EXECUTION COPY
EXHIBIT 10.30
- --------------------------------------------------------------------------------
BURLINGTON RESOURCES CANADA LTD.
CANADIAN HUNTER EXPLORATION LTD.
BURLINGTON RESOURCES INC.
-------------------------------------
Cdn.$467,820,000
CANADIAN CREDIT AGREEMENT
Dated as of March 31, 2000,
as Amended and Restated as of December 7, 2001,
as Amended on April 25, 2002, and
as further Amended and Restated as of December 5, 2002
-------------------------------------
JPMORGAN CHASE BANK, TORONTO BRANCH,
as Administrative Agent
CITIBANK, N.A., CANADIAN BRANCH
FLEET NATIONAL BANK,
as Co-Syndication Agents
BANK OF AMERICA, N.A., CANADA BRANCH
THE BANK OF NOVA SCOTIA,
as Co-Documentation Agents
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
Page
----
Section 1.01 Certain Defined Terms..................................................................... 1
Section 1.02 Computation of Time Periods............................................................... 25
Section 1.03 Accounting and Other Terms................................................................ 25
Section 1.04 References 25
Section 1.05 Schedule III Banks........................................................................ 25
ARTICLE 2
AMOUNTS AND TERMS OF THE ADVANCES
Section 2.01 Revolving Advances........................................................................ 26
Section 2.02 Making the Advances....................................................................... 27
Section 2.03 Fees 29
Section 2.04 Reduction of the Commitments.............................................................. 30
Section 2.05 Repayment of Advances..................................................................... 31
Section 2.06 Interest on Advances...................................................................... 32
Section 2.07 [Intentionally omitted.................................................................... 35
Section 2.08 Rate Determination........................................................................ 35
Section 2.09 Voluntary Continuation of Advances........................................................ 38
Section 2.10 Prepayments............................................................................... 39
Section 2.11 Bankers' Acceptances...................................................................... 40
Section 2.12 Increased Costs........................................................................... 44
Section 2.13 Increased Capital......................................................................... 46
Section 2.14 Illegality 47
Section 2.15 Payments and Computations................................................................. 47
Section 2.16 Taxes 49
Section 2.17 Sharing of Payments, Etc.................................................................. 55
Section 2.18 Evidence of Debt.......................................................................... 56
Section 2.19 Use of Proceeds........................................................................... 57
Section 2.20 Increase of Commitments................................................................... 57
Section 2.21 Extension of Revolving Commitment Termination Date........................................ 59
Section 2.22 Replacement of Lenders.................................................................... 61
Section 2.23 Currency Indemnity........................................................................ 62
Section 2.24 Exchange Rate Calculations................................................................ 63
i
ARTICLE 3
CONDITIONS OF EFFECTIVENESS AND LENDING
Section 3.01 Conditions Precedent to Effectiveness of this Agreement................................... 64
Section 3.02 Conditions Precedent to Each Borrowing.................................................... 65
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.01 Representations and Warranties of the Borrower............................................ 66
ARTICLE 5
COVENANTS
Section 5.01 Affirmative Covenants..................................................................... 69
Section 5.02 Negative Covenants........................................................................ 72
Section 5.03 Reporting Requirements.................................................................... 76
ARTICLE 6
EVENTS OF DEFAULT
Section 6.01 Events of Default......................................................................... 80
ARTICLE 7
THE ADMINISTRATIVE AGENT
Section 7.01 Authorization and Action.................................................................. 84
Section 7.02 Administrative Agent's Reliance, Etc...................................................... 84
Section 7.03 Administrative Agent and Affiliates....................................................... 85
Section 7.04 Lender Credit Decision.................................................................... 86
Section 7.05 Indemnification........................................................................... 86
Section 7.06 Successor Administrative Agent............................................................ 87
ARTICLE 8
GUARANTY................................................................................................ 87
ii
ARTICLE 9
MISCELLANEOUS
Section 9.01 Amendments, Etc.......................................................................... 90
Section 9.02 Notices, Etc. ........................................................................... 91
Section 9.03 No Waiver; Remedies...................................................................... 92
Section 9.04 Costs and Expenses; Indemnity............................................................ 92
Section 9.05 Right of Set-off......................................................................... 94
Section 9.06 Binding Effect .......................................................................... 95
Section 9.07 Assignments and Participations........................................................... 95
Section 9.08 Confidentiality.......................................................................... 99
Section 9.09 Consent to Jurisdiction.................................................................. 100
Section 9.10 Governing Law.. ......................................................................... 101
Section 9.11 Execution in Counterparts ............................................................... 101
Section 9.12 Waiver of Jury Trial..................................................................... 101
SECTION 9.13 Entire Agreement, Etc.................................................................... 101
Schedule I -- Material Subsidiaries of Parent
Schedule II -- Pricing Grid
Schedule III -- Initial Commitments
Exhibit A Form of Canadian Short-Term Revolving Credit
Agreement Note
Exhibit B Form of Notice of Borrowing/Continuation/Rollover
Exhibit C Form of Notice of Repayment
Exhibit D Form of Assignment and Acceptance
Exhibit E Form of New Lender Agreement
Exhibit F Form of Commitment Increase Agreement
Exhibit G Form of Extension Request
Exhibit H-1 Form of Opinion of Vice President and General Counsel for Parent
Exhibit H-2 Form of Opinion of Joanne Alexander, Alberta Internal Counsel for
Borrowers
Exhibit I Form of Opinion of Bennett Jones LLP, Alberta Counsel for Borrowers
iii
CANADIAN SHORT-TERM REVOLVING CREDIT AGREEMENT
Dated as of March 31, 2000, as amended and restated as of December 7, 2001, as
amended by Amendment No. 1 dated as of April 25, 2002, and as further amended
and restated as of December 5, 2002
BURLINGTON RESOURCES CANADA LTD., an Alberta corporation (together with
its permitted successors and assigns, "BRCL" and a "Borrower"), CANADIAN HUNTER
EXPLORATION LTD. (together with its permitted successors and assigns, "Canadian
Hunter" and a "Borrower", and, together with BRCL, the "BORROWERS"), Burlington
Resources Inc., a Delaware corporation (together with its permitted successors
and assignees, the "PARENT"), the financial institutions (the "INITIAL LENDERS")
listed on the signature pages hereof, JPMORGAN CHASE BANK, TORONTO BRANCH, as
administrative agent for the Lenders hereunder (in such capacity, the
"ADMINISTRATIVE AGENT"), CITIBANK, N.A., CANADIAN BRANCH and FLEET NATIONAL
BANK, as co-syndication agents, and BANK OF AMERICA, N.A., CANADA BRANCH and THE
BANK OF NOVA SCOTIA, as co-documentation agents, agree as follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01 CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"ACCEPTANCE FEE" means a fee payable in Cdn. Dollars by the applicable
Borrower to the Administrative Agent for the account of a Lender with respect to
the acceptance of a B/A on the date of such acceptance, calculated on the face
amount of the B/A at the rate per annum applicable on such date as set forth in
the row labeled "Applicable Margin" on Schedule II hereto (which is based on the
ratings (or lack thereof) by Moody's or S&P or both of them of the public
long-term senior unsecured debt securities of the Parent) on the basis of the
number of days in the applicable Contract Period (including the date of
acceptance and excluding the date
of maturity) and a year of 365 days.
"ADMINISTRATIVE AGENT" has the meaning specified in the introduction to
this Agreement.
"ADMINISTRATIVE QUESTIONNAIRE" means, with respect to each Lender, an
administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent (with a copy to the Borrowers) duly
completed by such Lender.
"ADVANCE" means an advance by a Lender to either Borrower as part of a
Borrowing, and refers to a Prime Rate Advance, a Base Rate Advance, a Cdn.
Dollar Eurodollar Rate Advance, a U.S. Dollar Eurodollar Rate Advance or a B/A
Advance (each of which shall be a "TYPE" of Advance).
"AFFILIATE" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. The term "CONTROL" (including
the terms "CONTROLS", "CONTROLLED BY" or "UNDER COMMON CONTROL WITH") means,
with respect to any Person, the possession, direct or indirect, of the power to
vote 10% or more (or in the case of an "AFFILIATE" of any Lender, 5% or more) of
the securities having ordinary voting power for the election of directors of
such Person or to direct or cause the direction of the management and policies
of such Person, whether through ownership of voting securities or by contract or
otherwise. Neither a director nor an officer of a Borrower or Parent, in such
capacity, shall be deemed, for purposes of this Agreement, an Affiliate.
"AGREEMENT" means this Amended and Restated Canadian Short-Term
Revolving Credit Agreement, together with all exhibits and schedules hereto, as
amended or otherwise modified from time to time pursuant to the terms hereof.
"APPLICABLE LENDING OFFICE" means, with respect to any Lender, the
office of such Lender specified as its "Applicable Lending Office" in its
Administrative Questionnaire, or in the Assignment and Acceptance or New Lender
Agreement pursuant to which it became a Lender, and/or such other office of such
Lender as such Lender may from time to time specify to the Borrowers and the
2
Administrative Agent with respect to any Type of Advance.
"APPLICABLE MARGIN" means for any date the percentage per annum
applicable on such date as set forth in the row labeled "Applicable Margin" on
Schedule II hereto, which is based on the ratings (or lack thereof) by Moody's
or S&P or both of the public long-term senior unsecured debt securities of
Parent.
"ARRANGER" means J.P. Morgan Securities Inc.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by the Administrative
Agent, in substantially the form of Exhibit D hereto.
"AVERAGE AGGREGATE FACILITY ADVANCES" means, for any Utilization Fee
Period, the average daily outstanding amount of (i) all Advances hereunder and
(ii) all "Advances" under, and as defined in, the U.S. Short-Term Revolving
Credit Agreement and the U.S. Long-Term Revolving Credit Agreement.
"AVERAGE AGGREGATE FACILITY COMMITMENTS" means, for any Utilization Fee
Period, the average daily amount of (i) all Commitments hereunder and (ii) all
"Commitments" under, and as defined in, the U.S. Short-Term Revolving Credit
Agreement and the U.S. Long-Term Revolving Credit Agreement.
"B/A ADVANCE" means a Borrowing comprised of one or more Bankers'
Acceptances or, as applicable, B/A Loans.
"B/A LOAN" has the meaning specified in Section 2.11(i).
"BANKERS' ACCEPTANCE" and "B/A" mean a non-interest bearing instrument
denominated in Cdn. Dollars, drawn by the applicable Borrower and accepted by a
Lender in accordance with this Agreement, and includes a depository note within
the meaning of the Depository Bills and Notes Act (Canada) and a bill of
exchange within the meaning of the Bills of Exchange Act (Canada).
"BASE RATE" means, for each day in any period, a fluctuating interest
rate per annum as shall be in effect from time to time which rate per annum
shall at all times
3
for such day be equal to the higher of:
(i) the annual rate of interest announced publicly by the
Administrative Agent and in effect as its base rate at its principal office
in Toronto, Ontario on such day for determining interest rates on U.S.
Dollar-denominated commercial loans made in Canada; and
(ii) 0.50% per annum above the Effective Federal Funds Rate for
such day.
"BASE RATE ADVANCE" means an Advance denominated in U.S. Dollars that
bears interest based upon the Base Rate, as provided in Section 2.06(a)(ii).
"BORROWER" AND "BORROWERS" have the meanings specified in the
introduction to this Agreement.
"BORROWING" means a borrowing consisting of Advances of the same Type
made on the same day by the Lenders pursuant to Section 2.01 and, (i) in the
case of Eurodollar Rate Advances, having Interest Periods of the same duration;
and, (ii) in the case of B/A Advances, having Contract Periods of the same
duration; it being understood that there may be more than one Borrowing on a
particular day.
"BRCL" has the meaning specified in the introduction to this Agreement.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other
day of the year on which banks are not required or authorized to close in
Calgary, Alberta, Toronto, Ontario or New York, New York, and, if the applicable
Business Day relates to any Eurodollar Rate Advances, a day on which banks are
not required or authorized to close in London, England.
"BUSINESS ENTITY" means a partnership, limited partnership, limited
liability partnership, corporation (including a business trust), limited
liability company, unlimited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity.
"CALCULATION DATE" shall mean the last Business Day of each month.
4
"CANADIAN CERTIFICATION REQUIREMENTS" has the meaning specified in
Section 2.16(g) of this Agreement.
"CANADIAN HUNTER" has the meaning specified in the introduction to this
Agreement.
"CANADIAN TAXES" has the meaning specified in Section 2.16(a) of this
Agreement.
"CAPITALIZATION" means the sum (without duplication) of (i)
consolidated Debt of the Parent and its consolidated Subsidiaries, plus (ii) the
aggregate amount of Guarantees by the Parent or its consolidated Subsidiaries,
plus (iii) the sum of the preferred stock and common stockholders' equity of the
Parent, plus (iv) the cumulative amount by which Consolidated Tangible Net Worth
shall have been reduced by reason of non-cash write-downs of long-term assets
subsequent to December 31, 1997 (but excluding any such amount with respect to
assets of Project Finance Subsidiaries), minus (v) to the extent otherwise
included in determining the amounts computed under clause (iii) above, the
aggregate investment (net of any Project Financing) of the Parent and its
consolidated Subsidiaries in Project Finance Subsidiaries.
"CDN.$" and "CDN. DOLLAR" mean lawful money of Canada.
"CDN.$ EQUIVALENT" means, at the date of determination, (i) with
respect to any amount in Cdn. Dollars, such amount and (ii) with respect to any
amount in U.S. Dollars, the equivalent in Cdn. Dollars of such amount,
determined by the Administrative Agent pursuant to Section 2.24 using the
Exchange Rate with respect to U.S. Dollars in effect for such amount under the
provisions of such Section.
"CDN. DOLLAR EURODOLLAR RATE" means, for any Interest Period for each
Cdn. Dollar Eurodollar Rate Advance comprising part of the same Borrowing, the
interest rate per annum equal to the average (rounded upward to the nearest
whole multiple of 1/16 of 1% per annum, if such average is not such a multiple)
of the rate per annum at which deposits in Cdn. Dollars are offered by the
principal office of each of the Reference Banks in London, England, to prime
banks in the London interbank market at 11:00 A.M. (London, England time) two
5
Business Days before the first day of such Interest Period in an amount
comparable to the amount of such Borrowing and for a period equal to such
Interest Period. The Cdn. Dollar Eurodollar Rate for the Interest Period for
each Cdn. Dollar Eurodollar Rate Advance comprising part of the same Borrowing
shall be determined by the Administrative Agent on the basis of applicable rates
furnished to and received by the Administrative Agent from the Reference Banks
two Business Days before the first day of such Interest Period, subject,
however, to the provisions of Section 2.08.
"CDN. DOLLAR EURODOLLAR RATE ADVANCE" means an Advance denominated in
Cdn. Dollars that bears interest determined by reference to the Cdn. Dollar
Eurodollar Rate, as provided in Section 2.06(a)(iii) (x).
"CDOR RATE" means, for each day in any period, the annual rate of
interest that is the rate based on an average rate applicable to Cdn. Dollar
bankers' acceptances for a term equal to the term of the relevant Contract
Period (or for a term of 30 days for purposes of determining the Prime Rate)
appearing on the "Reuters Screen CDOR Page" (as defined in the International
Swaps and Derivatives Association, Inc. definitions, as modified and amended
from time to time) at approximately 8:00 a.m. (Calgary local time), on such
date, or if such date is not a Business Day, on the immediately preceding
Business Day, provided that if such rate does not appear on the Reuters Screen
CDOR Page on such date as contemplated, then the CDOR Rate on such date shall be
the arithmetic average of the Discount Rate quoted by each Schedule I Reference
Bank (determined by the Administrative Agent as of 8:00 a.m. Calgary local time
on such date) which would be applicable to Cdn. Dollar Bankers' Acceptances
quoted by the banks listed in Schedule I of the Bank Act (Canada) as of 8:00
a.m. (Calgary local time) on such date or, if such date is not a Business Day,
on the immediately preceding Business Day.
"CHANGE IN LAW" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any governmental authority
after the date of this Agreement or (c) compliance by any Lender with any
request, guideline or directive (whether or not having the force of law) of
6
any governmental authority if such request, guideline or directive is made or
issued after the date of this Agreement and reflects a change after the date of
this Agreement in the policies or practices to which such request, guideline or
directive relates.
"CLAM" means CLAM Petroleum B.V., a Netherlands company, and CLAM's
successors.
"CLAM CREDIT AGREEMENT" means the Amended and Restated Credit Agreement
dated as of July 25, 1985, among MaraLou Netherlands Partnership, CLAM, the
banks parties thereto and Morgan, as agent for such banks, as amended and
restated as of August 15, 1997, or any successor credit agreement entered into
for the purpose of refinancing such Amended and Restated Credit Agreement, in
each case, as amended, restated, extended or otherwise modified from time to
time.
"COMMITMENT" has the meaning specified in Section 2.01(a).
"COMMITMENT INCREASE NOTICE" has the meaning specified in Section
2.20(a).
"COMMITMENT INCREASE AGREEMENT" has the meaning specified in Section
2.20(c).
"COMMITMENT PERCENTAGE" means, as to any Lender at any time, the
percentage that such Lender's Commitment then constitutes of the aggregate
Commitments (or, at any time after the Commitments shall have expired or
terminated, the percentage that the aggregate principal amount of such Lender's
Advances then outstanding constitutes of the aggregate principal amount of the
Advances then outstanding).
"CONSOLIDATED TANGIBLE NET WORTH" means, on a consolidated basis, the
excess of (i) the sum of (x) the preferred stock and common stockholders' equity
of Parent and (y) the cumulative amount by which Consolidated Tangible Net Worth
shall have been reduced by reason of non-cash write-downs of long-term assets
subsequent to December 31, 1997, over (ii) the intangible assets of Parent and
its consolidated Subsidiaries.
"CONTINGENT GUARANTY" has the meaning specified in the definition of
the term "Guaranty" contained in
7
this Section 1.01.
"CONTINUE", "CONTINUATION" and "CONTINUED" each refers to a
continuation of Advances of one Type as Advances of another Type pursuant to
Section 2.08, 2.09 or 2.14 or the continuation of Advances of the same Type for
additional Interest Periods or Contract Periods, as applicable.
"CONTRACT PERIOD" means (a) with respect to Bankers' Acceptances, the
term of a B/A Advance selected by the applicable Borrower in accordance with
Section 2.02 commencing on the date of such B/A Advance and expiring on a
Business Day which shall be either 30 days, 60 days, 90 days, 180 days or, with
the consent of each Lender, any other number of days from 1 to 180, provided
that (i) subject to subparagraph (ii) below, each such period shall be subject
to such extensions or reductions as may be determined by the Administrative
Agent to ensure that each Contract Period shall expire on a Business Day, and
(ii) no Contract Period shall extend beyond the Revolving Commitment Termination
Date and (b) with respect to a B/A Loan, an Interest Period equal to the
Contract Period of the Bankers' Acceptances for which it is a substitute.
"CURRENCY DUE" has the meaning specified in Section 2.23.
"DEBT" of any Person means, without duplication (i) indebtedness of
such Person for borrowed money or in respect of bankers' acceptances, (ii)
obligations of such Person (other than any portion of any trade payable
obligation of such Person which shall not have remained unpaid for 91 days or
more from the later of (A) the original due date of such portion and (B) the
customary payment date in the industry and relevant market for such portion) to
pay the deferred purchase price of property or services, (iii) obligations of
such Person as lessee under leases which shall have been or should be, in
accordance with GAAP, recorded as capital leases, and (iv) Overdue Reimbursement
Obligations; provided, however, that where any such indebtedness or obligation
of such Person is made jointly, or jointly and severally, with any third party
or parties, which are not the Borrowers or Parent, or any of their consolidated
Subsidiaries, the amount thereof for the purposes of this definition only shall
be the pro rata portion thereof
8
payable by such Person, so long as such third party or parties have not
defaulted on its or their joint and several portions thereof, and provided,
further, that the following shall not at any time constitute Debt: (1)
obligations of such Person to reimburse a bank or other Person in respect of
amounts paid under a letter of credit or similar instrument that are not Overdue
Reimbursement Obligations, (2) Project Financing, (3) the Morgan Gold Loans
unless, at such time, for any reason whatsoever, (A) no royalty income shall
have accrued under the Royalty Agreement dated as of December 5, 1984 between
Copper Range Company, a Michigan corporation, and LL&E during the three
consecutive fiscal quarters of LL&E most recently ended prior to such time or
(B) any payment required to have been made to LL&E under such agreement prior to
such time shall not have been paid on, or within 30 days after, the date such
payment is due, and (4) amounts borrowed by either Borrower or Parent and their
consolidated Subsidiaries under life insurance policies issued to one or more of
the foregoing and covering employees or former employees of one or more of the
foregoing not in excess of the cash surrender value of such policies.
"DISCOUNT PROCEEDS" means, for any B/A, an amount (rounded up to the
nearest whole cent, and with one-half of one cent being rounded up) calculated
on the date of the Borrowing by multiplying:
(i) the face amount of the B/A; by
(ii) the quotient of one divided by the sum of one plus the product
of
(A) the Discount Rate (expressed as a decimal) applicable to such
B/A, multiplied by
(B) a fraction, the numerator of which is the Contract Period of
the B/A and the denominator of which is 365, with such quotient being
rounded up or down to the nearest fifth decimal place, and with
.000005 being rounded up.
"DISCOUNT RATE" means:
(i) with respect to any Lender which is a Schedule I chartered
bank under the Bank Act (Canada), as applicable to a B/A being purchased by
9
such Lender on any day, the CDOR Rate; and
(ii) with respect to any Lender which is not a Schedule I chartered
bank under the Bank Act (Canada), as applicable to a B/A being purchased by
such Lender on any day, the lesser of (A) the CDOR Rate plus 10 basis
points (0.10%), and (B) the average (as determined by the Administrative
Agent in good faith) of the respective percentage discount rates (expressed
to two decimal places and rounded upward, if not in an increment of 1/100th
of 1%, to the nearest 0.01%) quoted by the Schedule II/III Reference Banks
as the percentage discount rates at which the Schedule II/III Reference
Banks would, in accordance with their normal market practices, at or about
10:00 a.m. (Toronto, Ontario time) on such date, be prepared to purchase
bankers' acceptances accepted by the Schedule II/III Reference Banks having
a face amount and term comparable to the face amount and term of such B/A.
"EFFECTIVE DATE" means the date on which the conditions precedent set
forth in Section 3.01 have been satisfied (or compliance therewith shall have
been waived by the Lenders), which date the Administrative Agent will promptly
confirm to the Borrowers and the Lenders in writing, and which date shall be no
earlier than December 5, 2002.
"EFFECTIVE FEDERAL FUNDS RATE" means, for any day, the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"ELIGIBLE ASSIGNEE" means, with respect to any particular assignment
under Section 9.07, any bank or other entity approved in writing by the
Borrowers expressly with respect to such assignment and, except as to such an
assignment by JPMorgan so long as JPMorgan is the Administrative Agent
hereunder, the Administrative
10
Agent shall be an Eligible Assignee for purposes of this Agreement, provided
that neither the Administrative Agent's nor the Borrowers' approval shall be
unreasonably withheld, and provided further that no such approval shall be
necessary if (i) the assignee is a Lender Affiliate, (ii) the assignee was a
Lender immediately prior to such assignment, or (iii) if an Event of Default
shall then be continuing.
"EQUITY INTERESTS" means any capital stock, partnership, joint venture,
member or limited liability or unlimited liability company interest, beneficial
interest in a trust or similar entity or other equity interest or investment of
whatever nature.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
from time to time thereunder.
"ERISA AFFILIATE" means any Person who is a member of Parent's
controlled group within the meaning of Section 4001(a)(14)(A) of ERISA.
"EURODOLLAR RATE" means the Cdn. Dollar Eurodollar Rate or the U.S.
Dollar Eurodollar Rate, as applicable.
"EURODOLLAR RATE ADVANCE" means a Cdn. Dollar Eurodollar Rate Advance
or a U.S. Dollar Eurodollar Rate Advance, as applicable.
"EURODOLLAR RATE MARGIN" means for any date the percentage per annum
applicable on such date as set forth in the row labeled "Applicable Margin" on
Schedule II hereto, which is based on the ratings (or lack thereof) by Moody's
or S&P or both of the public long-term senior unsecured debt securities of
Parent.
"EVENTS OF DEFAULT" has the meaning specified in Section 6.01.
"EXCHANGE RATE" shall mean with respect to U.S. Dollars on a particular
date, the rate at which U.S. Dollars may be exchanged into Cdn. Dollars as
quoted by the Bank of Canada on the Reuters Bank of Canada page (or, if not so
quoted, the spot rate of exchange quoted for wholesale transactions made by the
Administrative
11
Agent at Calgary, Alberta) at 12:00 noon, Toronto, Ontario time, on the relevant
Reuters screen currency page; provided, that if at the time of any such
determination, for any reason, no such spot rate is being quoted, the
Administrative Agent may use any reasonable method it deems applicable to
determine such rate, and such determination shall be conclusive absent manifest
error.
"EXTENSION REQUEST" means each request by each Borrower made pursuant
to Section 2.21 for the Lenders to extend the Revolving Commitment Termination
Date, which shall contain the information in respect of such extension specified
in Exhibit G and shall be delivered to the Administrative Agent in writing.
"FACILITY FEE PERCENTAGE" means for any date the percentage per annum
applicable on such date as set forth in the row labeled "Facility Fee
Percentage" on Schedule II hereto, which is based on the ratings (or lack
thereof) by Moody's or S&P or both of the public long-term senior unsecured debt
securities of Parent.
"FINAL MATURITY DATE" means the date occurring five years and one day
after the Revolving Commitment Termination Date or, if such day is not a
Business Day, the next succeeding Business Day.
"FINANCING DOCUMENTS" means this Agreement, the Notices of Borrowing
and the Notes, and each other instrument or agreement entered into by Parent or
either Borrower in connection with this Agreement, as such instrument or
agreement may be amended, modified or supplemented from time to time in
accordance herewith.
