EXHIBIT 10.3
CREDIT AGREEMENT
NORTHSTAR ENERGY CORPORATION
AND
DEVON CANADA CORPORATION
AS BORROWERS
AND
RBC CAPITAL MARKETS
AS ARRANGER
AND
ROYAL BANK OF CANADA
AS ADMINISTRATIVE AGENT
AND
CERTAIN FINANCIAL INSTITUTIONS
AS LENDERS
CDN. $140,000,000
JULY 25, 2002
TABLE OF CONTENTS
Page
ARTICLE 1 ADVANCES
1.1 Commitments to Make Advances................................................................... 1
1.2 Requests for New Advances...................................................................... 2
1.3 Continuations and Conversions of Existing Advances............................................. 4
1.4 Repayments..................................................................................... 5
1.5 Interest Rates and Fees........................................................................ 6
1.6 Extension of Maturity Date..................................................................... 8
1.7 Non-Accepting Lender........................................................................... 8
1.8 Use of Proceeds................................................................................ 9
1.9 Residency of Lenders........................................................................... 9
ARTICLE 2 BANKERS' ACCEPTANCES AND LETTERS OF CREDIT
2.1 Creation of Bankers' Acceptances............................................................... 9
2.2 Terms of Acceptance by the Lenders............................................................. 9
2.3 General Procedures for Bankers' Acceptances.................................................... 11
2.4 Execution of Bankers' Acceptances.............................................................. 12
2.5 Letters of Credit.............................................................................. 12
2.6 Reimbursement Obligations...................................................................... 15
2.7 Obligations Absolute re Letters of Credit...................................................... 17
2.8 Direct Letter of Credit Payments............................................................... 18
2.9 Collateral..................................................................................... 19
ARTICLE 3 PAYMENTS TO LENDERS
3.1 General Procedures............................................................................. 20
3.2 Change in Law; Gross Up; Increased Cost and Reduced Return..................................... 21
3.3 Limitation on Types of Loans................................................................... 23
3.4 Illegality..................................................................................... 23
3.5 Treatment of Affected Loans.................................................................... 23
3.6 Compensation................................................................................... 24
3.7 Change of Applicable Lending Office............................................................ 24
3.8 Replacement of Lenders......................................................................... 24
3.9 Other Taxes.................................................................................... 25
3.10 Currency Conversion and Currency Indemnity..................................................... 25
3.11 Evidence of Indebtedness....................................................................... 26
ARTICLE 4 CONDITIONS PRECEDENT TO ADVANCES
4.1 Documents to be Delivered...................................................................... 26
4.2 Additional Conditions Precedent to First Advance............................................... 27
4.3 Additional Conditions Precedent to all Advances................................................ 28
ARTICLE 5 REPRESENTATIONS AND WARRANTIES
5.1 No Default..................................................................................... 28
5.2 Organization and Good Standing................................................................. 28
5.3 Authorization.................................................................................. 28
5.4 No Conflicts or Consents....................................................................... 28
5.5 Enforceable Obligations........................................................................ 29
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5.6 Full Disclosure................................................................................ 29
5.7 Litigation..................................................................................... 30
5.8 Environmental and Other Laws................................................................... 30
5.9 Borrowers' Subsidiaries........................................................................ 30
5.10 Title to Properties; Licenses.................................................................. 30
5.11 Solvency....................................................................................... 31
ARTICLE 6 AFFIRMATIVE COVENANTS OF BORROWERS
6.1 Payment and Performance........................................................................ 31
6.2 Books, Financial Statements and Reports........................................................ 31
6.3 Other Information and Inspections.............................................................. 32
6.4 Notice of Material Events...................................................................... 33
6.5 Maintenance of Properties...................................................................... 33
6.6 Maintenance of Existence and Qualifications.................................................... 34
6.7 Payment of Trade Liabilities, Taxes, etc....................................................... 34
6.8 Insurance...................................................................................... 34
6.9 Performance on Borrowers' Behalf............................................................... 34
6.10 Interest....................................................................................... 34
6.11 Compliance with Law............................................................................ 35
6.12 Environmental Matters.......................................................................... 35
6.13 Bank Accounts; Offset.......................................................................... 35
ARTICLE 7 NEGATIVE COVENANTS OF BORROWERS
7.1 Indebtedness................................................................................... 36
7.2 Limitation on Liens............................................................................ 37
7.3 Limitation on Mergers.......................................................................... 37
7.4 Limitation on Issuance of Securities by Subsidiaries of US Parent;
Ownership of certain Restricted Subsidiaries by US Parent................................... 38
7.5 Transactions with Affiliates................................................................... 38
7.6 Funded Debt to Total Capitalization............................................................ 38
ARTICLE 8 EVENTS OF DEFAULT AND REMEDIES
8.1 Events of Default.............................................................................. 39
8.2 Remedies....................................................................................... 41
ARTICLE 9 AGENT
9.1 Appointment, Powers, and Immunities............................................................ 41
9.2 Reliance by Agent.............................................................................. 42
9.3 Defaults....................................................................................... 43
9.4 Rights as Lender............................................................................... 43
9.5 Indemnification................................................................................ 43
9.6 Non-Reliance on Agent and Other Lenders........................................................ 43
9.7 Administrative Agent in its Individual Capacity................................................ 44
9.8 Sharing of Set-Offs and Other Payments......................................................... 44
9.9 Investments.................................................................................... 44
9.10 Benefit of Article 9........................................................................... 45
9.11 Resignation.................................................................................... 45
ARTICLE 10 MISCELLANEOUS
10.1 Waivers and Amendments; Acknowledgments........................................................ 45
10.2 Survival of Agreements; Cumulative Nature...................................................... 47
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10.3 Notices........................................................................................ 48
10.4 Payment of Expenses; Indemnity................................................................. 48
10.5 Parties in Interest............................................................................ 49
10.6 Assignments and Participations................................................................. 50
10.7 Confidentiality................................................................................ 52
10.8 Governing Law; Submission to Process........................................................... 52
10.9 Waiver of Judgment Interest Act (Alberta)...................................................... 53
10.10 Deemed Reinvestment Not Applicable............................................................. 53
10.11 Limitation on Interest......................................................................... 53
10.12 Termination; Limited Survival.................................................................. 54
10.13 Severability................................................................................... 54
10.14 Counterparts; Fax.............................................................................. 54
10.15 Waiver of Jury Trial, Punitive Damages, etc.................................................... 55
10.16 Defined Terms.................................................................................. 55
10.17 Annex I, Exhibits and Schedules; Additional Definitions........................................ 55
10.18 Amendment of Defined Instruments............................................................... 55
10.19 References and Titles.......................................................................... 56
10.20 Calculations and Determinations................................................................ 56
10.21 Construction of Indemnities and Releases....................................................... 56
10.22 Separate Obligations........................................................................... 56
SCHEDULES AND EXHIBITS:
Annex I - Defined Terms
Annex II - Lenders Schedule
Schedule 1 - Disclosure Schedule
Schedule 2 - Surety Bonds & Letters of Credit
Schedule 3 - Existing Indebtedness and Funding Commitments
Exhibit A - Borrowing Notice
Exhibit B - Continuation/Conversion Notice
Exhibit C - Certificate Accompanying Financial Statements
Exhibit D - Opinion of Counsel for Restricted Persons
Exhibit E - Assignment and Assumption Agreement
Exhibit F - Letter of Credit
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "AGREEMENT") is made as of July 25,
2002, by and among Northstar Energy Corporation, an Alberta corporation, and
Devon Canada Corporation, an Alberta corporation (herein collectively called
"BORROWERS" and individually a "BORROWER"), Royal Bank of Canada, acting through
its Agent's Branch of Account, individually and as administrative agent (herein
called "AGENT"), and the Lenders party to, and as defined under, this Credit
Agreement.
The Borrowers have requested the Lenders to make certain credit
facilities available to the Borrower and the Lenders, subject to the terms and
conditions of this Credit Agreement, have agreed to make such credit facilities
available. Accordingly, in consideration of the credit facilities which may
hereafter be made by Lenders to Borrowers, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Borrowers, Agent and Lenders hereby agree as follows:
ARTICLE 1
ADVANCES
1.1 COMMITMENTS TO MAKE ADVANCES
(a) ADVANCES: Subject to the terms and conditions hereof, each Lender agrees
to extend credit to each Borrower by:
(i) advancing funds to the applicable Borrower specified in a Borrowing
Notice (herein called such Lender's "LOANS";
(ii) by accepting or purchasing drafts of Bankers' Acceptances issued
under this Agreement by the applicable Borrower specified in a
Borrowing Notice (herein called such Lender's "BANKERS'
ACCEPTANCES"); and
(iii) issuing Letters of Credit executed by the Agent as attorney for and
on behalf of the Lender (the "DIRECT LETTERS OF CREDIT") or, in the
circumstances set out in the second sentence of Section 2.5(a),
issued by the Fronting Lender for the account of the Lender (the
"FRONTED LETTERS OF CREDIT"), in each case requested by the
applicable Borrower specified in a Borrowing Notice (the Direct
Letters of Credit and Fronted Letters of Credit are herein
collectively called such Lender's "LETTERS OF CREDIT");
(each Lender's Loans, Bankers' Acceptances and Letters of Credit are
herein collectively called such Lender's "ADVANCES") upon the applicable
Borrower's request from time to time prior to the Maturity Date, provided
that:
(iv) subject to Sections 1.1(b), 2.2, 3.3, 3.4 and 3.5, all Lenders are
requested to make Advances of the same Type in accordance with their
respective Percentage Shares and as part of the same Borrowing;
(v) subject to Section 2.2(f)(i),such Lender's Percentage Share of the
Facility Usage shall never exceed such Lender's Percentage Share of
the Maximum Credit Amount; and
(vi) the aggregate amount of the Facility Usage outstanding shall never
exceed the Maximum Credit Amount.
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The aggregate amount of all Advances in any Borrowing must be an integral
multiple of $1,000,000 in the Applicable Currency (other than in the case
of Letters of Credit) which equals or exceeds $5,000,000 in the Applicable
Currency (other than in the case of Letters of Credit) or must equal the
unadvanced portion of the Maximum Credit Amount. Each Borrower may have no
more than ten Borrowings of US Dollar Eurodollar Loans and Bankers'
Acceptances outstanding at any time. Advances by way of Letters of Credit
shall be in a minimum aggregate amount of $100,000 in the Applicable
Currency.
(b) PRO-RATA TREATMENT OF ADVANCES: Each Advance shall be made available by
each Lender and all repayments and reductions in respect thereof shall be
made and applied in a manner so that the Advances outstanding hereunder to
each Lender will, to the extent possible, thereafter be pro rata in
accordance with such Lender's Percentage Share. The Agent is authorized by
each Borrower and each Lender to determine, in its sole and unfettered
discretion, the portion of each Advance and each Type of Advance to be
made available by each Lender and the application of repayments and
reductions of Advances to give effect to the provisions of this Agreement,
provided that no Lender shall, as a result of any such determination, have
a Percentage Share of the Advances which is in excess of its Percentage
Share of the Maximum Credit Amount.
(c) EXISTING LETTERS OF CREDIT: The Borrowers, the Lenders and the Agent, as
Fronting Lender, agree that the letters of credit described in Schedule 4
hereto shall, on the date this Agreement becomes effective, be deemed to
be outstanding hereunder as Fronted Letters of Credit issued by the Agent,
as Fronting Lender, on the date this Agreement becomes effective at the
request and for the account of the applicable Borrower described in
Schedule 4 hereto with respect to each such letter of credit (such letters
of credit being the "CONTINUED LETTERS OF CREDIT"). The Borrowers agree
that they shall use their reasonable commercial efforts to replace the
Continued Letters of Credit with Direct Letters of Credit as soon as
reasonably possible after this Agreement becomes effective.
1.2 REQUESTS FOR NEW ADVANCES
The applicable Borrower must give to Agent written notice (or
telephonic notice promptly confirmed in writing) of any requested Borrowing of
new Loans, Bankers' Acceptances or Letters of Credit. Each such notice
constitutes a "BORROWING Notice" hereunder and must:
(a) specify:
(i) the aggregate amount of any such Borrowing of new US Base Rate Loans
and the date on which such US Base Rate Loans are to be advanced;
(ii) the aggregate amount of any such Borrowing of Prime Rate Loans and
the date on which such Prime Rate Loans are to be advanced;
(iii) the aggregate amount of any such Borrowing of new US Dollar
Eurodollar Loans, the date on which such US Dollar Eurodollar Loans
are to be advanced (which shall be the first day of the Eurodollar
Interest Period which is to apply thereto), and the length of the
applicable Eurodollar Interest Period;
(iv) the aggregate amount of any such Borrowing by way of Bankers'
Acceptances (subject to Section 2.2(f)), and the date on which such
Bankers' Acceptances are to be accepted and the maturity of such
Bankers' Acceptances; or
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(v) with respect to Letters of Credit, comply with the provisions of
Section 2.5; and
(b) be received by Agent not later than 12:00 noon, Toronto, Ontario time, on:
(i) the Business Day preceding the day on which any such US Base Rate
Loans or Prime Rate Loans are to be made;
(ii) the third Business Day preceding the day on which any such US Dollar
Eurodollar Loans are to be made; or
(iii) the Business Day preceding the day on which any such Bankers'
Acceptances are to be issued, or
(iv) the second Business Day before such Letters of Credit are to be
issued.
Each such written request or confirmation must be made in the form and substance
of the "BORROWING NOTICE" attached hereto as Exhibit A, duly completed. Each
such telephonic request shall be deemed a representation, warranty,
acknowledgment and agreement by the applicable Borrower as to the matters which
are required to be set out in such written confirmation. Upon receipt of any
such Borrowing Notice, Agent shall give each Lender prompt notice of the terms
thereof not later than 5:00 p.m. Toronto, Ontario time on the day it receives
such Borrowing Notice from the applicable Borrower if it receives such Borrowing
Notice by 12:00 noon, Toronto, Ontario time, otherwise on the next Business Day.
Each Borrowing Notice shall be irrevocable and binding on the applicable
Borrower. If all conditions precedent to such new Advances have been met:
(c) each Lender will on the date requested promptly remit to Agent by
1:00 p.m. Toronto, Ontario time its Loans to Agent's Branch of
Account in immediately available funds, and upon receipt of such
funds, unless to its actual knowledge any conditions precedent to
such Loans have been neither met nor waived as provided herein,
Agent shall promptly make such Loans available to the applicable
Borrower; or
(d) each Lender will accept drafts of Bankers' Acceptances on the date
requested in accordance with Sections 2.1, 2.2 and 2.3; or
(e) the Agent, on behalf of the Lenders or, if applicable, the Fronting
Lender, shall execute and issue Letters of Credit on the date
requested in accordance with Section 2.5.
Unless Agent shall have received prompt notice from a Lender that such Lender
will not make available to Agent such Lender's new Advance, Agent may in its
discretion assume that such Lender has made such Advance available to Agent in
accordance with this section and Agent may if it chooses, in reliance upon such
assumption, make such Advance available to the applicable Borrower. If and to
the extent such Lender shall not so make its new Advance available to Agent,
such Lender and the applicable Borrower severally agree to pay or repay to Agent
within three days after demand the amount of such Advance together with interest
thereon, for each day from the date such amount was made available to the
applicable Borrower until the date such amount is paid or repaid to Agent, with
interest at either the Prime Rate, if such Lender is making such payment and the
interest rate applicable at the time to the other new Advances made on such
date, if a Borrower is making such repayment, provided that Agent gave notice of
the terms of the Borrowing Notice to such Lender in accordance with the terms of
this Section 1.2. If neither such Lender nor such Borrower pays or repays to
Agent such amount within such three-day period, Agent shall in addition to such
amount be entitled to recover from such Lender and from the applicable Borrower,
on demand, interest on such Advance at the Default Rate applicable thereto,
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calculated from the date such amount was made available to such Borrower. The
failure of any Lender to make any new Advance to be made by it hereunder shall
not relieve any other Lender of its obligation hereunder, if any, to make its
new Advance, but no Lender shall be responsible for the failure of any other
Lender to make any new Advance to be made by such other Lender.
1.3 CONTINUATIONS AND CONVERSIONS OF EXISTING ADVANCES
Subject to the terms of Section 2.3 with respect to Bankers'
Acceptances, the applicable Borrower may make the following elections with
respect to Advances already outstanding under this Agreement:
(a) to convert any Type of Advance to any other Type of Advance, provided that
any such Conversion of any US Dollar Eurodollar Loan must be made on the
last day of the Eurodollar Interest Period applicable thereto and any such
Conversion of a Bankers' Acceptance must be made on the date of maturity
thereof;
(b) to continue US Dollar Eurodollar Loans beyond the expiration of such
Eurodollar Interest Period by designating a new Eurodollar Interest Period
to take effect at the time of such expiration, and to rollover any
existing Bankers' Acceptance by designating the new maturity date
applicable thereto; and
(c) a Letter of Credit may not be converted to another Type of Advance except
as a result of a presentation of a Letter of Credit for payment in whole
or in part.
In making such elections, the applicable Borrower may combine existing Advances
made pursuant to separate Borrowings into one new Borrowing or divide existing
Advances made pursuant to one Borrowing into separate new Borrowings, provided
that each Borrower may have no more than ten Borrowings of US Dollar Eurodollar
Loans and Bankers' Acceptances outstanding at any time. To make any such
election, the applicable Borrower must give to Agent written notice (or
telephonic notice promptly confirmed in writing) of any such Conversion or
Continuation of existing Advances, with a separate notice given for each new
Borrowing. Each such notice constitutes a "CONTINUATION/CONVERSION NOTICE"
hereunder and must:
(d) specify the existing Advances made under this Agreement which are to be
continued or converted;
(e) specify:
(i) the aggregate amount of any Borrowing of US Base Rate Loans or Prime
Rate Loans into which such existing Advances are to be continued or
converted and the date on which such Continuation or Conversion is
to occur; or
(ii) the aggregate amount of any Borrowing of US Dollar Eurodollar Loans
into which such existing Advances are to be continued or converted,
the date on which such Continuation or Conversion is to occur (which
shall be the first day of the Eurodollar Interest Period which is to
apply to such US Dollar Eurodollar Loans), and the length of the
applicable Eurodollar Interest Period; or
(iii) the amount of any Borrowing of Bankers' Acceptances into which such
existing Advances are to be continued or converted, the date on
which such Continuation or Conversion is to occur, and the maturity
of such Bankers' Acceptances; and
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(f) be received by Agent not later than 12:00 noon, Toronto, Ontario time, on:
(i) the Business Day preceding the day on which any such Continuation or
Conversion to US Base Rate Loans or Prime Rate Loans is to occur; or
(ii) the third Business Day preceding the day on which any such
Continuation or Conversion to US Dollar Eurodollar Loans is to
occur; or
(iii) the Business Day preceding the day on which any such Continuation or
Conversion to Bankers' Acceptances is to occur.
Each such written request or confirmation must be made in the form
and substance of the "CONTINUATION/CONVERSION NOTICE" attached hereto as Exhibit
B, duly completed. Each such telephonic request shall be deemed a
representation, warranty, acknowledgment and agreement by the applicable
Borrower as to the matters which are required to be set out in such written
confirmation. Upon receipt of any such Continuation/Conversion Notice, Agent
shall give each Lender prompt notice of the terms thereof. Each
Continuation/Conversion Notice shall be irrevocable and binding on the
applicable Borrower. During the continuance of any Default, Borrowers may not
make any election to convert existing Advances made under this Agreement into US
Dollar Eurodollar Loans or Bankers' Acceptances or continue existing US Dollar
Eurodollar Loans made under this Agreement as US Dollar Eurodollar Loans or to
rollover existing Bankers' Acceptances into new Bankers' Acceptances. If (due to
the existence of a Default or for any other reason) the applicable Borrower
fails to timely and properly give or is prevented hereunder from giving any
Continuation/Conversion Notice with respect to a Borrowing of existing US Dollar
Eurodollar Loans at least three Business Days prior to the end of the Eurodollar
Interest Period applicable thereto or the Business Day preceding the maturity
date of the Bankers' Acceptance, such US Dollar Eurodollar Loans and Bankers'
Acceptances shall automatically be converted into US Base Rate Loans (in the
case of US Dollar Eurodollar Loans) or Prime Rate Loans (in the case of Bankers'
Acceptances) at the end of such Eurodollar Interest Period or the maturity of
such Bankers' Acceptances. No new funds shall be repaid by the applicable
Borrower or advanced by any Lender in connection with any Continuation or
Conversion of existing Advances pursuant to this Section 1.3, and no such
Continuation or Conversion shall be deemed to be a new advance of funds for any
purpose; such Continuations and Conversions merely constitute a change in terms
of already outstanding Advances and the interest rate applicable thereto.
1.4 REPAYMENTS
(a) PRIOR TO MATURITY DATE: Subject to the terms and conditions hereof, either
Borrower may borrow, repay, and reborrow Advances hereunder prior to the
Maturity Date, so long as:
(i) the applicable Borrower gives notice to Agent by 2:00 p.m., Toronto,
Ontario time on the Business Day immediately preceding the date of
prepayment (and Agent shall give each Lender notice thereof by 4:30
p.m. Toronto, Ontario time on the date such notice is received from
the applicable Borrower if it receives such Borrowing Notice by
11:00 a.m., Toronto, Ontario time, otherwise on the next Business
Day) and all partial prepayments of principal concurrently paid on
the Loans are increments of $1,000,000 in the Applicable Currency
and in an aggregate amount greater than or equal to $5,000,000 in
the Applicable Currency; and
(ii) the applicable Borrower pays all amounts owing in connection with
the prepayment of any US Dollar Eurodollar Loan owing under Section
3.6.
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(b) FINAL PAYMENT: Subject to extension of the Maturity Date as herein
provided and subject to Section 2.9, the Maximum Credit Amount shall be
reduced to zero on the Maturity Date and all Obligations of the Borrowers
to the Lender Parties shall be paid in full on the Maturity Date.
(c) CURRENCY FLUCTUATIONS: Notwithstanding any other provision of this
Agreement, if any Advance outstanding is denominated in US Dollars, Agent
shall have the right to calculate the outstanding Obligations in Canadian
Dollars for all purposes including making a determination from time to
time of the available undrawn portion of the Maximum Credit Amount. If
following such calculation, Agent determines that the outstanding
Obligations determined in Canadian Dollars are greater than 105% of the
Maximum Credit Amount at such time, then Agent shall so advise Borrowers
and Borrowers shall repay, on the later of five Business Days after such
advice and the next applicable Interest Payment Date immediately following
such date of calculation, an amount sufficient to eliminate the excess
over and above the aggregate amount of the Advances permitted hereby to be
outstanding at such time, together with all accrued interest on the amount
so paid.
1.5 INTEREST RATES AND FEES
(a) INTEREST RATES: The Loans shall bear interest payable by the applicable
Borrower as follows and all accrued and unpaid interest on the Loans shall
be due and payable on the applicable Interest Payment Date:
(i) Each US Base Rate Loan shall bear interest on each day outstanding
at the US Dollar Base Rate in effect on such day.
(ii) Each Prime Rate Loan shall bear interest on each day outstanding at
the Prime Rate in effect on such day.
(iii) Each US Dollar Eurodollar Loan shall bear interest on each day
during the related Eurodollar Interest Period at the related US
Dollar Eurodollar Rate in effect on the first of such Eurodollar
Interest Period plus seventy-five (75) Basis Points.
(iv) All past due principal of and past due interest on the Loans shall
bear interest on each day outstanding at the applicable Default Rate
in effect on such day, and such interest shall be due and payable
daily as it accrues.
(b) STAMPING FEES: In consideration of each Lender's commitment to accept or
participate in Bankers' Acceptances under this Agreement, the applicable
Borrower will pay to Agent for the account of such Lender a stamping fee
computed at the Stamping Fee Rate multiplied by the face amount of each
Bankers' Acceptance accepted by such Lender under this Agreement for the
number of days in the term of such Bankers' Acceptance. Such fee shall be
due and payable on the date on which such Bankers' Acceptances are
accepted and if such Lender is purchasing such Bankers' Acceptance, such
fee shall be deducted from the Discount Proceeds paid to the applicable
Borrower.
(c) LETTER OF CREDIT FEES:
(i) In consideration of each Lender's commitment to issue Direct Letters
of Credit under this Agreement or be liable for its Percentage Share
of Fronted Letters of Credit under this Agreement, including,
without limitation, the Continued Letters of Credit, the applicable
Borrower hereby agrees to pay to the Agent, for the ratable account
of each Lender (in proportion to such Lender's share of the undrawn
and unexpired amounts of all
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outstanding Letters of Credit), a letter of credit fee (the "LC
Fee") computed at the LC Fee Rate multiplied by the average daily
aggregate then undrawn and unexpired amount of the Letters of Credit
outstanding during the period (or any portion thereof) for which
payment is being made issued at the request of such Borrower,
payable quarterly in arrears on the last day of each of September,
December, March and June in each year commencing September 30, 2002
and on the Maturity Date.
(ii) In consideration of the Fronting Lender agreeing to issue Fronted
Letters of Credit under this Agreement, including, without
limitation, the Continued Letters of Credit, the applicable Borrower
hereby agrees to pay to the Agent, for the account of the Fronting
Lender, a fronting fee (the "LC Fronting Fee") computed at the
Fronting Fee Rate multiplied by the average daily aggregate then
undrawn and unexpired amount of the Fronted Letters of Credit issued
by the Fronting Lender outstanding during the period (or any portion
thereof) for which payment is being made issued at the request of
such Borrower, payable quarterly in arrears on the last day of each
of September, December, March and June in each year commencing
September 30, 2002 and on the Maturity Date.
(iii) If all or any portion of the LC Obligations are required to be
collateralized in accordance with Section 2.9, 50% of such LC Fee
and LC Fronting Fee to the extent of such collateralized portion
shall continue to be paid to the applicable Lenders and the Fronting
Lender until such time as the Letter of Credit is presented for
payment, replaced or expires undrawn; provided that upon the
occurrence of any Event of Default and so long as such Event of
Default shall be continuing and shall not have been waived, the LC
Fee Rate and LC Fronting Fee shall be increased to 2.75% per annum
and the LC Fee and LC Fronting Fee shall be payable on demand. The
LC Fee and LC Fronting Fee in respect of each Letter of Credit shall
accrue from the Issuance Date thereof until the expiration or
termination thereof.
(d) COMMITMENT FEES: In consideration of each Lender's commitment to make
Advances under this Agreement, Devon Canada will pay to Agent for the
account of each Lender a commitment fee determined on a daily basis by
applying a rate of twelve and one-half (12.5) Basis Points per annum to
such Lender's Percentage Share of the Maximum Credit Amount less the
Facility Usage on each day during the term of this Agreement. These
commitment fees shall be due and payable in arrears on the last day of
each Fiscal Quarter and on the Maturity Date.
(e) UTILIZATION FEES: In consideration of each Lender's commitment to make
Advances under this Agreement, Devon Canada will pay to Agent for the
account of each Lender a utilization fee determined on a daily basis by
applying a rate of twelve and one-half (12.5) Basis Points per annum to
such Lender's Percentage Share of the Facility Usage (but excluding
therefrom Facility Usage attributable to Prime Rate Loans and US Base Rate
Loans) on each day during the term of this Agreement that the Facility
Usage exceeds twenty-five percent (25.0%) of the Maximum Credit Amount.
This utilization fee shall be due and payable quarterly in arrears on the
last day of each March, June, September and December beginning September
30, 2002 and on the date all Obligations are repaid in full.
(f) AGENT'S FEES: In addition to all other amounts due to Agent under the Loan
Documents, Devon Canada will pay fees to Agent as described in a letter
agreement of even date herewith between Devon Canada and the Agent.
