Second Amending Agreement Dated November 29, 2002



 



Exhibit 10.5(b)



SECOND AMENDING AGREEMENT TO COMMITMENT LETTER



between



COMPUTERSHARE TRUST COMPANY OF CANADA, as Trustee of

Paramount Energy Trust

(as Borrower)



and



PARAMOUNT ENERGY OPERATING CORP., as Trustee of

Paramount Operating Trust

(the “Guarantor”)



and



BANK OF MONTREAL,

CANADIAN IMPERIAL BANK OF COMMERCE and

THE BANK OF NOVA SCOTIA

(as Lenders)



and



BANK OF MONTREAL

(as Agent for the Lenders)



Dated as of November 29, 2002



 






 


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        THIS SECOND AMENDING AGREEMENT TO COMMITMENT LETTER is dated and effective
as of the 29th day of November, 2002.


AMONG:




	 	 	 	COMPUTERSHARE TRUST COMPANY OF CANADA as Trustee of Paramount
Energy Trust (the “Borrower”)



AND:




	 	 	 	PARAMOUNT ENERGY OPERATING CORP., as Trustee of Paramount Operating
Trust (the “Guarantor”)



AND:




	 	 	 	BANK OF MONTREAL, CANADIAN IMPERIAL BANK OF COMMERCE and THE BANK
OF NOVA SCOTIA (collectively, in their capacities as Lead Arrangers
and Lenders called the “Lenders”)



AND:




	 	 	 	BANK OF MONTREAL in its capacity as agent for the Lenders (the
“Agent”)
	 
	 	 	 	WHEREAS:



1.                  Bank of Montreal, Canadian Imperial Bank of Commerce and The Bank of Nova
Scotia (each in its capacity as a Lender), Bank of Montreal (in its capacity as
Agent and as a Lead Arranger) and the Borrower and the Guarantor are parties to
a letter agreement dated as of August 15, 2002, as amended by a First Amending
Agreement dated as of September 30, 2002 (as so amended, the “Commitment
Letter”); and


2.                  The Borrower and Guarantor wish to obtain the consent and agreement of the
Lenders to amend the Commitment Letter.


                      NOW THEREFORE, in consideration of the premises, the covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by each of the parties hereto, the
parties agree as follows:


1.                  Definitions



                      Capitalized terms used herein, including the recitals hereto, shall have
the meanings ascribed thereto in the Commitment Letter, unless otherwise
defined herein.


2.                  Amendments to Commitment Letter



                      The Commitment Letter is amended in the section entitled “Conditions Applicable
to Commitments” on page 3 thereof by deleting the reference in the final
paragraph of that section to “November 29, 2002” and inserting “January 31,
2003”.







 


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3.                     Acknowledgement



                        Each of the Borrower and the Guarantor hereby acknowledge that:



	(a)	 	CIBC World Markets Inc. (“CIBCWM”) and BMO Nesbitt Burns Inc. (“BMONB”)
(collectively, the “Advisors”) are respectively, directly or indirectly,
subsidiaries of Canadian Imperial Bank of Commerce (“CIBC”) and BMO (the
Agent, BMO, CIBC and the Advisors collectively called the “Related
Parties”), and the Lenders are the lenders to PRL pursuant to a credit
agreement between PRL and the Lenders dated as of June 28, 2002 (as
amended from time to time, the “PRL Credit Agreement”) and BMONB and
CIBCWM are the “Dealer Managers” in respect of the Rights Issue. In such
capacities the Related Parties have provided, and are expected to continue
to provide, advice and services to the Borrower, the Guarantor, PRL and
the Borrowing Base Subsidiaries (as defined in the PRL Credit Agreement)
in relation to the PRL Credit Agreement (the “PRL Matters”), and in
relation to the Rights Offering, the Distribution, the Conveyances, the
Rights Exercise Agreement, this Commitment Letter and various related
matters (collectively the “Trust Matters”);
	 
	(b)	 	BMO and CIBC are lenders to POG, Treherne Resources Ltd., 409790 Alberta
Ltd. and Clayton Riddell (collectively, the “POG Parties”) in respect of
loan facilities which may be utilized in respect of the Rights Issue and
which are the subject matter, in part, of the Rights Exercise Agreement
(collectively the “POG Matters”);
	 
	(c)	 	ScotiaCapital Inc. is, directly or indirectly, a subsidiary of BNS
(together, the “BNS Parties”) and has provided and may in the future
provide advice as advisor to the “Special Committee” of the board of
directors of PRL which was formed, inter alia, to consider the Rights
Issue, the Distribution and the Conveyances and to provide assessments as
to the fairness of such transactions to PRL and the Borrowing Base
Subsidiaries;
	 
	(d)	 	conflicts of interest in respect of the various different capacities of
the Related Parties and BNS Parties and their relationships with the
Borrower, the Guarantor, PRL, the Borrowing Base Subsidiaries and the POG
Parties may have arisen and may arise up to and including the end of the
“Operative Period”. For the purposes of this Amending Agreement, the
“Operative Period” is any time prior to the completion of the Conversion
Event in full;
	 
	(e)	 	there has been in the past, and may be up to the end of the Operative
Period, a sharing among the Related Parties, and by the Advisors with the
BNS Parties, of confidential information of the Borrower and the Guarantor
in respect of PRL Matters and Trust Matters and a sharing of confidential
information of the Borrower and the Guarantor in respect of POG Matters
among the Related Parties; and
	 
	(f)	 	the involvement and actions, up to the end of the Operative Period, of
the Related Parties and BNS Parties in such capacities, including the
retention of the Advisors, has been and will continue to be in the best
interests of the Borrower and the Guarantor.



The Borrower and the Guarantor further expressly:



	(A)	 	consent to and waive any right to take issue with any past, present or
(up to the end of the Operative Period) future actual or apparent
conflicts of interest arising from any of the circumstances referenced
above;









 


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	(B)	 	consent to and waive any right to take issue with any past, present or
(up to the end of the Operative Period) future sharing of confidential
information of the Borrower and the Guarantor among the Related Parties in
respect of the PRL Matters, Trust Matters and POG Matters and by the
Advisors with the BNS Parties in respect of PRL Matters and Trust Matters;
	 
	(C)	 	undertake not to retract or withdraw this waiver and consent at any time
in the future; and
	 
	(D)	 	release the Related Parties and BNS Parties from any rights, claims,
actions or causes of action that the Borrower or the Guarantor may have
against any of the Related Parties and BNS Parties in respect of any of
the matters referred to in paragraphs (d) and (e) above.



4.                        Amendments to Summary of Terms and Conditions



The definition of “Conversion Event” in Schedule “A” to the Summary of Terms
and Conditions attached to the Commitment Letter is amended by deleting
subsections (f) and (g) thereof and replacing them with the following:



	"(f)	 	the completion of the purchase and sale of the Assets by POT such that
POT has become the beneficial owner thereof and PRL has received cash net
proceeds therefrom of not less than




	 	(i)	 	Cdn. $220,000,000 in the case of the exercise of 100% of all
rights exercisable by Unitholders of the Borrower pursuant to the
Rights Issue;
	 
	 	(ii)	 	Cdn. $163,000,000 in the case of the exercise of 75% of all
such rights;
	 
	 	(iii)	 	Cdn. $107,000,000 in the case of the exercise of 50% of such
rights; or
	 
	 	(iv)	 	in the case of the exercise of any other percentages between
such percentages, an amount as determined by the Lenders, acting
reasonably, using comparable methodology as used by them in
determining the foregoing amounts;
	 
	 	 	 	plus, in each case, interest on the applicable purchase price pursuant to
Section 2.05 of each of the Take-Up Agreement and Initial Assets Purchase
Agreement (as defined in the PRL Credit Agreement) and less, in each
case, accounting adjustments in respect of accumulated revenues
attributable to the Assets (to the extent in favour of the POT) required
pursuant to Article 14 of each of the Take-Up Agreement and Initial
Assets Purchase Agreement;




	(g)	 	the repayment in full in cash by the Borrower of the PET Note;”




5.                        Representations and Warranties



Each of the Borrower and the Guarantor hereby represents and warrants to and in
favour of the Agent and the Lenders that this Amending Agreement has been duly
authorized, executed and delivered by it and constitutes a legal, valid and
binding obligation of it, enforceable in accordance with its terms.


6.                        Miscellaneous




	(a)	 	This Amending Agreement shall, notwithstanding its actual date of
execution, be effective as of November 29, 2002.








 


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	(b)	 	Save and except as amended aforesaid, the Commitment Letter remains in
full force and effect and unamended and time remains of the essence
thereunder, as amended hereby.
	 
	(c)	 	For the purposes of the Commitment Letter, this Amending Agreement shall
be read together with the Commitment Letter as one instrument.
	 
	(d)	 	This Amending Agreement shall be governed by and construed in accordance
with the laws of the Province of Alberta.
	 
	(e)	 	This Amending Agreement may be executed in any number of counterparts and
by different parties and separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same instrument.



IN WITNESS WHEREOF the parties hereto have caused this Amending Agreement to be
duly executed as of the date referenced above.



	 	 	 	 	 	 	 
	BANK OF MONTREAL	 	BANK OF NOVA SCOTIA
	
	
	
	

	 	 	 	 	 	 	 
	
	
	
	

	Per:	 	 	 	Per:	 	 
	 	 	


	 	 	 	

	 	 	
Name:        Randall Johnson

Title:          Managing Director
	 	 	 	Name:        Richard Lee

Title:          Managing Director
	
	
	
	

	 	 	 	 	 	 	 
	
	
	
	

	 	 	 	 	 	 	 
	
	
	
	

	CANADIAN IMPERIAL BANK OF COMMERCE	 	 	 	 
	
	
	
	

	 	 	 	 	 	 	 
	
	
	
	

	Per:	 	 	 	 	 	 
	 	 	

	 	 	 	 
	 	 	
Name:        Glenn Kalyniuk

Title:          Director, Commercial Credit	 	 	 	 
	
	
	
	

	 	 	 	 	 	 	 
	COMPUTERSHARE TRUST COMPANY OF

CANADA, as Trustee of Paramount

Energy Trust, by its agent Paramount

Energy Operating Corp.	 	PARAMOUNT ENERGY OPERATING CORP., as

Trustee of Paramount Operating Trust,

and in its own right
	
	
	
	

	 	 	 	 	 	 	 
	
	
	
	

	By:	 	 	 	By:	 	 
	 	 	


	 	 	 	

	 	 	
Name:
	 	 	 	Name:
	
	
	
	

	 	 	
Title:
	 	 	 	Title: