1
Exhibit 10.15
GULF CANADA RESOURCES LIMITED
- and -
THE LENDERS NAMED HEREIN
- and -
BANK OF MONTREAL
(AS AGENT FOR THE LENDERS)
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LOAN AGREEMENT
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SEPTEMBER 18, 1998
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TABLE OF CONTENTS
PAGE NO.
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ARTICLE I DEFINITIONS AND PRINCIPLES OF INTERPRETATION
1.1 Definitions.................................................... 2
1.2 Certain Rules of Interpretation................................ 20
1.3 Accounting Principles.......................................... 20
1.4 Cross-References............................................... 20
1.5 Ratings........................................................ 21
1.6 Currency....................................................... 21
1.7 Schedules...................................................... 21
ARTICLE II THE FACILITY
2.1 The Facility................................................... 21
2.2 Purpose........................................................ 23
2.3 Availment of Facility.......................................... 23
2.4 Drawdown Notices............................................... 24
2.5 Notice of Drawdown to Lenders.................................. 25
2.6 Funding........................................................ 25
2.7 Funding Reliance; Lender's Failure to Fund..................... 27
2.8 Several Funding Obligations.................................... 28
2.9 Pro-Rata Treatment of Drawdowns................................ 28
2.10 Restrictions on Drawdowns...................................... 29
2.11 Conversion Option.............................................. 30
2.12 Rollovers...................................................... 31
2.13 Evidence of Indebtedness....................................... 31
2.14 Netting........................................................ 31
ARTICLE III FURTHER PROVISIONS RELATING TOLIBOR DRAWDOWNS,
BANKERS'ACCEPTANCES AND LETTERS OF CREDIT
3.1 Effects of Change of Law....................................... 32
3.2 Illegality..................................................... 33
3.3 Bankers' Acceptances........................................... 34
3.4 Issuance of Letters of Credit.................................. 35
ARTICLE IV PAYMENT OF INTEREST AND OTHER FEES
4.1 Interest on Prime Rate Drawdowns............................... 35
4.2 Interest on Base Rate Drawdowns................................ 36
4.3 Interest on Libor Drawdowns.................................... 36
4.4 Stamping Fees on Bankers' Acceptances.......................... 37
4.5 Fees for Letters of Credit..................................... 37
4.6 Incremental Interest and Fees.................................. 37
4.7 Interest on Unpaid Costs and Expenses.......................... 38
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4.8 Annual Rates of Interest....................................... 38
4.9 Commitment Fee................................................. 38
4.10 Limitation on Interest......................................... 39
4.11 Increased Costs................................................ 39
4.12 Waiver of Judgment Interest Act (Alberta)...................... 40
ARTICLE V REPAYMENTS AND PREPAYMENTS
5.1 Amounts Under Facility May be Reborrowed....................... 40
5.2 Repayment under the Facility after Term Out Date............... 40
5.3 Voluntary Prepayments.......................................... 41
5.4 Currency Fluctuations.......................................... 42
5.5 Voluntary Reduction of Commitments............................. 42
ARTICLE VI CONDITIONS PRECEDENT TO DRAWDOWNS
6.1 Conditions Precedent to First Drawdown......................... 42
6.2 Conditions Precedent to All Drawdowns.......................... 43
6.3 Waiver......................................................... 43
ARTICLE VII BORROWER'S REPRESENTATIONS AND WARRANTIES
7.1 Borrower's Representations and Warranties...................... 44
ARTICLE VIII COVENANTS
8.1 Covenants..................................................... 48
8.2 Environmental Indemnity........................................ 55
8.3 Restricted/Unrestricted Subsidiaries........................... 55
8.4 Certain Requirements in Respect of Mergers, etc................ 57
ARTICLE IX EVENTS OF DEFAULT
9.1 Events of Default.............................................. 58
9.2 Termination and Acceleration................................... 60
9.3 Remedies Cumulative and Waivers................................ 61
9.4 Setoff......................................................... 61
ARTICLE X THE AGENT AND THE LENDERS
10.1 The Agent...................................................... 62
10.2 The Agent's Responsibility..................................... 62
10.3 The Agent's Duties............................................. 63
10.4 Protection of Agent............................................ 64
10.5 Indemnification of Agent....................................... 65
10.6 Termination or Resignation of an Agent......................... 65
10.7 Rights of the Agent as Lender.................................. 66
10.8 Financial Information Concerning Gulf.......................... 66
10.9 Knowledge of Financial Situation of the Borrower............... 66
10.10 Legal Proceedings.............................................. 67
10.11 Capacity as Agent.............................................. 67
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ARTICLE XI PAYMENT
11.1 Payments to Agent.............................................. 68
11.2 Payments by Lenders to Agent................................... 68
11.3 Payments by Agent to Borrower.................................. 69
11.4 No Set-Off or Counterclaim by Borrower......................... 69
11.5 Non-Receipt by Agent........................................... 69
11.6 When Due Date Not Specified.................................... 69
11.7 Agent's Authority to Debit..................................... 69
ARTICLE XII GENERAL
12.1 Costs and Expenses............................................. 69
12.2 Indemnifications by the Borrower............................... 70
12.3 Funds.......................................................... 71
12.4 Notice......................................................... 72
12.5 Governing Law.................................................. 73
12.6 Judgment Currency.............................................. 73
12.7 Amendments, Etc................................................ 73
12.8 Severability................................................... 74
12.9 Whole Agreement................................................ 74
12.10 Binding Effect; Assignments.................................... 74
12.11 Participations................................................. 75
12.12 Further Assurances............................................. 76
12.13 Counterparts................................................... 77
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Schedule A - Schedule of Lenders
Schedule B - Compliance Certificate
Schedule C - Drawdown Notice
Schedule D - Bankers' Acceptance Undertaking
Schedule E - Extension Agreement
Schedule F - Extension Request
Schedule G - Bank Transfer Agreement
Schedule H - Borrower's Counsel's Opinion
Schedule I - Lenders' Counsel's Opinion
Schedule J - Notice of Amendment of Unrestricted Subsidiaries
Schedule K - Letter of Credit Documentation
Schedule L - List of Unrestricted Subsidiaries
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LOAN AGREEMENT
THIS AGREEMENT, made as of the 18th day of September, ▇▇▇▇,
▇ ▇ ▇ ▇ ▇ ▇ ▇:
GULF CANADA RESOURCES LIMITED, a corporation governed by the
laws of Canada
(hereinafter called the "Borrower")
- and -
THE LENDERS NAMED IN SCHEDULE A to this Agreement as amended
from time to time
(hereinafter called the "Lenders")
- and -
BANK OF MONTREAL, a bank existing under the laws of Canada,
as the Agent on behalf of the Lenders
(hereinafter, in such capacity, called the "Agent")
WITNESSES THAT WHEREAS the Borrower has requested the Facility
(as hereinafter defined) for general corporate purposes and the Lenders have
agreed to provide the Facility to the Borrower on the terms and conditions
herein set forth;
NOW THEREFORE in consideration of the premises and mutual
agreements and covenants contained in this Agreement and other good and valuable
consideration (the receipt and adequacy of which are hereby mutually
acknowledged), the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS AND PRINCIPLES OF INTERPRETATION
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I.1 Definitions - Whenever used in this Agreement, unless there is
something inconsistent in the subject matter or context, the following words and
terms shall have the meaning set out below:
"ADVANCE" means a utilization of the Facility by the Borrower by way of
a Prime Rate Drawdown, Base Rate Drawdown, Libor Drawdown, Bankers'
Acceptance Drawdown or L/C Drawdown from a Lender, in each case, in
accordance herewith;
"AGENT" means Bank of Montreal or such other Person as shall have been
appointed as a successor agent pursuant to Section 10.6;
"AGREEMENT" means this agreement, including all schedules and all
instruments supplementing or amending this Agreement, "HEREOF",
"HERETO" and "HEREUNDER" and similar expressions mean and refer to this
Agreement and not any particular article or section of this Agreement;
"APPLICABLE LAW" means, with respect to any Person, property,
transaction or event, and whether or not having the force of law, all
applicable laws, statutes, regulations, rules, guidelines, by-laws,
treaties, orders, policies, judgments, decrees and official directives
of Government Authorities or Persons acting under the authority of any
Government Authority including, for greater certainty, the proposals
for international convergence of capital measurement and capital
standards developed by the Bank for International Settlements subject
to the implementation measures to be adopted in Canada in respect
thereto as referred to in a bulletin of the Office of the
Superintendent of Financial Institutions Canada dated August 19, 1988;
"APPLICABLE SPREAD" means, at any time, the number of Basis Points, if
any, by which the number of incremental Basis Points, at such time,
applicable in respect of Bankers' Acceptances exceeds the number of
incremental Basis Points, at such time, applicable in respect of Prime
Rate Drawdowns;
"AUDITORS" means the present auditors of the Borrower or such other
national firm of chartered accountants who from time to time may become
the auditors of the Borrower;
"AVAILABLE FACILITY AMOUNT" means at any time U.S. $500,000,000 (as
reduced or cancelled from time to time in accordance herewith) less the
aggregate Outstanding Amount at such time;
"BANKERS' ACCEPTANCE" means a non-interest bearing depository ▇▇▇▇
subject to the Depository Bills and Notes Act or ▇▇▇▇ of exchange in
Canadian Dollars, having a term of not less than 10 nor more than 365
days and maturing on a Business Day, drawn by the Borrower and accepted
by the Lender as evidenced by the Lender's endorsement thereof at the
direction of the Borrower;
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"BANKERS' ACCEPTANCE DRAWDOWN" means a Drawdown in Canadian Dollars
effected by the sale or purchase of a Bankers' Acceptance pursuant to
the terms of this Agreement;
"BANKERS' ACCEPTANCE LOAN" means, at any time, the aggregate face
amount of all Bankers' Acceptances then outstanding as a result of all
Bankers' Acceptance Drawdowns;
"BANKERS' ACCEPTANCE PROCEEDS" means, in respect of each Bankers'
Acceptance Drawdown, funds in an amount which is equal to:
Face Amount
-----------------
1 + (Rate x Term)
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365
(where "Face Amount" is the principal amount of the Bankers' Acceptance
being purchased, "Rate" is the Reference BA Discount Rate divided by
100 and "Term" is the number of days in the term of the Bankers'
Acceptance), less the applicable stamping fees in respect thereof;
"BANKERS' ACCEPTANCE UNDERTAKING" means an agreement substantially in
the form set forth in Schedule D;
"BASE RATE" means, at any time, the rate of interest, expressed as an
annual rate on the basis of a year of 365 days, or 366 days in the case
of a leap year, established by the Agent from time to time as the
reference rate of interest it will charge for loans made in Canada in
U.S. Dollars to Canadian customers;
"BASE RATE DRAWDOWN" means a Drawdown in U.S. Dollars with respect to
which the Borrower has elected or is deemed to have elected to have
interest calculated by reference to the Base Rate or to which, in
accordance with the provisions of this Agreement, the Base Rate is
deemed or stated to apply;
"BASE RATE LOAN" means, at any time, the aggregate of the principal
amounts of all Base Rate Drawdowns then outstanding;
"BASIS POINT" OR "BP" means one one-hundredth (0.01) of one percent;
"BUSINESS DAY" means a day on which banks are open for business in
Calgary and Toronto which is not a Saturday or a Sunday and,
additionally, in respect of any Libor Drawdown or Libor Loan, a day on
which dealings in United States Dollar deposits are transacted in the
London eurodollar interbank market;
"CANADIAN DOLLARS" and the symbol "CDN. $" mean the lawful currency of
Canada;
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"CHANGE OF CONTROL" means the acquisition, directly or indirectly, of
more than 50% of the Voting Securities of the Borrower by any Person
(or group of Persons acting in concert with respect to the ownership or
voting of such Voting Securities);
"COMMITMENT" means, with respect to each Lender, such Lender's
obligation to make Advances hereunder pursuant to Section 2.1;
"COMMITMENT AMOUNT" has the meaning ascribed to it in Section 2.1;
"COMMODITY SWAP" means an agreement entered into between the Borrower
and a counterparty on a case by case basis, the purpose and effect of
which is to mitigate or eliminate the Borrower's exposure to
fluctuations in commodity prices;
"COMPLIANCE CERTIFICATE" means a certificate of the Borrower
substantially in the form set out in Schedule B and signed by a senior
officer (including the President, any Vice-President, the Treasurer or
any Assistant Treasurer) of the Borrower;
"CONFLICTED LENDER" means, with respect to any Potentially Hostile
Acquisition, a Lender that is the lead bank, lead agent or sole lender
to the Person who is the target of such Potentially Hostile
Acquisition;
"CONTROLLED" in respect of an entity, means that the Borrower has the
power to direct the management and operations of that entity;
"CONVERSION" means a conversion of a Drawdown pursuant to Section 2.11;
"CORRIDOR PROJECT" means the project for the commercial development of
gas reserves from the Corridor Block Production Sharing Contract area
of South Sumatra, Indonesia and associated lands;
"CORRIDOR SUPPORT AGREEMENT" means the Sponsor Support Agreement dated
February 26, 1997 between the Borrower and The Sumitomo Bank, Limited,
as agent for the lenders for the Corridor Project, a copy of which has
been provided by the Borrower to the Agent;
"CURRENCY SWAP" means a contract entered into between the Borrower and
a counterparty on a case by case basis in connection with forward rate,
currency swap or currency exchange and other similar currency related
transactions, the purpose and effect of which is to mitigate or
eliminate the Borrower's exposure to fluctuations in exchange rates;
"DATE OF CONFIRMATION" means, in the case of any extension of the Term
Out Date in accordance with Section 2.1, the earliest of: (i) the date
the Agent gives notice to the Borrower that each of the Revolving
Lenders has executed and delivered to the Agent the
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Extension Agreement; (ii) the date the Borrower (provided the Borrower
is entitled to do so) provides the notice to the Agent of its election
pursuant to paragraph 2.1(c)(i) or 2.1(c)(ii) to extend the Term Out
Date with respect to the Commitments of the Extending Lenders; and
(iii) the Term Out Date as the same was determined prior to the
Extension Request to which the Extension Agreement relates;
"DESIGNATED PROJECT GUARANTEES" means, collectively, all Financial
Guarantees in respect of the Corridor Project, including the Corridor
Support Agreement (and any other project of Gulf that the Borrower
requests, and the Majority Lenders agree, be included in this
paragraph) in respect of which any Person has or may have recourse to
any member of the Restricted Group;
"DRAWDOWN" means an Advance, a Conversion or a Rollover, as the context
requires;
"DRAWDOWN DATE" means the date proposed for a Drawdown requested by the
Borrower pursuant to the provisions of this Agreement;
"DRAWDOWN NOTICE" means a notice by the Borrower to the Agent in
respect of a Drawdown, given either in writing or by fax (in the case
of fax notice with prompt original written confirmation thereof
pursuant to the provisions of Section 2.4) substantially in the form
set forth in Schedule C;
"EBITDA" means with respect to any period, the earnings (loss) from
continuing operations in the ordinary course of business (which for
certainty shall not include gains or losses from sales of assets and
sales of securities and shall not include dividends and other earnings
distributed to the Restricted Group by Unrestricted Subsidiaries)
before income taxes of the Borrower and the Restricted Group
(determined on a consolidated basis for such entities in accordance
with GAAP) plus, to the extent deducted in the determination of the
foregoing, without duplication, the sum of: (i) interest expense, (ii)
depreciation and depletion expense, (iii) amortization expense, (iv)
expensed exploration (in accordance with the successful efforts method
of accounting), and (v) any other non-cash charges;
"EFFECTIVE DATE" means the date of this Agreement;
"ELIGIBLE LENDER" means, any of the Lenders and/or any other financial
institution(s) resident in Canada for purposes of the Income Tax Act
(Canada) and listed in Schedule I or Schedule II to the Bank Act
(Canada) acceptable to the Borrower and the Agent, each acting
reasonably;
"ELIGIBLE PARTNERSHIP" means a partnership formed pursuant to the laws
of the Province of Alberta, all the interests of which from and after
the transfer of assets hereinafter mentioned are owned by the Borrower
and Restricted Subsidiaries and to which all or substantially all of
the assets of the Borrower have been transferred in accordance with
Section 8.4;
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"ENVIRONMENTAL APPROVALS" means all applicable permits, licences,
authorizations, consents, directions or approvals required by
Government Authorities pursuant to the Environmental Laws with respect
to the operation of Gulf's business;
"ENVIRONMENTAL LAWS" means in respect of any jurisdiction, Canadian or
foreign, all laws, by-laws, rules, regulations, orders, codes and
judgments of any Government Authority relating to the protection of the
environment and public health and safety and, without restricting the
generality of the foregoing, includes without limitation those
Environmental Laws relating to the storage, transportation, treatment
and disposal of Hazardous Substances, product safety, and the emission,
discharge, release or threatened release of Hazardous Substances into
the air, surface water, ground water, land surface, subsurface strata
or any building or structure and, in each such case, as such
Environmental Laws may be amended or supplemented from time to time;
"EQUITY" means, in respect of any body corporate, the aggregate of: (i)
the share capital attributable to the issued shares, or any right to
acquire shares, outstanding on the date of determination, (excluding,
in the case of the Borrower, any share capital attributable to
securities, or any right to acquire securities, in each case, other
than Equity Shares); (ii) (without duplication) any surplus (whether
contributed or capital); (iii) any retained earnings (or deficit); and
(iv) any cumulative foreign currency translation adjustment; in each
case, of the body corporate and as determined in accordance with GAAP;
"EQUITY SHARES" means the ordinary shares and Preferred Shares of the
Borrower as constituted on the Effective Date and shares, issued after
the Effective Date, of any class or series of shares of the Borrower
provided that the rights, privileges, terms and conditions of or
attaching to such shares (whether as set forth in the constating
documents of the Borrower or in any agreement or understanding with the
Borrower, any Subsidiary or any Person not acting at arm's length with
the Borrower) do not entitle the holder thereof to redeem, retract or
otherwise have the shares repurchased or retired in whole or in part
other than by the issuance of securities that are, themselves, Equity
Shares as otherwise defined herein;
"EQUIVALENT AMOUNT" means, on any date, the amount of Canadian Dollars
or United States Dollars, as the case may be, which can be purchased
with the specified amount of United States Dollars or Canadian Dollars,
as the case may be, at the applicable Exchange Rate on that date;
"EVENT OF DEFAULT" means any of the events described in Section 9.1;
"EXCHANGE RATE" means, on any date, for any conversion of United States
Dollars into Canadian Dollars, or vice versa, the applicable spot
buying rate for Canadian Dollars or United States Dollars, as the case
may be, reported by the Bank of Canada as its daily official
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noon (Toronto time) rate of exchange on such date if it is a Business
Day or on the immediately preceding Business Day if such date is not a
Business Day;
"EXISTING LOAN FACILITY" means the facilities provided pursuant to the
loan agreement made as of July 18, 1997, between the Borrower, Bank of
Montreal, as agent, and the lenders named therein;
"EXTENDING LENDERS" has the meaning ascribed to it in Section 2.1;
"EXTENSION AGREEMENT" means an agreement substantially in the form set
forth in Schedule E;
"EXTENSION REQUEST" means a document substantially in the form set
forth in Schedule F, accompanied by an Extension Agreement duly
completed and executed by the Borrower;
"FACILITY" has the meaning ascribed to it in Section 2.1;
"FACILITY AMOUNT" means the aggregate of the Outstanding Amount and the
Available Facility Amount;
"FAIR MARKET VALUE" means the highest price available in an open and
unrestricted market between informed, prudent parties, acting at arm's
length and under no compulsion to act, expressed in terms of money or
money's worth;
"FINANCIAL GUARANTEE" means, without duplication, any Guarantee and any
undertaking to assume, guarantee, endorse, contingently agree to
purchase or to provide funds for the payment of, or otherwise become
liable in respect of, any indebtedness, liability or obligation of any
Person provided in connection with, or as a condition of, the
availability or provision of Funded Debt to any other Person (including
the Corridor Support Agreement, but excluding any Guarantee or
undertaking that: (A) would otherwise be a Financial Guarantee but in
respect of which recourse is limited to securities of an Unrestricted
Subsidiary; or (B) which is provided by a member of the Restricted
Group in respect of any indebtedness, liabilities or obligations of a
member of the Restricted Group); provided, at any particular time, that
the amount of each Financial Guarantee shall be deemed to be the amount
guaranteed thereby determined as at such time, unless the Financial
Guarantee is limited to a specified amount or to realization on
specified assets, in which case the amount of such Financial Guarantee
shall be deemed to be the lesser of (i) such specified amount or the
Fair Market Value of such specified assets, as the case may be, and
(ii) the amount guaranteed thereby;
"FINANCIAL STATEMENTS" means the financial statements of Gulf for the
fiscal year ended December 31, 1997, consisting of the balance sheet
and the statements of income, retained earnings and changes in
financial position and all notes to such financial statements as
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reported upon by Ernst & Young, together with the unaudited financial
statements of Gulf for the six months ended June 30, 1998;
"FISCAL QUARTER" means a three month period ending on the last day of
March, June, September or December in each year;
"FUNDED DEBT" means, without duplication, (i) the amount of any
indebtedness, liabilities and obligations in respect of monies
borrowed; (ii) the book value of any capital leases or other leases
classified as debt under GAAP or for Canadian income tax purposes;
(iii) amounts constituting any Prepaid Obligation; (iv) amounts owing
as deferred consideration for the acquisition of assets or receipt of
services or both unless the same are payable on normal trade terms in
less than six months from the date such assets are acquired or such
services are received and are not the subject of any renewal or
extension provisions or arrangements (together with any Funded Debt
thereof assumed or acquired therewith); and (v) any Guarantee in
respect of Funded Debt as hereinbefore defined, but for greater
certainty, shall, in respect of the Borrower, exclude the Preferred
Shares;
"GAAP" has the meaning ascribed to it in Section 1.3;
"GOVERNMENT AUTHORITIES" means any nation or government, any province,
state, city or other political subdivision and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including without limitation,
all applicable federal, provincial and municipal agencies, ministries,
departments, inspectors and officials;
"GUARANTEE" means any undertaking to assume, guarantee, endorse,
contingently agree to purchase or to provide funds for the payment of,
or otherwise become liable in respect of, any Funded Debt of any Person
(other than an undertaking that, at any particular time, would
otherwise constitute a Guarantee but in respect of which recourse is
limited to securities of an Unrestricted Subsidiary); provided that at
any particular time, the amount of each Guarantee shall be deemed to be
the amount of the Funded Debt guaranteed thereby determined as at such
time, unless the Guarantee is limited to a specified amount or to
realization on specified assets, in which case the amount of such
guarantee shall be deemed to be the lesser of (i) such specified amount
or the Fair Market Value of such specified assets, as the case may be,
and (ii) the amount of such Funded Debt;
"GULF" means the Borrower and all of its Subsidiaries;
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"HAZARDOUS SUBSTANCE" means any contaminant, pollutant or hazardous
substance that is likely to cause harm or degradation to the
environment or risk to human health or safety, and without restricting
the generality of the foregoing, includes without limitation, any
pollutant, contaminant, waste, hazardous waste, toxic substance or
dangerous good which is defined or identified in any Environmental Law
or industry standard, or which is present in the environment in such
quantity or state that it contravenes any Environmental Law;
"INTER-RESTRICTED GROUP FUNDED DEBT" means Funded Debt of one or more
members of the Restricted Group owed solely to one or more other
members of the Restricted Group in respect of which Funded Debt no
Person, other than a member of the Restricted Group, has or may have
recourse to the assets of the member of the Restricted Group who has
the Funded Debt;
"INTEREST PAYMENT DATE" means,
(i) with respect to a Prime Rate Drawdown and a Base Rate
Drawdown, the first Business Day of each calendar month; and
(ii) with respect to a Libor Drawdown, the last day of the
Libor Interest Period applicable thereto and also, if the
Libor Interest Period is longer than 93 days, the last day of
each 90 day period during such Libor Interest Period or, if
any such day is not a Business Day, the Business Day next
following;
"INTEREST SWAP" means a contract entered into between the Borrower and
a counterparty on a case by case basis, in connection with interest
rate swap transactions, interest rate options, cap transactions, floor
transactions, collar transactions and other similar interest rate
related transactions, including forward rate agreements, the purpose
and effect of which is to mitigate or eliminate the Borrower's exposure
to fluctuations in interest rates;
"LENDERS" means the Lenders listed in Schedule A hereof, as amended
from time to time in accordance herewith;
"LENDING OFFICE" with respect to any Lender, means the office of such
Lender specified as its "Lending Office" opposite its name on Schedule
A or such other office of such Lender in Canada as such Lender may from
time to time specify to the Borrower and the Agent;
"L/C DRAWDOWN" means a Drawdown by way of Letter of Credit;
"LETTER OF CREDIT" means an irrevocable letter of credit or letter of
guarantee, in each case, in Canadian Dollars or U.S. Dollars issued or
that may be issued from time to time by the Lenders at the request of
the Borrower;
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"LETTER OF CREDIT DOCUMENTATION" means the documentation substantially
in the form set forth in Schedule K;
"LETTERS OF CREDIT LOANS" means, at any time, the aggregate of the
maximum liability undertaken by the Lenders as a result of all L/C
Drawdowns then outstanding;
"LIABILITIES" means, without duplication, all obligations, contingent
and otherwise, which are classified as liabilities in accordance with
GAAP;
"LIBOR DRAWDOWN" means a Drawdown in U.S. Dollars with respect to which
the Borrower has elected to have interest calculated by reference to
the Libor Rate or to which, in accordance with the provisions of this
Agreement, the Libor Rate is stated to apply;
"LIBOR INTEREST PERIOD" means, for any Libor Drawdown, the period of 1,
2, 3, or 6 months, or such other period as may be agreed to by all
Lenders, as may be selected by the Borrower pursuant to the relevant
Drawdown Notice, commencing on the Drawdown Date of such Libor Loan,
provided that:
(i) if such Interest Period would otherwise end on a day which
is not a Business Day, such Libor Interest Period shall end on
the next following Business Day (unless such next following
Business Day is the first Business Day of a calendar month, in
which case such Libor Interest Period shall end on the
Business Day immediately preceding the day on which such Libor
Interest Period would otherwise end); and
(ii) Libor Interest Periods shall terminate on such dates as
will permit the repayment of the Facility on the dates and in
the manner provided for herein;
"LIBOR LOAN" means, at any time, the aggregate of the principal amounts
of all Libor Drawdowns then outstanding;
"LIBOR RATE" means, for the Libor Interest Period applicable to a Libor
Drawdown, the average interest rate per annum (expressed on the basis
of a 360 day year) for a period equal to the number of days in such
Libor Interest Period at which U.S. Dollar deposits are offered for
deposit in the London eurodollar interbank market at approximately
11:00 a.m. (London, England time) on the second Business Day preceding
the first day of such Libor Interest Period as published on the Reuters
Service Page LIBOR (or such other page as may, from time to time,
replace such page on that service for the purpose of displaying the
rates at which U.S. Dollar deposits are offered for deposit in the
London eurodollar interbank market) or, failing the availability of
such service, as published on page 3750 of the Telerate screen (or such
other page as may, from time to time, replace such page on that service
for the purpose of displaying the rates at which U.S. Dollar deposits
are offered for deposit in the London eurodollar interbank market);
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"LOANS" means, at any time, the aggregate of all Bankers' Acceptance
Loans, Prime Rate Loans, Base Rate Loans, Libor Loans and Letters of
Credit Loans then outstanding;
"MAJORITY LENDERS" means one or more Lenders who, in the aggregate,
have outstanding more than 66 2/3% of the principal amount of the Loans
or, if no such principal amount is then outstanding, Lenders who have
more than 66 2/3% of the Commitments and except in respect of the
matters requiring approval by all Lenders as set forth in Section 12.7,
any reference to Lenders in the context of a requirement for any
approval, consent or waiver shall be deemed to be a reference to
Majority Lenders;