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1.6 EXTENSION OF MATURITY DATE
(a) Borrowers may, at their option and from time to time prior to the Maturity
Date, request an offer to extend the Maturity Date by delivering to Agent
a Request for an Offer of Extension not more than sixty days and not less
than thirty days prior to the then current Maturity Date. Agent shall
forthwith provide a copy of the Request for an Offer of Extension to each
of the Lenders. Upon receipt from Agent of an executed Request for an
Offer of Extension, each Lender shall, within twenty days after the date
of such Lender's receipt of such request from Agent, either:
(i) notify Agent of its acceptance of the Request for an Offer of
Extension, and the terms and conditions, if any, upon which such
Lender is prepared to extend the Maturity Date; or
(ii) notify Agent that the Request for an Offer of Extension has been
denied, such notice to forthwith be forwarded by Agent to Borrowers
to allow Borrowers to seek a replacement lender pursuant to Section
1.7 (any Lender giving notice of such denial is herein called a
"NON-ACCEPTING LENDER"). The failure of a Lender to so notify Agent
within such twenty day period shall be deemed to be notification by
such Lender to Agent that such Lender has denied Borrowers' Request
for an Offer of Extension.
(b) Provided that all Lenders provide notice to Agent under Section 1.6(a)
that they accept the Request for an Offer of Extension, or if there are
Non-Accepting Lenders, such Lenders shall have been repaid pursuant to
Section 1.7 or replacement lenders shall have become parties hereto
pursuant to Section 1.7 and shall have accepted the Request for an Offer
of Extension, such acceptance having common terms and conditions, Agent
shall deliver to Borrowers an Offer of Extension incorporating the said
terms and conditions. Such offer shall be open for acceptance by Borrowers
until the second Business Day immediately preceding the then current
Maturity Date. Upon written notice by Borrowers to Agent accepting an
outstanding Offer of Extension and agreeing to the terms and conditions,
if any, specified therein (the date of such notice of acceptance in
Section 1.6 and 1.7 being called the "EXTENSION DATE"), the Maturity Date
shall be extended to the date 364 days from the Extension Date and the
terms and conditions specified in such Offer of Extension shall be
immediately effective.
(c) Borrowers understand that the consideration of any Request for an Offer of
Extension constitutes an independent credit decision which each Lender
retains the absolute and unfettered discretion to make and that no
commitment in this regard is hereby given by a Lender and that any offer
to extend the Maturity Date may be on such terms and conditions in
addition to those set out herein as the extending Lenders stipulate.
1.7 NON-ACCEPTING LENDER
Provided that Majority Lenders provide notice to Agent under Section
1.6(a) that they accept the Request for an Offer of Extension, on notice of
Borrowers to Agent, Borrowers shall be entitled to choose any of the following
in respect of each Non-Accepting Lender prior to the then current Maturity Date:
(a) the Non-Accepting Lender's obligations to make Advances shall be canceled
as of the Extension Date, the Maximum Credit Amount shall be reduced by
the amount so canceled, and on or prior to the Extension Date, subject to
Section 2.9, the Borrowers shall repay in full all Obligations then
outstanding to the Non-Accepting Lender; or
9
(b) replace the Non-Accepting Lender by reaching satisfactory arrangements
with one or more existing Lenders or new Lenders, for the purchase,
assignment and assumption of all Obligations of the Non-Accepting Lender,
and such Non-Accepting Lender shall be obligated to sell such Obligations
in accordance with such satisfactory arrangements.
In connection with any such replacement of a Lender Party pursuant
to this Section 1.7, the applicable Borrower shall pay all costs that would have
been due to such Lender Party pursuant to Section 3.6 if such Lender Party's
Advances had been prepaid at the time of such replacement.
1.8 USE OF PROCEEDS
Borrowers shall use all Advances made under this Agreement to
finance capital expenditures and to provide working capital for their operations
and for other general business purposes of the Borrowers and Canadian
Subsidiaries of either Borrower or the US Parent.
1.9 RESIDENCY OF LENDERS
Prior to an Event of Default, a Lender must be a Canadian Resident
Lender.
ARTICLE 2
BANKERS' ACCEPTANCES AND LETTERS OF CREDIT
2.1 CREATION OF BANKERS' ACCEPTANCES
Upon receipt of a Borrowing Notice and subject to the provisions of
this Agreement, each Lender shall accept, in accordance with its Percentage
Share of the requested Borrowing from time to time, such Bankers' Acceptances as
Borrowers shall request provided that:
(a) Bankers' Acceptances shall be issued on a Business Day;
(b) each Bankers' Acceptance shall have a term of 30, 60, 90 days or 180 days
(excluding days of grace), as selected by Borrowers in the relevant
Borrowing Notice or such term shorter than 30 days as may be available in
the market; provided that each Bankers' Acceptance shall mature on a
Business Day and that a Bankers' Acceptances may not be requested with a
maturity date which is more than 60 days after the then current Maturity
Date;
(c) the face amount of each Bankers' Acceptance shall be not less than Cdn.
$100,000 and in multiples of Cdn. $100,000 for any amounts in excess
thereof; and
(d) each Bankers' Acceptance shall be in the applicable Lender's standard
form.
2.2 TERMS OF ACCEPTANCE BY THE LENDERS
(a) DELIVERY AND PAYMENT: Subject to Sections 2.3 and 2.4 and only if a valid
appointment pursuant to Section 2.2(e) is not in place, Borrowers shall
pre-sign and deliver to each Lender bankers' acceptance drafts in
sufficient quantity to meet Borrowers' requirements for anticipated
Borrowings by way of Bankers' Acceptances. The applicable Borrower shall,
at its option, provide for payment to Agent for the benefit of Lenders of
each Bankers' Acceptance on the date on which a Bankers' Acceptance
matures, either by payment of the full face amount thereof or through
utilization of a Conversion to another Type of Borrowing in accordance
with this Agreement, or through a combination thereof. Each Borrower
waives presentment for payment
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of Bankers' Acceptances by Lenders and shall not claim from Lenders any
days of grace for the payment at maturity of Bankers' Acceptances. Any
amount owing by Borrowers in respect of any Bankers' Acceptance which is
not paid in accordance with the foregoing, shall, as and from the date on
which such Bankers' Acceptance matures, be deemed to be outstanding
hereunder as a Prime Rate Loan.
(b) NO LIABILITY: Agent and Lenders shall not be liable for any damage, loss
or improper use of any bankers' acceptance draft endorsed in blank except
for any loss arising by reason of Agent or a Lender failing to use the
same standard of care in the custody of such bankers' acceptance drafts as
Agent or such Lender use in the custody of their own property of a similar
nature.
(c) BANKERS' ACCEPTANCES PURCHASED BY LENDERS: Where the applicable Borrower
so elects in the Borrowing Notice or Continuation/Conversion Notice, a
Lender shall purchase Bankers' Acceptances accepted by it for an amount
equal to the Discount Proceeds.
(d) MARKETING: Where the applicable Borrower so elects in the Borrowing Notice
or Continuation/Conversion Notice or fails to elect to have a Lender
purchase Bankers' Acceptances accepted by it pursuant to Section 2.2(c),
the applicable Borrower shall be responsible for, and shall make its own
arrangements with respect to, the marketing of Bankers' Acceptances.
(e) POWER OF ATTORNEY: To facilitate the procedures contemplated in this
Agreement, each Borrower appoints each Lender from time to time as the
attorney-in-fact of such Borrower to execute, endorse and deliver on
behalf of such Borrower drafts or depository bills in the form or forms
prescribed by such Lender for Bankers' Acceptances denominated in Canadian
Dollars. Each Bankers' Acceptance executed and delivered by a Lender on
behalf of a Borrower shall be as binding upon such Borrower as if it had
been executed and delivered by a duly authorized officer of such Borrower.
The foregoing appointment shall cease to be effective, in respect of any
Lender regarding a Borrower, three Business Days following receipt by such
Lender of a written notice from such Borrower revoking such appointment
(which notice shall be copied to the Agent); provided that any such
revocation shall not affect Bankers' Acceptances previously executed and
delivered by such Lender pursuant to such appointment.
(f) ALLOCATION AND INCREASED FEES:
(i) In the event it is not practicable to allocate Bankers' Acceptances
to each Lender such that the aggregate amount of Bankers'
Acceptances required to be purchased by such Lender hereunder is in
a whole multiple of Cdn. $100,000, the Agent is authorized by each
Borrower and each Lender to make such allocation as the Agent
determines in its sole and unfettered discretion may be equitable in
the circumstances and, if the aggregate amount of such Bankers'
Acceptances is not a whole multiple of Cdn. $100,000, then the Agent
may allocate (on a basis considered by it to be equitable) the
excess of such Advance over the next lowest whole multiple of Cdn.
$100,000 to one Lender, which shall purchase a Bankers' Acceptance
with a face amount equal to the excess and having the same term as
the corresponding Bankers' Acceptances. In no event shall the
portion of the outstanding Borrowings by way of Bankers' Acceptances
of a Lender exceed such Lenders' Percentage Share of the aggregate
Borrowings by way of Bankers' Acceptances by more than Cdn. $100,000
as a result of such exercise of discretion by the Agent.
(ii) If during the term of any Bankers' Acceptance accepted by a Lender
hereunder an Event of Default occurs and is continuing, the fee paid
to such Lender by the applicable Borrower pursuant to Section 1.5(d)
with respect to such Bankers' Acceptance shall be
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recalculated based upon the existence of such Event of Default to be
2.75% for the number of days during the term of such Bankers'
Acceptance that such Event of Default exists and the applicable
Borrower shall pay such additional amount to the Agent within two
(2) days of a notice from the Agent to do so.
2.3 GENERAL PROCEDURES FOR BANKERS' ACCEPTANCES
(a) NOTICE: Either Borrower may in the Borrowing Notice or in a
Continuation/Conversion Notice request a Borrowing by way of Bankers'
Acceptances. If the applicable Borrower is responsible for marketing of
such Bankers' Acceptances under Section 2.2(d), it may by subsequent
notice to Agent provide Agent, which shall in turn notify each Lender,
with information as to the discount proceeds payable by the purchasers of
the Bankers' Acceptances and the party to whom delivery of the Bankers'
Acceptances by each Lender is to be made against delivery to each Lender
of the applicable discount proceeds, but if it does not do so, the
applicable Borrower shall initiate a telephone call to Agent by 10:00 a.m.
Toronto, Ontario time on the date of advance, or the date of the
Continuation or Conversion, as applicable, and provide such information to
Agent. Such discount proceeds less the fee calculated in accordance with
Section 1.5(d) shall promptly be delivered to the Agent. Any such
telephone advice shall be subject to Section 1.2 and shall be confirmed by
a written notice of the applicable Borrower to Agent prior to 2:00 p.m.
Toronto, Ontario time on the same day.
(b) CONTINUATIONS: In the case of a Continuation of maturing Bankers'
Acceptances issued by a Lender, such Lender, in order to satisfy the
continuing liability of the applicable Borrower to the Lender for the face
amount of the maturing Bankers' Acceptances issued by such Borrower, shall
retain for its own account the Net Proceeds of each new Bankers'
Acceptance issued by it in connection with such Continuation; and the
applicable Borrower shall, on the maturity date of the maturing Bankers'
Acceptances issued by such Borrower, pay to Agent for the benefit of
Lenders an amount equal to the difference between the face amount of the
maturing Bankers' Acceptances and the aggregate Net Proceeds of the new
Bankers' Acceptances.
(c) CONVERSION FROM PRIME RATE LOANS: In the case of a Conversion from a
Borrowing of Prime Rate Loans into a Borrowing by way of Bankers'
Acceptances to be accepted by a Lender pursuant to Sections 2.1, 2.2 and
2.3, such Lender, in order to satisfy the continuing liability of the
applicable Borrower to it for the principal amount of the Prime Rate Loans
owing by such Borrower being converted, shall retain for its own account
the Discount Proceeds of each new Bankers' Acceptance issued by it in
connection with such Conversion; and the applicable Borrower shall, on the
date of issuance of the Bankers' Acceptances, pay to Agent for the benefit
of Lenders an amount equal to the difference between the aggregate
principal amount of the Prime Rate Loans owing by such Borrower being
converted owing to the Lenders and the aggregate Discount Proceeds of such
Bankers' Acceptances.
(d) CONVERSIONS TO PRIME RATE LOANS: In the case of a Conversion of a
Borrowing by way of Bankers' Acceptances into a Prime Rate Loan, each
Lender, in order to satisfy the liability of the applicable Borrower to it
for the face amount of the maturing Bankers' Acceptances, shall record the
obligation of the applicable Borrower to it as a Prime Rate Loan unless
the applicable Borrower provides for payment to Agent for the benefit of
Lenders of the face amount of the maturing Bankers' Acceptance in some
other manner acceptable to Lenders, including Conversion to another Type
of Revolving Loan pursuant to a Continuation/Conversion Notice.
(e) CONVERSION FROM OR TO LOANS IN US DOLLARS: In the case of a conversion of
Bankers' Acceptances from or to a US Base Rate Loan or US Dollar
Eurodollar Loan, the Borrower and
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the Lender shall follow the notice procedures set out in Section 1.3 and
the funding procedures set out in Section 2.3(c) and 2.3(d) without
netting of funds.
(f) AUTHORIZATION: Borrowers hereby authorize each Lender to complete, stamp,
hold, sell, rediscount or otherwise dispose of all Bankers' Acceptances
accepted by it pursuant to this Section 2.3 in accordance with the
instructions provided by Borrowers pursuant to Section 1.3, as applicable.
(g) DEPOSITORY NOTES: The parties agree that in the administering of Bankers'
Acceptances, each Lender may avail itself of the debt clearing services
offered by a clearing house for depository notes pursuant to the
Depository Bills and Notes Act (Canada) and that the procedures set forth
in Article 2 be deemed amended to the extent necessary to comply with the
requirements of such debt clearing services.
2.4 EXECUTION OF BANKERS' ACCEPTANCES
The signatures of any authorized signatory on Bankers' Acceptances
may, at the option of Borrowers, be reproduced in facsimile and such Bankers'
Acceptances bearing such facsimile signatures shall be binding on Borrowers as
if they had been manually signed by such authorized signatory. Notwithstanding
that any person whose signature appears on any Bankers' Acceptance as a
signatory may no longer be an authorized signatory of Borrowers at the date of
issuance of a Bankers' Acceptance, and notwithstanding that the signature
affixed may be a reproduction only, such signature shall nevertheless be valid
and sufficient for all purposes as if such authority had remained in force at
the time of such issuance and as if such signature had been manually applied,
and any such Bankers' Acceptance so signed shall be binding on Borrowers.
2.5 LETTERS OF CREDIT
(a) ISSUANCE: Subject to the terms and conditions set forth herein, the Agent
shall issue, on behalf of the Lenders, each as to their Percentage Share,
Direct Letters of Credit for the account of a Borrower at the request of
the applicable Borrower submitting an LC Application for the issuance
thereof on any day on or after the Closing Date and before the Maturity
Date. If a Borrower advises the Agent that a proposed beneficiary of a
Direct Letter of Credit is not prepared to accept a Direct Letter of
Credit and has requested a Fronted Letter of Credit, the Agent shall use
its reasonable commercial efforts to act as the Fronting Lender in respect
of such requested Fronted Letter of Credit. If the Agent advises the
Borrowers that it is unable to act a Fronting Lender, the Borrowers may
request that any of the other Lenders act as Fronting Lender, provided
that there shall be no more than one Fronting Lender at any time. If the
Agent or, if applicable another Lender, agrees to issue such Fronted
Letter of Credit, the Fronting Lender shall issue the Fronted Letter of
Credit for the account of such Borrower at the request of such Borrower on
any day before or after the Closing Date and before the Maturity Date. No
Letter of Credit shall be issued on behalf of any Lender or by the
Fronting Lender:
(i) after the Maturity Date; or
(ii) if after giving effect thereto the amount of the Facility Usage
exceeds the Maximum Credit Amount at such time.
Each Direct Letter of Credit shall be substantially in the form of Exhibit
F and each Fronted Letter of Credit shall be substantially in the Fronting
Lender's standard form with modifications thereto consistent with the
applicable provisions of Exhibit F or, in the case of Letters of Credit
13
issued in favour of the Government of Canada or any province or territory
thereof or any agency thereof, in such form as is requested by them and
agreed to by the Agent or the Fronting Lender, as applicable, acting
reasonably, in each case with any such change to such form as (x) the
Agent or, if applicable, the Fronting Lender shall determine in good faith
and on a commercially reasonable basis does not materially increase the
obligations, or diminish the rights, of any Lender relative to such form
or (y) the Required Lenders, acting reasonably, shall approve; provided
that, without the prior consent of each Lender, no Direct Letter of Credit
may be issued that would vary the several and not joint nature of the
obligations of the Lenders thereunder as provided in the next succeeding
sentence. Each Direct Letter of Credit shall be issued by all Lenders as a
single multi-Lender letter of credit, but the obligation of each such
Lender thereunder shall be several and not joint, based upon its
Percentage Share of the Maximum Credit Amount in effect on the Issuance
Date of such Direct Letter of Credit.
(b) The Agent and the Lenders and, if applicable, the Fronting Lender, shall
not be required to issue any Letter of Credit if on the Issuance Date for
such Letter of Credit the Agent determines that any of the following
conditions has not been satisfied:
(i) the Agent shall have received the Borrowing Notice of a Borrower
requesting that a Letter of Credit be issued, such Borrowing Notice
to be accompanied by an originally executed LC Application,
satisfactory to the Agent and, in the case of Fronted Letters of
Credit, the Fronting Lender, specifying:
(A) the proposed Issuance Date (which shall be a Business Day at
least two (2) Business Days following the date of such
request);
(B) the expiry date (which shall not be more than 364 days after
the date of issuance); provided that if a Request for an Offer
of Extension has been provided to the Agent pursuant to
Section 1.6 and the Required Lenders have advised or been
deemed to advise the Agent of a decision not to provide the
Borrowers with an offer to extend the Maturity Date, then the
expiry date may not be later than the Maturity Date;
(C) the name and address of the beneficiary;
(D) the face amount and currency of such Letter of Credit; and
(E) the terms and conditions of the requested Letter of Credit and
other relevant details (provided that no Letter of Credit that
provides for the automatic extension thereof unless notice is
given to the beneficiary thereof shall be issued which
requires that notice of the non-extension of the expiry date
thereof be given more than 30 days or, in the case of Letters
of Credit where the beneficiary is the Government of Canada or
any province or territory thereof or any agency thereof 120
days, prior, in either case, to the scheduled expiry thereof;
and
(ii) the Agent shall have received such other customary administrative
documents as it, any Lender or, if applicable, the Fronting Lender,
through the Agent, shall have reasonably requested as a condition to
the issuance of such Letter of Credit; provided that in the event of
any conflict between the terms of such other documents and this
Agreement, the terms of this Agreement shall prevail.
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(c) Promptly upon its receipt of an LC Application for a Letter of Credit, the
Agent shall notify each Lender and, if applicable, the Fronting Lender,
thereof, which notice shall also specify each Lender's share of the amount
of such Letter of Credit based upon such Lender's Percentage Share. If the
Letter of Credit is issued as a Direct Letter of Credit (or if it is
determined not to issue such Letter of Credit by reason of the failure of
the conditions specified in Section 2.5(b) to be satisfied), the Agent
shall give prompt notice thereof to the applicable Borrower and each
Lender and, if applicable, the Fronting Lender. The Agent may assume that
each of the conditions specified in Section 2.5(b) has been satisfied
unless it is otherwise notified by the applicable Borrower or a Lender or,
if applicable, the Fronting Lender.
(d) Each Direct Letter of Credit shall be executed and delivered by the Agent
in the name and on behalf of, and as attorney-in-fact for, each Lender
party to such Letter of Credit. The Agent shall act under each Direct
Letter of Credit as the agent of each Lender to:
(i) receive drafts, other demands for payment and other documents
presented by the beneficiary under such Direct Letter of Credit;
(ii) determine whether such drafts, demands and documents are in
compliance with the terms and conditions of such Direct Letter of
Credit; and
(iii) notify such Lender and the applicable Borrower that a valid drawing
has been made and the date that the related LC Disbursement is to be
made; provided that the Agent (in such capacity) shall have no
obligation or liability for any LC Disbursement under any Direct
Letter of Credit, and each Direct Letter of Credit shall expressly
so provide.
Each Lender hereby irrevocably appoints and designates the Agent as its
attorney-in-fact, acting through any duly authorized officer of the Agent,
to execute and deliver in the name and on behalf of such Lender each
Direct Letter of Credit to be issued by such Lender hereunder. Promptly
upon the request of the Agent, each Lender will furnish to the Agent such
powers of attorney or other evidence as any beneficiary of any Direct
Letter of Credit may reasonably request in order to demonstrate that the
Agent has the power to act as attorney-in-fact for such Lender to execute
and deliver such Direct Letter of Credit. The applicable Borrower and the
Lender agree that each Direct Letter of Credit shall provide that all
drafts and other documents presented thereunder shall be delivered to the
Agent and that all payments thereunder shall be made by the Lenders
obligated thereon through the Agent at its Agent's Branch of Account. Each
Lender shall be severally liable under each Direct Letter of Credit in
proportion to its Percentage Share on the Issuance Date of such Direct
Letter of Credit and each Direct Letter of Credit shall specify each
Lender's share of the amount payable thereunder.
(e) The Fronting Lender will exercise and give the same care and attention to
each Fronted Letter of Credit issued by it hereunder as it gives to its
other letters of credit and similar obligations, and the Fronting Lender's
sole liability to each Lender shall be to promptly return to the Agent for
the account of the Lenders, each Lender's Percentage Share of any payments
made to the Fronting Lender by the Borrower hereunder where the Borrower
has made a payment to the Fronting Lender hereunder. Each Lender agrees
that, in paying any drawing under a Fronted Letter of Credit, the Fronting
Lender shall not have any responsibility to obtain any document (other
than as expressly required by such Fronted Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such document
or the authority of any person delivering any such document. Neither the
Fronting Lender nor any of its representatives, officers, employees or
agents shall be liable to any Lender for:
15
(i) any action taken or omitted to be taken in connection herewith at
the request or with the approval of the Majority Lenders;
(ii) any action taken or omitted to be taken in connection with any
Fronted Letter of Credit in the absence of gross negligence or
willful misconduct; or
(iii) the execution, effectiveness, genuineness, validity, or
enforceability of any Fronted Letter of Credit, or any other
document contemplated thereby.
The Fronting Lender shall not incur any liability by acting in reliance
upon any notice, consent, certificate, statement or other writing (which
may be a bank wire, telex or similar writing) believed by it to be genuine
or to be signed by the proper party or parties.
(f) The Agent and, if applicable, the Fronting Lender in the case of Fronted
Letters of Credit, shall maintain records showing the undrawn and
unexpired amount of each Letter of Credit outstanding hereunder and each
Lender's share of such amount and showing for each Letter of Credit issued
hereunder:
(i) the Issuance Date and expiration date thereof;
(ii) the amount thereof; and
(iii) the date and amount of all payments made thereunder.
The Agent and, if applicable, the Fronting Lender, shall make copies of
such records available to the Borrowers or any Lender upon its request.
2.6 REIMBURSEMENT OBLIGATIONS
(a) The Borrowers and each Lender agree that each LC Disbursement made by a
Lender under any Direct Letter of Credit requested by a Borrower shall
constitute a Prime Rate Loan in the case of Direct Letters of Credit in
Canadian Dollars and a US Base Rate Loan in the case of Direct Letters of
Credit in US Dollars to the applicable Borrower that requested such Direct
Letter of Credit, even if any condition precedent to the making of such a
Loan shall not have been satisfied, in each case on the date each LC
Disbursement is made by a Lender.
(b) In the event that any LC Disbursement shall be made under any Fronted
Letter of Credit (the date any such LC Disbursement is made being the
"PARTICIPATION DATE"):
(i) the Fronting Lender shall promptly notify the Agent who shall
promptly notify the applicable Borrower of such payment and of the
amount thereof;
(ii) each LC Disbursement shall constitute the making of a Prime Rate
Loan or US Base Rate Loan, as applicable, to the applicable Borrower
by the Fronting Lender on the Participation Date (without limiting
each Lender's obligations hereunder to the Fronting Lender in
respect of any such Loan and notwithstanding the otherwise pro rata
nature of Advances hereunder), even if any condition precedent to
the making of such a Loan shall not have been satisfied;
(iii) the Agent shall notify each Lender by facsimile or by telephone
(confirmed by facsimile) of such disbursement; and
16
(iv) immediately upon receipt of such notice, each Lender shall make its
Percentage Share of such Loan in Cdn. Dollars or US Dollars, as
applicable, available to the Agent for the account of the Fronting
Lender by wire transfer of immediately available funds to the
Agent's Branch of Account for the account of the Fronting Lender.
The Fronting Lender irrevocably grants, and, in order to induce the
Fronting Lender to issue its Fronted Letters of Credit hereunder, each
Lender irrevocably accepts and hereby purchases from the Fronting Lender
on the terms and conditions hereinafter stated, for its own account and
risk, an undivided interest (equal to the Percentage Share of such Lender)
in the Fronting Lender's obligations and rights under each Fronted Letter
of Credit issued by the Fronting Lender pursuant to Section 2.5 and the
amount of each draft paid by the Fronting Lender thereunder and the deemed
Prime Rate Loan or US Base Rate Loan made hereunder to the applicable
Borrower on the Participation Date. Each Lender unconditionally and
irrevocably agrees with the Fronting Lender that, on or before the close
of business of the Fronting Lender on each Participation Date such Lender
will pay to the Agent for the account of the Fronting Lender at the
Agent's Branch of Account the Lender's Percentage Share of any Prime Rate
Loan or US Base Rate Loan deemed to be made to the applicable Borrower by
the Fronting Lender on the Participation Date. The Fronting Lender shall
notify the Agent who shall notify each Lender of the occurrence of a
Participation Date and the amount payable by such Lender to the Agent for
the account of the Fronting Lender based on the Percentage Share of such
Lender. Any such notice may be oral if promptly confirmed in writing
(including facsimile or electronic mail). If any Lender fails to make any
such payment on or prior to the first Business Day after such Lender
receives notice as provided above, then interest shall accrue on such
Lender's obligation to make such payment during the period from such
Business Day to the day such Lender makes such payment at the Default
Rate.
Each Lender acknowledges that its obligations to the Fronting Lender in
respect of any Fronted Letter of Credit, including the obligation to
purchase and fund a participation in the obligations and rights of the
Fronting Lender under each Fronted Letter of Credit and any drafts paid by
it and the deemed Prime Rate Loan or US Base Rate Loan made hereunder by
the Fronting Lender on the Participation Date, are absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including, without limitation:
(i) the occurrence and continuance of any Default;
(ii) any failure or inability of any other Lender to purchase or fund
such a participation hereunder; or
(iii) any other failure by any other Lender to fulfill its obligations
hereunder.
Each payment by a Lender to the Fronting Lender shall be made, without any
offset, compensation, abatement, withholding or reduction whatsoever.
(c) The Borrower shall also pay and reimburse each Lender and, if applicable,
the Fronting Lender, for all taxes and reasonable and customary fees,
charges and other costs and expenses incurred by such Lender or the
Fronting Lender in connection with any LC Disbursement ("LC EXPENSES"), as
notified by such Lender or the Fronting Lender to the Borrower through the
Agent. Each payment in respect of LC Expenses shall be due and payable on
the date on which the Agent notifies the Borrower of the amount of such LC
Expenses and shall accrue interest if not paid on such date at the Default
Rate.
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2.7 OBLIGATIONS ABSOLUTE RE LETTERS OF CREDIT
(a) The obligations of the Borrowers under this Agreement in respect of
Letters of Credit shall be absolute, unconditional and irrevocable under
any and all circumstances and irrespective of any set-off, counterclaim or
defense to payment which any Person may have or have had against the
Agent, any Lender, the Fronting Lender or any beneficiary of a Letter of
Credit.