"FOREIGN LENDER" means any Lender that is neither a resident of Canada
for purposes of the Income Tax Act nor a Schedule III Bank which receives all
amounts paid under this Agreement in respect of its "Canadian banking business",
as defined in the Income Tax Act. For purposes of this definition, Canada and
each province thereof shall be deemed to constitute a single jurisdiction.
"GAAP" means generally accepted accounting principles in the United
States of America, as in effect from time to time.
12
"GUARANTEED PARTIES" means the Administrative Agent, the Arranger, the
Lenders and each other Person to whom any of the Obligations are or shall be
owed.
"GUARANTOR" means each of (i) the Parent, in its capacity as guarantor
of the Obligations of BRCL and Canadian Hunter, (ii) BRCL, in its capacity as
guarantor of the Obligations of Canadian Hunter, and (iii) Canadian Hunter, in
its capacity as guarantor of the Obligations of BRCL and "GUARANTORS" means,
collectively, all of the foregoing.
"GUARANTY", "GUARANTEED" and "GUARANTEEING" each means any act by which
a Person assumes, guarantees, endorses or otherwise incurs direct or contingent
liability in connection with, or agrees to purchase or otherwise acquire or
otherwise assures a creditor against loss in respect of, any Debt or Project
Financing of any Person other than the Borrowers, the Parent or any of their
consolidated Subsidiaries (excluding (i) any liability by endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business, (ii) any liability in connection with obligations
of the Borrowers, Parent or any of their consolidated Subsidiaries, including
obligations under any conditional sales agreement, equipment trust financing or
equipment lease, (iii) any liability or other act of the Borrowers, Parent or
any of their consolidated Subsidiaries under arrangements entered into in
connection with the CLAM Credit Agreement, U.S. Short-Term Revolving Credit
Agreement or the U.S. Long-Term Revolving Credit Agreement, and (iv) any such
act in connection with a Project Financing that either (A) guarantees to the
provider of such Project Financing or any other Person performance of the
acquisition, improvement, installation, design, engineering, construction,
development, completion, maintenance or operation of, or otherwise affects any
such act in respect of, all or any portion of the project that is financed by
such Project Financing or performance by a Project Financing Subsidiary of
certain obligations to Persons other than the provider of such Project
Financing, except during any period, and then only to the extent, that such
guaranty is a direct guaranty of payment of such Project Financing (other than a
guaranty of payment of the type referred to in subclause (B) below) or (B) is
contingent upon, or the obligation to pay or perform under which is contingent
upon, the
13
occurrence or existence of any event or condition other than or in addition to
(1) the passage of time, (2) any Project Financing becoming due, (3) the
commencement of bankruptcy, insolvency or similar proceedings by the obligor on
any Project Financing or (4) the failure of the obligor on any Project Financing
to satisfy a financial ratio, covenant or other similar financial measurement
test, but only during such period as such act is not by its terms presently
enforceable, or if so enforceable, there is not a reasonable probability that
the guarantor will be called upon to perform thereunder (or to make capital
contributions in lieu of performance thereunder) (any such act referred to in
this clause (iv) being a "Contingent Guaranty")); provided, however, that for
the purposes of this definition the liability of the Borrowers, Parent or any of
their Subsidiaries with respect to any obligation as to which a third party or
parties are jointly, or jointly and severally, liable as a guarantor or
otherwise as contemplated hereby and have not defaulted on its or their portions
thereof, shall be only its pro rata portion of such obligation.
"INCOME TAX ACT" means the Income Tax Act (Canada), as amended from
time to time.
"INDEMNIFIED PARTY" means any or all of the Lenders, the Arranger and
the Administrative Agent.
"INITIAL LENDERS" has the meaning specified in the introduction to this
Agreement.
"INSUFFICIENCY" means, with respect to any Plan, the amount, if any, of
its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.
"INTEREST PERIOD" means (a) for each Eurodollar Rate Advance (other
than a B/A Loan) comprising part of the same Borrowing, the period beginning on
the date of such Advance or the date of the Continuation of any Advance as such
Advance and ending on the last day of the period selected by the applicable
Borrower pursuant to the provisions below and, thereafter, each subsequent
period commencing on the last day of the immediately preceding Interest Period
and ending on the last day of the period selected by the applicable Borrower
pursuant to the provisions below and (b) for each B/A Loan, the period beginning
on the date of such B/A Loan and ending on the last day of the Contract Period
of the Bankers'
14
Acceptances for which such B/A Loan is a substitute. The duration of each such
Interest Period for a Eurodollar Rate Advance (other than a B/A Loan) shall be
(i) one, two, three or six months upon notice received by the Administrative
Agent not later than 10:00 a.m. (Calgary local time) on the third Business Day
prior to the first day of such Interest Period, or (ii) subject to availability
to each Lender, nine or twelve months upon notice received by the Administrative
Agent not later than 10:00 a.m. (Calgary local time) on the fourth Business Day
prior to the first day of such Interest Period, in each case as the applicable
Borrower may select; provided, however, that:
(A) the duration of any Interest Period which commences before the
Termination Date and would otherwise end after the Termination Date
shall end on the Termination Date and the duration of any Interest
Period which would otherwise end after the Final Maturity Date shall
end on the Final Maturity Date;
(B) if the last day of such Interest Period would otherwise occur on a
day which is not a Business Day, such last day shall be extended to the
next succeeding Business Day, except if such extension would cause such
last day to occur in a new calendar month, then such last day shall
occur on the next preceding Business Day;
(C) Interest Periods commencing on the same date for Advances
comprising the same Borrowing shall be of the same duration; and
(D) any Interest Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (A) above, end on the last Business
Day of a calendar month.
"JPMORGAN" means JPMorgan Chase Bank, Toronto Branch.
"JUDGMENT CURRENCY" has the meaning specified in Section 2.23.
15
"LENDER AFFILIATE" means, with respect to any Lender, (a) an Affiliate
of such Lender or (b) any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise investing
in bank loans and similar extensions of credit in the ordinary course of its
business and is administered or managed by a Lender or an Affiliate of such
Lender (with such Lender or Affiliate having the sole right and responsibility
with respect to the approval of amendments and waivers to this Agreement, the
Notes and all related agreements and instruments entered into from time to
time).
"LENDERS" means the Initial Lenders, each bank or other financial
institution that shall become a party hereto pursuant to Section 2.20, and each
Eligible Assignee that shall become a party hereto pursuant to Section 9.07(a),
(b) and (d).
"LIEN" means any lien, security interest or other charge or
encumbrance, or any assignment of the right to receive income, or any other type
of preferential arrangement, in each case to secure any Debt or any Guaranty of
any Person; provided that (i) the creation of interests in property of the
character commonly referred to as a "royalty interest" or "overriding royalty
interest", farmouts, joint operating or unitization agreements, or other similar
transactions in the ordinary course of business and (ii) borrowings under life
insurance policies as described in clause (4) of the proviso to the definition
of "Debt" shall not be deemed to create a Lien.
"LL&E" means The Louisiana Land and Exploration Company, a Maryland
corporation and a wholly-owned Subsidiary of the Parent.
"MAJORITY LENDERS" means i) for purposes of acceleration of the
Advances and other amounts outstanding under Article 6 hereof, Lenders holding
at least 51% of the then aggregate unpaid principal amount of the Advances held
by Lenders or (ii) for all other purposes of this Agreement, Lenders having at
least 51% of the Commitments.
"MARGIN STOCK" means "margin stock" as defined in Regulation U of the
Board of Governors of the United States Federal Reserve System, as in effect
from time to
16
time.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
financial condition or operations of Parent and its consolidated Subsidiaries on
a consolidated basis.
"MATERIAL PLAN" means any Plan the assets of which exceed
U.S.$50,000,000 or the liabilities of which for unfunded vested benefits
determined on a plan termination basis (in accordance with Title IV of ERISA)
exceed U.S.$10,000,000.
"MATERIAL SUBSIDIARY" means, from time to time, any Subsidiary of
Parent (other than a Project Financing Subsidiary) then owning assets
(determined on a consolidated basis) that equal or exceed 10% of the book value
of the consolidated assets of Parent and its consolidated Subsidiaries at such
time; provided that for purposes of this definition the term "Material
Subsidiary" shall always include each of the Borrowers and their successors.
"MOODY'S" means Moody's Investors Service, Inc.
"MORGAN" means Morgan Guaranty Trust Company of New York, and its
successors.
"MORGAN GOLD LOANS" means the obligations of LL&E under the respective
Credit Agreements dated as of December 23, 1994 and March 31, 1995 between LL&E
and Morgan, or under any additional credit agreements on substantially similar
terms, in each case, as amended, restated, extended or otherwise modified from
time to time, provided that the aggregate outstanding amount borrowed thereunder
shall at no time exceed 35,000 ounces of gold.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which Parent or any ERISA Affiliate is making or accruing
an obligation to make contributions, or has within any of the preceding five
plan years made or accrued an obligation to make contributions, such plan being
maintained pursuant to one or more collective bargaining agreements.
"MULTIPLE EMPLOYER PLAN" means a single employer
17
plan, as defined in Section 4001(a)(15) of ERISA, which (i) is maintained for
employees of Parent or an ERISA Affiliate and at least one Person other than the
Borrowers, Parent and its ERISA Affiliates or (ii) was so maintained and in
respect of which Parent or an ERISA Affiliate could have liability under Section
4064 or 4069 of ERISA in the event such plan has been or were to be terminated.
"NEW LENDER" has the meaning specified in Section 2.20(b).
"NEW LENDER AGREEMENT" has the meaning specified in Section 2.20(b).
"NOTE" means a promissory note of a Borrower payable to the order of
any Lender, in substantially the form of Exhibit A hereto, evidencing the
aggregate indebtedness of such Borrower to such Lender resulting from the
Advances made by such Lender.
"NOTICE of BORROWING" has the meaning specified in Section 2.02(a).
"NOTICE OF CONTINUATION" has the meaning specified in Section 2.09.
"OBJECTING LENDERS" has the meaning specified in Section 2.21(a).
"OBLIGATIONS" means (a) the obligations of each Borrower in respect of
the due and punctual payment of (i) the principal of and interest on the
Advances made to it and the Notes executed by it when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, and (ii) all fees, expenses, indemnities, expense reimbursement
obligations and other obligations, monetary or otherwise, of either Borrower
under this Agreement or any other Financing Document and (b) all other
obligations, monetary or otherwise, of either Borrower under each Financing
Document to which it is a party.
"OFFERED INCREASE AMOUNT" has the meaning specified in Section 2.20(a).
"ORIGINAL EFFECTIVE DATE" means February 25, 1998.
18
"OTHER TAXES" has the meaning specified in Section 2.16(d) of this
Agreement.
"OVERDUE REIMBURSEMENT OBLIGATIONS" means, with respect to any Person,
non-contingent obligations of such Person to reimburse a bank or other Person in
respect of amounts paid under a letter of credit or similar instrument that are
not paid on or prior to the fifth Business Day after the due date therefor.
"PARENT" has the meaning specified in the introduction to this
Agreement.
"PAYMENT OFFICE" means the Administrative Agent's office located at 200
Bay Street, Suite 1800, Royal Bank Plaza, South Tower, Toronto, Ontario M5J 2J2
(or such other office or individual as the Administrative Agent may hereafter
designate in writing to the other parties hereto).
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"PERMITTED ASSETS" means (i) hydrocarbon or other reserves (including
proved, probable, possible or speculative reserves), (ii) properties, assets,
rights or business related to reserves (including real property, gathering
systems, plants, pipelines, equipment and processing and treatment facilities),
(iii) other fixed or operating assets and (iv) Equity Interests in any and all
Business Entities that are or become Subsidiaries of a Borrower or Parent owning
assets referred to in any of the foregoing clauses.
"PERMITTED LIENS" means:
(i) inchoate Liens and charges imposed by law and incidental to
construction, maintenance, development or operation of properties, or the
operation of business, in the ordinary course of business if payment of the
obligation secured thereby is not yet overdue or if the validity or amount
of which is being contested in good faith by either Borrower, Parent or any
of their respective Subsidiaries;
(ii) Liens for taxes, assessments, obligations under workers'
compensation or other social security
19
legislation or other governmental requirements, charges or levies, in each
case not yet overdue;
(iii) Liens reserved in any oil, gas or other mineral lease entered
into in the ordinary course of business for rent, royalty or delay rental
under such lease and for compliance with the terms of such lease;
(iv) easements, servitudes, rights-of-way and other rights,
exceptions, reservations, conditions, limitations, covenants and other
restrictions which do not materially interfere with the operation, value or
use of the properties affected thereby;
(v) conventional provisions contained in any contracts or
agreements affecting properties under which either Borrower, Parent or any
of their respective Subsidiaries is required immediately before the
expiration, termination or abandonment of a particular property to reassign
to such Person's predecessor in title all or a portion of such Person's
rights, titles and interests in and to all or a portion of such property;
(vi) any Lien reserved in a grant or conveyance in the nature of a
farm-out or conditional assignment to either Borrower, Parent or any of
their respective Subsidiaries entered into in the ordinary course of
business on reasonable terms to secure undertakings of either Borrower,
Parent or any such Subsidiary in such grant or conveyance;
(vii) any Lien consisting of (A) statutory landlord's liens under
leases to which either Borrower, Parent or any of their respective
Subsidiaries is a party or other Liens on leased property reserved in
leases thereof for rent or for compliance with the terms of such leases,
(B) rights reserved to or vested in any municipality or governmental,
statutory or public authority to control or regulate any property of either
Borrower, Parent or any of their respective Subsidiaries, or to use such
property in any manner which does not materially impair the use of such
property for the purposes for which it is held by such Borrower, Parent or
any such Subsidiary, (C) obligations or duties to any municipality or
public authority with respect to any franchise, grant, license, lease or
20
permit and the rights reserved or vested in any governmental authority or
public utility to terminate any such franchise, grant, license, lease or
permit or to condemn or expropriate any property, and (D) zoning laws and
ordinances and municipal regulations;
(viii) Liens on Equity Interests in, or Debt or other obligations of,
CLAM owned by the Parent, either Borrower or any of their respective
Subsidiaries, which Liens secure Debt of CLAM; and
(ix) any Lien on any assets (including Equity Interests and other
obligations) securing Debt incurred or assumed for the purpose of financing
all or any part of the cost of acquiring, improving, installing, designing,
engineering, developing (including drilling), or constructing such assets,
provided that such Lien attaches to such assets concurrently with or within
360 days after the acquisition or completion of development, construction
or installation thereof or improvement thereto.
"PERSON" means an individual, a Business Entity, or a country or any
political subdivision thereof or any agency or instrumentality of such country
or subdivision.
"PLAN" means a Single Employer Plan or a Multiple Employer Plan.
"PRIME RATE" means, for each day in any period, a fluctuating interest
rate per annum as shall be in effect from time to time which rate per annum
shall at all times for such day be equal to the higher of:
(i) the annual rate of interest announced publicly by the
Administrative Agent and in effect as its prime rate at its principal
office in Toronto, Ontario on such day for determining interest rates on
Cdn. Dollar-denominated commercial loans made in Canada; and
(ii) 0.50% per annum above the 30 day CDOR Rate in effect on such
date.
"PRIME RATE ADVANCE" means an Advance denominated in Cdn. Dollars that
bears interest at a rate
21
based on the Prime Rate, as provided in Section 2.06(a)(i).
"PRIME RATE BORROWING" means a Borrowing comprised of one or more Prime
Rate Advances.
"PROJECT FINANCING" means any Debt incurred to finance or refinance the
acquisition, improvement, installation, design, engineering, construction,
development, completion, maintenance or operation of, or otherwise in respect
of, all or any portion of any project, or any asset related thereto, and any
Guaranty with respect thereto, other than any portion of such Debt or Guaranty
permitting or providing for recourse against Parent, either Borrower or any of
their respective Subsidiaries other than (i) recourse to the Equity Interests
in, Debt or other obligations of, or assets of, one or more Project Financing
Subsidiaries, and (ii) such recourse as exists under any Contingent Guaranty.
"PROJECT FINANCING SUBSIDIARY" means any Subsidiary of Parent or a
Borrower whose principal purpose is to incur Project Financing, or to become a
direct or indirect partner, member or other equity participant or owner in a
Business Entity so created, and substantially all the assets of which Subsidiary
or Business Entity are limited to those assets being financed (or to be
financed), or the operation of which is being financed (or to be financed), in
whole or in part by a Project Financing or to Equity Interests in, or Debt or
other obligations of, one or more other such Subsidiaries or Business Entities.
"RE-ALLOCATION DATE" has the meaning specified in Section 2.20(e).
"REFERENCE BANKS" means JPMorgan, Citibank, N.A., Canadian branch and
Bank of America, N.A., Canada Branch.
"REGISTER" has the meaning specified in Section 9.07(c).
"REQUIRED LENDERS" means Lenders (i) that are not Objecting Lenders
with respect to any previous Extension Request and (ii) that have Commitment
Percentages aggregating at least 51% of the aggregate Commitment Percentages of
such non-Objecting Lenders.
22
"RESET DATE" has the meaning specified in Section 2.24.
"REVOLVING ADVANCE" means an Advance made or to be made by a Lender
pursuant to Section 2.01(a).
"REVOLVING COMMITMENT TERMINATION DATE" means December 4, 2003, or, at
the option of the Borrowers, such later date as shall be determined pursuant to
the provisions of Section 2.21 with respect to non-Objecting Lenders, provided
that if such date is not a Business Day, the Revolving Commitment Termination
Date shall be the next preceding business day.
"S&P" means Standard and Poor's, a division of The McGraw-Hill
Companies, Inc.
"SCHEDULE I BANKS" means a bank that is a Canadian chartered bank
listed on Schedule I under the Bank Act (Canada).
"SCHEDULE I REFERENCE BANKS" means each of Royal Bank of Canada and
such other Schedule I Banks as are agreed to from time to time by the Borrowers
and the Administrative Agent, each acting reasonably; provided that there shall
be no more than three Schedule I Reference Banks at any one time.
"SCHEDULE II LENDER" has the meaning specified in Section 1.05 of this
Agreement.
"SCHEDULE II/III REFERENCE BANKS" means JPMorgan Chase Bank, Toronto
Branch, Citibank, N.A., Canadian branch and Bank of America, N.A., Canada Branch
or such other Schedule II chartered banks under the Bank Act (Canada) or
Schedule III Banks as are mutually agreed upon by the Administrative Agent and
the Borrowers.
"SCHEDULE III BANK" means a bank listed on Schedule III under the Bank
Act (Canada).
"SINGLE EMPLOYER PLAN" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (i) is maintained for employees of Parent or
an ERISA Affiliate and no Person other than Parent and its ERISA Affiliates or
(ii) was so maintained and in respect of which Parent or an ERISA Affiliate
could have liability under Section 4069 of ERISA in the event such plan has
23
been or were to be terminated.
"SUBSIDIARY" means, as to any Person, any Business Entity of which
shares of stock or other Equity Interests having ordinary voting power (other
than stock or such other Equity Interests having such power only by reason of
the happening of a contingency) to elect a majority of the board of directors or
other managers of such Business Entity are at the time owned, directly or
indirectly through one or more Subsidiaries, or both, by such Person. Unless
otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries" in
this Agreement shall refer to a Subsidiary or Subsidiaries of Parent.
"TAXES" has the meaning specified in Section 2.16(b) of this Agreement.
"TERMINATION DATE" means the earlier of (i) the Revolving Commitment
Termination Date and (ii) the date of termination in whole of the Commitments
pursuant to Section 2.04 or 6.01.
"TERMINATION EVENT" means (i) a "reportable event," as such term is
described in Section 4043 of ERISA (other than a "reportable event" not subject
to the provision for 30-day notice to the PBGC), or an event described in
Section 4062(e) of ERISA, or (ii) the withdrawal of Parent or any ERISA
Affiliate from a Multiple Employer Plan during a plan year in which it was a
"substantial employer," as such term is defined in Section 4001(a)(2) of ERISA,
or the incurrence of liability by Parent or any ERISA Affiliate under Section
4064 of ERISA upon the termination of a Multiple Employer Plan, or (iii) the
filing of a notice of intent to terminate a Plan or the treatment of a Plan
amendment as a termination under Section 4041 of ERISA, or (iv) the institution
of proceedings to terminate a Plan by the PBGC under Section 4042 of ERISA, or
(v) the conditions set forth in Section 302(f)(1)(A) and (B) of ERISA to the
creation of a lien upon property or rights to property of Parent or any ERISA
Affiliate for failure to make a required payment to a Plan are satisfied, or
(vi) the adoption of an amendment to a Plan requiring the provision of security
to such Plan, pursuant to Section 307 of ERISA, or (vii) any other event or
condition which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan.
24
"TERM ADVANCE" means an Advance made or to be made by a Lender pursuant
to Section 2.01(b).
"TRANSACTIONS" means the execution, delivery and performance by the
Borrowers and Parent (as applicable) of this Agreement and the other Financing
Documents and the borrowing of Advances.
"TYPE" has the meaning specified in the definition of "Advance".
"U.S.$" and "U.S. DOLLARS" means lawful money of the United States of
America.
"U.S. DOLLAR EURODOLLAR RATE" means, for any Interest Period for each
U.S. Dollar Eurodollar Rate Advance comprising part of the same Borrowing, the
interest rate per annum equal to the average (rounded upward to the nearest
whole multiple of 1/16 of 1% per annum, if such average is not such a multiple)
of the rate per annum at which deposits in U.S. Dollars are offered by the
principal office of each of the Reference Banks in London, England, to prime
banks in the London interbank market at 11:00 A.M. (London, England time) two
Business Days before the first day of such Interest Period in an amount
comparable to the amount of such Borrowing and for a period equal to such
Interest Period. The U.S. Dollar Eurodollar Rate for the Interest Period for
each U.S. Dollar Eurodollar Rate Advance comprising part of the same Borrowing
shall be determined by the Administrative Agent on the basis of applicable rates
furnished to and received by the Administrative Agent from the Reference Banks
two Business Days before the first day of such Interest Period, subject,
however, to the provisions of Section 2.08.
"U.S. DOLLAR EURODOLLAR RATE ADVANCE" means an Advance denominated in
U.S. Dollars that bears interest determined by reference to the U.S. Dollar
Eurodollar Rate, as provided in Section 2.06(a)(iii)(y).
"U.S. LONG-TERM REVOLVING CREDIT AGREEMENT" means the Long-Term
Revolving Credit Agreement dated as of February 25, 1998, as amended and
restated as of December 7, 2001, as amended by Amendment No. 1, dated as of
April 25, 2002, and as amended by Amendment No. 2 as of December 5, 2002, and as
may be further amended from time to time hereafter, among the Parent, the
financial
25
institutions party thereto, JPMorgan Chase Bank, as administrative agent and
auction administrative agent for such financial institutions, Citibank, N.A. and
Fleet National Bank, as co-syndication agents, and Bank of America, N.A. and The
Toronto-Dominion Bank, as co-documentation agents.
"U.S. SHORT-TERM REVOLVING CREDIT AGREEMENT" means the Short-Term
Revolving Credit Agreement dated as of February 25, 1998, as amended and
restated as of December 7, 2001, as amended by Amendment No. 1, dated as of
April 25, 2002, and as further amended and restated as of December 5, 2002, and
as may be further amended from time to time hereafter, among the Parent, the
financial institutions party thereto, JPMorgan Chase Bank, as administrative
agent and auction administrative agent for such financial institutions,
Citibank, N.A. and Fleet National Bank, as co-syndication agents, and Bank of
America, N.A., and The Bank of Nova Scotia, as co-documentation agents.
"UTILIZATION FEE PERIOD" means any period during the term of this
Agreement commencing on the Effective Date or on a subsequent January 1, April
1, July 1 or October 1 and ending in each case on the earliest to occur of the
next succeeding March 31, June 30, September 30 or December 31 and the
Termination Date.
"WITHDRAWAL LIABILITY" shall have the meaning given such term under
Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02 COMPUTATION OF TIME PERIODS. Unless otherwise stated
in this Agreement, in the computation of a period of time from a specified date
to a later specified date, the word "from" means "from and including" and the
words "to" and "until" each means "to but excluding."
SECTION 1.03 ACCOUNTING AND OTHER TERMS. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP, either
(i) consistent with those principles applied in the preparation of the annual
financial statements referred to in Section 4.01(e), or (ii) not so materially
inconsistent with such principles that a covenant contained in Section 5.01 or
5.02 would be calculated or construed in a materially different manner or with
materially
26
different results than if such covenant were calculated or construed in
accordance with clause (i) of this Section 1.03. "INCLUDE", "INCLUDES" and
"INCLUDING" shall be deemed to be followed by "without limitation" whether or
not they are in fact followed by such words or words of like import. References
to any agreement or contract are to such agreement or contract as amended,
modified or supplemented from time to time in accordance with the terms hereof
and thereof.
SECTION 1.04 REFERENCES. The words "HEREOF", "HEREIN" and
"HEREUNDER" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and Article, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
SECTION 1.05 SCHEDULE III BANKS. Upon the assignment in accordance
with Section 9.07 by any Lender that is a Schedule II chartered bank under the
Bank Act (Canada) (a "Schedule II Lender") of the rights and obligations of such
Schedule II Lender hereunder to its Lender Affiliate that is a Schedule III
Bank, all references herein to such Schedule II Lender shall be deemed to be
references to such Schedule III Bank.