"MATERIALLY ADVERSE" means any state of fact, change, event or
occurrence which would:
(i) materially adversely affect the Borrower's ability to
perform its obligations under, or the validity or
enforceability of, this Agreement; or
(ii) be materially adverse to the financial condition of the
Restricted Group;
"MATURITY DATE" means the date which is the fourth anniversary of the
Term Out Date;
"MINIMUM TANGIBLE NET WORTH" means Cdn. $1,700,000,000 plus 70% of
Gulf's net income (loss) determined in accordance with GAAP, for the
period commencing on June 30, 1998 and ending on the last day of the
most recently completed Fiscal Quarter on a cumulative basis, provided
that in no circumstance shall Minimum Tangible Net Worth be less than
Cdn. $1,700,000,000;
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc. and its successors;
"NET PROCEEDS" means all cash proceeds paid to the Borrower or any of
its Restricted Subsidiaries or any Unrestricted Subsidiary to the
extent distributed to the Restricted Group in respect of (i) the sale
of an asset after repayment of any debt secured by the asset or
required to be paid to complete such sale; (ii) the issuance of
securities; and (iii) the secondary distribution of securities, in each
case after deduction of reasonable legal and other fees, Taxes,
commissions, usual adjustments and other usual expenses, and such other
amounts as may be agreed to by the Majority Lenders;
"NON-MATERIAL RESTRICTED SUBSIDIARY" means a Restricted Subsidiary
having a gross asset value (as shown on the latest financial statements
of the Subsidiary) of less than Cdn. $1,000,000 and having no
indebtedness, liabilities or obligations in respect of which any Person
may have recourse to the Borrower or any other Restricted Subsidiary in
excess of Cdn. $1,000,000;
"NONEXTENDING LENDERS" has the meaning ascribed to it in Section 2.1;
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"NONREVOLVING LENDERS" means the Lenders whose Loans are in the Term
Period;
"NOTICE OF AMENDMENT OF UNRESTRICTED SUBSIDIARIES" means a notice
substantially in the form set forth in Schedule J;
"OUTSTANDING AMOUNT", with respect to any Loan or Loans outstanding
hereunder, means the aggregate amount of indebtedness of the Borrower
outstanding thereunder, excluding interest, fees and any other amounts
which have accrued but are not yet due in respect of such Loan(s);
"PARTIES" means the Borrower, the Lenders and the Agent and "PARTY"
refers to any one of them;
"PAYMENT OFFICE" means the office that is designated by the Agent to
the Borrower and Lenders from time to time as the office where payments
to be made to the Agent pursuant to this Agreement shall be made;
"PERMITTED DESIGNATED PROJECT GUARANTEE AMOUNT" means the amount equal
to:
(i) U.S. $150,000,000; and
(ii) the amount, if any, by which:
(A) 5% of the Equity of Gulf exceeds
(B) the aggregate amount of Financial Guarantees
excluding Designated Project Guarantees;
"PERMITTED ENCUMBRANCES" means:
(i) liens or privileges imposed by law such as carriers',
warehousemens', mechanics' and materialmens' liens and
privileges; or liens and privileges arising out of judgments
or awards in respect of which an appeal or proceedings for
review are being prosecuted in good faith and with respect to
which a stay of execution shall have been secured pending such
appeal or proceedings for review or security or other
appropriate protection of its properties and assets (excluding
such security) from seizure shall have been provided; or liens
for taxes, assessments or governmental charges or levies not
at the time due or delinquent or the validity of which is
being contested at the time in good faith in proceedings
before a court or other Government Authority and in each case,
in respect of which any appropriate reserves have been taken;
or liens in favour of operators and non-operators pursuant to
oil and gas operating agreements and oil and gas facility or
pipeline operating agreements and other similar operating
agreements; undetermined or inchoate liens, privileges and
18
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charges incidental to current operations which have not at
such time been filed pursuant to law or which relate to
obligations not due or delinquent; or the deposit of cash or
securities in connection with any lien or privilege
hereinbefore in this paragraph referred to;
(ii) minor encumbrances, including, without limitation,
easements, rights of way, servitudes or other similar rights
in land granted to or reserved by other Persons, rights of way
for sewers, electric lines, telegraph and telephone lines and
other similar purposes, or zoning or other restrictions as to
the use of real property, which encumbrances, easements,
servitudes, rights of way, other similar rights and
restrictions do not in the aggregate either materially detract
from the value of the property and assets of the Restricted
Group or materially impair its use, in each case, in the
operation of Gulf's business;
(iii) the right reserved to or vested in any municipality or
governmental or other public authority by the terms of any
lease, licence, franchise, grant or permit or by any statutory
provision, to terminate any such lease, licence, franchise,
grant or permit, or to require annual or other periodic
payments as a condition of the continuance thereof;
(iv) security given to a public utility or any municipality or
governmental or other public authority when required by such
utility or municipality or other authority in connection with
the operation of Gulf's business, all in the ordinary course
of its business;
(v) the reservations, limitations, provisos and conditions, if
any, expressed in any original grants from the Crown;
(vi) security up to a maximum of $50,000,000 given in respect
of any Interest Swaps, Currency Swaps or Commodity Swaps in
the ordinary course of its business provided that such
security is cash, marketable securities, a letter of credit
(in respect of which the liability is included in Total Senior
Debt) or a Financial Guarantee;
(vii) purchase money security interests as defined in the
Personal Property Security Act (Alberta) as such Act may be
amended from time to time, in the aggregate for such security
interests up to a maximum of 5% of the Equity of Gulf at the
date the security is created, incurred or assumed;
(viii) security created, incurred or assumed in the ordinary
course of business in the aggregate for such types of security
up to a maximum of 5% of the Equity of Gulf at the date the
security is created, incurred or assumed;
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(ix) security created, incurred or assumed in respect of
Funded Debt of the Restricted Group in the aggregate for such
types of security up to a maximum (excluding Inter-Restricted
Group Funded Debt) of 5% of the Equity of Gulf at the date the
security is created, incurred or assumed;
(x) security in respect of obligations of an Unrestricted
Subsidiary over shares of Unrestricted Subsidiaries held by
the Restricted Group;
(xi) security in respect of accounts receivable for sales
under the Receivables Purchase and Sale Agreement dated
November 29, 1994, as amended, among the Borrower, Corporate
Receivables Trust and Toronto Dominion Securities Inc., or any
replacement of such arrangement, provided that in no event
shall proceeds thereunder exceed Cdn. $125,000,000;
(xii) security in respect of Funded Debt of acquired entities
provided the same complies with subsection 8.3(b);
(xiii) security given by a Restricted Subsidiary that is a
Restricted Subsidiary pursuant to subsection 8.3(b) if such
security was given prior to the Restricted Subsidiary becoming
a Restricted Subsidiary pursuant to such paragraph;
(xiv) security given by a Restricted Subsidiary to the
Borrower or to a Restricted Subsidiary in respect of
Inter-Restricted Group Funded Debt; and
(xv) security granted by Crusader Limited (now Gulf Australia
Resources Limited) for the benefit of the holders of certain
notes issued by Crusader Limited creating a security interest
in shares of Triton Energy Corporation and property exchanged
for such shares, which notes are exchangeable for shares of
Triton Energy Corporation;
"PERSON" means any individual, sole proprietorship, partnership,
limited partnership, unincorporated association, unincorporated
syndicate, unincorporated organization, trust, body corporate, and a
natural person in his or her capacity as trustee, executor,
administrator or other legal representative or Government Authority;
"POTENTIALLY HOSTILE ACQUISITION" means the acquisition of more than
9.5% of the Voting Securities of, amalgamation or merger with, a Person
any of the securities of which are publicly traded unless the
acquisition, amalgamation or merger is approved by the board of
directors, board of trustees or other individuals in a similar capacity
of such Person;
"PREFERRED SHARES" means the Fixed/Adjustable Rate Senior Preference
Shares Series 1 and the Cumulative Redeemable Auction Perpetual Senior
Preference Shares, Series 2 of the Borrower as constituted on the
Effective Date;
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"PREPAID OBLIGATIONS" means "take-or-pay" or similar prepaid
Liabilities of a Person whereby such Person is obligated to settle, at
some future date more than 60 days from the date the obligation is
incurred, payment in respect of petroleum substances, whether by
deliveries (accelerated or otherwise) of petroleum substances, payment
of money or otherwise howsoever;
"PREVIOUS FOUR FISCAL QUARTERS" means, at the time of any
determination, the four consecutive completed Fiscal Quarters ending
on, or last preceding, the date of such determination;
"PRIME RATE" means, at any time, the greater of: (i) the floating
annual rate of interest publicly announced from time to time by the
Agent as its prime rate, being a reference rate in effect on the date
of such announcement, based on a year of 365, or 366 days in the case
of a leap year, for Canadian dollar loans to commercial customers in
Canada; and (ii) the Agent's Reference BA Discount Rate in respect of
bankers' acceptances having a term of 30 days plus the Applicable
Spread;
"PRIME RATE DRAWDOWN" means a loan in Canadian Dollars by the Lenders
to the Borrower with respect to which the Borrower has elected, or is
deemed to have elected, to have interest calculated by reference to the
Prime Rate or to which, in accordance with the provisions of this
Agreement, the Prime Rate is deemed or stated to apply;
"PRIME RATE LOAN" means, at any time, the aggregate of the principal
amounts of all Prime Rate Drawdowns then outstanding;
"REFERENCE BA DISCOUNT RATE" means, in respect of a Bankers' Acceptance
being accepted by a Lender on a Drawdown Date, (i) for a Lender that is
listed in Schedule I to the Bank Act (Canada), the average bankers'
acceptance rate as quoted on Reuters CDOR page (or such other page as
may, from time to time, replace such page on that service for the
purpose of displaying quotations for bankers' acceptances accepted by
leading Canadian financial institutions) at approximately 10:00 a.m.
(Toronto time) on such Drawdown Date for bankers' acceptances having a
comparable maturity date as the maturity date of such bankers'
acceptance (the "CDOR Rate"); or, if such rate is not available at or
about such time, the average of the bankers' acceptance rates
(expressed to five decimal places) as quoted to the Agent by the
Schedule I BA Reference Banks as of 10:00 a.m. (Toronto time) on such
Drawdown Date for bankers' acceptances having a comparable maturity
date as the maturity date of such Bankers' Acceptance ; and (ii) for a
Lender that is listed in Schedule II to the Bank Act (Canada), the rate
established by the Agent to be the lesser of (A) the CDOR Rate plus 10
Basis Points; and (B) the average of the bankers' acceptance rates
(expressed to five decimal places) as quoted to the Agent by the
Schedule II BA Reference Banks as of 10:00 a.m. (Toronto time) on such
Drawdown Date for bankers' acceptances having a comparable maturity
date as the maturity date of such Bankers' Acceptance;
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"REMEDIAL ORDER" means any control order, stop order or other
administrative complaint, direction, order or sanction issued, filed or
imposed by a Government Authority pursuant to the Environmental Laws
requiring any remediation or clean-up, or requiring that any on-going
activity be reduced, modified or eliminated, in each case as a result
of any release or threatened release of any Hazardous Substance into
the environment or any violation of Environmental Law;
"RESTRICTED GROUP" means, collectively, the Borrower and the Restricted
Subsidiaries;
"RESTRICTED SUBSIDIARIES" means all Subsidiaries that are not
Unrestricted Subsidiaries;
"REVOLVING LENDERS" means the Lenders the Loans of which are in the
Revolving Period;
"REVOLVING PERIOD" means, the period commencing on the Effective Date
and ending on the Term Out Date;
"ROLLOVER" means a rollover of a Drawdown pursuant to subsection
2.12(a);
"SCHEDULE I BA REFERENCE BANKS" means the Lenders listed in Schedule I
to the Bank Act (Canada) as are, at such time, designated by the Agent,
with the prior consent of the Borrower (acting reasonably), as the
Schedule I BA Reference Banks;
"SCHEDULE II BA REFERENCE BANKS" means the Lenders listed in Schedule
II to the Bank Act (Canada) as are, at such time, designated by the
Agent, with the prior consent of the Borrower (acting reasonably), as
the Schedule II BA Reference Banks;
"SENIOR DEBT" means all Funded Debt of the Borrower, on an
unconsolidated basis, ranking at least pari passu with the Loans and
includes, without limitation, the 9% Debentures due 1999, the 8.35%
Senior Notes due 2006, and the 8.25% Senior Notes due 2017;
"STANDARD & POOR'S" means Standard & Poor's Corporation and its
successors;
"SUBSIDIARY" means any body corporate in respect of which such Person
owns, directly or indirectly, more than 50% of the Voting Securities
(provided that such Person shall be deemed (for the purposes of
determining whether any body corporate is a Subsidiary) to own,
directly or indirectly, all of the Voting Securities of any Subsidiary
owned by any other Subsidiary if such Person, directly or indirectly
owns more than 50% of the Voting Securities of the second mentioned
Subsidiary), together with any other body corporate with which such
Person is consolidated in such Person's consolidated financial
statements;
"TANGIBLE NET WORTH" means the Equity of Gulf less the book value of
the intangible assets of Gulf determined in accordance with GAAP;
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"TAXES" means all domestic federal or provincial taxes, imposts, rates,
levies, assessments and governmental charges including, without
limitation, all income taxes, capital gains, sales, excise, use,
property, capital, payroll, GST, business, transfer and value added
taxes and all customs and import duties, together with all interest,
fines and penalties with respect thereto;
"TERM OUT DATE" means, in respect of each Lender, the 364th day
following the Effective Date or, in respect of each Extending Lender,
in the case of any extension of such date in accordance with Section
2.1, the 364th day (or such lesser period as may be set forth in the
Extension Agreement relating to such extension) following the Date of
Confirmation;
"TERM PERIOD" means the period from the Term Out Date to the Maturity
Date;
"TOTAL SENIOR DEBT" shall include, without duplication: (i) all Funded
Debt of the Restricted Group; and (ii) for greater certainty, the
aggregate amount of Designated Project Guarantees (other than those
subordinate to the Loans) in excess of the Permitted Designated Project
Guarantees Amount, but shall exclude: (iii) the aggregate amount of
Designated Project Guarantees up to but not exceeding the Permitted
Designated Project Guarantees Amount; (iv) any Inter-Restricted Group
Funded Debt; and (v) the principal amount of the Subordinated
Debentures of Gulf outstanding as at June 30, 1998 which was U.S.
$500,000,000 and any replacement subordinated debt;
"TRANSACTION PRICE" means, in respect of any acquisition, merger,
purchase or sale, the aggregate of:
(i) in the case of an acquisition, merger or purchase, the sum
of: (A) the aggregate Fair Market Value, as of the date of the
acquisition, merger or purchase, of the consideration paid or
delivered by Gulf, directly or indirectly, for the assets
acquired pursuant to such acquisition, merger or purchase; and
(B) the aggregate amount of all Liabilities assumed by Gulf,
directly or indirectly, in respect of the assets acquired
pursuant to such acquisition, merger or purchase; and
(ii) in the case of a sale, the sum of: (A) the aggregate Fair
Market Value, as of the date of the sale, of the consideration
paid or delivered to Gulf, directly or indirectly, for the
assets sold; and (B) the aggregate amount of all Liabilities
assumed by the purchaser of the assets from Gulf, directly or
indirectly, in respect of the assets sold;
"UNITED STATES DOLLARS", "U.S. DOLLARS" and the symbol "U.S. $" mean
the lawful currency of the United States of America;
"UNRESTRICTED SUBSIDIARIES" means all of the following Subsidiaries:
23
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(i) each body corporate of which the Restricted Group
beneficially owns, directly or indirectly, less than 100% of
the Voting Securities;
(ii) any other Subsidiary that has Funded Debt unless any one
or more of the following exceptions apply:
(A) such Funded Debt is non recourse to the Borrower,
any Restricted Subsidiary and such Subsidiary (other
than such representations, warranties and covenants
as are customary in non recourse financing not
pertaining to the payment of principal or interest);
(B) the Funded Debt is owed to a member of the
Restricted Group;
(C) the Senior Debt of the Borrower is assigned a
rating of at least BB+ by Standard and Poor's and Ba1
by Moody's and the Funded Debt of that Subsidiary
consolidated with the Funded Debt of its direct and
indirect wholly owned Subsidiaries (other than those
Subsidiaries designated as Unrestricted Subsidiaries
in accordance with subsection 8.3(d)) does not exceed
2.5 times the aggregate EBITDA of that Subsidiary
consolidated with the EBITDA of such direct and
indirect wholly owned Subsidiaries, and each such
Subsidiary shall also be a Restricted Subsidiary
(whether or not it individually meets the foregoing
test) unless the Borrower designates such Subsidiary
as an Unrestricted Subsidiary in accordance with
subsection 8.3(d);
(D) the Senior Debt of the Borrower is assigned a
rating of at least BBB- by Standard and Poor's and
Baa3 by Moody's and the Borrower is in compliance
with subsection 8.1(l);
(E) the Subsidiary has delivered to the Agent a
guarantee in form and substance acceptable to the
Agent, acting reasonably, pursuant to which such
Subsidiary guarantees all present and future
indebtedness and liabilities to the Lenders under
this Agreement together with an opinion in form and
substance acceptable to the Agent, acting reasonably,
including without limitation such matters as the
enforceability of such guarantee and the absence of
any conflict, breach or contravention with or of any
material agreement relating to Funded Debt, provided
however that the Agent, on behalf of the Lenders,
shall release and cancel such guarantee upon the
request of the Borrower if the Borrower subsequently
designates such Subsidiary as an Unrestricted
Subsidiary pursuant to subsection 8.3(d) or if such
Subsidiary is then qualified to be a Restricted
Subsidiary under another exception in this paragraph
(ii); or
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(F) the aggregate of the Funded Debt of all such
Subsidiaries qualifying as a Restricted Subsidiary
pursuant to this paragraph (F) (excluding
Subsidiaries that are otherwise qualified to be
Unrestricted Subsidiaries pursuant to this definition
or subsection 8.3(e)) does not exceed U.S.
$10,000,000;
(iii) any other Subsidiary designated by the Borrower as an
Unrestricted Subsidiary pursuant to subsection 8.3(d);
(iv) any Subsidiary (which does not otherwise qualify as an
Unrestricted Subsidiary pursuant to the foregoing paragraphs
or paragraph (v)) the designation of which as an Unrestricted
Subsidiary is requested by the Borrower and approved by the
Majority Lenders; and
(v) any Subsidiary of a Subsidiary that is an Unrestricted
Subsidiary,
but shall not include:
(vi) any Subsidiary that would otherwise qualify as an
Unrestricted Subsidiary pursuant to paragraph (ii) if the
Subsidiary has irrevocably deposited with a trustee as trust
funds money in the respective currency in which the Funded
Debt is payable in an amount sufficient to pay and discharge
the entire indebtedness, liabilities and obligations in
respect of such Funded Debt (including interest on amounts in
default, if any) for the purpose of, specifically pledged as
security for and dedicated solely to the retirement of all of
such Funded Debt;
(vii) any Subsidiary that would otherwise qualify as an
Unrestricted Subsidiary pursuant to paragraphs (i), (ii),
(iii) or (v), the designation of which as a Restricted
Subsidiary is requested by the Borrower and approved by the
Majority Lenders; and
(viii) any Unrestricted Subsidiary in respect of which the
Borrower exercises the option in accordance with subsection
8.3(b) to treat such Subsidiary as a Restricted Subsidiary;
and, as at the Effective Date, all of such Unrestricted Subsidiaries
are set forth in Schedule L;
"VOTING SECURITIES" means securities to which are attached votes that
may be cast to elect the directors, trustees or other individuals in a
similar capacity of the issuer either under all circumstances or under
some circumstances that have occurred and are continuing;
"YEAR 2000 FAILURE" means any failure by computer hardware, software,
middleware or any system used in the business or operations of the
Borrower and its Subsidiaries to function as effectively and reliably
in respect of dates or time periods after December 31, 1999,
25
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including the making of accurate leap year calculations, as in the case
of dates or time periods before January 1, 2000; and
"YEAR 2000 ISSUE" means any risk that computer hardware, software,
middleware or any system used in the business or operations of the
Borrower and its Subsidiaries, will not, in respect of dates or time
periods after December 31, 1999, function as effectively and reliably
as in the case of dates or time periods before January 1, 2000,
including the making of accurate leap year calculations.
I.2 Certain Rules of Interpretation - In this Agreement
(a) time is of the essence in the performance of the Parties'
respective obligations;
(b) the headings of Articles and Sections are inserted solely for
convenience of reference and are not intended as complete or accurate
descriptions of content;
(c) the use of words in the singular or plural, or with a particular
gender, shall not limit the scope or exclude the application of any
provision of this Agreement to such Person or Persons or circumstances
as the context otherwise permits;
(d) whenever a provision of this Agreement requires an approval or
consent by a Party to this Agreement and notification of such approval
or consent is not delivered within the applicable time limit, then,
unless otherwise specified, the Party whose consent or approval is
required shall be conclusively deemed to have withheld its consent or
approval;
(e) unless otherwise specified, time periods within or following which
any payment is to be made or act is to be done shall be calculated by
excluding the day on which the period commences and including the day
which ends the period and by extending the period to the next Business
Day following if the last day of the period is not a Business Day; and
(f) whenever any payment is to be made or action to be taken under this
Agreement is required to be made or taken on a day other than a
Business Day, such payment shall be made or action taken on the next
Business Day following.
I.3 Accounting Principles - Wherever in this Agreement reference is made to
generally accepted accounting principles ("GAAP"), such reference shall be
deemed to be to consistently applied generally accepted accounting principles in
effect in Canada, from time to time, provided that, for greater certainty, any
change thereto shall not be applied retroactively to any circumstance prior to
such change.
I.4 Cross-References - Unless otherwise specified, references in this Agreement
to any Article, Section, subsection, paragraph or Schedule are references to
such Article, Section, subsection, paragraph or Schedule of this Agreement and,
unless otherwise specified, references in
26
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any Article, Section, subsection, paragraph or Schedule to any clause are
references to such clause of such Article, Section, subsection, paragraph or
Schedule.
I.5 Ratings - A rating, whether public or private by Standard & Poor's or
Moody's shall be deemed to be in effect on the receipt by the Agent of an
announcement or publication by Standard & Poor's or Moody's, as the case may be,
of such rating or, in the absence of such announcement or publication, of a
written statement of the rating agency and will remain in effect until such date
as any change in such rating is deemed to be in effect.
I.6 - Currency - Unless otherwise denoted or the context otherwise requires, any
references to dollars, currency or $ herein are references to U.S. Dollars.
I.7 Schedules - The following are the Schedules to this Agreement and are
incorporated by reference and deemed to be part of this Agreement:
Schedule A - Schedule of Lenders
Schedule B - Compliance Certificate
Schedule C - Drawdown Notice
Schedule D - Bankers' Acceptance Undertaking
Schedule E - Extension Agreement
Schedule F - Extension Request
Schedule G - Bank Transfer Agreement
Schedule H - Borrower's Counsel's Opinion
Schedule I - Lenders' Counsel's Opinion
Schedule J - Notice of Amendment of Unrestricted Subsidiaries
Schedule K - Letter of Credit Documentation
Schedule L - List of Unrestricted Subsidiaries
ARTICLE II
THE FACILITY
II.1 The Facility
(a) Commitment - Upon the terms and subject to the conditions herein
set forth, the Lenders severally agree to establish in favour of the
Borrower a revolving/term credit facility of up to a maximum of U.S.
$500,000,000 (the "Facility") to be available to the Borrower in either
U.S. Dollars or the Equivalent Amount of Canadian Dollars, or any
combination thereof and otherwise in accordance with the provisions of
this Agreement from time to time on any Business Day during the
Revolving Period in an aggregate amount not to exceed at any time the
amount set forth opposite such Lender's name on Schedule A, as reduced
in accordance with this Agreement, (being such Lender's "Commitment
Amount"). Each
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Drawdown shall be, for each Revolving Lender, in an aggregate amount
not greater than such Revolving Lender's Commitment Amount less the
Loans owed to it and shall consist of Advances made by it, rateably
(subject to decrease in accordance with subsections 2.6(b) and 2.6(e)
increase in accordance with subsection 2.6(c) and modification in
accordance with Section 2.9) according to the proportion of the
aggregate of all Revolving Lender's Commitment Amounts constituted by
such Revolving Lender's Commitment Amount. Within the limits of each
Lender's Commitment and subject to Section 2.7, the Borrower may
borrow, repay and reborrow under this Section during the Revolving
Period. Prior to the Term Out Date, any prepayments or repayments made
by the Borrower in respect of Loans in the Revolving Period shall not
reduce the Revolving Lender's Commitment Amounts.
(b) Extension - Not more than 180 nor less than 60 days before the Term
Out Date, the Borrower may, by delivery to the Agent of an Extension
Request, request that the Revolving Lenders extend the Term Out Date
with respect to the Commitment of such Lenders as the same was
determined prior to giving effect to such Extension Request. Upon
receipt of such Extension Request, the Agent shall distribute such
Extension Request to each Revolving Lender. If the Agent receives
confirmation from each of the Revolving Lenders of their execution of
the Extension Agreement to which such Extension Request relates within
30 days of receipt by such Lenders of the aforesaid Extension Request
from the Agent, the Term Out Date with respect to the Commitments of
such Revolving Lenders shall be extended for a number of days (not
exceeding 364 days) as set forth in the Extension Agreement, from the
date the Agent gives notice to the Borrower that each Revolving Lender
has executed and delivered to the Agent the Extension Agreement.
Anything herein contained to the contrary notwithstanding, (i) no
Lender shall have any obligation to extend the Term Out Date hereunder
and its decision to extend the Term Out Date shall be in its absolute
discretion, and (ii) if the Agent does not receive confirmations from
the Revolving Lenders of their execution of the Extension Agreement
within the 30 days provided above, such fact shall not preclude the
extension of the Term Out Date, provided such confirmations are
received before the Borrower makes an election pursuant to subsection
2.1(c).
(c) Extension Options - If one or more Revolving Lenders do not confirm
their execution of the Extension Agreement to which such Extension
Request relates within the aforesaid 30 days (such Revolving Lenders
being hereinafter referred to as "Nonextending Lenders"), the Borrower
shall be entitled to:
(i) extend the Term Out Date with respect to the Commitments
of the Revolving Lenders who have so confirmed their execution
of the Extension Agreement (such Revolving Lenders being
hereinafter referred to as the "Extending Lenders") for a
number of days (not exceeding 364 days) as set forth in the
Extension Agreement from the date the Borrower notifies the
Agent of the Borrower's exercise of this entitlement and to
terminate the Commitment(s) of the Nonextending Lender(s)
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unutilized as of the Term Out Date as the same was determined
prior to giving effect to such Extension Request; or
(ii) extend the Term Out Date with respect to the Commitments
of the Extending Lenders for a number of days (not exceeding
364 days) as set forth in the Extension Agreement from the
date the Borrower notifies the Agent of the Borrower's
exercise of this entitlement; prior to the fifth Business Day
preceding the Term Out Date as the same was determined prior
to giving effect to such Extension Request, replace one or
more of the Nonextending Lenders with one or more Eligible
Lenders (in respect of whom, the Term Out Date shall be the
same date as the Term Out Date with respect to the Commitments
of the Extending Lenders); and terminate the Commitment(s) of
the Nonextending Lender(s), to the extent not so replaced,
unutilized as of the Term Out Date as the same was determined
prior to the Extension Request; or
(iii) elect to revoke such Extension Request;
provided that: (i) if the Borrower does not notify the Agent of its
election hereunder prior to the fifth Business Day preceding the Term
Out Date as the same was determined prior to giving effect to such
Extension Request with respect to the Commitments of such Revolving
Lenders, the Borrower shall be deemed to have elected to revoke such
Extension Request; and (ii) if the Commitments of the Nonextending
Lenders constitute 25% or more of the Facility, all of the unutilized
Commitments of all Revolving Lenders shall be terminated on the Term
Out Date as the same was determined prior to giving effect to such
Extension Request and the Term Out Date shall not be extended.
(d) Cancellation of Unutilized Commitments - If the Borrower elects or
is deemed to have elected to revoke the Extension Request, the
unutilized portion of the Commitments of Nonextending Lenders and of
all Revolving Lenders shall terminate on the Term Out Date.
II.2 Purpose - The Facility shall be available to the Borrower for its general
corporate purposes. Advances shall be used by the Borrower (i) for the repayment
in full of the Existing Acquisition Facility and (ii) thereafter for lawful
general corporate purposes of the Borrower and its Subsidiaries including,
without limitation, the financing of oil and gas acquisitions and exploration
and development activities.
