1
EXHIBIT 10.2
GULF CANADA RESOURCES LIMITED
- and -
THE LENDERS NAMED HEREIN
- and -
BANK OF MONTREAL
(AS AGENT FOR THE LENDERS)
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LOAN AGREEMENT
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JULY 18, 1997
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TABLE OF CONTENTS
PAGE NO.
ARTICLE I
DEFINITIONS AND PRINCIPLES OF INTERPRETATION
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Certain Rules of Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
1.3 Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
1.4 Cross-References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
1.5 Ratings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
1.6 Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
1.7 Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE II
THE FACILITY
2.1 The Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.2 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.3 Availment of Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.4 Drawdown Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.5 Notice of Drawdown to Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.6 Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.7 Funding Reliance; Lender's Failure to Fund . . . . . . . . . . . . . . . . . . . . . . . . 30
2.8 Several Funding Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.9 Pro-Rata Treatment of Drawdowns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.10 Restrictions on Drawdowns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.11 Conversion Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.12 Rollovers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.13 Evidence of Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.14 Netting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE III
FURTHER PROVISIONS RELATING TOLIBOR DRAWDOWNS, BANKERS' ACCEPTANCES AND LETTERS OF CREDIT
3.1 Effects of Change of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.2 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.3 Bankers' Acceptances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.4 Issuance of Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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ARTICLE IV
PAYMENT OF INTEREST AND OTHER FEES
4.1 Interest on Prime Rate Drawdowns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.2 Interest on Base Rate Drawdowns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.3 Interest on Libor Drawdowns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.4 Stamping Fees on Bankers' Acceptances . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.5 Fees for Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.6 Incremental Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.7 Interest on Unpaid Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.8 Annual Rates of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.9 Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.10 Limitation on Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.11 Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4.12 Waiver of Judgment Interest Act (Alberta) . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE V
REPAYMENTS AND PREPAYMENTS
5.1 Amounts Under Facility May be Reborrowed . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.2 Mandatory Facility Reductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.3 Repayment under the Facility after Term Out Date . . . . . . . . . . . . . . . . . . . . . 45
5.4 Voluntary Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.5 Currency Fluctuations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.6 Voluntary Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE VI
CONDITIONS PRECEDENT TO DRAWDOWNS
6.1 Conditions Precedent to First Drawdown . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.2 Conditions Precedent to All Drawdowns . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.3 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE VII
BORROWER'S REPRESENTATIONS AND WARRANTIES
7.1 Borrower's Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE VIII
COVENANTS
8.1 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.2 Environmental Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
8.3 Restricted/Unrestricted Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
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8.4 Certain Requirements in Respect of Mergers, etc. . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE IX
EVENTS OF DEFAULT
9.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.2 Termination and Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.3 Remedies Cumulative and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
9.4 Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE X
THE AGENT AND THE LENDERS
10.1 The Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
10.2 The Agent's Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
10.3 The Agent's Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
10.4 Protection of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
10.5 Indemnification of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
10.6 Termination or Resignation of an Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.7 Rights of the Agent as Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.8 Financial Information Concerning Gulf . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.9 Knowledge of Financial Situation of the Borrower . . . . . . . . . . . . . . . . . . . . . 73
10.10 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.11 Capacity as Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
ARTICLE XI
PAYMENT
11.1 Payments to Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
11.2 Payments by Lenders to Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
11.3 Payments by Agent to Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
11.4 No Set-Off or Counterclaim by Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . 75
11.5 Non-Receipt by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
11.6 When Due Date Not Specified . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
11.7 Agent's Authority to Debit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
ARTICLE XII
GENERAL
12.1 Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
12.2 Indemnifications by the Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
12.3 Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
12.4 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
12.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
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12.6 Judgment Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
12.7 Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
12.8 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
12.9 Whole Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
12.10 Binding Effect; Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
12.11 Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
12.12 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
12.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Schedule A - Schedule of Lenders
Schedule B - Compliance Certificate
Schedule C - Drawdown Notice
Schedule D - Bankers' Acceptance Undertaking
Schedule E - Extension Agreement
Schedule F - Extension Request
Schedule G - Bank Transfer Agreement
Schedule H - Borrower's Counsel's Opinion
Schedule I - Lenders' Counsel's Opinion
Schedule J - Notice of Amendment of Unrestricted Subsidiaries
Schedule K - Letter of Credit Documentation
Schedule L - List of Unrestricted Subsidiaries
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LOAN AGREEMENT
THIS AGREEMENT, made as of the 18th day of July, ▇▇▇▇,
▇ ▇ ▇ ▇ ▇ ▇ ▇:
GULF CANADA RESOURCES LIMITED, a corporation governed by the
laws of Canada
(hereinafter called the "Borrower")
- and -
THE LENDERS NAMED IN SCHEDULE A to this Agreement as amended
from time to time
(hereinafter called the "Lenders")
- and -
BANK OF MONTREAL, a bank existing under the laws of Canada, as
the Agent on behalf of the Lenders
(hereinafter, in such capacity, called the "Agent")
WITNESSES THAT WHEREAS the Borrower has requested the Facility
(as hereinafter defined) for general corporate purposes and the Lenders have
agreed to provide the Facility to the Borrower on the terms and conditions
herein set forth;
NOW THEREFORE in consideration of the premises and mutual
agreements and covenants contained in this Agreement and other good and
valuable consideration (the receipt and adequacy of which are hereby mutually
acknowledged), the Parties hereby agree as follows:
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ARTICLE I
DEFINITIONS AND PRINCIPLES OF INTERPRETATION
1.1 Definitions - Whenever used in this Agreement, unless there is
something inconsistent in the subject matter or context, the following words
and terms shall have the meaning set out below:
"ADVANCE" means a utilization of the Facility by the Borrower by way
of a Prime Rate Drawdown, Base Rate Drawdown, Libor Drawdown, Bankers'
Acceptance Drawdown or L/C Drawdown from a Lender, in each case, in
accordance herewith;
"AGENT" means Bank of Montreal or such other Person as shall have been
appointed as a successor agent pursuant to Section 10.6;
"AGREEMENT" means this agreement, including all schedules and all
instruments supplementing or amending this Agreement, "HEREOF",
"HERETO" and "HEREUNDER" and similar expressions mean and refer to
this Agreement and not any particular article or section of this
Agreement;
"APPLICABLE LAW" means, with respect to any Person, property,
transaction or event, and whether or not having the force of law, all
applicable laws, statutes, regulations, rules, guidelines, by-laws,
treaties, orders, policies, judgments, decrees and official directives
of Government Authorities or Persons acting under the authority of any
Government Authority including, for greater certainty, the proposals
for international convergence of capital measurement and capital
standards developed by the Bank for International Settlements subject
to the implementation measures to be adopted in Canada in respect
thereto as referred to in a bulletin of the Office of the
Superintendent of Financial Institutions Canada dated August 19, 1988;
"APPLICABLE SPREAD" means, at any time, the number of Basis Points, if
any, by which the number of incremental Basis Points, at such time,
applicable in respect of Bankers' Acceptances exceeds the number of
incremental Basis Points, at such time, applicable in respect of Prime
Rate Drawdowns;
"AUDITORS" means the present auditors of the Borrower or such other
national firm of chartered accountants who from time to time may
become the auditors of the Borrower;
"AVAILABLE FACILITY AMOUNT" means at any time U.S. $700,000,000 (as
reduced or cancelled from time to time in accordance herewith) less
the aggregate Outstanding Amount at such time;
"BANKERS' ACCEPTANCE" means a non-interest bearing ▇▇▇▇ of exchange in
Canadian Dollars, having a term of not less than 10 nor more than 183
days and maturing on a Business Day,
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drawn by the Borrower and accepted by the Lender as evidenced by the
Lender's endorsement thereof at the direction of the Borrower;
"BANKERS' ACCEPTANCE DRAWDOWN" means a Drawdown in Canadian Dollars
effected by the sale or purchase of a Bankers' Acceptance pursuant to
the terms of this Agreement;
"BANKERS' ACCEPTANCE LOAN" means, at any time, the aggregate face
amount of all Bankers' Acceptances then outstanding as a result of all
Bankers' Acceptance Drawdowns;
"BANKERS' ACCEPTANCE PROCEEDS" means, in respect of each Bankers'
Acceptance Drawdown, funds in an amount which is equal to:
Face Amount
-----------------
1 + (Rate x Term)
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365
(where "Face Amount" is the principal amount of the Bankers'
Acceptance being purchased, "Rate" is the Reference BA Discount Rate
divided by 100 and "Term" is the number of days in the term of the
Bankers' Acceptance), less the applicable stamping fees in respect
thereof;
"BANKERS' ACCEPTANCE UNDERTAKING" means an agreement substantially in
the form set forth in Schedule D;
"BASE RATE" means, at any time, the rate of interest, expressed as an
annual rate on the basis of a year of 365 days, or 366 days in the
case of a leap year, established by the Agent from time to time as the
reference rate of interest it will charge for loans made in Canada in
U.S. Dollars to Canadian customers;
"BASE RATE DRAWDOWN" means a Drawdown in U.S. Dollars with respect to
which the Borrower has elected or is deemed to have elected to have
interest calculated by reference to the Base Rate or to which, in
accordance with the provisions of this Agreement, the Base Rate is
deemed or stated to apply;
"BASE RATE LOAN" means, at any time, the aggregate of the principal
amounts of all Base Rate Drawdowns then outstanding;
"BASIS POINTS" OR "BP" means one one-hundredth (0.01) of one percent;
"BLOCK A PROJECT" means the project for the commercial development of
gas reserves located in the Block "A" Production Sharing Contract area
in Aceh province, Sumatra, Indonesia;
"BUSINESS DAY" means a day on which banks are open for business in
Calgary and Toronto which is not a Saturday or a Sunday and,
additionally, in respect of any Libor Drawdown or
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Libor Loan, a day on which dealings in United States Dollar deposits
are transacted in the London eurodollar interbank market;
"CANADIAN DOLLARS" and the symbol "CDN. $" mean the lawful currency of
Canada;
"CBRS " means C.B.R.S. Inc. carrying on business as "Canadian Bond
Rating Service" and its successors;
"CHANGE OF CONTROL" means the acquisition, directly or indirectly, of
more than 50% of the Voting Securities of the Borrower by any Person
(or group of Persons acting in concert with respect to the ownership
or voting of such Voting Securities), provided that any such
acquisition by The Torch Group (being those parties other than the
Borrower and A&G Resources Corporation to the Shareholders Agreement
dated January 25, 1995) shall not be considered to be a Change of
Control;
"COMMITMENT" means, with respect to each Lender, such Lender's
obligation to make Advances hereunder pursuant to Section 2.1;
"COMMITMENT AMOUNT" has the meaning ascribed to it in Section 2.1;
"COMMODITY SWAP" means an agreement entered into between the Borrower
and a counterparty on a case by case basis, the purpose and effect of
which is to mitigate or eliminate the Borrower's exposure to
fluctuations in commodity prices;
"COMPLIANCE CERTIFICATE" means a certificate of the Borrower
substantially in the form set out in Schedule B and signed by a senior
officer (including the President, any Vice-President, the Treasurer or
any Assistant Treasurer) of the Borrower;
"CONFLICTED LENDER" means, with respect to any Potentially Hostile
Acquisition, a Revolving Lender that is the lead bank, lead agent or
sole lender to the Person who is the target of such Potentially
Hostile Acquisition;
"CONVERSION" means a conversion of a Drawdown pursuant to Section
2.11;
"CORRIDOR PROJECT" means the project for the commercial development of
gas reserves from the Corridor Block Production Sharing Contract area
of South Sumatra, Indonesia and associated lands;
"CORRIDOR SUPPORT AGREEMENT" means the Sponsor Support Agreement dated
February 26, 1997 between the Borrower and The Sumitomo Bank, Limited,
as agent for the lenders for the Corridor Project, a copy of which has
been provided by the Borrower to the Agent;
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"CURRENCY SWAP" means a contract entered into between the Borrower and
a counterparty on a case by case basis in connection with forward
rate, currency swap or currency exchange and other similar currency
related transactions, the purpose and effect of which is to mitigate
or eliminate the Borrower's exposure to fluctuations in exchange
rates;
"DATE OF CONFIRMATION" means, in the case of any extension of the Term
Out Date in accordance with Section 2.1, the earliest of: (i) the date
the Agent gives notice to the Borrower that each of the Revolving
Lenders has executed and delivered to the Agent the Extension
Agreement; (ii) the date the Borrower (provided the Borrower is
entitled to do so) provides the notice to the Agent of its election
pursuant to paragraph 2.1(c)(i) or 2.1(c)(ii) to extend the Term Out
Date with respect to the Commitments of the Extending Lenders; and
(iii) the Term Out Date as the same was determined prior to the
Extension Request to which the Extension Agreement relates;
"DBRS" means Dominion Bond Rating Service Limited and its successors;
"DESIGNATED PROJECT GUARANTEES" means, collectively, all Financial
Guarantees in respect of the Corridor Project and the Block A Project,
including the Corridor Support Agreement (and any other project of
Gulf that the Borrower requests, and the Majority Lenders agree, be
included in this paragraph) in respect of which any Person has or may
have recourse to any member of the Restricted Group;
"DRAWDOWN" means an Advance, a Conversion or a Rollover, as the
context requires;
"DRAWDOWN DATE" means the date proposed for a Drawdown requested by
the Borrower pursuant to the provisions of this Agreement;
"DRAWDOWN NOTICE" means a notice by the Borrower to the Agent in
respect of a Drawdown, given either in writing or by fax (in the case
of fax notice with prompt original written confirmation thereof
pursuant to the provisions of Section 2.4) substantially in the form
set forth in Schedule C;
"EBITDA" means with respect to any period, the earnings (loss) from
continuing operations in the ordinary course of business (which for
certainty shall not include gains or losses from sales of assets and
sales of securities other than sales described in subsection
5.2(a)(i), (ii) and (iii) and shall not include dividends and other
earnings distributed to the Restricted Group by Unrestricted
Subsidiaries) before income taxes of the Borrower and the Restricted
Group (determined on a consolidated basis for such entities in
accordance with GAAP) plus, to the extent deducted in the
determination of the foregoing, without duplication, the sum of: (i)
interest expense, (ii) depreciation and depletion expense, (iii)
amortization expense, (iv) expensed exploration (in accordance with
the successful efforts method of accounting), and (v) any other
non-cash charges;
"EFFECTIVE DATE" means the date of this Agreement;
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"ELIGIBLE LENDER" means, any of the Lenders and/or any other financial
institution(s) resident in Canada for purposes of the Income Tax Act
(Canada) and listed in Schedule I or Schedule II to the Bank Act
(Canada) acceptable to the Borrower and the Agent, each acting
reasonably;
"ELIGIBLE PARTNERSHIP" means a partnership formed pursuant to the laws
of the Province of Alberta, all the interests of which from and after
the transfer of assets hereinafter mentioned are owned by the Borrower
and Restricted Subsidiaries and to which all or substantially all of
the assets of the Borrower have been transferred in accordance with
Section 8.4;
"ENVIRONMENTAL APPROVALS" means all applicable permits, licences,
authorizations, consents, directions or approvals required by
Government Authorities pursuant to the Environmental Laws with respect
to the operation of Gulf's business;
"ENVIRONMENTAL LAWS" means in respect of any jurisdiction, Canadian or
foreign, all laws, by-laws, rules, regulations, orders, codes and
judgments of any Government Authority relating to the protection of
the environment and public health and safety and, without restricting
the generality of the foregoing, includes without limitation those
Environmental Laws relating to the storage, transportation, treatment
and disposal of Hazardous Substances, product safety, and the
emission, discharge, release or threatened release of Hazardous
Substances into the air, surface water, ground water, land surface,
subsurface strata or any building or structure and, in each such case,
as such Environmental Laws may be amended or supplemented from time to
time;
"EQUITY" means, in respect of any body corporate, the aggregate of:
(i) the share capital attributable to the issued shares, or any right
to acquire shares, outstanding on the date of determination,
(excluding, in the case of the Borrower, any share capital
attributable to securities, or any right to acquire securities, in
each case, other than Equity Shares); (ii) (without duplication) any
surplus (whether contributed or capital); (iii) any retained earnings
(or deficit); and (iv) any cumulative foreign currency translation
adjustment; in each case, of the body corporate and as determined in
accordance with GAAP;
"EQUITY SHARES" means the ordinary shares and Preferred Shares of the
Borrower as constituted on the Effective Date and shares, issued after
the Effective Date, of any class or series of shares of the Borrower
provided that the rights, privileges, terms and conditions of or
attaching to such shares (whether as set forth in the constating
documents of the Borrower or in any agreement or understanding with
the Borrower, any Subsidiary or any Person not acting at arm's length
with the Borrower) do not entitle the holder thereof to redeem,
retract or otherwise have the shares repurchased or retired in whole
or in part other than by the issuance of securities that are,
themselves, Equity Shares as otherwise defined herein;
"EQUIVALENT AMOUNT" means, on any date, the amount of Canadian Dollars
or United States Dollars, as the case may be, which can be purchased
with the specified amount of United
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States Dollars or Canadian Dollars, as the case may be, at the
applicable Exchange Rate on that date;
"EVENT OF DEFAULT" means any of the events described in Section 9.1;
"EXCHANGE RATE" means, on any date, for any conversion of United
States Dollars into Canadian Dollars, or vice versa, the applicable
spot buying rate for Canadian Dollars or United States Dollars, as the
case may be, reported by the Bank of Canada as its daily official noon
(Toronto time) rate of exchange on such date if it is a Business Day
or on the immediately preceding Business Day if such date is not a
Business Day;
"EXISTING ACQUISITION FACILITY" means the facilities provided pursuant
to the amended and restated loan agreement made as of December 17,
1996, between the Borrower, Bank of Montreal, as agent and
underwriter, and the lenders named therein, and amended and restated
as of January 24, 1997;
"EXTENDING LENDERS" has the meaning ascribed to it in Section 2.1;
"EXTENSION AGREEMENT" means an agreement substantially in the form set
forth in Schedule E;
"EXTENSION REQUEST" means a document substantially in the form set
forth in Schedule F, accompanied by an Extension Agreement duly
completed and executed by the Borrower;
"FACILITY" has the meaning ascribed to it in Section 2.1;
"FACILITY AMOUNT" means the aggregate of the Outstanding Amount and
the Available Facility Amount;
"FAIR MARKET VALUE" means the highest price available in an open and
unrestricted market between informed, prudent parties, acting at arm's
length and under no compulsion to act, expressed in terms of money or
money's worth;
"FINANCIAL GUARANTEE" means, without duplication, any Guarantee and
any undertaking to assume, guarantee, endorse, contingently agree to
purchase or to provide funds for the payment of, or otherwise become
liable in respect of, any indebtedness, liability or obligation of any
Person provided in connection with, or as a condition of, the
availability or provision of Funded Debt to any other Person
(including the Corridor Support Agreement, but excluding any Guarantee
or undertaking that: (A) would otherwise be a Financial Guarantee but
in respect of which recourse is limited to securities of an
Unrestricted Subsidiary; or (B) which is provided by a member of the
Restricted Group in respect of any indebtedness, liabilities or
obligations of a member of the Restricted Group); provided, at any
particular time, that the amount of each Financial Guarantee shall be
deemed to be the amount guaranteed thereby determined as at such time,
unless the Financial Guarantee is limited to
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a specified amount or to realization on specified assets, in which
case the amount of such Financial Guarantee shall be deemed to be the
lesser of (i) such specified amount or the Fair Market Value of such
specified assets, as the case may be, and (ii) the amount guaranteed
thereby;
"FINANCIAL STATEMENTS" means the financial statements of Gulf for the
fiscal year ended December 31, 1996, consisting of the balance sheet
and the statements of income, retained earnings and changes in
financial position and all notes to such financial statements as
reported upon by Ernst & Young, together with the unaudited financial
statements of Gulf for the Fiscal Quarter ended March 31, 1997;
"FISCAL QUARTER" means a three month period ending on the last day of
March, June, September or December in each year;
"FUNDED DEBT" means, without duplication, (i) the amount of any
indebtedness, liabilities and obligations in respect of monies
borrowed; (ii) the book value of any capital leases or other leases
classified as debt under GAAP or for Canadian income tax purposes;
(iii) amounts constituting any Prepaid Obligation; (iv) amounts owing
as deferred consideration for the acquisition of assets or receipt of
services or both unless the same are payable on normal trade terms in
less than six months from the date such assets are acquired or such
services are received and are not the subject of any renewal or
extension provisions or arrangements (together with any Funded Debt
thereof assumed or acquired therewith); and (v) any Guarantee in
respect of Funded Debt as hereinbefore defined, but for greater
certainty, shall, in respect of the Borrower, exclude the Preferred
Shares;
"GAAP" has the meaning ascribed to it in Section 1.3;
"GOVERNMENT AUTHORITIES" means any nation or government, any province,
state, city or other political subdivision and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including without
limitation, all applicable federal, provincial and municipal agencies,
ministries, departments, inspectors and officials;
"GUARANTEE" means any undertaking to assume, guarantee, endorse,
contingently agree to purchase or to provide funds for the payment of,
or otherwise become liable in respect of, any Funded Debt of any
Person (other than an undertaking that, at any particular time, would
otherwise constitute a Guarantee but in respect of which recourse is
limited to securities of an Unrestricted Subsidiary); provided that at
any particular time, the amount of each Guarantee shall be deemed to
be the amount of the Funded Debt guaranteed thereby determined as at
such time, unless the Guarantee is limited to a specified amount or to
realization on specified assets, in which case the amount of such
guarantee shall be deemed to be the lesser of (i) such specified
amount or the Fair Market Value of such specified assets, as the case
may be, and (ii) the amount of such Funded Debt;
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"GULF" means the Borrower and all of its Subsidiaries;
"HAZARDOUS SUBSTANCE" means any contaminant, pollutant or hazardous
substance that is likely to cause harm or degradation to the
environment or risk to human health or safety, and without restricting
the generality of the foregoing, includes without limitation, any
pollutant, contaminant, waste, hazardous waste, toxic substance or
dangerous good which is defined or identified in any Environmental Law
or industry standard, or which is present in the environment in such
quantity or state that it contravenes any Environmental Law;
"INTER-RESTRICTED GROUP FUNDED DEBT" means Funded Debt of one or more
members of the Restricted Group owed solely to one or more other
members of the Restricted Group in respect of which Funded Debt no
Person, other than a member of the Restricted Group, has or may have
recourse to the assets of the member of the Restricted Group who has
the Funded Debt;
"INTEREST PAYMENT DATE" means,
(i) with respect to a Prime Rate Drawdown and a Base Rate
Drawdown, the first Business Day of each calendar month; and
(ii) with respect to a Libor Drawdown, the last day of the
Libor Interest Period applicable thereto and also, if the
Libor Interest Period is longer than 93 days, the last day of
each 90 day period during such Libor Interest Period or, if
any such day is not a Business Day, the Business Day next
following;
"INTEREST SWAP" means a contract entered into between the Borrower and
a counterparty on a case by case basis, in connection with interest
rate swap transactions, interest rate options, cap transactions, floor
transactions, collar transactions and other similar interest rate
related transactions, including forward rate agreements, the purpose
and effect of which is to mitigate or eliminate the Borrower's
exposure to fluctuations in interest rates;
"LENDERS" means the Lenders listed in Schedule A hereof, as amended
from time to time in accordance herewith;
"LENDING OFFICE" with respect to any Lender, means the office of such
Lender specified as its "Lending Office" opposite its name on Schedule
A or such other office of such Lender in Canada as such Lender may
from time to time specify to the Borrower and the Agent;
"L/C DRAWDOWN" means a Drawdown by way of Letter of Credit;
"LETTER OF CREDIT" means an irrevocable letter of credit or letter of
guarantee, in each case, in Canadian Dollars or U.S. Dollars issued or
that may be issued from time to time by the Lenders at the request of
the Borrower;
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"LETTER OF CREDIT DOCUMENTATION" means the documentation substantially
in the form set forth in Schedule K;
"LETTERS OF CREDIT LOANS" means, at any time, the aggregate of the
maximum liability undertaken by the Lenders as a result of all L/C
Drawdowns then outstanding;
"LIABILITIES" means, without duplication, all obligations, contingent
and otherwise, which are classified as liabilities in accordance with
GAAP;
"LIBOR DRAWDOWN" means a Drawdown in U.S. Dollars with respect to
which the Borrower has elected to have interest calculated by
reference to the Libor Rate or to which, in accordance with the
provisions of this Agreement, the Libor Rate is stated to apply;
"LIBOR INTEREST PERIOD" means, for any Libor Drawdown, the period of
1, 2, 3, 6 months, or such other period as may be agreed to by all
Lenders, as may be selected by the Borrower pursuant to the relevant
Drawdown Notice, commencing on the Drawdown Date of such Libor Loan,
provided that:
(i) if such Interest Period would otherwise end on a day
which is not a Business Day, such Libor Interest Period shall
end on the next following Business Day (unless such next
following Business Day is the first Business Day of a calendar
month, in which case such Libor Interest Period shall end on
the Business Day immediately preceding the day on which such
Libor Interest Period would otherwise end); and
(ii) Libor Interest Periods shall terminate on such dates
as will permit the repayment of the Facility on the dates and
in the manner provided for herein;
"LIBOR LOAN" means, at any time, the aggregate of the principal
amounts of all Libor Drawdowns then outstanding;
"LIBOR RATE" means, for the Libor Interest Period applicable to a
Libor Drawdown, the average interest rate per annum (expressed on the
basis of a 360 day year) for a period equal to the number of days in
such Libor Interest Period at which U.S. Dollar deposits are offered
for deposit in the London eurodollar interbank market at approximately
11:00 a.m. (London, England time) on the second Business Day preceding
the first day of such Libor Interest Period as published on the
Reuters Service Page LIBOR (or such other page as may, from time to
time, replace such page on that service for the purpose of displaying
the rates at which U.S. Dollar deposits are offered for deposit in the
London eurodollar interbank market) or, failing the availability of
such service, as published on page 3750 of the Telerate screen (or
such other page as may, from time to time, replace such page on that
service for the purpose of displaying the rates at which U.S. Dollar
deposits are offered for deposit in the London eurodollar interbank
market);
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"LOANS" means, at any time, the aggregate of all Bankers' Acceptance
Loans, Prime Rate Loans, Base Rate Loans, Libor Loans and Letters of
Credit Loans then outstanding;
"MAJORITY LENDERS" means one or more Lenders who, in the aggregate,
have outstanding more than 66 2/3% of the principal amount of the
Loans or, if no such principal amount is then outstanding, Lenders who
have more than 66 2/3% of the Commitments and except in respect of the
matters requiring approval by all Lenders as set forth in Section
12.7, any reference to Lenders in the context of a requirement for any
approval, consent or waiver shall be deemed to be a reference to
Majority Lenders;
"MATERIALLY ADVERSE" means any state of fact, change, event or
occurrence which would:
(i) materially adversely affect the Borrower's ability to
perform its obligations under, or the validity or
enforceability of, this Agreement; or
(ii) be materially adverse to the financial condition of
the Restricted Group;
"MATURITY DATE" means the date which is the fourth anniversary of the
Term Out Date;
"MINIMUM TANGIBLE NET WORTH" means Cdn. $1,300,000,000 plus 70% of
Gulf's net income (loss) determined in accordance with GAAP, for the
period commencing on March 31, 1997 and ending on the last day of the
most recently completed Fiscal Quarter on a cumulative basis, provided
that in no circumstance shall Minimum Tangible Net Worth be less than
Cdn. $1,300,000,000;
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc. and its successors;
"NET PROCEEDS" means all cash proceeds paid to the Borrower or any of
its Restricted Subsidiaries or any Unrestricted Subsidiary to the
extent distributed to the Restricted Group in respect of (i) the sale
of an asset after repayment of any debt secured by the asset or
required to be paid to complete such sale, (ii) the issuance of
securities, (iii) the secondary distribution of securities; and (iv)
such other transactions as may be approved as provided in Section 5.2,
in each case after deduction of reasonable legal and other fees,
Taxes, commissions, usual adjustments and other usual expenses, and
such other amounts as may be agreed to by the Majority Lenders;
"NON-MATERIAL RESTRICTED SUBSIDIARY" means a Restricted Subsidiary
having a gross asset value (as shown on the latest financial
statements of the Subsidiary) of less than Cdn. $1,000,000 and having
no indebtedness, liabilities or obligations in respect of which any
Person may have recourse to the Borrower or any other Restricted
Subsidiary in excess of Cdn. $1,000,000;
"NONEXTENDING LENDERS" has the meaning ascribed to it in Section 2.1;
▇▇
- ▇▇ -
"▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇" means the Lenders whose Loans are in the Term
Period;
"NOTICE OF AMENDMENT OF UNRESTRICTED SUBSIDIARIES" means a notice
substantially in the form set forth in Schedule J;
"OUTSTANDING AMOUNT", with respect to any Loan or Loans outstanding
hereunder, means the aggregate amount of indebtedness of the Borrower
outstanding thereunder, excluding interest, fees and any other amounts
which have accrued but are not yet due in respect of such Loan(s);
"PARTIES" means the Borrower, the Lenders and the Agent and "PARTY"
refers to any one of them;
"PAYMENT OFFICE" means the office that is designated by the Agent to
the Borrower and Lenders from time to time as the office where
payments to be made to the Agent pursuant to this Agreement shall be
made;
"PERMITTED DESIGNATED PROJECT GUARANTEE AMOUNT" means the amount equal
to:
(i) U.S. $150,000,000; and
(ii) the amount, if any, by which:
(A) 5% of the Equity of Gulf exceeds
(B) the aggregate amount of Financial Guarantees
excluding Designated Project Guarantees;
"PERMITTED ENCUMBRANCES" means:
(i) liens or privileges imposed by law such as carriers',
warehousemens', mechanics' and materialmens' liens and
privileges; or liens and privileges arising out of judgments
or awards in respect of which an appeal or proceedings for
review are being prosecuted in good faith and with respect to
which a stay of execution shall have been secured pending such
appeal or proceedings for review or security or other
appropriate protection of its properties and assets (excluding
such security) from seizure shall have been provided; or liens
for taxes, assessments or governmental charges or levies not
at the time due or delinquent or the validity of which is
being contested at the time in good faith in proceedings
before a court or other Government Authority and in each case,
in respect of which any appropriate reserves have been taken;
or liens in favour of operators and non-operators pursuant to
oil and gas operating agreements and oil and gas facility or
pipeline operating agreements and other similar operating
agreements; undetermined or inchoate liens, privileges and
charges incidental to current operations which have not at
such time been filed
18
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pursuant to law or which relate to obligations not due or
delinquent; or the deposit of cash or securities in connection
with any lien or privilege hereinbefore in this paragraph
referred to;
(ii) minor encumbrances, including, without limitation,
easements, rights of way, servitudes or other similar rights
in land granted to or reserved by other Persons, rights of way
for sewers, electric lines, telegraph and telephone lines and
other similar purposes, or zoning or other restrictions as to
the use of real property, which encumbrances, easements,
servitudes, rights of way, other similar rights and
restrictions do not in the aggregate either materially detract
from the value of the property and assets of the Restricted
Group or materially impair its use, in each case, in the
operation of Gulf's business;
(iii) the right reserved to or vested in any municipality
or governmental or other public authority by the terms of any
lease, licence, franchise, grant or permit or by any statutory
provision, to terminate any such lease, licence, franchise,
grant or permit, or to require annual or other periodic
payments as a condition of the continuance thereof;
(iv) security given to a public utility or any
municipality or governmental or other public authority when
required by such utility or municipality or other authority in
connection with the operation of Gulf's business, all in the
ordinary course of its business;
(v) the reservations, limitations, provisos and
conditions, if any, expressed in any original grants from the
Crown;
(vi) security given in respect of any Interest Swaps,
Currency Swaps or Commodity Swaps in the ordinary course of
its business provided that such security is cash, marketable
securities, a letter of credit (in respect of which the
liability is included in Total Senior Debt) or a Financial
Guarantee;
(vii) purchase money security interests as defined in the
Personal Property Security Act (Alberta) as such Act may be
amended from time to time, in the aggregate for such security
interests up to a maximum of 5% of the Equity of Gulf at the
date the security is created, incurred or assumed;
(viii) security created, incurred or assumed in the ordinary
course of business in the aggregate for such types of security
up to a maximum of 5% of the Equity of Gulf at the date the
security is created, incurred or assumed;
(ix) security created, incurred or assumed in respect of
Funded Debt of the Restricted Group in the aggregate for such
types of security up to a maximum
19
- 14 -
(excluding Inter-Restricted Group Funded Debt) of 5% of the
Equity of Gulf at the date the security is created, incurred
or assumed;
(x) security in respect of obligations of an Unrestricted
Subsidiary over shares of Unrestricted Subsidiaries held by
the Restricted Group;
(xi) security in respect of accounts receivable for sales
under the Receivables Purchase and Sale Agreement dated
November 29, 1994, as amended, among the Borrower, Corporate
Receivables Trust and Toronto Dominion Securities Inc., or any
replacement of such arrangement, provided that in no event
shall proceeds thereunder exceed Cdn. $125,000,000;
(xii) security in respect of Funded Debt of acquired
entities provided the same complies with subsection 8.3(b);
(xiii) security given by a Restricted Subsidiary that is a
Restricted Subsidiary pursuant to subsection 8.3(b) if such
security was given prior to the Restricted Subsidiary becoming
a Restricted Subsidiary pursuant to such paragraph;
(xiv) security given by a Restricted Subsidiary to the
Borrower or to a Restricted Subsidiary in respect of
Inter-Restricted Group Funded Debt; and
(xv) security granted by Crusader Limited (now Gulf
Australia Resources Limited) for the benefit of the holders of
certain notes issued by Crusader Limited creating a security
interest in shares of Triton Energy Corporation and property
exchanged for such shares, which notes are exchangeable for
shares of Triton Energy Corporation;
"PERSON" means any individual, sole proprietorship, partnership,
limited partnership, unincorporated association, unincorporated
syndicate, unincorporated organization, trust, body corporate, and a
natural person in his or her capacity as trustee, executor,
administrator or other legal representative or Government Authority;
"POTENTIALLY HOSTILE ACQUISITION" means the acquisition of more than
9.5% of the Voting Securities of, amalgamation or merger with, a
Person any of the securities of which are publicly traded unless the
acquisition, amalgamation or merger is approved by the board of
directors, board of trustees or other individuals in a similar
capacity of such Person;
"PREFERRED SHARES" means the Fixed/Adjustable Rate Senior Preference
Shares Series 1 and the Cumulative Redeemable Auction Perpetual Senior
Preference Shares, Series 2 of the Borrower as constituted on the
Effective Date;
"PREPAID OBLIGATIONS" means "take-or-pay" or similar prepaid
Liabilities of a Person whereby such Person is obligated to settle, at
some future date more than 60 days from the
20
- 15 -
date the obligation is incurred, payment in respect of petroleum
substances, whether by deliveries (accelerated or otherwise) of
petroleum substances, payment of money or otherwise howsoever;
"PREVIOUS FOUR FISCAL QUARTERS" means, at the time of any
determination, the four consecutive completed Fiscal Quarters ending
on, or last preceding, the date of such determination;
"PRIME RATE" means, at any time, the greater of: (i) the floating
annual rate of interest publicly announced from time to time by the
Agent as its prime rate, being a reference rate in effect on the date
of such announcement, based on a year of 365, or 366 days in the case
of a leap year, for Canadian dollar loans to commercial customers in
Canada; and (ii) the Agent's Reference BA Discount Rate in respect of
bankers' acceptances having a term of 30 days plus the Applicable
Spread;
"PRIME RATE DRAWDOWN" means a loan in Canadian Dollars by the Lenders
to the Borrower with respect to which the Borrower has elected, or is
deemed to have elected, to have interest calculated by reference to
the Prime Rate or to which, in accordance with the provisions of this
Agreement, the Prime Rate is deemed or stated to apply;
"PRIME RATE LOAN" means, at any time, the aggregate of the principal
amounts of all Prime Rate Drawdowns then outstanding;
"PROJECT SUBSIDIARY" means:
(i) a Subsidiary that holds the production sharing
contract(s) for the Corridor Project or the Block A Project,
being, at the Effective Date, Gulf Resources (Grissik) Ltd.
(formerly Asamera (Overseas) Limited) or Gulf Resources Aceh
Ltd. (formerly Asamera Oil Indonesia Ltd.);
(ii) a Subsidiary that directly incurs indebtedness for
borrowed money that is solely for the purpose of funding,
directly or indirectly, the investment in the Corridor Project
or the Block A Project, or any other project of Gulf that the
Borrower requests and the Majority Lenders approve;
(iii) any Subsidiary of a Subsidiary described in paragraph
(i) or (ii) or of which a Subsidiary described in paragraph
(i) or (ii) is a Subsidiary; and
(iv) any Subsidiary of a Subsidiary described in paragraph
(iii) or of which a Subsidiary described in paragraph (iii) is
a Subsidiary;
that has no material assets (other than the securities or debt of
another Project Subsidiary), liabilities or operations other than in
relation to such Project;
21
- 16 -
"REFERENCE BA DISCOUNT RATE" means, in respect of a Bankers'
Acceptance being accepted by a Lender on a Drawdown Date, (i) for a
Lender that is listed in Schedule I to the Bank Act (Canada), the
average bankers' acceptance rate as quoted on Reuters CDOR page (or
such other page as may, from time to time, replace such page on that
service for the purpose of displaying quotations for bankers'
acceptances accepted by leading Canadian financial institutions) at
approximately 10:00 a.m. (Toronto time) on such Drawdown Date for
bankers' acceptances having a comparable maturity date as the maturity
date of such bankers' acceptance (the "CDOR Rate"); or, if such rate
is not available at or about such time, the average of the bankers'
acceptance rates (expressed to five decimal places) as quoted to the
Agent by the Schedule I BA Reference Banks as of 10:00 a.m. (Toronto
time) on such Drawdown Date for bankers' acceptances having a
comparable maturity date as the maturity date of such Bankers'
Acceptance ; and (ii) for a Lender that is listed in Schedule II to
the Bank Act (Canada), the rate established by the Agent to be the
lesser of (A) the CDOR Rate plus 10 Basis Points; and (B) the average
of the bankers' acceptance rates (expressed to five decimal places) as
quoted to the Agent by the Schedule II BA Reference Banks as of 10:00
a.m. (Toronto time) on such Drawdown Date for bankers' acceptances
having a comparable maturity date as the maturity date of such
Bankers' Acceptance;
"REMEDIAL ORDER" means any control order, stop order or other
administrative complaint, direction, order or sanction issued, filed
or imposed by a Government Authority pursuant to the Environmental
Laws requiring any remediation or clean-up, or requiring that any
on-going activity be reduced, modified or eliminated, in each case as
a result of any release or threatened release of any Hazardous
Substance into the environment or any violation of Environmental Law;
"RESTRICTED GROUP" means, collectively, the Borrower and the
Restricted Subsidiaries;
"RESTRICTED SUBSIDIARIES" means all Subsidiaries that are not
Unrestricted Subsidiaries;
"REVOLVING LENDERS" means the Lenders the Loans of which are in the
Revolving Period;
"REVOLVING PERIOD" means, the period commencing on the Effective Date
and ending on the Term Out Date;
"ROLLOVER" means a rollover of a Drawdown pursuant to subsection
2.12(a);
"SCHEDULE I BA REFERENCE BANKS" means the Lenders listed in Schedule I
to the Bank Act (Canada) as are, at such time, designated by the
Agent, with the prior consent of the Borrower (acting reasonably), as
the Schedule I BA Reference Banks;
"SCHEDULE II BA REFERENCE BANKS" means the Lenders listed in Schedule
II to the Bank Act (Canada) as are, at such time, designated by the
Agent, with the prior consent of the Borrower (acting reasonably), as
the Schedule II BA Reference Banks;
22
- 17 -
"SENIOR DEBT" means all Funded Debt of the Borrower, on an
unconsolidated basis, ranking at least pari passu with the Loans and
includes, without limitation, the 9% Debentures due 1999, the 8.35%
Senior Notes due 2006, and the 8.25% Debentures due 2017;
"STANDARD & POOR'S" means Standard & Poor's Corporation and its
successors;
"SUBSIDIARY" means any body corporate in respect of which such Person
owns, directly or indirectly, more than 50% of the Voting Securities
(provided that such Person shall be deemed (for the purposes of
determining whether any body corporate is a Subsidiary) to own,
directly or indirectly, all of the Voting Securities of any Subsidiary
owned by any other Subsidiary if such Person, directly or indirectly
owns more than 50% of the Voting Securities of the second mentioned
Subsidiary), together with any other body corporate with which such
Person is consolidated in such Person's consolidated financial
statements;
"TANGIBLE NET WORTH" means the Equity of Gulf less the book value of
the intangible assets of Gulf determined in accordance with GAAP;
"TAXES" means all domestic federal or provincial taxes, imposts,
rates, levies, assessments and governmental charges including, without
limitation, all income taxes, capital gains, sales, excise, use,
property, capital, payroll, GST, business, transfer and value added
taxes and all customs and import duties, together with all interest,
fines and penalties with respect thereto;
"TERM OUT DATE" means, in respect of each Lender, the 364th day
following the Effective Date or, in respect of each Extending Lender,
in the case of any extension of such date in accordance with Section
2.1, the 364th day (or such lesser period as may be set forth in the
Extension Agreement relating to such extension) following the Date of
Confirmation;
"TERM PERIOD" means the period from the Term Out Date to the Maturity
Date;
"TOTAL SENIOR DEBT" shall include, without duplication: (i) all Funded
Debt of the Restricted Group; and (ii) for greater certainty, the
aggregate amount of Designated Project Guarantees (other than those
subordinate to the Loans) in excess of the Permitted Designated
Project Guarantees Amount, but shall exclude: (iii) the aggregate
amount of Designated Project Guarantees up to but not exceeding the
Permitted Designated Project Guarantees Amount; (iv) any
Inter-Restricted Group Funded Debt; and (v) the principal amount of
the Subordinated Debentures of Gulf outstanding as at December 31,
1996 which was U.S. $500,000,000 and any replacement subordinated
debt;
"TRANSACTION PRICE" means, in respect of any acquisition, merger,
purchase or sale, the aggregate of:
(i) in the case of an acquisition, merger or purchase,
the sum of: (A) the aggregate Fair Market Value, as of the
date of the acquisition, merger or purchase,
23
- 18 -
of the consideration paid or delivered by Gulf, directly or
indirectly, for the assets acquired pursuant to such
acquisition, merger or purchase; and (B) the aggregate amount
of all Liabilities assumed by Gulf, directly or indirectly, in
respect of the assets acquired pursuant to such acquisition,
merger or purchase; and
(ii) in the case of a sale, the sum of: (A) the aggregate
Fair Market Value, as of the date of the sale, of the
consideration paid or delivered to Gulf, directly or
indirectly, for the assets sold; and (B) the aggregate amount
of all Liabilities assumed by the purchaser of the assets from
Gulf, directly or indirectly, in respect of the assets sold;
"UNITED STATES DOLLARS", "U.S. DOLLARS" and the symbol "U.S.$" mean
the lawful currency of the United States of America;
"UNRESTRICTED SUBSIDIARIES" means all of the following Subsidiaries:
(i) each body corporate of which the Restricted Group
beneficially owns, directly or indirectly, less than 100% of
the Voting Securities;
(ii) any other Subsidiary that has Funded Debt unless any
one or more of the following exceptions apply:
(A) such Funded Debt is non recourse to the
Borrower or any such Restricted Subsidiary (other
than such representations, warranties and covenants
as are customary in non recourse financing not
pertaining to the payment of principal or interest);
(B) the Funded Debt is owed to a member of the
Restricted Group;
(C) the Senior Debt of the Borrower is assigned a
rating of at least BB+ by Standard and Poor's and Ba1
by Moody's and the Funded Debt of that Subsidiary
consolidated with the Funded Debt of its direct and
indirect wholly owned Subsidiaries (other than those
Subsidiaries designated as Unrestricted Subsidiaries
in accordance with subsection 8.3(d)) does not exceed
2.5 times the aggregate EBITDA of that Subsidiary
consolidated with the EBITDA of such direct and
indirect wholly owned Subsidiaries, and each such
Subsidiary shall also be a Restricted Subsidiary
(whether or not it individually meets the foregoing
test) unless the Borrower designates such Subsidiary
as an Unrestricted Subsidiary in accordance with
subsection 8.3(d);
(D) the Senior Debt of the Borrower is assigned a
rating of at least BBB- by Standard and Poor's and
Baa3 by Moody's and the Borrower is in compliance
with subsection 8.1(l);
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(E) the Subsidiary has delivered to the Agent a
guarantee in form and substance acceptable to the
Agent, acting reasonably, pursuant to which such
Subsidiary guarantees all present and future
indebtedness and liabilities to the Lenders under
this Agreement together with an opinion in form and
substance acceptable to the Agent, acting reasonably,
including without limitation such matters as the
enforceability of such guarantee and the absence of
any conflict, breach or contravention with or of any
material agreement relating to Funded Debt, provided
however that the Agent, on behalf of the Lenders,
shall release and cancel such guarantee upon the
request of the Borrower if the Borrower subsequently
designates such Subsidiary as an Unrestricted
Subsidiary pursuant to subsection 8.3(d) or if such
Subsidiary is then qualified to be a Restricted
Subsidiary under another exception in this paragraph
(ii); or
(F) the aggregate of the Funded Debt of all such
Subsidiaries qualifying as a Restricted Subsidiary
pursuant to this paragraph (F) (excluding
Subsidiaries that are otherwise qualified to be
Unrestricted Subsidiaries pursuant to this definition
or subsection 8.3(e)) does not exceed U.S.
$10,000,000;
(iii) any other Subsidiary designated by the Borrower as an
Unrestricted Subsidiary pursuant to subsection 8.3(d);
(iv) any Subsidiary (which does not otherwise qualify as
an Unrestricted Subsidiary pursuant to the foregoing
paragraphs or paragraph (v)) the designation of which as an
Unrestricted Subsidiary is requested by the Borrower and
approved by the Majority Lenders; and
(v) any Subsidiary of a Subsidiary that is an
Unrestricted Subsidiary,
but shall not include:
(vi) any Subsidiary that would otherwise qualify as an
Unrestricted Subsidiary pursuant to paragraph (ii) if the
Subsidiary has irrevocably deposited with a trustee as trust
funds money in the respective currency in which the Funded
Debt is payable in an amount sufficient to pay and discharge
the entire indebtedness, liabilities and obligations in
respect of such Funded Debt (including interest on amounts in
default, if any) for the purpose of, specifically pledged as
security for and dedicated solely to the retirement of all of
such Funded Debt;
(vii) any Subsidiary that would otherwise qualify as an
Unrestricted Subsidiary pursuant to paragraphs (i), (ii),
(iii) or (v), the designation of which as a Restricted
Subsidiary is requested by the Borrower and approved by the
Majority Lenders; and
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(viii) any Unrestricted Subsidiary in respect of which the
Borrower exercises the option in accordance with subsection
8.3(b) to treat such Subsidiary as a Restricted Subsidiary;
and, as at the Effective Date, all of such Unrestricted Subsidiaries
are set forth in Schedule L; and
"VOTING SECURITIES" means securities to which are attached votes that
may be cast to elect the directors, trustees or other individuals in a
similar capacity of the issuer either under all circumstances or under
some circumstances that have occurred and are continuing.
1.2 Certain Rules of Interpretation - In this Agreement:
(a) time is of the essence in the performance of the Parties'
respective obligations;
(b) the headings of Articles and Sections are inserted solely for
convenience of reference and are not intended as complete or accurate
descriptions of content;
(c) the use of words in the singular or plural, or with a
particular gender, shall not limit the scope or exclude the
application of any provision of this Agreement to such Person or
Persons or circumstances as the context otherwise permits;
(d) whenever a provision of this Agreement requires an approval or
consent by a Party to this Agreement and notification of such approval
or consent is not delivered within the applicable time limit, then,
unless otherwise specified, the Party whose consent or approval is
required shall be conclusively deemed to have withheld its consent or
approval;
(e) unless otherwise specified, time periods within or following
which any payment is to be made or act is to be done shall be
calculated by excluding the day on which the period commences and
including the day which ends the period and by extending the period to
the next Business Day following if the last day of the period is not a
Business Day; and
(f) whenever any payment is to be made or action to be taken under
this Agreement is required to be made or taken on a day other than a
Business Day, such payment shall be made or action taken on the next
Business Day following.
1.3 Accounting Principles - Wherever in this Agreement reference
is made to generally accepted accounting principles ("GAAP"), such reference
shall be deemed to be to consistently applied generally accepted accounting
principles in effect in Canada, from time to time, provided that, for greater
certainty, any change thereto shall not be applied retroactively to any
circumstance prior to such change.
1.4 Cross-References - Unless otherwise specified, references in
this Agreement to any Article, Section, subsection, paragraph or Schedule are
references to such Article, Section,
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subsection, paragraph or Schedule of this Agreement and, unless otherwise
specified, references in any Article, Section, subsection, paragraph or
Schedule to any clause are references to such clause of such Article, Section,
subsection, paragraph or Schedule.
1.5 Ratings - A rating, whether public or private, by DBRS, CBRS,
Standard & Poor's or Moody's shall be deemed to be in effect: (i) in respect
of any determination of interest in respect of Prime Rate Drawdowns, Base Rate
Drawdowns and Libor Drawdowns on the next Interest Payment Date after receipt
by the Agent of an announcement or publication by DBRS, CBRS, Standard & Poor's
or Moody's, as the case may be, of such rating or, in the absence of such
announcement or publication, of a written statement of the rating agency and
will remain in effect until the next Interest Payment Date after the date when
any change in such rating is deemed to be in effect; and (ii) otherwise, on the
receipt by the Agent of an announcement or publication by DBRS, CBRS, Standard
& Poor's or Moody's, as the case may be, of such rating or, in the absence of
such announcement or publication, of a written statement of the rating agency
and will remain in effect until such date as any change in such rating is
deemed to be in effect.
1.6 Currency - Unless otherwise denoted or the context otherwise
requires, any references to dollars, currency or $ herein are references to
U.S. Dollars.
1.7 Schedules - The following are the Schedules to this Agreement
and are incorporated by reference and deemed to be part of this Agreement:
Schedule A - Schedule of Lenders
Schedule B - Compliance Certificate
Schedule C - Drawdown Notice
Schedule D - Bankers' Acceptance Undertaking
Schedule E - Extension Agreement
Schedule F - Extension Request
Schedule G - Bank Transfer Agreement
Schedule H - Borrower's Counsel's Opinion
Schedule I - Lenders' Counsel's Opinion
Schedule J - Notice of Amendment of Unrestricted Subsidiaries
Schedule K - Letter of Credit Documentation
Schedule L - List of Unrestricted Subsidiaries
ARTICLE II
THE FACILITY
2.1 The Facility -
(a) Commitment - Upon the terms and subject to the conditions
herein set forth, the Lenders severally agree to establish in favour
of the Borrower a revolving/term credit facility
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of up to a maximum of U.S. $700,000,000 (the "Facility") to be
available to the Borrower in either U.S. Dollars or the Equivalent
Amount of Canadian Dollars, or any combination thereof and otherwise
in accordance with the provisions of this Agreement from time to time
on any Business Day during the Revolving Period in an aggregate amount
not to exceed at any time the amount set forth opposite such Lender's
name on Schedule A, as reduced in accordance with this Agreement,
(being such Lender's "Commitment Amount"). Each Drawdown shall be,
for each Revolving Lender, in an aggregate amount not greater than
such Revolving Lender's Commitment Amount less the Loans owed to it
and shall consist of Advances made by it, rateably (subject to
decrease in accordance with subsections 2.6(b) and 2.6(e) and Section
5.2, increase in accordance with subsection 2.6(c) and modification in
accordance with Section 2.9) according to the proportion of the
aggregate of all Revolving Lender's Commitment Amounts constituted by
such Revolving Lender's Commitment Amount. Within the limits of each
Lender's Commitment and subject to Section 2.7, the Borrower may
borrow, repay and reborrow under this Section during the Revolving
Period. Prior to the Term Out Date, any prepayments or repayments
made by the Borrower in respect of Loans in the Revolving Period
shall not reduce the Revolving Lender's Commitment Amounts.
(b) Extension - Not more than 120 nor less than 60 days before the
Term Out Date, the Borrower may, by delivery to the Agent of an
Extension Request, request that the Revolving Lenders extend the Term
Out Date with respect to the Commitment of such Lenders as the same
was determined prior to giving effect to such Extension Request. Upon
receipt of such Extension Request, the Agent shall distribute such
Extension Request to each Revolving Lender. If the Agent receives
confirmation from each of the Revolving Lenders of their execution of
the Extension Agreement to which such Extension Notice relates within
30 days of receipt by such Lenders of the aforesaid Extension Request
from the Agent, the Term Out Date with respect to the Commitments of
such Revolving Lenders shall be extended from the date the Agent gives
notice to the Borrower that each Revolving Lender has executed and
delivered to the Agent the Extension Agreement and for the period (not
exceeding 364 days) set forth in the Extension Agreement. Anything
herein contained to the contrary notwithstanding, no Lender shall have
any obligation to extend the Term Out Date hereunder and its decision
to extend the Term Out Date shall be in its absolute discretion.
(c) Extension Options - If one or more Revolving Lenders do not
confirm their execution of the Extension Agreement to which such
Extension Notice relates within the aforesaid 30 days (such Revolving
Lenders being hereinafter referred to as "Nonextending Lenders"), the
Borrower shall be entitled to:
(i) extend the Term Out Date with respect to the
Commitments of the Revolving Lenders who have so confirmed
their execution of the Extension Agreement (such Revolving
Lenders being hereinafter referred to as the "Extending
Lenders") from the date the Borrower notifies the Agent of the
Borrower's exercise of this entitlement and for the period
(not exceeding 364 days) set forth in the Extension Agreement
and to terminate the Commitment(s) of the Nonextending
Lender(s)
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unutilized as of the Term Out Date as the same was determined
prior to giving effect to such Extension Request; or
(ii) extend the Term Out Date with respect to the
Commitments of the Extending Lenders from the date the
Borrower notifies the Agent of the Borrower's exercise of this
entitlement and for the period (not exceeding 364 days) set
forth in the Extension Agreement; prior to the fifth Business
Day preceding the Term Out Date as the same was determined
prior to giving effect to such Extension Report, replace one
or more of the Nonextending Lenders with one or more Eligible
Lenders (in respect of whom, the Term Out Date shall be the
same date as the Term Out Date with respect to the Commitments
of the Extending Lenders); and terminate the Commitment(s) of
the Nonextending Lender(s), to the extent not so replaced,
unutilized as of the Term Out Date as the same was determined
prior to the Extension Request; or
(iii) elect to revoke such Extension Request;
provided that: (i) if the Borrower does not notify the Agent of its
election hereunder prior to the fifth Business Day preceding the Term
Out Date as the same was determined prior to giving effect to such
Extension Request with respect to the Commitments of such Revolving
Lenders, the Borrower shall be deemed to have elected to revoke such
Extension Request; and (ii) if the Commitments of the Nonextending
Lenders constitutes 25% or more of the Facility, all of the unutilized
Commitments of all Revolving Lenders shall be terminated on the Term
Out Date as the same was determined prior to giving effect to such
Extension Request and the Term Out Date shall not be extended.
(d) Cancellation of Unutilized Commitments - The unutilized
portion of the Commitment of any Nonextending Lender and of all
Revolving Lenders, if the Borrower determines or is deemed to have
elected to revoke the Extension Request, shall terminate on the Term
Out Date.
2.2 Purpose - The Facility shall be available to the Borrower for
its general corporate purposes. Advances shall be used by the Borrower (i) for
the repayment in full of the Existing Acquisition Facility and (ii) thereafter
for lawful general corporate purposes of the Borrower and its Subsidiaries
including, without limitation, the financing of oil and gas acquisitions and
exploration and development activities.
2.3 Availment of Facility -
Upon the terms and subject to the conditions herein set forth,
the Borrower may borrow under the Facility by way of:
(i) Prime Rate Drawdowns;
(ii) Base Rate Drawdowns;
▇▇
- ▇▇ -
(▇▇▇) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇;
(▇▇) Bankers' Acceptance Drawdowns; and
(v) L/C Drawdowns;
or any combination or combinations of the foregoing at the discretion of the
Borrower.
2.4 Drawdown Notices -
A Drawdown Notice shall be substantially in the form set forth
in Schedule C and shall state the type of Drawdown being requested, the
proposed Drawdown Date, together with any other information required by such
Schedule or this Section 2.4.
If a Drawdown Notice is given by fax, the Borrower shall send
to the Agent written confirmation bearing an original signature of an
authorized signatory of the Borrower of such notice within two Business Days of
the giving of such notice. Any notice on which the Agent has acted, whether
made by fax or otherwise in writing shall be irrevocable and binding on the
Borrower.
The following notice periods shall apply to each type of
Drawdown:
(a) Prime Rate Drawdowns and Base Rate Drawdowns - Subject to the
terms and conditions of this Agreement, the Borrower shall be entitled
to Prime Rate Drawdowns or Base Rate Drawdowns by giving a Drawdown
Notice to the Agent by 10:00 a.m. (Calgary time) on no less than the
number of Business Days prior to the proposed Drawdown Date set forth
below:
Amount of Drawdown (U.S.) Number of Business Days
$0 - $10,000,000 one
$10,000,001 - $50,000,000 two
Greater than $50,000,000 three
where the Amount of Drawdown shall be based upon the currency of the
Advance proposed in the Drawdown Notice (or, where a Prime Rate
Drawdown is requested, on the Equivalent Amount in U.S. Dollars) and
more than one Drawdown Notice in respect of the same Drawdown Date
shall for the purposes of this subsection be considered one Drawdown
Notice.