ARTICLE 2
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01 REVOLVING ADVANCES. (a) Each Lender severally agrees,
on the terms and conditions hereinafter set forth, to make Revolving Advances to
the Borrowers from time to time on any Business Day during the period from the
Effective Date to and including the Termination Date in an aggregate amount not
to exceed at any time outstanding the amount set forth opposite such Lender's
name on Schedule III hereto, or, if such Lender has entered into any Assignment
and Acceptance or Commitment Increase Agreement or a New Lender Agreement, set
forth for such Lender in the Register maintained by the Administrative Agent
pursuant to Section 9.07(c), as such amount may be reduced pursuant to Section
2.04 (such Lender's "COMMITMENT"). Subject to Section 2.11(e) with respect to
B/A Advances, each Borrowing consisting of Revolving Advances shall be in an
aggregate amount that
27
is (a) not less than Cdn.$5,000,000 in the case of a Borrowing comprised of
Prime Rate Advances, (b) not less than U.S.$5,000,000 in the case of a Borrowing
comprised of Base Rate Advances, (c) not less than Cdn.$10,000,000 in the case
of a Borrowing comprised of Cdn. Dollar Eurodollar Rate Advances, and (d) not
less than U.S.$10,000,000 in the case of a Borrowing comprised of U.S. Dollar
Eurodollar Rate Advances (or, in the case of a Borrowing of Prime Rate Advances
or Base Rate Advances, the aggregate unused Commitments, if less) and shall
consist of Advances of the same Type made on the same day by the Lenders ratably
according to their respective Commitments. Notwithstanding the foregoing, a
Foreign Lender shall not accept Bankers' Acceptances, and shall not be required
to make Prime Rate Advances and no Lender (other than a Foreign Lender pursuant
to Section 2.11(i)) shall be required to make Cdn. Dollar Eurodollar Rate
Advances. If a Borrowing of Prime Rate Advances is requested, a Foreign Lender
will participate in such Borrowing by way of Base Rate Advances. If a Borrowing
by way of Bankers' Acceptances is requested, a Foreign Lender will participate
in such Borrowing by way of Cdn. Dollar Eurodollar Rate Advances in accordance
with Section 2.11(i). Within the limits of each Lender's Commitment, the
Borrowers may make more than one Borrowing on any Business Day and may borrow,
prepay pursuant to Section 2.10, and reborrow under this Section 2.01(a).
(b) TERM ADVANCES. On the Revolving Commitment Termination Date
(unless the Commitments shall have been terminated in full pursuant to Article
6), each outstanding Revolving Advance will Continue as a Term Advance to the
applicable Borrower of like amount. Term Advances that are repaid or prepaid,
and not Continued, may not be reborrowed; provided, however, that Advances may
be Continued, at the election of the applicable Borrower, through the Final
Maturity Date by the delivery of a Notice of Continuation. Eurodollar Rate
Advances and B/A Loans for which the Interest Period shall not have terminated
as of the Revolving Commitment Termination Date shall be Continued as Eurodollar
Rate Advances or B/A Loans, as the case may be, for the then applicable Interest
Period and Prime Rate Advances and Base Rate Advances shall be Continued as
Prime Rate Advances or Base Rate Advances, as applicable, after the Revolving
Commitment Termination Date, unless the applicable Borrower shall have elected
otherwise by delivery of a Notice of Continuation. In accordance with
28
Section 2.08, the applicable Borrower may elect to Continue Borrowings as
Borrowings of the same or a different Type or, in the case of a Eurodollar Rate
Advance or B/A Advance, may elect Interest Periods or Contract Periods therefor;
provided that the Borrowers shall not be entitled to elect to Continue any
Borrowings if the Interest Period or Contract Period requested with respect
thereto would end after the Final Maturity Date. After the Revolving Commitment
Termination Date, no Lender shall have any further Commitment to make additional
Advances.
SECTION 2.02 MAKING THE ADVANCES.
(a) Each Borrowing shall be made on notice by the applicable
Borrower to the Administrative Agent (a "NOTICE OF BORROWING") received by the
Administrative Agent:
(i) in the case of a proposed Borrowing comprised of Prime Rate
Advances or Base Rate Advances on the day of notice, provided that notice
is received by the Administrative Agent not later than 9:00 A.M. (Calgary
local time) on the Business Day of such proposed Borrowing;
(ii) in the case of a proposed Borrowing comprised of Eurodollar
Rate Advances, not later than 10:00 a.m. (Calgary local time) on the third
Business Day prior to the date of such proposed Borrowing; and
(iii) in the case of a proposed Borrowing comprised of B/A Advances,
not later than 10:00 a.m. (Calgary local time) on the second Business Day
prior to the date of such proposed Borrowing or, if such Borrowing shall
include B/A Loans, on the third Business Day prior to the date of such
proposed Borrowing.
Each Notice of Borrowing shall be by telecopy, telefax or other
teletransmission or by telephone (and if by telephone, confirmed promptly by
telecopier, telefax or other teletransmission), in substantially the form of
Exhibit B hereto, specifying therein the requested (w) date of such Borrowing,
(x) Type of Advances comprising such Borrowing and, additionally, whether such
Borrowing consists of Revolving Advances or Term
29
Advances, (y) aggregate amount of such Borrowing, and (z) in the case of a
Borrowing comprised of Eurodollar Rate Advances, the initial Interest Period and
currency for each such Advance, and in the case of a B/A Advance, the initial
Contract Period for such B/A Advance. Promptly following receipt of the Notice
of Borrowing (and in any event not later than 10:00 a.m. (Calgary local time) on
the date of the proposed Borrowing), the Administrative Agent shall advise each
Lender of the details thereof and of the amount of such Lender's Advance to be
made as part of the requested Borrowing. Each Lender shall, before 11:00 a.m.
(Calgary local time) on the date of such Borrowing, make available for the
account of its Applicable Lending Office to the Administrative Agent in care of
its Payment Office, or at such other location designated by notice from the
Administrative Agent to the Lenders pursuant to Section 9.02, in same day funds,
such Lender's ratable portion of such Borrowing. Immediately after the
Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article 3, but no later than 12:00 noon
(Calgary local time) on the same date the Administrative Agent will make such
funds available to the applicable Borrower at the Payment Office of the
Administrative Agent, or at any account of the applicable Borrower maintained by
the Administrative Agent (or any successor Administrative Agent) designated by
the applicable Borrower and agreed to by the Administrative Agent (or such
successor Administrative Agent), in same day funds.
(b) If no election as to the Type or duration of Advance is
specified, then the requested Advance shall be a Prime Rate Advance (if
denominated in Cdn. Dollars) or a Base Rate Advance (if denominated in U.S.
Dollars). If no currency is specified, the Advance shall be denominated in Cdn.
Dollars.
(c) Each Notice of Borrowing shall be irrevocable and binding on
the applicable Borrower. In the case of any Borrowing which the related Notice
of Borrowing specified is to be comprised of Eurodollar Rate Advances, if such
Advances are not made as a result of any failure to fulfill on or before the
date specified for such Borrowing the applicable conditions set forth in Article
3, the applicable Borrower shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of such failure, including any loss,
cost or expense incurred by reason of the liquidation or
30
reemployment of deposits or other funds acquired by such Lender to fund the
Advance to be made by such Lender as part of such Borrowing.
(d) Unless the Administrative Agent shall have received notice
from a Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with subsections (a) and (c) of this Section 2.02 and the
Administrative Agent may, in reliance upon such assumption, make available to
the applicable Borrower on such date a corresponding amount. If and to the
extent such Lender shall not have so made such ratable portion available to the
Administrative Agent, such Lender and the applicable Borrower severally agree to
repay to the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to the applicable Borrower until the date such amount is repaid to the
Administrative Agent, at the Prime Rate for such day. If such Lender shall repay
to the Administrative Agent such corresponding amount, such amount so repaid
shall constitute such Lender's Advance to the applicable Borrower as part of
such Borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the Advance to be made by it
as part of any Borrowing shall not relieve any other Lender of its obligation,
if any, hereunder to make its Advance on the date of such Borrowing, 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 date of any Borrowing.
SECTION 2.03 FEES.
(a) FACILITY FEE. The Borrowers agree to pay to the Administrative
Agent for the account of each Lender a facility fee on the average daily amount
of such Lender's Commitment, whether or not used or deemed used, from the
Effective Date in the case of each Initial Lender and from the effective date
specified in the Assignment and Acceptance or Commitment Increase Agreement
pursuant to which it became a Lender in the case of each other Lender, in each
case until the Termination Date, payable quarterly in arrears on the
31
last day of each March, June, September and December during the term of such
Lender's Commitment and on the Termination Date, at a rate per annum equal to
the Facility Fee Percentage in effect from time to time.
(b) UTILIZATION FEE. Each Borrower agrees to pay to the
Administrative Agent for the account of each Lender (i) for any Utilization Fee
Period, if during such Utilization Fee Period the Average Aggregate Facility
Advances were greater than 25% and less than or equal to 50% of the Average
Aggregate Facility Commitments, a utilization fee of 0.125% per annum on the
average daily amount of such Lender's Advances to such Borrower during such
Utilization Fee Period; and (ii) for any Utilization Fee Period, if during such
Utilization Fee Period the Average Aggregate Facility Advances were greater than
50% of the Average Aggregate Facility Commitments, a utilization fee of 0.25%
per annum on the average daily amount of such Lender's Advances to such Borrower
during such Utilization Fee Period. If a utilization fee is owing in respect of
any Utilization Fee Period, such fee shall be payable on the last day of such
Utilization Fee Period.
(c) TERM ADVANCE PREMIUM FEE. Each Borrower agrees to pay to the
Administrative Agent for the account of each Lender a premium fee of 0.25% per
annum on the average daily amount of the outstanding principal amount of such
Lender's Term Advances to such Borrower hereunder, payable quarterly in arrears
on the last day of each March, June, September and December and on the date on
which the last of such Lender's Term Advances shall be repaid.
(d) AGENCY FEE. Each Borrower agrees to pay to the Administrative
Agent, for its own account, such agency fees as may be separately agreed to in
writing by the Borrowers and the Administrative Agent, such fees to be in the
amounts and payable on the dates as may be so agreed to.
SECTION 2.04 REDUCTION OF THE COMMITMENTS. The Borrowers shall
have the right, upon at least three Business Days' written notice to the
Administrative Agent, to terminate in whole or reduce ratably in part the unused
portions of the Commitments of the Lenders (being the amount by which such
Commitments exceed the aggregate outstanding principal amount of all Advances),
32
provided that each partial reduction shall be in the aggregate amount of
Cdn.$10,000,000 or any whole multiple of Cdn.$1,000,000 in excess thereof.
SECTION 2.05 REPAYMENT OF ADVANCES.
(a) Each Borrower shall repay to each Lender on the Final Maturity
Date the aggregate principal amount of the Advances made to it, together
with accrued interest thereon, then owing to such Lender.
(b) Subject to Section 2.05(c), after the Revolving Commitment
Termination Date, the applicable Borrower shall repay the principal amount
of the Advances made to it in equal semi-annual installments, each in an
amount equal to two and one-half percent (2.5%) of the aggregate
outstanding principal amount of the Advances made to it on the Revolving
Commitment Termination Date. Such installments shall be due and payable on
each June 30 and December 31 of each year, the first such installment being
due and payable on the first December 31 occurring after the Revolving
Commitment Termination Date, with the final installment due and payable on
the Final Maturity Date in an amount equal to the aggregate unpaid
principal amount of such Advances made to it outstanding on the Final
Maturity Date.
(c) Subject to Article 6, but notwithstanding any other provision
of this Agreement, neither Borrower shall be required to repay more than
25% of the principal amount (as defined in the Income Tax Act) of the
Advances made to it prior to five years and one day after the Revolving
Commitment Termination Date, including, but not limited to payments under
Section 2.05(b) and Section 2.10(b).
(d) The Borrowers shall provide written notice to the
Administrative Agent substantially in the form of Exhibit C hereto of any
repayments pursuant to this Section 2.05 at least 2 Business Days prior to
such repayment.
SECTION 2.06 INTEREST ON ADVANCES.
(a) ORDINARY INTEREST. Each Borrower shall pay interest on the
unpaid principal amount of each Advance
33
made to it and owing to each Lender from the date of such Advance until such
principal amount is due (whether at stated maturity, by acceleration or
otherwise), at the following rates:
(i) PRIME RATE ADVANCES. During such periods as such Advance is a
Prime Rate Advance, a rate per annum equal at all times to the Prime Rate
in effect from time to time plus, following the Revolving Commitment
Termination Date, as additional interest in lieu of the facility fee, the
Facility Fee Percentage in effect from time to time, payable quarterly in
arrears on the last day of each March, June, September and December during
such periods and on the date such Prime Rate Advance shall be Continued or
due (whether at stated maturity, by acceleration or otherwise).
(ii) BASE RATE ADVANCES. During such periods as such Advance is a
Base Rate Advance, a rate per annum equal at all times to the Base Rate in
effect from time to time plus, following the Revolving Commitment
Termination Date, as additional interest in lieu of the facility fee, the
Facility Fee Percentage in effect from time to time, payable quarterly in
arrears on the last day of each March, June, September and December during
such periods and on the date such Base Rate Advance shall be Continued or
due (whether at stated maturity, by acceleration or otherwise).
(iii) EURODOLLAR RATE ADVANCES. During such periods as such Advance
is (x) a Cdn. Dollar Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the sum of the Cdn.
Dollar Eurodollar Rate for such Interest Period plus the Eurodollar Rate
Margin in effect from time to time plus, following the Revolving Commitment
Termination Date, as additional interest in lieu of the facility fee, the
Facility Fee Percentage in effect from time to time, payable on the last
day of each such Interest Period and, if any such Interest Period has a
duration of more than three months, on each day which occurs during such
Interest Period every three months from the first day of such Interest
Period and, if such Advance is Continued as a Prime Rate Advance on any
date other than the last day of any
34
Interest Period for such Advance, on the date of such Continuation or, if
later, the Business Day on which the applicable Borrower shall have
received at least one Business Day's prior notice from the Administrative
Agent or the applicable Lender of the amount of unpaid interest accrued on
such Advance to the date of such Continuation and (y) a U.S. Dollar
Eurodollar Rate Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the sum of the U.S. Dollar Eurodollar
Rate for such Interest Period plus the Eurodollar Rate Margin in effect
from time to time plus, following the Revolving Commitment Termination
Date, as additional interest in lieu of the facility fee, the Facility Fee
Percentage in effect from time to time, payable on the last day of each
such Interest Period and, if any such Interest Period has a duration of
more than three months, on each day which occurs during such Interest
Period every three months from the first day of such Interest Period and,
if such Advance is Continued as a Base Rate Advance on any date other than
the last day of any Interest Period for such Advance, on the date of such
Continuation or, if later, the Business Day on which the applicable
Borrower shall have received at least one Business Day's prior notice from
the Administrative Agent or the applicable Lender of the amount of unpaid
interest accrued on such Advance to the date of such Continuation.
(iv) B/A ADVANCES. Each Advance comprised of Bankers' Acceptances
shall be subject to an Acceptance Fee, payable by the applicable Borrower
on the date of acceptance of the relevant B/A and computed as set forth in
the definition of "Acceptance Fee" in Section 1.01 plus, following the
Revolving Commitment Termination Date, as an additional acceptance fee in
lieu of the facility fee, the Facility Fee Percentage in effect from time
to time, payable quarterly in arrears on the last day of each March, June,
September and December during such periods and on the date such B/A Advance
shall be Continued or due (whether at stated maturity, by acceleration or
otherwise).
(v) ADDITIONAL INTEREST. In addition to amounts payable under
clause (i), (ii), (iii) or (iv) above and under Section 2.03(c) in respect
of any Advance
35
following the Revolving Commitment Termination Date, each Borrower shall
pay to each Lender hereunder as additional interest an amount in lieu of
the utilization fee equal to 0.25% per annum on the average daily amount of
such Lender's Term Advances made to it during any period (each such period,
an "ADDITIONAL INTEREST PERIOD") during the term of this Agreement
commencing on the Termination Date or on a subsequent January 1, April 1,
July 1 or October 1 and ending in each case on the earliest to occur of the
next succeeding March 31, June 30, September 30 or December 31 and the
Final Maturity Date (or, if any Term Advances made to such Borrower remain
outstanding after the Final Maturity Date, such later date on which all
such Advances are repaid in full). Additional interest owing in respect of
any Additional Interest Period shall be payable on the last day of such
Additional Interest Period; provided that additional interest owing after
the Final Maturity Date shall be payable on demand.
(b) DEFAULT INTEREST. Each Borrower shall pay interest on the
unpaid principal amount of each Advance made to it that is not paid when due
(whether at stated maturity, by acceleration or otherwise) from the date on
which such amount is due until such amount is paid in full, payable on demand,
at a rate per annum equal at all times (i) from such due date to the last day of
the then existing Interest Period therefor, in the case of each Eurodollar Rate
Advance, to 1% per annum above the interest rate per annum required to be paid
on such Advance immediately prior to the date on which such amount became due
and (ii) from and after the last day of the then existing Interest Period
therefor, in the case of each Eurodollar Rate Advance, and at all times in the
case of each Prime Rate Advance and each Base Rate Advance, to 1% per annum
above the Prime Rate or Base Rate, as applicable, in effect from time to time,
plus, in the case of a Term Advance, any additional interest payable pursuant to
Section 2.06(a)(iii).
(c) INTEREST ACT CANADA. For the purposes of the Interest Act
(Canada) and disclosure thereunder, whenever any interest or fee to be paid
hereunder or in connection herewith is to be calculated on the basis of any
period of time that is less than a calendar year, the yearly rate of interest to
which the rate used in such
36
calculation is equivalent is the rate so used multiplied by the actual number of
days in the calendar year in which the same is to be ascertained and divided by
360 or 365, as applicable. The rates of interest under this Agreement are
nominal rates, and not effective rates or yields. The principle of deemed
reinvestment of interest does not apply to any interest calculation under this
Agreement.
(d) NO CRIMINAL RATE. If any provision of this Agreement would
oblige a Borrower to make any payment of interest or other amount payable to any
Lender in an amount or calculated at a rate which would be prohibited by law or
would result in a receipt by that Lender of "interest" at a "criminal rate" (as
such terms are construed under the Criminal Code (Canada)), then,
notwithstanding such provision, such amount or rate shall be deemed to have been
adjusted with retroactive effect to the maximum amount or rate of interest, as
the case may be, as would not be so prohibited by law or so result in a receipt
by that Lender of "interest" at a "criminal rate", such adjustment to be
effected, to the extent necessary (but only to the extent necessary), as
follows:
(i) first, by reducing the amount or rate of interest or the
amount or rate of any Acceptance Fee required to be paid to the affected
Lender under Section 2.06(a)(iv); and
(ii) thereafter, by reducing any fees, commissions, premiums and
other amounts required to be paid to the affected Lender which would
constitute interest for purposes of Section 347 of the Criminal Code
(Canada).
SECTION 2.07 [INTENTIONALLY OMITTED]
SECTION 2.08 RATE DETERMINATION.
(a) All interest hereunder shall be payable for the actual number
of days elapsed (including the first day but excluding the last day). Any
Advance that is repaid on the same day on which it is made shall bear interest
for one day unless such repayment and notice thereof are received by 12:00 noon,
Toronto, Ontario time, on such day. The applicable Prime Rate, Base Rate,
Eurodollar Rate or Discount Rate shall be determined by the Administrative
Agent, and such determination shall be conclusive absent manifest error.
37
(b) Each Reference Bank agrees to furnish to the Administrative
Agent timely information for the purpose of determining each Eurodollar Rate. If
any one or more of the Reference Banks shall not furnish such timely information
to the Administrative Agent for the purpose of determining any such interest
rate, the Administrative Agent shall determine such interest rate on the basis
of timely information furnished by the remaining Reference Banks. Each Schedule
II/III Reference Bank agrees to furnish to the Administrative Agent timely
information for the purpose of determining each Discount Rate. If any one or
more of the Schedule II/III Reference Banks shall not furnish such timely
information to the Administrative Agent for the purpose of determining such
Discount Rate, the Administrative Agent shall determine such Discount Rate on
the basis of timely information furnished by the remaining Schedule II/III
Reference Banks.
(c) The Administrative Agent shall give prompt notice to the
Borrowers and the Lenders of the applicable interest rate determined by the
Administrative Agent for purposes of Section 2.06(a)(i), (ii) or (iii), the
applicable rate, if any, furnished by each Reference Bank for the purpose of
determining the applicable interest rate under Section 2.06(a)(iii), and the
applicable Discount Rate, if any, furnished by each Schedule II/III Reference
Bank for the purpose of determining the applicable Discount Rate under Section
2.11(f).
(d) If fewer than two Reference Banks furnish timely information
to the Administrative Agent for determining the Eurodollar Rate for any
applicable Advances,
(i) the Administrative Agent shall give the Borrowers and each
Lender prompt notice by telephone (confirmed in writing) that the interest
rate cannot be determined for such applicable Advances,
(ii) (x) to the extent such applicable Advances are Cdn. Dollar
Eurodollar Rate Advances, each such Advance will automatically, on the last
day of the then existing Interest Period therefor, Continue as a Prime Rate
Advance (or if such Advance is then a Prime Rate Advance, will Continue as
a Prime Rate Advance), and (y) to the extent such applicable Advances are
U.S. Dollar Eurodollar Rate Advances, each such Advance will automatically,
on the last
38
day of the then existing Interest Period therefor, Continue as a Base Rate
Advance (or if such Advance is then a Base Rate Advance, will Continue as a
Base Rate Advance), and
(iii) the obligations of the Lenders to make, or to Continue
Advances as, Cdn. Dollar Eurodollar Rate Advances or U.S. Dollar Eurodollar
Rate Advances, as the case may be, shall be suspended until the
Administrative Agent shall notify the Borrowers and the Lenders that the
circumstances causing such suspension no longer exist.
(e) If, with respect to any Eurodollar Rate Advances, the Majority
Lenders determine and give notice to the Administrative Agent that as a result
of conditions in or generally affecting the relevant market, the rates of
interest determined on the basis of the Eurodollar Rate for any Interest Period
for such Advances will not adequately reflect the cost to such Majority Lenders
of making, funding or maintaining their respective Eurodollar Rate Advances for
such Interest Period, the Administrative Agent shall forthwith so notify the
Borrowers and the Lenders, whereupon:
(i) (x) to the extent such Advances are Cdn. Dollar Eurodollar
Rate Advances, each such Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Continue as a Prime
Rate Advance and (y) to the extent such Advances are U.S. Dollar Eurodollar
Rate Advances, each such Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Continue as a Base
Rate Advance, and
(ii) the obligation of the Lenders to make, or to Continue Advances
as, Cdn. Dollar Eurodollar Rate Advances or U.S. Dollar Eurodollar Rate
Advances, as the case may be, shall be suspended until the Administrative
Agent shall notify the Borrowers and the Lenders that the circumstances
causing such suspension no longer exist.
(f) If a Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "INTEREST PERIOD" in Section 1.01, the
Administrative Agent will forthwith so notify such
39
Borrower and the Lenders and (i) to the extent such Advances are Cdn. Dollar
Eurodollar Rate Advances, such Advances will automatically, on the last day of
the then existing Interest Period therefor, Continue as Cdn. Dollar Eurodollar
Rate Advances with an Interest Period of one month and (ii) to the extent such
Advances are U.S. Dollar Eurodollar Rate Advances, such Advances will
automatically, on the last day of the then existing Interest Period therefor,
Continue as U.S. Dollar Eurodollar Rate Advances with an Interest Period of one
month. If a Borrower shall fail to select the duration of any Contract Period
for any B/A Advances in accordance with the provisions contained in the
definition of "CONTRACT PERIOD" in Section 1.01, the Administrative Agent will
forthwith so notify such Borrower and the Lenders and such B/A Advances will be
automatically Continued as B/A Advances with a Contract Period of one month.
(g) On the date on which the aggregate unpaid principal amount of
Advances comprising any Borrowing shall be reduced, by payment or prepayment or
otherwise, to less than Cdn.$5,000,000, such Advances shall, (i) if they are (x)
Cdn. Dollar Eurodollar Rate Advances, automatically Continue as Prime Rate
Advances and (y) U.S. Dollar Eurodollar Rate Advances, automatically Continue as
Base Rate Advances, and on and after such date the right of the applicable
Borrower to Continue such Advances as Eurodollar Rate Advances shall terminate;
provided, however, that if and so long as each such Advance shall be, or be
elected to be Continued as, Cdn. Dollar Eurodollar Rate Advances or U.S. Dollar
Eurodollar Rate Advances, as applicable, having the same Interest Period as
Eurodollar Rate Advances of the same Type comprising another Borrowing or other
Borrowings, and the aggregate unpaid principal amount of all such Eurodollar
Rate Advances of the same Type shall, or upon such Continuation will, equal or
exceed, with respect to Cdn. Dollar Eurodollar Rate Advances, Cdn. $10,000,000
or, with respect to U.S. Dollar Eurodollar Rate Advances, U.S.$10,000,000, the
applicable Borrower shall have the right to Continue all such Advances as
Eurodollar Rate Advances of the same Type having such Interest Period, and (ii)
if they are B/A Advances, automatically Continue as Prime Rate Advances, and on
and after such date the right of the applicable Borrower to Continue such
Advances as B/A Advances shall terminate; provided, however, that if and so long
as each such Advance shall
40
be, or be elected to be Continued as, B/A Advances having the same Contract
Period as B/A Advances comprising another Borrowing or other Borrowings, and the
aggregate unpaid principal amount of all such B/A Advances shall, or upon
Continuation will, equal or exceed Cdn.$10,000,000, the applicable Borrower
shall have the right to Continue all such B/A Advances as B/A Advances having
such Contract Period.