II.3 Availment of Facility
Upon the terms and subject to the conditions herein set forth,
the Borrower may borrow under the Facility by way of:
(i) Prime Rate Drawdowns;
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(ii) Base Rate Drawdowns;
(iii) Libor Drawdowns;
(iv) Bankers' Acceptance Drawdowns; and
(v) L/C Drawdowns;
or any combination or combinations of the foregoing at the discretion of the
Borrower.
II.4 Drawdown Notices
A Drawdown Notice shall be substantially in the form set forth
in Schedule C and shall state the type of Drawdown being requested, the proposed
Drawdown Date, together with any other information required by such Schedule or
this Section 2.4.
If a Drawdown Notice is given by fax, the Borrower shall send
to the Agent written confirmation bearing an original signature of an authorized
signatory of the Borrower of such notice within two Business Days of the giving
of such notice. Any notice on which the Agent has acted, whether made by fax or
otherwise in writing shall be irrevocable and binding on the Borrower.
The following notice periods shall apply to each type of
Drawdown:
(a) Prime Rate Drawdowns and Base Rate Drawdowns - Subject to the terms
and conditions of this Agreement, the Borrower shall be entitled to
Prime Rate Drawdowns or Base Rate Drawdowns by giving a Drawdown Notice
to the Agent by 10:00 a.m. (Calgary time) on no less than the number of
Business Days prior to the proposed Drawdown Date set forth below:
Amount of Drawdown (U.S.) Number of Business Days
------------------------- -----------------------
$0 - $10,000,000 one
$10,000,001 - $50,000,000 two
Greater than $50,000,000 three
where the Amount of Drawdown shall be based upon the currency of the
Advance proposed in the Drawdown Notice (or, where a Prime Rate
Drawdown is requested, on the Equivalent Amount in U.S. Dollars) and
more than one Drawdown Notice in respect of the same Drawdown Date
shall for the purposes of this subsection be considered one Drawdown
Notice.
(b) Libor Drawdowns - Subject to the terms and conditions of this
Agreement, the Borrower shall be entitled to Libor Drawdowns under the
Facility by delivering a Drawdown
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-25-
Notice to the Agent by 10:00 a.m. (Calgary time) no less than three
Business Days prior to the proposed Drawdown Date, which notice shall
also specify the principal amount of the Drawdown and the Libor
Interest Period selected in respect of such Drawdown;
(c) Bankers' Acceptance Drawdowns - Subject to the terms and conditions
of this Agreement, the Borrower shall be entitled to Bankers'
Acceptance Drawdowns under the Facility, by delivering a Drawdown
Notice to the Agent, by 10:00 a.m. (Calgary time) no less than one
Business Day prior to the proposed Drawdown Date, which notice shall
also specify the term and the aggregate face amount of the Bankers'
Acceptances to be accepted by the Lenders; and
(d) L/C Drawdowns - Subject to the terms and conditions of this
Agreement, the Borrower shall be entitled to require the Lenders to
issue Letters of Credit under the Facility by delivering a Drawdown
Notice to the Agent with respect to the Letters of Credit being
requested, by 10:00 a.m. (Calgary time) no less than five Business Days
prior to the proposed Drawdown Date;
provided that if the Drawdown is an Advance to be used in whole or in part for
any Potentially Hostile Acquisition, the Borrower shall deliver the Drawdown
Notice relating to such Drawdown an additional two Business Days prior to the
proposed Drawdown Date and the Drawdown Notice shall provide the name of the
entity subject to the Potentially Hostile Acquisition. If the Borrower intends
to use the Facility, in whole or in part, for any Potentially Hostile
Acquisition in respect of which the Transaction Price may be in excess of U.S.
$50,000,000, the Borrower shall provide written notice of its intention to so
use the Facility to the Agent within one Business Day after its public
announcement of the Potentially Hostile Acquisition and the Agent shall
forthwith and, in any event, within one Business Day of receipt of such notice
from the Borrower provide such notice to the Lenders. Each Drawdown Notice shall
be irrevocable and binding on the Borrower.
II.5 Notice of Drawdown to Lenders - Promptly upon receipt of any Drawdown
Notice or upon a drawing under any Letter of Credit, the Agent shall notify each
Lender by facsimile of the proposed Drawdown or the drawing, as applicable, of
such Lender's proportionate share thereof and of the other matters covered by
the Drawdown Notice. In the case of a proposed Bankers' Acceptance Drawdown, the
Agent shall also, on the Drawdown Date, notify each Lender and the Borrower of
the applicable Reference BA Discount Rate. In the case of a proposed Drawdown by
way of L/C Drawdown, the Agent shall also notify each Lender of the other
relevant particulars of the Drawdown. Any such notice in respect of a drawing
under a Letter of Credit shall be deemed to be a request for a Prime Rate
Drawdown if the Letter of Credit is denominated in Canadian Dollars or a Base
Rate Drawdown if the Letter of Credit is denominated in U.S. Dollars, in the
amount of such drawing with a Drawdown Date on the next Business Day.
II.6 Funding
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(a) Each Lender shall, before 11:00 a.m. (Calgary time) on the Drawdown
Date (other than in respect of Bankers' Acceptance Drawdowns which are
addressed in subsection 2.6(d)) or the date a drawing by a beneficiary
is to be made under a Letter of Credit, make available (for the account
of such Lender's Lending Office) to the Agent at its Payment Office, in
same day funds, such Lender's rateable portion (subject to subsection
2.6(e)) of any such Drawdown (other than an L/C Drawdown) or of such
drawing under a Letter of Credit, as the case may be. In the case of a
Drawdown (other than an L/C Drawdown), upon fulfilment of the
applicable conditions precedent set forth in Article VI, the Agent will
make such funds available to the Borrower at the Payment Office.
Subject to subsections 2.6(e) and (f) in the case of an L/C Drawdown,
upon fulfilment of the applicable conditions precedent set forth in
Article VI, each Lender shall issue a Letter of Credit in the amount of
such Lender's rateable portion of the amount of the L/C Drawdown based
upon such Lender's Commitment and deliver the same to the Borrower at
the Payment Office or at such other office of the Agent as the Borrower
may reasonably request, and upon such issuance, each Lender shall be
deemed to have made an Advance to the Borrower in such amount. In the
case of a drawing by a beneficiary under a Letter of Credit, the Agent
shall pay such funds to the beneficiary thereof and the Borrower shall
be deemed to have converted such portion of the Advance which was
deemed to occur on the issuance of the Letter of Credit into a Prime
Rate Drawdown if the Letter of Credit is denominated in Canadian
Dollars or a Base Rate Drawdown if the Letter of Credit is denominated
in U.S. Dollars, in the amount of such payment on the date of such
payment by the Agent.
(b) At the option of the Borrower to be exercised by delivery of notice
to that effect to the Agent at least five Business Days prior to the
date of any proposed L/C Drawdown, the Borrower may obtain from up to
five Lenders (which shall include the Agent as Lender) designated by
the Borrower in such notice a quotation of the fees which such Lender
would charge to act as issuer of the relevant Letter of Credit to be
issued in connection with the L/C Drawdown. Upon the giving of such
notice to such designated Lenders, any such Lender (including the Agent
as Lender) may provide such a quotation to the Borrower not less than
three Business Days prior to the date of the proposed L/C Drawdown. The
Borrower shall accept the tender which is the lowest quotation tendered
unless there are no quotations tendered that are less than 0.125% per
annum, or there are quotations tendered that are equal to but no
quotations less than 0.125% per annum, in which cases the Agent shall
be deemed to have tendered a quotation of 0.125% per annum and the
Agent shall be chosen to issue the relevant Letter of Credit on behalf
of all Lenders (and for so doing, as set out below, shall be entitled
to such fee of 0.125%). Forthwith following the tendering of the
quotations, the Borrower shall notify the Agent of the identity of the
issuing Lender and the face amount of the Letter of Credit to be
issued. The Lender whose tender was so selected, shall, upon the
request of the Borrower, issue the relevant Letter of Credit on behalf
of all Lenders as provided in subsection 2.6(c) below, and shall be
entitled to retain the full amount of the fee quoted or deemed to have
been quoted by it. All fees under this paragraph shall be based on the
face amount of the relevant Letter of Credit and payable quarterly in
arrears in the same manner as described in Section 4.5.
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-27-
(c) In the event that pursuant to subsection 2.6(b), the Agent or
any other Lender acts as issuer of a Letter of Credit, the provisions
of this Agreement with respect to L/C Drawdowns and drawings under a
Letter of Credit shall apply mutatis mutandis and, without limiting the
generality of the foregoing, upon issuance of the relevant Letter of
Credit, each Lender shall be deemed to have made available the relevant
L/C Drawdown and shall be liable to, and hereby indemnifies, the
issuing Lender in respect of such Letter of Credit to the extent of
such Lender's ratable portion of the face amount of such Letter of
Credit, based on such Lender's Commitment. The Borrower shall provide
to the issuing Lender of such Letter of Credit such documentation (not
inconsistent with the provisions of Schedule K) as such issuing Lender
may reasonably require in connection with such Letter of Credit and the
Agent, acting reasonably, shall be entitled to determine any procedures
to be followed in connection with the issuance of such Letter of Credit
and any drawings thereunder.
(d) Each Lender shall, before 11:00 a.m. (Calgary time) on the
Drawdown Date in the case of a Bankers' Acceptance Drawdown, make
available the Bankers' Acceptance Proceeds in respect of such Bankers'
Acceptances. After the Agent's receipt of such funds and upon
fulfilment of the applicable conditions precedent set forth in Article
VI, the Agent will make such funds available to the Borrower at the
Payment Office.
(e) Notwithstanding subsection (a) and anything else to the contrary
set forth herein, a Revolving Lender shall not be required to make
available any portion of any Drawdown that will be used directly and
indirectly in, or result, directly or indirectly, in a Potentially
Hostile Acquisition, if the Revolving Lender is a Conflicted Lender
provided that a Lender will be deemed not to be a Conflicted Lender in
respect of any Drawdown unless the Lender gives notice to the Agent of
the Lender's status as a Conflicted Lender within one Business Day of
the notice to the Lender by the Agent of such Drawdown, provided
further that a Conflicted Lender that does not make available a
Drawdown that will be used directly or indirectly in, or result,
directly or indirectly, in a Potentially Hostile Acquisition shall
(notwithstanding any other provision of this Agreement) not be entitled
to vote in respect of any determination required by Majority Lenders in
connection with such Drawdown and the principal amount of the Loans or
the amount of the Commitment of such Conflicted Lender shall be
excluded in the determination of the Majority Lenders in such
connection. In respect of any Subsequent Drawdown(s) in respect of
which a previously Conflicted Lender is not a Conflicted Lender, the
portion of such Drawdown(s) to be made available by such Conflicted
Lender shall be allocated by the Agent so as to result, to the extent
possible, in the outstanding Loans of the Revolving Lenders, including
such Conflicted Lender, being in the same proportion as the aggregate
of all Revolving Lenders' Commitments constituted by such Revolving
Lender's Commitment.
(f) If the Agent receives notice from a Conflicted Lender prior to
the date of any Drawdown that such Lender's rateable portion of such
Drawdown will not be made available in reliance upon subsection 2.6(e),
the portion of the Drawdown to be provided by each other
33
-28-
Revolving Lender shall be increased so as to equal the proportion of
the aggregate of all Revolving Lender's Commitments, excluding the
Commitment of the Conflicted Lender, constituted by such other
Revolving Lender's Commitment provided that, after giving effect to the
Drawdown, such Revolving Lender's Outstanding Amount does not exceed
such Revolving Lender's Commitment Amount.
II.7 Funding Reliance; Lender's Failure to Fund - Unless the Agent shall have
received notice from a Lender prior to any Drawdown Date that such Lender's
rateable portion of such Drawdown will not be made available as provided for in
subsection 2.6(e), the Agent may assume that each Lender will make available to
the Agent its ratable portion of any Drawdown requested in a Drawdown Notice on
the date of such Drawdown in accordance (other than an L/C Drawdown) with
Section 2.6 and the Agent may, in reliance upon such assumption, but shall not
be obligated to, make available to the Borrower on such date a corresponding
amount. If and to the extent any such Lender shall not have so made such
rateable portion available to the Agent and the Agent shall have so made such
corresponding amount available to the Borrower, such Lender and the Borrower
severally agree to pay or repay to the Agent (on the next Business Day following
notice thereof by the Agent to the Borrower) such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the Borrower until the date such amount is repaid to the Agent, at (i) in the
case of the Borrower, the interest rate applicable at the time to Drawdowns
hereunder and (ii) in the case of such Lender, the Prime Rate and, on demand, to
indemnify the Agent against any cost or loss it may suffer or incur in
connection with or related to the Agent having made such amount available to the
Borrower prior to having received the corresponding amount. If such Lender shall
pay to the Agent such corresponding amount, such amount so paid shall constitute
such Lender's Advance as part of such Drawdown for purposes of this Agreement.
II.8 Several Funding Obligations - The failure of any Lender to make an
Advance to be made by it as part of any Drawdown shall not relieve any other
Lender of its obligation, if any, hereunder to make its Advance on the Drawdown
Date, but no Lender shall be responsible for the failure of any other Lender to
make the Advance to be made by such other Lender on the Drawdown Date.
II.9 Pro-Rata Treatment of Drawdowns
(a) Each Drawdown shall be made available by each Lender and all
repayments and reductions in respect thereof shall be made and applied
in a manner so that the Drawdowns outstanding hereunder to each Lender
will, to the extent possible, thereafter be pro rata to the respective
Commitments of the Lenders. Subject to subsections 2.6(e) and (f), the
Agent is authorized by the Borrower and each Lender to determine, in
its sole and unfettered discretion, the portion of each Drawdown and
each type of Drawdown to be made available by each Lender and the
application of repayments and reductions of Loans to give effect to the
provisions of this Section provided that, no Lender shall, as a result
of any such determination, have Loans outstanding in an amount which is
in excess of the amount of its Commitment.
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-29-
(b) In the event it is not practicable to allocate Bankers'
Acceptances to each Lender such that the aggregate amount of Bankers'
Acceptances required to be purchased by such Lender hereunder is in a
whole multiple of Cdn. $100,000, the Agent is authorized by the
Borrower and each Lender to make such allocation as the Agent
determines in its sole and unfettered discretion may be equitable in
the circumstances and, if the aggregate amount of such Bankers'
Acceptances is not a whole multiple of Cdn. $100,000, then the Agent
may allocate (on a basis considered by it to be equitable) the excess
of such Drawdown over the next lowest whole multiple of Cdn. $100,000
to one Lender, which shall purchase a Bankers' Acceptance with a face
amount equal to the excess and having the same term as the
corresponding Bankers' Acceptances. In no event shall the portion of
the outstanding Loans of a Lender exceed the proportion of the
aggregate of all Lender's Commitments constituted by such Lenders'
Commitment by more than Cdn. $100,000 as a result of such exercise of
discretion by the Agent.
II.10 Restrictions on Drawdowns - Each Drawdown under the Facility shall be
subject to the following restrictions, as applicable:
(a) all Drawdowns shall be made on a Business Day;
(b) after giving effect to a Drawdown, the Outstanding Amount
shall not exceed the aggregate of the Commitment Amounts;
(c) no Drawdowns will be permitted if an Event of Default has
occurred and is continuing or (other than in the case of a Conversion
or Rollover, provided that, in the case of a Conversion or Rollover
into a Bankers' Acceptance Drawdown or Libor Drawdown, the maturity
date or the applicable Libor Interest Period shall not extend beyond
the earliest date upon which the event would constitute an Event of
Default) if an event has occurred and is continuing which with the
giving of notice, the passing of time, or both, would constitute an
Event of Default;
(d) Drawdowns shall be in Canadian Dollars or United States Dollars
as stipulated and at such time stipulated in the Drawdown Notice duly
provided by the Borrower to the Agent in respect thereof, subject to
the restrictions and limitations of this Agreement and upon fulfilment
of all conditions precedent to such Drawdown;
(e) each Drawdown by way of a Bankers' Acceptance Drawdown shall be
in a minimum principal amount of Cdn. $10,000,000 and additional
increments of integral multiples of Cdn. $1,000,000;
(f) each Drawdown by way of a Libor Drawdown shall be in a minimum
principal amount of U.S. $10,000,000 and additional increments of
integral multiples of U.S. $1,000,000;
35
-30-
(g) each Letter of Credit shall be in a minimum amount of Cdn.
$5,000,000 or U.S. $5,000,000, as the case may be;
(h) no Libor Drawdown, Bankers' Acceptance or Letter of Credit
issued pursuant to an L/C Drawdown shall have a maturity or expiry date
later than the Maturity Date or that is inconsistent with any other
obligation to repay the whole or any part of the principal amount of
Loans under this Agreement;
(i) the obligation of any Lender to make any Libor Drawdown for any
period exceeding 6 months (including the Conversion of any other
Drawdown into a Libor Drawdown) is contingent upon its favourable
determination that sufficient U.S. Dollars are available to it to fund
such Libor Drawdown for such period;
(j) the amount of Letters of Credit Loans at any time shall not
exceed U.S. $100,000,000; and
(k) no Letter of Credit shall have an expiry date of more than one
year from the date of issuance of such Letter of Credit.
II.11 Conversion Option - Subject to the provisions of this Agreement, the
Borrower may, by giving to the Agent a Drawdown Notice in accordance with
Section 2.4:
(a) convert all or any portion of a Prime Rate Drawdown into a Base
Rate Drawdown, Libor Drawdown or Bankers' Acceptance Drawdown;
(b) convert all or any portion of a Base Rate Drawdown into a Prime
Rate Drawdown, Libor Drawdown or Bankers' Acceptance Drawdown;
(c) on the last day of the Libor Interest Period, convert all or
any portion of such Libor Drawdown into a Prime Rate Drawdown, Base
Rate Drawdown or Bankers' Acceptance Drawdown; or
(d) on the maturity date of a Bankers' Acceptance Drawdown, convert
all or any portion of such Bankers' Acceptance Drawdown into a Prime
Rate Drawdown, Base Rate Drawdown or Libor Drawdown.
In respect of any Conversion which effects a change in the currency of
such Drawdown from Canadian Dollars to U.S. Dollars, or vice versa, repayment
shall be made in the currency of the Drawdown being converted and the Conversion
shall be made at the Exchange Rate on the date of such Conversion provided that
for the purposes of determining compliance with subsection 2.10(b) in respect of
any Conversion which effects a change in the currency of such Drawdown from
36
-31-
Canadian Dollars to U.S. Dollars or vice versa, the Equivalent Amount of
Canadian Dollars shall be determined as of the date of the Drawdown Notice.
In the case of a Conversion of a Prime Rate Drawdown, Base Rate
Drawdown or Libor Drawdown into a Bankers' Acceptance Drawdown, the Bankers'
Acceptance Proceeds shall be retained by the Agent to be applied to the
principal amount of the converted Drawdown and the Borrower shall pay to the
Agent on the date of such Conversion an amount equal to the difference between
the principal amount at maturity of the Bankers' Acceptance and the Bankers'
Acceptance Proceeds therefrom.
II.12 Rollovers
(a) The Borrower may roll over any Libor Drawdown (on the last day
of the applicable Libor Interest Period) into another Libor Drawdown or
Bankers' Acceptance Drawdown (on the maturity of the applicable
Bankers' Acceptance) into another Bankers' Acceptance Drawdown, by
giving the Agent the appropriate Drawdown Notice pursuant to Section
2.4.
(b) The Bankers' Acceptance Proceeds of the new Bankers' Acceptance
shall be retained by the Agent to be applied by it to the principal
amount of the maturing Bankers' Acceptance and the Borrower shall pay
to the Agent, on the maturity date of the maturing Bankers' Acceptance
an amount equal to the difference between the principal amount at
maturity of the maturing Bankers' Acceptance and the Bankers'
Acceptance Proceeds of the replacement Bankers' Acceptance.
(c) Notwithstanding any other provision of this Agreement, if the
Borrower fails to deliver such a Drawdown Notice to the Agent in
respect of a Libor Drawdown (or pay to the Agent an amount equal to
such Libor Drawdown on or before the expiration of such Libor Interest
Period as applicable) or in any case, during the continuance of an
Event of Default, then the relevant amount of the Libor Drawdown shall,
at the expiration of such Libor Interest Period, be deemed to be
converted into a Base Rate Drawdown, in an amount equal to the
principal amount of such Libor Drawdown.
(d) Notwithstanding any other provision of this Agreement, if the
Borrower fails to deliver such a Drawdown Notice to the Agent in
respect of a Bankers' Acceptance Drawdown (or pay to the Agent an
amount equal to the principal amount of the maturing Bankers'
Acceptance on or before the maturity date thereof), then the maturing
Bankers' Acceptance paid by the Agent shall be deemed, upon such
payment, to be converted into a Prime Rate Drawdown in an amount equal
to the face amount of such maturing Bankers' Acceptance.
II.13 Evidence of Indebtedness - The Agent shall open and maintain on its
books at the Payment Office, accounts in respect of the Facility to evidence the
Loans under the Facility and all other amounts owing by the Borrower to the
Lenders or the Agent hereunder. The Agent shall enter
37
-32-
in the foregoing accounts details of all amounts from time to time owing, paid
or repaid by the Borrower hereunder. The information entered in the foregoing
accounts shall constitute prima facie evidence of the obligations of the
Borrower to the Lenders and the Agent hereunder with respect to the Loans and
all other amounts owing by the Borrower to the Lenders or the Agent hereunder.
The Borrower shall, on reasonable notice to the Agent, be entitled to obtain
from the Agent extracts of all entries made in such accounts.
II.14 Netting - On any transaction date, the Agent shall be entitled to net
amounts payable on such date by the Agent to a Lender against amounts payable on
such date by such Lender to the Agent, in connection with transactions conducted
under this Agreement in the same type of Advance, for the account of the
Borrower. Similarly, on any transaction date, the Borrower hereby authorizes
each Lender to net amounts payable on such date by such Lender to the Agent, for
the account of the Borrower, against amounts payable on such date by the
Borrower to such Lender under this Agreement in accordance with the Agent's
calculations.
ARTICLE III
FURTHER PROVISIONS RELATING TO
LIBOR DRAWDOWNS, BANKERS'
ACCEPTANCES AND LETTERS OF CREDIT
III-1 Effects of Change of Law - If, at any time, a Lender determines in good
faith, which determination shall be final, conclusive and binding upon the
Borrower, absent manifest error, that: (a) by reason of circumstances affecting
financial markets inside or outside the United States, deposits of U.S. Dollars
are unavailable to such Lender in London; (b) adequate and fair means do not
exist for ascertaining the applicable interest rate on the basis provided in the
definition of Libor Rate; (c) the making or continuation of any Libor Drawdown
has been made impracticable: (i) by the occurrence of a contingency which
materially and adversely affects the funding, in the London interbank market
generally, of Libor Loans at any interest rate computed on the basis of the
Libor Rate; or (ii) by reason of a change since the date of this Agreement in
any Applicable Law by any Government Authorities charged with the administration
thereof affecting such Lender or any relevant financial market, the Libor Rate
shall no longer represent the effective cost to such Lender of deposits to fund
Libor Drawdowns; or (d) any change to present Law or the enactment of any future
Law or any change therein or in the interpretation or application thereof by any
Government Authorities charged with the administration thereof or by any court,
has made it unlawful for such Lender to make or maintain or to give effect to
its obligations in respect of Libor Drawdowns as contemplated hereby, then:
(a) the right of the Borrower to request Libor Drawdowns from such
Lender shall be suspended until such Lender determines that the
circumstances causing such suspension no longer exist;
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-33-
(b) if any affected Libor Drawdown from such Lender is not yet
outstanding, any applicable outstanding Advance Notice shall be deemed
to be an Advance Notice for a Base Rate Advance in the same amount;
(c) if any Libor Drawdown from such Lender is outstanding at any
time when the right of the Borrower to request Libor Drawdowns from
such Lender is suspended, it and all other Libor Drawdowns from such
Lender shall become, on the last day of the then current Libor Interest
Period applicable thereto (or on such earlier date as may be required
to comply with any Applicable Law), a Base Rate Drawdown and shall
remain outstanding as a Base Rate Drawdown, until such time as such
Lender determines that the circumstances causing such suspension no
longer exist; and
(d) upon a determination by such Lender that the circumstances
causing the suspension of Libor Loans no longer exist, each Base Rate
Drawdown outstanding as a result of subsection 3.1(c) may be converted,
subject to availability, by the Borrower in accordance herewith to a
Libor Drawdown maturing on the last day of any Libor Interest Period
for any outstanding Libor Drawdowns or, if no Libor Drawdowns are then
outstanding, at any time by giving the Agent the appropriate Drawdown
Notice pursuant to Section 2.4.
III.2 Illegality
(a) If after the date of this Agreement any change occurs in any
Applicable Law, or in the interpretation or application thereof by any
court or by any Government Authority or other authority or entity
charged with the administration thereof, which makes it unlawful for
any Lender (in its opinion, acting reasonably and in good faith) to
make, fund or maintain any part of the Facility or to give effect to
its obligations in respect of any Drawdowns thereunder, the Lender may,
by written notice thereof to the Borrower and the Agent, declare its
obligations under this Agreement to be terminated with respect to such
affected part of the Facility (which notice shall be final, conclusive
and binding upon the Borrower, absent manifest error), whereupon the
same shall forthwith terminate.
(b) Any such notice shall be accompanied by a certificate of an
officer of the Lender identifying in reasonable detail the event or
condition which makes it unlawful for the Lender to lend or allow to
remain outstanding such portions of the Facility or any Drawdowns
thereunder (such notice to be final, conclusive and binding upon the
Borrower, absent manifest error).
(c) The Borrower shall: (i) prepay to the Lender within the greater
of: (A) ten Business Days after such notice; and (B) the time required
by such law, (or at the end of such longer period as the Lender at its
discretion has agreed) the principal amount of all Drawdowns so
affected together with accrued interest and such other amounts which
may be payable hereunder as a result of such prepayment (excluding any
cost associated with the repayment by the Borrower of a Libor Drawdown
other than at the expiration of the applicable Libor
39
-34-
Interest Period); or (ii) prior to the date of such required repayment,
replace such Lender with one or more Eligible Lenders (in respect of
whom the Term Out Date shall be the same date as the Term Out Date with
respect to the Commitment of the Lender being replaced).
(d) If any such change shall only affect a portion of the Lender's
obligations under this Agreement which is, in the reasonable opinion of
the Lender, severable from the remainder of this Agreement so that the
remainder of this Agreement may be continued in full force and effect
without otherwise affecting any of the obligations of the Lender or the
Borrower hereunder in respect of such Lender or under any of the other
documents contemplated hereby, the Lender shall only declare its
obligations under the affected portion so terminated.
(e) In the event that the provisions of this Section 3.2 are, or
threaten to become applicable in respect of any Lender, such Lender
shall use its reasonable efforts (at the expense of the Borrower) to
change its Lending Office or take such other action as may be
reasonable in the circumstances to eliminate the applicability of this
Section 3.2 to such Lender.
III.3 Bankers' Acceptances
(a) Delivery of Blank Drafts - To facilitate the acceptance of
Bankers' Acceptances pursuant to this Agreement the Borrower shall,
upon the execution of this Agreement and from time to time as required
by the Lenders, provide to the Lenders drafts duly endorsed in blank by
the Borrower in quantities sufficient for the Lenders to fulfil their
obligations hereunder. None of the Agent and the Lenders shall be
responsible or liable for any failure to issue a Bankers' Acceptance as
required hereunder if the cause of such failure is, in whole or in
part, due to the failure of the Borrower to provide requested drafts to
the Lender on a timely basis, nor shall any of the Agent and the
Lenders be liable for any damage, loss or other claim arising by reason
of any loss or improper use of any such draft except a loss or improper
use arising by reason of the failure of the Agent or the Lender, as the
case may be, to exercise the same degree of care with respect to such
draft as it exercises for its own securities.
(b) Documentation - Prior to any Bankers' Acceptance Drawdown being
made available, the Borrower shall have executed and delivered to the
Agent the Bankers' Acceptance Undertaking.
