Common use of Hedging Arrangements Clause in Contracts

Hedging Arrangements. (a) No Obligor shall enter into Hedging Instruments other than Permitted Hedging Instruments. (b) The Borrower shall enter into and thereafter maintain in full force and effect, from time to time, one or more interest rate Permitted Hedging Instruments: (i) no later than 45 days following the Closing Date, with respect to no less than 50%, but no more than 105% (calculated on a weighted average basis) of the projected aggregate outstanding balance of the Senior Debt projected to be outstanding (as determined by the Borrower in accordance with the Base Case Forecast) until the latest payment date occurring at the expiration of the 20-year notional amortization period; and (ii) no later than 45 days following the Closing Date, with respect to no less than 75%, but no more than 105% (calculated on a weighted average basis) of the projected aggregate outstanding balance of the Senior Debt projected to be outstanding (as determined by the Borrower in accordance with the Base Case Forecast) until the Maturity Date; provided that for purposes of calculating such percentage in the foregoing sub-clauses (i) and (ii) above, (w) the principal balance of the Working Capital Facility and/or Working Capital Debt shall be excluded, (x) any obligations incurred under the Permitted Senior Debt Hedging Instruments shall be excluded, and (y) any such Senior Debt which bears a fixed interest rate shall be deemed subject to a Permitted Hedging Instrument. (c) If, due to a mandatory prepayment made in accordance with Section 3.4 (Mandatory Prepayments), a voluntary prepayment made in accordance with Section 3.5 (Voluntary Prepayments) or otherwise, the aggregate notional amount of the Permitted Hedging Instruments (which, for the avoidance of doubt, shall only include Permitted Hedging Instruments that are Interest Rate Hedging Instruments) on any Quarterly Payment Date is greater than 105% (or, if 105% hedging is not permitted by applicable law, 100%) (in each case, calculated on a weighted average basis) of the projected aggregate outstanding balance of the Senior Debt, within 45 days, the Borrower shall reduce the amount that is hedged under the Permitted Hedging Instruments (in the proportion allocated to each Permitted Hedging Instrument as may be determined by the Borrower as long as the Borrower has allocated the reduction pro rata among each Permitted Hedging Instrument, after taking into account any back-to-back or offsetting arrangements related thereto) such that the aggregate notional amount of the Permitted Hedging Instruments is not more than 105% (or, if 105% hedging is not permitted by applicable law, 100%) (in each case, calculated on a weighted average basis) of the projected aggregate outstanding balance of the Senior Debt on such Quarterly Payment Date (any such amount of the Permitted Hedging Instruments that is required to be so reduced, a “Hedging Excess Amount”).

Hedging Arrangements. The Debtor shall (a) No Obligor shall enter into at or prior to the time of any Receivables Delivery, provide to the Note Insurer, and the Collateral Agent an Officer’s Certificate stating that the Servicer has Hedging Instruments other than Permitted Hedging Instruments. Arrangements in place satisfying the conditions of this Section 5.3 as set forth below, and (b) in connection with any Servicer’s Certificate provided hereunder and to the extent not previously provided, provide an executed copy of all existing Hedging Arrangements, and with respect to which the Debtor shall be the beneficiary, in respect of an aggregate notional amount equal to the Required Notional Amount, and if such Hedging Arrangement is a swap, not greater than the Net Investment related to such swap. On each Delivery Date, the notional balance of the Hedging Arrangement shall be in an amount equal to the Required Notional Amount and, in the case of a swap, not exceeding the Net Receivables Balance (including any Receivables to be added in connection with such Funding). The Borrower form, structure and counterparty to each Hedging Arrangement shall enter into be acceptable to the Note Insurer (and thereafter maintain which, unless such Hedging Agreement is a cap agreement, shall be submitted to the Note Insurer for its prior review) and must be in full force and effecteffect at all times during which the Net Receivables Balance is greater than zero (however such required amount may be reduced for the period of time between the pricing and the funding of a structured financing utilizing receivables released to the Debtor pursuant to Section 2.16 hereof by the Aggregate Outstanding Balance of such Receivables). Any counterparty to a Hedging Arrangement shall have a long-term unsecured debt rating from Moody’s and S&P of at least “A2” and “A,” respectively. With respect to any Hedging Arrangement, from time to time, one or more interest rate Permitted Hedging Instruments: (i) no later than 45 days following on and after the Closing Dateoccurrence of a Termination and Amortization Event or Potential Termination and Amortization Event, the Note Insurer shall have the right, in its sole discretion, to direct the Debtor’s actions with respect to no less than 50%, but no more than 105% (calculated on a weighted average basis) of the projected aggregate outstanding balance of the Senior Debt projected to be outstanding (as determined by the Borrower in accordance with the Base Case Forecast) until the latest payment date occurring at the expiration of the 20-year notional amortization period; and (ii) no later than 45 days following the Closing Date, with respect to no less than 75%, but no more than 105% (calculated on