING BANK" means any Lender in its capacity as the issuer of
Letters of Credit hereunder, PROVIDED that, upon written notice to the Global
Administrative Agent, the Canadian Administrative Agent and Borrower, any Lender
(other than Bank of Montreal) may decline to act in the capacity of an Issuing
Bank under this Agreement, and PROVIDED FURTHER that The Chase Manhattan Bank of
Canada and The Chase Manhattan Bank, Toronto Branch, shall not be an Issuing
Bank for the purposes of this Agreement. Any Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by Affiliates
of such Issuing Bank, in which case the term "Issuing Bank" shall include any
such Affiliate with respect to Letters of Credit issued by such Affiliate.
"JUDGMENT CURRENCY" is defined in SECTION 2.20(b).
"LC DISBURSEMENT" means a payment made by any Issuing Bank pursuant to
a Letter of Credit.
"LC EXPOSURE" means, at any time, the Equivalent Amount in U.S. Dollars
of the sum of (a) the aggregate undrawn amount of all outstanding Letters of
Credit at such time plus (b) the aggregate amount of all LC Disbursements that
have not yet been reimbursed by or on behalf of Borrower at such time. The LC
Exposure of any Lender at any time shall be its Applicable Percentage of the
total LC Exposure at such time.
"LENDER AFFILIATE" means, with respect to any Lender, (i) an Affiliate
of such Lender or (ii) any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise investing
in bank loans and similar extensions of credit in the ordinary course of its
business and is administered or managed by a Lender or an Affiliate of such
Lender and with respect to any Lender that is a fund which invests in bank loans
and similar extensions of credit, any other fund that invests in bank loans and
similar extensions of credit and is managed by the same investment advisor as
such Lender or by an Affiliate of such investment advisor.
"LENDER CERTIFICATE" is defined in SECTION 2.21.
11
"LENDERS" means the Persons listed on SCHEDULE 2.1 and any other Person
that shall have become a party hereto pursuant to an Assignment and Acceptance
or pursuant to SECTION 2.21, other than any such Person that ceases to be a
party hereto pursuant to an Assignment and Acceptance.
"LETTER OF CREDIT" means any letter of credit issued pursuant to this
Agreement.
"LIBO RATE" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the Global
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., Toronto time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO RATE" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of U.S.$5,000,000 and for a maturity comparable to such Interest Period
are offered by the principal London office of the Global Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"LOAN DOCUMENT" means (a) this Agreement, the Security Documents, the
Fee Letter, the Intercreditor Agreement, the Guaranties, the Hedging Agreements
between Borrower or any of its Restricted Subsidiaries and any Lender or any
Affiliate of a Lender, any Borrowing Request, any Interest Election Request, any
Assignment and Acceptance, any election notice, any agreement with respect to
fees described in SECTION 2.11, and (b) each other agreement, document or
instrument delivered by Borrower or any other Person in connection with this
Agreement, as such may be amended from time to time.
"LOAN PARTIES" means Parent, each Borrower and, after the date of this
Agreement, any other Affiliate or Restricted Subsidiary of Borrower which
executes a Loan Document for so long as such Loan Document is in effect.
"LOANS" means the loans (including, without limitation, the Canadian
Prime Loans, the Eurodollar Loans, the USBR Loans and the BA Loans) made by the
Lenders to Borrower pursuant to this Agreement and the acceptance of Bankers'
Acceptances.
"MATERIAL ADVERSE EFFECT"means a material adverse effect on (a) the
business, Property, operations, prospects, or condition, financial or otherwise,
of Parent and its Subsidiaries (including Force) taken as a whole, (b) the
ability of any Loan Party (as defined herein or in the U.S. Credit Agreement) to
perform any of its respective obligations under any Combined Loan Document to
which it is a party, or (c) the rights of or benefits available to the Combined
Lenders under any of the Combined Loan Documents, as the case may be.
12
"MATURITY DATE" means October 10, 2005.
"OBLIGATIONS" means, at any time, the sum of (a) the Credit Exposures
of the Lenders under the Loan Documents PLUS (b) all accrued and unpaid interest
and fees owing to the Lenders under the Loan Documents PLUS (c) all Hedging
Obligations in connection with all Hedging Agreements between Borrower or any of
its Restricted Subsidiaries and any Lender or any Affiliate of a Lender PLUS (d)
all other obligations (monetary or otherwise) of Parent, any Borrower or any
Restricted Subsidiary to any Lender or any Agent, whether or not contingent,
arising under or in connection with any of the Loan Documents.
"OTHER CURRENCY" is defined in SECTION 2.20(a).
"PARENT" means Forest Oil Corporation, a New York corporation.
"PARTICIPANT" is defined in SECTION 10.4(e).
"PRINCIPAL AMOUNT" means, for a Bankers' Acceptance, the face amount
thereof, for a BA Loan, the principal amount thereof determined in accordance
with SECTION 2.22(h) hereof, and for any other Loans, the outstanding principal
amount thereof.
"PRINCIPAL OFFICE" means the principal office of the Canadian
Administrative Agent, which on the date of this Agreement is located at ▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇.
"PRODUCERS MARKETING" means Producers Marketing Ltd., a corporation
organized under the laws of the Province of Alberta, Canada.
"REGISTER" has the meaning set forth in SECTION 10.4(c).
"REQUIRED LENDERS" means Combined Lenders having in the aggregate
greater than 50% of the aggregate total Combined Commitments under the Combined
Loan Documents, or, if the Combined Commitments have been terminated, Combined
Lenders holding greater than 50% of the aggregate unpaid principal amount of the
outstanding Combined Credit Exposure under the Combined Loan Documents.
"RESTRICTED SUBSIDIARY" means any Subsidiary of Borrower that is not an
Unrestricted Subsidiary.
"SCHEDULE I LENDER" means a Lender which is a Canadian chartered bank
listed on Schedule I to the BANK ACT (Canada).
"SCHEDULE I REFERENCE LENDERS" means Bank of Montreal and The
Toronto-Dominion Bank.
13
"SCHEDULE II LENDERS" means a Lender which is a Canadian chartered bank
that is listed on Schedule II or Schedule III to the BANK ACT (Canada).
"SCHEDULE II REFERENCE LENDER" means The Chase Manhattan Bank, Toronto
Branch and Bank of America Canada.
"SECURITY DOCUMENTS" means each of the Guaranties, each of the
Debentures, each of the Deposit Agreements, and each other security agreement or
other instrument or document executed and delivered pursuant to SECTION 5.8 or
SECTION 5.9 or pursuant to the Loan Documents to secure any of the Obligations.
"SHARING PERCENTAGE" means, at any time:
(a) for the Lenders, the percentage determined by dividing the
Obligations by the Combined Obligations; and
(b) for the U.S. Lenders, the percentage determined by dividing
the U.S. Obligations by the Combined Obligations.
"STAMPING FEE" means, in respect of any Bankers' Acceptance or BA Loan,
the fee payable by Borrower described in SECTION 2.22(c).
"SUBORDINATED INDEBTEDNESS" means, collectively, (a) the Subordinated
Indebtedness-8-3/4% Senior Subordinated Notes and any Refinancing Indebtedness,
and (b) any other Subordinated Debt of any of the Loan Parties.
"SUBORDINATED INDEBTEDNESS DOCUMENTS" means the indentures or other
agreements under which the Subordinated Indebtedness is issued and all other
instruments, agreements and other documents evidencing or governing the
Subordinated Indebtedness or providing for any Guarantee or other right in
respect thereof.
"SUBORDINATED INDEBTEDNESS-8-3/4% SENIOR SUBORDINATED NOTES" means the
Indebtedness of Canadian Forest evidenced by and in respect of 8-3/4% Senior
Subordinated Notes of Canadian Forest due 2007 in an aggregate principal amount
not to exceed U.S.$200,000,000 issued pursuant to that certain Indenture dated
as of September 29, 1997 among Parent, as guarantor, Canadian Forest, as issuer,
and State Street Bank and Trust Company, as trustee, as amended by that certain
Supplemental Indenture dated as of December 1, 1999, and as the same shall,
subject to SECTION 7.3, be modified and in effect from time to time, and any
Guarantees thereof by any Restricted Subsidiaries of Parent.
"SUBSIDIARY" means any subsidiary of Borrower.
14
"3189503" means 3189503 Canada Ltd., a corporation organized under the
federal laws of Canada.
"TYPE", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the LIBO Rate or the Canadian Prime
Rate or the Bankers' Acceptance Rate or the U.S. Base Rate.
"UNAVAILABLE FEE" is defined in SECTION 2.11(b).
"UNUTILIZED COMMITMENT" means, at the time of determination, the
Equivalent Amount in U.S. Dollars of the amount by which (a) the amount of the
Allocated Canadian Borrowing Base as then in effect at such time, PROVIDED that
if the Applicable Rating Level is Level I or Level II, then the amount of the
aggregate Commitments at such time, exceeds (b) the amount of the aggregate
Credit Exposures of the Lenders at such time.
"UPFRONT FEE" is defined in SECTION 2.11(d).
"U.S. BASE RATE" means, with respect to USBR Loans, the greater of:
(a) the annual rate of interest announced from time to time by the
Canadian Administrative Agent as being its reference rate then
in effect for determining interest rates on U.S. Dollar
denominated commercial loans made by the Canadian
Administrative Agent in Canada; and
(b) a rate of interest per three hundred sixty-five (365) day period
equal to the Federal Funds Effective Rate (equated, for these
purposes, to a rate based on a year of 365 days rather than
360 days) plus 1/2 of 1%.
"USBR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined in reference to the U.S. Base Rate.
"U.S. CREDIT AGREEMENT" means that certain Credit Agreement of even
date herewith among the Parent, the U.S. Lenders, the Global Administrative
Agent, Citibank, N.A., as U.S. documentation agent, and Bank of America, N.A.,
as U.S. syndication agent, as it may be amended, supplemented, restated or
otherwise modified and in effect from time to time.
"U.S. DOCUMENTATION AGENT" means Citibank, N.A., in its capacity as
U.S. documentation agent for the U.S. Lenders.
"U.S. DOLLARS" or "U.S.$" or "$" or "DOLLARS" refers to lawful money of
the United States of America.
15
"U.S. LENDERS" means the financial institutions from time to time party
to the U.S. Credit Agreement and their respective successors and permitted
assigns.
"U.S. LOAN DOCUMENTS" means the U.S. Credit Agreement, any guaranties,
any security documents, any assignment agreements, and any agreement with
respect to fees, together with all exhibits, schedules and attachments thereto,
and all other agreements, documents, certificates, financing statements and
instruments from time to time executed and delivered pursuant to or in
connection with any of the foregoing.
"U.S. SYNDICATION AGENT" means Bank of America, N.A., in its capacity
as U.S. syndication agent for the U.S. Lenders.
"U.S. OBLIGATIONS" means, at any time, the sum of (a) the "Credit
Exposures" of the U.S. Lenders under the U.S. Loan Documents PLUS (b) all
accrued and unpaid interest and fees owing to the U.S. Lenders under the U.S.
Loan Documents PLUS (c) all other obligations (monetary or otherwise) of Parent
or any of its Restricted Subsidiaries to any U.S. Lender or any of the "Agents"
under the U.S. Credit Agreement, whether or not contingent, arising under or in
connection with any of the U.S. Loan Documents.
SECTION 1.2. CLASSIFICATION OF LOANS AND BORROWINGS. For
purposes of this Agreement, Loans and Borrowings may be classified and
referred to by Type (E.G., a "EURODOLLAR LOAN" or "EURODOLLAR BORROWING" or
"BA LOAN" or "BA BORROWING" or "USBR LOAN" or "USBR BORROWING" or "CANADIAN
PRIME LOAN" or "CANADIAN PRIME BORROWING").
SECTION 1.3. TERMS GENERALLY. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without
limitation". The word "will" shall be construed to have the same meaning and
effect as the word "shall". Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be construed
to include such Person's successors and assigns, provided such successors and
assigns are permitted by the Loan Documents, (c) the words "herein", "hereof"
and "hereunder", and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof,
and (d) all references herein to Articles, Sections, Exhibits and Schedules
shall be construed to refer to Articles and Sections of, and Exhibits and
Schedules to, this Agreement.
SECTION 1.4. [Intentionally omitted.]
16
SECTION 1.5. PROVISION WITH RESPECT TO BORROWERS. Unless
expressly provided for to the contrary, (a) all payment or indemnification of
obligations of "Borrower" shall be joint and several as among Canadian Forest
and each Subsidiary Borrower, (b) all notices from "Borrower" shall mean a
notice from each of Canadian Forest and each Subsidiary Borrower, (c) all
covenants, agreements and other obligations of "Borrower" shall be joint and
several as among Canadian Forest and each Subsidiary Borrower, (d) references
to "each Borrower" or "any Borrower" shall mean a reference to Canadian
Forest or any Subsidiary Borrower, and (e) each of Canadian Forest and the
Subsidiary Borrowers are entitled to, subject to the terms and conditions of
this Agreement, request Loans hereunder, notwithstanding any provision
referencing only "Borrower".
SECTION 1.6. U.S. CREDIT AGREEMENT DEFINITIONS. Unless the
context otherwise requires, capitalized terms used herein and not otherwise
defined shall have the meanings given to them in the U.S. Credit Agreement.
ARTICLE II
THE CREDITS
SECTION 2.1. COMMITMENTS. Subject to the terms and conditions
set forth herein, each Lender agrees to make Loans (including BA Loans made
in accordance with SECTION 2.22) in Canadian Dollars or U.S. Dollars to
Borrower and each Accepting Lender agrees to accept Bankers' Acceptances
presented to it by Borrower pursuant to SECTION 2.22 in each case from time
to time during the Availability Period in an aggregate principal amount that
will not result in (a) the Credit Exposure of any Lender exceeding the
Commitment of such Lender, or (b) the aggregate amount of the Credit
Exposures of all Lenders exceeding (i) in the event the Applicable Rating
Level is Level III, the lesser of (A) the aggregate amount of the Allocated
Canadian Borrowing Base then in effect and (B) the aggregate amount of the
Commitments of the Lenders or (ii) in the event the Applicable Rating Level
is Level I or II, the aggregate amount of the Commitments of the Lenders.
Within the foregoing limits and subject to the terms and conditions set forth
herein, Borrower may repay (but not prepay) Bankers' Acceptances and may
borrow, prepay and reborrow Loans.
SECTION 2.2. LOANS AND BORROWINGS.
(a) Each Loan shall be made as part of a Borrowing consisting of Loans
made by the Lenders ratably in accordance with their respective Applicable
Percentages. The failure of any Lender to make any Loan required to be made by
it shall not relieve any other Lender of its obligations hereunder; PROVIDED
that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender's failure to make Loans as required.
(b) Subject to SECTIONS 2.13 and 2.14, each Borrowing shall be
comprised entirely of Canadian Prime Loans, Eurodollar Loans or USBR Loans as
Borrower may request in accordance herewith or shall be comprised of Bankers'
Acceptances and BA Loans made in accordance with SECTION 2.22. Each Lender at
its option may make any Eurodollar Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Loan; PROVIDED that any exercise
of such
17
option shall not affect the obligation of Borrower to repay such Loan in
accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of U.S.$1,000,000 and not less than U.S.$1,000,000 (including any
continuation or conversion of existing Loans made in connection therewith). At
the time that each Canadian Prime Borrowing is made, such Borrowing shall be in
an aggregate amount that is an integral multiple of C$1,000,000 and not less
than C$1,000,000 (including any continuation or conversion of existing Loans
made in connection therewith); PROVIDED that a Canadian Prime Borrowing may be
in an aggregate amount that is equal to the Equivalent Amount in Canadian
Dollars of the entire Unutilized Commitment, if less. At the time that each USBR
Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of U.S.$1,000,000 and not less than U.S.$1,000,000 (including
any continuation or conversion of existing Loans made in connection therewith);
provided that an USBR Borrowing may be in an aggregate amount that is equal to
the entire Unutilized Commitment, if less. Borrowings of more than one Type may
be outstanding at the same time; PROVIDED that there shall not at any time be
more than a total of ten (10) Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, Borrower
shall not be entitled to request, or to elect to convert or continue, any
Eurodollar Borrowing if the Interest Period requested with respect thereto would
end after the Maturity Date.
SECTION 2.3. REQUESTS FOR BORROWINGS. To request a Borrowing,
Borrower shall notify the Global Administrative Agent and the Canadian
Administrative Agent of such request by telephone (a) in the case of a
Eurodollar Borrowing, not later than 1:00 p.m., Toronto time, three Business
Days before the date of the proposed Borrowing or (b) in the case of a
Canadian Prime Borrowing or USBR Borrowing, not later than 11:00 a.m.,
Toronto time, on the date of the proposed Borrowing. Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by
hand delivery or telecopy to the Global Administrative Agent and the Canadian
Administrative Agent of a written Borrowing Request executed by an Authorized
Officer of Borrower, substantially in the form of EXHIBIT E-1 or otherwise in
a form approved by the Global Administrative Agent and the Canadian
Administrative Agent. Each such telephonic and written Borrowing Request
shall specify the following information in compliance with SECTION 2.2:
(i) the aggregate amount of the requested Borrowing (which
amount will be in the appropriate Currency as required pursuant to the
last sentence of this SECTION 2.3;
(ii) the date of such Borrowing, which shall be a Business
Day;
(iii) whether such Borrowing is to be a Canadian Prime
Borrowing, a USBR Borrowing or a Eurodollar Borrowing; and
18
(iv) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period".
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be a Canadian Prime Borrowing. If no Interest Period is
specified with respect to any requested Eurodollar Borrowing, then Borrower
shall be deemed to have selected an Interest Period of one month's duration.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Canadian Administrative Agent shall advise each Lender of the
details thereof and of the amount of such Lender's Loan (which shall be made in
the appropriate Currency based on the currency of the Borrowings being
requested) to be made as part of the requested Borrowing. Notwithstanding
anything herein to the contrary, Canadian Prime Loans and BA Loans may only be
denominated in Canadian Dollars and USBR Loans and Eurodollar Loans may only be
denominated in U.S. Dollars.
SECTION 2.4. LETTERS OF CREDIT.
(a) GENERAL. Subject to the terms and conditions set forth herein,
Borrower may request the issuance of Letters of Credit for its own account or
the account of any Restricted Subsidiary, in a form reasonably acceptable to the
Global Administrative Agent, the Canadian Administrative Agent and the Issuing
Bank, at any time and from time to time during the Availability Period. In the
event of any inconsistency between the terms and conditions of this Agreement
and the terms and conditions of any form of letter of credit application or
other agreement submitted by Borrower to, or entered into by Borrower with, the
Issuing Bank relating to any Letter of Credit, the terms and conditions of this
Agreement shall control.
(b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL, EXTENSION; CERTAIN
CONDITIONS. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), Borrower shall hand
deliver or telecopy (or transmit by electronic communication, if arrangements
for doing so have been approved by the Issuing Bank) to an Issuing Bank, the
Canadian Administrative Agent and the Global Administrative Agent (reasonably in
advance of the requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of a Letter of Credit, or identifying the Letter
of Credit to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension (which shall be a Business Day), the
date on which such Letter of Credit is to expire (which shall comply with
PARAGRAPH (c) of this Section), the amount of such Letter of Credit, the name
and address of the beneficiary thereof and such other information (including, if
applicable, the Currency of such Letter of Credit which shall be Canadian
Dollars or U.S. Dollars) as shall be necessary to prepare, amend, renew or
extend such Letter of Credit. If requested by the Issuing Bank, Borrower also
shall submit a letter of credit application on the Issuing Bank's standard form
in connection with any request for a Letter of Credit. A Letter of Credit shall
be issued, amended, renewed or extended only if (and upon issuance, amendment,
renewal or extension of each Letter of Credit Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension (i) the LC
19
Exposure shall not exceed U.S.$25,000,000 and (ii) the total Credit Exposures
shall not exceed the lesser of (x) the aggregate Commitments of the Lenders or
(y) if the Applicable Rating Level is Level III, the Allocated Canadian
Borrowing Base then in effect.
(c) EXPIRATION DATE. Each Letter of Credit shall expire at or prior to
the close of business on the earlier of (i) the date one year after the date of
the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the
Maturity Date.
(d) PARTICIPATIONS. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Lender, and each Lender hereby acquires from the Issuing
Bank, a participation in such Letter of Credit equal to such Lender's Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Canadian Administrative
Agent, for the account of the Issuing Bank in the Currency in which such Letter
of Credit is denominated, such Lender's Applicable Percentage of each LC
Disbursement made by such Issuing Bank and not reimbursed by Borrower on the
date due as provided in PARAGRAPH (e) of this Section, or of any reimbursement
payment required to be refunded to Borrower for any reason. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever.
(e) REIMBURSEMENT. If an Issuing Bank shall make any LC Disbursement in
respect of a Letter of Credit, Borrower shall reimburse such LC Disbursement in
the Currency in which such Letter of Credit is denominated by paying to the
Canadian Administrative Agent an amount equal to such LC Disbursement not later
than 12:00 noon, Toronto time, on the date that such LC Disbursement is made, if
Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m.,
Toronto time, on such date, or, if such notice has not been received by Borrower
prior to such time on such date, then not later than 12:00 noon, Toronto time,
on (i) the Business Day that Borrower receives such notice, if such notice is
received prior to 10:00 a.m., Toronto time, on the day of receipt, or (ii) the
Business Day immediately following the day that Borrower receives such notice,
if such notice is not received prior to such time on the day of receipt;
PROVIDED that, unless such LC Disbursement is less than C$1,000,000 or
U.S.$1,000,000, as applicable, Borrower may, subject to the conditions to
Borrowing set forth herein, request in accordance with SECTION 2.3 that such
payment be financed with a Borrowing in an equivalent amount and, to the extent
so financed, Borrower's obligation to make such payment shall be discharged and
replaced by the resulting Borrowing. If Borrower fails to make such payment when
due, the Canadian Administrative Agent shall notify each Lender of the
applicable LC Disbursement, the payment then due from Borrower in respect
thereof and such Lender's Applicable Percentage thereof. Promptly following
receipt of
20
such notice, each Lender shall pay to the Canadian Administrative Agent its
Applicable Percentage of the payment then due from Borrower, in the same
manner as provided in SECTION 2.5 with respect to Loans made by such Lender
in the appropriate Currency (and SECTION 2.5 shall apply, MUTATIS MUTANDIS,
to the payment obligations of the Lenders), and the Canadian Administrative
Agent shall promptly pay to the Issuing Bank the amounts so received by it
from the Lenders. Promptly following receipt by the Canadian Administrative
Agent of any payment from Borrower pursuant to this paragraph, the Canadian
Administrative Agent shall distribute such payment to the Issuing Bank or, to
the extent that Lenders have made payments pursuant to this paragraph to
reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as
their interests may appear. Any payment made by a Lender pursuant to this
paragraph to reimburse the Issuing Bank for any LC Disbursement (other than
the funding of Canadian Prime Loans or USBR Loans as contemplated above)
shall not constitute a Loan and shall not relieve Borrower of its obligation
to reimburse such LC Disbursement.
(f) OBLIGATIONS ABSOLUTE. Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein proving to be
untrue or inaccurate in any respect, (iii) payment by an Issuing Bank under a
Letter of Credit against presentation of a draft or other document that does not
comply with the terms of such Letter of Credit, or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, Borrower's obligations
hereunder. Neither the Agents, the Lenders or any Issuing Bank nor any of their
Related Parties shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of
such Issuing Bank; PROVIDED that the foregoing shall not be construed to excuse
such Issuing Bank from liability to Borrower to the extent of any direct or
actual damages (as opposed to special, indirect, consequential or punitive
damages, claims in respect of which are hereby waived by Borrower to the extent
permitted by applicable law) suffered by Borrower that are caused by such
Issuing Bank's failure to exercise care when determining whether drafts and
other documents presented under a Letter of Credit comply with the terms
thereof. The parties hereto expressly agree that, in the absence of gross
negligence or wilful misconduct on the part of the Issuing Bank (as finally
determined by a court of competent jurisdiction), the Issuing Bank shall be
deemed to have exercised care in each such determination. In furtherance of the
foregoing and without limiting the generality thereof, the parties agree that,
with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole
21
discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(g) DISBURSEMENT PROCEDURES. An Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. Such Issuing Bank shall promptly notify the
Canadian Administrative Agent and Borrower by telephone (confirmed by telecopy)
of such demand for payment and whether such Issuing Bank has made or will make
an LC Disbursement thereunder; PROVIDED that any failure to give or delay in
giving such notice shall not relieve Borrower of its obligation to reimburse
such Issuing Bank and the Lenders with respect to any such LC Disbursement.
(h) INTERIM INTEREST. If an Issuing Bank shall make any LC
Disbursement, then, unless Borrower shall reimburse such LC Disbursement in full
on the date such LC Disbursement is made, the unpaid amount thereof shall bear
interest, for each day from and including the date such LC Disbursement is made
to but excluding the date that Borrower reimburses such LC Disbursement, at the
rate per annum then applicable to Canadian Prime Loans or USBR Loans as
applicable; PROVIDED that, if Borrower fails to reimburse such LC Disbursement
within two (2) Business Days after such reimbursement is due pursuant to
PARAGRAPH (e) of this Section, then SECTION 2.12(c) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of the Issuing Bank,
except that interest accrued on and after the date of payment by any Lender
pursuant to PARAGRAPH (e) of this Section to reimburse the Issuing Bank shall be
for the account of such Lender to the extent of such payment.
(i) [Intentionally omitted].
(j) CASH COLLATERALIZATION. If any Event of Default shall occur and be
continuing, on the Business Day that Borrower receives notice from the Global
Administrative Agent, the Canadian Administrative Agent or the Required Lenders
(or, if the maturity of the Loans has been accelerated, Lenders with LC Exposure
representing greater than 50% of the total LC Exposure) demanding the deposit of
cash collateral pursuant to this paragraph, Borrower shall deposit in an account
with the Canadian Administrative Agent, in the name of the Canadian
Administrative Agent and for the benefit of the Lenders, an amount in cash (in
the applicable Currency) equal to the LC Exposure as of such date plus any
accrued and unpaid interest thereon; PROVIDED that the obligation to deposit
such cash collateral shall become effective immediately, and such deposit shall
become immediately due and payable, without demand or other notice of any kind,
upon the occurrence of any Event of Default with respect to Borrower described
in SECTION 8.1(g). Borrower also shall deposit cash collateral pursuant to this
paragraph as and to the extent required by SECTION 2.10, and any such cash
collateral so deposited and held by the Canadian Administrative Agent hereunder
shall constitute part of the Global Borrowing Base for purposes of determining
compliance with SECTION 2.10. Each such deposit shall be held by the Canadian
Administrative Agent as collateral for the payment and performance of the
obligations of Borrower under this Agreement. The Canadian Administrative
22
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such account. Other than any interest earned on the
investment of such deposits, which investments shall be made at the option and
sole discretion of the Canadian Administrative Agent and at Borrower's risk and
expense, such deposits shall not bear interest. Interest or profits, if any, on
such investments shall accumulate in such account. Moneys in such account shall
be applied by the Canadian Administrative Agent to reimburse the Issuing Bank
for LC Disbursements for which it has not been reimbursed and, to the extent not
so applied, shall be held for the satisfaction of the reimbursement obligations
of Borrower for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated (but subject to the consent of Lenders with LC Exposure
representing greater than 50% of the total LC Exposure), be applied to satisfy
other obligations of Borrower under this Agreement. If Borrower is required to
provide an amount of cash collateral hereunder as a result of the occurrence of
an Event of Default, such amount (to the extent not applied as aforesaid) shall
be returned to Borrower within three (3) Business Days after all Events of
Default have been cured or waived. If Borrower is required to provide an amount
of cash collateral hereunder pursuant to SECTION 2.10, such amount (to the
extent not applied as aforesaid) shall be returned to Borrower as and to the
extent that, after giving effect to such return, Borrower would remain in
compliance with SECTION 2.10 and no Default shall have occurred and be
continuing.
SECTION 2.5. FUNDING OF BORROWINGS.
(a) Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 12:00
noon, Toronto time, to the account of the Canadian Administrative Agent most
recently designated by it for such purpose by notice to the Lenders, which Loan
shall be in the appropriate Currency (based on the relevant Borrowing Request).
The Canadian Administrative Agent will make such Loans available to Borrower by
promptly crediting the amounts so received, in like funds, to an account of
Borrower maintained with the Canadian Administrative Agent in Toronto; PROVIDED
that Canadian Prime Loans and/or USBR Loans made to finance the reimbursement of
an LC Disbursement as provided in SECTION 2.4(e) Shall be remitted by the
Canadian Administrative Agent to the applicable Issuing Bank.
(b) Unless the Canadian Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Canadian Administrative Agent such Lender's share of
such Borrowing, the Canadian Administrative Agent may assume that such Lender
has made such share available on such date in accordance with paragraph (a) of
this Section and may, in reliance upon such assumption, make available to
Borrower a corresponding amount. In such event, if a Lender has not in fact made
its share of the applicable Borrowing available to the Canadian Administrative
Agent, then the applicable Lender and Borrower severally agree to pay to the
Canadian Administrative Agent forthwith on demand such corresponding amount with
interest thereon, for each day from and including the date such amount is made
available to Borrower to but excluding the date of payment to the Canadian
Administrative Agent, at (i) in the case of such Lender, the greater of the cost
incurred by the Canadian Administrative Agent for making such Lender's share of
such Borrowing or a rate determined by the Canadian Administrative Agent in
accordance with banking industry
23
rules on interbank compensation or (ii) in the case of Borrower, the interest
rate applicable to Loans made in such Borrowing. If such Lender pays such amount
to the Canadian Administrative Agent, then such amount shall constitute such
Lender's Loan included in such Borrowing.
(c) Borrowings, conversion or continuations of Loans, and prepayments
of Loans of different Currencies at the same time hereunder shall be deemed to
be separate Borrowings, continuations, conversions and prepayments,
respectively, one for each Currency.
SECTION 2.6. INTEREST ELECTIONS.
(a) Each Borrowing initially shall be of the Type specified in the
applicable Borrowing Request (or a Canadian Prime Borrowing if no Type is
specified) and, in the case of a Eurodollar Borrowing, shall have an initial
Interest Period as specified in such Borrowing Request (or one month if no
Interest Period is specified). Thereafter, Borrower may elect to convert such
Borrowing to a different Type or to continue such Borrowing and, in the case of
a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section. Borrower may, subject to the requirements of SECTION 2.2(c), elect
different options with respect to different portions of the affected Borrowing,
in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing.
(b) To make an election pursuant to this Section, Borrower shall notify
the Global Administrative Agent and the Canadian Administrative Agent of such
election by telephone by the time that a Borrowing Request would be required
under SECTION 2.3 if Borrower were requesting a Borrowing of the Type resulting
from such election to be made on the effective date of such election. Each such
telephonic Interest Election Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Global Administrative Agent and the
Canadian Administrative Agent of a written Interest Election Request executed by
an Authorized Officer of Borrower, substantially in the form of EXHIBIT E-2 or
otherwise in a form approved by the Global Administrative Agent and the Canadian
Administrative Agent.
(c) Each telephonic and written Interest Election Request shall specify
the following information in compliance with SECTION 2.2:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
24
(iii) whether the resulting Borrowing is to be a Canadian
Prime Borrowing or USBR Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then Borrower shall be deemed to have selected
an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Canadian Administrative Agent shall advise each Lender of the details thereof
and of such Lender's portion of each resulting Borrowing.
(e) If Borrower fails to deliver a timely Interest Election Request
with respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period such Borrowing shall be converted to an USBR
Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing and the Global Administrative Agent or the
Canadian Administrative Agent, at the request of the Required Lenders, so
notifies Borrower, then, so long as such Event of Default is continuing, (i) no
outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing
and (ii) unless the Indebtedness has been accelerated pursuant to SECTION 8.3,
each Eurodollar Borrowing shall be converted to an USBR Borrowing at the end of
the Interest Period applicable thereto.
SECTION 2.7. [Intentionally omitted.]
SECTION 2.8. TERMINATION AND REDUCTION OF COMMITMENTS.
(a) Unless previously terminated, the Commitments shall terminate on
the Maturity Date.
(b) Borrower may at any time terminate, or from time to time reduce,
the Commitments; PROVIDED that (i) each reduction of the Commitments shall be in
an amount that is an integral multiple of U.S.$1,000,000 and not less than
U.S.$5,000,000 and (ii) Borrower shall not terminate or reduce the Commitments
if, after giving effect to any concurrent prepayment of the Loans in accordance
with SECTION 2.10, the sum of the Credit Exposures would exceed the aggregate
Commitments of the Lenders.
(c) Borrower shall notify the Global Administrative Agent and the
Canadian Administrative Agent of any election to terminate or reduce the
Commitments under PARAGRAPH (b) of this Section at least two (2) Business Days
prior to the effective date of such termination or reduction, specifying such
election and the effective date thereof. Promptly following receipt of any
25
notice, the Canadian Administrative Agent shall advise the Lenders of the
contents thereof. Each notice delivered by Borrower pursuant to this Section
shall be irrevocable; PROVIDED that a notice of termination of the Commitments
delivered by Borrower may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be
revoked by Borrower (by notice to the Global Administrative Agent and the
Canadian Administrative Agent on or prior to the specified effective date) if
such condition is not satisfied. Subject to the rights of Borrower under
SECTION 2.21, any termination or reduction of the Commitments shall be
permanent. Each reduction of the Commitments shall be made ratably among the
Lenders in accordance with their Applicable Percentage of the Commitments.
SECTION 2.9. REPAYMENT OF LOANS; EVIDENCE OF DEBT.
(a) Borrower hereby unconditionally promises to pay to the Canadian
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Loan and Borrowing of such Lender on the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(c) The Canadian Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, the Type thereof and
the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Canadian
Administrative Agent hereunder for the account of the Lenders and each Lender's
share thereof.
(d) The entries made in the accounts maintained pursuant to PARAGRAPHS
(b) or (c) of this Section shall be PRIMA FACIE evidence of the existence and
amounts of the obligations recorded therein; PROVIDED that the failure of any
Lender or the Canadian Administrative Agent to maintain such accounts or any
error therein shall not in any manner affect the obligation of Borrower to repay
the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by one or
more promissory notes. In such event, Borrower shall prepare, execute and
deliver to such Lender promissory notes payable to the order of such Lender (or,
if requested by such Lender, to such Lender and its registered assigns and in a
form approved by the Global Administrative Agent and the Canadian Administrative
Agent). Thereafter, the Loans evidenced by such promissory notes and interest
thereon shall at all times (including after assignment pursuant to SECTION 10.4)
be represented by one or more promissory notes in such form payable to the order
of the payee named therein (or, if any such promissory note is a registered
note, to such payee and its registered assigns).
26
SECTION 2.10. PREPAYMENT OF LOANS.
(a) Borrower shall have the right at any time and from time to time to
prepay any Borrowing in whole or in part, subject to the requirements of this
Section. Borrower shall not be permitted to prepay any Bankers' Acceptance or BA
Loans at any time.
(b) If, (i) during any period when the Applicable Rating Level is Level
III, either the Global Borrowing Base or the Allocated Canadian Borrowing Base
is (A) redetermined under SECTION 2.7 of the U.S. Credit Agreement, (B)
[intentionally omitted], (C) reduced as the result of a Casualty Event under
SECTION 2.7(h) of the U.S. Credit Agreement, (D) reduced as the result of an
asset disposition under SECTION 2.7(i) of the U.S. Credit Agreement, (E)
reallocated pursuant to SECTION 2.7(d) of the U.S. Credit Agreement, or (F)
reduced pursuant to any other provision of the U.S. Credit Agreement, and (ii)
as a result thereof, either a Global Borrowing Base Deficiency or a Canadian
Borrowing Base Deficiency occurs, then Borrower shall take the following
actions:
(1) in the case of a Global Borrowing Base Deficiency resulting from
a redetermination or reduction of the Global Borrowing Base,
prepay, or cause to be prepaid, Combined Loans in an aggregate
principal amount equal to such deficiency, together with
interest on the principal amount paid accrued to the date of
such prepayment and, if after prepaying all of the Combined
Loans (other than Bankers Acceptances) a Global Borrowing Base
Deficiency remains as a result of a BA Exposure, pay to the
Canadian Administrative Agent an amount equal to such
remaining Global Borrowing Base Deficiency to be held as cash
collateral as provided in SECTION 2.22(m), and, if after
prepaying all of the Combined Loans (other than Bankers
Acceptances) and providing cash collateral for all Bankers'
Acceptances pursuant to this Section, a Global Borrowing Base
Deficiency remains as a result of an LC Exposure or an "LC
Exposure" under the U.S. Credit Agreement, pay to the Global
Administrative Agent an amount equal to such remaining Global
Borrowing Base Deficiency to be held as cash collateral as
provided in SECTION 2.4(j); PROVIDED that Borrower shall be
obligated to make (or cause to be made) such prepayment and/or
deposit of cash collateral within 180 days following the
Deficiency Notification Date with respect to such deficiency;
and PROVIDED FURTHER that within 90 days following the
Deficiency Notification Date, Borrower shall have prepaid (or
caused to be prepaid), or deposited cash in an amount equal
to, one-half of such Global Borrowing Base Deficiency;
(2) in the case of a Canadian Borrowing Base Deficiency resulting
from a redetermination or reduction of the Global Borrowing
Base, take the action described under clause (1) above (except
that prepayments shall be made in respect of Loans made
pursuant to this Agreement);
(3) [Intentionally omitted.]
27
(4) in the case of a Canadian Borrowing Base Deficiency resulting
from a Casualty Event pursuant to SECTION 2.7(h) of the U.S.
Credit Agreement, utilize the Net Proceeds of such Casualty
Event to take the action described under clause (1) above
(except that prepayments shall be made in respect of Loans
made pursuant to this Agreement); PROVIDED that if a
prepayment or deposit is required under this clause (4), then
Borrower shall be obligated to make (or cause to be made) such
prepayment and/or deposit of cash collateral on the Business
Day immediately following the Deficiency Notification Date
with respect to such deficiency;
(5) in the case of a Canadian Borrowing Base Deficiency resulting
from an asset disposition pursuant to SECTION 2.7(i) of the
U.S. Credit Agreement, utilize the Net Proceeds of such asset
disposition to take the action described under clause (1)
above (except that prepayments shall be made in respect of
Loans made pursuant to this Agreement); PROVIDED that if a
prepayment or deposit is required under this clause (5), then
Borrower shall be obligated to make (or cause to be made) such
prepayment and/or deposit of cash collateral on the Business
Day immediately following the receipt by Borrower or a
Restricted Subsidiary of any Net Proceeds from such asset
disposition; and
(6) in the case of a Canadian Borrowing Base Deficiency resulting
from a reallocation of the Global Borrowing Base pursuant to
SECTION 2.7(d) of the U.S. Credit Agreement, prepay Loans in
an aggregate principal amount equal to such deficiency,
together with interest on the principal amount paid accrued to
the date of such prepayment, and if a Canadian Borrowing Base
Deficiency remains after prepaying all of the Loans as a
result of an LC Exposure, pay to the Global Administrative
Agent an amount equal to such remaining Canadian Borrowing
Base Deficiency to be held as cash collateral as provided in
SECTION 2.4(j); it being understood that Borrower shall be
obligated to make such prepayment and/or deposit of cash
collateral on the effective date of such reallocation.
(7) notwithstanding anything in this SECTION 2.10 to the contrary, in
the event that a Canadian Borrowing Base Deficiency exists at
a time when no Global Borrowing Base Deficiency exists, then,
to the extent that such action would cure (in whole or in
part) such Canadian Borrowing Base Deficiency, Borrower may
reallocate the Global Borrowing Base between the Allocated
U.S. Borrowing Base and the Allocated Canadian Borrowing Base
by providing the Global Administrative Agent and the Canadian
Administrative Agent with its election to do so (which
election will designate the relevant reallocations) on the
Business Day on which such Canadian Borrowing Base Deficiency
occurs; provided, however, that no reallocation shall be
permitted to the extent such reallocation would cause the
"Credit Exposures" of the U.S. Lenders under the U.S. Credit
Agreement to be greater than the lesser of the aggregate
"Commitments" thereunder and the Allocated U.S. Borrowing
Base.
28
(c) Borrower shall notify the Global Administrative Agent and the
Canadian Administrative Agent by telephone (confirmed by telecopy) of any
prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing,
not later than 1:00 p.m., Toronto time, two Business Days before the date of
prepayment or (ii) in the case of prepayment of a Canadian Prime Borrowing or
USBR Borrowing, not later than 11:00 a.m., Toronto time, on the date of
prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Borrowing or portion thereof to
be prepaid (which amount shall be in a minimum principal amount of
U.S.$2,000,000 or C$2,000,000, as the case may be, and in U.S.$1,000,000 or
C$1,000,000 increments in excess thereof, as the case may be); PROVIDED that, if
a notice of prepayment is given in connection with a conditional notice of
termination of the Commitments as contemplated by SECTION 2.8, then such notice
of prepayment may be revoked if such notice of termination is revoked in
accordance with SECTION 2.8. Promptly following receipt of any such notice
relating to a Borrowing, the Canadian Administrative Agent shall advise the
Lenders of the contents thereof. Each partial prepayment of any Borrowing shall
be in an amount that would be permitted in the case of an advance of a Borrowing
of the same Type as provided in SECTION 2.2. Each prepayment of a Borrowing
shall be applied ratably to the Loans included in the prepaid Borrowing.
Prepayments shall be accompanied by accrued interest to the extent required by
SECTION 2.12 and by any other amounts then due under this Agreement (including
all amounts due under SECTION 2.16).
SECTION 2.11. FEES.
(a) Borrower agrees to pay to the Canadian Administrative Agent for the
account of each Lender a commitment fee (the "COMMITMENT FEE"), which shall
accrue at the Applicable Rate on the daily amount equal to the Applicable
Percentage of such Lender of the Unutilized Commitment during the period from
and including the Global Effective Date to but excluding the date on which the
Commitments terminate. Accrued Commitment Fees shall be payable in arrears on
the last day of March, June, September and December of each year and on the date
on which the Commitments terminate, commencing on the first such date to occur
after the date of this Agreement; PROVIDED that any Commitment Fees accruing
after the date on which the Commitments terminate shall be payable on demand.
All Commitment Fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed (including the first day
but excluding the last day).
(b) Borrower agrees to pay to the Canadian Administrative Agent for the
account of each Lender an unavailable fee (the "UNAVAILABLE FEE"), which shall
accrue at the Applicable Rate on the daily amount equal to the Applicable
Percentage of such Lender of the Unutilized Commitment during the period from
and including the date of this Agreement to but excluding the Global Effective
Date. Accrued Unavailable Fees shall be payable in arrears on the last day of
March, June, September and December of each year, commencing on the first such
date to occur after the date of this Agreement. All Unavailable Fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).
(c) Borrower agrees to pay (i) to the Canadian Administrative Agent for
the account of each Lender a participation fee with respect to its
participations in Letters of Credit, which shall
29
accrue at the same Applicable Rate as interest on Eurodollar Loans on the
average daily amount of such Lender's Applicable Percentage of the LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the date of this Agreement to but excluding
the later of the date on which the Commitments terminate and the date on which
the Lenders cease to have any LC Exposure, and (ii) to the Issuing Bank a
fronting fee equal to the greater of (A) U.S.$500 or C$500, depending on the
Currency in which the relevant Letter of Credit is denominated, and (B) the rate
of 0.125% per annum on the average daily amount of the LC Exposure (excluding
any portion thereof attributable to unreimbursed LC Disbursements), which LC
Exposure will be converted to an Equivalent Amount with respect to Letters of
Credit which are denominated in Canadian Dollars, during the period from and
including the date of this Agreement to but excluding the later of the date of
termination of the Commitments and the date on which there ceases to be any LC
Exposure , as well as the Issuing Bank's standard fees with respect to the
administration, issuance, amendment, renewal or extension of any Letter of
Credit or processing of drawings thereunder. Participation fees and fronting
fees shall be payable in arrears on the last day of each March, June, September
and December of each year, commencing on the first such date to occur after the
date of this Agreement; PROVIDED that all such fees shall be payable on the date
on which the Commitments terminate and any such fees accruing after the date on
which the Commitments terminate shall be payable on demand. Any other fees
payable to the Issuing Bank pursuant to this paragraph shall be payable within
ten (10) days after demand. All participation fees and fronting fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).
(d) Borrower agrees to pay to the Global Administrative Agent, for its
own account and for the account of each Lender, as applicable, fees, including,
without limitation, an upfront fee (the "UPFRONT FEE"), in the amounts and at
the times separately agreed upon between Parent and the Global Administrative
Agent, including, without limitation, the amounts agreed upon between Parent and
the Global Administrative Agent in the Fee Letter.
(e) Unless otherwise set forth herein, all fees payable hereunder shall
be paid on the dates due, in immediately available funds in U.S. Dollars, to the
Global Administrative Agent or the Canadian Administrative Agent (or the Issuing
Bank, in the case of fees payable to it), as the case may be, for distribution,
in the case of Commitment Fees, Unavailable Fees and participation fees, to the
Lenders entitled thereto. Fees paid shall not be refundable under any
circumstances.
SECTION 2.12. INTEREST.
(a) Subject to SECTIONS 2.12(f), (g) and (h) and SECTION 10.13, the
Loans comprising each Canadian Prime Borrowing shall bear interest at the
Canadian Prime Rate plus the Applicable Rate for Canadian Prime Loans, and Loans
comprising each USBR Borrowing shall bear interest at the USBR plus the
Applicable Rate for U.S. Base Rate Loans.
30
(b) Subject to SECTIONS 2.12(f), (g) and (h) and SECTION 10.13, the
Loans comprising each Eurodollar Borrowing shall bear interest at the LIBO Rate
for the Interest Period in effect for such Borrowing plus the Applicable Rate
for Eurodollar Loans.
(c) Notwithstanding the foregoing, but subject to SECTIONS 2.12(f),
(g) and (h) and SECTION 10.13, if any principal of or interest on any Loan or
any fee or other amount payable by Borrower hereunder is not paid when due,
whether at stated maturity, upon acceleration or otherwise, such overdue amount
shall bear interest, after as well as before judgment, at a rate per annum equal
to (i) in the case of overdue principal of any Loan, the rate otherwise
applicable to such Loan as provided in the preceding paragraphs of this
Section PLUS, to the extent permitted by applicable law, 2% or (ii) in the case
of any other amount, the rate applicable to Canadian Prime Loans as provided in
paragraph (a) of this Section PLUS, to the extent permitted by applicable
law, 2%.
(d) Subject to SECTIONS 2.12(f), (g) and (h) and SECTION 10.13, accrued
interest on each Loan (other than a Loan consisting of the acceptance of a
Bankers' Acceptance) shall be payable in arrears on each Interest Payment Date
for such Loan and upon termination of the Commitments; PROVIDED that (i)
interest accrued pursuant to paragraph (c) of this Section shall be payable on
demand of the Canadian Administrative Agent or the Required Lenders (through the
Canadian Administrative Agent), (ii) in the event of any repayment or prepayment
of any Loan, accrued interest on the principal amount repaid or prepaid shall be
payable on the date of such repayment or prepayment and (iii) in the event of
any conversion of any Eurodollar Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the effective
date of such conversion.
(e) Subject to SECTIONS 2.12(f), (g) and (h) and SECTION 10.13, all
interest hereunder shall be computed on the basis of a year of 360 days, except
that interest computed by reference to the Canadian Prime Rate or the U.S. Base
Rate and interest associated with BA Loans shall be computed on the basis of a
year of 365 days (or 366 days in a leap year), and in each case shall be payable
for the actual number of days elapsed (including the first day but excluding the
last day). The applicable Canadian Prime Rate, U.S. Base Rate or LIBO Rate shall
be determined by the Canadian Administrative Agent, and such determination shall
be conclusive absent manifest error.
(f) To the extent permitted by applicable law, any provision of the
INTEREST ACT (CANADA) or the JUDGMENT INTEREST ACT (ALBERTA) which restricts any
rate of interest set forth herein shall be inapplicable to this Agreement and is
hereby waived by Borrower.
(g) The theory of deemed reinvestment shall not apply to the
calculation of interest or payment of fees or other amounts hereunder,
notwithstanding anything contained in this Agreement, acceptance or other
evidence of indebtedness or in any other Loan Document now or hereafter taken by
any Agent or any Lender for the obligations of Borrower under this Agreement, or
any other instrument referred to herein, and all interest and fees payable by
Borrower to the Lenders, shall accrue from day to day, computed as described
herein in accordance with the "nominal rate" method of interest calculation.
31
(h) Where, in this Agreement, a rate of interest or fees is to be
calculated on the basis of a 360-day year, such rate is, for the purpose of the
INTEREST ACT (Canada), equivalent to the said rate (i) multiplied by the actual
number of days in the one year period beginning on the first day of the period
of calculation and (ii) divided by 360.
SECTION 2.13. ALTERNATE RATE OF INTEREST. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Canadian Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable means do
not exist for ascertaining the LIBO Rate for such Interest Period;
(b) the Canadian Administrative Agent is advised by the Required
Lenders that the LIBO Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders of making or maintaining their Loans
included in such Borrowing for such Interest Period; or
(c) the Canadian Administrative Agent determines in good faith (which
determination shall be conclusive) that by reason of circumstances affecting the
interbank dollar market generally, deposits in U.S. Dollars in the London
interbank dollar market are not being offered for the applicable Interest Period
and in an amount equal to the amount of the Eurodollar Loan requested by
Borrower, then the Canadian Administrative Agent shall give notice thereof to
Borrower and the Lenders by telephone or telecopy as promptly as practicable
thereafter and, until the Canadian Administrative Agent notifies Borrower and
the Lenders that the circumstances giving rise to such notice no longer exist,
(i) any Interest Election Request that requests the conversion of any Borrowing
to, or continuation of any Borrowing as, a Eurodollar Borrowing for the affected
Interest Period shall be ineffective, and (ii) if any Borrowing Request requests
a Eurodollar Borrowing, such Borrowing shall be made as a Eurodollar Loan having
the shortest Interest Period which is not unavailable under clauses (a) through
(c) of this Section, and if no Interest Period is available, as an USBR
Borrowing.
SECTION 2.14. ILLEGALITY.
(a) Notwithstanding any other provision of this Agreement to the
contrary, if (i) by reason of the adoption of any applicable Governmental Rule
or any change in any applicable Governmental Rule or in the interpretation or
administration thereof by any Governmental Authority or compliance by any Lender
with any request or directive (whether or not having the force of law) of any
central bank or other Governmental Authority or (ii) circumstances affecting the
London interbank dollar market or the position of a Lender therein shall at any
time make it unlawful or impracticable in the sole discretion of a Lender
exercised in good faith for such Lender or its Applicable Lending Office to (A)
honor its obligation to make Eurodollar Loans either generally or for a
particular Interest Period provided for hereunder, or (B) maintain Eurodollar
Loans either generally or for a particular Interest Period provided for
hereunder, then such Lender shall promptly notify Borrower thereof
32
through the Canadian Administrative Agent and such Lender's obligation to make
or maintain Eurodollar Loans having an affected Interest Period hereunder shall
be suspended until such time as such Lender may again make and maintain
Eurodollar Loans having an affected Interest Period (in which case the
provisions of SECTION 2.14(b) hereof shall be applicable). Before giving such
notice pursuant to this SECTION 2.14, such Lender will designate a different
available Applicable Lending Office for the affected Eurodollar Loans of such
Lender or take such other action as Borrower may request if such designation or
action will avoid the need to suspend such Lender's obligation to make
Eurodollar Loans hereunder and will not, in the sole opinion of such Lender
exercised in good faith, be disadvantageous to such Lender (PROVIDED, that such
Lender shall have no obligation so to designate an Applicable Lending Office for
Eurodollar Loans located in the United States of America).
(b) If the obligation of any Lender to make or maintain any Eurodollar
Loans shall be suspended pursuant to SECTION 2.14(a) hereof, all Loans having an
affected Interest Period which would otherwise be made by such Lender as
Eurodollar Loans shall be made instead as USBR Loans (and, if such Lender so
requests by notice to Borrower with a copy to the Global Administrative Agent
and the Canadian Administrative Agent, each Eurodollar Loan having an affected
Interest Period of such Lender then outstanding shall be automatically converted
into a USBR Loan on the last day of the Interest Period for such Eurodollar
Loans unless earlier conversion is required by applicable law) and, to the
extent that Eurodollar Loans are so made as (or converted into) USBR Loans, all
payments of principal which would otherwise be applied to such Eurodollar Loans
shall be applied instead to such USBR Loans.
SECTION 2.15. INCREASED COSTS.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the LIBO Rate) or any Issuing Bank; or
(ii) impose on any Lender or any Issuing Bank or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan or BA Loan or Bankers'
Acceptance (or of maintaining its obligation to make any such Loan or BA Loan or
Bankers' Acceptance ) or to increase the cost to such Lender or such Issuing
Bank of participating in, issuing or maintaining any Letter of Credit or BA Loan
or Bankers' Acceptance, or to reduce the amount of any sum received or
receivable by such Lender or such Issuing Bank hereunder (whether of principal,
interest or otherwise), then Borrower will pay to such Lender or such Issuing
Bank such additional amount or amounts as will compensate
33
such Lender or such Issuing Bank, as the case may be, for such additional costs
incurred or reduction suffered.
(b) If any Lender or any Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender's or such Issuing Bank's capital or on the capital of
such Lender's or such Issuing Bank's holding company, if any, as a consequence
of this Agreement or the Loans made by, or participations in Letters of Credit
held by, such Lender, or the Letters of Credit issued by such Issuing Bank, to a
level below that which such Lender or such Issuing Bank or such Lender's or such
Issuing Bank's holding company could have achieved but for such Change in Law
(taking into consideration such Lender's or such Issuing Bank's policies and the
policies of such Lender's or such Issuing Bank's holding company with respect to
capital adequacy), then Borrower will pay to such Lender or such Issuing Bank,
as the case may be, such additional amount or amounts as will compensate such
Lender or such Issuing Bank or such Lender's or such Issuing Bank's holding
company for any such reduction suffered.
(c) A certificate of a Lender or an Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or such Issuing Bank or
such Lender's or such Issuing Bank's holding company, as the case may be, as
specified in paragraph (a) or (b) of this Section shall be delivered to Borrower
and shall be conclusive absent manifest error. Borrower shall pay such Lender or
such Issuing Bank, as the case may be, the amount shown as due on any such
certificate within ten (10) days after receipt thereof.
(d) Failure or delay on the part of any Lender or any Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or such Issuing Bank's right to demand such compensation; PROVIDED
that Borrower shall not be required to compensate a Lender or an Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than 270 days prior to the date that such Lender or such Issuing Bank, as the
case may be, notifies Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's or such Issuing Bank's
intention to claim compensation therefor; PROVIDED FURTHER that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.
SECTION 2.16. BREAK FUNDING PAYMENTS. In the event of (a) the
payment (including prepayment) of any principal of any Eurodollar Loan or
BA Loan or Bankers' Acceptance other than on the last day of an Interest Period
applicable thereto (including as a result of an Event of Default), (b) the
conversion of any Eurodollar Loan or BA Loan or Bankers' Acceptance other than
on the last day of the Interest Period applicable thereto, (c) the failure to
borrow, convert, continue or prepay any Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under SECTION 2.10(b) and is revoked in accordance therewith), or (d) the
assignment of any Eurodollar Loan or BA Loans or Bankers' Acceptances other
than on the last day of the Interest Period applicable thereto as a result of
a request by Borrower pursuant to SECTION 2.19
34
then, in any such event, Borrower shall compensate each Lender for the loss,
cost and expense attributable to such event. In the case of a Eurodollar Loan,
such loss, cost or expense to any Lender shall be deemed to include an amount
determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the LIBO Rate that would have been applicable to such
Loan, for the period from the date of such event to the last day of the then
current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid were it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the London interbank market. A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section shall be delivered to Borrower,
the Global Administrative Agent and the Canadian Administrative Agent and shall
be conclusive absent manifest error. Borrower shall pay such Lender the amount
shown as due on any such certificate within ten (10) days after receipt thereof.
SECTION 2.17. TAXES.
(a) Any and all payments by or on account of any obligation of Borrower
hereunder or under any other Loan Document shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; PROVIDED that if
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section), the Global Administrative Agent,
the Canadian Administrative Agent, each Lender or Issuing Bank (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) Borrower shall make such deductions and (iii)
Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law; PROVIDED that if a Lender is in
breach of its representations and warranties under SECTION 2.17(e), then
Borrower shall only be obligated to comply with clauses (ii) and (iii) of this
SECTION 2.17(a) with respect to payments to be made to such Lender.
(b) In addition, Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) Borrower shall indemnify the Global Administrative Agent, the
Canadian Administrative Agent, each Lender and each Issuing Bank, within ten
(10) days after written demand therefor, for the full amount of any Indemnified
Taxes or Other Taxes paid by the Global Administrative Agent, the Canadian
Administrative Agent, such Lender or such Issuing Bank, as the case may be, on
or with respect to any payment by or on account of any obligation of Borrower
hereunder or under any other Loan Document (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified
35
Taxes or Other Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority; PROVIDED that if a Lender is in breach of its
representations under SECTION 2.17(e), then Borrower shall have no obligations
under this SECTION 2.17(c) with respect to any payments or liability described
herein made or owed by such Lender. A certificate as to the amount of such
payment or liability delivered to Borrower by a Lender or an Issuing Bank, or by
either the Global Administrative Agent or the Canadian Administrative Agent on
its own behalf or on behalf of a Lender or an Issuing Bank, shall be conclusive
absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by Borrower to a Governmental Authority, if available, Borrower
shall deliver to the Global Administrative Agent and the Canadian Administrative
Agent the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment
or other evidence of such payment reasonably satisfactory to the Global
Administrative Agent and the Canadian Administrative Agent.
(e) Each Lender represents and warrants that it is not a Foreign
Lender.
(f) If Borrower at any time pays an amount under SECTION 2.17(a), (b)
or (c) to any Lender, the Global Administrative Agent, the Canadian
Administrative Agent or any Issuing Bank, and such payee receives a refund of or
credit for any part of any Indemnified Taxes or Other Taxes which such payee
determines in its sole judgment is made with respect to such amount paid by
Borrower, such Lender, the Global Administrative Agent, the Canadian
Administrative Agent or any Issuing Bank, as the case may be, shall pay to such
Borrower the amount of such refund or credit promptly, and in any event within
60 days, following the receipt of such refund or credit by such payee.
SECTION 2.18. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SET-OFFS.
(a) Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest, fees
or reimbursement of LC Disbursements, or of amounts payable under SECTION 2.15,
2.16 or 2.17, or otherwise) prior to the time expressly required hereunder or
under such other Loan Document for such payment (or, if no such time is
expressly required, prior to 12:00 noon, Toronto time), on the date when due, in
immediately available funds in the appropriate Currency, without set-off or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Canadian Administrative Agent, be deemed to have been received
on the next succeeding Business Day for purposes of calculating interest
thereon. All such payments shall be made to the Canadian Administrative Agent
c/o The Chase Manhattan Bank of Canada, 1 First Canadian Place, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, P.O. Box 106, Toronto, Ontario, Canada M5X 1A4, Attention:
Portfolio Management Associates, Telephone: ▇▇▇-▇▇▇-▇▇▇▇ or 4106, Fax:
▇▇▇-▇▇▇-▇▇▇▇, with a copy to The Chase Manhattan Bank, Loan and Agency Services,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, Telephone: ▇▇▇-▇▇▇-▇▇▇▇, Fax: ▇▇▇-▇▇▇-▇▇▇▇, with a copy to The Chase
Manhattan Bank, Global Oil & Gas, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇
36
▇▇▇▇▇▇▇, Telephone: ▇▇▇-▇▇▇-▇▇▇▇, Fax: ▇▇▇-▇▇▇-▇▇▇▇, except payments to be made
directly to an Issuing Bank as expressly provided herein and payments pursuant
to SECTIONS 2.15, 2.16, 2.17(c) and 10.3 shall be made directly to the Persons
entitled thereto and payments pursuant to other Loan Documents shall be made to
the Persons specified therein. The Canadian Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. Except as set
forth in clause (a) of the definition of "Interest Period", if any payment under
any Loan Document shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case
of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments under each Loan Document shall be made in
the appropriate Currency as required pursuant to the Loan Documents.
(b) If at any time insufficient funds are received by and available to
the Canadian Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such funds
shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and unreimbursed LC Disbursements then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal and unreimbursed LC Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or participations in LC Disbursements resulting in
such Lender receiving payment of a greater proportion of the aggregate amount of
its Loans and participations in LC Disbursements and accrued interest thereon
than the proportion received by any other Lender, then the Lender receiving such
greater proportion shall purchase (for cash at face value) participations in the
Loans and participations in LC Disbursements of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and participations in LC
Disbursements; PROVIDED that (i) if any such participations are purchased and
all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest, and (ii) the provisions of this paragraph
shall not be construed to apply to any payment made by Borrower pursuant to and
in accordance with the express terms of this Agreement or any payment obtained
by a Lender as consideration for the assignment of or sale of a participation in
any of its Loans or participations in LC Disbursements to any assignee or
participant, other than to Borrower or any Subsidiary or Affiliate thereof (as
to which the provisions of this paragraph shall apply). Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against Borrower rights of set-off and counterclaim
with respect to such participation as fully as if such Lender were a direct
creditor of Borrower in the amount of such participation.
37
(d) Unless the Canadian Administrative Agent shall have received notice
from Borrower prior to the date on which any payment is due to the Canadian
Administrative Agent for the account of the Lenders or an Issuing Bank hereunder
that Borrower will not make such payment, the Canadian Administrative Agent may
assume that Borrower has made such payment on such date in accordance herewith
and may, in reliance upon such assumption, distribute to the Lenders or an
Issuing Bank, as the case may be, the amount due. In such event, if Borrower has
not in fact made such payment, then each of the Lenders or each of the Issuing
Banks, as the case may be, severally agrees to repay to the Canadian
Administrative Agent forthwith on demand the amount so distributed to such
Lender or such Issuing Bank with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Global Administrative Agent, at the greater of the cost incurred
by the Canadian Administrative Agent for making such distributed amount and a
rate determined by the Global Administrative Agent in accordance with banking
industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made by
it pursuant to SECTION 2.4(d) or (e), 2.5(b), 2.18(d) or 10.3(c) then the
Canadian Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the
Canadian Administrative Agent for the account of such Lender to satisfy such
Lender's obligations under such Sections until all such unsatisfied obligations
are fully paid.
SECTION 2.19. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) If any Lender requests compensation under SECTION 2.15, or if
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to SECTION 2.17,
then such Lender shall use reasonable efforts to designate a different
Applicable Lending Office for funding or booking its Loans hereunder or to
assign its rights and obligations hereunder to another of its offices, branches
or Affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to
SECTION 2.15 or 2.17, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) If (i) any Lender asserts that events have occurred suspending its
obligation to make or maintain Eurodollar Loans under Section 2.14 when
substantially all other Lenders have not also done so, (ii) any Lender requests
compensation under SECTION 2.15, (iii) Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to SECTION 2.17, or (iv) any Lender defaults in its
obligation to fund Loans hereunder, then Borrower may, at its sole expense and
effort, upon notice to such Lender, the Canadian Administrative Agent and the
Global Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
SECTION 10.4), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such
38
assignment); PROVIDED that (1) Borrower shall have received the prior written
consent of the Global Administrative Agent and the Canadian Administrative
Agent, which consents shall not unreasonably be withheld or delayed, (2) such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and participations in LC Disbursements, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or Borrower (in the case of all other amounts), (3) the assignee and
assignor shall have entered into an Assignment and Acceptance, and (4) in the
case of any such assignment resulting from a claim for compensation under
SECTION 2.15 or payments required to be made pursuant to SECTION 2.17, such
assignment will result in a reduction in such compensation or payments.
SECTION 2.20. CURRENCY CONVERSION AND CURRENCY INDEMNITY.
(a) PAYMENTS IN AGREED CURRENCY. Borrower shall make payment relative
to any Obligation in the currency (the "AGREED CURRENCY") in which the
Obligation was effected. If any payment is received on account of any Obligation
in any currency (the "OTHER CURRENCY") other than the Agreed Currency (whether
voluntarily or pursuant to an order or judgment or the enforcement thereof or
the realization of any Collateral or the liquidation of Borrower or otherwise
howsoever), such payment shall constitute a discharge of the liability of
Borrower hereunder and under the other Loan Documents in respect of such
obligation only to the extent of the amount of the Agreed Currency which the
relevant Lender or Agent, as the case may be, is able to purchase with the
amount of the Other Currency received by it on the Business Day next following
such receipt in accordance with its normal procedures and after deducting any
premium and costs of exchange.
(b) CONVERSION OF AGREED CURRENCY INTO JUDGMENT CURRENCY. If, for the
purpose of obtaining or enforcing judgment in any court in any jurisdiction, it
becomes necessary to convert into a particular currency (the "JUDGMENT
CURRENCY") any amount due in the Agreed Currency then the conversion shall be
made on the basis of the rate of exchange prevailing on the next Business Day
following the date such judgment is given and in any event Borrower shall be
obligated to pay the Agents and the Lenders any deficiency in accordance with
SECTION 2.20(c). For the foregoing purposes "rate of exchange" means the rate at
which the relevant Lender or Agent, as applicable, in accordance with its normal
banking procedures is able on the relevant date to purchase the Agreed Currency
with the Judgment Currency after deducting any premium and costs of exchange.
(c) CIRCUMSTANCES GIVING RISE TO INDEMNITY. To the fullest extent
permitted by applicable law, if (i) any Lender or any Agent receives any payment
or payments on account of the liability of Borrower hereunder pursuant to any
judgment or order in any Other Currency, and (ii) the amount of the Agreed
Currency which the relevant Lender or Agent, as applicable, is able to purchase
on the Business Day next following such receipt with the proceeds of such
payment or payments in accordance with its normal procedures and after deducting
any premiums and costs of exchange is less than the amount of the Agreed
Currency due in respect of such liability immediately prior to such judgment or
order, then Borrower on demand shall, and Borrower hereby
39
agrees to, indemnify the Lenders and the Agents from and against any loss, cost
or expense arising out of or in connection with such deficiency.
(d) INDEMNITY SEPARATE OBLIGATION. To the fullest extent permitted by
applicable law, the agreement of indemnity provided for in SECTION 2.20(c) shall
constitute an obligation separate and independent from all other obligations
contained in this Agreement, shall give rise to a separate and independent cause
of action, shall apply irrespective of any indulgence granted by the Lenders or
Agents or any of them from time to time, and shall continue in full force and
effect notwithstanding any judgment or order for a liquidated sum in respect of
an amount due hereunder or under any judgment or order.
SECTION 2.21. ADDITION OF LENDERS AND INCREASE IN COMMITMENTS.
It is agreed by the parties hereto that one or more financial institutions
acceptable to Canadian Forest, the Canadian Administrative Agent and the Global
Administrative Agent may become a Lender under this Agreement, with the consent
of the Required Lenders, by executing and delivering to Canadian Forest, the
Canadian Administrative Agent and the Global Administrative Agent a certificate
substantially in the form of EXHIBIT B hereto (a "LENDER CERTIFICATE"). Upon
receipt and agreement by Canadian Forest, the Canadian Administrative Agent, the
Global Administrative Agent and the Required Lenders of any such Lender
Certificate, (a) the aggregate amount of the Commitments of the Lenders
(including any Person that becomes a Lender by delivery of such a Lender
Certificate) automatically without further action by Borrower, the Canadian
Administrative Agent, the Global Administrative Agent or any Lender shall be
increased by the amount indicated in such Lender Certificate (but not in excess
of U.S.$100,000,000 in the aggregate for all such increases pursuant to this
Section and the increases pursuant to Section 2.21 of the U.S. Credit Agreement)
on the effective date set forth in such Lender Certificate (such increased
amount herein the "INCREASED COMMITMENT AMOUNT"), (b) the Register shall be
amended to add such Commitment of such additional Lender or to reflect the
increase in the Commitment of an existing Lender and the Applicable Percentages
of the Lenders shall be adjusted accordingly to reflect the additional Lender or
in the increase in the Commitment of an existing Lender, (c) any such additional
Lender shall be deemed to be a party in all respect to this Agreement and the
other Loan Documents, and (d) upon the effective date set forth in such Lender
Certificate, any such Lender party to the Lender Certificate shall purchase a
pro rata portion of the outstanding Credit Exposures of each of the current
Lenders such that the Lenders (including any additional Lender, if applicable)
shall have the appropriate portion of the aggregate outstanding Credit Exposures
(based in each case of such Lender's Applicable Percentage, as revised pursuant
to this Section).
SECTION 2.22. BANKERS' ACCEPTANCES. Subject to the terms and
conditions of this Agreement, the Commitments may be utilized, upon the request
of Borrower, in addition to the Loans provided for by SECTION 2.2 and the
issuance of Letters of Credit provided for by SECTION 2.4, for the acceptance
by the Lenders of Bankers' Acceptances issued by Borrower, PROVIDED that in no
event shall (i) the aggregate amount of all Bankers' Acceptance Liabilities
together with the Equivalent Amount in U.S. Dollars of the aggregate principal
amount of the Loans and the aggregate amount of all LC Exposure exceed (A) in
the event the Applicable Rating Level is Level III, the
40
lesser of (1) the aggregate amount of the Allocated Canadian Borrowing Base then
in effect and (2) the aggregate amount of the Commitments of the Lenders or (B)
in the event the Applicable Rating Level is Level I or II, the aggregate amount
of the Commitments of the Lenders, and (ii) any Bankers' Acceptances have
maturities of less than 30 days or more than 180 days from the Acceptance Date
(and shall in no event mature on a date after the Maturity Date). Whenever
Borrower is required to furnish a notice to the Canadian Administrative Agent
pursuant to the following additional provisions of this Section, it shall give a
copy of such notice to the Global Administrative Agent. The following additional
provisions shall apply to Bankers' Acceptances:
(a) In order to facilitate and expedite the issuance and acceptance of
Bankers' Acceptances hereunder, Borrower agrees to the terms and conditions of
the Power of Attorney with respect to the Bankers' Acceptance attached hereto as
EXHIBIT K.
(b) When Borrower wishes to make a Borrowing by way of Bankers'
Acceptances, Borrower shall give the Canadian Administrative Agent and the
Global Administrative Agent prior written notice with respect to the issuance of
the Bankers' Acceptances (such written notice a "BANKERS' ACCEPTANCE REQUEST")
by not later than 1:00 p.m., Toronto time, two (2) Business Days' prior to the
Acceptance Date. Each Bankers' Acceptance Request shall be irrevocable and
binding on Borrower. Borrower shall indemnify each Lender against any loss or
expense incurred by such Lender as a result of any failure by Borrower to
fulfill or honor before the date specified as the Acceptance Date, the
applicable conditions set forth in ARTICLE IV, if, as a result of such failure
the requested Bankers' Acceptance is not made on such date. Unless otherwise
agreed among the Canadian Administrative Agent, the Global Administrative Agent
and the Lenders, the aggregate amount of all Bankers' Acceptances issued on any
Acceptance Date hereunder shall be accepted PRO RATA by all Lenders relative to
their respective Applicable Percentage, rounded, upwards or downwards, as the
case may be, to the nearest C$100,000. Upon receipt of a Bankers' Acceptance
Request, the Canadian Administrative Agent shall advise each Lender of the
contents thereof.
(c) Unless Borrower has notified the Canadian Administrative Agent and
the Global Administrative Agent in the Bankers' Acceptance Request that Borrower
intends to arrange the sale of the Bankers' Acceptances which are the subject of
such Bankers' Acceptance Request (a "BORROWER ARRANGEMENT"), on the Acceptance
Date at 10:30 a.m., Toronto time, the Canadian Administrative Agent shall
determine the Bankers' Acceptance Rate for each of the Accepting Lenders. Not
later than 2:00 p.m., Toronto time, each such Accepting Lender shall accept and
purchase its share of the Bankers' Acceptances that are issued and shall make
available to the Canadian Administrative Agent, in accordance with SECTION 2.5,
the BA Net Proceeds of the purchase of Bankers' Acceptances on such day by such
Lender. The Canadian Administrative Agent shall transfer to the applicable
Borrower those BA Net Proceeds of the Bankers' Acceptances and shall notify such
Borrower and each such Lender by facsimile or telephone (if by telephone, to be
confirmed subsequently in writing) of the details of the issue, substantially in
the form set out in EXHIBIT N. Each Accepting Lender may at any time and from
time to time hold, sell, rediscount or otherwise dispose of any or all Bankers'
Acceptances accepted and purchased by it.
41
On the Acceptance Date, such Borrower shall pay each Accepting Lender
and each Lender providing a BA Loan a Stamping Fee with respect to each Bankers'
Acceptance and each BA Loan and each Lender is hereby authorized to deduct such
Stamping Fee prior to remitting the BA Net Proceeds to the Canadian
Administrative Agent.
For each Bankers' Acceptance or BA Loan, the Stamping Fee payable by
such Borrower shall be the product obtained by multiplying:
(i) the applicable Bankers' Acceptance Stamping Fee specified
in the definition of Applicable Rate in effect from time to time; by
(ii) the Principal Amount of that Bankers' Acceptance or BA
Loan;
and prorating that product for the number of days in the term from and including
the Acceptance Date to but not including the BA Maturity Date of that Bankers'
Acceptance or the Interest Period for the BA Loan, as the case may be, on the
basis of a year of 365 days.
(d) [Intentionally omitted.]
(e) On each day during the period commencing with the issuance by
Borrower of any Bankers' Acceptance and until such Bankers' Acceptance Liability
shall have been paid by Borrower, the Commitment of each Accepting Lender that
is able to extend credit by way of Bankers' Acceptances shall be deemed to be
utilized for all purposes of this Agreement in an amount equal to the Principal
Amount of such Bankers' Acceptance.