(c) Maturing Bankers' Acceptances - In anticipation of the maturity
of each Bankers' Acceptance issued hereunder, the Borrower may either:
(i) deliver to the Agent a Drawdown Notice requesting the
Conversion or Rollover of such Bankers' Acceptance pursuant to
the provisions of Section 2.11 or 2.12, respectively; or
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(ii) not later than 10:00 a.m. (Calgary time) on the
maturity date of the relevant Bankers' Acceptance, pay to the
Agent an amount equal to the principal amount of the maturing
Bankers' Acceptance.
In the event the Borrower shall fail to so notify the Agent of a
Rollover or Conversion or shall fail to make such payment, as the case
may be, the face amount of the maturing Bankers' Acceptance shall be
converted into a Prime Rate Drawdown on the relevant maturity date.
(d) Discount Rate - The Agent shall advise the Borrower, as soon as
practicable but in any event prior to 10:30 a.m. (Calgary time) on the
date of any Bankers' Acceptance Drawdown, of the Reference BA Discount
Rate applicable to each Bankers' Acceptance thereunder.
III.4 Issuance of Letters of Credit
(a) Form of Letters of Credit - Any Letter of Credit to be issued
by the Lenders under the Facility shall be in such form as may be
agreed upon by the Borrower and the relevant issuing Lender, each
acting reasonably.
(b) Documentation - Prior to any L/C Drawdowns, the Borrower shall
have executed and delivered the Letter of Credit Documentation to the
issuer of the relevant Letter of Credit.
(c) Prepayment - The Borrower may, at any time, and shall, if the
repayment or required repayment of any of the Loans would require the
reduction of L/C Drawdowns, surrender to the Agent any Letter(s) of
Credit having an aggregate remaining face amount at least equal to the
required reduction to the Agent or, deposit cash with the Agent for the
account of each of the Lenders rateably in accordance with the Letters
of Credit Loans outstanding to such Lender, in an interest-bearing
collateral cash account of the Borrower with the Agent, with interest
at the Agent's prevailing rate for similar deposits, in an amount equal
to the required reduction. Upon such surrender or receipt of such cash,
the L/C Drawdowns outstanding under the Facility shall be deemed to
have been reduced by the aggregate remaining face amount of the Letters
of Credit so surrendered or the amount of such cash so deposited
together with interest thereon as applicable.
ARTICLE IV
PAYMENT OF INTEREST AND OTHER FEES
IV.1 Interest on Prime Rate Drawdowns - The Borrower shall pay interest in
Canadian Dollars on the principal amount of each Prime Rate Drawdown (with,
subject to Section 4.7, interest on overdue interest at the same rate) at a
nominal rate per annum equal to the Prime Rate in effect
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from time to time plus the incremental number of Basis Points set forth in
respect of Prime Rate Drawdowns in Section 4.6.
Interest on each Prime Rate Drawdown shall accrue daily on the outstanding
principal balance thereof and shall be calculated and payable in arrears:
(a) on each successive Interest Payment Date, for the period then
ending;
(b) in the case of a prepayment of part or all of a Prime Rate
Drawdown, on the date of such prepayment, with respect to interest
accrued on the amount of principal being prepaid;
(c) in the case of amounts repaid pursuant to Section 5.2 or 5.4, on
the date of such repayment, with respect to interest accrued on the
amount of principal of any Prime Rate Drawdown being repaid; and
(d) on the date that all amounts owing hereunder are repaid in full,
whether on demand, by reason of acceleration or otherwise;
on the basis of the actual number of days for which a particular principal
amount is outstanding computed on the basis of a year of 365 days, or 366 days
in the case of a leap year. Interest on overdue interest on Prime Rate Drawdowns
shall be payable on demand. Changes in the Prime Rate shall cause an immediate
and automatic adjustment of the interest rate applicable to each Prime Rate
Drawdown as and from the effective date of such change without the necessity of
any notice to the Borrower, such notice being hereby expressly waived by the
Borrower. Interest on the Prime Rate Drawdowns shall be payable in accordance
with the foregoing after as well as before demand, default, maturity and
judgment.
IV.2 Interest on Base Rate Drawdowns - The Borrower shall pay interest in
United States Dollars to the Agent on the principal amount of each Base Rate
Drawdown (with, subject to Section 4.7, interest on overdue interest at the same
rate) at a nominal rate per annum equal to the Base Rate in effect from time to
time plus the incremental number of Basis Points set forth in respect of Base
Rate Drawdowns in Section 4.6.
Interest on each Base Rate Drawdown shall accrue daily on the
outstanding principal balance thereof and shall be calculated and payable in
arrears:
(a) on each successive Interest Payment Date, for the period then
ending;
(b) in the case of a prepayment of part or all of a Base Rate
Drawdown, on the date of such prepayment, with respect to interest
accrued on the amount of principal being prepaid;
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(c) in the case of amounts repaid pursuant to Section 5.2 or 5.4, on
the date of such repayment with respect to interest accrued on the
amount of the principal of any Base Rate Drawdown being repaid; and
(d) on the date that all amounts owing hereunder are repaid in full,
whether on demand, by reason of acceleration or otherwise;
on the basis of the actual number of days for which a particular principal
amount is outstanding, computed on the basis of a year of 365 days or 366 days
in the case of a leap year. Interest on overdue interest on Base Rate Drawdowns
shall be payable on demand. Changes in the Base Rate shall cause an immediate
and automatic adjustment of the interest rate applicable to each Base Rate
Drawdown as and from the effective date of such change without the necessity of
any notice to the Borrower, such notice being hereby expressly waived by the
Borrower. Interest on the Base Rate Drawdowns shall be payable in accordance
with the foregoing after as well as before demand, default, maturity and
judgment.
IV.3 Interest on Libor Drawdowns - The Borrower shall pay interest in United
States Dollars on the principal amount of each Libor Drawdown for the Libor
Interest Period applicable thereto at a nominal rate per annum equal to the
Libor Rate applicable to such Libor Drawdown plus the incremental number of
Basis Points set forth in respect of Libor Drawdowns in Section 4.6.
Interest on each Libor Drawdown shall accrue daily on the amount of such Libor
Drawdown and shall be calculated and payable in arrears on each successive
Interest Payment Date applicable to a Libor Drawdown, on the basis of the actual
number of days for which such Libor Drawdown is outstanding, computed on the
basis of a year of 360 days. Interest on each Libor Drawdown shall be payable in
accordance with the foregoing after as well as before demand, default, maturity
and judgment.
IV.4 Stamping Fees on Bankers' Acceptances - The Borrower shall pay, in
respect of each draft accepted by the Lenders as a Bankers' Acceptance, a
stamping fee equal to a nominal rate per annum equal to the number of Basis
Points set forth in respect of Bankers' Acceptances in Section 4.6, in each
case, of the face amount of such Bankers' Acceptance and calculated over the
term of such Bankers' Acceptance, such stamping fee to be payable on the date of
issuance of the Bankers' Acceptance.
IV.5 Fees for Letters of Credit - The Borrower shall pay with respect to
each Letter of Credit issued hereunder, in addition to any fee payable under
Section 2.6, a fee equal to a nominal rate per annum equal to the number of
Basis Points set forth in respect of Letters of Credit in Section 4.6,
calculated on the face amount of the relevant Letter of Credit over the term of
the Letter of Credit, such fee to be payable at the time of issuance. If any
Letter of Credit is cancelled or drawndown prior to expiration of its term, the
fee applicable to the remaining term thereof shall be refunded to the Borrower.
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IV.6 Incremental Interest and Fees - The applicable Basis Points or
incremental Basis Points payable in respect of Loans shall be as set forth below
in the column setting forth the Total Senior Debt/EBITDA ratio as calculated
pursuant to Section 8.1(l) (ii). The applicable Basis Points or incremental
Basis Points payable shall be effective and, if necessary, adjusted, from the
day the Compliance Certificate is required to be delivered pursuant to Section
8.1(d)(iii). For the period from the Effective Date until the Compliance
Certificate is required to be delivered in respect of the Fiscal Quarter ended
September 30, 1998, the applicable Basis Points or incremental Basis Points in
respect of Loans shall be as set forth in the column where the Total Senior
Debt/EBITDA Ratio is 2.5 to less than 3.0.
Total Senior Debt/EBITDA Ratio
-------------------------------------------------------------------------------------
Less than 2.0 2.0 to less 2.5 to less 3.0 to less 3.5 and greater
than 2.5 than 3.0 than 3.5
------------- ----------- ----------- ----------- ---------------
Interest Rates and Fees
Prime Rate ▇▇▇▇▇▇▇▇▇ ▇ ▇▇ ▇ ▇▇ ▇ ▇▇ ▇ ▇▇ ▇ bp
(Prime Rate plus)
Base Rate ▇▇▇▇▇▇▇▇▇ ▇ ▇▇ ▇ ▇▇ ▇ ▇▇ ▇ ▇▇ ▇ bp
(Base Rate plus)
Bankers' Acceptances ▇▇ ▇▇ ▇▇ ▇▇ ▇▇▇ bp 125 bp 137.50 bp
(Stamping Fee)
LIBOR Drawdowns ▇▇ ▇▇ ▇▇ ▇▇ ▇▇▇ bp 125 bp 137.50 bp
(Libor Rate plus)
Letters of Credit ▇▇ ▇▇ ▇▇ ▇▇ ▇▇▇ bp 125 bp 137.50 bp
Commitment Fee 10 bp 12.50 ▇▇ ▇▇ ▇▇ ▇▇ ▇▇ ▇▇ ▇▇
▇▇.▇ Interest on Unpaid Costs and Expenses - Unless the payment of interest
is otherwise specifically provided for herein, where the Borrower fails to pay
to the Agent any amount required to be paid by it to the Agent hereunder
(including unpaid interest), the Borrower shall pay interest on such unpaid
amount from the time such amount is due until such amount is paid in full at a
nominal rate per annum, equal to the Prime Rate in effect from time to time plus
2% with respect to amounts required to be paid by the Borrower in Canadian
Dollars, and at a nominal rate per annum, equal to the Base Rate in effect from
time to time plus 2% with respect to amounts required to be paid by the Borrower
in U.S. Dollars, such interest to be computed on the basis of a year of 365 days
or 366 days in the case of a leap year and to be calculated and (to the maximum
extent permitted by Applicable Law) compounded monthly on each Interest Payment
Date and to be payable on demand as well after as before default, maturity and
judgment, with interest on any unpaid interest at the same rate.
IV.8 Annual Rates of Interest - For the purposes of the Interest Act
(Canada), whenever interest payable pursuant to this Agreement is calculated on
the basis of a period other than a calendar year (the "Interest Period"), each
rate of interest determined pursuant to such calculation expressed as an annual
rate is equivalent to such rate as so determined multiplied by the actual
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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.
IV.9 Commitment Fee
(a) Calculation and Payment - Commencing on the Effective Date, the
Borrower shall pay to the Agent a commitment fee in U.S. Dollars equal
to a nominal rate per annum set forth in respect of the Commitment Fee
in Section 4.6 (based on a 365 day year, or 366 days in the case of a
leap year) on the undrawn portion of the Facility, such fee to be
calculated quarterly in arrears on the daily undrawn portion of the
Facility, to accrue to and including the last day of each Fiscal
Quarter to be invoiced by the Agent to the Borrower and to be paid
quarterly on or before the third Business Day of the next succeeding
Fiscal Quarter following receipt of such invoice.
(b) Calculation of Undrawn Portion - The undrawn portion of the
Facility shall be calculated by deducting the Outstanding Amount from
the aggregate of the Commitment Amounts.
IV.10 Limitation on Interest - Notwithstanding any other provisions of this
Agreement or any other document entered into in connection with this Agreement,
the Borrower shall not be obliged to make any payments of interest or other
amounts payable to the Agent hereunder or under any other document entered into
in connection with this Agreement in an amount or rate equal to or in excess of
that which would be prohibited by law or would result in the receipt by the
Lenders of interest at a criminal rate (as the terms "interest" and "criminal
rate" are defined under the Criminal Code (Canada)) or which would contravene
any local usury laws which may be applicable to any obligations of the Borrower
to the Lenders or the Agent under or in connection with this Agreement.
IV.11 Increases Costs - If, after the Effective Date, there is adopted any
Applicable Law, any change therein or any change in the interpretation or
application thereof by any court or by any Government Authority or other
authority or entity charged with the administration thereof, whether or not
having the force of law, which:
(a) subjects any Lender to any Taxes or changes the basis of
taxation, or increases any existing Taxes, on payments of principal,
interest or other amounts payable by the Borrower to the Lender under
this Agreement (except for Taxes on the overall net income or capital
of the Lender);
(b) imposes, modifies or deems applicable any reserve, cash margin,
special deposit or similar requirements against assets held by, or
deposits in or for the account of or loans by or any other acquisition
of funds by the relevant funding office of any Lender; or
(c) imposes on any Lender or any Person controlling such Lender a
requirement to maintain or allocate additional capital in relation to
the Facility;
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(other than as a result of a change in the credit rating of the Borrower) in a
manner uniform with other financial institutions listed in the same Schedule to
the Bank Act (Canada) as the Lender if such other financial institutions were
substituted for the Lender hereunder and the result of any of the foregoing is,
in the opinion of such Lender (acting reasonably and in good faith), to increase
the cost to such Lender of making or maintaining any Drawdown or reduce the
income receivable by such Lender in respect of any Drawdown by an amount which
is material, then upon such Lender giving written notice thereof, from time to
time, to the Agent and the Borrower (such notice to set out in reasonable detail
the facts giving rise to and a summary calculation of, such increased cost or
reduced income and to be final, conclusive and binding upon the Borrower, absent
manifest error), the Borrower shall pay to such Lender, not later than five
Business Days after such notice, that amount which shall compensate such Lender
for such additional cost or reduction in income (arising to or incurred by the
Lender not more than 90 days prior to the date of such notice) and thereafter on
each issuance of a Bankers' Acceptance and date for payment of fees in respect
of Letters of Credit and Interest Payment Date, in all other cases. For greater
certainty, the Borrower shall not be required to compensate any Lender for any
withholding taxes which the Borrower is required to withhold and remit in
respect of any principal, interest or other amount paid or payable by the
Borrower to any Lender in accordance with the terms of this Agreement unless
such obligation arises as a result of an action by the Borrower.
IV.12 Waiver of Judgment Interest Act (Alberta) - To the extent permitted by
Applicable Law, the provisions of the Judgment Interest Act (Alberta) shall not
apply to this Agreement and are hereby expressly waived by the Borrower.
ARTICLE V
REPAYMENTS AND PREPAYMENTS
V.1 Amounts Under Facility May be Reborrowed - Subject to the other terms
and conditions of this Agreement and as long as there shall not have occurred
and be continuing an Event of Default or any event which with the giving of
notice, the passing of time, or both, would constitute an Event of Default, any
amounts borrowed under the Facility and repaid from time to time may be
reborrowed during the Revolving Period.
V.2 Repayment under the Facility after Term Out Date - The Borrower shall
repay to each of the Lenders the principal amount of the Loans made by such
Lender under the Facility by payment, on each of the dates set forth below, of
that amount (in U.S. Dollars) as will reduce the principal amount of such Loans
outstanding on the date of such payment (denominated in U.S. Dollars) to that
proportion of the principal amount of such Loans outstanding on the Term Out
Date set forth opposite the date of such payment:
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Proportion of the principal amount
of such Loans outstanding
Payment Date on the Term Out Date
------------ ----------------------------------
- 6 month anniversary of the 7/8
Term Out Date
- 12 month anniversary of the 6/8
Term Out Date
- 18 month anniversary of the 5/8
Term Out Date
- 24 month anniversary of the 4/8
Term Out Date
- 30 month anniversary of the 3/8
Term Out Date
- 36 month anniversary of the 2/8
Term Out Date
- 42 month anniversary of the 1/8
Term Out Date
- Maturity Date 0
together with any accrued and unpaid interest at the Maturity Date payable on
the Maturity Date. On and after the Term Out Date, any repayment made by the
Borrower in respect of Loans in the Term Period shall reduce each Lender's
Commitment Amount.
V.3 Voluntary Prepayments -
(a) The Borrower may at any time during the Term Period upon not
less than three Business Days prior notice but without premium or
penalty, prepay to the Nonrevolving Lenders in whole or in part, any
Prime Rate Drawdown or Base Rate Drawdown together with accrued
interest thereon to the date of such prepayment. Any such prepayment of
the Facility shall be applied to scheduled repayments thereof in the
order requested by the Borrower.
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(b) If any Libor Drawdown or Bankers' Acceptance Drawdown is repaid
on other than the expiration of the applicable Libor Interest Period or
the maturity of the Bankers' Acceptance, respectively, the Borrower
shall, within three Business Days after notice from the Agent, pay to
the Agent for the account of each Lender rateably in accordance with
the portion of the Libor Drawdown or Bankers' Acceptance Drawdown
outstanding to such Lender:
(i) in the case of the prepayment of any Libor Drawdown,
all reasonable loss (excluding loss of profit) or
expense incurred as a result of such prepayment
including, without limitation, any cost or expense
incurred by reason of the liquidation or
re-employment in whole or in part of deposits or
other funds required by the Lenders to fund any Libor
Drawdown; and
(ii) in the case of the prepayment of any Bankers'
Acceptance Drawdown, the amount determined by the
Agent acting reasonably, to be the amount required to
be paid on the date of such prepayment to yield to
the Lenders the face amount of the Bankers'
Acceptance to be prepaid on the maturity thereof.
(c) On and after the Term Out Date, any prepayment made by the
Borrower in respect of the Loans in the Term Period shall rateably
reduce each Lender's Commitment Amount.
V.4 Currency Fluctuations - Notwithstanding any other provision of this
Agreement, if any Loan outstanding is denominated in Cdn. Dollars the Agent
shall have the right to calculate the Outstanding Amount for all purposes
including making a determination from time to time of the available undrawn
portion of the Facility. If following such calculation, the Agent determines
that the Outstanding Amount is greater than 105% of the Loans permitted hereby
to be outstanding at such time, then the Agent shall so advise the Borrower and
the Borrower shall repay, on the later of three Business Days after such advice
and the next applicable Interest Payment Date immediately following such date of
calculation, an amount sufficient to eliminate the excess over and above the
aggregate amount of the Loans permitted hereby to be outstanding at such time,
together with all accrued interest on the amount so paid.
V.5 Voluntary Reduction of Commitments - The Borrower may at any time,
without penalty, upon that number of Business Days prior notice to the Agent as
would be applicable to a Prime Rate Drawdown of like amount, terminate in whole
or reduce rateably (in accordance with the Lenders' respective Commitments) in
part the unutilized portions of the respective Commitments of the Lenders
provided that each partial reduction shall be in the aggregate amount of U.S.
$10,000,000 (or such other amounts as the Agent may approve) and additional
increments of integral multiples of U.S. $1,000,000. All accrued Commitment Fees
on the aggregate amount by which such Commitments are terminated or reduced
shall be due and payable by the Borrower on the effective date of such
termination or reduction. All terminations or reductions of the Commitments
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shall be rateable among the Lenders in proportion to their respective Commitment
Amounts and shall be permanent.
ARTICLE VI
CONDITIONS PRECEDENT TO DRAWDOWNS
VI.1 Conditions Precedent to First Drawdown - The obligation of the Lenders
to advance the first Drawdown of the Facility is subject to the condition
precedent that the Agent shall have received on or before the Drawdown Date of
the proposed first Drawdown all of the following in form and substance
satisfactory to the Agent and the Agent's counsel (in each case, acting
reasonably):
(a) a certified copy of all documentation with respect to the
authority of the Borrower to execute, deliver and perform this
Agreement;
(b) the opinion of legal counsel to the Borrower, substantially in
the form attached hereto as Schedule H;
(c) the opinion of legal counsel to the Agent and the Lenders
substantially in the form attached hereto as Schedule I;
(d) a certificate of a senior officer of the Borrower stating that
as of such date, all of the representations and warranties made by the
Borrower herein are true and correct and that no event has occurred
which constitutes or would constitute, with the giving of notice, the
passing of time, or both, an Event of Default; and
(e) a Drawdown Notice for an Advance of the amount to fully repay,
upon the first Drawdown Date, all amounts owing by the Borrower under
the Existing Loan Facility together with:
(i) an irrevocable direction to apply such Advance to the
repayment of the amounts owing by the Borrower under the
Existing Loan Facility; and
(ii) an irrevocable notice from the Borrower terminating in
whole the Existing Loan Facility effective on such first
Drawdown Date.
VI.2 Conditions Precedent to All Drawdowns - The obligations of the Lenders
to advance any Drawdown of the Facility shall, in addition to any other
requirements of this Agreement, be subject to the following conditions
precedent:
(a) the Agent shall have received, if applicable, a proper and
timely Drawdown Notice;
49
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(b) there shall not have occurred and be continuing any event which
constitutes or (other than in the case of a Conversion or Rollover,
provided, that in the case of a Conversion or Rollover into a Bankers'
Acceptance Drawdown or Libor Drawdown, the maturity date or period
shall not extend beyond the earliest date upon which such event would
constitute an Event of Default) would constitute, with the giving of
notice, the passing of time, or both, an Event of Default;
(c) each of the representations and warranties made in subsections
7.1(a), (c), (d), (e), (g), (p) and (q) shall be true and correct (and
the acceptance by the Borrower of such Drawdown shall be deemed to
constitute a further representation and warranty by the Borrower that
such statements are true and correct) as if given on, and with effect
as of, the Drawdown Date other than with respect to a Conversion or
Roll-over; and
(d) such other documentation as the Agent may reasonably request in
respect of any Letter of Credit.
VI.3 Waiver - The conditions set forth in Sections 6.1 and 6.2 are provided
for the sole benefit of the Lenders and may, with the prior consent of Majority
Lenders, be waived by the Agent, in whole or in part (with or without terms or
conditions) in respect of any Drawdown without prejudicing the right of the
Lenders at any time to assert such conditions in respect of any subsequent
Drawdown.
ARTICLE VII
BORROWER'S REPRESENTATIONS AND WARRANTIES
VII.1 Borrower's Representations and Warranties - To induce the Lenders to
make available the Facility, the Borrower represents and warrants to and in
favour of the Lenders as follows, which representations and warranties of the
Borrower shall survive the execution and delivery of this Agreement and the
making of each Drawdown, notwithstanding any investigations or examinations
which may be made by the Agent, the Lenders or the Agent's counsel:
(a) Existence of Borrower - Each of the Borrower and the Restricted
Subsidiaries (excluding Non-Material Restricted Subsidiaries) is a
corporation duly incorporated or continued, organized, and validly
subsisting under the jurisdiction of its incorporation and has all
necessary corporate power and authority to own its properties and carry
on its business as presently carried on;
(b) Qualification - Each of the Borrower and the Restricted
Subsidiaries is duly licensed and qualified to carry on business in
each jurisdiction in which the location of its respective
50
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property or assets or the conduct of its business require such licence
or qualification save and except, in the aggregate, where such failure
would not be Materially Adverse;
(c) Corporate Authority - The Borrower has all necessary corporate
power, authority and capacity to enter into this Agreement and to do
all such acts and things as are required hereunder to be done, observed
or performed by it, in accordance with the terms of this Agreement;
(d) Valid Authorization of Agreement - The Borrower has taken all
necessary action to authorize the execution, delivery and performance
of this Agreement in accordance with its terms;
(e) Enforceability - This Agreement constitutes a valid and legally
binding obligation enforceable against the Borrower in accordance with
its terms, subject, however, to limitations with respect to enforcement
imposed by law in connection with bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally
and to the extent that equitable remedies such as specific performance
and injunction are in the discretion of the court from which they are
sought;
(f) Title - Each member of the Restricted Group has good and
marketable title to its properties and assets, free and clear of all
liens, claims, restrictions or encumbrances other than Permitted
Encumbrances except where the absence of such title would not, in the
aggregate, be Materially Adverse;
(g) Validity of Agreement - Non-Conflict - None of the Borrower nor
the Restricted Subsidiaries is a party to, bound or affected by or
subject to any indenture, mortgage, lease, agreement, contractual
obligation, instrument, charter or by-law provision, resolution of
directors or shareholders of the Borrower or any of the Restricted
Subsidiaries, order, rule, judgment, decree, licence, or permit which
would be violated, contravened, breached by, or under which default
would occur or a lien, claim, restriction or encumbrance would be
created upon any of the properties or assets of any member of the
Restricted Group as a result of the execution and delivery of this
Agreement or the carrying out of the Borrower's obligations hereunder
where such violation, contravention, breach, default, lien, claim,
restriction or encumbrance, in the aggregate, would be Materially
Adverse;
(h) Government Approval, Regulation, etc. - No authorization or
approval or other action by, and no notice to or filing with, any
Government Authority or regulatory body or other Person is required for
the due execution, delivery or performance by the Borrower of this
Agreement except for authorizations, approvals, actions, notices or
filings which have been duly obtained or made and are in full force and
effect except where the violation or the absence of or lack of good
standing under any such authorization would not, in the aggregate, be
Materially Adverse;
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(i) Absence of Litigation - There is not now in progress, pending
or, to the Borrower's knowledge, threatened against the Borrower or any
Restricted Subsidiary, any litigation, action, suit, investigation,
claim, complaint or other proceeding, including appeals and
applications for review, by or before any court, tribunal, governmental
agency, commission, board, bureau, agency or instrumentality, domestic
or foreign which would, in the aggregate, be Materially Adverse;
(j) Financial Statements - The Financial Statements and the notes to
such Financial Statements have been prepared in accordance with GAAP
applied on a basis consistent with that of the preceding periods and
present fairly (i) all of the assets, liabilities and financial
position of Gulf as at December 31, 1997 and as at June 30, 1998, and
(ii) the results of operations and changes in financial position of
Gulf for the fiscal year ended December 31, 1997 and for the six months
ended June 30, 1998, all financial reports and financial statements
delivered to the Agent or the Lenders pursuant to this Agreement,
including without limitation any financial information on which any
compliance certificates are based have been prepared in accordance with
GAAP and present fairly the financial information set out therein;
(k) No Event of Default - No Event of Default has occurred and is
continuing and no event has occurred which, with the giving of notice,
the passing of time, or both, would constitute an Event of Default;
(l) Compliance with Laws - None of the Borrower nor any Restricted
Subsidiary is in violation of any indenture, mortgage, lease,
agreement, obligation, instrument, charter or by-law provision,
judgment, decree, license, order, statute, rule, permit or regulation
relating in any way to the Restricted Group, to the operation of its
business or to its property or assets and each of the Borrower and the
Restricted Subsidiaries has obtained all licences, franchises, permits,
registrations and similar authorizations, all of which are in good
standing, necessary for the conduct by it of its businesses, except
where the violation or the absence of or lack of good standing under
any such authorization would not, in the aggregate, be Materially
Adverse;
(m) Environmental Laws
(i) each of the Borrower and its Subsidiaries is in
compliance with all Environmental Laws and material
Environmental Approvals, except to the extent that failure to
comply therewith would not, in the aggregate, be Materially
Adverse;
(ii) each of the Borrower and its Subsidiaries:
(A) possesses or has applied for all Environmental
Approvals required in order to conduct its business
operations; and
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(B) all such Environmental Approvals are valid and
in full force and effect; and
(C) is now in compliance in all respects with all
such Environmental Approvals; and
(D) no consent or approval is required of the
Borrower in connection with the transactions
contemplated herein in order to maintain such
Environmental Approvals in full force and effect;
except to the extent that failure to apply for, obtain, comply
with or maintain such Environmental Approvals would not, in
the aggregate, be Materially Adverse;
(iii) except to the extent that failure to so comply would
not, in the aggregate, be Materially Adverse, each of the
Borrower, and its Subsidiaries has complied with all
reporting, notification and inspection requirements imposed by
Environmental Laws, and all operating, monitoring and
reporting records have been maintained in accordance with all
Environmental Laws and Environmental Approvals; and
(iv) except to the extent that failure to do so would not,
in the aggregate, be Materially Adverse, each of the Borrower
and its Subsidiaries has complied with all contracts and
agreements entered into by the Borrower and its Subsidiaries
with Government Authorities relating to environmental matters;
(n) Insurance - Each of the Borrower and the Restricted Subsidiaries
has insurance with respect to its properties, assets and business and
against such casualties and contingencies and in such types and such
amounts, as is in accordance with sound business practices for
corporations of the size and type of business and operations thereof;
(o) Taxes - Each of the Borrower and the Restricted Subsidiaries
has: (i) duly and timely filed all tax returns and reports as required
by law, has duly and correctly reported all income and other amounts
required to be reported and has paid all Taxes, penalties, interest,
fines and governmental charges in respect thereof, to the extent that
such Taxes, penalties, interest, fines and other governmental charges
have been assessed by the relevant taxation authority, except any such
taxes or charges which are being diligently contested in good faith by
appropriate proceedings for which adequate reserves in accordance with
GAAP shall have been set aside on its books; and (ii) duly and timely
paid all instalments of Taxes required to be paid by it and has made
full provision on its books for all taxes and all penalties, interest
and fines in respect thereof which relate to periods ending immediately
prior to the date hereof, except such failures with respect to (i) and
(ii) which would not, in the aggregate, be Materially Adverse. Other
than actions, suits, proceedings, investigations, audits, claims and
matters which would not, in the aggregate, be Materially Adverse, there
are no actions, suits, proceedings, investigations, audits or claims
now pending or, to the best of the knowledge, information and belief of
the senior officers of the Borrower after due enquiry, threatened
against the Borrower or any Restricted Subsidiary in respect of any
Taxes or any penalties, interest and fines in respect thereof and there
are no matters under discussion with any
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taxation or other Government Authority relating to any such matters not
provided for in the Financial Statements; and
(p) Accuracy of Information - All factual information furnished by
or on behalf of Gulf in writing to the Agent or the Lenders for
purposes of or in connection with this Agreement (including, without
limitation, all engineering and other information with respect to the
proved and probable reserves attributable to the petroleum and natural
gas interests of Gulf and the interests of Gulf in the assets on which
such information is based) or any transaction contemplated hereby
provided on or before the Effective Date is, and all other such factual
information provided pursuant to this Agreement to the Agent or the
Lenders (excluding information provided pursuant to paragraph
8.1(d)(vi) other than pursuant to a written request) will be, true and
accurate on the date as of which such information is dated or certified
(subject to any corrections, amendments or additions to such
information furnished to the Agent or the Lenders, as the case may be,
prior to any reliance thereon thereby) except to the extent that any
inaccuracies therein are not in the aggregate Materially Adverse and
such information is not, or shall not be, as the case may be,
incomplete by omitting to state any material fact necessary to make
such information not misleading, save and except in such respects as
are not, in the aggregate, Materially Adverse.