a weighted average basis) of the projected aggregate outstanding balance of the Senior Debt projected to be outstanding (as determined by the Borrower in accordance with the Base Case Forecast) until the Maturity Date; provided that for purposes of calculating such percentage in the foregoing sub-clauses (i) thereto and (ii) above, (w) the principal balance related amortization schedule shall be approved by the Note Insurer. Any Hedging Arrangement relating to a Receivables Delivery which is an interest rate cap agreement shall consist of the Working Capital Facility and/or Working Capital Debt shall be excludedfollowing requirements (each interest rate cap agreement meeting the following requirements, an “Interest Rate Cap” and collectively, the “Interest Rate Caps”): (x) any obligations incurred under the Permitted Senior Debt Hedging Instruments shall be excluded, and (yi) any such Senior Debt which bears a fixed interest rate counterparty thereto not rated at least “A” by S&P or “A2” by Moody’s shall be deemed subject approved in writing by the Note Insurer, Moody’s and S&P; (ii) each Interest Rate Cap shall be documented in form and substance reasonably acceptable to the Note Insurer; (iii) the strike rate of any Interest Rate Cap shall be set at a Permitted Hedging Instrument. level that will not result in a Net Spread Deficiency; (civ) If, due all amounts payable by the counterparty thereunder shall be required to a mandatory prepayment made in accordance be paid by such counterparty directly to the Collection Account; (v) the notional amount thereunder shall amortize according to the scheduled amortization of the Receivables funded on the related Delivery Date assuming zero prepayments and zero defaults with Section 3.4 respect to such Receivables; (Mandatory Prepayments), a voluntary prepayment made in accordance with Section 3.5 (Voluntary Prepaymentsvi) or otherwise, the aggregate notional amount of such Hedging Arrangement together with all other Hedging Arrangements then in effect must equal the Permitted Required Notional Amount; (vii) such Hedging Instruments (which, Arrangement must be in effect for the avoidance of doubt, shall only include Permitted Hedging Instruments that are Interest Rate Hedging Instruments) on any Quarterly Payment Date is greater than 105% (or, if 105% hedging is not permitted by applicable law, 100%) (in each case, calculated on a weighted average basis) of the projected aggregate outstanding balance of the Senior Debt, within 45 days, the Borrower shall reduce the amount that is hedged under the Permitted Hedging Instruments (in the proportion allocated to each Permitted Hedging Instrument as may be determined by the Borrower at least as long as the Borrower has allocated latest maturing Receivables securing the reduction pro rata among each Permitted Hedging Instrument, after taking into account any back-to-back or offsetting arrangements related theretoNet Investment; and (viii) such that the aggregate notional amount of Effective Date shall be no later than the Permitted Hedging Instruments is not more than 105% (or, if 105% hedging is not permitted by applicable law, 100%) (in each case, calculated on a weighted average basis) of the projected aggregate outstanding balance of the Senior Debt on such Quarterly Payment Date (any such amount of the Permitted Hedging Instruments that is required to be so reduced, a “Hedging Excess Amount”)Delivery Date.

Hedging Arrangements. (1) The Canadian Borrower may from time to time enter into Hedging Arrangements with the Lender pursuant to which the Lender will, in the sole discretion of the Lender, provide to the Borrower, at rates determined by the Lender, foreign exchange rate protection in respect of such foreign exchange rate transactions in the ordinary course of the Borrower’s business, subject to the terms of this Agreement and the applicable Credit Documents relating to such Hedging Arrangement. The Borrower agrees that no Hedging Arrangement will be entered into for speculative purposes. (2) The Aggregate Deemed Hedge Exposure under all outstanding Hedging Arrangements shall not at any time exceed $500,000 and the aggregate face amount of all outstanding Hedging Agreements shall not exceed at any time $5,000,000. (3) With respect to foreign exchange rate agreements, the term of such agreement shall expire not later than the earlier of (a) No Obligor shall enter into one (1) year from the date such Hedging Instruments other than Permitted Hedging InstrumentsArrangement is executed by the Borrower and (b) the Maturity Date. (b4) The Canadian Borrower shall enter into agrees to complete such Credit Documents and thereafter maintain to pay such fees as the Lender may require in full force and effect, from time to time, one or more interest rate Permitted respect of each such Hedging Instruments:Arrangement. (i5) no later than 45 days following The Security documents shall secure all obligations owing under or in respect of each Hedging Arrangement entered into between the Closing DateBorrower and the Lender. (6) If an Event of Default has occurred and is continuing, with respect the Canadian Borrower shall, upon request by the Lender, immediately pay to no less than 50%, but no more than 105the Lender an amount equal to 10% (calculated on a weighted average basisor such other percentage as the Lender, acting reasonably, shall determine appropriate) of the projected aggregate Aggregate Actual Hedge Exposure for all outstanding balance Hedging Agreements in respect of which the Lender has not already been fully reimbursed, and pay all other amounts owing to the Lender under the terms of all outstanding Hedging Arrangements, and the Borrower agrees that