(b) Libor Drawdowns - Subject to the terms and conditions of this
Agreement, the Borrower shall be entitled to Libor Drawdowns under the
Facility by delivering a Drawdown Notice to the Agent by 10:00 a.m.
(Calgary time) no less than three Business Days prior to the proposed
Drawdown Date, which notice shall also specify the principal amount of
the Drawdown and the Libor Interest Period selected in respect of such
Drawdown;
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(c) Bankers' Acceptance Drawdowns - Subject to the terms and
conditions of this Agreement, the Borrower shall be entitled to
Bankers' Acceptance Drawdowns under the Facility, by delivering a
Drawdown Notice to the Agent, by 10:00 a.m. (Calgary time) no less
than one Business Day prior to the proposed Drawdown Date, which
notice shall also specify the term and the aggregate face amount of
the Bankers' Acceptances to be accepted by the Lenders; and
(d) L/C Drawdowns - Subject to the terms and conditions of this
Agreement, the Borrower shall be entitled to require the Lenders to
issue Letters of Credit under the Facility by delivering a Drawdown
Notice to the Agent with respect to the Letters of Credit being
requested, by 10:00 a.m. (Calgary time) no less than five Business
Days prior to the proposed Drawdown Date;
provided that if the Drawdown is an Advance to be used in whole or in part for
any Potentially Hostile Acquisition, the Borrower shall deliver the Drawdown
Notice relating to such Drawdown an additional two Business Days prior to the
proposed Drawdown Date and the Drawdown Notice shall provide the name of the
entity subject to the Potentially Hostile Acquisition. If the Borrower intends
to use the Facility, in whole or in part, for any Potentially Hostile
Acquisition in respect of which the Transaction Price may be in excess of U.S.
$50,000,000, the Borrower shall provide written notice of its intention to so
use the Facility to the Agent within one Business Day after its public
announcement of the Potentially Hostile Acquisition and the Agent shall
forthwith and, in any event, within one Business Day of receipt of such notice
from the Borrower provide such notice to the Lenders. Each Drawdown Notice
shall be irrevocable and binding on the Borrower.
2.5 Notice of Drawdown to Lenders - Promptly upon receipt of any
Drawdown Notice or upon a drawing under any Letter of Credit, the Agent shall
notify each Lender by facsimile of the proposed Drawdown or the drawing, as
applicable, of such Lender's proportionate share thereof and of the other
matters covered by the Drawdown Notice. In the case of a proposed Bankers'
Acceptance Drawdown, the Agent shall also, on the Drawdown Date, notify each
Lender and the Borrower of the applicable Reference BA Discount Rate. In the
case of a proposed Drawdown by way of L/C Drawdown, the Agent shall also notify
each Lender of the other relevant particulars of the Drawdown. Any such notice
in respect of a drawing under a Letter of Credit shall be deemed to be a
request for a Prime Rate Drawdown if the Letter of Credit is denominated in
Canadian Dollars or a Base Rate Drawdown if the Letter of Credit is denominated
in U.S. Dollars, in the amount of such drawing with a Drawdown Date on the next
Business Day.
2.6 Funding
(a) Each Lender shall, before 11:00 a.m. (Calgary time) on the
Drawdown Date (other than in respect of Bankers' Acceptance Drawdowns
which are addressed in subsection 2.6(d)) or the date a drawing by a
beneficiary is to be made under a Letter of Credit, make available
(for the account of such Lender's Lending Office) to the Agent at its
Payment Office, in same day funds, such Lender's rateable portion
(subject to subsection 2.6(e)) of any such Drawdown (other than an L/C
Drawdown) or of such drawing under a Letter of
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Credit, as the case may be. In the case of a Drawdown (other than an
L/C Drawdown), upon fulfilment of the applicable conditions precedent
set forth in Article VI, the Agent will make such funds available to
the Borrower at the Payment Office. Subject to subsections 2.6(e) and
(f) in the case of an L/C Drawdown, upon fulfilment of the applicable
conditions precedent set forth in Article VI, each Lender shall issue
a Letter of Credit in the amount of such Lender's rateable portion of
the amount of the L/C Drawdown based upon such Lender's Commitment and
deliver the same to the Borrower at the Payment Office or at such
other office of the Agent as the Borrower may reasonably request, and
upon such issuance, each Lender shall be deemed to have made an
Advance to the Borrower in such amount. In the case of a drawing by a
beneficiary under a Letter of Credit, the Agent shall pay such funds
to the beneficiary thereof and the Borrower shall be deemed to have
converted such portion of the Advance which was deemed to occur on the
issuance of the Letter of Credit into a Prime Rate Drawdown if the
Letter of Credit is denominated in Canadian Dollars or a Base Rate
Drawdown if the Letter of Credit is denominated in U.S. Dollars, in
the amount of such payment on the date of such payment by the Agent;
(b) At the option of the Borrower to be exercised by delivery of
notice to that effect to the Agent at least five Business Days prior
to the date of any proposed L/C Drawdown, the Borrower may obtain from
up to five Lenders (which shall include the Agent as Lender)
designated by the Borrower in such notice a quotation of the fees
which such Lender would charge to act as issuer of the relevant Letter
of Credit to be issued in connection with the L/C Drawdown. Upon the
giving of such notice to such designated Lenders, any such Lender
(including the Agent as Lender) may provide such a quotation to the
Borrower not less than three Business Days prior to the date of the
proposed L/C Drawdown. The Borrower shall accept the tender which is
the lowest quotation tendered unless there are no quotations tendered
that are less than 0.125% per annum, or there are quotations tendered
that are equal to but no quotations less than 0.125% per annum, in
which cases the Agent shall be deemed to have tendered a quotation of
0.125% per annum and the Agent shall be chosen to issue the relevant
Letter of Credit on behalf of all Lenders (and for so doing, as set
out below, shall be entitled to such fee of 0.125%). Forthwith
following the tendering of the quotations, the Borrower shall notify
the Agent of the identity of the issuing Lender and the face amount of
the Letter of Credit to be issued. The Lender whose tender was so
selected, shall, upon the request of the Borrower, issue the relevant
Letter of Credit on behalf of all Lenders as provided in subsection
2.6(c) below, and shall be entitled to retain the full amount of the
fee quoted or deemed to have been quoted by it. All fees under this
paragraph shall be based on the face amount of the relevant Letter of
Credit and payable quarterly in arrears in the same manner as
described in Section 4.5; and
(c) In the event that pursuant to subsection 2.6(b), the Agent or
any other Lender acts as issuer of a Letter of Credit, the provisions
of this Agreement with respect to L/C Drawdowns and drawings under a
Letter of Credit shall apply mutatis mutandis and, without limiting
the generality of the foregoing, upon issuance of the relevant Letter
of Credit, each Lender shall be deemed to have made available the
relevant L/C Drawdown and shall be liable to, and hereby indemnifies,
the issuing Lender in respect of such Letter of Credit to the extent
of
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such Lender's ratable portion of the face amount of such Letter of
Credit, based on such Lender's Commitment. The Borrower shall provide
to the issuing Lender of such Letter of Credit such documentation (not
inconsistent with the provisions of Schedule K) as such issuing Lender
may reasonably require in connection with such Letter of Credit and
the Agent, acting reasonably, shall be entitled to determine any
procedures to be followed in connection with the issuance of such
Letter of Credit and any drawings thereunder.
(d) Each Lender shall, before 11:00 a.m. (Calgary time) on the
Drawdown Date in the case of a Bankers' Acceptance Drawdown, make
available the Bankers' Acceptance Proceeds in respect of such Bankers'
Acceptances. After the Agent's receipt of such funds and upon
fulfilment of the applicable conditions precedent set forth in Article
VI, the Agent will make such funds available to the Borrower at the
Payment Office.
(e) Notwithstanding subsection (a) and anything else to the
contrary set forth herein, a Revolving Lender shall not be required to
make available any portion of any Drawdown that will be used directly
and indirectly in, or result, directly or indirectly, in a Potentially
Hostile Acquisition, if the Revolving Lender is a Conflicted Lender
provided that a Lender will be deemed not to be a Conflicted Lender in
respect of any Drawdown unless the Lender gives notice to the Agent of
the Lender's status as a Conflicted Lender within one Business Day of
the notice to the Lender by the Agent of such Drawdown, provided
further that a Conflicted Lender that does not make available a
Drawdown that will be used directly or indirectly in, or result,
directly or indirectly, in a Potentially Hostile Acquisition shall
(notwithstanding any other provision of this Agreement) not be
entitled to vote in respect of any determination required by Majority
Lenders in connection with such Drawdown and the principal amount of
the Loans or the amount of the Commitment of such Conflicted Lender
shall be excluded in the determination of the Majority Lenders in such
connection. In respect of any Subsequent Drawdown(s) in respect of
which a previously Conflicted Lender is not a Conflicted Lender, the
portion of such Drawdown(s) to be made available by such Conflicted
Lender shall be allocated by the Agent so as to result, to the extent
possible, in the outstanding Loans of the Revolving Lenders, including
such Conflicted Lender, being in the same proportion as the aggregate
of all Revolving Lenders' Commitments constituted by such Revolving
Lender's Commitment.
(f) If the Agent receives notice from a Conflicted Lender prior to
the date of any Drawdown that such Lender's rateable portion of such
Drawdown will not be made available in reliance upon subsection
2.6(e), the portion of the Drawdown to be provided by each other
Revolving Lender shall be increased so as to equal the proportion of
the aggregate of all Revolving Lender's Commitments, excluding the
Commitment of the Conflicted Lender, constituted by such other
Revolving Lender's Commitment provided that, after giving effect to
the Drawdown, such Revolving Lender's Outstanding Amount does not
exceed such Revolving Lender's Commitment Amount.
2.7 Funding Reliance; Lender's Failure to Fund - Unless the Agent
shall have received notice from a Lender prior to any Drawdown Date that such
Lender's rateable portion of such
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Drawdown will not be made available as provided for in subsection 2.6(e), the
Agent may assume that each Lender will make available to the Agent its ratable
portion of any Drawdown requested in a Drawdown Notice on the date of such
Drawdown in accordance (other than an L/C Drawdown) with Section 2.6 and the
Agent may, in reliance upon such assumption, but shall not be obligated to,
make available to the Borrower on such date a corresponding amount. If and to
the extent any such Lender shall not have so made such rateable portion
available to the Agent and the Agent shall have so made such corresponding
amount available to the Borrower, such Lender and the Borrower severally agree
to pay or repay to the Agent (on the next Business Day following notice thereof
by the Agent to the Borrower) such corresponding amount together with interest
thereon, for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Agent, at (i) in the case
of the Borrower, the interest rate applicable at the time to Drawdowns
hereunder and (ii) in the case of such Lender, the Prime Rate and, on demand,
to indemnify the Agent against any cost or loss it may suffer or incur in
connection with or related to the Agent having made such amount available to
the Borrower prior to having received the corresponding amount. If such Lender
shall pay to the Agent such corresponding amount, such amount so paid shall
constitute such Lender's Advance as part of such Drawdown for purposes of this
Agreement.
2.8 Several Funding Obligations - The failure of any Lender to
make an Advance to be made by it as part of any Drawdown shall not relieve any
other Lender of its obligation, if any, hereunder to make its Advance on the
Drawdown Date, but no Lender shall be responsible for the failure of any other
Lender to make the Advance to be made by such other Lender on the Drawdown
Date.
2.9 Pro-Rata Treatment of Drawdowns -
(a) Each Drawdown shall be made available by each Lender and all
repayments and reductions in respect thereof shall be made and applied
in a manner so that the Drawdowns outstanding hereunder to each Lender
will, to the extent possible, thereafter be pro rata to the respective
Commitments of the Lenders. Subject to subsections 2.6(e) and (f),
the Agent is authorized by the Borrower and each Lender to determine,
in its sole and unfettered discretion, the portion of each Drawdown
and each type of Drawdown to be made available by each Lender and the
application of repayments and reductions of Loans to give effect to
the provisions of this Section provided that, no Lender shall, as a
result of any such determination, have Loans outstanding in an amount
which is in excess of the amount of its Commitment.
(b) In the event it is not practicable to allocate Bankers'
Acceptances to each Lender such that the aggregate amount of Bankers'
Acceptances required to be purchased by such Lender hereunder is in a
whole multiple of Cdn. $100,000, the Agent is authorized by the
Borrower and each Lender to make such allocation as the Agent
determines in its sole and unfettered discretion may be equitable in
the circumstances and, if the aggregate amount of such Bankers'
Acceptances is not a whole multiple of Cdn. $100,000, then the Agent
may allocate (on a basis considered by it to be equitable) the excess
of such Drawdown over the next lowest whole multiple of Cdn. $100,000
to one Lender, which shall purchase a Bankers'
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Acceptance with a face amount equal to the excess and having the same
term as the corresponding Bankers' Acceptances. In no event shall the
portion of the outstanding Loans of a Lender exceed the proportion of
the aggregate of all Lender's Commitments constituted by such Lenders'
Commitment by more than Cdn. $100,000 as a result of such exercise of
discretion by the Agent.
2.10 Restrictions on Drawdowns - Each Drawdown under the Facility
shall be subject to the following restrictions, as applicable:
(a) all Drawdowns shall be made on a Business Day;
(b) after giving effect to a Drawdown, the Outstanding Amount
shall not exceed the aggregate of the Commitment Amounts;
(c) no Drawdowns will be permitted if an Event of Default has
occurred and is continuing or (other than in the case of a Conversion
or Rollover, provided that, in the case of a Conversion or Rollover
into a Bankers' Acceptance Drawdown or Libor Drawdown, the maturity
date or the applicable Libor Interest Period shall not extend beyond
the earliest date upon which the event would constitute an Event of
Default) if an event has occurred and is continuing which with the
giving of notice, the passing of time, or both, would constitute an
Event of Default;
(d) Drawdowns shall be in Canadian Dollars or United States
Dollars as stipulated and at such time stipulated in the Drawdown
Notice duly provided by the Borrower to the Agent in respect thereof,
subject to the restrictions and limitations of this Agreement and upon
fulfilment of all conditions precedent to such Drawdown;
(e) each Drawdown by way of a Bankers' Acceptance Drawdown shall
be in a minimum principal amount of Cdn. $10,000,000 and additional
increments of integral multiples of Cdn. $1,000,000;
(f) each Drawdown by way of a Libor Drawdown shall be in a minimum
principal amount of U.S. $10,000,000 and additional increments of
integral multiples of U.S. $1,000,000;
(g) each Letter of Credit shall be in a minimum amount of Cdn.
$5,000,000 or U.S. $5,000,000, as the case may be;
(h) no Libor Drawdown, Bankers' Acceptance or Letter of Credit
issued pursuant to an L/C Drawdown shall have a maturity or expiry
date later than the Maturity Date or that is inconsistent with any
other obligation to repay the whole or any part of the principal
amount of Loans under this Agreement;
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(i) the obligation of any Lender to make any Libor Drawdown for
any period exceeding 6 months (including the Conversion of any other
Drawdown into a Libor Drawdown) is contingent upon its favourable
determination that sufficient U.S. Dollars are available to it to fund
such Libor Drawdown for such period;
(j) the amount of Letters of Credit Loans at any time shall not
exceed U.S. $100,000,000; and
(k) no Letter of Credit shall have an expiry date of more than one
year from the date of issuance of such Letter of Credit.
2.11 Conversion Option - Subject to the provisions of this
Agreement, the Borrower may, by giving to the Agent a Drawdown Notice in
accordance with Section 2.4:
(a) convert all or any portion of a Prime Rate Drawdown into a
Base Rate Drawdown, Libor Drawdown or Bankers' Acceptance Drawdown;
(b) convert all or any portion of a Base Rate Drawdown into a
Prime Rate Drawdown, Libor Drawdown or Bankers' Acceptance Drawdown;
(c) on the last day of the Libor Interest Period, convert all or
any portion of such Libor Drawdown into a Prime Rate Drawdown, Base
Rate Drawdown or Bankers' Acceptance Drawdown; or
(d) on the maturity date of a Bankers' Acceptance Drawdown,
convert all or any portion of such Bankers' Acceptance Drawdown into a
Prime Rate Drawdown, Base Rate Drawdown or Libor Drawdown.
In respect of any Conversion which effects a change in the currency of
such Drawdown from Canadian Dollars to U.S. Dollars, or vice versa, repayment
shall be made in the currency of the Drawdown being converted and the
Conversion shall be made at the Exchange Rate on the date of such Conversion
provided that for the purposes of determining compliance with subsection
2.10(b) in respect of any Conversion which effects a change in the currency of
such Drawdown from Canadian Dollars to U.S. Dollars or vice versa, the
Equivalent Amount of Canadian Dollars shall be determined as of the date of the
Drawdown Notice.
In the case of a Conversion of a Prime Rate Drawdown, Base Rate
Drawdown or Libor Drawdown into a Bankers' Acceptance Drawdown, the Bankers'
Acceptance Proceeds shall be retained by the Agent to be applied to the
principal amount of the converted Drawdown and the Borrower shall pay to the
Agent on the date of such Conversion an amount equal to the difference between
the principal amount at maturity of the Bankers' Acceptance and the Bankers'
Acceptance Proceeds therefrom.
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2.12 Rollovers -
(a) The Borrower may roll over any Libor Drawdown (on the last day
of the applicable Libor Interest Period) into another Libor Drawdown
or Bankers' Acceptance Drawdown (on the maturity of the applicable
Bankers' Acceptance) into another Bankers' Acceptance Drawdown, by
giving the Agent the appropriate Drawdown Notice pursuant to Section
2.4.
(b) The Bankers' Acceptance Proceeds of the new Bankers'
Acceptance shall be retained by the Agent to be applied by it to the
principal amount of the maturing Bankers' Acceptance and the Borrower
shall pay to the Agent, on the maturity date of the maturing Bankers'
Acceptance an amount equal to the difference between the principal
amount at maturity of the maturing Bankers' Acceptance and the
Bankers' Acceptance Proceeds of the replacement Bankers' Acceptance.
(c) Notwithstanding any other provision of this Agreement, if the
Borrower fails to deliver such a Drawdown Notice to the Agent in
respect of a Libor Drawdown (or pay to the Agent an amount equal to
such Libor Drawdown on or before the expiration of such Libor Interest
Period as applicable) or in any case, during the continuance of an
Event of Default, then the relevant amount of the Libor Drawdown
shall, at the expiration of such Libor Interest Period, be deemed to
be converted into a Base Rate Drawdown, in an amount equal to the
principal amount of such Libor Drawdown.
(d) Notwithstanding any other provision of this Agreement, if the
Borrower fails to deliver such a Drawdown Notice to the Agent in
respect of a Bankers' Acceptance Drawdown (or pay to the Agent an
amount equal to the principal amount of the maturing Bankers'
Acceptance on or before the maturity date thereof), then the maturing
Bankers' Acceptance paid by the Agent shall be deemed, upon such
payment, to be converted into a Prime Rate Drawdown in an amount equal
to the face amount of such maturing Bankers' Acceptance.
2.13 Evidence of Indebtedness - The Agent shall open and maintain
on its books at the Payment Office, accounts in respect of the Facility to
evidence the Loans under the Facility and all other amounts owing by the
Borrower to the Lenders or the Agent hereunder. The Agent shall enter in the
foregoing accounts details of all amounts from time to time owing, paid or
repaid by the Borrower hereunder. The information entered in the foregoing
accounts shall constitute prima facie evidence of the obligations of the
Borrower to the Lenders and the Agent hereunder with respect to the Loans and
all other amounts owing by the Borrower to the Lenders or the Agent hereunder.
The Borrower shall, on reasonable notice to the Agent, be entitled to obtain
from the Agent extracts of all entries made in such accounts.
2.14 Netting - On any transaction date, the Agent shall be entitled
to net amounts payable on such date by the Agent to a Lender against amounts
payable on such date by such Lender to the Agent, in connection with
transactions conducted under this Agreement in the same type of Advance, for
the account of the Borrower. Similarly, on any transaction date, the Borrower
hereby
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authorizes each Lender to net amounts payable on such date by such Lender to
the Agent, for the account of the Borrower, against amounts payable on such
date by the Borrower to such Lender under this Agreement in accordance with the
Agent's calculations.
ARTICLE III
FURTHER PROVISIONS RELATING TO
LIBOR DRAWDOWNS, BANKERS'
ACCEPTANCES AND LETTERS OF CREDIT
3.1 Effects of Change of Law - If, at any time, a Lender
determines in good faith, which determination shall be final, conclusive and
binding upon the Borrower, absent manifest error, that: (a) by reason of
circumstances affecting financial markets inside or outside the United States,
deposits of U.S. Dollars are unavailable to such Lender in London; (b) adequate
and fair means do not exist for ascertaining the applicable interest rate on
the basis provided in the definition of Libor Rate; (c) the making or
continuation of any Libor Drawdown has been made impracticable: (i) by the
occurrence of a contingency which materially and adversely affects the funding,
in the London interbank market generally, of Libor Loans at any interest rate
computed on the basis of the Libor Rate; or (ii) by reason of a change since
the date of this Agreement in any Applicable Law by any Government Authorities
charged with the administration thereof affecting such Lender or any relevant
financial market, the Libor Rate shall no longer represent the effective cost
to such Lender of deposits to fund Libor Drawdowns; or (d) any change to
present Law or the enactment of any future Law or any change therein or in the
interpretation or application thereof by any Government Authorities charged
with the administration thereof or by any court, has made it unlawful for such
Lender to make or maintain or to give effect to its obligations in respect of
Libor Drawdowns as contemplated hereby, then:
(a) the right of the Borrower to request Libor Drawdowns from such
Lender shall be suspended until such Lender determines that the
circumstances causing such suspension no longer exist;
(b) if any affected Libor Drawdown from such Lender is not yet
outstanding, any applicable outstanding Advance Notice shall be deemed
to be an Advance Notice for a Base Rate Advance in the same amount;
(c) if any Libor Drawdown from such Lender is outstanding at any
time when the right of the Borrower to request Libor Drawdowns from
such Lender is suspended, it and all other Libor Drawdowns from such
Lender shall become, on the last day of the then current Libor
Interest Period applicable thereto (or on such earlier date as may be
required to comply with any Applicable Law), a Base Rate Drawdown and
shall remain outstanding as a Base Rate Drawdown, until such time as
such Lender determines that the circumstances causing such suspension
no longer exist; and
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(d) upon a determination by such Lender that the circumstances
causing the suspension of Libor Loans no longer exist, each Base Rate
Drawdown outstanding as a result of subsection 3.1(c) may be
converted, subject to availability, by the Borrower in accordance
herewith to a Libor Drawdown maturing on the last day of any Libor
Interest Period for any outstanding Libor Drawdowns or, if no Libor
Drawdowns are then outstanding, at any time by giving the Agent the
appropriate Drawdown Notice pursuant to Section 2.4.
3.2 Illegality
(a) If after the date of this Agreement any change occurs in any
Applicable Law, or in the interpretation or application thereof by any
court or by any Government Authority or other authority or entity
charged with the administration thereof, which makes it unlawful for
any Lender (in its opinion, acting reasonably and in good faith) to
make, fund or maintain any part of the Facility or to give effect to
its obligations in respect of any Drawdowns thereunder, the Lender
may, by written notice thereof to the Borrower and the Agent, declare
its obligations under this Agreement to be terminated with respect to
such affected part of the Facility (which notice shall be final,
conclusive and binding upon the Borrower, absent manifest error),
whereupon the same shall forthwith terminate.
(b) Any such notice shall be accompanied by a certificate of an
officer of the Lender identifying in reasonable detail the event or
condition which makes it unlawful for the Lender to lend or allow to
remain outstanding such portions of the Facility or any Drawdowns
thereunder (such notice to be final, conclusive and binding upon the
Borrower, absent manifest error).
(c) The Borrower shall: (i) prepay to the Lender within the
greater of: (A) ten Business Days after such notice; and (B) the time
required by such law, (or at the end of such longer period as the
Lender at its discretion has agreed) the principal amount of all
Drawdowns so affected together with accrued interest and such other
amounts which may be payable hereunder as a result of such prepayment
(excluding any cost associated with the repayment by the Borrower of a
Libor Drawdown other than at the expiration of the applicable Libor
Interest Period); or (ii) prior to the date of such required
repayment, replace such Lender with one or more Eligible Lenders (in
respect of whom the Term Out Date shall be the same date as the Term
Out Date with respect to the Commitment of the Lender being replaced).
(d) If any such change shall only affect a portion of the Lender's
obligations under this Agreement which is, in the reasonable opinion
of the Lender, severable from the remainder of this Agreement so that
the remainder of this Agreement may be continued in full force and
effect without otherwise affecting any of the obligations of the
Lender or the Borrower hereunder in respect of such Lender or under
any of the other documents contemplated hereby, the Lender shall only
declare its obligations under the affected portion so terminated.
(e) In the event that the provisions of this Section 3.2 are, or
threaten to become applicable in respect of any Lender, such Lender
shall use its reasonable efforts (at the
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expense of the Borrower) to change its Lending Office or take such
other action as may be reasonable in the circumstances to eliminate
the applicability of this Section 3.2 to such Lender.
3.3 Bankers' Acceptances
(a) Delivery of Blank Drafts - To facilitate the acceptance of
Bankers' Acceptances pursuant to this Agreement the Borrower shall,
upon the execution of this Agreement and from time to time as required
by the Lenders, provide to the Lenders drafts duly endorsed in blank
by the Borrower in quantities sufficient for the Lenders to fulfil
their obligations hereunder. None of the Agent and the Lenders shall
be responsible or liable for any failure to issue a Bankers'
Acceptance as required hereunder if the cause of such failure is, in
whole or in part, due to the failure of the Borrower to provide
requested drafts to the Lender on a timely basis, nor shall any of the
Agent and the Lenders be liable for any damage, loss or other claim
arising by reason of any loss or improper use of any such draft except
a loss or improper use arising by reason of the failure of the Agent
or the Lender, as the case may be, to exercise the same degree of care
with respect to such draft as it exercises for its own securities.
(b) Documentation - Prior to any Bankers' Acceptance Drawdown
being made available, the Borrower shall have executed and delivered
to the Agent the Bankers' Acceptance Undertaking.
(c) Maturing Bankers' Acceptances - In anticipation of the
maturity of each Bankers' Acceptance issued hereunder, the Borrower
may either:
(i) deliver to the Agent a Drawdown Notice requesting the
Conversion or Rollover of such Bankers' Acceptance pursuant to
the provisions of Section 2.11 or 2.12, respectively; or
(ii) not later than 10:00 a.m. (Calgary time) on the
maturity date of the relevant Bankers' Acceptance, pay to the
Agent an amount equal to the principal amount of the maturing
Bankers' Acceptance.
In the event the Borrower shall fail to so notify the Agent of a
Rollover or Conversion or shall fail to make such payment, as the case
may be, the face amount of the maturing Bankers' Acceptance shall be
converted into a Prime Rate Drawdown on the relevant maturity date.
(d) Discount Rate - The Agent shall advise the Borrower, as soon
as practicable but in any event prior to 10:30 a.m. (Calgary time) on
the date of any Bankers' Acceptance Drawdown, of the Reference BA
Discount Rate applicable to each Bankers' Acceptance thereunder.
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3.4 Issuance of Letters of Credit
(a) Form of Letters of Credit - Any Letter of Credit to be issued
by the Lenders under the Facility shall be in such form as may be
agreed upon by the Borrower and the relevant issuing Lender, each
acting reasonably.
(b) Documentation - Prior to any L/C Drawdowns, the Borrower shall
have executed and delivered the Letter of Credit Documentation to the
issuer of the relevant Letter of Credit.
(c) Prepayment - The Borrower may, at any time, and shall, if the
repayment or required repayment of any of the Loans would require the
reduction of L/C Drawdowns, surrender to the Agent any Letter(s) of
Credit having an aggregate remaining face amount at least equal to the
required reduction to the Agent or, deposit cash with the Agent for
the account of each of the Lenders rateably in accordance with the
Letters of Credit Loans outstanding to such Lender, in an
interest-bearing collateral cash account of the Borrower with the
Agent, with interest at the Agent's prevailing rate for similar
deposits, in an amount equal to the required reduction. Upon such
surrender or receipt of such cash, the L/C Drawdowns outstanding under
the Facility shall be deemed to have been reduced by the aggregate
remaining face amount of the Letters of Credit so surrendered or the
amount of such cash so deposited together with interest thereon as
applicable.