SECTION 2.09 VOLUNTARY CONTINUATION OF ADVANCES. Each Borrower may
on any Business Day, upon notice given to the Administrative Agent, not later
than the time specified in Section 2.02 for the making of an Advance of the same
Type as that of the existing Advances being Continued if such Advance were being
made on the date of the proposed Continuation, and subject to the provisions of
Section 2.08, 2.12 and 2.14, Continue all Advances to such Borrower of one Type
comprising the same Borrowing as Advances of another Type in the same currency;
provided, however, that any Continuation of any Eurodollar Rate Advances as
Prime Rate Advances or Base Rate Advances, as the case may be, made on any day
other than the last day of an Interest Period for such Eurodollar Rate Advances
shall be subject to the provisions of Section 9.04(b), and any Continuation of
any B/A Advances as Prime Rate Advances made on any day other than the last day
of the Contract Period for such B/A Advance shall be subject to the provisions
of Section 2.11. Each such notice of a Continuation (a "NOTICE OF CONTINUATION")
shall, within the restrictions specified above, specify in substantially the
form attached hereto as Exhibit B (i) the date of such Continuation, (ii) the
Advances to be Continued, (iii) if such Continuation is as Eurodollar Rate
Advances, the Type of Eurodollar Rate Advance and the duration of the Interest
Period for each such Eurodollar Rate Advance, and (iv) if such Continuation is
as B/A Advances, the duration of the Contract Period for each such B/A Advance.
SECTION 2.10 PREPAYMENTS.
(a) The applicable Borrower may prepay the Revolving Advances or
the Term Advances made to it, provided however that a Borrower may not prepay
any Bankers' Acceptances or B/A Loans; provided, however, that a Borrower may
defease any B/A or B/A Loan by depositing with the Administrative Agent an
amount that, together with interest accruing thereon to the end of the
41
Contract Period or Interest Period (as applicable) therefor, is sufficient to
pay such maturing Bankers' Acceptances or B/A Loans when due. A Borrower may,
upon (i) in the case of Eurodollar Rate Advances, at least three Business Days
notice or (ii) in the case of Prime Rate Advances or Base Rate Advances,
telephonic notice not later than 8:00 a.m. (Calgary local time) on the date of
prepayment followed as promptly as practicable by written notice, to the
Administrative Agent which specifies the proposed date and aggregate principal
amount of the prepayment and the Type of Advances to be prepaid, and if such
notice is given such Borrower shall, prepay the outstanding principal amounts of
the Advances comprising the same Borrowing in whole or ratably in part, together
with accrued interest to the date of such prepayment on the amount prepaid;
provided, however, that (x) each partial prepayment shall be in an aggregate
principal amount not less than Cdn.$5,000,000 or an integral multiple of
Cdn.$1,000,000 in excess thereof in the case of Prime Rate Advances and Cdn.
Dollar Eurodollar Rate Advances, and U.S.$5,000,000 or an integral multiple of
U.S.$1,000,000 in excess thereof in the case of Base Rate Advances and U.S.
Dollar Eurodollar Rate Advances, and (y) in the event of any such prepayment of
Eurodollar Rate Advances on any day other than the last day of an Interest
Period for such Eurodollar Rate Advances, the applicable Borrower shall be
obligated to reimburse the Lenders in respect thereof pursuant to, and to the
extent required by, Section 9.04(b); provided, further, however, that such
Borrower will use its best efforts to give notice to the Administrative Agent of
the proposed prepayment of Base Rate Advances on the Business Day prior to the
date of such proposed prepayment.
(b) If on any date, after giving effect to all Advances and all
repayments and prepayments to occur on such date, and based on the Exchange Rate
then in effect, the Administrative Agent determines that the aggregate Cdn.
Dollar Equivalent of the outstanding Advances hereunder shall have exceeded for
more than three consecutive Business Days an amount equal to 105% of the total
Commitments of the Lenders under the Agreement, the Administrative Agent shall
notify each Borrower of such occurrence and the Borrowers shall on the next
succeeding Business Day prepay Advances in an aggregate amount sufficient to
eliminate such excess.
42
SECTION 2.11 BANKERS' ACCEPTANCES.
(a) Subject to the terms and conditions of this Agreement, each
Borrower may request a Borrowing by presenting drafts for acceptance and, if
applicable, purchase, as B/As by the Lenders.
(b) No Contract Period with respect to a B/A to be accepted and,
if applicable, purchased, as a Revolving Advance shall extend beyond the
Revolving Commitment Termination Date and no Contract Period with respect to a
B/A to be accepted and, if applicable, purchased, as a Term Advance shall extend
beyond the Final Maturity Date.
(c) To facilitate availment of B/A Advances, each Borrower hereby
appoints each Lender as its attorney to sign and endorse on its behalf (in
accordance with a Notice of Borrowing or Notice of Continuation relating to a
B/A Advance), in handwriting or by facsimile or mechanical signature as and when
deemed necessary by such Lender, blank forms of B/As in the form requested by
such Lender. In this respect, it is each Lender's responsibility to maintain an
adequate supply of blank forms of B/As for acceptance under this Agreement. Each
Borrower recognizes and agrees that all B/As signed and/or endorsed by a Lender
on behalf of such Borrower shall bind such Borrower as fully and effectually as
if signed in the handwriting of and duly issued by the proper signing officers
of such Borrower. Each Lender is hereby authorized (in accordance with a Notice
of Borrowing or Notice of Continuation relating to a B/A Advance) to issue such
B/As endorsed in blank in such face amounts as may be determined by such Lender;
provided that the aggregate amount thereof is equal to the aggregate amount of
B/As required to be accepted and purchased by such Lender. No Lender shall be
liable for any damage, loss or other claim arising by reason of any loss or
improper use of any such instrument except the gross negligence or wilful
misconduct of the Lender or its officers, employees, agents or representatives.
Each Lender shall maintain a record with respect to B/As (i) received by it in
blank hereunder, (ii) voided by it for any reason, (iii) accepted and purchased
by it hereunder, and (iv) canceled at their respective maturities. On request by
or on behalf of either Borrower, a Lender shall cancel all forms of B/As which
have been pre-signed or pre-endorsed on behalf of such Borrower and that are
held by such Lender and are not required to be issued in accordance with such
Borrower's irrevocable notice.
43
Alternatively, each Borrower agrees that, at the request of the Administrative
Agent, such Borrower shall deliver to the Administrative Agent a "depository
note" which complies with the requirements of the Depository Bills and Notes Act
(Canada), and consents to the deposit of any such depository note in the
book-based debt clearance system maintained by the Canadian Depository for
Securities.
(d) Drafts of a Borrower to be accepted as B/As hereunder shall be
signed as set forth in this Section 2.11. Notwithstanding that any Person whose
signature appears on any B/A may no longer be an authorized signatory for any
Lender or a Borrower at the date of issuance of a B/A, such signature shall
nevertheless be valid and sufficient for all purposes as if such authority had
remained in force at the time of such issuance and any such B/A so signed shall
be binding on the applicable Borrower.
(e) Promptly following the receipt of a Notice of Borrowing or
Notice of Continuation specifying a Borrowing or Continuation of a Borrowing by
way of B/As, the Administrative Agent shall so advise the Lenders and shall
advise each Lender of the aggregate face amount of the B/As to be accepted by it
and the applicable Contract Period (which shall be identical for all Lenders).
In the case of Advances comprised of B/A Advances, the aggregate face amount of
the B/As to be accepted by a Lender shall be in a minimum aggregate amount of
Cdn.$100,000 and shall be a whole multiple of Cdn.$100,000, and such face amount
shall be in the Lenders' pro rata portions of such Borrowing, provided that the
Administrative Agent may in its sole discretion increase or reduce any Lender's
portion of such B/A Advance to the nearest Cdn.$100,000 without reducing the
overall Commitments.
(f) Each Borrower may specify in a Notice of Borrowing or Notice
of Continuation that it desires that any B/As requested by such Notice of
Borrowing or Notice of Continuation be purchased by the Lenders, in which case
the Lenders shall, upon acceptance of a B/A by a Lender, purchase, or arrange
for the purchase of, each B/A from such Borrower at the Discount Rate for such
Lender applicable to such B/A accepted by it and provide to the Administrative
Agent the Discount Proceeds for the account of such Borrower. The Acceptance Fee
payable by each Borrower to a Lender under Section 2.06(iv) in
44
respect of each B/A accepted by such Lender shall be set off against the
Discount Proceeds payable by such Lender under this Section 2.11.
(g) Where a Borrower so specifies in its Notice of Borrowing or
Notice of Continuation, it shall make its own arrangements for the marketing of
B/As, in which case, by subsequent notice to the Administrative Agent, it shall
provide the Administrative Agent, who shall in turn notify each Lender, with
information as to the discount proceeds payable by the purchasers of the B/As
and the party to whom delivery of the B/As by each Lender is to be made against
delivery to each Lender of the applicable discount proceeds, but if it does not
do so, such Borrower shall initiate a telephone call to the Administrative Agent
by 9:00 a.m. (Calgary local time) on the date of advance, and provide such
information to the Administrative Agent. Any such telephonic advice shall be
confirmed by a written notice by the applicable Borrower to the Administrative
Agent prior to 2:00 p.m. (Calgary local time) on the same day.
(h) Each Lender may at any time and from time to time hold, sell,
rediscount or otherwise dispose of any or all B/As accepted and purchased by it.
(i) If a Lender is not a bank listed on Schedule I, II or III of
the Bank Act (Canada) or if a Lender notifies the Administrative Agent in
writing that it is otherwise unable to accept bankers' acceptances, such Lender
shall give notice to such effect to the Administrative Agent prior to 10:00
a.m., (Calgary local time), on the date of the requested credit extension (which
notice may, if so stated therein, remain in effect with respect to subsequent
requests for extension of credit by way of Bankers' Acceptance until revoked by
notice to the Administrative Agent) and shall make available to the
Administrative Agent, in accordance with Section 2.01 hereof prior to 11:00 a.m.
(Calgary local time), on the date of such requested credit extension, a Canadian
Dollar Eurodollar Rate Advance (a "BA LOAN") in the principal amount equal to
such Lender's Commitment Percentage of the total amount of credit requested to
be extended by way of Bankers' Acceptances. Such BA Loan shall have an Interest
Period equal to the Contract Period of the Bankers' Acceptances for which it is
a substitute and shall bear interest throughout the Interest Period applicable
to such BA Loan at a rate per annum equal to the Canadian Dollar Eurodollar Rate
plus
45
the Eurodollar Rate Margin. Subject to repayment requirements, on the last day
of the relevant Interest Period for such B/A Loan, the applicable Borrower shall
be entitled to Continue each such B/A Loan as another Type of Advance, or to
roll over each such B/A Loan into another B/A Loan, all in accordance with the
applicable provisions of this Agreement.
(j) With respect to each B/A Advance, at or before 9:00 a.m.
(Calgary local time) two Business Days before the last day of the Contract
Period of such B/As, the applicable Borrower shall notify the Administrative
Agent by irrevocable telephone notice, followed by a notice of rollover in
substantially the form set forth in Exhibit B hereto on the same day, if such
Borrower intends to issue B/As on such last day of the Contract Period to
provide for the payment of such maturing B/As. If the applicable Borrower fails
to notify the Administrative Agent of its intention to issue B/As on such last
day of the Contract Period, such Borrower shall provide payment to the
Administrative Agent on behalf of the Lenders of an amount equal to the
aggregate face amount of such B/As on the last day of the Contract Period of
such B/As. If the applicable Borrower fails to make such payment, such maturing
B/As shall be deemed to have been Continued on the last day of such Contract
Period as a Prime Rate Advance in an amount equal to the face amount of such
B/As.
(k) Each Borrower waives presentment for payment and any other
defense to payment of any amounts due to a Lender in respect of a B/A accepted
and purchased by it pursuant to this Agreement which might exist solely by
reason of such B/A being held, at the maturity thereof, by such Lender in its
own right, and each Borrower agrees not to claim any days of grace if such
Lender, as holder, sues such Borrower on the B/A for payment of the amount
payable by the applicable Borrower thereunder. On the last day of the Contract
Period of a B/A, or such earlier date as may be required or permitted pursuant
to the provisions of this Agreement, the applicable Borrower shall pay the
Lender that has accepted and purchased such B/A the full face amount of such B/A
and, after such payment, the applicable Borrower shall have no further liability
in respect of such B/A and such Lender shall be entitled to all benefits of, and
be responsible for all payments due to third parties under, such B/A.
46
(l) Except as required by any Lender upon the occurrence of an
Event of Default, no B/A Advance may be repaid by a Borrower prior to the expiry
date of the Contract Period applicable to such B/A Advance.
SECTION 2.12 INCREASED COSTS.
(a) If, due to either (i) the introduction after the Effective
Date of, or any change after the Effective Date (including any change by way of
imposition or increase of reserve requirements or assessments) in or in the
interpretation of, any law or regulation or (ii) the compliance with any
guideline or request issued or made after the Effective Date from or by any
governmental authority (whether or not having the force of law), (the occurrence
of any of the foregoing events being herein referred to as a "change in law") in
each case above other than with respect to matters covered by Section 2.13 or
2.16, there shall be any increase in the cost to any Lender of agreeing to make,
fund or maintain, or of making, funding or maintaining Eurodollar Rate Advances
funded in the interbank Eurodollar market, then the applicable Borrower shall
from time to time, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender additional amounts sufficient to reimburse such Lender for all such
increased costs (except those incurred more than 60 days prior to the date of
such demand; for the purposes hereof any cost or expense allocable to a period
prior to the publication or effective date of such an introduction, change,
guideline or request shall be deemed to be incurred on the later of such
publication or effective date). Each Lender agrees to use its best reasonable
efforts promptly to notify the Borrowers of any event referred to in clause (i)
or (ii) above, provided that the failure to give such notice shall not affect
the rights of any Lender under this Section 2.12(a) (except as otherwise
expressly provided above in this Section 2.12(a)). A certificate as to the
amount of such increased cost, submitted to the Borrowers and the Administrative
Agent by such Lender, shall be conclusive and binding for all purposes, absent
manifest error. After one or more Lenders have notified the Borrowers of any
increased costs pursuant to this Section 2.12, the Borrowers may specify by
notice to the Administrative Agent and the affected Lenders that, after the date
of such notice whenever the election of a Eurodollar Rate Advance by a Borrower
for an Interest Period or portion
47
thereof would give rise to such increased costs, such election shall not apply
to the Advances of such Lender or Lenders during such Interest Period or portion
thereof, and such Advances shall during such Interest Period or portion thereof
be (x) Prime Rate Advances in lieu of Cdn. Dollar Eurodollar Rate Advances and
(y) Base Rate Advances in lieu of U.S. Dollar Eurodollar Rate Advances. Each
Lender agrees to use its best reasonable efforts (including a reasonable effort
to change its Applicable Lending Office or to transfer its affected Advances to
an Affiliate of such Lender) to avoid, or minimize the amount of, any demand for
payment from the Borrowers under this Section 2.12, provided that such avoidance
would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.
(b) In the event that any Lender shall have determined (which
determination shall be reasonably exercised and shall, absent manifest error, be
final, conclusive and binding upon all parties) at any time that the making of
or continuance of any Advance denominated in a currency other than Cdn. Dollars
has become unlawful as a result of compliance by such Lender in good faith with
any applicable law, or by any applicable guideline or order (whether or not
having the force of law), or impossible as a result of the market unavailability
of such currency, then, in any such event, such Lender shall give prompt notice
(by telephone and confirmed in writing) to the Borrowers and the Administrative
Agent of such determination (which notice the Administrative Agent shall
promptly transmit to the other Lenders). Upon the giving of the notice to the
Borrowers and the Administrative Agent, each Borrower's right to request (by
Continuation or otherwise), and such Lender's obligation to make, Advances
denominated in a currency other than Cdn. Dollars shall be immediately
suspended, and thereafter, any requested Borrowings of Advances denominated in a
currency other than Cdn. Dollars shall, as to such Lender only, be deemed to be
a request for a Prime Rate Advance, and if the affected Advance or Advances are
still outstanding, the applicable Borrower shall immediately, or if permitted by
applicable law, no later than the latest date permitted thereby, upon at least
one Business Days' prior written notice to the Administrative Agent and the
affected Lender, Continue each such Advance denominated in a currency other than
Cdn. Dollars as a Prime Rate Advance, provided that if more than one Lender is
affected at any time, then all affected Lenders must be treated the same
pursuant to
48
this Section 2.12(b).
SECTION 2.13 INCREASED CAPITAL. If either (i) the introduction of,
or any change in or in the interpretation of, any law or regulation or (ii)
compliance by any Lender with any guideline or request from any central bank or
other governmental authority (whether or not having the force of law) affects or
would affect the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender (including any determination
after the Effective Date by any such central bank, governmental authority or
comparable agency that, for purposes of capital adequacy requirements, the
Commitments hereunder do not constitute commitments with an original maturity of
one year or less) and such Lender determines that the amount of such capital is
increased by or based upon the existence of such Lender's commitment to lend
hereunder and other commitments of this type, then, within ten days after
demand, and delivery to the Borrowers of the certificate referred to in the last
sentence of this Section 2.13 by such Lender (with a copy of such demand to the
Administrative Agent), the applicable Borrower shall pay to the Administrative
Agent for the account of such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender or such
corporation in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender's commitment to lend hereunder (except any such increase in
capital incurred more than, or compensation attributable to the period before,
90 days prior to the date of such demand; for the purposes hereof any increase
in capital allocable to, or compensation attributable to, a period prior to the
publication or effective date of such an introduction, change, guideline or
request shall be deemed to be incurred on the later of such publication or
effective date). Each Lender agrees to use its best reasonable efforts promptly
to notify the Borrowers of any event referred to in clause (i) or (ii) above,
provided that the failure to give such notice shall not affect the rights of any
Lender under this Section 2.13 (except as otherwise expressly provided above in
this Section 2.13). A certificate in reasonable detail as to the basis for, and
the amount of, such compensation submitted to the Borrowers and the
Administrative Agent by such Lender shall, in the absence of manifest error, be
conclusive and binding for all purposes.
49
SECTION 2.14 ILLEGALITY. Notwithstanding any other provision of
this Agreement, if the introduction of or any change in or in the interpretation
of any law or regulation shall make it unlawful, or any central bank or other
governmental authority shall assert that it is unlawful, for any Lender or its
Applicable Lending Office to perform its obligations hereunder to make
Eurodollar Rate Advances of a particular Type or to continue to fund or maintain
such Advances hereunder, such Lender may, by notice to the Borrowers and the
Administrative Agent, suspend the right of the Borrowers to elect Eurodollar
Rate Advances of such Type from such Lender and, if necessary in the reasonable
opinion of such Lender to comply with such law or regulation, Continue all such
Eurodollar Rate Advances of such Lender as Prime Rate Advances or Base Rate
Advances, as applicable, at the latest time permitted by the applicable law or
regulation, and such suspension and, if applicable, such Continuation shall
continue until such Lender notifies the Borrowers and the Administrative Agent
that the circumstances making it unlawful for such Lender to perform such
obligations no longer exist (which such Lender shall promptly do when such
circumstances no longer exist). So long as the obligation of any Lender to make
Eurodollar Rate Advances of such Type has been suspended under this Section
2.14, all Notices of Borrowing specifying Advances of such Type shall be deemed,
as to such Lender, to be requests for Prime Rate Advances or Base Rate Advances,
as applicable. Each Lender agrees to use its best reasonable efforts (including
a reasonable effort to change its Applicable Lending Office or to transfer its
affected Advances to an Affiliate) to avoid any such illegality, provided that
such avoidance would not, in the reasonable judgment of such Lender, be
otherwise disadvantageous to such Lender.
SECTION 2.15 PAYMENTS AND COMPUTATIONS.
(a) Each Borrower shall make each payment hereunder (including
under Section 2.03, 2.05, or 2.06) and under the Notes, whether the amount so
paid is owing to any or all of the Lenders or to the Administrative Agent, not
later than 2:00 p.m. (Calgary local time) without set-off, counterclaim, or any
other deduction whatsoever, on the day when due in (i) Cdn. Dollars, in the case
of all fees required to be paid under Section 2.03, and all amounts payable
(whether principal or interest) in respect of Prime Rate Advances and Cdn.
Dollar Eurodollar Rate Advances and all amounts payable
50
(including the Acceptance Fee) in respect of B/A Advances, and (ii) in U.S.
Dollars, in the case of amounts payable (whether principal or interest) in
respect of Base Rate Advances and U.S. Dollar Eurodollar Rate Advances, to the
Administrative Agent in care of its Payment Office, or at such other location
designated by notice to the Borrowers from the Administrative Agent and agreed
to by the Borrowers, in same day funds. Each such payment made by a Borrower for
the account of any Lender hereunder, when so made to the Administrative Agent,
shall be deemed duly made for all purposes of this Agreement and the Notes,
except that if at any time any such payment is rescinded or must otherwise be
returned by the Administrative Agent or any Lender upon the bankruptcy,
insolvency or reorganization of such Borrower or otherwise, such payment shall
be deemed not to have been so made. The Administrative Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal or interest or fees ratably (other than amounts payable pursuant to
Section 2.12, 2.13, 2.14, 2.16, 9.04(b) or 9.04(c)) to the Lenders for the
account of their respective Applicable Lending Offices, and like funds relating
to the payment of any other amount payable to any Lender to such Lender for the
account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement. Upon its acceptance of an
Assignment and Acceptance and recording of the information contained therein in
the Register pursuant to Section 9.07(d), from and after the effective date
specified in such Assignment and Acceptance, the Administrative Agent shall make
all payments hereunder and under the Notes in respect of the interest assigned
thereby to the Lender assignee thereunder, and the parties to such Assignment
and Acceptance shall make all appropriate adjustments in such payments for
periods prior to such effective date directly between themselves.
(b) All computations of interest based on the Prime Rate and under
clause (i) of the definition of "Base Rate" and all computations of Acceptance
Fees (in the case of Bankers' Acceptances) and facility fees and utilization
fees (or amounts in lieu thereof) shall be made by the Administrative Agent on
the basis of a year of 365 or 366 days, as the case may be, and all computations
of interest based on the Eurodollar Rate or the Effective Federal Funds Rate
shall be made by the Administrative Agent, on the basis of a year of 360 days,
in each case for the actual number of days (including the
51
first day but excluding the last day) occurring in the period for which such
interest or fees are payable. Each determination by the Administrative Agent
(or, in the case of Section 2.12, 2.13, 2.14, 2.16, 9.04(b) or 9.04(c), by each
Lender with respect to its own Advances) of an interest rate or an increased
cost, loss or expense or increased capital or of illegality or taxes hereunder
shall be conclusive and binding for all purposes if made reasonably and in good
faith.
(c) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or facility fees, as
the case may be; provided, however, that except with respect to the Final
Maturity Date, if such extension would cause payment of interest on or principal
of Eurodollar Rate Advances to be made in the next following calendar month,
such payment shall be made on the next preceding Business Day.
(d) Unless the Administrative Agent shall have received notice
from a Borrower prior to the date on which any payment is due to the Lenders
hereunder that such Borrower will not make such payment in full, the
Administrative Agent may assume that such Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent such Borrower shall not have so made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at a rate equal to the Prime Rate for such day.
52
SECTION 2.16 TAXES.
(a) Any and all payments by each Borrower or the Parent hereunder
or under the Notes shall be made in accordance with Section 2.15, free and clear
of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, imposed or levied by or on behalf of the Government of Canada or of any
province or territory thereof or by any authority or agency therein or thereof
having power to tax (hereinafter "CANADIAN TAXES"), unless either Borrower is
required to withhold or deduct Canadian Taxes by law or by the interpretation or
administration thereof. If either Borrower is so required to withhold or deduct
any amount for or on account of Canadian Taxes from any payment made under or
with respect to this Agreement or the Notes, such Borrower will pay to each
Indemnified Party as additional interest such additional amounts as may be
necessary so that the net amount received by each Indemnified Party after such
withholding or deduction (and after deducting any Canadian Taxes on such
additional amounts) will not be less than the amount the Indemnified Party would
have received if such Canadian Taxes had not been withheld or deducted. No
additional amounts will be payable with respect to a payment made to an
Indemnified Party under this Section 2.16(a) where such Indemnified Party (i) is
subject to Canadian Taxes by reason of the Indemnified Party being a resident,
domicile or national of, or engaging in business or maintaining a permanent
establishment or other physical presence in or otherwise having some connection
with Canada or any province or territory thereof otherwise than by the mere
making or holding of the Notes or by the receipt of payments thereunder, or (ii)
is subject to Canadian Taxes by reason of its failure to comply with Section
2.16(g), provided, that should an Indemnified Party become subject to Canadian
Taxes because of its failure to deliver a form required hereunder, the
applicable Borrower or the Parent shall take such administrative steps as such
Indemnified Party shall reasonably request to assist such Indemnified Party to
recover such Canadian Taxes, and provided further, that each Indemnified Party,
with respect to itself, agrees to indemnify and hold harmless the Borrowers and
the Parent from any Canadian Taxes, penalties, interest and other expenses,
costs and losses incurred or payable by either Borrower or the Parent as a
result of the
53
failure of the Borrowers or the Parent to comply with its obligations under this
Section 2.16(a) in reliance on any form or certificate provided to it by such
Indemnified Party pursuant to this Section 2.16. Each Borrower will also make
such withholdings or deductions and remit the full amount deducted or withheld
to the relevant authority in accordance with applicable law.
(b) Any and all payments by the Parent (or by either Borrower to
the extent either Borrower causes a payment to be made from any jurisdiction
other than Canada) hereunder or under the Notes shall be made in accordance with
Section 2.15, free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto imposed or levied by or on behalf of any
jurisdiction outside Canada, excluding in the case of each Indemnified Party all
taxes, levies, imposts, deductions, charges, or withholdings, and all
liabilities with respect thereto, imposed on or determined by reference to its
income or profits, and all franchise taxes and all other taxes, levies, imposts,
deductions, charges or withholdings in effect at the time that such Indemnified
Party executed this Agreement or otherwise became an "Indemnified Party"
hereunder, and liabilities with respect thereto, imposed on it by reason of the
jurisdiction in which such Indemnified Party is organized, domiciled, resident
or doing business, or any political subdivision thereof, or by reason of the
jurisdiction of its Applicable Lending Office or any other office from which it
makes or maintains any extension of credit hereunder or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities in respect of payments under this
Agreement or under the Notes being herein referred to as "NON-CANADIAN TAXES"
and, together with Canadian Taxes, "TAXES"). If the Parent (or either Borrower,
as applicable) shall be required by law to deduct any Non-Canadian Taxes from or
in respect of any sum payable by it hereunder or under any Note to any
Indemnified Party, (i) the sum payable by it shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.16) such Indemnified
Party receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Parent (in the case of payments by it) (or
applicable Borrower (in the case of payments by it) or the
54
Administrative Agent, as applicable) shall make such deductions at the
applicable statutory rate and (iii) the Parent (in the case of payments by it)
(or the applicable Borrower (in the case of payments by it) or the
Administrative Agent, as applicable) shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law, provided that the Parent shall not be required to pay any additional amount
(and shall be relieved of any liability with respect thereto) pursuant to this
subsection (b) (or pursuant to Section 2.16(e), except to the extent Section
2.16(e) relates to Other Taxes) to any Indemnified Party that has failed to
submit any form or certificate that it was required to file or provide pursuant
to Section 2.16(f) and is entitled to file or give, as applicable, under
applicable law, provided, further, that should an Indemnified Party become
subject to Non-Canadian Taxes because of its failure to deliver a form required
hereunder, the Parent shall take such administrative steps as such Indemnified
Party shall reasonably request to assist such Indemnified Party to recover such
Non-Canadian Taxes, and provided further, that each Indemnified Party, with
respect to itself, agrees to indemnify and hold harmless the Parent from any
taxes, penalties, interest and other expenses, costs and losses incurred or
payable by the Parent as a result of the failure of the Parent to comply with
its obligations under clauses (ii) or (iii) above in reliance on any form or
certificate provided to it by such Indemnified Party pursuant to this Section
2.16.
(c) If any Indemnified Party receives a net credit or refund in
respect of Taxes or amounts paid pursuant to this Section 2.16 by either
Borrower or the Parent, it shall promptly notify such Borrower or the Parent of
such net credit or refund and shall promptly pay such net credit or refund to
the applicable Borrower or the Parent, provided that the applicable Borrower or
the Parent, as applicable, agree to return such net credit or refund if the
Indemnified Party to which such net credit or refund is applicable is required
to repay it.
(d) In addition, the Parent and the applicable Borrower agree to
pay any present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies which arise from any payment made
hereunder or under the Notes or from the execution,
55
delivery or registration of, or otherwise with respect to, this Agreement or the
Notes (hereinafter referred to as "OTHER TAXES").
(e) The applicable Borrower or the Parent will indemnify each
Indemnified Party for the full amount of Taxes or Other Taxes (including any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.16 but excluding Canadian Taxes to the extent that such Indemnified
Party is described in either Section 2.16(a)(i) or (ii) hereof) paid by such
Indemnified Party and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto except as a result of the gross
negligence (which shall in any event include the failure of such Indemnified
Party to provide any form or certificate that it was required to provide either
to the Borrowers pursuant to subsection (g) below or to the Parent pursuant to
either subsection (f) or (g) below) or willful misconduct of such Indemnified
Party, whether or not such Taxes or Other Taxes were correctly or legally
asserted. This indemnification shall be made within 30 days from the date such
Indemnified Party makes written demand therefor.
(f) On or prior to the date on which each Indemnified Party that
is not a United States person (as such term is defined in Section 7701(a)(30) of
the Internal Revenue Code) executes this Agreement or otherwise becomes an
"Indemnified Party" hereunder, such Indemnified Party shall provide the Parent
and the Administrative Agent with U.S. Internal Revenue Service form W-8BEN or
W-8ECI, as appropriate, or any successor form prescribed by the U.S. Internal
Revenue Service, certifying, if it is entitled to so certify, that such
Indemnified Party is fully exempt from United States withholding taxes with
respect to all payments to be made to such Indemnified Party hereunder, or other
documents satisfactory to the Parent indicating that all payments to be made to
such Indemnified Party hereunder are fully exempt from such taxes, if such is
the case. Thereafter and from time to time, each such Indemnified Party shall
submit to the Parent and the Administrative Agent such additional duly completed
and signed copies of one or the other of such forms (or such successor forms as
shall be adopted from time to time by the relevant United States taxing
authorities) as may be (i) notified by the Parent to such Indemnified Party and
(ii) required under then-current United States law or regulations to avoid
56
United States withholding taxes on payments in respect of all amounts to be
received by such Indemnified Party hereunder or under the Notes, including fees,
if the particular Indemnified Party is eligible for such exemption. Upon the
request of the Parent from time to time, each Indemnified Party that is a United
States person (as such term is defined in Section 7701(a)(30) of the Internal
Revenue Code) shall submit to the Parent a certificate to the effect that it is
such a United States person. If any Indemnified Party determines that it is not
fully exempt from United States withholding taxes with respect to all payments
to be received hereunder and is therefore unable to submit to the Parent any
form or certificate that such Indemnified Party would otherwise be obligated to
submit pursuant to this subsection (f), or that such Indemnified Party is
required to withdraw or cancel any such form or certificate previously submitted
because it is no longer entitled to such an exemption, such Indemnified Party
shall promptly notify the Parent and the Administrative Agent of such fact.
(g) In the event that, as a result of a Change in Law, Canada or
any political subdivision thereof introduces certification, identification,
information, documentation or other reporting requirements which require
compliance by an Indemnified Party as a pre-condition to an exemption from
withholding on Canadian Taxes for any payment made from Canada by the Borrowers
or the Parent, hereunder or under the Notes (the "CANADIAN CERTIFICATION
REQUIREMENTS"), then such Indemnified Party shall provide the Parent, the
Borrowers and the Administrative Agent with any applicable forms, certificates
or other documentation, as appropriate and as prescribed by the appropriate
Canadian governmental authority, certifying, if it is entitled to so certify,
that such Indemnified Party is so exempt from Canadian withholding taxes with
respect to payments to be made to such Indemnified Party, if such is the case.
Thereafter and from time to time, each such Indemnified Party shall submit to
the Parent, the Borrowers and the Administrative Agent such additional duly
completed and signed copies of one or the other of such forms, certificates or
other documentation as may be notified by the Parent or by the Borrowers to such
Indemnified Party and required under then-current Canadian law or regulations
(or the law or regulations of any political subdivision of Canada, if
applicable) to avoid Canadian withholding taxes on payments in respect of all
amounts to be received by such Indemnified Party pursuant to this
57
Agreement or the Notes, including fees, if the particular Indemnified Party is
eligible for such exemption. If any Indemnified Party determines that it is not
exempt from Canadian withholding taxes with respect to all payments to be
received hereunder and is therefore unable to submit to the Parent, the
Borrowers or the Administrative Agent any form, certificate or other
documentation that such Indemnified Party would otherwise be obligated to submit
pursuant to this subsection (g), or that such Indemnified Party is required to
withdraw or cancel any such form, certificate or documentation previously
submitted because it is no longer entitled to such an exemption, then such
Indemnified Party shall promptly notify the Parent, the Borrowers and the
Administrative Agent of such fact. The Borrowers and the Parent acknowledge that
no such Canadian Certification Requirements currently exist under Canadian law.
The obligations of each Indemnified Party under this Section 2.16(g) shall not
be effective with respect to such Indemnified Party unless and until either the
Parent, the Borrowers or the Administrative Agent provides written notice to
such Indemnified Party of any such Canadian Certification Requirements and
extends to such Indemnified Party a reasonable amount of time, not to exceed 30
days, to comply with any such requirements.
(h) Any Indemnified Party claiming any additional amounts payable
pursuant to this Section 2.16 shall use its best reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Applicable Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
which may thereafter accrue and would not, in the reasonable judgment of such
Indemnified Party, be otherwise disadvantageous to such Indemnified Party.
(i) Without prejudice to the survival of any other agreement of
the Borrowers and the Parent hereunder, the agreements and obligations of the
Borrowers, the Parent and each Indemnified Party contained in this Section 2.16
shall survive the payment in full of principal and interest hereunder and under
the Notes.
SECTION 2.17 SHARING OF PAYMENTS, ETC. If any Lender shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of
58
set-off, or otherwise) on account of the Advances made by it (other than
pursuant to Section 2.12, 2.13, 2.14, 2.16, 9.04(b) or 9.04(c)) in excess of its
ratable share of payments on account of the Advances obtained by all the
Lenders, such Lender shall forthwith purchase from the other Lenders such
participations in the Advances made by them as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them,
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and each Lender shall repay to the purchasing Lender the
purchase price to the extent of such Lender's ratable share (according to the
proportion of (i) the amount of the participation purchased from such Lender as
a result of such excess payment to (ii) the total amount of such excess payment)
of such recovery together with an amount equal to such Lender's ratable share
(according to the proportion of (A) the amount of such Lender's required
repayment to (B) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. Each Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of such Borrower in the amount of such
participation.
SECTION 2.18 EVIDENCE OF DEBT.
(a) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the Indebtedness of each Borrower to
such Lender resulting from each Advance made by such Lender hereunder, including
the amounts of principal and interest payable and paid to such lender from time
to time hereunder.
(b) The Administrative Agent shall maintain accounts and records
in which it shall record (i) the amount of each Advance made hereunder, the type
of Advance and, in the cases of B/A Advances and Eurodollar Rate Advances, the
relevant Contract Period or Interest Period applicable thereto, (ii) the amount
of any principal or interest due and payable or to become due and payable from
each Borrower to each Lender hereunder,
59
and (iii) the amount of any sum received by the Administrative Agent hereunder
for the account of the Lenders and each Lender's share thereof.
(c) The entries made in the accounts maintained pursuant to
Sections 2.18(a) and (b) shall be conclusive evidence (absent manifest error) of
the existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligations of the
applicable Borrower to repay the Advances made to it in accordance with the
terms of this Agreement. In the event of a conflict between the records
maintained by the Administrative Agent and any Lender, the records maintained by
the Lender shall govern. Any Lender may request that Loans (other than B/As)
made by it be evidenced by a Note. In such event, each Borrower shall prepare,
execute and deliver to such Lender a Note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns) and
substantially in the form attached as Exhibit A hereto. Thereafter, the Loans
evidenced by each such Note and interest thereon shall at all times (including
after assignment pursuant to Section 9.07) be represented by one or more Notes
in such form payable to the order of the payee named therein (or, if such Note
is a registered Note, to such payee and its registered assigns).
SECTION 2.19 USE OF PROCEEDS. Proceeds of the Advances may be used
for general corporate purposes of the Borrowers and their Subsidiaries and of
Parent and any of its other Subsidiaries, including for acquisitions and for
payment of commercial paper issued by either Borrower or any such other Person.
SECTION 2.20 INCREASE OF COMMITMENTS. (a) At any time after the
Effective Date, provided that no Event of Default shall have occurred and be
continuing, the Borrowers may request an increase of the aggregate Commitments
by notice to the Administrative Agent in writing of the amount (the "OFFERED
INCREASE AMOUNT") of such proposed increase (such notice, a "COMMITMENT INCREASE
NOTICE"). Any such Commitment Increase Notice must offer each Lender the
opportunity to subscribe for its pro rata share of the increased Commitments. If
any portion of the increased Commitments is not subscribed for by the Lenders,
the Borrowers may, in their sole
60
discretion, but with the consent of the Administrative Agent as to any Person
that is not at such time a Lender (which consent shall not be unreasonably
withheld), offer to any existing Lender or to one or more additional banks or
financial institutions the opportunity to participate in all or a portion of
such unsubscribed portion of the increased Commitments pursuant to paragraph (b)
or (c) below, as applicable.
(b) Any additional bank or financial institution that the
Borrowers select to offer participation in the increased Commitments, and that
elects to become a party to this Agreement and obtain a Commitment, shall
execute a New Lender Agreement with the Borrowers and the Administrative Agent,
substantially in the form of Exhibit E (a "NEW LENDER AGREEMENT"), whereupon
such bank or financial institution (a "NEW LENDER") shall become a Lender for
all purposes and to the same extent as if originally a party hereto and shall be
bound by and entitled to the benefits of this Agreement, and the signature pages
and Schedule III hereof shall be deemed to be amended to add the name and
Commitment of such New Lender, provided that the Commitment of any such New
Lender shall be in an amount not less than Cdn.$5,000,000.
(c) Any Lender that accepts an offer to it by the Borrowers to
increase its Commitment pursuant to this Section 2.20 shall, in each case,
execute a Commitment Increase Agreement with the Borrowers and the
Administrative Agent, substantially in the form of Exhibit F (a "COMMITMENT
INCREASE AGREEMENT"), whereupon such Lender shall be bound by and entitled to
the benefits of this Agreement with respect to the full amount of its Commitment
as so increased, and Schedule III hereof shall be deemed to be amended to so
increase the Commitment of such Lender.
(d) The effectiveness of any New Lender Agreement or Commitment
Increase Agreement shall be contingent upon receipt by the Administrative Agent
of such corporate resolutions of the Borrowers and legal opinions of counsel to
the Borrowers as the Administrative Agent shall reasonably request with respect
thereto, in each case, in form and substance satisfactory to the Administrative
Agent.
(e) If any bank or financial institution
61
becomes a New Lender pursuant to Section 2.20(b) or any Lender's Commitment is
increased pursuant to Section 2.20(c), additional Advances made on or after the
effectiveness thereof (the "RE-ALLOCATION DATE") shall be made pro rata based on
the Commitment Percentages in effect on and after such Re-Allocation Date
(except to the extent that any such pro rata borrowings would result in any
Lender making an aggregate principal amount of Advances in excess of its
Commitment, in which case such excess amount will be allocated to, and made by,
such New Lender and/or Lenders with such increased Commitments to the extent of,
and pro rata based on, their respective Commitments), and continuations of
Eurodollar Rate Advances outstanding on such Re-Allocation Date shall be
effected by repayment of such Eurodollar Rate Advances on the last day of the
Interest Period applicable thereto and the making of new Eurodollar Rate
Advances pro rata based on such new Commitment Percentages. In the event that on
any such Re-Allocation Date there is an unpaid principal amount of Prime Rate
Advances or Base Rate Advances, the existing Lenders shall be deemed to have
made partial assignments thereof to the New Lenders and/or Lenders with such
increased Commitments in such amounts that, after giving effect thereto, the
Prime Rate Advances and Base Rate Advances outstanding are held pro rata based
on such new Commitment Percentages. In the event that on any such Re-Allocation
Date there is an unpaid principal amount of Eurodollar Rate Advances, such
Eurodollar Rate Advances shall remain outstanding with the respective holders
thereof until the expiration of their respective Interest Periods (unless the
applicable Borrower elects to prepay any thereof in accordance with the
applicable provisions of this Agreement), and interest on and repayments of such
Eurodollar Rate Advances will be paid thereon to the respective Lenders holding
such Eurodollar Rate Advances pro rata based on the respective principal amounts
thereof outstanding. In the event that on any such Re-Allocation Date there is
an unpaid principal amount of B/A Advances, such B/A Advances shall remain
outstanding with the respective holders thereof until the expiration of their
respective Contract Periods, and repayments of such B/A Advances will be paid
thereon to the respective Lenders holding such B/As based on the respective face
amounts thereof.
(f) Notwithstanding anything to the contrary in this Section 2.20,
(i) no increase pursuant to this Section 2.20 shall be effective without the
consent of
62
the Required Lenders, (ii) no Lender shall have any obligation to increase its
Commitment unless it agrees to do so in its sole discretion and (iii) the
aggregate amount by which the Commitments hereunder are increased pursuant to
this Section 2.20 shall not exceed Cdn. [$141,426,000].
(g) Each Borrower shall execute and deliver a Note to each new
bank or other financial institution becoming a Lender that requests one.
SECTION 2.21 EXTENSION OF REVOLVING COMMITMENT TERMINATION DATE.
(a) Not earlier than 65 days prior to and not later than 45 days prior to the
Revolving Commitment Termination Date then in effect, provided that no Event of
Default shall have occurred and be continuing, the Borrowers may request an
extension of such Revolving Commitment Termination Date by submitting to the
Administrative Agent an Extension Request containing the information in respect
of such extension specified in Exhibit G, which the Administrative Agent shall
promptly furnish to each Lender. Each Lender shall, by the later of (i) the date
30 days after its receipt from the Administrative Agent of the applicable
Extension Request and (ii) the date 30 days prior to the Revolving Commitment
Termination Date, notify the Borrowers and the Administrative Agent of its
consent to extend or its refusal to extend the Revolving Commitment Termination
Date as requested in such Extension Request. Any such Extension Request shall be
approved if the Required Lenders shall approve in writing the extension of the
Revolving Commitment Termination Date requested in such Extension Request. The
Borrowers may request no more than ten extensions pursuant to this Section 2.21,
so that the Revolving Commitment Termination Date shall not in any event extend
beyond the tenth anniversary of the initial Revolving Commitment Termination
Date hereunder. The Administrative Agent shall promptly notify the Lenders and
the Borrowers of any extension of the Revolving Commitment Termination Date
pursuant to this Section 2.21 and shall promptly notify the Borrowers of any
Lender that has notified the Administrative Agent of its consent to extend or
its refusal to extend the Revolving Commitment Termination Date.
(b) If any such Extension Request is approved but there are one or
more Lenders that do not consent to the Extension Request in writing within the
period specified in paragraph (a) above (an "Objecting Lender"),
63
the Borrowers shall be entitled to choose any of the following options prior to
the Revolving Commitment Termination Date, provided that if the Borrowers do not
make an election prior to such date, the Borrowers shall be deemed to have
irrevocably elected to exercise the option in clause (iii)(y) below:
(i) the Borrowers may elect to cause the Commitments and Advances
of any Objecting Lender to be transferred or assigned pursuant to Section
2.21(c); and/or
(ii) the Borrowers may elect to voluntarily prepay the Advances, if
any, of Objecting Lenders together with accrued interest thereon, any
amounts payable pursuant to Sections 2.06, 2.12, 2.13, 2.16 and 9.04(b) and
any accrued and unpaid facility fee or utilization fee or other amounts
payable with respect to such Objecting Lenders, and the Commitments of such
Objecting Lenders shall be terminated; or
(iii) the Borrowers may elect to revoke and cancel the Extension
Request by giving notice of such revocation and cancellation to the
Administrative Agent (which shall promptly notify the Lenders thereof) and
concurrently therewith shall have the option to (x) voluntarily prepay the
Advances, if any, of all Lenders, together with accrued interest thereon,
any amounts payable pursuant to Sections 2.06, 2.12, 2.13, 2.16 and 9.04(b)
and any accrued and unpaid facility fee or utilization fee or other amounts
payable with respect to the Lenders, and the Commitments of all Lenders
shall be terminated or (y) have the outstanding Advances continue as term
loans repayable in accordance with paragraphs (a), (b), (c) and (d) of
Section 2.05 of this Agreement.
(c) If any Lender becomes an Objecting Lender, the Borrowers may,
at their own expense and in their sole discretion and prior to the then
Revolving Commitment Termination Date, require such Lender to transfer or
assign, without recourse (in accordance with Section 8.07), all of its
interests, rights and obligations under this Agreement and, if the Borrowers
shall so determine in their sole discretion, all or part of its interest, rights
and obligations under the U.S. Long-Term Revolving Credit Agreement and/or the
U.S. Short-Term Revolving Credit Agreement, as the case may
64
be) to an Eligible Assignee (provided that the Borrowers, with the full
cooperation of such Lender, can identify an Eligible Assignee that is ready,
willing and able to be an assignee with respect thereto) which shall assume such
assigned obligations (which assignee may be another Lender, if such assignee
Lender accepts such assignment); provided that (A) the assignee or the
applicable Borrower, as the case may be, shall have paid to such Lender in
immediately available funds the principal of and interest accrued to the date of
such payment on the Advances made by it hereunder and the "Advances" made by it
under, and as defined in, the U.S. Long-Term Revolving Credit Agreement or the
U.S. Short-Term Revolving Credit Agreement, as the case may be, and all other
amounts owed to it hereunder and thereunder, including any amounts owing
pursuant to Section 9.04(b) (or the comparable provision of the U.S. Long-Term
Revolving Credit Agreement or the U.S. Short-Term Revolving Credit Agreement, as
the case may be) and any amounts that would be owing under such Section (or
comparable provision) if such Advances and "Advances" (as so defined) were
prepaid on the date of such assignment, and (B) such assignment does not
conflict with any law, rule or regulation or order of any governmental
authority. Any assignee that becomes a Lender as a result of such an assignment
made pursuant to this paragraph (b) shall be deemed to have consented to the
applicable Extension Request and, therefore, shall not be an Objecting Lender.
SECTION 2.22 REPLACEMENT OF LENDERS. If any Lender requests
compensation under Sections 2.11 or 2.13 or if either Borrower is required to
pay any additional amount to any Lender or any taxing authority or other
authority for the account of any Lender pursuant to Section 2.16, or if any
Lender suspends the right of the Borrowers to elect Eurodollar Rate Advances
from such Lender pursuant to Section 2.14, or if any Lender defaults in its
obligation to fund Advances hereunder, then the Borrowers may, at their sole
expense and effort, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance with
and subject to the restrictions contained in Section 9.07), all its interests,
rights and obligations under this Agreement and, if the Borrowers shall so
determine in their sole discretion, the U.S. Long-Term Revolving Credit
Agreement and/or the U.S. Short-Term Revolving Credit Agreement, as the
Borrowers may determine in their sole discretion and specify by notice to such
Lender, (other than "B Advances" under,
65
and as defined in, the U.S. Long-Term Revolving Credit Agreement and/or the U.S.
Short-Term Revolving Credit Agreement, as the case may be) to an assignee that
shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrowers shall have received
the prior written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Advances hereunder and, if the
Borrowers shall have so determined as specified above, its "Advances" (other
than "B Advances") (each under and as defined in the U.S. Long-Term Revolving
Credit Agreement and/or the U.S. Short-Term Revolving Credit Agreement, as the
case may be), and all accrued interest thereon, accrued fees, accrued costs in
connection with compensation under Sections 2.12 or 2.13 or payments required to
be made pursuant to Section 2.16, if any, and all other amounts (other than "B
Advances") payable to it hereunder and, if the Borrowers shall have so
determined as specified above, under the U.S. Long-Term Revolving Credit
Agreement and/or the U.S. Short-Term Revolving Credit Agreement, as the case may
be, from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the applicable Borrower (in the case of all other amounts)
and (iii) in the case of any such assignment resulting from a claim for
compensation under Sections 2.12 or 2.13 or payments required to be made
pursuant to Section 2.16, such assignment will result in a reduction in such
compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrowers to require such
assignment and delegation cease to apply.
SECTION 2.23 CURRENCY INDEMNITY. If, for the purposes of obtaining
judgment in any court in any jurisdiction with respect to this Agreement or any
other Financing Document, it becomes necessary to convert into the currency of
such jurisdiction (the "JUDGMENT CURRENCY") any amount due under this Agreement
or under any other Financing Document in any currency other than the Judgment
Currency (the "CURRENCY DUE"), then conversion shall be made at the rate of
exchange prevailing on the Business Day before the day on which the judgment is
given. For this purpose, "rate of exchange" means the rate at which the
Administrative
66
Agent is able, on the relevant date, to purchase the Currency Due with the
Judgment Currency in accordance with its normal practice at its head office in
Toronto, Ontario. In the event that there is a change in the rate of exchange
prevailing between the Business Day before the day on which the judgment is
given and the date of receipt by the Administrative Agent of the amount due, the
applicable Borrower will, on the date of receipt by the Administrative Agent,
pay such additional amounts, if any, or be entitled to obtain reimbursement of
such amount, if any, as may be necessary to ensure that the amount received by
the Administrative Agent on such date is the amount in the Judgment Currency
which when converted at the rate of exchange prevailing on the date of receipt
by the Administrative Agent is the amount then due under this Agreement or under
such other Financing Document in the Currency Due. If the amount of the Currency
Due which the Administrative Agent is so able to purchase is less than the
amount of the Currency Due originally due to it, the applicable Borrower shall
indemnify and save the Administrative Agent and the Lenders harmless from and
against all loss or damage arising as a result of such deficiency. This
indemnity shall constitute an obligation separate and independent from the other
obligations contained in this Agreement and the other Financing Documents, shall
give rise to a separate and independent cause of action, shall apply
irrespective of any indulgence granted by the Administrative Agent from time to
time and shall continue in full force and effect notwithstanding any judgment or
order for a liquidated sum in respect of an amount due under this Agreement or
any other Financing Document or under any judgment or order.
SECTION 2.24 EXCHANGE RATE CALCULATIONS. (a) Not later than 12:00
noon, Calgary local time, on each Calculation Date, the Administrative Agent
shall (i) determine the Exchange Rate as of such Calculation Date and (ii) give
notice thereof to the Borrowers and to each Lender that shall have requested
such information. The Exchange Rates so determined shall become effective on the
first Business Day immediately following the relevant Calculation Date (each, a
"RESET DATE") and shall remain effective until the next succeeding Reset Date.
(b) Not later than 12:00 noon, Calgary local time, on each Reset
Date, the Administrative Agent shall (i) determine the Cdn.$ Equivalent of the
Advances
67
outstanding on such date, or to be outstanding after giving effect to any
Borrowing to occur on such date, and (ii) notify the Borrowers and each Lender
that shall have requested such information of the aggregate outstanding
Advances, based on information provided by each Borrower after giving effect to
all Advances and all repayments and prepayments to occur on such date.
