CANADIAN CREDIT AGREEMENT
_______________________________________________________
NORTHSTAR ENERGY CORPORATION
and
DEVON ENERGY CANADA CORPORATION
as Canadian Borrowers
BANK OF AMERICA CANADA
as Administrative Agent
BANC OF AMERICA SECURITIES LLC
as Lead Arranger
BANC ONE CAPITAL MARKETS, INC.
as Syndication Agent
THE CHASE MANHATTAN BANK
as Documentation Agent
FIRST UNION NATIONAL BANK
as Co-Documentation Agent
and CERTAIN FINANCIAL INSTITUTIONS
as Lenders
_______________________________________________________
US $275,000,000
October 15, 1999
TABLE OF CONTENTS
Page
CREDIT AGREEMENT 1
Section 1.1. Commitments to Make Advances; Canadian Notes 1
Section 1.2. Requests for New Canadian Advances 2
Section 1.3. Continuations and Conversions of Existing
Canadian Advances 4
Section 1.4. Repayments 5
Section 1.5. Interest Rates and Fees. 7
Section 1.6. Extension of Conversion Date. 9
Section 1.7. Conversion to Canadian Term Loan 10
Section 1.8. Non-Accepting Lender 10
Section 1.9. Competitive Bid Loans 11
Section 1.10. Use of Proceeds 13
Section 1.11. Refinancings of Canadian Swing Loans 14
ARTICLE II - Bankers' Acceptances and Letters of Credit 15
Section 2.1. Creation of Bankers' Acceptances 15
Section 2.2. Terms of Acceptance by the Canadian Resident
Lenders 15
Section 2.3. General Procedures for Bankers' Acceptances 18
Section 2.4. Execution of Bankers' Acceptances 19
Section 2.5. Escrowed Funds 19
Section 2.6. Letters of Credit 20
Section 2.7. Requesting Letters of Credit 21
Section 2.8. Reimbursement and Participations 21
Section 2.9. Letter of Credit Fees 21
Section 2.10. No Duty to Inquire 22
Section 2.11. LC Collateral 23
ARTICLE III - Payments to Lenders 24
Section 3.1. General Procedures 24
Section 3.2. Change in Law; Gross Up; Increased Cost and
Reduced Return 25
Section 3.3. Limitation on Types of Canadian Loans 27
Section 3.4. Illegality 28
Section 3.5. Treatment of Affected Loans 28
Section 3.6. Compensation 29
Section 3.7. Change of Applicable Lending Office 29
Section 3.8. Replacement of Lenders 29
Section 3.9. Other Taxes 30
Section 3.10. Currency Conversion and Currency Indemnity 30
ARTICLE IV - Conditions Precedent to Advances 31
Section 4.1. Documents to be Delivered 31
Section 4.2. Additional Conditions Precedent to First
Canadian Loan or First Letter of Credit 32
Section 4.3. Additional Conditions Precedent to all
Canadian Loans and Letters of Credit 33
ARTICLE V - Representations and Warranties 33
Section 5.1. No Default 34
Section 5.2. Organization and Good Standing 34
Section 5.3. Authorization 34
Section 5.4. No Conflicts or Consents 34
Section 5.5. Enforceable Obligations 35
Section 5.6. Full Disclosure 35
Section 5.7. Litigation 35
Section 5.8. Environmental and Other Laws 35
Section 5.9. Names and Places of Business 36
Section 5.10. Canadian Borrowers' Subsidiaries 36
Section 5.11. Title to Properties; Licenses 36
Section 5.12. Solvency 37
Section 5.13. Year 2000 Compliance 37
ARTICLE VI - Affirmative Covenants of Canadian Borrowers 37
Section 6.1. Payment and Performance 37
Section 6.2. Books, Financial Statements and Reports 37
Section 6.3. Other Information and Inspections 38
Section 6.4. Notice of Material Events and Change of
Address 39
Section 6.5. Maintenance of Properties 39
Section 6.6. Maintenance of Existence and Qualifications 40
Section 6.7. Payment of Trade Liabilities, Taxes, etc. 40
Section 6.8. Insurance 40
Section 6.9. Performance on Canadian Borrowers' Behalf 40
Section 6.10. Interest 40
Section 6.11. Compliance with Law 40
Section 6.12. Environmental Matters 41
Section 6.13. Bank Accounts; Offset. 41
Section 6.14. Year 2000 Compliance 41
ARTICLE VII - Negative Covenants of Canadian Borrowers 42
Section 7.1. Indebtedness 42
Section 7.2. Limitation on Liens 43
Section 7.3. Limitation on Mergers 44
Section 7.4. Limitation on Issuance of Securities by
Subsidiaries of US Borrower 44
Section 7.5. Limitation on Restricted Payments 44
Section 7.6. Transactions with Affiliates 44
Section 7.7. Funded Debt to Total Capitalization 44
ARTICLE VIII - Events of Default and Remedies 45
Section 8.1. Events of Default 45
Section 8.2. Remedies 47
ARTICLE IX - Canadian Agent 47
Section 9.1. Appointment, Powers, and Immunities 47
Section 9.2. Reliance by Canadian Agent 48
Section 9.3. Defaults 48
Section 9.4. Rights as Lender 48
Section 9.5. Indemnification 49
Section 9.6. Non-Reliance on Canadian Agent and Other
Lenders 49
Section 9.7. Rights as Lender 49
Section 9.8. Sharing of Set-Offs and Other Payments 50
Section 9.9. Investments 50
Section 9.10. Benefit of Article IX 50
Section 9.11. Resignation 51
Section 9.12. Lenders to Remain Pro Rata 51
ARTICLE X - Miscellaneous 51
Section 10.1. Waivers and Amendments; Acknowledgments 51
Section 10.2. Survival of Agreements; Cumulative Nature 53
Section 10.3. Notices 54
Section 10.4. Payment of Expenses; Indemnity 54
Section 10.5. Parties in Interest 55
Section 10.6. Assignments and Participations 55
Section 10.7. Confidentiality 57
Section 10.8. Governing Law; Submission to Process 58
Section 10.9. Waiver of Judgment Interest Act (Alberta) 58
Section 10.10. Deemed Reinvestment Not Applicable 58
Section 10.11. Limitation on Interest. 58
Section 10.12. Termination; Limited Survival 59
Section 10.13. Severability 60
Section 10.14. Counterparts; Fax 60
Section 10.15. Waiver of Jury Trial, Punitive Damages, etc. 60
Section 10.16. Defined Terms 60
Section 10.17. Annex I, Exhibits and Schedules; Additional
Definitions 60
Section 10.18. Amendment of Defined Instruments 60
Section 10.19. References and Titles 61
Section 10.20. Calculations and Determinations 61
Section 10.21. Construction of Indemnities and Releases 61
Section 10.22. Separate Obligations 61
Section 10.23. Termination of Existing Canadian Agreement 61
Schedules and Exhibits:
Annex I - Defined Terms
Annex II - Lenders Schedule
Schedule 1 - Disclosure Schedule
Schedule 2 - Surety Bonds & Letters of Credit
Exhibit A-1 - Promissory Note
Exhibit A-2 - Canadian Swing Promissory Note
Exhibit B - Borrowing Notice
Exhibit C - Continuation/Conversion Notice
Exhibit D - Certificate Accompanying Financial Statements
Exhibit E - Opinion of Counsel for Restricted Persons
Exhibit F - Assignment and Acceptance Agreement
Exhibit G - [Reserved]
Exhibit H - [Reserved]
Exhibit I - Competitive Bid Request
Exhibit J - Invitation to Bid
Exhibit K - Competitive Bid
Exhibit L - Competitive Bid Accept/Reject Letter
Exhibit M - Competitive Bid Note
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is made as of October 15, 1999, by and
among Northstar Energy Corporation, an Alberta corporation, and
Devon Energy Canada Corporation, an Alberta corporation (herein
collectively, called "Canadian Borrowers"), Bank of America
Canada, individually and as administrative agent (herein called
"Canadian Agent") and the undersigned Lenders. In consideration
of the mutual covenants and agreements contained herein the
parties hereto agree as follows:
ARTICLE I - Canadian Advances
Section 1.1. Commitments to Make Advances; Canadian Notes.
(a) Canadian Loans. Subject to the terms and conditions
hereof, each Lender agrees to extend credit to each Canadian
Borrower by advancing funds to the applicable Canadian Borrower
specified in a Borrowing Notice (herein called such Lender's
"Canadian Revolving Loans" and, with reference to Canadian
Resident Lenders only, accepting or purchasing drafts of Bankers'
Acceptances issued under this Agreement by the applicable
Canadian Borrower specified in a Borrowing Notice (herein called
such Lender's "Bankers' Acceptances"; each Lender's Canadian
Revolving Loans, Canadian Term Loans, and Bankers' Acceptances
are herein collectively called such Lender's "Canadian Advances")
upon Canadian Borrower's request from time to time during the
Canadian Revolving Period, provided that (i) subject to Sections
2.1, 2.2., 3.3, 3.4 and 3.5, all Lenders are requested to make
Canadian Advances of the same Type in accordance with their
respective Percentage Shares and as part of the same Borrowing
and (ii) such Lender's Percentage Share of the Canadian Facility
Usage shall never exceed such Lender's Percentage Share of the
Canadian Maximum Credit Amount. The aggregate amount of all
Canadian Loans in any Borrowing must be an integral multiple of
$100,000 in the Applicable Currency which equals or exceeds
$1,000,000 in the Applicable Currency or must equal the
unadvanced portion of the Canadian Maximum Credit Amount. Each
Canadian Borrower may have no more than ten Borrowings of
Eurodollar Loans outstanding at any time. The obligation of each
Canadian Borrower to repay to each Lender the aggregate amount of
all Canadian Loans (excluding Canadian Swing Loans) made by such
Lender to such Borrower, together with interest accruing in
connection therewith, shall be evidenced by a separate promissory
note (herein called such Lender's "Canadian Note") made, by each
Canadian Borrower payable to the order of such Lender in the form
of Exhibit A-1 with appropriate insertions. The amount of
principal owing on any Lender's Canadian Note at any given time
shall be the aggregate amount of all Canadian Loans theretofore
made by such Lender minus all payments of principal theretofore
received by such Lender on such Canadian Note. Interest on each
Canadian Note shall accrue and be due and payable as provided
herein and therein. Each Lender's Canadian Note shall be due and
payable as provided herein and therein and shall be due and
payable in full on the Canadian Facility Maturity Date.
(b) Swing Line Loans. Subject to the terms and conditions
hereof, Canadian Swing Lender agrees to make loans to each
Canadian Borrower (herein called "Canadian Swing Loans") upon the
applicable Canadian Borrower's request from time to time during
the Canadian Revolving Period, provided that (i) the Canadian
Facility Usage shall never exceed the Canadian Maximum Credit
Amount, and (ii) the aggregate amount of Canadian Swing Loans
outstanding shall never exceed the Canadian Swing Sublimit. The
aggregate amount of all Canadian Swing Loans in any Borrowing
must be an integral multiple of C $100,000 which equals or
exceeds C $1,000,000 or must equal the unadvanced portion of the
Canadian Maximum Credit Amount. The obligation of each Canadian
Borrower to repay to Canadian Swing Lender the aggregate amount
of all Canadian Swing Loans made by Canadian Swing Lender,
together with interest accruing in connection therewith, shall be
evidenced by a separate promissory note (herein called each
Canadian Borrower's "Canadian Swing Note") made by each Canadian
Borrower payable to the order of Canadian Swing Lender in the
form of Exhibit A-2 with appropriate insertions. The amount of
principal owing on each Canadian Swing Note at any given time
shall be the aggregate amount of all Canadian Swing Loans
theretofore made by Canadian Swing Lender minus all payments of
principal theretofore received by Canadian Swing Lender on such
Canadian Swing Note (including as a result of any refinancing
pursuant to Section 1.11). Interest on each Canadian Swing Note
shall accrue and be due and payable as provided herein and
therein. Each Canadian Swing Note shall be due and payable as
provided herein and therein, and shall be due and payable in full
on the Conversion Date. Subject to the terms and conditions
hereof, each Canadian Borrower may borrow, repay, and reborrow
Canadian Swing Loans under the Canadian Agreement during the
Canadian Revolving Period.
Section 1.2. Requests for New Canadian Advances. The
applicable Canadian Borrower must give to Canadian Agent written
notice (or telephonic notice promptly confirmed in writing) of
any requested Borrowing of new Canadian Loans and any requested
Borrowing by way of new Bankers' Acceptances. Each such notice
constitutes a "Borrowing Notice" hereunder and must:
(a) specify (i) the aggregate amount of any such Borrowing
of new Canadian Base Rate Loans and the date on which such
Canadian Base Rate Loans are to be advanced, (ii) the aggregate
amount of any such Borrowing of Canadian Prime Rate Loans and the
date on which such Canadian Prime Rate Loans are to be advanced,
(iii) the aggregate amount of any such Borrowing of new US Dollar
Eurodollar Loans, the date on which such US Dollar Eurodollar
Loans are to be advanced (which shall be the first day of the
Eurodollar Interest Period which is to apply thereto), and the
length of the applicable Eurodollar Interest Period, (iv) the
aggregate amount of any such Borrowing of new Canadian Dollar
Eurodollar Loans, the date on which such Canadian Dollar
Eurodollar Loans are to be advanced (which shall be the first day
of the Eurodollar Interest Period which is to apply thereto), and
the length of the applicable Eurodollar Interest Period, (v) the
aggregate amount of any such Borrowing by way of Bankers'
Acceptances (subject to Section 2.2(f)), and the date on which
such Bankers' Acceptances are to be accepted and the maturity of
such Bankers' Acceptances, or (vi) the aggregate amount of any
such Borrowing of new Canadian Swing Loans and the date on which
such Canadian Swing Loans are to be advanced; and
(b) be received by Canadian Agent (i) in the case of
Canadian Advances other than Canadian Swing Loans, not later than
11:00 a.m., Toronto, Ontario time, on (1) on the Business Day
preceding the day on which any such Canadian Base Rate Loans or
Canadian Prime Rate Loans are to be made, (2) the third Business
Day preceding the day on which any such Eurodollar Loans are to
be made or (3) the third Business Day before such Bankers'
Acceptances are to be issued and (ii) in the case of Canadian
Advances that are Canadian Swing Loans, not later than 2:00 p.m.,
Toronto, Ontario time on the Business Day on which any such
Canadian Swing Loans are to be made.
Each such written request or confirmation must be made in the
form and substance of the "Borrowing Notice" attached hereto as
Exhibit B, duly completed. Each such telephonic request shall be
deemed a representation, warranty, acknowledgment and agreement
by the applicable Canadian Borrower as to the matters which are
required to be set out in such written confirmation. Upon
receipt of any such Borrowing Notice, Canadian Agent shall give
each Lender prompt notice of the terms thereof (excluding
Canadian Swing Loans) not later than 5:00 p.m. Toronto, Ontario
time on the day it receives such Borrowing Notice from the
applicable Canadian Borrower if it receives such Borrowing Notice
by 11:00 a.m., Toronto, Ontario time, otherwise on the next
Business Day. If all conditions precedent to such new Canadian
Advances have been met, (i) each Lender will on the date
requested promptly remit to Canadian Agent by 1:00 p.m. Toronto,
Ontario time its Canadian Advances made in Canadian Dollars to
Canadian Agent's office in Toronto, Canada and its Canadian
Advances made in United States Dollars to the US Account in New
York, New York) in immediately available funds, and upon receipt
of such funds, unless to its actual knowledge any conditions
precedent to such Canadian Advances have been neither met nor
waived as provided herein, Canadian Agent shall promptly make
such Canadian Advances available to the applicable Canadian
Borrower or (ii) each Canadian Resident Lender will accept drafts
of Bankers' Acceptances on the date requested in accordance with
Sections 2.1 through 2.3. Unless Canadian Agent shall have
received prompt notice from a Lender that such Lender will not
make available to Canadian Agent such Lender's new Canadian
Advance, Canadian Agent may in its discretion assume that such
Lender has made such Canadian Advance available to Canadian Agent
in accordance with this section and Canadian Agent may if it
chooses, in reliance upon such assumption, make such Canadian
Advance available to the applicable Canadian Borrower. If and to
the extent such Lender shall not so make its new Canadian Advance
available to Canadian Agent, such Lender and the applicable
Canadian Borrower severally agree to pay or repay to Canadian
Agent within three days after demand the amount of such Canadian
Advance together with interest thereon, for each day from the
date such amount was made available to the applicable Canadian
Borrower until the date such amount is paid or repaid to Canadian
Agent, with interest at (1) the Canadian Prime Rate, if such
Lender is making such payment and (2) the interest rate
applicable at the time to the other new Canadian Advances made on
such date, if a Canadian Borrower is making such repayment;
provided that Canadian Agent gave notice of the terms of the
Borrowing Notice to such Lender in accordance with the terms of
this Section 1.2. If neither such Lender nor such Canadian
Borrower pays or repays to Canadian Agent such amount within such
three-day period, Canadian Agent shall in addition to such amount
be entitled to recover from such Lender and from the applicable
Canadian Borrower, on demand, interest on such Canadian Advance
at the Default Rate applicable thereto, calculated from the date
such amount was made available to such Canadian Borrower. The
failure of any Lender to make any new Canadian Advance to be made
by it hereunder shall not relieve any other Lender of its
obligation hereunder, if any, to make its new Canadian Advance,
but no Lender shall be responsible for the failure of any other
Lender to make any new Canadian Advance to be made by such other
Lender.
Section 1.3. Continuations and Conversions of Existing
Canadian Advances. Subject to the terms of Section 2.3 with
respect to Bankers' Acceptances, the applicable Canadian Borrower
may make the following elections with respect to Canadian
Advances and Canadian Swing Loans already outstanding under this
Agreement: (i) to convert any Type of Canadian Advance to any
other Type of Canadian Advance, provided that any such Conversion
of any Eurodollar Loan must be made on the last day of the
Eurodollar Interest Period applicable thereto and any such
Conversion of a Bankers' Acceptance must be made on the date of
maturity thereof; (ii) to continue Eurodollar Loans beyond the
expiration of such Eurodollar Interest Period by designating a
new Eurodollar Interest Period to take effect at the time of such
expiration, and to rollover any existing Bankers' Acceptance by
designating the new maturity date applicable thereto; and (iii)
to convert Canadian Swing Loans to any Type of Canadian Advances
as a refinancing of such Canadian Swing Loans pursuant to Section
1.11. In making such elections, the applicable Canadian Borrower
may combine existing Canadian Advances made pursuant to separate
Borrowings into one new Borrowing or divide existing Canadian
Advances made pursuant to one Borrowing into separate new
Borrowings, provided that Canadian Borrowers may have no more
than ten Borrowings of US Dollar Eurodollar Loans outstanding at
any time and no more than ten Borrowings of Canadian Dollar
Eurodollar Loans outstanding at any time. To make any such
election, the applicable Canadian Borrower must give to Canadian
Agent written notice (or telephonic notice promptly confirmed in
writing) of any such Conversion or Continuation of existing
Canadian Advances, with a separate notice given for each new
Borrowing. Each such notice constitutes a
"Continuation/Conversion Notice" hereunder and must:
(a) specify the existing Canadian Advances made under this
Agreement which are to be continued or converted;
(b) specify (i) the aggregate amount of any Borrowing of
Canadian Base Rate Loans or Canadian Prime Rate Loans into which
such existing Canadian Advances are to be continued or converted
and the date on which such Continuation or Conversion is to
occur, or (ii) the aggregate amount of any Borrowing of
Eurodollar Loans into which such existing Canadian Advances are
to be continued or converted, the date on which such Continuation
or Conversion is to occur (which shall be the first day of the
Eurodollar Interest Period which is to apply to such Eurodollar
Loans), and the length of the applicable Eurodollar Interest
Period, or (iii) the amount of any Borrowing of Bankers'
Acceptances into which such existing Canadian Advances are to be
continued or converted, the date on which such Continuation or
Conversion is to occur, and the maturity of such Bankers'
Acceptances; and
(c) be received by Canadian Agent not later than 11:00
a.m., Toronto, Ontario time, on (i) the first Business Day
preceding the day on which any such Continuation or Conversion to
Canadian Base Rate Loans or Canadian Prime Rate Loans is to
occur, or (ii) the third Business Day preceding the day on which
any such Continuation or Conversion to Eurodollar Loans is to
occur, or (iii) on the third Business Day preceding the day on
which any such Continuation or Conversion to Bankers' Acceptances
is to occur.
Each such written request or confirmation must be made in the
form and substance of the "Continuation/Conversion Notice"
attached hereto as Exhibit C, duly completed. Each such
telephonic request shall be deemed a representation, warranty,
acknowledgment and agreement by the applicable Canadian Borrower
as to the matters which are required to be set out in such
written confirmation. Upon receipt of any such
Continuation/Conversion Notice, Canadian Agent shall give each
Lender prompt notice of the terms thereof. Each
Continuation/Conversion Notice shall be irrevocable and binding
on the applicable Canadian Borrower. During the continuance of
any Default, Canadian Borrowers may not make any election to
convert existing Canadian Advances or Canadian Swing Loans made
under this Agreement into Eurodollar Loans or Bankers'
Acceptances or continue existing Eurodollar Loans made under this
Agreement as Eurodollar Loans or to rollover existing Bankers'
Acceptances into new Bankers' Acceptances. If (due to the
existence of a Default or for any other reason) the applicable
Canadian Borrower fails to timely and properly give or are
prevented hereunder from giving any Continuation/Conversion
Notice with respect to a Borrowing of existing Eurodollar Loans
or Bankers' Acceptances at least three days prior to the end of
the Eurodollar Interest Period applicable thereto or maturity of
the Bankers' Acceptance, such Eurodollar Loans and Bankers'
Acceptances shall automatically be converted into Canadian Base
Rate Loans (in the case of US Dollar Eurodollar Loans) or
Canadian Prime Rate Loans (in the case of Canadian Dollar
Eurodollar Loans and Bankers' Acceptances) at the end of such
Eurodollar Interest Period. No new funds shall be repaid by the
applicable Canadian Borrower or advanced by any Lender in
connection with any Continuation or Conversion of existing
Canadian Advances pursuant to this section, and no such
Continuation or Conversion shall be deemed to be a new advance of
funds for any purpose; such Continuations and Conversions merely
constitute a change in terms of already outstanding Advances and
the interest rate applicable thereto.
Section 1.4. Repayments.
(a) During Canadian Revolving Period. Subject to the terms
and conditions hereof, either Canadian Borrower may borrow,
repay, and reborrow hereunder during the Canadian Revolving
Period, so long as (i) the applicable Canadian Borrower gives
notice to Canadian Agent by 2:00 p.m., Toronto, Ontario time on
the Business Day immediately preceding the date of prepayment
(and Canadian Agent shall give each Lender notice thereof by 4:30
p.m. Toronto, Ontario time on the date such notice is received
from the applicable Borrower if it receives such Borrowing Notice
by 11:00 a.m., Toronto, Ontario time, otherwise on the next
Business Day) all partial prepayments of principal concurrently
paid on the Canadian Loans are increments of $100,000 in the
Applicable Currency and in an aggregate amount greater than or
equal to $1,000,000 in the Applicable Currency and (ii) the
applicable Canadian Borrower pays all amounts owing in connection
with the prepayment of any Eurodollar Loan owing under
Section 3.6.
(b) During Canadian Term Period.
(i) Optional Prepayments. Either Canadian Borrower
may, upon giving notice to Canadian Agent by 2:00 p.m.,
Toronto, Ontario time on the Business Day immediately
preceding the date of prepayment (and Canadian Agent shall
give each Lender notice thereof by 5:00 p.m. Toronto,
Ontario time on the date such notice is received from the
applicable Canadian Borrower if it receives such notice by
11:00 a.m., Toronto, Ontario time, otherwise on the next
Business Day), from time to time during the Term Period and
without premium or penalty, prepay the Canadian Loans
including Competitive Bid Notes, in whole or in part, so
long as all partial prepayments of principal concurrently
paid on the Canadian Loans are in increments of $100,000 in
the Applicable Currency and in an aggregate amount greater
than or equal to $1,000,000 in the Applicable Currency and
so long as Canadian Borrowers pay all amounts owing in
connection with the prepayment of any Eurodollar Loan owing
under Section 3.6, and provided that no Bankers' Acceptance
may be prepaid prior to its stated maturity date except in
accordance with Section 2.5. Each prepayment of principal
under this section shall be accompanied by all interest then
accrued and unpaid on the principal so prepaid, shall be in
addition to, and not in lieu of, all payments otherwise
required to be paid under the Canadian Loan Documents at the
time of such prepayment, and shall first reduce the semi-
annual scheduled installments (other than the final
installment) during the Term Period in respect of Canadian
Loans that are not Competitive Bid Loans, then reduce the
final installment in respect of Canadian Loans that are not
Competitive Bid Loans, and then, unless otherwise designated
by Canadian Borrowers, reduce the outstanding Competitive
Bid Loans in order of shortest maturity.
(ii) Scheduled Repayments of Principal. Subject to
Section 1.4(b)(iii) during the Term Period, Borrower shall
repay the principal of the Canadian Loans that are not
Competitive Bid Loans in equal semi-annual installments,
each in an amount equal to two and one-half percent (2.5%)
of the outstanding principal balance of the Canadian
Advances on the Conversion Date. Such installments shall be
due and payable on each June 30 and December 31 each year
and in a final installment due and payable on the Canadian
Facility Maturity Date in an amount equal to the entire
unpaid principal balance of such Loans outstanding on the
Canadian Facility Maturity Date.
(iii) Income Tax Act (Canada). Except as otherwise
provided in Section 8.1, in no event shall either Canadian
Borrower be required to repay more than 25% of the principal
amount (as defined in the Income Tax Act (Canada)) of the
Canadian Advances made to it prior to five years and a day
after the Conversion Date, including, but not limited to
payments under Section1.4(b)(ii), 1.4(c) and 1.4(d).
(c) Mandatory Prepayments. Except to the extent permitted
by Section 1.4(d), and subject to Section 1.4(e), if the
aggregate principal amount of the outstanding Canadian
Obligations ever exceeds the Canadian Maximum Credit Amount,
Canadian Borrowers shall immediately prepay the principal of the
Canadian Loans outstanding under the Canadian Agreement in an
amount at least equal to such excess. Each prepayment of
principal under this section shall be accompanied by all interest
then accrued and unpaid on the principal so prepaid. Any
principal or interest prepaid pursuant to this section shall be
in addition to, and not in lieu of, all payments otherwise
required to be paid under the Canadian Loan Documents at the time
of such prepayment.
(d) Currency Fluctuations. Notwithstanding any other
provision of this Agreement, if any Canadian Loan outstanding is
denominated in C$, Canadian Agent shall have the right to
calculate the outstanding Canadian Obligations for all purposes
including making a determination from time to time of the
available undrawn portion of the Canadian Maximum Credit Amount.
If following such calculation, Canadian Agent determines that the
outstanding Canadian Obligations are greater than 105% of the
Canadian Advances permitted hereby to be outstanding at such
time, then Canadian Agent shall so advise Canadian Borrowers and,
subject to Section 1.4(e), Canadian Borrowers shall repay, on the
later of five 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 Canadian Loans permitted
hereby to be outstanding at such time, together with all accrued
interest on the amount so paid.
(e) Application of Prepayment. Any mandatory prepayment of
any principal amount (for the purposes of this Section, as
defined in the Income Tax Act (Canada)) made by a Canadian
Borrower pursuant to Sections 1.4(c) and 1.4(d) or otherwise in
respect of a particular loan, shall reduce the semi-annual
scheduled installments (other than the final installment) during
the Term Period in respect of that loan in inverse order of
maturity. Such mandatory prepayments shall be applied to the
Canadian Loans (other than Bankers' Acceptances and Competitive
Bid Loans) pro rata based on outstanding principal; provided that
if such prepayment of Canadian Loans does not eliminate such
mandatory prepayment obligation, the further repayments shall
apply first to Competitive Bid Loans in order of shortest
maturity, and second to an escrow fund maintained in accordance
with Section 2.5.
Section 1.5. Interest Rates and Fees.
(a) Interest Rates. The Canadian Loans shall bear interest
payable by the applicable Canadian Borrower as follows and all
accrued and unpaid interest on the Canadian Loans shall be due
and payable on the applicable Interest Payment Date at the place
set forth in the Canadian Notes:
(i) Each Canadian Base Rate Loan shall bear interest
on each day outstanding at the Canadian US Dollar Base Rate
in effect on such day.
(ii) Each Canadian Prime Rate Loan shall bear interest
on each day outstanding at the Canadian Prime Rate in effect
on such day.
(iii) Each US Dollar Eurodollar Loan shall bear
interest on each day during the related Eurodollar Interest
Period at the related Adjusted US Dollar Eurodollar Rate in
effect on such day.
(iv) Each Canadian Dollar Eurodollar Loan shall bear
interest on each day during the related Eurodollar Interest
Period at the related Adjusted Canadian Dollar Eurodollar
Rate in effect on such day.
(v) Each Canadian Swing Loan shall bear interest on
each day outstanding at the Canadian Swing Rate for such
Canadian Swing Loan in effect on such day.
(vi) Notwithstanding the foregoing, if an Event of
Default has occurred and is continuing, each Canadian Loan
shall bear interest on each day outstanding at the
applicable Default Rate. Past due payments of principal and
interest shall bear interest at the rates and in the manner
set forth in the Canadian Notes.
(b) Facility Fees. In consideration of each Lender's
commitment to make Canadian Advances under this Agreement,
Canadian Borrowers will pay to Canadian Agent for the account of
each Lender a facility fee determined on a daily basis by
applying (i) the Facility Fee Rate to such Lender's Percentage
Share of the Canadian Maximum Credit Amount on each day during
the Canadian Revolving Period and (ii) the Facility Fee Rate to
such Lender's Percentage Share of the Canadian Facility Usage on
each day from the Conversion Date until the Canadian Facility
Maturity Date. This facility fee shall be due and payable in
arrears on the last day of each Fiscal Quarter and on the
Canadian Facility Maturity Date.
(c) Utilization Fees. In consideration of each Lender's
commitment to make Canadian Advances under this Agreement,
Canadian Borrowers will pay to Canadian Agent for the account of
each Lender a utilization fee determined on a daily basis by
applying (i) a rate of 7.5 Basis Points per annum to such
Lender's Percentage Share of the Canadian Facility Usage on each
day during the term of this Agreement that the Canadian Facility
Usage exceeds thirty-three percent (33%) of the Canadian Maximum
Credit Amount, and (ii) a rate of 15 Basis Points per annum to
such Lender's Percentage Share of the Canadian Facility Usage on
each day during the term of this Agreement that the Canadian
Facility Usage exceeds sixty-six percent (66%) of the Canadian
Maximum Credit Amount. This utilization fee shall be due and
payable in arrears on each Interest Payment Date for Canadian US
Dollar Base Rate Loans and on the date all Canadian Obligations
are repaid in full.
(d) Stamping Fees. In consideration of each Canadian
Resident Lender's commitment to accept or participate in Bankers'
Acceptances under this Agreement, the applicable Canadian
Borrower will pay to Canadian Agent for the account of such
Lender the Stamping Fee Rate multiplied by the face amount of
each Bankers' Acceptance accepted by such Lender under this
Agreement calculated for the number of days in the term of such
Bankers' Acceptance. Such fee shall be due and payable on the
date on which such Bankers' Acceptances are accepted and if such
Canadian Resident Lender is purchasing such Bankers' Acceptance,
such fee shall be deducted from the Discount Proceeds paid to the
applicable Canadian Borrower.
(e) Canadian Agent's Fees. In addition to all other
amounts due to Canadian Agent under the Canadian Loan Documents,
Canadian Borrowers will pay fees to Canadian Agent as described
in a letter agreement dated as of September 16, 1999 between US
Agent, Bank of America Securities LLC, and US Borrower.
Section 1.6. Extension of Conversion Date.
(a) Canadian Borrowers may, at their option and from time
to time during the Canadian Revolving Period, request an offer to
extend the Canadian Revolving Period by delivering to Canadian
Agent a Request for an Offer of Extension not more than ninety
days and not less than forty-five days prior to the then current
Conversion Date. Canadian Agent shall forthwith provide a copy
of the Request for an Offer of Extension to each of the Lenders.
Upon receipt from Canadian Agent of an executed Request for an
Offer of Extension, each Lender shall, within thirty days after
the date of such Lender's receipt of such request from Canadian
Agent, either:
(i) notify Canadian Agent of its acceptance of the
Request for an Offer of Extension, and the terms and
conditions, if any, upon which such Lender is prepared to
extend the Conversion Date; or
(ii) notify Canadian Agent that the Request for an
Offer of Extension has been denied, such notice to forthwith
be forwarded by Canadian Agent to Canadian Borrowers to
allow Canadian Borrowers to seek a replacement lender
pursuant to Section 1.8 (any Lender giving notice of such
denial is herein called a "Non-Accepting Lender"). The
failure of a Lender to so notify Canadian Agent within such
thirty day period shall be deemed to be notification by such
Lender to Canadian Agent that such Lender has denied
Canadian Borrowers' Request for an Offer of Extension.
(b) Provided that all Lenders provide notice to Canadian
Agent under Section 1.6(a) that they accept the Request for an
Offer of Extension, or if there are Non-Accepting Lenders, such
Lenders shall have been repaid pursuant to Section 1.8 or
replacement lenders shall have become parties hereto pursuant to
Section 1.8 and shall have accepted the Request for an Offer of
Extension, such acceptance having common terms and conditions,
Canadian Agent shall deliver to Canadian Borrowers an Offer of
Extension incorporating the said terms and conditions. Such
offer shall be open for acceptance by Canadian Borrowers until
the fifth Business Day immediately preceding the then current
Conversion Date. Upon written notice by Canadian Borrowers to
Canadian Agent accepting an outstanding Offer of Extension and
agreeing to the terms and conditions, if any, specified therein
(the date of such notice of acceptance in Section 1.6 and 1.8
being called the "Extension Date"), the Conversion Date shall be
extended to the date 364 days from the Extension Date and the
terms and conditions specified in such Offer of Extension shall
be immediately effective.
(c) Canadian Borrowers understand that the consideration of
any Request for an Offer of Extension constitutes an independent
credit decision which each Lender retains the absolute and
unfettered discretion to make and that no commitment in this
regard is hereby given by a Lender and that any offer to extend
the Conversion Date may be on such terms and conditions in
addition to those set out herein as the extending Lenders
stipulate.
Section 1.7. Conversion to Canadian Term Loan. Unless
there is an extension of the Canadian Revolving Period in
accordance with Section 1.6, effective at 11:59 p.m. Toronto,
Ontario time on the day immediately preceding the Conversion
Date, and provided that no Event of Default shall have occurred
and be continuing, (i) each Lender's obligation to make new
Canadian Advances, Canadian Swing Lender's obligation to make new
Canadian Swing Loans, and Canadian LC Issuer's obligation to
issue Letters of Credit hereunder shall be canceled
automatically, and (ii) each Lender's Canadian Loans shall become
term Canadian Loans ("Canadian Term Loans") maturing on the
Canadian Facility Maturity Date.
Section 1.8. Non-Accepting Lender. Provided that Lenders
whose Percentage Shares represent more than 50% but less than
100% of the Canadian Maximum Credit Amount provide notice to
Agent under Section 1.6(a) that they accept the Request for an
Offer of Extension, on notice of Canadian Borrowers to Agent,
Canadian Borrowers shall be entitled to choose any of the
following in respect of each Non-Accepting Lender prior to the
expiration of the Canadian Revolving Period, provided that if
Canadian Borrowers do not make an election prior to the
expiration of the Canadian Revolving Period, Canadian Borrowers
shall be deemed to have irrevocably elected to exercise the
provisions of Section 1.8(b)(ii):
(a) (i) the Non-Accepting Lender's obligations to make
Canadian Advances shall be canceled as of the Extension Date, the
Canadian Maximum Credit Amount shall be reduced by the amount so
canceled, and on or prior to the Extension Date the Canadian
Borrowers shall repay in full all Obligations then outstanding to
the Non-Accepting Lender (as defined in Section 1.6(a)(ii)) , or
(ii) replace the Non-Accepting Lender by reaching satisfactory
arrangements with one or more existing Lenders or new Lenders,
for the purchase, assignment and assumption of all Canadian
Obligations and US Obligations of the Non-Accepting Lender,
provided that any new Lender, with, if necessary, any Affiliate,
shall take a pro rata assignment of both Canadian Obligations and
US Obligations, and such Non-Accepting Lender shall be obligated
to sell such Obligations in accordance with such satisfactory
arrangements; or
(b) Canadian Borrowers may elect to revoke and cancel the
Request for an Offer of Extension by giving notice of such
revocation and cancellation to Agent (which shall promptly notify
the Lenders thereof), and concurrently therewith, shall have the
option to (i) cancel the obligations of Lenders under the
Canadian Agreement and, subject to the notice requirements set
forth in Section 1.6(a) and to the provisions of Article III,
repay in full all Canadian Obligations, or (ii) have the
outstanding Canadian Loans that are not Competitive Bid Loans on
the Conversion Date become term loans as provided in Section 1.7.
In connection with any such replacement of a Lender Party
pursuant to this Section 1.8, the applicable Canadian Borrower
shall pay all costs that would have been due to such Lender Party
pursuant to Section 3.6 if such Lender Party's Canadian Advances
had been prepaid at the time of such replacement.
Section 1.9. Competitive Bid Loans.
(a) Either Canadian Borrower may request that each Canadian
Resident Lender submit Competitive Bids (on a several basis) for
requested maturities of thirty days or more to the applicable
Canadian Borrower on any Business Day during the Canadian
Revolving Period, provided that all Canadian Resident Lenders are
requested to make a Competitive Bid on the same basis at the same
time. In order to request Competitive Bids, the applicable
Canadian Borrower shall deliver by hand or facsimile to Canadian
Agent a Competitive Bid Request, to be received by Canadian Agent
not later than 9:00 a.m., Toronto, Ontario time one Business Day
before the date specified for a proposed Competitive Bid Loan. A
Competitive Bid Request that does not conform substantially to
the format of Exhibit I may be rejected in Canadian Agent's sole
discretion, and Canadian Agent shall promptly notify the
applicable Canadian Borrower of such rejection by facsimile.
After receiving an acceptable Competitive Bid Request, Canadian
Agent shall no later than 12:00 noon, Toronto, Ontario time on
the date such Competitive Bid Request is received by Canadian
Agent, by facsimile deliver to Canadian Resident Lenders an
Invitation to Bid substantially in the form of Exhibit J with
respect thereto.
(b) Each Canadian Resident Lender may, in its sole
discretion, make one or more Competitive Bids to Canadian Agent
responsive to each Competitive Bid Request given by the
applicable Canadian Borrower. Each Competitive Bid by a Canadian
Resident Lender must be received by Canadian Agent by facsimile
not later than 9:00 a.m., Toronto, Ontario time on the date
specified for a proposed Competitive Bid Loan. Multiple bids may
be accepted by Canadian Agent. Competitive Bids that do not
conform substantially to the format of Exhibit K may be rejected
by Canadian Agent after conferring with, and upon the instruction
of, the applicable Canadian Borrower, and Canadian Agent shall
notify the bidding Canadian Resident Lender of such rejection as
soon as practicable. If any Canadian Resident Lender shall elect
not to make a Competitive Bid, such Canadian Resident Lender
shall so notify Canadian Agent by facsimile not later than 9:00
a.m., Toronto, Ontario time, on the date specified for a
Competitive Bid Loan; provided, however, that failure by any
Canadian Resident Lender to give such notice shall not cause such
Canadian Resident Lender to be obligated to make any Competitive
Bid Loan and by such failure such Lender shall be deemed to have
rejected such Competitive Bid. A Competitive Bid submitted by a
Canadian Resident Lender shall be irrevocable.
(c) Promptly, and in no event later than 9:30 a.m.,
Toronto, Ontario time, on the date specified for a proposed
Competitive Bid Loan, Canadian Agent shall notify the applicable
Canadian Borrower by facsimile of all the Competitive Bids made,
the Competitive Bid Rate and the principal amount of each
Competitive Bid Loan in respect of which a Competitive Bid was
made, and the identity of each Canadian Resident Lender that made
each Competitive Bid. Canadian Agent shall send a copy of all
Competitive Bids to the applicable Canadian Borrower for its
records as soon as practicable after completion of the bidding
process.
(d) The applicable Canadian Borrower may, subject only to
the provisions hereof, accept or reject any Competitive Bid. The
applicable Canadian Borrower shall notify Canadian Agent by
facsimile pursuant to a Competitive Bid Accept/Reject Letter
whether and to what extent the applicable Canadian Borrower has
decided to accept or reject any or all of the Competitive Bids,
not later than 10:00 a.m., Toronto, Ontario time, on the date
specified for a proposed Competitive Bid Loan; provided, however,
that:
(i) the failure by the applicable Canadian Borrower to
accept or reject any Competitive Bid within the time period
specified herein shall be deemed to be a rejection of such
Competitive Bid,
(ii) the aggregate amount of the Competitive Bids
accepted by the applicable Canadian Borrower shall not
exceed the principal amount specified in the Competitive Bid
Request,
(iii) the aggregate amount of all outstanding
Canadian Loans and Canadian LC Obligations shall never
exceed the Canadian Maximum Credit Amount,
(iv) if the applicable Canadian Borrower shall accept a
Competitive Bid or Competitive Bids made at a particular
Competitive Bid Rate, but the amount of such Competitive Bid
or Competitive Bids shall cause the total amount of
Competitive Bids to be accepted by the applicable Canadian
Borrower to exceed the amount specified in the Competitive
Bid Request, then the applicable Canadian Borrower shall
accept a portion of such Competitive Bid or Competitive Bids
in an amount equal to the amount specified in the
Competitive Bid Request less the amount of all other
Competitive Bids accepted with respect to such Competitive
Bid Request, which acceptance, in the case of multiple
Competitive Bids at such Competitive Bid Rate, shall be made
pro rata in accordance with the amount of each such
Competitive Bid at such Competitive Bid Rate, and
(v) no Competitive Bid shall be accepted for a
Competitive Bid Loan unless such Competitive Bid Loan is in
a minimum principal amount of C $ 5,000,000 or a higher
integral multiple of C $1,000,000; provided, however, that
if a Competitive Bid Loan must be in an amount less than C
$5,000,000 because of the provisions of clause (iv) above,
such Competitive Bid Loan may be for a minimum of C
$1,000,000 or any higher integral multiple thereof, and in
calculating the pro rata allocation of acceptances or
portions of multiple bids at a particular Competitive Bid
Rate pursuant to clause (iv), the amounts shall be rounded
to integral multiples of C $1,000,000 in a manner which
shall be in the sole and absolute discretion of the
applicable Canadian Borrower.
(e) Promptly on each date the applicable Canadian Borrower
accepts a Competitive Bid, Canadian Agent shall notify each
Canadian Resident Lender whether or not its Competitive Bid has
been accepted (and if so, in what amount and at what Competitive
Bid Rate) by facsimile transmission sent by Canadian Agent, and
each successful bidder will thereupon become bound, subject to
the other applicable conditions hereof, to make the Competitive
Bid Loan in respect of which its Competitive Bid has been
accepted. After completing the notifications referred to in the
immediately preceding sentence, Canadian Agent shall notify each
Canadian Resident Lender of the aggregate principal amount of all
Competitive Bids accepted. Each Canadian Resident Lender which
is to make a Competitive Bid Loan shall, before 11:00 a.m.,
Toronto, Ontario time, on the borrowing date specified in the
Competitive Bid Request applicable thereto, make available to
Canadian Agent in immediately available funds the amount of each
Competitive Bid Loan to be made by such Canadian Resident Lender,
and Canadian Agent shall promptly deposit such funds to an
account designated by the applicable Canadian Borrower. As soon
as practicable thereafter, Canadian Agent shall notify each
Canadian Resident Lender of the aggregate amount of Competitive
Bid Loans advanced, the respective Competitive Bid Interest
Periods thereof and Competitive Bid Rate applicable thereto.
(f) The obligation of the applicable Canadian Borrower to
repay to each Canadian Resident Lender the aggregate amount of
all Competitive Bid Loans made by such Canadian Resident Lender,
together with interest accruing in connection therewith, shall be
evidenced by promissory notes (respectively, such Canadian
Resident Lender's "Competitive Bid Note") made by the applicable
Canadian Borrower payable to the order of such Canadian Resident
Lender in the form of Exhibit M, with appropriate insertions.
The amount of principal owing on any Canadian Resident Lender's
Competitive Bid Note at any given time shall be the aggregate
amount of all Competitive Bid Loans theretofore made by such
Canadian Resident Lender thereunder minus all payments of
principal theretofore received by such Canadian Resident Lender
thereon. Interest on each Competitive Bid Note shall accrue and
be due and payable as provided herein and therein. The
applicable Canadian Borrower shall repay on the final day of the
Competitive Bid Interest Period of each Competitive Bid Loan
(such date being that specified by the applicable Canadian
Borrower for repayment of such Competitive Bid Loan in the
related Competitive Bid Request and such date being no later than
six months after the date of the Competitive Bid Loan) the then
unpaid principal amount of such Competitive Bid Loan. Subject to
Section 1.4(b) and the payment of amounts described in Section
3.6, the applicable Canadian Borrower shall have the right to
prepay any principal amount of any Competitive Bid Loan.