the Lender would not have an adequate remedy at law for failure of the Senior Debt projected Borrower to be honour any such demand and that the Lender shall have the right to require the Borrower to specifically perform such undertaking without regard to the date upon which the Lender is required under any outstanding (as determined Hedging Arrangements to purchase any currency on behalf of the Borrower, the date upon which the Borrower is obligated to reimburse the Lender for currency purchased by the Borrower in accordance with Lender on its behalf or the Base Case Forecast) until the latest payment date occurring at the expiration of the 20-year notional amortization period; and (ii) no later than 45 days following the Closing Date, with respect to no less than 75%, but no more than 105% (calculated on a weighted average basis) of the projected aggregate outstanding balance of the Senior Debt projected to be outstanding (as determined by upon which the Borrower in accordance with is obligated to pay to the Base Case Forecast) until the Maturity Date; provided that for purposes of calculating Lender any other amounts owing to such percentage in the foregoing sub-clauses (i) and (ii) above, (w) the principal balance of the Working Capital Facility and/or Working Capital Debt shall be excluded, (x) any obligations incurred Lender under the Permitted Senior Debt terms of any Hedging Instruments shall be excluded, and (y) any such Senior Debt which bears a fixed interest rate shall be deemed subject to a Permitted Hedging InstrumentArrangements. (c7) If, due The Borrowers will not enter into arrangements similar to a mandatory prepayment made in accordance the Hedging Arrangements with Section 3.4 (Mandatory Prepayments), a voluntary prepayment made in accordance with Section 3.5 (Voluntary Prepayments) or otherwise, any Person other than the aggregate notional amount of Lender. Notwithstanding the Permitted Hedging Instruments (which, foregoing and for the avoidance of doubt, shall only include Permitted Hedging Instruments that are Interest Rate Hedging Instruments) on any Quarterly Payment Date is greater than 105% (or, if 105% hedging is not permitted by applicable law, 100%) (in each case, calculated on a weighted average basis) of the projected aggregate outstanding balance of the Senior Debt, within 45 dayscertainty, the Borrower shall reduce may, on an unsecured basis, enter into commodity Hedging Arrangements in respect of natural gas with persons other than the amount that is hedged under the Permitted Hedging Instruments (in the proportion allocated to each Permitted Hedging Instrument as may be determined by the Borrower as long as the Borrower has allocated the reduction pro rata among each Permitted Hedging Instrument, after taking into account any back-to-back or offsetting arrangements related thereto) such that the aggregate notional amount of the Permitted Hedging Instruments is not more than 105% (or, if 105% hedging is not permitted by applicable law, 100%) (in each case, calculated on a weighted average basis) of the projected aggregate outstanding balance of the Senior Debt on such Quarterly Payment Date (any such amount of the Permitted Hedging Instruments that is required to be so reduced, a “Hedging Excess Amount”)Lender.

Hedging Arrangements. (a) No Each Obligor will ensure, and each Hedging Bank agrees, that: (i) any Hedging Agreement to which it is at any time party will be in the form of the ISDA 1992 Master Agreement or the ISDA 2002 Master Agreement, as the case may be, and will, in the case of the ISDA 1992 Master Agreement only2, provide for Second Method (that is, two way payments) in the event of a termination of any hedging transaction entered into under such Hedging Agreement whether upon a Termination Event or an Event of Default (as defined therein); (ii) if any hedging transaction under any Hedging Agreement to which any Obligor is a party is terminated and a settlement amount or other amount falls due from a Hedging Bank to any Obligor then, if any of the Transaction Security has become enforceable, that amount shall enter into be paid by such Hedging Instruments other Bank to the Security Agent and treated as proceeds of enforcement of the Transaction Security for application in the order prescribed by Clause 29.12 (Application of Proceeds by Security Agent); (iii) each Hedging Agreement (and any amendment to any Hedging Agreement) shall be delivered to the Agent as soon as reasonably practicable after it has been entered into; (iv) the Hedging Agreements to which they are party will not (unless the Majority Lenders have otherwise consented in writing) be amended, varied or supplemented in a manner which would result in: (A) any payment under any such Hedging Agreement being required to be made by an Obligor earlier than Permitted the date originally provided for in the relevant Hedging InstrumentsAgreement; or (B) any Obligor becoming liable to make an additional payment (or increase an existing payment) under any such Hedging Agreement which liability does not arise from the original provisions of that Hedging Agreement, if, in either case, that would be inconsistent with the requirements of this Clause 22.9. (b) The Borrower shall enter into Each Hedging Bank undertakes that it will not (unless the Majority Creditors have otherwise consented in writing) demand (other than as may be necessary in order to exercise any right to terminate or close out any hedging transaction as provided in and thereafter maintain permitted under (c) below) payment, prepayment or repayment of, or any distribution in full force and effectrespect of, from time or on account of, any of the obligations of the relevant Obligor to time, one it under any Hedging Agreement to which it is party in cash or more interest rate Permitted Hedging Instrumentsin kind except: (i) no later than 45 days following for payments arising under the Closing Date, with respect terms of any Hedging Agreement to no less than 50%, but no more than 105% which it is party (calculated on a weighted average basiswithout regard to any amendments made after the date of such Hedging Agreement prohibited by subparagraph (a)(iv) of the projected aggregate outstanding balance of the Senior Debt projected to be outstanding (as determined by the Borrower in accordance with the Base Case Forecast) until the latest payment date occurring at the expiration of the 20-year notional amortization periodthis Clause 22.9); andand/or (ii) no later than 45 days following for the Closing Date, with respect to no less than 75%, but no more than 105% (calculated on a weighted average basis) proceeds of enforcement of the projected aggregate outstanding balance Security Documents received and applied in the order permitted by Clause 29.12 (Application of the Senior Debt projected Proceeds by Security Agent); and/or (iii) payments due under any Hedging Agreement to be outstanding (as determined which it is a party which has been terminated or closed-out by the Borrower in accordance with relevant Obligor or by the Base Case Forecastrelevant Hedging Bank (and if by the relevant Hedging Bank such termination or close out is permitted under paragraph (c) until the Maturity Date; provided that for purposes of calculating such percentage in the foregoing sub-clauses (i) and (ii) above, (w) the principal balance of the Working Capital Facility and/or Working Capital Debt shall be excluded, (x) any obligations incurred under the Permitted Senior Debt Hedging Instruments shall be excluded, and (y) any such Senior Debt which bears a fixed interest rate shall be deemed subject to a Permitted Hedging Instrumentbelow). (c) If, due Each Hedging Bank undertakes that it will not (unless the Majority Creditors have otherwise consented in writing) exercise any right to terminate or close out any hedging transaction under any Hedging Agreements to which it is party prior to its stated maturity (whether by reason of the Obligor counterparty becoming a mandatory prepayment made in accordance with Section 3.4 Defaulting Party or Affected Party thereunder (Mandatory Prepayments), a voluntary prepayment made in accordance with Section 3.5 (Voluntary Prepaymentseach as defined therein) or otherwise) unless: (i) such Obligor has defaulted on a payment due under such Hedging Agreement, after allowing for any required notice and any applicable days of grace, and such default continues for more than 14 days after notice of such default being given to the aggregate notional amount Agent; or (ii) an Illegality, a Tax Event or a Tax Event upon Merger (each as defined in the ISDA 1992 Master Agreement or the ISDA 2002 Master Agreement, as the case may be) has occurred; or (iii) the Agent has served a notice under Clause 23.18 (Acceleration); (iv) an Event of Default under Clauses 23.6 (Insolvency) or 23.7 (Insolvency proceedings) of this Agreement (as in force at the date of this Agreement) has occurred; or (v) all Loans have been prepaid or repaid in full and the Lenders are no longer under any obligation to participate in further Loans; or (vi) there is a prepayment pursuant to Clause 8 (Prepayment and cancellation); provided that the Hedging Bank may only exercise its right to terminate or close out that element of the Permitted hedging transaction (if any) which corresponds to the amount so prepaid; or (vii) the parties to the Hedging Instruments Agreement have voluntarily agreed to close out any hedging transaction in that Hedging Agreement. (whichd) Each Hedging Bank will, for promptly after the avoidance of doubtAgent has served a notice under Clause 23.18 (Acceleration), shall only include Permitted exercise any and all rights it may have to terminate the hedging transactions under each Hedging Instruments that are Interest Rate Hedging Instruments) Agreement to which it is party, unless the Agent (acting on any Quarterly Payment Date is greater than 105% (or, if 105% hedging is not permitted by applicable law, 100%) (in each case, calculated on a weighted average basis) the instructions of the projected aggregate outstanding balance Majority Creditors) otherwise agrees or requires. (e) Each Hedging Bank agrees that (unless the Majority Creditors have otherwise agreed in writing) it will not enforce any Transaction Security or require any other person to enforce the same in respect of amounts owing under any Hedging Agreement to which it is party. (f) The provisions of this Clause 22.9 shall cease to apply after the Senior Debt, within 45 days, Loans have been prepaid or repaid in full and the Borrower shall reduce the amount that is hedged Lenders are under the Permitted Hedging Instruments (no obligation to participate in the proportion allocated to each Permitted Hedging Instrument as may be determined by the Borrower as long as the Borrower has allocated the reduction pro rata among each Permitted Hedging Instrument, after taking into account any back-to-back or offsetting arrangements related thereto) such that the aggregate notional amount of the Permitted Hedging Instruments is not more than 105% (or, if 105% hedging is not permitted by applicable law, 100%) (in each case, calculated on a weighted average basis) of the projected aggregate outstanding balance of the Senior Debt on such Quarterly Payment Date (any such amount of the Permitted Hedging Instruments that is required to be so reduced, a “Hedging Excess Amount”)further Loans.