ARTICLE 3
CONDITIONS OF EFFECTIVENESS AND LENDING
SECTION 3.01 CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS
AGREEMENT. This Agreement shall become effective when (i) it shall have been
executed by the Borrowers, Parent and the Administrative Agent, (ii) the
Administrative Agent and the Borrowers either shall have been notified by each
Initial Lender that such Initial Lender has executed it or shall have received a
counterpart of this Agreement executed by such Initial Lender, and (iii) the
Administrative Agent shall have received the following, each dated the date of
delivery thereof unless otherwise specified below (which date shall be selected
by the Borrowers and be the same for all documents and all Lenders), in form and
substance satisfactory to the Administrative Agent and (except for the Notes, if
any) in sufficient copies for each Lender:
(a) the Notes, to the order of the Lenders requesting Notes,
respectively;
(b) certified copies of the resolutions of the directors of the
Borrowers and the Board of Directors of Parent, approving (as appropriate) the
Borrowings contemplated hereby and authorizing the execution of this Agreement
and the other Financing Documents, including the Notes, if any, and of all
documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to this Agreement and any other Financing
Documents;
(c) a certificate of the Secretary or an Assistant Secretary of
the Borrowers and Parent (i) certifying names and true signatures of officers of
such Person authorized to sign this Agreement, the Notes, if any, and any other
Financing Documents to which it is a party and (ii) if the Effective Date is
other than the date of this amendment and restatement, certifying that the
68
representations and warranties contained in Section 4.01 are true and correct as
of the Effective Date;
(d) Evidence of the effectiveness of the amendment and restatement
of the U.S. Short-Term Revolving Credit Agreement;
(e) A favorable opinion of Parent's Vice President and General
Counsel in substantially the form of Exhibit H-1 hereto;
(f) A favorable opinion of Joanne Alexander, counsel for BRCL and
Canadian Hunter, in substantially the form of Exhibit H-2 hereto;
(g) A favorable opinion of Bennett Jones LLP, Alberta counsel to
the Borrowers, in substantially the form of Exhibit I hereto; and
(h) The Administrative Agent, the Lenders and the Arranger shall
have received all fees and other amounts due and payable on or prior to the
Effective Date, including, to the extent invoiced, reimbursement or payment of
all legal fees and other out-of-pocket expenses required to be reimbursed or
paid by the Borrowers hereunder.
The Borrowers and the Initial Lenders agree that upon the Effective
Date the "Commitments" of the Initial Lenders shall be as set forth on Schedule
III hereof under the caption "Commitments".
SECTION 3.02 CONDITIONS PRECEDENT TO EACH BORROWING. The
obligation of each Lender to make an Advance (including the initial Advance) on
the occasion of any Borrowing shall be subject to the further conditions
precedent that on or before the date of such Borrowing this Agreement shall have
become effective pursuant to Section 3.01 and that on the date of such
Borrowing, before and immediately after giving effect to such Borrowing and to
the application of the proceeds therefrom, the following statements shall be
true and correct, and the giving by the applicable Borrower of the applicable
Notice of Borrowing and the acceptance by such Borrower of the proceeds of such
Borrowing shall constitute its representation and warranty that on and as of the
date of such Borrowing, before and immediately after giving effect thereto and
to the application of the proceeds therefrom, the following statements are true
and
69
correct:
(a) each representation and warranty contained in Section 4.01 is
correct in all material respects as though made on and as of such date (or, if
such representation and warranty is stated to be made as at a specific date or
for a specific period, as at the original specified date or with respect to the
original specified period);
(b) no event has occurred and is continuing, or would result from
such Borrowing, which constitutes an Event of Default or would constitute an
Event of Default but for the requirement that notice be given or time elapse or
both; and
(c) the aggregate amount of the borrowings under this Agreement
(including such Borrowing) and under other agreements or facilities or evidenced
by other instruments or documents is not in excess of the aggregate amount of
such borrowings approved as of such date (to the extent any such limit on
aggregate borrowings exists from time to time) by the Boards of Directors of
Parent and of each Borrower.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 REPRESENTATIONS AND WARRANTIES OF THE BORROWERS. Each
of the Borrowers and Parent represents and warrants as follows:
(a) Each Borrower is a Business Entity duly formed, validly
existing and in good standing under the laws of the Province of Alberta. The
Parent is a Business Entity duly formed, validly existing and in good standing
under the laws of the State of Delaware. Each Material Subsidiary is duly
organized, validly existing and in good standing in the jurisdiction of its
formation. Parent and each Material Subsidiary possess all applicable Business
Entity powers and all other authorizations and licenses necessary to engage in
its business and operations as now conducted, the failure to obtain or maintain
which would have a Material Adverse Effect. Each Subsidiary of Parent that is,
on and as of the Effective Date, a Material Subsidiary is listed on Schedule I
hereto.
70
(b) The Transactions are within the Business Entity powers of the
Borrowers and Parent (as applicable), have been duly authorized by all necessary
applicable Business Entity action, and do not contravene (i) the organizational
documents (as applicable) of the Borrowers or the Parent (as applicable) or (ii)
law or any contractual restriction binding on or affecting the Borrowers or the
Parent. This Agreement, the Notes, if any, and the other Financing Documents, if
any, have been duly executed and delivered by the Borrowers and the Parent (as
applicable).
(c) The Transactions do not require any authorization or approval
or other action by, nor any notice to or filing with, any governmental authority
or regulatory body for the due execution, delivery and performance by the
Borrowers and the Parent (as applicable) of this Agreement, the Notes, if any,
or the other Financing Documents, if any, as applicable, that has not been duly
made or obtained, except those (i) required in the ordinary course to comply
with ongoing covenant obligations of the Borrowers and Parent hereunder the
performance of which is not yet due and (ii) that will, in the ordinary course
of business in accordance with this Agreement, be duly made or obtained on or
prior to the time or times the performance of such obligations shall be due.
(d) This Agreement constitutes, and the Notes (if and when
delivered hereunder) and the other Financing Documents, if any, when delivered
hereunder shall constitute, legal, valid and binding obligations of the
Borrowers or the Parent (as applicable) enforceable against each such Person in
accordance with their respective terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally or by general principles of equity.
(e) The consolidated balance sheet of the Parent and its
consolidated Subsidiaries as at December 31, 2001 and the related consolidated
statements of income and cash flow for the fiscal year then ended, reported on
by PricewaterhouseCoopers LLC, independent public accountants, and the
consolidated balance sheet of the Parent and its consolidated subsidiaries as at
September 30, 2002 and the related consolidated statements of income and cash
flow for the nine-month period then ended, certified by the chief financial
71
officer of the Parent, copies of each of which have been furnished to the
Administrative Agent and the Initial Lenders, fairly present the consolidated
financial condition of the Parent and such Subsidiaries as at December 31, 2001,
and September 30, 2002, respectively, and the consolidated results of their
operations for such fiscal periods, subject in the case of the September 30,
2002 statements to normal year-end adjustments, all in accordance with generally
accepted accounting principles consistently applied. From September 30, 2002 to
and including the Effective Date there has been no material adverse change in
such condition or results of operations.
(f) As at the Effective Date, there is no action, suit or
proceeding pending, or to the knowledge of the Borrowers and Parent threatened,
against or involving Parent or any Material Subsidiary in any court, or before
any arbitrator of any kind, or before or by any governmental body, which in the
reasonable judgment of the Borrowers and Parent (taking into account the
exhaustion of all appeals) would have a material adverse effect on the
consolidated financial condition of Parent and its consolidated Subsidiaries
taken as a whole, or which purports to affect the legality, validity, binding
effect or enforceability of this Agreement, the Notes, if any, or the other
Financing Documents, if any.
(g) Parent and each of its consolidated Subsidiaries has duly
filed all tax returns required to be filed, and duly paid and discharged all
taxes, assessments and governmental charges upon it or against its properties
now due and payable, the failure to file or pay which, as applicable, would have
a Material Adverse Effect, unless and to the extent only that the same are being
contested in good faith and by appropriate proceedings by Parent or the
appropriate Subsidiary.
(h) Except to the extent permitted pursuant to Section 5.02(e),
neither Parent nor any Material Subsidiary is subject to any contractual
restrictions which limit the amount of dividends payable by any Subsidiary.
(i) No Termination Event has occurred or is reasonably expected to
occur with respect to any Plan which, with the giving of notice or lapse of
time, or both, would constitute an Event of Default under Section 6.01(g).
72
(j) Neither Parent nor any ERISA Affiliate has incurred, or is
reasonably expected to incur, any Withdrawal Liability to any Multiemployer Plan
that, when aggregated with all other amounts required to be paid to
Multiemployer Plans in connection with Withdrawal Liability (as of the date of
determination), exceeds 5% of the Consolidated Tangible Net Worth of Parent.
(k) Neither Parent nor any ERISA Affiliate has received any
notification that any Multiemployer Plan is in reorganization or has been
terminated, within the meaning of Title IV of ERISA, and no Multiemployer Plan
is reasonably expected to be in reorganization or to be terminated within the
meaning of Title IV of ERISA the effect of which reorganization or termination
would be the occurrence of an Event of Default under Section 6.01(i).
(l) None of Parent nor either Borrower is an "investment company"
or a "company" controlled by an "investment company" within the meaning of the
United States Investment Company Act of 1940, as amended.
(m) None of Parent nor either Borrower is a "holding company" or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", or a "public
utility" within the meaning of the United States Public Utility Holding Company
Act of 1935, as amended.
(n) The proceeds of the Advances will not be used in any way which
would violate the provisions of Regulation U or X of the Board of Governors of
the Federal Reserve System.
All representations and warranties made by the Borrowers and/or Parent
herein or made in any certificate delivered pursuant hereto shall survive the
making of the Advances and the execution and delivery to the Lenders of this
Agreement and the Notes.
ARTICLE 5
COVENANTS
SECTION 5.01 AFFIRMATIVE COVENANTS. So long as any Advance, Note
or other amount payable either Borrower
73
hereunder shall remain unpaid or any Lender shall have any Commitment hereunder,
Parent will, unless the Majority Lenders shall otherwise consent in writing:
(a) PRESERVATION OF EXISTENCE, ETC. Preserve and maintain, and
cause each Material Subsidiary to preserve and maintain, its existence, rights
(organizational and statutory) and material franchises, except as otherwise
contemplated or permitted by Section 5.02(c) or 5.02(d); provided, that any
Material Subsidiary may change its form of organization to a partnership or
other form of Business Entity, provided further that in the case of any such
change by a Borrower, its jurisdiction of organization remains in Canada, and in
connection with any such change by a Borrower, such Borrower shall cause to be
delivered to the Administrative Agent a legal opinion of counsel acceptable to
the Administrative Agent to the effect that the successor entity to such
Borrower continues to be bound by, or has assumed by instrument or by operation
of law, all of such Borrower's obligations under this Agreement and the Notes.
(b) COMPLIANCE WITH LAWS, ETC. Comply, and cause each Subsidiary
to comply, in all material respects, with all applicable laws, rules,
regulations and orders (including all environmental laws and laws requiring
payment of all taxes, assessments and governmental charges imposed upon it or
upon its property except to the extent contested in good faith by appropriate
proceedings) the failure to comply with which would have a Material Adverse
Effect.
(c) VISITATION RIGHTS. At such reasonable times and intervals as
the Administrative Agent or any of the Lenders may desire, permit the
Administrative Agent or any of the Lenders to visit each Borrower and to discuss
the affairs, finances, accounts and mineral reserve performance of Parent and
any of its Subsidiaries with officers of the Borrowers and Parent and
independent certified public accountants of Parent and any of its Subsidiaries,
provided that if an Event of Default, or an event which with the giving of
notice or the passage of time, or both, would become an Event of Default, has
occurred and is continuing, the Administrative Agent or any Lender may, in
addition to the other provisions of this subsection (c) and at such reasonable
times and intervals as the Administrative Agent or any of the
74
Lenders may desire, visit and inspect, under guidance of officers of Parent (or,
in the case of properties of the Borrowers or their Subsidiaries, of the
Borrowers), as the case may be, any properties significant to the consolidated
operations of Parent and its Subsidiaries, and to examine the books and records
of account (other than with respect to any mineral reserve information that
Parent determines to be confidential, except, during the continuation of an
Event of Default, if such Lenders shall have entered into a confidentiality
agreement with respect to such information satisfactory in form and substance to
Parent) Parent and any of its Subsidiaries and to discuss the affairs, finances
and accounts of any of the Subsidiaries of Parent with any of the officers of
such Subsidiary.
(d) BOOKS AND RECORDS. Keep, and cause each of its Subsidiaries to
keep, proper books of record and account, in which full and correct entries
shall be made of all financial transactions and the assets and business of
Parent and each Subsidiary of Parent in accordance with GAAP either (i)
consistently applied or (ii) applied in a changed manner that does not, under
GAAP or public reporting requirements applicable to Parent either require
disclosure in the consolidated financial statements of Parent and its
consolidated Subsidiaries or require the consent of the accountants which (as
required by Section 5.03(b)) report on such financial statements for the fiscal
year in which such change shall have occurred, or (iii) applied in a changed
manner not covered by clause (ii) above provided such change shall have been
disclosed to the Administrative Agent and shall have been consented to by the
accountants which (as required by Section 5.03(b)) report on the consolidated
financial statements of Parent and its consolidated Subsidiaries for the fiscal
year in which such change shall have occurred, provided further that if any
change referred to in clause (ii) or (iii) above would not meet the standard set
forth in clause (i) or (ii) of Section 1.03, the Administrative Agent, the
Lenders, the Borrowers and Parent agree to amend the covenants contained in
Section 5.01 and 5.02 so that the relative protection afforded thereby to the
Lenders and the relative flexibility afforded thereby to each Borrower will in
substance be retained after such amendment, provided further, however, that
until such amendment becomes effective hereunder, the covenants as set forth
herein shall remain in full force and effect and those
75
accounting principles applicable to Parent and its consolidated Subsidiaries
which do meet the standards set forth in clause (i) or (ii) of Section 1.03
shall be applied to determine whether or not each Borrower is in compliance with
such covenants.
(e) MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve, and
cause each Material Subsidiary to maintain and preserve, all of its properties
which are used in the conduct of its business in good working order and
condition, ordinary wear and tear excepted, to the extent that any failure to do
so would have a Material Adverse Effect.
(f) MAINTENANCE OF INSURANCE. Maintain, and cause each Material
Subsidiary to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which Parent or such Subsidiary operates.
SECTION 5.02 NEGATIVE COVENANTS. So long as any Advance, Note or
other amount payable by either Borrower hereunder shall remain unpaid or any
Lender shall have any Commitment hereunder, Parent will not, unless the Majority
Lenders shall otherwise consent in writing:
(a) LIENS, ETC. (i) Create, assume or suffer to exist, or permit
any Material Subsidiary to create, assume or suffer to exist, any Liens upon or
with respect to any of the Equity Interests in any Material Subsidiary, whether
now owned or hereafter acquired, or (ii) create or assume, or permit any
Material Subsidiary to create or assume, any Liens upon or with respect to any
other assets material to the consolidated operations of Parent and its
consolidated Subsidiaries taken as a whole securing the payment of Debt and
Guaranties in an aggregate amount (determined without duplication of amount (so
that the amount of a Guaranty will be excluded to the extent the Debt Guaranteed
thereby is included in computing such aggregate amount)) exceeding the greater
of (x) U.S.$250,000,000 and (y) 10% of Consolidated Tangible Net Worth as at the
date of such creation or assumption; provided, however, that this subsection (a)
shall not apply to:
76
(A) Liens on assets acquired by Parent or any of its Subsidiaries
after the Original Effective Date to the extent that such Liens existed at the
time of such acquisition and were not placed thereon by or with the consent of
Parent in contemplation of such acquisition;
(B) Liens on Equity Interests acquired after the Original
Effective Date in a Business Entity which has become or becomes a Subsidiary of
Parent, or on assets of any such Business Entity, to the extent that such Liens
existed at the time of such acquisition and were not placed thereon by or with
the consent of Parent in contemplation of such acquisition;
(C) Liens on Margin Stock;
(D) Liens on the Equity Interests in, or Debt or other obligations
of, or assets of, any Project Financing Subsidiary (or any Equity Interests in,
Debt or other obligations of any Business Entity which are owned by any Project
Financing Subsidiary) securing the payment of a Project Financing and related
obligations;
(E) Permitted Liens;
(F) Liens arising out of the refinancing, extension, renewal or
refunding of any Debt or Guaranty secured by any Lien permitted by any of the
foregoing clauses of this Section, provided that the principal amount of such
Debt or Guaranty is not increased (except by the amount of costs reasonably
incurred in connection with the issuance thereof) and such Debt or Guaranty is
not secured by any additional assets that would not have been permitted by this
Section to secure the Debt or Guaranty refinanced, extended, renewed or
refunded; and
(G) Liens on products and proceeds (including dividend, interest
and like payments on, and insurance and condemnation proceeds and rental, lease,
licensing and similar proceeds) of, and property evidencing or embodying, or
constituting rights or other general intangibles relating to, and accessions and
improvements to, collateral subject to Liens permitted by this Section 5.02.
(b) DEBT, ETC. Create, assume or suffer to exist, or permit any of
its consolidated Subsidiaries to create, assume or suffer to exist, any Debt or
any Guaranty unless, immediately after giving effect to such Debt or
77
Guaranty and the receipt and application of any proceeds thereof or value
received in connection therewith,
(1) the sum (without duplication) of (i) consolidated Debt of
Parent and its consolidated Subsidiaries plus (ii) the aggregate amount
(determined on a consolidated basis) of Guaranties by Parent and its
consolidated Subsidiaries is less than 60% of Capitalization, provided that Debt
for borrowed money either maturing within one year and evidenced by instruments
commonly known as commercial paper, or evidenced by variable demand notes or
other similar short-term financing instruments issued to commercial banks and
trust companies (other than Debt incurred pursuant to this Agreement, the U.S.
Short-Term Revolving Credit Agreement or the U.S. Long-Term Revolving Credit
Agreement or any replacement therefor), shall not exceed the sum of unused
commitments under this Agreement, the U.S. Short-Term Revolving Credit Agreement
and the U.S. Long-Term Revolving Credit Agreement and the aggregate of Parent's
unused bank lines of credit and unused credit available to Parent under
financing arrangements with banks or other financial institutions; and
(2) with respect to any such Debt created or assumed by a
consolidated Subsidiary that is either a Subsidiary of Parent as of the Original
Effective Date or a Subsidiary of Parent acquired or created after the Original
Effective Date and owning a material portion of the consolidated operating
assets existing at the Original Effective Date of Parent and its Subsidiaries,
the aggregate amount of Debt of the consolidated Subsidiaries of Parent referred
to above in this paragraph (2) owing to Persons other than Parent and its
consolidated Subsidiaries is less than the greater of (i) U.S.$500,000,000
(exclusive of public Debt of LL&E existing at the time LL&E became a Subsidiary,
the principal amount of which at such time was approximately U.S.$400,000,000,
and any refinancing of such Debt, in a principal amount not to exceed the
principal amount refinanced) and (ii) 30% of Consolidated Tangible Net Worth as
at the date of incurrence or creation of such Debt.
(c) SALE, ETC. OF ASSETS. Sell, lease or otherwise transfer, or
permit any Material Subsidiary to sell, lease or otherwise transfer (in either
case, whether in one transaction or in a series of transactions, and except, in
either case, to a Borrower or Parent or an
78
entity which after giving effect to such transfer will be or become a Material
Subsidiary in which Parent's direct or indirect Equity Interests will be at
least as great as its direct or indirect Equity Interests in the transferor
immediately prior thereto, and except as permitted by Section 5.02(d)), assets
constituting all or substantially all of the consolidated assets of Parent and
its Material Subsidiaries, provided that, notwithstanding the foregoing, Parent
or any Material Subsidiary may sell, lease or otherwise transfer any Permitted
Assets constituting all or substantially all of the consolidated assets of
Parent and its Material Subsidiaries, so long as (A) such Permitted Assets are
sold, leased or otherwise transferred in exchange for other Permitted Assets
and/or (B) the proceeds from such sale, lease or other transfer, or an amount
equal to the proceeds thereof, are (x) reinvested within one year from the date
of receipt thereof in Permitted Assets and/or the development of Permitted
Assets and/or (y) used to repay Debt the proceeds of which were or are being
used for investment in, and/or the development of, Permitted Assets; provided
further that, no such sale, lease or other transfer shall be permitted by the
foregoing proviso unless either (1) after giving effect to such sale, lease or
other transfer, no Event of Default, and no event which with lapse of time or
the giving of notice, or both, would constitute an Event of Default, shall have
occurred and be continuing or (2) Parent or the relevant Material Subsidiary, as
the case may be, was contractually obligated, prior to the occurrence of such
Event of Default or event, to consummate such sale, lease or other transfer.
(d) MERGERS, ETC. Merge, amalgamate or consolidate with any
Person, or in the case of Parent permit any Material Subsidiary to merge,
amalgamate or consolidate with any Person, except that:
(i) any Subsidiary may merge, amalgamate or consolidate with (or
liquidate into) any other Subsidiary or may merge, amalgamate or consolidate
with (or liquidate into) either Borrower or Parent, provided that (A) if such
Subsidiary merges, amalgamates or consolidates with (or liquidates into) either
Borrower or Parent, either (i) the survivor or successor is a Borrower or
Parent, as applicable, or (ii) in the case of an amalgamation involving either
Borrower under the laws of Canada or any province thereof, the continuing
79
corporation resulting from such amalgamation is organized and existing under the
laws of Canada or a province thereof and continues by operation of law to be
liable for all obligations of such Borrower under this Agreement and under the
Notes, provided that notice thereof and a copy of the amalgamation documents are
provided to the Administrative Agent, or (iii) each successor or surviving
Business Entity is organized and existing under the laws of Canada or a province
thereof or the United States or a state thereof, respectively, and expressly
assumes the obligations of such Borrower or Parent, as applicable, hereunder and
under the Notes, (B) if any such Subsidiary merges, amalgamates or consolidates
with (or liquidates into) any other Subsidiary of Parent, one or more Business
Entities that are Subsidiaries of Parent are the surviving or successor Business
Entity(ies) and, if either such Subsidiary is not directly or indirectly
wholly-owned by either Borrower or Parent, such merger, amalgamation or
consolidation is on an arm's length basis and (C) as a result of such merger,
amalgamation or consolidation, no Event of Default, and no event which with
lapse of time or the giving of notice, or both, would constitute an Event of
Default, shall have occurred and be continuing, and
(ii) each Borrower, Parent or any Material Subsidiary may merge,
amalgamate or consolidate with any other Business Entity (that is, in addition
to the Borrowers, Parent or any other Subsidiary of Parent), provided that (A)
if either Borrower or Parent merges, amalgamates or consolidates with any such
other Business Entity(ies), either the survivor or successor Business Entity is
a Borrower or Parent, as applicable, (B) if any Material Subsidiary merges,
amalgamates or consolidates with any such other Business Entity, each surviving
or successor Business Entity is a directly or indirectly wholly-owned
Subsidiary, and (C) if a Borrower, Parent or any Material Subsidiary merges,
amalgamates or consolidates with any such other Business Entity, after giving
effect to such merger, amalgamation or consolidation no Event of Default, and no
event which with lapse of time or the giving of notice, or both, would
constitute an Event of Default, shall have occurred and be continuing.
(e) DIVIDEND RESTRICTIONS. Create, or consent or agree to, or
permit any of its Material Subsidiaries existing on the Original Effective Date
or any of its Subsidiaries thereafter created or acquired and owning a
80
material portion of the consolidated operating assets existing at the Original
Effective Date of Parent and its Subsidiaries, to create, or consent or agree
to, any restrictions, contained in any agreement or instrument relating to or
evidencing Debt, on any such Subsidiary's ability to pay dividends or to make
advances to Parent or any Subsidiary of Parent; provided, however, that this
subsection (e) shall not apply to any such restrictions (including any
extensions of the term of any thereof (by amendment, or continuation thereof in
any refinancing of the Debt to which such restriction relates, or otherwise))
applicable to the Equity Interests in any Subsidiary of Parent, the Equity
Interests in which are acquired by Parent after the Original Effective Date and
which restrictions are existing at the time such Subsidiary first becomes a
Subsidiary of Parent and are not placed thereon by or with the consent of Parent
in contemplation of such acquisition by Parent.