(q) Year 2000 - The Borrower represents that it is aware of the Year
2000 Issue and has developed and is further developing a plan which it
in good faith believes to be realistic and achievable to identify its
critical date dependent processes involving computer hardware,
software, middleware and systems that may be impacted by the date
change at the year 2000 and to replace or remediate such hardware,
software, middleware and systems so that the effects of the Year 2000
Issue would not reasonably be expected to be Materially Adverse. The
Borrower further represents that it reasonably expects that the Year
2000 Issue will not be Materially Adverse.
ARTICLE VIII
COVENANTS
VIII.1 Covenants - The Borrower covenants and agrees with the Agent and the
Lenders that, unless the Lenders otherwise consent in writing, so long as any
amount payable hereunder is outstanding:
(a) Punctual Payment - The Borrower shall duly and punctually pay
the principal amount of all Loans, all interest thereon, all fees and
all other amounts required to be paid by the Borrower hereunder or
pursuant to agreements with the Agent or Lenders respecting Letters of
Credit or Bankers' Acceptances and other documents related to the
Facility at the times and places and in the manner provided for herein
or therein;
(b) Conduct of Business - Save and except where the failure to do so
would not, in the aggregate, be Materially Adverse, each of the
Borrower and the Restricted Subsidiaries shall
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do all things necessary to maintain its legal existence in good
standing under the laws of the jurisdiction of its incorporation and to
maintain its qualification to carry on business in each jurisdiction in
which the location of its respective property or assets or the conduct
of its business requires such license or qualification and to maintain
all franchises, licenses, rights, approvals, permits, consents, rights
and privileges necessary for the conduct of its business and to perform
its obligations under this Agreement;
(c) Compliance with Laws - Each of the Borrower and the Restricted
Subsidiaries shall comply with all Applicable Laws and all applicable
statutory obligations, judgments, decrees, licences, orders, statutes,
rules, permits and regulations, the non-compliance with which would be
Materially Adverse;
(d) Financial Statements and Other Information - The Borrower shall
deliver to the Agent and the Lenders:
(i) as soon as practicable and in any event within 120 days
after the end of each of its fiscal years, the unaudited
unconsolidated annual financial statements of the Restricted
Group and the audited consolidated annual financial statements
of Gulf consisting of balance sheets, statements of profit and
loss and surplus, and statements of changes in financial
position for such year, together with the notes thereto, and
setting forth in comparative form the corresponding figures for
the preceding year, all prepared in accordance with generally
accepted accounting principles consistently applied throughout
the period and prior periods, together with a report of the
Auditors thereon;
(ii) as soon as practicable and in any event within 60 days
after the end of each of the first three Fiscal Quarters of each
year, unaudited consolidated financial statements of Gulf
similar to those required pursuant to paragraph 8.1(d)(i) as of
the end of such period and for such period then ended and for
the period from the beginning of the current fiscal year to the
end of such period, setting forth, in the case of the
consolidated financial statements, in comparative form, the
corresponding figures for the comparable period in the preceding
fiscal year, prepared in accordance with generally accepted
accounting principles consistently applied and certified by the
controller, treasurer or other duly authorized financial officer
of the Borrower subject only to changes resulting from audit and
normal year-end adjustments;
(iii) as soon as practicable and in any event within 60 days
after the end of each of the first three Fiscal Quarters in each
fiscal year and within 90 days after the end of each fiscal
year, a Compliance Certificate and a Notice of Unrestricted
Subsidiaries;
(iv) as soon as practicable after any Extension Request, a
report prepared by qualified engineers (which, for greater
certainty need not be independent and may be
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employed by Gulf) reasonably estimating the proved and
probable reserves attributable to the petroleum and natural
gas interests of Gulf (excluding Unrestricted Subsidiaries) as
of a date not earlier than the last day of the last financial
year of the Borrower preceding the date of the Extension
Request;
(v) promptly, notice of any event or occurrence (including,
without limitation, any event or occurrence which constitutes
a breach of any Environmental Laws or Environmental Approvals)
which may be Materially Adverse;
(vi) from time to time, such additional available information
regarding the financial position or business of Gulf as the
Agent or the Lenders acting through the Agent may reasonably
request; and
(vii) promptly after the occurrence of any change in
Unrestricted Subsidiaries, a Notice of Amendment of
Unrestricted Subsidiaries;
(e) Notice of Litigation - The Borrower shall give notice to the
Agent of the occurrence of any litigation, action, suit, investigation,
claim, complaint or other proceeding, if the result thereof, or in
respect of such matters as in the aggregate, might be Materially
Adverse or if any thereof in any manner draws into question the
validity or enforceability of this Agreement, and from time to time
shall provide the Agent with all reasonable non-privileged information
requested by the Agent or any of the Lenders concerning the status of
any such litigation, action, suit, investigation, claim, complaint or
other proceeding. Such notice shall be given within 15 days of senior
management becoming aware of such litigation, proceeding or dispute and
shall be in form and detail satisfactory to the Agent, acting
reasonably;
(f) Notice of any Event of Default - The Borrower shall forthwith
give notice to the Agent of any fact which, to the best of the
Borrower's knowledge, would reasonably be construed as constituting an
Event of Default or of any event which, to the best of the Borrower's
knowledge, with the giving of notice, lapse of time or otherwise would
constitute an Event of Default;
(g) Books and Records - The books and records relating to the
financial affairs of Gulf shall at all times be maintained in
accordance with good and customary business practice, all financial
statements provided for herein shall be prepared in accordance with
GAAP (excepting, in the case of unconsolidated statements, GAAP with
respect to the consolidation thereof) and present fairly the financial
information set forth therein and at any reasonable time and from time
to time upon reasonable prior notice, the Borrower shall permit the
Agent or the Agent at the request of the Lenders, at the reasonable
expense of the Borrower, access to examine such books and records;
(h) Use of Proceeds - The Borrower shall use the proceeds of all
Drawdowns for the purposes contemplated in Section 2.2;
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-51-
(i) Pari Passu Ranking - The Borrower shall ensure that Loans under
the Facility rank pari passu with all other present and future senior
unsecured indebtedness of the Borrower;
(j) Environmental Compliance - The Borrower shall and shall cause
each Restricted Subsidiary to comply with all, and shall advise the
Lenders if it or any Subsidiary becomes aware that it is not in
compliance with, any applicable Environmental Laws and Environmental
Approvals, except to the extent that failure to comply would not, in
the aggregate, be Materially Adverse. At the request of the Lenders, in
their sole discretion, the Borrower shall undertake to have an
environmental audit (by an independent environmental auditor to be
chosen by the Agent with the prior consent of the Borrower, acting
reasonably) of part or all of its operations conducted for the benefit
of the Lenders at the cost of the Borrower, such cost to the Borrower
not to exceed U.S. $100,000 for each audit requested. If such
environmental audit establishes environmental liability to the
Restricted Group in excess of: (A) U.S. $25,000,000 in the 5 years next
following the date of such audit or during the remaining term of the
Facility, whichever is shorter; and (B) provisions in the annual or
quarterly financial statements of the Borrower last preceding the date
of such environmental audit, provision for such amount shall be made in
the next quarterly or annual financial statements of the Borrower or
the amount of such liability during the remaining term of the Facility
shall be added to Total Senior Debt for purposes of subsection 8.1(l)
until such time as provision for such amount is made in the financial
statements of the Borrower or the Majority Lenders are satisfied, in
their sole discretion, acting reasonably, that the liability is no
longer Materially Adverse. The Lenders may not request an environmental
audit, at the cost of the Borrower, more than once every two financial
years of Gulf provided that, at the request of the Lenders in their
sole discretion, the Borrower shall undertake to have an environmental
audit as aforesaid, at the cost of the Lenders at any time provided
that the Lenders may not request an environmental audit, whether at the
cost to the Borrower or at the cost to the Lenders, more than once
every financial year of Gulf;
(k) Negative Pledge - The Borrower shall not, and shall not permit
any Restricted Subsidiary to, create, issue, incur, assume or permit to
exist any security interest on its properties or assets in priority to
the Lenders' rights in respect of the Facility, other than Permitted
Encumbrances;
(l) Financial Covenants -
(i) At the end of each Fiscal Quarter the Tangible Net Worth
of Gulf on a consolidated basis shall equal or exceed the
Minimum Tangible Net Worth;
(ii) At the end of each Fiscal Quarter during each of the
following periods:
(A) September 30, 1998 - June 30, 1999
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Total Senior Debt
------------------------------------------------- [less than] 4.0
( Cumulative )
( Acquisition Disposition )
( Restricted + - )
( EBITDA EBITDA )
( EBITDA )
Total Senior Debt
------------------------------------------------- [less than] 3.5
( Cumulative )
( Acquisition Disposition )
( Restricted + - )
( EBITDA EBITDA )
( EBITDA )
(B) September 30, 1999 -- June 30, 2001
(C) September 30, 2001 and thereafter
Total Senior Debt
------------------------------------------------- [less than] 3.5
( Cumulative )
( Acquisition Disposition )
( Restricted + - )
( EBITDA EBITDA )
( EBITDA )
where:
"CUMULATIVE RESTRICTED EBITDA" means the aggregate EBITDA of
the Restricted Group for the Previous Four Fiscal Quarters;
"ACQUISITION EBITDA" means EBITDA properly attributable to
assets acquired by the Restricted Group within the Previous
Four Fiscal Quarters which was generated in the Previous Four
Fiscal Quarters when such assets were not owned by the
Restricted Group and thus not included in the Cumulative
Restricted EBITDA provided, however, that Acquisition EBITDA
shall not include the EBITDA properly attributable to any such
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asset acquisition having a Transaction Price less than
U.S. $5,000,000 as long as the aggregate of the
Transaction Prices for assets acquired in the Previous
Four Fiscal Quarters by the Restricted Group does not
exceed U.S. $50,000,000 in which case the aggregate
EBITDA relating to all such acquisitions shall be
included; and
"DISPOSITION EBITDA" means EBITDA properly attributable
to assets disposed of by the Restricted Group within the
Previous Four Fiscal Quarters which was generated in the
Previous Four Fiscal Quarters when such assets were owned
by the Restricted Group and thus included in the
Cumulative Restricted EBITDA provided, however, that
Disposition EBITDA shall not include the EBITDA properly
attributable to any such asset disposition having a
Transaction Price less than U.S. $5,000,000 as long as
the aggregate of the Transaction Prices for assets
disposed of in the Previous Four Fiscal Quarters by the
Restricted Group does not exceed U.S. $50,000,000 in
which case the aggregate EBITDA relating to all such
dispositions shall be included;
(m) Negative Covenants -- The Borrower shall not, and shall not
permit any Restricted Subsidiaries to, without the prior written
consent of the Majority Lenders:
(i) provide Financial Guarantees, excluding Designated
Project Guarantees, in an aggregate amount in excess of 5% of
the Equity of Gulf unless such Financial Guarantees or the
Funded Debt guaranteed thereby is included in Total Senior Debt;
(ii) sell, assign, transfer or otherwise dispose of properties
or assets (excluding (A) the sale of accounts receivable under
the Receivables Purchase and Sale Agreement dated November 29,
1994, as amended, among the Borrower, Corporate Receivables
Trust and Toronto Dominion Securities Inc., or any replacement
of such arrangement; (B) the surrender, exchange, lease,
sublease or farmout of any property or assets in the ordinary
course of business; (C) the sale of production of hydrocarbons
or by-products in the ordinary course of business; and (D) sales
or other dispositions of assets or property from one member of
the Restricted Group to another member of the Restricted Group)
in any four consecutive Fiscal Quarters pursuant to which the
Restricted Group receives Net Proceeds in an amount which
exceeds 5% of the Equity of Gulf (which Equity shall be
calculated as of the first day of such four Fiscal Quarters)
(the last day of any four Fiscal Quarters in which such excess
occurs hereinafter referred to as the "Excess Date") unless an
amount equal to such excess proceeds from the sale or other
disposition of such properties or assets are utilized for either
investments in the normal course of Gulf's business or the
repayment of Senior Debt (including the Loans), and any such
proceeds not so utilized are repaid to the Lenders (except to
the extent such Restricted Subsidiaries do not make such
payments to the Borrower because they are precluded from doing
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so pursuant to the terms of their Funded Debt), on the next
applicable Interest Payment Date following the end of the
fourth Fiscal Quarter after the Excess Date. Any such
repayment of the Facility shall be applied to scheduled
repayments in inverse order of maturity;
(iii) merge, amalgamate, consolidate, reorganize or enter
into a plan of arrangement with any other Person or become a
party to any other transaction whereby all or substantially
all of the property or assets of the Restricted Group may
become the property or assets of another Person, including, in
the case of an amalgamation, of the continuing company
resulting therefrom, unless such merger, amalgamation,
consolidation, reorganization, plan of arrangement,
partnership or other transaction: (A) involves at least one
member of the Restricted Group; and (B) does not constitute an
Event of Default and would not constitute with the giving of
notice, the passing of time, or both, an Event of Default and,
in the case of the Borrower, complies with subsection 8.4(a);
(iv) make any material change in the nature of the
Restricted Group's business, being the exploration and
production of oil and gas, oil and gas pipelines, gas
processing, oil refining, and any other ancillary industry
related to the exploration and production of oil and gas, and
not make any investments outside the normal course of such
business, which are in the aggregate in excess of 5% of the
book value of the assets of the Restricted Group at the end of
the last completed Fiscal Quarter of the Borrower; or
(v) continue the Borrower's existence under the laws of any
jurisdiction other than the laws of Canada or any province
thereof without the prior consent of the Majority Lenders in
their sole discretion, acting reasonably;
(n) Insurance -- The Borrower will and will cause each of its
Restricted Subsidiaries to maintain, with financially sound and
reputable insurers, insurance with respect to its properties and
business and against such casualties and contingencies and in such
types and such amounts as shall be in accordance with sound business
practices for corporations of the size and type of business and
operations as Gulf;
(o) Defend Title -- The Borrower shall and shall cause each of the
Restricted Subsidiaries to diligently maintain, protect and defend its
right, title, estate and interest in, to and in respect of the property
and assets (including proceeds thereof) of the Borrower and Restricted
Subsidiaries against any claim or demand whatsoever and take all such
acts and steps as are necessary or advisable at any time and from time
to time to maintain ownership of and keep in good standing all of the
Borrower's and Restricted Subsidiaries' property and assets, all in
accordance with good oil and gas industry practice, except where the
failure to so maintain, protect or defend would not, in the aggregate,
be Materially Adverse;
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(p) Taxes -- The Borrower will and will cause each of its Restricted
Subsidiaries (excluding Non-Material Restricted Subsidiaries) to duly
and timely file all returns in respect of all federal and provincial
and other Taxes or other assessments or governmental charges or levies
applicable thereto and to pay, or make provision for payment of, all
such Taxes, assessments, charges or levies imposed upon it or upon its
income or profits or upon property or assets belonging to it, unless,
in any such case, the same is being contested in good faith by
appropriate proceedings and an adequate reserve therefor has been
established and is maintained in accordance with GAAP and except where
the failure to so file a return or pay, or provide for, such taxes,
assessments, charges or levies would not, in the aggregate, relate to a
liability to the Restricted Group in excess of U.S. $500,000;
(q) Obligation to Notify of a Credit Rating Change -- At any time
that a rating assigned by Standard and Poor's or ▇▇▇▇▇'▇ changes as it
relates to the Borrower, the Borrower shall, upon receiving notice of
the public dissemination of notice of such change, immediately, and in
any event within 10 Business Days following receipt thereof, notify the
Agent of such new rating and the date of such change;
(r) Maintain Property -- The Borrower shall and shall cause each of
the Restricted Subsidiaries to maintain all of its property and assets
in good condition and repair in accordance with good oil and gas
industry practice, except where the failure to do so would not, in the
aggregate, be Materially Adverse;
(s) Ownership of Assets -- At least 50% of the total assets of the
Restricted Group, determined in accordance with GAAP, shall at all
times be owned by the Borrower or by its Restricted Subsidiaries which
do not have Funded Debt in excess of Cdn. $10,000,000, in the aggregate
(other than Funded Debt owing to other Restricted Subsidiaries having
Funded Debt not exceeding Cdn. $10,000,000 in the aggregate); and
(t) Year 2000 Failure -- The Borrower will, and will cause each of
its Controlled Subsidiaries to, use reasonable commercial efforts to
ensure that all critical hardware, software, middleware and all systems
(and those of its Controlled Subsidiaries) are able to effectively
process data, and otherwise effectively and reliably operate before, on
and after January 1, 2000, without experiencing any Year 2000 Failure
that would reasonably be expected to be Materially Adverse. At the
request of the Agent, the Borrower will provide the Agent with evidence
acceptable to the Agent, acting reasonably, as to the capability of the
Borrower and its Controlled Subsidiaries to conduct its and their
businesses and operations before, on and after January 1, 2000 without
experiencing a Year 2000 Failure that would reasonably be expected to
be Materially Adverse.
VIII.2 Environmental Indemnity -- The Borrower hereby covenants and agrees to
be responsible for, and to indemnify each of the Agent, the Lenders and each of
their officers, directors, employees and agents (in this Section, collectively
referred to as the "Indemnified Parties") and hold each of them harmless from
and against all claims, demands, liabilities, losses, costs, damages and
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expenses (including, without limitation, reasonable legal fees and all costs
incurred in the investigation, pursuing of any claim, proceeding with respect
to, defense and settlement of any item or matter hereinafter set out) that the
Indemnified Parties may incur or suffer, directly or indirectly, as a result of
or in connection with:
(i) the presence of any Hazardous Substance on, upon or
within Gulf's properties or assets, or the escape, seepage,
leakage, spillage, discharge, emission, release, disposal or
transportation away from Gulf's properties or assets of any
Hazardous Substance, whether or not there is compliance with
all applicable Environmental Laws and Environmental Approvals;
and
(ii) the imposition of any Remedial Order affecting the
Borrower's properties or assets, or any non-compliance with
Environmental Laws or Environmental Approvals pertaining to
Gulf's properties or assets by any Person, including Gulf, the
Agent, the Lenders or any Person acting on behalf of the Agent
or any of the Lenders;
in any way arising in connection with or related to such Indemnified Party's
participation in the Facility or this Agreement provided that any such claims,
demands, liabilities, losses, costs, damages and expenses are not as a result of
the act or omission of the Indemnified Party.
VIII.3 Restricted/Unrestricted Subsidiaries
(a) All Subsidiaries are Restricted Subsidiaries unless they are
Unrestricted Subsidiaries. The Borrower covenants and agrees that the
Subsidiaries listed in Schedule L (as Schedule L may be amended by the
Borrower pursuant to this Agreement from time to time after the
Effective Date) as "Unrestricted Subsidiaries" shall be all of the
Unrestricted Subsidiaries of the Borrower (excepting only Subsidiaries
of Unrestricted Subsidiaries).
(b) If an entity is purchased by the Borrower or any Restricted
Subsidiary and such entity would not otherwise qualify as a Restricted
Subsidiary and the Funded Debt (other than Inter-Restricted Group
Funded Debt) of the entity remains non-recourse to the Borrower or any
Restricted Subsidiary, the Borrower shall be permitted 12 months from
the date of purchase to: (A) retire the Funded Debt of such entity with
the proceeds of Funded Debt of the Borrower ranking no higher than pari
passu with the Facility, or other funds to the extent necessary to
qualify as a Restricted Subsidiary; or (B) assume the Funded Debt of
such entity provided it ranks no higher than pari passu with the
Facility; provided in either case that the additional Funded Debt of
the Borrower does not result in subsection 8.1(l) being contravened.
During the 12 months from the date of purchase and prior to such
retirement, or assumption of the Funded Debt of such entity, the entity
may be designated as a Restricted Subsidiary or Unrestricted
Subsidiary, at the Borrower's option. If the entity does not qualify as
a Restricted Subsidiary within the 12 month period, the entity (unless
it would not
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otherwise be an Unrestricted Subsidiary as defined herein) shall be
designated as an Unrestricted Subsidiary.
(c) Neither the Borrower nor any Restricted Subsidiary may:
(i) sell, assign, transfer or otherwise dispose of any
properties or assets (other than the disposition of securities
of Unrestricted Subsidiaries held thereby) to any one or more
Unrestricted Subsidiaries unless: (x) it shall be for
consideration not less than the Fair Market Value thereof at the
date of such disposition; and (y) after taking into account the
overall effect of any transaction giving rise to the change
(including for certainty, accounting for any concurrent
repayment of Senior Debt) subsection 8.1(l) would not have been
contravened by the Borrower if such disposition had occurred
prior to the end of the last Fiscal Quarter preceding the date
of such disposition; or
(ii) purchase or otherwise acquire any properties or assets
from any one or more of the Unrestricted Subsidiaries unless:
(x) it shall be for consideration not greater than the Fair
Market Value of such properties or assets at the date of such
acquisition; and (y) after taking into account the overall
effect of any transaction giving rise to the change (including
for certainty, accounting for any concurrent repayment of Senior
Debt) subsection 8.1(l) would not have been contravened by the
Borrower if such acquisition had occurred prior to the end of
the last Fiscal Quarter preceding the date of such disposition.
(d) The Borrower may from time to time deliver a Notice of Amendment
of Unrestricted Subsidiaries to the Agent which, in respect of any
change to Schedule L, shall be effective as of the date of the giving
of such notice provided that, after taking into account the overall
effect of any transaction giving rise to the change (including for
certainty, accounting for any concurrent repayment of Senior Debt)
subsection 8.1(l) would not have been contravened and no Event of
Default shall occur as a result of such designation by the Borrower if
such change had occurred prior to the end of the last Fiscal Quarter
preceding the date of such change.
(e) If, at the end of any Fiscal Quarter, any Subsidiary, which was
qualified as a Restricted Subsidiary at the end of the immediately
preceding Fiscal Quarter pursuant to the exceptions set forth in
subparagraphs (ii)(C) and (D) of the definition of "Unrestricted
Subsidiaries", no longer qualifies as a Restricted Subsidiary because
of a reduction in the ratings assigned to the Senior Debt of the
Borrower, then such Subsidiary shall continue to be treated as a
Restricted Subsidiary unless it fails to qualify as a Restricted
Subsidiary pursuant to the exceptions set forth in subparagraphs
(ii)(C) and (D) of the definition of Unrestricted Subsidiaries at the
end of the next Fiscal Quarter and shall thereafter cease to be treated
as a Restricted Subsidiary.
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VIII.4 Certain Requirements in Respect of Mergers, etc.
(a) The Borrower shall not merge, amalgamate, consolidate,
reorganize or enter into a plan of arrangement with any other Person or
become a party to any other transaction whereby all or substantially
all of the property or assets of the Restricted Group may become the
property or assets of another Person, including, in the case of an
amalgamation, of the continuing company resulting therefrom, or whereby
the obligation of the Borrower to pay any amount hereunder would become
subject to novation or assumed or undertaken by any other such Person
or continuing company, unless but may do so if:
(i) no Event of Default, and no event which with the giving
of notice, the passage of time or both would constitute an Event
of Default, exists, and no such event would arise as a result of
such merger, amalgamation, consolidation, reorganization, plan
of arrangement or transaction;
(ii) such other Person or continuing company (herein referred
to as a "Successor") is an incorporated company with limited
liability and incorporated in Canada or a province thereof or an
Eligible Partnership;
(iii) the Successor shall execute, prior to or
contemporaneously with the consummation of such transaction, an
agreement supplemental hereto and such other instruments, if
any, as are satisfactory to the Majority Lenders, acting
reasonably, and in the opinion of counsel to the Borrower
approved by the Agent are necessary or advisable to evidence:
(A) the assumption by the Successor of liability for the due and
punctual payment of the principal of and interest and fees on
the Loans and all other amounts payable hereunder; (B) the
covenant of the Successor to pay the same; and (C) the agreement
of the Successor to observe and perform all the terms,
conditions, covenants and obligations of the Borrower under this
Agreement (subject to such changes, in the case of a Successor
that is an Eligible Partnership, as are necessary to reflect
that the Borrower is not a corporation); and
(iv) such transaction shall, to the satisfaction of the
Majority Lenders, acting reasonably, and in the opinion of
counsel to the Borrower approved by the Agent, be upon such
terms as substantially to preserve and not to impair any of the
rights and powers of the Agent or of the Lenders and not to
affect adversely the liability of the Lenders for any present or
future Taxes, or other governmental assessments, charges or
levies of whatsoever nature.
(b) Whenever the conditions of subsection (a) have been duly
observed and performed, the Agent shall execute and deliver the
supplemental agreement provided for in paragraph 8.4(a)(iii) on behalf
of each of the parties hereto (other than the Borrower) and thereupon:
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(i) the Successor shall possess and from time to time may
exercise each and every right and power of the Borrower under
this Agreement in the name of the Borrower or otherwise and any
act or proceeding by any provision of this Agreement required to
be done and performed with like force and effect by the like
directors or officers of the Successor; and
(ii) at the request of the Borrower (except, if applicable, as
a partner of an Eligible Partnership), the Borrower shall be
released from its liability and obligations under this Agreement
and the Agent, at the request and at the expense of the
Borrower, shall execute and deliver to the Borrower such
instruments as shall be requisite to evidence such release.
ARTICLE IX
EVENTS OF DEFAULT
IX.1 Events of Default - The occurrence of any one or more of the following
events (each such event being herein referred to as an "Event of Default") shall
constitute a default under this Agreement:
(a) if the Borrower shall fail to pay any principal of, or interest
or fees on, the Loans when the same shall become due and payable
hereunder for a period of two Business Days after notice from the Agent
that such amount is due and payable;
(b) if the Borrower shall fail to perform or comply with any term,
condition, covenant or obligation contained in this Agreement (other
than those specified in subsection 9.1(a)) and, if capable of remedy,
such failure to perform or comply is not remedied within 30 days of
notice from the Agent so to remedy provided that, in the case of such a
failure to comply with subsection 8.1(o) or any applicable
Environmental Laws or Environmental Approvals which is capable of
remedy, there shall not be an Event of Default if the Borrower shall
have commenced the remedy thereof within 30 days of notice from the
Agent so to remedy and shall actively and diligently pursue such remedy
in good faith to completion;
(c) if any representation or warranty made by the Borrower in this
Agreement or in any certificate or other document at any time delivered
hereunder to the Agent shall prove to have been incorrect in any
material respect on and as of the date thereof and, if capable of
remedy, such matter is not remedied within 30 days of notice from the
Agent so to remedy;
(d) if the Borrower shall cease to carry on business;
(e) if proceedings are commenced for the dissolution, liquidation or
winding up of the Borrower or any Restricted Subsidiary (other than a
Non-Material Restricted Subsidiary and
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other than any dissolution, liquidation or winding up of a Restricted
Subsidiary where substantially all of the assets of such Subsidiary are
transferred to another Restricted Subsidiary in connection therewith),
or for the suspension of the business or operations of the Borrower or
any such Restricted Subsidiary (other than a Non-Material Restricted
Subsidiary), unless such proceedings are actively and diligently
contested in good faith on a timely basis;
(f) if the Borrower or any Restricted Subsidiary (other than a
Non-Material Restricted Subsidiary) makes any assignment in bankruptcy
or makes any other assignment for the benefit of creditors, makes any
proposal under the Bankruptcy and Insolvency Act (Canada) or any
comparable law, files a petition or proposal to take advantage of any
act of insolvency, consents to or acquiesces in the appointment of a
trustee, receiver, receiver and manager, interim receiver, custodian,
sequestrator, liquidator or other Person with similar powers of itself
or of all or any substantial portion of its property or assets, or
files a petition or otherwise commences any proceedings seeking any
reorganization, arrangement, composition or readjustment under any
applicable bankruptcy, insolvency, moratorium, reorganization or other
similar law affecting creditors' rights or consents to, or acquiesces
in, the filing of such a petition;
(g) if a trustee, receiver, receiver and manager, interim receiver,
custodian, sequestrator, liquidator or any other Person with similar
powers shall be appointed of the Borrower or any Restricted Subsidiary
(other than a Non-Material Restricted Subsidiary) or of all or any
substantial portion of any of its property or assets, other than a
portion of any of its property or assets where recourse is limited to
such property or assets, a judgment or an order is made by a tribunal
of competent jurisdiction restraining its ability to deal with all or
any substantial portion of its property and assets or a judgment or
order is made by a tribunal of competent jurisdiction approving any
reorganization, arrangement, composition or readjustment under any
applicable bankruptcy, insolvency, moratorium, reorganization or other
similar law affecting creditors' rights or the Borrower or any
Restricted Subsidiary is adjudged bankrupt and such appointment,
judgment or order is not vacated, stayed or set aside within 30 days of
the date thereof;
(h) if a writ of execution, distress, attachment or similar process
is issued or levied against all or a substantial portion of the
property or assets of the Borrower or any Restricted Subsidiary in
connection with any default by it in the payment of any amount in
excess of U.S. $25,000,000, or the Equivalent Amount thereof in another
currency as determined by the Agent, unless the writ is withdrawn,
released, vacated or stayed within 30 days, or a judgment or order
shall be rendered against the Borrower or any Restricted Subsidiary by
a court of competent jurisdiction with respect to such default and such
judgment or order shall not be satisfied (or adequate security provided
therefor) in accordance with its terms and continue unstayed and in
effect for 30 days;
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(i) if an event of default, under any indenture, agreement or
instrument under which the Borrower or any Restricted Subsidiary has at
the date of this Agreement or shall hereafter have Funded Debt
(excluding indebtedness in respect of which recourse to the Borrower
and Restricted Subsidiaries is limited to securities of an Unrestricted
Subsidiary or specified assets of the Borrower and Restricted
Subsidiaries held thereby) in excess of U.S. $25,000,000, or the
Equivalent Amount thereof in another currency as determined by the
Agent, shall occur and be continuing (and all grace periods have
expired) and as a result thereof any such indebtedness shall have been
lawfully accelerated or shall lawfully be or become due and payable
prior to the date on which the same would otherwise have become due and
payable;
(j) any order by a Government Authority is issued, or a judgment or
order rendered, against the Borrower or Restricted Subsidiary alleging
or in respect of a violation of any Environmental Law or Environmental
Approval for an amount in excess of U.S.$25,000,000, or the Equivalent
Amount thereof in another currency as determined by the Agent, and such
order or judgment shall not be satisfied (or adequate security provided
therefor) in accordance with its terms and continue unstayed and in
effect for 30 days;
(k) if all or a substantial part of the property or assets of the
Restricted Group shall be expropriated, whether for full or partial
consideration; or
(l) if a Change of Control occurs.
IX.2 Termination and Acceleration -- Upon the occurrence of an Event of
Default, the Agent shall at the request, or may with the consent, of the
Majority Lenders, by one or more notices to the Borrower do any or all of the
following:
(a) terminate the obligations of the Lenders including, without
limitation, the obligation of the Lenders to advance or allow any
further Drawdowns hereunder;
(b) declare all or any part of the principal amount of the Loans,
all interest accrued thereon and all fees and other amounts required to
be paid by the Borrower hereunder, to be immediately due and payable
without the necessity of presentment for payment, protest, notice of
non-payment or notice of protest (all of which are hereby expressly
waived);
(c) require the Borrower to pay to the Lenders an amount equal to
the aggregate face amount of all outstanding Bankers' Acceptances,
which amount shall be held by the Lenders as cash collateral in an
interest-bearing account, with interest at the Agent's prevailing rate
for similar deposits, until such Bankers' Acceptances mature and shall
be applied by the Lenders to satisfy such maturing Bankers'
Acceptances;
(d) require the Borrower to pay to the Agent an amount equal to the
maximum amount payable by the Lenders under all outstanding Letters of
Credit which amount shall be held
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by the Agent as cash collateral in an account bearing interest at the
Agent's prevailing rate for similar deposits, to be applied by the
Agent to satisfy any payments which the Lenders may have to make under
Letters of Credit; and
(e) proceed to exercise any and all rights hereunder or under any
other document or instrument executed pursuant to this Agreement.
IX.3 Remedies Cumulative and Waivers -- For greater certainty, it is
expressly understood and agreed that the respective rights and remedies of the
Lenders hereunder or under any other document or instrument executed pursuant to
this Agreement are cumulative and are in addition to and not in substitution for
any rights or remedies provided by law or by equity; and any single or partial
exercise by the Lenders of any right of remedy for a default or breach of any
term, covenant, condition or agreement contained in this Agreement or other
document or instrument executed pursuant to this Agreement shall not be deemed
to be a waiver of or to alter, affect or prejudice any other right or remedy or
other rights or remedies to which the Lenders may be lawfully entitled for such
default or breach. Any waiver by the Lenders of the strict observance,
performance or compliance with any term, covenant, condition or agreement herein
contained and any indulgence granted either expressly or by course of conduct,
by the Lenders shall be effective only in the specific instance and for the
purpose for which it was given and shall be deemed not to be a waiver of any
rights and remedies of the Lenders under this Agreement or other document or
instrument executed pursuant to this Agreement as a result of any other default
or breach hereunder or thereunder.
IX.4 Setoff -- Any deposits or other sums credited by or due from the
Lenders to the Borrower and any securities or other property of the Borrower in
the possession of the Lenders or Agent may be, unless otherwise agreed, applied
to or set off against the payment of the obligations of the Borrower hereunder
and any or all other Liabilities, direct or indirect, absolute or contingent,
due or to become due, now existing or hereafter arising, of the Borrower to the
Lenders or Agent at any time after the occurrence and during the continuance of
any Event of Default, in each case for the benefit of each of the Lenders
rateably in accordance with the portion of the Loans outstanding to such Lender.
ARTICLE X
THE AGENT AND THE LENDERS
X.1 The Agent -- Each Lender hereby irrevocably appoints the Agent to act
as its agent in connection with this Agreement and any matter contemplated
hereunder, and irrevocably authorizes the Agent to exercise such rights, powers
and discretions as are delegated to the Agent pursuant to this Agreement
together with all such rights, powers and discretions as are incidental hereto
or thereto. The Agent shall have only those duties and responsibilities which
are expressly specified in this Agreement, and it may perform such duties by or
through its agents or employees.
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This Agreement shall not place the Agent under any fiduciary duties in respect
of any Lender. As to any matters not expressly provided for by this Agreement,
the Agent shall not be required by the Lenders to exercise any discretion or
take any action, but shall be required to act or to refrain from acting (and
shall be fully protected with respect to the Lenders in so acting or refraining
from acting) upon the instructions of the Majority Lenders, and such
instructions shall be binding upon all Lenders; provided, however, that the
Agent shall not be required to take any action which exposes the Agent to
liability or which is contrary to this Agreement or Applicable Law.
X.2 The Agent's Responsibility --
(a) The Agent may assume that:
(i) any representation, warranty or statement made by the
Borrower in or in connection with any of this Agreement
(including, without limitation, in any Drawdown Notice) is true
and correct;
(ii) no Event of Default has occurred;
(iii) the Borrower is not in breach of or in default under, its
obligations under this Agreement; and
(iv) there has been no assignment or transfer by any means by
any of the Lenders of their rights hereunder unless and until
the Agent receives a Bank Transfer Agreement substantially in
the form set forth in Schedule G whereby the assignee is bound
hereby as it would have been if it had been an original Lender
party hereto;
and the Agent may also:
(b) unless it has actual knowledge or actual notice to the contrary,
assume that each Lender's address is that identified with its signature
in Schedule A until the Agent has received from such Lender a notice
designating some other office of such Lender as its address and act
upon any such notice until the same is superseded by a further such
notice;
(c) engage and pay for the advice or services of any legal counsel,
independent public accountants or other experts whose advice or
services may to it seem necessary, expedient or desirable and rely upon
any advice so obtained and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice
of such counsel, accountants or experts;
(d) unless it has actual knowledge or actual notice to the contrary,
rely as to matters of fact which might reasonably be expected to be
within the knowledge of any Person upon a statement signed by or on
behalf of the such Person;
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(e) unless it has actual knowledge or actual notice to the contrary,
rely upon any communication or document believed by it to be genuine;
(f) refrain from exercising any right, power or discretion vested in
it under this Agreement unless and until instructed by the Majority
Lenders (or Lenders if instruction of the Lenders is specifically
required by the terms of this Agreement) as to whether or not such
right, power or discretion is to be exercised and, if it is to be
exercised, as to the manner in which it should be exercised;
(g) refrain from exercising any right, power or discretion vested in
it which would or might in its opinion be contrary to any law of any
jurisdiction or any directive or otherwise render it liable to any
Person, and may do anything which is in its opinion necessary to comply
with any such law or directive;
(h) retain for its own benefit, and without liability to account
for, any fee or other sum receivable by it for its own account;
(i) accept deposits from, lend money to, provide any advisory or
other services to or engage in any kind of banking or other business
with any Party (including any Subsidiary thereof); and
(j) refrain from acting in accordance with any instructions of the
Majority Lenders to begin any legal action or proceeding arising out of
or in connection with any of this Agreement or any Bankers' Acceptance
or Letter of Credit, until it shall have received such security as it
may require (whether by way of payment in advance or otherwise) against
all costs, claims, expenses (including legal fees), obligations,
losses, damages, penalties, actions, judgments, suits, disbursements
and liabilities of any kind or nature whatsoever which it will or may
expend or incur in complying with such instruction.
X.3 The Agent's Duties -- The Agent shall:
(a) promptly upon receipt thereof, inform each Lender of the
contents of any notice, document, request or other information received
by it in its capacity as Agent hereunder from the Borrower excepting
therefrom information and notices relating solely to the role of Agent
hereunder;
(b) promptly notify each Lender of the occurrence of any Event of
Default of which the Agent has written notice from the Borrower;
(c) each time the Borrower requests the prior written consent of the
Lenders or Majority Lenders, use its best efforts to obtain and
communicate to the Borrower the response of the Lenders or Majority
Lenders, as the case may be, in a reasonable and timely manner having
due regard to the nature and circumstances of the request;
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(d) subject to the foregoing provisions of this Section and
compliance with this Agreement, act in accordance with any instructions
given to it by the Lenders or, where permitted, the Majority Lenders;
and
(e) if so instructed by the Lenders, or the Majority Lenders, as
applicable, refrain from exercising any right, power or discretion
vested in it under this Agreement or any document incidental hereto.
X.4 Protection of Agent -- Notwithstanding anything to the contrary
expressed or implied herein, the Agent shall not:
(a) be bound to enquire as to:
(i) whether any representation, warranty or statement made by
the Borrower in or in connection with this Agreement or any
document incidental hereto is true or correct;
(ii) the occurrence or otherwise of any Event of Default;
(iii) the performance or observance by the Borrower of its
obligations under this Agreement or any document incidental
hereto or to inspect the property or assets (including the books
and records) of the Borrower or any of its Subsidiaries;
(iv) any breach of or default by the Borrower of or under its
obligations under this Agreement; or
(v) the use or application by the Borrower of any of the
proceeds of the Facility;
(b) be bound to account to any Lender for any sum or the profit
element of any sum received by it for its own account;
(c) be bound to disclose to any Person any information relating to
the Borrower if such disclosure would or might in its opinion
constitute a breach of any law or regulation or be otherwise actionable
at the suit of any Person; or
(d) accept any responsibility for the accuracy and/or completeness
of any information supplied by others in connection herewith or for the
legality, validity, effectiveness, adequacy or enforceability of this
Agreement, any Bankers' Acceptance, any Letter of Credit or any
document incidental hereto or thereto and the Agent shall not be under
any liability or responsibility as Agent to any Lender as a result of
taking or omitting to take any action in relation to the Agreement, any
Bankers' Acceptance, any Letter of Credit or any document incidental
hereto or thereto save in the case of gross negligence or wilful
misconduct, and each of the Lenders and the Borrower agree that it will
not assert or seek to assert against any
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director, officer, employee or agent of the Agent any claim it might
have against any of them in respect of the matters referred to in this
Section.
X.5 Indemnification of Agent -- Each of the Lenders agrees to indemnify the
Agent (to the extent not reimbursed by the Borrower), ratably according to their
respective Commitment Amounts, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Agent in any way relating to or arising
out of this Agreement or any action taken or omitted by the Agent under this
Agreement, or any of the transactions contemplated hereby, provided that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's own negligence or wilful misconduct. Without
limitation of the foregoing, each Lender agrees to reimburse the Agent promptly
upon demand for its ratable share of any out-of-pocket expenses (including
counsel fees) incurred by such Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement or any of
the transactions contemplated hereby to the extent that the Agent is not
reimbursed for the expenses by the Borrower.
X.6 Termination or Resignation of an Agent
(a) Notwithstanding the irrevocable appointment of the Agent, the
Majority Lenders may (with the consent of the Borrower, not to be
unreasonably withheld), upon giving the Agent 90 days' prior written
notice to such effect, terminate the Agent's appointment hereunder
provided that a successor Agent has been appointed at or prior to the
expiry of such notice.
(b) The Agent may resign its appointment hereunder at any time
without assigning any reason therefor upon giving 15 Business Day's
prior written notice to such effect to each of the other parties
hereto. Such resignation shall not be effective until a successor Agent
has been appointed.
(c) In the event of any such termination or resignation, the
Majority Lenders shall appoint a successor Agent who shall be a Lender
(who consents to such appointment) acceptable to the Borrower, acting
reasonably. The retiring Agent shall deliver copies of the accounts to
such successor and the retiring Agent shall be discharged from any
further obligation hereunder accruing thereafter but shall remain
entitled to the benefit of the provisions of this Section and the
Agent's successor and each of the other parties hereto shall have the
same rights and obligations among themselves as they would have had if
such successor originally had been a Party hereto as Agent.
(d) If no successor Agent has been appointed pursuant to the
subsections above by the expiry of the required period of prior notice
after the date such notice of resignation was given by the resigning
Agent, the resigning Agent's resignation shall become effective and
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such of the Lenders as is designated by (and consents to such
designation) the Borrower shall thereafter perform all the duties of
the resigning Agent hereunder until such time, if any, as the Majority
Lenders appoint a successor Agent as provided above.
X.7 Rights of the Agent as Lender -- With respect to its Commitment, the
Advances made by it, any Bankers' Acceptances accepted and purchased by it and
any Letters of Credit issued by it, the Agent shall have the same rights, powers
and obligations under this Agreement as any other Lender and may exercise the
same as though it were not the Agent; and the term "Lender" or "Lenders" shall,
unless otherwise expressly indicated, include any Person serving as an Agent in
its individual capacity. Any Person serving as an Agent and its affiliates may
accept deposits from, lend money to, act as trustee under indentures of, and
generally engage in any kind of business with, the Borrower and any Person who
may do business with or own securities of the Borrower, all as if such Person
serving as the Agent were not the Agent and without any duty to account therefor
to the Lenders.
X.8 Financial Information Concerning Gulf -- Subject to subsection 10.3(a),
the Agent shall not have any duty or responsibility either initially or on a
continuing basis to provide any Lender with any credit or other information with
respect to the financial condition and affairs of Gulf.
X.9 Knowledge of Financial Situation of the Borrower -- Each Lender has
itself been, and will continue to be, solely responsible for making its own
independent appraisal of and investigations into the financial condition,
creditworthiness, condition, affairs, status and nature of the Borrower.
Accordingly, each Lender confirms with the Agent that it has not relied, and
will not hereafter rely, on the Agent (i) to check or enquire on its behalf into
the adequacy, accuracy or completeness of any information provided by the
Borrower or any other Person under or in connection with this Agreement or the
transactions hereby contemplated (whether or not such information has been or is
hereafter distributed to such Lender by the Agent), or (ii) to assess to keep
under review on its behalf the financial condition, creditworthiness, condition,
affairs, status or nature of the Borrower. The Agent shall not be responsible to
any Lender for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectability, priority or sufficiency of this
Agreement or the financial condition of the Borrower or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement, or the financial condition of the
Borrower or the existence or possible existence of any Event of Default or event
of which would constitute an Event of Default with the giving of notice, the
passing of time, or both. Each Lender acknowledges that a copy of this Agreement
has been made available to it for review and each Lender acknowledges that it is
satisfied with the form and substance of this Agreement. Each Lender hereby
covenants and agrees that it will not make any arrangements with the Borrower
for the satisfaction by the Borrower of any Advances without the consent of all
the other Lenders.
X.10 Legal Proceedings
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(a) Each of the Lenders hereby acknowledges that, to the extent
permitted by Applicable Law, the remedies provided hereunder to the
Lenders are for the benefit of the Lenders collectively and acting
together and not severally and further acknowledges that its rights
hereunder are to be exercised not severally, but collectively by the
Agent upon the decision of the Majority Lenders. Notwithstanding any of
the provisions contained herein, each of the Lenders hereby covenants
and agrees that it shall not be entitled to take any legal proceedings
with respect to this Agreement, any Bankers' Acceptance or any Letter
of Credit, but that any such legal proceeding shall be taken only by
the Agent with the prior written agreement of the Majority Lenders
provided that notwithstanding the foregoing, in the absence of
instructions from the Lenders and where in the sole opinion of the
Agent the exigencies of the situation warrant such action, the Agent
may without notice to or consent of the Lenders take such action on
behalf of the Lenders as it deems appropriate or desirable in the
interests of the Lenders and provided that the Agent shall not be
obligated to take any legal proceedings against the Borrower or any
other Person for the recovery of any amount due under this Agreement or
under any of the Bankers' Acceptances or Letters of Credit. Upon any
such written consent being given by the Majority Lenders, each Lender
shall cooperate fully with the Agent to the extent requested by the
Agent in the collective realization. Each Lender shall do all acts and
things to make, execute and deliver all agreements and other
instrument, including, without limitation, any instruments necessary to
effect any registrations, so as to fully carry out the intent and
purpose of this Section.
(b) Each of the Lenders shall not seek, take, accept or receive any
security for any of the obligations and liabilities of the Borrower
hereunder or under any other document, instrument, writing or agreement
ancillary hereto other than such security as is provided hereunder or
thereunder and shall not enter into any agreement with any of the
parties hereto or thereto relating in any manner whatsoever to this
Agreement (including, without limitation, any Bankers' Acceptances
issued and purchased hereunder or any Letters of Credit issued
hereunder), unless all of the Lenders shall at the same time obtain the
benefit of any such security or agreement.
X.11 Capacity as Agent -- In performing its functions and duties under this
Agreement, the Agent shall act solely as the agent of the Lenders and shall not
assume, and shall not be deemed to have assumed, any obligation as agent or
trustee for the Borrower or any other Person. The Agent shall not be under any
liability or responsibility of any kind to the Borrower, the Lenders or to any
other Person arising out of or in relation to any failure or delay in
performance or breach by any other Lender or Lenders or, as the case may be, the
Borrower or any other Person pursuant to or in any way in connection with this
Agreement.
ARTICLE XI
PAYMENT
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XI.1 Payments to Agent
(a) All payments in Canadian Dollars to be made by the Borrower in
connection with this Agreement or with a Bankers' Acceptance shall be
made by the Borrower in funds having same day value to the Agent, for
its own account or for the account of the Lenders, at its Toronto Main
Branch, 1269 - 332, in the name of International Loan Operations
(Central, Toronto) - the Gulf Agency Account, or at any other office or
account in Toronto designated by the Agent. Any such payment shall be
made on the date upon which such payment is due, in accordance with the
terms hereof, no later than 11:00 a.m. (Calgary time). Any such payment
shall be a good discharge, to the Borrower, for such payment and, if
any such payment is for the account of the Lenders, the Agent shall
hold the amount so paid "in trust" for the Lenders until distributed to
them in accordance with this Agreement.
(b) All payments in U.S. Dollars to be made by the Borrower in
connection with this Agreement shall be made by the Borrower in
immediately available funds to the Agent, for its own account or for
the account of the Lenders, at the branch referred to in subsection
11.1(a), for Transit 2 Account No. 4637-654 in the name of
International Loan Operations (Central, Toronto) - the Gulf Agency
Account, or at any other office or account in Toronto designated by the
Agent. Any such payment shall be made on the date upon which such
payment is due, in accordance with the terms hereof, no later than
10:00 a.m. (Calgary time). Any such payment shall be a good discharge,
to the Borrower for such payment and, if such payment is for the
account of the Lenders, the Agent shall hold the amount so paid "in
trust" for the Lenders until distributed to them in accordance with
this Agreement.
XI.2 Payments by Lenders to Agent
(a) All payments in Canadian Dollars to be made by any Lender to the
Agent in connection with Advances of the Borrower shall be made in
immediately available funds to the Agent, for the Borrower's account
(unless otherwise specified), at the branch, office or account
mentioned in or designated under subsection 11.1(a) and no later than
the time designated therein (unless another time is specified therefor
elsewhere in this Agreement).
(b) All payments in U.S. Dollars to be made by any Lender to the
Agent in connection with Advances of the Borrower shall be made in
immediately available funds to the Agent, for the Borrower's account
(unless otherwise specified), at the branch, office or account
mentioned in or designated under subsection 11.1(b) and no later than
the time designated therein (unless another time is specified therefor
elsewhere in this Agreement).
XI.3 Payments by Agent to Borrower -- Any payment received by the Agent for
the account of the Borrower shall be paid in funds having same value to the
Borrower by the Agent on the date of receipt, or if such date is not a Business
Day, on the next Business Day, to such account(s) as the Borrower may designate.
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XI.4 No Set-Off or Counterclaim by Borrower -- All payments by the Borrower
shall be made free and clear of and without any deduction for or on account of
any set-off or counterclaim.
XI.5 Non-Receipt by Agent -- Subject to Section 2.7, where a sum is to be
paid hereunder to the Agent for the account of another Party hereto, the Agent
shall not be obliged to make the same available to that other Party hereto until
it has been able to establish that it has actually received such sum, but if it
does pay out a sum and it proves to be the case that it had not actually
received the sum it paid out, then the Party hereto to whom such sum was so made
available shall, on request, ensure that the amount is refunded to the Agent and
shall, on demand, indemnify the Agent against any cost or loss it may have
suffered or incurred by reason of its having paid out such sum prior to its
having received such sum.
XI.6 When Due Date Not Specified -- Whenever this Agreement does not provide
a date when any amount payable hereunder shall be due and payable, such amount
shall be due and payable on the third Business Day following written notice or
demand for payment thereof by the Agent or any Lender, save that nothing
hereinbefore provided shall in any way affect or alter the rights and remedies
available to the Agent and any Lender under Article IX.
XI.7 Agent's Authority to Debit -- In respect of all amounts payable by the
Borrower under this Agreement as interest, the Borrower hereby authorizes and
instructs the Agent (provided that the Agent shall provide not less than 4 hours
(occurring between 7:30 a.m. and 4:30 p.m. (Calgary time) on a Business Day)
prior notice to the Borrower of the amount thereof) to debit, from time to time
when such amounts are due and payable, the account or accounts designated
pursuant to Section 11.1 or Section 11.3, as applicable, for the purpose of
satisfying payment thereof.
ARTICLE XII
GENERAL
XII.1 Costs and Expenses -- The Borrower shall pay promptly all reasonable
costs and expenses incurred by the Agent on its own behalf or on behalf of the
Lenders in connection with preparation, printing, execution and delivery of each
of this Agreement and the other documents to be delivered hereunder, whether or
not any Drawdown has been made hereunder, including, without limitation, the
fees and out-of-pocket expenses of Agent's counsel with respect thereto and with
respect to advising each of the Agent on its own behalf or on behalf of the
Lenders as to the rights and responsibilities hereunder and the other documents
delivered hereunder. The Borrower further agrees to pay all costs and expenses
incurred by the Agent on its own behalf or on behalf of the Lenders (including
fees and expenses of counsel, accountants and other experts), in connection with
any waiver or consent under, or amendment to, this Agreement, or the
preservation or enforcement of rights of the Agent and the Lenders under this
Agreement and other documents delivered hereunder including, without limitation,
all reasonable costs and expenses sustained by each of the
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Agent and the Lenders as a result of any failure by the Borrower to perform or
observe its obligations contained in any of such documents.
XII.2 Indemnifications by the Borrower --
(a) Failure to Complete Drawdown -- In addition to any liability of
the Borrower to the Agent or the Lenders under any other provision of
this Agreement, the Borrower shall indemnify each of the Agent and the
Lenders and hold each of them harmless against any reasonable loss
(excluding loss of profit) or expense incurred thereby as a result of
any failure by the Borrower to fulfil any of its obligations hereunder
including, without limitation, any cost or expense incurred by reason
of the liquidation or re-employment in whole or in part of deposits or
other funds required by the Agent to fund any Drawdown as a result of:
(i) the Borrower's failure to complete a Drawdown or to make
any payment, repayment or prepayment on the date required
hereunder or specified by it in any notice given hereunder;
(ii) the Borrower's failure to pay any other amount, including
without limitation any interest or fee, due hereunder on its due
date; or
(iii) the Borrower's failure to give any notice required to be
given by it to the Agent or a Lender hereunder.
(b) General Indemnity -- In addition to any liability of the
Borrower to the Agent or the Lenders under any other provisions of this
Agreement, the Borrower shall, to the fullest extent permitted by
Applicable Law, indemnify each of the Agent and the Lenders, and their
respective officers, directors, employees, representatives,
shareholders, agents and affiliates (as used in this Section each an
"Indemnified Party") from, hold each of them harmless against and
promptly upon written demand therefor pay or reimburse each of them
for, any and all actions, suits, proceedings (including any
investigations, litigation or inquiries), claims, demands, causes of
action, costs, losses (excluding loss of profit), liabilities, damages
or expense of any kind or nature whatsoever but excluding those based
on gross negligence or wilful misconduct of such Indemnified Party (the
"Indemnity Matters") which may be incurred by or asserted against or
involve any of them (whether or not any of them is designated a party
thereto) as a result of: (i) any actual or proposed use by the Borrower
of the proceeds of any Advance; (ii) any transaction in which any
proceeds of all or any part of a Drawdown is applied; or (iii) any
Event of Default, including, without limitation, the reasonable fees
and disbursements of counsel and all other expenses incurred in
connection with investigating, defending or preparing to defend any
such action, suit, proceeding (including any investigations, litigation
or inquiries), claim, demand or cause of action; provided, that prior
to the occurrence of an Event of Default, the Borrower shall only be
obligated to pay the reasonable fees and disbursements of counsel
engaged by the Agent to
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represent all of the Agent and the Lenders. Subject to the proviso in
the preceding sentence, the Borrower shall be obligated to pay or
reimburse each Indemnified Party for all out-of-pocket costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses) incurred by such Indemnified Party in the defense of any
claims arising out of any Indemnity Matter at the time such costs and
expenses are incurred and such Indemnified Party has given the Borrower
written notice thereof.