Hedging Arrangements. (a) No Each Obligor will ensure, and each Hedging Bank agrees, that prior to the Security Release Date: (i) any Hedging Agreement to which it is at any time party will be in the form of the ISDA 1992 Master Agreement or the ISDA 2002 Master Agreement, as the case may be, and will provide for “Second Method” (that is, two way payments) in the event of a termination of any hedging transaction entered into under such Hedging Agreement whether upon a Termination Event or an Event of Default (as defined therein); (ii) if any hedging transaction under any Hedging Agreement to which any Obligor is a party is terminated prior to the Security Release Date and a settlement amount or other amount falls due from a Hedging Bank to any Obligor then, if any of the Transaction Security has become enforceable, that amount shall enter into be paid by such Hedging Instruments other Bank to the Security Agent and treated as proceeds of enforcement of the Transaction Security for application in the order prescribed by Clause 30.10 (Application of Proceeds by Security Agent); (iii) each Hedging Agreement (and any amendment to any Hedging Agreement) shall be delivered to the Agent as soon as reasonably practicable after it has been entered into; (iv) the Hedging Agreements to which they are party will not (unless the Majority Lenders have otherwise consented in writing) be amended, varied or supplemented in a manner which would result in: (A) any payment under any such Hedging Agreement being required to be made by an Obligor earlier than Permitted the date originally provided for in the relevant Hedging InstrumentsAgreement; or (B) any Obligor becoming liable to make an additional payment (or increase an existing payment) under any such Hedging Agreement which liability does not arise from the original provisions of that Hedging Agreement, if, in either case, that would be inconsistent with the requirements of this Clause 23.9. (b) The Borrower shall enter into Each Hedging Bank undertakes that it will not (unless the Majority Creditors have otherwise consented in writing) demand (other than as may be necessary in order to exercise any right to terminate or close out any hedging transaction as provided in and thereafter maintain permitted under paragraph (c) below) payment, prepayment or repayment of, or any distribution in full force and effectrespect of, from time or on account of, any of the obligations of the relevant Obligor to time, one it under any Hedging Agreement to which it is party in cash or more interest rate Permitted Hedging Instrumentsin kind except: (i) no later than 45 days following for scheduled payments arising under the Closing Date, with respect original terms of any Hedging Agreement to no less than 50%, but no more than 105% which it is party (calculated on a weighted average basiswithout regard to any amendments made after the date of such Hedging Agreement prohibited by paragraph (a)(iv) of the projected aggregate outstanding balance of the Senior Debt projected to be outstanding (as determined by the Borrower in accordance with the Base Case Forecast) until the latest payment date occurring at the expiration of the 20-year notional amortization periodthis Clause 23.9); andand/or (ii) no later than 45 days following for the Closing Date, with respect to no less than 75%, but no more than 105% (calculated on a weighted average basis) proceeds of enforcement of the projected aggregate outstanding balance Security Documents received and applied in the order permitted by Clause 30.10 (Application of the Senior Debt projected Proceeds by Security Agent); and/or (iii) payments due under any Hedging Agreement to be outstanding (as determined which it is a party which has been terminated or closed-out by the Borrower in accordance with the Base Case Forecast) until the Maturity Date; provided that for purposes of calculating such percentage in the foregoing sub-clauses (i) and (ii) above, (w) the principal balance of the Working Capital Facility and/or Working Capital Debt shall be excluded, (x) any obligations incurred under the Permitted Senior Debt Hedging Instruments shall be excluded, and (y) any such Senior Debt which bears a fixed interest rate shall be deemed subject to a Permitted Hedging Instrumentrelevant Obligor. (c) If, due Each Hedging Bank undertakes that it will not (unless the Majority Creditors have otherwise consented in writing) exercise any right to terminate or close out any hedging transaction under any Hedging Agreements to which it is party prior to its stated maturity (whether by reason of the Obligor counterparty becoming a mandatory prepayment made in accordance with Section 3.4 Defaulting Party or Affected Party thereunder (Mandatory Prepayments), a voluntary prepayment made in accordance with Section 3.5 (Voluntary Prepaymentseach as defined therein) or otherwise) unless: (i) such Obligor has defaulted on a payment due under such Hedging Agreement, after allowing for any required notice and any applicable days of grace, and such default continues for more than 21 days after notice of such default being given to the aggregate notional amount Agent; or (ii) an Illegality or a Tax Event (each as defined in the ISDA 1992 Master Agreement or the ISDA Master Agreement 2002, as the case may be) has occurred; or (iii) the Agent has served a notice under Clause 24.18 (Acceleration); or (iv) all Loans have been prepaid or repaid in full and the Lenders are no longer under any obligation to participate in further Loans; or (v) there is a prepayment of Facility A pursuant to Clause 9 (Prepayment, Cancellation and Increase); provided that the Hedging Bank may only exercise its right to terminate or close out that element of the Permitted hedging transaction (if any) which corresponds to the amount so prepaid; or (vi) the parties to the Hedging Instruments Agreement have voluntarily agreed to close out any hedging transaction in that Hedging Agreement. (whichd) Each Hedging Bank will, for promptly after the avoidance of doubtAgent has served a notice under Clause 24.18 (Acceleration), shall only include Permitted exercise any and all rights it may have to terminate the hedging transactions under each Hedging Instruments that are Interest Rate Hedging Instruments) Agreement to which it is party, unless the Agent (acting on any Quarterly Payment Date is greater than 105% (or, if 105% hedging is not permitted by applicable law, 100%) (in each case, calculated on a weighted average basis) the instructions of the projected aggregate outstanding balance Majority Creditors) otherwise agrees or requires. (e) Each Hedging Bank agrees that (unless the Majority Creditors have otherwise agreed in writing) it will not enforce any Transaction Security or require any other person to enforce the same in respect of amounts owing under any Hedging Agreement to which it is party. (f) The provisions of this Clause 23.9 shall cease to apply after the Senior Debt, within 45 days, Loans have been prepaid or repaid in full and the Borrower shall reduce the amount that is hedged Lenders are under the Permitted Hedging Instruments (no obligation to participate in the proportion allocated to each Permitted Hedging Instrument as may be determined by the Borrower as long as the Borrower has allocated the reduction pro rata among each Permitted Hedging Instrument, after taking into account any back-to-back or offsetting arrangements related thereto) such that the aggregate notional amount of the Permitted Hedging Instruments is not more than 105% (or, if 105% hedging is not permitted by applicable law, 100%) (in each case, calculated on a weighted average basis) of the projected aggregate outstanding balance of the Senior Debt on such Quarterly Payment Date (any such amount of the Permitted Hedging Instruments that is required to be so reduced, a “Hedging Excess Amount”)further Loans.

Hedging Arrangements. (a) No Obligor shall enter into Hedging Instruments other than Permitted Hedging Instruments. (b) The Borrower shall enter into and thereafter maintain in full force and effect, from time to time, one or more interest rate Permitted Hedging Instruments: (i) no later than 45 days following the Upsize Closing Date, with respect to no less than 50%, but no more than 105% (calculated on a weighted average basis) of the projected aggregate outstanding balance of the Senior Debt projected to be outstanding (as determined by the Borrower in accordance with the Base Case Forecast) until the latest payment date occurring at the expiration of the 20-year notional amortization period; and (ii) no later than 45 days following the Upsize Closing Date, with respect to no less than 75%, but no more than 105% (calculated on a weighted average basis) of the projected aggregate outstanding balance of the Senior Debt projected to be outstanding (as determined by the Borrower in accordance with the Base Case Forecast) until the Maturity Date; provided that for purposes of calculating such percentage in the foregoing sub-clauses (i) and (ii) above, (w) the principal balance of the Working Capital Facility and/or Working Capital Debt shall be excluded, (x) any obligations incurred under the Permitted Senior Debt Hedging Instruments shall be excluded, and (y) any such Senior Debt which bears a fixed interest rate shall be deemed subject to a Permitted Hedging Instrument. (c) If, due to a mandatory prepayment made in accordance with Section 3.4 (Mandatory Prepayments), a voluntary prepayment made in accordance with Section 3.5 (Voluntary Prepayments) or otherwise, the aggregate notional amount of the Permitted Hedging Instruments (which, for the avoidance of doubt, shall only include Permitted Hedging Instruments that are Interest Rate Hedging Instruments) on any Quarterly Payment Date is greater than 105% (or, if 105% hedging is not permitted by applicable law, 100%) (in each case, calculated on a weighted average basis) of the projected aggregate outstanding balance of the Senior Debt, within 45 days, the Borrower shall reduce the amount that is hedged under the Permitted Hedging Instruments (in the proportion allocated to each Permitted Hedging Instrument as may be determined by the Borrower as long as the Borrower has allocated used commercially reasonable efforts to allocate the reduction pro rata among each Permitted Hedging Instrument, after taking into account any back-to-back or offsetting arrangements related thereto) such that the aggregate notional amount of the Permitted Hedging Instruments is not more than 105% (or, if 105% hedging is not permitted by applicable law, 100%) (in each case, calculated on a weighted average basis) of the projected aggregate outstanding balance of the Senior Debt on such Quarterly Payment Date (any such amount of the Permitted Hedging Instruments that is required to be so reduced, a “Hedging Excess Amount”).

Hedging Arrangements. (a) No Obligor As soon as practicable, but in no event later than 5 Business Days after the Effective Date, the Borrower and/or its Subsidiaries shall enter into Hedging Instruments other commodity price ▇▇▇▇▇▇ establishing minimum fixed prices reasonably acceptable to the Administrative Agent on a volume of Hydrocarbons equal to not less than Permitted Hedging Instruments64% of the projected production from proven, developed, producing Oil and Gas Properties of the Borrower and its Subsidiaries for the five year period after January 1, 2007 with one or more Approved Counterparties. (b) The Borrower Thereafter, (x) each such Credit Party shall enter into and thereafter maintain in full force and effect, and shall cause its Subsidiaries to maintain in effect, Swap Agreements with one or more Approved Counterparties that establish minimum fixed prices reasonably acceptable to the Administrative Agent on a volume of Hydrocarbons equal to not less than 60% of projected production from proven, developed, producing Oil and Gas Properties of the Borrower and its Subsidiaries for the succeeding twelve calendar months on a rolling twelve calendar month basis, and (y) such Credit Party shall not, and shall not suffer its Subsidiaries to, enter from time to time, one or more interest rate Permitted Hedging Instruments: into Swap Agreements that establish minimum fixed prices on a volume of Hydrocarbons greater than 75% of projected production from proved, developed, producing Oil and Gas Properties of the Borrower and its Subsidiaries for the succeeding twelve calendar months on a rolling twelve-calendar-month basis; provided in each case that (i) no later than 45 days the Borrower and each other Credit Party may proportionally reduce its hedge position through the termination or unwinding of Swap Agreements in connection with the sale of Oil and Gas Properties pursuant to Section 9.12 such that the Borrower's hedge position following the Closing Date, with respect to no less than 50%, but no more than 105% (calculated on such sale of Oil and Gas Properties and corresponding reduction in hedge position shall cover a weighted average basis) substantially similar percentage of the projected aggregate outstanding balance total volume of the Senior Debt projected to be outstanding (as determined Hydrocarbons produced by the Borrower for the applicable periods as did the Borrower's hedge position prior to the sale of such Oil and Gas Properties and corresponding reduction in accordance with the Base Case Forecast) until the latest payment date occurring at the expiration of the 20-year notional amortization period; and (ii) no later than 45 days following the Closing Datehedge position, with respect to no less than 75%, but no more than 105% (calculated on a weighted average basis) of the projected aggregate outstanding balance of the Senior Debt projected to be outstanding (as determined by the Borrower in accordance with the Base Case Forecast) until the Maturity Date; provided that for purposes of calculating such percentage in the foregoing sub-clauses (i) and (ii) above, (w) if as a result of any sale of Oil and Gas Properties pursuant to Section 9.12 the principal balance notional volumes of all Swap Agreements of the Working Capital Facility and/or Working Capital Debt Borrower in respect of commodities or basis swaps relating to such commodities exceeds 100% of the reasonably anticipated projected production from proven, developed, producing Oil and Gas Properties for the succeeding twelve calendar months following such sale, the Borrower shall be excludedreduce its hedge position through the novation, (x) any obligations incurred under termination or unwinding of Swap Agreements or otherwise such that the Permitted Senior Debt Hedging Instruments Borrower's hedge position in respect of all commodities Swap Agreements shall be excludednot exceed 100% of the reasonably anticipated projected production from proven, developed, producing Oil and (y) any Gas Properties for such Senior Debt which bears a fixed interest rate shall be deemed subject to a Permitted Hedging Instrumentsucceeding twelve calendar month period. (c) If, due to a mandatory prepayment made in accordance with Section 3.4 (Mandatory Prepayments), a voluntary prepayment made in accordance with Section 3.5 (Voluntary Prepayments) or otherwise, Not later than the aggregate notional amount of 120th day after the Permitted Hedging Instruments (which, for the avoidance of doubt, shall only include Permitted Hedging Instruments that are Interest Rate Hedging Instruments) on any Quarterly Payment Date is greater than 105% (or, if 105% hedging is not permitted by applicable law, 100%) (in each case, calculated on a weighted average basis) of the projected aggregate outstanding balance of the Senior Debt, within 45 daysEffective Date, the Borrower shall reduce enter into, and for a minimum of 30 months thereafter maintain, Swap Agreements acceptable to the Administrative Agent in respect of interest rates with one or more Approved Counterparties that result in at least 50% of the aggregate principal amount that is hedged outstanding under the Permitted Hedging Instruments (in Facility being subject to a fixed rate reasonably acceptable to the proportion allocated to each Permitted Hedging Instrument as may be determined by the Borrower as long as the Borrower has allocated the reduction pro rata among each Permitted Hedging Instrument, after taking into account any back-to-back or offsetting arrangements related thereto) such that the aggregate notional amount of the Permitted Hedging Instruments is not more than 105% (or, if 105% hedging is not permitted by applicable law, 100%) (in each case, calculated on a weighted average basis) of the projected aggregate outstanding balance of the Senior Debt on such Quarterly Payment Date (any such amount of the Permitted Hedging Instruments that is required to be so reduced, a “Hedging Excess Amount”)Administrative Agent.

Hedging Arrangements. (a) No Each Obligor will ensure, and each Hedging Bank agrees, that prior to the Security Release Date: (i) any Hedging Agreement to which it is at any time party will be in the form of the ISDA 1992 Master Agreement or the ISDA 2002 Master Agreement, as the case may be, and will provide for “Second Method” (that is, two way payments) in the event of a termination of any hedging transaction entered into under such Hedging Agreement whether upon a Termination Event or an Event of Default (as defined therein); (ii) if any hedging transaction under any Hedging Agreement to which any Obligor is a party is terminated prior to the Security Release Date and a settlement amount or other amount falls due from a Hedging Bank to any Obligor then, if any of the Transaction Security has become enforceable, that amount shall enter into be paid by such Hedging Instruments other Bank to the Security Agent and treated as proceeds of enforcement of the Transaction Security for application in the order prescribed by Clause 29.11 (Application of Proceeds by Security Agent); (iii) each Hedging Agreement (and any amendment to any Hedging Agreement) shall be delivered to the Agent as soon as reasonably practicable after it has been entered into; (iv) the Hedging Agreements to which they are party will not (unless the Majority Lenders have otherwise consented in writing) be amended, varied or supplemented in a manner which would result in: (A) any payment under any such Hedging Agreement being required to be made by an Obligor earlier than Permitted the date originally provided for in the relevant Hedging InstrumentsAgreement; or (B) any Obligor becoming liable to make an additional payment (or increase an existing payment) under any such Hedging Agreement which liability does not arise from the original provisions of that Hedging Agreement, if, in either case, that would be inconsistent with the requirements of this Clause 22.9. (b) The Borrower shall enter into Each Hedging Bank undertakes that it will not (unless the Majority Creditors have otherwise consented in writing) demand (other than as may be necessary in order to exercise any right to terminate or close out any hedging transaction as provided in and thereafter maintain permitted under paragraph (c) below) payment, prepayment or repayment of, or any distribution in full force and effectrespect of, from time or on account of, any of the obligations of the relevant Obligor to time, one it under any Hedging Agreement to which it is party in cash or more interest rate Permitted Hedging Instrumentsin kind except: (i) no later than 45 days following for payments arising under the Closing Date, with respect original terms of any Hedging Agreement to no less than 50%, but no more than 105% which it is party (calculated on a weighted average basiswithout regard to any amendments made after the date of such Hedging Agreement prohibited by paragraph (a)(iv) of the projected aggregate outstanding balance of the Senior Debt projected to be outstanding (as determined by the Borrower in accordance with the Base Case Forecast) until the latest payment date occurring at the expiration of the 20-year notional amortization periodthis Clause 22.9); andand/or (ii) no later than 45 days following for the Closing Date, with respect to no less than 75%, but no more than 105% (calculated on a weighted average basis) proceeds of enforcement of the projected aggregate outstanding balance Security Documents received and applied in the order permitted by Clause 29.11 (Application of the Senior Debt projected Proceeds by Security Agent); and/or (iii) payments due under any Hedging Agreement to be outstanding (as determined which it is a party which has been terminated or closed-out by the Borrower in accordance with relevant Obligor or by the Base Case Forecastrelevant Hedging Bank (and if by the relevant Hedging Bank such termination or close out is permitted under paragraph (c) until the Maturity Date; provided that for purposes of calculating such percentage in the foregoing sub-clauses (i) and (ii) above, (w) the principal balance of the Working Capital Facility and/or Working Capital Debt shall be excluded, (x) any obligations incurred under the Permitted Senior Debt Hedging Instruments shall be excluded, and (y) any such Senior Debt which bears a fixed interest rate shall be deemed subject to a Permitted Hedging Instrumentbelow). (c) If, due Each Hedging Bank undertakes that it will not (unless the Majority Creditors have otherwise consented in writing) exercise any right to terminate or close out any hedging transaction under any Hedging Agreements to which it is party prior to its stated maturity (whether by reason of the Obligor counterparty becoming a mandatory prepayment made in accordance with Section 3.4 Defaulting Party or Affected Party thereunder (Mandatory Prepayments), a voluntary prepayment made in accordance with Section 3.5 (Voluntary Prepaymentseach as defined therein) or otherwise) unless: (i) such Obligor has defaulted on a payment due under such Hedging Agreement, after allowing for any required notice and any applicable days of grace, and such default continues for more than 21 days after notice of such default being given to the aggregate notional amount Agent; or (ii) an Illegality, a Tax Event or a Tax Event upon Merger (each as defined in the ISDA 1992 Master Agreement or the ISDA Master Agreement 2002, as the case may be) has occurred; or (iii) the Agent has served a notice under Clause 23.18 (Acceleration) or any circumstances which would constitute an Event of Default under Clauses 23.6 (Insolvency) or 23.7 (Insolvency proceedings) of this Agreement (as in force at the date of this Agreement) has occurred; or (iv) all Loans have been prepaid or repaid in full and the Lenders are no longer under any obligation to participate in further Loans; or (v) there is a prepayment of Facility A pursuant to Clause 8 (Prepayment, Cancellation and Increase); provided that the Hedging Bank may only exercise its right to terminate or close out that element of the Permitted hedging transaction (if any) which corresponds to the amount so prepaid; or (vi) the parties to the Hedging Instruments Agreement have voluntarily agreed to close out any hedging transaction in that Hedging Agreement. (whichd) Each Hedging Bank will, for promptly after the avoidance of doubtAgent has served a notice under Clause 23.18 (Acceleration), shall only include Permitted exercise any and all rights it may have to terminate the hedging transactions under each Hedging Instruments that are Interest Rate Hedging Instruments) Agreement to which it is party, unless the Agent (acting on any Quarterly Payment Date is greater than 105% (or, if 105% hedging is not permitted by applicable law, 100%) (in each case, calculated on a weighted average basis) the instructions of the projected aggregate outstanding balance Majority Creditors) otherwise agrees or requires. (e) Each Hedging Bank agrees that (unless the Majority Creditors have otherwise agreed in writing) it will not enforce any Transaction Security or require any other person to enforce the same in respect of amounts owing under any Hedging Agreement to which it is party. The provisions of this Clause 22.9 shall cease to apply after the Senior Debt, within 45 days, Loans have been prepaid or repaid in full and the Borrower shall reduce the amount that is hedged Lenders are under the Permitted Hedging Instruments (no obligation to participate in the proportion allocated to each Permitted Hedging Instrument as may be determined by the Borrower as long as the Borrower has allocated the reduction pro rata among each Permitted Hedging Instrument, after taking into account any back-to-back or offsetting arrangements related thereto) such that the aggregate notional amount of the Permitted Hedging Instruments is not more than 105% (or, if 105% hedging is not permitted by applicable law, 100%) (in each case, calculated on a weighted average basis) of the projected aggregate outstanding balance of the Senior Debt on such Quarterly Payment Date (any such amount of the Permitted Hedging Instruments that is required to be so reduced, a “Hedging Excess Amount”)further Loans.