ARTICLE IV
PAYMENT OF INTEREST AND OTHER FEES
4.1 Interest on Prime Rate Drawdowns - The Borrower shall pay
interest in Canadian Dollars on the principal amount of each Prime Rate
Drawdown (with, subject to Section 4.7, interest on overdue interest at the
same rate) at a nominal rate per annum equal to the Prime Rate in effect from
time to time plus the incremental number of Basis Points set forth in respect
of Prime Rate Drawdowns in Section 4.6.
Interest on each Prime Rate Drawdown shall accrue daily on the outstanding
principal balance thereof and shall be calculated and payable in arrears:
(a) on each successive Interest Payment Date, for the period then
ending;
(b) in the case of a prepayment of part or all of a Prime Rate
Drawdown, on the date of such prepayment, with respect to interest
accrued on the amount of principal being prepaid;
(c) in the case of amounts repaid pursuant to Section 5.2, 5.3 or
5.5, on the date of such repayment, with respect to interest accrued
on the amount of principal of any Prime Rate Drawdown being repaid;
and
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(d) on the date that all amounts owing hereunder are repaid in
full, whether on demand, by reason of acceleration or otherwise;
on the basis of the actual number of days for which a particular principal
amount is outstanding computed on the basis of a year of 365 days, or 366 days
in the case of a leap year. Interest on overdue interest on Prime Rate
Drawdowns shall be payable on demand. Changes in the Prime Rate shall cause an
immediate and automatic adjustment of the interest rate applicable to each
Prime Rate Drawdown as and from the effective date of such change without the
necessity of any notice to the Borrower, such notice being hereby expressly
waived by the Borrower. Interest on the Prime Rate Drawdowns shall be payable
in accordance with the foregoing after as well as before demand, default,
maturity and judgment.
4.2 Interest on Base Rate Drawdowns - The Borrower shall pay
interest in United States Dollars to the Agent on the principal amount of each
Base Rate Drawdown (with, subject to Section 4.7, interest on overdue interest
at the same rate) at a nominal rate per annum equal to the Base Rate in effect
from time to time plus the incremental number of Basis Points set forth in
respect of Base Rate Drawdowns in Section 4.6.
Interest on each Base Rate Drawdown shall accrue daily on the
outstanding principal balance thereof and shall be calculated and payable in
arrears:
(a) on each successive Interest Payment Date, for the period then
ending;
(b) in the case of a prepayment of part or all of a Base Rate
Drawdown, on the date of such prepayment, with respect to interest
accrued on the amount of principal being prepaid;
(c) in the case of amounts repaid pursuant to Section 5.2, 5.3 or
5.5, on the date of such repayment with respect to interest accrued on
the amount of the principal of any Base Rate Drawdown being repaid;
and
(d) on the date that all amounts owing hereunder are repaid in
full, whether on demand, by reason of acceleration or otherwise;
on the basis of the actual number of days for which a particular principal
amount is outstanding, computed on the basis of a year of 365 days or 366 days
in the case of a leap year. Interest on overdue interest on Base Rate
Drawdowns shall be payable on demand. Changes in the Base Rate shall cause an
immediate and automatic adjustment of the interest rate applicable to each Base
Rate Drawdown as and from the effective date of such change without the
necessity of any notice to the Borrower, such notice being hereby expressly
waived by the Borrower. Interest on the Base Rate Drawdowns shall be payable
in accordance with the foregoing after as well as before demand, default,
maturity and judgment.
4.3 Interest on Libor Drawdowns - The Borrower shall pay interest
in United States Dollars on the principal amount of each Libor Drawdown for the
Libor Interest Period applicable
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thereto at a nominal rate per annum equal to the Libor Rate applicable to such
Libor Drawdown plus the incremental number of Basis Points set forth in respect
of Libor Drawdowns in Section 4.6.
Interest on each Libor Drawdown shall accrue daily on the amount of such Libor
Drawdown and shall be calculated and payable in arrears on each successive
Interest Payment Date applicable to a Libor Drawdown, on the basis of the
actual number of days for which such Libor Drawdown is outstanding, computed on
the basis of a year of 360 days. Interest on each Libor Drawdown shall be
payable in accordance with the foregoing after as well as before demand,
default, maturity and judgment.
4.4 Stamping Fees on Bankers' Acceptances - The Borrower shall
pay, in respect of each draft accepted by the Lenders as a Bankers' Acceptance,
a stamping fee equal to a nominal rate per annum equal to the number of Basis
Points set forth in respect of Bankers' Acceptances in Section 4.6, in each
case, of the face amount of such Bankers' Acceptance and calculated over the
term of such Bankers' Acceptance, such stamping fee to be payable on the date
of issuance of the Bankers' Acceptance.
4.5 Fees for Letters of Credit - The Borrower shall pay with
respect to each Letter of Credit issued hereunder, in addition to any fee
payable under Section 2.6, a fee equal to a nominal rate per annum equal to the
number of Basis Points set forth in respect of Letters of Credit in Section
4.6, calculated on the face amount of the relevant Letter of Credit over the
term of the Letter of Credit, such fee to be payable at the time of issuance.
If any Letter of Credit is cancelled or drawndown prior to expiration of its
term, the fee applicable to the remaining term thereof shall be refunded to the
Borrower.
4.6 Incremental Interest and Fees - Until, pursuant to Section
5.2, the aggregate of the Lenders' Commitment Amounts and principal amount of
the Loans made by the Lenders under the Facility has been reduced to U.S.
$500,000,000, the applicable Basis Points or incremental Basis Points payable
in respect of Loans shall be as set forth below:
Prime Rate Drawdowns 0 bp
(Prime Rate plus)
Base Rate Drawdowns 0 bp
(Base Rate plus)
Bankers' Acceptances 87.5 bp
(Stamping Fee)
LIBOR Drawdowns 87.5 bp
(Libor Rate plus)
Letters of Credit 87.5 bp
Commitment Fee 37.5 bp
Thereafter, the applicable Basis Points or incremental Basis Points
payable in respect of Loans shall be as set forth below in the column setting
forth the lowest of the two highest ratings
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assigned the Borrower by Standard and Poor's, ▇▇▇▇▇'▇, DBRS and CBRS provided
that one of the two ratings has been assigned by Standard and Poor's or
▇▇▇▇▇'▇.
Standard and Poor's BBB+ or BBB BBB- BB+ BB or
Higher Lower
▇▇▇▇▇'▇ Baa1 or ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ or
Higher Lower
DBRS BBB (high) or BBB BBB(low) BB (high) BB or
Higher Lower
CBRS B++ (high) or B++ B++ (low) B+ (high) B+ or
Higher Lower
Interest Rates and Fees
Prime Rate Drawdowns
(Prime Rate plus) 0 ▇▇ ▇ ▇▇ ▇ ▇▇ ▇ ▇▇ ▇ bp
Base Rate Drawdowns
(Base Rate plus) 0 ▇▇ ▇ ▇▇ ▇ ▇▇ ▇ ▇▇ ▇ bp
Bankers' Acceptances
(Stamping Fee) ▇▇ ▇▇ ▇▇ ▇▇ ▇▇ bp ▇▇ ▇▇ ▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
(▇▇▇▇▇ Rate plus) ▇▇ ▇▇ ▇▇ ▇▇ ▇▇ ▇▇ ▇▇ ▇▇ ▇▇ ▇▇
Letters of Credit ▇▇ ▇▇ ▇▇ ▇▇ ▇▇ bp 65 bp 75 bp
Commitment Fee ▇ ▇▇ ▇ ▇▇ ▇▇ ▇▇ ▇▇.▇ bp 25 bp
4.7 Interest on Unpaid Costs and Expenses - Unless the payment of
interest is otherwise specifically provided for herein, where the Borrower
fails to pay to the Agent any amount required to be paid by it to the Agent
hereunder (including unpaid interest), the Borrower shall pay interest on such
unpaid amount from the time such amount is due until such amount is paid in
full at a nominal rate per annum, equal to the Prime Rate in effect from time
to time plus 2% with respect to amounts required to be paid by the Borrower in
Canadian Dollars, and at a nominal rate per annum, equal to the Base Rate in
effect from time to time plus 2% with respect to amounts required to be paid by
the Borrower in U.S. Dollars, such interest to be computed on the basis of a
year of 365 days or 366 days in the case of a leap year and to be calculated
and (to the maximum extent permitted by Applicable Law) compounded monthly on
each Interest Payment Date and to be payable on demand as well after as before
default, maturity and judgment, with interest on any unpaid interest at the
same rate.
4.8 Annual Rates of Interest - For the purposes of the Interest
Act (Canada), whenever interest payable pursuant to this Agreement is
calculated on the basis of a period other than a calendar year (the "Interest
Period"), each rate of interest determined pursuant to such calculation
expressed as an annual rate is equivalent to such rate as so determined
multiplied by the actual number of days in the calendar year in which the same
is to be ascertained and divided by the number of days in the Interest Period.
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4.9 Commitment Fee
(a) Calculation and Payment - Commencing on the Effective Date,
the Borrower shall pay to the Agent a commitment fee in U.S. Dollars
equal to a nominal rate per annum set forth in respect of the
Commitment Fee in Section 4.6 (based on a 365 day year, or 366 days in
the case of a leap year) on the undrawn portion of the Facility, such
fee to be calculated quarterly in arrears on the daily undrawn portion
of the Facility, to accrue to and including the last day of each
Fiscal Quarter to be invoiced by the Agent to the Borrower and to be
paid quarterly on or before the third Business Day of the next
succeeding Fiscal Quarter following receipt of such invoice.
(b) Calculation of Undrawn Portion - The undrawn portion of the
Facility shall be calculated by deducting the Outstanding Amount from
the aggregate of the Commitment Amounts.
4.10 Limitation on Interest - Notwithstanding any other provisions
of this Agreement or any other document entered into in connection with this
Agreement, the Borrower shall not be obliged to make any payments of interest
or other amounts payable to the Agent hereunder or under any other document
entered into in connection with this Agreement in an amount or rate equal to or
in excess of that which would be prohibited by law or would result in the
receipt by the Lenders of interest at a criminal rate (as the terms "interest"
and "criminal rate" are defined under the Criminal Code (Canada)) or which
would contravene any local usury laws which may be applicable to any
obligations of the Borrower to the Lenders or the Agent under or in connection
with this Agreement.
4.11 Increased Costs - If, after the Effective Date, there is
adopted any Applicable Law, any change therein or any change in the
interpretation or application thereof by any court or by any Government
Authority or other authority or entity charged with the administration thereof,
whether or not having the force of law, which:
(a) subjects any Lender to any Taxes or changes the basis of
taxation, or increases any existing Taxes, on payments of principal,
interest or other amounts payable by the Borrower to the Lender under
this Agreement (except for Taxes on the overall net income or capital
of the Lender);
(b) imposes, modifies or deems applicable any reserve, cash
margin, special deposit or similar requirements against assets held
by, or deposits in or for the account of or loans by or any other
acquisition of funds by the relevant funding office of any Lender; or
(c) imposes on any Lender or any Person controlling such Lender a
requirement to maintain or allocate additional capital in relation to
the Facility;
(other than as a result of a change in the credit rating of the Borrower) in a
manner uniform with other financial institutions listed in the same Schedule to
the Bank Act (Canada) as the Lender if such other financial institutions were
substituted for the Lender hereunder and the result of any of the
45
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foregoing is, in the opinion of such Lender (acting reasonably and in good
faith), to increase the cost to such Lender of making or maintaining any
Drawdown or reduce the income receivable by such Lender in respect of any
Drawdown by an amount which is material, then upon such Lender giving written
notice thereof, from time to time, to the Agent and the Borrower (such notice
to set out in reasonable detail the facts giving rise to and a summary
calculation of, such increased cost or reduced income and to be final,
conclusive and binding upon the Borrower, absent manifest error), the Borrower
shall pay to such Lender, not later than five Business Days after such notice,
that amount which shall compensate such Lender for such additional cost or
reduction in income (arising to or incurred by the Lender not more than 90 days
prior to the date of such notice) and thereafter on each issuance of a Bankers'
Acceptance and date for payment of fees in respect of Letters of Credit and
Interest Payment Date, in all other cases. For greater certainty, the Borrower
shall not be required to compensate any Lender for any withholding taxes which
the Borrower is required to withhold and remit in respect of any principal,
interest or other amount paid or payable by the Borrower to any Lender in
accordance with the terms of this Agreement unless such obligation arises as a
result of an action by the Borrower.
4.12 Waiver of Judgment Interest Act (Alberta) - To the extent
permitted by Applicable Law, the provisions of the Judgment Interest Act
(Alberta) shall not apply to this Agreement and are hereby expressly waived by
the Borrower.
ARTICLE V
REPAYMENTS AND PREPAYMENTS
5.1 Amounts Under Facility May be Reborrowed - Subject to Section
5.2 and to the other terms and conditions of this Agreement and as long as
there shall not have occurred and be continuing an Event of Default or any
event which with the giving of notice, the passing of time, or both, would
constitute an Event of Default, any amounts borrowed under the Facility and
repaid from time to time may be reborrowed during the Revolving Period.
5.2 Mandatory Facility Reductions
(a) Until such time as the aggregate of the Available Facility
Amount and the Outstanding Amount has been permanently reduced to U.S.
$500,000,000, the Borrower shall make repayments and permanent
reductions in the Available Facility Amount and shall repay to each of
the Lenders, rateably according to the proportion of the aggregate of
all Revolving Lenders' Commitment Amounts constituted by such
Revolving Lender's Commitment Amount, the aggregate of all of the
following amounts received on or prior to April 30, 1998: (A) the Net
Proceeds from the issuance of securities by the Borrower (other than
for proceeds received by the Borrower from the issuance of shares
pursuant to the exercise of options under the existing employee and
director stock option plans of the Borrower, except to the extent that
the proceeds of such exercises aggregate at least Cdn. $5,000,000 in
any seven day period, and proceeds from the issuance of senior and
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subordinated debt securities); and (B) 50% of the sum of the Net
Proceeds from asset sales by the Borrower and the Restricted
Subsidiaries (except to the extent such Restricted Subsidiaries do not
make such payments because they are precluded from doing so pursuant
to the terms of their Funded Debt) and from secondary distributions of
securities by the Borrower or its Subsidiaries, including without
limitation the shares in the capital of Gulf Indonesia Resources
Limited held directly or indirectly by the Borrower. For greater
certainty, no prepayments will be required to be made by the Borrower
in respect of Net Proceeds attributable to (i) the sale of accounts
receivable under the Receivables Purchase and Sale Agreement dated
November 29, 1994, as amended, among the Borrower, Corporate
Receivables Trust and Toronto Dominion Securities Inc., or any
replacement of such arrangement; (ii) the surrender, exchange, lease,
sublease or farmout of any property or assets in the ordinary course
of business; (iii) the sale of production of hydrocarbons or
by-products in the ordinary course of business; (iv) the sale or other
disposition of property or assets not exceeding U.S. $1,000,000 in
respect of any single transaction or related series of transactions
and in an aggregate amount not exceeding U.S. $5,000,000 in any fiscal
year; and (v) sales or other dispositions of assets or property from
one member of the Restricted Group to another member of the Restricted
Group. Such prepayments shall be made within five Business Days of
completion of each such transaction (except to the extent that
prepayments in respect of Libor Loans could not be made at such time
in accordance with the provisions of this Agreement, in which case
such prepayment or the balance thereof as applicable shall be made at
the expiration of the applicable LIBOR Interest Period). In addition
to the foregoing, Net Proceeds which are required to be applied to
make prepayments and permanent reductions in the Facility Amount, the
Borrower may apply such other Acceptable Proceeds (as hereinafter
defined) as the Borrower may elect to make prepayments and permanent
reductions in the Facility Amount. The Net Proceeds required to be
used and any other Acceptable Proceeds for repayments and permanent
reductions under this subsection 5.2(a) shall permanently reduce the
aggregate of all Revolving Lenders' Commitment Amounts by the amount
of such Net Proceeds or other Acceptable Proceeds, as the case may be,
and the Commitment Amount for each Revolving Lender shall be
permanently reduced by the repayment required, or permitted, to be
made by the Borrower to each Lender pursuant to the terms of this
subsection 5.2(a);
(b) If, pursuant to subsection 5.2(a), the Available Facility
Amount together with the aggregate Outstanding Amount has not been
reduced to U.S. $500,000,000 by April 30, 1998, the Borrower shall
make a prepayment and permanent reduction in the Facility Amount and
shall repay with Acceptable Proceeds (as hereinafter defined), to each
of the Lenders, rateably according to the proportion of the aggregate
of all Revolving Lenders' Outstanding Amounts constituted by such
Revolving Lender's Outstanding Amount, the principal amount of the
Loans made by such Lenders under the Facility by payment on April 30,
1998, of that amount or amounts as will reduce the aggregate amount of
such Loans on April 30, 1998 to U.S. $500,000,000 and on such date the
aggregate of all Revolving Lenders' Commitment Amounts shall be
permanently reduced to U.S. $500,000,000 and the Commitment Amount
for each Revolving Lender shall be permanently reduced by the
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repayment required to be made by the Borrower to each Lender pursuant
to the terms of this subsection 5.2(b).
For the purpose of this Section 5.2, "Acceptable Proceeds" means up to
100% of the proceeds from the issuance of securities by the Borrower
(other than senior or subordinated Funded Debt unless Lenders who have
at least 80% of the Commitments otherwise agree), from asset sales by
the Borrower and its Subsidiaries, from secondary distributions of
securities by the Borrower and its Subsidiaries and from such other
proceeds as Lenders who have at least 80% of the Commitments may
agree.
5.3 Repayment under the Facility after Term Out Date - The
Borrower shall repay to each of the Lenders the principal amount of the Loans
made by such Lender under the Facility by payment, on each of the dates set
forth below, of that amount (in U.S. Dollars) as will reduce the principal
amount of such Loans outstanding on the date of such payment (denominated in
U.S. Dollars) to that proportion of the principal amount of such Loans
outstanding on the Term Out Date set forth opposite the date of such payment:
Proportion of the principal amount
of such Loans outstanding
Payment Date on the Term Out Date
-------------------------------------------------------------------------
- 6 month anniversary of the 7/8
Term Out Date
- 12 month anniversary of the 6/8
Term Out Date
- 18 month anniversary of the 5/8
Term Out Date
- 24 month anniversary of the 4/8
Term Out Date
- 30 month anniversary of the 3/8
Term Out Date
- 36 month anniversary of the 2/8
Term Out Date
- 42 month anniversary of the 1/8
Term Out Date
- Maturity Date 0
together with any accrued and unpaid interest at the Maturity Date payable on
the Maturity Date. On and after the Term Out Date, any repayment made by the
Borrower in respect of Loans in the Term Period shall reduce each Lender's
Commitment Amount.
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5.4 Voluntary Prepayments -
(a) The Borrower may at any time during the Term Period upon not
less than three Business Days prior notice but without premium or
penalty, prepay to the Nonrevolving Lenders in whole or in part, any
Prime Rate Drawdown or Base Rate Drawdown together with accrued
interest thereon to the date of such prepayment. Any such prepayment
of the Facility shall be applied to scheduled repayments thereof in
the order requested by the Borrower.
(b) If any Libor Drawdown or Bankers' Acceptance Drawdown is
repaid on other than the expiration of the applicable Libor Interest
Period or the maturity of the Bankers' Acceptance, respectively, the
Borrower shall, within three Business Days after notice from the
Agent, pay to the Agent for the account of each Lender rateably in
accordance with the portion of the Libor Drawdown or Bankers'
Acceptance Drawdown outstanding to such Lender:
(i) in the case of the prepayment of any Libor Drawdown,
all reasonable loss (excluding loss of profit) or
expense incurred as a result of such prepayment
including, without limitation, any cost or expense
incurred by reason of the liquidation or
re-employment in whole or in part of deposits or
other funds required by the Lenders to fund any Libor
Drawdown; and
(ii) in the case of the prepayment of any Bankers'
Acceptance Drawdown, the amount determined by the
Agent acting reasonably, to be the amount required to
be paid on the date of such prepayment to yield to
the Lenders the face amount of the Bankers'
Acceptance to be prepaid on the maturity thereof.
(c) On and after the Term Out Date, any prepayment made by the
Borrower in respect of the Loans in the Term Period shall rateably
reduce each Lender's Commitment Amount.
5.5 Currency Fluctuations - Notwithstanding any other provision of
this Agreement, if any Loan outstanding is denominated in Cdn. Dollars the
Agent shall have the right to calculate the Outstanding Amount for all purposes
including making a determination from time to time of the available undrawn
portion of the Facility. If following such calculation, the Agent determines
that the Outstanding Amount is greater than 105% of the Loans permitted hereby
to be outstanding at such time, then the Agent shall so advise the Borrower and
the Borrower shall repay, on the later of three Business Days after such advice
and the next applicable Interest Payment Date immediately following such date
of calculation, an amount sufficient to eliminate the excess over and above the
aggregate amount of the Loans permitted hereby to be outstanding at such time,
together with all accrued interest on the amount so paid.
5.6 Voluntary Reduction of Commitments - The Borrower may at any
time, without penalty, upon that number of Business Days prior notice to the
Agent as would be applicable to a Prime Rate Drawdown of like amount, terminate
in whole or reduce rateably (in accordance with
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the Lenders' respective Commitments) in part the unutilized portions of the
respective Commitments of the Lenders provided that each partial reduction
shall be in the aggregate amount of U.S. $10,000,000 (or such other amounts as
the Agent may approve) and additional increments of integral multiples of U.S.
$1,000,000. All accrued Commitment Fees on the aggregate amount by which such
Commitments are terminated or reduced shall be due and payable by the Borrower
on the effective date of such termination or reduction. All terminations or
reductions of the Commitments shall be rateable among the Lenders in proportion
to their respective Commitment Amounts and shall be permanent.
ARTICLE VI
CONDITIONS PRECEDENT TO DRAWDOWNS
6.1 Conditions Precedent to First Drawdown - The obligation of the
Lenders to advance the first Drawdown of the Facility is subject to the
condition precedent that the Agent shall have received on or before the
Drawdown Date of the proposed first Drawdown all of the following in form and
substance satisfactory to the Agent and the Agent's counsel (in each case,
acting reasonably):
(a) a certified copy of all documentation with respect to the
authority of the Borrower to execute, deliver and perform this
Agreement;
(b) the opinion of legal counsel to the Borrower, substantially in
the form attached hereto as Schedule H;
(c) the opinion of legal counsel to the Agent and the Lenders
substantially in the form attached hereto as Schedule I;
(d) a certificate of a senior officer of the Borrower stating that
as of such date, all of the representations and warranties made by the
Borrower herein are true and correct and that no event has occurred
which constitutes or would constitute, with the giving of notice, the
passing of time, or both, an Event of Default; and
(e) a Drawdown Notice for an Advance of the amount to fully repay,
upon the first Drawdown Date, all amounts owing by the Borrower under
the Existing Acquisition Facility together with:
(i) an irrevocable direction to apply such Advance to the
repayment of the amounts owing by the Borrower under the
Existing Acquisition Facility; and
(ii) an irrevocable notice from the Borrower terminating
in whole the Existing Acquisition Facility effective on such
first Drawdown Date.
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6.2 Conditions Precedent to All Drawdowns - The obligations of the
Lenders to advance any Drawdown of the Facility shall, in addition to any other
requirements of this Agreement, be subject to the following conditions
precedent:
(a) the Agent shall have received, if applicable, a proper and
timely Drawdown Notice;
(b) there shall not have occurred and be continuing any event
which constitutes or (other than in the case of a Conversion or
Rollover, provided, that in the case of a Conversion or Rollover into
a Bankers' Acceptance Drawdown or Libor Drawdown, the maturity date or
period shall not extend beyond the earliest date upon which such event
would constitute an Event of Default) would constitute, with the
giving of notice, the passing of time, or both, an Event of Default;
(c) each of the representations and warranties made in subsections
7.1(a), (c), (d), (e), (g) and (p) shall be true and correct (and the
acceptance by the Borrower of such Drawdown shall be deemed to
constitute a further representation and warranty by the Borrower that
such statements are true and correct) as if given on, and with effect
as of, the Drawdown Date other than with respect to a Conversion or
Roll-over; and
(d) such other documentation as the Agent may reasonably request
in respect of any Letter of Credit.
6.3 Waiver - The conditions set forth in Sections 6.1 and 6.2 are
provided for the sole benefit of the Lenders and may, with the prior consent of
Majority Lenders, be waived by the Agent, in whole or in part (with or without
terms or conditions) in respect of any Drawdown without prejudicing the right
of the Lenders at any time to assert such conditions in respect of any
subsequent Drawdown.
ARTICLE VII
BORROWER'S REPRESENTATIONS AND WARRANTIES
7.1 Borrower's Representations and Warranties - To induce the
Lenders to make available the Facility, the Borrower represents and warrants
to and in favour of the Lenders as follows, which representations and
warranties of the Borrower shall survive the execution and delivery of this
Agreement and the making of each Drawdown, notwithstanding any investigations
or examinations which may be made by the Agent, the Lenders or the Agent's
counsel:
(a) Existence of Borrower - Each of the Borrower and the
Restricted Subsidiaries (excluding Non-Material Restricted
Subsidiaries) is a corporation duly incorporated or continued,
organized, and validly subsisting under the jurisdiction of its
incorporation and has all necessary corporate power and authority to
own its properties and carry on its business as presently carried on;
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(b) Qualification - Each of the Borrower and the Restricted
Subsidiaries is duly licensed and qualified to carry on business in
each jurisdiction in which the location of its respective property or
assets or the conduct of its business require such licence or
qualification save and except, in the aggregate, where such failure
would not be Materially Adverse;
(c) Corporate Authority - The Borrower has all necessary corporate
power, authority and capacity to enter into this Agreement and to do
all such acts and things as are required hereunder to be done,
observed or performed by it, in accordance with the terms of this
Agreement;
(d) Valid Authorization of Agreement - The Borrower has taken all
necessary action to authorize the execution, delivery and performance
of this Agreement in accordance with its terms;
(e) Enforceability - This Agreement constitutes a valid and
legally binding obligation enforceable against the Borrower in
accordance with its terms, subject, however, to limitations with
respect to enforcement imposed by law in connection with bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally and to the extent that equitable remedies such as specific
performance and injunction are in the discretion of the court from
which they are sought;
(f) Title - Each member of the Restricted Group has good and
marketable title to its properties and assets, free and clear of all
liens, claims, restrictions or encumbrances other than Permitted
Encumbrances except where the absence of such title would not, in the
aggregate, be Materially Adverse;
(g) Validity of Agreement - Non-Conflict - None of the Borrower
nor the Restricted Subsidiaries is a party to, bound or affected by or
subject to any indenture, mortgage, lease, agreement, contractual
obligation, instrument, charter or by-law provision, resolution of
directors or shareholders of the Borrower or any of the Restricted
Subsidiaries, order, rule, judgment, decree, licence, or permit which
would be violated, contravened, breached by, or under which default
would occur or a lien, claim, restriction or encumbrance would be
created upon any of the properties or assets of any member of the
Restricted Group as a result of the execution and delivery of this
Agreement or the carrying out of the Borrower's obligations hereunder
where such violation, contravention, breach, default, lien, claim,
restriction or encumbrance, in the aggregate, would be Materially
Adverse;
(h) Government Approval, Regulation, etc. - No authorization or
approval or other action by, and no notice to or filing with, any
Government Authority or regulatory body or other Person is required
for the due execution, delivery or performance by the Borrower of this
Agreement except for authorizations, approvals, actions, notices or
filings which have been duly obtained or made and are in full force
and effect except where the violation or the absence of or lack of
good standing under any such authorization would not, in the
aggregate, be Materially Adverse;
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(i) Absence of Litigation - There is not now in progress, pending
or, to the Borrower's knowledge, threatened against the Borrower or
any Restricted Subsidiary, any litigation, action, suit,
investigation, claim, complaint or other proceeding, including appeals
and applications for review, by or before any court, tribunal,
governmental agency, commission, board, bureau, agency or
instrumentality, domestic or foreign which would, in the aggregate, be
Materially Adverse;
(j) Financial Statements - The Financial Statements and the notes
to such Financial Statements have been prepared in accordance with
GAAP applied on a basis consistent with that of the preceding periods
and present fairly (i) all of the assets, liabilities and financial
position of Gulf as at December 31, 1996 and as at March 31, 1997, and
(ii) the results of operations and changes in financial position of
Gulf for the fiscal year ended December 31, 1996 and for the first
Fiscal Quarter ended March 31, 1997, all financial reports and
financial statements delivered to the Agent or the Lenders pursuant to
this Agreement, including without limitation any financial information
on which any compliance certificates are based have been prepared in
accordance with GAAP and present fairly the financial information set
out therein;
(k) No Event of Default - No Event of Default has occurred and is
continuing and no event has occurred which, with the giving of notice,
the passing of time, or both, would constitute an Event of Default;
(l) Compliance with Laws - None of the Borrower nor any Restricted
Subsidiary is in violation of any indenture, mortgage, lease,
agreement, obligation, instrument, charter or by-law provision,
judgment, decree, license, order, statute, rule, permit or regulation
relating in any way to the Restricted Group, to the operation of its
business or to its property or assets and each of the Borrower and the
Restricted Subsidiaries has obtained all licences, franchises,
permits, registrations and similar authorizations, all of which are in
good standing, necessary for the conduct by it of its businesses,
except where the violation or the absence of or lack of good standing
under any such authorization would not, in the aggregate, be
Materially Adverse;
(m) Environmental Laws
(i) Each of the Borrower and its Subsidiaries is in
compliance with all Environmental Laws and material
Environmental Approvals, except to the extent that failure to
comply therewith would not, in the aggregate, be Materially
Adverse;
(ii) each of the Borrower and its Subsidiaries:
A. possesses or has applied for all
Environmental Approvals required in order to conduct
its business operations; and
53
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B. all such Environmental Approvals are valid
and in full force and effect; and
C. is now in compliance in all respects with all
such Environmental Approvals; and
D. no consent or approval is required of the
Borrower in connection with the transactions
contemplated herein in order to maintain such
Environmental Approvals in full force and effect;
except to the extent that failure to apply for, obtain, comply
with or maintain such Environmental Approvals would not, in
the aggregate, be Materially Adverse;
(iii) except to the extent that failure to so comply would
not, in the aggregate, be Materially Adverse, each of the
Borrower, and its Subsidiaries has complied with all
reporting, notification and inspection requirements imposed by
Environmental Laws, and all operating, monitoring and
reporting records have been maintained in accordance with all
Environmental Laws and Environmental Approvals; and
(iv) except to the extent that failure to do so would not,
in the aggregate, be Materially Adverse, each of the Borrower
and its Subsidiaries has complied with all contracts and
agreements entered into by the Borrower and its Subsidiaries
with Government Authorities relating to environmental matters;
(n) Insurance - Each of the Borrower and the Restricted
Subsidiaries has insurance with respect to its properties, assets and
business and against such casualties and contingencies and in such
types and such amounts, as is in accordance with sound business
practices for corporations of the size and type of business and
operations thereof;
(o) Taxes - Each of the Borrower and the Restricted Subsidiaries
has: (i) duly and timely filed all tax returns and reports as required
by law, has duly and correctly reported all income and other amounts
required to be reported and has paid all Taxes, penalties, interest,
fines and governmental charges in respect thereof, to the extent that
such Taxes, penalties, interest, fines and other governmental charges
have been assessed by the relevant taxation authority, except any such
taxes or charges which are being diligently contested in good faith by
appropriate proceedings for which adequate reserves in accordance with
GAAP shall have been set aside on its books; and (ii) duly and timely
paid all instalments of Taxes required to be paid by it and has made
full provision on its books for all taxes and all penalties, interest
and fines in respect thereof which relate to periods ending
immediately prior to the date hereof, except such failures with
respect to (i) and (ii) which would not, in the aggregate, be
Materially Adverse. Other than actions, suits, proceedings,
investigations, audits, claims and matters which would not, in the
aggregate, be Materially Adverse, there are no actions, suits,
proceedings, investigations, audits or claims now pending or, to the
best of the knowledge, information and belief of the senior officers
of the Borrower after due
54
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enquiry, threatened against the Borrower or any Restricted Subsidiary
in respect of any Taxes or any penalties, interest and fines in
respect thereof and there are no matters under discussion with any
taxation or other Government Authority relating to any such matters
not provided for in the Financial Statements; and
(p) Accuracy of Information - All factual information furnished by
or on behalf of Gulf in writing to the Agent or the Lenders for
purposes of or in connection with this Agreement (including, without
limitation, all engineering and other information with respect to the
proved and probable reserves attributable to the petroleum and natural
gas interests of Gulf and the interests of Gulf in the assets on which
such information is based) or any transaction contemplated hereby
provided on or before the Effective Date is, and all other such
factual information provided pursuant to this Agreement to the Agent
or the Lenders (excluding information provided pursuant to paragraph
8.1(d)(vi) other than pursuant to a written request) will be, true and
accurate on the date as of which such information is dated or
certified (subject to any corrections, amendments or additions to such
information furnished to the Agent or the Lenders, as the case may be,
prior to any reliance thereon thereby) except to the extent that any
inaccuracies therein are not in the aggregate Materially Adverse and
such information is not, or shall not be, as the case may be,
incomplete by omitting to state any material fact necessary to make
such information not misleading, save and except in such respects as
are not, in the aggregate, Materially Adverse.
ARTICLE VIII
COVENANTS
8.1 Covenants - The Borrower covenants and agrees with the Agent
and the Lenders that, unless the Lenders otherwise consent in writing, so long
as any amount payable hereunder is outstanding:
(a) Punctual Payment - The Borrower shall duly and punctually pay
the principal amount of all Loans, all interest thereon, all fees and
all other amounts required to be paid by the Borrower hereunder or
pursuant to agreements with the Agent or Lenders respecting Letters of
Credit or Bankers' Acceptances and other documents related to the
Facility at the times and places and in the manner provided for herein
or therein;
(b) Conduct of Business - Save and except where the failure to do
so would not, in the aggregate, be Materially Adverse, each of the
Borrower and the Restricted Subsidiaries shall do all things necessary
to maintain its legal existence in good standing under the laws of the
jurisdiction of its incorporation and to maintain its qualification to
carry on business in each jurisdiction in which the location of its
respective property or assets or the conduct of its business requires
such license or qualification and to maintain all franchises,
licenses, rights, approvals, permits, consents, rights and privileges
necessary for the conduct of its business and to perform its
obligations under this Agreement;
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(c) Compliance with Laws - Each of the Borrower and the Restricted
Subsidiaries shall comply with all Applicable Laws and all applicable
statutory obligations, judgments, decrees, licences, orders, statutes,
rules, permits and regulations, the non-compliance with which would be
Materially Adverse;
(d) Financial Statements and Other Information - The Borrower
shall deliver to the Agent and the Lenders:
(i) as soon as practicable and in any event within 120
days after the end of each of its fiscal years, the unaudited
unconsolidated annual financial statements of the Restricted
Group and the audited consolidated annual financial statements
of Gulf consisting of balance sheets, statements of profit and
loss and surplus, and statements of changes in financial
position for such year, together with the notes thereto, and
setting forth in comparative form the corresponding figures
for the preceding year, all prepared in accordance with
generally accepted accounting principles consistently applied
throughout the period and prior periods, together with a
report of the Auditors thereon;
(ii) as soon as practicable and in any event within 60
days after the end of each of the first three Fiscal Quarters
of each year, unaudited consolidated financial statements of
Gulf similar to those required pursuant to paragraph 8.1(d)(i)
as of the end of such period and for such period then ended
and for the period from the beginning of the current fiscal
year to the end of such period, setting forth, in the case of
the consolidated financial statements, in comparative form,
the corresponding figures for the comparable period in the
preceding fiscal year, prepared in accordance with generally
accepted accounting principles consistently applied and
certified by the controller, treasurer or other duly
authorized financial officer of the Borrower subject only to
changes resulting from audit and normal year-end adjustments;
(iii) as soon as practicable and in any event within 60
days after the end of each Fiscal Quarter, a Compliance
Certificate and a Notice of Unrestricted Subsidiaries;
(iv) as soon as practicable after any Extension Request, a
report prepared by qualified engineers (which, for greater
certainty need not be independent and may be employed by Gulf)
reasonably estimating the proved and probable reserves
attributable to the petroleum and natural gas interests of
Gulf (excluding Unrestricted Subsidiaries) as of a date not
earlier than the last day of the last financial year of the
Borrower preceding the date of the Extension Request;
(v) promptly, notice of any event or occurrence
(including, without limitation, any event or occurrence which
constitutes a breach of any Environmental Laws or
Environmental Approvals) which may be Materially Adverse;
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(vi) from time to time, such additional available
information regarding the financial position or business of
Gulf as the Agent or the Lenders acting through the Agent may
reasonably request; and
(vii) promptly after the occurrence of any change in
Unrestricted Subsidiaries, a Notice of Amendment of
Unrestricted Subsidiaries;
(e) Notice of Litigation - The Borrower shall give notice to the
Agent of the occurrence of any litigation, action, suit,
investigation, claim, complaint or other proceeding, if the result
thereof, or in respect of such matters as in the aggregate, might be
Materially Adverse or if any thereof in any manner draws into question
the validity or enforceability of this Agreement, and from time to
time shall provide the Agent with all reasonable non-privileged
information requested by the Agent or any of the Lenders concerning
the status of any such litigation, action, suit, investigation, claim,
complaint or other proceeding. Such notice shall be given within 15
days of senior management becoming aware of such litigation,
proceeding or dispute and shall be in form and detail satisfactory to
the Agent, acting reasonably;
(f) Notice of any Event of Default - The Borrower shall forthwith
give notice to the Agent of any fact which, to the best of the
Borrower's knowledge, would reasonably be construed as constituting an
Event of Default or of any event which, to the best of the Borrower's
knowledge, with the giving of notice, lapse of time or otherwise would
constitute an Event of Default;
(g) Books and Records - The books and records relating to the
financial affairs of Gulf shall at all times be maintained in
accordance with good and customary business practice, all financial
statements provided for herein shall be prepared in accordance with
GAAP (excepting, in the case of unconsolidated statements, GAAP with
respect to the consolidation thereof) and present fairly the financial
information set forth therein and at any reasonable time and from time
to time upon reasonable prior notice, the Borrower shall permit the
Agent or the Agent at the request of the Lenders, at the reasonable
expense of the Borrower, access to examine such books and records;
(h) Use of Proceeds - The Borrower shall use the proceeds of all
Drawdowns for the purposes contemplated in Section 2.2;
(i) Pari Passu Ranking - The Borrower shall ensure that Loans
under the Facility rank pari passu with all other present and future
senior unsecured indebtedness of the Borrower;
(j) Environmental Compliance - The Borrower shall and shall cause
each Restricted Subsidiary to comply with all, and shall advise the
Lenders if it or any Subsidiary becomes aware that it is not in
compliance with, any applicable Environmental Laws and Environmental
Approvals, except to the extent that failure to comply would not, in
the aggregate, be Materially Adverse. At the request of the Lenders,
in their sole discretion, the
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Borrower shall undertake to have an environmental audit (by an
independent environmental auditor to be chosen by the Agent with the
prior consent of the Borrower, acting reasonably) of part or all of
its operations conducted for the benefit of the Lenders at the cost of
the Borrower, such cost to the Borrower not to exceed U.S. $100,000
for each audit requested. If such environmental audit establishes
environmental liability to the Restricted Group in excess of: (A) U.S.
$25,000,000 in the 5 years next following the date of such audit or
during the remaining Term Period, whichever is shorter; and (B)
provisions in the annual or quarterly financial statements of the
Borrower last preceding the date of such environmental audit,
provision for such amount shall be made in the next quarterly or
annual financial statements of the Borrower or the amount of such
liability during the remaining Term Period shall be added to Total
Senior Debt for purposes of subsection 8.1(l) until such time as
provision for such amount is made in the financial statements of the
Borrower or the Majority Lenders are satisfied, in their sole
discretion, acting reasonably, that the liability is no longer
Materially Adverse. The Lenders may not request an environmental
audit, at the cost of the Borrower, more than once every two financial
years of Gulf provided that, at the request of the Lenders in their
sole discretion, the Borrower shall undertake to have an environmental
audit as aforesaid, at the cost of the Lenders at any time provided
that the Lenders may not request an environmental audit, whether at
the cost to the Borrower or at the cost to the Lenders, more than once
every financial year of Gulf;
(k) Negative Pledge - The Borrower shall not, and shall not
permit any Restricted Subsidiary to, create, issue, incur, assume or
permit to exist any security interest on its properties or assets in
priority to the Lenders' rights in respect of the Facility, other than
Permitted Encumbrances;
(l) Financial Covenants -
(i) At the end of each Fiscal Quarter the Tangible Net
Worth of Gulf on a consolidated basis shall equal or exceed
the Minimum Tangible Net Worth;
(ii) At the end of each Fiscal Quarter:
Total Senior Debt
---------------------------------------- less than 3.0
Cumulative
Restricted + Acquisition - Disposition
EBIDTA EBIDTA EBIDTA
where:
"CUMULATIVE RESTRICTED EBITDA" means the aggregate
EBITDA of the Restricted Group for the Previous Four
Fiscal Quarters;
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"ACQUISITION EBITDA" means EBITDA properly
attributable to assets acquired by the Restricted
Group within the Previous Four Fiscal Quarters which
was generated in the Previous Four Fiscal Quarters
when such assets were not owned by the Restricted
Group and thus not included in the Cumulative
Restricted EBITDA provided, however, that Acquisition
EBITDA shall not include the EBITDA properly
attributable to any such asset acquisition having a
Transaction Price less than U.S. $5,000,000 as long
as the aggregate of the Transaction Prices for assets
acquired in the Previous Four Fiscal Quarters by the
Restricted Group does not exceed U.S. $50,000,000 in
which case the aggregate EBITDA relating to all such
acquisitions shall be included; and
"DISPOSITION EBITDA" means EBITDA properly
attributable to assets disposed of by the Restricted
Group within the Previous Four Fiscal Quarters which
was generated in the Previous Four Fiscal Quarters
when such assets were owned by the Restricted Group
and thus included in the Cumulative Restricted EBITDA
provided, however, that Disposition EBITDA shall not
include the EBITDA properly attributable to any such
asset disposition having a Transaction Price less
than U.S. $5,000,000 as long as the aggregate of the
Transaction Prices for assets disposed of in the
Previous Four Fiscal Quarters by the Restricted Group
does not exceed U.S. $50,000,000 in which case the
aggregate EBITDA relating to all such dispositions
shall be included;
(m) Negative Covenants - The Borrower shall not, and shall not
permit any Restricted Subsidiaries to, without the prior written
consent of the Majority Lenders:
(i) provide Financial Guarantees, excluding Designated
Project Guarantees, in an aggregate amount in excess of 5% of
the Equity of Gulf unless such Financial Guarantees or the
Funded Debt guaranteed thereby is included in Total Senior
Debt;
(ii) sell, assign, transfer or otherwise dispose of
properties or assets (excluding (A) the sale of accounts
receivable under the Receivables Purchase and Sale Agreement
dated November 29, 1994, as amended, among the Borrower,
Corporate Receivables Trust and Toronto Dominion Securities
Inc., or any replacement of such arrangement; (B) the
surrender, exchange, lease, sublease or farmout of any
property or assets in the ordinary course of business; (C) the
sale of production of hydrocarbons or by-products in the
ordinary course of business; and (D) sales or other
dispositions of assets or property from one member of the
Restricted Group to another member of the Restricted Group) in
any four consecutive Fiscal Quarters pursuant to which the
Restricted Group receives Net Proceeds in an amount which
exceeds 5% of the Equity of Gulf (which Equity shall be
calculated as of the first day of such four Fiscal Quarters)
(the last day of any four Fiscal Quarters in which such excess
occurs hereinafter referred to as the "Excess Date") unless,
subject to
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compliance with Section 5.2, the proceeds from the sale or
other disposition of such properties or assets are utilized
for either investments in the normal course of Gulf's business
or the repayment of Senior Debt (including the Loans), and any
such proceeds not so utilized are repaid to the Lenders
(except to the extent such Restricted Subsidiaries do not make
such payments to the Borrower because they are precluded from
doing so pursuant to the terms of their Funded Debt), on the
next applicable Interest Payment Date following the end of the
fourth Fiscal Quarter after the Excess Date. Any such
repayment of the Facility shall be applied to scheduled
repayments in inverse order of maturity;
(iii) merge, amalgamate, consolidate, reorganize or enter
into a plan of arrangement with any other Person or become a
party to any other transaction whereby all or substantially
all of the property or assets of the Restricted Group may
become the property or assets of another Person, including, in
the case of an amalgamation, of the continuing company
resulting therefrom, unless such merger, amalgamation,
consolidation, reorganization, plan of arrangement,
partnership or other transaction: (A) involves at least one
member of the Restricted Group; and (B) does not constitute an
Event of Default and would not constitute with the giving of
notice, the passing of time, or both, an Event of Default and,
in the case of the Borrower, complies with subsection 8.4(a);
(iv) make any material change in the nature of the
Restricted Group's business, being the exploration and
production of oil and gas, oil and gas pipelines, gas
processing, oil refining, and any other ancillary industry
related to the exploration and production of oil and gas, and
not make any investments outside the normal course of such
business, which are in the aggregate in excess of 5% of the
book value of the assets of the Restricted Group at the end of
the last completed Fiscal Quarter of the Borrower; or
(v) continue the Borrower's existence under the laws of
any jurisdiction other than the laws of Canada or any province
thereof without the prior consent of the Majority Lenders in
their sole discretion, acting reasonably;
(n) Insurance - The Borrower will and will cause each of its
Restricted Subsidiaries to maintain, with financially sound and
reputable insurers, insurance with respect to its properties and
business and against such casualties and contingencies and in such
types and such amounts as shall be in accordance with sound business
practices for corporations of the size and type of business and
operations as Gulf;
(o) Defend Title - The Borrower shall and shall cause each of the
Restricted Subsidiaries to diligently maintain, protect and defend its
right, title, estate and interest in, to and in respect of the
property and assets (including proceeds thereof) of the Borrower and
Restricted Subsidiaries against any claim or demand whatsoever and
take all such acts and steps as are necessary or advisable at any time
and from time to time to maintain ownership
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of and keep in good standing all of the Borrower's and Restricted
Subsidiaries' property and assets, all in accordance with good oil and
gas industry practice, except where the failure to so maintain,
protect or defend would not, in the aggregate, be Materially Adverse;
(p) Taxes - The Borrower will and will cause each of its
Restricted Subsidiaries (excluding Non-Material Restricted
Subsidiaries) to duly and timely file all returns in respect of all
federal and provincial and other Taxes or other assessments or
governmental charges or levies applicable thereto and to pay, or make
provision for payment of, all such Taxes, assessments, charges or
levies imposed upon it or upon its income or profits or upon property
or assets belonging to it, unless, in any such case, the same is being
contested in good faith by appropriate proceedings and an adequate
reserve therefor has been established and is maintained in accordance
with GAAP and except where the failure to so file a return or pay, or
provide for, such taxes, assessments, charges or levies would not, in
the aggregate, relate to a liability to the Restricted Group in excess
of U.S. $500,000;
(q) Obligation to Notify of a Credit Rating Change - At any time
that a rating assigned by DBRS, CBRS, Standard and Poor's or ▇▇▇▇▇'▇
changes as it relates to the Borrower, the Borrower shall, upon
receiving notice of the public dissemination of notice of such change,
immediately, and in any event within 5 Business Days following receipt
thereof, notify the Agent of such new rating and the date of such
change;
(r) Maintain Property - The Borrower shall and shall cause each of
the Restricted Subsidiaries to maintain all of its property and assets
in good condition and repair in accordance with good oil and gas
industry practice, except where the failure to do so would not, in the
aggregate, be Materially Adverse; and
(s) Ownership of Assets - At least 50% of the total assets of the
Restricted Group, determined in accordance with GAAP, shall at all
times be owned by the Borrower or by its Restricted Subsidiaries which
do not have Funded Debt in excess of Cdn. $10,000,000, in the
aggregate (other than Funded Debt owing to other Restricted
Subsidiaries having Funded Debt not exceeding Cdn. $10,000,000 in the
aggregate).
8.2 Environmental Indemnity - The Borrower hereby covenants and
agrees to be responsible for, and to indemnify each of the Agent, the Lenders
and each of their officers, directors, employees and agents (in this Section,
collectively referred to as the "Indemnified Parties") and hold each of them
harmless from and against all claims, demands, liabilities, losses, costs,
damages and expenses (including, without limitation, reasonable legal fees and
all costs incurred in the investigation, pursuing of any claim, proceeding with
respect to, defense and settlement of any item or matter hereinafter set out)
that the Indemnified Parties may incur or suffer, directly or indirectly, as a
result of or in connection with:
(i) the presence of any Hazardous Substance on, upon or
within Gulf's properties or assets, or the escape, seepage,
leakage, spillage, discharge, emission, release, disposal or
transportation away from Gulf's properties or assets of any
Hazardous
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Substance, whether or not there is compliance with all
applicable Environmental Laws and Environmental Approvals; and
(ii) the imposition of any Remedial Order affecting the
Borrower's properties or assets, or any non- compliance with
Environmental Laws or Environmental Approvals pertaining to
Gulf's properties or assets by any Person, including Gulf, the
Agent, the Lenders or any Person acting on behalf of the Agent
or any of the Lenders;
in any way arising in connection with or related to such Indemnified Party's
participation in the Facility or this Agreement provided that any such claims,
demands, liabilities, losses, costs, damages and expenses are not as a result
of the act or omission of the Indemnified Party.
8.3 Restricted/Unrestricted Subsidiaries
(a) The Borrower covenants and agrees that the Subsidiaries listed
in Schedule L (as Schedule L may be amended by the Borrower pursuant
to this Agreement from time to time after the Effective Date) as
"Unrestricted Subsidiaries" shall be all of the Unrestricted
Subsidiaries of the Borrower (excepting only Subsidiaries of
Unrestricted Subsidiaries).
(b) If an entity is purchased by the Borrower or any Restricted
Subsidiary and such entity would not otherwise qualify as a Restricted
Subsidiary and the Funded Debt (other than Inter-Restricted Group
Funded Debt) of the entity remains non-recourse to the Borrower or any
Restricted Subsidiary, the Borrower shall be permitted 12 months from
the date of purchase to: (A) retire the Funded Debt of such entity
with the proceeds of Funded Debt of the Borrower ranking no higher
than pari passu with the Facility, or other funds to the extent
necessary to qualify as a Restricted Subsidiary; or (B) assume the
Funded Debt of such entity provided it ranks no higher than pari passu
with the Facility; provided in either case that the additional Funded
Debt of the Borrower does not result in subsection 8.1(l) being
contravened. During the 12 months from the date of purchase and prior
to such retirement, or assumption of the Funded Debt of such entity,
the entity may be designated as a Restricted Subsidiary or
Unrestricted Subsidiary, at the Borrower's option. If the entity does
not qualify as a Restricted Subsidiary within the 12 month period, the
entity (unless it would not otherwise be an Unrestricted Subsidiary
as defined herein) shall be designated as an Unrestricted Subsidiary.
(c) Neither the Borrower nor any Restricted Subsidiary may:
(i) sell, assign, transfer or otherwise dispose of any
properties or assets (other than the disposition of securities
of Unrestricted Subsidiaries held thereby) to any one or more
Unrestricted Subsidiaries unless: (x) it shall be for
consideration not less than the Fair Market Value thereof at
the date of such disposition; and (y) after taking into
account the overall effect of any transaction giving rise to
the change (including for certainty, accounting for any
concurrent repayment of Senior Debt) subsection
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8.1(l) would not have been contravened by the Borrower if such
disposition had occurred prior to the end of the last Fiscal
Quarter preceding the date of such disposition; or
(ii) purchase or otherwise acquire any properties or
assets from any one or more of the Unrestricted Subsidiaries
unless: (x) it shall be for consideration not greater than the
Fair Market Value of such properties or assets at the date of
such acquisition; and (y) after taking into account the
overall effect of any transaction giving rise to the change
(including for certainty, accounting for any concurrent
repayment of Senior Debt) subsection 8.1(l) would not have
been contravened by the Borrower if such acquisition had
occurred prior to the end of the last Fiscal Quarter preceding
the date of such disposition.
(d) The Borrower may from time to time deliver a Notice of
Amendment of Unrestricted Subsidiaries to the Agent which, in respect
of any change to Schedule L, shall be effective as of the date of the
giving of such notice provided that, after taking into account the
overall effect of any transaction giving rise to the change (including
for certainty, accounting for any concurrent repayment of Senior Debt)
subsection 8.1(l) would not have been contravened and no Event of
Default shall occur as a result of such designation by the Borrower if
such change had occurred prior to the end of the last Fiscal Quarter
preceding the date of such change.
(e) If, at the end of any Fiscal Quarter, any Subsidiary, which
was qualified as a Restricted Subsidiary at the end of the immediately
preceding Fiscal Quarter pursuant to the exceptions set forth in
subparagraphs (ii)(C) and (D) of the definition of "Unrestricted
Subsidiaries", no longer qualifies as a Restricted Subsidiary because
of a reduction in the ratings assigned to the Senior Debt of the
Borrower, then such Subsidiary shall continue to be treated as a
Restricted Subsidiary unless it fails to qualify as a Restricted
Subsidiary pursuant to the exceptions set forth in subparagraphs
(ii)(C) and (D) of the definition of Unrestricted Subsidiaries at the
end of the next Fiscal Quarter and shall thereafter cease to be
treated as a Restricted Subsidiary.
8.4 Certain Requirements in Respect of Mergers, etc.
(a) The Borrower shall not merge, amalgamate, consolidate,
reorganize or enter into a plan of arrangement with any other Person
or become a party to any other transaction whereby all or
substantially all of the property or assets of the Restricted Group
may become the property or assets of another Person, including, in the
case of an amalgamation, of the continuing company resulting
therefrom, or whereby the obligation of the Borrower to pay any amount
hereunder would become subject to novation or assumed or undertaken by
any other such Person or continuing company, unless but may do so if:
(i) no Event of Default, and no event which with the
giving of notice, the passage of time or both would constitute
an Event of Default, exists, and no such
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event would arise as a result of such merger, amalgamation,
consolidation, reorganization, plan of arrangement or
transaction;
(ii) such other Person or continuing company (herein
referred to as a "Successor") is an incorporated company with
limited liability and incorporated in Canada or a province
thereof or an Eligible Partnership;
(iii) the Successor shall execute, prior to or
contemporaneously with the consummation of such transaction,
an agreement supplemental hereto and such other instruments,
if any, as are satisfactory to the Majority Lenders, acting
reasonably, and in the opinion of counsel to the Borrower
approved by the Agent are necessary or advisable to evidence:
(A) the assumption by the Successor of liability for the due
and punctual payment of the principal of and interest and
fees on the Loans and all other amounts payable hereunder; (B)
the covenant of the Successor to pay the same; and (C) the
agreement of the Successor to observe and perform all the
terms, conditions, covenants and obligations of the Borrower
under this Agreement (subject to such changes, in the case of
a Successor that is an Eligible Partnership, as are necessary
to reflect that the Borrower is not a corporation); and
(iv) such transaction shall, to the satisfaction of the
Majority Lenders, acting reasonably, and in the opinion of
counsel to the Borrower approved by the Agent, be upon such
terms as substantially to preserve and not to impair any of
the rights and powers of the Agent or of the Lenders and not
to affect adversely the liability of the Lenders for any
present or future Taxes, or other governmental assessments,
charges or levies of whatsoever nature.
(b) Whenever the conditions of subsection (a) have been duly
observed and performed, the Agent shall execute and deliver the
supplemental agreement provided for in paragraph 8.4(a)(iii) on behalf
of each of the parties hereto (other than the Borrower) and thereupon:
(i) the Successor shall possess and from time to time may
exercise each and every right and power of the Borrower under
this Agreement in the name of the Borrower or otherwise and
any act or proceeding by any provision of this Agreement
required to be done and performed with like force and effect
by the like directors or officers of the Successor; and
(ii) at the request of the Borrower (except, if
applicable, as a partner of an Eligible Partnership), the
Borrower shall be released from its liability and obligations
under this Agreement and the Agent, at the request and at the
expense of the Borrower, shall execute and deliver to the
Borrower such instruments as shall be requisite to evidence
such release.
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ARTICLE IX
EVENTS OF DEFAULT
9.1 Events of Default - The occurrence of any one or more of the
following events (each such event being herein referred to as an "Event of
Default") shall constitute a default under this Agreement:
(a) if the Borrower shall fail to pay any principal of, or
interest or fees on, the Loans when the same shall become due and
payable hereunder for a period of two Business Days after notice from
the Agent that such amount is due and payable;
(b) if the Borrower shall fail to perform or comply with any term,
condition, covenant or obligation contained in this Agreement (other
than those specified in subsection 9.1(a)) and, if capable of remedy,
such failure to perform or comply is not remedied within 30 days of
notice from the Agent so to remedy provided that, in the case of such
a failure to comply with subsection 8.1(o) or any applicable
Environmental Laws or Environmental Approvals which is capable of
remedy, there shall not be an Event of Default if the Borrower shall
have commenced the remedy thereof within 30 days of notice from the
Agent so to remedy and shall actively and diligently pursue such
remedy in good faith to completion;
(c) if any representation or warranty made by the Borrower in this
Agreement or in any certificate or other document at any time
delivered hereunder to the Agent shall prove to have been incorrect in
any material respect on and as of the date thereof and, if capable of
remedy, such matter is not remedied within 30 days of notice from the
Agent so to remedy;
(d) if the Borrower shall cease to carry on business;
(e) if proceedings are commenced for the dissolution, liquidation
or winding up of the Borrower or any Restricted Subsidiary (other than
a Non-Material Restricted Subsidiary and other than any dissolution,
liquidation or winding up of a Restricted Subsidiary where
substantially all of the assets of such Subsidiary are transferred to
another Restricted Subsidiary in connection therewith), or for the
suspension of the business or operations of the Borrower or any such
Restricted Subsidiary (other than a Non-Material Restricted
Subsidiary), unless such proceedings are actively and diligently
contested in good faith on a timely basis;
(f) if the Borrower or any Restricted Subsidiary (other than a
Non-Material Restricted Subsidiary) makes any assignment in bankruptcy
or makes any other assignment for the benefit of creditors, makes any
proposal under the Bankruptcy and Insolvency Act (Canada) or any
comparable law, files a petition or proposal to take advantage of any
act of insolvency, consents to or acquiesces in the appointment of a
trustee, receiver, receiver and manager, interim receiver, custodian,
sequestrator, liquidator or other Person with similar powers of itself
or of all or any substantial portion of its property or assets, or
files a petition
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or otherwise commences any proceedings seeking any reorganization,
arrangement, composition or readjustment under any applicable
bankruptcy, insolvency, moratorium, reorganization or other similar
law affecting creditors' rights or consents to, or acquiesces in, the
filing of such a petition;
(g) if a trustee, receiver, receiver and manager, interim
receiver, custodian, sequestrator, liquidator or any other Person with
similar powers shall be appointed of the Borrower or any Restricted
Subsidiary (other than a Non-Material Restricted Subsidiary) or of all
or any substantial portion of any of its property or assets, other
than a portion of any of its property or assets where recourse is
limited to such property or assets, a judgment or an order is made by
a tribunal of competent jurisdiction restraining its ability to deal
with all or any substantial portion of its property and assets or a
judgment or order is made by a tribunal of competent jurisdiction
approving any reorganization, arrangement, composition or readjustment
under any applicable bankruptcy, insolvency, moratorium,
reorganization or other similar law affecting creditors' rights or the
Borrower or any Restricted Subsidiary is adjudged bankrupt and such
appointment, judgment or order is not vacated, stayed or set aside
within 30 days of the date thereof;
(h) if a writ of execution, distress, attachment or similar
process is issued or levied against all or a substantial portion of
the property or assets of the Borrower or any Restricted Subsidiary in
connection with any default by it in the payment of any amount in
excess of U.S. $25,000,000, or the Equivalent Amount thereof in
another currency as determined by the Agent, unless the writ is
withdrawn, released, vacated or stayed within 30 days, or a judgment
or order shall be rendered against the Borrower or any Restricted
Subsidiary by a court of competent jurisdiction with respect to such
default and such judgment or order shall not be satisfied (or adequate
security provided therefor) in accordance with its terms and continue
unstayed and in effect for 30 days;
(i) if an event of default, under any indenture, agreement or
instrument under which the Borrower or any Restricted Subsidiary has
at the date of this Agreement or shall hereafter have Funded Debt
(excluding indebtedness in respect of which recourse to the Borrower
and Restricted Subsidiaries is limited to securities of an
Unrestricted Subsidiary or specified assets of the Borrower and
Restricted Subsidiaries held thereby) in excess of U.S. $25,000,000,
or the Equivalent Amount thereof in another currency as determined by
the Agent, shall occur and be continuing (and all grace periods have
expired) and as a result thereof any such indebtedness shall have been
lawfully accelerated or shall lawfully be or become due and payable
prior to the date on which the same would otherwise have become due
and payable;
(j) any order by a Government Authority is issued, or a judgment
or order rendered, against the Borrower or Restricted Subsidiary
alleging or in respect of a violation of any Environmental Law or
Environmental Approval for an amount in excess of U.S. $25,000,000, or
the Equivalent Amount thereof in another currency as determined by the
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Agent, and such order or judgment shall not be satisfied (or adequate
security provided therefor) in accordance with its terms and continue
unstayed and in effect for 30 days;
(k) if all or a substantial part of the property or assets of the
Restricted Group shall be expropriated, whether for full or partial
consideration; or
(l) if a Change of Control occurs.
9.2 Termination and Acceleration - Upon the occurrence of an Event
of Default, the Agent shall at the request, or may with the consent, of the
Majority Lenders, by one or more notices to the Borrower do any or all of the
following:
(a) terminate the obligations of the Lenders including, without
limitation, the obligation of the Lenders to advance or allow any
further Drawdowns hereunder;
(b) declare all or any part of the principal amount of the Loans,
all interest accrued thereon and all fees and other amounts required
to be paid by the Borrower hereunder, to be immediately due and
payable without the necessity of presentment for payment, protest,
notice of non-payment or notice of protest (all of which are hereby
expressly waived);
(c) require the Borrower to pay to the Lenders an amount equal to
the aggregate face amount of all outstanding Bankers' Acceptances,
which amount shall be held by the Lenders as cash collateral in an
interest-bearing account, with interest at the Agent's prevailing
rate for similar deposits, until such Bankers' Acceptances mature and
shall be applied by the Lenders to satisfy such maturing Bankers'
Acceptances;
(d) require the Borrower to pay to the Agent an amount equal to
the maximum amount payable by the Lenders under all outstanding
Letters of Credit which amount shall be held by the Agent as cash
collateral in an account bearing interest at the Agent's prevailing
rate for similar deposits, to be applied by the Agent to satisfy any
payments which the Lenders may have to make under Letters of Credit;
and
(e) proceed to exercise any and all rights hereunder or under any
other document or instrument executed pursuant to this Agreement.
9.3 Remedies Cumulative and Waivers - For greater certainty, it is
expressly understood and agreed that the respective rights and remedies of the
Lenders hereunder or under any other document or instrument executed pursuant
to this Agreement are cumulative and are in addition to and not in substitution
for any rights or remedies provided by law or by equity; and any single or
partial exercise by the Lenders of any right of remedy for a default or breach
of any term, covenant, condition or agreement contained in this Agreement or
other document or instrument executed pursuant to this Agreement shall not be
deemed to be a waiver of or to alter, affect or prejudice any other right or
remedy or other rights or remedies to which the Lenders may be lawfully
entitled for such default or breach. Any waiver by the Lenders of the strict
observance, performance or
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compliance with any term, covenant, condition or agreement herein contained and
any indulgence granted either expressly or by course of conduct, by the Lenders
shall be effective only in the specific instance and for the purpose for which
it was given and shall be deemed not to be a waiver of any rights and remedies
of the Lenders under this Agreement or other document or instrument executed
pursuant to this Agreement as a result of any other default or breach hereunder
or thereunder.
9.4 Setoff - Any deposits or other sums credited by or due from
the Lenders to the Borrower and any securities or other property of the
Borrower in the possession of the Lenders or Agent may be, unless otherwise
agreed, applied to or set off against the payment of the obligations of the
Borrower hereunder and any or all other Liabilities, direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter
arising, of the Borrower to the Lenders or Agent at any time after the
occurrence and during the continuance of any Event of Default, in each case for
the benefit of each of the Lenders rateably in accordance with the portion of
the Loans outstanding to such Lender.
ARTICLE X
THE AGENT AND THE LENDERS
10.1 The Agent - Each Lender hereby irrevocably appoints the
Agent to act as its agent in connection with this Agreement and any matter
contemplated hereunder, and irrevocably authorizes the Agent to exercise such
rights, powers and discretions as are delegated to the Agent pursuant to this
Agreement together with all such rights, powers and discretions as are
incidental hereto or thereto. The Agent shall have only those duties and
responsibilities which are expressly specified in this Agreement, and it may
perform such duties by or through its agents or employees. This Agreement
shall not place the Agent under any fiduciary duties in respect of any Lender.
As to any matters not expressly provided for by this Agreement, the Agent shall
not be required by the Lenders to exercise any discretion or take any action,
but shall be required to act or to refrain from acting (and shall be fully
protected with respect to the Lenders in so acting or refraining from acting)
upon the instructions of the Majority Lenders, and such instructions shall be
binding upon all Lenders; provided, however, that the Agent shall not be
required to take any action which exposes the Agent to liability or which is
contrary to this Agreement or Applicable Law.
10.2 The Agent's Responsibility -
(a) The Agent may assume that:
(i) any representation, warranty or statement made by the
Borrower in or in connection with any of this Agreement
(including, without limitation, in any Drawdown Notice) is
true and correct;
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(ii) no Event of Default has occurred;
(iii) the Borrower is not in breach of or in default under,
its obligations under this Agreement; and
(iv) there has been no assignment or transfer by any means
by any of the Lenders of their rights hereunder unless and
until the Agent receives a Bank Transfer Agreement
substantially in the form set forth in Schedule G whereby the
assignee is bound hereby as it would have been if it had been
an original Lender party hereto;
and the Agent may also:
(b) unless it has actual knowledge or actual notice to the
contrary, assume that each Lender's address is that identified with
its signature in Schedule A until the Agent has received from such
Lender a notice designating some other office of such Lender as its
address and act upon any such notice until the same is superseded by a
further such notice;
(c) engage and pay for the advice or services of any legal
counsel, independent public accountants or other experts whose advice
or services may to it seem necessary, expedient or desirable and rely
upon any advice so obtained and shall not be liable for any action
taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts;
(d) unless it has actual knowledge or actual notice to the
contrary, rely as to matters of fact which might reasonably be
expected to be within the knowledge of any Person upon a statement
signed by or on behalf of the such Person;
(e) unless it has actual knowledge or actual notice to the
contrary, rely upon any communication or document believed by it to be
genuine;
(f) refrain from exercising any right, power or discretion vested
in it under this Agreement unless and until instructed by the Majority
Lenders (or Lenders if instruction of the Lenders is specifically
required by the terms of this Agreement) as to whether or not such
right, power or discretion is to be exercised and, if it is to be
exercised, as to the manner in which it should be exercised;
(g) refrain from exercising any right, power or discretion vested
in it which would or might in its opinion be contrary to any law of
any jurisdiction or any directive or otherwise render it liable to any
Person, and may do anything which is in its opinion necessary to
comply with any such law or directive;
(h) retain for its own benefit, and without liability to account
for, any fee or other sum receivable by it for its own account;
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(i) accept deposits from, lend money to, provide any advisory or
other services to or engage in any kind of banking or other business
with any Party (including any Subsidiary thereof); and
(j) refrain from acting in accordance with any instructions of the
Majority Lenders to begin any legal action or proceeding arising out
of or in connection with any of this Agreement or any Bankers'
Acceptance or Letter of Credit, until it shall have received such
security as it may require (whether by way of payment in advance or
otherwise) against all costs, claims, expenses (including legal fees),
obligations, losses, damages, penalties, actions, judgments, suits,
disbursements and liabilities of any kind or nature whatsoever which
it will or may expend or incur in complying with such instruction.
10.3 The Agent's Duties - The Agent shall:
(a) promptly upon receipt thereof, inform each Lender of the
contents of any notice, document, request or other information
received by it in its capacity as Agent hereunder from the Borrower
excepting therefrom information and notices relating solely to the
role of Agent hereunder;
(b) promptly notify each Lender of the occurrence of any Event of
Default of which the Agent has written notice from the Borrower;
(c) each time the Borrower requests the prior written consent of
the Lenders or Majority Lenders, use its best efforts to obtain and
communicate to the Borrower the response of the Lenders or Majority
Lenders, as the case may be, in a reasonable and timely manner having
due regard to the nature and circumstances of the request;
(d) subject to the foregoing provisions of this Section and
compliance with this Agreement, act in accordance with any
instructions given to it by the Lenders or, where permitted, the
Majority Lenders; and
(e) if so instructed by the Lenders, or the Majority Lenders, as
applicable, refrain from exercising any right, power or discretion
vested in it under this Agreement or any document incidental hereto.
10.4 Protection of Agent - Notwithstanding anything to the contrary
expressed or implied herein, the Agent shall not:
(a) be bound to enquire as to:
(i) whether any representation, warranty or statement
made by the Borrower in or in connection with this Agreement
or any document incidental hereto is true or correct;
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(ii) the occurrence or otherwise of any Event of Default;
(iii) the performance or observance by the Borrower of its
obligations under this Agreement or any document incidental
hereto or to inspect the property or assets (including the
books and records) of the Borrower or any of its Subsidiaries;
(iv) any breach of or default by the Borrower of or under
its obligations under this Agreement; or
(v) the use or application by the Borrower of any of the
proceeds of the Facility;
(b) be bound to account to any Lender for any sum or the profit
element of any sum received by it for its own account;
(c) be bound to disclose to any Person any information relating to
the Borrower if such disclosure would or might in its opinion
constitute a breach of any law or regulation or be otherwise
actionable at the suit of any Person; or
(d) accept any responsibility for the accuracy and/or completeness
of any information supplied by others in connection herewith or for
the legality, validity, effectiveness, adequacy or enforceability of
this Agreement, any Bankers' Acceptance, any Letter of Credit or any
document incidental hereto or thereto and the Agent shall not be under
any liability or responsibility as Agent to any Lender as a result of
taking or omitting to take any action in relation to the Agreement,
any Bankers' Acceptance, any Letter of Credit or any document
incidental hereto or thereto save in the case of gross negligence or
wilful misconduct, and each of the Lenders and the Borrower agree that
it will not assert or seek to assert against any director, officer,
employee or agent of the Agent any claim it might have against any of
them in respect of the matters referred to in this Section.
10.5 Indemnification of Agent - Each of the Lenders agrees to
indemnify the Agent (to the extent not reimbursed by the Borrower), ratably
according to their respective Commitment Amounts, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by, or asserted against the Agent in any way
relating to or arising out of this Agreement or any action taken or omitted by
the Agent under this Agreement, or any of the transactions contemplated hereby,
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's own negligence or wilful
misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse the Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) incurred by such Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement or any of the transactions contemplated
hereby to the extent that the Agent is not reimbursed for the expenses by the
Borrower.
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10.6 Termination or Resignation of an Agent
(a) Notwithstanding the irrevocable appointment of the Agent, the
Majority Lenders may (with the consent of the Borrower, not to be
unreasonably withheld), upon giving the Agent 90 days' prior written
notice to such effect, terminate the Agent's appointment hereunder
provided that a successor Agent has been appointed at or prior to the
expiry of such notice.
(b) The Agent may resign its appointment hereunder at any time
without assigning any reason therefor upon giving 15 Business Day's
prior written notice to such effect to each of the other parties
hereto. Such resignation shall not be effective until a successor
Agent has been appointed.
(c) In the event of any such termination or resignation, the
Majority Lenders shall appoint a successor Agent who shall be a Lender
(who consents to such appointment) acceptable to the Borrower, acting
reasonably. The retiring Agent shall deliver copies of the accounts
to such successor and the retiring Agent shall be discharged from any
further obligation hereunder accruing thereafter but shall remain
entitled to the benefit of the provisions of this Section and the
Agent's successor and each of the other parties hereto shall have the
same rights and obligations among themselves as they would have had if
such successor originally had been a Party hereto as Agent.
(d) If no successor Agent has been appointed pursuant to the
subsections above by the expiry of the required period of prior notice
after the date such notice of resignation was given by the resigning
Agent, the resigning Agent's resignation shall become effective and
such of the Lenders as is designated by (and consents to such
designation) the Borrower shall thereafter perform all the duties of
the resigning Agent hereunder until such time, if any, as the Majority
Lenders appoint a successor Agent as provided above.
10.7 Rights of the Agent as Lender - With respect to its
Commitment, the Advances made by it, any Bankers' Acceptances accepted and
purchased by it and any Letters of Credit issued by it, the Agent shall have
the same rights, powers and obligations under this Agreement as any other
Lender and may exercise the same as though it were not the Agent; and the term
"Lender" or "Lenders" shall, unless otherwise expressly indicated, include any
Person serving as an Agent in its individual capacity. Any Person serving as an
Agent and its affiliates may accept deposits from, lend money to, act as
trustee under indentures of, and generally engage in any kind of business with,
the Borrower and any Person who may do business with or own securities of the
Borrower, all as if such Person serving as the Agent were not the Agent and
without any duty to account therefor to the Lenders.
10.8 Financial Information Concerning Gulf - Subject to subsection
10.3(a), the Agent shall not have any duty or responsibility either initially
or on a continuing basis to provide any Lender with any credit or other
information with respect to the financial condition and affairs of Gulf.
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10.9 Knowledge of Financial Situation of the Borrower - Each Lender
has itself been, and will continue to be, solely responsible for making its own
independent appraisal of and investigations into the financial condition,
creditworthiness, condition, affairs, status and nature of the Borrower.
Accordingly, each Lender confirms with the Agent that it has not relied, and
will not hereafter rely, on the Agent (i) to check or enquire on its behalf
into the adequacy, accuracy or completeness of any information provided by the
Borrower or any other Person under or in connection with this Agreement or the
transactions hereby contemplated (whether or not such information has been or
is hereafter distributed to such Lender by the Agent), or (ii) to assess to
keep under review on its behalf the financial condition, creditworthiness,
condition, affairs, status or nature of the Borrower. The Agent shall not be
responsible to any Lender for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectability, priority or
sufficiency of this Agreement or the financial condition of the Borrower or be
required to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement, or the financial
condition of the Borrower or the existence or possible existence of any Event
of Default or event of which would constitute an Event of Default with the
giving of notice, the passing of time, or both. Each Lender acknowledges that
a copy of this Agreement has been made available to it for review and each
Lender acknowledges that it is satisfied with the form and substance of this
Agreement. Each Lender hereby covenants and agrees that it will not make any
arrangements with the Borrower for the satisfaction by the Borrower of any
Advances without the consent of all the other Lenders.
10.10 Legal Proceedings
(a) Each of the Lenders hereby acknowledges that, to the extent
permitted by Applicable Law, the remedies provided hereunder to the
Lenders are for the benefit of the Lenders collectively and acting
together and not severally and further acknowledges that its rights
hereunder are to be exercised not severally, but collectively by the
Agent upon the decision of the Majority Lenders. Notwithstanding any
of the provisions contained herein, each of the Lenders hereby
covenants and agrees that it shall not be entitled to take any legal
proceedings with respect to this Agreement, any Bankers' Acceptance or
any Letter of Credit, but that any such legal proceeding shall be
taken only by the Agent with the prior written agreement of the
Majority Lenders provided that notwithstanding the foregoing, in the
absence of instructions from the Lenders and where in the sole opinion
of the Agent the exigencies of the situation warrant such action, the
Agent may without notice to or consent of the Lenders take such action
on behalf of the Lenders as it deems appropriate or desirable in the
interests of the Lenders and provided that the Agent shall not be
obligated to take any legal proceedings against the Borrower or any
other Person for the recovery of any amount due under this Agreement
or under any of the Bankers' Acceptances or Letters of Credit. Upon
any such written consent being given by the Majority Lenders, each
Lender shall cooperate fully with the Agent to the extent requested by
the Agent in the collective realization. Each Lender shall do all
acts and things to make, execute and deliver all agreements and other
instrument, including, without limitation, any instruments necessary
to effect any registrations, so as to fully carry out the intent and
purpose of this Section.
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(b) Each of the Lenders shall not seek, take, accept or receive
any security for any of the obligations and liabilities of the
Borrower hereunder or under any other document, instrument, writing or
agreement ancillary hereto other than such security as is provided
hereunder or thereunder and shall not enter into any agreement with
any of the parties hereto or thereto relating in any manner whatsoever
to this Agreement (including, without limitation, any Bankers'
Acceptances issued and purchased hereunder or any Letters of Credit
issued hereunder), unless all of the Lenders shall at the same time
obtain the benefit of any such security or agreement.
10.11 Capacity as Agent - In performing its functions and duties
under this Agreement, the Agent shall act solely as the agent of the Lenders
and shall not assume, and shall not be deemed to have assumed, any obligation
as agent or trustee for the Borrower or any other Person. The Agent shall not
be under any liability or responsibility of any kind to the Borrower, the
Lenders or to any other Person arising out of or in relation to any failure or
delay in performance or breach by any other Lender or Lenders or, as the case
may be, the Borrower or any other Person pursuant to or in any way in
connection with this Agreement.
ARTICLE XI
PAYMENT
11.1 Payments to Agent
(a) All payments in Canadian Dollars to be made by the Borrower in
connection with this Agreement or with a Bankers' Acceptance shall be
made by the Borrower in funds having same day value to the Agent, for
its own account or for the account of the Lenders, at its Toronto Main
Branch, 1269 - 332, in the name of International Loan Operations
(Central, Toronto) - the Gulf Agency Account, or at any other office
or account in Toronto designated by the Agent. Any such payment shall
be made on the date upon which such payment is due, in accordance with
the terms hereof, no later than 11:00 a.m. (Calgary time). Any such
payment shall be a good discharge, to the Borrower, for such payment
and, if any such payment is for the account of the Lenders, the Agent
shall hold the amount so paid "in trust" for the Lenders until
distributed to them in accordance with this Agreement.
(b) All payments in U.S. Dollars to be made by the Borrower in
connection with this Agreement shall be made by the Borrower in
immediately available funds to the Agent, for its own account or for
the account of the Lenders, at the branch referred to in subsection
11.1(a), for Transit 2 Account No. 4637-654 in the name of
International Loan Operations (Central, Toronto) - the Gulf Agency
Account, or at any other office or account in Toronto designated by
the Agent. Any such payment shall be made on the date upon which such
payment is due, in accordance with the terms hereof, no later than
10:00 a.m. (Calgary time). Any such payment shall be a good
discharge, to the Borrower for such payment and, if such
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payment is for the account of the Lenders, the Agent shall hold the
amount so paid "in trust" for the Lenders until distributed to them in
accordance with this Agreement.
11.2 Payments by Lenders to Agent
(a) All payments in Canadian Dollars to be made by any Lender to
the Agent in connection with Advances of the Borrower shall be made in
immediately available funds to the Agent, for the Borrower's account
(unless otherwise specified), at the branch, office or account
mentioned in or designated under subsection 11.1(a) and no later than
the time designated therein (unless another time is specified therefor
elsewhere in this Agreement).
(b) All payments in U.S. Dollars to be made by any Lender to the
Agent in connection with Advances of the Borrower shall be made in
immediately available funds to the Agent, for the Borrower's account
(unless otherwise specified), at the branch, office or account
mentioned in or designated under subsection 11.1(b) and no later than
the time designated therein (unless another time is specified therefor
elsewhere in this Agreement).
11.3 Payments by Agent to Borrower - Any payment received by the
Agent for the account of the Borrower shall be paid in funds having same value
to the Borrower by the Agent on the date of receipt, or if such date is not a
Business Day, on the next Business Day, to such account(s) as the Borrower may
designate.
11.4 No Set-Off or Counterclaim by Borrower - All payments by the
Borrower shall be made free and clear of and without any deduction for or on
account of any set-off or counterclaim.
11.5 Non-Receipt by Agent - Subject to Section 2.7, where a sum is
to be paid hereunder to the Agent for the account of another Party hereto, the
Agent shall not be obliged to make the same available to that other Party
hereto until it has been able to establish that it has actually received such
sum, but if it does pay out a sum and it proves to be the case that it had not
actually received the sum it paid out, then the Party hereto to whom such sum
was so made available shall, on request, ensure that the amount is refunded to
the Agent and shall, on demand, indemnify the Agent against any cost or loss it
may have suffered or incurred by reason of its having paid out such sum prior
to its having received such sum.
11.6 When Due Date Not Specified - Whenever this Agreement does
not provide a date when any amount payable hereunder shall be due and payable,
such amount shall be due and payable on the third Business Day following
written notice or demand for payment thereof by the Agent or any Lender, save
that nothing hereinbefore provided shall in any way affect or alter the rights
and remedies available to the Agent and any Lender under Article IX.
11.7 Agent's Authority to Debit - In respect of all amounts payable
by the Borrower under this Agreement as interest, the Borrower hereby
authorizes and instructs the Agent (provided that the Agent shall provide not
less than 4 hours (occurring between 7:30 a.m. and 4:30 p.m. (Calgary time) on
a Business Day) prior notice to the Borrower of the amount thereof) to debit,
from time to
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time when such amounts are due and payable, the account or accounts designated
pursuant to Section 11.1 or Section 11.3, as applicable, for the purpose of
satisfying payment thereof.
ARTICLE XII
GENERAL
12.1 Costs and Expenses - The Borrower shall pay promptly all
reasonable costs and expenses incurred by the Agent on its own behalf or on
behalf of the Lenders in connection with preparation, printing, execution and
delivery of each of this Agreement and the other documents to be delivered
hereunder, whether or not any Drawdown has been made hereunder, including,
without limitation, the fees and out-of-pocket expenses of Agent's counsel with
respect thereto and with respect to advising each of the Agent on its own
behalf or on behalf of the Lenders as to the rights and responsibilities
hereunder and the other documents delivered hereunder. The Borrower further
agrees to pay all costs and expenses incurred by the Agent on its own behalf or
on behalf of the Lenders (including fees and expenses of counsel, accountants
and other experts), in connection with any waiver or consent under, or
amendment to, this Agreement, or the preservation or enforcement of rights of
the Agent and the Lenders under this Agreement and other documents delivered
hereunder including, without limitation, all reasonable costs and expenses
sustained by each of the Agent and the Lenders as a result of any failure by
the Borrower to perform or observe its obligations contained in any of such
documents.
12.2 Indemnifications by the Borrower -
(a) Failure to Complete Drawdown - In addition to any liability of
the Borrower to the Agent or the Lenders under any other provision of
this Agreement, the Borrower shall indemnify each of the Agent and the
Lenders and hold each of them harmless against any reasonable loss
(excluding loss of profit) or expense incurred thereby as a result of
any failure by the Borrower to fulfil any of its obligations hereunder
including, without limitation, any cost or expense incurred by reason
of the liquidation or re-employment in whole or in part of deposits or
other funds required by the Agent to fund any Drawdown as a result of:
(i) the Borrower's failure to complete a Drawdown or to
make any payment, repayment or prepayment on the date required
hereunder or specified by it in any notice given hereunder;
(ii) the Borrower's failure to pay any other amount,
including without limitation any interest or fee, due
hereunder on its due date; or
(iii) the Borrower's failure to give any notice required to
be given by it to the Agent or a Lender hereunder.
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(b) General Indemnity - In addition to any liability of the
Borrower to the Agent or the Lenders under any other provisions of
this Agreement, the Borrower shall, to the fullest extent permitted by
Applicable Law, indemnify each of the Agent and the Lenders, and their
respective officers, directors, employees, representatives,
shareholders, agents and affiliates (as used in this Section each an
"Indemnified Party") from, hold each of them harmless against and
promptly upon written demand therefor pay or reimburse each of them
for, any and all actions, suits, proceedings (including any
investigations, litigation or inquiries), claims, demands, causes of
action, costs, losses (excluding loss of profit), liabilities, damages
or expense of any kind or nature whatsoever but excluding those based
on gross negligence or wilful misconduct of such Indemnified Party
(the "Indemnity Matters") which may be incurred by or asserted against
or involve any of them (whether or not any of them is designated a
party thereto) as a result of: (i) any actual or proposed use by the
Borrower of the proceeds of any Advance; (ii) any transaction in which
any proceeds of all or any part of a Drawdown is applied; or (iii) any
Event of Default, including, without limitation, the reasonable fees
and disbursements of counsel and all other expenses incurred in
connection with investigating, defending or preparing to defend any
such action, suit, proceeding (including any investigations,
litigation or inquiries), claim, demand or cause of action; provided,
that prior to the occurrence of an Event of Default, the Borrower
shall only be obligated to pay the reasonable fees and disbursements
of counsel engaged by the Agent to represent all of the Agent and the
Lenders. Subject to the proviso in the preceding sentence, the
Borrower shall be obligated to pay or reimburse each Indemnified Party
for all out-of-pocket costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses) incurred by such
Indemnified Party in the defense of any claims arising out of any
Indemnity Matter at the time such costs and expenses are incurred and
such Indemnified Party has given the Borrower written notice thereof.
(c) Contribution - If and to the extent that the foregoing
indemnities may be unenforceable for any reason, the Borrower hereby
agrees to make the maximum contribution to the payment and
satisfaction of each of the indemnified liabilities described which is
permissible under Applicable Law.
(d) Survival of Indemnity - The foregoing indemnities and the
indemnity set forth in Section 8.2 shall survive the termination of
this Agreement, the consummation of the transactions contemplated by
this Agreement, the repayment of the Facility, the invalidity or
unenforceability of any term or provision of this Agreement, or any
other document, any investigation made on behalf of the Agents or the
Lenders and the content or accuracy of any representation or warranty
made by the Borrower or any Subsidiary under this Agreement.
12.3 Funds - Each amount advanced, made available, disbursed or
paid hereunder shall be advanced, made available, disbursed or paid, as the
case may be, in immediately available funds or, after notice from the Agent, in
such other form of funds as may from time to time be customarily used in
Toronto, Canada in the settlement of banking transactions similar to the
banking transactions required to give effect to the provisions of this
Agreement on the day such advance, disbursement or payment is to be made.
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12.4 Notice - Any demand, notice or communication to be made or
given hereunder shall be in writing, except as otherwise expressly permitted or
required under this Agreement, and may be made or given by personal delivery or
by facsimile machine addressed to the respective Parties as follows:
to the Borrower:
Gulf Canada Resources Limited
▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Treasury
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
Gulf Canada Resources Limited
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇
Attention: Treasurer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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to the Agent:
Bank of Montreal
Loan Agency Services
After Sales
22nd Floor
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Manager, Loan Agency Services
Tel No. (▇▇▇) ▇▇▇-▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
to the Lenders as set forth in Schedule A
or to such other delivery or facsimile machine address as any Party may from
time to time notify the others in accordance with this Section. Any demand,
notice or communication made or given by personal delivery shall be
conclusively deemed to have been given on the day of actual delivery thereof,
or, if given by facsimile transmission, on the first Business Day following the
transmittal thereof.
12.5 Governing Law - This Agreement shall be conclusively deemed to
be a contract made under, and shall for all purposes be governed by and
construed in accordance with, the laws of the Province of Alberta, Canada,
without prejudice to or limitation of any other rights or remedies available
under the laws of any jurisdiction where property or assets of the Borrower may
be situate.
12.6 Judgment Currency - If for the purposes of obtaining judgment
in any court in any jurisdiction with respect to this Agreement it becomes
necessary to convert into the currency of such jurisdiction (herein called the
"Judgment Currency") any amount due hereunder in any currency other than the
Judgment Currency, then such conversion shall be made at the exchange rate
(which shall, in respect of any conversion of U.S. Dollars to Cdn. Dollars or
vice versa, be the Exchange Rate) prevailing on the Business Day before the day
on which judgment is given. In the event that there is a change in such
exchange rate prevailing between the Business Day before the day on which the
judgment is given and the date of payment of the amount due, the Borrower
shall, on the date of payment, pay such additional or lesser amounts (if any)
as may be necessary to ensure that the amount paid on such date is the amount
in the Judgment Currency which when converted at such exchange rate prevailing
on the date of payment is the amount then due under this Agreement in such
other currency. Any additional amount due from the Borrower under this Section
shall be due as a separate debt and shall not be affected by judgment being
obtained for any other sums due under or in respect of this Agreement.
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12.7 Amendments, Etc. - No amendment or waiver of any provision of
this Agreement, nor consent to any departure by the Borrower therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Majority Lenders, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, do any of the following: (a) increase the
Commitments or the Commitment Amounts of the Lenders or subject the Lenders to
any obligations in addition to those set out in this Agreement; (b) reduce the
principal of any outstanding Loans, or the rate of interest or fees on any of
the Loans or any fees or other amounts payable hereunder; (c) postpone any date
fixed for any payment of principal of, or interest or fees in respect of, any
Loans or any fees or other amounts payable hereunder; (d) change the percentage
of the Commitments or of the aggregate unpaid principal amount of the Loans
which shall be required for the Lenders to take any action under this Agreement
(including, without limitation, the definition of Majority Lenders); (e) change
any currency or mode of calculation or computation of any payment required
hereunder; (f) amend this Section 12.7 or subsection 8.1(l); or (g) amend,
release or waive or consent to any departure from any matter stated to require
approval or consent of all the Lenders. Except as otherwise specifically
provided herein, the Lenders shall use reasonable good faith efforts to respond
to any written request by the Borrower for permission to take any action which
is or may be prohibited under this Section within 20 Business Days of receipt
thereof.
12.8 Severability - Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall not invalidate the
remaining provisions of this Agreement and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provisions in any other jurisdiction.
12.9 Whole Agreement - This Agreement constitutes the whole and
entire agreement between the Parties relating to the subject matter of this
Agreement, and cancels and supersedes any prior agreements, undertakings,
declarations, commitments and representations, written or oral, in respect
thereof including, without limitation, the commitment letter dated June 13,
1997 sent by the Agent and accepted by the Borrower on June 16, 1997.
12.10 Binding Effect; Assignments
(a) Successors and Assigns - This Agreement shall become effective
on the date hereof and thereafter shall be binding upon and inure to
the benefit of and be enforceable by the Borrower, the Agent and each
Lender and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights hereunder or
any interest herein except to a Successor pursuant to Section 8.4. No
Lender may participate, assign or sell any of its rights or
obligations hereunder except as required by operation of law in
connection with the merger, consolidation or dissolution of any Lender
or as provided in this Section.
(b) Assignments - Each Lender may, at its own cost, in accordance
with Applicable Law and with the consent of the Borrower and the Agent
(which consent shall not be unreasonably withheld by either of them)
assign to any Eligible Lender, all or any part of the
80
- 75 -
Loans owing to such Lender and any such Lender's continuing
obligations with respect to this Agreement (including any Bankers'
Acceptances), and all or any part of such Lender's Commitment (which
assignment shall be of a constant, and not of a varying, percentage of
all of the assigning Lender's Advances and Commitment) and to the
extent of any such assignment the assignee shall, to the fullest
extent permitted by law, have the same rights and benefits hereunder
and the same continuing obligations as it would have if it were such
Lender hereunder; provided, however that (i) the Agent and the
Borrower shall be entitled to continue to deal solely and directly
with the assignor Lender in connection with the interests so assigned
unless and until such assignee becomes a Lender pursuant to a Bank
Transfer Agreement substantially in the form set forth in Schedule G;
(ii) any transfer of less than all of any Lender's Advances and
Commitment shall be in an aggregate amount not less than U.S.
$10,000,000, and (iii) immediately after any transfer of less than all
of a Lender's rights in respect of the Loans owing to such Lender and
all of its Commitment such assignor Lender shall retain Loans and
Commitment of not less than U.S. $10,000,000 and provided further that
no assignee or transferee shall be entitled to receive pursuant to
such assignment or transfer more than the amounts which would
otherwise have been payable by the Borrower to such Lender, had such
assignment or transfer not been made, in respect of the rights,
benefits and/or obligations so assigned or transferred. For greater
certainty, the Borrower shall not be obligated to pay to any such
assignee or transferee any amount(s) pursuant to this Agreement which
is (are) greater than the amount(s), if any, which the Borrower would
otherwise have been obligated to pay to the Lender (whose rights,
benefits and/or obligations have been so assigned to such assignee or
transferee) had such assignment or transfer not have been made. Upon
(1) such execution of such Bank Transfer Agreement, (2) delivery of an
executed copy thereof to each of the Borrower and the Agent, (3)
payment of a recording fee in the amount of U.S. $2,500 by such
transferor Lender or assignee Lender to the Agent, and (4) payment by
such assignee Lender to such transferor Lender of an amount equal to
the purchase price agreed between such transferor Lender and such
assignee Lender to the Agent, such transferor Lender shall be released
from any further obligations hereunder accruing thereafter to the
extent of such assignment and such assignee Lender shall for all
purposes be a Lender party to this Agreement and shall have all the
rights and obligations of a Lender under this Agreement to the same
extent as if it were an original Party hereto, and no further consent
or action by the Borrower, the Lenders or the Agent shall be required.
Such Bank Transfer Agreement shall be deemed to amend this Agreement
and the Agent shall amend Schedule A hereto, to the extent, and only
to the extent, necessary to reflect the addition of such assignee
Lender as a Lender and the resulting adjustment of the Commitments
arising from the purchase by such assignee Lender of all or a portion
of the Advances and Commitment of such transferor Lender.
(c) No Lender may make any such assignment or transfer, or take
any action or steps to attempt to do so, until after October 18, 1997.
12.11 Participations - With the approval of the Borrower, not to be
unreasonably withheld, any Lender may at any time sell to one or more financial
institutions (each, a "Participant")
81
- 76 -
participating interests in any of the Loans, Commitments, or other interests of
such Lender hereunder; provided, however, that:
(a) no participation contemplated in this Section 12.11 shall
relieve such Lender from its Commitments or its other obligations
hereunder or under any other agreement or document contemplated
herein;
(b) such Lender shall remain solely responsible for the
performance of its Commitments and such other obligations;
(c) the Borrower and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and each of the other Loan Documents;
(d) each Participant shall, for the purposes of Sections 9.4,
10.10, 12.1 and 12.2 hereof, be deemed to be a Lender hereunder and
entitled to the benefit of the provisions of such Sections to the same
extent as the relevant Lender;
(e) no Participant shall be entitled to direct the voting of the
relevant Lender in respect of any matter requiring the consent, waiver
or approval of the Majority Lenders, but shall be entitled to vote in
respect of any matter requiring the consent, waiver or approval of all
Lenders;
(f) such Participant is an Eligible Lender; and
(g) no participating interest shall be in an aggregate amount of
less than U.S. $10,000,000.
12.12 Further Assurances - Each of the Borrower, the Agent and the
Lenders shall promptly cure any default or defect by it in the execution and
delivery of this Agreement. The Borrower, at its expense, shall promptly
execute and deliver to the Agent, upon request by the Agent, all such other and
further documents, agreements, opinions, certificates and other instruments in
compliance with, or accomplishment of its covenants and agreements hereunder or
to more fully state its obligations as set out herein or to make any recording,
filing or notice or obtain any consent, all as may be reasonably necessary or
appropriate in connection therewith.
82
- 77 -
12.13 Counterparts - This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
taken together shall be deemed to constitute one and the same instrument, and
it shall not be necessary in making proof of this Agreement to produce or
account for more than one such counterpart.
IN WITNESS WHEREOF the Parties have executed this Agreement as
of the date first written above.
GULF CANADA RESOURCES LIMITED
By:
--------------------------
Name:
Title:
By:
--------------------------
Name:
Title:
BANK OF MONTREAL, AS AGENT
By:
--------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Director
83
SCHEDULE A
LENDERS
NAME AND LENDING OFFICE OF
LENDER COMMITMENT AMOUNT EXECUTION
-------------------------- ----------------- ---------
Bank of Montreal U.S. $91,000,000 Bank of Montreal
First Canadian Centre
▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇.▇. By:
▇▇▇▇ ▇▇▇▇▇ -------------------------------------
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Name:
▇▇▇ ▇▇▇ Title:
By:
-------------------------------------
Name:
Title:
ABN Amro Bank Canada U.S. $77,000,000 ABN Amro Bank Canada
Suite 2500
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By:
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ -------------------------------------
▇▇▇ ▇▇▇ Name:
Title:
By:
-------------------------------------
Name:
Title:
Bank of America Canada U.S. $77,000,000 Bank of America Canada
Suite 1900
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. By:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ -------------------------------------
▇▇▇ ▇▇▇ Name:
Title:
By:
-------------------------------------
Name:
Title:
The Chase Manhattan Bank of U.S. $77,000,000 The Chase Manhattan Bank of Canada
Canada
1 First Canadian Place By:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ -------------------------------------
Suite 6900 Name:
Toronto, Ontario Title:
M5X 1A4
By:
-------------------------------------
Name:
Title:
84
-2-
NAME AND LENDING OFFICE OF
LENDER COMMITMENT AMOUNT EXECUTION
-------------------------- ----------------- ---------
Royal Bank of Canada U.S. $77,000,000 Royal Bank of Canada
▇▇▇▇ ▇▇▇▇▇
▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇.▇. By:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ -------------------------------------
▇▇▇ ▇▇▇ Name:
Title:
By:
-------------------------------------
Name:
Title:
The Toronto-Dominion Bank U.S. $77,000,000 The Toronto-Dominion Bank
Suite 800
Home Oil Tower By:
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇.▇. -------------------------------------
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Name:
▇▇▇ ▇▇▇ Title:
By:
-------------------------------------
Name:
Title:
Bank of Tokyo - Mitsubishi U.S. $42,000,000 Bank of Tokyo - Mitsubishi (Canada)
(Canada)
Suite 2410 By:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ -------------------------------------
Vancouver, British Columbia Name:
V6C 3L1 Title:
By:
-------------------------------------
Name:
Title:
Credit Lyonnais Canada U.S. $42,000,000 Credit Lyonnais Canada
Suite 2050
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇.▇. By:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ -------------------------------------
▇▇▇ ▇▇▇ Name:
Title:
By:
-------------------------------------
Name:
Title:
Societe Generale (Canada) U.S. $42,000,000 Societe Generale (Canada)
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ By:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ -------------------------------------
▇▇▇ ▇▇▇ Name:
Title:
By:
-------------------------------------
Name:
Title:
85
-3-
NAME AND LENDING OFFICE OF
LENDER COMMITMENT AMOUNT EXECUTION
-------------------------- ----------------- ---------
Hongkong Bank of Canada U.S. $24,500,000 Hongkong Bank of Canada
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ By:
▇▇▇ ▇▇▇ -------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
The Industrial Bank of Japan U.S. $24,500,000 ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇)
(▇▇▇▇▇▇)
Suite 1220 By:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ -------------------------------------
Vancouver, British Columbia Name:
V6C 2X8 Title:
By:
-------------------------------------
Name:
Title:
▇▇ ▇▇▇▇▇▇ Canada U.S. $24,500,000 ▇▇ ▇▇▇▇▇▇ Canada
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ By:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ -------------------------------------
▇▇▇ ▇▇▇ Name:
Title:
By:
-------------------------------------
Name:
Title:
Paribas Bank of Canada U.S. $24,500,000 Paribas Bank of Canada
Royal Trust Tower
Suite 4100, ▇.▇. ▇▇▇ ▇▇ By:
Toronto-Dominion Centre -------------------------------------
Toronto, Ontario Name:
▇▇▇ ▇▇▇ Title:
By:
-------------------------------------
Name:
Title:
86
SCHEDULE B
COMPLIANCE CERTIFICATE
TO: [LIST LENDERS] and Bank of Montreal, as Agent
--------------------------------------------------------------------------------
This Certificate of Compliance is given pursuant to the terms of the loan
agreement (the "Loan Agreement") dated July 18, 1997 between the Lenders named
therein, the Agent and Gulf Canada Resources Limited with respect to the
Fiscal Quarter ended ________________________. Unless otherwise defined herein
or the context otherwise requires, all terms used in this Certificate of
Compliance shall have the same meaning herein as in the Loan Agreement. The
undersigned hereby certifies, on behalf of the Borrower, that:
1. the representations and warranties of the undersigned
contained in subsections 7.1(a), (c), (d), (e), (g) and (p) of the Loan
Agreement are true and correct on and as of the date hereof as though
made on and as of the date hereof;
2. all of the covenants of the undersigned contained in the Loan
Agreement together with all of the conditions precedent to a Drawdown
(if applicable) and all other terms and conditions contained in the
Loan Agreement have been fully complied with;
3. no Event of Default has occurred and remains outstanding and to
the best of the knowledge, information and belief of the undersigned
(after due enquiry), no event has occurred and is continuing which with
the passing of time, the giving of notice or both, would constitute
an Event of Default;
4. as of [INSERT DATE OF END OF FISCAL QUARTER]:
(a) Equity of Gulf Cdn.$
-------------------------
(b) Tangible Net Worth of Gulf Cdn.$
-------------------------
(c) Minimum Tangible Net Worth Cdn.$
-------------------------
(d) Total Senior Debt Cdn.$
-------------------------
(e) Cumulative Restricted EBITDA Cdn.$
-------------------------
(f) Acquisition EBITDA Cdn.$
-------------------------
(g) Disposition EBITDA Cdn.$
-------------------------
87
-2-
(h)
Total Senior Debt
----------------------------------------
(Cumulative )
(Restricted + Acquisition - Disposition) = -----------------
( EDITDA EBITDA EBITDA )
(i) The Senior Debt rating assigned by:
(i) Standard & Poor's
-------------------------
(ii) ▇▇▇▇▇'▇
-------------------------
(iii) DBRS
-------------------------
(iv) CBRS
-------------------------
The undersigned hereby certifies, on behalf of the Borrower, that:
1. set forth in Exhibit I hereto are the names of all of the Unrestricted
Subsidiaries (excepting only Subsidiaries of Unrestricted Subsidiaries)
as of [INSERT DATE OF END OF FISCAL QUARTER] together with, in parenthesis,
the paragraph of the definition of "Unrestricted Subsidiaries" set forth in
the Loan Agreement pursuant to which such Subsidiary constitutes an
Unrestricted Subsidiary;
2. set forth in Exhibit II hereto are the names of all of the Restricted
Subsidiaries as of [INSERT DATE OF END OF FISCAL QUARTER];
3. the aggregate of the Transaction Prices for assets acquired from and
including the first day of the Previous Four Fiscal Quarters was
$_______________;
4. the aggregate of the Transaction Prices for assets disposed of from and
including the first day of the Previous Four Fiscal Quarters was
$_________________________.
DATED the __ day of ___, 199_.
GULF CANADA RESOURCES LIMITED
By:
-------------------------
Name:
Title:
88
SCHEDULE C
DRAWDOWN NOTICE
TO: Bank of Montreal (the "Agent")
FROM: Gulf Canada Resources Limited (the "Borrower")
--------------------------------------------------------------------------------
This Drawdown Notice is given pursuant to the terms of the loan agreement (the
"Loan Agreement") dated July 18, 1997 between the Lenders named therein, the
Agent and the Borrower. Unless otherwise defined herein or the context
otherwise requires, all terms used in this Drawdown Notice shall have the same
meaning herein as in the Loan Agreement.
Notice is hereby given pursuant to the provisions of Section 2.4 of the Loan
Agreement that the Borrower requests a Drawdown or Drawdowns as follows:
Borrowing:
---------
First Drawdown:
Date of Drawdown:
Currency:
-------------------------
Amount:
-------------------------
Drawdown Type:
-------------------------
Libor Interest Period (in months): [IF APPLICABLE]
Bankers' Acceptance Term (in days): [IF APPLICABLE]
Bankers' Acceptance Maturity Date: [IF APPLICABLE]
Conversion:
----------
Pursuant to subsection 2.11 ([DESIGNATE SUBSECTION]) to convert on [INSERT DATE
OF CONVERSION] the amount of $ [SPECIFY CURRENCY] [SPECIFY AMOUNT] of a
[SPECIFY TYPE]
Drawdown into:
-------------------------
Drawdown Type:
-------------------------
Libor Interest Period (in months): [IF APPLICABLE]
Bankers' Acceptance Term (in days): [IF APPLICABLE]
Bankers' Acceptance Maturity Date: [IF APPLICABLE]
89
-2-
Rollover:
--------
Pursuant to Section 2.12, to rollover on [INSERT DATE OF ROLLOVER] the [LIBOR
DRAWDOWN/BANKERS' ACCEPTANCE] as follows:
Amount
-------------------------
Currency (if Bankers' Acceptance):
-------------------------
Libor Interest Period (in months): [IF APPLICABLE]
Bankers' Acceptance Term (in days): [IF APPLICABLE]
Bankers' Acceptance Maturity Date: [IF APPLICABLE]
into a [LIBOR DRAWDOWN/BANKERS' ACCEPTANCE] as follows:
Amount:
-------------------------
Currency (if Bankers' Acceptance):
-------------------------
Libor Interest Period (in months): [IF APPLICABLE]
Bankers' Acceptance Term (in days): [IF APPLICABLE]
Bankers' Acceptance Maturity Date: [IF APPLICABLE]
[ADDITIONAL DRAWDOWNS IN SAME FORM AS REQUIRED]
The undersigned hereby certifies, on behalf of the Borrower, that:
1. the representations and warranties of the Borrower contained in
subsections 7.1 (a), (c), (d), (e), (g) and (p) of the Loan Agreement are true
and correct on and as of the date of this Drawdown Notice as though made on and
as of the date of this Drawdown Notice;
2. all of the covenants of the Borrower contained in the Loan Agreement
together with all of the conditions precedent to a Drawdown and all other terms
and conditions contained in the Loan Agreement have been fully complied with
[EXCEPT AS SET FORTH IN EXHIBIT I]; and
3. no Event of Default has occurred and remains outstanding and (other than
in the case of a Conversion or Rollover, provided, that in the case of a
Conversion or Rollover into a Bankers' Acceptance Drawdown or Libon Drawdown,
the maturity date or period shall not extend beyond the earliest date upon which
it would constitute an Event of Default) to the best of the knowledge,
information and belief of the undersigned (after due enquiry), no event has
occurred
90
-3-
and is continuing which with the giving of notice, the passing of time or both,
would constitute an Event of Default.
DATED the ___ day of ___, 199___.
GULF CANADA RESOURCES LIMITED
By:
-------------------------
Name:
Title:
91
SCHEDULE D
BANKERS' ACCEPTANCE UNDERTAKING
To: [LIST LENDERS]
(individually a "Lender" and collectively, the "Lenders")
--------------------------------------------------------------------------------
Dear Sirs:
In consideration of ten dollars ($10) now paid by each Party to the other (the
receipt and sufficiency of which are hereby acknowledged) and in consideration
of the Lender delivering from time to time to the undersigned (the "Borrower")
bankers' acceptance forms in blank or discount note forms in blank (collectively
the "bankers' acceptance forms") to be signed by the Borrower and subsequently
returned to the Lender to be completed by such Lender for such amounts as the
Borrower may from time to time request pursuant to the terms of the loan
agreement dated as of July 18, 1997 between the Borrower, the Lenders as named
therein and Bank of Montreal, as the Agent, as amended from time to time (the
"Loan Agreement"), the parties hereto hereby agree as follows:
1. The Borrower shall hold and use prudently the bankers' acceptance forms
delivered to it in blank from time to time and shall return them from time to
time to the Lender, properly pre-signed and pre-endorsed and in sufficient
quantities to be dealt with by each Lender in conformity with the Loan
Agreement and this Agreement. The Lender shall provide to the Borrower written
acknowledgement of the receipt of such pre-signed and pre- endorsed bankers'
acceptance forms.
2. The Lender shall deal prudently with any bankers' acceptance forms pre-
signed and pre-endorsed by the Borrower and delivered from time to time by the
Borrower and shall use them only in accordance with the instructions of the
Borrower given to the Agent and in turn by the Agent to the Lender, in
conformity with the Loan Agreement.
3. In accordance with the instructions given from time to time by the
Borrower, the Lender is hereby authorized to complete the aforementioned
bankers' acceptance forms and, in the case of any such bankers' acceptance form
which, upon purchase by a Bank, constitutes a Bankers Acceptance, to provide its
acceptance thereon, the whole as provided in and subject to the Loan Agreement.
4. Except as provided in paragraph 5 below, the Borrower shall pay on demand
to the Agent for the account of each Lender at the Payment Office the face
amount of any bankers' acceptance form subsequently presented to such Lender
for payment and paid by such Lender or held by such Lender at maturity, that
has been unlawfully issued or used or put into circulation fraudulently or
without authority, and shall indemnify such Lender against any loss, cost,
damage, expense or claim regardless of by whomsoever made, that such Lender
may suffer or incur by reason of any fraudulent, unauthorized or unlawful
issue or use of any such bankers' acceptance form.
92
-2-
5. The provisions of paragraph 4 shall not apply in respect of any
fraudulent, unauthorized or unlawful issue or use of any such bankers'
acceptance form which is caused by the negligence or wilful act or omission of
the Agent or a Lender or any of their respective officers, employees, agents or
representatives or which occurs as a result of the Agent or a Lender or any of
their respective officers, employees, agents or representatives failing to use
the same standard of care in the custody of such bankers' acceptance form as it
uses in the custody of its own property of a similar nature.
6. Neither the Agent nor any Lender shall be responsible or liable for any
failure to make credit available by way of Bankers' Acceptances under the terms
of the Loan Agreement if such failure is due to the failure of the Borrower to
return duly pre-signed and (in the case of bankers' acceptances) pre-endorsed
bankers' acceptance forms to the Lender on a timely basis following a request
by the Lender.
7. On request by the Agent on behalf of the Lenders, the Borrower shall
return to the Lenders all bankers' acceptance forms then held by the Borrower,
provided that all such bankers' acceptance forms which have been pre-signed or
pre-endorsed by the Borrower may be cancelled prior to their return.
8. On request by the Borrower made to the Agent, a Lender shall return all
pre-signed or pre-endorsed bankers' acceptance forms held by such Lender and
not yet issued in accordance with the Borrower's instructions.
93
-3-
Unless otherwise defined herein or the context otherwise requires, all terms
used herein shall have the same meaning herein as in the Loan Agreement. This
Agreement shall benefit not only the parties hereto but also all other Persons
which may, from time to time, become Lenders in accordance with the provisions
of the Loan Agreement and, as such, are to receive bankers' acceptance forms.
Dated at Calgary, Alberta as of the __ day of ___, 1997.
GULF CANADA RESOURCES LIMITED
By:
-------------------------
Name:
Title:
c/s
By:
-------------------------
Name:
Title:
Accepted at Calgary, Alberta as of the ___ day of ___, 1997.
BANK OF MONTREAL
By:
-------------------------
Name:
Title:
(other signature pages depend on Lenders)
94
SCHEDULE E
EXTENSION AGREEMENT
THIS EXTENSION AGREEMENT (the "Agreement"), dated as of __, 199_, is among GULF
CANADA RESOURCES LIMITED (the "Borrower"); each of the banks Party to the
hereinafter referenced Loan Agreement who have executed this Agreement below
(the "Lenders"); and BANK OF MONTREAL, as agent (in such capacity, together
with its successors and assigns in such capacity, the "Agent").
RECITALS:
A. The Borrower, the Agent and the Lenders have entered into that certain
loan agreement dated July 18, 1997 (as such may be amended, supplemented,
restated or otherwise modified from time to time, the "Loan Agreement").
Unless otherwise defined herein or the context otherwise requires, all terms
used herein shall have the same meaning herein as in the Loan Agreement);
B. The current Term Out Date in respect of the Lenders is _______ (the
"Current Term Out Date"). Pursuant to Section 2.1 of the Loan Agreement, the
Borrower has requested that the Lenders extend the Term Out Date until that
certain date which is _______________ [INSERT DATE OR NUMBER OF DAYS, IN EITHER
CASE, NOT IN EXCESS OF 364 DAYS FROM THE DATE OF CONFIRMATION];
C. Subject to the conditions set forth herein, the undersigned Lenders
have agreed to such extension;
NOW, THEREFORE, in consideration of the premises herein contained and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. The Borrower hereby represents and warrants that the representations
and warranties contained in subsections 7.1(a), (c), (d), (e), (g) and (p) of
the Loan Agreement are true and correct on and as of the date hereof as though
made on and as of the date hereof and no Event of Default has occurred and
remains outstanding and to the best of the knowledge, information and belief of
the undersigned (after due enquiry) on behalf of the Borrower, no event has
occurred and is continuing which, with the giving of notice, the passing of
time or both, would constitute an Event of Default.
2. Subject to the conditions that the representations and warranties set
forth in Section 1 above are true and correct on the date hereof, the Term Out
Date is hereby extended pursuant to Section 2.1 of the Loan Agreement with
respect to the Commitments of the Lenders to the [INSERT DATE OR NUMBER OF
DAYS, IN EITHER CASE, NOT IN EXCESS OF 364 DAYS FOLLOWING THE DATE OF
CONFIRMATION].
95
-2-
3. This Agreement may be executed in several counterparts, each of which
shall be deemed to be an original and all of which together shall constitute
but one and the same agreement.
EXECUTED as of the date first written above.
BORROWER:
GULF CANADA RESOURCES LIMITED
By:
-------------------------
Name:
Title:
By:
-------------------------
Name:
Title:
AGENT AND LENDERS:
BANK OF MONTREAL, individually as a
Lender and as Agent
By:
-------------------------
Name:
Title:
By:
-------------------------
Name:
Title:
[LENDERS EXECUTIONS TO BE ADDED]
96
SCHEDULE F
EXTENSION REQUEST
TO: [LIST LENDERS] and Bank of Montreal, as Agent
--------------------------------------------------------------------------------
This Extension Request is given pursuant to the terms of the loan agreement
(the "Loan Agreement") dated July 18, 1997 between the Lenders named therein,
the Agent and Gulf Canada Resources Limited. Unless otherwise defined herein
or the context otherwise requires, all terms used in this Extension Request
shall have the same meaning herein as in the Loan Agreement.
The current Term Out Date in respect of the Lenders listed below is _____, 199_
(the "Current Term Out Date"). Pursuant to Section 2.1 of the Loan Agreement,
the Borrower hereby requests that such Lenders (the "Revolving Lenders") extend
the Term Out Date until that certain date which is ____ [INSERT DATE OR NUMBER
OF DAYS, IN EITHER CASE, NOT IN EXCESS OF 364 DAYS FROM THE DATE OF
CONFIRMATION IN RESPECT OF THIS EXTENSION REQUEST].
Attached hereto are three copies of an Extension Agreement relating to the
subject matter hereof duly completed and executed by the Borrower and a report
prepared by [DESIGNATE QUALIFIED ENGINEERS PROVIDING REPORT] with respect to
the proved and probable reserves attributable to the petroleum and natural gas
interests of Gulf (excluding Unrestricted Subsidiaries) as of [DATE TO BE NOT
EARLIER THAN THE END OF THE LAST FINANCIAL YEAR OF THE BORROWER PRECEDING THE
DATE HEREOF].
The undersigned hereby certifies, on behalf of the Borrower, that:
(a) the representations and warranties contained in subsections
7.1(a), (c), (d), (e), (g) and (p) of the Loan Agreement are true and
correct on and as of the date hereof as though made on and as of the
date hereof;
(b) all of the covenants of the undersigned contained in the Loan
Agreement and all other terms and conditions contained in the Loan
Agreement have been fully complied with, [EXCEPT AS SET FORTH IN
EXHIBIT I]; and
97
-2-
(c) no Event of Default has occurred and remains outstanding and to
the best of the knowledge, information and belief of the undersigned,
no event has occurred and is continuing which with the passing of time,
the giving of notice or both, would constitute an Event of Default.
DATED the __ day of ___, 199_.
GULF CANADA RESOURCES LIMITED
By:
-------------------------
Name:
Title:
98
SCHEDULE G
BANK TRANSFER AGREEMENT
To: Gulf Canada Resources Limited
To: Bank of Montreal, as the Agent
--------------------------------------------------------------------------------
This Agreement is entered into pursuant to Section 12.10 of the loan agreement
dated as of July 18, 1997 (together with all amendments and other
modifications, if any, from time to time thereafter made thereto, the "Loan
Agreement") among Gulf Canada Resources Limited (the "Borrower"); the various
financial institutions (the "Lenders") as are, or shall from time to time
become, parties thereto and Bank of Montreal, as agent, (the "Agent"). Unless
otherwise defined herein or the context otherwise requires, and terms used
herein have the same meaning herein as in the Loan Agreement.
This Agreement constitutes notice to each of you of the assignment and
delegation to __ (the "Assignee") of __% of the Advances and Commitment of __
(the "Assignor") outstanding under the Loan Agreement on the date hereof. After
giving effect to the foregoing assignment and delegation, the Assignor's and
the other Lenders' Commitment Amounts for the purposes of the Loan Agreement
are as set forth opposite such Person's name on the signature pages hereof.
[ADD PARAGRAPH DEALING WITH ACCRUED INTEREST AND FEES WITH RESPECT TO ADVANCES
ASSIGNED.]
The Assignee hereby acknowledges and confirms that it has received a copy of
the Loan Agreement, together with copies of the documents which were required
to be delivered under the Loan Agreement as a condition to the making of the
Advances thereunder. The Assignee further confirms and agrees that in becoming
a Lender and in making its Commitment and Advances under the Loan Agreement,
such actions have and will be made without recourse to, or representation or
warranty by Agent.
Except as otherwise provided in the Loan Agreement, effective as of the date of
acceptance hereof by the Agent:
(a) the Assignee
(i) shall be deemed automatically to have become a party to
the Loan Agreement, have all the rights and obligations of a
"Lender" under the Loan Agreement as if it were an
original signatory thereto to the extent specified in the
second paragraph hereof; and
(ii) agrees to be bound by the terms and conditions set
forth in the Loan Agreement as if it were an original signatory
thereto; and
99
-2-
(b) the Assignor shall be released from any further obligations under
the Loan Agreement accruing thereafter to the extent specified in the
second paragraph hereof.
The Assignee hereby advises each of you of the following administrative details
with respect to the assigned Advances and Commitment and requests the Borrower,
by its signature below, to acknowledge its consent to the assignment and
transfer set forth herein and further requests the Agent and the Borrower to
acknowledge receipt of this document:
(a) Address for Notices:
Institution Name:
Attention:
Lending Office:
Telephone:
Facsimile:
(b) Payment Instructions:
This Agreement may be executed by the Assignor and Assignee in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which taken together shall constitute one and the
same agreement.
Adjusted Commitment Amount [ASSIGNOR]
--------------------------
Unused Commitment __
Advances $__
Commitment Amount $__
By:
-------------------------
Title:
Commitment Amount [ASSIGNEE]
-----------------
100
-3-
Unused Commitment $
------------------------
Advances $
------------------------
Commitment Amount $
------------------------
By:
-------------------------
Title:
Accepted and acknowledged this __ day of ___, 199_.
BANK OF MONTREAL
as Agent
By:
-------------------------
Title:
GULF CANADA RESOURCES LIMITED
By:
-------------------------
Title:
By:
-------------------------
Title:
101
SCHEDULE H
BORROWER'S COUNSEL'S OPINION
[LETTERHEAD OF ▇▇▇▇▇▇▇ ▇▇▇▇▇ VERCHERE]
July 18, 1997
Bank of Montreal Osler, ▇▇▇▇▇▇ & Harcourt
Corporate and Institutional Suite 1900
Financial Services Toronto ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ - ▇▇▇ ▇▇▇. S.W., 24th Floor 333 - 7th Avenue S.W.
Calgary, Alberta ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇
And to the Lenders listed in Schedule A of Loan Agreement
Dear Sirs/Mesdames:
RE: LOAN AGREEMENT MADE AS OF JULY 18, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ RESOURCES
LIMITED, THE LENDERS NAMED THEREIN AND BANK OF MONTREAL, AS AGENT FOR THE
LENDERS
We have acted as counsel to Gulf Canada Resources Limited (the "Borrower") in
connection with a loan agreement made as of July 18, 1997 (the "Loan
Agreement") between the Borrower, the Lenders listed in Schedule A thereto (the
"Lenders") and Bank of Montreal, as agent for the Lenders (the "Agent") which
provides a credit facility to the Borrower.
All capitalized terms used in this opinion letter shall, unless otherwise
defined in this opinion letter, have the meanings ascribed to them in the Loan
Agreement.
In connection with the opinions expressed in this letter we have considered
such questions of law and examined such public and corporate records,
certificates and other documents and conducted such other examinations as we
have considered necessary. In such examinations we have assumed the legal
capacity of all individuals, the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity
to authentic original documents of all documents submitted to us as certified,
conformed, photostatic or facsimile copies.
102
Page 2
The law covered by the opinions expressed in this letter is limited to the laws
of the Province of Alberta and the laws of Canada applicable therein.
On the basis of the foregoing, and subject to the qualifications herein
expressed, we are of the opinion that:
I The Borrower is a body corporate incorporated under the Canada Business
Corporations Act.
II The Borrower has all necessary corporate power and capacity to enter
into the Loan Agreement and to perform its obligations thereunder.
III The execution and delivery of the Loan Agreement and the consummation of
the transactions contemplated therein have been duly authorized by all
necessary corporate action on the part of the Borrower.
IV The Loan Agreement has been duly executed and delivered by the Borrower
and is a legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance with its terms.
V The Borrower is not a party to, bound or affected by or subject to any
provision in its articles or by-laws, or any statutory law or
regulation, which is violated, contravened or breached by, or under
which any default occurs, as a result of the execution, delivery and
performance by it of the Loan Agreement.
VI The indebtedness of the Borrower to the Lenders under the Loan Agreement
constitutes Senior Indebtedness as defined in the Indenture dated as of
January 27, 1994 made between the Borrower and The Bank of New York, as
Trustee, and the Indenture dated as of July 5, 1995 made between the
Borrower and The Bank of New York, as Trustee, (collectively, the
"Subordinated Indentures") relating to the issuance of subordinated
debentures, provided that such indebtedness of the Borrower to the
Lender is not incurred in violation of the provisions of the
Subordinated Indentures. If indebtedness of the Borrower to the Lenders
in the amount of US$700,000,000 were incurred under the Loan Agreement
on the date hereof, such indebtedness would not, to our knowledge,
violate the provisions of the Subordinated Indentures.
VII If indebtedness of the Borrower to the Lenders in the amount of
US$700,000,000 were incurred under the Loan Agreement on the date
hereof, such indebtedness would not, to our knowledge, violate the
provisions of the indenture dated as of July 1, 1989 between the
Borrower and The Bank of New York, as successor trustee to The Chase
Manhattan Bank (National Association) or the indentures dated as of
August 7, 1996 and March 21, 1997
103
Page 3
respectively between the Borrower and The Bank of New York, as trustee
(collectively, the "Senior Indentures").
The foregoing opinions are subject to the qualifications set out below:
7.1 CERTIFICATES OF COMPLIANCE. In expressing the opinion set forth
in paragraph 1 we have relied upon a certificate of compliance dated
July 14, 1997 issued by Industry Canada, a copy of which has been
delivered to you.
7.2 ENFORCEABILITY. The opinion set forth in paragraph 4 is based on the
assumption that the Loan Agreement has been duly authorized,
executed and delivered by, and is enforceable in accordance with its
terms against the Agent and the Lenders and is subject to the
following qualifications:
(a) BANKRUPTCY - enforceability may be limited by bankruptcy,
insolvency, reorganization, receivership, moratorium,
arrangement or winding up laws or other similar laws affecting
the enforcement of creditors' rights generally;
(b) EQUITABLE PRINCIPLES - enforceability may be limited by
equitable principles, including the principle that equitable
remedies, such as specific performance and injunction, may only
be granted in the discretion of a court of competent
jurisdiction;
(c) SEVERABILITY - the validity and enforceability of provisions
inserted in any agreement or instrument which purport to sever
from the agreement or instrument any provision which is
prohibited or unenforceable under applicable law without
affecting the enforceability or validity of the remainder of
the agreement or instrument would be determined only in the
discretion of the court;
(d) REASONABLENESS - notwithstanding any term or condition
contained in the Loan Agreement, a court of competent
jurisdiction may retain the discretion to determine when the
actions of the Lenders or their agents have been conducted in a
"commercially reasonable" manner, and determinations or demands
made by a person in the exercise of a discretion purported to
be given to it may be unenforceable if made in an unreasonable
or arbitrary fashion;
(e) INDEMNITY AND CONTRIBUTION - a court may decline to enforce
rights of indemnity and contribution under the Loan Agreement
which are found to be contrary to public policy;
104
Page 4
(f) LIMITATIONS - enforceability may be limited by restrictions
which may be imposed by law on:
(i) the right of a creditor to receive immediate payment
of amounts stated to be payable on demand or which
have been accelerated;
(ii) the right of a party to the Loan Agreement to enforce
its rights under the Loan Agreement on the basis of a
default of a minor or non-substantive nature, such as
the failure to produce a document in a timely manner;
(iii) the effectiveness of provisions of the Loan Agreement
which provide that delay or failure by a party to
exercise any right, remedy or option will not operate
as a waiver thereof may not be enforceable; and
(g) WAIVERS OF RIGHTS - provisions of the Loan Agreement which
provide for the waiver of certain legal or equitable rights or
which absolve or purport to absolve a party from responsibility
for its acts may not be enforceable.
7.3 RELIANCE ON OFFICER'S CERTIFICATE. In expressing the opinions set
forth in the last sentence of paragraph 6 and in paragraph 7, we have
relied on a certificate of an officer of the Borrower, a copy of which
is attached as Schedule A hereto. In expressing the opinions set forth
in paragraphs 6 and 7, we have also assumed the laws of the State of New
York (which govern the Subordinated Indentures and the Senior
Indentures) are the same as the laws of the Province of Alberta. No
opinion is expressed as to compliance with the provisions of the
Subordinated Indentures and the Senior Indentures at any future date.
7.4 CONCLUSIVE, FINAL OR BINDING. A court is not required to treat as
conclusive, final or binding those certificates and determinations
which the Loan Agreement states are to be so treated.
7.5 CURRENCY QUALIFICATION. Pursuant to the Currency Act (Canada), a
judgment by a court in any province in Canada may be awarded in Canadian
currency only and such judgment may be based on a rate of exchange in
existence on a day other than the day of payment of such judgment.
7.6 INTEREST AFTER JUDGMENT. Under the Judgment Interest Act (Alberta)
interest after judgment may be limited to less than the rate provided
for contractually.
105
Page 5
7.7 DEFAULT INTEREST. We express no opinion as to the enforceability of
any provision which purports to render any person liable for a higher
rate of interest after default than before.
This opinion is given solely for the benefit of the addressees of this
opinion and may not be relied upon in whole or in part by any other person.
Yours very truly,
106
SCHEDULE "A"
CERTIFICATE
TO: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Verchere
Bank of Montreal, as Agent
Osler, ▇▇▇▇▇▇ & Harcourt
This certificate is given in connection with an opinion dated July 18, 1997
delivered by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Verchere to the Bank of Montreal, as Agent for the
Lenders (the "Agent"), and to Osler, ▇▇▇▇▇▇ & Harcourt in connection with the
loan agreement dated July 18, 1997 (the "Loan Agreement") between Gulf Canada
Resources Limited (the "Borrower"), the Agent and the Lenders named in Schedule
A thereto. Unless otherwise defined herein, capitalized terms shall have the
meaning ascribed to them in the Loan Agreement.
The undersigned hereby certifies, on behalf of the Borrower, as follows:
I If indebtedness of the Borrower to the Lenders under the Loan Agreement
were incurred on the date hereof in the amount of US$700,000,000, such
indebtedness would constitute Senior Indebtedness as defined in the
Indenture dated as of January 27, 1994 (the "1994 Indenture") made
between the Borrower and The Bank of New York, as trustee, and the
Indenture dated as of July 5, 1995 (the "1995 Indenture") made between
the Borrower and The Bank of New York, as trustee, (collectively the
"Subordinated Indentures"). Such indebtedness would not violate any of
the provisions of the Subordinated Indentures including, without
limitation, Section 1008 of the 1994 Indenture or Section 1009 of the
1995 Indenture. No Default or Event of Default exists under and as
defined in the Subordinated Indentures.
II If indebtedness of the Borrower to the Lenders under the Loan Agreement
were incurred on the date hereof in the amount of US$700,000,000, such
indebtedness would not violate any of the provisions of the Indenture
dated as of July 1, 1989 made between the Borrower and The Bank of New
York, as successor trustee to The Chase Manhattan Bank (National
Association) or the Indentures dated as of August 7, 1996 and March 21,
1997 respectively between the Borrower and The Bank of New York, as
trustee (collectively, the "Senior Indentures"). No Default or Event of
Default exists under and as defined in the Senior Indentures.
107
Page 2
III The Subordinated Indentures and the Senior Indentures are the only
material agreements relating to borrowed monies to which the Borrower is
a party other than the Loan Agreement and the Existing Acquisition
Facility.
DATED this 18th day of July, 1997.
GULF CANADA RESOURCES LIMITED
By:
-----------------------------------
108
SCHEDULE I
[LENDERS' COUNSELS' OPINION]
[LETTERHEAD OF OSLER, ▇▇▇▇▇▇ & HARCOURT]
July 18, 1997
Bank of Montreal Bank of Montreal
Loan Agency Services First Canadian Centre
After Sales ▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇.▇.
22nd Floor 24th Floor
1 First Canadian Place Calgary, Alberta
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇
And to the Lenders Listed in Schedule A of Loan Agreement
Dear Sirs/Mesdames
RE: LOAN AGREEMENT MADE AS OF JULY 18, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ RESOURCES
LIMITED, THE LENDERS NAMED THEREIN AND BANK OF MONTREAL, AS AGENT FOR THE
LENDERS
We have acted as counsel to Bank of Montreal (the "Agent") in connection with a
loan agreement made as of July 18, 1997 (the "Loan Agreement") between Gulf
Canada Resources Limited (the "Borrower"), the Lenders listed in Schedule A
thereto (the "Lenders") and the Agent, as agent for the Lenders, which provides
a credit facility to the Borrower.
All capitalized terms used in this opinion letter shall, unless otherwise
defined in this opinion letter, have the meanings ascribed to them in the Loan
Agreement.
In connection with the opinions expressed in this letter we have considered
such questions of law and examined such public and corporate records,
certificates and other documents and conducted such other examinations as we
have considered necessary. In such examinations we have assumed the legal
capacity of all individuals, the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity
to authentic original documents of all documents submitted to us as certified,
conformed, photostatic or facsimile copies.
109
Page 2
The law covered by the opinions expressed in this letter is limited to the laws
of the Province of Alberta and the laws of Canada applicable therein.
On the basis of the foregoing and subject to the qualifications herein
expressed, we are of the opinion that:
IV The Borrower is a body corporate incorporated under the Canada Business
Corporations Act.
V The Borrower has all necessary corporate power and capacity to enter into
the Loan Agreement and to perform its obligations thereunder.
VI The execution and delivery of the Loan Agreement and the consummation of
the transactions contemplated therein have been duly authorized by all
necessary corporate action on the part of the Borrower.
VII The Loan Agreement has been duly executed and delivered by the Borrower and
is a legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance with its terms.
VIII The Borrower is not a party to, bound or affected by or subject to any
provision in its articles or by-laws, or any statutory law or
regulation, which is violated, contravened or breached by, or under
which any default occurs, as a result of the execution, delivery and
performance by it of the Loan Agreement.
IX The indebtedness of the Borrower to the Lenders under the Loan Agreement
constitutes Senior Indebtedness as defined in the Indenture dated as of
January 27, 1994 made between the Borrower and The Bank of New York, as
Trustee, and the Indenture dated as of July 5, 1995 made between the
Borrower and The Bank of New York, as Trustee, (collectively, the
"Subordinated Indentures") relating to the issuance of subordinated
debentures, provided that such indebtedness of the Borrower to the Lenders
is not incurred in violation of the provisions of the Subordinated
Indentures. If indebtedness of the Borrower to the Lenders in the amount
of US$700,000,000 were incurred under the Loan Agreement on the date
hereof, such indebtedness would not, to our knowledge, violate the
provisions of the Subordinated Indentures.
X If indebtedness of the Borrower to the Lenders in the amount of
US$700,000,000 were incurred under the Loan Agreement on the date hereof,
such indebtedness would not, to our knowledge, violate the provisions of
the indenture dated as of July 1, 1989 between the Borrower and The Bank
of New York, as successor trustee to The Chase Manhattan Bank (National
Association) or the indentures dated as of August 7, 1996 and March 21,
1997
110
Page 3
respectively between the Borrower and The Bank of New York, as trustee
(collectively, the "Senior Indentures").
The foregoing opinions are subject to the qualifications set out below:
(a) RELIANCE. In expressing the opinions set forth in paragraphs 2, 3,
4 (in respect of due execution and delivery), 5, 6, 7, we have
relied upon the opinions of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Verchere, counsel to the
Borrower, dated the same date as this opinion and delivered to you.
Such opinions are in form and scope satisfactory to us and we are of
the opinion that we and you are justified in relying thereon.I
(b) CERTIFICATES OF COMPLIANCE. In expressing the opinion set forth in
paragraph 1 we have relied upon a certificate of compliance dated
July 14, 1997 issued by Industry Canada, a copy of which has been
delivered to you.
(c) ENFORCEABILITY. The opinion set forth in paragraph 4 is based on the
assumption that the Loan Agreement has been duly authorized,
executed and delivered by, and is enforceable in accordance with its
terms against the Agent and the Lenders and is subject to the
following qualifications:
(i) BANKRUPTCY - enforceability may be limited by bankruptcy,
insolvency, reorganization, receivership, moratorium,
arrangement or winding up laws or other similar laws affecting
the enforcement of creditors' rights generally;
(ii) EQUITABLE PRINCIPLES - enforceability may be limited by
equitable principles, including the principle that equitable
remedies, such as specific performance and injunction, may
only be granted in the discretion of a court of competent
jurisdiction;
(iii) SEVERABILITY - the validity and enforceability of provisions
inserted in any agreement or instrument which purport to sever
from the agreement or instrument any provision which is
prohibited or unenforceable under applicable law without
affecting the enforceability or validity of the remainder of
the agreement or instrument would be determined only in the
discretion of the court;
(iv) REASONABLENESS - notwithstanding any term or condition
contained in the Loan Agreement, a court of competent
jurisdiction may retain the discretion to determine when the
actions of the Lenders or their agents have been conducted in
a "commercially reasonable" manner, and determinations or
demands made by a person in the exercise of a discretion
purported to be given to it may be unenforceable if made in an
unreasonable or arbitrary fashion;
111
Page 4
(v) INDEMNITY AND CONTRIBUTION - a court may decline to enforce
rights of indemnity and contribution under the Loan Agreement
which are found to be contrary to public policy;
(vi) LIMITATIONS - enforceability may be limited by restrictions
which may be imposed by law on:
(A) the right of a creditor to receive immediate payment of
amounts stated to be payable on demand or which have been
accelerated;
(B) the right of a party to the Loan Agreement to enforce its
rights under the Loan Agreement on the basis of a default
of a minor or non-substantive nature, such as the failure
to produce a document in a timely manner;
(C) the effectiveness of provisions of the Loan Agreement
which provide that delay or failure by a party to
exercise any right, remedy or option will not operate as
a waiver thereof may not be enforceable; and
(vii) WAIVERS OF RIGHTS - provisions of the Loan Agreement which
provide for the waiver of certain legal or equitable rights or
which absolve or purport to absolve a party from
responsibility for its acts may not be enforceable.
(d) RELIANCE ON OFFICER'S CERTIFICATE. In expressing the opinions set
forth in the last sentence of paragraph 6 and in paragraph 7, we
have relied on a certificate of an officer of the Borrower, a copy
of which is attached as Schedule A hereto. In expressing the
opinions set forth in paragraphs 6 and 7, we have also assumed the
laws of the State of New York (which govern the Subordinated
Indentures and the Senior Indentures) are the same as the laws of
the Province of Alberta. No opinion is expressed as to compliance
with the provisions of the Subordinated Indentures and the Senior
Indentures at any future date.
(e) CONCLUSIVE, FINAL OR BINDING. A court is not required to treat as
conclusive, final or binding those certificates and determinations
which the Loan Agreement states are to be so treated.
(f) CURRENCY QUALIFICATION. Pursuant to the Currency Act (Canada), a
judgment by a court in any province in Canada may be awarded in
Canadian currency only and such
112
Page 5
judgment may be based on a rate of exchange in existence on a day
other than the day of payment of such judgment.
(g) INTEREST AFTER JUDGMENT. Under the Judgment Interest Act (Alberta)
interest after judgment may be limited to less than the rate
provided for contractually.
(h) DEFAULT INTEREST. We express no opinion as to the enforceability of
any provision which purports to render any person liable for a
higher rate of interest after default than before.
This opinion is given solely for the benefit of the addressees of this opinion
and may not be relied upon in whole or in part by any other person.
Yours very truly,
113
SCHEDULE J
NOTICE OF AMENDMENT OF UNRESTRICTED SUBSIDIARIES
To: [LIST LENDERS] and Bank of Montreal, as Agent
--------------------------------------------------------------------------------
This Notice of Amendment of Unrestricted Subsidiaries is given pursuant to the
terms of the loan agreement (the "Loan Agreement") dated July 18, 1997 between
the Lenders named therein, the Agent and Gulf Canada Resources Limited. Unless
otherwise defined herein or the context otherwise requires, all terms used in
this Notice of Unrestricted Subsidiaries shall have the same meaning herein as
in the Loan Agreement.
Schedule L is hereby amended as follows:
(A) To add as Restricted Subsidiaries: o
(B) To add as Unrestricted Subsidiaries: o
The undersigned hereby certifies that subsection 8.1(l) of the Loan Agreement
would not have been contravened by the Borrower if the changes made above had
occurred prior to the end of the last Fiscal Quarter preceding the date hereof.
DATED the ___ day of ________, 199_.
GULF CANADA RESOURCES LIMITED
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
114
SCHEDULE K
LETTER OF CREDIT DOCUMENTATION
TO: BANK OF MONTREAL, as Agent, and [LIST LENDERS] (the "Lenders")
--------------------------------------------------------------------------------
In consideration of the issuance by the Lenders of a Letter of Credit
substantially according to any Drawdown Notice, the Borrower agrees as follows:
1. The Agent and the Lenders assume no liability or responsibility for the
form, sufficiency, accuracy, genuineness, falsification or legal effect of any
document(s) required pursuant to the Letter of Credit, or for the general
and/or particular conditions stipulated in the document(s) or superimposed
thereon; nor do they assume any liability or responsibility for the
description, quality, delivery, value or existence of the services represented
by any document(s), or for the good faith or acts and/or omissions, solvency,
performance or standing of the beneficiary or any other Person whomsoever; and
the Borrower hereby assumes and undertakes all such risk, including acts of the
users of the Letter of Credit and the Borrower further agrees that the Agent
may hold the delivery of documents conforming to the Letter of Credit as
sufficient evidence of the good faith of the beneficiary and of the services
described therein, without assuming any responsibility in regard to the
services.
2. This Agreement is irrevocable with respect to the Letter of Credit and is
to continue in force and to be applicable to all transactions relating to the
Letter of Credit notwithstanding any change in the composition of the Borrower,
the parties to or parties contemplated in this Agreement including, without
limitation, any change arising from the accession of one or more new partners,
or from the death or succession of any partner or partners or amalgamation of
one or more corporations, and it shall cover any and all amounts that the
Lenders may ultimately be required to pay under the Letter of Credit by reason
of having issued same. The Borrower acknowledges that the Lender's obligations
to pay and/or fulfil any other obligation under the Letter of Credit is not
subject to claims or defence by the Borrower resulting from its relationship
with other parties.
3. The Borrower hereby indemnifies and agrees to hold the Agent and the
Lenders harmless from and against all losses, consequences or damages arising
out of any transmission, including delay and/or loss in transit of any
message(s), letter(s) or document(s) or for delay, mutilation or from
insufficient or incorrect particulars being transmitted or other error(s)
arising in the transmission or delivery of any telecommunication, including
transmission by cable, telegraph, telecopier, wireless or otherwise except to
the extent such losses, consequences or damages arise as a result of gross
negligence or wilful misconduct of the Agent or Lender as the case may be. The
Agent and the Lenders assume no liability or responsibility for errors in
translation and/or interpretation of technical terms, and reserve the right to
transmit Letter of Credit terms without translating them.
115
Page 2
4. In case the expiry date of the Letter of Credit is extended and/or the
amount thereof is increased, and/or any of the terms and conditions are altered
at the Borrower's request or with the Borrower's consent, all the terms of this
Agreement shall remain in full force and effect, without releasing any party
thereto.
5. The rights and powers conferred hereby are in addition to and without
prejudice to any other rights which the Agent or the Lenders may now have or
hereafter acquire from the Borrower or others.
6. This Agreement will be governed and construed in accordance with the laws
of the Province of Alberta and the laws of Canada applicable herein. Should any
provision of this Agreement be illegal or not enforceable under such law, it
shall be considered severable and the Agreement and its conditions shall remain
in full force and effect as if the said provision had never been included.
7. This Agreement shall enure to the benefit of the Agent and each of the
Lenders and their respective successors and assigns, and shall be binding upon
the Borrower and the Borrower's executors, liquidators, administrators,
successors and assigns.
8. Except as otherwise expressly stated, each Letter of Credit is subject to
the current Uniform Customs & Practice for Documentary Credits of the
International Chamber of Commerce, as amended from time to time (the "UCP
Rules") or in the case of a Demand Guarantee, the Letter of Credit is subject
to the terms and conditions of the current "Uniform Rules for Demand
Guarantees" of the ICC. If the provisions of this Agreement conflict with the
UCP Rules, the provisions of this Agreement shall prevail. This Agreement
shall not be construed as limiting any rights of the Agent or the Lenders which
may be set out in separate documentation, between the Agent or the Lenders and
the Borrower, including any credit facility.
116
SCHEDULE L
LIST OF UNRESTRICTED SUBSIDIARIES
CRUSADER GULF MISCELLANEOUS
-------- ------------------
Crusader (Philippines) Pty Ltd. TS, Inc.
Pursuit Exploration Pty Ltd. Asamera (Cyprus) Ltd.
Crusader (Victoria) Pty Ltd. Asamera Hurghada Inc.
Crusader (Ireland) Pty Ltd. Canadian Oil Debco Inc.
Crusirel Ltd. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Ltd.
▇▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇▇▇ Tuba 4 Transport Ltd.
----- 2276496 Canada Limited
Beaufinco Equipment Holdings Ltd.
▇▇▇▇▇ Exploratie Maatscappij BV
CP (E&P) BV
CORRIDOR
--------
Grissik Gas Company Ltd.
Gulf International (Barbados) Inc.
Asamera International (Barbados) Inc.
Gulf Resources (Grissik) Ltd. formerly
Asamera (Overseas) Limited
UNITED STATES RELATED
---------------------
Asamera Oil (US) Inc.
Asamera Petroleum Corporation
Asamera Pipeline Inc.
Asamera Minerals Florida Inc.
MANVILLE RELATED
----------------
Trilogy Italia Corporation
Trilogy France Resources SNC
Trilogy Resources Holding Co. Inc.
Trilogy France Corporation