(b) The Borrowers also agree with the Agent, each Lender and the Fronting
Lender that the obligations of the Borrowers in respect of Letters of
Credit shall not be affected by, among other things:
(i) any lack of validity or enforceability of any Letter of Credit;
(ii) the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged;
(iii) any dispute between or among any Borrower and any beneficiary of any
Letter of Credit or any other party to which such Letter of Credit
may be transferred;
(iv) any claims whatsoever of any Borrower against any beneficiary of
such Letter of Credit or any such transferee;
(v) payment under a Letter of Credit against presentation of a draft or
other document that does not comply strictly with the terms of such
Letter of Credit;
(vi) any lien or security interest granted to, or in favor of, the Agent,
any of the Lenders or the Fronting Lender as security for any of
such Reimbursement Obligations failing to be perfected;
(vii) the existence of any proceedings of the type described in Section
8.1(g) with respect to any Borrower; or
(viii) any other event or circumstance whatsoever, whether or not similar
to any of the foregoing, that might, but for the provisions of this
Section 2.7, constitute a legal or equitable discharge of the
obligations of the Borrowers hereunder or in respect of any Letter
of Credit.
(c) Neither the Agent nor any Lender nor the Fronting Lender shall be liable
for any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in connection
with any Letter of Credit, except, as to any such Person, for errors or
omissions caused by such Person's gross negligence or willful misconduct.
(d) The Borrowers agree that any action taken or omitted by the Agent or any
Lender or, if applicable, the Fronting Lender under or in connection with
any Letter of Credit or the related drafts or documents, if done in the
absence of gross negligence or willful misconduct and in accordance with
the standards of care specified in the Uniform Customs, shall be binding
on the Borrowers and shall not result in any liability of the Agent or any
Lender or, if applicable, the Fronting Lender to the Borrowers.
(e) Without limiting the generality of the foregoing, the parties hereto agree
that:
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(i) the Agent and each Lender and, if applicable, the Fronting Lender
may accept documents that appear on their face to be in substantial
compliance with the terms of a Letter of Credit without
responsibility for further investigation, regardless of any notice
or information to the contrary, and may make payment upon
presentation of documents that appear on their face to be in
substantial compliance with the terms of such Letter of Credit;
(ii) the Agent and, if applicable, the Fronting Lender shall have the
right, in its sole discretion, to decline to accept such documents
and to make such payment if such documents are not in strict
compliance with the terms of such Letter of Credit; and
(iii) this sentence, together with Section 2.8, shall establish the
standard of care to be exercised by the Agent and each Lender and,
if applicable, the Fronting Lender when determining whether drafts
and other documents presented under a Letter of Credit comply with
the terms thereof (and the parties hereto hereby waive, to the
extent permitted by applicable law, any standard of care
inconsistent with the foregoing).
(f) Notwithstanding anything to the contrary contained herein, neither the
Agent nor any Lender nor the Fronting Lender shall be liable to any
Borrower for any consequential, indirect, punitive or exemplary damages
with respect to action taken or omitted to be taken by it under any Letter
of Credit.
2.8 DIRECT LETTER OF CREDIT PAYMENTS
The Borrower and each Lender hereby authorize the Agent to review on
behalf of each Lender each draft and other document presented under each Direct
Letter of Credit. The determination of the Agent as to the conformity of any
documents presented under a Direct Letter of Credit to the requirements of such
Direct Letter of Credit shall, in the absence of the Agent's gross negligence or
willful misconduct, be conclusive and binding on the Borrowers and each Lender.
The Agent shall, within a reasonable time following its receipt thereof, examine
all documents purporting to represent a demand for payment under any Direct
Letter of Credit. The Agent shall promptly after such examination:
(a) notify each of the Lenders obligated under such Direct Letter of Credit
and the applicable Borrower by telephone (confirmed in writing) of such
demand for payment and of each Lender's share of such payment;
(b) deliver to each such Lender a copy of each document purporting to
represent a demand for payment under such Direct Letter of Credit; and
(c) notify each Lender and the applicable Borrower whether said demand for
payment was properly made under such Direct Letter of Credit.
With respect to any drawing determined by the Agent to have been
properly made under a Direct Letter of Credit, each Lender will make an LC
Disbursement in respect of such Direct Letter of Credit in accordance with its
liability under such Direct Letter of Credit and this Agreement, such LC
Disbursement to be made to the Agent's Branch of Account or such other account
of the Agent as shall have been most recently designated by it for such purpose
by notice to such Lenders. The Agent will make any such LC Disbursement
available to the beneficiary of such Direct Letter of Credit by promptly
crediting the amounts so received, in like funds, to the account identified by
such beneficiary in connection with such demand for payment. Promptly following
any LC Disbursement by any Lender in respect of any Direct Letter of Credit, the
Agent will notify the applicable Borrower of such LC
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Disbursement; provided that any failure to give or delay in giving such notice
shall not relieve such Borrower of its obligation to reimburse the Lenders with
respect to any such LC Disbursement. The responsibility of the Agent and the
Lenders in connection with any draft presented for payment under any Direct
Letter of Credit shall, in addition to any payment obligation expressly provided
for in such Direct Letter of Credit, be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are in conformity with such Direct Letter of
Credit. The Agent shall not be required to make any payment under a Direct
Letter of Credit in excess of the amount received by it from the Lenders for
such payment.
2.9 COLLATERAL
(a) If:
(i) the Maturity Date occurs;
(ii) an Event of Default occurs; or
(iii) where in connection with a Request for an Offer of Extension the
Maturity Date is being extended but there are Non-Agreeing Lenders
who are not being replaced and the Maximum Credit Amount is being
reduced,
the applicable Borrower shall at such time either deposit cash in a
collateral account opened by the Agent or provide the Agent with a letter
of credit on terms and conditions and from a financial institution
acceptable to the Agent, in each case, acting reasonably, in either case
in an amount equal to the aggregate of the face amount of all Bankers'
Acceptance issued by such Borrower which are then outstanding and the then
undrawn and unexpired amount of all outstanding Letters of Credit
requested by such Borrower except in the case of (iii) above where the
amount shall be equal to the aggregate of the Bankers' Acceptance issued
by such Borrower and accepted by such Non-Agreeing Lender which are
outstanding and the Non-Agreeing Lender's Percentage Share of the then
undrawn and unexpired amount of all outstanding Letters of Credit
(collectively, such cash and Letters of Credit being the "BA/LC
Collateral"). The Borrower hereby grants to the Agent, for the benefit of
the applicable Lenders and the Fronting Lender, a security interest in
such BA/LC Collateral to secure all Obligations in respect of any such
Bankers' Acceptances and Letters of Credit. The BA/LC Collateral shall be
applied by the Agent to the payment of such Bankers' Acceptances when
presented for payment at maturity and of drafts drawn under such Letters
of Credit. After all such Bankers' Acceptances have matured and been
presented for payment and all such Letters of Credit shall have expired,
been replaced or been fully drawn and all Obligations with respect thereto
shall have been satisfied, all other balances, if any, in such cash
collateral account and any letters of credit shall be returned to the
applicable Borrower. The Borrowers shall execute and deliver to the Agent
from time to time such further documents and instruments as the Agent may
reasonably request with respect to such security interest in such BA/LC
Collateral. Each Borrower further agrees that the Agent shall have all of
the rights and remedies of a secured party under the Personal Property
Security Act (Alberta) with respect to such security interest and that an
Event of Default under this Agreement shall constitute a default for
purposes of such security interest. When either Borrower is required to
provide BA/LC Collateral for any reason and fails to do so on the day when
required, the Agent may without notice to Borrowers or any other
Restricted Person provide such BA/LC Collateral (whether by transfers from
other accounts maintained with the Agent, or otherwise) using any
available funds of the applicable Borrower.
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(b) The BA/LC Collateral shall, until application as herein provided, bear
interest at the rate declared by the Agent from time to time as that
payable in respect of deposits for similar amounts and for similar periods
of time relative to the maturity date of the Bankers' Acceptances and
expiry date of the Letters of Credit and, prior to an Event of Default,
such interest shall accrue for the benefit of and be paid to the
applicable Borrower from time to time.
ARTICLE 3
PAYMENTS TO LENDERS
3.1 GENERAL PROCEDURES
Each Borrower will make each payment which it owes under the Loan
Documents to Agent at the Agent's Branch of Account for the account of the
Lender Party to whom such payment is owed, without set-off, deduction or
counterclaim, and in immediately available funds, provided that any such payment
may be made net of any deduction or withholding for or on account of any
withholding tax which such Borrower is required at Law to withhold or deduct
except as otherwise provided in Sections 3.2(d). Each such payment must be
received by Agent not later than 11:00 a.m., Toronto, Ontario time, on the date
such payment becomes due and payable. Any payment received by Agent after such
time will be deemed to have been made on the next following Business Day. Should
any such payment become due and payable on a day other than a Business Day, the
maturity of such payment shall be extended to the next succeeding Business Day,
and, in the case of a payment of principal or past due interest, interest shall
accrue and be payable thereon for the period of such extension as provided in
the Loan Document under which such payment is due. Each payment under a Loan
Document shall be due and payable at the place provided therein and, if no
specific place of payment is provided, shall be due and payable at the Agent's
Branch of Account. When Agent collects or receives money on account of the
Obligations of a Borrower, Agent shall distribute all money so collected or
received by 2:00 p.m. Toronto, Ontario time on the Business Day received, if
received by 11:00 a.m. Toronto, Ontario time, otherwise on the day of deemed
receipt, and each Lender Party shall apply all such money so distributed, as
follows:
(a) first, for the payment of all Obligations of such Borrower which are then
due (and if such money is insufficient to pay all such Obligations, first
to any reimbursements due Agent under Section 6.9 or 10.4, then to any
reimbursement due any other Lender Party under Section 10.4, and then to
the partial payment of all other Obligations of such Borrower then due in
proportion to the amounts thereof, or as Lender Parties shall otherwise
agree);
(b) then for the prepayment of amounts owing by such Borrower under the Loan
Documents (other than principal) if so specified by such Borrower;
(c) then for the prepayment of principal, together with accrued and unpaid
interest on the principal so prepaid; and
(d) last, for the payment or prepayment of any other Obligations of such
Borrower.
All payments applied to principal or interest shall be applied first to any
interest then due and payable, then to principal then due and payable, and last
to any prepayment of principal and interest in compliance with Section 1.4. All
distributions of amounts described in any of Sections 3.1(b), 3.1(c) or 3.1(d)
shall be made by Agent pro rata to each Lender Party then owed Obligations
described in such sections in proportion to all amounts owed to all Lender
Parties which are described in such sections; provided that if any Lender then
owes payments to Agent under Section 9.8, any amounts otherwise distributable
under this section to such Lender shall be deemed to belong to Agent to the
extent of such unpaid payments, and
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Agent shall apply such amounts to make such unpaid payments rather than
distribute such amounts to such Lender.
3.2 CHANGE IN LAW; GROSS UP; INCREASED COST AND REDUCED RETURN.
(a) If, after the date hereof, the adoption of any applicable Law, rule, or
regulation, or any change in any applicable Law, rule, or regulation, or
any change in the interpretation or administration thereof by any
Governmental Authority, central bank, or comparable agency charged with
the interpretation or administration thereof, or compliance by any Lender
Party (or its Applicable Lending Office) with any request or directive
(whether or not having the force of Law) of any such Governmental
Authority, central bank, or comparable agency (the occurrence of any of
the foregoing events being herein referred to as a "Change in Law"):
(i) shall subject such Lender Party (or its Applicable Lending Office)
to any tax, duty, deduction or any other charge (other than with
respect to Withholding Tax) with respect to any US Dollar Eurodollar
Loans or Bankers' Acceptances, or its obligation to make US Dollar
Eurodollar Loans, accept Bankers' Acceptances or issue Letters of
Credit, or change the basis of taxation of any amounts payable to
such Lender Party (or its Applicable Lending Office) under this
Agreement in respect of any US Dollar Eurodollar Loans or Bankers'
Acceptances other than taxes (including franchise taxes) imposed on
the overall net income or capital of such Lender Party by the
jurisdiction under the Laws of which such Lender Party (or its
Applicable Lending Office) is organized or is a resident for tax
purposes or any political subdivision thereof;
(ii) shall impose, modify, or deem applicable any reserve, special
deposit, assessment, or similar requirement relating to any
extensions of credit or other assets of, or any deposits with or
other liabilities or commitments of, such Lender Party (or its
Applicable Lending Office), including the commitment of such Lender
Party hereunder; or
(iii) shall impose on such Lender Party (or its Applicable Lending Office)
or the London interbank market any other condition affecting this
Agreement or any of such extensions of credit or liabilities or
commitments;
and the result of any of the foregoing is to increase the cost to such
Lender Party (or its Applicable Lending Office) of making, converting
into, continuing, or maintaining any US Dollar Eurodollar Loans or
Bankers' Acceptances or to reduce any sum received or receivable by such
Lender Party (or its Applicable Lending Office) under this Agreement with
respect to any US Dollar Eurodollar Loans or Bankers' Acceptances, then
the applicable Borrower shall pay to such Lender Party on demand such
amount or amounts as will compensate such Lender Party for such increased
cost or reduction. If any Lender Party requests compensation by Borrowers
under this Section 3.2(a), Borrowers may, by notice to such Lender Party
(with a copy to Agent), suspend the obligation of such Lender Party to
make or continue Advances of the Type with respect to which such
compensation is requested, or to convert Advances of any other Type into
Advances of such Type, until the event or condition giving rise to such
request ceases to be in effect (in which case the provisions of Section
3.5 shall be applicable); provided that such suspension shall not affect
the right of such Lender Party to receive the compensation so requested.
(b) If, after the date hereof, any Lender Party shall have determined that the
adoption of any applicable Law, rule, or regulation regarding capital
adequacy or any change therein or in the interpretation or administration
thereof by any Governmental Authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or any request
or
22
directive regarding capital adequacy (whether or not having the force of
Law) of any such Governmental Authority, central bank, or comparable
agency, has or would have the effect of reducing the rate of return on the
capital of such Lender Party or any corporation controlling such Lender
Party as a consequence of the obligations of such Lender Party hereunder
to a level below that which such Lender Party or such corporation could
have achieved but for such adoption, change, request, or directive (taking
into consideration its policies with respect to capital adequacy), then
from time to time upon demand the applicable Borrower shall pay to such
Lender Party such additional amount or amounts as will compensate such
Lender Party for such reduction; provided that if such Lender Party fails
to give notice to Borrowers of any additional costs within ninety (90)
days after it has actual knowledge thereof, such Lender Party shall not be
entitled to compensation for such additional costs incurred more than
ninety (90) days prior to the date on which notice is given by such Lender
Party.
(c) Each Lender Party shall promptly notify Borrowers and Agent of any event
of which it has knowledge, occurring after the date hereof, which will
entitle such Lender Party to compensation pursuant to this Section 3.2 and
will designate a different Applicable Lending Office if such designation
will avoid the need for, or reduce the amount of, such compensation and
will not, in the judgment of such Lender Party, be otherwise
disadvantageous to it. Any Lender Party claiming compensation under this
Section 3.2 shall furnish to Borrowers and Agent a statement setting forth
the additional amount or amounts to be paid to it hereunder which shall be
conclusive in the absence of manifest error. In determining such amount,
such Lender Party shall act in good faith and may use any reasonable
averaging and attribution methods.
(d) If by reason of a Change of Law either Borrower shall be required to
withhold and remit withholding taxes in respect of any principal,
interest, or other amount paid or payable by it to or for the account of
any Lender Party hereunder or under any other Loan Document (a
"Withholding Tax"):
(i) the sum payable by the applicable Borrower shall be increased as
necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section
3.2) such Lender Party receives an amount equal to the sum it would
have received had no such deductions been made;
(ii) the applicable Borrower shall make such deductions; and
(iii) the applicable Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with
applicable Law.
(e) Except as provided in paragraph (d) of this Section 3.2, no Borrower shall
be required to compensate any Lender Party for any Withholding Taxes which
such Borrower is required to withhold and remit in respect of any
principal, interest, or other amount paid or payable by it to or for the
account of any Lender Party hereunder or under any other Loan Document. To
the extent that there are any Withholding Taxes in respect of any such
amounts payable to a particular Lender Party because such Lender Party is
not a Canadian Resident Lender or otherwise (except as provided in
paragraph (d) of this Section 3.2), the applicable Borrower shall be
permitted to deduct such sums from any such amounts payable by it to or
for the account of such particular Lender Party as required by applicable
law and shall remit such Withholding Tax amounts to the applicable
governmental agency as and when required by applicable law.
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3.3 LIMITATION ON TYPES OF LOANS
If on or prior to the first day of any Eurodollar Interest Period
for any US Dollar Eurodollar Loan:
(a) Agent determines (which determination shall be conclusive) that by reason
of circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the US Dollar Eurodollar Rate for such
Eurodollar Interest Period; or
(b) the Required Lenders determine (which determination shall be conclusive)
and notify Agent that the US Dollar Eurodollar Rate will not adequately
and fairly reflect the cost to the Lenders of funding US Dollar Eurodollar
Loans or for such Eurodollar Interest Period;
then Agent shall give Borrowers prompt notice thereof specifying the relevant
amounts or periods, and so long as such condition remains in effect, the Lenders
shall be under no obligation to make additional US Dollar Eurodollar Loans,
continue US Dollar Eurodollar Loans or convert US Base Rate Loans into US Dollar
Eurodollar Loans, and the applicable Borrower shall, on the last day(s) of the
then current Eurodollar Interest Period(s) for the outstanding US Dollar
Eurodollar Loans, either prepay such Loans or convert such Loans into US Base
Rate Loans, Prime Rate Loans or Bankers' Acceptances in accordance with the
terms of this Agreement.
3.4 ILLEGALITY
Notwithstanding any other provision of this Agreement, in the event
that it becomes unlawful for any Lender or its Applicable Lending Office to
make, maintain, or fund US Dollar Eurodollar Loans hereunder, then such Lender
shall promptly notify Borrowers thereof and such Lender's obligation to make or
continue US Dollar Eurodollar Loans and to convert US Base Rate Loans, Prime
Rate Loans or Bankers' Acceptances into US Dollar Eurodollar Loans shall be
suspended until such time as such Lender may again make, maintain, and fund US
Dollar Eurodollar Loans (in which case the provisions of Section 3.5 shall be
applicable).
3.5 TREATMENT OF AFFECTED LOANS
If the obligation of any Lender to make a US Dollar Eurodollar Loan
or to continue, or to convert US Dollar Eurodollar Loans into, Loans of a
particular Type shall be suspended pursuant to Sections 3.2 and 3.4 hereof
(Loans of such Type being herein called "AFFECTED LOANS" and such Type being
herein called the "AFFECTED TYPE"), such Lender's Affected Loans shall be
automatically converted into US Base Rate Loans on the last day(s) of the then
current Eurodollar Interest Period(s) for Affected Loans (or, in the case of a
Conversion required by Section 3.4 hereof, on such earlier date as such Lender
may specify to Borrowers with a copy to Agent) and, unless and until such Lender
gives notice as provided below that the circumstances specified in Sections 3.2
or 3.4 hereof that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Affected Loans have been so converted,
all payments and prepayments of principal that would otherwise be applied
to such Lender's Affected Loans shall be applied instead to its US Base
Rate Loans; and
(b) all Loans that would otherwise be made or continued by such Lender as
Loans of the Affected Type shall be made or continued instead as US Base
Rate Loans applicable, and all Loans of such Lender that would otherwise
be converted into Loans of the Affected Type shall be converted instead
into (or shall remain as) US Base Rate Loans.
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If such Lender gives notice to Borrowers (with a copy to Agent) that the
circumstances specified in Section 3.2 or 3.4 hereof that gave rise to the
Conversion of such Lender's Affected Loans pursuant to this Section 3.5 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Loans of the Affected Type made by other
Lenders are outstanding, such Lender's US Base Rate Loans shall be automatically
converted, on the first day(s) of the next succeeding Eurodollar Interest
Period(s) for such outstanding Loans of the Affected Type, to the extent
necessary so that, after giving effect thereto, all Loans held by the Lenders
holding Loans of the Affected Type and by such Lender are held pro rata (as to
principal amounts, Types, and Eurodollar Interest Periods) in accordance with
their Percentage Shares of the Maximum Credit Amount.
3.6 COMPENSATION
Upon the request of any Lender, the applicable Borrower shall pay to
such Lender such amount or amounts as shall be sufficient (in the reasonable
opinion of such Lender) to compensate it for any loss, cost, or expense
(including loss of anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or Conversion of a Loan by such Borrower (other
than a US Base Rate Loan or a Prime Rate Loan) for any reason, whether
voluntary, mandatory, automatic, by reason of acceleration, or otherwise,
on a date other than the last day of the Eurodollar Interest Period for
such Loan; or
(b) any failure by such Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Article 4
to be satisfied) to borrow, convert, continue, or prepay a Loan by such
Borrower (other than a US Base Rate Loan or a Prime Rate Loan) on the date
for such borrowing, Conversion, Continuation, or prepayment specified in
the relevant notice of borrowing, prepayment, Continuation, or Conversion
under this Agreement.
3.7 CHANGE OF APPLICABLE LENDING OFFICE
Each Lender agrees that, upon the occurrence of any event giving
rise to the operation of Sections 3.2 through 3.5 with respect to such Lender,
it will, if requested by Borrowers, use reasonable efforts (subject to overall
policy considerations of such Lender) to designate another Applicable Lending
Office, provided that such designation is made on such terms that such Lender
and its Applicable Lending Office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event giving
rise to the operation of any such section. Nothing in this Section 3.4 shall
affect or postpone any of the obligations of Borrowers or the rights of any
Lender provided in Sections 3.2 through 3.5.
3.8 REPLACEMENT OF LENDERS
If any Lender seeks reimbursement for increased costs under Sections
3.2 through 3.5 or if a Borrower is required to increase any sum payable under
Section 3.2(d), then within ninety (90) days thereafter and so long as no Event
of Default then exists, Borrowers shall have the right (unless such Lender
withdraws its request for additional compensation) to replace such Lender by
requiring such Lender to assign its Advances and its commitments hereunder to an
Eligible Assignee reasonably acceptable to the Borrowers, provided that: all
Obligations of Borrowers owing to such Lender being replaced (including such
increased costs, but excluding principal and accrued interest on the Obligations
being assigned) shall be paid in full to such Lender concurrently with such
assignment, and the replacement Eligible Assignee shall purchase the foregoing
by paying to such Lender a price equal to the principal amount thereof plus
accrued and unpaid interest thereon and, in the case of Direct Letters of
Credit, making arrangements satisfactory to the Lender with the Eligible
Assignee to deal with the
25
Lender's Obligations in respect of such Direct Letters of Credit. In connection
with any such assignment, Borrowers, Agent, such Lender and the replacement
Eligible Assignee shall otherwise comply with Section 10.6. Notwithstanding the
foregoing rights of Borrowers under this Section 3.8, however, Borrowers may not
replace any Lender which seeks reimbursement for increased costs under Section
3.2, 3.3, 3.4 and 3.5 or to which Borrowers are required to increase any sums
payable under Section 3.2(d), unless Borrowers are at the same time replacing
all Lenders which are then seeking such compensation or to which such sums
payable must be increased. In connection with any such replacement of a Lender,
the applicable Borrower shall pay all costs that would have been due to such
Lender pursuant to Section 3.6 if such Lender's Advances had been prepaid at the
time of such replacement.
3.9 OTHER TAXES
(a) Each Borrower agrees to pay any and all present or future stamp or
documentary taxes and any other excise or property taxes or charges or
similar levies which arise from any payment made by such Borrower under
this Agreement or any other Loan Document or from the execution or
delivery of, or otherwise with respect to, this Agreement or any other
Loan Document (hereinafter referred to as "Other Taxes").
(b) Each Borrower hereby agrees to indemnify each Lender for the full amount
of Other Taxes (including, without limitation, any Other Taxes imposed or
asserted by any jurisdiction on amounts payable by such Borrower under
this Section 3.9) paid by such Lender or Agent (as the case may be) and
any liability (including penalties, interest, and expenses) arising
therefrom or with respect thereto.
(c) If either Borrower is required to pay additional amounts to or for the
account of any Lender pursuant to this Section 3.9, then such Lender will
agree to use reasonable efforts to change the jurisdiction of its
Applicable Lending Office so as to eliminate or reduce any such additional
payment which may thereafter accrue if such change, in the judgment of
such Lender, is not otherwise disadvantageous to such Lender.
(d) If a Lender is reimbursed for an amount paid by either Borrower pursuant
to this Section 3.9, it shall promptly return such amount to such
Borrower.
(e) Within thirty (30) days after the date of any payment of Other Taxes, the
applicable Borrower shall furnish to Agent the original or a certified
copy of a receipt evidencing such payment.
(f) Without prejudice to the survival of any other agreement of Borrowers
hereunder, the agreements and obligations of Borrowers contained in this
Section 3.9 shall survive the termination of this Agreement and the
payment in full of the Obligations.
3.10 CURRENCY CONVERSION AND CURRENCY INDEMNITY
(a) Borrowers shall make payment relative to any Obligation in the currency
(the "Agreed Currency") in which the Obligation was incurred. If any
payment is received on account of any Obligation in any currency (the
"OTHER CURRENCY") other than the Agreed Currency (whether voluntarily,
pursuant to any Conversion of an Advance or pursuant to an order or
judgment or the enforcement thereof or the realization of any security or
the liquidation of such Borrower or otherwise howsoever), such payment
shall constitute a discharge of the liability of a Borrower hereunder and
under the other Loan Documents in respect of such Obligation only to the
extent of the amount of the Agreed Currency which the relevant Lender is
able to purchase with the
26
amount of the Other Currency received by it on the Business Day next following
such receipt in accordance with its normal procedures and after deducting any
premium and costs of exchange.
(b) If, for the purpose of obtaining or enforcing judgment in any court in any
jurisdiction, it becomes necessary to convert into a particular currency
(the "Judgment Currency") any amount due in the Agreed Currency then the
conversion shall be made on the basis of the rate of exchange prevailing
on the next Business Day following the date such judgment is given and in
any event the applicable Borrower shall be obligated to pay the Lenders
any deficiency in accordance with Section 3.10(c). For the foregoing
purposes "RATE OF EXCHANGE" means the rate at which the relevant Lenders,
as applicable, in accordance with their normal banking procedures are able
on the relevant date to purchase the Agreed Currency with the Judgment
Currency after deducting any premium and costs of exchange.
(c) If any Lender receives any payment or payments on account of the liability
of either Borrower hereunder pursuant to any judgment or order in any
Other Currency, and the amount of the Agreed Currency which the relevant
Lender is able to purchase on the Business Day next following such receipt
with the proceeds of such payment or payments in accordance with its
normal procedures and after deducting any premiums and costs of exchange
is less than the amount of the Agreed Currency due in respect of such
Obligations immediately prior to such judgment or order, then such
Borrower on demand shall, and such Borrower hereby agrees to, indemnify
and save such Lender harmless from and against any loss, cost or expense
arising out of or in connection with such deficiency. The agreement of
indemnity provided for in this Section 3.10(c) shall constitute an
obligation separate and independent from all other obligations contained
in this Agreement, shall give rise to a separate and independent cause of
action, shall apply irrespective of any indulgence granted by the Lenders
or any of them from time to time, and shall continue in full force and
effect notwithstanding any judgment or order for a liquidated sum in
respect of an amount due hereunder or under any judgment or order.
3.11 EVIDENCE OF INDEBTEDNESS
The Agent shall open and maintain on the books of the Agent's Branch
of Account, accounts and records evidencing the Borrowings and other amounts
owing by the Borrowers to the Agent and each Lender under this Agreement. The
Agent shall debit therein the amount of such Borrowings and shall enter therein
each payment of the Borrowings and interest thereon and fees and other amounts
payable pursuant to this Agreement and shall record the Bankers' Acceptances
accepted by each Lender and the Letters of Credit issued by the Fronting Lender
or by the Agent on behalf of each Lender and all other amounts becoming due to
the Agent, each Lender and the Fronting Lender under this Agreement. The
Accounts constitute, in the absence of manifest error, prima facie evidence of
the indebtedness of each Borrower to the Agent, each Lender and the Fronting
Lender pursuant to this Agreement, the date the Agent, each Lender and the
Fronting Lender made each Borrowing available to the applicable Borrower and the
amounts the applicable Borrower has paid from time to time on account of the
Borrowings and interest thereon and fees payable pursuant to this Agreement and
other amounts owing hereunder.
ARTICLE 4
CONDITIONS PRECEDENT TO ADVANCES
4.1 DOCUMENTS TO BE DELIVERED
No Lender has any obligation to make its first Advance, unless Agent
shall have received all of the following, duly executed and delivered and in
form, substance and date satisfactory to Agent:
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(a) This Agreement and any other documents that Lenders are to execute in
connection herewith.
(b) Guarantee of the US Parent.
(c) Certain certificates of Borrowers including:
(i) An "Omnibus Certificate" of the Secretary or Assistant Secretary and
of the Chairman of the Board, President, or Vice President - Finance
of each Borrower, which shall contain the names and signatures of
the officers of such Borrower authorized to execute Loan Documents
and which shall certify to the truth, correctness and completeness
of the following exhibits attached thereto: a copy of resolutions
duly adopted by the Board of Directors of such Borrower and in full
force and effect at the time this Agreement is entered into,
authorizing the execution of this Agreement and the other Loan
Documents delivered or to be delivered in connection herewith and
the consummation of the transactions contemplated herein and
therein, a copy of the charter documents of such Borrower and all
amendments thereto, certified by the appropriate official of its
jurisdiction of organization, and a copy of any bylaws of such
Borrower; and
(ii) A "Compliance Certificate" of the Chairman of the Board or President
and of the Vice President - Finance of each Borrower, of even date
with such Loan or such Letter of Credit, in which such officers
certify to the satisfaction of the conditions set out in subsections
(a) and (b) of Section 4.3.
(d) Certificate (or certificates) of the due formation, valid existence and
good standing of each Borrower in its jurisdiction of organization and, if
different, the Province of Alberta, issued by the appropriate official of
such jurisdiction.
(e) Documents similar to those specified in subsections (c)(i) and (ii) above
with respect to the US Parent.
(f) Favorable opinions of Xxxxxxx Xxxxx LLP, counsel for Restricted Persons
other then the US Parent and Mayer, Brown, Xxxx and Maw, counsel for the
US Parent, in each case, substantially in the form set forth in Exhibit D1
and D2, respectively and a favorable opinion of Burnet, Xxxxxxxxx & Xxxxxx
LLP covering the matters requested by Agent.
(g) The Initial Financial Statements.
4.2 ADDITIONAL CONDITIONS PRECEDENT TO FIRST ADVANCE
No Lender has any obligation to make its first Advance, unless on
the date thereof:
(a) All commitment, facility, agency, legal and other fees required to be paid
or reimbursed to any Lender pursuant to any Loan Documents or any
commitment agreement heretofore entered into shall have been paid.
(b) No event which would reasonably be expected to have a Material Adverse
Effect shall have occurred since the date of the most recent Initial
Financial Statements.
(c) All legal matters relating to the Loan Documents and the consummation of
the transactions contemplated thereby shall be satisfactory to Burnet,
Xxxxxxxxx & Xxxxxx LLP, counsel to Agent.
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4.3 ADDITIONAL CONDITIONS PRECEDENT TO ALL ADVANCES
No Lender has any obligation to make any Advance (including its
first), unless the following conditions precedent have been satisfied:
(a) All representations and warranties made by any Restricted Person in any
Loan Document shall be true on and as of the date of such Advance in all
respects in the case of the First Advance and in all material respects in
the case of all Advances thereafter (except to the extent that the facts
upon which such representations are based have been changed by the
extension of credit hereunder) as if such representations and warranties
had been made as of the date of such Advance.
(b) No Default shall exist at the date of such Advance.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
To confirm each Lender's understanding concerning Restricted Persons
and Restricted Persons' businesses, properties and obligations and to induce
each Lender Party to enter into this Agreement and to extend credit hereunder,
each Borrower represents and warrants to each Lender Party that:
5.1 NO DEFAULT
No event has occurred and is continuing which constitutes a Default.
5.2 ORGANIZATION AND GOOD STANDING
Each Borrower and each of the Material Subsidiaries of Borrowers is
duly organized, validly existing and in good standing under the Laws of its
jurisdiction of organization, having all powers required to carry on its
business and enter into and carry out the transactions contemplated hereby. Each
Borrower and each of the Material Subsidiaries of the Borrowers is duly
qualified, in good standing, and authorized to do business in all other
jurisdictions within Canada wherein the character of the properties owned or
held by it or the nature of the business transacted by it makes such
qualification necessary except where failure to so qualify would not have a
Material Adverse Effect. Each Borrower and each of the Material Subsidiaries of
the Borrowers has taken all actions and procedures customarily taken in order to
enter, for the purpose of conducting business or owning property, each
jurisdiction outside Canada wherein the character of the properties owned or
held by it or the nature of the business transacted by it makes such actions and
procedures desirable except where failure to so qualify would not have a
Material Adverse Effect.
5.3 AUTHORIZATION
Each Borrower has duly taken all action necessary to authorize the
execution and delivery by it of the Loan Documents to which it is a party and to
authorize the consummation of the transactions contemplated thereby and the
performance of its obligations thereunder. Each Borrower is duly authorized to
borrow funds hereunder.
5.4 NO CONFLICTS OR CONSENTS
The execution and delivery by each Borrower and each Subsidiary of a
Borrower that is a Restricted Person of the Loan Documents to which each is a
party, the performance by each of its
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obligations under such Loan Documents, and the consummation of the transactions
contemplated by the various Loan Documents, do not and will not:
(a) conflict with any provision of:
(i) any Law;
(ii) the organizational documents or any unanimous shareholders agreement
of any Restricted Person; or
(iii) any agreement, judgment, license, order or permit applicable to or
binding upon any Restricted Person unless such conflict would not
reasonably be expected to have a Material Adverse Effect; or
(b) result in the acceleration of any Indebtedness owed by any Restricted
Person which would reasonably be expected to have a Material Adverse
Effect; or
(c) result in or require the creation of any Lien upon any assets or
properties of any Restricted Person which would reasonably be expected to
have a Material Adverse Effect, except as expressly contemplated or
permitted in the Loan Documents.
Except as expressly contemplated in the Loan Documents no consent, approval,
authorization or order of, and no notice to or filing with, any Tribunal or
third party is required in connection with the execution, delivery or
performance by any Restricted Person of any Loan Document or to consummate any
transactions contemplated by the Loan Documents, unless failure to obtain such
consent would not reasonably be expected to have a Material Adverse Effect.
5.5 ENFORCEABLE OBLIGATIONS
This Agreement is, and the other Loan Documents when duly executed
and delivered will be, legal, valid and binding obligations of each Restricted
Person which is a party hereto or thereto, enforceable in accordance with their
terms except as such enforcement may be limited by bankruptcy, insolvency or
similar Laws of general application relating to the enforcement of creditors'
rights.
5.6 FULL DISCLOSURE
No certificate, statement or other information delivered herewith or
heretofore by any Borrower or any Subsidiary of a Borrower that is a Restricted
Person to any Lender in connection with the negotiation of this Agreement or in
connection with any transaction contemplated hereby contains any untrue
statement of a material fact or omits to state any material fact known to any
such Person (other than industry-wide risks normally associated with the types
of businesses conducted by Restricted Persons) necessary to make the statements
contained herein or therein not misleading as of the date made or deemed made,
provided that all such certificates, statements and other information is to be
viewed in conjunction with the reports, statements, schedules and other
information included in filings (collectively, "Securities Filings") made by the
US Parent, the Borrowers, Xxxxxxxx Energy & Development Corp. or Xxxxxxxx
Exploration Ltd. with the Securities and Exchange Commission or, to the extent
publicly available, analogous Canadian regulatory authorities. There is no fact
known to any such Person (other than industry-wide risks normally associated
with the types of businesses conducted by Restricted Persons) that has not been
disclosed to each Lender in writing or in one or more Securities Filings which
would reasonably be expected to have a Material Adverse Effect.
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5.7 LITIGATION
Except as disclosed in the Initial Financial Statements, in the
financial statements delivered to each Lender pursuant to Section 6.2, in the
Disclosure Schedule or in a Disclosure Report, there are no actions, suits or
legal, equitable, arbitrative or administrative proceedings pending, or to the
knowledge of any Borrower threatened, against any Borrower or any Subsidiary of
a Borrower that is a Restricted Person before any Tribunal which would
reasonably be expected to have a Material Adverse Effect, and there are no
outstanding judgments, injunctions, writs, rulings or orders by any such
Tribunal against any such Person which would reasonably be expected to have a
Material Adverse Effect.
5.8 ENVIRONMENTAL AND OTHER LAWS
Except as disclosed in the Disclosure Schedule:
(a) Borrowers and each Subsidiary of a Borrower that is a Restricted Person
are conducting their businesses in material compliance with all applicable
Laws, including Environmental Laws, and have and are in compliance with
all licenses and permits required under any such Laws, unless failure to
so comply would not reasonably be expected to have a Material Adverse
Effect;
(b) none of the operations or properties of any Borrowers and each Subsidiary
of a Borrower that is a Restricted Person is the subject of federal,
provincial or local investigation evaluating whether any material remedial
action is needed to respond to a release of any Hazardous Materials into
the environment or to the improper storage or disposal (including storage
or disposal at offsite locations) of any Hazardous Materials, unless such
remedial action would not reasonably be expected to have a Material
Adverse Effect; and
(c) neither any Borrower nor any Subsidiary of a Borrower that is a Restricted
Person (and to the best knowledge of Borrowers, no other Person) has filed
any notice under any Law indicating that any such Person is responsible
for the improper release into the environment, or the improper storage or
disposal, of any material amount of any Hazardous Materials or that any
Hazardous Materials have been improperly released, or are improperly
stored or disposed of, upon any property of any such Person, unless such
failure to so comply would not reasonably be expected to have a Material
Adverse Effect.
5.9 BORROWERS' SUBSIDIARIES
Neither Borrower presently has any Material Subsidiary except those
listed in the Disclosure Schedule or in a Disclosure Report (it being understood
that inclusion of a Subsidiary on the Disclosure Schedule does not mean that
such Subsidiary is a Material Subsidiary). Each Borrower owns, directly or
indirectly, the equity interest in each of its Material Subsidiaries which is
indicated in the Disclosure Schedule or in a Disclosure Report.
5.10 TITLE TO PROPERTIES; LICENSES
Each Borrower and each Subsidiary of a Borrower that is a Restricted
Person has good and defensible title to all of its material properties and
assets, free and clear of all Liens other than Permitted Liens and of all
impediments to the use of such properties and assets in such Restricted Person's
business except to the extent failure to have such title would not have a
Material Adverse Effect. Each Borrower and each Subsidiary of a Borrower that is
a Restricted Person possesses all licenses, permits, franchises, patents,
copyrights, trademarks and trade names, and other intellectual property (or
otherwise possesses the right to use such intellectual property) which are
necessary to carry out its business as
31
presently conducted and as presently proposed to be conducted hereafter except
to the extent failure to possess such licenses, permits, franchises, and
intellectual property would not have a Material Adverse Effect, and no such
Restricted Person is in violation in any material respect of the terms under
which it possesses such intellectual property or the right to use such
intellectual property except to the extent any such violation would not have a
Material Adverse Effect.
5.11 SOLVENCY
Upon giving effect to the execution of the Loan Documents by
Borrowers and the consummation of the transactions contemplated hereby, each
Borrower will be solvent (as such term is used in applicable bankruptcy,
liquidation, receivership, insolvency or similar Laws).
ARTICLE 6
AFFIRMATIVE COVENANTS OF BORROWERS
To conform with the terms and conditions under which each Lender is
willing to have credit outstanding to each Borrower, and to induce each Lender
Party to enter into this Agreement and extend credit hereunder, each Borrower
warrants, covenants and agrees that until the full and final payment of the
Obligations and the termination of this Agreement, unless Required Lenders have
previously agreed otherwise:
6.1 PAYMENT AND PERFORMANCE
Each Borrower will pay all amounts due by it under the Loan
Documents in accordance with the terms thereof and will observe, perform and
comply with every covenant, term and condition expressed or implied in the Loan
Documents to be binding upon it. Each Borrower will cause each of its
Subsidiaries which is a Restricted Person to observe, perform and comply with
every such term, covenant and condition in any Loan Document.
6.2 BOOKS, FINANCIAL STATEMENTS AND REPORTS
Each Borrower will at all times maintain full and accurate books of
account and records. Each Borrower will maintain and will cause its Subsidiaries
to maintain a standard system of accounting, will maintain its Fiscal Year, and
will furnish (or will cause to be furnished) the following statements and
reports to each Lender at Borrowers' expense:
(a) As soon as available, and in any event within ninety (90) days after the
end of each Fiscal Year,:
(i) complete Consolidated financial statements of US Parent together
with all notes thereto, prepared in reasonable detail in accordance
with US GAAP, together with an unqualified opinion, based on an
audit using generally accepted auditing standards, by KPMG Peat
Marwick L.L.P., or other independent certified public accountants
selected by US Parent and acceptable to Agent, stating that such
Consolidated financial statements have been so prepared; and
(ii) to the extent such information is not available in the financial
statements referred to in Section 6.2(a)(i) or in the Securities
Filings, segmented financial information in respect of the US
Parent's Canadian operations similar to that currently provided in
the US Parent's consolidated financial statements.
32
These financial statements shall contain a Consolidated balance sheet as
of the end of such Fiscal Year and Consolidated statements of earnings, of
cash flows, and of changes in owners' equity for such Fiscal Year, each
setting forth in comparative form the corresponding figures for the
preceding Fiscal Year. In addition, within ninety (90) days after the end
of each Fiscal Year each Borrower will furnish to Agent and each Lender a
certificate in the form of Exhibit C signed by the President, Senior Vice
President - Finance, Treasurer or Vice President - Accounting of US Parent
and Borrowers, stating that such financial statements are accurate and
complete, stating that such Person has reviewed the Loan Documents,
containing all calculations required to be made to show compliance or
non-compliance with the provisions of Section 7.6, and further stating
that there is no condition or event at the end of such Fiscal Year or at
the time of such certificate which constitutes a Default and specifying
the nature and period of existence of any such condition or event.
(b) As soon as available, and in any event within forty-five (45) days after
the end of each Fiscal Quarter, US Parent's Consolidated and consolidating
balance sheet and income statement as of the end of such Fiscal Quarter
and a Consolidated statement of cash flows for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal
Quarter, all in reasonable detail and prepared in accordance with US GAAP,
subject to changes resulting from normal year-end adjustments together
with segmented financial information in respect of the US Parent's
Canadian operations similar to that currently provided in the US Parent's
consolidated financial statements to the extent such information is not
available in the financial statements referred to in this Section 6.2(b)
or in the Securities Filings. In addition each Borrower will, together
with each such set of financial statements, furnish a certificate in the
form of Exhibit C signed by the President, Senior Vice President -
Finance, Treasurer or Vice President - Accounting of such US Parent
stating that such financial statements are accurate and complete (subject
to normal year-end adjustments), stating that such Person has reviewed the
Loan Documents, containing all calculations required to be made to show
compliance or non-compliance with the provisions of Section 7.6 and
further stating that there is no condition or event at the end of such
Fiscal Quarter or at the time of such certificate which constitutes a
Default and specifying the nature and period of existence of any such
condition or event.
(c) Concurrently with providing the annual and quarterly financial statements
to each Lender pursuant to Section 6.2(a) and (b), the Borrowers will
provide to each Lender a copy of US Parent's Form 10-K and 10-Q, as
applicable, filed with the Securities and Exchange Commission and a list
of all other Securities Filings and, without duplication, all other
financial statements, reports, notices and proxy statements sent by US
Parent or any of its Subsidiaries that is a Restricted Person to its
shareholders and all registration statements, prospectuses, periodic
reports and other statements and schedules filed by any such Person with
any exchange, any securities commission or any similar Governmental
Authority, including any information or estimates with respect to US
Parent's oil and gas business (including its exploration, development and
production activities) which are required to be furnished in such
Borrower's annual report pursuant to securities legislation or the rules,
policies and requirements of any Governmental Authority, in each case
covering all such matters since the most recent list provided to such
Lender. Upon request by a Lender acting reasonably, the Borrowers will
provide a copy of any such materials to such Lender.
6.3 OTHER INFORMATION AND INSPECTIONS
Each Borrower and each Subsidiary of a Borrower that is a Restricted
Person will furnish to each Lender any information which Agent may from time to
time reasonably request concerning any covenant, provision or condition of the
Loan Documents or any matter in connection with such Persons'
33
businesses and operations. Each Borrower and each Subsidiary of a Borrower that
is a Restricted Person will permit representatives appointed by Agent (including
independent accountants, auditors, agents, lawyers, appraisers and any other
Persons) to visit and inspect upon prior written notice during normal business
hours any of such Restricted Person's property, including its books of account,
other books and records, and any facilities or other business assets, and to
make extra copies therefrom and photocopies and photographs thereof, and to
write down and record any information such representatives obtain, and each
Borrower and each Subsidiary of a Borrower that is a Restricted Person shall
permit Agent or its representatives to investigate and verify the accuracy of
the information furnished to Agent or any Lender in connection with the Loan
Documents and to discuss all such matters with its officers, employees and
representatives.
6.4 NOTICE OF MATERIAL EVENTS Borrowers will promptly notify each Lender in
writing, stating that such notice is being given pursuant to this Agreement, of:
(a) the occurrence of any event which would have a Material Adverse
Effect,
(b) the occurrence of any Default,
(c) the acceleration of the maturity of any Indebtedness owed by any of
Borrowers or any of their Subsidiaries that are Restricted Persons having
a principal balance of more than US $150,000,000, or of any default by any
such Person under any indenture, mortgage, agreement, contract or other
instrument to which any of them is a party or by which any of them or any
of their properties is bound, if such default would have a Material
Adverse Effect,
(d) the occurrence of any Termination Event which could reasonably be expected
to cause:
(i) the total amount of withdrawal liability that would be incurred by all
ERISA Affiliates upon their complete withdrawal from all Multiemployer
Plans to exceed US $250,000,000; or
(ii) the aggregate Liabilities of the ERISA Affiliates to ERISA Plans to
exceed US $250,000,000,
(e) any claim of US $250,000,000 or more, any notice of potential
liability under any Environmental Laws which might exceed such
amount, or any other material adverse claim asserted against any of
Borrowers or any of their Subsidiaries that are Restricted Persons
or with respect to any such Person's properties, and
(f) the filing of any suit or proceeding against any Borrowers or any of their
Subsidiaries that are Restricted Person in which an adverse decision would
reasonably be expected to have a Material Adverse Effect.
6.5 MAINTENANCE OF PROPERTIES
Each Borrower and each Subsidiary of a Borrower that is a Restricted
Person will maintain, preserve, protect, and keep all property used or useful in
the conduct of its business in good condition, and will from time to time make
all repairs, renewals and replacements needed to enable the business and
operations carried on in connection therewith to be promptly and advantageously
conducted
34
at all times except to the extent failure to do so would not reasonably be
expected to have a Material Adverse Effect.
6.6 MAINTENANCE OF EXISTENCE AND QUALIFICATIONS
Each Borrower and each Subsidiary of a Borrower that is a Restricted
Person will maintain and preserve its existence and its rights and franchises in
full force and effect and will qualify to do business in all states or
jurisdictions where required by applicable Law, except where the failure so to
qualify will not have a Material Adverse Effect.
6.7 PAYMENT OF TRADE LIABILITIES, TAXES, ETC.
Each Borrower and each Subsidiary of a Borrower that is a Restricted
Person will:
(a) timely file all required tax returns;
(b) timely pay all taxes, assessments, and other governmental charges or
levies imposed upon it or upon its income, profits or property; and
(c) maintain appropriate accruals and reserves for all of the foregoing in
accordance with US GAAP.
Such Restricted Person may, however, delay paying or discharging any of the
foregoing so long as it is in good faith contesting the validity thereof by
appropriate proceedings and has set aside on its books adequate reserves
therefor.
6.8 INSURANCE
Each Borrower and each Subsidiary of a Borrower that is a Restricted
Person will keep or cause to be kept insured in accordance with industry
standards by financially sound and reputable insurers, its surface equipment and
other property of a character usually insured by similar Persons engaged in the
same or similar businesses.
6.9 PERFORMANCE ON BORROWERS' BEHALF
If either Borrower or any Subsidiary of a Borrower that is a
Restricted Person fails to pay any taxes, insurance premiums, expenses, lawyers'
fees or other amounts it is required to pay under any Loan Document, Agent may
pay the same, and shall use its best efforts to give at least five (5) Business
Days notice to Borrowers prior to making any such payment; provided, however,
that any failure by Agent to so notify Borrowers shall not limit or otherwise
impair Agent's ability to make any such payment. Devon Canada shall immediately
reimburse Agent for any such payments and each amount paid by Agent shall
constitute an Obligation owed hereunder which is due and payable on the date
such amount is paid by Agent.
6.10 INTEREST
Each Borrower hereby promises to each Lender to pay interest at the
Default Rate applicable to Prime Rate Loans on all Obligations (including
Obligations to pay fees or to reimburse or indemnify any Lender) which such
Borrower has in this Agreement promised to pay to such Lender and which are not
paid when due. Such interest shall accrue from the date such Obligations become
due until they are paid.
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6.11 COMPLIANCE WITH LAW
Each Borrower and each Subsidiary of a Borrower that is a Restricted
Person will conduct its business and affairs in compliance with all Laws
applicable thereto except to the extent failure to do so would not reasonably be
expected to have a Material Adverse Effect.
6.12 ENVIRONMENTAL MATTERS
(a) Each Borrower and each Subsidiary of a Borrower that is a Restricted
Person will comply in all material respects with all Environmental Laws
now or hereafter applicable to such Restricted Person, as well as all
contractual obligations and agreements with respect to environmental
remediation or other environmental matters, and shall obtain, at or prior
to the time required by applicable Environmental Laws, all environmental,
health and safety permits, licenses and other authorizations necessary for
its operations and will maintain such authorizations in full force and
effect, unless such failure to so comply would not reasonably be expected
to have a Material Adverse Effect.
(b) Each Borrower will promptly furnish to Agent all written notices of
violation, orders, claims, citations, complaints, penalty assessments,
suits or other proceedings received by such Borrower, or of which it has
notice, pending or threatened against such Borrower, by any Governmental
Authority with respect to any alleged violation of or non-compliance with
any Environmental Laws or any permits, licenses or authorizations in
connection with its ownership or use of its properties or the operation of
its business which involve a potential liability or claim in excess of US
$250,000,000.
6.13 BANK ACCOUNTS; OFFSET
Each Borrower hereby agrees that each Lender (including in its
capacity as the Fronting Lender) shall have the right to offset (which shall be
in addition to all other interests, liens, and rights of any Lender at common
Law, under the Loan Documents, or otherwise):
(a) any and all moneys, securities or other property (and the proceeds
therefrom) of such Borrower now or hereafter held or received by or in
transit to any Lender for the account of such Borrower;
(b) any and all deposits (general or special, time or demand, provisional or
final) of such Borrower with any Lender;
(c) any other credits and balances of such Borrower at any time existing
against any Lender, including claims under certificates of deposit; and
(d) any indebtedness owed or payable by any Lender to such Borrower at any
time against Obligations owing by such Borrower due to it that have not
been paid when due. At any time and from time to time after the occurrence
of any Event of Default and during the continuance thereof, each Lender is
hereby authorized to offset against the Obligations then due and payable
to it by such Borrower (in either case without notice to such Borrower),
any and all items hereinabove referred to.
To the extent that any Borrower has accounts designated as royalty or joint
interest owner accounts, the foregoing right of offset shall not extend to funds
in such accounts which belong to, or otherwise arise from payments to such
Borrower for the account of, third party royalty or joint interest owners.
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ARTICLE 7
NEGATIVE COVENANTS OF BORROWERS
To conform with the terms and conditions under which each Lender is
willing to have credit outstanding to each Borrower, and to induce each Lender
Party to enter into this Agreement and make the Loans or issue Letters of
Credit, each Borrower warrants, covenants and agrees that until the full and
final payment of the Obligations and the termination of this Agreement, unless
Required Lenders have previously agreed otherwise:
7.1 INDEBTEDNESS
Neither any Borrower nor any Subsidiary of a Borrower that is a
Restricted Subsidiary will in any manner owe or be liable for Indebtedness
except:
(a) the Obligations.
(b) capital lease obligations (excluding oil, gas or mineral leases) entered
into in the ordinary course of such Restricted Person's business in arm's
length transactions at competitive market rates under competitive terms
and conditions in all respects, provided that such capital lease
obligations required to be paid in any Fiscal Year do not in the aggregate
exceed US $50,000,000 for all Restricted Subsidiaries, whether or not
Subsidiaries of any Borrower.
(c) unsecured Liabilities owed among the Restricted Persons; provided that
Liabilities owed by any Restricted Subsidiary (other than Borrowers) to US
Parent may be secured by any and all assets of such Restricted Subsidiary.
(d) guarantees by one Restricted Person of Liabilities owed by another
Restricted Person, if such Liabilities either:
(i) are not Indebtedness; or
(ii) are allowed under subsections (a), (b) or (c) of this Section 7.1.
(e) Indebtedness of the Restricted Persons for plugging and abandonment bonds
or for letters of credit issued by any Lender in place thereof which are
required by regulatory authorities in the area of operations, and
Indebtedness of the Restricted Persons for other bonds or letters of
credit issued by any Lender which are required by such regulatory
authorities with respect to other normal oil and gas operations.
(f) non-recourse Indebtedness as to which no Restricted Person:
(i) provides any guarantee or credit support of any kind (including any
undertaking, guarantee, indemnity, agreement or instrument that
would constitute Indebtedness); or
(ii) is directly or indirectly liable (as a guarantor or otherwise);
provided, that after giving effect to such Indebtedness outstanding from
time to time, US Parent is not in violation of Section 7.6.
(g) Indebtedness that is subordinated to the Obligations on terms acceptable
to Required Lenders.
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(h) Indebtedness in the approximate amount of Cdn. $1,448,000 owed to Indeck
Gas Supply Corporation by Northstar Energy pursuant to a Gas Sales and
Purchase Agreement dated as of March 9, 1989, as heretofore or hereafter
amended from time to time.
(i) Acquired Debt.
(j) Indebtedness under Hedging Contracts.
(k) Indebtedness relating to the surety bond and letter of credit obligations
(including replacements thereof) listed on Schedule 2 and Indebtedness
relating to the undrawn amount of surety bonds and letters of credit
(exclusive of the surety bonds and letter of credit obligations listed on
Schedule 2 and replacements thereof) incurred in the ordinary course of
business not to exceed 2% of Consolidated Assets at any time.
(l) Indebtedness outstanding on the Closing Date or thereafter incurred
pursuant to funding commitments in existence on the Closing Date and
listed in Schedule 3 hereto, as the same may be amended, supplemented or
modified from time to time or extended, renewed, restructured, refinanced
or replaced, so long as no Restricted Subsidiary increases the aggregate
principal amount thereof for which such Restricted Subsidiary is then or
may thereafter become liable (other than as provided in the Amended and
Restated Credit Agreement referred to in Schedule 3.
(m) miscellaneous items of Indebtedness of all Restricted Persons (other than
US Parent) not described in subsections (a) through (l) which do not in
the aggregate exceed US $400,000,000 in principal amount at any one time
outstanding.
7.2 LIMITATION ON LIENS
Except for Permitted Liens, neither any Borrower nor any Subsidiary
of a Borrower that is a Restricted Person will create, assume or permit to exist
any Lien upon any of the properties or assets which it now owns or hereafter
acquires. Neither any Borrower nor any Subsidiary of a Borrower that is a
Restricted Person will allow the filing or continued existence of any financing
statement describing as collateral any assets or property of such Restricted
Person, other than financing statements which describe only collateral subject
to a Lien permitted under this Section 7.2 and which name as secured party or
lessor only the holder of such Lien.
7.3 LIMITATION ON MERGERS
Neither any Borrower nor any Subsidiary of a Borrower that is a
Restricted Person will merge, amalgamate or consolidate with or into any other
Person except that either Borrower or any Subsidiary of either Borrower which is
a Restricted Person may be merged, amalgamated or consolidated with or into:
(a) either Borrower;
(b) any other Subsidiary of US Parent, so long as the surviving business
entity arising from such merger, amalgamation or consolidation is a
Restricted Person; or
(c) US Parent, so long as US Parent is the continuing business entity.
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7.4 LIMITATION ON ISSUANCE OF SECURITIES BY SUBSIDIARIES OF US PARENT; OWNERSHIP
OF CERTAIN RESTRICTED SUBSIDIARIES BY US PARENT.
(a) Neither any Borrower nor any Subsidiary of a Borrower that is a Restricted
Person will issue any additional shares of its capital stock, additional
partnership interests or other securities or any options, warrants or
other rights to acquire such additional shares, partnership interests or
other securities except to US Parent or another Restricted Person which is
a wholly-owned direct or indirect Subsidiary of US Parent unless:
(i) such securities are being issued to acquire a business, directly or
indirectly through the use of the proceeds of such issuance; and
(ii) such securities are convertible into the common shares or similar
securities of US Parent and/or can be redeemed in cash at the option
of the Restricted Person that issued such securities.
In addition:
(A) Northstar Energy may issue "Exchangeable Shares" (as defined
in the Articles of Amalgamation of Northstar Energy and in
this Section 7.4 called "Exchangeable Shares") upon the terms
specified in the Articles of Amalgamation of Northstar Energy
as in effect on January 1, 2001;
(B) Devon Canada may issue exchangeable shares upon substantially
the same terms as such Exchangeable Shares; and
(C) either Borrower may issue stock options to its employees from
time to time to acquire such Exchangeable Shares, provided
that such options are granted under a stock option plan of
either Borrower and/or US Parent.
(b) US Parent will at all times own, directly or indirectly, 100% of the
outstanding shares of common stock of Northstar Energy and Devon Canada.
7.5 TRANSACTIONS WITH AFFILIATES
Neither any Borrower nor any Subsidiary of a Borrower that is a
Restricted Person will engage in any material transaction with any of its
Affiliates on terms which are less favorable in any material respect to it than
those which would have been obtainable at the time in arm's-length dealing with
Persons other than such Affiliates, provided that such restriction shall not
apply to transactions among such Restricted Persons that are wholly-owned,
directly or indirectly, by US Parent.
7.6 FUNDED DEBT TO TOTAL CAPITALIZATION
The ratio of US Parent's Consolidated Total Funded Debt to US
Parent's Total Capitalization will not exceed:
(a) seventy percent (70%) at the end of the Fiscal Quarter ending June 30,
2002; and
(b) sixty-five percent (65%) at the end of any Fiscal Quarter thereafter.
39
ARTICLE 8
EVENTS OF DEFAULT AND REMEDIES
8.1 EVENTS OF DEFAULT
Each of the following events constitutes an Event of Default under
this Agreement:
(a) Any Restricted Person fails to pay any principal component of any
Obligation when due and payable or fails to pay any other Obligation
including, without limitation, depositing BA/LC Collateral within three
(3) days after the date when due and payable, whether at a date for the
payment of a fixed installment or as a contingent or other payment becomes
due and payable or as a result of acceleration or otherwise;
(b) Any "default" or "event of default" occurs under any Loan Document which
defines either such term, and the same is not remedied within the
applicable period of grace (if any) provided in such Loan Document;
(c) Any Restricted Person fails (other than as referred to in subsections (a)
or (b) above) to:
(i) duly comply with Section 1.8 or Section 7.4(b) of this Agreement; or
(ii) duly observe, perform or comply with any other covenant, agreement,
condition or provision of any Loan Document;
and such failure remains unremedied for a period of thirty (30) days after
notice of such failure is given by Agent to Borrowers;
(d) Any representation or warranty previously, presently or hereafter made in
writing by or on behalf of any Restricted Person in connection with any
Loan Document shall prove to have been false or incorrect in any material
respect on any date on or as of which made; provided, that if such falsity
or lack of correctness is capable of being remedied or cured within a
30-day period, Borrowers shall (subject to the other provisions of this
Section 8.1) have a period of 30 days after written notice thereof has
been given to Borrowers by Agent within which to remedy or cure such lack
of correctness, or this Agreement or the Guarantee executed by the US
Parent is asserted to be or at any time ceases to be valid, binding and
enforceable in any material respect as warranted in Section 5.5 for any
reason other than its release or subordination by Agent;
(e) Any Restricted Person:
(i) fails to duly pay any Indebtedness (including Indebtedness under the
US Agreement) in excess of US $150,000,000 constituting principal or
interest owed by it with respect to borrowed money or money
otherwise owed under any note, bond, or similar instrument; or
(ii) breaches or defaults in the performance of any agreement or
instrument by which any such Indebtedness is issued, evidenced,
governed, or secured, other than a breach or default described in
clause (i) above,
and any such failure, breach or default results in the acceleration of
such Indebtedness; provided that notwithstanding any provision of this
Section 8.1(e) to the contrary, to the extent that the terms of any such
agreement or instrument governing the sale, pledge or disposal of Margin
Stock
40
or utilization of the proceeds of such Indebtedness in connection
therewith would result in such acceleration and in a Default or an Event
of Default under this Agreement, and would cause this Agreement or any
Loan to be subject to the margin requirements or any other restriction
under Reg U, then such acceleration shall not constitute a Default or
Event of Default under this Section 8.1(e);
(f) Any Change of Control occurs;
(g) Any Borrower, US Parent or any other Restricted Person having assets with
a book value of at least US $250,000,000:
(i) suffers the entry against it of a judgment, decree or order for
relief by a Tribunal of competent jurisdiction in an involuntary
proceeding commenced under any applicable bankruptcy, insolvency or
other similar Law of any jurisdiction now or hereafter in effect,
including the Bankruptcy and Insolvency Act (Canada) and the
Companies' Creditors Arrangement Act (Canada), as each are from time
to time amended, or has any such proceeding commenced against it
which remains undismissed for a period of thirty days; or
(ii) commences a voluntary case under any applicable bankruptcy,
insolvency or similar Law now or hereafter in effect, including the
Bankruptcy and Insolvency Act (Canada) and the Companies' Creditors
Arrangement Act (Canada), as each are from time to time amended; or
applies for or consents to the entry of an order for relief in an
involuntary case under any such Law; or makes a general assignment
for the benefit of creditors; or fails generally to pay (or admits
in writing its inability to pay) its debts as such debts become due;
or takes corporate or other action to authorize any of the
foregoing; or
(iii) suffers the appointment of or taking possession by a receiver,
receiver-manager, liquidator, assignee, custodian, trustee,
sequestrator or similar official of all or a substantial part of its
property in a proceeding brought against or initiated by it, and
such appointment or taking possession is neither made ineffective
nor discharged within thirty days after the making thereof, or such
appointment or taking possession is at any time consented to,
requested by, or acquiesced to by it; or
(iv) suffers the entry against it of a final judgment for the payment of
money in an amount that exceeds (x) the valid and collectible
insurance in respect thereof or (y) the amount of an indemnity with
respect thereto reasonably acceptable to the Required Lenders by US
$250,000,000 or more, unless the same is discharged within thirty
days after the date of entry thereof or an appeal or appropriate
proceeding for review thereof is taken within such period and a stay
of execution pending such appeal is obtained; or
(v) suffers a levy of distress or execution or possession, or a writ or
warrant of attachment or any similar process to be issued by any
Tribunal against all or any part of its property having a book value
of at least US $250,000,000, and such writ or warrant of attachment
or any similar process is not stayed or released within thirty days
after the entry or levy thereof or after any stay is vacated or set
aside.
Upon the occurrence of an Event of Default described in Section 8.1(g)(i), (ii)
or (iii) with respect to Borrowers, all of the Obligations shall thereupon be
immediately due and payable, without demand, presentment, notice of demand or of
dishonor and nonpayment, protest, notice of protest, notice of intention to
accelerate, declaration or notice of acceleration, or any other notice or
declaration of any
41
kind, all of which are hereby expressly waived by Borrowers and each Restricted
Person who at any time ratifies or approves this Agreement. Upon any such
acceleration, any obligation of any Lender to make any further Advances shall be
permanently terminated. During the continuance of any other Event of Default,
Agent at any time and from time to time may (and upon written instructions from
Required Lenders, Agent shall), without notice to Borrowers or any other
Restricted Person, do either or both of the following:
(A) terminate any obligation of Lenders and the Fronting Lender to
make Advances hereunder; and
(B) declare any or all of the Obligations immediately due and
payable, and all such Obligations shall thereupon be
immediately due and payable, without demand, presentment,
notice of demand or of dishonor and nonpayment, protest,
notice of protest, notice of intention to accelerate,
declaration or notice of acceleration, or any other notice or
declaration of any kind, all of which are hereby expressly
waived by Borrowers and each Restricted Person who at any time
ratifies or approves this Agreement.
8.2 REMEDIES
If any Event of Default shall occur and be continuing, each Lender
Party, and the Agent for and on behalf of the Lenders, may protect and enforce
its rights under the Loan Documents by any appropriate proceedings, including
proceedings for specific performance of any covenant or agreement contained in
any Loan Document, and each Lender Party, and the Agent for and on behalf of the
Lenders, may enforce the payment of any Obligations due it or enforce any other
legal or equitable right which it may have. All rights, remedies and powers
conferred upon Lender Parties under the Loan Documents shall be deemed
cumulative and not exclusive of any other rights, remedies or powers available
under the Loan Documents or at Law or in equity.
ARTICLE 9
AGENT
9.1 APPOINTMENT, POWERS, AND IMMUNITIES.
(a) Each Lender hereby irrevocably appoints and authorizes Agent to act as its
agent under this Agreement and the other Loan Documents with such powers
and discretion as are specifically delegated to Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as
are reasonably incidental thereto. The Agent-Related Persons:
(i) shall not have any duties or responsibilities except those expressly
set forth in this Agreement and shall not be trustees or fiduciaries
for any Lender;
(ii) shall not be responsible to the Lenders for any recital, statement,
representation, or warranty (whether written or oral) made in or in
connection with any Loan Document or any certificate or other
document referred to or provided for in, or received by any of them
under, any Loan Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Loan Document, or
any other document referred to or provided for therein or for any
failure by any Restricted Person or any other Person to perform any
of its obligations thereunder;
42
(iii) shall not be responsible for or have any duty to ascertain, inquire
into, or verify the performance or observance of any covenants or
agreements by any Restricted Person or the satisfaction of any
condition or to inspect the property (including the books and
records) of any Restricted Person or any of its Subsidiaries or
Affiliates or for the failure of any Restricted Person or Lender to
perform its obligations under any Loan Document;
(iv) shall not be required to initiate or conduct any litigation or
collection proceedings under any Loan Document; and
(v) shall not be responsible to the other Lenders for any action taken
or omitted to be taken by it under or in connection with any Loan
Document, except for its own gross negligence or willful misconduct;
provided, however, that no action taken in accordance with the
directions of the number of Lenders herein specified with respect to
a particular action shall be deemed to constitute gross negligence
or willful misconduct for purposes of this Section 9.1.
Agent may employ agents and attorneys-in-fact and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. Without limiting the generality of
the foregoing sentence, the use of the term "agent" herein and in the
other Loan Documents with reference to Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable Law. Instead, such term is used merely
as a matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties.
9.2 RELIANCE BY AGENT
(a) Agent shall be entitled to rely upon any certification, notice,
instrument, writing, or other communication (including, without
limitation, any thereof by telephone or telecopy) believed by it to be
genuine and correct and to have been signed, sent or made by or on behalf
of the proper Person or Persons, and upon advice and statements of legal
counsel (including counsel for any Restricted Person), independent
accountants, and other experts selected by Agent. Agent may deem and treat
the applicable Lender as the party entitled to payment hereunder for all
purposes hereof unless and until Agent receives and accepts an Assignment
and Assumption executed in accordance with Section 10.6 hereof. Agent
shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with
a request or consent of the Required Lenders, Majority Lenders or all
Lenders, if required hereunder, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all Lenders and
participants. Where this Agreement expressly permits or prohibits an
action unless the Required Lenders, Majority Lenders or all Lenders
otherwise determine, the Agent shall, and in all other instances, the
Agent may, but shall not be required to, initiate any solicitation for the
consent or a vote of the Lenders.
(b) For purposes of determining compliance with the conditions specified in
Section 4.1, each Lender that has signed this Agreement shall be deemed to
have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by Agent to such Lender for consent,
approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender;
provided, however, that Agent shall not be required to take any action
that exposes Agent to personal liability or that is contrary to any Loan
Document or applicable Law or unless it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense
which may be incurred by it by reason of taking any such action.
43
9.3 DEFAULTS
Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default unless Agent has received written
notice from a Lender or Borrowers specifying such Default or Event of Default
and stating that such notice is a "Notice of Default". In the event that Agent
receives such a notice of the occurrence of a Default or Event of Default, Agent
shall give prompt notice thereof to the Lenders. Agent shall (subject to Section
9.1 hereof) take such action with respect to such Default or Event of Default as
shall reasonably be directed by the Required Lenders. Notwithstanding the
foregoing, unless and until Agent shall have received such directions, Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interest of the Lenders.
9.4 RIGHTS AS LENDER
With respect to its Percentage Share of the Maximum Credit Amount
and the Loans made by it, Agent (and any successor acting as Agent) in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
Agent, and the term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include Agent in its individual capacity. Agent (and any successor
acting as Agent) and its Affiliates may (without having to account therefor to
any Lender) accept deposits from, lend money to, make Investments in, provide
services to, and generally engage in any kind of lending, trust, or other
business with any Restricted Person or any of its Subsidiaries or Affiliates as
if it were not acting as Agent, and Agent (and any successor acting as Agent)
and its Affiliates may accept fees and other consideration from any Restricted
Person or any of its Subsidiaries or Affiliates for services in connection with
this Agreement or otherwise without having to account for the same to the
Lenders.
9.5 INDEMNIFICATION
The Lenders agree to indemnify each Agent-Related Person (to the
extent not reimbursed under Section 10.4 hereof, but without limiting the
obligations of Borrowers under such section) ratably in accordance with their
respective Percentage Shares, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses (including legal
fees), or disbursements of any kind and nature whatsoever that may be imposed
on, incurred by or asserted against Agent (including by any Lender) in any way
relating to or arising out of any Loan Document or the transactions contemplated
thereby or any action taken or omitted by Agent under any Loan Document
(including any of the foregoing arising from the negligence of agent); provided
that no Lender shall be liable for any of the foregoing to the extent they arise
from the gross negligence or willful misconduct of the Person to be indemnified,
and provided further that no action taken in accordance with the directions of
the number of Lenders herein specified with respect to a particular action shall
be deemed to constitute gross negligence or willful misconduct for purposes of
this Section 9.5. Without limitation of the foregoing, each Lender agrees to
reimburse Agent promptly upon demand for its ratable share of any costs or
expenses payable by Borrowers under Section 10.4, to the extent that Agent is
not promptly reimbursed for such costs and expenses by Borrowers. The agreements
contained in this Section 9.5 shall survive payment in full of the Loans and all
other amounts payable under this Agreement.
9.6 NON-RELIANCE ON AGENT AND OTHER LENDERS
Each Lender agrees that it has, independently and without reliance
on Agent or any other Lender, and based on such documents and information as it
has deemed appropriate, made its own credit analysis of the Borrowers and their
Subsidiaries and decision to enter into this Agreement and that it will,
independently and without reliance upon Agent or any other Lender, and based on
such documents and
44
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under the Loan Documents.
Except for notices, reports, and other documents and information expressly
required to be furnished to the Lenders by Agent hereunder, Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition, or business of any
Restricted Person or any of its Subsidiaries or Affiliates that may come into
the possession of Agent or any of its Affiliates.
9.7 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY
Royal Bank of Canada and its Affiliates may make loans to, issue
letters of credit for the account of, accept deposits from, acquire equity
interests in and generally engage in any kind of banking, trust, financial
advisory, underwriting or other business with each of the Restricted Persons and
their respective Affiliates as though Royal Bank of Canada were not the Agent
hereunder and without notice to or consent of Lenders. Lenders acknowledge that,
pursuant to such activities, Royal Bank of Canada or its Affiliates may receive
information regarding any Restricted Person or its Affiliates (including
information that may be subject to confidentiality obligations in favor of such
Restricted Person or such Affiliate) and acknowledge that the Agent shall be
under no obligation to provide such information to them. With respect to its
Loans, Royal Bank of Canada shall have the same rights and powers under this
Agreement as any other Lender and may exercise such rights and powers as though
it were not the Agent and the terms "Lender" and "Lenders" include Royal Bank of
Canada in its individual capacity.
9.8 SHARING OF SET-OFFS AND OTHER PAYMENTS
Each Lender agrees that if it shall, whether through the exercise of
rights under Loan Documents or rights of banker's lien, set off, or counterclaim
against Borrowers or otherwise, obtain payment of a portion of the aggregate
Obligations owed to it which, taking into account all distributions made by
Agent under Section 3.1, causes such Lender to have received more than it would
have received had such payment been received by Agent and distributed pursuant
to Section 3.1, then:
(a) it shall be deemed to have simultaneously purchased and shall be obligated
to purchase interests in the Obligations as necessary to cause all Lenders
to share all payments as provided for in Section 3.1; and
(b) such other adjustments shall be made from time to time as shall be
equitable to ensure that Agent and all Lenders share all payments of
Obligations as provided in Section 3.1;
provided, however, that nothing herein contained shall in any way affect the
right of any Lender to obtain payment (whether by exercise of rights of banker's
lien, set-off or counterclaim or otherwise) of indebtedness other than the
Obligations. Borrowers expressly consent to the foregoing arrangements and agree
that any holder of any such interest may to the fullest extent permitted by Law
exercise any and all rights of banker's lien, set-off, or counterclaim as fully
as if such holder were a holder of the Obligations in the amount of such
interest. If all or any part of any funds transferred pursuant to this Section
9.8 is thereafter recovered from the seller under this Section 9.8 which
received the same, the purchase provided for in this Section 9.8 shall be deemed
to have been rescinded to the extent of such recovery, together with interest,
if any, if interest is required pursuant to the order of a Tribunal order to be
paid on account of the possession of such funds prior to such recovery.
9.9 INVESTMENTS
Whenever Agent in good faith determines that it is uncertain about
how to distribute to Lenders any funds which it has received, or whenever Agent
in good faith determines that there is any
45
dispute among Lenders about how such funds should be distributed, Agent may
choose to defer distribution of the funds which are the subject of such
uncertainty or dispute. If Agent in good faith believes that the uncertainty or
dispute will not be promptly resolved, or if Agent is otherwise required to
invest funds pending distribution to Lenders, Agent shall invest such funds
pending distribution; all interest on any such Investment shall be distributed
upon the distribution of such Investment and in the same proportion and to the
same Persons as such Investment. All moneys received by Agent for distribution
to Lenders (other than to the Person who is Agent in its separate capacity as a
Lender) shall be held by Agent pending such distribution solely as Agent for
such Lenders, and Agent shall have no equitable title to any portion thereof.
9.10 BENEFIT OF ARTICLE 9
The provisions of this Article 9 (other than Section 9.11) are
intended solely for the benefit of Lenders, and no Restricted Person shall be
entitled to rely on any such provision or assert any such provision in a claim
or defense against any Lender. Lenders may waive or amend such provisions as
they desire without any notice to or consent of Borrowers or any Restricted
Person.
9.11 RESIGNATION
Agent may resign at any time by giving written notice thereof to
Lenders and Borrowers. Each such notice shall set forth the date of such
resignation. Upon any such resignation, Required Lenders shall have the right to
appoint a successor Agent and if no Default or Event of Default has occurred and
is continuing, Required Lenders shall obtain the consent of Borrowers. A
successor must be appointed for any retiring Agent, and such Agent's resignation
shall become effective when such successor accepts such appointment. If, within
thirty days after the date of the retiring Agent's resignation, no successor
Agent has been appointed and has accepted such appointment, then the retiring
Agent may appoint a successor Agent, which shall be a commercial bank organized
or licensed to conduct a banking or trust business under the Laws of Canada or
of any province thereof and if no Default or Event of Default has occurred and
is continuing, retiring Agent shall obtain the consent of Borrowers. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, the
retiring Agent shall be discharged from its duties and obligations under this
Agreement and the other Loan Documents. After any retiring Agent's resignation
hereunder the provisions of this Article 9 shall continue to inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under the Loan Documents.
ARTICLE 10
MISCELLANEOUS
10.1 WAIVERS AND AMENDMENTS; ACKNOWLEDGMENTS.
(a) WAIVERS AND AMENDMENTS: No failure or delay (whether by course of conduct
or otherwise) by any Lender Party in exercising any right, power or remedy
which such Lender Party may have under any of the Loan Documents shall
operate as a waiver thereof or of any other right, power or remedy, nor
shall any single or partial exercise by any Lender Party of any such
right, power or remedy preclude any other or further exercise thereof or
of any other right, power or remedy. No waiver of any provision of any
Loan Document and no consent to any departure therefrom shall ever be
effective unless it is in writing and signed as provided below in this
Section 10.1, and then such waiver or consent shall be effective only in
the specific instances and for the purposes for which given and to the
extent specified in such writing. No notice to or demand on any Restricted
Person shall in any case of itself entitle any Restricted Person to any
other or further notice or demand in similar or other circumstances. This
Agreement and the other Loan
46
Documents set forth the entire understanding between the parties hereto
with respect to the transactions contemplated herein and therein and
supersede all prior discussions and understandings with respect to the
subject matter hereof and thereof, and no waiver, consent, release,
modification or amendment of or supplement to this Agreement or the other
Loan Documents shall be valid or effective against any party hereto unless
the same is in writing and signed by:
(i) if such party is the Borrowers, by Borrowers;
(ii) if such party is the Agent, by such party;
(iii) if such party is the Fronting Lender, by such party; and
(iv) if such party is a Lender, by such Lender or by the Agent on behalf
of the Lenders with the written consent of Required Lenders (which
consent has already been given as to the termination of the Loan
Documents as provided in Section 10.10).
Notwithstanding the foregoing or anything to the contrary herein, Agent
shall not, without the prior consent of Majority Lenders, execute and
deliver on behalf of such Lender any waiver or amendment which would
increase the Maximum Credit Amount hereunder. Notwithstanding the
foregoing or anything to the contrary herein, Agent shall not, without the
prior consent of each individual Lender, execute and deliver on behalf of
such Lender any waiver or amendment which would:
(A) waive any of the conditions specified in Article 4;
(B) increase the maximum amount which such Lender is committed
hereunder to lend;
(C) reduce any fees payable to such Lender hereunder, or the
principal or interest owing to such Lender;
(D) postpone any date fixed for any payment of any such fees,
principal or interest,
(E) change the aggregate amount of Percentage Shares which is
required for Agent, Lenders or any of them to take any
particular action under the Loan Documents,
(F) release either Borrower or US Parent pursuant to its Guarantee
from its obligation to pay such Lender's Advances; or
(G) amend this Section 10.1(a).
(b) ACKNOWLEDGMENTS AND ADMISSIONS: Each Borrower hereby represents, warrants,
acknowledges and admits that:
(i) it has been advised by counsel in the negotiation, execution and
delivery of the Loan Documents to which it is a party;
(ii) it has made an independent decision to enter into this Agreement and
the other Loan Documents to which it is a party, without reliance on
any representation, warranty, covenant or undertaking by Agent or
any Lender, whether written, oral or implicit, other
47
than as expressly set out in this Agreement or in another Loan
Document delivered on or after the date hereof;
(iii) there are no representations, warranties, covenants, undertakings or
agreements by any Lender as to the Loan Documents except as
expressly set out in this Agreement or in another Loan Document
delivered on or after the date hereof;
(iv) no Lender has any fiduciary obligation toward such Borrower with
respect to any Loan Document or the transactions contemplated
thereby;
(v) the relationship pursuant to the Loan Documents between such
Borrower and the other Restricted Persons, on one hand, and each
Lender, on the other hand, is and shall be solely that of debtor and
creditor, respectively;
(vi) no partnership or joint venture exists with respect to the Loan
Documents between any Restricted Person and any Lender;
(vii) Agent is not such Borrower's Agent, but Agent for Lenders;
(viii) without limiting any of the foregoing, no Borrower is relying upon
any representation or covenant by any Lender, or any representative
thereof, and no such representation or covenant has been made, that
any Lender will, at the time of an Event of Default or Default, or
at any other time, waive, negotiate, discuss, or take or refrain
from taking any action permitted under the Loan Documents with
respect to any such Event of Default or Default or any other
provision of the Loan Documents; and
(ix) all Lender Parties have relied upon the truthfulness of the
acknowledgments in this Section 10.1 in deciding to execute and
deliver this Agreement and to become obligated hereunder.
(c) JOINT ACKNOWLEDGMENT: This written agreement and the other loan documents
represent the final agreement between the parties and may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the parties. There are no unwritten oral agreements between
the parties.
(d) ANNUAL RATES OF INTEREST: For the purposes of the Interest Act (Canada),
whenever interest payable pursuant to this Agreement is calculated on the
basis of a period other than a calendar year (the "Interest Period"), each
rate of interest determined pursuant to such calculation expressed as an
annual rate is equivalent to such rate as so determined multiplied by the
actual number of days in the calendar year in which the same is to be
ascertained and divided by the number of days in the Interest Period.
10.2 SURVIVAL OF AGREEMENTS; CUMULATIVE NATURE
All of Restricted Persons' various representations, warranties,
covenants and agreements in the Loan Documents shall survive the execution and
delivery of this Agreement and the other Loan Documents and the performance
hereof and thereof, including the making or granting of the Loans and the Loan
Documents, and shall further survive until all of the Obligations are paid in
full to each Lender and the Fronting Lender and all of Lenders' and Fronting
Lender's obligations to Borrowers are terminated. All statements and agreements
contained in any certificate or other instrument delivered by any Restricted
Person to any Lender under any Loan Document shall be deemed representations and
48
warranties by each Borrower or agreements and covenants of each Borrower under
this Agreement. The representations, warranties, indemnities, and covenants made
by Restricted Persons in the Loan Documents, and the rights, powers, and
privileges granted to Lenders in the Loan Documents, are cumulative, and, except
for expressly specified waivers and consents, no Loan Document shall be
construed in the context of another to diminish, nullify, or otherwise reduce
the benefit to any Lender of any such representation, warranty, indemnity,
covenant, right, power or privilege. In particular and without limitation, no
exception set out in this Agreement to any representation, warranty, indemnity,
or covenant herein contained shall apply to any similar representation,
warranty, indemnity, or covenant contained in any other Loan Document, and each
such similar representation, warranty, indemnity, or covenant shall be subject
only to those exceptions which are expressly made applicable to it by the terms
of the various Loan Documents.
10.3 NOTICES
All notices, requests, consents, demands and other communications
required or permitted under any Loan Document shall be in writing, unless
otherwise specifically provided in such Loan Document (provided that Agent or,
if applicable, the Fronting Lender, may give telephonic notices to the other
Lenders), and shall be deemed sufficiently given or furnished if delivered by
personal delivery, by facsimile or other electronic transmission, by delivery
service with proof of delivery, or by registered Canadian mail, postage prepaid,
to each Borrower and Restricted Persons at the address of each Borrower
specified on the signature pages hereto and to Agent at its address specified on
the signature pages hereto and to each Lender at the address specified on Annex
II (unless changed by similar notice in writing given by the particular Person
whose address is to be changed). Any such notice or communication shall be
deemed to have been given:
(a) in the case of personal delivery or delivery service, as of the date of
first attempted delivery during normal business hours at the address
provided herein;
(b) in the case of facsimile or other electronic transmission, upon receipt;
or
(c) in the case of registered Canadian mail, five Business Days after deposit
in the mail;
provided, however, that no Borrowing Notice shall become effective until
actually received by Agent.
10.4 PAYMENT OF EXPENSES; INDEMNITY
(a) PAYMENT OF EXPENSES: Whether or not the transactions contemplated by this
Agreement are consummated, Devon Canada will promptly (and in any event,
within 30 days after any invoice or other statement or notice) pay:
(i) all reasonable costs and expenses incurred by or on behalf of Agent
(including without limitation, legal fees) in connection with:
(A) the negotiation, preparation, execution and delivery of the
Loan Documents, and any and all consents, waivers or other
documents or instruments relating thereto;
(B) the borrowings hereunder and other action reasonably required
in the course of administration hereof;
49
(C) monitoring or confirming (or preparation or negotiation of any
document related to) Borrowers' compliance with any covenants
or conditions contained in this Agreement or in any Loan
Document, and
(ii) all reasonable costs and expenses incurred by or on behalf of any
Lender Party (including without limitation, legal fees, consultants'
fees and accounting fees) in connection with the defense or
enforcement of any of the Loan Documents (including this Section
10.4) or the defense of any Lender Party's exercise of its rights
thereunder.
(b) INDEMNITY: Devon Canada agrees to indemnify each Agent-Related Person and
each Lender Party, upon demand, from and against any and all liabilities,
obligations, claims, losses, damages, penalties, fines, actions,
judgments, suits, settlements, costs, expenses or disbursements, excluding
principal and interest owing by Northstar Energy with respect to Advances
made to Northstar Energy, but including reasonable fees of legal counsel,
accountants, experts and advisors) of any kind or nature whatsoever (in
this Section 10.4(b) collectively called "liabilities and costs") which to
any extent (in whole or in part) may be imposed on, incurred by, or
asserted against such Lender Party growing out of, resulting from or in
any other way associated with the Loan Documents and the transactions and
events (including the enforcement or defense thereof) at any time
associated therewith or contemplated therein (whether arising in contract
or in tort or otherwise and including any violation or noncompliance with
any Environmental Laws by any Agent-Related Person or any Lender Party or
any other Person or any liabilities or duties of any Agent-Related Person
or any Lender Party or any other Person with respect to Hazardous
Materials found in or released into the environment).
The foregoing indemnification shall apply whether or not such liabilities and
costs are in any way or to any extent owed, in whole or in part, under any claim
or theory of strict liability or caused, in whole or in part by any negligent
act or omission of any kind by any Agent-Related Person or Lender Party,
provided only that no Agent-Related Person or Lender Party shall be entitled
under this Section 10.4(b) to receive indemnification for that portion, if any,
of any liabilities and costs which is proximately caused by its own individual
gross negligence or willful misconduct, as determined in a final judgment. If
any Person (including Borrowers or any of their Affiliates) ever alleges such
gross negligence or willful misconduct by any Lender Party , the indemnification
provided for in this Section 10.4(b) shall nonetheless be paid upon demand,
subject to later adjustment or reimbursement, until such time as a court of
competent jurisdiction enters a final judgment as to the extent and effect of
the alleged gross negligence or willful misconduct. As used in this Section
10.4(b) the term "Lender Party " shall refer not only to each Person designated
as such in Section 1.1 but also to each director, officer, agent, attorney,
employee, representative, attorney-in-fact and Affiliate of such Person.
10.5 PARTIES IN INTEREST
All grants, covenants and agreements contained in the Loan Documents
shall bind and inure to the benefit of the parties thereto and their respective
successors and assigns; provided, however, that, no Restricted Person may assign
or transfer any of its rights or delegate any of its duties or obligations under
any Loan Document without the prior consent of all Lenders (and any attempted
assignment or transfer by any Restricted Person without such consent shall be
null and void). Neither Borrowers nor any Affiliates of Borrowers shall directly
or indirectly purchase or otherwise retire any Obligations owed to any Lender
nor will any Lender accept any offer to do so, unless each Lender shall have
received substantially the same offer with respect to the same Percentage Share
of the Obligations owed to it. If Borrowers or any Affiliate of Borrowers at any
time purchases some but less than all of the Obligations owed to all Lenders,
such purchaser shall not be entitled to any rights of any Lender under the Loan
Documents unless and until Borrowers or their Affiliates have purchased all of
the Obligations.
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10.6 ASSIGNMENTS AND PARTICIPATIONS
(a) Any Lender may at any time assign to one or more Eligible Assignees all or
a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Loans Maximum Credit Amount);
provided, however, that
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of such an assignment to another Lender or an
assignment of all of a Lender's rights and obligations under this
Agreement, any partial assignment of such Lender's rights and
obligations under this Agreement shall be in a collective amount at
least equal to Cdn. $10,000,000 or an integral multiple of Cdn.
$1,000,000 in excess thereof calculated with respect to the Maximum
Credit Amount;
(iii) each such assignment by a Lender shall be of a constant, and not
varying, percentage of all of its rights and obligations under the
Loan Documents;
(iv) if applicable, the Eligible Assignee shall be acceptable to any
beneficiary under a Direct Letter of Credit; and
(v) the parties to such assignment shall execute and deliver to Agent
for its acceptance an Assignment and Assumption in the form of
Exhibit F hereto, together with a processing fee of Cdn. $3,500.
Subject to acceptance and recording thereof by Agent pursuant to Section,
10.6(b) from and after the effective date specified in each Assignment and
Assumption, the Eligible Assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, have the obligations, rights, and benefits of a Lender
under this Agreement and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Assumption, and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption covering all of the assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections
3.2, 3.6, 3.9, 3.10 and 10.4). If, prior to an Event of Default, the
assignee is not incorporated under the Laws of Canada or a province
thereof, it shall deliver to Borrowers and Agent certification as to
exemption from deduction or withholding of Taxes acceptable to the Agent
and the Borrowers, acting reasonably. Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply
with this subsection (a) shall be treated for purposes of this Agreement
as a sale by such Lender of a participation in such rights and obligations
in accordance with subsection (d) of this Section 10.6.
(b) Agent, acting solely for this purpose as an agent of Borrowers, shall
maintain at its address referred to in Section 10.3 a copy of each
Assignment and Assumption delivered to and accepted by it and a register
for the recordation of the names and addresses of the Lenders and their
Percentage Share of the Maximum Credit Amount of, and principal amount of
the Loans owing to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and Borrowers, 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, notwithstanding notice to the contrary.
The Register shall be available for inspection by Borrowers or any Lender
at any reasonable time and from time to time upon reasonable prior notice.
51
(c) Upon its receipt of an Assignment and Assumption executed by the parties
thereto, together with payment of the processing fee, Agent shall, if such
Assignment and Assumption has been completed and is in substantially the
form of Exhibit F hereto:
(i) accept such Assignment and Assumption;
(ii) record the information contained therein in the Register; and
(iii) give prompt notice thereof to the parties thereto.
(d) Any Lender may at any time, without the consent of, or notice to,
Borrowers or Agent, sell participations to any Person (other than a
natural person or Borrowers or any of Borrowers' Affiliates or
Subsidiaries) in all or a portion of such Lender's rights and/or
obligations under this Agreement (including all or a portion of the
Maximum Credit Amount and its Loans); provided, however, that:
(i) such Lender's obligations under this Agreement shall remain
unchanged;
(ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations;
(iii) the participant shall be entitled to the benefit of the yield
protection provisions contained in Article 3 (provided that a
participant shall not be entitled to receive any greater payment
under Section 3.1 or 3.2 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such
participant, unless the sale of the participation to such
participant is made with the Borrowers' prior written consent; and
(iv) Borrowers, 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.
A participant that would have been subject to Section 3.9 if it were a
Lender, shall not be entitled to the benefits of Section 3.1 unless
Borrowers have been notified of the participation sold to such
participant, and such participant agrees, for the benefit of Borrowers, to
comply with such section as if it were a Lender) and the right of offset
contained in Section 6.13 (provided that such participant agrees to be
subject to Section 9.8 as if it were a Lender). Any agreement or
instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification, or waiver of any
provision of this Agreement (provided that such Lender may agree that it
will not approve amendments, modifications, or waivers decreasing the
amount of principal of or the rate at which interest is payable on such
Loans, extending any scheduled principal payment date or date fixed for
the payment of interest on such Loans, or extending its Maximum Credit
Amount without the prior consent of the participant).
(e) If the consent of Borrowers to an assignment or to an Eligible Assignee is
required hereunder, Borrowers shall be deemed to have given their consent
ten (10) Business Days after the date notice thereof has been delivered by
the assigning Lender (through Agent) unless such consent is expressly
refused by Borrowers prior to such tenth Business Day.
(f) Notwithstanding anything to the contrary contained herein, if at any time
the Fronting Lender assigns all of its Percentage Share in the Obligations
and its rights and obligations hereunder
52
pursuant to Section 10.6(a) above, such Fronting Lender may upon 30 days'
notice to Borrowers and Lenders, resign as Fronting Lender. In the event
of any such resignation by the Fronting Lender, Borrowers shall be
entitled to appoint from among the Lenders a successor Fronting Lender
hereunder; provided , however, that no failure by Borrowers to appoint any
such successor shall affect the resignation of the Fronting Lender. If the
Fronting Lender resigns, it shall retain all the rights and obligations of
the Fronting Lender hereunder with respect to all Fronted Letters of
Credit outstanding as of the effective date of its resignation as the
Fronting Lender and all LC Obligations with respect thereto, including the
right to require Lenders to make Prime Rate Loans or fund participations
in unreimbursed amounts pursuant to Section 2.6(b).
(g) Any Lender may furnish any information concerning Borrowers or any of its
Subsidiaries in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and
participants), subject, however, to the provisions of Section 10.7 hereof.
10.7 CONFIDENTIALITY
Agent and each Lender (in this Section 10.7 each is called a
"LENDING PARTY") agrees to keep confidential any information furnished or made
available to it by Borrowers pursuant to this Agreement that is marked
confidential; provided that nothing herein shall prevent any Lending Party from
disclosing such information:
(a) to any other Lending Party or any Affiliate of any Lending Party, or any
officer, director, employee, agent, or advisor of any Lending Party or
Affiliate of any Lending Party;
(b) to any other Person if reasonably incidental to the administration of the
credit facility provided herein;
(c) as required by any Law, rule, or regulation;
(d) upon the order of any Tribunal;
(e) upon the request or demand of any regulatory agency or authority;
(f) that is or becomes available to the public or that is or becomes available
to any Lending Party other than as a result of a disclosure by any Lending
Party prohibited by this Agreement;
(g) in connection with any litigation to which such Lending Party or any of
its Affiliates may be a party;
(h) to the extent necessary in connection with the exercise of any remedy
under this Agreement or any other Loan Document; and
(i) subject to provisions substantially similar to those contained in this
Section 10.7, to any actual or proposed participant or assignee.
10.8 GOVERNING LAW; SUBMISSION TO PROCESS
Except to the extent that the law of another jurisdiction is
expressly elected in a Loan Document, the Loan Documents shall be deemed
contracts and instruments made under the laws of the Province of Alberta and
shall be construed and enforced in accordance with and governed by the laws of
the Province of Alberta and the laws of Canada applicable thereto, without
regard to principles of
53
conflicts of law. Each of the parties hereby agrees that any legal action or
proceeding against such Borrower with respect to this Agreement or any of the
Loan Documents may be brought in the courts of the Province of Alberta and each
party submits and attorns to, the non-exclusive jurisdiction of the aforesaid
courts. Each party waives any right to stay or to dismiss any action or
proceeding brought before said courts on the basis of forum non conveniens.
Nothing herein shall affect the right of Lenders to serve process in any other
manner permitted by law or shall limit the right of Lenders to bring proceedings
against Borrowers in the courts of any other jurisdiction.
10.9 WAIVER OF JUDGMENT INTEREST ACT (ALBERTA)
To the extent permitted by Law, the provisions of the Judgment
Interest Act (Alberta) shall not apply to the Loan Documents and are hereby
expressly waived by Borrowers.
10.10 DEEMED REINVESTMENT NOT APPLICABLE
For the purposes of the Interest Act (Canada), the principle of
deemed reinvestment of interest shall not apply to any interest calculation
under the Loan Documents, and the rates of interest stipulated in this Agreement
are intended to be nominal rates and not effective rates or yields.
10.11 LIMITATION ON INTEREST
Lender Parties, Restricted Persons and any other parties to the Loan
Documents intend to contract in strict compliance with applicable usury Law from
time to time in effect. In furtherance thereof such Persons stipulate and agree
that none of the terms and provisions contained in the Loan Documents shall ever
be construed to create a contract to pay, for the use, forbearance or detention
of money, interest in excess of the maximum amount of interest permitted to be
charged by applicable Law from time to time in effect. Neither any Restricted
Person nor any present or future guarantors, endorsers, or other Persons
hereafter becoming liable for payment of any Obligation shall ever be liable for
unearned interest thereon or shall ever be required to pay interest thereon in
excess of the maximum amount that may be lawfully charged under applicable Law
from time to time in effect, and the provisions of this Section 10.11 shall
control over all other provisions of the Loan Documents which may be in conflict
or apparent conflict herewith. Lender Parties expressly disavow any intention to
charge or collect excessive unearned interest or finance charges in the event
the maturity of any Obligation is accelerated. If:
(a) the maturity of any Obligation is accelerated for any reason;
(b) any Obligation is prepaid and as a result any amounts held to constitute
interest are determined to be in excess of the legal maximum; or
(c) any Lender or any other holder of any or all of the Obligations shall
otherwise collect moneys which are determined to constitute interest which
would otherwise increase the interest on any or all of the Obligations to
an amount in excess of that permitted to be charged by applicable Law then
in effect, then all sums determined to constitute interest in excess of
such legal limit shall, without penalty, be promptly applied to reduce the
then outstanding principal of the related Obligations or, at such Lender's
or holder's option, promptly returned to Borrowers or the other payor
thereof upon such determination.
In determining whether or not the interest paid or payable, under any specific
circumstance, exceeds the maximum amount permitted under applicable Law, Lenders
and Restricted Persons (and any other payors thereof) shall to the greatest
extent permitted under applicable Law, and in accordance with generally accepted
actuarial practices and principles:
54
(i) characterize any non-principal payment as an expense, fee or premium
rather than as interest;
(ii) exclude voluntary prepayments and the effects thereof; and
(iii) amortize, prorate, allocate, and spread the total amount of interest
throughout the entire contemplated term of the instruments
evidencing the Obligations in accordance with the amounts
outstanding from time to time thereunder and the maximum legal rate
of interest from time to time in effect under applicable Law in
order to lawfully charge the maximum amount of interest permitted
under applicable Law.
In no event shall the aggregate "interest" (as defined in section 347 of the
Criminal Code (Canada)) payable under the Loan Documents exceed the maximum
effective annual rate of interest on the "credit advanced" (as defined in that
section) permitted under that section and, if any payment, collection or demand
pursuant to this Agreement in respect of "interest" (as defined in that section)
is determined to be contrary to the provisions of that section, such payment,
collection or demand shall be deemed to have been made by mutual mistake of
Borrowers, Agent and Lenders and the amount of such excess payment or collection
shall be refunded to Borrowers. For purposes of the Loan Documents, the
effective annual rate of interest shall be determined in accordance with
generally accepted actuarial practices and principles over the term applicable
to the Obligations on the basis of annual compounding of the lawfully permitted
rate of interest and, in the event of dispute, a certificate of a Fellow of the
Canadian Institute of Actuaries appointed by Agent shall be prima facie
evidence, for the purposes of such determination.
10.12 TERMINATION; LIMITED SURVIVAL
In their sole and absolute discretion, Borrowers may at any time
that no Obligations are owing elect in a written notice delivered to Agent to
terminate this Agreement. Upon receipt by Agent of such a notice, if no
Obligations are then owing this Agreement and all other Loan Documents shall
thereupon be terminated and the parties thereto released from all prospective
obligations thereunder. Notwithstanding the foregoing or anything herein to the
contrary, any waivers or admissions made by any Restricted Person in any Loan
Document, any Obligations under Sections 3.2, 3.3, 3.4, 3.5 and 3.6, and any
obligations which any Person may have to indemnify or compensate any Lender
shall survive any termination of this Agreement or any other Loan Document. At
the request and expense of Borrowers, Agent shall prepare and execute all
necessary instruments to reflect and effect such termination of the Loan
Documents. Agent is hereby authorized to execute all such instruments on behalf
of all Lenders, without the joinder of or further action by any Lender.
10.13 SEVERABILITY
If any term or provision of any Loan Document shall be determined to
be illegal or unenforceable all other terms and provisions of the Loan Documents
shall nevertheless remain effective and shall be enforced to the fullest extent
permitted by applicable Law.
10.14 COUNTERPARTS; FAX
This Agreement may be separately executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to constitute one and the same Agreement.
This Agreement and the Loan Documents may be validly executed and delivered by
facsimile or other electronic transmission.
55
10.15 WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC.
Each Borrower and each Lender hereby knowingly, voluntarily,
intentionally, and irrevocably:
(a) waives, to the maximum extent not prohibited by law, any right it may have
to a trial by jury in respect of any litigation based hereon, or directly
or indirectly at any time arising out of, under or in connection with the
loan documents or any transaction contemplated thereby or associated
therewith, before or after maturity, in each case whether now existing or
hereafter arising, and whether founded in contract or tort or otherwise;
and each party hereby agrees and consents that any such claim, demand,
action or cause of action shall be decided by court trial without a jury,
and that any party to this agreement may file an original counterpart or a
copy of this Section 10.15 with any court as written evidence of the
consent of the signatories hereto to the waiver of their right to trial by
jury;
(b) waives, to the maximum extent not prohibited by Law, any right it may have
to claim or recover in any such litigation any "Special Damages", as
defined below;
(c) certifies that no party hereto nor any representative or agent or counsel
for any party hereto has represented, expressly or otherwise, or implied
that such party would not, in the event of litigation, seek to enforce the
foregoing waivers; and
(d) acknowledges that it has been induced to enter into this Agreement, the
other Loan Documents and the transactions contemplated hereby and thereby
by, among other things, the mutual waivers and certifications contained in
this Section 10.15.
As used in this Section 10.15, "SPECIAL DAMAGES" includes all special,
consequential, exemplary, or punitive damages (regardless of how named), but
does not include any payments or funds which any party hereto has expressly
promised to pay or deliver to any other party hereto.
10.16 DEFINED TERMS
Capitalized terms and phrases used and not otherwise defined herein
shall for all purposes of this Agreement have the meaning given to such terms
and phrases in Annex I hereto.
10.17 ANNEX I, EXHIBITS AND SCHEDULES; ADDITIONAL DEFINITIONS
Annex I, Annex II, and all Exhibits and Schedules attached to this
Agreement are a part hereof for all purposes.
10.18 AMENDMENT OF DEFINED INSTRUMENTS
Unless the context otherwise requires or unless otherwise provided
herein, the terms defined in this Agreement which refer to a particular
agreement, instrument or document also refer to and include all renewals,
extensions, modifications, amendments and restatements of such agreement,
instrument or document, provided that nothing contained in this Section 10.18
shall be construed to authorize any such renewal, extension, modification,
amendment or restatement. Unless the context otherwise requires or unless
otherwise provided herein, the references in this Agreement to a particular
statute, rule or regulation also refer to and include all amendments,
supplements and other modifications to such statute, rule or regulation.
56
10.19 REFERENCES AND TITLES
All references in this Agreement to Exhibits, Schedules, articles,
sections, subsections and other subdivisions refer to the Exhibits, Schedules,
articles, sections, subsections and other subdivisions of this Agreement unless
expressly provided otherwise. Titles appearing at the beginning of any
subdivisions are for convenience only and do not constitute any part of such
subdivisions and shall be disregarded in construing the language contained in
such subdivisions. The words "this Agreement", "this instrument", "herein",
"hereof", "hereby", "hereunder" and words of similar import refer to this
Agreement as a whole and not to any particular subdivision unless expressly so
limited. The phrases "this section" and "this subsection" and similar phrases
refer only to the sections or subsections hereof in which such phrases occur.
The word "or" is not exclusive, and the word "including" (in its various forms)
means "including without limitation". Pronouns in masculine, feminine and neuter
genders shall be construed to include any other gender, and words in the
singular form shall be construed to include the plural and vice versa, unless
the context otherwise requires.
10.20 CALCULATIONS AND DETERMINATIONS
All calculations under the Loan Documents of interest chargeable
with respect to US Dollar Eurodollar Loans shall be made on the basis of actual
days elapsed (including the first day but excluding the last) and a year of 360
days. All calculations with respect to Bankers' Acceptances shall be made on the
basis of actual days elapsed (including the first day but excluding the last)
and a year of 365 days. All other calculations of interest and fees made under
the Loan Documents shall be made on the basis of actual days elapsed (including
the first day but excluding the last) and a year of 365 or 366 days, as
appropriate. Each determination by a Lender of amounts to be paid under Article
3 or any other matters which are to be determined hereunder by a Lender (such as
any US Dollar Eurodollar Rate, Business Day or Eurodollar Interest Period)
shall, in the absence of manifest error, be conclusive and binding. Unless
otherwise expressly provided herein or unless Required Lenders otherwise consent
all financial statements and reports furnished to any Lender hereunder shall be
prepared and all financial computations and determinations pursuant hereto shall
be made in accordance with US GAAP.
10.21 CONSTRUCTION OF INDEMNITIES AND RELEASES
All indemnification and release provisions of this Agreement shall
be construed broadly (and not narrowly) in favor of the Persons receiving
indemnification from or being released.
10.22 SEPARATE OBLIGATIONS
Except as expressly set forth in Sections 1.5 and 10.4:
(a) all obligations of Northstar Energy and Devon Canada under this Agreement
and the other Loan Documents are separate and individual obligations of
Northstar Energy and Devon Canada, respectively, and
(b) Northstar Energy shall not have any liabilities in respect of Advances
made by the Lenders to Devon Canada nor shall Devon Canada have any
liabilities in respect of Advances made to Northstar Energy.
57
Notwithstanding anything contained herein, Northstar Energy shall not have any
liability to pay any assessments, fees or costs, or otherwise provide financial
assistance, relating to Advances made to Devon Canada or any other obligations
of Devon Canada.
IN WITNESS WHEREOF, this Agreement is executed as of the date first
written above.
ADDRESS FOR NOTICE:
ADDRESS:
3000, 000 - 0xx Xxxxxx X.X. NORTHSTAR ENERGY CORPORATION
Calgary, Alberta T2P 4H2 CANADIAN BORROWER
Attention: Vice President - Finance
Telephone: (000) 000-0000 By: /s/ Xxxx Xxxxxxxx
------------------
Xxxx Xxxxxxxx
Fax: (000) 000-0000 Vice President - Finance
ADDRESS:
3000, 000 - 0xx Xxxxxx X.X. XXXXX XXXXXX CORPORATION
Xxxxxxx, Xxxxxxx X0X 0X0 XXXXXXXX BORROWER
Attention: Vice President - Finance
Telephone: (000) 000-0000 By: /s/ Xxxx Xxxxxxxx
------------------
Xxxx Xxxxxxxx
Fax: (000) 000-0000 Vice President - Finance
58
ADDRESS:
1100, 000 - 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Director, Corporate Credit
Telephone: (000) 000-0000
Fax: (000) 000-0000
WITH A COPY TO:
Credit Transaction Management
Xxx Xxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 - 0000 XXXXX XXXX XX XXXXXX, AS LENDER
Attention: Manager, Credit Transaction
Management
Telephone: (000) 000-0000 By: /s/ Xxxxx X. Xxxxxxxx
----------------------
Xxxxx X. Xxxxxxxx
Fax: (0000 000-0000 Senior Manager
ADDRESS:
0000, 000 - 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx X0X 0X0 THE BANK OF NOVA SCOTIA
Attention: Director
Telephone: (000) 000-0000 Per: /s/ Xxxxxxx X. Xxx
-------------------
Name: Xxxxxxx X. Xxx
Fax: (000) 000-0000 Title: Managing Director
ADDRESS:
Xxxxx 0000, 000 Xxx Xxxxxx
XXX Xxxxx, X. O. Xxx 000
Xxxxxxx, Xxxxxxx X0X 0X0
BANK ONE, NA (CANADA BRANCH)
Attention: Vice President
Telephone: (000) 000-0000 Per: /s/ Xxxxxx X. Xxxxx
--------------------
Name: Xxxxxx X. Xxxxx
Fax: (000) 000-0000 Title: Director
59
ADDRESS: BAYERISCHE LANDESBANK
GIROZENTRALE, TORONTO BRANCH
3210, 000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0 Per: /s/ Xxxxxx X. Xxxxxx
---------------------
Name: Xxxxxx X. Xxxxxx
Attention: Vice President and Title: Vice President
Manager, Lending
Telephone: (000) 000-0000 Per: /s/ Xxxxx Xxxxxxxxx
--------------------
Name: Xxxx Xxxxxxxxx
Fax: (000) 000-0000 Title: Vice President
ADDRESS:
Agency Services Group
00xx Xxxxx, Xxxxx Xxxxx
Xxxxx Bank Plaza, 000 Xxx Xxxxxx XXXXX XXXX XX XXXXXX
Xxxxxxx, Xxxxxxx X0X 0X0 ADMINISTRATIVE AGENT
Attention: Manager, Agency
Telephone: (000) 000-0000 By: /s/ Xxxx Xxxxxx
----------------
Xxxx Xxxxxx
Fax: (000) 000-0000 Manager, Agency
ANNEX I
DEFINED TERMS
"ACCOUNTS" means the accounts and records established by the Agent pursuant to
Section 3.11 to record each Borrower's liability to each of the Lenders, the
Fronting Lender and the Agent in respect of Borrowings and other amounts
outstanding by each Borrower to each of the Lenders, the Fronting Lender and the
Agent hereunder.
"ACQUIRED DEBT" means, with respect to any specified Person:
(a) Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person,
including and together with, without limitation, Indebtedness incurred in
connection with, or in contemplation of, such other Person merging with or
into or becoming a Subsidiary of such specified Person; and
(b) Indebtedness secured by a Lien encumbering any assets acquired by such
specified Person, and any refinancing of the foregoing indebtedness on
similar terms, taking into account current market conditions.
"ADVANCES" has the meaning given to such term in Section 1.1(a) of the
Agreement.
"AFFILIATE" means, as to any Person, each other Person that directly or
indirectly (through one or more intermediaries or otherwise) controls, is
controlled by, or is under common control with, such Person. A Person shall be
deemed to be "controlled by" any other Person if such other Person possesses,
directly or indirectly, power:
(a) to vote 20% or more of the securities (on a fully diluted basis) having
ordinary voting power for the election of directors or managing general
partners; or
(b) to direct or cause the direction of the management and policies of such
Person whether by contract or otherwise.
"AGENT" means Royal Bank of Canada, acting through its Agent's Branch of
Account, and its successors and assigns as administrative agent under the
Agreement.
"AGENT'S BRANCH OF ACCOUNT" means with respect to Advances and Borrowings, the
principal office of the Agent in Toronto, Ontario or such other office or branch
of the Agent in Canada as the Agent and the Borrowers, each acting reasonably,
may agree upon from time to time and as advised to the Lenders in writing.
"AGENT-RELATED PERSONS" means the Agent and its Affiliates, the Arranger, any
successor to Agent appointed in accordance with the Loan Documents, and the
officers, directors, employees, agents and attorneys-in-fact of such Persons.
"AGREEMENT" means the Credit Agreement dated the Closing Date among Borrowers,
Agent and Lenders to which these defined terms form Annex 1 thereto and as it
may be further amended, supplemented, restated or otherwise modified and in
effect from time to time.
2
"APPLICABLE CURRENCY" means:
(a) when used with respect to any Prime Rate Loan or any Bankers' Acceptance,
Canadian Dollars; and
(b) when used with respect to any US Base Rate Loan or any US Dollar
Eurodollar Loan, US Dollars.
"APPLICABLE LENDING OFFICE" means, for each Lender and for each Type of Loan,
the office of the Lender set out on the execution page hereof or such other
office of such Lender as such Lender may from time to time specify to Agent and
Borrowers by written notice in accordance with the terms hereof as the office by
which its Loans of such Type are to be made and maintained.
"APPLICATION DATE" means with respect to any Letter of Credit, the date on which
an LC Application for such Letter of Credit is submitted to the Agent or, in the
case of the Continued Letters of Credit, the date the Agreement becomes
effective.
"ARRANGER" means RBC Capital Markets.
"BA/LC COLLATERAL" has the meaning given such term in Section 2.9 of the
Agreement.
"BA DISCOUNT RATE" means, in respect of a BA being accepted by a Lender on any
date:
(a) for a Lender that is listed in Schedule I to the Bank Act (Canada), the
average bankers' acceptance rate as quoted on Reuters CDOR page (or such
other page as may, from time to time, replace such page on that service
for the purpose of displaying quotations for bankers' acceptances accepted
by leading Canadian financial institutions) at approximately 10:00 a.m.
(Toronto, Ontario time) on such drawdown date for bankers' acceptances
having a comparable maturity date as the maturity date of such BA (the
"CDOR Rate"); or, if such rate is not available at or about such time, the
average of the bankers' acceptance rates (expressed to five decimal
places) as quoted to the Agent by the Schedule I BA Reference Banks as of
10:00 a.m. (Toronto, Ontario time) on such drawdown date for bankers'
acceptances having a comparable maturity date as the maturity date of such
BA; and
(b) for a Lender that is listed in Schedule II to the Bank Act (Canada) or a
Lender that is listed in Schedule III to the Bank Act (Canada) that is not
subject to the restrictions and requirements referred to in subsection 524
(2) of the Bank Act (Canada), the rate established by the Agent to be the
lesser of:
(i) the CDOR Rate plus 00 Xxxxx Xxxxxx; and
(ii) the average of the bankers' acceptance rates (expressed to five
decimal places) as quoted to the Agent by the Schedule II BA
Reference Banks as of 10:00 a.m. (Toronto, Ontario time) on such
drawdown date for bankers' acceptances having a comparable maturity
date as the maturity date of such BA.
"BANKERS' ACCEPTANCE" or "BA" means a Canadian Dollar draft of either Borrower,
for a term selected by such Borrower in accordance with the Agreement payable in
Canada.
"BANKRUPTCY AND INSOLVENCY ACT (CANADA)" means the Bankruptcy and Insolvency
Act, S.C. 1992, c. 27, including the regulations made and, from time to time, in
force under that Act.
3
"BASIS POINT" means one one-hundredth of one percent (0.01%).
"BORROWERS" means Northstar Energy and Devon Canada.
"BORROWING" means a borrowing of new Loans of a single Type pursuant to Section
1.2 or a Continuation or Conversion of existing Loans into a single Type (and,
in the case of US Dollar Eurodollar Loans, with the same Eurodollar Interest
Period) pursuant to Section 1.3 or the acceptance or purchase of Bankers'
Acceptances issued by Borrowers or the issuance of Direct Letters of Credit by
the Agent for and on behalf of the Lenders or the issuance of Fronted Letters of
Credit by the Fronting Lender for the account of the Lenders or the Continuation
or Conversion of existing Bankers' Acceptances into Loans of a single Type in
the case of US Dollar Eurodollar Loans with the same Interest Period pursuant to
Section 1.3 of the Agreement.
"BORROWING NOTICE" means a written or telephonic request, or a written
confirmation, made by any Borrower which meets the requirements of Section 1.2
of the Agreement.
"BUSINESS DAY" means a day, other than a Saturday or Sunday, on which commercial
banks are open for business with the public in Xxxxxxx, Xxxxxxx xxx Xxxxxxx,
Xxxxxxx. Any Business Day in any way relating to US Dollar Eurodollar Loans
(such as the day on which a Eurodollar Interest Period begins or ends) must also
be a day on which, in the judgment of Agent, significant transactions in US
Dollars are carried out in the interbank eurocurrency market.
"CANADIAN DOLLAR" or "CDN. $" means the lawful currency of Canada.
"CANADIAN RESIDENT LENDER" means each Lender identified as such on Annex II to
the Agreement or any Assignment and Acceptance executed by a new Lender, each
being a Person that is:
(a) not a non-resident of Canada for the purposes of the Income Tax Act
(Canada); or
(b) a Person that is an "AUTHORIZED FOREIGN BANK" as defined in section 2 of
the Bank Act (Canada) and in subsection 248(1) of the Income Tax Act
(Canada) which will receive all amounts paid or credited to it under the
Obligations in respect of its "CANADIAN BANKING BUSINESS" for the purposes
of paragraph 212(13.3)(a) of the Income Tax Act (Canada).
"CHANGE OF CONTROL" means the occurrence of either of the following events:
(a) any Person (or syndicate or group of Persons which is deemed a "person"
for the purposes of Section 13(d)(3) of the Securities Exchange Act of
1934, as amended) acquires more than fifty percent (50%) of the
outstanding stock of US Parent having ordinary voting power (disregarding
changes in voting power based on the occurrence of contingencies) for the
election of directors; or
(b) during any period of twelve successive months a majority of the Persons
who were directors of US Parent at the beginning of such period cease to
be directors of US Parent, unless such cessation relates to a voluntary
reduction by US Parent of the number of directors that comprise the board
of directors of US Parent.
"CHANGE OF LAW" has the meaning given to it in Section 3.2(a) of the Agreement.
"CLOSING DATE" means July 25, 2002.
4
"COMPANIES' CREDITORS ARRANGEMENT ACT (CANADA)" means the Companies' Creditors
Arrangement Act, R.S.C. 1985, c. C-36, including the regulations made and from
time to time in force under that Act.
"CONSOLIDATED" refers to the consolidation of any Person, in accordance with US
GAAP, with its properly consolidated subsidiaries. References herein to a
Person's Consolidated financial statements, financial position, financial
condition, liabilities, etc. refer to the consolidated financial statements,
financial position, financial condition, liabilities, etc. of such Person and
its properly consolidated subsidiaries.
"CONSOLIDATED ASSETS" means the total assets of US Parent and its Restricted
Subsidiaries which would be shown as assets on a Consolidated balance sheet of
US Parent and its Restricted Subsidiaries prepared in accordance with US GAAP,
after eliminating all amounts properly attributable to minority interest, if
any, in the stock and surplus of the Restricted Subsidiaries.
"CONTINUATION" shall refer to the continuation pursuant to Section 1.3 of the
Agreement of a US Dollar Eurodollar Loan as a US Dollar Eurodollar Loan from one
Interest Period to the next Eurodollar Interest Period or a rollover of a
Bankers' Acceptance at maturity.
"CONTINUATION/CONVERSION NOTICE" means a written confirmation, made by the
applicable Borrower which meets the requirements of Section 1.3.
"CONTINUED LETTERS OF CREDIT" has the meaning given to it in Section 1.1(c)
"CONVERSION" shall refer to a conversion pursuant to Section 1.3 or Article 3 of
one Type of Advance into another Type of Advance.
"DBRS" means Dominion Bond Rating Service Limited, or its successor.
"DEFAULT" means any Event of Default and any default, event or condition which
would, with the giving of any requisite notices and the passage of any requisite
periods of time, constitute an Event of Default.
"DEFAULT RATE" means at the time in question:
(a) with respect to any US Dollar Eurodollar Loan, the rate two percent (2%)
per annum above the US Dollar Eurodollar Rate then in effect for such
Loan;
(b) with respect to any Prime Rate Loan, the rate two percent (2%) per annum
above the Prime Rate then in effect for such Loan; and
(c) with respect to any US Base Rate Loan, the rate two percent (2%) per annum
above the US Dollar Base Rate then in effect for such Loan;
No Default Rate charged by any Person shall ever exceed the Highest Lawful Rate.
"DEPOSITORY BILLS AND NOTES ACT (CANADA)" means the Depository Bills and Notes
Act (Canada), R.S.C. 1998, c. 13, including the regulations made and, from time
to time, in force under that Act.
"DEVON CANADA" means Devon Canada Corporation, an Alberta corporation and
successor to Xxxxxxxx Exploration Ltd.
"DEVON NEVADA" means Devon Energy Corporation (Nevada), a Nevada corporation.
5
"DEVON OKLAHOMA" means Devon Energy Corporation (Oklahoma), an Oklahoma
corporation, formerly known as Devon Energy Corporation, an Oklahoma
corporation.
"DEVON SFS" means Devon SFS Operating, Inc., a Delaware corporation.
"DEVON TRUST" means Devon Financing Trust II, a statutory business trust formed
under the laws of the State of Delaware.
"DEVON TRUST REGISTRATION STATEMENT" means the Registration Statement on Form
S-3 filed by US Parent under the Securities Act of 1933 on November 16, 2000
with respect to the issuance by US Parent of Common Stock, Preferred Stock, Debt
Securities, Stock Purchase Agreements and Stock Purchase Units, and the issuance
by Devon Financing Trust II of Trust Preferred Securities guaranteed by US
Parent, as amended and supplemented from time to time.
"DEVON TRUST SECURITIES" means those certain Trust Preferred Securities, which
may be issued by Devon Trust pursuant to the Registration Statement in an
aggregate face amount not to exceed US $447,261,200.
"DIRECT LETTERS OF CREDIT" has the meaning given to it in Section 1.1(a)(iii).
"DISCLOSURE REPORT" means a written notice given by US Parent to all Lender
Parties or a certificate given by the Senior Vice President-Finance or the
Treasurer of US Parent under Sections 6.2(a) and (b).
"DISCLOSURE SCHEDULE" means Schedule 1 to the Agreement.
"DISCOUNT PROCEEDS" means, in respect of each Bankers' Acceptance, funds in an
amount which is equal to:
FACE AMOUNT
-----------
1 + (Rate x Term)
(-----------)
( 365 )
(where "FACE AMOUNT" is the principal amount of the Bankers' Acceptance being
purchased, "RATE" is the BA Discount Rate divided by 100 and "TERM" is the
number of days in the term of the Bankers' Acceptance.)
"ELIGIBLE ASSIGNEE" means a Person which either:
(a) is a Lender or an Affiliate of a Lender;
(b) an Approved Fund; or
(c) is consented to as an Eligible Assignee by Agent;
and, so long as no Event of Default is continuing, by the Borrowers, in each
case which consent will not be unreasonably withheld and which, prior to an
Event of Default, is a Canadian Resident Lender, provided that the Borrowers'
consent shall not be required for a Person to be an "ELIGIBLE ASSIGNEE" for
purposes of Section 10.6(d) of the Agreement. As used in this definition, "FUND"
means any Person (other than a natural Person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its business, and
"APPROVED FUND" means any Fund that is administered or managed by:
6
(d) a Lender;
(e) an Affiliate of a Lender; or
(f) an entity or an Affiliate of an entity that administers or manages a
Lender.
"ENVIRONMENTAL LAWS" means any and all Laws relating to the environment or to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
into the environment including ambient air, surface water, ground water, or
land, or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time, together with all rules and regulations promulgated with
respect thereto.
"ERISA AFFILIATE" means US Parent and all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control that, together with US Parent, are treated as a single employer
under Section 414 of the Internal Revenue Code.
"ERISA PLAN" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to Title IV of ERISA maintained by any ERISA Affiliate with
respect to which any Restricted Person has a fixed or contingent liability.
"EURODOLLAR INTEREST PERIOD" means, with respect to each particular US Dollar
Eurodollar Loan in a Borrowing, the period specified in the Borrowing Notice or
Continuation/Conversion Notice applicable thereto, beginning on and including
the date specified in such Borrowing Notice or Continuation/Conversion Notice
(which must be a Business Day), and ending one, two, three or six months
thereafter, as the applicable Borrower may elect in such notice; provided that:
(a) any Eurodollar Interest Period which would otherwise end on a day which is
not a Business Day shall be extended to the next succeeding Business Day
unless such Business Day falls in another calendar month, in which case
such Eurodollar Interest Period shall end on the next preceding Business
Day;
(b) any Eurodollar Interest Period which begins on the last Business Day in a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Eurodollar
Interest Period) shall end on the last Business Day in a calendar month;
and
(c) notwithstanding the foregoing, any Eurodollar Interest Period for Loans
which would otherwise end after the Maturity Date shall end on the
Maturity Date (or, if the last day of such period is not a Business Day,
on the next preceding Business Day).
"EVENT OF DEFAULT" has the meaning given to such term in Section 8.1 thereof.
"EXCHANGE EQUIVALENT" in respect of one currency (the "ORIGINAL CURRENCY"),
being Canadian Dollars or US Dollars, as the case may be, means, at the date of
determination, the amount of currency expressed in the other such currency
necessary to purchase, based on the Noon Rate on such date, the specified amount
of the Original Currency on such date.
"EXTENSION DATE" has the meaning given to it in Section 1.6(b).
7
"FACILITY USAGE" means, at the time in question, the Canadian Dollar Equivalent
of the aggregate amount of Loans, LC Obligations, and BA's outstanding at such
time.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100th of one percent) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank on the Business Day next succeeding such day, provided
that:
(a) if the day for which such rate is to be determined is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the
next succeeding Business Day; and
(b) if such rate is not so published for any day, the Federal Funds Rate for
such day shall be the average rate (rounded upwards, if necessary, to the
nearest 1/100th of one percent) quoted to Agent on such day on such
transactions as determined by Agent.
"FISCAL QUARTER" means a three-month period ending on March 31, June 30,
September 30 or December 31 of any year.
"FISCAL YEAR" means a twelve-month period ending on December 31 of any year.
"FRONTED LETTER OF CREDIT" has the meaning given to it in Section 1.1(a)(iii).
"FRONTING FEE RATE" means with respect to any Fronted Letter of Credit, the per
annum fee, not to exceed fifteen (15) Basis Points, agreed to by the Fronting
Lender and the Borrowers at the time of the issuance of the first Fronted Letter
of Credit issued by such Fronting Lender.
"FRONTING LENDER" means the Lender from time to time appointed under the
Agreement to issue Fronted Letters of Credit;
"GOVERNMENTAL AUTHORITY" means any domestic or foreign, national, federal,
provincial, state, municipal or other local government or body and any division,
agency, ministry, commission, board or authority or any quasi-governmental or
private body exercising any statutory, regulatory, expropriation or taxing
authority under the authority of any of the foregoing, and any domestic, foreign
or international judicial, quasi-judicial, arbitration or administrative court,
tribunal, commission, board or panel acting under the authority of any of the
foregoing.
"HAZARDOUS MATERIALS" means any substances regulated under any Environmental
Law, whether as pollutants, contaminants, or chemicals, or as industrial, toxic
or hazardous substances or wastes, or otherwise.
"HEDGING CONTRACT" means:
(a) any agreement providing for options, swaps, floors, caps, collars, forward
sales or forward purchases involving interest rates, commodities or
commodity prices, equities, currencies, bonds, or indexes based on any of
the foregoing;
(b) any option, futures or forward contract traded on an exchange; and
(c) any other derivative agreement or other similar agreement or arrangement.
8
"HIGHEST LAWFUL RATE" means, with respect to each Lender Party to whom
Obligations are owed, the maximum nonusurious rate of interest that such Lender
Party is permitted under applicable Law to contract for, take, charge, or
receive with respect to such Obligations. All determinations herein of the
Highest Lawful Rate, or of any interest rate determined by reference to the
Highest Lawful Rate, shall be made separately for each Lender Party as
appropriate to assure that the Loan Documents are not construed to obligate any
Person to pay interest to any Lender Party at a rate in excess of the Highest
Lawful Rate applicable to such Lender Party.
"INCOME TAX ACT (CANADA)" means the Income Tax Act, R.S.C. 1985 c.1 (5th Supp),
including the regulations made and, from time to time, in force under that Act.
"INDEBTEDNESS" of any Person means Liabilities in any of the following
categories:
(a) Liabilities for borrowed money;
(b) Liabilities constituting an obligation to pay the deferred purchase price
of property or services, other than customary payment terms taken in the
ordinary course of such Person's business;
(c) Liabilities evidenced by a bond, debenture, note or similar instrument;
(d) Liabilities arising under conditional sales or other title retention
agreements or under leases capitalized in accordance with US GAAP, but
excluding customary oil, gas or mineral leases and operating leases;
(e) Liabilities with respect to payments received in consideration of oil,
gas, or other minerals yet to be acquired or produced at the time of
payment (including obligations under "take-or-pay" contracts to deliver
gas in return for payments already received and the undischarged balance
of any production payment created by such Person or for the creation of
which such Person directly or indirectly received payment);
(f) Liabilities under Hedging Contracts;
(g) Liabilities with respect to letters of credit or applications or
reimbursement agreements therefor; or
(h) Liabilities under direct or indirect guaranties of Liabilities of any
Person or constituting obligations to purchase or acquire or to otherwise
protect or insure a creditor against loss in respect of Indebtedness of
the types described in paragraphs (a) through (g) above of any Person
(such as obligations under working capital maintenance agreements,
agreements to keep-well, or agreements to purchase debt, assets, goods,
securities or services, but excluding endorsements in the ordinary course
of business of negotiable instruments in the course of collection);
provided, however, that the "INDEBTEDNESS" of any Person shall not include
Liabilities that were incurred by such Person on ordinary trade terms to
vendors, suppliers, or other Persons providing goods and services for use by
such Person in the ordinary course of its business, unless and until such
Liabilities are outstanding more than 90 days past the original invoice or
billing date therefor. Any Indebtedness owed by a partnership shall be deemed
Indebtedness of any partner in such partnership to the extent such partner has
any liability of any kind therefor.
"INITIAL FINANCIAL STATEMENTS" means:
9
(a) the audited annual Consolidated financial statements of US Parent dated as
of December 31, 2001; and
(b) the unaudited quarterly Consolidated financial statements of US Parent
dated as of Xxxxx 00, 0000.
"XXXXXXXX XXX (XXXXXX)" means the Interest Act, R.S.C. 1985, c. I-15, including
the regulations made and, from time to time, in force under that Act.
"INTEREST PAYMENT DATE" means:
(a) with respect to each US Base Rate Loan and Prime Rate Loan, the last
Business Day of each March, June, September and December beginning
September 30, 2002; and
(b) with respect to each US Dollar Eurodollar Loan, the last day of the
Eurodollar Interest Period that is applicable thereto; provided that the
last day of each calendar month shall also be an Interest Payment Date for
each such US Dollar Eurodollar Loan so long as any Event of Default exists
under Section 8.1(a) or (b).
"INTERNAL REVENUE CODE" means the United States Internal Revenue Code of 1986,
as amended from time to time and any successor statute or statutes.
"INVESTMENT" means any investment made directly or indirectly, in any Person,
whether by acquisition of shares of capital stock, indebtedness or other
obligations or securities or by loan, advance, capital contribution or otherwise
and whether made in cash, by the transfer of property, or by any other means.
"ISSUANCE DATE" means as to any Letter of Credit, the date on which such Letter
of Credit is issued.
"JUDGMENT INTEREST ACT (ALBERTA)" means the Judgment Interest Act, R.S.A. 2000,
c. J-1, including the regulations made and, from time to time, in force under
that Act.
"LAW" means any statute, law, regulation, ordinance, rule, treaty, judgment,
order, decree, permit, concession, franchise, license, agreement or other
governmental restriction of the United States or Canada or any state, province
or political subdivision thereof or of any foreign country or any department,
province or other political subdivision thereof.
"LC APPLICATION" means an application on the Agent's or Fronting Lender's, as
applicable, standard form of letter of credit application submitted to the Agent
or the Fronting Lender by a Borrower requesting the Lenders or the Fronting
Lender to open a Letter of Credit hereunder subject to such reasonable changes
thereto as are requested by a Borrower and agreed to by the Agent or Fronting
Lender, acting reasonably, in order to make the LC Application not inconsistent
with the provisions of the Agreement and the Borrowers' and US Parent's other
credit facilities, including, without limitation, the US Agreement.
"LC DISBURSEMENT" means any payment by a Lender or, if applicable, the Fronting
Lender under a Letter of Credit plus all taxes and reasonable and customary,
fees, charges and other costs and expenses incurred by such Lender or, if
applicable, the Fronting Lender in connection with such payment.
"LC EXPENSES" has the meaning given to it in Section 2.6(a) of the Agreement.
10
"LC OBLIGATIONS" means the obligation of the applicable Borrower at any time for
the amount equal to the sum of the aggregate then undrawn and unexpired amount
of the then outstanding Letters of Credit issued at the request of such
Borrower.
"LC FEE RATE" means with respect to any Letter of Credit issued by any Lender
or, if applicable, the Fronting Lender, at any time, seventy-five (75) Basis
Points per annum.
"LENDER PARTIES" means Agent, all Lenders and the Fronting Lender.
"LENDERS" means each signatory to the Agreement (other than any Borrower),
including Royal Bank of Canada, acting through its Agent's Branch of Account, in
the capacity of a Lender hereunder, rather than as Agent and the successors of
each such party.
"LENDERS SCHEDULE" means Annex II to the Agreement.
"LETTER OF CREDIT" means any letter of credit issued by the Agent for and on
behalf of the Lenders or by the Fronting Lender for the account of the Lenders
on or after the Closing Date but prior to the Maturity Date upon the submission
of an LC Application as herein provided, in accordance with Section 2.5, in each
case as the same may be amended, supplemented, extended or otherwise modified
from time to time in accordance with the terms hereof and thereof. "LETTERS OF
CREDIT" shall refer collectively to all Letters of Credit outstanding at any
time.
"LIABILITIES" means, as to any Person, all indebtedness, liabilities and
obligations of such Person, whether matured or unmatured, liquidated or
unliquidated, primary or secondary, direct or indirect, absolute, fixed or
contingent, and whether or not required to be considered pursuant to US GAAP.
"LIEN" means, with respect to any property or assets, any lien, mortgage,
security interest, pledge, deposit, production payment, rights of a vendor under
any title retention or conditional sale agreement or lease substantially
equivalent thereto, tax lien, mechanic's or materialman's lien, or any other
charge or encumbrance for security purposes, whether arising by Law or agreement
or otherwise, but excluding any right of offset. "LIEN" also means any filed
financing statement, any registration of a pledge (such as with an issuer of
uncertificated securities), or any other arrangement or action which would serve
to perfect a Lien described in the preceding sentence, regardless of whether
such financing statement is filed, such registration is made, or such
arrangement or action is undertaken before or after such Lien exists.
"LOANS" has the meaning given it in Section 1.1(a) of the Agreement.
"LOAN DOCUMENTS" means the Agreement, the Letters of Credit, the LC Applications
related thereto, the BA's, the guarantee executed by the US Parent, and all
other agreements, certificates, documents, instruments and writings at any time
delivered in connection herewith or therewith (exclusive of term sheets and
commitment letters).
"MAJORITY LENDERS" means Lenders whose aggregate Percentage Shares exceed
sixty-six and two thirds percent (66 2/3%).
"MARGIN STOCK" means "MARGIN STOCK" as defined in Reg U.
"MATERIAL ADVERSE EFFECT" means, when used in connection with a specified
Person, any change or effect (or any development that, insofar as can reasonably
be foreseen, is likely to result in any change or effect) that is materially
adverse to the business, properties, assets and liabilities (taken together),
11
financial condition or results of operations of such Person and its subsidiaries
taken as a whole; provided however, that:
(a) any adverse change, effect or development that is caused by or results
from conditions affecting the United States economy generally or the
economy of any nation or region in which such Person or its subsidiaries
conduct business that is material to the business of such Person and its
subsidiaries, taken as whole, shall not be taken into account in
determining whether there has been (or whether there could reasonably be
foreseen) a "Material Adverse Effect" with respect to such Person; and
(b) any adverse change, effect or development that is caused by or results
from conditions generally affecting the industries (including the oil and
gas industry) in which such Person conducts its business shall not be
taken into account in determining whether there has been (or whether there
could reasonably be foreseen) a "Material Adverse Effect" with respect to
such Person.
Unless the context otherwise requires, the term Material Adverse Effect shall be
deemed to be used in connection with the US Parent and its subsidiaries taken as
a whole.
"MATERIAL SUBSIDIARY" means a Subsidiary of US Parent which owns assets having a
book value that exceeds ten percent (10%) of the book value of US Parent's
Consolidated assets.
"MATURITY DATE" means July 23, 2003, subject to extension as provided for in
Section 1.6 of the Agreement.
"MAXIMUM CREDIT AMOUNT" means Cdn. $140,000,000 or the US Dollar Exchange
Equivalent thereof.
"MOODY'S" means Xxxxx'x Investor Service, Inc., or its successor.
"MULTIEMPLOYER PLAN" mean a multiemployer plan within the meaning of Section
4001(a)(3) of ERISA to which any ERISA Affiliate is making or is obligated to
make contributions or, during the five preceding plan years, has made or has
been obligated to make contributions.
"NET PROCEEDS" means with respect to any Bankers' Acceptance, the Discount
Proceeds less the amount equal to the applicable Stamping Fee Rate multiplied by
the face amount of such Bankers' Acceptance.
"NON-ACCEPTING LENDER" has the meaning given to it in Section 1.6(a)(ii) of the
Agreement.
"NOON RATE" means, in relation to the conversion of one currency into another
currency, the rate of exchange for such conversion as quoted by the Bank of
Canada (or, if not so quoted, the spot rate of exchange quoted for wholesale
transactions made by Agent at Toronto, Ontario at approximately noon (Toronto,
Ontario local time)).
"NORTHSTAR ENERGY" means Northstar Energy Corporation, an amalgamated Alberta
corporation.
"OBLIGATIONS" means the aggregate Liabilities from time to time owing by each
Borrower to any Lender Party under or pursuant to any of the Loan Documents,
including, without limitation, all LC Obligations owing thereunder. "OBLIGATION"
means any part of the Obligations.
"OFFER OF EXTENSION" means a written offer by Agent, for and on behalf of
Required Lenders, to Borrowers to extend the Maturity Date to a date 364 days
from acceptance by Borrowers of such offer,
12
and setting forth, if applicable, the terms and conditions on which such
extension is offered by the Lenders and as may be accepted by Borrowers.
"PENNZENERGY DEBENTURES" means the following Debentures of PennzEnergy Company,
which were issued prior to the merger of PennzEnergy Company with and into US
Parent:
(a) 10.125% Debentures due November 15, 2009 in the aggregate principal amount
of US $200,000,000;
(b) 10.25% Debentures due November 1, 2005 in the aggregate principal amount
of US $250,000,000;
(c) the PennzEnergy Exchangeable Debentures.
"PENNZENERGY EXCHANGEABLE DEBENTURES" means the following Exchangeable
Debentures of PennzEnergy Company, which were issued prior to the merger of
PennzEnergy Company with and into US Parent:
(a) 4.90% Exchangeable Senior Debentures due August 15, 2008 in the aggregate
principal amount of US $443,807,000; and
(b) 4.95% Exchangeable Senior Debentures due August 15, 2008 in the aggregate
principal amount of US $316,506,000.
"PERCENTAGE SHARE" means with respect to any Lender:
(a) when used in Article 1, in Article 2 prior to the Maturity Date, in any
Borrowing Notice under the Agreement or when no Advances are outstanding,
the percentage set forth opposite such Lender's name on the Lenders
Schedule as modified by assignments of a Lender's rights and obligations
under the Agreement made by or to such Lender in accordance with the terms
of the Agreement; and
(b) when used otherwise, the percentage obtained by dividing (x) the sum of
the unpaid principal balance of such Lender's Advances, by (y) the sum of
the aggregate unpaid principal balance of all Advances at such time.
"PERMITTED LIENS" means:
(a) Liens for taxes, assessments or governmental charges which are not due or
delinquent, or the validity of which US Parent or any Restricted
Subsidiary shall be contesting in good faith; provided US Parent or such
Restricted Subsidiary shall have made adequate provision therefor in
accordance with US GAAP;
(b) the Lien of any judgment rendered, or claim filed, against US Parent or
any Restricted Subsidiary which does not constitute an Event of Default
and which US Parent or any such Restricted Subsidiary shall be contesting
in good faith; provided US Parent or such Restricted Subsidiary shall have
made adequate provision therefor in accordance with US GAAP;
(c) Liens, privileges or other charges imposed or permitted by law such as
statutory liens and deemed trusts, carriers' liens, builders' liens,
materialmens' liens and other liens, privileges or other charges of a
similar nature which relate to obligations not due or delinquent,
including any lien or
13
trust arising in connection with workers' compensation, unemployment
insurance, pension, employment and similar laws or regulations;
(d) Liens arising in the ordinary course of and incidental to construction,
maintenance or current operations which have not been filed pursuant to
law against US Parent or any Restricted Subsidiary or in respect of which
no steps or proceedings to enforce such lien have been initiated or which
relate to obligations which are not due or delinquent or if due or
delinquent, which US Parent or such Restricted Subsidiary shall be
contesting in good faith; provided US Parent or such Restricted Subsidiary
shall have made adequate provision therefor in accordance with US GAAP;
(e) Liens incurred or created in the ordinary course of business and in
accordance with sound oil and gas industry practice in respect of the
exploration, development or operation of oil and gas properties or related
production or processing facilities or the transmission of petroleum
substances as security in favor of any other Person conducting the
exploration, development, operation or transmission of the property to
which such Liens relate, for US Parent's or any of its Restricted
Subsidiaries' portion of the costs and expenses of such exploration,
development, operation or transmission, provided that such costs or
expenses are not due or delinquent or, if due or delinquent, which US
Parent or such Restricted Subsidiary shall be contesting in good faith;
provided US Parent or such Restricted Subsidiary shall have made adequate
provision therefor in accordance with US GAAP;
(f) overriding royalty interests, net profit interests, reversionary interests
and carried interests or other similar burdens on production in respect of
US Parent's or any of its Restricted Subsidiaries' oil and gas properties
that are entered into with or granted to arm's length third parties in the
ordinary course of business and in accordance with sound oil and gas
industry practice in the area of operation;
(g) Liens for penalties arising under non-participation provisions of
operating agreements in respect of US Parent's or any of its Restricted
Subsidiaries' oil and gas properties if such Liens do not materially
detract from the value of any material part of the property of US Parent
and its Subsidiaries taken as a whole;
(h) easements, rights-of-way, servitudes, zoning or other similar rights or
restrictions in respect of land held by US Parent or any Restricted
Subsidiary (including, without limitation, rights-of-way and servitudes
for railways, sewers, drains, pipe lines, gas and water mains, electric
light and power and telephone or telegraph or cable television conduits,
poles, wires and cables) which, either alone or in the aggregate, do not
materially detract from the value of such land or materially impair its
use in the operation of the business of US Parent and its Restricted
Subsidiaries taken as a whole;
(i) security given by US Parent or any Restricted Subsidiary to a public
utility or any Governmental Authority when required by such public utility
or Governmental Authority in the ordinary course of the business of US
Parent or any Restricted Subsidiary in connection with operations of US
Parent or any Restricted Subsidiary if such security does not, either
alone or in the aggregate, materially detract from the value of any
material part of the property of US Parent and its Restricted Subsidiaries
taken as a whole;
(j) the right reserved to or vested in any Governmental Authority by the terms
of any lease, license, grant or permit or by any statutory or regulatory
provision to terminate any such lease, license, grant or permit or to
require annual or other periodic payments as a condition of the
continuance thereof;
14
(k) all reservations in the original grant of any lands and premises or any
interests therein and all statutory exceptions, qualifications and
reservations in respect of title;
(l) any Lien from time to time disclosed by either Borrower or US Parent or
any Restricted Subsidiary to the Agent and which is consented to by the
Majority Lenders;
(m) any right of first refusal in favor of any Person granted in the ordinary
course of business with respect to all or any of the oil and gas
properties of US Parent or any Restricted Subsidiary;
(n) Liens on cash or marketable securities of US Parent or any Restricted
Subsidiary granted in connection with any Hedging Contract permitted under
the US Agreement;
(o) Liens in respect of Indebtedness permitted by Sections 7.1(b), 7.1(f) and
7.1(i) of this Agreement and Indebtedness permitted to be secured by
Section 7.1(c) of this Agreement;
(p) Liens in favor of the Agent for the benefit of the Lender Parties and
Liens in favour of the US Agent and the Canadian Agent (as those terms are
defined in the US Agreement) permitted by Section 2.5 or other similar
provisions of the US Agreement as at the date hereof;
(q) Liens to collateralize moneys held in a cash collateral account by a
lender in respect of the prepayment of bankers' acceptances, letters of
credit or similar obligations accepted or issued by such lender but only
if at the time of such prepayment no default or event of default has
occurred and is continuing under the credit facility pursuant to which the
bankers' acceptances or letters of credit have been accepted or issued;
(r) purchase money Liens upon or in any tangible personal property and
fixtures (including real property surface rights upon which such fixtures
are located and contractual rights and receivables relating to such
property) acquired by US Parent or a Restricted Subsidiary in the ordinary
course of business to secure the purchase price of such property or to
secure Indebtedness incurred solely for the purpose of financing the
acquisition of such property, including any Liens existing on such
property at the time of its acquisition (other than any such Lien created
in contemplation of any such acquisition);
(s) the rights of buyers under production sale contracts related to US
Parent's or a Restricted Subsidiary's share of petroleum substances
entered into in the ordinary course of business, provided that the
contracts create no rights (including any Lien) in favor of the buyer or
any other Person in, to or over any reserves of petroleum substances or
other assets of US Parent or a Restricted Subsidiary, other than a
dedication of reserves (not by way of Lien or absolute assignment) on
usual industry terms;
(t) Liens arising in respect of operating leases of personal property under
which Borrowers or any of their Subsidiaries are lessees;
(u) Liens on property of a Person existing at the time such Person becomes a
Restricted Subsidiary, is merged into or amalgamated or consolidated with
US Parent or any of its Subsidiaries; provided, such Liens were in
existence prior to the contemplation of such stock acquisition, merger,
amalgamation or consolidation and do not extend to any assets other than
those of the Person so acquired or merged into or amalgamated or
consolidated with US Parent or any of its Subsidiaries;
15
(v) any extension, renewal or replacement (or successive extensions, renewals
or replacements), as a whole or in part, of any Lien referred to in the
preceding paragraphs (a) to (u) inclusive of this definition, so long as
any such extension, renewal or replacement of such Lien is limited to all
or any part of the same property that secured the Lien extended, renewed
or replaced (plus improvements on such property), the indebtedness or
obligation secured thereby is not increased and such Lien is otherwise
permitted by the applicable section above;
(w) Liens on Margin Stock;
(x) in addition to Liens permitted by clauses (a) through (w) above, Liens on
property or assets if the aggregate Indebtedness secured thereby does not
exceed two percent (2%) of Consolidated Assets;
provided that nothing in this definition shall in and of itself constitute or be
deemed to constitute an agreement or acknowledgment by the Agent or any Lender
that the Indebtedness subject to or secured by any such Permitted Lien ranks
(apart from the effect of any Lien included in or inherent in any such Permitted
Liens) in priority to the Obligations.
"PERSON" means an individual, corporation, partnership, limited liability
company, association, joint stock company, trust or trustee thereof, estate or
executor thereof, unincorporated organization or joint venture, Tribunal, or any
other legally recognizable entity.
"PRIME RATE" means on any day a fluctuating rate of interest per annum equal to
the higher of:
(a) the rate of interest per annum most recently announced by Agent as its
reference rate for Canadian Dollar commercial loans made to a Person in
Canada; and
(b) Agent's Discount Rate for Bankers' Acceptances having a maturity of thirty
days plus seventy-five (75) Basis Points.
No Prime Rate charged by any Person shall ever exceed the Highest Lawful Rate.
"PRIME RATE LOAN" means a Loan that bears interest at the Prime Rate.
"RATING AGENCY" means any of S & P or Xxxxx'x, or their respective successors.
"REG U" means Regulation U promulgated by the Board of Governors of the Federal
Reserve System.
"REQUEST FOR AN OFFER OF EXTENSION" means a written request made by Borrowers to
the Lenders to have Required Lenders issue an offer to Borrowers extending the
Maturity Date for a further 364 days.
"REQUIRED LENDERS" means Lenders whose aggregate Percentage Shares exceed fifty
percent (50%).
"RESTRICTED PERSON" means any of US Parent and each Restricted Subsidiary.
"RESTRICTED SUBSIDIARY" means each Borrower, Devon Oklahoma, Devon SFS, Devon
Financing ULC, Devon Operating Company Ltd., Devon Canada and any other
Subsidiary of US Parent that is not an Unrestricted Subsidiary.
"S & P" means Standard & Poor's Ratings Services (a division of McGraw Hill
Companies, Inc.), or its successor.
16
"SCHEDULE I BA REFERENCE BANKS" means the Lenders listed in Schedule I to the
Bank Act (Canada) as are, at such time, designated by Agent, with the prior
consent of Borrowers (acting reasonably), as the Schedule I BA Reference Banks;
provided there shall be no more than 2 Schedule I BA Reference Banks at any
time.
"SCHEDULE II BA REFERENCE BANKS" means the Lenders listed in Schedule II to the
Bank Act (Canada) and the Lenders listed in Schedule III to the Bank Act
(Canada) that are not subject to the restrictions and requirements referred to
in subsection 524(2) of the Bank Act (Canada) as are, at such time, designated
by Agent, with the prior consent of the Borrowers (acting reasonably), as the
Schedule II BA Reference Banks; provided that there shall be no more than 2
Schedule II BA Reference Banks at any time.
"SECURITIES FILINGS" has the meaning given to it in Section 5.6.
"STAMPING FEE RATE" means with respect to any Bankers' Acceptance accepted by
any Lender at any time, seventy-five (75) Basis Points per annum.
"SUBORDINATED US PARENT DEBENTURES" means those certain Convertible Junior
Subordinated Debentures which may be issued by US Parent to Devon Trust pursuant
to the Registration Statement in an aggregate amount not to exceed US
$447,261,200, which will be subordinate to the Obligations.
"SUBSIDIARY" means, with respect to any Person, any corporation, association,
partnership, limited liability company, joint venture, business trust, or other
business or corporate entity, enterprise or organization which is directly or
indirectly (through one or more intermediaries) controlled by or owned fifty
percent or more by such Person, provided that:
(a) associations, joint ventures or other relationships:
(i) which are established pursuant to a standard form operating
agreement or similar agreement or which are partnerships for
purposes of federal income taxation only;
(ii) which are not corporations or partnerships (or subject to the
Uniform Partnership Act) under applicable state Law; and
(iii) whose businesses are limited to the exploration, development and
operation of oil, gas or mineral properties, transportation and
related facilities and interests owned directly by the parties in
such associations, joint ventures or relationships,
shall not be deemed to be "SUBSIDIARIES" of such Person; and
(b) associations, joint ventures or other relationships:
(i) which are not corporations or partnerships under applicable
provincial Law; and
(ii) whose businesses are limited to the exploration, development and
operation of oil, gas or mineral properties, transportation and
related facilities and interests owned directly by the parties in
such associations, joint ventures or relationships,
shall not be deemed to be "SUBSIDIARIES" of such Person.
"TERMINATION EVENT" means:
(a) the occurrence with respect to any ERISA Plan of:
17
(i) a reportable event described in Sections 4043(c)(5) or (6) of ERISA;
or
(ii) any other reportable event described in Section 4043(c) of ERISA
other than a reportable event not subject to the provision for
30-day notice to the Pension Benefit Guaranty Corporation pursuant
to a waiver by such corporation under Section 4043(a) of ERISA; or
(b) the withdrawal of any ERISA Affiliate from an ERISA Plan during a plan
year in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA; or
(c) a complete or partial withdrawal by any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; or
(d) the filing of a notice of intent to terminate any ERISA Plan or
Multiemployer Plan or the treatment of any ERISA Plan amendment or
Multiemployer Plan amendment as a termination under Section 4041 or 4041A
of ERISA; or
(e) the institution of proceedings to terminate any ERISA Plan or
Multiemployer Plan by the Pension Benefit Guaranty Corporation under
Section 4042 of ERISA; or
(f) 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 ERISA Plan or Multiemployer Plan.
"TOTAL CAPITALIZATION" means the sum (without duplication) of:
(a) US Parent's Consolidated Total Funded Debt plus
(b) US Parent's Consolidated shareholder's equity plus
(c) 60% of the outstanding balance of the Devon Trust Securities.
Total Capitalization shall be calculated excluding non-cash write-downs and
related charges which are required under Rule 4-10 (Financial Accounting and
Reporting for Oil and Gas Producing Activities Pursuant to the Federal
Securities Laws and the Energy Policy and Conservation Act of 1975) of
Regulation S-X promulgated by Securities and Exchange Commission Regulation, or
by US GAAP.
"TOTAL FUNDED DEBT" means:
(a) Liabilities referred to in clauses (a), (b), (c), (d), and (e) of the
definition of "Indebtedness", plus
(b) 40% of the outstanding balance of the Devon Trust Securities.
Total Funded Debt shall not include the PennzEnergy Exchangeable Debentures.
"TRIBUNAL" means any government, any arbitration panel, any court or any
governmental department, commission, board, bureau, agency or instrumentality of
the United States of America or Canada or any state, province, commonwealth,
nation, territory, possession, county, parish, town, township, village or
municipality, whether now or hereafter constituted or existing.
"TYPE" means with respect to any Advances, the characterization of such Advances
as US Base Rate Loans, Prime Rate Loans, US Dollar Eurodollar Loans Bankers'
Acceptances or Letters of Credit.
18
"UNIFORM CUSTOMS" means the Uniform Customs and Practice for Documentary Credits
(1993 Revision), International Chamber of Commerce Publication No. 500, as the
same may be amended from time to time.
"UNRESTRICTED SUBSIDIARY" means any corporation, association, partnership,
limited liability company, joint venture, or other business or corporate entity,
enterprise or organization:
(a) which is listed below in this definition, or
(b) in which US Parent did not own an interest (directly or indirectly) as of
June 7, 2002, which thereafter became a Subsidiary of US Parent and which,
within 90 days after becoming a Subsidiary of US Parent, was designated as
an Unrestricted Subsidiary by US Parent under the US Agreement;
provided that in the event any such Subsidiary becomes a Material Subsidiary at
any time, such Subsidiary shall cease to be an Unrestricted Subsidiary at such
time and shall automatically become a Restricted Subsidiary. The Subsidiaries of
US Parent listed on Attachment 1 to this Annex I shall initially be designated
as Unrestricted Subsidiaries.
"US AGENT" means Bank of America, N.A., as administrative agent, under the US
Agreement and its successors and assigns in such capacity.
"US AGREEMENT" means the Amended and Restated US Credit Agreement dated as of
June 7, 2002 and as it may be further amended, supplemented, restated or
otherwise modified and in effect from time to time.
"US BASE RATE LOAN" means a Loan which bears interest at the US Dollar Base
Rate.
"US DOLLAR" or "US $" means the lawful currency of the United States of America.
"US DOLLAR BASE RATE" means for a day, the rate per annum equal to the higher
of:
(a) the Federal Funds Rate for such day plus one-half of one percent (0.5%);
and
(b) the rate of interest per annum most recently established by Agent as its
reference rate for US Dollar commercial loans made to a Person in Canada.
Any change in the US Dollar Base Rate due to a change in the Agent's reference
rate shall be effective on the effective date of such change. No US Dollar Base
Rate charged by any Person shall ever exceed the Highest Lawful Rate.
"US DOLLAR EURODOLLAR LOAN" means a Loan which bears interest at the Adjusted US
Dollar Eurodollar Rate.
"US DOLLAR EURODOLLAR RATE" means, for any US Dollar Eurodollar Loan within a
Borrowing and with respect to the related Eurodollar Interest Period therefor:
(a) the interest rate per annum (carried out to the fifth decimal place) equal
to the rate determined by the Agent to be the offered rate that appears on
the page of the Telerate Screen (or any successor thereto) that displays
an average British Bankers Association Interest Settlement Rate (such page
currently being page number 3750) for deposits in US dollars (for delivery
on the first day of
19
such Eurodollar Interest Period) with a term equivalent to such Eurodollar
Interest Period, determined as of approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Eurodollar Interest
Period; or
(b) in the event the rate referenced in the preceding subsection (a) does not
appear on such page or service or such page or service shall cease to be
available, the rate per annum (carried out to the fifth decimal place)
equal to the rate determined by the Agent to be the offered rate on such
other page or other service that displays an average British Bankers
Association Interest Settlement Rate for deposits in US dollars (for
delivery on the first day of such Eurodollar Interest Period) with a term
equivalent to such Eurodollar Interest Period, determined as of
approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Eurodollar Interest Period; or
(c) in the event the rates referenced in the preceding subsections (a) and (b)
are not available, the rate per annum determined by the Agent as the rate
of interest at which deposits in US dollars (for delivery on the first day
of such Eurodollar Interest Period) in same day funds in the approximate
amount of the applicable US Dollar Eurodollar Loan and with a term
equivalent to such Eurodollar Interest Period would be offered by its
London branch to major banks in the London interbank eurodollar market at
their request at approximately 4:00 p.m. (London time) two Business Days
prior to the first day of such Eurodollar Interest Period.
"US PARENT" means Devon Energy Corporation, a Delaware corporation.
"US GAAP" means those generally accepted accounting principles and practices
which are recognized as such from time to time by the Financial Accounting
Standards Board (or any generally recognized successor) and which, in the case
of US Parent and its Consolidated Subsidiaries, are applied for all periods
after the Closing Date in a manner consistent with the manner in which such
principles and practices were applied to the Initial Financial Statements.
"WITHHOLDING TAX" has the meaning given it in Section 3.2(d) of the Agreement.
ATTACHMENT 1
TO
ANNEX I
UNRESTRICTED SUBSIDIARIES
STATE OR
JURISDICTION
UNRESTRICTED SUBSIDIARY OF EXISTENCE
1. 000000 Xxxxxx Ltd. Alberta
2. 2861259 Canada Inc. Canada
3. 000000 Xxxxxxx Ltd. Alberta
4. 000000 Xxxxxxx Ltd. Alberta
5. 000000 Xxxxxxx Ltd. Alberta
6. 000000 Xxxxxxx Ltd. Alberta
7. 000000 Xxxxxxx Ltd. Alberta
8. 622089 B.C. Ltd. British Columbia
9. 622090 B.C. Ltd. British Columbia
10. 622092 B.C. Ltd. British Columbia
11. 622093 B.C. Ltd. British Columbia
12. 622094 B.C. Ltd. British Columbia
13. 622095 B.C. Ltd. British Columbia
14. 622096 B.C. Ltd. British Columbia
15. 000000 Xxxxxxx Ltd. Alberta
16. 892306 Alberta Ltd. Alberta
17. 918879 Alberta Ltd. Alberta
18. 918884 Alberta Ltd. Alberta
19. 918888 Alberta Ltd. Alberta
20. Acacia Natural Gas Corporation Delaware
21. Adobe Offshore Pipeline Company Delaware
2
22. Amax Petroleum of Canada, Inc. Texas
23. Xxxxxxxx Exploration Inc. (US) Colorado
24. Azerbaijan International Operating Company Cayman Islands
25. Xxxxxxxxx & Xxxxxxx Co., A Ltd. Partnership New Mexico
26. Bonito Pipe Line Company Delaware
27. Braemar Shipping Company Limited Bermuda
28. Bridger Petroleum Corporation Ltd. Alberta
29. Cachuma Gas Processing Company Delaware
30. Canoa Ranch Corporation Delaware
31. Capitan Oil Pipeline Company Delaware
32. Catclaw Pipeline, Inc. Oklahoma
33. Compagnie Atlantique SARL France
34. DBC, Inc. Oklahoma
35. DEC (Holdings), Ltd. Bahamas
36. DEC (International), Ltd. Bahamas
37. DEC Capital S.a x.x. Luxembourg
38. DEC Gas Systems, Inc. Delaware
39. DEC International Holdings, Inc. Delaware
40. DEC Louisiana Leasing, Inc. Delaware
41. DEC Operating, Inc. Delaware
42. DEC SOCO International, Inc. Delaware
43. DEC Technologies, Inc. Delaware
44. DEC, Inc. Delaware
45. Devon Algeria Exploration, Ltd. Bahamas
46. Devon AOG Corporation (fka Xxxxxxxx Oil & Gas Inc.) Alberta
47. Devon ARL Corporation (fka Xxxxxxxx Resources Ltd.) Alberta
3
48. Devon AXL (fka Xxxxxxxx Exploration partnership) Alberta
49. Intentionally deleted.
50. Devon Energy (Delaware) Limited Delaware
51. Devon Energy (Thailand) Ltd. Thailand
52. Devon Energy Agali, Ltd. Bahamas
53. Devon Energy Angola, Ltd. British Virgin Islands
54. Devon Energy Asiatic, Inc. Delaware
55. Devon Energy Beni Suef, Inc. British Virgin Islands
56. Devon Energy Brazil Holdings, Ltd. Bahamas
57. Devon Energy Canada Ltd. Alberta
58. Devon Energy Caspian Corporation British Virgin Islands
59. Devon Energy Caspian Development Corporation British Virgin Islands
60. Devon Energy Charitable Foundation Oklahoma
61. Devon Energy China, Ltd. Bahamas
62. Devon Energy Congo, Ltd. Bahamas
63. Devon Energy Corporation (Oklahoma) Oklahoma
64. Devon Energy Corporation of Argentina Delaware
65. Devon Energy do Brasil Ltda. Brazil
66. Devon Energy Egypt, Inc. Delaware
67. Devon Energy Eurasia, Ltd. Cayman Islands
68. Devon Energy Exploration Brazil, Inc. British Virgin Islands
69. Devon Energy Gabon, Ltd. Bahamas
70. Devon Energy Gas Marketing Company Delaware
71. Devon Energy Ghana, Ltd. Bahamas
72. Devon Energy Global Resources, Ltd. Bahamas
73. Devon Energy Insurance Company Limited Bermuda
4
74. Devon Energy International Company Delaware
75. Devon Energy Intrastate Pipeline Company Delaware
76. Devon Energy Malaysia, Ltd. Bahamas
77. Devon Energy Management Company, L. L. C. Oklahoma
78. Devon Energy Mondah Bay, Ltd. Bahamas
79. Devon Energy Morocco, Ltd. Bahamas
80. Devon Energy Offshore Pipeline Company Delaware
81. Devon Energy Operating Company, L.P. Delaware
82. Devon Energy Pagatan, Ltd. Bahamas
83. Devon Energy Partners A Limited Partnership Oklahoma
84. Devon Energy Petroleum Pipeline Company Delaware
85. Devon Energy Petroleum=s, Ltd. Delaware
86. Devon Energy Port Bouet, Ltd. Bahamas
87. Devon Energy Qatar, Inc. Delaware
88. Devon Energy Red Sea, Inc. British Virgin Islands
89. Devon Energy Sinai, Inc. British Virgin Islands
90. Devon Energy South America, Ltd. Bahamas
91. Devon Energy South East Asia Limited Bermuda
92. Devon Energy Suez, Inc. British Virgin Islands
93. Devon Energy Thai Holding, Ltd. Bahamas
94. Devon Energy Venezuela Corporation, S.A. British Virgin Islands
95. Devon Energy West Africa, Ltd. British Virgin Islands
96. Devon Exploration & Production, Inc. Delaware
97. Devon Exploration do Brazil, Ltda. Brazil
98. Devon Financing Trust Delaware
99. Devon Financing Trust II Delaware
5
100. Devon Gas Corporation Delaware
101. Devon Gas Marketing, Inc. Delaware
102. Devon Gas Operating, Inc. Delaware
103. Devon Gas Services, L.P. Delaware
104. Devon Holding Corporation Delaware
105. Devon Louisiana Gas Services, Inc. Delaware
106. Devon Malta One, Inc. Delaware
107. Devon Malta Two, Inc. Delaware
108. Devon MND Energy Corporation Delaware
109. Devon MND Operating, Inc. Delaware
110. Devon MND Service, Inc. Delaware
111. Intentionally deleted.
112. Devon Pacific Fuels Company Delaware
113. Devon Production Corporation Nevada
114. Devon-Xxxxxx Company Oklahoma
115. Fanar Petroleum Company Egypt
116. Foothills Partnership Alberta
117. Gulf Coast American Corp. Pennsylvania
118. Home Exploration Limited Alberta
119. Home Hydrocarbons Inc. Canada
120. Home Oil Company Limited Canada
121. Home Oil Resources Ltd. (US) Delaware
122. Independent Pipe Line Company Canada
123. Le Bord de la Mer Limited Malta
124. Mexican Flats Service Company, Inc. Delaware
125. Xxxxxxxx Resorts, Inc. Delaware
6
126. MND Exploration & Production, Inc. Delaware
127. MND Gas Services L.L.C. Delaware
128. Xxxxxxxx Gas Gathering, Inc. Delaware
129. Xxxxxxxx Nuclear Inc. Delaware
130. Xxxxxxxx Operating Company Ltd. Alberta
131. Mountain Energy Inc. Alberta
132. Northstar Energy Inc. Delaware
133. Nueces Intrastate Pipe Line Company Nevada
134. Numac Energy (Cenako) Inc. Alberta
135. Numac Energy (US) Inc. Delaware
136. Numac Energy Inc. Alberta
137. Pepco Partners, L. P. Delaware
138. Petrolera Devon (Columbia), Ltd. Bermuda
139. Petrolera Santa Fe, S.A. Argentina
140. Petrolera Santa Fe Southern Cone, Inc. British Virgin Islands
141. Plains Petroleum Limited Alberta
142. PSF Services, L.L.C. Delaware
143. Richland Development Corporation Nevada
144. Richland Properties Company, L.L.C. Oklahoma
145. Richland Transition Company Delaware
146. Sage Creek Processors, L.L.C. Wyoming
147. Santa Fe Energy Resources (Cote d'Ivoire) Ltd. Bahamas
148. Santa Fe Energy Resources of Canada, Inc. Alberta
149. Santa Fe Energy Resources of Myanmar, Ltd. Bahamas
150. Santa Fe Energy Resources of Peru, Ltd. Bahamas
151. Santa Fe Energy Trust Texas
7
152. Xxxxxx-Rainbow Oil (Sask) Ltd. (voluntarily liquidating) Saskatchewan
153. Security Purchasing, Inc. Delaware
154. SFER (Barbados) Ltd. Barbados
155. Sisquoc Gas Pipeline Company Delaware
156. Smart On Resources Inc. Alberta
157. Southwestern Gas Pipeline, Inc. Delaware
158. Strategic Trust Company Cayman Islands
159. Tall Grass Gas Services, L.L.C. Oklahoma
160. The Winnipeg Western Land Corporation Limited Canada
161. The Woodlands Venture Capital Company Delaware
162. Thunder Creek Gas Services, L.L.C. Wyoming
163. Torquay Trading Company Limited Malta
164. Trend Argentina, S.A. Argentina
165. Trend Exploration (PNG) Party Ltd. Papua New Guinea
166. Vermejo Minerals Corporation Delaware
167. Vermejo Park Corporation Delaware
168. Wyoming Gathering and Production Company, Inc. Delaware
ANNEX II
LENDER SCHEDULE
LENDER PERCENTAGE SHARE
------ ----------------
Royal Bank of Canada 22.5% (Cdn.$31,500,000)
The Bank of Nova Scotia 21% (Cdn.$29,400,000)
Bank One, NA (Canada Branch) 35.5% (Cdn.$49,700,000)
Bayerische Landesbank Girozentrale (Toronto Branch) 21% (Cdn.$29,400,000)
----
100% (Cdn.$140,000,000)
Each Lender is a Canadian Resident Lender.
SCHEDULE 1
DISCLOSURE SCHEDULE
None.
SCHEDULE 3
EXISTING INDEBTEDNESS AND FUNDING COMMITMENTS
7.1(l): Debt Schedule
Devon Canada (Xxxxxxxx Notes)
6.55% Medium Term Note Face Value C$ 200,000 08/02/06
7.25% Medium Term Note Face Value C$175,000 07/18/05
6.75%Senior Notes Face Value $400,000 03/15/11
US $275,000,000 (increasable to US $375,000,000) credit 6 years following the
facility provided by Bank of America, N.A., acting closing thereof,
through the Canadian Branch and certain other financing subject to extensions
institutions pursuant to an Amended and Restated
Canadian Credit Agreement dated June 7, 2002
Cdn. $10,000,000 operating credit facility provided by 364 days, subject to
Royal Bank of Canada pursuant to a Letter Loan extensions
Agreement dated July 25, 2002