(c) Contribution -- If and to the extent that the foregoing
indemnities may be unenforceable for any reason, the Borrower hereby
agrees to make the maximum contribution to the payment and satisfaction
of each of the indemnified liabilities described which is permissible
under Applicable Law.
(d) Survival of Indemnity -- The foregoing indemnities and the
indemnity set forth in Section 8.2 shall survive the termination of
this Agreement, the consummation of the transactions contemplated by
this Agreement, the repayment of the Facility, the invalidity or
unenforceability of any term or provision of this Agreement, or any
other document, any investigation made on behalf of the Agents or the
Lenders and the content or accuracy of any representation or warranty
made by the Borrower or any Subsidiary under this Agreement.
XII.3 Funds -- Each amount advanced, made available, disbursed or paid
hereunder shall be advanced, made available, disbursed or paid, as the case may
be, in immediately available funds or, after notice from the Agent, in such
other form of funds as may from time to time be customarily used in Toronto,
Canada in the settlement of banking transactions similar to the banking
transactions required to give effect to the provisions of this Agreement on the
day such advance, disbursement or payment is to be made.
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- 73 -
XII.4 Notice -- Any demand, notice or communication to be made or given
hereunder shall be in writing, except as otherwise expressly permitted or
required under this Agreement, and may be made or given by personal delivery or
by facsimile machine addressed to the respective Parties as follows:
to the Borrower:
Gulf Canada Resources Limited
▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Treasury and Law
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
Gulf Canada Resources Limited
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Treasurer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
to the Agent:
Bank of Montreal
Loan Agency Services
After Sales
22nd Floor
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Manager, Loan Agency Services
Tel No. (▇▇▇) ▇▇▇-▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
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to the Lenders as set forth in Schedule A
or to such other delivery or facsimile machine address as any Party may from
time to time notify the others in accordance with this Section. Any demand,
notice or communication made or given by personal delivery shall be conclusively
deemed to have been given on the day of actual delivery thereof, or, if given by
facsimile transmission, on the first Business Day following the transmittal
thereof.
XII.5 Governing Law -- This Agreement shall be conclusively deemed to be a
contract made under, and shall for all purposes be governed by and construed in
accordance with, the laws of the Province of Alberta, Canada, without prejudice
to or limitation of any other rights or remedies available under the laws of any
jurisdiction where property or assets of the Borrower may be situate.
XII.6 Judgment Currency -- If for the purposes of obtaining judgment in any
court in any jurisdiction with respect to this Agreement it becomes necessary to
convert into the currency of such jurisdiction (herein called the "Judgment
Currency") any amount due hereunder in any currency other than the Judgment
Currency, then such conversion shall be made at the exchange rate (which shall,
in respect of any conversion of U.S. Dollars to Cdn. Dollars or vice versa, be
the Exchange Rate) prevailing on the Business Day before the day on which
judgment is given. In the event that there is a change in such exchange rate
prevailing between the Business Day before the day on which the judgment is
given and the date of payment of the amount due, the Borrower shall, on the date
of payment, pay such additional or lesser amounts (if any) as may be necessary
to ensure that the amount paid on such date is the amount in the Judgment
Currency which when converted at such exchange rate prevailing on the date of
payment is the amount then due under this Agreement in such other currency. Any
additional amount due from the Borrower under this Section shall be due as a
separate debt and shall not be affected by judgment being obtained for any other
sums due under or in respect of this Agreement.
XII.7 Amendments, Etc. -- No amendment or waiver of any provision of this
Agreement, nor consent to any departure by the Borrower therefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Majority Lenders, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, do any of the following: (a) increase the Commitments
or the Commitment Amounts of the Lenders or subject the Lenders to any
obligations in addition to those set out in this Agreement; (b) reduce the
principal of any outstanding Loans, or the rate of interest or fees on any of
the Loans or any fees or other amounts payable hereunder; (c) postpone any date
fixed for any payment of principal of, or interest or fees in respect of, any
Loans or any fees or other amounts payable hereunder; (d) change the percentage
of the Commitments or of the aggregate unpaid principal amount of the Loans
which shall be required for the Lenders to take any action under this Agreement
(including, without limitation, the definition of Majority Lenders); (e) change
any currency or mode of calculation or computation of any payment required
hereunder; (f) amend this Section 12.7 or subsection 8.1(l); or (g) amend,
release or waive or consent to any departure from any matter stated
80
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to require approval or consent of all the Lenders. Except as otherwise
specifically provided herein, the Lenders shall use reasonable good faith
efforts to respond to any written request by the Borrower for permission to take
any action which is or may be prohibited under this Section within 20 Business
Days of receipt thereof.
XII.8 Severability -- Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall not invalidate the remaining provisions
of this Agreement and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provisions in any
other jurisdiction.
XII.9 Whole Agreement -- This Agreement constitutes the whole and entire
agreement between the Parties relating to the subject matter of this Agreement,
and cancels and supersedes any prior agreements, undertakings, declarations,
commitments and representations, written or oral, in respect thereof.
XII.10 Binding Effect; Assignments
(a) Successors and Assigns -- This Agreement shall become effective
on the date hereof and thereafter shall be binding upon and inure to
the benefit of and be enforceable by the Borrower, the Agent and each
Lender and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights hereunder or any
interest herein except to a Successor pursuant to Section 8.4. No
Lender may participate, assign or sell any of its rights or obligations
hereunder except as required by operation of law in connection with the
merger, consolidation or dissolution of any Lender or as provided in
this Section.
(b) Assignments -- Each Lender may, at its own cost, in accordance
with Applicable Law and with the consent of the Borrower and the Agent
(which consent shall not be unreasonably withheld by either of them)
assign to any Eligible Lender, all or any part of the Loans owing to
such Lender and any such Lender's continuing obligations with respect
to this Agreement (including any Bankers' Acceptances), and all or any
part of such Lender's Commitment (which assignment shall be of a
constant, and not of a varying, percentage of all of the assigning
Lender's Advances and Commitment) and to the extent of any such
assignment the assignee shall, to the fullest extent permitted by law,
have the same rights and benefits hereunder and the same continuing
obligations as it would have if it were such Lender hereunder;
provided, however that (i) the Agent and the Borrower shall be entitled
to continue to deal solely and directly with the assignor Lender in
connection with the interests so assigned unless and until such
assignee becomes a Lender pursuant to a Bank Transfer Agreement
substantially in the form set forth in Schedule G; (ii) any transfer of
less than all of any Lender's Advances and Commitment shall be in an
aggregate amount not less than U.S. $10,000,000, and (iii) immediately
after any transfer of less than all of a Lender's rights in respect of
the Loans owing to such Lender and all of its Commitment such assignor
Lender shall retain Loans and Commitment of not less than U.S.
$10,000,000 and provided further that no assignee or transferee shall
be entitled to receive pursuant to such assignment
81
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or transfer more than the amounts which would otherwise have been
payable by the Borrower to such Lender, had such assignment or transfer
not been made, in respect of the rights, benefits and/or obligations so
assigned or transferred. For greater certainty, the Borrower shall not
be obligated to pay to any such assignee or transferee any amount(s)
pursuant to this Agreement which is (are) greater than the amount(s),
if any, which the Borrower would otherwise have been obligated to pay
to the Lender (whose rights, benefits and/or obligations have been so
assigned to such assignee or transferee) had such assignment or
transfer not have been made. Upon (1) such execution of such Bank
Transfer Agreement, (2) delivery of an executed copy thereof to each of
the Borrower and the Agent, (3) payment of a recording fee in the
amount of U.S. $2,500 by such transferor Lender or assignee Lender to
the Agent, and (4) payment by such assignee Lender to such transferor
Lender of an amount equal to the purchase price agreed between such
transferor Lender and such assignee Lender to the Agent, such
transferor Lender shall be released from any further obligations
hereunder accruing thereafter to the extent of such assignment and such
assignee Lender shall for all purposes be a Lender party to this
Agreement and shall have all the rights and obligations of a Lender
under this Agreement to the same extent as if it were an original Party
hereto, and no further consent or action by the Borrower, the Lenders
or the Agent shall be required. Such Bank Transfer Agreement shall be
deemed to amend this Agreement and the Agent shall amend Schedule A
hereto, to the extent, and only to the extent, necessary to reflect the
addition of such assignee Lender as a Lender and the resulting
adjustment of the Commitments arising from the purchase by such
assignee Lender of all or a portion of the Advances and Commitment of
such transferor Lender.
(c) No Lender may make any such assignment or transfer, or take any
action or steps to attempt to do so, until 90 days after the Effective
Date.
XII.11 Participation -- With the approval of the Borrower, not to be
unreasonably withheld, any Lender may at any time sell to one or more financial
institutions (each, a "Participant") participating interests in any of the
Loans, Commitments, or other interests of such Lender hereunder; provided,
however, that:
(a) no participation contemplated in this Section 12.11 shall
relieve such Lender from its Commitments or its other obligations
hereunder or under any other agreement or document contemplated herein;
(b) such Lender shall remain solely responsible for the performance
of its Commitments and such other obligations;
(c) the Borrower and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and each of the other Loan Documents;
82
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(d) each Participant shall, for the purposes of Sections 9.4, 10.10,
12.1 and 12.2 hereof, be deemed to be a Lender hereunder and entitled
to the benefit of the provisions of such Sections to the same extent as
the relevant Lender;
(e) no Participant shall be entitled to direct the voting of the
relevant Lender in respect of any matter requiring the consent, waiver
or approval of the Majority Lenders, but shall be entitled to vote in
respect of any matter requiring the consent, waiver or approval of all
Lenders;
(f) such Participant is an Eligible Lender; and
(g) no participating interest shall be in an aggregate amount of less
than U.S. $10,000,000.
XII.12 Further Assurances -- Each of the Borrower, the Agent and the Lenders
shall promptly cure any default or defect by it in the execution and delivery of
this Agreement. The Borrower, at its expense, shall promptly execute and deliver
to the Agent, upon request by the Agent, all such other and further documents,
agreements, opinions, certificates and other instruments in compliance with, or
accomplishment of its covenants and agreements hereunder or to more fully state
its obligations as set out herein or to make any recording, filing or notice or
obtain any consent, all as may be reasonably necessary or appropriate in
connection therewith.
83
- 78 -
XII.13 Counterparts -- This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
taken together shall be deemed to constitute one and the same instrument, and it
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart.
IN WITNESS WHEREOF the Parties have executed this Agreement as of the
date first written above.
GULF CANADA RESOURCES LIMITED
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President and Controller
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer
BANK OF MONTREAL, AS AGENT
By:
---------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Director
84
SCHEDULE A
LENDERS
NAME AND LENDING OFFICE OF
LENDER COMMITMENT AMOUNT EXECUTION
----------------- ---------
Bank of Montreal U.S. $117,500,000 Bank of Montreal
First Canadian Centre
▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇.▇. By: _______________________
24th Floor Name:
Calgary, Alberta Title:
▇▇▇ ▇▇▇
By: ______________________
Name:
Title:
ABN AMRO Bank Canada U.S. $55,000,000 ABN Amro Bank Canada
▇▇▇▇-▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇. By: ______________________
▇▇▇ ▇▇▇ Name:
Title:
By: ______________________
Name:
Title:
Bank of America Canada ▇.▇. ▇▇▇▇,▇▇▇,▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ By: _____________________
▇▇▇ ▇▇▇ Name:
Title:
By: _____________________
Name:
Title:
Credit Lyonnais Canada U.S. $30,000,000 Credit Lyonnais Canada
▇▇▇-▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇ ▇▇▇▇ By: _____________________
Calgary, Alberta Name:
▇▇▇ ▇▇▇ Title:
By: _____________________
Name:
Title:
Deutsche Bank Canada U.S. $40,000,000 Deutsche Bank Canada
Toronto-Dominion Tower
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ By: _____________________
Toronto, Ontario Name:
▇▇▇ ▇▇▇ Title:
By: _____________________
Name:
Title:
▇▇
- ▇ -
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇ U.S. $17,500,000 Hongkong Bank of Canada
▇▇▇-▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ By: _____________________
▇▇▇ ▇▇▇ Name:
Title:
By: _____________________
Name:
Title:
Royal Bank of Canada U.S. $40,000,000 Royal Bank of Canada
Multinational Banking
▇▇▇▇ ▇▇▇▇▇, ▇▇▇-▇▇▇ ▇▇▇▇▇▇ ▇.▇. By: _____________________
Calgary, Alberta Name:
▇▇▇ ▇▇▇ Title:
By: _____________________
Name:
Title:
The Toronto-Dominion Bank U.S. $100,000,000 The Toronto-Dominion Bank
▇▇▇, ▇▇▇-▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ By: _____________________
▇▇▇ ▇▇▇ Name:
Title:
By: _____________________
Name:
Title:
86
SCHEDULE B
COMPLIANCE CERTIFICATE
TO: [LIST LENDERS] and Bank of Montreal, as Agent
_______________________________________________________________________________
This Certificate of Compliance is given pursuant to the terms of the loan
agreement (the "Loan Agreement") dated September 18, 1998 between the Lenders
named therein, the Agent and Gulf Canada Resources Limited with respect to the
Fiscal Quarter ended ____________________. Unless otherwise defined herein or
the context otherwise requires, all terms used in this Certificate of Compliance
shall have the same meaning herein as in the Loan Agreement.
The undersigned hereby certifies, on behalf of the Borrower, that:
1. the representations and warranties of the undersigned contained
in subsections 7.1(a), (c), (d), (e), (g), (p) and (q) of the Loan
Agreement are true and correct on and as of the date hereof as though
made on and as of the date hereof;
2. all of the covenants of the undersigned contained in the Loan
Agreement together with all of the conditions precedent to a Drawdown
(if applicable) and all other terms and conditions contained in the
Loan Agreement have been fully complied with;
3. no Event of Default has occurred and remains outstanding and to
the best of the knowledge, information and belief of the undersigned
(after due enquiry), no event has occurred and is continuing which with
the passing of time, the giving of notice or both, would constitute an
Event of Default;
4. as of [INSERT DATE OF END OF FISCAL QUARTER]:
(a) Equity of Gulf Cdn. $______________
(b) Tangible Net Worth of Gulf Cdn. $______________
(c) Minimum Tangible Net Worth Cdn. $______________
(d) Total Senior Debt Cdn. $______________
(e) Cumulative Restricted EBITDA Cdn. $______________
(f) Acquisition EBITDA Cdn. $______________
(g) Disposition EBITDA Cdn. $______________
87
(h) Total Senior Debt = _______________
_______________________________________________
( Cumulative )
( Acquisition Disposition )
( Restricted + - )
( EBITDA EBITDA )
( EDITDA )
(i) The Senior Debt rating assigned by:
(i) Standard & Poor's ________________
(ii) ▇▇▇▇▇'▇ ________________
The undersigned hereby certifies, on behalf of the Borrower, that:
1. set forth in Exhibit I hereto are the names of all of the
Unrestricted Subsidiaries (excepting only Subsidiaries of Unrestricted
Subsidiaries) as of [INSERT DATE OF END OF FISCAL QUARTER] together
with, in parenthesis, the paragraph of the definition of "Unrestricted
Subsidiaries" set forth in the Loan Agreement pursuant to which such
Subsidiary constitutes an Unrestricted Subsidiary;
2. set forth in Exhibit II hereto are the names of all of the
Restricted Subsidiaries as of [INSERT DATE OF END OF FISCAL QUARTER];
3. the aggregate of the Transaction Prices for assets acquired from and
including the first day of the Previous Four Fiscal Quarters was
$_________;
4. the aggregate of the Transaction Prices for assets disposed of from
and including the first day of the Previous Four Fiscal Quarters was
$____________.
DATED the -- day of -- , 199--.
GULF CANADA RESOURCES LIMITED
By: __________________________________
Name:
Title:
88
SCHEDULE C
DRAWDOWN NOTICE
TO: Bank of Montreal (the "Agent")
FROM: Gulf Canada Resources Limited (the "Borrower")
________________________________________________________________________________
This Drawdown Notice is given pursuant to the terms of the loan agreement (the
"Loan Agreement") dated September 18, 1998 between the Lenders named therein,
the Agent and the Borrower. Unless otherwise defined herein or the context
otherwise requires, all terms used in this Drawdown Notice shall have the same
meaning herein as in the Loan Agreement.
Notice is hereby given pursuant to the provisions of Section 2.4 of the Loan
Agreement that the Borrower requests a Drawdown or Drawdowns as follows:
Borrowing:
First Drawdown:
Date of Drawdown:
Currency: __________________
Amount: __________________
Drawdown Type: __________________
Libor Interest Period (in months): [IF APPLICABLE]
Bankers' Acceptance Term (in days): [IF APPLICABLE]
Bankers' Acceptance Maturity Date: [IF APPLICABLE]
Conversion:
Pursuant to subsection 2.11 ([DESIGNATE SUBSECTION]) to convert on [INSERT DATE
OF CONVERSION] the amount of $ [SPECIFY CURRENCY] [SPECIFY AMOUNT] of a [SPECIFY
TYPE]
Drawdown into: __________________
Drawdown Type: __________________
Libor Interest Period (in months): [IF APPLICABLE]
Bankers' Acceptance Term (in days): [IF APPLICABLE]
Bankers' Acceptance Maturity Date: [IF APPLICABLE]
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Rollover:
Pursuant to Section 2.12, to rollover on [INSERT DATE OF ROLLOVER] the [LIBOR
DRAWDOWN/BANKERS' ACCEPTANCE] as follows:
Amount: __________________
Currency (if Bankers' Acceptance): __________________
Libor Interest Period (in months): [IF APPLICABLE]
Bankers' Acceptance Term (in days): [IF APPLICABLE]
Bankers' Acceptance Maturity Date: [IF APPLICABLE]
into a [LIBOR DRAWDOWN/BANKERS' ACCEPTANCE] as follows:
Amount: __________________
Currency (if Bankers' Acceptance): __________________
Libor Interest Period (in months): [IF APPLICABLE]
Bankers' Acceptance Term (in days): [IF APPLICABLE]
Bankers' Acceptance Maturity Date: [IF APPLICABLE]
[ADDITIONAL DRAWDOWNS IN SAME FORM AS REQUIRED]
The undersigned hereby certifies, on behalf of the Borrower, that:
1. the representations and warranties of the Borrower contained in subsections
7.1 (a), (c), (d), (e), (g), (p) and (q) of the Loan Agreement are true and
correct on and as of the date of this Drawdown Notice as though made on and as
of the date of this Drawdown Notice;
2. all of the covenants of the Borrower contained in the Loan Agreement together
with all of the conditions precedent to a Drawdown and all other terms and
conditions contained in the Loan Agreement have been fully complied with [EXCEPT
AS SET FORTH IN EXHIBIT I]; and
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3. no Event of Default has occurred and remains outstanding and (other than in
the case of a Conversion or Rollover, provided, that in the case of a Conversion
or Rollover into a Bankers' Acceptance Drawdown or Libor Drawdown, the maturity
date or period shall not extend beyond the earliest date upon which it would
constitute an Event of Default) to the best of the knowledge, information and
belief of the undersigned (after due enquiry), no event has occurred and is
continuing which with the giving of notice, the passing of time or both, would
constitute an Event of Default.
DATED the -- day of -- , 199--.
GULF CANADA RESOURCES LIMITED
By: ________________________________________
Name:
Title:
91
SCHEDULE D
BANKERS' ACCEPTANCE UNDERTAKING
To: [LIST LENDERS]
(individually a "Lender" and collectively, the "Lenders")
________________________________________________________________________________
Dear Sirs:
In consideration of ten dollars ($10) now paid by each Party to the other (the
receipt and sufficiency of which are hereby acknowledged) and in consideration
of the Lender delivering from time to time to the undersigned (the "Borrower")
bankers' acceptance forms in blank or discount note forms in blank (collectively
the "bankers' acceptance forms") to be signed by the Borrower and subsequently
returned to the Lender to be completed by such Lender for such amounts as the
Borrower may from time to time request pursuant to the terms of the loan
agreement dated as of September 18, 1998 between the Borrower, the Lenders as
named therein and Bank of Montreal, as the Agent, as amended from time to time
(the "Loan Agreement"), the parties hereto hereby agree as follows:
1. The Borrower shall hold and use prudently the bankers' acceptance forms
delivered to it in blank from time to time and shall return them from time to
time to the Lender, properly pre-signed and pre-endorsed and in sufficient
quantities to be dealt with by each Lender in conformity with the Loan Agreement
and this Agreement. The Lender shall provide to the Borrower written
acknowledgment of the receipt of such pre-signed and pre-endorsed bankers'
acceptance forms.
2. The Lender shall deal prudently with any bankers' acceptance forms pre-signed
and pre-endorsed by the Borrower and delivered from time to time by the Borrower
and shall use them only in accordance with the instructions of the Borrower
given to the Agent and in turn by the Agent to the Lender, in conformity with
the Loan Agreement.
3. In accordance with the instructions given from time to time by the Borrower,
the Lender is hereby authorized to complete the aforementioned bankers'
acceptance forms and, in the case of any such bankers' acceptance form which,
upon purchase by a Bank, constitutes a Bankers Acceptance, to provide its
acceptance thereon, the whole as provided in and subject to the Loan Agreement.
4. Except as provided in paragraph 5 below, the Borrower shall pay on demand to
the Agent for the account of each Lender at the Payment Office the face amount
of any bankers' acceptance form subsequently presented to such Lender for
payment and paid by such Lender or held by such Lender at maturity, that has
been unlawfully issued or used or put into circulation fraudulently or without
authority, and shall indemnify such Lender against any loss, cost, damage,
expense or claim regardless of by whomsoever made, that such Lender may suffer
or incur by reason of any fraudulent, unauthorized or unlawful issue or use of
any such bankers' acceptance form.
5. The provisions of paragraph 4 shall not apply in respect of any fraudulent,
unauthorized or unlawful issue or use of any such bankers' acceptance form which
is caused by the negligence or
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wilful act or omission of the Agent or a Lender or any of their respective
officers, employees, agents or representatives or which occurs as a result of
the Agent or a Lender or any of their respective officers, employees, agents or
representatives failing to use the same standard of care in the custody of such
bankers' acceptance form as it uses in the custody of its own property of a
similar nature.
6. Neither the Agent nor any Lender shall be responsible or liable for any
failure to make credit available by way of Bankers' Acceptances under the terms
of the Loan Agreement if such failure is due to the failure of the Borrower to
return duly pre-signed and (in the case of bankers' acceptances) pre-endorsed
bankers' acceptance forms to the Lender on a timely basis following a request by
the Lender.
7. On request by the Agent on behalf of the Lenders, the Borrower shall return
to the Lenders all bankers' acceptance forms then held by the Borrower, provided
that all such bankers' acceptance forms which have been pre-signed or
pre-endorsed by the Borrower may be cancelled prior to their return.
8. On request by the Borrower made to the Agent, a Lender shall return all
pre-signed or pre-endorsed bankers' acceptance forms held by such Lender and not
yet issued in accordance with the Borrower's instructions.
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Unless otherwise defined herein or the context otherwise requires, all terms
used herein shall have the same meaning herein as in the Loan Agreement. This
Agreement shall benefit not only the parties hereto but also all other Persons
which may, from time to time, become Lenders in accordance with the provisions
of the Loan Agreement and, as such, are to receive bankers' acceptance forms.
Dated at Calgary, Alberta as of the -- day of -- , -- .
GULF CANADA RESOURCES LIMITED
By: ______________________________________________
Name:
Title:
c/s
By: ______________________________________________
Name:
Title:
Accepted at Calgary, Alberta as of the -- day of -- , -- .
BANK OF MONTREAL
By: ______________________________________________
Name:
Title:
(other signature pages depend on Lenders)
94
SCHEDULE E
EXTENSION AGREEMENT
THIS EXTENSION AGREEMENT (the "Agreement"), dated as of -- , 199--, is among
GULF CANADA RESOURCES LIMITED (the "Borrower"); each of the banks party to the
hereinafter referenced Loan Agreement who have executed this Agreement below
(the "Lenders"); and BANK OF MONTREAL, as agent (in such capacity, together with
its successors and assigns in such capacity, the "Agent").
RECITALS:
A. The Borrower, the Agent and the Lenders have entered into that certain loan
agreement dated September 18, 1998 (as such may be amended, supplemented,
restated or otherwise modified from time to time, the "Loan Agreement"). Unless
otherwise defined herein or the context otherwise requires, all terms used
herein shall have the same meaning herein as in the Loan Agreement);
B. The current Term Out Date in respect of the Lenders is __________________
(the "Current Term Out Date"). Pursuant to Section 2.1 of the Loan Agreement,
the Borrower has requested that the Lenders extend the Term Out Date until that
certain date which is __________________ [INSERT DATE OR NUMBER OF DAYS, IN
EITHER CASE, NOT IN EXCESS OF 364 DAYS FROM THE]; and [CURRENT TERM OUT
DATE/DATE OF CONFIRMATION];
C. Subject to the conditions set forth herein, the undersigned Lenders have
agreed to such extension;
NOW, THEREFORE, in consideration of the premises herein contained and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. The Borrower hereby represents and warrants that the representations and
warranties contained in subsections 7.1(a), (c), (d), (e), (g), (p) and (q) of
the Loan Agreement are true and correct on and as of the date hereof as though
made on and as of the date hereof and no Event of Default has occurred and
remains outstanding and to the best of the knowledge, information and belief of
the undersigned (after due enquiry) on behalf of the Borrower, no event has
occurred and is continuing which, with the giving of notice, the passing of time
or both, would constitute an Event of Default.
2. Subject to the conditions that the representations and warranties set forth
in Section 1 above are true and correct on the date hereof, the Term Out Date is
hereby extended pursuant to Section 2.1 of the Loan Agreement with respect to
the Commitments of the Lenders to the [INSERT DATE OR NUMBER OF DAYS, IN EITHER
CASE, NOT IN EXCESS OF 364 DAYS FOLLOWING THE CURRENT TERM OUT DATE/DATE OF
CONFIRMATION];
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- 2 -
3. This Agreement may be executed in several counterparts, each of which shall
be deemed to be an original and all of which together shall constitute but one
and the same agreement.
EXECUTED as of the date first written above.
BORROWER:
GULF CANADA RESOURCES LIMITED
By: ____________________________________________
Name:
Title:
By: ____________________________________________
Name:
Title:
AGENT AND LENDERS:
BANK OF MONTREAL, individually as a Lender and
as Agent
By: ____________________________________________
Name:
Title:
By: ____________________________________________
Name:
Title:
[LENDERS EXECUTIONS TO BE ADDED]
96
SCHEDULE F
EXTENSION REQUEST
TO: [LIST LENDERS] and Bank of Montreal, as Agent
This Extension Request is given pursuant to the terms of the loan agreement (the
"Loan Agreement") dated September 18, 1998 between the Lenders named therein,
the Agent and Gulf Canada Resources Limited. Unless otherwise defined herein or
the context otherwise requires, all terms used in this Extension Request shall
have the same meaning herein as in the Loan Agreement.
The current Term Out Date in respect of the Lenders listed below is -- , 199--
(the "Current Term Out Date"). Pursuant to Section 2.1 of the Loan Agreement,
the Borrower hereby requests that such Lenders (the "Revolving Lenders") extend
the Term Out Date until that certain date which is ____________ [INSERT DATE OR
NUMBER OF DAYS, IN EITHER CASE, NOT IN EXCESS OF 364 DAYS FROM THE CURRENT TERM
OUT DATE/DATE OF CONFIRMATION; IN RESPECT OF THIS EXTENSION REQUEST].
Attached hereto are three copies of an Extension Agreement relating to the
subject matter hereof duly completed and executed by the Borrower and a report
prepared by [DESIGNATE QUALIFIED ENGINEERS PROVIDING REPORT] with respect to the
proved and probable reserves attributable to the petroleum and natural gas
interests of Gulf (excluding Unrestricted Subsidiaries) as of [DATE TO BE NOT
EARLIER THAN THE END OF THE LAST FINANCIAL YEAR OF THE BORROWER PRECEDING THE
DATE HEREOF].
The undersigned hereby certifies, on behalf of the Borrower, that:
(a) the representations and warranties contained in subsections
7.1(a), (c), (d), (e), (g), (p) and (q) of the Loan Agreement are true
and correct on and as of the date hereof as though made on and as of
the date hereof;
(b) all of the covenants of the undersigned contained in the Loan
Agreement and all other terms and conditions contained in the Loan
Agreement have been fully complied with, [EXCEPT AS SET FORTH IN
EXHIBIT I]; and
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(c) no Event of Default has occurred and remains outstanding and to
the best of the knowledge, information and belief of the undersigned,
no event has occurred and is continuing which with the passing of
time, the giving of notice or both, would constitute an Event of
Default.
DATED the -- day of -- , 199-- .
GULF CANADA RESOURCES LIMITED
By: ____________________________________________
Name:
Title:
98
SCHEDULE G
BANK TRANSFER AGREEMENT
To: Gulf Canada Resources Limited
To: Bank of Montreal, as the Agent
________________________________________________________________________________
This Agreement is entered into pursuant to Section 12.10 of the loan agreement
dated as of September 18, 1998 (together with all amendments and other
modifications, if any, from time to time thereafter made thereto, the "Loan
Agreement") among Gulf Canada Resources Limited (the "Borrower"); the various
financial institutions (the "Lenders") as are, or shall from time to time
become, parties thereto and Bank of Montreal, as agent, (the "Agent"). Unless
otherwise defined herein or the context otherwise requires, and terms used
herein have the same meaning herein as in the Loan Agreement.
This Agreement constitutes notice to each of you of the assignment and
delegation to -- (the "Assignee") of --% of the Advances and Commitment of --
(the "Assignor") outstanding under the Loan Agreement on the date hereof. After
giving effect to the foregoing assignment and delegation, the Assignor's and the
other Lenders' Commitment Amounts for the purposes of the Loan Agreement are as
set forth opposite such Person's name on the signature pages hereof.
[ADD PARAGRAPH DEALING WITH ACCRUED INTEREST AND FEES WITH RESPECT TO
ADVANCES ASSIGNED.]
The Assignee hereby acknowledges and confirms that it has received a copy of the
Loan Agreement, together with copies of the documents which were required to be
delivered under the Loan Agreement as a condition to the making of the Advances
thereunder. The Assignee further confirms and agrees that in becoming a Lender
and in making its Commitment and Advances under the Loan Agreement, such actions
have and will be made without recourse to, or representation or warranty by
Agent.
Except as otherwise provided in the Loan Agreement, effective as of the date of
acceptance hereof by the Agent:
(a) the Assignee
(i) shall be deemed automatically to have become a party to
the Loan Agreement, have all the rights and obligations of a
"Lender" under the Loan Agreement as if it were an original
signatory thereto to the extent specified in the second
paragraph hereof; and
(ii) agrees to be bound by the terms and conditions set forth
in the Loan Agreement as if it were an original signatory
thereto; and
99
(b) the Assignor shall be released from any further obligations under
the Loan Agreement accruing thereafter to the extent specified in the
second paragraph hereof.
The Assignee hereby advises each of you of the following administrative details
with respect to the assigned Advances and Commitment and requests the Borrower,
by its signature below, to acknowledge its consent to the assignment and
transfer set forth herein and further requests the Agent and the Borrower to
acknowledge receipt of this document:
(a) Address for Notices:
Institution Name:
Attention:
Lending Office:
Telephone:
Facsimile:
(b) Payment Instructions:
This Agreement may be executed by the Assignor and Assignee in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute one and the same
agreement.
Adjusted Commitment Amount [ASSIGNOR]
Unused Commitment $ _____________
Advances $ _____________
Commitment Amount $ _____________
By: ____________________________________________
Title:
Commitment Amount [ASSIGNEE]
Unused Commitment $ _____________
Advances $ _____________
Commitment Amount $ _____________
By: ____________________________________________
Title:
100
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Accepted and acknowledged this -- day of -- , 199-- .
BANK OF MONTREAL
as Agent
By: ____________________________________________
Title:
GULF CANADA RESOURCES LIMITED
By: ____________________________________________
Title:
By: ____________________________________________
Title:
101
SCHEDULE H
BORROWER'S COUNSEL'S OPINION
[LETTERHEAD OF ▇▇▇▇▇▇▇ ▇▇▇▇▇ VERCHERE]
102
▇. ▇. ▇▇▇▇▇▇▇
Direct Line: (▇▇▇) ▇▇▇-▇▇▇▇
Our File No.: 22307-158
September 18, 1998
Bank of Montreal Osler, ▇▇▇▇▇▇ & Harcourt
Corporate and Institutional Suite 1900
Financial Services Toronto ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ - ▇▇▇ ▇▇▇. S.W., 24th Floor 333 - 7th Avenue S.W.
Calgary, Alberta ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇
And to the Lenders listed in Schedule A of the Loan Agreement
Dear Sirs/Mesdames:
Re: Loan Agreement made as of September 18, 1998 between Gulf Canada
Resources Limited, the Lenders named therein and Bank of Montreal, as
Agent for the Lenders
We have acted as counsel to Gulf Canada Resources Limited (the "Borrower") in
connection with a loan agreement made as of September 18, 1998 (the "Loan
Agreement") between the Borrower, the Lenders listed in Schedule A thereto (the
"Lenders") and Bank of Montreal, as agent for the Lenders (the "Agent") which
provides a credit facility to the Borrower.
All capitalized terms used in this opinion letter shall, unless otherwise
defined in this opinion letter, have the meanings ascribed to them in the Loan
Agreement.
In connection with the opinions expressed in this letter we have considered such
questions of law and examined such public and corporate records, certificates
and other documents and conducted such other examinations as we have considered
necessary. In such examinations we have assumed the legal capacity of all
individuals, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals and the conformity to authentic original
documents of all documents submitted to us as certified, conformed, photostatic
or facsimile copies.
The law covered by the opinions expressed in this letter is limited to the laws
of the Province of Alberta and the laws of Canada applicable therein.
On the basis of the foregoing, and subject to the qualifications herein
expressed, we are of the opinion that:
1. The Borrower is a body corporate incorporated under the Canada Business
Corporations Act.
103
Page 2
2. The Borrower has all necessary corporate power and capacity to enter into
the Loan Agreement and to perform its obligations thereunder.
3. The execution and delivery of the Loan Agreement and the consummation of the
transactions contemplated therein have been duly authorized by all necessary
corporate action on the part of the Borrower.
4. The Loan Agreement has been duly executed and delivered by the Borrower and
is a legal, valid and binding obligation of the Borrower enforceable against
the Borrower in accordance with its terms.
5. The Borrower is not a party to, bound or affected by or subject to any
provision in its articles or by-laws, or any statutory law or regulation,
which is violated, contravened or breached by, or under which any default
occurs, as a result of the execution, delivery and performance by it of the
Loan Agreement.
6. The indebtedness of the Borrower to the Lenders under the Loan Agreement
constitutes Senior Indebtedness as defined in the Indenture dated as of
January 27, 1994 made between the Borrower and The Bank of New York, as
Trustee, and the Indenture dated as of July 5, 1995 made between the
Borrower and The Bank of New York, as Trustee, (collectively, the
"Subordinated Indentures") relating to the issuance of subordinated
debentures, provided that such indebtedness of the Borrower to the Lender is
not incurred in violation of the provisions of the Subordinated Indentures.
If indebtedness of the Borrower to the Lenders in the amount of
US$500,000,000 were incurred under the Loan Agreement on the date hereof,
such indebtedness would not, to our knowledge, violate the provisions of the
Subordinated Indentures.
7. If indebtedness of the Borrower to the Lenders in the amount of
US$500,000,000 were incurred under the Loan Agreement on the date hereof,
such indebtedness would not, to our knowledge, violate the provisions of the
indenture dated as of July 1, 1989 between the Borrower and The Bank of New
York, as successor trustee to The Chase Manhattan Bank (National
Association) or the indentures dated as of August 7, 1996 and March 21, 1997
respectively between the Borrower and The Bank of New York, as trustee
(collectively, the "Senior Indentures").
The foregoing opinions are subject to the qualifications set out below:
a. Certificates of Compliance. In expressing the opinion set forth in
paragraph 1 we have relied upon a certificate of compliance dated
September 14, 1998 issued by Industry Canada, a copy of which has been
delivered to you.
b. Enforceability. The opinion set forth in paragraph 4 is based on the
assumption that the Loan Agreement has been duly authorized, executed
and delivered by, and is enforceable in accordance with its terms
against the Agent and the Lenders and is subject to the following
qualifications:
i. Bankruptcy -- enforceability may be limited by bankruptcy,
insolvency, reorganization, receivership, moratorium, arrangement
or winding up laws or other similar laws affecting the
enforcement of creditors' rights generally;
ii. Equitable Principles -- enforceability may be limited by
equitable principles, including the principle that equitable
remedies, such as specific performance and injunction, may only
be granted in the discretion of a court of competent
jurisdiction;
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Page 3
iii. Severability -- the validity and enforceability of provisions
inserted in any agreement or instrument which purport to sever
from the agreement or instrument any provision which is prohibited
or unenforceable under applicable law without affecting the
enforceability or validity of the remainder of the agreement or
instrument would be determined only in the discretion of the
court;
iv. Reasonableness -- notwithstanding any term or condition contained
in the Loan Agreement, a court of competent jurisdiction may
retain the discretion to determine when the actions of the Lenders
or their agents have been conducted in a "commercially reasonable"
manner, and determinations or demands made by a person in the
exercise of a discretion purported to be given to it may be
unenforceable if made in an unreasonable or arbitrary fashion;
v. Indemnity and Contribution -- a court may decline to enforce
rights of indemnity and contribution under the Loan Agreement
which are found to be contrary to public policy;
vi. Limitations -- enforceability may be limited by restrictions which
may be imposed by law on:
(1) the right of a creditor to receive immediate payment of
amounts stated to be payable on demand or which have been
accelerated;
(2) the right of a party to the Loan Agreement to enforce its
rights under the Loan Agreement on the basis of a default of
a minor or non-substantive nature, such as the failure to
produce a document in a timely manner;
(3) the effectiveness of provisions of the Loan Agreement which
provide that delay or failure by a party to exercise any
right, remedy or option will not operate as a waiver thereof
may not be enforceable; and
vii. Waivers of Rights -- provisions of the Loan Agreement which
provide for the waiver of certain legal or equitable rights or
which absolve or purport to absolve a party from responsibility
for its acts may not be enforceable.
c. Reliance on Officer's Certificate. In expressing the opinions set forth
in the last sentence of paragraph 6 and in paragraph 7, we have relied
on a certificate of an officer of the Borrower, a copy of which is
attached as Schedule A hereto. In expressing the opinions set forth in
paragraphs 6 and 7, we have also assumed the laws of the State of New
York (which govern the Subordinated Indentures and the Senior
Indentures) are the same as the laws of the Province of Alberta. No
opinion is expressed as to compliance with the provisions of the
Subordinated Indentures and the Senior Indentures at any future date.
d. Conclusive, Final or Binding. A court is not required to treat as
conclusive, final or binding those certificates and determinations
which the Loan Agreement states are to be so treated.
e. Currency Qualification. Pursuant to the Currency Act (Canada), a
judgment by a court in any province in Canada may be awarded in
Canadian currency only and such
105
Page 4
judgment may be based on a rate of exchange in existence on a day other
than the day of payment of such judgment.
f. Interest after Judgment. Under the Judgment Interest Act (Alberta)
interest after judgment may be limited to less than the rate provided
for contractually.
g. Default Interest. We express no opinion as to the enforceability of any
provision which purports to render any person liable for a higher rate
of interest after default than before.
This opinion is given solely for the benefit of the addressees of this opinion
and may not be relied upon in whole or in part by any other person.
Yours very truly,
106
SCHEDULE "A"
CERTIFICATE
TO: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Verchere
Bank of Montreal, as Agent
Osler, ▇▇▇▇▇▇ & Harcourt
This certificate is given in connection with an opinion dated September 18,
1998, delivered by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Verchere to the Bank of Montreal, as Agent for
the Lenders (the "Agent"), and to Osler, ▇▇▇▇▇▇ & Harcourt in connection with
the loan agreement dated September 18, 1998 (the "Loan Agreement") between Gulf
Canada Resources Limited (the "Borrower"), the Agent and the Lenders named in
Schedule A thereto. Unless otherwise defined herein, capitalized terms shall
have the meaning ascribed to them in the Loan Agreement.
The undersigned hereby certifies, on behalf of the Borrower, as follows:
1. If indebtedness of the Borrower to the Lenders under the Loan Agreement
were incurred on the date hereof in the amount of US$500,000,000, such
indebtedness would constitute Senior Indebtedness as defined in the
Indenture dated as of January 27, 1994 (the "1994 Indenture") made
between the Borrower and The Bank of New York, as trustee, and the
Indenture dated as of July 5, 1995 (the "1995 Indenture") made between
the Borrower and The Bank of New York, as trustee, (collectively the
"Subordinated Indentures"). Such indebtedness would not violate any of
the provisions of the Subordinated Indentures including, without
limitation, Section 1008 of the 1994 Indenture or Section 1009 of the
1995 Indenture. No Default or Event of Default exists under and as
defined in the Subordinated Indentures.
2. If indebtedness of the Borrower to the Lenders under the Loan Agreement
were incurred on the date hereof in the amount of US$500,000,000, such
indebtedness would not violate any of the provisions of the Indenture
dated as of July 1, 1989 made between the Borrower and The Bank of New
York, as successor trustee to The Chase Manhattan Bank (National
Association) or the Indentures dated as of August 7, 1996 and March 21,
1997 respectively between the Borrower and The Bank of New York, as
trustee (collectively, the "Senior Indentures"). No Default or Event of
Default exists under and as defined in the Senior Indentures.
3. The Subordinated Indentures and the Senior Indentures are the only
material agreements relating to borrowed monies to which the Borrower is
a party other than the Loan Agreement and the Existing Loan Facility.
DATED as of September 18, 1998.
GULF CANADA
RESOURCES LIMITED
By: __________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Treasurer
107
SCHEDULE I
LENDERS' COUNSEL'S OPINION
[LETTERHEAD OF OSLER, ▇▇▇▇▇▇ & HARCOURT]
September 18, 1998
Bank of Montreal Bank of Montreal
Global Distribution - Sales First Canadian Centre
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇.▇.
1 First Canadian Place 24th Floor
Toronto, Ontario ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇
And to the Lenders Listed in Schedule A of Loan Agreement
Dear Sirs/Mesdames
RE: LOAN AGREEMENT MADE AS OF SEPTEMBER 18, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
RESOURCES LIMITED, THE LENDERS NAMED THEREIN AND BANK OF MONTREAL, AS
AGENT FOR THE LENDERS
We have acted as counsel to Bank of Montreal (the "Agent") in connection with a
loan agreement made as of September 18, 1998 (the "Loan Agreement") between Gulf
Canada Resources Limited (the "Borrower"), the Lenders listed in Schedule A
thereto (the "Lenders") and the Agent, as agent for the Lenders, which provides
a credit facility to the Borrower.
All capitalized terms used in this opinion letter shall, unless otherwise
defined in this opinion letter, have the meanings ascribed to them in the Loan
Agreement.
In connection with the opinions expressed in this letter we have considered such
questions of law and examined such public and corporate records, certificates
and other documents and conducted such other examinations as we have considered
necessary. In such examinations we have assumed the legal capacity of all
individuals, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals and the conformity to authentic original
documents of all documents submitted to us as certified, conformed, photostatic
or facsimile copies.
The law covered by the opinions expressed in this letter is limited to the laws
of the Province of Alberta and the laws of Canada applicable therein.
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On the basis of the foregoing and subject to the qualifications herein
expressed, we are of the opinion that:
1. The Borrower is a body corporate incorporated under the Canada Business
Corporations Act.
2. The Borrower has all necessary corporate power and capacity to enter
into the Loan Agreement and to perform its obligations thereunder.
3. The execution and delivery of the Loan Agreement and the consummation
of the transactions contemplated therein have been duly authorized by
all necessary corporate action on the part of the Borrower.
4. The Loan Agreement has been duly executed and delivered by the Borrower
and is a legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with its terms.
5. The Borrower is not a party to, bound or affected by or subject to any
provision in its articles or by-laws, or any statutory law or
regulation, which is violated, contravened or breached by, or under
which any default occurs, as a result of the execution, delivery and
performance by it of the Loan Agreement.
6. The indebtedness of the Borrower to the Lenders under the Loan
Agreement constitutes Senior Indebtedness as defined in the Indenture
dated as of January 27, 1994 made between the Borrower and The Bank of
New York, as Trustee, and the Indenture dated as of July 5, 1995 made
between the Borrower and The Bank of New York, as Trustee,
(collectively, the "Subordinated Indentures") relating to the issuance
of subordinated debentures, provided that such indebtedness of the
Borrower to the Lenders is not incurred in violation of the provisions
of the Subordinated Indentures. If indebtedness of the Borrower to the
Lenders in the amount of US$500,000,000 were incurred under the Loan
Agreement on the date hereof, such indebtedness would not, to our
knowledge, violate the provisions of the Subordinated Indentures.
7. If indebtedness of the Borrower to the Lenders in the amount of
US$500,000,000 were incurred under the Loan Agreement on the date
hereof, such indebtedness would not, to our knowledge, violate the
provisions of the indenture dated as of July 1, 1989 between the
Borrower and The Bank of New York, as successor trustee to The Chase
Manhattan Bank (National Association) or the indentures dated as of
August 7, 1996 and March 21, 1997 respectively between the Borrower and
The Bank of New York, as trustee (collectively, the "Senior
Indentures").
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The foregoing opinions are subject to the qualifications set out below:
(a) RELIANCE. In expressing the opinions set forth in paragraphs 2, 3,
4 (in respect of due execution and delivery), 5, 6 and 7, we have
relied upon the opinions of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Verchere, counsel to the
Borrower, dated the same date as this opinion and delivered to you.
Such opinions are in form and scope satisfactory to us and we are of
the opinion that we and you are justified in relying thereon.
(b) CERTIFICATES OF COMPLIANCE. In expressing the opinion set forth in
paragraph 1 we have relied upon a certificate of compliance dated
September --, 1998 issued by Industry Canada, a copy of which has been
delivered to you.
(c) ENFORCEABILITY. The opinion set forth in paragraph 4 is based
on the assumption that the Loan Agreement has been duly
authorized, executed and delivered by, and is enforceable in
accordance with its terms against the Agent and the Lenders
and is subject to the following qualifications:
(i) BANKRUPTCY - enforceability may be limited by
bankruptcy, insolvency, reorganization, receivership,
moratorium, arrangement or winding up laws or other
similar laws affecting the enforcement of creditors'
rights generally;
(ii) EQUITABLE PRINCIPLES - enforceability may be limited
by equitable principles, including the principle that
equitable remedies, such as specific performance and
injunction, may only be granted in the discretion of
a court of competent jurisdiction;
(iii) SEVERABILITY - the validity and enforceability of
provisions inserted in any agreement or instrument
which purport to sever from the agreement or
instrument any provision which is prohibited or
unenforceable under applicable law without affecting
the enforceability or validity of the remainder of
the agreement or instrument would be determined only
in the discretion of the court;
(iv) REASONABLENESS - notwithstanding any term or
condition contained in the Loan Agreement, a court of
competent jurisdiction may retain the discretion to
determine when the actions of the Lenders or their
agents have been conducted in a "commercially
reasonable" manner, and determinations or demands
made by a person in the exercise of a discretion
purported to be given to it may be unenforceable if
made in an unreasonable or arbitrary fashion;
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(v) INDEMNITY AND CONTRIBUTION - a court may decline to
enforce rights of indemnity and contribution under
the Loan Agreement which are found to be contrary to
public policy;
(vi) LIMITATIONS - enforceability may be limited by
restrictions which may be imposed by law on:
(A) the right of a creditor to receive immediate
payment of amounts stated to be payable on
demand or which have been accelerated;
(B) the right of a party to the Loan Agreement
to enforce its rights under the Loan
Agreement on the basis of a default of a
minor or non-substantive nature, such as the
failure to produce a document in a timely
manner;
(C) the effectiveness of provisions of the Loan
Agreement which provide that delay or
failure by a party to exercise any right,
remedy or option will not operate as a
waiver thereof may not be enforceable; and
(vii) WAIVERS OF RIGHTS - provisions of the Loan Agreement
which provide for the waiver of certain legal or
equitable rights or which absolve or purport to
absolve a party from responsibility for its acts may
not be enforceable.
(d) RELIANCE ON OFFICER'S CERTIFICATE. In expressing the opinions set
forth in the last sentence of paragraph 6 and in paragraph 7, we have
relied on a certificate of an officer of the Borrower, a copy of which
is attached as Schedule A hereto. In expressing the opinions set forth
in paragraphs 6 and 7, we have also assumed the laws of the State of
New York (which govern the Subordinated Indentures and the Senior
Indentures) are the same as the laws of the Province of Alberta. No
opinion is expressed as to compliance with the provisions of the
Subordinated Indentures and the Senior Indentures at any future date.
(e) CONCLUSIVE, FINAL OR BINDING. A court is not required to treat as
conclusive, final or binding those certificates and determinations
which the Loan Agreement states are to be so treated.
(f) CURRENCY QUALIFICATION. Pursuant to the Currency Act (Canada), a
judgment by a court in any province in Canada may be awarded in
Canadian currency only and such judgment may be based on a rate of
exchange in existence on a day other than the day of payment of such
judgment.
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(g) INTEREST AFTER JUDGMENT. Under the Judgment Interest Act (Alberta)
interest after judgment may be limited to less than the rate provided
for contractually.
(h) DEFAULT INTEREST. We express no opinion as to the enforceability of
any provision which purports to render any person liable for a higher
rate of interest after default than before.
This opinion is given solely for the benefit of the addressees of this opinion
and may not be relied upon in whole or in part by any other person.
Yours very truly,
EMO:yn
112
SCHEDULE J
NOTICE OF AMENDMENT OF UNRESTRICTED SUBSIDIARIES
To: [LIST LENDERS] and Bank of Montreal, as Agent
________________________________________________________________________________
This Notice of Amendment of Unrestricted Subsidiaries is given pursuant to the
terms of the loan agreement (the "Loan Agreement") dated September 18, 1998
between the Lenders named therein, the Agent and Gulf Canada Resources Limited.
Unless otherwise defined herein or the context otherwise requires, all terms
used in this Notice of Unrestricted Subsidiaries shall have the same meaning
herein as in the Loan Agreement.
Schedule L is hereby amended as follows:
(A) To delete as Unrestricted Subsidiaries: --
(B) To add as Unrestricted Subsidiaries: --
The undersigned hereby certifies that subsection 8.1(l) of the Loan Agreement
would not have been contravened by the Borrower if the changes made above had
occurred prior to the end of the last Fiscal Quarter preceding the date hereof.
DATED the -- day of -- , 199-- .
GULF CANADA RESOURCES LIMITED
By: ____________________________________________
Name:
Title:
By: ____________________________________________
Name:
Title:
113
SCHEDULE K
LETTER OF CREDIT DOCUMENTATION
TO: BANK OF MONTREAL, as Agent, and [LIST LENDERS] (the "Lenders")
________________________________________________________________________________
In consideration of the issuance by the Lenders of a Letter of Credit
substantially according to any Drawdown Notice, the Borrower agrees as follows:
1. The Agent and the Lenders assume no liability or responsibility for the form,
sufficiency, accuracy, genuineness, falsification or legal effect of any
document(s) required pursuant to the Letter of Credit, or for the general and/or
particular conditions stipulated in the document(s) or superimposed thereon; nor
do they assume any liability or responsibility for the description, quality,
delivery, value or existence of the services represented by any document(s), or
for the good faith or acts and/or omissions, solvency, performance or standing
of the beneficiary or any other Person whomsoever; and the Borrower hereby
assumes and undertakes all such risk, including acts of the users of the Letter
of Credit and the Borrower further agrees that the Agent may hold the delivery
of documents conforming to the Letter of Credit as sufficient evidence of the
good faith of the beneficiary and of the services described therein, without
assuming any responsibility in regard to the services.
2. This Agreement is irrevocable with respect to the Letter of Credit and is to
continue in force and to be applicable to all transactions relating to the
Letter of Credit notwithstanding any change in the composition of the Borrower,
the parties to or parties contemplated in this Agreement including, without
limitation, any change arising from the accession of one or more new partners,
or from the death or succession of any partner or partners or amalgamation of
one or more corporations, and it shall cover any and all amounts that the
Lenders may ultimately be required to pay under the Letter of Credit by reason
of having issued same. The Borrower acknowledges that the Lender's obligations
to pay and/or fulfil any other obligation under the Letter of Credit is not
subject to claims or defence by the Borrower resulting from its relationship
with other parties.
3. The Borrower hereby indemnifies and agrees to hold the Agent and the Lenders
harmless from and against all losses, consequences or damages arising out of any
transmission, including delay and/or loss in transit of any message(s),
letter(s) or document(s) or for delay, mutilation or from insufficient or
incorrect particulars being transmitted or other error(s) arising in the
transmission or delivery of any telecommunication, including transmission by
cable, telegraph, telecopier, wireless or otherwise except to the extent such
losses, consequences or damages arise as a result of gross negligence or wilful
misconduct of the Agent or Lender as the case may be. The Agent and the Lenders
assume no liability or responsibility for errors in translation and/or
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interpretation of technical terms, and reserve the right to transmit Letter of
Credit terms without translating them.
4. In case the expiry date of the Letter of Credit is extended and/or the amount
thereof is increased, and/or any of the terms and conditions are altered at the
Borrower's request or with the Borrower's consent, all the terms of this
Agreement shall remain in full force and effect, without releasing any party
thereto.
5. The rights and powers conferred hereby are in addition to and without
prejudice to any other rights which the Agent or the Lenders may now have or
hereafter acquire from the Borrower or others.
6. This Agreement will be governed and construed in accordance with the laws of
the Province of Alberta and the laws of Canada applicable herein. Should any
provision of this Agreement be illegal or not enforceable under such law, it
shall be considered severable and the Agreement and its conditions shall remain
in full force and effect as if the said provision had never been included.
7. This Agreement shall enure to the benefit of the Agent and each of the
Lenders and their respective successors and assigns, and shall be binding upon
the Borrower and the Borrower's executors, liquidators, administrators,
successors and assigns.
8. Except as otherwise expressly stated, each Letter of Credit is subject to the
current Uniform Customs & Practice for Documentary Credits of the International
Chamber of Commerce, as amended from time to time (the "UCP Rules") or in the
case of a Demand Guarantee, the Letter of Credit is subject to the terms and
conditions of the current "Uniform Rules for Demand Guarantees" of the ICC. If
the provisions of this Agreement conflict with the UCP Rules, the provisions of
this Agreement shall prevail. This Agreement shall not be construed as limiting
any rights of the Agent or the Lenders which may be set out in separate
documentation, between the Agent or the Lenders and the Borrower, including any
credit facility.
115
SCHEDULE L
LIST OF UNRESTRICTED SUBSIDIARIES
156911 Canada Inc.
2276496 Canada Limited
534404 Alberta Ltd.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Ltd.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Ltd.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Ltd.
Alter Energy Inc.
Asamera (Cyprus) Limited
Asamera Hurghada Inc.
Asamera Oil (U.S.) Inc.
Australian Hydrocarbons Inc.
Beaufinco Equipment Holdings Limited
CP (E&P) BV
Canadian Oil Debco Inc.
▇▇▇▇▇ Exploratie Maatschappij BV
▇▇▇▇▇▇▇▇ Pty Ltd.
Crusader Inc.
Crusader (Jild) Pty Ltd.
Crusaser (Phillippines) Pty Ltd.
Gulf Australia Pty Ltd.
Gulf Indonesia Resources Limited
▇▇▇▇▇▇ Energy Development Inc.
Pursuit Exploration Pty Ltd.
TS Inc.
Tidal Energy Marketing Inc.
Trilogy France Corporation
Trilogy France Resource SNC
Trilogy Italia Corporation