The Commitment of any Lender providing a BA Loan rather than Bankers'
Acceptances shall be deemed utilized during this period in an amount equal to
its Applicable Percentage of the total amount of Bankers' Acceptances and BA
Loans in each Bankers' Acceptance Request.
(f) Borrower agrees to pay on the BA Maturity Date for each Bankers'
Acceptance, to the Canadian Administrative Agent for account of each Accepting
Lender, an amount equal to the Bankers' Acceptance Liability for such Bankers'
Acceptance.
Each Borrower hereby waives presentment for payment of Bankers'
Acceptances by the Accepting Lenders and any defense to payment of amounts due
to an Accepting Lender in respect of a Bankers' Acceptance which might exist by
reason of such Bankers' Acceptance being held at maturity by the Accepting
Lender which accepted it and agree not to claim from such Lenders any days of
grace for the payment at maturity of Bankers' Acceptances.
(g) In the event any Borrower fails to notify the Canadian
Administrative Agent in writing not later than 1:00 p.m., Toronto time, on the
Business Day prior to any BA Maturity Date that such Borrower intends to pay
with Borrower's own funds the Bankers' Acceptance Liabilities due on such BA
Maturity Date or fails to make such payment, such Borrower shall be deemed, for
42
all purposes to have given the Canadian Administrative Agent notice of a
borrowing of a Canadian Prime Loan pursuant to SECTION 2.3 for an amount equal
to the Principal Amount of such Bankers' Acceptance; PROVIDED that:
(i) the BA Maturity Date for such Bankers' Acceptances shall
be considered to be the date of such borrowing;
(ii) the proceeds of such Canadian Prime Loan shall be used to
pay the amount of the Bankers' Acceptance Liability due on such BA
Maturity Date;
(iii) if after giving effect to such Canadian Prime Loan, a
Canadian Borrowing Base Deficiency would exist, the Global
Administrative Agent shall so advise Borrower and Borrower shall comply
with the provisions of SECTION 2.10;
(iv) each Lender which has made a maturing BA Loan (in
accordance with SECTION 2.22(h) hereof) shall continue to extend credit
to Borrower by way of a Canadian Prime Loan (without further advance of
funds to Borrower) in the Principal Amount equal to its Applicable
Percentage of the total amount of credit requested to be extended by
Bankers' Acceptances when the BA Loan was made; and
(v) the Canadian Administrative Agent shall promptly and in
any event within three (3) Business Days following the BA Maturity Date
of such Bankers' Acceptances, notify Borrower in writing of the making
of such Canadian Prime Loan pursuant to this SECTION 2.22(g).
(h) If, in the sole judgment of a Lender, such Lender is unable, as a
result of applicable law or customary market practice, to extend credit by way
of Bankers' Acceptance in accordance with this Agreement, such Lender shall give
notice to such effect to the Canadian Administrative Agent and Borrower prior to
1:00 p.m., Toronto time, on the date of the requested credit extension (which
notice may, if so stated therein, remain in effect with respect to subsequent
requests for extension of credit by way of Bankers' Acceptance until revoked by
notice to the Global Administrative Agent, the Canadian Administrative Agent and
Borrower) and shall make available to the Canadian Administrative Agent, in
accordance with SECTION 2.1 hereof prior to 2:00 p.m., Toronto time, on the date
of such requested credit extension a Canadian Dollar loan (a "BA LOAN") in the
Principal Amount equal to such Lender's Applicable Percentage of the total
amount of credit requested to be extended by way of Bankers' Acceptances. The
Stamping Fee for that BA Loan shall be calculated on that Principal Amount. Such
BA Loan shall have an Interest Period equal to the term of the Bankers'
Acceptances for which it is a substitute and shall bear interest throughout such
Interest Period applicable to that BA Loan at a rate per annum equal to the
Bankers' Acceptance Rate for such Bankers' Acceptances. On the maturity date of
the Bankers' Acceptances issued concurrently with the advance of the BA Loan,
Borrower shall pay to each Lender which made a BA Loan, in satisfaction of the
BA Loan and accrued interest thereon, an amount equal to the Principal Amount of
such BA Loan, failing which such Principal Amount shall be converted to a
Canadian
43
Prime Loan. The amount of the proceeds of that BA Loan to be disbursed to
Borrower on the Acceptance Date shall be the same amount as if that Lender had
accepted and purchased its Lender's Applicable Percentage of the requested
Bankers' Acceptances at a discount from the Principal Amount of that Bankers'
Acceptance calculated at a discount rate per annum equal to the Bankers'
Acceptance Rate for the term of such Bankers' Acceptances in the same manner
that BA Net Proceeds are calculated; provided that the Principal Amount of such
BA Loan shall be the same amount as the face amount of the Bankers' Acceptance
which such Lender would have accepted but for this SECTION 2.22(h).
(i) If any Borrower notifies the Canadian Administrative Agent of a
Borrower Arrangement, on the Acceptance Date of the Bankers' Acceptances
constituting such Borrower Arrangement:
(i) Borrower shall obtain quotations from prospective
purchasers regarding the sale of the Bankers' Acceptances to be
accepted by the Lenders, and shall, on or before 11:00 a.m., Toronto
time, on such date, provide the Canadian Administrative Agent with all
necessary information required by each Lender to enable each Lender to
determine the Bankers' Acceptance discount rate applicable to such
issue, together with the identity of and the face amount of Bankers'
Acceptances to be purchased by each of the purchaser(s) of the Bankers'
Acceptances accepted by each Lender. In obtaining such quotes, Borrower
shall offer each Lender the right to bid on the Bankers' Acceptances
accepted by it. The Lenders and the Canadian Administrative Agent shall
not be responsible for any losses occasioned by the failure of any
Borrower to comply with its obligations under this paragraph and shall
not be required to purchase any Bankers' Acceptances on such Acceptance
Date if the applicable Borrower has requested a Borrower Arrangement;
and
(ii) on receipt from Borrower of the information referred to
in paragraph (i), the Canadian Administrative Agent shall promptly
notify each Lender of:
(A) the Bankers' Acceptance discount rate to be
applicable to such issue;
(B) the proceeds to be received by such Lender on the
sale of the Bankers' Acceptances accepted by such Lender,
based upon such Bankers' Acceptance discount rate obtained by
such Borrower for each such Lender; and
(C) the Stamping Fee payable to such Lender in
connection with such issue.
(j) [Intentionally omitted.]
44
(k) If a Lender determines in good faith, which determination shall be
final, conclusive and binding upon Borrower, and notifies Borrower that, by
reason of circumstances affecting the money market:
(i) there is no market for Bankers' Acceptances generally or
of a requested duration; or
(ii) the demand for Bankers' Acceptances is insufficient to
allow the sale or trading of the Bankers' Acceptances created and
purchased hereunder generally or in connection with a requested
duration;
then:
(x) the right of any Borrower to request Bankers' Acceptances
or a BA Loan of the affected duration from that Lender shall be
suspended until such Lender determines that the circumstances causing
such suspension no longer exist and such Lender so notifies each
Borrower; and
(y) any Bankers' Acceptance Request for an affected duration
which is outstanding shall be canceled and the Bankers' Acceptances or
BA Loan requested therein shall not be made and a Bankers' Acceptance
or BA Loan having the shortest duration available (or if none) a
Canadian Prime Loan shall be made in its place.
(l) It is the intention of the Canadian Administrative Agent, the
Lenders and Borrower that, except to the extent a Lender advises otherwise,
pursuant to the DEPOSITORY BILLS AND NOTES ACT ("DBNA"), all Bankers'
Acceptances accepted by the Lenders under this Agreement shall be issued in the
form of a "depository ▇▇▇▇" (as defined in the DBNA), deposited with the
Canadian Depository for Securities Ltd. and made payable to CDS & Co. In order
to give effect to the foregoing, the Canadian Administrative Agent shall,
subject to the approval of Borrower and the Lenders, establish and notify
Borrower and the Lenders of any procedure, consistent with the terms of this
Agreement and the requirements of the DBNA, as is reasonably necessary to
accomplish such intention, including, without limitation:
(i) any instrument held by the Canadian Administrative Agent
or a Lender for the purposes of Bankers' Acceptances shall have marked
prominently and legibly on its face and within its text, at or before
the time of issue, the words "This is a depository ▇▇▇▇ subject to the
DEPOSITORY BILLS AND NOTES ACT (Canada)";
(ii) any reference to the authentication of the Bankers'
Acceptances will be removed; and
45
(iii) any reference to "bearer" will be removed and no
Bankers' Acceptance shall be marked with any words prohibiting
negotiation, transfer or assignment of it or of an interest in it.
(m) If any Event of Default shall occur and be continuing, on the
Business Day that Borrower receives notice from the Global Administrative Agent,
the Canadian Administrative Agent or the Required Lenders (or, if the maturity
of the Loans has been accelerated, Lenders with BA Exposure representing greater
than 50% of the total BA Exposure) demanding the deposit of cash collateral
pursuant to this paragraph, Borrower shall deposit in an account with the
Canadian Administrative Agent, in the name of the Canadian Administrative Agent
and for the benefit of the Lenders, an amount in cash equal to the BA Exposure
as of such date plus any accrued and unpaid interest thereon; PROVIDED that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default described
in SECTION 8.1(g). Borrower shall also deposit cash collateral pursuant to this
paragraph as and to the extent required by SECTION 2.10, and any such cash
collateral so deposited and held by the Canadian Administrative Agent hereunder
shall constitute part of the Global Borrowing Base for purposes of determining
compliance with SECTION 2.10. Each such deposit shall be held by the Canadian
Administrative Agent as collateral for the payment and performance of the
obligations of Borrower under this Agreement. The Canadian Administrative Agent
shall have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest earned on the investment
of such deposits, which investments shall be made at the option and sole
discretion of the Canadian Administrative Agent and at Borrower's risk and
expense, such deposits shall not bear interest. Interest or profits, if any, on
such investments shall accumulate in such account. Moneys in such account shall
be applied by the Canadian Administrative Agent for the satisfaction of the
obligations of Borrower with respect to the BA Exposure at such time or, if the
maturity of the Loans has been accelerated (but subject to the consent of
Lenders with BA Exposure representing greater than 50% of the total BA
Exposure), be applied to satisfy other obligations of Borrower under this
Agreement. If Borrower is required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, such amount (to
the extent not applied as aforesaid) shall be returned to Borrower within three
(3) Business Days after all Events of Default have been cured or waived. If
Borrower is required to provide an amount of cash collateral hereunder pursuant
to SECTION 2.10, such amount (to the extent not applied as aforesaid) shall be
returned to Borrower as and to the extent that, after giving effect to such
return, Borrower would remain in compliance with SECTION 2.10 and no Default
shall have occurred and be continuing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
In order to induce the Global Administrative Agent, the Canadian
Administrative Agent, the other Agents, any Issuing Bank and the Lenders to
enter into this Agreement and to make Loans (including making BA Loans and
accepting Bankers' Acceptances) hereunder, Borrower represents
46
and warrants to the Global Administrative Agent, the Canadian Administrative
Agent, the other Agents, any Issuing Bank and the Lenders as set forth in this
Article.
SECTION 3.1. ORGANIZATION; POWERS. Each of Borrower and its
Restricted Subsidiaries is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, has all requisite power
and authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.2. AUTHORIZATION; ENFORCEABILITY. The execution,
delivery and performance by Borrower of this Agreement and each other Loan
Document executed or to be executed by it, and the execution, delivery and
performance by each other Loan Party of each Loan Document executed or to be
executed by it, are within Borrower's and each such Loan Party's corporate,
limited liability company and/or partnership powers, and have been duly
authorized by all necessary corporate, limited liability company and/or
partnership action, and if required, stockholder, member and/or partner action.
This Agreement and each other Loan Document executed or to be executed by it
has been duly executed and delivered by Borrower and constitutes, and each other
Loan Document executed or to be executed by any Loan Party, when executed and
delivered by such Loan Party, will constitute, a legal, valid and binding
obligation of Borrower or such Loan Party (as the case may be), enforceable in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors'
rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.
SECTION 3.3. APPROVALS; NO CONFLICTS. The execution, delivery
and performance by Borrower of this Agreement and each other Loan Document
executed or to be executed by it, and the execution, delivery and performance
by each other Loan Party of each Loan Document executed or to be executed by
such Loan Party, (a) do not require any Governmental Approval or third party
approvals, except such as have been obtained or made and are in full force and
effect and except filings necessary to perfect Liens created under the Loan
Documents, (b) will not violate any applicable Governmental Rule or the Organic
Documents of Borrower or any such Loan Party or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon Borrower or any such Loan Party or
its assets, or give rise to a right thereunder to require any payment to be
made by Borrower or any such Loan Party, and (d) will not result in the
creation or imposition of any Lien on any asset of Borrower or any such Loan
Party except Liens created under the Loan Documents.
SECTION 3.4. PROPERTIES. Each of Borrower and its Restricted
Subsidiaries owns its Properties free and clear of all Liens (other than Liens
permitted by SECTION 7.2 of the U.S. Credit Agreement).
SECTION 3.5. COMPLIANCE WITH LAWS AND AGREEMENTS. Each of
Borrower and its Restricted Subsidiaries is in compliance with all Governmental
Rules applicable to such Person or
47
its Property and all indentures, agreements and other instruments binding upon
it or its Property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. No Default has occurred and is continuing.
SECTION 3.6. UNFUNDED PENSION LIABILITIES. The unfunded pension
or similar liabilities of Canadian Forest and its Subsidiaries do not in the
aggregate exceed an amount which could reasonably be expected to have a Material
Adverse Effect.
SECTION 3.7. DISCLOSURE. Borrower has disclosed to the Lenders,
the Canadian Administrative Agent and the Global Administrative Agent all
agreements, court orders, judgments, instruments and corporate or other
restrictions to which Borrower or any of its Subsidiaries is subject, and all
other matters known to any of them relating to any of the foregoing, which
agreements, court orders, judgments, instruments, restrictions and other matters
individually or in aggregate could reasonably be expected to result in a
Material Adverse Effect. None of the documents, reports, financial statements,
certificates or other information furnished by or on behalf of Borrower or any
of its Subsidiaries to the Global Administrative Agent, the Canadian
Administrative Agent or any Lender in connection with the negotiation of this
Agreement or any other Loan Document or delivered hereunder or thereunder (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; PROVIDED that, with respect to projected financial
information, Borrower represents only that such information was prepared in good
faith based upon assumptions believed to be reasonable at the time.
SECTION 3.8. PRIORITY; SECURITY MATTERS. The Obligations are and
shall be at all times secured by Liens in all Collateral located in the
Provinces of Alberta, Saskatchewan and British Columbia to the extent perfection
has or will occur by the filing of an instrument to create a floating charge
under the laws of the Provinces of Alberta, Saskatchewan and British Columbia,
or by possession, and, except for Liens permitted by SECTION 7.2, all such Liens
shall be first priority Liens.
SECTION 3.9. SOLVENCY. Immediately after the consummation of the
Financing Transactions to occur on the Global Effective Date and immediately
following the making of each Loan made on the Global Effective Date and after
giving effect to the application of the proceeds of such Loans, (a) each Loan
Party will not have unreasonably small capital with which to conduct the
business in which such Loan Party is engaged as such business is now conducted
and is proposed to be conducted following the Global Effective Date; and (b)
Canadian Forest and each Loan Party will be Solvent.
SECTION 3.10. REPRESENTATIONS AND WARRANTIES IN U.S. CREDIT
AGREEMENT. Each Borrower represents and warranties that each of the
representations and warranties contained in the U.S. Credit Agreement,
including, without limitation, Article III of the U.S. Credit Agreement,
pertaining or otherwise applicable to such Borrower in its capacity as a
Restricted Subsidiary of the Parent is true, correct and complete in all
respects (except with respect to such representations and
48
warranties which expressly relate to an earlier date, in which case such
representations and warranties are true, correct and complete as of such earlier
date).
ARTICLE IV
CONDITIONS
SECTION 4.1. EFFECTIVENESS. This Agreement shall become
effective on the date on which each of the following conditions is satisfied
(or waived in accordance with SECTION 10.2):
(a) CERTAIN LOAN DOCUMENTS. The Global Administrative Agent (or its
counsel) shall have received from each party thereto either a counterpart of
each of the following documents duly executed on behalf of such party or written
evidence satisfactory to the Global Administrative Agent (which may include
telecopy transmission of a signed signature page of such document) that each
such party has duly executed for delivery to the Global Administrative Agent a
counterpart of each of the following documents which documents must be
acceptable to the Global Administrative Agent in its sole and absolute
discretion: this Agreement, the U.S. Credit Agreement and the Intercreditor
Agreement.
(b) FEES AND EXPENSES. The Global Administrative Agent, the Canadian
Administrative Agent, the Arranger and the Lenders shall have received all fees,
including the Upfront Fee, and other amounts due and payable pursuant to this
Agreement or any other Loan Document on or prior to the date hereof, including,
to the extent invoiced, reimbursement or payment of all out-of-pocket expenses
(including reasonable fees, charges and disbursements of counsel) required to be
reimbursed or paid by any Loan Party hereunder or under any other Combined Loan
Document.
SECTION 4.2. INITIAL LOAN. The obligations of the Lenders to make
Loans (including making BA Loans and accepting Bankers' Acceptances) or for any
Issuing Bank to issue Letters of Credit hereunder shall not become effective
until the date on which each of the following conditions is satisfied (or waived
in accordance with SECTION 10.2):
(a) CERTAIN LOAN DOCUMENTS. The Global Administrative Agent (or its
counsel) shall have received from each party thereto either a counterpart of
each of the following documents duly executed on behalf of such party or written
evidence satisfactory to the Global Administrative Agent (which may include
telecopy transmission of a signed signature page of such document) that each
such party has duly executed for delivery to the Global Administrative Agent a
counterpart of each of the following documents: a Guaranty from each of Parent,
Force (if Force is not merged into Parent on or before the Global Effective
Date), 3189503 and Producers Marketing, the Fee Letter, the Debentures and
Deposit Agreements required by SECTION 4.2(f), and all related financing
statements and other filings.
(b) U.S. LOAN DOCUMENTS. The Global Administrative Agent shall have
received copies of the executed U.S. Loan Documents (other than the U.S. Credit
Agreement) and the conditions for making Loans provided in the U.S. Credit
Agreement shall have been contemporaneously satisfied.
49
(c) OPINIONS OF COUNSEL. The Global Administrative Agent shall have
received opinions, dated the Global Effective Date, addressed to the Global
Administrative Agent and the Canadian Administrative Agent, the other Agents and
all Lenders, from (i) ▇▇▇▇▇▇▇ ▇▇▇▇▇, counsel to Borrower, in substantially the
form attached hereto as EXHIBIT A-1, and (ii) ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., U.S.
counsel to the Parent and Force, in substantially the form attached hereto as
EXHIBIT A-2.
(d) ORGANIZATIONAL DOCUMENTS. The Global Administrative Agent shall
have received a certificate of an Authorized Officer of each Loan Party dated as
of the Global Effective Date, certifying:
(i) that attached to each such certificate are (A) a true and
complete copy of the Organic Documents of such Loan Party, as the case
may be, as in effect on the date of such certificate, (B) a true and
complete copy of a certificate from the Governmental Authority of
Canada or the province of such entity's organization certifying that
such entity is duly organized and validly existing in such
jurisdiction, and (C) a true and complete copy of a certificate from
the appropriate Governmental Authority of each province (without
duplication) certifying that such entity is duly qualified and in good
standing to transact business in such state as a foreign corporation,
if the failure to be so qualified or in good standing could reasonably
be expected to have a Material Adverse Effect;
(ii) that attached to such certificate is a true and complete
copy of resolutions duly adopted by the board of directors or
management committee of such Loan Party, as applicable, authorizing the
execution, delivery and performance of such of the Loan Documents to
which such Loan Party is or is intended to be a party; and
(iii) as to the incumbency and specimen signature of each
officer of such Loan Party executing such of the Loan Documents to
which such Loan Party is or is intended to be a party.
(e) [Intentionally omitted.]
(f) DEBENTURES AND DEPOSIT AGREEMENTS. The Global Administrative Agent
shall have received executed counterparts of the duly executed Debentures and
Deposit Agreements which Debentures and Deposit Agreements shall create a
floating charge in favor of the Canadian Administrative Agent for the benefit of
the Lenders on substantially all of the Properties (including Oil and Gas
Properties) of Canadian Forest and its Restricted Subsidiaries located in
Canada, together with (i) stock certificates representing all of the outstanding
shares of capital stock of Producers Marketing owned by or on behalf of Canadian
Forest (in the case of Debenture(s) and Deposit Agreement(s) made by Canadian
Forest) as of the Global Effective Date after giving effect to the Financing
Transactions, and stock powers and instruments of transfer, endorsed in blank,
with respect to such stock certificates, and (ii) all releases and all other
documents and instruments necessary to release the Liens granted by Borrower and
its Restricted Subsidiaries (including,
50
without limitation, any Liens granted under the Existing Credit Facilities), and
together with such other documents or instruments as the Global Administrative
Agent may reasonably request.
(g) [Intentionally omitted.]
(h) CANADIAN LIEN SEARCHES. The Global Administrative Agent shall have
received (i) the Canadian Lien Searches, all dated reasonably close to the
Global Effective Date, in the discretion of the Global Administrative Agent and
in form and substance satisfactory to the Global Administrative Agent, and (ii)
evidence reasonably satisfactory to the Global Administrative Agent that the
Liens indicated by the financing statements (or similar documents) in such
Canadian Lien Searches are permitted by SECTION 7.2 or have been released.
(i) PRIORITY; SECURITY INTEREST. The Collateral shall be free and clear
of all Liens, except Liens permitted by SECTION 7.2 of the U.S. Credit
Agreement. All filings, notices, recordings and other action necessary to
perfect the Liens in the Collateral shall have been made, given or accomplished
or arrangements for the completion thereof satisfactory to the Global
Administrative Agent and its counsel shall have been made and all filing fees
and other expenses related to such actions either have been paid in full or
arrangements have been made for their payment in full which are satisfactory to
the Global Administrative Agent.
(j) [Intentionally omitted.]
(k) INITIAL RESERVE REPORT. The Global Administrative Agent and the
Lenders shall have received and shall be satisfied with the contents, results
and scope of the Initial Reserve Report.
(l) OTHER DOCUMENTS. The Global Administrative Agent shall have
received such other legal opinions, instruments and documents as any of the
Agents or their counsel may have reasonably requested.
(m) SATISFACTORY LEGAL FORM. All documents executed or submitted
pursuant hereto by and on behalf of Borrower or any other Loan Party shall be in
form and substance reasonably satisfactory to the Global Administrative Agent
and its counsel. The Global Administrative Agent and its counsel shall have
received all information, approvals, documents or instruments as the Global
Administrative Agent or its counsel may reasonably request.
The Global Administrative Agent shall notify Canadian Forest, the other Agents
and the Lenders of the Global Effective Date, and such notice shall be
conclusive and binding. Notwithstanding the foregoing, the obligations of the
Lenders to make Loans and of the Issuing Banks to issue Letters of Credit
hereunder shall not become effective unless each of the foregoing conditions is
satisfied (or waived pursuant to SECTION 10.2) at or prior to 3:00 p.m., New
York City time, on December 31, 2000 (and, in the event such conditions are not
so satisfied or waived, the Commitments shall terminate at such time).
51
SECTION 4.3. EACH CREDIT EVENT. The obligation of each Lender
to make a Loan on the occasion of any Borrowing, and of the Issuing Banks to
issue, amend, renew or extend any Letter of Credit, is subject to receipt of
the request therefor in accordance herewith and to the satisfaction of the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES. At the time of and immediately
after giving effect to such Borrowing or the issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, the representations and
warranties of each Loan Party set forth in the Loan Documents to which it is a
party shall be true and correct on and as of such date after giving effect to
such funding and to the intended use thereof in all material respects as if made
on and as of such date (or, if stated to have been made expressly as of an
earlier date, were true and correct in all material respects as of such date).
(b) NO DEFAULTS. At the time of and immediately after giving effect to
such Borrowing or the issuance, amendment, renewal or extension of such Letter
of Credit, as applicable, no Default shall have occurred and be continuing and
Borrower shall be in compliance with the financial covenants set forth in
ARTICLE VI.
(c) NO MATERIAL ADVERSE EFFECT. At the time of and immediately after
giving effect to such Borrowing or the issuance, amendment, renewal or extension
of such Letter of Credit, no event or events shall have occurred which
individually or in the aggregate could reasonably be expected to have a Material
Adverse Effect.
(d) BORROWING REQUEST. The Global Administrative Agent and the Canadian
Administrative Agent shall have received a Borrowing Request for any Borrowing.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by Borrower
on the date thereof as to the matters specified in paragraphs (a) and (b) of
this Section.
ARTICLE V
AFFIRMATIVE COVENANTS
Borrower agrees with the Global Administrative Agent, the Canadian
Administrative Agent, the other Agents, any Issuing Bank and each Lender that,
until the Commitments have expired or been terminated and Obligations shall have
been paid and performed in full and all Letters of Credit shall have expired or
terminated and all LC Disbursements shall have been reimbursed and no Bankers'
Acceptances Liabilities are outstanding, Borrower will perform the obligations
set forth in this Article.
SECTION 5.1. FINANCIAL REPORTING; RATINGS CHANGE; NOTICES AND
OTHER INFORMATION. Borrower will furnish, or will cause to be furnished, to
each Lender, the Global Administrative Agent and the Canadian Administrative
Agent copies of the following financial statements, reports, notices and
information:
52
(a) Concurrently with any delivery of financial statements under
CLAUSE (a) or (b) of Section 5.1 of the U.S. Credit Agreement, if Parent has not
supplied a compliance certificate, in substantially the form of EXHIBIT C
thereto or any other form approved by the Global Administrative Agent, executed
by an Authorized Officer of Parent, then Canadian Forest shall deliver a
compliance certificate substantially in the form of EXHIBIT C hereto certifying
as to whether a Default has occurred and, if a Default has occurred, specifying
the details thereof and any action taken or proposed to be taken with respect
thereto; and
(b) Promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of Borrower
or any Restricted Subsidiary, including, without limitation, any requested
Internal Reserve Report, or compliance with the terms of this Agreement, as the
Global Administrative Agent, the Canadian Administrative Agent or any Lender may
reasonably request.
SECTION 5.2. NOTICE OF MATERIAL EVENTS.
(a) Promptly, and in any event within three (3) Business Days of
Canadian Forest or any of its Restricted Subsidiaries becoming aware of the
following events, Canadian Forest will furnish to the Global Administrative
Agent and each Lender written notice of the occurrence of any Default.
(b) Each notice delivered under this Section shall be accompanied by a
statement of an Authorized Officer of Canadian Forest setting forth the details
of the event or development requiring such notice and any action taken or
proposed to be taken with respect thereto.
SECTION 5.3. EXISTENCE; CONDUCT OF BUSINESS. Borrower will,
and will cause each of its Restricted Subsidiaries to, do or cause to be done
all things necessary to preserve, renew and keep in full force and effect
(i) its legal existence and (ii) the rights, licenses, permits, privileges,
franchises, patents, copyrights, trademarks and trade names material to the
conduct of its business, except where the failure to so preserve, renew or
keep in full force and effect such rights, licenses, permits, privileges,
franchises, patents, copyrights, trademarks or trade names could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.4. CASUALTY AND CONDEMNATION. Canadian Forest
(a) will furnish to the Global Administrative Agent and the Lenders written
notice promptly, and in any event within three (3) Business Days of the
occurrence, of any Casualty Event to any Collateral or the commencement of
any action or proceeding for the taking of any material portion of the
Collateral or any part thereof or interest therein under power of eminent
domain or by condemnation or similar proceeding and (b) will ensure that the
Net Proceeds of any such event (whether in the form of insurance proceeds,
condemnation awards or otherwise) are collected and applied in accordance
with the applicable provisions of the Combined Loan Documents.
53
SECTION 5.5. BOOKS AND RECORDS; INSPECTION AND AUDIT RIGHTS.
Canadian Forest will, and will cause each of its Subsidiaries to, keep proper
books of record and account in which full, true and correct entries are made
of all dealings and transactions in relation to its business and activities.
Canadian Forest will, and will cause each of its Restricted Subsidiaries to,
permit any representatives or agents designated by the Global Administrative
Agent, the Canadian Administrative Agent or any Lender (including any
consultants, accountants, lawyers and appraisers), upon reasonable prior
notice and at the reasonable cost and expense of Canadian Forest, to visit
and inspect its Property, including, without limitation, the Oil and Gas
Properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably
requested.
SECTION 5.6. COMPLIANCE WITH LAWS. Canadian Forest will, and
will cause each of its Subsidiaries to, comply with all Governmental Rules
applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect.
SECTION 5.7. USE OF PROCEEDS AND LETTERS OF CREDIT. Canadian
Forest will, and will cause each Subsidiary to, use the proceeds of the Loans
(a) to refinance existing Indebtedness of Canadian Forest and its
Subsidiaries, (b) to reimburse each Issuing Bank for LC Disbursements in
accordance with SECTION 2.4(e), or (c) for Borrower's and its Subsidiaries'
general corporate purposes, including any non-hostile acquisitions. No part
of the proceeds of any Loan will be used, whether directly or indirectly, for
any purpose that is prohibited by Section 5.11 of the U.S. Credit Agreement.
Letters of Credit will be issued only to support normal and customary oil and
gas operations undertaken by Canadian Forest or any of its Subsidiaries in
the ordinary course of its business.
SECTION 5.8. ADDITIONAL SUBSIDIARIES. If any Restricted
Subsidiary as of the date of the date of its formation, its acquisition or at
any time thereafter has a total asset value in excess of U.S.$25,000,000 (or
its equivalent in other currencies) and has incurred Indebtedness or
Guaranteed Indebtedness in excess of U.S.$5,000,000 (or its equivalent in
other currencies) in favor of any Person other than a Loan Party, then
Canadian Forest will (a) cause such Subsidiary (unless such Subsidiary is a
Foreign Subsidiary) either (i) to become a Subsidiary Borrower or (ii) to
execute a Guaranty within 30 days after such Subsidiary is formed or acquired
or it is determined to have the requisite total asset value and Indebtedness
owed to third parties and (b) if the Applicable Rating Level is Level III,
execute a Debenture and a Deposit Agreement (to the extent necessary to
comply with SECTION 5.15(c) of the U.S. Credit Agreement) and promptly take
such actions to create and perfect Liens on such Subsidiary's assets to
secure the Obligations as the Global Administrative Agent shall reasonably
request and pledge or cause to be pledged, pursuant to such foregoing
Debentures and Deposit Agreements, all Equity Interests in such Restricted
Subsidiary within 30 days after such Subsidiary is formed or acquired.
54
SECTION 5.9. FURTHER ASSURANCES.
(a) Borrower will, and will cause each Loan Party to, execute any and
all further documents, financing statements, agreements and instruments, and
take all such further actions (including the filing and recording of financing
statements, fixture filings, mortgages, deeds of trust and other documents),
which may be required under any applicable law, or which the Global
Administrative Agent, the Canadian Administrative Agent or the Required Lenders
may reasonably request, to effectuate the transactions contemplated by the Loan
Documents or to grant, preserve, protect or perfect the Liens created or
intended to be created by the Security Documents or the validity or priority of
any such Lien, all at the expense of the Loan Parties. Borrower also agrees to
provide to the Global Administrative Agent and the Canadian Administrative
Agent, from time to time upon reasonable request of the Global Administrative
Agent or the Canadian Administrative Agent, information which is in the
possession of Canadian Forest or its Restricted Subsidiaries or otherwise
reasonably obtainable by any of them, reasonably satisfactory to the Global
Administrative Agent and the Canadian Administrative Agent as to the perfection
and priority of the Liens created or intended to be created by the Security
Documents. The Security Documents shall remain in effect at all times unless
otherwise released pursuant to the terms of this Agreement.
(b) Borrower hereby authorizes the Global Administrative Agent, the
Canadian Administrative Agent and the Lenders to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of
the Collateral without the signature of Borrower or any other Loan Party where
permitted by law. A carbon, photographic or other reproduction of the Security
Documents or any financing statement covering the Collateral or any part thereof
shall be sufficient as a financing statement where permitted by law. The Global
Administrative Agent will promptly send Canadian Forest any financing or
continuation statements it files without the signature of Borrower or any other
Loan Party and the Global Administrative Agent will promptly send Canadian
Forest the filing or recordation information with respect thereto.
SECTION 5.10. COVENANTS IN U.S. CREDIT AGREEMENT. Until the
payment in full in cash of all Obligations and the termination or expiration
of all Commitments and Letters of Credit and Bankers' Acceptances, each
Borrower covenants and agrees that such Borrower will perform, comply with,
observe and fulfill, and will cause each of its Restricted Subsidiaries to
perform, comply with, observe and fulfill, each of the covenants, agreements
and obligations contained in the U.S. Credit Agreement, including, without
limitation, Article V (other than Section 5.12 of the U.S. Credit Agreement)
and Article VII of the U.S. Credit Agreement, pertaining or otherwise
applicable to such Borrower in its capacity as a Restricted Subsidiary of the
Parent. Each Borrower hereby irrevocably and unconditionally agrees to be
bound by such covenants, agreements and obligations applicable to it in such
capacity as if such Borrower were a party to the U.S. Credit Agreement and
such covenants, agreements, and obligations applicable to it in such capacity
are hereby reaffirmed by such Borrower.
55
ARTICLE VI
[NOT USED]
ARTICLE VII
NEGATIVE COVENANTS
Borrower agrees with the Global Administrative Agent, the Canadian
Administrative Agent, the other Agents, any Issuing Bank, and each Lender that,
until the Commitments have expired or been terminated and Obligations shall have
been paid and performed in full and all Letters of Credit shall have expired or
terminated and all LC Disbursements shall have been reimbursed and no Bankers'
Acceptances Liabilities are outstanding, Borrower will perform the obligations
set forth in this Article.
SECTION 7.1. TRANSACTIONS WITH AFFILIATES. Borrower will not,
and will not permit any Restricted Subsidiary to, sell, lease or otherwise
transfer any Property or assets to, or purchase, lease or otherwise acquire
any Property or assets from, or otherwise engage in any other transactions
with, any of its Affiliates, except (a) transactions in the ordinary course
of business and that are at prices and on terms and conditions not less
favorable to Borrower or such Restricted Subsidiary than could be obtained on
an arm's-length basis from unrelated third parties, (b) transactions between
or among Borrower and the Restricted Subsidiaries not involving any other
Affiliate, (c) any Restricted Payment permitted by SECTION 7.8 of the U.S.
Credit Agreement, and (d) any Investment permitted by SECTION 7.4 of the U.S.
Credit Agreement.
SECTION 7.2. RESTRICTIVE AGREEMENTS. Borrower will not, and
will not permit any Restricted Subsidiary to, directly or indirectly, enter
into, incur or permit to exist any agreement or other arrangement that
prohibits or restricts (a) the ability of Borrower or any Restricted
Subsidiary to create, incur or permit to exist any Lien in favor of the
Global Administrative Agent and/or the Canadian Administrative Agent for the
benefit of the Combined Lenders upon any of its Property, or (b) the ability
of any Restricted Subsidiary to make Restricted Payments to Borrower or any
other Restricted Subsidiary or to Guarantee Indebtedness of Borrower or any
other Restricted Subsidiary; PROVIDED that (i) the foregoing shall not apply
to restrictions and conditions imposed by law or by any Combined Loan
Document or Subordinated Indebtedness Document, (ii) the foregoing shall not
apply to restrictions and conditions existing on the date of this Agreement
identified on SCHEDULE 7.10 of the U.S. Credit Agreement (but shall apply to
any extension or renewal of, or any amendment or modification expanding the
scope of, any such restriction or condition), (iii) the foregoing shall not
apply to customary restrictions and conditions contained in agreements
relating to the sale of a Restricted Subsidiary pending such sale, PROVIDED
such restrictions and conditions apply only to the Restricted Subsidiary that
is to be sold and such sale is permitted hereunder, (iv) CLAUSE (a) of the
foregoing shall not apply to restrictions or conditions imposed by any
agreement relating to secured Indebtedness or other obligations permitted by
this Agreement or the U.S. Credit Agreement if such restrictions or
conditions apply only to the Property or assets securing such Indebtedness or
other obligation, and (v) CLAUSE (a) of the foregoing shall not apply to
customary provisions in leases or other agreements restricting the assignment
thereof.
56
SECTION 7.3. SUBORDINATED INDEBTEDNESS. Canadian Forest will
not amend or modify the terms of subordination contained in any of the
Subordinated Indebtedness Documents or otherwise shorten the maturity or
average life, or increase the interest payable on, any of the Subordinated
Indebtedness.
SECTION 7.4. NO ACTION TO AFFECT SECURITY DOCUMENTS. Except
for transactions expressly permitted hereby, Canadian Forest shall not, and
shall not permit any of its Subsidiaries to, do anything to adversely affect
the priority of the Security Documents given or to be given in respect of the
obligations of Canadian Forest or any other Borrower hereunder.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. LISTING OF EVENTS OF DEFAULT. Each of the
following events or occurrences described in this SECTION 8.1 shall
constitute an "EVENT OF DEFAULT":
(a) NON-PAYMENT OF OBLIGATIONS. Any Loan Party shall default in the
payment or prepayment when due of any principal of any Loan (including BA Loans
and Bankers' Acceptances) or of any reimbursement obligation with respect to any
Letter of Credit or Bankers' Acceptance; or Borrower shall default in the
payment when due of any interest, fee or of any other obligation hereunder or
under any other Loan Document and such default continues for a period of three
(3) Business Days.
(b) BREACH OF WARRANTY. Any representation or warranty of any Loan
Party made or deemed to be made hereunder or in any other Loan Document or any
other writing or certificate furnished by or on behalf of any Loan Party to the
Global Administrative Agent, the Canadian Administrative Agent, any other Agent
or any Lender for the purposes of or in connection with this Agreement or any
such other Loan Document is or shall be false or misleading when made in any
material respect.
(c) NON-PERFORMANCE OF COVENANTS AND OBLIGATIONS. Any Loan Party shall
default in the due performance and observance of any of its obligations under
SECTIONS 5.2 or 5.7, or under ARTICLE VII.
(d) NON-PERFORMANCE OF OTHER COVENANTS AND OBLIGATIONS. Any Loan Party
shall default in the due performance and observance of any other agreement
contained herein or in any other Loan Document, and such default shall continue
unremedied for a period of 30 days after notice thereof shall have been given to
Borrower by the Global Administrative Agent or the Required Lenders.
(e) DEFAULT ON OTHER INDEBTEDNESS. Any Loan Party shall default in the
payment when due of any principal of or interest on any of its other
Indebtedness aggregating U.S.$15,000,000 or more, or in the payment when due of
U.S.$5,000,000 or more in the aggregate under one or more Hedging Agreements; or
any event specified in any note, agreement, indenture or other document
evidencing
57
or relating to any such Indebtedness shall occur if the effect of such event is
to cause, or (with the giving of any notice or the lapse of time or both) to
permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause, such Indebtedness to become due, or
to be prepaid in full (whether by redemption, purchase, offer to purchase or
otherwise), prior to its stated maturity.
(f) [Intentionally omitted.]
(g) BANKRUPTCY AND INSOLVENCY. Any Loan Party shall (i) generally fail
to pay, or admit in writing its inability or unwillingness to generally pay,
debts as they become due; (ii) apply for, consent to, or acquiesce in, the
appointment of a trustee, receiver, receiver and manager, sequestrator or other
custodian for any Loan Party, or any substantial part of the property of any
thereof, or make a general assignment for the benefit of creditors; (iii) in the
absence of such application, consent or acquiescence, permit or suffer to exist
the appointment of a trustee, receiver, receiver and manager, sequestrator or
other custodian for any Loan Party, or for a substantial part of the property of
any thereof, and such trustee, receiver, receiver and manager, sequestrator or
other custodian shall not be discharged within 60 days, provided that each Loan
Party hereby expressly authorizes the Global Administrative Agent and the
Canadian Administrative Agent to appear in any court conducting any relevant
proceeding during such 60-day period to preserve, protect and defend the rights
of the Combined Lenders under the Loan Documents; (iv) permit or suffer to exist
the commencement of any bankruptcy, reorganization, debt arrangement or other
case or proceeding under any bankruptcy or insolvency law (including the
Bankruptcy and Insolvency Act (Canada)), or any dissolution, winding up or
liquidation proceeding, in respect of any Loan Party, and, if any such case or
proceeding is not commenced by such Loan Party, such case or proceeding shall be
consented to or acquiesced in by such Loan Party or shall result in the entry of
an order for relief or shall remain for 60 days undismissed, provided that each
Loan Party hereby expressly authorizes the Global Administrative Agent and the
Canadian Administrative Agent to appear in any court conducting any such case or
proceeding during such 60-day period to preserve, protect and defend the rights
of the Combined Lenders under the Loan Documents; or (v) take any corporate or
partnership action authorizing, or in furtherance of, any of the foregoing.
(h) JUDGMENTS. One or more judgments or orders for the payment of money
in excess of U.S.$5,000,000 in the aggregate (exclusive of amounts fully covered
by valid and collectible insurance in respect thereof subject to customary
deductibles or fully covered by an indemnity with respect thereto reasonably
acceptable to the Required Lenders) shall be rendered against any Loan Party and
either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order, or (ii) such judgment shall have become final and
non-appealable and shall have remained outstanding for a period of 60
consecutive days.
(i) CHANGE IN CONTROL. Parent shall fail to own or control, directly or
indirectly, all of the outstanding shares of common stock of Canadian Forest or
any other Borrower.
58
(j) FAILURE OF LIENS. The Liens created by the Security Documents shall
at any time not constitute a valid and perfected Lien on the collateral intended
to be covered thereby (to the extent perfection by filing, registration,
recordation or possession is required herein or therein) in favor of the Global
Administrative Agent or, except for expiration in accordance with its terms, any
of the Security Documents shall for whatever reason be terminated or cease to be
in full force and effect, or the enforceability thereof shall be contested by
any Loan Party.
(k) EVENT OF DEFAULT UNDER U.S. LOAN DOCUMENTS. Any "Event of Default"
as defined in the U.S. Loan Documents shall occur; PROVIDED that the occurrence
of a "Default" as defined in the U.S. Loan Documents shall constitute a Default
under this Agreement; PROVIDED FURTHER that if such "Default" or "Event of
Default" is cured or waived under the U.S. Loan Documents, as applicable, then
such "Default" or "Event of Default" shall no longer constitute a Default or an
Event of Default, respectively, under this Agreement.
SECTION 8.2. ACTION IF BANKRUPTCY. If any Event of Default
with respect to any Borrower described in SECTION 8.1(g) shall occur, the
Commitments (if not theretofore terminated) shall automatically terminate and
the outstanding principal amount of all outstanding Loans and all other
obligations hereunder shall automatically be and become immediately due and
payable, without demand, protest or presentment or notice of any kind, all of
which are hereby expressly waived by Borrower and its Subsidiaries. Without
limiting the foregoing, the Agents and the Lenders shall be entitled to
exercise any and all other remedies available to them under the Loan
Documents and applicable law.
SECTION 8.3. ACTION IF OTHER EVENT OF DEFAULT. If any Event of
Default (other than any Event of Default described in SECTION 8.1(g) with
respect to any Borrower) shall occur for any reason, whether voluntary or
involuntary, and be continuing, the Required Lenders, may, by notice to
Borrower declare (a) the Commitments (if not theretofore terminated) to be
terminated and/or (b) all of the outstanding principal amount of the Loans
(including BA Loans and Bankers' Acceptances) and all other obligations
hereunder to be due and payable, whereupon the Commitments shall terminate
and the full unpaid amount of such Loans and other obligations shall be and
become immediately due and payable, without demand, protest or presentment or
notice of any kind, all of which are hereby waived by Borrower and its
Subsidiaries. Without limiting the foregoing, the Agents and the Lenders
shall be entitled to exercise any and all other remedies available to them
under the Loan Documents and applicable law.
ARTICLE IX
AGENTS
Each of the Lenders, the Issuing Banks and the other Agents hereby
irrevocably appoints The Chase Manhattan Bank as the Global Administrative
Agent, The Chase Manhattan Bank of Canada, as the Canadian Administrative Agent,
Bank of Montreal as Canadian Syndication Agent, The Toronto-Dominion Bank as
Canadian Documentation Agent, and The Chase Manhattan Bank, Bank of America,
N.A. and Citibank, N.A. as Technical Lenders, and authorizes each such Agent to
take
59
such actions on its behalf and to exercise such powers as are delegated to such
Agent by the terms of the Loan Documents, together with such actions and powers
as are reasonably incidental thereto.
Any bank serving as an Agent hereunder shall have the same rights and
powers in its capacity as a Lender as any other Lender and may exercise the same
as though it were not an Agent, and such bank and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of business with
Borrower or any Subsidiary or other Affiliate thereof as if it were not an Agent
hereunder.
The Agents shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (a) the Agents shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) each Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Loan Documents that such Agent is required to
exercise following its receipt of written instructions from the Required Lenders
(or such other number or percentage of the Combined Lenders as shall be
necessary under the circumstances as provided in SECTION 10.2), and (c) except
as expressly set forth in the Loan Documents, the Agents shall not have any duty
to disclose, and shall not be liable for the failure to disclose, any
information relating to Parent, Borrower or any of their Subsidiaries that is
communicated to or obtained by the bank serving as such Agent or any of its
Related Parties in any capacity. Each Agent shall not be liable for any action
taken or not taken by it with the consent or at the request of the Required
Lenders (or such other number or percentage of the Combined Lenders as shall be
necessary under the circumstances as provided in SECTION 10.2) or in the absence
of its own gross negligence or wilful misconduct; PROVIDED, HOWEVER, THAT IT IS
THE INTENTION OF THE PARTIES HERETO THAT EACH OF THE AGENTS BE INDEMNIFIED IN
THE CASE OF ITS OWN NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE), REGARDLESS OF
WHETHER SUCH NEGLIGENCE IS SOLE OR CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED,
JOINT OR TECHNICAL. Each Agent shall be deemed not to have knowledge of any
Default unless and until written notice thereof is given to such Agent by
Borrower or a Lender, and such Agent shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered thereunder or in connection
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Loan Document, (iv) the
validity, enforceability, effectiveness or genuineness of any Loan Document or
any other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in ARTICLE IV or elsewhere in any Loan Document, other than
to confirm receipt of items expressly required to be delivered to such Agent.
The Global Administrative Agent, the Canadian Administrative Agent and
the other Agents shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Global Administrative
Agent, the
60
Canadian Administrative Agent and the other Agents also may rely upon any
statement made to it orally or by telephone and believed by it to be made by the
proper Person, and shall not incur any liability for relying thereon. The Global
Administrative Agent, the Canadian Administrative Agent and the other Agents may
consult with legal counsel (who may be counsel for Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
Any Agent may perform any and all its duties and exercise its rights
and powers by or through any one or more sub-agents appointed by such Agent. Any
Agent and any such sub-agent may perform any and all its duties and exercise its
rights and powers through their respective Related Parties. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of such Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as an Agent.
Subject to the appointment and acceptance of a successor Global
Administrative Agent or the Canadian Administrative Agent as provided in this
paragraph, the Global Administrative Agent or the Canadian Administrative Agent
may resign at any time by notifying the Combined Lenders and Borrower. Upon any
such resignation, the Required Lenders shall have the right, in consultation
with Borrower, to appoint a successor. If no successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Global Administrative Agent or retiring
Canadian Administrative Agent gives notice of its resignation, then the retiring
Global Administrative Agent or the Canadian Administrative Agent may, on behalf
of the Combined Lenders and the Issuing Banks, appoint a successor Global
Administrative Agent or the Canadian Administrative Agent, respectively, which
shall be a bank with an office in New York, New York or Toronto, Canada,
respectively, or an Affiliate of any such bank. Upon the acceptance of its
appointment as Global Administrative Agent or the Canadian Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Global
Administrative Agent or the Canadian Administrative Agent, as the case may be,
and the retiring Global Administrative Agent or the retiring Canadian
Administrative Agent shall be discharged from its duties and obligations
hereunder (other than its obligations under SECTION 10.12). The fees payable by
Borrower to a successor Global Administrative Agent or successor Canadian
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between Borrower and such successor. After the Global
Administrative Agent's or Canadian Administrative Agent's resignation hereunder,
the provisions of this Article and SECTION 10.3 shall continue in effect for the
benefit of such retiring Global Administrative Agent or retiring Canadian
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was
acting as Global Administrative Agent or the Canadian Administrative Agent,
respectively.
Each Lender acknowledges that it has, independently and without
reliance upon any Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the Intercreditor
61
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon any Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.
Each of the Lenders, for itself and on behalf of any of its Affiliates,
and the Issuing Banks hereby irrevocably appoints the Global Administrative
Agent and the Canadian Administrative Agent to act as its agent under the
Intercreditor Agreement and authorizes the Global Administrative Agent and the
Canadian Administrative Agent to execute the Intercreditor Agent on its behalf
and to take such actions on its behalf and to exercise such powers as are
delegated to the Global Administrative Agent or Canadian Administrative Agent,
as the case may be, by the terms hereof and thereof, together with such actions
and powers as are reasonably incidental thereto.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. NOTICES. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) IF TO BORROWER, TO:
Canadian Forest Oil Ltd.
600, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇
Attention: Vice President - Finance
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 403-292-8000
with a copy to
Forest Oil Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President and Treasurer
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
62
(b) IF TO THE GLOBAL ADMINISTRATIVE AGENT, TO:
The Chase Manhattan Bank
Loan and Agency Services
One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
The Chase Manhattan Bank
Global Oil & Gas Group
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
and, with respect to non-Borrowing related matters, with a copy to:
The Chase Manhattan Bank
Global Oil & Gas Group
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
(c) if to the Canadian Administrative Agent:
The Chase Manhattan Bank of Canada
1 First Canadian Place
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
P.O. Box 106
Toronto, Ontario
Canada M5X 1A4
Attention: Portfolio Management Associates
Telephone: ▇▇▇-▇▇▇-▇▇▇▇ or 4106
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
63
(d) if to the Canadian Syndication Agent:
Bank of Montreal
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention:
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
(e) if to the Canadian Documentation Agent:
The Toronto-Dominion Bank
66 Wellington
TD Tower, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
The Toronto-Dominion Bank
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(f) if to any other Lender, to it at its address (or telecopy number)
provided to the Global Administrative Agent, the Canadian Administrative Agent
and Borrower or as set forth in its Administrative Questionnaire; and
(g) if to any U.S. Lender, to it at its address (or telecopy number)
provided to the Global Administrative Agent and Parent or as set forth in its
Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
64
SECTION 10.2. WAIVERS; AMENDMENTS.
(a) No failure or delay by the Global Administrative Agent, any Issuing
Bank or any Lender in exercising any right or power hereunder or under any other
Loan Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Global Administrative Agent, the Issuing Banks and the Lenders hereunder and
under the other Loan Documents are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any provision of
any Loan Document or consent to any departure by any Loan Party therefrom shall
in any event be effective unless the same shall be permitted by PARAGRAPH (b) of
this Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan or issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless of whether
the Global Administrative Agent, the Canadian Administrative Agent, any Lender
or any Issuing Bank may have had notice or knowledge of such Default at the
time.
(b) Neither this Agreement nor any of the Combined Loan Documents nor
any provision hereof or thereof may be waived, amended or modified except, in
the case of this Agreement, pursuant to an agreement or agreements in writing
entered into by Borrower and the Required Lenders or by Borrower and the Global
Administrative Agent and the Canadian Administrative Agent with the consent of
the Required Lenders, or, in the case of any other Combined Loan Document,
pursuant to an agreement or agreements in writing entered into by the relevant
Loan Parties thereto and the Required Lenders or by the relevant Loan Parties
thereto and the Global Administrative Agent and the Canadian Administrative
Agent with the consent of the Required Lenders; PROVIDED that the same waiver,
amendment or modification is requested by Parent or Borrower in connection with
each of the Combined Credit Agreements; and PROVIDED FURTHER that no such
agreement shall (i) increase the Commitment of any Lender without the written
consent of such Lender, (ii) reduce the principal amount of any Loan or LC
Disbursement or reduce the rate of interest thereon, or reduce any fees payable
hereunder, without the written consent of each Lender affected thereby, (iii)
postpone the scheduled date of payment of the principal amount of any Loan or LC
Disbursement, or any interest thereon, or any fees payable hereunder, or reduce
the amount of, waive or excuse any such payment, or postpone the scheduled date
of expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change SECTION 2.18(b) or (c) in a manner that would
alter the pro rata sharing of payments required thereby, without the written
consent of each Lender, (v) change any of the provisions of this SECTION 10.2,
SECTION 2.10 or the definition of "Required Lenders" or any other provision of
any Combined Loan Document specifying the number or percentage of Lenders, U.S.
Lenders or Combined Lenders required to determine or redetermine the Global
Borrowing Base, the Allocated U.S. Borrowing Base or the Allocated Canadian
Borrowing Base or required to waive, amend or modify any rights thereunder or
make any determination or grant any consent thereunder, without the written
consent of each Combined Lender, (vi) release any Loan Party from its Guaranty
(except as expressly provided in such Guaranty), or limit its liability in
respect of such Guaranty, without the written
65
consent of each Combined Lender, or (vii) except as expressly provided herein,
in the Intercreditor Agreement or in the Security Documents (as defined herein
and in the U.S. Credit Agreement), release all or any part of the Collateral
from the Liens of the Security Documents (as defined herein and in the U.S.
Credit Agreement), without the written consent of each Combined Lender; PROVIDED
FURTHER that no such agreement shall amend, waive, modify or otherwise affect
the rights or duties of any Agent (as defined herein and in the U.S. Credit
Agreement) or any Issuing Bank (as defined herein and in the U.S. Credit
Agreement) without the prior written consent of such Agent (as defined herein
and in the U.S. Credit Agreement) or any Issuing Bank (as defined herein and in
the U.S. Credit Agreement), as the case may be; PROVIDED FURTHER that the Global
Administrative Agent shall have the right to execute and deliver any release of
Lien (or other similar instrument) without the consent of any Lender to the
extent such release is required to permit Borrower or a Restricted Subsidiary to
consummate a transaction permitted by this Agreement or the other Combined Loan
Documents.
SECTION 10.3. EXPENSES; INDEMNITY; DAMAGE WAIVER.
(a) Borrower shall pay (i) all legal, printing, recording, syndication,
travel, advertising and other reasonable out-of-pocket expenses incurred by the
Agents, the Arranger and their Affiliates, including the reasonable fees,
charges and disbursements of counsel for the Agents and the Arranger (on a
solicitor and his own client basis), in connection with the syndication of the
credit facilities provided for herein, the preparation, execution, delivery and
administration of this Agreement, the Loan Documents and each other document or
instrument relevant to this Agreement or the Loan Documents and any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses incurred by an Issuing Bank in connection with
the issuance, amendment, renewal or extension of any Letter of Credit or any
demand for payment thereunder, (iii) the filing, recording, refiling or
rerecording of the Debentures, the Deposit Agreements and the other Security
Documents and/or any financing statements relating thereto and all amendments,
supplements and modifications to, and all releases and terminations of, any
thereof and any and all other documents or instruments of further assurance
required to be filed or recorded or refiled or rerecorded by the terms hereof or
of the Debentures, the Deposit Agreements and the other Security Documents, and
(iv) all out-of-pocket expenses incurred by the Agents, any Issuing Bank or any
Lender, including the fees, charges and disbursements of any counsel for the
Agents, any Issuing Bank or any Lender (on a solicitor and his own client
basis), in connection with the enforcement or protection of its rights in
connection with the Loan Documents, including its rights under this Section, or
in connection with the Loans made or Letters of Credit issued hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.
(b) Borrower shall indemnify the Agents, each Issuing Bank, the
Arranger and each Lender, and each Related Party of any of the foregoing Persons
(each such Person being called an "INDEMNITEE") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the reasonable out-of-pocket fees, charges and
66
disbursements of any counsel for any Indemnitee (on a solicitor and his own
client basis), incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of any Loan
Document or any other agreement or instrument contemplated hereby, the
performance by the parties to the Loan Documents of their respective obligations
thereunder or the consummation of the Financing Transactions or any other
transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use
of the proceeds therefrom (including any refusal by an Issuing Bank to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any Mortgaged Property or any other property currently or
formerly owned or operated by Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party thereto;
PROVIDED that such indemnity and release shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or wilful
misconduct of such Indemnitee (IT BEING UNDERSTOOD THAT IT IS THE INTENTION OF
THE PARTIES HERETO THAT EACH OF THE INDEMNITEES BE INDEMNIFIED IN THE CASE OF
ITS OWN NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE), REGARDLESS OF WHETHER SUCH
NEGLIGENCE IS SOLE OR CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR
TECHNICAL).
(c) To the extent that Borrower fails to pay any amount required to be
paid by Borrower to the Global Administrative Agent, the Canadian Administrative
Agent or an Issuing Bank under PARAGRAPH (a) or (b) of this Section, each Lender
severally agrees to pay to the Global Administrative Agent, the Canadian
Administrative Agent or such Issuing Bank, as the case may be, such Lender's
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
PROVIDED that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Global Administrative Agent, the Canadian Credit Agreement or such
Issuing Bank in its capacity as such.
(d) To the extent permitted by applicable law, Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Financing Transactions, any Loan or Letter of Credit or the use of the proceeds
thereof.
(e) All amounts due under this Section shall be payable not later than
thirty (30) days after written demand therefor.
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SECTION 10.4. SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of an Issuing Bank that issues any
Letter of Credit), except that Borrower may not assign or otherwise transfer any
of its rights or obligations hereunder without the prior written consent of the
Global Administrative Agent, each Issuing Bank and each Combined Lender (and any
attempted assignment or transfer by Borrower without such consent shall be null
and void). Nothing in this Agreement, expressed or implied, shall be construed
to confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby (including any Affiliate of an Issuing
Bank that issues any Letter of Credit) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Global Administrative Agent, the
Issuing Banks and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Commitment and the Loans at the time owing to it) to any Person who is not a
Foreign Lender; PROVIDED that (i) except in the case of an assignment to a
Lender or a Lender Affiliate, each of Borrower, the Canadian Administrative
Agent and the Global Administrative Agent (and, in the case of an assignment of
all or a portion of a Commitment or any Lender's obligations in respect of its
LC Exposure, the Issuing Banks) must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld), (ii) except in
the case of an assignment to a Lender or a Lender Affiliate or an assignment of
the entire remaining amount of the assigning Lender's Commitment or Loans, the
amount of the Commitment or Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Global Administrative Agent) shall be in
increments of U.S.$1,000,000 and not less than U.S.$5,000,000 unless each of
Borrower and the Global Administrative Agent otherwise consent, (iii) each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender's rights and obligations under this Agreement, except that
this clause (iii) shall not be construed to prohibit the assignment of a
proportionate part of all the assigning Lender's rights and obligations in
respect of its Commitments or Loans in conformity with the Intercreditor
Agreement, (iv) the parties to each assignment shall execute and deliver to the
Global Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee of U.S.$3,500, (v) the assignee, if it shall not
be a Lender, shall deliver to the Global Administrative Agent an Administrative
Questionnaire, and (vi) after giving effect to any assignment hereunder, the
assigning Lender shall have a Commitment of at least U.S.$5,000,000 unless each
of Borrower and the Global Administrative Agent otherwise consents; and PROVIDED
FURTHER that any consent of Borrower otherwise required under this paragraph
shall not be required if an Event of Default under SECTION 8.1 has occurred and
is continuing. Subject to acceptance and recording thereof pursuant to
paragraph (d) of this Section, from and after the effective date specified in
each Assignment and Acceptance, the assignee thereunder shall be a party hereto
and to the other Loan Documents and, to the extent of the interest assigned by
such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the
68
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement and the other Loan Documents (and, in
the case of an Assignment and Acceptance covering all of the assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of SECTIONS 2.15,
2.16, 2.17, 2.18, 2.20 and 10.3 and be subject to the terms of SECTION 10.12).
Any assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this paragraph shall be treated for purposes
of this Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (e) of this Section.
(c) The Global Administrative Agent and the Canadian Administrative
Agent, acting for this purpose as an agent of Borrower, shall maintain at one of
its offices in The City of New York and Toronto, Canada, respectively, a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "REGISTER"). The entries in
the Register shall be conclusive, and Borrower, the Global Administrative Agent,
the Canadian Administrative Agent, the Issuing Banks and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement and the other Loan
Documents, notwithstanding notice to the contrary. The Register shall be
available for inspection by Borrower, any Issuing Bank and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by
PARAGRAPH (b) of this Section, the Global Administrative Agent and the Canadian
Administrative Agent shall accept such Assignment and Acceptance and record the
information contained therein in the Register and will provide prompt written
notice to Borrower of the effectiveness of such assignment. No assignment shall
be effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.
(e) Any Lender may, without the consent of Borrower, the Global
Administrative Agent, the Canadian Administrative Agent or any Issuing Bank,
sell participations to one or more banks or other entities which are resident in
Canada for purposes of the INCOME TAX ACT (CANADA) (a "PARTICIPANT") in all or a
portion of such Lender's rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans owing to it); PROVIDED that (i)
such Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, and (iii) Borrower, the Global Administrative
Agent, the Canadian Administrative Agent, the Issuing Banks and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall
69
retain the sole right to enforce the Loan Documents and to approve any
amendment, modification or waiver of any provision of the Loan Documents;
PROVIDED that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the second proviso to SECTION 10.2(b) that
affects such Participant. Subject to paragraph (f) of this Section, Borrower
agrees that each Participant shall be entitled to the benefits of SECTIONS 2.15,
2.16 and 2.17 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
SECTION 10.8 and 10.12 as though it were a Lender, provided such Participant
agrees to be subject to SECTION 2.18(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater payment
under SECTION 2.15, 2.16 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant.
(g) Any Lender may at any time pledge or assign a Lien in all or any
portion of its rights under this Agreement to secure obligations of such Lender,
and this Section shall not apply to any such pledge or assignment; provided that
no such pledge or assignment of a security interest shall release a Lender from
any of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.
SECTION 10.5. SURVIVAL. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that any Agent, any
Issuing Bank, the Arranger or any Lender may have had notice or knowledge of
any Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loan or any fee or any other
amount payable under this Agreement is outstanding and unpaid or any Letter
of Credit is outstanding and so long as the Commitments have not expired or
terminated. The provisions of SECTIONS 2.15, 2.16, 2.17, 2.18, 2.20, 10.3 and
10.12 and ARTICLE IX shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Letters of
Credit and the Commitments or the termination of this Agreement or any
provision hereof.
SECTION 10.6. COUNTERPARTS; EFFECTIVENESS. This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. Except as provided in SECTION
4.1, this Agreement shall become effective when it shall have been executed by
the Global Administrative Agent and the Canadian Administrative Agent and when
the Global Administrative Agent and the Canadian Administrative Agent shall have
received counterparts
70
hereof which, when taken together, bear the signatures of each of the other
parties hereto, and thereafter shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.
SECTION 10.7. SEVERABILITY. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.
SECTION 10.8. RIGHT OF SETOFF. If an Event of Default shall
have occurred and be continuing, each of the Agents, the Issuing Banks, the
Lenders and their Affiliates is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at
any time held and other obligations at any time owing by such Lender or
Affiliate to or for the credit or the account of Borrower or any of its
Restricted Subsidiaries against any and all the obligations of Borrower now
or hereafter existing under this Agreement held by such Lender, irrespective
of whether or not such Lender shall have made any demand under this Agreement
and although such obligations may be unmatured; PROVIDED, HOWEVER, that any
such set-off and application shall be subject to the provisions of
SECTION 2.18. As security for such obligations, Borrower hereby grants to the
Agents, each Issuing Bank and each Lender a continuing security interest in any
and all balances, credits, deposits, accounts or moneys of Borrower and its
Restricted Subsidiaries then or thereafter maintained with any of the Agents,
such Issuing Bank and such Lenders. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights
of setoff) which such Lender may have.
SECTION 10.9. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS.
(a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN THOSE
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE PROVINCE OF ALBERTA AND OF CANADA APPLICABLE
THEREIN.
(b) BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF
AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE PROVINCE
OF ALBERTA, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY LOAN DOCUMENT, OR
FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY
SUCH
71
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH COURTS OF THE PROVINCE
OF ALBERTA. EACH OF THE PARTIES HERETO AGREES THAT, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, 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. NOTHING IN THIS AGREEMENT SHALL
AFFECT ANY RIGHT THAT THE AGENTS OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AGAINST BORROWER OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(c) BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, 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 THIS AGREEMENT IN ANY COURT REFERRED TO IN
PARAGRAPH (b) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(d) EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR
WITHOUT THE PROVINCE OF ALBERTA. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT
OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW.
SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY). EACH PARTY HERETO (a) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (b) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
72
SECTION 10.11. HEADINGS. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 10.12. CONFIDENTIALITY. Each of the Agents, the Issuing
Banks, and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed
(a) to its and its Affiliates' directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this
Agreement, (e) in connection with the exercise of any remedies hereunder or
any suit, action or proceeding relating to this Agreement or any other Loan
Document or the enforcement of rights hereunder or thereunder, (f) subject to
an agreement containing provisions substantially the same as those of this
Section, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement or (ii) any actual or prospective counterparty (or its advisors) to
any Hedging Agreement, (g) with the consent of Borrower or (h) to the extent
such Information (i) becomes publicly available other than as a result of a
breach of this Section by any Person or (ii) becomes available to any Agent,
any Issuing Bank or any Lender on a nonconfidential basis from a source other
than Borrower or any of its Affiliates. For the purposes of this Section,
"INFORMATION" means all information received from Borrower or its Affiliate
relating to Borrower and its Subsidiaries or their business, other than any
such information that is available to any Agent, any Issuing Bank or any
Lender on a nonconfidential basis prior to disclosure by Borrower or any of
its Affiliates; PROVIDED that, in the case of information received from
Borrower after the date of this Agreement, such information is clearly
identified at the time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person
has exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
SECTION 10.13. INTEREST RATE LIMITATION. It is the intention of the
parties hereto to conform strictly to applicable interest, usury and criminal
laws and, anything herein to the contrary notwithstanding, the obligations of
Borrower and the Guarantors to a Lender, any Issuing Bank or any Agent under
this Agreement or any Loan Document shall be subject to the limitation that
payments of interest shall not be required to the extent that receipt thereof
would be contrary to provisions of law applicable to such Lender, such Issuing
Bank or Agent limiting rates of interest which may be charged or collected by
such Lender, such Issuing Bank or Agent. Accordingly, if the transactions
contemplated hereby or thereby would be illegal, unenforceable, usurious or
criminal under laws applicable to a Lender, any Issuing Bank or any Agent
(including the laws of any jurisdiction whose laws may be mandatorily applicable
to such Lender or Agent notwithstanding anything to the contrary in this
Agreement or any other Loan Document then, in that event, notwithstanding
anything to the contrary in this Agreement or any other Loan Document, it is
agreed as follows:
73
(i) the provisions of this Section shall govern and control;
(ii) the aggregate of all consideration which constitutes
interest under applicable law that is contracted for, taken, reserved,
charged or received under this Agreement or any Loan Document or
otherwise in connection with this Agreement or any Loan Document by
such Lender, such Issuing Bank or such Agent shall under no
circumstances exceed the maximum amount of interest allowed by
applicable law (such maximum lawful interest rate, if any, with respect
to each Lender, each Issuing Bank and the Agents herein called the
"HIGHEST LAWFUL RATE"), and any excess shall be cancelled automatically
and if theretofore paid shall be credited to Borrower by such Lender,
such Issuing Bank or such Agent (or, if such consideration shall have
been paid in full, such excess refunded to Borrower);
(iii) all sums paid, or agreed to be paid, to such Lender,
such Issuing Bank or such Agent for the use, forbearance and detention
of the indebtedness of Borrower to such Lender, such Issuing Bank or
such Agent hereunder or under any Loan Document shall, to the extent
permitted by laws applicable to such Lender, such Issuing Bank or such
Agent, as the case may be, be amortized, prorated, allocated and spread
throughout the full term of such indebtedness until payment in full so
that the actual rate of interest is uniform throughout the full term
thereof;
(iv) if at any time the interest provided pursuant to this
Section or any other clause of this Agreement or any other Loan
Document, together with any other fees or compensation payable pursuant
to this Agreement or any other Loan Document and deemed interest under
laws applicable to such Lender, such Issuing Bank or such Agent,
exceeds that amount which would have accrued at the Highest Lawful
Rate, the amount of interest and any such fees or compensation to
accrue to such Lender, such Issuing Bank or such Agent pursuant to this
Agreement or such other Loan Document shall be limited, notwithstanding
anything to the contrary in this Agreement or any other Loan Document,
to that amount which would have accrued at the Highest Lawful Rate, but
any subsequent reductions, as applicable, shall not reduce the interest
to accrue to such Lender, such Issuing Bank or such Agent pursuant to
this Agreement or such other Loan Document below the Highest Lawful
Rate until the total amount of interest accrued pursuant to this
Agreement or such other Loan Document, as the case may be, and such
fees or compensation deemed to be interest equals the amount of
interest which would have accrued to such Lender or Agent if a varying
rate PER ANNUM equal to the interest provided pursuant to any other
relevant Section hereof (other than this Section) or thereof, as
applicable, had at all times been in effect, PLUS the amount of fees
which would have been received but for the effect of this Section; and
(v) with the intent that the rate of interest herein shall at
all times be lawful, and if the receipt of any funds owing hereunder or
under any other agreement related hereto (including any of the other
Loan Documents) by such Lender, such Issuing Bank or such Agent would
cause such Lender to charge Borrower a criminal rate of interest, the
Lenders,
74
the Issuing Banks and the Agents agree that they will not require the
payment or receipt thereof or a portion thereof which would cause a
criminal rate of interest to be charged by such Lender, such Issuing
Bank or such Agent, as applicable, and if received such affected
Lender, such Issuing Bank or Agent will return such funds to Borrower
so that the rate of interest paid by Borrower shall not exceed a
criminal rate of interest from the date this Agreement was entered
into.
SECTION 10.14. COLLATERAL MATTERS; HEDGING AGREEMENTS. The
benefit of the Security Documents and of the provisions of this Agreement
relating to the Collateral shall also extend to and be available to those
Lenders or their Affiliates which are counterparties to the Hedging
Agreements on a pro rata basis in respect of any obligations of Borrower or
any of its Restricted Subsidiaries which arise under any Hedging Agreement
that is in effect at such time as such Person (or its Affiliate) is a Lender,
but only while such Person or its Affiliate is a Lender.
SECTION 10.15. ARRANGER; CANADIAN DOCUMENTATION AGENT; CANADIAN
SYNDICATION AGENT. None of the Persons identified on the facing page or the
signature pages of this Agreement as the "Sole Book Manager and Lead
Arranger" or "Canadian Documentation Agent" or the "Canadian Syndication
Agent" shall have any right, power, obligation, liability, responsibility or
duty under this Agreement or any other Loan Document other than, except in
the case of the Arranger, those applicable to all Lenders as such. Without
limiting the foregoing, none of the Arranger, the Canadian Documentation
Agent or the Canadian Syndication Agent shall have or be deemed to have any
fiduciary relationship with any Lender or Borrower or any of its
Subsidiaries. Borrower and each Lender acknowledges that it has not relied,
and will not rely, on any of the Arranger, the Canadian Documentation Agent
or Canadian Syndication Agent in deciding to enter into this Agreement or in
taking or not taking any action hereunder or under the Loan Documents.
SECTION 10.16. INTERCREDITOR AGREEMENT; SECURITY DOCUMENTS. For
so long as the Intercreditor Agreement shall be in effect, the terms and
conditions of this Agreement and the other Loan Documents are subject to the
terms of the Intercreditor Agreement. In the event of any inconsistency
between this Agreement or any other Loan Document and the terms of the
Intercreditor Agreement, the Intercreditor Agreement shall control. In the
event of any inconsistency between this Agreement and the terms of any other
Loan Document, this Agreement shall control.
SECTION 10.17. STATUS AS SENIOR INDEBTEDNESS. The Loans are
"Designated Senior Indebtedness" under the Subordinated Indebtedness
Documents governing the Subordinated Indebtedness-8-3/4% Senior Subordinated
Notes.
SECTION 10.18. NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT AND
THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.
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[SIGNATURES BEGIN ON FOLLOWING PAGE]
76
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
CANADIAN FOREST OIL LTD.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Secretary
[SIGNATURE PAGE TO CANADIAN CREDIT AGREEMENT]
S - 1
THE CHASE MANHATTAN BANK, as
Global Administrative Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
[SIGNATURE PAGE TO CANADIAN CREDIT AGREEMENT]
S - 2
THE CHASE MANHATTAN BANK OF
CANADA, as Canadian Administrative Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President Vice President
[SIGNATURE PAGE TO CANADIAN CREDIT AGREEMENT]
S - ▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇ BRANCH, as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Authorized Authorized
Representative Representative
[SIGNATURE PAGE TO CANADIAN CREDIT AGREEMENT]
S - 4
BANK OF MONTREAL, as Canadian
Syndication Agent and as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director, Corporate Banking
[SIGNATURE PAGE TO CANADIAN CREDIT AGREEMENT]
S - 5
THE TORONTO-DOMINION BANK, as
Canadian Documentation Agent and as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Manager
Credit Compliance & Administration
Corporate Banking
[SIGNATURE PAGE TO CANADIAN CREDIT AGREEMENT]
▇ - ▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, as a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
[SIGNATURE PAGE TO CANADIAN CREDIT AGREEMENT]
S - 7
Exhibit A-1 - Page 1