(g) No Competitive Bid Loan shall be made within five
Business Days after the date of any other Competitive Bid Loan,
unless the applicable Canadian Borrower and Canadian Agent shall
mutually agree otherwise. If Canadian Agent shall at any time
elect to submit a Competitive Bid in its capacity as a Canadian
Resident Lender, it shall submit such bid directly to the
applicable Canadian Borrower requesting such Competitive Bid one
quarter of an hour earlier than the latest time at which the
other Canadian Resident Lenders are required to submit their bids
to Canadian Agent.
Section 1.10. Use of Proceeds. Canadian Borrowers shall
use all Canadian Advances and Canadian Swing Loans to pay in full
on the Closing Date all indebtedness outstanding under the
Existing Canadian Agreement and thereafter (i) to finance capital
expenditures, (ii) to refinance Matured Canadian LC Obligations
outstanding under this Agreement, (iii) at Northstar Energy's
option, to repay existing institutional indebtedness listed in
Section 7.1(h), and (iv) to provide working capital for its
operations and for other general business purposes. Canadian
Borrowers shall use all Letters of Credit for its general
corporate purposes. In no event shall the funds from any Canadian
Loan or any Letter of Credit be used directly or indirectly by
any Person for personal, family, household or agricultural
purposes or for the purpose, whether immediate, incidental or
ultimate, of purchasing, acquiring or carrying any "margin stock"
(as such term is defined in Regulation U promulgated by the Board
of Governors of the Federal Reserve System) or to extend credit
to others directly or indirectly for the purpose of purchasing or
carrying any such margin stock. Each Canadian Borrower
represents and warrants that such Canadian Borrower is not
engaged principally, or as one of such Canadian Borrower's
important activities, in the business of extending credit to
others for the purpose of purchasing or carrying such margin
stock.
Section 1.11. Refinancings of Canadian Swing Loans.
Canadian Agent, at any time in its sole and absolute discretion
may (and on the Conversion Date Canadian Agent shall), upon
notice given to each Lender by not later than 11:30 a.m.,
Toronto, Ontario time, on any Business Day, request that each
Lender make a Canadian Prime Rate Loan (or another Type of
Canadian Advance if requested by the applicable Canadian Borrower
in accordance with Section 1.2) in an aggregate amount equal to
its Percentage Share of the aggregate unpaid principal amount of
any outstanding Canadian Swing Loans for the purpose of
refinancing such Canadian Swing Loans (in this section called a
"Refinancing Advance"). In any event, not later than 11:30 a.m.,
Toronto, Ontario time, on the penultimate Business Day of each
calendar month, Canadian Agent will notify each Lender of the
aggregate amount of Canadian Swing Loans which are then
outstanding and the amount of the Refinancing Advance required to
be made by each Lender to refinance such outstanding Canadian
Swing Loans (the aggregate amount of such Refinancing Advance to
be made by each Lender shall equal such Lender's Percentage Share
of such outstanding Canadian Swing Loans). Upon the giving of
notices by Canadian Agent described above, each Lender shall
promptly remit to Canadian Agent such Refinancing Advance in the
manner described above in Section 1.2, so long as (a) Canadian
Agent believed in good faith that all conditions to making the
subject Canadian Swing Loan were satisfied at the time such
Canadian Swing Loan was made, or (b) if the conditions to such
Canadian Swing Loan were not satisfied, the satisfaction of such
conditions have been waived in writing by Required Lenders in
accordance with the provisions of this Agreement (collectively,
the "Refinancing Conditions"). The proceeds of the Refinancing
Advances made pursuant to the preceding sentence shall be paid to
Canadian Agent (and not to either Canadian Borrower) and applied
to the payment of principal of the outstanding Canadian Swing
Loans. If and to the extent any Lender shall not so make its
Refinancing Advance, such Lender and the applicable Canadian
Borrower severally agree to pay to Canadian Agent (for delivery
to Canadian Swing Lender) within three days after demand the
amount of such Refinancing Advance together with interest
thereon, for each day from the date such Refinancing Advance was
required to be made until the date such amount is paid to
Canadian Agent, with interest at (1) the Canadian Prime Rate, if
such Lender is making such payment and (2) the interest rate
applicable at the time to the other new Refinancing Advances, if
a Canadian Borrower is making such repayment; provided that
Canadian Agent gave notice of the terms of the refinancing to
such Lender in accordance with the terms of this Section 1.11.
If neither such Lender nor such Canadian Borrower pays to
Canadian Agent (for delivery to Canadian Swing Lender) such
amount within such three-day period, Canadian Swing Lender shall
in addition to such amount be entitled to recover from such
Lender and from the applicable Canadian Borrower, on demand,
interest on such Refinancing Advance at the Default Rate
applicable thereto, calculated from the date such Refinancing
Advance was required to be made. Each Lender's obligation to
make Refinancing Advances pursuant to this Section shall be
absolute and unconditional and shall not be affected by any
circumstances, including, without limitation, (1) any setoff,
counterclaim, recoupment, defense or other right which such
Lender may have against Canadian Agent, Canadian Borrowers or
anyone else for any reason whatsoever; (2) the occurrence or
continuance of an Event of Default or Default; (3) any adverse
change in the condition (financial or otherwise) of either
Canadian Borrower; (4) any breach of this Agreement by either
Canadian Borrower, Canadian Agent or any Lender, except with
respect to the Refinancing Conditions; or (5) any other
circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing; provided, that in no event shall
a Lender be obligated to make a Refinancing Advance pursuant to
this Section if, after giving effect thereto, the outstanding
principal balance of such Lender's Canadian Advances would exceed
its Percentage Share of the Canadian Maximum Credit Amount.
ARTICLE II - Bankers' Acceptances and Letters of Credit
Section 2.1. Creation of Bankers' Acceptances. Upon
receipt of a Borrowing Notice and subject to the provisions of
this Agreement, each Canadian Resident Lender shall accept, in
accordance with its Percentage Share of the requested Borrowing
from time to time such Bankers' Acceptances as Canadian Borrowers
shall request provided that:
(a) Bankers' Acceptances shall be issued on a Business Day;
(b) each Bankers' Acceptance shall have a term of 30, 60,
90 or 180 days (excluding days of grace), as selected by Canadian
Borrowers in the relevant Borrowing Notice provided that each
Bankers' Acceptance shall mature on a Business Day;
(c) the face amount of each Bankers' Acceptance shall be
not less than C$100,000 and in multiples of C$100,000 for any
amounts in excess thereof; and
(d) each Bankers' Acceptance shall be in a form acceptable
to the Canadian Resident Lenders.
Section 2.2. Terms of Acceptance by the Canadian Resident
Lenders.
(a) Delivery and Payment. Subject to Sections 2.3 and 2.4
and only if a valid appointment pursuant to Section 2.2(e) is not
in place, Canadian Borrowers shall pre-sign and deliver to each
Canadian Resident Lender bankers' acceptance drafts in sufficient
quantity to meet Canadian Borrowers' requirements for anticipated
Borrowings by way of Bankers' Acceptances. The applicable
Canadian Borrower shall, at its option, provide for payment to
Canadian Agent for the benefit of Canadian Resident Lenders of
each Bankers' Acceptance on the date on which a Bankers'
Acceptance matures, either by payment of the full face amount
thereof or through utilization of a Conversion to another Type of
Borrowing in accordance with this Agreement, or through a
combination thereof. Each Canadian Borrower waives presentment
for payment of Bankers' Acceptances by Canadian Resident Lenders
and shall not claim from Canadian Resident Lenders any days of
grace for the payment at maturity of Bankers' Acceptances. Any
amount owing by Canadian Borrowers in respect of any Bankers'
Acceptance which is not paid in accordance with the foregoing,
shall, as and from the date on which such Bankers' Acceptance
matures, be deemed to be outstanding hereunder as a Canadian
Prime Rate Loan.
(b) No Liability. Canadian Agent and Canadian Resident
Lenders shall not be liable for any damage, loss or improper use
of any bankers' acceptance draft endorsed in blank except for any
loss arising by reason of Canadian Agent or a Canadian Resident
Lender failing to use the same standard of care in the custody of
such bankers' acceptance drafts as Canadian Agent or such
Canadian Resident Lender use in the custody of their own property
of a similar nature.
(c) Bankers' Acceptances Purchased by Canadian Resident
Lenders. Where the applicable Canadian Borrower so elects in the
Borrowing Notice or Continuation/Conversion Notice, a Canadian
Resident Lender shall purchase Bankers' Acceptances accepted by
it for an amount equal to the Discount Proceeds.
(d) Marketing. Where the applicable Canadian Borrower so
elects in the Borrowing Notice or Continuation/Conversion Notice,
it shall be responsible for, and shall make its own arrangements
with respect to, the marketing of Bankers' Acceptances.
(e) Power of Attorney. To facilitate the procedures
contemplated in this Agreement, each Canadian Borrower appoints
each Canadian Resident Lender from time to time as the attorney-
in-fact of such Canadian Borrower to execute, endorse and deliver
on behalf of such Canadian Borrower drafts or depository bills in
the form or forms prescribed by such Canadian Resident Lender for
Bankers' Acceptances denominated in Canadian Dollars. Each
Bankers' Acceptance executed and delivered by a Canadian Resident
Lender on behalf of a Canadian Borrower shall be as binding upon
such Canadian Borrower as if it had been executed and delivered
by a duly authorized officer of such Canadian Borrower. The
foregoing appointment shall cease to be effective, in respect of
any Canadian Resident Lender regarding a Canadian Borrower, three
Business Days following receipt by such Canadian Resident Lender
of a written notice from such Canadian Borrower revoking such
appointment (which notice shall be copied to the Canadian Agent);
provided that any such revocation shall not affect Bankers'
Acceptances previously executed and delivered by such Canadian
Resident Lender pursuant to such appointment.
(f) Non-resident Lenders Participation in Borrowing of
Bankers' Acceptances by Making Canadian Dollar Eurodollar Loans.
As part of each Borrowing by way of Bankers' Acceptances from
Canadian Resident Lenders, each Non-resident Lender shall, with
respect to its obligations to fund such Borrowing, make a
Canadian Dollar Eurodollar Loan by advancing Canadian Dollars in
the amount of its Percentage Share of such Borrowing having a
Eurodollar Interest Period that is substantially the same as the
period to maturity of the Bankers' Acceptances that are accepted
in such Borrowing by Canadian Resident Lenders in order that all
Borrowings other than Competitive Bid Loans shall remain pro rata
during the term of this Agreement. Such Canadian Dollar
Eurodollar Loan shall otherwise be made on the terms set forth in
Article I with respect to such Type of Loan.
(g) Canadian Dollars Unavailable to Non-resident Lenders.
In the event that (i) either Canadian Borrower has requested a
Borrowing in Canadian Prime Rate Loans or (ii) the Loans in any
Borrowing are automatically converted to Canadian Prime Rate
Loans, and a Non-resident Lender is unable to obtain Canadian
Dollars with which to fund its Percentage Share of such
Borrowing, such Non-resident Lender may, with respect to its
obligations to fund such Borrowing, make a Canadian Base Rate
Loan in an amount equal to the US Dollar Exchange Equivalent of
its Percentage Share of such Borrowing.
(h) Pro-Rata Treatment of Canadian Advances.
(i) Each Canadian Advance 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
Canadian Advances outstanding hereunder to each Lender will,
to the extent possible, thereafter be pro rata in accordance
with such Lender's Percentage Share. The Canadian Agent is
authorized by each Canadian Borrower and each Lender to
determine, in its sole and unfettered discretion, the
portion of each Canadian Advance and each Type of Canadian
Advance to be made available by each Lender and the
application of repayments and reductions of Canadian
Advances to give effect to the provisions of this Section,
provided that no Lender shall, as a result of any such
determination, have a Percentage Share of the Canadian
Advances which is in excess of its Percentage Share of the
Canadian Maximum Credit Amount.
(ii) 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 C $100,000,
the Canadian Agent is authorized by each Canadian Borrower
and each Lender to make such allocation as the Canadian
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 C $100,000, then the Canadian Agent may allocate (on a
basis considered by it to be equitable) the excess of such
Canadian Advance over the next lowest whole multiple of C
$100,000 to one Lender, which shall purchase a Bankers'
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 Borrowings by
way of Bankers' Acceptances of a Lender exceed such Lenders'
Percentage Share of the Aggregate Borrowings by way of
Bankers' Acceptances by more than C $100,000 as a result of
such exercise of discretion by the Canadian Agent.
(i) If during the term of any Bankers' Acceptance accepted
by a Lender hereunder the
Applicable Margin changes or an Event of Default occurs and is
continuing, the fee paid to such Lender by the applicable
Borrower pursuant to Section 1.5(d) (in this paragraph called the
"Initial Fee") with respect to such Bankers' Acceptance shall be
recalculated based upon such change in the Applicable Margin or
the existence of such Event of Default for the number of days
during the term of such Bankers' Acceptance that such change is
applicable or such Event of Default exists. If such recalculated
amount is in excess of the Initial Fee then such Canadian
Borrower shall pay to such Lender the amount of such excess, and
if such recalculated amount is less than the Initial Fee, then
the amount of such reduction shall be credited to other amounts
payable by such Canadian Borrower to such Lender.
Section 2.3. General Procedures for Bankers' Acceptances.
(a) Notice. Canadian Borrowers may in the Borrowing Notice
or in a Continuation/Conversion Notice request a Borrowing by way
of Bankers' Acceptances and, if the Canadian Borrower is
responsible for marketing of such Bankers' Acceptances under
Section 2.2(d), by subsequent notice to Canadian Agent provide
Canadian Agent, which shall in turn notify each Canadian Resident
Lender, with information as to the discount proceeds payable by
the purchasers of the Bankers' Acceptances and the party to whom
delivery of the Bankers' Acceptances by each Canadian Resident
Lender is to be made against delivery to each Canadian Resident
Lender of the applicable discount proceeds, but if it does not do
so, Canadian Borrowers shall initiate a telephone call to
Canadian Agent by 10:00 a.m. Toronto, Ontario time on the date of
advance, or the date of the Continuation or Conversion, as
applicable, and provide such information to Canadian Agent. Such
discount proceeds less the fee calculated in accordance with
Section 1.5(d) shall promptly be delivered to the Canadian Agent.
Any such telephone advice shall be subject to Section 1.2 and
shall be confirmed by a written notice of Canadian Borrowers to
Canadian Agent prior to 2:00 p.m. Toronto, Ontario time on the
same day.
(b) Continuations. In the case of a Continuation of
maturing Bankers' Acceptances, issued by a Canadian Resident
Lender, such Canadian Resident Lender, in order to satisfy the
continuing liability of Canadian Borrowers to the Canadian
Resident Lender for the face amount of the maturing Bankers'
Acceptances, shall retain for its own account the Net Proceeds of
each new Bankers' Acceptance issued by it in connection with such
Continuation; and Canadian Borrowers shall, on the maturity date
of the maturing Bankers' Acceptances, pay to Canadian Agent for
the benefit of Canadian Resident Lenders an amount equal to the
difference between the face amount of the maturing Bankers'
Acceptances and the aggregate Net Proceeds of the new Bankers'
Acceptances.
(c) Conversion from Canadian Prime Rate Loans and Canadian
Dollar Eurodollar Loans. In the case of a Conversion from a
Borrowing of Canadian Prime Rate Loans or Canadian Dollar
Eurodollar Loans into a Borrowing by way of Bankers' Acceptances
to be accepted by a Canadian Resident Lender pursuant to Sections
2.1, 2.2 and 2.3, such Canadian Resident Lender, in order to
satisfy the continuing liability of Canadian Borrowers to it for
the principal amount of the Canadian Prime Rate Loans or Canadian
Dollar Eurodollar Loans being converted, shall retain for its own
account the Discount Proceeds of each new Bankers' Acceptance
issued by it in connection with such Conversion; and Canadian
Borrowers shall, on the date of issuance of the Bankers'
Acceptances, pay to Canadian Agent for the benefit of Canadian
Resident Lenders an amount equal to the difference between the
aggregate principal amount of the Canadian Prime Rate Loans or
Canadian Dollar Eurodollar Loans being converted owing to the
Canadian Resident Lenders and the aggregate Discount Proceeds of
such Bankers' Acceptances.
(d) Conversions to Canadian Loans in Canadian Dollars. In
the case of a Conversion of a Borrowing by way of Bankers'
Acceptances into Canadian Loans, each Canadian Resident Lender,
in order to satisfy the liability of the applicable Canadian
Borrower to it for the face amount of the maturing Bankers'
Acceptances, shall record the obligation of the applicable
Canadian Borrower to it as a Canadian Prime Rate Loan, unless the
applicable Canadian Borrower provide for payment to Canadian
Agent for the benefit of Canadian Resident Lenders of the face
amount of the maturing Bankers' Acceptance in some other manner
acceptable to Canadian Resident Lenders, including Conversion to
another Type of Canadian Loan pursuant to a
Continuation/Conversion Notice.
(e) Conversion from or to Canadian Loans in U.S. Dollars.
In the case of a conversion of Bankers' Acceptances from or to a
Canadian Base Rate Loans or US Dollar Eurodollar Loans, the
parties to which this Section applies shall follow the notice
procedures set out in Section 1.3 and the funding procedures set
out in Section 2.3 (c) and (d) without netting of funds.
(f) Authorization. Canadian Borrowers hereby authorize
each Canadian Resident Lender to complete, stamp, hold, sell,
rediscount or otherwise dispose of all Bankers' Acceptances
accepted by it pursuant to this Section in accordance with the
instructions provided by Canadian Borrowers pursuant to Section
1.3, as applicable.
(g) Depository Notes. The parties agree that in the
administering of Bankers' Acceptances, each Lender may avail
itself of the debt clearing services offered by a clearing house
for depository notes pursuant to the Depository Bills and Notes
Act (Canada) and that the procedures set forth in Article II be
deemed amended to the extent necessary to comply with the
requirements of such debt clearing services.
Section 2.4. Execution of Bankers' Acceptances. The
signatures of any authorized signatory on Bankers' Acceptances
may, at the option of Canadian Borrowers, be reproduced in
facsimile and such Bankers' Acceptances bearing such facsimile
signatures shall be binding on Canadian Borrowers as if they had
been manually signed by such authorized signatory.
Notwithstanding that any person whose signature appears on any
Bankers' Acceptance as a signatory may no longer be an authorized
signatory of Canadian Borrowers at the date of issuance of a
Bankers' Acceptance, and notwithstanding that the signature
affixed may be a reproduction only, such signature shall
nevertheless be valid and sufficient for all purposes as if such
authority had remained in force at the time of such issuance and
as if such signature had been manually applied, and any such
Bankers' Acceptance so signed shall be binding on Canadian
Borrowers.
Section 2.5. Escrowed Funds. Upon the occurrence of an
Event of Default and an acceleration of the Canadian Obligations
under Section 8.1 or upon a prepayment permitted under Section
1.4, Canadian Borrowers shall forthwith pay to Canadian Agent for
deposit into an escrow account maintained by and in the name of
Canadian Agent for the benefit of Canadian Resident Lenders in
accordance with their Percentage Shares an amount equal to the
Canadian Resident Lenders' maximum potential liability (as
determined by Canadian Agent) under then outstanding Bankers'
Acceptances (the "Escrow Funds"). The Escrow Funds shall be held
by Canadian Agent for set-off against future Canadian Obligations
of Canadian Borrowers and pending such application shall bear
interest at the rate declared by Canadian Agent from time to time
as that payable by it in respect of deposits for such amount and
for such period relative to the maturity date of the Bankers'
Acceptances, as applicable. If such Event of Default is either
waived or cured in compliance with the terms of this Agreement,
then the Escrow Funds, together with any accrued interest to the
date of release, shall be forthwith released to Canadian
Borrowers.
Section 2.6. Letters of Credit. Subject to the terms and
conditions hereof, any Canadian Borrower may during the Canadian
Revolving Period request Canadian LC Issuer to issue one or more
Letters of Credit denominated in either Canadian Dollars or US
Dollars, provided that, after taking such Letter of Credit into
account:
(a) the Canadian Facility Usage does not exceed the
Canadian Maximum Credit Amount at such time;
(b) the aggregate amount of Canadian LC Obligations arising
from Letters of Credit issued under this Agreement at such time
does not exceed the Canadian LC Sublimit;
(c) the expiration date of such Letter of Credit is prior
to the end of the Canadian Revolving Period;
(d) such Letter of Credit is to be used for general
corporate purposes of such Canadian Borrower;
(e) such Letter of Credit is not directly or indirectly
used to assure payment of or otherwise support any Indebtedness
of any Person other than Indebtedness of any Restricted Person
permitted by this Agreement;
(f) the issuance of such Letter of Credit will be in
compliance with all applicable governmental restrictions,
policies, and guidelines and will not subject Canadian LC Issuer
to any cost which is not reimbursable under Article III;
(g) the form and terms of such Letter of Credit are
acceptable to Canadian LC Issuer in its reasonable discretion;
and
(h) all other conditions in this Agreement to the issuance
of such Letter of Credit have been satisfied.
Canadian LC Issuer will honor any such request if the foregoing
conditions (a) through (h) (in this Section 2.6 called the "LC
Conditions") have been met as of the date of issuance of such
Letter of Credit. Canadian LC Issuer may choose to honor any
such request for any other Letter of Credit but has no obligation
to do so and may refuse to issue any other requested Letter of
Credit for any reason which Canadian LC Issuer in its sole
discretion deems relevant.
Section 2.7. Requesting Letters of Credit. The applicable
Canadian Borrower must make written application for any Letter of
Credit at least three Business Days before the date on which the
applicable Canadian Borrower desires for Canadian LC Issuer to
issue such Letter of Credit. By making any such written
application the applicable Canadian Borrower shall be deemed to
have represented and warranted that the LC Conditions described
in Section 2.6 will be met as of the date of issuance of such
Letter of Credit. Each such written application for a Letter of
Credit must be made in writing on Canadian LC Issuer's standard
form of Letter of Credit Application, the terms and provisions of
which are hereby incorporated herein by reference (or in such
other form as may mutually be agreed upon by Canadian LC Issuer
and the applicable Canadian Borrower). Three Business Days after
the LC Conditions for a Letter of Credit have been met as
described in Section 2.6 (or if Canadian LC Issuer otherwise
desires to issue such Letter of Credit), Canadian LC Issuer will
issue such Letter of Credit at Canadian LC Issuer's office in
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇. If any provisions of any LC Application
conflict with any provisions of this Agreement, the provisions of
this Agreement shall govern and control.
Section 2.8. Reimbursement and Participations.
(a) Reimbursement by Canadian Borrowers. Each Matured
Canadian LC Obligation arising from a Letter of Credit issued
under the Canadian Agreement shall constitute Canadian Prime Rate
Loans made by Canadian LC Issuer to the applicable Canadian
Borrower even if any condition precedent to the making of such a
Loan shall not have been satisfied. Each Lender shall (in all
circumstances and without set-off or counterclaim) purchase from
Canadian LC Issuer its Percentage Share of such Canadian Prime
Rate Loans and pay to Canadian LC Issuer on demand on the date on
which such Matured LC Obligation arises, in immediately available
funds at Canadian LC Issuer's address for notices hereunder, such
Lender's Percentage Share of such Matured Canadian LC Obligation.
Each Lender's obligation to pay Canadian LC Issuer pursuant to
the terms of this subsection is irrevocable and unconditional.
If any amount required to be paid by any Lender to Canadian LC
Issuer pursuant to this subsection is paid by such Lender to
Canadian LC Issuer within three Business Days after the date such
payment is due, Canadian LC Issuer shall in addition to such
amount be entitled to recover from such Lender, on demand,
interest thereon calculated from such due date at the Canadian
Prime Rate. If any amount required to be paid by any Lender to
Canadian LC Issuer pursuant to this subsection is not paid by
such Lender to Canadian LC Issuer within three Business Days
after the date such payment is due, Canadian LC Issuer shall in
addition to such amount be entitled to recover from such Lender,
on demand, interest thereon calculated from such due date at the
Default Rate.
(b) Calculations. A written advice setting forth in
reasonable detail the amounts owing under this section, submitted
by Canadian LC Issuer to Canadian Borrowers or any Lender from
time to time, shall be conclusive, absent manifest error, as to
the amounts thereof.
Section 2.9. Letter of Credit Fees. In consideration of
Canadian LC Issuer's issuance of any Letter of Credit, the
applicable Canadian Borrower agrees to pay (a) to Canadian LC
Issuer for its own account, a letter of credit fronting fee at a
rate equal to 12.5 Basis Points per annum multiplied by the face
amount of such Letter of Credit, payable on the date of issuance,
and (b) to Canadian Agent, for the account of all Lenders in
accordance with their respective Percentage Shares, a letter of
credit issuance fee calculated by applying the Applicable Margin
to the face amount of all Letters of Credit outstanding on each
day, payable in arrears on the last day of each Fiscal Quarter.
In addition, the applicable Canadian Borrower will pay to LC
Issuer its standard drawing and other processing fees upon any
drawing under a Letter of Credit.
Section 2.10. No Duty to Inquire.
(a) Drafts and Demands. Canadian LC Issuer is authorized
and instructed to accept and pay drafts and demands for payment
under any Letter of Credit without requiring, and without
responsibility for, any determination as to the existence of any
event giving rise to said draft, either at the time of acceptance
or payment or thereafter. Canadian LC Issuer is under no duty to
determine the proper identity of anyone presenting such a draft
or making such a demand (whether by tested telex or otherwise) as
the officer, representative or agent of any beneficiary under any
Letter of Credit, and payment by Canadian LC Issuer to any such
beneficiary when requested by any such purported officer,
representative or agent is hereby authorized and approved.
Canadian Borrowers release each Lender Party from, and agree to
hold each Lender Party harmless and indemnified against, any
liability or claim in connection with or arising out of the
subject matter of this section, which indemnity shall apply
whether or not any such liability or claim is in any way or to
any extent caused, in whole or in part, by any negligent act or
omission of any kind by any Lender Party, provided only that no
Lender Party shall be entitled to indemnification for that
portion, if any, of any liability or claim which is proximately
caused by its own individual gross negligence or willful
misconduct, as determined in a final judgment.
(b) Extension of Maturity. If the maturity of any Letter
of Credit is extended by its terms or by Law or governmental
action, if any extension of the maturity or time for presentation
of drafts or any other modification of the terms of any Letter of
Credit is made at the request of any Restricted Person, or if the
amount of any Letter of Credit is increased at the request of any
Restricted Person, this Agreement shall be binding upon all
Restricted Persons with respect to such Letter of Credit as so
extended, increased or otherwise modified, with respect to drafts
and property covered thereby, and with respect to any action
taken by Canadian LC Issuer, Canadian LC Issuer's correspondents,
or any Lender Party in accordance with such extension, increase
or other modification.
(c) Transferees of Letters of Credit. If any Letter of
Credit provides that it is transferable, Canadian LC Issuer shall
have no duty to determine the proper identity of anyone appearing
as transferee of such Letter of Credit, nor shall Canadian LC
Issuer be charged with responsibility of any nature or character
for the validity or correctness of any transfer or successive
transfers, and payment by Canadian LC Issuer to any purported
transferee or transferees as determined by Canadian LC Issuer is
hereby authorized and approved, and Canadian Borrowers release
each Lender Party from, and agree to hold each Lender Party
harmless and indemnified against, any liability or claim in
connection with or arising out of the foregoing, which indemnity
shall apply whether or not any such liability or claim is in any
way or to any extent caused, in whole or in part, by any
negligent act or omission of any kind by any Lender Party,
provided only that no Lender Party shall be entitled to
indemnification for that portion, if any, of any liability or
claim which is proximately caused by its own individual gross
negligence or willful misconduct, as determined in a final
judgment.
Section 2.11. LC Collateral.
(a) Canadian LC Obligations in Excess of Canadian Maximum
Credit Amount. If, after the making of all mandatory prepayments
required under Section 1.4(c), the outstanding Canadian LC
Obligations will exceed Canadian Maximum Credit Amount, then in
addition to prepayment of the entire principal balance of the
Canadian Loans, Canadian Borrowers will immediately pay to
Canadian LC Issuer an amount equal to such excess. Canadian LC
Issuer will hold such amount to apply against the remaining
Canadian LC Obligations outstanding under the Canadian Agreement
(all such amounts held for Canadian LC Obligations being herein
collectively called "LC Collateral") and the other Canadian
Obligations, and such collateral may be applied from time to time
to any Matured Canadian LC Obligations or other Canadian
Obligations which are due and payable. Neither this subsection
nor the following subsection shall, however, limit or impair any
rights which Canadian LC Issuer may have under any other document
or agreement relating to any Letter of Credit, LC Collateral or
Canadian LC Obligation, including any LC Application, or any
rights which any Lender Party may have to otherwise apply any
payments by Canadian Borrowers and any LC Collateral under
Section 3.1.
(b) Acceleration of Canadian LC Obligations. If the
Canadian Obligations or any part thereof become immediately due
and payable pursuant to Section 8.1 then, unless Required Lenders
otherwise specifically elect to the contrary (which election may
thereafter be retracted by Required Lenders at any time), all
Canadian LC Obligations shall become immediately due and payable
without regard to whether or not actual drawings or payments on
the Letters of Credit have occurred, and the applicable Canadian
Borrower in respect of such Canadian LC Obligations shall be
obligated to pay to Canadian LC Issuer immediately an amount
equal to the aggregate Canadian LC Obligations which are then
outstanding.
(c) Investment of LC Collateral. Pending application
thereof, all LC Collateral shall be invested by Canadian LC
Issuer in such Investments as Canadian LC Issuer may choose in
its sole discretion. All interest on (and other proceeds of)
such Investments shall be reinvested or applied to Matured
Canadian LC Obligations or other Canadian Obligations which are
due and payable. When all Canadian Obligations have been
satisfied in full, including all Canadian LC Obligations, all
Letters of Credit have expired or been terminated, and all of
Canadian Borrowers's reimbursement obligations in connection
therewith have been satisfied in full, Canadian LC Issuer shall
release any remaining LC Collateral. Canadian Borrowers hereby
assign and grant to Canadian LC Issuer a continuing security
interest in all LC Collateral paid by it to Canadian LC Issuer,
all Investments purchased with such LC Collateral, and all
proceeds thereof to secure its Matured Canadian LC Obligations
and the other Canadian Obligations hereunder, each Canadian Note,
and the other US Loan Documents. Canadian Borrowers further
agree that Canadian LC Issuer shall have all of the rights and
remedies of a secured party under the Personal Property Security
Act (Alberta) with respect to such security interest and that an
Event of Default under this Agreement shall constitute a default
for purposes of such security interest. When Canadian Borrowers
are required to provide LC Collateral for any reason and fail to
do so on the day when required, Canadian LC Issuer may without
notice to Canadian Borrowers or any other Restricted Person
provide such LC Collateral (whether by transfers from other
accounts maintained with Canadian LC Issuer, or otherwise) using
any available funds of Canadian Borrowers or any other Person
also liable to make such payments.
ARTICLE III - Payments to Lenders
Section 3.1. General Procedures. Each Canadian Borrower
will make each payment which it owes under the Canadian Loan
Documents to Canadian Agent in Toronto, Canada, if such payment
is being made in Canadian Dollars, or to the US Account, if such
payment is being made in US Dollars, in each case for the account
of the Lender Party to whom such payment is owed, without
set-off, deduction or counterclaim, and in immediately available
funds, provided that any such payment may be made net of any
deduction or withholding for or on account of any withholding tax
which such Canadian Borrower is required at Law to withhold or
deduct except as otherwise provided in Section 3.2(d). Each such
payment must be received by Canadian Agent not later than 11:00
a.m., Toronto, Ontario time, on the date such payment becomes due
and payable. Any payment received by Canadian Agent after such
time will be deemed to have been made on the next following
Business Day. Should any such payment become due and payable on
a day other than a Business Day, the maturity of such payment
shall be extended to the next succeeding Business Day, and, in
the case of a payment of principal or past due interest, interest
shall accrue and be payable thereon for the period of such
extension as provided in the Canadian Loan Document under which
such payment is due. Each payment under a Canadian Loan Document
shall be due and payable at the place provided therein and, if no
specific place of payment is provided, shall be due and payable
at the place of payment of Canadian Agent's Canadian Note. When
Canadian Agent collects or receives money on account of the
Canadian Obligations, Canadian Agent shall distribute all money
so collected or received by 2:00 p.m. Toronto, Ontario time on
the Business Day received, if received by 11:00 a.m. Toronto,
Ontario time, otherwise on the day of deemed receipt, and each
Lender Party shall apply all such money so distributed, as
follows:
(a) first, for the payment of all Canadian Obligations
which are then due (and if such money is insufficient to pay all
such Canadian Obligations, first to any reimbursements due
Canadian Agent under Section 6.9 or 10.4, then to any
reimbursement due any other Lender Party under Section 10.4, and
then to the partial payment of all other Canadian Obligations
then due in proportion to the amounts thereof, or as Lender
Parties shall otherwise agree);
(b) then for the prepayment of amounts owing under the
Canadian Loan Documents (other than principal on the Canadian
Notes) if so specified by Canadian Borrowers;
(c) then for the prepayment of principal on the Canadian
Notes that are not Competitive Bid Notes, together with accrued
and unpaid interest on the principal so prepaid; and
(d) last, for the payment or prepayment of any other
Canadian Obligations.
All payments applied to principal or interest on any Canadian
Note shall be applied first to any interest then due and payable,
then to principal then due and payable, and last to any
prepayment of principal and interest in compliance with Sections
1.4 and 2.6. All distributions of amounts described in any of
subsections (b), (c) or (d) above shall be made by Canadian Agent
pro rata to each Lender Party then owed Canadian Obligations
described in such subsection in proportion to all amounts owed to
all Lender Parties which are described in such subsection;
provided that if any Lender then owes payments to Canadian LC
Issuer for the purchase of a participation under Section 2.8(a)
or to Canadian Agent under Section 9.9, any amounts otherwise
distributable under this section to such Lender shall be deemed
to belong to Canadian LC Issuer, or Canadian Agent, respectively,
to the extent of such unpaid payments, and Canadian Agent shall
apply such amounts to make such unpaid payments rather than
distribute such amounts to such Lender.
Section 3.2. Change in Law; Gross Up; Increased Cost and
Reduced Return.
(a) If, after the date hereof, the adoption of any
applicable Law, rule, or regulation, or any change in any
applicable Law, rule, or regulation, or any change in the
interpretation or administration thereof by any Governmental
Authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any
Lender Party (or its Applicable Lending Office) with any request
or directive (whether or not having the force of Law) of any such
Governmental Authority, central bank, or comparable agency (the
occurrence of any of the foregoing events being herein referred
to as a "Change in Law"):
(i) shall subject such Lender Party (or its Applicable
Lending Office) to any tax, duty, deduction or any other
charge (other than with respect to Withholding Tax as
defined in Section 3.2(d)) with respect to any Eurodollar
Loans, Bankers' Acceptances or Competitive Bid Loans, or its
obligation to make Eurodollar Loans, accept Bankers'
Acceptances or issue Letters of Credit, or change the basis
of taxation of any amounts payable to such Lender Party (or
its Applicable Lending Office) under this Agreement or its
Canadian Note in respect of any Eurodollar Loans, Bankers'
Acceptances or Competitive Bid Loans other than taxes
(including franchise taxes) imposed on the overall net
income or capital of such Lender Party by the jurisdiction
under the Laws of which such Lender Party (or its Applicable
Lending Office) is organized or is a resident for tax
purposes or any political subdivision thereof;
(ii) shall impose, modify, or deem applicable any
reserve, special deposit, assessment, or similar requirement
(other than the Reserve Requirement utilized in the
determination of the Adjusted US Dollar Eurodollar Rate and
Adjusted Canadian Dollar Eurodollar Rate) relating to any
extensions of credit or other assets of, or any deposits
with or other liabilities or commitments of, such Lender
Party (or its Applicable Lending Office), including the
commitment of such Lender Party hereunder; or
(iii) shall impose on such Lender Party (or its
Applicable Lending Office) or the London interbank market
any other condition affecting this Agreement or its Canadian
Notes or any of such extensions of credit or liabilities or
commitments;
and the result of any of the foregoing is to increase the cost to
such Lender Party (or its Applicable Lending Office) of making,
converting into, continuing, or maintaining any Eurodollar Loans,
Bankers' Acceptances or Competitive Bid Loans or to reduce any
sum received or receivable by such Lender Party (or its
Applicable Lending Office) under this Agreement or its Canadian
Notes with respect to any Eurodollar Loans, Bankers' Acceptances
or Competitive Bid Loans, then the applicable Canadian Borrower
shall pay to such Lender Party on demand such amount or amounts
as will compensate such Lender Party for such increased cost or
reduction. If any Lender Party requests compensation by Canadian
Borrowers under this Section 3.2(a), Canadian Borrowers may, by
notice to such Lender Party (with a copy to Canadian Agent),
suspend the obligation of such Lender Party to make or continue
Canadian Advances of the Type with respect to which such
compensation is requested, or to convert Canadian Advances of any
other Type into Canadian Advances of such Type, until the event
or condition giving rise to such request ceases to be in effect
(in which case the provisions of Section 3.5 shall be
applicable); provided that such suspension shall not affect the
right of such Lender Party to receive the compensation so
requested.
(b) If, after the date hereof, Canadian LC Issuer or any
Lender Party shall have determined that the adoption of any
applicable Law, rule, or regulation regarding capital adequacy or
any change therein or in the interpretation or administration
thereof by any Governmental Authority, central bank, or
comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of Law) of any
such Governmental Authority, central bank, or comparable agency,
has or would have the effect of reducing the rate of return on
the capital of such Lender Party or any corporation controlling
such Lender Party as a consequence of the obligations of such
Lender Party hereunder to a level below that which such Lender
Party or such corporation could have achieved but for such
adoption, change, request, or directive (taking into
consideration its policies with respect to capital adequacy),
then from time to time upon demand the applicable Canadian
Borrower shall pay to such Lender Party such additional amount or
amounts as will compensate such Lender Party for such reduction,
but only to the extent that such Lender Party has not been
compensated therefor by any increase in the Adjusted US Dollar
Eurodollar Rate or the Adjusted Canadian Dollar Eurodollar Rate;
provided that if such Lender Party fails to give notice to
Canadian Borrowers of any additional costs within ninety (90)
days after it has actual knowledge thereof, such Lender Party
shall not be entitled to compensation for such additional costs
incurred more than ninety (90) days prior to the date on which
notice is given by such Lender Party.
(c) Each Lender Party shall promptly notify Canadian
Borrowers and Canadian Agent of any event of which it has
knowledge, occurring after the date hereof, which will entitle
such Lender Party to compensation pursuant to this Section and
will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the judgment of such Lender
Party, be otherwise disadvantageous to it. Any Lender Party
claiming compensation under this Section shall furnish to
Canadian Borrowers and Canadian Agent a statement setting forth
the additional amount or amounts to be paid to it hereunder which
shall be conclusive in the absence of manifest error. In
determining such amount, such Lender Party shall act in good
faith and may use any reasonable averaging and attribution
methods.
(d) If by reason of a Change in Law, Canadian Borrowers
shall be required to withhold and remit withholding taxes in
respect of any principal, interest, or other amount paid or
payable by it to or for the account of any Lender Party hereunder
or under any other Canadian Loan Document (a "Withholding Tax"),
(i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable
to additional sums payable under this Section 3.2) such Lender
Party receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the applicable Canadian
Borrower shall make such deductions, and (iii) the applicable
Canadian Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with
applicable Law.
(e) Except as provided in paragraph (d) of this Section
3.2, no Canadian Borrower shall be required to compensate any
Lender Party for any Withholding Taxes which such Canadian
Borrower is required to withhold and remit in respect of any
principal, interest, or other amount paid or payable by it to or
for the account of any Lender Party hereunder or under any other
Canadian Loan Document.
Section 3.3. Limitation on Types of Canadian Loans. If on
or prior to the first day of any Eurodollar Interest Period for
any Eurodollar Loan:
(a) Canadian Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist for
ascertaining the US Dollar Eurodollar Rate or the Canadian Dollar
Eurodollar Rate, as applicable, for such Eurodollar Interest
Period; or
(b) the Required Lenders determine (which determination
shall be conclusive) and notify Canadian Agent that the Adjusted
US Dollar Eurodollar Rate or the Adjusted Canadian Dollar
Eurodollar Rate, as applicable, will not adequately and fairly
reflect the cost to the Lenders of funding Eurodollar Loans or
for such Eurodollar Interest Period;
then Canadian Agent shall give Canadian Borrowers prompt notice
thereof specifying the relevant amounts or periods, and so long
as such condition remains in effect, the Lender Parties shall be
under no obligation to make additional Canadian Loans, continue
Eurodollar Loans or convert Canadian Base Rate Loans or Canadian
Dollar Prime Rate Loans into Eurodollar Loans, and Canadian
Borrowers shall, on the last day(s) of the then current
Eurodollar Interest Period(s) for the outstanding Eurodollar
Loans, either prepay such Canadian Loans or convert such Canadian
Loans into Canadian Base Rate Loans, Canadian Prime Rate Loans,
or Bankers' Acceptances in accordance with the terms of this
Agreement.
Section 3.4. Illegality. Notwithstanding any other
provision of this Agreement, in the event that it becomes
unlawful for any Lender Party or its Applicable Lending Office to
make, maintain, or fund Eurodollar Loans hereunder, then such
Lender Party shall promptly notify Canadian Borrowers thereof and
such Lender Party's obligation to make or continue Eurodollar
Loans and to convert BA's, Canadian Base Rate Loans, Canadian
Prime Rate Loans, or Bankers' Acceptances into Eurodollar Loans
shall be suspended until such time as such Lender Party may again
make, maintain, and fund Eurodollar Loans (in which case the
provisions of Section 3.5 shall be applicable).
Section 3.5. Treatment of Affected Loans. If the
obligation of any Lender Party to make a particular Type of Loan
or to continue, or to convert Canadian Loans of any other Type
into, Canadian Loans of a particular Type shall be suspended
pursuant to Sections 3.2 and 3.4 hereof (Canadian Loans of such
Type being herein called "Affected Loans" and such Type being
herein called the "Affected Type"), such Lender Party's Affected
Loans shall be automatically converted into Canadian Base Rate
Loans with respect to US $ Loans or to Canadian Prime Rate Loans
with respect to C $ Loans on the last day(s) of the then current
Interest Period(s) for Affected Loans (or, in the case of a
Conversion required by Section 3.4 hereof, on such earlier date
as such Lender Party may specify to Canadian Borrowers with a
copy to Canadian Agent) and, unless and until such Lender Party
gives notice as provided below that the circumstances specified
in Sections 3.2 or 3.4 hereof that gave rise to such Conversion
no longer exist:
(a) to the extent that such Lender Party's Affected Loans
have been so converted, all payments and prepayments of principal
that would otherwise be applied to such Lender Party's Affected
Loans shall be applied instead to its Canadian Base Rate Loans or
Canadian Prime Rate Loans, as applicable; and
(b) all Canadian Loans that would otherwise be made or
continued by such Lender Party as Canadian Loans of the Affected
Type shall be made or continued instead as Canadian Base Rate
Loans or Canadian Prime Rate Loans, as applicable, and all
Canadian Loans of such Lender Party that would otherwise be
converted into Canadian Loans of the Affected Type shall be
converted instead into (or shall remain as) Canadian Base Rate
Loans or Canadian Prime Rate Loans, as applicable.
If such Lender Party gives notice to Canadian Borrowers (with a
copy to Canadian Agent) that the circumstances specified in
Section 3.2 or 3.4 hereof that gave rise to the Conversion of
such Lender Party's Affected Loans pursuant to this Section no
longer exist (which such Lender Party agrees to do promptly upon
such circumstances ceasing to exist) at a time when Canadian
Loans of the Affected Type made by other Lender Parties are
outstanding, such Lender Party's Canadian Base Rate Loans or
Canadian Prime Rate Loans, as applicable, shall be automatically
converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Canadian Loans of the Affected
Type, to the extent necessary so that, after giving effect
thereto, all Canadian Loans held by the Lender Parties holding
Canadian Loans of the Affected Type and by such Lender Party are
held pro rata (as to principal amounts, Types, and Interest
Periods) in accordance with their Percentage Shares of the
Canadian Maximum Credit Amount.
Section 3.6. Compensation. Upon the request of any Lender
Party, Canadian Borrowers shall pay to such Lender Party such
amount or amounts as shall be sufficient (in the reasonable
opinion of such Lender Party) to compensate it for any loss,
cost, or expense (including loss of anticipated profits) incurred
by it as a result of:
(i) any payment, prepayment, or Conversion of a
Eurodollar Loan or Competitive Bid Loan for any reason
(including, without limitation, the acceleration of the
Canadian Loans pursuant to Section 8.1) on a date other than
the last day of the Interest Period for such Loan; or
(ii) any failure by Canadian Borrowers for any reason
(including, without limitation, the failure of any condition
precedent specified in Article IV to be satisfied) to
borrow, convert, continue, or prepay a Eurodollar Loan on
the date for such borrowing, Conversion, Continuation, or
prepayment specified in the relevant notice of borrowing,
prepayment, Continuation, or Conversion under this
Agreement.
Section 3.7. Change of Applicable Lending Office. Each
Lender Party agrees that, upon the occurrence of any event giving
rise to the operation of Sections 3.2 through 3.5 with respect to
such Lender Party, it will, if requested by Canadian Borrowers,
use reasonable efforts (subject to overall policy considerations
of such Lender Party) to designate another Applicable Lending
Office, provided that such designation is made on such terms that
such Lender Party and its Applicable Lending Office suffer no
economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the
operation of any such section. Nothing in this section shall
affect or postpone any of the obligations of Canadian Borrowers
or the rights of any Lender Party provided in Sections 3.2
through 3.5.
Section 3.8. Replacement of Lenders. If any Lender Party
seeks reimbursement for increased costs under Sections 3.2
through 3.5, or if a Canadian Borrower is required to increase
any sum payable under Section 3.2(d), then within ninety (90)
days thereafter -- provided no Event of Default then exists --
Canadian Borrowers shall have the right (unless such Lender Party
withdraws its request for additional compensation) to replace
such Lender Party by requiring such Lender Party to assign its
Canadian Advances, Canadian Notes, Canadian LC Obligations, US
Loans, US Notes, US LC Obligations and its commitments hereunder
and under the US Agreement to an Eligible Transferee reasonably
acceptable to all Borrowers, provided that: all Obligations of
Borrowers owing to such Lender Party being replaced (including
such increased costs, but excluding principal and accrued
interest on the Canadian Notes and the US Notes being assigned)
shall be paid in full to such Lender Party concurrently with such
assignment, and the replacement Eligible Transferee shall
purchase the foregoing by paying to such Lender Party a price
equal to the principal amount thereof plus accrued and unpaid
interest thereon. In connection with any such assignment
Canadian Borrowers, Canadian Agent, US Borrower, US Agent, such
Lender Party and the replacement Eligible Transferee shall
otherwise comply with Section 10.6. Notwithstanding the
foregoing rights of Canadian Borrowers under this section,
however, Canadian Borrowers may not replace any Lender Party
which seeks reimbursement for increased costs under Section 3.2
through 3.5, or to which Canadian Borrowers are required to
increase any sums payable under Section 3.2(d), unless Canadian
Borrowers are at the same time replacing all Lender Parties which
are then seeking such compensation or to which such sums payable
must be increased. In connection with any such replacement of a
Lender Party, the applicable Canadian Borrower shall pay all
costs that would have been due to such Lender Party pursuant to
Section 3.6 if such Lender Party's Canadian Advances had been
prepaid at the time of such replacement.
Section 3.9. Other Taxes.
(a) Canadian Borrowers agree to pay any and all present or
future stamp or documentary taxes and any other excise or
property taxes or charges or similar levies which arise from any
payment made under this Agreement or any other Canadian Loan
Document or from the execution or delivery of, or otherwise with
respect to, this Agreement or any other Canadian Loan Document
(hereinafter referred to as "Other Taxes").
(b) Canadian Borrowers agree to indemnify each Lender Party
for the full amount of Other Taxes (including, without
limitation, any Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this section) paid by such
Lender Party or Canadian Agent (as the case may be) and any
liability (including penalties, interest, and expenses) arising
therefrom or with respect thereto.
(c) If Canadian Borrowers are required to pay additional
amounts to or for the account of any Lender Party pursuant to
this Section 3.9, then such Lender Party will agree to use
reasonable efforts to change the jurisdiction of its Applicable
Lending Office so as to eliminate or reduce any such additional
payment which may thereafter accrue if such change, in the
judgment of such Lender Party, is not otherwise disadvantageous
to such Lender Party.
(d) If a Lender Party is reimbursed for an amount paid by
Canadian Borrowers pursuant to this Section 3.9, it shall
promptly return such amount to Canadian Borrowers.
(e) Within thirty (30) days after the date of any payment
of Other Taxes, Canadian Borrowers shall furnish to Canadian
Agent the original or a certified copy of a receipt evidencing
such payment.
(f) Without prejudice to the survival of any other
agreement of Canadian Borrowers hereunder, the agreements and
obligations of Canadian Borrowers contained in this section shall
survive the termination of this Agreement and the payment in full
of the Canadian Notes.
Section 3.10. Currency Conversion and Currency Indemnity.
(a) Canadian Borrowers and Canadian Guarantor
(collectively, for purposes of this Section 3.10 herein referred
to as "Obligors") shall make payment relative to any Obligation
in the currency (the "Agreed Currency") in which the Obligation
was incurred. If any payment is received on account of any
Obligation in any currency (the "Other Currency") other than the
Agreed Currency (whether voluntarily or pursuant to an order or
judgment or the enforcement thereof or the realization of any
security or the liquidation of such Obligor or otherwise
howsoever), such payment shall constitute a discharge of the
liability of an Obligor hereunder and under the other Canadian
Loan Documents in respect of such Obligation only to the extent
of the amount of the Agreed Currency which the relevant Lender
Parties are able to purchase with the amount of the Other
Currency received by it on the Business Day next following such
receipt in accordance with its normal procedures and after
deducting any premium and costs of exchange.
(b) If, for the purpose of obtaining or enforcing judgment
in any court in any jurisdiction, it becomes necessary to convert
into a particular currency (the "Judgment Currency") any amount
due in the Agreed Currency then the conversion shall be made on
the basis of the rate of exchange prevailing on the next Business
Day following the date such judgment is given and in any event
each Obligor shall be obligated to pay the Lender Parties any
deficiency in accordance with Section 3.10(c). For the foregoing
purposes "rate of exchange" means the rate at which the relevant
Lender Parties, as applicable, in accordance with their normal
banking procedures are able on the relevant date to purchase the
Agreed Currency with the Judgment Currency after deducting any
premium and costs of exchange.
(c) If any Lender Party receives any payment or payments on
account of the liability of an Obligor hereunder pursuant to any
judgment or order in any Other Currency, and the amount of the
Agreed Currency which the relevant Lender Party is able to
purchase on the Business Day next following such receipt with the
proceeds of such payment or payments in accordance with its
normal procedures and after deducting any premiums and costs of
exchange is less than the amount of the Agreed Currency due in
respect of such Obligations immediately prior to such judgment or
order, then Canadian Borrowers on demand shall, and Canadian
Borrowers hereby agree to, indemnify and save such Lender Party
harmless from and against any loss, cost or expense arising out
of or in connection with such deficiency. The agreement of
indemnity provided for in this Section 3.10(c) shall constitute
an obligation separate and independent from all other obligations
contained in this Agreement, shall give rise to a separate and
independent cause of action, shall apply irrespective of any
indulgence granted by the Lender Parties or any of them from time
to time, and shall continue in full force and effect
notwithstanding any judgment or order for a liquidated sum in
respect of an amount due hereunder or under any judgment or
order.
ARTICLE IV - Conditions Precedent to Advances
Section 4.1. Documents to be Delivered. No Lender has any
obligation to make its first Canadian Loan, and Canadian LC
Issuer has no obligation to issue the first Letter of Credit,
unless Canadian Agent shall have received all of the following,
duly executed and delivered and in form, substance and date
satisfactory to Canadian Agent:
(a) This Agreement and any other documents that Lenders are
to execute in connection herewith.
(b) Each Canadian Note.
(c) The Guaranty of Canadian Guarantor.
(d) Certain certificates of Canadian Borrowers including:
(i) An "Omnibus Certificate" of the Secretary or
Assistant Secretary and of the Chairman of the Board,
President, or Vice President - Finance of each Canadian
Borrower, which shall contain the names and signatures of
the officers of such Canadian Borrower authorized to execute
Canadian Loan Documents and which shall certify to the
truth, correctness and completeness of the following
exhibits attached thereto: (1) a copy of resolutions duly
adopted by the Board of Directors of such Canadian Borrower
and in full force and effect at the time this Agreement is
entered into, authorizing the execution of this Agreement
and the other Canadian Loan Documents delivered or to be
delivered in connection herewith and the consummation of the
transactions contemplated herein and therein, (2) a copy of
the charter documents of such Canadian Borrower and all
amendments thereto, certified by the appropriate official of
its jurisdiction of organization, and (3) a copy of any
bylaws of such Canadian Borrower; and
(ii) A "Compliance Certificate" of the Chairman of the
Board or President and of the Vice President - Finance of
each Canadian Borrower, of even date with such Canadian Loan
or such Letter of Credit, in which such officers certify to
the satisfaction of the conditions set out in subsections
(a), (b) and (c) of Section 4.3.
(e) certificate (or certificates) of the due formation,
valid existence and good standing of each Canadian Borrower in
its jurisdiction of organization, issued by the appropriate
official of such jurisdiction.
(f) A favorable opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇, counsel for
Restricted Persons, substantially in the form set forth in
Exhibit E and a favorable opinion of Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
covering the matters requested by Canadian Agent.
(g) The Initial Financial Statements.
Section 4.2. Additional Conditions Precedent to First
Canadian Loan or First Letter of Credit. No Lender has any
obligation to make its first Canadian Loan, and Canadian LC
Issuer has no obligation to issue the first Letter of Credit,
unless on the date thereof:
(a) All commitment, facility, agency, legal and other fees
required to be paid or
reimbursed to any Lender pursuant to any Canadian Loan Documents
or any commitment agreement heretofore entered into shall have
been paid.
(b) No event which would reasonably be expected to have a
Material Adverse Effect shall have occurred since June 30, 1999.
(c) US Borrower shall have certified to Canadian Agent and
Lenders that the Initial Financial Statements fairly present US
Borrower's Consolidated financial position at the respective
dates thereof and the Consolidated results of US Borrower's
operations and US Borrower's Consolidated cash flows for the
respective periods thereof.
(d) US Borrower shall have certified to Canadian Agent and
Lenders that no Restricted Person has any outstanding Liabilities
of any kind (including contingent obligations, tax assessments,
and unusual forward or long-term commitments) which are, in the
aggregate, material to US Borrower or material with respect to US
Borrower's Consolidated financial condition and not shown in the
Initial Financial Statements or disclosed in the Disclosure
Schedule.
(e) All legal matters relating to the Canadian Loan
Documents and the consummation of the transactions contemplated
thereby shall be satisfactory to ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., US
counsel to Canadian Agent, and Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, Canadian
counsel to Canadian Agent.
Section 4.3. Additional Conditions Precedent to all
Canadian Loans and Letters of Credit. No Lender has any
obligation to make any Canadian Loan (including its first), and
Canadian LC Issuer has no obligation to issue any Letter of
Credit (including its first), unless the following conditions
precedent have been satisfied:
(a) All representations and warranties made by any
Restricted Person in any Canadian Loan Document shall be true on
and as of the date of such Canadian Loan or the date of issuance
of such Letter of Credit (except to the extent that the facts
upon which such representations are based have been changed by
the extension of credit hereunder) as if such representations and
warranties had been made as of the date of such Canadian Loan or
the date of issuance of such Letter of Credit.
(b) No Default shall exist at the date of such Canadian
Loan or the date of issuance of such Letter of Credit.
(c) The making of such Canadian Loan or the issuance of
such Letter of Credit shall not be prohibited by any Law and
shall not subject any Lender or any LC Issuer to any material
penalty under or pursuant to any such Law.
ARTICLE V - Representations and Warranties
To confirm each Lender's understanding concerning Restricted
Persons and Restricted Persons' businesses, properties and
obligations and to induce each Lender to enter into this
Agreement and to extend credit hereunder, each Canadian Borrower
represents and warrants to each Lender that:
Section 5.1. No Default. No event has occurred and is
continuing which constitutes a Default.
Section 5.2. Organization and Good Standing. Each
Canadian Borrower and each Subsidiary of a Canadian Borrower that
is a Restricted Person is duly organized, validly existing and in
good standing under the Laws of its jurisdiction of organization,
having all powers required to carry on its business and enter
into and carry out the transactions contemplated hereby. Each
Canadian Borrower and each Subsidiary of a Canadian Borrower that
is a Restricted Person is duly qualified, in good standing, and
authorized to do business in all other jurisdictions within
Canada wherein the character of the properties owned or held by
it or the nature of the business transacted by it makes such
qualification necessary except where failure to so qualify would
not have a Material Adverse Effect. Each Canadian Borrower and
each Subsidiary of a Canadian Borrower that is a Restricted
Person has taken all actions and procedures customarily taken in
order to enter, for the purpose of conducting business or owning
property, each jurisdiction outside Canada wherein the character
of the properties owned or held by it or the nature of the
business transacted by it makes such actions and procedures
desirable except where failure to so qualify would not have a
Material Adverse Effect.
Section 5.3. Authorization. Each Canadian Borrower has
duly taken all action necessary to authorize the execution and
delivery by it of the Canadian Loan Documents to which it is a
party and to authorize the consummation of the transactions
contemplated thereby and the performance of its obligations
thereunder. Each Canadian Borrower is duly authorized to borrow
funds hereunder.
Section 5.4. No Conflicts or Consents. The execution and
delivery by each Canadian Borrower and each Subsidiary of a
Canadian Borrower that is a Restricted Person of the Canadian
Loan Documents to which each is a party, the performance by each
of its obligations under such Canadian Loan Documents, and the
consummation of the transactions contemplated by the various
Canadian Loan Documents, do not and will not (i) conflict with
any provision of (A) any Law, (B) the organizational documents or
any unanimous shareholders agreement of any Restricted Person, or
(C) any agreement, judgment, license, order or permit applicable
to or binding upon any Restricted Person unless such conflict
would not reasonably be expected to have a Material Adverse
Effect, or (ii) result in the acceleration of any Indebtedness
owed by any Restricted Person which would reasonably be expected
to have a Material Adverse Effect, or (iii) result in or require
the creation of any Lien upon any assets or properties of any
Restricted Person which would reasonably be expected to have a
Material Adverse Effect, except as expressly contemplated or
permitted in the Canadian Loan Documents. Except as expressly
contemplated in the Canadian Loan Documents no consent, approval,
authorization or order of, and no notice to or filing with, any
Tribunal or third party is required in connection with the
execution, delivery or performance by any Restricted Person of
any Canadian Loan Document or to consummate any transactions
contemplated by the Canadian Loan Documents, unless failure to
obtain such consent would not reasonably be expected to have a
Material Adverse Effect.
Section 5.5. Enforceable Obligations. This Agreement is,
and the other Canadian Loan Documents when duly executed and
delivered will be, legal, valid and binding obligations of each
Restricted Person which is a party hereto or thereto, enforceable
in accordance with their terms except as such enforcement may be
limited by bankruptcy, insolvency or similar Laws of general
application relating to the enforcement of creditors' rights.
Section 5.6. Full Disclosure. No certificate, statement
or other information delivered herewith or heretofore by any
Canadian Borrower or any Subsidiary of a Canadian Borrower that
is a Restricted Person to any Lender in connection with the
negotiation of this Agreement or in connection with any
transaction contemplated hereby contains any untrue statement of
a material fact or omits to state any material fact known to any
such Person (other than industry-wide risks normally associated
with the types of businesses conducted by Restricted Persons)
necessary to make the statements contained herein or therein not
misleading as of the date made or deemed made. There is no fact
known to any such Person (other than industry-wide risks normally
associated with the types of businesses conducted by Restricted
Persons) that has not been disclosed to each Lender in writing
which would reasonably be expected to have a Material Adverse
Effect.
Section 5.7. Litigation. Except as disclosed in the
Initial Financial Statements or in the Disclosure Schedule:
(a) there are no actions, suits or legal, equitable, arbitrative
or administrative proceedings pending, or to the knowledge of any
Canadian Borrower threatened, against any Canadian Borrower or
any Subsidiary of a Canadian Borrower that is a Restricted Person
before any Tribunal which would reasonably be expected to have a
Material Adverse Effect, and (b) there are no outstanding
judgments, injunctions, writs, rulings or orders by any such
Tribunal against any Canadian Borrower which would reasonably be
expected to have a Material Adverse Effect.
Section 5.8. Environmental and Other Laws. Except as
disclosed in the Disclosure Schedule: (a) Canadian Borrowers and
each Subsidiary of a Canadian Borrower that is a Restricted
Person are conducting their businesses in material compliance
with all applicable Laws, including Environmental Laws, and have
and are in compliance with all licenses and permits required
under any such Laws, unless failure to so comply would not
reasonably be expected to have a Material Adverse Effect;
(b) none of the operations or properties of any Canadian
Borrowers and each Subsidiary of a Canadian Borrower that is a
Restricted Person is the subject of federal, provincial or local
investigation evaluating whether any material remedial action is
needed to respond to a release of any Hazardous Materials into
the environment or to the improper storage or disposal (including
storage or disposal at offsite locations) of any Hazardous
Materials, unless such remedial action would not reasonably be
expected to have a Material Adverse Effect; and (c) neither any
Canadian Borrower nor any Subsidiary of a Canadian Borrower that
is a Restricted Person (and to the best knowledge of Canadian
Borrowers, no other Person) has filed any notice under any Law
indicating that any such Person is responsible for the improper
release into the environment, or the improper storage or
disposal, of any material amount of any Hazardous Materials or
that any Hazardous Materials have been improperly released, or
are improperly stored or disposed of, upon any property of any
such Person, unless such failure to so comply would not
reasonably be expected to have a Material Adverse Effect.
Section 5.9. Names and Places of Business. Neither
Canadian Borrower has, during the preceding five years, had, been
known by, or used any other trade or fictitious name, except as
disclosed in the Disclosure Schedule. Except as otherwise
indicated in the Disclosure Schedule, the chief executive office
and principal place of business of each Canadian Borrower is (and
for the preceding five years have been) located at the address of
such Canadian Borrower set out on the signature pages hereto.
Except as indicated in the Disclosure Schedule, no Canadian
Borrower or any Subsidiary of a Canadian Borrower that is a
Restricted Person has any other office or place of business.
Section 5.10. Canadian Borrowers' Subsidiaries. No
Canadian Borrower presently has any Subsidiary or owns any stock
in any other corporation or association except those listed in
the Disclosure Schedule. Neither any Canadian Borrower nor any
of its Restricted Subsidiaries is a member of any general or
limited partnership, limited liability company, joint venture or
association of any type whatsoever except (a) those listed in the
Disclosure Schedule, (b) associations, joint ventures or other
relationships (i) which are established pursuant to a standard
form operating agreement or similar agreement or which are
partnerships for purposes of federal income taxation only,
(ii) which are not corporations or partnerships (or subject to
the Uniform Partnership Act) under applicable state Law, and
(iii) whose businesses are limited to the exploration,
development and operation of oil, gas or mineral properties,
pipelines or gathering systems, transportation and related
facilities and interests owned directly by the parties in such
associations, joint ventures or relationships, and (c)
associations, joint ventures or other relationships (i) which are
not corporations or partnerships under applicable provincial Law,
and (ii) whose businesses are limited to the exploration,
development and operation of oil, gas or mineral properties,
pipelines or gathering systems, transportation and related
facilities and interests owned directly by the parties in such
associations, joint ventures or relationships. Each Canadian
Borrower owns, directly or indirectly, the equity interest in
each of its Subsidiaries which is indicated in the Disclosure
Schedule.
Section 5.11. Title to Properties; Licenses. Each Canadian
Borrower and each Subsidiary of a Canadian Borrower that is a
Restricted Person has good and defensible title to all of its
material properties and assets, free and clear of all Liens other
than Permitted Liens and of all impediments to the use of such
properties and assets in such Person's business except to the
extent failure to have such title would not have a Material
Adverse Effect. Each Canadian Borrower and each Subsidiary of a
Canadian Borrower that is a Restricted Person possesses all
licenses, permits, franchises, patents, copyrights, trademarks
and trade names, and other intellectual property (or otherwise
possesses the right to use such intellectual property without
violation of the rights of any other Person) which are necessary
to carry out its business as presently conducted and as presently
proposed to be conducted hereafter, and no such Person is in
violation in any material respect of the terms under which it
possesses such intellectual property or the right to use such
intellectual property except to the extent failure to possess
such licenses, permits, franchises, and intellectual property
would not have a Material Adverse Effect.
Section 5.12. Solvency. Upon giving effect to the issuance
of the Canadian Notes, the execution of the Canadian Loan
Documents by Canadian Borrowers and the consummation of the
transactions contemplated hereby, each Canadian Borrower will be
solvent (as such term is used in applicable bankruptcy,
liquidation, receivership, insolvency or similar Laws).
Section 5.13. Year 2000 Compliance. Each Canadian Borrower
has (a) initiated a review and assessment of all areas within its
and each of its Subsidiaries' business and operations (including
those affected by suppliers and vendors) that could be adversely
affected by the "Year 2000 Problem" (that is, the risk that
computer applications used by such Canadian Borrower and its
Subsidiaries may be unable to recognize and perform properly date-
sensitive functions involving certain dates prior to and any date
after December 31, 1999), (b) developed a plan and timeline for
addressing the Year 2000 Problem on a timely basis, and (c) to
date, implemented that plan in accordance with that timetable.
Each Canadian Borrower reasonably believes that all computer
applications (including those of its suppliers and vendors) that
are material to its or any of its Subsidiaries' business and
operations will on a timely basis be able to perform properly
date-sensitive functions for all dates before and after January
1, 2000 (that is, be "Year 2000 compliant"), except to the extent
that a failure to do so would not reasonably be expected to have
a Material Adverse Effect.
ARTICLE VI - Affirmative Covenants of Canadian Borrowers
To conform with the terms and conditions under which each
Lender is willing to have credit outstanding to each Canadian
Borrower, and to induce each Lender to enter into this Agreement
and extend credit hereunder, each Canadian Borrower warrants,
covenants and agrees that until the full and final payment of the
Obligations and the termination of this Agreement, unless
Required Lenders have previously agreed otherwise:
Section 6.1. Payment and Performance. Each Canadian
Borrower will pay all amounts due by it under the Canadian Loan
Documents in accordance with the terms thereof and will observe,
perform and comply with every covenant, term and condition
expressed or implied in the Canadian Loan Documents to be binding
upon it. Each Canadian Borrower will cause each of its
Subsidiaries which is a Restricted Person to observe, perform and
comply with every such term, covenant and condition in any Loan
Document.
Section 6.2. Books, Financial Statements and Reports.
Each Canadian Borrower will at all times maintain full and
accurate books of account and records. Each Canadian Borrower
will maintain and will cause its Subsidiaries to maintain a
standard system of accounting, will maintain its Fiscal Year, and
will furnish (or will cause to be furnished) the following
statements and reports to each Lender Party at Canadian
Borrowers' expense:
(a) As soon as available, and in any event within ninety
(90) days after the end of each Fiscal Year, complete
Consolidated financial statements of US Borrower together with
all notes thereto, prepared in reasonable detail in accordance
with US GAAP, together with an unqualified opinion, based on an
audit using generally accepted auditing standards, by KPMG Peat
Marwick L.L.P., or other independent certified public accountants
selected by US Borrower and acceptable to US Agent, stating that
such Consolidated financial statements have been so prepared.
These financial statements shall contain a Consolidated balance
sheet as of the end of such Fiscal Year and Consolidated
statements of earnings, of cash flows, and of changes in owners'
equity for such Fiscal Year, each setting forth in comparative
form the corresponding figures for the preceding Fiscal Year. In
addition, within ninety (90) days after the end of each Fiscal
Year each Canadian Borrower will furnish to Canadian Agent and
each Lender a certificate in the form of Exhibit D signed by the
President, Senior Vice President - Finance, Treasurer or Vice
President - Accounting of US Borrower, stating that such
financial statements are accurate and complete, stating that such
Person has reviewed the Canadian Loan Documents, containing all
calculations required to be made to show compliance or non-
compliance with the provisions of Sections 7.7 and 7.8, and
further stating that there is no condition or event at the end of
such Fiscal Year or at the time of such certificate which
constitutes a Default and specifying the nature and period of
existence of any such condition or event.
(b) As soon as available, and in any event within forty-
five (45) days after the end of each Fiscal Quarter, US
Borrower's Consolidated and consolidating balance sheet and
income statement as of the end of such Fiscal Quarter and a
Consolidated statement of cash flows for the period from the
beginning of the then current Fiscal Year to the end of such
Fiscal Quarter, all in reasonable detail and prepared in
accordance with US GAAP, subject to changes resulting from normal
year-end adjustments. In addition each Canadian Borrower will,
together with each such set of financial statements, furnish a
certificate in the form of Exhibit D signed by the President,
Senior Vice President - Finance, Treasurer or Vice President -
Accounting of such US Borrower stating that such financial
statements are accurate and complete (subject to normal year-end
adjustments), stating that such Person has reviewed the Canadian
Loan Documents, containing all calculations required to be made
to show compliance or non-compliance with the provisions of
Sections 7.7 and 7.8 and further stating that there is no
condition or event at the end of such Fiscal Quarter or at the
time of such certificate which constitutes a Default and
specifying the nature and period of existence of any such
condition or event.
(c) Promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent
by US Borrower or any of its Subsidiaries that is a Restricted
Person to its shareholders and all registration statements,
prospectuses, periodic reports and other statements and schedules
filed by any such Person with any exchange, any securities
commission or any similar Governmental Authority, including any
information or estimates with respect to US Borrower's oil and
gas business (including its exploration, development and
production activities) which are required to be furnished in such
Canadian Borrower's annual report pursuant to securities
legislation or the rules, policies and requirements of any
Governmental Authority.
Section 6.3. Other Information and Inspections. Each
Canadian Borrower and each Subsidiary of a Canadian Borrower that
is a Restricted Person will furnish to each Lender any
information which Canadian Agent may from time to time reasonably
request concerning any covenant, provision or condition of the
Loan Documents or any matter in connection with such Persons'
businesses and operations. Each Canadian Borrower and each
Subsidiary of a Canadian Borrower that is a Restricted Person
will permit representatives appointed by Canadian Agent
(including independent accountants, auditors, agents, lawyers,
appraisers and any other Persons) to visit and inspect upon prior
written notice during normal business hours any of such
Restricted Person's property, including its books of account,
other books and records, and any facilities or other business
assets, and to make extra copies therefrom and photocopies and
photographs thereof, and to write down and record any information
such representatives obtain, and each Canadian Borrower and each
Subsidiary of a Canadian Borrower that is a Restricted Person
shall permit Canadian Agent or its representatives to investigate
and verify the accuracy of the information furnished to Canadian
Agent or any Lender in connection with the Loan Documents and to
discuss all such matters with its officers, employees and
representatives.
Section 6.4. Notice of Material Events and Change of
Address. Canadian Borrowers will promptly notify each Lender in
writing, stating that such notice is being given pursuant to this
Agreement, of:
(a) the occurrence of any event which would have a Material
Adverse Effect,
(b) the occurrence of any Default,
(c) the acceleration of the maturity of any Indebtedness
owed by any of Canadian Borrowers or any of their Subsidiaries
that are Restricted Persons having a principal balance of more
than US $50,000,000, or of any default by any such Person under
any indenture, mortgage, agreement, contract or other instrument
to which any of them is a party or by which any of them or any of
their properties is bound, if such default would have a Material
Adverse Effect,
(d) the occurrence of any Termination Event,
(e) any claim of US $50,000,000 or more, any notice of
potential liability under any Environmental Laws which might
exceed such amount, or any other material adverse claim asserted
against any of Canadian Borrowers or any of their Subsidiaries
that are Restricted Persons or with respect to any such Person's
properties, and
(f) the filing of any suit or proceeding against any
Canadian Borrowers or any of their Subsidiaries that are
Restricted Person in which an adverse decision would have a
Material Adverse Effect.
Canadian Borrowers will also notify Canadian Agent and Canadian
Agent's counsel in writing promptly in the event that any
Canadian Borrower or any of their Subsidiaries that is a
Restricted Person changes its name or the location of its chief
executive office.
Section 6.5. Maintenance of Properties. Each Canadian
Borrower and each Subsidiary of a Canadian Borrower that is a
Restricted Person will maintain, preserve, protect, and keep all
property used or useful in the conduct of its business in good
condition, and will from time to time make all repairs, renewals
and replacements needed to enable the business and operations
carried on in connection therewith to be promptly and
advantageously conducted at all times except to the extent
failure to do so would not reasonably be expected to have a
Material Adverse Effect.
Section 6.6. Maintenance of Existence and Qualifications.
Each Canadian Borrower and each Subsidiary of a Canadian Borrower
that is a Restricted Person will maintain and preserve its
existence and its rights and franchises in full force and effect
and will qualify to do business in all states or jurisdictions
where required by applicable Law, except where the failure so to
qualify will not have a Material Adverse Effect.
Section 6.7. Payment of Trade Liabilities, Taxes, etc.
Each Canadian Borrower and each Subsidiary of a Canadian Borrower
that is a Restricted Person will (a) timely file all required tax
returns; (b) timely pay all taxes, assessments, and other
governmental charges or levies imposed upon it or upon its
income, profits or property; and (c) maintain appropriate
accruals and reserves for all of the foregoing in accordance with
US GAAP. Such Restricted Person may, however, delay paying or
discharging any of the foregoing so long as it is in good faith
contesting the validity thereof by appropriate proceedings and
has set aside on its books adequate reserves therefor.
Section 6.8. Insurance. Each Canadian Borrower and each
Subsidiary of a Canadian Borrower that is a Restricted Person
will keep or cause to be kept insured in accordance with industry
standards by financially sound and reputable insurers, its
surface equipment and other property of a character usually
insured by similar Persons engaged in the same or similar
businesses.
Section 6.9. Performance on Canadian Borrowers' Behalf.
If either Canadian Borrower or any Subsidiary of a Canadian
Borrower that is a Restricted Person fails to pay any taxes,
insurance premiums, expenses, lawyers' fees or other amounts it
is required to pay under any Canadian Loan Document, Canadian
Agent may pay the same, and shall use its best efforts to give at
least five (5) Business Days notice to Canadian Borrowers prior
to making any such payment; provided, however, that any failure
by Canadian Agent to so notify Canadian Borrowers shall not limit
or otherwise impair Canadian Agent's ability to make any such
payment. Northstar Energy shall immediately reimburse Canadian
Agent for any such payments and each amount paid by Canadian
Agent shall constitute a Canadian Obligation owed hereunder which
is due and payable on the date such amount is paid by Canadian
Agent.
Section 6.10. Interest. Each Canadian Borrower hereby
promises to each Lender Party to pay interest at the Default Rate
applicable to Canadian Base Rate Loans on all Canadian
Obligations (including Canadian Obligations to pay fees or to
reimburse or indemnify any Lender) which such Canadian Borrower
has in this Agreement promised to pay to such Lender Party and
which are not paid when due. Such interest shall accrue from the
date such Canadian Obligations become due until they are paid.
Section 6.11. Compliance with Law. Each Canadian Borrower
and each Subsidiary of a Canadian Borrower that is a Restricted
Person will conduct its business and affairs in compliance with
all Laws applicable thereto except to the extent failure to do so
would not reasonably be expected to have a Material Adverse
Effect.
Section 6.12. Environmental Matters.
(a) Each Canadian Borrower and each Subsidiary of a
Canadian Borrower that is a Restricted Person will comply in all
material respects with all Environmental Laws now or hereafter
applicable to such Restricted Person, as well as all contractual
obligations and agreements with respect to environmental
remediation or other environmental matters, and shall obtain, at
or prior to the time required by applicable Environmental Laws,
all environmental, health and safety permits, licenses and other
authorizations necessary for its operations and will maintain
such authorizations in full force and effect, unless such failure
to so comply would not reasonably be expected to have a Material
Adverse Effect.
(b) will promptly furnish to Canadian Agent all written
notices of violation, orders, claims, citations, complaints,
penalty assessments, suits or other proceedings received by such
Canadian Borrower, or of which it has notice, pending or
threatened against such Canadian Borrower, by any Governmental
Authority with respect to any alleged violation of or non-
compliance with any Environmental Laws or any permits, licenses
or authorizations in connection with its ownership or use of its
properties or the operation of its business which involve a
potential liability or claim in excess of US $50,000,000.
Section 6.13. Bank Accounts; Offset. To secure the
repayment of the Obligations each Canadian Borrower hereby grants
to each Lender a right of offset, each of which shall be in
addition to all other interests, liens, and rights of any Lender
at common Law, under the Loan Documents, or otherwise, and each
of which shall be upon and against (a) any and all moneys,
securities or other property (and the proceeds therefrom) of such
Canadian Borrower now or hereafter held or received by or in
transit to any Lender from or for the account of such Canadian
Borrower, whether for safekeeping, custody, pledge, transmission,
collection or otherwise, (b) any and all deposits (general or
special, time or demand, provisional or final) of such Canadian
Borrower with any Lender, and (c) any other credits and claims of
such Canadian Borrower at any time existing against any Lender,
including claims under certificates of deposit. At any time and
from time to time after the occurrence of any Default, each
Lender is hereby authorized to offset against the Obligations
then due and payable (in either case without notice to such
Canadian Borrower), any and all items herein above referred to.
To the extent that such Canadian Borrower has accounts designated
as royalty or joint interest owner accounts, the foregoing right
of offset shall not extend to funds in such accounts which belong
to, or otherwise arise from payments to such Canadian Borrower
for the account of, third party royalty or joint interest owners.
Section 6.14. Year 2000 Compliance. Each Canadian Borrower
will promptly notify Canadian Agent in the event such Canadian
Borrower discovers or determines that any computer application
(including those of its suppliers and vendors) that is material
to its or any of its Subsidiaries' business and operations that
will not be Year 2000 compliant on a timely basis, except to the
extent that such failure would not reasonably be expected to have
a Material Adverse Effect.
ARTICLE VII - Negative Covenants of Canadian Borrowers
To conform with the terms and conditions under which each
Lender is willing to have credit outstanding to each Canadian
Borrower, and to induce each Lender to enter into this Agreement
and make the Canadian Loans, each Canadian Borrower warrants,
covenants and agrees that until the full and final payment of the
Obligations and the termination of this Agreement, unless
Required Lenders have previously agreed otherwise:
Section 7.1. Indebtedness. Neither any Canadian Borrower
nor any Subsidiary of a Canadian Borrower that is a Restricted
Subsidiary will in any manner owe or be liable for Indebtedness
except:
(a) the Canadian Obligations.
(b) capital lease obligations (excluding oil, gas or
mineral leases) entered into in the ordinary course of such
Restricted Person's business in arm's length transactions at
competitive market rates under competitive terms and conditions
in all respects, provided that such capital lease obligations
required to be paid in any Fiscal Year do not in the aggregate
exceed US $35,000,000 for all Restricted Subsidiaries, whether or
not Subsidiaries of any Canadian Borrower.
(c) unsecured Liabilities owed among Restricted Persons.
(d) guaranties by one Restricted Person of Liabilities owed
by another Restricted Person, if such Liabilities either (i) are
not Indebtedness, or (ii) are allowed under subsections (a), (b)
or (c) of this Section 7.1.
(e) Indebtedness of the Restricted Persons for plugging and
abandonment bonds or for letters of credit issued by any Lender
in place thereof which are required by regulatory authorities in
the area of operations, and Indebtedness of the Restricted
Persons for other bonds or letters of credit issued by any Lender
which are required by such regulatory authorities with respect to
other normal oil and gas operations.
(f) obligations under the Subordinated Devon Oklahoma
Indenture, the Subordinated Devon Oklahoma Debentures and the
Subordinated Devon Oklahoma Guarantee;
(g) non-recourse Indebtedness as to which no Restricted
Person (i) provides any guaranty or credit support of any kind
(including any undertaking, guarantee, indemnity, agreement or
instrument that would constitute Indebtedness) or (ii) is
directly or indirectly liable (as a guarantor or otherwise);
provided, that after giving effect to such Indebtedness
outstanding from time to time, US Borrower is not in violation of
Section 7.7.
(h) the following long-term institutional Indebtedness of
Northstar Energy:
(i) US $150,000,000 indebtedness to The Prudential
Insurance Company of America pursuant to a Note Agreement
dated as of March 2, 1998 including the following guarantees
of such indebtedness: (1) guarantees both dated March 2,
1998 made by Northstar Energy Partnership and ▇▇▇▇▇ Limited
Partnership; (2) guarantee dated as of July 31, 1998 made by
728098 Alberta Ltd.; and (3) any other guarantees of
Subsidiaries of Northstar Energy executed after the date
hereof pursuant to the terms of such Note Agreement.
(ii) US $75,000,000 indebtedness to certain
institutional investors pursuant to a Note Agreement dated
as of July 19, 1995, as amended from time to time, including
the following guarantees of such indebtedness: (1)
guarantee dated as of July 31, 1998 made by Northstar Energy
Partnership; (2) guarantee dated as of July 31, 1998 made by
728098 Alberta Ltd.; and (3) any other guarantee of
Subsidiaries of Northstar Energy executed after the date
hereof pursuant to the terms of such Note Agreement.
including any refinancing of the above institutional
indebtedness by Northstar Energy, US Borrower or any other
Restricted Person on similar terms taking into account
current market conditions.
(i) Indebtedness that is subordinated to the US Obligations
and the Canadian Obligations on terms acceptable to Required
Lenders.
(j) Indebtedness in the approximate amount of C $4,784,000
owed to Indeck Gas Supply Corporation by Northstar Energy
pursuant to a Gas Sales and Purchase Agreement dated as of March
9, 1989, as heretofore or hereafter amended from time to time.
(k) Acquired Debt.
(l) Indebtedness under Hedging Contracts.
(m) Indebtedness relating to the surety bond and letter of
credit obligations listed on Schedule 2.
(n) miscellaneous items of Indebtedness of all Restricted
Persons (other than US Borrower) not described in subsections (a)
through (m) which do not in the aggregate exceed US $100,000,000
in principal amount at any one time outstanding.
Section 7.2. Limitation on Liens. Except for Permitted
Liens, neither any Canadian Borrower nor any Subsidiary of a
Canadian Borrower that is a Restricted Person will create, assume
or permit to exist any Lien upon any of the properties or assets
which it now owns or hereafter acquires. Neither any Canadian
Borrower nor any Subsidiary of a Canadian Borrower that is a
Restricted Person will allow the filing or continued existence of
any financing statement describing as collateral any assets or
property of such Restricted Person, other than financing
statements which describe only collateral subject to a Lien
permitted under this section and which name as secured party or
lessor only the holder of such Lien.
Section 7.3. Limitation on Mergers. Neither any Canadian
Borrower nor any Subsidiary of a Canadian Borrower that is a
Restricted Person will merge or consolidate with or into any
other Person except that any Subsidiary of US Borrower may be
merged into or consolidated with (a) another Subsidiary of US
Borrower, or (b) US Borrower, so long as US Borrower is the
surviving business entity.
Section 7.4. Limitation on Issuance of Securities by
Subsidiaries of US Borrower. Neither any Canadian Borrower nor
any Subsidiary of a Canadian Borrower that is a Restricted Person
will issue any additional shares of its capital stock, additional
partnership interests or other securities or any options,
warrants or other rights to acquire such additional shares,
partnership interests or other securities except to another
Restricted Person which is a wholly-owned direct or indirect
Subsidiary of US Borrower unless such securities are being issued
to acquire a business, directly or indirectly through the use of
the proceeds of such issuance, and such securities are
convertible into the common shares or similar securities of US
Borrower. In addition, (i) Northstar Energy may issue
"Exchangeable Shares" (as defined in the Restated Articles of
Incorporation of Northstar Energy) upon the terms specified in
the Restated Articles of Incorporation of Northstar Energy as in
effect on the date hereof (in this section called "Exchangeable
Shares"), (ii) Devon Canada may issue exchangeable shares upon
substantially the same terms as such Exchangeable Shares, and
(iii) Northstar Energy may issue stock options to its employees
from time to time to acquire such Exchangeable Shares, provided
that such options are granted under a stock option plan of
Northstar Energy and/or US Borrower. US Borrower shall never own
(directly or indirectly) less than one hundred percent (100%) of
the common shares of each Canadian Borrower.
Section 7.5. Limitation on Restricted Payments. Except as
permitted below in this section, neither any Canadian Borrower
nor any Subsidiary of a Canadian Borrower that is a Restricted
Person shall directly or indirectly (i) make any Restricted
Distribution, or (ii) any Restricted Investment (the above being
herein collectively referred to as "Restricted Payments"), unless
the aggregate amount of Restricted Payments made during any
Fiscal Year never exceeds five percent (5%) of the book value of
the Consolidated Assets of US Borrower.
Section 7.6. Transactions with Affiliates. Neither any
Canadian Borrower nor any Subsidiary of a Canadian Borrower that
is a Restricted Person will engage in any material transaction
with any of its Affiliates on terms which are less favorable in
any material respect to it than those which would have been
obtainable at the time in arm's-length dealing with Persons other
than such Affiliates, provided that such restriction shall not
apply to transactions among such Restricted Persons that are
wholly-owned, directly or indirectly, by US Borrower.
Section 7.7. Funded Debt to Total Capitalization. At the
end of each Fiscal Quarter, the ratio of US Borrower's
Consolidated Total Funded Debt to US Borrower's Total
Capitalization will never exceed sixty-five percent (65%).
ARTICLE VIII - Events of Default and Remedies
Section 8.1. Events of Default. Each of the following
events constitutes an Event of Default under this Agreement:
(a) Any Restricted Person fails to pay any principal
component of any Canadian Obligation when due and payable or
fails to pay any other Canadian Obligation within three (3) days
after the date when due and payable, whether at a date for the
payment of a fixed installment or as a contingent or other
payment becomes due and payable or as a result of acceleration or
otherwise;
(b) Any "default" or "event of default" occurs under any
Canadian Loan Document which defines either such term, and the
same is not remedied within the applicable period of grace (if
any) provided in such Loan Document;
(c) Any Restricted Person fails (other than as referred to
in subsections (a) or (b) above) to (i) duly comply with the
last sentence of Section 7.4 of the Canadian Agreement or (ii)
duly observe, perform or comply with any other covenant,
agreement, condition or provision of any Canadian Loan Document,
and such failure remains unremedied for a period of thirty (30)
days after notice of such failure is given by Canadian Agent to
Canadian Borrower;
(d) Any representation or warranty previously, presently or
hereafter made in writing by or on behalf of any Restricted
Person in connection with any Canadian Loan Document shall prove
to have been false or incorrect in any material respect on any
date on or as of which made; provided, that if such falsity or
lack of correctness is capable of being remedied or cured within
a 30-day period, Canadian Borrowers shall (subject to the other
provisions of this Section 8.1) have a period of 30 days after
written notice thereof has been given to Canadian Borrowers by
Canadian Agent within which to remedy or cure such lack of
correctness, or this Agreement, any Canadian Note, or the
Guaranty executed by Canadian Guarantor is asserted to be or at
any time ceases to be valid, binding and enforceable in any
material respect as warranted in Section 5.5 for any reason other
than its release or subordination by Canadian Agent;
(e) Any Restricted Person (i) fails to duly pay any
Indebtedness in excess of US $50,000,000 constituting principal
or interest owed by it with respect to borrowed money or money
otherwise owed under any note, bond, or similar instrument,
including without limitation the Subordinated Devon Oklahoma
Debentures, the Subordinated Devon Oklahoma Indenture, the
Subordinated Devon Oklahoma Guarantee and the Devon Trust
Securities, or (ii) breaches or defaults in the performance of
any agreement or instrument by which any such Indebtedness is
issued, evidenced, governed, or secured, other than a breach or
default described in clause (i) above, and any such failure,
breach or default results in the acceleration of such
Indebtedness;
(f) Any Change in Control occurs;
(g) Any "Event of Default" occurs under the US Agreement;
and
(h) Any Canadian Borrower or any other Restricted Person
having assets with a book value of at least US $50,000,000:
(i) suffers the entry against it of a judgment, decree
or order for relief by a Tribunal of competent jurisdiction
in an involuntary proceeding commenced under any applicable
bankruptcy, insolvency or other similar Law of any
jurisdiction now or hereafter in effect, including the
Bankruptcy and Insolvency Act (Canada) and the Companies'
Creditors Arrangement Act (Canada), as each are from time to
time amended, or has any such proceeding commenced against
it which remains undismissed for a period of thirty days; or
(ii) commences a voluntary case under any applicable
bankruptcy, insolvency or similar Law now or hereafter in
effect, including the Bankruptcy and Insolvency Act (Canada)
and the Companies' Creditors Arrangement Act (Canada), as
each are from time to time amended; or applies for or
consents to the entry of an order for relief in an
involuntary case under any such Law; or makes a general
assignment for the benefit of creditors; or fails generally
to pay (or admits in writing its inability to pay) its debts
as such debts become due; or takes corporate or other action
to authorize any of the foregoing; or
(iii) suffers the appointment of or taking
possession by a receiver, receiver-manager, liquidator,
assignee, custodian, trustee, sequestrator or similar
official of all or a substantial part of its property in a
proceeding brought against or initiated by it, and such
appointment or taking possession is neither made ineffective
nor discharged within thirty days after the making thereof,
or such appointment or taking possession is at any time
consented to, requested by, or acquiesced to by it; or
(iv) suffers the entry against it of a final judgment
for the payment of money in an amount that exceeds (x) the
valid and collectible insurance in respect thereof or (y)
the amount of an indemnity with respect thereto reasonably
acceptable to the Required Lenders by US $50,000,000 or
more, unless the same is discharged within thirty days after
the date of entry thereof or an appeal or appropriate
proceeding for review thereof is taken within such period
and a stay of execution pending such appeal is obtained; or
(v) suffers a levy of distress or execution or
possession, or a writ or warrant of attachment or any
similar process to be issued by any Tribunal against all or
any part of its property having a book value of at least US
$50,000,000, and such writ or warrant of attachment or any
similar process is not stayed or released within thirty days
after the entry or levy thereof or after any stay is vacated
or set aside.
Upon the occurrence of an Event of Default described in
subsection (h)(i), (h)(ii) or (h)(iii) of this section with
respect to Canadian Borrowers, all of the Canadian Obligations
shall thereupon be immediately due and payable, without demand,
presentment, notice of demand or of dishonor and nonpayment,
protest, notice of protest, notice of intention to accelerate,
declaration or notice of acceleration, or any other notice or
declaration of any kind, all of which are hereby expressly waived
by Canadian Borrowers and each Restricted Person who at any time
ratifies or approves this Agreement. Upon any such acceleration,
any obligation of any Lender to make any further Canadian
Advances, any obligation of Canadian LC Issuer to issue Letters
of Credit hereunder, and any obligation of Canadian Swing Lender
to make any further Canadian Swing Loans shall be permanently
terminated. During the continuance of any other Event of
Default, Canadian Agent at any time and from time to time may
(and upon written instructions from Required Lenders, Canadian
Agent shall), without notice to Canadian Borrowers or any other
Restricted Person, do either or both of the following:
(1) terminate any obligation of Lenders to make Canadian Advances
hereunder, any obligation of Canadian LC Issuer to issue Letters
of Credit hereunder, and any obligation of Canadian Swing Lender
to make Canadian Swing Loans hereunder, and (2) declare any or
all of the Canadian Obligations immediately due and payable, and
all such Canadian Obligations shall thereupon be immediately due
and payable, without demand, presentment, notice of demand or of
dishonor and nonpayment, protest, notice of protest, notice of
intention to accelerate, declaration or notice of acceleration,
or any other notice or declaration of any kind, all of which are
hereby expressly waived by Canadian Borrowers and each Restricted
Person who at any time ratifies or approves this Agreement.
Section 8.2. Remedies. If any Default shall occur and be
continuing, each Lender Party may protect and enforce its rights
under the Canadian Loan Documents by any appropriate proceedings,
including proceedings for specific performance of any covenant or
agreement contained in any Canadian Loan Document, and each
Lender Party may enforce the payment of any Canadian Obligations
due it or enforce any other legal or equitable right which it may
have. All rights, remedies and powers conferred upon Lender
Parties under the Canadian Loan Documents shall be deemed
cumulative and not exclusive of any other rights, remedies or
powers available under the Canadian Loan Documents or at Law or
in equity.
ARTICLE IX - Canadian Agent
Section 9.1. Appointment, Powers, and Immunities. Each
Lender hereby irrevocably appoints and authorizes Canadian Agent
to act as its agent under this Agreement and the other Canadian
Loan Documents with such powers and discretion as are
specifically delegated to Canadian Agent by the terms of this
Agreement and the other Canadian Loan Documents, together with
such other powers as are reasonably incidental thereto. Canadian
Agent (which term as used in this sentence and in Section 9.5 and
the first sentence of Section 9.6 hereof shall include its
Affiliates and its own and its Affiliates' officers, directors,
employees, and agents): (a) shall not have any duties or
responsibilities except those expressly set forth in this
Agreement and shall not be a trustee or fiduciary for any Lender;
(b) shall not be responsible to the Lenders for any recital,
statement, representation, or warranty (whether written or oral)
made in or in connection with any Canadian Loan Document or any
certificate or other document referred to or provided for in, or
received by any of them under, any Canadian Loan Document, or for
the value, validity, effectiveness, genuineness, enforceability,
or sufficiency of any Canadian Loan Document, or any other
document referred to or provided for therein or for any failure
by any Restricted Person or any other Person to perform any of
its obligations thereunder; (c) shall not be responsible for or
have any duty to ascertain, inquire into, or verify the
performance or observance of any covenants or agreements by any
Restricted Person or the satisfaction of any condition or to
inspect the property (including the books and records) of any
Restricted Person or any of its Subsidiaries or Affiliates;
(d) shall not be required to initiate or conduct any litigation
or collection proceedings under any Canadian Loan Document; and
(e) shall not be responsible for any action taken or omitted to
be taken by it under or in connection with any Canadian Loan
Document, except for its own gross negligence or willful
misconduct. Canadian Agent may employ agents and attorneys-in-
fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care.
Section 9.2. Reliance by Canadian Agent. Canadian Agent
shall be entitled to rely upon any certification, notice,
instrument, writing, or other communication (including, without
limitation, any thereof by telephone or telecopy) believed by it
to be genuine and correct and to have been signed, sent or made
by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel for any
Restricted Person), independent accountants, and other experts
selected by Canadian Agent. Canadian Agent may deem and treat
the payee of any Canadian Note as the holder thereof for all
purposes hereof unless and until Canadian Agent receives and
accepts an Assignment and Acceptance executed in accordance with
Section 10.6 hereof. As to any matters not expressly provided
for by this Agreement, Canadian Agent shall not be required to
exercise any discretion or take any action, but shall be required
to act or to refrain from acting (and shall be fully indemnified
and protected in so acting or refraining from acting) upon the
instructions of the Required Lenders, and such instructions shall
be binding on all of the Lenders; provided, however, that
Canadian Agent shall not be required to take any action that
exposes Canadian Agent to personal liability or that is contrary
to any Canadian Loan Document or applicable Law or unless it
shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred
by it by reason of taking any such action.
Section 9.3. Defaults. Canadian Agent shall not be deemed
to have knowledge or notice of the occurrence of a Default or
Event of Default unless Canadian Agent has received written
notice from a Lender or Canadian Borrowers specifying such
Default or Event of Default and stating that such notice is a
"Notice of Default". In the event that Canadian Agent receives
such a notice of the occurrence of a Default or Event of Default,
Canadian Agent shall give prompt notice thereof to the Lenders.
Canadian Agent shall (subject to Section 9.1 hereof) take such
action with respect to such Default or Event of Default as shall
reasonably be directed by the Required Lenders. Notwithstanding
the foregoing, unless and until Canadian Agent shall have
received such directions, Canadian Agent may (but shall not be
obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it
shall deem advisable in the best interest of the Lenders.
Section 9.4. Rights as Lender. With respect to its
Percentage Share of the Canadian Maximum Credit Amount and the
Canadian Loans made by it, Canadian Agent (and any successor
acting as Canadian Agent) in its capacity as a Lender hereunder
shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not acting as
Canadian Agent, and the term "Lender" or "Lenders" shall, unless
the context otherwise indicates, include Canadian Agent in its
individual capacity. Canadian Agent (and any successor acting as
Canadian Agent) and its Affiliates may (without having to account
therefor to any Lender) accept deposits from, lend money to, make
Investments in, provide services to, and generally engage in any
kind of lending, trust, or other business with any Restricted
Person or any of its Subsidiaries or Affiliates as if it were not
acting as Canadian Agent, and Canadian Agent (and any successor
acting as Canadian Agent) and its Affiliates may accept fees and
other consideration from any Restricted Person or any of its
Subsidiaries or Affiliates for services in connection with this
Agreement or otherwise without having to account for the same to
the Lenders.
Section 9.5. Indemnification. The Lenders agree to
indemnify Canadian Agent (to the extent not reimbursed under
Section 10.4 hereof, but without limiting the obligations of
Canadian Borrowers under such section) ratably in accordance with
their respective Percentage Shares, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including legal fees), or disbursements
of any kind and nature whatsoever that may be imposed on,
incurred by or asserted against Canadian Agent (including by any
Lender) in any way relating to or arising out of any Canadian
Loan Document or the transactions contemplated thereby or any
action taken or omitted by Canadian Agent under any Canadian Loan
Document (INCLUDING ANY OF THE FOREGOING ARISING FROM THE
NEGLIGENCE OF CANADIAN AGENT); provided that no Lender shall be
liable for any of the foregoing to the extent they arise from the
gross negligence or willful misconduct of the Person to be
indemnified. Without limitation of the foregoing, each Lender
agrees to reimburse Canadian Agent promptly upon demand for its
ratable share of any costs or expenses payable by Canadian
Borrower under Section 10.4, to the extent that Canadian Agent is
not promptly reimbursed for such costs and expenses by Canadian
Borrowers. The agreements contained in this section shall
survive payment in full of the Canadian Loans and all other
amounts payable under this Agreement.
Section 9.6. Non-Reliance on Canadian Agent and Other
Lenders. Each Lender agrees that it has, independently and
without reliance on Canadian Agent or any other Lender, and based
on such documents and information as it has deemed appropriate,
made its own credit analysis of the Canadian Borrowers and their
Subsidiaries and decision to enter into this Agreement and that
it will, independently and without reliance upon Canadian Agent
or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under
the Canadian Loan Documents. Except for notices, reports, and
other documents and information expressly required to be
furnished to the Lenders by Canadian Agent hereunder, Canadian
Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the
affairs, financial condition, or business of any Restricted
Person or any of its Subsidiaries or Affiliates that may come
into the possession of Canadian Agent or any of its Affiliates.
Section 9.7. Rights as Lender. In its capacity as a
Lender, Canadian Agent shall have the same rights and obligations
as any Lender and may exercise such rights as though it were not
Canadian Agent. Canadian Agent may accept deposits from, lend
money to, act as trustee under indentures of, and generally
engage in any kind of business with any Restricted Person or
their Affiliates, all as if it were not Canadian Agent hereunder
and without any duty to account therefor to any other Lender.
Section 9.8. Sharing of Set-Offs and Other Payments. Each
Lender Party agrees that if it shall, whether through the
exercise of rights under Canadian Loan Documents or rights of
banker's lien, set off, or counterclaim against Canadian
Borrowers or otherwise, obtain payment of a portion of the
aggregate Obligations owed to it which, taking into account all
distributions made by Canadian Agent under Section 3.1, causes
such Lender Party to have received more than it would have
received had such payment been received by Canadian Agent and
distributed pursuant to Section 3.1, then (a) it shall be deemed
to have simultaneously purchased and shall be obligated to
purchase interests in the Obligations as necessary to cause all
Lender Parties to share all payments as provided for in Section
3.1, and (b) such other adjustments shall be made from time to
time as shall be equitable to ensure that Canadian Agent and all
Lender Parties share all payments of Obligations as provided in
Section 3.1; provided, however, that nothing herein contained
shall in any way affect the right of any Lender Party to obtain
payment (whether by exercise of rights of banker's lien, set-off
or counterclaim or otherwise) of indebtedness other than the
Obligations. Canadian Borrowers expressly consent to the
foregoing arrangements and agree that any holder of any such
interest or other participation in the Obligations, whether or
not acquired pursuant to the foregoing arrangements, may to the
fullest extent permitted by Law exercise any and all rights of
banker's lien, set-off, or counterclaim as fully as if such
holder were a holder of the Obligations in the amount of such
interest or other participation. If all or any part of any funds
transferred pursuant to this section is thereafter recovered from
the seller under this section which received the same, the
purchase provided for in this section shall be deemed to have
been rescinded to the extent of such recovery, together with
interest, if any, if interest is required pursuant to the order
of a Tribunal order to be paid on account of the possession of
such funds prior to such recovery.
Section 9.9. Investments. Whenever Canadian Agent in good
faith determines that it is uncertain about how to distribute to
Lender Parties any funds which it has received, or whenever
Canadian Agent in good faith determines that there is any dispute
among Lender Parties about how such funds should be distributed,
Canadian Agent may choose to defer distribution of the funds
which are the subject of such uncertainty or dispute. If
Canadian Agent in good faith believes that the uncertainty or
dispute will not be promptly resolved, or if Canadian Agent is
otherwise required to invest funds pending distribution to Lender
Parties, Canadian Agent shall invest such funds pending
distribution; all interest on any such Investment shall be
distributed upon the distribution of such Investment and in the
same proportion and to the same Persons as such Investment. All
moneys received by Canadian Agent for distribution to Lender
Parties (other than to the Person who is Canadian Agent in its
separate capacity as a Lender Party) shall be held by Canadian
Agent pending such distribution solely as Canadian Agent for such
Lender Parties, and Canadian Agent shall have no equitable title
to any portion thereof.
Section 9.10. Benefit of Article IX. The provisions of
this Article (other than the following Section 9.11) are intended
solely for the benefit of Lender Parties, and no Restricted
Person shall be entitled to rely on any such provision or assert
any such provision in a claim or defense against any Lender.
Lender Parties may waive or amend such provisions as they desire
without any notice to or consent of Canadian Borrower or any
Restricted Person.
Section 9.11. Resignation. Canadian Agent may resign at
any time by giving written notice thereof to Lenders and Canadian
Borrowers. Each such notice shall set forth the date of such
resignation. Upon any such resignation, Required Lenders shall
have the right to appoint a successor Canadian Agent and if no
Default or Event of Default has occurred and is continuing,
Required Lenders shall obtain the consent of Canadian Borrowers.
A successor must be appointed for any retiring Canadian Agent,
and such Canadian Agent's resignation shall become effective when
such successor accepts such appointment. If, within thirty days
after the date of the retiring Canadian Agent's resignation, no
successor Canadian Agent has been appointed and has accepted such
appointment, then the retiring Canadian Agent may appoint a
successor Canadian Agent, which shall be a commercial bank
organized or licensed to conduct a banking or trust business
under the Laws of Canada or of any province thereof and if no
Default or Event of Default has occurred and is continuing,
retiring Canadian Agent shall obtain the consent of Canadian
Borrowers. Upon the acceptance of any appointment as Canadian
Agent hereunder by a successor Canadian Agent, the retiring
Canadian Agent shall be discharged from its duties and
obligations under this Agreement and the other Canadian Loan
Documents. After any retiring Canadian Agent's resignation
hereunder the provisions of this Article IX shall continue to
inure to its benefit as to any actions taken or omitted to be
taken by it while it was Canadian Agent under the Canadian Loan
Documents.
Section 9.12. Lenders to Remain Pro Rata. It is the intent
of all parties hereto that, except for Competitive Bid Loans,
Canadian Swing Loans, US Swing Loans and matters related thereto,
the pro rata share of each Lender in the US Obligations and the
Canadian Obligations shall be substantially the same at all times
during the term of this Agreement. Accordingly, the initial
Percentage Share of each Lender in the US Maximum Credit Amount
will be the same as the initial Percentage Share of such Lender
in the Canadian Maximum Credit Amount. All subsequent
assignments and adjustments of the interests of the Lenders in
the US Obligations and the Canadian Obligations will be made so
as to maintain such a pro rata arrangement; provided that for the
purposes of determining these pro rata shares, any Percentage
Share held by any Lender's Affiliates shall be included in
determining the interests of such Lender.
ARTICLE X - Miscellaneous
Section 10.1. Waivers and Amendments; Acknowledgments.
(a) Waivers and Amendments. No failure or delay (whether
by course of conduct or otherwise) by any Lender Party in
exercising any right, power or remedy which such Lender Party may
have under any of the Canadian Loan Documents shall operate as a
waiver thereof or of any other right, power or remedy, nor shall
any single or partial exercise by any Lender Party of any such
right, power or remedy preclude any other or further exercise
thereof or of any other right, power or remedy. No waiver of any
provision of any Canadian Loan Document and no consent to any
departure therefrom shall ever be effective unless it is in
writing and signed as provided below in this section, and then
such waiver or consent shall be effective only in the specific
instances and for the purposes for which given and to the extent
specified in such writing. No notice to or demand on any
Restricted Person shall in any case of itself entitle any
Restricted Person to any other or further notice or demand in
similar or other circumstances. This Agreement and the other
Canadian Loan Documents set forth the entire understanding
between the parties hereto with respect to the transactions
contemplated herein and therein and supersede all prior
discussions and understandings with respect to the subject matter
hereof and thereof, and no waiver, consent, release, modification
or amendment of or supplement to this Agreement or the other
Canadian Loan Documents shall be valid or effective against any
party hereto unless the same is in writing and signed by (i) if
such party is Canadian Borrowers, by Canadian Borrowers, (ii) if
such party is Canadian Agent or Canadian LC Issuer, by such
party, and (iii) if such party is a Lender, by such Lender or by
Canadian Agent on behalf of Lenders with the written consent of
Required Lenders (which consent has already been given as to the
termination of the Canadian Loan Documents as provided in Section
10.10). Notwithstanding the foregoing or anything to the
contrary herein, Canadian Agent shall not, without the prior
consent of Majority Lenders, execute and deliver on behalf of
such Lender any waiver or amendment which would increase the
Canadian Maximum Credit Amount hereunder. Notwithstanding the
foregoing or anything to the contrary herein, Canadian Agent
shall not, without the prior consent of each individual Lender,
execute and deliver on behalf of such Lender any waiver or
amendment which would: (1) waive any of the conditions specified
in Article IV, (2) increase the maximum amount which such Lender
is committed hereunder to lend, (3) reduce any fees payable to
such Lender hereunder, or the principal of, or interest on, such
Lender's Note, (4) postpone any date fixed for any payment of any
such fees, principal or interest, (5) amend the definition herein
of "Required Lenders", "Majority Lenders", or otherwise change
the aggregate amount of Percentage Shares which is required for
Canadian Agent, Lenders or any of them to take any particular
action under the Canadian Loan Documents, (6) release Canadian
Borrowers from their obligation to pay such Lender's Note or
Canadian Guarantor from its guaranty of such payment, or (7)
amend this Section 10.1(a).
(b) Acknowledgments and Admissions. Canadian Borrower
hereby represents, warrants, acknowledges and admits that (i) it
has been advised by counsel in the negotiation, execution and
delivery of the Canadian Loan Documents to which it is a party,
(ii) it has made an independent decision to enter into this
Agreement and the other Canadian Loan Documents to which it is a
party, without reliance on any representation, warranty, covenant
or undertaking by Canadian Agent or any Lender, whether written,
oral or implicit, other than as expressly set out in this
Agreement or in another Canadian Loan Document delivered on or
after the date hereof, (iii) there are no representations,
warranties, covenants, undertakings or agreements by any Lender
as to the Canadian Loan Documents except as expressly set out in
this Agreement or in another Canadian Loan Document delivered on
or after the date hereof, (iv) no Lender has any fiduciary
obligation toward such Canadian Borrower with respect to any
Canadian Loan Document or the transactions contemplated thereby,
(v) the relationship pursuant to the Canadian Loan Documents
between such Canadian Borrower and the other Restricted Persons,
on one hand, and each Lender, on the other hand, is and shall be
solely that of debtor and creditor, respectively, (vi) no
partnership or joint venture exists with respect to the Canadian
Loan Documents between any Restricted Person and any Lender,
(vii) Canadian Agent is not such Canadian Borrower's Canadian
Agent, but Canadian Agent for Lenders, (viii) without limiting
any of the foregoing, Canadian Borrower is not relying upon any
representation or covenant by any Lender, or any representative
thereof, and no such representation or covenant has been made,
that any Lender will, at the time of an Event of Default or
Default, or at any other time, waive, negotiate, discuss, or take
or refrain from taking any action permitted under the Canadian
Loan Documents with respect to any such Event of Default or
Default or any other provision of the Canadian Loan Documents,
and (ix) all Lender Parties have relied upon the truthfulness of
the acknowledgments in this section in deciding to execute and
deliver this Agreement and to become obligated hereunder.
(c) Joint Acknowledgment. This written Agreement and the
other Canadian Loan Documents represent the final agreement
between the parties and may not be contradicted by evidence of
prior, contemporaneous, or subsequent oral agreements of the
parties.
(d) 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.
There are no unwritten oral agreements between the parties.
Section 10.2. Survival of Agreements; Cumulative Nature.
All of Restricted Persons' various representations, warranties,
covenants and agreements in the Canadian Loan Documents shall
survive the execution and delivery of this Agreement and the
other Canadian Loan Documents and the performance hereof and
thereof, including the making or granting of the Canadian Loans
and the delivery of the Canadian Notes and the other Canadian
Loan Documents, and shall further survive until all of the
Canadian Obligations are paid in full to each Lender Party and
all of Lender Parties' obligations to Canadian Borrowers are
terminated. All statements and agreements contained in any
certificate or other instrument delivered by any Restricted
Person to any Lender Party under any Canadian Loan Document shall
be deemed representations and warranties by each Canadian
Borrower or agreements and covenants of Canadian Borrower under
this Agreement. The representations, warranties, indemnities,
and covenants made by Restricted Persons in the Canadian Loan
Documents, and the rights, powers, and privileges granted to
Lender Parties in the Canadian Loan Documents, are cumulative,
and, except for expressly specified waivers and consents, no
Canadian Loan Document shall be construed in the context of
another to diminish, nullify, or otherwise reduce the benefit to
any Lender Party of any such representation, warranty, indemnity,
covenant, right, power or privilege. In particular and without
limitation, no exception set out in this Agreement to any
representation, warranty, indemnity, or covenant herein contained
shall apply to any similar representation, warranty, indemnity,
or covenant contained in any other Canadian Loan Document, and
each such similar representation, warranty, indemnity, or
covenant shall be subject only to those exceptions which are
expressly made applicable to it by the terms of the various
Canadian Loan Documents.
Section 10.3. Notices. All notices, requests, consents,
demands and other communications required or permitted under any
Canadian Loan Document shall be in writing, unless otherwise
specifically provided in such Canadian Loan Document (provided
that Canadian Agent may give telephonic notices to the other
Lender Parties), and shall be deemed sufficiently given or
furnished if delivered by personal delivery, by facsimile or
other electronic transmission, by delivery service with proof of
delivery, or by registered Canadian mail, postage prepaid, to
each Canadian Borrower and Restricted Persons at the address of
each Canadian Borrower specified on the signature pages hereto
and to Canadian Agent at its address specified on the signature
pages hereto and to each Lender Party at the address specified on
Annex II (unless changed by similar notice in writing given by
the particular Person whose address is to be changed). Any such
notice or communication shall be deemed to have been given (a) in
the case of personal delivery or delivery service, as of the date
of first attempted delivery during normal business hours at the
address provided herein, (b) in the case of facsimile or other
electronic transmission, upon receipt, or (c) in the case of
registered Canadian mail, five Business Days after deposit in the
mail; provided, however, that no Borrowing Notice shall become
effective until actually received by Canadian Agent.