SECTION 5.03 REPORTING REQUIREMENTS. So long as any Note shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrowers
will furnish to each Lender in such reasonable quantities as shall from time to
time be requested by such Lender:
(a) within 60 days after the end of each of the first three
quarters of each fiscal year of Parent, a consolidated balance sheet of Parent
and its consolidated Subsidiaries as of the end of such quarter, and
consolidated statements of income and cash flow of Parent and its consolidated
Subsidiaries each for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, certified (subject to normal
year-end adjustments) as to fairness and utilization of GAAP by the chief
financial officer of Parent and accompanied by a certificate of such officer
stating (i) that such statements of income and cash flow and such balance sheet
have been prepared in accordance with GAAP, (ii) whether or not such officer has
knowledge of the occurrence of any Event of Default which is continuing
hereunder or of any event not theretofore remedied which with notice or lapse of
time or both would constitute such an Event of Default and, if so, stating in
reasonable detail the facts with respect thereto, (iii) all relevant facts in
reasonable detail to evidence, and the computations as to, whether or not Parent
is in compliance with the requirements set forth in subsection (b) of Section
5.02, and (iv) a listing of all Material Subsidiaries and consolidated
Subsidiaries
81
of Parent showing the extent of its direct and indirect holdings of their Equity
Interests;
(b) within 120 days after the end of each fiscal year of Parent, a
copy of the annual report for such year for Parent and its consolidated
Subsidiaries containing financial statements for such year reported on by
nationally recognized independent public accountants acceptable to the Lenders,
accompanied by (i) a report signed by said accountants stating that such
financial statements have been prepared in accordance with GAAP and (ii) a
letter from such accountants stating that in making the investigations necessary
for such report they obtained no knowledge, except as specifically stated
therein, of any Event of Default which is continuing hereunder or of any event
not theretofore remedied which with notice or lapse of time or both would
constitute such an Event of Default (which letter may be limited in form, scope
and substance to the extent required by applicable accounting rules or
guidelines in effect from time to time);
(c) within 120 days after the close of Parent's fiscal years, a
certificate of the chief financial officer of Parent stating (i) whether or not
such officer has knowledge of the occurrence of any Event of Default which is
continuing hereunder or of any event not theretofore remedied which with notice
or lapse of time or both would constitute such an Event of Default and, if so,
stating in reasonable detail the facts with respect thereto, (ii) all relevant
facts in reasonable detail to evidence, and the computations as to, whether or
not Parent is in compliance with the requirements set forth in subsection (b) of
Section 5.02 and (iii) a listing of all Material Subsidiaries and consolidated
Subsidiaries of Parent showing the extent of its direct and indirect holdings of
their Equity Interests;
(d) promptly upon their distribution, copies of all financial
statements, reports and proxy statements which the Parent or any Material
Subsidiary shall have sent to its public Equity Interest holders;
(e) promptly upon their becoming publicly available, all regular
and periodic financial reports and registration statements which either Borrower
or any Material Subsidiary shall file with the Securities and Exchange
Commission or any national securities exchange other than registration
statements relating to employee
82
benefit plans and to registration statements of securities for selling security
holders;
(f) promptly in writing, notice of all litigation and of all
proceedings before any governmental or regulatory agencies against or involving
Parent or any Material Subsidiary, except any litigation or proceeding which in
the reasonable judgment of Parent (taking into account the exhaustion of all
appeals) is not likely to have a material adverse effect on the consolidated
financial condition of Parent and its consolidated Subsidiaries taken as a
whole;
(g) within three Business Days after an executive officer of
either Borrower or Parent obtains knowledge of the occurrence of any Event of
Default which is continuing or of any event not theretofore remedied which with
notice or lapse of time, or both, would constitute an Event of Default, notice
of such occurrence together with a detailed statement by a responsible officer
of such Borrower or Parent of the steps being taken by such Borrower, Parent or
the appropriate Subsidiary to cure the effect of such event;
(h) as soon as practicable and in any event (i) within 30 days
after Parent or any ERISA Affiliate knows or has reason to know that any
Termination Event described in clause (i) of the definition of Termination Event
with respect to any Plan has occurred and (ii) within 10 days after Parent or
any ERISA Affiliate knows or has reason to know that any other Termination Event
with respect to any Plan has occurred, a statement of the chief financial
officer of Parent describing such Termination Event and the action, if any,
which Parent or such ERISA Affiliate proposes to take with respect thereto;
(i) promptly and in any event within two Business Days after
receipt thereof by Parent or any ERISA Affiliate, copies of each notice received
by Parent or any ERISA Affiliate from the PBGC stating its intention to
terminate any Plan or to have a trustee appointed to administer any Plan;
(j) promptly and in any event within 30 days after the filing
thereof with the Internal Revenue Service, copies of each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) with respect to each Plan;
83
(k) promptly and in any event within five Business Days after
receipt thereof by Parent or any ERISA Affiliate from the sponsor of a
Multiemployer Plan, a copy of each notice received by Parent or any ERISA
Affiliate concerning (i) the imposition of Withdrawal Liability by a
Multiemployer Plan, (ii) the determination that a Multiemployer Plan is, or is
expected to be, in reorganization within the meaning of Title IV of ERISA, (iii)
the termination of a Multiemployer Plan within the meaning of Title IV of ERISA,
or (iv) the amount of liability incurred, or expected to be incurred, by Parent
or any ERISA Affiliate in connection with any event described in clause (i),
(ii) or (iii) above; and
(l) as soon as practicable but in any event within 60 days of any
notice of request therefor, such other information respecting the financial
condition and results of operations of Parent or any Subsidiary as any Lender
through the Administrative Agent may from time to time reasonably request.
Each balance sheet and other financial statement furnished pursuant to
subsections (a) and (b) of this Section 5.03 shall contain comparative
information which conforms to the presentation required in Form 10-Q and Form
10-K, as appropriate, under the Securities Exchange Act of 1934, as amended.
ARTICLE 6
EVENTS OF DEFAULT
SECTION 6.01 EVENTS OF DEFAULT. If any of the following events
("EVENTS OF DEFAULT") shall occur and be continuing:
(a) Either Borrower shall fail to pay any principal of any Advance
within two Business Days after the same shall be due, or any interest on any
Advance or any other amount payable hereunder within five Business Days after
the same shall be due; or
(b) Any representation or warranty made or deemed made by either
Borrower or Parent herein or by either Borrower or Parent (or any of its
officers) in connection with this Agreement shall prove to have been incorrect
in any material respect when made or deemed made; or
84
(c) Either Borrower or Parent shall fail to perform or observe any
other term, covenant or agreement contained in this Agreement on its part to be
performed or observed and any such failure shall remain unremedied for 30 days
after written notice thereof shall have been given to the Borrowers or Parent by
the Administrative Agent or by any Lender with a copy to the Administrative
Agent; or
(d) Parent or any Material Subsidiary of Parent shall fail to pay
any Debt or Guaranty (excluding any Advances) of either Borrower, Parent or such
Subsidiary (as the case may be) in an aggregate principal amount in excess of
the greater of (i) U.S.$100,000,000 and (ii) 3% of Consolidated Tangible Net
Worth at such time, or any installment of principal thereof or interest or
premium thereon, when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Debt or Guaranty; or any other default under any agreement or
instrument relating to any such Debt, or any other event, shall occur and shall
continue after the applicable grace period, if any, specified in such agreement
or instrument, if the effect of such default or event is to accelerate the
maturity of such Debt; provided that, notwithstanding any provision contained in
this subsection (d) to the contrary, to the extent that pursuant to the terms of
any agreement or instrument relating to any Debt referred to in this subsection
(d), any sale, pledge or disposal of Margin Stock, or utilization of the
proceeds thereof would result in a breach of any covenant contained therein or
otherwise give rise to a default or event of default thereunder and/or
acceleration of the maturity of the Debt extended pursuant thereto and as a
result of such terms or of such sale, pledge, disposal, utilization, breach,
default, event of default or acceleration, or the provisions hereof relating
thereto, this Agreement or any Advance hereunder would otherwise be subject to
margin requirements or any other restriction under Regulation U issued by the
Board of Governors of the United States Federal Reserve System, then such
breach, default, event of default or acceleration shall not constitute a default
or Event of Default under this subsection (d); or
(e) (i) Parent or any Material Subsidiary shall (A) generally not
pay its debts as such debts become due; or (B) admit in writing its inability to
pay its debts
85
generally; or (C) make a general assignment for the benefit of creditors; or
(ii) any proceeding shall be instituted or consented to by Parent or any such
Material Subsidiary seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, or other similar
official for it or for any substantial part of its property; or (iii) any such
proceeding shall have been instituted against either Borrower, Parent or any
such Subsidiary and either such proceeding shall not be stayed or dismissed for
60 consecutive days or any of the actions referred to above sought in such
proceeding (including the entry of an order for relief against it or the
appointment of a receiver, trustee, custodian or other similar official for it
or any substantial part of its property) shall occur; or (iv) either Borrower,
Parent or any such Subsidiary shall take any corporate action to authorize any
of the actions set forth above in this subsection (e); or
(f) Any judgment or order for the payment of money in excess the
greater of (i) U.S.$100,000,000 and (ii) 3% of Consolidated Tangible Net Worth
at such time shall be rendered against Parent or any Material Subsidiary and
either (i) enforcement proceedings shall have been commenced and are continuing
or have been completed by any creditor upon such judgment or order (other than
any enforcement proceedings consisting of the mere obtaining and filing of a
judgment lien or obtaining of a garnishment or similar order so long as no
foreclosure, levy or similar process in respect of such lien, or payment over in
respect of such garnishment or similar order, has commenced and is continuing or
has been completed) or (ii) there shall be any period of 30 consecutive days
during which a stay of execution or enforcement proceedings (other than those
referred to in the parenthesis in clause (i) above) in respect of such judgment
or order, by reason of a pending appeal, bonding or otherwise, shall not be in
effect; or
(g) Any Termination Event with respect to a Material Plan shall
have occurred and, 30 days after notice thereof shall have been given to Parent
by the Lender, (i) such Termination Event shall still exist and (ii) the sum
(determined as of the date of occurrence of such
86
Termination Event) of the Insufficiency of such Plan and the Insufficiency of
any and all other Plans with respect to which a Termination Event shall have
occurred and then exist (or in the case of a Plan with respect to which a
Termination Event described in clause (ii) of the definition of Termination
Event shall have occurred and then exist, the liability related thereto), in
each case in respect of which Parent or any ERISA Affiliate has liability, is
equal to or greater than U.S.$50,000,000; or
(h) Parent or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to
such Multiemployer Plan in an amount which, when aggregated with all other
amounts required to be paid to Multiemployer Plans in connection with Withdrawal
Liabilities (determined as of the date of such notification), exceeds
U.S.$50,000,000; or
(i) Parent or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
if as a result of such reorganization or termination the aggregate annual
contributions of Parent and its ERISA Affiliates to all Multiemployer Plans
which are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the
respective plan years which include the Original Effective Date by an amount
exceeding U.S.$50,000,000; or
(j) Upon completion of, and pursuant to, a transaction, or a
series of transactions (which may include prior acquisitions of capital stock of
Parent in the open market or otherwise), involving a tender offer (i) a "person"
(within the meaning of Section 13(d) of the Securities Exchange Act of 1934)
other than Parent, a Subsidiary of Parent or any employee benefit plan
maintained for employees of Parent and/or any of its respective Subsidiaries or
the trustee therefor, shall have acquired direct or indirect ownership of and
paid for in excess of 50% of the outstanding capital stock of Parent entitled to
vote in elections for directors of Parent and (ii) at any time before the later
of (x) six months after the completion of such tender offer and (y) the next
annual meeting of the shareholders of Parent following the completion of such
tender offer more than
87
half of the directors of Parent consists of individuals who (a) were not
directors before the completion of such tender offer and (b) were not appointed,
elected or nominated by the Board of Directors in office prior to the completion
of such tender offer (other than any such appointment, election or nomination
required or agreed to in connection with, or as a result of, the completion of
such tender offer); or
(k) Either Borrower ceases to be a direct or indirect wholly-owned
Subsidiary of the Parent; or
(l) The Guaranty of Parent hereunder shall not be (or shall be
claimed by Parent, either Borrower or any Subsidiary of Parent not to be) valid
or in full force and effect; provided that if within one Business Day after the
Borrowers or Parent receive notice from the Administrative Agent or otherwise
becomes aware that such Guaranty is not valid or in full force and effect,
Parent delivers written notice to the Administrative Agent that it intends to
deliver a valid and effective Guaranty, or to reinstate such Guaranty, as soon
as possible, then an Event of Default shall not exist pursuant this Section
6.01(l) unless Parent shall fail to deliver or reinstate a Guaranty having
substantially the same effect as the Guaranty set forth in Article 8 within four
Business Days after the delivery of such written notice of intent.
(m) Any "Event of Default" as defined in the U.S. Short-Term
Revolving Credit Agreement or the U.S. Long-Term Revolving Credit Agreement
shall occur and be continuing; then, and in any such event, the Administrative
Agent shall at the request, or may with the consent, of the Majority Lenders, by
notice to the Borrowers and Parent, (i) declare the obligation of each Lender to
make Advances to be terminated, whereupon the same shall forthwith terminate,
and (ii) declare the Advances, all interest thereon and all other amounts
payable under this Agreement to be forthwith due and payable, whereupon the
Advances, all such interest and all such amounts shall become and be forthwith
due and payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrowers and Parent;
provided, however, that if an Event of Default under subsection (e) of this
Section 6.01 (except under clause (i)(A) thereof) shall occur, (A) the
obligation of each Lender to make Advances shall
88
automatically be terminated and (B) the Advances, all interest thereon and all
other amounts payable under this Agreement shall automatically become and be
forthwith due and payable, without presentment, demand, protest or any notice of
any kind, all of which are hereby expressly waived by the Borrowers and Parent.
ARTICLE 7
THE ADMINISTRATIVE AGENT
SECTION 7.01 AUTHORIZATION AND ACTION. Each Lender hereby appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement (including enforcement of this Agreement or collection of the
Notes), the Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Majority Lenders, and such instructions shall be
binding upon all Lenders and all holders of Notes; provided, however, that the
Administrative Agent shall not be required to take any action which exposes the
Administrative Agent to personal liability or which is contrary to this
Agreement or applicable law. The Administrative Agent agrees to give to each
Lender prompt notice of each notice given to it by the Borrowers pursuant to the
terms of this Agreement. Nothing in this Agreement shall impose upon any
Co-Syndication Agent or Co-Documentation Agent, in its capacity as such, any
duty or liability whatsoever.
SECTION 7.02 ADMINISTRATIVE AGENT'S RELIANCE, ETC. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with this Agreement, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Administrative Agent: (i) may treat the payee of any Note as the
holder thereof until the Administrative Agent receives and accepts an Assignment
and Acceptance entered into by the Lender which is the payee of such Note, as
assignor, and an Eligible Assignee, as assignee, as
89
provided in Section 9.07; (ii) may consult with legal counsel (including counsel
for the Borrowers and Parent), independent public accountants and other experts
selected by it 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; (iii) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for any statements, warranties or
representations (whether written or oral) made in or in connection with this
Agreement; (iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement on the part of the Borrowers and Parent or to inspect the property
(including the books and records) of the Borrowers or Parent; (v) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
instrument or document furnished pursuant hereto; and (vi) shall incur no
liability under or in respect of this Agreement by acting upon any notice,
consent, certificate or other instrument or writing (which may be by facsimile,
electronic mail, telegram, telecopy, cable or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
SECTION 7.03 ADMINISTRATIVE AGENT AND AFFILIATES. With respect to
its Commitments, the Advances made by it and the Notes issued to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any other Lender and may exercise the same as though it were not the
Administrative Agent; and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include the Administrative Agent in its individual
capacity. The Administrative 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, Parent, the Borrowers, any of their Subsidiaries, and any
Person who may do business with or own securities of Parent, the Borrowers or
any of their Subsidiaries, all as if the Administrative Agent were not the
Administrative Agent and without any duty to account therefor to the other
Lenders.
SECTION 7.04 LENDER CREDIT DECISION. Each Lender acknowledges that
it has, independently and without reliance upon the Administrative Agent or any
other Lender and based on the financial statements referred to
90
in Section 4.01 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement.
SECTION 7.05 INDEMNIFICATION. THE LENDERS AGREE TO INDEMNIFY THE
ADMINISTRATIVE AGENT (TO THE EXTENT NOT REIMBURSED BY THE BORROWERS OR PARENT),
RATABLY ACCORDING TO THE RESPECTIVE PRINCIPAL AMOUNTS OF THE ADVANCES THEN HELD
BY EACH OF THEM (OR IF NO ADVANCES ARE AT THE TIME OUTSTANDING OR IF ANY
ADVANCES ARE HELD BY PERSONS WHICH ARE NOT LENDERS, RATABLY ACCORDING TO THE
RESPECTIVE AMOUNTS OF THEIR COMMITMENTS OR THE RESPECTIVE AMOUNTS OF THEIR
COMMITMENTS IMMEDIATELY PRIOR TO TERMINATION IF THE COMMITMENTS HAVE BEEN
TERMINATED), FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES AND DISBURSEMENTS
OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY, OR
ASSERTED AGAINST THE ADMINISTRATIVE AGENT IN ANY WAY RELATING TO OR ARISING OUT
OF THIS AGREEMENT, ANY OF THE NOTES OR ANY OTHER FINANCING DOCUMENT OR OTHER
INSTRUMENT OR DOCUMENT FURNISHED PURSUANT HERETO OR IN CONNECTION HEREWITH, OR
ANY ACTION TAKEN OR OMITTED BY THE ADMINISTRATIVE AGENT UNDER THIS AGREEMENT, OR
ANY OF THE NOTES OR ANY OTHER FINANCING DOCUMENT OR OTHER INSTRUMENT OR DOCUMENT
FURNISHED PURSUANT HERETO OR IN CONNECTION HEREWITH; 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 ADMINISTRATIVE AGENT'S GROSS NEGLIGENCE OR WILFUL MISCONDUCT.
Without limitation of the foregoing, each Lender agrees to reimburse
the Administrative Agent promptly upon demand for such Lender's ratable share of
any reasonable out-of-pocket expenses (including counsel fees) incurred by the
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings, in bankruptcy or insolvency proceedings, or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, any of the Notes or any other
91
instrument or document furnished pursuant hereto or in connection herewith to
the extent that the Administrative Agent acts in its capacity as Administrative
Agent and is not reimbursed for such expenses by the Borrowers or Parent.
SECTION 7.06 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative
Agent may resign at any time by giving written notice thereof to the Lenders,
the Borrowers and Parent and may be removed at any time with or without cause by
the Majority Lenders. Upon any such resignation or removal, the Majority Lenders
shall have the right to appoint a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by the Majority
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent's giving of notice of resignation or the Majority
Lenders' removal of the retiring Administrative Agent, then such retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a bank organized, or authorized to conduct
a banking business, under the federal laws of Canada and having a combined
capital and surplus of at least U.S.$500,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring
Administrative Agent's resignation or removal hereunder as Administrative Agent,
the provisions of this Article 7 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement.
ARTICLE 8
GUARANTY
In order to induce the Lenders to extend credit hereunder, (i) each of
Parent and BRCL hereby irrevocably and unconditionally guarantees the
Obligations of Canadian Hunter, and (ii) each of Parent and Canadian Hunter
hereby irrevocably and unconditionally guarantees the Obligations of BRCL. Each
Guarantor agrees that the
92
Guaranteed Parties may make a claim under its guarantee immediately upon the
occurrence of an Event of Default or at any time thereafter, but (other than in
the case of an Event of Default in respect of either Borrower under Section
6.01(e) (except clause (i)(A) thereof)) following the making of a demand on the
applicable Borrower for payment or performance, as applicable, without any
obligation to first seek any other remedy or take any other action against such
Borrower. Each Guarantor further agrees that the due and punctual payment of the
Obligations may be extended or renewed, in whole or in part, without notice to
or further assent from it, and that it will remain bound upon its Guaranty
hereunder notwithstanding any such extension or renewal of any Obligation. Each
and every default in payment of the principal of and premium, if any, or
interest on any Obligation shall give rise to a separate cause of action
hereunder, and separate suits may be brought hereunder as each cause of action
arises.
Each Guarantor waives presentment to, demand of payment from and
protest to the applicable Borrower of any of the Obligations of such Borrower,
and also waives notice of acceptance of its obligations and notice of protest
for nonpayment. The obligations of each Guarantor hereunder shall not be
affected by (a) the failure of any Guaranteed Party to assert any claim or
demand or to enforce any right or remedy against any Borrower or Parent under
the provisions of this Agreement, any other Financing Document or otherwise; (b)
any extension or renewal of any of the Obligations; (c) any rescission, waiver,
amendment or modification of, or release from, any of the terms or provisions of
this Agreement or any other Financing Document or agreement; (d) the failure or
delay of any Guaranteed Party to exercise any right or remedy against any other
guarantor of the Obligations; (e) the failure of any Guaranteed Party to assert
any claim or demand or to enforce any remedy under any Financing Document, any
guaranty or any other agreement or instrument; (f) any default, failure or
delay, wilful or otherwise, in the performance of the Obligations; or (h) any
other act, omission or delay to do any other act which may or might in any
manner or to any extent vary the risk of any Guarantor or otherwise operate as a
discharge of any Guarantor as a matter of law or equity or which would impair or
eliminate any right of any Guarantor to subrogation.
Each Guarantor further agrees that its agreement
93
hereunder constitutes a promise of payment when due (whether or not any
bankruptcy or similar proceeding shall have stayed the accrual or collection of
any of the Obligations or operated as a discharge thereof) and not merely of
collection, and waives any right to require that any resort be had by any
Guaranteed Party to any balance of any deposit account or credit on the books of
any Guaranteed Party in favor of the applicable Borrower or any other Person.
The obligations of the Guarantors hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, and shall not
be subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever, by reason of the invalidity, illegality or unenforceability of the
Obligations, any impossibility in the performance of the Obligations or
otherwise.
Each Guarantor further agrees that its obligations hereunder shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any Obligation is rescinded or must otherwise
be restored by any Guaranteed Party upon the bankruptcy or reorganization of the
applicable Borrower or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Guaranteed Party may have at law or in equity against any
Guarantor by virtue hereof, upon the failure of the applicable Borrower to pay
any Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, Parent and (a) BRCL (in
the event such Obligation is due and payable by Canadian Hunter) or (b) Canadian
Hunter (in the event such Obligation is due and payable by BRCL), hereby, in
their respective capacity as Guarantor, promise to and will, upon receipt of
written demand by the Administrative Agent, forthwith pay, or cause to be paid,
to the Administrative Agent for distribution to the Guaranteed Parties in cash
an amount equal to the sum of (i) the unpaid principal amount of such
Obligations then due, (ii) accrued and unpaid interest and fees on such
Obligations and (iii) all other monetary Obligations then due. Each Guarantor,
as applicable, further agrees that if payment in respect of any Obligation shall
be due in a currency other than Cdn. Dollars and/or at a place of payment other
than Toronto, Ontario and if, by reason of
94
any Change in Law, disruption of currency or foreign exchange markets, war or
civil disturbance or similar event, payment of such Obligation in such currency
or at such place of payment shall be impossible or, in the judgment of any
Guaranteed Party, not consistent with the protection of its rights or interests,
then, at the election of such Guaranteed Party, each Guarantor, as applicable,
shall make payment of such Obligation in Cdn. Dollars (based upon the applicable
Exchange Rate in effect on the date of payment) and/or in Toronto, Ontario, and
shall indemnify such Guaranteed Party against any losses or expenses that it
shall sustain as a result of such alternative payment.
Upon payment in full by a Guarantor of any Obligation of the applicable
Borrower, each Lender shall, in a reasonable manner, assign the amount of such
Obligation owed to it and so paid to such Guarantor, such assignment to be pro
tanto to the extent to which the Obligation in question was discharged by such
Guarantor, or make such disposition thereof as such Guarantor, as applicable,
shall direct (all without recourse to any Guaranteed Party and without any
representation or warranty by any Guaranteed Party).
Upon payment by any Guarantor of any sums as provided above, all rights
of such Guarantor against the applicable Borrower arising as a result thereof by
way of right of subrogation or otherwise shall in all respects be subordinated
and junior in right of payment to the prior indefeasible payment in full of all
the Obligations owed by such Borrower to the Guaranteed Parties.
Nothing shall discharge or satisfy the liability of any Guarantor
hereunder except the full performance and payment of the Obligations.
Each reference herein to any Guaranteed Party shall be deemed to
include their or its successors and assigns, in whose favor the provisions of
this Guaranty shall also inure.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01 AMENDMENTS, ETC. An amendment or waiver of any
provision of this Agreement, the Notes or
95
any other Financing Document, or a consent to any departure by the Borrowers
therefrom, shall be effective against the Lenders and all holders of the Notes
if, but only if, it shall be in writing and signed or consented to in writing by
the Majority Lenders or, where so specified, the Required Lenders (except any
amendment to give effect to increased Commitments and New Lenders, as
contemplated by Section 2.20), and then such a waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no such amendment, waiver or consent shall,
unless in writing and signed by all the Lenders, be effective to: (a) waive any
of the conditions specified in Article 3, (b) except as contemplated by Section
2.20, increase the Commitments of the Lenders or subject the Lenders to any
additional obligations, (c) reduce the principal of, or interest on, the
Advances or any facility fees or utilization fees hereunder, (d) except as
contemplated by Section 2.21, postpone any date fixed for any payment of
principal of, or interest on, the Advances or any facility fees or utilization
fees hereunder, (e) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Advances, which shall be required for the Lenders
or any of them to take any action under this Agreement, (f) amend Article VIII
or this Section 9.01, or (g) waive any Event of Default pursuant to Section
6.01(l); and, provided further that no amendment, waiver or consent shall,
unless in writing and signed by the Administrative Agent in addition to the
Lenders required herein above to take such action, affect the rights or duties
of the Administrative Agent under this Agreement or any Note.
SECTION 9.02 NOTICES, ETC. Except as otherwise provided in Section
2.02(a) or 2.10(ii), all notices and other communications provided for hereunder
shall be in writing and mailed by registered mail, return receipt requested and
postage prepaid, or telecopied, sent by facsimile or otherwise teletransmitted,
or delivered, if to the BRCL, c/o Burlington Resources Inc. at 5051 Westheimer,
Suite 1400, Houston, Texas 77056, Attention: Treasurer, Facsimile: (713)
624-9627 with a copy to Burlington Resources Canada Ltd. 3700, 250 6th Avenue
S.W., Calgary, Alberta, Canada T2P3H7, Attention: Dave Belcher, Facsimile: (403)
263-2708 ; if to Canadian Hunter, c/o Burlington Resources Inc. at 5051
Westheimer, Suite 1400, Houston, Texas 77056, Attention: Treasurer, Facsimile:
(713) 624-9627 with a copy to Canadian Hunter
96
Exploration Ltd. 3700, 250 6th Avenue S.W., Calgary, Alberta, Canada T2P3H7,
Attention: Dave Belcher, Facsimile: (403) 263-2708; if to Parent, Burlington
Resources Inc. at 5051 Westheimer, Suite 1400, Houston, Texas 77056, Attention:
Treasurer, Facsimile: (713) 624-9627; if to any Initial Lender, at its
Applicable Lending Office set forth in such Initial Lender's Administrative
Questionnaire; if to any other Lender at its Applicable Lending Office specified
in the Assignment and Acceptance or Commitment Increase Agreement pursuant to
which it became a Lender; if to the Administrative Agent, in care of JPMorgan
Chase Bank, Toronto Branch, 200 Bay Street, Suite 1800, Royal Bank Plaza, South
Tower, Toronto, Ontario, M5J 2J2, Attention: Amanda Staff, Telefax: (416)
981-9128, with a copy to JPMorgan Chase Bank, at 600 Travis Street, 20th Floor,
Houston, TX 77002, Attention: Russell Johnson, Telefax: (713) 216-8870; or, as
to each party, at such other address as shall be designated by such party in a
written notice to the other parties. All such notices and communications shall
be effective, (a) in the case of any notice or communication given by certified
mail, when receipted for, (b) in the case of any notice or communication given
by telecopy, facsimile or other teletransmission, when confirmed by appropriate
answerback, in each case addressed as aforesaid, and (c) in the case of any
notice or communication delivered by hand or courier, when so delivered, except
that notices and communications to the Administrative Agent pursuant to Article
2 or 7 shall not be effective until received by the Administrative Agent. A
notice received by the Administrative Agent or a Lender by telephone pursuant to
Section 2.02(a) or 2.10(ii) shall be effective if the Administrative Agent or
Lender believes in good faith that it was given by an authorized representative
of the applicable Borrower or Parent and acts pursuant thereto, notwithstanding
the absence of written confirmation or any contradictory provision thereof.
SECTION 9.03 NO WAIVER; REMEDIES. No failure on the part of any
Lender or the Administrative Agent to exercise, and no delay in exercising, any
right hereunder or under any Note shall operate as a waiver thereof; nor shall
any single or partial exercise of any right hereunder or under any Note preclude
any other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
97
SECTION 9.04 COSTS AND EXPENSES; INDEMNITY.
(a) Each Borrower agrees to pay on demand (i) all reasonable fees
and out-of-pocket expenses of counsel for the Administrative Agent and the
Arranger in connection with the preparation, execution and delivery of this
Agreement, the Notes and the other Financing Documents to be delivered hereunder
and with respect to advising the Administrative Agent and the Arranger as to
their respective rights and responsibilities under this Agreement, (ii) all
reasonable costs and expenses incurred by the Administrative Agent and its
Affiliates and the Arranger and their Affiliates in initially syndicating all or
any portion of the Commitments hereunder, including the related reasonable fees
and out-of-pocket expenses of counsel for the Administrative Agent or its
Affiliates and the Arranger and their Affiliates, travel expenses, duplication
and printing costs and courier and postage fees, and excluding any syndication
fees paid to other parties joining the syndicate and (iii) all out-of-pocket
costs and expenses, if any, of the Administrative Agent and the Arranger and the
Lenders (including reasonable counsel fees and expenses and the allocated costs
of in-house counsel), in connection with the enforcement (whether through
negotiations, legal proceedings, in bankruptcy or insolvency proceedings, or
otherwise) of this Agreement, the Notes and the other Financing Documents to be
delivered hereunder and thereunder.
(b) If any payment of principal of, or Continuation of, any
Eurodollar Rate Advance is made by either Borrower to or for the account of a
Lender on any day other than the last day of the Interest Period for such
Advance, as a result of a prepayment pursuant to Section 2.10 or a Continuation
pursuant to Section 2.08(f) or Section 2.09 or due to acceleration of the
maturity of the Advances pursuant to Section 6.01 or due to any other reason
attributable to either Borrower, or if either Borrower shall fail to borrow,
Continue or prepay any Eurodollar Rate Advance on the date specified in any
notice delivered pursuant hereto, the applicable Borrower shall, upon demand by
such Lender (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses, costs or expenses which it may
reasonably incur as a result of such payment or Continuation, including any loss
(excluding loss of
98
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender to fund or
maintain such Advance.
(c) If any payment of principal of any B/A Advance is made by
either Borrower to or for the account of a Lender on any day other than the last
day of the Interest Period for such Advance, due to acceleration of the maturity
of the Advances pursuant to Section 6.01, or if either Borrower shall fail to
borrow, Continue or prepay any B/A Advance on the date specified in any notice
delivered pursuant hereto, the applicable Borrower shall, upon demand by such
Lender (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses, costs or expenses which it may
reasonably incur as a result of such payment, including any loss (excluding loss
of anticipated profits), cost or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by any Lender to fund or
maintain such Advance. It is understood that a defeasance of B/A's under Section
2.10(a) shall not constitute a prepayment.
(d) EACH OF BRCL, CANADIAN HUNTER AND PARENT AGREES TO INDEMNIFY
AND HOLD HARMLESS THE ADMINISTRATIVE AGENT, THE ARRANGER AND EACH LENDER FROM
AND AGAINST ANY AND ALL CLAIMS, DAMAGES, LIABILITIES AND EXPENSES (INCLUDING
FEES AND DISBURSEMENTS OF COUNSEL) WHICH MAY BE INCURRED BY OR ASSERTED AGAINST
THE ADMINISTRATIVE AGENT, THE ARRANGER OR SUCH LENDER IN CONNECTION WITH OR
ARISING OUT OF ANY INVESTIGATION, LITIGATION, OR PROCEEDING (WHETHER OR NOT THE
ADMINISTRATIVE AGENT, THE ARRANGER OR SUCH LENDER IS PARTY THERETO) RELATED TO
ANY ACQUISITION OR PROPOSED ACQUISITION BY EITHER BORROWER, OR BY ANY SUBSIDIARY
OF EITHER BORROWER, OF ALL OR ANY PORTION OF THE EQUITY INTERESTS IN, OR
SUBSTANTIALLY ALL THE ASSETS OF, ANY PERSON OR ANY USE OR PROPOSED USE OF THE
ADVANCES BY EITHER BORROWER (EXCLUDING ANY CLAIMS, DAMAGES, LIABILITIES OR
EXPENSES INCURRED BY REASON OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE
PARTY TO BE INDEMNIFIED OR ITS EMPLOYEES OR ADMINISTRATIVE AGENTS, OR BY REASON
OF ANY USE OR DISCLOSURE OF INFORMATION RELATING TO ANY SUCH ACQUISITION OR USE
OR PROPOSED USE OF THE PROCEEDS BY THE PARTY TO BE INDEMNIFIED OR ITS EMPLOYEES
OR ADMINISTRATIVE AGENTS).
99
SECTION 9.05 RIGHT OF SET-OFF. Upon the declaration of the
Advances as due and payable pursuant to the provisions of Section 6.01, each
Lender is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of either Borrower against any and all of the obligations of such
Borrower now or hereafter existing under this Agreement and any Note held by
such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement or such Note and although such obligations may be
unmatured. Each Lender agrees promptly to notify the applicable Borrower after
any such set-off and application made by such Lender, provided that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section 9.05 are in addition
to other rights and remedies (including other rights of set-off) which such
Lender may have.
SECTION 9.06 BINDING EFFECT. This Agreement shall become effective
in accordance with the provisions of Section 3.01, and thereafter shall be
binding upon and inure to the benefit of the Borrowers, Parent, the
Administrative Agent, the Arranger and each Lender and their respective
successors and assigns, except that none of Parent or the Borrowers shall have
the right to assign their rights and obligations hereunder or any interest
herein without the prior written consent of all of the Lenders; provided that
notwithstanding the foregoing either Borrower shall be permitted to transfer its
rights and obligations hereunder to a wholly-owned Subsidiary of Parent (i) if
such Subsidiary is organized and existing under the laws of Canada or any
political subdivision thereof and (ii) the Borrowers guarantee the obligations
of any new Borrower on substantially the terms set forth in Article 8, at which
time BRCL and/or Canadian Hunter, as applicable, shall cease to be a Borrower
hereunder and shall cease to have any liability under this Agreement, the Notes,
if any, or any other Financing Document except under such guarantee and Article
8. Any merger, amalgamation or consolidation in compliance with Section 5.02(d)
of (i) either Borrower with Parent or a wholly-owned Subsidiary of Parent
organized under the laws of Canada or any political subdivision thereof, or
100
(ii) Parent shall not constitute an assignment for purposes of this Section
9.06.
SECTION 9.07 ASSIGNMENTS AND PARTICIPATIONS.
(a) Each Lender may assign to one or more banks or other entities
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Commitment, the Advances owing to it and the Note or
Notes held by it); provided, however, that each such assignment shall be to an
Eligible Assignee and the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note or Notes subject
to such assignment and, except in the case of an assignment to a Lender
Affiliate, a processing and recordation fee of Cdn.$3,500, and shall send to the
Borrowers an executed counterpart of such Assignment and Acceptance, and
provided further, however, that (i) except in the case of an assignment to a
Lender Affiliate, each such assignment shall be of a constant, and not a
varying, percentage of all such Lender's rights and obligations under this
Agreement, (ii) the amount of the Commitment of the assigning Lender being
assigned to the assignee pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to such assignment) must be
equal to or greater than Cdn.$10,000,000, or if less, the entire amount of such
assigning Lender's "Commitment" (unless the Borrowers and the Administrative
Agent shall otherwise consent, which consent may be withheld for any reason) and
must be an integral multiple of Cdn.$1,000,000, and (iii) except in the case of
an assignment by a Schedule II Lender to a Lender Affiliate thereof that is a
Schedule III Bank, any assignment to a Lender Affiliate will not relieve the
assigning Lender of its obligation to make Advances hereunder timely in
accordance with the terms hereof in the event such Lender Affiliate shall fail
to do so. Upon the execution, delivery, acceptance and recording of each
Assignment and Acceptance by the parties thereto, from and after the effective
date specified in such Assignment and Acceptance, (x) the assignee thereunder
shall be a party hereto and, subject to clause (iii) above, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
and (y) except in the circumstances contemplated in clause (iii) above, the
101
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance
covering all or the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party hereto,
provided, however, such assigning Lender shall retain any claim with respect to
any fee, interest, cost, expense or indemnity which accrues, or relates to an
event that occurs, prior to the date of such assignment pursuant to Section
2.03, 2.06, 2.12, 2.13, 2.16 or 9.04.
(b) By executing and delivering an Assignment and Acceptance, each
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrowers or Parent or the performance or observance by the Borrowers or Parent
of any of their respective obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of the
financial statements referred to in Section 4.01 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Administrative Agent, such assigning
Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee confirms
that it is (subject to approval in writing by the Borrowers and the
Administrative Agent to the extent required) an Eligible Assignee; (vi) such
assignee appoints and authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Administrative Agent by the terms hereof, together with such
powers as are reasonably
102
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(c) The Administrative Agent shall maintain at its address
referred to in Section 9.02 a copy of each Assignment and Acceptance, each New
Lender Agreement and each Commitment Increase Agreement delivered to and
accepted by it and a register (which register may be in electronic form) for the
recordation of the names and addresses of the Lenders and the Commitment of, and
principal amount of the Advances owing to, each Lender from time to time (the
"REGISTER"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrowers, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by either Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender and an assignee representing that it is an Eligible
Assignee, together with any Note or Notes subject to such assignment, the
Administrative Agent shall, if such Assignment and Acceptance has been completed
and is in substantially the form of Exhibit D hereto, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register
and (iii) give prompt notice thereof to the Borrowers. Within five Business Days
after its receipt of such notice and its receipt of an executed counterpart of
such Assignment and Acceptance, the applicable Borrower, at its own expense,
shall execute and deliver to the Administrative Agent in exchange for any
surrendered Note or Notes new Notes evidencing Advances made to such Borrower to
the order of such Eligible Assignee and, if the assigning Lender has retained a
Commitment hereunder, new Notes to the order of the assigning Lender. Any such
new Note or Notes shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit A hereto.
(e) Each Lender may sell participations to one or more banks or
other entities in or to all or a portion of its rights and obligations under
this Agreement
103
(including all or a portion of its Commitment, and the Advances owing to it and
the Note or Notes held by it); provided, however, that (i) such Lender's
obligations under this Agreement (including its Commitment to the Borrowers
hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Note for all purposes of
this Agreement, (iv) the Borrowers, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement, (v)
such Lender shall continue to be able to agree to any modification or amendment
of this Agreement or any waiver hereunder without the consent, approval or vote
of any such participant or group of participants, other than modifications,
amendments and waivers which (A) postpone any date fixed for any payment of, or
reduce any payment of, principal of or interest on such Lender's Advances or any
facility fees or utilization fees payable under this Agreement, or (B) increase
the amount of such Lender's Commitment in a manner which would have the effect
of increasing the amount of a participant's participation, or (C) reduce the
interest rate payable under this Agreement and such Lender's Advances, or (D)
consent to the assignment or the transfer by the Borrowers or Parent of their
respective rights and obligations under the Agreement, and (vi) except as
contemplated by the immediately preceding clause (v), no participant shall be
deemed to be or to have any of the rights or obligations of a "Lender"
hereunder.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrowers furnished to such Lender
by or on behalf of the Borrowers; provided that, prior to any such disclosure,
the assignee or participant or proposed assignee or participant shall agree in
writing for the benefit of the Borrowers to preserve the confidentiality of any
confidential information relating to the Borrowers received by it from such
Lender in a manner consistent with Section 9.08.
(g) Anything in this Agreement to the contrary notwithstanding,
any Lender may at any time create a
104
security interest in all or any portion of its rights under this Agreement
(including the Advances owing to it) and the Notes, if any, issued to it
hereunder in favor of any United States Federal Reserve Bank in accordance with
Regulation A of the Board of Governors of the Federal Reserve System of the
United States (or any successor regulation) and the applicable operating
circular of such Federal Reserve Bank.
SECTION 9.08 CONFIDENTIALITY. Each Lender and the Administrative
Agent (each, a "PARTY") agrees that it will use its best reasonable efforts not
to disclose, without the prior consent of the Borrowers (other than to its, or
its Affiliates, employees, auditors, accountants, counsel or other
representatives, whether existing at the Effective Date or any subsequent time),
any information with respect to the Borrowers or Parent which is furnished
pursuant to this Agreement, provided that any party may disclose any such
information (i) as has become generally available to the public, (ii) as may be
required or appropriate in any report, statement or testimony submitted to any
governmental authority having or claiming to have jurisdiction over such party,
(iii) as may be required or appropriate in response to any summons or subpoena
or in connection with any litigation or regulatory proceeding, (iv) in order to
comply with any law, order, regulation or ruling applicable to such party, or
(v) to any prospective assignee or participant in connection with any
contemplated assignment of any rights or obligations hereunder or any sale of
any participation therein, by such party pursuant to Section 9.07, if such
prospective assignee or participant, as the case may be, executes an agreement
with the Borrowers containing provisions substantially similar to those
contained in this Section 9.08; provided, however, that the Borrowers and Parent
acknowledge that the Administrative Agent has disclosed and may continue to
disclose such information as the Administrative Agent in its sole discretion
determines is appropriate to the Lenders from time to time.
SECTION 9.09 CONSENT TO JURISDICTION.
(a) Each Borrower and Parent hereby irrevocably and
unconditionally submit itself and its property to the non-exclusive jurisdiction
of the Courts of the Province of Alberta in any action or proceeding by the
105
Administrative Agent, the Arranger, any Lender or the holder of any Note in
respect of, but only in respect of, any claims or causes of action arising out
of or relating to this Agreement, the Notes or the other Financing Documents
(such claims and causes of action, collectively, being "PERMITTED CLAIMS"), and
each Borrower and Parent hereby irrevocably agrees that all Permitted Claims may
be heard and determined in Alberta. Each Borrower and Parent hereby irrevocably
and unconditionally waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any aforementioned court in respect of Permitted Claims. Service of the
statement of claim and any other process which may be served by the
Administrative Agent, the Arranger, any Lender or the holder of any Note on the
Borrowers or Parent in any such action or proceeding in any aforementioned court
in respect of Permitted Claims may be made by delivering separate copies of such
process to each Borrower and Parent by courier and by registered mail (return
receipt requested), fees and postage prepaid at the address of each Borrower and
Parent specified pursuant to Section 9.02, to the attention of each of the
Treasurer and the Vice President and General Counsel of Parent, or each of the
General Counsel and Assistant Treasurer in the case of the Borrowers. Each
Borrower and Parent agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
(b) Nothing in this Section 9.09 (i) shall affect the right of the
Arranger, the Borrowers, Parent, any Lender, the holder of any Note or the
Administrative Agent to serve legal process in any other manner permitted by law
or affect any right otherwise existing of the Borrowers, any Lender, the
Arranger, the holder of any Note or the Administrative Agent to bring any action
or proceeding in the courts of other jurisdictions or (ii) shall be deemed to be
a general consent to jurisdiction in any particular court or a general waiver of
any defense or a consent to jurisdiction of the courts expressly referred to in
subsection (a) above in any action or proceeding in respect of any claim or
cause of action other than Permitted Claims.
SECTION 9.10 GOVERNING LAW. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the Province of
Alberta and the federal
106
laws of Canada applicable therein.
SECTION 9.11 EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery to the Administrative Agent of a counterpart executed by a
Lender shall constitute delivery of such counterpart to all of the Lenders.
Delivery of an executed counterpart by facsimile shall be as effective as
delivery of a manually executed original counterpart.
SECTION 9.12 WAIVER OF JURY TRIAL. EACH BORROWER, PARENT, THE
ADMINISTRATIVE AGENT, AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY OF THE NOTES OR ANY OTHER FINANCING DOCUMENT
OR OTHER INSTRUMENT OR DOCUMENT FURNISHED PURSUANT HERETO OR IN CONNECTION
HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 9.13 ENTIRE AGREEMENT, ETC.. This Agreement, together with
any other documents executed in connection herewith, express the entire
understanding of the parties with respect to the transactions contemplated
hereby. Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated, except as provided in Section 9.01.
107
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
BURLINGTON RESOURCES CANADA LTD.
By: /s/ DANIEL D. HAWK
---------------------------
Daniel D. Hawk
Treasurer
CANADIAN HUNTER EXPLORATION LTD.
By: /s/ DANIEL D. HAWK
---------------------------
Daniel D. Hawk
Treasurer
BURLINGTON RESOURCES INC.
By: /s/ DANIEL D. HAWK
---------------------------
Daniel D. Hawk
Vice President and
Treasurer
SIGNATURE PAGE TO
BURLINGTON RESOURCES CANADA LTD.
CANADIAN HUNTER EXPLORATION LTD.
BURLINGTON RESOURCES INC.
CANADIAN CREDIT AGREEMENT
DATED AS OF DECEMBER 5, 2002
NAME OF INSTITUTION: JPMORGAN CHASE BANK, TORONTO BRANCH, AS ADMINISTRATIVE
AGENT
By: /S/ Russell A. Johnson
Name: Russell A. Johnson
Title: Vice President
NAME OF INSTITUTION: JPMORGAN CHASE BANK, TORONTO BRANCH, AS LENDER
By: /S/ Russell A. Johnson
Name: Russell A. Johnson
Title: Vice President
NAME OF INSTITUTION: ABN AMRO BANK N.V., CANADA BRANCH
By: /S/ Lawrence J. Maloney
Name: Lawrence J. Maloney
Title: Senior Vice President
By: /S/ Margot Cordina
Name: Margot Cordina
Title: Vice President
NAME OF INSTITUTION: BANK OF AMERICA, N.A. CANADA BRANCH
By: /S/ Medina Sales de Andrade
Name: Medina Sales de Andrade
Title: Assistant Vice President
NAME OF INSTITUTION: THE BANK OF NEW YORK
By: /S/ Peter W. Keller
Name: Peter W. Keller
Title: Vice President
NAME OF INSTITUTION: THE BANK OF NOVA SCOTIA
By: /S/ Dan W. Lindquist
Name: Dan W. Lindquist
Title: Director
SIGNATURE PAGE TO
BURLINGTON RESOURCES CANADA LTD.
CANADIAN HUNTER EXPLORATION LTD.
BURLINGTON RESOURCES INC.
CANADIAN CREDIT AGREEMENT
DATED AS OF DECEMBER 5, 2002
NAME OF INSTITUTION: THE BANK OF TOKYO-MITSUBISHI, LTD.
By: /S/ John W. McGhee
Name: John McGhee
Title: Vice President and Manager
NAME OF INSTITUTION: BANK ONE, N.A. (MAIN OFFICE CHICAGO)
By: /S/ Thomas Okamoto
Name: Thomas E. Okamoto
Title: Associate Director
NAME OF INSTITUTION: BARCLAYS BANK PLC
By: /S/ Nicholas A. Bell
Name: Nicholas A. Bell
Title: Director, Loan Transaction Management
NAME OF INSTITUTION: BNP PARIBAS
By: /S/ Brian M. Malone
Name: Brian M. Malone
Title: Managing Director
By: /S/ Polly Schott
Name: Polly Schott
Title: Vice President
NAME OF INSTITUTION: CITIBANK, NA, CANADIAN BRANCH
By: /S/ James K.G. Campbell
Name: James K.G. Campbell
Title:
SIGNATURE PAGE TO
BURLINGTON RESOURCES CANADA LTD.
CANADIAN HUNTER EXPLORATION LTD.
BURLINGTON RESOURCES INC.
CANADIAN CREDIT AGREEMENT
DATED AS OF DECEMBER 5, 2002
NAME OF INSTITUTION: CREDIT SUISSE FIRST BOSTON
By: /S/ James P. Morgan
Name: James P. Morgan
Title: Director
By: /S/ Ian W. Nalitt
Name: Ian W. Nalitt
Title: Associate
NAME OF INSTITUTION: FLEET NATIONAL BANK
By: /S/ Allison I. Rossi
Name: Allison I. Rossi
Title: Director
NAME OF INSTITUTION: JPMORGAN CHASE BANK
By: /S/ Russell A. Johnson
Name: Russell A. Johnson
Title: Vice President
NAME OF INSTITUTION: MELLON BANK, N.A. CANADA BRANCH
By: /S/ Wendy B.H. Bocti
Name: Wendy B.H. Bocti
Title: Principal Officer
NAME OF INSTITUTION: MERRILL LYNCH CAPITAL CANADA
By: /S/ Susan Rimmer
Name: Susan Rimmer
Title: Vice President
NAME OF INSTITUTION: MORGAN STANLEY SENIOR FUNDING, INC. CANADIAN DIVISION
By: /S/ Bradley Crompton
Name: Bradley Crompton
Title: Vice President
SIGNATURE PAGE TO
BURLINGTON RESOURCES CANADA LTD.
CANADIAN HUNTER EXPLORATION LTD.
BURLINGTON RESOURCES INC.
CANADIAN CREDIT AGREEMENT
DATED AS OF DECEMBER 5, 2002
NAME OF INSTITUTION: ROYAL BANK OF CANADA
By: /S/ Lorne Gartner
Name: Lorne Gartner
Title: Vice President
NAME OF INSTITUTION: THE ROYAL BANK OF SCOTLAND PLC
By: /S/ Paul McDonagh
Name: Paul McDonagh
Title: Sr. Vice President
NAME OF INSTITUTION: WACHOVIA BANK, NATIONAL ASSOCIATION
By: /S/ Philip Trinder
Name: Philip Trinder
Title: Vice President
NAME OF INSTITUTION: WELLS FARGO BANK TEXAS, N.A.
By: /S/ Paul A. Squires
Name: Paul A. Squires
Title: Vice President
SCHEDULE I
MATERIAL SUBSIDIARIES OF PARENT
Burlington Resources Canada Ltd.
Canadian Hunter Exploration Ltd.
The Louisiana Land and Exploration Company
Burlington Resources Oil & Gas
Company LP
BROG GP Inc.
BROG LP Inc.
Burlington Resources Canada Partnership
110
SCHEDULE II
PRICING GRID
- ------------------------------------------------------------------------------------------------------------------------------------
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V LEVEL VI
- ------------------------------------------------------------------------------------------------------------------------------------
Basis for Pricing If the If the If the If the If the If the Levels
Parent's Parent's Parent's Parent's Parent's I-V do not
senior senior senior senior senior apply.
unsecured unsecured unsecured unsecured unsecured
long term long term long term long term long term
debt is debt is debt is debt is debt is
rated at rated at rated at rated at rated at
least A by least A- least BBB+ least BBB least BBB-
S&P or A2 by S&P or by S&P or by S&P or by S&P or
by Moody's. A3 by Baa1 by Baa2 by Baa3 by
Moody's. Moody's. Moody's. Moody's.
- ------------------------------------------------------------------------------------------------------------------------------------
Facility Fee
Percentage .080% .100% .125% .150% .200% .250%
- ------------------------------------------------------------------------------------------------------------------------------------
Applicable Margin .270% .300% .375% .450% .650% .750%
- ------------------------------------------------------------------------------------------------------------------------------------
The applicable pricing level shall change on the date of any relevant change in
the rating by S&P or Moody's of any public long term senior unsecured debt
securities of the Parent. In the case of split ratings from S&P and Moody's, the
rating to be used to determine the applicable pricing level is the higher of the
two (e.g., A-/Baa1 results in Level II pricing), provided that in the event the
split is more than one full category, the average (or the higher of two
intermediate ratings) shall be used (e.g., A-/Baa2 results in Level III pricing,
as does A-/Baa3). For the avoidance of doubt, the amount to be paid with respect
to any Acceptance Fee shall be determined on the date of the acceptance of the
applicable B/A, and the Acceptance Fee paid on each date shall not be subject to
adjustment based on a subsequent change in the pricing level.
111
SCHEDULE III
Commitments The Initial Lenders
----------- -------------------
Cdn. $35,086,500.00 JP Morgan Chase Bank, Toronto Branch
Cdn. $35,086,500.00 Citibank, NA
Cdn. $35,086,500.00 Fleet National Bank
Cdn. $35,086,500.00 Bank of America, N.A. Canada Branch
Cdn. $35,086,500.00 The Bank of Nova Scotia
Cdn. $28,242,961.71 Bank of Tokyo-Mitusbisi, LTD.
Cdn. $28,242,961.71 Barclays Bank plc
Cdn. $28,242,961.71 BNP Paribas (Canada)
Cdn. $28,242,961.71 The Royal Bank of Scotland(plc)
Cdn. $28,242,961.71 Wachovia Bank, National Association
Cdn. $23,391,000.00 Merrill Lynch Capital Canada Inc.
Cdn. $23,391,000.00 Morgan Stanley Senior Funding, Inc.
Canadian Division
Cdn. $16,707,857.14 ABN Amro Bank, N.V.
Cdn. $16,707,857.14 The Bank of New York
Cdn. $16,707,857.14 Bank One, NA
Cdn. $16,707,857.14 Royal Bank of Canada
Cdn. $16,707,857.14 Wells Fargo Bank Texas, N.A.
Cdn. $10,826,691.43 Credit Suisse First Boston
Cdn. $10,024,714.29 Mellon Bank, N.A.
===================
Cdn. $467,820,000.0
112