Section 10.4. Payment of Expenses; Indemnity.
(a) Payment of Expenses. Whether or not the transactions
contemplated by this Agreement are consummated, Northstar Energy
will promptly (and in any event, within 30 days after any invoice
or other statement or notice) pay: (i) all reasonable costs and
expenses incurred by or on behalf of Canadian Agent (including
without limitation, legal fees) in connection with (1) the
negotiation, preparation, execution and delivery of the Canadian
Loan Documents, and any and all consents, waivers or other
documents or instruments relating thereto, (2) the filing,
recording, refiling and re-recording of any Canadian Loan
Documents and any other documents or instruments or further
assurances required to be filed or recorded or refiled or
re-recorded by the terms of any Canadian Loan Document, (3) the
borrowings hereunder and other action reasonably required in the
course of administration hereof, (4) monitoring or confirming (or
preparation or negotiation of any document related to) Canadian
Borrowers' compliance with any covenants or conditions contained
in this Agreement or in any Canadian Loan Document, and (ii) all
reasonable costs and expenses incurred by or on behalf of any
Lender Party (including without limitation, legal fees,
consultants' fees and accounting fees) in connection with the
defense or enforcement of any of the Canadian Loan Documents
(including this section) or the defense of any Lender Party's
exercise of its rights thereunder.
(b) Indemnity. Northstar Energy agrees to indemnify each
Lender Party, upon demand, from and against any and all
liabilities, obligations, claims, losses, damages, penalties,
fines, actions, judgments, suits, settlements, costs, expenses or
disbursements, excluding principal and interest owing by Devon
Canada with respect to Canadian Advances made to Devon Canada,
but including reasonable fees of legal counsel, accountants,
experts and advisors) of any kind or nature whatsoever (in this
section collectively called "liabilities and costs") which to any
extent (in whole or in part) may be imposed on, incurred by, or
asserted against such Lender Party growing out of, resulting from
or in any other way associated with the Canadian Loan Documents
and the transactions and events (including the enforcement or
defense thereof) at any time associated therewith or contemplated
therein (whether arising in contract or in tort or otherwise and
including any violation or noncompliance with any Environmental
Laws by any Lender Party or any other Person or any liabilities
or duties of any Lender Party or any other Person with respect to
Hazardous Materials found in or released into the environment).
The foregoing indemnification shall apply whether or not such
liabilities and costs are in any way or to any extent owed, in
whole or in part, under any claim or theory of strict liability
or caused, in whole or in part by any negligent act or omission
of any kind by any Lender Party,
provided only that no Lender Party shall be entitled under this
section to receive indemnification for that portion, if any, of
any liabilities and costs which is proximately caused by its own
individual gross negligence or willful misconduct, as determined
in a final judgment. If any Person (including Canadian Borrowers
or any of their Affiliates) ever alleges such gross negligence or
willful misconduct by any Lender Party, the indemnification
provided for in this section shall nonetheless be paid upon
demand, subject to later adjustment or reimbursement, until such
time as a court of competent jurisdiction enters a final judgment
as to the extent and effect of the alleged gross negligence or
willful misconduct. As used in this section the term "Lender
Party" shall refer not only to each Person designated as such in
Section 1.1 but also to each director, officer, agent, attorney,
employee, representative and Affiliate of such Person.
Section 10.5. Parties in Interest. All grants, covenants
and agreements contained in the Canadian Loan Documents shall
bind and inure to the benefit of the parties thereto and their
respective successors and assigns; provided, however, that no
Restricted Person may assign or transfer any of its rights or
delegate any of its duties or obligations under any Canadian Loan
Document without the prior consent of Required Lenders. No
Canadian Borrower nor any Affiliates of any Canadian Borrower
shall directly or indirectly purchase or otherwise retire any
Obligations owed to any Lender nor will any Lender accept any
offer to do so, unless each Lender shall have received
substantially the same offer with respect to the same Percentage
Share of the Obligations owed to it. If Canadian Borrower or any
Affiliate of any Canadian Borrower at any time purchases some but
less than all of the Obligations owed to all Lender Parties, such
purchaser shall not be entitled to any rights of any Lender under
the Canadian Loan Documents unless and until Canadian Borrowers
or their Affiliates have purchased all of the Obligations.
Section 10.6. Assignments and Participations.
(a) Each Lender may assign to one or more Eligible
Transferees all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion
of its Canadian Loans, its Note, and its Percentage Share of the
Canadian Maximum Credit Amount); provided, however, that
(i) each such assignment shall be to an Eligible
Transferee;
(ii) together with each such assignment of its rights
and obligations under this Agreement, such Lender shall
assign the same Percentage Share of its rights and
obligations under the US Agreement to the same Eligible
Transferee or an Affiliate of such Eligible Transferee;
(iii) except in the case of such an assignment to
another Lender or an assignment of all of a Lender's rights
and obligations under this Agreement, any partial assignment
of such Lender's rights and obligations under this Agreement
and under the US Agreement shall be in a collective amount
at least equal to US $20,000,000 or an integral multiple of
US $5,000,000 in excess thereof;
(iv) each such assignment by a Lender shall be of a
constant, and not varying, percentage of all of its rights
and obligations under the Canadian Loan Documents; and
(v) the parties to such assignment shall execute and
deliver to Canadian Agent for its acceptance an Assignment
and Acceptance in the form of Exhibit F hereto, together
with any Canadian Note subject to such assignment and a
processing fee of US$3,500.
Upon execution, delivery, and acceptance of such Assignment and
Acceptance, the assignee thereunder shall be a party hereto and,
to the extent of such assignment, have the obligations, rights,
and benefits of a Lender hereunder and the assigning Lender
shall, to the extent of such assignment, relinquish its rights
and be released from its obligations under this Agreement. Upon
the consummation of any assignment pursuant to this section, the
assignor, Canadian Agent and Canadian Borrowers shall make
appropriate arrangements so that, if required, new Canadian Notes
are issued to the assignor and the assignee. If the assignee is
not incorporated under the Laws of Canada or a province thereof,
it shall deliver to Canadian Borrowers and Canadian Agent
certification as to exemption from deduction or withholding of
Taxes in accordance with Section 3.9 of the US Agreement.
(b) Canadian Agent shall maintain at its address referred
to in Section 10.3 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lenders and their
Percentage Share of the Canadian Maximum Credit Amount of, and
principal amount of the Canadian Loans owing to, each Lender from
time to time (the "Register"). The entries in the Register shall
be conclusive and binding for all purposes, absent manifest
error, and Canadian Borrowers, Canadian Agent and the Lenders may
treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by Canadian Borrowers
or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(c) Upon its receipt of an Assignment and Acceptance
executed by the parties thereto, together with any Canadian Note
subject to such assignment and payment of the processing fee,
Canadian Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit F hereto,
(i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give
prompt notice thereof to the parties thereto.
(d) Each Lender may sell participations to one or more
Persons that are Eligible Transferees in all or a portion of its
rights and obligations under this Agreement (including all or a
portion of the Canadian Maximum Credit Amount and its Canadian
Loans); provided, however, that (i) such Lender's obligations
under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) the participant shall
be entitled to the benefit of the yield protection provisions
contained in Article III and the right of offset contained in
Section 6.13, and (iv) Canadian Borrowers shall continue to deal
solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement, and such
Lender shall retain the sole right to enforce the obligations of
Canadian Borrowers relating to its Canadian Loans and its
Canadian Note and to approve any amendment, modification, or
waiver of any provision of this Agreement (other than amendments,
modifications, or waivers decreasing the amount of principal of
or the rate at which interest is payable on such Canadian Loans
or Canadian Note, extending any scheduled principal payment date
or date fixed for the payment of interest on such Canadian Loans
or Canadian Note, or extending its Canadian Maximum Credit
Amount).
(e) Notwithstanding any other provision set forth in this
Agreement, any Lender residing in the United States may at any
time assign and pledge all or any portion of its Canadian
Advances and its Canadian Note to any Federal Reserve Bank as
collateral security pursuant to Regulation A and any Operating
Circular issued by such Federal Reserve Bank. No such assignment
shall release the assigning Lender from its obligations
hereunder.
(f) Any Lender may furnish any information concerning
Canadian Borrowers or any of its Subsidiaries in the possession
of such Lender from time to time to assignees and participants
(including prospective assignees and participants), subject,
however, to the provisions of Section 10.7 hereof.
Section 10.7. Confidentiality. Canadian Agent and each
Lender (each, a "Lending Party") agrees to keep confidential any
information furnished or made available to it by Canadian
Borrowers pursuant to this Agreement that is marked confidential;
provided that nothing herein shall prevent any Lending Party from
disclosing such information (a) to any other Lending Party or any
Affiliate of any Lending Party, or any officer, director,
employee, agent, or advisor of any Lending Party or Affiliate of
any Lending Party, (b) to any other Person if reasonably
incidental to the administration of the credit facility provided
herein, (c) as required by any Law, rule, or regulation, (d) upon
the order of any Tribunal, (e) upon the request or demand of any
regulatory agency or authority, (f) that is or becomes available
to the public or that is or becomes available to any Lending
Party other than as a result of a disclosure by any Lending Party
prohibited by this Agreement, (g) in connection with any
litigation to which such Lending Party or any of its Affiliates
may be a party, (h) to the extent necessary in connection with
the exercise of any remedy under this Agreement or any other
Canadian Loan Document, and (i) subject to provisions
substantially similar to those contained in this section, to any
actual or proposed participant or assignee.
Section 10.8. Governing Law; Submission to Process. Except
to the extent that the law of another jurisdiction is expressly
elected in a Canadian Loan Document, the Canadian Loan Documents
shall be deemed contracts and instruments made under the laws of
the Province of Alberta and shall be construed and enforced in
accordance with and governed by the laws of the Province of
Alberta and the laws of Canada applicable thereto, without regard
to principles of conflicts of law. Each of the parties hereby
agrees that any legal action or proceeding against such Canadian
Borrower with respect to this Agreement, the Canadian Notes or
any of the Canadian Loan Documents may be brought in the courts
of the Province of Alberta and each party submits and attorns to,
the non-exclusive jurisdiction of the aforesaid courts. Each
party waives any right to stay or to dismiss any action or
proceeding brought before said courts on the basis of forum non
conveniens. Nothing herein shall affect the right of Lender
Parties to serve process in any other manner permitted by law or
shall limit the right of Lender Parties to bring proceedings
against Canadian Borrowers in the courts of any other
jurisdiction.
Section 10.9. Waiver of Judgment Interest Act (Alberta).
To the extent permitted by Law, the provisions of the Judgment
Interest Act (Alberta) shall not apply to the Canadian Loan
Documents and are hereby expressly waived by Canadian Borrowers.
Section 10.10. Deemed Reinvestment Not Applicable. For the
purposes of the Interest Act (Canada), the principle of deemed
reinvestment of interest shall not apply to any interest
calculation under the Canadian Loan Documents, and the rates of
interest stipulated in this Agreement are intended to be nominal
rates and not effective rates or yields.
Section 10.11. Limitation on Interest. Lender Parties,
Restricted Persons and any other parties to the Canadian Loan
Documents intend to contract in strict compliance with applicable
usury Law from time to time in effect. In furtherance thereof
such Persons stipulate and agree that none of the terms and
provisions contained in the Canadian Loan Documents shall ever be
construed to create a contract to pay, for the use, forbearance
or detention of money, interest in excess of the maximum amount
of interest permitted to be charged by applicable Law from time
to time in effect. Neither any Restricted Person nor any present
or future guarantors, endorsers, or other Persons hereafter
becoming liable for payment of any Obligation shall ever be
liable for unearned interest thereon or shall ever be required to
pay interest thereon in excess of the maximum amount that may be
lawfully charged under applicable Law from time to time in
effect, and the provisions of this section shall control over all
other provisions of the Canadian Loan Documents which may be in
conflict or apparent conflict herewith. Lender Parties expressly
disavow any intention to charge or collect excessive unearned
interest or finance charges in the event the maturity of any
Obligation is accelerated. If (a) the maturity of any Obligation
is accelerated for any reason, (b) any Obligation is prepaid and
as a result any amounts held to constitute interest are
determined to be in excess of the legal maximum, or (c) any
Lender or any other holder of any or all of the Obligations shall
otherwise collect moneys which are determined to constitute
interest which would otherwise increase the interest on any or
all of the Obligations to an amount in excess of that permitted
to be charged by applicable Law then in effect, then all sums
determined to constitute interest in excess of such legal limit
shall, without penalty, be promptly applied to reduce the then
outstanding principal of the related Obligations or, at such
Lender's or holder's option, promptly returned to Canadian
Borrowers or the other payor thereof upon such determination. In
determining whether or not the interest paid or payable, under
any specific circumstance, exceeds the maximum amount permitted
under applicable Law, Lender Parties and Restricted Persons (and
any other payors thereof) shall to the greatest extent permitted
under applicable Law, and in accordance with generally accepted
actuarial practices and principles, (i) characterize any
non-principal payment as an expense, fee or premium rather than
as interest, (ii) exclude voluntary prepayments and the effects
thereof, and (iii) amortize, prorate, allocate, and spread the
total amount of interest throughout the entire contemplated term
of the instruments evidencing the Obligations in accordance with
the amounts outstanding from time to time thereunder and the
maximum legal rate of interest from time to time in effect under
applicable Law in order to lawfully charge the maximum amount of
interest permitted under applicable Law. In no event shall the
aggregate "interest" (as defined in section 347 of the Criminal
Code (Canada)) payable under the Canadian Loan Documents exceed
the maximum effective annual rate of interest on the "credit
advanced" (as defined in that section) permitted under that
section and, if any payment, collection or demand pursuant to
this Agreement in respect of "interest" (as defined in that
section) is determined to be contrary to the provisions of that
section, such payment, collection or demand shall be deemed to
have been made by mutual mistake of Canadian Borrowers, Canadian
Agent and Lenders and the amount of such excess payment or
collection shall be refunded to Canadian Borrowers. For purposes
of the Canadian Loan Documents, the effective annual rate of
interest shall be determined in accordance with generally
accepted actuarial practices and principles over the term
applicable to the Canadian Obligations on the basis of annual
compounding of the lawfully permitted rate of interest and, in
the event of dispute, a certificate of a Fellow of the Canadian
Institute of Actuaries appointed by Canadian Agent shall be prima
facie evidence, for the purposes of such determination.
Section 10.12. Termination; Limited Survival. In their sole
and absolute discretion, Canadian Borrowers may at any time that
no Obligations are owing elect in a written notice delivered to
Canadian Agent to terminate this Agreement. Upon receipt by
Canadian Agent of such a notice, if no Obligations are then owing
this Agreement and all other Canadian Loan Documents shall
thereupon be terminated and the parties thereto released from all
prospective obligations thereunder. Notwithstanding the
foregoing or anything herein to the contrary, any waivers or
admissions made by any Restricted Person in any Canadian Loan
Document, any Obligations under Sections 3.2 through 3.6, and any
obligations which any Person may have to indemnify or compensate
any Lender Party shall survive any termination of this Agreement
or any other Canadian Loan Document. At the request and expense
of Canadian Borrowers, Canadian Agent shall prepare and execute
all necessary instruments to reflect and effect such termination
of the Canadian Loan Documents. Canadian Agent is hereby
authorized to execute all such instruments on behalf of all
Lenders, without the joinder of or further action by any Lender.
Section 10.13. Severability. If any term or provision of
any Canadian Loan Document shall be determined to be illegal or
unenforceable all other terms and provisions of the Canadian Loan
Documents shall nevertheless remain effective and shall be
enforced to the fullest extent permitted by applicable Law.
Section 10.14. Counterparts; Fax. This Agreement may be
separately executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which
when so executed shall be deemed to constitute one and the same
Agreement. This Agreement and the Canadian Loan Documents may be
validly executed and delivered by facsimile or other electronic
transmission.
Section 10.15. Waiver of Jury Trial, Punitive Damages, etc.
Each Canadian Borrower and each Lender Party hereby knowingly,
voluntarily, intentionally, and irrevocably (a) waives, to the
maximum extent not prohibited by Law, any right it may have to a
trial by jury in respect of any litigation based hereon, or
directly or indirectly at any time arising out of, under or in
connection with the Canadian Loan Documents or any transaction
contemplated thereby or associated therewith, before or after
maturity; (b) waives, to the maximum extent not prohibited by
Law, any right it may have to claim or recover in any such
litigation any "Special Damages", as defined below, (c) certifies
that no party hereto nor any representative or agent or counsel
for any party hereto has represented, expressly or otherwise, or
implied that such party would not, in the event of litigation,
seek to enforce the foregoing waivers, and (d) acknowledges that
it has been induced to enter into this Agreement, the other
Canadian Loan Documents and the transactions contemplated hereby
and thereby by, among other things, the mutual waivers and
certifications contained in this section. As used in this
section, "Special Damages" includes all special, consequential,
exemplary, or punitive damages (regardless of how named), but
does not include any payments or funds which any party hereto has
expressly promised to pay or deliver to any other party hereto.
Section 10.16. Defined Terms. Capitalized terms and phrases
used and not otherwise defined herein shall for all purposes of
this Agreement have the meaning given to such terms and phrases
in Annex I hereto.
Section 10.17. Annex I, Exhibits and Schedules; Additional
Definitions. Annex I, Annex II, and all Exhibits and Schedules
attached to this Agreement are a part hereof for all purposes.
Section 10.18. Amendment of Defined Instruments. Unless the
context otherwise requires or unless otherwise provided herein
the terms defined in this Agreement which refer to a particular
agreement, instrument or document also refer to and include all
renewals, extensions, modifications, amendments and restatements
of such agreement, instrument or document, provided that nothing
contained in this section shall be construed to authorize any
such renewal, extension, modification, amendment or restatement.
Section 10.19. References and Titles. All references in
this Agreement to Exhibits, Schedules, articles, sections,
subsections and other subdivisions refer to the Exhibits,
Schedules, articles, sections, subsections and other subdivisions
of this Agreement unless expressly provided otherwise. Titles
appearing at the beginning of any subdivisions are for
convenience only and do not constitute any part of such
subdivisions and shall be disregarded in construing the language
contained in such subdivisions. The words "this Agreement",
"this instrument", "herein", "hereof", "hereby", "hereunder" and
words of similar import refer to this Agreement as a whole and
not to any particular subdivision unless expressly so limited.
The phrases "this section" and "this subsection" and similar
phrases refer only to the sections or subsections hereof in which
such phrases occur. The word "or" is not exclusive, and the word
"including" (in its various forms) means "including without
limitation". Pronouns in masculine, feminine and neuter genders
shall be construed to include any other gender, and words in the
singular form shall be construed to include the plural and vice
versa, unless the context otherwise requires.
Section 10.20. Calculations and Determinations. All
calculations under the Canadian Loan Documents of interest
chargeable with respect to Eurodollar Loans and of fees shall be
made on the basis of actual days elapsed (including the first day
but excluding the last) and a year of 360 days. All other
calculations of interest made under the Canadian Loan Documents
shall be made on the basis of actual days elapsed (including the
first day but excluding the last) and a year of 365 or 366 days,
as appropriate. Each determination by a Lender Party of amounts
to be paid under Article III or any other matters which are to be
determined hereunder by a Lender Party (such as any US Dollar
Eurodollar Rate, Canadian Dollar Eurodollar Rate, Adjusted US
Dollar Eurodollar Rate, Adjusted Canadian Dollar Eurodollar Rate,
Business Day, Interest Period, or Reserve Requirement) shall, in
the absence of manifest error, be conclusive and binding. Unless
otherwise expressly provided herein or unless Required Lenders
otherwise consent all financial statements and reports furnished
to any Lender Party hereunder shall be prepared and all financial
computations and determinations pursuant hereto shall be made in
accordance with US GAAP.
Section 10.21. Construction of Indemnities and Releases.
All indemnification and release provisions of this Agreement
shall be construed broadly (and not narrowly) in favor of the
Persons receiving indemnification from or being released.
Section 10.22. Separate Obligations. All obligations of
Northstar Energy and Devon Canada under this Agreement and the
other Canadian Loan Documents are separate and individual
obligations of Northstar Energy and Devon Canada, respectively,
and Northstar Energy shall not have any liabilities in respect of
Canadian Advances made by the Lenders to Devon Canada nor shall
Devon Canada have any liabilities in respect of Canadian Advances
made to Northstar Energy.
Section 10.23. Termination of Existing Canadian Agreement.
Upon the payment in full of all outstanding indebtedness owing
under the Existing Canadian Agreement, the Existing Canadian
Agreement and the other loan documents executed pursuant thereto
shall be terminated and the parties thereto shall have no further
obligations or liabilities, covenants, or representations
thereunder; provided, however, the indemnification obligations
provided in the Existing Canadian Agreement shall not be
terminated and shall survive the termination of the Existing
Canadian Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, this Agreement is executed as of the
date first written above.
NORTHSTAR ENERGY CORPORATION
Canadian Borrower
By:
▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President - Finance
Address:
▇▇▇▇, ▇▇▇-▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
Attention: Vice President -
Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
DEVON ENERGY CANADA CORPORATION
Canadian Borrower
By:
▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President - Finance
Address:
▇▇▇▇, ▇▇▇-▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
Attention: Vice President -
Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
BANK OF AMERICA CANADA
Administrative Agent, Canadian
LC Issuer and Lender
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Vice President
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
BANK ONE CANADA
Lender
By:
Name:
Title:
BANK OF MONTREAL
Lender
By:
Name:
Title:
THE CHASE MANHATTAN BANK
Lender
By:
Name:
Title:
UMB OKLAHOMA BANK
Lender
By:
Name:
Title:
FIRST UNION NATIONAL BANK
Lender
By:
Name:
Title:
TORONTO-DOMINION BANK
Lender
By:
Name:
Title:
WESTDEUTSCHE LANDESBANK
GIROZENTRALE
Lender
By:
Name:
Title:
By:
Name:
Title:
THE BANK OF NEW YORK
Lender
By:
Name:
Title:
ROYAL BANK OF CANADA
Lender
By:
Name:
Title:
SUNTRUST BANK, ATLANTA
Lender
By:
Name:
Title:
By:
Name:
Title:
▇.▇. ▇▇▇▇▇▇ CANADA
Lender
By:
Name:
Title:
CITIBANK CANADA
Lender
By:
Name:
Title:
DEUTSCHE BANK AG
Lender
By:
Name:
Title:
CANADIAN IMPERIAL BANK OF
COMMERCE
Lender
By:
Name:
Title:
By:
Name:
Title: